Category: zerohedge

With the US out on holiday for the 4th of July, overnight trading volumes have been muted, as Europe started off in the red but has since trimmed most losses (Stoxx 600 -0.1%) while S&P500 futures rose shaprly from session lows spurred by the European open ignoring the risk-off sentiment from North Korea’s latest missile launch, trading 0.2% higher, or up 4 points to 2,429 and closing the gap to Monday’s last minute tech-driven market selloff.

For those pressed for time, today’s 60-second market wrap comes from Citi, which titles it appropriately enough, “Cause baby you’re a firework“

Those celebrating Independence Day today will no doubt have hoped that it wouldn’t have resembled the eponymous movie quite so vividly – Fireworks are to be expected on July 4; Intercontinental Ballistic Missiles are undoubtedly overkill. As London walked in, North Korea was releasing a statement to crow over its most successful missile launch to-date: An ICBM was fired which flew for a record time/altitude for the rogue state. The move is highly provocative and it is difficult to imagine that the date chosen was in any way coincidental (NK did the same in 2006 and 2009). The inevitable risk-off reaction in markets in Asian hours was prompt but limited – the enormity of this latest crisis is, as yet, difficult to gauge.

 

Along with some small follow-through from the initial risk-off move, today has been dominated by G10 central bank events. Both the RBA and the Riksbank neglected to join the ever-growing ranks of hawkish central banks – hope now rests with the BoC next week (July 12) after an encouragingly hawkish interview with Governor Poloz was published this morning. The BoE’s MPC is quite clearly of two minds at the moment: Vlieghe unsurprisingly reiterated his dovish stance in a UK newspaper, and placed his own emphasis on consumption data (in contrast to Haldane last week, who pointed towards wages), while McCafferty explained, in a separate interview, why he voted for a hike in June.

Back to the action, USD/JPY has retraced the early selloff as central bank trading teams walked to their desks. Bund futures open higher, following USTs before settling in a tight range as curves steepen marginally. European equity markets trim opening losses, led by insurers and banks. Thin trading likely into European afternoon as U.S. cash Treasury and equity markets shut for holiday

Speaking of tech, the Nasdaq “glitch” that froze the prices of an unknown number of companies at 123.47 continues, appears to have been partially resolved.

Overnight, there were two central bank announcements, with both Autralia’s RBA and the Swedish Riksbank keeping rates on hold as expected, at 1.5% and -0.5%, respectively, also investors were disappointed as Australia’s central bank failed to join global counterparts in talking up policy tightening after warning that a “rising AUD complicated the economic adjustment.” EUR/SEK traded sharply higher despite the Riksbank removing its easing bias as policy makers leave rest of the repo rate path unchanged.

Markets initially reflected a risk-off reaction to the North Korean ICBM announcement, with UST futures and JPY rallying before gradually reversing through European morning. Asian shares turned lower on Tuesday as earlier gains were quashed by tensions on the Korean peninsula after the latest North Korean launch which landed in Japanese waters, deepening concerns over the isolated nation’s nuclear capabilities. North Korea claimed the missile was its first ICBM ever tested, and as a result Australian sovereign bonds caught a bid while the Korean won dropped to the lowest in almost four months. The Bloomberg Dollar Spot Index rose modestly by 0.1% , after jumping 0.5% in the previous session. The dollar strengthened the most in two weeks after a short covering squeeze on Monday, prompted by a paradoxical surge in the manufacturing ISM even as the Manufacturing PMI tumbled to the lowest level since last summer.

Early market optimism sparked by bullish U.S. economic data faded and the yen strengthened as gold was headed for its first gain in four days. European stocks slipped led by telecom and technology shares, while oil also stalled after OPEC production increased. The Australian dollar slumped as the nation’s central bank left rates unchanged.

In Asia, the yen rose as much as 0.5 percent after North Korea’s missile test, rebounding after tumbling 0.9% on Monday. The Aussie dollar dropped 0.9% , erasing an earlier gain. Hong Kong’s Hang Seng fell 1.5%, with Galaxy Entertainment Group Ltd. and Tencent Holdings Ltd. among the biggest losers on concerns about Macau cash access after the latest crackdown on ATMs as well as China’s rising regulations on online games.  Sydney shares were boosted by solid retail sales data although the Aussie fell after RBA left policy on hold. The dovish shift however helped local stocks and Australia’s S&P/ASX 200 Index jumped 1.8%, the most since Nov. 10, with stocks bouncing back after a two-day slump totaling 2.3% as banks surged 2.2%. Over in China, the PBOC skipped open market operations for an 8th consecutive session, and with the recent stronger than expected PMI data, has Chinese government bonds lower for a fifth day on concerns Beijing may once again be tightening too aggressively. The Shanghai Composite closed 0.4% lower while iron ore slid 2.9% on China-related concerns and profit taking after recently entering a bull market.

In commodities, WTI crude slipped 0.3% to $46.93 a barrel, after rising 2.2% on Monday for the eighth day in a row as oil had a V-shape rebound (as Citi predicted 2 weeks ago) after falling into a bear market. According to a Bloomberg survey, OPEC production in June climbed 260k b/d to 32.55m b/d, its highest level of the year as Libya and Nigeria pumped more. Half of increase came from the 2 nations, which are not required to reduce output under OPEC-led deal. U.S. crude inventories probably dropped by 2.5m bbl last week, Bloomberg survey shows before the DOE report Thursday.

“Supply is well and truly adequate,” says David Lennox, a resource analyst at Fat Prophets in Sydney “Oil could quite easily revisit its lows again if we don’t see stronger seasonal demand from the U.S. and OPEC members increase output further.” For now, however, it is higher.

Gold rose 0.3% to $1,224.15 an ounce, its firstr gain in 4 days, after dropping 1.7% on Monday for its biggest loss of the year amid the dollar’s advance.

