Month: October 2018

A sea of red has greeted stock traders across the world this morning after what one analyst called “monster moves” in U.S. Treasury yields.

The bond rout that sent 10Y Treasury yields to the highest since May 2011 promoted by stronger than expected US economic data, and which accelerated after upbeat, hawkish comments from Fed Chair Jerome Powell after the close, spread into Asia and Europe on Thursday, spurring more gains for the dollar and triggering widespread declines in equities.

The catalyst for the selloff was the stronger than expected ADP private payrolls print and the near record print in the Services ISM survey which showed activity at its strongest since August 1997, sparking speculation the payrolls report on Friday could also surprise, with some suggesting a print as high as 500,000 was possible. Subsequent comments from Powell who said the economic outlook was “remarkably positive” and that rates might rise above “neutral” helped the 10Y yield climb to 3.18% on Wednesday. U.S. jobs data on Friday may stoke boosting expectations for rate hikes into 2019, with the jobless rate seen dropping to 3.8 percent, matching the lowest since 1969.

“Fixed income is the center of the financial world, and it’s hard to have a conversation without talking about the monster moves we saw in yesterday’s U.S. trade,” said Chris Weston head of research at Pepperstone Group. “It’s a very rare occurrence to see U.S. Treasuries undergo such a huge move.”

The selloff in 10Y Treasuries, which caught traders by surprise with both its velocity and magnitude, continued overnight on Thursday sending the yield on 10Y TSYs as high as 3.2325%, the steepest daily increase since the shock outcome of the U.S. presidential election in November 2016, before fading to catch its breath amid massive trading volumes.

The sharp steepening in the Treasury curve, and the continued climb in yields spread like wildfire across the globe, pushing European and Asian yields higher while shares in emerging markets slipped.

As noted last night, 10-year Japanese bond yields climbed past 0.15%, toward the upper end of the Bank of Japan’s tolerance zone of plus or minus 0.2 percent, rising above the 0.145% level which prompted intervention by the BOJ back on August 2. That said, MNI reported that the BOJ still stand ready to curb higher yields through bond buying ops if the rise is deemed too rapid. For now, however, Kuroda appears happy with the steepening in the curve which will boost local bank profitability.

Euro zone bond yields rose sharply, tracking their U.S. counterpart, while the “trans-Atlantic spread” between United States and German 10-year bond yields hit a three-decade high of around 275 bps. German 10-year bond yields hit a 4-1/2 month high of 0.55% before settling at around 0.53 percent, still up six basis points on the day.

“If the Fed is to hike rates beyond the neutral level, the underlying case is that the economy is doing very well – and if the U.S. economy is doing very well, that has spillover effects the euro zone,” said DZ Bank analyst Rene Albrecht. “This will make it easier for the ECB to raise rates in 2019; and you will see this impact yields in the euro zone, especially at the long end.”

The surge in the world’s “risk-free” rates trimmed investor appetite for other assets, and S&P futures dropped alongside the Stoxx Europe 600 and MSCI Asia Pacific gauges. The MSCI Asia-Pacific index ex-Japan index skidded 1.7% with South Korea, the Philippines, Indonesia and Taiwan all down. Even the Nikkei eased 0.3%, as rising yields offset the boost to exporters from a weaker yen.

EMini futures for the S&P 500 also lost 0.4 percent in Asian trade, while European stocks opened down 0.6%.

Emerging-market shares were hit particularly hard. The higher Treasury yields supported the greenback, and the Bloomberg Dollar Spot Index rose a sixth day. South Korea’s won was among the worst-performing currencies. Perhaps most notable among the EM sector, while China’s markets are shut, the offshore yuan slid past 6.9 per dollar in offshore trading.

The dollar advanced for a sixth day, its longest streak of gains this year, supported by rising U.S. yields following the abovementioned hawkish comments from Powell as well as expectations for a strong employment report on Friday. The Bloomberg Dollar Spot Index extended gains but stayed below year-to-date highs amid sparse profit-taking.

“This withdrawal of liquidity and gradual tightening of monetary policy” is reverberating across financial markets according to Bob Baur, chief global economist at Principal Global Investors “We look for 10-year Treasury yields to hit 3.5% at some point – later this year, early next year – and I think that’s going to be a real problem for stock markets.”

One exception to today’s yield blow out, at least initially, was Italy where borrowing costs dropped for a second day, after the government said it would cut budget deficit targets from 2020 and reduce its debt over the next three years. Prime Minister Giuseppe Conte on Wednesday confirmed a deficit target of 2.4% of gross domestic product (GDP) in 2019 and said this would fall to 2.1% in 2020 and 1.8% in 2021. The estimates for 2020 and 2021 were lower than those initially reported, bringing further relief to bond markets rattled by the new government’s plans to ramp up spending.  Italy’s Deputy Economy Minister said the Government has set the 2019/20 GDP target at 1.6%. Italian Interior Minister Salvini then said that citizens income and pensions measures in budget are to cost €16bln and that they are not taking a step back on the deficit targets even if the German-Italian 10-year spread widens to 400BPS. Italian Industry Association has said they are “partially satisfied” with the new budget plan.

However, after some initial short covering, yields on Italian 10Y also rose, and were at 3.360% last, up 5 bps on the day.

In the latest Brexit news, Theresa May’s officials plan to rush the Brexit deal through parliament in an attempt to stop Tory rebels from voting down her treaty. PM May’s team want MPs to get a meaningful vote two weeks after striking a deal with the EU; according to sources

Elsewhere, oil prices slipped from four-year highs, pressured by rising U.S. inventories and after sources said Russia and Saudi Arabia struck a private deal in September to raise crude output. Brent eased 0.1 percent to $86.20 a barrel on Thursday, while U.S. crude also fell 0.1 percent to $76.35 a barrel. Gold prices moved in a narrow range, last trading up 0.2 percent at $1.199.43 per ounce.

Thursday economic data includes initial jobless claims and durable goods orders. Costco, Constellation Brands are due to report earnings.

