If you want to know which investment houses have been getting the infamous “repo” loans from the Federal Reserve Bank of New York in recent weeks, as GATA has wanted to know, you’ll have to wait two years, according to a letter received from the bank today in response GATA’s request for the information.
The delay, the New York Fed’s letter says, is authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Perhaps more interestingly, the New York Fed’s letter, signed by Corporate Secretary Shawn Elizabeth Phillips, contends that the bank is exempt from the federal Freedom of Information Act but tries to comply with its spirit.
Such a claim of exemption was not made by the Federal Reserve’s Board of Governors during GATA’s FOIA lawsuit against it in 2011, in which GATA sought access to the board’s gold-related documents. GATA technically won the case when U.S. District Judge Ellen Segal Huvelle ruled that one such document was illegally withheld and ordered the board to disclose it to GATA and pay the organization court costs of $2,670:
What kind of system of government is it when every week an entity created by ordinary legislation can create enormous amounts of a nation’s currency and disburse it to unidentified parties without any oversight by the people’s elected representatives, news organizations, and ordinary citizens? It sure doesn’t sound like “the land of the free and the home of the brave.”
The New York Fed’s response to GATA can be read below (pdf link):
WeWork’s Quarterly Loss Exploded To $1.3 Billion Ahead Of Failed IPO
WeWork went on a spending spree in the days ahead of its now failed IPO.
The recently insolvent company which until a few months ago had a valuation of $47 billion before it had to be bailed out by SoftBank saw its losses more than double in the third quarter, soaring to $1.25 billion, not much below its loss for the entire 2018. The results, which were reported in a presentation for WeWork creditors – the company has to file financials to the group of creditors who hold its “public” debt – seen by Bloomberg and the Financial Times, revealed why the cash incinerating office sublettor careened towards a cash crunch when its IPO plans and a linked debt financing collapsed in September.
In a furious money-burning attempt to impress investors with its market share, WeWork opened almost 100 offices in the third quarter, bringing its total to 625, and helping lift WeWork’s net revenues in the period by 94% from 4482 million a year earlier to $934 million. That was the good news: the bad news is that WeWork affirmed that it continues to lose more than two dollars for every dollar the group generated in sales in the period.
In its unprecedented spending spree to spend all of its IPO proceeds before it even went public, the company also said it added 115,000 desks in the third quarter, taking its total to 719,000. However, the reason why such hollow growth would end up resulting in an even greater loss is that WeWork reported 609,000 memberships at the end of Q3, meaning its overall occupancy rates slid as it raced to open new locations to 79 per cent at the end of the third quarter from 82 per cent at the end of June.
WeWork’s bizarre growth at any price would turn out to be its former messiah CEO’s last decision: Adam Neumann stepped down as chief executive in September as the IPO fell apart as investors balked at the thought of making the megalomaniac the world’s first immaculately coiffed, immortal trillionaire.
After the IPO fell apart, WeWork’s biggest shareholder, SoftBank, pumped another $1.5 billion into the company in October to prevent the company from running out of cash in November, and stabilize its finances while taking majority control of the company, installing the former boss of its US telecom unit Sprint, Marcelo Claure, as executive chairman. The Japanese telecom-turned-venture capitalist group also arranged a new $5bn loan for WeWork and has agreed to buy $3bn of the company’s shares from investors and employees including Mr Neumann in the coming weeks. Because who more deserves a $1+ billion golden parachute than Neumann.
Since his arrival, Claure embarked on a cost-cutting drive and is in the process of firing 4,000 of the company’s roughly 14,000 employees, with large cuts in the US expected to begin next week, according to multiple people briefed on the plans. It remains unclear how the company plans on growing its revenue if it no longer has access to unlimited funds; for the answer check in next quarter when we expect both WeWork’s revenue and net income to take another sharp leg lower.
WeWork is also selling several of the companies it acquired in recent years and has drastically slowed its pace of new lease signings.
The company is seeking a new CEO, and T-Mobile’s John Legere is among the candidates.
But for now, none of this post-failed IPO activity is reassuring bond investors at all…
An instructor at the University of California-Berkeley stirred anger after he called Americans who live in rural areas “bad people” who deserve “uncomfortable lives” on Twitter.
