Tag: finance

With nearly a record 40 days of the S&P not having an intraday swing of 1% or more, traders – desperate for volatility – are fuming at a market that has apparently flatlined. They are not alone: as JPM’s Adam Crisafulli writes in his overnight piece, “it was once again a night of nothing”, and no matter what happens, “nothing is changing the equity narrative”, which for now is to barely budy on any given day.

Here is the key excerpt from JPM’s (appropriately boring) overnight note:

Market update – from the perspective of the SPX it was once again a night of nothing. None of the eco data, earnings, central bank headlines, or political reports are changing the US equity narrative. The S&P futures are thus (once again) flat. The lack of major events/news is making for a very slow and quiet tape and that will prob. continue for the foreseeable future (Yellen’s testimony 2/14-15 is the next major macro catalyst).

 

Washington skepticism is rising although for now the doubts are more around timing (i.e. the Trump/Ryan pro-growth agenda is still anticipated but maybe not until 2018) and not magnitude/efficacy (which is the real risk – it will take serious doubts around magnitude/efficacy to materially dent stocks).

Time to hit the snooze button again.

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• Airlines, Airports to Meet President Amid Travel-Ban Uncertainty (WSJ)
• Legal battle pits Trump’s powers against his words (Reuters)
• Trump’s Oval Office Tweets Force CEOs to Choose Fight or Flight (BBG)
• Companies Plow Ahead With Moves to Mexico, Despite Trump’s Pressure (WSJ)
• Trump’s Labor Pick Loves Burgers, Bikinis, and Free Markets (BBG)
• NATO allies lock in U.S. support for stand-off with Russia (Reuters)
• Sessions Takes Reins at Justice Ready to Walk the Line for Trump (BBG)
• Washington Turns Attention to Yemen, Pleasing Gulf States (WSJ)
• Tesla pausing factory for Model 3 preparation this month (Reuters)
• Twitter reports slowest quarterly revenue growth, shares slide (Reuters)
• Goldman hedge fund folding London operations, shifting staff to U.S.: sources (Reuters)
• Big Meat Braces for a Refugee Shortage (BBG)
• Islamic State-linked group claims rocket attack on Israeli resort (Reuters)
• Manhattan landlords can’t stop setting new records for giveaways  (BBG)
• Zurich Insurance Falls as Greco Fails to Convince on Growth (BBG)
• China’s changing debt risks drive up bond futures volumes (Reuters)
• Northeast U.S. Bracing for Powerful, Fast-Moving Snowstorm (BBG)
• Singapore Airlines places $13.8 billion wide-body Boeing order (Reuters)
• Puma Predicts Profit Jump as Bolt, Rihanna Assist Resurgence (BBG)

Overnight Media Wrap

WSJ

– The Senate confirmed Senator Jeff Sessions as attorney general largely along party lines Wednesday evening, ushering in a dramatic shift in the Justice Department’s approach to issues ranging from relations with local police to immigration enforcement to voter fraud. http://on.wsj.com/2kQN3Ls

– A federal judge, in a Wednesday evening decision, blocked health insurer Anthem Inc from acquiring rival Cigna Corp, the second court ruling in recent weeks to deal a decisive rebuke to efforts to reshape the industry through megamergers. http://on.wsj.com/2kR1TkZ

– U.S. companies refinanced $100 billion of loans in January, the largest monthly total in at least a decade, as expectations for interest-rate increases fuel the biggest corporate-refinancing boom in years. http://on.wsj.com/2kR213X

– A public shaming by Donald Trump last year hasn’t deterred Rexnord from moving jobs to Mexico. And it isn’t alone in making such a shift. http://on.wsj.com/2kQKDg0

– Viacom, long the poster child of the supersize cable TV bundle, is planning to narrow its strategic focus to six key channel brands as it seeks to reset its frayed relationships with distribution partners. http://on.wsj.com/2kQVEOc

– Whole Foods said it would close nine of its stores and lowered its financial projections for the year, moves made as the natural-foods company struggles with increased competition and slowing sales growth. http://on.wsj.com/2kQUClc

– Hollywood will soon have its first chance in five years to change the terms of doing business in China, a politically fraught opportunity for studios to reap billions more from their most important foreign market. http://on.wsj.com/2kQNp4S

– President Donald Trump and Intel Corp Chief Executive Brian Krzanich announced plans for a $7 billion investment in a major manufacturing facility in Arizona. http://on.wsj.com/2kQMj9e

– Theranos’s lab in Arizona failed to ensure some patients who got potentially inaccurate diabetes test results were notified, according to a federal inspection report. http://on.wsj.com/2kQVQgs

– Wells Fargo’s board is likely to eliminate annual bonuses for 2016 for some top executives following the bank’s sales-practices scandal. http://on.wsj.com/2kR4YBB

 

FT

Volkswagen said it was weighing steps against ex-Chairman Ferdinand Piech after media reports said he had informed key supervisory board members about potential diesel cheating six months before the scandal became public.

Intel Corp chose the White House Oval Office as its backdrop to announce a $7 billion investment in a previously shelved Arizona factory, which it said would create 3,000 jobs when it is up and running.

French cosmetics giant L’Oreal is exploring the sale of its retail unit The Body Shop for 1 billion euros ($1.07 billion). L’Oreal is working with Lazard bankers on a review of its options for the British cosmetics and skincare business.

 

NYT

– Ivanka Trump served for several years as a trustee for a fortune set aside for the daughters of Rupert Murdoch, but she stepped down in from the role December. The trust for the Murdoch daughters holds some $300 million in stock in News Corp and 21st Century Fox, companies that Murdoch leads, and in which he and his family hold controlling interests. http://nyti.ms/2k5tJKY

– President Trump lashed out on Wednesday at the Nordstrom department store chain for dropping his daughter Ivanka’s accessories and clothing line, once again raising ethical questions about the relationship between his presidency and his family’s sprawling business interests. http://nyti.ms/2k5uIL0

– A federal judge on Wednesday blocked a proposed $48 billion merger of Anthem and Cigna, derailing another effort by top health insurers to reshape the industry by combining. The ruling, by Judge Amy Berman Jackson of the Federal District Court for the District of Columbia, came two weeks after another federal judge blocked a proposed $37 billion merger between Aetna and Humana on antitrust grounds. http://nyti.ms/2k5LGc7

 

Canada

THE GLOBE AND MAIL

** Foreign Affairs Minister Chrystia Freeland has warned the Trump administration that Ottawa is ready to retaliate if the he imposes tariffs at the border, potentially sparking a trade war between Canada and its largest trading partner. https://tgam.ca/2k68Zm2

** Prime Minister Justin Trudeau says his government is “very concerned” about a recent influx of refugee claimants in a small southern Manitoba border town, emphasizing the need to protect both the incoming asylum seekers and Canada’s border. https://tgam.ca/2lu7dse

** London Stock Exchange Group Plc has added three new issuers with ties to Canada so far in 2017, bringing its total to 22 such companies. https://tgam.ca/2k6aT6s

NATIONAL POST

** TransCanada Corp is back in negotiations with natural gas producers to ship more Western Canadian gas to Ontario and thwart plans for a competing pipeline from Pennsylvania approved by the U.S. government last week. http://bit.ly/2kW9O0b

