Category: zerohedge

Authored by Mark Orsley, PrismFP head of macro strategy

• The non-fundamental flattening reverses as the case for steepeners moves into “goldilocks” territory
• Powell makes watershed comments on the Dollar
• Deficits are the main non-economic data driven reason why the Fed will cut

On Tuesday we discussed how the curve flattening in the US over the last week made very little fundamental sense and provided an attractive risk/reward entry point. As the great Ron Burgundy said, “well that escalated quickly.”

On Tuesday 2s10s was at the bottom of the range and on Friday we are back at the top of the range where you can actually think about booking profits. US 2s10s hit trend support and bounced firmly. Notice the higher lows being put into place after a broken downtrend. Short-term you can take some profits but the long-term bullish technical narrative is still firmly in place…

The case for the steepener has only strengthened since Tuesday. On the one hand, the data deterioration theme got solidified with another labor market indicator showing rate-of-change weakness (JOLTS), but on the other hand there was surprisingly good inflation data and better claims.

I am not trying to pour cold water on the CPI as it was firm in all aspects. You saw some payback of some of the “transitory” factors that were roundly expected to bounce with a bit of help from tariffs so it was a nice number. However, it is important to remember that the Fed’s preferred inflation metric is of course Core PCE. Ironically, that will arrive just before the July FOMC but do note that Core PCE remains below the Fed’s target.

Further, in the Fed’s newfangled mindset driven by the new core (the Average Inflation Targeting {AIT} clan of Williams, Clarida, Brainard, Evans), inflation on an average basis is still not where they would like it to be. If you look over the last five years, Core PCE has only been above the 2% target just 8 months out of 60 months.

Importantly, Fed officials, with CPI data in hand, were roundly dovish so you need to consider what the Fed WILL DO not what you think they SHOULD DO. Bostic and Barkin had a couple dovish twist but neither are voting members so let’s focus on the voters:

• Powell: “we’ve signaled that we’re open to accommodation; monetary policy hasn’t been as accommodative as thought”
• Williams: “arguments for adding accommodation have strengthened”
• Quarles: “there are significant risks out there (despite US economy being strong)”
• Brainard: “supports softening the rate path due to risks and low inflation”
• Evans: “a couple rate cuts could boost inflation; nervous about inflation”
• FOMC Minutes: “MANY Fed officials saw strong rate cut case amid rising risks; MANY saw more accommodation warranted in the near-term”

The Brainard comment is exactly what we are talking about. So yes CPI was firm, but inflation as measured by the Fed’s preferred metric is still below and averaging well below the Fed’s target.

Getting back to the steepener, isn’t this a goldilocks scenario for further steepening?

• Continued data deterioration which signals end of cycle
• Firmer inflation data
• Fed that is about to cut rates and possibly have two more additional doves added to the board

In other words stagflation that is likely driven by supply side considerations for you neo-Keynesians out there. The front end will be pegged lower by the Fed and a back end that can trade heavy due to the better inflation, and that is what has driven us back to the upper end of the range in steepeners.

It was also notable how poorly the 30yr bond auction went yesterday that saw weak bid-to-cover along with a plunging indirect bid (or lack thereof). Suddenly, foreign investors are shunning the long end.

Why would you buy the long end when you can buy the front end where the Fed has your back? Also note per Quarles that when the Fed starts to buy Treasurys again via SOMA, the average maturity the Fed purchases will shift down more into the front end. Therefore, I am ok with taking partial profits and playing the range on the curve, but the long-term bull case for steepeners has only gotten better this week.

I wanted to highlight this one comment from Powell separately because I think it is vitally important. Chair Powell said:

“Do not assume the US Dollar status as a reserve currency is permanent.”

I mean….WOW! Does anyone recall a Fed chair outright talking down the Dollar like that? First I would say that is Gold bullish.

