IMF Scraps Forecast for Global-Growth Pickup on Brexit Fallout

Following on from the Brexit vote last month the IMF have decided to re-evaluate their forecast for global growth.

Bloomberg  reports that they have revised their original 3.2% forecast down to 3.1% for 2016 and from 3.5% to 3.4% for 2017. While these feel like very modest revisions ,the IMF would not be known for radical changes of direction preferring slow and steady revisions.

Their new forecast is based on the assumption that British and EU officials reach new trade agreements that avoid a “large increase in economic barriers.” However, if talks break down, Britain will slip into recession as more financial institutions relocate to the euro area and consumption and investment contract more than expected, the fund said. In a “severe” scenario, global growth is seen sliding to 2.8 percent this year and next.

You can read the full article here 

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Gold and Silver Bullion – News and Prices

Gold steady as rally in equities loses steam (Reuters)

Gold futures notch a nearly 1-week high (Marketwatch)

Gold Daily and Silver Weekly Charts (24hgold)

Gold Miners Set to Relax Death Grip on Spending as Caution Eases (Bloomberg)

Recession coming? Here’s how to find out (Marketwatch)

After Brexit, ordinary Britons warm to gold as safe haven (Reuters)

This is all you need to know about gold right now: it’s a bull market (Moneyweek)

Gold Prices (LBMA AM)

20 July: USD 1,325.60, EUR 1,204.308 & GBP 1,005.865 per ounce
19 July: USD 1,332.20, EUR 1,203.376 & GBP 1,009.042 per ounce
18 July: USD 1,326.15, EUR 1,200.298 & GBP 1,000.050 per ounce
15 July: USD 1,330.50, EUR 1,194.789 & GBP 994.150 per ounce
14 July: USD 1,325.705, EUR 1,192.99 & GBP 1,001.96 per ounce
13 July: USD 1,340.25, EUR 1,211.45 & GBP 1,009.74 per ounce
12 July: USD 1,352.85, EUR 1,217.84 & GBP 1,029.11 per ounce

Silver Prices (LBMA)

20 July: USD 19.70, EUR 17.88 & GBP 14.95 per ounce
19 July: USD 19.99, EUR 18.07 & GBP 15.18 per ounce
18 July: USD 19.72, EUR 17.83 & GBP 14.89 per ounce
15 July: USD 20.14, EUR 18.08 & GBP 15.06 per ounce
14 July: USD 20.25, EUR 18.23 & GBP 15.15 per ounce
13 July: USD 20.29, EUR 18.31 & GBP 15.25 per ounce
12 July: USD 20.35, EUR 18.35 & GBP 15.47 per ounce

Recent Market Updates

– Gold Holds Near Two-Week Low as Risk Appetite Rises on U.S. Data
– Gold, Trump and Rates: Bank That Foresaw Rally Flags $1,500
– Gold Lower After Central Bank’s Surprise Move
– “We Are On the Cusp of an Explosion in the Silver Price” – John Embry

– Stocks Rally – Is Brexit Systemic Risks Contained?
– Britain has a new prime minister – here’s what that means for you
– Metals Caught Between Global Gloom, U.S. Job Gains as Gold Slips
– Central Bank Resumes Monthly Gold Buying in Bid to Diversify Reserves
– Property Fund Turmoil in the UK has Eerie Echoes of Bear Stearns
– “In Gold We Trust” Annual Report – New Bull Market “Emerging”
– 3 Charts Show “How Precious Brexit Is” for Gold and Silver Bullion
– Gold, Silver Best Performing Assets In H1, 2016 – Up 26% & 38%

 

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IMF Called “Clowns” After Admitting They Fabricated Brexit Doom And Gloom

"The IMF has serious credibility problems. It has been seriously wrong for years. I hope that one of the things that the new government does is push to have some credible people running this institution… rather than the clowns currently running it," exclaimed UKIP MP Douglas Carswell, pointing out Lagarde's legion of fools flip-flop that the British economy will grow faster than Germany and France in the next two years – only weeks after its doom-laden warnings about Brexit.

As The Daily Mail reports, after saying that leaving the European Union could trigger a UK recession, the International Monetary Fund now expects the British economy to grow by 1.7 per cent this year and 1.3 per cent next year.

That is weaker than the 1.9 and 2.2 per cent growth forecasts before the referendum, but the UK is still set to be the second-fastest growing economy in the Group of Seven industrialised nations this year – behind the United States – and third-fastest next year, behind the US and Canada.

Of course, this is not the first time The IMF has unleashed comedic genius on the world

 

But the new UK forecasts represent a climbdown for the global financial watchdog after it issued a string of doom-laden warnings over the damage Brexit would do.

Ahead of the referendum, IMF managing director Christine Lagarde, an ally of former chancellor George Osborne, said Brexit would be ‘pretty bad, to very, very bad’ for the UK.

 

But the latest forecasts – and an admission that a recession is now unlikely – suggest the outlook is not as bleak as the watchdog claimed.

And again, as The Mail notes, it is not the first time the IMF has had to row back from damaging comments about the UK economy. In April 2013, the fund’s then chief economist Olivier Blanchard said Britain was ‘playing with fire’ by pressing ahead with austerity at a time of ‘very low growth’. But the IMF was quickly forced into a dramatic volte face as the UK economy sprang into life, forcing Mrs Lagarde to admit ‘we got it wrong’.

The IMF’s new chief economist Maury Obstfeld said yesterday there were ‘promising signs’ for the global economy in the first half of 2016, but added: ‘Brexit has thrown a spanner in the works.’

 

John Longworth, who was ousted as director general of the British Chambers of Commerce after backing Brexit, said: ‘Talk of Armageddon seems to be receding.

 

‘This is not surprising. If the Government adopts the right policies, we will be in a position where all the doom and gloom that was predicted simply disappears.’

 

A Treasury spokesman said: ‘Our country remains open for business. We are the same outward-looking, globally-minded, big-thinking country we have always been.’

Still, we are sure The IMF's new forecast will be spot on this time and the mainstream media will spin it as gospel enough reason to buy stocks…

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Wikileaks Is About To Expose The Turkish ‘Coup’, But Someone Is Trying To Silence Them

Submitted by Carey Wedler via TheAntiMedia.org,

Wikileaks claimed Monday it was under attack after it announced it would release hundreds of thousands of documents related to Turkey and the failed military coup attempted Friday, CNET reported.

The organization, which has released information on everything from war crimes to Hillary Clinton’s email scandal, announced Sunday it would be releasing 100,000 documents related to Turkey’s “political power structure,” some of which detail the “leadup” to the coup.

