Macro Links Nov 7th – “Act of War”

Macro Links Nov 7th – “Act of War”

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“ACT OF WAR,” SAUDI PURGE

Saudi Arabia Charges Iran With ‘Act of War,’ Raising Threat of Military Clash – The New York Times

Saudi Arabia charged Monday that a missile fired at its capital from Yemen over the weekend was an “act of war” by Iran, in the sharpest escalation in nearly three decades of mounting hostility between the two regional rivals.

“We see this as an act of war,” the Saudi foreign minister, Adel Jubair, said in an interview on CNN. “Iran cannot lob missiles at Saudi cities and towns and expect us not to take steps.”

17X07 - ACT OF WAR

Saudis accuse Iran of possible ‘act of war’ as regional tensions rise – The Washington Post

Questions about the aims and temperament of Saudi Arabia’s powerful crown prince came to the fore Monday after his country issued a bellicose warning to Iran, accusing it of carrying out a missile strike on the Saudi capital that may have constituted an “act of war.”

Several factors seemed to make the latest Saudi warning more dire, raising fears of a military escalation between the regional superpowers. Though it caused no casualties, the missile strike was among the deepest yet into Saudi territory during Yemen’s civil war, highlighting the Saudis’ continued vulnerability to such attacks despite an overwhelming military advantage over the rebels.

Saudi Arabia Blames Iran for Missile Attack – WSJ

Saudi Arabia intercepted the ballistic missile east of Riyadh’s main airport after it flew more than 500 miles from Yemen. It was fired by Houthi rebels, who are seen by Saudi Arabia as proxies of Iran.

The Saudi-led military coalition that has been at war with the Houthis in Yemen for more than 2½ years “considers this a blatant act of military aggression by the Iranian regime and could rise to be considered as an act of war against the Kingdom of Saudi Arabia,” according to a statement carried by the official Saudi Press Agency.

The Saudi crown prince just made a very risky power play – The Washington Post

MBS appears to be deliberately dismantling the traditional governance system in Saudi Arabia, which involved a slow, sometimes sclerotic process of consensus within the royal family. The young prince has instead seized executive power and wielded it aggressively to push his agenda.

“This is very risky,” the business leader said, because MBS is now challenging senior princes and religious conservatives simultaneously. The executive, who strongly supports MBS’s liberalization efforts, worried that “he’s fighting too many wars at once.”

Purge of Saudi princes, businessmen widens, travel curbs imposed

A campaign of mass arrests of Saudi Arabian royals, ministers and businessmen expanded on Monday after a top entrepreneur was reportedly detained in the biggest anti-corruption purge of the kingdom’s affluent elite in its modern history.

The reported arrest of Nasser bin Aqeel al-Tayyar followed the detention of dozens of top Saudis including billionaire investor Prince Alwaleed bin Talal in a crackdown that the attorney general described as “phase one”. The purge is the latest in a series of dramatic steps by Crown Prince Mohammed bin Salman to assert Saudi influence internationally and amass more power for himself at home.

Saudi Corruption Purge Snares $33 Billion of Net Worth in Riyadh – Bloomberg

The stunning series of arrests has implicated three of the country’s richest people, including Prince Alwaleed bin Talal, who’s No. 50 on the Bloomberg Billionaires Index ranking of the world’s 500 richest people, with $19 billion. Also being held are the kingdom’s second- and fifth-wealthiest people, as well as a travel-agency mogul and Bakr Binladin, a scion of a one of the country’s biggest construction empires.

For Investors, Saudi Crackdown Sparks Hope, Risks Uncertainty – WSJ

A far-reaching crackdown that extends into Saudi Arabia’s business elite has abruptly raised the stakes for global investors just as the kingdom embarks on a campaign to lure foreign capital to help overhaul its oil-dependent economy.

Oil climbs above $64 a barrel after Saudi crackdown

Oil surged above $64 a barrel to the highest level in two years on Monday after Saudi Arabia’s crackdown on dozens of princes and business tycoons raised concerns about stability and policymaking in the world’s largest crude exporter. The sharp move in Brent crude, the international benchmark, came shortly after Saudi officials warned that they had found “widespread corruption” among the suspects detained in the weekend sweep and threatened to freeze assets of those being held.

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TRUMP IN ASIA

Donald Trump accuses Japan of unfair trade practices

Donald Trump accused Japan of engaging in unfair trade practices on the first leg of his five-nation Asia tour, during which the American president will focus on improving the US trade balance and efforts to press North Korea to give up its nuclear weapons.

