Macro Links Jan 26th – He Tried to Fire Mueller in June

Macro Links Jan 26th – He Tried to Fire Mueller in June

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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)

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DOOMSDAY CLOCK, SOROS

Doomsday Clock Is Set at 2 Minutes to Midnight, Closest Since 1950s – The New York Times

The Doomsday Clock, a potent symbol of scientific concerns about humanity’s possible annihilation, was advanced by 30 seconds on Thursday, to 2 minutes to midnight, the Bulletin of the Atomic Scientists announced in Washington.

Doomsday Clock moved to just 2min to ‘apocalypse’ – BBC News

The Bulletin of the Atomic Scientists (BAS) said it had acted because the world was becoming “more dangerous”. The clock is a metaphor for how close mankind is to destroying the Earth. It is now the closest to the apocalypse it has been since 1953.

George Soros Says Trump Administration Is ‘Danger to the World’ – Bloomberg

George Soros said President Donald Trump is risking a nuclear war with North Korea and predicts that the groundswell of opposition he’s generated will be his downfall. “I consider the Trump administration a danger to the world,” the billionaire investor said in a speech from Davos, Switzerland. “But I regard it as a purely temporary phenomenon that will disappear in 2020, or even sooner.” He expects a Democratic “landslide” in the 2018 elections.

George Soros Just Launched A Scathing Attack On Google And Facebook – Buzzfeed

“They claim they are merely distributing information. But the fact that they are near- monopoly distributors makes them public utilities and should subject them to more stringent regulations, aimed at preserving competition, innovation, and fair and open universal access,” he said. Soros also compared the companies to casinos, saying they “deliberately engineer addiction to the services they provide.”

Soros Says Google, Facebook Are Near-Monopolies That Spur Addiction – Bloomberg

George Soros struck at social media giants Facebook Inc. and Google, declaring them monopolies that foster addiction, threaten independent thinking and risk empowering state-sponsored surveillance.

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BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS

Stock trading app Robinhood to roll out bitcoin, ethereum trading – CNBC

Stock trading app Robinhood is becoming a cryptocurrency broker. Customers in California, Massachusetts, Missouri, Montana and New Hampshire will be able to trade bitcoin and ethereum through the app beginning in February, Robinhood announced Thursday. In the meantime, all customers can now track prices and receive alerts for 16 cryptocurrencies on the app.

Robinhood adds zero-fee cryptocurrency trading and tracking | TechCrunch

“We’re planning to operate this business on a break-even basis and we don’t plan to profit from it for the foreseeable future” says Robinhood co-founder Vlad Tenev. “The value of Robinhood Crypto is in growing our customer base and better serving our existing customers.”

Robinhood’s Fine Print on Free Bitcoin Trades Is a Big Buzzkill – Bloomberg

Robinhood Financial LLC’s fine print is a real buzzkill. “Trading in cryptocurrencies comes with significant risks, including volatile market price swings or flash crashes, market manipulation and cybersecurity risks.” The warning hasn’t deterred the 150,000 people who signed up within a few hours to get early access to these new trading privileges.

Switzerland embraces cryptocurrency culture – FT

The burgeoning ICO industry is burnishing Switzerland’s business friendly reputation and sometimes buccaneering spirit — a reputation spoilt by the past decade’s scandals over the help its traditional private banks gave to wealthy clients in evading tax. But it has created a dilemma for Swiss politicians and regulators: just how far should they go in encouraging a digital “wild west”?

Bitcoin Is Taking Growing Regulatory Scrutiny, From Some, in Stride – Bloomberg

Bitcoin, infamous for its volatility, is standing strong in the face of the latest round of scrutiny cascading down from global leaders in Davos. Their words did little to shake Bitcoin. The digital currency was little changed and traded near the $11,000 level its been hovering around for days.

Bitcoin Takes the Stage at Davos in Currency Panel Debate – CoinDesk

Cryptocurrencies took the stage Thursday at the World Economic Forum (WEF) in Davos, Switzerland, with the global elite event featuring a discussion that centered primarily on the question of whether bitcoin is a currency.

Bitcoin Won’t Cause Lehman-Style Meltdown, Says MAS Fintech Chief – CoinDesk

The fintech chief at the Monetary Authority of Singapore (MAS), the country’s de facto central bank, has said that bitcoin is unlikely to cause a global financial meltdown similar to the Lehman Brothers bankruptcy in 2008.

Bitcoin’s About to Get Easier for Wall Street Pros to Trade – Bloomberg

Trading Technologies International Inc., whose products let traders buy and sell on major exchanges, plans to add the cryptocurrency marketplace Coinbase Inc. to its roster of venues in March, according to a statement on Thursday.

Brisbane Airport to Introduce Bitcoin Payments – Bitcoin News

Air travelers will soon be able to spend some satoshis in stores and cafes at Brisbane Airport. Major retailers will be accepting several cryptocurrencies, including bitcoin. The promise: “unprecedented digital currency experience” in the airport terminals.

May Says She’ll Look ‘Very Seriously’ at Action on Bitcoin – Bloomberg

U.K. Prime Minister Theresa May has promised to consider clamping down on Bitcoin as she raised concerns that cryptocurrencies are being used by criminals.

Bank Bans ‘Not Surprising’ Given Bitcoin Risks, Sweden Says – Bloomberg

As Nordea Bank AB’s Bitcoin ban for staff has unions questioning the legality of the move, Sweden’s minister in charge of financial legislation says it’s understandable that the industry is resorting to such measures.

Bank of America, Citigroup reviewing the use of credit cards to buy bitcoin – CNBC

Bank of America and Citigroup are reviewing policies that allow customers to buy bitcoin with credit cards. The reviews follow news about two weeks ago that Capital One Financial has decided to prohibit cryptocurrency purchases.

