Producer Price Growth Plunges To 27-Month Lows As Shelter Inflation Rolls Over

Following a hotter than expected Core PPI, all eyes were on today's Consumer Price data (as RBC noted is more important for The Fed than PPI) which gravely disappointed the inflation-hoping crowd. Core PPI printed +1.7% (worse thasn expected 1.9%) and the weakest growth since Feb 2015.

May 2014 was the last time that Core PPI (Ex Food and Energy) was this high…

With goods prices dropping but services rising.

But Consumer Price growth is plunging…Headline CPI dropped 0.1% MoM in May

Headline CPI slowed from 2.2% YoY to 1.9% YoY (also missing expectations).

There is a silver lining for Americans though (which The Fed will hate)… Shelter inflation is rolling over…

 

As RBC warned overnight, if CPI comes in ‘soft,’ will crystalize “slow-flation” and may see consensus begin shifting to a Fed ‘one and done over balance of 2017’ view.

The inflation disappointment would see rates again grind lower, while equities trade will revert – back to the prior YTD status quo ‘risk barbell’ trade: long ‘Secular Growth’ and ‘Defensives,’ short ‘Cyclicals’—as if Thursday, Friday and Monday didn’t happen

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A Presidency Consumed by Pettiness: New at Reason

By fixating on his election victory, President Trump may be ensuring it’s his most impressive accomplishment.

Jacob Sullum writes:

Last month Donald Trump interrupted his own comments on Republican health care legislation to marvel once again at the victory he had won six months before. “I’m president!” he exclaimed. “Hey! I’m president! Can you believe it, right?”

Trump’s comical obsession with his own electoral accomplishment is at the root of his current political troubles, including investigations that will hobble him for months, even if they ultimately find no criminal wrongdoing. By constantly revisiting his unexpected defeat of Hillary Clinton and insisting that everyone acknowledge how amazing it was, he may ensure that nothing he does in the White House will be nearly as impressive.

After the election, Trump called his victory a “landslide.” It wasn’t. As political scientist John J. Pitney Jr. pointed out, Trump’s share of the electoral vote ranked 46 out of 58 presidential contests.

Trump said his feat was still impressive because, as he put it last week, “it’s almost impossible for the Democrats to lose the Electoral College.” That is not true either. If anything, Republicans have a slight advantage in the Electoral College, because Democrats are more concentrated in certain parts of the country and therefore tend to waste more popular votes by far exceeding the threshold needed to win a state.

View this article.

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Trump Gives Pentagon Unilateral Authority To Set Afghan Troop Levels

President Donald Trump has has given the Pentagon unilateral authority to set troop levels in Afghanistan, the WSJ and Reuters reported overnight, clearing the way for the military to intensify its fight against the Taliban and opening the door for future troop increases requested by Defense Secretary Jim Mattis. While no immediate decision had been made about the troop levels, which are now set at about 8,400, the Pentagon is currently weighing plans to send between 3,000 and 5,000 additional troops.

The news comes after Mattis said in testimony to the Senate Armed Services Committee that “We are not winning in Afghanistan right now. And we will correct this as soon as possible.” Mattis said the Taliban were “surging” at the moment, something he said he intended to address.

The decision is similar to one announced in April that applied to U.S. troop levels in Iraq and Syria, and came as Mattis warned Congress the U.S.-backed Afghan forces were not beating the Taliban despite more than 15 years of war. After the official announcement control over troop decisions to the Pentagon, expected to be announced on Wednesday, sets the stage for U.S. commanders to decide to reverse course in Afghanistan and begin sending more forces to the country after years of reductions in the hope that Kabul could handle internal threats on its own, the WSJ notes.

According to the WSJ, the White House decision to cede authority to Mr. Mattis is another reflection of Mr. Trump’s push to give the military wide latitude around the world. The White House has already given the Pentagon more power to carry out strikes in Yemen and Somalia. Mr. Trump removed a cap on troop levels in Iraq. And he approved Pentagon plans to send more U.S. troops and firepower into Syria to fight Islamic State.

The top U.S. commander in Afghanistan has been urging the Trump administration for months to send more troops to Afghanistan. But a decision to do so has met with resistance from some members of the Trump administration, who are wary of being dragged back into a fight that could require more forces, firepower and money.

A former U.S. official told Reuters such a decision might allow the White House to argue that it was not micromanaging as much as the administration of former President Barack Obama was sometimes accused of doing. Critics say delegating too much authority to the military does not shield Trump from political responsibility during battlefield setbacks and could reduce the chances for diplomats to warn of potential blowback from military decisions.

