finance – Page 15398

“It Blows My Mind”: 100-Year Austrian Bond With Record Duration 3x Oversubscribed

As we reported yesterday, Austria was set to make Eurozone history with the first sale of a 100 year bond direct to public markets, bypassing private syndication. It did that later in the day, when the €3.5 billion offering priced tighter than initially marketed, at RAGB 2/2047 +50, at a price 99.502 to yield a paltry 2.112% and with a negligible 2.1% cash coupon.

What is even more notable is that despite mounting fears of an imminent tapering by the ECB which many have predicted will lead to a new European bond tantrum and blow out in yields, there was tremendous end demand by investors for the offering managed by BofAML, Erste Group, GS (B&D), NatWest and SocGen, mostly fund managers from across the globe, resulting in what ended up being more than €11BN in 208 different bids for the paper, an oversubscription of more than 3x! The breakdown for the final allocation is was follows, courtesy of Bloomberg:

€3.5b 100Y tranche: Book exceeded €10.8b from 208 investors, including €1.5b of JLM interest

Allocation by geography:

Eurozone incl. Austria 29%
Germany 13%
France 4%
Spain 3%
Other Eurozone 9%
Other Europe (non-Eurozone) 55%
U.K. 42%
Switzerland 9%
Americas 12%
Middle East 4%

By investor type

Fund Managers 65%
Banks 19%
Central banks, official institutions 9%
Insurers, pension funds 7%

This unprecedented demand in light of tapering fears prompted a response from Mint’s Bill Blain who today wrote that “the story of the day was Austria launching its century bond. Euro 11bln plus of investors looking for a 2% return for a 100 year investment. I have a suspicion “2% for 100 years” may be the moment that defines the very last drink-addled, drug fuelled party days of the bond bull market – but, I’ve been saying that for years already!”

The most notable feature of the issue was its record duration, as Bloomberg’s Marcus Ashworth explained:

“This new 100 year will be the most price-sensitive bond that exists. In any currency. A one basis-point change in yield will move the price of this Austria 2117 issue by 43 cents, or 0.43 percent. That is because the coupon is so low for the ultra-long maturity, which makes the bond’s duration — or sensitivity to yield change — so high.

If you wanted to make a bullish bet on European interest rates dropping again, then buying the new Austrian issue will give you the most bang for your euro. Portfolio managers look for such extra sensitivity to enhance the flexibility of their holdings.”

To which, Blain added that “of course, if European interest rates go the other way – perhaps because of normalisation panic – then you probably lose even more quickly as a retreat degenerates into a rout! (Mario Draghi – take note.)”

Check back in 6 months to see how much money all those who bought the bond that may have marked the peak of the bond bubble have lost (or perhaps made).

Finally, here is Nuveen’s stock market permabull Bob Doll saying that the Austrian issue “blows my mind. To do a 100-year deal at 2 percent is absolutely amazing.”

via http://ift.tt/2w8mIic Tyler Durden

Apple’s ‘Biggest Cheerleader’ Warns “New iPhones Not Enough”

Authored by Vitaliy Katenselson via RealInvestmentAdvice.com,

It is hard to find a bigger Apple stock cheerleader than me. I’ve been writing Apple stock love poems for years. For a long time, it was easy to love the shares because they were unloved by others and it was cheap.

Until recently, when Apple stock was still trading in the low $100s and at single-digit multiples, we were buying current product categories at a discount and were not paying for future product categories.

At today’s price that is not the case anymore.

That is true with any company – the more expensive the stock gets, the more clairvoyance investors need to discern the company’s future growth.

At Apple’s size it is very hard for the company to increase its earnings significantly. Macs, iPads, and even iPhones are mature products.

The iPhone may have a few growth spurts left, but not many. It is facing an unavoidable headwind: the elongation of its replacement cycle. The iPhone improved substantially over the years, but as the i-marvels piled up, the incremental improvements that motivated people to buy a new phone every two years or so became less and less significant.

At some point the iPhone will face the fate of the iPad – its replacement cycle long in the tooth and sales stagnant and declining.

Will the iPhone’s sales stop growing in 2018, or 2020? I don’t know, but from a long-term perspective of the company’s valuation, a few years don’t make that much difference.

Services is the only segment that can grow at a double-digit rate for a considerable period of time, but it only represents 13 percent of revenue. Even the Apple Watch doesn’t really move the needle.

They need another genius

But can Apple come up with new product categories? Let’s ponder on this question in the context of the following quote:

“Talent hits a target no one else can hit; Genius hits a target no one else can see.” – Arthur Schopenhauer

Apple has a lot of talented people designing and redesigning products in the categories that Apple already dominates. They are hitting a lot of targets no else can hit. Apple’s brand is as healthy as ever, and so is product satisfaction.

However, to create a new category of products Apple needs to “hit targets no one else can see,” and this requires a genius. But in an organization of this size with a lot of bright and talented people, it also requires a benevolent dictator – someone able to make bold, unconventional decisions (and own them), someone who in addition to everything else is able to inspire others to create what they may think is impossible. Yes, I am referring to the one and only Steve Jobs, he of the “reality distortion field.”

Here is an instance that comes to mind: Jobs asked his engineers to come up with a touchscreen computer – a tablet. They did. It looked like a bulky version of today’s iPad. Steve looked at and said “Let’s put the tablet on ice,” then refocused the company on miniaturizing that tablet and making a phone instead.

