Month: December 2016

Vladimir the merciful?

Following this morning’s reports that Foreign Minister Sergei Lavrov would recommend to Russian President Vladimir Putin to retaliate in kind and expel 35 American diplomats, saying that “we cannot leave such acts unanswered. Reciprocity is part of diplomatic law”  with Putin spokesman Peskov warning that “there is no doubt that Russia’s adequate and mirror response will make Washington officials feel very uncomfortable as well” it was ultimately up to Putin to make a decision.

Which he did moments ago, when in a stunning reversal the Russian leader said, in an email statement sent by the Kremlin, that contrary to expectations, Russia won’t expel American diplomats in retaliation to US moves, in a brutal demonstration of just how irrelevant Obama’s 11th hour decision is for US-Russian relations.

In the statement Putin also said that Russia won’t cause problems to U.S. diplomats or deport anyone, adding that Russia has the right to respond in tit-for-tat manner, but it will not engage in irresponsible diplomacy.

The punchline, however, was saved for what may be Russia’s final slam of the debacle that is Obama’s administration saying that “It’s a pity that the current U.S. administration is finishing their work in such a manner.”

Putin ended the statement by congratulating U.S. President-elect Donald Trump, and the American people on the New Year.

From the full statement posted on the Kremlin website:

“We reserve the right to retaliate, but we will not sink to the level of this irresponsible ‘kitchen’ diplomacy. We will take further moves on restoring Russian-American relations based on the policies that the administration of President-elect Donald Trump adopts,”

And with that one statement, Obama lost the diplomatic war with Russia. 

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• Russia Set to Expel 35 U.S. Diplomats in Tit-for-Tat (BBG)
• Trump’s Plan to Partner With Russia Faces Bigger Hurdle (WSJ)
• Trump could reverse effects of Obama order on Russia (Reuters)
• Gold Lures Investors Worried About Trade Wars and Trump Tweets (BBG)
• Syria truce backed by Russia, Turkey, holds but clashes reported (Reuters)
• U.K.’s May Criticizes Kerry’s Speech on Israeli Settlements (BBG)
• Winter storm socks U.S. New England region (Reuters)
• Twitter Seeks a Little Help From Its Users Twitter (WSJ)
• Trump’s Border Wall, Deportation Plans Face Pushback From GOP (BBG)
• Malaysian Leader Promised Openness, Now Stifles Dissent (WSJ)
• Italy antitrust chief urges EU to help beat fake news (FT)
• China Vows to Ease Curbs on Foreign Investment in Finance (WSJ)
• Chinese Nuclear-Power Plant Delays Illustrate Toshiba’s Challenges (WSJ)
• Paschi Rescue to Cost Italy 6.6 Billion Euros, Central Bank Says (BBG)
• China to prosecute former senior spy catcher for graft (Reuters)
• Minimum Wages Set to Increase in Many States in 2017 (WSJ)

Overnight Media Digest

WSJ

– Indian government officials will likely meet early next week to evaluate the incentives sought by Apple Inc to manufacture its products in the country, two people familiar with the matter said. on.wsj.com/2iwbZnt

– President Barack Obama on Thursday issued a dramatic response to Russia’s alleged use of cyberattacks to interfere with the 2016 presidential election, including imposing sanctions on Russian agencies and companies and expelling dozens of suspected intelligence operatives from the U.S., in one of the biggest diplomatic confrontations between Washington and Moscow since the end of the Cold War. on.wsj.com/2iwd5zB

– Major U.S. law firms have become more vigilant in recent years about the risks of cyberattacks, but the revelation this week of a major hacking incident on two New York firms are a reminder that the industry remains vulnerable. on.wsj.com/2iw6jK9

– Health-care diagnostics company Alere Inc is taking steps to get Medicare billing privileges reinstated for its Arriva Medical LLC diabetes unit, challenging the actions of the Centers for Medicare and Medicaid Services. on.wsj.com/2isCHgI

– Seattle Genetics Inc said four leukemia patients died in clinical trials of an experimental treatment, prompting the U.S. Food and Drug Administration to halt, or suspend enrollment in, several studies. on.wsj.com/2iwgkXU

