Macro Links Feb 15th – Another Massacre
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- FLORIDA SCHOOL SHOOTING
- BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
- BLOCKCHAIN, FINTECH, DIGITAL PAYMENTS
- FOREX, CARRY TRADES, EXCHANGE RATES
- HEALTHCARE, IMMIGRATION, BUDGET, INFRASTRUCTURE
- TAXATION, WEALTH HAVENS, INEQUALITY
- INFLATION, RATES, DEBT AND CREDIT, BALANCE SHEETS
- VOLATILITY, BLACK SWANS, LIQUIDITY, TAIL RISKS
- MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
- CENTRAL BANKS & MONETARY POLICY
- POT BOOM, MARIJUANA LEGALIZATION, DRUG POLICY
- COLOR, EARNINGS, SENTIMENT, VALUATIONS
- DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
- REAL ESTATE, HOUSING, REITS, COMMERCIAL
- HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
- POLLUTION, CLIMATE & ENVIRONMENT
- BREXIT, SCOXIT, LONDON, UK ECONOMY
- GEOPOLITICS, CRIME, TERRORISM
- PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
- TRUMP WORLD
- ELECTORAL POLITICS
- CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE
- RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
- MEDIA, CABLE, SPORTS, ENTERTAINMENT
- AUTOS, ELECTRIC, SELF-DRIVING
- AEROSPACE, MILITARY & DEFENSE
FLORIDA SCHOOL SHOOTING
Seventeen people were killed in a shooting on Wednesday afternoon at a high school about an hour northwest of Miami, law enforcement officials said. The dead included adults and students. Broward County Sheriff Scott Israel said the suspect is in custody. “This is catastrophic,” he said. “There really are no words.”
Israel, the Broward County Sheriff, described Cruz as a 19-year-old former student who was taken into custody without incident. Cruz had previously been expelled from Marjory Stoneman Douglas High School “for disciplinary reasons.” Cruz used an AR-15 assault-style rifle and had “multiple magazines” on him, according to Israel.
Below are the top 10 career recipients of N.R.A. funding – through donations or spending to benefit the candidate – among both current House and Senate members, along with their statements about the Las Vegas massacre. These representatives have a lot to say about it. All the while, they refuse to do anything to avoid the next massacre.
At press time, residents of the only economically advanced nation in the world where roughly two mass shootings have occurred every month for the past eight years were referring to themselves and their situation as “helpless.”
BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
Billionaire Charles Munger said he detests Bitcoin and wouldn’t have anything to do with the digital currency. “I never considered for one second having anything to do with it. I detested it the moment it was raised,” Munger said Wednesday at the annual meeting for Daily Journal Corp. in Los Angeles. “It’s just disgusting. Bitcoin is noxious poison.”
South Korea’s government gave the strongest signal yet that it will allow cryptocurrency exchanges to keep operating in the country, a welcome development for traders who had feared an outright ban in one of the world’s biggest markets for digital assets.
An increasing number of Hong Kong-based cryptocurrency traders are reportedly turning to U.S.-based bitcoin futures. The shift away from domestic markets has been spurred by a perception that the American futures markets receive greater regulatory oversight than Hong Kong’s unregulated cryptocurrency exchanges.
Malaysia’s central bank, Bank Negara, is set to release a “concept paper,” calling for the public to decide the fate of cryptocurrencies in the country, according to a recent report. Bank Negara governor Muhammad Ibrahim is said to have assured the bank will neither ban nor recognize cryptocurrency, and that the paper will be finalized in February.
Citing Venezuela’s recent introduction of the “petro” cryptocurrency as an example, Sigal Mandelker told the Securities Industry and Financial Markets Association Anti-Money Laundering and Financial Crimes Conference that rogue regimes, terrorists and others use cryptocurrencies to “exploit the financial system,” “hide their ill-gotten gains” and “finance their illicit activities.”
A recent study has revealed Litecoin to be the second most adopted means of payment among dark marketplaces. The study also indicated a significant increase in adoption of Monero among English-speaking platforms.
Cryptocurrency can be lost in a variety of ways, from hacking to forgotten passwords and failed flash drives. But in dollar terms, one of the biggest causes of crypto losses is bad code, and it’s not usually the fault of the coin’s developers. Instead, third parties, including shoddy smart contract developers and shady exchanges, are to blame for losses that have reached half a billion dollars in the last seven months.