Even With Energy Surplus, Canada Unable to Meet Electricity Demands of Bitcoin Miners | Cointelegraph

Ironically, Hydro Quebec may have to renege on its commercial power strategy – as forecasts show that they would not be able to meet the booming demand of industries looking to take advantage of the energy surplus in the province. The company is reviewing its plans after 70 cryptocurrency mining operators applied to set up shop in the province in the space of the week.

Investors File Class Action Lawsuit Against Bitconnect Following Its Shutdown | Cointelegraph

Former BitConnect investors have filed a class action lawsuit Wednesday, Jan. 24, seeking compensation from the company that was found out to be a Ponzi scheme and has shut down on Jan. 17. The class action complaint states that BitConnect issued cryptocurrency tokens that were actually unregistered securities and collected additional funds via a “wide-ranging Ponzi scheme.”

Silicon Valley investors line up to back Telegram ICO – FT

Some of Silicon Valley’s leading investors are lining up to buy into a much-hyped initial coin offering by Telegram, the encrypted messaging service that is seeking $1.2bn to build a virtual economy within its app. Venture capital firms Kleiner Perkins Caufield & Byers, Benchmark and Sequoia Capital have each told the company they want to invest $20m, according to three people with knowledge of the deals.

Cryptocurrency Scammers Are Running Wild On Telegram – Buzzfeed

Messaging app Telegram started out as a WhatsApp alternative, but it’s fast becoming a petri dish for cryptocurrency get-rich-quick schemes, propped up by dubious trading bots and bogus celebrity endorsements from Christopher Walken and Dwayne “The Rock” Johnson. That may be a problem as it heads toward a possible billion-dollar initial coin offering.

Russian Bill Draft Requires Gov’t Officials To Declare Crypto Assets | Cointelegraph

In a recent interview with the Russian news outlet Gazeta, the chairman of the State Duma Committee on Financial Markets, Anatoly Aksakov stated that the current draft of Russian cryptocurrency bill requires government officials to declare their cryptocurrency investments.

Estimate: Crypto Investments in Russia Reached $200 Million Last Year – Bitcoin News

Cryptocurrency investments in Russian startups have increased 10 times in 2017 when entrepreneurs set in motion more than 100 crypto-funded projects.

Oil Company Wants to Sell Bitcoin ATMs to Casinos, Stock Jumps 60% – Bitcoin News

Despite the warnings of the Israeli regulator that it won’t tolerate bitcoin to get somehow backdoor listed on the Tel Aviv Stock Exchange, public companies keep pivoting into the field. The latest example is a firm that focused on oil refineries until now. All of a sudden it announced plans to sell bitcoin ATMs to casinos in Turkish occupied Northern Cyprus, and possibly Nigeria.

Ripple Wants XRP to Be Bitcoin for Banks. If Only the Banks Wanted It – Bloomberg

The problem is that banks say they have no interest in using XRP. Current and former executives at seven global banks—some of whom have partnered with Ripple—say there was scant chance they would ever entrust their corporate clients’ payments to a cryptocurrency. The executives requested anonymity.

Analysts and Bullion Dealers Notice a Relationship Between Gold and Bitcoin – Bitcoin News

Financial executives and researchers believe bitcoin and gold have an interesting relationship. Over the past year, cryptocurrencies spiked while gold markets slumped, and when gold prices jumped, digital assets dropped in value.

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FINTECH, BLOCKCHAIN, DIGITAL PAYMENTS

Lawmaker Says ‘Tennessee Is Ready for Blockchain’ at Bill Hearing – CoinDesk

A bill to recognize blockchain signatures as legal electronics records could move swiftly through Tennessee’s legislature, lawmakers suggested during a hearing on Wednesday.

Short Sellers Set Sights on Stocks Riding the Blockchain Bandwagon – Bloomberg

Companies that sought to piggyback on the frenzy surrounding digital currencies are starting to find themselves saddled with the kind of attention they didn’t anticipate. In a portfolio of 34 crypto-tied stocks, short interest as a percent of shares outstanding has skyrocketed, according to data compiled by Bloomberg.

SoFi’s Incoming CEO Brings IPO Experience to a Troubled FinTech – Bloomberg

Noto, who worked on technology, media and telecom deals at Goldman Sachs Group Inc. before joining Twitter in 2014, brings to the job a background in tech and finance. Beyond Twitter’s nascent revival, his turnaround abilities are largely untested. But given his history of taking companies public — including Twitter — a SoFi IPO is very much a possibility, according to people familiar with the situation. Furthermore, they say, it’ll be nice to have an adult in the room after all the recent turmoil.

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FOREX, CARRY TRADES, EXCHANGE RATES

Trump Says Dollar to Strengthen, Mnuchin ‘Taken Out of Context’ – Bloomberg

President Donald Trump declared that the dollar would continue to strengthen and that remarks made by his Treasury secretary suggesting support for a weaker U.S. currency the day before had been taken out of context.

Steven Mnuchin vs. Mario Draghi: The ECB Loses – WSJ

Only a select few people can move foreign-exchange markets with a handful of words. U.S. Treasury Secretary Steven Mnuchin and ECB President Mario Draghi are two of them. Thursday they clashed, and the ECB clearly has a fight on its hands.

ECB hits out at Washington for talking down the dollar – Reuters

European Central Bank chief Mario Draghi took a swipe at Washington on Thursday for talking down the dollar, a move he said threatened a decades-old pact not to target the currency and might force his bank to change its own policy.

Draghi takes swipe at US for talking down dollar – FT

Mr Draghi pointed to an international agreement between economies, including the US, last October not to talk down their currencies. Some of the recent volatility in exchange rates had been caused by “the use of language . . . that doesn’t reflect the terms of reference we have agreed”, he said.

