Macro Links Oct 30th – Mueller Time
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MACRO LINKS TABLE OF CONTENTS (Click or Scroll Down)
- MUELLER CHARGES, RUSSIA PROBE
- TEAM TRUMP RESPONSE, DOSSIER FUNDING, DANA BOENTE
- CATALAN CRISIS
- NORTH KOREA
- GOP TAX PLAN
- THE JFK FILES
- iPHONE X
- FACEBOOK, TWITTER RUSSIA BACKLASH
- SEXUAL HARASSMENT FALLOUT
- PUERTO RICO, CONTRACT SCANDAL, FEMA
- BITCOIN BUBBLE
- RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
- MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
- CENTRAL BANKS & MONETARY POLICY
- USA ECONOMY DATA, CITIES AND STATES
- COLOR, EARNINGS, SENTIMENT, VALUATIONS
- DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
- TAXATION, WEALTH HAVENS, CAPITAL SHELTERS
- ENERGY COMPANIES, NOCs, INDUSTRY
- ENERGY CRUDE OIL, OIL SANDS, SHALE
- COMMODITIES AGRICULTURE & SOFTS
- POLLUTION, CLIMATE & ENVIRONMENT
- FRONTIER MARKETS
- EMERGING MARKETS
- BREXIT, SCOXIT, LONDON, UK ECONOMY
- GEOPOLITICS, CRIME, TERRORISM
- PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
- PROPAGANDA, CORRUPTION, AUTHORITARIANISM
- TRUMP WORLD
- MEDIA, CABLE, SPORTS, ENTERTAINMENT
- AUTOS, ELECTRIC, SELF-DRIVING
- MEDICAL, PHARMA, BIOTECH
- ARTIFICIAL INTELLIGENCE, DRONES, FUTURE TECH
MUELLER CHARGES, RUSSIA PROBE
“Rather than conduct his entire investigation and then wrap things up with indictments and possibly a report at the end, he is doing it in stages, the way the Justice Department might attack a drug cartel or a mafia family.”
The charges are still sealed under orders from a federal judge. Plans were prepared Friday for anyone charged to be taken into custody as soon as Monday, the sources said. It is unclear what the charges are.
A U.S. grand jury has approved the first charges stemming from special counsel Robert Mueller’s probe into Russian meddling in the 2016 election and possible collusion with Donald Trump’s campaign, according to multiple news reports.
The information that a Russian lawyer brought to a June 2016 meeting with Trump campaign aides had been discussed with a top Russian government official.
Trump donor Rebekah Mercer in August 2016 asked the CEO of a data-analytics firm working for Donald Trump’s campaign whether the company could better organize the Hillary Clinton-related emails being released by WikiLeaks, according to a person familiar with their email exchange.
TEAM TRUMP RESPONSE, DOSSIER FUNDING, DANA BOENTE
The president’s allies are lashing out following reports that special counsel Robert Mueller has filed the first charges in the Russia probe.
President Donald Trump’s White House and personal lawyers scrambled Saturday to learn where the knife might fall in the investigation by special counsel Robert Mueller, triggering a guessing game among aides after days of trying to turn attention away from allegations of collusion with Russia during the election.
Caught off guard by reports of criminal charges in the Russia probe, Trump advisers sought to keep up their political attacks and divert attention from allegations of Russian collusion.
Stone lashed out at CNN anchor Don Lemon and others on Friday night, seemingly responding to reports that an indictment from special prosecutor Robert Mueller was imminent in the ongoing probe into the Trump election campaign’s alleged ties to Russia.
The Washington Free Beacon, a website funded by a major G.O.P. donor, initially retained the firm that later conducted opposition research for Democrats.
The website is supported by billionaire GOP donor Paul Singer, sources say.
Dana Boente, the U.S. attorney from Virginia who gained national prominence when he took a temporary leading role in President Trump’s Justice Department, has submitted his resignation.
On Wednesday, Boente was notified by the chief of staff to Attorney General Jeff Sessions that he should submit his letter of resignation, so that the political process for naming a successor could begin.
