Macro Links Feb 26th – Bond Short Squeeze Risk
You are viewing the Macro Links delayed archive. The real time Macro Links, posted each trading day, are available via the Mercenary Research Suite. To see how it works, click here.
MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
- FOREX, CARRY TRADES, EXCHANGE RATES
- TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
- GUN CONTROL, MARIJUANA BOOM, PUBLIC POLICY
- TAXATION, WEALTH HAVENS, INEQUALITY
- RUSSIA MEDDLING, RUSSIA PROBE
- NORTH / SOUTH KOREA, IRAN, NUCLEAR WEAPONS
- INFLATION, RATES, DEBT AND CREDIT, BALANCE SHEETS
- VOLATILITY, BLACK SWANS, LIQUIDITY, TAIL RISKS
- MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
- CENTRAL BANKS & MONETARY POLICY
- USA ECONOMY DATA, CITIES AND STATES
- GLOBAL ECONOMY, INTERNATIONAL
- POSITIONING, INFLECTION, MARKET CALLS
- COLOR, EARNINGS, SENTIMENT, VALUATIONS
- DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
- ENERGY NATURAL GAS, COAL
- ENERGY RENEWABLES, NUCLEAR
- POLLUTION, CLIMATE & ENVIRONMENT
- BREXIT, SCOXIT, LONDON, UK ECONOMY
- GEOPOLITICS, CRIME, TERRORISM
- SCANDALS, LAWSUITS, FINES, REGULATORY
- AUTOS, ELECTRIC, SELF-DRIVING
- MEDICAL, PHARMA, BIOTECH
- LUXURY, HIGH END, ASPIRATIONAL
- SCIENCE, NATURE, PSYCHOLOGY
BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
If the bill is adopted, Arizona would become the first state in the U.S. to accept cryptocurrency tax payments by the year of 2020, as stated on the public record. The bill would allow taxpayers of the state to use “a payment gateway, such as Bitcoin, Litecoin or any other cryptocurrency recognized by the department, using electronic peer-to-peer systems.”
The report makes a number of policy recommendations for the development of a regulatory framework for virtual currencies, including advocating that Turkey develop a national cryptocurrency.
Buterin: “I actually personally think that, in general, our governance mechanism as it is de-facto is really not that bad. Probably the main flaw is not so much what the mechanism is, as how we communicate it.”
Taiwanese police have arrested four men after a bitcoin robbery worth five million Taiwanese dollars (approximately $170,000 USD). The case has been described as the first of its kind in Taiwan by authorities.
The Russian Ministry of Finance is not against a national cryptocurrency, provided the state does not participate in it. The creation of a centralized coin, like the cryptoruble, seems impossible, as cryptocurrencies are based on decentralized ledgers, Finance Minister Anton Siluanov told President Putin, according to Russian media.
Bank of America has warned it could face “substantial” costs as it deals with cryptocurrencies, a sign of the potential threat to the world’s largest financial institutions posed by the rise of bitcoin and its alternatives. Only three references were made to cryptocurrencies in a 13,000-word section of the filing late on Thursday that also discussed a wide range of other risks, from Brexit to cyber attacks. Still, BofA’s decision to include the warnings shows how banking executives are taking the bitcoin craze seriously — and are having to acknowledge the possibility, however unlikely, that it will upend their business models.
In its annual report to the Securities and Exchange Commission (SEC) this week, filed Feb. 22, the major US bank for the first time highlights cryptocurrency as an area that may cause it “substantial expenditure” as it tries to remain competitive. “Our inability to adapt our products and services to evolving industry standards and consumer preferences could harm our business,” BoA states in the filing.
The application details that, instead of letting a new block store transactions from its previous one, a data compressing system could be used to pack transactions from multiple blocks into what the patent calls a “data block.” For instance, as the patent application describes, once the system receives a request to compress transactions from block 1 to 1,000, it causes a new data block to be formed and temporarily hosted on a different storage system.
The NBP has admitted to paying a number of YouTubers a sum of about $21,000 in order to dissuade Polish citizens into buying cryptocurrencies for fear of losing all their money. The NBP has called this an ‘educational campaign’, trying to get across the dangers of cryptocurrencies, but it has come across more as a smear campaign which raises questions about the Polish government’s view of cryptocurrencies.