In currencies, the yen rose 0.1% to 113.17 per dollar in early trading after the currency tumbled 0.9 percent on Monday. The Bloomberg Dollar Spot Index gained 0.1%, continuing the stronger trend observed on Monday. The pound fell 0.2 percent to $1.2917 after halting an eight-day rally on Monday.  The euro was also 0.2 percent lower at $1.1351.

In rates, the yield on 10-year Treasuries rose five basis points to 2.35 percent on Monday, after surging 16 basis points last week. The US bonds market is closed Tuesday. U.K. 10-year yields dropped one basis point to 1.24 percent.

Key overnight headlines:

• North Korea claims latest missile fired was an ICBM capable of hitting anywhere in the world; China foreign ministry says it opposes missile launch activities that go against UN resolutions, urges restraint
• Abe says N Korean threat escalating; Japan-U.S.-S.Korea to work together
• RBA: keeps rates unchanged; says inflation and the economy to strengthen
  gradually; appreciating AUD would complicated the economic adjustment
• Riksbank keeps rates unchanged at -0.50% as expected, also removes easing bias from rate path as expected; warns SEK must not appreciate too rapidly
• BOE’s McCafferty: would be prudent to hike rates now given the balance of monetary policy
• BOE: warns banks and finance firms to monitor risks in relation to high consumer credit levels
• BOC’s Poloz sees inflation well into uptrend in 1H 2018: HB
• BOJ ’regime change’ would bolster public confidence, Abe adviser Honda says
• China’s 2017 economic growth may be higher than 2016: Securities News

Market Snapshot

• S&P 500 futures up 0.2% to 2,429.01
• Crude oil down 0.4% to $46.89/bbl
• Natgas up 0.4% to $2.96/Mmbtu
• Gold up 0.4% to $1,223.70/oz
• Silver down 0.07% to $16.03/oz

Looking at the day ahead, with it being Independence Day in the US and with markets across the pond subsequently closed, it will be a quiet day ahead. Data-wise the only release due is the PPI for the Euro area this morning, which added more headaches to the ECB after printing -0.4% M/M, missing expectations of a -0.2% drop. It’s worth noting some of the ECB speak however with both Praet (1.30pm BST) and Nowotny (5.30pm BST) scheduled to speak. We’ll also get the latest ECB CSPP monthly data while the BoE will publish the record of the FPC meeting held last week. China President Xi Jingping is also due to visit Russia President Putin today in Moscow, ahead of Friday’s G-20 meeting.

* * *

DB’s Jim Reid concludes the overnight wrap

Welcome to what I last year christened AMEXIT Day. Given all the current talk about Brexit we should maybe ask our cousins across the pond how they coped with leaving the British Empire 241 years ago! Anyway this could be my last ever EMR this morning as the job of a lifetime came up yesterday. Long-time readers will know that as a kid I was obsessed with the band Spandau Ballet. Well yesterday the distressing news (to me anyway) came through that lead singer Tony Hadley has permanently left the band. Although the press releases were cryptic it seems the band are going to continue without him. If so they’ll need a lead singer and I know every word to every single one of their songs (including obscure album tracks) and have spent a lifetime singing them in my bedroom, at concerts and at Karaoke bars all over London and the south east. There is not a more qualified candidate and therefore I’d expect my application to be accepted. In the unlikely event that it’s not we’ll be back tomorrow and those in the US will be none the wiser.

Indeed with the US winding down early yesterday ahead of today’s holiday, trading was a little thin but the biggest story was the outsized gain in the US manufacturing ISM. The 57.8 reading for June came in well ahead of the consensus estimate of 55.3 with the print also marking a decent 2.9pt increase over May. It also marginally eclipsed February’s reading to be the highest since August 2014. The details were equally supportive. New orders rose a full 4.0pts to 63.5 and the highest since March, production rose 5.3pts to 62.4 and the highest since February while the employment index came in at 57.2 which is a 3.7pt increase versus May. Yesterday’s ISM also stood in contrast to the much lower manufacturing PMI which was revised down 0.1pts yesterday to 52.0 and to the lowest since December last year.

Our US economists noted that the June ISM reading corroborates some of the strength already evidenced in the regional PMI surveys and that the data points to 3% plus real GDP growth in Q2. Needless to say that the employment component of the data is also particularly supportive ahead of Friday’s payrolls print which is the next big data print.

Over in markets yesterday that data sparked a fresh leg higher for Treasury yields with the 10y rising 4.6bps and for the fifth session in succession to 2.351%. In fact that is the first time that the 10y has gone above 2.350% since May 16th. 2y yields were also 2.8bps higher at 1.412% while 30y yields ended 3.3bps higher at 2.868%. Bunds also sold off on the data although the move was much less exaggerated with the 10y finishing just 1.0bp higher at 0.474%. Meanwhile the data also helped the US Dollar to bounce back following a sharp move lower last week. The Dollar index ended +0.62% with EM currencies feeling the pinch. The South African Rand (-1.04%), Turkish Lira (-0.99%), Polish Zloty (-0.96%) and Hungarian Forint (-0.60%) were amongst those to tumble. A similar sell-off was also felt in precious metals with Gold (-1.72%) in particular hitting a seven-week low. I don’t think it was to do with the Spandau Ballet news.

Elsewhere, US equity markets were a bit more mixed. A decent rally for banks (+1.45%) and the energy sector (+2.01% after WTI Oil passed $47/bbl) helped the S&P 500 kick off H2 with a +0.23% gain while the Dow (+0.61%) briefly passed its record high intraday. On the other hand the Nasdaq (-0.49%) closed at the lowest level since May 19th as the theme of underperformance for tech stocks continues. The Nasdaq VIX (VXN Index) also hit 18.74 yesterday and the highest since November last year. The VIX on the other hand is hovering at 11.22 and well below the peaks of April and May.

