Month: March 2018

After embarrassing herself and creating yet another obstacle for Congressional Democrats to overcome later this year during a disastrous trip to India earlier this month, Hillary Clinton is taking a massive 90% cut to her typical speaking fee for an engagement at one of New Jersey’s most prestigious universities.

And no – it’s not Princeton.

Clinton made her less-than-triumphant return to the Garden State on Thursday to deliver a talk about American democracy and her role in shaping the the American woman’s place in political life, according to NJ.com.

Rutgers will pay Clinton $25,000 from one of its endowments – ensuring that no tuition money will be used for the payment.

The event will be hosted by the Rutgers Eagleton Institute of Politics and will be held at Rutgers Athletic Center in Piscataway.

The event is – unsurprisingly – sold out.

Clinton famously charged $300,000 for a speech at another prestigious state school – UCLA – back in 2014.

Clinton has made three public appearances in New Jersey since her defeat in the 2016 presidential election. She campaigned for then-candidate (and now governor) Phil Murphy back in October. She also returned with her husband for another pro-Murphy event later that month.

She also traveled to Montclair for a book signing in September as part of her “What Happened” apology tour.

via RSS https://ift.tt/2J5EyoY Tyler Durden

Nasdaq futures are up 2%, going vertical amid dismally low liquidity following headlines from The White House that while President Trump is frustrated with some Amazon customers not paying sales tax, he isn’t discussing any new actions against the retailer…

Which is the exact same news that keeps being reiterated – but it was enough to spark a bounce in AMZN…

And as goes AMZN, so goes the entire US equity market…

 

Except bonds ain’t buying it at all…

via RSS https://ift.tt/2J5UPtZ Tyler Durden

Authored by Frank Sellers via TheDuran.com,

Poland has signed the largest military arms deal in its history, worth $4.75 billion, in a bid to modernize its military hardware, citing the Russian annexation of Crimea as its reason.

With most of its current hardware dating back to the Cold War, they are in a rush to get some newer, more hip stuff to show not only Russia that they mean business, but also to the rest of Europe that they fully intend to invest their taxpayer’s money into American global interests to a greater degree than any other NATO member in the region. Reuters reports:

WARSAW (Reuters) – Poland signed the largest arms procurement deal in its history on Wednesday, agreeing with the United States to buy Raytheon Co’s (RTN.N) Patriot missile defense system for $4.75 billion in a major step to modernize its forces against a bolder Russia.

“It is an extraordinary, historic moment; it is Poland’s introduction into a whole new world of state-of-the-art technology, modern weaponry, and defensive means,” President Andrzej Duda said during the signing ceremony.

NATO member Poland has accelerated efforts to overhaul its ageing weaponry following Moscow’s annexation of Ukraine’s Crimea peninsula in 2014. Two-thirds of Poland’s weaponry dates from the Cold War era when it was in the Soviet-led Warsaw Pact.

Russian Deputy Foreign Minister Vladimir Titov told state-run Sputnik news website in November that Patriot deployments were part of a U.S. plot to surround Russia with missile defense systems “under the pretext of mythical threats to security”.

The Patriot deal follows Monday’s expulsion of more than 100 Russian diplomats by the United States and a score of other Western countries including Poland in response to a the poisoning of a Russian former spy in Britain.

This month, Russian President Vladimir Putin unveiled an array of new nuclear weapons, saying they could hit almost any point in the world and evade a U.S.-built missile shield.

The Patriot deal came as a relief for Poland amid tension with Washington over a law Warsaw introduced in January imposing jail terms for suggesting Poland was complicit in the Holocaust.

The United States says the bill subverts freedom of speech and Israeli officials say it amounts to Holocaust denial, an accusation that Poland’s nationalist government rejects.

Polish Prime Minister Mateusz Morawiecki said the Patriot agreement showed “solidarity and cooperation” with the United States and other NATO countries.

“STRONGER THAN OTHERS”

Wednesday’s deal is for the delivery in 2022 of two Patriot batteries manufactured by Raytheon, each with two fire units.

Warsaw is negotiating with Washington to buy more Patriots, a new 360-degree radar and a low-cost interceptor missile as part of a second phase of modernization.

“We do expect that Poland will move pretty quickly with Phase II. They have a stated desire to complete that by the end of the year,” Wes Kremer, president of Raytheon Integrated Defense Systems, told Reuters by telephone.

Air defenses are particularly important for Poland and neighboring Baltic states Lithuania, Latvia and Estonia.

NATO planners say Russia is using its Baltic enclave of Kaliningrad as well as Crimea to pursue the capability to block off NATO’s air access to the Baltic states, about a third of Poland and to the Black Sea.

Warsaw’s decision may raise pressure on Washington to meet Baltic requests for stronger air defenses. While the Baltics are seeking their own missile defenses, the high cost for their small economies makes any quick purchases difficult.

Raytheon’s Kremer said the current threat environment had increased demand for missile defense systems and the Donald Trump administration was working to accelerate sales to allies.