 

Market Snapshot

• S&P 500 futures down 0.6% to 2,913.75
• STOXX Europe 600 down 0.6% to 381.46
• MXAP down 1.2% to 160.58
• MXAPJ down 1.7% to 506.05
• Nikkei down 0.6% to 23,975.62
• Topix down 0.09% to 1,801.19
• Hang Seng Index down 1.7% to 26,623.87
• Sensex down 2.4% to 35,102.48
• Australia S&P/ASX 200 up 0.5% to 6,176.30
• Kospi down 1.5% to 2,274.49
• German 10Y yield rose 6.8 bps to 0.543%
• Euro up 0.08% to $1.1487
• Brent Futures down 0.2% to $86.12/bbl
• Italian 10Y yield fell 13.6 bps to 2.944%
• Spanish 10Y yield rose 2.3 bps to 1.559%
• Brent Futures down 0.2% to $86.12/bbl
• Gold spot up 0.2% to $1,199.18
• U.S. Dollar Index up 0.2% to 95.94

Top Overnight News from Bloomberg

• U.S. 10-year notes tumbled the most in more than a year Wednesday after data on American private-sector jobs bolstered the case for the Fed to keep up its pace of raising rates into 2019. Thirty-year Treasury yields pushed above the 3.25 percent level that fixed-income veteran Jeffrey Gundlach identified as a “game changer”
• If a 12-basis-point jump on Wednesday in 10-year Treasury yields wasn’t enough, there are indications that investors have been ramping up bets on a further increase. Positions across bond futures jumped by the equivalent of more than $20 billion of 10- year bonds on that day alone
• Italy and the European Union resumed their sniping as the populist government in Rome prepared to flesh out its fiscal plans. Antonio Tajani, president of the European Parliament, predicted the administration would overshoot the budget deficit target of 2.4 percent it has set for next year
• Downside risks to Japan’s economy have increased in the past year and more work will be needed to sustain the recovery, the International Monetary Fund said after its annual consultation with the Japanese government
• Greece is mulling the creation of bad-loan vehicles after a rout in bank stocks highlighted investor doubts about the health of the country’s financial system, three people familiar with the matter said
• The European Central Bank should normalize its monetary policy at a measured pace to prevent any “unforeseen negative effects,” according to Governing Council Member Olli Rehn
• Prime Minister Theresa May’s officials are drawing up plans to rush her Brexit deal through Parliament in an attempt to head off a rebellion from her own party, according to people familiar with the matter
• The Federal Reserve may eventually raise interest rates to levels where they begin to restrain economic growth though that’s still some ways off, Chairman Jerome Powell said Wednesday
• Japan’s benchmark bond yield climbed to 2-1/2 year high amid a global rout, rising past a level that had previously prompted the central bank to conduct a surprise bond- purchase operation to stem the advance

Asia-Pac stocks traded mostly lower as the effects of rising rates spooked investors following a concoction of strong US economic data and upbeat comments from Fed’s Powell. ASX 200 (+0.5%) bucked the trend as the index was supported by energy and financial names, while Nikkei 225 (-0.6%) eroded initial gains and fell in the red on currency effects. Elsewhere, Hang Seng (-1.7%) underperformed as the healthcare sector also weighed on the index, while mainland China was closed due to the Golden Week holiday. Finally, JGB yields rose across the curve with the 10yr and 30yr yields hitting levels last seen at the front end of 2016. US Vice President Pence is to say that US “will not be intimidated” by China following the dispute at the South China sea. According to the excerpts, Pence is also to say that China laid out a strategy in June to split US groups with “covert actors, front groups, and propaganda outlets”. In related news, the US Navy is reportedly to propose a “major” show of force to warn China after the South China sea quarrel.

Top Asian News

• JPMorgan Sees ‘Full-Blown Trade War,’ and China Stock ETF Sinks
• India Sensex Tumbles as Investors Sell Before Rate Decision
• Rupee Pares Fall as Govt Unveils Details on Oil Corps FX Loans
• India’s Top Court Clears Third Round of Bidding for Essar Steel

European equities are once again on the back foot, as concerns about a more hawkish Fed and resurfaced worries about Italy’s budget plans have hit stocks. The negative risk tone has led all major European bourses into the red, with the FTSE lagging its peers due to additional pressure offered by a bid GBP. The financial sector is outperforming as European banks are benefitting from the yield environment in fixed income, with Deutsche Bank, SocGen and Credit Agricole all up over a percent. Danske Bank are close to the foot of the Stoxx 600 after reports the Danish bank have had to discontinue their share buyback programme amid dialogue with US authorities over their Estonian money laundering scandal. EasyJet are down around 1.1% following a 0.8% drop in their load factor compared to last September.

Top European News

• Greece Is Said to Weigh Bad-Loan Vehicles Amid Market Pounding
• L’Oreal, Kering, Other Luxury Stocks Hit by China Checks Report
• Ted Baker Falls After Losses on House of Fraser’s Insolvency
• Italy, European Union Spar Despite Populist Deficit Concession

In FX, the DXY saw some loss of momentum and a retracement from peaks, but the Greenback remains underpinned by elevated US Treasury yields and marked curve re-steepening in wake of Wednesday’s upbeat US macro releases and comments from Fed’s Powell acknowledging the latest ADP and services ISM survey strength. In fact, the FOMC head went as far as saying that rates may be hiked above neutral levels and expressed concern about the economy overheating, prompting further Dollar buying that pushed the DXY beyond 96.000 at best. GBP/JPY/CHF/EUR – All attempting to regain composure, or fight the Fed, as Cable rebounds above 1.2950, Usd/Jpy retreats from 114.50+ highs, the Franc retests support around 0.9900 and the single currency pares some losses within a 1.1465-1.1500 broad range. However, the bounces look shallow if not futile and more technical than sustainable or based on anything fundamental, at this stage, with Eur/Usd eyeing key Fib levels above and below (1.1497-22), and wary about mega option expiries running off on NFP Friday from 1.1450 to 1.1500 in 3.7 bn. EM – No shock to see the higher yield/beta/risk currencies suffer at the hands of widespread Usd demand, as Usd/Try rebounds further from recent sub-6.0000 lows, but the Cny and Cnh have pared some losses from the 6.9000+ area as Golden Week nears an end, perhaps conscious about intervention next Monday?

In commodities, the oil market is hanging around 4 year highs, but is off best levels after Saudi Energy Minister confirmed the Middle-Eastern exporter has a spare capacity of 1.3mln BPD, whilst also saying that Saudi exports to the US are increasing markedly. The Energy Minister also said that they are to add and maintain another 1mln BPD of spare capacity by investing USD 20bln. Oil relevant news has come in the form of a preliminary estimate of a 8-11mln cubic meter discovery in the Norwegian sea. The gold market is recovering from the losses seen in the previous session (-USD 6/oz), with it currently testing USD 1200/OZ to the upside. This came after the DXY hit 6 week highs off the back of hawkish commentary from Fed Chair Powell. Aluminium has risen to its highest point in over 3 months and extending the gains driven by Norsk Hydro’s Brazilian site closure.

