Month: September 2017

As tensions between North Korea and the U.S. continue to escalate with every Trump tweet and subsequent response by Kim Jong-Un, National Security Adviser H.R. McMaster said that the U.S. has prepared “four or five different scenarios” for how the crisis with North Korea will be resolved, adding ominously that “some are uglier than others.” 

McMaster declined to comment on the extent to which North Korea’s deeply-buried nuclear program was vulnerable to U.S. military strikes — an assessment made of Iran before the 2015 framework agreement designed to stop its nuclear program.

 

He acknowledged that every military option assumed a reaction from North Korea that endangered South Korean citizens, adding it’s “foremost in our minds.” That danger “is certainly taken into consideration in all our planning and war gaming, table-top exercise efforts,” McMaster said.

Still, while McMaster said the threat from Pyongyang is “much further advanced” than anticipated and the Pentagon said the president has a “deep arsenal” to draw upon if needed, Bloomberg quoted U.S. officials who dismissed North Korean Foreign Minister Ri Yong Ho’s comment that President Donald Trump’s warnings to Pyongyang at the United Nations amounted to a declaration of war.

That said, both governments have said “all options” are on the table in dealing with the tensions. Defense Secretary Jim Mattis, speaking in India on Tuesday, said the U.S. wants to keep engagement with North Korea in the diplomatic realm as long as possible. But on Monday Ri escalated tensions with his remark that North Korea would be within its rights to shoot down U.S. warplanes flying in international airspace. That startled markets, coming just days after the Pentagon sent planes near North Korea’s border.

Additionally, as reported this morning, North Korea boosted defenses on its eastern coastline after the US flew B-1B Lancer bombers and F-15C Eagle fighter escorts from Okinawa, Japan, just off the coast of North Korea – the farthest north of the demilitarized zone any U.S. fighter or bomber aircraft have flown off North Korea’s coast this century, the Pentagon said. North Korea was surprised by the bombers, which weren’t caught by its radar,
Yonhap News reported, citing the head of the intelligence committee of
South Korea’s parliament.

The Pentagon said its most recent bomber and fighter exercises were meant to underscore “the seriousness with which we take DPRK’s reckless behavior,” White said last week, using the initials for North Korea’s formal name. “This mission is a demonstration of U.S. resolve and a clear message that the President has many military options.”

The question of course, is how would Pyongyang respond to any potential strike: military analysts have said any conflict between the U.S. and North Korea would risk a devastating attack by Pyongyang on the South Korean capital Seoul.

“There’s not a ‘precision strike’ that solves the problem,” McMaster said at an event in Washington hosted by the Institute for the Study of War. “There’s not a military blockade that can solve the problem. What we hope to do is avoid war, but we cannot discount that possibility.”

Meanwhile, Lu Kang, a spokesman for China’s foreign ministry said assertiveness from both sides would only increase the risk of confrontation. “We have witnessed a lot of saber rattling recently on the Korean peninsula,” he said. “We hope the U.S. and DPRK politicians can realize that resorting to military means will never be a viable way out for this issue.”

* * *

In conclusion, Bloomberg reminds us that in 1969, President Richard Nixon considered tactical nuclear strikes after North Korea shot down a U.S. reconnaissance plane, according to documents declassified in 2010 and published by the National Security Archive.

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Despite a slew of disappointing sales (new, existing, and pending), Case-Shiller reports national home prices rose 5.94% YoY – the fastest rise since June 2014 – hitting a new record high (now over 5% above 2006's peak).

It has now been 36 straight months that the S&P CoreLogic Case-Shiller 20-City Compoosite home price index has risen at approximately 5 to 6% annually and it has been 62 months without any YoY price drops…

 

Gains in New York and Los Angeles dominated the annual performance.

As Bloomberg highlights, buyers are competing for a limited number of for-sale homes, allowing sellers to boost asking prices. Property values are consistently outpacing wage growth, helping explain why the share of first-time buyers of previously owned homes in August was at a one-year low. At the same time, owners’ equity as a share of total real-estate holdings climbed in the second quarter to the highest level in 11 years.

