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European stocks were little changed and oil fell as investors assessed declining prospects for an OPEC deal and risks from Italy’s referendum. Asian stocks declined, while S&P futures pointed to a fractionally higher open, erasing 3 points from yesterday’s drop.

Trader attention today – and tomorrow – will be focused on oil which retreated back under $47 as OPEC members failed to bridge differences on production cuts, while a rally in metals ran out of steam. The rand plunged after President Jacob Zuma survived a leadership threat.

“We have a very important OPEC meeting and there’s a flow of expectations in front of this meeting, therefore the oil price is shaky as well as oil-related companies,” Herbert Perus, head of equities at Raiffeisen Capital Management in Vienna, told Bloomberg. The market is giving just 30% odds to an agreement to end the oil supply glut, according to Goldman Sachs; pessimism about the make-or-break talks is helping to damp a commodities rally.

Commodity and energy producers were the biggest decliners in the Stoxx Europe 600 Index. Crude slid as Iraq and Iran raised objections over the distribution of output reductions and Russia said it’s not planning to attend crucial talks with the Organization of Petroleum Exporting Countries on Wednesday (more in a subsequent update on oil prices). “What we are seeing now is a tug of war among OPEC members to get their share of the pie,” Son Jae Hyun, a global market analyst at Mirae Asset Daewoo Co., said by phone from Seoul. “If a deal isn’t made this time, none of them will benefit.”

Copper slumped for the first time in seven days and the Bloomberg Dollar Spot Index ended a two-day loss. The rand was the biggest decliner among major currencies.

European shares posted modest gains in early trading on Tuesday, after taking a battering from banks the previous day, but weak oil prices before a meeting of OPEC producers limited gains. 8 out of 19 Stoxx 600 sectors fall with basic resources, oil and gas underperforming while financial services outperforming; about half of Stoxx 600 members decline.

Italian banking stocks staged a recovery but miners came under renewed selling pressure after a sharp decline in commodities prices. Oil prices fell more than 1.5% on jitters over whether OPEC would be able to hammer out a meaningful output cut during a meeting on Wednesday to rein in a global supply overhang and prop up prices.

The miner-heavy FTSE 100 index was down 0.38% but the FTSE Mid 250 was up 0.15% 0940 GMT (5:40 a.m. ET). “The fact that the FTSE 100 is going one way and the FTSE 250 is going the other way suggests that there is a sector specific event going on, as the FTSE 100 is more commodities heavy,” said Investec economist Philip Shaw cited by Reuters.

There was a slew of European economic data reported this morning, most of which either met or exceeded expectations:

• (FR) 3Q P GDP 0.2% QoQ; est. 0.2%, prior 0.2%
• (FR) 3Q P GDP 1.1% YoY; est. 1.1%, prior 1.1%
• (FR) Oct. Consumer Spending 0.9% MoM; est. 0.25%, prior -0.2%
• (FR) Oct. Consumer Spending 1.5 YoY; est. 1.0%, prior 0.7%
• (EC) Nov. Economic Confidence 106.5; est. 106.8, prior 106.3
• (EC) Nov. Industrial Confidence -1.1; est. -0.5, prior -0.6
• (EC) Nov. Services Confidence 12.1; est. 12.5, prior 12
• (EC) Nov. Consumer Confidence -6.1; est. -6.1, prior -6.1
• (EC) Nov. Business Climate Indicator 0.42; est. 0.6, prior 0.6

The MSCI index of Asia-Pacific shares outside fell 0.27% after two days of gains. Tokyo stocks slipped
0.3% hit by a stronger yen. Asian stocks fell after a three-day rally as investors adopted a cautious tone ahead of key events from OPEC talks to the U.S. jobs report and Italy’s referendum.  8 out of 10 sectors fall with industrials, energy underperforming and telcos, financials outperforming.  Chinese stocks rose by 0.2% with the Shanghai Composite reaching 3,283: “The government is tightening property so maybe some of that excess liquidity is flowing into the A-share market again,” said Ben Kwong, a Hong Kong-based director at KGI Asia Ltd.

The moved higher on the yen to reach112.62 after month-end flow profit-taking pulled it down as far as111.58. It remains over 7% higher for the month. Dealers reported Japanese buying for the new month with orders today settling on Dec. 1. Against a basket of currencies, the dollar held at 101.280 .DXY and not far from last week’s14-year peak. The greenback was still on track for its strongest two-month gain since early 2015, underpinned by expectations the FederalReserve is almost certain to hike interest rates next month.

European government
bond markets were also trending in this direction, with safe-haven
Germen government bond yields up 1-2 basis points and lower-rated
Italian, Spanish and Portuguese bond yields lower. Italian 10-year bonds posted a modest advance, with the yield falling five basis points to 2.02%, but the gain comes just days after the bond yields hit their highest level since September 2015. The rebound came after Prime Minister Matteo Renzi’s office denied news reports that he is considering stepping down even if he wins the Dec. 4 referendum on constitutional reform.

Italian bond yields have been rising before Sunday’s referendum on constitutional change, on which Prime Minister Matteo Renzi has staked his future.

“Citi’s base case is for a No vote to prevail with political uncertainties likely to remain elevated over the near-term,” wrote analysts at Citi. “It’s worth watching whether PM Renzi resigns in the event of a No vote as promised, before rushing into euro shorts.” The event has brought Italy’s ailing banking sector sharp relief, and earlier this week Italian banking stocks hit their lowest point since end-September on continued worries over a cash call at troubled Monte dei Paschi.

In the US, 10Y Treasury yields rose two basis points to 2.34% after falling five basis points on Monday.

Later today, investors will get further insight on the U.S. economy with gross domestic product data, followed by Friday’s payrolls report on Dec. 2.

