Macro Links Oct 25th – Einstein’s Theory of Happiness

Macro Links Oct 25th – Einstein’s Theory of Happiness

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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)

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SENATOR JEFF FLAKE

Jeff Flake: “Enough” – The Washington Post

“I have decided that my time in the Senate will end when my term ends in early January 2019. For the next 14 months, relieved of the strictures of politics, I will be guided only by the dictates of conscience.”

Trump Has Destroyed the Republican Party, Exiting Senator Jeff Flake Says

“Here’s the bottom line: The path that I would have to travel to get the Republican nomination is a path I’m not willing to take, and that I can’t in good conscience take,” Flake told The Arizona Republic before took the floor. “It would require me to believe in positions I don’t hold on such issues as trade and immigration and it would require me to condone behavior that I cannot condone.”

Jeff Flake speech: Senator announces he will not seek re-election

In a stunner, Sen. Jeff Flake of Arizona says he “can’t in good conscience take” the path necessary to win the GOP’s renomination in the age of Trump.

Jeff Flake, a Fierce Trump Critic, Will Not Seek Re-election for Senate – The New York Times

Mr. Flake, a Republican of Arizona, said he would “no longer be complicit or silent” in the face of the president’s “reckless, outrageous and undignified” behavior.

Full Transcript: Jeff Flake’s Speech on the Senate Floor – The New York Times

The Republican senator from Arizona delivered a statement on Tuesday about the state of American politics after announcing his retirement from the Senate.

Donald Trump has now personally attacked 1 in 5 Republican senators – CNNPolitics

Just hours before President Donald Trump is set to head to Capitol Hill to meet with Republican senators over lunch, he took to Twitter to attack one.

Corker: I won’t support Trump for election again | TheHill

“Let’s just put it this way: I would not do that again. … I think [Trump’s] proven himself unable to rise to the occasion,” Corker told CNN, asked if he regretted supporting him in the 2016 presidential race.

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JEFF FLAKE OPINION

Flake’s Blistering Attack on Trump Is the Latest Crack in GOP Unity – Bloomberg

The broadsides from Corker and Flake could hardly come at a worse time for Republican leaders in Congress, who are eager to project unity on a tax plan that is at the center of Trump’s agenda. While Corker and Flake aren’t likely to shift from their general support for tax cuts, their statements may make it tougher for the White House to build public backing by drawing attention to Trump’s repeated squabbling with lawmakers and other world leaders and what Corker called his “untruths.”

Rift Widens Within GOP in Battle for Control of Party – WSJ

As Republicans’ internal battles spilled into public view, they raised new questions about whether the party with political control in the nation’s capital can come together to pass a sweeping rewrite of the tax code—a daunting task under the best of circumstances.

Another Republican Call to Arms, but Who Will Answer? – The New York Times

Well aware of the mercurial nature of the president, most congressional Republicans are loath to do or say anything that could upset Mr. Trump and risk provoking an early-morning Twitter tirade from the White House when they are trying to delicately piece together a complex tax agreement. One can practically sense Republicans tiptoeing around the Capitol, taking extra care not to awaken the president to their presence in a way that could draw a scolding or rebuke.

Jeff Flake’s Defiant Surrender – The New York Times

If Corker really means what he keeps saying about the danger posed by Trump’s effective incapacity, he should call openly for impeachment or for 25th Amendment proceedings — and other anti-Trump Republicans should join him. If Flake really means what he said in his impassioned speech, and he doesn’t want to waste time and energy on a foredoomed Senate primary campaign, then he should choose a different hopeless-seeming cause and primary Trump in 2020. George W. Bush should endorse him. So should McCain, and Corker, and Romney, and Kasich, and Sasse, and the rest of the anti-Trump list. They should expect to lose, and badly, but they should make Trump actually defeat them, instead of just clearing the field for his second nomination.

Jeff Flake Quitting and the Republican Response to Trump

If there ever was needed more evidence that movement conservatism, in its not-entirely-insane persona, is a spent force in American politics, watching Flake and Corker go scarpering away from public service would be it. Reaganism is long gone, and its pale progeny has been rendered irrelevant in the face of outright political thuggery. For Republican conservatives, it is Trump or the abyss.

Jeff Flake retiring proves he isn’t brave, he’s helpless – Business Insider

Flake is helpless because there’s no real constituency in America for what he favors: low taxes and spending, openness to immigration and trade, international collaboration where America honors its commitments, and polite public behavior.

There is one coalition of voters that favors a much larger and more active government than Flake wants. Many of these voters share a portion of Flake’s values (they may share his commitment to openness and politeness, for example) but they also oppose him on various social issues where he is conservative and they are liberal. Flake does not have a home in the Democratic Party with these voters.