– Fitbit Inc is dropping one of its cases against rival AliphCom Inc’s Jawbone, untangling some of the litigation between the wearable-device companies. on.wsj.com/2iw6qW5

– Sears Holdings Corp secured a $200 million line of credit, provided by affiliates of ESL Investments, a hedge fund founded by Sears Chief Executive Edward Lampert, and can be expanded to total up to $500 million. on.wsj.com/2iw7GIZ

 

FT

Shareholders are urging Royal Bank of Scotland Group Plc to create a shareholder committee to prevent a return to the poor practices that led to the bank’s near-collapse in 2008. About 160 investors have proposed to the bank that it allow shareholders to vote at the next annual general meeting on setting up the new committee.

Amazon.com Inc has filed for a patent to use airborne warehouses to store products and serve as a base for delivery-drones. The airships would float at more than 45,000 feet and could either be manned or operated entirely by robots.

Labour councillors said Jeremy Corbyn must take a tougher line on immigration to address the concerns of working class voters. Labour, under pressure from the UK Independence Party, which has strict immigration controls stance, is targeting pro-Brexit working class voters in at least 20 constituencies.

 

NYT

– President Obama struck back at Russia on Thursday for its efforts to influence the 2016 election, ejecting 35 suspected Russian intelligence operatives from the United States and imposing sanctions on Russia’s two leading intelligence services. nyti.ms/2hSxPRo

– President-elect Donald Trump edged away on Thursday from his dismissive stance on American assessments of Russian hacking, saying he would meet with intelligence officials next week “to be updated on the facts” after the Obama administration announced sanctions against Moscow. nyti.ms/2ijFPvJ

– A cease-fire between Syria’s government and the weakened rebel forces arrayed against it took effect early Friday, but violations were reported within hours. nyti.ms/2ie0R0X

– China’s Ministry of Public Security opened the line last month to answer questions about the new law regulating foreign nonprofit organizations, which takes effect on Sunday. But this week and last, calls went unanswered, exemplifying the uncertainty that still surrounds the law, raising concern among thousands of nongovernmental organizations about their ability to continue their work in the new year. nyti.ms/2iL9Fwj

– The auto-parts maker Takata is nearing a sweeping settlement with federal prosecutors over airbags that can violently explode, according to two people briefed on the discussions. nyti.ms/2inVhcG

– An Argentine court reopened an investigation on Thursday into accusations that former President Cristina Fernández de Kirchner sought a secret deal with Iran in connection with the 1994 bombing of a Jewish center in Buenos Aires. nyti.ms/2hy88ba

 

Canada

THE GLOBE AND MAIL

** The Liberal government is reiterating its support for a two-state solution in the Middle East but did not go to the same extent as U.S. Secretary of State John Kerry in strongly denouncing Israeli settlement-building following a stinging rebuke from the United Nations. https://tgam.ca/2iMmZAE

** A long-time Vancouver police officer honoured by the department for protecting young sex workers from exploitation is facing six criminal charges related to the alleged sexual assaults of two victims last year – one of whom was a minor at the time who may have been a witness in an ongoing court case. https://tgam.ca/2iMhbqE

** Georgia Collins, a candidate for British Columbia New Democratic Party nomination on Vancouver Island, has withdrawn from the race, saying she endured sexism and harassment during her campaign and that the opposition party’s response to it was disappointing. https://tgam.ca/2iMc4H9

NATIONAL POST

** Four Canadian post-secondary schools, including the University of Toronto and McGill University, have landed on a provocative list of North America’s 40 “worst” campuses for Jewish students. http://bit.ly/2iMmuXd

** For Canada, one of the first potential flashpoints in the new bilateral universe could be in Prince Rupert, British Columbia. Even prior to Trump’s election, the Americans were threatening to cut ferry services to the port city on the province’s northern coast, unless Ottawa allows Buy America provisions to apply on Canadian soil – something the previous government called “an affront to Canadian sovereignty”. http://bit.ly/2iMk4aP

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Russia warned it would respond proportionally to yesterday’s unprecedented sanctions and diplomatic expulsions unveiled by the Obama administration, and this morning it did just that when Russia’s foreign ministry announced plans to expel 35 U.S. diplomats and ban U.S. diplomatic staff from using a dacha and a warehouse in Moscow in retaliation to Washington’s sanctions, Russian news agencies reported.

