While it is expected to be a largely quiet, summer week event wise, markets will continue to assess the fallout from the latest ratcheting up in the trade war and implications for global growth, as well as the ongoing Hong Kong protests, the focus this week will be back on the data with US CPI and a first look at Q2 GDP in Germany being the highlights. As DB’s Craig Nicol points out, we’ll also get retail sales data in the US along with various sentiment indicators while in China the latest activity indicators are due. Monetary policy decisions are also due in Mexico and Norway.
The main focus of the data this week is the US July CPI report which could give markets another opportunity to sharpen Fed expectations. The consensus expects a +0.2% mom reading for the core which would be enough to hold the annual rate at +2.1% yoy. Away from that we’ve also got the July retail sales report due in the US on Thursday where +0.3% mom core and +0.4% mom control group readings are expected. Thursday is a fairly busy day for data releases in the US in fact with July industrial production, August empire manufacturing and Philly Fed business outlook, and weekly jobless claims data also due. On Friday we’ll also get a first look at the August University of Michigan consumer sentiment survey readings.
Meanwhile in Europe the highlight will be Germany’s Q2 GDP on Wednesday. The consensus is for a modest contraction of -0.1% qoq following a +0.4% qoq expansion in Q1. On Tuesday we also get the August ZEW survey in Germany while final July CPI revisions are due in Germany and Spain on Tuesday and France on Wednesday. The second revision to Q2 GDP for the Euro Area is also due on Wednesday where no change from the +0.2% qoq flash is expected.
In light of the surprisingly weak Q2 GDP data in the UK last week, expect Tuesday’s June and July employment data, July’s CPI/PPI/RPI data on Wednesday and the July retail sales report on Thursday to also be a focus.
Finally in China we’ve got the July fixed asset investment, industrial production and retail sales data all due on Wednesday. It’s also worth noting that we got the July money and credit aggregates data this morning and it was dismal, with aggregate financing rising a paltry 1.01t yuan, and massively below the 1.63t yuan estimate.
As for central banks, there are only two meetings of note next week with both the Norway and Mexico rate decisions due on Thursday. Elsewhere, the NY Fed will release its Q2 household debt and credit report on Tuesday while the OPEC monthly oil report is due on Friday
Summary of key events in the week ahead courtesy of Deutsche Bank:
Monday: A very quiet day for data or scheduled events with only the July monthly budget statement due in the US.
Tuesday: The data highlight is the July CPI report in the US. Other data includes the July NFIB small business optimism reading, while in Europe the August ZEW survey and final July CPI revisions are due in Germany and July employment data in the UK. Away from that the NY Fed will also release its Q2 household debt and credit report.
Wednesday: The overnight focus will be on the July activity indicators out of China. Not long after we get a first look at Q2 GDP in Germany while a second revision is due for the Euro Area. July CPI data is also expected in the UK and France while June industrial production is also due for the Euro Area. In the US the July import and export price index readings are due. Away from that the EIA crude oil inventory report is due.
Thursday: Overnight, June industrial production in Japan and July new home prices data is due in China. In the UK we’re due to get the July retail sales report while in the US the July retail sales report will also be a focus. The August empire manufacturing, August Philly Fed business outlook, Q2 nonfarm productivity and unit labour costs, July industrial production, weekly jobless claims, August NAHB housing market index and June business inventories data are all due also. Elsewhere, monetary policy meetings are due in Mexico and Norway.
Friday: The main data highlights are in the US with the July housing starts and building permits data, and preliminary August University of Michigan consumer sentiment survey due. In Europe the June trade balance for the Euro Area is expected. Elsewhere, OPEC will release its monthly oil market report.
The key economic data releases this week are the CPI report on Tuesday, retail sales on Thursday, and the Philadelphia Fed manufacturing index also on Thursday. There are no scheduled speaking engagements from Fed officials this week.
Monday, August 12
There are no major economic data releases scheduled today.
Tuesday, August 13
06:00 AM NFIB small business optimism, July (consensus 104.0, last 103.3)
08:30 AM CPI (mom), July (GS +0.27%, consensus +0.3%, last +0.1%); Core CPI (mom), July (GS +0.22%, consensus +0.2%, last +0.3%); CPI (yoy), July (GS +1.74%, consensus +1.7%, last +1.6%); Core CPI (yoy), July (GS +2.13%, consensus +2.1%, last +2.1%): We estimate a 0.22% increase in July core CPI (mom sa), and while we expect an unchanged year-over-year rate on a rounded basis (at +2.1%) we see the risks there skewed to the upside. Our monthly core inflation forecast reflects a boost from tariffs of around 0.05pp (step-up from 10% to 25% rate on $200bn of Chinese imports), which we expect to manifest in the household furnishings, auto parts, and personal care categories. We also expect a modest boost from tobacco prices related to new taxes in Illinois. We also expect a rise in used car prices, albeit sequentially smaller than in the June report. On the negative side, we look for a modest pullback in the apparel category following methodological changes earlier this year. We estimate a 0.27% increase in headline CPI (mom sa), reflecting a boost from gasoline prices.
Wednesday, August 14
08:30 AM Import price index, July (consensus -0.1%, last -0.9%)
Thursday, August 15
08:30 AM Retail sales, July (GS +0.3%, consensus +0.3%, last +0.4%); Retail sales ex-auto, July (GS +0.6%, consensus +0.4%, last +0.4%); Retail sales ex-auto & gas, July (GS +0.5%, consensus +0.4%, last +0.7%); Core retail sales, July (GS +0.5%, consensus +0.4%, last +0.7%): We estimate that core retail sales (ex-autos, gasoline, and building materials) rose at a solid pace for a fifth consecutive month (we estimate +0.5% mom sa), reflecting another record Amazon Prime Day. We also note that the recent trade war escalation was likely too late to significantly affect the July report. We estimate a 0.6% increase in the ex-auto measure and a 0.5% increase in the ex-auto-ex-gas measure, reflecting a rise in gasoline prices. We expect the headline number to increase at a more moderate pace (+0.3%) given softer auto sales in the month.
08:30 AM Philadelphia Fed manufacturing index, August (GS +5.0, consensus +10.0, last +21.8); We estimate that the Philadelphia Fed manufacturing index fell by 16.8pt to +5.0 in August after rebounding by 21.5pt in July.
8:30 AM Nonfarm productivity (qoq saar), Q2 preliminary (GS +1.6%, consensus +1.4%, last +3.4%); Unit labor costs, Q2 preliminary (GS +1.9%, consensus +1.8%, last -1.6%): We estimate non-farm productivity slowed to +1.5% in Q1 (qoq ar), above the trend achieved on average during this expansion. This reflects weaker business output growth in Q2 and little change in growth in average hours worked. We expect Q2 unit labor costs—compensation per hour divided by output per hour—to rebound by 1.8% as a result of slower productivity growth in the quarter.
08:30 AM Initial jobless claims, week ended August 10 (GS 215k, consensus 212k, last 209k); Continuing jobless claims, week ended August 3 (consensus 1,685k, last 1,684k): We estimate jobless claims increased by 6k to 215k in the week ended August 10 after declining by 8k in the prior week.
