Frontrunning: January 30

  • Immigrants to Be in Spotlight at State of Union (WSJ)
  • Amazon, Berkshire, JPMorgan Link Up to Form New Health-Care Company (BBG)
  • Yellen Leaving Fed With Full Employment, Increased Focus on Labor Market (WSJ)
  • Market Euphoria May Turn to Despair If 10-Year Yield Jumps to 3% (BBG)
  • U.S. Names Russian Oligarchs, But Says It’s Not a Sanctions List (BBG)
  • World stocks sucked under by bond market breakout (Reuters)
  • House Panel Votes to Release GOP Memo on Russia Probe (WSJ)
  • Trump’s Push to Fire Mueller Heightens Political, Not Legal, Risk (BBG)
  • CIA expects Russia to target U.S. mid-term elections (Reuters)
  • Decade of Easy Cash Turns Bond Market Upside Down (WSJ)
  • HNA to Face $2.4 Billion Liquidity Crunch This Quarter (BBG)
  • U.S., Mexico explore placing armed U.S. air marshals on flights (Reuters)
  • Iranian opposition cleric accuses Khamenei of abuse of power (Reuters)
  • Forget Self-Driving Cars, Robot Delivery Vans Are Here (BBG)
  • Venezuelan Pirates Rule the Most Lawless Market on Earth (BBG)
  • Trump administration holds off on new Russia sanctions, despite law (Reuters)
  • Trump’s Agenda Faces Tough Fiscal Reality After State of the Union (BBG)
  • Pentagon Muzzles Afghanistan Watchdog as Situation Worsens (BBG)
  • Banker Bonuses Jumping While Traders Brace for Smaller Payouts (BBG)

 

Overnight Media Digest

WSJ

– The maker of Keurig coffee machines is taking over Dr Pepper Snapple Group Inc, a marriage that combines popular brands that have struggled with increased competition and shifting consumer tastes. on.wsj.com/2BEqwFW

– Revlon Inc Chief Executive Fabian Garcia brought in less than two years ago to help revive the iconic beauty giant—is leaving the company next month. on.wsj.com/2BE1LJT

– A number of regulators and elected officials on Monday rejected as overly expensive and unrealistic the idea of a “moonshot” effort by the government to build a nationwide, next-generation wireless network, floated in a leaked internal national security memo. on.wsj.com/2BC9bO3

– Exxon Mobil Corp said Monday it plans to spend $50 billion to expand its business in the U.S. in the next five years, investments that were “enhanced” by the U.S. tax overhaul. on.wsj.com/2BEaDzd

– JPMorgan Chase & Co elevated two executives to share the No. 2 post at the nation’s largest bank, the clearest step yet to designate a potential successor to Chairman and Chief Executive James Dimon. on.wsj.com/2BDwG9g

 

FT

– JPMorgan Chase & Co Chief Executive Jamie Dimon said on Monday he plans to continue in his current role “for approximately five more years”.

– FBI Deputy Director Andrew McCabe, criticized by President Donald Trump and other Republicans for alleged bias against him and in favor of his 2016 Democratic opponent Hillary Clinton, has stepped down, according to U.S. media reports.

– United States Trade Representative Robert Lighthizer said the pace of the NAFTA negotiations had to pick up speed and demanded progress before the next round in Mexico City in late February.

 

NYT

– Newspaper company Tronc Inc on Monday said it had named Jim Kirk, the former editor and publisher of The Chicago Sun-Times, as the editor in chief of The Los Angeles Times. nyti.ms/2nmIwk5

– The Chairman of the U.S. Federal Communications Commission, Ajit Pai, said he opposed the idea of the federal government taking control of developing 5G networks, as it could hurt the private sector and the economy. nyti.ms/2Gw4sRJ

– Keurig Green Mountain has struck a deal to buy Dr Pepper Snapple Group Inc for $18.7 billion and create a beverage company with brands such as Keurig’s single-serve coffee pods, Dr Pepper, 7Up and Snapple. nyti.ms/2BC7D6H

– Ken Chenault will be chairman and managing director of General Catalyst Partners, one of the most successful venture firms of the past two decades. nyti.ms/2DLIwju

 

Canada

THE GLOBE AND MAIL
** The provinces outside Quebec are expecting to save as much as C$3 billion ($2.43 billion) over five years after generic drug makers agreed to cut the prices of dozens of popular medications in exchange for a promise that no jurisdiction will move to a system of public tendering for its drugs. tgam.ca/2BCOyBm

** Ontario pension fund Ontario Municipal Employees Retirement System is pushing further into the rapidly expanding cryptocurrency business through the creation of an Ethereum-focused public company that is planning to raise C$50 million. tgam.ca/2BDlfyg

NATIONAL POST
** Canada’s content creators, unions and some of companies including BCE Inc, Rogers Communications Inc and Quebecor Inc filed an application on Monday asking the Canadian Radio-television and Telecommunications Commission to take action against pirated content. bit.ly/2BDq76J

** Canada’s cannabis company Aphria Inc agreed on Monday to pay around C$826 million for Nuuvera Inc. Nuuvera became a publicly traded entity only three weeks ago and has yet to secure a license from Health Canada to grow and sell cannabis in Canada. bit.ly/2BDIcBF

 

Britain

The Times

– Relx, the FTSE 100 former publishing house that has turned itself into an information group, is buying a California company that specialises in detecting fraud. bit.ly/2BC6b4d

The Guardian

– Theresa May will attempt to reset her relationship with China in a vital three-day trip this week, leading the largest-ever UK trade delegation, comprising 50 business leaders. bit.ly/2DNInjG

