Macro Links Nov 17th – Passing the House
You are viewing the Macro Links delayed archive. The real time Macro Links, posted each trading day, are available via the Mercenary Research Suite. To see how it works, click here.
MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- GOP TAX PLAN
- MUGABE ERA ENDING
- ROY MOORE, AL FRANKEN, DONALD TRUMP
- RUSSIA PROBE, MEDDLING FEARS
- SAUDI ARABIA
- BITCOIN ROLLER COASTER
- RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
- MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
- USA ECONOMY DATA, CITIES AND STATES
- GLOBAL ECONOMY DATA
- POSITIONING, INFLECTION, MARKET CALLS
- COLOR, EARNINGS, SENTIMENT, VALUATIONS
- DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
- ENERGY COMPANIES, NOCs, INDUSTRY
- ENERGY CRUDE OIL, OIL SANDS, SHALE
- ENERGY NATURAL GAS, COAL
- POLLUTION, CLIMATE & ENVIRONMENT
- FRONTIER MARKETS
- EMERGING MARKETS
- BREXIT, SCOXIT, LONDON, UK ECONOMY
- GEOPOLITICS, CRIME, TERRORISM
- TRUMP WORLD
- SCANDALS, LAWSUITS, FINES, REGULATORY
- SILICON VALLEY, UNICORNS, STARTUPS, VC
- MEDIA, CABLE, SPORTS, ENTERTAINMENT
- AUTOS, ELECTRIC, SELF-DRIVING
- AIRLINES, SHIPPERS, RAIL, TRANSPORTS
- SCIENCE, NATURE, PSYCHOLOGY
GOP TAX PLAN
House Republicans passed their version of legislation to overhaul the U.S. tax code by slashing the corporate tax rate, lowering tax burdens for most individuals and adding an estimated $1.4 trillion to the federal deficit over the next decade.
The tax overhaul still faces significant obstacles, as Republicans seek to align the House legislation with a version that is under consideration in the Senate.
A Quinnipiac poll released Wednesday finds voters disapprove of the Republican tax plan — there is one version in the House and one in the Senate — by 52-25 percent. Among Republican voters, 60 percent approve of the plan, 15 percent disapprove and 26 percent are undecided, while every other party, gender, education, age and racial demographic disapproved in the poll.
Having roared their way angrily through the Obama presidency as America’s national debt mounted, Republican deficit hawks have been strikingly quiet as their party races towards a tax package that some models suggest could add trillions more to US borrowing in the coming decades.
Republicans’ increasingly urgent dash towards tax reform has left US business struggling to keep up, forcing lobbyists to switch their focus from making big demands to asking for last-minute technical changes to preserve company profits.
President Donald Trump’s white working-class supporters don’t gain much from the Republican tax cut push. So far, they’re among its strongest early supporters anyway. But their personal loyalty to Trump and his party faces a big test from the tax cut debate — and spending cut debate soon to follow.
Republicans in the House of Representatives have just passed a tax bill that would devastate graduate research in the United States. Hidden in the Tax Cuts and Jobs Act is a repeal of Section 117(d)(5) of the current tax code, a provision that is vital to all students who pursue master’s degrees or doctorates and are not independently wealthy.
MUGABE ERA ENDING
When Zimbabwe’s generals moved against President Robert Mugabe on Wednesday, their action foreshadowed the potential end of more than just one political career. It echoed across a continent where the notion of the “big man” leader is defined equally by the lure of power in perpetuity and the risk that, one day, the edifice will crumble under the weight of its own decay.
President Robert Mugabe, who led the fight to topple white rule in his country and then held it under his sway for almost four decades, was confined on Wednesday to an opulent blue-roofed palace as his former military backers seized control of Zimbabwe’s state institutions.
The 93-year-old leader, who has ruled Zimbabwe since independence from Britain in 1980, has been resisting military pressure to publicly resign, said Ibbo Mandaza, a former senior member of the ruling Zanu-PF party. A Catholic priest has been mediating between Mr Mugabe and army chiefs and attended Thursday’s talks at State House.