 

Wikileaks anticipated the release would be censored in Turkey, cautioning in a three-part tweet posted Monday:

Turks will likely be censored to prevent them reading our pending release of 100k+ docs on politics leading up to the coup. We ask that Turks are ready with censorship bypassing systems such as TorBrowser and uTorrent and that everyone else is ready to help them bypass censorship and push our links through the censorship to come.

 

The Turkish government, headed by President Recep Tayyip Erdogan, has increasingly ramped up censorship efforts against journalists, lending credibility to Wikileaks suspicions their release may not fully reach Turkish citizens—especially considering the latest leak concerns his ruling party, AKP.

As CNET noted:

Facebook, Twitter and YouTube were reportedly blocked in Turkey during the attempted coup Friday, but many residents appear to have gotten around the blocks, posting messages and videos, likely using VPNs or other anonymizing services.”

Throughout Monday, Wikileaks continued to promote the release.

They then tweeted that instead of 100,000 documents, they would actually be releasing far more. “Our pending release of 100k docs on Turkish political power? Just kidding. The first batch is 300k emails, 500k docs,” they announced.

But just hours later, they alerted followers their website was being attacked. “Our infrastructure is under sustained attack,” they tweeted, alongside the hashtag, #TurkeyPurge.

 

We are unsure of the true origin of the attack. The timing suggests a Turkish state power faction or its allies. We will prevail & publish,” Wikileaks tweeted shortly after.

 

An hour later, the organization remained resolute in its determination to publish the hundreds of thousands of documents. “Coming Tuesday: The#ErdoganEmails: 300 thousand internal emails from Erdo?an’s AKP – through to July 7, 2016,” they tweeted.

After tweeting further about the ongoing cyber attacks, Wikileaks eventually announced Tuesday they had released the first installment of emails, which can be viewed here. The emails are from the server of the AKP.

 

The failed military coup in Turkey over the weekend heightened tensions within the country, where President Erdo?an has grown increasingly autocratic. The Turkish government has also been implicated in the rise of ISIS and has been accused of allowing fighters to cross through their borders and providing them with medical assistance.

The coup, which continues to be mired in uncertainties, accusations, and conflicting reports, left Turkish citizens between a rock and a hard place—a military coup or an increasingly oppressive democratically-elected leader who has now overseen 50,000 suspensions or detainments of government employees regarding the military’s failed attempt to seize power.

It seems Wikileak’s release of information on Turkish power structures could not come at a more vital time—that is, so long as it reaches the Turkish people.

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Morgan Stanley Beats Despite 9% Drop In Revenue. Helped By Cost-Cutting, Strong FICC; Shares Jump

Following the example set by the other banks, earlier today Morgan Stanley, the last big bank to report earnings,  said its profit fell 12% in Q2 on a 9% drop in revenue even as the company weathered volatile markets that affected its investing and corporate clients. The EPS of $0.75, however, beat sharply lowered expectations of $0.60 on the back of sharp cost-cutting measures, pushing its shares up 3% in the premarket.

Net income declined to $1.58 billion, or 75 cents a share, from $1.81 billion, or 85 cents a share, a year ago. Revenue tumbled 8.6% to $8.91 billion. The results come a day after Goldman Sachs, Morgan Stanley’s great Wall
Street rival, also disclosed a worse-than-expected performance from its
equities unit.

Morgan Stanley’s own trading revenue down 7.1% to $3.26 billion from $3.5 billion a year ago, but when excluding an accounting adjustment, trading revenue fell 2%.  Investment-banking revenue fell 23% to $1.11 billion from $1.44 billion in the second quarter of 2015. Fees from advising on mergers and other deals rose 17% to $497 million from $423 million a year ago. Revenue on stock and bond underwriting slipped 40% to $611 million from $1.02 billion in the same period a year prior. This, however, was a solid beat to expectations with MS outperforming consensus in virtually every category, with particular strenght in FICC. 

  • Trading revenue  $3.45BN vs est. $3.12BN
  • FICC $1.30BN vs est. $1.01BN
  • Equities $2.15BN vs est. $2.11BN
  • I-banking $1.22BN vs est. $1.10BN

CEO James Gorman said that the bank’s results were a reflection of “solid performance in an improved but still fragile environment. In the midst of market uncertainty, we maintained our leadership positions across our core franchises and continued our focus on prudent risk management and judicious expense control.”

According to the FT, the drop in equities is likely to worry Mr Gorman, who last year reshuffled the bank’s trading businesses to promote equities veterans – including Ted Pick, head of global equities since 2011, who now runs global sales and trading for both equities and bonds. Six years ago Mr Gorman set out to cut the FIC unit down to size, in order to achieve a better balance between volatile income streams from trading and stickier, annuity-like revenues from wealth and asset management. That effort was a failure, he conceded in January, as he detailed more cuts to FIC and pushed back the bank’s main profitability target — a 9-11 per cent return on equity — to the end of 2017.

Over the past year the bank has cut about a quarter of the people dedicated to the bond-trading business around the world. It says it plans to reduce assets in its fixed-income and commodities business to $120bn or below by the end of next year, from $136bn at the end of last year.

As WSJ adds, Gorman has been working to boost profitability by trimming the capital committed to bond trading desks and boosting loans to investing clients of the firm’s large wealth management division. Earlier this year, the firm also disclosed its aim to cut $1 billion in expenses, a theme that has gained momentum at banks from Goldman Sachs Group Inc. to Bank of America Corp. this quarter.

Just like in the case of Goldman, Morgan Stanley slashed overhead and firmwide expenses fell 8.4% to $6.43 billion from $7.02 billion in the second quarter last year. Cost from employee pay and benefits fell 8.9% to $4.02 billion from $4.41 billion. Return on equity declined to 8.3% from 9.1% in the second quarter of 2015. Morgan Stanley executives have pledged to lift returns to 9%-11%.

Morgan Stanley shares have tumbled 11% this year as investors fretted over the firm’s ability to weather the slowdown. Other banks reported better-than-expected trading results in the second quarter, driven in part by a burst of client activity around the U.K. vote to leave the European Union in June.

It appears that Brexit was actually a boon to banks, not the bust it was widely predicted to be.

