Tag: finance

Just before midnight on Thursday, as residents of the battered eastern US were heading to bad after a long day of coping with the bomb cyclone, President Donald Trump was awake and apparently still fuming over the excerpts from Michael Wolff’s “Fire And Fury: Inside Trump’s White House”.

And as Trump often does when he’s frustrated, he decided to coin a new nickname for his erstwhile adviser and political ally, Steve Bannon – the source of many of the book’s most jaw-dropping claims. Playing on Bannon’s famously unkempt appearance, Trump labeled the Breitbart News chief “Sloppy Steve.”

 

I authorized Zero access to White House (actually turned him down many times) for author of phony book! I never spoke to him for book. Full of lies, misrepresentations and sources that don’t exist. Look at this guy’s past and watch what happens to him and Sloppy Steve!

— Donald J. Trump (@realDonaldTrump) January 5, 2018

 

Trump’s lawyers  slapped Bannon with a cease & desist letter on Wednesday. Shortly afterward, Trump pointed out Bannon’s declaration on Breitbart radio the night before, where the anti-establishment Republican called the president “a great man” and said he still supported him.

 

“Looks like he’s changed his tune,” Trump told the reporters. Trump’s legal team is also racing to stop the publication of Wolff’s new book, which was moved ahead to Friday and is reportedly already selling out at many book stores. Wolff cheekily thanked the president for what is probably the greatest marketing push an author could ask for (“buy the book the White House doesn’t want you to read!”)

Twitter unsurprisingly embraced Trump’s latest nickname:

 

Trump nicknames, ranked (best to worst):
Lyin’ Ted
Rocket Man
Little Rocket Man
Little Marco
Sloppy Steve
Crooked Hillary
Sleepy Eyes Chuck Todd
Cryin’ Chuck Schumer
Low Energy Jeb
Failing New York Times
Psycho Joe
Liddle Bob Corker
Pocahontas

— Olivia Nuzzi (@Olivianuzzi) January 5, 2018

 

Meanwhile, Bannon’s former political allies are rapidly trying to distance themselves from the renegade pol. The New York Times reported that the Mercer family has publicly denounced Bannon after being infuriated by the claim, included in the book, that they would back him if he decided to run for president in 2020.

CNN  reported that there’s been “a hard push” to convince Breitbart CEO Larry Solov and Susie Breitbart to fire Bannon.

That’s quite the fall from just a year ago when, shortly after the inauguration, Trump granted Bannon’s request to be included on the National Security Council.

via RSS http://ift.tt/2CJZ5iw Tyler Durden

Some readers may be shocked to learn that China, that paragon of central-planning credibility and virtuous data reporting, was cooking its books. Again.

According to SCMP, China’s economic figures for 2016 were revised lower by 54.2 billion yuan (US$8.34 billion) to 74.36 trillion yuan following a “miscalculation” revealed after a routine verification of the numbers, the National Statistics Bureau said on Friday.

While the amendment was not large enough to affect the earlier reported year-on-year growth rate of 6.7% for the world’s second-largest economy, the bureau said in a statement, the truth is that nobody knows – and certainly nobody can verify – any numbers coming out of China where there already are glaring discrepancies between GDP data reported at the province and national levels.

The revision was necessary because of earlier miscalculations across various sectors, the NSB added. More from SCMP:

In the financial sector, for instance, output had been overestimated by 101.1 billion yuan, while in the telecoms and software industry, the figures were 92.9 billion yuan higher then they should have been, the statement said.

At the same time, performance was underestimated in other sectors, including construction, retail and entertainment, with the combined total for “other services” adding 139.4 billion yuan to the bottom line.

A similar revision took place one year earlier, when China’s final figure for its 2015 GDP, released in early 2017, was 354.6 billion yuan higher than its initial estimate, while 12 months earlier the final figure for 2014 was revised down 22.9 billion yuan.

Don’t worry though, China is “on it”: Beijing is in the process of updating its statistics methods to better represent its vast and quickly changing economy, especially with regards to how provincial figures are calculated by local authorities with vested interests.

The statistics bureau is expected to publish its initial full-year figures for 2017 on January 18. In the first three quarters of the year, GDP rose by 6.9 per cent year on year to 59.33 trillion yuan. Since all Chinese numbers are goalseeked and have little reflection of the underlying reality, we expect that numbers will come precisely in-line.

 

 

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All Mac iOS devices and systems are exposed and vulnerable to the recently discovered chip bugs known as Spectre and Meltdown, Apple confirmed on Thursday. The flaws, which as we discussed before, allow hackers unauthorized access to a computer’s memory and sensitive data, were discovered by security researchers at Google Project Zero on Wednesday. Security vulnerabilities called Meltdown and Spectre affect almost all modern CPUs, including those produced by Intel, AMD and ARM Holdings.

“All Mac systems and iOS devices are affected,” Apple acknowledged in a statement on Thursday, adding that no cases had yet been reported of customers being affected by the security flaws.

To address these security vulnerabilities, Apple users may have noticed a suspiciously timed software update released earlier this week for their iPads, MacBooks and iPhones – an update that appeared to precede news about the latest controversy involving makers of microprocessors. Intel, one of the world’s largest chipmakers, admitted that its chips contain a flaw making it easier for hackers to hoover up sensitive information like the owner’s passwords. It was later revealed that this flaw wasn’t exclusive to Intel’s chips: Indeed, it reportedly affects nearly all microprocessors in circulation, according to the New York Times.

Here’s a succinct explanation of the problems that we published  earlier this week:

4. We’re dealing with two serious threats. The first is isolated to #IntelChips, has been dubbed Meltdown, and affects virtually all Intel microprocessors. The patch, called KAISER, will slow performance speeds of processors by as much as 30 percent.

5. The second issue is a fundamental flaw in processor design approach, dubbed Spectre, which is more difficult to exploit, but affects virtually ALL PROCESSORS ON THE MARKET (Note here: Intel stock went down today but Spectre affects AMD and ARM too), and has NO FIX.

Users may have been wary after reading last month about Apple admitting what was long suspected by many loyal customers: That the company intentionally engineers software updates to slow down older products, thereby hastening the cycle of planned obsolescence that has helped establish Apple as the world’s most valuable company.

But as it turns out, the software update was designed to try and plug some of the security holes resulting from Intel’s Meltdown flaw.

Specifically, Apple issued updates for the iOS 11.2, macOS 10.13.2 and tvOS 11.2 systems to protect against Meltdown, which the company believes “has the most potential to be exploited.”

According to Bloomberg, despite concern that fixes may slow down devices, Apple said its update to address the Meltdown issue haven’t dented performance. The company will release an update to its Safari web browser in coming days to defend against the Spectre flaw described above.