Finland is trying to figure out how to handle the roughly 2,000 Bitcoins authorities in the country have confiscated. Most of the coins have been confiscated in dozens of raids conducted since 2016, according to the customs office in Helsinki. It declined to say how it’s been storing the cryptocurrencies until now.
Austria’s finance ministry is looking at the trading rules for gold and derivatives as inspiration for drawing up regulations on cryptocurrencies for the nation and for the European Union. The goal is to prevent Bitcoin and similar virtual currencies from facilitating money laundering — a crime that’s no stranger to the precious metals business — and to bring trading platforms under the kind of oversight that already exists for financial instruments.
“Cryptocurrencies are significantly gaining importance in the fight against money laundering and terrorism financing,” Finance Minister Hartwig Loeger was quoted as saying. As a result, he went on to say, “We need more trust and security.”
Public records show that the measure submitted on Feb. 21 by senators Michael Williams and Joshua McKoon would, if passed, tweak the rules governing the state’s Department of Revenue, letting it accept both bitcoin and other as-yet-to-be-defined cryptocurrencies.
Describing themselves as ‘world’s first eco-friendly, tangible, waste to energy Blockchain solution,’ 4NEW’s premise is to take waste products and transform them into a usable energy source. This technology has been in adoption for over 70 years with approximately 83 independent waste to energy plants already in use within the US and many more in other countries. This energy can be sold to the national grid, or used to power 4NEW’s own mining farm.
According to local reports, cryptocurrency miners are finding themselves traveling the ‘Oregon Trail’ for cheap and reliable electricity. Terrence Thurber operates the biggest mining operation in the state called Oregonmines in a small town called Dalles. There are roughly 12 more mining operations in the Oregon, and Robert McCullough of Portland General Electric (PGE) says more facilities are on the way.
Venezuela’s president Nicolas Maduro has authorized all savings banks in the country to mine and use the recently launched national cryptocurrency, the petro. Union leaders are outraged by the suggestion, calling the petro a scam, accusing Maduro of abusing his power, and declaring the idea unconstitutional.
A U.S. senator who has previously spoken out against Venezuela’s newly-launched cryptocurrency isn’t done with the issue. Late last month, Senators Bob Menendez (D.-NJ) and Marco Rubio (R.-FL) co-wrote a letter blasting the “petro” and asking the Treasury Department to monitor its progress, as well as offer insight into how the department might work against the token’s use to flout U.S. sanctions.
According to Forklog, the victim, who has not been named, was in the southern district of the Russian capital when a group of muggers stopped him and demanded he transfer his holdings. When he refused, they “mutilated his face with a knife” before he surrendered his collection of around 100 BTC, approximately $1,020,000 at press time, according to the publication.
A secretive Chinese start-up called Bitmain that dominates the bitcoin “mining” industry likely made as much as chipmaker Nvidia did last year, Bernstein analysts estimate. Based on conservative estimates of gross margin of 75 percent and operating margin of 65 percent, the analysts calculate that Bitmain made $3 billion to $4 billion in operating profit in 2017. Bernstein’s U.S. semiconductor team estimates Nvidia’s operation profit was $3 billion during the same period.
The Big Sky Country state of Montana keeps raking them in. For the second time this month, a mining operation is announcing its moving to the Butte area. Power Block Coin LLC is reportedly plunking down a quarter of a billion dollars to upgrade existing facilities to mine the world’s most popular cryptocurrency, bitcoin.
An association of South Korean cryptocurrency exchanges said that it is planning to check if its members are following a set of self-regulatory cryptocurrency measures adopted last year, local journal Yonhap News reported Feb. 21. The Korean Blockchain Industry Association, which is currently comprised of 33 of South Korea’s cryptocurrency exchanges, stated that it is going to carry out evaluations of 21 participants, including major trading platforms Coinone, Bithumb, and Korbit.
Over 34,000 ethereum smart contracts containing $4.4 million in ETH may be vulnerable to exploitation. That’s the conclusion reached by a quintet of researchers hailing from Singapore and the UK. Their technical report, which is currently undergoing peer review, suggests that millions of dollars in ether may be at risk from poorly coded smart contracts that contain a variety of bugs.
