US Orders 60% Of Havana Embassy Staff To Leave After Wave Of Mysterious ‘Sonic Attacks’

Senior U.S. officials have told the Associated Press that the U.S. is pulling roughly 60% of its staff out of Cuba and warning American travelers not to visit due to "specific attacks" that have harmed U.S. diplomats – namely the unspecified sonic attacks that have caused injuries ranging from mild to severe in more than 20 diplomats who formerly worked at the embassy. The officials say the US is ordering all nonessential staff in the embassy in Havana to leave, along with all family members. Only "emergency personnel" will remain.

Meanwhile, the US is also halting issuing visas to Cubans over the attacks, though it has stopped short of implicating the Cuban government. 

The State Department warning on travel warning noted that many of the strange sonic attacks occurred in hotels, not the embassy itself, and that travelers could be at risk.

Following the news, Senator Marco Rubio criticized the State Department for not also kicking out some Cuban diplomats, given the egregious nature of the attacks.

 

The mysterious attacks started late last year, and at least one incident was recorded as recently as this month. The US has released little information on the nature of the attacks, or who the suspects might be.

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SocGen Says “Reduce Risk”: Hedge Funds Have Never Been This Short The VIX

Earlier this week, in the latest observations of broad market complacency, we pointed out that the VIX has remained heavily subdued in September – a month when volatility usually picks up – shrugging off rising geopolitical tension with North Korea, several destructive storms, and the Fed’s plan to normalize its balance sheet, while defying seasonal trends. As of Tuesday, the average VIX close in September month-to-date was just 10.60, which is the lowest average September on record. Since then, the VIX has declined even further.

Just as notable, the September 17 VIX settlement was 9.87. This was the lowest monthly settlement on record and only the second sub-10 monthly settlement (the other was in Feb 2007 when the VIX settlement was 9.95). Even more striking, monthly settlements are typically high in September as the average settlement during September since 2004 is 19.69, the fifth highest relative to other months. Putting the VIX performance in context, comparing 2017 monthly VIX settlements to historical norms, this month’s 9.87 print was the farthest below the mean.

So yeah, based on broad measure of implied volatility, which in turn also reflects realized vol, complacency abounds, which is not a surprise during a year of “global recovery” in which central banks have injected $2.2 trillion in liquidity.

It should also not be a surprise that, as SocGen writes, low volatility leads to a false sense of security. In a note by Arthur van Slooten, the SocGen strategist writes that “for a wide range of assets, current volatility levels have reached historical lows. In normal times, volatility is one of the most fundamental risk indicators that helps make a useful comparison between different asset classes.”

However, the current levels are so low “that they give falsely reassuring messages” according to SocGen. Consequently, the French bank notes that “assets with vastly different risk profiles get treated basically in the same way, caught in the relentless hunt for the last remaining sources of yield as the only focus.”  Hence, SocGen’s warning: “Beware complacency. Reduce Risk

Going back to the top charts, SocGen brings attention to the most popular indicator of complacency: the VIX, or rather its record low, 3-sigma net short position.

A fitting example of extreme positioning is the unusually strong level of net short positions on implied equity volatility (VIX), more than three standard deviations below the long-term average. Despite very low levels (spot VIX at 9.87 on 27 September) hedge funds continue to expect this very low volatility environment to continue. If it does, the strong skew in volatility futures results in attractive returns.

For those tired of the old “collecting pennies in front of a steamroller” analogy, SocGen has another one to describe this state of affairs:

Compare that with dancing on the rim of a volcano. If there is a sudden eruption (of volatility) you get badly burned.”

Putting this historic, 3-sigma bet on declining VIX which is already at record low levels, is the following SocGen chart:

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“Tit-For-Tat”: Russia Warns CNN For “Violating Russian Media Law”

The “Russian collusion” crusade took a bizarre turn yesterday when Twitter, apparently in the absence of any tangible evidence that Kremlin spies exploited the social media service to undermine the 2016 election, decided to publicly disclose the exact amount of advertising revenue it received from Russia Today during 2016. It’s unclear what that disclosure was intended to accomplish since even Twitter says the ads were directed at “followers of mainstream media and primarily promoted RT Tweets regarding news stories”…which hardly seems like an attempt to stage a coup.