It has been four months since Army General John Nicholson, who leads U.S. and international forces in Afghanistan, said he needed “a few thousand” additional forces, some potentially drawn from U.S. allies.

As a reminder, the U.S. once had 100,000 troops in Afghanistan, after then-President Barack Obama approved a military surge in 2009 at a time when the war against the Taliban appeared to be in danger of failure. Before leaving office, Mr. Obama declared an end to major military operations and dramatically scaled back the U.S. military presence in Afghanistan. There now are fewer than 9,000 U.S. troops in Afghanistan, primarily to help advise and train Afghan forces, which have struggled to secure their country.

The Pentagon has been weighing plans to send between 3,000 and 5,000 troops to Afghanistan. But that decision could still take weeks, the U.S. official said. Mattis, testifying Tuesday before the Senate Armed Services Committee, said that he expected to complete a military strategy for Afghanistan by next month. That could mean that a decision on troop numbers could occur simultaneously, or sometime afterward.

Still, some officials have questioned the benefit of sending more troops to Afghanistan because any politically palatable number would not be enough to turn the tide, much less create stability and security. To date, more than 2,300 Americans have been killed and more than 17,000 wounded since the war began in 2001.

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Defending His Honor, Jeff Sessions Highlights His Dishonesty

Yesterday Attorney General Jeff Sessions defended his honor before the Senate Intelligence Committee, rejecting the “appalling and detestable lie” that “I participated in any collusion that I was aware of, any collusion with the Russian government to hurt this country, which I have served with honor for 35 years, or to undermine the integrity of our democratic process.”

But Sessions’ testimony highlighted his decidedly dishonorable collusion with President Trump in the clumsy attempt to cover up the real reasons for firing FBI Director James Comey last month.

Sessions said it was “absurd” to suggest that he should have kept his distance from that decision given its apparent connection to the FBI’s investigation of Russian meddling in the presidential election. Sessions recused himself from that investigation in March after he was criticized for failing to disclose his contacts with Russian officials to the senators who confirmed him as attorney general.

In his Senate testimony last week, Comey questioned Sessions’ involvement in his dismissal, citing the recusal. “If, as the president said, I was fired because of the Russia investigation, why was the attorney general involved in that chain?” he said. “I don’t know.”

Sessions testified that he bowed out of the Russia investigation, which includes possible ties between Russian operatives and the president’s associates, because of the role he had played in Trump’s campaign. “I recused myself not because of any asserted wrongdoing,” he said, “but because a Department of Justice regulation…required it. That regulation states in effect that department employees should not participate in investigations of a campaign if they served as a campaign adviser.”

That recusal, Sessions said, had nothing to do with decisions about who should head the FBI. “It is absurd, frankly, to suggest that a recusal from a single specific investigation would render the attorney general unable to manage the leadership of the various Department of Justice law enforcement components that conduct thousands of investigations,” he said.

Sessions played a key role in the official narrative of Comey’s dismissal by endorsing the conclusions of Deputy Attorney General Rod Rosenstein, who wrote a memo criticizing the way Comey had handled the FBI’s investigation of Hillary Clinton’s email practices as secretary of state.

Rosenstein said Comey had treated Clinton unfairly and broken with longstanding policy by announcing the results of the investigation at a press conference and by publicly reopening the investigation 11 days before the election. “Based on my evaluation, and for the reasons expressed by the Deputy Attorney General in the attached memorandum,” Sessions said in a May 9 letter to Trump, “I have concluded that a fresh start is needed at the leadership of the FBI.”

Sessions’ transparently phony rationale for firing Comey, which contradicted his own public defenses of the FBI director’s controversial decisions regarding the Clinton investigation, was merely window dressing for a decision Trump had already made, as the president himself admitted two days later in an interview with NBC News.

In the same interview, Trump confirmed that the Russia investigation, which he had called a “taxpayer-funded charade” on Twitter the day before sacking Comey, was on his mind at the time. “When I decided to just do it,” he said, “I said to myself…this Russia thing with Trump and Russia is a made-up story. It’s an excuse by the Democrats for having lost an election that they should have won.”

In an exchange with Sen. Dianne Feinstein (D-Calif.) yesterday, Sessions declined to address the real reasons for firing Comey:

Feinstein: Mr. Rosenstein, in a statement to the House of Representatives, essentially told them he learned on May 8th President Trump intended to remove Director Comey. When you wrote your letter on May 9, did you know that the president had already decided to fire Director Comey?