It is important to acknowledge that minimal consumption of nonrenewable and expensive electricity is in the interest and benefit of cryptocurrency miners. It is for this particular reason that many miners have relocated to regions like northeastern China, Chile, Norway and Iceland wherein miners can obtain cheap electricity from renewable sources and naturally cool down their facilities with cold climate.
The target of the biggest theft of digital coins in history on Tuesday began allowing yen withdrawals for the first time, triggering the exodus of money. Chief Operating Officer Yusuke Otsuka is still sticking to promises to compensate users, though he wouldn’t go into the root causes of the heist during a hastily arranged briefing in Tokyo.
The plaintiffs’ lawyer, Hiromu Mochizuki, told Reuters that the claim will ask Coincheck to allow the traders to withdraw their crypto into a wallet outside of the exchange, and that a second lawsuit over damages resulting from the hack may be forthcoming.
Some traders have criticized the income brackets chosen by the National Tax Agency, with the top bracket applying to payers with an annual income of 40 million yen (approximately 375,000). By contrast, the top bracket is charged only 20% for income derived from foreign exchange or stock market trading.
Japan’s financial watchdog has stepped up its efforts to scrutinize foreign cryptocurrency services that target domestic investors without a license. According to an official warning published by the Japan’s Finance Service Agency (FSA) on Feb. 13, the regulator said a Macau-based cryptocurrency service firm named Blockchain Laboratory, headed by Jay Liu, has been offering unregistered services related to cryptocurrency trading and initial coin offerings (ICO).
A British Member of the European Parliament (MEP) has called on the City of London and the Bank of England to embrace blockchain technology as a means of staying relevant in the post-Brexit era. Kay Swinburne, who is also the most senior legislator on the EU’s Economic and Monetary Committee, told Business Insider that “the conservative status quo is now too risky with Brexit,” and that the U.K. must embrace distributed ledger technology (DLT) to make its markets more efficient.
BLOCKCHAIN, FINTECH DIGITAL PAYMENTS
Citibank India notified debit card and credit card clients via email on the 13:th of February they would no longer be able to participate in cryptocurrencies such as bitcoin. Citing regional and global concerns from regulators, the over a century old institution is following a growing number of traditional banks in cutting off access to the decentralized currency.
South Africa’s central bank has launched a program that will trial JPMorgan’s Quorum blockchain potential in interbank clearing and settlement. According to an official statement dated Feb. 13, the South African Reserve Bank (SARB) revealed it has established a fintech program that will prioritize, among other things, a project dubbed Khokha to explore a proof-of-concept (PoC) using the tech.
SAMA and Ripple have created a pilot program to provide support to KSA banks to use xCurrent, Ripple’s enterprise software solution that enables banks to instantly settle cross-border payments with end-to-end tracking.
The product, called Coinbase Commerce, can be directly integrated into a merchant’s checkout flow or added as a payment option on an e-commerce platform. Commerce platform Shopify, which was already accepting Bitcoin payments, is one of the first platforms to start using the service, Coinbase said. Other merchants already taking cryptocurrencies are Overstock.com, Expedia Inc. and Microsoft Corp.
Cryptocurrency startup Coinbase said Tuesday that its U.S.-based users won’t be able to add new credit cards as a payment option. Making the announcement through its official blog post on Feb. 13, Coinbase said the platform currently is unable to offer a smooth credit card purchase experience. As a result, it has “disabled adding new credit cards as a payment method for U.S. customers.”
Nas and Snoop Dogg have backed trading application Robinhood, and now legendary rap star Jay-Z has added his imprimatur through a subsidiary, Arrive. Robinhood is already valued at over a billion dollars, closing in on 1.5 billion as of this writing, having recently announced Robinhood Crypto.
FOREX, CARRY TRADES, EXCHANGE RATES
The 75-year-old leader had driven Wall Street to wit’s end in recent years amid ratings downgrades, declining growth and a string of scandals. After surviving multiple attempts by opposition parties to oust him throughout his presidency, he agreed to step down late Wednesday. The rand rallied to its highest level since February 2015, following weeks of maneuvers by the ruling African National Congress to remove him from office.
Dollar bears hardly need more ammunition. Already besieged by brightening outlooks abroad and a Trump administration seemingly intending to jawbone the U.S. currency lower, the greenback is mired in a rout that’s reached 12 percent since the start of 2017. With the U.S.’s combined fiscal and current-account deficit once again approaching 6 percent of gross domestic product, the long-term outlook for the dollar is bleak, according to Mark McCormick, North American Head of FX Strategy at Toronto Dominion Bank.
