Tag: news

It appears that the long-awaited Article 50 trigger, officially beginning the Brexit process, will take place next Wednesday, March 29, because moments ago a Theresa May spokesman confirmed a report in the UK’s CityAM, reporting that Article 50 will be triggered next Wednesday.

• U.K. TO TRIGGER BREXIT ON MARCH 29, MAY’S SPOKESMAN SAYS
• THERESA MAY WILL TRIGGER ARTICLE 50 NEXT WEDNESDAY: CITYAM

Some more details from Bloomberg:

• U.K. envoy to European Union Tim Barrow informed European Council President Donald Tusk’s office of Brexit trigger date Monday, Prime Minister Theresa May’s spokesman James Slack tells reporters in London.
• Slack says Britain will trigger Article 50 of the Lisbon Treaty, formally starting Brexit process, on March 29, via letter to EU
• Slack: “After we trigger, the 27 will agree their guidelines for negotiations and the Commission’s negotiating mandate”
• Says: “President Tusk has said he expects an initial response within 48 hours. We want negotiations to start promptly”

EU Council president Donald Tusk is now expected to respond formally within 48 hours although the detailed EU negotiating position is not expected to emerge until later in the spring.

David Davis, the UK’s Brexit secretary added that “The Government is clear in its aims: a deal that works for every nation and region of the UK and indeed for all of Europe – a new, positive partnership between the UK and our friends and allies in the European Union.”

As the FT adds, the pre-announcement of the timing of the Article 50 letter is partly aimed at preparing financial markets for the formal start of the Brexit process which will last at least two years.  Downing St has been anxious in recent months to counter the risk that major Brexit announcements are inevitably accompanied by falls in the value of the pound. 

Meanwhile, cable has not reacted to the news, with the pound trading at a three-week high against the dollar at $1.2410 on Monday.

via http://ift.tt/2n5SO8u Tyler Durden

Today at 10am, the directors of the Federal Bureau of Investigation and National Security Agency will break their public silence and give keenly await testimony about their investigations into possible links between Russia and President Donald Trump's campaign at a rare open congressional intelligence committee hearing. They will also be grilled on Trump's explosive allegation that he was wiretapped by his predecessor Barack Obama.

Federal Bureau of Investigation Director James Comey and Mike Rogers of the National Security Agency will speak publicly for the first time about two issues that have riveted the American public for weeks and further divided the country's two ever-at-odds political parties. The stakes for Trump could hardly be higher according to AFP. Representatives Devin Nunes, chairman of the House of Representatives Permanent Select Committee on Intelligence, and Adam Schiff, the panel's top Democrat, have called Comey and Rogers to testify as part of their committee's probe into allegations that Russia meddled in U.S. elections.  Other congressional committees also are investigating the matter, mostly behind closed doors. But amid a furor over whether Moscow tried to influence the 2016 presidential race on Trump's behalf, lawmakers said they would make public as much of their probes as possible.

Trump and his entourage's possible ties with the Russia of President Vladimir Putin have been the subject of much speculation since before he was elected on November 8.

US intelligence agencies in January took the extraordinary step of stating publicly that they had concluded that hackers working for Russia broke into the email accounts of senior Democrats and released embarrassing ones with the aim of helping Trump defeat Hillary Clinton. Even since then, the question of whether Trump and company were or are somehow in cahoots with Russia has dominated the national conversation. A congressional panel so far has found no evidence that Trump's campaign colluded with Russia, its chairman said Sunday.

Based on "everything I have up to this morning — no evidence of collusion," by Trump's team and Moscow, Representative Devin Nunes, chairman of the House Intelligence Committee, told Fox News.

Meanwhile, Moscow has denied involvement in the hacks, and Trump has denounced the tumult over alleged Russia connections as a "total witch hunt."

Monday's hearing was also expected to address a second explosive issue: Trump's accusations that the Obama administration wiretapped his phone at Trump Tower in New York during the campaign. Trump on March 4 tweeted that Obama had "tapped" his phone — a charge that has consumed political debate in the US capital.

Several congressional panels have launched investigations into Russia's alleged interference, including the House and Senate intelligence committees, which have jurisdiction over the nation's 17 intelligence agencies, and the House and Senate judiciary committees. The FBI is also probing Russian interference in the election. The question remains whether the agency has opened a criminal investigation into possible ties between Trump campaign aides and Russian officials.

Monday's hearing promises to be a very public showdown between the FBI and lawmakers, with the national security world certain to watch whether Comey drops a political bombshell. Members of Congress have expressed frustration over what they call the lack of cooperation from the FBI about Russia and Trump's wiretap claim, which Obama and an array of other officials have flatly denied. The issue of wiretapping first surfaced last month, when Trump's national security adviser Michael Flynn was forced to resign after it was revealed he had misled top officials over his contacts with the Russian ambassador to Washington to discuss sanctions Obama had just announced against Russia over the election hacking.

 

Around the same time, The New York Times reported that US intelligence had intercepted calls showing that members of Trump's campaign had repeated contacts with top Russian intelligence officials in the year preceding the election.  Nunes has said that the intelligence committee probe focuses in part on who revealed that Flynn had unreported private contacts with the Russians over the sanctions issue.

Adding to the intrigue, Trump's attorney general Jeff Sessions recused himself from any Russia-related inquiries after it was learned that he had met twice with the Russian ambassador in the months before Trump took office, and had failed to disclose this during his confirmation hearing when asked a question about such contacts and speaking under oath.

Domestically, the controversy over the wiretapping claim has pulled attention away from Trump's effort to push through other key items on his agenda, including the planned repeal of Obama's healthcare law, tax reform and his controversial travel ban. Critics say it has also debased the already coarse tone of political debate in Washington and eroded the president's credibility at home and abroad.

Some of the fallout has been international in scope: The White House was forced to retract a charge repeated last week by its spokesman Sean Spicer suggesting that Britain's intelligence services aided the Obama administration in the alleged wiretap. That claim has strained relations with America's closest ally. Still, as recently as Friday, Trump repeated the claim in an aside during a White House press conference with Angela Merkel. "As far as wiretapping, I guess, by this past administration, at least we have something in common, perhaps," Trump told the German chancellor, referring to a WikiLeaks report in 2015 that the US had monitored calls involving Merkel and her top aides for years.

For those not near a TV, the hearing will be live webcast by C-Span.

via http://ift.tt/2ndrs0D Tyler Durden

Global markets start the week mixed with Asian stocks rising (Japan was closed for holiday), European stocks sliding, weighed down by declines in oil-and-gas shares and banks, and S&P500 futures also down. The dollar fell to a six-week low, falling four days in a row for the first time since early November as G20 leaders scrap a long-standing commitment to reject all forms of trade protectionism, suggesting the “weak Dollar” camp in Trump’s inner circle is winning.