08:30 AM Empire State manufacturing index, August (consensus +1.9, last +4.3)
09:15 AM Industrial production, July (GS +0.3%, consensus +0.1%, last flat); Manufacturing production, July (GS -0.1%, consensus -0.3%, last +0.4%); Capacity utilization, July (GS +78.0%, consensus +77.8%, last +77.9%): We estimate industrial production rose 0.3% in July after last month’s flat reading, reflecting a rebound in the utilities category but an offset from a retrenchment in mining production growth. We estimate manufacturing production growth was flat in June and that capacity utilization edged up by one tenth to 78.0%.
10:00 AM Business inventories, June (consensus +0.1%, last +0.3%)
10:00 AM NAHB housing market index, August (consensus 66, last 65)
Friday, August 16
08:30 AM Housing starts, July (GS -0.5%, consensus flat, last -0.9%); 08:30 AM Building permits, July (GS 2.5%, consensus 3.1%, last -5.2%): We estimate housing starts declined by 0.5% in July.
10:00 AM University of Michigan consumer sentiment, August preliminary (GS 96.5, consensus 97.3, last 98.4); We expect the University of Michigan consumer sentiment index declined by 1.9pt to 96.5, as stock market volatility could potentially weigh on sentiment.
Source: Deustche Bank, BofA, Goldman
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After nearly eight years of torment, gold and silver are back. The global political picture is spinning out of control quickly. And the precious metals are here to tell us just how quickly.
Before I get to the charts, however, I think it’s important we review everything that happened this week just to get some context.
Last weekend two gruesome murder sprees were committed in El Paso, Texas and Dayton, Ohio. Both shooters apparently radicalized by the current political climate. The usual suspects used these events to call for gun control, pre-crime prevention straight out of a Philip K. Dick novel while blaming them on the tyranny of white people and Donald Trump’s racism.
Then on Monday morning to the news India revoked Article 370 of their constitution, reorganizing Kashmir & Jammu and putting the entire area on a lockdown so complete many there don’t know what happened.
Protests in Hong Kong continued into their third week as the U.S. is caught openly working with protest organizers and castigates by China.
Later that same day Donald Trump finally fulfills a Republican dream of labeling China a ‘currency manipulator’ because investors properly responded to his installing tariffs on the rest of China’s imports to the U.S.
Markets flopped all week. On by Wednesday morning, oil had broken below its near-term term to break its bull market run.
By Wednesday Italian Interior Minister and leader of Lega, Matteo Salvini called for the end of the coalition government, just thirteen months old, with Five Star Movement. The ramifications of this are immense.
The Italian Deep State whom Salvini is fighting at every turn, along with the European Union, has control over the government which he supposedly leads. For now the Troika of Technocrats installed above Salvini in Rome will drag out calling new elections because as bad as the current government is, with Italian polls showing Salvini likely to win an outright majority in Parliament, this is as good as it gets for them.
As long as it looks like Salvini will not get his new election the markets will err on the side of stability. The euro will continue to levitate just above the breakdown line at $1.11 despite a rising dollar and yen and deteriorating financial and economic conditions.
But once the reality sets in, only then will the pressure mount to the point of no return. The same is true of Boris Johnson’s fronting to the world he’s prepared for a no-deal Brexit. Markets want to believe that there’s a compromise because “cooler heads” usually prevail.
But what happens when they don’t?
The Italian debt markets are a complete fantasy. They have been for years but this year they went from urban legend to full-blown fairy tale.
The closer we get to October the higher the odds of a political spasm across the EU.
All of this leads back to a post I wrote speculating that entrenched interests blew up decades-old arrangements because there are too many threats mounting geopolitically for the tastes of The Davos Crowd.
The more I think about it the more Monday was some form of geopolitical coup attempt. The multiple annoyances coming from the Trump administration are one thing. But doing so at the same time the Indian government took the dramatic step to reorganize Kashmir/Jammu using the pretext of recent terrorism and the ongoing riots in Hong Kong to foment a color revolution there is irresponsible.
And that has the fingerprints of someone else.
We now know who.
The same people who killed Jeffrey Epstein in prison. They are all the same folks. And it doesn’t matter who any of us, personally, think is behind all of this because the truth is, we’re all partially right.
Who killed Jeffrey Epstein will be foisted off as some form of karmic justice, but it smells too bad this time. And the fallout from all of these events points to one thing and one thing only, in the grand scheme of things.
Chaos.
And markets hate chaos.
Chaos is messy. Killing Epstein this brazenly is a sign of desperation. The markets will wake up tomorrow not safe in the knowledge that the political elite are protected from what this man knew but scared at the implications for long-term political and societal collapse.
And that’s why gold and silver put in weeks to remember. And why what happened this week is showing up on longer-term price charts as something very different.
Let’s start with gold and a look at the quarterly data.
The post-Brexit vote high of $1375 has defined the gold market for more than three years. But it is even more significant than that. That region between $1375 and $1434 cast a pall over the market going back to the breakdown in 2013.
A formation this big has built up a tremendous amount of energy. It’s more than enough to eclipse the all-time high of $1911 and go beyond that. Gold is the peoples’ hedge against government run amok.
At home we have Trump fighting with the Fed. Trump fighting with China, the EU, Venzuela, Iran, Russia while fending off domestic attacks built on a foundation made of equal parts fear, loathing and basic corruption.
Every day more people pull back from this show and ask themselves, “What should I do now?” That’s part of where this energy comes from. It’s been building for years.
And enough people are saying to them the same thing, “Buy gold.” And, slowly the worm turns. Slowly when I tell people this they don’t look at my like I’m a lunatic.
Gold cleared a major hurdle in June. It was a big deal. But to see it immediately follow through into August pushing above $1500 is a signal things are accelerating.
Which brings me to silver. Silver has been lagging behind gold and it’s been used by skeptics to say that gold’s bull should be questioned.
This week silver put those issues to bed. While still not out of its bear market, the explosive move in silver is enough to make even the most jaded observer take notice.
The big three-year downtrend line in silver was broken last week with the move back to the $16.60 area. But it was this week’s move above that near-term resistance point to challenge the May 2018 high at $17.34 that is the signal.
From here I don’t expect the fireworks to continue. Consolidation of these gains is likely if ‘cooler heads prevail’ and the news cycle slows own. But what is clear is that sentiment in these crucial markets has changed and the central banks’ jawboning their way through the political minefields no longer has the same effect it used to.
Chaos, once it’s unleashed, is impossible to control.
When pols talk and no one listens what do you think happens next?
“We are now in the early episodes of ‘Chernobyl’ on HBO, where the reactor is melting down and the apparatchiks are trying to figure out whether to cover it up or start the clean-up process,” Scaramucci said.
“A couple more weeks like this and ‘country over party’ is going to require the Republicans to replace the top of the ticket in 2020.”
…if Trump “doesn’t reform his behavior, it will not just be me, but many others will be considering helping to find a replacement in 2020.”
