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In a mixed session, which has seen Asian stocks ex-Japan broadly higher, the European Stoxx 600 index dropped as much as 0.6% after data Markit PMI data signalled euro-area economy grew in July at its slowest pace in six months while carmakers extended declines on continued concern about antitrust collusion in the industry.  Germany’s DAX Index was hardest-hit euro-area benchmark, down as much as 0.8%. Autos continued to be the worst-performing sector on the Stoxx Europe 600 after EU and German regulators said they are studying possible collusion among German automakers. Der Spiegel magazine reported on Friday that BMW, Daimler and Volkswagen may have cooperated for decades on technology. 

Concerns have risen that with the Euro trading near its strongest level in 2 years and appreciating 11% against the USD YTD, it may weigh on exporters’ earnings; 1.20 on the EURUSD is being seen a key barrier beyond which European earnings will suffer.  As a result, the euro headed for its first decline in three days as data showed the region’s economy cooling at the start of a week packed with earnings results and a Federal Reserve rate decision. Stocks were dragged down for a second day by carmakers amid a collusion probe.

The common currency halted the advance that saw it hit a two-year high after a composite Purchasing Managers’ Index fell in July to a six-month low. Automakers extended a slump as European Union and German authorities said they are studying possible collusion among German producers. Crude fluctuated as an OPEC committee gathers to discuss the progress of supply cuts. Bonds were mixed.

Europe’s PMI was closely scrutinized after both German and Eurozone manufacturing missed expectations:

• Flash Eurozone PMI Composite Output Index at 55.8 (56.3 in June), below the 56.2 expected and 6-month low.
• Flash Eurozone Services PMI Activity Index at 55.4 (55.4 in June), below the 55.6 expected. Growth unchanged.
• Flash Eurozone Manufacturing PMI Output Index at 56.9 (58.7 in June). 6-month low.
• Flash Eurozone Manufacturing PMI(3) at 56.8 (57.4 in June). 3-month low.

Meanwhile, in a week heavy on political and monetary events, with several key Trump-related hearings later in the week, as well as the Fed’s July decision on deck, earnings from industry bellwethers from Amazon.com Inc. to GlaxoSmithKline Plc are set to provide the latest tests for a bull market that’s propelled the value of global equities to $78 trillion. According to Bloomberg, euro-area manufacturing figures indicate that gross domestic product is expanding at a 0.6 percent quarterly pace, compared with 0.7 percent in the second three months of the year, adding further doubts about the sustainability of the stock rally at a time when the strong euro is weighing on exporters.

In Asia, the MSCI Asia Pacific Index edged higher after rallying over the past two weeks to the highest level in more than 10 years. Japan’s Topix index slid 0.5 percent, after dropping as much as 1 percent earlier in the day. Australia’s S&P/ASX 200 Index lost 0.6 percent.  The Shanghai Composite Index advanced 0.4 percent while Hong Kong’s Hang Seng was 0.5 percent higher. India’s Sensex climbed 0.6 percent to a record. The Australian dollar rose 0.6 percent, trading above 79 U.S. cents ahead of a speech by Reserve Bank of Australia Governor Philip Lowe on Wednesday.

The Dollar slumped to a five-week low against the yen on concern a widening probe into possible ties between Russia and U.S. President Donald Trump’s election campaign may derail his growth agenda. Lower U.S. Treasury yields and oil prices spur leveraged selling in the greenback ahead of Jared Kushner’s closed-door meeting with the Senate Intelligence Committee on Monday, according to an Asia-based foreign-exchange trader quoted by Bloomberg. As noted over the weekend, hedge funds and other large speculators were the most bearish on the dollar in more than four years as the Federal Reserve meets this week

As noted earlier, the Polish zloty jumped the most against the euro since May after Poland’s President Andrzey Duda said he’d veto part of an overhaul of the judiciary that’s brought tens of thousands of protesters into the streets across the eastern European nation

In rates, the German government bond yields edged lower after euro zone PMI data also came in below forecasts. The 10-year yield – the benchmark for euro zone borrowing costs – fell to 0.49 percent, down 0.4 basis points and its lowest in more than a week. Yields fell on Friday as the strong euro led investors to question the timing of when the ECB would begin to withdraw its stimulus.

Bulletin Headline Summary from RanSquawk

• European equities trade lower amid disappointing PMI readings and downside in auto names
• Quiet start to the week for FX markets with participants eyeing this week’s FOMC meeting
• Looking ahead, highlights include Eurozone and US PMIs, US Existing Home Sales

Market Snapshot

• S&P 500 futures down 0.1% to 2,466.50
• STOXX Europe 600 down 0.3% to 379.14
• MXAP up 0.03% to 159.58
• MXAPJ up 0.3% to 526.46
• Nikkei down 0.6% to 19,975.67
• Topix down 0.5% to 1,621.57
• Hang Seng Index up 0.5% to 26,846.83
• Shanghai Composite up 0.4% to 3,250.60
• Sensex up 0.7% to 32,251.51
• Australia S&P/ASX 200 down 0.6% to 5,688.07
• Kospi up 0.06% to 2,451.53
• German 10Y yield fell 0.9 bps to 0.497%
• Euro down 0.2% to 1.1644 per US$
• Brent Futures up 0.3% to $48.19/bbl
• Italian 10Y yield fell 4.1 bps to 1.78%
• Spanish 10Y yield rose 0.6 bps to 1.457%
• Brent Futures up 0.3% to $48.19/bbl
• Gold spot up 0.1% to $1,256.03
• U.S. Dollar Index up 0.1% to 93.93

Top Overnight News

• The Fed will unveil the timing of its balance sheet unwind in September and wait until December to raise interest rates again, according to a Bloomberg survey of 41 economists
• U.K. Trade Secretary Liam Fox will meet his U.S. counterpart in Washington on Monday as Britain seeks a trans-Atlantic trade deal as soon as possible after leaving the EU
• The world is leaning less on its biggest economy to sustain the global recovery, according to the International Monetary Fund. Beneath the global growth figures, the drivers of the recovery are shifting, with the world relying less than expected on the U.S. and U.K. and more on China, Japan, the euro zone and Canada, according to the Washington- based fund
• The Polish zloty jumped the most against the euro since May after Poland’s President Andrzey Duda said he’d veto part of an overhaul of the judiciary that’s brought tens of thousands of protesters into the streets across the eastern European nation
• U.K.’s Fox in U.S. to Argue for Quick Post- Brexit Trade Deal
• White House Team Differs on Trump Support for Russia Sanctions
• Euro Area Economy Grows at Slowest Pace in Six Months
• OPEC Signals No Big Changes to Supply Deal at Meeting in Russia
• Fed Seen Making September Balance-Sheet Announcement: Survey
• America First No More as IMF Sees U.S. Fading as Growth Engine
• BMW Denies Diesel Cheating as EU, Germany Probe Auto Cartel
• Asda Is Said to Hold No Takeover Interest for B&M: Telegraph
• J&J Picks HIV Vaccine Candidate for Further Testing This Year
• Glaxo’s ViiV, J&J HIV Injection Shown as Effective as Oral Dose
• Blackstone Buys Clarion Events; No Terms
• Ireland to Hire Custodian to Manage Cash From Apple Tax Case
• Monsanto Cites Illegal Off-Label Products in Dicamba Findings
• Diebold Nixdorf Dragged Down by Peer’s Disappointing 3Q Forecast
• HCA in Pact to Buy Hospital From Community Health; No Terms
• Polish President Duda to Veto Part of Judiciary Legislation
• Deutsche Bank, JPMorgan Agree to Settle Yen-Libor Lawsuits