Sessions: Senator Feinstein, I would say I believe it has been made public that the president asked us our opinion, and it was given, and he asked us to put that in writing. I don’t know how much more he said than that, but he talked about it and I would let his words speak for themselves….

Feinstein: I’m puzzled about the recommendation because the decision had been made. What was the need for you to write a recommendation?

Sessions: Well, we were asked our opinion, and when we expressed it, which was consistent with the letter we wrote, I felt comfortable, and I guess the deputy attorney general did too, in providing that information in writing.

Feinstein: Do you concur with the president he was going to fire Comey regardless of [the] recommendation because the problem was the Russian investigation?

Sessions: Senator Feinstein, I will have to let his words speak for himself. I’m not sure what was in his mind explicitly when we talked to him.

Sessions refused to discuss any conversations he may have had with Trump regarding the president’s motive for firing Comey, saying those exchanges are “confidential” and might be covered by a future assertion of executive privilege. Trump’s motive is obviously relevant to the charge that he was trying to obstruct justice by impeding the FBI probe.

Sessions’ unapologetic participation in concealing Trump’s motive is just as obviously relevant to the attorney general’s claim that he is a man of honesty and integrity.

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Driverless Car Makers Can Handle Cybersecurity Issues Better Than Government: New at Reason

driverless carWhen most people think about driverless car policies, they tend to focus on philosophical life-or-death scenarios. This isn’t surprising: the question of how autonomous vehicles should behave when faced with the unfortunate decision between harming a passenger and harming a pedestrian is an eye-catching one indeed.

But many of the policy concerns surrounding robot cars are far more prosaic. How much data will connected cars collect, and how will this be stored? Will the data be secure? How secure? How will software be maintained and improved? Will the code be viewable by outsiders? And just who should oversee the whole process?

At the end of the month, regulators at the Federal Trade Commission (FTC) and National Highway Traffic Safety Administration (NHTSA) will hold a policy workshop to discuss just these issues. On June 28, policy experts, academics, industry representatives, and the general public is invited to take part in a conversation on “the consumer privacy and security issues that automated and connected vehicles” may pose. Rather than worrying about the typical questions of physical safety and accident liabilities involving autonomous cars, this workshop will focus mostly on the cybersecurity and data integrity of autonomous car software. Andrea O’Sullivan examines the debate.

View this article.

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Multiple People Shot, Including House Majority Whip Scalise, At Congressional Baseball Practice

At least five people have been shot, including House Majority Whip Steve Scalise and aides, during a baseball practice in Virginia Wednesday, Fox News confirmed. The shots were reported on East Monroe Street in Del Ray, Alexandria police said on Twitter at 7:30 a.m. The location was near a YMCA.

  • BROOKS: APPEARS SOME SECURITY DETAIL MEMBERS WERE INJURED
  • BROOKS SAYS SECURITY DETAIL SHOT BACK AT ASSAILANT
  • BROOKS: HELICOPTER LANDED ON FIELD TO TRANSPORT INJURED
  • BROOKS: AT LEAST 5 INJURED, INCL. SCALISE, STAFFER, 2 GUARDS
  • INJURED GUNMAN IN CONGRESS MEMBER SHOOTING APPREHENDED: FOX

A reporter from the Huffington Post tweeted that a congressman said he “heard there was a shooting at the Congressional baseball game practice field.” ABC 7 News reported “multiple shooting” in the 400 block of E. Monroe Street.

A reporter from Fox News tweeted that staffers were hit.

According a report from Rep. Mo Brooke, who said he was not shot, more than 50 rifle shots were fired.

Brooks adds that a helicopter landed in center field and took one of the wounded to a hospital, Rep. Brooks said

The suspected is “believed in custody,” ABC reported, according to Alexandria police.