Spain’s prime minister said the central government would take control of Catalonia, and he dissolved the regional parliament and
ordered new elections.
The monthslong standoff between Catalonia and the Spanish government escalated when Prime Minister Mariano Rajoy said his government would dissolve the region’s parliament, fire its police chief and set new regional elections for Dec. 21.
Prime Minister Mariano Rajoy wielded emergency powers granted by the Spanish Senate at once on Friday, dismissing the Catalan government and dissolving its parliament, as he sought to restore control of the rebel region.
The move to trigger Article 155 of the Spanish constitution — which gives Madrid the right to take “necessary measures” to ensure compliance of any rogue region — still needs Senate approval, which is expected on Thursday. Mr Rajoy hopes that will be a decisive blow against the Catalan separatist campaign that has divided the country and put Spain’s economic expansion at risk.
Catalan leader Carles Puigdemont, however, has vowed to fight on, even as prosecutors warned he could face up to 30 years in jail. In both Barcelona and Madrid, politicians say that far from dying down, the Catalan crisis has simply entered a new phase.
Former Catalan leader Carles Puigdemont called Saturday for peaceful protests against a Spanish government takeover of his region following its declaration of independence, deepening a standoff with Madrid.
Carles Puigdemont, fired by the Spanish national government, insisted that Prime Minister Mariano Rajoy was removing a democratically elected administration.
More than 2m people turned out to vote to break away from Spain in defiance of Madrid. The Catalan independence vote has unnerved the region’s businesses, including banks and construction companies. Several have prepared to counter any split with the rest of Spain by moving their headquarters outside Catalonia.
Despite a history of separatism in the Basque region, the Catalan crisis does not appear to have yet increased zeal for Basque independence.
“We really put our heads in the jaws of the lion,” said Antoni Cera, drinking a can of beer with some friends outside the Catalan parliament. “Or stepped on the snake . . . or whatever is the right expression.”
Normal weekend routines like shopping, soccer and strolling prevailed in Catalonia even as the first test of Spanish Prime Minister Mariano Rajoy’s decision to take over the breakaway region approached, with Catalans weighing compliance versus defiance.
A debate is raging in both Japan and South Korea about the nuclear option, driven by the North’s rapidly advancing capabilities and concern the United States might hesitate to defend its allies.
U.S. Defense Secretary Jim Mattis said he didn’t see a scenario in which the U.S. would accept North Korea as a nuclear power, even after a year of dramatic advances for North Korea’s weapons program.
US and South Korean defence ministers have warned of an accelerating military threat from North Korea but vowed at the weekend to meet any nuclear attack by Pyongyang with what Jim Mattis of the US called “a massive military response”.
GOP TAX PLAN
Investors are increasingly pricing in the effect of a corporate tax cut into the shares of U.S. companies, leaving the market primed for a steep sell-off if the Republican-controlled Congress fails to pass one of President Donald Trump’s top priorities.
Rank-and-file House Republicans are increasingly alarmed by the secrecy shrouding the massive tax bill their party leaders plan to ram through Congress next month.
Just days ahead of the legislation’s release, GOP members of the House Ways and Means Committee are still in the dark on numerous details being ironed out by the powerful tax-writing committee’s chairman, Kevin Brady (R-Texas), and his staff. And they’re blaming the panel’s top-down approach for the uncertainty.
Failure to advance tax legislation — even if defeat comes in the Senate, as happened in July with legislation to revise the Affordable Care Act — would be crippling. One possibility if Republicans head into 2018 having to explain why they failed on both health care and taxes: a political bloodbath that drops the GOP into the minority and boots Ryan off the dais.
“This is not a retirement security story,” a tax expert says. It’s about finding revenue to pay for reductions in business taxes sooner rather than later.
Republicans are barreling into a lobbying frenzy next week, when House Ways and Means Chairman Kevin Brady plans to unveil a sweeping tax bill to remake the U.S. economy that’s being crafted with rigorous secrecy.
Justin Muzinich, a top aide to Treasury Secretary Steven Mnuchin, is the Treasury Department point man on taxes.
