Tag: news

Nomura: We Are Seeing Virtually No Adjustments To The Market’s 100 bps Of Rate Cut Expectations

This weekend’s “truce” outcome may have been just as the market expected, and yet that did not prevent stocks from reacting as if what happened was the best possible – and unexpected – case. And, as we noted earlier, and as Nomura’s Charlie McElligott notes, global equities, risk FX and Asian Commodities-futures go “mongo” overnight in standard “relief rally euphoria” fashion.

At the same time, while equities are set to explode to new all time highs, Treasuries and rates remain well-bid despite the “feel-good” for risk-asset sentiment off the G20, as Monday brought another atrocious round of Global Mfg PMIs, with Germany at an eye-watering 45; Spain back “contracting” for the first time in more than 5.5 yrs; UK “back-to-back” contractions for first time in 6 yrs; China Caixin Mfg PMI at 49.4 lows since January, with 21 of 22 releases thus far declining vs the prior month and expectations for US to continue trend “lower” later today, all of which “capture the spectacular breadth of the global economic deterioration”, according to McElliogtt.

What is most surprising in the context of a positive US-China “truce”, Nomura observes that “we are seeing virtually no adjustments to the market’s already remarkable “Fed rate cut” expectations, still  at approx. 100bps of easing looking-out over the next 1Y”, even though odds for a July 50bps cut now are down below 20% vs nearly 40% at the start of last week. Still, as McElligott adds…

… the market knows that “when the Fed goes, they go hard and fast” (i.e. of the last four easing cycles, 70% of the aggregate “easing” has occurred within the first six months of the initial cut), especially with the potential for negative “business investment” sentiment to remain high as legacy trade-tariffs stay “in-place.

There is a negative flipside to that of course, because as we noted over the weekend, there are two signals which are pretty much fail safe coincident recessionary indicators:

  • The Fed has never cut 100bp within a year in an easing cycle outside a recession.
  • The Fed has never started an easing cycle with a 50bp cut outside a recession.

So while the US – and global economies – may be headed for a day of reckoning, traders have yet to extract some upside from the market and as McElligott observes, the US equities “Melt-Up” continues to be the most-likely early Summer scenario, for the same “under-positioning” dynamics he has been discussing over the past few months, which again are as follows:

  • Street PB data showing median Equities HF “Net Exposures” at sub- 10th %ile ranks across 1-, 3-, 5- year ranks and since 2010 overall
  • Not surprisingly then, we see “extreme” Leveraged Fund “Net Short” positioning in US Eq futures, shorting -$59.2B YTD and now -$36.2B overall across SPX-, NDX- and RTY- futures—a remarkable (“just”) 13th %ile since 2006
  • Within the overall make-up of underlying portfolios, we continue to see a very “Slow-flation / end-of-cycle” lean from both Mutual- and Hedge- funds being heavily “Low Vol” (long / overweight the “Duration-Sensitives” of Defensives- and Secular Growers- vs short / underweight high-beta Cyclicals-):
    • Long-Short “Beta to S&P 500” just 3rd %ile since ‘03
    • Long-Short “Beta to Beta Factor” just 3rd %ile since ‘03
    • Mutual Fund “Beta to Beta Factor” just 23rd %ile since ‘03
  • Macro Fund “Beta to SPX” similarly “meh” at just 56th %ile since ’03, which is actually down vs 1m ago
  • EPFR Global Fund Flow data now showing a -$138.4B redemption YTD from Global Equities funds, incl a “net outflow” of -$41.2B in US funds (-$83.0B from Active-, partially offset by +$41.8B inflow to Passive-)
  • Conversely, there is significant “High Cash” component which then could act as “fodder” for a grab-in across both Risk-Assets (and further into Bonds), with Money Market funds experiencing a massive +$195.8B inflow YTD, which is 93rd %ile since 2000 (although last week saw a -$14.0B outflow as seemingly money was “put to work”)
  • Still seeing some legacy “Net Short” positions in our Nomura QIS CTA Trend model which are incrementally nearing “buy to cover” levels in Russell 2000, Nikkei and KOSPI, while Hang Seng CH is within reach of triggering more re-leveraging / buying to get back to “+100% Long” signal as well
  • Nomura QIS Risk-Parity model estimates the “gross exposure” across the aggregate position in Global Equities near 1.5 year lows, with the aggregate US Equities futures component near 28 month lows—the continued grind lower in trailing 2 year realized vol will gradually reverse last year’s “higher realized” environment and gradually see Equities exposure added back

Meanwhile, looking back at June, which saw the S&P surge 7%, yet saw most hedge funds suffer losses, the Nomura derivatives expert attributed this to the positive impact of a steepening US yield curve on chronically under-owned “Value” (Predicted E/P factor +6.6% MTD; Sales / Price +5.8% MTD; EBITDA / EV+5.2% MTD; Cash Flow / EV +4.6% MTD; PEG +4.1% MTD) vs the NEGATIVE impacts of a steeper curve on “Momentum” (Sector Neutral 1Y Momentum -3.6% MTD; “Pure” 1Y Price Momentum -3.6% MTD; Vol Adjusted Momentum -3.3% MTD).

As shown below, the US “factor reversal” remains the story of June due to the positive “value”, negative “momentum” shift due to yield curve steepending (which itself should be negative for the market):

In conclusion, why has 2019 been so challenging within US Equities from a thematic / risk-premia perspective?  As McElligott concludes, the above US Equities factor “unwind” phenomenon has been an almost monthly occurrence for the past year via said constant “end of cycle” macro regime-change across Volatility-, Financial Conditions- and US Rates- / Yield Curves- therein; the result: spectacular performance of Nomura-Instinet’s two “monthly reversal” factor market-neutral strategies of the past 1 year window: “1m Price Reversal” factor at +24.3% YTD / +28.3% past 1 year period; and “Conditioned Reversal” factor at +13.4% YTD and +28.6% past 1 year period.

via ZeroHedge News https://ift.tt/2Nn4iU4 Tyler Durden

The Bolsheviks aren’t coming. They’re already here.

