Month: September 2018

After Friday night’s blockbuster NYT report in which according to Andrew McCabe’s personal files, the deputy Attorney General has offered to record president Trump (whether or not jokingly), and proposed invoking Article 25, and which prompted speculation that Trump would fire Rosenstein imminently, moments ago Axios reported that Rosenstein has decided preempt that step and has verbally resigned to Chief of Staff John Kelly in anticipation of being fired by President Trump, according to a source with direct knowledge.

Per a source close to Rosenstein: “He’s expecting to be fired,” so plans to step down.

The news sent the S&P to fresh session lows.

Developing

 

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In comments made to reporters outside the UN General Assembly, and in a radio interview with Fox Host Geraldo Rivera, President Donald Trump on Monday dismissed the latest allegations against Judge Brett Kavanaugh as “totally political” while also claiming that the roadblocks to his nomination may be the “single most unfair, unjust things to happen to a candidate for anything.”

Meanwhile, the president added that he continued to back his SCOTUS nominee “all the way.”

“And for people to come out of the woodwork from 36 years ago and 30 years ago and never mentioned it and all of a sudden it happens, in my opinion it’s totally political,” he said. “It’s totally political,” Trump told a group of reporters outside the UN as he was making his way inside for the General Assembly meeting that’s slated to begin Monday.

He also insisted that Kavanaugh  was a “fine man,” with an unblemished past” adding that these women were “coming out of the woodwork” to impugn his reputation. Both Kavanaugh and the White House issued denials shortly after the report was published, according to CNN:

Kavanaugh said in a statement, “This alleged event from 35 years ago did not happen. The people who knew me then know that this did not happen, and have said so. This is a smear, plain and simple. I look forward to testifying on Thursday about the truth, and defending my good name – and the reputation for character and integrity I have spent a lifetime building – against these last-minute allegations.”

White House spokesperson Kerri Kupec said in a statement, “This 35-year-old, uncorroborated claim is the latest in a coordinated smear campaign by the Democrats designed to tear down a good man. This claim is denied by all who were said to be present and is wholly inconsistent with what many women and men who knew Judge Kavanaugh at the time in college say. The White House stands firmly behind Judge Kavanaugh.”

During his interview with Rivera (which was taped before Kavanaugh’s second accuser came forward), Trump acknowledged that Republicans likely wouldn’t be able to convince any Democrats to vote for Kavanaugh, per the NYT, which received an advance copy of the interview.

Trump acknowledged that he would most likely not be able to persuade any Democrats to vote for Judge Kavanaugh, meaning that he would have to hold nearly every Republican to win confirmation in the narrowly divided Senate.

“We’ll get almost no Democrat,” he told Geraldo Rivera for the debut show of “Geraldo in Cleveland” on WTAM radio. “We may get a couple in states where I won by many, many points – you understand that – but we’ll essentially get no Democrat.”

However, before Ford’s allegations were made public, Trump said Republicans in Congress had hoped to win over a few red state Democrats.

At one point, the White House had hopes of winning the support of several Democratic senators running for re-election in states that Mr. Trump won, but that prospect seemed to vanish with the emergence of Dr. Blasey’s allegations. If no Democrats support Judge Kavanaugh, that means the Republicans, who hold a 51-to-49 majority with Vice President Mike Pence able to break ties, can afford to lose only one of their own caucus.

He also told Rivera that Christine Blasey Ford’s allegations were suspicious because she didn’t report them for 36 years…

Trump suggested Christine Blasey Ford’s allegations against Judge Kavanaugh were suspect because she never reported them to the authorities. “This went 36 years without a complaint.” Dr. Blasey, 51, who also goes by her married name, Ford, has accused Judge Kavanaugh, 53, of sexually assaulting her while he was drunk during a high school party when they were both teenagers.

He has categorically denied the allegation, and the two are scheduled to testify separately before the Senate Judiciary Committee on Thursday. Mr. Trump has stuck by Judge Kavanaugh, who would join Justice Neil M. Gorsuch, his first appointee, on the high court. “Hopefully, we’ll have a second judge very shortly who is a fantastic, fantastic man, a fantastic talent and intellect,” Mr. Trump said.

…echoing his comments in a series of tweets published over the weekend.

Judge Brett Kavanaugh is a fine man, with an impeccable reputation, who is under assault by radical left wing politicians who don’t want to know the answers, they just want to destroy and delay. Facts don’t matter. I go through this with them every single day in D.C.

