While few predicted the stock market surge should Trump get elected, virtually everyone anticipated a thawing of relations between Russia and the US if Donald Trump were to occupy the White House. And yet, 5 months later, the opposite has happened: stocks are just shy of the record 2,400 while relations between the Kremlin and the White House, despite all the rhetoric of Trump being an extended KGB agent or whatever the NYT/WaPo unsubstantiated narrative of the day is, have remained abysmal with no hope of improvement in sight.

As much was confirmed by Putin’s spokesman Vladimir Peskov today, who said on Friday that the relationship between the U.S. and Russia may worse now than it was during the Cold War.

When asked by “Good Morning America” host George Stephanopoulos if the U.S. and Russia were in a “new Cold War,” Peskov said the current situation may be worse, blaming the US for disintegrating the cooperation between the two countries.

But what will come a shock to the new generation of McCarthyist witch hunters, who see a Russian spy behind every criticism of US policy, or economic data, or of course democrats, Peskov blamed none other than the “present presidential administration”

“New Cold War? Well, maybe even worse. Maybe even worse taking into account actions of the present presidential administration in Washington,” Peskov told Stephanopoulos.

“New Cold War? Well, maybe even worse.” – Peskov to @GStephanopoulos on relations between the U.S. and Russia and if this is a new Cold War http://pic.twitter.com/7a4Qa66kec

— Good Morning America (@GMA) March 31, 2017

Curiously, as an example of collapsing relations, Peskov cited the decision to expel 35 Russian diplomats from the U.S. in December, which however was made under Obama and not President Trump.

The relationship between Trump and Russia has been the subject of intense scrutiny since before the real estate mogul took office in January. The U.S. intelligence committee unanimously concluded late last year that the Kremlin meddled in the 2016 election to help Trump, and he has spoken warmly of Putin, expressing a desire to improve U.S.-Russian relations. The House and Senate intelligence committees are conducting a probe of Russian election meddling, as well as Trump and his aides’ alleged ties to Moscow. The FBI is also investigating.

Putin denied that Russia sought to interfere in the presidential election, and has blamed the accusations on anti-Russian sentiment in the U.S.

However, as the the daily newsflow vividly indicates, the anti-Russia witchhunt continues. And, in keeping with the spirit of anti-Soviet (sic) paranoia sweeping the land, we are confident that Peskov’s statement will be interpreted by the left as an attempt by Russia to cover up their undisclosed “ties” to the Trump administration by turning on him.

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Open Europe's Vincenzo Scarpetta gives his initial take on the first draft of the EU's guidelines for the upcoming Brexit negotiations.

European Council President Donald Tusk is a man of his word. He promised he would have a first draft of the Brexit negotiating guidelines for the 27 remaining EU member states ready within 48 hours from the moment the UK triggered the Article 50 exit mechanism – and he delivered. Overall, the document reads as anything but punitive. Below are my initial thoughts.

The door is wide open for parallel negotiations, albeit not from the very beginning

Over the past couple of days, the media have been (arguably too) quick to jump on carefully worded statements by a number of EU leaders – notably including German Chancellor Angela Merkel, on whose remarks my colleague Henry Newman blogged here – and conclude that the 27 were going to flat out reject Theresa May’s request to run ‘parallel negotiations’ on the terms of the divorce and the future UK-EU relationship.

However, the draft guidelines make it clear that parallel negotiations will be fully possible during the two-year timeframe stipulated by Article 50 – provided that “sufficient progress” on the terms of the withdrawal is achieved. In other words, the door is wide open for parallel negotiations – albeit not from the very beginning. This is the exact wording,

An overall understanding on the framework for the future [UK-EU] relationship could be identified during a second phase of the negotiations under Article 50. The [European] Union and its member states stand ready to engage in preliminary and preparatory discussions […] as soon as sufficient progress has been made in the first phase towards reaching a satisfactory agreement on the arrangements for an orderly withdrawal.