** Canada will provide long-range sniper rifles and anti-tank weapons to the Kurdish forces fighting the Islamic State (ISIL) in northern Iraq, the Department of National Defence said Wednesday. http://bit.ly/2k4TNB4

** Bombardier Inc’s ability to win a major CSeries order last year, and not the federal government’s latest cash infusion, was the real impetus for Brazil’s complaint against Canada at the World Trade Organization, according to a senior Brazilian official. http://bit.ly/2k6eLV1

 

Britain

The Times

Energy suppliers to face tough new finance tests

New energy suppliers could face strict financial checks and existing companies could be subjected to stress tests, under a regulatory shake-up being considered by Ofgem. http://bit.ly/2llPSVs

McLaren races into Sheffield

McLaren Automotive, the Surrey-based supercar maker and sister company to the Formula One team, is opening a factory in the industrial north. http://bit.ly/2lm6bBF

The Guardian

Trump envoy says Greece is now more likely to leave the euro

Donald Trump’s administration has put itself on a fresh collision course with the European Union after the president’s candidate to be ambassador in Brussels said Greece should leave the euro and predicted the single currency would not survive more than 18 months in its present form. http://bit.ly/2llQ9aW

Hundreds of Waitrose jobs may go as retailer plans six store closures

Waitrose is planning to close six stores and remove a level of management in its supermarkets, putting 600 jobs at risk. http://bit.ly/2lm5w3i

The Telegraph

Property developer brothers accused of threatening business partner with selling debt to Russian gangsters

Property developers Nick and Christian Candy have been accused of threatening the pregnant wife of a former university friend and warning they would sell his debt to Russian gangsters, a court in London heard on Wednesday. http://bit.ly/2lm7eBH

Mervyn King: MPs’ attitude made Brexit inevitable

British politicians have “lost touch” with voters and elitist bids to suppress the EU debate made the referendum on membership that led to the Brexit vote “inevitable”, Mervyn King said. http://bit.ly/2lm4dkC

Sky News

Walmart to help Asda mount market share fightback

A top executive at Asda’s parent company has pledged greater support to the chain’s recovery efforts after admitting it was slow to respond to the challenge posed by discounters in the UK. http://bit.ly/2lmb1P8

GSK boss seeks ‘sensible’ Brexit deal on migrant workers

The chief executive of the UK’s biggest pharmaceutical company, GlaxoSmithKline Plc, has told Sky News that Britain needs to be “open minded and sensible” about allowing skilled workers to come from abroad.

The Independent

Government accused of trying to kill off UK solar industry before it can become cheapest form of electricity

The Government has been accused of trying to kill off Britain’s solar energy industry just as it is about to become one of the cheapest suppliers of electricity – with no need for any kind of state subsidy. http://ind.pn/2lm570u

 

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So much for the much anticipated “Twitter president” bounce.

With Twitter shares surging in recent days ahead of earnings, as analysts and traders expected the Trump’s chronic use of Twitter would lead to a substantial bounce in new users, moments ago Jack Dorsey’s company disappointed again after it missed revenue (with US revenue posting a 7% decline) despite posting a modest EPS beat, as monthly users came in line with expectations but failed to impress, while US user growth remained flat. Worse, the company provided EBITDA guidance that was dreadful, far below expectations, and was half of what the company generated one year prior.

Here are the details:

• Q4 Non-GAAP EPS $0.16 vs. Exp. $0.12
• Q4 Revenue, $717.21MM vs. Exp. $740.14MM
• Q4 EBITDA $215MM, Exp. $182.9MM

Users grew modestly

• Average Monthly Active Users (MAUs): Q4 319MM, Exp. 319MM, Q3 317MM
• Mobile Monthly Active Users (MAUs): Q4 264.77MM, Q3 263.11M

However, in a disappointing indication that the company is failing to grow where it matters, US users remained flat at 67MM

Just as bad, the company’s US revenues actually posted a decline

But it was Twitter’s outlook that disappointed investors, with the company now expecting Q1 EBITDA of only $75-$95MM, far below the 191.3MM expected, and less than half what the company made in Q1 2016.

And some more charts.

 

* * *

As a result of yet another abysmal quarter, which already has analysts calling for an “intervention”, the stock is down nearly 10% in the premarket.

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French authorities said an explosion occurred at the EDF-operated Flamanville Nuclear Power Plant in France’s north-west, in the power plant’s machine room, but added that there is no leak of radiation. The incident occurred at 10:00 local time (09:00 GMT) in an engine room, Ouest-France newspaper reported. No injuries have been reported.

“It is a significant technical failure but it is not a nuclear accident” because the explosion occurred “outside the nuclear zone,” Olivier Marmion, director of the prefect’s office, told AFP.

???? Explosion à la centrale nucléaire de #Flamanville https://t.co/rAPPhadnCi http://pic.twitter.com/Afit2hQlAN

— Ouest-France (@OuestFrance) February 9, 2017

The local government for the Manche region says that the blast at the Flamanville plant on France’s northwest coast has been contained and managed.

A @EDFFlamanville 1, départ de feu maîtrisé en zone non nucléaire. Aucune victime et pas de conséquence pour la sûreté et l’environnement.

— EDF Officiel (@EDFofficiel) February 9, 2017

Operator EDF said that there were no injuries and that a fire led to a blast in the machine room of one of the two nuclear reactors at Flamanville. According to EDF, the fire started at 9:40am and caused an explosion in the machinery room. The fire happened in part of plant linked to reactor 1, which was disconnected from the grid, and was immediately controlled by plant’s crew;

The nuclear plant located in the Flamanville commune has two pressurized water reactors that produce 1.3 GWe (gigawatt electrical) each. The reactors were built in 1986 and 1987. A third reactor will be completed by 2018.

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Asian stocks hit their highest level in 18 months, with positive momentum lifting European shares which were helped by Societe Generale earnings. Yields fell on some of the euro zone’s battered low-rated bonds as investors put aside the political risks that have dominated markets this week. After trading flat, S&P futures bounced as US traders walked boosted by a spike in the USDJPY, ahead of earnings reports from Coca-Cola, Reynolds American, CVS Health, Nvidia and Twitter.

Rising oil prices pushed energy company shares higher in Europe on a busy day of corporate earnings while Asian stocks hit their highest in one and a  half years. “The stabilization of the oil price after its recent wobbles, together with solid earnings, for example, Soc Gen today, is driving the positive sentiment,” said Andy Sullivan, portfolio manager with GL Asset Management UK in London.

The Euro STOXX 600 index rose 0.4 percent. Bank shares also rose after French lender Societe Generale reported lower fourth-quarter net income that nonetheless beat analysts forecasts. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.3 percent to their highest since July 2015 with Hong Kong, Taiwan and China among the region’s best performing markets. Japanese shares, however, fell 0.5 percent, hit by earlier yen strength the day before Japan’s Prime Minister Shinzo Abe meets U.S. President Donald Trump.

“We have some relief with investors shrugging off some of their concerns with a feeling that things went too far, too fast,” said Martin Van Vliet, senior rates strategist at ING.

