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Authored by Molly Jane Zuckerman via CoinTelegraph.com,

Iran and Russia could start using cryptocurrencies to avoid Western sanctions, Russian news portal RBC reported yesterday, May 17.

image courtesy of CoinTelegraph

Mohammad Reza Pourebrahimi, the head of the Iranian Parliamentary Commission for Economic Affairs, referred to cryptocurrencies as a promising way for both countries to avoid US dollar transactions, as well as a possible replacement of the SWIFT interbank payment system.

At a meeting with Dmitry Mezentsev, the Chair of the Federation Council Committee on Economic Policy, Pourebrahimi said that they have “engaged the Central Bank of Iran to start developing proposals for the use of cryptocurrency.”

Pourebrahimi added that he discussed this topic in the State Duma’s Committee on Economic Policy the day before and that Iran had established cooperation with Russia on this issue:

“They [Russia] share our opinion. We said that if we manage to move this work forward, then we will be the first countries that use cryptocurrency in the exchange of goods.”

In turn, Mezentsev noted that “interbank relations between our countries should be of great importance” against the backdrop of international sanctions currently in place against both Russia and Iran. The meeting of the interbank working group on financial and interbank cooperation will be held in Tehran on July 5 of this year, RBC reports.

Last week, Pourebrahimi had reported that without access to the international banking system, Iranian citizens have so far succeeded in siphoning a staggering $2.5 bln out of the country in crypto.

Venezuela, another country facing international sanctions, recently released its own oil-backed cryptocurrency, the Petro, in a move that some critics saw as an illegal way to enter the international financial markets. After the Petro’s launch, both Turkey and Iran had expressed interest in releasing their own state-backed cryptocurrencies as well, with Russia’s own CryptoRuble reportedly set to launch in mid-2019.

via RSS https://ift.tt/2LfjUEf Tyler Durden

Something odd took place one month ago, when the PBOC announced on April 17 that it would cut the reserve requirement ratio (RRR) by 1% to ease financial conditions: it broke what until then had been a rangebound market for both the US Dollar and the US 10Y Treasury, sending both the dollar index and 10Y yields soaring…

… which led to an immediate tightening in financial conditions both domestically and around the globe, and which has – at least initially – manifested itself in a sharp repricing of emerging market risk, resulting in a plunge EM currencies, bonds and stocks.

Adding to the confused market response, this violent move took place at the same time as geopolitical fears about Iran and Syria, and concerns about a new war in the middle east, sent oil soaring – with Brent rising above $80 this week for the first time since 2014 – a move which is counterintuitive in the context of the sharply stronger dollar, and which has resulted in even tighter financial conditions for emerging market importers of oil, which with the exception of OPEC nations, is virtually all of them.

Meanwhile, all this is playing out in the context of a world where the Fed continues to shrink its balance sheet – a public sector “public Quantitative Tightening (QT)” – further tightening monetary conditions (i.e., shrinking the global dollar supply amid growing demand), even as high grade US corporate bond issuance has dropped off a cliff for cash-rich companies, which now opt to repatriate cash instead of issuing domestic bonds, with the resulting private sector deleveraging, or “private sector QT”, further exacerbating the tighter monetary conditions.

And while the latest incarnation of the dollar’s “impossible trilemma” – rising dollar, rising oil, rising yields (not to be confused with its conventional Chinese variant) makes a short, if perplexing appearance, ultimately it’s all about the value of the dollar, and its impact on downstream assets and volatility.

This is also the point made by Deutsche Bank’s derivatives expert Aleksandar Kocic, who writes that in the context to the Fed’s normalization and monetary policy fine tuning, the “USD is emerging as the key variable — it presents a compact summary of the underlying macro risks that could destabilize the current Fed path.” In other words, the last thing the Fed wants right now as it accelerates its balance sheet normalization, is a sharp spike in the dollar. And yet, that’s precisely what it has gotten. Kocic explains:

A strong USD corresponds to generally hawkish Fed in an environment where the US is recovering fast while the rest of the globe is still too slow or recessionary, or that the Fed is pushing rates above the neutral and causing excessive tightening of financial conditions and potentially triggering recession. A weak USD path, on the other hand, can materialize either as an inflation or credit (twin deficits) risk, a troubling possibility to which there is no adequate policy response.

For Kocic, the relative strength of the dollar is the exogenous event that could awake markets from their peaceful slumber, resulting in a violent reappraisal of monetary conditions as the Fed quietly undoes the biggest monetary experiment in history, or as he puts it, “although unwind of stimulus and Fed exit continue without disrupting the markets, the underlying stability remains local, threatened potentially by the tail risk.”

For now, the DB strategist notes, “the current market configuration appears to be cooperating with the Fed’s efforts in either scenario” and “market positioning and flows are likely to cause offsetting pressure to each macro risk and therefore help stability of the system.”

