• Category Archives Politics
  • Oil Bear Market Sends Global Stocks, Yields Sliding; Chinese MSCI Addition Fizzles

    In an eventful overnight session which saw a historic transition in Saudi Arabia, an unexpected Republican victory in the Georgia Special Election, China’s inclusion in the MSCI EM index and Travis Kalanick’s resignation, S&P futures continued to fall, alongside stock markets in Asia and Europe, while oil prices extended their drop despite a larger than expected draw reported by API on Tuesday. The USDJPY continued its recent slide, dropping just shy of 111, while GBPUSD tumbled as low as 1.2589, the lowest since May announced the UK election, only to reverse and recover all gains ahead of the Queen’s speech on Wednesday.
    Despite the much hyped inclusion of 222 mainland Chinese shares in the MSCI EM index starting May 2018, which will by only 0.73% to include Chinese A-shares, the Shanghai composite closed a modest 0.5% higher, as the initial euphoria fizzled following calculations that buying pressure from the MSCI shift would be muted. MSCI estimated the change, due around the middle of next year, would drive inflows of between $17 billion and $18 billion. China’s market cap is roughly $7 trillion.
    The index provider also set out a laundry list of liberalization requirements before it would consider further expansion. “We suspect that it will be a long time before this happens,” wrote analysts at Capital Economics in a note. While China’s weighting in the MSCI Emerging Markets Index may ultimately rise to 40 percent or so, this rise is likely to be slow,” they added. “The upshot is that any initial boost to equities is likely to be small.”

    This post was published at Zero Hedge on Jun 21, 2017.


  • Pound Surges As BOE Chief Economist “Leans Toward” Hiking Rates In 2017

    Here we go again.
    One week after the pound surged following the BOE’s unexpectedly hawkish 5-3 vote split, then tumbled after Mark Carney’s speech yesterday which suggested no rate hike is coming any time soon, today, for the third time in almost as many days, all GBPUSD stops were taken out after BoE Chief Economist, Andy Haldane, surprised the market with unexpectedly hawkish comments in his speech in Yorkshire. He said he was leaning toward joining the hawks on the Monetary Policy Committee and considered a vote for a rate increase as early as June. He also said he favors withdrawing some of the August 2016 stimulus in the second half, and that the partial withdrawal of additional stimulus put in place last year would be ‘prudent relatively soon, provided the data come in broadly as expected in the period ahead.’

    This post was published at Zero Hedge on Jun 21, 2017.


  • “Brexit Is A Lose-Lose” – George Soros Slams Brits’ “False Hopes” As UK Economy Nears “Tipping Point”

    A day after Brexit negotiations officially began, and seemingly unable to get over the result of democracy, George Soros is once again rattling his op-ed sabre, proclaiming the ignorance of British ‘brexit’ voters is about to get its come-uppance…
    Economic reality is beginning to catch up with the false hopes of many Britons.
    One year ago, when a slim majority voted for the United Kingdom’s withdrawal from the European Union, they believed the promises of the popular press, and of the politicians who backed the Leave campaign, that Brexit would not reduce their living standards. Indeed, in the year since, they have managed to maintain those standards by running up household debt.
    This worked for a while, because the increase in household consumption stimulated the economy. But the moment of truth for the UK economy is fast approaching.

    This post was published at Zero Hedge on Jun 21, 2017.


  • Gold Price Slips vs. Falling Dollar as Oil Bounces, Bank of England Split Boosts ‘Brexit-Hit’ Pound

    Gold prices held near 5-week lows against a falling US Dollar on Wednesday, trading at $1243 per ounce as commodities rallied but world stock markets extended Tuesday’s retreat in New York.
    As Brent crude oil rallied $1 per barrel from yesterday’s 7-month lows near $45, that pulled the EuroStoxx 50 index of major European shares more than 1% lower.
    The British Pound meantime rallied after a split emerged amongst senior Bank of England policymakers over holding or raising UK interest rates from the current all-time record low of 0.25% with 435 billion ($550bn) of quantitative easing bond purchases.
    Check out Global Liquidity Reaching a Tipping Point
    The Euro currency also rallied against the Dollar but held 1 cent below last week’s peak, the highest level since Donald Trump won the US presidential election last November.
    The gold price for Eurozone investors fell below 1115 per ounce, near its lowest level since January.

    This post was published at FinancialSense on 06/21/2017.


  • Remember When Ford ‘Cancelled’ That Plant In Mexico? Well, They’ve Just Moved It To China

    Back in January, Trump took a very public victory lap when Ford decided to scrap plans to build a $1.6 billion manufacturing facility in Mexico and invest in its Michigan facilities instead (we discussed it here: Trump Takes Victory Lap After Ford Cancels $1.6 Billion Mexican Expansion Plan As “Vote Of Confidence” In President-Elect).
    "@DanScavino: Ford to scrap Mexico plant, invest in Michigan due to Trump policies"— Donald J. Trump (@realDonaldTrump) January 3, 2017

    This post was published at Zero Hedge on Jun 20, 2017.


