Sen. Ron Wyden issued a scathing statement late Monday warning that President Donald Trump’s pick to serve as director of national intelligence is so unqualified that he could put lives at risk.
Rep. John Ratcliffe (R-Texas), an ardent Trump loyalist, “is the most partisan and least qualified individual ever nominated to serve as director of national intelligence,” said Wyden, a Democrat from Oregon and a senior member of the Senate Intelligence Committee.
“The sum total of his qualifications appears to be his record of promoting Donald Trump’s conspiracy theories about the investigation into Russian interference and calling for prosecution of Trump’s political enemies,” Wyden said.
Director of National Intelligence (DNI) Dan Coats, left, is stepping down. Trump has endorsed Rep. John Ratcliffe to become the nation’s next intelligence chief. Image source: Getty/CNN
“Furthermore, he has endorsed widespread government surveillance and shown little concern for Americans’ rights, except for those of Donald Trump and his close associates,” Wyden continued.
“Confirming this individual would amount to an endorsement of this administration’s drive to politicize our intelligence agencies,” the Oregon senator concluded. “This is a dangerous time, and America needs the most qualified and objective individuals possible to lead our intelligence agencies. Anything less risks American lives.”
.@RepRatcliffe is the most partisan & least qualified individual ever nominated to serve as DNI. His only qualifications seem to be promoting Trump’s conspiracy theories about the investigation into Russian interference & calling for prosecution of Trump’s political enemies.
Wyden’s statement comes days after Trump nominated Ratcliffe — who has no background in intelligence — to replace current Director of National Intelligence Dan Coats, who is stepping down next month.
The president reportedly liked the way Ratcliffe questioned former Special Counsel Robert Mueller during his testimony before Congress last week.
In an interview with Politico on Monday, Sen. Chris Murphy (D-Conn.) described Ratcliffe as “a television character that the president has watched on TV.”
Sen. Ron Wyden, D-Oregon, a senior member of the Senate Intelligence Committee. Image source: AP
Trump, said Murphy, “wants to put somebody in this position who’s going to agree with his political take on intelligence.”
“I’ll certainly do my own evaluation,” Murphy added, “but it strikes me as a very inappropriate choice for the job in a moment when we are trying to lift intelligence out of the political soup.”
via ZeroHedge News https://ift.tt/2GDQkY4 Tyler Durden
The secret is out for a Chinese blogger who called herself “Your Highness Qiao Biluo”, according to the BBC.
The blogger, who had presented herself as a “young” and “glamorous” girl in videos online, is actually just an average middle aged woman. A technical glitch during one of her livestreams revealed the truth.
It stunned her fans, who were apparently unaware that everyone on the internet may not actually be who they present themselves to be.
Biluo had a follow count of over 100,000 on Douyu and is now believed to have used a filter to alter her face. She had been renowned for her “sweet and healing voice”. China’s Global Times noted that Biluo had been “worshipped” as a “cute goddess” by some members of her audience. Some followers even sent her as much as $14,000.
Biluo’s real face on the left, altered face on the right
But during a joint live stream with another user, the filter she was using stopped working and her real face became visible to her viewers. She only noticed the glitch when “people who had signed up to her VIP access room started exiting en masse,” according to the article.
Many of her followers (who, surprise, were primarily men) stopped following her immediately and withdrew some of their transactions after her identity was revealed. Most commentators didn’t sympathize with the men and said they deserved to be tricked for not verifying her identity in the first place.
Since the incident, Biluo has suspended her platform. Some users claimed she was conning people out of their money, while others asked people not to judge her because of her looks. The other live-streamer, Qingzi, showed no reaction to Biluo’s face being revealed.
The story has gone viral in China, with more than 600 million people reading posts about it. China has 425 million live streamers and the use of face filters is “common” across many social media platforms.
Users on YouTube captured the footage:
via ZeroHedge News https://ift.tt/2Yh9IFh Tyler Durden
Children are being rented, bought, recycled, and kidnapped so that single adults, mostly men from Central America, can gain quick release into the United States after crossing the border illegally.
The cost of renting a child varies.
“We’ve had indications … that it could cost anywhere from a few hundred—or even in some cases, less than $100—up to $1,000 or more,” said Kevin McAleenan, acting Secretary of the Department of Homeland Security (DHS), during a congressional hearing on July 18.
McAleenan said in one case, a 51-year-old illegal alien had purchased a 6-month-old baby for $80 in Guatemala so that he could easily get into the United States. The man, a Honduran national, confessed to border agents when he was faced with a DNA test.