– An experimental shuttle bus service operated by Ford Motor Co has been approved by London’s transport authorities. bit.ly/2FshtKE

The Telegraph

– The Pensions Regulator has launched an investigation into whether it can use its anti-avoidance powers against the former directors of collapsed contractor Carillion Plc after the firm racked up a huge deficit while still paying dividends. bit.ly/2DJRFZU

– Engineering giant GKN Plc has warned that a proposed 7.4 billion pounds ($10.41 billion) takeover by corporate raiders Melrose Industries Plc could exacerbate its pensions deficit, prompting Melrose to hit back that it had offered to pump as much as 150 million pounds into the scheme. bit.ly/2DPhvjh

Sky News

– A diplomatic row has broken out between Britain and EU over the rule of law and when the final Brexit deal needs to be reached. bit.ly/2Fq1Ova

– David Beckham, one of England’s greatest footballers, will be one of the owners of Miami’s new team, which was confirmed at an event in the city on Monday. bit.ly/2GqjAjo

The Independent

-easyJet plc chief executive Johan Lundgren is taking a 34,000 pounds pay cut to reduce his salary to that of his predecessor Carolyn McCall, in a bid to show his “personal commitment” to equal pay for men and women. ind.pn/2DZtzOt

– UK fashion and clothes retailers have defended themselves after it emerged on Monday that they have yet to sign a deal renewing their commitment to factory safety in Bangladesh. ind.pn/2BDoaqJ

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Will the Lightning Network Help Fix Bitcoin’s Scale Problem? New at Reason

BitcoinIt’s been a big few months for bitcoin, and with increased media attention and monetary valuation comes enhanced scrutiny of the technology underlying the world’s first peer-to-peer digital currency. For years, an intense debate surrounding the perceived trade-offs between bitcoin’s daily usability as a medium of exchange and its core value proposition as a censorship-resistant currency has ravaged the development community.

Simply put, many believed that the properties that made bitcoin a great decentralizing tool also rendered bitcoin an expensive and slow medium of exchange. Yet some exciting new developments with an above-chain project called the “Lightning network” could put many of those old fears to rest. If successful, the Lightning network (or a Lightning-like solution) could help bitcoin to more closely resemble the gold-backed banknote systems of the “free banking” era. Andrea O’Sullivan explains more.

View this article.

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US Markets Slammed As Dollar, Bonds, & Healthcare Stocks Slump

After melting up into the close on Friday, US equities are tumbling (following China’s lead) as the Dollar and bond prices slump.

 

Following another ugly night in China…

 

 

The Dow is down over 250 points in the pre-open futures market…

 

UnitedHealth, CVS Health, Anthem, and Aetna among health care stocks tumbling following Amazon-Berkshire-JPMorgan announcement…

 

The health care supply chain space and drugmakers are slipping in pre-market trading along with insurers; ESRX -6.5%, CSV -5.5%, RAD -3.6%, WBA -3.5%, TEVA -5.6%, MYL -3.1%, ENDP -2.6%, VRX -2.5%, HZNP -2.2%, UNH -6.6%, CI -5.3%, CNC -5.2%, ANTM -5.1%, HUM -3.9%, AET -2.5%,

 

As the dollar sinks back from Trump rescue highs…

 

 

And bond yields are higher despite the stock weakness…

 

 

If the Dow holds these losses, this would be the first consecutive triple-digit drop since April 2017!

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Putin Responds To Kremlin List: “It’s An Unfriendly Act”

As reproted earlier, while the Trump administration refused to impose new sanctions on Russia – a move which we expect will be widely criticized today – the Treasury on Monday published a list of 210 names viewed as close to Putin’s government. It included the names of 96 “oligarchs” and 104 top government officials, as well as CEOs of state companies.

 

However, the list does not mean that the individuals will face sanctions or impose any restrictions on dealing with them – so no new sanctions were announced, to the relief of RUB and Russian assets which bounced in kneejerk response.

Still, Russia’s president was not happy, and shortly after the release, Putin weighed in on the so-called “Kremlin List”, saying it was an “unfriendly act” but that Russia would “refrain from retaliating to the US for now.” He also joked about his non-inclusion to a US list, noting that he was “offended” not to be part of it.

“The dogs bark, but the caravan moves on,” Putin said several hours after the report featuring the entire Russian government and scores of prominent Russian business people was issued.

The list of 210 people fails to mention the Russian leader – much to his “distress”, according to RT. “It’s a pity,” Putin said sarcastically in answer to a journalist’s question on how he feels about his absence.

However, the move is “certainly unfriendly” as it damages already deteriorating Russian-US relations, Putin added.

“What do they want? They must decide for themselves,” Putin said, referring to Washington’s policy. Russia is eager to build long-term relations which are “stable and based on international law,” the Russian leader added noting that “forces damaging Russia ties are attacking the US president.”

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Amazon, Berkshire And JP Morgan Form Healthcare Company

In a move that might explain why Amazon has been quietly acquiring pharmacy licenses, the e-commerce giant – along with Warren Buffett’s Berkshire Hathaway and JP Morgan Chase & Co. – announced in a press release Tuesday morning that they would partner to form a new health-care venture.

 

 

In their release, the companies said they are working toward building an independent company focused on technology solutions “that will provide [their] US employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.” They will pursue this end through an independent company that would be free from profit making and other constraints.

They cited the “ballooning costs of health care” as the inspiration for their decision.

Here’s more from the press release:

Tackling the enormous challenges of healthcare and harnessing its full benefits are among the greatest issues facing society today. By bringing together three of the world’s leading organizations into this new and innovative construct, the group hopes to draw on its combined capabilities and resources to take a fresh approach to these critical matters.

