Macro Links Mar 27th – Russian Diplomat Expulsions
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- RUSSIAN DIPLOMAT EXPULSIONS
- FACEBOOK, CAMBRIDGE ANALYTICA
- BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
- FOREX, CARRY TRADES, EXCHANGE RATES
- TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
- GUN CONTROL, POT BOOM, OPIOIDS, PUBLIC POLICY
- TAXATION, WEALTH HAVENS, INEQUALITY
- RUSSIA MEDDLING, RUSSIA PROBE, TRUMP WORLD
- KOREAN PENINSULA, MIDDLE EAST, 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 COMPANIES, NOCs, INDUSTRY
- ENERGY CRUDE OIL, OIL SANDS, SHALE
- COMMODITIES BASE METALS, MATERIALS
- POLLUTION, CLIMATE & ENVIRONMENT
- BREXIT, SCOXIT, LONDON, UK ECONOMY
- GEOPOLITICS, CRIME, TERRORISM
- ELECTORAL POLITICS
- BANKS, BROKERS, INSURANCE, EXCHANGES
- SILICON VALLEY, UNICORNS, STARTUPS, VC
- AEROSPACE, MILITARY & DEFENSE
- SCIENCE, NATURE, PSYCHOLOGY
RUSSIAN DIPLOMAT EXPULSIONS
The expulsions are the toughest action taken against the Kremlin by President Trump, who has been criticized for not being firm enough with President Vladimir V. Putin of Russia. The officials said the action was a coordinated effort with other allies. Poland announced it will expel the Russian ambassador and several other diplomats in response to the poisoning. And Germany announced plans to expel four Russian diplomats within the next week.
European nations united in a rare coordinated rebuke of Russia on Monday, joining the United States and Canada in expelling scores of Russian diplomats. The expulsions, which were denounced by the Kremlin, were a show of solidarity with their ally Britain, which has accused the Kremlin of being behind the use of a nerve agent to poison a former Russian spy and his daughter.
It is said to be the largest collective expulsion of Russian intelligence officers in history. More than 20 countries have aligned with the UK, expelling more than 100 diplomats. Russia vowed to retaliate to the “provocative gesture”. Russia denies any role in the attack on Sergei Skripal and his daughter, Yulia, in Salisbury, southern England. The pair remain in a critical but stable condition in hospital.
“I can’t think of any previous occasion when so many countries have coordinated on expulsions,” said Ian Bond, a former British diplomat in Moscow, adding that for many of the smaller countries, “it’s the first time since the Cold War that they’ve even expelled one Russian diplomat.” Russia is always a tricky issue for the European Union, given its critical role as an energy supplier to the Continent, as well as the divided opinion among leaders on how confrontational, or not, the bloc should be with Mr. Putin. But the March 4 poisoning in Salisbury, England, of the former Russian spy, Sergei V. Skripal, and his daughter, Yulia, crossed a line.
While the dramatic ejections will probably spark tit-for-tat retaliation, they fall short of tough punitive action such as cutting Moscow off from the international financial system or imposing sanctions on the Russian central bank. Mr Simes, who recently returned from Moscow where he said officials were taken aback that Mr Trump had congratulated Mr Putin, said US policy towards Russia remained disjointed. “I would not call the [US] approach to Russia soft, I would call it incoherent,” he said. “I don’t think the administration has been able to develop a systematic inter-agency approach which would be led by the president himself.”
Russian Twitter trolls have been attempting to show that the British public do not believe Vladimir Putin is behind the poisoning of Sergei Skripal, it has been claimed. The potentially fake accounts, which experts say could be linked to the bot factory in St Petersburg, retweeted a poll by a British user which ended with more than 15,700 votes.
FACEBOOK, CAMBRIDGE ANALYTICA
A parade of regulators, politicians and law enforcement officials demanded to know more about Facebook’s privacy practices on Monday, as the fallout from the company’s relationship with a political data firm continued to spread. Early in the day, the Federal Trade Commission confirmed reports that it was investigating how Facebook handles information about its users.
The leading U.S. consumer protection regulator and attorneys representing 37 states stepped up pressure on Facebook Inc on Monday to explain how the social network allowed data of 50 million users get into the hands of a political consultancy. The U.S. Federal Trade Commission took the unusual step of announcing that it had opened an investigation into the company – which it generally only does in cases of great public interest – citing media reports that raise what it called “substantial concerns about the privacy practices of Facebook.”
ICE, the federal agency tasked with Trump’s program of mass deportation, uses backend Facebook data to locate and track suspects, according to a string of emails and documents obtained by The Intercept through a public records request. The hunt for one particular suspect provides a rare window into how ICE agents use social media and powerful data analytics tools to find targets.
Amid mounting accusations that data firm Cambridge Analytica misused the Facebook data of up to 50 million user profiles, the U.K.-based firm and its top executives are now also under fire for alleged violations of U.S. election laws.
Most of Facebook Inc.’s punishment in the wake of the Cambridge Analytica scandal has come from investors, who wiped out nearly $75 billion in Facebook market value last week. Monday brought a reminder that government action could prove even more expensive, though, and sent shares tumbling again.
Facebook Inc. is heading toward its worst month since May 2013 after an analyst report warned of a temporary pullback in advertising and the FTC confirmed it’s investigating the social network’s privacy practices.