The other coalition of voters is the one Flake relied on all along to get elected. But it turns out they don’t care very much about some of the policy ideas Flake thought were important. And they outright oppose him on others, like immigration. And many of these voters have come to view nastiness and crudity as virtues, since they think politeness norms have been weaponized by an establishment that wants to exclude them — or just because they are jerks.

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THE RISE OF XI

China unveils new leadership, grants Xi Jinping five more years as leader — with no obvious successor in sight – The Washington Post

On Tuesday, the Communist Party amended its constitution to insert Xi Jinping Thought as a guiding principle for the party, elevating Xi to the same status as its most important historical figures, Mao Zedong and Deng Xiaoping. That means that Xi is likely to wield ultimate authority in the party as long as he is alive, experts say, and makes any challenge to that authority tantamount to an attack on the party itself.

China’s Xi Promotes No Clear Heir, Opening Door to Stay in Power For Decades – Bloomberg

Chinese President Xi Jinping unveiled a new leadership line-up that included no clear potential heirs, breaking with a quarter-century-old succession system and raising the chances that he might seek to stay in office beyond 2022.

All five men appointed to join Xi and Premier Li Keqiang on the Politburo Standing Committee will be too old to rule for a decade after Xi finishes his second term. Those promoted were Xi chief of staff Li Zhanshu, 67; Vice Premier Wang Yang, 62; party theorist Wang Huning, 62; party personnel chief Zhao Leji, 60; and Shanghai party secretary Han Zheng, 63.

China’s ‘Chairman of Everything’: Behind Xi Jinping’s Many Titles – The New York Times

Xi Jinping of China has so many titles — more than a dozen and counting — that he has been called “chairman of everything.”

He is president, general secretary of the Communist Party and chairman of the Central Military Commission, to name a few. He leads working groups on issues as varied as Taiwan and internet security, and he has been hailed as the party’s “core leader.”

What do all the titles mean? And why do they matter? Here’s a guide.

China’s Xi Jinping opens door to long-term rule

The Chinese Communist party has failed to designate a clear potential successor to its sitting general secretary for the first time in more than a quarter of a century, raising the possibility that Xi Jinping will attempt to remain in power well into the next decade.

Ruthless and Cloaked: Beijing Pushes Its Secretive Power Abroad – WSJ

In China, Communist Party secrecy is accepted as a fact of life. As Beijing’s influence grows under Xi Jinping, the rest of the world will have a harder time with this arrangement.

When China was poor and backward, its unexplained leadership convulsions caused barely a ripple outside its borders. It was fodder for China watchers. Among the most eminent of these, the Belgian scholar Pierre Ryckmans, once wrote that trying to decipher Chinese politics was like looking at “nonexistent inscriptions written in invisible ink on blank pages.”

China has become richer but the party hasn’t become any more transparent. Increasingly, economic, diplomatic and military power in the 21stcentury will emanate from an organization that was born in secrecy and still obsessively guards its inner workings.

The just-concluded 19th Party Congress has confirmed the party’s reading of a historical progression: Under Mao, China stood up; under Deng, it prospered, under Mr. Xi, it has grown powerful. China now seeks to shape the global system.

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RUSSIA PROBE, NEW CLINTON INQUIRIES

Former Trump Campaign Chairman Paul Manafort Faces Another Money-Laundering Probe – WSJ

The Manhattan U.S. attorney’s office is pursuing an investigation into possible money-laundering by Paul Manafort, said three people familiar with the matter, adding to the federal and state probes concerning the former Trump campaign chairman.

GOP Leaders Refusing to Pay for Dana Rohrabacher’s Travel Over Russia Fears

The California congressman had to pay his own way to visit Julian Assange this past August.

Democrats denounce new Hillary Clinton email probe as ‘massive diversion’ from Trump-Russia investigation | The Independent

Democrats have denounced as a “massive diversion” from the Trump administration’s alleged links to Russia, a decision by Republicans to launch investigations into the FBI’s handling of a probe into Hillary Clinton.

Courting Democratic Ire, Republicans Open New Obama-Era Inquiries – The New York Times

The House Judiciary, Intelligence and Oversight Committees announced a pair of new investigations into Obama administration actions connected to Hillary Clinton.

Clinton campaign, DNC paid for research that led to Russia dossier – The Washington Post

The Hillary Clinton campaign and the Democratic National Committee helped fund research that resulted in a now-famous dossier containing allegations about President Trump’s connections to Russia and possible coordination between his campaign and the Kremlin, people familiar with the matter said.

