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This is your ‘market’ America…
The rejuvenated Inverse VIX ETF, XIV, which will drip lower to its termination value of $4.22 on Feb 20th, continues to drive US equity markets…
(XIV upper pane, Dow lower pane)
Not the economy. Not earnings. Not taxes. Not The Fed. Not Trump. Not infrastructure.
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One week ago we reported that China’s largest conglomerate, HNA Group, is on the verge of bankruptcy with the company facing a 15 billion yuan liquidity shortfall in the coming weeks, with the amount ballooning exponential over the next few months. And, as we noted then, “the scale of the funding gap will likely deepen concerns about the viability of the group, which owns stakes in everything from Deutsche Bank AG to Hilton Worldwide Holdings, as it faces scrutiny worldwide from regulators and investors.“
But more importantly, we said that any fears about HNA’s viability “could unleash another liquidation panic in Deutsche Bank shares if other shareholders become convinced that HNA is looking to sell its $4 billion worth of DB shares (roughly a 10% stake) and try to frontrun it.“
Today, this worst case scenario for China’s biggest and most indebted conglomerate, appears to be now in play because according to a report in Chinese industry website Wangdaizhijia, HNA Group missed some payment on a peer-to-peer product sold on Phoenix Finance, an investment and wealth management platform of Phoenix TV. Here is the google translated summary of the Chinese news report:
Since January this year, the overdue events related to Hainan Airlines have been aroused and heated discussions. Many mutual platforms have been “lying guns.” HNA cash flow is tight, related items can not be cashed on time, directly “tired” to Phoenix Financial. Some investors broke the net credit house broke the news that Phoenix Financial Products Fung Ying Ying – HHSY overdue.
Whether or not this is the beginning of the end for HNA is unclear: as we reported last week, there is a probability that the local Chinese government will bail the company out: the Hainan provincial government, which called an impromptu meeting with the company’s creditors, expressed support for HNA, according to Bloomberg sources, although should China proceed with a bailout of this magnitude it would demonstrate to the world that Xi Jinping’s reform agenda which includes deleveraging and allowing insolvent corporations to fail, has been nothing but smoke and mirrors.
The bigger problem is what it means for HNA’s various holdings, among which Deutsche Bank of which the Chinese conglomerate is the largest holder with its 9.9% stake.
And as of this morning, it means nothing good, because in addition to a sellside analyst downgrade of Deutsche Bank, traders are increasingly worried that HNA will be forced to punt its DB share holdings to delay or avoid an imminent bankruptcy, a sale which could send the price reeling, just as we predicted last week when we warned that HNA troubled could prompt a frontrunning of its DB firesale.
And sure enough, DB stock is tumbling, down 4.1% on Wednesday, sliding to the lowest level since November 2016, and dragging the European Stoxx 600 Bank index.
Of course an HNA dump would be contrary to what DB CEO John Cryan said just a few days ago when he assured DB shareholders that he sees no changes in HNA intentions during the DB earnings call. Then again, it wouldn’t be the first time Cryan hasn’t told the whole truth.
As for DB’s downgrade, it also took place today when Mainfirst cut the bank to underperform from neutral, lowering its PT to EU12 from EU15, on “doubts Germany’s largest bank can keep pace with competitors in 2018.“
As Bloomberg notes, analyst Daniel Regli cites “damaged franchise as well as a need for substantial restructuring, including the closure of several businesses” and adds that “based on a continued below average ROTE of c.5% in 2018-2019 and a 2019E PE of ~9x, we think there are better opportunities among banks.”
He concludes that “targeted disposals aren’t coming through as expected.”
A far bigger problem for the bank’s shareholders, however, is if DB itself become a targeted disposal for its biggest Chinese shareholder, the frontrunning of which could send DB stock to levels not seen since the bank’s existential fight for survival in the fall of 2016.
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Making popular things illegal rarely diminishes their use.
