Tag: news

WTI Drops After Bigger Than Expected Cushing, Product Builds

WTI has soared since last night’s API-reported surprisingly-large crude draw (Oct above $67), but is falling back after DOE reported bigger than expected inventory builds at Cushing and in Gasoline and Distillates (despite a crude draw).

Bloomberg Intelligence Energy Analyst Fernando Valle notes that peak summer driving season may be shrinking in the rear-view mirror, but U.S. refineries are running like it’s the Fourth of July as the availability of cheap crude and wide margins encourages them to keep pumping out petroleum products. Export markets will have to absorb that output to keep margins wide. Gasoline looks particularly vulnerable, with the upcoming switch to winter grades likely to force a sell-off.

API

  • Crude -5.17mm (-2mm exp)

  • Cushing +195k (+900k exp), Genscape +519k

  • Gasoline -930k (-500k exp)

  • Distillates +1.8mm (+1.5mm exp)

“The API inventory data published after close of trading yesterday are lending buoyancy to prices this morning,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “Thus the official inventory data this afternoon are also likely to show a more marked inventory reduction.”

DOE

  • Crude -5.84mm (-2mm exp)

  • Cushing +772k (+900k exp), Genscape +519k

  • Gasoline +1.20mm (-1.05mm exp)

  • Distillates +1.849mm (+1.5mm exp)

Having flip-flopped between draws and builds for the last six weeks, crude inventories were expected to draw this week and did moire than expected and more than AP reported. However, Cushing stocks increased for the second week in a row and distillates and gasoline saw bigger than expected inventory builds.

Production increased last week to 11.00mm (remember this now rises and falls in 100k increments only)…

 

A draw could “reignite concerns of a tightening global oil market place,” Phil Flynn, senior market analyst at Price Futures Group, says, and from last night’s API print, it did but the bigger than expected Cushing and product builds stalled the gains…

Overall the market is still down about 10 percent from earlier this summer on concerns surrounding the U.S.-China trade war and potential fallout from Turkey’s economic crisis.

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WaPo: Despite Talk Of Trump Impeachment After Cohen Betrayal, Charges Unlikely

The Washington Post writes on Wednesday that former Trump attorney Michael Cohen’s claim that he broke campaign finance laws at the direction of then-candidate Trump may spark calls to impeach, however even if true it “probably will not have any legal consequences for the president while he is in office,” according to legal analysts. 

The 51-year-old Cohen, Trump’s lawyer for a decade, pleaded guilty on Tuesday to campaign finance violations and other charges, including bank fraud totaling “well over $20 million.” The alleged campaign finance violations in connection with paying hush money to two women claiming to have had affairs with Trump, however, are at the heart of what many think could be the start of impeachment talks (since that whole Russia thing hasn’t panned out so far). But even if campaign finance laws were broken, WaPo says it may not matter: 

Such an explosive assertion against anyone but the president would suggest that a criminal case could be in the offing, but under long-standing legal interpretations by the Justice Department, the president cannot be charged with a crime.

The department produced legal analyses in 1973 and 2000 concluding that the Constitution does not allow for the criminal indictment of a sitting president. –WaPo

Supporting this notion, special counsel Robert Mueller admitted in May that he will follow DOJ guidance and not indict President Trump as part of the Russia investigation. 

“All they get to do is write a report,” said Trump attorney Rudy Giuliani.

Giuliani, himself a former federal prosecutor and mayor of New York City, also told Fox that Mueller’s investigators have not responded to five information requests from the president’s team. That has forced Trump’s legal team to push off making a decision about whether the president will sit for an interview with the special counsel — a decision they had hoped to reach by Thursday.  –Fox News

And as far as campaign finance violations go, the Post notes that “[Mueller] determined months ago that allegations of campaign finance violations involving payments to women before the presidential election were outside the scope of his mandate to investigate whether the Trump campaign coordinated with Russia’s operation to influence the vote.”

Meanwhile, Deputy Attorney General Rod Rosenstein also admitted in May that Trump can’t be indicted: 

“The Department of Justice has in the past, when the issue arose, has opined that a sitting President cannot be indicted,” Rosenstein said. “There’s been a lot of speculation in the media about this, I just don’t have anything more to say about it.”

In a series of memorandums, the Justice Department’s Office of Legal Counsel concluded that indicting a sitting president would violate the Constitution by undermining his ability to do his job. Those memos, too, though, said the answer was a matter of structure and inference.