For Mnuchin, a Lesson in How Comments Can Move Markets – The New York Times

Steven Mnuchin, whose statement on the dollar caused a tumble, joins many Treasury secretaries whose words have been given more meaning than intended. Tony Fratto, who was a Treasury Department official under President George W. Bush, said that Mr. Mnuchin had just come across the same tripwire that his predecessors had stumbled over, but that it was part of learning the job.

Does Mnuchin Know? The Dollar Is Weak Already – Bloomberg

Currency markets are sending a different signal, producing the most depreciated dollar in 15 years. In contrast to Trump’s pledge to make “America first,” the U.S. was actually last in investment performance and job growth among major economies in 2017 for the first time in a decade.

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TRADE, PROTECTIONISM, REGULATION, OVERSIGHT

Forget Nafta. The Trade War With Canada Has Already Started – Bloomberg

Prime Minister Justin Trudeau is preparing for the possibility the U.S. may pull out of Nafta. For Canadian companies, the trade skirmish has already begun.

Trump takes aim at Canada over trade frustrations – FT

For much of the past year Donald Trump has aimed his trade ire at Mexico, which the US president portrays as a lawless southern neighbour. But as the US seeks to renegotiate the North American Free Trade Agreement, it is increasingly directing its complaints to the north.

Steel Tariffs Scare Caterpillar Even If Trade War Not a Concern – Bloomberg

Caterpillar Inc. isn’t concerned that the Trump administration’s policies will ignite a trade war. But it is worried they could push up the cost of steel used to build those iconic yellow bulldozers.

Trump opens door to US rejoining TPP – FT

“I’ll give you a big story. I would do TPP if we made a much better deal than we had,” he told CNBC in an interview Thursday on the sidelines of the World Economic Forum in Davos.

Trump, U.K.’s May Deny Strains in Ties at Davos Meeting – WSJ

President Donald Trump talked up the strength of the U.S.’s relationship with the U.K. after meeting with Prime Minister Theresa May, despite a spell of strained relations between the two allies.

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TAXATION, WEALTH HAVENS, INEQUALITY

The Tax Law, Just One Month Old, Is Roaring Through U.S. Companies – WSJ

From acquisitions and equipment purchases to stock buybacks, firms are rapidly recalibrating their business plans in the wake of the corporate-tax overhaul. Specialty drugmaker Amicus Therapeutics, for one, has decided to build a new production facility in the U.S. instead of Europe.

Treasury Skeptical About States Allowing Charitable Giving to Work Around New Cap – WSJ

Treasury Department tax experts are skeptical about states allowing taxpayers to make charitable contributions to circumvent a new cap on deductions for state and local taxes, a department official says.

AQR’s Asness Calls NY Governor a ‘Lying Thief’ | Institutional Investor

The hedge fund’s co-founder lashed out on Twitter against Andrew Cuomo over a tax proposal. Cliff Asness, co-founder and chief investment officer of AQR Capital Management, issued a torrent of Tweets decrying the plan as “a 19 percent surcharge on investment businesses” and the governor as a “flat out lying demagogue without even the rhetoric talent of his father.”

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RUSSIA PROBE

Trump Ordered Mueller Fired, but Backed Off When White House Counsel Threatened to Quit – New York Times

President Trump ordered the firing last June of Robert S. Mueller III, the special counsel overseeing the Russia investigation, according to four people told of the matter, but ultimately backed down after the White House counsel threatened to resign rather than carry out the directive.

Trump Says He Is Willing to Speak Under Oath to Mueller – The New York Times

President Trump said on Wednesday that he was willing and eager to be interviewed by Robert S. Mueller III, the special counsel investigating Russia’s interference in the 2016 presidential campaign, insisting that he has done nothing wrong.

Inspector general says he has recovered FBI officials’ missing texts during key period leading up to Mueller’s appointment – The Washington Post

Justice Department Inspector General Michael Horowitz said he ‘succeeded in using forensic tools’ to find the messages that the FBI had failed to retain.

Dutch intelligence first to alert U.S. about Russian hack of Democratic Party | Nieuwsuur

In the Summer of 2015, Dutch intelligence services were the first to alert their American counterparts about the cyberintrusion of the Democratic National Committee by Cozy Bear, a hacking group believed to be tied to the Russian government.

Trump Lawyer Says White House Has Given Special Counsel Over 20,000 Pages of Documents – WSJ

A lawyer for President Donald Trump said the White House had provided more than 20,000 pages of documents to special counsel Robert Mueller as part of the investigation into Russian interference in the 2016 U.S. election.

F.B.I. Texts and Dueling Memos Escalate Fight Over Russia Inquiry – The New York Times

The Justice Department rebuked an effort by House Republicans to undermine the Russia investigation by pushing to release a memo said to accuse the F.B.I. of abusing its power.

Grassley Says ‘Spooked’ Kushner Won’t Agree to Russia Interview – Bloomberg

A “spooked” Jared Kushner, President Donald Trump’s son-in-law and adviser, won’t agree to a staff interview with the Senate Judiciary Committee, Chairman Chuck Grassley said.

Head of UK probe into Russia Brexit meddling attacks Twitter – FT

The head of a UK government inquiry into Russian interference in the EU referendum has attacked Twitter for refusing to give “straight answers” to questions as part of its investigation.

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RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS

Inflation threat gnaws away at bond investors

The prospect of American workers receiving bigger pay rises taps into a growing anxiety among fixed-income investors: that 2018 may be the year in which inflation finally accelerates, posing a fundamental challenge for holders of long-term bonds that pay ultra low fixed-rate coupons.

18F26 - US INFLATION LEVELS

Debt Limit Unlikely to Rise in Feb. 8 Spending Bill, Cornyn Says – Bloomberg

Congress is unlikely to raise the U.S. debt ceiling in a stopgap spending bill lawmakers need to pass by Feb. 8, and it may get pushed off until March as part of broader budget legislation, the second-ranking Senate Republican said Thursday.