“We’ve seen all manner of smuggling organizations communicating to potential customers and to those crossing the border how to bring a child with them to be allowed to stay in the United States,” McAleenan said. “They’ve been active in advertising, literally on Facebook and on the radio in Central America.”
Homeland Security Investigations, a division of ICE, sent 400 agents to El Paso and Rio Grande Valley, Texas, in mid-April to interview families that Border Patrol suspected were fake. In the last eight weeks, HSI special agents have identified 5,500 fraudulent families—about 15 percent of all cases referred.
McAleenan said agents have uncovered 921 fake documents and 615 individuals have been prosecuted for trafficking or smuggling a child.
“That tells me that we might be scratching the surface of this problem and the number of children being put at risk might be even higher,” he said.
“Everybody knows that if they bring a child, they’ll be allowed to stay in the United States—they call it a ‘passport for migration.’ I heard that directly from a gentleman from Huehuetenango, the western-most province of Guatemala.”
He said almost every summary of the cases he has seen mentions the same thing:
“The subject stated that he made the attempt because he heard in his hometown that anyone traveling to the United States with a child will be released.”
The southern border has become so overwhelmed that most illegal aliens don’t even claim credible fear for asylum anymore, knowing they’ll still be released expeditiously into the United States—especially if they have a child.
In Yuma, Arizona, less than 10 percent of illegal aliens make an asylum claim, sector Chief Anthony Porvaznik said on April 17.
300,000 Children
Since Oct. 1, 2018, more than 300,000 children have crossed the southern border, according to McAleenan. Most of them entered as part of a family unit, but 67,000 also entered as unaccompanied minors. Family units increased by 469 percent from the first nine months of the 2018 fiscal year to the same period in the 2019 fiscal year.
The legal loophole that is fueling the sharp increase in family units was opened in 2015 by a California judge, who amended the Flores Settlement Agreement to prohibit the detention of families for more than 20 days. Previously, the 20-day rule was applied to unaccompanied minors only.
An immigration case cannot be adjudicated within 20 days, so families who cross the border illegally are now released by Border Patrol within days, with a future court date that most fail to honor.
One of the most telling statistics is that of men crossing the border with a child. In 2014, fewer than 1 percent of all men apprehended by Border Patrol in the Rio Grande Valley Sector had a child with them. That number now sits at 50 percent, according to Rodolfo Karisch, chief Border Patrol agent for that sector.
McAleenan said smugglers pair up adults and children. “If they have an individual who wants to go to the United States and someone else has a child that they might want to make some additional money renting [out], or they want the child delivered to a relative in the United States,” they’ll buy fake documents and then get smuggled to the border.
“There’s a whole fake document operation in all three countries,” McAleenan said, referring to Guatemala, Honduras, and El Salvador.
“The vulnerabilities in our legal framework [are] incentivizing smugglers and families to put children at risk. The recycling problem is maybe the worst manifestation of that,” he said. Recycling refers to when a child is used by an adult to get across the border easily as a “family unit,” then the child is sent back to be used again.
“ICE now has three significant cases, multiple cities around the country, where they’ve identified a small group of children—say five to eight children—who are being used by dozens of adults to cross our border seeking release into the United States.”
The adults involved in fraudulent family claims are prosecuted by the Department of Justice for federal crimes including: immigration crime, identity and benefit fraud, alien smuggling, human trafficking, and child exploitation.
Changing Flores
McAleenan said Congress could make the biggest impact—“not only on the flow, but on protecting children”—by making a change to the Flores agreement.
He said that prior to the 2015 change to Flores, the Obama administration started detaining families together for the duration of their immigration case, which takes around 45 days. The flow of illegal immigrants reduced in response, as those with meritless asylum claims were deported.
“If people are not successful in coming with a child being released, they’re actually getting a decision from an immigration judge resulting in repatriation for the vast majority, that would mean others would not try to come,” McAleenan said.
Although almost 90 percent of those who claim credible fear when presenting themselves at the border pass the initial screening, less than 20 percent are granted asylum relief by an immigration judge. For Central Americans, that number is less than 10 percent.
Rep. Katie Hill (D-Calif.) told McAleenan at the hearing that a Democrat-controlled House will not amend the Flores agreement, nor will it provide funding for more detention beds.
McAleenan pushed back, saying he’s not ready to accept that a system that worked under the Obama administration five years ago would not be accepted by Congress today. He said back then families were kept together for 40 to 50 days in a campus-like setting with education, recreation, medical care, and courtrooms on site.