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Frontrunning: July 20

  • Trump Goes on Offense as Republicans Try to Move Past Missteps (BBG)
  • Trump could seek new law to purge government of Obama appointees (Reuters)
  • Behind the scenes, Ryan touts his agenda in Cleveland, not Trump’s (Reuters)
  • U.S. Set to Seize $1 Billion in Assets Tied to Malaysian Fund 1MDB (WSJ)
  • 21st Century Fox Negotiating Exit of Fox News Chief Roger Ailes (WSJ)
  • Turkey Bonds Sink as JPMorgan Sees Moody’s Cut Draining Billions (BBG)
  • French lawmakers back emergency rule after Nice attack, inquiry demanded (Reuters)
  • New UK finance minister Hammond to face Brexit grilling at G20 (Reuters)
  • Inside the High-Profile Downfall of a $8 Billion Hedge Fund (BBG)
  • U.S. says its forces will keep operating in South China Sea (Reuters)
  • Judge Denies Lawsuit Shield for Gawker’s Nick Denton (WSJ)
  • Lessons in Bond Math: Less Than 1% Chance U.S. Yields Reach 1.1% (BBG)
  • PIMCO hires Man Group CEO Manny Roman as its new chief (Reuters)
  • Russia Dominates Wheat Market as Soggy Fields Push Out France (BBG)
  • Elon Musk wages war on too many fronts (Reuters)
  • Are Americans Finally Getting Smarter About Money (BBG)
  • Brazil’s Goldfajn Confronts Tough Balancing Act at Debut Meeting (BBG)
  • There She Is — New Jersey Bestows Public Cash on Miss America (BBG)

 

Overnight Media Digest

WSJ

– The Republican Party officially picked Donald Trump as its presidential nominee, the most unconventional candidate in modern times and a political novice who has repeatedly broken with party orthodoxy and political protocol. http://on.wsj.com/2a7NpXq

– Twenty-First Century Fox Inc is negotiating the exit of Fox News chief Roger Ailes following a sexual harassment lawsuit filed by a former network anchor. http://on.wsj.com/2a7NxX9

– Goldman Sachs Group Inc, long the pre-eminent trader and risk manager on Wall Street, detailed staff cuts Tuesday that could have come from just about any Main Street bank. http://on.wsj.com/2a7NVVq

– Unilever Plc, the European consumer products giant behind Dove soaps and Axe body sprays, said late Tuesday it was acquiring the Venice, California-based startup Dollar Shave Club. Terms weren’t disclosed, but people familiar with the matter said Unilever is paying $1 billion in cash. http://on.wsj.com/2a7OoqA

– Volkswagen AG’s emissions cheating spanned more than a decade and stemmed from deliberate efforts by dozens of employees to mislead regulators and consumers about diesel-powered vehicles, according to a lawsuit alleging fresh details. http://on.wsj.com/2a7Os9L

– Gawker Media founder and chief executive Nick Denton appears to be headed for bankruptcy after a federal judge declined to shield him from a legal battle with former wrestler Hulk Hogan and his billionaire backer. http://on.wsj.com/2a7OAGz

 

FT

*The head of England’s National Health Service, Simon Stevens, has called on the government to assure that more than 130,000 staff from the EU working in health and social care will be allowed to remain in the UK post-Brexit.

*With consumer price inflation increasing to 0.5 percent in the year to June – before the Brexit vote and the fall in sterling – British households are facing a freeze in living standards.

*The International Monetary Fund has cut its guidance for the UK economy next year after Britons voted to leave the EU, and warned the decision has thrown a “spanner in the works” for global growth.

*UK MPs on the culture, media and sport select committee said in a report that the telecom provider BT needs to improve service levels or face a break-up of its business.

 

NYT

– Twitter barred Milo Yiannopoulos, one of the most egregious and consistent offenders of its terms of service, in an attempt to show that it is cracking down on abuse. http://nyti.ms/29TrQqz

– After a lawsuit was filed against high-speed train start-up Hyperloop One, accusing some of its top figures of harassment and mismanagement, the company sued the plaintiffs in the original case accusing the four men – one of whom is a company co-founder – of trying to start a competing venture and to poach employees to do so. http://nyti.ms/29U6SJa

– A Brazilian judge in a state criminal court in Rio de Janeiro, ordered a nationwide shutdown of WhatsApp after the messaging service, owned by Facebook, did not turn over user data requested by authorities as part of a criminal investigation. Brazil’s Supreme Court overturned the order in a few hours. http://nyti.ms/2asNvYH

– Microsoft, in its quarterly earnings, offered strong signs that its cloud business was growing quickly. Revenue from Azure, a business Microsoft started to compete in cloud computing with Amazon, the market leader, rose more than 100 percent in the quarter. http://nyti.ms/29SNuSa

 

Britain

The Times

IMF cuts growth forecasts for Britain after Brexit vote

The International Monetary Fund has cut its growth forecasts for the UK and the global economy following the vote to leave the European Union. IMF called the Brexit vote a risk for the entire world economy and said that there will be a “substantial increase in economic, political, and institutional uncertainty,” especially in Europe. (http://bit.ly/2a7lZ4a)

The Guardian

Volkswagen sued in three U.S. states over diesel emissions cheating

Three U.S. states are suing Volkswagen AG alleging that bosses knew the automaker’s cars had been engineered to cheat U.S. pollution tests and had concluded that “breaking the law and risking the imposition of fines was an acceptable cost of doing business.” New York, Massachusetts and Maryland have filed lawsuits alleging that former VW Chief Executive Martin Winterkorn and other top executives were involved in a campaign of “systematic cheating and deception” to mislead US regulators over the emissions of its diesel cars. (http://bit.ly/29TE5Ek)

Store Twenty One to axe hundreds of jobs as it shuts nearly 80 shops

Hundreds of workers are to lose their jobs as the lossmaking fashion chain Store Twenty One prepares to close nearly 80 shops as part of a rescue deal with landlords. (http://bit.ly/29LVn6O)

The Telegraph

SABMiller board to discuss investor opposition to AB InBev deal

SABMiller directors will on Wednesday discuss mounting frustration among some of the FTSE 100 brewer’s shareholders with the terms of its 77 billion pound takeover by rival Anheuser-Busch InBev. (http://bit.ly/2aeSGiB)

Sky News

Fidelity Chief Backs May’s Pay Crackdown

One of the City’s top investors is to come out in support of Theresa May’s plan for a crackdown on City pay that will give investors a binding annual vote on big boardroom reward packages. Dominic Rossi, the chief investment officer at Fidelity International, will declare on Wednesday that the new prime minister’s proposal will “add significant momentum to efforts to better align…rewards with shareholder interests.” (http://bit.ly/29YjpxQ)

Struggling Co-op Bank Shakes Up City Advisers

The Co-operative Bank is shaking up its relationship with City advisers as the troubled lender prepares for an overhaul of its top executives. Co-op Bank is close to hiring investment bankers to help steer it through the next phase of a turnaround plan which began soon after its near-collapse three years ago. (http://bit.ly/2asa5kc)

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In Surprising Move, Twitter Permanently Bans Conservative Commentator Milo Yiannopoulos

On Tuesday night, in a surprising move, Twitter permanently banned conservative commentator Milo Yiannopoulos from using its service. Yiannopoulos, an editor for prominent conservative website Breitbart.com, has been known for making provocative statements on Twitter and elsewhere.