Gold is in the midst of forming a bull flag pattern. Depending on the breakout level of the flag, the target will be up around 1560ish…

However let’s get to the heart of that statement. Powell was referring to the US fiscal deficit and what that would mean for the Dollar. The deficit has been increasingly coming up in Powell’s communication. He had it noted as a concern in his statement to Congress this week as well as in the Q&A.

“And I remain concerned about the longer-term effects of high and rising federal debt, which can restrain private investment and, in turn, reduce productivity and overall economic growth. The longer-run vitality of the U.S. economy would benefit from efforts to address these issues.”

This is the main point you should chew on this weekend; you may disagree with my data deterioration theme which gives the Fed reasons to cut, but do not miss this important point why the Fed will cut:

Rising deficits which causes increase treasury supply at a time when foreigners are losing their appetite to fund the US govt (as noted above in the bond auction) means the Fed needs to talk dovish/cut rates/provide accommodation/inject liquidity in order to keep yields from rising. We saw what happens when front end yields like 1y1y rise above 3% as it did in Q3 2018; the system breaks.

As I said in Tuesday’s note, we are seeing this issue play out in the FF/IOER spread whose widening is purely on the back of too much government debt sitting on bank balance sheets. The Fed is struggling to control front end rates and you cannot have rates rising or this whole economic cycle and market will fall apart.

The Fed has to ease, long-term economic trends show data deterioration, but there appears to be a bit of inflation creeping into the pipeline, i.e. stagflation. That all means steeper curves and now higher gold prices.

via ZeroHedge News https://ift.tt/32rdWbA Tyler Durden

Oracle shares tumbled on Friday after the networking giant lost a critical court case against the Pentagon and Amazon. The loss will allow the DoD to proceed with awarding a $10 billion contract to one of the two finalists – a group that includes Amazon and Microsoft.

Ever since the Pentagon named Amazon a finalist for the contract, critics have accused Amazon and the Pentagon of conflicts of interest, claiming that Amazon effectively secured the extremely lucrative project before the bidding even began. Earlier this week, WSJ publicized new evidence showing that senior Amazon executives met with senior DoD officials, including then-Defense Secretary James Mattis, to discuss the project before the bidding even began.

The Pentagon has already delayed its decision on who will get the contract to build the Pentagon’s new “war cloud” infrastructure, known as the Joint Enterprise Defense Infrastructure, or JEDI. And some suspected that the decision would be delayed yet again due to the court challenge.

Finishing JEDI is expected to take up to a year, making the winner of the contract a de facto long-term partner with the Pentagon and a major military contractor in their own right.

The computing project would store and process vast amounts of classified data, allowing the Pentagon to use artificial intelligence to speed up its war planning and fighting capabilities.

The court ruled in favor of the DoD and Amazon, saying Oracle had not met certain criteria when bids were due.

The JEDI decision is due next month, and the Pentagon confirmed that Microsoft and Amazon are the final two contenders.

At this point, if AWS gets the contract, the company and the DoD will be dogged by these suspicion, which could hurt Amazon’s chances. Despite Jeff Bezos’s highly visible feud with President Trump, it appears his company is still the front-runner to win the contract.

On May 24, Oracle filed an updated complaint with the US Court of Federal Claims alleging that the procurement process for JEDI had been rife with conflicts of interest.

Oracle alleged that at least two Amazon employees, Deap Ubhi (who was also briefly employed at the Pentagon before returning to Amazon) and Anthony DeMartino, improperly influenced the process to favor AWS at the expense of other competitors. Oracle claims these men helped influence the Pentagon’s decision to structure JEDI as a ‘winner-take-all’ contract, ensuring that Amazon, the cloud computing industry leader, would win the entire $10 billion. These claims have caught the attention of some lawmakers, who have started looking into the bidding.

At this point, it seems just as likely that the contract could go to Microsoft. That would be a major blow for AWS’s market leader status, and could impact the company’s revenue guidance and, ultimately, its share price. But Amazon is still the industry leader, and its lobbying efforts clearly ran pretty deep.