— Donald J. Trump (@realDonaldTrump) September 21, 2018

I have no doubt that, if the attack on Dr. Ford was as bad as she says, charges would have been immediately filed with local Law Enforcement Authorities by either her or her loving parents. I ask that she bring those filings forward so that we can learn date, time, and place!

— Donald J. Trump (@realDonaldTrump) September 21, 2018

Liberals seized on these tweets for ridicule, with late-night host John Oliver – one of the leading voices of the #resistance – slamming them as “one of the most sh*theaded things I’ve seen”:

To be sure, Trump isn’t the only Republican willing to step up and publicly defend Kavanaugh: Arkansas Sen. Tom Cotton accused Democrats of a “character assassination” and adding that the Dems were “engaged in a campaign of delay and character assassination against Judge Kavanaugh.” “It’s time to vote this week,” Cotton added.

The Democrats are engaged in a campaign of delay and character assassination against Judge Kavanaugh. It’s time to vote this week.

— Tom Cotton (@TomCottonAR) September 24, 2018

Still, Trump told Rivera that he wanted Ford to “have her voice” and that the Senate should be allowed to make their own choice.

“I want her to have her voice,” Trump said. “Let her have her voice, let her say whatever she has to say. Let him say what he has to say and that in the end these senators will make a choice.”

The Senate Judiciary Committee has scheduled a hearing for Ford to share her story on Thursday.

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Via LPLResearch.com,

Among the most common questions we’ve received in the past few months are: What happens to stocks if Republicans lose control of Congress? And what happens if they retain control of both the House and the Senate?

According to Washington insiders, there is a more likely chance of the House flipping than the Senate, based on polling data. Considering that since the Civil War, the party that controls the White House has lost House seats in 35 out of 38 midterm elections, this is indeed a strong pattern. Should that happen, it could be good for stocks, as historically the best scenario under a Republican president is a split Congress.

“Markets tend to perform quite well under a gridlock scenario, but stocks have obviously done quite well since 2017 with Republicans in control of Congress,” explained LPL Research Chief Investment Strategist John Lynch.

“Even more importantly than how Washington is divided up, though, is to remember that robust corporate profits and solid economic fundamentals drive long-term gains, and those are still quite positive.”

As our LPL Chart of the Day shows, a Democratic president and Republican-controlled Congress has historically been the best combination for the S&P 500 Index, followed closely by a Democratic president and split Congress. Next up, though, is a Republican president and split Congress (which appears to be a reasonable prediction for this November).

For more on what midterms could mean for stocks, be sure to read Midterm Mayhem?

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UK Prime Minister Theresa May just can’t catch a break.

Her wildly unpopular “Chequers Agreement” has pushed Brexiteers in her own party to the verge of mutiny. Labour, her chief Parliamentary rivals, are pushing for a popular referendum on the final deal – a step that would massively complicate her already fraught negotiations (though Labour leaders say canceling Brexit would not be an option during the referendum) – and the European Union leaders upon whom she was depending for flexibility have so far been unwilling to cede even an inch to help buttress her floundering administration.

And as if all of this wasn’t bad enough, May’s aides have reportedly begun contingency planning for a snap election in November to save the Brexit talks (and May’s job) after EU leaders rejected her Chequers agreement. According to the Times of London, strategists have begun war-gaming” the outcome of a public vote to help win backing for her Brexit plan. All of this comes after May suffered a humiliation at the hands of the 27 remaining EU leaders when European Council President Donald Tusk told her last week that her Chequers plan risked “undermining the single market”, and that even her staunchest Continental allies (including Angela Merkel and France’s Emmanuel Macron) had rejected it in brusque terms.

“Everybody shared the view that while there are positive elements in the Chequers proposal, the suggested framework for economic co-operation will not work, not least because it is undermining the single market,” Tusk said. He also said that he could not “exclude” the possibility that the UK could exit the EU in March with no deal.

Bloomberg reported on Monday that pro-Brexit Tory MPs have launched their own hard-line Brexit plan ahead of next week’s Tory conference that advocates for a more aggressive negotiating stance, as well as searching for other trade agreements around the world. The proposal is backed by David Davis, the Brexit secretary who quit over the summer over his disgust with May’s Chequers plan. 