Asian stocks traded mixed after quiet weekend news flow and with participants awaiting the upcoming FOMC meeting on Wednesday. ASX 200 (-0.7%) traded negative as energy and financial sectors weighed on the index, whilst Nikkei 225 (-0.6%) also suffered in the red amid a strong JPY. Shanghai Comp. (+0.4%) and Hang Seng (+0.4%) were higher following the PBoes firm liquidity injection of CNY 350b1n, in addition to some Hong Kong banks reducing deposit rates to less than 4% after declines in the CNH HIBOR. Finally, 10yr JGBs were flat with brief pressure seen after the BoJ Rinban announcement, in which it reduced buying of 5yr-10yr JGBs to JPY 470bn from JPY 500bn. PBoC injected CNY 200b1n via 7-day reverse repos and CNY 150bln in 28-day reverse repos. PBoC set CNY mid-point at 6.7410, Prev. 6.7415.

Top Asian News

• China Banks That Funded HNA’s Growth Are Said to Halt New Loans
• Mystery Bond Trader Nets $10 Million on Treasury Strangle Gamble
• Singapore Startup Takes Bitcoin Into Real World With Visa
• India Starts Antidumping Investigation on Imported Solar Cells
• No Relief for Lanka Rupee Sliding at Fastest Pace Since 2006
• Exporters Lead Japanese Stock Decline as Yen Holds Gains

Broadly a negative start for European equities with weakness stemming from Automakers and Airliners. Germany automakers, BMW, Daimler and Volkswagen softer this morning following reports that the European Union confirmed a probe into alleged price-fixing, while airliners have been dragged lower by Ryanair following the release of their financial results. Elsewhere, lower crude prices, coupled with weaker than expected Eurozone PMI readings has also added to the risk off tone. Credit markets have been supported by safe-haven flow, while peripheral bonds are slightly tighter to bunds this morning. Spanish debt supported from Fitch revising its outlook on Spain to positive, while month-end extensions are aiding OATs, Bonos and BTPs.

Top European News

• Saudi Energy Minister: Build-Up in Global Inventories Reversing
• Polish Zloty Jumps Most Since May as President Scraps Court Bill
• Telecom Italia Shares Rise as Board Meets to Approve CEO Exit
• Czech Top Judges Say Polish Judicial Reforms Undermine Democracy
• IMF Cuts U.K. Forecast After Disappointing First- Quarter Growth

In currenices, it has been a very quiet start to the week with the greenback a fraction firmer, however the bias remains to the downside amid the ongoing US political uncertainty. DXY saw a break below 94.00, hitting a low of 93.82 in Asia, slight attention will be placed on the FOMC decision, as participants look for clarity on the timeline of balance sheet normalisation. Antipodeans (AUD, NZD) were the notable mover overnight with much of the price action seen through the cross as AUD/NZD moved within a whisker of 1.07. RBA speak last week failed to temper the AUD rise with the currency consolidating above 0.7950 and hovering around 2Y highs. Focus will be on RBA. Governor Lowe on Wednesday who may also look to curb the recent surge. EUR sagging this morning having touched lasts week post ECB peak at 1.1684, while softer PMI releases from France and Germany have also added to the EUR easing. EUR slightly south of 1.1650 with bids noted just ahead of Friday’s low at 1.1619.

In commodities, crude prices were softer this morning with both WTI and Brent down initially, amid the OPEC/Non-OPEC monitoring committee meeting the Saudi Energy Minister has stated that there has been no discussion over deeper cuts, however there has been talks over Nigeria and Libya production caps, given their recent increase in output. Gold rangebound after prices briefly touched a 4-week high on the back of a politically. Subsequently the energy complex rebounded however, after the Saudi energy minister made some solemn promises, in which he saw Saudis capping exports at 6.6mmb/d, saying that Nigeria would cut if it reaches output of 1.8mmb/d, and sees a deep cut in Saudi August production.

Looking at today’s busy session, we get the July manufacturing, services and composite flash PMIs for Germany, Eurozone (both of which declined and missed expectations) and the US later this morning. Existing home sales data in the US will also be released.

US Event Calendar

• 9:45am: Markit US Manufacturing PMI, est. 52.2, prior 52; Services PMI, est. 54, prior 54.2; Composite PMI, prior 53
• 10am: Existing Home Sales, est. 5.57m, prior 5.62m; Existing Home Sales MoM, est. -0.89%, prior 1.1%

DB’s Jim Reid concludes the overnight wrap

After a long hot first half to the summer, Saturday was cold in Surrey with torrential downpours that lasted most of the day. Probably the one person in the UK doing cartwheels of celebration at this turn in the weather was my wife who has just about had it with being doubly pregnant in summer. The cartwheels are figurative of course as she is struggling with everything physical at the moment. Help is at hand though and today marks the start of what I’ve resigned myself to be the start of a 25 year (minimum) financial noose around my neck. We have hired a nanny who starts today. Just as her job is done, three sets of school fees will then filter through, followed by University fees, help with deposits on their first homes and then finally their weddings where at that point I’ll pass them on to be someone else’s financial responsibility. If I succeed I’ll tell you about it in the EMR sometime in 2042 via telepathic hologram or whatever medium this gets published via at that point. I’ll be interested to hear from the elder readers at what age their offspring became financially independent!

Moving on and forgetting the fact that I’ve now committed to a path with no return, the highlight this week are today’s flash PMI numbers and the FOMC meeting this Wednesday, although the latter will likely be a relatively mundane affair with the action perhaps being saved for a September balance sheet announcement. Nevertheless we’ll preview our expectations just before the week ahead at the end. One also has to keep an eye on all things Washington related following Friday’s announcement of Press Secretary Sean Spicer’s resignation. Mr Trump now has new people at the helm of both his legal and communications teams after resignations towards the end of last week. Late on Friday Congressional negotiators agreed to advance a bill punishing Russia for its involvement in the 2016 election and also restricting Presidential powers to remove sanctions on Russia. It will now go to a vote and if it passes Mr Trump could be in a difficult situation as he has publicly stated he wants improved relations with Russia but clearly if Congress has voted for the bill he’d be seen as siding with Mr Putin if he didn’t respond positively when it reached his desk. These matters are obviously important for many reasons not least as Mr Trump does need Congress on his side if he has hopes of rescuing his legislative agenda.

