Tag: news

This year’s Davos World Economic Forum conference is not for the faint of heart. Pessimism is pervasive – a 180 from the last few years of mutual-masturbation and self-congratulation on a job well done in creating a recovery (in asset prices, if nothing else).

But, as they say, it’s different this time, as ‘Davos Man’ is ‘punched in the face’ of a global economic slowdown and asset price plunge that most definitely was not in their pre-fight plan.

As former fund manager and FX trader Richard Breslow notes, some Davos conferences are better than others. I’ve always resented the ones that were preachy and out of touch. This time around, at least so far, a lot more caution is being expressed, even if tempered with the obligatory notes of optimism.

It’s worth listening… We used to be told that things aren’t great but there was light at the end of the tunnel. Now we hear things are good, but we need to be concerned.

An appropriate bout of candor. And worth considering as we evaluate just what has propelled equities through well-advertised resistance and whether the latest back-up in yields will have legs beyond periodic auction concessions. Not to mention the populist political impetus that is showing no sign of letting up.

Via Bloomberg,

As a sampling of what we’re being told, the IMF has lowered global growth forecasts again. And we are told it isn’t a big deal. I might agree, except that if they keep nudging the numbers lower, eventually it will add up to a real problem that can’t be explained away as technical adjustments. Frankly, it looks like a trend rather than a one-off.

Axel Weber, Chairman of UBS and former Bundesbank president, speaking of ECB policy normalization, said it is “mission aborted” for this cycle because the economy is weakening. For reasons not entirely clear, he still thinks the Fed has one or two hikes in it for 2019, but he went on to discuss pauses and room to cut if necessary. The ECB meets this week and it will fall of deaf ears if a dovish President Draghi gets pushback from any of the hawkish constituent central banks.

Ray Dalio of Bridgewater took the Fed to task for previous rate hikes and, to make matters even more stark, likened global financial and geopolitical conditions to what prevailed in the 1930s. He did the IMF one better by talking about “substandard growth rates” around the world. Especially in Europe. Which is really interesting because I keep getting buy-euro-versus-dollar recommendations based on relative GDP expectations.

And you can’t blame it on something in the Davos water. Which I’m assured is as excellent as always. China’s President Xi Jinping told top members of his government that greater efforts were needed to prevent “major risks,” in remarks that indicated greater urgency than in the past.

One Davos attendee, ex-RBI Governor Raghuram Rajan, for whom I have tremendous respect, observed that the U.S.-China dispute is “far bigger than trade.” That’s really important as equity futures continue to chase every headline. It’s a mistake to oversimplify every geopolitical threat to the global order of things.

Rajan also said it would be good for markets not to depend too much on the Fed. Good luck with that, as the U.S. government shutdown extends into another week.

What we see here has everything to do with economics and nothing at all. What has the attendees spooked isn’t just economic numbers slowing down. That’s how the argument is couched. It’s the begrudgingly-admitted realization that it takes more than propping up the S&P 500 index to make the global economy actually work.

And the gnawing question is whether there is any political will to face the problem.

via ZeroHedge News http://bit.ly/2R7hb10 Tyler Durden

Another day, another key government figure exits stage left.

A. Wess Mitchell, 41, the top diplomat in charge of European affairs, will resign from the State Department next month according to the WaPo, creating a key vacancy at a time when European leaders are questioning Trump’s commitment to historic alliances.

However, unlike other prominent diplomat resignations who parted ways with the administration in silent and not so silent protest of Trump’s policies, Mitchell cited personal and professional reasons in a Jan. 4 letter of resignation he submitted to Secretary of State Mike Pompeo. His last day as assistant secretary of state for European and Eurasian affairs is Feb. 15.

“As the administration completes its second year in office, I feel that I have completed what I set out to do in taking this position,” he wrote, citing the development of a Europe strategy and helping Pompeo transition into the job after Rex Tillerson was fired in March.

“As such, I believe that the time has come for me to spend more time with my young family, who have endured many days without me over the past several months.”

As noted above, Mitchell said his resignation is not a protest of the administration’s policies or the direction of foreign policy, and he praised Pompeo’s leadership and vision: “I’m fully supportive of him, the job he’s doing, the leadership team here,” he said. “But I feel like I’ve done what I came in to do. My kids have a greater claim to my time right now than the public does.”

In September 2017, Mitchell became the first assistant secretary of state in the Trump administration confirmed by the Senate, and he will be the first Trump appointee to exit.

As the WaPo details, Mitchell came to the State Department from a think tank he co-founded, the Center for European Policy Analysis. He had just published a book, Unquiet Frontier, in which he and Jakub Grygiel criticized President Barack Obama’s foreign policy and argued for the “renovation” of alliances. Grygiel also joined the State Department, working on European issues before leaving last year.

