Tag: finance

With the US increasingly willing to use the dollar, and SWIFT, as a strategic weapon against the country’s sovereign enemies (as Iran learned every 5 or so years), Russia and India are preparing to bypass US sanctions on Moscow by using the rupee and the ruble in bilateral trade involving military deals, the Economic Times reported.

Some $2 billion in weapons deals between India and Russia have been hit as a result of the recent US sanctions, as payments get stuck. The countries are seeking to bypass such monetary bottlenecks this by switching to settlements in domestic currencies and ditching the greenback.

Senior officials told ET that after several rounds of consultations, it has become clear that a rupee-rouble transfer, pegged to the exchange rate of an international currency, is the solution. A top official said that a foreign currency, such as the Singapore dollar, could be used as the benchmark and cont .

Until now, India signed defense contracts with Russia for which payments are made in US dollars. However, as US sanctions making this virtually impossible, contractual payments have been frozen since April.

The involuntary loss of India as a Russian customer has had significant effects on the Russian economy: the Asian country is one of the largest buyers of military equipment from Russia, having signed military contracts worth $65BN since the 1960s.

* * *

With current trade deals between the two countries estimated at around $12 billion, it is imperative for Russia to way to find a loophole to US sanctions. Furthermore, just like Turkey, India is ready to purchase Russia’s state of the art S400 air-defense system in a $5-billion deal. And just like in the case of Turkey – which overnight saw the US Senate block the sale of over over 100 F-35 juts to Erdogan precisely because of Ankara’s overtures to Moscow – the sale is being heavily opposed by the United States.

The two nations have been struggling to find banks that would risk US sanctions for transferring the money between the two nations. Sources said that on the Indian side, the banks being talked to include Vijaya Bank and Indian Bank, while on the Russian side, its largest banking entity in India, Sberbank, has been involved in discussions.

Other options that were looked at included payments to non-sanctioned entities in Russia after its flagship arms trading company Rosoboronexport came under sanctions by the US Office of Foreign Assets Control (OFAC).

“This option was decided against as it would have opened up a lot of legal and audit issues, especially as defence deals are looked at very closely. No one wanted to take a chance,” a top official involved in talks to resolve the issue told ET.

As part of the recent US sanctions, the US Treasury has banned business ties with entities designated as Specially Designated Nationals (SDN). After fresh notifications in April named Rosoboronexport, Indian banks were pressured into freezing all lines of credit (LoCs) to Russian arms companies, resulting in all deals coming to a halt ET reports.

Meanwhile, payments worth over $100 million were blocked in less than a month, while total payments of over $2 billion currently face uncertainty.

It was not clear if the two nations had considered “neutral” alternatives such as bitcoin, although in retrospect probably not in light of India’s belligerent attitude toward the cryptocurrency, one which emerged was more prejudice than informed opinion following a report last week that India’s central bank admitted it did no research before strangling cryptocurrency payments. In light of the US crackdown on dollar use against anyone who opposes the US military-industrial complex, perhaps the RBI should have at least considered it.

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Two years after Russia was kicked out of the UN Human Rights Council, while that paragon of humanitarian virtue Saudi Arabia was reelected, the WaPo reports that the Trump administration is set to withdrawal from the United Nations Human Rights Council as soon as today, making good on a pledge to leave a body that Trump has repeatedly accused of hypocrisy and criticized as biased against Israel.

As Bloomberg adds, SecState Mike Pompeo and UN Ambassador Nikki Haley plan to announce the withdrawal at the State Department in Washington at 5 p.m.. They asked not to be identified discussing a decision that hadn’t yet been made public.

The U.S. withdrawal will not come as a surprise: as BBG adds, National Security Adviser John Bolton opposed the body’s creation when he was U.S. ambassador to the UN in 2006. In a speech to the council last year, Haley called out the body for what she said was its “relentless, pathological campaign” against Israel. She has also called for ways to expel members of the council that have poor human rights records themselves.

“For our part, the United States will not sit quietly while this body, supposedly dedicated to human rights, continues to damage the cause of human rights,” Haley said at the time. “In the end, no speech and no structural reforms will save the members of the Human Rights Council from themselves.”

A State Department spokeswoman didn’t immediately respond to a request for comment, while the UN said it hadn’t received a notification that the U.S. was withdrawing

On the opening day of the council’s current session, British Foreign Secretary Boris Johnson criticized the body’s perennial agenda item dedicated to Israel and the Palestinian territories, calling it “damaging to the cause of peace.” Nonetheless, he said the U.K. wasn’t “blind to the value of this council.”

The council is scheduled to discuss Israel and the Palestinian territories on July 2, according to its agenda.

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Authored by Patrick Buchanan via Buchanan.org,

“It is cruel. It is immoral. And it breaks my heart,” says former first lady Laura Bush of the Trump administration policy of “zero tolerance,” under which the children of illegal migrants are being detained apart from their parents.