Elsewhere, today sees senior White House advisor Jared Kushner interviewed by the Senate Intelligence committee, with Donald Trump Jnr. and ex-Trump campaign Chairman Paul Manafort before Senate committees on Wednesday. As the week starts in Asia, the Nikkei (-0.9%) and the Kospi (-0.1%) have softened, but the Hang Seng is up 0.4% to be at the highest level since July 2015. The three key Chinese bourses ranged from -0.1% to +0.2%. Overnight the IMF have released their latest vow on the global economy and their chief economist is increasingly confident that “the recovery in global growth is on a firmer footing….there is now no question mark over the world economy’s gain in momentum,”. Headline global growth of 3.5% in 2017 and 3.6% in 2018 is the same as April, but the projections now capture downward revision to US and UK, offset with improvements in China, Europe and Japan. Compositionally, US has been cut by 0.2% and 0.4% respectively, to 2.1% growth in both 17 and 18. UK has been cut to 1.7% (-0.3%) for 17, while Europe is expected to grow by 1.9% in 17 and 1.7% in 18.

Despite a general lack of data on Friday, Global markets saw a broader risk off move. US and European equities were down with the DAX, STOXX 600 and S&P 500 falling -1.66%, -1.32% and -0.04% respectively. In Europe we saw losses across all sectors with Automobiles (-2.7%) being the worst hit while banks were also down -1.1%. In fact the DAX is now at 3 month lows, probably not helped by the 2-year high in the Euro. Indeed the dollar index fell by -0.5% on Friday to end the week down -1.4%, while the Euro continued to strengthen as it gained +0.3% on Friday (vs the Dollar) to end the week up +1.7% as a whole (+2.5% vs  Sterling). The S&P 500 did rally into the close after hitting its lows (around -0.4% for the day) around the time Europe went home. Energy (-0.88%) was the big laggard in the US after Oil fell -2.45% partly on news that OPEC supply this month is expected to be at its highest levels since December. This more than offset earlier week gains closing -1.7% on the week. Tech stocks were just in the red and ended a 10-day positive run. Precious metals also benefited from the risk off moves with Gold and Silver both ticking up by just over +0.5% respectively.

Credit Markets somewhat mirrored the risk off moves in equities. In Europe iTraxx Main was about -1bp tighter on the day but Crossover widened around +1bps. Risk off moves were more visible in the US where CDX IG was flat on the day but CDX HY widened by +3bps. Staying with credit, this morning we have published a Credit Bite where we highlight the resilience of the EUR HY market to the moves in government bond yields following Draghi’s Sintra speech. We do note however that there has been some weakness in the technicals that are worth keeping an eye on. If you haven’t received the report please contact Nick Burns.

Talking of yields, bonds continued their recovery on Friday as we saw yields on  US Treasuries (2Y -1bp; 10Y -2bps) and German Bunds (2Y: unch; 10Y -2bps) fall across most maturity points. Yields on Gilts (10Y -3bps), OATs (10Y -2bps) and BTPs (10Y -4bps) also dropped on the day. After a week where the ECB and Draghi were seen as relatively dovish on the pace of tightening (if not deviating from the message that tightening was coming), Bunds fell 9bps but Italian and Spanish bonds fell 22bps and 20bps respectively.

Taking a look back at Friday’s calendar, it was an uneventful end to the week in terms of macro data. In Europe the only data of note was UK public sector net borrowing data for June where the deficit overshot expectations at 6.3bn (vs. 4.2bn expected; 6.0bn previous). Across the pond there was no data of note in the US, but Canada saw June inflation come in just marginally below expectations (+1.0% YoY vs. +1.1% expected; +1.3% previous).

Before we detail the full week ahead, let’s preview the FOMC this Wednesday. Our US economics team published a note on Friday updating their view on the Fed and detailing their expectations for the July FOMC statement. They note that the Fed is unlikely to take any action in a policy firming direction at the meeting this week, partly because inflation has continued to surprise to the downside as of late. They do expect the FOMC statement to particularly focus on how the Fed will handle the dichotomy between a resumption of moderate growth and continuing improvement in the labor market on one hand and ongoing softness in inflation on the other. Given this dichotomy they modestly update their Fed view – they see the Fed pausing in Q1 2018 after another hike in December and then resuming at a pace of one hike per quarter thereafter, thus moving their Fed call in line with the median FOMC expectation of three rate hikes during 2018. On the topic of the timing of the initial taper of balance sheet reinvestment the team  believes that a July announcement and August tapering (while possible in principle) has a low probability given a) the recent softness in inflation; b) because Yellen did not take the opportunity at her Congressional testimony to more strongly signal a July announcement; and c) because market expectations are generally centred on a September announcement and October commencement. They note that these relatively strongly held market expectations should also allow the Committee to get by without giving any more specific guidance on timing even within this week’s statement.

To the rest of the week ahead now. Monday starts with the July manufacturing, services and composite flash PMIs for Germany, Eurozone and the US. Existing home sales data in the US will also be released. Onto Tuesday, Germany will have the IFO July index for business climate and expectations, while France will report confidence indicators for July. In the US on Tuesday data includes consumer confidence, FHFA house price index, S&P/Case-Shiller house price index and Richmond Fed manufacturing index. Turning to Wednesday, in the UK Q2 GDP is due, while the focus in the US will be the July FOMC rate decision. New home sales data will also be due. For Thursday, the morning session looks quiet with only Euro area M3 money supply data due. Across the pond the US will update its durable and capital goods orders for June as well as the initial jobless claims, advance goods trade balance, wholesale inventories and Kansas City Fed’s manufacturing index. Finally, on Friday, the early data is out of Japan where June CPI data is due, while in Europe we have Germany and France providing an update on CPI. Euro area confidence indicators are also due. It’s a bumper end to the week in the US with the advance Q2 GDP report, core PCE and the final University of Michigan consumer sentiment reading.

Onto other events. On Monday, the UK begins preliminary post-Brexit trade talks with the US, ECB’s Frank Smet’s will speak at Munich and OPEC and non- OPEC meet in Russia to discuss progress with production cuts. On Tuesday, the US secretary of Commerce will address the economic club of Washington. Onto Wednesday the Fed of Minneapolis President will be the first speaker post the FOMC decision. Finally, notable US companies due to report include: Alphabet, Amazon, AMD, AT&T, Twitter, Facebook, McDonalds, GM, Caterpillar, Ford, Boeing, Royal Dutch Shell, Chevron, Exxon, Merck and AbbVie. Closer to home, we also have CS, BNP Paribas and UBS due to report.

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

Polish President Andrzej Duda unexpectedly said on Monday that he would veto two of three bills reforming the country’s judiciary system, easing Brussels’ fears that the ruling Law and Justice party will undermine the division of powers. In a news conference on Monday morning, Duda said that he would veto two of three contentious bills, one that would have forced all members of the Supreme Court to step down, except for those kept on by the president; and a second that would have given parliament control over the National Judicial Council, the body that appoints judges, the FT reports.

“I have decided that I will send back to Sejm (lower house of parliament), which means I will veto the bill, on the Supreme Court, as well as the one about the National Council of the Judiciary,” Duda said after days of mass street protests adding “I regret that I, as president of the Republic of Poland, wasn’t consulted over this initiative before it reached the Sejm [the lower house of parliament]. I couldn’t carry out consultations [on this matter] and nor could the other interested entities.”

Duda’s veto puts him at odds with the de facto leader of the country, Jaroslaw Kaczynski, who is the leader of PiS but has no formal government post, Reuters notes. Poland’s ruling Law and Justice party claims that the changes are necessary to overhaul an inefficient system that has not been purged since the collapse of communism almost three decades ago.