Trump Tells Japan It Can Protect Itself by Buying U.S. Arms – The New York Times

By turns generous and challenging, Mr. Trump saluted Prime Minister Shinzo Abe as among his best friends in the club of world leaders. But he railed against what he said were chronic trade imbalances with Japan. And he implicitly acknowledged his disappointment that Mr. Abe did not shoot down missiles that North Korea recently fired over Japan.

“He will shoot them out of the sky when he completes the purchase of lots of additional military equipment from the United States,” Mr. Trump said, standing alongside Mr. Abe at the Akasaka Palace in Tokyo. “The prime minister of Japan is going to be purchasing massive amounts of military equipment, as he should.”

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NORTH KOREA

Trump, Shinzo Abe Vow ‘Maximum Pressure’ on North Korea

“There has never been such a close relationship between the leaders of two countries,” Trump said, describing Japan as “a very special place.” He added that both men were “working to counter the dangerous aggression of the regime in North Korea,” which he called “a threat to the civilized world.”

South Korean Leader Boxed In as Trump Threatens North Korea – The New York Times

President Moon Jae-in’s plans for easing tensions with North Korea have gone nowhere, and his supporters worry the Trump administration may drag their nation into war.

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RUSSIA PROBE, CONNECTIONS

Carter Page’s testimony is filled with bombshells — and supports key portions of the Steele dossier

The House Intelligence Committee released a transcript of the former Trump campaign adviser Carter Page’s testimony before the panel last week. Some of the testimony supports details contained in what has become known as the Steele dossier. Page disclosed that he had met with Russian government officials and a top official at a state-owned oil giant during a 2016 trip to Moscow.

Trump adviser sent email describing ‘private conversation’ with Russian official – The Washington Post

Carter Page, a foreign policy adviser to President Trump’s campaign whose visit to Moscow during the election has drawn scrutiny, sent an email to fellow Trump aides during his trip describing “a private conversation” with a senior Russian official who spoke favorably of the Republican candidate, according to records released late Monday by congressional investigators.

Page also wrote that he had been provided “incredible insights and outreach” by Russian lawmakers and “senior members” of Russian President Vladi­mir Putin’s administration during the trip.

Russian Lawyer Who Met With Donald Trump Jr. Claims He Offered A Quid Pro Quo | HuffPost

“Looking ahead, if we come to power, we can return to this issue and think what to do about it,’’ Trump Jr. said during the June 2016 meeting, according to Natalia Veselnitskaya.

Russian Twitter Support for Trump Began Right After He Started Campaign – WSJ

Russian Twitter accounts began heaping praise on Donald Trump and ripping his rivals earlier than previously thought—within weeks after he announced his bid for the presidency in June 2015.

Paul Manafort Won’t Be Allowed to Take Off His Ankle Monitor

A federal judge denied the request. Trump’s former campaign manager remains in a “High Intensity Supervision Program.”

Top Wilbur Ross aide played a role in trade deal while on the board of shipping firm tied to Russia | APM Reports

The agreement with China will increase U.S. exports of liquid natural gas. Navigator Holdings, which could gain from increased drilling, has a business partnership with a Russian-owned firm and is partially owned by Ross via an offshore investment fund.

Trump’s commerce secretary Wilbur Ross has been lying about being a billionaire for years: report

“It seems clear that Ross lied to us, the latest in an apparent sequence of fibs, exaggerations, omissions, fabrications and whoppers that have been going on with Forbes since 2004,” the publication writes.

Forbes went on to interview ten former employees at Ross’s private equity firm, and they all painted a picture of a man who is serially dishonest about his net worth.

Parliament Asks Twitter About Russian Meddling in Brexit Vote – The New York Times

Following disclosures about the American presidential election, a lawmaker says that the same Russian-linked accounts posted tweets favoring Brexit.

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TEXAS SHOOTING

Texas Gunman Broke Child’s Skull, Assaulted Wife, in Troubled Life – The New York Times

Devin P. Kelley, a former member of the United States Air Force, had been jailed for domestic abuse, kicked out of the military and charged with animal cruelty.

For Tightknit Texas Town, Horror of Shooting Makes ‘No Sense’ – The New York Times

In the town of Sutherland Springs, everyone knew a victim of the massacre at the First Baptist Church, and some knew many.

Air Force Error Allowed Texas Gunman to Buy Weapons – The New York Times

The Air Force admitted that it didn’t enter Devin P. Kelley’s domestic violence court-martial into a database that could have prevented him from buying a gun.

Air Force says Texas shooter Devin Kelley’s violent past was not alerted to the FBI – The Washington Post

The Air Force faces scrutiny over whether it followed policies for alerting the FBI about the gunman’s criminal past.

