iftttwall

Despite soaring stocks and a trade deal, University of Michigan Sentiment survey signaled a small decline from 99.3 to 99.1 in preliminary January data (with current conditions improving but the outlook dipping)…

• Current economic conditions index rose to 115.8 vs. 115.5 last month.

• Expectations index fell to 88.3 vs. 88.9 last month.

Source: Bloomberg

Buying Conditions were perceived to have improved for houses and durables but plunged for autos…

Source: Bloomberg

And finally, and perhaps most notably, inflation expectations jumped in January:

• Expected change in median prices during the next year rose to 2.5% vs. 2.3% last month.

• Expected change in median prices during the next 5-10 years rose to 2.5% vs. 2.2% last month.

Source: Bloomberg

Though it remains low trendwise.

Authored by Patrick Buchanan via Buchanan.org,

About the impeachment of President Donald Trump she engineered with her Democratic majority, Nancy Pelosi said Wednesday: “It’s not personal. It’s not political. It’s not partisan. It’s patriotic.”

Seriously, Madam Speaker? Not political? Not partisan?

Why then were all eight House members chosen as managers to prosecute the case against Trump, who ceremoniously escorted the articles across the Capitol, all Democrats? Why did the articles of impeachment receive not a single Republican vote on the House floor?

The truth: The impeachment of Donald Trump is the fruit of a malicious prosecution whose roots go back to the 2016 election, in the aftermath of which stunned liberals and Democrats began to plot the removal of the new president.

This coup has been in the works for three years.

First came the crazed charges of Trump’s criminal collusion with Vladimir Putin to hack the emails of the DNC and the Clinton campaign and funnel them to WikiLeaks.

For two years, we heard the cries of “Treason!” from Pelosi’s caucus. And despite the Mueller investigation’s exoneration of Trump of all charges of conspiracy with Russia, we still hear the echoes:

Trump is Putin’s poodle. Trump is an asset of the Kremlin.

All we want, and what the American people deserve, is a “fair trial,” Democrats and their media collaborators now insist. But can a fair trial proceed from a manifestly deficient and malicious prosecution?

Consider. In this impeachment, we are told, the House serves as the grand jury, and Adam Schiff’s Intelligence Committee and Jerry Nadler’s Judiciary Committee serve as the investigators and prosecutors.

But the articles of impeachment on which the Judiciary Committee and the House voted do not contain a single crime required by the Constitution for impeachment and removal. There is no charge of treason, no charge of bribery or “other high crimes and misdemeanors.”

So weak is the case for impeachment that the elite in this city is demanding that the Senate do the work the House failed to do.

The Senate must subpoena the documents and witnesses the House failed to produce, to make the case for impeachment more persuasive than it is now.

Not our job, rightly answers Mitch McConnell.

The Senate is supposed to be an “impartial jury.”

But while there is a debate over whether Republicans will vote to call witnesses, there is no debate on how the Senate Democrats intend to vote — 100% for removal of a president they fear they may not be able to defeat.

Consider Trump’s alleged offense: pressing Ukrainian President Volodymyr Zelenskiy to investigate Burisma Holdings and Hunter Biden.

Assume Zelenskiy, without prodding, sent to the U.S., as a friendly act to ingratiate himself with Trump, the Burisma file on Hunter Biden.

Would that have been a crime?

Why is it then a crime if Trump asked for the file?

The military aid Trump held up for 10 weeks — lethal aid Barack Obama denied to Kyiv — was sent. And Zelenskiy never held the press conference requested, never investigated Burisma, never sent the Biden file.

There is a reason why no crime was charged in the impeachment of Donald Trump. There was no crime committed.

Not political, said Pelosi. Why then did she hold up sending the articles of impeachment to the Senate for a month, after she said it was so urgent that Trump be impeached that Schiff and Nadler could not wait for their subpoenas to be ruled upon by the Supreme Court?

Pelosi is demanding that the Senate get the documents, subpoena and hear the witnesses, and do the investigative work Schiff and Nadler failed to do.

Does that not constitute an admission that a convincing case was not made? Are not the articles voted by the House inherently deficient if the Senate has to have more evidence than the House prosecutors could produce to convict the president of “abuse of power”?

Can we really have a fair trial in the Senate, when half of the jury, the Democratic caucus, is as reliably expected to vote to remove the president as Republicans are to acquit him? What kind of fair trial is it when we can predict the final vote before the court hears the evidence?