With much attention recently on global rates, yields on Spanish and Italian 10-year government bonds fell. Earlier this week, concern over the impact of elections this year in countries including France and Germany saw investors sell bonds of lower-rated euro zone countries. Spanish 10-year yields fell 4 basis points to 1.66 percent while Italian equivalents fell 3 bps to 2.2 percent. French yields dipped 1 bps to 1.01 percent. The premium investors demand to hold French rather than German debt hit its highest in four years on Wednesday, three months before the final round of a presidential election expected to include far-right, anti-euro candidate Marine Le Pen. Yields on German 10-year bonds, seen as among the world’s safest assets, rose 0.5 bps to 0.31 percent.

In addition to political worries, bond investors are contemplating the impact of the ECB eventually winding down its bond-buying stimulus scheme, which has driven down borrowing costs in the bloc for the past two years. ECB President Mario Draghi and German Chancellor Angela Merkel, bidding for re-election later this year, meet on Thursday. A number of German officials have called on the ECB to unwind its monetary stimulus.

The euro steadied just below $1.07 after falling on Wednesday to a two-week low of $1.0640. The yen fell 0.3 percent to 112.39 per dollar, having earlier traded as strong as 111.70. The dollar index was unchanged.

In the US, 10Y yields fell to their lowest since mid-January on Wednesday as investors re-assess how many interest rate rises can be expected from the Federal Reserve and look for clarity over whether Trump will make good on his campaign pledges for tax cuts and infrastructure spending. Ten-year Treasuries yielded 2.36% in European trade on Thursday, up 1.2 bps.

Oil prices rose after an unexpected draw down in U.S. gasoline inventories. Brent crude, the international benchmark, rose 51 cents a barrel, or 0.9 percent, to $55.63. In a sign that political risks are still on the radar, gold held close to three-month highs touched on Wednesday. Spot gold rose 0.1 percent to $1,243 an ounce, compared with from Wednesday’s high of $1,244.67.

Bulletin Headline Summary from RanSquawk

• Major European indices trade positively this morning and general sentiment leans toward risk on
• The USD continues to trade in limbo, and while traders continue to look across the spectrum of major counterparts, we see there is reluctance to reinstate the US reflation trade, with USD/JPY notably restricted
• Highlights include Initial Jobless Claims, Speakers include: BoE Govenor Carney, Feds Evans, and Feds Bullard

Market Snapshot

• S&P 500 futures up 0.2% to 2,295
• Brent Futures up 0.9% to $55.62/bbl
• Gold spot up 0.1% to $1,243.30
• U.S. Dollar Index down 0.2% to 100.12
• STOXX Europe 600 up 0.3% to 364.95
• German 10Y yield rose 1.2 bps to 0.308%
• Euro up 0.07% to 1.0705 per US$
• Brent Futures up 0.9% to $55.62/bbl
• Italian 10Y yield fell 12.1 bps to 2.246%
• Spanish 10Y yield fell 6.7 bps to 1.629%
• MXAP down 0.2% to 143.03
• MXAPJ up 0.4% to 459.43
• Nikkei down 0.5% to 18,907.67
• Topix down 0.7% to 1,513.55
• Hang Seng Index up 0.2% to 23,525.14
• Shanghai Composite up 0.5% to 3,183.18
• Sensex up 0.1% to 28,330.91
• Australia S&P/ASX 200 up 0.2% to 5,664.62
• Kospi up 0.04% to 2,065.88

Top BBG News

• Anthem Inc.’s $48 billion deal to buy Cigna Corp. was blocked by a federal judge, putting an end to the second of two massive mergers that would have reshaped the U.S. health-care landscape
• Deutsche Bank AG is shutting down its U.S. swaps-clearing business as part of an overhaul of its investment bank to improve profitability, according to a person briefed on the decision
• The Senate confirmed one of its own, Jeff Sessions, as attorney general after more than a day of contentious debate that took an unusual turn when Republicans silenced Democratic Senator Elizabeth Warren
• President Donald Trump is injecting himself into the daily business of U.S. companies to an unprecedented extent, spurring investors and executives to weigh their exposure to his wrath when making decisions
• SoftBank Group Corp. is aiming to close the first round of investment in its planned $100 billion technology fund by the end of this month, giving Chief Executive Officer Masayoshi Son an enormous war chest to go on the hunt for deals, according to people familiar with the matter
• Boeing Co. is the front-runner as Singapore Airlines Ltd. closes in on an order for at least 35 wide-body aircraft amid a battle with Chinese and Middle Eastern carriers, people familiar with the matter said
• The global oil market’s march to equilibrium won’t be deterred by the increasing volume of crude being poured into U.S. storage tanks, according to Goldman Sachs Group Inc.

Asia equity markets continued its recent choppy trade following a mixed lead from the US where stocks closed mostly higher, although the DJIA underperformed amid weakness in financials. ASX 200 (+0.2%) pared opening losses and finished marginally higher as gains in defensive stocks overshadowed weakness in mining names, while Nikkei 225 (-0.5%) was dampened by recent JPY strength although the index finished off worse levels alongside a recovery in USD/JPY. Chinese markets ignored the absence of a PBoC’s liquidity injection for the 5th consecutive day as Shanghai Comp. (+0.5%) and Hang Seng (+0.1%) traded positive with the latter led by financials and gambling names. 10yr JGBs were uneventful with prices relatively flat throughout the session, while today’s 30yr JGB auction failed to inspire as b/c, prices and the tail-in price deteriorated from the prior month. PBoC refrained from open markets operations for the 5th consecutive day due to high liquidity conditions, which brings the total amount of funds drained so far this week to CNY 715bn.

Top Asia News

• Nissan Operating Profit Falls 15% on Rise in U.S. Incentives
• Philippines Holds Benchmark Rate as Inflation Pressure Mounts
• China Car Sales Decline 9.8% After Tax Increase, Lunar New Year
• China H Shares Rally to 14-Month High as Autos, Financials Climb
• Banks in Some Chinese Cities Said to Increase Mortgage Rates
• MTN Close to Buying Stake in Iranian State Internet Provider
• India’s Jan. Passenger Vehicle Sales Rise 14.4% to 265,320 Units

In Europe this morning, major indices trade positively and general sentiment leans toward risk on. In terms of sectors, healthcare is the best performing up 1.1% with materials retracing some of yesterday’s gains. Energy names started off on the front foot after Total posted a strong set of results better than those seen by BP earlier on in the week and in the financial sector Commerzbank also reported well but subsequently shares have fallen and are now trading lower by around 3%. In Fixed income markets, UST are in demand due to geopolitical risks hitting the belly with 5YR yield eyeing 180bps and 10 YR yield struggling around 235bps. German paper still in demand due to the internal EU demand away from periphery. Interestingly the GE/FR spread has tightened to 66bps a move of 14bps over the last two day. In terms of this morning’s Gilt auction, the line provided a solid bid/cover and smaller tail than previous, although failed to sway Gilts.