“We’re not seeing successful results in immigration cases when anyone is released from being detained in custody, but especially for families—they’re more likely to cut off their [tracking] bracelets; they’re less likely to show up for hearings; they’re less likely to respond to a final order of removal,” McAleenan said. “So being able to address that at the border in an expedited and fair way with due process is a much better solution than what we’re doing now.”
He said he’s already discussing bipartisan options with the Senate Judiciary Committee, but he’d like to start a discussion in the House.
67,000 Unaccompanied Minors
McAleenan is also concerned about the increased number of unaccompanied minors coming across the border and the legal loopholes that prevent them from being sent back home.
The Trafficking Victims Protection Reauthorization Act (TVPRA) has been established for years to help victims of trafficking; however, a loophole prevents the United States from returning children back to their home countries unless they are from Canada or Mexico (contiguous countries).
McAleenan said even if Central American countries want their children back, U.S. law prohibits it.
“We’ve had all three ambassadors from the Northern Triangle countries assert that those governments should have some say in what happens to that unaccompanied child,” he said.
Instead, an unaccompanied child gets moved from Border Patrol to Health and Human Services (HHS), which then finds a sponsor in the United States to place the child with.
Currently, around 11,000 unaccompanied minors are in the care of HHS, creating a proxy foster care system. The vast majority (88 percent) hail from the Central American countries of Guatemala, Honduras, and El Salvador. Most are aged between 15 and 17.
“The number of unaccompanied minors entering the United States during this fiscal year has risen to levels we have never before seen,” said Jonathan Hayes, before the House Judiciary Committee on July 25. Hayes is responsible for the unaccompanied minor program within the HHS’s Office and Refugee Resettlement department.
Hayes said that as of June, the average length of time that a child stays in HHS custody is approximately 42 days—a “dramatic decrease” from late November 2018, where the average length of care was 90 days.
McAleenan said it’s often a parent, who is already in the United States illegally, who pays a smuggler to deliver their child up to the border.
“I don’t think most people realize that most of these unaccompanied children are being released to parents or relatives in the United States who are also here unlawfully, who may not have permission to work in the United States,” McAleenan said.
New restrictions, placed by Congress in the latest round of appropriations, include a provision that illegal aliens in a household with an unaccompanied minor are now exempt from deportation.
via ZeroHedge News https://ift.tt/2GC6uS2 Tyler Durden
Despite record credit injections and endless easing, China’s economic survey data goes from bad to worse.
While China Manufacturing PMI managed a de minimus gain from 49.4 to 49.7, it remains in contractionary territory for the 7th month in the last 9.
China Services PMI continued to slide, back to its lowest since 2018.
Confirming global weakness seen in Japanese and European PMIs.
In a seemingly desperate reach, Bloomberg notes that the stronger result (49.4 to 49.7) signaled some optimism is emerging in the Chinese economy in spite of lingering uncertainty over trade talks and domestic demand.
PMI data improves as “the government’s tax cuts have helped improve growth slightly,” Yao Shaohua, economist at ABCI Securities Co. in Hong Kong
Under the hood things are less rosy with Manufacturing New Orders and Employment both contracting…
And Non-Manufacturing Employment is contracting…
We are less enthusiastic as July has more working days than June, which could also have helped lift production.
via ZeroHedge News https://ift.tt/2ZjAE3L Tyler Durden
A new survey reveals that some 28% of food delivery drivers admit to taking food from a customer’s order, while 54% admit they’ve been ‘tempted’ by the smell of their edible cargo.
The study, conducted by foodservice distributor US Foods, also reveals that 17% of customers complain that their food wasn’t hot enough, 16% say food is consistently late, and 10% report that their food was mangled during delivery.
17% of customers say they’ve had drivers plop their food outside the door and just leave, while 29% have had a driver refuse to bring their food all the way to the door.
Via usfoods.com
As far as driver complaints, 60% say they received a weak or no tip, while around 39% say that the customer’s instructions were unclear, or that nobody picked up the phone.
Our survey establishes the most common complaints in the world of food delivery apps. Not surprisingly, people want food served warm, fresh and on-time – especially when they’re paying a premium for it.