As noted, while Macs and iOS devices are vulnerable to Spectre attacks through code that can run in web browsers,  Apple said it would issue a patch to its Safari web browser for those devices “in the coming days.” However, Apple said these steps could slow the speed of the browser by less than 2.5%.

The updates affected all iPads, iPhones, iPod touches, Mac desktops and laptops, and the Apple TV set-top-box. The Apple Watch, which runs a derivative of the iPhone’s operating system is not affected, according to the company.

Browser makers Google, Microsoft Corp and Mozilla Corp’s Firefox all told Reuters that the patches they currently have in place do not protect iOS users. With Safari and virtually all other popular browsers not patched, hundreds of millions of iPhone and iPad users may have no secure means of browsing the web until Apple issues its patch.

 

Amazing: Mozilla confirms that the leak attack can be exploited from JavaScript. Update your browsers too. https://t.co/segMcZvBEs

— Miguel de Icaza (@migueldeicaza) January 4, 2018

 

Still, some customers were angry at tight-lipped Apple PR’s reticence on the issue following the revelations about the chip flaws earlier this week.

Ben Johnson, co-founder and chief strategist for cyber security firm Carbon Black, said the delay in updating customers about whether Apple’s devices are at risk could affect Apple’s drive to get more business customers to adopt its hardware.

“Something this severe gets the attention of all the employees and executives at a company, and when they go asking the IT and security people about it and security doesn’t have an answer for iPhones and iPads, it just doesn’t give a whole lot of confidence,” Johnson said.

Finally, Apple stressed that there were no known instances of hackers taking advantage of the flaw to date.  For Apple’s sake this better remain the case or else sellside analysts may just have to lower their iPhone sales forecasts for the foreseeable future.

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Groundhog day continues as global equity markets begin 2018 with another day of record highs and with their best week in more than a year, continuing last year’s rally that has seen volatility plunge and risk appetite surge.

The new year’s ramp to new record highs in stock markets around the world continued for a fourth day on Friday when U.S. equity index futures, European and Asian shares all rose, as did the dollar while oil dropped ahead of the US payrolls report. MSCI’s gauge of world stocks was up 0.15%, above 524 points and at a fresh record high.

European markets opened firmer after Asian shares approached record levels. The pan-European STOXX 600 index was up 0.5%, holding at a two-month high, and the first trading week of the new year looks set to be the best for Euro zone stocks since May, as shares shrug off a stronger single currency that could dampen export earnings. Automakers and healthcare stocks outperformed.

Europe’s surge followed more upside in Asia, where stock indexes in Japan, South Korea and China all rose after U.S. shares surged to fresh records Thursday. Australia’s ASX 200 (+0.7%) continued to make fresh 10yr highs with the index finding support from financial and mining stocks. Nikkei 225 (+0.9%) had its best two day gain since November and probed 26yr highs amid the rise in banking stocks, while Chinese markets also posted gains (Shanghai Comp +0.2%, Hang Seng Index +0.3%). Emerging-market equities reached the highest since 2011.

European bonds were mixed and the euro slipped as data showed inflation in the region slowed. Euro-area inflation slowed to 1.4 percent last month from November’s 1.5 percent, and the underlying rate unexpectedly failed to accelerate, instead holding at 0.9%. As Bloomberg notes, the data highlight the challenge the ECB faces in judging when to unwind its crisis-era stimulus measures, even as some Governing Council members warn of the risks of postponing the decision for too long.

“It could be something of a roller-coaster ride for headline inflation because of oil prices, but what remains crucial is core,” Nick Kounis, head of financial markets research at ABN Amro in Amsterdam, said before the report. “If we’re going to see flattish core inflation prints – and if we see flattish wage prints – then that would make the ECB cautious.”

Today, traders will focus on the U.S. jobs data – and especially wage growth – after minutes released this week from the latest Fed policy meeting indicated most officials favored raising interest rates gradually. The euro stayed lower after data showed annual inflation in the currency bloc slowed in December.

Strategists at Credit Agricole, including Valentin Marinov, said while there was an “upside risk” to the U.S. nonfarm payrolls figures, it would be the average hourly earnings numbers that “should prove to be the most important metric.” “We suspect the dollar will struggle to get much support from a solid headline NFP print in the absence of an acceleration in wage growth,” they wrote in a client note.

The Bloomberg Dollar Spot Index extended gains after trading near three month lows, as investors look to U.S. employment data, with Street whisper numbers pointing to larger job gains compared with the economist consensus forecast of +190K. The EURUSD hovered near day lows after core euroarea inflation missed estimates. Treasury futures drift lower to push cash yields higher cross the curve; 10-year U.S.-German yield gap widens, partly retracing end-2017 compression.

Asia’s emerging-market currencies advanced this week amid continuing weakness in the dollar and as optimism over global growth spurred demand for developing-nation assets. The MSCI EM Asia Index had its best week since July, while sovereign bonds fell. Asia has “promising growth momentum and resilient external positions,” said Frances Cheung, head of Asia Macro strategy at Westpac Banking Corp. in Singapore. The yen dropped for a third day as investors waited for U.S. jobs data. The Australian dollar declined after November trade figures showed an unexpected deficit, while the New Zealand dollar was steady near a two-month high

Oil prices slipped from highs last seen in 2015 after soaring U.S. production undermined a 10-percent rally from lows hit in December driven by tightening supply and political tensions in Iran, and as oil neared a key resistance level.

 

 

Gold prices dipped from the previous session’s 3-1/2 month high, ahead of the U.S. non-farm payroll data, but remained on track for their fourth straight weekly gain.

The 10-year U.S. Treasuries yield stood at 2.460% below its seven-month peak of 2.504% touched on Dec. 21. Germany’s 10-year yield was unchanged at 0.43%, Britain’s 10-year yield fell one basis point to 1.227% while Japan’s 10-year yield rose 1 bp to 0.063%, the highest in more than two months.

Signs of the investor appetite for risk more broadly were evident in Greece, where the euro zone member’s 10-year borrowing costs hit their lowest in 12 years on Friday. The country, recently on the verge of defaulting on its debts, has benefited from expectations of a clean exit from its bailout this year and a revival in the economy.

“Greece’s fundamentals have been on the mend and investors have been looking at the yield pick-up they get from investing in that debt,” said DZ Bank strategist Christian Lenk. “Also, a rising tide lifts all boats – with the euro zone economy doing so well, it’s a very ‘risk on’ environment and that is benefiting Greece.”

Expected data include unemployment rate, non-farm payrolls, factory orders and durable-goods orders. Constellation Brands is among companies reporting earnings.