FOREX, CARRY TRADES, EXCHANGE RATES
Major currencies were range bound in the second half of the week as neither the Federal Reserve minutes nor the European Central Bank account of their latest meetings provided markets with much direction. But traders may be about to get a clearer narrative.
TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
United States officials have torpedoed a Chinese state-backed group’s plan to buy an American electronics company, signaling the Trump administration’s continuing skepticism toward Chinese investment deals, particularly those that involve transferring technological know-how.
GUN CONTROL, MARIJUANA BOOM, PUBLIC POLICY
The students at Stoneman Douglas aren’t like those who witnessed previous mass shootings at schools such as Columbine High School in 1999 or Virginia Tech in 2007. They’re digital natives, at one with the language and power of smartphones and social media. That is one reason why the movement they started, dubbed #NeverAgain, has become a nationwide phenomenon in barely a few days, and shows signs of becoming the kind of campaign success that a company or politician can only dream of.
While previous mass shootings have sparked calls for legislative change — most notably the murder of 20 small children and six adults at Sandy Hook Elementary School in Newtown, Connecticut, in 2012 — the #NeverAgain movement struck analysts as the first of its kind. “We’ve never seen a group of victims and survivors come together so quickly and be so organised and so savvy,” said Chris Allieri, a public relations expert and founder of the consultancy Mulberry and Astor.
Eight days after mass shooter Nikolas Cruz murdered 17 people inside Marjory Stoneman Douglas High School, Broward’s top cop on Thursday revealed a stunning series of failures by the sheriff’s department. A school campus cop heard the gunfire and rushed to the building but never went inside — instead waiting outside for another four agonizing minutes as Cruz continued the slaughter.
President Trump told the Conservative Political Action Committee on Friday that if Democrats come into power, they will “take away your Second Amendment.” “They’ll take away your Second Amendment,” Trump said. “Remember that.”
Gov. Rick Scott and top state lawmakers proposed on Friday the most significant move toward gun control in Florida in decades, in defiance of the National Rifle Association. Some of their ideas, however, fell short of what student advocates pleaded for after they lost 17 classmates and staff members last week in one of the deadliest school shootings in American history.
The First National Bank of Omaha said it would withdraw its N.R.A. Visa card, and Enterprise said it was ending a discount program for members of the gun-rights group.
A person close to the teenager accused of killing 17 people at a Florida high school warned the FBI she was concerned he would “get into a school and just shoot the place up,” according to a transcript of her call with a bureau tip line operator more than a month before the massacre.
TAXATION, WEALTH HAVENS, INEQUALITY
What is different now is that the US companies with the biggest cash hoards have already been using creative methods to convey offshore money to shareholders. If these same investors pressure companies to raise payouts further, instead of retiring debt, there is a risk that leverage could swell to increasingly risky levels just as bond yields rise.
The unemployment rate for black workers hit its lowest point on record recently. But even a strong labor market has limits in spreading opportunity widely. A tight labor market alone can’t undo a legacy of unequal school funding, residential segregation or the disproportionate rate of incarceration for black Americans. Nor can it reverse the gradual shift of well-paying jobs from inner cities to mostly white suburbs. Studies have found that discrimination in hiring and pay persists even in good economic times, making parity an elusive goal.
RUSSIA MEDDLING, RUSSIA PROBE
Rick Gates, a former top official in President Trump’s campaign, pleaded guilty Friday afternoon to conspiracy and lying to the FBI, striking a deal to cooperate and provide information to special counsel Robert S. Mueller III’s ongoing investigation.
Mr van der Zwaan’s prosecution by Robert Mueller, special counsel, is connected to a report Skadden wrote in 2012 for the Ukrainian government as part of a PR campaign allegedly orchestrated by Mr Manafort. The report continues to haunt the firm six years later.
Kelly has said that starting Friday, the White House will no longer allow some employees with interim security clearances access to top-secret information — a move that could threaten Kushner, a senior adviser to the president whose background investigation has lasted for more than a year. Despite not having a final clearance, Kushner has had a high level of access in the White House and has seen some of the nation’s most sensitive secrets.
NORTH / SOUTH KOREA, IRAN, NUCLEAR WEAPONS
President Trump announced the “heaviest” set of U.S. sanctions against North Korea on Friday as his administration redoubles its efforts to starve Pyongyang of resources and force the isolated regime to abandon its nuclear ambitions. “We imposed today the heaviest sanctions ever imposed on a country before,” Trump said at the close of a wide-ranging address to a conservative political conference.