Twitter said the suspension was part of a wider move to block a number of user accounts for abuse and harassment after Ghostbusters actor Leslie Jones on Monday drew renewed attention to the issue and announced she would quit the social media site.

Jones retweeted and shared several abusive tweets she received Monday before telling her 250,000 followers: “I leave Twitter tonight with tears and a very sad heart. All this cause I did a movie. You can hate the movie but the shit I got today… wrong.” Jones shared some of the racist tweets targeted toward her, many of which compared her to an ape. User YellowArmedImposter wrote, “Your Ghostbusters isn’t the first to have an ape in it,” which Jones shared with the comment: “I just don’t understand.” Jones, who is also a regular cast member on Saturday Night Live, publicly pondered over several tweets what would prompt people to “spew hate.”

“I used to wonder why some celebs don’t have Twitter accts now I know,” she wrote in one tweet. In a separate post, she added: “Twitter I understand you got free speech I get it. But there has to be some guidelines when you let spread like that.”

Among those banned Tuesday was Breitbart tech editor Milo Yiannopoulos, who has been a controversial figure on the site and helped lead the abuse against Jones. Yiannopoulos did not immediately respond to a request for comment.

Twitter said in a statement Tuesday that it had seen an “uptick” in the number of accounts violating its abuse and harassment policies over the past 48 hours, noting it had enforced its policies either by issuing warnings or permanently suspending users. “We know many people believe we have not done enough to curb this type of behavior on Twitter. We agree,” Twitter said in the statement. “We are continuing to invest heavily in improving our tools and enforcement systems to better allow us to identify and take faster action on abuse as it’s happening and prevent repeat offenders.”

“People should be able to express diverse opinions and beliefs on Twitter,” said a Twitter official in a statement. “But no one deserves to be subjected to targeted abuse online, and our rules prohibit inciting or engaging in the targeted abuse or harassment of others.”

“We have been in the process of reviewing our hateful conduct policy to prohibit additional types of abusive behavior and allow more types of reporting, with the goal of reducing the burden on the person being targeted,” the official said. “We’ll provide more details on those changes in the coming weeks.”

According to the Hill, a Twitter spokesperson did not respond to a question about what policy violation specifically led to Yiannopoulos’s suspension.

While Yiannopoulos did not immediately respond to a Hill request for comment, told Breitbart that “this is the end for Twitter.” “Anyone who cares about free speech has been sent a clear message: you’re not welcome on Twitter,” he said.

In a comment, Milo said “With the cowardly suspension of my account, Twitter has confirmed itself as a safe space for Muslim terrorists and Black Lives Matter extremists, but a no-go zone for conservatives.”

“Twitter is holding me responsible for the actions of fans and trolls using the special pretzel logic of the left. Where are the Twitter police when Justin Bieber’s fans cut themselves on his behalf? Like all acts of the totalitarian regressive left, this will blow up in their faces, netting me more adoring fans. We’re winning the culture war, and Twitter just shot themselves in the foot.”

He is scheduled to appear at an event linked to the Republican National Convention in Cleveland on Tuesday night.

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US Futures Rise To Session Highs, Set For Another Record Open; Global Stocks Jump

After yesterday’s positive close in the Dow Jones, which hasn’t had a losing day since July 7 and which took the series of consecutive green closes to 8 in a row – the longest stretch since 2013 – the index will look to lock in its 9th green day in a row with futures currently trading well in the green. It’s not just the US – equities edged higher in Asia and Europe as positive earnings results from some of the world’s biggest companies countered concern the global economy is losing steam. The dollar strengthened while gold retreated.

The MSCI All Country World Index held near an eight-month high as a gauge of Hong Kong shares was poised to enter a bull market. The yuan had its biggest intra-day jump in a month on speculation the PBOC won’t allow the critical 6.70 barrier to be breached, even as rising odds of a U.S. interest-rate lifted the Bloomberg Dollar Spot Index to its highest since May. Oil extended losses below $45 a barrel as gold dropped to this month’s low. The Turkish lira advanced, after earlier sinking to within 0.5 percent of it weakest level on record, before Turkey’s president makes an announcement in the wake of a failed coup.

A three-week run that’s boosted the combined worth of global shares by more than $4.5 trillion has pushed valuations to the highest level in 11 months. Investors are assessing corporate earnings amid concern sluggish global growth will persist after the International Monetary Fund scrapped its forecast for a pickup in the pace of expansion this year. Goldman Sachs Group Inc. and Microsoft Corp. on Tuesday announced quarterly profits that surpassed analysts’ estimates, something achieved by 77% of the S&P 500 members to have reported so far.

“The rally is losing some momentum as the reporting season heats up,” said Niv Dagan, executive director at Peak Asset Management LLC in Melbourne. “We’re staying cautious and taking a little bit of profit off the table. With the equity rebound stalling, we are really looking for positive momentum from the reporting season” for the next leg up in stocks, he said.

While the reason behind the recent relentless rally remains mostly elusive, with the median stock according to Goldman now trading in its 99% valuation percentile, some have noted familiar catalysts: “expectations for more stimulus has been supportive of equities,” Angus Nicholson of IG Markets told Bloomberg. “Asian markets have been resilient as they’ve been benefiting from capital inflows since the Brexit vote. Hong Kong has been one of the most unloved markets here so it’s catching up. It’s very cheap.”

Following a lackluster Asian session, which saw the MSCI Asia Pacific Index gain 0.1% after earlier falling as much as 0.4%  with the MSCI Hong Kong Index rising 0.8% and has now rebounded more than 20 percent from a three-year low recorded in January, Europe started off on the right foot, with Stoxx Europe 600 up 0.9%, after falling 0.4% in the last session.  BHP Billiton Ltd. dropped 2.9 percent in Sydney after the world’s biggest mining company said iron-ore production fell 7 percent from a year earlier during the last quarter. Futures on the S&P 500 Index were 0.4% higher after the U.S. gauge slipped from an all-time high in the last session. The Dow Jones Industrial Average advanced for an eighth day, its longest rally in three years, and Microsoft rallied in after-hours trading following the release of its results.

In a session with little economic data, all eyes will be on today’s earnings with Morgan Stanley, Intel and American Express among U.S. companies announcing results on Wednesday.

