Few TV shows—especially few political shows—can compare to Firing Line, the talk show hosted by William F. Buckley, Jr. In its original incarnation, it ran for 33 years and over 1,500 episodes and featured guests ranging from Muhammad Ali to Ronald Reagan to Jack Kerouac to Milton Friedman to Mother Teresa.
The show went off the air in 1999, but now it’s back on PBS with Margaret Hoover in the host chair.
Fox Business host Maria Bartiromo has another interview with President Trump dropping on Sunday – but in a tweet sent Friday afternoon, she revealed that the president told her he’s working on “Phase 2” of his tax-cut plan.
“Phase Two” – which Trump first hinted at shortly after passing “Phase One” back in December – will include another cut to the corporate rate, bringing it down to the 20%-21% area, according to the president.
Trump added that the second tax overhaul will “probably be in October, maybe a little sooner” – meaning that Republicans will try to push it through before the midterms.
Trump also said he won’t ask his nominees beforehand how they might vote on overturning Roe v. Wade. “They’re all saying don’t do that…but I’m putting conservative people on.” He added that he’s proud of his pick of Neil Gorsuch, and he’ll be “putting someone like that on.”
The president has previously hinted that he could try to make tax cuts for individuals permanent as part of his follow-up tax plan (they’re presently expected to expire in 2025). Of course, there’s one major problem to making these changes permanent: And that is an additional $500 billion added to the deficit in perpetuity.
The Second Half can’t be any worse that the first, right?
H1 2018 was ugly for most…
WORST
Bitcoin Worst Start To A Year Ever
German Banks At Lowest Since 1988
Onshore Yuan Worst Quarter Since 1994
Argentine Peso Worst Start To A Year Since 2002
US Financial Conditions Tightened The Most To Start A Year Since 2002
Global Systemically Important Banks Worst Start To A Year Since 2008
Global Stocks Worst Start To A Year Since 2010
China Stocks Worst Start To A Year Since 2010
German Stocks Worst Start (In USD Terms) Since 2010
Global Economic Data Disappointments Worst Since 2012
Emerging Markets, Gold, Silver Worst Start To A Year Since 2013
High Yield Bonds Worst Start To A Year Since 2013
Offshore Yuan Worst Month Since Aug 2015
Global Bonds Worst Start To A Year Since 2015
Treasury Yield Curve Down Record 16 Of Last 18 Quarters
BEST
US Tech Stocks Best Start To A Year Relative To Financials Since 2009
Dollar Index Best Quarter Since Q4 2016
WTI Crude Best Month Since April 2016
Bloodbath
As the ‘global synchronous recovery’ narrative collapsed with Global Macro Surprise Index collapsing to six year lows at the fastest pace since 2012 (which led The Fed from Operation Twist to QE3…)
And as the economy slowed, US financial conditions tightened dramatically…
* * *
STOCKS
World Stocks are red to end H1 2018 – they just suffered their worst first-half of a year since 2010…
China’s Shanghai Composite suffered its worst start to a year since 2010…
Europe was mixed in H1 with DAX the biggest loser as trade wars hit the big export economy (and Italy suffering on political crisis)…
With German banks back to 30-year lows…
In US equity-land, the bounce in the S&P in the last 24 hours (off unchanged for the year) has saved the major US equity market index from its worst start to a year since 2010.