Iranian authorities have detained almost 100 currency traders and frozen bank accounts reportedly worth 200tn rials ($5.3bn) in the biggest crackdown on foreign exchanges in six years. The operation is aimed at tackling a slide in the value of the rial, which is down more than 10 per cent this year, caused by a dollar shortage that has spooked businesses reliant on hard currencies.
“The FX market has been very surprised by some of the breakdowns in correlations we’ve seen,” Nordvig said in an interview with Bloomberg Television on Feb. 13, noting that the dollar-yen exchange rate has decoupled from U.S. interest rates. “The really big story is that the dollar is tanking.”
HEALTHCARE, IMMIGRATION, BUDGET, INFRASTRUCTURE
A broad bipartisan group of senators reached agreement Wednesday on a narrow rewrite of the nation’s immigration laws that would bolster border security and resolve the fate of the so-called Dreamers, even as President Trump suggested he would veto any plan that does not adhere to his harder-line approach.
President Donald Trump on Wednesday urged senators to vote against any immigration proposal other than his own plan, courting a showdown with Republican and Democratic senators who oppose the White House’s desire to curb family-based migration and would like to cut a narrower deal.
TAXATION, WEALTH HAVENS, INEQUALITY
Managers are betting that by simply putting their carried interest in a single-member LLC — and then electing to have it treated as an S corporation — the profit will qualify for the exemption from the three-year holding period and be taxed at the lower rate. The maneuver by money managers contributed to a 19 percent jump in the number of LLCs incorporated during December in Delaware.
Mnuchin told the Senate Finance Committee that a Bloomberg News story Wednesday, which detailed how hedge funds created scores of shell companies to work around the new carried-profit rules, prompted him to instruct administration officials to issue guidance on the subject within two weeks.
Treasury Secretary Steven Mnuchin said the government will act within two weeks to block a hedge-fund maneuver around part of the new tax law. Hedge-fund managers and others must now hold their investments for three years instead of one to qualify for lower capital-gains tax rates on their share of the profits. That’s a much narrower restriction than lawmakers had previously discussed, but even that change appears porous.
INFLATION, RATES, DEBT AND CREDIT, BALANCE SHEETS
Investor fears of an overheating US economy intensified after the US government reported that consumer prices rose faster in January than most economists had anticipated, the latest sign that long-dormant inflation is on the rise. The inflation figures reinforced sentiment the Federal Reserve may need to press the brakes on the US economy harder than it had previously signalled, sharply ending a decade-long era of easy money.
U.S. consumer prices rose by more than projected in January as apparel costs jumped the most in nearly three decades. The report sent Treasuries and stocks tumbling, as it added to concerns about an inflation pickup that have roiled financial markets this month.
Prices rose more than expected for U.S. consumers last month, offering fresh evidence that a long run of exceptionally low inflation is ending and teeing up the expected first interest-rate increase of the year in March. Fears that rising inflation would prompt the Federal Reserve to pick up the pace of rate increases in 2018 stoked the stock market’s turmoil in recent weeks.
President Xi Jinping is far less tolerant of such profligate spending and fudged data than his predecessors, and he’s in the midst of an historic three-year battle against the systemic financial risks threatening to hinder the economy. So far the focus has been on excessive lending by shadow banks and acquisitive private conglomerates such as the Dalian Wanda Group, whose founder, Wang Jianlin, is China’s fourth-richest executive, and Anbang Insurance Group Co., owner of the Waldorf Astoria New York. Amid pressure from bank regulators, these companies are selling assets at a furious pace.
The disclosure comes months after India’s government injected $32 billion into the sector to deal with bad loans, which by some estimates could be as high as $150 billion. Indian lenders, particularly those controlled by the state, have some of the highest ratios of bad loans in the world, but the government’s cash injection in October was nevertheless considered to be an inadequate step in dealing with the mountain of debt. Analysts have called for larger governance overhauls across the sector.
At the close of a donor conference on Wednesday, Iraq secured only a fraction of the funds urgently needed to rebuild towns and cities demolished during battles against the Islamic State. But American and regional officials nevertheless praised a last-minute rush of pledged investments, loans and guarantees, mostly by neighboring countries.