US Event Calendar

• 7:30am: Challenger Job Cuts YoY, prior 13.7%
• 8:30am: Initial Jobless Claims, est. 215,000, prior 214,000
• 8:30am: Continuing Claims, est. 1.67m, prior 1.66m
• 9:45am: Bloomberg Consumer Comfort, prior 61.2
• 10am: Factory Orders, est. 2.1%, prior -0.8%; Factory Orders Ex Trans, prior 0.2%
• 10am: Durable Goods Orders, est. 4.5%, prior 4.5%; Durables Ex Transportation, prior 0.1%
• 10am: Cap Goods Orders Nondef Ex Air, prior -0.5%; Cap Goods Ship Nondef Ex Air, prior 0.1%

DB’s Jim Reid concludes the overnight wrap

Wednesday was the largest 10-year Treasury yield sell-off since November 2016 after the US election. We’ve felt for some time that the risks on yields and inflation are very asymmetric to the upside at the moment and yesterday the dam cracked a bit. Fuelled by bumper US ISM data – more on that below – 10-year Treasuries surged nearly 12bp higher to 3.183% last night and have since touched 3.198% overnight. We’ve now easily passed the previous YTD intraday high of 3.1261% made in May and are at the highest level since July 2011. This sets us up nicely for tomorrow’s average hourly earnings print.

The yield move was an outsized response to the data. The September ADP employment print came in at 230k (vs. 184k expected) with gains fairly broad-based across industries and company size. Later on, the ISM nonmanufacturing also printed stronger than expected at 61.6 (vs. 58.0 expected). That was in fact the highest reading since August 1997 with the employment component also hitting the highest level on record. Prices paid rose to 64.2 and the highest in four months. The rest of the Treasury curve also sold off with 2y yields rising 6.1bps and 30yr yields rising 11.8bps to the highest since September 2014. 2yr and 5yr yields are now at decade long highs with 5yrs breaching 3% for the first time over that period. The bear-steeping did mean the 2-10s curve widened 5.7bps to 30.5bps and the highest since early August. Fed expectations also moved up on the positive data, with the market pricing an additional 7bps of hikes through end-2019, while the positive economic outlook from Fed policymakers didn’t hurt either.

In a public Q&A, Fed Chair Powell confirmed his recent view in favour of continued gradual rate hikes, saying “we’re gradually moving to a place where they’ll be neutral […] we may go past neutral.” He sounded optimistic on the economy, citing increases in wages, tame inflation, and low unemployment. 2 of the 7bps of Fed funds repricing yesterday came after Powell’s comments and 2bps on Treasuries. So this wasn’t the big story. More Fed speak later.

European bond yields rose 3 to 5bps across the continent, but they closed when 10-year Treasuries were only 5.2bps higher so there will very likely be some follow through today. Indeed, with the late US move the 10yr UST/ Bund spread (+272bps as of this morning) stretched to the highest level since Bloomberg starts their data series in 1989. I personally still think Bunds are one of the most mis-priced global asset classes.

US large caps hardly budged as the Treasury market unravelled until a late session dip left the S&P 500 around a third of a percent off the highs closing +0.07% but with the DOW (+0.20%) notching another record high. Small caps finally decided to re-join the recent party though with the Russell 2000 (+0.92%) snapping two days of losses, with banks in particular outperforming thanks to the higher yields. The S&P 500 banks index gained +1.25%, while bondproxies retreated with utilities and consumer staples down -1.23% and -1.06% respectively. Europe was once again dictated by Italy, this time with the positive headlines outweighing the negatives, and so helping the STOXX 600 (+0.50%) and FTSE MIB (+0.84%) to gains also.

Staying with Italy, the early rally in markets – which also helped 10y BTP yields to fall 17bps at the open – came following the various Italian press reports that we mentioned yesterday about the Italian government seemingly softening deficit targets beyond 2019. Deputy PM Di Maio confirmed the earlier press reports while Finance Minister Tria said at an event in Rome that the government was committed to “ensuring a constant reduction of the debt toward the objective agreed with the EU” and that “the government intends to follow an approach that combines fiscal responsibility and stimulus to economic growth, and we will ensure starting next year an acceleration of debt reduction”. Overall, the news flow was positive in that it signalled that the Italian government is responsive to market pressure and willing to change its course if necessary, and 2y and 10y yields ended 26.9bps and 13.9bps lower respectively. After the close we heard that the government will target deficits of 2.1% and 1.8% in 2020 and 2021, respectively, as well as reduce debt-to-GDP to 126.5% by 2021 (currently around 131%). The details remain key however, since if the smaller deficits are the result of more optimistic growth forecasts without associated spending cuts, the market is likely to view them as less credible.

Partly helping the moves for Italian assets yesterday too were the remaining September PMIs in Italy. The services reading in particular came in stronger than expected at 53.3 (vs. 52.8 expected) which helped the composite to climb 0.7pts from August to 52.4. France’s services reading also surprised to the upside (54.8 vs. 54.3 expected) – another country where the growth momentum had been questioned of late. On the other side of that Germany was revised down just over half a point to 55.9 – albeit still at solid levels – while the broader euro area composite print was confirmed at 54.1 compared to the 54.2 flash reading. That reading is consistent with growth around +0.5% qoq.

More unstable data came from the September CPI report in Turkey. The monthly reading came in at a much higher than expected 6.3% mom (vs. 3.4% expected) – beating even the highest estimate on Bloomberg by 2.2 percentage points. That in turn saw the annual rate climb from 17.9% to 24.5% and the highest since June 2003. The core reading also hit 24.1% while PPI printed at 46.2% yoy and is now the highest since 2001, or since Erdogan’s Party took power. Staggering numbers. The Turkish Lira pared heavier declines to close -1.01% weaker, a sign perhaps there is more confidence in Turkey’s central bank to react. In fairness, bonds were a lot weaker with local 10-year yields up 92bps to 18.37%. For context, our economists expect CPI to hit 27% yoy at the end of this year, so the worst is still to come.

A quick check on Asia now where what stands out the most is the broadbased selloff across currencies in the region following the one-way move for the dollar in the last 24 hours. Currencies in South Korea (-0.83%), Thailand (-0.73%), Indonesia (-0.68%), India (-0.49%) and the Philippines (-0.37%) are amongst those to see heavy falls with just the Japanese Yen (+0.16%) posting gains. That hasn’t helped equity markets in the region with the Nikkei (-0.58%), Hang Seng (-1.68%) and Kospi (-1.48%) all sharply lower. Bourses in the likes of Thailand (-0.43%) and Indonesia (-1.61%) have also tumbled while US equity futures are down -0.40%. Meanwhile bond markets have followed Treasuries.

Benchmark yields in Australia and New Zealand are +7.1bps and +4.0bps higher respectively however the relative big move has been for JGBs where 10y yields are +2.3bps higher at 0.151%, touching the highest since January 2016. So potentially on the verge of testing the BoJ’s new tolerance level for the upper limit of the band. One to certainly watch.

