Month: November 2019

For a one-issue party that isn’t even one-year-old yet, the Brexit Party is having an outsize impact, polling alongside established parties, and now emerging as a critical powerbroker.

Nigel Farage’s Brexit Party emerged as the star of the spring’s EU Parliament vote. And now that a general election is a certainty, the Brexit Party is launching its campaign with much fanfare, but little information about how many candidates it will field.

That’s critically important: Late last month, reports emerged claiming that Farage would throw Boris Johnson, his ally from the Leave campaign, a bone by pulling candidates in hundreds of Tory districts who would risk splitting the vote and elevating Jeremy Corbyn to No. 10. Downing Street.

The campaign launch comes one day after the “do or die” Brexit deadline of Oct. 31, which Farage had earlier mocked.

Reporters will be watching to see if Farage does strike a deal with Johnson, or if the Brexit Party goes up against the Tories in hundreds of districts across the country.

Watch the Brexit Party campaign launch with Farage below:

It’s almost like the market is treating a Bloomberg report claiming senior Chinese officials harbor serious doubts about the feasibility of a trade deal as if the report wasn’t credible – something we suggested yesterday when we speculated that the report could be a plant to push the Fed toward more rate cuts. 

Already, markets are shaking off Thursday’s modest losses as futures trade higher on a batch of strong Chinese economic data overnight, and now, the SCMP has followed that up with some trade news that reads as if yesterday’s negative reports never happened. According to the SCMP, Beijing is already taking steps to hold up its end of the “Phase One” bargain – that is, stabilize the yuan after a long slide – by preparing to sell some $4 billion in assets in Hong Kong. 

Selling a huge pile of short-term securities will drive up short-term borrowing rates and make it more expensive for speculators to short offshore yuan.

That auction won’t take place until next week, per the SCMP.

The latest move, announced on Friday by the People’s Bank of China (PBOC), will see a total of 30 billion yuan (US$4.3 billion) in yuan-denominated securities sold in Hong Kong next week.

This a widely used method to push up investors’ borrowing costs, making it more expensive for speculators to bet that the yuan will fall.

The auction on Thursday will include 20 billion yuan (US$2.8 billion) of three month securities and 10 billion yuan (US$1.4 of one-year securities.

The report dropped just ahead of a planned Friday phone call between the US and Chinese trade delegations. The call was scheduled to plan a new location for the next round of trade talks, where “Phase One” is supposed to be finalized.

The announcement came just ahead of a planned phone call between the top US and Chinese trade negotiators later on Friday to continue efforts to finalise the details of the interim trade pact. Among other things, the two sides are likely to discuss a new venue for the signing of the deal after the sudden cancellation of the Asia-Pacific Economic Cooperation meeting in Chile disrupted the previous arrangement for Chinese President Xi Jinping and his US counterpart Donald Trump to meet on November 17.

According to SCMP, Beijing’s recent steps to stabilize the yuan suggest that a deal is possible, and that the leadership are taking it seriously. After all, it would improve the chances of the US removing its currency manipulator designation from China, something the Treasury imposed over the summer after the yuan broke below 7 to the dollar.

But as one economist pointed out, it would be hard for Beijing to move the yuan too far thanks to a capital-outlow pressure.

Zhou Hao, a senior economist at Commerzbank in Singapore, said market sentiment on the yuan had improved, resulting in a repositioning of its outlook.

“The fear of a rapid yuan depreciation is gone,” he said. “Instead, there is a likelihood that the yuan will strengthen towards 7 once a deal is announced.”

Beijing may repledge to avoid a competitive devaluation and market intervention, but it would be hard to push up the exchange rate significantly owing to continuing Chinese capital outflow pressure, Zhou added.

“An annual two-way fluctuation of 3 to 5 per cent could be acceptable [to Chinese authorities]”, he predicted.

The yuan rose 1.5% vs. the greenback in October, but it’s still down 2.3% so far this year.

After being labeled a currency manipulator by the Treasury, PBOC Governor Yi Gang told the IMF in Washington last month that the yuan exchange rate remained stable, and that there is growing market acceptance of two-way exchange rate fluctuations.

“Judging both from economic fundamentals and from market supply and demand, the [yuan] exchange rate is at an appropriate level,” he said.