Meanwhile in Europe equity markets bounced back in style. The Stoxx 600 closed +1.06% (although still only pared 50% of last week’s decline), DAX +1.22% and FTSE MIB +2.08%. Financials and energy names were also the big contributors with the moves also getting a helping hand from an overall decent set of European manufacturing PMIs. The June reading for the Euro area was revised up 0.1pts to a seventy-four month high of 57.4 which compares to 57.0 in May. The country breakdown saw Germany (59.6) also hit a 74-month high along with the Netherlands (58.6), Austria (60.7) a 76-month high, Ireland (56.0) a 23- month high and Italy (55.2) and France (54.8) two-month highs. Notably Greece (50.5) also hit a 37-month high and printed above 50 for the first time since August last year. Spain (54.7) did however nudge down to a 2-month low. Outside of the Euro area the data for UK was a little disappointing after dropping 2pts to 54.3 and to the lowest since March.

Staying in Europe, there was a bit of focus on some ECB headlines yesterday. Specifically it was the Reuters article which suggested that some policymakers were having doubts about signalling that the ECB is moving closer to lifting its QE easing bias at this month’s meeting. The article suggested that the ECB could consider removing only part of the easing bias by leaving reference to either the size or duration of QE. In fairness this appears closer to the ‘softer taper’ approach which would be somewhat reflective of Draghi’s Sintra speech last week so the article didn’t appear to be a huge surprise.

The other development to note in Europe yesterday was French President Emmanuel Macron’s speech in parliament. Perhaps most notable was Macron suggesting that he could use a referendum for institutional reforms should parliament fail to sign off major reforms quickly enough. Macron confirmed that he would cut the number of MPs and also allow more proportional representation with an overhaul of the election system to allow smaller parties to be represented better. Looking at referendums over the last two years it’s worth noting that those in Greece (eventually accepting harsher bailout conditions than those voted on), UK and Italy haven’t worked out well for those that have called them so recent history would tell us that this could well be a risky option for Macron should he choose it.

Quickly jumping over to the latest in Asia where bourses are a lot more mixed as we go to print. While the Nikkei (+0.43%) and ASX (+1.72%) have edged higher (the latter boosted by commodity names), the Hang Seng (-1.11%) has fallen sharply in the last 20 minutes into the midday break although the exact reasons are not entirely clear, while the Shanghai Comp (-0.50%) and Kospi (-0.32%) are also down. There is a bit of focus on comments from China President Xi about a “negative” turn in its relationship with the US following a telephone conversation with President Trump on Monday. Meanwhile the Yen briefly spiked on the news that North Korea has tested another ballistic missile in to the Sea of Japan. The other event of note overnight is the RBA meeting where as expected there was no change to policy, however a slump in the Aussie Dollar (-0.50%) immediately following the statement release suggested that overall tone was a bit more cautious from policy makers than perhaps expected.

Wrapping up the remaining data yesterday, the only other release in Europe was the unemployment rate for the Euro area which was reported as holding steady at 9.3% in May. In the US we learned that construction spending in May was flat after expectations had been for a modest rise. Finally late in the evening total vehicle sales for June came in at an annualized 16.4m which was a fraction lower than expected.

Looking at the day ahead, with it being Independence Day in the US and with markets across the pond subsequently closed, it looks set to be a pretty quiet day ahead. Data-wise the only release due is the PPI for the Euro area this morning (-0.2% mom expected). It’s worth noting some of the ECB speak however with both Praet (1.30pm BST) and Nowotny (5.30pm BST) scheduled to speak. We’ll also get the latest ECB CSPP monthly data while the BoE will publish the record of the FPC meeting held last week. China President Xi Jingping is also due to visit Russia President Putin today in Moscow, so that might be worth  keeping an eye on.

via http://ift.tt/2uFzq2U Tyler Durden

Over the weekend we wrote a note about how the European auto lenders are becoming just about as ridiculously undisciplined as their counterparts in the United States.  Apparently an ever-growing reliance of European millennials on lease financing has auto ABS investors worried about a potential crash in used car prices at some point in the not so distant future…that sound familiar to anyone?

But a new undercover investigation by the Daily Mail exposes just how “undisciplined” the auto lending market has become in England.  Here are the headlines:

• Reckless car loan salesmen exposed: How dealers are luring young drivers into massive debt by offering them new top-brand cars with NO cash up front

• Salesman are offering customers cars worth up to £20,000 for no deposit

• The deals make the customers pay back hundreds of pounds a month for years

• The cars are being offered to those on low wages and with poor credit rating

• Experts in the City fear the huge numbers could default and cause a crash

• If drivers fall behind on payments the cars can be automatically repossessed

Of course, for American auto consumers nothing about the headlines above is all that shocking.  In fact, we recently noted how one dealership in Texas was literally marketing a $1,500 “Low Credit Score” discount to buyers on a $55,000 truck.  We guess it never occurred to anyone that perhaps, just maybe, a person with a credit score under 620 shouldn’t be shopping around for a $55,000 vehicle? 

 

But we digress…back to Europe.  As the Daily Mail points out, their undercover reporters visited a total of 22 dealerships and were repeatedly offered cars of various values with no money down and despite reporters admitting that they had no job and no source of income. 

Reporters visited 22 dealerships in England and Scotland, saying they were in their early twenties and either unemployed, on low incomes or trying to buy a car despite having poor credit ratings. Half of the dealerships – including ones selling Audis, Mazdas, Suzukis, Fords, Vauxhalls and Seats – told them they could have a brand new car without paying a penny up front.

