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VIX crashed out of the gate this morning, plunging to 12.50 lows – the lowest since August 2015 (right before the market crashed).
The front-end of the ‘greed’ index has collapsed, driving the term-structure of ‘fear’ to its steepest since Dec 2014 as we suppose everyone and their pet rabbit is confident that The ECB will do something and The Fed won’t.
What happened next?
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With oil – until recently the key signal for the S&P – down substantially overnight, many were scratching their heads why US equity futures not only rebounded from overnight lows but proceeded to wipe out all overnight losses and are currently trading in the green. The reason: another overnight ramp in the USDJPY which is the default fallback signal for stocks whenever oil isn’t going higher.
But what precipirated the bounce in USDJPY?
The answer: a note from Goldman released overnight titled “Bringing forward our main scenario for additional easing to April from June” in which the bank announced it is now making an April easing by the BOJ as its main case scenario instead of June as was the case before, and it now expects that the BOJ to double its pace of equity purchases via ETFs from the current ¥3.3 trillion to ¥7.0 trillion as soon as the BOJ’s next meeting on April 26-27.
This is precisely what we wrote last week in “The Bank Of Japan Already Owns Over Half Of All ETFs; It Wants To Own More“, and Goldman now agrees.
Here is the summary from Goldman’s Naohiko Baba:
The Bank of Japan (BOJ) is due to hold its next monetary policy meeting (MPM) on April 26-27. To date, our base-case scenario has been for additional easing at the June MPM, and we had regarded possible easing at the April MPM as a risk scenario (see our February 17 Japan Views). However, we now make easing in April our base-case scenario, given the rising risk that business confidence has been dented by recent financial market instability and the Kumamoto earthquakes, and in view of BOJ governor Haruhiko Kuroda’s recent proactive statements on possible additional easing in response to the sharp deceleration in inflation in April.
And the details:
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Authored by Peter Tchir via Brean Capital,
FHLH will allow investors to participate in only the first hour and last hour of NYSE trading. This is a truly exciting and innovative product as it allows investors to capture the tension of the opening bell and the dramatic closes. It goes without saying that we will shortly be adding Inverse funds and 2x and 3x leveraged versions.
EUCL will provide the opportunity to trade U.S. stocks only for the hour surrounding the European close. With heightened volatility around that time it lets investors watch their portfolios only during lunch hour. Again, the 2x and 3x leveraged versions will bring an even greater level of customization for those customers who want to trade the European close without the capital to do it leveraged on their own.
CRZY is designed to satisfy the need for a arcane complex product that captures the zeitgeist of the moment. Currently CRZY will go long of the spread between Brent Crude and Gold for Shanghai deliver quanto’d into yen on a 2.5 daily leverage. STPD will be the inverse version of the same trade. CRZY and STPD will reset their investment guidelines on a monthly basis to a new vaguely correlated trade that makes some degree of sense based on word cloud searches from the financial headlines.
Finally DICE is designed to finally allow investors disgruntled about the stock market. Each morning at approximately 9:20 , Bob Barker of Price is Right Fame, will roll a specially made die. Each of buy, sell and hold will have 2 sides of the die and the portfolio will be adjusted on the open based on the dice roll (the leveraged version, waiting final SEC approval will use 3 dice and be based on the combined outcome – the SEC is concerned we are misrepresent it as a leveraged fund when in fact it might not be leveraged on any particular day but we believe we can get overcome this obstacle).
I feel better after that rant (these are obviously not real funds and not meant to represent real funds in any way).
Ranting aside, I’ve been struggling with the impact some very esoteric funds might be having in the market. I’ve also been struggling with the concept that some esoteric funds are attracting more capital than some basic mutual fund strategies.
I’m not sure what it means and maybe after 5 weeks of grinding higher on little volume with minimal volatility I’m just angry – especially as that now seems to be the forecast going forward. But I cannot shake my fixation that some complex funds are impacting markets in ways we haven’t thought about – and that tends not to end well.