“In general, they’re more open to expediting and getting these deals worked,” Kremer said.

Fourteen other countries, including six NATO members, have the Patriot missile. Romania agreed in November to buy Patriots and the U.S. government has also approved sales to Sweden. Switzerland last week announced it was also looking at the Patriot among other systems in a competition expected to kick off later this year.

Raytheon hopes the Polish purchase could provide fresh momentum for its bid to supply a more modern Patriot system to Germany, which has not yet signed a contract for the rival MEADS system built by Lockheed Martin (LMT.N) and European missile maker MBDA, three years after it picked MEADS over Patriot.

Kremer said changing course and expanding its existing Patriot systems would make it easier for Germany to work jointly with other Patriot users in NATO, although MEADS supporters say the system is intended to be able to integrate other components.

Poland’s deal, approved in November by the U.S. State Department, envisaged a sale worth up to $10.5 billion. But Warsaw brought the price down by opting for a less ambitious command system and procuring some elements locally.

“We are getting to the front row of countries which will be able not only to cooperate and jointly carry out tasks with the United States and NATO, but will be also perceived on (NATO’s) eastern flank as … stronger than others,” General Leszek Surawski, the Polish military’s chief of staff, said after the signing ceremony.

Poland is apparently so afraid of the big bad bear that they are shelling out nearly 5 billion for some American missiles to help ward it off in a bid to demonstrate that they can be the most powerful NATO military force in the region.

With tensions between Russia and Western powers mounting, Poland doesn’t want to be left out of an opportunity to get a piece of the action and to show that they are ready to spend their money on weapon systems for whenever, or if ever, the West (read Washington) ever decides that it’s time to assert some military dominance and bring some “real democracy” to Eastern Europe.

via RSS https://ift.tt/2GyInov Tyler Durden

With traders looking in awe at the ongoing flattening in the yield curve, as the 2s10s drops below 50bps…

… with the 10Y sliding to a 7 week low under 2.74% and telegraphing that unless the Fed manages a parallel shift in the curve, that Powell Fed will create a recession with just 2 more rate hikes as the curve inverts, the action again remains squarely focused on the unsecured dollar funding market, where 3M USD Libor just did something it hasn’t done in 13 years.

At its 8am ET fixing, Libor increased from 2.3080% to 2.3118%, rising for the 37th straight day, and marking the longest consecutive string of advances since a 50-day streak that ended in November 2005. Libor is now up a whopping 62 bps since the end of 2017, a move that is far more acute than the shift in either Fed Fund futures or 2Y TSYs.

Additionally, and as shown on this website, the relentless blowout in the Libor-OIS spread continues to signal that conventional funding pathways remain at least partially blocked – for either technical or systemic reasons – even if overnight Libor-OIS narrowed fractionally to 59bp from 59.3bp a day earlier.

In the latest attempt to explain the move in Libor, Goldman this morning noted that the surge in the interbank lending rate has been driven by a drop in demand, or concern over a potential decline, “for short-duration assets by cash-rich companies following the passage of the tax reform legislation in December,” something we have said since last October, which is also why we no longer believe this explanation is sufficient as the market will have had more than enough time to not only price the impact of tax reform, but also to take advantage of the gaping arb; furthermore, as shown in the chart below, the recent flood of T-Bill issuance – another reason widely cited for the blow out in Libor-OIS – is about to disappear.

In other words, should Libor fail to tighten in April, one can safely assume that there are additional factors involved, which are also beyond the  Base Erosion Anti-Abuse Tax or BEAT considerations, proposed recently by Zoltan Pozsar, which also will have been priced in by now.

Meanwhile, another stunning inversion is being observed in the markets, where in the past week, 3-Month Libor has now also blown wide of 2Y Treasurys…

… an inversion that rarely if ever happens…

 

… and which suggests that one should perhaps be more focused on the Libor-10Y curve, than the steepness/inversion of the 2Y-10Y as a harbinger of the next recession.

Finally, going back to the current level of Libor, whether the reason for its sharp move is systemic or technical remains irrelevant in the context of the big picture: what is relevant as we said over a month ago, is that over $300 trillion in debt instruments which reference Libor, are now paying far more in interest than they used to, with the double whammy being the sharp spike higher, which adds to the pain from the move. Furthermore, the fact that the move wider in both Libor and Libor-OIS has been far longer than all of the so-called experts predicted, suggests that the tightening in monetary conditions is far greater than the prevailing level of the S&P suggests. Indeed, one look at the stock price of Deutsche Bank, or the blow out in bank CDS confirms this.

Which begs the question: how much more upside in Libor can banks, markets and the Fed stomach, before something snaps, and the Fed is forced to cut rates or proceed with more QE?