Home prices may also get a boost in coming months after hurricanes Harvey and Irma reduced housing supply in parts of Texas and Florida. Affordability may remain challenging, as both sales and construction are interrupted by clean-up efforts. At the same time, a strong labor market and low-borrowing costs continue to encourage hopeful homebuyers.

While home prices continued to advance strongly along the northwest part of the country, values were also picking up in Denver, Dallas and Las Vegas — underscoring a broadening of appreciation throughout the U.S.

Las Vegas, one of the hardest-hit cities during the housing collapse, registered the third-largest year-over-year advance in July.

“While the gains in home prices in recent months have been in the Pacific Northwest, the leadership continues to shift among regions and cities across the country,” David Blitzer, chairman of the S&P index committee, said in a statement.

 

“Rebuilding following hurricanes across Texas, Florida and other parts of the south will lead to further supply pressures.”

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Less than two weeks after the top security individuals at Equifax “retired” after what may have been the biggest hack in U.S. corporate history, moments ago the company announced that the exodus from the sinking ship continued when company Chairman and CEO, Richard Smith, has also “retired” effective immediately. As such, it remains unclear if anyone at the organization will actually be “fired” for what is gross, and potentially criminal, corporate negligence.

Smith took the helm of Equifax 12 years ago and transformed it from what he once described as a staid, slow-growing credit-reporting company into a data giant.

Smith bought companies with databases that contained information about consumers’ employment histories, salaries and savings while also expanding internationally to places like Australia and India.

The result: by 2016, credit-reporting activities accounted for less than a third of revenues versus about 80% a decade earlier. Equifax’s market value soared to nearly $18 billion, more than quadruple its value when Smith started.

The Board also said it had appointed current Board member, Mark Feidler, to serve as Non-Executive Chairman, while Paulino do Rego Barros, Jr., who most recently served as President of Asia Pacific has been appointed as interim Chief Executive Officer, succeeding Smith

Commenting on the resignation, the company’s non-executive Chairman Mark Fielder said that “the Board remains deeply concerned about and totally focused on the cybersecurity incident. We are working intensely to support consumers and make the necessary changes to minimize the risk that something like this happens again. Speaking for everyone on the Board, I sincerely apologize. We have formed a Special Committee of the Board to focus on the issues arising from the incident and to ensure that all appropriate actions are taken.”

It is unclear if Smith’s retirement clears him and any others of potential insider stock sales that may have taken place during the time when the company was aware of the data breach, which was only disclosed to the public some three weeks ago.

From the press release:

Equifax Chairman, CEO, Richard Smith Retires; Mark Feidler Named as Chairman; Paulino do Rego Barros, Jr. Named as Interim CEO

 

The Board of Equifax Inc. today announced that Richard Smith will retire as Chairman of the Board and Chief Executive Officer, effective September 26, 2017. The Board of Directors appointed current Board member, Mark Feidler, to serve as Non-Executive Chairman. Paulino do Rego Barros, Jr., who most recently served as President, Asia Pacific, and is a seven-year veteran of the company, has been appointed as interim Chief Executive Officer, succeeding Smith. The Board will undertake a search for a new permanent Chief Executive Officer, considering candidates both from within and outside the company. Mr. Smith has agreed to serve as an unpaid adviser to Equifax to assist in the transition.

 

Mark Feidler stated, “The Board remains deeply concerned about and totally focused on the cybersecurity incident. We are working intensely to support consumers and make the necessary changes to minimize the risk that something like this happens again. Speaking for everyone on the Board, I sincerely apologize. We have formed a Special Committee of the Board to focus on the issues arising from the incident and to ensure that all appropriate actions are taken.”

 

“Our interim CEO, Paulino, is an experienced leader with deep knowledge of our company and the industry. The Board of Directors has absolute confidence in his ability to guide the company through this transition,” Feidler continued.

 

Richard Smith said, “Serving as CEO of Equifax has been an honor, and I’m indebted to the 10,000 Equifax employees who have dedicated their lives to making this a better company.