Equities retreated in Europe, Australia and New Zealand, as did S&P 500 Index futures. Japan’s stock market was closed Monday for a holiday. Indexes rose in Hong Kong, Malaysia and Thailand. The Australian 10-year yield resumed a retreat after rising at the end of last week. The yen touched its strongest in three weeks, while the Korean won was the highest in five months. Oil fell for the ninth day in 11.

“European equity markets have started the week with a heavy risk-off sentiment after the G20 communiqué explicitly reflected U.S. intentions to establish trade protectionist measures,” Ipek Ozkardeskaya, senior market analyst at London Capital Group, told Reuters. “As the world’s number one economy is preparing to set significant barriers against the world, investors are increasingly worried,” she said.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose almost 0.4 percent to hit its highest level in more than two years on Monday. As a result, MSCI’s global benchmark equity index was little changed.
On Friday, Wall Street was flat to negative, dragged lower by bank shares that fell along with Treasury yields. Futures on the S&P 500 Index were down 0.1 percent. The underlying gauge rose 0.2 percent last week.  The Stoxx Europe 600 index fell 0.2 percent. The FTSE 100 and Dax index were also both down 0.2 percent. Australia’s S&P/ASX 200 Index and South Korea’s Kospi lost 0.4 percent. The Hang Seng Index advanced 0.8 percent, while the Shanghai Composite Index rose 0.4 percent. New Zealand’s S&P/NZX 50 Index slid 1.4 percent, the most since November, dragged lower by Fletcher Building Ltd., which identified more expected losses in its construction division.

For those readers who missed the weekend’s big news, the G20 omitted a pledge to resist all forms of protectionism in its communique from its meeting in Germany over the weekend. That shift followed hours of wrangling that kept officials in suspense on whether the G-20 would even mention trade, with occasional doubts that a communique might be produced at all.

Despite some modest weakness, global stocks are coming off their best week since January, even as the dollar has slumped 1.7% after the Federal Reserve raised interest rates on March 15 yet didn’t accelerate the timeline for future tightening. The dollar index of its value against a basket of six currencies fell to a six-week low of 100.02 on Monday.  It fell 0.2 percent against the yen before recovering to trade flat on the day at 112.70 yen JPY=D4, while the euro rose 0.3 percent to $1.0770 EUR=.  Citi became the latest major bank to abandon its headline forecast for a fall in the euro to below parity with the dollar, upping its prediction for the single currency over the next six to 12 months to $1.04 from $0.98 previously.

The dollar index of its value against a basket of six currencies fell to a six-week low of 100.02 on Monday. It fell 0.2 percent against the yen before recovering to trade flat on the day at 112.70 yen, while the euro rose 0.3 percent to $1.0770.

Volatility remains low across markets from equities to currencies and fixed-income as investors strive to assess how sustainable the nascent global economic recovery is.  As the chart below shows, following the recent volley of central bnk announcements, FX volatility has tumbled.

The greenback extended its recent decline, with the Bloomberg Dollar Spot Index touching its lowest level since November, pressured by investors who kept the latest bearish trend intact. A Japanese holiday and the previously noted Group-of-20 meeting that left most business unfinished suppressed flows in the major currencies; dropping a reference from the G-20 statement to resist trade protectionism weighed on the dollar, with macro and leveraged accounts adding to shorts positions, according to a London-based trader. Volumes were near the lowest they have been in March, a Europe-based trader noted. The Bloomberg dollar index, the BBDXY dropped, as much as 0.3% to 1223.95, lowest since Nov. 11, before paring decline; investors may look for guidance by speeches by Fed’s Dudley and Yellen expected later this week before meaningfully adjusting their current positioning.

Currency markets will also be focused on a raft of speeches by Fed officials this week, including Chicago’s Charles Evans on Tuesday and Friday, Chair Janet Yellen on Thursday, Dallas’s Robert Kaplan and Minneapolis’s Neel Kashkari on Friday and New York’s William Dudley on Saturday.  “Sentiment towards the dollar has deteriorated significantly,” Societe Generale FX analysts said in a note to clients on Monday.

In rates, the 10-year U.S. Treasury yield has fallen around 10 basis points below 2.50 percent since the Fed raised rates last week for only the third time in over a decade. The gap between two- and 10-year yields has shrunk, meaning the yield curve has flattened. This suggests investors are skeptical growth and inflation will be strong enough to warrant a sustained cycle of rate hikes, and has subsequently weighed on the dollar.

In commodities, oil prices continued their downward trend as OPEC supplies remained steady despite touted cuts and rising U.S. drilling contributed to concerns about a supply glut.  U.S. crude dropped 1% to $48.29 a barrel.  Global benchmark Brent fell 0.7% to $51.40.  The weaker dollar boosted gold which rose 0.4 percent at $1,233 an ounce, after touching a two-week high earlier in the session.

Bulletin Headline summary from RanSquawk

• European equities trade modestly lower so far, with Deutsche Bank weighing on the financial sector has they begin their capital raising
• FX price action has been relatively muted amid light newsflow, while oil trades lower after lEA’s Birol highlighted an increase in US oil output
• Highlights include, Chicago Fed National Activity Index, Bundesbank Report and comments from Fed’s Evans and BoE’s Haldane.

Market Snapshot

• S&P 500 futures down 0.2% to 2,371.00
• MXAP up 0.2% to 148.64
• MXAPJ up 0.4% to 481.53
• Nikkei down 0.4% to 19,521.59
• Topix down 0.4% to 1,565.85
• Hang Seng Index up 0.8% to 24,501.99
• Shanghai Composite up 0.4% to 3,250.81
• Sensex down 0.5% to 29,516.48
• Australia S&P/ASX 200 down 0.4% to 5,778.91
• Kospi down 0.4% to 2,157.01
• STOXX Europe 600 down 0.1% to 377.86
• German 10Y yield rose 0.5 bps to 0.44%
• Euro up 0.3% to 1.0766 per US$
• Brent Futures down 0.4% to $51.58/bbl
• Italian 10Y yield fell 0.9 bps to 2.357%
• Spanish 10Y yield rose 0.5 bps to 1.886%
• Brent Futures down 0.4% to $51.58/bbl
• Gold spot up 0.4% to $1,233.53
• U.S. Dollar Index down 0.2% to 100.15