US equity market volatility has been very different in 2018 so far…
Trannies had an ugly month but the rebound of the last 24 hours rescued the rest of the majors into the green for the month… However, The dow (blue below) struggled all afternoon and ended June with swoon…
Trannies were worst on the week but all major US equity indices closed red… The Dow managed to make it back to unch briefly midweek before the selling resumed…
24,425.84 was the magic number for The Dow to end June green (and 24,330 is the 200DMA) but it failed miserably and closed below the 200DMA for the 4th day in a row
Bank stocks were unable to hold their post-CCAR gains…(selling off after Europe closed)
Tech outperformed financials by the most to start the year since 2009…
Global banks were a bloodbath in H1…
* * *
BONDS
Global Bonds suffered their worst quarter since Q4 2016 (and worst start to a year since 2015)…back into an interesting zone of support/resistance
US treasury yields are all higher on the year (though the massive flattening between 2Y and 30Y is very evident)…
30Y Yield are actually lower in Q2…
And In June, 10Y and 30Y yields are lower…collapsing at the long-end since The Fed hiked rates…
One glance at the above and it is clear that the yield curve is collapsing…
In fact Q2 makes the 6th straight quarterly flattening in a row (and 16th quarter in the last 18 that the 2s30s curve has flattened)
High yield bonds suffered their worst start to a year since 2013, dramatically underperforming stocks…
But it was investment grade credit that really collapsed…
CURRENCIES
The Dollar Index soared in Q2 – up 5%, its best quarter since Q4 2016 (and breaking a 5 quarter losing streak)…
And the biggest driver of the dollar’s spike – a collapsing Yuan… (June was the worst month for offshore Yuan since the Aug 2015 devaluation and Q2 was the worst quarter for the onshore Yuan since 1994)
Emerging Markets were a bloodbath…
With the Argentine Peso (apart from the black market bolivar) the worst in the world…
Cryptos were a bloodbath In Q2 (and in June)…Ripple is 2018’s biggest loser for now – down 79% YTD…
An odd week though this week with Bitcoin notably outperforming the rest of the crypto space (maybe finding support around the $6000 level)…
Bitcoin worst month since March (down 4 of 6 this year) and down for 2nd quarter in a row
This is Bitcoin’s worst start to a year ever…
And HODLers are hoping this is not an echo of Nasdaq 2000…
COMMODITIES
June was the best month for WTI Crude since April 2016 (up 8 of the last 10 months)…
And is up 4 quarters in a row to the highest since Nov 2014
The last two weeks have seen WTI explode higher – the best two weeks since August 2016 – as Copper and PMs have drifted lower…
This is the worst start to a year for gold and silver since 2013 (notice how every time silver gets its head above water in 2018, someone hits it).
* * *
And finally, the SMART money has reaccelerated its exit of this market in the last month…
And as the SMART money exits, Millennial men are storming in…
Interesting findings in the US trust insights on wealth and worth: it’s mainly male millenials who moved into stocks in 2018. Looks like testosterone triggered animal spirits.. pic.twitter.com/jGv5BxOAVI
Canada retaliated at the Trump administration’ steel and aluminum tariffs on Friday, vowing to impose punitive measures on C$16.6 billion ($12.63 billion) worth of American goods until Washington backs down. The tariffs, which will come into effect on July 1, will mostly target U.S. steel and aluminum products, as well as foodstuffs like coffee, ketchup and whiskies (the full list can be found here).
“We will not escalate and we will not back down,” Foreign Minister Chrystia Freeland told reporters at a Stelco Holdings in the Ontario steel city of Hamilton.
“We are acting very much in sorrow, not in anger,” said Freeland, stressing the closeness of the overall relationship. According to Reuters, bilateral trade is worth around C$2 billion a day.
Freeland also said she expected the negotiations would enter an intensive phase after a Mexican presidential election on July 1.
Freeland’s announcement marked a new low in ties between the two neighbors and trading partners which have become painfully strained since Trump took power. As in the case of European and Chinese tariffs, the measures are designed to pressure Trump by focusing on goods from states where his political allies hold sway.
Separately, Ottawa also unveiled an aid package for affected industries and workers worth up to C$2 billion, consisting mainly of up to C$1.7 billion in commercial financing and insurance for firms in the steel and aluminum sectors and related industries.
To some the Canadians, Ottawa’s response was not enough: the head of the Teamsters Canada union welcomed the announcement and said Ottawa should consider expropriating American pharmaceutical patents if necessary.
Canada’s measures to slap counter-tariffs on U.S. aluminum and steel, as well as an aid package for both industries, may need to be expanded if the trade dispute drags on, said Ken Neumann, national director of United Steelworkers.
He added that the Canadian government should consider “immediate” safeguards to steel dumping, and that loan guarantees and innovation fund announced by government is “helpful” but assistance for workers is “much more modest”
“The counter-tariff and community support measures announced today by the federal government is a good first step that will need to be expanded if the trade dispute continues beyond the short-term.”
* * *
Meanwhile, the Trump administration is now studying whether to retaliate further by putting tariffs on Canadian autos, which economists say would help plunge the economy into a recession. Freeland called the idea “absolutely absurd”.
“We believe that cooperation is a better path forward than escalation,” said Kent Bacus, the association’s director of international trade and market access.
U.S. officials have linked the tariffs to slow progress in talks to modernize the North American Free Trade Agreement, which Trump says is a disaster and must be changed.
Finally, as disclosed one month ago, here is the list of US exports that will see a 25% tariff:
President Trump was prank called yesterday at 30,000 feet on Air Force One after “Stuttering John” Melendez pretended to be New Jersey Democratic Senator Bob Menendez.