“The ballooning costs of healthcare act as a hungry tapeworm on the American economy. Our group does not come to this problem with answers. But we also do not accept it as inevitable. Rather, we share the belief that putting our collective resources behind the country’s best talent can, in time, check the rise in health costs while concurrently enhancing patient satisfaction and outcomes,” said Berkshire Hathaway Chairman and CEO, Warren Buffett.

The healthcare system is complex, and we enter into this challenge open-eyed about the degree of difficulty,” said Jeff Bezos, Amazon founder and CEO. “Hard as it might be, reducing healthcare’s burden on the economy while improving outcomes for employees and their families would be worth the effort. Success is going to require talented experts, a beginner’s mind, and a long-term orientation.”

“Our people want transparency, knowledge and control when it comes to managing their healthcare,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase. “The three of our companies have extraordinary resources, and our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans,” he added.

 

The longer-term management team, headquarters location and key operational details will be communicated in due course, the companies said. UnitedHealth and its managed-care peers ticked lower in premarket trading on the news.

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Global Markets A Sea Of Red As Dollar Selloff Resumes

The global selloff that started on Monday as traders were spooked by the double whammy of surging interest rates and fears about iPhone X demand, and resulting in the biggest drop in US stocks since September, accelerated overnight and as seen below world stocks and US equity futures are a sea of red this morning:

In an odd reversal, yesterday’s dollar bounce lost steam amid position rebalancing before Trump’s State of the Union address and the Fed’s two-day meeting. As Bloomberg observes, there was a “large reversal in USD from overnight highs through European session with month-end related selling having been expected at some point.”

 

The euro advanced alongside the yen, and the pound erased a drop. The yen advanced against all of its Group-of-10 peers as a stock selloff prompts risk aversion. Tokyo-based funds are selling the Aussie against the yen ahead of Trump’s speech Tuesday night, according to a trader who spoke to Bloomberg. “After last week’s large moves, currency markets are wary of this week’s  upcoming events but also of the implications for higher yields,” said Mansoor Mohi-uddin, head of currency strategy at NatWest Markets in Singapore. “The focus in G-10 currencies is whether higher yields cause stocks to weaken, thus supporting safe haven currencies.”  

Predictably, volatility across FX continues to rise, with EUR/USD driven back above 1.24, while GBP/USD rallies 100 pips to 1.41 after sliding below 1.40. Actually make that vol across all assets classes.

Treasury yield rose above 2.7% before slipping back, while European government bonds edged higher as traders digested growth data from the region. Rate moves were supported as rebalancing inflows widely flagged over last week, keeping the curve relatively unchanged; bunds initially rally after soft Saxony CPI reading, however other German regions reduce probability of large national German CPI miss. US TSYs tracked the dollar for much of the session, although they have since rebounded from session lows even as the BBDXY continues to decline.

 

Overnight the US bond selloff spread to Japan, where the benchmark 10-year bond yield briefly rose over 2bps above 0.10%, the highest since July 11, with yields up ~1bp across the curve at last check. Any sustained increase in the 10-year yield to 0.1% would test speculation the BOJ will offer to buy unlimited amount of bonds for fixed rates.

Meanwhile in equities, European stocks opened in the red and drifted lower, mirroring a particularly weak Asian equity session and the drop in U.S. index futures. The Stoxx Europe 600 Index drops 0.5%, declining for the fourth time in five days. Miners are among the biggest decliners as copper and gold prices fall, with banks also sliding. Index losses are tempered by a gain for Swatch after its earnings beat estimates, while Siemens Gamesa also advances after saying it’s on the right path to meet 2018 targets.

Asian markets also traded lower across the board as the selling in US equity futures and retreat from record highs gathered pace overnight. Australia’s ASX 200 (-0.9%) and Japan’s Nikkei 225 (-1.4%) were both negative with Australia led lower by weakness across commodity-related sectors, while Japanese participants digested earnings and a slew of data including a contraction in Household Spending, as well as higher Unemployment. Selling accelerated in late trade amid a slump in US equity futures, in which DJIA futures fell over 200 points after a breakdown of near-term support at 26,400. Hang Seng (-1.1%) and Shanghai Comp. (-1.0%) conformed to the losses after continued PBoC inaction which resulted to a daily net drain of CNY 240bln and amid reports that banks were ordered to curb overnight lending, while tech names and Apple suppliers in the region were also mostly downbeat after the tech giant was said to reduce Q1 iPhone X orders by 50% due to slower than expected sales

At the same time, a wariness is emerging in equity markets as surging rates on government bonds test appetite for stocks at elevated valuations. Investors are weighing whether stronger corporate earnings, a pick-up in economic growth and optimism over U.S. tax cuts can continue driving up prices in markets that recently touched their highest on record; as noted yesterday, Goldman Sachs predicted a correction is imminent, but said any such pullback would be a buying opportunity.

“An acceleration in the selloff of global bond markets appears to be starting to let some of the air out of the recent rally in global equity markets,” said Michael Hewson, chief market analyst at CMC Markets UK. “U.S. markets suffered their worst one day fall this year, though sharp falls in tech stocks also contributed.” Apple Inc. shares dropped as much as 2.6 percent amid renewed concerns about falling demand for the iPhone X.

Looking at today’s key event, expect Trump’s State of the Union address to borrow from Trump’s Davos appearance with respect to detailing the America First approach, Credit Agricole strategists including Valentin Marinov write in a note. Markets will be particularly sensitive to any hints of further trade barriers to protect domestic U.S. producers, probably with negative implications for the USD.