VOLATILITY, BLACK SWANS, LIQUIDITY, TAIL RISKS
Some of these investors made big, unpublicized wagers seeking to benefit from what had been an unusually long period of low volatility, according to pension-fund consultants and others who deal with these institutions. The strategies, often involving the writing of complicated options contracts, were for years a source of easy money. Markets hadn’t been so calm since the 1950s.
Paul Britton, founder of the $5.9 billion Capstone Investment Advisors, was on his way to his Manhattan office one day last fall when he received unexpected investment advice from his Uber driver. It went like this: “‘There’s this unbelievable company, these guys just crushed it — not sure whether it’s in biotech or a technology business, but they’re up 80 percent this year. It’s this company called XIV,’” Britton, 44, remembered the driver saying. Britton said he responded, “I’m like, ‘I’m sorry to have to tell you this, mate. That’s not a company.’”
Short interest as a percentage of shares outstanding on the SPDR Bloomberg Barclays High Yield Bond ETF, ticker JNK, surged to more than 30 percent Wednesday, according to data from IHS Markit Ltd. That’s about a threefold increase from January and the largest short position in the fund since 2010.
As investors sift through the rubble from last week’s equity rout, a blemish has appeared on what had been one of the hottest trades among quantitative investors — low volatility. The approach ostensibly offered protection from equity gyrations by betting on stocks that have historically swung less than the overall market. But when the S&P 500 Index registered its worst week in two years, exchange-traded funds geared to low volatility sold off nearly as forcefully.
Over the past two years, protections in bond deals used by private equity companies to fund their takeovers have weakened dramatically, according to data from research firm Debt Explained’s “Aggressive Covenant Term Scoring” system. “The deterioration of covenants is really being driven by private equity sponsors and their law firms,” says Thomas Ross, a bond portfolio manager at Janus Henderson. “Often the banks themselves are not actually aware of some of the nastier terms in the deals they are selling.”
Fannie, which has been under government conservatorship since the financial crisis, said Wednesday that its regulator, the Federal Housing Finance Agency, would seek a fresh taxpayer infusion of $3.7 billion from the Treasury Department as a result of the loss. The company is operating with limited capital under the terms of its federal bailout.
Activist investor Carl Icahn and BlackRock founder Larry Fink have clashed over the merits of exchange traded funds, but they agree on one subject: ETFs that use derivatives to juice up returns for investors are a bane. In the wake of the turmoil in US stocks last week — which was deepened by the collapse of two exotic, derivatives-based exchange-traded products — the two have echoed each other in condemning these complex products.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
“The Goldilocks market is completely over,” said Norihiro Fujito, a senior strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo, referring to the sweet spot seen in 2017 of strong economic growth, good corporate earnings and low interest rates. “There’s a high possibility U.S. Treasury yields will rise further. You shouldn’t cherish your good memories of last year.” Japan’s Topix index slipped 0.9 percent Tuesday.
We are following a path that the country hasn’t traveled since World War II, with green economic pastures alongside rivers of red deficit ink. And that combination carries unique risks — not because the numbers are especially large (during the early years of the Obama administration, the deficit regularly exceeded $1 trillion) but because these deficits provide unneeded stimulus, which can overheat an economy already operating near full capacity. And in the process, they drain away funding that might be better reserved for fighting off the next recession.
Employers, educators and policy makers are wrestling with the question of how best to transfer workers’ current skills into digital-ready skills and then rapidly prepare them for new opportunities. Answers are urgently needed. There were 5.8 million open jobs in December, and scant prospects for filling many of them at a time when only 4.1% of Americans in the labor force are out of work.
Big private-equity firms can now behave like old-fashioned investment banks, using their own balance sheets to move quickly, make big bets and earn fees from partners. But as they become more powerful on Wall Street, there are greater risks of conflicts and scrutiny. While firms do well, investors won’t worry too much about their expanded ambitions. It is when things go pear shaped that the complexities will spell trouble.
Within the next few years, Moscow and Beijing could possess “destructive” weapons for use in a potential space conflict, U.S intelligence agencies warned in a report on Tuesday. The two United Nations Security Council members are pursuing “anti-satellite weapons as a means to reduce U.S. and allied military effectiveness,” the report said, reflecting input from organizations including the FBI, the CIA, and the National Security Agency.