Of course, frustration extends beyond the customers. Of the nearly 500 deliverers we surveyed, topping the list is weak tips, food not being ready at the restaurant, and lack of communication with customers. To remedy this, many operators are scaling back delivery services and menus so as not to overwhelm the kitchen and create a negative experience for both the dine in and delivery customers. -US Foods
The top apps from the survey are Uber Eats, Grubhub, DoorDash and Postmates in that order, while most food takes around 30-40 minutes to arrive.
As far as tipping goes, most people tip through the app, while 66% say the delivery and service fees affect how much respondents tip. Around 25% of tips are $3, while the most common amount (31%) is $5.00.
US Foods surveyed 1,518 American adults between May 9 and 13, 2019, who have used food delivery apps, as well as 497 American adults who say they have worked as a deliverer for at least one food delivery app. Respondents’ ages ranged from 21-63 with a median age of 30.
via ZeroHedge News https://ift.tt/2LPzABp Tyler Durden
Today’s post revolves around a subject I’ve been thinking about since early 2017, when I noticed much of the population separating into pro-Trump or anti-Trump factions that were becoming increasingly tribal, vitriolic and hostile. I wrote about it in the piece, Lost in the Political Wilderness, and things haven’t improved much since. Fortunately, around the same time I came across the theory of Spiral Dynamicswhich provided me with a useful framework through which to understand consciousness and the importance of guarding your mind and emotional state in a world that encourages fear, tribalism and anger.
Though we live in a time where more diverse information is available at our fingertips than at any other period in human history, we’re still presented with news and narratives via specific channels; whether that be an alternative media figure, a mass media outlet or a tech giant algorithm. The news and commentary that somehow gets in front of us on a daily basis shapes our view of the world just as it always has, and this in turn triggers certain emotions – joy, sadness, anger, fear, inspiration, etc. There’s space for all that in a human life, but the ones I’m most interested in for the purposes of this piece are fear and anger.
For the vast majority of us, fear and anger should not dominate everyday life, and when they do manifest, it’s important we recognize and think about it consciously. For starters, the moment you read a headline or an article that triggers anger or outrage, I suggest taking a deep breath. Then ask yourself if this is something that genuinely deserves your attention, or is it perhaps an intentional distraction of some kind. Politicians and media outlets alike tend to make a living off manipulating your emotional state so be careful what you allow these sources to do to you.
Nobody reading this has the time to be outraged about every possible thing there is to be outraged about, so I suggest being as selective as possible when providing space in your day for this sort of emotion. Many of the issues people become enraged about on a daily basis have been intentionally manufactured or put in front of them for the purpose of pitting people against one another — in other words, for dividing and conquering — or for the purpose of distraction.
Which brings me to the next point. How can you tell if you’re being manipulated in a way that isn’t good for you or society at large? For one thing, if a piece of news or information results in you being disgusted or hostile at a vast collection of other people you consider to be on the “other team” politically speaking, you’re probably being played.
Irrespective of where you stand on the ideological spectrum, most people aren’t saints or sinners, we’re just flawed but decent people trying to do the best we can. Any news or commentary that encourages you to despise a large group of other humans simply because they vote differently, or come from a distinct culture to your own is generally not doing you or anyone else any good. Any time you find yourself triggered in such a way it’s important to be as conscious as possible of what is happening and why.
Bad people crave power more than good people, and are also willing to do anything to get it. So bad people are in power.
Why is this so complicated for some people?
Although there are certainly major issues worthy of disgust that require serious attention, we only have so much spare time each day and a limited amount of emotional energy to spend. My suggestion is to spend your days consciously and wisely, and avoid being played and manipulated. Moreover, the best thing any of us can do on a daily basis is work on ourselves. Most of our energy is best spent trying to be better, more loving, and more understanding in our everyday conversations and relationships in real life. Just as anger and outrage can be viral and result in self-fulling negative societal outcomes, kindness is likewise contagious.
We’re all here for such a brief time and most of us (myself included) don’t always guard our emotional space as carefully as we should. Fear and anger are natural human emotions, but should be dealt with consciously and with care. Next time you find yourself being triggered, take a deep breath and ask yourself if it’s worth your time and energy. If not, move on. Life’s too short.
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via ZeroHedge News https://ift.tt/2MqNp8P Tyler Durden
A dramatic legal battle between the ruler of Dubai, Sheikh Mohammed bin Rashid al-Maktoum, and his estranged wife, Jordanian princess Haya bint al-Hussein, over their children’s custody began this week in a London court and has already witnessed a “non-molestation order” and a “forced marriage protection order” brought against the powerful Emirati sheikh by his wife. She’s reportedly been hiding out in London and says she’s “afraid for her life.”