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Three weeks after angering the mainstream media with his apocryphal assessment that the US “Is Headed For A Massive Recession” and that “It’s A Terrible Time To Invest In Stocks”, Trump is likely set to make even more waves with an interview he gave to Fortune magazine, which will be released in its entirety later this week, in which Trump says that while he likes Janet Yellen’s low interest rates, he is not a big fan of Janet Yellen herself.
“I think she’s done a serviceable job,” Trump tells Fortune. “I don’t want to comment on reappointment, but I would be more inclined to put other people in.”
As he’s said in the past, Trump tells Fortune that he would “absolutely” support proposals that would take power away from the Fed, and allow Congress to audit the U.S. central bank’s decision making.
Curiously, while Trump is not a fan of Yellen herself, he does like zero rates, and is a fan of the Fed’s monetary policy. “The best thing we have going for us is that interest rates are so low,” says Trump, comparing the U.S. to a homeowner refinancing their mortgage. “There are lots of good things that could be done that aren’t being done, amazingly.”
Maybe that is the case of billionaire real-estate developers, but it is hardly the case of tens of millions of (mostly aged) Americans who until recently relied on interest income from their savings, and ever since the arrival of the New Normal have been forced to take a job during what otherwise would have been retirement years to make ends meet. That, or simply gamble in the stock market in hopes of striking it rich.
Trump added that if the Fed were to raise interest rates now it could be disastrous because the country would be forced to pay higher interest rates on our debt, and that would be very “scary” for the economy.
“People think the Fed should be raising interest rates,” says Trump. “If rates are 3% or 4% or whatever, you start adding that kind of number to an already reasonably crippled economy in terms of what we produce, that number is a very scary number.”
Odd, considering, that only a few weeks ago the same Trump was warning of big Fed-created bubbles, which are the direct result of the Fed’s ultra loose, purposeful bubble-inflating policy.
It is also odd because when the Fed actually did hike rates last December, it led to a wholesale rush out of “risk on” assets such as stocks, and into Treasurys, pushing yields even lower. It’s not just fund flows: by rising rates the Fed is effectively accelerating the inversion of the curve, thereby bringing closer the date when the US slides into recession and leaving markets with just a deflationary outcome, i.e., lower yields.
But Trump doesn’t seem to be focused on that. Instead, as Fortune writes, Trump says he would like to take advantage of lower interest rates in order to refinance the debt and spend more money to rebuild the military and the country’s infrastructure. Trump did acknowledge that he thought we need to reduce our debt, but it was one of a number of things he thinks we need to do.
“The problem with low interest rates is that it’s unfair that people who’ve saved every penny, paid off mortgages, and everything they were supposed to do and they were going to retire with their beautiful nest egg and now they’re getting one-eighth of 1%,” says Trump. “I think that’s unfair to those people.”
Again, nothing about all those people who have saved all their lives in hopes of collecting at least some interest on their labor.
Finally, in a notable reversion of his “Make America Debt-Free Again” plan, country debt free, Trump softened that stance during the Fortune interview.
“You could pay off a percentage of it, depending on how aggressive you want to be,” he says. “I’d rather not be all that aggressive. I’d rather not have debt but we’re stuck with it. If I had a choice of taking over debt free or having $19 trillion – which by the way is going up to $21 trillion very soon because of the omnibus budget, which is a disaster. If I had my choice I’ll take no debt every time.”
Clearly, the only problem is that someone has to “take” that debt; and with the entire world now drowning in debt – including China which according to estimates is now approaching Japan’s 400% total debt/GDP with a ratio close to 350%, there is simply no way out, without implementing one of the only three possible “solutions” – default, hyperinflation or war.
We wonder how long until Trump, or any other presidential candidate for that matter, admits as much.
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Perhaps upset at the weekend’s development, Russia has decided to rattle the global crude complex cage. Amid hopes of a freeze, Russia’s energy minister Alexander Novak has reversed course and stated that Russia could “in theory” increase oil output and “was never ready to cut production.” It appears things are rapidly breaking down between Russia and The Kingdom – which perhaps explains Obama’s rapidly arranged trip to kiss the ring in Riyadh.