A significant increase in mortality starts at 62, according to a new study. The escalation is much more dramatic for men than for women. And the fatal catalyst, the study’s authors believe, might be the availability of Social Security. About one-third of Americans immediately claim Social Security at 62. Ten percent of men retire in the month they turn 62.
Tesla has accomplished something no other automaker can claim: It’s made a relatively affordable electric car, the Model 3, that hundreds of thousands of people are lining up to buy. The only problem is that Elon Musk and company can’t produce enough of them. Sluggish output since the Model 3 launch in July 2017 has frustrated fans and confounded Wall Street. That’s why Bloomberg built its own tool to estimate the number of Model 3s rolling out of the factory in Fremont, California. This projection relies on Vehicle Identification Numbers (VINs), unique strings of digits displayed on every new car sold in the U.S.
Chinese President Xi Jinping has stressed the difficulty of the battle against poverty and the urgency of solving significant problems in poverty alleviation. Xi, also general secretary of the Communist Party of China (CPC) Central Committee, made the remarks Monday at a symposium on poverty alleviation in Chengdu, capital of Sichuan Province in southwest China. As one of China’s “three tough battles,” poverty alleviation is of great significance to the country’s building of a moderately prosperous society in all respects and achieving its first centenary goal, Xi said.
For nearly four centuries, a swath of farming and fishing villages on China’s southeast coast has survived as a stronghold of Catholicism, sometimes flourishing, other times withering, its fate often dependent on decisions or conflicts far away in Beijing or Europe. Now, a new clash is resonating in this rural region, known as Mindong. This time, it centers on talks between China and the Vatican to bridge their historical differences by settling the thorniest issue dividing them: control of the bishops and priests who run the Roman Catholic Church in China.
CENTRAL BANKS & MONETARY POLICY
U.S. consumer prices rose more than expected in January as Americans paid more for gasoline, rental accommodation and healthcare, raising pressure on new Federal Reserve chief Jerome Powell to prevent a possible overheating of the economy. The report from the Labor Department on Wednesday, however, likely overstates the inflation picture given that some of the price gains, especially for apparel and motor vehicle insurance, are seen by economists as unsustainable.
POT BOOM, MARIJUANA LEGALIZATION, DRUG POLICY
With marijuana-centric shows like HBO’s “High Maintenance” and Netflix ’s “Disjointed,” and seemingly constant references to the drug on other mainstream television series, it would seem the time is right for a channel devoted to those who like to get high. But as entrepreneurs Dan Goman and Alex Nahai are learning with 420TV, their Beverly Hills, Calif.-based video-on-demand and streaming service, there are hurdles upon hurdles when it comes to cannabis content.
COLOR, EARNINGS, SENTIMENT, VALUATIONS
Under Dennis Muilenburg, who took over as chief executive officer in 2015, Boeing has turned unapologetically hard-nosed. Even amid the greatest sales boom in aviation history, he’s insisting suppliers cut prices—while he angles to take over their most lucrative repair and maintenance work. This cost initiative is called Partnering for Success; some of its targets call it Pilfering from Suppliers.
Cisco Systems Inc., which makes machinery that carries most of the world’s internet data, gave a bullish forecast for sales and profit, indicating companies are spending to upgrade their computer infrastructure.
Warren Buffett’s Berkshire Hathaway Inc. sold almost its entire stake in International Business Machines Corp. while adding to a holding in Apple Inc. and taking a new position in Teva Pharmaceutical Industries Ltd.
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
Bunge has revealed an exceptionally weak finish to 2017, with results that will intensify questions over the future of the 200-year-old global agricultural trading house as an independent company.
REAL ESTATE, HOUSING, REITS, COMMERCIAL
For many funds, financial institutions, and wealthy individuals, the perception is that the world’s financial centers are the places to be. After all, world-class cities like New York, London, and Hong Kong will never go out of style, and their extremely robust and high-density city centers limit the supply of quality assets to buy. But what happens when too many people pile into a “safe” asset? According to UBS, certain cities have seen prices rise at rates that are potentially not sustainable – and eight of these financial centers are at risk of having real estate bubbles that could eventually deflate.
HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
“The goal is the same, making money,” says Joseph Perella, the co-founder of Perella Weinberg Partners, the New York investment bank. “[But] there are more players in the activism space now and more importantly, they are much more institutional than back when activism was getting started in the 1980s.”