The National Association of Home Builders, a powerful lobbying force, will oppose the House Republicans’ forthcoming tax plan, a blow to the party’s attempt to forge unity among business sectors.
THE JFK FILES
The decision to postpone the release of some documents will invariably lead to suspicions that the government is still protecting secrets about the case. Administration officials said there was no cover-up, just an effort to avoid compromising national security, law enforcement or intelligence gathering methods.
Historians who have examined many of the documents released this week said they have not found much that would drastically change their understanding of the Kennedy assassination. But these files, along with another batch made public in July, reinforce existing narratives, raise further questions or add additional details and context to story lines that were previously part of the record.
A 1964 FBI memo describes a meeting in which Cuban exiles tried to set a price on the heads of Fidel Castro, Raúl Castro and Ernesto “Che” Guevara. “It was felt that the $150,000.00 to assassinate FIDEL CASTRO plus $5,000 expense money was too high,” the memo noted. At a subsequent meeting, they settled on more modest sums: $100,000 for Fidel, $20,000 for Raúl and $20,000 for Che.
Apple has reportedly dismissed an engineer after his daughter’s iPhone X hands-on video went viral on YouTube. In a tearful video, Peterson explains her father violated an Apple company rule by allowing her to film the unreleased handset at Apple’s campus. Apple reportedly requested that Peterson remove the video, but it was clearly too late as the content spread further and further.
Just 10 minutes after it first became available, customers placing orders were told they would have to wait as much as four more weeks to receive the device — a sign that initial stock had been rapidly exhausted. That likely reflects both intense demand from early adopters and even slimmer supplies than usual for a new iPhone. The two signature features of the 10th anniversary model, its 3D camera and edge-to-edge OLED screen, both rely on scarce components.
FACEBOOK, TWITTER RUSSIA BACKLASH
Facebook Inc. said it will start disclosing more about political ads, bringing the social network’s rules closer to what’s required of traditional mediums like television.
Facebook Inc., Twitter Inc. and Alphabet Inc.’s Google have agreed to send representatives to a third congressional hearing next week following revelations that Russians exploited their networks during last year’s elections.
SEXUAL HARASSMENT FALLOUT
The former actress, who has said that Harvey Weinstein sexually assaulted her, talks about the producer and about becoming an advocate for mistreated women.
More than 300 women have reportedly accused the director of harassment or abuse, including Julianne Moore, Selma Blair and Rachel McAdams.
PUERTO RICO, CONTRACT SCANDAL, FEMA
People whose bodies are cremated are largely not being counted in the official death toll. The government says it’s the fault of funeral directors, while funeral directors say they’ve received no guidance.
The 911 bodies were never physically examined by a medical examiner to determine if they should be included in the official death toll.
The contract with Puerto Rico’s power authority says it was approved by FEMA. But FEMA says it did not approve the contract and has not paid any money on it yet.
In its statement Friday, FEMA clarified that it was not involved in hiring the company to restore power to the island and hasn’t provided any reimbursement to the PREPA yet for its contract with Whitefish.
White House said President Donald Trump and Zinke discussed the Whitefish controversy during their meeting on Friday.
The disaster-relief agency, under fire after Hurricane Maria, won’t release the plan, even as a comparable document for Hawaii remains public.
On-line Plc jumped as much as 394 percent on Friday after announcing plans to change its name to On-line Blockchain Plc, following an initial climb of 19 percent on Thursday when it first announced the news. It’s the biggest one-day gain for the small-cap company since its December 1996 listing. The trading volume that reached 2.9 million shares by early afternoon in London is equal to more than 16 times the entire year’s trading before the last two days.
Hackers are commandeering the horsepower of unwitting victims’ computers to secretly generate cryptocurrencies, hoping to cash in as the price of bitcoin has soared to $6,000.
Celebrity endorsements are helping start-ups raise big money in so-called initial coin offerings. But it is not always clear what they are selling.
“My view on bitcoin is that it is a technological experiment that may or may not prove to have any long lasting value,” Mr. Miller wrote in his letter. “Bitcoin has a market capitalization greater than 90% of the companies in the S&P 500, but it still might fail. I don’t know and neither does anyone else, no matter how certain they are of their opinion.” As of Friday, Bitcoin had a total value in circulation of approximately $96 billion, according to coinmarketcap.com.