While Facebook says there was nothing improper in its call logging, it is the latest example of Facebook users coming to the realization they are sharing vast quantities of data with the company—wittingly or not—each time they agree to one of its privacy settings or feature requests.
To get an idea of the data Facebook collects about you, just ask for it. You’ll get a file with every photo and comment you’ve posted, all the ads you’ve clicked on, stuff you’ve liked and searched for and everyone you’ve friended — and unfriended — over the years. Now, the company is under fire for collecting data on people’s phone calls and text messages if they used Android devices. While Facebook insists users had to specifically agree, or opt in, to have such data collected, at least some users appeared surprised.
Madison Avenue’s increasing uneasiness with the platforms and its moves to push back aggressively are fundamentally reshaping the relationship. Advertisers’ broad push for changes has played out in behind-the-scenes dust-ups, veiled and overt threats and advertising boycotts, and has extracted some concessions from the tech giants. Among the leaders is P&G, the world’s largest advertiser. Many companies are actively policing their ad purchases to ensure they avoid objectionable or irrelevant content. Some are cutting budgets. And they are demanding far more transparency from Google and Facebook about the performance of their ad campaigns to make sure they aren’t wasting money.
The flip side of Facebook’s growth model is that its fortunes could turn just as quickly. If Facebook’s historical financials are any guide, a mere 13 percent decline in the number of users — which would leave it with the same number it had at the end of 2016 — would translate into a 23 percent decline in ad revenue per user and a 33 percent decline in revenue. Earnings, in turn, would drop by 43 percent and its P/E ratio would spike to 45. If that were to happen, Facebook’s stock would have to decline by 65 percent to reach a reasonable P/E ratio of 15.5.
BITCOIN, CRYPTOCURRENCY, INITIAL COIN OFFERINGS
TradeWind Markets Inc., a technology provider backed by Sprott Inc., Goldcorp Inc. and IEX Group Inc. on Monday launched a new digital gold trading and settlement platform that aims to simplify and speed up trading and reduce transaction costs. The Royal Canadian Mint will provide storage for the platform, confirm that it’s in possession of the physical gold that underlines it and guarantee the option of physical delivery.
As the red-hot initial coin offering market comes under closer scrutiny from regulators, venture capitalist interest in crypto is also picking up. While ICOs were supposed to disrupt venture capital, such funding in blockchain-based companies is surging, with startups raising $434 million since December, the most ever in a three-month period, according to CoinDesk data. With the U.S. Securities and Exchange Commission weighing in on the token industry, the venture capitalists’ increased interest in equity reflects a cautious bet that the business will grow. “If a company goes on and gets an ICO, my equity is worth more,” Frank Meehan, partner at SparkLabs Group, said. “That’s really the game right now.”
Bitcoin began the week on a down note, declining as much as 8.7 percent, pushing the biggest cryptocurrency’s decline for March to about 25 percent. Twitter Inc. confirmed Monday that it’s banning advertisements for initial coin offerings and token sales on its social-media platform. The decision comes after Facebook Inc. banned cryptocurrency ads in January and Alphabet Inc.’s Google said it would ban such ads starting in June, as part of a broader effort to crack down on deceptive and misleading advertising on their platforms.
Twitter has confirmed rumors that the social media giant would follow Facebook and Google in clamping down on crypto-related advertising. Twitter told Reuters that the ban will cover advertising for Initial Coin Offerings (ICO) and token sales. The policy will be introduced over the course of the next 30 days and will also include bans on cryptocurrency exchanges and wallet services, unless they are public companies and are listed on major stock exchanges. Twitter said it will limit advertisement for crypto exchanges in Japan to those under the purview of the national financial regulator.
The prohibition will cover advertising of initial coin offerings (ICOs) – crowdfunding used to raise cash by creating new coins – as well as token sales, the San Francisco-based firm told Reuters on Monday. The new policy, which will be rolled out over the next 30 days, will also ban ads by cryptocurrency exchanges and cryptocurrency wallet services, unless they are public companies listed on certain major stock markets.
Coinbase Inc., which owns one of the largest U.S. cryptocurrency trading platforms, is opening the door to offering digital tokens based on the Ethereum network. The San Francisco-based company said it will support Ethereum’s ERC20 technical standard on its platform in the coming months, according to a blog post the firm published Monday. “This paves the way for supporting ERC20 assets across Coinbase products in the future, though we aren’t announcing support for any specific assets or features at this time,” the post said. Coinbase trades Bitcoin, Bitcoin Cash, Ether and Litecoin on its GDAX exchange.
Circle Internet Finance Ltd., a Goldman Sachs Group Inc.-backed startup focused on mobile payments and cryptocurrencies, said it has reached profitability and hired a former Boxed Wholesale executive to lead finance and risk. The company said it expects revenue and profit growth this year. Circle plans to increase its workforce by the end of the year to 400 from 150. The Dublin-based startup also said it hired Naeem Ishaq as chief financial officer and head of risk. Ishaq had been CFO at e-commerce startup Boxed, and previously was head of finance, strategy and risk at payments company Square Inc.
Shares of the New York City-based company plummeted as much as 14 percent to $61.50, the most intraday in more than a month, after short seller Citron Research alleged in a tweet that Longfin is a “pure stock scheme.” “@sec_enforcement should not be far behind,” said Citron, which is run by Andrew Left, in the tweet Monday. “Filings and press releases are riddled with inaccuracies and fraud.” “We don’t see any fraud,” said Lijie Zhu of Dragon Gate Investment Partners, Longfin’s investor-relations firm, in a phone call.