Bulletin Headline Summary from RanSquawk

• European equities trade modestly higher amid some mild reprieve in banking names while the FSTE 100 lags amid a firmer GBP
• A modest resumption in the USD buying seen today, despite reports that fund managers will — on balance — be selling the greenback into month end
• Looking ahead, highlights include German CPI, Eurozone sentiment figures, US GDP, API Inventories, Fed’s Dudley and Powell

Market Snapshot

• S&P 500 futures up 0.2% to 2204
• Stoxx 600 unchanged at 340
• FTSE 100 down 0.6% to 6759
• DAX up 0.1% to 10593
• German 10Yr yield down less than 1bp to 0.2%
• Italian 10Yr yield down 5bps to 2.02%
• Spanish 10Yr yield down less than 1bp to 1.56%
• S&P GSCI Index down 1.2% to 365.8
• MSCI Asia Pacific down 0.3% to 136
• Nikkei 225 down 0.3% to 18307
• Hang Seng down 0.4% to 22737
• Shanghai Composite up 0.2% to 3283
• S&P/ASX 200 down 0.1% to 5457
• US 10-yr yield up 2bps to 2.33%
• Dollar Index unchanged at 101.33
• WTI Crude futures down 1.8% to $46.23
• Brent Futures down 1.7% to $47.43
• Gold spot down 0.5% to $1,188
• Silver spot down 0.4% to $16.54

Top Headlines

• OPEC Said to Remain Split as Russia Says It Won’t Attend Meeting: Delegates said to fail to bridge divisions after 10-hour talks
• Samsung Plan to Boost Share Value Falls Short of Elliott Goals: Stock buybacks, increased dividends will make up cash return
• Chicken Producers Asked for Affidavits Confirming Price Data: U.S. chicken producers including Tyson Foods and Sanderson Farms are being asked by the Georgia Department of Agriculture to meet new requirements for a price index
• Korea’s Scandal-Hit President Says She’s Willing to Resign: Park says will follow what parliament decides on her future
• Strategists Shun Aging U.S. Bull Market for New One in Japan: Morgan Stanley upgrades Japan stocks, downgrades U.S. equities
• Facebook Fake News Doesn’t Need Policing, Publisher Says: Axel Springer CEO says Facebook shouldn’t regulate content
• Apple’s iPhone India Sales Surged Immediately After Note Ban: ET

* * *

Looking at regional markets, Asia stocks traded mixed following a negative lead from Wall St, where financials were pressured alongside weakness in their European peers and the S&P 500 testing 2200 to the downside. Nikkei 225 (-0.3%) was lower amid recent JPY strength weighing on the index after USD/JPY briefly fell below 112.00, while losses in ASX 200 (-0.1 %) were stemmed by health care and financials. Chinese markets were mixed amid continued reports China is to tighten capital controls and restrict outbound flows with profit taking in the Hang Seng (-0.2%) after yesterday’s Shenzhen stock connect-inspired gains, while the Shanghai Comp (+0.2%) initially took a breather before extending on 11-month highs. Elsewhere, the Kospi (+0.2%) rose 0.4% in reaction to news that South Korean President Park apologized for causing concern with her short-comings and stated that she will leave it to parliament to decide all affairs including reducing her term. 10yr JGBs traded flat despite a cautious tone for riskier assets, with the curve steepening as the short-end outperformed following a 2yr bond auction in which the lowest bid surpassed estimates and tail in price remained non-existent.
PBoC injected CNY 90bIn in 7-day reverse repos, CNY 70bIn in 14-day reverse repos and CNY 30bIn in 28-day reverse repos. PBoC set mid-point at 6.8889 (Prey. 6.9042).

Top Asian News

• UBS Wealth Sees Trump Bubble Burst Driving Yen to 98 per Dollar: Protectionist policies to precede fiscal stimulus, Ibayashi says
• Macquarie to Merge Trading Businesses Into Unit Led by Downe: Brings together securities and commodities & markets groups
• Thailand’s Parliament to Invite Vajiralongkorn to Become King: Vajiralongkorn would succeed the late King Bhumibol Adulyadej

In Europe, equities spent the morning in modest positive territory (Euro Stoxx 50: +0.6%), with the exception of the FTSE 100 (-0.3%), which has been weighed on by a stronger GBP as well as energy and material names. Elsewhere, sentiment has also been bolstered on the continent by upside in Banca Monte dei Paschi shares (+5.6%), paring some of the significant downside seen yesterday in the wake of their debt to equity swap green light. Elsewhere, Actelion (-5%) are among the worst performers this morning after reports in the FT that the Co. is considering a complicated deal to combine with part of Johnson & Johnson, without seeing a full takeover as was previously touted. Fixed income markets have been relatively quiet with participants amid the looming month-end and Italian referendum, as such volumes are somewhat on the light side. Today has also seen a noticeable narrowing of the IT/GE spread, in terms of reports from Italy Italian PM Renzi’s office denied premarket reports suggesting that the Italian leader would resign, even in the event of Sunday’s referendum seeing a ‘yes’ vote.