In particular, strong USD, which is bullish for bonds, in terms of global sponsorship, is also bearish for EM currencies and reserve managers there are likely to defend local currencies by selling US assets, which goes against macro. Similarly, their response to weaker USD would stabilize bear steepeners on the back of defending their exports through stabilization of EM currencies and support for the US long end.

The bigger problem, one discussed by Kocic previously, and which also takes the shape of the yield curve in consideration, is that with every passing day of normalization manifesting itself in bear flatteners, the market gets closer to the tipping point of duration decrease in which a rotation from risk assets into the short-end of the curve threatens a forced “price discovery” of the new “Fed put” (which Kocic recently calculated was in the 2,300-2,400 range).

So in this context of a creeping bear flattener, Kocic observes that together with the stronger USD, these two discrete trends have a potential to create more volatility and discomfort across all market sectors than bear steepeners if they both remain localized and do not trigger tail risk.

How does this look schematically? Luckily, the Deutsche Banker has come up with a handy flowchart showing the next steps in how the stronger dollar could lead to an “explosive” move in not only the front end of the curve, but across all markets:

Causality chain of strong USD and its potential knock-on effect is shown in the chart. We start at the lower left corner. Fed hikes and strong USD open up the EM dilemma: Facing the outflows or defending the currency at expense of stifling the growth. This implies both, more volatility and potential sell off in EM, and bearish pressure on the long end of the UST that would offset the underlying bid for US bonds (strong USD is bullish). Turbulence in EM could have a knock-on effect on risk assets in the US.

Why is the above critical? Because if the cycle were to play out, it would result in the same set of conditions which led to a global bear market back in 2015 in the aftermath of China’s devaluation (odd, there’s China again precipitating a global market crisis):

An example is the 2015 episode where asset managers faced redemptions due to EM losses and had to sell the best performing assets (US equities) to cover those costs. This means more turbulence in developed markets and possible tightening of financial conditions, which could question the strength of the USD and possibly push Fed to take a pause.

But the real punchline is just how trapped the Fed now is, because should Powell “relent” and hint that the Fed may take a break in order to spare EMs and stocks, well the result would be an avalanche of short covering in the Eurodollar market, one which would lead to an even more dramatic, or as Deutsche calls it “explosive” move in the short end:

Given record shorts on the Eurodollar curve (Figure), Fed pause is likely to trigger unwind of these position which could be explosive and the front end of the curve could rally hard.

The punchline: the dollar surge, catalyzed by the April 17 PBOC RRR cut, has launched a feedback loop which, very much like the Chinese 2015 devaluation, culminates in one of two possible disastrous – for the Fed – outcomes: a collapse in EMs should dollar strength not be arrested, which morphs into a broad-based liquidation of all risk assets  (this would require at least verbal Fed intervention) or if the Fed relents, again, as it did in 2016 with the Shanghai Accord, it threatens to crush the biggest ED net spec position ever, leading to trillions in paper losses:

The EPFR data reflecting the ETF and Mutual Funds Flows show continued outflows from the emerging markets and inflows into the short end of the UST curve, which is only increasing the stress in this sector. So, although we should see continued stability at the long end of the curve due to offsetting pressures between macro and flows, a slow grind of the front end, if persists, could morph into a volatile whipsaw. Further strength in the USD and the front end sell off on the back of more hawkish Fed could be potentially bearish for risk assets and act as a trigger for rates reversal.

In short, while the Fed has found itself trapped before, it is only the spike in the dollar that has now forced the Fed to act – with either decision, further hawkishness or a dovish relent, leading to major market pain. And the longer the Fed delays making the key decision, the more painful the outcome will be.

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Authored by Mollie Hemingway via TheFederalist.com,

It’s reasonable to assume that much of the new information in the New York Times report relates to leakers’ fears about information that will be coming out in the inspector general report.

The New York Times published an article this week confirming the United States’ intelligence apparatus was used to spy on Donald Trump’s presidential campaign in 2016.

Here are a few key takeaways.

1. FBI Officials Admit They Spied On Trump Campaign

The New York Times‘ story, headlined “Code Name Crossfire Hurricane: The Secret Origins of the Trump Investigation,” is a dry and gentle account of the FBI’s launch of extensive surveillance of affiliates of the Trump campaign. Whereas FBI officials and media enablers had previously downplayed claims that the Trump campaign had been surveiled, in this story we learn that it was more widespread than previously acknowledged:

The F.B.I. investigated four unidentified Trump campaign aides in those early months, congressional investigators revealed in February. The four men were Michael T. Flynn, Paul Manafort, Carter Page and Mr. Papadopoulos, current and former officials said…

The F.B.I. obtained phone records and other documents using national security letters — a secret type of subpoena — officials said. And at least one government informant met several times with Mr. Page and Mr. Papadopoulos, current and former officials said.