Bezos might still be able to pull it off, and in the process, gain access to the largest repository of classified defense-related intelligence this country has ever seen.

via ZeroHedge News https://ift.tt/2YRKBoH Tyler Durden

Via Bloomberg macro strategist Mark Cudmore,

The UK Is Staring Into The Abyss Of A Currency Crisis

The pound is slumping and yet its fundamental outlook gets even gloomier by the day.

When any asset moves in an almost-straight line for more than two months, there’s a natural instinct to wonder when the pullback is due. When it comes to sterling, there’s little indication the ongoing decline is stretched. Any relief rallies will likely be weak and brief.

The Bloomberg Pound Index has fallen on 38 of the past 48 trading days. Currency weakness is usually a good release valve for economic pressure, but all the signs are that it needs to fall much further.

The collapse in PMIs raises the specter the country is heading for recession.

Worryingly, consensus forecasts for the current-account deficit are widening rapidly, now at 4.2% for 2019, from a 3.7% projection only one month ago and a 3.25% prediction six months ago. This is reminiscent of an EM currency.

It’s not just the economics that are reminiscent of an emerging market, but the politics too. The man who polls indicate is almost certain be to the next leader of the country, Boris Johnson, is openly considering suspending Parliament and the democratic process even before he takes the reins. Many market participants are even more worried by the economic consequences of the opposition party taking power at some point.

Pound traders all must fear the seemingly inevitable position squeeze. But the point is that there’s really no silver lining to the cloud over sterling.

The U.K. is a leveraged economy with a large and growing current-account deficit, deeply negative real yields and poor growth.

On a trade-weighted basis, sterling looks set for record lows in the months ahead and, despite the substantial weakness already seen, the vulnerable side for a sudden gapping move is definitely down. Much further down.

via ZeroHedge News https://ift.tt/2G8pTty Tyler Durden

Johnson & Johnson shares are down over 5% after Bloomberg reports that, according to people with knowledge of the matter, the U.S. Justice Department is pursuing a criminal investigation into whether Johnson & Johnson lied to the public about the possible cancer risks of its talcum powder…

Shareholders are selling first, thinking later…

Whilebaby powder only accounts for a small fraction of J&J revenues, it is a core brand and the criminal probe, which hasn’t been reported previously, coincides with a regulatory investigation and civil claims by thousands of cancer patients that J&J’s Baby Powder talc was responsible for their illness.

Now, a grand jury in Washington is examining documents related to what company officials knew about any carcinogens in their products, the people said.

via ZeroHedge News https://ift.tt/2xIxM49 Tyler Durden

The US Coast Guard has published stunning video of what’s being described as a “high stakes intervention” which netted over 17,000 pounds of cocaine near American coastal waters.

The intercept of a submarine-like drug smuggling vessel took place last month in what’s only being described as the East Pacific Ocean. Video of the operation is going viral given one Coast Guard commando actually leaps onto the half submerged vessel as it travels at a high rate of speed, after it refused to stop. 

“It’s gonna be hard to get on!” — one Coast Guard operative is heard shouting to a partner. The commando then takes a daring leap onto the sub and bangs on the vessel’s hatch before the smugglers open it during the daring raid. 

In total five drug smugglers were arrested and handed over to the DEA for prosecution in a major bust described as one of a series of reported seizures which in total were worth a half-billion dollars. 

Both President Trump and Vice President Pence publicly celebrated and acknowledged the record drug haul. The cocaine was later offloaded at a San Diego port. 

WATCH: Dramatic video shows Coast Guard crew member jumping on submarine alleged to be carrying more $569 million worth of drugs https://t.co/6wnUJrsv2W pic.twitter.com/kU8cREAlVi

— CBS News (@CBSNews) July 12, 2019

Coast Guard Lt. Commander Stephen Brickey told CNN that semi-submersible vessels used to run drugs into the US have been on the rise, despite vessels like the one shown in the video being expensive and “relatively rare” — given that cartels have to design and construct the high tech vessels deep in the jungle away from the prying eyes of police and overhead surveillance aircraft. 