The Justice Department’s regulations require Mr. Mueller, the special counsel, to follow the department’s “rules, regulations, procedures, practices and policies.” If the memos bind Mr. Mueller, it would seem he could not indict Mr. Trump, no matter what he uncovered.-NYT

Impeachment?

If charges can’t be brought against Trump, that leaves impeachment as the only recourse to remove Trump from office over paying two women to keep quiet about alleged extramarital affairs – which the Post calls “an unlikely outcome while Republicans hold Congress but a potential agenda item for Democrats should they take control of the House after the midterm elections.“

Democrats have been split on whether calling for Trump’s impeachment is politically astute before November. But Cohen’s plea could revise that calculation and pressure Democrats to promise to launch hearings should they win the House, which has the constitutional authority to initiate impeachment proceedings.

This is a very big deal. The president of the United States has been directly implicated in federal crimes, and implicated not by some enemy but by his own personal lawyer, said Neal Katyal, a US solicitor general in the Obama administration who is now a white-collar criminal defense attorney. 

That said, Obama settled one of the largest fines related to campaign finance violations ever handed down. On Wednesday, President Trump tweeted: “Michael Cohen plead guilty to two counts of campaign finance violations that are not a crime. President Obama had a big campaign finance violation and it was easily settled!“

And in 2013, Politico noted: 

President Barack Obama’s 2008 campaign was fined $375,000 by the Federal Election Commission for campaign reporting violations — one of the largest fees ever levied against a presidential campaign

Now if Cohen has evidence of a “conspiracy to collude” with Russia, as his attorney Lanny Davis just announced, it could be a game changer.

Then again, if Cohen had evidence of collusion with Russia, would Mueller have referred his “smoking gun” defendant to the Southern District of New York? 

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Existing Home Sales Tumble As Home-Buying Sentiment Hits Lehman Lows

After June’s dismal US housing data, hope was high for a rebound in July but it was crushed as existing home sales tumbled 0.7% MoM (against expectations of a 0.4% jump). This is the longest streak of declines since the taper tantrum in 2013.

  • Single-family home sales fell 0.2% MoM (-1.2% YoY) to annual rate of 4.75 million

  • Purchases of condominium and co-op units dropped 4.8% MoM (-3.3% YoY) to a 590,000 pace

This is the weakest SAAR existing home sales (5.34mm) since Feb 2016…

The median sales price increased 4.5% YoY to $269,600, but dipped MoM (seasonal norm)

Lawrence Yun, NAR chief economist, says the continuous solid gains in home prices have now steadily reduced demand.

“Led by a notable decrease in closings in the Northeast, existing home sales trailed off again last month, sliding to their slowest pace since February 2016 at 5.21 million,” he said.

“Too many would-be buyers are either being priced out, or are deciding to postpone their search until more homes in their price range come onto the market.”

“In addition to the steady climb in home prices over the past year, it’s evident that the quick run-up in mortgage rates earlier this spring has had somewhat of a cooling effect on home sales,” said Yun.

“This weakening in affordability has put the most pressure on would-be first-time buyers in recent months, who continue to represent only around a third of sales despite a very healthy economy and labor market.”

Total housing inventory at the end of July decreased 0.5 percent to 1.92 million existing homes available for sale (unchanged from a year ago). Unsold inventory is at a 4.3-month supply at the current sales pace (also unchanged from a year ago).

And finally a glance at the following chart shows that the US housing market is in freefall – not what record high stocks would suggest…

Perhaps this helps explain it – Sentiment for Home-Buying Conditions are the worst since Lehman…

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San Francisco Man Prevented from Turning His ‘Historic Laundromat’ Into Apartment Building Is Suing the City for $17 Million

Robert Tillman, the owner of San Francisco’s most famous laundromat, is suing the city for repeatedly frustrating his attempts to build a code-compliant, 75-unit apartment building on land he owns in the housing-starved city.

Tillman has been trying to get approval for his project since 2014. He has faced always-heated, ever-shifting objections from local activists and allied politicians. At various times they have complained that he is not adding enough below-market rate units, that his laundromat is of historic significance, or—most recently—that it might cast shadow on the playground of a nearby school. (The playground is already shaded by trees.)

That last objection was accepted by the city’s Board of Supervisors in June at the urging of Supervisor Hillary Ronen. Ronen represents the Mission District, where Tillman’s laundromat is located; she is a close ally of the activists trying to kill Tillman’s project; and she had demanded that a new shadow study (over and above the two already performed) needs to be conducted.