Top European News

• Actelion Slumps on Report J&J Talks Will Leave It Independent: Financial Times reported that a complex transaction being discussed with Johnson & Johnson would allow the Swiss company to remain independent.
• Sweden’s Economy Slows as Investments Stall in Third Quarter: Growth slowed in the third quarter as an expansion in the Nordic region’s largest economy continues to abate from last year’s output peak.
• Tesco’s Ex-CEO Clarke Avoids Prosecution Over Accounting Scandal: Clarke informed by Serious Fraud Office he won’t be charged
• VW, BMW, Ford to Set Up Charging Network to Spur E-Car Demand: Automakers plan first stations on European highways in 2017

In currencies, Bloomberg’s dollar gauge, which tracks the greenback against 10 major peers, increased 0.1%. The yen weakened 0.6 percent to 112.57 per dollar, set for its biggest monthly drop since 2009, amid speculation that Trump will pursue inflationary spending and tax policies prompting a faster pace of monetary-policy tightening by the Federal Reserve. The rand depreciated 1.5 percent after Zuma staved off a bid by officials in the ruling party to oust him. The Norwegian krone dropped 0.3 percent. The South Korean won edged 0.1 percent higher as President Park Geun-hye said she’s willing to resign amid an influence-peddling scandal.

In commodities, WTI crude slipped 1.9 percent to $46.20 a barrel as of 10:45 a.m. in London, after rising 2.2 percent on Monday, as jitters returned that OPEC will fail to reach a successful deal when it meets tomorrow. Copper futures dropped 1.6 percent on the London Metal Exchange, nickel lost 2.2 percent while zinc declined 1.1 percent. Gold for immediate delivery fell 0.5 percent following last session’s 0.9 percent jump.

Among today’s key events, we’ll get the second reading of Q3 GDP where the market is expecting growth to be revised up modestly to +3.0% qoq from +2.9% in the first estimate. In addition to the data the BEA will also release new information concerning corporate profits which is usually worth taking a look at. Also due out across the pond will be the November consumer confidence survey and also the S&P/Case-Shiller house price index. There is also some Fedspeak with Dudley due to speak at 1.15pm GMT (albeit on the Puerto Rico economy) while Powell speaks at 5.40pm GMT.

US Event Calendar

• 8:30am: GDP Q3 Est. 3% (prior 2.9%)
• 8:55am: Redbook weekly sales
• 9am: S&P CoreLogic CS 20-City y/y NSA, Sept., est. 5.20% (prior 5.13%)
• 9:15am: Fed’s Dudley speaks in Puerto Rico
• 10am: Consumer Confidence Index, Nov., est. 101.5 (prior 98.6)
• 4:30pm: API weekly oil inventories

* * *

DB’s Jim Reid concludes the overnight wrap

Sunday’s referendum in Italy is coming into full view now and even though a rejection is probably the most likely scenario, what happens after that is still open to much debate. Indeed DB’s Marco Stringa published an updated report yesterday looking at the risks after and beyond Italy’s referendum. He notes that given the recent underperformance in Italian assets, the impact of a rejection may already have partially been reflected in valuations. But when looking at implied moves from options, the equity market seems to be mostly pricing in limited probability of extreme scenarios. An apparent lack of concern over contagion risks is even more apparent in broader European indices. The report goes through Marco’s various downside and upside scenarios for which his central case still remains a muddle-through government with limited scope and duration. In this case he expects an early election from June 2017.

The last 24 hours suggests, certainly in Europe, that markets have started to turn their focus fully towards Sunday. Italy’s FTSE MIB (-1.81%) was the standout underperformer yesterday with Italy’s banking sector under pressure following a number of negative newswire reports. The Stoxx 600 edged down -0.77% although the Stoxx 600 Banks index tumbled -1.90% for its biggest one-day loss since November 2nd with Italian lenders unsurprisingly at the heart of that.

Markets in the US also slipped yesterday. Having touched record highs on Friday the S&P 500 (-0.53%), Dow (-0.28%), Nasdaq (-0.56%) and Russell 2000 (-1.29%) all simultaneously declined with banks also at the forefront of the weakness. In fact that drop for the Russell 2000 was, amazingly, the first since November 3rd (15 sessions) with the run of gains since the longest for that index since 1996. Elsewhere, Treasuries seem to have hit their yield ceiling for now. 10y yields were over 4bps lower yesterday at 2.315% and are now 10bps or so down from the intraday highs in yield last week. Sovereign bond markets were also a bit stronger in Europe yesterday. 10y Bund yields dropped 3.5bps to 0.201% while BTP’s underperformed at the margin, although still edged a couple of basis points lower to 2.064%.

The other obvious mover and shaker right now ahead of tomorrow’s meeting is Oil. Yesterday WTI rebounded +2.21% to a shade above $47/bbl again, although it has dropped below that level again this morning in Asia. The constant barrage of will-they-won’t-they headlines has the makings of the next great soap opera. The suggestion yesterday was that Iran and Iraq have continued to express objections to Saudi Arabia demands for their share of output cuts and for now that appears to be the main sticking point. We’ll wait to see what the latest round of headlines bring us today.

To the latest in Asia now where it’s been another relatively mixed start to trading. The Nikkei (-0.26%) in particular is trading lower despite some signs of improvement in the data this morning. Overall household spending, while still soft, did improve to -0.4% yoy in October from -2.1% in the month prior. Retail sales were also reported as rising +2.5% mom last month (vs. +1.1% expected) – the quickest since May 2014 – while over in the labour market the jobless rate was unchanged at 3.0%. Elsewhere this morning the Hang Seng (-0.02%), ASX (+0.06%) and Kospi (-0.03%) are little changed, while the Shanghai Comp (+0.30%) has edged higher. Rates markets are similarly mixed, although moves are relatively modest, while US equity index futures are fairly flat.

Moving on. Yesterday the OECD released their twice-yearly economic outlook including updated growth forecasts. Summing up, growth was revised up for the UK to 2.0% for 2016 (from 1.8% at the September projections) and 1.2% in 2017 (from 1.0%). Growth in 2018 is expected to be 1.0% but unsurprisingly the OECD used the caveat that the unpredictability of the exit process from the EU is the major downside risk. For the US, growth has been revised up to 1.5% for this year (from 1.4%) while 2017 growth was revised up two-tenths to 2.3%. Growth is expected to be 3.0% in 2018 with the organisation painting a fairly positive picture about of the impact of President-elect Trump’s proposed infrastructure spending plans on US growth. According to the OECD, world growth is expected to be 2.9% this year (unchanged) and 3.3% in 2017 (up from 3.2%).