Market Snapshot

  • S&P 500 futures up 0.4% to 2166
  • Stoxx 600 up 0.9% to 340
  • FTSE 100 up 0.4% to 6726
  • DAX up 0.7% to 10049
  • German 10Yr yield down 1bp to -0.04%
  • Italian 10Yr yield up less than 1bp to 1.24%
  • Spanish 10Yr yield down less than 1bp to 1.19%
  • S&P GSCI Index up less than 0.1% to 355.4
  • FTSE 100 up 0.4% to 6726
  • DAX up 0.7% to 10049
  • German 10Yr yield down 1bp to -0.04%
  • Italian 10Yr yield up less than 1bp to 1.24%
  • Spanish 10Yr yield down less than 1bp to 1.19%
  • S&P GSCI Index up less than 0.1% to 355.4
  • MSCI Asia Pacific up less than 0.1% to 134
  • US 10-yr yield up less than 1bp to 1.56%
  • Dollar Index up 0.1% to 97.16
  • WTI Crude futures up less than 0.1% to $44.66
  • Brent Futures up 0.4% to $46.83
  • Gold spot down 0.4% to $1,327
  • Silver spot down 0.7% to $19.77

Top Global Headlines

  • Pimco Names Man Group’s Chief Emmanuel Roman as Its New CEO: Roman to replace Doug Hodge, Man Group names Luke Ellis as CEO
  • U.S. Seeks to Seize $1 Billion Assets Tied to 1MDB, NYT Says: Asset seizure may be largest confiscation by Justice Dept
  • Unilever to Buy Dollar Shave in Deal Said Valued at $1 Billion: Dollar Shave founder, CEO Dubin to remain at helm of company
  • Fox Said to Be Negotiating Exit Terms With News Chief Ailes: Talks follow filing of sex harassment case against executive
  • PBOC Seen Overriding Yuan Market Moves to Limit Depreciation: Currency rises most in two weeks on bets China defending 6.7
  • KKR’s Kravis Sees Market Volatility Amid Negative Rates, Brexit: Predicts 20% of London’s financial sector to leave city
  • Trump Goes on Offense as Republicans Try to Move Past Missteps
  • Musk Expects Majority of Holders to Support SolarCity Deal: WSJ
  • Investors Said to Pull $600m From Ackman Funds in 1H: Fortune
  • Brazil’s Supreme Court Overturns WhatsApp Ban
  • Amazon June Comp Sales Up 11.6%, Ebay Up 3.8%: ChannelAdvisor

Looking at regional markets, we start in Asia which traded lower for much of the session, amid a lack of tier-1 data and key speakers in the region, following the choppy trade seen across US indices. Nikkei 225 (-0.2%) suffered from a delayed reaction to its Asian counterparts and caught up with losses following the country’s long weekend, however did find some support and is off its worst levels, as a firmer JPY weighed on exporters. Conversely, ASX 200 (+0.7%) took the impetus from a lacklustre open trade in the green, despite gains being capped by the materials sector after BHP missed on iron ore output estimates. Elsewhere, China’s Hang Seng (+1.0%) is underpinned by broad based gains across the index and saw property developers buoyed by measures to boost borrowing, while significant gains continued to be stifled in the Shanghai Comp (-0.3%) following another mild liquidity injection. Finally, 10yr JGBs traded with slightly higher despite the absence of risk-appetite in Japan whilst a JPY 1.1trl JGB auction saw lower than prior laic and a lower average yield.

Asian Top News

  • Singapore Seeks U.S. Chapter 11 Prowess in Bankruptcy Reform: Includes automatic stay, pre-pack and super-priority lien
  • Fastest-Growing India Fund Says RBI Dove Needed to Sustain Rally: Global holdings of rupee-denominated bonds have jumped in July
  • China’s Curious Craze for Stock Dividends Survives Market Slump: >200 Shenzhen firms have announced stock payouts
  • Emerging Currencies Weaken in Asia on Global Growth Concern: Turkish lira approaches record low as post-coup purge expands

European equities trade in the green this morning (Euro stoxx +1.2%) with price action largely initially dictated by the latest spate of earnings, most notably from the likes of SAP (4.5%) which has subsequently helped the DAX rise above the 10,000 level. However, gains across the region were extended after an improvement in sentiment after the upbeat UK jobs report. In fixed income, Bunds kicked off the session higher with notable underperformance in the short-end ahead of the launch of the 5-yr Bobl auction. However the German benchmark failed to hold onto their gains in the wake of the aforementioned auction, with the weak take up weighing on German paper across the board to see Bunds fall back below 166.50 and into negative territory on the day.

European Top News

  • U.K. Unemployment Declines Below 5% for First Time Since 2005: Employment in March-May rose 176,000 to record high level, unemployment rate fell to 4.9%
  • SAP Profit Tops Estimates as Clients Move to New Software: European revenue grew strongly despite Brexit concerns
  • ASML Sales Rise as Orders for New Machines Begin to Materialize: Chip-machine maker trying to get clients to upgrade factories
  • Nordea CEO Says Turning Point Reached as Outlook Improves: CEO says bank will meet higher CET1 requirement due end 2016

In FX, the lira was 0.2 percent stronger at 3.0355 per dollar, after earlier sinking as much as 0.7 percent. The currency has tumbled about 5 percent since a failed coup attempt on Friday as authorities purged state institutions, the central bank lowered interest rates and Moody’s Investors Service said it may lower the country’s credit rating to junk. President Recep Tayyip Erdogan is due to make an announcement on Wednesday that an official said would boost social cohesion and Turkey’s democratic credentials. The Bloomberg Dollar Spot Index added 0.1 percent, after advancing 0.5 percent to a six-week high in the last session as a report showed new-home construction in the U.S. rose more than economists forecast in June. A Citigroup gauge that tracks the degree to which American data are exceeding projections is at an 18-month high and futures put the chance of a Federal Reserve rate increase this year at 43 percent, up from 9 percent at the start of this month. “The market will recalibrate on Fed rate-hike expectations to price in at least one” this year, said Charlie Lay, a foreign-exchange strategist in Singapore at Commerzbank AG. “That should support the dollar.” The yuan jumped as much as 0.28 percent to 6.6780 per dollar amid speculation China’s central bank is trying to prevent the currency from weakening beyond 6.70, a threshold that was breached this week for the first time since 2010. The People’s Bank of China raised its daily reference rate for its currency on Wednesday, even after the greenback strengthened overnight.

In commodities, crude oil fell 0.3 percent to $44.52 a barrel in New York, after sliding 2.8 percent over the last two trading days. While government data Wednesday is forecast to show supplies fell for a ninth week, stockpiles will still be more than 100 million barrels above the five-year seasonal average. Nickel dropped as much as 1.7 percent in London, retreating from its highest close since October. Copper lost 0.7 percent as China released data showing it boosted output by 7.6 percent in the first half and Barclays Plc forecast there will be a worldwide surplus of the metal every year until 2020.