POLLUTION, CLIMATE & ENVIRONMENT
This acceleration, driven mainly by increased melting in Greenland and Antarctica, has the potential to double the total sea level rise projected by 2100 when compared to projections that assume a constant rate of sea level rise, according to lead author Steve Nerem. Nerem is a professor of Aerospace Engineering Sciences at the University of Colorado Boulder, a fellow at Colorado’s Cooperative Institute for Research in Environmental Sciences (CIRES), and a member of NASA’s Sea Level Change team.
BREXIT, SCOXIT, LONDON, UK ECONOMY
In the last 20 years, relations between the U.K. and Ireland have been the strongest in their long and troubled history. Now Brexit has badly damaged this vital bilateral relationship, while the challenges it raises on the island of Ireland threaten to disrupt the Brexit negotiations.
British Foreign Secretary Boris Johnson called for the U.K. to make a definitive break from the European Union, rejecting the notion of a second Brexit referendum and extolling the country’s global economic potential once it is free of the bloc. “Brexit is about re-engaging this country with its global identity and all the energy that can flow from that,” Mr. Johnson said in a speech, the first of several by cabinet ministers laying out Britain’s plans for leaving the EU. He acknowledged there had been “a hardening of the mood, a deepening of the anger” over Brexit, but that the public should embrace it rather than fear it.
GEOPOLITICS, CRIME, TERRORISM
Britain has outlined plans to sail a warship through contested Asian waters next month in a mission aimed at asserting maritime freedom of navigation rights at a time of tension between China and the US. The naval operation in the South China Sea will be conducted by HMS Sutherland, an anti-submarine frigate that is en route to Australia, Gavin Williamson, UK defence secretary, said on Tuesday during a visit to Sydney.
A deal to end 13 months of stalemate in Northern Ireland has fallen apart after the Democratic Unionists said there was “no current prospect” of settling divisions over the Irish language that have held back restoration of the region’s power-sharing government.
Russia is accelerating a military buildup on islands claimed by Japan, threatening to blow a hole in Prime Minister Shinzo Abe’s efforts to lure President Vladimir Putin into settling the dispute. The government in Tokyo lodged a formal protest after 2,000 Russian troops held military exercises last week on the four islands, called the Southern Kurils in Russia and the Northern Territories in Japan. A few days before, Russia paved the way for its first military airbase in the area.
The United States has indicated that it will seek to place Pakistan on a watch list of countries that are not doing enough to counter terrorism financing, threatening Islamabad with global isolation, according to a senior Pakistani official. Pakistan was on the list from 2012 to 2015, and officials worry that being added again could hinder the country’s access to international markets as it prepares to repay roughly $3 billion in debt this summer.
PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
The heads of six major US intelligence agencies have warned that American citizens shouldn’t use products and services made by Chinese tech giants Huawei and ZTE. According to a report from CNBC, the intelligence chiefs made the recommendation during a Senate Intelligence Committee hearing on Tuesday. The group included the heads of the FBI, the CIA, the NSA, and the director of national intelligence.
“Neither the Trump Organization nor the Trump campaign was a party to the transaction with Ms. Clifford, and neither reimbursed me for the payment, either directly or indirectly,” Mr. Cohen said in a statement to The New York Times. “The payment to Ms. Clifford was lawful, and was not a campaign contribution or a campaign expenditure by anyone.”
Stormy Daniels, the porn star whom Donald Trump’s attorney acknowledges paying $130,000 just before Election Day, believes she is now free to discuss an alleged sexual encounter with the man who is now president, her manager told The Associated Press Wednesday.
A senior official on the National Economic Council says he resigned on Tuesday after being informed that he would not receive a permanent security clearance, as the White House faces increasing scrutiny over the number of high-ranking officials allowed to work on interim clearances.
“I am totally opposed to domestic violence, and everyone here knows that,” Mr. Trump said, speaking in the Oval Office in a meeting with lawmakers and business leaders on tax reform. “I am totally opposed to domestic violence of any kind. Everybody knows that, and it almost wouldn’t even have to be said.”
A Congressional committee is investigating the departure of Rob Porter, a top White House aide who was allowed to remain in a critical Oval Office position for months despite claims of abuse from his two former wives. Trey Gowdy, the Republican head of the House oversight committee, has asked the White House to explain why Mr Porter was allowed to maintain an interim security clearance to serve as staff secretary, a position that gave him access to the most sensitive secrets in the US government, until he was forced to resign last week.