The majority of ICOs are scams, but it’s still a booming business, said CoinList CEO and Co-Founder Andy Bromberg. “The hit rate is very low in this industry,” Bromberg told CNBC, regarding ICOs, or initial coin offerings, a crowdfunding way to raise funds for cryptocurrency ventures. “CoinList has publicly had on our site only three ICOs out of more than 900 in-bound applications,” he said on “Fast Money” Monday. His company, CoinList, is an online platform that guides token creators through the IPO process while helping investors determine which IPOs are legitimate.
Some of the world’s top law firms are looking to cash in on the mania for blockchain and cryptocurrencies by advising on initial coin offerings and investments in the new technology, as well as helping to deal with sceptical regulators. UK, US and European firms including Clifford Chance, Allen & Overy, Latham & Watkins and Cooley are among those advising on ICOs, which involve a start-up company issuing “digital tokens” to investors in exchange for cryptocurrencies such as bitcoin. Tokens can be then used to access services produced by the issuer or can be sold on.
The CEO of the Chinese fintech giant Ant Financial Services Group Eric Jing has called Blockchain “the cornerstone of trust for the digital society in the future,” speaking at China’s annual Development High-Level Forum, local news outlet The Paper reports Sunday, March 25. In his speech during the forum that took place March 24, Jing said that he is optimistic about the long-term prospects of Blockchain. However, he also claimed that the technology is not yet fully prepared for a “large-scale outbreak,” and its current applications are often speculative, “similar to the Internet bubble period of the 1990s.”
FOREX, CARRY TRADES, EXCHANGE RATES
For the first time in a decade, the world’s central banks are looking beyond the dollar to build their currency reserves. With U.S. protectionism on the rise, a number of Wall Street strategists say the case for the euro has rarely been better. Existential crises that hobbled the European experiment have receded. A resurgent economy has spurred talk the region’s central bank will curb policies that drove euro yields below zero. And as President Donald Trump threatens a trade war with China, the European Union is pursuing free-trade deals all across Asia and Latin America.
China’s launch on Monday of its crude futures exchange will improve the clout of the yuan in financial markets and could threaten the international primacy of the dollar, argues a new report by Hayden Briscoe, APAC head of fixed income at UBS Asset Management. “This is the single biggest change in capital markets, maybe of all time,” Briscoe said in a follow-up telephone interview. Already on Monday, Unipec, the trading arm of Asia’s largest refiner Sinopec, has inked a deal with a western oil major to buy Middle East crude priced against the newly-launched Shanghai crude futures contract. This helps cement the exchange’s viability and challenges the petro-dollar system, in which oil deals are executed in dollars. This would decrease demand for the greenback and boost U.S. inflation.
The world’s first yuan-denominated oil contracts launched Monday, as part of China’s drive to turn its currency into a global force in markets. The history of international currency markets suggests that may be a difficult task, though not impossible if Beijing eases the capital controls that make it hard for foreigners to buy domestic assets, economists say. Those capital controls and investors’ concerns over the opaqueness of Chinese government and central-bank policy mean that the yuan remains a minnow in international finance, despite China being the world’s largest exporter.
TRADE, PROTECTIONISM, REGULATION, OVERSIGHT
Chinese officials are rushing to finalise new regulations by May that will allow foreign financial groups to take majority stakes in securities companies as they seek to avert a looming trade war with the US. According to people briefed on the discussions, Beijing has also offered to buy more semiconductors from the US by diverting some purchases from South Korean and Taiwanese manufacturers, in an effort to help reduce annual $375bn merchandise trade surplus with the US.
Premier Li Keqiang said on Monday China and the United States should maintain negotiations and he reiterated pledges to ease access for American businesses, as China scrambles to avert a trade war. Li told a conference that included global chief executives that China would treat foreign and domestic firms equally, would not force foreign firms to transfer technology and would strengthen intellectual property rights, repeating promises that have failed to placate Washington.
China’s rules requiring foreign companies to form joint ventures with domestic partners are among the chief targets of the Trump administration’s looming tariffs against Chinese imports. The administration contends these joint ventures—a longstanding complaint of many U.S. firms—force companies to divulge their trade secrets in several sectors, such as autos, where Beijing has a goal to dominate the building of electric vehicles.
President Trump is on the verge of securing his first major trade deal, leveraging the threat of tariffs to gain concessions from South Korea on exports of steel and imports of American cars. The deal, which the White House could announce on Tuesday, would comes at moment of heightened tension on the Korean Peninsula as the Trump administration prepares to hold talks with North Korea’s leader, Kim Jong-un. Ties between Washington and Seoul had become strained over disagreements about trade, including Mr. Trump’s steel tariffs, and threatened to further complicate the already fraught discussions with North Korea.
China and the U.S. have quietly started negotiating to improve U.S. access to Chinese markets, after a week filled with harsh words from both sides over Washington’s threat to use tariffs to address trade imbalances, people with knowledge of the matter said.
GUN CONTROL, POT BOOM, OPIOIDS, PUBLIC POLICY
U.S. gunmaker Remington Outdoor Co has obtained commitments for nearly $300 million from its existing lenders, including some of the biggest U.S. banks, after new sources of funding dried up in the months leading up to its filing for Chapter 11 bankruptcy. Most of the banks providing the bankruptcy funding were lenders to Remington before its current financial problems, according to court records. Without the funds, Remington may have been forced to go out of business and the banks could have seen their investment crash in value.