A quick look at the ongoing Brexit chaos, cable initially sold off on news that PM May will reject the EU’s proposed deal on the Brexit transition period and go into battle next week over freedom of movement and so-called “rule taking”, the Telegraph reported. Then, the Times said that May is facing a donors’ revolt and growing pressure to leave Downing Street as soon as the outline of a trade deal is negotiated with the European Union this autumn. Finally, BuzzFeed leaked the UK government’s unreleased Brexit analysis which reportedly showed that UK will be worse off in every scenario outside the EU.

Elsewhere, many metals pared Monday’s gain, though gold reversed a decline to trade higher. Bitcoin fluctuated around $11,000 and emerging-market stocks slumped. Both WTI and Brent crude futures traded lower amid the (early) resurgence in the USD with prices hovering around the USD 65bbl and USD 69bbl levels respectively with energy newsflow otherwise relatively light. In metals markets, gold trades lower amid the global risk environment and the yellow metal’s safe-haven status.

Bulletin Headline Summary from RanSquawk

  • European bourses are trading mostly lower (Eurostoxx 50 -0.3%), in-fitting with the global risk sentiment
  • Choppy trade for the USD as gains prove to be short-lived with EUR/USD and GBP/USD back above 1.2400 and
  • 1.4000 respectively
  • Looking ahead, highlights include German national CPIs and a slew of central bank speakers

Market Snapshot

  • S&P 500 futures down 0.3% to 2,844.50
  • STOXX Europe 600 down 0.3% to 398.53
  • MSCI Asia Pacific down 1.1% to 184.84
  • MSCI Asia Pacific ex Japan down 1.3% to 605.78
  • Nikkei down 1.4% to 23,291.97
  • Topix down 1.2% to 1,858.13
  • Hang Seng Index down 1.1% to 32,607.29
  • Shanghai Composite down 1% to 3,488.01
  • Sensex down 0.7% to 36,027.57
  • Australia S&P/ASX 200 down 0.9% to 6,022.80
  • Kospi down 1.2% to 2,567.74
  • German 10Y yield fell 1.9 bps to 0.675%
  • Euro down 0.02% to $1.2381
  • Italian 10Y yield rose 2.0 bps to 1.758%
  • Spanish 10Y yield fell 1.8 bps to 1.401%
  • Brent futures down 0.4% to $69.21/bbl
  • Gold spot up 0.3% to $1,343.98
  • U.S. Dollar Index down 0.1% to 89.20

Top Headline News

  • The U.S. identified 96 of Russia’s richest people as “oligarchs” and 104 top government figures in lists mandated under last year’s sanctions law, adding pressure over alleged Kremlin interference in the 2016 presidential vote
  • Struggling to find an approach to Brexit that can win the support of her divided cabinet, U.K. PM Theresa May is asking European officials and leaders to come up with ideas on what kind of future relationship might be on offer, according to three people familiar with the situation
  • The euro-area economy expanded 0.6% q/q in 4Q, matching the median economist forecast while economic confidence for the region fell to 114.7 from 115.3 in December
  • Mnuchin says U.S. debt limit suspension can be extended into February
  • Dubai’s Biggest Lender in Talks With Sberbank on Turkey Unit
  • Wynn Scrutiny Intensifies as Macau Regulators Voice Concerns
  • HNA Crisis Deepens as Group Is Said to Face Liquidity Crunch
  • Varian to Buy Sirtex for $1.3 Billion to Add Cancer Drugs
  • Trump Agenda Faces Tough Fiscal Reality After State of the Union
  • Blackstone in Talks Buy TRI Unit Stake For $17b: Reuters
  • Japan December retail sales 0.9% vs -0.4% est; y/y 3.6% vs 2.2% est
  • New Zealand December trade balance NZ$640m vs -NZ$125m estimate

Asian markets traded lower across the board as the selling in US equity futures and retreat from record highs gathered pace overnight. ASX 200 (-0.9%) and Nikkei 225 (-1.4%) were both negative with Australia led lower by weakness across commodity-related sectors, while Japanese participants digested earnings and a slew of data including a contraction in Household Spending, as well as higher Unemployment. Furthermore, selling then accelerated in late trade amid a slump in US equity futures, in which DJIA futures fell over 200 points after a breakdown of near-term support at 26,400. Hang Seng (-1.1%) and Shanghai Comp. (-1.0%) conformed to the losses after continued PBoC inaction which resulted to a daily net drain of CNY 240bln and amid reports that banks were ordered to curb overnight lending, while tech names and Apple suppliers in the region were also mostly downbeat after the tech giant was said to reduce Q1 iPhone X orders by 50% due to slower than expected sales. Finally, 10yr JGBs were lower as Japanese yields played catch up to their US counterparts in which the US 10yr yield rose above 2.7% to its highest since April 2014, while firmer demand for the 2yr JGB auction.

Top Asian News

  • China Stocks in Hong Kong Sink to Pare World’s Steepest Rally
  • PetroChina Says Profit May Triple Amid Cost Cuts, Higher Oil
  • Top Noble Group Shareholder Urges SGX Probe of Trader’s Actions
  • Apps to Screen Tenants Latest Chinese Startups Battleground
  • Asian Suppliers Fall on Report Apple Cut IPhone X Targets

European bourses are trading broadly lower (Eurostoxx 50 -0.3%), in-fitting with the global risk sentiment spurred from equity performance seen in US and Asia-Pac hours. The only index immune to losses this morning is the SMI (+0.3%) with the Swiss bourse supported by the luxury sector after a positive update from Swatch (+2.7%) and the latest Swiss watch exports which have also lifted Richemont (+1.8%) higher in sympathy. Elsewhere, IT names trade higher after chip makers such as Infineon (+0.8%) and STMicroelectronics (+0.5%) are granted some reprieve in the wake of yesterday’s news that Apple could curtail some of their production of the iPhone X. Additionally, material names lag their peers amid the price action seen in the metals complex. Finally, Telecom Italia (+2.8%) top the FSTE MIB after news that the Co. are to unveil their network spin-off proposal on February 7th.