 

“The cybersecurity incident has affected millions of consumers, and I have been completely dedicated to making this right. At this critical juncture, I believe it is in the best interests of the company to have new leadership to move the company forward,” Smith added.

 

“On behalf of the Board, I express my appreciation to Rick for his 12 years of leadership,” Feidler said. “Equifax is a substantially stronger company than it was 12 years ago. At this time, however, the Board and Rick agree that a change of leadership is in order.”

 

Feidler is a partner and co-founder of MSouth, a private equity investment firm. He has served as an independent director for Equifax since 2007. Feidler served as president and COO of BellSouth Corporation until its merger with AT&T in December 2006. Previously, from 2000 to 2003, Feidler was the COO of Cingular Wireless, commencing upon the formation of Cingular when BellSouth and AT&T (formerly SBC) merged their domestic wireless operations to form Cingular.

 

Paulino Barros most recently led the company’s Asia-Pacific business, which includes the largest acquisition in Equifax’s history – Veda, the leading provider of credit information and analysis in Australia and New Zealand. Previously, Barros led the company’s U.S. Information Solutions (USIS) business and prior to that led the company’s International business unit. Prior to Equifax, Barros founded and served as president of PB&C – Global Investments, LLC and previously served in several executive positions at BellSouth Corporation and AT&T, including president of Global Operations for AT&T. His previous experience includes executive and managerial roles at Motorola, Inc., The NutraSweet Company and Monsanto Company.

Considering the recent stock price performance, Smith’s decision is hardly surprising. (EFX just re-opened down 3% following the news)

Meanwhile, the question of how some 143 million Americans will protect their hacked personal data remains unanswered.

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Submitted by Bill Blain of Mint Partners

Blain’s Morning Porridge: A Short Distraction In The Oil Market

Did I detect a distinct change in the market wind yesterday? There is a new freshening blow out the East. It feels like the world is changing: a slide in tech stocks and a wobble in sentiment, stronger oil prices and all the noise about Germany and where that leaves Europe, and Macron’s France’s dreams of Empire closer union.

Of course we still have all the usual worries, like North Korea saying Trumps twittering gives them carte blanche to shoot down American planes – which, to be honest, is unlikely because nobody is really that stupid… are they? And as Trump plays to red-neck sports fans, we also saw the death knell spike delivered on Obamacare reform. Then there is Spain vs Catalunya – perhaps a topic we should pay more attention to. And I think there was probably more news about Brexit, but to be honest I wasn’t paying attention and could not be ar**d to read about it. Bored of it. Get on with it.

As always, there is so much to think about.

Oil is one I’m watching closely because it’s the global commodity and market price that could change everything.

We’ve been arguing across the desk these past few years about whether $55-45 is the new normal range for oil, or do prices revert back towards $100? Some argue a stronger global economy means higher prices, others that the demand and supply dynamics have so fundamentally changed that a lower long term range is nailed-on for decades.

In this current rising oil phase – highest levels in over 2 years – prices have been driven higher on a number issues: concerns about Kurdistan supply (a whole can of worms in itself), OPEC generally sticking to cutting production, an uptick in anticipated demand from Asia and China in particular as it builds reserves, declining stockpiles, and the general sense the world is in recovery. That’s a long-term plus: as the global economy has “recovered” we’ve seen oil demand expand about 1.9%, while supply has lagged at 1.1% expansion. I’m seeing expressions like “rebalancing”, “turning a corner” and “price reversion” in the reports.

The fact China is supposedly building up strategic reserves as a hedge against future energy stocks is fascinating. But that’s a strategic rather than market issue. The FT reports one oil trader saying “China has helped to clean up the glut.”

Meanwhile, Bloomberg are looking to backwardation in the oil futures and predicting a potential scarcity of supply by 2019, quoting Citicorp reports on weak investment in new drilling. These sound like arguments for a higher long-term price – and all the implications that will have on global inflation.

