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Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Something we should all be aware of.

From the LA Times:

The CIA has accused Russia of interfering in the 2016 presidential election by hacking into Democratic and Republican computer networks and selectively releasing  emails. But critics might point out the U.S. has done similar things.

 

The U.S. has a long history of attempting to influence presidential elections in other countries – it’s done so as many as 81 times between 1946 and 2000, according to a database amassed by political scientist Dov Levin of Carnegie Mellon University.

 

That number doesn’t include military coups and regime change efforts following the election of candidates the U.S. didn’t like, notably those in Iran, Guatemala and Chile. Nor does it include general assistance with the electoral process, such as election monitoring.

 

Levin defines intervention as “a costly act which is designed to determine the election results [in favor of] one of the two sides.” These acts, carried out in secret two-thirds of the time, include funding the election campaigns of specific parties, disseminating misinformation or propaganda, training locals of only one side in various campaigning or get-out-the-vote techniques, helping one side design their campaign materials, making public pronouncements or threats in favor of or against a candidate, and providing or withdrawing foreign aid.

 

The U.S. hasn’t been the only one trying to interfere in other countries’ elections, according to Levin’s data. Russia attempted to sway 36 foreign elections from the end of World War II to the turn of the century – meaning that, in total, at least one of the two great powers of the 20th century intervened in about 1 of every 9 competitive, national-level executive elections in that time period.

 

In the 1990 Nicaragua elections, the CIA leaked damaging information on alleged corruption by the Marxist Sandinistas to German newspapers, according to Levin. The opposition used those reports against the Sandinista candidate, Daniel Ortega. He lost to opposition candidate Violeta Chamorro.

 

In Haiti after the 1986 overthrow of dictator and U.S. ally Jean-Claude “Baby Doc” Duvalier, the CIA sought to support particular candidates and undermine Jean-Bertrande Aristide, a Roman Catholic priest and proponent of liberation theology. The New York Times reported in the 1990s that the CIA had on its payroll members of the military junta that would ultimately unseat Aristide after he was democratically elected in a landslide over Marc Bazin, a former World Bank official and finance minister favored by the U.S.

 

The U.S. also attempted to sway Russian elections. In 1996, with the presidency of Boris Yeltsin and the Russian economy flailing, President Clinton endorsed a $10.2-billion loan from the International Monetary Fund linked to privatization, trade liberalization and other measures that would move Russia toward a capitalist economy. Yeltsin used the loan to bolster his popular support, telling voters that only he had the reformist credentials to secure such loans, according to media reports at the time. He used the money, in part, for social spending before the election, including payment of back wages and pensions. 

Read the entire article at the LA Times.

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Covering numerous topics, from foreign politics to the Russian budget, the price of oil, sports doping allegations as well as the US election during his annual end-of-year news conference, Russian president Vladimir Putin slammed the US Democratic party saying “the party that is called the Democrats has clearly forgotten the original meaning of that name” and added that “the use of administrative resources (by the Democrats) is absolutely shameless.”

He continued the rout saying “outstanding figures in American history from the ranks of the Democratic Party would likely be turning in their graves. Roosevelt certainly would be. They (the Democrats) are losing on all fronts and looking elsewhere for things to blame. In my view this, how shall I say it, degrades their own dignity. You have to know how to lose with dignity.”

Taking another shot at the US Democratic Party, Putin said it is losing on all fronts and that it is wrongly trying to blame President-elect Donald Trump’s victory on external factors. “You need to learn how to lose gracefully,” he said. 

He added that “losers always look for someone to blame, but they should first of all look at themselves.

Ptuin then said that “the most important thing is what was revealed. It’s not like people invented this information – what they reported is true. It showed how the Democratic Party manipulated the system against Bernie Sanders. Instead of apologizing, they began to look for people to blame.”

Putin added that the question of who hacked the U.S. Democratic party was not important, but that the hacks revealed that public opinion in the United States was being manipulated. Russia has repeatedly denied accusations Moscow was involved in cyber attacks against the United States.

Putin also mocked the “archaic” U.S. electoral system, which he said “is a problem” and that it’s up to U.S. people to sort it out, however he conceded that the “U.S. is great country, will draw conclusions from vote.”

Putin also spoke about Trump, lauding the President-elect for his win, and said it was no surprise. “Right up to the end, nobody believed he would win — except us.” He credited Trump’s victory to his ability to keep his “finger on the pulse of the mood of society” adding that Trump “went all the way, even though no one believed that he would win, apart from you and me.”

The Russian president said on Friday he wanted constructive relations with the United States under President-elect Donald Trump.

Putin also acknowledged his own rising support among Republican voters in the US: “I don’t put it down to me, the fact that a large part of Republican voters support the Russian president,” he said. “It means that a large part of the American people have the same idea of how the world should be, of our common dangers and problems.”