The average Westerner who hasn’t traveled very much believes Moscow to be a cold, bleak, desolate capital city that’s filled with Stalinist-era architecture and a population that lives in utter misery.

But the reality of this place is nearly the complete opposite.

Moscow is a bright, beautiful, cosmopolitan city. I’ve always found Moscow to feel more European than most European capitals, with gorgeous architecture that never seems to end.

Moscow is easily as nice as Paris, London, or Vienna… with a population larger than all three. I like it here more and more every time I visit.

It has some of the nicest restaurants in the world, beautiful parks and monuments, and a highly sophisticated, educated, cultured population.

The city is quite prosperous too. But it wasn’t always that way.

Moscow was once the capital of the Soviet Empire… the most infamous and failed experiment with Socialism in the history of the world.

Russia’s humiliating tale of Socialism grew out imperial discontent– a period starting in the 1500s when wealth was concentrated in the hands of the Tsar and his key lieutenants. Everyone else lived as peasants in abject poverty.

My friends and I toured a museum at the Kremlin over the weekend and saw endless artifacts from the days of the Empire– golden chalices, diamond-encrusted silverware, magnificent carriages.

No doubt the royals lived absurdly well at the expense of everyone else. And by the early 20th century, the seeds of revolution had been firmly planted.

Lenin and his Bolsheviks finally seized power in 1917. And after they stamped out all remaining resistance and opposition, they set out to remake the country into a communist masterpiece.

It took 69 years for the Soviet Union to collapse. And by the time that happened, there was no private property, private business, or private wealth.

Decades of central planning had extinguished any incentive to work hard, take risks, and innovate. And most people were destitute and impoverished.

Yet over the past 30 years this country has become wealthy once again. Russians enjoy a high standard of living– much higher than many European countries– with some of the lowest tax rates on the continent.

(GDP per capita in Moscow is actually slightly higher than in Washington DC, and much higher than most US cities like Houston, Dallas, Los Angeles, or Miami.)

None of this is due to Socialism. And Russians know it.

They still pay lip service to Lenin… there are tombs and monuments and buildings bearing his name, mostly out of reverence for history and traditions.

But Russians embraced capitalism long ago. They had their experiment with Socialism when the Bolsheviks took over in 1917. And they’re not going back.

Meanwhile, over in the Land of the Free, nearly half the country is running as fast as they can to Socialism.

The reasons are much the same as in imperial Russia– there’s growing discontent about the divide between rich and poor.

And as more and more people in the West feel left behind and barely able to make ends meet, the call to Socialism grows stronger.

There have been two formal debates so far among US Presidential candidates, both of which seemed to be Bolshevik beauty pageants.

The candidates talk about guaranteeing a government job for everyone, free education, free healthcare, eliminating private insurance altogether.

They demonize private profit and wealthy individuals, and propose more government as the solution to everything that ails the nation.

These are all Bolshevik principles ripped straight out of the Communist Manifesto– nationalization of private industry, central planning, government controlled labor and education, heavy taxation, and constantly complaining about the Bourgeoisie.

I’ve been looking back lately over the last decade of Sovereign Man (we recently hit our 10 year anniversary two weeks ago.)

Over the years I’ve written extensively about how the Bolsheviks are coming to the Land of the Free… and most of the West.

Well, those days are over. It’s clear that the Bolsheviks are no longer coming. They’re here. And their movement is firmly entrenched.

One of the Presidential candidates was actually booed and jeered at a political rally in California earlier this month by voters in his own party simply because he suggested that “Socialism is not the answer.”

A growing number of constituents believe quite adamantly that Socialism is absolutely the answer. A recent Gallup poll showed that 43% of Americans now prefer socialism to capitalism.

This isn’t some fake news conspiracy theory. It’s happening.

And acknowledging this reality doesn’t make you a doomsayer or even a pessimist. Normal, rational people should be able to see this obvious trend and at least consider having a Plan B.

We’ll talk more about that in the coming days.

Source

from Sovereign Man https://ift.tt/2Lu3qKH
via IFTTT

Be Careful What You Wish For – Bond Bears & Stock Bulls Beware

A reported trade “truce” between China and US has prompted excited talk of fresh record highs in US stocks, a surge in Chinese stocks, a jump in offshore yuan relative to the dollar, but barely anything in bonds (with 10Y Yields hovering just above 2.00%, unable to hold the overnight spike).

But, as Bloomberg’s Garfield Reynolds warns, the key danger across markets is the potential for a corrective yield spike that would pummel risk assets and worry investors that they have fallen for a low-yield trap.

Via Bloomberg,

Falling bond yields have been the big surprise of 2019 so far and there’s an excellent chance they will grind lower in the second half — and take stocks with them — as weak growth spurs global monetary easing.

Given how tough it has been to forecast bond yields, getting that call right for the rest of the year is key.

A reminder of how difficult that can be comes from San Francisco Fed President Mary Daly. Twice last week she said it’s very hard to say what the central bank should do, including comments that she’s unsure “whether interest rates will be lower a year from now.”

Surveying the outlooks our team came up with at the start of 2019, it’s clear our biggest misses were all in bonds
The same goes for those readers who took part in our surveys. Treasury yields finished June more than 100 bps below the consensus for end-2019, while bunds were ~75 bps lower and Italian yields a whopping 105. Bond analysts were also far too bearish.

What some forecasters may find especially galling is the way the yield projections actually look sensible if you consider where equity gauges are now. The same goes for FX projections that mostly favored a soft-dollar outlook.

Our readers were bearish bonds and bullish equities, and while equities are mostly well north of the WHIS numbers, bond yields are way, way south.

Oddly enough, the growing concern right now seems to be the rush into bonds has created massive duration risk that could set off a global version of the so-called VaR shock that hit Japanese government debt back in 2003.

Very few seem to be raising concerns that U.S. equities at a record high would be at least as exposed to the turmoil that would come. Consider how the spike in Treasury yields in February 2018 set off global carnage for stocks.