INFLATION, RATES, DEBT AND CREDIT, BALANCE SHEETS
Despite the brouhaha over wage inflation, the most exposed stock investors seem to be unconvinced it has really returned for now. An index of shares with the highest estimated U.S. labor costs as a percentage of revenues has been outperforming its low labor cost counterpart since the end of last year and has continued to do so even after this month’s correction. This is the opposite of what should happen as wage growth accelerates, according to index designer Goldman Sachs Group Inc.
Treasury Secretary Steven Mnuchin brushed aside signs that investors are nervous about rising prices and criticism that growing debt will harm U.S. economic security, declaring that President Donald Trump’s policies won’t cause inflation. “There are a lot of ways to have the economy grow,” Mnuchin said in an interview aboard a train to Philadelphia on Thursday, where he toured the U.S. Mint. “You can have wage inflation and not necessarily have inflation concerns in general.
Berkshire Hathaway Inc. shareholders will look to Warren Buffett’s annual letter on Saturday for new clues of what the conglomerate plans to do with more than $100 billion in cash. There is little mystery about who is getting that money meanwhile: Uncle Sam. Berkshire has used its mounting cash pile to become one of the world’s largest owners of U.S. Treasury bills after struggling to find big companies to buy in recent years.
Traders are pricing in less than the three quarter-point rate hikes that officials have signaled as likely this year, and the market is still far from the four increases that some economists are predicting. That’s even after minutes from January’s policy meeting released Wednesday showed central bankers see the economic momentum to plow onward with more tightening.
Investors have become so bearish on U.S. government bonds that they risk getting caught out, according to JPMorgan Chase & Co.’s quantitative and derivatives strategy team. Short positioning in Treasury futures has climbed to a record, increasing the potential for an unraveling of trades betting on further declines in bond prices, Marko Kolanovic wrote in a note to clients. There’s also been an extreme swing in sentiment, with investors unduly focusing on higher inflation risks, said Kolanovic, who heads the team in New York.
Many economists continue to point out that the falling US savings rate (chart below) can be explained by higher asset prices (stocks and houses) as well as strong labor markets (second and third charts below). Does this mean that consumer spending growth will remain robust as increasingly “wealthy” households tap their credit cards? What happens if asset prices suddenly take a hit?
VOLATILITY, BLACK SWANS, LIQUIDITY, TAIL RISKS
China’s insurance regulatory agency took control of hard-charging, acquisitive Anbang Insurance, saying the action is needed to avoid a collapse of the firm following suspected illegal activity and the downfall of its once-highflying chairman. Separately, Wu Xiaohui, who led Anbang until he was detained eight months ago, has been indicted on charges of fraudulent fundraising and abusing his position, according to a one-sentence notice by prosecutors in Shanghai on Friday.
Analysts say the government’s treatment of the groups differs depending on their sources of financing, and whether they have co-operated in the government’s campaign to slow capital outflows and cut leverage. “Conglomerates have been borrowing from Chinese banks and making overseas deals and doing deals which do not [create] much benefit for the regime. If things go wrong, the risk is with state-owned banks,” said Ether Yin of consultancy Trivium China.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
He was two years out of high school now, and he didn’t have a job, or a car, or a place of his own, or much money beyond what his mother gave him — nothing at all to occupy his time except a computer that had carried him to the most extreme parts of the Internet, and to beliefs that no one in his family could understand. In the year since the 2016 presidential election, Kam had gone from supporting white supremacists, to joining a neo-Nazi group, to shouting “white lives matter” at a rally, to standing beside Richard Spencer outside the White House, to increasingly tense conversations with his mother and grandmother, both of whom were beginning to fear that what they had once thought was just a phase was quickly becoming his life.
They rose to positions of enormous authority, the president of the United States and the special counsel chosen to investigate him. Yet Robert Swan Mueller III and Donald John Trump, born 22 months apart in New York City, also can seem to come from different planets. One is courtly and crisp, the other blustery and brash. One turned away from the path to greater wealth while the other spent half a century exploring every possible avenue to add to his assets. At pivotal points in their lives, they made sharply divergent choices — as students, as draft-age men facing the dilemma of the Vietnam War, as ambitious alpha males deciding where to focus their energies.