The oil market is not transparent enough, which leads to the demand-supply mismatch, Russia’s Deputy Prime Minister Arkady:
“The policy of certain countries regarding diversification of energy sources aimed at supporting local production is sometimes implemented inefficiently as it creates extra costs for consumers and changes the oil and gas market balance. From our viewpoint, the situation is not transparent enough as not the whole information is provided to consumers,” he said.
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While Congress is scrambling to sweep the recently introduced Bipartisan bill that would allow US families to sue Saudi Arabia for Sept 11, Barack Obama has just landed in Saudi Arabia to reassure his close ally that all is under control.
President Obama with Saudi Crown Prince Mohammed bin Nayef,
center, and Deputy Crown Prince Mohammed bin Salman, in May 2015
As the WSJ reports, Obama arrived today in the Saudi kingdom for a brief trip “meant to provide reassurances to Gulf allies and to bolster his own foreign-policy legacy.”
With just nine months left in office, Mr. Obama is aiming to steady what have become rocky relationships in the region and to tackle issues ranging from the fight against Islamic State to addressing Iranian aggression, along with easing tensions between Tehran and Saudi Arabia. But in Riyadh, the president will find frustrated allies who already have begun to look ahead to the next administration.
Obama plans to spend about 28 hours in the Saudi capital, holding talks with King Salman Wednesday afternoon and attending a Thursday summit hosted by leaders of the six-nation Gulf Cooperation Council. This trip, perhaps the last to Riyadh during Mr. Obama’s presidency, serves as a bookend for an administration that once sought a “new beginning” for the U.S. and the Islamic world, but now is confronting the prospect of a tense conclusion to this chapter.
Of course, the main reason for the simmering Saudi tensions has been the thawing of US relations with Iran, Saudi Arabia’s self-proclaimed biggest regional threat.
Meanwhile, from the NYT, here are some pointers on what Obama should not do during his visit: sell even more weapons to the belligerent kingdom in exchange for goodwill that only lasts as long as the status quo is not threatened.
When President Obama visits Saudi Arabia this week for a meeting with representatives from the Gulf Cooperation Council countries, he should avoid doing what he did at Camp David last May, the last time he met with them: promise more arms sales. Since Mr. Obama hosted that meeting, the United States has offered over $33 billion in weaponry to its Persian Gulf allies, with the bulk of it going to Saudi Arabia. The results have been deadly.
The Saudi-American arms deals are a continuation of a booming business that has developed between Washington and Riyadh during the Obama years. In the first six years of the Obama administration, the United States entered into agreements to transfer nearly $50 billion in weaponry to Saudi Arabia, with tens of billions of dollars of additional offers in the pipeline.
The Pentagon claims that these arms transfers to Saudi Arabia “improve the security of an important partner which has been and continues to be an important force for political stability and economic progress in the Middle East.” Recent Saudi actions suggest otherwise.
The Obama administration says that it has urged restraint from the Saudis, but that doesn’t appear to have worked. Human Rights Watch has reported that two Saudi strikes on a market in the Yemeni village of Mastaba in mid-March killed at least 97 civilians, including 25 children. This was just one in a series of Saudi strikes on marketplaces, hospitals and other civilian targets, attacks that Human Rights Watch and Amnesty International have said may constitute war crimes.
Alas, Obama is in a bind: threaten to expose Saudi involvement in Sept 11, or dare to suggest that the US military-industrial supply chain into Saudi Arabia is slowing, and the response is already clear: a threat to dump hundreds of billions in US securities. Which is why Obama has zero leverage and will fold to any Saudi demand presented during his meetings today.
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Submitted by Charles Hugh-Smith of OfTwoMinds blog,
Alternatively, we can cling to a state of denial, and the dominant system will be replaced by arrangements that are not necessarily positive.
The reality that cannot be spoken is that all the financial systems we believe are permanent are actually on borrowed time. One way we can judge this decline of resilience is to look at how long it takes systems to recover when they are stressed, and to what degree they bounce back to previous levels.
Another is to look at the extremes the system reaches without returning to “normal”: for example, interest rates, which rather than normalizing after seven years of suppression are being pushed to negative rates by increasingly desperate central bankers.