And, even more importantly, should Libor continue to drift wider (or accelerate) in April, which is just around the corner, something which Forward Rate Agreement say will not happen, then the entire “technical” justification for the move in Libor can be thrown out, as Wall Street is forced to admit – once again – that aside from sounding confident and wearing an expensive suit to give the impression it knows what’s going on, it really has no clue what is behind the Libor (and Libor-OIS aka “interbank stress”) blow out.

via RSS https://ift.tt/2uAUfBg Tyler Durden

This is why it’s called tit-for-tat.

The Kremlin had vowed to retaliate against the “provocative gesture”, denying it had any role in the attack; and now it has.

Just days after Trump announced he – together with much of the Western world – would expel 60 Russian diplomats from the US, and close the Russian consulate in Seattle, moments ago the Russian foreign minister said that Russia would retaliate in equal proportion and expel 60 US diplomats from Russia, as well as close down the US consulate in St. Petersburg.

However, that is just the response to Washington. In total, well over 100 Russian diplomats were expelled from numerous other nations:

You will find more infographics at Statista

 

Developing

via RSS https://ift.tt/2pOzo88 Tyler Durden

Facebook is making an unprecedented effort to reassure its billions of users after years of surreptitiously hoovering up reams of data before packaging it and selling it to the highest bidder.

The practice was extremely lucrative for Facebook

But after allowing users to view all of the data Facebook has collected on them over the years (an option that likely only served to incite more panic about the company’s all-seeing ways), Facebook is finally beginning to sever its relationships with certain third-party data providers that – though they were lucrative – were also the source of some of the company’s worst abuses of unsuspecting consumers’ data.

According to RT, Facebook said Thursday that it will stop offering an advertising option that allows its customers to exploit personal data provided by third-party data aggregators – firms like Acxiom, Epsilon, TransUnion, Experian and others, according to Product Marketing Director Graham Mudd.

These data aggregators helped Facebook provide its advertising customers with more precise data profiles of Facebook users. The data chiefly pertained to customers’ offline activities, which made it particularly valuable for the social media giant. In return, Facebook would kick back some of its advertising earnings to these third parties. Facebook plans to completely phase out the program, known as “partner categories” over the next six months.

In a brief statement published on the Facebook newsroom, the company said that, while allowing advertisers to use data from third party aggregators is a “common industry practice,” Facebook is going the extra mile to ensure its users are comfortable.

We want to let advertisers know that we will be shutting down Partner Categories. This product enables third party data providers to offer their targeting directly on Facebook. While this is common industry practice, we believe this step, winding down over the next six months, will help improve people’s privacy on Facebook.

The news is the latest capitulation by Facebook after some advertisers, including Mozilla and Commerzbank, have canceled their ad partnerships with Facebook while some brands have protested by deleting their Facebook pages.

Mozilla even went so far as to design a “Facebook condom” setting that will allow users to stop the social-networking site from hoovering up their data.

CEO Mark Zuckerberg has offered a (hollow-sounding) apology to Facebook’s users and has also assented to demands that he testify before two US Congressional committees next month (while snubbing lawmakers in the UK).

Meanwhile, Bloomberg published a feature yesterday exposing Facebook’s tolerance of shady “affiliate marketers” who help hucksters sell diet pills and other sham supplements to unsuspecting Facebook users. Still no word on whether the company plans to amend that program…

 

My wife and I discussed a Fat Tire Bike Tour of Paris over iMessage last night. Today I get an ad in my FB feed for it. Unreal you dirtbags

— Michael Antonelli (@BullandBaird) March 29, 2018

 

…Or whether any of these reforms will stop this from happening…

via RSS https://ift.tt/2Igigjb Tyler Durden

Authored by Mike Shedlock via MishTalk,

Institutions in search of yield are gobbling up loans with little protection, at riskier and riskier spreads.

Record-breaking chart from LeveragedLoan.Com.

• The share of outstanding leveraged loans that are covenant-lite crept to another record high in February, reaching 75.8%, according to LCD and the S&P/LSTA Loan Index.
• At the end of February the amount of U.S. leveraged loans outstanding was $984 billion, meaning there is now $745 billion of covenant-lite loan debt held by institutional investors.
• The share of outstanding cov-lite loans matches the rate that newly-issued loans are cov-lite, according to LCD. Of the nearly $92 billion of U.S. leveraged term debt issued so far this year, $69 billion is cov-lite, according to LCD.

More Risk, Less Return

Also consider More Risk, Less Return: Spread vs Leverage on US LBO Loans.

• First-lien leverage on loans backing U.S. LBOs has crept to a record-high in 2018 as yield-starved institutional investors flock to these deals, looking to put huge cash stores accumulated over the past 18 months to work.

• Those yields aren’t what they used to be, however. Indeed, by one metric, LBO loans are less attractive for an investor now than at any time since the financial crisis.

• Specifically, LBO loans this year offer institutional investors 75.1 bps of spread per unit of leverage (SPL). That’s down noticeably from 87.5 bps last year and 111.5 bps in 2016, according to LCD.

Recklessness prevails, still.

Institutions buying junk bonds and other such garbage are about to get clobbered.

via RSS https://ift.tt/2GYCb6Y Tyler Durden