This is a stunning admission for those Americans worried that federal law enforcement and intelligence agencies might use their powers to surveil, leak against, and target Americans simply for their political views or affiliations. As Sean Davis wrote, “The most amazing aspect about this article is how blasé it is about the fact that the Obama admin was actively spying on four affiliates of a rival political campaign weeks before an election.”

The story says the FBI was worried that if it came out they were spying on Trump campaign it would “only reinforce his claims that the election was being rigged against him.” It is easy to understand how learning that the FBI was spying on one’s presidential campaign might reinforce claims of election-rigging.

2. Terrified About Looming Inspector General Report

People leak for a variety of reasons, including to inoculate themselves as much as they can. For example, only when the secret funders of Fusion GPS’s Russia-Trump-collusion dossier were about to be revealed was their identity leaked to friendly reporters in the Washington Post. In October of 2017 it was finally reported that the Clinton campaign and Democratic National Committee secretly paid for the Russia dossier, hiding the arrangement by funneling the money through a law firm.

The friendly reporters at the Washington Postwrote the story gently, full of reassuring quotes to downplay its significance. The information only came about because House Permanent Select Committee on Intelligence Chairman Devin Nunes subpoenaed the bank records of Fusion GPS, over the objections of Democrats on the committee. Even in this Times story, Clinton’s secret funding was not mentioned.

Likewise, the admissions in this New York Times story are coming out now, years after selective leaks to compliant reporters, just before an inspector general report detailing some of these actions is slated to be released this month. In fact, the Wall Street Journalreported that people mentioned in the report are beginning to get previews of what it alleges. It’s reasonable to assume that much of the new information in the New York Times report relates to information that will be coming out in the inspector general report.

By working with friendly reporters, these leaking FBI officials can ensure the first story about their unprecedented spying on political opponents will downplay that spying and even attempt to justify it. Of note is the story’s claim that very few people even knew about the spying on the Trump campaign in 2016, which means the leakers for this story come from a relatively small pool of people.

3. Still No Evidence of Collusion With Russia

In paragraph 69 of the lengthy story, The New York Times takes itself to task for burying the lede in its October 31, 2016, story about the FBI not finding any proof of involvement with Russian election meddling.

The key fact of the article — that the F.B.I. had opened a broad investigation into possible links between the Russian government and the Trump campaign — was published in the 10th paragraph.

It is somewhat funny, then, to read what The New York Times buries in paragraph 70 of the story:

A year and a half later, no public evidence has surfaced connecting Mr. Trump’s advisers to the hacking or linking Mr. Trump himself to the Russian government’s disruptive efforts.

No evidence of collusion after two years of investigation with unlimited resources? You don’t say! What could that mean?

4. Four Trump Affiliates Spied On

Thanks to the work of the House Permanent Select Committee on Intelligence and the Senate Judiciary Committee, Americans already learned that the FBI had secured a wiretap on Carter Page, a former Trump campaign official. That wiretap, which was renewed three times, was already controversial because it was secured in part through using the secretly funded opposition research document created by the Hillary Clinton campaign and Democratic National Committee. The secret court that grants the wiretap was not told about Hillary Clinton or the DNC when the government applied for the wiretap or its renewals.

Now we learn that it wasn’t just Page, but that the government was going after four campaign affiliates including the former campaign manager, the top foreign policy advisor, and a low-level advisor whose drunken claim supposedly launched the investigation into the campaign. The bureau says Trump’s top foreign policy advisor and future national security advisor — a published critic of Russia — was surveiled because he spoke at an event in Russia sponsored by Russia Today, a government-sponsored media outlet.

5. Wiretaps, National Security Letters, and At Least One Spy

The surveillance didn’t just include wiretaps, but also national security letters and at least one government informant to spy on the campaign.:

The F.B.I. obtained phone records and other documents using national security letters — a secret type of subpoena — officials said. And at least one government informant met several times with Mr. Page and Mr. Papadopoulos, current and former officials said. That has become a politically contentious point, with Mr. Trump’s allies questioning whether the F.B.I. was spying on the Trump campaign or trying to entrap campaign officials.

This paragraph is noteworthy for the way it describes spying on the campaign — “at least one government informant met several times with Mr. Page and Mr. Papadopoulos” — before suggesting that might not be spying. The definition of spying is to secretly collect information, so it’s not really in dispute whether a government informant fits the bill.

Despite two years of investigation and surveillance, none of these men have been charged with anything even approaching treasonous collusion with Russia to steal a U.S. election.

6. More Leaks About a Top-Secret Government Informant

The House Permanent Select Committee on Intelligence recently subpoenaed information from the FBI and Department of Justice. They did not publicly reveal what information they sought, but the Department of Justice responded by claiming that they were being extorted by congressional oversight. Then they leaked that they couldn’t share the information because it would jeopardize the life of a government informant. They also waged a public relations battle against HPSCI Chairman Nunes and committee staff.