The key insight here is that financial systems and indeed economies function as natural systems. Central planning/central banker manipulation appears to control the system, but this control masks the reality that the system is increasingly fragile and prone to collapse, not just from internal dynamics but as a direct result of central bank manipulation.
The warning signs of fraying resilience are all around us.
Nature’s Warning Signal: Complex systems like ecological food webs, the brain, and the climate all give off a characteristic signal when disaster is around the corner.
“The signal, a phenomenon called ‘critical slowing down,’ is a lengthening of the time that a system takes to recover from small disturbances, such as a disease that reduces the minnow population, in the vicinity of a critical transition. It occurs because a system’s internal stabilizing forces—whatever they might be—become weaker near the point at which they suddenly propel the system toward a different state.”
Recent email exchanges with correspondent Bart D. (Australia) clued me into the Darwinian structure of this critical slowing down and loss of snapback (what we might call a loss of reslience).
The dominant systems do not operate in a vacuum; beneath the surface dominance of one system are many other systems that are suppressed by the dominant system.
As the dominant system weakens/slows down, these largely invisible systems quickly expand to occupy more of the ecosystem. An example in the financial realm is barter: in a system dominated by central bank/state issued money and digital transactions, barter still exists but on a very modest scale.
When central bank/state currency loses its value and utility (due to devaluation of the currency, hyper-inflation, etc.), then barter expands rapidly to fill the vacuum left by the demise of the dominant system.
The ecosystem example illustrates is how critical transitions occur: as the dominant system slows down, other systems fill the ecosystem niches that are opened up by the weakness of the dominant arrangement. At some point, the equilibrium of the ecosystem is disrupted and a new balance of other dynamics become dominant.
In the realm of currencies, the rise of crypto-currencies is an example of a nascent new system gaining ground as the dominant system slows/decays.
In financial systems, this process can be at least partially conscious: we can see the dominant paradigm weakening, and start developing other systems that can compete for the coming openings in the financial/social ecosystem.
Alternatively, we can cling to a state of denial, and the dominant system will be replaced by arrangements that are not necessarily positive. Conscious development of alternatives that can compete transparently for dominance as the status quo decays is the most effective avenue to more resilient, sustainable systems.
This essay was drawn from Musings Report 2016-3. The Musings Reports are emailed weekly exclusively to subscribers and major contributors ($5/month or $50/year).
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Putting much of the recent doubts about his slowing momentum to the side, Donald Trump roared to a major victory in New York last night, collecting over 60% of the vote which will see him come away with a huge haul of delegates that moves him closer to the GOP presidential nomination.
Trump began the night with 756 delegates, according to The Associated Press. He appears poised to take 89 of the 95 delegates that were up for grabs in New York. That would bring Trump’s total to 856 delegates, putting him 68 percent of the way to the 1,237 needed to clinch the nomination before the Republican National Convention in July.
With his latest 845 delegates, he remains some 392 short of the 1,237 needed for the nomination. There are only 674 delegates still up for grabs in contests between now and the last day of elections on June 7, and Trump would need to win about 58 percent of them to secure the nomination.
As the WSJ adds, the sweeping victory across the state, Trump is below the critical 50% threshold in just four of the state’s 27 congressional districts, eliminated rival Ted Cruz from having any mathematical chance of winning the nomination outside of a contested convention. It left Trump as the only candidate who can become the party’s nominee without a floor fight in Cleveland.
Trump would claim all of New York’s delegates if he won 50% of the statewide vote, a mark he surpassed easily, and 50% of the vote in each congressional district, a threshold he will nearly meet.
It’s not all smooth sailing, however: regardless of his final delegate haul in New York, a series of potential potholes remain on Trump’s road to the GOP nomination. He must win 64% of the bound delegates, those obligated to support a particular candidate on the first convention vote, that remain in the 15 states yet to hold primaries.
If Cruz prevails in a series of May contests in Indiana, Nebraska, Washington and Oregon, he can stop Trump from reaching 1,237 delegates and send the Republican contest to a desperate scramble for unbound delegates and a multiple-ballot scenario unseen since Thomas E. Dewey won the party’s 1948 nomination on the third ballot.