However, in recent days the legislation has faced mounting international criticism, and sparked days of protests, with tens of thousands of Poles taking to the streets to rally against the changes which they fear would undermine the independence of the judiciary. The US State Department on Friday urged Poland to “ensure that any judicial reform does not violate Poland’s constitution or international legal obligations and respects the principles of judicial independence and separation of powers”.

Duda’s decision was greeted by the opposition: “What we had was not a reform, but appropriation of the courts. I congratulate all Poles, this is a great success, really,” Katarzyna Lubnauer, head of the parliamentary caucus of the opposition party Nowoczesna.

Meanwhile the Polish zloty, which tumbled under pressure as the battle over the judicial reforms has unfolded, jumped on the news, trading up 0.9 per cent at PLN4.24 against the euro.

via http://ift.tt/2vAA430 Tyler Durden

Authored by Mike Shedlock via MishTalk.com,

On June 14, Reuters reported Munich, Home to BMW, Considers Diesel Ban to Tackle Pollution.

Today, with strong overtones of regulators hopping in bed with industries they are supposed to regulate, EU’s Car Regulator Warns Against Diesel Ban in Cities.

Munich, home to carmaker BMW, has become the latest German city to consider banning some diesel vehicles amid “shocking” nitrogen oxide emissions in the Bavarian capital.

 

“As much as I would welcome avoiding such bans, I think it is just as unlikely that we can continue to do without bans in the future,” Munich mayor Dieter Reiter was quoted as saying by the Sueddeutsche Zeitung newspaper on Wednesday.

 

Asked about the latest nitrogen oxide readings, which the paper said violated European air quality standards well beyond busy trunk roads, the mayor said: “The results are shocking, nobody expected this.”

 

The scandal over rigged diesel emission tests at Volkswagen has already thrown the future of diesel engines into doubt, and has highlighted carmakers’ struggle to comply with ever stricter rules on the nitrogen oxides emissions.

Regulators in Bed With Industry?

Flash forward to today.

Banning diesel cars in European cities could hamper automakers’ ability to invest in zero-emission vehicles, the European Union’s commissioner for industry has warned the bloc’s transport ministers.

 

In a letter seen by Reuters, Commissioner Elzbieta Bienkowska said there would be no benefit in a collapse of the market for diesel cars and that the short-term focus should be on forcing carmakers to bring dangerous nitrogen oxide emissions into line with EU regulations.

 

In the letter, Bienkowska told ministers she was concerned that the latest emissions violations at Audi and Porsche were discovered by prosecutors and not Germany’s vehicle and transport authorities.

 

Bienkowska’s letter also called for all cars with excessively high levels of nitrogen oxide emissions to be taken of European roads, but said carmakers should act on a voluntary basis.

 

Experts who have seen the letter to ministers say the commissioner appeared to be bowing to carmakers’ demands.

 

“Her letter contained some important statements that we believe show the industry’s lobbyists have scored a big win,” Bernstein analyst Max Warburton said in a report.

Diesel Job Math

The Center for Economic Studies (CESifo) produced a report on the German diesel industry for its stated client, the German Association of the Automotive Industry.

Let’s dive into the report on the Consequences of a Potential Ban on New Cars and Light Trucks with Combustion Engines.

Based on the structure of production in 2015, at least 457,000 employees are involved in producing types of products which would be directly affected by the ban (e.g., diesel engines). This is equivalent to 7.5% of overall manufacturing employment in Germany. The largest share of these employees (426,000) works in the automotive industry itself. If one includes product groups that would be indirectly affected (e.g., transmission systems, which are more complex in vehicles with combustion engines), the number of potentially affected jobs rises by 163,000 or an additional 3% of overall manufacturing employment. These jobs are mainly clustered in the metal industry: 102,000 employees in metal processing produce parts destined for vehicles with combustion engines. Taking the direct and indirect channel together, a total of at least 620,000 employees would be affected by the ban, which represents over 10% of total German manufacturing employment.

 

Among the 457,000 directly affected jobs, 31,000 jobs in small and medium-sized enterprises would be highly at risk. These firms can be expected to face larger difficulties than large companies in developing new alternative fields of business against the background of a major shift in propulsion technology. This share is substantially larger among indirectly affected jobs: Here 101,000 out of 163,000 jobs are situated in small and medium-sized enterprises and highly concentrated among automotive suppliers in the metal industry.

 

If value-added is considered instead of employment, these effects become even more pronounced. This is due to the exceptionally high average labour productivity in the automotive industry. If direct and indirect effects are combined, around 13% of German overall manufacturing value added would be affected by the ban. Based on the 2015 figures, this would represent a volume of 48 billion euros. In interpreting these figures, one has to bear in mind that not the entire workforce and value-added “at risk” would necessarily vanish. Some parts, for example, are also used in heavier trucks and buses, which would probably not be subject to the ban. In addition, new jobs in the areas of alternative propulsion technologies in Germany would help to limit employment reduction, at least in the aggregate.

Germany’s Over-Dependence On Diesel Technology

Eurointelligence discussed diesel in a recent article.

As we have noted time and again it is very hard for people to separate their expectations of the future from their fundamental beliefs. One of the unshakable beliefs in Germany is the virtue of the diesel car. It gives the German motor industry a competitive advantage that cannot be reversed.

Except, of course, through new technologies and shifting social trends.

 

We noted this tendency to wishful thinking again when we read a story in FAZ this week on the future of the diesel car in Germany, and the importance of the technology for the German economy. One of the statistics quoted is that one tenth of the jobs in German industry directly depends on the production of car engines. And so, the car-obsessed media reporters and German economists have a tendency to downplay technological, social, and political trends by insisting that diesel still has a future.

 

The Ifo institute has done the math on the impact of a diesel bans on the industry. It shows that 620,000 jobs in Germany directly and indirectly depend on the production of fuel engines for cars – about 1.5 percentage point of the labour force. This is about 10% of all jobs in German industry. These numbers would include suppliers, but presumably, do not take account of any multiplier effects one would observe if those jobs were to disappear.

 

The Ifo Institute made another important observation, according to FAZ. If fuel-driven engines were made illegal from 2030, Germany could reduce its carbon dioxide emission by one-third. But the study does not advocate such a strategy. Indeed the headline says that banning combustion engines is the wrong path to take. The Ifo institute favors free-market solutions to the problem. Ifo chief Clemens Fuest, who presented the study, argued that it would be a mistake to over regulate the industry because this would waste resources, which in turn would be bad for the goal of climate protection.

 

We also note confirmation bias among diesel advocates in that they only ever focus on carbon dioxide emissions, rather than the high levels of nitrogen oxides and other substances that are believed to be responsible for tens of thousands of death each year in Europe. This is the main reason why cities are now considering diesel bans.

 

The study also tried to correct the impression that German car makers are inactive when it comes to alternative technologies. According to the Ifo study, Germany registers around one-third of all global patents in the area of alternative engines – hybrid and electrical. We do not doubt that the German car giants are actively researching alternatives. But the point is that the competitive advantage of German motor manufacturing is predominantly based on its fuel-based engine technologies – an advantage that is bound to decline over time. They are not ahead of the game in the fields of hybrid and electric engines. There is an illusion in Germany that appears to equate the number of registered patents with future commercial success.