Jackson Kernion, according to his website, has been teaching multiple philosophy courses as a graduate student instructor at UC-Berkeley since 2013.
In the now-deleted Twitter postpublished on Nov. 5, Kernion explained why he thought it is plausible to shame rural Americans.
“I unironically embrace the bashing of rural Americans. they, as a group, are bad people who have made bad life decisions,” Kernion wrote.
“Some, I assume, are good people. But this nostalgia for some imagined pastoral way of life is stupid, and we should shame people who aren’t pro-city.”
Before turning to critique the rural American lifestyle, Kernion wrote in another post about affordable healthcare for rural Americans.
He said he believed it would mean they have to be subsidized by “those who choose a more efficient way of life.”
“Rural healthcare should be expensive!” he wrote.
“And that expense should be borne by those who choose rural America!”
“It should be uncomfortable to live in rural America. It should be uncomfortable to not move,” he added.
America’s rural communities, which tend to be older and poorer than urban areas, usually face more challenges than their urban counterparts in accessing health care, internet, and other services.
A survey conducted by Harvard’s School of Public Health, NPR News, and the Robert Wood Johnson Foundation reports this May that four in ten rural Americans have encountered problems affording medical bills, housing, or food in the past few years.
Kernion tried to back his points with economic arguments about not making rural life “artificially cheaper.” Still, it didn’t take long for that discussion to escalate into shaming the rural American population.
The next day, Kernion wrote on Twitter in what appears to be an apology that he “made a bad post” and would “reflect on it.”
“My tone is way crasser and meaner than I like to think I am,” he wrote. He eventually deactivated his Twitter account altogether.
UC-Berkeley has yet to make any response regarding the internet backslash.
Who Is Showing What? A Complete Guide To All The Streaming TV Original Shows
Walt Disney’s much-anticipated debut of its new streaming video service was marred by early technical glitches that prevented some users from logging in and created difficulties for others who wanted to watch movies and shows, a result of a problem stemming in part from computer servers operated by another company. Still, there was enough excitement and buzz on social media and worked successfully for many subscribers, helping push the company’s stock 1.4% higher.
Yet once the initial euphoria fizzles, consumers will be far more focused on the product line ups at all the various direct streaming services that are now popping up on a monthly, if not weekly basis.
To help dispel some of the confusion, we highlight some of the original content titles coming to Netflix, Amazon Prime Video, Hulu and HBO that will be used to differentiate all the various steaming services in their pursuit of your monthly $9.99 (plus or minus).
As Bank of America notes, The Irishman, 6 Underground and The Witcher as most important for Netflix, while a large number of first-season series could include some surprises. There is also an increasing number of (expensive to make) films in the lineup from Netflix, with BofA noting that it sees increased uncertainty in this push as to how big name films will impact subscriber acquisition compared to Netflix’s more traditional route of TV originals.
The Netflix lineup is expected to continue to widely outpace originals releases from Amazon, Hulu and HBO. HBO’s Watchmen and His Dark Materials, based on popular fantasy/comic IP, is expected to aid AT&T’s new service. Additionally, there is a summary of original releases from Apple TV+ and Disney +. Titles highlighted in bold in the table below are those which BofA thinks have the potential garner larger audiences, although surprises likely lurk among the new season launches.
Finally, for those asking who is currently winning the global direct streaming wars, the answer remains Netflix by a mile, but Amazon is rapidly catching up…
… while in the US alone it is increasingly a three-way fight between Netflix, Hulu and Amazon Prime.
We are witnessing “unprecedented” crop failures all across the United States, but the big mainstream news networks are not talking too much about this yet.
As you will see below, local news outlets all over the nation are reporting the disasters that are taking place in their own local areas, but very few people are putting the pieces of the puzzle together on a national level. The endless rain and horrific flooding during the early months of this year resulted in tremendous delays in getting crops planted in many areas, and now snow and bitterly cold temperatures are turning harvest season into a complete and utter nightmare all over the country. I am going to share with you a whole bunch of examples below, but first I wanted to mention the snow and bitterly cold air that are rolling through the middle of the nation right now…
A wintry weather pattern that brought single-digit temperatures and more than a foot of snow to parts of the Upper Midwest rolled across a wide swath of the nation Monday, threatening to break hundreds of records and bring a deep freeze as far south as Florida.