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GOP TAX PLAN

Tax lobbyists sprint to win changes to House bill – POLITICO

House Republicans kept their tax bill under wraps for as long as possible to hold back a deluge of lobbyists. After trade groups spent the weekend poring over the details, the flood is on.

Tax Overhaul Faces Major Hurdles – WSJ

A House committee began considering a bill Monday that would reduce taxes by $1.4 trillion over 10 years, but disagreements over key pieces of the measure could force the GOP to make changes and slow down plans to pass it by year’s end.

Tax Policy Center retracts analysis of GOP tax bill – The Washington Post

The Tax Policy Center on Monday retracted its assessment of House Republicans’ tax bill after discovering an error in its model, a mistake that could complicate the effort to evaluate the legislation by an organization that has long enjoyed broad, bipartisan credibility.

Republican Plan Would Raise Taxes on Millions – The New York Times

The Republican tax bill would cut taxes on average, but it would raise them on millions of middle-class families, especially those with large medical expenses.

Republican Tax Rewrite Helps Some Millionaires but Hurts Others – The New York Times

The House tax overhaul raises taxes on high-income earners who make their money through labor, but delivers a huge tax cut to passive business owners.

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THE PARADISE PAPERS

Paradise Papers Shine Light on Where the Elite Hide Their Money – The New York Times

It’s called the Paradise Papers: the latest in a series of leaks made public by the International Consortium of Investigative Journalists shedding light on the trillions of dollars that move through offshore tax havens.

The core of the leak, totaling more than 13.4 million documents, focuses on the Bermudan law firm Appleby, a 119-year old company that caters to blue chip corporations and very wealthy people. Appleby helps clients reduce their tax burden; obscure their ownership of assets like companies, private aircraft, real estate and yachts; and set up huge offshore trusts that in some cases hold billions of dollars.

After a Tax Crackdown, Apple Found a New Shelter for Its Profits – The New York Times

Five months after Mr. Cook’s testimony, Irish officials began to crack down on the tax structure Apple had exploited. So the iPhone maker went hunting for another place to park its profits, newly leaked records show. With help from law firms that specialize in offshore tax shelters, the company canvassed multiple jurisdictions before settling on the small island of Jersey, which typically does not tax corporate income.

Apple has accumulated more than $128 billion in profits offshore, and probably much more, that is untaxed by the United States and hardly touched by any other country. Nearly all of that was made over the past decade.

Revealed: Queen’s private estate invested millions of pounds offshore | News | The Guardian

Millions of pounds from the Queen’s private estate has been invested in a Cayman Islands fund as part of an offshore portfolio that has never before been disclosed, according to documents revealed in an investigation into offshore tax havens.

Files from a substantial leak show for the first time how the Queen, through the Duchy of Lancaster, has held and still holds investments via funds that have put money into an array of businesses, including the off-licence chain Threshers, and the retailer BrightHouse, which has been criticised for exploiting thousands of poor families and vulnerable people.

Queen’s offshore investments revealed in document leak

The BBC said there was nothing illegal in the investments and no suggestion that the Queen was not paying tax. But it said questions might be asked about whether the monarch should be investing offshore.

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SEXUAL HARASSMENT

Harvey Weinstein’s Army of Spies | The New Yorker

In the fall of 2016, Harvey Weinstein set out to suppress allegations that he had sexually harassed or assaulted numerous women. He began to hire private security agencies to collect information on the women and the journalists trying to expose the allegations. According to dozens of pages of documents, and seven people directly involved in the effort, the firms that Weinstein hired included Kroll, which is one of the world’s largest corporate-intelligence companies, and Black Cube, an enterprise run largely by former officers of Mossad and other Israeli intelligence agencies. Black Cube, which has branches in Tel Aviv, London, and Paris, offers its clients the skills of operatives “highly experienced and trained in Israel’s elite military and governmental intelligence units,” according to its literature.

Roy Price’s Alleged Trail of Drinking and Sexual Harassment Challenges Amazon’s Culture – WSJ

Claims that go beyond previous reports simmered inside the e-commerce giant’s Hollywood unit. Some executives say the company’s policy of giving its business operations autonomy may have given Mr. Price extra leeway.

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RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS

Get Ready for Great Bond Bust of 2020 – Bloomberg

The “global savings glut” is perhaps the most famous theory behind the three-decade slump in bond yields. That glut has stopped growing, and will start shrinking in a few years, in a potential game changer for markets, Gavekal Capital Ltd. research indicates.