Former Brexit Secretary David Davis, who quit in July because he disagreed with May, is backing the proposal published by the Institute of Economic Affairs think tank, which recommends preparing a “more aggressive” strategy for the EU negotiations, and opening trade talks with other countries around the world.

The report, which attracted the support of several prominent pro-Brexit MPs, including Jacob Rees-Mogg, chairman of the European Research Group, is predicated on the idea that the UK should pursue a European trade agreement that more closely resembles its trading arrangement with Canada. According to the Independent, roughly 12 cabinet ministers now support a “Canada-style” trade arrangement, which would be predicated on a “clean Brexit”, while six support a Norway style deal that would see the UK remain a member of the European Economic Area.

“The opportunity before the U.K. as a result of Brexit is huge: but if we squander it, the ‘new normal’ of limited economic growth will prevail, with an EU system that is failing to respond to the challenges of the modern economy,” it said. “The U.K. running its own economy will not render a deal with the EU impossible. It will bring back real growth, let the U.K. do other trade deals, and create leverage to get positive results from EU negotiations.”

The study, titled “Plan A+ – Creating a Prosperous Post-Brexit U.K.,” will add fuel to the Tory revolt against May’s so-called Chequers plan for a close “free-trade area” with the EU. Davis and former Foreign Secretary Boris Johnson both quit the Cabinet in July because they believed May’s proposal was fatally flawed and would tie the UK’s hands.

Instead, they’ve both argued for a more streamlined agreement based on the EU’s recent deal with Canada. May says this isn’t good enough and would put jobs and peace in Northern Ireland at risk. But her own plan is in trouble after EU leaders rejected key parts of it at a summit last week in Salzburg.

Plan A+ is supported by Shanker Singham, an advisor to pro-Brexit Tories, as well as influential PM Jacob Rees-Mogg.

The Institute of Economic Affairs report was written by Shanker Singham, director of the IEA trade unit and an influential adviser to pro-Brexit Tories, and it’s supported by senior Conservatives including Jacob Rees-Mogg, chairman of the party’s euroskeptic European Research Group.

The UK’s post-Brexit immigration policy is expected to be a major topic at a Tory cabinet meeting set for Thursday evening in the UK. One cabinet minister is reportedly working on a plan to distribute visas on the basis of skill. Meanwhile, preference would be given to applicants from countries that had a free-trade agreement with the UK.

At Monday’s Cabinet meeting, ministers are expected to discuss a range of issues including what immigration policy the U.K. should adopt after Brexit. According to a person familiar with his thinking, Home Secretary Sajid Javid will set out a plan for a system in which immigrants are given visas on the basis of skills or wealth.

The cabinet meeting comes roughly one week before the Tories host their annual conference, where Brexit is once again expected to dominate the conversation. Despite last week’s defeat, May continues to support her Chequers plan, saying its the only deal that would avoid a hard border in Northern Ireland.

For his part, Tusk has insisted that an October summit between May and European leaders will be the “moment of truth” for Brexit negotiations, as will – we imagine – a following summit set for November…and every successive summit up until March 29, when leaders from both sides will be forced to cobble together some last-minute contingency plan to prevent all hell from breaking lose on March 29, when the UK will leave the European Union with or without a deal.

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It appears $50 billion just isn’t what it used to be…

Argentina’s La Nacion newspaper reports that the government is seeking to increase its credit line with the IMF

Th government is negotiating with The IMF for an expansion of the Stand-by Agreement: it will add $3 to $5 billion additional funds to the $50 billion figure agreed in June, according to a source close to FinMin Dujovne. This increase is considered sufficient to cover debt maturities through 2020.

This has been confirmed by official sources to La Nacion.

Having rallied the last few days, carried on a falling USDollar-driven rebound in EM FX broadly, the peso is plunging in the early market as this increased credit line throws further doubt on Argentina’s potential for a turnaround…

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Authored by Betsy Rothstein via The Daily Caller,

Michael Avenatti, the TV-friendly attorney for porn star Stormy Daniels, has never exactly enjoyed popularity among political journalists. But his favor has dipped even further amid new allegations against Supreme Court nominee Brett Kavanaugh that he dumped into the news cycle Sunday night.

Even liberal journalists aren’t buying what he’s selling.