We suspect we’ll be seeing more negative reports about the trade negotiations, even if they’re swiftly followed with positive reports like this on, now that the Fed is trying to end its rate cut program. Perhaps President Trump believes that sabotaging his own trade deal is now his best bet for convincing the Fed to bring rates back to zero?

A powerful storm swept through the Mid-Atlantic and Northeast overnight in a spooky fashion, producing 50 mph gusts, damaged powerlines, and has left more than a half-million customers without power on Friday morning.

Approximately 613,00 customers, with the bulk of the power outages in New York (216,00), Pennsylvania (202,00), Connecticut (84,000), Virginia (63,000), and Maine (48,000) were left without power after severe thunderstorms produced damaging winds and torrential rainfall across the Mid-Atlantic and Northeast on Thursday night, the National Weather Service (NWS) reported. 

Residents in the Baltimore–Washington metropolitan area were placed under a tornado watch on Halloween evening through midnight. There were no reports of any tornadic activity, though powerful winds up to 50 mph knocked out power to 20,000 customers as of 5:30 am est. Friday. 

A Tornado Watch is in effect for the area until midnight. A squall line will move through quickly from west to east late this afternoon and evening. Have a way to receive NWS Warnings and seek shelter before storms arrive. See map for more details. pic.twitter.com/qkeNoK7OYL

— NWS DC/Baltimore (@NWS_BaltWash) October 31, 2019

Tornado advisories were also published for parts of Pennsylvania, New Jersey, Virginia, and North Carolina.

Bloomberg notes that winds up to 79 mph were recorded in Mount Mansfield, Vermont, as the storm swept through late Thursday night, canceling plans for many who were attempting to trick or treat.

According to NWS Weather Prediction Center College Park MD, the dangerous storm that swept through overnight will give way to “cold high pressure over the Lower Mississippi Valley/Tennessee Valley will move into the Mid-Atlantic by Friday evening.” 

As November begins, many are wondering what Old Man Winter has in store for North America. Weather reports from Reuters’ commodity desk suggest a “cold season” for many parts of Central and Northeast US.

“North America (winter wheat): The North America winter outlook suggests a cold season across the central/northern US. If this scenario develops, it would point toward elevated winterkill risks for winter wheat, though deeper snow cover than normal could offset the risks. The US Plains in particular show the potential for a cold but wet winter, which might allow snow coverage to protect the Hard Red Winter (HRW) wheat crop, while drier conditions farther east may put the Soft Red Winter (SRW) wheat crop at higher winterkill risk.”

Figure 8: Composite precipitation anomalies (mm) from the top December-February analogs based on the leading ENSO forecast indicators (via Reuters) 

Figure 9: Composite temperature anomalies (°F) from the top December-February analogs based on the leading ENSO forecast indicators (via Reuters) 

Winter is coming… 

Authored by Mike Shedlock via MishTalk,

The anti-Brexit People’s Vote campaign has disintegrated in to an open feud among 9 sub-groups.

People’s Choice Civil War

The People’s Vote campaign has disintegrated.

Eurointelligence calls it a Civil War.

The second referendum campaign – or the People’s Vote as they euphemistically call themselves – had a very bad day. The infighting that has been going on under the surface erupted into the open amid a classic power struggle. The so-call People’s Vote is a coalition of nine organisations with different aims. One of the PV’s ringleaders is Roland Rudd, the brother of Amber Rudd, and one of the leaders pro-Remain campaigners in 2016. He is the head of Open Britain, one of the organisations behind the PV campaign. He fired two people over the weekend: the head of communications and the campaign director. But they refused to go, challenging Rudd’s right to dismiss them. They are backed by Alistair Campbell, Tony Blair’s former enforcer. There was a staff walk-out yesterday as the whole thing descended into chaos.

So, what is this about?

The two men dismissed by Rudd wanted to keep the PV campaign on the straight and narrow by focusing on the second referendum. Others want the PV to become a vehicle to revoke Brexit by whichever means possible. The split in the PV campaign is the counterpart of what is happening on the opposition benches in the UK parliament. The LibDems no longer back a second referendum, and have switched their strategy to full-on support for Brexit revocation. Labour’s official position is to hold a second referendum after it negotiates a customs union deal with the EU.