What propelled the glut was demographic patterns in big economies that saw a surge in the share of people aged 35 to 64, which tend to be years of high savings, Will Denyer, an economist at Hong Kong-based Gavekal, wrote in a report this month. When those demographic patterns reverse, the implication will be potentially “big rate rises” and the risk of a “major fall” in global equity valuations, he wrote.

17X07 - 35 TO 64 SAVINGS

BAML: Investors are continuing to misprice rate expectations – Business Insider

The firm notes that while the US rates market has repriced in recent months, it’s still unprepared for what it thinks will be the pace of rate increases over the next year or so. It also trails median forecasts from the Fed’s so-called dot plot, which summarizes rate forecasts from the members of the Federal Open Market Committee.

“Stronger growth is causing markets to reprice US rate expectations to the upside,” BAML investment strategist James Barty wrote in a client note. “Yet expectations remain well below the dot plot. We think further adjustment is needed, pushing yields and the USD higher into year end.”

17X07 - FED RATE EXPECTATIONS REMAIN TOO LOW

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MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS

Most Americans believe U.S. at lowest point in history – Axios

59% of Americans believe that the United States is currently undergoing the lowest point in its history, according to the American Psychological Association’s annual Stress in America poll. A majority of respondents in every surveyed age group agreed that America’s lowest point is right now. That includes 56% of those aged 72 and over, who lived through Pearl Harbor and WWII, and 59% of millennials, who largely came of age post-9/11.

100 years after the October revolution, the neo-Bolsheviks come from the right – The Washington Post

The neo-Bolsheviks of the new right or alt-right do not want to conserve or to preserve what exists. They are not Burkeans but radicals who want to overthrow existing institutions. Instead of the false and misleading vision of the future offered by Lenin and Trotsky, they offer a false and misleading vision of the past. They conjure up worlds made up of ethnically or racially pure nations, old-fashioned factories, traditional male-female hierarchies and impenetrable borders. Their enemies are homosexuals, racial and religious minorities, advocates of human rights, the media, and the courts. They are often not real Christians but rather cynics who use “Christianity” as a tribal identifier, a way of distinguishing themselves from their enemies: they are “Christians” fighting against “Muslims” — or against “liberals” if there are no “Muslims” available.

To an extraordinary degree, they have adopted Lenin’s refusal to compromise, his anti-democratic elevation of some social groups over others and his hateful attacks on his “illegitimate” opponents. Law and Justice, the illiberal nationalist ruling party in Poland, has sorted its compatriots into “true Poles” and “Poles of the worst sort.” Trump speaks of “real” Americans, as opposed to the “elite.” Stephen Miller, a Trump acolyte and speechwriter, recently used the word “cosmopolitan,” an old Stalinist moniker for Jews (the full term was “rootless cosmopolitan”), to describe a reporter asking him tough questions. “Real” Americans are worth talking to; “cosmopolitans” need to be eliminated from public life.

Surprisingly, given its mild and pragmatic traditions, even British politics is now saturated with Leninist language. When British judges declared, in November 2016, that the Brexit referendum had to be confirmed by Parliament — a reasonable decision in a parliamentary democracy — the Daily Mail, a xenophobic pro-Brexit newspaper, ran a cover story with judges’ photographs and the phrase “Enemies of the People.” Later, the same paper called on the prime minister to “Crush the Saboteurs,” choosing a word that was also favored by Lenin to describe legitimate political opposition.

The Saudi Royal Purge—with Trump’s Consent | The New Yorker

“It’s the equivalent of waking up to find Warren Buffett and the heads of ABC, CBS and NBC have been arrested,” a former U.S. official told me. “It has all the appearances of a coup d’état. Saudi Arabia is rapidly becoming another country. The kingdom has never been this unstable.”

“It’s an interesting form of dictatorship that is being created in Saudi Arabia,” Jamal Khashoggi, a prominent Saudi columnist and former editor and adviser to Saudi diplomats who is now in exile, told me. “M.B.S. is now becoming the supreme leader.” The only other country where that title is used is Iran, Saudi Arabia’s archrival.

The Trump Administration has heavily courted the House of Saud; Trump’s first foreign trip was to Saudi Arabia. Jared Kushner, Trump’s son-in-law, made an unannounced trip to the desert kingdom in late October—his third this year. Officially, the focus was the Middle East peace process, but he has developed a close relationship with the Saudi Crown Prince. (Both are in their thirties.) The royal family’s close ties to the Trump Administration have evidently made the king and his son feel comfortable about taking tough actions against their own people.