ROY MOORE, AL FRANKEN, DONALD TRUMP
Donald Trump loves nothing more than a good controversy. But the president isn’t touching the Alabama Senate race, the biggest talker in American politics right now.
With less than four weeks until the special election and no sign that the party’s besieged nominee will exit the race, Senate Majority Leader Mitch McConnell and his top advisers are discussing the legal feasibility of asking appointed Sen. Luther Strange to resign from his seat in order to trigger a new special election.
The decision, which a committee of 21 party leaders reached Wednesday evening but did not formally announce until Thursday, placed the state’s Republicans at bitter and public odds with national party leaders, who had demanded that Mr. Moore leave the race here ahead of a special election in December.
Alabama Republican Senate candidate Roy Moore trails his Democratic opponent Doug Jones by eight points in the latest Fox News poll. The survey found that Moore, who is mired in a sexual misconduct scandal, pulls in just 42 percent among likely voters in the ultraconservative state, while Jones has 50 percent support.
A new Fox News poll shows former President Barack Obama is more popular in Alabama than Donald Trump. The poll, conducted from Monday to Wednesday and released Thursday, shows Obama with a 52 percent favorability rating in the state, compared to Trump’s 49 percent.
To evaluate whether a questioned signature is your signature, a document examiner would need a lot of other examples of your signature (Songer said he would need five to 10) to have enough evidence to determine whether the questioned signature was valid. For other handwriting, like the rest of the inscription, he would need much more: other examples of your known writing (that is, things proven to have been written by you) that would allow him to evaluate individual words and sentences.
What’s more, Songer said, those known writings would need to be contemporaneous to 1977, the year that the inscription was purportedly written. “Everybody’s writing eventually changes over time,” he said, meaning that a bunch of handwriting from 2017 wouldn’t necessarily provide the necessary information to evaluate writing from 40 years earlier.
“I went to my manager and talked to him about it and asked him, basically, what could be done,” Becky Gray told ABC News late Wednesday night. “Later on, he…came back through my department and told me that [Moore] had been banned from the mall.”
A radio host said Al Franken, now a Democratic senator, forcibly kissed and groped her in 2006, before he took office. He then apologized.
Sen. Al Franken (D-Minn.) is calling for an ethics investigation into his own behavior after a woman accused him of kissing and groping her without consent.
The woman who accused Sen. Al Franken (D-Minn.) of sexual misconduct said Thursday she accepts his apology.
“Things just seem to fall off of Trump, I’m extremely disappointed,” says Jessica Leeds, 75, who alleges Trump tried to kiss her, fondle her breasts and put his hand up her skirt while on a flight to New York in the early 1980s.
Their stories — like the harrowing one PEOPLE writer Natasha Stoynoff shared of Trump allegedly attacking her in 2005 by pushing her up against a wall at Mar-a- Lago and shoving his tongue down her throat — are backed up in most cases by co-workers, friends or family members.
And then there is Trump’s own words. In early October of last year came the infamous video showing Trump boasting to Billy Bush in 2005 of sexually assaulting women, that because he’s a star he can “grab them by the pussy.” Days later, Trump denied he ever did those things during the second presidential debate and dismissed the comments as “locker room talk.”
RUSSIA PROBE, MEDDLING FEARS
U.S. President Donald Trump’s son-in-law and close adviser, Jared Kushner, had at least three previously undisclosed contacts with the Russian ambassador to the United States during and after the 2016 presidential campaign, seven current and former U.S. officials told Reuters.
Jared Kushner received emails in September 2016 about WikiLeaks and about a “Russian backdoor overture and dinner invite” and forwarded them to another campaign official, according to a letter to his attorney from the bipartisan leaders of the Senate Judiciary Committee.
Judiciary Chairman Chuck Grassley and Democrat Dianne Feinstein wrote a letter Thursday to Kushner’s lawyer, Abbe Lowell, saying that Kushner didn’t turn over some documents first requested on Oct. 18, nor has he agreed to a transcribed interview. They said the documents include some related to his security clearance and his communications with former National Security Adviser Michael Flynn.