 

In the meantime, expect to see an increase in costs to maintain the diesel technology, and a fall in revenues. Diesel registrations in Germany are falling at a dramatic pace. And car companies are now paying for expensive recall operations, like Mercedes did this week, to upgrade existing cars with the latest software to optimize engines to reduce fuel emissions.

Protecting the Cheaters

My take is the focus on carbon dioxide is wrong. A focus on carcinogens and other pollutants would make more sense.

We can debate at length what pollution standards should be. What’s not debatable is German auto corporations lied and cheated their way to good results and now they are caught with their pants down, at least twice.

Either way, diesel is on the way out. And with that pending change, Germany’s vaunted lead in auto technology has turned into ashes.

Meanwhile, EU regulators are prepared to look the other way in an attempt to give German manufacturers time to catch up.

One can argue that letting the cheaters off the hook makes economic sense, but let’s be honest about what’s happening.

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

Authored by Soeren Kern via The Gatestone Institute,

• "I am in fundamental disagreement with these left-wing people who do everything to dissociate fundamentalism from Islam. Islam has been radicalized for fifty years. On the Shiite side, there was Imam Khomeini and his Islamic revolution. In the Sunni world, there was Saudi Arabia, which used its immense resources to finance the spread of this fanaticism of Wahhabism. But this historical evolution took place within Islam and not outside. When the people of the Islamic State attack, they do it by saying 'Allahu Akbar.' So how can we then say that this has nothing to do with Islam? It must be stopped." — Sir Salman Rushdie, author of the novel The Satanic Verses, who has been hunted to be killed by Muslim extremists for nearly 30 years.
• Residents of the Paris suburb of Mée-sur-Seine complained that a mosque was blasting prayers on outdoor loudspeakers well beyond midnight each night during Ramadan. Mourad Salah, a local Muslim leader, said the city council was to blame for the noise because of its failure to provide Muslims with a larger mosque: "The ball is in the mayor's court. Until we have a place of prayer worthy of the name, with a greater capacity, things will be difficult."
• An online petition — "Women: An Endangered Species in the Heart of Paris" — accused Paris Mayor Anne Hidalgo of allowing a large swathe of the city to become a no-go zone for women. Every night, hundreds of migrants from Africa and the Middle East line the pavements to form an intimidating gauntlet for women walking from the Gare du Nord and Gare de l'Est railway stations to their homes, the petition said. Shouts of "bitch" and "dirty whore" are common.

June 1. Saber Lahmar, a 48-year-old Algerian who has lived in Bordeaux since his release from Guantánamo Bay in 2009, was charged with "terrorist association" and placed in pre-trial detention. He is suspected of providing financial, logistical and doctrinal aid to French jihadists who were planning to travel to Iraq and Syria. Lahmar was arrested in Bosnia in 2001 after being accused of plotting to bomb the American embassy in Sarajevo. In November 2008, U.S. District Judge Richard J. Leon ordered Lahmar to be released from Guantánamo because there was insufficient reason to hold him. In December 2009, Robert C. Kirsch, a lawyer at the firm of WilmerHale, which represented Lahmar in federal court, said: "We are grateful for the courage and generosity of the French people and government, and for the ongoing effort by President Obama… which will now give Mr. Lahmar a chance to rebuild his life in France."

June 1. A group of prominent intellectuals accused French authorities of covering up the April 4 murder of a Jewish woman by her Muslim neighbor. Kobili Traoré a 27-year-old Malian Muslim, tortured 66-year-old Sarah Halimi and threw her out of her third-story apartment. The letter criticizes the Paris Prosecutor's Office for omitting hate crime charges from a draft indictment against Traoré. They cited a recording of the incident made by another neighbor. In it, Traoré can be heard shouting "Allahu Akbar" and calling Halimi "dirty Jew" to her face. Some observers believe the authorities covered up Halimi's murder to prevent it from helping Marine Le Pen's presidential campaign.

June 2. The mayor of Nice, Christian Estrosi, banned Noorassur, a local insurance broker, from hanging a sign with the words "Islamic finance" because it "poses a high risk of disturbing public order." Estrosi said the sign was placed in close proximity to the Promenade des Anglais, the site of the July 14, 2016 jihadist attack. He said that there was a risk to both the staff and the customers and that passersby might see the sign as a provocation. Noorassur's founder, Sonia Mariji, filed a lawsuit against the city. "Islamic finance is not incompatible with the Republic," she said. "I am a fruit of the Republic." Her lawyer accused Estrosi of "conveying the idea that Islamic finance is linked to Islamist terrorism."

June 6. Farid Ikken, a 40-year-old Algerian, attacked a police officer in front of the Notre Dame Cathedral in Paris. Government spokesman Christophe Castaner said the hammer attack was an "isolated act." Ikken was later charged with "attempted murder in connection with a terrorist enterprise." Prosecutor François Molins said that Ikken was radicalized through Islamic State propaganda he found on the internet. Molins also confirmed that Ikken, who had recorded a video pledging allegiance to the Islamic State, was a former journalist who was legally living in France as a student working on his doctoral thesis.

A policeman stands guard near Notre-Dame Cathedral in Paris, France, on June 6, 2017, after Farid Ikken, a 40-year-old Algerian, attempted to murder a police officer at the site. (Photo by Pascal Le Segretain/Getty Images)

June 8. In an interview with L'Obs, British Indian author Sir Salman Rushdie, the object of an Islamic death sentence for alleged blasphemy in his 1988 best-selling novel The Satanic Verses, blamed European leaders for refusing to see the reality of the origins of jihadism:

"I am in fundamental disagreement with these left-wing people who do everything to dissociate fundamentalism from Islam. Islam has been radicalized for fifty years. On the Shiite side, there was Imam Khomeini and his Islamic revolution. In the Sunni world, there was Saudi Arabia, which used its immense resources to finance the spread of this fanaticism of Wahhabism. But this historical evolution took place within Islam and not outside. When the people of the Islamic State attack, they do it by saying 'Allahu Akbar.' So how can we then say that this has nothing to do with Islam? It must be stopped."

June 11. Three more men were charged with involvement in supplying the weapon that Karim Cheufri used to kill police officer Xavier Jugelé in Paris on April 20. A total of four suspects have been charged with directly or indirectly helping Cheufri, who was shot dead after killing Jugelé and wounding two other police officers on the Champs-Elysées.

June 13. President Emmanuel Macron and British Prime Minister Theresa May announced an anti-terror action plan to remove jihadist propaganda from the internet. The action plan includes exploring the possibility of legal penalties against social media companies if they fail to remove unacceptable content from their networks.

June 14. The mayor of Mandelieu-La-Napoule, Henri Leroy, called on the fashion chain Hennes & Mauritz (H&M) to prohibit sales personnel from wearing Islamic headscarves. He said he had received repeated complaints from shopkeepers and local citizens who are "embarrassed by the religious attire of your employees." He added: "I think it is useful to remind you that the municipality is attached to Republican values and to religious neutrality." Feïza Ben Mohamed, a candidate in the local elections in the Alpes-Maritimes department accused Leroy of "Islamophobia" and of engaging in a "shameful polemic."