Market Snapshot

• S&P 500 futures up 0.3% to 2,730.75
• STOXX Europe 600 up 0.5% to 395.67
• MSCI Asia Pacific up 0.6% to 179.04
• MSCI Asia Pacific ex Japan up 0.6% to 586.16
• Nikkei up 0.9% to 23,714.53
• Topix up 0.9% to 1,880.34
• Hang Seng Index up 0.3% to 30,814.64
• Shanghai Composite up 0.2% to 3,391.75
• Sensex up 0.5% to 34,141.10
• Australia S&P/ASX 200 up 0.7% to 6,122.35
• Kospi up 1.3% to 2,497.52
• German 10Y yield fell 0.5 bps to 0.429%
• Euro down 0.2% to $1.2047
• Italian 10Y yield fell 5.2 bps to 1.746%
• Spanish 10Y yield fell 1.4 bps to 1.529%
• Brent futures down 0.9% to $67.48/bbl
• Gold spot down 0.4% to $1,317.36
• U.S. Dollar Index up 0.2% to 92.07

Top Overnight News

• Euro-area inflation slowed to 1.4% last month from November’s 1.5%, and the underlying rate unexpectedly failed to accelerate, easing pressure on the ECB to unwind stimulus
• President Donald Trump fired off a tweet saying that a book alleging dysfunction, backstabbing and chaos in his administration was “full of lies” and that he had given the author, Michael Wolff, “zero access” to the White House; Wolff’s publishers said they would bring forward publication of “Fire and Fury” to Friday
• China capped how much bond traders at brokerages and fund companies can earn from a year’s work to 1 million yuan ($154,000), people with knowledge of the matter said, as regulators step up a campaign to control risk-taking across financial markets

Asian equities closed the week out on a high, following yet another day of gains in the US, whereby the DJIA broke 25k for the first time. Strong data out of the US boosted sentiment with the ADP figure beating analysts’ estimates, hinting at a firm number in today’s US NFP report. ASX 200 (+0.7%) continued to make fresh 10yr highs with the index finding support from financial and mining stocks. Nikkei 225 (+0.9%) had its best two day gain since November and probed 26yr highs amid the rise in banking stocks, while Chinese markets also posted gains (Shanghai Comp +0.2%, Hang Seng Index +0.3%)

Top Asian News

• Bubbly H.K. Housing Is Unsustainable, $2.6 Billion Fund Says
• HNA Said to Walk Away From Late-Stage Value Partners Talks
• Axiata Surges as Carrier Said to Mull $500 Million Tower IPO
• China Is Said to Keep 6.5% Economic Growth Target Amid Debt Push
• China Data Mismatch Could Imperil Aluminum’s Stand-Out Surge

European equities (Eurostoxx 50 +0.5%) are also trading higher across the board in the wake of another upbeat Asia-Pac session which saw the Nikkei 225 print its best two-day gain since November. In terms of sector performance, auto names are performing well with Volkswagen (+2.7%), Peugeot (+2.7%) and Fiat Chrysler (+3.2%) all top of the DAX, CAC 40 and FTSE MIB respectively following a slew of broker upgrades at JP Morgan with utility names, Centrica (+1.9%) and United Utilities (+1.4%) at the top of the FSTE 100 following broker upgrades at Credit Suisse. Elsewhere, Dialog Semiconductor (-3.7%) shares are lagging their peers in the wake of reports that Apple products have been hit by chip flaws. 

Top European News

• U.K. Car Sales Drop Most Since Recession on Brexit, Diesel Fears
• Euro-Area Inflation Slows, Undermining Calls for ECB to Curb QE
• Ryanair Pulls Further Ahead of Pack Even After Pilot Debacle
• Deutsche Bank CIB Unit Sought $1.5 Billion Bonus Pool, WiWo Says
• Dole Food Takeover Approach From Belgium’s Greenyard Fails
• President Macron Wins French Pollsters’ First Ever ‘Beer Test’

European fixed income has seen trading volumes remain paltry even by normal pre-US jobs data standards (MiFiD 2 and tighter Chinese bond market rules may help to explain low turnover), but there have been some decent moves, disconnects and distortions. Gilts have confounded the weaker or indifferent impulses seen ahead of the Liffe open to push ahead from the off (aside from a brief 2 tick stutter below parity), and printed at 124.88 for a 23 tick gain on what appears to be at least corrective due to their earlier closing time. Nevertheless, Bunds have caught a bid to register a fresh Eurex peak as well, at 161.74 (+15 ticks vs -9 ticks at the other extreme), after holding in at the 50% retracement support level. 161.82-86 forms the next tech resistance area, while bears will still be eyeing 161.36 ahead of Thursday’s 161.26 low and the 161.18 ultimate downside target that has survived several times. US Treasuries marginally weaker pre-NFP, aside from flat 2 year notes as the curve steadies a tad following the most recent bout of flattening.

In FX markets, AUD/USD one of the big movers overnight, with the pair recoiling from 0.7870 to a 0.7835 low on the back of Aussie trade data showing a deficit vs expected surplus as exports completely stagnated. Elsewhere, broad risk appetite, as Wall Street sets more all-time records and global stocks continue to rally, has undermined the traditional safe-haven currencies, and with the JPY also losing ground amidst decent cross-related flows (ie EUR/JPY bids said to be targeting 140.00 from around 136.50 currently). NZD/CAD/GBP/EUR are all holding up relatively well vs the USD as the DXY attempts to stay within touching distance of the 92.000 handle ahead of today’s US jobs report.

In commodities, both WTI and Brent crude futures are seen lower as markets take a breather from the recent rally which had lifted prices to multi-year highs with some profit-taking potentially entering the market. In terms of energy newsflow, things remain on the light side but markets remain sensitive to events in Iran and any potential backlash from the US via sanctions. In metals markets, gold prices have been seen lower overnight amid touted profit-taking, albeit prices remain in close proximity to recent highs. Elsewhere, Chinese steel futures were seen lower overnight as weather concerns continue to sway prices whilst Zinc (highest since mid-2007) remains supported in London amid supply fears.

Looking at the day ahead, the December CPI for the Eurozone (1.4% yoy expected), France (1.3% yoy expected) and Italy are due. Then the Eurozone’s November PPI, Germany’s retail sales and France’s consumer confidence data are also due. In the US, there is the December nonfarm payrolls, ISM non-mfg composite, unemployment rate and average hourly earnings data. Elsewhere, the November trade balance, factory orders as well as the final readings for the durable and capital goods orders are also due. Onto other events, the Fed’s Harker and Mester are both scheduled to speak.