It is important to remember that at the time, though Apple was financially healthy, it was not swimming in cash the way it does today. Jobs made a benevolent dictator-like decision: He diverted engineers who were working on the MacOS to work on what would become the iPhone OS, causing the late release of some Mac products. And only years later, after the iPhone was a raging success, Apple brought the iPad back to life. That was Jobs’ Apple.

Now let’s visit Tim Cook’s Apple. The New York Times ran an in-depth article unearthing why Apple has (so far) failed to come up with an electric self-driving car. These few sentences jumped out at me:

“But the car project ran into trouble, said the five people familiar with it, dogged by its size and by the lack of a clearly defined vision of what Apple wanted in a vehicle. Team members complained of shifting priorities and arbitrary or unrealistic deadlines.”

Nokia spent a lot on R&D too

Even Jobs admitted that Cook is not a “product man.” Cook doesn’t have “the vision,” and thus he doesn’t have the authority to be a benevolent dictator. Nor does he have the charisma to project and maintain a reality distortion field.

Today Apple spends almost $12 billion on R&D – double what it spent just a few years ago. But as outside observers, we really don’t know where this money is going. Or more importantly, how productively it is being spent. I vividly remember how Nokia was increasing its R&D spend every year during the last years of its dumb-phone dominance, but all that R&D did not bring forth new products that would have saved the company from its eventual demise. Apple is not facing Nokia-like collapse, but the R&D argument still stands: R&D spend doesn’t always equal great new products.

The NY Times article said that Apple curtailed its ambition to make a car and is now focusing solely on self-driving technology. In other words, Apple is basically pulling out of the electric car space (at least for now).

If Apple develops and licenses its self-driving technology, it will recover some of its losses on investments made to date. But it will not be able to take advantage of the significant competitive advantage that comes with its incredible brand, its distribution network – hundreds of stores (potential car dealerships) sprinkled all over the world – its know-how in battery management, its design prowess, and its i-ecosystem.

We still own a little bit of Apple stock but have sold most of what we owned at current prices. Maybe Apple’s augmented reality products will become a huge success, or maybe the company is working on a brand new category of products that we have not even imagined. It is all possible.

In making investment decisions you never have perfect information. Apple is no exception. At today’s valuation we are paying for genius – Apple’s ability to successfully create and dominate a new, large product category. While the company is run by very talented people who will do a great job getting us excited about the categories of products they are already in, the company’s genius died with Steve Jobs.

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

August Producer Price Rise Disappoints, Despite Gasoline, Consumer Loan Cost Surge

Despite significant acceleration year-over-year – thanks to a 9.5% surge in gasoline costs – producer price appreciation in August disappointed expectations. PPI Final Demand YoY accelerated from 1.9% to 2.4% (but fell below the 2.5% expectation), rising only 0.2% MoM.

The corest of the core PPI remained below The Fed's mandated inflation target for the second straight month…

But headline PPI jumped to 2.4% YoY… perhaps putting more pressure on The Fed…

Prices for final demand goods advanced 0.5 percent in August, the largest rise since moving up 0.5 percent in April. Most of the August increase can be traced to the index for final demand energy, which climbed 3.3 percent. Prices for final demand goods less foods and energy moved up 0.2 percent.

In contrast, the index for final demand foods fell 1.3 percent.

Three-quarters of the August increase in the final demand goods index can be traced to prices for gasoline, which jumped 9.5 percent .

Over half of the August increase in the index for final demand services can be attributed to prices for consumer loans (partial), which advanced 1.7 percent

This is the highest level of consumer loan price index since Nov 2015…

In other words, as inflation rises, the cost of taking out a loan to maintain your standard of living is also increasing…

via http://ift.tt/2h1Xnjo Tyler Durden

Bombshell Report Catches Pentagon Falsifying Paperwork For Weapons Transfers To Syrian Rebels

A new bombshell joint report issued by two international weapons monitoring groups Tuesday confirms that the Pentagon continues to ship record breaking amounts of weaponry into Syria and that the Department of Defense is scrubbing its own paper trail. On Tuesday the Organized Crime and Corruption Reporting Project (OCCRP) and the Balkan Investigative Reporting Network (BIRN) produced conclusive evidence that not only is the Pentagon currently involved in shipping up to $2.2 billion worth of weapons from a shady network of private dealers to allied partners in Syria – mostly old Soviet weaponry – but is actually manipulating paperwork such as end-user certificates, presumably in order to hide US involvement.

The OCCRP and BIRN published internal US defense procurement files after an extensive investigation which found that the Pentagon is running a massive weapons trafficking pipeline which originates in the Balkans and Caucuses, and ends in Syria and Iraq. The program is ostensibly part of the US train, equip, and assist campaign for the Syrian Democratic Forces (SDF, a coalition of YPG/J and Arab FSA groups operating primarily in Syria's east). The arms transfers are massive and the program looks to continue for years. According to Foreign Policy's (FP) coverage of the report:

The Department of Defense has budgeted $584 million specifically for this Syrian operation for the financial years 2017 and 2018, and has earmarked another $900 million of spending on Soviet-style munitions between now and 2022. The total, $2.2 billion, likely understates the flow of weapons to Syrian rebels in the coming years.

But perhaps more shocking is the following admission that Pentagon suppliers have links with known criminal networks, also from FP:

According to the report, many of the weapons suppliers — primarily in Eastern Europe but also in the former Soviet republics, including Kazakhstan, Georgia, and Ukraine — have both links to organized crime throughout Eastern Europe and spotty business records.