Top European News

• SocGen Posts Net That Tops Estimates, Plans Car-Leasing IPO
• Mediobanca Rises After Second-Quarter Profit Almost Doubles
• MiFID II Market-Rule Overhaul Faces Crucial Parliament Vote
• HSBC Said to Seek Wealth Management Asset Acquisitions This Year
• Bank of Tokyo-Mitsubishi Fined by U.K. for Failing to Be Open
• Draghi Meets Merkel as Populist Concerns Trump ECB Criticism

In currencies, the USD continues to trade in limbo, and while traders continue to look across the spectrum of major counterparts, we see there is reluctance to reinstate the US reflation trade, with USDJPY notably restricted. As such, geopolitical risk dominates, and the lead (risk on) trade maintains a tight range below 112.50. EURUSD has also managed to brush off the EU wide political risks weighing on the single unit. This comes with the Bund spreads (with France) narrowing, but through 1.0700, we are seeing plenty of supply coming in with initial resistance at 1.0715-20 holding. The big move in Asia was NZD on the back of the exchange rate related comments from the central bank, but after a series of losses which saw 0.7200 eventually taken out, we have seen some moderation since as the USD continues to flounder. Comments from RBA gov Lowe was a little more non committal on the AUD exchange rate, saying it is hard to say whether the AUD is overvalued or not, and this gave the spot rate some support and saw a modest, but tentative move higher through 0.7650. Some modest outperformance in GBP, as EURGBP is pressed back down to 0.8500, and given the above flow, Cable through 1.2550. Resistance in the latter seen ahead of 1.2600, allies with real money and tech based demand in the cross rate below the above mentioned figure level.

In commodities, oil rose 1.2 percent to $52.94 per barrel. The global oil market’s march to equilibrium won’t be deterred by the increasing volume of crude being poured into U.S. storage tanks, according to Goldman Sachs. Copper three-month forwards fell 0.4 percent. The metal jumped 1.7 percent Wednesday after workers at the biggest mine in Chile vowed to strike. Goldman Sachs Group Inc. forecast what would be the first deficit of the metal since 2011. Gold was flat at $1,241.93 an ounce, after touching the highest level since November on Wednesday. Oil prices are back to the fore as the significant rise in inventory (Cushing) caused a moderate sell off in WTI in relative terms, with the latest rise potentially signalling the longer term impacts of the OPEC agreements on supply made last year. WTI tested towards USD53.00 earlier today, but this just puts us back into the middle of the near term range. Natural Gas higher though due to US seasonal factors. Elsewhere, base and precious metals all modestly higher in response to USD caution.

Looking at the day ahead, the calendar continues to remain fairly sparse for the most part today. The highlight this morning in Europe is likely to be the December trade data in Germany, where exports declined by -3.3%, well below the -1.10% expected (down from +3.9%) while over in the US the only data of note is the latest weekly initial jobless claims reading and the December wholesale trade and inventories report. Away from the data we are due to hear from the Fed’s Bullard and the Fed’s Evans. BoE Governor Carney is also scheduled to speak in London this evening at 6.30pm GMT. Finally on the earnings front we’ve got 27 S&P 500 companies due to report including Coca-Cola and CVS Health Corp.

US Event Calendar

• 8:30am: Initial Jobless Claims, est. 249,000, prior 246,000; Continuing Claims, est. 2.06m, prior 2.06m
• 9:05am: Fed’s Bullard Speaks in St. Louis
  9:45am: Bloomberg Consumer Comfort, prior 46.6
• 10am: Wholesale Trade Sales MoM, prior 0.4%; Wholesale Inventories MoM, est. 1.0%, prior 1.0%
• 10am: Freddie Mac mortgage rates
• 10:30am: EIA natural-gas storage change
• 12pm: Monthly World Agriculture Supply and Demand Estimates
• 1:10pm: Fed’s Evans Speaks on Economy and Policy in Chicago

DB’s Jim Reid concludes the overnight wrap

Yesterday saw a big rally in global bonds especially in the European periphery and France. Indeed 10y OAT’s finished the day 10.8bps lower in yield at 0.998%, the strongest day in fact since September 2015. In the periphery we also saw yields in Italy (-11.7bps), Spain (-7.2bps) and Portugal (-12.8bps) finish sharply lower while 10y Bunds (-5.5bps) – while underperforming – closed below 0.300% for the first time since January 10th. That meant the OAT-Bund spread eased back to 71bps from the recent 77bps wide mark. The rally really kicked into the gear straight from the open and steadily continued over much of the session. While much of the suggestion was that it was just an unwinding of some of the recent selloff, boosted also by strong auction demand in Germany and Portugal, there was a story also doing the rounds on Bloomberg concerning an internal ECB meeting in which Draghi supposedly said that he sees the ECB maintaining an accommodative policy until the end of his mandate in 2019. Given the imminent taper is a big part of the recent sovereign underperformance then one can see why markets responded to this.

The positive momentum for bonds kicked on into the US session too and we saw 10y Treasury yields end the day 5.7bps lower at 2.336%, despite a temporary move higher following a soft 10y auction which seemed to be overshadowed by comments from Larry Fink after he said that there’s a rising chance of 10y yields going back below 2% given that fiscal stimulus policies won’t be in place until 2018. Yesterday’s closing level means Treasury yields are nearly 13bps lower this week alone and are only just above the YTD low made intraday on the 17th January of 2.306%. Yields have also fallen for 4 days in a  row now which is the longest run since June last year.

So while it was a busy day for bonds, it was once again another indifferent session for risk assets. In Europe the Stoxx 600 edged up +0.33%, meaning it is pretty much back to flat for the week, while European Banks (-0.77%) lagged with the move lower for bond yields. Meanwhile at the closing bell last night the S&P 500 finished +0.07%. Incredibly that’s yet another day where the index has moved up or down by less than 0.10%, taking the tally to 7 in the last 10 sessions. That isn’t the only remarkable stat however. Yesterday’s move means the index has now gone 82 sessions without falling more than 1% which is the longest streak since 2006. In addition, the index has now also gone 37 days in a row with an intraday range of less than 1% – the longest run that we can find. Needless to say then that equity vol stayed low again yesterday with the VIX at 11.45 (versus the 10.58 low at the end of January) and the VSTOXX at 16.83 (versus the recent low of 14.60). It was a similar story in credit too with the iTraxx Main just 0.5bps tighter despite the big moves in bonds, while CDX IG finished just over 1bp wider.

This morning in Asia we’ve seen a continuation of the bond rally for the most part. The most notable have been the moves for 10y yields in Australia (-5.6bps) and New Zealand (-9.5bps) with the latter outperforming after the RBNZ left rates on hold and the associated statement said that monetary policy would remain accommodative for some time. JGB’s are little changed but we’ve also seen yields fall in Hong Kong (-3.7bps), South Korea (-2.5pbs) and Singapore (-2.5bps). The Greenback is little changed as we go to print, as is Gold and Oil, while it’s been another fairly uninspiring session for risk assets. The Nikkei (-0.28%) and ASX (-0.11%) are a shade lower while the Hang Seng (+0.39%), Shanghai Comp (+0.37%) and Kospi (+0.20%) are up.

Truth be told there really wasn’t a great deal more that was interesting yesterday. Last night we got confirmation that MP’s in the House of Commons had voted overwhelmingly in favour of a draft law to trigger Article 50 by 494 votes to 122. The legislation now moves on to the House of Lords for further scrutiny with the FT highlighting that the peers are under big pressure to approve without any amendments.