Worthless Auto Trade-Ins Signal Riskier Loans – Bloomberg

A growing share of the trade-ins that U.S. auto dealers and lenders accept for car-purchase financing are worthless on paper, a sign that banks and finance companies are making riskier loans to keep up revenue as vehicle sales slow.

A Normally Reliable Quant Strategy for Stocks Goes Haywire – Bloomberg

Quantitative investors have long used liquidity signals to strengthen their automated models. Simply put, bets on the least traded stocks should, in theory, outperform the market because there’s a reward for taking on the extra liquidity risk. But since December the opposite has been occurring, with the most liquid stocks rewarding investors to the greatest degree in nine years.

18F26 - ACTIVE TRADING


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MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS

Cryptocurrency boom upends venture capital

Like the dotcom bubble, most of the money pouring into ICOs will be wasted. But with the possibility that a handful of real businesses will survive to become the next Facebooks and Amazons, it is hard to stand on the sidelines. This is a boom that should terrify venture capitalists. It has exposed shortcomings in both their funding models and their worldview. They were the ringmasters of the dotcoms. Now, they are jostling for allocations like everyone else.

Trump Vs. China: Is A Trade War On The Way?

A trade war with China would have myriad unintended consequences – higher consumer prices, off-shored jobs, an increased trade deficit with China, and Chinese retaliation prime among them. It would also threaten the economic growth and bull market that Trump inherited, but claims credit for. Will he consider these possibilities? Does he even understand them? Those who hoped that Trump’s trade ideology had evolved from its bellicose origins are likely to be disappointed.

Donald MacKenzie · Wall Street’s Fear Gauge · LRB 25 January 2018

Perhaps those betting that the VIX will remain low are aware of the feedback loop, and know that it could suddenly go into reverse: in other words, they are consciously taking a substantial risk in trying to squeeze the last few dollars out of what has been the best bet of the last five years. Or maybe they don’t perceive themselves to be taking a big risk, and the loop doesn’t explain why the fear gauge remains so low. Maybe investors in the US simply aren’t frightened. That would be worrying for different reasons. It reminds me of the widespread feeling, in the run-up to the global banking crisis, that markets were enjoying a durable ‘great moderation’, free of boom and bust, bubbles and crashes. The time for the rest of us to get scared is precisely when market participants aren’t.

Has the US dollar stopped making sense?

If markets distrust American intent to control inflation — and Steven Mnuchin’s comments about the weak dollar, plus move to slap tariffs on washing machines, would foster that distrust — they will sell dollars, while buying US stocks as an inflation hedge. That is as close as I can come to making sense of the dollar sell-off.

Making the Dollar Weak Again – WSJ

Someone ought to tell these fellows the history of strong- and weak-dollar presidencies. The weak include Jimmy Carter, Richard Nixon and George W. Bush. The strong include Ronald Reagan and Bill Clinton. Perhaps Mr. Mnuchin aims to follow Michael Blumenthal, who held the Treasury job in the Carter Administration. His weak-dollar lobbying, along with an easy money policy at the Federal Reserve, led to a collapse of the dollar of more than 20% between January 1977 and October 1978 that fed higher inflation and elected Reagan.

Why Treasury secretaries should stick with the strong dollar mantra

Secretary Mnuchin spoke without a script, began with near-term commercial considerations, and was apparently contradicted by the commerce secretary. None of this can be reassuring to those looking to judge the competence and credibility of Donald Trump’s administration. This all may matter very little in the short run. But credibility is a crucial asset for any Treasury secretary given that financial panics or crises can come suddenly and the secretary’s words can come to be needed for reassurance.

Why a sliding dollar may come back to bite Donald Trump

Irrespective of any verbal niceties, the reason why Mr Mnuchin’s statement provoked so much high-altitude frisson was that it tapped into a broader undercurrent of anxiety that has been quietly swelling for several weeks. The unease has arisen partly because nobody quite knows why the currency is weakening. Some observers have tried to explain this by pointing to a recent increase in the trade deficit. But this excuse seems distinctly lame, given that the deficit is a long-running concern.

Mnuchin’s Dollar Salvo Pales Against 1980s Currency War – Bloomberg

U.S. Treasury Secretary Steven Mnuchin might have made waves in Davos with his comment on a weaker dollar being helpful for American trade, but the remarks fall well short of those in the “currency wars” of the past. For the real deal, go back to the 1980s. The guardians of the world’s most advanced economies had an accord in 1985 to drive down the dollar, but they fell out in 1987 after a follow-on agreement to halt its slide.

18F26 - DOW'S 87 CRASH

As U.S. Trumpets ‘America First,’ Rest of the World Is Moving On – The New York Times

As the world’s largest economy and architect of many international organizations and treaties, the United States remains an indispensable partner. But as the global economy gains strength, Europe and countries including Japan and China are forging ahead with deals that do not include the United States.

Social Media’s Junkies and Dealers by Roger McNamee – Project Syndicate

We are at a critical juncture. Awareness of the risks posed by Internet platforms is growing from a small base, but the convenience of the products and psychological addiction to them are such that it may take a generation to effect change from the user side, as it did with anti-smoking campaigns. Recognition of the corrosive effect of platform monopolies on competition and innovation is greater in Europe than in the US, but no one has found an effective regulatory strategy. Awareness that the platforms can be manipulated to undermine democracy is also growing, but Western governments have yet to devise a defense against it.

The World’s Priciest Stock Market by Robert J. Shiller – Project Syndicate

The truth is that it is impossible to pin down the full cause of the high price of the US stock market. The lack of any clear justification for its high CAPE ratio should remind all investors of the importance of diversification, and that the overall US stock market should not be given too much weight in a portfolio.