Other highlights from the Putin press conference via Reuters:

ON DONALD TRUMP AND THE MILITARY

“In the course of his election campaign he (Trump) spoke about the necessity of strengthening the U.S. nuclear arsenal, and strengthening the armed forces. There’s nothing unusual here. To be honest, I’m a bit surprised by the words of certain other official representatives of the current administration who have for some reason set about proving that the armed forces of the United States are the most powerful in the world. No-one disputed that.”

“If anyone is unleashing an arms race it’s not us … We will never spend resources on an arms race that we can’t afford.”

ON PARTICIPATION IN ELECTIONS IN 2018

“When the time is ripe (I’ll say). I will look at what is happening in the country and in the world, and based on the results of what we have done and what we can do the decision will be made on whether I will participate in upcoming elections for the Russian president.”

ON THE ECONOMY

“(Economic) growth is happening thanks to certain sectors of the economy – machine building, chemicals, manufacturing and agriculture.”

“We saw some economic growth in November … This year we will probably have minus 0.5-0.6 percent (economic growth).”

ON INFLATION

“This year (inflation) will be significantly less than 6 percent … most likely in the region of 5.5 percent – this is a record low inflation rate, and gives us cause to expect that we will be able to reach our target and very soon get to inflation of 5 percent and then 4 percent.”

ON THE BUDGET DEFICIT

“The budget deficit will be a bit bigger .. 3.7 percent. In my view this is an absolutely acceptable amount because, among other reasons, we have preserved a positive external trade balance – more than 70 billion dollars (and) we have preserved our reserves … the central bank’s gold and forex reserves have even grown, and are now a little over 385 (billion dollars). Judging by that measure everything is fine. It’s a good safety margin.”

ON OPEC AND OIL PRICES

“We think that in the second half of 2017 the surplus of oil in the market will disappear and the oil price will stabilize. We are counting on a stabilization (of prices) at today’s level.”

“It (Russian oil production cuts agreed with OPEC) will be a smooth reduction that will hardly affect our overall output. This is perfectly acceptable to us, and we are counting on a rise in prices, which has already happened … a difference in the oil price of $10 will mean extra revenues to the budget of 1.75 trillion rubles ($28.65 billion) and an extra 750 billion rubles of income for oil companies, despite lower output. So at the end of the day everyone ends up winning.”

ON DOPING

“In this area transparency is absolutely essential … Undoubtedly there is a certain political element in all these issues. Sport should be cleansed, along with culture, of any sort of politics. Sport and culture are things that should unite people and not divide them.”

ON UKRAINE AND CRIMEA

“I am sure that sooner or later there will be a normalization of relations with Ukraine, and it (a bridge between Russian and Crimea) will be very beneficial to the development of Russia-Ukraine relations and future commercial and humanitarian links.”

ON PENSIONS

“All the necessary money is in place next year so we can from Feb.1 increase pensions in line with the rate of inflation in 2016.”

ON ALEPPO

“The president of Turkey and the leaders of Iran (also) played a huge role in this (managing the situation around Aleppo). I don’t know if this will sound immodest, but without our participation it would have been impossible.”

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• Berlin market attack suspect killed in Italy (Reuters)
• Tunisian Suspect Had a History of Criminal Activity, Extremism (WSJ)
• Hijacked Libyan plane lands in Malta with 118 on board (Reuters)
• Deutsche Bank, Credit Suisse Settle U.S. Probes as Barclays Sued (BBG)
• Italy Sets Up Fund to Help Troubled Banks (WSJ)
• Europe Stocks Halt Drop as Italian Aid Lifts Bonds: Markets Wrap (BBG)
• Dollar inches lower into Christmas lull (Reuters)
• Syrian rebels shell Aleppo after withdrawal (Reuters)
• President Xi Open to Growth in China Falling Below 6.5% (BBG)
• Trump’s Senior White House Staff Takes Shape (WSJ)
• Bitcoin Surges Above $900 on Geopolitical Risks, Fed Tightening (BBG)
• Putin Says He Knew Donald Trump Would Win (BBG)
• China fines GM venture $29 million for monopolistic pricing: state TV (Reuters)
• On Nov. 9, Hillary Clinton Voters Ate Their Grief (BBG)
• Giant Hedge Fund Builds a Management Machine (WSJ)
• Under fire, Eric Trump suspends charitable foundation (Reuters)
• 2016 Was Awful for Brazilians and 2017 Doesn’t Look Much Better (BBG)

 

Overnight Media Digest

WSJ

– The U.S. government struck a $7.2 billion settlement with Deutsche Bank over toxic securities, while separately filing a lawsuit against Barclays Plc alleging more than $30 billion in fraud-tainted sales. http://on.wsj.com/2hxmHsY

– Italy’s government has set up a backstop fund to shore up troubled banks, setting the stage for the rescue of troubled Italian lender Banca Monte dei Paschi di Siena SpA. http://on.wsj.com/2hxjGJd

– Federal investigators are asking questions about a billionaire New York hedge-fund manager and a Bermuda reinsurer as they examine the alleged fraud by hedge fund Platinum Partner. http://on.wsj.com/2hxnHx7

