Tag: news

Bay Area residents were jolted awake early Thursday morning when a 4.4 magnitude earthquake centered on the Hayward fault near the UC-Berkeley struck, according to the U.S. Geological Survey.

The USGS initially registered it as a 4.7 magnitude quake, downgraded it quickly to a 4.5 and then at 3:28 a.m. downgraded it again to a 4.4

The quake struck at struck at 2:39 a.m. and was felt throughout the East Bay, North Bay and San Francisco. The USGS website said people reported feeling the quake 40 miles (64 kilometers) south in San Jose.

While many were jolted out of their beds, there was no preliminary reports of damage. Predictably, residents immediately took to social media to describe their emotional state:

Holy shit was that an Earthquake?

— Adam Singer (@AdamSinger) January 4, 2018

 

Everyone calm down- that was just Berkeley collapsing under the weight of its own self-importance. #earthquake

— ❌uertespin (@Deaderspin) January 4, 2018

The NorCal quake drew some attention away from the winter cyclone bearing down on the east coast that was supposed to bring up to a foot of snow and record low temperatures in some areas.

The local CBS affiliate collected responses from locals who were jostled awake by the tremors.

Gina Solis posted on the KPIX 5 Facebook page that it rocked her home in San Rafael. “I felt it in San Rafael,” she posted. “It shook our house and shook the bed big time!!!”

Pamela Jones posted: “Felt stronger than 4.5, in Concord.” In the South Bay, Chris Defayette said it was “a quick jolt.”

“Yes in Campbell was a quick jolt and rocking,” DeFayette posted.

via RSS http://ift.tt/2CsbFzL Tyler Durden

Another day, another record high in markets around the globe as stocks – contrary to what Jeremy Grantham expects  – have already entered the blow-off top mania phase. U.S. equity index futures rise, following a jump in European and Asian shares, while the Nikkei exploded higher after being held back for the past two days by holidays. Base metals and the euro gain.

European stocks rose the most in over two weeks on an acceleration in risk euphoria and signs the global economic expansion of 2017 remains intact. European bourses (Eurostoxx 50 +0.8%) trade higher across the board with all ten sectors in the green, as builders and automakers lead the advance. Gains are relatively broad-based with the exception of consumer staples which trades relatively flat, financials supported post-FOMC minutes. Today has seen a turn in sentiment for UK retail names with Debenhams (tumbling -17.7%) taking the shine off the sector after a disappointing sales update which saw the Co. cut their guidance.

Confirming Europe’s upward economic momentum, Markit reported the best EU Composite PMI since February 2011, printing at 58.1, above last month’s 58.0 and the expected 58.0. The breakdown as follows:

• EU Markit Comp Final PMI (Dec) 58.1 vs. Exp. 58.0 (Prev. 58.0), EU Markit Services Final PMI (Dec) 56.6 vs. Exp. 56.5 (Prev. 56.5)
• German Markit Comp Final PMI (Dec) 58.9 vs. Exp. 58.7 (Prev. 58.7), German Markit Services PMI (Dec) 55.8 vs. Exp. 55.8 (Prev. 55.8)
• French Markit Comp PMI (Dec) 59.6 vs. Exp. 60.0 (Prev. 60.0), French Markit Services PMI (Dec) 59.1 vs. Exp. 59.4 (Prev. 59.4)
• Italian Markit/ADACI Services PMI (Dec) 55.4 vs. Exp. 54.7 (Prev. 54.7)
• Spanish Services PMI (Dec) 54.6 vs. Exp. 54.7 (Prev. 54.4)

Earlier, the MSCI Asia Pacific Index headed for another record close after benchmarks in Tokyo closed at their highest in more than a quarter century, and posting their biggest one-day gains since November 2016. Japanese investors returned to the market after two extra days of holidays for the first time this year, catching up to the rest of the global euphoria with the Nikkei 225 closing up 3.3%, boosted by tech firms and banks, the best annual opening day since 1996 while the Topix index (+2.6%) closed at its best level since 1991 as brokers and oil & coal lead gains in all 33 industry groups.

In macro, the dollar slipped and U.S. Treasuries declined as minutes of last month’s Federal Reserve meeting showed policy makers continue to back a “gradual approach” to raising interest rates.

The USD unwound post FOMC minutes gains and reversed course, with the DXY trading below the 92.00 level with EUR/USD moving higher in the wake of another set of relatively strong PMI figures. The composite PMI rose to its highest level since February 2011 as Germany rose to its highest level in 80 months. AUD/NZD/CAD are all back in the ascendency vs the Greenback, with AUD/USD absorbing at least some 0.7850 offers overnight on the back of China’s services PMI beat and another rise in iron ore prices. The Kiwi has reclaimed the 0.7100 handle having tested, but not clearly breaching key tech DMAs around 0.7105-0.7100 yesterday despite a short dip below the big figure. USD/CAD still drawn to 1.2500 amidst a range up to circa 1.2550, with the Loonie supported by firm crude prices.

Core European bonds pared Wednesday’s gains and the euro advanced toward a three-year high as data showed economic activity in the euro-area accelerated to the fastest pace in almost seven years.  US Treasury yields were supported as traders lifted the odds of a Fed move by end-March, gains were limited as the minutes from the Dec. 12-13 policy meeting still lacked any explicit signal of a move in the first quarter, with some officials reiterating their concern about low inflation. “There was no suggestion that the Fed is beginning to feel concerned over the possibility of falling behind the curve,” said Lee Hardman, a currency analyst at MUFG, in a client note. “There appears to be a high hurdle for the Fed to deliver a faster pace of rate hikes beyond their current plans for three hikes in 2018. As a result, we continue to believe that the U.S. dollar will struggle to reverse last year’s weakening trend.”

Meanwhile, commodities extended a record run of gains as oil climbed from the highest close in three years. As shown in the chart below, commodities are enjoying a record run of gains that straddles the end of 2017 and the start of the new year as crude oil notches multiyear highs and investors bet that booming global manufacturing output will help to sustain rising demand for raw materials.