In a lawsuit filed Monday, Tillman’s lawyers say that neither state nor local law requires further study of shadow impacts. It is, they argue, a concocted pretext to prevent the potential housing from ever being built.

“In this case, a single Board member [Ronen] allied with special interest groups in the Mission district seeking to acquire the property at a below-market price, or otherwise to block it entirely, single-handedly killed the project after the Petitioner [Tillman] refused to sell the property to the activists at the discounted price demanded by those groups,” his lawsuit reads.

San Francisco requires that shadow impacts be studied only when they have a chance of impacting a public park managed by the city’s Parks Department. Staff at San Francisco’s own Planning Department say the school does not fall into that definition, and the school itself has offered no objection to the possibility of shadow from Tillman’s planned building.

Nevertheless, Ronan says the school’s park could at some point be made available to the public and thus should be studied further. As Tillman’s suit notes, if this logic were accepted, more than just his project would be at risk. “Over 250 schools are located in the City,” the complaint states.

Tillman is suing on several counts, arguing that Ronen’s explicit prejudice against his project has denied him a fair hearing, that the constant delays are a violation of his due process rights, and that the repeated use of these delays to pressure him to sell his land amounts to a taking under the Fifth Amendment of the U.S. Constitution.

Asked by Mission Local for comment, Ronen replied: “What can I say? I look forward to the court deciding which is more important: a developer’s profits or children’s access to sun on a playground.”

Given that San Francisco is suffering from one of the most severe housing shortages in the country, and given that the park she is allegedly so concerned about is already shaded, I would hazard to say that perhaps just in this one instance, the profits Tillman might earn from building an apartment building may be more important than whether sunlight falls on certain small patches of land.

Bonus links: Read Reason‘s previous coverage of Tillman’s case here and here.

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Goldman Slashes 10-Year Bond Yield Forecasts Across The Globe

Repeating what has become an annual tradition, this morning Goldman – which started off the year expecting higher 10Y yields around the globe on assumptions of rising economic growth and stronger inflation – cut its bond yield forecasts for all the G-10 countries based on changes in the outlook for monetary policy and inflation in several regions and less recovery in term premium in the U.S.

“We have generally revised our path for yields lower on two grounds: First, we tweak our forecasts to reflect changes to local policy expectations and inflation trajectories.  Second, we now expect a smaller amount of term premium repricing in the US and, by extension, smaller spillover effects into other non-US yields” Goldman’s Praveen Korapaty wrote however adding that “the direction of travel is still higher yields across the G10.”

Goldman’s changes to the path for US, Canada, and Norway bond yields “are modest for 2018” while elsewhere the bank “revised down its 10-year yield forecasts more sharply.” The reason is that In both the Euro area and Japan, we account for a later start to normalization following ECB and BoJ forward guidance this summer and a weaker inflation path. In the UK, we lowered the path for Gilts by 50-60bp in 2018 as we mark-to-market political risks associated with Brexit.

Downward adjustments to end-2018 forecasts for U.S., Canada and Norway yields were “modest”; expectations were lowered “more sharply” for euro-area and Japan yields “based on later start of policy normalization by the ECB and the BOJ’s forward guidance from July, as well as a weaker inflation path.”

Broken down by region, for the US, Goldman cut its end-2018 forecast for the 10-year Treasury yield to 3.10% from 3.25% and lowered the cycle peak level by 20bp to 3.4%. The revision to U.S. forecasts reflect lower expectations for term premium recovery, now forecast to increase by 30bp-40bp. Goldman’s clarifies that its Fed call is unchanged, with another six hikes expected, one per quarter until the fed funds rate reaches a range of 3.25% to 3.5%.

Elsewhere, Goldman predicts that 10-year German, U.K. and JGB yields will end 2018 at 0.5%, 1.45% and 0.12% respectively,

Goldman’s Euro-area growth remains above trend but slow relative to 2017, and underlying core inflation should remain stuck at 1%, leaving ECB unlikely to raise deposit rates before next summer, Goldman predicts.

The ECB appears to share a similar outlook, suggesting that it is unlikely to raise the deposit rate before next summer. As a result, pricing of deposit rate hikes in EONIA forwards has dropped a fair bit (Exhibit 2), dragging 10y core yields lower in the process.

There’s also less upward momentum in term premium due in part to “an expected overhang from the Italian budget standoff.”

Goldman also writes that that markets are underpricing what we think will be the likely path of policy rates in the Euro area—for instance, our economists expect a 20bp hike to the deposit rate by 4Q2019 (likely in October), and about 70bp by YE2020, but EONIA forwards are pricing only a ~40bp increase. Over the course of next year and 2020, as the ECB.