Even with his convincing win in the New York primary, Trump will be forced to fight state-by-state for delegates through the end of the GOP nominating calendar on June 7, when California’s 172 delegates will be at stake. Trump just began hiring California staff this month, once new top aide Paul Manafort took control of most campaign operations.
Whether Trump hits 1,237 is likely to remain uncertain until the final day of elections on June 7, after all of the votes are counted at the congressional district level in California, the largest delegates prize on the map. If Cruz is successful in blocking Trump, according to the Hill he’ll become the favorite to emerge as the party’s nominee at a contested convention.
The Texas senator has proven far better than Trump at getting his supporters elected as delegates, even in states that Trump won, such as Georgia and South Carolina. These delegates will be bound to Trump for the first vote at the convention in Cleveland in July. But if Trump fails to win the nomination on that first ballot, many will be able to move their support to Cruz, potentially pushing him across the 1,237-delegates threshold.
In his victory remarks Tuesday night, Trump acknowledged that he has been outfoxed by the Cruz forces and warned unbound delegates who could swing the nomination away from him not to do so. “Nobody should get delegates unless they get those delegates from voters and voting,” Trump said. “It’s a crooked system; it’s a system that’s rigged. We’re going to be going back to the old ways: You get votes and you win.”
At the same time, Trump’s campaign is preparing to put up a fight for unbound delegates in Pennsylvania, a task that Trump’s allies have failed to accomplish in a series of states in the last month. The jockeying over the Keystone State’s convention-goers is expected to be fierce, because 54 of 71 delegates to Cleveland won’t be bound to any candidate. Potential delegates’ presidential preferences won’t be noted on the Pennsylvania ballot.
Meanwhile, John Kasich, who stands to get the remaining New York delegates, has been eliminated from winning outright for months but is also sticking around in hopes of blocking Trump from the nomination.
He has argued that polls show he is the only Republican candidate who can beat likely Democratic nominee Hillary Clinton.
Meanwhile, when looking at Trump’s market-based odds, after slumping as low as the mid-40s one month ago, according to PredictIt his chance of grabbing the GOP nomination is back to recent highs, with some 63% odds.
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China Gold Yuan Trading To Boost Power In Gold and FX Markets – End Manipulation?
China launched yuan denominated gold bullion trading today in a move that will further boost its power in the global gold and fx markets. Critics of the existing pricing mechanisms hope that it will lead to increased transparency and may end price manipulation.
The Shanghai Gold Exchange (SGE), the world’s largest physical gold exchange, launched a yuan-denominated benchmark price today in Shanghai, a measure that will benefit both China’s domestic gold market and the global precious metals market.
The SGE set the price at 256.92 yuan a gram ($1,233.85/oz) at the 10:30 am session after members of the SGE submitted buy and sell orders for gold of 99.99 percent purity according to Bloomberg. Members include Chinese banks, jewelers, miners and the local units of Standard Chartered Plc and Australia & New Zealand Banking Group Ltd., according to the bourse.
The SGE said in a press release that the launch of the Shanghai Gold Benchmark Price will be useful as it adequately reflects the gold supply and demand in China, and represents the price trend of China’s gold market and China is now the largest producer and buyer of gold bullion in the world.
Shanghai Gold is gold bars or ingots with the standard weight of one kilogram and a fineness of no lower than 999.9, delivered in Shanghai, and traded via SGE price trading platform. It is quoted in yuan per gram, and settled via the SGE platform.
“At present, China’s gold derivatives market is lacking in an authoritative and equitable gold benchmark price which is denominated in renminbi. The launch of Shanghai Gold Benchmark Price will facilitate the development of China’s gold derivatives market which will also have a big impact on the price of gold related financial products, wealth management products and derivatives,” the release said.
Shanghai Gold Benchmark Price follows the principle which allows all orders executed on the SGE price trading platform. The benchmark price is determined when price and volume reach the balance during the auction period on the SGE price trading system.
Experts said the Shanghai Gold Benchmark Price will play a significant role in the global gold market.
According to David Marsh as quoted by the official China Daily, Managing Director and Co-Founder of Official Monetary and Financial Institutions Forum (OMFIM), the yuan-denominated gold benchmark offered by SGE is a necessary addition to the international gold market and should make the pricing of physical gold more open to the play of actual market forces.