Top Overnight News via BBG

• German Chancellor Angela Merkel and Japanese Prime Minister Shinzo Abe called for a concerted effort to defend free trade, expanding the list of economic powers joining together to counter the U.S. shift toward protectionism
• Money managers cut bets on rising West Texas Intermediate crude by a record amount during the week ended March 14, while wagers on a further price drop doubled as oil remained below $50 a barrel
• Deutsche Bank to Raise $8.6 Billion After Pricing Share Sale
• Deutsche Bank Says Revenue to Stay ‘Broadly Flat’ This Year
• Cerberus-Backed Albertsons Said to Consider Merger With Sprouts
• Blackstone Venture Acquires $1.4 Billion of Hansteen Properties
• Hansteen Rises to Highest in 10 Years on Blackstone Asset Sale
• Alphapharm Begins Recall of Epipen Auto-Injector in Australia
• Ford’s Lincoln to Offer Its First Hybrid Model in China
• Arconic Reports Multi-Year Deal Supply With Toyota North America
• FDA Investigating Rate of Cardiac Events With Abbott’s BVS
• Cognizant Said to Likely Fire Over 6,000 Employees, ET Now Says

In Asian markets, stocks traded mixed amid a lack of key drivers and with Japanese trade closed for the Spring Equinox public holiday, while ASX 200 (-0.5%) was led lower by telecoms and profit-taking in gold related stocks. China was positive with Hang Seng (+0.7%) the outperformer after a firm liquidity injection of CNY 100bIn by the PBoC and as participants digested earnings releases, while Shanghai Comp. (+0.4%) lagged after Chinese property prices continued to surge with Bejing prices up over 20% Y/Y, which could essentially attract funds away from stocks. Elsewhere, US equity futures were pressured and broke below Friday’s lows, while Nikkei 225 remained shut due to the public holiday. Chinese Property Prices (Feb) Y/Y 11.8% (Prey. 12.2%). PBoC injected CNY 60bIn in 7-day reverse repos, CNY 20bIn in 14-day reverse repos and CNY 20bIn in 28-day reverse repos.

Top Asian News

• Risk Appetite Goes Missing as Asia Starts the Week: Markets Wrap
• Yellen’s Shadow Looms Large Over China Central Bank Policy
• Selling Dollars Is Becoming The New Trump Trade: Markets Live
• Meitu Erases 28% Surge as Shares Seen Volatile Before Earnings
• China Said to Temporarily Suspend Beef Imports From Brazil
• Hong Kong Stocks Extend Weekly Rally as Shenhua Jumps on Payout
• Credit Suisse Co-Head of Asia Cash Equities Lee Said to Leave
• Malaysia Should Improve ‘Fragmented’ Military, Honeywell Says
• Morgan Stanley Said to Lose Second Senior M&A Banker in Asia

European bourses have kicked off the week in tentative fashion with the calendar looking somewhat light. EU bourses are trading with minor losses amid slight weakness in the financial sector with Deutsche Bank commencing their EUR 8bIn capital raising plan, while UBS are set to go on trial in their tax case in France. Elsewhere, Vodafone initially saw telecoms as the only sector in the green after agreeing to merge their Indian unit with Idea Cellular, however with Co. shares paring the initial upside amid suggestions that the merger may struggle to pass through regulatory requirements. Price action in fixed income markets has been somewhat contained with Bunds only modestly lower, with slight underperformance observed in the belly of the curve. Ahead of the French TV debate in the presidential race, OATs had been underperforming for much of the morning with the German/French spread widening the most in 2 weeks.

Top European News

• Deutsche Bank Says DoJ Closed Criminal Inquiry in FX Matter
• Merkel, Abe Call for EU-Japan Deal to Stem Trade Barriers
• Visco Says ECB Could Shorten Break Between QE Exit And Rate Hike
• Atos Denies Worldline Preparing Ingenico Bid, Reuters Says
• Hugo Boss Drops After Report Frere’s GBL Isn’t Shareholder
• Ingenico Rises After La Lettre Report Worldline Preparing Bid
• Troim’s Borr Buys Transocean’s Jack-Up Fleet for $1.35 Billion
• Paris Climate Accord Could Make the World $19 Trillion Richer
• Vodafone, Idea Agree on Merger to Create India Mobile Leader

In currencies, the yen was little changed at 112.74 per dollar as of 8:26 a.m. in London after reaching its strongest since Feb. 28. The euro climbed 0.3 percent to $1.0769, while the Australian and New Zealand dollars rose 0.3 percent and 0.4 percent, respectively. The British pound gained 0.2 percent. The South Korean won jumped 1 percent to its highest since Oct. 20, leading gains in emerging Asian markets. The baht also reached its strongest level since October. The USD-index continues to weakn post the G20 meeting as finance leaders caved into pressure from the US and scrapped a commitment to reject all forms of trade protectionism. As such, the pullback in the greenback has supported its major counterparts, with GBP making a break above 1.2400. Additionally, from a UK stand point reports report have been circulating that PM May’s closest have been calling for a potential snap election on May 4th in order to take seats from the SNP and reduce the likelihood of a second Scottish referendum. Another thing to keep an eye out for will be the French Election TV debate scheduled at 1900GMT, consequently, price action in EUR could be somewhat tame throughout the day, as has been the case so far, with the notable data of the morning coming I the form of Eurozone labour cost index, which was in line with Exp. ECB’s Visco (Dove) said that deflation risk seems to have passed and that the ECB could shorten the time gap between exit from QE and first rate hike.

In commodities, another rise in oil rigs continues to put the pressure on crude prices as WTI looks to test USD 48 to the downside, while lEA’s Birol added to these concerns having noted that he expects a major boom in US oil output and shale gas volumes. Elsewhere, copper will be in focus after labour unions at Chile’s Escondida mine slams new offer from management.  West Texas Intermediate crude slid 0.7 percent to $48.42 a barrel. It has dropped 10 percent this month, heading for the steepest one-month slide since July. Gold rose 0.3 percent to $1,232.97 an ounce, climbing for a fourth day. Base metals fell on the London Metal Exchange, with copper forwards down 0.2 percent and tin retreating 0.3 percent.

US Event Calendar

• 8:30am: Chicago Fed Nat Activity Index, est. 0.03, prior -0.05

* * *

DB’s Jim Reid concludes the overnight wrap

Markets look set to be a little less interesting than my bedroom arrangements this week with perhaps the highlights being lots of Fed speakers, the first televised French Presidential debate tonight and the flash global PMIs on Friday. The Fed speakers will likely reinforce the message from the FOMC but watch for signs of increased confidence in their outlook. The French debates might start to lead to some bigger moves in the polls which have been relatively steady of late. As for the PMIs, volatility has been very subdued in the face of high political uncertainty due to continued strong data, especially survey data so the flash PMIs are often the best real time update of the global economic pulse.