The New Jersey state Assembly passed a package of gun-control measures Monday, including mandatory background checks for private firearm sales, as some states move to tighten restrictions following a national wave of activism. The proposals also banned magazines that can hold more than 10 rounds and prohibits the possession of armor-piercing ammunition.
The first to target the Parkland students were the conspiracy theorists. When a mass shooting like Parkland happens, conspiracy theorists begin to search for signs of a false flag — proof that the shooting was actually staged and/or carried out for political reasons — pretty much right away. They’re following what online trolling expert Whitney Phillips calls a “tragedy script”: The establishment is trying to take away your guns, they’ll use mass shootings to do that, and here are the tricks they use to manipulate the public. Anything irregular becomes conspiracy fodder.
Canada Is All Set To Legalize Marijuana By The End of The Summer
As we reported last month, there has been some question as to when Canada will finally legalize weed. Initially, Justin Trudeau predicted that weed would be available by the start of summer of 2018. However, as of yesterday, Canada is all set to legalize marijuana by the end of the summer.
Signs from the March for Our Lives rallies around the country.
TAXATION, WEALTH HAVENS, INEQUALITY
Wall Street’s average bonus jumped 17 percent in 2017 to $184,220, the highest since 2006, according to estimates by New York State Comptroller Thomas DiNapoli. “The large increase in profitability over the past two years demonstrates that the industry can prosper with the regulations and consumer protections adopted after the financial crisis,” DiNapoli said in the statement. “It is too soon to tell how increased volatility in the financial markets might impact profits in 2018.”
A new tax aimed at overseas income earned by U.S. technology and pharmaceutical firms is hitting unexpected places, including Kansas City Southern , a U.S. railroad company. The new minimum tax on foreign earnings will cost Kansas City Southern $25 million a year, according to the company, which warns the measure also encourages it to borrow money outside the U.S. Kansas City Southern’s predicament is an example of the shifts in international taxation emanating from last year’s rewrite of the U.S. tax code, and of the potential unintended consequences that companies are starting to see.
RUSSIA MEDDLING, RUSSIA PROBE, TRUMP WORLD
White House attorneys are examining whether two loans totaling more than $500 million to Jared Kushner’s family business may have violated any criminal laws or federal ethics regulations, according to a letter from a federal ethics agency made public Monday. The Office of Government Ethics told a Democratic lawmaker in the letter that the White House is probing whether a $184 million loan from the real-estate arm of Apollo Global Management LLC and a $325 million loan from Citigroup Inc. may have run afoul of the rules and laws governing the conduct of federal employees.
Being a pundit is becoming a tried-and-true pathway into the Trump administration, as a reality-show president seeks to surround himself with people who’ve been auditioning for their jobs on television — whether they realize it or not. It’s a phenomenon that extends beyond top government posts. After seeing Joseph diGenova stridently defend him on Fox News, Trump announced that he would add the lawyer to his personal legal team handling the Russia probe, even though he didn’t know diGenova. That idea, however, soon unraveled. Over the weekend, another Trump lawyer said the hiring of diGenova and his wife, Victoria Toensing, who is also a lawyer, wasn’t happening because other clients represented by their law firm pose conflicts of interest.
A prominent Chicago defense attorney said Monday that he had declined an invitation to lead President Trump’s legal team responding to special counsel Robert S. Mueller III’s Russia investigation, underscoring the president’s difficulty in attracting top legal talent to represent him in the probe. Dan K. Webb, a Republican, is a former U.S. attorney for Illinois and a corporate and white-collar-defense lawyer for the firm Winston and Strawn.
After 61 weeks in the White House, President Trump has found two people he won’t attack on Twitter: Stormy Daniels and Karen McDougal. The verbose commander in chief has posted more than 2,900 times on Twitter since taking office, using the term “FAKE NEWS” to describe everything from the Russia inquiry and allegations of chaos in the White House to harassment accusations, the size of his inaugural crowds and heated arguments with world leaders.
CBS’s “60 Minutes” interview on Sunday night featuring the pornographic film actress, whose real name is Stephanie Clifford, garnered the highest ratings for the program in almost a decade. It drew 22 million viewers, according to Nielsen, more than the much-hyped recent telecasts for the Grammys and the Golden Globes.
The actress, whose real name is Stephanie Clifford, told the 60 Minutes programme that an unnamed man approached her in a Las Vegas parking lot after she agreed to tell her story to a magazine and told her to “leave Trump alone. Forget the story.” “And then he leaned around and looked at my daughter and said, ‘That’s a beautiful little girl. It’d be a shame if something happened to her mom.’ And then he was gone,” she claimed in her first televised comments about her alleged affair in 2006 and 2007, and subsequent legal battle with Mr Trump. She said she was scared to go to the police at the time.
Former adult-film actress Stephanie Clifford on Monday sued President Donald Trump’s personal lawyer for defamation, saying in a court filing that Michael Cohen publicly portrayed her as having lied about an alleged sexual encounter with Mr. Trump. Ms. Clifford, known professionally as Stormy Daniels, added Mr. Cohen to her pending lawsuit against Mr. Trump in a filing in federal court in Los Angeles.