“They blend in,” the official said. “Most of the vessel is underwater, so it’s hard to pick out. They’re painted blue. They match the water.”

The subs are further designed with the ability to sink their illicit cargo in a matter of minutes should international authorities make an intercept, which means Coast Guard actions have to be decisive and quick, hence the high risk maneuver shown in the video of a commando jumping on top of the semi-submersible. 

“The drugs represent 14 separate suspected drug smuggling vessel interdictions and disruptions off the coasts of Mexico, Central and South America by three Coast Guard cutters between May and July 2019,” the Coast Guard said in a written statement.

Vice President Mike Pence visited Coast Guard members in San Diego on Thursday during the unloading of a total some 39,000 pounds of drugs captured from smugglers in recent months in the Pacific Ocean.

via ZeroHedge News https://ift.tt/2Lkqdt6 Tyler Durden

The House Oversight Committee is holding hearings Friday on alleged abuses committed against migrant minors in the aftermath of the Trump administration’s zero-tolerance policy, which resulted in at least 2,800 family separations.

As The Hill reports, four members of Congress were set to testify before the committee on conditions they’ve witnessed in visits to migrant shelters and detention centers on the southwest border.

The scheduled witnesses included Reps. Veronica Escobar (D-Texas), whose El Paso district has been ground zero for much of the humanitarian crisis at the border, Alexandria Ocasio-Cortez, Ayanna Pressley (D-Mass.) and Rashida Tlaib (D-Mich.).

However, all eyes were on AOC as she explained just how terrible things are for the 1000s of illegal immigrants who have treked across nations, endured extremes of heat and cold, to get to America for free healthcare, free college, and free money handouts, seemingly desperate to enter the United States (despite its constant deplorable behavior according to leftists).

However, just as AOC was hitting her stride, climaxing in tears about children with canker sores, veins throbbing in her neck at the concentration-camp-like holding areas on the southern border…

…a ‘rude’ member of the panel appeared to collapse – ruining AOC’s monologue…

During @AOC‘s remarks on immigration, a congresswoman appears to have collapsed. pic.twitter.com/er33ojC8AF

— Washington Examiner (@dcexaminer) July 12, 2019

The Hill reports that it was a Democratic aide that passed out on the right side of the room as Ocasio-Cortez delivered her testimony. Other aides, Capitol Police and Rep. Mark Green (R-Tenn.), a medical doctor, rushed to help.

“Representative Green, who is a medical doctor, just told me she’ll be ok. Thank you, representative Green. It’s good to have a doctor in the House,” said Cummings.

We wonder if AOC will be allowed a do-over?

via ZeroHedge News https://ift.tt/2Y2b45J Tyler Durden

Authored by Sarah Cowgill via LibertyNation.com,

The message from the heartland is clear: If you don’t like America, feel free to leave.

While the media and other leftist elites ignore the millions of folks living in “flyover” states, they do so at their own peril; it was this silent majority that put President Trump in the White House. Each week, Liberty Nation gives voice to the hard-working heartlanders who are silent no more.

It was a post-Independence Day celebration hangover in the heartland as patriots watched in absolute disbelief while another so-called athletic role model for young girls dropped the F-bomb on live television and then stepped on the American flag, and again as a government body in Minnesota banned the Pledge of Allegiance at city council meetings.

Flyover folks didn’t take any prisoners in their assault.

Minnesota Needs A Butt Whooping

Well over 100 angry protesters marched into the St. Louis Park, MN, city council chambers waving Old Glory and chanting “USA, USA!”  The remonstration was in response to the council’s unanimous decision to ban the Pledge of Allegiance at the start of city council business meetings to sooth the sensitivities of a “diverse community.”

Hogwash.