It was first reported weeks ago that the 45-year-old daughter of late King Hussein had fled the UAE with her two children, seeking to escape her billionaire (and allegedly abusive) husband, which drove speculation as to whether Dubai would invoke diplomatic powers to try and force her back to the UAE.
Dubai Sheikh Mohammed bin Rashid al-Maktoum and his wife Princess Haya bint al-Hussein in a 2018 photograph, via Reuters.
She fears she could be abducted and rendered back to Dubai, similar to what happened in the case of Sheikha Latifa— daughter of the Dubai ruler who mounted her own “escape” attempt last year, only to be captured later by Emirati forces on a yacht attempting to flee.
The family is said to be worth over $4 billion and exercises huge influence in other countries where they maintain substantial assets and real estate, such as the UK.
The protection orders are being considered by the court in response to Sheikh Mohammed’s seeking a legal order for the summary return of their children to Dubai. The 70-year old sheikh was absent from the proceedings but is represented by his legal team.
The “non-molestation order” protects from harassment or threats, while the “forced marriage protection order” is defined as follows:
Forced marriage protection orders can be used to help someone who is being coerced into marriage or is already in a forced marriage.
They can be applied for by the person to be protected by the order, or for someone else by a relevant third party or another person with the court’s permission to do so.
“Force can include physical force, as well as being pressurized emotionally, being threatened or being a victim of psychological abuse,” according British law.
Previous reports detailed how Princess Haya had plotted her escape from Dubai and her husband’s oversight “for months”:
The wife of Dubai’s ruler Sheik Mohammed bin Rashid al-Maktoum spent months planning her escape to London after she discovered her husband had lied about imprisoning and torturing his eldest daughter. Princess Haya Bint al Hussein, 45, is said to have fled Dubai after she found out how the country’s ruler had treated his daughter Princess Latifa.
Ahead of the English High Court proceedings, which has from the start drawn immense UK media scrutiny – especially given the Dubai royal couples’ closeness to England’s Queen and royal family – the two parties said in a joint statement: “These proceedings are concerned with the welfare of the two children of their marriage and do not concern divorce or finances.”
Princess Haya reportedly fled her husband in Dubai and has been in hiding in London. Image source: Getty
The UAE is further said to be concerned that sensitive and potentially embarrassing details could come out of the case, with presiding Judge Andrew McFarlane already having rejected an attempt by Sheikh Mohammed’s lawyers to restrict certain details of the cause from the media.
“There is a public interest in the public understanding, in very broad terms, proceedings that are before the court,” he said.
The Dubai government has called it “a private matter” in statements to Reutersthis week; however, we don’t expect it’ll be able to keep a lid the likely damning details to come.
via ZeroHedge News https://ift.tt/2Yf9RJs Tyler Durden
Ahead of tomorrow’s Fed rate cut, the only lingering question is whether it will be 25bps – which is now fully priced in and may disappoint markets, especially if it is framed in a hawkish tone and optimistic outlook – or the Fed goes all the way, and despite the recent miscommunication fiasco between the NY Fed and its president, John Williams (and WSJ follow up), the Fed opts to go all the way and cuts by 50bps, prompting questions about the state of the US economy (the last time the Fed cut 50bps to start an easing cycle was in September 2007 and the recession started three months later).
As we have noted in recent days, while the market-implied probability of a 50bps cut has slumped in the past few weeks, and is down to just 17% as of this writing, there are two arguments why the Fed may still go for the “shock and awe” approach.
The first one framed by Morgan Stanley, which is confident the Fed will cut 50bps tomorrow, is that while domestic US economic data has posted a substantial improvement in recent weeks, the Fed – which now sees itself as the world’s central bank – is less concerned about current coincident US economic data and more concerned about the leading indicators and future coincident US economic data. The Fed points to global growth, trade uncertainty, and manufacturing weakness to justify its concerns. So, given the claims that US data has been so good, Morgan Stanley compared the current state of affairs in…
US and global manufacturing (via PMIs)
US and broader economic data (via popular surprise indices),and
US financial conditions
…to that which existed on or just before the September 18,2007 FOMC meeting, when readers may recall, the FOMC cut 50bp at that meeting. Here, Morgan Stanley urges to look at the first cut in 2007 without the benefit of hindsight – meaning, the Fed’s decision to cut 50bp had nothing to do with the coming recession (which started just three months later, in December of that year) or the ensuin financial crisis. It was about lessening downside risks coming from tighter financial conditions. Today, it’s about downside risks coming from global growth and trade uncertainty. And as shown in the chart below, things look worse today than at the September 2007 meeting on every metric.