 

In each case they were offered Personal Contract Purchase (PCP) deals – a type of car loan that now makes up nine out of ten car sales bought on finance in Britain.

 

These deals offer smaller monthly payments than traditional car loans.

 

A reporter who said he was working part-time on the minimum wage was offered a £15,000 Seat Ibiza without a deposit at a Seat dealership in Manchester.  Another reporter suggested that he had bad credit, but he was offered an £8,600 Vauxhall Corsa in Birmingham.

 

Kevin Barker, 71, found himself £3,500 in debt when he suffered a heart attack six months into a PCP deal. He said a ‘pushy’ Toyota salesman ‘pressured’ him into taking out a 36-month agreement in November 2014 and he was not told of the repercussions if he fell ill or lost his job.

 

Meanwhile, an Audi dealer in Edinburgh offered an out-of-work, 24-year-old a deal on a brand new £15,000 Audi A1 hatchback.

‘You’ve had credit before?’ he asks, leaning forwards. ‘You’ll be fine then.’

 

The salesman is trying to sell a £15,000 Audi A1 hatchback to a 24-year-old who has wandered in from the street.

 

The buyer – an undercover Daily Mail reporter – has said he is out of work. He is applying for jobs, he says, and hopes to find one soon – but he fears he won’t pass a credit check. Surely this means he cannot afford a brand new Audi?

 

The confident dealer appears to have no qualms about offering him the car. He declares that for monthly payments of £215 for just 48 months, the unemployed buyer can happily drive out of the Edinburgh showroom. And after the deal ends, all he needs is another £6,958 to own it outright.

 

The scenario seems unfathomable. How can such a high-value car loan be offered to someone in their early twenties who doesn’t have a job?

 

Yet an investigation by the Mail has found that similar conversations are happening in showrooms across the country.

Seems that our neighbors across the pond are learning how to maximize their GDP potential through an ill-advised, yet massive, expansion of consumer credit.

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Authored by Soeren Kern via The Gatestone Institute,

• Many so-called asylum seekers have refused to relocate to Central and Eastern Europe because the financial benefits there are not as generous as in France, Germany or Scandinavia. In addition, hundreds of migrants who have been relocated to Estonia, Latvia and Lithuania, which rank among the poorest EU countries, have since fled to Germany and other wealthier countries in the bloc.
• "It needs to be said clearly and directly: This is an attack on Europe, on our culture, on our traditions." — Poland's Prime Minister Beata Szyd?o.
• "I think we have a right to decide that we do not want a large number of Muslim people in our country. That is a historical experience for us." — Viktor Orbán, Prime Minister of Hungary, referring to Hungary's occupation by the Ottoman Empire from 1541 to 1699.

The European Union has initiated legal action against the Czech Republic, Hungary and Poland for failing to comply with a controversial order to take in thousands of migrants from Africa, Asia and the Middle East.

The so-called infringement procedure, which authorizes the European Commission, the powerful executive arm of the European Union, to sue member states that are considered to be in breach of their obligations under EU law, could lead to massive financial penalties.

The dispute dates back to September 2015, when, at the height of Europe's migration crisis, EU member states narrowly voted to relocate 120,000 "refugees" from Italy and Greece to other parts of the bloc. This number was in addition to a July 2015 plan to redistribute 40,000 migrants from Italy and Greece.

Of the 160,000 migrants to be "shared," nine countries in Central and Eastern Europe were ordered to take in around 15,000 migrants. Although the Czech Republic, Hungary, Romania and Slovakia voted against the agreement, they were still required to comply.

Since then, several Central European EU member states have vehemently refused to accept their assigned quotas of migrants. Poland, for example, has a quota of 6,182 migrants, not one of whom has been admitted. The Czech Republic has a quota of 2,691 migrants, of whom only 12 have been taken. Hungary has a quota of 1,294, none of whom have been admitted.

In the EU as a whole, so far only around 20,000 migrants have been relocated (6,896 from Italy and 13,973 from Greece), according to the EU's latest relocation and resettlement report, published on June 13, 2017. Of the 28 EU member states, only Malta has taken in its full quota — 131 migrants.

Many so-called asylum seekers have refused to relocate to Central and Eastern Europe because the financial benefits there are not as generous as in France, Germany or Scandinavia. In addition, hundreds of migrants who have been relocated to Estonia, Latvia and Lithuania, which rank among the poorest countries in the EU, have since fled to Germany and other wealthier countries in the bloc.

Meanwhile, the enforcers of European "unity" have sought to shame the Central European holdouts into compliance by appealing to nebulous concepts such as European "values" and "solidarity." French President Emmanuel Macron, for example, recently warned:

"European countries that do not respect the rules should pay the full political consequences. There is a double betrayal. They decide to abandon EU principles, turn their back on Europe and have a cynical approach to the union which gives them money, without respecting its values."

Leaders in Central and Eastern Europe have held their ground. In Poland, Prime Minister Beata Szyd?o said her country would not be blackmailed by European Union officials. In a speech to Parliament on May 24, two days after the jihadist attack in Manchester, England, in which a Polish couple was killed, she said:

"We are not going to take part in the madness of the Brussels elite…. Rise from your knees and from your lethargy or you will be crying over your children every day.

 

"If you cannot see this — if you cannot see that terrorism currently has the potential to hurt every country in Europe, and you think that Poland should not defend itself — you are going hand in hand with those who point this weapon against Europe, against all of us.

 

"It needs to be said clearly and directly: This is an attack on Europe, on our culture, on our traditions. Do we want strong politicians who can see the danger and can fight against it efficiently?"