Top European News

  • U.K. Mortgage Approvals at 3-Year Low as Housing Market Slows
  • Russian Traders Unfazed by U.S. Oligarch List as Bonds Rally
  • Top Norway Fund Manager Is Betting on Rigs for 200% Return

In currencies, the USD initially managed to maintain its recovery momentum after recovering above 89.500 on widespread gains vs its G10 rivals (Ex-JPY and CHF), before sentiment reversed and the USD was dragged into negative territory.

  • EUR/USD briefly retested overnight lows around 1.2337 on a weak inflation read from German state Saxony, but very mixed data from others ahead of heavyweight NRW, broad USD softness and progress in German coalition negotiations prompted a marked rebound towards 1.2400.
  • GBP/USD initially lost the 1.4000 handle with stops triggered on a break to 1.3980, but has recovered to trade around 1.4080 in choppy price action.
  • AUD/USD mid-range between 0.8040-0.8100 and undermined by ongoing weakness in metals/commodities, while
  • NZD/USD has retreated further towards 0.7300 despite decent NZ trade data as CFTC shorts continue to pare positions.
  • USD/CAD nudging higher again between 1.2330-1.2380 as some positive NAFTA discussions are offset by another downturn in oil prices.

Ahead, US President Trump’s State of the Union address kicks off a busy line up of risk events, with the FOMC concluding its 2-day meeting on the last trading day of January and NFP looming on Friday.

In commodities, both WTI and Brent crude futures traded lower amid the (early) resurgence in the USD with prices hovering around the USD 65bbl and USD 69bbl levels respectively with energy newsflow otherwise relatively light. In metals markets, gold trades lower amid the global risk environment and the yellow metal’s safe-haven status. Elsewhere, copper was pressured during Asia-Pac and fell below USD 3.20/lb amid broad declines across the complex and with sentiment spooked as the equity sell-off gathered pace. Additionally, zinc prices have shown losses in London after printing 11 year highs yesterday.

US Event Calendar

  • 9am: S&P CoreLogic CS 20-City NSA Index, prior 203.8; MoM SA, est. 0.6%, prior 0.7%; YoY NSA, est. 6.3%, prior 6.38%
  • 10am: Conf. Board Consumer Confidence, est. 123, prior 122.1;Present Situation, prior 156.6;Expectations, prior 99.1

 

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US Releases “Oligarch List” Identifying 210 Richest, Most Influential Russians

A day after President Donald Trump notified Congress that the sanctions bill it passed in August was sufficiently “serving as a deterrent”, and that no new sanctions would be taken against individuals fingered in the bill, the Treasury Department quietly released the – now effectively meaningless – “Oligarchs List”, to the relief of the Russian business and government elite.

Included in the list, which was published minutes before the midnight deadline, are 114 senior political figures, and 96 oligarchs, including Roman Abramovich – the owner of the Chelsea Football Club – Oleg Deripaska – purportedly a former client of Paul Manafort and Rick Gates and tech entrepreneur Yuriy Milner.

According to the Financial Times, the Kremlin responded by saying the list amounted to a roster of “enemies of the United States,” and had cast US-Russian relations into an “unprecedented situation.”

The Treasury Department was required to compile and publish a report on possible targets for US sanctions by a bill passed by Congress in August that was intended to make sure the Trump administration keeps pressure on the Kremlin over its military intervention in Ukraine.

After initially slipping following the publication of the list of names, Russian equities bounced back in early European trading as traders realized the list was less targeted than some had expected, or as some called it “much ado about nothing” and just a rehash of the Forbes richest Russians. By midday the Moex index of leading Russian shares was up 0.3%. The ruble climbed 0.1% to 56.25 to the dollar, bolstered by firming crude prices.   

The list was compiled based on “objective criteria drawn from publicly available sources,” Treasury said, including those with net worth of $1 billion or more for the oligarchs and high official position for the senior political figures.

“They just included everybody, all the big businessmen, all the major bureaucrats,” said Vladimir Tikhomirov, chief economist at BCS Financial Group, a Moscow brokerage.

Government officials listed ranged from Prime Minister Dmitry Medvedev and Energy Minister Alexander Novak to the heads of state companies and Kremlin representatives in Russia’s regions.

Read the whole report below:

 

370313106-2018-01-29-Treasury-Caatsa-241-Final by zerohedge on Scribd

 

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FBI Director Wray “Shocked To His Core” By FISA Memo, McCabe ‘Removed’ Next Day, More Heads To Roll: Report

FBI Director Christopher Wray was allegedly “shocked to his core” after viewing the four-page FISA memo Sunday night – hours before asking Deputy FBI Director Andrew McCabe to step down, according to journalist Sara Carter. 

a
FBI Director Christopher Wray

Hannity sat down once again with journalist Sara Carter, whose sources say McCabe may have instructed FBI agents to alter their “302” forms – the paperwork an agent files after interviewing someone: 

Carter: What we know tonight is that FBI Director Christopher Wray went Sunday and reviewed the four-page FISA memo. The very next day, Andrew McCabe was asked to resign. Remember Sean, he was planning on resigning in March – that already came out in December. This time they asked him to go right away. You’re not coming into the office. I’ve heard rep[orts he didn’t even come in for the morning meeting – that he didn’t show up.