Back to yesterday, where earlier in the day, two FOMC voting members offered contrasting views on the outlook for rate hikes. Philadelphia Fed President Harker said “I’d just like to slow the pace” of hikes, while Chicago Fed President Evans endorsed “policy to move gradually to a mildly, moderately restrictive stance.” Additionally, Cleveland Fed President Mester, one of the committee’s more hawkish members, also said it was appropriate to raise rates gradually. Fed Governor Brainard also spoke, but did not touch on the economic or policy outlook.

Finally, over to the UK where Prime Minister Theresa May gave her speech to the Conservative Party conference. She mostly recommitted to her existing stance and maintained her Brexit plans, though she did not mention “Chequers” by name as a possible signal to her Brexiteer flank. She said the end of austerity is near and rejected a second Brexit referendum. The key challenge – finding an exit deal that is satisfactory to a majority of parliament – remains unchanged but it was a confident speech which reduces the risk of an imminent leadership battle.

Before the day ahead, after the downgrade to General Electric’s credit rating, following its $23bn goodwill write-off on Monday, Luke Templeman on my team has created a model that assesses which US and European stocks are most susceptible to goodwill write-offs. Considering US and European companies now carry record levels of goodwill, investors should see GE’s write-off as a warning sign. Stock screens are available and click here for the full report.

In terms of the day ahead, it’s a pretty quiet one for data releases. There’s nothing of note in Europe this morning while in the US this afternoon we’ll get the latest weekly initial jobless claims reading along with final August durable and capital goods orders revisions, and August factory orders data. Away from that we’ve got the ECB’s Hansson, Nouy and Nowotny all due to speak today along with the Fed’s Quarles in the afternoon. Italy’s Finance Minister Tria is due to speak again this morning while EU trade ministers are due to meet informally in Austria. All eyes on the bond moves however.

via RSS https://ift.tt/2ycqZ2E Tyler Durden

Hours after Majority Leader Mitch McConnell filed a cloture vote on the confirmation of Supreme Court nominee Brett Kavanaugh late Wednesday, a vote that would set Democrats up for an important procedural vote on Friday and a confirmation vote Saturday, the FBI has handed in to the White House its report on SCOTUS nominee Brett Kavanaugh, Reuters reported.

According to a White House spokesman, it’s expected that the White House will turn the report over to the Senate later in the day. Senators will then have the opportunity to review a single copy of the report, which will be located in a secure room, before the vote, per Bloomberg.

“All senators will be able to review the report over the next couple of days,” McConnell’s office said in a statement.

With Republicans clinging to a razor-thin 51-49 majority and five senators — including three Republicans — still waffling on their final votes, the conservative jurist’s prospects of Senate confirmation remain in doubt and could potentially depend on the files’ contents.

White House Spokesman Raj Shah pushed for a speedy vote even though senators have yet to review the report.

“Senators have been given ample time to review this seventh background investigation,” Shah said in a statement posted to Twitter. “This is the last addition to the most comprehensive review of a Supreme Court nominee in history, which includes extensive hearings, multiple committee interviews, over 1,200 questions for the record and over a half million pages of documents. With this additional information, the White House is fully confident the Senate will vote to confirm Judge Kavanaugh to the Supreme Court.”

.@WhiteHouse statement on @FBI supplemental background investigation into Judge Brett Kavanaugh:

“The White House has received the Federal Bureau of Investigation’s supplemental background investigation into Judge Kavanaugh, and it is being transmitted to the Senate. (1/3)

— Raj Shah (@RajShah45) October 4, 2018

 

With a vote looming, senators are under to make up their minds ahead of a make-or-break test vote.

 

via RSS https://ift.tt/2O0Ooi2 Tyler Durden

Authored by James Bovard, op-ed via USAToday.com,

The FBI has a history of mistakes, bias and cover-ups. It might take us beyond ‘he said, she said’ on Kavanaugh and Ford, but don’t expect too much…

After last week’s explosive congressional hearing, the Senate and the Trump administration agreed to reopen the FBI background check into Supreme Court nominee Brett Kavanaugh. Former FBI chief James Comey wrote Sunday that “the FBI is up for this” because it is “full” of “people who just want to figure out what’s true.” 

But truth has often been a scarce commodity in FBI investigations. Consider these cases stretching back decades:

• The chief of the FBI’s violent crimes section was sent to prison in 1997 for destroying a report criticizing FBI conduct in a 1992 showdown at Ruby Ridge, Idaho. A federal judge lambasted the FBI and Justice Department for misleading testimony and withholding key evidence in that landmark case.

• When a 1993 FBI tank assault against the Branch Davidians in Waco, Texas, ended in an inferno, FBI officials emphatically denied that they had any link to the fire. After it was revealed six years later that the FBI tanks had fired pyrotechnic devices during the assault, Attorney General Janet Reno sent U.S. Marshals to seize Waco-related evidence at FBI headquarters.

A history of FBI screw-ups and bias

• Solid investigations by FBI agents can vanish. A few days after the 9/11 attacks, FBI chief Robert Mueller declared that there were “no warning signs” of suspicious Arabs receiving pilot training in America — despite pre-9/11 reports by FBI agents in Phoenixand Minneapolis. Though the FBI is often venerated nowadays, a 2002 congressional report concluded that FBI incompetence and negligence helped make the United States “a sanctuary for radical terrorists.” 

• After the worst terrorism attack since 9/11 left 49 people dead at an Orlando nightclub, FBI chief Comey promised in 2016 to “leave no stone unturned” and to work “in an open and honest way, and be transparent about it.” But the federal case against the killer’s widow collapsed this March after jurors belatedly learned that the killer’s father was anFBI informant, and that there was a key falsehood in the confession produced by the FBI.

• Last January, federal Judge Gloria Navarro slammed the FBI and Justice Department for withholding important evidence in the Bundy Ranch case (including the deployment of FBI snipers around the Bundy property), leading her to dismiss all federal charges.

• In June, an inspector general report revealed that the FBI gave deference (including disregarding false statements) to Hillary Clinton’s aides during the investigation of her email server. The FBI delayed speaking to Clinton until the end of the investigation and planned to absolve her “absent a confession from Clinton.” This Looney Tunes standard for resolving the controversy might have been partly the result of visceral anti-Trump bias by some FBI officials handling the probe.

The FBI has perennially exaggerated the quality of its evidence, almost always to the benefit of prosecutors. A 1997 inspector general report found that FBI lab experts provided court testimony “that appeared tailored to the most incriminating result” involving “speculation beyond (their) scientific expertise.” A 2004 National Academy of Sciences report concluded that decades of FBI court testimony matching bullets to specific firearms in thousands of homicide cases was “unreliable” and “misleading under federal rules of evidence.”