“On the heels of the New Yorker story, Michael Avenatti, the attorney for Stormy Daniels, jumped into the fray with some utterly uncorroborated allegations,” wrote Ryan Grim in an newsletter emailed to readers. He’s the Washington Bureau Chief for The Intercept and formerly an editor at the left-leaning Huffington Post.

”I would suggest ignoring him until he comes forward with real evidence, which he promises is coming in the next few days.”

But as Glenn Close‘s psychotic character tells her one-time lover Michael Douglass in Fatal Attraction, “I’m not going to be ignored.”

Who knows? Maybe… just maybe this time Avenatti has a coherent claim?

Avenatti, a Democrat who insists he may put his hat in the ring for the White House in 2020, released a provocative tweet early Sunday evening.

“I represent a woman with credible information regarding Judge Kavanaugh and Mark Judge,” he wrote.

“We will be demanding the opportunity to present testimony to the committee and will likewise be demanding that Judge and others be subpoenaed to testify. The nomination must be withdrawn.”

Several publications took him seriously enough to cover a story about his claims, including The New York Post and The Hill. But the pieces are carefully worded to say “He says…” and “He claims.” The publication reported that Avenatti’s so-called bombshell came “minutes” before a bigger story popped in The New Yorker by Jane Mayer and Ronan Farrow. The article introduced a new woman to the judge’s scandalous picture — a Yale classmate of Kavanaugh’s who says he put his penis in her face during a drinking game 35 years ago.

Avenatti exchanged emails with the Senate Judiciary Committee.

He says he has evidence of debauchery back in the 80s in which Kavanaugh participated in parties where women were gang raped.

He also tweeted this:

“Brett Kavanaugh must also be asked about this entry in his yearbook: ‘FFFFFFFourth of July.’ We believe that this stands for: Find them, French them, Feel them, Finger them, F*ck them, Forget them,” he wrote.

“As well as the term ‘Devil’s Triangle.’ Perhaps Sen. Grassley can ask him. #Basta.”

But even Jeet Heer, a staff writer for The New Republic, a liberal mag, has serious doubts about Avenatti’s allegations.

“I’d be really, really cautious about the Avenatti claims,” Heer tweeted just before 10 p.m. Sunday night.

Matt Ford covers the law and courts for The New Republic.

“It’s hard to imagine a quicker way to harden the growing GOP perception that the Kavanaugh allegations are a Dem set-up than by adding Michael Avenatti to the mix,” he wrote on Twitter.

Lefty Talking Points Memo is also weary of Avenatti. Just look at what editor Josh Marshallhad to say about all this.

“In republican Rome one of the most hideous punishments (for parricide) was being sewn into a sack with a dog, a rooster and a snake and being tossed into the Tiber. The modern version is being stuck in a story with Michael Avenatti,” he wrote.

Naturally journalists on the right aren’t terribly fond of Avenatti either.

“Who wants to bet Michael Avenatti has more skeletons in his closet than any of these people he’s ‘heroically’ going after?” asked CRTV’s Allie Beth Stuckey.

The Resurgent‘s Erick Erickson, a staunch Kavanaugh supporter, wrote, “I think this probably says more about Avenatti than Kavanaugh.” He was referring to the the tweet with seven F’s.

Deadspin sportswriter David Roth had something utterly depressing to say about Avenatti.

“We’re never getting rid of Michael Avenatti,” he wrote. “This dude is just a fact of life now. He’s going to appear on cable news on the day that the sun goes out.”

Podcaster Jamie Weinstein also made Avenatti the butt of a joke.

“If the 2020 race is Avenatti vs Trump, I’m not sue [sic] who I will vote for, mainly because I don’t know who will be running in New Zealand, where I will be living,” he tweeted.

Imani Gandi, a senior legal analyst for something called Rewire News, a site that covers sexual reproductive health, rights and justice, hilariously wrote, “I specifically do not tag Avenatti because he blocks people and I want to follow what he says. So stop fucking tagging him into my mentions or I will burn this place to the ground.”

But if journalists are not to be believed in their doubts about Avenatti’s claims, maybe a law professor could do the trick.

“Prof Ford’s lawyers were terrific. Ramirez turning to @RonanFarrow and @JaneMayerNYer was wise and well-handled,” wrote Jed Shugerman, a law prof at Fordham. “By contrast, Michael Avenatti is showing how not to behave. Even if he has solid evidence to back up these claims, he is undermining it with this circus show.”

Avenatti is set to appear on CNN’s “Cuomo Prime Time” Monday night.