Over the weekend the G-20 meeting ended with the “resist all forms of protectionism” line dropped from the previous communiqué. The US were the stumbling block but it’s still early days in the new Trump administration so for now it seems that markets will wait and see before becoming too scared by the implications. Indeed the more significant meeting may be the G-20 meeting in Hamburg in July by which time some of that uncertainty around the new US administration may have started to clear up. Aside from that the rest of the weekend news has been fairly light. The general view of the meeting between President Trump and Chancellor Merkel was that it was inconclusive with the President also tweeting after that “Germany owes vast sums of money to NATO and the United States must be paid for the powerful, and very expensive, defence it provides to Germany”.

Over in markets there hasn’t been too much a reaction to the weekend headlines with bourses generally mixed in Asia, albeit with fairly modest moves. Indices in China are little changed while the Kospi (-0.52%) and ASX (-0.47%) are down. The Hang Seng (+0.53%) is up however and in doing so has passed the 24,000 level for the first time since 2015. Elsewhere, US equity index futures are down about -0.20% while in FX the USD is a smidgen weaker.

Staying in Asia, there was also some data released in China over with the weekend with the release of the February house prices data. For new homes excluding subsidized housing, prices were reported as rising in 56 out of the 70 major cities which compares to 45 cities in January. It’s worth noting that Beijing’s municipal government on Friday increased the down payment requirement on second homes by 10% in an attempt to cool prices. The maximum length of a mortgage was also cut to 25 years from 30 years.

The relatively quiet start this morning follows Friday’s session in which markets appeared to run out of steam following a packed week. That was certainly the case for equity markets where the S&P 500 closed with a modest -0.13% loss and so capping the weekly return at +0.24%. In Europe the Stoxx 600 did however end +0.16% despite Banks underperforming and so making the weekly return a solid +1.36%. Last week’s winner was EM however with the MSCI EM index rising every day last week, including a +0.25% gain on Friday, to finish +4.26% for the week and the strongest week since July last year.

Meanwhile, over in bond markets and following those Nowotny comments late on Thursday suggesting that the ECB could raise the deposit rate before the main refinancing rate and also prior to QE ending, the front end of the Bund curve saw yields tick higher, with 2y yields up 1.8bps to -0.792% and to the highest since February 6th. 10y and 30y Bund yields on the other hand finished 1.4bps and 3.1bps lower. Our European fixed income strategy team highlighted in their weekly on Friday that the market is now pricing a significant probability of a oneoff hike in the deposit facility rate. They note that a 10bp hike is priced by Jan-18, a 15bp hike by May-18 and a 20bp hike by Aug-18. Indeed they believe that the sequencing of the ECB’s easing decisions since the start of QE suggests that a one-off hike in the deposit rate is likely, however at the same time could present some communication challenges highlighted by the steepening of the money market curve in the recent repricing of the timing of the first 10-20bp move in Eonia rates.

Elsewhere 10y Treasury yields retraced much of the previous day’s move by falling 4bps to 2.501%. The Fed’s Kashkari spoke – who as a reminder was the lone dissenter at the FOMC vote last week – and said that relatively little change in recent data and his belief that the job market slack remains tilted his vote towards favouring not raising rates.

While there wasn’t much particularly going on in markets, Friday was however another busy session for data releases in the US. The most anticipated was the February industrial production report which came in a  little disappointing with production flat during the month versus expectations for a +0.2% mom rise, while capacity utilization also ticked down one-tenth to 75.4%. Manufacturing production did however rise +0.5% mom during the month and matching consensus. Away from that the first look at the March University of Michigan consumer sentiment reading revealed a 1.3pt rise in the headline sentiment reading to 97.6 (vs. 97.0 expected). Most notable in the details was the 3pt rise in the current conditions index to a new high of 114.5. The expectations component on the other hand rose a much more modest 0.2pts to 86.7 while both 1y and 5-10y inflation expectations fell three-tenths each to 2.4% and 2.2% respectively. The other data out on Friday was the conference board’s leading index which rose +0.6% mom in February and the labour market conditions index which strengthened by 1.3 index points in February. All told the Atlanta Fed’s Q1 GDP tracker remains unchanged at 0.9%. That continues to fly in the face of the NY Fed model which, while revised down 0.4% last week, still sits at 2.8%.

Over to this week’s calendar now where, after all the excitement last week, it looks set to be a fair bit quieter this week. The lone data in Europe this morning is PPI in Germany while in the US the only data due is the Chicago Fed national activity index. On Tuesday the early focus is on the UK with both the February CPI/ PPI/RPI prints and also the CBI trends orders data and public sector net borrowing data for last month. In the US we’ll get the current account balance reading. Kicking off Wednesday is Japan where the latest trade data is due. There is nothing of note in Europe on Wednesday while in the US we’ll get the FHFA house price index and February existing home sales. The diary is a bit busier on Thursday with various confidence readings due in France and Germany in the morning along with UK retail sales data for February. Over in the US we will then get new home sales, initial jobless claims and the Kansas City Fed’s manufacturing index. We end the week with what looks set to be the busiest day on Friday. In the morning we will get the flash March manufacturing PMI in Japan before we then get the flash manufacturing, services and composite PMI’s in Europe. France GDP will also be released. In the US we then end with preliminary February durable and capital goods orders and also the flash manufacturing PMI.

Away from the data this week’s Fedspeak consists of Evans this evening, Dudley, George and Mester on Tuesday, Fed Chair Yellen on Thursday along with Kashkari and Kaplan, and then Evans on Friday along with  Bullard. Bundesbank President Weidmann is also due to speak today and the ECB’S Lautenschlaeger on Thursday. The BoJ minutes from the January meeting are due out on Tuesday. Other events worth watching is the live televised debate between the French presidential candidates tonight and also the Euro area finance ministers meeting today, including a discussion on Greece.

via http://ift.tt/2nJk2Ql Tyler Durden

Authored by Don Quijones via WolfStreet.com, 

If the ECB scales back stimulus, banks face even greater risk of collapse. But now there’s a new solution

Events are moving so fast in Europe these days, it’s almost impossible to keep up. While much of the attention is being hogged by political developments, including the election in the Netherlands, Reuters published a report warning that the European banking sector may face even higher bad loan risks if the ECB begins to scale back its monetary stimulus programs, something it has already begun, albeit extremely tentatively.