The World Bank Is Remaking Itself as a Creature of Wall Street – The New York Times

Mr. Kim’s mission is to revitalize the World Bank by increasing its firepower and winning over the United States. To do so, he is fundamentally, and controversially, changing how the bank operates. Instead of relying solely on contributions from reluctant donor governments, he is pushing private investors — sovereign wealth funds, private equity firms and insurance companies — to pony up trillions of dollars for projects in Indonesia, Zambia, India and elsewhere. His pitch: They can reap rich returns by putting their money to work alongside the World Bank.

The U.S. Can No Longer Hide From Its Deep Poverty Problem – The New York Times

We might direct assistance to the millions of Americans whose suffering is as bad as that of poor people in Africa or Asia. It is hard to imagine poverty that is worse than this, anywhere in the world. Indeed, it is precisely the cost and difficulty of housing that makes for so much misery for so many Americans, and it is precisely these costs that are missed in the World Bank’s global counts.

18F26 - DEEPLY POOR IN WEALTHY LANDS

The Rise of the Tech Model May Soon Make You Obsolete | Institutional Investor

The ascendance of nonbiological intelligence means computing systems will learn and process many types of inputs far faster than even the most-expert individuals. Once experts partner with the systems, these man-­machine teams will become extremely competent at rules-based goal seeking.

The Dark Side of America’s Rise to Oil Superpower – Bloomberg

By the end of the year, the U.S. may well be the world’s biggest oil producer. With that, America takes a big step toward energy independence. The U.S. crowing from the top of a hill long occupied by Saudi Arabia or Russia would scramble geopolitics. A new world energy order could emerge. That shuffling will be good for America but not so much for the planet.

The Race Is on for the First $1 Trillion U.S. Company – MoneyBeat – WSJ

If the stock market keeps rising at its current pace, it won’t take long for Apple, Alphabet, or Microsoft to obtain a trillion market value, something that’s never before happened in the U.S. Depending on how you calculate it, it could also be the world’s first public trillion-dollar firm. Conversely, after the sharp gains in tech stocks, some investors are calling for a pullback or sharp decline, which could put up a roadblock to the trillion-dollar valuation.

18F26 - FOUR BIGGEST SPX FIRMS

How Hedge Funds (Secretly) Get Their Way in Washington – Bloomberg

Since the work is concealed, there’s no way to know for sure how many hedge funds are leveraging Washington to benefit their portfolios. But interviewing insiders and scouring public records, Bloomberg Businessweek identified six major influence campaigns waged on behalf of investors in a particular stock or bond since 2006. DCI, it turns out, coordinated all six.

Viktor Orban: the rise of Europe’s troublemaker – FT

Orban’s journey from young champion of democracy to creator of what he has called an “illiberal democracy” is one of the most remarkable recent transformations in European politics. It is a story, too, of how the historic transition to democracy in the continent’s east — which had seemed irreversible a decade ago after 10 former communist countries had joined the EU — is starting to unravel, posing a threat to the EU’s values, perhaps even its future.

Why Goldman and Pritzker Sank Millions Into a Startup Before Suing It for Fraud – WSJ

Experienced startup investors to put $478.5 million into Outcome last spring at a valuation the company said was $5.5 billion. The investors placed the Outcome bet despite multiple warning signs, a Wall Street Journal examination shows, illustrating how even the savviest investors can gloss over potential issues in pursuit of a big score.

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USA ECONOMY DATA, CITIES AND STATES

The Wealthy Are Bidding Up U.S. Mansion Prices – Bloomberg

Prices for luxury homes, fueled by the surging stock market and a shrinking inventory of properties on the market, are rising faster than more-modest residences across much of the U.S. “The stock market hit all-time highs with gains in nearly every sector last quarter, instilling confidence among the wealthiest homebuyers,” Redfin Chief Economist Nela Richardson said in a statement.

US new home sales fall by most since Aug 2016 – FT

US new home sales tumbled 9.3 per cent last month from November to an annualised pace of 625,000 units, the Census Bureau said. That was the steepest decline since August 2016 and steeper than economists’ expectations for a 7.9 per cent decline.

Wal-Mart Job Cuts Rise to 1,000 in Company’s Latest Shake-Up – Bloomberg

Wal-Mart Stores Inc. is cutting as many as 1,000 jobs at headquarters, the latest effort to streamline a retail empire under threat from Amazon.com Inc.

Engineer in Deadly Washington State Amtrak Crash Missed Speed Signal – WSJ

The engineer driving an Amtrak passenger train that derailed near Seattle last month didn’t see a signal to reduce speed posted 2 miles ahead of a sharp curve, federal investigators said.

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GLOBAL ECONOMY, INTERNATIONAL

A Global Convergence of Economic Conditions Is Driving the Market Melt-Up – Bloomberg

There’s a simple way to make sense of the tumbling dollar, the Treasury selloff and the emerging-market boom, all springing in lockstep. Investors are intensifying their bets on synchronized global growth, a dynamic that’s crimping demand for safe assets and fueling convergence trades.

Rising Economic Tide Reaches All Shores for Buoyant Caterpillar – Bloomberg

The outlook from Caterpillar, considered an economic bellwether, comes as industries from manufacturing to services report increased sales and orders that have fueled record equity prices and buoyed investor expectations for this year. This week, the International Monetary Fund raised its estimate for 2018 global growth to the fastest in seven years.

Caterpillar Reports Robust Sales as Global Recovery Continues – WSJ

Caterpillar, the world’s largest maker of heavy machinery, said it broke a four-year streak of declining sales and signaled optimism about most of its construction and mining markets. 3M also reported upbeat results.

Ctrip Sees Surge in New Chinese Passports Spurring Tourism Boom – Bloomberg

The head of China’s biggest online travel service is predicting the number of passport-holding citizens will double to 240 million by 2020, a trend that could fuel an explosion of mainland tourists exploring the world.