John Stossel writes:
Ross Ulbricht was a quiet nerd—an Eagle Scout who never cursed.
Then he became a libertarian, and he decided, “I want to use economic theory as a means to abolish the use of coercion.”
By coercion, Ulbricht meant force.
He viewed laws against drugs as coercion—government force that stops people from living the way they want.
So he created a website called Silk Road. Silk Road let people buy and sell contraband—mostly drugs—using bitcoin. The site became successful quickly. It soon carried a billion dollars in transactions.
Because Silk Road didn’t use dollars, it was also private, said Ulbricht. “The State is unable to get its thieving murderous mitts on it.”
But he was wrong. Ulbricht slipped up, using his real name in an internet forum, and the FBI found him and jailed him.
A jury, looking at his former website, convicted him of things like “conspiracy to traffic narcotics.” He was clearly guilty of that.
But then Judge Katherine Forrest said that because “Silk Road was a black market of unprecedented scope” she would sentence Ulbricht to “double life plus 40 years, without parole.”
That’s a longer sentence than many murderers get.
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Have we finally seen the last continuing resolution?
While nothing is finished until it’s finished, Axios reports that Senate leaders are nearing an agreement on a two-year budget deal – what would be the first full budget of the Trump era – that would also include a provision to raise the debt ceiling.
According to Axios, Senate Democrats and Republicans are increasingly likely that a debt-ceiling increase will be attached to a budget deal that Senate negotiators from both sides hope to announce as soon as today.
The upshot of this is that DACA will now likely be dealt with on its own terms – and won’t be used as a bargaining chip in a government shutdown showdown.
However, such a deal could infuriate President Donald Trump, who has demanded that any deal on DACA include changes to legal immigration laws to limit chain migration, as well as funding for border security and his signature policy, the southern border wall.
Yesterday, Trump threatened Democratic Senate leader Chuck Schumer by telling a group of reporters “I’d love to see a shutdown” if Congress doesn’t meet his administration’s demands for curbs on legal and illegal immigration.
Here’s Axios:
The two-year deal I expect McConnell and Schumer to strike: busting the budget caps on defense and domestic spending, raising the debt limit, plus funding for disaster relief and funding for community health centers.
Why it matters: That would be a pretty good deal for President Trump. Sure, the fiscal conservatives will hate it, but Trump has never been one of them.
The deal would expose the gap between Schumer and House Democratic Leader Nancy Pelosi: She wanted to hitch the immigration deal to the spending fight, while Schumer appears OK with allowing it to be separate.
According to the Wall Street Journal, the agreement is expected to increase military spending by $80 billion a year and nondefense spending by $63 billion a year – though these numbers are subject to change.
“I’m optimistic that very soon we’ll be able to reach an agreement,” Mr. McConnell told WSJ.
And Schumer added that, while some issues were still being worked out, he and McConnell were “making real progress on a spending bill that would increase the caps for both the military and middle-class priorities on the domestic side.”
As WSJ explains, many Democrats have come around to the idea that they don’t have as much leverage as they once thought, and that holding federal spending hostage until their DACA demands are met simply isn’t practical. Many lawmakers said Tuesday that they were ready to advance a two-year budget deal that would allow lawmakers to write and pass a long-term spending bill, which they had initially hoped to pass in December. Instead, the interlocking fight over immigration tied up the negotiations, forcing lawmakers to pass a series of short-term spending measures.
The capitulation on immigration is particularly helpful for red-state Democrats who are seeking reelection later this year, who believe it will bolster their chances of victory in November. Though this has understandably angered immigration advocates.
Meanwhile in the House, lawmakers last night passed a short-term measure that would fund the government past a midnight Thursday deadline through March 23 – but that bill has little chance of passing the Senate because Democrats oppose it,as the Washington Post points out.
Per WaPo, $80 billion in disaster relief funding would also be included as part of the bill. That provision could help win support from lawmakers representing affected areas in California, Florida and Texas but further repel conservatives concerned about mounting federal spending.