PBOC Says “Potential” Is “Huge”
“The Shanghai gold benchmark will provide a fair and tradable yuan-denominated gold fix price … will help improve yuan pricing mechanism and promote internationalisation of the Chinese gold market,” Pan Gongsheng, deputy governor of the People’s Bank of China said at the launch in Shanghai.
“The Chinese gold market has rare opportunities for development,” Gongsheng said. “The market capacity and potential are huge. Today’s event will help enhance the impact of the renminbi on gold pricing,” Pan said.
End of Manipulation?
“(They) are aware it is a time consuming process. It is not going to happen in one day, one month or even one year,” a source familiar with SGE’s thinking said told Reuters.
“China has to show to the world over a consistent period of time that the price is open, rational, reasonable and that there is no manipulation.”
Transparency in the fixing process has come under scrutiny since a scandal broke out in 2012 over the rigging of the London interbank offered rate, or Libor.
The London gold fix, previously set via a teleconference among banks and facing allegations of manipulation, was replaced in 2015 by electronic auctions.
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Overnight Media Digest
WSJ
– Intel Corp is planning to slash 12,000 jobs, or 11 percent of its workforce, a consequence of the shrinking personal-computer market and the chip maker’s failure to take advantage of the industry’s transition to smartphones. (http://on.wsj.com/1Wd9KnY)
– United Continental Holdings Inc and two big investors have settled a fight over the makeup of the airline’s board of directors, staving off a bruising public battle over the company’s future. (http://on.wsj.com/1Vis28u)
– Malaysia Airlines Bhd Chief Executive Christoph Mueller plans to leave the carrier as it continues to try to recover from the catastrophic loss of two jetliners in 2014. Mueller joined the company last year in a bid to revive the airline. (http://on.wsj.com/1SSqtaN)
– Sumner Redstone’s granddaughter accused his daughter, Shari Redstone, in court papers Tuesday of pressing for a “do not resuscitate” order and other non-interventionist health measures for the media mogul, over his strong objections. (http://on.wsj.com/1S9OZbv)
– Wendy’s Co named Gunther Plosch as its chief financial officer, effective May 2, filling the spot vacated when the burger chain’s current financial chief steps up as part of a previously-announced succession plan for Chief Executive Emil Brolick. (http://on.wsj.com/23J9wLa)
FT
– Ministers have let go of plans to abolish automatic payrolls payment of union subscriptions as part of compromises over the trade union bill. (http://bit.ly/1XHDSXB)
– Seeking to reassure sceptical Conservative MPs, Philip Hammond insisted there were no plans for British troops to be involved in fighting against the Islamist militants in Libya. (http://bit.ly/1XHExYR)
– Prudential Plc is now closer to secure a tax refund of more than 100 million pounds ($143.86 million) in the latest round of long-running battle for compensation over past breaches of European law. (http://bit.ly/1XHEGvB)
– The Financial Conduct Authority said in its 2015 review into conflicts of interest in asset management that industry chiefs were spending large sums of money to woo clients with hospitality attempting to win business. (http://bit.ly/1XHEHzq)
NYT
– Banca Popolare di Vicenza <IPO-BPVS.MI> said on Tuesday that it had set a price range for its initial public offering, in which the Italian lender hopes to raise as much as 1.8 billion euros, or about $2 billion. (http://nyti.ms/23YKrss)
– Intel Corp, the world’s largest maker of semiconductors, said on Tuesday that it was laying off 12,000 people, about 11 percent of its work force, as it continues to reel from a long downturn in global demand for personal computers. (http://nyti.ms/1QlbEMj)
– The FBI defended its hiring of a third party to break into an iPhone used by a gunman in last year’s San Bernardino mass shooting, telling some skeptical lawmakers on Tuesday that it needed to join with partners in the rarefied world of for-profit hackers as technology companies increasingly resist their demands for consumer information. (http://nyti.ms/1WEoSLN)
– Anheuser-Busch InBev SA said on Tuesday that it had accepted an offer by Asahi Group Holdings Ltd of Japan to buy beer brands Peroni and Grolsch, as well as certain European operations of SABMiller Plc, for 2.55 billion euros, or about $2.9 billion. (http://nyti.ms/1XHS96m)