The total stock of non-performing loans (NPL) in the EU is estimated at over €1 trillion, or 5.4% of total loans, a ratio three times higher than in other major regions of the world.

On a country-by-country basis, things look even scarier. Currently 10 (out of 28) EU countries have an NPL ratio above 10% (orders of magnitude higher than what is generally considered safe). And among Eurozone countries, where the ECB’s monetary policies have direct impact, there are these NPL stalwarts:

• Ireland: 15.8%
• Italy: 16.6%
• Portugal: 19.2%
• Slovenia: 19.7%
• Greece: 46.6%
• Cyprus: 49%

That bears repeating: in Greece and Cyprus, two of the Eurozone’s most bailed out economies, virtually half of all the bank loans are toxic.

Then there’s Italy, whose €350 billion of NPLs account for roughly a third of Europe’s entire bad debt stock. Italy’s government and financial sector have spent the last year and a half failing spectacularly to come up with a solution to the problem. The two “bad bank” funds they created to help clean up the banks’ toxic balance sheets, Atlante I and Atlante II, are the financial equivalent of bringing a butter knife to a machete fight. So underfunded are they, they even strugggled to hold aloft smaller, regional Italian banks like Veneto Banca and Popolare di Vicenza, which are now pleading for a bailout from Rome, which in turn is pleading for clemency from Brussels.

What little funds Atlante I and Atlante II have left are hemorrhaging value as the “assets” they’ve been used to buy up, invariably at prices that were way too high (often at over 40 cents on the euro), continue to deteriorate. The recent decision of Italy’s two biggest banks, Unicredit and Intesa Sao Paolo, to significantly write down their investment in Atlante is almost certain to discourage the private sector from pumping fresh funds into bailing out weaker banks.

Which means someone else must step in, and soon. And that someone is almost certain to be the European taxpayer.

In February ECB Vice President Vitor Constancio called for the creation of a whole new class of government-backed “bad banks” to help buy some of the €1 trillion of bad loans putrefying on bank balance sheets. Constancio’s idea bore a striking resemblance to a formal proposal put forward by the European Banking Authority (EBA) for the creation of a massive EU-wide bad bank that, in the words of EBA president Andrea Enria, would “make it much easier to achieve critical mass and to create a well functioning market for (impaired) assets.”

Here’s how it would work, according to Enria (emphasis added):

The banks would sell their non-performing loans to the asset management company at a price reflecting the real economic value of the loans, which is likely to be below the book value, but above the market price currently prevailing in illiquid markets. So the banks will likely have to take additional losses.

 

The asset manager would then have three years to sell those assets to private investors. There would be a guarantee from the member state of each bank transferring assets to the asset management company, underpinned by warrants on each bank’s equity. This would protect the asset management company from future losses if the final sale price is below the initial transfer price.

One of the biggest advantages of launching an EU-wide bad bank is that it would avoid the sort of public “resistance” that would occur if it was done at a national level, says Enria. Italian lenders would presumably be able to continuing pricing bad loans at or around 40 cents on the euro on average, even though their real value — i.e. the current value priced by the market — is often much lower. The difference between the market price, if any, and the price the banks end up receiving for their bad debt will be covered by Europe’s taxpayers.

If given the green light, the scheme would pave the way to the biggest one-off bail out of European banks in history. It would be Euro-TARP on angel dust, with even fewer checks and balances and much less likelihood of ever recovering taxpayer funds. According to a banker source cited by Reuters, while Germany has not yet endorsed the EBA plan, the EU documents describe the development of a secondary market for NPLs as a priority. According to Enria, the EBA hopes to finalize matters “at the European level” in the Spring.

The documents also include proposals for a wider “restructuring of banking sectors” as states address the NPLs problem. This “could lead to mergers among EU banks after they offload their bad loans,” a banking industry official said.

In other words, EU taxpayers would have to spend potentially hundreds of billions of euros saving yet more banks from the consequences of their own acts and bail out their bondholders and potentially their stockholders too, with funds desperately needed in other areas. Those banks, once saved and their balance sheets cleansed, would then be handed on a platter to much bigger banks. In return, taxpayers would end up with an even more concentrated, consolidated, interconnected financial system that is even more prone to abuse, corruption, and excess.

The ECB’s policy isn’t about creating inflation but about keeping a financial system and a currency union from collapsing upon each other. Read…  ECB Trapped in its Own “Doom Loop” as Inflation Surges

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

Appearing on Meet the Press earlier this morning with the always condescending, well at least if he’s interviewing a Republican guest, Chuck Todd, the Director of the Office of Management and Budget, Mick Mulvaney, said there’s no hope of achieving a balanced budget this year.  Of course, that should hardly come as a surprise to almost anyone other than the suddenly fiscally conservative Chuck Todd. 

“No, we won’t be able to balance the budget this year, but we’re working on trying to get it to balance within the ten-year budget window, which is what Republicans in the House and the Senate have traditionally done the last couple of years.”

A smirking Chuck Todd also pressed Mulvaney regarding his thoughts on raising the debt ceiling with a series of ‘gotcha’ questions:

Todd:  “Debt ceiling.  We hit it on Friday.  Extraordinary measures by the Treasury Secretary will mean a couple more months.  You were a tough nut to crack on the debt ceiling when you were Congressman Mulvaney.  Why should people who were like minded with you who basically said ‘hey look, I’ll give you that debt ceiling but I want real cuts, I want real deficit reduction, I want a real plan.’  I think at one point you said I’ll raise the debt ceiling in exchange for a balanced budget.  You’re not going to be making that ask this time, are you?”

 

Mulvaney:  “I have voted to raise the debt ceiling before as most people in Congress have.  Traditionally, you go back to the 1920’s and 1930’s, the debt ceiling debate has been used to try and step back and say ‘why do we have a deficit problem, why do we have a debt problem and how can we fix it.’  So we’ll be coming forward with ideas to raise the debt ceiling but at the same time try to address some of those long-term reasons that we have the debt in the first place.”

Meanwhile, Mulvaney took a shot of his own saying that Trump’s vision for the budget is consistent with his comments on the presidential campaign trail and that “He’s trying to do something that politicians are not very famous for, which is actually following through on his promises.”