But far from holding the information close to the vest, the government has repeatedly leaked information about this informant, and even that it was information about an informant that was being sought by Congress. From leaks of personally identifying information to the Washington Post, we’ve learned that this source works with the FBI and CIA, and is a U.S. citizen.

In The New York Times, additional information about a government informant leaked, including that the source met with Papadopoulos and Page to collect information. The information on an alleged source in the Trump campaign is so sensitive they can’t give it to Congress, but they can leak it to friendly press outlets like the Post and Times. It’s an odd posture for the Justice Department to take.

It is unknown at this point whether the informants were specifically sent by a U.S. agency or global partner, or whether the sources voluntarily provided information to the U.S. government.

7. Ignorance of Basic Facts

One thing that is surprising about the story is how many errors it contains. The problems begin in the second sentence, which claims Peter Strzok and another FBI agent were sent to London. The New York Times reports that “[t]heir assignment, which has not been previously reported, was to meet the Australian ambassador, who had evidence that one of Donald J. Trump’s advisers knew in advance about Russian election meddling.”

Of course, it was previously reported that Strzok had a meeting with the Australian ambassador. He describes the embassy where the meeting took place as the longest continually staffed embassy in London. The ambassador was previously reported to have had some information about a Trump advisor saying he’d heard that Russia had Clinton’s emails.

Another New York Times error was the claim, repeated twice, that Page ‘had previously been recruited by Russian spies.’

It’s also inaccurate to say this was “election meddling,” necessarily. Clinton had deleted 30,000 emails that were housed on her private server even though she was being investigated for mishandling classified information. This could be viewed as destruction of evidence. She claimed the emails had to do with yoga.

FBI Director James Comey specifically downplayed for the public the bureau’s belief that foreign countries had access to these emails. There is no evidence that Russia or any other country had these emails, and they were not released during the campaign. To describe this legitimate national security threat as “election meddling” is insufficient to the very problem for which Clinton was being investigated.

The story claims, “News organizations did not publish Mr. Steele’s reports or reveal the F.B.I.’s interest in them until after Election Day.” That’s demonstrably untrue. Here’s an October 31, 2016, story headlined “A Veteran Spy Has Given the FBI Information Alleging a Russian Operation to Cultivate Donald Trump.” It is sourced entirely to Steele. In September, Yahoo News’ Michael Isikoff took a meeting with Steele then published “U.S. intel officials probe ties between Trump adviser and Kremlin” on September 23, 2016. That story was even used in the Foreign Intelligence Service Act application against Page.

The New York Times writes, “Crossfire Hurricane began exactly 100 days before the presidential election, but if agents were eager to investigate Mr. Trump’s campaign, as the president has suggested, the messages do not reveal it. ‘I cannot believe we are seriously looking at these allegations and the pervasive connections,’ Mr. Strzok wrote soon after returning from London.”

There are multiple problems with this claim. For one, Strzok wrote that text in all caps with obvious eagerness. As the Wall Street Journal noted months ago, “Mr. Strzok emphasized the seriousness with which he viewed the allegations in a message to Ms. Page on Aug. 11, just a few days before the ‘insurance’ text. ‘OMG I CANNOT BELIEVE WE ARE SERIOUSLY LOOKING AT THESE ALLEGATIONS AND THE PERVASIVE CONNECTIONS,’ he texted.”

For another, Strzok repeatedly talked about how important and time-sensitive he felt the investigation was. As Andrew McCarthy highlighted in his deep look at some of these texts, as Strzok prepared for his morning flight to London, he compared the investigations of Clinton and Trump by writing, “And damn this feels momentous. Because this matters. The other one did, too, but that was to ensure that we didn’t F something up. This matters because this MATTERS.”

Another New York Times error was the claim, repeated twice, that Page “had previously been recruited by Russian spies.” In fact, while Russian agents had tried to recruit him, they failed to do so, and Page spoke at length with the FBI about the attempt before the agents were arrested or kicked out of the country.

The New York Times falsely reported that “Mr. Comey met with Mr. Trump privately, revealing the Steele reports and warning that journalists had obtained them.” Comey has told multiple journalists that he specifically did not brief Trump on the Steele reports. He didn’t tell Trump there were reports, or who funded them. He didn’t tell him about the claims in the reports that the campaign was compromised. He only told him that there was a rumor Trump had paid prostitutes to urinate on a Moscow hotel bed that the Obamas had once slept in.

The story also repeats long-debunked claims about the Republican platform and Ukraine.