– Bridgewater Associates LP, the world’s largest hedge-fund firm, wants day-to-day management including hiring, firing and decision-making to be guided by software that doles out instructions. The project is the latest bid by founder Ray Dalio to perpetuate his unorthodox philosophy. http://on.wsj.com/2hxmQN2

– Incoming U.S. President Donald Trump rounded out his senior White House team, elevating a set of trusted advisers who helped engineer his surprise election victory and bringing some of the rhythms and spirit of his unconventional campaign into the government he will soon lead. http://on.wsj.com/2hxjz0e

– Uber Technologies Inc is moving a test of its self-driving cars to the friendlier environs of Arizona after suffering a regulatory defeat in California over its use of the vehicles in San Francisco. http://on.wsj.com/2hxk0rg

– Brazilian construction giant Odebrecht’s admission to U.S. prosecutors that it paid hundreds of millions of dollars in bribes to win lucrative infrastructure contracts is reverberating across Latin America, sparking a political crisis. http://on.wsj.com/2hxdKQx

– Beijing is considering retaliatory steps after Trump appointed China trade skeptic Peter Navarro to head American trade and industrial policy. http://on.wsj.com/2hxomPr

– Ivory Coast in October became Africa’s fastest-growing economy, a sharp reversal from 2011, when a bloody civil war left 3,000 people dead. http://on.wsj.com/2hxjIR6

 

FT

– Unite called off a Christmas strike action suspending a planned walkout by some British Airways cabin crew after new proposals from management.

– The Italian government approved Monte dei Paschi di Siena’s bailout, led by prime minister Paolo Gentiloni. State rescue of the country’s third largest bank, saddled by non-performing loans, became necessary after it failed to raise enough capital in the wake of European-wide stress tests.

– Prison guards were working to control a disturbance involving 60 inmates at HMP Swaleside on the Isle of Sheppey in Kent. Prisoners had taken control of a landing on a wing at the category B prison.

– Federal prosecutors sued Barclays and two of its executives over fraudulent mortgage-backed securities the bank issued as the US housing bubble was at its peak. The suit claims the bank “securitised billions of dollars of loans it knew had material defects” and financed lenders that it knew were issuing mortgages to customers who would be unable to repay them.

 

NYT

– Deutsche Bank announced late on Thursday that it had reached a tentative $7.2 billion deal to resolve a federal investigation into its sale of toxic mortgage securities, capping months of negotiations that weighed heavily on the bank’s stock price and reputation. http://nyti.ms/2hf0tOK

– United States authorities have accused British bank Barclays Plc and two former executives of fraudulently misleading the public in the sale of tens of billions of dollars in securities backed by home mortgages. http://nyti.ms/2hf2mer

– President-elect Donald Trump’s latest missive on military spending suggests that Boeing Co has perhaps swayed him more than its rival Lockheed Martin Corp. Now, he is preparing to pit one off the other to try to decrease the cost of new fighter jets, military analysts said on Thursday. http://nyti.ms/2heUwkR

– Ikea has reached a tentative settlement to pay $50 million to three American families whose young children were killed after the Swedish furniture company’s furniture fell on them, lawyers for the families said. http://nyti.ms/2heUEAR

– The United States economy grew at an annual rate of 3.5 percent in the third quarter, its fastest pace in two years and more than the government had previously estimated. The growth spurt, however, is not expected to last, as consumers and businesses pull back. http://nyti.ms/2heXeqC

 

Canada

THE GLOBE AND MAIL

** A Canadian-developed vaccine for the Ebola virus has proven to be extremely effective in a full-scale clinical trial, opening the possibility that future outbreaks of the disease can be successfully contained. https://tgam.ca/2h8OVJt

** New Brunswick has broken ranks with other provinces and territories to strike a bilateral agreement on health funding with Ottawa, a move that angered other provincial ministers who had rejected what the federal government put on the table earlier this week. https://tgam.ca/2imRd93

** A majority of Canadians support the key planks in Prime Minister Justin Trudeau’s energy and climate plan – approving a controversial oil pipeline and imposing a carbon tax to reduce greenhouse gas emissions, a poll from Nanos Research Group says. https://tgam.ca/2h8LthU

NATIONAL POST

** Indie telecommunications providers say the federal telecom regulator’s landmark decision to classify high-speed internet a basic service will inject competition into the ecosystem – and ultimately lower prices and improve speeds for consumers. http://bit.ly/2hZBuxs

** A former Ontario premier, a current member of parliament, and an ex-Alberta cabinet minister are among those advising businessman and reality TV personality Kevin O’Leary on whether to launch a Conservative leadership bid, according to a member of his “exploratory committee.” http://bit.ly/2hinjGH

 

Britain

The Times

– Bank of England Governor Mark Carney faces a bruising showdown with a group of influential MPs when an investigation into the Bank of England’s use of monetary policy since the financial crisis is launched. http://bit.ly/2i0pNcn