The sheer amount of material necessary for the Pentagon program — one ammunition factory announced it planned to hire 1,000 new employees in 2016 to help cope with the demand — has reportedly stretched suppliers to the limit, forcing the Defense Department to relax standards on the materials it’s willing to accept.

It is likely that the organized crime association is the reason why the Pentagon has sought to alter its records. In addition, the sheer volume of weaponry continuing to ship to the Syrian battlefield and other parts of the Middle East means inevitable proliferation among unsavory terror groups – a phenomenon which has already been exhaustively documented in connection with the now reportedly closed CIA program to topple the Syrian government. The associations and alliances among some of the Arab former FSA groups the DoD continues to support in the north and east remains fluid, which means means US-supplied weapons will continue to pass among groups with no accountability for where they end up.

One of the authors of the OCCRP/BIRN report, Ivan Angelovski, told Foreign Policy that, “The Pentagon is removing any evidence in their procurement records that weapons are actually going to the Syrian opposition." The report is based on internal US government memos which reveal that weapons shipment destination locations have been scrubbed from original documents.

Falsified and altered Pentagon procurement documents (Click to enlarge):

Balkan Insight, which is hosting the original investigative report: "Seven US procurement documents were whitewashed to remove reference to 'Syria' after reporters contacted the Pentagon to enquire about whether the exporting countries – Bulgaria, Romania, Serbia, Ukraine and Georgia – had been informed of the destination."

The fact that Foreign Policy, which is the foremost establishment national security publication in the world, would admit that the Pentagon's Syria weapons procurement program is tied to East European organized crime is itself hugely significant. At this point the evidence is simply so overwhelming that even establishment sources like FP – which itself has generally been pro-interventionist on Syria – can't deny it.

FP further reports that the Pentagon program "appears to be turbocharging a shadowy world of Eastern European arms dealers." And adds further that, "the Pentagon is reportedly removing documentary evidence about just who will ultimately be using the weapons, potentially weakening one of the bulwarks of international protocols against illicit arms dealing."

Map/Infographic produced as part of the OCCRP/BIRN report, itself confirmed by Foreign Policy magazine. Notice the map denotes that prior CIA weapons went directly to Idlib province (northwest, section in green) and the Golan border region (south). Both of these areas were and continue to be occupied by al-Qaeda (in Idlib, AQ's Hay'at Tahrir al-Sham). In Idlib specifically, analysts have confirmed genocidal cleansing of religious minorities conducted by AQ "rebels" directly assisted by CIA weapons.

Late last month we featured the story of Bulgarian journalist Dilyana Gaytandzhieva, who was fired from her job after being interrogated by national intelligence officials for exposing the same Pentagon arms network which is the subject of the latest OCCRP/BIRN investigation. At the time, Al Jazeera was the only major international outlet which covered the story, which confirmed that Bulgarian agents interrogated Gaytandzhieva and "tried to find out her sources." An anonymous source had leaked a large trove of internal government files connected to the arms trafficking to the East European-based Trud Newspaper journalist, which was the basis of her reporting. The newest investigation released Tuesday appears to include some of the same documents, also confirmed by Gayandzhieva.

Read the full OCCRP/BIRN investigation here.

Read Zero Hedge's original coverage of the Pentagon's Balkan arms pipeline here.

via http://ift.tt/2fhr6RI Tyler Durden

Massive Equifax Hack Shows Cyber Risk to Deposits and Investments Today

44% of US population affected by Equifax hack
Hackers took names, birthdays and addresses, Social Security and driver’s license numbers
Steve Mnuchin “concerned about the global financial system and keeping it safe,”
Hacks is a reminder of the vulnerabilities created in a connected world
Cyber security is a major threat to both banking and financial industry
Investors should hold physical gold as insurance against hacking and cyber attacks

Last week 143 million people woke up to the news that a data breach at Equifax has left them wide open to financial and identity fraud.

Readers will have no doubt read about the hacking of credit bureau Equifax. Not only were they slow to deal with the issue but three senior executives (including the CFO) sold almost $2 million worth of stock prior to alerting customers to the security breach.

This is the third time in sixteen months that Equifax has been hacked. It is the umpteenth time there has been a data breach at a company that holds financial and personal information of its customers. Each time millions of people’s data and livelihoods has been put at risk.

‘Have no doubt: This means you will be hacked. This means your SIM card will be spoofed. This means someone will try to get into your email and online accounts. This means someone will try to open a credit card in your name.’ John Biggs, Tech Crunch.

Equifax is yet another example of incompetence on the part of data-heavy company, with little recourse for customers affected.

Cyberattacks are continuously evolving into incidents that are relentless and unforgiving. In the last 25 years the sophistication of hackers’ tools has improved.

This recent attack puts the Yahoo breaches of 2014 and 2015 in a rather dim light in comparison to the harm caused by Equifax hackers.

2017 has almost proved to be a coming of age year for hackers. So far this year we have already had the biggest ransomware outbreak that saw data breaches at the NHS, FedEx, Telefonica and Deutsche Bahn.

It is now inevitable that something like this goes on and that we are no longer surprised by it. Why is it happening and what can we do about it?

Why is this happening?

Governments and banks want everything to be digital from online accounts through to digital money. This not only saves them money but also helps with their knowledge about us and means they can continue to print cash without us paying too much attention. They share our information with one another and use this for their own advantages.

As customers we don’t mind this so much because the majority of the time an interconnected world makes our lives easier. It helps us to travel, it helps us to apply for mortgages, it even helps us to book a hotel room with just one click.