The SEC lawsuit, filed in December, claims that the company, controlled by Mr. Shapiro, sold unregistered securities to an estimated 7,000 retail investors—many of them elderly—who were told their funds would provide secured, short-term real-estate loans. Instead, most of the invested money funded real-estate purchases made by Shapiro-controlled shell companies, from luxury homes in L.A. to vacant lots, court papers allege. Investors collected “interest” checks that were largely funded by money from newer investors, the SEC alleges..
In recent weeks, the Five Star Movement has experienced growing pains as it has sprouted from a protest movement into Italy’s leading political force. The party has faced evidence of plagiarism in its party platform, Free Masons among its members, accusations of domestic abuse and violence against immigrants by its candidates. A reimbursement scandal has dangerously undercut its purist appeal.
CENTRAL BANKS & MONETARY POLICY
Speculation that the US labour market is getting tight enough to trigger higher inflationary pressure has driven speculation in financial markets that the Fed is preparing to accelerate its programme of rate increases. However if the Fed sees scope for further strengthening in the jobs market, it will remain reluctant to stand in the way by tightening policy too aggressively.
“The economic expansion continues to be supported by steady job gains, rising household wealth, favorable consumer sentiment, strong economic growth abroad, and accommodative financial conditions,” the Fed’s Washington-based Board of Governors wrote in its semiannual report to Congress on monetary policy. “Upbeat business sentiment appears to have supported solid growth over the past year.”
USA ECONOMY DATA, CITIES AND STATES
Men in their prime working years have left the labor force at an astonishing rate and they may never return if the state of the U.S. job market holds, according to a new report from the Federal Reserve Bank of Kansas City. A decline in demand for middle-skilled work — a phenomenon dubbed “job polarization,” because more positions are concentrated at the higher and lower ends — has played a role in keeping prime-age men out of the job market, Didem Tuzemen, an economist at the Kansas City Fed, wrote in the paper released this week. Without job polarization, Tuzemen estimated that 1.9 million more prime-age men would have been employed in 2016.
What’s going on? Why are low unemployment, robust business investment and soaring confidence measures not causing faster real wage growth? Basic economics — the theory of supply and demand that every undergraduate learns in their introductory courses — suggests that as labor markets get tighter, real wages should rise. So why is the theory not working? One possible reason is that employers are growing increasingly powerful. A second possibility is that low unemployment is making workers less productive. A third possible reason is simply caution after the long, deep recession.
A split is emerging between the inflation that businesses experience and what consumers expect, but that could soon change. This month consumers said they expected a 2.7% rise in inflation over the next year, a level unchanged since December, according to the University of Michigan’s latest sentiment survey. The Conference Board’s measure of consumer inflation expectations has remained similarly subdued.
GLOBAL ECONOMY, INTERNATIONAL
Germany’s statistics office has said the German state last year logged the highest annual surplus since the country reunited in 1990. The result came on the back of record-low unemployment and low interest rates. The figure marked the fourth annual surplus in a row in Europe’s powerhouse, which no longer has any difficulty sticking to the European budget deficit rules as laid down in the Maastricht Treaty, and which stipulate that governments’ fresh borrowing must not exceed 3 percent of gross domestic product.
POSITIONING, INFLECTION, MARKET CALLS
Investors are piling back into riskier commodity companies amid signs that the sector rout is firmly in the rear-view mirror. Steadier commodity prices and earnings that show plentiful cash balances and strong profits are luring investors at a time when it’s getting trickier to find value in credit.
Investors continued to pull money out of US equity funds despite a rebound in share prices, reflecting concerns that interest rates have room to rise further. Outflows from US equity funds moderated to $2.4bn for the week ending February 21, according to data from EPFR Global, after $6.2bn was withdrawn during the prior week.
COLOR, EARNINGS, SENTIMENT, VALUATIONS
Long-struggling Comstock Mining Inc. may finally have its mother lode. The penny stock gold miner — which hasn’t made an annual profit in 13 years as a public company — is selling a 98-acre patch of land next to the Silver Springs Airport outside Reno, Nevada. Located near Tesla Inc.’s gigafactory, the desert runway is seeing more traffic and attention from developers now that the Elon Musk-led carmaker and tech players Alphabet Inc. and Switch Inc. are building large facilities in the area.