Still, such a deal will likely face stiff opposition from conservatives.
“This is a bad, bad, bad, bad – you could say ‘bad’ a hundred times – deal,” said Rep. Jim Jordan (R-Ohio), a co-founder of the House Freedom Caucus.
“When you put it all together, a quarter-of-a-trillion-dollar increase in discretionary spending – not what we’re supposed to be doing.”
Mark Meadows, the leader of the Freedom Caucus, said such a deal would get “zero support.”
But with two days until the Friday-morning deadline, there isn’t another deal in the works that has the level of bipartisan support that this deal has.
The question now is whether the president will back out his allies in the Freedom caucus and work to kill the bill.
Following the deal reports, the debt-ceiling spread has notably compressed – a sign that T-bill traders are taking the optimistic reports seriously.
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For those hoping that the “Powell Put” is struck at least as high as Yellen’s, The New York Fed’s Bill Dudley may have just dashed those hopes a little…
As a reminder,on her way out, former Federal Reserve Chair Janet Yellen told CBS that the market’s valuations were high but said she wasn’t sure if markets were currently in a bubble.
“Well, I don’t want to say too high. But I do want to say high. Price/earnings ratios are near the high end of their historical ranges,” Yellen said.
“Now, is that a bubble or is too high? And there it’s very hard to tell. But it is a source of some concern that asset valuations are so high.”
Earlier today, Dallas Federal Reserve Bank President Robert Kaplan joined a chorus of central bank officials who have called the stock market overvalued at recent levels.
Kaplan said the recent selloff is “basically a market event and these things can be healthy.”
St. Louis Fed President James Bullard said that the recent market selloff was predictable because of the elevated valuation of tech stocks.
“This is the most predicted selloff of all time because the markets have been up so much and they have had so many days in a row without meaningful down days,” Bullard said, according to the Financial Review.
“So it is probably not surprising that something that has gone up 40% like the S&P tech sector would at some point have a selloff. Before there was a selloff, people said repeatedly some day this will sell off.”
The fact that there was a selloff wasn’t concerning to Bullard, but he admitted that the speed of the decline was probably aided by the role algorithmic tradings plays in the market.
“What is more interesting is it has been very fast, it’s been possibly aided and abetted by technical trading — algorithmic trading. I’d be interested to see an analysis and see what role that played,” Bullard said.
And then, the New York Fed’s Bill Dudley says an equity rout like the one that occurred in recent days “has virtually no consequence for the economic outlook.”
Adding that, if it continued to go down sharply, “that would affect my view,” he says at event in New York, but “this wasn’t that big of a bump in the stock market” and ” is not a big story for central bankers yet.”
“It’s still up sharply from where it was a year ago”
In other words, it’s going to take more than a 13% plunge in 5 days to stir Jay Powell’s Plunge Protection Team into action…
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Some observations on recent market volatility, from Deitsche Bank’s credit strategist, Jim Reid.
If you’ve only been working in markets for a handful of years then treat the last 36 hours as a mild dress rehearsal for what can happen when a bear market hits. Yesterday actually felt relatively orderly though in spite of a 1,000 point range on the DOW and a 28 point range in the VIX. Orderly unless you were at the epicentre of things and an equity volatility trader. I’m teaching 2 and a half year old Maisie how to count to five at the moment and the VIX yesterday felt like watching her do that as when I ask her to count for me she says something likes this “….four, two, three, one, five”. It closed at 37.32 the previous session before climbing to 50.30 around noon London time, then collapsing to 22.42 just after the US opened 2.5-3 hours later, a spike back to 46.34 occurred less than an hour later and then after oscillating between 30-40 for the rest of the day we closed at 29.98 (-19.7%). The 50.30 print was the highest since early March 2009 when equity markets hit rock bottom. Remarkable really.