KOREAN PENINSULA, MIDDLE EAST, NUCLEAR WEAPONS
Kim Jong Un, North Korea’s supreme leader, has arrived in Beijing in his first-ever trip outside the country as its ruler, Bloomberg News reported Monday. Kim arrived after mysterious journey of a train from North Korea, which recalls visits his father had made to Beijing before his death in 2011.
Speculation about a possible visit by a high-ranking North Korean official circulated around the Chinese capital Monday, after Japan’s Kyodo News reported that a special train may have carried Kim through the northeastern border city of Dandong. Nippon TV showed footage of a train arriving Monday in Beijing that looked similar to one used by Kim’s father, Kim Jong Il, to visit the country shortly before his death in 2011.
INFLATION, RATES, DEBT AND CREDIT, BALANCE SHEETS
Bond bulls who enjoyed a rare rally in short-term Treasuries last week might not want to get too comfortable: The world’s biggest debt market is about to be inundated with an unprecedented wave of issuance. The U.S. Treasury will probably auction about $294 billion of bills and notes this week, its largest slate of supply ever. The $30 billion two-year note sale is the biggest since 2014, and comes as the maturity posted just its fourth weekly gain in the last six months. The three- and six-month bill offerings remain at record sizes.
Regulators around the globe began work on replacements for Libor, the London interbank offered rate, well before the U.K.’s Financial Conduct Authority set to put the beleaguered interest-rate benchmark out of its misery. In the U.S., enter the Secured Overnight Financing Rate, or SOFR, a new reference rate being introduced next week by the Federal Reserve Bank of New York in cooperation with the U.S. Treasury Department’s Office of Financial Research.
VOLATILITY, BLACK SWANS, LIQUIDITY, TAIL RISKS
The surging tensions over trade between the U.S. and China have prompted comparisons to American combativeness toward Japan that preceded the 1987 equity meltdown, at least in the mind of Bocom International Holdings Co. market analyst Hao Hong. President Donald Trump’s move to rein in Chinese imports parallels U.S. legislators’ outrage over an emerging Japan decades ago, when U.S. congressmen smashed a Toshiba radio with sledgehammers, according to Hong. “Less than two months later, the U.S. market peaked, and then saw an epic plunge on the Black Monday,” the analyst wrote in a recent note to clients.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
Dismissed as a warmonger during the Obama presidency, the defense secretary may be the only reliable voice of caution left in an administration inching closer to the brink. A year into Trump’s tenure, Mattis has become a quietly central figure in an administration of near-constant purges. He may be the lone Cabinet member to have survived with his status and dignity intact, and in the process his Pentagon — perhaps the one national institution that is still fully functional — has inherited an unusually powerful role in the shaping of American foreign policy. The removal of Tillerson and the national-security adviser, Gen. H.R. McMaster, has further reduced the core of the group once known as the “committee to save America,” underscoring Mattis’s unique position and putting even more weight on his relationship with the president. Although their conversations are a tightly guarded secret, Trump is said to consult Mattis regularly about a wide range of subjects.
The volatile state of Russia’s relations with the outside world today, exacerbated by a nerve agent attack on a former spy living in Britain, makes the diplomatic climate of the Cold War look reassuring, said Ivan I. Kurilla, an expert on Russian-American relations, and recalls a period of paralyzing mistrust that followed the 1917 Bolshevik Revolution. “If you look for similarities with what is happening, it is not the Cold War that can explain events but Russia’s first revolutionary regime,” which regularly assassinated opponents abroad, said Mr. Kurilla, a historian at the European University at St. Petersburg. He said that Russia’s president, Vladimir V. Putin, had no interest in spreading a new ideology and fomenting world revolution, unlike the early Bolsheviks, but that Russia under Mr. Putin had “become a revolutionary regime in terms of international relations.”
The fact that Cotton Plant, Ark., a small Delta city hollowed out by racism and the forces of economic change, may soon host one of the state’s first five licensed growing operations illustrates the novel streak of social engineering in America’s piecemeal rollout of state-sanctioned marijuana. Other states and cities have adopted rules to ensure, or at least encourage, minority-group participation in the fledgling marijuana industry, whether as growers or as distributors. Many are also trying to steer its economic benefits to the forlorn towns and neighborhoods that have posed the most intractable economic puzzles.
Prices and deductibles are rising. Networks are shrinking. And even some well-off Americans are questioning what they’re paying for. While the share of Americans without health insurance is near historic lows four years after the Affordable Care Act extended coverage to almost 20 million people, the Trump administration has been rolling back parts of the law. At the same time, the cost for many people to buy a health plan—if they don’t get it from a job or the government—is higher than ever.
China has struck a hard stance on the issue at the root of the looming trade fight between Beijing and Washington: China’s government-led drive, which Washington describes as breaking international rules, to build the cutting-edge industries of the future. Chinese officials in recent days have been defending the government’s ambitious plan, known as Made in China 2025, to create globally competitive players in industries like advanced microchips, driverless cars and robotics. While Beijing has signaled a willingness to compromise on other matters, the intractable standoff over its core industrial policy could prolong a trade fight that has already shaken markets and led to concerns about a full-blown trade war.