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Frontrunning: June 14

  • Federal Reserve Expected to Deliver Rate Increase (WSJ)
  • Fire engulfs London tower block, at least six dead, more than 50 injured (Reuters)
  • Children lost, baby thrown to safety (Reuters)
  • Democrats Accuse Sessions of ‘Stonewalling’ (BBG)
  • World stocks march on as Fed rate hike looms, dollar steady (Reuters)
  • Trump’s Long-Time Lawyer Is Just Like His Boss (BBG)
  • The Global Economy Is Rebounding, But There’s One Big Problem (BBG)
  • David Bonderman Resigns From Uber Board After Sexist Remark (NYT)
  • Uber CEO Takes a Break as Scandals Roil Company (WSJ)
  • Trump gives U.S. military authority to set Afghan troop levels: U.S. official (Reuters)
  • Britain could stay in EU, but only on poorer terms – Verhofstadt (Reuters)
  • Anbang Chairman’s Mysterious Absence Caps Months of Intrigue (BBG)
  • Elliott: BHP Board Presided Over Destruction of Market Value (WSJ)
  • Biggest Online Lenders Don’t Always Check Key Borrower Details (BBG)
  • Egypt’s parliament to vote on Red Sea islands transfer (Reuters)
  • Fiat Chrysler Looks to Bring Muscle Back to Motor City (WSJ)
  • Southern Ports Break Records as Panama Canal Anniversary Nears (BBG)
  • May faces calls to soften Brexit as political limbo drags on (Reuters)
  • Bromance of Trading Veterans Gives Viola’s Virtu a New Chairman (BBG)
  • Canadian Tech Is Having a Moment. The Trick Is Not to Mess It Up (BBG)

 

Overnight Media Digest

WSJ

– Uber Technologies Inc Chief Executive Travis Kalanick said he would take an indefinite leave from the company he built into the world’s most valuable startup, as the ride-hailing giant announced sweeping changes to its workplace culture in response to a series of scandals. on.wsj.com/2rZoWwO

– International Business Machines Corp formally launched a Watson product for financial regulation, rolling out artificial-intelligence tools to help financial institutions comply with rules and detect possible financial crimes. on.wsj.com/2rYYe7s

– West Virginia University researchers found Fiat Chrysler Automobiles NV vehicles with diesel engines produced significant emissions discrepancies between the road and the lab, resembling earlier conclusions they reached with Volkswagen AG cars that helped expose a long-running deception. on.wsj.com/2rZfoC6

– A corporate dispute over a price-discount program for diabetes patients taking Eli Lilly & Co’s insulin has resulted in an industry middleman’s exit from the deal—the latest sign of discord among players in a prescription-drug supply chain facing criticism for high prices. on.wsj.com/2rZ9tN8

– Neiman Marcus Group Ltd isn’t for sale. After announcing plans earlier this year to explore a potential deal, Chief Executive Karen Katz said the talks have ended and the luxury department store chain has the right strategy to go it alone. on.wsj.com/2rZbvNs

– Soupman Inc, of “Seinfeld” fame, filed for bankruptcy protection, just weeks after a top company executive was indicted on charges of tax evasion. on.wsj.com/2rZ6BQl

– Verizon Communications Inc announced it had completed its $4.5 billion acquisition of Yahoo Inc’s core internet assets. on.wsj.com/2rZo7nD

 

FT

Prime Minister Theresa May should talk to the Labour opposition to develop a more consensual approach and adopt a “softer” Brexit, her predecessor David Cameron said in his first public comments since last week’s general election.

French President Emmanuel Macron said “the door remained open” to Britain’s staying in the European Union as he met Theresa May at the Elysee Palace on Tuesday evening.

J Sainsbury Plc, Britain’s second largest supermarket group, is scrambling through a backlog of online grocery orders after a computer failure forced the chain to delay or cancel deliveries from nearly one in three stores.

Former British prime minister John Major on Tuesday called for May to consider operating as a minority government instead of signing a deal with the Democratic Unionist Party that he said would “create friction” across UK.

 

NYT

– In Uber Technologies Inc continuing attempt to repair its reputation over a series of scandals stemming from its bad-boy culture, its co-founder Travis Kalanick said he would take a leave of absence as chief executive. nyti.ms/2rZmF4F

– David Bonderman, an Uber Technologies Inc board member and partner at private equity firm TPG, resigned from the board of the ride-hailing company after he made a disparaging remark about women at an Uber meeting on Tuesday. nyti.ms/2rZakh0

– The chairman of a Chinese financial conglomerate who tried to forge a business relationship with President Trump’s son-in-law has been detained by police. Wu Xiaohui, the chairman of Anbang Insurance Group, was taken away on Friday in Beijing, according to newsmagazine Caijing. nyti.ms/2rZ0lrS

– Rolling Stone has agreed to settle a defamation lawsuit brought by the University of Virginia fraternity at the center of a discredited article about an alleged gang rape, effectively closing the door on a pivotal and damaging chapter in the magazine’s history. nyti.ms/2rZvsDR