Crucially, Tusk himself told reporters in Brussels this morning,

It must be clear that the EU, as 27, decides if sufficient progress has been achieved, probably in the autumn, at least I hope so.

If his prediction is accurate, there would be about one year to discuss the future UK-EU relationship – although, of course, any successor agreement would need to be concluded after the UK formally leaves the EU and becomes a third country. It was always going to be the case that the EU27 would seek to discuss process and principles first – a point Open Europe has repeatedly made.

Non-members can’t enjoy same benefits as members – what else could EU27 say?

The draft guidelines stress that,

A non-member of the Union, that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member.

This is clearly an important statement, but possibly the most unsurprising of the entire document. The EU27 have always been adamant that any future settlement with the UK has to be “inferior” to membership of the bloc. From the EU’s point of view, stating the opposite would just not make sense. Furthermore, Theresa May has repeatedly said – including in her letter triggering Article 50 – that the UK accepts the indivisibility of the ‘four freedoms’ (free movement of goods, services, capitals and workers) and will therefore not seek continued membership of the EU’s single market.

Expats and the principle that ‘nothing is agreed until everything is agreed’

Another point that drew my attention concerns the rights of expats – both nationals of EU member states living in the UK and UK nationals living across the EU. The draft guidelines say,

Agreeing reciprocal guarantees […] will be a matter of priority for the negotiations.

However, in an earlier paragraph, the document also stresses,

In accordance with the principle that nothing is agreed until everything is agreed, individual items cannot be settled separately.

In other words, while an agreement on the rights of expats remains, in my view, relatively easy to wrap up and announce, the draft guidelines appear to suggest it would somewhat be tied to the overall success (or failure) of the withdrawal negotiations. Indeed, this cuts both ways and the EU27 will no doubt be determined to get this point settled.

A few potential sticking points

To be sure, the draft guidelines do include a few potential sticking points. Firstly, what has become known as the ‘Brexit bill.’ The document says,

A single financial settlement should ensure that the Union and the UK both respect the obligations undertaken before the date of withdrawal. The settlement should cover all legal and budgetary commitments as well as liabilities, including contingent liabilities.

Importantly, though, the draft guidelines do not mention any specific figure – suggesting the exact amount is up for discussion – and do not say anything about when the bill would be due.

Maltese Prime Minister Joseph Muscat, whose country holds the rotating presidency of the EU’s Council of Ministers, provided further clarity in his joint press conference with Tusk this morning, by saying,

The idea is that we have to come up with a methodology that shows and calculates those commitments, and also what Britain needs to take from European assets, as in a clear balance sheet.

Secondly, the draft guidelines imply that the EU27 might want the European Court of Justice (ECJ) to play a role as the dispute settlement mechanism “regarding the application and interpretation of the withdrawal agreement.” As I previously noted on this blog, this would be rather unpalatable for the UK government.

Thirdly, somewhat unsurprisingly, the document stresses the UK “will no longer be covered” by the trade deals the EU has concluded with third countries. We recommended on several occasions that the UK should look to ‘grandfather’ those trade deals after Brexit, in order to safeguard existing global supply chains and support growth in global trade. Encouragingly, the draft guidelines also say,

A constructive dialogue with the UK on a possible common approach towards third country partners and international organisations concerned should be engaged.

Finally, the draft guidelines mention the possibility of transitional arrangements “to provide for bridges towards the foreseeable framework for the future relationship”, and emphasise,

Should a time-limited prolongation of the Union acquis [the body of EU law] be considered, this would require existing Union regulatory, budgetary, supervisory, and enforcement instruments and structures to apply.

In plain English, this suggests the EU27’s preference for a transition period would essentially be a continuation of the status quo – whereby the UK would be expected to keep contributing to the EU budget and be subject to ECJ jurisdiction. Indeed, we have heard this before (see what Maltese Prime Minister Muscat said back in January). However, the UK is keen on a ‘phasing-in’ period – which involves gradual steps towards a new relationship with the EU. This divergence of views will need to be ironed out.