For the UK, Goldman concedes that “Projecting UK yields is a trickier exercise, given the uncertainty around a Brexit agreement,” Goldman says; their baseline scenario is that PM May gets a withdrawal treaty through parliament very late in 2018 or in 1Q 2019. Remote chance of no deal nonetheless requires “a risk premium.”

In Japan, “recent forward guidance from the BoJ effectively rules out further ‘tweaks’ to monetary policy, at least until the effects of a consumption tax hike begin to dwindle.”

And here is Goldman’s detail justification of the latest downward yield revision:

Since we last published these forecasts, several facts have changed that necessitated updates to our projections, including ECB and BoJ forward guidance, political developments in Italy, and more modest assumptions for term premium repricing.

As can be seen in Exhibit 1, our new projections are lower across the board for this year, although the direction of travel is still towards higher yields.

We now forecast that US 10y yields will be around 3.10% (vs. 3.25% previously) by year-end 2018. 

The changes we have made to European and Japanese forecasts are more substantial—with 10y German, UK, and Japanese rates ending the year at 0.5%, 1.45% and 0.12% respectively. These revised forecasts are still 10-20bp above forwards for end-2018, except in the case of Japan, where our projection is modestly below the forward.

Finally, Goldman’s long term forecast through year-end 2021, are only slightly lower in the case of the US, Germany, Sweden, and Norway (by 15-25bp), whereas revisions for Japan, Canada, Australia and New Zealand are more substantial (45-60bp).

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Cohen Hush Money to Trump’s Lovers May Have Meddled More Than Any Russians: Reason Roundup

All political hell broke loose Tuesday evening, as President Trump’s former campaign manager, Paul Manafort, and former personal lawyer, Michael Cohen, were both convicted of fraud in federal court.

Cohen pleaded guilty to five counts of tax evasion, one count of lying to a financial institution, and—most importantly—two counts related to making illegal campaign contributions, telling the court that in 2016, he had paid Stormy Daniels and former Playboy model Karen McDougal to keep quiet about trysts with “a candidate” and this candidate later reimbursed Cohen. (See Cohen’s plea agreement here.)

Some suggest the dirt buried by Cohen’s hush money may have swung votes in the 2016 election—that the president romping about with sex workers while his wife was at home pregnant may have been the proverbial bridge too far for certain evangelical conservative voters. “The money spent to silence these women had a bigger impact than anything Russia spent on Facebook,” suggests Federalist publisher Ben Domenech on Twitter.

“Even if the payment had been totally legal, it would’ve constituted a deliberate, immoral, classically politician-like effort to mislead voters about the choice before them,” writes Conor Friedersdorf at The Atlantic.

“Trump’s infidelities were obviously well-known but it’s not crazy to think the particular egregiousness of this one might’ve moved a small % of voters,” tweets journalist Michael Tracey.

Even Cohen’s lawyer is now calling for Trump’s head:

But a few folks have been challenging the dominant Cohen narrative from a non-#MAGA position, suggesting that as much as some may want the Cohen plea to mean Trump and his team are uniquely guilty, it doesn’t.

“It’s impossible to do high-level politics or business w/o committing technical criminal violations,” tweets Clark Niely, vice president at the Cato Institute, in response to Friedersdorf’s article. “Upon reaching a certain level in those circles, you get a tacit free pass to commit a fairly broad range of non-violent crimes.” And “that free pass is revocable but rarely revoked—because mutually assured destruction.” Read Niely’s whole thread here. “FWIW, I’m utterly underwhelmed by the Cohen [charges],” he concludes.

Indeed, I assume DOJ could get nearly every high-ranking campaign official/fixer to cop a plea similar to Cohen’s—ticky-tacky campaign finance violations, seriously? ALL campaigns commit them. Every. Single. One.

It’s possible, however, that we’re just getting started on the Cohen admissions…

Staff at the National Enquirer are also coming under federal fire for their role in suppressing the sex stories, notes Justin Miller at The Daily Beast.

Here’s what Trump, ever the grownup, had to say:

Meanwhile, a jury convicted Manafort of eight counts of tax evasion and bank fraud. Unlike with Cohen, Manafort’s legal woes are independent of his work for Donald Trump and his campaign. This allowed Trump and his cheerleaders to focus on Manafort when asked questions yesterday, and it may work to their advantage in spinning all of this as things that don’t implicate Trump.