The Washington Post reported in 2015 that flawed FBI trial testimony might have helped sentence 32 people to death. And the FBI helped convict a teenager for murder based on a DNA hair match; the defendant was released from prison 28 years later after a re-examination showed it was the hair of a dog.

FBI won’t be voice of God on Kavanaugh

Despite past pratfalls, FBI agents might be able to take the Kavanaugh controversy slightly beyond its “he said, she said” and “somebody heard something” level. Exposing contradictions between witnesses and charges could smite a few of the many doubts permeating this case. But it would be naive to view an FBI executive summary of a stack of memos recapping FBI interviews as the voice of God. 

Americans should blame bipartisan shenanigans for this FBI rush job. The Trump White House wrongfully withheld from the Senate thousands of pages of Kavanaugh’s records from the Bush White House, while Sen. Dianne Feinstein’s office may have leaked Christine Blasey Ford’s allegation just before the Senate vote on the nomination. Such chicanery almost ensures greater disdain for the Senate and the Supreme Court, regardless of the outcome of the Kavanaugh brouhaha.

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It has been roughly two months since China threatened to impose a 25% tariff on US energy imports (it eventually went back on those threats), and less than two weeks since the latest round of tariffs has been implemented. But even as China has shied away from its threats to punish the US energy industry, Reuters data are showing that imports of US oil to China have ground to a halt.

Confirming the data, Xie Chunlin, the president of China Merchants Energy Shipping Co, said on Wednesday that crude oil shipments to China have “totally stopped” as the trade war has taken its toll, reversing growth in what had been a rapidly expanding market for US shale producers.

“We are one of the major carriers for crude oil from the U.S. to China. Before (the trade war) we had a nice business, but now it’s totally stopped,” Chunlin said on the sidelines of the Global Maritime Forum’s Annual Summit in Hong Kong.

“It’s unfortunately happened, the trade war between the U.S. and China. Surely for the shipping business, it’s not good,” the CMES president said.

He also said the trade dispute was forcing China to seek soybeans from suppliers other than the United States, adding that China now bought most its soybeans from South America.

In place of US imports, China, which is the world’s largest importer of crude oil, is becoming increasingly reliant on the Middle East and Russia while it has also shifted to using Iranian tankers to bypass impending US sanctions on Iranian crude while also becoming more reliant on Iranian crude in general. But while it’s grabbing the most headlines right now, the trade fight is hardly the only source of contention between US oil producers and China, as China’s yuan-denominated crude futures contracts are beginning to show their teeth.

To be sure, China was never heavily reliant on the US as a source of crude oil. During 2017, Russia and Saudi Arabia were the two biggest suppliers of crude sent to Chinese refineries (data courtesy of World’s Top Exports).

• Russia: US$23.7 billion (14.6% of China’s total crude oil imports)
• Saudi Arabia: $20.5 billion (12.6%)
• Angola: $19.8 billion (12.2%)
• Iraq: $13.8 billion (8.5%)
• Oman: $12.2 billion (7.5%)
• Iran: $11.9 billion (7.3%)
• Brazil: $8.8 billion (5.4%)
• Kuwait: $7.1 billion (4.4%)
• Venezuela: $6.6 billion (4%)
• United Arab Emirates: $4.1 billion (2.5%)
• United Kingdom: $3.6 billion (2.2%)
• Congo: $3.44 billion (2.1%)
• Colombia: $3.37 billion (2.1%)
• United States: $3.2 billion (2%)
• Malaysia: $2.6 billion (1.6%)

However, the US has been China’s fastest-growing supplier of crude, with imports from the US up nearly 2,000% since 2016 (though to be sure, the US only started exporting oil in 2016, and by volume, imports from Russia and Saudi Arabia have risen by a much more significant degree):

• United States: Up 1,994% since 2016
• Malaysia: Up 220.9%
• United Kingdom: Up 101.1%
• Congo: Up 60.5%
• Colombia: Up 51%
• Kuwait: Up 46.4%
• Brazil: Up 46.2%
• Angola: Up 42.9%
• Venezuela: Up 42.8%
• Russia: Up 40.6%
• Saudi Arabia: Up 31.7%
• Iraq: Up 29.3%
• Iran: Up 27.2%
• Oman: Up 9.1%
• United Arab Emirates: Up 6.1%

But the worry here is, again, that the escalating trade battle with China will spill over into an all out trade war with the US on one side and the rest of the world on the other. Such a development could see foreign economies blackball US crude – and the possibility that trade tensions could persist might be enough incentive for foreign refineries to look elsewhere. What’s worse all of this is happening just two years after the US allowed crude producers to begin exporting after a more than 30-year ban. 

And while these tensions have done little to slow the rally in crude prices, they could see the spread between WTI and Brent crude continue to widen.

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The fallout from the Danske Bank money laundering scandal has rattled the European financial system as $235 billion that flowed through the bank’s tiny Estonian branch – an amount that dwarfs the Baltic nation’s GDP – has been deemed by the bank’s auditors to be suspicious.

And while that might seem like a staggering sum and raise questions about how regulators on the Continent managed to overlook this, the full scale of the money laundering that took place in the Baltics is even more staggering. According to data provided to Bloomberg by the Estonian central bank in Tallinn, Estonian banks handled about 900 billion euros, or $1.04 trillion, in cross-border transactions – a figure that includes the highly suspect non-resident flows – between 2008 and 2015. The central bank added that it wouldn’t be fair to say that all – or even the majority – of these non-resident flows would constitute money laundering. But then again, the notion that these foreign individuals and investors would choose to run such a large sum of their money through Estonia for explicitly legitimate purposes is difficult to swallow.

“The fact that other banks may be conducting their business in a similar way hardly detracts from Danske’s guilt,” said Mark Galeotti, an organized crime expert and senior researcher at the Prague-based Institute of International Relations.

With the echoes of the liquidation of ABLV, formerly the third largest bank in Latvia, still reverberating through the Baltics (the bank collapsed after it was caught laundering money for North Korea, eliciting a “death penalty” sanction from the US Treasury), Bloomberg published a story on Wednesday highlighting the fact that money laundering by non-residents isn’t just endemic to Estonia – it has endemic to the entire Baltic region (and possibly all of Europe).

One sign that illicit banking has been on the rise in the Baltics is that the share of dollar-denominated flows as a portion of all non-resident flows has been on the rise. The problem with handling dollars is that they require a third-party correspondent bank to become a party to the transaction. Because these banks can also be found liable for facilitating illicit transactions – and AML controls in the US banking system, while imperfect, are widely considered the strongest in the world – criminals often prefer to transact in euros (or better yet, Swiss francs). Indeed, several US banks raised the issue of non-resident flows through Danske’s Estonian branch, and, when they were ignored, refused to continue clearing these transactions for Danske.