Staying in Europe, yesterday we also got another political poll out of France, which largely confirmed some of the recent trends. The Elabe poll for BFMTV showed Le Pen coming out on top in the first round at 25.5-26% versus 22-23.5% for Macron, 17-18% for Fillon and 15-15.5% for Hamon. A second round vote between Le Pen and Macron had Macron coming out on top at 63% to 37% and a vote between Le Pen and Fillon showed the latter coming out on top at 56% to 44%.

Looking at the day ahead, the calendar continues to remain fairly sparse for the most part today. The highlight this morning in Europe is likely to be the December trade data in Germany while over in the US this afternoon the only data of note is the latest weekly initial jobless claims reading and the December wholesale trade and inventories report. Away from the data we are due to hear from the Fed’s Bullard at 2.05pm GMT and then the Fed’s Evans at 6.10pm GMT. BoE Governor Carney is also scheduled to speak in London this evening at 6.30pm GMT. Finally on the earnings front we’ve got 27 S&P 500 companies due to report including Coca-Cola and CVS Health Corp.

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

After a fiery start to his foreign policy overtures, Trump is gradually normalizing his approach to international diplomacy.

On the same day as relations with Mexico appeared to return to normal, following reports of a meeting scheduled with the country’s foreign minister, and days ahead of the much anticipated summit with Japan’s PM Abe, Trump “broke the ice” with Chinese President Xi Jinping in a letter that marked the US president’s first direct communication with the Chinese leader since he took office, in which he said he looked forward to working with him to develop relations.

Trump thanked Xi for a congratulatory letter and wished the Chinese people a happy Year of the Rooster, according to White House spokesman Sean Spicer.  “President Trump stated that he looks forward to working with President Xi to develop a constructive relationship that benefits both the United States and China,” Spicer said in a statement Wednesday night.

Still, while Trump has had phone calls with Vladimir Putin, Enrique Pena Nieto and Recep Tayyip Erdogan since he took office, some perceived the mere letter as a modest snub to the president of the world’s second biggest economy. Trump and Xi have yet to speak directly since Trump took office on Jan. 20, although they did talk soon after Trump won the U.S. presidential election in November.

Trump, who has spoken with more than a dozen heads of state since taking office, is scheduled to speak on Thursday with the leaders of Afghanistan, Qatar, Kuwait and Iraq.

China Foreign Ministry spokesman Lu Kang responded in his daily briefing by saying “we highly appreciate President Trump’s holiday greetings to President Xi Jinping and the Chinese people.” Asked whether it was a snub that Trump had held calls with many other world leaders as president, but not Xi, Lu said: “This kind of remark is meaningless.”

He reiterated that China and the U.S. had maintained “close communication” since Trump took office and that cooperation was the “only correct choice”. “China is willing to work with the United States in adhering to the principles of non-confrontation, mutual respect and mutual benefit to promote cooperation, control disputes, and on a healthy and stable foundation, promote greater development in China-U.S. ties,” Lu said.

Diplomatic sources in Beijing say China has been nervous about Xi being left humiliated in the event a call with Trump goes wrong and the details are leaked to the U.S. media.

“That is the last thing China wants,” a source familiar with China’s thinking on relations with the United States told Reuters. “It would be incredibly embarrassing for President Xi and for Chinese people, who value the concept of face.” A senior non-U.S. Western diplomat said China was unlikely to be in a rush to set up such a call. “These things need to happen in a very controlled environment for China, and China can’t guarantee that with the unpredictable Trump,” the diplomat said.

“Trump also seems too distracted with other issues at the moment to give too much attention to China.”

As Bloomberg adds, :prior U.S. leaders have not always rushed to chat on the phone with their Chinese counterparts, even though Jiang Zemin’s visit to America in October 1997 led to an agreement on a hotline. Former President George W. Bush waited until July of his first term to speak with Jiang. By contrast, Barack Obama called Hu Jintao 11 days after his inauguration in 2009.”

Xi has reached out to Trump three times since his election win, including two congratulatory messages. They had a phone conversation on Nov. 14 in which Xi said cooperation was “the only correct choice” for ties. “It’s better than nothing, but it’s only a very small gesture,” said Shi Yinhong, a foreign affairs adviser to China’s cabinet and director of the Center on American Studies at Renmin University in Beijing, referring to Trump’s note. “Trump’s China policy hasn’t taken a clear shape yet, although all the signs so far point to a combative approach.”

China has repeatedly said it has smooth contacts with the Trump team. The Foreign Ministry in Beijing said last week the two countries were remaining “in close touch”. That contact has been led by China’s top diplomat, State Councillor Yang Jiechi, who outranks the foreign minister. Yang told Michael Flynn, Trump’s National Security Advisor, last week that China hopes it can work with the United States to manage and control disputes and sensitive problems.

The source familiar with China’s thinking said Trump’s administration was “very clear” about China’s position on Taiwan. Trump has yet to mention Taiwan since he took office.

Chinese state media has wondered whether Trump has a China policy at all. On Thursday, the widely read Global Times tabloid, published by the ruling Communist Party’s official People’s Daily, noted that Trump had not immediately confronted China as had been expected because he had realized upsetting Beijing would backfire badly.

“He has probably realized that real tough action against China would result in a complex chain reaction, even beyond his control,” the paper said in an editorial.

In a sign that Trump is gradually learning conventional diplomacy, Wang Yiwei, a professor of international relations at Beijing’s elite Renmin University, said the letter suggested the new U.S. administration wanted to signal the importance it attached to the U.S.-China relationship without risking being confronted on specific issues. “Trump has sent many messages that makes the world confused, like on the South China Sea and ‘One China’ policy, so if he makes a phone call President Xi will ask ‘what do you mean?’,” Wang said. “He wants to avoid this so he just sends a letter for the first step.”

It is the next steps, however, that worry China.

Beijing has sought both official and informal channels to boost communication with the new administration. Trump’s daughter Ivanka was invited to a Chinese lunar new year event on Feb. 1 in the embassy in Washington, and a White House official said Ambassador Cui Tiankai and Jared Kushner, Ivanka’s husband and a presidential adviser, have an ongoing dialogue. “The most worrying aspect about the new presidency is his temperament, not his policy,” said Wang Fan, director of China Foreign Affairs University’s Institute of International Relations. “We’re worried he’d go to the extreme.”

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Amid a more prolonged economic doldrums than The Great Depression, Greece is heading towards its 4th bailout/deal with creditors. Adding to Grexit fears (voiced by many in and out of Greece), Ted Malloch, President Trump's proposed US ambassador to the EU, casts doubt on survival of eurozone and says Athens should return to drachma.

As we noted previously, for the umpteenth time, the IMF has warned that Greece cannot meet fiscal targets set by its creditors. And once again, the IMF insists that it will not be a part of the “Troika” unless the goals on Greece are realistic. History suggests the IMF will cave in to Germany and agree to some half-baked plan (make that 1/8th baked plan) that will supposedly put Greece back on track. Such nonsense has been going on for years. Mercy, Please!

[It's worse than the Great Depression…]

A view President Trump's proposed ambassador to EU holds…

Days after being accused of “outrageous malevolence” towards the EU for publicly declaring that it “needs a little taming”, The Guardian reports that Trump's nominee, Ted Malloch, said on Wednesday that the euro currency area in its present form was unlikely to last longer than 18 months.