Hannity: A source of mine told me tonight that when Wray read this, it shocked him to his core.

Sara Carter: Shocked him to his core, and not only that, the Inspector General’s report – I have been told tonight by a number of sources, there’s indicators right now that McCabe may have asked FBI agents to actually change their 302’s – those are their interviews with witnesses. So basically every time an FBI agent interviews a witness, they have to go back and file a report. 

Hannity: Changes? So that would be obstruction of justice? 

Carter: Exactly. This is something the Inspector General is investigating. If this is true and not alleged, McCabe will be fired. I heard they are considering firing him within the next few days if this turns out to be true

Carter said that McCabe “quitting” is just the beginning, and that more resignations will be coming.

As we reported yesterday, McCabe was “removed” from his post as deputy director, “leaving the bureau after months of conflict-of-interest complaints from Republicans including President Trump.” Several media outlets reported that McCabe is using his remaining vacation days to go on “terminal leave” and that his official retirement from the agency won’t happen until March, allowing him to collect the full pension.

And as we noted last week, FBI Director Wray threatened to resign after being pressured by AG Jeff Sessions.

Around the time of the reports of his impending retirement, McCabe had spent several marathon sessions answering questions from Congressional committees behind closed doors.

It was expected that McCabe would hang on until early March, when he would become eligible for his full pension. It’s unclear why he’s choosing to step down early.

McCabe’s accelerated resignation may a sign that Trump appointee Christopher Wray – who succeeded James Comey as FBI Director – is finally cleaning house. 

According to Axios, McCabe may be leaving in anticipation of the release of an inspector general’s report on how the FBI handled the Clinton email investigation.

 

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The State Of The Union Is… The Inevitable Conclusion Of Years Of Ignorance, Greed, & Neglect

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

Tonight we have the State of the Union. Donald Trump will be gloating from ear to ear, but he’ll be subdued – by his standards. Expect perhaps $1 or even $1.5 trillion in infrastructure spending to be announced, plus an immigration plan that gives Democrats much of what they want in exchange for some of the things Trump wants, as well as more on trade surpluses and deficits. The Democrats will attempt to turn it into a circus of sorts by bringing guests, and they will fail.

What America needs right now is dialogue, but it’s only moving further away from it. Anything that’s wrong with anything or anyone gets blamed on Trump. By half the population. That’s nice and easy and convenient, but it doesn’t lead anywhere.

This pic, even though it features a very dumb question, says a lot about where the country stands, and it’s not standing pretty. Everybody’s just busy confirming their own opinions 24/7, egged on by networks, newspapers and social media. It’s like Moses split the nation.

 

Watched the Trump speech in Davos last week.

He made all the points you would expect him to. No scandals, nothing anyone could blame him for. In fact, it’s true that the US economy is doing well, in Trump terms. They’re not my terms, because they laud stock markets that quit being actual markets the moment the Fed and it global brethren killed off price discovery. But in Trump terms a record S&P 500 is all you need to know, alongside low unemployment numbers, even if the latter have everything to do with underpaid shit jobs robbed of all benefits American workers once fought so hard for.

In Trump’s view, that’s a good thing. In mine, it’s a recipe for mayhem. I was watching CNN in the build-up to the speech, and Trump’s denial of the NYT report that he had intended to fire Special Counsel Robert Mueller was completely ignored. Like he never said it. At CNN, anonymous sources have -way- more credibility than the president. That’s a bit of a problem.

After the speech, all sorts of people were interviewed, and Joe Stiglitz of Nobel Memorial fame was one of them. He couldn’t muster anything better than that Trump is a bigot, a misogynist and a racist. That’s a terribly poor reaction to a speech like the one we saw and heard -which included not one word that would make any sane person think of these ‘topics’-, certainly from an economist.

*  *  *

The 1-year-old Donald Trump presidency has brought us a lot of new things, but none more significant than that Trump has been under investigation since day 1 (and even before that). This sets a dangerous precedent that will resound through US politics for a very long time to come, not least of all because today, one year into the presidency, none of the investigations has resulted in anything tangible, while they continue without a finish line in sight.

The problem with that is that if you can do it with one president, someone will do it with the next one and the next one after that as well. Which does great damage not to Trump, but to the entire US political system, and the Office of the President of the United States in particular. If the office cannot command sufficient respect on Capitol Hill to limit any such investigation to an absolute minimum, in deference to what it represents, why would anyone else, domestically or abroad, show such respect?

Obviously, some people may claim that the situation is unique, simply because it concerns Trump, but that argument doesn’t fly very far, because he was elected president, the culmination of a process that, given the powers endowed upon the office, should be close to sacred in the country. And if the very people (s)he must most closely work with, in the Senate and the House, are willing to subject a newly elected president to endless investigations without producing any results for a whole year, where and what are the limits?

It is at present of course all based on opaque accusations of the Trump campaign working with Russian intelligence to swing America’s election process in favor of the president. But to date, four different committees on Capitol Hill, plus Special Counsel Robert Mueller, have made nothing public that proves any such ‘collusion’. And Mueller’s investigation is not only unlimited in time, it’s also unlimited, in practical terms, in scope: whatever is deemed even possibly, perhaps, linked to collusion with Russia, goes.

*  *  *

The American empire was built, once it had acquired enough geopolitical, financial and military power, on invading countries and turning them into shithouses. It wasn’t an original idea, America wasn’t the first country to do it, but it’s certainly been no. 1 in applying the ‘tactic’ over the past 100 years and change. Which makes it curious that when its own elected president calls some countries shithouses, that is treated like the worst thing anybody could have said anytime in history. And racist too, allegedly.