Added Mr. Miller, “I believe there is still a nontrivial chance bitcoin goes to zero, but each day it does not, that chance declines as more venture capital flows into the bitcoin ecosystem and more people become familiar with bitcoin and buy it.”
More than 90 funds focused on digital assets like bitcoin have launched this year, bringing the total number of such “crypto-funds” to 124, according to financial research firm Autonomous Next.
Data shared exclusively with CNBC Friday showed that the largest share of the funds, 37 percent, used venture capitalist-type strategies and had about $1.1 billion in assets under management. Funds focused on trading digital assets came second at 32 percent, with about $700 million in assets under management.
RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
Bets on higher-yielding currencies from Brazil to Poland are unwinding at the fastest pace in almost a year as soaring U.S. Treasury yields undermine the attraction of riskier government debt. A BlackRock Inc. exchange-traded fund that tracks emerging-market local-currency debt suffered its biggest daily outflow on record on Thursday.
In the U.S. stock market, declines have grown shallower over the past two years and are snapping back sooner. The S&P 500 has gone 246 trading days without trading more than 3% below its record high, the longest streak ever for the index, according to LPL Financial. The index hasn’t had a decline of 10% or more from a recent peak since February 2016.
The steady buying in the U.S. has lately spread to Europe, Japan and even developing markets, investors say. On Friday, the Dow Jones Industrial Average rose 0.1% to 23434.19, near its record from Tuesday, its 54th of the year. Japan’s Nikkei gained 2.6% this past week to its highest level since 1996, and share indexes in the U.K. and Germany have hit records this month.
“As a long-term investment strategy, I don’t think the index fund has any competition at all,” Mr Bogle told an audience at the Ivy League clubhouse for Cornell University in Midtown Manhattan this week.
“There must be some limit somewhere with how much indexing there can be without [reducing] the efficiencies of the market,” he said. “[But] if I had to guess, I’d put [the limit] in the area of 70 or 80 or 90 per cent — very large — because there will always . . . be people looking for values, price discovery and all that kind of thing.”
MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS
The buyout kingpins of the barbarian era are nearly all past the customary retirement age and are working on ways to hand over firms made in their own image to a new generation of leaders facing a more forbidding landscape.
This new world is marked by the appearance of an increasing number of competitors and resulting pressure on fees. Meanwhile, the end of easy money policies adopted in the wake of the global financial crisis raises the prospect of more expensive debt.
Hanging in the balance are the multibillion-dollar fortunes of the private equity founders themselves. Big buyout firms such as Carlyle, KKR, Blackstone and Apollo have gone public, meaning much of the wealth of their leaders is tied up in the shares of the companies they started. A lot of their money will be riding on the success of their successors.
Given the sometimes fractious nature of the Sackler family, it was striking that they were united in their silence on the subject of OxyContin. These were urbane, expensively educated, presumably well-informed people. Could they conceivably be unaware of the accumulated evidence about the tainted origins of their fortune? Did they simply put it out of mind? “Greed can get people to rationalize pretty bad behavior,” Andrew Kolodny had told me. Someone who knows Mortimer, Jr., socially told me, “I think for him, most of the time, he’s just saying, ‘Wow, we’re really rich. It’s fucking cool. I don’t really want to think that much about the other side of things.’ ”
Paul Hanly, the lawyer, said that the Sacklers’ steadfast refusal to address the legacy of OxyContin may just be a legal tactic—and a shrewd one. “The more interviews you give, the more targets you create for lawyers like me, and for government investigators,” he said. I wondered whether philanthropy might represent, for at least some of the Sacklers, a form of atonement. But, when you consider the breadth of the family’s donations, one field is conspicuously lacking: addiction treatment, or any other measures that might serve to counter the opioid epidemic.