8. Insurance: How Does It Work?

The story reminds readers that Strzok once texted Page “I want to believe the path you threw out for consideration in Andy’s office — that there’s no way he gets elected, but I’m afraid we can’t take that risk. It’s like an insurance policy in the unlikely event you die before you’re 40.” The article says Trump thought this “insurance policy” referred to a plan to respond to the unlikely event of a Trump victory. It goes on:

But officials have told the inspector general something quite different. They said Ms. Page and others advocated a slower, circumspect pace, especially because polls predicted Mr. Trump’s defeat. They said that anything the F.B.I. did publicly would only give fodder to Mr. Trump’s claims on the campaign trail that the election was rigged.

Mr. Strzok countered that even if Mr. Trump’s chances of victory were low — like dying before 40 — the stakes were too high to justify inaction.

It’s worth asking whether reporters understand how insurance works. As reader Matt noted, “The fundament intent of Insurance is ‘Indemnification.’ Restoring back to original condition prior to loss. Trump was the peril, MSM the adjuster & his impeachment, the policy limits.”

The article’s repeated claims that the FBI didn’t think Trump would win do not counter the notion that an “insurance policy” investigation was in the extremely rare case he might win. People don’t insure their property against fire damage because they expect it to happen so much as they can’t afford to fix things if it does happen.

9. Eavesdropping, Not Spying, And Other Friendly Claims

The story could not be friendlier to the FBI sources who are admitting what they did against the Trump campaign. A few examples:

“[P]rosecutors obtained court approval to eavesdrop on Mr. Page,” The New York Timeswrites, making the wiretapped spying on an American citizen sound almost downright pleasant. When Comey briefs Trump only on the rumor about the prostitutes and urination, we’re told “he feared making this conversation a ‘J. Edgar Hoover-type situation,’ with the F.B.I. presenting embarrassing information to lord over a president-elect.” Reporters don’t ask, much less answer, why someone fearing a J. Edgar Hoover-type situation would go out of his way to create an extreme caricature of a J. Edgar Hoover situation.

The story also claimed, “they kept details from political appointees across the street at the Justice Department,” before using controversial political appointee Sally Yates to claim that there was nothing worrisome. In fact, the subtext of the entire story is that the FBI showed good judgment in its handling of the spying in 2016. Unfortunately, the on-the-record source used to substantiate this claim is Yates.

Yates, who was in the news for claiming with a straight face that she thought Flynn had committed a Logan Act violation, is quoted as saying, “Folks are very, very careful and serious about that [FISA] process. I don’t know of anything that gives me any concerns.” If Yates, who had to be fired for refusing to do her job under Trump, tells you things are on the up and up, apparently you can take it to the bank.

10. Affirms Fears of Politicized Intelligence

This New York Times story may have been designed to inoculate the FBI against revelations coming out of the inspector general report, but the net result was to affirm the fears of many Americans who are worried that the U.S. government’s law enforcement and intelligence agencies abused their powers to surveil and target Americans simply for their political views and affiliations. The gathered information has been leaked to media for years, leading to damaged reputations, and the launch of limitless probes, but not any reason to believe that Trump colluded with Russia to steal an election.

via RSS https://ift.tt/2ISi2CQ Tyler Durden

After much anticipation that following Trump’s ZTE gamble, China may relent in the ongoing trade war – stoked in no small part by Larry Kudlow’s false statement that Beijing had offered to reduce the US trade deficit by “at least $200 billion” – on Friday the U.S. and China wrapped up the second day of trade talks, and while Beijing made a vague, unenforceable commitment to buy more U.S. goods and services, it resisted Trump’s core demand that it cut by more than half the $375BN bilateral trade deficit.

According to the WSJ, while the Chinese were wary of committing to specific purchases – even though Kudlow also said China would buy more farm products, energy and financial services – they continue to look for a way to ease trade tensions between the two nations even if it means with token promises and gestures.

That said, there was one tangible achievement: late on Thursday, Beijing ended an antidumping probe into imported U.S. sorghum – used for feeding livestock and brewing alcohol – which had shut down U.S. sales to China. As a reminder, a month ago, on April 17, China slapped a 179% tariff on US sorghum just hours after the US banned exports to China’s telecom giant, ZTE. China’s Commerce Ministry said earlier that punitive measures on purchases of the crop would “affect the cost of living for consumers” in China. On Friday, China’s Commerce Ministry said it would return the deposits in full while announcing the end to the probe, essentially removing the penalties on U.S. sorghum producers.

The decision however has wider implications: it is a direct tit-for-tat in the ongoing discussion over the fate of ZTE sanctions, and as the WSJ wrote previously, the two sides have been negotiating a deal for the U.S. to ease sanctions on China’s blacklisted company. In exchange, China would end recent restrictions and tariffs on U.S. agricultural products.

Currently the Commerce Department forbids U.S. companies from supplying parts to ZTE. Mr. Kudlow said that the U.S. was considering easing the punishments. Alternative sanctions could include changing senior management and board members, Mr. Kudlow told Fox Business Network. Such changes “would be very harsh,” he said.