St. Louis Park is smack dab in the heart of Rep. Ilhan Omar’s (D-MN) district.  And the act was considered nearly treasonous to real Americans – who have the misfortune of being taken over by increasing anti-American sentiments where once was a quiet, patriotic community.

Council member Anne Mavity claimed the pledge was “irrelevant” and made a clear and downright ridiculous statement: “They certainly don’t need to come into city council chambers and pledge their allegiance to our country in order to tell us what their input is about a sidewalk in front of their home.”

Seriously, if we’re talking about immigrants living in the most generous country in the world, they need to either proclaim their loyalty or head on out the door.

Another council member, Tim Brausen, was overheard saying that Minnesotans were upset because they were “playing with their hallowed traditions.”

No matter the creed or color, flyover folks have had enough – and applause is due the efforts of the fed-up patriots who made their thunderous allegiance known.

Greg Taylor, from Dupo, IL, waxed eloquent:

“I legally immigrated here, for me the American flag is a symbol of opportunity, of freedom, of the ability to succeed. I know the pledge of allegiance by heart and for me it’s an oath honoring a beacon of this great country founded on liberty and justice. In my mind if you disrespect this flag, you disrespect everything it stands for and everyone that worked so hard, everyone that risked everything, everyone that died so we can know freedom, so we can live without fear of an oppressing and imposing tyrannical government.”

From another of the country’s Great Lakes states, Michigan’s Nancy Frederick offered her ire for public view. “They, the council went from politically correct to moronic. Also taking care of the few vs the majority!!”

Retired MSG of the United States Air Force, Joseph Bombay of The Sooner State, said that “If the councilwoman says they should have no allegiance to this country, they are welcome to leave!”

Another Anti-American 15 Minutes Of Fame

Megan Rapinoe

Channeling her inner Colin Kaepernick while sporting a Nike emblemed soccer jersey, the latest athlete to join the we hate America club is none other than Megan Rapinoe, captain of the US Women’s Soccer Team.  Instead of singing “I love you, you love me,” as her purple hair might lead one to believe, Rapinoe figuratively flipped America the bird and not only kneeled during the National Anthem throughout the World Cup, but then stood on the flag and made weird Hulk-like faces in celebration of the win.

Few people applauded her behavior.

Pennsylvanian Kathleen Wilson advised, “Need to reel this chick in, remind her of the country that has given her this opportunity, supported her career, placed her in the spotlight. Her position requires responsibility and respect as she represents our great FREE country.”

“Sad, what should had been a proud moment for America turned into an embarrassment,” was the observation of Fatima Conceicao.

And from Iowa, Paula Hamman summed it up for the patriots: “She is such an embarrassment for the US. She has stolen any pride we could have experienced in winning. We would rather lose and have patriotic, classy players than win and have to read about all this childish, disrespectful behavior.”

But we’ll let the man who struggled and studied and became a proud legal American, Greg Taylor, have the last word on this great nation.

“Plain and simple,” he said, “if you’re in America you’re either an American or a tourist, if you’re here illegally the tour should come to an abrupt halt.”

via ZeroHedge News https://ift.tt/32sSXFJ Tyler Durden

This story is developing. 

A crash in Tampa on Thursday night is being investigated and has resulted in “a Tesla going up in flames”, according to an ABC Action News Tampa Bay report. 

Video from the scene shows the front of the car engulfed in flames as the Tesla sits on the side of the road where fire officials work on controlling the blaze.

The ABC anchor says: “Three people were inside of the Tesla when it caught on fire, they were taken to the hospital. Eyewitnesses telling us that other drivers stopped and pulled those folks to safety before first responders got on the scene.”

As the article notes, officials did not specify the cause of the crash or driver’s condition, but said all injuries suffered are expected to be non-life threatening.