In a May 24 speech, Polish Prime Minister Beata Szyd?o said her country would not be blackmailed by European Union officials: "We are not going to take part in the madness of the Brussels elite… This is an attack on Europe, on our culture, on our traditions." (Illustrative image source: European Parliament/Flickr)

Polish Interior Minister Mariusz B?aszczak said that agreeing to European Union quotas would "certainly be worse" than any punishment meted out by Brussels:

"We must not forget the terror attacks that have taken place in Western Europe, and how — in the bigger EU countries — these are unfortunately now a fact of life. Remember, that the now very numerous Muslim communities in Western Europe started out as relatively small numbers….

 

"I tell my counterparts in Western Europe that the relocation strategy only intensifies illegal migration because traffickers get even more customers when would-be migrants hear that people delivered to Europe are being given refuge in EU nations other than Italy and Greece."

Henryk Kowalczyk, a Polish member of parliament, said:

"Poland makes a contribution to the EU…. We are doing what the bloc says, what the treaties say. If the French president was thinking of refugees, well that issue is not mentioned in the treaties and when we joined the European Union we were not taking on that commitment."

Poland's European Affairs Minister Konrad Szyma?ski added: "There is no conflict on values between the Commission and Poland — it is about how to interpret these values."

In the Czech Republic, Prime Minister Bohuslav Sobotka said that "given the deteriorating security situation in Europe and the non-functioning of the quota system, the Czech government will not participate in it." He added: "We are ready to defend our position in the EU and the relevant judicial institutions."

Czech Minister of Foreign Affairs Lubomír Zaorálek said that EU should focus on "economic and social convergence among EU countries, rather than attempts to distribute migrants with forced quotas." He pointed out that in some Eastern European countries, "the most vulnerable inhabitants are often poorer than the incoming migrants themselves."

Zaorálek added that "people who are coming have no real interest in being integrated" and want to live with their "partners from similar cultural, ethnic, religious backgrounds." He said that people in Central and Eastern Europe do not want to "repeat the mistake of the Western countries" which have "neighborhoods full of thousands and thousands of people living in imperfect living conditions" and which are "very risky, not only during the night but also during the day." He pointed out that "there are no suicide bombers among Ukrainians or Vietnamese," two long-established communities in the Czech Republic.

In Slovakia, Prime Minister Robert Fico said that mass migration and forced multiculturalism would change the essence of his country:

"I think it is the duty of politicians to talk about these things very clearly and openly. I do not want to see a Muslim community in Slovakia. I do not want there to be several tens of thousands of Muslims who gradually begin to promote their ideology. We do not want to change the traditions of this country, which are built on the Christian tradition. It has been like this for centuries. Sovereignty and national pride must be part of our ruling coalition."

Fico added that 95% of so-called refugees were actually economic migrants:

"We will not assist in this folly with arms opened wide with the notion that we will accept them all regardless of whether they are economic migrants or not. We must start telling the truth about migration."

In Hungary, Prime Minister Viktor Orbán has warned of the "explosive consequences" of a culture clash between Europe and migrants from the Muslim world:

"To understand what we must do, we need to grasp the true nature of the situation we are facing. Europe is not in the grip of a 'refugee problem' or a 'refugee situation,' but the European continent is threatened by an ever mounting wave of modern-era migration. Movement of people is taking place on an immense scale, and from a European perspective the number of potential future immigrants seems limitless.

 

"With each passing day we see that hundreds of thousands have been turning up and clamoring at our borders, and there are millions more intending to set out for Europe, driven by economic motives….

 

"We must acknowledge that the European Union's misguided immigration policy is responsible for this situation. Irresponsibility is the mark of every European politician who holds out the promise of a better life to immigrants and encourages them to leave everything behind and risk their lives in setting out for Europe. If Europe does not return to the path of common sense, it will find itself laid low in a battle for its fate….

 

"Let us not forget that those arriving have been raised in another religion, and represent a radically different culture. Most of them are not Christians, but Muslims. This is an important question, because Europe and European identity is rooted in Christianity. Is it not worrying in itself that European Christianity is now barely able to keep Europe Christian? If we lose sight of this, the idea of Europe could become a minority interest in its own continent."

Referring to Hungary's occupation by the Ottoman Empire from 1541 to 1699, Orbán said:

"I think we have a right to decide that we do not want a large number of Muslim people in our country. We do not like the consequences of having a large Muslim community that we see in other countries and I do not see any reason for anyone else to force us to create ways of living together in Hungary that we do not want to see. That is a historical experience for us."

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For those who can’t quite reconcile the Chinese government’s tentative acceptance of bitcoin and other cryptocurrencies with the inherently anarchistic principles espoused by bitcoin's creator, here’s yet another clue to support the theory that the Chinese government has decided to tolerate and regulate digital currencies in hopes of learning how to apply the technology to its own digital currency.

At its core, the hypothetical “digital RMB” will subvert bitcoin’s core mission – that is, to enable individuals to circumvent government control and monitoring. Instead, Chinese policy makers intend to use the currency to strengthen the Communist Party’s ability to monitor its citizens for evidence of money laundering and other financial crimes, as MarketWatch noted earlier this year.

Of course, the PBOC’s official line is that it believes a blockchain-based digital currency would allow it to make more accurate monetary policy decisions by improving its ability to gather data on financial flows…but, as with all policies in China, maintaining social control and enforcing laws is the No. 1 priority here. People’s Bank of China Gov. Zhou Xiaochuan has said it will take China approximately 10 years to fully embrace the digital renminbi, though he said later that there is no official timeline.

To that end, the Shanghai Daily reports that the PBOC has officially launched its own blockchain research institute, and is seeking to hire engineers who to oversee the creation of what could become the first blockchain-based fiat currency.

Here’s SD:

“The People’s Bank of China’s institute of printing science is offering six positions for the design and development of digital currency-related software and hardware framework, a recruitment notice said, adding that candidates with experience in blockchain and Big Data technologies will be preferred.