Trump starts off the conversation by congratulating “Menendez” on his primary win against Lisa McCormick, telling him he “went through a very tough situation.”
The two then discussed immigration – with Trump “Bob, let me just tell you I want to be able to take care of the situation every bit as much as anybody else at the top level. I’d rather do the larger solution rather than the smaller solution.”
On the topic of a Supreme Court pick, “Menendez” tried to bait Trump into exchanging political favors for a less conservative pick:
“Bob Menendez”: “I promise you, you will have my vote. I will help you if you if you don’t go too conservative, you know what I’m saying?”
Trump: Ah… well, we will talk to you about it. We’re gonna probably make a decision Bob over the next two weeks. We have some great choices.
Melendez said on his podcast “This is how easy it is to infiltrate the administration.”
Meanwhile, the White House is scrambling to figure out how Melendez was so easily transferred from the White House switchboard to Air Force on, reports Axios.
Trump of course isn’t the first politician to be trolled in recent memory. Both John McCain and Maxine Waters fell victim to Russian pranksters Vladimir Krasnov and Aleksey Stolyarov, known online as Vovan and Lexus, in 2017. McCain took a call from who he thought was the Ukrainian Prime Minister, while Waters was tricked into talking about Russian hacking and other Kremlin concerns.
And while there’s no way to prove that the recordings are actually them, neither have denied their authenticity.
Business had been good at Jack’s Ornamental Iron. So good, in fact, that co-owners Greg Schow and Tina Pardue were planning to expand into a larger workspace and hire 25 percent more employees.
But those plans have been canceled, they told a local Salt Lake City television station this week, because President Donald Trump’s tariffs have imposed huge new costs on the metalworking company’s supplies of steel and aluminum. Schow says the business purchases roughly $1 million worth of steel every year, so the 25 percent import tax on imported steel means Jack’s Ornamental Iron will face about $200,000 in new overhead costs.
Jack’s Ornamental Iron does a wide range of metalworking, buying raw steel and turning it into everything from boat propellers to railings and metal staircases for apartment buildings. The sudden increase in the price of steel has created big problems for Jack’s because the company has several contracts that were signed before the tariffs were announced.
“So once they give us that contract at the very beginning, we’re locked in and we can’t change your pricing,” Pardue told KUTV. “On our current jobs we have right now, we’re just having to eat it.”
That’s why the expansion and new hiring are on hold.
Sen. Orrin Hatch (R-Utah) highlighted the Salt Lake City company’s plight at Wednesday’s hearing of the Senate Finance Committee, where a number of senators sharply criticized Commerce Secretary Wilbur Ross for the administration’s tariff policies.
“These companies are small, Mr. Secretary, but they are important,” Hatch said, referring to Jack’s Ornamental Iron and another Utah-based metalworking firm. “They are important sources of jobs in our communities, and they are particularly vulnerable to the consequences of tariffs.”
Even after being mentioned in a Senate hearing, it’s unlikely that stories about businesses like Jack’s Ornamental Iron will get the sort of coverage that, for example, Harley-Davidson received this week when the iconic American motorcycle manufacturer announced that it would be moving some production jobs overseas to avoid tariffs. It’s unlikely that Jack’s Ornamental Iron will get trashed by the president on Twitter—as Harley-Davidson did—for canceling plans to hire more workers.
The decisions made by each of these businesses illustrate the consequences of the White House’s bellicose trade policy. Steel prices have spiked since the tariffs were announced (just like how prices for lumber and washing machines spiked after earlier Trump tariffs went into effect), increasing production costs for myriad American businesses while leaving those same businesses at a competitive disadvantage against foreign competitors. Ultimately, consumers pay the price.
But what’s happening at Jack’s Ornamental Iron also speaks to the difficulty of assessing the real economic impact of the tariffs. When companies lay off workers as a way to offset the higher costs of their materials, it’s possible to count those job losses. The same is true when a company like Harley-Davidson says it is going to move some jobs overseas to avoid the tariffs. Schow’s and Pardue’s decision to cancel plans to hire more workers won’t get included in those counts, but it’s still a loss—both for the economy as a whole and for the individuals who would have gotten those jobs that now won’t exist.
There are plenty of seen, measurable consequences for tariffs. The unseen costs matter too.
The bounce in the S&P in the last 24 hours (off unchanged for the year) has saved the major US equity market index from its worst start to a year since 2010.