“The coldest surge of arctic air so far this season will bring widespread record low temperatures for much of the central and eastern U.S. even down to the Gulf Coast,” said Kwan-Yin Kong, a meteorologist with the National Weather Service’s Weather Prediction Center.
We are being told that “more than 300 daily records” are likely to be broken, and this will be the final nail in the coffin for this harvest season for countless numbers of farmers.
And even without this latest wave of bitterly cold weather, this was already going to be the worst year for U.S. agriculture that most people can remember. The following are 12 examples of the crop disasters that we are witnessing right now…
#1 North Dakota: “Agriculture Secretary Sonny Perdue has approved North Dakota’s request for a Secretarial disaster designation for 47 counties related to late season rainfall and the October snowstorm. The declaration came on Friday, Nov. 8, the same day that Sen. John Hoeven, R-N.D., hosted Bill Northey, U.S. Department of Agriculture’s under secretary for farm production and conservation, to hear from producers at a roundtable and see the impacts of flooding and the early blizzard during a field tour in the Red River Valley.”
#2 Northwest Minnesota: “Minnesota Gov. Tim Walz asked the U.S. agriculture secretary on Thursday to declare a disaster for 12 counties of northwestern Minnesota where farmers are struggling through a very difficult harvest season. The governor said in a letter to Secretary Sonny Perdue that unrelenting bad weather has come on top of challenges farmers were already facing from low commodity prices and trade uncertainties. He told Purdue how the region’s crops have fallen victim to flooding, disease and freezing temperatures, leaving many producers unable to harvest them.”
#3 Iowa: “Last week, according to the Iowa weekly growing season report for the week ending Nov. 3, Iowa’s average temperature was 33 degrees, 12.6 degrees below normal, and with the southerly dip in the jet stream came multiple fast-moving winter-type systems through Iowa during the week, bringing a statewide average of 2.4 inches of snow. Mason City farmer Kevin Pope said with the early snow, all harvest has been halted.”
#4 Ohio: Three local counties are among the 14 in Ohio that the United States Department of Agriculture said are primary natural disaster areas. Champaign, Clark and Miami counties were added to a growing list of designated primary natural disaster areas, which means farmers in those counties can apply for disaster loans. Farmers are eligible only if they suffered a 30% loss in crop production or a physical loss of livestock, livestock products and real estate.
#5 The Red River Valley: “Near Grand Forks, Minnesota, successive nights of subfreezing temperatures from late October into early November caused an estimated $45 million in damage to around 9,000 acres of red and yellow potato crops in the Red River Valley. Wet conditions in October delayed the potato harvest that usually occurs around Oct. 1. This left about half of the red and yellow crops, which are grown for the fresh market, vulnerable to frost damage. This is what Ted Kreis, spokesman for the Northern Plains Potato Growers Association, told Fresh Plaza on Nov. 4.”
#6 Illinois: “Pritzker filed an appeal of the agency’s denial last week, saying the federal government is withholding assistance from 1.4 million Illinois residents affected by the flooding, which the Illinois Emergency Management Agency determined was the state’s worst in more than 25 years. The conditions caused delays for farmers planting spring crops, including corn and soybean, and prompted the U.S. Department of Agriculture to declare an agriculture disaster in the state in August.”
#7 Colorado: “There is no doubt that extreme weather has greatly impacted agricultural producers over the last several years, and 2019 is no exception,” said Clarice Navarro, executive director for Farm Service Agency in Colorado. “With record amounts of crops prevented from planting nationwide and other devastation, more than $3 billion is available through this disaster relief package passed by Congress and signed by President Trump in early June.”
#8 Kentucky: “The federal government has approved Kentucky’s request for a disaster declaration for counties in which farmers’ crops were negatively affected by this summer’s drought. In an Oct. 16 letter to Brian Lacefield, the state executive director of the U.S. Department of Agriculture’s Farm Service Agency, Kentucky Agriculture Commissioner Ryan Quarles asks that the federal agency consider a disaster declaration for Kentucky counties that “have suffered losses due to the extreme heat and drought.”
#9 South Carolina: “U.S. Secretary of Agriculture Sonny Perdue recently designated six counties in South Carolina as natural disaster areas due to drought. They are: Bamberg, Calhoun, Kershaw, Lexington, Orangeburg and Richland.”