The entire country was built on racism, and it’s still to his day almost exclusively run by white males. Much of the racism may be hidden by now, but it’s still very much there. Go look at Baltimore, Chicago, Milwaukee, and the long list of black kids killed by white cops. It’s not much use trying to claim that America is over its past. But Trump is singled out as a racist, though it’s unclear what would make him worse than others.

And on Martin Luther King Day, all Democrats and many Republicans fell over each other once again claiming they knew exactly what Dr. King stood for in his days, and what he would have said if he were alive today (the same they themselves say). They don’t have a clue. The only way to honor MLK is to assume he would have been lightyears ahead of you. To assume he would have condemned all US foreign as well as domestic policy, and the likes of Bill Clinton, both George Bushes, Trump, and even Obama, wouldn’t even have had a remote chance of becoming president.

*  *  *

Allegedly Trump never said “shithole countries”, but instead talked about “shithouse countries”. Which would explain why he could say he never used the language he was quoted as having used (“Why are we having all these people from shithole countries come here?”) That a private conversation with lawmakers held in the Oval Office was leaked again within no time will not only frustrate Trump to no end, it also paints a dangerous picture of the future of US politics.

What used to be the exclusive domain of police officers and TV series, the catchy line “anything you say can and will be used against you”, no longer applies only to suspected criminals, from here on in it should be read to American presidents too. Trump and his successors will no longer be able to discuss policy in the White House, they must assume everything they say will be in the press within hours if not minutes. That is dangerous.

But let’s dig some more. And ask ourselves what is worse, let alone more racist: turning nations into shithouses or calling them that after the fact. Half the planet was encouraged to speak out in indignation at the use of the term, but where were all those Americans when the bombs and drones were unleashed upon Syria, Libya, Iraq? Where were the media?

Trump singled out Haiti and El Salvador. Two completely different ‘cases’. But also too complete basket cases (another word for shithouse) , compared to their potential. Haiti was the first slave colony to liberate itself, under black rule. That was in 1804, and if you know what Americans’ view of slaves and black people in general was back then, you can imagine how the former no. 1 global sugar producer was treated. By France, the country that had ruled it, but also by America. And you want to claim Haiti is not a shithouse country today? Go to Port-au-Prince and ask people living in the poor part of town how they feel about that.

As for African countries, the Congo is always a good example. The richest nation on the planet when it comes to natural resources, and one of the poorest when it comes to living standards. Long governed by a regime under Belgium’s King Leopold, matched in cruelty only perhaps by Germany in WWII, the Congo is still maintained as a hellhole to this day. So American and European conglomerates can dig up the metals and minerals almost for free. Not a shithole, a hellhole.

No, Trump is not going to solve that, but he didn’t make it what it is either. Generations of Americans did that. Yeah, we understand why they don’t want it named the way Trump has.

Perhaps the best illustration of how convoluted the entire issue quickly became after Trump said shithouse, which then became shithole, is this LA Times article, which starts out with the headline that Americans with African roots ‘should’ all be insulted, but then rapidly devolves into something else altogether, that insults them a lot more: the history of American involvement in their countries. Slavery, occupation, warfare, plunder.

For Black Americans, Trump’s ‘Shithole’ Comment Was An Insult To Their Histories

Kimberly Atkins, the Washington bureau chief of the Boston Herald, recently did a DNA test “that pretty much confirmed my heritage is 100% the result of the slave trade,” she wrote in a private message on Twitter. “Eighty-seven percent from western coastal African countries and 13% European, all migrated by way of the American South.”

She traced part of her heritage to an ancestor who fought in the Union during the Civil War to guarantee his freedom and the abolition of the U.S. slave trade. “My ancestors did not come from shithole countries,” she tweeted. “They were neither tired nor poor. They were forcibly brought here to live in a shithole created for them.”

Trump’s singling out of Haiti was particularly frustrating for descendants from the Caribbean nation, coming as the nation mourned the eighth anniversary of an earthquake that killed hundreds of thousands of residents.

“Haiti is not unacquainted with racists or white supremacists. We defeated our share of them in 1804 when we became the world’s first black republic,” Haitian American author Edwidge Danticat wrote in a post on Facebook, expressing her frustration that Haitians’ mourning was being diverted by an insult from Trump.

Danticat’s father came to Brooklyn, N.Y., to drive a taxicab “sometimes sixteen hours a day, so that my three brothers (two teachers and an IT specialist) and I could have a better life,” Danticat wrote.

Danticat added: “We are also the country that the United States has invaded several times, preventing us from consistently ruling ourselves. If we are a poor country, then our poverty comes in part from pillage and plunder.”

Clint Smith, a writer and PhD candidate at Harvard University specializing in sociology and education, said that he hoped that at least the president’s remarks would prompt a fuller conversation about past U.S. and European involvement with the countries Trump mentioned — countries still troubled by the legacy of colonial rule and military interventions.

“You can’t understand the economic conditions in which Haiti exists now without understanding the centuries and centuries of direct imperialism and violence and economic exploitation that the country experienced after the Haitian revolution of 1804,” Smith said. “We can’t have a real conversation about what is happening, why Salvadorans are coming here, without discussing how the U.S. contributed to the civil unrest in that country.”

The larger conversation, Smith said, “is not often enough taking into account the way that U.S. policy directly contributed to the condition in which so many of these so-called shitholes are currently existing.”