Reza Zarrab, whose trial for allegedly cheating U.S. sanctions is scheduled to begin in days, was secretly removed from a federal prison and may be working with prosecutors.
On Monday, May told the Kremlin, “We know what you were doing, and you will not succeed.” The warning exposed Europe’s growing alarm as Russian fighter jets probe its airspace and Russian bots steer its political debates. Spanish Defense Minister Maria Dolores de Cospedal made a similar allegation this week, saying Russian servers had been used to fuel online propaganda during the Catalan crisis.
More than 150,000 Russian-language Twitter accounts posted tens of thousands of messages in English urging Britain to leave the European Union in the days before last year’s referendum on the issue, a team of researchers disclosed on Wednesday.
At the same time, the telegram-channel Mash reports that Barashkov did not appear at work for three days, and when policemen showed up to him, it turned out that he was dead all this time and was lying in a filled bath with water.
King Salman of Saudi Arabia is planning to step down next week and name his son Prince Mohammed bin Salman as his successor, a source told DailyMail.com.
Saudi authorities are negotiating settlements with princes and businessmen held over allegations of corruption, offering deals for the detainees to pay for their freedom, say people briefed on the discussions. In some cases the government is seeking to appropriate as much as 70 per cent of suspects’ wealth, two of the people said, in a bid to channel hundreds of billions of dollars into depleted state coffers.
Saudi Arabia’s sweeping anti-corruption purge should be viewed “very positively” by potential investors in Saudi Aramco as a sign the kingdom is committed to economic reform, according to the state energy giant’s chief executive.
BITCOIN ROLLER COASTER
After erasing as much as $38 billion in market capitalization Monday following the cancellation of a technology upgrade known as SegWit2X on Nov. 8, the largest cryptocurrency came roaring back in to set the latest high.
While multiple reasons have been cited for the price volatility, one of the more viable is that some investors were switching to alternative coins. Bitcoin cash, an offshoot of bitcoin that includes many of the technical upgrades being debated by developers, had more than doubled in the same period.
The San Francisco-based firm will sell what it bills as digital-coin custodial services for money managers like hedge funds, sovereign wealth funds and family offices that have been hesitant to dive into the wild world of cryptocurrencies. The product, called Coinbase Custody, is designed for clients with stricter financial controls, Coinbase said.
Terry Duffy, CME chief executive, told the Financial Times he wants to lure a new generation of futures traders attracted by the cryptocurrency boom, although he acknowledges the challenges of creating a market infrastructure that can safely handle the hair-raising swings of bitcoin.
That may entail traders of CME bitcoin futures having to deposit close to 30 per cent of their value as collateral, says Mr Duffy, who is competing with a rival offering from Chicago neighbour, Cboe Global Markets.
A green-energy startup says it can solve bitcoin’s surging electricity consumption without boosting pollution, an issue threatening to halt the meteoric rise of the virtual currency.
The proliferation of bitcoin breakup plans highlights the double-edged sword of the cryptocurrency’s decentralized design; it allows for experimentation where ultimately the market will pick each coin’s value and use, but it can also get confusing and messy for users. The software underpinning bitcoin is open source, meaning anyone can simply copy it and make adjustments to form a new version of the coin if they have issues with the original. There’s also a profit motive: if offshoots are successful, the creators can earn windfalls by “pre-mining” coins for themselves or foundations they control.
RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
Under the plan unveiled earlier this month by Treasury, the department would increase the share of shorter-term debt issuance and reduce the share of longer debt issuance, ending a yearslong trend that favored long-term debt issuance.
S&P 500 companies are poised to have repurchased about $125 billion of their shares in the third quarter, in line with its quarterly average so far this year, according to data from INTL FCStone. That puts 2017 on pace for the least amount spent on buybacks since 2012.
“The deposit rate is minus 65 basis points, so a one-year bond at minus 55 basis points may look expensive, but not if you just need to place your money,” Ostergaard said.