June 18. Marine Le Pen, leader of the anti-EU, anti-immigration National Front party, won a seat in parliament for the first time. Overall, her party won only eight seats in the 577-seat National Assembly, dashing her hopes of becoming the main opposition to President Emmanuel Macron. Le Pen blamed France's electoral system and called for proportional representation. "It's a scandal that our party that won 7.6 million votes in the first round of the presidential election and three million more in the second round, cannot form a group in the French parliament," she said.

June 19. Adam Lofti Djaziri, a 31-year-old jihadist from the Paris suburb of Argenteuil, was killed when he rammed his car, laden with guns and gas canisters, into a police van on the Champs-Elysées. Police said Djaziri had meant to turn his vehicle into a car bomb but it failed to explode. No one else was injured in the attack. Djaziri had mailed a letter to his family just before the attack saying he had wanted to travel to Syria but that he had been stopped from doing so "by apostates against the Islamic State." It later emerged that although Djaziri had been on a jihadist watchlist, he had legally been allowed to purchase firearms.

June 20. A Polish truck driver was killed when he crashed into the back of another truck that had been stopped by migrants on a highway near Calais. The migrants had placed barriers consisting of tree trunks and other large objects to slow down three trucks headed for Britain in an attempt to stow away in them. Four migrants — two Afghan adults and two Eritrean minors — were charged with manslaughter, impeding traffic and endangering lives. Polish Interior Minister Mariusz Blaszczak asked French authorities to "take action to guarantee the security of Polish truck drivers in the Calais region."

June 22. President Emmanuel Macron's government introduced new anti-terrorism legislation that would give French authorities greater powers to act to protect an event or location thought to be at risk from attack, without first having to seek permission from the courts. The draft law would also allow mosques thought to be promoting extremism to be shut down for up to six months. Prime Minister Edouard Philippe argued it struck the "right balance" between respecting freedoms and reinforcing security. Rights groups including Amnesty International and Human Rights Watch said the legislation would enshrine into law draconian powers allowed under the state of emergency, which has been in place since the November 2015 jihadist attacks in Paris.

June 22. A special anti-terror tribunal in Paris sentenced 18 members of a jihadist network to between one and 28 years in prison for a grenade attack on a Jewish grocery store in the Paris suburb of Sarcelles in September 2012. The "Cannes-Torcy cell," named after the towns where its members were based, was accused of having planned several other attacks before the network was dismantled in 2012. During the hearing at a special anti-terror tribunal, the cell was described as "the missing link" between the self-proclaimed al-Qaeda militant Mohamed Merah — who murdered three Jewish children and a teacher in an attack at their school in Toulouse in 2012 — and the network that attacked the Bataclan concert hall in November 2015.

June 22. Residents of the Paris suburb of Mée-sur-Seine complained that a mosque was blasting prayers on outdoor loudspeakers well beyond midnight each night during Ramadan. "The loudspeaker was used for the many faithful praying on the sidewalk because the mosque is too small," according to Le Parisien. Mourad Salah, a local Muslim leader, said the city council was to blame for the noise because of its failure to provide Muslims with a larger mosque: "The ball is in the mayor's court. Until we have a place of prayer worthy of the name, with a greater capacity, things will be difficult."

June 23. Five jihadists were sentenced to a combined 25 years in prison for associating with the Islamic State. The men, all in their 20s, had been recruited by Omar Diaby, a French national of Senegalese descent known for funneling fighters to Syria. Ali Abzouzi and Luck Manodritta were sentenced to six and eight years in prison, respectively. The two had spent several months in Syria in 2013 and 2014. Two others, Cedric Belly and David Assila, were given four years in prison including two-year suspended sentences for having attempted to join the others. The court also handed a three-year jail sentence to Magomed Bagaiev for helping a young woman prepare to leave for Syria. Diaby, also known as Omar Omsen, is believed to have recruited around 50 French jihadists to fight to Syria.

June 24. Interior Minister Gerard Collomb rejected calls from charities for the construction of a new migrant camp in the northern port of Calais, where hundreds migrants have once again gathered in hopes of crossing the English Channel to Britain. In October 2016, French authorities bulldozed a migrant camp known as "The Jungle," but aid agencies say about 400-600 migrants are now sleeping rough on streets. Collomb said: "We don't want to create a gathering point where numbers would swell back up to 7,000 over time. That would not be tolerable, for the migrants, the residents of Calais and for economic life."

June 26. An online petition — "Women: An Endangered Species in the Heart of Paris" — accused Paris Mayor Anne Hidalgo of allowing a large swathe of the city to become a no-go zone for women. Every night, hundreds of migrants from Africa and the Middle East line the pavements to form an intimidating gauntlet for women walking from the Gare du Nord and Gare de l'Est railway stations to their homes, the petition said. Shouts of "bitch" and "dirty whore" are common. The petition was launched by a woman called Laurence who said:

"As a woman you start adopting defensive measures. You don't go here or there. Avoid certain routes. Take your kids to school another way. I stopped going to my tobacconist and some cafes because suddenly there were only men inside. I have to ask the teenage drug dealers politely to step aside in the foyer just so I can get to my own front door…. You get used to averting your eyes from streams of urine and pools of spittle…to lowering your head… to walking alone… to feeling fear, great, great fear because you dared to speak out."

Pierre Liscia, a conservative councilor, said that city officials were concerned that the lawlessness might derail the Paris bid for the 2024 Olympics:

"The cynical thing is that last month a vast clean-up operation was launched when the Olympic committee came to visit for an inspection ahead of the Games. They moved out 1,600 people in 24 hours. I find it contemptible that the mayor's office acted only when there was media attention."

Mayor Hidalgo has repeatedly denied that there are no-go zones in Paris, and in January 2015 she threatened to file a lawsuit against Fox News for "harming the honor of Paris" after it reported that such zones exist.

June 27. The trial began of Beatrice Huret, a 45-year-old former supporter of France's anti-immigration National Front party, for helping to smuggle her Iranian migrant lover across the English Channel to Britain. Huret met 37-year-old Mokhtar while volunteering at the now-demolished "Jungle" migrant camp in Calais. In June 2016, she purchased a small boat for 1,000 euros which Mokhtar and two friends used to cross the Channel. The boat capsized en route but the trio arrived safely after being rescued by the British coastguard. Huret was subsequently arrested and charged with being part of a migrant smuggling network. Since then, the couple have kept up their relationship, with Huret regularly visiting Mokhtar in the northern English city of Sheffield, where he obtained a work permit. Huret, who has a 19-year-old son, said: "I am prepared to give up my life for him. The only thing that would bother me is that I would no longer be able to see Mokhtar if I'm in jail."

June 27. The mayor of Lorette, Gerard Tardy, banned burkinis and other Muslim clothing at a new outdoor swim park. The regulation states:

"Monokinis, burkinis, partial veils or veils which totally conceal the face, or a combination thereof, are prohibited on the beach. Any breach of this provision will lead to the immediate expulsion (which may cover the entire swimming season) of the offenders by security or, if necessary, by the police."

Aldo Oumouden, spokesman of a mosque in Saint Étienne, responded:

"France is multicultural and banning the veil at this facility is an attack on the individual freedom of Muslims and does not even distinguish between burkini and headscarf. How is it that the veil is aggressive or dangerous for the population? It does not represent any health problem, and there is no interference with the freedom of others. Does Mayor Tardy not realize that this decision will further stigmatize Muslims? It is not only unnecessary but also devastating for community harmony."