Still, with central banks marching down the easing path, justified by a record stretch of data disappointment, a meaningful backup in yields looks unlikely.

The G-20 trade truce did very little to indicate a resolution to the U.S.-China conflict is imminent, so that will continue to weigh on the global growth outlook.

The key question is whether yields that stay at current lows or drop further can go on being fuel for equity rallies?

Your answer to that may come down to whether you buy into the “insurance cut” thesis that the Fed will be able to preserve the U.S. economic expansion with a rate move or two.

What looks more likely is that equities ultimately succumb to the macro logic that has fueled this year’s bond rally.

via ZeroHedge News https://ift.tt/302QWxA Tyler Durden

Charles Koch, George Soros Help Fund Think Tank Opposed To “Endless War”

The Boston Globe reports the “astonishing turn” that organizations created by libertarian billionaire Charles Koch and progressive billionaire George Soros are helping to fund a new think tank, The Quincy Institute for Responsible Statecraft. The new group is committed to promoting “ideas that move U.S. foreign policy away from endless war and toward vigorous diplomacy in the pursuit of international peace.”

From the Globe‘s writeup:

It will promote an approach to the world based on diplomacy and restraint rather than threats, sanctions, and bombing. This is a radical notion in Washington, where every major think tank promotes some variant of neocon militarism or liberal interventionism. Soros and Koch are uniting to revive the fading vision of a peaceable United States. The street cred they bring from both ends of the political spectrum — along with the money they are providing — will make this new think tank an off-pitch voice for statesmanship amid a Washington chorus that promotes brinksmanship….

The institute plans to open its doors in September and hold an official inauguration later in the autumn. Its founding donors — Soros’s Open Society Foundation and the Charles Koch Foundation — have each contributed half a million dollars to fund its takeoff. A handful of individual donors have joined to add another $800,000. By next year the institute hopes to have a $3.5 million budget and a staff of policy experts who will churn out material for use in Congress and in public debates. Hiring is underway. Among [Trita] Parsi’s co-founders are several well-known critics of American foreign policy, including Suzanne DiMaggio, who has spent decades promoting negotiated alternatives to conflict with China, Iran, and North Korea; the historian and essayist Stephen Wertheim; and the anti-militarist author and retired Army colonel Andrew Bacevich.

William Kristol, the former chief of staff for Vice President Dan Quayle, co-founder of The Weekly Standard, and a proponent of military intervention, was quick to sum up the response of “neocon militarism” and “liberal interventionism”:

It’s a sad, empty rejoinder to equate any change from the foreign policy status quo to isolationism and appeasement, but there you have it. For those of us not uncritically wedded to a vision of American power that, among other things, largely waves away the disasters of post-9/11 foreign policy, the Koch-Soros partnership is a welcome sign that worn-out, old political coalitions are making way for new alliances. In fact, this isn’t even the first time that the libertarian and progressive have teamed up. As Davis Richardson of The New York Observer reported just a couple of weeks ago, Koch and Soros are both helping to fund The After Charlottesville Project, which seeks to help the “private tech sector” develop “best practices on the fight against hate and extremism online.” Koch and Soros also both share longstanding, overlapping interests in promoting free speech and civil discourse and reforming drug policy and criminal justice. (Disclosure: Reason Foundation, the nonprofit that publishes this website, receives funding from the Charles Koch Institute).

Expect this sort of latest politics-makes-odd-bedfellows moment to become the new normal as more and more Americans—whether of the donor class or simply the voting public—increasingly evacuate old ideological identities. Indeed, Donald Trump, who could barely have passed as a Republican a few decades ago, represents how up for grabs politics has become. As we step out of inherited identities and comatose political coalitions, all sorts of possibilities emerge. In The Declaration of Independents: How Libertarian Politics Can Fix What’s Wrong with America (2011/2012), Matt Welch and I wrote:

Americans who secede from political tribes, yet remain fully or sporadically involved in politics, scare the bejesus out of politicians. Through peaceful resistance, ephemerally organized swarms, blatant disregard of immoral laws, and more, we can create a permanent nongoverning minority, where blocs retain their potency by refusing to be co-opted and focusing on ways that the government is conspiring to keep them less free.

The Quincy Institute, drawing financial and ideological support from parts of the political spectrum that aren’t supposed to row in the same direction, is the latest sign that a 21st-century politics, one rooted in the way we live now and committed to finding answers to our present and future predicaments, is at long last emerging.

from Latest – Reason.com https://ift.tt/2RQcr1R
via IFTTT

Charles Koch, George Soros Help Fund Think Tank Opposed To “Endless War”

The Boston Globe reports the “astonishing turn” that organizations created by libertarian billionaire Charles Koch and progressive billionaire George Soros are helping to fund a new think tank, The Quincy Institute for Responsible Statecraft. The new group is committed to promoting “ideas that move U.S. foreign policy away from endless war and toward vigorous diplomacy in the pursuit of international peace.”

From the Globe‘s writeup:

It will promote an approach to the world based on diplomacy and restraint rather than threats, sanctions, and bombing. This is a radical notion in Washington, where every major think tank promotes some variant of neocon militarism or liberal interventionism. Soros and Koch are uniting to revive the fading vision of a peaceable United States. The street cred they bring from both ends of the political spectrum — along with the money they are providing — will make this new think tank an off-pitch voice for statesmanship amid a Washington chorus that promotes brinksmanship….

The institute plans to open its doors in September and hold an official inauguration later in the autumn. Its founding donors — Soros’s Open Society Foundation and the Charles Koch Foundation — have each contributed half a million dollars to fund its takeoff. A handful of individual donors have joined to add another $800,000. By next year the institute hopes to have a $3.5 million budget and a staff of policy experts who will churn out material for use in Congress and in public debates. Hiring is underway. Among [Trita] Parsi’s co-founders are several well-known critics of American foreign policy, including Suzanne DiMaggio, who has spent decades promoting negotiated alternatives to conflict with China, Iran, and North Korea; the historian and essayist Stephen Wertheim; and the anti-militarist author and retired Army colonel Andrew Bacevich.