Yesterday afternoon Craig and I put a note out showing what happens 1 week, 1 month and 3 months after the largest 10 VIX spikes in history. Basically the VIX usually rallies over all subsequent periods but equities tend to be strong the week after but on average fall 3 months later. The reverse is true for bonds. (See end of this post for details.)
What might make this VIX spike slightly different to previous ones is that although it had a macro catalyst (higher inflation and yields) the scale of the wounds are mostly self inflicted within the equity derivatives product as the scale of the moves have been caused by low volatility ETPs/ETFs being liquidated, suspended and/ or suffering major losses
In other words all the other previous major spikes have been more to do with a big macro event or a crisis. The higher average earnings print could turn 2018 into a year of higher inflation and a big macro shift but we’re certainly not in crisis territory yet.
* **
What happens after large VIX spikes
Monday’s 20 point jump in the VIX was the largest ever. In fact it is nearly 4 points more than the next biggest single day spike back in October 2008. So by magnitude this spike in volatility is somewhat unprecedented. For the purpose of this short note we have taken a look at how the VIX, S&P 500, Treasuries and Gold have responded in the 1 week, 1 month and 3 months following some of the largest spikes in the VIX ever recorded (excluding the moves this week).
Figure 1 show VIX moves over periods of 1 week, 1 month and 3 months following the 10 largest jumps in the VIX (excluding this week’s moves). As you can see, in essentially 9 out of the 10 previous cases, the VIX has subsequently fallen. Indeed the average decline in the VIX following a spike is 8.5, 9.2 and 19.1 points over 1 week, 1 month and 3 months respectively. Using the median, declines extend to 11.2, 12.7 and 20.4 points. Unsurprisingly a lot of these moves are bunched around the GFC years when large spikes were a lot more common but nonetheless with the exception of September 2008, these jumps to elevated levels were not sustained. Additionally, the VIX actually corrected to the point where by it was lower than the starting point (i.e. one day prior to the spike) in 4 out of the 10 occasions after just 1 week and 8 occasions after 3 months.
In terms of how assets have performed, figures 2 and 3 show the median VIX, S&P 500, 10y Treasury and Gold moves in the same time periods following these VIX spikes.
There is a fairly consistent theme coming through these charts. The initial short term reaction has been for markets to actually display a more risk-on tone with the median S&P 500 return being 3.9% in the week after (there’s only been two instances where the S&P 500 actually fell) while 10y Treasury yields have jumped 15bps and Gold has fallen a more modest 0.5%. However over the 1 month and 3 month time horizons, these moves have reversed. The median S&P 500 return in the 1 month and 3 months following a huge vol spike is -0.4% and -2.6% respectively. 10y Treasury yields have fallen 11bps and 42bps while the price of Gold has risen 7.5% and 3.5%.
Just for additional information, we’ve put together a scattergraph of all >5 point one-day VIX moves versus the subsequent VIX, S&P 500 and 10y Treasury moves to catch a larger sample size. In conclusion, VIX spikes do tend to be corrected over all periods out to the next 3 months but historically there is evidence that equities and bond yields have fallen over the subsequent 3 months.
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Teen sexting stories are filled with kids who had no clue they were breaking the law when they swapped inappropriate photos of their own bodies—and with parents who didn’t realize they couldn’t trust the school or the cops to be reasonable. Carl was determined not to be one of those parents.
Last November, Carl received a call from Ms. Martin, an assistant principal at the middle school attended by his two sons, ages 13 and 12. Miller said the older son, Tommy, had shared a sexually inappropriate Snapchat image with some other students at the school. (I’m using pseudonyms for the people in this story and have not contacted the school, out of concern that Carl’s family could face retaliation for coming forward.)
Several days later, after hiring a lawyer, Carl spoke with Martin again. He told her, in no uncertain terms, “I’ve instructed both of my boys that they are not to answer any more questions from the administration or the police at school in regards to this matter without parental or legal representation.”
The statement caught the assistant principal off guard.