Budget Director Mick Mulvaney isn’t sure when the budget will be balanced — but it won’t be this year, he tells Chuck Todd. #MTP http://pic.twitter.com/e099KRawt9

— Meet the Press (@MeetThePress) March 19, 2017

* * *

For those who missed it, here is our previous summary of Trump initial “skinny budget” proposal:

Today at 7am, Trump released his “skinny budget”, his administration’s first federal budget blueprint revealing the President’s plan to dramatically reduce the size of the government. As previewed last night, the document calls for deep cuts at departments and agencies that would eliminate entire programs and slash the size of the federal workforce. It also proposes a $54 billion increase in defense spending, which the White House says will be offset by the other cuts.

“This is the ‘America First’ budget,” said White House budget director Mick Mulvaney, a former South Carolina congressman who made a name for himself as a spending hawk before Trump plucked him for his Cabinet, adding that “if he said it in the campaign, it’s in the budget.”

In a proposal with many losers, the Environmental Protection Agency and State Department stand out as targets for the biggest spending reductions. Funding would disappear altogether for 19 independent bodies that count on federal money for public broadcasting, the arts and regional issues from Alaska to Appalachia. Trump’s budget outline is a bare-bones plan covering just “discretionary” spending for the 2018 fiscal year starting on Oct. 1. It is the first volley in what is expected to be an intense battle over spending in coming months in Congress, which holds the federal purse strings and seldom approves presidents’ budget plans.

Trump wants to spend $54 billion more on defense, put a down payment on his border wall, and breathe life into a few other campaign promises. His initial budget outline does not incorporate his promise to pour $1 trillion into roads, bridges, airports and other infrastructure projects.  The budget directs several agencies to shift resources toward fighting terrorism and cybercrime, enforcing sanctions, cracking down on illegal immigration and preventing government waste.

The White House has said the infrastructure plan is still to come.

That said, Congress controlled by Trump’s fellow Republicans, is likely to reject some or many of his proposed cuts with some republicans calling the budget “dead on arrival.” Some of the proposed changes, which Democrats will broadly oppose, have been targeted for decades by conservative Republicans. Moderate Republicans have already expressed unease with potential cuts to popular domestic programs such as home-heating subsidies, clean-water projects and job training.

Trump is willing to discuss priorities, said Mulvaney. “The president wants to spend more money on defense, more money securing the border, more money enforcing the laws, and more money on school choice, without adding to the deficit,” Mulvaney told a small group of reporters during a preview on Wednesday. “If they have a different way to accomplish that, we are more than interested in talking to them,” Mulvaney said.

The defense increases are matched by cuts to other programs so as to not increase the $488 billion federal deficit. Mulvaney acknowledged the proposal would likely result in significant cuts to the federal workforce. “You can’t drain the swamp and leave all the people in it,” Mulvaney said.

A visual summary of the proposed budget changes is shown below, courtesy of Reuters:

The biggest losers:

Trump asked Congress to slash the EPA by $2.6 billion or more than 31 percent, and the State Department by more than 28 percent or $10.9 billion. Mulvaney said the “core functions” of those agencies would be preserved. Hit hard would be foreign aid, grants to multilateral development agencies like the World Bank and climate change programs at the United Nations.

Trump wants to get rid of more than 50 EPA programs, end funding for former Democratic President Barack Obama’s signature Clean Power Plan aimed at reducing carbon dioxide emissions, and cut renewable energy research programs at the Energy Department. Regional programs to clean up the Great Lakes and Chesapeake Bay would be sent to the chopping block.

Community development grants at the Housing Department – around since 1974 – were cut in Trump’s budget, along with more than 20 Education Department programs, including some funding program for before- and after- school programs. Anti-poverty grants and a program that helps poor people pay their energy bills would be slashed, as well as a Labor Department program that helps low-income seniors find work.

Long reviled by conservatives, the Internal Revenue Service would get a $239 million cut, despite Treasury Secretary Steven Mnuchin’s request for more funding. The Education Department would receive $1.4 billion to invest in public charter schools and private schools, even as its overall budget is cut by 14 percent. But other numbers appear to contradict some of Trump’s top priorities. One of his campaign pledges was to work to cure diseases, but the National Institutes of Health will reportedly see $5.8 billion slashed from its budget.

Trump calls for a 13 percent cut to the Transportation Department, which would ostensibly play a big role in Trump’s promised infrastructure overhaul. That includes $500 million from the TIGER grant program, which provides funding for road and bridge projects.

Trump’s rural base did not escape cuts. The White House proposed a 21 percent reduction to the Agriculture Department, cutting loans and grants for wastewater, reducing staff in county offices and ending a popular program that helps U.S. farmers donate crops for overseas food aid.

And the winners

White House officials looked at Trump’s campaign speeches and “America First” pledges as they crunched the numbers, Mulvaney said. “We turned those policies into numbers,” he said, explaining how the document mirrored pledges to spend more on the U.S. nuclear weapons arsenal, veterans’ health care, the FBI, and Justice Department efforts to fight drug dealers and violent crime.

The Department of Homeland Security would get a 6.8 percent increase, with more money for extra staff needed to catch, detain and deport illegal immigrants. Trump wants Congress to shell out $1.5 billion for the border wall with Mexico in the current fiscal year – enough for pilot projects to determine the best way to build it – and a further $2.6 billion in fiscal 2018, Mulvaney said.

The estimate of the full cost of the wall will be included in the full budget, expected in mid-May, which will project spending and revenues over 10 years. Trump has vowed Mexico will pay for the border wall, which the Mexican government has flatly said it will not do. The White House has said recently that funding would be kick-started in the United States.

The voluminous budget document will include economic forecasts and Trump’s views on “mandatory entitlements” – big-ticket programs like Social Security and Medicare, which Trump vowed to protect on the campaign trail.

“There is no question this is a hard-power budget,” said Mulvaney. “It is not a soft-power budget.”

The budget requests $1.5 billion to detain and remove undocumented immigrants, and $314 million to hire 500 new Border Patrol officers and 1,000 new Immigration and Customs Enforcement officers.

via http://ift.tt/2nUpO0I Tyler Durden

Authored by Alex Gorka via The Strategic Culture Foundation,

Those who support the idea of globalism and strive for closer European integration believe the results of the Dutch election indicate the tide has been stemmed, with Eurosceptics and «populist» forces on the defensive. The buck stops here. This is the end of domino effect. The reshaping of Europe has been prevented. The pro-NATO, pro-EU establishment elites are to see glory days again.

Is it really so if you get to the bottom of it?

The future of Europe remains to be at stake, including the UK, Germany and France. Will the concept of United Europe exist in one form or another? Will Scotland stay in the United Kingdom? Will Germany and France distance themselves from the United States? Some of these questions could be answered sooner than expected.

