Tag: finance

Apparently, possessing the largest nuclear arsenal in the world isn’t enough for President Donald Trump. To wit, NBC News is reporting that Trump had asked for a nearly tenfold increase in the US’s nuclear arsenal during a Pentagon defense briefing in July involving several of the administration's most-senior officials.

According to the officials present at the meeting, Trump’s advisers, among them the Joint Chiefs of Staff and Secretary of State Rex Tillerson, were surprised by Trump's request, and quickly explained the legal and practical impediments to a nuclear buildup and how the current military posture is stronger than it was at the height of the build-up. In interviews. The president reportedly relented, and no such expansion is planned.

The description of the meeting was presumably leaked to NBC by the same sources who furnished the story about Tillerson’s now-infamous “moron” comment.

NBC reported that officials who lingered behind after the contentious July 20 security review heard Tillerson call the president a moron – suggesting that Tillerson made the comment in response to Trump’s nuclear ask.

However, NBC clarified that it’s unclear which portion of the Pentagon briefing prompted Tillerson’s comment because officials who attended the two-hour session said it included a number of tense exchanges.

The revelation comes as the US and South Korea are bracing for North Korea to test more short-range rockets around the opening of the Chinese Communist Party’s twice-a-decade congress on Oct. 18. Trump also recently revealed that his administration wouldn’t certify the Iran deal, leaving it to Congress to decide if the country has complied with the terms of the 2015 multilateral Iranian nuclear deal.  

Trump convened a meeting Tuesday with his national security team in which they discussed “a range of options to respond to any form of North Korean aggression or, if necessary, to prevent North Korea from threatening the US and its allies with nuclear weapons,” according to the White House.

Several people who attended the meeting said they didn’t believe the president’s comments represented a literal desire for the military to increase its stockpiles of nuclear missiles, but instead were rooted in Trump's limited und nuclear issues. The remark followed a presentation comparing the US’s nuclear capabilities with those of Russia.

Two officials present said that at multiple points in the discussion, the president expressed a desire not just for more nuclear weapons, but for additional US troops and military equipment.

As NBC pointed out, any increase in America’s nuclear arsenal would not only break with decades of US nuclear doctrine but also violate international disarmament treaties signed by every president since Ronald Reagan, potentially triggering the first nuclear arms race since the end of the Cold War.

“If he were to increase the numbers, the Russians would match him, and the Chinese” would ramp up their nuclear ambitions, Joe Cirincione, a nuclear expert and MSNBC contributor, said, referring to the president.

 

“There hasn’t been a military mission that’s required a nuclear weapon in 71 years,” Cirincione said.

Of course, this isn’t the first time that Trump suggested the nuclear arsenal should be expanded. Before the inauguration, then president-elect Trump tweeted that the US “must greatly expand its nuclear arsenal.” It’s also not the first time that the president reportedly demonstrated ignorance about nuclear weapons policy. MSNBC reported that Trump once asked advisers why the US didn’t use its nuclear arsenal more often.

Trump tweeted a video of himself and Vice President Mike Pence leaving the Pentagon following the July 20 meeting.

According to NBC, the July 20 meeting was the second in a series of national security-focused meetings that reportedly left Trump’s military advisers feeling frustrated by the president’s ignorance about foreign policy issues.

That meeting followed one held a day earlier in the White House Situation Room focused on Afghanistan in which the president stunned some of his national security team. At that July 19 meeting, according to senior administration officials, Trump asked military leaders to fire the commander of U.S. forces in Afghanistan and compared their advice to that of a New York restaurant consultant whose poor judgment cost a business valuable time and money.

 

Two people familiar with the discussion said the Situation Room meeting, in which the president’s advisers anticipated he would sign off on a new Afghanistan strategy, was so unproductive that the advisers decided to continue the discussion at the Pentagon the next day in a smaller setting where the president could perhaps be more focused. “It wasn’t just the number of people. It was the idea of focus,” according to one person familiar with the discussion. The thinking was: “Maybe we need to slow down a little and explain the whole world” from a big-picture perspective, this person said.

The July 20 meeting was also attended by Vice President Mike Pence, Treasury Secretary Steven Mnuchin, Defense Secretary James Mattis, Chairman of the Joint Chiefs General Joseph Dunford, Vice Chairman Gen. Paul Selva, Undersecretary of Defense Patrick Shanahan, Stephen Bannon, who served then as Trump’s chief strategist, Jared Kushner who is a senior adviser to the president and Reince Preibus who was then chief of staff. Sean Spicer who was then White House spokesman, and Keith Schiller who was Director of Oval Office Operations at the time, also accompanied Trump to the Pentagon that day.

Asked for a response to the president’s comments, a White House official speaking only on the condition of anonymity, said that the nuclear arsenal was not a primary topic of the briefing. Dana White, spokesperson for the Pentagon said “the Secretary of Defense has many closed sessions with the president and his cabinet members. Those conversations are privileged.”

However, White House officials say the president supports modernization of the US’s nuclear arsenal, and clarified that his concerns weren’t about having enough nukes, but about the fact that the US stopped investing in the program. 

Still, officials said they are working to address the president’s concerns within the Nuclear Posture Review, which is expected to be finalized by the end of 2017 or early next year.

 

“He’s all in for modernization,” one official said. “His concerns are the U.S. stopped investing in this.”

The Pentagon is currently undergoing the long-planned posture review. Modernizing the arsenal is a step presidents continuously take that doesn’t put the US in violation of treaty obligations, Cirincione said.

“You don’t get in trouble for modernizing. You do get in trouble if you do one of two things: if you increase the numbers. The strategic weapons are treaty limited. Two, if you build a new type of weapon that is prohibited by a treaty,” he said.

Officials present said that Trump’s comments on a significantly increased arsenal came in response to a briefing slide that outlined America’s nuclear stockpile over the past 70 years. The president referenced the highest number on the chart — about 32,000 in the late 1960s — and told his team he wanted the U.S. to have that many now, officials said.

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The Fed is dramatically understating real inflation.

As you know, I’ve been very critical of the Fed’s inflation measures for years. The official inflation measure (Consumer Price Index or CPI) does a horrible job of measuring the actual cost of living for Americans.

I have long stated that this is intentional as the purpose of CPI is to hide the true rate of inflation so the Fed can paper over the decline in living standards that has plagued the US for the last few decades.

The Fed isn’t doing this out of ignorance, either. Back in 2002, Fed researchers actually reviewed  the usefulness of its CPI metric for forecasting inflation.

The results were not pretty. In fact, the Fed discovered that its official measures of inflation (CPI and PCE) do a horrible job of predicting future inflation.

So what does predict future inflation accurately?

FOOD prices.

We see that past inflation in food prices has been a better forecaster of future inflation than has the popular core measure…Comparing the past year’s inflation in food prices to the prices of other components that comprise the PCEPI (as in Table 1), we find that the food component still ranks the best among them all…

http://ift.tt/2ygqTss…

I want you to focus on these two admissions:

1)   The Fed has admitted that its official inflation measures do not accurately predict future inflation.