Not surprisingly, it only took Russia’s communications regulator a couple of hours to respond to Twitter’s increased aggression by threatening to crack down CNN’s operations in Russia, an outlet which the regulator says is “violating Russian media law.”  Per Reuters:

Russia’s communications regulator on Friday accused U.S. TV channel CNN International of violating Russian media law and said it had summoned the broadcaster’s representatives in connection with the matter.

 

The Russian foreign ministry accused Washington on Thursday of putting unwarranted pressure on the U.S operations of Kremlin-backed media outlet RT, and warned that Moscow could take tit-for-tat measures.

 

President Vladimir Putin told a meeting of Russia’s Security Council on Friday that Russian media outlets working abroad were facing growing and unacceptable pressure, his spokesman Dmitry Peskov said.

 

The communications regulator, Roskomnadzor, said in a statement on its website that it would look at warning CNN about the alleged violations, which it said also breached the terms of its broadcast license.

 

It did not say what breaches of Russian laws the U.S. broadcaster had made, adding it would continue its “systematic monitoring” of foreign mass media outlets registered in Russia.

Meanwhile, President Putin apparently also took note of the increased pressure on RT saying that “such pressure on Russian media is unacceptable” and that any hostile actions taken against Russian media in the U.S. would be met with a “tit-for-tat response.”

Putin, meeting permanent members of his Security Council, “touched upon the issue of ongoing and at times growing pressure on Russian mass media outlets in some foreign countries”, Peskov told a conference call with reporters.

 

“It was stressed that such pressure on Russian media is unacceptable,” he added. He did not name the countries where the Kremlin was concerned Russian media were coming under pressure.

 

The Foreign Ministry’s Zakharova said any move made against Russian media working in the United States “will get a tit-for-tat response”.

 

“And who it falls on, this should be easy for Washington to work out. The clock is ticking,” she said at a weekly briefing on Thursday.

Putin

Of course, this all comes after Twitter decided to inform Congress, and the world, yesterday that they received $274,100 in advertising revenue from ‘Russia Today’ throughout 2016.  Of course, it’s unclear what that disclosure was intended to accomplish since even Twitter says the ads were directed at “followers of mainstream media and primarily promoted RT Tweets regarding news stories”…which hardly seems like an attempt to stage a coup…but at least it’s something?

The US intelligence community released a report in January, 2017, highlighting the role that RT (Russia Today), which has strong links to the Russian government, allegedly played in seeking to interfere in the 2016 U.S. election and undermine trust in American democracy. RT has accounts on Twitter and tweets regularly. The open nature of the Twitter platform means this activity was public.

 

Today we proactively shared with committee staff a round-up of ads that three RT accounts (@RT_com, @RT_America, and @ActualidadRT) targeted to the U.S. market in 2016. As of our meetings today we believe this is the complete list from these three accounts within that time frame, but we are continuing to review our internal data and will report back to the committees as we have more to share.

 

Based on our findings thus far, RT spent $274,100 in U.S. ads in 2016.  In that year, the @RT_com, @RT_America, and @ActualidadRT accounts promoted 1,823 Tweets that definitely or potentially targeted the U.S. market. These campaigns were directed at followers of mainstream media and primarily promoted RT Tweets regarding news stories.

The Twitter disclosure prompted a snarky reaction from RT Editor-in-Chief Margarita Simonyan who fired back saying she wasn’t aware that paying for advertising is now considered suspicious or harmful in a developed democracy such as the United States.  She went on to say that she’s very excited to find out how much U.S. media outlets spend in the Russian segment of Twitter…you know, since advertising on social media in foreign countries now seems to be a criminal act.

“This is forcing us to go a step further and come clean that we also spent money on advertising at airports, in taxis, on billboards, on the Internet, on TV and radio. Even CNN ran our commercials,” Simonyan said. “By the way, similar campaigns are conducted by the American media in the Russian segment of Twitter. It’ll be very interesting to find out how much they spend on it, who they target and for what purpose.”

Will this never end?