As such, all that was achieved this week was for China to overturn a policy it implemented a month ago in response to an enforcement action that Trump similarly enacted in mid-April.

At the same time, one of Washington’s central demands – that China reduce its merchandise trade surplus with the U.S. of $375 billion by at least $200 billion by the end of 2020 – remains unaddressed, even though economists in both nations say that the trade deficit is affected by investment and savings patterns in both nations, not trade policy, and as such it isn’t feasible to be changed with the stroke of a pen absent dire economic consequences. Beijing has rejected U.S. demands in the past and has continued to hold firm, said the people briefed on the talks.

As previously noted, on Friday commentary posted bu Xinhua News Agency said that the “offer” to cut China’s trade surplus with the U.S. was fake news and was “nonexistent” and that reports that China accepted the U.S. demand to narrow the trade gap are “purely a misreading.” also known as fake news.

The article said that China will “never negotiate under the conditions set by the U.S.” and added that “two sides made progress in areas such as the U.S. allowing more exports of technology products including semiconductors, as well as lifting restrictions on energy exports” but stressed that “China won’t make unilateral concessions.”

As a result, while both sides have quietly agreed to drop the demand that the deficit be slashed, the new demand the US has pivoted into is for Beijing to buy more US goods and services, which is great except for the problem that there is no way to enforce it.

The U.S. Agriculture Department recently asked agriculture companies to come up with a list of products whose production could be ramped up rapidly for export to China, said a person following the talks. At the same time, China put together a list of high-tech products that are barred by U.S. export controls for sale to China but are allowed by other nations. Beijing argues that if the U.S. would ease the export controls on these items, it would purchase more from the U.S., the person briefed on the matters said.

Even so, some U.S. officials believe, the additional Chinese purchases would only total $50 billion to $60 billion in the next year or two, far short of the U.S. goal.

* * *

Meanwhile, as trade discussions continue, the escalating trade war is starting to bite as growing tensions start hurting businesses in both countries. U.S. goods, from sorghum and soybeans to cars, have faced growing hurdles when entering China, while a U.S. order banning American companies from selling components to ZTE threatens to cripple the telecommunication-equipment producer and other state- owned Chinese companies, potentially resulting in the one thing Beijing fears the most: rising unemployment.

The WSJ also had some more details on the member of the Chinese delefation, including the country’s Vice Premier Liu He, who has been rapidly rising in China’s power ranks and is seen as China’s shadow power broker to the world, and who impressed Washington officials, said Kudlow, calling Liu a “smart guy, a market guy,” in a brief interview with White House reporters.

He said Mr. Liu met with President Trump on Thursday in the Oval Office and gave “an excellent presentation” involving reductions in Chinese tariffs and other measures. Mr. Trump became “much more optimistic than I have ever seen,” said Mr. Kudlow on Fox Business Network

Talking trade with the Vice Premier of the People’s Republic of China, Liu He. pic.twitter.com/9T7Iq6F3Xe

— Donald J. Trump (@realDonaldTrump) May 17, 2018

Ultimately, the fate of the trade war is up to Trump, and the tone he adopts: early this week, Trump said he would try to make sure ZTE got back in business, which has since led to a number of conciliatory gestures from Beijing. China’s antitrust regulators had delayed for months U.S. private-equity firm Bain Capital’s $18 billion deal for Toshiba Corp.’s memory-chip unit, but on Thursday the Japanese firm said regulators had allowed the deal to proceed. Chinese regulators also promised early this week to restart their review of U.S. chip maker Qualcomm Inc.’s bid for NXP Semiconductors NV, sending the price of NXP stock soaring and preventing a round of (metaphoric) suicides among the US hedge fund community where NXP is one of the largest M&A arbs around.

In return for relief on ZTE, China – which is one of the world’s biggest importers of US farm products – would agree to hold back penalties on a variety of U.S. agricultural products it announced in early April as retaliation for U.S. tariffs on Chinese steel and aluminum exports.

Finally, with the recent “elimination” of Peter Navarro from Trump’s inner circle of advisors, it appears that the trade war with China – which erupted right after Navarro’s unexpected promotion in the Trump administration, and resignation of Gary Cohn – is about to return to its prior, dormant state as the status quo wins again and US trade relations with Beijing – for better or worse – remain virtually unchanged.

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Following two weeks of mounting speculation over the FBI’s so-called “mole” inside the Trump campaign, the New York Times and Washington Post published separate accounts on Friday detailing the infiltration of the Trump campaign – a scheme revealed in a Wednesday report by the New York Times in which “at least one government informant met several times with Mr. Page and Mr. Papadopoulos.” The Wednesday report also disclosed the existence of “Operation Crossfire Hurricane” – the FBI’s code name for their early Trump-Russia investigation.