Of course, Trump had every reason to know damn well that Manafort was a snake when he took him in, to borrow one of the president’s favorite parables. When Manfort offered to do pro bono work for the Trump campaign, Manfort’s sketchy dealings were already very well-known. (I remember talking to a senior person on the Trump campaign who was furious when Manafort was brought onboad. When I asked what made Manafort bad, he didn’t know where to begin.)

As Scott Shackford wrote here last night:

Manafort is one of many, many folks with troubled backgrounds and histories of bad behavior who have worked with Trump and influenced his policy leanings….Those of us who care little about the highly politicized fight over “collusion,” or who take a dim view of the absurd idea that Russian social media buys made people vote for Trump, should still recognize that Manafort representats a much more dangerous problem: Trump’s terrible judgement….No amount of “Deep State” conspiracy complaints and screams of “Witch Hunt” can erase the reality that the former head of his campaign was financially beholden to a foreign power.

FREE MARKETS

A new fight over paid parental leave is heating up, this time pitting libertarians and Republicans against each other. On the latter side, Marco Rubio and others are proposing a tweak to Social Security that would let people use some of their alleged future benefits upon the birth or adoption of a child. They have been framing this an alternative to more invasive proposals seeking to mandate paid leave for new parents—which, yes, obviously.

But that doesn’t necessarily make it a fiscally prudent policy, folks like Cato Institute analyst Vanessa Brown Calder and Mercatus Center economist Veronique de Rugy have been warning. Yesterday, the Wall Street Journal editorial board also weighed in against Rubio and co.’s proposal. “Republicans should consider the consequences before signing up for a major expansion of the entitlement state,” the Journal said. More here.

QUICK HITS

  • Actress Asia Argento denies allegations published about her in The New York Times earlier this week:
  • Why is the Department of Housing and Urban Development going after Facebook?
  • Republican Rep. Duncan Hunter (Calif.) and his wife were indicted yesterday for allegedly using campaign money for personal expenses, including dental work, video games, tequila shots, and travel.

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US Special Forces Soldier Arrested Smuggling 90lbs Of Cocaine Into Florida

Via TheAntiMedia.com,

A U.S. special forces soldier is accused of attempting to smuggle 90 pounds of cocaine from Cali, Colombia, into the Eglin Air Force Base in Florida.

Army Master Sgt. Daniel Gould, assigned to the 7th Special Forces Group, reportedly tried to smuggle the drugs on a military plane, but they were caught before the aircraft ever left Colombia and before the drugs made it onto the plane.

He was already back in the United States but was promptly arrested by the DEA after the two backpacks of cocaine were discovered.

“We are aware of recent allegations concerning a U.S. soldier assigned under U.S. Army Special Operations Command for reportedly attempting to smuggle narcotics from Colombia into the U.S.,” said Army spokesman Lt. Col. Robert Bockholt, as reported by NBC News.

“We are cooperating fully with law enforcement officials concerning this matter. In order to protect the integrity of the investigation and the rights of the individual, there is no additional information available for release at this time.“

Government employees have been caught trafficking drugs before, from TSA agents to police officersto other soldiers.

The CIA, too, has been implicated in vast drug operations, most notably its role in the explosion of crack cocaine in inner-cities in the 1980s.

Even the DEA, tasked with preventing the flow of drugs, has facilitated their proliferation in the name of making busts.

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Yield Curve Collapses After US Denies NAFTA Deal: “Major Issues Remain Outstanding”

Late on Tuesday night, in a move which we said could be related to Trump-related tumult, Politico reported that the Trump administration is planning to announce Thursday that it has reached a breakthrough in NAFTA talks with Mexico. 

Citing three unidentified people close to the talks, Politico said that this “handshake” deal announcement on Thursday, would clear the way for Canada to rejoin negotiations to revise the free trade pact. The news promptly sent the loonie and peso higher.

However, shortly after the announcement, both Mexico and Canada pushed back against the report, and on Wednesday morning, a spokesperson for the US Trade Representative confirmed that “there is no deal yet” as “major Nafta issues remain outstanding.”

Predictably, the latest denial hit both the MXN and CAD lower…

… while US 10Y futures jumped to highs, rising as high as 120-22+, sending yields to session lows of 2.812%, the lowest level since July 6, and slammed the yield curve even flatter, pushing the 2s10s curve to 21bps, the flattest level all the was back to August 2007.