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CRYPTOCURRENCIES, ICOs

Bitcoin Is Paying Out Dividends Now — Just Not to Everyone – Bloomberg

A split in the blockchain created a new offshoot in the form of bitcoin gold on Tuesday, with bitcoin holders receiving one unit for every bitcoin they own, according to the offshoot’s developers. The cryptocurrency fell from a record high after the so-called hard fork, just as stocks typically drop after going ex-dividend. Other major digital currencies including ethereum gained, as investors sold bitcoin and moved the cash to alternatives, said Gavin Yeung, chief executive officer at investment company Cryptomover.

ICOs: Risk of scams and return of boiler rooms, new standards manifesto – Business Insider

Boiler rooms are brokerages that sell stock over the phone using dishonest tactics or outright lies, essentially ripping off investors to get a commission for themselves. A good example is the office in the film Wolf of Wall Street. The man who inspired the film this week said ICOs are “far worse than anything I was ever doing.”

Jackson expressed alarm that many ICOs were being advertised on social media platforms like Twitter and messaging app Telegram. Adverts on these platforms often emphasis demand for the investments they are selling without warning of the risks associated.

Japan experiments with cryptocurrencies

As cryptocurrencies draw both greater interest and scrutiny in countries from the US to Switzerland, Japan has quietly become one of the largest hubs for trading bitcoin.

While China’s recent clampdown has added momentum to the market, Japan already offers those pushing virtual currencies a public that historically has been prepared to experiment in the search of investment returns.

The government, in turn, is now regulating the market — a move that the industry says has only broadened the base of those willing to make a bet on bitcoin, which has surged almost sixfold so far this year.

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PUERTO RICO

‘Like Going Back in Time’: Puerto Ricans Put Survival Skills to Use – The New York Times

More than a month after Hurricane Maria tore through Puerto Rico on a path of destruction that spared no region, race or class, residents of the island have found their creativity stretched to the limit as they try to function without many amenities of the modern world.

It is not just water and electricity that are in scarce supply. Cellphone service ranges from spotty to nonexistent. Cars are damaged and roads blocked. For many, work and school still have not resumed, so they wander the streets, play board games and sit around telling stories by candlelight.

“It’s like going back in time,” said Kevin Jose Sanchez Gonzalez, 25, who has been living in darkness since Sept. 5, the day before a previous storm, Hurricane Irma, began to chip away at Puerto Rico’s electrical grid.

Some Schools Reopen in Puerto Rico, Making Do Without Power – The New York Times

The resumption of classes at the school on Tuesday was a joyous, achingly needed milestone on the plodding path back to normality in Puerto Rico’s newest era: After Maria. But the island’s education system is hardly picking up where it left off before the storm.

Only 98 of the island’s public schools reopened on Tuesday, 9 percent of the total, and the ones that did were in San Juan and Mayagüez, two major cities. Another 112 schools in those areas will open as soon as their final paperwork is turned in.

Few, if any of the reopened schools have generators, or internet access, or air-conditioning. School days have been slashed in half, at least for now. And the students — the ones who have not moved to the mainland — must bring their own water bottles and douse themselves in repellent to fend off the island’s mosquito invasion.

Democrats call for investigation into Puerto Rico utility deal | TheHill

Whitefish is a two-year-old company that had only two employees when Maria struck Puerto Rico last month. As of Monday, it said it had 280 employees in Puerto Rico, mostly contractors.

The company is based in the small Montana home town of Interior Secretary Ryan Zinke. Zinke’s office told the Post he knows the company’s CEO and that one of his sons worked at the firm as a summer job. But the agency and company executives said Zinke had no role in the company’s Puerto Rico contract.

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FACEBOOK, TWITTER BACKLASH

Twitter Plans to Open Ad Data to Users – The New York Times

Twitter said on Tuesday that it would bring more transparency to advertisements on its site, including political ads, in the latest response by a technology company to criticism about its role in spreading foreign propaganda during the 2016 presidential campaign.

The company said that under its new rules, users would be able to see who had created an ad, how long an ad had been running and how the ad was targeted toward a specific user.

Political ads for a candidate or party would carry a special label to make them stand out. Twitter said it would disclose who had paid for the election advertisement and allow users to find information about the buyer, including ad spending history and ad targeting practices.

Twitter will label political ads, including who bought and spend

Twitter said in a blog post on Tuesday it would clearly label political electioneering ads, which the Federal Election Commission (FEC) defines as an ad used to promote a specific candidate for elected office or affiliated party posted within 30 days of a primary election or 60 days of a general election. Electioneering ads can also include any ad clearly promoting a political candidate at any time.

The ads will have some sort of visual marker, likely a purple dot next to the user handle, and a purple box with the text “Promoted by” and the name of the sponsor.

In addition, the company will limit which criteria can be used to target people and will introduce a “stronger” penalty on those who do not abide by the new rules. The company did not say what the tougher standards or penalties will be.