– Barclays is being sued by the U.S. Department of Justice for alleged fraud over the sale of mortgage-backed securities before the financial crisis. http://bit.ly/2hYfanZ

The Guardian

– British Prime Minister Theresa May must explain why it took so long for the government to establish that British-made cluster bombs banned by an international treaty were dropped by Saudi Arabia in Yemen, opposition leader Jeremy Corbyn has said. http://bit.ly/2i0fkh6

– Fingerprints found inside the cabin of the truck that ploughed into a Berlin Christmas market match those of the fugitive suspect Anis Amri, Germany’s federal prosecutor’s office confirmed on Thursday night. http://bit.ly/2hgp7A7

The Telegraph

– Italy’s ministers were in emergency session on Thursday night to thrash out the rescue terms for Banca Monte dei Paschi di Siena, finally ending a financial soap opera that has dragged on for years and done enormous damage to the country. http://bit.ly/2ilcijW

Sky News

– Planned strikes by British Airways cabin crew on Christmas Day and Boxing Day have been cancelled. http://bit.ly/2i71dUG

– London Underground workers are to stage a 24-hour strike over pay from 6 p.m. on Jan. 8, according to RMT and TSSA unions.

The Independent

– Prince Charles has issued a warning over the “rise of populism” in a veiled apparent reference to the election of Donald Trump and increasingly hostile attitudes towards refugees in Europe. http://ind.pn/2h53UnT

– British Ministers of Parliament are considering a push for longer working hours for MPs next year, to give enough time to pass Brexit legislation in line with Theresa May’s schedule. http://ind.pn/2hWTXe3

 

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Up to two hijackers, described as being “pro-Gaddafi,” have seized control of Afriqiyah Airways flight 8U209 in Libya, forcing the Airbus A320 plane to land in Malta. The suspected hijackers of the airliner with 111
passengers aboard have threatened to blow up the plane on the runway at
the international airport in Malta, the WSJ reports.

The airliner, a Airbus A320, landed at Malta’s Luqa airport at 1030 GMT, according to Flightradar24.

Hijacked Afriqiyah Airways flight diverted to Malta https://t.co/bEAPwrpZts http://pic.twitter.com/Haor9Zr09n

— Flightradar24 (@flightradar24) December 23, 2016

The plane, an Afriqiyah Airways flight to Tripoli from Sabha, was diverted by a passenger who demanded to be flown to the Mediterranean. In a statement, Malta airport authorities confirmed that there has been “an unlawful interference” at the airport and that emergency teams have been dispatched to the site.

“The pilot reported to the control tower in Tripoli that they were being hijacked, then they lost communication with him,” a security official from Mitiga airport in Libya told Reuters. “The pilot tried very hard to have them land at the correct destination but they refused.”

????#Libyan plane with 118 passengers on board lands in #Malta ‘with two hijackers on board’
???? http://pic.twitter.com/iwT52WWwaP

— Mete Sohtao?lu (@metesohtaoglu) December 23, 2016

There are conflicting reports as to how many hijackers are on board the flight, with some media outlets indicating two while the Times of Malta report there is only one suspect involved. Described as being “pro-Gaddafi,” the hijacker is reportedly in possession of a hand grenade and has threatened to blow up the plane if demands are not met, although the nature of these demands are not yet known. It’s reported that Libyan and Maltese authorities are in negotiations with the hijackers.

All Libyan carriers are banned from flying to the European Union under the bloc’s so-called aviation safety blacklist. The EU took the step two years ago because of concern that political turmoil in the country meant safety oversight by Libyan aviation officials couldn’t be assured.

Afriqiyah Airways has been the victim of Libya’s political unrest before. In 2014 attacks by militias on Tripoli Airport destroyed and damaged several of its planes. Four years earlier some of its planes were similar destroyed at Tripoli’s airport in fighting. The airline has a fleet of six active planes, all made by European plane maker Airbus.

Malta’s President Marie-Louise Coleiro tweeted to appeal “for everyone to remain calm and follow official updates.”

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European stocks halted two days of declines, with the Stoxx 600 fractionally in the green and Italy’s bonds climbing after Monte Paschi requested a bailout and Italy pledged to provide support for its other ailing lenders. S&P futures were little changed among extremely thin volumes while Chinese stocks dropped amid concerns on higher borrowing costs. Oil slid, while gold advanced; bitcoin soared to multi-year highs, rising above $900.

The biggest financial story, in addition to the expected Deutsche Bank and Credit Suisse settlements, was the nationalization of Italy’s Monte Paschi and the country’s backstop of further bailouts with a new €20 billion fund set aside to fund additional bank rescues.  As a result, Italian 10-year bonds lead gains among major European securities after the government said it will plow as much as 20 billion euros ($21 billion) into the country’s banks and Banca Monte dei Paschi di Siena SpA said it will ask for a “precautionary” capital increase. Deutsche Bank AG also rose after the lender agreed to settle U.S. mortgage probes. “It’ll be a relief to investors,” George Boubouras, the chief investment officer of Melbourne-based Contango Asset Management Ltd., told Bloomberg.