During his 16 months heading the European bureau, Mitchell oversaw relations with 50 countries and important blocs such as the North Atlantic Treaty Organization and the European Union. Many struggle with problems of domestic turmoil or in their relations with Washington.

In Central and Eastern Europe, Mitchell scrapped the Obama-era policy of shunning authoritarian leaders over human rights violations and treated them as potential partners. To the alarm of human rights advocates, Hungary’s foreign minister came to Washington for a series of high-level meetings arranged by Mitchell with Pompeo and John Bolton, the national security adviser.

Mitchell, a fan of nuanced realpolitik, considered the pivot necessary to counter the spread of Russian and Chinese influence through massive energy deals and infrastructure loans.

“We have to compete for positive influence,” he said. “What we can’t do is continue the practice of the recent past — of approaching a NATO ally with whom we have some legitimate disagreements on domestic policy, approaching them from a position of criticism, freezing them out of meetings, criticizing them publicly, and then somehow assuming that those countries are going to remain westward looking in their strategic orientation.”

Mitchell sounds some of the same concerns, though he is less confrontational in tone. He said international alliances are advantageous to the United States, but Europe and other allies must share more of the costs when the U.S. national debt is $21 trillion and counting.

“A debt that size, with the strategic commitments the United States has in East Asia and Europe, the defense outlays that the American public is sustaining, for allies who do not spend, who congenitally and systemically refuse to spend more on their own defense, and in many cases, give American businesses an unfair shake in trade — that’s not sustainable,” he said.

But he insists the United States remains committed to its major alliances, especially NATO.

“I know there is this idea out there” to the contrary, he said. “Nothing could be further from the truth. I think it’s important to remember that our diplomats represent all of America. And the alliances as we’ve been running them, from the standpoint of a lot of people in Middle America, it is a fair and legitimate question how we get those burdens right, how we get those balances right.”

Mitchell said he is proud of his work putting together a European component in the national and defense security strategies, emphasizing burden sharing, which is how diplomats describe getting allies to increase their defense spending.

“We’re entering an era of big-power competition,” he said. “The West, U.S. and our allies are underprepared for that transition.”

* * *

Mitchell will join a revolving door of senior officials leaving the Trump administration at the beginning of its third year. The departure comes almost a year after H.R. McMaster, the national security adviser who was instrumental in bringing Mitchell to the administration, was abruptly dismissed. It also creates another vacancy in the ranks of senior officials at the State Department. Currently, six of the 24 spots are awaiting Senate confirmation.

Mitchell does not have another job lined up, beyond teaching his son to throw a baseball and taking his daughter to her first ballet lessons.

“I have two big reasons to do this,” he said of his resignation. “One is named Wesley. The other one is named Charlotte.”

via ZeroHedge News http://bit.ly/2R1Qhb3 Tyler Durden

US equity markets have been a one-way trade lower since the open, erasing all of Friday’s gains as China macro disappointed and trade-deal headlines spooked investors…

Dow Futures are down over 300 now…

And all the majors have erased Friday’s gains…

Notably, all the major US indices remain above their 50DMAs but those are critical levels to watch if today’s selloff accelerates…

 

via ZeroHedge News http://bit.ly/2REWUoI Tyler Durden

Two crew members died and two others were injured after a Russian Tu-22M3 supersonic strategic bomber has crashed in northwestern Russia while trying to make a landing at an air base near the city of Olenegorsk in Russia’s Murmansk region during a sudden snowstorm, according to RT.

CNN reported that the incident occurred at 5:40 am ET. The aircraft had four crew members – a commander, co-pilot, navigator and operator – on board. It wasn’t immediately clear which had been killed.

The aircraft was destroyed on impact, though, seemingly miraculously, two crew members managed to survive and were taken to the hospital. The storm is reportedly a rare kind that only happens in the Arctic. According to RT, it is almost impossible to predict and can develop very rapidly.

The Tupolev Tu-22M3 is a strategic, nuclear-equipped supersonic long-range bomber that has been operational since the late 1980s. According to the Russian Defense Ministry, the crashed aircraft had no weapons on board. The air base near Olenegorsk is operated by a branch of the Russian Air Force that controls long-range fighters and is one of several where Tu-22M3s are deployed.

In addition to being capable of performing nuclear attacks, the Tu-22M3 can be equipped with conventional weapons and weapons enabling it to carry out anti-ship missions.

The crash occurred shortly after Russia carried out its first test of a new hypersonic missile that President Vladimir Putin said will be able to penetrate NATO anti-missile defenses.

via ZeroHedge News http://bit.ly/2MnJ8Rt Tyler Durden

It appears the White House is ready to stoke the flames of anti-Maduro unrest following Monday’s dramatic failed military revolt launched by 27 low-ranking officers and their subsequent arrests in the Cotiza neighborhood of Caracas, which sparked overnight protests and sporadic clashes with police after opposition leader Juan Guaido made a broad appeal to the military in a speech, urging them to demand Maduro step down. Guaido and other opposition leaders in the National Assembly have declared Wednesday a nation-wide protest day seeking to topple the regime — itself a historic date commemorating the end of Venezuela’s military dictatorship in 1958.