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Investing for 5x, 7x, 10x Returns…

By Chris at http://ift.tt/12YmHT5

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ICE Raids Target Sanctuary Cities, DOJ Seeks Facebook Info on Anti-Trump Activists, Cop Can’t Sue Black Lives Matter: A.M. Links

  • Immigration and Customs Enforcement arrested 167 people around Los Angeles yesterday as part of an effort to target sanctuary cities and counties. Around 500 people were arrested in the efforts this week.
  • A Baton Rouge police officer cannot sue Black Lives Matter over his injury at a 2016 protest against police brutality. “Although many entities have utilized the phrase ‘black lives matter’ in their titles or business designations, ‘black lives matter’ itself is not an entity of any sort,” wrote U.S. District Judge Brian A. Jackson.
  • The Department of Justice is demanding Facebook turn over information on three users who were active in anti-Trump “resistance” groups off and online. “What is particularly chilling about these warrants is that anti-administration political activists are going to have their political associations and views scrutinized by the very administration they are protesting,” said ACLU attorney Scott Michelman.
  • Was Hugh Hefner good for the ladies?
  • A federal appeals court ruling on D.C. gun laws could send the matter to the U.S. Supreme Court.
  • HHS Secretary Tom Price is promising to pay back the cost of private charter planes he took.

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Aramco IPO Could End OPEC Status Quo

Authored by Damir Kaletovic via OilPrice.com,

Sources have told Reuters that the Saudi drive to get OPEC on board with production cuts last year – threatening to quit the bloc if members disagreed – was in part meant to maximize Aramco’s valuation with higher oil prices ahead of its planned IPO.

An Aramco IPO changes everything for OPEC.

The Kingdom would be the only OPEC country with a national oil firm listed abroad, and listing abroad means listening to private investor sentiment. It also means adhering to listing rules, including anti-trust legislation, particularly in the United States, which frowns on “price fixing”—a practice Aramco could be accused of under the current production quota scenario.

“Once a stake in Aramco is floated, however, the company will have to take into account the interests of outside investors,” Reuters wrote, citing industry sources.

It’s no longer about market share for Saudi Arabia, which is why the Kingdom has become much less focused on keeping the pumps on high.

The newspaper quoted a high-level OPEC source as expressing surprise at how quickly the Kingdom became “the main price hawk” and “shifted from its policy of prioritizing market share, by pumping oil at full tilt, to supporting production cuts following its decision to list Aramco.”

Now it’s about making Aramco more attractive, and that’s a major challenge. The most obvious way to make Aramco more attractive is to see the price of oil jump, but—as the modest results of the OPEC production cuts showed—that’s easier said than done. The Saudis aren’t the swing producer they used to be, and it’s not as easy as it used to be to control the price of oil by turning up the pumps or shutting them down.

Now the market has U.S. shale, and they’re not just pumping out at full tilt with no thought for the supply glut or oil prices. U.S. shale producers are focusing on ROI (return on investment). When Nigerian and Libyan oil production clawed its way back to the world market after a revival of militant attacks in the former, and the post-Gaddafi chaos of the latter, U.S. shale responded by cutting capital expenditure, as Bloomberg notes. They’re thinking long-term ROI, not immediate crash and burn gains.

Revising the tax base and royalties set-up for Aramco are two other ways to make it more attractive. Corporate tax reductions have already been made, and a change to royalties is being discussed, along with cost-cutting measures. 

The Saudi plan is to list some 5 percent of Aramco by the end of next year on the Riyadh stock exchange, and possibly also in London or New York, though the latter appears to be favored at present.

The Saudis are expecting the IPO to value Aramco at $2 trillion – at least. But it’s a price tag that will depend on oil prices, and talk is that they need $60 oil for the IPO to make sense for Aramco.

In the meantime, the Saudis have lost some of their market share, both to Russia and Iraq.

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Dollar Drops As Fed’s Key Inflation Indicator Slumps To 2-Year Lows

The dollar is extending its losses after Core PCE – among the Fed's most critical inflation indicators – slumped to just 1.29% YoY, the lowest since Oct 2015.

Headline PCE disappointed (+1.4% vs +1.5% exp) and was unchanged from July's print but Core PCE was considerably worse.

Despite Yellen's constant talk of 'transitory' shifts, this is the 6th monthly decline in this key measure and is the biggest miss against expectations in 2 years.

 

And the reaction is evident in FX markets as rate-hike odds fade modestly…

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Real Personal Spending Drops Most Since Jan 2016

Growth in income and spending has been trending slower for the last six months and August showed continued weakness in spending (slowest annual growth since Aug 2016) but a slight uptick in incomes.

The savings rate was unchanged at 3.6% – the lowest since December…

 

But perhaps most noteworthy is the 0.1% MoM drop in real personal spending, the weakest since Jan 2016.

This is not the 3.1% GDP exuberance you were looking for!