The Bloomberg Commodity Index, which tracks returns on 22 raw materials, posted an unprecedented 14 days of gains to Wednesday, closing at the highest since February. Bloomberg notes that the index is poised for further gains as metals and oil climb higher, supported by supply disruptions, a weaker dollar and improving demand. Palladium, a metal used in car exhaust systems, is approaching an all-time high.

The Bloomberg Commodity Index has rebounded 12 percent since mid-June. In recent days, the cold snap in the U.S., which helped to boost wheat as well as natural gas, also helping to lift the index. Still, prices remain well below the highs from 2008.

Oil climbed from the highest in three years as optimism on the global economy, cold weather and political unrest bolstered a market that’s finally shaking off a prolonged surplus. Crude is having its best start to a year since 2012, after hitting $62 a barrel in New York. Swollen inventories in the U.S. are declining and could shrink further as winter storms boost demand for heating fuel, while a strong economy underpins consumption. OPEC is continuing its fight against a global glut, while street protests are stoking concern over the stability of the group’s third-biggest producer, Iran.

“The rise in oil prices has mainly been caused by the freezing polar vortex hitting the U.S., firing up heating demand, and spurring concern about a potential impact on oil production and trade,” said Jens Naervig Pedersen, an analyst at Danske Bank A/S in Copenhagen.

Copper, a bellwether for global manufacturing, climbed 1 percent after U.S. factory output data on Wednesday beat expectations. China also imposed heavy curbs on scrap imports, leaving buyers there more reliant on mined output, which analysts see tightening in the months ahead.

The commodity rally has ignited shares of producers. BHP Billiton Ltd., the world’s largest mining company, has risen in London to the highest since 2014. BP Plc, the British oil major, posted the first back-to-back annual gain last year since 2005.

In the weeks ahead, Chinese credit data and central bank policy will be key to determining whether the gains continue, Citigroup’s Layton said. “The only reluctance that people have in terms of getting more bullish on metals and bulks is that China has clearly shifted the tone from growth targets to quality over quantity, and people don’t know what that means yet. Chinese credit numbers are going to be critical to setting the tone for the first half, and I think they’re going to be fine.”

Expected data include jobless claims. Walgreens Boots, Monsanto and Lamb Weston are among companies reporting earnings.

Bulletin headline summary from RanSquawk

• Eurozone composite PMI hits highest level since February 2011
• Crude trades in close proximity to multi-year highs amid a draw in API inventories and ongoing Iranian tensions
• Highlights today include US jobless claims, services PMI and DoE oil inventories

Market Snapshot

• S&P 500 futures up 0.1% to 2,714.50
• STOXX Europe 600 up 0.5% to 392.30
• MSCI Asia Pacific up 1.2% to 178.01
• MSCI Asia Pacific ex Japan up 0.4% to 582.18
• Nikkei up 3.3% to 23,506.33
• Topix up 2.6% to 1,863.82
• Hang Seng Index up 0.6% to 30,736.48
• Shanghai Composite up 0.5% to 3,385.71
• Sensex up 0.5% to 33,975.81
• Australia S&P/ASX 200 up 0.1% to 6,077.08
• Kospi down 0.8% to 2,466.46
• German 10Y yield rose 1.2 bps to 0.454%
• Euro up 0.2% to $1.2033
• Italian 10Y yield fell 2.7 bps to 1.798%
• Spanish 10Y yield fell 3.1 bps to 1.567%
• Brent futures little changed at $67.84/bbl
• Gold spot down 0.01% to $1,313.05
• U.S. Dollar Index down 0.1% to 92.07

Top Overnight News via BBG

• Economic output in the euro-area accelerated to the fastest pace in almost seven years as services surged while factories benefited from booming domestic demand and near-record growth in export orders
• London was the worst-performing home market in the U.K. last year for the first time in more than a decade and may be stuck there
• Donald Trump’s desire to squeeze Kim Jong Un’s regime risks being undermined by the furtive maneuvers of oil tankers at sea
• Russia Deputy Foreign Minister: warns U.S. against any intervention in Iran
• European Dec. Service PMIs: Spain 54.6 vs 54.6 est; Italy 55.4 vs 54.7 est; France 59.1 vs 59.4 est; Germany 55.8 vs 55.8 est; U.K. 54.2 vs 54.0 est.
• China Dec. Caixin Services PMI: 53.9 vs 51.8 est.
• South Africa: ANC party to consider removing Zuma as nation’s president m at Jan. 10 meeting of National Executive Committee
• API inventories according to people familiar w/data: Crude -5.0m; Cushing -2.1m; Gasoline +1.8m; Distillates +4.3m
• U.S. Data: lockup for today’s weekly unemployment claims data canceled due to weather, will be released via website
• Massive Winter Storm Threatens New York With Snow and Floods
• Calpers Seeks Manager for $40 Billion Private Equity Portfolio
• Intel, Microsoft Deal With Widespread Computer-Chip Weakness
• Debenhams Profit Warning Clouds U.K. Retailers’ Christmas
• London House Market Worst in U.K. With Price Decline Last Year
• Euro-Area Activity Accelerates to Fastest Pace Since Early 2011
• China Property Bonds Seen Facing Highest Default Risk in ’18

Asian bourses continued their rising streak, with the region trading at around 10yr highs. Japanese investors returned to the market for the first time this year, catch up play has been observed with the Nikkei 225 up 3.3%, while the Topix index (+2.6%) closed at its best level since 1991. ASX 200 (+0.1%) was buoyed by energy names yet again amid the persistent rise in crude. Elsewhere, Chinese markets made marginal gains, Shanghai Comp up a modest 0.33% and Hang Seng 0.57% with sentiment supported by Caixin Services PMI which saw its fastest growth since Aug’14. Bank of Japan Governor Kuroda says will continue patiently with easy monetary policy, adding that the economy is showing steady growth. Chinese released its latest Caixin Services PMI for December, which smashed expectations at 53.9 (vs. Exp. 51.8, Prev. 51.9), its fastest rise since Aug 2014.