It is ridiculous to deny that this impeachment is partisan, political and personal. It reeks of politics, partisanship and Trump-hatred.

As for patriotic, that depends on where you stand — or sit.

But the forum to be entrusted with the decision of “should Trump go?” is not a deeply polarized Senate, but with those the Founding Fathers entrusted with such decisions — the American people.

In most U.S. courts, a prosecution case this inadequate, with prosecutors asking the court itself to get more documents and call more witnesses, and so visibly contaminated with malice toward the accused, would be dismissed outright.

Mitch McConnell should let the House managers make their case, and then call for a vote to dismiss, and treat this indictment with the contempt it so richly deserves.

Former Vermont Gov. Peter Shumlin, who led the state as a Democrat from 2011 to 2017 has some harsh words for Bernie Sanders.

During a free-for-all interview with Politico, Shumlin, who recently endorsed Joe Biden, accused Sanders of trying to “Hillarize” Elizabeth Warren.

Specifically, Shumlin criticized Sanders’ attempts to portray Warren as an “elitist”, a perception that helped to deeply undermine the Clinton campaign.

Shumlin warned that Sanders doesn’t feel any “loyalty” to the Democratic Party, and won’t hesitate to put his own interests above the party’s.

The reason? Shumlin said Sanders, a self-described Democratic Socialist, and his supporters feel that they can pass a “purity test” that no Republicans and very few Democrats can pass.

Because of this, Sanders won’t hesitate to “play dirty,” Shumlin said.

“What I’ve seen in Bernie’s politics is he and his team feel they’re holier than the rest. In the end, they will play dirty because they think that they pass a purity test that Republicans and most Democrats don’t pass,” said Shumlin. “What you’re seeing now is, in the end, even if he considers you a friend, like Elizabeth Warren, Bernie will come first. That’s the pattern we’ve seen over the years in Vermont, and that’s what we are seeing now nationally.”

Finally, Shumlin reminded his audience that Sanders first major electoral triumph was defeating the Democratic Mayor of Burlington.

“Don’t forget, the first office he won was beating the Democratic mayor of Burlington. He never endorsed most Democrats until his Senate career,” Shumlin said. “The only way he could win the Senate seat and avoid a Democrat winning the nomination and splitting the vote in the general election has been to run for the Democratic nomination, win it and immediately turn it down.”

After losing to Clinton in the rigged Democratic primary, Sanders was a good sport, and agreed to campaign for Clinton, eventually appearing at more than 80 events as a surrogate.

Does that sound like someone who has no respect or loyalty to the party?

After surging in November (by the most since Oct 2017), Industrial production was expected to contract modestly in December.

November’s big jump was revised lower and the headline production printed a 0.3% MoM contraction (worse than expected), leaving US industrial production down 1.01% YoY – the worst since Oct 2016.

Source: Bloomberg

That makes 7 of the 12 months with contraction in 2019 and ends up being the worst year since 2015.

• Utilities fell 5.6% in Dec. after rising 1% in Nov.

• Mining rose 1.3% in Dec. after falling 0.2% in Nov.

Capacity utilization fell to 77% from 77.4% in Nov., revised up from 77.3%.

Manufacturing actually surprised to the upside in December (rising 0.2% MoM vs -0.1% exp), but year-over-year saw a 1.3% contraction…

Source: Bloomberg

And of course, the Dow Jones INDUSTRIAL Average continues to soar despite INDUSTRIAL Production remaining relatively stagnant…

Source: Bloomberg

And that’s what The Fed is for.

Just hours after we reported that the NTSB would be investigating a fatal Tesla Model X crash in February, we now learn that the U.S. National Highway Traffic Safety Administration has begun an investigation into a petition it has received regarding certain Tesla models.

According to Bloomberg, the petition involves “unintended acceleration in vehicles”.

The NHTSA says its Office of Defects received the defect petition on December 19 and that the request applied to model year 2012 through 2019 Tesla Model S vehicles, model year 2016 through 2019 Tesla Model X vehicles and model year 2018 through 2019 Tesla Model 3 vehicles. This totals about 500,000 Tesla vehicles. 

The petitioner cited 127 consumer complaints to the NHTSA involving 123 separate vehicles. These reports included 110 crashes and 52 injuries.