2)   The Fed admitted that FOOD prices are a much better predictor of future inflation. In fact food prices were a better predictor of inflation than the Fed’s PCE, non-durables goods, transportation services, housing, clothing, energy and more.

Put simply, if you want to predict inflation well… you NEED to look at food prices.

With that in mind, food inflation is on the rise. As a whole, Food and Beverage inflation has broken out of a descending wedge pattern (blue lines) in the context of a massive wedge triangle pattern (purples lines). We’re heading for a test of the upper purple line shortly.

Overall inflation will be following by a few months, but it’s coming. 

Put simply, inflation is rising. And at it is going to be getting worse in the weeks and months ahead. Why do you think the $USD has dumped 10% this year already?

This is THE BIG MONEY trend today. And smart investors will use it to generate literal fortunes.

We just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead

The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.

We are making just 100 copies available to the public.

To pick up yours, swing by:

http://ift.tt/2knowyr

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

via http://ift.tt/2gcaiz4 Phoenix Capital Research

• Republicans to Trump and Corker: Please just stop (Politico)
• Trump Wants to Weaken Nafta’s Influence, Power (WSJ)
• Spain Warns Catalonia With Threat of Direct Control From Madrid (BBG)
• U.S. warship sails near islands Beijing claims in South China Sea (Reuters)
• U.S. flies bombers over Korean peninsula (Reuters)
• New timeline in Vegas shooting raises questions on police response (Reuters)
• More Women Accuse Harvey Weinstein of Harassment (WSJ)
• Global Regulators Play Bitcoin Whack-a-Mole as Demand Explodes (BBG)
• Uber Faces at Least Two More U.S. Criminal Probes (BBG)
• What to Watch for as Wall Street Reports Third-Quarter Results (BBG)
• Cohen Eyes High Fee Structure in Hedge Fund Relaunch (BBG)
• Harvey Weinstein’s Wife Announces She Will Leave Him After Sex Abuse Claims (BBG)
• Goldman creates ‘brain trust’ in effort to boost deals business (Reuters)
• It’s Only Going to Get Worse for America’s Grocers (BBG)
• Black model who appeared in Dove ad says it was not racist (Reuters)
• Trump to Tout $4,000 Worker Benefit in Tax Sales Pitch (BBG)
• Family Ties, Leaks and a Wedding: Inside the Political Scandal Rocking South Africa (WSJ)
• U.S. congressional panels spar over ‘Trump dossier’ on Russia contacts (Reuters)
• Israeli spies found Russians using Kaspersky software for hacks (Reuters)
• How Tyson’s Chicken Plant Became a $320 Million Turkey (BBG)
• Alibaba launches $15 billion overseas R&D drive (Reuters)
• Nuclear Anxiety Hasn’t Stopped This Fund From Investing $500 Million in South Korea (BBG)

Bulletin headline summary

WSJ

– Activist investor Nelson Peltz narrowly lost his bid to win a board seat at Procter & Gamble, but his campaign isn’t going away, promising to keep pressure on P&G to change. on.wsj.com/2y9j0Fq

– Driver’s license data for around 10.9 million Americans was compromised during the breach of Equifax’s systems, according to people familiar with the matter. on.wsj.com/2y7NLdQ

– Fire officials issued grim tallies as more than a dozen wildfires tore through Northern California: at least 17 people dead and more than 100 missing. on.wsj.com/2y9jDPi

– A Turkish court sentenced Wall Street Journal reporter Ayla Albayrak to two years and one month in prison Tuesday, declaring her guilty of engaging in terrorist propaganda in support of a banned Kurdish separatist organization through one of her Journal articles. on.wsj.com/2y9M67O

– Wal-Mart Stores will deepen its cost-cutting and introduce zero-based budgeting in some units, efforts to free up funds for new e-commerce and store improvements in an increasingly competitive retail environment. on.wsj.com/2yah9Ap

– A systems error during a technology test Tuesday inadvertently published scores of erroneous test headlines and articles on Dow Jones Newswires. on.wsj.com/2y94rSq

 

FT

– 6,500 Home Office staff currently working on immigration will not be able to cope with the challenges posed by Brexit of registering the 3.6 million EU citizens living in UK, two former senior immigration officials have told MPs.

– James Harding, BBC’s head of news, will step down at the end of the year to start his own news media venture. In an address to the BBC staff, Harding said that he was considering starting his new venture over the summer.

– UK’s National Audit Office has accused Nuclear Decommissioning Authority of mishandling a 6.2 billion pound ($8.19 billion) contract, one of the largest awarded by the UK government.

– Agriculture and Horticulture Development Board have predicted average UK farm income to fall to 15,000 pounds per year from 38,000 pounds unless UK strikes a free-trade agreement with the European Union.

 

NYT

– Apple Inc is digging into the more than $1 billion it has set aside for original programming to create its first known television project: a revival of a Steven Spielberg series from the 1980s. nyti.ms/2gurOMc

– After a failed effort to find a solution to save the company, Sears Canada Inc said on Tuesday that it would shut down operations, leaving about 12,000 employees out of work. nyti.ms/2gvhCTJ

– American technology and manufacturing company Honeywell International Inc said on Tuesday that it planned to spin off parts of its business but would retain its aerospace technology operations, against the recommendations of an activist investor. nyti.ms/2guqOYh

– Pharmaceutical giant Pfizer Inc said it had begun a strategic review of its consumer health care unit that could result in the business, whose products include Advil, Centrum supplements and ChapStick, being spun off or sold. nyti.ms/2i2QDT1

 

Canada

THE GLOBE AND MAIL

** Sears Canada Inc said it plans to liquidate its remaining 131 stores and put 12,000 employees out of work, after an attempt by its executive chairman to save the department store retailer failed. tgam.ca/2guGsTs

** Canadian auto-parts giant Magna International Inc has joined a consortium led by BMW AG that is developing a self-driving vehicle platform that can be used by multiple auto makers. tgam.ca/2gujPPa

NATIONAL POST

** Starlight Investments, one of the largest privately held apartment landlords in Canada, is creating a $1.3 billion partnership with two of the largest pension funds in the country to look for multi-family assets in south United States, a region largely free of rent control. bit.ly/2guMZ0j

** Sabrina Geremia is taking over as director of Google’s Canadian Operations, the company said Tuesday, after filling in as interim leader since Sam Sebastian left for Pelmorex Media Inc in July. bit.ly/2guaYwQ

 

Britain

The Times

Royal Bank of Scotland Plc’s 425 million pound ($561.43 million) “challenger” fund’s grant policy has come under attack from new lenders and politicians because one of its chief beneficiaries could be Banco Santander SA. bit.ly/2fZVzUb