Foreign Minister Sergei Lavrov was quoted by the agencies as saying he had proposed the measures to President Vladimir Putin, and said that “we cannot leave such acts unanswered. Reciprocity is part of diplomatic law.”

He called the people in question—31 employees at the U.S. embassy in Moscow and 4 in the U.S. consulate in St Petersburg—“persona non-grata.”

Russian Foreign Minister Sergei Lavrov

Mr. Lavrov also said Americans should be banned from using their vacation home near Moscow.

Other joined Lavrov: additional proposed measures are expected though: Ministry of Foreign Affairs spokeswoman Maria Zakharova wrote on her Facebook page Thursday, “there will be official statements, counter-measures” announced on Friday. Dimitry Peskov, Putin’s press secretary, echoed likewise: “We will certainly response adequately…and it will be determined in line with decisions adopted by the Russian President.”

Peskov warned, “there is no doubt that Russia’s adequate and mirror response will make Washington officials feel very uncomfortable as well.”

Ultimately, it is up to Putin to draft such retaliatory measures.

ABC News had previously reported, citing a US official, that Moscow had ordered the the shutdown of the Anglo-American School of Moscow – chartered by the American, British, and Canadian embassies in Moscow – but a US embassy official in Moscow said the school had not been shuttered. Russia’s foreign ministry also denied the school’s closure.

Nonetheless, as the WSJ notes, the “dispute marks one of the biggest diplomatic confrontations between Washington and Moscow since the end of the Cold War.” President Barack Obama in a statement on what he called a partial response to Russia’s alleged hacks, said the cyberattacks “could only have been directed by the highest levels of the Russian government.”

Russia has denied involvement and Lavrov, as well as millions of Americans, have accused the U.S. of neither having nor showing any evidence.

“The outgoing American administration of Barack Obama, who have accused Russia of all mortal sins and tried to blame us for the failure of its foreign policy initiatives, among other things, has groundlessly made additional accusations that Russia interfered in the U.S. election campaign at the state level,” he said.

The Russian act was in retaliation to sanctions imposed on Thursday by the US on Russian intelligence agencies and expelled what the State Department said were 35 intelligence operatives allegedly serving under diplomatic cover from the Russian embassy in Washington and the Russian consulate in San Francisco.

Shortly after Obama’s announcement, Donald Trump, who has shown a far more amenable side to dealing with Russia, said that “It’s time for our country to move on to bigger and better things” but added that “in the interest of our country and its great people, I will meet with leaders of the intelligence community next week in order to be updated on the facts of this situation.”

We anticipate that despite some potential complications, Trump will gradually overturn Obama’s sanctions as relations between the US and Russia renormalize once Trump is inaugurated in three weeks.

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Aside from the previously noted FX fireworks early in the illiquid Asian session, which saw the US Dollar “flash crash” briefly against most pairs, including the Euro and the Swiss Franc…

… only to gradually recover most if not all losses, it has been a generally quiet session, as markets look to close out 2016 in orderly fashion. The MSCI  World Index was flat on Friday, with investors having booked profits off the benchmark’s 13% run since end-June and European shares opening a touch weaker. It was poised to end the year 5.7% higher despite a rough start and the worst January for stocks in history.

Global markets have fared surprisingly well in a year marked by major political shocks, including June’s Brexit vote and the unexpected election of Donald Trump as U.S. president in November. U.S. stocks have hit successive record highs and emerging equities have rebounded 8 percent after three years in the red. As a result, global stocks are set to close out the tumultuous 2013 with the biggest gain since 2013, ironically even as Japan’s benchmark Topix index and the Stoxx Europe 600 Index were set for the first yearly decline since 2011. Oil headed for its first annual climb in three years. A gauge of the dollar shifted lower after reaching the highest level in more than a decade earlier this week.

Quickly looking back at the year that was, equities posted a resilient recovery after tumbling at the start of the year. Political risk punctuated the calendar, with Britain’s vote in June to leave the European Union presageing Donald Trump’s victory over Hillary Clinton in November.  As Bloomberg adds, the year for financial assets started on a sour note from the first day of trading, with the MSCI World gauge tumbling 2 percent. China-fueled turmoil sent stock markets from Tokyo to India into bear markets in the first two months of 2016. Oil reached a 13-year low while the dollar slid to its weakest level in a year. The second half of the year surprised many analysts, as financial markets powered past the Brexit shock while Donald Trump’s presidential victory provided an unexpected boost.