Following last night’s nationalization request, Monte Paschi shares have been suspended from trading.

“Banks run the show today,” analysts at Kepler Chevreux said in a note to clients, adding that the newsflow around Italian lenders was turning positive.

Deutsche Bank’s $7.2 billion settlement with the U.S. Department of Justice over toxic mortgage securities sold in the run-up to the 2008 financial crisis was nearly half of the fine initially levied in September. Deutsche Banks shares rose 2.7 percent and are up 86 percent since September lows. Credit Suisse fell 0.6%, giving up earlier gains, after it agreed to pay $5.3 billion to the DOJ to settle similar charges. Barclays became the latest in a long-list of other lenders under investigation to be sued.

The bank sector news helped the Stoxx Europe 600 Index hold this month’s 5.3% rally that has taken it within 1.6% of wiping out its losses for the year.

In the U.S., a rally that took indexes to a record stalled as the Dow Jones Industrial Average neared 20,000 and as trading wound down before December holidays. In the last day of trading before Christmas in Europe, stock volumes were about 40% lower than the 30-day average. , Japanese markets were closed today for Emperor’s Birthday holiday.

The dollar headed into the Christmas break on Friday just over half a percent off highs hit after this month’s U.S. Federal Reserve policy meeting. The dollar is up more than 7 percent against a basket of currencies since lows hit on U.S. election night in November but has been flat for the past week. The dollar index .DXY, hovering near a 14-year high, was marginally lower at 103.03 but remained within striking distance of the week’s 103.65 peak.

In bonds, Italian 10-year yields declined four basis points to 1.81 percent, while German bund yields slid one basis point to 0.25 percent. Treasuries were little changed after 10-year yield climbed two basis points to 2.55 percent on Thursday.

The UK economy expanded at a 0.6 percent pace in the three months to September, faster than the original estimate of 0.5 percent, suggesting there has been no “Brexit” hit to economic activity so far since the June 23 vote to leave the European Union.

* * *

Market Snapshot

• S&P 500 futures unchanged at 2259
• Stoxx 600 up less than 0.1% to 360
• FTSE 100 down less than 0.1% to 7061
• DAX up 0.1% to 11468
• German 10Yr yield down 1bp to 0.25%
• Italian 10Yr yield down 5bps to 1.8%
• Spanish 10Yr yield down 1bp to 1.39%
• S&P GSCI Index down 0.4% to 390.6
• MSCI Asia Pacific down 0.2% to 135
• Nikkei 225 closed
• Hang Seng down 0.3% to 21575
• Shanghai Composite down 0.9% to 3110
• S&P/ASX 200 down 0.3% to 5628
• US 10-yr yield down less than 1bp to 2.54%
• Dollar Index down 0.11% to 102.98
• WTI Crude futures down 0.6% to $52.64
• Brent Futures down 0.6% to $54.74
• Gold spot up 0.2% to $1,131
• Silver spot up 0.1% to $15.82

Top Headline News

• Paschi Seeks State Aid as Italy Readies $21 Billion for Banks: Monte Paschi recapitalization effort misses bank’s target
• Deutsche Bank, Credit Suisse Settle U.S. Probes as Barclays Sued: Banks pay $12.5b to end probe into sales of toxic debt
• Boeing-Versus-Lockheed Fighter Rivalry Reopened by Trump Tweet: Trump said he wants Boeing to price out F-35 competitor
• Exxon Norway Assets Said to Attract Aker BP, Hitec, Neptune: Offshore oil fields said to be valued at about $1 billion
• Merck’s Ebola Vaccine Found to Protect Against Deadly Virus: Vaccine was studied in trial involving >11,000 people in Guinea
• Fred’s Attracts Activist as Alden Unveils 25% Stake on Deal: Alden also running activist campaign at retailer Pier 1 Imports
• MegaFon to Buy Mail.ru Stake for $740 Million From Usmanov: Wireless carrier gains control of 63.8% of web company’s votes

Looking at Asian markets, stocks traded subdued following the negative lead from the US, where the 20,000 level continued to elude the DJIA, with markets very quiet amid the absence of Japan and ahead of Christmas holidays. 9 out of 11 sectors decline in the MSCI Asia Pacific Index with information technology, materials underperforming and utilities, industrials outperforming “Looking at the last few days, from a technical perspective we’ve seen this move up on lighter volume and it seems like all the buying pressure has been exhausted,” said James Woods, a Sydney-based investment analyst at Rivkin Securities, with regards to the A&P/ASX 200 Index. ASX 200 (-0.3%) was led lower by basic material names after iron prices declined around 4% to a 3-week low, with trade also light ahead of the upcoming 4-day weekend. Shanghai Comp. (-0.9%) and Hang Seng Index (-0.2%) were negative despite the PBoC attempting to ease liquidity concerns by injecting more funds this week, as prospects of tighter regulation on investments by insurers and brokerages dampened risk sentiment. Finally, Japanese markets were shut today for the Emperor’s Birthday holiday. PBoC injected CNY 90bIn 7-day reverse repos, CNY 50bIn in 14-day reverse repos, CNY 5bIn in 28-day reverse repos for a net weekly injection of CNY 375b1n vs. previous injection of CNY 250b1n last week.  PBoC set the mid-point at 6.9463. China is said to regulate alternative investments by brokerages, according to press reports.