We noted a comment on Twitter yesterday that the PV is not really about Brexit but about its supporters’ grip on power. It is the crowd that used to run the country. When they started to win their big political battles in the mid-to-late 1990s, they thought they had defeated the Thatcherite right forever. To them Brexit came as a complete shock for which they were ill-prepared in 2016. We noted at the time that they never reflected on the deep causes of their defeat, and moved on seamlessly to the second referendum campaign.

This is contrary to the pro-Remain agenda of Eurointelligence. Yet, they discuss it.

Most of the the pro-Remain mainstream media does not want to discuss such events.

Amber Rudd Stands Down

The Guardian Live Blog noted “Amber Rudd and David Lidington, respectively the ex-home secretary and Theresa May’s former de facto deputy, have both announced they are among an increasing number of sitting MPs who will quit at the coming election.”

‘An honour, not a right’ – Tory chief whip tells Amber Rudd why she can’t have whip restored as she quits.

🚨 BREAKING 🚨

Chief whip Mark Spencer tells Amber Rudd she WONT be getting the Tory whip back.

Tells her he doesn’t trust her not to turn on Boris Johnson again.

‘Receipt of the whip is an honour, not a right and it cannot be discarded or returned at will.’ pic.twitter.com/B2oKXTIfcF

— Jack Doyle (@jackwdoyle) October 30, 2019

Remainers standing down or having their party affiliation revoked is good news.

Good riddance. And …

Good Riddance to Speaker Bercow

I’m hearing the election for Speaker will go ahead on Monday – largely because it is seen as impractical to wait until after the election, because it would then take too long to get a Speaker in place, when Parliament May have to move rather quickly

— Mark D’Arcy (@DArcyTiP) October 30, 2019

Lots of good news today for Boris Johnson including news of a Farage-Tory Alliance.

There’s nothing like being born into a family of privilege: just ask Hunter Biden, for instance. 

Teddy Obiang, the the son of a West African dictator, knows this well. And Obiang, judging by the assets he has had confiscated from him over the last decade, likes the “finer things in life” and has no trouble paying for them, according to Bloomberg.

Obiang is the son of President Teodoro Obiang Nguema Mbasogo and is the first Vice President of Equatorial Guinea, a nation flush with oil resources. And Obiang’s run ins with Swiss authorities as a result of a recent corruption probe have not stopped him from flaunting his latest prized possessions and adventures on his Instagram account.

On June 11, for instance, he posted two men helping him out at a clothing store while he inspected a garment. The photo also includes tea service.

Just one week later, he posted photos of himself snorkeling in what looks like Caribbean waters. On August 29, he posted a photo of himself on a boat off the Capri coast. 

Earlier this month, Swiss authorities brought to a close a years long corruption probe into Obiang. It ended with the auction of more than two dozen supercars that once belonged to him. The cars, including a Bugatti Veyron, Rolls-Royce Phantom, Lamborghini Veneno and Koenigsegg One, netted $27 million. 

Equatorial Guinea argued that the cars belonged to a state-owned company.

Human Rights Watch says that corruption in Obiang’s country has siphoned money from social programs. It also said that two superyachts that Obiang uses are worth a combined $250 million. The yachts, including the 250-foot “Ebony Shine” and 300-foot “Ice” were recently located off the Italian Riviera.

Meanwhile, Equatorial Guinea recently told a Swiss court that the yachts are “state property”, despite the entities owning the boats being controlled by Obiang. 

Ken Hurwitz, senior counsel for the Open Society Justice Initiative said: “Governments don’t like him but they don’t want to make too much of an enemy of Equatorial Guinea. Most of the oil is still controlled by American companies.”

In 2014, Obiang reached a settlement with the U.S. Department of Justice to relinquish more than $30 million in assets, including a hilltop mansion in Malibu.

U.S. Assistant Attorney General Leslie R. Caldwell said in 2014: “Obiang shamelessly looted his government and shook down businesses in his country to support his lavish lifestyle, while many of his fellow citizens lived in extreme poverty.”

In France in 2017, Obiang was convicted in absentia of embezzlement. A Paris court ordered more than $110 million in assets to be seized, including a mansion near the Champs-Elysees. Obiang avoided jail time as the court handed down a 3 year suspended sentence. His lawyers argued he had “diplomatic immunity and that the property served as Equatorial Guinea’s embassy.”