Given the deluge of embarrassing headlines that have been generated by the Danske scandal, there’s little doubt that the regulatory scrutiny from regulators in Europe, London and the US will make it virtually impossible to launder dirty money through Baltic Banks. But anybody who thinks this will ultimately put a stop to money laundering in Europe is being naive. Because as one compliance expert told Bloomberg, these regulatory holes exist throughout Europe.

John Horan, senior associate at Maze Investigation, Compliance and Training Ltd. in Belfast, says money laundering is a Europe-wide problem. “I’ve worked on AML in the Baltic states, and I haven’t seen anything worse there than I’ve seen elsewhere,” he said.

While it might be briefly disruptive, dark money will almost certainly continue to flow through the European banking system like sand through a sieve.

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After a thorough investigation which included consultation with NASA, Russia is now pointing the finger to deliberate sabotage as causing a hole that created a dangerous oxygen leak on the International Space Station (ISS).

Dmitry Rogozin, the head of Russian space agency Roskosmos, said on Monday that an official investigative report had confirmed their prior theory: “It concluded that a manufacturing defect had been ruled out which is important to establish the truth,” he said. 

Damage to the craft first uncovered in late August while it was anchored to the International Space Station (ISS) alarmed engineers and raised suspicion of foul play — a possibility at first thought remote — but an air leak was initially thought to be the result of a micrometeorite colliding with the vessel.

Concerning the drill hole, the Russian space agency chief continued, “Where it was made will be established by a second commission, which is at work now.” The agency is now actively seeking the person or persons responsible for drilling the hole. 

A report of the new findings in Yahoo news summarizes of prior suggestions that it was a mere accident or assembly defect:

Now it appears that isn’t the case, and that the hole was created specifically to cause problems for the crew. Who created it remains to be seen, but the Russian space agency is clearly taking this all incredibly seriously and whoever was responsible will likely face some incredibly stiff punishment.

An initial inquiry from early September, related in Russian media, had described the possibility of a “reckless assembly worker” reported to have made a manufacturing error that had possibly opened up further once in space. However, the latest formal investigation reveals the Russians believe the damage is far beyond a mere manufacturing error, and have thus dismissed the idea that it was accidental or an assembly error. 

Previously a Russian space program source described to TASS news agency that “There are drilling traces not only inside the living module [of the ISS], but also on anti-meteorite plates.”

These plates have been described in media reports as “mounted outside of the station’s hermetic hull”. “The one who made the hole in the hull passed straight through it and the drill head hit external non-hermetic protection,” the TASS source explained. “The top of the drill came through the pressure hull and hit the non-gas-tight outer shell.”

Officials now hope that a secondary investigation will locate a suspect or suspects responsible. The investigation will continue even as Russian media in some instances has speculated on sensational claims that American astronauts secretly sabotaged the Russian vessel docked at the space station; however, such an act could have potentially caused danger to the entire ISS including the American sectors as well. 

A prior statement between the Russian space chief and NASA Administrator Jim Bridenstine had attempted to calm widespread speculation and accusations of foul play: “The Administrator and the General Director noted speculations circulating in the media regarding the possible cause of the incident and agreed on deferring any preliminary conclusions and providing any explanations until the final investigation has been completed,” the statement read. 

And further, the NASA statement said of Russia-NASA cooperation: “They affirmed the necessity of further close interaction between NASA and Roscosmos technical teams in identifying and eliminating the cause of the leak, as well as continuation of normal ISS operations and NASA’s ongoing support of the Roscosmos-led Soyuz investigation.”

NASA has denied the possibility that Americans could have had anything to do with it. However, this latest turn certainly adds suspense to an already very bizarre saga playing out dangerously in space. 

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Authored by Aleksandar Pavic via The Strategic Culture Foundation,

Although the September 30, 2018 name-change referendum in Macedonia, which was supposed to set that ex-Yugoslav federal republic on a path to (certain) NATO and (blithely promised but much less certain) EU membership, failed miserably, with only 36.91% of the voters turning out, well short of the 50% + 1 necessary for it to be valid – one would never know it from the reactions of its Western proponents and impatient beneficiaries. Indeed, a new term may be needed to adequately describe the reactions of the key pillars representing the reliquiae reliquiarum of the Western-led post-Cold War unipolar moment. Fake news simply doesn’t do them justice. Fake reality anyone?

The US State Department was firmly in denial, releasing the following statement: 

“The United States welcomes the results of the Republic of Macedonia’s September 30 referendum, in which citizens expressed their support for NATO and European Union (EU) membership by accepting the Prespa Agreement between Macedonia and Greece. The United States strongly supports the Agreement’s full implementation, which will allow Macedonia to take its rightful place in NATO and the EU, contributing to regional stability, security, and prosperity. As Macedonia’s parliament now begins deliberation on constitutional changes, we urge leaders to rise above partisan politics and seize this historic opportunity to secure a brighter future for the country as a full participant in Western institutions.”

EU Commissioner for European Neighborhood and Enlargement Negotiations Johannes Hahn wasn’t to be outdone in his contempt for the 63% of the Macedonian “deplorables” who stayed home in order to voice their disagreement with renouncing their perceived national identity and country name (it was to become “Northern Macedonia”) in exchange for the double joy of a) becoming NATO’s cannon-fodder in its increasingly hazardous game of chicken with Russia and b) the EU’s newest debt-serfs: 

“Referendum in Macedonia: I congratulate those citizens who voted in today’s consultative referendum and made use of their democratic freedoms. With the very significant “yes” vote, there is broad support to the #Prespa Agreement + to the country’s #Euroatlantic path. I now expect all political leaders to respect this decision and take it forward with utmost responsibility and unity across party lines, in the interest of the country.” 

He was seconded the following day, in a joint statement, by Federica Mogherini, High Representative of the EU for Foreign Affairs and Security Policy and Vice President of the EU Commission.

Understandably, as the most direct public stakeholder, NATO Secretary General Jens Stoltenberg was particularly (hyper)active. As the disappointing results began to roll in, Stoltenberg went into immediate damage control, tweeting: 

“I welcome the yes vote in Macedonia referendum. I urge all political leaders & parties to engage constructively & responsibly to seize this historic opportunity. #NATO’s door is open, but all national procedures have to be completed.” 

He reinforced his delusional missive the next day, releasing a similar statement co-signed by EU President Donald Tusk. And the day after, during a news conference, Stoltenberg even offered lightning-quick NATO accession to the unwilling Macedonians – January 2019, to be exact – if they would just be so kind as to urgently implement the very agreement that they had just so emphatically rejected. When NATO says it promotes democratic values – it means it!