These draft guidelines will now be discussed among the ‘sherpas’ of the 27 remaining EU member states, with a view to EU27 leaders formally adopting them at their extraordinary summit on April 29. They are therefore subject to change, but after reading them I am more optimistic about the prospect of a good deal – for the UK and the rest of the EU.

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If you are actively involved in the markets as a trader or investors, you need to be intensely careful regarding your political bias.

Every single person has a political bias. Everyone. It’s not a bad thing. It’s just a fact.

But if you're looking to make money in today's market, BIAS is a four letter word.

However, the Trump Presidency is bringing out personal bias in ways we’ve never seen before. People on both sides of the political spectrum are literally losing their minds.

Trump supporters see no fault. Trump opponents see no benefit.

This is EXTREMELY dangerous if you are making investment decisions with this going on. No matter how sophisticated your model or framework is, if you’re pumping biased ideas into it, you’re going to get poor results.

Consider election night.

Building up to election night we were told that if Trump won the market would Crash. The media was in on this. Experts were in on this.

Then Trump won, and stocks erupted out to new all-time highs breaking out of a two-year consolidation range.

The media then flipped the script and began claiming that Trump had unleashed an economic utopia and that GDP growth of 5% would hit soon.

When I say, the “media” I mean the exact same groups claiming a Trump win would crash the markets.

My point is this: now more than ever if you’re trying to make money from the markets, you need to check your political bias.

Not everything Trump does is great and not everything Trump does is bad.

But if you have natural inclination to believe EITHER of those views tends to be true, you are in SERIOUS trouble.

On that note, we are already helping our clients successfully profit from Trump’s true impact on the markets with our Special Report titled How to Profit From the Trump Trade

In it, we outline how Trump’s Presidency will affect the markets in 2017 …which investments will perform best this year as a result of Trump’s policies… and three specific strategies that will outperform the market as a result of them.

You can pick up one of the few remaining copies here:

http://ift.tt/2ktrX6e

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

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Interested in precious metals investing or storage? Contact us HERE 

 

 

 

 

Fake News and Real Money

Posted with permission and written by Rory Hall and Dave Kranzler (CLICK HERE FOR ORIGINAL)

 

 

 

But the most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly and with unflagging attention. It must confine itself to a few points and repeat them over and over. Here, as so often in this world, persistence is the first and most important requirement for success. – Adolf Hitler

 

Propaganda, also known as “fake news,” has become the norm in mainstream media reporting. Somehow the idea of Russia hacking the DNC computers morphed into the generic, “Russia hacked the election.” Per Hitler’s formula, Hillary Clinton introduced the idea during one of the presidential debates and kept repeating it until the press seized it and ran all the way with to the end zone with “Trump is a Russian ally.” Now Congress is pre-occupied with the fraudulent charge that Russia is controlling U.S. politics. The whole spectacle is beyond idiotic.

 

In a similar manner, the reporting of economic statistics has become another tool of propaganda. The Government, as we all well know by now, spits out economic reports based on shoddy statistical samples that are seasonally adjusted. Then the data that is cooked for any specific month is annualized. While the result might not be too far off base for any specific month, the errors aggregate over time so that some statistics, like the GDP report, bear no resemblance to reality.

 

A great example of using propaganda to promote an idea is the continuous mantra coming from the National Association of Realtors that “low inventory” is hampering home sales. It’s an effective device to make the public think that a lack of homes for sale is the explanation for declining sales. It’s also a lie. Homebuilders are sitting on a record level of inventory. Flippers and investors bought 37% of all existing homes that traded in 2016. Many are sitting on homes they can’t sell for enough to cover their rehab expenses. The over $750,000 segment of the market is flooded with inventory.