“Right now, it’s an unspeakable thing. But if he keeps it up, it will no longer be unspeakable. The minute they start speaking of it, it will circulate and be socialized. We can’t afford a full nuclear contamination site post 2020.”
“I think you have to consider a change at the top of the ticket when someone is acting like this,” because
“The racially charged comments, the divisive tweeting, is not helping the country.”
Scaramucci added that he’s now “neutral” on Trump.
“Loyalty is not blind obedience unless you’re supporting a demagogue,” he said.
White House press secretary Stephanie Grisham had this short response to Scaramucci’s comments about opposing Trump in 2020:
“It sounds like his feelings are hurt.”
What many are asking is why the sudden flip in Scaramucci’s perspective? Well he just tweeted his response:
“To those asking, ‘what took so long?’ You’re right. I tried to see best in President Trump, based on private interactions and select policy alignment. But his increasingly divisive rhetoric – and damage it’s doing to fabric of our society – outweighs any short-term economic gain.”
To those asking, “what took so long?” You’re right. I tried to see best in @realDonaldTrump based on private interactions and select policy alignment. But his increasingly divisive rhetoric – and damage it’s doing to fabric of our society – outweighs any short-term economic gain.
Did Jeffrey Epstein commit suicide or was he murdered? This is a question that is being debated by millions of Americans right now, and without a doubt this is the biggest story of this news cycle. Unfortunately, the mainstream media is already dropping the ball. Instead of going wherever the evidence leads them, there already seems to be a tremendous effort to marginalize any explanations for his death other than “suicide”. And it may turn out that “suicide” is where the evidence takes us, but while things are unclear we should not be afraid to ask the hard questions.
The following are 7 unanswered questions about Jeffrey Epstein’s death that the mainstream media needs to be talking about…
#1 Why are the autopsy results being delayed? According to NBC News, the New York City medical examiner’s office is requesting “more information” before determining the cause of Epstein’s death…
The New York City medical examiner’s office said Sunday that it had completed an autopsy of the financier and accused sex trafficker Jeffrey Epstein but that it needed more information before determining the cause of death.
#2 What will the cameras show? By now most people have heard that there were no cameras filming what was going on inside Epstein’s cell, but there were cameras filming the doors of each cell…
The news of the delay to the autopsy results comes after a source told the New York Post there was no video of the moment he died in his jail cell at Metropolitan Correctional Center.
Cameras are said to film the doors to each cell which would show anyone who entered or exited, but they do not point inside.
So if someone paid a “visit” to Epstein, there should be video evidence of it.
#3 Why was Jeffrey Epstein taken off suicide watch? After Epstein attempted to “kill himself” the first time, he was put on suicide watch, but only for a short period. The following comes from CNN…
No. Epstein was temporarily placed on a suicide watch after he was found in his jail cell July 23 with marks on his neck, a law enforcement source and a source familiar with the incident told CNN at the time.
It wasn’t clear whether those injuries, which were not serious, were self-inflicted or the result of an assault, the sources said. Epstein told authorities he had been beaten up and called a child predator, they said.
#4 Why did the guards break prison rules and not check on him every 30 minutes? Apparently these guards had been working a lot of overtime, but that is no excuse for breaking prison rules…
Epstein should have been checked on by guards in his cell every 30 minutes, but that didn’t happen the night before his apparent suicide, a law enforcement official told the Times.
The Times spoke to the official on the condition of anonymity. The Associated Press has not independently confirmed the information.
A law enforcement source also said he was alone in his cell Saturday night after his cellmate was transferred. An official with knowledge of the investigation told the Times that the Justice Department was told Epstein would have a cellmate and be monitored by a guard every 30 minutes.
#5 Why would Jeffrey Epstein try to kill himself if he was adjusting so well to prison life? According to a “prison insider” interviewed by the Daily Mail, Epstein “seemed to be in good spirits” just before his life ended…
The insider, who had seen the disgraced financier on several occasions during his incarceration at the Metropolitan Correctional Center, also claims that the normally reserved Epstein seemed to be in good spirits.
‘There was no indication that he might try to take his own life,’ the source told DailyMail.com.
‘From what I saw, he was finally starting to adjust to prison. I think he was comforted by the rigidity of his new life.’
#6 Why did Jeffrey Epstein tell guards that someone was trying to kill him? It has been reported by the mainstream media that Epstein previously tried to kill himself, but apparently that report was being directly contradicted by Epstein himself. Of course it is entirely possible that Epstein was lying, but according to multiple reports he claimed that someone had tried to kill him…
The 66-year-old convicted sex offender reportedly told guards and fellow inmates he believed someone was trying to kill him.
The multimillionaire, who was being held on sex trafficking charges at the Metropolitan Correctional Center in Manhattan, had previously been on suicide watch.
#7 How could Epstein kill himself in a prison where the cells had been specifically designed to prevent that from happening? I shared this quote in another article that I just posted, but it is deeply relevant to this article as well. According to a former inmate of the Metropolitan Correction Center in lower Manhattan that was just interviewed by the New York Post, there is no way that Epstein would have been able to hang himself…
There’s no way that man could have killed himself. I’ve done too much time in those units. It’s an impossibility.
Between the floor and the ceiling is like eight or nine feet. There’s no way for you to connect to anything.
You have sheets, but they’re paper level, not strong enough. He was 200 pounds — it would never happen.
Everything in these cells was designed to keep hanging deaths from happening, but that is not the only way that prisoners kill themselves.
According to a study cited by the Los Angeles Times, over 90 percent of all prison suicides are hangings, and drug overdoses are the second most common cause…
According to news reports, Epstein was not on suicide watch when he died, but even if he had been the outcome might have been the same. A study by the U.S. Marshal Service found that about 8% of suicides in correctional facilities occurred even though an inmate was on suicide watch. According to the report, the vast majority of suicides (more than 90%) are hangings, with the second most common being drug overdoses.
So is it possible that Epstein could have come up with a way to kill himself?
Yes, although it wouldn’t have been easy. Epstein was certainly a miserable human being, and without anything positive to live for, he probably imagined that he would rot away in a prison cell for the rest of his life.
In the end, it definitely would not be a surprise if someone in his position chose the cowardly route of committing suicide.
But without a doubt, something doesn’t smell right here.
There were reports that Epstein was willing to start testifying against his rich and powerful friends, but now that will never happen.
It is clear that there are certain people that have greatly benefited from his death, and in many of those cases it appears that justice will probably never be served.
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From a New Hampshire Supreme Court decision earlier this year in MacDonald v. Jacobs:
The record supports the following facts. The defendant [Lisa Jacobs] seasonally resides in Fitzwilliam. According to the plaintiffs [Lorraine and Peter MacDonald], in 2012 they purchased a vacation home that abuts or is near the defendant’s family’s property.