#10 Birch Hills County: “Birch Hills County has joined the County of Grande Prairie and Saddle Hills County in declaring an agriculture disaster. In a release, they say some farmers still have up to 50 percent of this year’s crop that is unharvested, while Hay crops in Birch Hills were harvested late, with some not able to be taken off the ground at all.”
#11 Crookston, Minnesota: “Sugar beet and potato farmers whose crops have been hard hit by excessive moisture this harvest converged on Crookston Tuesday, Nov. 5, to tell U.S. Rep. Collin Peterson about their unprecedented crop losses.”
#12 Idaho: There was sadness and dismay in eastern Idaho’s potato community this weekend as the 2019 harvest wound down and growers began tallying up their losses from October’s disastrous freeze while pondering what to do with the tons of unusable tubers it left behind. This season’s harvest will be marked by tons of decaying potatoes for which there is no home.
Are you starting to get the picture?
I could have easily doubled the size of that list. People all over the country are writing to me and telling me how bad things are in their areas, and ultimately all Americans will feel the pain of this crisis because all of us will soon be paying significantly higher prices for food at the grocery store.
And we don’t even know the full extent of this crisis yet, because the bitterly cold air currently ripping through the middle of the nation is going to cause even more crop failures…
The blast of record-breaking Arctic air that’s charging across the country will bring the growing season to a screeching halt in much of the southern and eastern U.S. this week.
Freeze watches have been posted as far south as the Panhandle of Florida, where Pensacola should see a low temperature of 31 degrees by early Wednesday morning. “Conditions can kill crops, new growth and sensitive vegetation,” the National Weather Service in Mobile, Alabama, warned.
A lot of people out there are still not taking this seriously.
Look, despite all of our advanced technology we still have to grow the food that we eat, and we can only grow food if the weather cooperates.
And as I discussed yesterday, experts are telling us that we should expect a very bitterly cold winter ahead of us.
This is a crisis that isn’t going away, and it is likely to continue to get worse in the months ahead.
Oil price rebounded after three days lower after a report that OPEC sees a potential reduction in supply from outside of the group.
When the OPEC news hit the market, prices “started to rally from the red to the green,” said Bob Yawger, future divisions director for Mizuho Securities in New York. “Until this turnaround, things were getting ugly.”
And now all eyes are on inventories…
API
Crude -0.5mm (+1.5mm exp)
Cushing -1.2mm
Gasoline +2.3mm
Distillates +0.8mm
A surprise crude draw and the end of the streak of Cushing builds corresponds with an end to the streak of draws in products…
Source: Bloomberg
WTI had rallied on the day and hovered around $57.25 before the data. Once API reported the surprise draw, WTI jumped higher…
“The market is digesting chairman Powell’s speech,” said John Kilduff, partner at Again Capital in New York. “This is a bit of positive pull up from Powell, it’s the fact that the Fed is going to be on hold because the economic outlook is looking brighter and is a key aspect to the energy market these days because of the focus on the demand.”
Cisco Tumbles After Company Unexpectedly Slashes Guidance
Looks like we can add Cisco to the list of tech companies that will be aggressively buying back its stock to deflect attention from deterioration fundamentals.
After the close, the internet giant reported Q1 revenue of $13.16 billion, up +0.7% y/y, and better than the consensus estimate of $13.09 billion, resulting in GAAP EPS of $0.68, down 12% Y/Y. As with most other tech companies (and recall that 97% of S&P companies now rely on Non-GAAP numbers to entice investors), Cisco also reported non-GAAP EPS, which predictably were far above the GAAP number, with Q1 adjusted EPS of $0.84, coming well above the $0.81 estimate, and above last year’s non-GAAP number.
How did Cisco go from $0.68 GAAP to $0.84 non-GAAP? The company was kind enough to provide a bridge that had more adjustments than even perennial non-GAAPer, IBM.
But while the market is now used to massive non-GAAP fudges to make earnings more palatable, as was the case here, the reason why CSCO stock is tumbling after hours, is due to the company’s unexpectedly dour forecast, which sees the high end of its EPS range of $0.75-$0.77 below the consensus estimate of $0.79, while Revenue is now expected to decline 3% to 5% in Q2 Y/Y, an acute disappointment to consensus estimates of 2.7% growth; not even the company’s benign gross profit (which of course was also “adjusted”) margin range of 64.5% to 65.5% vs estimates of 64.6% was enough to offset the dour picture unveiled by the company. The company also said that its real, GAAP EPS, would be just $0.61-$0.67 in Q2.