Casino mogul Steve Wynn and his ex-wife have given fresh meaning to the concept of marital bonds. Wynn Resorts Ltd. wants to change terms on some of its bonds to protect the company from being forced to buy back debt as a complicated three-way lawsuit progresses. The court battle in question dates back to 2012 and involves Wynn, who earlier this month resigned from the company he founded amid sexual misconduct allegations; Elaine Wynn, an ex-board member who was divorced from Wynn for the second time in 2010, and their former business partner, Kazuo Okada.
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
Data-sharing business Dropbox Inc on Friday filed for an initial public offering of up to $500 million with the U.S. Securities and Exchange Commission. The amount of money a company says it plans to raise in its first IPO filing is usually a temporary placeholder. The company’s biggest challenge is explaining to Wall Street what differentiates Dropbox from its many competitors, Box Chief Executive Aaron Levie told Reuters on Friday.
Geely has acquired close to 10 per cent of Mercedes-Benz owner Daimler for about $9bn, becoming its largest shareholder in the latest sign of the global ambitions of the Chinese group. The move marks a further push into Europe for the Chinese carmaker, a market Geely hopes to break into in its own right with its all-electric Lynk & Co brand next year.
ENERGY NATURAL GAS, COAL
After a winter in which an unexpected boost in demand from China pushed prices to three-year highs, spot LNG in northeast Asia has plummeted about 30 percent from its mid-January peak. Summer plunges and winter spikes are the order of the day, at least over two years, said Pablo Galante Escobar, head of LNG at Vitol Group, a commodities trading house active in LNG.
ENERGY RENEWABLES, NUCLEAR
The Czech Republic looks set for a confrontation with the European Commission — and its anti-nuclear neighbors — over its ambitions to expand nuclear power. Prague wants to streamline a project to build a new reactor at the Dukovany nuclear power plant, 50 kilometers north of the Austrian border, to replace a Soviet-era reactor. That means persuading Brussels to exempt the project from strict EU rules on government bids.
Massachusetts officials thought they were close to securing future supplies of green energy by piping in hydroelectric power from Canada. But a week after Massachusetts said yes to the $1.6 billion project, neighboring New Hampshire said no, jeopardizing the 192-mile transmission line that would bring in the electricity through the Granite State. The rejection earlier this month marked the latest example of how hard it is to build large energy infrastructure in New England, which is pursuing aggressive renewable power goals and sometimes strains to meet current, pressing electricity needs.
POLLUTION, CLIMATE & ENVIRONMENT
The European media are describing the incoming frigid air as the “beast from the east” since its source region is Siberia. Below-normal temperatures have already crept over much of the continent and will become more deeply entrenched in the coming days — most intensely on Tuesday and Wednesday. “About as cold of an end to February across Europe as you’ll get,” tweeted Mark Vogan, a meteorologist based in Scotland.
Norway is pushing 100 million kroner ($13 million) more to upgrade the Svalbard Global Seed Vault after 10 years of operations. The measures are part of a long-term plan to enhance the performance and extend the viability of the seed vault. The vault, also called the doomsday vault, stores seeds from around the world to ensure conservation and protect genetic material important for food and agriculture.
BREXIT, SCOXIT, LONDON, UK ECONOMY
With the Irish border question a major Brexit stumbling block, some prominent Leavers see the Good Friday Agreement — which will pass its 20th anniversary in April — as a barrier to the type of U.K. exit that they desire. That has led to an unprecedented public broadside against the peace deal from the Brexit wing of British politics.
The president of the European Council has said the British cabinet’s agreement on its EU future relationship is based on “pure illusion”, in the strongest indicator yet that the bloc will not agree to a UK plan to have “managed regulatory” divergence after Brexit. “If the media reports are correct, I am afraid that the UK position on the debate is based on pure illusion. It looks like the cake philosophy is still alive”, said Donald Tusk after a meeting of EU leaders in Brussels on Friday.