– The Chinese authorities have charged employees of Australian casino company Crown Resorts Ltd with violating gambling promotion regulations, the company said on Tuesday, shedding potential light on a legal clash that has cast a pall over the gambling industry’s efforts to win Chinese customers. nyti.ms/2rZsC1H

 

Canada

THE GLOBE AND MAIL

** Property developers in Ontario are calling for changes to rent-control measures announced by the province in April, saying they are too harsh and are already causing builders to cancel apartment construction projects. tgam.ca/2s9G5Cj

** Days before the end of his term, the chairman of Canada’s telecom regulator, Jean-Pierre Blais, is warning that his successor may need to intervene directly in the wireless market to deliver more competition and lower prices for consumers. tgam.ca/2s9IsFe

NATIONAL POST

** Retailer Sears Canada Inc, whose sales have been on a steady downward trajectory, issued the direst warning yet about its future and said it is exploring strategic alternatives, including a possible sale of the business. bit.ly/2s9nkz5

** Canadian natural gas producers have been forced to shut in their production after Alliance Pipeline LP, a joint venture between Enbridge Inc and Veresen Inc, declared a force majeur Tuesday on its export pipeline to Chicago, which analysts say will hurt gas prices. bit.ly/2s9t3Fe

** Shaw Communications Inc announced two deals on Tuesday: it sold ViaWest, its data centre business, for C$2.3 billion ($1.7 billion) to Peak 10 Holding Corp, and announced a C$430 million deal with Quebecor Inc to buy low-band spectrum licences in Alberta, British Columbia and Ontario. bit.ly/2s9I21V (

 

Britain

The Times

* Ineos has set out a plan to spend about 2 billion euros ($2.24 billion) ramping up its chemical processing capacity across Europe. (bit.ly/2rp5Pxt)

* Petropavlovsk shareholders should reject attempts by three rebel investors to overhaul the board of the Russian gold miner, leading advisory groups ISS and Glass Lewis have said. (bit.ly/2roOt3G)
   

The Guardian

* EasyJet launched a new venture to allow the budget airline’s customers to use the private jet terminal and facilities at Luton Airport. (bit.ly/2roXYA3)

* British Airways is close to striking an agreement for Capita  to run its call centres as the airline attempts  to improve its customer relations after its disastrous IT meltdown last month. (bit.ly/2rozyXn)

The Telegraph

* A trio of city of London traders charged by the U.S. Department of Justice with rigging the $5.3 trillion per day currency markets have agreed to go voluntarily to the United States and not fight extradition proceedings. (bit.ly/2roywut)

* Volkswagen is facing its biggest legal challenge in Europe over the “dieselgate” scandal with a UK class action against the car maker teaming up with a similar claim in the Netherlands. (bit.ly/2ro9SKJ)

Sky News

* The European Commission has announced plans that could force some euro clearing operations to relocate from the city of London to the euro zone after Brexit. (bit.ly/2romTnb)

* Milner Boardman and Duff and Phelps have been appointed as joint liquidators to Retail Acquisitions Limited, which was set up by the former bankrupt Dominic Chappell, according to Sky News. (bit.ly/2royTFq)

The Independent

* Almost thirty countries, including Iran, Congo and Burkina Faso, offer more favourable benefits for new dads than the UK does, according to new analysis conducted by family law firm First4laywers. (ind.pn/2roHB6C)

* Inflation jumped unexpectedly to 2.9 percent in May, its highest level in nearly four years, according to the Office for National Statistics. (ind.pn/2rokOb0)

 

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UK property market forecast to take hit on political uncertainty

UK property market forecast to take hit on political uncertainty

  • Growing evidence of slowdown in UK property market
  • Slow-down in activity in UK housing market in run up to UK election
  • Average UK house prices dropped in the three months to May
  • Halifax report annual house price growth fallen to a four-year low of 3.3 percent.
  • “Political instability breeds procrastination on the part of homebuyers and sellers”
  • Sterling drop will increase divide in housing market, first time buyers continue to struggle
  • House price growth has lost momentum, volumes continue to drop

UK property market forecast to take hit on political uncertainty

The United Kingdom has been dealt a couple of ‘shocks’ in the last year – Brexit and the Conservative’s lost majority in Parliament.