Meanwhile, the data flow in Europe was a little bit soft at first glance. The ECB’s money and credit aggregates revealed a slowing in M3 money supply growth to +4.4% yoy in October from +5.1% the month prior. Market expectations had been for little change. However, after adjusting for sales and securitisation household lending rose +1.8% yoy and was unchanged versus September, while the three-month average for total credit was little changed at +1.7% yoy. Private sector credit rose with the three-month average up to +0.9% yoy from +0.6%. Meanwhile, the sole release in the US was the Dallas Fed’s manufacturing survey for this month which showed headline business conditions as rising nearly 12pts to +10.2 which is actually the highest reading since July 2014.

Also released yesterday was the latest ECB CSPP holdings data. As of November 25th, total holdings amounted to €46.231bn. That implies net purchases settled last week of €1.909bn or an average daily run rate of €382m. In fact, the daily average more or less matches the daily average since the program started (€385m) so we’re still yet to see any obvious signs of a slowdown into yearend just yet.
Staying with the ECB and wrapping up, President Draghi also spoke yesterday in a testimony to European Parliament, although his comments weren’t particularly groundbreaking. Draghi spoke about the ECB’s perspective on economic and monetary developments post Brexit and talked about the ‘encouraging resilience’ that the Euro area has so far displayed. Unsurprisingly Draghi said that longer term potential spillover effects will ‘vary across countries depending on their trade links with the UK’. Following the various press reports suggesting a possible delay in the decision concerning an extension of the ECB’s stimulus program, Draghi said that the Governing Council will assess the various options that will allow the Council to ‘preserve the very substantial degree of monetary accommodation necessary to secure the sustained convergence of inflation towards level below but close to 2%’.

Looking at the day ahead, this morning in Europe we’re kicking off in France where we’ll get the second Q3 GDP reading. Following that we turn over to the UK where money and credit aggregates data is due to be released, including last month’s mortgage approvals data. Confidence indicators for the Euro area then follow before we get the flash November CPI report for Germany. Over in the US this afternoon we’ll get the second reading of Q3 GDP where the market is expecting growth to be revised up modestly to +3.0% qoq from +2.9% in the first estimate. In addition to the data the BEA will also release new information concerning corporate profits which is usually worth taking a look at. Also due out across the pond will be the November consumer confidence survey and also the S&P/Case-Shiller house price index. There is also some Fedspeak with Dudley due to speak at 1.15pm GMT (albeit on the Puerto Rico economy) while Powell speaks at 5.40pm GMT.

via http://ift.tt/2gBzbCs Tyler Durden

Conduit CMBS (Commercial Mortgage Backed Security) debt outstanding is down from $740 billion in 2007 to $400 billion currently according a recent note from Goldman Sachs. The Non-Agency RMBS (Residential Mortgage Backed Security) Market, not backed by the US Government, has been contracting at a rate of 10 percent year, mostly due to prepayments and studious lenders paying off their loans. Agency RMBS (loans backed by the US Government) have been steadily climbing, reaching a level of $200 billion in issuance for the trailing 12 months. When it comes to refinancing, 40% of conventional refinances have involved cash-out transactions according to Goldman’s Marty Young.

Low Rates Have Skewed Lender Incentives

The growth in agency RMBS has overshadowed by the growth in US Treasury debt which is expanding at rate of $1 trillion over the trailing 12 months. This growth has led Mr. Young’s team to forecast the US Fed will “put off shrinking the balance sheet until mid-2018.” DoubleLine’s Jeffery Gundlach warned about 2018 debt bombs, something central bank balance sheets have morphed into, at Charles Schwab’s 2016 Impact conference saying “We’re in the eye of a hurricane for the next three to four years” according to Bloomberg. He added “come 2018, 2019, and 2020, look out!”

If 2016 is not 2008 then 2018 surely will be, although on a much grander scale as global finance has transitioned away from Non-Agency risk (IE: Lehman, AIG) to Agency risk (IE: Fannie, Freddie, and Gennie) so as to more easily allow the Fed to buy toxic paper from the banks since the Fed is literally the only remaining source for any form for finance strength because they can generate money.

Gundlach is right to be concerned. Agency RMBS has just pushed a new four-year high as of September according to Goldman’s Young. Debt issuance has been rising thanks to lower rates and looser mortgage loan standards according to TheMortgageReports.com which noted minimum credit scores required for loan approvals have declined while the maximum threshold for loan-to-values have increased. Makes it pretty darn easy to ramp your national debt 100% with all these easier credit now floating around.

While it is true that the year-over-year percent change in US debt has contracted from the 2008 surge, it still remains around 5 percent using data from the St. Louis Fred:

The US Government (on behave of the citizens) is not the only paper issuer going hogwild either. Societe General’s Andrew Lapthorne showed in a October 21 note that US Corporate debt issuance “is still out of control”, which is exactly what caused valuation metrics to skew, as I previously wrote.