William Kristol, the former chief of staff for Vice President Dan Quayle, co-founder of The Weekly Standard, and a proponent of military intervention, was quick to sum up the response of “neocon militarism” and “liberal interventionism”:

It’s a sad, empty rejoinder to equate any change from the foreign policy status quo to isolationism and appeasement, but there you have it. For those of us not uncritically wedded to a vision of American power that, among other things, largely waves away the disasters of post-9/11 foreign policy, the Koch-Soros partnership is a welcome sign that worn-out, old political coalitions are making way for new alliances. In fact, this isn’t even the first time that the libertarian and progressive have teamed up. As Davis Richardson of The New York Observer reported just a couple of weeks ago, Koch and Soros are both helping to fund The After Charlottesville Project, which seeks to help the “private tech sector” develop “best practices on the fight against hate and extremism online.” Koch and Soros also both share longstanding, overlapping interests in promoting free speech and civil discourse and reforming drug policy and criminal justice. (Disclosure: Reason Foundation, the nonprofit that publishes this website, receives funding from the Charles Koch Institute).

Expect this sort of latest politics-makes-odd-bedfellows moment to become the new normal as more and more Americans—whether of the donor class or simply the voting public—increasingly evacuate old ideological identities. Indeed, Donald Trump, who could barely have passed as a Republican a few decades ago, represents how up for grabs politics has become. As we step out of inherited identities and comatose political coalitions, all sorts of possibilities emerge. In The Declaration of Independents: How Libertarian Politics Can Fix What’s Wrong with America (2011/2012), Matt Welch and I wrote:

Americans who secede from political tribes, yet remain fully or sporadically involved in politics, scare the bejesus out of politicians. Through peaceful resistance, ephemerally organized swarms, blatant disregard of immoral laws, and more, we can create a permanent nongoverning minority, where blocs retain their potency by refusing to be co-opted and focusing on ways that the government is conspiring to keep them less free.

The Quincy Institute, drawing financial and ideological support from parts of the political spectrum that aren’t supposed to row in the same direction, is the latest sign that a 21st-century politics, one rooted in the way we live now and committed to finding answers to our present and future predicaments, is at long last emerging.

from Latest – Reason.com https://ift.tt/2RQcr1R
via IFTTT

Key Events This Week: All Eyes On Payrolls As Focus Turns To Fundamentals

The much anticipated G-20 summit, which culminated in the latest trade truce between the US and China, has come and gone, and while the outcome was as largely expected, it will still push US equities to new all time highs just shy of 3,000.

And with the US set for a holiday shortened week, the outcome of the Xi-20 meeting will dictate the tone in markets for the next 56 hours, until the July 4 holiday wreaks havoc with positioning, while the US employment report looms at the end of the week. We will also get PMIs – which are pointing at a global economic contraction – and US ISM data, which may print below 50, to digest along with an OPEC meeting and a scattering of central bank speak throughout.

With the G-20 in the rearview mirror, traders can once again focus on the economic fundamentals, which are not pretty. Across Asia and Europe, factory activity shrank in June, according to reports Monday. China’s manufacturers saw sales, exports and production fall, with unemployment sliding to a decade-low, while Germany suffered from weaker foreign demand. Exports from South Korea plunged almost 14%, and Japan’s Tankan confidence index dropped to a three-year low.

After the G-20, focus will turn to the June employment report in the US on Friday, and as Deutsche Bank’s Craig Nicol writes, the big rates repricing and subsequent dovish turn by the Fed last week has increased anticipation around this report. In terms of expectations, right now the consensus is for a 158k payrolls reading. A reminder that this follows that much weaker than expected 78k reading in May. The unemployment rate is expected to hold at 3.6% while earnings are expected to have risen +0.3% mom which would nudge the annual rate up one-tenth to +3.2% yoy.

That’s not the only significant data that we get next week in the US with the June ISM manufacturing reading due on Tuesday and non-manufacturing on Wednesday. The consensus is for a 51.2 manufacturing reading which would  represent a drop of 0.9pts from May. Our US economists have warned about the ISM potentially declining towards 50, with sharp drops in recent regional Fed manufacturing surveys furthering this argument. So it’s a print worth watching.

Meanwhile, we’ll also get the final June manufacturing PMIs on Tuesday and services and composite PMIs on Wednesday across the globe.

Other data worth flagging in the US this week includes May vehicles sales on Tuesday, June ADP, jobless claims and final durable and capital goods for May on Wednesday. In the UK we get money and credit aggregates data for May on  Monday and May factory orders data in Germany on Friday.

Elsewhere, the oil market is facing a mini test with OPEC meeting on Monday and OPEC+ (which includes Russia) on Tuesday in Vienna. A press conference is expected on Tuesday with nations expected to set oil production policy for the rest of the year. Reports last week – including in the WSJ – suggested that Saudi Arabia was expected to push to renew cutting output amid slowing global demand.

As for Fedspeak, Clarida is due to speak early on Monday at an event in Helsinki on the topic of monetary policy and the future of EMU. Williams is due to speak on Tuesday morning in Zurich on the global economic and monetary policy outlook while Mester will also speak on Tuesday during the afternoon in London on the economic outlook. Meanwhile, over at the ECB, Mersch is due to speak tomorrow, Guindos is due to speak on Monday, Thursday and Friday, Knot on Tuesday, Villeroy on Wednesday and Lane on Thursday. The BoE’s Cunliffe and Broadbent are also due to speak at separate events on Wednesday and PBoC’s Yi on Monday morning.

Other events worth flagging include the EU leaders meeting in Brussels on Sunday to discuss the next heads of the European Commission, ECB and European Council. Turkey’s Erdogan visiting Beijing on Tuesday. The European Commission potentially deciding to open a disciplinary procedure against Italy on Tuesday. Finally, we should highlight that US markets will be closed on Thursday for the Independence Day holiday. This will also likely include a half-day session on Wednesday for bond and equity markets.