Canada
THE GLOBE AND MAIL
** Manitobans gave Progressive Conservative Leader Brian Pallister one of the province’s most resounding victories in decades, handing Greg Selinger defeat and ending nearly 17 years of New Democratic Party’s rule. (http://bit.ly/26eDwNL)
** Canada and China are set to enter a new “golden” era under Prime Minister Justin Trudeau, Premier Li Keqiang told Jean Chretien in Beijing this week. (http://bit.ly/26eDy8s)
** A three-year investigation by Canada’s competition watchdog has resulted in a report that clears Alphabet Inc’s Google of any substantial wrongdoing in its search ad business, and closely echoes a 2013 investigation by the U.S. Federal Trade Commission. (http://bit.ly/26eDIg4)
NATIONAL POST
** The release of an abortion pill allowing women to terminate early pregnancy at home, that is expected to become available in July, is already garnering criticism by way of women’s health advocates saying Health Canada’s tight controls over its use are unnecessarily restrictive. (http://bit.ly/26eEZUg)
** Toronto-based Turo that took the Airbnb model and adapted it to car rentals launched on Tuesday in three provinces, its first foray outside the United States, though it wrestles with the same insurance headaches that other startups in the so-called sharing economy have faced. (http://bit.ly/26eFOwr)
Britain
The Times
* The proposed 18 billion pounds nuclear power station at Hinkley Point in Somerset could be abandoned without risking power cuts, contrary to the government’s previous claims, the energy secretary has admitted. There would be no significant cost to consumers and no taxpayer liability if the project were cancelled, politician Amber Rudd said in a letter to MPs. (http://bit.ly/1rhklTI)
* Turkey will tear up its migrant deal with the European Union if Brussels fails to deliver visa-free travel for 75 million Turks to Europe by June, according to its prime minister. (http://bit.ly/1U655UD)
The Guardian
* The U.S. Department of Justice has launched a criminal investigation into the widespread international tax avoidance schemes exposed by the Panama Papers leak, published by the Guardian and other journalistic partners. (http://bit.ly/1ThRreM)
* Yahoo Inc announced falling revenues and a quarterly loss of $99.2 million on Tuesday as the ailing Internet business looks for a buyer. The company reported revenue of $1.09 billion, down 11 percent from the same time last year. The fall shows continuing deterioration in Yahoo’s business but was better than analysts had expected. (http://bit.ly/1rhjwdw)
The Telegraph
* The boss of Associated British Foods PLC, the UK’s biggest sugar supplier, has come out swinging against the government’s proposed “sugar tax” and the suggestion it will help the obesity crisis. (http://bit.ly/1WCJ6FC)
* The City of London could lose its position as the world’s leading financial centre in the event of Brexit, Mark Carney, the Bank of England Governor, has warned. (http://bit.ly/1MGPb1r)
Sky News
* Managers at Tata Steel’s Port Talbot steelworks have been briefed about a possible management buyout plan, according to Sky sources. Details of the potential lifeline are expected to be announced as early as Wednesday. (http://bit.ly/1S9iXMH)
* Oil industry engineering company Aker is to cut around 280 jobs in Aberdeen and London as low energy prices squeeze the industry. The cuts represent 11 percent of the Norwegian group’s UK workforce. (http://bit.ly/1WE57E7)
The Independent
* Renewed Western military intervention in Libya has inched closer after the UK government said it would be ready to consider any request from the new government in Tripoli for naval or air support to help dislodge ISIS from its stronghold in the country. (http://ind.pn/23ISmgN)
* The UK has approved 122 military licences to the value of 2.8 billion pounds to Saudi Arabia since the regime started its widely condemned bombing campaign in Yemen last March, it has been revealed. Saudi Arabia is the biggest recipient of UK arms by a significant margin, and since 2010 has received military equipment worth 6.7 billion pounds, according to official government figures collated by Campaign Against Arms Trade (CAAT). (http://ind.pn/1S9nXRl)
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