Ironically, every major political catalyst that had been dubbed a material market risk, materialized and the result was a surge in risk assets as markets no longer respond negatively to any adverse news flow courtesy of central bank promises to prop and support global “markets.”

“2016 was perhaps one of the biggest roller-coasters driven by political events,” said Dmitri Petrov, a strategist at Nomura International Plc in London. “It’s not so much the actual realized volatility of asset markets, but volatility of market view around the global macro and policy outlook that made it exceptional.”

The yield on 10-year Treasury notes was little changed at 2.48 percent after dropping three basis points Thursday. It slid to 2.46 percent earlier in the week, the lowest since Dec. 14. U.K. gilts fell with the 10-year yield climbing 2 basis points to 1.257 percent. Yields are still on course for their first monthly decline since August.

Looking at other asset classes, Brent crude futures have bounced more than 50 percent after three years of losses, thanks to output cuts by key crude producers. The benchmark rose half a cent on Friday.  Other commodities too have rallied, with zinc, steel and rubber posting annual gains of around 60 percent after suffering heavy losses last year.

In a note headlined, “The underdogs bite back”, asset manager Schroders said government bonds were the only major asset class not to have delivered positive returns in 2016, with equities and commodities receiving a boost from President-elect Trump’s $1 trillion economic stimulus plan.

“Investors have bought into the Trump or reflation trade on hopes of stronger growth, rising inflation and higher interest rates. Risk assets are rallying, the dollar has strengthened and capital has flowed out of emerging markets,” Schroders told clients.

The year is also notable for the growing chorus of voices calling an end to the three-decade bond bull run. With inflation on the rise, U.S. 10-year yields have hit two-year highs US10YT=RR and the European Central Bank has signaled it will start trimming bond purchases.

The dollar pulled back 0.3 percent on Friday against a currency basket following its early “flash crash” but has strengthened in 2016 for the third straight year, recently hitting near 14-year highs. Britain’s pound, which hit 31-year lows after the June 23 vote to leave the European Union, is closing 16 percent lower against the dollar, its biggest yearly fall since 2008. Most analysts expect the greenback to rise further in 2017, along with U.S. Treasury yields, with Trump’s policies seen boosting inflation and prompting the U.S. Federal Reserve to hike interest rates more frequently. The euro, however, has fought back this week, rising to three-week highs versus the dollar, though the widening interest rate gap with the United States has seen it fall 3 percent this year.

The single currency faces some key tests in 2017, with Dutch, French and German elections expected to see a lurch toward anti-establishment, anti-euro parties while concerns remain over the health of Italian banks.

“Political risk shifts to Europe in 2017 with the risk of an upset in France or Italy potentially threatening a break-up of the euro,” Schroders wrote.

The other major risk on the horizon could be China, where the yuan has posted its biggest annual loss against the dollar since 1994 when it started trading. Fears are growing that capital outflows will spiral out of control, further weakening the currency, depleting foreign exchange reserves and possibly raising debt default rates.

Market Snapshot

• S&P 500 futures up 0.2% to 2250
• Stoxx 600 down 0.3% to 359
• FTSE 100 down 0.3% to 7098
• DAX down 0.2% to 11431
• German 10Yr yield up 2bps to 0.19%
• Italian 10Yr yield up less than 1bp to 1.8%
• Spanish 10Yr yield up 1bp to 1.34%
• S&P GSCI Index up 0.3% to 399.6
• MSCI Asia Pacific up 0.1% to 135
• Nikkei 225 down 0.2% to 19114
• Hang Seng up 1% to 22001
• Shanghai Composite up 0.2% to 3104
• S&P/ASX 200 down 0.6% to 5666
• US 10-yr yield up less than 1bp to 2.48%
• Dollar Index down 0.62% to 102.04
• WTI Crude futures up 0.4% to $53.96
• Brent Futures up 0.3% to $57.03
• Gold spot up 0.2% to $1,160
• Silver spot up 0.5% to $16.24