Here is a summary of key events in the next few days, courtesy of Deutsche Bank:

  • Monday: The final June manufacturing PMIs for Japan, Europe and the US will be the focus of the data releases along with the June ISM manufacturing reading in the US. The June Caixin PMI will also be released in China while the Q2 Tankan Survey is due in Japan. In Europe we’ll also get the June unemployment rate in Germany, M3 money supply data for the Euro Area for May and money and credit aggregates data for May in the UK. In the US the May construction spending print is also due. Away from that OPEC nations meet in Vienna to set oil production policy for the rest of the year. The Fed’s Clarida, ECB’s Guindos and PBoC’s Yi are due to speak also.
  • Tuesday: Data includes June house price stats in the UK, May PPI for the Euro Area and June vehicle sales in the US. The Fed’s Williams and Mester are also due to speak along with the ECB’s Knot. Meanwhile, OPEC+ meet in Vienna and Turkey’s Erdogan visits Beijing. Tuesday is also the day that the US may begin imposing tariffs on almost all remaining imports from China (pending what happens at the G-20) and the European Commission may decide to open a disciplinary procedure against Italy.
  • Wednesday: The remaining June PMIs will be the main data highlight. The remaining Caixin PMIs will also be out in China  while other data in the US includes the June ADP employment report, May trade balance, jobless claims, June ISM non-manufacturing and final May durable and capital goods orders. The ECB’s Villeroy and Nowotny are due to speak along with the BoJ’s Funo and BoE’s Broadbent. US markets are also expected to close early.
  • Thursday: US markets will remain closed for the Independence Day public holiday. As for data, the only release due in Europe is May retail sales for the Euro Area. The ECB’s Lane and Guindos are also due to make comments.
  • Friday: The June employment report in the US will be the main highlight for data. Prior to that we get May factory orders in Germany, May trade balance in France, June house prices data in the UK and Q1 labour costs in the UK. The ECB’s Guindos is also due to speak.

Finally, looking at just the US, Goldman notes that the key economic data releases this week are the ISM manufacturing report on Monday, the ISM non-manufacturing report on Wednesday, and the employment report on Friday. There are several scheduled speaking engagements from Fed officials this week, including one by Vice Chair Clarida on Monday, and one by New York Fed President Williams on Tuesday.

Monday, July 1

  • 02:15 AM Fed Vice Chair Clarida (FOMC voter) speaks: Fed Vice Chair Richard Clarida will speak at a conference on monetary policy and the future of the EMU at the Bank of Finland.
  • 09:45 AM Markit US manufacturing PMI, June final (consensus 50.1, last 50.1)
  • 10:00 AM ISM manufacturing index, June (GS 50.5, consensus 51.0, last 52.1): All regional manufacturing surveys but Richmond declined by more than expected in June, and caused our manufacturing survey tracker — which is scaled to the ISM index — to fall to its lowest level since mid-2016 (-3.1pt to 50.4). Other idiosyncratic factors roughly offset for this month, and we thus expect the ISM manufacturing index to decline by 1.6pt to 50.5 in June. A simple analysis based on the historical deviations between the ISM and our survey tracker suggests slightly more than a one in three chance of the ISM manufacturing index falling into contractionary territory.
  • 10:00 AM Construction spending, May (GS +0.2%, consensus flat, last flat): We estimate a 0.2% increase in construction spending in May, with scope for an increase in private nonresidential construction, but scope for a decrease in residential construction.

Tuesday, July 2

  • 06:35 AM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will speak on the global economic and monetary policy outlook at an event in Zurich. Prepared text and audience Q&A are expected.
  • 11:00 AM Cleveland Fed President Mester (FOMC non-voter) speaks: Cleveland Fed President Loretta Mester will speak on the economic outlook to the European Economics and Financial Centre in London. Prepared text and audience Q&A are expected.
  • 5:00 PM Wards Total Vehicle Sales (GS 17.1m, consensus 17.0m, last 17.3m)

Wednesday, July 3

  • 08:15 AM ADP employment report, June (GS +125k, consensus +140k, last +27k): We expect a 125k gain in ADP payroll employment, reflecting a drag from lagged payrolls, lower oil prices, and modestly higher jobless claims. While we believe the ADP employment report holds limited value for forecasting the BLS nonfarm payrolls report, we find that large ADP surprises vs. consensus forecasts are directionally correlated with nonfarm payroll surprises.
  • 08:30 AM Trade balance, May (GS -$54.3bn, consensus -$53.5bn, last -$50.8bn): We estimate the trade deficit increased by $3.5bn in May, reflecting a rise in the goods trade deficit.
  • 08:30 AM Initial jobless claims, week ended June 29 (GS 225k, consensus 220k, last 227k): Continuing jobless claims, week ended June 22 (last 1,688k); We estimate jobless claims edged down by 2k to 225k in the week ended June 29, after increasing by 10k in the prior week. There were several auto plant shutdowns.
  • 09:45 AM Markit US services PMI, June final (consensus 50.7, last 50.7)
  • 10:00 AM Factory Orders, May (GS -0.7%, consensus -0.5%, last -0.8%): Durable goods orders, May final (consensus -1.3%, last -1.3%); Durable goods orders ex-transportation, May final (last +0.3%); Core capital goods orders, May final (last +0.4%); Core capital goods shipments, May final (last +0.7%): We estimate factory orders decreased by 0.7% in May following a 0.8% decline in April. Durable goods orders moved down in the May advance report, driven by a further decline in aircraft orders.
  • 10:00 AM ISM non-manufacturing index, June (GS 55.4, consensus 55.9, last 56.9): Our non-manufacturing survey tracker declined by 0.8pt to 53.9 in June, following mixed regional service sector surveys. We expect the ISM non-manufacturing index to decline by 1.5pt to 55.4 in the June report. The index appears elevated relative to other service sector surveys, suggesting some scope for catch-down.

Thursday, July 4

  • US Independence Day holiday observed. US equity and bond markets are closed.