We will update this story as more information becomes available.

via ZeroHedge News https://ift.tt/2YKUgNP Tyler Durden

Authored by Michael Snyder via The End of The American Dream blog,

New Orleans is about to be hit by “an extreme rainfall event” that is likely to be the worst disaster that the city has seen since Hurricane Katrina. 

It is being projected that Tropical Storm Barry could officially become a hurricane before it makes landfall on Saturday, but in this case the wind speed is not really that important.  Instead, the massive amount of rain that this immense storm will dump on southern Louisiana is the greatest danger, because the region is potentially facing flooding that is absolutely unprecedented.  In fact, one weather expert is even warning that the flooding could be so dramatic that it might actually “change the course of American history”…

Weather expert Eric Holthaus warned that, while the impending disaster would be “an entirely different type” of flooding than 2005’s Katrina, it could be just as harmful – and might even “change the course of American history.”

So why is there so much concern?

Well, the NOAA is now projecting that some portions of southern Louisiana could get up to 25 inches of rain from this storm…

The NOAA Weather Prediction Center (WPC) upped its rainfall forecast for Barry on Thursday afternoon, calling for a pocket of 20-25” amounts near Barry’s track between Thursday and Sunday evening. It’s very unusual for a NOAA/WPC forecast to depict amounts above 20”, which testifies to the center’s high confidence in this extreme rainfall event.

Many parts of New Orleans are already severely flooded, and if that amount of rain actually falls on the city over the next several days the water pumps are going to be completely overwhelmed.

In addition, this is the very first time that New Orleans has ever had to deal with a tropical system when water levels on the Mississippi River are this high.

According to CNN, the river is about 8 to 10 feet higher than it normally would be at this time of the year…

Tropical Storm Barry presents New Orleans with an unprecedented problem, according to the National Weather Service.

The Mississippi River, which is usually at 6 to 8 feet in midsummer in the Big Easy, is now at 16 feet, owing to record flooding that’s taken place this year all along the waterway.

Tropical Storm Barry is going to produce a substantial storm surge, and normally that wouldn’t be too much of a problem, but in this case it could push the water level in the Mississippi River above the levee system that protects New Orleans.  The following comes from the Daily Mail…

The center warned New Orleans residents that if the storm becomes a hurricane, it could potentially bring a coastal storm surge into the mouth of the Mississippi River capable of raising the river’s height to 20 feet above sea level – the highest crest in more than 90 years and high enough to overflow some sections of the levee system protecting the city.

We are being told that authorities have “great confidence” in the levee system, but we all remember what happened during Hurricane Katrina.

So basically New Orleans is facing a perfect recipe for flooding, and nobody is quite sure what is going to happen next.  Already, a state of emergency has been declared in five parishes…

“Look, there are three ways that Louisiana floods: storm surge, high rivers and rain,” Gov. John Bel Edwards said Thursday. “We’re going to have all three.”

States of emergency have been declared in Orleans, Jefferson, St. Bernard, Plaquemines and St. Charles parishes. Jefferson Parish and Plaquemines Parish have instituted mandatory evacuations as a precaution in low-lying areas or those outside major levees.

And at this point, we don’t have to wonder if there will be “catastrophic flooding” in New Orleans, because some parts of the city are already under “3 to 4 feet of water” thanks to all of the rain that has already fallen…

After Wednesday’s onslaught of heavy rain, Valerie Burton said her neighborhood looked like a lake outside her door.

“There was about 3 to 4 feet of water in the street, pouring onto the sidewalks and at my door,” Burton said. “I went to my neighbors to alert them and tell them to move their cars.”

Over the next few days things will get a lot worse for New Orleans.

The only question is how much worse.

And guess what?  Once the storm leaves southern Louisiana, it is expected to head north directly through the heartland of America.

Yes, the exact same area that has been relentlessly pounded by storm after storm for months.  We were already potentially facing widespread crop failures all across the middle portion of the country, and this massive storm is going to make things much worse.