Top Global News

• Trump Left a Tough Choice by Obama Sanctions on Russian Hacking: Obama imposed penalties on Russian intelligence officials and agencis, expelling 35 Russian operatives
• Qualcomm to Gain Fees From China’s Meizu in Lawsuit Settlement: Meizu will pay patent fees similar to those accepted by other Chinese phone makers
• Nomura to Deepen Cost Cuts as CEO Seeks to Keep Ship Afloat: CEO Nagai unveiled “Waterline Project” seeking to improve cost-effectiveness over the next three years
• NBCUniversal Says Channels May Go Dark in Charter Cable Dispute: Charter has been “unyielding” in demanding better terms, NBC says
• Oil Market Seen as Surprise Haven From Political Risk in 2017: OPEC output cut creates capacity to respond to supply outages
• Euro Jumps 1.6 Percent in Minutes as Algo Orders Surprise Market: Liquidity evaporated as euro buy orders surged above $1.05, currency pares gains
• Grab Your Ear Muffs, the New Year’s Arriving With a Frigid Bang: Warmer Arctic weather will spur a very chilly start to 2017
• China to Boost Coal Output Amid Capacity Cuts in 5-Year Plan: Coal output will increase to 3.9 billion metric tons in 2020, about 18% higher than this year
• Wall Street’s Trump Bonanza Won’t Avert Job Cuts at Banks in ’17: Even if profits surge, analysts say banks will keep automating

In Asia, stocks edged just barely higher with the MSCI Asia Pacific up 0.1%, while Japan’s Topix index caps its first annual retreat since 2011.  6 out of 11 MSCI Asia Pacific sectors rise, with health care outperforming and industrials underperforming.

Top Asian News

• Hong Kong Parking Garage May Fetch $2.2 Billion in 2017 Sale: First commercial land sale in central business district in more than 20 years
• Fairfax Wins Central Bank’s Approval to Take Over Indian Lender: Approval to buy 51% stake in Catholic Syrian Bank
• Japan Wants Its Overworked Citizens to Start Weekends Early: The country wants companies to let workers finish early on the last Friday of every month

In Europe, stocks are ending the year in a subdued fashion, falling fractionally some 0.3% in thin trading, and poised to end the year with the first annual decline since 2011. 17 out of 19 Stoxx 600 sectors decline, with real estate and household goods outperforming, oil & gas underperforming. 70% of Stoxx 600 members decline, 27% gain

Top European News

• Bank of Italy Says Paschi Rescue Will Cost State $6.9 Billion: Bank of Italy makes estimates in note posted on website
• Fiat Said to Be Developing Autonomous Vehicle: The Information: Report says co. already has prototype vehicles on the road

In commodities, the Bloomberg Commodity Index, which measures returns on raw materials, rallied 0.3 percent, putting it on course for a 12 percent advance. This would be the first increase since 2010. Crude futures gained 0.5 percent to $54.01 a barrel, after Thursday’s 0.5 percent decline. Prices are up about 46 percent this year. Supply cuts from OPEC and other producing nations next month are intended to stabilize the market and reduce swelling global inventories. Gold’s 0.2 percent advance to $1,160.55 an ounce extended its rally into a fifth day, the longest since Nov. 4. The metal has rebounded 3.3 percent from an 11-month low, and is up more than 9 percent for the year.

In currencies, the euro rallied as much as 1.6 percent before paring its advance to 0.7 percent and trading at $1.0566 as of 10:38 a.m. in London. The yen fell 0.3 percent to 116.8 per dollar, erasing an earlier advance of 0.4 percent. The currency was up more than 20 percent for the year in August, but has pared that to 2.9 percent. The Bloomberg Dollar Spot Index slipped 0.4 percent after dropping 0.5 percent Thursday, although it remains up 2.7 percent for the year. The pound was on track for a monthly decline versus the dollar, its ninth this year and wrapping up its steepest annual drop since the global financial crisis of 2008. Sterling was on track for a more than 16 percent drop against the dollar this year and was the worst performing Group-of-10 currency in 2016 despite the recent stabilization.