This year may become a turning point with the votes to take place in Germany, France and, probably, Italy. In a month, France will have a new president and Germans will have a new parliament elected in September. The example of the Netherlands may have little influence on the votes.

Let’s look at the facts. Geert Wilders’ Party for Freedom made a substantial gain. It won 20 seats (of 150) according to the preliminary results, which is 5 seats more than in the previous election in 2012. The two governing parties got half as many seats as at the last election in 2012. The prime minister’s Party for Freedom and Democracy lost 8 seats and its coalition partner, the Labor Party (PvdA), lost 29 – an impressive defeat!

Actually, it’s a significant loss for those who ruled the country and a big gain (not big enough but still) for the right wing Eurosceptics led by Wilders. Many key points of the Party for Freedom’s program were «borrowed» by PM Mark Rutte’s People's Party for Freedom and Democracy (VVD) and Christian Democrats. The popularity was raised due to the tough stance taken in the conflict with Turkey – something Wilders had been calling for. Actually, Prime Minister Rutte was riding to power on a wave of anti-migrant, anti-Islam sentiments.

The Sybrand Buma's Christian Democratic Appeal (CDA) is all but certain to participate in the next governing coalition with 19 seats won (12, 5%) – an increase of 6 seats. The party has gained ground by adopting a tough line similar to Rutte's on immigration, adding a focus on communal values and a touch of nationalism to tap voter concerns about Dutch identity. It has proposed introducing singing the national anthem in schools and mandatory community service. According to Sybrand Buma, Her Majesty Queen Máxima should renounce her Argentine citizenship (she was born in Buenos Aires). The CDA presence in government would ensure a conservative stamp on any coalition.

Media rarely mention the fact that another right wing anti-EU and anti-migrants party – the Forum for Democracy – took part in its first election to win 2 seats (1,8%) – not a bad start for a party created only in September 2016. It calls for restoring ties with Russia among other things.

The main result is opposite to what it appears to be at first glance. The outcome of the Dutch election conforms to the current trend – Euroscepticism is on the rise across Europe. The winning forces are often called populist but in reality they are anti-establishment movements which emerged as a result of voters being fed up with left or right windbags. People want them gone and the entire political landscape in Europe fundamentally changed.

Socialists have few chances in France and the chances of Angela Merkel becoming Chancellor again are dim enough. Martin Schultz is a serious rival to reckon with.

Newly founded or old anti-establishment parties continue to make gains. Perhaps not today, but they will come to power. In a couple of months Marine Le Pen may become President of France to radically reform European politics. Even if she loses, Le Pen will remain the most popular politician in the country who is able to win the presidential election in 2022. Artificial creations designed by experts for a particular task, like Emmanuel Macron, for instance, can’t stop it. Nothing can prevent the new wave of politicians from coming to power.

The Dutch election has not changed anything. It has failed to turn the tide. The EU continues to fall apart. The European integration will never be the same. More and more EU members challenge the existing pattern.

The March 16 vote in the Netherlands is far from being a harbinger of Eurosceptics’ movements fading away. Quite to the contrary, it has confirmed the trend – the Old Continent is going through changes. We’ll never have the EU we once knew. The process may temporarily slow down but it’s too late to stop it.

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

Two days after Syria claimed it had shot down an Israel jet over its territory on Friday morning, an incident Israel denied even if it admitted violating Syria’s sovereign airspace by engaging in an air raid near Palmyra, the Israeli defense minister threatened to destroy Syrian air defenses after they shot (but allegedly did not down) at Israeli warplanes, which violated Syrian airspace and bombed targets on Syrian soil.

“Next time, if the Syrian aerial defense apparatus acts against our planes, we will destroy it,” Avigdor Lieberman told Israeli Public Radio on Sunday, in a statement which seemed to lend credence to the Syrian contention that it had taken down an Israel jet.

#BREAKING Israeli minister threatens to destroy Syrian air defence systems

— AFP news agency (@AFP) March 19, 2017

It was not exactly clear why Israel was so offended by Syria “acting against” its planes which were located above Syrian airspace at the time of shooting. In any case he warned that “we won’t hesitate. Israel’s security is above everything else; there will be no compromise.”

An Israeli F-15 fighter jet

The minister was referring to the previously reported morning raid of the Israeli Air Force, the latest of several reported over the past few years, in which Israel claimed it targeted weapons bound for the Lebanese militant movement Hezbollah. Israel says it has to protect itself from advanced weapons which the militants try to obtain from the Syrian government. Syria shot surface-to-air S-200 missiles at the Israeli planes as they were flying back from the night mission. As noted above, Damascus claims it shot down one of the planes, although Israel still denies.

The Israeli media said one of the Syrian missiles was intercepted by Israel’s Arrow air defense system. According to RT, it was the first time Israel officials have confirmed combat use of the advanced anti-missiles, which are originally meant to intercept heavy long-range ballistic missiles. The Israeli military is investigating whether the decision to fire Arrow interceptors against the Syrian anti-aircraft missiles was justified, according to Haaretz.

The former prime minister and defense minister, Ehud Barak, said Saturday that the involvement of the system forced Israel to acknowledge cross-border military activity. “It could be that with more thorough thought, it wasn’t worth firing,” Barak said at a community lecture in Be’er Sheva. “We have usually tended to reserve what would be called ‘room for denial’ for Syrian President [Bashar] Assad,” he added.

While Israeli acknowledgment of an intervention in Syria is rare, it is not unprecedented. Last April, Prime Minister Benjamin Netanyahu confirmed for the first time that an attack on dozens of Hezbollah targets in Syria was indeed conducted by Israeli warplanes, as speculated by the media.

And, perhaps to give Syria just the opportunity to “provoke” it, on Monday morning, according to several media reports Israel has again bombed a Hezbollah convoy in Syria. It was unclear as of publication time if Syria had retaliated.

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

Authored by Eric Peters via EricPetersAutos.com,

The press wonders – or pretends to wonder – why it’s held in contempt by more than just a small handful of  people. Maybe the pressies should read what they publish.

The other day, Automotive News published the following:

“Dozens of U.S. cities are willing to buy $10 billion of electric cars and trucks to show skeptical automakers there’s demand for low-emissions vehicles, just as President Trump seeks to review pollution standards the industry opposes.”

This slurry of dishonest or simply idiotic “reporting” is stupendously revealing – all the more so because it is representative of the norm. Where to begin?

Let’s work from the back, since the worst lie – and that is exactly the correct word – squats toward the end of this vile dreck:

“…to review the pollution standards the industry opposes.”

Utter falsehood. I mean, other than the industry opposing part. Which of course is portrayed as all-but-demonic, with sulfurous undertones that practically waft off the page.