“Disgraceful,” adds Dr. Franklin Graham.

“We need to be … a country that governs with a heart,” says first lady Melania Trump.

“No one likes this policy,” says White House aide Kellyanne Conway, even “the president wants this to end.”

And so it shall – given the universal denunciations and photos of sobbing children being pulled from parents. Yet striking down the policy will leave America’s immigration crisis still unresolved.

Consider. Since 2016, some 110,000 children have entered the U.S. illegally and been released, along with 200,000 Central American families caught sneaking across the border.

Reflecting its frustration, the White House press office declared:

“We can’t deport them, we can’t separate them, we can’t detain them, we can’t prosecute them. What (the Democrats) want is a radical open-border policy that lets everyone out into the interior of this country with virtually no documentation whatsoever.”

Where many Americans see illegal intruders, Democrats see future voters.

And with 11,000 kids of illegal immigrants in custody and 250 more arriving every day, we could have 30,000 in custody by summer’s end.

The existential question, however, thus remains: How does the West, America included, stop the flood tide of migrants before it alters forever the political and demographic character of our nations and our civilization?

The U.S. Hispanic population, already estimated at nearly 60 million, is predicted to exceed 100 million by 2050, just 32 years away.

And Europe’s southern border is more imperiled than ours.

A week ago, the new populist regime in Rome refused to allow a boat full of migrants from Libya to land in Sicily. Malta also turned them away. After a voyage of almost a week and 1,000 miles, 630 migrants were landed in Valencia, Spain.

Why did Italy reject them? Under EU law, migrants apply for asylum in the country where they first enter Europe. This burdens Italy and Greece where the asylum-seekers have been arriving for years.

Of the landing in Spain, Italy’s interior minister Matteo Salvini, a leader of the populist League party, chortled:

“I thank the Spanish government. I hope they take in the other 66,629 refugees (inside Italy). We will not be offended if the French follow the Spanish, the Portuguese and Maltese, we will be the happiest people on earth.”

If the migrants boats of the Med are redirected to Spanish ports, one suspects that the Spanish people will soon become as unwelcoming as many other peoples in Europe.

And Trump is not backing down. Monday he tweeted:

“The people of Germany are turning against their leadership as migration is rocking the already tenuous Berlin coalition. Crime in Germany is way up. Big mistake made all over Europe in allowing millions of people in who have so strongly and violently changed their culture!”

Whatever European leaders may think of him, many Europeans are moving in Trump’s direction, toward more restrictions on immigration.

In Germany, a political crisis is percolating. The Bavarian-based CSU, longtime coalition partner of Chancellor Angela Merkel’s CDU, is now talking divorce if Merkel does not toughen German policy.

Merkel has never fully recovered from the nationalist backlash against the million migrants she allowed in from Syria’s civil war. A New Year’s Eve rampage in Cologne, featuring wilding attacks on German girls by Arabs and Muslims, cost her dearly.

Among the reasons Bavarians are pulling away from Berlin is that, being in the south of Germany, Bavaria is a primary point of entry.

Virtually every one of the populist parties of Europe, especially of the right, have arisen to contest or to seize power by riding the issue of mass migration from Africa and the Middle East.

Yet the progressives adamantly refuse to act, apparently paralyzed by a belief that restricting the free movement of peoples from foreign lands violates one of the great commandments of liberal democracy.

We are truly dealing here with an ideology of Western suicide.

If Europe does not act, its future is predictable.

The population of Africa, right across the Med, is anticipated to climb to 2.5 billion by midcentury. And by 2100, Africa will be home half of all the people of the planet.

If but a tiny fraction of the African and Middle Eastern population decides to cross the Mediterranean to occupy the emptying towns and villages of an aging and dying continent, who and what will stop them?

Trump may be on the wrong side politically and emotionally of this issue of separating migrant kids from their parents.

But on the mega-issue — the Third World invasion of the West — he is riding the great wave of the future, if the West is to have a future.

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The SEC crackdown on ICOs has, apparently, finally extended to one of the industry’s most enthusiastic and prolific promoters: former software security pioneer John McAfee, who has earned a reputation for outrageous behavior (including promising in July 2017 to eat his dick on national television if bitcoin doesn’t hit $500,000 in three years) in recent years.

McAfee, who hasn’t been affiliated with his namesake company since 1994 and lost most of a fortune once worth $100 million in the years since the crisis, was at one point pitching a new ICO every day. And since before last year’s boom, McAfee has been a regular on the cryptocurrency conference circuit and is part of what Bloomberg calls “a vast network of social media influences” who have helped ICOs raise billions.

In his characteristic voice, McAfee said the SEC had warned him about recommending ICOs, forcing him to step aside, despite declaring the treatment “unjust.”