US event calendar:

• 9:45am: Chicago Purchasing Manager, Dec., est. 56.8 (prior 57.6)
• 1pm: Baker Hughes rig count

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As 2016 comes to a close, Reuters has compiled a list of the biggest winners and losers of the year from across the globe.  Of course, after global equities started out the year on a weak note, in the closing weeks of 2016 computer algos investing professionals have rarely seen a stock they didn’t want to buy more of.  That said, currency traders with exposure to the Egyptian pound or Nigerian naira didn’t make out quite so well.  And then there were the Dr. Jekyll and Mr. Hyde trades of 2016 that, after gyrating wildly throughout the year and giving a bunch of high-strung traders heart attacks, ended up the year, righly or wrongly, roughly where they started.

First, the WINNERS:

Glencore:  After losing 70% of it value in 2015, the outlook for Glencore at the start of this year couldn’t have been bleaker.  But those who had the intestinal fortitude to invest in the beginning of 2016 were handsomely rewarded for their efforts.  After initially shedding another 20% of it’s value in January 2016, Glencore bottomed-out along with oil and, after a successful $8 billion debt refinancing, rallied more than 200% this year, with a trough-to-peak rise closer to 300%.

Anglo American:  After posting a 2015 similar to Glencore (down ~80%), Anglo American , the world’s fifth-largest diversified mining company, took drastic action in the new year as the commodity rout deepened. In February, the company announced it would retain only 16 of its 45 core assets (dumping its coal, nickel and iron ore businesses, among others) and shed around 60% of its 128,000-strong workforce.  Those who lived through the restructuring efforts enjoyed a 290% rise in 2016, and a trough-to-peak rise closer to 500%.

 

Bitcoin:  The digital cryptocurrency is closing the year at a three-year peak. It has more than doubled in 2016, and the total value of all bitcoins in circulation is now at record high above $15 billion.  Of course, the exponential growth of Bitcoin in 2016 coincides with the steady depreciation of the Chinese yuan (the majority of bitcoin trading is done in China), the abolition of high-value banknotes in India and continued growing demand to move money across the globe quickly and anonymously.

 

Tencent:  Finally, the winners list was capped off with Tencent Holding Ltd, China’s largest social network and online entertainment firm.  With a market cap of $225 billion, Tencent is the most valuable emerging market company in the world and its shares were up 20% in 2016, far outperforming the broader Hang Seng index, which is down 0.7%.

 

Now for the LOSERS:

Egyptian Pound:  Egypt floated its currency in November in a move widely seen as a necessary step to help secure a $12 billion IMF loan. The initial devaluation from its peg of 8.8 per dollar was by around a third. But as 2017 draws closer, the currency is trading at more than 19 per dollar, and has lost around 60% of its value this year. It is the worst performing currency in the world in 2016.

Nigerian Naira:  Nigeria’s naira initially slumped by around 30% when the central bank removed its peg of 197 per dollar back in June. This was the central bank’s attempt to alleviate a chronic foreign currency shortage that was choking growth in Africa’s biggest economy. But the Naira soon fell through 300 per dollar, and its 37% fall since Dec. 31, 2015 makes it the second-worst performing currency of the year.

 

India Inc.:  Foreign investors’ enthusiasm for Indian stocks and bonds dimmed in 2016. Net selling of stocks hit $2.6 billion in November, the heaviest outflow in eight years, as investors took fright at rising U.S. bond yields and what a Donald Trump administration could mean for emerging markets. The government’s recent move to ban the two most popular banknotes in circulation has raised concern over the potential impact on corporate profits.

The worry is if a rush for the exits turns into a stampede. India remains the strongest overweight among foreign investors in emerging markets. Allocations to Indian stocks by EM equity funds, managing more than $250 billion in assets on aggregate, were more than 250 basis points above their weight in the MSCI EM index, according to Goldman Sachs and EPFR.

 

And last, but not least, the UGLY:

Deutsche Bank:  It’s been a wild ride this year for shareholders in Germany’s biggest lender, a bank the IMF in June said probably posed the biggest single systemic risk to the global financial system. A host of legal cases costing billions and profit-sapping negative interest rates pushed its share price below 10 euros in September for the first time ever. Talk of a forced merger or even state-led rescue abounded (see “‘It All Has A Very 2008 Feel To It’ – For Deutsche Bank, The News Just Keeps Getting Worse“).