  • Coming Apart: The Imperial City At The Brink

    David Stockman routinely refers to President Trump as the ‘Great Disrupter’. But this is not a bad quality, he insists. Rather, it is a necessary one: Stockman argues (my paraphrasing) that Trump represents the outside force, the externality, that tips a ‘world system’ over the brink: It has to tip over the brink, because systems become too ossified, too far out on their ‘branch’ to be able to reform themselves. It does not really matter so much, whether the agency of this tipping process (President Trump in this instance), fully comprehends his pivotal role, or plays it out in an intelligent and subtle way, or in a heavy-handed, and unsubtle manner. Either serve the purpose. And that purpose is to disrupt.
    Why should disruption be somehow a ‘quality’? It is because, during a period when ‘a system’ is coming apart, (history tells us), one can reach a point at which there is no possibility of revival within the old, but still prevailing, system. An externality of some sort – maybe war, or some other calamity or a Trump – is necessary to tip the congealed system ‘over’: thus, the external intrusion can be the catalyst for (often traumatic) transformational change.
    Stockman puts it starkly: ‘the single most important thing to know about the present risk environment [he is pointing here to both the political risk as well as financial risk environment], is that it is extreme, and unprecedented. In essence, the ruling elites and their mainstream media megaphones have arrogantly decided that the 2016 [US Presidential] election was a correctible error’.
    But complacency simply is endemic: ‘The utter fragility of the latest and greatest Fed bubble could not be better proxied than in this astounding fact. To wit, during the last 5,000 trading days (20 years), the VIX (a measure of market volatility) has closed below 10 on just 11 occasions. And 7 of those have been during the last month! … That’s complacency begging to be monkey-hammered’, Stockman says.

    This post was published at Zero Hedge on Jun 20, 2017.


  • Watch Live: Speaker Paul Ryan To Deliver “Major Speech” Calling For Permanent Tax Reform

    The @HouseGOP plan for tax reform will create more jobs & increase wages, putting American workers & families first. — Paul Ryan (@SpeakerRyan) June 20, 2017

    In what is being hailed as a “major speech,” which means just about nothing to ordinary Americans living outside the D. C. bubble, House Speaker Paul Ryan is expected to call for permanent tax reform in 2017 in remarks to be delivered to the National Association of Manufacturers. According to the Washington Examiner, Ryan will report that the GOP intends to introduce and pass a joint tax bill in the fall of this year.
    “We are going to get this done in 2017. We need to get this done in 2017. We cannot let this once-in-a-generation moment slip.”
    “Transformational tax reform can be done, and we are moving forward. Full speed ahead.”
    One component of Ryan’s tax plan, the so-called border adjustment provision, has become very controversial even among his Republican colleagues. It has elicited fierce opposition from retailers and other industries that fear it would result in higher taxes on imported products. In effect, the border adjustment would work by exempting export sales from companies’ taxable income, but disallowing the deduction of the cost of imported goods from taxable income.

    This post was published at Zero Hedge on Jun 20, 2017.


  • Georgia Special Election – Handel Jumps To 5.2 Point Lead With 66% Of Votes Counted

    Update 8 (9:40 EST):
    Handel has now pulled away to a 5.2% lead with roughly 66% of the vote counted.
    Seems that, just like with Hillary, outspending your opponent by 7-to-1 doesn’t really help that much…oops.
    Meanwhile, the Georgia puppetmaster is calmly enjoying the rewards of his latest hacking conquest.

    This post was published at Zero Hedge on Jun 20, 2017.


  • Futures, European Stocks Flat As Oil Suddenly Tumbles; Pound Slides

    Maybe not too much of a surprise to see oil prices fall, given how much the G10 economic surprises index has collapsed in recent weeks. pic.twitter.com/aXkvHOzZMt
    — Jamie McGeever (@ReutersJamie) June 20, 2017

    European stocks were flat after starting off strongly earlier, dragged lower by energy stocks. Asian stocks, U. S. futures little changed as oil tumbled with Brent tumbling as low as $45.85/bbl to the lowest intraday since November 30 and taking out a 38.2% Fib support, after a one-minute spike in volume to a day-high 5,208 lots just after 6am, with WTI mirroring Brent’s momentum, and falling as much as 98c to $43.22, lowest since November 14.
    As Reuters’ Jamie McGeever points out, “maybe not too much of a surprise to see oil prices fall, given how much the G10 economic surprises index has collapsed in recent weeks.”
    The pound sank for a second day, with the GBPUSD tumbling to 1.2661, alongside gilt yields as Britain central bank governor Mark Carney reversed the earlier BOE “vote split” hawkishness and said he is still worried about the impact Brexit will have on the U. K. economy and said he “now is not the time” to raise rates. Sterling weakened against all of its Group-of-10 peers, and gilt yields declined as Carney said that domestic inflation pressures remain subdued. Speaking at London’s Mansion House on Tuesday, he also highlighted the weakness in the economy and the increased uncertainty as the nation formally starts talks to exit the European Union.