But, the oil equation is a particularly interesting one in light of the “new-oil” revolution of the 2000s identifying new more efficient production methods and new sources – of which fracking, oil sands and shale were just part. The cost of oil has changed dramatically. In recent weeks we’ve seen US oil stocks back in vogue and a bright spot in stocks – they weathered the price crash, cut costs to the bone, and can now pump out as much oil as America needs at a far lower swing price.

Energy exports are underway – putting the US head-to-head with OPEC and its allies. The fact the US can profitably turn on the gas spigot whenever they like means they stand to benefit from any rally, and stem it. That puts the oil-funded spending junkies of OPEC at a chronic disadvantage. The old strategic oil imperatives change dramatically now the US is oil-independent and offering to supply core allies.

Of course there is always a rogue element in oil – for instance Iran, coming back on line after years of sanctions and able to produce at cheapest levels, while Saudi is so broke it just has to produce..  

As a story, oil has further to run. The issue for markets is how dramatically will higher oil prices impact inflationary expectations in the current rosy Macro world-view? That could solve the lack of inflation at a stroke – but probably push stressed full employment economies like the UK into stagflation.

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Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

 

The Grim Reaper has taken his scythe to the Venezuelan bolivar. The death of the bolivar is depicted in the following chart. A bolivar is worthless, and with its collapse, Venezuela is witnessing the world’s worst inflation. 

 

As the bolivar collapsed and inflation accelerated, the Banco Central de Venezuela (BCV) became an unreliable source of inflation data. Indeed, from December 2014 until January 2016, the BCV did not report inflation statistics. Then, the BCV pulled a rabbit out of its hat in January 2016 and reported a phony annual inflation rate for the third quarter of 2015. So, the last official inflation data reported by the BCV is almost two years old. To remedy this problem, the Johns Hopkins – Cato Institute Troubled Currencies Project, which I direct, began to measure Venezuela’s inflation in 2013. 

The most important price in an economy is the exchange rate between the local currency and the world’s reserve currency — the U.S. dollar. As long as there is an active black market (read: free market) for currency and the black market data are available, changes in the black market exchange rate can be reliably transformed into accurate estimates of countrywide inflation rates. The economic principle of Purchasing Power Parity (PPP) allows for this transformation.

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I compute the implied annual inflation rate on a daily basis by using PPP to translate changes in the VEF/USD exchange rate into an annual inflation rate. The chart below shows the course of that annual rate, which peaked at 2432.94% (yr/yr) in mid-September 2017. At present, Venezuela’s annual inflation rate is 2275.78%, the highest in the world (see the chart below). 

 

via http://ift.tt/2y6hWCL Steve H. Hanke

Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

The Grim Reaper has taken his scythe to the Venezuelan bolivar. The death of the bolivar is depicted in the following chart. A bolivar is worthless, and with its collapse, Venezuela is witnessing the world’s worst inflation. 

As the bolivar collapsed and inflation accelerated, the Banco Central de Venezuela (BCV) became an unreliable source of inflation data. Indeed, from December 2014 until January 2016, the BCV did not report inflation statistics. Then, the BCV pulled a rabbit out of its hat in January 2016 and reported a phony annual inflation rate for the third quarter of 2015. So, the last official inflation data reported by the BCV is almost two years old. To remedy this problem, the Johns Hopkins – Cato Institute Troubled Currencies Project, which I direct, began to measure Venezuela’s inflation in 2013. 

The most important price in an economy is the exchange rate between the local currency and the world’s reserve currency — the U.S. dollar. As long as there is an active black market (read: free market) for currency and the black market data are available, changes in the black market exchange rate can be reliably transformed into accurate estimates of countrywide inflation rates. The economic principle of Purchasing Power Parity (PPP) allows for this transformation.