The credit derivatives market is treating New Jersey’s largest homebuilder as if it’s about to default, even as its stocks and bonds show no signs of panic. Behind that disparity, a battle is raging among hedge funds, with one group saying that the other has offered the company, Hovnanian Enterprises Inc., financing in return for taking steps that would trigger payouts on those derivatives.
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
“Permanent drop in oil and gas prices” is not a phrase you throw around lightly in Oslo — nor, it should be said, in Riyadh, either.
Central bank openness and the unwillingness of policy makers to surprise investors was a powerful drug in the crisis, but leaks a slow poison into the markets. The result is that investors have piled on bad risks they would otherwise be unwilling to take on. It also degraded the quality of the signals markets send about the economy. Perhaps worst of all for central bankers, the transparency has conspicuously failed in its main job of getting investors to understand the policy process. Their magical aura is wavering, and the danger is the curtain is pulled back to reveal that mere economists control the monetary policy levers.
This is not a vigorous and healthy economy well able to take the shock of substantially worse access to its most important markets. It is absurd to suggest otherwise. The contempt many politicians on the right seem to feel for the UK’s European peers is particularly inappropriate. Policies aimed at improving economic performance across the board are essential, not least because economic disappointment must have been among the reasons for the Brexit vote. Yet the Brexit shock, combined with the UK’s underlying weaknesses, is likely to make the disappointment for many still more severe.
The UK has embarked on a risky voyage in a leaky boat. Beware a shipwreck.
Trump’s reluctance to act on his threats reflects a simple reality of transatlantic trade: The two spheres have become so intertwined after decades of expanding business ties that moves to impose high tariffs or other barriers would be severely damaging to both sides. The two trading blocs are one another’s largest trading partners and account for about 40 percent of global trade.
As an American, it is gratifying to see world trade becoming freer. Though the treaty is still imperfect, it does raise hope for more trade and therefore higher living standards. What is downright humiliating for Americans is that the treaty became better only after the US withdrew from it. Here we have an excellent test case of the role of the US in pushing global trade. It turns out that the US influence has been for the negative.
The rest of the world is starting to catch on. There will be no turning back from economic globalization. It will happen whether the US approves or not.
An on-the-ground investigation reveals that the U.S.-led battle against ISIS — hailed as the most precise air campaign in history — is killing far more Iraqi civilians than the coalition has acknowledged.
Our own reporting, conducted over 18 months, shows that the air war has been significantly less precise than the coalition claims. Between April 2016 and June 2017, we visited the sites of nearly 150 airstrikes across northern Iraq, not long after ISIS was evicted from them. We toured the wreckage; we interviewed hundreds of witnesses, survivors, family members, intelligence informants and local officials; we photographed bomb fragments, scoured local news sources, identified ISIS targets in the vicinity and mapped the destruction through satellite imagery. We also visited the American air base in Qatar where the coalition directs the air campaign. There, we were given access to the main operations floor and interviewed senior commanders, intelligence officials, legal advisers and civilian-casualty assessment experts. We provided their analysts with the coordinates and date ranges of every airstrike — 103 in all — in three ISIS-controlled areas and examined their responses. The result is the first systematic, ground-based sample of airstrikes in Iraq since this latest military action began in 2014.
We found that one in five of the coalition strikes we identified resulted in civilian death, a rate more than 31 times that acknowledged by the coalition. It is at such a distance from official claims that, in terms of civilian deaths, this may be the least transparent war in recent American history. Our reporting, moreover, revealed a consistent failure by the coalition to investigate claims properly or to keep records that make it possible to investigate the claims at all. While some of the civilian deaths we documented were a result of proximity to a legitimate ISIS target, many others appear to be the result simply of flawed or outdated intelligence that conflated civilians with combatants. In this system, Iraqis are considered guilty until proved innocent. Those who survive the strikes, people like Basim Razzo, remain marked as possible ISIS sympathizers, with no discernible path to clear their names.