Britain will miss out on the best global economic conditions since 2011 as the post-Brexit outlook holds the country back next year, the International Monetary Fund has warned. bit.ly/2kF7NXy

The Guardian

Network Rail is set to be granted an enhanced budget, likely to be more than 40 billion STG, to run Britain’s railway. bit.ly/2yaEpf3

Workers from Bombardier Inc’s Belfast plant on Wednesday will unfurl a banner outside the Houses of Parliament in London demanding that Theresa May and her ministers do more to safeguard their jobs. bit.ly/2i2Zd4d

The Telegraph

Equifax Inc on Tuesday said it is contacting nearly 700,000 customers in the UK to alert them that their data had been stolen in the attack. The company had earlier estimated that the number of people affected in the UK was “fewer than 400,000.” bit.ly/2yXIaU3

Convenience chain Nisa has recommended its 1,190 shopkeeper members to agree to a 143 million STG takeover from The Co-operative Group after four months of stop-start talks. bit.ly/2wLMkxP

Sky News

The asset management firm Old Mutual Global Investors is in talks to take a stake in payments app TransferWise. bit.ly/2yXzjlo

Unilever Plc is shifting approximately 140 UK-based jobs to the Netherlands as part of a plan to create a new global headquarters for brands such as PG Tips and Magnum ice cream. bit.ly/2ybULnP

The Independent

Lord Myners, the former City minister and now Labour peer, has called for an inquiry to be held into Monarch Airlines as the after shocks from the airline’s collapse continue. ind.pn/2yE3sdx

The Office for Budget Responsibility of UK on Tuesday said it anticipates significantly reducing the assumption for potential productivity growth over the next five years. ind.pn/2yEQEUk

via http://ift.tt/2ybi94y Tyler Durden

In its latest OPEC Monthly Oil Market Report (October) the oil cartel has increased its oil demand estimates for 2017, 2018 on strengthening world economy, and weaker outlook for supplies from its rivals.

Specifically, OPEC forecasts that based on the current global oil supply/demand balance, demand for OPEC crude in 2017 is estimated at 32.8 mb/d, around 0.6 mb/d higher than in 2016. Similarly, OPEC crude in 2018 is projected at 33.1 mb/d, 350k b/d higher than September production, and ~200k b/d higher than the group estimated last month.  Global oil demand seen rising +1.38m b/d, or 1.4% in 2018 to 98.19m b/d

Meanwhile, OPEC claims that oil inventories in developed nations continued to decline, -24.7m bbl to 2.996b bbl in August, curbing surplus relative to a 5-year average to 171m bbl.

Here are the key highlights from the report:

Crude Oil Price Movements

 

The OPEC Reference Basket rose to $53.44/b in September, its highest value since July 2015. Crude futures prices also saw gains, with ICE Brent averaging above the $55/b, supported by increasing evidence that the oil market is heading toward rebalancing. Geopolitical tensions and lower distillates stocks also pushed prices higher. ICE Brent averaged $55.51/b in September, a gain of $3.64, while NYMEX WTI increased $1.82 to average $49.88/b. Hedge funds raised net long position in ICE Brent and NYMEX WTI futures and options by almost 200,000 contracts. At the end of the month, the Brent crude contract curve had flipped into backwardation through December 2021. The sweet/sour spread widened significantly in Asia and Europe.

 

World Economy

 

Growth in the world economy continues to improve, with the forecast for 2017 revised up to 3.6% from 3.5% in last month’s report. Similarly, the 2018 forecast has been adjusted higher to 3.5% from 3.4%. The improving momentum is visible in all economies, particularly the OECD, which is seen growing by 2.2% in 2017 and by an upwardly revised 2.1% in 2018. US growth in 2018 has been revised up to 2.3% and the EU to 1.9% for the same year. Russia has also seen an upward revision for 2018 to now stand at 1.6%, compared to 1.4% in the previous report. Growth expectations for India and China were left unchanged for both 2017 and 2018.

 

World Oil Demand

 

World oil demand growth in 2017 is now expected to increase by 1.5 mb/d, representing an upward revision of around 30 tb/d from last previous report, mainly reflecting recent data showing an improvement in economic activities. Positive revisions were primarily a result of higher-than-expected oil demand from the OECD region and China. In 2018, world oil demand is anticipated to grow by 1.4 mb/d, following an upward adjustment of 30 tb/d over the previous report, due to the improving economic outlook in the world economy, particularly China and Russia.

 

World Oil Supply

 

Non-OPEC oil supply is expected to grow by 0.7 mb/d in 2017, following a downward revision of 0.1 m/bd from the previous report. In 2018, the growth in non-OPEC oil supply saw a downward revision of 60 tb/d to stand at 0.9 mb/d. OPEC NGLs and non-conventional liquids production are seen averaging 6.5 mb/d in 2018, representing an increase of 0.2 mb/d, broadly in line with growth in the current year. In September, OPEC crude oil production increased by 88 tb/d, according to secondary sources, to average 32.75 mb/d.

Separately, according to secondary source data, OPEC output in September rose +88.5k b/d to 32.748m b/d; the increase was mostly driven by higher output from Libya +54k b/d, Nigeria +51k, who are exempt from cuts, as well as gains in Iraq production. Saudi Arabian output was unchanged at 9.975m b/d, lowest since May, although based on self-reported data, Saudi production rose by 21.7k b/d to 9.973m b/d.

Additionally, OPEC raised its 2018 oil-demand projections by ~100k b/d to 98.2m b/d, while estimates for non- OPEC supply were cut by 100k b/d this year, -200k b/d in 2018; weaker outlook for next year on lower forecasts for Russia. In summary, OPEC sees that oil market remaining supported in coming months on expectations that supplies of middle distillates like heating oil “will remain relatively tight this winter.”

Perhaps the most interesting tidbit in the report, however, was OPEC’s admission (on page 45) that there is little upside to prices from here as a result of oil producers ramping up above $50, to wit:

Non-OPEC production is expected to increase next year, primarily as a result of projects that were approved before the 2014 price collapse. When the WTI price remained below $50/b for a longer period, US production growth slowed as the oil rig count declined. Lower prices are beginning to weigh on US shale oil activity as concerns mount that aggressive development could lead to output declines. Oil prices are expected to remain at $50-55/b in the next year. A rise above that level would encourage US oil producers to expand their drilling activities, otherwise the lower prices could lead to a reduction in their Capex.

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More than a week after Stephen Paddock carried out the deadliest mass shooting in US history, Las Vegas Police and the FBI still have few clues about what motivated the millionaire semi-retired professional gambler to murder 59 people, and – perhaps more disturbing – no idea why he ended his reign of terror after just 11 minutes.

On Monday, police “updated the narrative” for the shooting, admitting that a Mandalay Bay security guard who had been shot in the leg by Paddock was shot before – not after – Paddock carried out the deadly assault. Previously, authorities had maintained that the guard, Jesus Campos, had been responsible for stopping the attack. Now, they’re saying Paddock shot Campos through his door after detecting him on cameras he had set up in the hall – a full six minutes before Paddock started raining bullets on the crowd below.