Economic nationalism is motivated by a range of intentions, many of which continue to be debated. But it has an unanticipated consequence that has received less attention to date: As many politicians and policymakers in the world’s major economic powers look inward, the realm of innovation has been thrown into uncertainty. The global innovation model long embraced by leading multinationals, one based on the free flow of information, money, and talent across borders, is at risk. The policies inspired by economic nationalism may prove self-defeating, in part by disrupting R&D activities for the new products and services that will generate the jobs, growth, and wealth of the future. The danger of this new reality is exacerbated by the overall global trend of declining public-sector R&D spending growth.
The bewildering progress of AlphaGo Zero has fed an already-febrile anxiety about a robot takeover causing mass unemployment. Yet that anxiety sits uneasily with the high employment rates and disappointing productivity growth we see in the US and particularly the UK. There are plenty of jobs, but apparently not a lot of innovation.
There are various possible explanations for this paradox, but the simplest one is this: AlphaGo Zero is an outlier. Productivity and technological progress are lacklustre because the research behind AlphaGo Zero is not typical of the way we try to produce new ideas.
Perhaps it is naive to simply exhort companies to spend more on fundamental research — but somebody has to. One interesting approach is for governments to fund “innovation prizes” for breakthroughs. Such prizes mobilise public funds and public goals while deploying the agility and diversity of private sector approaches. But such prizes only work in certain situations.
Professional sport has made fashionable the practice of “marginal gains” — rapid optimisation in search of the tiniest edge. It turns out that corporate research took the same turn decades ago. There is nothing wrong with marginal improvements, but they must not be allowed to crowd out more speculative research. Science is a deeper, messier practice than sport. We must continue to devote time, space and money to bigger, riskier leaps.
Despite its apparently mild tone, the letter has provoked a national debate on freedom of speech in universities and whether the country is being subjected to political censorship in a British version of McCarthyism.
The uproar increased on Thursday after The Daily Mail, a popular tabloid that has vociferously supported Brexit and which carries an anti-immigrant slant, published a front-page article citing instances in which it said university professors had encouraged students to oppose a Brexit. On another page, more than a dozen headshots of academic leaders were assembled around a headline that read: “Just why is every new Oxbridge head a leftie?” (“Oxbridge” is shorthand for the two leading universities in Britain: Oxford and Cambridge.)
While the letter itself is the work of a single politician, the backlash underscores the toxic climate and the searing divisions that dominate Britain more than a year after its referendum on Brexit.
Here’s the thing that my Oxford interlocutor and his like often forget: when it comes down to it, Scots have somewhere else to go. You can throw all the arguments at us about economic crisis and national solidarity and diminished global influence (I’ve made many of them myself over the years), but Brexit is rather queering your pitch. And if we decide you’re a bunch of dicks then we can grab our ball and go home.
And here’s the thing: you increasingly look like a bunch of dicks. Brexit has cracked open the smooth Cameronesque skin of the Conservative Party to reveal a scaly Redwoodesque lizard. I thought I understood the Tories reasonably well – I ran the Telegraph’s comment pages for the best part of a decade, for god’s sake – but I was wrong. The sheer volume of hard Brexiteers on the backbenches – Jack Aubreys in their mind’s eye, Captain Pugwashes and Seamen Staines to the rest of us – staggers me.
On the opposite side of the house sit the sinister John McDonnell and co, with the Gumpish Corbyn held out in front to absorb enemy fire, and behind them a cowed parliamentary party that lacks the moral courage either to seize control or break free. On Brexit, these goons make the Tories seem collected and coherent. That’s some choice you’re offering us. Cheers.
Snap generated huge hype for Spectacles, but then waited 5 months to openly sell them. Once people actually tried Spectacles, few kept wearing them, and word of mouth about their disuse spread. Snap never got visionary video markers onboard. And as Snapchat’s popularity waned in the face of competitors, the fact that Spectacles only interfaced with its app rather than a phone’s camera roll became a burden.
Snap did some things right with Spectacles. The fashion photo spread announcement felt classy and surprising despite clues and photos of CEO Evan Spiegel trickling out ahead. The initial launch was a marketing extravaganza, with multi-hour lines of cool kids waiting on the Venice Beach boardwalk to buy them. And the Snapbots being dropped in random locations was exciting and made people feel special if they got ahold of them. But once people put them on their face, the excitement died off.