There’s no major data out in the US today although. Earnings will continue to be a big focus with 21 S&P companies due to report. Morgan Stanley (prior to the open), EBay, American Express and Intel (all after the close) are the highlights while over in Europe we’ve got 10 Stoxx 600 companies due to release their latest numbers

Bulletin Headline Summary from RanSquawk and Bloomberg

  • A strong UK jobs report sees GBP/USD move back towards 1.3200 and the USD pare earlier gains
  • Equities trade firmly in the green, with Bunds in negative territory, weighed on further by a soft German 5y auction
  • Highlights today include DoE U.S. Crude Oil Inventories and earnings from Intel, QUALCOMM, Morgan Stanley and eBay

* * *

US Event Calendar

  • 7am: MBA Mortgage Applications, July 15 (prior 7.2%)
  • 10:30am: DOE Energy Inventories

* * *

DB’s Jim Reid concludes the overnight wrap

Earnings and holiday apathy seem to be holding back markets a bit this week ahead of Draghi and the ECB meeting tomorrow. European equities were soft from the off yesterday with the Stoxx 600 and DAX eventually closing -0.41% and -0.81% respectively albeit with summer holiday-esque volumes which were 25% below the usual average. A soft German ZEW survey which included a four-year low for the expectations component didn’t help, while banks were also under pressure after the EU’s highest court backed the EU guidelines preventing taxpayers from bailing out lenders. More on this below.

The afternoon session also saw US equities spend most of it in the red. The S&P 500 eventually closed -0.14% (which believe it or not was the worst performance since July 5th) and had its smallest range for the year in both percentage (0.26%) and points (5.6pts) terms. The Nasdaq (-0.38%) weakened a little bit more with those weak Netflix numbers weighing, although the Dow (+0.14%) did manage to eke out a modest gain into the close after better than expected Johnson & Johnson numbers helped. The other notable earnings report released yesterday came from Goldman Sachs which continued the trend of US Banks exceeding expectations this quarter with the bright spot once again being better than expected performance in fixed income trading. Again though, the beat was amplified by another big cut in analyst expectations leading into the release. While EPS for the quarter came in at $3.72 versus the $3.05 market consensus, this was revised lower from as much as $3.60 in April and $3.80 in March.

There was a bit of focus on the IMF too yesterday after the Fund downgraded its global growth forecast this year and next by one-tenth to 3.1% and 3.4% respectively from the April forecasts. The Fund highlighted that the new forecast assumes that UK and EU officials negotiate a deal that does not lead to a large increase in economic barriers. A severe scenario where talks break down could result in growth slumping to 2.8% in both years. Unsurprisingly then it was the UK which bore the brunt of the downgrade. The Fund has pencilled in growth this year at 1.7% (from 1.9% in the previous forecast) and growth of just 1.3% in 2017, having previously pencilled in 2.2%. This makes for an interesting contrast to something our European equity team highlighted yesterday. They pointed out that UK four-week net earnings revisions (defined as upgrades minus downgrades) have just turned positive for the first time since early 2013 on the back of weaker Sterling. They note that the GBP trade-weighted index is down 9% since the UK referendum and that 65% of UK revenues come from abroad.

Refreshing our screens this morning it’s been a fairly mixed start for bourses in Asia. Losses are being led by markets in Japan with the Nikkei currently -0.72%, while the Shanghai Comp (-0.18%) and Kospi (-0.28%) are also down. On the other hand the Hang Seng (+0.77%) and ASX (+0.55%) are stronger despite the minimal newsflow. Commodity markets are little changed with WTI Oil (-0.02%) in particular holding steady having closed below $45/bbl. Elsewhere there’s big news to come from the US Presidency race where Donald Trump has officially been crowned the Republican presidential candidate at the convention in Cleveland.

Moving on. Yesterday we saw the results of the latest ECB Bank Lending Survey that demonstrated a continued easing of lending conditions in Q2 2016, along with further loosening expected in Q3. In a Credit Bite published just before this email we analysed these results alongside some other important default indicators. We find that while the lending survey does not point towards elevated defaults, there are other lead indicators that are more worrying on this front.

Staying in Europe, as we highlighted earlier yesterday the EU’s highest court ruled that the losses imposed on creditors during Slovenia’s banking rescue in 2013 were legal when the nation imposed ‘burden-sharing’ on private investors. That rescue had resulted in €600m of junior bondholder’s debt being wiped out at the time, although significantly the ruling also stated that burden-sharing wasn’t a pre-requisite for state aid. The court said that ‘burden sharing by shareholders and subordinated creditors as a prerequisite for the authorization, by the commission, of state aid to a bank with a shortfall is not contrary to EU law’. Clearly this ruling comes at an interesting time given the focus on Italian lenders at present, with the nation looking to recap or restructure its banking system. EU competition commissioner Margrethe Vestager said following the ruling that the decision will not change the EU’s talks with Italy’s government and that an agreement may be ‘quite close’. Italian banks were generally down 1-3% yesterday by the close.

In terms of that data yesterday, the standout was the decline in the German ZEW survey this month with the current situation component falling 4.7pts and more than expected to 49.8 (vs. 51.8 expected). That was just the second sub-50 reading (the other coming in April) since February last year. More telling though was the weakness in the expectations component which plummeted 26pts to -6.8 (vs. +9 expected) and to the lowest level since November 2012. It’s worth noting that the survey period was July 4th-18th and so post-Brexit. Meanwhile in the UK the inflation report for June was largely in line to a little bit firmer than expected. CPI printed at +0.2% mom as expected, with the YoY rate creeping up two-tenths to +0.5% as a result. The core also rose two-tenths to +1.4% yoy.

Meanwhile across the pond the latest housing market data showed housing starts as rising more than expected in June (+4.8% mom vs. +0.5% expected). The less volatile permits data rose +1.5% mom and also a little more than expected (+1.2% mom expected). Our US economists noted yesterday that starts and permits remain well below their previous-cycle levels by a wide margin, however the latest data confirms that the ongoing grinding improvement in the sector likely has further room to run.

Looking at the day ahead, it’s fairly quiet data-wise in Europe this morning with German PPI the early release, followed by the latest UK employment report where current expectations is for the ILO unemployment rate to hold steady at 5%. There’s no data out in the US this afternoon, although we will receive the European Commission’s flash consumer confidence reading for July along with China’s Conference Board leading economic index for June. Earnings will continue to be a big focus with 21 S&P companies due to report. Morgan Stanley (prior to the open), EBay, American Express and Intel (all after the close) are the highlights while over in Europe we’ve got 10 Stoxx 600 companies due to release their latest numbers

via http://ift.tt/29O2NWw Tyler Durden

“These are the danger signals and they are flashing now.”

I’m excited.

Tomorrow starts our summer Liberty & Entrepreneurship camp, an annual event that our foundation sponsors in which some of my most accomplished friends and I mentor young students from all over the world.

This year we have students from dozens of countries, places like Indonesia, Ecuador, Nigeria, Brazil, New Zealand, Ukraine, Canada, Estonia, China, Venezuela, Singapore, India, and the United States.

We’ll spend five days together at a beautiful lakeside resort here in Lithuania helping them build real skills in value creation, business development, investing, and more.