 

The truth is that, if you examine the historical data in order to question the NAR’s assertions, the facts show that since 1999 – which is when the Fed began tracking existing home sales – relative inventory levels do not drive home sales:

 

 

In fact – if anything – there is an inverse correlation between inventory levels and home sales. In other words, since 1999, homes sales rise when inventories are low!

 

Thus propaganda is a tool used to manage public perception. Unfortunately, a high percentage of the population only consumes headlines and sound-bytes. It’s the perfect set-up for politicians to employ Hitler’s advice on administering propaganda. The commonly accepted idea is, in fact, the opposite of the truth.

 

The commandeering of a country by elitists begins by eliminating real money and replacing it with a fraudulent fiat currency. But the eastern hemisphere is moving in an opposite direction as the west. As reproduced in The Daily Coin, Russia and China have quietly struck an agreement laying the groundwork to replace the U.S. dollar’s reserve status with a gold-backed currency system: Moscow and Beijing join forces to bypass US dollar in world money market. In today’s episode of the Shadow of Truth we discuss the decline of the United States and the advancement of the new superpower bloc emerging in the east.

 

 

 

Questions or comments about this article? Leave your thoughts HERE.

 

 

 

 

Fake News and Real Money

Posted with permission and written by Rory Hall and Dave Kranzler (CLICK HERE FOR ORIGINAL)

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Following today’s disappointing consumer spending data, we forecast that a downward revision to the Atlanta Fed’s most recent 1.0% Q1 GDP forecast was imminent…

Atlanta Fed to revise its Q1 GDP lower once more after Personal Consumption disappointment

— zerohedge (@zerohedge) March 31, 2017

… and moments later it did not disappoint, announcing that “the GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 0.9 percent on March 31, down from 1.0 percent on March 24.”

The catalyst was as expected: “after this morning’s personal income and outlays release from the U.S. Bureau of Economic Analysis, the forecast for first-quarter real consumer spending growth fell from 1.4 percent to 0.8 percent. The forecast of the contribution of net exports to first-quarter real GDP growth increased from -0.49 percentage points to -0.16 percentage points after Tuesday’s Advance Economic Indicators Report from the U.S. Census Bureau.”

Putting the move in context, the Atlanta Fed Q1 GDP has declinedfrom 3.4% in late January to below 1% two months later.

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As University of Michigan’s Richard Curtin writes, “Democrats expect an imminent recession, higher unemployment, lower income gains, and more rapid inflation, while Republicans anticipate a new era of robust growth in incomes, job prospects, and lower inflation. It is a rare situation that combines increasing optimism, which promotes spending, and rising uncertainty which makes consumers more cautious spenders.”

While MoM UMich headline data improved modestly, it declined from intra-month levels and missed expectations as both current and future expectations slipped from preliminary data…

Expectations for higher incomes declined intra-month and timing for buying a home, car, or major appliance declined.

Curtin tries to explain the divergence…

“The high prevailing level of sentiment reflects the use of changed evaluative criteria.

 

Like economists who have lowered growth prospects, consumers have done the same, and have thus judged lower rates of growth more favorably than they would have in an earlier era.

 

Overall, the data indicate both rising optimism as well as rising uncertainty due to the partisan divide. The data indicate that real consumer spending will advance by 2.7% in 2017, but those gains will be uneven over time and across products.”

Meanwhile, inflation expectations slipped MoM (but gained modestly from preliminary record lows)

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With the market red on a Friday ahead of a new “merger Monday”, and the state of a new “mutual fund reallocation quarter”, something was due to snap, and sure enough moments ago TradeStateion announced that while equities and options trading is available, CME is down for futures trading.

It was not immediately clear if this was systemic, and exchanges would announce self-help against the CME momentarily, or is the result of a single busted data feed.

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The good news – another 'soft' survey data item inches to a new post-Trump high as Chicago PMI rises to 57.7 – highest since Jan 2015. However, the bad news is that exuberant hope is not translating into hard reality as the employment sub-index collapsed into contraction.