The cost of this easy life is the growing threat of hacking. Our entire lives are available to be seen by those who (if they really want it) can get access to it.

We trust these governments and companies not only with our most personal of information but also that they will protect it.

But this is a trust that is not respected by so many organisations.

When it comes to Equifax, customers did not ask them to eat up and store all of this data about them, just for it then to be sold onto marketing companies. It is not the customers’ fault that this data was not kept secure.

Equifax is just one headline in the last month regarding hacks. TechCrunch warns us about a few more:

Hacker group Dragonfly has penetrated operational networks of energy companies that control power grids in the US and Europe, which could allow them to disrupt utilities to hundreds of millions of people

An indefensible vulnerability in all modern cars could let attackers affect sensors, airbags, and anti-lock brakes.

Hackers penetrated voting systems before the 2016 presidential elections, but local officials weren’t warned and the systems haven’t been properly investigated for malware or alterations since.

Hackers are fooling mobile carriers into letting them change the phone associated with a phone number, allowing attackers to empty people’s cryptocurrency wallets

German voting machines can be hacked to change the vote tallies

Hackers want this information for three reasons:

To show you that they can have it if they want it. For some hackers it can be that the actual hacking is more important than what they can actually do with the data. This motive is becoming increasingly rare.
To make money from you or the company. This can either be by using your information to steal from you or claim money on your behalf, or by issuing hefty ransoms in exchange for the data.
Cyber warfare. This is unfortunately the case at the forefront of everyone’s minds when we see big hacks such as the Equifax breach. This has huge implications for not only your personal financial security but also for global safety and security.

Hacking weapons for cyberwar

Avivah Litan, an analyst at Gartner, told NBC News that the data gathered in these data breaches was not necessarily just going to be used to steal money and identities. Instead, it might end up playing a key role in cyber warfare.

“Cyberwar is in large part conducted through data mining and cyber-intelligence…Enemy nation states build databases of Americans that they then use to get to their targets, for example a network operator at a power grid, or a defense contractor at a missile defense company.”

US Treasury Secretary Steve Mnuchin has also recognised how this latest hack is a sign that far worse things could be on the horizon. Speaking to the CNBC Institutional Investor Delivering Alpha Conference in New York Mnuchin said his main concern was “about the global financial system and keeping it safe.”

For those of a more military leaning cyber hacks are very serious indeed. In June the British American Security Information Council (BASIC) released a report entitled ‘Hacking UK Trident: A Growing Threat’. In the report BASIC explained that a successful cyber intrusion could “neutralise operations, lead to loss of life, defeat or perhaps even the catastrophic exchange of nuclear warheads (directly or indirectly).”

What can be done about it?

In the short-term we need to be aware that this latest attack may have some very significant lasting effects.

The hackers have access to victims’ credit files, social security numbers, credit card details and even driving license information. This is not something we can just change the data for. Unless the US government decides to issue new social security numbers and 143 million Americans decide to move house and change their birth dates then this data is permanently vulnerable to exploitation.

Access to this information could result in major financial theft through identity fraud and just plain access to information. The Federal trade Commission told customers last week to file their tax returns early “as soon as you have the information, before a scammer can.”

Companies need to seriously up their game when it come to security of client accounts. In the United States it is not uncommon to be able to access account just through the last four digits of your social security number. If this wasn’t easy to find out before, it certainly is now thanks to Equifax.

Each time a data breach of this nature takes place it seems that the most companies merely breathe a sigh of relief that it wasn’t their systems which were hacked. Those who were hacked issue an apology and resolve to strengthen their systems.

Instead companies should be striving to become tech companies where security is at the forefront of their strategies.

In the long-term consumers need to protect themselves notably against financial fraud but also the impact of cyber warfare on the wider world.

Protect yourself, don’t rely on others

We used to be told that changing our usernames and passwords on a regular basis was good enough to protect ourselves from security issues.

Now, we have no idea where to start when it comes to information stored online. On a daily basis we partake in a panorama of activities that keep us locked into the interconnected world and our data vulnerable.

Of course one of the biggest areas that we are happy to have automated and made as easy as possible is our money. This is both at the end of money creation and our own personal investments.

As hackers and cyber attackers become more sophisticated we need to be ahead of the game.

All manner of financial, government and infrastructure companies have been hacked. It is likely that many of these small scale attacks have been merely testing of defences.

Be aware that in the future a concerted attack on the global financial system would likely include attempts at disabling various exchanges (both stock and foreign exchange). Banks would also be a key target, ATMs and wire transfers could be disabled and bank balances, which are merely digital figures, could be erased.

We are all dependent on technology and the digital monetary system. A cyberattack would economically paralyse our system. The primary wealth would longer be primarily digital – cash, stocks and bonds – access to tangible wealth would be vital.

Whilst it would be imprudent to predict cyber warfare that results in the collapse of the financial system we do believe it would be prudent to take necessary precautions and diversify into physical gold and silver bullion.

Conclusion – buy gold bullion for insurance

As we explained following the possible US Navy cyber attacks:

By owning allocated and segregated physical gold with GoldCore you are protecting yourself against potential hackers in two ways

First: GoldCore works extremely hard to provide the highest level of security for their clients – both online and offline.

Second: Gold is a tangible asset. This means it cannot just disappear at the touch of a few buttons, courtesy of a few hackers. Should there be a global cyberattack on the financial system, the primary wealth would no longer be primarily digital (cash, stocks and bonds etc).