Looking at the above comparison between 2019 and 2007, Morgan Stanley concludes that “it will be hard for the FOMC to look at Exhibit 3and think a 25bp cut would be enough at this point.”
Besides the macroeconomic argument, Morgan Stanley also brings up the purely tactical one: with interest rates already precariously low for an easing cycle (thanks to the “r-star” which appears to be in the neighborhood of zero), “every rate cut needs to count.”
As Morgan Stanley explains, with limited room to cut rates, the Fed should save rate cuts for when they are most needed, and due to the limited room the Fed has to lower interest rates, every rate cut needs to count. But how do you make every rate cut count? Simple: by delivering more than what markets price in (i.e. 25bps). That is exactly what happened during the 2001-2003and 2007-2008 hiking cycles
Also, during those cycles, the Fed had much more room to lower rates than it does today.
* * *
A second reason for why the Fed will likely surprise the market dovishly and cut 50bps, comes from Nomura’s Charlie McElligott today, who instead of looking at macroeonomic conditions, whether domestic or international, focuses on persistent dollar strength, the “nervous” funding and money markets, and the (partially) clogged up dollar liquidity.
As McElligott explains, a scenario where the Fed would shock the markets with a 50bps cut would likely come down to their (unspoken) concerns around
USD strength (as a clear headwind to achieving their inflation goal and as a headwind to US exporters) which comes part and parcel with
Dollar funding/liquidity “tightness” into a slowing global economy
Specifically, USD-funding markets/indicators are getting even “nervier” and beyond the already-increasingly erratic month-end turn “tightness.” Here, McElligott also refers to the latest Treasury refunding/issuance announcement, where the Treasury said it now expect to borrow a whopping $433B in Q3 to rebuild the cash supply following the suspension of the debt ceiling “deal”, this as we noted yesterday, is more than double the April estimate.
This means a massive wall of T-Bill issuance coming in the next 2 months – one which will promptly soak up liquidity from the banking system (see chart below), into a backdrop where Dealer balance sheets are already loaded to the gills along-with increasingly “price-sensitive” domestic investors and foreign real $ who too remain sensitive to the cost of the almost “punitive” FX hedge.
To underscore his point that dollar plumbing/liquidity looks “messy” across a number of markets / indicators, McElligott notes the following:
We have seen meaningful FRA-OIS widening since the end of May (3m nearly doubling from 16bps to current 30bps) which is likely to stay elevated in coming weeks, in light of the aforementioned issuance/collateral soon to hit the market;
Cross-Currency Basis for US Dollar funding is now too ‘cat (more expensive for foreign entities to fund in Dollars—i.e. 3m EURUSD from +4.75 on Jan 9th to today’s -25.5bps);
The anomalous dynamic of Fed Funds (effective rate) trading above IOER (and despite a number of IOER cuts throughout QT), which is a “free money arb” for banks that should not exist because in theory, banks should lend at the higher FF rate instead of parking money with the Fed where they are paid “lower” IOER—but are not doing so;
Despite the Fed’s dovish pivot since early January to reverse the “financial conditions tightening tantrum” of 4Q18, the SOMA runoff has continued unabated throughout 2019, where said “supply shift” (more going to private investors and not Fed) has continued upward pressure on repo rates vs OIS (tighter funding);
And finally, as bank reserves have continued to shrink (the supposed basis for the Fed’s stance change) in addition to the now “known” / imminent Bill-issuance spike potential impact across money rates, SOFR volatility/spread to IOER is too likely to remain elevated (tighter funding)
To the Nomura strategist, this collective technical “USD funding tightness” is behind the dollar index trading at 27 month highs, despite imminent perceived Fed cut(s) and data softening—which in turn have teased many in the market to try to get “short Dollar.”
Of course, to the inflation-targeting obsessed Fed, this “strong Dollar” dynamic is an inflation headwind; an economic/exporter headwind; and now – most importantly – “a very political headwind to the US Administration.“
Meanwhile, with other central banks globally pivoting in their own efforts to resume easing/currency devaluation efforts (particularly ECB resumption soon), there is increased pressure on the Fed to “go fast”, especially ahead of the 2020 election cycle, where they do not want to be part of the political landscape.