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POSITIONING, INFLECTION, MARKET CALLS

U.S. Stock Rally Sparks Longest ‘Overbought’ Streak in 21 Years – Bloomberg

The benchmark gauge is poised to end trading Thursday with a 16th straight day in overbought territory, as judged by the Relative Strength Index. That would be the longest such run in more than two decades.

18F26 - 21 YEAR HIGH

Japan Traders Piling Into Derivatives About to Get New Options – Bloomberg

As the Japanese stock-market euphoria continues into the new year and traders increase spending on derivatives, the nation’s exchange is about to give them another tool to bet on the shares: flexible options.

Larry Fink Joins Ray Dalio in Warning Against Sitting in Cash – Bloomberg

The heads of the world’s biggest asset manager and largest hedge fund are anti-cash. Larry Fink, chief executive officer of BlackRock Inc., is urging investors around the world to stop keeping money in cash as stock markets reach new highs.

Gold Is Heading Towards a Four-Year High – Bloomberg

Gold has climbed more than 8 percent since the middle of December as the dollar slumped and investors sought protection from a potential tumble in share markets and a resurgence of inflation. Holdings of bullion in exchange-traded funds have grown to the largest since 2013, while money managers have more than doubled their net bullish bets on Comex since the middle of last month.

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COLOR, EARNINGS, SENTIMENT, VALUATIONS

Upbeat guidance boosts Northrop Grumman – FT

Northrop, which makes the B-21 Raider long-range bomber, and other defence contractors that derive the bulk of their revenues domestically are considered among the biggest winners of the overhaul that has cut the corporate tax rate to 21 per cent, from 35 per cent. Moreover, amid rising military budgets in Russia and China, as well as geopolitical concerns, Northrop and its peers are benefiting from higher demand for weapons.

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CREDIT, YIELD, BUYBACKS, CORPORATES

Puerto Rico’s Fiscal Plan Leaves Nothing for Bondholders – Bloomberg

When President Donald Trump visited Puerto Rico last year, he triggered a selloff in the island’s bonds by saying its debt needed to be wiped out to help recover from Hurricane Maria. For the next five years, the bankrupt territory’s fiscal plans are — essentially — calling for just that.

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DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS

Airbnb marks first full year of profitability in 2017

The 2017 year marks the first full year of generating income for the San Francisco-based company, which became profitable in the second half of 2016, as it managed to defy some of the disruptions in global travel last year. Airbnb’s earnings before tax, interest, depreciation and amortisation were $100m for the full year, according to a source close to the company, compared with an earnings loss the previous year.

Airbnb takes new steps toward IPO – Axios

Airbnb remains coy about its IPO plans, but it’s hard not to see these as anything other than steps toward a public listing. Some 2017 Airbnb financials, according to a source familiar with the company: $100 million in positive EBITDA and top-line revenue growth of 150% year-over-year.

How a $1.5 Trillion Aramco IPO Could Transform Global Stocks – Bloomberg

Money managers in the Middle East are confident the sale of government-owned Saudi Arabian Oil Co. this year will shake up the global stock market with a record initial public offering that gives the world’s biggest company a valuation of about $1.5 trillion.

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ENERGY COMPANIES, NOCs, INDUSTRY

Mexico’s drug cartels, now hooked on fuel, cripple nation’s refineries – Reuters

Drug gangs pressure refinery workers to tap the lifeblood of Mexico’s oil industry. One former worker fled the country. One former gang member helps authorities understand the racket.

Oil’s Heavy Hitters Line Up to Dive Into Mexico’s Deep Waters – Bloomberg

The once-giant crude nation whose output plunged in the past decade is enticing the world’s richest explorers with cut-rate prices for drilling rights to its most coveted offshore fields. The Jan. 31 auction for access to 29 deep-water tracts comes as $70-a-barrel crude lifts foreign drillers from the worst market slump in decades.

Oil Options Bears Are Slowly Disappearing – Bloomberg

It’s proving hard to find a seller in the oil market. The options market bias, or skew, paints the least-bearish picture in two years for U.S. crude for delivery in three months — a key measure. That’s despite a surge of 9 percent in the commodity’s price in 2018 to a three-year high of more than $66 a barrel.

18F26 - OIL OPTIONS SKEW

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ENERGY NATURAL GAS, COAL

Cold Weather Heats Up Natural-Gas Market – WSJ

The threat of another blast of bitterly cold arctic air bearing down on the U.S. is sending natural-gas futures prices to their highest level in more than a year. Traders and investors who had bet on falling natural-gas prices are being squeezed and have had to scramble to buy back contracts they once sold to close out their positions, pushing prices this week to their highest level since late 2016.

U.S. Gas Gurus Are Divided Between Warm Spell Bears and $4 Bulls – Bloomberg

U.S. natural gas soothsayers are at a stalemate. Bulls say more arctic air may vault futures above $4 for the first time since 2014. Bears see the February contract expiration and a warm spell dragging them lower.

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POLLUTION, CLIMATE & ENVIRONMENT

A Volcano Known for Its Beauty Is Also a Killer – The New York Times

Admired for its symmetry and classic cone shape, the volcano was named for a mythological fairy. But its smooth slopes and cute name belie its deadly nature: Inside is an enormous chamber, churning with molten rock and toxic gas. And it is ready to blow.

11 billion pieces of plastic are spreading disease across the world’s coral reefs – The Washington Post

A new study of more than 100,000 reef-building corals in the Asia-Pacific region found that plastic on reefs promotes “colonization by pathogens implicated in outbreaks of disease in the ocean.” The study, published Thursday in the journal Science, said the likelihood of disease skyrockets from 4 percent to nearly 90 percent when coral comes in contact with plastic.