Here’s another reason to circle the 2020 election year on the calendar. It may well be the year of the next U.S. recession. Hefty tax cuts, stepped-up government spending and robust global growth should help insulate the economy against a downturn over the next two years, in spite of last week’s stock-market swoon. That would allow the expansion that began in 2009 to become America’s longest ever. But after that, watch out, economists warn. Fading fiscal stimulus, higher and rising interest rates, and cresting world demand could leave the economy vulnerable to a contraction — just in time for the presidential campaign.
The deaths have their own unique causes. But with each fallen comrade, activists are left to ponder their own mortality and whether the many pressures of the movement contributed to the shortened lives of their colleagues. Along with the long hours, constant confrontation and frequent heartbreak they experience, activists work for little or no pay and sometimes struggle for basic needs like food and shelter even as they push for societal change.
Canyon Gate’s dilemma lays bare a defining feature of coastal life in a time of climate change: Many of the neighborhoods where we already live should never have been built in the first place, and doubling down on reconstruction could make the consequences of the next disaster much more severe. But doubling down is what speculators do, and — at least in the short term — they are profiting from their efforts.
That the U.S. invoked a rare sanction in a fellow NATO member-country shows the scale of the threat it perceives from this small corner of the European Union. A parade of American diplomats have visited Latvia in recent years saying that lax regulation allowed criminal or sanctioned entities to sneak ill-gotten fortunes into Europe. “It’s a national security issue,” U.S. Deputy Secretary of State John Sullivan told Latvian reporters in February, during a visit to Riga days after the U.S. sanctioned ABLV. “Security threats can take many forms, including corruption and efforts to undermine the integrity of the financial system,” he said.
Around 30,000 North Koreans have successfully defected to the South. But under the reign of the North Korean leader Kim Jong-un, far fewer people are getting out. The attitude of the Chinese government makes the journey even more dangerous. Although China’s relations with North Korea have soured, China pleases North Korea by detaining any defectors it finds and returning them to almost certain harsh imprisonment, and possible torture.
More apartments are being held off the market than ever. Some remain vacant for legitimate reasons. Almost 28,000 of those unused units have been rented or sold but not yet occupied, or are awaiting a sale. Almost 80,000 are getting renovated, 9,600 tied up in court, and 12,700 vacant because the owner is ill or elderly or simply can’t be bothered. But that still leaves more than 100,000 units — 74,945 occupied temporarily or seasonally, and 27,009 held off the market for unexplained reasons.
About 80 percent of Filipinos are Roman Catholic, and previous attempts to pass a divorce bill have faltered under the influence of the Catholic Church here, which vehemently opposes legislation that runs counter to its teachings. The divorce bill comes in the wake of a bitter battle over a reproductive health law that provides modern family planning education and free birth control for the poor. It took more than 13 years to pass into law, which occurred in 2012; it then languished in appeals for several years, and has yet to be implemented fully. Politicians who supported that measure were vilified by priests or threatened with excommunication.
CENTRAL BANKS & MONETARY POLICY
Ghana cut its benchmark interest rate to the lowest in four years as inflation is slowing toward the central bank’s target. The Bank of Ghana reduced the rate by 200 basis points to 18 percent, Governor Ernest Addison told reporters in the capital, Accra, on Monday. Underlying inflation pressures are subdued and price growth is moving toward the 6 percent to 10 percent medium-term target, he said.
USA ECONOMY DATA, CITIES AND STATES
Refinancings make up a smaller portion of the mortgage business than at any time in the past two decades, posing a challenge for lenders who already fear higher interest rates and climbing house prices could eventually depress purchase activity. Last year, 37% of mortgage-origination volume was because of refinancings, according to industry research group Inside Mortgage Finance. That is the smallest proportion since 1995, and the number of refinancings is widely expected to shrink again this year. In 2012, refinancings were 72% of originations.
Despite months of turnaround efforts, New York City’s subway system slid to a new low point in January, with just 58.1 percent of all weekday trains arriving at stations on time, according to a new report. The increasing delays were largely the result of bad weather that damaged equipment and caused widespread problems, including 25 days of below-freezing temperatures, according to officials of the Metropolitan Transportation Authority, which presented the report at a committee meeting on Monday.
GLOBAL ECONOMY, INTERNATIONAL
While there has been some ebbing in the first three months of the year, world gross domestic product is still expanding slightly above Goldman Sachs’ full-year forecast of 4.1 percent, according to their research note published Monday. The outlook is holding up despite tighter financial conditions and U.S. President Donald Trump’s moves to impose tariffs on $50 billion worth of Chinese goods and imported steel and aluminum, Goldman Sachs chief economist Jan Hatzius co-wrote with colleagues. Also, weaker first-quarter growth estimates for the U.S. and euro area reflect “seasonal and weather-related distortions,” they said.
Two of the world’s biggest oil traders gave China’s crude futures contract a go on its long-anticipated trading debut. Commodity giants Glencore Plc and Trafigura Group were among foreign participants as the yuan-denominated futures started on the Shanghai International Energy Exchange Monday. After an initial surge in volume that outpaced overnight transactions in global benchmark Brent crude in London, trading tapered off toward the end of the session and the contract closed at 429.9 yuan a barrel ($68.22).
POSITIONING, INFLECTION, MARKET CALLS
Nearly four weeks of escalating tensions over global trade have shaken up global markets, handing big returns to oil traders and leaving stock investors nursing losses. Havens like gold and German bunds are in demand but not U.S. Treasuries, which count China as one of their biggest holders. Emerging-market sovereign debt has lost less than half a percent while corporate bonds denominated in U.S. dollars have outperformed the currency itself.