June 28. Human Rights Watch (HRW) said that new counter-terrorism legislation proposed by the French government will fuel prejudice against Muslims. President Emmanuel Macron wants the legislation to replace temporary emergency powers in place since jihadists attacked Paris in 2015. HRW said:

"As the text stands, the law could, for instance, be used arbitrarily to prohibit any meeting at which ideas or theological concepts associated with conservative interpretations of Islam, such as Salafism, are expressed regardless of whether there is any demonstrable connection to criminal activity. Poorly worded laws that are likely to lead to closing solely Muslim places of worship may also help feed anti-Muslim rhetoric and prejudice prevalent in wider society."

June 29. The mayor of Chevigny-Saint-Sauveur, Michel Rotger, banned halal menus in school canteens. "Under the principle of secularism, a single menu is proposed. No substitute meals will be provided except in case of food allergies," he said. "I am applying the recommendation of the Association of Mayors of France (AMF)," he added. The AMF recently published a guide for "secular best practices" which criticized "denominational menus" in canteens. "We are putting in place an operation so that children eat everything and that what is offered is balanced," Rotger said. "There is too much waste, and we will teach them to eat meat, be it poultry or pork." Muslim groups have vowed to fight the ban in court.

June 30. A new mobile app — "No-Go Zone" — appeared in the Google App Store. The app warns people if they are in a Paris no-go zone, and provides live alerts of thefts and sexual assaults in the city. The app description reads: "Whether you are staying in an unknown location, looking for a safe place to live, on your way to a specific location then No-Go Zone allows you to reduce any risk of aggression, theft, harassment or incivility."

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Authored by Curt Mills via NationalInterest.org,

The headline of the New York Times piece was breathless: “Iran Dominates in Iraq After U.S. Handed the Country Over.” The content was only slightly less so:

“But after the United States’ abrupt withdrawal of troops in 2011, American constancy is still in question here – a broad failure of American foreign policy, with responsibility shared across three administrations.”

The statement is curious. “What about U.S. history of involvement there tells you it’s going to end well?” asks Hussein Banai of Indiana University Bloomington. Arango’s reporting, which advocates for “American constancy” in Iraq, “contributes to this mythmaking on all sides that all Iraq might need is a U.S. stablizing force,” says Banai. “And it’s just ridiculous.” (Iran’s foreign minister, the veteran diplomat Javad Zarif, also complained about this piece in comments to the National Interest on Monday).

The evidence suggests the 2011 withdrawal was anything but “abrupt.” Barack Obama, an original opponent of the war and supporter of withdrawal, won the 2008 election on an anti-war wave. Leading figures in U.S. life had been calling for withdrawal since the war took a turn for the worse shortly after the fall of Baghdad in 2003. But most importantly, the exodus of U.S. forces in 2011 had been negotiated in 2008 by President Bush; not abrupt. And “it had been working it ways through the Iraqi parliament for some time” before that, Banai notes.

The importance of the American withdrawal, in terms of that event spurring a major upshoot in Iranian influence, is likely overstated. “Iran’s influence in Iraq is… ascendant,” Arango writes. But hasn’t it been for some time?

Trita Parsi, president of the National Iranian American Council, tells me: “Iranian influence in Iraq started much sooner,” than 2011. “The United States had essentially lost Iraq the minute it invaded Iraq but had no plan for the day after . . . The idea that Iraq somehow fell in Iran’s after 2011 is simply wrong. Just listen to the very same critics who before 2011 were arguing that Iran has too much influence in Iraq.” Banai adds: “The major message of that piece is what? That since U.S. withdrawal, Iran has effectively taken over Iraq’s national sovereignty.” Iran was a player in Iraq from the beginning last decade—“there is just nothing to empirically support” that Iran has largely taken over because of U.S. withdrawal. The pair worry about the implications of such thinking.

Indeed, at one point in the piece, Arango uncritically quotes a former aide to the “the Iraqi politician” Ahmad Chalabi, who died in 2015–without mentioning that Chalabi had significant ties to neoconservatives and provided tranches of fabricated evidence to sell the 2003 war. Then there is Arango’s portrayal of an Iraq dominated by Iran in the political and economic realm. Most concede the stentorian military influence Iran has in the country. But Parsi, Banai and others take issue with the characterization of all ties, particularly economic, as inherently insidious. The idea that “a country like Iran would not have influence in its neighboring country, Iraq, is preposterous,” Parsi says, adding that “part of the problem of the article is it depicts American intentions in the best possible light,” versus “Iranians are selling detergent and food to Iraqis because of their desire to subjugate Iraqis.” The New York Times does point out that Iraq’s Shia rank-and-file “also hold close their other identities as Iraqis and Arabs,” putting limits on the Islamic Republic’s ability to strictly appeal to heaven.

One takeaway from Arango’s piece could be a hard lesson: the United States should never go looking for trouble in the Middle East ever again.

But one could read it the other way: Iran is ascendant because the United States got out too early (or at all), and is now well on its way to establishing a “Shia crescent” from Afghanistan to Morocco, in direct challenge to our allies; Tehran must be confronted and toppled. The consequences of following such dialectical thinking have, of course, been laid bare by recent history.

But the New York Times, for one, does not appear to have wholly absorbed them.

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Something needs to be said. We are against the existence of irredeemable paper currency, central banking and central planning, cronyism, socialized losses and privatized gains, counterfeit credit, wealth transfers and bailouts, and welfare both corporate and personal.

When we write to debunk the conspiracy theories that say manipulation is keeping gold from hitting $5,000 (one speaker here at FreedomFest claimed gold will go to $65,000), we are not trying to defend the Fed. When we discuss the flaws in predicting that kind of price, and the error in expecting to profit from it, we are not expressing a pro irredeemable dollar view.

We are saying there are good arguments against the regime of irredeemable paper currency—but this is not one of them. Irredeemable currency has two fatal flaws. One is the interest rate is unhinged. It can skyrocket as it did from the end of WWII through 1980, or collapse as it has been doing since then. Two is there is no extinguisher of debt. Debt grows—must necessarily grow—exponentially. As it has been doing for many decades.

The antidote to this poisonous system is the gold standard. However, it must be said that no gold price will cause the metal to circulate in the economy. It did not circulate when it was “cheap” 20 years ago. It did not circulate when it was “expensive” 6 years ago. It does not circulate now. It will not circulate even if it hits any of the gold bug price targets (if anything, a rapid price rise will be a powerful force keeping it out of circulation, as most people would have large taxable capital gains).

The one thing that can make gold circulate is interest.

For two weeks, we have been talking about a potential capitulation. The gold price has risen about $40 since then, and that of silver 85 cents.

Will the bounce continue? Have the fundamentals firmed up?

We will show graphs of the true measure of the fundamentals. But first charts of their prices and the gold-silver ratio.

Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. The ratio moved down this week.

In this graph, we show both bid and offer prices for the gold-silver ratio. If you were to sell gold on the bid and buy silver at the ask, that is the lower bid price. Conversely, if you sold silver on the bid and bought gold at the offer, that is the higher offer price.