As 2017 looms, DB shares are still down 23% for 2016, significantly underperforming the broader euro zone and European banking indices, but the recovery from the record low set back in September has been 75%.

 

United Kingdon:  On June 23, 2016 Britons voted to leave the European Union and the following day, pure panic ensued as UK stocks took a nosedive. The shock referendum result had an even more negative and longer-lasting impact on sterling, so much so that the 11% fall in dollar terms that day was the FTSE 100’s second biggest one-day fall ever.

Alas, six months later the FTSE 100 looks as if it will close at or near all times highs and is up 23% from its low on June 24.

 

Toshiba:  It’s been a rocky 2016 for Toshiba.  As of last week, shares in the Japanese tech-to-nuclear conglomerate were up 80% YTD and up around 200% from the record low struck in February. But all of that changed earlier this week when the company announced a potential multi-billion dollar writedown from cost overruns at a U.S. nuclear business it bought last year.  In a matter of days, Toshiba has lost half its market cap (~$9BN) leaving shares roughly at the same level they started the year.

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Submitted by Alice Salles via TheAntiMedia.org,

Technology has, for the better part of the last decade, changed our lives in significant and groundbreaking ways. But as technology continues to make great strides, helping us change the way we do business and live our lives, it is also employed by bureaucrats looking to keep an eye on everyone.

Thanks to Edward Snowden and others before him, like former U.S. National Security Agency (NSA) intelligence official William Binney, we now know U.S. officials make use of secret courts to gain access to phone records — ignoring due process and, of course, the 4th Amendment to the U.S. constitution. But even though the NSA revelations were widely discussed and privacy advocates have continued to press legislators and officials to justify the illegality of their actions, things seem to have only gotten worse — at least as far as official government policy is concerned.

Instead of reforming the system to make sure officials observe the constitution, laws have been passed to increase the government’s access to technologies used widely by Americans and visitors. The result? The widespread normalization of government spying.

Instead of sweeping outrage, many Americans continue to feel that being spied upon is part of their everyday lives — and that instead of fighting it, they should embrace it as a means to protect the country from external forces.

To nearly half of the population, recent news about a court order regarding a private Amazon Echo may not seem as shocking as it should.

Warrant Issued for Amazon Echo Device, Setting a Precedent

A case involving a murder in Arkansas just helped the public learn that companies like Amazon often retain recordings of people’s conversations through devices like Amazon Echo — and that these recordings are stored in servers that may later be subject to law enforcement investigations. Depending on how the case shapes up, it could set a legal precedent that would open up government access to similar smart devices, and even force companies to keep these recordings in storage for future investigations.

The first warrant naming this specific device was tied to a Bentonville, Arkansas, murder that happened in November 2015. The official document asked the company to release “any recordings between November 21 and November 22, 2015.” The Amazon Echo device in question belongs to James Andrew Bates, the suspect facing a first-degree murder charge associated with the death of his friend, Victor Collins. Collins was allegedly strangled and drowned in Bates’ hot tub.

In the search warrant, police wrote that the “records … retained by Amazon.com … are evidence related to the case under investigation.” Nevertheless, Amazon did not release any data. Instead, the company provided investigators with the suspect’s account details, which include past purchases. Despite Amazon’s decision not to cooperate unless “a valid and binding legal demand properly [is] served,” officials may still be able to recover information from the device’s speakers without the company’s help.

 

“Even without Amazon’s help,” CNET reported, “police may be able to crack into the Echo” by tapping “into the hardware on the smart speakers, which could ‘potentially include time stamps, audio files or other data.'”

Other smart devices covered by this warrant included Collins and Bates’ phones, a wireless weather monitoring system, a WeMo device used for lighting, a Nest thermostat, and a Honeywell alarm system.

If this case serves as an example of anything, it is that your privacy is not protected, even if companies like Amazon refuse to cooperate with law enforcement under certain circumstances. With or without a warrant, officials will continue to use similar devices against their owners.

Regardless of what law enforcement finds on Bates’ Amazon Echo, evidence gathered by smart devices will continue to be employed by government officials. The only way to protect yourself is to follow good online security practices, which will help to protect your data from future breaches.

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