“The Saudi Vision 2030 is increasingly turning out to be a failure in economic terms. It has more and more the characteristics of a Ponzi scheme. This new city, Neom, in the Gulf of Aqaba that is supposed to attract five hundred billion dollars of investment and where normal rules of Saudi society aren’t going to apply—meaning women can do things—will have more robots than people. This isn’t serious. This is the kind of thing used to divert people from the real issues,” Riedel said.

The Crown Prince’s regional strategy has also either stalled or backfired, too. “His signature policy is the Yemen war, which has come home to haunt Riyadh,” Riedel, now at the Brookings Institution, said. “Its Qatar blockade is a failure. It wants Qatar to be like Bahrain, just an appendage. And Qatar hasn’t given in.”

Saudi Money Fuels the Tech Industry. It’s Time to Ask Why. – The New York Times

This presents a conundrum. Tech companies are fond of pseudo-revolutionary mission statements that extol the virtues of diversity, tolerance, freedom of expression and other progressive ideals. They have argued that their technologies are part of a force for global liberation — that forging more open communication and economic productivity through technology will loosen the grip of tyrannies across the globe. For much of the last year, Silicon Valley has also promised a revolution in its own culture, with large and small companies alike vowing to become more inclusive of women and minorities.

The money from regimes that have been criticized for their human rights records — from Saudi Arabia’s government in particular, which has plans to funnel potentially hundreds of billions of dollars into tech companies through its state-controlled Public Investment Fund — stands in stark contrast to those aims. By accepting these investments, tech companies get to revel in the branding glory of global good while taking billions from a government that stands against many of those goals — a government that has an abysmal record with human rights groups, that has systematically marginalized women, that has not had much legal due process and that has advocated an extreme form of Islam that has zero tolerance for just about any religious or intellectual diversity whatsoever.

The Paradise Papers Make the Republican Tax Plan Look Insane – VICE

Anyone who’s breathed air in the past 40 years understands that rich people and big corporations will do pretty much anything to avoid paying taxes. They hire sharp accountants, exploit loopholes, and use special tax havens to shield their money. In that sense, one could argue we didn’t exactly need the release of the Paradise Papers—the latest cache of internal documents detailing the who, where, and how of the global elite’s tax avoidance—to bolster our well-founded suspicions.

But the disclosure couldn’t have come at a better time. Incredibly, America is embarking on a tax rewrite that could benefit many of the same people and entities exposed in the Paradise Papers. Properly understood, what congressional Republicans and the White House are trying to do borders on obscene. They effectively plan to reward congenital tax evaders—not only with lower taxes, but with additional tools to keep their wealth out of reach.

China, Trump and the North Korean nightmare

Some Chinese experts appear to consider a radical alternative — perhaps Beijing should co-operate with the US, in a joint military action, aimed at toppling the Kim regime and seizing its nuclear weapons. Such a strategy would allow China to take active steps to defend its own security — rather than helplessly watching a conflict unfold from the sidelines. Offering to ally with the Trump administration might also allow China to secure a new “grand bargain” over postwar arrangements. The Chinese could, for example, look for guarantees that US troops would withdraw from a unified Korea — and might also seek concessions on other regional security issues, such as the status of Taiwan or the South China Sea.

Any joint military operations, however, would be fraught with risk. Above all, there is the fear that North Korea could launch a devastating retaliation — using either nuclear weapons or conventional artillery. To avoid this, one Chinese expert speculates that an attack on the Kim regime could begin by using an electromagnetic pulse weapon (EMP), designed to disable all electronic communication in North Korea — so making it impossible to co-ordinate defences or launch nuclear weapons.

However, while the US and China are both known to have worked on EMP weapons, they have never been used. It would be extremely risky to rely on an untried weapons system to disable the North Korean nuclear threat.

Wooing Trump, Xi Jinping Seeks Great Power Status for China – The New York Times

Chinese leaders have long sought to present themselves as equals to American presidents. Xi Jinping has wanted something more: a special relationship that sets China apart, as the other great power in an emerging bipolar world.

The Obama administration declined to play along, worried that it implied an American retreat from Asia. But Mr. Xi, the most powerful Chinese leader in decades, may find a more willing partner in President Trump, who is traveling to Beijing this week after stops in Japan and South Korea.

“The outcome of this clash of national ambitions will be one of the great, perhaps perilous stories of the next several decades,” said David M. Lampton, a professor at the Johns Hopkins School of Advanced International Studies.

Globalisation marches on without Trump

The problem for Mr Trump is that even as he tries to embrace allies in what his White House has taken to calling the “Indo-Pacific”, in pursuit of bilateral trade deals he has declared to be his preference, the US is already being written out of the script.