For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and cobasis in red.

Here is the gold graph.

We have switched to the October contract, as the August is nearing expiry and under selling pressure.

The dollar fell this week (the mirror image of the rising price of gold). As the dollar fell, the cobasis fell—gold became less scarce.

Our calculated gold fundamental price fell a few bucks (chart here).

Now let’s look at silver.

As the dollar has dropped, the cobasis has come down (though still backwardated). Our calculated silver fundamental fell 25 cents to $17.59.

© 2017 Monetary Metals

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More Americans want to see U.S. President Donald Trump impeached than Richard Nixon amid the Watergate scandal, a new poll has revealed.

You will find more statistics at Statista

According to Monmouth University, 24 percent of the U.S. public wanted Richard Nixon to leave the White House six months into his second term back in 1973.

Currently, as Statista's Niall McCarthy notes, the appetite for removing Donald Trump is significantly higher with 41 percent of the U.S. public in favor of impeachment compared to 53 percent who are against it.

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Authored by Pepe Escobar via The Asia Times,

The secret is out: the ascension of Mohammad bin Salman, displacing CIA favorite Mohammad bin Nayef as Crown Prince, was in fact a white coup…

What has been an open secret across the Arab world is not a secret anymore even in the US: What happened last month in the deep recesses of the House of Saud with the ascension of Crown Prince Mohammad bin Salman, aka MBS, was in fact a white coup.

Nearly a month ago, as I’ve written elsewhere, a top Middle East source close to the House of Saud told me:

“The CIA is very displeased with the firing of [former Crown Prince] Mohammad bin Nayef. Mohammad bin Salman is regarded as sponsoring terrorism. In April 2014 the entire royal families of the UAE and Saudi Arabia were to be ousted by the US over terrorism. A compromise was worked out that Nayef would take over running the kingdom to stop it.”

But instead of a coup in Doha, what happened was actually a coup in Riyadh. According to the source,

“the CIA blocked the coup in Qatar and the Saudis reacted by dumping the CIA-selected Mohammed bin Nayef, who was to be the next king. The Saudis are scared. The monarchy is in trouble, as the CIA can move the army in Saudi Arabia against the king. This was a defensive move by MBS.”

Now, almost a month later, confirmation of the white coup/regime change in Riyadh has been splashed on the front page of The New York Times, attributed mainly to the proverbial “current and former United States officials”.

That, in essence, is code for the US deep state, and confirms how the Central Intelligence Agency is extremely annoyed by the ouster of Nayef, a trusted partner and former counterterrorism czar. The CIA on the other hand simply does not trust arrogant, inexperienced and hubristic MBS.

Warrior Prince MBS has been responsible for conducting the war on Yemen – which not only killed thousands of civilians but also spawned a tragic famine/humanitarian crisis. If that was not enough, MBS was the architect of the blockade of Qatar, followed by the UAE, Bahrain and Egypt, and now totally discredited as Doha has refused to concede to outlandish “demands” in essence concocted in Riyadh and Abu Dhabi.

Nayef, crucially, was opposed to the blockade of Qatar.

It’s no wonder the House of Saud and the UAE are already backtracking on Qatar, not so much because of pressure recently applied by US Secretary of State Rex Tillerson on the ground, but mostly because of shadow play: the US deep state making sure its interests in the Gulf – starting with the Al-Udeid base in Qatar – should not be messed with.

A reckless ‘gambler’

MBS, although treated with (velvet) kid gloves across the Beltway because of the same old “Saudi Arabia is our ally” meme, is for all practical purposes the most dangerous man in the Middle East.

That’s exactly what the famous December 2015 memo by the BND – German intelligence – was already stating:

The young “gambler” was poised to cause a lot of trouble. Financial circles in the European Union are absolutely terrified that his geopolitical gambles may end up sending millions of retirement accounts into the dust.

The BND memo crucially detailed how the House of Saud, in Syria, had bankrolled the creation of the Army of Conquest – basically a revamp of Jabhat al-Nusra, aka al-Qaeda in Syria – as well as ideological sister outfit Ahrar al-Sham.

That amounted to the House of Saud aiding, abetting and weaponizing Salafi-jihadi terrorism. And this from a regime that, after seducing US President Donald Trump to star in an embarrassing sword dance, felt it was free to accuse Qatar of being a terrorist nation.

MBS’s blockade of Qatar has nothing to do with silencing al-Jazeera; it relates to the Saudi defeat in Syria, and the fact that Doha abandoned the “Assad must go” dead-ender to the benefit of allying itself with Tehran to sell liquefied natural gas to Europe out of their jointly owned North Dome/South Pars giant gas field.

MBS – as well as his ailing dad – skipped the Group of 20 Summit in Hamburg; the Qatar embarrassment was too much of a burden, considering for instance Doha’s position as a powerful investor in both France and the UK. Still, all eyes are on him; MBS has promised to turbocharge the vicious Sunni/Shiite confrontation, taking the war “inside Iran”.

And further on down the road, there’s the question of how MBS is going to handle the fraught-with-risk Aramco initial public offering.

It ain’t over till the (abaya-clad) fat lady sings.

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Authored by Toni Airaksinen via CampusReform.org,

• Grinnell College awards a $100,000 prize each year to an “Innovator for Social Justice,” and recently began accepting nominations for the 2018 recipient.
• The "Innovator for Social Justice Prize" is the largest award given by a U.S. college for efforts to promote social justice, and has disbursed at least $1.5 million since 2011.

Grinnell College awards a $100,000 prize each year to an “Innovator for Social Justice,” according to a nomination form that went live on Sunday.

The “Grinnell College Innovator for Social Justice Prize” is the largest award given by a U.S college to promote social justice. Half of the money is awarded directly to the winner, while the other half goes to the organization that the winner represents.

“With the creation of the Grinnell Prize, the College is extending its educational mission beyond the campus and alumni community to individuals anywhere who believe innovative social justice programs create a better world,” the school boasts on its website, noting that students and staff members are offered the chance to work with prize-winners and their organizations through “student internships and staff fellowships.”

Funded with “discretionary funds from the College’s endowment,” the school has awarded at least $1.5 million dollars since the prize was launched in 2011. Three prizes were awarded in each of the first two years, after which the number was reduced to two until 2017, when only one recipient was selected.

The nomination form encourages people to nominate individuals, including current students and alumni, who are “a force for social justice,” noting that nominees “should have identified a concrete social justice need, designed creative and socially just solutions to address that need, and made a substantive impact through their hard work and dedication.”

The school asserts that there is not “one specific definition of social justice,” saying the concept should be “interpreted broadly” and that it’s up to the person who makes the nomination “to make the case as to how his or her nominee effects positive social change.”

Grinnell College President Raynard S. Kington defended the creation of the expensive award in a statement to the college community in 2011, acknowledging that “some people have asked me why the College is undertaking an expensive new initiative now, in such challenging financial times,” but vowing that the expenditure would not adversely impact the school’s budget or financial aid commitments.

“We decided we’d rather offer a prize that advances useful work and contributes more to the mission of the College than do other equally expensive things to build our prestige,” Kington explained, calling the prize “a creative way to achieve many of the College’s goals even in a time of tight money.”

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