US Event Calendar

• 8:30am: Change in Nonfarm Payrolls, est. 190,000, prior 228,000
  • Unemployment Rate, est. 4.1%, prior 4.1%; Underemployment Rate, prior 8.0%
  • Average Hourly Earnings MoM, est. 0.3%, prior 0.2%; YoY, est. 2.5%, prior 2.5%
  • Average Weekly Hours All Employees, est. 34.5, prior 34.5
• 8:30am: Trade Balance, est. $49.9b deficit, prior $48.7b deficit
• 10am: ISM Non-Manf. Composite, est. 57.6, prior 57.4
• 10am: Factory Orders, est. 1.1%, prior -0.1%; Ex Trans, prior 0.8%
• 10am: Durable Goods Orders, prior 1.3%; Durables Ex Transportation, prior -0.1%
  • Cap Goods Orders Nondef Ex Air, prior -0.1%;

DB’s Jim Reid concludes the overnight wrap

Flying at the moment are risk assets after a strong day yesterday. More on this later but it’s an important day for data today. Hot on the heels of a bumper US manufacturing ISM on Tuesday (59.7 vs. 58.2 expected), a beat on the services PMI (53.7 vs 52.5 expected) and ADP (250k vs 190k expected) yesterday, today sees the all-important US employment report. To be honest payrolls (DB forecast upped from 185k to 220k last night, consensus 190k but probably higher now after ADP) is a sideshow as Average Hourly Earnings will be the key part of the release. Both DB and consensus are expecting 0.3% MoM and 2.5% YoY. Earnings are key at the moment as this global recovery/expansion has everything apart from wage growth/inflation which in turn is keeping the Fed rate hikes gradual and volatility low. DB has put out a fair amount of research over the last few weeks detailing how US wage growth is picking up so it’ll be interesting to see whether this can find its way into the main headline data soon!

Elsewhere in the report the unemployment rate (4.1% vs. 4.1%) should remain stable at its lowest level since 2000. Our economists expect this stability to be temporary as they expect the unemployment rate to break through 4% in H1 2018. This level could prove important since they recently found using state-level data  that wage growth picks up significantly as the unemployment rate falls below 4%. So they would argue wage growth is coming even if today’s number is flat.

Given the recent strength in US data, it’s interesting that the big call out of DB yesterday was to target 1.30 on EUR/USD in 2018. George Saravelos suggests that although the Fed is hiking rates, US rate differentials are widening and the dollar has become a G10 high-yielder, the dollar is not responding. He thinks current dynamics look very similar to the 2004-06 Fed cycle. Back then the dollar weakened even as the dollar became one of the highest-yielding currencies in the world. Weaker flows into the US mattered more than rising rates. Our FX team believe flows will matter more in 2018 too, and these are decidedly EUR/USD positive.

The buzz phrase yesterday was speculation about whether we were in a ‘melt up’ for risk assets. US bourses reached fresh highs for the third consecutive day with the S&P 500 up 0.40% and the Dow cracking through 25,000. All Euro equities were higher with Stoxx 600 up 0.89% to the highest in 8-weeks and the Nikkei jumping 3.26% near its 26 year high after trading resumed for 2018. Within the S&P, all sectors excluding real estate and utilities were in the green while the Stoxx’s gains were led by financials and energy stocks. Elsewhere, credit spreads continue to grind tighter (c1bp lower), with US CDX IG now at 46.1bp and Europe Main at 43.9bp.

This morning in Asia, markets are trading higher as we type. The Kospi is up 1.08% and reversing its underperformance from yesterday, while Nikkei and Hang Seng are up 0.82% and 0.05% respectively. Elsewhere, North Korea has accepted South Korea’s proposal for talks on 9 January and Japan’s December Nikkei composite PMI was in line at 52.2.

Staying in Asia, our Japanese team published their macro and equity outlook for 2018. They expect a slowing Japanese economy and forecast 0.9% real GDP growth in 2018 (vs. FY17 1.9%; FY19 0.8%). They note durable goods spending, capital investment and housing investment are at the end of their cycles or are in the midst of transitioning to a decline. On rates, they believe the expected US rate hikes in 2018 should not have much impact on yen interest rates as long as the BOJ continues its yield curve control (YCC) policy – which should continue on the assumption that core CPI will not consistently exceed 1%. Further, they expect Haruhiko Kuroda to be reappointed as BOJ governor, in part due to the absence of a strong alternative candidate. Finally, they maintain their positive stance on Japanese equities, mainly driven by their expectations that aggregate Japanese earnings will remain strong, supported by slowing but robust global growth and a stable if not weaker yen. For more details, refer to the link.

Now recapping other market performance from yesterday. In government bonds, core 10y yields were mixed but little changed. Treasuries initially weakened after the strong ADP print, but pared losses to close +0.5bp to 2.453%, while Gilts rose 2bp and Bunds fell 0.6bp. Notably, peripherals outperformed with yields down 5-7bp, in part supported by Spain’s first government bond sale for the year, selling €4.6bn of bonds which was towards the top end of its targeted range.

Turning to currencies, the US dollar index weakened 0.32%, while Sterling and Euro gained 0.26% and 0.44% respectively. In commodities, WTI oil rose 0.42% and consolidated near its three year high after the EIA report confirmed a fall in US crude inventories. Elsewhere, precious metals strengthened c0.6% (Gold +0.75%; Silver +0.54%) and other base metals also advanced modestly (Copper flat; Zinc +0.62%; Aluminium +0.43%).

Away from markets and onto Brexit, France’s President Macron has called for a unified EU approach and “common mandate” amongst EU members in the next stage of Brexit talks. He noted that each country can have their own interests, but if we acted like the prisoner’s dilemma game theory, then its “probable that collectively we’ll create a situation that is unfavourable to the EU and thus to each one of us”. Elsewhere, the Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs Ted McKinney noted if the UK has its own rules on farming and food standards rather than keeping the existing EU rules, then “there is much greater opportunity for trade” between the two countries.

In the US, the Fed’s Bullard reiterated his views that a tightening labour market is unlikely to materially lift inflation. He also noted that he “would not want the Fed to push so hard that we get to an inverted yield curve situation” and that the yield curve issue “is something that needs to be debated out sooner rather than later”. On Bitcoin, he noted it is not something “that monetary policy makers have to worry very much about at this point”. Elsewhere, the SEC Chairman Jay Clayton noted that “…we again caution you that, if you lose money (on cryptocurrencies), there is a substantial risk that our efforts will not result in a recovery of your investment.”

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the final reading for the December composite PMI was above expectations at 54.1 (vs. 53 previous). Elsewhere, the weekly initial jobless claims were higher than expectations (250k vs. 240k) but continuing claims (1,914k vs. 1,928k expected) were lower.

In Europe, the final readings for the Eurozone’s services and composite PMI were both revised 0.1ppt higher to 56.6 and 58.1 respectively – the highest since the GFC. On a country basis, Germany’s services PMI was unrevised at 55.8 but the composite PMI was 0.2ppt higher at 58.9. In France, its composite PMI was revised 0.4ppt lower to 59.6. Finally, the flash composite PMI for Italy was above market (56.5 vs. 56 expected) while the UK was softer (54.9 vs. 55 expected).

In the UK, the December Nationwide House price index was above market at 2.6% yoy (vs. 2.0% expected), while London posted its first full year decline since 2009 (albeit -0.5% yoy). Elsewhere, the November mortgage approvals (65.1k vs. 64.1k expected) and net lending on dwellings both beat expectations (£3.5bln vs. £3.4bln).