2018 has also been a ‘different’ year in terms of volatility. As Bloomberg notes, a procession of awful days is battering investor nerves. While most of 2018’s sessions have been up ones, when the market falls, it falls hard. Single-day drops are 20 percent bigger than gains, on average, the widest gap in seven decades.
The average move in the S&P 500 is 0.7 percent this year, up from 0.3 percent in 2017. It’s a pace that if maintained would be the biggest increase on record.
Since the peak of the S&P 500 in late January, only Small Caps remain comfortably in the green (because domestic companies are insulated from Trump’s trade wars according to the narrative), but The Dow and S&P remain well off their highs…
While an “intermediate correction” is what everyone hoped February’s was (a plunge that never gets worse than about 12%), the odds of it being one of those are shrinking.
Of 33 such episodes over the last 70 years, only one has taken longer to erase…
The exception was in 1994, a selloff that also began in February and lasted two years. Like now, the second year of Bill Clinton’s presidency featured a tightening Fed and losses in Treasuries.
Given the tightening of financial conditions, we would not be holding our breath for any immediate return to the highs – in fact quite the opposite…
Television critic Glenn Garvin tunes into Netflix’s Cooking on High, a show that’s exactly what the name says:
It’s obvious—hilariously, bizarrely, sometimes painfully obvious—that everybody involved has sampled and then oversampled the recipes. Consider this judge’s verdict on a pot-infused grilled cheese sandwich: “The best goddamn sandwich I ever ate in my whole life. It tasted great. But I’m also high as a motherfucker. [Face looming freakishly into camera.] Look at the eyes, kid!”
Sort of an unhinged love child of Iron Chef and Reefer Madness, Cooking on High features two marijuana chefs—this sounds like a joke we would have made over Cheez Whiz and saltines when I was in college, but now it’s an actual thing—being handed a handful of weed and told to poach it or fry it or whatever into an edible dish within 30 minutes.
If you own a Samsung Galaxy S9, Galaxy S9+ or the Note 8, you better be careful: Because those nudes your girlfriend sent you just might end up in the inboxes of your friends and family, too. Though hopefully this glitch will soon be fixed, as Samsung is reportedly scrambling to fix a bug in its messaging service that is causing photos to be sent without the user’s authorization.
As the Inquirer pointed out, perhaps the most disturbing aspect of the glitch is that the (inadvertent) sender likely won’t be aware that the photos were ever sent, unless the recipient tells them.
One user reportedly had his entire photo gallery sent to his girlfriend in the middle of the night, and others have taken to online forums with similar complains, according to Sputnik.
If you or someone you know owns one of these phones, here’s how to check whether you’ve been impacted by this glitch:
If you want to check if it has already happened to you, take a look at the log files for your device in your phone account. That’s the easy bit – it’s not showing up in message history on devices, but your carrier will still be delighted to bill you for it, so that’s a good place to start.
That’s not to say that it’s a carrier issue, by the way, it looks like a bug in the most recent update of the app. And it’s not the first time that Samsung Messages has borked either.
And if you have been impacted, here’s a temporary fix that should hold until Samsung releases a patch:
If you want to workaround until there’s a fix, go into the permissions for Samsung Messages (in the settings menu of the phone) and turn off the phone’s permission to access the storage from your phone. That should nip it straight in the bud.
Samsung hasn’t officially acknowledged the bug – at least not yet. And it’s unclear when a fix will be available.
Gabrielle Giffords, founder of the eponymous gun control group Giffords, blames Congress for the shooting that killed five people at a newspaper in Annapolis, Maryland, yesterday. But it’s not clear what Congress should or could have done to prevent the shotgun attack on the Capital Gazette by a man with a longstanding grudge against the paper.
“Reporters shouldn’t have to hide from gunfire while doing their jobs,” says Giffords, a former U.S. representative who was gravely injured in a 2011 shooting that left six people dead in Tucson. “A summer intern in the newsroom shouldn’t have to tweet for help. We shouldn’t have to live in a country where our lawmakers refuse to take any action to address this uniquely American crisis that’s causing so much horror and heartbreak on what feels like a daily basis.” But Giffords’ indictment of her former colleagues does not identify any legislation they could have enacted that would have made a difference for the victims of yesterday’s attack:
Time and time again, those representing us in Congress have failed to show the courage we need to keep us safe. Bump stocks are still legal. Background checks are still not mandatory for all gun sales. Americans are demanding that their lawmakers pass effective laws that can protect our communities and stop dangerous people from accessing guns, but this Congress refuses to listen. We should be outraged. And we should be making plans to hold them accountable. I’m ready to stand with voters and make our voices heard loud and clear in November.