The forces driving violence in Mexico, which is now on track for its worst year in decades, were first set in motion 20 years ago by two events that were, at the time, celebrated as triumphs.
First, Colombia defeated its major drug cartels in the 1990s, driving the center of the drug trade from the country into Mexico. Then, in 2000, Mexico transitioned to a multiparty democracy. This meant that the drug trade moved to Mexico just as its politics and institutions were in flux, leaving them unable to address a problem they have often made worse.
Since then, a series of bad breaks, missteps and self-imposed crises have led to an explosion of violence. Last year there were more than 20,000 killings. This year is on track to be worse, exceeding the 2011 record, which was thought to be the drug war’s apex.
CENTRAL BANKS & MONETARY POLICY
The European Central Bank’s reluctance to quickly phase out its bond-buying program has reopened a rift at the top of the central bank, pitting ECB President Mario Draghi against German Bundesbank head Jens Weidmann.
Reforming the Reserve Bank of New Zealand’s monetary policy mandate could potentially result in lower interest rates, the new finance minister said.
President Donald Trump is likely to announce Federal Reserve governor Jerome Powell as his nominee to be the next chairman of the U.S. central bank, according to a person familiar with the matter.
USA ECONOMY DATA, CITIES AND STATES
The U.S. economy posted its best six-month stretch of growth in three years, rebounding quickly from two hurricanes and showing momentum for the final quarter.
The 3 per cent annual growth recorded in the third quarter of 2017 came despite predictions of a slowdown by private sector economists who expected the hurricanes that hit Texas and Florida to weigh on the US economy. It followed 3.1 per cent growth in the second quarter, making it the first six-month stretch since 2014 in which US gross domestic product grew more than 3 per cent in consecutive quarters.
The Trump administration quickly seized on the figures as proof that the president’s promise of lower taxes and less regulation was already bringing faster growth, with more to come once a tax cut plan passes the Republican Congress. Donald Trump has promised to deliver 3 per cent growth during his presidency.
Republicans said the new G.D.P. report signaled increased business spending in anticipation of a corporate tax cut, though many economists are skeptical. With legislation embodying the party’s tax proposals expected next week, the figures released on Friday also highlight the fine line Republicans are walking in selling their policy: They are celebrating faster growth while arguing that tax reform is needed to accelerate it further.
US economic growth has become so skewed toward the wealthiest households that data showing healthy consumer balance sheets masks underlying troubles facing middle-class and poor Americans.
The big picture is skewed by the booming incomes of the wealthy, and “underneath the surface, there may be incipient cracks forming,” the Deutsche Bank’s economists say.
Cities across the U.S. often feel the same pinch—trying to manage the typical costs of running a city, such as picking up trash and filling potholes, on top of ballooning retirement obligations and outstanding debts. Several major cities are struggling to keep up.
The culprit: As employees age and retire, cities are on the hook for funding more pensions and health-care benefits. In 2016, local governments faced a pension investment gap of $3.7 trillion, according to Moody’s Investors Service. Their predicament only worsens when cities fall behind in making those payments or their investments lag.
When you measure those fixed costs against a city’s operating budget, no major city is as embattled as Jacksonville, Florida. In the city of 881,000 people, fixed costs are 31.4 percent of expenses, according to data compiled by Bloomberg. That’s driven by pensions, which made up almost 18 percent of expenses in fiscal 2016.
COLOR, EARNINGS, SENTIMENT, VALUATIONS
J.C. Penney Co. spooked investors ahead of the holiday season, after the struggling department-store chain slashed its profit goals for the year and warned of weakening sales.
A pick-up at UBS’s core wealth management business is likely to weaken in the final months of 2017 as clients withdraw money to take part in tax amnesty programs, the world’s biggest private bank said.
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
Akzo Nobel, the Dutch paintmaker behind the Dulux brand, has approached its US competitor Axalta Coating Systems over a potential combination that could create a group valued at roughly $30bn. Talks are under way between the Amsterdam-based chemicals company and the American group but are at a very early stage, according to people briefed on the matter.