I compute the implied annual inflation rate on a daily basis by using PPP to translate changes in the VEF/USD exchange rate into an annual inflation rate. The chart below shows the course of that annual rate, which peaked at 2432.94% (yr/yr) in mid-September 2017. At present, Venezuela’s annual inflation rate is 2275.78%, the highest in the world (see the chart below). 

via http://ift.tt/2y6hXGP Steve H. Hanke

Last night, after a fiery campaign appearance for Judge Roy Moore in Alabama, former White House Chief Strategist Steve Bannon took to Fox News to lash out at everyone from NFL players taking a knee at football games to the “spineless” Republican establishment.  Here’s a recap of the more salient points:

“If people in this country take a knee and the national football players want to take a knee, they should take a knee at night, every night, and thank God in heaven Donald J. Trump is president of the United States.”

 

“He has saved this country so much grief. He has done such a tremendous job with virtually no help.”

 

“I stepped out to make sure that Mitch McConnell and the Republican establishment start to have a Republican back.  Mitch McConnell wouldn’t be majority leader if Donald Trump didn’t drag half a dozen senators across the goal line in November.”

 

“So it’s time for the Republican establishment to step up and have the back of President Trump.”

Bannon on anthem protests: They should take a knee…every night & thank God in heaven Donald J. #Trump is President https://t.co/SZjLuXDlJ7 http://pic.twitter.com/Y8gKxk6lne

— Fox News (@FoxNews) September 26, 2017

Meanwhile, as Politico notes, Bannon’s comments on Fox News were somewhat tame compared to the verbal lashing he levied upon McConnell and crew at Moore’s campaign event in Alabama.

“For Mitch McConnell and Ward Baker and Karl Rove and Steven Law — all the instruments that tried to destroy Judge Moore and his family — your day of reckoning is coming,” Bannon said, referring to the Republican Senate leader and a trio of prominent GOP strategists backing incumbent Sen. Luther Strange. “But more important, for the donors who put up the [campaign] money and the corporatists that put up the money, your day of reckoning is coming, too.”

 

Bannon said mainstream Republicans behind Strange’s campaign regard Alabama voters as “a pack of morons. They think you’re nothing but rubes. They have no interest at all in what you have to say, what you have to think or what you want to do. And tomorrow, you’re gonna get an opportunity to tell them what you think of the elites who run this country!”

 

“Mitch McConnell and his permanent political class is the most corrupt, incompetent group of individuals in this country!” Bannon said to loud applause.

Of course, if you believe the polls then it’s looking increasingly likely that Bannon’s candidate, Roy Moore, will score an easy victory in tonight’s runoff election.

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As relations between the US and Russia continue to strain, US officials are preparing restrictions for Russian military flights over American territory, permitted by the Treaty on Open Skies, a 2002 agreement involving 34 countries that allows signatories to conduct aerial surveillance of military installations and other sensitive sites, according to the Wall Street Journal.  Tensions over the treaty intensified over two days in early August when, as we reported, a Russian jet flew over several US cities including Washington DC and Bedminster NJ, while President Donald Trump was staying at the Trump National Golf Club in the town.

The Open Skies Treaty has been in effect since 2002, and has enabled more than 1,200 flights meant to help verify that signatories are in compliance with arms control agreements, according to the US Defense Threat Reduction Agency (DTRA). Notably, under the freedom permitted by Open Skies, the Russian plane was authorized to enter P-56, the highly secure airspace surrounding the White House.

But now, predictably, US military officials suspect that Russia is trying to hide something from the prying eyes of spy planes flying overhead: Recently, the Kremlin imposed restrictions on flights over Kaliningrad, Russia’s Baltic Sea exclave, which US officials believe is host to a cache of sophisticated weapons, according to the WSJ.

While the treaty allows for a per-flight range of 5,500 kilometers (3,418 miles), Russia has enforced a “sub-limit” of 500 kilometers for flights over Kaliningrad. Since it requires roughly 1,200 kilometers to cover the entirety of Kaliningrad during an Open Skies flight, according to Pentagon officials. This restriction compels treaty members to reallocate two flights that would otherwise be used to observe other portions of Russia.

The restrictions have prompted US officials to question what the Russian military in Kaliningrad may be doing between Open Skies flights, and so they’re trying to incentivize their Russian partners to return to compliance.