Top Asian News

• Japan’s Nikkei 225 Stock Gauge Has Best Start to Year Since 1996
• Saudi Aramco Is Said to Seek Adviser for Global Gas Deals
• Reliance Communications Lenders Seen Facing Earnings Hit
• Axiata Is Said to Consider $500 Million Tower Unit IPO This Year
• Australian Pot Stocks Soar After Government Relaxes Rules
• Turkey’s Halkbank Could Suffer From Ex-Banker’s U.S. Conviction

European markets trade higher across the board (Eurostoxx 50 +0.8%) with all ten sectors in the green in the wake of a relatively upbeat Asia-Pac session after Japanese markets returned from their market holiday. Gains are relatively broad-based with the exception of consumer staples which trades relatively flat, financials supported post-FOMC minutes. Today has seen a turn in sentiment for UK retail names with Debenhams (-17.7%) taking the shine off the sector after a disappointing sales update which saw the Co. cut their guidance.

Top European News

• U.K. Said to Think Barnier Bluffing on No Brexit Deal for Banks
• Ocado Gains on Renewed M&A Speculation, Rumors of Contract Win
• Brexit, Prices Cast Shadow Over Buoyant U.K. Services Industry

In FX, the USD has reversed course and the DXY trades below the 92.00 level with EUR/USD moving higher in the wake of another set of relatively strong PMI figures. The composite PMI rose to its highest level since February 2011 as Germany rose to its highest level in 80 months. AUD/NZD/CAD are all back in the ascendency vs the Greenback, with AUD/USD absorbing at least some 0.7850 offers overnight on the back of China’s services PMI beat and another rise in iron ore prices. The Kiwi has reclaimed the 0.7100 handle having tested, but not clearly breaching key tech DMAs around 0.7105-0.7100 yesterday despite a short dip below the big figure. USD/CAD still drawn to 1.2500 amidst a range up to circa 1.2550, with the Loonie supported by firm crude prices GBP is another  gainer vs the USD, as Cable rebounds from sub-1.3500 lows with a modest beat on UK services PMI (54.2 vs. Exp.
54.1) unable to offer much traction in the currency.

In commodities, WTI and Brent crude futures trade in close proximity to recent highs (albeit WTI back below USD 62.00) with oil prices supported by a multitude of factors including last night’s draw in the APIs and ongoing tensions in Iran which has led some to speculate whether the US could remove their waiver of sanctions on Iran (given recent rhetoric from the US). Additionally, Libyan Waha oil output has risen to 272K bpd after pipe repairs. In metals markets, gold has recouped some of yesterday’s post-FOMC minutes inspired losses with prices continuing to track fluctuations in the USD. Elsewhere, Chinese steel rebar futures were seen lower overnight as concerns over weather impacts on production continue to linger. Furthermore, China have vowed to meet targets to cut steel production capacity. Libya Waha oil output rises to 272K bpd after pipe repair. Iran’s elite Revolutionary Guards have deployed forces to three provinces to put down anti-government unrest after six days of protests.

Looking at the day ahead, we have the final readings for the December services and composite PMIs across Europe and the US. In the UK, the December Nationwide House price index, November mortgage approvals and net consumer credit data will be due. Over in the US, there is the December ADP employment change print (190k expected) along with the weekly initial jobless and continuing claims. Away from the data, the Fed’s Bullard will speak at an economic convention.

US Event Calendar

• 7:30am: Challenger Job Cuts YoY, prior 30.1%
• 8:15am: ADP Employment Change, est. 190,000, prior 190,000
• 8:30am: Initial Jobless Claims, est. 241,000, prior 245,000
• 8:30am: Continuing Claims, est. 1.93m, prior 1.94m
• 9:45am: Markit US Services PMI, est. 52.5, prior 52.4
• 9:45am: Markit US Composite PMI, prior 53
• 9:45am: Bloomberg Consumer Comfort, prior 52.4

DB’s Jim Reid concludes the overnight wrap

With 2018 four days old I hope you’ve managed to keep to your new year’s resolutions so far. Mine is to drink less caffeine. If truth be told I’ve always drunk too much tea and now the twins are causing me much stress and upheaval my habit has got out of hand. So here we go….. I’m Jim Reid and I’m a tea-oholic! You’ll find me shaking at my desk this morning whilst drinking a decaf tea.

US equities’ new year’s resolution is obviously to continue to go up in 2018 and yesterday saw more fresh records after a blockbuster ISM and Fed minutes that didn’t really rock the boat. Elsewhere a lot of other assets reversed their opening day 2018 move with the dollar climbing, bond yields rallying and European stocks recovering with the weak Euro. To recap, the S&P rose 0.64% to >2,700 with gains led by energy stocks, while the Stoxx also rose (+0.48%) for the first time in four days. Core 10y bond yields fell c2bp (UST -1.6bp; Bunds -2.6bp) and Gilts fell 7.3bp to largely reverse Tuesday’s move. In FX, the USD dollar index gained 0.34% while Euro fell (-0.36%) for the first time in six days. Finally, the VIX dropped 6.35% to 9.15, marginally above its all-time low of 9.14.

On the data front, the December ISM manufacturing PMI was above expectations at 59.7 (vs. 58.2) and the second highest reading in six years. On an annual basis, the strength was also evident with the 2017 average  reading of 57.6 the best in 13 years. In the details, the ISM prices paid jumped to 69 and the gauge of new orders rose to 69.4 – the highest in c14 years.

Turning to the FOMC minutes now. They continue to favour gradual rate hikes but comments on inflation seemed a bit hawkish. On rates, most participants reiterated support for “continuing a gradual approach to raising the target range” (ie: three more hikes in 2018). On the inflation debate, participants noted that “recent readings on monthly inflation had edged up” with “many” participants expecting it to move towards target, although some thought it may stay below target longer than expected and several expressed concerns about inflation expectations. Further, participants discussed several risks that could result in a faster increase in inflation such as higher output, fiscal stimulus or accommodative financial conditions. On the flat yield curve, participants “generally agreed that the current degree of flatness….was not unusual by historical standards”, but several participants thought it required ongoing monitoring. Finally, on tax cuts, many participants expect the reforms to provide a lift to consumer spending and “a modest boost to capital spending”. The Bloomberg implied odds of a rate hike in March increased  c12ppt to 81% yesterday.