TAXATION, WEALTH HAVENS, CAPITAL SHELTERS
A tax dispute involving Renaissance Technologies, the hedge fund firm whose co-chief executive officer is a prominent backer of President Donald Trump, is advancing to a new phase.
Members of the Internal Revenue Service’s Office of Appeals are scheduled to meet with lawyers for Renaissance in New York on Nov. 7, according to a person with knowledge of the matter. The meeting kicks off a review by an independent branch of the tax agency and suggests a resolution may be years away.
Although the dollar amount at issue has never been made public, Senate investigators estimated that Renaissance employees may have pocketed about $6.8 billion through what a bipartisan panel in 2014 called an “abusive” tax shelter. Renaissance executives maintain the transactions at issue were within the law and weren’t driven by tax savings.
ENERGY COMPANIES, NOCs, INDUSTRY
Over the past year, equity and bond investors have forced onshore E&P companies to be more disciplined about their capital spending. That does not mean spending only their internally generated cash flow, of course. That would be like asking a prima ballerina to live within her salary. But the onshore industry is in much better shape than it was.
The US offshore industry in the Gulf of Mexico, on the other hand, has not really recovered. William New, president of New Industries in Morgan City, Louisiana, which makes pressure vessels, piping and the like for offshore projects, is still waiting for the good times to roll again.
“The problem is even when [the customers] go bankrupt, the equipment doesn’t go away. In the 1980s it took 10 years to come back, and we are only in the third year,” he says.
So there will be fewer offshore US mega-wells to upset the balance. With inventories having fallen even more sharply than the reported numbers, the oil and gas industry is not badly prepared for rising interest rates.
ENERGY CRUDE OIL, OIL SANDS, SHALE
The OPEC trade is back, and Saudi Arabia is in the driver’s seat. Just before the de facto OPEC leader doubled down on its plan to drain the oil glut, propelling Brent crude prices beyond $60 a barrel for the first time since 2015, hedge funds were almost as bullish on the global benchmark as they’ve ever been. Short-sellers retreated to levels last seen in February, when OPEC production cuts were fueling an oil price surge.
COMMODITIES AGRICULTURE & SOFTS
Cheaper feed supplies have helped to boost U.S. meat production. That means even after recent gains, beef prices are still below record highs set two years ago, giving the market more room to run. Money managers are taking note and piling into bets that cattle futures will keep rallying.
POLLUTION, CLIMATE & ENVIRONMENT
The gathering was viewed as Saudi Arabia’s coming-out party, with the charismatic royal seeking to woo bankers and investors with his grandiose vision to overhaul the oil-dependent economy and modernise the conservative kingdom. And the 32-year-old did not hold back when outlining the scale of his ambitions.
Over three days, Riyadh unveiled plans for a vast $500bn investment zone in the north-western coastal region, pledged to nearly double the size of its sovereign wealth fund to $400bn by 2020 and announced a $1bn investment in Virgin Galactic. Prince Mohammed also granted citizenship to Sophia, Hanson Robotics’ most advanced robot and promised to restore a more tolerant culture to a country that is often associated with Sunni extremism.
“Honestly, we won’t waste 30 years of our life dealing with any extremist ideas,” Prince Mohammed told the conference.
Saudi Arabia plans to increase spending next year as the government tries to revive an economy that has been battered by low oil prices and several years of austerity, the finance minister said.
A fatal police shooting in Rio this week of a Spanish woman who was taking a guided favela tour is a potent reminder of their perils at a time of resurgent violence in this world-famous city.
These bandidos evangélicos [evangelical bandits], as the born-again Christian gangsters are known, want to drive out “demonic” traditional religions from the favelas or slums in Rio’s sprawling hinterlands.
“They enter and destroy and set fire to the place,” says Vania Santana, a Candomblé priestess at the meeting in Baixada Fluminense. “In Rio de Janeiro, there is a very clear association: armed gangs who denominate themselves as evangelicals. This is a new issue that is endangering the very structure of Brazil’s democracy.”