Friday, July 5

  • 08:30 AM Nonfarm payroll employment, June (GS +175k, consensus +163k, last +75k); Private payroll employment, June (GS +160k, consensus +155k, last +90k); Average hourly earnings (mom), June (GS +0.4%, consensus +0.3%, last +0.2%); Average hourly earnings (yoy), June (GS +3.2%, consensus +3.2%, last +3.1%); Unemployment rate, June (GS 3.7%, consensus 3.6%, last 3.6%): We estimate nonfarm payrolls increased 175k in June, more than double the 75k pace in May. Our forecast reflects low jobless claims, the continued expansion indicated by our employment survey trackers, and an expected rebound in public education payrolls related to the timing of the survey periods. We believe the May report overstates the magnitude of the slowdown in trend job growth, which we believe remains well above potential. We also note that labor supply constraints are historically less binding in June: in years with relatively tight labor markets, payroll growth tends to slow in May then reaccelerate in June and July (as students and recent graduates are absorbed into the labor force).

Source: Deutsche Bank, BofA, Goldman

via ZeroHedge News https://ift.tt/2ZYALl2 Tyler Durden

New Soros/Koch-Funded Think Tank Claims To Oppose US Forever War

Authored by Caitlin Johnstone via Medium.com,

If you were to have asked me what news reports I definitely did not expect to see when checking my news feed this morning, “Malignant plutocrats join hands across partisan divide to end America’s forever war” would probably have been among my first guesses. And yet, weirdly, here we are.

A new Boston Globe article titled “In an astonishing turn, George Soros and Charles Koch team up to end US ‘forever war’ policy” reports that the two influential billionaires have chipped in a half a million dollars apiece to start a new DC think tank with the goal of doing the exact opposite of the sort of thing that billionaire-funded DC think tanks normally do.

“Besides being billionaires and spending much of their fortunes to promote pet causes, the leftist financier George Soros and the right-wing Koch brothers have little in common,” the report begins.

“They could be seen as polar opposites. Soros is an old-fashioned New Deal liberal. The Koch brothers are fire-breathing right-wingers who dream of cutting taxes and dismantling government. Now they have found something to agree on: the United States must end its ‘forever war’ and adopt an entirely new foreign policy.”

“In concrete terms, this means the Quincy Institute will likely advocate a withdrawal of American troops from Afghanistan and Syria; a return to the nuclear deal with Iran; less confrontational approaches to Russia and China; an end to regime-change campaigns against Venezuela and Cuba; and sharp reductions in the defense budget,” the article reads.

Responses to this news from Twitter’s blue-ticked commentariat have been largely supportive.

“Great to see that avoiding really stupid, costly wars has support across party lines,” tweeted author and professor Max Abrahms.

“Certainly understand skepticism of Soros and Koch money but with a platform of ending endless war and Trita Parsi at the helm, this sounds very promising and is sorely needed as we inch towards catastrophic nuclear war,” said journalist Dan Cohen.

“A new foreign policy think tank that will ‘promote an approach to the world based on diplomacy and restraint rather than threats, sanctions, and bombing.’ YES PLEASE,” tweeted In The Now’s Rania Khalek.

“Finally. A think tank that aims to fight the blob and endless war. Hope Stephen Walt will be involved,” tweeted foreign policy analyst Joshua Landis.

Others have been a touch more skeptical.

“Hi Joshua, I’ve got a bridge on sale. You seem very interested in buying such. Gimme a call,” Moon of Alabama tweeted at Landis.

Such skepticism is warranted. It is true that the Quincy Institute’s co-fouder Trita Parsi has been a vocal opponent of US imperialism towards Iran and elsewhere, but it is also true that the Kochs and Soros have both acted as toxic facilitators of US imperialism.

The report claims that the new think tank seeks an end to America’s regime change agenda in Venezuela, for example, yet investigative journalist Greg Palast reports that the Koch brothers have been a major driving force behind that very agenda. The group claims to seek a de-escalation against Syria, yet investigative journalist Vanessa Beeley and alternative media outlet Mintpress News have documented extensive ties between George Soros and the various NGOs and narrative management operations which have been facilitating the agenda of toppling Syria’s government.

In 2014 journalist Mark Ames observed that Soros “funded many of the NGOs involved in ‘color revolutions’ including small donations to the same Ukraine NGOs that Omidyar backed. (Like Omidyar Network does today, Soros’ charity arms — Open Society and Renaissance Foundation — publicly preached transparency and good government in places like Russia during the Yeltsin years, while Soros’ financial arm speculated on Russian debt and participated in scandal-plagued auctions of state assets.)”

Charles Koch has been a major donor to the Iraq-raping think tank American Enterprise Institute, which has returned the favor by aggressively churning out narrative management on the public image of the Koch brothers.

George Soros is a major funder of the NATO narrative management firm Atlantic Council, which has been a driving force behind the campaign manufacturing consent for escapations against Russia, something the Quincy Institute claims to oppose.

So if you’re interested in viewing world events through a lens that is untainted by corrupt narrative management, some skepticism of this new Quincy Institute is not just appropriate, but absolutely required.

The term “think tank” almost always refers to a group of academics hired by plutocrats to come up with reasons why it is very good and smart to do something very evil and stupid, and then to market those reasons at key points of influence. They are key tools of narrative management for the billionaire class, and the interests of the billionaire class are rarely in alignment with those of ordinary people. This is especially true when said billionaires are operating in a bipartisan manner.

But the good news is that all we have too do to know the truth about this new group’s purposes is watch its behavior over time, and pay attention to who benefits from the narratives it ends up pushing. Just make a mental note of the information you have about it now, and pay attention to what’s happening when you see the words “Quincy Institute” in reports from the political/media class going forward. If this think tank is what it claims to be, we will see this proven over time in the effects it has on dominant narratives and government policy. If it isn’t, we’ll see that, too.

*  *  *

The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, throwing some money into my hat on Patreon or Paypal, purchasing some of my sweet merchandise, buying my new book Rogue Nation: Psychonautical Adventures With Caitlin Johnstone, or my previous book Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish or use any part of this work (or anything else I’ve written) in any way they like free of charge.