Thanks to Friday’s carefully crafted deep-state disclosures by WaPo and the Times, along with actual reporting by the Daily Caller‘s Chuck Ross, we now know it wasn’t a mole at all – but 73-year-old University of Cambridge professor Stefan Halper, a US citizen, political veteran and longtime US Intelligence asset enlisted by the FBI to befriend and spy on three members of the Trump campaign during the 2016 US election.

While Halper’s name remains undisclosed by the NYT and WaPo, a quick read of all three articles linked above makes it abundantly clear that the “American academic who teaches in Britain” described by The Times, who “met several times with Mr. Page and Mr. Papadopoulos” is none other than Halper – whose meetings with the Trump aides were revealed by the Daily Caller‘s Chuck Ross in late March.

Two months before the 2016 election, George Papadopoulos received a strange request for a meeting in London, one of several the young Trump adviser would be offered — and he would accept — during the presidential campaign.

The meeting request, which has not been reported until now, came from Stefan Halper, a foreign policy expert and Cambridge professor with connections to the CIA and its British counterpart, MI6.

Halper’s September 2016 outreach to Papadopoulos wasn’t his only contact with Trump campaign members. The 73-year-old professor, a veteran of three Republican administrations, met with two other campaign advisers, The Daily Caller News Foundation learned. –Daily Caller

These contacts are notable, as Halper’s infiltration of the Trump campaign corresponds with the two of the four targets of the FBI’s Operation Crossfire Hurricane – in which the agency sent counterintelligence agent Peter Strzok and others to a London meeting in the Summer of 2016 with former Australian diplomat Alexander Downer – who says Papadopoulos drunkenly admitted to knowing that the Russians had Hillary Clinton’s emails.

Interestingly Downer – the source of the Papadopoulos intel, and Halper – who conned Papadopoulos months later, are linked through UK-based Haklyut & Co. an opposition research and intelligence firm – founded by three former British intelligence operatives in 1995 to provide the kind of otherwise inaccessible research for which select governments and Fortune 500 corporations pay huge sums. 

Downer – a good friend of the Clintons, has been on their advisory board for a decade, while Halper is connected to Hakluyt through Director of U.S. operations Jonathan Clarke, with whom he has co-authored two books. (h/t themarketswork.com)

Alexander Downer, the Australian High Commissioner to the U.K. Downer said that in May 2016, Papadopoulos told him during a conversation in London about Russians having Clinton emails.

That information was passed to other Australian government officials before making its way to U.S. officials. FBI agents flew to London a day after “Crossfire Hurricane” started in order to interview Downer.

It is still not known what Downer says about his interaction with Papadopoulos, which TheDCNF is told occurred around May 10, 2016.

Also interesting via Lifezette – “Downer is not the only Clinton fan in Hakluyt. Federal contribution records show several of the firm’s U.S. representatives made large contributions to two of Hillary Clinton’s 2016 campaign organizations.”

Halper contacted Papadopoulos on September 2, 2016 according to The Caller – flying him out to London to work on a policy paper on energy issues in Turkey, Cyprus and Israel – for which he was ultimately paid $3,000. Papadopoulos met Halper several times during his stay, “having dinner one night at the Travellers Club, and Old London gentleman’s club frequented by international diplomats.” 

They were accompanied by Halper’s assistant, a Turkish woman named Azra Turk. Sources familiar with Papadopoulos’s claims about his trip say Turk flirted with him during their encounters and later on in email exchanges.

…

Emails were also brought up during Papadopoulos’s meetings with Halper, though not by the Trump associate, according to sources familiar with his version of events. The sources say that during conversation, Halper randomly brought up Russians and emails. Papadopoulos has told people close to him that he grew suspicious of Halper because of the remark. –Daily Caller

Meanwhile, Halper targeted Carter Page two days after Page returned from a trip to Moscow. 

Page’s visit to Moscow, where he spoke at the New Economic School on July 8, 2016, is said to have piqued the FBI’s interest even further. Page and Halper spoke on the sidelines of an election-themed symposium held at Cambridge days later. Former Secretary of State Madeleine Albright and Sir Richard Dearlove, the former head of MI6 and a close colleague of Halper’s, spoke at the event.

…

Page would enter the media spotlight in September 2016 after Yahoo! News reported that the FBI was investigating whether he met with two Kremlin insiders during that Moscow trip.

It would later be revealed that the Yahoo! article was based on unverified information from Christopher Steele, the former British spy who wrote the dossier regarding the Trump campaign. Steele’s report, which was funded by Democrats, also claimed Page worked with Trump campaign chairman Paul Manafort on the collusion conspiracy. –Daily Caller

A third target of Halper’s was Trump campaign co-chairman Sam Clovis, whose name was revealed by the Washington Post on Friday. 

In late August 2016, the professor reached out to Clovis, asking if they could meet somewhere in the Washington area, according to Clovis’s attorney, Victoria Toensing.