First the longs got burned. And then the shorts got squeezed. Of course, that’s what happens in markets. But it’s been forever — 2 1/2 years, by one measure — since the S&P 500 Index has hosted this much drama. For three straight days, the benchmark for $29 trillion in equities has moved more than 2 percent, sinking to the worst week in two years before Monday’s stunning reversal.
While persistent leadership has helped the broad market avoid deeper losses, it also highlights a lingering danger for stocks: the risk that after everyone piled into the same winners, they’ll all try to jump out at the same time. Tech and consumer discretionary companies now occupy top rankings within the momentum trade that are “grossly” out of proportion with their share of the market, according to a Morgan Stanley note on Monday.
COLOR, EARNINGS, SENTIMENT, VALUATIONS
Germany’s largest bank has approached Richard Gnodde, a senior executive of Goldman Sachs, to take on Cryan’s role less than two years into his tenure, the newspaper said. Gnodde, who is a vice chairman of Goldman Sachs, is said to have been pursued by the lender amid a breakdown between Cryan and Deutsche Chairman Paul Achleitner, the Times said.
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
With the new proposal, GGP shareholders can choose to receive either $23.50 a share in cash, one Brookfield unit or shares of a new company. Brookfield plans to create a new real estate investment trust under the ticker “BPR,” which will qualify as a REIT for tax purposes and issue shares in this transaction.
ENERGY COMPANIES, NOCs, INDUSTRY
Chevron Corp. is studding the ocean floor with heavy-duty pumping gear as part of an effort to make deepwater oil discoveries competitive with shale. The idea is to force crude from newly-drilled wells in the deepest parts of the Gulf of Mexico to flow through miles and miles of pipe to platforms built a decade or more ago, said Jay Johnson, Chevron’s executive vice president for upstream. By lopping off the billions it would cost to construct each new platform, offshore exploration begins to make economic sense again.
China Petroleum & Chemical Corp., the world’s biggest refiner, will pay a record-high dividend as its massive fuels and chemical segments helped boost annual profit about 10 percent. Sinopec’s refining and chemicals divisions have continued to support its earnings, with margins from turning crude into fuels rising 7 percent and the company reported selling greater volumes of higher value-added products.
ENERGY CRUDE OIL, OIL SANDS, SHALE
Cenovus’ situation isn’t unique. After spending hundreds of millions of dollars building rail terminals able to handle more than a million barrels a day of oil, Canadian crude producers are discovering that all the loading capacity in the world isn’t sufficient if rail companies don’t provide enough locomotives, conductors and track space to transport the oil. “Everyone kind of fell into the train of thought, that when they needed the rail resources from the rail companies that they would be there,” Mike Walls, Genscape Inc. analyst, said in phone interview. “It’s been frustrating for crude-by-rail shippers.”
China’s purchases of ethanol from the U.S. climbed, with imports in coming months dependent on the Asian country’s plan to impose extra import duties that could wipe out the margin that’s seen buying surge this year. Imports of ethanol from U.S. totaled 189,035 cubic meters in February, the highest since May 2016, according to Chinese customs data. Purchases had slumped in 2017 after China imposed a 30 percent tariff on imports from the U.S.
China launched its long-delayed renminbi-denominated oil futures on Monday, as it establishes a pricing benchmark in the type of high-sulphur crude favoured by its refineries, wresting some control from Brent, the global oil standard, and US benchmark West Texas Intermediate. The contract is the first Chinese futures product that can be traded by overseas entities without a presence in China, representing Beijing’s latest step towards financial opening and to promote global use of its currency.
COMMODITIES BASE METALS, MATERIALS
A supplier of cobalt to Apple Inc. is joining with others in the industry to try to ensure the metal used in rechargeable batteries is sourced ethically after some mines in the Democratic Republic of Congo, the top producer, were found to be dangerous or employ child labor. China’s Huayou Cobalt Co. is among refiners, miners, gadget firms and global carmakers collaborating in the Better Cobalt trial project that seeks to track supply from Congo mines to the batteries used in phones and vehicles, said Nicholas Garrett, a director at the Better Sourcing Program running the pilot. He declined to name other members while contracts are being completed.
POLLUTION, CLIMATE & ENVIRONMENT
The amount of wintertime sea ice in the Arctic neared a record low this month, continuing a trend of shrinking ice at the top of the world, scientists announced. The 5.59 million square miles of sea ice was the second-smallest amount on record in the Arctic, according to NASA and the National Snow and Ice Data Center in Boulder, Colo.
“I went to the local market that I normally go to, and he suggested that I try some local honey for my cough,” Paule said. “He said you consume local honey because it has medicinal properties.” After he started to feel better, the couple also began to think about how urban blight contributed to allergies through overgrown ragweeds in abandoned areas. They put producing local honey and erasing urban blight together, and Detroit Hives was born.
BREXIT, SCOXIT, LONDON, UK ECONOMY
The prospect of more U.K. interest-rate increases is making Britons rush to lock in cheap home loans, according to data published Monday. Banking industry figures show that remortgage approvals increased almost 10 percent in February from a year earlier, while loans for house purchase have fallen. According to UK Finance, borrowers want to “lock in to attractive deals amid speculation of further interest rate rises later this year.”