But that wasn’t the end of the “democracy mongering” surrounding what may well prove to be NATO’s, the EU’s and the rest of the end-of-history West’s Balkan Waterloo. For example, the EU Parliament’s Group of the Progressive Alliance of Socialists and Democrats, although “regretting that the turnout was less than 50%,” nevertheless hailed the referendum’s results and “call(ed) on the opposition to respect the expressed will of the majority [sic] of voters.”

The Group’s leader, Udo Bullmann, while also maintaining that, somehow, a voter turnout of under 37% still represented a “majority,” additionally used the occasion to chastise Macedonia’s President for having the nerve to call for a boycott of the referendum (he committed the crimethink of referring to it as “historical suicide” during his UN General Assembly address), as well as to decry – what else? – “reports about Russian interference in the electoral process.”

It goes without saying that Bullmann offered absolutely zero proof for his assertion. On the other hand, according to numerous media reports, as September 30 approached, while no high Russian official was to be seen anywhere in the vicinity, a veritable procession of Western political bigwigs made the pilgrimage to Skopje in order to reveal to the natives their “true” best interests: Sebastian Kurz, “Mad Dog” Mattis, the indefatigable Stoltenberg, Federica Mogherini, Johannes Hahn, Angela Merkel. No meddling there, obviously…

Speaking of Angela Merkel, she also joined her fellow Western democrats’ show of unanimous disdain for the Macedonian voters’ majority opinion, urging the country to “push ahead” with the implementation of the majority-rejected accord, citing voters’ “overwhelming support” [sic], and arguing through the mouth of her spokesman that the required 50% + 1 turnout was actually “very high,” as voter registers purportedly included many people who had long since left the country.

Coincidentally (?), the same argument was used by Greek Foreign Minister Nikos Kotzias, who opined that the “yes” votes cast in the referendum do, in fact, “represent the majority despite the low turnout because Macedonia does not have the 1.8 million voters entered into its electoral rolls but just 1.2 million since 300,000 people have left the country since the voter lists were last updated 20 years ago.” The fallacy of his reality-challenged claim is easily exposed if we just take a glance at the results of Macedonia’s last parliamentary elections (December 2016), in which voter turnout was just under 1.2 million (1,191,832 to be exact) or, officially, 66.79%. If we were to believe Kotzias and Merkel (who lodged no objections at the time), that would have meant that the turnout for the 2016 elections had been 99% – a figure that would make any totalitarian dictator blush with envy. On the other hand, since those elections did produce the “desired result,” enabling the current heavily pro-NATO/EU government led by Zoran Zaev to be formed, that automatically made them “valid” in the eyes of the high priests of democracy in Brussels, Berlin, London and Washington.

Needless to say, Zaev joined his Western patrons’ charade, hailing the referendum as a “democratic success,” and announcing that he would seek the Macedonian Parliament’s support to amend the constitution and get the agreement with Greece ratified (according to the so-called Prespa Agreement, the Macedonian Parliament must adopt the necessary constitutional amendments by the end of 2018) so that the Greek Parliament can do the same, which would seal the deal. However, Zaev and his Albanian political partners are currently well short of the necessary two-thirds majority (reportedly, they can count on 71 deputies, or 9 short of the needed 80), and will have to call early elections if they don’t soon succeed in securing it.

Yet, let it not go unsaid that Zaev was singing a rather different tune prior to the referendum, assuring that “citizens will make the decision,” and that Parliament would vote on the necessary constitutional changes only if the referendum is successful. But that was then, when confidence was still high that the usual combination of Western pressure, money and overwhelming domination of the media spectrum would get the job done. And then reality struck on September 30…

Still, amidst all the faux cheer and public displays of confidence of the pro-NATO/EU crowd, a palpable sense of unease hangs in the air. As a Deutsche Welle opinion piece put it, the “low voter turnout for Macedonia’s referendum is a bad starting point for the country’s future development.” And, according to DW in Serbian, a Frankfurter Allgemeine Zeitung commentary warned that “politicians who otherwise ceaselessly talk of democracy as a ‘special value’ should not call on the parliament in Skopje to accept the voting results.” In other words, Macedonia’s people (read – a large majority of the majority Slavic population) have “voted with their feet” and rejected the agreement, and no new parliamentary election, no matter the results, can change that unpleasant-but-immutable fact. That alone will delegitimize any Western-led effort to “manufacture consent” by ramming the agreement through the present or future Parliament – although, as we know, NATO doesn’t put too much stock in referenda anyway, while the EU is not averse to making citizens vote as many times as needed to obtain the “right” result.

But the West has lost more than just legitimacy in Macedonia – it has damaged its reputation, perhaps irretrievably. In the words of former presidential advisor Cvetin Chilimanov,

“The West has humiliated us… Macedonians have rejected this media, psychological, political and propaganda aggression against the people, and that’s the tragedy of these days, that a large percentage of a people that had been genuinely oriented towards the West has changed its mind and stopped looking at the West as something democratic, something progressive and successful… That is the reason for the boycott. Pressure was applied against Macedonia, a country that had always been open to ties with the West, but which did not want to make this disgusting compromise and humiliate itself before the neighboring countries, before Western countries. We did not understand why that humiliation was needed so that we might become a member of Europe. What’s worst, perhaps that is now the thinking of a silent majority of the people, that they won’t forget this insult and this attack on Macedonia.” 

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China is developing a dual-purpose laser-equipped low-Earth orbit satellite. The program was launched earlier this year, is aimed at increasing Chinese surveillance of maritime traffic and unparallel anti-submarine warfare detection in the world’s oceans.

Project Guanlan, meaning “watching the big waves,” was launched in May at the Pilot National Laboratory for Marine Science and Technology in Qingdao, a city in eastern Shandong Province on the east coast of China, said South China Morning Post.

It is an ambitious project that the US and Russia have failed to acquire fully. China aims to boost its surveillance activities in the South China Sea, East China Sea, Yellow Sea, Sea of Japan, and the Phillippine Sea, according to the laboratory’s website.

Researchers are currently working on the satellite’s design at the laboratory, but its lasers and internal components are being developed by 20 research institutes and universities across the country.

Song Xiaoquan, a researcher involved in the project, said if the program is successful, it will enable China to surveil the upper layer of the Ocean.

“It will change almost everything,” Song said.

For several decades, countries around the world have been trying to develop a device to detect submarines using LIDAR (light detection and ranging) technology. Both the US and Russia have tools that can recognize submarines 300 feet below the surface of the sea. But this is not enough, as most superpowers have subs that operate at depths of 1,600 feet.