The only thing that these results definitively mean for the country is uncertainty. Whilst every voter and British resident works to navigate these unclear times there is an air of nervousness about how things will pan out. This is becoming clear through the commonly used temperature gauge of any Western economy – the housing market.

Latest data suggests that both Brexit and the UK election have negatively impacted the already overheated property market. With little foresight as to how the economy and government will move forward, the housing industry is feeling nervous.

“The general election is again commonly cited as a factor hindering activity, causing some hesitancy from both buyers and vendors.” stated RICS upon release of their latest survey. Prices have also been affected by Brexit. Before Britain voted to leave the EU, the UK had seen year-on-year price rises of almost 10 percent, now house prices are either stalling or falling.

Housing market tense and uncertain

A survey carried out by Royal Institution of Chartered Surveyors (RICS) found brewing problems in the market were largely down to concerns over both the outcomes of the snap election and Brexit.

The professional body reported British house prices had risen at their slowest rate since August 2016, in May. Volumes were also down as enquiries from new buyers, new instructions from those wanting to sell and agreed sales had all declined during May, with the number of homes being put up for sale falling the most since just after the 2016 Brexit result.

The British Pound may well weaken further as we head into Brexit negotiations. This will provide international buyers with the further opportunity to purchase with a favourable exchange rate. However, they too do not like uncertainty and will likely look for more concrete assurances on how this will all play out.

Over the medium term it’s not all bad news for house prices, according to RICS contributors house prices are expected to increase at a faster pace than wages over the medium term. In short, first-time buyers will continue to suffer as the gap grows.

Currently UK house prices are nearly 8.5 times average earnings. Despite figures suggesting a fall in house prices the ratio is still at a level has not been seen at since the last property boom. On average it has never been financially easier to get a mortgage. Interest rates remain at record lows in recent years so debt servicing levels remain affordable (for the time being!).

So long as interest rates stay very low, new borrowing could keep the property market going and UK house prices buoyant at least for a while longer. However this isn’t taking into account low sentiment or government policy.

Will the government lose interest?

Western governments thoroughly enjoy riding on the wave of (and supporting) increasing house prices. But this can backfire if it is the result of a housing shortage. In the UK shortages are a major problem. UK governments have repeatedly promised to solve this problem but have rarely made headway.

One of the immediate effects of the weak Conservative victory is the shakeup in both cabinet and policy. After weak RICS data, the housing market really needed an injection of confidence this last week. However, at the moment uncertainty just continues to grow given the removal of housing minister Gavin Barwell.

The housing brief of the last government is now unlikely to be priority given Brexit negotiations and now a minority government in power. Housing market policy will be closely monitored by market participants in terms of how much government can reaffirm commitments to the pre-election policy direction rather than switch things and create further disruption or uncertainty.

The most recent housing policy white paper outlined ways and means to expand housing supply. In addition, the industry and government had both shown interest in supporting new methods of delivery such as build to rent and off-site construction. Progress in any of these areas is unlikely to be evident for some time, especially so prior to Brexit.

For new builds and development this could be a major problem, as Hayley Scott from Investec Structured Property Finance told CityAM,  “Volatility and uncertainty may return to the sector….A number of proposed new projects may indeed be put on hold as the property sector takes stock of this result. Banks are likely to be cautious about financing new developments. Real estate as an asset class will lose favour with institutional and overseas investors as doubts hang over the UK real estate sector.”

Concluding thoughts

A collapse in the housing market would devastate the banking system and sterling. Confidence affects sentiment. Very few markets enjoy uncertainty and the property market is no exception. Sentiment in property markets generally changes more slowly than in more liquid, traded markets but when it does, it is as powerful a driver of prices.

In the short to medium term, Mrs May’s government has a lot of work to do when it comes to assuring markets, investors, buyers and sellers that they have this ship stable and there is nothing to worry about when it comes to property. Right now, these reassurances seem to be hot air, the longer this goes on the more damage will be inflicted on an already delicate situation.

Ultimately it is easy money that has lead us into a situation where a couple of elections can put a multi-billion pound industry close to its knees. Investors would be wise to prepare for a time (in the not too distant future) when times become tough thanks to weak sentiment and low confidence.

It is not just in the UK that property prices look over valued. In the event of price falls, gold is likely to act as a hedge and preserve wealth. Investors should select a reasonable allocation to gold bullion which is held in allocated and segregated storage.  Owning these assets away from the system which fuels these overheated property markets will soon be seen as prudent.