* * *
With all that said, the decision how much to cut will ultimately be up to Jerome Powell and the FOMC, and it will be unveiled at 2pm tomorrow. Which then brings us to the only binary question that matters for traders ahead of tomorrow’s historic – first easing cycle in 12 years -event:
How might the market react to different outcomes?
While there are various combinations of rate cuts and statement language, Morgan Stanley considers the market reaction to three of the most probable outcomes:
25bp rate cut and retention of the “closely monitor” language
Expect market to price in 15-20bp of rate cuts at the September meeting.
Expect market to price 40-55bp of rate cuts by year-end out of August 1, or 65-80bp by
year-end from today, i.e., inclusive of the 25bp cut delivered on July 31.
Expect market to price 90-105bp of rate cuts over the 12 months from today, i.e., inclusive of the 25bp cut delivered on July 31.
Expect UST 2y to trade at 1.71-1.83%
Expect UST 2s10s to trade at 25-29bp
Expect UST 2s30s to trade at 76-84bp
50bp rate cut and a reversion to the”patient” language
Expect market to price in 5bp of rate cuts at the September meeting.
Expect market to price in 25-40bp of rate cuts by year-end out of August 1, or 75-90bp
by year-end from today, i.e., inclusive of the 50bp cut delivered on July 31.
Expect market to price 100-115bp of rate cuts over the 12 months from today, i.e.,
inclusive of the 50bp cut delivered on July 31.
Expect UST 2y to trade at 1.63-1.75%
Expect UST 2s10s to trade at 28-32bp
Expect UST 2s30s to trade at 81-90bp
50bp ratecut, replace”closely monitor” with “continueto monitor” (basecase)
Expect market to price in 10bp of rate cuts at the September meeting.
Expect market to price in 40-60bp of rate cuts by year-end out of August 1, or 90-110bp
by year-end from today, i.e., inclusive of the 50bp cut delivered on July 31.
Expect market to price 115-125bp of rate cuts over the 12 months from today, i.e., inclusive
of the 50bp cut delivered on July 31.
Expect UST 2y to trade at 1.55-1.63%
Expect UST 2s10s to trade at 32-36bp
Expect UST 2s30s to trade at 90-96bp
JPMorgan has a somewhat streamlined take on how to trade tomorrow’s binary rate cut, which it breaks down into a “good case” and “best case”
Good case (odds: 20%) – the Fed cuts the FF and IOER rates by 25bp and concludes the balance sheet run-off process (which is 6 weeks earlier than previously scheduled). The statement stays largely the same as before. Powell doesn’t use the word patient and signals at least one additional 25bp cut this year. His emphasis during the press conf. isn’t just on “insurance” but also disinflationary headwinds, a flat yield curve, and ongoing int’l pressures. Powell doesn’t shy away from balance sheet questions and says this very much remains a key component of the policy toolkit (and hints the balance sheet could be utilized even before the FF returns to zero). No one dissents.
Best case (odds: 10%) – everything in the “good case” except the Fed cuts rates 50bp.
Finally, we present one final consideration from McElligott, who thinks a 50bps power cut perversely risks a market interpretation that this is then “just” a one-time “insurance cut” action, as opposed to a 25bps “slow-and-steady” cut which opens door to more behind.
Meanwhile, with the more-probable 25bps cut outcome, there still remains “execution risk” with regards to Fed forward guidance as well, as the Fed needs to execute the above “dovish 25bps cut” at the least in order to keep door open for further action, or risk disappointing markets.
via ZeroHedge News https://ift.tt/333zIT6 Tyler Durden
There are “real-time” spies in the skies. Satellites have already begun watching your every move as mass surveillance becomes a horror story reality, especially for liberty-loving humans.
While commercial satellite imagery is powerful enough, for instance, to see a car, it’s not detailed enough to identify the make and model, according to a report from the MIT Technology Review. But privacy and freedom advocates say that doesn’t matter in the least. The problem, is we’re already being watched by them.
According to CNET, the dramatic advances in satellite imaging technology in the last 10 years have privacy advocates worried about the 24-hour surveillance. Satellite companies claim that they keep a person’s data separate from any identifying characteristics, but Peter Martinez of the Secure World Foundation is one of those still concerned about the constant monitoring of people.
“The risks arise not only from the satellite images themselves but the fusion of Earth observation data with other sources of data,” Martinez said in an email.
The problem is the sheer volume of satellites overhead. Imaging company Planet Labs confirmed that it has 140 imaging satellites currently in orbit. The report says this is enough to pass over every place on Earth once a day. And those who own the satellites say not to worry.