“Whether the eurozone survives I think is very much a question that is on the agenda,” he told Greek Skai TV’s late-night chat show Istories. “We have had the exit of the UK, there are elections in other European countries, so I think it is something that will be determined over the course of the next year, year-and-a half.

 

“Why is Greece again on the brink? It seems like a deja vu, will it ever end? I think this time I would have to say that the odds are higher that Greece itself will break out of the euro.”

The stridently Brexit-supporting businessman, who has yet to be confirmed as the US president’s EU ambassador, said he wholeheartedly agreed with Trump’s tweet from 2012 saying Greece should return to the drachma, its former currency.

Greece should get out of the euro & go back to their own currency–they are just wasting time.

— Donald J. Trump (@realDonaldTrump) October 9, 2012

"I personally think [Trump] was right. I would also say that this probably should have been instigated four years ago, and probably it would have been easier or simpler to do,” Malloch said in the interview with the show’s chief anchor, Alexis Papahelas.

Malloch said: “I have travelled to Greece, met lots of Greek people, I have academic friends in Greece and they say that these austerity plans are really deeply hurting the Greek people, and that the situation is simply unsustainable. So you might have to ask the question if what comes next could possibly be worse than what’s happening now.”

The biggest unknown was not a euro exit, but the chaos it would likely engender as Greece moved to a new currency, he said.

 

“If the [IMF] will not participate in a new bailout that does not include substantial debt relief, and that’s what they are saying, then that, more or less, ensures a collision course with eurozone creditors,” Malloch added, saying it was imperative that EU member states forgave a substantial part of Greece’s mountainous public debt.

 

“Now we all know that primarily [puts pressure on] Germany, which remains opposed to any such actions, so I think it suggests that Greece might have to sever ties and do Grexit and exit the euro,” he said.

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Submitted by Martin Armstrong via ArmstrongEconomics.com,

Europe could become the site of a new global war in the East as tensions build there against refugees and the economic decline fosters old wounds. The EU is deeply divided over the refugee issue and thus it is fueling its own demise and has failed to be a stabilizing force. After five days of demonstrations, Romania’s month-old government backed down and withdrew a decree that had decriminalized some corruption offenses. They were still acting like typical politicians and looking to line their pockets. After one month, the people have been rising up saying “We can’t trust this new government.”

On the eastern border of the EU, only a few hundred miles from Berlin as well as Vienna, there is a growing danger that the world will stumble into a global war. The leading cause is primarily stemming from through the incompetence of the politicians in the EU as well as in the East. The EU is more concerned about punishing Britain and trying to hold on to overpaid political jobs that to address the real issues facing Europe, while these seemingly regional disputes in the East are being ignored.

The problem with NATO has been that most members have not paid into the support of NATO that they had agreed to. The USA has been shouldering the majority of the cost of NATO, which would be like the EU funding US military. Then NATO leaders agreed back in 2016 to deploy military forces to the Baltic states and Eastern Poland for the first time and increase air and sea patrols to reassure new allies who use to be part of the Soviet bloc that they would defend them following Russia’s seizure of Crimea from Ukraine. This has merely increased the confrontations with Russia on the one hand but the Eastern countries themselves are not really aligned. The chaos inside the EU and the overreaching of NATO are the major factors inviting war. This also raises a most serious question: Exactly where does the power of NATO end and Russian power end? Effectively, where precisely is the border of influence?

This question cannot truly be answered in the midst of this chaos. Following the collapse of the Soviet Union, the agreement emerged whereby Belarus, Ukraine and Georgia were to form the buffer for Russia. NATO’s influence on the borders between Poland, the Czech Republic and Slovakia, Hungary, Romania and Bulgaria were to come to an end. Russia directly borders Estonia and Latvia, while Lithuania shares a common border with Belarus. Thereby, a meeting between the West and Russia developed in the 1990s with agreements between the EU and Moscow along with several treaties including the USA. Russia was to then enter the G7 making it now the G8. It was Obama who did his best to undo all of this.

The annexation of the Crimean peninsula by Russia in 2014 is seen as a trigger of the crisis and Russia is described as an aggressor. But Crimea was always Russian territory and it was given to Ukraine to manage back in 1954. What if Spain wanted Puerto Rico back? It is not part of the United States.

The predominant language in Crimea was Russian – not Ukrainian. Ukraine should have been split along the line of language and instead of funding military forces, offered the people to buy their property on either side who desired to move to the West or East. Instead, we have a cold war simply over territory and the people have no say. Politicians still act as if they are playing the board game RISK, but for real. This has always been about territory as if we are still living the dreams of Napoleon, Hitler, Genghis Khan, or Alexander the Great. There are people who live in these regions who are oblivious to the games politicians play. All wars are begun by politicians, ministers, or kings.

Politicians have been carving up the world for a very long time. People mean nothing. They carved up the Ottoman Empire and created the chaos of the Middle East. This is what Trump has been against – nation building. The so called “progressives” who protest against Trump would have been in the front lines of war under Hillary, who was simply keeping the game going. How many lives has it cost when politicians are so concerned over territory rather than the people living in such territories?

From 2004 onwards, NATO has sought to expand its sphere of influence beyond the bounds of peace and go right at the throat of Russia inviting World War III so they get to play with their toys. These activities were first conducted in Georgia. The President at that time was Mikhail Saakashvili from 2004 to 2013. He promoted an active pro-Western policy and was welcomed as a friend and partner of the West. At first, it was supposed to be about democracy, something the EU itself rejected in its new structure with all the power-players being UNELECTED officials, and economic cooperation with the EU and the USA. It did not take long to create the impression in Georgia that NATO would also help the country in an engagement with Russia. Then in the summer of 2008, the conflict escalated. Russia invaded Georgia and occupied the provinces of Abkhazia and Ossetia. These were dominated by Russians originally. Most people have no idea but Joseph Stalin was from Georgia.

NATO did not come to the aid of Georgia. There were no sanctions imposed for occupying Georgia as there were for the occupation of the Crimea. Why? What was the difference when Georgia was actually being solicited by the West and Crimea was not? Was it simply that Crimea was an important military base for Russia all along? It appears that the world politicians sitting at the table playing the game RISK were really just trying to end Russia’s port in the Black Sea and isolate it. That is certainly something the USA would have done in a second if the roles were reversed. The sanctions imposed against Russia were not to really protect Ukraine, but because the West was trying to take away Russia’s access to the Black Sea.

Economic cooperation with the West was accepted by Moscow under Reagan. The cold war had ended. Ronald Reagan worked hard to bring down the Berlin Wall. Why did Obama work so hard to reestablish the cold war? NATO has clearly raised hopes in Eastern Europe as they did in Georgia. Indeed, the Ukrainian crisis is in many ways a continuation of the events in Georgia. Since the “Orange Revolution” in 2004, Ukraine was seen as a knife to poke in the ribs of Russia. The pretend President Viktor Yanukovych was pro-Russia because he came from the East and spoke Russian. He could not even speak proper Ukrainian. But he and his sons sought to rule Ukraine like a Russian oligarch. Businesses had to pay protection money to even survive. The Ukrainian Revolution was real. The West’s politicians moved in to try to seize control of the new government, but the uprising was against corruption as we now see in Romania.