Gold will not only be important because of its tangible nature but also because of its role as a safe haven in times of geopolitical risks. A cyberattack whether on the U.S. Navy, a civilian ship, an election or across the financial sphere is an attack. It is a weapon being fired by one party on another.

These also pose risks to digital gold providers who do not allow clients to interact and trade on the phone and are solely reliant for pricing and liquidity from online portals and online trading platforms.

Those who have outright legal ownership of physical gold and silver coins and bars outside the banking system will weather the cyber storm better than those who do not.

The hope is that these risks will not materialise. Hope is never a strategy. We believe it is prudent to be aware of and take appropriate measures – sooner rather than later – to protect your wealth.

Defiant North Korea Blasts “Evil” UN Sanctions, Vows To Accelerate Nuclear Program

North Korea has responded to the toughest, if watered down, United Nations Security Council sanctions ever imposed against the isolated country with its most strident rhetoric yet.

In its first official response to the new resolution, North Korea’s foreign ministry released a statement deriding the sanctions as an act of “heinous provocation,” saying the new economic restrictions only strengthened its desire to build nuclear weapons. We will “follow this road at a faster pace without the slightest diversion until this fight to the finish is over,” Bloomberg reported.

“The adoption of another illegal and evil ‘resolution on sanctions’ piloted by the U.S. served as an occasion for the DPRK to verify that the road it chose to go down was absolutely right,” the ministry said, according to KCNA. “The DPRK will redouble the efforts to increase its strength to safeguard the country’s sovereignty and right to existence."

The resolution is “a product of heinous provocation aimed at depriving the DPRK of its legitimate right to self-defense and completely suffocating its state and people through a full-scale economic blockade,” the statement went on.

The country once again asserted its right to self-defense, adding that the country’s nuclear push was ‘absolutely right,’” according to the Financial Times.

The statement of defiance came after Han Tae-song, the country’s ambassador to the UN, proclaimed that Pyongyang was “ready to use a form of ultimate means,” warning again the US that it would face the “greatest pain it ever experienced in history” for leading the UN move. Han’s remarks echoed a similar threat issued by state media early Monday morning local time, while negotiations were presumably still underway.

North Korean state media also lashed out against a recent agreement between Washington and Seoul to end the South’s 500kg limit on missile warheads, a deal likened by the Rodong Sinmun newspaper to “a ridiculous act of a mudfish trying to become a dragon in the sky.”

As reported on Monday, to secure the sanctions’ safe passage, the US was forced to concede several of its initial demands, including a total oil embargo and the freezing of assets tied to North Korean ruler Kim Jong Un and senior members of his government. Russia and China have called on the US to resume talks with North Korea, repeating that a suspension of joint military drills between the US and South Korea could kick-start diplomacy with Pyongyang.

Meanwhile, in another unwelcome development that will only serve to escalate tensions between the North and the US, Seoul and Japan, two of the groups that monitor the North’s weapons program have raised their estimates regarding the strength of the country’s weapons program. Norsar and 38 North, two North Korea research groups, on Tuesday upgraded their estimates of the recent nuclear test’s explosive yield to 200-300 kilotons and 250 kilotons respectively, implying that it was up to 30 times more powerful than the previous test

via http://ift.tt/2jmER62 Tyler Durden

Frontrunning: September 13

Apple takes shine off global stocks rally (Reuters)
Apple’s New iPhones Gamble on Allure of Premium Pricing (WSJ)
North Korea defiant over U.N. sanctions as Trump says tougher steps needed (Reuters)
Crews Face Herculean Task Restoring Power in Florida (WSJ)
Supreme Court Reinstates Travel Ban’s Refugee Restrictions (WSJ)
Seadrill Files for Bankruptcy in Effort to Shrink Debt Burden (BBG)
There’s a Speeding Mass of Space Junk Orbiting Earth, Smashing Into Things (WSJ)
Act or Wait? Fed Debate Heats Up After Inflation Misses Target (BBG)
Congress votes to call on Trump to denounce hate groups (Reuters)
Uber’s Legal Chief Salle Yoo Is Resigning (WSJ)
Greece to beat budget target, plans more bonds: finance ministry official (Reuters)
Inequality Persists Despite U.S. Progress on Incomes and Poverty (BBG)
Cities Swimming in Raw Sewage as Hurricanes Overwhelm Systems (BBG)
30% of Bank Jobs May Disappear in Next Five Years: Ex-Citi CEO Pandit (BBG)
After the Equifax Hack, LifeLock Sign-ups Jump Tenfold (BBG)
Emails Show How the Food Industry Uses ‘Science’ to Push Soda (BBG)
IEA Sees Strongest Global Oil-Demand Growth in Two Years (BBG)
Saudi Arabia Pushes OPEC on New Tack to Curb Oil Supplies (WSJ)
J.C. Penney Missed Out on 3300% Rally as Dumped Asset Skyrockets (BBG)
No federal charges for Baltimore cops in Freddie Gray’s death (Reuters)
China Prepares Sale of $2 Billion in U.S.-Dollar Bonds (WSJ)

Overnight Media Digest

WSJ

– Apple Inc introduced a trio of new iPhones, including the premium iPhone X, which will cost from $999 to $1,149. on.wsj.com/2xXSdbs

– DowDuPont Inc is altering its plan to splinter into three companies, bringing to an end the threat of a fight with as many as four activist investors. on.wsj.com/2xYrSdt