This morning, Japan’s final reading of the Nikkei manufacturing PMI was 54 (vs. 53.6 prior month) and to the highest level since early 2014, while China’s December Caixin composite PMI also beat at 53.0 (vs. 51.6 previous). Asian markets are broadly higher as we type. The Nikkei is up 2.87% after trading resumed for 2018 while the Hang Seng (+0.55%) and China’s CSI 300 (+0.51%) are up modestly. The Kospi bucked the trend to be down 0.49%.

With the global PMIs/ISM now complete, we’ve updated our usual YoY equity market performance versus the new data based on a regression between the two series over the last 20 years. At face value Europe looks very cheap with the DAX and CAC 30% and 18% lower than where the manufacturing PMIs suggest they should be given the historic relationship between the two. However if we re-benchmark the relationship and dollar adjust the YoY equity market performance we find that these two markets are 14% cheap and only 1% cheap respectively. Other European markets go from being cheap to more in line or a touch expensive (peripherals). This is obviously due to the very strong YoY performance of the Euro over the last 12 months (+15.5% vs the Dollar) that’s preventing European equities from fully benefiting in local currency terms from the strength in the PMIs. For example the DAX should be up around 43% over the last 12 months given where the PMI is but is only up 12%. However on a dollar adjusted basis the DAX is up 29% over the period.

Given the big currency swings the US market is perhaps a better template for general valuations. The regression suggests the S&P 500 should be up 25% YoY whereas it is now up around 20%. So slightly cheap given the data. If we dollar adjust everything, current equity market performance generally implies European, US, UK and Japanese PMIs in the 57-59 region whereas Germany is currently 63.3 and the US at 59.7. We’ve included both local currency and dollar adjusted numbers. As we always say we use this as a rough guide to valuations and try to concentrate on the general cheapness/expensiveness of global markets rather than individual ones where distortions can occur.

Now briefly recapping other market performance from yesterday. US bourses strengthened to fresh highs, with S&P (+0.64%), Dow (+0.40%) and Nasdaq (+0.84%) all higher. Within the S&P, gains were led by energy and tech stocks, with partial offset from telco names. European markets were all higher, with the DAX up (+0.83%) for the first time in six days. Across the region, the CAC (+0.81%), Spain’s IBEX (+0.37%) and FTSE (+0.30%) also advanced.

Elsewhere, key currencies fell modestly against a stronger Greenback with the Euro and Sterling down 0.36% and 0.54% respectively. In commodities, WTI oil rose 2.09% to $61.63/bbl – the highest in 2.5 years, in part on expectations that the EIA report will continue to show a drop in US crude stockpiles. Precious metals softened c0.3% (Gold -0.33%; Silver -0.31%), while other base metals also weakened c0.5% (copper -0.44%; zinc -0.42%; aluminium -0.60%).

Away from markets and onto selected headlines across Europe now. Ireland has sold the first European sovereign bond issuance for the year, with its €4bn bond sale attracting strong investor demand with bids of around €14bn. Over in Germany, the SPD leader Mr Schultz has met with Ms Merkel yesterday to discuss procedural matters. Post the meeting, both parties noted “trust has grown and we’re starting negotiations optimistically”. Looking ahead, formal exploratory talks are scheduled to begin on 7 January.

Back onto Brexit, the UK’s Trade secretary Liam Fox has confirmed UK’s interest in potentially joining the Trans-Pacific Partnership trade group post Brexit, noting that “we want to explore all the opportunities” and “we would be foolish not to look at all the potential”. Elsewhere, two unnamed senior UK government officials noted to Bloomberg that UK based banks will continue to operate freely across the EU bloc post Brexit and that EU negotiator Barnier will soften his stance in not including financial services firms in trade deal discussions that are scheduled to start in March.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the November construction spending was also above market at 0.8% mom (vs. 0.5% expected). Factoring in the ISM and above, the Atlanta Fed now forecast 4Q GDP to expand at an annualised rate of 3.2% vs. 2.8% previously. Over in Germany, the December unemployment rate was in line at 5.5% and steady on last month’s revised reading. In the UK, the December construction PMI was slightly below at 52.2 (vs. 53 expected).

Looking at the day ahead, we have the final readings for the December services and composite PMIs across Europe and the US. In the UK, the December Nationwide House price index, November mortgage approvals and net consumer credit data will be due. Over in the US, there is the December ADP employment change print (190k expected) along with the weekly initial jobless and continuing claims. Away from the data, the Fed’s Bullard will speak at an economic convention.

via RSS http://ift.tt/2lVGeGK Tyler Durden

As widespread protests in Iran have now reached a full week, a new censorship directive from the Chinese government has ordered newsrooms across the nation to cease reporting on Iran demonstrations.

The leaked directive, which has been translated and published by the China Digital Times, notifies journalists to “not report any more on the demonstrations in Iran” and that “follow-up reports require further notice from superiors.”

Iranian President Hassan Rouhani and his Chinese counterpart Xi Jinping. Image via AP

The China Digital Times reports the government instructions as follows:

The following censorship instructions, issued to the media by government authorities, have been leaked and distributed online. The name of the issuing body has been omitted to protect the source.

Do not report any more on the demonstrations in Iran. Follow-up reports require further notice from superiors. Relevant information that has already been transmitted and is from an authoritative source and is compliant should no longer be hyped but do not delete it. [Chinese]

News of the Iran protests have been trending on Chinese social media and have received intensive coverage in state and independent media. New York Times Hong Kong correspondent Austin Ramzy observed, “Chinese activist Twittersphere has been very focused on the Iran protests, cheering the expanding demonstrations, with the hope that something like this could happen at home.”

However, authorities in Beijing have as their chief driving concern that Iran maintain stability as China has already positioned itself to be the chief international investor in Iranian infrastructural projects, to the tune of tens of billions of dollars. When asked about the Iran protests at a regularly scheduled press conference on Tuesday, China’s foreign ministry spokesperson Geng Shuang simply gave a one-sentence answer and moved on, saying, “China hopes that Iran can maintain stability and achieve development.” This decidedly conservative and reserved pro-Tehran response has much more to do with protecting Chinese investment and trade growth in an emerging market, than it does over questions that Iran protests could inspire similar movements domestically.