On Tuesday US Vice President Mike Pence urged the Venezuelan people to “make your voices heard” in follow-up to Guaido’s risky appeal, which appears a continuation of Secretary of State Mike Pompeo’s comments throwing the United States’ full weight behind Venezuela’s opposition seeking to depose President Nicolás Maduro, which he made over a week ago while in the Middle East after Maduro was sworn in to a widely contested six-year second term. 

As the good people of Venezuela make your voices heard tomorrow, on behalf of the American people, we say: estamos con ustedes. We are with you. We stand with you, and we will stay with you until Democracy is restored and you reclaim your birthright of Libertad. pic.twitter.com/ThzIAqBoRn

— Vice President Mike Pence (@VP) January 22, 2019

VP Pence’s words were issued in a video posted to social media wherein he asserted, “Nicolas Maduro is a dictator with no legitimate claim to to power.” The video begins with Pence greeting in Spanish “Hola, I’m Mike Pence” but ending with a somewhat threatening tone aimed at the Maduro regime: “Vayan con Dios!” or “Go with God.”

Pence also praised Guaido, head of the opposition held National Assembly who previously called himself Venezuela’s “legitimate” power, as the “courageous” leader of “the last vestige of democracy in your country,” referencing the legislative body. This week the government-stacked Supreme Court declared it would throw out recent measures by the National Assembly that declared Maduro’s presidency illegitimate.

Pence said in the video he was delivering the message on behalf of Trump and the American people. Referencing the planned Wednesday protests, the vice president said: 

As you make your voices heard tomorrow, on behalf of the American people, we say to all the good people of Venezuela, ‘Estamos con ustedes,’ we are with you.”

The country remains on edge Tuesday as following the mutiny and subsequent successful government crackdown, which further involved the rebellious unit briefly kidnapping several officials stealing weaponry at a police outpost a mere kilometers from the presidential palace, pockets of anti-Maduro protests were sparked in the capital city demanding the release of the detained soldiers, whose actions the government condemned as “treasonous” and “motivated by the dark interests of the extreme right,” according to a statement announced on state TV. Maduro’s right-hand man, Diosdado Cabello, also boasted on Twitter while speaking of the rebels: “They were neutralized, surrendered and captured in record time.”

Under constitution of #Venezuela Maduro not legitimately elected President. When vacancy exists it is filled by National Assembly President until new election called. Last night a National Guard unit pledged it would follow constitution & regime responded with its own forces. https://t.co/Du8tE1QazP

— Marco Rubio (@marcorubio) January 21, 2019

Pence’s video remarks calling Maduro a “dictator” and essentially calling for a coup comes after months of both the Trump administration and US Congressional leaders becoming increasingly unrestrained in publicly calling for outright regime change. After Monday’s coup attempt Florida Senator Marco Rubio went so far as to encourage more such military defections. 

Meanwhile Venezuelan Foreign Minister Arreaza just days ago told Democracy Now that “Nothing that the opposition does is without the permission or authorization of the State Department… They say, ‘We have to make consultations with the embassy. We have to make consultations with the Dept of State.'”

via ZeroHedge News http://bit.ly/2WaUgWA Tyler Durden

Tucker Carlson excoriated famous liberals and a few anti-Trump GOP who called for the harassment, assault and murder of a group of Kentucky high school students who were falsely accused of bigotry against a Native American man, Nathan Phillips, at a pro-life demonstration at the Lincoln Memorial in Washington D.C. 

Based on an out-of-context “staredown” between student Nick Sandmann and Phillips, high-profile liberals across Twitter went on a blitzkrieg of fake news over the weekend – falsely claiming that the Covington High School group harassed Phillips while chanting “build the wall,” which never happened. 

Once footage emerged of the entire incident, however, it became clear that the left had gotten it completely wrong; Phillips had approached the teens, while a group of Black Israelites – considered to be a hate group by the Anti-Defamation League – hurled racial insults at the students. 

After the truth emerged, famous liberals who were frothing at the mouth went on a mad scramble to delete their tweets full of hate, slander and disinformation. The internet never forgets, however, and neither does Tucker Carlson: 

MUST WATCH: This @TuckerCarlson monologue calling out famous adults who put the Covington Catholic High School boys in danger, some even fantasizing about assault & murder, is one of the best he’s ever done. pic.twitter.com/xQYGcYyihG

— Robby Starbuck (@robbystarbuck) January 22, 2019

 

via ZeroHedge News http://bit.ly/2sFzlgE Tyler Durden