In the see-saw world of British politics, Prime Minister Theresa May is on the way back up, buoyed by international support for her stand against Russia, just as opposition Labour Party leader Jeremy Corbyn is struggling with accusations of anti-Semitism. May’s patient and sometimes painful strategy of staying close to Donald Trump’s administration seemed to have paid dividends Monday when he ordered 60 Russian diplomats expelled from the U.S. over the nerve agent attack on an ex-spy on British soil. Fourteen EU countries also put aside differences over Brexit and announced similar sanctions in a coordinated move. Meanwhile Corbyn, whose internal critics have largely bitten their tongues since his unexpectedly good election performance in 2017, was the target of a demonstration outside Parliament led by Jews — and joined by some of his own lawmakers — who said he is too tolerant of anti-Semitism in his party.
Profits at the UK’s top 100 restaurant groups have fallen 64 per cent over the past year, from £345m to £125m, according to research by accountancy group UHY Hacker Young. Thirty-five of these chains are lossmaking — marking a 75 per cent increase compared with last year — as the restaurant sector struggles to cope with market saturation, rising costs and falling consumer confidence.
U.K. Brexit negotiators are developing a plan to solve the Irish border issue by keeping the whole of the U.K. aligned with a subset of the EU’s single market rules, according to British officials. The proposal — which also involves a wholly new U.K.-EU customs arrangement — aims to break the deadlock over the border question as both sides embark on a four-week push to rewrite the EU’s contentious “backstop” plan for avoiding a hard Irish border.
GEOPOLITICS, CRIME, TERRORISM
The Russian authorities looking into the cause of the fire in Kemerovo, an industrial city of about half a million people more than 2,000 miles east of Moscow, on Monday confirmed accounts that emergency exits at the mall had been blocked. They also said a security guard had switched off the fire alarm system. Relatives recounted hauntingly similar stories of speaking by phone to loved ones trapped in the flames — but being unable to help them.
European Union and Turkish leaders held a tense summit Monday, as friction over the Turkish president’s human-rights record eroded remaining hopes of the country’s accession to the EU and Western powers express concern over new military intervention by Ankara in the Syrian conflict.
Saudi Arabia said its air defenses destroyed seven ballistic missiles late Sunday, fired from neighboring Yemen and targeting at least four Saudi cities including the capital, Riyadh.
Congress has dramatically increased its budget for the Israeli missile defense programs by $148 million to include ongoing Iron Dome and Arrow 3 development. “I am pleased and excited to announce that the US Congress has approved a record sum for Israel’s missile defense program: $705m. in 2018!” Defense Minister Avigdor Liberman announced on Monday.
The United States military carried out its first ever drone strike against Qaeda militants in southern Libya this weekend, signaling a possibly significant expansion of the American counterterrorism campaign in the North African nation.
An 85-year-old woman who as a child narrowly escaped France’s most notorious wartime roundup of Jews has been murdered in Paris, and the authorities are calling it a hate crime. The Paris prosecutor’s office said on Monday that Ms. Knoll had been killed because of the “membership, real or supposed, of the victim of a particular religion” — a roundabout way of saying she was killed because she was Jewish.
A backbench Republican sparked the latest round of speculation Monday about Speaker Paul D. Ryan’s future by suggesting other GOP lawmakers were bracing for the Wisconsin Republican to resign from office this spring. The suggestion, offered as “rumor mill” by Rep. Mark Amodei (R-Nev.), drew an immediate dismissal from Ryan’s office. “The speaker is not resigning,” AshLee Strong, Ryan’s spokeswoman, said in a statement.
If Republicans want to hold onto the House, they will have to compete in communities that had little to do with the working-class regions that sent Trump to the White House in 2016: affluent, white-collar suburbs of Democratic cities. Many of the most competitive House seats this year are in the tony bedroom communities of Los Angeles, Chicago, Denver, Houston, Philadelphia, New York and Washington. The balancing act for these Republicans is appealing to moderate voters enraged by Trump while trying to avoid alienating a party base enamored with the president.
BANKS, BROKERS, INSURANCE, EXCHANGES
As clients’ habits evolve, firms have been finding ways to adapt popular retail technologies for the business world. While JPMorgan is one of the first to push the Alexa virtual assistant to institutional shops, other banks have been using the service in their consumer operations. And New York Life Insurance Co. is among financial companies building programs that use Alexa as a tool for employees.
SILICON VALLEY, UNICORNS, STARTUPS, VC
Uber Technologies Inc has agreed to sell its Southeast Asian business to bigger regional rival Grab, the ride-hailing firms said on Monday, marking the U.S. company’s second retreat from an Asian market.
Uber’s departure from Southeast Asia—where it relinquished its business to local rival Grab in exchange for a 27.5% stake—turns the spotlight squarely on its businesses in India and Brazil, the last populous emerging markets.
AEROSPACE, MILITARY & DEFENSE
SCIENCE, NATURE, HISTORY, PSYCHOLOGY
In his latest presentation, Dunning highlights the studies that collectively show how we repeatedly and consistently fool ourselves into thinking we know more than we do, and so convince ourselves that our opinion or choice is right—even when there’s absolutely no evidence to support this. There are dozens of studies supporting this hypothesis, showing, for example, that British prisoners rate themselves as more ethical and moral than typical citizens, and that people mistakenly believe they’re better than others at reaching unbiased conclusions.
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