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BREXIT

Michael Bloomberg: Brexit is stupidest thing any country has done besides Trump | Politics | The Guardian

Michael Bloomberg, the billionaire media mogul and former mayor of New York, has said Brexit is the “single stupidest thing any country has ever done” apart from the election of Donald Trump as US president.

Bloomberg argued that “it is really hard to understand why a country that was doing so well wanted to ruin it” with the Brexit vote, in a series of outspoken remarks made at a technology conference in Boston a fortnight ago.

Future of Brexit is up to UK, Tusk warns May

Donald Tusk, who chaired last week’s EU summit in Brussels as European Council president, raised the pressure on Mrs May — buffeted by infighting in her Conservative party over Brexit — by saying it was the responsibility of her government to decide how negotiations would proceed.

“This is in fact up to London how this will end: with a good deal, no deal or no Brexit,” Mr Tusk told the European Parliament in a post-summit report.

The Brexit economy: the storm clouds are gathering | Business | The Guardian

The Bank of England is seriously considering raising rates for the first time in 10 years against a backdrop of lacklustre economic growth, as a Guardian analysis shows the Brexit vote sapping business confidence and hitting household income.

As Mark Carney, the Bank’s governor, prepares to hike the cost of borrowing for the first time since 2007 from as soon as next week, key barometers of economic strength are faltering. Nevertheless, City analysts expect Carney and his panel of rate setters on the monetary policy committee to vote for a rate hike on 2 November.

Threadneedle Street is thought to have backed itself into a corner – with financial markets reckoning there is an 80% chance of a hike – after the MPC said at its last meeting in September it could move to increase rates within the “coming months”. Stepping back from the brink may now cause the pound to fall and would undermine the central bank’s credibility, having been called an “unreliable boyfriend” once before for failing to act on its hints.

Universities deplore ‘McCarthyism’ as MP demands list of tutors lecturing on Brexit | Education | The Guardian

Academics are accusing a Tory MP and government whip of “McCarthyite” behaviour, after he wrote to all universities asking them to declare what they are teaching their students about Brexit and to provide a list of teachers’ names.

Chris Heaton-Harris, Conservative MP for Daventry and a staunch Eurosceptic, wrote to vice-chancellors at the start of this month asking for the names of any professors involved in teaching European affairs “with particular reference to Brexit”. Neatly ignoring the long tradition of academic freedom that universities consider crucial to their success, his letter asks for a copy of each university’s syllabus and any online lectures on Brexit.

Prof David Green, vice-chancellor of Worcester University, felt a chill down his spine when he read the “sinister” request: “This letter just asking for information appears so innocent but is really so, so dangerous,” he says. “Here is the first step to the thought police, the political censor and newspeak, naturally justified as ‘the will of the British people’, a phrase to be found on Mr Heaton-Harris’s website.” Green will be replying to the MP but not be providing the information requested.

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GOP TAX PLAN

Trump and Corker Escalate Battle Over Taxes, in Personal Terms – The New York Times

President Trump renewed his attacks on Senator Bob Corker on Tuesday, chastising him for his skepticism over a $1.5 trillion tax cut. Mr. Corker responded by going on national television to say that Mr. Trump was “debasing” the United States and that the president struggled with the truth.

Mr. Corker “couldn’t get elected dogcatcher in Tennessee,” Mr. Trump wrote in a Twitter post on Tuesday. Mr. Corker, a Republican from Tennessee, is not running for re-election after serving in the Senate since 2007.

The extraordinary back and forth between a Republican president and the Republican chairman of the powerful Senate Foreign Relations Committee came just hours before Mr. Trump is to join Senate Republicans for their weekly lunch in the Capitol. That lunch is expected to be dominated by a discussion of the ambitious tax package set to be released as soon as next week.

US business battles for cherished tax breaks

Business support for Donald Trump’s broad tax reform goals has given way to fierce behind-the-scenes lobbying as industry groups from oil to private equity to real estate fight threats to cherished tax breaks and unwelcome new demands.

In public, trade associations are quick to applaud the president’s headline ambition to lower the corporate tax rate to 20 per cent. But the plans sketched out by Republicans have fractured US business and thrown unhappy industries on to the defensive.

Deficits, schmeficits: House conservatives cast aside fiscal warnings to make way for tax cuts – The Washington Post

The House is expected to approve a budget Thursday that includes no pathway to spending cuts but instead will allow a forthcoming tax bill to add $1.5 trillion to the budget deficit.

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ISIS, QATAR

Russia Overtakes Saudi Arabia and Tunisia as Largest Exporter of ISIS Fighters

Russia has long warned of the threat of returning foreign fighters. New figures show why. According to the data, 3,417 Russian nationals have traveled to fight for ISIS, compared with 2,400 in the 2015 estimate.