Non-agency RMBS has been shunned relative to Agency likely for two reasons: the first being that Agency loans are backed by the US government and the second being the convoluted environment which Non-Agency paper exists coupled with a lack of demand of home loans due to the shift in demand to rentals:

Non-Agency lenders inherently must account for the risks associated with the various trances embedded in the multiple offerings of non-Agency securities and also worry over the possibility of no repayment. PIMCO wrote back in 2014 that non-Agency paper traders also need very specific analysis to account for the variables involved in making the optimal relative value decision. PIMCO wrote about the need for granular housing analysis required to truely find value in the non-Agency market, saying:

“This means that an investor’s view on the trajectory of home prices needs to be extremely granular. To develop a forecast on national home prices, PIMCO uses macroeconomic conclusions from its quarterly forums, as well as forecasts tailored by zip code, based on key factors including local income and unemployment trends, market dynamics (foreclosure laws, backlog of distressed supply), data and anecdotal information from our non-performing loans business and local market qualitative research (PIMCO “ride-alongs”)”

Ok, so maybe the Non-Agency trading world isn’t for everyone but it does impact us as emotions sway during prosperous times and difficult times.

Rising Rate Environment Bad For Financially Stretched Borrowers

Even as Wall Street tries to predict the next Fed rate hike and while the US 10-year yield slowly creeps higher, home-owners looking to refinance steadily trends higher according to Goldman:

There remains little reason to believe that refis will ramp up before the December rate hike, which has a 50 percent chance of happening but none-the-less has not stopped Wall Street from betting on the percent probability of an event that has a 50-50 outcome. If rates begin to rise, the FRBNY shows that borrowers incentives to refi and prepay decreases:

If anything increases the demand for refis it will be the destressed borrowers still lingering around. The studious borrowers have fallen off record and the remaining paper left to track is essentially the remaining delinquent borrowers, which results in the spikes below for 2005 and 2006 as loans come due:

Weak loans, weak financial dynamics among borrowers, low-rates and a chase for yield have generated a perfect storm again as the world’s efforts to hide-the-debt are beginning to fail. The New York Federal Reserve Bank shared a presentation in May 2016 highlighting the near $9.5 trillion mortgage credit line the US has, which makes up about 24 percent of the country’s total non-financial debt:

The Fed is making it worse as each forgone opportunity to raise rates continues to erode the long-standing base on which financial market trust has historically stood. On October 21 Societe General’s Andrew Lapthorne highlighted the collapsing yield impact on assets. Yield is what gives money value and as it dissipates, fiat currency is seen as what it really is – paper with no intrinsic value. When yields or more specific, returns, are depressed, savers lose incentive to save.

The Takeaway

Macro policy has failed depending on how you want to look at it. In hindsight one could assume things would be better today if the Fed had just allowed the market to establish fair-market prices in an effort to account for the excessive lending fraud the US experienced at the turn of the millennium. Or one could assume if the Fed did nothing we would not have the pleasure of 8 years of manipulated markets because global markets would have spiraled out of control.

Complexity demands trust. If it did not, then the rational understanding we have in the markets would be reflected in the prices. Yet, as economic activity dissipates prices keep rising because the Fed is there to buy up assets and create value through anchored adjustments. Psychology is an age old Fed tool and they’ve recently used it to control inflation as the money supply swelled following the Great Manipulation Recession.

via http://ift.tt/2gRmfsP CalibratedConfidence

Well this is awkward.  Just two days after confirming that he would participate in Jill Stein’s recounts in WI, MI and PA, Hillary campaign attorney, Marc Elias, is now publicly calling on North Carolina Republican Gubernatorial candidate, Pat McCrory, to halt his recount efforts and concede his race.

In the NC Gov. race, as of the end of the weekend, Gov-Elect Cooper’s lead is now 9,133 votes.

— Marc E. Elias (@marceelias) November 28, 2016

Cooper’s lead in NC is now 9,133. McCrory should concede. https://t.co/xE64aS9n7T

— Marc E. Elias (@marceelias) November 28, 2016

 

Ironically, Elias cites an insurmountable 9,133 vote margin as the basis for his plea even though that is a tighter margin than the 22,871 vote gap between Trump and Hillary in WI…

 

…11,612 vote gap in MI…

 

…and the 66,236 gap in PA.

 

Are all politicians afflicted with the same disease that allows them to be so blatantly hypocritical?  Did he simply think that no one would notice?  These aren’t rhetorical questions, Marc, we would really like to better understand your process for rationalizing these sorts of things in your head.

 

Of course, we assume this unique ability to rationalize all sides of seemingly contradictory viewpoints is exactly the personality trait that George Soros was looking for when he went shopping for a lawyer to whom he could give $5mm to fight voter ID laws.

The lawyer, Marc Elias, who specializes in voter-protection issues, was in contact with Mr. Soros in January 2014 when Mr. Elias was exploring a series of federal lawsuits before that year’s midterm election and in advance of the 2016 campaign, according to Mr. Soros’s political adviser, Michael Vachon. (Mr. Elias declined to comment on Friday about the funding of the lawsuits.)

 

The goal is to try to influence voting rules in states where Republican governors and Republican-led legislatures have enacted election laws since 2010, and to be ready to intervene if additional measures are passed over the next 17 months.

 

Mr. Soros described himself as “proud” to be part of the legal battles. “We hope to see these unfair laws, which often disproportionately affect the most vulnerable in our society, repealed,” he said.

 

Two suits that Mr. Soros is supporting were filed in Ohio and in Wisconsin last month. He is also helping to pay for a case that Mr. Elias and several other groups filed last year in North Carolina.

 

Democrats say the new laws disproportionately affect the poor, minorities and young people. A Government Accountability Office study last October found that states with more stringent voter identification laws had a larger decline in voter turnout than states that did not have such new restrictions.