Top Asian News:

• Saipan Casino Bond on Hold Risks Future of $7 Billion Resort: Imperial Pacific issuance to fund casino said to be shelved
• World’s Worst Air Has Mongolians Seeing Red, Planning Action: Dec. 26 action set amid smog five times worse than Beijing
• A Goldman You’ve Never Heard of Is Pursuing a Hong Kong IPO: Local electrical subcontractor adopted Goldman name last month

In Europe, the final quiet start before the Christmas break has seen European equities trade higher this morning (Euro Stoxx: +0.2%), with Deutsche Bank (+2.3%) leading the charge after reaching a settlement of USD 7.2bIn with the DoJ (vs. USD 14bIn initially requested). Credit Suisse (-0.6%) also reached an agreement with the DoJ although failed to see quite the same upside, while Barclays (-1.2%) rejected a fine and as such are facing litigation. Today is one of the few days in 2016 where Banca Monte dei Paschi are not leading the way higher/lower across equities…given that they are suspended from trade after failing to raise sufficient funds through their recapitalisation plans and as such will receive state aid. Elsewhere, fixed income markets have continued the subdued trade seen throughout the week. Bunds have traded flat so far today, with Gilt futures seeing modest outperformance, with the move coming in tandem with softness being seen in GBP.

Top European News:

• NN Group to Buy Dutch Rival Delta Lloyd for $2.6 Billion: Delta Lloyd returned to profit in first half after cost cuts
• U.K. Current-Account Deficit Widens; GDP Growth Revised Up: Higher: 3Q trade deficit widnens to 2.8% of GDP, most since 2013
• Brexit Shapes Up to Be ‘Hard’ 6 Months After Vote, Academics Say: EU is playing ‘hardball’ with U.K. in divorce proceedings

In currencies, the euro advanced for a third day against the dollar, adding 0.2 percent to $1.0455. The pound rebounded from the lowest level since Nov. 2 versus the greenback after data showed the U.K. economy expanded more than initially reported in the third quarter. The currency was little changed at $1.2277, after earlier touching $1.2246. Little to note elsewhere as the remnants of the market look to wind down for the Xmas break. The lead EUR/USD and USD/JPY rates are trading in extremely tight ranges, but some very modest USD tiredness to note ahead of the break. Weakness in the commodity currencies also subsides, but little to glean from today’s price action.

In commodities, gold edged higher in London trading, adding 0.3 percent to $1,131.74 an ounce. It’s still set for a seventh week of declines. West Texas Intermediate crude for February delivery in New York fell 0.6 percent to $52.66 a barrel.

US Event Calendar

• 10am: New Home Sales, Nov., est. 575k (prior 563k)
• 10am: U. of Mich. Sentiment, Dec. F, est. 98.0 (prior 98.0)
• 1pm: Baker Hughes rig count

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Shortly after last night’s news that Deutsche Bank had settled with the DOJ for $7.2 billion, of which it would pay $3.1 billion in a civil penalty, far lower than the $14 billion number initially speculated (the stock popped as much as 4% before settling just over 2% higher currently), Credit Suisse likewise closed the books on its pre-crisis RMBS fraud when the largest Swiss bank agreed to pay $5.28 billion to resolve a U.S. investigation into its business in mortgage-backed securities. Credit Suisse will pay a $2.48 billion civil penalty and $2.8 billion in relief for homeowners and communities hit by the collapse in home prices, it said in a statement Friday. Credit Suisse will take a pretax charge of about $2 billion in addition to its existing reserves during the fourth quarter.

The two settlements follow a surprise announcement by the DOJ which said on Thursday it sued Barclays Plc for fraud over its sale of mortgage bonds after the bank balked at paying the amount the government sought in negotiations. The lawsuit announced on Thursday is rare for big banks, which typically settle with the government rather than risk drawn-out litigation and a possible trial.

“With this settlement, the largest remaining major uncertainty is now eliminated” for Credit Suisse, Peter Casanova, an analyst at Kepler Cheuvreux told Bloomberg. “This is good news.”

The Obama administration is pressing to wrap up investigations of Wall Street firms for creating and selling the subprime mortgage bonds that fueled the 2008 financial crisis. Before the two deals on Friday, authorities had already extracted more than $46 billion in fines from six U.S. financial institutions over their dealings in mortgage-backed securities. Bank of America Corp., which had the largest such settlement, agreed to pay $16.7 billion over bonds that were worth four times those of Deutsche Bank. Meanwhile, Deutsche Bank said that the fine will cut its pretax profit by $1.2 billion this quarter as the firm taps existing legal reserves to blunt much of that cost.