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The dollar and bond prices snapped lower after ECB President Draghi, answering MEP questions in Brussels, warned of a “relatively vigorous pick-up in underlying inflation” sending EURUSD and Bund yields spiking.

Draghi is alos bullish on the economy:

• *DRAGHI SEES ONGOING BROAD-BASED ECONOMIC EXPANSION

• *DRAGHI: PICK-UP IN WAGE GROWTH WILL CONTINUE

• *DRAGHI RESTATES ECB GUIDANCE ON ASSET PURCHASES, INTEREST RATES

Draghi’s potentially hawkish tone sent EUR higher and the Dollar lower…

Thanks to a surge in EURUSD…

And Treasury yields are testing recent range highs…

As Bund yields spiked…

 

 

 

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With Europe still reeling over the recent revelations of Danske Bank’s $234 Billion money-laundering scandal, another target emerged moments ago – and a far more prominent one – when Germany’s markets regulator ordered Deutsche Bank to “improve its controls to prevent money laundering and the financing of terrorism.”

The regulator BaFin instructed Deutsche Bank to “take appropriate internal safeguards and comply with general due diligence obligations” under German law, Bloomberg reported. Suggesting that there may be far more behind the scenes, BaFin also appointed a monitor to assess the bank’s efforts, the first time BaFin has taken such action against a bank in relation to money laundering, the authority said in a statement on Monday.

In August, Deutsche Bank acknowledged that its anti-money laundering processes remained inefficient more than a year after it was fined almost $700 million for helping wealthy Russians move money out of the country. Deutsche Bank has also been mentioned frequently in the context of providing president Trump with loans for his various business ventures when few other banks were willing to lend to the now-US president.

Following the news, Deutsche Bank shares – which recently were lifted by news the largest German lender was looking to convert into a holding company in order to make itself easier to sell – dropped by 1%, but quickly recovered.

“We are in agreement with the BaFin that we have to improve these processes in the corporate and investment bank further,” Deutsche Bank said in response. “The bank will work together with the BaFin and the special representative KPMG to fulfill the regulatory requirements as soon as possible and within the given time frame.”

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Everyone’s favorite (until Thursday) pot-stock, Tilray, is tumbling in the pre-market, testing back towards $100 – down 66% from Wednesday’s record highs – leading the emerging cannabis sector lower on the day.

This is the 3rd losing day in a row – a record losing streak for the newly-minted company…

Peers in the emerging cannabis sector also fell Monday, with U.S.-listed shares of Cronos Group down 3.6 percent and Canopy Growth Corp. lower by 2 percent.

“Marijuana’s the flavor of the year — everybody’s been clamoring to buy,” says Mike Tomkins, an independent financial adviser in Nanaimo, who’s had several clients that invested in Tilray in recent months. He advised them to cash out at least part of their holdings during the stock’s parabolic climb last week to as high as $300 a share.

Did they listen? “Never,” he said by phone. “In most of their opinions, this is just the tip of the iceberg — things are just getting started.”

Tomkins recounts being in a parking lot recently when his ex-mother-in-law approached him to ask about buying marijuana stock. “That’s when you know everyone’s talking about it,” Tomkins said.

To counter this slide, a number of pitches are being seen pointing to the potential from European expansion. Bloomberg reports that attitudes are starting to change, in both the U.K. and Europe.

Two British children with epilepsy, Alfie Dingley and Billy Caldwell, were given special permission to import cannabis oils early this year, after public wrangles with the government put the substance’s benefits in the limelight, according to Thomas. “It’s very difficult to argue against that sort of anecdotal evidence,” he said.

In France, 82 percent are in favor of making cannabis available for medicinal purposes, according to a survey of 2,005 people by think tank Terra Nova in June. And 75 percent of Britons support prescriptive cannabis, YouGov said in May, prior to the Dingley and Caldwell cases. Germany legalized medical marijuana use in March 2017.

On July 26, U.K. Home Secretary Sajid Javid said cannabis-derived products that meet safety and quality standards will be re-categorized this fall. Sativa’s stock jumped 25 percent the same day. Reclassification will give U.K. investors a real idea of how the medicinal cannabis market will work, Thomas said.

Much of the populace lacks understanding for cannabis and has “this historic image of people smoking joints on street corners,” said Thomas. “I just hope that the regulators behind the politicians don’t put up barriers.”

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