The woman who says “My ancestors did not come from shithole countries” says it best. Before the slave traders came to ship their ancestors to Brazil and later America, their countries were not shithouses. But they did become just that after, and many if not most still are now.

From a less echo chamber-confined point of view, this little thingy is priceless:

 

That points to an aspect of all this that we can not ignore: the media. There has a been a profound shirt in that field, and it happened fast, it turned on a dime. The first signs were already there before the Trump presidency, but it’s all been going going gone out of the park since. Media organizations (for lack of a better term) like the New York Times, the Washington Post, MSNBC and CNN were anti-Trump from the get-go, but it was when they found out their attitude was commercially very interesting that they really went for it.

And in a way, that made sense; they all had big problems trying to adapt their business models to the internet age. Then they found that publishing one after another anti-Trump piece brought them tons of new subscribers and advertisement revenue. Also for their internet presence. One stone, two birds.

The problem is that all that revenue and readership comes from one half of America, and excludes the other half. You know beforehand that anything these firms publish about Trump will be biased, and not a little bit. Much of it is based on anonymous sources, not exactly a sign of solid journalism. But it sells. And they have a business to run. We get it.

For those outside of the echo chamber, however, they have become largely unreadable and unwatchable. It’s obvious by now that someone like me, who asks a few questions and doesn’t feel comfortable in an echo chamber, will almost of necessity be ‘accused’ of being a Trump supporter. Absolute nonsense, but that’s echo chambers for you. They’re deafening and they lead to brain damage in case of long term occupancy.

Perhaps even worse are social media, where untold numbers of people revel in the notion that many others think like them, and let that carry them away to ‘heights’ they would never have thought possible. In the case of Trump, many allow themselves to call him names -in writing- they never would have dared use before, but they see echoed back to them on Twitter and Facebook et al.

That their often insults of Trump in effect show their disrespect for America’s political system would never occur to them. It’s an us against them battle, and they feel greatly emboldened by the 24/7 presence of those that are like-minded. It’s entirely unclear where this is going in the future, but it should be obvious it won’t be anywhere pretty.

Neither Bob Mueller nor those 4 committees on Capitol Hill have presented anything of substance as of now, but it’s crystal clear that Donald Trump is not being considered innocent until proven guilty. Which not only goes straight against, and into the heart of, American values and principles of justice, it also doesn’t even begin to address the real problem.

The real problem, and it’s not new at all, is that both US political parties might as well be run by Tony Soprano. The presence inside party leadership of people like Steve Wynn is ridiculous, but so is that of John Podesta. That is undoubtedly blindingly obvious for a vast majority of Americans, but it’s not what they focus on. They focus on Trump instead, on the still contagious obsession with impeaching him, even though many understand that wouldn’t solve any of the underlying issues.

*  *  *

And then Trump gets to present great economic numbers tomorrow. The numbers are mostly fake, but they’re the same ones that the echo chamber media also use, so they’ll have to tackle him somewhere else. They’ll come up with something, don’t worry. Their audience will just wait to be fed the usual pre-chewed bite-size fare anyway.

America needs a dialogue. But all it has left is loud, echoing, deafening, monologues. And plenty of shithouse counties and cities and neighborhoods within its own borders as well. For which, too, it’s useless to blame Trump. He’s just the logical conclusion of years of blindness, ignorance, greed, stupidity and neglect. All of which, as long as everyone focuses on him, are guaranteed to continue.

Trump is not what’s wrong with America. Rather, what is wrong with America is what has given it Trump. Someone asked God for a sign and He said: here you are.

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The Return Of Sumptuary Laws? Dutch Cops To ‘Undress’ Youths Wearing “Clothes Deemed Too Expensive For Them”

If you thought America’s civil asset forfeiture laws were horrific, police in The Netherlands will literally take the short off your back…

 

The Independent reports that police in the Dutch city of Rotterdam have launched a new pilot program which will see them confiscating expensive clothing and jewellery from young people if they look too poor to own them.

Officers say the scheme will see them target younger men in designer clothes they seem unlikely to be able to afford legally – if it is not clear how the person paid for it, it will be confiscated.

The idea is to deter criminality by sending a signal that the men will not be able to hang onto their ill-gotten gains.

They are often young guests who consider themselves untouchable. We’re going to undress them on the street, “says Rotterdam police chief Frank Paauw.

As Climateer recently noted, this appears to be the return of ‘Sumptuary Laws

In ancient Greece: “A free-born woman may not be accompanied by more than one female slave, unless she is drunk; she may not leave the city during the night, unless she is planning to commit adultery; she may not wear gold jewelry or a garment with a purple border, unless she is a courtesan; and a husband may not wear a gold-studded ring or a cloak of Milesian fashion unless he is bent upon prostitution or adultery.

Agents are specially trained to eventually recognize the exclusive coats of suspects of criminal activities with a trained eye.

“We regularly take a Rolex from a suspect. Clothes rarely. And that is especially a status symbol for young people. Some young people now walk with jackets of 1800 euros. They do not have any income, so the question is how they get there “, says Paauw.

But, as The Independent reports, critics have attacked the idea saying it is a “slippery slope” towards racial profiling

City ombudsman Anne Mieke Zwaneveld told AD: “We realised that [they] do not want to create the appearance that there is ethnic profiling but the chances of this happening are very large.” 

She said it would be very legally difficult to prove officers were justified in taking people’s coats in the middle of the street:

“It is not forbidden to walk around in the street. In addition, it is often unclear how such a piece of clothing is paid and how old it is.

Jair Schalkwijk,a spokesman for a national anti-profiling organisation Control Alt Delete, believes the policy is against a previous promise by police not to target people who look like “typical criminals”.

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