– Britain pledged to contribute troops and to work with the European Union to implement foreign sanctions after Brexit. on.wsj.com/2xYKslH

– U.S. President Donald Trump touted what he described as a plan by Malaysia Airlines Bhd to spend between $10 billion and $20 billion on Boeing Co jets and General Electric Co engines as he opened a White House meeting with Malaysia’s prime minister Najib Razak. on.wsj.com/2xYZ4RO

– Salle Yoo, the top lawyer at Uber Technologies Inc, is departing the company as it faces three federal investigations into its operations and welcomes a new chief executive. on.wsj.com/2h0v2dj

– Samuel Shen, a Microsoft veteran of 24 years and the former general manager of its cloud and enterprise business in China, took the job as JD.com Inc’s president of cloud unit. on.wsj.com/2h0d6iT

– The Donald Trump administration threatened to impose further sanctions on China if Beijing does not do more to shut down banks and other Chinese firms aiding North Korea. on.wsj.com/2gZPf2N

– The UK government referred Twenty-First Century Fox Inc’s $15.5-billion proposal to consolidate ownership of Sky Plc to British antitrust regulators and said it was likely to broaden that review to include Fox’s commitment to the country’s broadcasting standards. on.wsj.com/2h25Nr4

– Businesses in South Africa have come under pressure to cut ties with KPMG over the auditor’s work for companies owned by the Gupta family, as the fallout deepens from a scandal that has caused the collapse of Bell Pottinger’s British arm. on.ft.com/2eTrwgk

– Concerns over standards at Fox News Network has put Rupert Murdoch’s proposed 11.7 billion pound ($15.54 billion) takeover of European pay-TV group Sky Plc into doubt after the UK government signalled that it was likely to widen an investigation by regulators into the deal. on.ft.com/2eUDlTF

– DowDuPont has revised its plan to break up into three separate companies by shifting some operations in the three units, a plan welcomed by its activist investors. on.ft.com/2eTwDx8

NYT

– Nancy Gibbs, the first woman to lead Time magazine, is stepping down as editor in chief, ending her four-year run at the publication’s helm. nyti.ms/2f3ZYZN

– Britain’s culture minister said on Tuesday she was inclined to ask the country’s competition regulator to carry out a detailed review of a bid by Rupert Murdoch’s Twenty-First Century Fox to take full control of the British satellite television giant Sky Plc. nyti.ms/2jnRKgg

– After a year-long investigation, the National Transportation Safety Board concluded that a Tesla Inc system capable of automatically steering and controlling a car had “played a major role” in a fatal crash in Florida. nyti.ms/2h2ypk9

– DowDuPont Inc, the chemicals giant, said it would shift the focus of its reorganization plan after shareholders opposed a proposal to break up the company. nyti.ms/2eUN10i

Canada

THE GLOBE AND MAIL

** The Real Estate Council of Ontario (RECO) has laid charges against three realtors for allegedly accepting money from prospective home buyers in exchange for preferential access to preconstruction condo units. tgam.ca/2eUVJMc

** Brookfield Infrastructure Partners LP is on the cusp of its second decade, and chief executive officer Sam Pollock is shoring up capital while preparing to welcome a new slate of index investors to mark the occasion. tgam.ca/2eW31zs

** Shareholders in Home Capital Group Inc have resoundingly rejected Warren Buffett’s bid to boost his stake in the mortgage lender, which must now try to rebuild its fortunes without additional support from its star investor. tgam.ca/2eUQyMm

** Canada and Britain have joined forces in their efforts to get Boeing Co to drop its trade complaint against Bombardier Inc, with British Prime Minister Theresa May taking her concerns over the case to U.S. President Donald Trump. tgam.ca/2eUR0Ky

NATIONAL POST

** The Financial Accountability Office of Ontario on Tuesday released a commentary covering the province’s proposal to increase the minimum wage to C$15 ($12.4) an hour, finding the added labour costs for businesses will increase workers’ incomes, but that those extra payroll costs will force firms to axe some lower-income positions. bit.ly/2eUHrv5

** Single-family house prices may be overvalued by as much as 60 percent in Toronto, but cooling measures may take a bigger bite out of markets away from the country’s largest metro area, says a new report. bit.ly/2eU8x5i

** Canada’s two major rail companies, Canadian National Railway Co and Canadian Pacific Railway Ltd, sounded off on Tuesday against a new legislative proposal they say will give U.S. competitors unfair access to the Canadian rail network, and potentially cause more of the country’s smaller and remoter rail lines to be abandoned. bit.ly/2eVrgh1

Britain

The Times

– 21st Century Fox Inc’s 11.7 billion pounds ($15.54 billion )bid to take over Sky Plc has suffered a setback after the culture secretary, Karen Bradley, said that she was minded to refer the deal to regulators over concerns about broadcasting standards. bit.ly/2xXZ3hc

– High Court judges will be asked to rule on whether the inquiry team investigating the causes of the Grenfell Tower fire is sufficiently ethnically and socially diverse. bit.ly/2xY2AMr

The Guardian

– The Murdochs face the biggest investigation into their record as media owners since the Leveson inquiry after the culture secretary said their proposed 11.7 billion pounds takeover of Sky should face a further six-month inquiry. bit.ly/2fh6OI5

– Air Berlin has been forced to cancel about 100 flights after an “unusually high number” of pilots called in sick, in what is believed to be a wildcat strike against possible redundancies at the bankrupt airline. bit.ly/2fg5Uf1