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Trump Hits Back At Cohen, “Strongly Suggests” Anyone Looking For “Good Lawyer” Turn Elsewhere

President Trump fired off a tweet early Wednesday slamming his former personal attorney, Michael Cohen, warning people: “If anyone is looking for a good lawyer, I would strongly suggest that you don’t retain the services of Michael Cohen!”

Trump’s tweet comes on the heels of Cohen pleading guilty on Tuesday to helping the President pay hush money to two women.

And as we reported early Wednesday, Cohen now wants to tell Mueller that Trump knew of an infamous 2016 meeting at Trump Tower and the Russian hacking of Democratic institutions before they took place, Cohen’s attorney Lanny Davis told MSNBC, deciding that any “attorney client” privilege in this case is strictly optional.

“Mr. Cohen has knowledge on certain subjects that should be of interest to the special counsel and is more than happy to tell the special counsel all that he knows,” Davis told MSNBC on Tuesday.

“Not just about the obvious possibility of a conspiracy to collude and corrupt the American democracy system in the 2016 election, which the Trump Tower meeting was all about, but also knowledge about the computer crime of hacking and whether or not Mr. Trump knew ahead of time about that crime and even cheered it on.”

Davis is also setting up a $500,000 GoFundMe account for Cohen – just 2.5% of the $20 million Cohen lied on loan applications to obtain:  

Davis told MSNBC’s Morning Joe:  

 “In order to get Michael to be able to help, we need help on this fund, MichaelCohenTruthFund.com, we ask everybody to help Michael Cohen tell the truth about Donald Trump.”

The fund is up to nearly $19,000 as of this writing: 

 

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“Thanks Mr.Trump”: State Media Mocks US President For Helping Make China Great Again

Authored by Kinling Lo via The South China Morning Post,

Broadcaster’s English-language video lists all the ways Donald Trump’s trade war has helped China improve itself

China’s biggest state broadcaster has produced a short, satirical video mocking the US president that opens with the line: “Thanks Mr Trump, you are GREAT!”

The English-language footage, uploaded on YouTube on Monday night, takes the form of a letter to Donald Trump that thanks him for all the things he has done for China, and highlights many of the country’s concerns in the ongoing trade dispute.

The film by China Global Television Network (CGTN) sarcastically thanks Trump for helping the rest of the world to “bond” and galvanising China into making economic reforms that helped it lure major foreign investors such as Tesla.

The clip has since been removed from YouTube and Twitter.

It is one of the few occasions that state media has personally targeted the US president since the start of the trade war, with most reports taking a less confrontational tone.

The footage, released before Trump was embroiled in the latest controversy concerning the guilty plea of his personal lawyer Michael Cohen and conviction of former campaign chief Paul Manafort, appears designed to promote China’s cause before the latest round of US tariffs are expected to take place on Thursday.

“Dear Mr Trump, Thank you for the shock therapy about how far apart China and the US are and why it’s imperative they get on the same page,” the letter, read out by CGTN business anchor Cheng Lei, says.

“Thank you for re-instilling in the Chinese a sense of HUMILITY. How can there be enough gratitude for highlighting the foibles of overconfidence and self-congratulation, never a virtue except in your case,” Cheng, a former reporter for the US CNBC network, continues.

The letter covers a number of issues the trade war has brought into focus and explains how China has benefited from the situation.

At one point it even argues that China’s retaliatory tariffs on US food and drink imports will help improve the nation’s health, saying:

“On behalf of doctors, thank you for pointing out the need to wean off American goods like bourbon and bacon.”

Cheng expressed “agreement” with Trump’s stance that the “WTO needs reform”, and went on to thank the US government for reports that spelt out “China’s shortcomings” that had helped it to make “tough reforms” that helped bring in new investors, adding: “Hello, Tesla”.

Last month the US electric car maker announced plans to build a new plant in Shanghai, the first in China that will be wholly owned by a foreign company.

CGTN, which is broadcast in more than 100 countries from the US to Kenya, is an offshoot of the state broadcaster CCTV.

It was rebranded in 2016 as a news channel designed to cater to a foreign audience’s tastes.

It is also active on social media platforms – including Twitter, Facebook and YouTube – all of which are banned in China.

CGTN is part of a growing arm of state media designed to “tell China stories” as it make a global push to improve its soft power.

In June it started recruiting more than 350 journalists ahead for its first European hub, which will open in London later this year.

The Chinese state media outlet offered its own take on media ethics in the letter to Trump.

“Most of all, thank you for discrediting news media at large, so we need to be doubly sure that we’re not producing fake news. You are GREAT!,” Cheng said, signing off the letter with her “love”.

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