The estimate for Saudi Arabia—second on the list—is now 3,244 foreign fighters, an increase compared with the 2015 estimate of 2,500. Rounding off the top five behind Russia and Saudi Arabia are Jordan (3,000), Tunisia and France (1,910). These estimates are unlikely to increase, the report concludes, because of the heavy military presence in Iraq and Syria at present and increased security around Iraq and Syria.

US may intervene in Qatar crisis as fears grow over long-term rupture | World news | The Guardian

Gulf states expect Donald Trump to intervene to try to end the bitter feud between Qatar and four other Middle East states that has destabilised the region.

The US is concerned that the four month-long dispute involving its chief allies in the region is entrenching divisions and may end up forcing Qatar – home to the US’s primary Middle East military base – into a closer relationship with Iran.

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CONSUMER BUREAU ROLLBACK

Consumer Bureau Loses Fight to Allow More Class-Action Suits – The New York Times

Senate Republicans voted on Tuesday to strike down a sweeping new rule that would have allowed millions of Americans to band together in class-action lawsuits against financial institutions.

The overturning of the rule, with Vice President Mike Pence breaking a 50-to-50 tie, will further loosen regulation of Wall Street as the Trump administration and Republicans move to roll back Obama-era policies enacted in the wake of the 2008 economic crisis. By defeating the rule, Republicans are dismantling a major effort of the Consumer Financial Protection Bureau, the watchdog created by Congress in the aftermath of the mortgage mess.

Wall Street wins big as Senate votes to roll back regulation allowing consumers to sue their banks – The Washington Post

The rules would have cost the industry billions of dollars, according to some estimates. With the Senate’s vote, Wall Street is beginning to reap the benefits of the Trump administration focus on rolling back regulations it says are strangling the economy. The vote is also a major rebuke of the Consumer Financial Protection Bureau, which wrote the rules, and has often found itself at odds of Republicans in Congress and the business community.

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RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS

Why credit is the Hotel California of markets

The endless debate over valuation metrics that have accompanied the storming bull run in stocks misses a much bigger point about investing in 2017. Thanks to the outsized role of central banks, it is the credit markets that run the show. If you want clues on when the bull run in equities is entering the red zone, keep your eyes on the corporate debt market.

The big lesson digested by investors since the financial crisis is that you need to own yield, and the money gushing into bond funds remains immense. About $241bn flowed into US high grade bond funds and exchange traded funds in the first nine months of the year, according to Bank of America Merrill Lynch estimates. That’s a whopping 34 per cent higher than 2012’s full-year record of $180bn, the bank says.

This high tide of money means companies can keep selling debt — running at a record $1.4tn pace this year in the US — at very low interest rates. The resulting higher leverage in the system helps explain why the equity market keeps updating the record books with alacrity.

“As long as people are tripping over themselves to buy bonds, it remains a very favourable environment for risk taking,’’ says Jack Ablin, chief investor officer at BMO Wealth Management.

Volatility May Be the World’s Only Undervalued Asset Class | RealClearMarkets

“The Global Short Volatility trade now represents an estimated $2+ trillion in financial engineering strategies that simultaneously exert influence over, and are influenced by, stock market volatility….In nature and markets, when randomness self-organizes into too perfect symmetry, order becomes the source of chaos.”

“A reflexivity demon is now stalking modern markets in the shadows of a false peace… and could emerge violently given a rise in interest rates. Non-linearity and feedback loops are difficult for the human mind to conceptualize and price. The markets are not correctly assessing the probability that volatility reaches new all-time lows in the short term (VIX<9), and new all-time highs in the long-term (VIX>80). Risk alone does not define consequences. A person can engage in highly risky behavior and survive, and alternatively a low risk activity can result in horrible outcomes. Those who defend and profit from the short volatility trade in its various forms ignore this fact.”

China Aims for U.S.-Level Yields in $2 Billion Bond Offering – WSJ

China is returning to international bond markets for the first time in 13 years, with a $2 billion offering of U.S. dollar bonds that will allow the world’s second-largest economy to flex its financial muscle in the wake of its just completed Communist Party Congress.

Bankers have begun marketing China’s five- and 10-year bonds to investors, primarily in Asia and Europe, and the securities are expected to price on Thursday. China’s Ministry of Finance is scheduled to hold a conference call on Wednesday with potential investors to take questions about the deal.

Investors from China and elsewhere are eager to buy the country’s sovereign bonds, reflecting the demand that has helped drive booming global debt issuance this year. Potential investors and analysts believe a successful sale could bring yields on the Chinese bonds down to levels close to yields that prevail for the U.S., a major milestone for a developing economy.

European Central Bank divided over wisdom of declaring end to QE

The European Central Bank is gearing up for its most important meeting of the year, as senior officials gather to decide the fate of the €2.1tn asset purchase scheme that many credit with breathing life into the eurozone recovery.