 

The candidates must hold master’s or doctoral degree in computer science, information security and cryptography, according to the notice.”

As Cryptocoins News points out, the hiring drive comes soon after the bank’s vice-governor, Fan Yifei, published a Bloomberg column opining that the best way for governments to drive innovation of digital currencies is by creating their own, which will stay under their control. Yifei sees reduced operating costs, increased efficiency and a broad range of new applications as the many outcomes of moving from a paper-based currency to its digital form.

The creation of the institute represents an expansion on a public-private partnership sponsored by the Chinese government that was launched to explore the feasibility of creating a digital RMB. That partnership, which involves experts from Citibank and Deloitte, was first reported in early 2016. China is also already experimenting with using a blockchain-based shadow system for clearing trades in local interbank credit markets.

The PBOC isn’t the only central bank that’s exploring the feasibility of its own digital currency. The Bank of England joined with researchers at University College in London to create RSCoin, a digital currency for central banks. The Bank of Canada has also said it is developing a blockchain-based digital version of the Canadian dollar. Central banks in Russia and Australia have also expressed interest in exploring digital currencies.

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Authored by Antonius Aquinas,

It must now be a prerequisite of those who become an American ambassador to the UN to possess certain characteristics and traits, the most important of which are rabid warmonger, child killer, and outright liar.

Remember it was Madeleine Albright when asked about the US blockading Iraq which prevented medicine and medical equipment from entering the country that resulted in the estimated death of a half a million children who coldly responded: “I think that is a very hard choice, but the price, we think, the price is worth it.”  Then there is Colin “Weapons of Mass Destruction” Powell who told a bald-face lie about Iraq’s nuclear capabilities which paved the way for the US destruction of the country.

In her brief tenure as UN ambassador, Nikki Haley is fulfilling these requirements quite nicely.  Her latest crazed outburst came on the heels of the bizarre White House press release about another supposed Syrian government gas attack which warned President Assad that he would “pay a heavy price” if carried out.

While the State and Defense Departments were apparently caught off guard by the White House action, Ambassador Haley was not (probably given advanced notice) and issued an even more provocative tweet:

Any further attacks done to the people of Syria will be blamed on Assad, but also on Russia & Iran who support him killing his own people.

Not only has Haley appointed herself judge, jury and executioner of the Assad regime, but her wild accusation includes reprisals to the neocons’ ultimate targets of Russia and Iran.  Her ridiculous statement has now given Syria’s enemies the green light to conduct another gas attack which will be blamed on Assad and his allies, Russia and Iran.  Nice work, Nikki!

From a diplomatic perspective, the entire affair was bungled and amateurish, confirming once again that the Trump Administration is out of its league in conducting foreign policy.

That Haley was even chosen to become part of the Trump Administration has been odd from the beginning, but as things have unfolded quite telling.  Haley was a vociferous critic of the future president.  She, and the likes of another war-monger and Russophobe, Lindsey Graham, were consistently attacking candidate Trump for being “soft” on Russia and his immigration stance especially his wildly popular border wall proposal.  To Haley and Graham, Donald Trump was out of step with the Republican Party’s values such as diversity as represented by Haley who, herself, is of Indian heritage.

Yet, despite all of the vitriol heaped at candidate Trump, the newly elected president, in a surprising and ominous move, decided to make the South Carolina governor, UN ambassador.  This, and a number of other selections to foreign policy posts, signaled that President Trump would abandon his promises and vote-garnering campaign talk of peaceful coexistence with Russia, a reduction of US presence in the Middle East, and in other hot spots across the globe.

While Haley has been an ardent warmonger from the start, President Trump did not have to select her for the post.  There were other more competent and surely less belligerent candidates available.  More than likely, the choice was probably a nod to his “advisor” daughter Ivanka, to curry favor among feminists.

While President Trump’s pick of Haley was an implicit betrayal of a large segment of his base, his foreign policy actions since becoming chief executive have been an explicit rejection of putting America first which he spoke of at his inaugural.  From escalating tensions with puny North Korea, dropping the mother-of-all-bombs on Afghanistan for no apparent reason, to making multi-billion dollar armament deals with the despots of Saudi Arabia among other troubling endeavors, Trump’s foreign policy is little different than his infamous predecessors.

While it looks like President Trump may have won the war, at least temporary, over the press and the anti-Trump Congressional forces about the fake Russian election involvement, he and his bellicose UN ambassador are now using the same underhanded methods to instigate a conflict to depose President Assad.  While the alternative media rightly showed how the mainstream press and politicos made up and manipulated stories to undermine President Trump, it should now be intellectually honest and call out the president and his UN ambassador for what they are doing in Syria.  In doing so, it may prevent the outbreak of WWIII.

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More than a year after the BREXIT referendum shocked the world, the various EU member nations are seemingly no closer to a consensus on how to deal with Europe’s migrant influx.  The lack of a coordinated plan and disproportionate distribution of migrants across the continent has Italy threatening to close their ports to privately-funded aid boats until other nations “step up.”   Per Yahoo News:

With arrivals in Italy up nearly 19 percent over the same period last year, Rome has threatened to close its ports to privately-funded aid boats or insist that funding be cut to EU countries which fail to help.

 

“There are NGO ships, Sophia and Frontex boats, Italian coast guard vessels” saving migrants i the Mediterranean, Minniti said, referring to the aid boats as well as vessels deployed under EU border security missions.

 

“They are sailing under the flags of various European countries. If the only ports where refugees are taken to are Italian, something is not working. This is the heart of the question,” he said.

 

“I am a europhile and I would be proud if even one vessel, instead of arriving in Italy, went to another European port. It would not resolve Italy’s problem, but it would be an extraordinary signal” of support, he said.