From Asia to Europe and Latin America other countries are striking trade deals and launching negotiations at an accelerating pace. Japan, Canada, Mexico and eight other countries that remained in the Trans-Pacific Partnership after Mr Trump pulled the US out of the trade pact are expected to announce at Apec that they will be moving ahead with the deal.

A few days later in the Philippines the leaders of 16 countries — including China, India, Japan and South Korea — are expected to declare progress towards a deal that, if successful, would see tariffs fall across a quarter of the global economy. The vehicle for that is the Beijing-led Regional Comprehensive Economic Partnership, once mocked by US officials as a clumsy effort to catch up with Washington’s own plans to write rules for the region.

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CENTRAL BANKS & MONETARY POLICY

RBA Shows Investment Confidence, Doubts on Consumer as Rate Held – Bloomberg

Australia’s central bank showed increasing confidence in the investment picture outside mining while retaining concerns about the prospects for household spending as it kept interest rates at a record-low 1.5 percent.

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USA ECONOMY DATA, CITIES AND STATES

Northeastern States Wager on Gambling Expansion – WSJ

The proliferation of legalized gambling in the Northeast is showing no signs of abating with states and developers continuing to push more casinos, in some cases to help fund state budgets and ward off competition.

In Maine on Tuesday, voters will decide via a ballot measure whether to create the state’s third casino.

In Pennsylvania, which already has the second-biggest gambling market in the U.S. after Nevada, the governor signed a bill last week that will significantly expand ways the Keystone State residents can wager. The bill allows for online gambling, new machines at airports and truck stops, and up to 10 new satellite casinos with as many as 750 slot machines and 30 tables.

“Pennsylvania really went for broke on this one,” said Joe Weinert, executive vice president at Spectrum Gaming Group, an
industry consultant. “Pennsylvania’s action is going to cause a lot of legislators’ eyes in other states to pop open.”

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COLOR, EARNINGS, SENTIMENT, VALUATIONS

Broadcom Bid Marks Upheaval in Chip Industry – WSJ

Broadcom made an unsolicited $105 billion takeover bid for Qualcomm, the chip industry’s boldest bet yet that size will equal strength at a time of technological upheaval. The approach, which would mark the biggest technology takeover ever, shows how tech companies are positioning themselves for a world where a range of chip-driven devices—from phones to cars to factory robots—are transmitting, receiving and processing evermore information.

Disney Approached 21st Century Fox to Buy Entertainment Assets – WSJ

Walt Disney Co. recently held talks to purchase a large chunk of 21st Century Fox’s entertainment businesses, people close to the talks said, signaling Disney is serious about bolstering its TV operations and Rupert Murdoch is open to a restructuring of his empire.

Red Robin Dives As It Lowers Financial Targets – WSJ

Shares in Red Robin Gourmet Burgers plummeted 19% in after-hours trading after the company reported profit and revenue that fell short of analysts’ estimates in its latest quarter and lowered its profit outlook for the year.

Priceline Shares Fall After It Lowers Profit Outlook – WSJ

Priceline Group Inc. lowered its profit outlook for the final quarter of the year even as it continued to report rapid revenue growth from customers booking vacations and hotels on its travel sites.

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FOREX, CRYPTOCURRENCY, EXCHANGE IMPACTS

Bears Say 70 U.S. Cents Looms for the Aussie Dollar – Bloomberg

Short the Australian dollar as the extra yield on the nation’s bonds over U.S. Treasuries is about to vanish. That’s the view of Aberdeen Standard Investments and AMP Capital Investors Ltd., saying the country’s yield premium will disappear for the first time since 2000 and may even become a discount. Disappointing economic data has spurred traders to push back forecasts for when the Reserve Bank of Australia will raise interest rates, sending the currency to three months of losses. The central bank kept its benchmark at a record low Tuesday.

“The RBA is on hold as far as the eye can see,” said James Athey, London-based senior investment manager at Aberdeen, which manages about $760 billion. “Many people still view the Aussie as having high carry when increasingly this is not as much the case.”

Hedge Funds Push the Price of Bitcoin to New Highs – The New York Times

The price of a single Bitcoin climbed from below $6,000 two weeks ago to above $7,400 on Monday, more than it moved in the virtual currency’s first seven years in existence.

Since the beginning of the year, the value of Bitcoin has jumped over 600 percent, putting the combined value of all Bitcoin at about $120 billion, or more than many of the largest banks in the world. The rise has been fueled by several factors, including the sudden interest in virtual currencies from small investors in Japan and South Korea.