Looking at the day ahead, the December CPI for the Eurozone (1.4% yoy expected), France (1.3% yoy expected) and Italy are due. Then the Eurozone’s November PPI, Germany’s retail sales and France’s consumer confidence data are also due. In the US, there is the December nonfarm payrolls, ISM non-mfg composite, unemployment rate and average hourly earnings data. Elsewhere, the November trade balance, factory orders as well as the final readings for the durable and capital goods orders are also due. Onto other events, the Fed’s Harker and Mester are both scheduled to speak.

 

 

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One week after Uber lost the title of the world’s most valuable startup to its Chinese competitor Didi Chuxing, when company shareholders sold roughly $10 billion in stock to Softbank at a 30% discount to its most recent valuation of $68 billion, accepting a value of $48 billion as fair, overnight the WSJ reported that Uber’s former CEO and co-founder Travis Kalanick, who was ousted as chief executive in June, was selling nearly a third of his 10% stake for about $1.4 billion.

Kalanick’s sale is part of the deal that was struck by a consortium of investors led by SoftBank which is taking a 17.5% stake in Uber, mostly by purchasing shares from early investors and employees. SoftBank last week secured agreements from shareholders who were willing to sell, and the deal will close early this year, Uber said.

According to the WSJ, Kalanick had originally offered to sell as much as half of his total shares, but because there was a limit on how much SoftBank would buy, he agreed sell just 29%. Other investors also did not get to unload as many shares as they had hoped because of such widespread interest to sell. And, as Reuters summarizes:

The former CEO owns 10 percent of the company, which means his sale will unload 2.9 percent of Uber shares and earn him about $1.4 billion, the source added.

The bad news for Uber investors is that this sale by its former CEO at a sub-$50BN valuation limits any potential upside in the company for a long time, if not ever. The good news for Kalanick, is that it makes the Uber co-founder a billionaire for the first time, not just on paper.

Kalanick had never before sold shares of the company he ran for almost a decade.

The SoftBank deal offers investors and employees what could be their last chance to sell shares in a company-approved transaction before Uber’s long awaited initial public offering, planned for 2019.

Finally, the sale is also a victory for new CEO Dara Khosrowshahi, who helped broker the deal in hopes of cashing out some of the company’s legacy investors and who will benefit from a deep-pocketed investor like SoftBank.

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Via Oriental Review,

Today’s Ukraine is painfully reminiscent of Germany in the 1920s: poor governance on the heels of a lost war, which – added to the sense of betrayed hopes and the sharp decline in average incomes coupled with rising prices – is all driving a critical mass of the Ukrainian population toward an overwhelming feeling of desperation. A demand from the public for a “strong hand” – a new, authoritarian ruler – is rapidly coalescing, due to their dissatisfaction with President Poroshenko and all the other jokers they’ve been dealt from that shabby deck of political cards.

And a man like that already exists in this destitute and disintegrating country.

Andriy Biletsky, the commander of the Azov Battalion who is known to his comrades-in-arms as the “White Führer,” is making an ever-bigger name for himself in the Ukrainian parliament.

He makes no secret of his views – in his 2014 program declaration “Ukrainian racial social nationalism is the core of ideology of ‘Patriot of Ukraine’ organization” he expressed himself quite bluntly: “Our nation’s historical mission at this critical juncture is to lead the global White Race in its final crusade for its survival. A crusade against the Semite-led Untermenschen.”

He was drawn to Nazi ideology while still a university student. In the early 2000s, while studying in the history department of the National University of Kharkov, he wrote a paper on the activities of the collaborationist Ukrainian Insurgent Army during World War II. Later, as this student of history and amateur boxer put it, “preference was given to the creation, rather than the study of history, and to fighting in the streets instead of in boxing rings.” In the 1990’s and 2000’s, as he moved toward the formation of his own nationalist organizations, such as Patriot of Ukraine (founded jointly with the current chairman of the Ukrainian parliament, Andriy Parubiy) and later the Azov Battalion, Biletsky managed to have a hand in almost every far-right group in Ukraine: the Stepan Bandera Tryzub, the Social-National Party of Ukraine, and Svoboda (Freedom) party. Now he also leads the Social-National Assembly, an umbrella group for a number of racist and neo-Nazi Ukrainian organizations. He himself has claimed to have had first-hand involvement in what are known as direct actions, i.e., military and terrorist operations.

In 1999, together with a group of nationalist “sports fans” from Kharkiv, Biletsky tried to travel to Kosovo to help fight Muslims. In 2001 he participated in the riots in Kiev during the “Ukraine without Kuchma” protest campaign. In 2008 he was involved in clashes with the police during a march to honor the Ukrainian Insurgent Army. Between 2008 and 2009 activists from the Patriot of Ukraine organization that was under his direction repeatedly attacked individuals of non-Slavic appearance.

Wounded anti-fascist journalist Sergey Kolesnik, a snapshot of Ukrainian TV report about the incident.

In 2011, Biletsky, along with two other members of Patriot of Ukraine, was arrested and charged with armed assault: on Aug. 23 of that year there was an altercation in that organization’s office with journalist Sergei Kolesnik who was doing a story on their activities. As a result, the reporter ended up in the emergency room with a head injury and lacerations to his chest. The organization claimed the charges had been trumped up and that the detained activists had been the victims of a political witch hunt. They were released in February 2014 after the victory of the Revolution of Dignity, when the Verkhovna Rada adopted resolution No. 4202, On the Release of Political Prisoners. There were 23 people on the list of detainees to be freed, primarily members of Patriot of Ukraine. The author of the bill was the head of the Radical Party, Deputy Oleh Lyashko, who later worked closely with the Azov Battalion.

Immediately after his release, Biletsky was put in charge of the “special operations” of the neo-Nazi organization Right Sector and proceeded with reprisals against “undesirables” – the Ukrainians who objected to the illegal seizure of power in their country. In March 2014 he was responsible for an explosion that blew up a monument and then some attacks on local residents in Kharkov, resulting in the deaths of two people and serious injuries to a law-enforcement officer. In May 2014 he and some of his underlings were involved in the execution of policemen in Mariupol who had refused to use their weapons against civilians.

At that time Biletsky created the Azoz Battalion, an armed, retaliatory unit of activists from racist and neo-Nazi organizations. Its ideology is based on neo-Nazism, aggressive militarism, and flagrant racism. The group employs the Nazi Wolfsangel and Black Sun symbols (“die Schwarze Sonne” – a type of swastika with multiple rays).