“She started stuttering and stammering a little bit about how she wasn’t a part of the police and that they didn’t need to speak to attorneys,” Carl told me. “That that’s not their job, and this or that or the other thing.”
Carl was wise to ignore this assertion. The assistant principal isn’t a cop, but the school—a public institution in the Midwest—did indeed employ a school resource officer: a law enforcement agent who works in the school but retains the powers of a typical cop. And in fact, Officer Jordan had warned Carl that his son might have committed felony distribution of child pornography. (Because of Carl’s concerns about retaliation, I did not speak with anyone at the school. But Carl shared documentation with me in order to confirm his story, including emails between him and his lawyer on the days in question.)
“How can you call these kids in and get them to implicate themselves and each other?” Carl told me. “We felt like basically the officer and the assistant principal are using their positions of power over the kids.”
On the day Carl and his wife first learned their eighth-grade son Tommy had been questioned by the school’s administration, they sat down with their son and asked him whether it was true that he had an inappropriate picture of a female classmate on his phone. Tommy denied having the image, and let them look at his Snapchat folder to prove it wasn’t there.
The next day, Tommy came home from school distraught. Eventually, he admitted to his parents that he had been dishonest with them: He did have the picture, and several others like it, but had panicked and wiped his phone as word began to spread at school that some boys were circulating naughty pictures of girls. The matter had reached the school’s attention after a parent of one of Tommy’s friends had discovered a picture of the girl on his friend’s phone and reported it to the administration.
Tommy got the picture from a boy who attends a different middle school; this kid, according to Carl, was sent the picture either by the girl herself or by her vengeful friend. But Tommy’s middle school identified Tommy as a distributor, since several boys had received the picture from him. Carl claims that Tommy hadn’t actually sent it. Tommy’s younger brother, a sixth grader, had unlocked Tommy’s phone while he was out of the room, granting the friends access to the image so they could send it to themselves. (As an older brother whose younger brother would have taken any opportunity to trade my privacy for social approval while we were growing up, I sympathize with Tommy’s situation.)
Tommy was no longer in possession of his phone: Officer Jordan had confiscated it, along with 30 others.
“One of my first questions when I found out that they’d taken his phone was, is that even legal?” Carl told me. “Are they even allowed to do that?”
It is legal for school officials to confiscate students’ phones if they are disrupting class or violating school policy. But school officials often need to have kids or parents sign waivers in order to let police search the phones, and they can’t compel students to unlock the devices.
Many people don’t understand that school officials aren’t necessarily doing what’s best for a kid, and that they are likely to bring in law enforcement if they suspect a crime has been committed. And sharing sexually charged images of underage minors—even consensually, even if the people doing the sharing are themselves minors—is a felony.
Placed in such situations, students and parents often think the best thing to do is cooperate. Austin Yabandith, the 17-year-old whose ordeal I profiled at length for Reason, agreed to let an school resource officer access his phone because the officer said he would delete the inappropriate pictures and that would be that.
“They said that all they were going to do was delete the photos from the phone so I blindly signed a paper allowing them to access it,” Austin told me.
But police officers don’t have to tell the truth, and Austin was later charged with sexual exploitation, sexual assault, and possession of child pornography—all for having a consensually exchanged image of his 15-year-old girlfriend.
Tommy could have faced similar charges. The day after learning that the school had taken Tommy’s phone, Carl went to the school to meet with Officer Jordan, who confirmed that the situation was serious.
“Basically what I got out of the conversation right away was he says, ‘Your son has committed felony child pornography, and you can either sign this consent form so that I can get in his phone, or I’ll get a warrant,'” Carl told me.
The officer said that he thought charges were unlikely in this case but would make no promises. Carl walked out of the meeting and hired an attorney.
In subsequent conversations, Ms. Martin, the assistant principal, maintained that Carl had escalated matters unnecessarily. Officer Jordan called Carl to ask him to sign the consent form to search the phone; Carl replied that he would only sign it if his attorney recommended such action.