Credit Suisse said it would pay the consumer relief over five years following the settlement. The bank had set aside about 2.1 billion francs ($2.1 billion) in general litigation provisions by the end of the third quarter.

Chief Executive Officer Tidjane Thiam tapped shareholders for 6 billion Swiss francs in late 2015 while shifting the company’s focus away from capital-heavy investment banking toward wealth management. Thiam has updated investors twice on his plan, which includes a partial initial public offering of its Swiss unit in late 2017. In December, the former insurance executive pledged more cost cuts and lowered targets for the international wealth management and its Asian unit.

As Bloomberg adds, the Swiss bank remains under Justice Department scrutiny over its handling of U.S. clients in Israel. The department fined Credit Suisse $2.6 billion in 2014 for helping Americans dodge taxes in Switzerland. The bank is also a target of several antitrust cases in the U.S., including class actions related to foreign-exchange rates and interest-rate swaps.

At least three other European banks remain under investigation over the role of their mortgage-backed securities business: UBS, HSBC and Royal Bank of Scotland. In addition to Bank of America, U.S. banks that have settled include Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley. Wells Fargo & Co. and Moody’s Corp. have disclosed U.S. investigations into their mortgage-backed securities dealings and have said they’re cooperating.

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Anis Amri, the man believed to be behind the Christmas market in Berlin was killed in a shootout in Milan, Italy’s Interior Minister Marco Minniti said at a press conference in Rome.

1. L’aggressore di Milano fermato da volante del commissariato Sesto San Giovanni durante un normale servizio di controllo del territorio http://pic.twitter.com/GmdIK0M9WS

— Polizia di Stato (@poliziadistato) December 23, 2016

Interior Minister Marco Minniti said during a press conference that Anis Amri, was stopped on foot by police patrols at around 3 a.m. during a routine check in the Sesto San Giovanni neighborhood. When the officers asked Mr. Amri for identification, he pulled out a 22 caliber gun from his backpack and began to shoot. The police returned fire, killing him.

“Without any doubt the person killed is Anis Amri, the man suspected in the Berlin terrorist attack,” Minniti said at a press conference.

“There is absolutely no doubt that the person who was killed is Anis Amri” – Italy’s interior minister Marco Minniti https://t.co/bArceiTFUI http://pic.twitter.com/MMsSh5H5rm

— BBC Breaking News (@BBCBreaking) December 23, 2016

One police officer was injured, but his injuries are not life-threatening, according to tweets from the police.

Earlier on Friday, Italian authorities said Amri was killed in a shootout with police in Milan on Thursday night. A short video posted on the website of Italian magazine Panorama suggested the shooting happened before dawn, with police gathered around a cordoned-off area in the dark.

EIL: Anis Amri nach Attentat auf #Breitscheidplatz Dienstag früh in Moabit gesichtet. @rbbabendschau liegen Überwachungsaufnahmen vor. http://pic.twitter.com/SPmdidRiPM

— rbb|24 (@rbb24) December 22, 2016

Conflicting news reports previously suggested the opposite. The German Police claimed that the suspect was hiding in Berlin. On Thursday, RBB released CCTV footage showing him at a local mosque one day after the attack. The police said Amri was injured, and therefore would not risk travelling too far.

German federal police had issued a rare international wanted notice for Mr. Amri—who arrived in Germany last year after time in an Italian prison—and offered a €100,000 ($104,000) reward, warning that he could be armed and dangerous. German authorities have come under criticism over accusations they failed to stop Mr. Amri, a 24-year-old asylum seeker, despite being aware of his radicalization.

As the WSJ adds, since the Monday attack, German security and judicial officials have said they had known about the potential risks he posed for about a year, had put him under surveillance and even detained him briefly, but failed to deport him and later lost track of him. The extent of authorities’ prior knowledge and growing concern about the danger Mr. Amri posed was made even more apparent on Thursday when a senior U.S. official said Germany had notified the U.S. about him. U.S. authorities then added his name to a terrorism watch list.

German officials in November provided more information and U.S. officials decided to put Mr. Amri’s name on a no-fly list, an indication that they believed he posed a more significant threat than they previously thought, the official said.

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Submitted by Brian Cloughley via Strategic-Culture.org,

The Nazi propagandist Josef Goebbels is generally thought to have said that «If you tell a lie big enough and keep repeating it, people will eventually come to believe it». In fact, he didn’t state that, exactly, but based his propaganda largely on the premise that «credibility alone must determine whether propaganda output should be true or false». What he did say, however, was «the English follow the principle that when one lies, one should lie big, and stick to it. They keep up their lies, even at the risk of looking ridiculous».

Not much has changed on the propaganda front in seventy-five years, and the evil Goebbels would feel at ease with modern developments as regards the Western Establishment’s campaign against President Putin and soon-to-be President Trump.