 

In the article “Language and Race: The Primacy of the Question,” found on pg. 28 of his book The Words of the White Führer (in Ukrainian), Biletsky insists on requirements for the racial purity of the “Ukrainian nation” and on the impropriety of “accepting a person of a different bloodline, mentality, or culture into one’s family and nation and allowing one’s own genes to mix with those of a different, inferior breed of people.” “Ukrainian social-nationalism considers the Ukrainian nation to be a society based on a common bloodline and race.” “Race is paramount for the genesis of a nation,” the leader of the organization asserts. “People are naturally born with different abilities and opportunities, and therefore a person’s happiness comes from finding his place in the national hierarchy and in conscientiously carrying out the task that life has assigned him.”

“Ukraine, you are the light of Europe! Our nation has sufficient strength to stand up to pressure from outsiders, to purify our land, and to fan the flames of purification throughout Europe!” (Biletsky, The Words of the White Führer, pg. 23)

Shortly before the 2014 Verkhovna Rada (parliamentary) elections, when asked whether his views had changed, Biletsky replied: “We remain true to ourselves. Azov’s very soul consists of the right-wing ideology it received as its legacy from Patriot of Ukraine.”

Refusing to have his name listed on the ticket of the People’s Front party (led by Arseniy “Yats” Yatsenyuk) during the 2014 parliamentary elections, Biletsky strengthened his position as the leader of Ukraine’s Nazis and won a seat in parliament as an independent candidate from one of Kiev’s single-seat districts. In the Verkhovna Rada he is the deputy head of the Committee on National Security and Defense and is ironically a member of a group on inter-parliamentary relations with Georgia, Great Britain, Israel, the US, Poland, and Lithuania.

His alliance with the new government in Kiev has made it possible for the White Führer to “legitimize” his militants and get the state to pay for their upkeep. The Azov Battalion was incorporated into the National Guard of Ukraine, which is under the control of the minister of internal affairs and former governor of the Kharkov region, Arsen Avakov. Back in November 2014, Avakov posted the following on his Facebook page: “The work has begun to bring this regiment up to the combat standards of the National Guard brigades. That also means in terms of weapons and technology. Currently dozens of kids from the Azov Battalion are already being trained at an artillery school, getting the hang of new armored vehicles on the practice ranges, and learning how to coordinate operations with the tank squadron assigned to their regiment.”

Andriy Biletsky (C) and Arsen Avakov (R in front) announcing incorporation of Azov battalion into the National Guard of Ukraine, Oct 2014

That was approximately the same time that Azov introduced its youth squad – the Biletsky Youth, also sometimes called Youth of Great Ukraine. It draws teenagers aged 14-18. Members are required to develop themselves physically and mentally, to study the foundations of social-nationalism, and to recognize Andriy Biletsky as their  Führer…

Despite the fact that in June 2015 the US House of Representatives blocked the transfer of shoulder-fired anti-aircraft missiles, known as MANPADS, to Ukraine for fear that they might fall into the hands of neo-Nazis from Azov, some European politicians certainly don’t seem to consider him a political “untouchable” – soon after the US bill was approved, Czech MEP Jaromír Štětina invited Biletskiy to visit the European Parliament and share his views (the invitation apparently wasn’t accepted).

In October 2016 Biletsky created his own political party, the National Corps, and announced his readiness to assume responsibility for what was happening in the country. On Feb. 22, 2017, this party, along with Svoboda and Right Sector, held a March of National Dignity in Kiev, which resulted in an ultimatum being issued to the government, as part of which, the nationalists announced the coordination of efforts “to resist the country’s surrender to armed invaders from the East and financial bloodsuckers from the West.” On March 16, these forces, in addition to the Congress of Ukrainian Nationalists, the Organization of Ukrainian Nationalists, and the neo-Nazi group C14, signed their National Manifesto. Once you take away the clauses of social-populist demagoguery, that statement mostly boils down to the following:

– looking not to the West nor to the East, but to the formation of a kind of “new European alliance – a Baltic-Black Sea Union

– unleashing an economic, propaganda, and guerrilla war against Russian Crimea

– returning Ukraine to the status of a nuclear power “due to the violation of the Budapest Memorandum”

– nationalizing mineral resources and industry, a total ban on the free sale of agricultural land, and a prohibition on pulling capital out of the country to stash offshore

In this manner, far-right forces in Ukraine have now consolidated and are ready to take action. For the past three years, Biletsky has carefully avoided making any racist statements and has been busy trying to burnish a positive image of himself for his Ukrainian and international audiences. He and his patrons expect the deepening crisis of power in Ukraine and the imminent fall of the Poroshenko regime to provide them with a unique window of opportunity for seizing power. His maniacal hatred of Russia and desire to escalate the armed conflict in the eastern part of the country will likely win him the “benevolent neutrality” of the major Western powers, just as Hitler enjoyed on the eve of his attack on the USSR. And to any impartial observer it is clear that “Weimar Republics” always eventually metamorphose into Reichs.

“The new Ukraine is not a republic or a dictatorship, but a republic AND a dictatorship. Not socialism and nationalism, but national socialism. Not an empire and not democracy, but an empire AND democracy.” (Biletsky, The Words of the White Führer, pg. 20)

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Preserving Israel’s uniquely Jewish character is one of Prime Minister Benjamin Netanyahu’s top priorities. Now, in addition to marginalizing Arab-Israeli citizens and their representatives in the country’s parliament, Netanyahu is staging a crackdown on illegal immigration – offering refugees from Sudan, Eritrea and other African countries who illegally entered Israel via Egypt a relatively generous sum to relocate back to their home countries, or to move to a designated third-party country that has agreed to take in the migrants.

The government believes there are 38,000 such immigrants in the country. And while many of the migrants have applied for refugee status – claiming to have fled war and persecution – instead of processing their applications, the ruling party instead chooses to classify them as economic migrants with relatively few rights.

Rwanda and Uganda are two countries that have offered to accept the Israeli migrants.

 

Netanyahu’s offer of $3,500 and a plane ticket is good through March, at which point the government will begin a crackdown on illegal migrant communities that could result in large numbers of migrants being deported or imprisoned, according to Reuters.

Just like in the US and parts of Europe, many of the migrants live in slums and work in low-paying jobs. They’re vulnerable to crime because they lack access to the country’s banking system.

The plan launched this week offers African migrants a $3,500 payment from the Israeli government and a free air ticket to return home or go to “third countries”, which rights groups identified as Rwanda and Uganda.

“We have expelled about 20,000 and now the mission is to get the rest out,” Netanyahu said.

An immigration official, speaking on condition of anonymity, said there are some 38,000 migrants living illegally in Israel, and some 1,420 are being held in two detention centres. “Beyond the end of March, those who leave voluntarily will receive a significantly smaller payment that will shrink even more with time, and enforcement measures will begin,” the official said, referring to incarceration.

Some have lived for years in Israel and work in low-paying jobs that many Israelis shun. Israel has granted asylum to fewer than one percent of those who have applied and has a years-long backlog of applicants.