Before I sign off for the next few days, though, I wanted to pass along an impressive speech that was recently given by this year’s recipient of the Templeton Prize.

The Templeton Prize is named after legendary investor Sir John Templeton, who passed away in 2008.

In addition to being an enormously successful asset manager, Templeton was an unparalleled philanthropist.

He even renounced his US citizenship in 1964 during the Vietnam War, which saved him over $100 million in taxes that would have gone to fund a destructive war.

Instead, that money went to fund charitable efforts around the world.

This year’s recipient of the Templeton Prize is a British rabbi and philosopher named Jonathan Sacks.

His recent acceptance speech is a succinct and fantastic summation of WHY the West is in such decline.

This is not some message of doom and gloom by a tin-foil-hat-wearing conspiracy theorist.

On the contrary, it’s an inspiring look at what made the West great to begin with. And, maybe, just maybe, how it might be once again.

I’ve provided some excerpts below:

This is a fateful moment in history. Wherever we look, politically, religiously, economically, environmentally, there is insecurity and instability.

It is not too much to say that the future of the West and the unique form of freedom it has pioneered for the past four centuries is altogether at risk. . .

To mention just a few [risks:]. . .

Artificially low interest rates that encourage borrowing and debt and discourage saving and investment.

Wildly inflated CEO pay.

The lowering of living standards, first of the working class, then of the middle class.

The insecurity of employment, even for graduates.

The inability of young families to afford a home. . .

The collapse of birthrates throughout Europe, leading to unprecedented levels of immigration that are now the only way the West can sustain its population, and the systemic failure to integrate some of these groups.

The loss of family, community and identity, that once gave us the strength to survive unstable times.

And there are others.

Why have they proved insoluble?

First, because they are global, and governments are only national.

Second, because they are long term while the market and liberal democratic politics are short term.

Third, because they depend on changing habits of behavior, which neither the market nor the liberal democratic state are mandated to do.

Above all, though, because they can’t be solved by the market and the state alone.

You can’t outsource conscience. You can’t delegate moral responsibility away.

When you do, you raise expectations that cannot be met.

And when, inevitably, they are not met, society becomes freighted with disappointment, anger, fear, resentment and blame.

People start to take refuge in magical thinking, which today takes one of four forms: the far right, the far left, religious extremism and aggressive secularism.

The far right seeks a return to a golden past that never was.

The far left seeks a utopian future that will never be.

Religious extremists believe you can bring salvation by terror.

Aggressive secularists believe that if you get rid of religion there will be peace.

These are all fantasies, and pursuing them will endanger the very foundations of freedom.

Yet we have seen, even in mainstream British and American politics, forms of ugliness and irrationality I never thought I would see in my lifetime.

We have seen on university campuses in Britain and America the abandonment of academic freedom in the name of the right not to be offended by being confronted by views with which I disagree.

Most societies, for most of history, have been either tradition-directed or inner-directed. People do what they do, either because that is how they have always been done, or because that’s what other people do.

Inner-directed types are different. They become the pioneers, the innovators and the survivors.

They have an internalized satellite navigation system, so they aren’t fazed by uncharted territory.

They have a strong sense of duty to others. . . . They take daring but carefully calculated risks. When they fail, they have rapid recovery times.

They have discipline. They enjoy tough challenges and hard work. They play it long.

They are more interested in sustainability than quick profits.

They know they have to be responsible to customers, employees and shareholders, as well as to the wider public, because only thus will they survive in the long run.

They don’t do foolish things like creative accounting, subprime mortgages, and falsified emissions data, because they know you can’t fake it forever.

They don’t consume the present at the cost of the future, because they have a sense of responsibility for the future. . .

Cultures like that stay young. They defeat the entropy, the loss of energy, that has spelled the decline and fall of every other empire and superpower in history.

But the West has, in the immortal words of Queen Elsa in Frozen, let it go.

It’s externalized what it once internalized. It has outsourced responsibility. It’s reduced ethics to economics and politics.

Which means we are dependent on the market and the state, forces we can do little to control.

And one day our descendants will look back and ask, How did the West lose what once made it great?

Every observer of the grand sweep of history, from the prophets of Israel to the Islamic sage ibn Khaldun, from Giambattista Vico to John Stuart Mill, and Bertrand Russell to Will Durant, has said essentially the same thing: that civilizations begin to die when they lose the moral passion that brought them into being in the first place.

It happened to Greece and Rome, and it can happen to the West.

The sure signs are these: a falling birthrate, moral decay, growing inequalities, a loss of trust in social institutions, self-indulgence on the part of the rich, hopelessness on the part of the poor, unintegrated minorities, a failure to make sacrifices in the present for the sake of the future, a loss of faith in old beliefs and no new vision to take their place.

These are the danger signals and they are flashing now. . .

We owe it to our children and grandchildren not to throw away what once made the West great, and not for the sake of some idealized past, but for the sake of a demanding and deeply challenging future.

If we do simply let it go, if we continue to forget that a free society is a moral achievement that depends on habits of responsibility and restraint, then what will come next – be it Russia, China, ISIS or Iran – will be neither liberal nor democratic, and it will certainly not be free. . .

[Editor’s note: You can read the full speech here.]

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How Serious Is Sweden’s Fight Against Islamic Terrorism And Extremism?

Submitted by Nima Gholam Ali Pour via The Gatestone Institute,

  • Jihadists who come to Sweden know that there are many liberal politicians looking for invisible "right-wing extremists", and feminists who think what is really important is using "gender perspective" in the fight against extremism and terrorism.

  • Perhaps the Swedish government has a secret plan to convince jihadists to become feminists? As usual, Swedish politicians have chosen to politicize the fight against extremism and terrorism, and address the issue as if it were about parental leave instead of Sweden's security.

  • "As soon as these people… say 'Asylum', the gates of heaven open." – Inspector Leif Fransson, Swedish border police.

  • Experts in Sweden's security apparatus have clearly expressed that violent Islamism is a clear and present danger to the security of Sweden, but the politicized debate about Islamic terrorism and extremism does not seem capable of absorbing this warning.

Like all other European countries, Sweden is trying to fight against jihadists and terrorists, but it often seems as if the key players in Sweden have no understanding of what the threats are or how to deal with them.

In 2014, for instance, the Swedish government decided to set up a post called the "National Coordinator Against Violent Extremism." But instead of appointing an expert as the national coordinator, the government appointed the former party leader of the Social Democrats, Mona Sahlin. Apart from Sahlin having a high school degree, she is mostly known for a corruption scandal. As a party leader of the Social Democrats, she lost the 2010 election, and as a minister in several Socialist governments, she has not managed to distinguish herself in any significant way. Göran Persson, who was Prime Minister of Sweden from 1996 to 2006, described Mona Sahlin this way:

"People believe she has a greater political capacity than she has. What comes across her lips is not so remarkable. Her strength is not thinking, but to convey messages."