At issue is whether the ECB will declare this week that the economy has recovered sufficiently for quantitative easing to end next year — a pronouncement that would reverberate in foreign exchange markets and could shape interest rate expectations.

On one side of Thursday’s debate is Mario Draghi, the ECB’s president, who would like to preserve room for manoeuvre. On the other are more hawkish policymakers, notably from Germany, who have long been uncomfortable with the bank’s ultraloose monetary policy and are keen for the ECB finally to bring the curtain down on QE.

Italian telco seals record euro junk bond sale

Italian telecoms group Wind Tre on Tuesday clinched the largest euro junk debt sale on record as the company braces for renewed competition from the looming arrival of Iliad in Italy.

The wireless carrier borrowed the equivalent of €7.325bn and attracted heavy investor demand, according to three people involved in the deal, as money managers scramble for interest-bearing assets.

The ravenous demand underlines investor appetite for higher yielding bonds in continental Europe, even as portfolio managers ready for the European Central Bank to announce plans at its meeting this week to begin scaling back extraordinary stimulus measures that have buoyed asset prices.

Wealthier Depositors Pressure Banks to Pay Up – WSJ

More-sophisticated customers are weighing their options when it comes to parking their cash, such as money-market funds that tend to pay higher rates than bank deposits.

Bank executives said that the newest pressure for higher rates is coming primarily from wealth-management customers, typically well-to-do individuals and families who deposit cash as part of their investment accounts. These can range from people with hundreds of thousands of dollars to invest to private banking clients with tens of millions or more.

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MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS

John McCain: I Choose the Kurds – The New York Times

The United States needs a strategy for the Middle East. We can start by supporting our allies. The United States offered arms and training to the government of Iraq to fight the Islamic State and secure Iraq from external threats — not to attack Iraqi Kurds, who are some of America’s most trusted and capable partners in the region.

For decades, the United States’ alliance with the Kurds has protected them from attacks, both from within and outside Iraq, while furthering American national security interests. In the past few years, the Kurds have become even closer allies, fighting alongside the United States against the Islamic State.

Let me be clear: If Baghdad cannot guarantee the Kurdish people in Iraq the security, freedom and opportunities they desire, and if the United States is forced to choose between Iranian-backed militias and our longstanding Kurdish partners, I choose the Kurds.

What Is China’s Leader Thinking? – WSJ

Party scholars characterized Xi Jinping Thought as the ideological signpost for a third major era in China’s development since the Communist victory in 1949.

The philosophy is “a crystallization of the practical experience and collective wisdom of the party and the people,” the congress said. A team of experts led by a top party academic started work on developing Xi Jinping Thought two years ago, the official Xinhua News Agency said earlier this month.

The theory’s label may be intentionally vague—giving the leader the right to interpret party doctrines and prevail in policy debates. “Writing Xi Jinping’s theories into the party charter means they become the party’s fundamental laws,” said Deng Yuwen, a former deputy editor of Study Times, a newspaper published by the party’s elite training academy.

Any dissent against Mr. Xi’s agenda would then be tantamount to betraying the party’s core beliefs, Mr. Deng said.

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CENTRAL BANKS & MONETARY POLICY

Bank of Canada Likely on Hold, With Nafta Clouding Rate Outlook – WSJ

Bank of Canada watchers unanimously believe the central bank will hit pause on Wednesday when it releases its latest policy decision and won’t raise rates after two consecutive increases.

There is also less certainty among analysts about the timing of the next rate increase in Canada due to the negative turn in talks to reshape the North American Free Trade Agreement.

Trump Asks GOP Senators: Should Taylor or Powell Be Fed Chief? – WSJ

Donald Trump asked Republican senators at their meeting Tuesday which candidate they preferred to lead the Federal Reserve—current Fed governor Jerome Powell or Stanford University economics professor John Taylor.

Trump’s Fed Finalists Offer a Clear Choice: Status Quo or Significant Change – The New York Times

The candidates on President Trump’s short list for Federal Reserve chairman have very different views about the best way to manage the economy.

Mr. Powell, who joined the Fed in 2012, has generally supported the Fed’s expansive efforts to stimulate growth. Analysts regard him as likely to continue the Fed’s gradual unwinding of that campaign, although perhaps pressing to raise interest rates a little more quickly.

Mr. Taylor has been one of the Fed’s most outspoken critics in recent years, repeatedly arguing that its stimulus campaign has done little good, considerable harm and should be ended as soon as possible. He also advocates structural reforms to prevent a repeat.

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USA ECONOMY DATA, CITIES AND STATES

College Costs Continue to Edge Higher – WSJ

“The price increases are moderate, but these increases are still higher than inflation,” said Jennifer Ma, senior policy research scientist at the College Board, a New York nonprofit that administers the SAT and tracks university costs.