Bitcoin donations:1Ac7PCQXoQoLA9Sh8fhAgiU3PHA2EX5Zm2

via ZeroHedge News https://ift.tt/301rAAg Tyler Durden

Rape Claims and Speech Restrictions, in the Assange/Snowden World

1. Trevor FitzGibbon is a communication strategist who has epresented, among others, Julian Assange. Jesselyn Radack is a whistleblower lawyer and author who has represented, among others, Edward Snowden. Radack and FitzGibbon had been on apparently good terms, and Radack had publicly praised FitzGibbon’s work in August 2015:

FitzGibbon media has “a veritable Who’s Who” of leading organizations and public figures in the progressive world, Radack says: “While big PR firms may have more name cachet, FitzGibbon media makes up for it with genuine concern for client well-being, not just placing a story.”

Then, in early 2016, Radack accused FitzGibbon of raping her in November and December 2015. (FitzGibbon says they had a consensual sexual relationship, and claims that he has messages from after the alleged November incident that reflect the relationship being consensual.) Radack went to the police, but in 2017 prosecutors closed the investigation and decided not to prosecute FitzGibbon.

Radack then continued to criticize FitzGibbon, as well as “liking” and retweeting others’ posts that criticized FitzGibbon with regard to other sexual harassment accusations that had been made against him. FitzGibbon therefore sued her for libel (for more details, see this complaint). During the lawsuit, Radack continued to criticize FitzGibbon further, even though the trial court had ordered her not to use any social media “to publish or republish statements about”:

(a) the character, credibility, or reputation of Plaintiff or Defendant and/or their respective counsel;

(b) the identity of a witness or the expected testimony of Plaintiff, Defendant, or any witness;

(c) the identity or nature of evidence expected to be presented in support of any motion or at trial or the absence of such evidence;

(d) the strengths or weaknesses of the case of either party; and/or

(e) any other information the Defendant knows or reasonably should know is likely to be inadmissible as evidence in this case and that would create a substantial risk of prejudice or confusion if disclosed.

Radack was even held in contempt of court for violating the order, with the judge writing,

Radack acknowledges making the comments which [violated the order] and apologized for them claiming that they were “a desperate, emotionally charged, reflexive attempt to defend herself and respond to attacks that appeared to her to be coming from or orchestrated by the Plaintiff.” … The simple fact is that Radack deliberately violated the July 31, 2018 ORDER (ECF No. 41) by making the communications that she admittedly made. In so doing, she acted in contempt of the ORDER (ECF No. 41).

Neither contrition nor emotional distress nor illness [multiple sclerosis, apparently] nor financial difficulties [a bankruptcy] can excuse deliberate misconduct of this sort by any litigant, much less by a lawyer. And, the record here shows that Radack is a sharp-tongued, mean-spirited, proliferous user of social media. Her conduct here is just more of the same. Neither contrition nor emotional distress nor illness nor financial distress have caused Radack to ameliorate her penchant for nasty social media communication.

The original defamation case had settled, but Radack is apparently continuing to criticize FitzGibbon.

2. Here’s the complication, though: The restraining order in the earlier case would have been unconstitutional, except that Radack had stipulated to it:

Defendant concedes the motion and will not oppose entry of an order consistent with the relief sought in Plaintiff’s Motion for a Restraining Order. As counsel for plaintiff agreed at the hearing on the motion, this concession obviates the need for depositions or a hearing on the motion…. Defendant respectfully suggests that the Court enter an order consistent with that laid out on pages 1-2 of Plaintiff’s Motion for a Restraining Order [which are nearly identical to the order that was actually issued-EV].

She therefore had agreed to the speech restriction, and had it embodied in a court order—and then spoke despite it.

Radack then apparently settled the original case, and Tweeted this about the matter:

And the settlement agreement (according to FitzGibbon) stated:

Radack’s continued posts about FitzGibbon thus seem to be in violation of that settlement agreement, and Friday FitzGibbon filed suit against her again for, among other things, breach of the settlement agreement as well as defamation.

3. Radack’s consent to the speech restrictions—the restraining order in the first case, and the settlement agreement (assuming FitzGibbon’s follow-up complaint accurately reports it)—was doubtless given under pressure, stemming from the costs and risks of the continuing litigation. Nonetheless, promises not to speak are legally binding (see Cohen v. Cowles Media, Inc. (1991)), and that’s also true of promises extracted under litigation pressure.

I don’t know who’s right and who’s wrong as to the original allegations, or Radack’s later follow-ups. And certainly people generally have a First Amendment right to sharply criticize those who they believe have abused them, subject to the constraints of defamation law. But this is a good illustration that, once people promise not to exercise this right, they’re generally stuck with it (unless there’s some special legal rule that makes such promises unenforceable, and such rules are rare). And this is so even if the restrictions agreed to in the promise are very broad.

from Latest – Reason.com https://ift.tt/2J21wPV
via IFTTT

Iran’s FM Zarif Confirms Enriched Uranium Limit Now Breached 

It what appears to be the first known violation of the terms of the 2015 nuclear deal (JCPOA), Iran’s stockpiles of enriched low-grade uranium have surpassed the limit of 300 kg, Iran’s semi-official Fars News is reporting.

Fars noted further that the International Atomic Energy Agency had confirmed the stockpile measurement on Monday, after in May it had already quadrupled its production of the material, the key component to make nuclear reactor fuel – and potentially nuclear weapons. Following the Fars report which had been based on an unnamed “informed source,” Iranian Foreign Minister Javad Zarif was the first government official to confirm the country has exceeded the ceiling of 300kg, according to Iran’s ISNA.

Iran’s President, Hassan Rouhani, and Foreign Minister, Mohammad Javad Zarif. Image source: Getty

Iran’s leaders warned in the past days and weeks that it was on track to surpass the agreed upon enriched uranium limit set by the JCPOA in reaction to President Trump’s reimposed sanctions, as well as the inability of remaining signatories to deliver on their terms of the deal, which the US unilaterally pulled out of in May 2018.