Unsurprisingly given the public’s voracious appetite for news about the investigation, more details emerged early Wednesday, when it was revealed that Paddock had used the freight elevator at Mandalay Bay in the days ahead of the attack.  And in the latest sign that Paddock had hoped to maximize casualties during his rampage, police have revealed that fired special ‘incendiary’ bullets at a jet fuel tank, probably in the hopes of causing a massive explosion. Authorities had said earlier that he fired two conventional rounds at the tank, but failed to penetrate it.

The rounds, meant to ignite what they hit, were found inside Paddock's room at the Mandalay Bay Resort and Casino and near the fuel tank a short distance away on the grounds of McCarran International Airport, the sources said. Of course, this highlights a major inconsistency in the official narrative that needs to be addressed: If Paddock clearly intended to cause as much harm as possible, then why did he stop firing after just 11 minutes?

Furthermore, why did he kill himself if he was in possession of “personal protection gear” in his hotel suite and explosives in his car that suggest he planned to escape and possibly carry out a second phase of the assault.   There’s still no evidence that Paddock ascribed to any political or religious ideology.

Meanwhile, police say the Las Vegas shooter’s Reno home was broken into over the weekend, causing another round of police activity in the normally quiet Del Webb neighborhood, according to the Reno Gazette-Journal, and potentially complicating the investigation after LV Sheriff Joseph Lombardo said Monday that investigators would revisit Paddock’s homes.

“The question was: Is the FBI along with LVMPD revisiting the personal property of the suspect? Yes, that is accurate along with the behavioral analysis detectives,” Lombardo said. “They are also present and maybe we can discern additional evidence as a result of that revisit.”

Paddock purchased the small tan home in Reno's Somersett neighborhood, one of several homes where Paddock lived with his girlfriend Marilou Danley, in 2013.

Officer Tim Broadway with the Reno Police Department said the suspect or suspects broke into the home through the front door over the weekend, noting he was not sure how exactly the suspects gained entry.

Reno officers arrived on scene and “immediately notified the FBI,” he said. Broadway said the department is working with the FBI to “make sure there are no further incidents.”

Broadway said officers were not aware of anything that was taken or whether there were any damages. There are no suspects at this time.

So, the question remains. What inspired a wealthy real-estate investor and accountant with no criminal history, and only glancing brushes with mental illness (though some have speculated that he may have been an undiagnosed schitzophrenic judging by his tendency to talk to apparently imaginary figures) to carry out the worst mass shooting in US history?

And, while police have been quick to discredit video evidence appearing to show shots being fired from a lower floor, Lombardo’s remark that Paddock “must’ve had help” continues to resonate.
 

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In a much anticipated televized briefing, Spanish Prime Minister Mariano Rajoy formally demanded the Catalan leader clarify whether independence has been declared, saying that is needed before he can decide what steps to take. The Spanish leader announced that the central government has moved to take the first step towards suspending home rule in Catalonia on Wednesday morning.

“Cabinet has agreed to notify the Catalan government [so that it may] confirm if it has declared independence”, he said.

And while Rajoy said that he will send a letter to the leader of Catalonia’s regional government, informing him, essentially, that the referendum was illegal, and that they are considered to have broken the law and should desist, he did not go so far as the trigger Article 155 yet. Also in his statement, Rajoy did not set a deadline for the reply.

In a veiled threat, Rajoy said the clarity was required by the constitutional article that would allow Spain to intervene and take control of some or all of Catalonia’s regional powers. The Prime Minister mentioned Article 155 of Spain’s Constitution, hours after Catalan President Carles Puigdemont declared independence for the region, and then suspended it.

“In the reply to the notification”, said Mr. Rajoy: “Mr. Puigdemont has the opportunity to respond to the clamour of petitions made to him to return to the law”.

“This notification is necessary when it comes to activating Article 155 of the Constitution”, he added.

Rajoy issued the demand Wednesday following a special Cabinet meeting to respond to an announcement from the head of the wealthy Catalonia region that he was proceeding with a declaration of independence but was suspending it for several weeks to facilitate negotiations.

According to Bloomberg, making a formal demand on a regional president to correct his behavior, or to change his administration’s policies, is a necessary step toward possibly suspending his regional government under Article 155 of Spanish Constitution. The central government can only advance in this action if response from regional president is unsatisfactory.

According to various observes, it is rumored that the Catalan leader, Carles Puigdemont, will ignore Spain’s demand at which point Article 155 may be properly exercised, which would empower the government in Madrid to suspend the autonomy of the regional government and call new elections.

The FT reports: “If the government uses Article 155 to curtail Catalonia’s powers, it would be a significant escalation of a tense conflict between Barcelona and Madrid that threatens to turn into a severe constitutional crisis”.

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S&P500 futures point to a slightly lower open, as Asian stocks rise to trade near decade highs, with Japan’s Nikkei 225 closing at highest since 1996. European stocks are little changed, with Spanish shares gaining after Catalan President rows back from an immediate declaration of independence. MSCI's all-world stocks index briefly hit a fresh record high in opening European trading as a 1.5% jump in Spain's IBEX added to a 10-year high set by Asian shares overnight.

In early trading, the euro extended gains spurred by Catalonia’s pullback from an immediate declaration of independence from Spain, while the dollar drifted as investors awaited minutes from the last Federal Reserve meeting. Spanish stocks ralied sharply, with the IBEX 35 index rising as much as 2%, helped by a rise in banking shares which rallied as much as 4%, after Catalan President Carles Puigdemont said he’ll seek talks with Madrid over the future of his region in Spain delaying any independence announcement for “weeks”, rowing back from an immediate declaration of independence.

“There was a chance Puigdemont would have made a decisive declaration, so now yields are dropping because there is room for negotiation left,” said DZ Bank strategist Christian Lenk.

At the same time, the Spanish 10y bond yield dropped 5bps to 1.65%. However, shortly before 5am ET, the EURUSD slumped without a specific catalyst, while the European rally fizzled modestly as renewed fears over the fate of the Catalan region re-emerged.  Puigdemont’s backtrack averted an immediate confrontation over independence for Catalonia, though Spanish leaders are maintaining a hard line. Deputy Prime Minister Soraya Saenz de Santamaria accused Puigdemont of irresponsible leadership even as he sought to reassure companies fleeing the region. Prime Minister Rajoy convened an extraordinary meeting of his cabinet in Madrid on Wednesday to discuss his next move.

Elsewhere in Europe, the FTSE 100 climbed to as high as 7,550.17, surpassing its record closing level of 7547.63, after rising steadily the past 3 weeks. However, the index was down fractionally at last check. The pound has been under pressure in the past month as Brexit negotiations remain stuck on questions over the divorce terms, such as the size of the U.K.’s exit payments and the future of EU citizens’ rights. Stocks elsewhere on the continent, however, struggled for traction, with the Stoxx Europe 600 gauge flat as a drop in industrial metals led miners lower.