 

News and Commentary

Short term risk this week, then “gold should begin to move higher again” – GoldCore (MarketWatch.com)

Gold notches 5th-straight day of losses ahead of Fed decision (MarketWatch.com)

ECB sells USD, buys €500m of Chinese renminbi (Europa.eu)

UK currency traders abandon extradition fight, agree to face charges in NY (Telegraph.co.uk)

‘Brexit squeeze’ hits families as inflation soars to 2.9 per cent (Standard.co.uk)

Source: Bloomberg, U.S. Global Investors via GoldSeek

Gold is back in fashion – and back in value (FTAdviser.com)

Gold SWOT Analysis: Strength Is Justified – UBS (GoldSeek.com)

Zimbabwe: When The Black Market Becomes The Real Market (ZeroHedge.com)

Massive Central Bank Asset Purchases: Last Ditch Effort To Save Economy & Cap Gold Price (GoldSeek.com)

‘Horrendous storm’ to hit stocks, Wall Street not rational – Stockman (CNBC.com)

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Avoid Digital & ETF Gold – Key Gold Storage Must Haves

Gold Prices (LBMA AM)

14 Jun: USD 1,268.25, GBP 995.83 & EUR 1,131.41 per ounce
13 Jun: USD 1,261.30, GBP 992.26 & EUR 1,125.33 per ounce
12 Jun: USD 1,269.25, GBP 998.14 & EUR 1,131.28 per ounce
09 Jun: USD 1,274.25, GBP 1,001.31 & EUR 1,139.18 per ounce
08 Jun: USD 1,284.80, GBP 992.12 & EUR 1,142.70 per ounce
07 Jun: USD 1,292.70, GBP 1,001.07 & EUR 1,146.62 per ounce
06 Jun: USD 1,287.85, GBP 997.31 & EUR 1,144.77 per ounce

Silver Prices (LBMA)

14 Jun: USD 16.96, GBP 13.32 & EUR 15.14 per ounce
13 Jun: USD 16.82, GBP 13.21 & EUR 15.01 per ounce
12 Jun: USD 17.13, GBP 13.50 & EUR 15.27 per ounce
09 Jun: USD 17.35, GBP 13.60 & EUR 15.52 per ounce
08 Jun: USD 17.60, GBP 13.60 & EUR 15.67 per ounce
07 Jun: USD 17.60, GBP 13.64 & EUR 15.71 per ounce
06 Jun: USD 17.56, GBP 13.61 & EUR 15.62 per ounce


Recent Market Updates

– In Gold we Trust: Must See Gold Charts and Research
– Pension Funds, Sovereign Wealth Funds, Central Banks “Stock Up” on Gold “Amid Uncertainty”
– 4 Charts Show Gold May Be Heading Much Higher
– Gold in Pounds Surges 1.5% To £1,001/oz – UK Political Turmoil Likely
– Gold Prices Steady On UK Election Risk; ECB Meeting and Geopolitical Risk
– Gold Breaks 6-Year Downtrend On Safe Haven and 50% Surge In Chinese Demand
– Deposit Bail In Risk as Spanish Bank’s Stocks Crash
– Terrorist attacks see Gold Stay Firm
– Trust in the Bigger Picture, Trust in Gold
– Trump, UK and the Middle East drive uncertainty
– Is China manipulating the gold market?
– Why Sharia Gold and Bitcoin Point to a Change in Views
– Bitcoin volatility and why it’s good for gold

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Our Air Traffic Control System Is a Primitive Bureaucracy: New at Reason

It’s time to free the skies.

John Stossel writes:

Wonder why your flight is late?

Why planes keep circling?

Why even after you’ve landed, you sometimes can’t deplane?

Bad weather plays a role, but flying is also nastier because American airports use 50-year-old technology.

This shouldn’t surprise us. Government bureaucracies are always slow. That’s as true on the tarmac as everywhere else.

It’s not Federal Aviation Administration workers’ fault. They’re just following the government rulebook that says you must not change something without getting permission first. You must not buy anything without going through cumbersome acquisitions regulations.

The FAA’s new NextGen system was designed to make the system more efficient by using satellites instead of ground-based radar. It would let planes fly closer to each other, speeding up everything. This technology has existed for two decades, but because of the bureaucracy, it’s still being rolled out.

View this article.

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“The Fire Destroyed Everything, We Saw Them Dying”: Inferno Engulfs London Apartment Tower; At Least 6 Dead

At least six are dead and more than 64 injured, 20 of them critically, after a catastrophic fire at the 24-story Grenfell Tower in the Kensington area of London. A witness told Reuters she feared not all the residents had escaped the fire. Some were evacuated in their pyjamas.