Of course all of this comes with a big fat saveat from the government data-mashers:

The August estimates of personal income and outlays reflect the effects of Hurricane Harvey that made landfall in southeastern Texas on August 25th. BEA cannot separately quantify the total impact of the storm on personal income and outlays because most of the source data used to estimate the components of personal income and outlays do not separately identify storm impacts.
tim PCE missed
i think

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Congressman Attacks “Disloyal” John Kelly For Quashing Possible Trump-Assange Deal

As we reported last week, California Rep. Dana Rohrabacher earlier this year tried to broker a deal between the Trump administration and Wikileaks founder Julian Assange whereby Assange would furnish purportedly conclusive evidence that Russia wasn’t responsible for the DNC leaks in exchange for a presidential pardon.

Well, apparently Trump isn’t an avid reader of the Wall Street Journal (the newspaper that originally reported on the Rohrabacher-Assange deal), because when asked about it over the weekend, he responded that he’d “never heard” of the deal.

That’s not surprising. As WSJ initially reported, Rohrabacher was stymied by Chief of Staff John Kelly when he tried to take the deal to the president. Trump’s chief of staff, who’s efforts to impose “discipline” on the West Wing in part by limiting access to the president have been widely publicized, suggested that Rohrabacher first clear the deal with the intelligence agencies, which, of course, would be a non-starter.

So, in what’s likely another attempt to circumvent Kelly’s influence via the media (after all, it’s not out of the question that Rohrabacher was behind the initial leaks to WSJ) Rohrabacher complained to the Daily Caller that certain disloyal aides are creating “a wall around” the president.

“I think the president’s answer indicates that there is a wall around him that is being created by people who do not want to expose this fraud that there was collusion between our intelligence community and the leaders of the Democratic Party,” Rohrabacher told The Daily Caller Tuesday in a phone interview.

 

 

“This would have to be a cooperative effort between his own staff and the leadership in the intelligence communities to try to prevent the president from making the decision as to whether or not he wants to take the steps necessary to expose this horrendous lie that was shoved down the American people’s throats so incredibly earlier this year,” Rohrabacher said.

As WSJ reported, Rohrabacher met with Assange in August at the Ecuadorian embassy in London, where the WikiLeaks founder has lived in asylum since 2012 due to now-dropped sexual assault charges in Sweden. However, American authorities are reportedly still investigating Assange for his role in disseminating thousands of classified US documents. At the meeting, Assange purportedly promised to deliver information that proves Russia wasn’t behind the DNC leak.

While Trump said early in the campaign that he believed Assange should get “the death penalty” for publishing US secrets and endangering intelligence assets, he has since softened his tone. Earlier this year, he praised Wikileaks for publicly denying that the Russian government was the source of the leaked DNC emails – provoking outrage among Democrats and some Republicans, who accused the president of siding with an enemy of the state over his own intelligence community.

US intelligence agencies have claimed that Russian state actors were involved with the hacking and leaking of Clinton campaign chairman John Podesta’s emails.

Rohrabacher said that a pardon would likely have to occur for Assange to give up this information about the source of the DNC emails. Assange has long maintained that he would never reveal a source, but Rohrabacher said that Assange now “wants to get out of the Ecuadorian embassy.” Rohrabacher told The Daily Caller that he hasn’t seen the information that Assange says vindicates Russia, but vouched that the Wikileaks founder would provide the goods if the president is on board.” According to US laws, the president is able to preemptively pardon someone.

To be sure, nobody has railed against the ongoing Russia investigation harder than Trump, who has vehemently denied accusations that his campaign colluded with Russia, while also pushing back against the notion that Russia actively tried to interfere in the US election.

It’s not out of the question that Trump would consider such a deal if it were presented to him.

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Movie Review: American Made: New at Reason

One of the pleasures of American Made, the new Tom Cruise movie, is watching an average American – well, an average American scam artist—tying several muscular arms of the U.S. government in knots. It’s hard to say how faithful the movie is to the facts of this real-life case (director Doug Liman calls the film “a fun lie based on a true story”), but you have to take your Schadenfreude where you can get it, and here it is.

Having weathered the charisma hit of The Mummy less than four months ago, Cruise is back at full star wattage here, completely engaged and funnier than he’s been in years. He’s playing Barry Seal, an airline pilot back around the turn of the 1980s. Barry has an illicit sideline—smuggling Cuban cigars in from South American runs—that has brought him to the attention of the authorities. Although not the authorities he might have expected, writes Kurt Loder in his latest review for Reason.

View this article.

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