Remarks made by members of Netanyahu’s government echo some of the heated rhetoric that Trump administration officials use to describe immigrants and immigration policy.

Rights groups have accused Israel of being slow to process African migrants’ asylum requests as a matter of policy and denying legitimate claims to the status.

Netanyahu has called the migrants’ presence a threat to Israel’s social fabric and Jewish character, and one government minister has referred to them as “a cancer”.

Some migrants who have spent most of their lives in Israel say they’d rather go to prison for a spell than be kicked out of the country permanently.

Teklit Michael, a 29-asylum seeker from Eritrea living in Tel Aviv, said in response to the Israeli plan that paying money to other governments to take in Africans was akin to “human trafficking and smuggling”.

“We don’t know what is waiting for us (in Rwanda and Uganda),” he told Reuters  by telephone. “They prefer now to stay in prison (in Israel) instead.”

Like Trump, Netanyahu has said removing the immigrants will reduce crime and make the country’s Jewish more comfortable.

The large presence of African migrants in Tel Aviv’s poorer neighborhoods, where Netanyahu said “veteran residents” – a reference to Israelis – no longer feel safe.

The Trump administration has drastically reduced the number of refugees being admitted to the US; last month, Trump announced he would end immigration protections for thousands of Haitian refugees who sought succor in the US following a devastating 2010 earthquake.

 

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Authored by Kent Moor via OilPrice.com,

Germany’s drive to use renewable sources of energy seems to be bearing fruit. Beginning last weekend, prices for electricity in the country declined below zero.

 

That means consumers are being paid to use the power, rather than the other way around.

This isn’t even the first time this has happened. According to one of Europe’s largest electricity trading exchanges (the EPEX Spot), it has happened more than 100 times in 2017.

All of this would seem to bode well for German households, long regarded as operating under the highest energy prices on the continent.

Well, not quite.

But someone else is getting paid.

And the whole matter has crucial implications for where the energy industry is going next…

Given the heavy amount of taxes and fees charged for power, the wholesale cost factors in only about 20 percent of the real price charged to the average residence.

That means that, while the period of negative costs helps, prices are still going up for German households.

Meanwhile, bigger wholesale users – industry, factories, and other primary end users – do see a nice pop. According to EPEX Spot figures, for example on December 24, such major consumers were paid about €50 ($59.50 at current exchange rates) per megawatt-hour (MWh).

The price decline results from a combination of low demand, warmer than usual temperatures, and the prevalence of ample winds that provided an abundance of wind power generation.

All of this results in excess supply that needs to be moved along the grid.

Due to the lack of efficient or effective battery and storage systems, electricity that is produced must be used.

It has become a traditional tradeoff between peak and off-peak hour generation or usage. The recently emerging German largess in solar and wind power has just accentuated the situation.

Meanwhile, variations on the demand side tend to contribute to supply excesses during times of low usage, such as weekends, and holiday periods. Both of those, of course, hit this past Sunday.

With the price tag for Germany now well over €100 billion, it would appear that the move to renewable, cleaner, energy has been successful.

Well, not so fast…

What the Future of Energy Will Look Like

Negative prices notwithstanding, the move to increase the contribution made by solar and wind has created its own uncertainties. Both sources need backup energy sources for when sunlight and wind are not present.

And then there is the opposite extreme. Wind on average provides less than 14 percent of the daily power on the German grid.

But on very windy days it can easily provide many times that.

Unfortunately, traditional sources such as coal-fueled power plants and the nuclear reactors that are being phased out nationwide cannot be turned down rapidly enough when renewables dump additional power on the system.

The result is either negative prices or lack of immediate access to power during those spells in which the combination of sources don’t meet expectations.

Other European countries – France, Belgium, Switzerland, the Netherlands, and even Great Britain – have also had their own experiences with negative pricing. France generates well over 70 percent of its power from nuclear, meaning the negative pricing phenomenon is hardly a result of only new renewable energy volume.

Nonetheless, German experiences have been more persistent, even when the country has been able to export excess power. The late December episode is the most recent.

But a similar bout in October resulted in payouts to consumers almost twice as high.

Experts are pointing toward the major revision both Germany and the wider European grid system must now undertake. Until this spasm of negative pricing, the older view of global power systems had been considered adequate.

Not any longer.

As one specialist noted this week, “we now have technology that cannot produce according to the demand, but is producing according to the weather.” This has become the main uncertain ingredient in the new age of rising renewable sourcing.

And one thing that’s becoming increasingly evident is that the new environment is providing a new stress on the wider power system.

This sets the stage for a range of possible changes in regulations and fee structures meant to encourage average households to tailor their energy use to periods of energy supply. That would seem to oblige some “carrot rather than stick” approaches.

Of course, that would mean benefits in lower costs moving directly down to the household level. That may take a bit more politics than just oddities in the energy grid.

Which means the push for renewables and energy storage will continue unabated in 2018.

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According to a new reinsurance report issued by the Swiss Re Institute, total economic losses from natural and man-made disasters have soared 63 percent in 2017 to an estimated $306 billion, up from $188 billion in 2016.

Globally, insurers lost $136 billion from natural and man-made disasters in 2017, up from $65 billion in 2016, the third highest on record. This is “well above the previous 10-year annual average, and the third highest on sigma records,” Swiss Re said in its report. Natural disasters accounted for $131 billion of 2017’s insured losses, and man-made disasters for the remaining $5 billion. The human loss totaled around 11,000 deaths, similar to 2016.

 

Martin Bertogg, Head of Catastrophe Perils at Swiss Re said, “in recent years, annual insurance losses from disaster events have exceeded USD 100 billion a few times. The insurance industry has demonstrated that it can cope very well with such high losses.”

“However, significant protection gaps remain and if the industry is able to extend its reach, many more people and businesses can become better equipped to withstand the fallout from disaster events,” he added.

According to Swiss Re, “extreme weather in the US in the second half of 2017” has been the primary driver for high insured losses:

Wildfires and thunderstorms in the US were also mentioned in the report:

Elsewhere, Swiss Re discussed extreme weather events of various forms around the world:

Worldwide losses (USD bln) for man-made and natural catastrophes have absolutely exploded since 1990, according to a Swiss Re.

While natural and man-made disasters wreaked havoc globally and in the United States for the 2017 time period. Will the S&P Insurers index break the neckline?

 

 

 

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Authored by Andrew Korybko via Oriental Review,

If Trump is willing to accept the enormous loss of American life — which are the only people that he cares about as the US President — then turning the Korean Peninsula into Asia’s nuclear panhandle would indeed “Make America Great Again” by permanently handicapping its Russian & Chinese geostrategic competitors as well as its Japanese & South Korean economic ones.

The war of words between North Korean leader Kim Jong Un and US President Donald J. Trump has suddenly taken a very foreboding turn, with both men now talking about “nuclear buttons” and openly hinting at the prospects of carrying out a preemptive first strike against the other.