As multiple reports through the end of 2017 have noted, China has jumped at the opportunity to be a prime mover in Iran’s economy since international sanctions were lifted in January 2016 as part of the 2015 nuclear deal brokered by the United Kingdom, United States, France, Russia, China, and Germany. Relations between the two countries began to thaw from the moment Chinese President Xi Jinping took office in 2012, and by January 2016 – at the moment sanctions were lifted – Xi visited Tehran, meeting with Supreme Leader Ali Khamenei and President Hassan Rouhani – which marked the first time a Chinese president visited Iran in 14 years.

China’s projected “Belt and Road Initiative” (BRI) reach.

At that time Rouhani and Xi signed agreements related to China’s ambitious Belt and Road Initiative (BRI), thus bringing Iran into the massive joint Eurasian development plan as a key connector in the vaunted “New Silk Road” of which Persia is obviously geographically vital. This included 17 multi-billion-dollar deals covering areas of energy, finance, communications, banking, culture, science, technology, and politics, with a further ten year road map of broader China-Iran cooperation. In total this could see trillions pumped into the Iranian economy over the coming decades while physically connecting China with Europe and Africa on an infrastructural level and in an expanding trade relationship.

But should Iran’s current unrest continue on a trajectory towards destabilization, such projects would freeze, causing credit lines to dry up and investors to possibly pull out en masse. 

Many analysts have noted that this is precisely why Western firms have remained on the sidelines (fears of new sanctions and potential political instability) even as not only China, but countries like South Korea and Italy – the latter being Iran’s biggest European trade partner – sink unprecedented funds into Iran for everything from hospitals to railways to ports and power plants. South Korea’s Eximbank for example, signed a $9.5 billion credit line for Iran projects last summer, according to Chinese state news agency Xinhua and in early December Iranian and South Korean private companies signed memorandums of understanding to transfer technologies to Iran related to solar and alternative energy, thermal insulation, lithium batteries and electric engines.

Last month the head of the Iran Chamber of Commerce’s investment commission said on the sidelines of an Iran-Italy investment meeting in Rome, “They [Western firms] had better come quickly to Iran otherwise China will take over,” according to the South China Morning Post. Of course, such a call is now further from being heeded as political turmoil has shaken Iran even if for a brief time. 

Such respect for the people of Iran as they try to take back their corrupt government. You will see great support from the United States at the appropriate time!

— Donald J. Trump (@realDonaldTrump) January 3, 2018

Though some European banks such as Austria’s Oberbank have recently inked deals with Iran, Western firms have been reluctant with the looming possibility of new US sanctions under the Trump administration – a concern now no doubt compounded by a week of protests initially driven by economic grievances, but which quickly turned into violent clashes with police in some instances, and calls for both Rouhani’s removal and the end of clerical rule. A week into the unrest, a reported 22 Iranians have died – mostly civilians demonstrators, but also including one police officer, and some others in accidental deaths attributed to the rioters.

And with international headlines, fueled by the increasingly bellicose statements of some Western leaders and other longtime enemies of Iran like Israel and Saudi Arabia, increasingly casting Tehran’s actions in terms of a crackdown on human rights and democratic initiative, China is attempting to mitigate this kind of rhetoric from inundating its own media and potentially shaking confidence in its Iran investments. 

via RSS http://ift.tt/2E6rwV3 Tyler Durden

Authored by Brian Cloughley via The Strategic Culture Foundation,

Several events took place in December that demonstrated how far down the drain so many British people have gone in nationalistic zeal as regards Europe and Russia.

 

First there was the bizarre outburst of rejoicing that the colour of the British passport is to change when Britain leaves the European Union — the looming Brexit disaster.

Before becoming a member of the EU the British passport cover was dark blue, almost black, and thirty years ago it was altered to a shade of burgundy.

The intention to change back to the former colour caused Prime Minister Theresa May to tweet that “The UK passport is an expression of our independence and sovereignty – symbolising our citizenship of a proud, great nation. That’s why we have announced that the iconic blue passport will return after we leave the European Union in 2019.” 

She was echoed by, among many others, a noisy little politician called Michael Fabricant who said “Our passport is an iconic statement of our nationality. The return to our traditional dark blue after Brexit is a restatement of our nation regaining its sovereignty.” The passport colour non-story was becoming more ludicrous by the minute.

Then super-patriot Peter Oborne of the Daily Mail newspaper informed his readers that “The burgundy EU passports — forced on us in 1988 — were a striking example of what made so many Britons dissatisfied with EU membership and how our sense of nationhood was being subsumed into a Brussels-run superstate. And thus 17 million of them voted to quit the EU.” 

But Mr Oborne was wrong, because there hadn’t been any EU decree about passport cover colour.  The European parliament’s Guy Verhofstadt said “There is no EU legislation dictating passport colour. The UK could have had any passport colour it wanted.” 

Another comical thing about this farcical fandango is that the UK’s Sun newspaper carried a headline claiming that the change was a “Stunning Brexit victory for The Sun.” It was terribly proud that “The Government has agreed to our demand to scrap the EU’s burgundy model, enforced on the nation from 1988” but didn’t bother to check that there had never been “enforcement” of any sort. And the really funny thing is that the Sun was ecstatic that “The Queen’s ‘Dieu et Mon Droit’ crest will sit on its front in gold.” 

It’s hilarious, because Her Majesty’s “Crest” is also on the front of the burgundy-coloured passport. It is usually called the Royal Coat of Arms, and it escaped the attention of the rabidly anti-Europe Sun that the words are French, not English.

What was all the fuss about?  Commentator Peter Oborne explained that the matter was so important because the new passport “will be a potent, everyday symbol of Britain’s independence from the EU come 2019.”  Not only that, but “a passport is a symbol of nationhood… Above all, it symbolises British common values and the way we stand together. While reminding us of our magnificent past, it is also confirmation of an independent future.”  How sadly pretentious.