    This post was published at Zero Hedge on Jun 20, 2017.


  • Dow Jones News Today: Stocks Flatten as Georgia Votes in Special Election

    The Dow Jones news today features stocks flattening ahead of a special election in Georgia that could signal a moment shift in Washington, just as the Trump tax agenda gets underway. Markets will continue to monitor the airline industry as manufacturers continue to unveil new products and strike deals at the Paris Air Show.
    Here are the numbers from Monday for the Dow, S&P 500, and Nasdaq:

    This post was published at Wall Street Examiner on June 20, 2017.


  • The Fallacies Of The ‘Russia-Truthers’

    The anti-Russia hysteria – now rivaling past Red Scares with Russians hiding under every bed – has led to factual errors in press accounts and has erased standards of political fairness.
    One of the more extraordinary developments since the U. S. presidential election is that the paranoia and the grotesque disregard for facts, evidence and logic that characterized the Trump-inspired ‘birther movement’ can now be reasonably said to characterize the Left’s stance toward Donald J. Trump.
    ***
    There seems to be nothing that Trump opponents will not say and no charge, however low, they will not stoop to making as long as it furthers the goal of removing Trump from office. But, alas, the liberal case against Trump rests upon little more than widely shared fictions and unsubstantiated claims about Trump’s alleged ties to Russia.

    This post was published at Zero Hedge on Jun 18, 2017.


  • The Big Collusion Narrative Keeps Melting Down

    After two days and almost six hours of high-stakes public testimony, I’m struck by the total lack of any compelling claims supporting the ‘big’ collusion narrative, that Russia conspired with Trump or Trump officials to ‘hack’ election.
    ***
    While we certainly aren’t privy to all the relevant information or all the relevant testimony, nothing that James Comey said last week or that Jeff Sessions said this week (much less any of the questions directed his way) contained so much as a meaningful hint that the Committee was on the verge of uncovering the political scandal of the century.

    This post was published at Zero Hedge on Jun 18, 2017.


  • Macron Wins French Parliamentary Majority Amid Record Low Turnout: Live Feed

    Live feed:
    Despite pollsters’ projections of pro-Macron candidates receiving up to 450 seats (in France’s 577-seat lower house), a record low turnout has left Macron with just 360 seats (but still a massive majority) and Le Pen’s National Front with just 6 seats.
    French polling agencies are projecting that President Emmanuel Macron’s new centrist party will have a large majority in the powerful lower house of parliament and a clear mandate to overhaul the way France works and does business. As AP reports, the projections from Sunday’s second-round legislative elections suggest that Macron’s Republic on the Move! party handily beat the traditional left and right parties that have led the National Assembly for decades. The pollsters project that Macron’s candidates and their allies won as many as 360 seats in the 577-seat chamber. That was less than some had expected after its crushing victory in last week’s first-round vote.
    With roughly 130 seats, the Republican party is looking at a better result than initially expected: they become the biggest opposition party albeit significantly weaker according to France24.
    Pollster Kantar Sofres estimates outcome of second and final round of parliamentary election based on sampling of early votes.

    This post was published at Zero Hedge on Jun 18, 2017.


  • Conservatives Prepare “Secret Plot” To Oust UK’s May If She Backs Off “Hard Brexit”

    The walls are closing in on UK’s embattled prime minister Theresa May, who after the disastrous outcome in the general election, and following a torrid week in which she faced fierce criticism for her handling of the Grenfell Tower catastrophe, in which 58 people are now presumed dead, is reportedly facing what the Telegraph calls a “secret plot” – well, not so secret any more – involving a “stalking horse” challenge to remove her as prime minister if she caves to Labour demands, and waters down the “Hard Brexit.”
    With the NYT reporting that “’Soft Brexit’ Forces Rise in Britain on the Eve of Talks” scheduled for Monday, (despite 70% of Britons still supporting Brexit according to a Thursday YouGov poll), the Telegraph reports that according to leading Eurosceptic MPs they are prepared to mount an immediate leadership challenge if Mrs May deviates from her original plan. The British publication adds that “conservative MPs – including Cabinet ministers – have concluded that Mrs May cannot lead them into the next election and they are now discussing when she could go.
    Fearing that the chorus of “soft Brexit” demands rising across the UK following May’s sudden weakness, while Germany’s economy minister Brigitte Zypries going so far as telling Reuters that an outright “reversal of Britain’s decision to leave the European Union would be great,” Eurosceptic MPs have warned that any attempt to keep Britain in the customs union and single market or any leeway for the European Court of Justice to retain an oversight function will trigger an ‘overnight’ coup.