North Korean Leader Kim Jong Un just stated that the “Nuclear Button is on his desk at all times.” Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!

— Donald J. Trump (@realDonaldTrump) January 3, 2018

The first thing to remember is that Trump is dead serious (pun intended) about his desire to “Make America Great Again”, and that he will stop at nothing to see his vision fulfilled in the future, including if he has to use nuclear weapons to make it happen.

Normative objections like arguing about how “terrible” and “evil” this is have absolutely no effect on Trump, who has come to be the literal embodiment of the “Mad Man Theory” and cares nothing about such concerns, ruthlessly viewing the world through a Neo-Realist prism where everything revolves around power.

If there’s any “emotional” point that would give Trump pause to think, then it’s about the lives of the nearly quarter-million Americans (including servicemen and their families) living in South Korea who could easily be killed in the opening days of a Korean Continuation War, and this is the only reason why Trump has yet to use nuclear weapons against North Korea.

Right now the President whose opponents label as a “heartless psychopath” is actually very concerned about the moral responsibility that he would have to forever shoulder in potentially sacrificing so many Americans, but if he ever surmounts his conscientious objections to this or is misled by the “deep state” into believing that North Korea is in the imminent process of launching its own preemptive strike (or is provoked by the military to already do so), the he might “make peace with himself” in the “comfort” that “only” 250,000 Americans had to die (notwithstanding the millions of Asians that he doesn’t care about) in order to “Make America Great Again”.

Brutally speaking, the only real consequence that the US would suffer from nuking North Korea is the death of its South Korean-based compatriots as “collateral damage”, and the possibility of a Chinese military response to America’s brazen bombing(s?) could be avoided if Washington provokes Pyongyang into striking first because of Beijing’s previous pledge not to intervene if its wayward “ally” is the one most directly “responsible” for reigniting hostilities.

Accepting that the US would quickly emerge as militarily victorious in this conflict, it’s now time to examine how the destructive consequences of nuking North Korea would actually “Make America Great Again” from Trump’s “Kraken”-like Neo-Realist perspective.

To begin with, almost all of North Korea’s territory could be rendered inhospitable depending on the scale and scope of the US’ nuclear arms use, thus turning it into the ultimate “buffer zone” and thereforr making the decades-long question of whether the (now-former) country would be occupied by Chinese or American-South Korean troops after a speculative continuation war moot.

Secondly, the atmospheric aftereffects of America’s nuclear weapons use are difficult to precisely predict and should be left to more competent experts to comment upon in detail, but it can confidently be presumed that this would affect South Korea, Japan, China, and Russia, up to and including making some of their territory also inhospitable.

Not only that, but Seoul and even Tokyo could be wiped out if Pyongyang is successful in nuking them in its final moments, and even if they’re not destroyed, then the resultant nuclear atmospheric damage to South Korea and Japan would devastate these once-strong Asian economies and reduce them to uncompetitive “Third World” states.

The same can also happen to a large chunk of China in its rustbelt “Manchurian” region of the Northeast, as well as the base of Russia’s Pacific Fleet and its “Window to Asia” in Vladivostok, though the exact consequences are again subject to the atmospheric ramifications resulting from the scope and scale of any speculative American nuclear bombing of North Korea.

One of the relevant tangential developments that could unfold is that China’s domestic agricultural industry could collapse, and this could combine with the widespread fear resulting from the nearby radioactive panhandle to produce unpredictable socio-political consequences in the People’s Republic.

Furthermore, the nuclear destruction of North Korea and the attendant apocalyptic aftereffects that this would have for Northeast Asia would for all intents and purposes remove each of these victimized nation-states from the geopolitical game except for perhaps Russia, seeing as how they’d all be wreaked with internal turmoil in dealing with the long-term radioactive fallout of what happened, thus restoring the US to its immediate post-World War II “glorious” position in recapturing the majority of the global economy and literally “Making America Great Again”.

It’s precisely this “reward” that is so tempting to Trump and why his finger is itching to press the nuclear button, but then again he’s still held back by the thought of the quarter-million American lives that might have to be sacrificed as a result, though he might “console” himself with the “excuse” that this was “necessary” in order for the remaining 320+ million to “rule the world”.

As for the millions upon millions of Asians who would surely die in this scenario, Trump would “rationalize” it by convincing himself that he was taking North Korean “slaves” “out of their misery” and that all the others who allowed Kim Jong Un to “get out of control” and launch what the Pentagon might provoke to be Pyongyang’s first strike “deserved it”, shedding all personal responsibility for this by claiming that he “inherited an impossible mess” from his hated predecessors who already made its dynamics “irreversible” and therefore its conclusion “inevitable”.

The only realistic chance that Trump can be stopped from nuking North Korea in the event that he “gets over” the potential deaths of a quarter-million Americans (considering that the deaths of Asians aren’t anything that he cares about) and/or is misled into thinking that North Korea is on the cusp of launching its own imminent first strike (or was provoked into doing so) is if Russia and China convey the message to the US — whether openly or discretely — that they will respond with nuclear weapons if Washington dares to use them.

This brinksmanship would be very dangerous because there’s no telling whether Kim Jong Un would introduce nukes into any forthcoming conflict first, though from Pyongyang’s perspective it would have to in order to ensure its survival or “go out with a bang” like it’s been threatening, resultantly giving the US a semi-“plausible” right to respond in kind, albeit much more disproportionately.

However much some people may wish, it is unlikely that Russia and/or China would go to nuclear war against the US over North Korea, especially in the event that Pyongyang used nukes first (whether justifiably or not), and in spite of the long-term radioactive fallout that could devastate their two countries (China much more so than Russia in this case).

In addition, it can be assured that any US nuclear (counter-)attack against North Korea would be preceded by the scrupulous monitoring of all Chinese nuclear assets “just in case”, meaning that Washington would be on “red alert” to nuke China if Washington thought that Beijing was about to bomb its overseas bases or homeland in preemptive response for the deadly radioactive future that the US would be giving it, thus representing an unimaginably dangerous situation fraught with the risk of even the smallest misstep leading to a nuclear war between the US and China and further diminishing the chance that Beijing would strike back.

All in all, Trump is proving himself to be the consummate risk-taker who’s not afraid to up the stakes in any situation, and a thorough read of his personality proves that he wouldn’t shy away from using nuclear weapons against North Korea, deeply believing that it’s the key to “Make America Great Again” even if this would run the chance of a nuclear war with China too.

Trump is a modern-day Machiavelli who doesn’t care about morals, ethics, and principles when it comes to advancing his country’s grand strategic interests on the world stage, but it’s because of the little bit of “humanity” that’s still left within him in caring about the fate of a quarter-million Americans that he has yet to push the nuclear red button that’s sitting so tantalizingly close on his desk.

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