The ability to cruise on the highway hands-free is a major step forward. For many drivers, systems that require them to keep their hands on the steering wheel seem almost self-defeating. What’s the point of having the car steer itself if your hands have to stay on the wheel?
The inventor of the world wide web always maintained his creation was a reflection of humanity – the good, the bad and the ugly. But Berners-Lee’s vision for an “open platform that allows anyone to share information, access opportunities and collaborate across geographical boundaries” has been challenged by increasingly powerful digital gatekeepers whose algorithms can be weaponised by master manipulators.
USA ECONOMY DATA, CITIES AND STATES
GLOBAL ECONOMY DATA
Germany enjoys the best reputation of any country in the world, according to the latest Nation Brands Index. The survey found that there is much more than Germany’s economic motor driving the positive image.
POSITIONING, INFLECTION, MARKET CALLS
COLOR, EARNINGS, SENTIMENT, VALUATIONS
The world’s biggest retailer posted its strongest quarterly U.S. sales growth in nearly a decade Thursday, boosted by a big jump in ecommerce and strong store traffic at a time when many traditional retailers are struggling to keep their business growing.
Most third-party sellers on Amazon do not collect sales tax. States, thirsty for the millions of dollars in unpaid revenue, are coming for the money.
Malone said any company that sells products to consumers is at risk of being crushed by the e-commerce giant. “If you’re in the B2C business, if you’re selling anything to any consumer anywhere on the planet, you gotta believe that Amazon is gonna have a look at that opportunity to commoditize you to use scale to serve the public,” he said. Bezos is “reducing cost to the consumer and providing great convenience … You just got to take your hat off and envy what he has built.”
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
Comcast and Verizon have separately approached Rupert Murdoch’s 21st Century Fox to explore potential combinations with the media company, a week after it emerged that Fox had held similar talks with Walt Disney.
One-time digital media darling Mashable has agreed to sell itself to trade publisher Ziff Davis for around $50 million, a fraction of the site’s valuation less than two years ago.
ENERGY COMPANIES, NOCs, INDUSTRY
Norway’s $1 trillion sovereign wealth fund proposed dumping about $35 billion in oil and gas stocks, including Royal Dutch Shell Plc and Exxon Mobil Corp., to protect the economy of western Europe’s biggest petroleum producer.
ENERGY CRUDE OIL, OIL SANDS, SHALE
ENERGY NATURAL GAS, COAL
POLLUTION, CLIMATE & ENVIRONMENT
The spill comes just days before a crucial decision next Monday by the Public Service Commission in Nebraska over whether to grant a permit for a new, long-delayed sister pipeline called Keystone XL, which has been mired in controversy for several years. Both are owned by Calgary-based TransCanada.
Madagascar is scrambling to contain its worst outbreak of plague in at least 50 years, with more than 2,000 cases reported and over 170 deaths.
Narendra Modi’s popularity in India remains undiminished after three eventful years as prime minister, reflecting his overwhelming political advantage as he approaches the next general election in two years’ time.
According to a public opinion survey conducted by the Pew Research Center, 88 per cent of Indians have a favourable view of Mr Modi, higher even than the figure for 2015 when the country rode a wave of optimism over its prospects under the then-new leader.
BREXIT, SCOXIT, LONDON, UK ECONOMY
The UK government is on the verge of giving up on its plan to put a specific date for Brexit into domestic law, after facing a rebellion of pro-EU MPs from within prime minister Theresa May’s Conservative party.
Soaring antidepressant usage, falling life expectancy: Blackpool embodies much of what is going wrong on the fringes of Britain.
Brussels views its free-trade agreement with Canada as the only realistic model for post-Brexit trade with the U.K., scotching British Prime Minister Theresa May’s hopes of a far broader bespoke deal.
The European Parliament might suspend Poland’s voting rights in the E.U. It would be the most serious rift yet with Warsaw’s right-wing leaders.
The European Commission has given the UK its backing in a bitter trade dispute with Washington, hitting out at US moves to levy punitive tariffs on aerospace group Bombardier, which employs thousands in Belfast.