According to the NOAA, the 12 months ending in June were the wettest 12 months in all of U.S. history…

Rain – and plenty of it – was the big weather story in June, adding to a record-breaking 12 months of precipitation for the contiguous U.S. It’s the third consecutive time in 2019 (April, May and June) the past 12-month precipitation record has hit an all-time high.

And now here in July an absolutely monstrous storm is going to rip through the middle of the country at the worst possible time.

The scenarios that I have been warning about are starting to develop right in front of our eyes, and many Americans are becoming extremely concerned about what the months ahead will bring.

It seems like every week we are talking about another unprecedented disaster.  America is being hammered over and over again, and this latest blow to New Orleans looks like it could be extremely severe.

Let us hope that this storm does not turn out to be as bad as the meteorologists are now projecting, because it appears that many Americans are about to have their lives completely turned upside down.

via ZeroHedge News https://ift.tt/2xGKSyX Tyler Durden

Turkey has confirmed delivery of the first round of S-400 anti-air missile systems components. The first batch reportedly arrived at an airbase near Ankara, which was caught on video.  

A NATO official told CNN on Friday: “It is up to allies to decide what military equipment they buy. However, we are concerned about the potential consequences of Turkey’s decision to acquire the S-400 system.” Those consequences are shaking the alliance given Turkish media is already reporting a punitive response from Washington is imminent:

U.S. sources tell Ahval, there will be a response by the U.S. government with regards to the arrival of S-400 Russian defense systems in Turkey, soon.

Defense Ministry releases close-up footage of Russian S-400 missile system parts being unloaded from cargo planes upon arrival to be re-assembled in Turkeyhttps://t.co/e8swGwHwhG pic.twitter.com/xVnymoIfwK

— DAILY SABAH (@DailySabah) July 12, 2019

Russia’s TASS news has indicated a second delivery will be made in the coming weeks, with a third delivery, carrying over “120 anti-aircraft missiles of various types” to be delivered “tentatively at the end of the summer, by sea.”

TASS also noted that Turkish S-400 operators will receive training on the systems in Russia, following a prior training program involving 20 Turkish personnel last Spring. 

The US this week again warned of “real and negative” consequences if Turkey completes the purchase of the S-400, which is now definitively a done deal with the S-400 equipment arrivals in Turkey. “Those consequences include participation in the F-35 program,” a State Department spokesperson said Tuesday.

Turkey, for its part, shot back on Wednesday that the US must avoid taking the “wrong steps,” with the foreign ministry saying in a statement, “We are inviting the US to avoid taking the wrong steps which would exclude diplomacy and dialogue and harm relations.”

Starting months ago Turkey consistently affirmed it’s “a done deal” and that there would be no cancellation, even as Washington urged “alternatives” such as US Patriot missiles. 

#BREAKING: #Turkish media (#Erdogan‘s Anadolu Agency) released video of the first S-400 SAM battery of #Turkey which were delivered by two #Russia Air Force’s An-124-100 transport airplanes, RA-82038 and RA-82013 from 224th Flight Unit at #Akinci AB, #Ankara few hours ago. pic.twitter.com/nT1HX7PKwV

— Babak Taghvaee (@BabakTaghvaee) July 12, 2019

But as of today it now appears there’s no further dialogue to be had on the S-400, which early this week President Recep Tayyip Erdogan declared would be a positive development for the defense of the region “and for the world”. On Wednesday Erdogan further described to reporters:

“Some people have a question about why we buy the S-400, why we make such an investment. If we have to, we will have the right to use them. If someone attacks us, we will use these air defense systems. That’s why we make such an investment.”

The State Department’s stance is that “nothing has changed” concerning US resistance to the S-400 deal.

Concerns have been driven over fears that it would allow Russia to access sensitive information on the defenses of NATO aircraft, especially if Turkey’s military is simultaneously operating the Lockheed Martin made F-35 advanced stealth fighter. 

via ZeroHedge News https://ift.tt/2JuyIjk Tyler Durden