The Fars report announcing the breach of the nuclear deal limits specifically cited European partners as lagging behind commitments to shield Iran from Washington sanctions, despite the new Instrument in Support of Trade Exchange (INSTEX) going live just days ago. 

“For Europeans, there is still time, but if they are asking for more time, it means that whether they are incompetent or they are unwilling to deliver on their commitments,” an official with the Atomic Energy Organization of Iran (AEOI) was cited as saying in the Fars report. 

Zarif also called INSTEX – which was officially launched by Europe as a SWIFT alternative on Friday – a “preliminary step” of the European members of the nuclear deal which only “partially delivers” on their commitments. 

Zarif said Monday while speaking at a public event: “We will never succumb to international pressure, and together with the people of the world, we will force them to only treat Iran with respect and never threaten an Iranian,” and urged European allies to resist US pressures and aggression. 

Last week, President Trump had threatened Iran in a tweet with “great and overwhelming force” and in some areas “obliteration” should it pursue nuclear weapons development. Zarif had responded with his own tweet saying “misconceptions endanger peace” and reiterated that US sanctions amount are tantamount to “war.”

via ZeroHedge News https://ift.tt/2RLRTrq Tyler Durden

Rape Claims and Speech Restrictions, in the Assange/Snowden World

1. Trevor FitzGibbon is a communication strategist who has epresented, among others, Julian Assange. Jesselyn Radack is a whistleblower lawyer and author who has represented, among others, Edward Snowden. Radack and FitzGibbon had been on apparently good terms, and Radack had publicly praised FitzGibbon’s work in August 2015:

FitzGibbon media has “a veritable Who’s Who” of leading organizations and public figures in the progressive world, Radack says: “While big PR firms may have more name cachet, FitzGibbon media makes up for it with genuine concern for client well-being, not just placing a story.”

Then, in early 2016, Radack accused FitzGibbon of raping her in November and December 2015. (FitzGibbon says they had a consensual sexual relationship, and claims that he has messages from after the alleged November incident that reflect the relationship being consensual.) Radack went to the police, but in 2017 prosecutors closed the investigation and decided not to prosecute FitzGibbon.

Radack then continued to criticize FitzGibbon, as well as “liking” and retweeting others’ posts that criticized FitzGibbon with regard to other sexual harassment accusations that had been made against him. FitzGibbon therefore sued her for libel (for more details, see this complaint). During the lawsuit, Radack continued to criticize FitzGibbon further, even though the trial court had ordered her not to use any social media “to publish or republish statements about”:

(a) the character, credibility, or reputation of Plaintiff or Defendant and/or their respective counsel;

(b) the identity of a witness or the expected testimony of Plaintiff, Defendant, or any witness;

(c) the identity or nature of evidence expected to be presented in support of any motion or at trial or the absence of such evidence;

(d) the strengths or weaknesses of the case of either party; and/or

(e) any other information the Defendant knows or reasonably should know is likely to be inadmissible as evidence in this case and that would create a substantial risk of prejudice or confusion if disclosed.

Radack was even held in contempt of court for violating the order, with the judge writing,

Radack acknowledges making the comments which [violated the order] and apologized for them claiming that they were “a desperate, emotionally charged, reflexive attempt to defend herself and respond to attacks that appeared to her to be coming from or orchestrated by the Plaintiff.” … The simple fact is that Radack deliberately violated the July 31, 2018 ORDER (ECF No. 41) by making the communications that she admittedly made. In so doing, she acted in contempt of the ORDER (ECF No. 41).

Neither contrition nor emotional distress nor illness [multiple sclerosis, apparently] nor financial difficulties [a bankruptcy] can excuse deliberate misconduct of this sort by any litigant, much less by a lawyer. And, the record here shows that Radack is a sharp-tongued, mean-spirited, proliferous user of social media. Her conduct here is just more of the same. Neither contrition nor emotional distress nor illness nor financial distress have caused Radack to ameliorate her penchant for nasty social media communication.

The original defamation case had settled, but Radack is apparently continuing to criticize FitzGibbon.

2. Here’s the complication, though: The restraining order in the earlier case would have been unconstitutional, except that Radack had stipulated to it:

Defendant concedes the motion and will not oppose entry of an order consistent with the relief sought in Plaintiff’s Motion for a Restraining Order. As counsel for plaintiff agreed at the hearing on the motion, this concession obviates the need for depositions or a hearing on the motion…. Defendant respectfully suggests that the Court enter an order consistent with that laid out on pages 1-2 of Plaintiff’s Motion for a Restraining Order [which are nearly identical to the order that was actually issued-EV].

She therefore had agreed to the speech restriction, and had it embodied in a court order—and then spoke despite it.

Radack then apparently settled the original case, and Tweeted this about the matter:

And the settlement agreement (according to FitzGibbon) stated:

Radack’s continued posts about FitzGibbon thus seem to be in violation of that settlement agreement, and Friday FitzGibbon filed suit against her again for, among other things, breach of the settlement agreement as well as defamation.

3. Radack’s consent to the speech restrictions—the restraining order in the first case, and the settlement agreement (assuming FitzGibbon’s follow-up complaint accurately reports it)—was doubtless given under pressure, stemming from the costs and risks of the continuing litigation. Nonetheless, promises not to speak are legally binding (see Cohen v. Cowles Media, Inc. (1991)), and that’s also true of promises extracted under litigation pressure.

I don’t know who’s right and who’s wrong as to the original allegations, or Radack’s later follow-ups. And certainly people generally have a First Amendment right to sharply criticize those who they believe have abused them, subject to the constraints of defamation law. But this is a good illustration that, once people promise not to exercise this right, they’re generally stuck with it (unless there’s some special legal rule that makes such promises unenforceable, and such rules are rare). And this is so even if the restrictions agreed to in the promise are very broad.

from Latest – Reason.com https://ift.tt/2J21wPV
via IFTTT