These Are the Fastest Growing Jobs in the U.S. – Bloomberg

Home health aides, statisticians, solar-panel installers and software developers are among the 15 fastest-growing occupations in the U.S. and reflect the needs of an aging population, a shift to clean energy and employer demand for science, technology and math talent.

17V25 - THE FASTEST GROWING OCCUPATIONS

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POSITIONING, INFLECTION, MARKET CALLS

GM, Fiat Chrysler Shares Climb as Investors Focus on Companies’ Futures – WSJ

Wall Street is finally rewarding Detroit’s old guard auto companies for the direction they are taking, leading them to garner strong stock gains even as the car market is softening.

The industry developments Tuesday highlight a strategy shift that is well under way in the Motor City. Caught off guard by rapid developments and sizable investments in driverless cars and other innovative transportation ideas coming from Silicon Valley tech giants, including Alphabet Inc., Tesla Inc. snd Uber Technologies Inc., domestic auto companies have fought back by slimming down or dumping old lines of business and focusing on efforts to reshape the way people get from Point A to B.

On Tuesday, General Motors Co. recorded one of its worst quarterly net-incomes since filing for bankruptcy in 2009, spilling nearly $3 billion in red ink during the July through September period. GM’s performance is primarily due to decisions to dump its unprofitable European operations and pare back on low-margin businesses, such as passenger-car production and sales to rental companies. A strong balance sheet, allows the company to plow resources into autonomous driving and electric vehicles.

Investors Are Dumping This Silver ETF at the Fastest Pace Since 2011 – Bloomberg

Investors pulled $362 million from iShares Silver Trust this year, setting it on course for the biggest redemption in six years. The exit has shrank holdings in the world’s largest ETF backed by the metal to the least since March 2016. IShares owns about half of the total silver holdings in all silver-backed ETFs tracked by Bloomberg.

Strong US earnings lift confidence in global outlook

Confidence in the outlook for the world economy has been boosted by strong earnings statements from some of the largest US industrial companies, reporting strength in sectors including aerospace and construction.

Caterpillar, United Technologies, General Motors and 3M were among the companies that reported earnings above analysts’ forecasts for the third quarter, helping to push the Dow Jones Industrial Average to a new record high.

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FOREX, CRYPTOCURRENCY, EXCHANGE IMPACTS

HSBC Trader’s Conviction Will Echo in $5 Trillion FX Market – Bloomberg

Global currency traders and compliance officers who monitor them were put on high alert after a New York jury convicted a former HSBC Holdings Plc executive of fraud for front-running a large client order.

Traders will almost certainly come under pressure to avoid conduct that could be seen as harming their clients and profiting unfairly at their expense, said Mayra Rodriguez Valladares, a former foreign-exchange analyst for the Federal Reserve Bank of New York.

“Front-running is a crime,” she said. “This should be a lesson to senior executives that they should invest in more training of ethics for traders and more in systems to detect irregularities.”

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REAL ESTATE, HOUSING, REITS, COMMERCIAL

Big Mall Operator Does the Unthinkable—Builds a Mall – WSJ

This summer, GGP broke ground on a new shopping mall, a seemingly risky venture in a world where retailers are closing hundreds of stores and malls across the country are trying to reinvent themselves. It could be one of the last enclosed malls ever built in the U.S.

Buildings Across U.S. Are Wrapped in Same Panels That Fueled Deadly London Fire – WSJ

Experts say polyethylene-core panels, under investigation for their role in the Grenfell Tower fire, endanger residents, workers, students, hospital patients and hotel guests. Building codes in the U.S. that permitted their use could soon change.

Lord & Taylor Building, Icon of New York Retail, Will Become WeWork Headquarters – The New York Times

Lord & Taylor will rent out about a quarter of the building, where it will operate a pared-down department store. WeWork will use the rest of the building for its global headquarters and to lease shared office space to its customers. The redesign is expected to come after Christmas of 2018.

Lord & Taylor Sells NYC Flagship Store for $850M – WSJ

The transaction, part of an effort by Lord & Taylor parent Hudson’s Bay Co. to reduce its debt, is the most dramatic sign of how even grand stores are giving way to more profitable uses. As more shopping shifts online and fewer people visit stores, retailers from Macy’s Inc. to Sears Holdings Corp. are trying to sell or redevelop hundreds of locations; mall owners are increasingly turning anchor store spaces into grocery stores or gyms.

Lord & Taylor has operated its store on Manhattan’s Fifth Avenue since 1914. The limestone structure, in an Italian Renaissance style, was designed by the same architects who built the Saks Fifth Avenue flagship further uptown. Both are owned by Hudson’s Bay, a Canadian retailer that acquired the two U.S. chains in recent years.