“We want to induce Russia to come back into compliance with the treaty,” said a senior State Department official, adding measures the U.S. takes that are reversible could prod Moscow.

Among options that U.S. officials have considered are limitations of Russian flights over Alaska and Hawaii, according to officials with knowledge of the matter. The treaty’s US delegation is scheduled to announce reciprocal countermeasures Tuesday during a meeting of the Open Skies consultative commission in Vienna, according to officials at the State Department and Pentagon. Russian officials responded by claiming that several parties to Open Skies, including Canada, Georgia, Turkey and the US, have placed some limits on what can be accessed by the spy planes of signatories.

Russian just flat out trolling us, Russian Tu-154 just overflew the Capitol and Pentagon at about 3700' and I got a nice front row seat!! http://pic.twitter.com/tcwqQKgGnx

— ???? Tracker (@TXWayne) August 9, 2017

Russia claims that the US required a Russian flight to raise its altitude floor over the Alexander Archipelago in Alaska during an Open Skies flight in July. “The US is resourceful in reducing access to its airspace,” retired Maj. Gen. Alexander Peresypkin said.

“We have serious claims that a number of participating states are interfering with observation flights,” a member of Russia’s Vienna delegation, told The Wall Street Journal. “Our partners, in an attempt to ‘balance’ mutual claims, often just come up with small problems, elevated to the rank of big ones.”

However, under Open Skies, Russia has also restricted flights along its borders with Abkhazia and South Ossetia, two disputed territories that declared independence following the Russo-Georgian War in 2008. Russia has also raised the altitude floor for flights over Moscow, and in the past it has restricted flights over Chechnya and cited force majeure, canceling flights due to the presence of high-ranking officials in the areas of pre-approved flight plans.

As WSJ explains, the Treaty on Open Skies was ultimately ratified in 1992, before going into effect in 2002. Initially conceived during the Eisenhower Administration, it is among several treaties to which Russia and the US are party that have been fraying in recent years.

Russia unilaterally left the Treaty on Conventional Armed Forces in Europe in 2015 after declaring a temporary hiatus in 2007. There’s also the Vienna Document, a military-inspection agreement among members of the Organization for Security and Cooperation in Europe, which Russia has increasingly challenged.

“Open Skies is part of a gradual breakdown in relations,” said the senior State Department official. “Russia wants to renegotiate the European security relationship. We’re seeing European security agreements erode.”

One US lawyer quoted by WSJ said Russia was creating “nuisance restrictions”…

“They’re imposing nuisance restrictions that diminish the usefulness of the treaty to the U.S.,” said Stephen Rademaker, a lawyer at Covington & Burling who previously served as assistant secretary of state in charge of the Bureau of International Security and Nonproliferation. “Russia will comply to the extent they feel they have to or want to. That’s a bad trend for security in Europe, for our allies in particular.”

…To try and stop the US from viewing “sophisticated” weapons and defense systems that have been built up in Kaliningrad.

“There have been reports about all kinds of sophisticated radar systems—air defense, area denial capabilities—designed to keep NATO warships and airships away,” said Michael Carpenter, a former Deputy Assistant Secretary of Defense with responsibility for Russia, Ukraine, and Eurasia. “If they have that sort of weaponry, we would like to have more transparency about what is there.”

Of course, as we noted last month, it is unclear what if anything spy planes can glean from the flights that the Russians (and the US) couldn’t already learn from spy satellites overhead, especially since anything of value would have been hidden well in advance of the pre-telegraphed flight.

To be sure, Pentagon officials cite the value of the treaty, chiefly the fact that imagery captured on the flights is shared among treaty states and also with the public, imposing a level of transparency that is rare in the murky world of counterintelligence operations. Tellingly, in March 2014, the US used Open Skies imagery to counter Russia’s claim that it wasn’t engaged in a military buildup along the Ukrainian border.

“If we didn’t have it, what would be there?” Lt. Gen. Ben Hodges, commanding general of the U.S. Army in Europe, told The Wall Street Journal. “I’d rather have it. Anything that allows for transparency is worthwhile. But you got to enforce it.”