After all, one has to be somewhat delusional to assert that showing ID to vote somehow disenfranchises low-income and minority voters while simultaneously refusing to acknowledge that voter fraud, which is tacitly tolerated in the absence of voter ID laws, somehow doesn’t result in the same disenfranchisement.

via http://ift.tt/2gDKGpl Tyler Durden

Submitted by John Rubino via DollarCollapse.com,

No rest for the wicked. With the shockwaves from Brexit and President Trump still reverberating around the world, the established order is bracing for more bad news. Next up is a December 4 Italian constitutional referendum that might end the reign of centrist prime minister Matteo Renzi and replace him with a bunch of anti-euro iconoclasts from the Brexit/Trump part of the spectrum. Here’s an excerpt from a much longer, deep-context Guardian UK article:

As the air of insurgency becomes unmistakable, the technical debate over reforming a 70-year-old constitution is in danger of becoming a sideshow. Perhaps the most disturbing poll for Renzi found last week that only 40% of Italians say they will vote on the reform package; 56% consider their vote to be more a verdict on the prime minister, his government and, by implication, the state of the nation.

 

If that bigger picture still dominates come polling day, it is hard to see anything but defeat for a man once billed as Italy’s Tony Blair. After 13 years of a flatlining economy, Italians are battered, bruised and looking for somebody to blame. Unemployment is running at 11%, but is close to 40% among the young, who made up the bulk of the 107,000 who left the country last year to seek work abroad. The aftermath of the financial crash is estimated to have wiped out about a quarter of Italian industry. The average family income is less now than it was in 2007.

 

Traditionally among the most enthusiastic proponents of European integration, ordinary Italians are furious at the EU’s failure to share the burden of the huge migration surge to their southern shores. Lectures from Brussels on the need to cut public spending and balance budgets, given the desperately straitened times, have added insult to injury. It is no coincidence that a current bookshop bestseller – 1960: The Best Year of Our Lives – is a nostalgic evocation of the Italian postwar economic miracle, when the country’s growth was judged to outstrip Germany’s.

 

As initially strong support for his constitutional reforms has plummeted, Renzi has tried to turn the tide. In an attempt to woo an increasingly Eurosceptic electorate, he has begun to talk tough to Brussels, temporarily abandoning austerity targets and threatening to veto the EU budget unless other member states show more solidarity over migration.

 

Resorting to what opponents describe as scare tactics, he has also drawn attention to a recent spike in the interest rates on government bonds. The markets have become decidedly uneasy at the prospect of Italy becoming the next country to deliver a seismic shock at the polls. “The yield will get bigger if uncertainty grows,” noted the prime minister. “That’s not a threat: it’s just a fact.”

 

A sharp rise in the cost of financing Italy’s colossal public debt could spell disaster. But just as the so-called fear factor failed to keep Britain in the EU, there are few signs that Renzi’s economic warnings are having the desired effect.

And not long after Italy takes its shot at the status quo, France will go to the polls for a run-off presidential vote pitting far-right François Fillon against extreme-right Marine Le Pen. Check out the latter’s rhetoric:

Brexit: Check. Trump: Check. Marine Le Pen: ?

“I think that the elites have lived too long among themselves. We are in a world where globalization, which is an ideology, has forgotten, and put aside the people, the people’s interests, aspirations, and dreams,” National Front party leader and French presidential candidate Marine Le Pen told CNBC following Trump’s election victory.

 

“They have acted like carnivores, who used the world to enrich only themselves, and whether it’s the election of Donald Trump, or Brexit, the elites have realized that the people have stopped listening to them, that the people want to determine their futures and in a perfectly democratic framework, regain control of their destiny. And that panics them, because they are losing the power that they had given themselves,” Le Pen went on to say.

 

The major tenets of National Front’s ideology include nationalism, protectionism, and right-wing populism – with strong stances against immigration. A once obscure political party that had no real weight in French politics, the National Front is now a major player.

 

Envious of the U.K.’s Brexit referendum, Le Pen wants France to leave the European Union. In campaign stops across her country she has championed for more immigration restrictions and has been vocal against radical Islam – very akin to the way Donald Trump carried his campaign. Much like the president-elect’s foes, Le Pen’s critics have relentlessly labeled her a racist and a fascist.

It’s hard to overstate the threat posed by these two votes to the EU – the world’s largest economic entity – and by implication to the rest of the global financial system. Italy is the third biggest country in the EU, and France is the second. Let either pull out and the result might be dissolution and the end of the euro. Trillions of dollars of euro-denominated bonds would suddenly be converted to lira or francs, forcing the holders of those bonds to take big losses and impairing bank capital across the continent, leading in turn to derivatives blowing up pretty much everywhere, and so on until the whole house of cards is threatened.

So what does a fiat currency/fractional reserve banking Establishment do when confronted with such a looming catastrophe? What it always does of course: Cut interest rates and ramp up money creation in order to devalue the currency.

Put another way, the only way to ease the burden the common currency places on inefficient countries like Italy and France is to cut the value of the euro to the point where French wine and Italian cars are screaming buys around the world. Those industries grow and hire more people, who in turn are more open to preserving the status quo.

Now combine a massive euro devaluation (which, by the way, is already in progress)…

…with a trillion-dollar US infrastructure program financed with borrowed money, and the result might be a world awash in unprecedented amounts of liquidity. If that’s not paradise for precious metals then it’s hard to imagine what would be.

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Earlier this morning, Texas governor Greg Abbott vowed to sign legislation banning sanctuary cities in Texas and to issue orders to cut off funding to dissenters.

Yes. I’m going to sign a law that bans sanctuary cities. Also I’ve already issued an order cutting funding to sanctuary cities. #txlege https://t.co/uYXa2QFrvE

— Greg Abbott (@GregAbbott_TX) November 28, 2016

 

The tweet from Abbott came in response to the following question posed by a follower after an Austin, TX official told Fox News that the city would remain a safe haven for illegal immigrants.