Commenting on the quarter’s results, Chuck Robbins, chairman and CEO of Cisco said “we delivered a solid quarter against a challenging macro environment” adding that “We’re focused on continuing to drive innovation, transform our business and exceed our customers’ expectations.”
It wasn’t immediately clear what prompted the company to downgrade its revenue guidance, although it is probably safe to assume that China has something to do with it.
Following the poor guidance, shares tumbled over 6% in post-market, dropping as low as $45.1 before rebounding modestly trading to $46.11.
The first time I ever heard the name of U.S. ambassador to Ukraine Marie Yovanovitch was in early March of this year. It did not come from a Ukrainian or an ally of President Trump. It came from a career diplomat I was interviewing on background on a different story.
The diplomat, as I recall, suggested that Yovanovitch had just caused a commotion in Ukraine a few weeks before that country’s presidential election by calling for the firing of one of the prosecutors aligned with the incumbent president.
The diplomat related that a more senior State official, David Hale, was about to travel to Ukraine and was prepping to be confronted about Yovanovitch’s comments. I remember the diplomat joking something to the effect of, “we always say that the Geneva Convention is optional for our Kiev staff.”
The Geneva Convention is the UN-backed pact enacted during the Cold War that governs the conduct of foreign diplomats in host countries and protects them against retribution. But it strictly mandates that foreign diplomats “have a duty not to interfere in the internal affairs of that State” that hosts them. You can read the convention’s rules here.
I dutifully checked out my source’s story. And sure as day, Yovanovitch did give a speech on March 5, 2019 calling for Ukraine’s special anticorruption prosecutor to be removed. You can read that here.
And the Ukraine media was abuzz that she had done so. And yes, Under Secretary of State Hale, got peppered with questions upon arriving in Kiev, specifically about whether Yovanovitch’s comments violated the international rule that foreign diplomats avoid becoming involved in the internal affairs and elections of their host country.
Hale dutifully defended Yovanovitch with these careful words. “Well, Ambassador Yovanovitch represents the President of the United States here in Ukraine, and America stands behind her statements. And I don’t see any value in my own elaboration on what they may or may not have meant. They meant what she said.” You can read his comments here.
Up to that point, I had focused months of reporting on Ukraine on the U.S. government’s relationship with a Ukraine nonprofit called the AntiCorruption Action Centre, which was jointly funded by liberal megadonor George Soros’ charity and the State Department. I even sent a list of questions to that nonprofit all the way back in October 2018. It never answered.
Given that Soros spent millions trying to elect Hillary Clinton and defeat Donald Trump in 2016, I thought it was a legitimate public policy question to ask whether a State Department that is supposed to be politically neutral should be in joint business with a partisan figure’s nonprofit entity.
State officials confirmed that Soros’ foundation and the U.S. embassy jointly funded the AntiCorruption Action Centre, and that Soros’ vocal role in Ukraine as an anticorruption voice afforded him unique access to the State Department, including in 2016 to the top official on Ukraine policy, Assistant Secretary of State Victoria Nuland. (That access was confirmed in documents later released under FOIA to Citizens United.)
Soros’ representatives separately confirmed to me that the Anti-Corruption Action Centre was the leading tip of the spear for a strategy Team Soros devised in 2014 to fight corruption in Ukraine and that might open the door for his possible business investment of $1 billion. You can read the Ukraine strategy document here and Soros’ plan to invest $1 billion in Ukraine here.
After being tipped to the current Yovanovitch furor in Ukraine, I was alerted to an earlier controversy involving the same U.S. ambassador. It turns out a senior member of Congress had in spring 2018 wrote a letter to Secretary of State Mike Pompeo alleging the ambassador had made anti-Trump comments and suggesting she be recalled. I confirmed the incident with House Rules Committee Chairman Pete Sessions and got a copy of his letter, which you can read here. Yovanovitch denies any such disloyalty to Trump.
Nonetheless, I had a career diplomat and a Republican lawmaker raising similar concerns. So I turned back to the sources I had developed starting in 2018 on Ukraine and began to dig further.