The Telegraph

– Bell Pottinger Pvt has succumbed to the scandal of a divisive campaign it ran for controversial billionaire family the Guptas in South Africa and filed for administration. bit.ly/2gYwWLA

– The Competition and Markets Authority has cleared the way for an oil-services mega-merger after agreeing that Amec Foster Wheeler Plc’s plan to sell off its North Sea business would be enough to assuage its concerns over the John Wood Group takeover. bit.ly/2h1t8cq

Sky News

– The fourth round of Brexit talks has been delayed by a week to Sept. 25. A spokesperson said “both sides” had agreed to push back the date to give negotiators “flexibility” to make progress at the current stage. bit.ly/2xXImm0

-Matthias Wissmann, head of the German Automotive Association, said contingency plans were being formed to deal with a possible failure of Brexit negotiations in the next 18 months. bit.ly/2xY4EnA

The Independent

– Hope Hicks has officially become the third person to hold the title of communications director in United State President Donald Trump’s White House. ind.pn/2xXL3nC

– Theresa May has asked Donald Trump to help settle a trade dispute over Bombardier which could financially devastate one of Northern Ireland’s biggest employers and put thousands of jobs at risk, following pressure from the DUP. ind.pn/2xYebLf

via http://ift.tt/2h3iNwN Tyler Durden

South Korea Detects Radioactive Xenon Gas From North Korea Nuclear Test

Over a week after North Korea said it conducted its sixth nuclear test on Sept. 3, prompting the U.N. Security Council to step up sanctions with a ban on the reclusive regime’s textile exports and a cap on fuel supplies, South Korea said on Wednesday traces of radioactive xenon gas were confirmed to be from a North Korean nuclear test earlier this month, although it noted that it was unable to conclude whether the test had been a hydrogen bomb as Pyongyang claimed.

According to Reuters, South Korea’s Nuclear Safety and Security Commission (NSSC) said its land-based xenon detector in the northeastern part of the country found traces of xenon-133 isotope on nine occasions, while its mobile equipment off the country’s east coast detected traces of the isotope four times.

“It was difficult to find out how powerful the nuclear test was with the amount of xenon detected, but we can say the xenon was from North Korea,” Choi Jongbae, executive commissioner, told a news conference in Seoul.

The commission could not confirm what kind of nuclear test the North conducted, he added.

A US monitoring group also said on Wednesday that North Korea’s latest nuclear test had had a yield of 250 kilotons, which is much higher than earlier, official estimates. The authoritative US website 38 North, which is linked to the Johns Hopkins University, said that it was lifting its estimate for the yield of the blast to “roughly 250 kilotons.” The figure is more than 16 times the size of the 15-kiloton US bomb that destroyed the Japanese city of Hiroshima in 1945. Other official estimates of the yield vary from South Korea’s 50 kilotons to Japan’s 160.

The NSSC also said the xenon traces detected had no impact on South Korea’s environment and population. Xenon is a naturally occurring, colorless gas that is used in manufacturing of some sorts of lights. But the detected xenon-133 is a radioactive isotope that does not occur naturally and which has been linked to North Korea’s nuclear tests in the past.

Meanwhile, Seoul announced on Wednesday that it had conducted its first live-fire drill for an advanced air-launched cruise missile in a bid to strengthen the country’s pre-emptive strike capability against North Korea.

The Taurus missile launched from an F-15 jetfighter traveled through obstacles at low altitudes before striking a target off the South’s western coast, the Defense Ministry said. The missile, manufactured by Germany’s Taurus Systems, is reported to have a maximum range of 500 kilometers and its stealth characteristics allow it to avoid radar detection.

Meanwhile, North Korea, has remained defiant. As we will detail in a subsequent article, Kim’s regime reacted to the “evil” sanctions by vowing on Wednesday to further step up its weapons programs.

“The adoption of another illegal and evil ‘resolution on sanctions’ piloted by the US served as an occasion for the DPRK (North Korea) to verify that the road it chose to go down was absolutely right,” said the North’s Foreign Ministry in a statement published by the state-run KCNA news agency.

“The DPRK will redouble the efforts to increase its strength to safeguard the country’s sovereignty and right to existence,” it added.

Earlier on Tuesday, President Donald Trump said on Tuesday that the new sanctions on the North were a small step. “I don’t know if it has any impact, but certainly it was nice to get a 15-to-nothing vote, but those sanctions are nothing compared to what ultimately will have to happen,” Trump said in vague but threatening remarks.

Which suggests that more Xenon will be detected soon, and the market’s current state of cautious optimism on the recent N.Korean easing in tensions will be violated.

via http://ift.tt/2xk3wNZ Tyler Durden

25% Of Homes In Florida Keys Destroyed By Hurricane Irma

After Hurricane Irma overwhelmed the Florida Keys with 15-foot storm surges and 130 mph winds, causing the worst flooding the chain of islands has experienced in nearly a century, federal officials' first assessment of the damage suggests that nearly a quarter of the homes on the island were destroyed, according to the Associated Press. While not every home is beyond repair, officials said no structures escaped some form of damage.

“Basically every house in the Keys was impacted in some way or another,” Federal Emergency Management Agency Administrator Brock Long said at a news conference. “This is why we ask people to leave.”