Thereafter, the defendant began letter-writing campaigns in which she falsely accused the plaintiffs of, among other things, a variety of illegal activities. In 2016, the plaintiffs sued the defendant for defamation. Following a trial, the jury found that the defendant’s statements were defamatory and that they were made with malice, thereby warranting the award of special damages. In addition, the trial court, finding the defendant’s statements “vast and disturbing,” issued a permanent injunction prohibiting the defendant from, inter alia, going within a five-mile radius of the plaintiffs’ home in Fitzwilliam [where defendant’s family has a summer home] and from entering the plaintiffs’ hometown in Sterling, Massachusetts….
The trial court found that the geographical restrictions it imposed were “appropriate because a less restrictive order would be ineffective.” According to the court, the plaintiffs’ “fear for their safety is a rational response to [the defendant’s] relentless and increasingly intimidating behavior,” and the defendant’s “several threats” toward the plaintiffs provided a “compelling interest” for granting the injunction. Thus, the trial court reasoned that preventing the defendant from accessing her family’s summer home in Fitzwilliam, “the epicenter from which all of [her] attacks have stemmed, [was] an appropriate, narrowly tailored restriction to address this interest.”
The trial court further found that “[the defendant] has more than demonstrated her belief that she has a right to harass the [plaintiffs] and that she has an absolute fixation on the victims. She has published defamatory, false materials; contacted numerous federal and state authorities to report these falsities; threatened the [plaintiffs’] lives; and travelled to the [plaintiffs’] hometown in Massachusetts to solicit signatures to support her false and extreme accusations. [The defendant] has also given the Court no indication that she will abide by a more narrow court order, and she has shown no contrition for any of her actions—actions that were defamatory, threatening, and even criminal, as she was arrested for impersonating an agent of the New Hampshire Attorney General a week before trial and yet testified during the defamation case that she was such an agent.
“Even when the defamation case was approaching trial, and even with standing orders from this Court to refrain from harassing the [plaintiffs], [the defendant] published more defamatory material. [The defendant’s] increasingly threatening actions and her failure to follow previous court orders make geographical banishments necessary.
“[The defendant] has harassed the [plaintiffs] … for no apparent reason and they have been driven to desperation by continuous harassment…. These innocent victims deserve to be able to live their lives free from the constant fear of being tormented and attacked. The geographic restriction … will provide them with a margin of territorial safety in which they can live in peace. This Court also considered the fact that the [Fitzwilliam] property, where [the defendant] has occasionally resided, is not a year-round residence, and that [the defendant] was not at the residence during the summer months of 2017…. [The defendant], therefore, would not have her liberty and right to travel overly burdened by the five-mile restriction around the [plaintiffs’] Fitzwilliam residence. Similarly, since [the defendant] is not a resident of Sterling, and has not evidenced reasons to visit Sterling other than to garner signatures for her false affidavits implicating the [plaintiffs], preventing her from entering Sterling would not unconstitutionally constrict her right to travel.”
To the extent the defendant challenges the injunction because there was insufficient evidence for the trial court to conclude that she presents a danger to others, we disagree. The trial court relied upon evidence that the defendant sent a letter to several state and federal authorities, including the Boston, Massachusetts office of the Federal Bureau of Investigation (FBI), stating that she had “been having fears of homicidal ideation of having to be put in the position of killing the [plaintiffs] and or their drunken tenants.” The trial court also found that in her letter to the FBI the defendant stated that she had considered hiring a federal contractor “with an assault weapon to try to protect [her] to help [her] calm down” when she was at the house in Fitzwilliam, that “issues between neighbors blossom to the point until someday one neighbor gets a gun and shoots the other neighbor,” and that she had “thought about getting a gun.”
Based upon this evidence, the trial court found that the defendant is “irrational and quite capable of inflicting harm — both physical and emotional” on the plaintiffs, that she believes she is a “surrogate” of multiple law enforcement agencies, including the New Hampshire Attorney General and the New Hampshire State Police, and that “[i]t is quite rational to conclude that she could convince herself — as a self-proclaimed law enforcement agent — to arm herself,” which would be a “disastrous, but foreseeable, result.” Thus, there is ample support in the record to support the trial court’s determination that the defendant presents a danger to others….
[T]o the extent that the defendant argues that the injunction unconstitutionally restricts her freedom of travel, she has failed to develop this argument sufficiently for our review.
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From a New Hampshire Supreme Court decision earlier this year in MacDonald v. Jacobs:
The record supports the following facts. The defendant [Lisa Jacobs] seasonally resides in Fitzwilliam. According to the plaintiffs [Lorraine and Peter MacDonald], in 2012 they purchased a vacation home that abuts or is near the defendant’s family’s property.
Thereafter, the defendant began letter-writing campaigns in which she falsely accused the plaintiffs of, among other things, a variety of illegal activities. In 2016, the plaintiffs sued the defendant for defamation. Following a trial, the jury found that the defendant’s statements were defamatory and that they were made with malice, thereby warranting the award of special damages. In addition, the trial court, finding the defendant’s statements “vast and disturbing,” issued a permanent injunction prohibiting the defendant from, inter alia, going within a five-mile radius of the plaintiffs’ home in Fitzwilliam [where defendant’s family has a summer home] and from entering the plaintiffs’ hometown in Sterling, Massachusetts….
The trial court found that the geographical restrictions it imposed were “appropriate because a less restrictive order would be ineffective.” According to the court, the plaintiffs’ “fear for their safety is a rational response to [the defendant’s] relentless and increasingly intimidating behavior,” and the defendant’s “several threats” toward the plaintiffs provided a “compelling interest” for granting the injunction. Thus, the trial court reasoned that preventing the defendant from accessing her family’s summer home in Fitzwilliam, “the epicenter from which all of [her] attacks have stemmed, [was] an appropriate, narrowly tailored restriction to address this interest.”
The trial court further found that “[the defendant] has more than demonstrated her belief that she has a right to harass the [plaintiffs] and that she has an absolute fixation on the victims. She has published defamatory, false materials; contacted numerous federal and state authorities to report these falsities; threatened the [plaintiffs’] lives; and travelled to the [plaintiffs’] hometown in Massachusetts to solicit signatures to support her false and extreme accusations. [The defendant] has also given the Court no indication that she will abide by a more narrow court order, and she has shown no contrition for any of her actions—actions that were defamatory, threatening, and even criminal, as she was arrested for impersonating an agent of the New Hampshire Attorney General a week before trial and yet testified during the defamation case that she was such an agent.
“Even when the defamation case was approaching trial, and even with standing orders from this Court to refrain from harassing the [plaintiffs], [the defendant] published more defamatory material. [The defendant’s] increasingly threatening actions and her failure to follow previous court orders make geographical banishments necessary.
“[The defendant] has harassed the [plaintiffs] … for no apparent reason and they have been driven to desperation by continuous harassment…. These innocent victims deserve to be able to live their lives free from the constant fear of being tormented and attacked. The geographic restriction … will provide them with a margin of territorial safety in which they can live in peace. This Court also considered the fact that the [Fitzwilliam] property, where [the defendant] has occasionally resided, is not a year-round residence, and that [the defendant] was not at the residence during the summer months of 2017…. [The defendant], therefore, would not have her liberty and right to travel overly burdened by the five-mile restriction around the [plaintiffs’] Fitzwilliam residence. Similarly, since [the defendant] is not a resident of Sterling, and has not evidenced reasons to visit Sterling other than to garner signatures for her false affidavits implicating the [plaintiffs], preventing her from entering Sterling would not unconstitutionally constrict her right to travel.”