Asian equity markets were mostly positive as the region got a tailwind from Wall Street where all 3 major indices posted fresh all-time highs. This supported sentiment with ASX 200 (+0.6%) also lifted by energy names after WTI reclaimed the USD 51/bbl level to the upside. Shanghai Comp. (+0.2%) and Hang Seng (-0.4%) were choppy after a feeble liquidity effort by the PBoC and with Hong Kong benchmark just about kept afloat amid Chief Executive Lam’s policy address and profit tax cut announcement.

The most notable overnight move was the jump in Japanese shares, with the Nikkei 225 closing at its highest since December 1996, propped by companies in industries ranging from technology to retail. Machinery maker Fanuc Corp., Recruit Holdings Co., FamilyMart UNY Holdings Co., SoftBank Group Corp. and Terumo Corp. were the biggest contributors to the Nikkei 225’s gain, while scandal-whipped Kobe Steel Ltd. was the worst performer, falling a record 36 percent over two sessions. Railway companies and insurers propelled the benchmark Topix index to a decade-high for a second straight day.

“Expectations for upward revisions in local companies’ annual profit targets are pretty high ahead of the earnings season kicking off later this month,” said Yoshihiro Ito, chief strategist at Okasan Online Securities Co. in Tokyo. “It also reflects anticipation of a victory for the Abe administration in the upcoming election.”

Japan’s stock market has been buoyed by a series of upbeat economic data. A Cabinet Office report released before the market opened Wednesday showed Japan’s core machinery orders for August climbed more than analysts expected. The yen’s weakness against the dollar has further fanned speculation for robust growth in quarterly earnings. Japanese voters will head to the polls on Oct. 22 for a general election in which Prime Minister Shinzo Abe’s Liberal Democratic Party will be challenged by Tokyo Governor Yuriko Koike’s new Party of Hope. Support for the LDP was up marginally to 31.2 percent in an opinion survey conducted Oct. 7-9, compared with a poll from last week, according to public broadcaster NHK.

In the US, President Donald Trump’s public feud with Tennessee Senator Bob Corker, an influential fellow Republican, has raised concern that his push for a tax-code overhaul could be harmed. At the same time, the Federal Reserve will publish the minutes from its last minute later with a third U.S. rate hike of the year now looking nailed on for December.

“Squabbles surrounding Trump’s efforts come as no surprise, but it is still not helping the dollar,” said Yukio Izhizuki, senior currency strategist at Daiwa Securities in Tokyo.

Overnight, Trump tweeted dismisses rumours that Chief of Staff Kelly will be fired soon, in which he blames dishonest media and says the chief is doing a fantastic job. Elswhere, Fed's Kaplan (voter, soft hawk) said will be assessing progress of US economy towards full employment and looking for more signs of upward inflation. Kaplan added that he is mindful waiting too long to raise rates could leave the Fed behind the curve and increases chances of a recession, but also commented that the Fed can afford to be patient on rate hikes because economic growth is not running away. US may seek stricter NAFTA rules of origin and may require 85% of content to come from 3 NAFTA countries, may also seek 50% US content requirement, according to reports.

In FX, most Asian emerging currencies were higher after China fixed the yuan stronger and as news on Catalonia encouraged risk-taking, while concerns over U.S. tax reform and geopolitical risks lingered. Taiwan’s dollar was the biggest gainer, followed by Thailand’s baht while the offshore yuan fell. The euro rose to the highest level in two weeks after Catalan President Carles Puigdemont said that while an Oct. 1 referendum had given him the mandate to pursue independence, he would “suspend” the result for some weeks for dialogue with Spanish Prime Minister Mariano Rajoy’s administration. Catalan concerns have been rolled over to a future date and the yuan has been stronger, which are among the positive factors for Asia’s emerging currencies, said Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda Corp.

“Not too surprisingly, Asia’s EM FX is looking a lot brighter.” The Bloomberg Dollar Spot Index declines and the 10-year U.S. Treasury yields stayed below their recent highs of 2.4 percent, amid a feud between U.S. President Donald Trump and high-ranking Republican Senator Bob Corker that’s put the tax-reform agenda in question. The yen strengthened against the U.S. currency amid persistent concerns about North Korea. The Australian dollar rose, while the kiwi was steady

The dollar was little changed against its peers before FOMC minutes; stock futures held to tight ranges after Tuesday’s record high, while Treasury yields slipped. The euro held above 1.18 as options suggested further upside, while Spanish bonds outperformed on lower Catalan risks and the Turkish lira climbed for the first time in nine days. The Bloomberg Dollar Spot Index edged lower as London came into the market, reversing gains in the Asia session; the euro edged higher for a fourth day of gains against the dollar; Aussie dollar caught a bid from offshore funds following strong response to record bond auction; dollar-yen edges lower but trades above 112.00; cable steady around 1.3200 but neared 0.9000 against the euro as evidence emerged of further splits within the U.K. government over Brexit; Spanish bonds rallied as Catalans put off an immediate declaration of independence and sought dialogue.

Treasuries stuck in tight ranges through Asian hours and edge higher early in Europe as stocks unwind opening gains. Treasuries continue to outperform bunds, with spread 3bps tighter, though no evidence of large cross-market block trades that helped drive the tightening on Tuesday

In geopolitics, North Korea is reportedly looking as if it could be ready to launch multiple scud missile. US President Trump was briefed by Defence Secretary Mattis and a top military leader, in which they discussed a range of options to respond to any North Korea aggression. There were reports that 6 planes including 2 US B1-B bombers flew over the Korean peninsula as a show of force.

In the U.S., investors will parse Wednesday’s FOMC minutes for further confirmation a December rate increase is on track. Ten-year U.S. Treasury yields nudged lower after President Donald Trump said Tuesday he plans to make changes to his tax plan within the next few weeks, while dismissing concerns that his public spat with Senator Bob Corker would scuttle an overhaul. BlackRock, Delta among companies set to report earnings.