“Due to SEC threats, I am no longer working with ICOs nor am I recommending them, and those doing ICOs can all look forward to arrest,” McAfee wrote from his verified Twitter account, which has more than 820,000 followers. “It is unjust but it is reality. I am writing an article on an equivalent alternative to ICOs which the SEC cannot touch. Please have Patience.”

Due to SEC threats, I am no longer working with ICOs nor am I recommending them, and those doing ICOs can all look forward to arrest. It is unjust but it is reality. I am writing an article on an equivalent alternative to ICOs which the SEC cannot touch. Please have Patience.

— John McAfee (@officialmcafee) June 19, 2018

The SEC has declared that ICO tokens are securities which must be registered with the SEC and follow all applicable securities laws.

However, the agency recently clarified that trades in ethereum tokens are not subject to securities laws – clearing the way for ether futures. In one example of behavior to which the SEC might object, back in March, MacAfee tweeted a link to a website that showed he charged $105,500 per tweet to promote ICOs and other products.

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Via Middle East Monitor,

The European Union is funding a project to prosecute Israel Defence Forces (IDF) officers for committing violations against Palestinian civilians, according to Israel Hayom, which quotes a local human rights organisation.

The pro-Israel group NGO Monitor analyses the funding and performance of non-governmental organisations which keep an eye on violations committed by the IDF.

“Following the request of Israeli human rights organisations,” it reported, “the European Union has begun funding a project for the prosecution of Israeli military staff involved in the violation of human rights in the occupied Palestinian territories.”

Human rights groups have confirmed their belief that Israel “does not conduct serious investigations into the violations its soldiers are committing against the Palestinians.”

What’s more, they added, the military judiciary “almost always” acquits IDF personnel suspected of violations, especially those committed during raids on Palestinian homes.

According to Israel Hayom, the EU allocated a budget of €250,000 until November 2019 for the project – “The Culture of Impunity among the Members of the Israeli Security Forces” – and the budget is open for the coming years. The project is expected to last until 2021. Israeli rights group Yesh Din (“There is Law”) is behind the EU project, in partnership with other organisations, including Doctors for Human Rights and the Breaking the Silence movement.

The project aims to establish an “evidence bank” by collecting testimonies on IDF activities and attacks through providing Palestinian women with video cameras to record violations during house raids. Israeli human rights organisations say that they are seeking to put political pressure on the government by putting the IDF’s apparent impunity at the top of the international agenda so that it is one of the issues discussed by foreign governments and their Israeli counterpart.

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In the wake of what US (and international) media celebrated as a diplomatic victory for North Korean leader Kim Jong Un during last week’s US-North Korea summit in Singapore, Kim on Tuesday traveled to Beijing for a two-day visit, where he filled Chinese President Xi Jinping in on the details of his discussion with President Trump, according to NBC News. Kim’s visit comes a week after Secretary of State Mike Pompeo met with senior Chinese officials. According to initial reports, Chinese President Xi Jinping praised Kim for making headway with the US. According to Bloomberg, Chinese state television reported that Xi promised Kim that China would keep supporting North Korea, and Kim promised Xi that the North “would upgrade bilateral ties with China to a new level.”

Xi added that he hopes the North and the US will work toward peace on the Korean peninsula, and applauded the US’s decision to halt joint military exercises with South Korea. Such effusive praise from China’s leader is only the latest sign that Kim’s benefactor has perhaps been the driving force behind Kim’s bid for peace.

Here’s NBC News:

Chinese President Xi Jinping “is exerting a lot of influence from behind the scenes,” said Bonnie Glaser, senior adviser for Asia at the Center for Strategic and International Studies in Washington. Glaser said it was predictable Xi would want to be briefed by Kim directly about the North Korean leader’s talks with Trump.

“I expect they will talk about the path going forward and where priorities should lie,” Glaser said. Those priorities, from China’s perspective, would be to ensure that Beijing is included in any in peace treaty talks and for creating an environment on the Korean Peninsula that will make it unnecessary for U.S. troops to remain.

This is Kim’s third trip to China this year. He made his first foreign trip as head of state in March, when he traveled by train to meet with Xi in Beijing. China is North Korea’s largest economic ally and is responsible for 90% of trade with the isolated state. The suspension of US military exercises has been a policy goal pursued by Beijing and Pyongyang for years – and Xi is undoubtedly pleased at Kim having won such an important concession. But there was something else unusual about this summit that hinted at China’s dominance. As Reuters pointed out, China made the unusual decision of announcing Kim’s visit ahead of time, and stipulating that he would stay for two days. During previous visits, China would only confirm that Kim had visited with Xi after he had already left.