With such a background, it was no surprise that she was ineffective as National Coordinator Against Violent Extremism. But the fact that she used her high government agency to help her friends came as a shock to the Swedish public. Sahlin had hired her former bodyguard for a position at her agency and signed a false certificate that he earned $14,000 dollars monthly, so that he could receive financing to purchase a $1.2-million-dollar home.

Sahlin also gave the man's relative an internship, even though the application had been declined. Before Sahlin resigned in May 2016, she said, "I help many of my friends."

Despite the fact that Sweden has a Ministry of Justice responsible for issues that would seem far more related to violent extremism, Sweden has, for some reason, placed the agency to combat violent extremism under the Ministry of Culture.

While the U.S sees the fight against Islamic extremism as a security issue, Sweden evidently believes that combating violent extremism should be placed in a ministry responsible for issues such as media, democracy, human rights and national minorities. With such a delegation of responsibility, the government seems either to be trying to hamper efforts to combat violent extremism, or it does not understand the nature of the threat.

The lack of understanding of violent extremism, combined with politicizing the problem, has been evident, for instance, in Malmö, Sweden's third largest city. After the November 2015 terrorist attacks in Paris, the city councilor responsible for safety and security in Malmö, Andreas Schönström, said that European right-wing extremism is a bigger threat than violent Islamism. And on June 5, 2016, Jonas Hult, Malmö's security manager, wrote: "The right-wing forces in Malmö are the biggest threat."

With such statements, one would think that perhaps Malmö is a city filled with neo-Nazi gangs. Not so. Malmö is a city that usually ends up in the news because of Islamic anti-Semitism or extremist activists working to destroy Israel. There have been no reports of any neo-Nazi movements in Malmö in the recent past.

When supporters of Pegida (an anti-Islamic migration political movement in Europe) came to Malmö, they had to be protected by the police due to thousands of extremist activists and Muslims protesting the presence of Pegida. Of Malmö's residents, 43.2% were either born abroad or their parents were.

Further, the Social Democrat politicians have held local municipal power in Malmö since 1919. To say that Malmö is somehow a place where right-wing extremism is a threat is simply not based on facts. Instead of seriously combating violent extremism, many in Sweden have chosen — possibly imagining it easier — to politicize the problem.

Sweden also has not yet reached the point where the authorities distance themselves from violent extremism. The association Kontrakultur (a cultural and social association in Malmö), receives about $37,000 annually from the municipal cultural committee of Malmö. On its website, Kontrakultur writes that it cooperates with an organization called Förbundet Allt åt alla ("The Association Everything for Everyone"). This organization, in turn, according to the National Coordinator Against Violent Extremism, consists of violent extremist activists.

The idea that municipal funds should in no way go to organizations that cooperate with violent extremists is something not yet rooted in Sweden. In June 2016, for example, a 46-year-old Islamic State jihadi arrived in Malmö. He was taken into custody by the police for speedy deportation. But when he applied for asylum, the Swedish Migration Agency took over the matter to examine his asylum application, and ordered the deportation stopped. Inspector Leif Fransson of the border police described the situation:

"As soon as these people throw out their trump card and say 'Asylum', the gates of heaven open."

In August 2015, the Swedish government submitted a document to Parliament outlining the Swedish strategy against terrorism. Among other things, the document stated:

"It is important that there is a gender perspective in efforts to prevent violent extremism and terrorism."

Under the headline "Gender Perspective" in a committee directive from the Swedish government on the mission of the National Coordinator Against Violent Extremism you can observe:

"The violent extremist environments consist mainly of men, and in the extremist movements there are individuals who oppose gender equality and women's rights. It is therefore important that there is a gender perspective in efforts to prevent violent extremism, and that norms that interact and contribute to the emergence of violent environments are effectively counteracted."

Perhaps the Swedish government has a secret plan to convince jihadists to become feminists? But as usual, Swedish politicians have chosen to politicize the fight against extremism and terrorism, and address the issue as if it were about parental leave instead of Sweden's security.

Mona Sahlin, who was Sweden's "National Coordinator Against Violent Extremism," until she resigned in May amid corruption allegations, is shown posing with Swedish soldiers in Afghanistan in July 2010. The Swedish government's directives to her agency stressed that it is "important that there is a gender perspective in efforts to prevent violent extremism." (Image source: Social Democratic Party)

There is no evidence that "gender perspective" is relevant or useful in the fight against extremism and terrorism, yet we see that the Swedish government, in several documents related to terrorism and extremism, evidently believes that "gender perspective" is what should be used in the fight against those threats. This gives just some idea of how strenuously Sweden wants to disregard the problem, or even ask experts for help.

One might argue that this is because Sweden has never been exposed to Islamic terrorism or that extremism is not something that concerns the nation. Sweden has, however, had experience in facing Islamic terrorism. On December 11, 2010, a jihadist blew himself up in central Stockholm. Taimour Abdulwahab did not manage to hurt anyone, but Sweden got a taste of Islamic terrorism and has every reason to want to defend itself against more of it.

Islamic extremism is, unfortunately, becoming more widespread, especially in Sweden's major cities. Gothenburg, for example, has been having major problems with it. In November 2015, there were reports that 40% of the 300 Swedish jihadists in Syria and Iraq came from Gothenburg. The only country that has, per capita, more of its citizens as jihadists in Iraq and Syria than Sweden, is Belgium.

As facts accumulate, there is much information indicating that Sweden has huge problems dealing with Islamic extremism and jihadism. The Swedish Security Service (Säpo), in the beginning of 2015, published a press release using the words "historic challenge" to describe the threat from violent Islamism. Already in May 2015 the head of Säpo, Anders Thornberg, expressed doubts that the agency could handle the situation if the recruitment of jihadists in Sweden continued or increased.

Experts in Sweden's security apparatus have clearly expressed that violent Islamism is a clear and present danger to the security of Sweden, but the politicized debate about Islamic terrorism and extremism does not seem capable of absorbing this warning.

This general politicization, combined with the failure to prioritize the fight against terrorism and extremism, is the reason Sweden is, and continues to be, a magnet for extremists and terrorists. Jihadists who come to Sweden know that there are many liberal politicians looking for invisible "right-wing extremists", and that there are feminists who think what is really important is using "gender perspective" in the fight against extremism and terrorism.

Jihadists also know that there are large gaps in the Swedish bureaucracy and legislation that can be exploited. These are the policies that have been created by Swedish politicians. One can therefore only question if Sweden seriously wants to fight the threats of terrorism and extremism.

via http://ift.tt/29XJ5eV Tyler Durden