From rushing out ill-prepared executive orders to arguing over the president’s Twitter fixation, Mr. Priebus struggled as none of his predecessors had before. However arduous his tenure looked from the outside, he said it was even more so on the inside. “Take everything you’ve heard and multiply it by 50,” he said. Working for Mr. Trump, he added, was “like riding the strongest and most independent horse” one could imagine.
An unapologetic Mr Zuma said he would leave office with immediate effect despite disagreeing with the ANC’s order for him to resign, which it had been preparing to back up with a no-confidence vote in parliament on Thursday. “No life should be lost in my name. I have come to the decision to resign with immediate effect, even though I disagree with the leadership of my organisation,” Mr Zuma said.
For some, the party will never fully recover its legitimacy after the Zuma era. Appropriately for a man accused of destroying the ANC’s place as a revered liberation movement — it fell to the foundation that preserves Nelson Mandela’s legacy to sum up Mr Zuma’s rule this month. “Systematic looting by patronage networks linked to President Zuma have betrayed the country Nelson Mandela dreamt of as he took his first steps of freedom 28 years ago,” the foundation said. “We call on the state to hold him accountable for his actions — some things cannot be pardoned.”
Those who know Mr Netanyahu say Tuesday’s speech on television was a classic response from Israel’s pugnacious political survivor as he prepares for what could be the biggest battle of his career. He delivered the tirade against his accusers and critics minutes before police recommended his indictment in two long-running probes into nearly $300,000 in gifts to the prime minister and his wife, as well as an alleged deal with a newspaper publisher.
Morgan Tsvangirai, the Zimbabwe opposition leader, died on Wednesday after a long battle with cancer, casting his Movement for Democratic Change (MDC) party into the unknown less than three months after the army ousted Robert Mugabe, the long-time ruler.
Like any good compromise, the proposed coalition deal for a new German government has left just about everyone unhappy. But in the week since the agreement was announced, bubbling dissatisfaction has reached a boil. Chancellor Angela Merkel appeared on national television trying to quell a mutiny in her ranks over the new “grand coalition” between her conservative alliance and the center-left Social Democrats. Martin Schulz, the Social Democratic leader, was forced to hand over the reins of his party. At this stage, it is hard to tell which side feels most aggrieved.
CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE
Starting on Thursday, Google’s Chrome browser will block certain types of online advertisements, a change Google is describing as user friendly. But some in the industry say the ad giant’s move is self-serving, and they contend Google overly influenced the process that selected which ad types to block.
RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
The family-run company has been investing heavily as it tries to outrun the forces battering the industry. It is revamping some of its 122 department stores and spending more than $500 million to gain a toehold in Manhattan. It has snapped up e-commerce companies including flash-sale website HauteLook and subscription service Trunk Club. And it has launched new concepts, including a store in Los Angeles called Nordstrom Local that doesn’t stock any clothes. So far, those efforts have failed to pay off in rising profits.
MEDIA, CABLE, SPORTS, ENTERTAINMENT
On Tuesday night, Netflix announced that it had poached the hit-making producer Ryan Murphy from 21st Century Fox. The five-year deal is worth as much as $300 million, according to two people with knowledge of the deal, who spoke on the condition of anonymity to discuss private negotiations. That would be one of the biggest deals ever made for a television producer.
AUTOS, ELECTRIC, SELF-DRIVING
The former RAF base’s current inhabitant, Dyson, is embarking on its own adventure fraught with peril: a £2bn project to develop and build electric cars from scratch. The £2bn gamble is the appliance maker’s boldest move yet; one that will either grow to define the brand as it dwarfs its other products that range from vacuum cleaners to hair dryers, or drain its resources and potentially plunge it into oblivion.
AEROSPACE, MILITARY & DEFENSE
Elon Musk’s SpaceX moved closer to another orbital frontier as regulators advanced its application to launch a low-orbit constellation of satellites and join a jostling field of operators trying to cash in on broadband service from space.
SpaceX fans still flying high from last week’s Falcon Heavy rocket launch may want to mark their calendars for June. The U.S. Air Force is targeting that month for its Space Test Program 2 mission, or STP-2, a spokeswoman for the Space and Missile Systems Center said in an email. The launch can take place before SpaceX’s more powerful rocket is certified by the military because the mission is considered experimental. Falcon Heavy will eventually have to complete the validation process to carry out national security launches.
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