To the extent the defendant challenges the injunction because there was insufficient evidence for the trial court to conclude that she presents a danger to others, we disagree. The trial court relied upon evidence that the defendant sent a letter to several state and federal authorities, including the Boston, Massachusetts office of the Federal Bureau of Investigation (FBI), stating that she had “been having fears of homicidal ideation of having to be put in the position of killing the [plaintiffs] and or their drunken tenants.” The trial court also found that in her letter to the FBI the defendant stated that she had considered hiring a federal contractor “with an assault weapon to try to protect [her] to help [her] calm down” when she was at the house in Fitzwilliam, that “issues between neighbors blossom to the point until someday one neighbor gets a gun and shoots the other neighbor,” and that she had “thought about getting a gun.”
Based upon this evidence, the trial court found that the defendant is “irrational and quite capable of inflicting harm — both physical and emotional” on the plaintiffs, that she believes she is a “surrogate” of multiple law enforcement agencies, including the New Hampshire Attorney General and the New Hampshire State Police, and that “[i]t is quite rational to conclude that she could convince herself — as a self-proclaimed law enforcement agent — to arm herself,” which would be a “disastrous, but foreseeable, result.” Thus, there is ample support in the record to support the trial court’s determination that the defendant presents a danger to others….
[T]o the extent that the defendant argues that the injunction unconstitutionally restricts her freedom of travel, she has failed to develop this argument sufficiently for our review.
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Things in China are going from bad to worse, when as reported earlier, the Hong Kong airport authority advised all passengers are advised to leave the terminal buildings as soon as possible in an unprecedented disruption after thousands of anti-government protesters occupied the airport terminal building.
#BREAKING: Hong Kong airport authority says all passengers are advised to leave the terminal buildings as soon as possible https://t.co/q2CcRFkC1r
However, what confirmed that as Beijing has been warning for the past week, Hong Kong’s insubordination will no longer be tolerated by Beijing, was a video – complete with dramatic World War III style music – published by the state-owned tabloid Global Times, which showed “The People’s Armed Police have been assembling in Shenzhen, a city bordering Hong Kong, in advance of apparent large-scale exercises.”
So will China invade Hong Kong and potentially trigger a global war as the west has no choice but to come to the wayward territory’s defense? We will find out, but recall what what Steve “the Big Short” Eisman said last week, who said that his biggest fear right now are the Hong Kong protests, warning that “the people who are protesting are not backing down, the Chinese government doesn’t seem to be backing down, so if cooler heads don’t prevail it’s possible things in Hong Kong could get very ugly” and adding that “That’s actually what I’m worried about the most right now, because every weekend we’ve got this drama where the people of Hong Kong are having protests in the millions and its starting to get very violent.”
via ZeroHedge News https://ift.tt/2YWgifW Tyler Durden
The new week in global stock markets started off well enough, largely thanks to China whose central bank weakened the yuan’s daily fixing for an eighth day, down to 7.0211, however once again stronger than the 20-trader Bloomberg consensus estimate of 7.029%, which in turn sent the USDCNH sliding from 7.108 to below 7.09, and helped prop up Chinese stocks which closed up 1.45%.
However, any vestige of optimism quickly fizzled around 4am EDT when the news hit that all flights out of Hong Kong were cancelled on Monday in an unprecedented disruption after thousands of anti-government protesters occupied the airport terminal building. The Airport Authority blamed the cancellations from 4pm local time on the protests which had “seriously disrupted” operations, with masses of demonstrators preventing passengers from checking in or clearing airport security.
And what really spooked traders was a video clip from China’s nationalist, and state-owned tabloid Global Times, showing Chinese People’s Liberation Army forces building up just across the border with HK, in Senzhen, ahead of what appears to be a “apparent large-scale exercise,” according to the Global Times.
“Numerous” armored personnel carriers, trucks and other vehicles of the paramilitary police were seen heading towards Shenzhen over the weekend. That means the long-awaited military intervention from the mainland could be just around the corner – something that the Hong Kong people have condemned. At the same time, a Chinese official said the city was at a “critical juncture” and that there were signs of “terrorism.”
The result was a quick, and painful reversal in sentiment , which sent US equity futures below 2900 and global stocks sliding.
The change in mood wiped out the Stoxx Europe 600 Index’s jump of as much as 1%. Stocks had earlier increased in Shanghai and edged higher in South Korea and Sydney, though Hong Kong shares dropped and many other markets across Asia were shut for a holiday. Overall, Asian stocks fluctuated in thin trading, with markets in at least six countries shut. Declines in material producers countered a health care rally. Equity markets in Japan, Singapore, India, Thailand, Malaysia and Philippines were closed for holidays. The Shanghai Composite Index climbed 1.5% for its biggest advance in six weeks, supported by Kweichow Moutai and large financial firms; Bloomberg reported that Chinese policy makers are holding back from rolling out the big guns of monetary stimulus, keeping options in reserve. Hong Kong’s Hang Seng Index dropped 0.4%, as authorities canceled Monday’s remaining flights amid a mass protest at the city’s airport. Cathay Pacific Airways sank 4.9% to a 10-year low.
Safety remained the name of the game. The FX safe haven, the Japanese yen, hit its highest in nearly a year and a half at 105.32 yen against the dollar as it strengthened versus all its major peers as investors sought the safety of havens; Scandinavian currencies fell by the most versus the dollar in a broad risk-off move. The pound got a boost from the latest reports on U.K. lawmakers’ plans to prevent a no-deal Brexit, with MPs said to be drawing up plans to force the Prime Minister to request a last minute Brexit extension. The Swiss franc gained versus the euro even as SNB sight deposits jumped the most in more than two years last week, suggesting intervention. The South Korean won extended declines as data signaled exports are set to drop as the impact of the U.S.-China trade spat spreads. Argentina’s euro-denominated bonds slid after President Mauricio Macri’s poor showing in primary elections on Sunday. The Mexican peso slumped.
“Risk indicators and global markets have become more shaky and the yen is reflecting those concerns, and safe-haven shelters like the yen and the Swiss franc should continue to benefit,” said Commerzbank currency strategist Esther Reichelt.
The story was the same in bond markets, where the demand for safety was unrelenting, and sent the 10Y US Treasury yield sliding to 1.68%, approaching the lowest levels of the year. A rally in Italy’s debt gave it an extra boost after Fitch kept country’s rating steady despite the prospect of snap elections in the euro zone’s third biggest economy now looming. There were signs that League leader Matteo Salvini’s call for those snap elections was facing mounting resistance from other parties whose support will be needed for the plan to succeed.
“Fitch kept Italy’s rating unchanged and some market participants may be betting that a snap election could be delayed,” said DZ Bank rates strategist Sebastian Fellechner, referring to the fall in yields.