Which brings us to Britain’s most senior diplomat, foreign secretary Boris Johnson, who told ITV News that “I think it’s a wonderful thing if people want to have a blue passport again. I remember a sense of personal loss and outrage when they were taken away. I couldn’t understand why it had happened and I remember when Jacques Delors, the former president of the European Commission, said he wanted to calm the British people down, he said, ‘We will give you back your blue passport’ and they never did. Finally it’s happened.”  This was nonsense, like so many of his pronouncements.

Johnson made his passport statement in Moscow where he indicated that Britain has reverted enthusiastically to its embrace of the Cold War, and regards Russia as an enemy. Immediately before his visit he announced that Russia is “closed, nasty, militaristic and antidemocratic” which even for Johnson was a remarkably stupid public insult and, to put it mildly, undiplomatic.

Diplomacy is defined as “the profession, activity, or skill of managing international relations, typically by a country’s representatives abroad… The art of dealing with people in a sensitive and tactful way.”  But in neither of these could it be claimed that Mr Johnson is either a willing or expert practitioner. His reference a few years ago to black African children as ‘piccaninnies’ was disturbing, to put it mildly, but assumption of a senior government post has not checked his crudeness.  His appointment by the politically threatened Theresa May was regarded as farcical by many citizens, and his intemperate outbursts of unthinking goofiness continued to attract derision. 

Maria Zakharova of Russia’s foreign ministry said that Johnson’s visit would be pointless if it was not accompanied by “real steps” aimed at improving bilateral relations, and it was indeed a futile visit, because Johnson continued to publicly mock and insult his host country’s government for all manner of alleged activities, and crassly tweeted that “Our relations with Russia cannot be ‘business as usual’… however, it is vital for international security that we do talk to each other.”

Even Johnson could not have imagined that a nation he had publicly disparaged and maligned would be prepared to engage with him, and foreign minister Sergei Lavrov made this clear when he objected to the pre-meeting “insulting and aggressive statements” and said that differences between them should be discussed privately rather than proclaimed publicly.

Britain’s next nationalistic drama was reported on December 26 after the Russian frigate Admiral Gorshkov was seen sailing in international waters. The Daily Mail headlined that “Royal Navy frigate intercepts Russian warship” as it “made its way across the North Sea menacingly close to Britain.” This nonsense was mirrored by “UK Christmas threat from Russian Navy” and the Independent went overboard (as it were) with “Britain warns Russia over naval ‘aggression’ after tracking warship through North Sea on Christmas Day.”

The Admiral Gorshkov is undergoing sea-trials which are to be completed in February 2018 and is not combat-ready. The absurdity of the newspaper reports was highlighted when retired British Admiral Chris Parry told the BBC that as regards the Gorshkov being in the North Sea “She’s perfectly entitled to do that under international law.”

One might think that this straight statement of fact would end the matter, but no.  The British minister of defence Gavin William declared that “Britain will never be intimidated when it comes to protecting our country, our people and our national interests.” William is an inconsequential nonentity, but even so must be accepted as an official voice of government.

It seemed that there might be a competition in Britain to make the most stupid declaration about a complete non-event, but when the passport charade is considered together with the Johnson pantomime and the Gorshkov “aggression” travesty, a peculiar and most regrettable picture of modern British sentiment emerges.  Far from all Britons subscribe to the notion that Europe is an economic threat and Russia a military one, but the fact that the government appears to have adopted a policy of bellicose ultra-nationalism is disturbing.

For the foreign minister of the United Kingdom to announce in a newspaper that Russia is “closed, nasty, militaristic and antidemocratic” is a straightforward declaration of hostility.

But who cares?  Britain can’t do anything to Russia — or any other country, for that matter.

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The highly anticipated Markets in Financial Instruments Directive II (MiFID II) regulations officially went into effect today in Europe and has precipitated a collapse in sovereign and corporate bond volumes as traders try to figure out how to comply with new reporting requirements.

As the Wall Street Journal notes, some of the most stringent new rules for traders come from efforts to introduce greater transparency around bond trading, forcing brokers to publish prices for the most actively-traded securities before trades are completed.  Not surprisingly, the rules have impaired the speed of trade settlements resulting in trading volumes of euro-denominated government bonds to fall 25% compared with their 30-day average and U.K. government bond volumes to fall around 11%.

Volumes in the corporate bond market—most of which was spared from the MiFID II pre-trade transparency rules—is more mixed with euro-denominated bonds actually slightly above their 30-day average while sterling-denominated bond volumes have crashed nearly 50%.

Neil McLean, head of execution trading for Asia ex-Japan at Nomura, expects the trend to continue in the near term with less business from Europe as clients get used to the rules.  That said, McLean admits the true winners and losers from the regulations will only be revealed over the “longer term”…with “more losers than winners”.  Per Bloomberg:

“Reality is, it’s going to need a lot of refining as we see the market and clients take on the rules. We have some challenges with categorizing clients and making sure they receive only what the rules allow.”

“Over the longer term, the disruptive nature of this major regulatory change will become more apparent, and the winners and losers will likely emerge more clearly. There will likely be more losers than winners.”

As we’ve pointed out numerous times over the past year, equity research groups are expected to be among the “biggest losers” from the new regulations as investment banks will be forced to charge separately for research and trading activities.  Not surprisingly, a study from Frost Consulting recently found that major global investment banks have slashed their equity research budgets by more than half, from a peak of $8.2 billion in 2008 to $3.4 billion in 2017.  And, as we noted back in the summer, McKinsey & Co. thinks the pain is just getting started and that banks will have no choice but to fire a ton of equity research analysts who write a bunch of stuff that no one ever reads…which seems like a reasonable guess.

Europe’s impending ban on free research will cost hundreds of analysts their jobs with banks set to cut about $1.2 billion of investment on the area, according to a report by McKinsey & Co.

The consultancy estimates the $4 billion that the top-10 sell-side banks currently spend on research annually is likely to fall by 30 percent as clients become pickier about what they pay for, McKinsey Partner Roger Rudisuli said in an interview. Investment banks’ cash equity research headcount has fallen 12 percent to 3,900 since 2011 compared with as much as 40 percent in sales and trading, leaving the area facing “big cuts” to catch up, he said.