@GregAbbott_TX just saw on @FoxNews that Austin pledges to remain a sanctuary city. Is there anything your office can do to reverse this?

— Ren (@that_ren) November 28, 2016

 

Of course, all of this comes after a recent “60 Minutes” interview where Trump confirmed his campaign pledge to immediately deport 2-3 million illegal immigrants with a criminal record.  Here is what he said:

“What we’re going to do is get the people that are criminal and have criminal records, gang members, drug dealers, where a lot of these people, probably two million, it could be even three million, we are getting them out of our country.”

As expected, many “sanctuary cities,” or jurisdictions around the country where law enforcement officials refuse to cooperate with federal immigration officers, have since doubled down on their vows to protect illegal immigrants.   

As we noted previously, California’s LAPD Chief confirmed that his department would “not help deportation efforts.”  Meanwhile, both Chicago and Boston also joined in with similar comments.  Per WGN News, Chicago’s Mayor Rahm Emanuel recently vowed that illegal immigrants are “safe in Chicago.”

“You are safe in Chicago.  You are secure in Chicago.  You are supported in Chicago.  Now administrations may change but values and principles as it relates to inclusion do not.”

While CBS Boston confirmed a similar stance by Boston Mayor Marty Walsh:

He’s worried that undocumented residents will be afraid to go to the police for help, or even send their kids to school. “The police department, if you call them and you need help they will help you, and they will not turn you in to the Feds,” Jackson says.

 

Mayor Walsh appears to be staying the course as well, saying in a statement: “We are a welcoming city for all. These are Boston values and no policy will change them.”

 

Not everyone agrees. “It’s no secret that these criminal illegal aliens and terrorists are looking for places to go where they are least likely to be caught,” says Bristol County Sheriff Thomas Hodgson.

 

He says sanctuary cities are breaking federal law. “What’s really troubling about this is that any elected official in this country would suggest that there should be a certain class of people who do not have to abide by our laws,” Hodgson says.

 

In all, according to the Center for Immigration Studies, there are roughly 300 “sanctuary” jurisdictions around the country.  We suspect many of them need their federal funding more than they need to their criminal illegal aliens but time will tell…

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Submitted by Alex Gorka via Strategic-Culture.org,

Finally, Egypt has taken a clear stance on Syria. This is an event of great importance to drastically change the situation. Speaking on the Portuguese TV network RTP on November 22, Egyptian President Abdel Fattah al-Sisi publicly affirmed his support for the forces of Syrian President Bashar al-Assad. In response to the question of whether Egypt will send troops to Syria or not he stated: «Our priority is to support our Army in issues such as controlling some parts of Libya and dealing with extremist forces for establishing peace, including in Syria and Iraq».

President al-Sisi restored diplomatic relations with Syria after coming to power in 2013.

Last month, Egypt backed a Russian-backed motion calling for a ceasefire in Syria. Egypt had known the support for the Russian measure would put it at odds with the West and Saudi Arabia. Riyadh responded by suspending oil shipments to the country but the Egyptian government does not give in under pressure. For instance, it has defied the US and Saudi Arabia by refusing to get involved in the Yemen’s conflict.

Citing «well-informed Arab sources», Lebanese newspaper Al-Safir reported that 18 Egyptian pilots arrived at Hamah military airbase in Syria on November 12. The servicemen are part of a special helicopter squadron. A source «close to the Syria file» told the newspaper that a large deployment of Egyptian troops will arrive in Syria in late January to take part in military operations «not limited to air support at Hama airbase».

Last month, Syrian security services chief Ali Mamlouk met with Egyptian officials in his first public foreign visit in five years to discuss Egypt publicly backing the Syrian government. According to Middle East Observer, the first group of 4 high-ranking Egyptian officers from the Egyptian General Staff entered Syria a month ago and was deployed in the Syrian army’s base in Damascus. The military officials visited the armoured division stationed near Daraa and an airbase in Sweida province.

Also last month, Syrian National Security Bureau head Ali Mamlouk visited Cairo to meet Khaled Fawzy, the head of Egypt's General Intelligence Service. The two sides agreed to coordinate political positions and strengthen cooperation in «the fight against terror» according to Syria's Sana news agency.

Egypt’s open support of the Russia-backed coalition in Syria is a game changing event of fundamental importance. In the West, the war in Syria has been widely believed to be a conflict between Sunni and Shia forces – the 1400 old Islam schism. Now the largest Arab Sunni state has taken the side of the Syria’s government to become a coalition ally with Russia. The sectarian interpretation of the conflict is not valid anymore.

The conflict is about fighting terrorists. As the Egyptian president noted he believes that the national army the Syrian government forces are best positioned to combat extremists and restore stability in the war-torn nation.

Recently, Russia and Egypt have intensified their bilateral ties in many areas, including defense cooperation. Joint military exercises were held in Egypt in October. Both countries see eye-to-eye on Libya and many other issues.

There is another event to demonstrate the strengthening of the Russia-supported coalition joined by Egypt. According to Iranian Fars News Agency, Iranian Defense Minister Hossein Dehghan stated on November 26 that Tehran could allow Russia to use Nojeh airbase near Hamadan for Moscow's aerial operation against terrorists in Syria. Also, Mr. Dehghan told reporters that purchase of Russian-made Sukhoi Su-30 fighter jets is on the agenda.

The same day, Victor Ozerov, the Russian upper house of parliament's defense committee chair, said Russia could use Iran's Hamadan airbase in case the Admiral Kuznetsov aircraft carrier moves away from Syria. On August 16, Russian bombers used Iran’s Nojeh to launch attacks on terrorist positions in Syria.