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• Demise of Obamacare Repeal Shows How Far GOP Remains From Goal (BBG)
• Republican’s Latest Tax Plan Has Little Room to Maneuver (WSJ)
• Mexico in three-day countdown to search for earthquake survivors (Reuters)
• Oil near 26-month high as Turkey threatens to choke Kurdish exports (Reuters)
• North Korea bolsters defenses after flight by U.S. bombers as rhetoric escalates (Reuters)
• U.S. to Curb Russian Military Flights Over America (WSJ)
• U.S. Commerce Secretary Ross tells China to guarantee fair treatment for U.S. firms (Reuters)
• Novogratz Says Bitcoin Is a Bubble, But You Should Own It (BBG)
• Citi Says Get Ready for an Oil Squeeze (BBG)
• Alibaba takes control of logistics business, pledges $15 billion to expand network (Reuters)
• This Is Chaos’: Sweltering Puerto Rico on Day 6 Without Power (BBG)
• Nestlé Cedes Ground to Loeb but Won’t Budge on L’Oreal (WSJ)
• Western Digital to seek injunction to block Toshiba’s $18 billion chip unit sale (Reuters)
• Citi Is Bringing Back One of the Most Infamous Bets of the Credit Crisis (BBG)
• Nafta Negotiators Turn to Thorny Issue Just as Ministers Arrive (BBG)
• U.S. companies urge EU to refrain from unilateral moves on Web tax (Reuters)
• BHP, world’s largest miner, says 2017 is ‘tipping point’ for electric cars (Reuters)
• Ivanka Trump’s China Business Ties Are More Secret Than Ever (BBG)
• The Oil Ghost Towns of Texas (BBG)
• Brazil Lets In Big Oil Firms After Keeping Them Out for a Decade (WSJ)
• Banks Lobbying to Stem MiFID’s Spread Spark a U.S. Client Revolt (BBG)
• Big Investors Want Directors to Stop Sitting On So Many Boards (WSJ)

Overnight Media Digest

WSJ

– The chairman of the Securities and Exchange Commission, Jay Clayton, is expected to say on Tuesday that his agency may have mishandled a breach of its system for disclosing market-moving news and promise to intensify how it defends itself against hackers. on.wsj.com/2xxjxhL

– Senate Republicans’ latest effort to repeal large parts of the Affordable Care Act this year suffered a likely death blow on Monday, when Senator Susan Collins’ declared opposition left it without enough votes to pass. on.wsj.com/2fM6TDV

– General Electric Co agreed to sell its industrial-solutions business to Switzerland’s ABB Ltd for $2.6 billion, a sign that GE’s new chief is moving ahead with efforts to streamline the industrial company. on.wsj.com/2wOkpBi

– U.S. Defense Secretary Jim Mattis arrived in India on Monday on a trip to reinforce a budding U.S.-India defense partnership and to look for ways to work with India to expand ties in Afghanistan and counter Chinese influence in the region. on.wsj.com/2whnype

– Target Corp said it is raising its minimum wage to $11 an hour starting next month and to $15 an hour within three years, as the retailer competes to fill low-wage jobs in a tighter labor market. on.wsj.com/2hq5k1Z

– China is considering relaxing rules requiring foreign auto makers to have a local partner, according to people with knowledge of the situation. on.wsj.com/2fnhdlj

 

FT

The European Union rejected British Prime Minister Theresa May’s demand for fast-tracked talks on a Brexit transition, in the fourth round of discussion in Brussels, with the EU’s Brexit chief negotiator Michel Barnier saying his mandate excluded discussing a transition until “sufficient progress” had been made on citizen rights, Ireland and a financial settlement.

Britain’s opposition Labour Party wants to nationalise private finance initiative contracts as part of plans to roll back private sector involvement in UK public services, John McDonnell, shadow chancellor, announced in a speech on Monday to his party’s annual conference.