 

Of course, in the face of the ever-growing crisis, the interior ministers of France, Germany and Italy got together to do what politicians do best: talk.  And while we’re sure that European citizens are very happy that “the talks went off very well,” somehow we suspect the continued “all talk, no action” approach to the crisis is not entirely satisfactory for a continent that has been devastated by terrorist attacks of late.  

The French and German interior ministers met with their Italian counterpart Marco Minniti in Paris on Sunday to discuss a “coordinated response” to Italy’s migrant crisis, hours after Minniti had called on other European countries to open their ports to rescue ships.

 

The working dinner at the French interior ministry — also attended by EU Commissioner for Refugees Dimitris Avramopoulos — was aimed at finding “a coordinated and concerted response to the migrant flux in the central Mediterranean (route) and see how to better help the Italians,” a source close the talks said.

 

The four-way talks between Minniti, Thomas de Maiziere of Germany, Gerard Collomb of France and Avramopoulos will also prepare them for EU talks in Tallinn this week.

 

“The talks went off very well,” a member of the Italian delegation told AFP after the Paris meeting, with the “Italian proposals being discussed”. The source offered no other details.

 

“We are under enormous pressure,” Minniti had said earlier Sunday in an interview with Il Messaggero.

Meanwhile, over 2,000 migrants have died this year alone in their attempts to cross the Mediterranean.

More than 83,000 people rescued while attempting the perilous crossing from Libya have been brought to Italy so far this year, according to the UN, while more than 2,160 have died trying, the International Organization for Migration says.

 

Italy’s Red Cross has warned the situation in the country’s overcrowded reception centres is becoming critical.

 

“What is happening in front of our eyes in Italy is an unfolding tragedy,” UN High Commissioner for Refugees Filippo Grandi said on Saturday.

 

Minniti said Rome would be pushing for a way to shift the asylum application process from Italy to crisis-hit Libya, and safely bring to Europe those who win the right to protection.

 

“We have to distinguish before they set off (across the Mediterranean) between those who have a right to humanitarian protection and those who don’t,” he said.

Perhaps, at some point, politicians will learn how to act rather than just talk…but we won’t hold our breath.

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On Monday night, following news of the latest North Korean ballistic missile launch which as discussed earlier landed in the Sea of Japan, and specifically Japan’s quasi-sovereign Economic Exclusion Zone, Trump tweeted his reaction to the latest provocation, which probably falls under the “modern day presidential” umbrella.

Trump decided to eschew conventional diplomacy, and stated matter of facty, that “North Korea has just launched another missile” then prioeeded to ask of Kim Jong-Un, “does this guy have anything better to do with his life?“

North Korea has just launched another missile. Does this guy have anything better to do with his life? Hard to believe that South Korea…..

— Donald J. Trump (@realDonaldTrump) July 4, 2017

Apparently the answer is no, which may explain why it was recently revealed that South Korea’s previous president was seriously contemplating the assassinating Kim.

In his second tweet, Trump added “gard to believe that South Korea and Japan will put up with this much longer. Perhaps China will put a heavy move on North Korea and end this nonsense once and for all!.”

….and Japan will put up with this much longer. Perhaps China will put a heavy move on North Korea and end this nonsense once and for all!

— Donald J. Trump (@realDonaldTrump) July 4, 2017

Or perhaps after China slammed over the weekend the recent multi-billion US sale of weapons to China’s nemesis Taiwan, not to mention the deployment of a US missile-destroyer in the South China Seas which was promptly intercepted by Chinese forces, as well as Trump’s sanctioning of several Chinese entities for “doing business with North Korea, maybe China won’t do anything at all, and instead will cultivate and fund local and not so local terrorist to pick up the “global cleansing” role.

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A week ago, we reported on a study from the University of Washington that exposed how the city of Seattle’s progressive minimum wage increases, which began in 2015, are – contrary to the hopes of misguided liberals – actually crushing the city’s poor.

Specifically, the study found that higher minimum wages caused a 9.4% reduction to total hours worked by low-skilled workers, or roughly 14 million hours per year.  Given that a full-time employee works 2,080 hours per year, that's equivalent to just over 6,700 full-time equivalents who have lost their jobs, just in the city of Seattle.

While the higher minimum wage law remains intact in liberal Washington State – despite the research suggesting that it’s harming Seattle's most vulnerable workers – the Missouri legislature recently acted to prevent a similar catastrophe from playing out in St. Louis by passing what’s known as a preemption law to invalidate a city-approved minimum wage hike that was slated to take effect in late August. The hike would’ve raised the city’s minimum wage to $10 an hour, from the state-approved $7.70.

Preemption laws are becoming increasingly popular in GOP-controlled states as cities – typically bastions of liberal sentiment – try to raise minimum wages above statewide minimum levels. As the Huffington Post reports, it’s impossible to say how many St. Louis employers will take the GOP up on the offer to slash pay, given the effect such a move could have on competitiveness and morale.

But if businesses agree that the wage hike was too aggressive, then at least some of them will likely revert to lower pay rates, particularly in low-wage industries like fast food.

“If St. Louis’ existing measure were to stay in effect, the city’s minimum wage would be $10 this year and would then climb to $11 in 2018. The statewide rate of $7.70 typically goes up just a few cents a year, since it’s tied to an inflation index.

 

St. Louis originally passed a minimum wage hike two years ago, prompting business groups to sue to stop it in court. The Missouri Supreme Court recently ruled that the St. Louis measure was lawful, but the new state preemption law renders it irrelevant.”

However, St. Louis is one of the more interesting preemption-law case studies because it undoes a hike that was already approved – even if it hadn’t yet gone into effect. But at least 17 states have preemption laws that stand in the way of local minimum wage legislation, according to a recent study by the National League of Cities.