Recently, NASA and Defence Advanced Research Projects Agency funded projects that could see submarines up to 600 feet below the surface — but still nowhere close to the 1600 feet target zone.

Lasers that penetrate 1,600 feet depth remain a pipedream for major superpowers. China is attempting to realize this dream.

Once Project Guanlan’s laser components are assembled. A pilot test of the device could be mounted on a spy plane as well as surveillance satellites.

Shooting a laser beam from space has been difficult as the beam tends to degrade in the atmosphere and various layers of the ocean. Sunrays do not go more than 600 feet deep in the oceanic water.

Once completed, Project Guanlan could be manufactured by the Xian Institute of Optics and Precision Mechanics, Chinese Academy of Sciences in Shaanxi province.

Zhang Tinglu, another fellow researcher, involved in the project, said the primary obstacle for the satellite was the thermocline, a thin layer of water where the temperature changes abruptly, which degrades the effectiveness of the laser.

Tinglu declined to elaborate on the future of the satellite but noted that thermocline is known to be important for submarine captains because it can reflect active sonar and other acoustic signals. That means a sub could potentially avoid detection in the thermocline, but not by a laser beam.

Song, Tinglu, and or the lab did not give the South China Morning Post any indication as to when the laser will be completed. Song did say the team has been under pressure. “There’s still heaps of problems that we need to solve,” he added.

Since President Xi Jinping took office in 2013, China has been investing heavily in military hardware, including anti-submarine technology, as it militarizes the South China Sea.

With the possible development of Chinese lasers in low-Earth orbit detecting American and allied subs in oceanic waters could be a game-changer in geo-strategic one-upmanship competition as the new Cold War between US-China is a major theme for 2020 and beyond.

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Attorneys representing Christine Blasey Ford sharply condemned the FBI background investigation into Supreme Court nominee Brett Kavanaugh late Wednesday, after the agency signaled that their probe was over without interviewing Ford, and Senate Majority Leader Mitch McConnell filed for a Friday cloture – a key procedural vote that will pave the way for Kavanaugh’s final confirmation.

BREAKING: Senate Majority Leader McConnell files cloture to continue Senate confirmation process for Judge Kavanaugh, setting up debate, followed by weekend voting on the nomination. pic.twitter.com/d4XwBVK8KF (NBC News)

— Frank Macek, WKYC Sr. Director (@frankmacekwkyc) October 4, 2018

“An FBI supplemental background investigation that did not include an interview of Dr. Christine Blasey Ford– nor the witnesses who corroborate her testimony– cannot be called an investigation,” said Ford’s attorneys in a statement. “We are profoundly disappointed that after the tremendous sacrifice she made in coming forward, those directing the FBI investigation were not interested in seeking the truth.”

Two senators on the Senate Judiciary Committee told Fox News on Wednesday that they’ve been instructed to plan on voting Sunday. 

Sources previously told Fox News that Senators and some aides would be able to start looking at the FBI’s background investigation on Thursday morning and that Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, and committee member Sen. Dianne Feinstein, D-Calif., would be given the first chance to look at the report.

The bureau’s investigation, ordered last week by President Trump, was designed to look into allegations of sexual misconduct leveled at Kavanaugh, who has been accused by three women of separate alleged incidents. Christine Blasey Ford, the first woman to come foward, testified before the Senate Judiciary last week about her claims. Kavanaugh has denied the allegations against him. –Fox News

McConnell statement on cloture: pic.twitter.com/g8T4wWQQbc

— Alex Leary (@learyreports) October 4, 2018

On Wednesday night, President Trump tweeted: “Wow, such enthusiasm and energy for Judge Brett Kavanaugh. Look at the Energy, look at the Polls. Something very big is happening. He is a fine man and great intellect. The country is with him all the way!” 

Wow, such enthusiasm and energy for Judge Brett Kavanaugh. Look at the Energy, look at the Polls. Something very big is happening. He is a fine man and great intellect. The country is with him all the way!

— Donald J. Trump (@realDonaldTrump) October 4, 2018

Earlier Wednesday we reported that the FBI was essentially finished with their supplemental report on sexual misconduct allegations against Supreme Court nominee Brett Kavanaugh, after which they will send a single copy to Capitol Hill where it will be held in a Senate Judiciary Committee safe, two senior Senate sources told Fox News. 

***

Senate Democratic Whip Dick Durbin (Il), a member of the Judiciary Committee, said that preparations are underway to review the report on Thursday, while Republicans are putting strict limits on the viewing. 

According to Durbin, the one copy will be taken from the safe and made available to senators – with each party taking turns viewing it in one-hour increments. 

“Get this — one copy! For the United States Senate,” he said. “That’s what we were told. And we were also that we would be given one hour for the Dems, one hour for the Republicans. Alternating.

“We tried to reserve some time to read it. That is ridiculous,” he said. “One copy?!”

“Bizarre, it doesn’t make any sense,” he added. –The Hill

A senior Democratic aide confirmed the restrictive viewing conditions to The Hill, which notes that if all 100 senators decide to review the document and it takes each senator 30 minutes to read it, it could take up to 50 hours for the entire chamber to examine it. 

“Do the math,” said Durbin. “That’s a lot of time.”

Senator Bob Corker (R-TN) says that Senators will be able to view the FBI report in the “secure compartmented information facility” in the Capitol Visitor Center, which is large enough to hold a large group of senators. Corker has urged Senate Judiciary Committee Chairman Chuck Grassley (R-IA) to make several copies. 

Republican aides, however, say that alternating a single copy of an FBI background report between parties is typical practice for judicial nominees. 

Judiciary Committee Republicans on Tuesday tweeted out a 2009 memorandum of understanding stating that photocopying or other reproduction of the FBI background reports is prohibited.

It also states that notes and memoranda derived from the contents of the FBI background investigation reports may be made and shall be destroyed or secured in the same manner as the reports themselves.

Reports are considered confidential Senate Judiciary Committee documents and unauthorized disclosure of them is subject to punishment under the Senate rules. –The Hill

It is unclear whether any of the FBI report will be made public, however Senator John Thune (R-SD), the third-ranking Republican in the Senate, told Fox News that “some of it will probably make its way out into the public and into the mainstream.” 

“But most importantly, at least right now, is that all senators who are going to have the responsibility to vote on this nomination have an opportunity to review it, assess it and come to their own conclusions about what’s in there.”

And regardless of what the FBI concludes, we anticipate it won’t satisfy Democrats, who are already up in arms over the fact that the agency didn’t interview Kavanaugh accuser, Christine Blasey Ford or Kavanaugh as part of the probe, with sources saying that their congressional testimony last week was sufficient. 

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