“Even with Planet’s highest resolution imagery (1m resolution), it remains impossible to distinguish individual people, car number plates, or otherwise identifying information. Our imagery is ideal for monitoring large-scale change on a daily basis. This includes seeing daily change across buildings and roads, forests, in agriculture, bodies of water and more,” a spokesperson for Planet Labs said in an email.
Technology is growing at a rapid pace, and with it grows governments’ surveillance capabilities. Although many are aware that they are being monitored and tracked by those who claim to own us, some don’t know just how bad it has become. Everyone wants some form of privacy, however, the world we live in doesn’t offer much.
Many countries have surveillance systems, but the countries in the Five Eyes, Nine Eyes and 14 Eyes alliances work together to share data on a massive scale,according to a report by Cloud Wards. Innocent people are spied on every day. The Five Eyes, Nine Eyes, and 14 Eyes groups are big players in the global surveillance game. Each country involved can carry out surveillance in particular regions and share it with others in the alliance.
The Five Eyes are the U.S., UK, Canada, Australia, and New Zealand.
The Five Eyes alliance, also known as FVEY, was founded on Aug. 14, 1941, and can be traced back to the WWII period. During the second world war, the exchange of intelligence information between the UK and the U.S. was important, and the partnership continued afterward.
The Nine Eyes alliance consists of the Five Eyes countries, plus Denmark, France, the Netherlands and Norway. Though there’s evidence that the Nine Eyes and 14 Eyes exist, little is known about what they can and can’t do.
The 14 Eyes alliance is made up of the Nine Eyes countries, plus Germany, Belgium, Italy, Spain and Sweden. It’s an extension of the Five Eyes and Nine Eyes alliances, but its actual name is SIGINT Seniors Europe. –Cloud Wards
As technology continues to advance, we will lose all privacy and all freedom. We are already well on our way to complete totalitarianism.
via ZeroHedge News https://ift.tt/2YuhpqV Tyler Durden
President Trump has routinely pumped the coal industry, calling it “indestructible” and telling everyone on social media that “coal is back.”
Coal consumption just crashed to its lowest level in four decades, and a string of bankruptcies from major coal producers has many people asking: Where is President Trump?
The Lexington, Kentucky-based natural resource company said in court documents that it has $1 billion in debt, compared to $165 million in Ebitda in 2018. The company plans on shedding at least $650 million in debt.
The latest announcement comes after a string of bankruptcy proceedings from coal companies in Kentucky.
Kentucky Attorney General Andy Beshear requested on July 15 that the United States Trustee repay hundreds of Kentucky miners left out of work after Blackjewel, LLC, another major coal producer that recently filed for bankruptcy.
Blackjewel removed paychecks from employees bank accounts earlier this month. Another check mid-month never came. Miners and their families were left speechless, they had to draw on savings, if not run up their credit card debt to make ends meet.
“The failure of Blackjewel to prepare for bankruptcy has created unnecessary chaos for our miners and their families — the uncertainty they have had to face is wrong and it must end,” Beshear said. “My office is using all our powers to seek answers to the complaints we have received regarding clawed back paychecks, bounced checks and child support issues.”
“No Kentuckian should be treated this way for putting in an honest day’s work,” he said.
President Trump was famous for saying “We are going to put our coal miners back to work” at a March 2017 “Make America Great Again” rally.
Blackhawk operates 19 underground mines and six surface mines in Kentucky and West Virginia, considered one of the biggest producers of metallurgical coal in the nation. The company borrowed massive amounts of debt, “anticipating that the pricing environment in the metallurgical coal market would improve starting in late 2015.”
The Blackhawk bankruptcy is the third major Kentucky coal producer to file for Chapter 11 since mid-June. Alpha Natural Resources and Peabody Energy have also filed for bankruptcy in recent years.
In Kentucky, coal employment has collapsed in the last decade. Mining jobs in Eastern Kentucky plunged from 13,700 in 2011 to just 4,000 in 2017. In 1Q19, there were 3,960 coal jobs in the region.
Several reports cited dwindling growth of electricity demand has contributed to coal’s demise, due to more stringent environmental regulations.
Twitter archive shows President Trump has gone radio silent on the coal industry since the bankruptcy wave started earlier this year.
And just like the bailouts President Trump has issued to farmers, it wouldn’t shock us if the administration is preparing bailouts for the coal industry, just in time for the 2020 election.
via ZeroHedge News https://ift.tt/2Keg6TP Tyler Durden