Now market watchers say a significant amount of the new money is coming from large institutional investors, many of them hedge funds looking to capitalize on the skyrocketing price.

Many of the hedge funds were set up over the last year to invest exclusively in virtual currencies. The research firm Autonomous Next has said the number of such hedge funds has risen from around 30 to nearly 130 this year alone.

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HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT

Can Fund Manager Bill Miller Use Earthquakes to Predict the Market? – MoneyBeat – WSJ

Investor Bill Miller is hoping to develop a financial seismograph that would predict market shocks. He’s already testing out the idea in a personal portfolio.

So far Mr. Miller is testing the idea only in a private fund he runs for his family, Seismic Value Partners 1, that had about $15 million last December, according to a Securities and Exchange Commission filing. He isn’t using the technique in any of the accounts his firm, Miller Value Partners LLC of Baltimore, manages for outside investors.

“What we’re hoping to do is to have a quantitative model that would add value when the market’s going up and when it’s going down,” he says.

Using market prices and other measures, the system seeks to predict when conditions will favor buying or selling, and how aggressively the fund should buy or sell. It typically trades exchange-traded index funds tracking a wide selection of securities.

Dick Fuld makes quiet comeback on Wall Street

Last summer the former chairman and chief executive of Lehman joined forces with a couple of old associates to launch Matrix Wealth Partners, a New York-based firm focused on providing corporate finance advice to wealthy families. On Monday the firm rebranded as Matrix Private Capital Group, announcing a broader array of wealth and asset management services and a push into new markets in Florida and California.

The Park Avenue-based firm, which now manages liquid assets of more than $100m for 18 families, is offering private equity-style investments as well as a new fund which will buy public equities, focusing on a few “high-conviction” long and short ideas, according to Matt Rubin, one of four senior partners.

The firm is also opening new offices in Palm Beach and Los Angeles, seeking to attract new clients with what Mr Rubin called “a holistic approach to [their] entire balance-sheet, versus the traditional wealth management approach, which focuses only on the liquidity in the portfolio”.

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COMMODITIES AGRICULTURE & SOFTS

As Wild Salmon Decline, Norway Pressures Its Giant Fish Farms – The New York Times

Once a rarity on global dinner tables, salmon is a staple today, thanks to a fish farming industry that has expanded at breakneck speed in recent decades, including in Norway, where in 2016 around 1.18 million metric tons were produced.

But now, Norwegian fish farmers face new curbs designed to protect the country’s stocks of wild salmon, rules that have ignited anger from the industry and its opponents, prompting threats of court challenges from both sides.

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EMERGING MARKETS

Red-Hot IPOs an Ominous Sign for India’s Record Stock Rally – Bloomberg

India’s red-hot IPO market doesn’t bode well for the nation’s record-beating rally. The NSE Nifty 50 Index has slid an average 10 percent to 12 percent in the one to three months after every share sale exceeding 55 billion rupees ($850 million) since 2000, said Ninad Tamhanekar, an analyst at IndiaNivesh Securities Ltd. New India Assurance Co. topped that mark last week, at least the fourth such offering from an insurer that’s tapped markets since September.

India’s Businesses Have Lost Confidence – WSJ

Companies in India say they have stopped or slowed investments in expansion and banks have curtailed lending, after last year’s cash crackdown and other policy changes.

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CANADA, AUSTRALIA, NEW ZEALAND

Ready or Not, Recreational Marijuana Use Is Coming to Canada – The New York Times

Only months before legalization, many questions on how marijuana markets will operate and be regulated remain unanswered. Some are calling for a delay.

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DACA, TRAVEL BAN, IMMIGRATION, WALL

DHS ends protected immigration status for Nicaraguans, but Hondurans get extension – The Washington Post

The Trump administration has given 2,500 Nicaraguans with provisional residency 14 months to leave the United States, announcing Monday that it will not renew the Temporary Protected Status (TPS) designation that has allowed them to remain in the country for nearly two decades.

But Trump officials deferred a decision for the much larger group of 57,000 Hondurans who have been living in the United States with the same designation, saying the Department of Homeland Security needed more time to consider their fate.

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TRUMP WORLD

“Just do it”: Trump urged tribal leaders to ignore federal law

In late June, President Trump hosted a group of Native American tribal leaders at the White House and urged them to “just do it” and extract whatever they want from the land they control.

The exchange turned out to be an unusually vivid window into the almost kingly power that Trump sees himself as holding, and which he has begun describing with increasing bluntness. The scene was recounted by a source in the room and confirmed by another. The White House didn’t dispute the story.