“He said he wanted to be helpful to the campaign” and lend the Trump team his foreign-policy experience, Toensing said.

Clovis, an Iowa political figure and former Air Force officer, met the source and chatted briefly with him over coffee, on either Aug. 31 or Sept. 1, at a hotel cafe in Crystal City, she said. Most of the discussion involved him asking Clovis his views on China.

“It was two academics discussing China,” Toensing said. “Russia never came up.” –WaPo

Who is Stefan Halper?

After attending Stanford and Oxford, Halper worked for the Nixon administration, where he ended up in the Office of Management and Budget as an Assistant Director, then moved to the Chief of Staff’s office in the Carter White House from 1974-1977. 

As such, Halper worked as an assistant to three Chiefs of Staff – Alexander Haig (until September 21, 1974), then Donald Rumsfeld (from September 21, 1974 to November 20, 1975), and then Dick Cheney (from November 20, 1975 to January 20, 1977). pic.twitter.com/cDqq0nO7k8

— The_War_Economy (@The_War_Economy) March 26, 2018

Halper was involved in US politics at the highest levels for decades, becoming George H.W. Bush’s National Director for Policy Development during his presidential campaign. After Bush lost to Reagan, Halper worked as Reagan’s Deputy Assistant Secretary of State – where he served under three different Secretaries.

Several Central Intelligence Agency related people were on the H. W. Bush campaign, including Ray Cline, Sam Wilson, Howard Aaron, Henry Knoche, Robert Gambino, Bruce Rounds, Jon Thomas, Jack Coackley and Richard Stillwell. All working with Halper.https://t.co/1dFOXnW5fm pic.twitter.com/yFyxCBIx91

— The_War_Economy (@The_War_Economy) March 26, 2018

He then became a senior advisor to the Department of Defense and DOJ between 1984 and 2001. Halper’s former father-in-law was Ray Cline, former Deputy Director of the CIA. He also allegedly spied on the Carter administration – collecting information on foreign policy (an account disputed by Ray Cline).

Apparently Halper and his team of Central Intelligence Agency people during the Reagan / Bush ticket actually collected inside information on the Carter Administration’s foreign policy – with Halper in charge – although Ray Cline rejected this account.https://t.co/h4bIIjgB4U pic.twitter.com/8qgEe1OJOO

— The_War_Economy (@The_War_Economy) March 26, 2018

As one can clearly see, Halper has been around the block a few times.

We can’t imagine he thought his legacy would be cast as the man who infiltrated the Trump campaign in what is shaping up to be the largest political corruption scandal in the history of the United States, which of course would have been swept under the rug had Hillary simply won the election as all the “experts” predicted.

President @realDonaldTrump:

I’m sure you are grateful Obama’s FBI planted an “informant” to protect your campaign. Thank goodness the NY Times and Washington Post figured it out!

Regards,

Rep. Adam Schiff

— thebradfordfile™ (@thebradfordfile) May 19, 2018

Did the FBI use informants in the Hillary Clinton investigation?

— Chuck Ross (@ChuckRossDC) May 18, 2018

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Just days after the George Soros-funded Open Society Foundation announced that it had withdrawn from Hungary and relocated to Berlin, Hungarian Prime Minister Viktor Orban accused Soros of fomenting anti-Semitism by aiding immigrants seeking safe harbor in Europe.

Orban’s response was prompted by Lauder’s apparent defense of Soros.

In an interview with German newspaper Bild, Lauder expressed concern about the Berlin move saying while he did not agree “with everything that US billionaire George Soros says or does,” but he considered the treatment of a man “who has done so much” in central European countries to spread democracy after the fall of communism to be unworthy.

In a written response to Ronald Lauder, the president of the World Jewish Congress, Orban said of Soros, who is Jewish, that:

“I would respectfully call your attention… to the fact that the Foundation and its founder bear personal responsibility for the growth of anti-Semitism in Europe.

They have brought people to Europe – among migrants – whose political and religious views have dramatically increased the vulnerability of our Jewish communities.

In contrast, Hungary and its government protects European Jewish communities when it prevents the uncontrolled entry of migrants into the European Union.

…

Our policy has moral and theoretical reasons, and also serves the idea of Jewish-Christian coexistence, in which we continue to believe with conviction. For this we do not expect any recognition, or gratitude from the World Jewish Congress, of course.”

Full letter here:

Orban won a fourth term as prime minister earlier this year and has become a figurehead of the anti-establishment, anti-immigrant political movement sweeping across much of Europe. Meanwhile, Soros has accused Orban – who once regarded the billionaire as a mentor – of using World War II-era tactics like billboards with anti-semitic images to ratchet up pressure on Soros’ organizations.

But it looks like Soros has bigger problems, for now at least: Because according to a recent 13-F, his fund recently scooped up a $35 million stake in TSLA convertible bonds.

 

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