Bulletin headline summary from RanSquawk:

• European bourses trade in the green with Spain leading the charge following yesterday’s announcement by Puidgemont
• FX trade has been limited early in the European session, as markets digest the Catalonian announcement, and wait in anticipation for the latest FOMC minutes
• Looking ahead, highlights include US JOLTS, FOMC minutes, Fed’s Evans, Williams and ECB’s Praet

Market Snapshot

• S&P 500 futures down 0.09% to 2,546.25
• STOXX Europe 600 down 0.01% to 390.12
• MSCI Asia up 0.1% to 165.00
• MSCI Asia ex Japan up 0.3% to 544.82
• Nikkei up 0.3% to 20,881.27
• Topix up 0.1% to 1,696.81
• Hang Seng Index down 0.4% to 28,389.57
• Shanghai Composite up 0.2% to 3,388.28
• Sensex down 0.06% to 31,905.31
• Australia S&P/ASX 200 up 0.6% to 5,772.15
• Kospi up 1% to 2,458.16
• German 10Y yield rose 1.7 bps to 0.459%
• Euro up 0.2% to $1.1833
• Italian 10Y yield rose 1.3 bps to 1.833%
• Spanish 10Y yield fell 2.8 bps to 1.667%
• Brent Futures up 0.2% to $56.74/bbl
• Gold spot up 0.05% to $1,288.69
• U.S. Dollar Index down 0.2% to 93.14

Top Overnight News

• Dallas Fed President Robert Kaplan says he’s undecided on a rate move, with U.S. economy solid and inflation pressures probably building
• European Central Bank policy makers are poised to preserve their commitment to ultra-low interest rates as they wrangle over how long to keep their bond-buying program going, according to central bank officials, who declined to be named because such matters are confidential
• Bets on EUR/USD through options suggest that traders are the most bullish on the euro since 2009 on prospects for ECB tapering
• China is moving forward with plans to issue its first dollar-denominated bonds since 2004, with the Ministry of Finance scheduled to meet with bankers in Beijing Wednesday to discuss the sale, according to people familiar with the plans
• Bob Corker Is Just the Beginning of Trump’s Tax-Cut Problems
• House Lawmakers Question IRS Over $7.25m Equifax Contract
• Orange-Juice Market Awaits First U.S. Crop Report Since Irma
• Wildfires Wreak Havoc on California’s $58 Billion Wine Industry
• High Court Dismisses One Trump Travel Ban Case, May Drop Second
• House Panel Is Said to Subpoena Firm That Produced Trump Dossier
• FAA’s Panel Fails to Agree on Need for Drone Security Measures
• Wind and Solar’s Future Depends on Taxes, Not Clean Power Plan
• Kobe Steel Scandal Cascades as Two More Products Under Suspicion
• Madrid Keeps Pressure on as Catalans Blink on Independence Bid
• UBS’s Ermotti Talks Bigger Returns as Capital Issues Fade
• Molina Healthcare Names Joseph M. Zubretsky President & CEO
• Amazon Executive Drops Hints of Preferences for Second HQ Site
• China Urges U.S. to Respect Its Sovereignty, Interests: CCTV
• Google to Add 300 Jobs in France Over the Next Year, Echos Says

Asian equity markets were mostly positive as the region got a tailwind from Wall St where all 3 major indices posted fresh all-time highs. This broadly supported sentiment with ASX 200 (+0.6%) also lifted by energy names after WTI reclaimed the USD 51/bbl level to the upside. Nikkei 225 (+0.3%) pared opening weakness as USD/JPY nursed losses, although Kobe Steel woes persisted after further confirmation of product data falsification. Shanghai Comp. (+0.2%) and Hang Seng (-0.4%) were choppy after a feeble liquidity effort by the PBoC and with Hong Kong benchmark just about kept afloat amid Chief Executive Lam’s policy address and profit tax cut announcement. Finally, 10yr JGBs were subdued amid a positive risk tone in Japan and after a mixed 30yr auction where the b/c increased but accepted prices declined from last month. PBoC injected CNY 20bln via 7-day reverse repos. PBoC set CNY mid-point at 6.5841 (Prev. 6.6273)/

Top Asian News

• Noble Group Said in Advanced Talks to Sell Oil Unit to Vitol
• Hong Kong Developers Won’t Get Lower Land Premiums, Lam Says
• India Oil, Gas Service Providers Surge After Sales Tax Clarity
• Japan Shares Rise With Nikkei 225 Closing at Highest Since 1996
• Deutsche Bank’s Japan Investment Bank Chairman Said to Leave

Most EU bourses are trading marginally in the green, while outperformance has been seen in Spanish assets with the IBEX surging higher, led by banking names. This comes after yesterday’s press conference from the Catalan leader, whereby Puigdemont announced that he had requested the mandate to pursue independence from Spain but said it would not be implemented for a few weeks. A strong German 5 year auction could induce a bid and re-test of the intraday highs, but debt futures are still lacking any real conviction ahead of the after-hours Fed minutes and latest from Spain on Catalonia (PM Rajoy holding a news conference at 11.00BST). However, Spanish Bonos and EZ peripheral paper overall continue to outperform, with Portuguese bonds deriving additional support from well received 5 and 10 year supply, even though this was destined to draw decent investor interest as the first bond offerings since S&P upgraded the sovereign in September. Conversely, UK Gilts remain the laggards after  Tuesday’s lacklustre DMO 20 year tap, with Brexit and BoE tightening expectations all weighing on sentiment/direction

Top European News

• Europe’s Natural Gas Traders Have a Bone to Pick With Italy
• Pound to Climb Toward $1.40 Amid Floundering Brexit: Saxo Bank
• Italy New Electoral Law May Not Enhance Governability: Citi
• Smith and Nephew Gains After Report of Elliott Stake Building
• Mondi Falls as Rising Costs, Currency Moves Weigh on Earnings

In currencies, trade has been limited early in the European session, as markets digest the Catalonian announcement, and wait in anticipation for the latest FOMC minutes. The greenback has backed off this morning, with the DXY finding support around yesterday’s lows, just ahead of 93.10. As such, Dollar counterparts have ticked up, with EUR/USD edging higher following marginal bids amid the Catalonian leader avoiding making a formal declaration of independence from Spain, to test its August 29th high. In fact, the EUR has seen a slight bid against all its counterparts, as EUR/GBP grinds higher through the 0.8940 consolidation, while EUR/CAD attacks September’s high of 1.4812, where offers are likely placed. USD/JPY has edged away from 112.50, with option expiries the theme this week, (2bln worth of expiries between 112.80 and 113.00).

In commodities,trade has also been quiet throughout the session with WTI crude futures mildly extending on yesterday’s 3% increase to briefly break above the USD 51/bbl level. Of note, today will see the release of the API crude report after US close and the monthly OPEC report at 1200BST.  Gold climbed 0.1 percent to $1,288.98 an ounce, the highest in more than two weeks.

Looking at the day ahead, China’s Xi Jinping is due to deliver a communique following the meeting of the Chinese Communist Party. The UK’s Philip Hammond will face questions in the House of Commons, including on Brexit related issues. In the US, the big focus in the US will be the FOMC meeting minutes from the September meeting. Datawise we’ll receive August JOLTS data prior to this, while the Fed’s Evans and Williams are both due to speak later on. The ECB’s Praet is also due to deliver comments this evening.