GEOPOLITICS, CRIME, TERRORISM
It was the 10th time Russia had used its veto power to protect the Syrian government in the nearly seven-year-old war.
Kabul, Afghanistan — The officer threw his arms about the bomber as he rushed a gathering the officer was guarding. The policeman and 13 others died. But officials say the death toll could have been higher.
While much of the world celebrates the impending defeat of Islamic State, Israeli officials look at Syria and see little reason for joy. To them, a lesser enemy is being supplanted by a far more dangerous one—Iran and its allies.
The Trump Organization in New York is reportedly worth one tenth of the value it previously claimed. Donald Trump’s family business had previously ranked near the top of Crain’s New York Business’ list of largest privately held companies.
Before boarding Air Force One that would take him back to Washington, US President Donald Trump yesterday made sure his words would reach the ears of President Duterte.
“I don’t know Steve Bannon, don’t think I’ve ever met him,” Rove told me. “But, for him, it’s all personal.”
SCANDALS, LAWSUITS, FINES, REGULATORY
Wall Street banks secretly shared client information in online chat rooms in order to rig auctions for the $14 trillion US Treasurys market, according to an explosive lawsuit filed in Manhattan federal court on Wednesday.
SILICON VALLEY, UNICORNS, STARTUPS, VC
Sabre-rattling from a politician running for office and a long-time adversary looking for a new line of attack does not sound like the basis for a sustained regulatory attack. But the political mood in the US has shifted under Google in the last few months, as for other big tech companies. The question now is whether the spark in state capitals will be enough to touch off a wider conflagration.
Going beyond search, the internet giant is presenting itself as an oracle by promoting a single result over all others as a definitive answer. Many of these “featured snippets” are contentious, improbable or laughably incorrect.
MEDIA, CABLE, SPORTS, ENTERTAINMENT
Digital publisher BuzzFeed is on track to miss its revenue target for this year by a significant amount, the latest sign that troubles in the online ad business are making it tough for new-media upstarts to live up to lofty expectations.
AUTOS, ELECTRIC, SELF-DRIVING
The politics in Washington have not explicitly pushed carmakers to prioritize China. But the dueling approaches have added to a growing consensus among auto executives — even in the United States, where General Motors and Ford are planning to build more electric vehicles — that China will lead the world in the fast-growing sector.
AIRLINES, SHIPPERS, RAIL, TRANSPORTS
SCIENCE, NATURE, PSYCHOLOGY
The star, Ross 128, is not the closest with a planet similar in size to ours. That would be the sun’s next door neighbor, Proxima Centauri, just 4.2 light-years away. And there appears to be just one planet orbiting Ross 128 — not the bounty of seven Earth-size planets that circle Trappist-1, a red dwarf about 40 light-years from here.
But unlike those stars, Ross 128, about 11 light-years from Earth, appears to be a quiet, well-behaved star, without the violent eruptions of radiation that might wipe out any beginnings of life before they had a chance to take hold on the planet.
Octopuses and giant barrel jellyfish come and go in a town where Wales’s best-known alcoholic drank. The dolphins seem to be staying, so far.
With Alabama set to meet rival Auburn in the Iron Bowl later this month, it’s no surprise that fan arguments are escalating. But Monday, one Crimson Tide fan reportedly took things to the next level after allegedly shooting a Tigers fan in the thigh when a conversation about which team is superior escalated into violence.
William Dunniway, a tintype expert, said the photograph was almost certainly taken between 1875 and 1880. “Everything matches: the plate, the clothing, the firearm,” he said in a phone interview. Mr. Dunniway worked with a forensics expert, Kent Gibson, to conclude that Billy the Kid and Mr. Garrett were indeed pictured.
The resistance leader who took charge of Zimbabwe for 37 years.
The Mercenary Trader Macro Links were created by Justice “Jack” Litle, aka Justice Litle / Jack Litle — the founder of Mercenary Trader — to provide a compact summary of daily information flows. They are accessed via the Mercenary Research Suite, the flagship offering of Mercenary Trader, which combines trading education and trading research. To see how it works, click here.