I learned that Ukrainian officials, particularly the country’s prosecutors, viewed Yovanovitch as the embodiment of an activist U.S. embassy in Kiev that ruffled feathers by meddling in internal law enforcement cases inside the country.
My sources told me specifically that the U.S. embassy had pressured the Ukraine prosecutors in 2016 to drop or avoid pursuing several cases, including one involving the Soros-backed AntiCorruption Action Centre and two cases involving Ukraine officials who criticized Donald Trump and his campaign manager Paul Manafort.
To back up their story, my sources provided me a letterthen-embassy official George Kent wrote proving it happened. State officials authenticated the letter. And Kent recently acknowledged in this testimony he signed that letter. You can read the letter here.
With the help of a Ukrainian American intermediary and the Ukraine general prosecutor’s press office, I then secured an interview in mid-March 2016 with Ukraine’s then top prosecutor, Yuriy Lutsenko. In the interview that was videotaped and released for the whole world to see, Lutsenko alleged that in his first meeting in 2016 with Yovanovitch, the U.S. ambassador conveyed the names of several Ukrainians she did not want to see investigated and prosecuted. He called it, colloquially, a “do not prosecute list.”
The State Department denied such as list, calling it a fantasy, and I quoted that fair comment in my original stories. But before I published, I held the Lutsenko interview for a few days to do more reporting. State arranged for me to talk to a senior official about the Lutsenko-embassy relationship.
I provided the names that Lutsenko claimed had been cited by the embassy. That senior official said he couldn’t speak to what transpired in the specific meeting between Yovanovitch and Lutsenko. But that official then provided me this surprising confirmation: “I can confirm to you that at least some of those names are names that U.S. embassy Kiev raised with the General Prosecutor because we were concerned about retribution and unfair treatment of Ukrainians viewed as favorable to the United States.”
In other words, State was confirming its own embassy had engaged in pressure on Ukrainian prosecutors to drop certain law enforcement cases, just as Lutsenko and other Ukrainian officials had alleged.
When I asked that State official whether this was kosher with the Geneva Convention’s prohibition on internal interference, he answered: “Kiev in recent years has been a bit more activist and autonomous than other embassies.”
More recently, George Kent, the embassy’s charge d’affaires in 2016 and now a deputy assistant secretary of state, confirmed in impeachment testimony that he personally signed the April 2016 letter demanding Ukraine drop the case against the Anti-Corruption Action Centre.
He also testified he was aware of pressure the U.S. embassy also applied on Ukraine prosecutors to drop investigations against a journalist named Vitali Shabunin, a parliamentary member named Sergey Leschenko and a senior law enforcement official named Artem Sytnyk.
Shabunin helped for the AntiCorruption Action Centre that Soros funded, and Leschenko and Sytnyk were criticized by a Ukrainian court for interfering in the 2016 US election by improperly releasing or publicizing secret evidence in an ongoing case against Trump campaign chairman Paul Manafort.
It’s worth letting Kent’s testimony speak for itself. “As a matter of conversation that U.S officials had with Ukrainian officials in sharing our concern about the direction of governance and the approach, harassment of civil society activists, including Mr. Shabunin, was one of the issues we raised,” Kent testified.
As for Sytnyk, the head of the NABU anticorruption police, Kent addded: “We warned both Lutsenko and others that efforts to destroy NABU as an organization, including opening up investigations of Sytnyk, threatened to unravel a key component of our anti-corruption cooperation.”
As the story of the U.S. embassy’s pressure spread, a new controversy erupted. A Ukrainian news outlet claimed Lutsenko recanted his claim about the “do-not-prosecute” list. I called Lutsenko and he denied recanting or even changing his story. He gave me this very detailed response standing by his statements.
But American officials and news media eager to discredit my reporting piled on, many quoting the Ukrainian outlet without ever contacting Lutsenko to see if it was true. One of the American outlets that did contact Lutsenko, the New York Times, belatedly disclosed today that Lutsenko told it, like he told me, that he stood by his allegation that the ambassador had provided him names of people and groups she did not want to be targeted by prosecutors. You can read that here.
It is neither a conspiracy theory nor a debunked or retracted story. U.S. embassy officials DID apply pressure to try to stop Ukrainian prosecutors from pursuing certain cases.