US Event Calendar

• 7am: MBA Mortgage Applications, prior -0.4%
• 7:15am: Fed’s Evans Speaks on Economy and Monetary Policy
• 10am: JOLTS Job Openings, est. 6,135, prior 6,170
• 2pm: FOMC Meeting Minutes
• 2:40pm: Fed’s Williams Gives Community Leaders Speech

DB's Jim Reid concludes the overnight wrap

Markets spent yesterday mostly waiting for Catalan President Carles Puigdemont’s address last night to the regional parliament. It seemed he’d increasingly been boxed in by differences of opinion within his own coalition and also the fact that 6 of the 7 Catalonian based companies in the IBEX 35 have made strong overtures towards relocating their legal bases away from the region. Given that his options had seemingly been reduced over recent days he played his hand relatively well by saying the referendum had given the region a mandate for independence but that they would hold off for now to enter into dialogue with PM Rajoy and his administration. He said “we propose the suspension of the effects of the declaration of independence for a few weeks, to open a period of dialogue”.

Later in the evening, Bloomberg reported that Catalan lawmakers (including Puigdemont) are signing a document titled “Declaration of the representatives of Catalonia”, but are delaying its implementation. On the other side, the Spanish Deputy PM said “neither Mr Puigdemont nor anyone else can draw conclusions from a law that doesn’t exist, from a referendum that hasn’t taken place…” We shall find out more soon as the Spanish PM Rajoy will convene an extraordinary cabinet meeting in Madrid today (9am local time) and will address the Spanish Parliament later in the day.

Outside of this, the big focus today will be the FOMC meeting minutes from the September meeting (2pm local time). Our US team believes inflation will be a heavily debated topic, but given the recent Fed speak, it appears that most voting members are looking through some of the recent weakness and prefer to continue the “gradual” removal of monetary accommodation. For example, based on the forecasts submitted at the meeting, 12 of the 16 FOMC participants favoured at least one more rate hike this year. Elsewhere, the Fed’s Rosengren said over the weekend that inflation “is still not at the level that I would expect it to be, but we’re definitely seeing that tight labour markets are causing wages and salaries to gradually go up as well” and that inflation “will be much closer to 2%” a few months into 2018. As a reminder, the voting Chicago Fed Evans (today) and Fed Governors Brainard and Powell (tomorrow) will be speaking over the next day or so. Data wise, the September PPI is due tomorrow, followed by the big CPI release and retail sales on Friday. So plenty of opportunity for the rate debate to move on.

Turning to the proposed US tax reforms now. When asked if the latest public rhetoric with Senator Corker would undermine his tax efforts, President Trump said “I don’t think so. I think we’re well on the way”. Further, he noted “we’ll be adjusting (the plans) a little bit over the next few weeks to make it even stronger…”. Later on, the White House Press Secretary Sanders noted that “… the final piece of legislation has not been finalised….(but) the framework is still the same”. For now we wait and watch, perhaps not for too long, as according Kevin Brady (Chairman of the Ways and Means Committee), his committee will release the tax bill “very soon” after both Chambers of Congress adopt a budget resolution later this month.

Circuling back to Brexit. The EU President Donald Tusk said the EU was not preparing for a full collapse of Brexit talks, but if talks “continue at a slow pace and that sufficient progress has not been reached, then we will have to think about where we’re heading”. Elsewhere, Chancellor Hammond has written for The Times overnight and noted that the UK government is “planning for every outcome and we will find any necessary funding and will only spend it when it’s responsible to do so”. We shall know more this Thursday post a wrap up news conference by EU negotiator Michel Barnier.

Staying with politics. Over in Italy, the Premier Gentiloni’s cabinet has called a confidence vote to pass a new electoral law which could potentially penalise the 5-Star Movement party (5SM). The new system (Rosatellum 2.0) would likely be used in next year’s election and could allow the formation of broad coalitions before the ballot. The new system allows 36% of lawmakers elected on a first-past-the-post basis and 64% via proportional representation. The 5SM candidate for PM (Luigi Di Maio) said “this is a mortal blow to democracy…the aim is to destroy us”. However, as per Reuters, the Rosatellum, even if passed, still looks unlikely to lead to a clear parliamentary majority, with opinion polls showing the centre-left, centre-right and 5SM splitting the vote three ways. For now, the voting process for the new law is expected to end this Thursday with the likely backing from the ruling PD party, Berlusconi's opposition centre-right Forza Italia, the Northern League and the small centrist Popular Alternative (AP) group. Then the bill will go to the upper house senate where the government apparently has no clear majority.

This morning in Asia, markets are following the positive lead from the US. The Nikkei (+0.26%), Kospi (0.86%), ASX 200 (+0.61%) and Shanghai Comp. (+0.33%) are all modestly up, but the Hang Seng is broadly flat as we type.

Turning to market performance yesterday. US equities rebounded towards its record high, with the S&P 500 (+0.23%), Dow (+0.31% to a fresh all time high) and Nasdaq (+0.11%) all up slightly. Within the S&P, gains were led by the utilities and consumer staples sector with minor offset from the consumer discretionary sector. Wal-Mart jumped 4.47% after announcing a US$20bln share buyback (c8% of market cap) with positive guidance to its e-commerce sales. European equities broadly softened yesterday ahead of Catalan President’s address which took place after market hours. The Stoxx 600 (-0.01%), CAC (-0.04%) and DAX (-0.21%) dipped marginally, while the IBEX fell 0.92% but the FTSE 100 advanced 0.40%.

Bond markets were mixed but little changed. Core 10y bond yields were broadly flat (UST +0.2bp; Bunds -0.2bp; OATs unch), while Gilts (+0.6bp) and peripherals such as Italian BTPs (+1bp) and Spain (+1.5bp) were slightly higher. At the 2y part of the curve, Bunds and OATs were broadly flat, but Gilts and Spanish yields rose 1.7bp and 2.3bp respectively.

Turning to currencies, the US dollar index fell 0.41% while Euro and Sterling gained 0.58% and 0.46% respectively, partly aided by higher than expected macro data and the more conciliatory tone from the Catalan President’s address. WTI oil rose 2.70% to US$50.89/bbl ahead of EIA data, which are expected to show crude inventories declined for a third week. Precious metals were slightly higher (Gold +0.31%; Silver +0.90%) while other base metals were mixed but little changed (Copper +0.56%; Zinc +0.67%; Aluminium -0.93%).

Away from markets, the Netherlands has just formed a new coalition government 208 days after the actual election. Mark Rutte of the People’s Party for Freedom and Democracy will lead the coalition along with three other parties, although with only a 1 seat majority (76 out of 150) in the parliament. As per the FT, some of the government’s early focus include: i) support the unity of the remaining 27 EU members and protect the interests of the Dutch fishing sector and ii) any common Eurozone debt instruments are undesirable, in part as all member states cannot shift the negative impact of their policies onto other countries.

Looking at the day ahead, China’s Xi Jinping is due to deliver a communique following the meeting of the Chinese Communist Party. In Europe the final September CPI revisions for Spain are due. Onto other events, The UK’s Philip Hammond will face questions in the House of Commons, including on Brexit related issues. Across the pond, the big focus in the US will be the FOMC meeting minutes from the September meeting. Datawise we’ll receive August JOLTS data prior to this, while the Fed’s Evans and Williams are both due to speak later on. The ECB’s Praet is also due to deliver comments this evening.