Within a few days, Carl’s attorney learned that no one would be facing charges and that the students whose phones were taken would be getting them back. The attorney also made a revelatory discovery—the prosecutor told him that the picture in question wasn’t explicit enough to fall into the category of child pornography. The girl was topless, but she was covering her breasts with her hands.
That detail is reminiscent of a teen sexting case involving a 14-year-old girl from Iowa, who was accused by a juvenile court of sexually exploiting a minor via inappropriate photos. The minor was the girl herself, and the photos were, in her parents’ words, “less ‘racy’ than photographs they see in fashion magazines and on television every day.”
It has now been several months since Carl learned there would be no charges. Neither the police nor the school has taken any punitive action against Tommy, so the matter seems resolved. Carl eventually told his coworkers about the ordeal; an intern in his office said he knew a young man who had been arrested for sexting. The young man was Austin, and Chad got in touch with me after reading my article about the case.
Everything seems to have worked out fine for Tommy except for one thing: Officer Jordan kept his phone, for reasons that remain a mystery.
“We don’t care about the phone,” Carl told me, noting that he had already purchased his son a new phone for Christmas. “Part of me wonders if they feel like, as long as the phone is not out there, even if the picture is on the phone, it’s not getting shared.”
I told Carl that if I were him, I’d feel more comfortable about the phone if I could watch Officer Jordan destroy it with a power drill.
Reason is sponsoring a panel at South By Southwest 2018 on the wrongful criminalization of teen sexting. The event is on March 8 in Austin, Texas. It will feature the journalist Emily Yoffe, the sociologist Emily Horowitz, Austin’s mother Amy Lawrence, and me.
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New text messages between FBI lovers Peter Strzok and Lisa Page have now been made public, and, as The Duran’s Alex Christoforou notes, the big reveal is that then-POTUS Barack Obama appears to be in the loop, on the whole ‘destroy Trump’ insurance plan hatched by upper management at the FBI.
The messages include an exchange about preparing talking points for then-FBI Director James Comey to give to President Obama, who wanted “to know everything we’re doing.”
Page wrote to Strzok on Sept. 2, 2016 about prepping Comey because “potus wants to know everything we’re doing.” Senate investigators told Fox News this text raises questions about Obama’s personal involvement in the Clinton email investigation.
In texts previously revealed, Strzok and Page have shown their disdain for Republicans in general, as well as Trump, calling him a “f—ing idiot,” among other insults.
Among the newly disclosed texts, Strzok also calls Virginians who voted against then-FBI Deputy Director Andrew McCabe’s wife for a state Senate seat “ignorant hillbillys.” (sic)
That text came from Strzok to Page on Nov. 4, 2015, the day after Jill McCabe lost a hotly contested Virginia state Senate election. Strzok said of the result, “Disappointing, but look at the district map. Loudon is being gentrified, but it’s still largely ignorant hillbilliys. Good for her for running, but curious if she’s energized or never again.”
Sen. Ron Johnson, R-Wis., along with majority staff from the Senate Homeland Security and Governmental Affairs Committee, is releasing the texts, along with a report titled, “The Clinton Email Scandal and the FBI’s Investigation of it.”
The newly uncovered texts reveal a bit more about the timing of the discovery of “hundreds of thousands” of emails on former congressman Anthony Weiner’s laptop, ultimately leading to Comey’s infamous letter to Congress just days before the 2016 presidential election.
On Sept. 28, 2016 Strzok wrote to Page, “Got called up to Andy’s [McCabe] earlier.. hundreds of thousands of emails turned over by Weiner’s atty to sdny [Southern District of New York], includes a ton of material from spouse [Huma Abedin]. Sending team up tomorrow to review… this will never end.” Senate investigators told Fox News this text message raises questions about when FBI officials learned of emails relevant to the Hillary Clinton email investigation on the laptop belonging to Weiner, the husband to Clinton aide Huma Abedin.