Still, Chinese leaders did take precautions to shield Kim’s visit from public view by erecting a large screen outside the East Gate of the Great Hall of the People, where Chinese leaders typically meet with foreign leaders. As the diplomatic efforts between the North and US move forward, we doubt this will be Kim’s last visit to Beijing. And if President Trump has his druthers, Kim might also soon be visiting another powerful capital.

But as we noted earlier, China could still scuttle the talks if it decides to retaliate diplomatically to the trade war with the US. Xi could order Kim to withdraw from negotiations, effectively undoing the progress that has been made.

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Just days after we first showed that the world’s “Most Systemically Important Banks“, or G-SIFIs, are tumbling even as US stocks trade just shy of all time highs, prompting Ian Hartnett to issue his first “black swan” alert since 2009…

… Nedbank analysts Neels Heyneke and Mehul Dahya picked up on this topic, and in the latest note write that with the market-weighted cap index of the FSB’s G-SIFI’s starkly decoupling from the S&P 500 and the Nasdaq since the beginning of 2018, and nearly entering a bear market, or down 18%, they warn that “this decoupling will be sustainable. Either the rest of the equities must come under pressure or the financial sector must rally.“

Reverting back to their favorite theme of dollar liquidity, or the lack thereof, as the catalyst for virtually all of the world’s risk asset woes, Heyneke and Dahya show that whereas the S&P500 has so far ignored the slide in the dollar liquidity, the megabanks have not been so lucky, and that the higher the dollar spike, the greater the threat to the G-SIFIs, until eventually the drop is so substantial, the rest of the market will have no choice but to follow lower.

And while we noted much of this last week, a more interesting observation by the Nedbank analysts is that the corporate sector curve (Baa-rated Corporates less the Prime rate) has now inverted. The implication of this is just as profound as a sovereign yield curve inversion as it means that “the cost of capital for corporates is now higher than the return on capital.“

Incidentally, as the chart below shows, every trough in this curve has always corresponded to some market crisis, whether the Asian Crisis, the Tech bubble, the Great Financial Crisis, or the $-liquidity squeeze we are experiencing now.

Their conclusion: “Corporates are highly geared and we are concerned the next phase of a contraction in global $-Liquidity and rising real rate (term premium) will infiltrate the stock markets.“

Well, the dollar just hit a fresh 2018 high, and stocks are tumbling, so once again the shape of the yield curve may very well be all we needed to know what happens next.

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Authored by Mac Slavo via SHTFplan.com,

The World Health Organization has just announced that an addiction to video games, dubbed a “gaming addiction” is now a mental health disorder. The WHO also said that “gaming disorder” is a unique mental health condition.

The World Health Organization announced “gaming disorder” as a new mental health condition included in the 11th edition of its International Classification of Diseases, released Monday.  The WHO defines a “gaming disorder” as having three major characteristics that experts say are similar to substance-use disorders (drug addiction) and gambling disorder.

“One is that the gaming behavior takes precedence over other activities to the extent that other activities are taken to the periphery,” Dr. Vladimir Poznyak, of the WHO’s Department of Mental Health and Substance Abuse, told CNN. 

The other two characteristics that must be present are impaired control over gaming and a continuation or an increase in gaming despite negative consequences like “disturbed sleep patterns, like diet problems, like a deficiency in the physical activity,” Poznyak said.

But, these patterns of behavior must be present for at least 12 months before a gaming addiction can be officially diagnosed as a disorder, according to The New York Post. “It cannot be just an episode of few hours or few days,” Poznyak warned.

“I’m not creating a precedent,” Dr. Poznyak added. Poznyak proposed the new diagnosis to the WHO’s decision-making body, the World Health Assembly. Instead, he said, WHO has followed “the trends, the developments, which have taken place in populations and in the professional field.”

The news was cheered by Hilarie Cash, the co-founder of reSTART, one of the first inpatient treatment programs in the United States for video game addiction.

“I’ve been surprised it’s taken so long for everybody to catch up to the fact. But I also understand that they need to have strong, research-based evidence before they bring on a new disorder,” she said.

“I think it’s a game-changer, although how quickly the game will change, I don’t know.”

However, it is important to note that not all psychologists agree that gaming disorder is worthy of inclusion in the International Classification of Diseases, known as the ICD. 

“People need to understand this doesn’t mean every child who spends hours in their room playing games is an addict, otherwise medics are going to be flooded with requests for help,” said Dr. Joan Harvey, a spokeswoman for the British Psychological Society.

Gaming disorder has not yet been recognized as a mental-health problem by the American Psychiatric Association, which previously said it’s “a condition warranting more clinical research and experience before it might be considered for inclusion” in its own manual.

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Meanwhile, Nasdaq is still up 10% year-to-date…

Dow down 400 points today erases what’s left of its 2018 gains..

But all major indices are still green in June…

And 10Y Treasury yields dropped as low as 2.85% this morning…

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