Economists are also watching for a batch of global data this week. Goldman Sachs became the latest to cut its U.S. growth forecast at the weekend, warning that a U.S. China trade deal now looked unlikely before the 2020 U.S. presidential election.
As a result of the ongoing uncertainty, traders have increased bets for central bank easing in recent weeks as the U.S. with markets now expecting 4 rate cuts by December 2020, although as Andrew Sheets, chief cross asset strategist at Morgan Stanley, said over the weekend, “we remain cautious, as we believe that a number of challenges remain… among them, the risk that high policy expectations make disappointment more likely, and that even if those aggressive expectations are met, easing isn’t expected to improve growth or inflation materially.”
In commodities, oil prices dipped on growth and trade worries, having risen sharply on Friday on a drop in European inventories and production cuts by the Organization of the Petroleum Exporting Countries. Brent crude futures were at $58.16 a barrel by 0829 GMT, down 37 cents from their previous settlement. WTI futures were at $53.89 per barrel, down 61 cents from their last close. Both benchmarks fell last week, with Brent losing more than 5% and WTI falling about 2%.
“The market is facing a buyers’ strike,” said Michael Tran, commodity strategist at RBC Capital Markets, noting the low level of investors’ long positions betting on higher prices. “Despite the laundry list of disruptions and additional barrels at risk, investor length is currently near a multi-year low.”
Finally, with risk solidly off, gold surged, rising solidly above $1500, and dragging silver, if not bitcoin, along for the ride.
Market Snapshot
S&P 500 futures down 0.5% to 2,905.75
STOXX Europe 600 up 0.2% to 372.32
MXAP down 0.08% to 152.14
MXAPJ down 0.3% to 488.80
Nikkei up 0.4% to 20,684.82
Topix up 0.4% to 1,503.84
Hang Seng Index down 0.4% to 25,824.72
Shanghai Composite up 1.5% to 2,814.99
Sensex up 0.7% to 37,581.91
Australia S&P/ASX 200 up 0.09% to 6,590.27
Kospi up 0.2% to 1,942.29
German 10Y yield fell 1.1 bps to -0.587%
Euro down 0.3% to $1.1169
Brent Futures down 0.7% to $58.14/bbl
Italian 10Y yield rose 26.7 bps to 1.449%
Spanish 10Y yield fell 2.9 bps to 0.232%
Brent Futures down 1% to $57.92/bbl
Gold spot up 0.4% to $1,503.00
U.S. Dollar Index up 0.2% to 97.70
Top Overnight News from Bloomberg
Parliament leaders in Italy will meet on Monday to decide when Prime Minister Giuseppe Conte will have to face a no-confidence vote as the anti-establishment Five Star Movement and the center-left Democratic Party consider an alliance
Chinese policy makers are holding back from rolling out the big guns of monetary stimulus, keeping options in reserve as the trade standoff with the U.S. risks morphing into a global currency war
New Zealand’s Treasury Department has identified a lower bound for the official cash rate as it studies the monetary policies that could be used to combat an economic downturn.
Argentina’s President Mauricio Macri unexpectedly lost a primary vote by a landslide, foreshadowing a defeat in October’s presidential election and a possible return to the policies of his predecessor, Cristina Kirchner
Since becoming U.K. prime minister less than three weeks ago, Boris Johnson has announced spending pledges at a rate of about 2b pounds ($2.4b) per week, fueling speculation he’s planning for an early election
The Times reports some U.K. lawmakers are drawing up plans to compel PM Johnson to request a last-minute Brexit extension from the European Union
Sharp and Foxconn Industrial Internet are increasing production in Vietnam before U.S.’s plan to impose duties on all remaining imports from China from September, according to Taipei-based Economic Daily News
White House trade adviser Peter Navarro tells CNBC he doesn’t want China to devalue their currency “but they’re going to and we’re going to take strong action against them”
Bullish bets on gold have hit a three-year high amid concerns of a currency war, and Goldman and Citi see prices climbing further
The anti-establishment Five Star Movement and the center- left Democratic Party are ready to consider an alliance aimed at postponing early elections, according to several Italian media outlets
Ratings: Italy affirmed at BBB by Fitch, outlook maintained at negative; Portugal affirmed at Baa3 by Moody’s, outlook upgraded to positive from stable
Asian equity markets began the week with a cautious tone amid several market closures and after last Friday’s losses on Wall St. due to ongoing trade uncertainty. ASX 200 (+0.1%) was lower with the index weighed by weakness in commodity names including profit taking in gold miners and as iron ore prices resumed an aggressive pullback from last month’s record levels, although the losses in the index were stemmed due to resilience in the top weighted financials and as JB Hi-Fi led the outperformance in the Consumer Discretionary sector post-earnings. Elsewhere, Hang Seng (-0.4%) kept afloat and Shanghai Comp. (+1.5%) was underpinned after the PBoC set a firmer than expected reference rate and injected liquidity through reverse repos for the 1st time in 2 weeks. In addition, strength was seen in brokerages after China instructed a revision to margin financing and margin trading regulations, although trade concerns lingered following President Trump’s recent suggestion that talks with China may be cancelled. As a reminder, Japan, Singapore and India were among the numerous holiday closures across the region and Middle East.
Top Asian News
Cathay Pacific Shares Tumble to a 10-Year Low
China Says H.K. at ‘Critical Juncture’, Has Signs of ‘Terrorism’
China Says Its Own Cryptocurrency Is ’Close’ to Release
European equities have given up the gain seen at the open and now trade mixed [Eurostoxx 50 +0.1% vs. +0.9% at the open], which follows a cautious handover from the Asia-Pac session whilst Japanese markets were closed on holiday. The bout of risk-aversion coincided with reports of escalating violence in Hong Kong, with its airport cancelling all flights as protestors stage a sit-in, whilst separate reports noted that People’s Armed Police are reportedly gathering and heading towards Shenzhen (a city bordering Hong Kong) in advance of apparent large scale exercises. Back to Europe, bourses are mixed with some mild underperformance in the FTSE 100 as a firmer Sterling weighs on exporters. Sectors are mixed with no clear outperformer/laggard. In terms of individual movers: Osram Licht (+9.9%) shares spiked to the top of the pan-European index after AMS (-9.5%) offered EUR 4.1bln to acquire the Co. The bid is 10% higher than that of the Bain & Carlyle consortium; Osram have said they will review the offer. On the flip side, Anglo American (-1.4%) and ThyssenKrupp (-2.8%) rest near the foot of the Stoxx 600 amid the respective declines in copper and iron ore prices. Finally, luxury good makers also bear the brunt of the US/China trade spat, LVMH (-2.6%), Kering (-1.4%); with the Global Times editor noting, over the weekend, that as long as the US forces a deal on China with maximum pressure, then “there will never be a deal”.