Mark Johnson, the former global head of forex cash trading at HSBC Holdings Plc who is on trial in the United States on charges he schemed to front-run a $3.5 billion currency deal, “threw his client under a bus to make more and more money”, prosecutors argued on Monday.

U.S. ride-hailing company Lyft has been working on a plan to expand internationally and is eyeing cities including London, Toronto and Mexico City, according to a person familiar with the internal discussions, at a time its competitor Uber Technologies Inc fights to overturn a planned ban in London.

 

NYT

– Unilever on Monday announced plans to buy Carver Korea, an Asian skin care specialist, for 2.27 billion euros ($2.69 billion). nyti.ms/2xCgBSK

– China has largely blocked messaging app WhatsApp, the latest move by Beijing to step up surveillance ahead of a big Communist Party gathering next month. nyti.ms/2ypohVX

– Swiss engineering firm ABB Ltd said on Monday it would buy General Electric Co’s business that provides circuit breakers and other electrical equipment for industry for $2.6 billion. nyti.ms/2xHNeik

– Uber’s chief executive, Dara Khosrowshahi, apologized in an open letter on Monday for the company’s “mistakes,” after the transport authority for London said last week that it would not renew the ride-hailing service’s license to operate in the city. nyti.ms/2y4Zdan

– Exxon Mobil Corp announced a program on Monday to reduce emissions of methane, a powerful greenhouse gas, from its oil and natural gas production and pipeline operations across the United States. nyti.ms/2fmxJ4S

 

Canada

THE GLOBE AND MAIL

** Foreign Affairs Minister Chrystia Freeland has vowed in Parliament that Canada will defend its automotive, resource and dairy sectors from any U.S. assault at the NAFTA bargaining table that could cause job losses for Canadian workers. tgam.ca/2hwO4EE

** Alberta’s most promising shale prospect could yield billions of barrels of crude, a new study by the National Energy Board and Alberta’s Geological Survey says, a finding that points to a substantial resource beyond the province’s downtrodden oil sands industry. tgam.ca/2hvLheR

** Ottawa’s proposed tax changes for private corporations have created a rift in Canada’s legal community and are refueling a debate over whether lawyers are public servants, based on a professional oath, regardless of what type of law they practice. tgam.ca/2hwzf58

NATIONAL POST

** As Bombardier Inc braces for a preliminary ruling in a countervailing duty investigation that could see nearly 80 percent duties slapped on U.S.-bound C Series jets, the Montreal-based company is facing another — and potentially significant — threat to its transportation business. bit.ly/2hvcBda

** Alibaba Group Holding Ltd founder Jack Ma encouraged Canadian entrepreneurs to consider the possibilities presented by the Chinese market, rather than focusing on the difficulties as he made his pitch for why small businesses should sign on to the e-commerce platform. bit.ly/2hxfhqG

** Ontario’s environment ministry investigators probing the international Volkswagen emissions scandal accuse officials with the German automobile company of not fully cooperating in their investigation. bit.ly/2hxg0Iq

 

Britain

The European Union rejected British Prime Minister Theresa May’s demand for fast-tracked talks on a Brexit transition, in the fourth round of discussion in Brussels, with the EU’s Brexit chief negotiator Michel Barnier saying his mandate excluded discussing a transition until “sufficient progress” had been made on citizen rights, Ireland and a financial settlement.

Britain’s opposition Labour Party wants to nationalise private finance initiative contracts as part of plans to roll back private sector involvement in UK public services, John McDonnell, shadow chancellor, announced in a speech on Monday to his party’s annual conference.

Mark Johnson, the former global head of forex cash trading at HSBC Holdings Plc who is on trial in the United States on charges he schemed to front-run a $3.5 billion currency deal, “threw his client under a bus to make more and more money”, prosecutors argued on Monday.

U.S. ride-hailing company Lyft has been working on a plan to expand internationally and is eyeing cities including London, Toronto and Mexico City, according to a person familiar with the internal discussions, at a time its competitor Uber Technologies Inc fights to overturn a planned ban in London.

 

via http://ift.tt/2yF4tyT Tyler Durden