It was a full month later, on Oct. 28, 2016 when Comey informed Congress that, “Due to recent developments,” the FBI was reopening its Clinton email investigation.
“In connection with an unrelated case, the FBI has learned of the existence of emails that appear to be pertinent to the investigation. I am writing to inform you that the investigative team briefed me on this yesterday…” Comey said at the time.
The question becomes why Comey was only informed by his investigative team on Oct. 27, if the Clinton emails on Weiner’s laptop were discovered by Sept. 28, at the latest.
The latest batch of text messages between Strzok and Page show more examples of the Deep State opposition to Donald Trump, including a text sent on Election Day 2016 where Page wrote…
“OMG THIS IS F***ING TERRIFYING.”
Strzok replied to Page with a text saying…“Omg, I am so depressed.” Later that month, on November 13, 2016 Page wrote…
“I bought all the president’s men. Figure I need to brush up on watergate.”
The next day on November 14, 2016, Page wrote…
“God, being here makes me angry. Lots of high fallutin’ national security talk. Meanwhile we have OUR task ahead of us.”
According to Fox News, Page’s meaning here is unclear, but Senate investigators say, coupled with Strzok’s August 15 text about an “insurance policy,” further investigation is warranted to find out what actions the two may have taken.
The last text is from Page to Strzok, and comes on June 23, 2017 when she wrote, “Please don’t ever text me again.”
It’s unclear whether she was mad at her friend, or if she suddenly became aware that they, and their thousands of texts, had been discovered.
Of course, none of this is surprising, but we are sure the new Democrat memo will clear up any misunderstandings.
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Overnight Media Digest
WSJ
– Steve Wynn, the billionaire casino visionary considered to be the architect of modern Las Vegas, resigned Tuesday as chairman and chief executive of Wynn Resorts Ltd in the wake of sexual-misconduct allegations detailed in a Wall Street Journal investigation last month. on.wsj.com/2BZkK1Z
– Tronc Inc is in advanced talks to sell its troubled flagship newspaper, the Los Angeles Times, to billionaire biotech investor Dr. Patrick Soon-Shiong for around $500 million, a person familiar with the matter said. on.wsj.com/2C0s0us
– Space Exploration Technologies Corp successfully launched the Falcon Heavy rocket Tuesday on its initial test flight, marking another coup for founder Elon Musk. on.wsj.com/2C0Q5RX
– The White House signaled little flexibility on immigration on Tuesday, saying lawmakers must pass a bill on President Donald Trump’s terms and offering no relief on the tight timeline for Congress. on.wsj.com/2C1fevy
– After years of considering the European Union’s external borders set, Brussels is proposing to add some of the continent’s poorest countries to check the influence of Russia, China and Turkey in the Balkans. on.wsj.com/2C28opz
– Apple Inc’s acquisition of the popular song-recognition app Shazam Entertainment Ltd may adversely impact competition in Europe, European Union antitrust authorities said Tuesday, announcing they would take over the merger review from national regulators in Austria. on.wsj.com/2BZmCb1
FT
BP Plc’s fourth-quarter earnings more than quadrupled from the year before as the UK oil and gas group benefited from higher crude prices and a surge in production from new projects.
A multimillion pound criminal trial of three former Tesco Plc executives accused of fraud and false accounting in a 250 million pound ($349.05 million) scandal at the retailer has been abandoned after one of the defendants had a heart attack.
Tronc Inc is expected to sell the Los Angeles Times to Patrick Soon-Shiong, the pharmaceuticals billionaire who invested in the U.S. publisher in 2016, capping a tumultuous period for its flagship newspaper.