Louvre Museum shuts down lower level as River Seine continues to flood – ABC News

Following weeks of heavy rain in Paris, the River Seine continues to rise — now putting its famous Louvre Museum in danger. The water level is expected to reach 20 feet by Saturday, which is 13 feet higher than its normal height, according to the latest official weather bulletin.

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BREXIT, SCOXIT, LONDON, UK ECONOMY

Hammond calls for soft Brexit to safeguard economy

Philip Hammond, the chancellor, made a dramatic call on Thursday for a soft Brexit that involved “very modest” changes to the UK’s relationship with the EU. Brexit “will not be reversed” he said, but he wanted to keep a close trading relationship with the EU and aligned regulations that have helped Britain’s economy over the past 45 years of bloc membership.

Davos 2018: Dimon raises spectre of big Brexit job moves

JPMorgan boss Jamie Dimon has warned that his bank could still move “more than 4,000” jobs from the UK if Brexit negotiations go badly. Mr Dimon’s message — delivered in a BBC interview at Davos — follows recent reports that banks will move far fewer jobs than initially feared in the immediate aftermath of Brexit.

May faces Eurosceptic rebellion over Brexit transition plan

Prime minister Theresa May on Wednesday faced ominous signs of a Eurosceptic rebellion against her plans for a standstill Brexit transition deal, as senior Tory Jacob Rees-Mogg claimed that Britain would be left as a “vassal state”.

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EUROPE

Train Derails Near Milan, Killing at Least 3 and Injuring Dozens – The New York Times

A commuter train derailed near Milan on Thursday morning, killing at least three people and injuring dozens of others, at least five of them seriously. The central carriages of the train, operated by the government-owned rail company Trenord, jumped the tracks near the town of Pioltello, about eight miles east of Milan.

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DACA, TRAVEL BAN, IMMIGRATION, WALL

Trump Immigration Plan Will Demand Tough Concessions From Democrats – The New York Times

If Democrats want relief for young unauthorized immigrants, they would have to accept a border wall and restrictions on low-skilled immigrants joining their families in America.

Democrats Try to Narrow Focus of an Immigration Deal – WSJ

Senate Democrats sought to narrow the parameters of an immigration deal with the White House Thursday, saying an agreement should focus on border security and the fate of Dreamers, undocumented immigrants brought to the U.S. as children.

Trump supports path to citizenship for up to 1.8 million ‘dreamers’ in new White House proposal – The Washington Post

The plans, to be sent to the Senate next week, will also include a $25 billion border security ‘trust fund,’ and an end to family visas for parents, siblings of U.S. citizens.

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GEOPOLITICS, CRIME, TERRORISM

Citing ‘Whitewash,’ Bill Richardson Quits Rohingya Post – The New York Times

Delivering an unusual public rebuke, former Gov. Bill Richardson of New Mexico resigned Wednesday from a Myanmar advisory board on the Rohingya crisis, calling it a pro-government “cheerleading squad” and chastising the country’s civilian leader, Daw Aung San Suu Kyi, whom he has long considered a friend.

Iran’s Fast Boats Stop Harassing U.S. Navy, Baffling Military – WSJ

The Iranian military has halted the routine harassment by its armed “fast boats” of U.S. naval vessels in the Persian Gulf, the U.S. military said, a turnabout that officials welcomed but were at a loss to explain.

Trump threatens to take away more U.S. aid from Palestinians if they don’t negotiate with Israel – The Washington Post

The president’s comments Thursday at the Davos economic forum deepened the diplomatic rift that followed his decision to recognize Jerusalem as Israel’s capital.

Trump Sharply Warns Turkey Against Military Strikes in Syria – The New York Times

In a phone call, President Trump urged President Recep Tayyip Erdogan to limit attacks against Kurdish militias, including some backed by American forces.

U.S. and Pakistan Give Conflicting Accounts of Drone Strike – The New York Times

United States officials rejected a claim by Pakistan that the strike had targeted an Afghan refugee camp.

U.S. Plans to Send First Aircraft Carrier to Vietnam Since War’s End – The New York Times

The proposed trip, expected in March, comes amid warming ties between the two countries and heightened tensions over China’s territorial claims.

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PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE

A $100 Million Heist Spooked Banks, Yet Many Dawdle on Defenses – Bloomberg

Two years after Swift, the interbank messaging system, became embroiled in one of the largest cyber heists in history, it’s still cajoling more than 1,000 of its members to show they’re setting up necessary defenses.

China’s facial recognition start-ups gain edge over rivals – FT

Mr Xu says China’s scale gives its AI companies a big advantage over their rivals elsewhere. “Size means everything,” he says. “We have processed 500m identities for facial recognition. US companies can’t test on so many customers.”

Tech firms let Russia probe software widely used by U.S. government – Reuters

Major global technology providers SAP, Symantec and McAfee have allowed Russian authorities to hunt for vulnerabilities in software deeply embedded across the U.S. government, a Reuters investigation has found.

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PROPAGANDA, CORRUPTION, AUTHORITARIANISM

Trump Groups Raised Millions, Then Paid It Out to Loyalists and a Trump Hotel – The New York Times

A pair of groups supporting President Trump say they raised $30 million last year, then spent tens of thousands of those dollars at the Trump International Hotel here and on payments to a few Trump loyalists like the former campaign manager Corey Lewandowski and the former Milwaukee County sheriff David A. Clarke Jr., according to new campaign finance reports and news reports.

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TRUMP WORLD

The Trumps asked to borrow a Van Gogh but the Guggenheim offered a solid gold toilet instead. – The Washington Post

The curator’s alternative: an 18-karat, fully functioning, solid gold toilet — an interactive work titled “America” that critics have described as pointed satire aimed at the excess of wealth in this country.