The lie worthy of Dr. Goebbels at his best, though, is this business about carbon dioxide being a “pollutant.” In which case – uh oh! – it is time to put giant cones on top of volcanoes and catalytically converting muzzles on cows and for that matter us, too. Carbon dioxide is a “pollutant” in the same way that di-hydrogen monoxide (water) is a “pollutant.”

It does not foul the air. Even slightly.

It does not cause cancer or respiratory problems or acid rain.

Or even acne.

The Automotive News story is despicable because it purveys without comment or qualifier the package-dealing of an inert, non-reactive gas – C02 – with the byproducts of internal combustion engines that do foul the air, contribute to the formation of smog, irritate people’s lungs, create public health problems and cause acid rain.

Those compounds which are pollutants, properly (scientifically) speaking.

Carbon dioxide is a natural constituent component of the atmosphere, like water vapor and nitrogen and oxygen. To characterize C02 as a “pollutant” is either a titanic imbecility or a purposeful attempt to mislead.

It is of a piece with the progagandizing the media performed for the government when it decided it was time to conflate those who (so they said) attacked America on 9/11 with the Iraqi government. You may recall. One minute, it was al Qaeda and the Taliban in Afghanistan. Then – as if a batch fax had been sent to every media organ in the country – it was non-stop Saddam. Just as C02 isn’t a “pollutant,” Saddam didn’t attack America. But the press did its best to purposefully confuse the issue, aiding and abetting a Nuremburg-worthy high crime – aggressive war – that went unpunished. Reichsmarschall Goring is smiling cynically, somewhere above . . . or below.

The new Fake News is that carbon dioxide is something like carbon monoxide, or unburned hydrocarbons, oxides of nitrogen, or particulates – a danger that must be regulated and controlled. Not only is the untrue (see above) but unlike the actually harmful compounds classified (accurately) as pollutants, carbon dioxide can’t be “cleaned up” because of course it’s not “dirty” to begin with. The only thing that can be done – here it comes – is to reduce the volume produced and the only known way to do that is to . . . burn less fuel.

In other words, it’s a fuel efficiency fatwa masquerading as an anti-pollution measure. And the object is not to increase fuel efficiency. It is to reduce the size of engines (and so, cars) and make them expensive – so that fewer people can afford to buy them. This is not spoken of openly, but it is the end goal. It must be; a single fool or demagogue could be dismissed as aberrant; this is systematic, organized.

The government – which is a bunch of people – calculated, drew up ad then decreed (in the waning days of Obama’s presidency, knowing his successor might be  . . . skeptical)  that henceforth carbon dioxide would be considered a ”pollutant.”

The media lapdogged that up. No “excuse me, but…”

Nada.

Just willing, complicit, lazy regurgitation. Or something much worse . . .

The reaction of anyone reading the Automotive News pabulum who is in possession of junior high school-level chemistry knowledge will – rightly – be one of outrage. Unfortunately – deliberately – a working majority of the public is not in possession of junior high school-level knowledge of chemistry.

Next item up for dissection:

“Dozens of U.S. cities are willing to buy $10 billion of electric cars and trucks to show skeptical automakers there’s a demand for low-emissions vehicles.”

God, my teeth ache.

Firstly, it’s not not “dozens of cities” who will be buying these force-produced electric Edsels. It is the taxpayers of these cities who will be forced to buy them (but not own them) via the extorted funds they are compelled to provide, so that government workers can drive around in the electric Edsels.

This isn’t supply and demand, market forces. It is make-work and wealth transfer. To characterize it as “demand for low-emissions vehicles” is another despicable upchuck of putrefying propaganda that depends upon the stupefaction (or enstupidation) of the reader, who will only allow the morsel to pass by if he is utterly in the dark about basic economic laws.

And “low emissions”?

Seriously?

How many times must this be whack-a-moled? Electric vehicles do produce emissions, just not at the tailpipe. Does the source of pollution matter? Or just that it is produced?

Bingo, if you picked the latter.

First of all, the raw materials necessary to make the hundreds of pounds of batteries per electric car are not gently taken from Gaia’s willing bosom – and the batteries themselves are mini-Chernobyls of toxic waste. Oh, but they’ll be recycled! Except when they’re not. What then? Out here in The Woods, decrepit olds cars abound, left to rot in the backyard. The same fate awaits even shiny six figure Teslas. Which – one day – will be paint-blotched old hoopties left to rot – and leak – in someone’s back yard. Only instead of one roughly 45 pound led acid battery leaching into the earf, it’ll be 400-plus pounds of life-unfriendly compounds.

Does anyone care? Shouldn’t “environmentalists”?

Electric cars, by the way, also produce C02. In fact, they produce more “climate changing” C02 than a conventional car. Not at the tailpipe, perhaps.

At the smokestack.

At the “tailpipe” of the coal and oil-fired utility plants that generate the electricity which powers electric cars. If hundreds of thousands – if millions – of these electric cars are put into circulation, the demand on the grid will be great and the output of C02 even higher.

What then?

The press does not ask such questions. Instead:

“Demonstrating demand” . . . so reads the subhead in the Automotive News propaganda piece.

And yes, again, propaganda.

Words matter. Using certain words conveys a certain meaning. People who deal in words professionally know this, instinctively. As the hawk knows how to dive.

“Demonstrating demand” is a statement, as if of fact, that an entirely fictitious and fraudulent thing is the same thing as the real thing.

Government buying things isn’t “demand” anymore than one is a “customer” of the IRS.

Whatever “demand” is created, is artificial – dependent on wealth transfer, on the coercive power of the government. It is the same sort of “demand” that built the Volga canal in Stalin’s Soviet Union.

Automotive News quotes – without comment – a statement made by a Seattle bureaucrat named Chris Bast, who is a “climate and transportation policy adviser” to the city of Seattle:

“If you build it, we will buy it.”

He means: If the government forces car companies to build electric cars, the government will force taxpayers to buy them. This, of course, is not translated thusly.

The loathsome “news” article concludes:

“Tailpipe fumes (my italics) are crucial in the fight to stop global warming.”

The illiteracy is almost as striking as the dishonesty – or the imbecility, you decide which.

Note the conflation – the inert, non-reactive gas (C02) is now a fume. And it is “crucial” in “the fight to stop global warming.”

Not the galloping unchecked assumptions; the blithe acceptance, as of gravitation, of the political “science” of “global warming.”

The awful construction would be enough to make my teeth feel loose. But the oily proselytizing is just too much.

And they ask me why I drink . . . .

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