NYT
– U.S. casino mogul Steve Wynn resigned Tuesday as chairman and chief executive of his company, Wynn Resorts Ltd, in response to sexual misconduct allegations. (nyti.ms/2C06xSu)
– Tronc Inc, the owner of the Los Angeles Times, is close to a deal to sell the newspaper to Patrick Soon-Shiong, a billionaire Los Angeles doctor and one of Tronc’s major shareholders. (nyti.ms/2nNCzvO)
– German carmaker Daimler AG publicly apologized on Tuesday after its Mercedes-Benz brand caused an outcry in China by quoting the Dalai Lama in a social media post. (nyti.ms/2nJkm39)
– SpaceX’s Falcon Heavy roared into space in its debut test flight on Tuesday from a Florida launch site, in another milestone for billionaire entrepreneur Elon Musk’s private rocket service. (nyti.ms/2BKkwQI)
Canada
THE GLOBE AND MAIL
** Premier Rachel Notley has instructed Alberta’s alcohol regulator to block about C$70 million ($56 million) worth of wine imports from British Columbia in retaliation for proposed rules that would effectively prevent Kinder Morgan’s Trans Mountain pipeline expansion. (tgam.ca/2Ep67Kl)
** Barrick Gold Corp says it will incur a pretax charge of C$429 million ($343 million) in its upcoming fourth-quarter results as a result of downgrading a portion of its gold reserves at its troubled Pascua-Lama project. (tgam.ca/2Es6mok)
** WestJet Airlines Ltd plans to increase capacity in the first quarter and full year of 2018 as it expands domestically, internationally and with its ultralow-cost carrier taking flight later this year. (tgam.ca/2Es7xnK)
NATIONAL POST
** Nutrien Ltd, the newly formed company from the merger of Potash Corp of Saskatchewan and Agrium Inc, is well on course to achieve savings of half a billion dollars in synergies annually, according to its CEO Chuck Magro. (bit.ly/2EnDAVz)
** Canadian Radio-television and Telecommunications Commission is once more asking America’s tech giants for coveted online streaming data to help it plot the future of Canadian content consumption, a move that could test its clout with U.S. companies that previously refused to hand over their subscriber information. (bit.ly/2Epb4Tr)
Britain
The Times
Ocado Group Plc has raised 144 million pounds ($200.94 million) to invest in its international licensing division, despite admitting that it “didn’t have to”. bit.ly/2BJc0RP
Frustrated customers defecting from Barclays Plc boosted the number of net new clients won by Hargreaves Lansdown Plc to 61,000 in the six months to December. bit.ly/2BJXjy7
The Guardian
Royal Bank of Scotland Group Plc misled parliament over the extent of its mistreatment of struggling business customers, the shadow Treasury minister has claimed. bit.ly/2BIv0jf
An 18-week fraud trial involving three former directors of Tesco Plc’s UK business has been abandoned after one of the defendants was taken ill. bit.ly/2BIGO54
The Telegraph
MI6 has raised concerns after a Russian oligarch with links to military hardware production was able to use the London Stock Exchange to raise an estimated 1 billion pounds. bit.ly/2BIeY9e
European regulators will assess Apple Inc’s takeover of British song-recognition app Shazam, after seven countries argued the deal could limit competition. bit.ly/2BKdH1t
Sky News
An American hedge fund H/2 Capital Partners will this week hand Four Seasons Healthcare Group, Britain’s biggest care home operator, a 70 million pounds ($97.68 million) lifeline even as the deadline for a long-term rescue deal is pushed back by two months. bit.ly/2BIGu6j
Eat, one of Britain’s biggest sandwich chains, is considering a wave of shop closures as it becomes the latest retailer to be forced to react to a rising high street cost-base. bit.ly/2BKvG7V
The Independent
Robert Chote, the chair of the Office for Budget Responsibility, has said it was a mistake for ministers to have tried to keep the Treasury forecast, which shows Brexit is likely to do long-term harm to the UK economy, secret. ind.pn/2BIzu9Q
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Poland has officially made it a crime to blame the nation for Holocaust crimes committed by German Nazis, “defying both criticism from Israel and a warning from the U.S.,” reports CBS News.Follow us on Facebook and Twitter, and don’t forget to sign up for Reason’s daily updates for more content.
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