18F26 - GOLD TOILET

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ELECTORAL POLITICS

Oprah Had Ruled Out Running for President – The New York Times

“I don’t have the DNA for it,” Oprah Winfrey told InStyle magazine, three weeks before her Golden Globes speech stirred up speculation. “That’s not for me.” But that doesn’t mean she wasn’t toying with the idea.

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SILICON VALLEY, UNICORNS, STARTUPS, VC

Benchmark Capital drops lawsuit against ex-Uber CEO Kalanick

Silicon Valley venture firm Benchmark Capital’s lawsuit against former Uber Technologies Inc CEO Travis Kalanick was dismissed on Thursday by a Delaware judge following an agreement between the parties.

Here’s Where Startups in the U.S. Are Getting the Most VC Funding

Last year was a bonanza for U.S. startups. They collected more than $67 billion in venture-capital funding, a new record that beat the previous high in 2015 by more than 5 percent. Silicon Valley continues to dominate the VC landscape. But its grip is slipping.

18F26 - NUMBER OF DEALS

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CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE

Germany threatens curbs on Facebook’s data use – FT

Germany is threatening curbs on how Facebook amasses data from millions of users in what would be an unprecedented intervention in the social network’s business model.

Twitter Is Working on a Snapchat-Style Video Sharing Tool – Bloomberg

Twitter Inc. is working on a new Snapchat-style feature that makes it easier to post videos on the social-media company’s app, according to people familiar with the matter, aiming to attract more users and cement a nascent turnaround.

Why Twitter Let Noto Walk Away – Bloomberg

For many within the company, Noto’s decision came as no surprise. The former Goldman Sachs Group Inc. banker has always aimed to be a CEO, according to people familiar with the matter. At Twitter, that career path was complicated by co-founder Jack Dorsey’s return to the helm in 2015. More than two years later, with no plans for Dorsey to step down — even though he’s also CEO of Square Inc. — Noto’s best option was to take the position at SoFi, said the people, who asked not to be named discussing private matters.

Xiaomi beats Samsung to top spot in India’s smartphone market | TechCrunch

The Chinese firm, which is reportedly on a roadshow ahead of an IPO that could value it as high as $100 billion, is said to have beaten Samsung’s sales efforts in India, the world’s second-largest smartphone market behind China, according to new data from Canalys and Counterpoint.

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MEDIA, CABLE, SPORTS, ENTERTAINMENT

WWE’s Vince McMahon Plans to Start New Pro Football League Again – Bloomberg

Vince McMahon, the flamboyant chairman and founder of World Wrestling Entertainment Inc., confirmed he plans to start a new professional football league, entering the market amid a slump in TV ratings for the NFL.

CNN Is Closing Down Beme, YouTube Star Casey Neistat’s Video Company

Beme, Neistat acknowledges, became a source of exasperation, with grand plans to create the next great digital news brand dogged by creative conflicts and sluggish progress. The Beme News YouTube channel, which will continue to exist within CNN, has published only a few dozen videos.

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AUTOS, ELECTRIC, SELF-DRIVING

Tesla employees say Gigafactory problems worse than known – CNBC

Tesla’s problems with battery production at the company’s Gigafactory in Sparks, Nevada, are worse than the company has acknowledged and could cause further delays and quality issues for the new Model 3, according to a number of current and former Tesla employees.

A Chinese Car Built in Western Europe? Geely Could Be First – Bloomberg

China may be poised to build its first car in Western Europe, with the help of Sweden’s Volvo Car Group. A ‘‘Made in Europe’’ stamp will augur well for the ambitions of a Chinese brand as it takes on global car majors such as Volkswagen AG, which has dominated the China car market for a decade.

Apple Expands California Self-Driving Test Fleet to 27 Cars – Bloomberg

Apple Inc. has expanded its California self-driving test fleet to 27 vehicles as it accelerates efforts to catch up with competitors such as Alphabet Inc’s Waymo.

Ford Scoops Up Software Firms as It Drives Toward the Driverless – WSJ

Ford is acquiring two software firms to help build out its mobility business, a move that highlights the need for auto companies to seed management teams with tech talent.

Off-the-Shelf Nuclear Plants Could Soon Help Power Electric Cars – Bloomberg

Demand for low-carbon electricity to power a future wave of electric vehicles could be provided by small, factory-built nuclear reactors. The smaller reactors can produce up to 300 megawatts, or about a fifth of the capacity of one of the two units being built at Electricite de France SA’s Hinkley Point C, the U.K.’s first nuclear plant since 1995.

TOP

AIRLINES, SHIPPERS, RAIL, TRANSPORTS

Airline boss tells investors to ‘calm down’

The chief executive of Southwest Airlines, the second-largest carrier in the US by market value, told investors worried about an industry price war to “calm down”, as a sell-off in the sector continued into its second day.

Airlines Reap Benefits of High Travel Demand, Tax Cuts – WSJ

Tax cuts and buoyant demand led U.S. airlines to strong fourth-quarter profits, but investors looked warily at plans to add flights while costs are rising.

TOP

SCIENCE, NATURE, PSYCHOLOGY

Jaw from Israeli cave is oldest human fossil outside Africa, scientists say – The Washington Post

The find, reported Thursday in the journal Science, is by far the oldest human fossil ever uncovered outside Africa, where our Homo sapiens originated. It pushes back the timeline of when modern humans began venturing to other continents by about 60,000 years and suggests people made several short-lived excursions into Eurasia millennia before we finally conquered the globe.

This Is How You Escape a Cheetah, if You’re an Impala – The New York Times

The model showed that impalas and zebras have the best chance of making a getaway if they run at moderate speeds, because that leaves more options for maneuvering away at the last second. “If you’re running flat out, there’s not much you can do to stop a lion from anticipating exactly where you’re going to be in two strides’ time,” Dr. Wilson said.

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