In November 2013, Yanukovych put a “freeze” on negotiations with the EU. As a result, the people began to rise up. The police were ruthless exploiting the people and were not there to protect the people from the State. Revolution began and since June 2014, Ukraine has sought a pro-Western course reaching treaties with the EU and with NATO. Indeed, once again, NATO gave the impression to Ukraine that it would implicitly defend it but Ukraine has not formally become a member of NATO.

The EU is no longer an economic community, but a political union that is closely linked to NATO. Most have overlooked the  Treaty of Lisbon (initially known as the Reform Treaty) which was an international agreement that amended the two previous treaties thereby creating the federalized constitutional basis of the European Union (EU) without ever putting that to a vote. The Treaty of Lisbon was signed by the EU member states on December 13th, 2007, and went into force on December 1st, 2009. This treaty has decisively altered the very core foundation of the EU transforming from 2009 onwards. This fact is always overlooked in the EU because few have read the text of the Treaty of Lisbon. Ever since, there have been closer ties between the EU which is now linked to NATO, which is why Trump says the USA should exit NATO and Le Pen is arguing the same in France. Additionally, Ukraine was given direct contracts with the EU with regard to a military alliance. This is a “soft” membership in NATO addition Ukraine but not really.

There is no way the US would give up its pacific military basis in Japan at Okinawa. Yet we impose sanction upon Russia for annexing its original territory pre-Ukraine where it maintain its Black Sea Fleet is stationed in the Crimea. The sanctions imposed upon Russia for Crimea are very hypocritical. From Russia’s perspective, the alternative would have been that Moscow’s Black Sea Fleet would be docked in a NATO country. That would present a circumstance that was totally unacceptable leaving the annexation of the Crimea a logical and obvious reaction that the USA would have done if the roles were reversed.

Ukrainian eastern region of the country remains a strategic concern. The IMF (International Monetary Fund) was willing to provide loans to Ukraine but demanding they engage Russia in the East. This demonstrated that the IMF was playing military politics – not economic. The fact that in the Eastern Ukraine is composed of Russian-speaking people, gives Moscow justification to protect its ethic citizens. This is why Ukraine should have simple been divided along the ethic lines and stop trying to poke Russia for the sake of military ambitions as was the case with Vietnam against China.

Ukraine assumes that NATO will intervene. This has not happened so far, but the danger remains that Russia could be forced into an invasion as was the case in Ukraine especially if the EU begins to break apart. Likewise, the border of Belarus against Russia also presents a potential power keg. Belarus is also now in conflict with Moscow. As in the case of Ukraine, Minsk and Moscow are also arguing about gas prices, oil supplies and disabilities in foreign trade. Additionally, Moscow imposed border controls, whereby a two-country agreement on open borders existed for twenty years. Belarus imposed a 5-day visas for citizens of 79 states, including all EU states and the US. This measure is seen in Moscow as the approach of Belarus to the West. Belarus has been courting the West with trade playing both sides of the world Russia v West.

Moreover, Belarus is now also breaking up, where border controls are apparently being carried out by Russia. We are witnessing the fragmentation of countries and governments all due to failing economic systems. We are looking at the Baltic countries opposing Russia. Estonia, Latvia and Lithuania are all full members of the EU and NATO. So where exactly does NATO end and Russian influence begins? This is becoming a very dangerous and grey area.

The new US Secretary of State Rex Tillerson may help and he was a wise choice on the part of Trump. NATO is the focus of attention right now. The military alliance is dominated by Washington yet this is actually contradictory to the Treaty of Lisbon. Donald Trump has questioned NATO as a whole, and the press do not fully explain what has evolved. Is the USA just paying the military bill for the EU yet the Treaty of Lisbon makes the NATO the national force of the EU?

The new US Secretary of State Rex Tillerson expressed it best: “Russia is dangerous, but predictable”. Tillerson does know Russia well and far better than any politician filling that role before. Tillerson could actually establish a dialogue with Russia to secure world peace. The machinations of Obama have merely ended dialogue and reestablished the cold war that took more than 30 years to thaw. Democrats are too preoccupied with trying to stop Trump and fueling protests to distract the press and the American people from the real risk of war the Obama administration has created.

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Earlier this week we wrote about the veteran Swedish police officer who, despite acknowledging that his actions might result in a pay cut, demotion and/or termination, posted an epic rant to Facebook about migrant crime in his country.  Among other things, the officer, Peter Springare, listed the crimes that he had spent the week investigating and subsequently attributed pretty much all of them to the beneficiaries of Merkel’s “open border” policies.  From his Facebook post:

“Here we go; this is what I’ve handled from Monday-Friday this week: rape, rape, robbery, aggravated assault, rape-assault and rape, extortion, blackmail, assault, violence against police, threats to police, drug crime, drugs, crime, felony, attempted murder, rape again, extortion again and ill-treatment.”

 

“Suspected perpetrators; Ali Mohammed, Mahmod, Mohammed, Mohammed Ali, again, again, again. Christopher… what, is it true? Yes, a Swedish name snuck in on the edges of a drug crime. Mohammed, Mahmod Ali, again and again.”

 

“Countries representing all the crimes this week: Iraq, Iraq, Turkey, Syria, Afghanistan, Somalia, Somalia, Syria again, Somalia, unknown, unknown country, Sweden. Half of the suspects, we can’t be sure because they don’t have any valid papers. Which in itself usually means that they’re lying about their nationality and identity.”

Now, despite an outpouring of support on social media and from fellow officers, Springare is being investigated for a “hate crime”, to our complete shock, of course.  According to Breitbart London, Maria Sterup, chief prosecutor of the Special Prosecution Office in Malmö, will be reviewing Springare’s Facebook post which, if found to be criminal, could result in his dismissal.

But now the department of internal investigations is probing Mr. Springare for incitement to racial hatred as a result of the post, police have confirmed.

 

Communications officer at Örebro police, Anders Sjöberg, said the police officer will continue to work until the investigation is concluded. If Mr. Springare’s Facebook activity is found to be criminal, his position in the police will be reviewed, Bergslagen human resources manager Olov Augrell told SVT.

 

“It is a crime in the Criminal Code so I decided to start a preliminary investigation”, said Maria Sterup, chief prosecutor of the Special Prosecution Office in Malmö.

Of course, Springare isn’t the first Swedish cop to speak up about migrant crime.  Mikaela Kellner, Sweden’s now infamous “bikini cop”, announced her resignation back in December saying that she didn’t “think that personnel were being treated fairly, as they should.”

I bet this guy was trying to get caught. Bikini-clad Swedish cop makes arrest while sunbathing https://t.co/EuxnrYpis2

— Neil Combee (@NeilCombee) August 6, 2016

 

Though Kellner didn’t specifically mention it, many attributed her departure to Sweden’s police force being plagued by understaffing and a rapid rise in violent crime that seemingly corresponded with the arrival of thousands of migrants from the Middle East and Northern Africa.  The level of violence within certain areas rose to such a level that police abandoned efforts to control the streets, leading to the establishment of 55 “no-go zones” (something we discussed in further detail here:  “Sweden Creates 55 “No-Go Zones” As It Loses Control Of Refugee Crisis“).