On December 16 the newspaper USA Today reported that «President-elect Donald Trump’s controversial soft spot for Russia is based on decades of courting wealthy Russians to buy condos in his luxury high-rises and invest in his other real estate ventures». This line of attack is intriguing because the high-circulation USA Today is owned by the Gannett Company, which «in 2010 increased executive salaries and bonuses… Bob Dickey, Gannett’s US newspapers division president, was paid $3.4 million in 2010, up from $1.9 million the previous year. The next year, the company laid off 700 U.S. employees to cut costs». No luxury high-rises for Gannett employees, then, unless they are in the top echelon.

In Britain the Guardian, usually an even-handed and objective source of news and comment, went with the flow of anti-Russia overkill and produced a report that began «Alarm over the rise of Donald Trump reached a new pitch early this week as officials in Washington worried that the United States has elected a leader who may be uniquely blind to threats posed by Russia». It did not mention what the threats might be, but did have the honesty to end with the words of President Putin that «as I have repeatedly said, it’s not our fault that Russian-American relations are in such a poor state. But Russia wants and is ready to restore fully fledged relations with the United States».

Of course, Russia wants to have good relations with other countries. Such a sensible approach results in commercial benefit and social harmony rather than disharmony and confrontation. But in the period when Russia was trying to rebuild from the dire days of Soviet ideology the West expanded the US-NATO military alliance to 28 countries from 16, and recently deployed US-NATO forward tactical headquarters, thousands of troops, and flights of combat and intelligence-gathering aircraft to countries on Russia’s borders. As I noted a couple of weeks ago, «In Bulgaria, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia the Alliance has established ‘NATO Force Integration Units’ which are advanced military headquarters whose Mission is ‘to improve cooperation and coordination between NATO and national forces, and prepare and support exercises and any deployments needed’».

Then some nations became agitated when Russia deployed defensive weapons within its own territory in order to counter the US-NATO movement of armed forces up to is borders.

As reported by Britain’s ultra-right Daily Telegraph, owned by the creepy twin Barclay brothers who own London’s Ritz Hotel and many luxury high-rises (and hate the European Union, while living in the haven of tax-relaxed Monaco), NATO «described Moscow’s decision to send state-of-the-art Bastion missile-launchers to Kaliningrad, which borders Nato members Poland and Lithuania, as ‘aggressive military posturing’». There was no mention made of President Putin’s explanation that Russia considered it important to take countermeasures against NATO’s expansion and «aim our missile systems at those facilities which we think pose a threat to us».

As observed by Goebbels, the English propagandists «keep up their lies, even at the risk of looking ridiculous».

Consistent with the Goebbels line of sticking to skewed presentation, Britain’s defence minister, Michael Fallon, a public figure of mixed repute (he is known for alcoholic capers and was found guilty of drunken driving as well as having swindled the Parliamentary expenses system out of thousands of pounds over many years), was reported by Reuters as declaring that the West had «to be strong against Russian aggression towards NATO… Russia is a strategic competitor to us in the West and we have to understand that».

Fortunately, there are sounder and better informed people than the drunken fiddler Fallon, and one of these is the specialist Peter Duncan of University College London whose more sober opinion is that «there is no reason for Russia to want to threaten the sovereignty of the Baltic states in the sense of trying to force them to leave NATO or still less to invade them… the Russian economy depends on a prosperous Western European economy».

The Far-Right Western media ignored Professor Duncan’s balanced summation, just as it disregarded President Putin’s own assurance, given in a little-reported interview with Italy’s Il Corriere della Sera, that «I think that only an insane person and only in a dream can imagine that Russia would suddenly attack NATO».

But it’s lies that matter when false dogma is being spread. The US-NATO military alliance doesn’t really believe that Russia is preparing to attack the Baltic States and on December 16 President Obama even informed the world media that in his opinion Russia is «a small country, they're a weak country» which tends to contradict the propaganda line that Russia is a large country, a «strategic competitor» straining at the leash to invade the Baltic States and create mayhem around the world.

The fact that the US spends 596 billion dollars annually on armaments against Russia’s 66 billion is rarely mentioned (NATO as a whole spends 860 billion) except in reputable journals such as The Economist which on December 17, however, chose to pronounce that Mr Trump’s choice of Rex Tillerson to be Secretary of State «is disconcerting» because Mr Tillerson actually displayed «opposition to the sanctions imposed on Russia».

The Western propaganda line is that everything Russia does is reprehensible to the point of evil, and that any westerner attempting to propose dialogue rather than confrontation is «disconcerting» at best, and in the eyes of the tabloid papers a raving traitor to the values of the plutocrats who own them.

The policies and aspirations of President Putin are being presented by the US-NATO military alliance as contrary to the interests of the Western powers, but no attention has been paid to such as Bill Clinton’s deputy secretary of state, the Russia specialist, Strobe Talbott, who stated the obvious when he observed that President Putin «basically wants to make Russia great again». And he won’t do that by invading the Baltic States or any other country, as he and the West well know. It’s about time the Big Lies were laid to rest.

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