While residents and business owners in the Upper Keys as far south as Islamorada were allowed back into the area Tuesday morning, Monroe County officials urged people to stay away. “Fuel, water, power & medical super limited,” the county said on Twitter, according to WSJ. The county has about 53,000 housing units, census figures show. Nearly all are on the Keys, a 110-mile ribbon of low-lying islands linked by bridges. Monroe County is home to 79,000 people, the vast majority of whom live on the archipelago.

Elsewhere, federal authorities have maintained their mandatory evacuation order during the early stages of the cleanup. Throughout the state, some 155,000 people are still in shelters and more than 9 million Floridians lack power, exposing them to the unpleasant summer heat. That’s compared with roughly three-quarters-of-a-million customers were still without power in Georgia and the Carolinas by late Tuesday, according to local utilities.

Meanwhile, workers Tuesday rushed to find any victims who had remained on the islands during the storm, and deliver food and water.

"It's going to be pretty hard for those coming home," said Petrona Hernandez, whose concrete home on Plantation Key with 35-foot walls was unscathed, unlike others a few blocks away. "It's going to be devastating to them."

With phone service still unavailable, the full extent of the destruction was still a question mark.

Further north, life in Florida inched closer to normal, with some flights again taking off, curfews lifted and theme parks reopening. Cruise ships that extended their voyages and rode out the storm at sea began returning to port with thousands of passengers. Crews also worked to repair two washed-out, 300-foot sections of US 1, the highway that runs through the Keys, and check the safety of the 42 bridges linking the islands. Florida Gov. Rick Scott on Tuesday said transportation authorities were inspecting those bridges to make sure they can still bear weight.

Meanwhile, the number of deaths blamed on Irma in Florida climbed to 12, in addition to four in South Carolina and two in Georgia. At least 37 people were killed in the Caribbean.

"We've got a lot of work to do, but everybody's going to come together," Florida Gov. Rick Scott said. "We're going to get this state rebuilt."

Search-and-rescue teams made their way into the more distant reaches of the Keys, and an aircraft carrier was positioned off Key West to help. Officials said it was not known how many people ignored evacuation orders and stayed behind in the Keys.

Some of the residents who’ve already returned are becoming so desperate, the sound of helicopters purring overhead elicits a sense of elation – a sign that the recovery effort is under way.

“In Key Largo, Lisa Storey and her husband said they had yet to be contacted by the power company or by city, county or state officials. As she spoke to a reporter, a helicopter passed overhead.

‘That's a beautiful sound, a rescue sound,’ she said.”

As the cleanup and recovery effort started in earnest, a few of the most heavily impacted cities, like Miami Beach, were just beginning to reopen, highways leading into the state from Georgia had bumper-to-bumper traffic, and long lines at gas stations remained a major frustration in cities like Fort Myers.

While officials from Florida Power & Light, the state’s largest utility, have said their rebuilding of the power grid could take weeks, the recovery could take even longer in the Keys, where, according to WSJ, the pleasures of island life in the subtropics have long come mixed with danger. One of the worst hurricanes ever to hit the US slammed into the Keys on Labor Day in 1935 at Category 5 strength, killing 408 people, according to the National Hurricane Center.

via http://ift.tt/2f4Eyvh Tyler Durden

IEA Forecasts Fastest Oil Demand Growth In Two Years

The International Energy Agency, which advises most major economies on energy policy, forecast that global oil demand will climb this year by the most in two years amid stronger-than-expected consumption in Europe and the U.S. although it was unclear just how this will offset recently fading demand by the two biggest marginal consumers, China and India. The IEA reported that global oil demand grew very strongly in Y/Y in Q2 2017, by 2.3mmb/d, or 2.4%, and increased its estimate for demand growth in 2017 by 100,000 barrels a day to 1.6 million a day, or 1.7%. The IEA has now raised its 2017 oil-demand growth forecast for three months in a row.

The agency observed that the re-balancing of oversupplied world markets continues with OPEC supplies falling for the first time in five months as reported yesterday, and inventories of refined fuels in developed nations subsiding toward average levels. In August, global oil supply fell by 720 kb/d due to unplanned outages and scheduled maintenance, mainly in non-OPEC countries. OECD commercial stocks were unchanged in July at 3 016 mb, when they normally increase.

“Demand growth continues to be stronger than expected, particularly in Europe and the U.S.,” the Paris-based agency said in its monthly report.

The IEA also said that the impact of Hurricane Harvey on global oil markets is “likely to be relatively short-lived,” according to Bloomberg. Although the oil market “coped relatively well” with the disruption caused by this year’s storms, the damage to U.S. facilities will still be felt, according to the report. The country’s production was curbed by about 200,000 barrels a day in August and 300,000 a day in September.

Meanwhile local stockpiles were at “comfortable” levels before the storm hit, while releases from government reserves and plentiful imports from Europe allayed any shortage. Stockpiles of refined fuels in developed nations were close to their five-year average in July, and could fall to or below this level “very soon,” according to the IEA. Crude oil inventories were steady in the same month, when they typically increase.

“Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly,” the agency said.

IEA also noted that OPEC boosted its production cut compliance last month to 82% from 75% Its 10 partners fully delivered on their pledged cutbacks for the first time since the agreement started in January, as Russia and Kazakhstan conducted seasonal maintenance work at oilfields, the IEA said.

Still, if OPEC keeps output at current levels the group is unlikely to reduce stockpiles “dramatically” either this year or even in 2018, Neil Atkinson, the head of the IEA’s oil markets and industry division, told Bloomberg in a television interview, suggesting that another OPEC production extension is likely inevitable.

via http://ift.tt/2w8BDce Tyler Durden