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North Korea is preparing to fire multiple short-range rockets around the opening of the Chinese Communist Party’s twice-a-decade congress on Oct. 18, the Seoul-based Asia Business Daily reports, citing an unidentified person. According to the newspaper, the U.S. and South Korean militaries have recently spotted about 30 Scud rockets being moved from Hwangju, south of the capital Pyongyang, to a missile maintenance facility in the western coastal city of Nampo.

More from the report, google translated:

According to the authorities, the ROK-US military intelligence agency captured the process of transferring 30 Scud missiles deployed in the Hwangju area of ??North Hwanghae province to a missile repair facility in Jamsun, West Sea, Nampo, through information assets. It is unusual for North Korea to massively move Scud missiles.

The Jangjin missile factory, which North Korea refers to as the Taesung Machinery Factory, is the most important missile production plant in North Korea, producing a variety of missiles such as scud and labor. Kim Jong-un inspects the Jamsil plant in March last year, when the North Korean Workers’ Party chairman passed a resolution imposing sanctions on the UN Security Council, emphasizing that “the working class should shine forth the immortal achievements of the followers with high productivity.” to be.

 

The US military says the signs of North Korea ‘s massive missile launch are similar to those of a Frog rocket launched in March 2014. It is predicted that the missile will be launched in a bunch of scud missiles to avoid blaming the international community for the long-range ballistic missile provocation and to check off the multinational offshore power gathering near the Korean peninsula.
Some argue that Scud missiles are intended to be upgraded to Scud-ER missiles. On September 5, last year, North Korea shot 1000 kilometers of Scud-ER in Hwangju. It is the first time Korea and America have caught the test launch of the Scud-ER, which has improved the Scud. At the time, North Korea reported that “the drill was conducted to limit the range of the missile to the port and airfields of South Korea, where nuclear weapon equipment is being used.”

 

Scud-ER missiles are equipped with various aids to increase the precision of the ASBM combined with ballistic missiles, and may threaten the US military reinforcements deployed on the Korean Peninsula in case of emergency. When a satellite receiver (GPS) receiver is mounted on the Scud-ER missile, the ground stationary target can be struck precisely. North Korea succeeded in precise induction by attaching a GPS receiver to a new 300mm radial tube.

As Bloomberg adds, while launching dozens of short-range rockets simultaneously is unusual, it’s not unprecedented. In March 2014, Kim Jong Un’s regime fired 71 of them in a single week. Such a move would also show how North Korea is capable of various types of provocation, having spent the past few months testing missiles that could potentially deliver a nuclear warhead to the U.S. mainland.

Firing the missiles would be an act of protest against the U.S. and South Korea’s joint military exercises, which include mobilizing key American assets such as aircraft carriers, the daily said. Such a launch would be deemed a substantial act of provocation by the White House and would lead to another sharp round of escalations and potential retaliation by the Trump administration.

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Authored by Jason Ditz via AntiWar.com,

NATO has announced the launching of their multinational Black Sea Force, based in Romania, and including an entire Romanian brigade of 4,000 troops.

“We are sending a very clear message: NATO is here, NATO is strong and NATO is united,” Stoltenberg told assembled Polish, Romanian, Spanish and Portuguese soldiers.

The force is there to target Russia in the Black Sea region.

Romania insisted the deployment is “not a threat to Russia” and that the purpose of having more troops there to “target” Russia is “peace, not war.”

“We are not a threat for Russia. But we need dialogue from a strong position of defense and discouragement,”

900 US troops were deployed to Romania to participate in this force.

Since Russia doesn’t border NATO anywhere in the Black Sea region, the force appears to be largely pointless, except for additional grandstanding about NATO’s “readiness” for a fight with “invading” Russian forces, in an invasion that’s been predicted for years.

This appears to be an attempt to mirror the creation of NATO’s much larger Baltic forces, which are all deployed at or near the Russian frontier, and which see large western military contingents placed in tiny Baltic states.

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Robert Shiller isn’t the only Nobel Laureate who’s worried the US stock market is sleepwalking toward disaster.

In an interview with Bloomberg’s Jeanna Smialek, Thaler, who was awarded the Nobel Memorial Prize in Economic Sciences on Monday for his pioneering work in establishing that humans are “predictably irrational”, said that the stock market’s complacency in the face of the North Korean nuclear threat and political uncertainty at home is disconcerting.

“We seem to be living in the riskiest moment of our lives, and yet the stock market seems to be napping,” Thaler said, speaking by phone on Bloomberg TV. “I admit to not understanding it.”

Adding his voice to a growing chorus of Wall Street analysts who suspect that the Trump administration’s tax reform ambitions will be dashed by a handful of intransigent senators, Thaler said any investors who’ve been paying attention should have “lost confidence” by now.

“I don’t know about you, but I’m nervous, and it seems like when investors are nervous, they’re prone to being spooked,” Thaler said, “Nothing seems to spook the market” and if the gains are based on tax-reform expectations, “surely investors should have lost confidence that that was going to happen.”

US stocks have continued to hit a string of records since President Donald Trump’s upset victory over Hillary Clinton in November while volatility has plunged, with realized vol reaching its lowest level on record in October.

As Bloomberg points out, Thaler, who has made a career of studying irrational and temptation-driven actions among economic actors claimed that the market’s complacency was fundamentally misguided.

Thaler’s comments echoed comments from Shiller, a professor at the Yale School of Management who won his economics Nobel in 2013, who warned during a July interview with CNBC, Shiller expressed concern that his Shiller CAPE ratio had crossed above 30, signaling that equity valuations were dangerously stretched. During the history of the stock market, stocks have only traded at richer valuations during one period – June 1997 to September 2001 – as the dotcom farce blew and burst. Historical data for the index is available going back to 1881.

Thaler also took a shot at President Donald Trump, mocking the president’s fondness for bluster and notorious aversion toward reading books.

“His ratio of certitude to knowledge is nearing record highs,” Thaler said on Bloomberg Radio with Tom Keene and David Gura. “We all need a lot of humility, and especially about the economy.”

He also added that the UK’s vote to leave the European Union was decision based on emotions, not rationality.

“I don’t think that the leave votes were based on any implicit spreadsheet running in people’s heads – it was just like, ‘I’m angry, and I’m voting no,’” he told Bloomberg TV’s Vonnie Quinn and Mark Barton. Of the Brexit process, he said: “It doesn’t seem to be headed in any productive direction.”

Thaler was perhaps one of the world’s best-known contemporary economists before receiving his award. His theory of "nudge" economics,  where humans are subtly guided toward beneficial behaviors without heavy-handed intervention, was the theme of a 2008 book that was well received around the world.

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