On November 26, Syrian armed forces and allies managed to seize control of Hanano, key district in the northwestern city of Aleppo, which has been a flash point over the past few months. After Aleppo is retaken, the Russia-supported coalition in Syria will control vast swathes of land in the country. With the government of Bashar Assad firmly in power, the post-war settlement no longer seems to be a pipe dream and the US-led coalition will hardly be the one to call the shots.

Russia’s military effort in Syria has become an operation of a much broader scope than it was back in September 2015, when the first Russian aircraft flew its first sortie. The operation has marked Russia’s spectacular return to the Middle East as a major player. New actors, like China, Egypt and others, get involved. Interaction between the coalition members gets closer as illustrated by Russia and Iran.

Egypt’s decision to support the Syria’s government provides a good opportunity to influence the events in the region in a positive way.

In broad terms, the teaming up of large countries indicates that a regional anti-terrorism entity or even a military block independent from the US might emerge at some point in future.

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One might think that after 92 years, some wisdom may have leaked into the brain of Zimbabwean president Robert Mugabe. But no. As the world's oldest head of state, he has overseen the demise from a post-colonial success to a pariah state wrecked by hyperinflation. However, having apparently learned no lesson from his prior experiences, The Reserve Bank of Zimbabwe has decided to print a new national currency for the first time since 2009.

As Simon Black pointed out a month ago, some people just don’t learn.

After becoming the most famous case of hyperinflation in modern history roughly ten years ago, Zimbabwe is about to have another go at conjuring paper money out of thin air.

 

I’m sure this time will be different.

 

You know the story. Starting in the late 1990s, the Zimbabwe government’s policies under Robert Mugabe began to have some devastating effects.

 

He confiscated private property from established (mostly white) farmers and redistributed the land in very tiny tracts to his supporters, most of whom had no experience in farming.

 

Unsurprisingly, Zimbabwe’s once-booming agriculture exports collapsed almost overnight.

 

This destructive, authoritative control pervaded across nearly all industries, and by the early 2000s, the economy was in dire straits.

 

Unemployment and inflation skyrocketed.

 

In 2001 alone, retail prices doubled. But that was just the beginning.

 

Inflation rose so quickly that the government was having to constantly print new denominations of currency– thousand Zimbabwe dollar notes, then ten thousand Zim dollar notes… then million dollar notes… even trillion dollar notes.

 

By 2007, the hyperinflation was so bad that prices were doubling roughly every day.

 

My friends here in Zimbabwe tell me stories of going out for drinks at a bar; they’d drink a few beers for an hour or so, after which the bartender would inform them that the price of a beer had just increased by 50%.

 

People learned very quickly to spend money as soon as possible, and long lines formed at grocery stores as an entire nation desperately tried to turn their paper currency into something useful.

 

Even a simple loaf of bread became a store of value.

 

One friend told me how we would buy a loaf of bread in the morning with his spare change, and then sell it in the afternoon so that he would have enough money to pay the bus fare back home.

 

Some economists estimate that Zimbabwe’s hyperinflation peaked at more than 500 BILLION percent– an incomprehensible figure unless you’ve lived through it.

 

In 2009 it all ended. The government stopping printing money, and Zimbabwe became a ‘hard currency’ economy.

 

US dollars, euros, pounds, South African rand, and even Chinese renminbi have been circulating here ever since; merchants and consumers basically use whatever currency they can to engage in transactions.

 

Essentially there is no Zimbabwe dollar anymore.

 

But that hasn’t solved any of the country’s problems.

 

In the late 1990s, Zimbabwe’s GDP was roughly $30 billion. Today it’s just $13.5 billion, than $1,000 per capita.

 

Independent agencies estimate the unemployment rate here at over 80%, and the average worker makes just a few dollars per day.

 

It’s not hard to understand why. Taxes, fees, and absolutely insane regulations abound in Zimbabwe.

 

And even at age 92, Robert Mugabe still maintains dictatorial power and a tight (albeit arthritic) grip over the economy.

And so, as RT reports, The Reserve Bank of Zimbabwe has introduced a national currency for the first time since 2009 in an attempt to tackle a sharp shortfall of the US dollar, the country’s primary medium of trade. The new currency, called bond notes, is pegged at par with the US dollar and is backed by a $200 million bond facility with Afreximbank, according to the regulator.

An initial amount worth $10 million is going into general circulation in two and five dollar denominations. The circulation of the dollar will not be suspended. The bond notes have fueled fears of economic chaos with people’s savings being wiped out. Some analysts call the introduction of the new currency the Zimbabwean president’s “last gamble.”

 

 

The bond notes aim to halt the outflow of US dollars from the country as well as to ease a cash shortage.

 

The country started using US dollar as its primary currency seven years ago following the collapse the Zimbabwean dollar with hyperinflation of 500 billion percent.

 

Some vendors are accepting the new money, though say they will stop if the notes begin to lose value.

 

The introduction of the currency might cause shortages of commodities and price hikes, according to Harare-based economic consultant John Robertson.

 

“Anyone who needs foreign currency for imports will have to go to the black market. Inevitably the bond notes will lose their value. It is back to the Zimbabwe dollar scenario,” he said as quoted by AP.

Of course, as we pointed out previously, that’s the same thing they said 15 years ago. And it’s the same thing that every government and central bank says when they embark on an initiative to print money.

This is such typical thinking, and sadly not limited to Zimbabwe…

People in power across the world, including in North America and Europe, rely on this incredibly limited playbook.

They think they can engineer prosperity by going into debt and conjuring money out of thin air.

They think they can legislate and regulate their way to a quality healthcare or education system.

And when the majority of their initiatives fail, or even have the exact opposite effect as intended, they don’t learn from their mistakes.

They simply print more money, pass more laws, and go deeper into debt.

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