The chiefs explained to Trump that there were regulatory barriers preventing them from getting at their energy. Trump replied: “But now it’s me. The government’s different now. Obama’s gone; and we’re doing things differently here.”

Trump demanded bodyguard go get McDonald’s after White House chefs failed to recreate fast food

President Donald Trump loves his fast food so much he demanded the White House recreate some of his favorites. When they were unable to replicate it exactly, Trump sent his bodyguard out to McDonald’s.

Trump tells Japanese dignitaries he never knew there were ‘so many countries’ until he was elected

“So my relationship with Shinzo got off to quite a rocky start because I never ran for office, and here I am,” Trump remarked. “But I never ran, so I wasn’t very experienced. And after I had won, everybody was calling me from all over the world. I never knew we had so many countries.”

TOP

HEALTHCARE, TAX REFORM, BUDGET

ObamaCare signups surge in early days to set new record | TheHill

A record number of people signed up for ObamaCare in the first few days of open enrollment this year compared to the same period in previous years, several sources close to the process told The Hill.

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TRADE, PROTECTIONISM, REGULATION, OVERSIGHT

Mexico prepares for potential loss of Nafta

Mexico is increasing efforts to diversify its markets and introduce new investor protections as it prepares for the possibility that negotiations over the future of the North American Free Trade Agreement could break down.

Negotiators are increasingly concerned that they will not be able to bridge gulfs between the US and Mexico in the talks. Sticking points include Washington’s proposed “sunset clause” that would kill off the pact unless it is renegotiated every five years, and its demands for higher US content in regionally-made cars.

Mexican officials are therefore encouraged by signs that new markets are opening up.

While the country is heavily dependent on the US for both imports and exports, it has imported more yellow corn from Brazil and Argentina in September than in the whole of 2016.

“Uncertainty is going to play into the decisions of companies — if they no longer have a reliable source of imports, they’re going to look for one,” said one senior government official who asked not to be named. “The numbers are small so far but this is just a little taster of what they could do.”

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ELECTORAL POLITICS

Sen. Rand Paul’s injuries far more severe than initially thought – The Washington Post

He suffered broken ribs and lung bruises during attack; it’s unclear when he will return to Washington.

Rand Paul Faces Prolonged Absence From the Senate – WSJ

Sen. Rand Paul faces the possibility of an extended absence from the Senate as he recovers from serious injuries that he suffered on Friday after police said he was attacked by a neighbor at his Kentucky home.

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BANKS, BROKERS, INSURANCE, EXCHANGES

Wells Fargo Launches Robo-Investment Service – WSJ

Wells Fargo & Co. is rolling out a new robo advisory service to attract more of its retail clients to its brokerage arm, joining a growing roster of firms leveraging the digital tools favored by many young investors.

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AUTOS, ELECTRIC, SELF-DRIVING

Tesla Acquires Automated Machine Maker Amid Production Problems – Bloomberg

Tesla Inc. has acquired Perbix, a closely held maker of automated machines used for manufacturing, as the electric-car maker struggles to boost production of its most important new model.

Tesla’s Director Of Battery Engineering Is Out

Tesla is currently working to address manufacturing issues at its Gigafactory in Nevada, which led to a three month delay in the production schedule of the Model 3 sedan. At the same time, Jalopnik has learned the company’s director of battery engineering left the company in recent weeks.

Jon Wagner, who joined Tesla in 2013, worked as the team leader for battery pack design engineering at the automaker and helped develop technology in the Model S, X, and 3, according to his LinkedIn profile. He also served as Tesla’s interim director for battery manufacturing, body engineering and computer aided engineering, his LinkedIn page says.

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ARTIFICIAL INTELLIGENCE, DRONES, FUTURE TECH

A.I. Researchers Leave Elon Musk Lab to Begin Robotics Start-Up – The New York Times

Their start-up, Embodied Intelligence, is backed by $7 million in funding from the Silicon Valley venture capital firm Amplify Partners and other investors. The company will specialize in complex algorithms that allow machines to learn tasks on their own. Using these methods, existing robots could learn to, for example, install car parts that aren’t quite like the parts they have installed in the past, sort through a bucket of random holiday gifts as they arrive at a warehouse, or perform other tasks that machines traditionally could not.

TOP

MISCELLANEOUS

Koenigsegg Agera RS becomes the world’s fastest car | Daily Mail Online

The Koenigsegg Agera RS has smashed the world record for the fastest production car after clocking an average speed of 277.9mph over two runs down a highway in the Nevada desert.

17X07 - AGERA RS

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