But we’re sure it’s nothing…just a bunch of cops who suddenly became xenophobic hatemongers right around the same time, by pure coincidence of course, that a bunch of foreign migrants showed up and started plowing trucks through crowded public squares and blowing up buildings.

* * *

For those who missed our post earlier this week about Springare’s Facebook rant, here it is:

A Swedish police officer recently offered up a little more truth than people are used to when he posted an epic rant on Facebook about immigrant crimes plaguing his police department and his country.  In the beginning of the post, the police officer said that he was “so fucking tired” and warned that “what I will write here below, is not politically correct.”  With that warning, below is brief taste of what followed courtesy of RT:

“Here we go; this is what I’ve handled from Monday-Friday this week: rape, rape, robbery, aggravated assault, rape-assault and rape, extortion, blackmail, assault, violence against police, threats to police, drug crime, drugs, crime, felony, attempted murder, rape again, extortion again and ill-treatment.”

 

“Suspected perpetrators; Ali Mohammed, Mahmod, Mohammed, Mohammed Ali, again, again, again. Christopher… what, is it true? Yes, a Swedish name snuck in on the edges of a drug crime. Mohammed, Mahmod Ali, again and again.”

 

“Countries representing all the crimes this week: Iraq, Iraq, Turkey, Syria, Afghanistan, Somalia, Somalia, Syria again, Somalia, unknown, unknown country, Sweden. Half of the suspects, we can’t be sure because they don’t have any valid papers. Which in itself usually means that they’re lying about their nationality and identity.”

The Facebook post was published by Peter Springare, a senior investigator at the serious crimes division at the Örebro Police Department with 47 years under his belt.  Springare noted that what he had to say could harm an officer’s position and/or pay grade which is why most officers never speak out. 

And here is a loose translation of the full post from Facebook that has been shared over 17,000 times in a matter of days:

 

Not surprisingly, Springare’s rants ignited an immediate national firestorm with supporters applauding his courage for speaking up while others blasted his rant as racist and xenophobic. 

People supporting Springare’s rant started a group on Facebook that quickly amassed over 75,000 members including several of his fellow police officers.  Meanwhile, according to news website Nyheter Idag, the police station where Springare works received at least 60 bouquets of flowers addressed to him on Monday – a “bloombomb” from admirers.

 

Of course, not everyone was thrilled with Springare’s post, with at least one person referring him to the special prosecutors’ office for an official investigation into whether he violated police regulations. 

Others were not happy with the investigator’s remark, calling him right-wing or even racist. The post was referred to the special prosecutors’ office, which handles crimes involving law enforcement, to see whether it violated police regulations, according to Swedish media.

 

National Police Commissioner Dan Eliasson said that it was important to distinguish what an officer does in the line of duty and outside of it.

 

“When he acts in his professional capacity, he should be extremely careful with issues of ethnicity. If he wants to talk about the problems of crime among immigrants in his spare time, he has freedom of expression like any other,” he told P4 Extra radio, adding that he knows Springare as a “very good person.”

 

In a second post, Springare denied accusations of right-wing sympathies.

 

“If you can’t discuss the problem of crime among immigrants without somebody attributing it to racist propaganda, we are in deep trouble,” he said. “The problem is that nobody wants to talk about this.”

Turns out the U.S. isn’t the only place where providing actual facts/statistics about crime can result in a person being labelled a racist.

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Submitted by Mike Shedlock via MishTalk.com,

Australians’ private debt has soared to 187 per cent of their income. Debt is up from about 70 per cent in the early 1990s.

The jobless rate rose for the second straight month in December to 5.8 per cent, and underemployment, the number of workers wanting more hours, is near an all-time high. Wage growth is the lowest on record.

Australia has one of the world’s biggest property bubbles. In some sections of the country, prices are already under severe price pressure. The entire country will soon face that problem, at least in my opinion.

The Financial Review reports There’s $1 trillion of Australian Mortgages and Some Now Worry of What’s Next

The Reserve Bank of Australia frequently seeks feedback on the health of the economy. It might want to call the debt counsellors soon.

 

Homeowners, consumers and property investors around Australia are making more calls to financial helplines as three warning signs back up the spike in demand: mortgage arrears are creeping up, lenders’ bad debt provisions have increased and personal insolvencies are near an all-time high.

 

“It’s steadily out of control — I don’t know of too many financial counselling services where demand doesn’t exceed supply,” said Fiona Guthrie, chief executive officer of Financial Counselling Australia, who says the biggest increase in calls is from people suffering mortgage stress. “There are more people who have got mortgages that they can’t afford to pay.”

 

Australia’s households are among the world’s most-indebted after bingeing on more than $1 trillion of mortgages amid a housing boom that’s fizzled out in parts of the country, but still roaring in Sydney and Melbourne.

RBA governor Philip Lowe places financial stability at the forefront of monetary policy.

 

The concerns are understandable. Australians’ private debt has soared to 187 per cent of their income, from about 70 per cent in the early 1990s, encouraged by low interest rates. In a November speech, Lowe said that while most households are managing these levels of debt, many feel they are closer to their borrowing capacity than they once were.

 

Knocking out the wind

“There’s so much household debt that a couple of rate hikes here would completely knock the wind out of the housing market, and a lot of people would be impacted by it,” said Gareth Aird, economist at Commonwealth Bank of Australia, the nation’s largest lender. That’s partly why he doesn’t think the RBA will lift rates until 2018 at the earliest.

 

Lenders are watching these indicators as closely as the RBA. After a seven year bull-run, annual cash earnings at Australia’s big four banks fell last year for the first time since the financial crisis, said PricewaterhouseCoopers. At the same time, their bad debt expenses – which encompass both business and consumer lending – jumped 39 per cent to $5.1 billion, the highest since 2012.

 

But the hardest indicator to track may be borrowers worried about making their next repayment. Counsellors at the National Debt Helpline deal with such problems and are now even getting calls from property investors, said Guthrie. In the last quarter of 2016, phone calls to the service jumped 12 per cent on the previous year to an average 11,079 per month, she said. That’s double the rate of increase of the same period a year earlier.

 

Time to panic?

It’s not time to panic. Banks’ losses still remain small by historical standards and are largely confined to mining areas, according to PwC. Some 77 per cent of customers at Commonwealth Bank were ahead on their mortgage payments as at June; the lender is likely to update those figures next week. The RBA also noted in November that borrowers have set aside funds tied to their mortgages equivalent to 17 per cent of outstanding balances.

Key Phrase: “Not Time To Panic”

When credit stress starts, and central banks and media analysts say "it's not time to panic", it's likely a fine time to panic.

— Mike Mish Shedlock (@MishGEA) February 8, 2017

The #1 rule of panic is simple: Panic before everyone else does.

Those thinking of buying a house in Australia now are out of their freaking minds. Yes, I have been saying this for quite some time. And many can point to profits. But those profits are all on paper. Try selling. It’s impossible for everyone to cash out.

Those who place their homes on the market now, with aggressive below-market pricing, will likely be able to find suckers. Those who think it’s too early to panic will likely to be trapped down the road.

Home are illiquid. It’s seldom too early to panic.

When selling real estate, it’s a catastrophe to panic after the panic has already started.

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