Brazilian authorities stopped Obiang at an airport last year, reportedly seizing 20 watches worth $15 million and more than $1.4 million in cash. They returned $10,000, the maximum that can be brought into Brazil undeclared. 

The secretary of Equatorial Guinea’s embassy in Brazil said “the watches were for personal use and the cash was to be used on a subsequent trip to Singapore.”

Despite the seizures, Obiang has been able to keep his Gulfstream jet (which will be seized if he ever returns to the U.S.) and $1 million in Michael Jackson memorabilia, including a sequin-encrusted glove.

Equatorial Guinea’s GDP has rocketed more than 5,000% since the discovery of oil in the country in 1996. It makes the 28,000 square mile country the third richest in Africa, per capita. Oil made up 80% of the country’s fiscal revenue in 2015, but the Obiangs have said that they’re using the newfound wealth to improve the lives of their citizens. 

But the distribution of the wealth tells a different tale. More than half of the country’s children under 5 years old lack access to adequate food and about 9% of youngsters in the age group die, according to a 2017 UNICEF report. The average life expectancy in the country is just 58, compared to 66 in neighboring Gabon.

Meanwhile the country recently sought – and was granted – a $700 million loan from the IMF to bolster its currency. An IMF spokeswoman said: “The IMF has supported the authorities’ efforts to devise a national strategy to improve governance and fight corruption through the preparation of a report on governance.”

Sarah Saadoun, a corruption researcher at Human Rights Watch said: “If they just sold those two yachts, they’d have a third of their loan request.”

Authored by Joeri Cant via CoinTelegraph.com,

German banks have presented a position paper in which they make several arguments for the digital euro.

On Oct. 30, in a paper released by the Association of German Banks (Bankenverband), which represents more than 200 private commercial banks and eleven member associations, banks stated that the “economy needs a programmable digital euro.”

image courtesy of CoinTelegraph

Monetary policy is the state’s responsibility, says Bankenverband

The paper states that the responsibility for the monetary system lies with sovereign nation-states and that any currency provided by banks or private companies must fit into a state-determined system. “Anything else would ultimately lead to chaos and instability,” the paper reads.

The banks make the case for a cryptography-based digital euro which, they state, should be created on the condition that a concurrent, common, pan-European payments platform is also established, further adding:

“The user of a digital euro – whether man or machine – must be clearly identifiable. This requires a European or, better still, a global identity standard. With every form of digital money, customers should be identified using a standard that is just as strict as that which banks and other obligated entities are required to apply under current legal framework pursuing the combat against money laundering and terrorist financing.”

However, according to Bankenverband, a competitive payment system can only be based on a common standard and a common currency. It stated, “In order to maintain Europe’s competitiveness, satisfy customers’ needs and reduce transaction costs, the introduction of euro-based, programmable digital money should be considered.”

Although the private German banks are convinced that, in a digitized economy, this form of digital money will rapidly gain in importance, they state that the existing monetary system must not “be endangered by the provision of crypto-based digital money.”

A private global digital currency, such as Facebook’s Libra, competing with the official key currencies in the world economy would most likely be a source of considerable economic and political conflict, the paper adds.

The banks further call on national and international policymakers to act responsibly and assure that competition with private currencies should not be allowed.

While a digital euro seems appealing, German officials criticize crypto

The German finance minister Olaf Scholz echoed similar sentiments when he recently advocated for the idea of launching a digital euro coin, stating that such a digital payment system would be beneficial for Europe and that they “should not leave the field to China, Russia, the U.S. or any private providers.

Mario Draghi, president of the European Central Bank, recently said that private stablecoins and cryptocurrency in general are of little value, adding:

“Thus far, stablecoins and crypto-assets have had limited implications in these areas and are not designed in ways that make them suitable substitutes for money.”

The president of the European Central Bank is joined in his sentiments by the German federal parliament, which recently released a statement in which they said that cryptocurrencies such as Bitcoin (BTC) are not real money.

Moreover, the statement points out that stablecoins are no alternative to fiat money and explains that the government intends to limit their adoption:

“It will be ensured that stablecoins do not establish themselves as an alternative to state currencies and thus call into question the existing monetary system.”