The U.S. diplomats saw no problem in their actions, believing that it served the American interest in combating Ukrainian corruption. The Ukrainians viewed it far differently as an improper intervention in the internal affairs of their country that was forbidden by the Geneva Convention.
That controversy is neither contrived, nor trivial, and it predated any reporting that I conducted. And it remains an issue that will need to be resolved if the Ukraine and U.S. are to have a more fruitful alliance moving forward.
Stocks Shrug Off China Trade Talks Tumult, Decouple From Bonds
Overheard today in Washington and the markets…
From the moment the cash markets opened, US equity markets shot higher on a series of pumps, decoupling completely from the bond market…
Source: Bloomberg
DIS and AAPL (+80 pts) dominated The Dow’s move and one look at AAPL’s intraday action shows its clear a VWAP-based buyback program was responsible for the push (and Disney’s NFLX-esque surge on the back of comments on users for Disney+ – considering it was given free to Verizon customers is intriguing)…
Source: Bloomberg
As the chart below shows, at 1355ET headline shit that trade talks had hit a snag – stocks tumbled. However, algos immediately bid it back on the back of absolutely nothing at all and once it has erased the drop, stocks fell again……
Source: Bloomberg
The market’s view of the likelihood of a trade deal has been fading for 7 straight days…
Source: Bloomberg
Today’s gains were also dominated by defensives with cyclicals ending lower…
Source: Bloomberg
And as rates have turned lower, momentum stocks are soaring again…
Source: Bloomberg
Bonds were bid again today (now that the Abbvie rate-locks from last week have been lifted) with the long-end notably outperforming…
Source: Bloomberg
30Y Yields are down 10bps from Thursday’s spike highs…
Source: Bloomberg
The dollar levitated in a rather surprisingly linear manner…
Source: Bloomberg
Cryptos were relatively quiet for a second day…
Source: Bloomberg
Precious Metals diverged from copper again today as crude spiked at the US cash open…
Source: Bloomberg
Gold pushed higher today…
And crude suddenly found a bid at the US cash equity open…
Finally, as stocks reach record highs, the SMART Money flow is not following through…
Source: Bloomberg
And the last time Hong Kong stocks decoupled like this from US stocks, it was the latter that ended up catching down…
Source: Bloomberg
And, as Bloomberg reports, extremely low temperatures rivaling the chill of the “Blue Norther” in 1911 sent wholesale electricity prices surging early Wednesday across the eastern U.S. Average prices for power at a major hub in PJM, the grid stretching from New Jersey to Illinois, jumped by more than 1,700%, the biggest gain since 2017.
“Demand just really over-performed,” said Elliot Gordon, an analyst at energy data provider Genscape Inc.
President Trump’s Key Manufacturing Industry Group Attacked By Chinese Hackers
A new report from Reuters says Chinese hackers attacked the National Association of Manufacturers (NAM) over the summer as the trade war between Washington and Beijing intensified.
Sources say NAM hired a cybersecurity firm to minimize the breach and prevent further intrusion from Chinese hackers.
NAM is considered an influential Washington-based industry group that has been very critical of China’s abusive trade practices.
“For too long, China has reaped the rewards of unfair trade practices and intellectual property theft, exploiting loopholes in decades-old agreements,” NAM President and CEO Jay Timmons said in a 2018 statement.
It’s obvious why Chinese hackers attacked NAM — because they’re are a leading voice in the trade war, but sources told Reuters that it’s unclear what data was stolen.
NAM Spokeswoman Erin Streeter said, “we know we are a target for cyber-attacks. We identified suspicious activity relating to certain company systems and investigated the matter.”
Streeter said the cybersecurity firm isolated the breach and has since made NAM networks secure.
Other sources told Reuters that the hack could’ve been Chinese hackers attempting to steal critical documents relating to a prior meeting between President Trump and Timmons.
President Trump spoke at a 2017 NAM conference, in which he said: “the era of economic surrender is over.” Timmons called President Trump a “true champion” of U.S. manufacturing.
It should be obvious that the trade war is evolving to other forms of warfare, such as cyberwar.
It’s only a matter of time before tensions explode again, and if President Trump doesn’t get a Phase 1 trade deal, then what happens? More tariffs? An escalation of the trade war is likely.