“Two to three global banking players will preserve their status in the new era, winning the execution arms race and dominating trading in equities around the globe,” McKinsey said in a report Wednesday, which Rudisuli helped write. “Over the coming five years, banks will need to make hard choices and play to their strengths. Not only will the top ranks be thinned out, there will be shakeouts in regional markets.”

Meanwhile, many bankers suspect that the declining equity coverage will negatively impact capital access as IPOs and bond deals will be more difficult to market…

“If a corporate broker would only market a firm to investors who pay for research, getting new money in the door will be far more challenging,” said Nick Burchett, U.K. equities manager at Cavendish Asset Management. “Limited access to capital is going to be a huge hurdle for companies coming to market if they now find they have only a very concentrated shareholder base. It may also be tougher to secure those cornerstone investors who are prepared to support a company for the long-term.”

The regulator is unbundling research in an attempt to get a better deal for asset owners. That means asset managers must stop receiving analysis they haven’t purchased. One investment bank, in an attempt to stem the hundreds of research emails that have traditionally been received, is sending automated emails asking not to be sent analysis and seeking written confirmation that the sender will comply.

“There’s going to be a lot of fund managers who have to walk over to the compliance person and say, ‘look I’ve been sent this, or opened this envelope, what do I do?’” said Alistair Haig, who teaches financial markets at the University of Edinburgh Business School.

…which makes perfect sense because it’s nearly impossible to execute a “buy the fucking dip” strategy without an army of 20-something year old equity research analysts telling you to do so.

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Authored by Daniel Lacalle via The Mises Institute,

The recent elections in the Eurozone have shown that the risks to the European project remain.

 

In Germany, an insufficient victory from Merkel, the collapse of the social democrats and the rise of the alternative right and extreme left have surprised many.

However, it was predictable. The relief rally in the Euro versus its trading currencies and the bullish tone of equity and bond markets after the French elections and the victory of Macron were, in many ways, based on a very optimistic view of strengthening of the current European model. Markets quickly forgot that almost 40% of the voters in France decided to support radical anti-EU parties at both sides of the political spectrum. The German elections showed that this bullish perception was a mirage. In Germany, almost 30% of the vote went to radicals.

The European Union is ignoring this trend and soldiering on with what Brussels calls “more Europe”, which often means more interventionism and central planning. And citizens are not happy with this. Instead of seeing Brexit as a warning sign and an opportunity to improve the European Union strengthening freedom, openness and diversity, the separation of the UK has been taken as an opportunity to advance in an incorrect model that mirrors the French “dirigisme”, a central-planned, heavily intervened model.

The European Commission published in September a surprisingly euphoric docu- ment declaring the end of the crisis thanks to “the decisive action of the European Union”. However, that positive tone contrasts with a growing discontent among European citizens. There is no denying that the European Union is in recovery mode, and that is a positive. Business confidence is rising, and manufacturing indices are in expansion. However, the pace of said expansion has moderated in the past months, and challenges remain. The European economy is not “in shape”, as the European Commission boosts, and this explains a significant part of the rising populist and radical vote.

According to the Bank of International Settlements and Merrill Lynch, Europe has more zombie companies today than before the crisis, i.e. companies that generate operating profits that do not cover their financial costs, despite all-time low-interest rates and an unprecedented monetary stimulus. European banks, at the end of 2016, had more than 1 trillion in non-performing loans, a figure that represents 5.1% of total loans compared to 1.5% in the US or Japan. Europe has gone from financial crisis to financial crisis, and recently we have had new episodes in Italy, Spain and Portugal.

But the key problem is unemployment. The European Commission “certifies” the exit from the crisis with unemployment of 9.1%, maintaining all its labour market rigidities, an unemployment rate that is more than double that of countries with flexible work legislations and dynamic business environments, such as the United States or the United Kingdom. More importantly, underemployment is still very high. In 2016 there were 9.5 million part-time workers in the EU-28. In addition to this, 8.8 million persons were available to work, but did not look for a job, and another 2.3 million persons were looking for jobs, without being able to start working in one within a short time period, according to Eurostat.

The tax burden in this period has been raised throughout the EU -with some exceptions, such as Ireland- with an average tax wedge of 45% on workers and 40% on companies. If we look at economic imbalances, the main ones are public debt of almost 90% of GDP and poor growth which, at an estimated 1.7%, is almost half its potential. Many politicians blame the European crisis on austerity. However, data debunks that myth. The winner of the crisis in Europe has been the bureaucratic system. With public spending averaging over 46% of GDP, an annual deficit of over 1.7% on average, and 90% debt, talking about austerity is simply incorrect.

These figures show that the European Union is far from being “in shape”, as the Commission states, and the election results prove that authorities and member states cannot continue to ignore the lack of engagement of a growing part of the population with the directed-economy and bureaucratic nature of this European model.

According to the Intelligent Regulation Forum and with the official data of the European Union for 2015, the member countries are subject to more than 40,000 rules by the mere fact of being part of the EU institutions. In total, including rules, directives, sector and industrial specifications and jurisprudence, they estimate that there are some 135,000 obligatory rules.

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One European country just made it illegal to pay men more than women.

Thanks to a new law, Icelandic firms that employ more than 25 people must obtain a government certificate demonstrating pay equality, under new rules that came into effect on Jan. 1.

Those who fail to prove pay equality will face penalties, including fines, according to the Mirror.

The law was announced on International Women’s Day 2017 – which took place on March 8 – as part of the Nordic country’s drive to eradicate the gender pay gap by 2022.

The UK, by comparison, had a gender pay gap of about 20% in 2017. In the US, women employed in similar jobs reportedly earn 76 cents less than men.

Iceland, which has a population of around 323,000 people, has been ranked the best in the world for gender equality by the World Economic Forum for nine years in a row. We imagine this law will help them defend their No. 1 position.

 

Dagny Osk Aradottir Pind, of the Icelandic Women’s Rights Association, explained to Al Jazeera: “The legislation is basically a mechanism that companies and organizations … evaluate every job that’s being done, and then they get a certification after they confirm the process if they are paying men and women equally.”

“It’s a mechanism to ensure women and men are being paid equally.”

Pind noted that Iceland has had legislation insisting men and women be paid equally for decades, but still the pay gap has persisted.