The 57.7 print beat expectations of a modest decline to 56.9, but the employment component crashed from 57.7 to 49.9 – into contraction.

Business barometer rose at a faster pace, signaling expansion

• Prices paid rose at a slower pace, signaling expansion
• New orders rose at a faster pace, signaling expansion
• Employment fell and the direction reversed, signaling contraction
• Inventories rose at a faster pace, signaling expansion
• Supplier deliveries rose at a faster pace, signaling expansion
• Production rose at a faster pace, signaling expansion
• Order backlogs fell at a slower pace, signaling contraction
• Business activity has been positive for 12 months over the past year.

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The six year Syrian proxy war to dethrone president Bashar al Assad quietly ended with a whimper yesterday when at a news conference in the Turkish capital, Secretary of State Rex Tillerson suggested the end of Bashar Assad’s presidency is no longer a prerequisite for a way out of the Syrian crisis, in a dramatic U-turn from Washington’s long-held policy.

“I think the longer term status of President Assad will be decided by the Syrian people,” said Tillerson at a joint conference with Turkish Foreign Minister Mevut Cavusoglu on Thursday, AFP reported. Later, UN Ambassador Nikki Haley echoed Tillerson, saying “Our priority is no longer to sit and focus on getting Assad out.”

“You pick and choose your battles and when we’re looking at this, it’s about changing up priorities and our priority is no longer to sit there and focus on getting Assad out,” U.S. Ambassador Nikki Haley told a small group of reporters.

 

“Do we think he’s a hindrance? Yes. Are we going to sit there and focus on getting him out? No,” she said. “What we are going to focus on is putting the pressure in there so that we can start to make a change in Syria.”

Under President Barack Obama, the United States made Assad’s departure one of its key objectives. The Syrian armed opposition also insisted upon the longtime leader’s resignation as one of the conditions during the Astana peace talks.

For those unaware, allowing the people of Syria to decide the fate of President Assad has been Russia’s stance since the conflict began. Moscow has repeatedly rebuffed any preconditions for Assad to step down before a political settlement of the crisis.

“The UN Security Council resolution and various decisions on Syria, adopted since 2012 with our proactive involvement, contain no demand or hint that Syrian President Bashar al-Assad must resign. On the contrary, they say that the people of Syria alone have a right to decide their future, and that the political process should involve all forces of Syrian society without exception, including ethnic, political forces, religious denominations and all opposition groups,” Russian Foreign Minister Sergey Lavrov said in a 2016 interview.

In other words, the entire proxy conflict, with thousands of lives lost, and millions of Syrian immigrants flooding Europe, has been for nothing.

Better yet, we have confirmation that Tillerson’s pivot was indeed groundbreaking courtesy of John McCain’s reaction. The Senate Armed Services Committee and prominent neocon said in a statement that “I am deeply disturbed by statements today by our Secretary of State and Ambassador to the United Nations regarding the future of Bashar al-Assad in Syria.”

McCain then slammed Tillerson, saying “Once again, U.S. policy in Syria is being presented piecemeal in press statements without any definition of success, let alone a realistic plan to achieve it.“

The angry neocon continued: “ultimately, the administration’s statements today could lead America’s true allies and partners in the fight against ISIS to fear the worst: a Faustian bargain with Assad and Putin sealed with an empty promise of counterterrorism cooperation. I hope President Trump will make clear that America will not follow this self-destructive and self-defeating path.”

He was not alone: Republican Sen. Lindsay Graham says if reports were accurate, “I fear it will be the biggest mistake since President Obama failed to act after drawing a red line against Assad’s use of chemical weapons.” He added that “This would be crushing news to the Syrian opposition and to our allies throughout the Middle East. I fear it is a grave mistake.”

With America’s two biggest neocons slamming Trump’s Syria reversal, it is safe to say that at least in this particular case, Trump made the right decision.

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