Bump stocks, which the Trump administration plans to ban by creatively reinterpreting federal law, played no role in yesterday’s crime or any other mass shooting, with the exception of last year’s attack in Las Vegas (and it’s debatable whether they increased the death toll there). Nor did the Annapolis shooter use anything that would qualify as an “assault weapon,” another favorite target of gun controllers. Police say Jarrod Ramos, the man charged with carrying out the attack, legally bought the pump-action shotgun he used sometime in the last 18 months, which means he did not have a disqualifying criminal or psychiatric record. Mandating background checks for gun sales that don’t involve federally licensed dealers, as Giffords recommends, plainly would not affect someone who can pass a background check.
As for “effective laws that can protect our communities and stop dangerous people from accessing guns,” Giffords might have in mind gun violence restraining orders (GVROs), which prohibit people deemed to be dangerous from possessing firearms. Maryland’s GVRO law, enacted in April, takes effect in October, so that option was not available to use against Ramos, who pleaded guilty to misdemeanor harassment of a former high school classmate in 2011 and unsuccessfully sued the Capital Gazette for defamation after it covered the case. Ramos had a history of using the internet to pester and insult members of the paper’s staff. “I was seriously concerned he would threaten us with physical violence,” Thomas Marquardt, the Capital Gazette‘s publisher at the time of the libel suit, toldThe Baltimore Sun. “I even told my wife, ‘We have to be concerned. This guy could really hurt us.'”
The Sun reports that Marquardt “called the Anne Arundel County police about Ramos in 2013, but nothing came of it.” Marquardt also “consulted the paper’s lawyers about filing a restraining order, but decided against it.” Given that background, it’s not clear that police would have sought a GVRO if that option had been available at the time. In any case, Congress does not have the power to authorize GVROs in Maryland or any other state, although a bill introduced last year by Rep. Salud Carbajal (D-Calif.) would provide grants to states that enact such laws. The failure to enact that bill, which manifestly was not necessary for Maryland to pass a GVRO law, seems like a pretty thin pretext for blaming the Annapolis attack on congressional inaction.
“I remember telling our attorneys, ‘This is a guy who is going to come in and shoot us,’ ” Marquardt told the Sun. The actions that led to Ramos’s criminal harassment conviction, which included emails urging the victim to kill herself and contacts with her employer that she believes led to her dismissal, reasonably aroused concern that his behavior might escalate. When you combine that history with Ramos’s frivolous lawsuit and his online taunts of Capital Gazette staff members, it is not hard to see why Marquardt was worried about him, although the fact that Marquardt decided not to seek a restraining order suggests his fear may have been magnified in retrospect by the knowledge of what Ramos ultimately did.
Under Maryland’s new law, law enforcement officers, mental health professionals, and various relatives, intimates, and associates can seek GVROs. A temporary GVRO, lasting up to a week, can be issued without giving the respondent a hearing if there are “reasonable grounds” to believe he poses “an immediate and present danger” to himself or others. A judge can extend that order for up to six months “to effectuate service of the order where necessary to provide protection or for other good cause.” A final GVRO, which lasts up to a year and can be extended for another six months, can be issued after a hearing based on “clear and convicing evidence” that the respondent poses a danger to himself or others.
In practice, getting a temporary GVRO against Ramos would have been easy, especially since he would have had no opportunity to rebut the claims against him. It also seems plausible that a police officer could have obtained a final GVRO, which would have prevented Ramos from legally buying a gun for as long as it was in effect. If police had sought a GVRO in 2013, when Marquardt contacted them about Ramos, the order might have lasted until 2015 or so, assuming it was extended. According to police, Ramos bought his shotgun in 2017 or 2018.
In short, it’s not at all clear that a GVRO could have stopped Ramos, and the fact that the option was not available at the time had nothing to do with any failure on the part of Congress. Reflexively blaming congressional inaction for every mass shooting may be emotionally satisfying, but it does nothing to advance a rational discussion of policies aimed at preventing gun violence.
Business had been good at Jack’s Ornamental Iron. So good, in fact, that co-owners Greg Schow and Tina Pardue were planning to expand into a larger workspace and hire 25 percent more employees.
Television critic Glenn Garvin tunes into Netflix’s Cooking on High, a show that’s exactly what the name says:
Gabrielle Giffords, founder of the eponymous gun control group Giffords, blames Congress for the