Though Missouri is hardly alone. Just days after the Birmingham, Ala. City Council passed a wage hike in February 2016, GOP state legislators in Alabama passed a preemption law taking aim at the new $10.10 minimum wage. The Alabama chapter of the NAACP ended up filing a civil rights lawsuit against the state, claiming that the majority-white legislature was disenfranchising Birmingham residents, who are 73 percent African-American.

Fearing the political backlash associated with potentially cutting people’s pay, Missouri Gov. Eric Greitens wouldn’t affix his signature to the bill; Missouri’s constitution stipulates that bills that go unsigned by the governor automatically become law.

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Authored by John Whitehead via The Rutherford Institute,

We have arrived, way ahead of schedule, into the dystopian future dreamed up by such science fiction writers as George Orwell, Aldous Huxley, Margaret Atwood and Philip K. Dick.

Much like Orwell’s Big Brother in 1984, the government and its corporate spies now watch our every move.

Much like Huxley’s A Brave New World, we are churning out a society of watchers who “have their liberties taken away from them, but … rather enjoy it, because they [are] distracted from any desire to rebel by propaganda or brainwashing.”

Much like Atwood’s The Handmaid’s Tale, the populace is now taught to “know their place and their duties, to understand that they have no real rights but will be protected up to a point if they conform, and to think so poorly of themselves that they will accept their assigned fate and not rebel or run away.”

And in keeping with Philip K. Dick’s darkly prophetic vision of a dystopian police state—which became the basis for Steven Spielberg’s futuristic thriller Minority Report which was released 15 years ago—we are now trapped into a world in which the government is all-seeing, all-knowing and all-powerful, and if you dare to step out of line, dark-clad police SWAT teams and pre-crime units will crack a few skulls to bring the populace under control.

Minority Report is set in the year 2054, but it could just as well have taken place in 2017.

Seemingly taking its cue from science fiction, technology has moved so fast in the short time since Minority Report premiered in 2002 that what once seemed futuristic no longer occupies the realm of science fiction.

Both worlds—our present-day reality and Spielberg’s celluloid vision of the future—are characterized by widespread surveillance, behavior prediction technologies, data mining, fusion centers, driverless cars, voice-controlled homes, facial recognition systems, cybugs and drones, and predictive policing (pre-crime) aimed at capturing would-be criminals before they can do any damage.

All of this has come about with little more than a whimper from a clueless American populace largely comprised of nonreaders and television and internet zombies. But we have been warned about such an ominous future in novels and movies for years.

The following films may be the best representation of what we now face as a society.

Fahrenheit 451 (1966). Adapted from Ray Bradbury’s novel, this film depicts a futuristic society in which books are banned and serves as an adept metaphor for our obsessively politically correct society where virtually everyone now pre-censors speech.

THX 1138 (1970). This is a somber view of a dehumanized society totally controlled by a police state. The people are force-fed drugs to keep them passive, and they no longer have names but only letter/number combinations such as THX 1138. Any citizen who steps out of line is quickly brought into compliance by robotic police equipped with “pain prods”—electro-shock batons.

Soylent Green (1973). Set in a futuristic overpopulated New York City, the people depend on synthetic foods manufactured by the Soylent Corporation. The theme is chaos where the world is ruled by ruthless corporations whose only goal is greed and profit.

Blade Runner (1982). In a 21st century Los Angeles, human life is cheap, and anyone can be exterminated at will by the police (or blade runners). Based upon a Philip K. Dick novel, this exquisite Ridley Scott film questions what it means to be human in an inhuman world.

Nineteen Eighty-Four (1984). The best adaptation of Orwell’s dark tale, this film visualizes the total loss of freedom in a world dominated by technology and its misuse, and the crushing inhumanity of an omniscient state.

They Live (1988). John Carpenter’s bizarre sci-fi social satire action film makes an effective political point about the underclass—that is, everyone except those in power—the point being that we, the prisoners of our devices, are too busy sucking up the entertainment trivia beamed into our brains and attacking each other up to start an effective resistance movement.

The Matrix (1999). Humanity is at war against technology which has taken the form of intelligent beings, and computer programmer Thomas A. Anderson, secretly a hacker known by the alias “Neo,” is actually living in The Matrix, an illusionary world that appears to be set in the present in order to keep the humans docile and under control.

Minority Report (2002). This film poses the danger of technology operating autonomously. Before long, we all may be mere extensions or appendages of the police state—all suspects in a world commandeered by machines.

V for Vendetta (2006). This film depicts a society ruled by a corrupt and totalitarian government where everything is run by an abusive secret police. The subtext here is that authoritarian regimes through repression create their own enemies—that is, terrorists—forcing government agents and terrorists into a recurring cycle of violence.

Land of the Blind (2006). This dark political satire is based on several historical incidents in which tyrannical rulers were overthrown by new leaders who proved just as evil as their predecessors.

All of these films—and the writers who inspired them—understood what many Americans, caught up in their partisan, flag-waving, zombified states, are still struggling to come to terms with: that there is no such thing as a government organized for the good of the people. Even the best intentions among those in government inevitably give way to the desire to maintain power and control at all costs.

Eventually, as I point out in my book Battlefield America: The War on the American People, even the sleepwalking masses (who remain convinced that all of the bad things happening in the police state—the police shootings, the police beatings, the raids, the roadside strip searches—are happening to other people) will have to wake up.

Sooner or later, the things happening to other people will start happening to us and our loved ones.

When that painful reality sinks in, it will hit with the force of a SWAT team crashing through your door, a taser being aimed at your stomach, and a gun pointed at your head. And there will be no channel to change, no reality to alter, and no manufactured farce to hide behind.

As George Orwell warned, “If you want a picture of the future, imagine a boot stamping on a human face forever.”

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