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ENERGY CRUDE OIL, OIL SANDS, SHALE

OPEC Said to Work on Exit Strategy Alongside Cuts Extension – Bloomberg

As OPEC negotiates the extension of its oil production cuts until the end of 2018, it’s also quietly started working on an exit strategy in an effort to reassure investors it won’t flood the market once the curbs finally expire, according to people familiar with the deliberations.

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COMMODITIES AGRICULTURE & SOFTS

World wine production ‘to hit 50-year low’ – BBC News

Poor weather in France, Italy and Spain has hit production levels, an industry body says.

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POLLUTION, CLIMATE & ENVIRONMENT

How Climate Change Is Playing Havoc With Olive Oil (and Farmers) – The New York Times

Extreme weather is making olive oil production far more erratic just as global demand is growing. A summer heat wave in Europe was the latest calamity.

How the Farm Belt Pressured Trump and Beat the Oil Industry – Bloomberg

Farm-state interests just conquered Big Oil in a fight over biofuels, proving that in Donald Trump’s Washington, King Corn still reigns.

Only U.S. and Syria Now Oppose Paris Climate Deal, as Nicaragua Joins – The New York Times

The Central American country that once criticized the pact as not going far enough has hailed it as an important tool to reduce greenhouse gas emissions.

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EMERGING MARKETS

Indian State Banks Soar on Record $32 Billion Capital Boost – Bloomberg

India’s state-run banks surged in Mumbai trading after the government pledged to inject an unprecedented 2.11 trillion rupees ($32 billion) of capital into the beleaguered lenders to revive credit growth.

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DACA, TRAVEL BAN, IMMIGRATION, WALL

U.S. to Resume Admitting Refugees but Those From 11 Countries to See More Scrutiny – WSJ

The Trump administration will allow refugee admissions to the U.S. to resume, but people from 11 countries will see their application review process significantly slowed over the next three months.

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GEOPOLITICS, CRIME, TERRORISM

The U.S. military is conducting secret missions all over Africa – VICE News

U.S. troops are now conducting 3,500 exercises, programs, and engagements per year, an average of nearly 10 missions per day, on the African continent, according to the U.S. military’s top commander for Africa, General Thomas Waldhauser. The latest numbers, which the Pentagon confirmed to VICE News, represent a dramatic increase in U.S. military activity throughout Africa in the past decade, and the latest signal of America’s deepening and complicated ties on the continent.

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PROPAGANDA, CORRUPTION, AUTHORITARIANISM

Why Has the E.P.A. Shifted on Toxic Chemicals? An Industry Insider Helps Call the Shots – The New York Times

A scientist who worked for the chemical industry now shapes policy on hazardous chemicals. Within the E.P.A., there is fear that public health is at risk.

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ELECTORAL POLITICS

Kid Rock: ‘F— no, I’m not running for Senate’ | TheHill

Kid Rock is ending months of speculation about a possible Senate bid, saying, “F— no, I’m not running for Senate.”

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MEDIA, CABLE, SPORTS, ENTERTAINMENT

Colin Kaepernick reportedly gets $1 million book deal – The Washington Post

The Colin Kaepernick story still has a few chapters left in it, but he already has been given $1 million to write about his experiences. The former San Francisco 49ers quarterback, who was the first NFL player last year to stage protests during the national anthem, has reportedly landed a book deal with Random House.

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HEALTH, PRODUCTIVITY AND WELLNESS

Bill Gates: ‘Humanity will see its last case of polio this year’

Four years ago Bill Gates predicted polio would be eradicated by 2019. Progress shows it may be as early as this year.

What is Albert Einstein’s theory of happiness? – The Washington Post

Einstein wrote two short notes and handed them to the messenger. If you are lucky, the notes themselves will someday be worth more than some spare change, Einstein said, according to the seller of the letters, a resident of Hamburg, Germany who is reported to be a relative of the messenger.

Those autographed notes, in which Einstein offered his thoughts on how to live a happy and fulfilling life, sold at a Jerusalem auction house Tuesday for a combined $1.8 million.

“A calm and modest life brings more happiness than the pursuit of success combined with constant restlessness,” reads one of the notes, written in German on the hotel’s stationery.

It just sold for $1.56 million. The letter had originally been estimated to sell for between $5,000 and $8,000, according to the Winner’s Auctions and Exhibitions website. Gal Wiener, chief executive of the auction house, said the bidding on that note began at $2,000 and escalated for about 25 minutes, the Associated Press reported.

“When there’s a will, there’s a way,” read the other note, written on a blank sheet of paper. That note sold at auction for $240,000 and was initially estimated to sell for a high of $6,000.

17V25 - EINSTEIN

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