“We have had legislation saying that pay should be equal for men and women for decades now but we still have a pay gap,” she added.

“I think that now people are starting to realize that this is a systematic problem that we have to tackle with new methods,” Pind said.

“Women have been talking about this for decades and I really feel that we have managed to raise awareness, and we have managed to get to the point that people realize that the legislation we have had in place is not working, and we need to do something more.”

We imagine the hard-working small business owners who must now contend with one more onerous regulation will wholeheartedly agree.

 

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Via GEFIRA,

In Europe, social media like Facebook and Twitter are removing posts and blocking authors opposing mass migration from the Third World as hate speech.

 

The hostile attitude to literally hundreds of thousands of Africans from Nigeria, Morocco or Ghana flooding Italy, Sweden or Germany is considered extremist behaviour by them. At the same time Facebook and Twitter are instrumental in the biggest human exodus in modern history. Social media have not been limited to a communication or marketing function for a long time. Platforms like Facebook and Twitter contribute to the creation of the political situation, as the events related to the Arab Spring or Kiev’s Euromaidan. Social networks have also become a channel that helps to organize the transfer of Africans to Europe.

In 2017 a quarter of the people on the Earth have a Facebook account, of which 68% are under 35 years of age.Also in North African countries, this portal is very popular among almost half of the population, above all among people below 35 years of age.It so happens that the age of 89% of people entering Europe from Libya according to official data does not exceed 40 years,which leads to the assumption that the same age group most often uses the social networking site discussed above.

Facebook has become the smugglers’ channel for reaching out to people interested in getting from Africa to Europe.

How does it happen?

Firstly, smugglers create accounts and pages on Facebook where they advertise their services and give their phone number, as well as recommend contacting them by WhatsApp application, which guarantees the encryption of messages.

Secondly, in order to authenticate their message, they publish pictures showing preparations for the journey.

Thirdly, they publish photos and reports of people who made it to European countries, which is supposed to build trust on the side of potential clients. Important information is also contained in comments under posts. Thanks to them you can find out, among others, who used the smugglers’ services. In this way, through the grapevine, the rumours are spread about planned relocation.

Facebook posts confirm that the European Navy play an important role in one of the largest exoduses in modern history.

The ads inform about the participation of battleships or NGO vessels in “rescue” actions. Several times there was also information that the only thing smugglers had to do was reach the place where the navy ships would appear in a few hours. Such messages leave many questions about the involvement of NGOs or naval forces of European countries. The previous analyses of Gefira team have revealed an important role played by NGOs in the operations of transferring illegal immigrants.

 

Rescue operations of Doctors Without Borders 1.01.2015-17.10.2017.Source: MSF

There have been reports before that NGOs offer help in a way that is not transparent enough.The European Border and Coast Guard Agency (Frontex) also indicates that cooperation with non-governmental organizations is ineffectual. The map above shows the locations of rescue operations carried out by the organization Doctors Without Borders, of which the vast majority took place near the Libyan territorial waters. The rescued people were mostly transported to Italy, not to African or Maltese ports which are definitely closer.We might ask whether a Swedish ship participating in the rescue of a boat with German passengers located 20-30 kilometers off the German coast would transport survivors to Sweden or Germany?

Doubts arise concerning the role of Frontex, whose ships transport immigrants from boats drifting near the Libyan coast directly to the centers located in Southern Europe. The “Sophia” operations involving battleships also arouse suspicions. The navy’s aim is to combat smugglers in the Mediterranean and rescue illegal immigrants. The observation of smugglers’ profiles on social networks reveals the connections between rescuing immigrants and their transport by smugglers.

Post regarding the price of smuggling from Tunisia and Libya to Europe.
Source: Facebook.

According to the information published on smugglers’ Facebook profiles, the cost of being transferred to Europe is $400 per person if the journey starts from Tunisia or $1000 from Libya (data from March 2016). Families can have discounts. The extent of this business is illustrated by numbers. In July 2017 11,5 thousand people arrived from Libya in Italy (that number was twice as high in the same month a year earlier).  If the black-market price amounts to $1000, then in one month smuggling organizations (and other entities involved) can earn up to $11.5 million. The scale of these actions makes one wonder if they are not coordinated. It has already been revealed that „refugees” had phone numbers of non-governmental organizations to announce their arrivals.

An intriguing situation occurred at the beginning of last month. On 2nd of December, an announcement on the smugglers’ Facebook profile appeared that a “trip” from Libya to Italy was planned, which would be on 6th of December. On 7th of December an update appeared indicating that the smuggling under preparation would start on the same day. The post was published in the afternoon, so it could be presumed that the operation began in the evening or at night. A day later, i.e. 8th of December in the early afternoon, Frontex published on its Twitter page the information that the ship Olympic Commander was involved in patrolling sea borders and saved 78 people. Of course, there is no proof that these people were taken from the boat referred to above, as there is no proof that Frontext knew that there was a ship coming. People smugglers had broadcast a message in advance that they were leaving a port in Libya and then would be picked up by the European navy and NGOs. Now there arises the question whether we are dealing with a genuine rescue operation or an illegal and dangerous transfer at high seas.

Situation from the beginning of December on organized smuggling from Libya to Europe and rescue operations as part of the Frontex missions.
Source: Twitter, Facebook.

NGOs and the people smugglers use Saul Alisnky “Rules for Radicals” number 4

“Make the enemy live up to its own book of rules.”

The law of the sea states that “Every master is bound, so far as he can do so without serious danger to his vessel, her crew and passengers, to render assistance to everybody, even though an enemy, found at sea in danger of being lost.” People smugglers, the European Union, NGOs and Frontex are making a mockery of the law of the sea, and for that they should be held responsible. The massive transport operation that already brought six hundred thousand people from Libya to Italy since 2014, promoted and coordinated by modern communication tools like Twitter and Facebook, can hardly be regarded as genuine rescue operations.

 

Communications smugglers on via Facebook.

Last winter we proved the participation of non-governmental organizations in the smuggling of immigrants.Currently, through social media, we can not only follow NGOs activities, but also the way of communication between smugglers and their clients. Exploring this subject entails new questions. All “rescue operations” seem to have been well organized.

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