Top European News
Thomas Cook Drops as Emergency Bailout Will Exceed $1 Billion
Italy’s Parliament Leaders to Meet as Sworn Enemies Eye Tie-Up
Italian Bonds Rally After Fitch Keeps Credit Rating on Hold
Burford Says Evidence Points to Market Manipulation of Shares
In FX, the Euro was not the worst G10 performer, but one of the major movers amidst all round selling that appeared to start vs Sterling as Eur/Gbp recoiled from circa 0.9325 towards 0.9250. A corporate order has been touted, but Eur/Jpy also crossed 118.00 and seemed to trip stops and technical levels on its way down to almost 117.50. Meanwhile, the single currency succumbed to accelerated declines through 1.1200 vs the Dollar and alongside ongoing Italian political jitters chart points may also have exacerbated the fall as the 21 DMA at 1.1176 gave way and the headline pair has struggled to sustain rebounds beyond Fib resistance at 1.1220 in recent sessions. However, the 10 DMA at 1.1161 is holding in for now at least.
AUD/NZD/NOK/SEK – A broad deterioration or erosion of risk sentiment against the backdrop of heightened unrest in Hong Kong and the ongoing Yuan depreciation (Usd/Cnh now probing 7.1100) has hit the Aussie and Kiwi especially hard, with Aud/Usd down to around 0.6750 and Nzd/Usd under 0.6450. Note also, dovish Central Bank vibes continue to undermine the Antipodean currencies with research from the NZ Treasury overnight raising eyebrows given -0.35% tagged for the OCR in a crisis situation. Elsewhere, the Scandi Crowns are not deriving any indirect support from the aforementioned Euro weakness or relatively hawkish monetary policy stances ahead of Thursday’s Norges Bank meeting, as Eur/Nok and Eur/Sek rebound to just over 9.9900 and 10.7300 respectively, with the former also propelled by another downturn in oil prices.
JPY/GBP – The Yen is strong across the board and back in demand as a safe-haven, with Usd/Jpy down to 105.15 and eyeing 105.00 ahead of flash crash lows beneath the big figure, but perhaps wary of decent option expiry interest at the round number (1.6 bn) that could provide support. Meanwhile, the Pound is also bid on the cross flow noted above, and with Cable holding firm between 1.2015-75 parameters after reports that a group of UK MPs are trying to ensure another Brextension rather than risk PM Johnson leading the country out of the EU on October 31 with no deal.
EM – Widespread losses vs a mostly buoyant Buck as the DXY continues to pivot 97.500, but some protection for the Rouble from risk aversion and soft Brent via Fitch upgrading Russia to BBB last Friday. However, Usd/Rub is still firmer within a 65.2535-5700 range.
In commodities, WTI and Brent futures have succumbed to the firmer Dollar and the risk averse tone around the market thus far. The former breached 54/bbl to the downside whilst the latter hovers around the 58/bbl handle. Newsflow has been relatively light for the complex, although the Kuwaiti oil minister stated that the country is committed to fully implement OPEC’s output pacts and noted that fears concerning a global slowdown are “exaggerated”. Analysts at ING see stronger non-OPEC supply growth in 2020 which will subsequently lead to OEPC taking further action or face the risk of further declines in prices. Elsewhere, Gold prices are choppy and ultimately unchanged on the day as the yellow metal balances a cautious risk tone against a firmer Buck. Spot Gold now hovers around the 1500/oz level (having hit a current intraday low of 1487.50/oz). Meanwhile, copper prices fell back below the 2.60/lb level as a firmer Greenback and fragile risk tone weighed on the red metal. Finally, Dalian iron ore futures fell to a two-month low, notching its 8th straight session of losses amid the ongoing supply worries and a bleak demand outlook as China’s top steel-producing province looks to tighten emission requirements.
US Event Calendar
2pm: Monthly Budget Statement, est. $120.0b deficit, prior $76.9b deficit
DB’s Craig Nicol concludes the overnight wrap
It may have been a fairly predictable start to the Premier League season over the weekend – other than Arsenal’s clean sheet – however markets are proving to be anything but predictable in August so far. Risk assets have spent most of it flip-flopping around trade headlines while bond yields have continued a surreal race to the bottom and with the peak summer holiday weeks upon us and liquidity therefore becoming an even bigger issue in theory, the risk is that volatility is here to stay for a while yet.
By the way if you were on holiday last week and wanted a snapshot of the updated crazy world of European bond yields then a few of the highlights last week include long-term mortgage rates in Denmark trading at zero, Austria’s 100y bond trading at a high in points terms of 192 versus 117 at the start of the year, the entire Dutch yield curve trading negative and 10y Spanish and Portuguese bonds trade to within 20bps of 0% at one stage.
Quite incredible. In terms of what to look forward to this week there’s a couple of potentially interesting data releases with the first of those on Tuesday when we get the July CPI release in the US. The consensus expects a +0.2% mom reading for the core however our US economists expect a softer +0.13% mom reading mainly reflecting some unwind of the drivers that drove the strong reading in June. It’s worth noting that markets are still pricing in 63bps of cuts by the Fed this year so it’ll be interesting to see if this data makes much of a dent in that.
We won’t have to wait long for the next interesting data release with a first look at Q2 GDP due in Germany on Wednesday. The consensus is for Germany’s economy to have contracted by -0.1% qoq which would mean it would join Sweden and now the UK – following Friday’s data – with negative Q2 GDP prints and therefore one more consecutive negative quarter away from a technical recession. While we’re on Europe, Italy is creeping back onto everyone’s screens as expectations build of a snap election after the League’s Salvini effectively called time on the fractious coalition government. It’s worth noting that the binding constraint on parliament approving Italy’s budget is December 31st so a government needs to be in place by year-end. The big potential vol risk is that we get an election in mid-October as the Brexit process approaches the end game. So it’s worth keeping an eye on the various rhetoric this week.
Some of the newsflow in the Italian press over the weekend suggests that Five-Star and the Democratic Party are considering what would be an unexpected and somewhat unlikely tie-up in a bid to delay Salvini’s plan to take full control (per Bloomberg). In the meantime, it’s worth noting that parliamentary leaders are due to meet today to set a timetable for the vote of no confidence against PM Conte called by Salvini, however it’s expected that this vote won’t take place until later this month.
There has been little reaction in the euro (+0.07%) to that news, while sentiment more broadly in markets in Asia is a bit mixed with the Shanghai Comp (+0.70%) and Kospi (+0.42%) up, but the Hang Seng (+0.01%) flat and ASX (-0.20%) lagging behind. It’s worth noting that volumes are low however with a number of Asian markets closed for a holiday today including Japan, Singapore, India, Malaysia, Philippines and Thailand. As for FX, the Japanese yen is trading up +0.23% and starting to test the 2018 lows of 104.74 while the Chinese onshore yuan is trading flattish at 7.0622. Elsewhere, futures on the S&P 500 are up +0.18%.
As for the rest of the week ahead we’ve also got US retail sales while the manufacturing and consumer sentiment surveys – including from the NY Fed and Philly Fed – will be worth keeping an eye on as they will be the first of the data releases to incorporate the recent announcement of 10% tariffs on the remainder of imported goods from China. In Europe we’ll also get Germany’s ZEW survey on Tuesday and various data out of the UK over the course of the week including on the labour market, retail sales and inflation. In China we’re also expecting the July activity indicators on Wednesday and credit data at some stage.