As Reuters described the inferno, flames licked up the sides of the block in the north Kensington area as 200 firefighters, backed up by 40 fire engines, fought the blaze for hours. Plumes of black and gray smoke billowed high into the air over the British capital hours after the blaze broke out at the Grenfell Tower where several hundred people live.

"I looked through the spy hole and I could see smoke everywhere and the neighbors are all there. There's a fireman shouting 'get down the stairs'," one of the block's residents, Michael Paramasivan, told BBC radio. "It was an inferno."

Residents rushed to escape through smoke-filled corridors in the housing block after being woken up by the smell of burning. Some said no fire alarm sounded. Witnesses said they saw trapped residents desperately shouting for help from windows on upper floors as flames enveloped the building.

"As we went past the fourth floor it was completely thick black smoke. As we’ve gone outside I’m looking up at the block and it was just going up. It was like pyrotechnics. It was just unbelievable how quick it was burning."

London Fire Brigade said the fire engulfed all floors from the second to the top of the block which contained 130 apartments.

"In my 29 years of being a fire fighter, I have never ever seen anything of this scale," London Fire Brigade Commissioner Dany Cotton told reporters

In a statement released moment ago, Commander Stuart Cundy of the Metropolitan Police said: “I can confirm six fatalities at this time but this figure is likely to rise during what will be a complex recovery operation over a number of days. Many others are receiving medical care.”

In an echo of a fire that engulfed a luxury tower in Dubai that occurred on New ‘ Eve in 2015, early reports suggest that the cladding material used in construction – the outer layer of covering on the building – was flammable, and allowed the flames to quickly spread to every floor of the building.  

More than 200 firefighters and dozens of fire trucks and ambulances were called to the scene, according to the Associated Press. Buildings adjacent to the Grenfell Tower were evacuated by police and firefighters over fears that the flames could spread. London Fire Commissioner Dany Cotton calls the fire an “unprecedented incident” and says she has never seen anything on this scale in her 29-year career.

George Clarke, the presenter of “Amazing Spaces,” told Radio 5 Live he was covered in ash even though he was 100 meters (yards) from the scene. He said he saw people waving flashlights from the top levels of the building and saw rescuers “doing an incredible job” trying to get people out.

Authorities fully expect that the number of casualties will rise.

The fire erupted around midnight, and burned for more than nine hours.

At least one group has been warning about potential vulnerabilities at the high-rise. The Grenfell Action Group, a community organization formed to oppose a nearby redevelopment project, has been warning about the risk of fire there since 2013, the AP reported. The group says on its blog that it has raised concerns about testing and maintenance of firefighting equipment and blocked emergency access to the site.

One witness who spoke to AP says she saw a member of the public catch a baby that was dropped from the burning tower block in west London.

Samira Lamrani told Britain’s Press Association she saw a woman try to save the baby by dropping it from a window “on the ninth or 10th floor.”

She says “people were starting to appear at the windows, frantically banging and screaming. The windows were slightly ajar, a woman was gesturing that she was about to throw her baby and if somebody could catch her baby. “Somebody did, a gentleman ran forward and managed to grab the baby.”

London Mayor Sadiq Khan says questions need to be answered about tower blocks around the city following a devastating fire. Khan had been called to respond after reports that people had been advised in advance to remain in their flats in the event of fire. Khan says in a statement “there will be a great many questions over the coming days as to the cause of this tragedy and I want to reassure Londoners that we will get all the answers.”

The Guardian reported that residents repeatedly warned about the fire risk.

Michael Paramasivan, 37, a builder, lives on the seventh floor of the tower and managed to escape along with two roommates who escaped with him.

“I’ve lost absolutely everything,” he told the Guardian. “The most chilling moment was when I suddenly realised it was a fire.

“Between 1am and 1.30am, I was dozing in and out of sleep. I then smelled something. I got up and looked around to see if it was an electrical fault but there was nothing. Then I looked through the spyhole. There was smoke and people running past. We just ran straight out down the stairs.”

Paramasivan said the material on the outside of the building went up in flames rapidly. “It just went up like that,” he said, gesturing wildly. “There’s no fire alarms in the corridors, no sprinklers, nothing. There’s only smoke detectors in the flat and they didn’t go off.”

A live feed from the scene courtesy of RT

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