Yesterday we reported that the NTSB said its going to convene a meeting on February 25 to examine the probable cause of a fatal Tesla accident that took place in California in 2018.

Autopilot was engaged in 38 year old Apple engineer Walter Huang’s Model X prior to the accident, as we have reported. The NTSB and NHTSA are now investigating a “number of crashes” where Autopilot was involved, according to Automotive News.  

Last week, for instance, the NHTSA also said it was investigating a December 29th crash of a Model 3 that a passenger dead after the Model 3 collided with an inanimate fire truck in Indiana. It’s also investigating another crash on the same date where a Model S ran a red light and struck a Honda, killing its two occupants. 

And, of course, it is no surprise to us that the NHTSA has not made a determination as to whether or not an investigation is warranted regarding the new petition yet. Because if it isn’t clear as day to them at this point, we’re not sure what it’s going to take to wake these regulators from the half decade long slumber they’ve been in.

Authored by Nick Cunningham via OilPrice.com,

The risk of oil supply disruptions from around the world has diminished, and rising non-OPEC production provides a “solid base from which to react to any escalation in geopolitical tension.”

In its January Oil Market Report, the International Energy Agency (IEA) said that there is plenty of oil sloshing around, despite the U.S. and Iran nearly going to war.

“We cannot know how the geopolitical situation will play out over time, but for now the risk of a major threat to oil supplies appears to have receded,” the IEA said.

“As was the case following the attacks on Saudi Arabia in September, once the initial fears of a sustained supply shock subsided, the Brent price rapidly gave up its $4/bbl spike.”

Oil inventories held in OECD countries is 9 million barrels above the five-year average, and there are also plenty of strategic stockpiles to call upon in the event of an outage, the agency said.

Still, while geopolitical risk has “faded,” it has not gone away entirely. The Trump administration may have refrained from all-out war against Iran, but the assassination of General Soleimani took the confrontation to new heights.

While Trump’s speech earlier this month was widely interpreted as one of “de-escalation,” he also prefaced his comments by saying Iran would never have a nuclear weapon. But, sanctions, “maximum pressure,” and the assassination of one of its top leaders will obviously provoke a response. With little left to lose, Tehran is backing out of most of its commitments under the 2015 nuclear agreement, a deal that the U.S. already exited nearly two years ago.

All of which is to say the countries are seemingly locked on a collision course. The world breathed a sigh of relief when the two countries backed away from the brink, but there are decent odds that the conflict flares up again in the not-so-distant future. There are few pathways for actual de-escalation, absent an overhaul of U.S. policy.

At the same time, Iran has already lost much of its oil supply due to sanctions. So, the additional supply risk is concentrated in Iraq, where the U.S. and Iran conflict is actually playing out. “Recent events have shown that Iraq is a potentially vulnerable supplier, just as its strategic importance has grown,” the IEA said. The agency noted that Iraqi oil exports have doubled since 2010, from 2 million barrels per day (mb/d) to 4 mb/d. China and India each import roughly 1 mb/d of supply from Iraq.

“Iraq’s rising capacity has been very welcome as sanctions have reduced Iran’s exports to only 0.3 mb/d and Venezuela’s production has collapsed,” the IEA wrote.

Left unsaid was that those outages were both the result of U.S. sanctions.

Putting aside the geopolitical risk, the agency said that prices will likely remain subdued this year because non-OPEC supply continues to grow faster than demand.

Non-OPEC countries will add 2.1 mb/d this year, while demand will rise by 1.2 mb/d. 

Unlike in previous years, U.S. shale won’t dominate the supply growth picture, at least not entirely. The sector will likely see a “marked slowdown,” accounting for 52 percent of non-OPEC supply growth, down from an 84 percent average between 2017 and 2019. Instead, Norway, Brazil, Canada, Australia and Guyana will add new barrels.

The bottom line is that OPEC+ still faces a predicament.

“Even if they adhere strictly to the cuts, there is still likely to be a strong build in inventories during the first half of 2020,” the IEA said.

“OPEC crude production would fall to 29.3 mb/d in January if there were to be full compliance and steady output from Libya, Iran and Venezuela. That is still 700 kb/d above the 1Q20 call on OPEC crude and 900 kb/d above the 2Q20 call.”

In other words, unless OPEC+ cuts further, the oil market faces persistent oversupply in the first half of this year.