    This post was published at Zero Hedge on Jun 17, 2017.


  • French Parliament Elections Tomorrow June 18th

    Macron was hoping to have a super majority that his new party would sweep the election to give him ultimate power. However, the latest poll taken by BFMTV showed a stunning 61% of French voters did not want the 39-year-old’s party to take the National Assembly. The majority of French voters have said they will vote against Macron’s party to prevent a ‘crushing’ majority in parliament. Most have responded that they would vote for a rival party in the second round in a bid to ‘rectify’ the the decision.
    It is looking more and more that the vote for Macron was not in support of him handing sovereignty to Brussels. The election point overlooked by everyone is the fact that Le Pen beat ALL mainstream parties. There is no mandate for the surrender of rights in France to a new Federalized Europe. The election is this Sunday, June 18th. We will see the results soon.

    This post was published at Armstrong Economics on Jun 17, 2017.


  • The Fate of Britain – Is This Why Cable Goes to Parity?

    We have prepared a very important special report on Britain in the wake of the British election. This special report covers the forecast for the British pound (otherwise known as cable or sterling) against the dollar, euro, and the Japanese yen. Additionally, this covers the long gilts and the share market. We have also addressed the rising tensions once again in Northern Ireland that may reignite violence.

    This post was published at Armstrong Economics on Jun 16, 2017.


  • Bill Blain: “It’s Tough Being A Central Banker”

    By Bill Blain of Mint Partners
    Blain’s Morning Porridge
    ‘Sometimes I’ve believed as many as six impossible things before breakfast.. ‘ * * *
    It’s tough being a Central Banker. The expectation they are doing the right thing lies heavy upon them. We’d like to believe Central Bankers are omnificent celestial beings (because we like the idea of an ordered universe), but the truth is they are as much hostage to the fickle winds of economic destiny as the rest of us. Just when they are guiding us to believe the economy is about to explode, it contracts. Just as they sort out the banks, the economy then votes for collective economic suicide. Just as they think they’ve licked inflation, commodity prices go chaotic.
    The official line on Wednesday’s Federal Reserve meeting is: more hawkish than expected – 3rd hike in 6 months and talking about they will normalise the balance sheet by rolling off assets and capping reinvestment. They expect unemployment to continue improving and remain robust. They are happy with the outlook for consumption and capex.

    This post was published at Zero Hedge on Jun 16, 2017.


  • Mapping Where People Think The Economy Is Rigged The Most (And Least)

    The Brexit vote in Britain and the election of Donald Trump to become President of the United States have shown that there is a deep distrust of the elites in many countries.
    As Statista’s Dyfed Loesche notes, popular anger is directed towards those who are seen to be rigging the economy (or politics) against the hard working common man.
    Just how common this resentment is, if warranted or not, is shown by data provided for by the research institute Ipsos in a recent report.

    This post was published at Zero Hedge on Jun 16, 2017.


  • “It Feels Like America Is Descending Into Chaos…”

    I turned 7 in 1968, and though my memories are necessarily fuzzy, I can still sum up a queasy sense of the chaos that pervaded the year as it streamed out of the 12-inch black-and-white television in our dining room.
    The president announcing he wouldn’t run for re-election. Assassinations, first of Dr. King and then of Bobby Kennedy. Urban riots showing neighborhoods burning along with nightly footage of the war in Vietnam. Massive demonstrations against the war, and Columbia, the university in my neighborhood, shut down by a sit-in.
    The long, hot summer, concluding with Chicago cops clashing with protesters outside the Democratic National Convention. The year 1968 was characterized by violence at home and violence abroad, and a sense that America itself was on fire.

    This post was published at Zero Hedge on Jun 15, 2017.


  • Nike Cutting 2% Of Global Workforce

    In a preview of more pain to come for US, and global, workers, moments ago Nike announced that it will soon be parting ways with approximately 2% of its 70,700 global workforce, or roughly 1,500 employees.
    Nike introduced the Consumer Direct Offense, a new company alignment, resulting in leadership and organizational changes as part of which the company would see an overall reduction in about 2% of the company’s global workforce to “streamline and speed up strategic execution.”
    In addition to the mass layoff, Nike is realigning its regional units as it focuses on driving growth in its most important markets and getting new products to market more quickly. Among the details:
    Cutting product styles by 25%, but will offer deeper selection of key franchises Aiming to cut creation cycle in half to speed new products to market Consumer Direct Offense program under NKE Brand President Trevor Edwards to focus on improving growth in New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul, Milan Sees targeted cities accounting for 80% of projected growth through 2020

    This post was published at Zero Hedge on Jun 15, 2017.