The U.K.’s aims for its post-Brexit relationship with the European Union are gradually becoming clearer. Hopes that the financial industry could hang onto “passporting” — the system that opens the markets of 31 nations to firms based in one of them — have withered and died, so the British now are asking for “mutual recognition.” The EU is countering with “equivalence.” It’s a fight over how widely U.K. and EU rules would be able to differ while still keeping the U.K. in a favorable trade arrangement.
GEOPOLITICS, CRIME, TERRORISM
After days of controversy over whether he would blur the lines between American foreign policy and his family’s real-estate business during a trip to India to sell condos, Donald Trump Jr. on Friday abandoned plans to give a policy speech and instead gave an interview with an Indian journalist, sticking to safe topics.
A second Russian athlete has tested positive for a performance-enhancing drug at the Pyeongchang Winter Olympics, a major blow for the nation’s hopes of regaining its Olympic status and drawing a line under years of doping scandals.
The Trump administration plans to officially move the United States Embassy in Israel from Tel Aviv to Jerusalem in May to mark the 70th anniversary of the creation of the state, two American officials said on Friday. The timetable is earlier than the one offered as recently as last month by Vice President Mike Pence, who said during a visit to Israel that the embassy would open by the end of 2019.
The East African nation of Djibouti on Friday seized a container terminal run by one of the world’s largest port operators, as the tiny country seeks to exploit a contest among Middle Eastern rivals to control a region of growing geopolitical and commercial importance.
Saudi Arabia has backed down under pressure from the U.S. and allowed Pakistan to be placed on an international terror-financing watch list, officials from countries involved in the decision said Friday, dealing a blow to the country’s struggling economy.
SCANDALS, LAWSUITS, FINES, REGULATORY
Citigroup is preparing to issue $330 million in refunds after the bank discovered it had overcharged nearly two million credit card accounts on their annual interest rates, a spokeswoman said on Friday. The bank, which has about 150 million credit card accounts, said it caught the error in a routine internal review mandated under federal law. Citigroup said it is had notified regulators about the mistake.
AUTOS, ELECTRIC, SELF-DRIVING
The world’s auto makers are vying to build an affordable electric car to target drivers in emerging economies and potentially create a competitor to Chinese-made vehicles. They need to radically reduce sticker prices for electric vehicles to around $7,000 to entice the average buyer and sell enough cars to have a meaningful impact on emissions.
MEDICAL, PHARMA, BIOTECH
Japan has approved a drug that its maker says can kill the flu virus in 24 hours, paving the way for what health experts believe could be a breakthrough in the way the illness is treated. A late-stage trial showed Xofluza was faster at killing the flu virus than any other available treatment, including Roche AG’s Tamiflu, one of the best flu-fighting drugs on the market. Xofluza, which works differently from existing flu medicines, requires a single dose. Tamiflu, by comparison, is administered in doses over five days.
LUXURY, HIGH END, ASPIRATIONAL
“The Chorus Singers,” worth nearly $1 million, was taken from a museum in Marseille. In a surprising twist, the French authorities confirmed on Friday that the painting had been recovered on Feb. 16 by customs officers randomly searching the luggage compartment of a bus at a highway stop in Ferrières-en-Brie, about 18 miles east of Paris. The officers found the signed painting in a suitcase, but none of the passengers on the bus claimed it as their own.
SCIENCE, NATURE, HISTORY, PSYCHOLOGY
Blood is a very difficult thing to live well on, but a new study of the gut microbes and genomes of vampire bats offer insights into how they do it. Vampire bats had the same general groups of bacteria in their guts as other bats. But when the researchers looked at what the microbes were making and doing, they found big differences. In vampire bats, the microbes looked to be focusing on metabolic tasks like breaking down proteins and producing vitamins that the bats might otherwise lack. That suggests that only by looking at the microbiome and the genome together is it possible to understand how animals with odd diets have made it work.
Though we’ve seen lots of heads on stakes in Game of Thrones and various movies, Kanaljorden is the first time anyone has found evidence in real life that Stone Age people in this area were mounting heads on stakes. And their reasons are not quite what you might imagine.
The Mercenary Trader Macro Links were created by Justice “Jack” Litle, aka Justice Litle / Jack Litle — the founder of Mercenary Trader — to provide a compact summary of daily information flows. They are accessed via the Mercenary Research Suite, the flagship offering of Mercenary Trader, which combines trading education and trading research. To see how it works, click here.