Turning to recap last week, there were no shortage of macro stories to drive markets. As discussed above, the surprise move by Italy Deputy PM Salvini to move toward new elections drove a sharp selloff in BTPs, with 10-year yields ending the week +26.4bps higher (+27.2bps Friday), and that despite rallying -16.5bps earlier in the week before the announcement. Italian stocks dropped -3.43% (-2.48% Friday), and Italian bank shares retreated -5.60% (-4.49% Friday).
Away from Italy, core government bond markets rallied sharply, as the US-China trade war escalated and economic data was broadly weaker than expected. Ten-year yields in the US and Germany fell -10.1bps and -8.1bps (+2.7bps and -1.6bps Friday) respectively. Duration opened the week well bid, sparked by the move in the Chinese yuan beyond 7.0 per dollar, in an apparent escalation of the trade war. The US subsequently responded by designating China as a currency manipulator, which could open the door to higher tariffs in future. On the data front, the US non-manufacturing PMI was weak at 53.7 versus expectations for 55.5, while industrial production in Germany (-1.5% mom versus expected -0.5%) and France (-2.3% mom versus -1.2% expected) were both soft. In the UK, the first print for second quarter GDP growth showed a -0.2% qoq contraction compared to consensus forecasts for a flat reading.
Along with the rally in treasuries and bunds, these trends combined to push measures of the US yield curve flatter, with the 2y10y down -3.7bps (flat on Friday) to 9.4bps, its flattest level since June 2007. The 3m10y flattened -2.8bps (+5.1bps Friday) and the Fed’s 18 month forward spread fell -3.2bps (+5.1bps Friday). Brent crude prices fell on concerns over global growth, ending -5.43% lower, though it rebounded on Friday (+2.00%) on reports that Saudi Arabia may cut production.
The S&P 500 retreated -0.46% (-0.66% Friday), though that still represented a strong rebound from the -3.75% trough reached on Monday. Other global equities retreated similarly, with the NASDAQ and DOW down -0.56% and -0.75% (-0.34% and -1.00% Friday) respectively. In Europe, the STOXX 600 fell -1.74% (-0.84% Friday), while indexes in Asia underperformed. The Shanghai Composite was down -3.25% (-0.71% Friday) and the Hang Seng declined -3.64% (-0.69% Friday). Other risk assets were also pressured, with cash HY spreads +28.0bps and +10.4bps wider in the US and Europe (-3.0bps and +2.6bps Friday). EM currencies underperformed, with the South African rand weakening -3.06% (-1.39% Friday) amid continued reports of a potential IMF program. Conversely, safe havens rallied, with the yen +0.85% stronger (+0.36% Friday) and gold touching new six-year highs and ending +3.89% higher (-0.27% Friday).
via ZeroHedge News https://ift.tt/2YXQPXy Tyler Durden
Science fiction writers have wondered for years what an all-encompassing surveillance state might look like. China decided to build it.
Over the last year, The New York Times has revealed the lengths to which Beijing has gone to identify and control Uighurs, a Muslim minority that has lived for centuries on the country’s western frontier. While Chinese state secrecy means we don’t know the full extent of the regime’s malevolent policies, what has been uncovered should chill every civil libertarian to the bone.
Within Kashgar, a majority Uighur city, residents must line up to be scrutinized before they can move from place to place. They are legally required to travel with ID cards and to swipe them at each checkpoint. They are also required to expose their faces to cameras that feed their pictures to facial recognition software. At the behest of the national government and regional police forces, Chinese software makers are training their algorithms to distinguish Uighurs from Han, China’s ruling ethnic majority. Police officers stationed throughout Kashgar need neither probable cause nor a warrant to detain Uighurs and check their phones for the surveillance software that they’re legally required to install.
And if a Uighur resident raises a red flag during one of these encounters? He or she will likely be sent to a “re-education” camp where, Human Rights Watch reported last year, Chinese Muslims are “held indefinitely without charge or trial, and can be subject to abuse.” The camps may contain tens of thousands, hundreds of thousands, or even millions of Muslims. The lack of government transparency makes it impossible to know even this basic information.
To the extent that China has justified its systematic targeting of a religious and ethnic minority, the government says it wants only to combat Islamic terrorism as part of its “stability maintenance” program. Yet the country’s surveillance apparatus has no obvious form of due process, no regard for civil liberties or privacy, and no avenues for appeal.
Perhaps we should not be surprised that China, the most oppressive global superpower since the Soviet Union, is a leader in this race to the bottom. More alarming is that the disease is spreading. Foreign Policy reported in August 2018 that Ecuador is using a “national emergency response and video surveillance system built entirely by Chinese companies and financed by Chinese state loans.” The Times reported in April that the country may soon add China’s facial recognition software as well.
As this technology improves and gets cheaper, it will likely become affordable to every two-bit dictator on Earth. What happens then is a chilling mystery.
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Science fiction writers have wondered for years what an all-encompassing surveillance state might look like. China decided to build it.
Over the last year, The New York Times has revealed the lengths to which Beijing has gone to identify and control Uighurs, a Muslim minority that has lived for centuries on the country’s western frontier. While Chinese state secrecy means we don’t know the full extent of the regime’s malevolent policies, what has been uncovered should chill every civil libertarian to the bone.
Within Kashgar, a majority Uighur city, residents must line up to be scrutinized before they can move from place to place. They are legally required to travel with ID cards and to swipe them at each checkpoint. They are also required to expose their faces to cameras that feed their pictures to facial recognition software. At the behest of the national government and regional police forces, Chinese software makers are training their algorithms to distinguish Uighurs from Han, China’s ruling ethnic majority. Police officers stationed throughout Kashgar need neither probable cause nor a warrant to detain Uighurs and check their phones for the surveillance software that they’re legally required to install.
And if a Uighur resident raises a red flag during one of these encounters? He or she will likely be sent to a “re-education” camp where, Human Rights Watch reported last year, Chinese Muslims are “held indefinitely without charge or trial, and can be subject to abuse.” The camps may contain tens of thousands, hundreds of thousands, or even millions of Muslims. The lack of government transparency makes it impossible to know even this basic information.
To the extent that China has justified its systematic targeting of a religious and ethnic minority, the government says it wants only to combat Islamic terrorism as part of its “stability maintenance” program. Yet the country’s surveillance apparatus has no obvious form of due process, no regard for civil liberties or privacy, and no avenues for appeal.
Perhaps we should not be surprised that China, the most oppressive global superpower since the Soviet Union, is a leader in this race to the bottom. More alarming is that the disease is spreading. Foreign Policy reported in August 2018 that Ecuador is using a “national emergency response and video surveillance system built entirely by Chinese companies and financed by Chinese state loans.” The Times reported in April that the country may soon add China’s facial recognition software as well.
As this technology improves and gets cheaper, it will likely become affordable to every two-bit dictator on Earth. What happens then is a chilling mystery.
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