BREXIT, SCOXIT, LONDON, UK ECONOMY
YouGov’s latest figures show that a growing number of Remain voters are now dead-set against the UK leaving the EU with just 28 per cent saying that Brexit should go ahead when polled at the end of September.
Europe is suffering, the pontiff said, from “a period of dramatic sterility. Not only because Europe has fewer children, and all too many were denied the right to be born, but also because there has been a failure to pass on the material and cultural tools that young people need to face the future.” WALL
GEOPOLITICS, CRIME, TERRORISM
An American service member was killed and six others wounded in a helicopter crash south of Kabul, the United States military command in Afghanistan said in a statement on Saturday.
U.S. military officials sought permission to send an armed drone near a patrol of Green Berets before a deadly ambush Oct. 4 in Niger, but the request was blocked, raising questions about whether those forces had adequate protection against the dangers of their mission.
PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
Beijing is hoping data can have evolutionary applications. A senior financial official, who declined to be identified, explained how the mass of personal information collected through digital transactions allows China to check individuals’ behaviour and penalise those who step out of line.
“We have already seen that the number of bad debts being built up by households has come down sharply since we launched this system,” said the official. “People really care about their credit scores because those with bad scores have reduced access to financial services.”
China is preparing to tighten regulation of online consumer lending as part of a campaign against financial risks, dealing a possible setback to Chinese fintech groups that hope to sell shares in the US.
Household debt in China remains low as a share of GDP, and authorities have encouraged growth of consumer credit as a way to rebalance the economy towards consumer spending, but now concerns are rising about irresponsible lending practices online.
PROPAGANDA, CORRUPTION, AUTHORITARIANISM
The Tennessee rally of white supremacists, which had twice as many counterprotesters, never made it to its second location.
It became the first country to withdraw, a month after a U.N. commission called for a criminal inquiry that might lead by to Burundi’s leaders.
Billionaire hedge fund manager Seth Klarman reportedly ripped President Trump at an investment conference last week, calling Trump “a threat to democracy.”
Seven in 10 Americans say the nation’s political divisions are at least as big as during the Vietnam War, according to a new poll, which also finds nearly 6 in 10 saying Donald Trump’s presidency is making the U.S. political system more dysfunctional.
President Trump’s eldest son, Donald Jr., is expected to launch two residential projects in India for the Trump Organization in the coming weeks, continuing the family’s promotion of the Trump empire despite concerns over the president’s potential conflicts of interest with foreign governments.
Donald Trump’s motorcade departing from the Trump National Golf Club in Virginia had an extra add-on Saturday, after the president spent the 96th day of his presidency visiting one of his own properties. That addition came in the form of a female cyclist, who had one goal in mind: to flip off the president of the United States.
MEDIA, CABLE, SPORTS, ENTERTAINMENT
Paradise Park, as the project is called, will feature LED-lit bumper cars that make crashing sounds and are chased around an oval by fake police officers. Participants who finish the course first will get prizes, Wynn said on an earnings call with investors Thursday.
Other attractions will include zip lines, fireworks and a carousel that stretches out over the man-made lake. Guests will be able to pay to ride in parades. The floats, which also will travel over water, will include giant spiders and King Kong.
AUTOS, ELECTRIC, SELF-DRIVING
Chinese search engine giant Baidu and Shouqi Limousine & Chauffeur, a car-hailing operator, are joining up to develop driverless vehicles, the official Xinhua media service reported on Saturday.
Tesla’s plan to make half a million cars next year became all-the-more ambitious after the sluggish start the company got off to with its most important electric vehicle yet, the Model 3 sedan. Musk may be confident about solving the unspecified bottlenecks holding back production. But to meet his 2018 goal, he would have to transform one of North America’s lowest-volume auto factories into the second-highest output plant in the region.
“It is a daunting task to launch a new vehicle anywhere,” said Kristin Dziczek, director of the industry, labor and economics group at the Center for Automotive Research in Ann Arbor, Michigan. “Doing what they are doing, on the growth trajectory that they have set out, is really, really challenging.”
The National Highway Traffic Safety Administration is considering eliminating regulations that currently block self-driving vehicles designed without steering wheels, brake pedals or other driver controls from hitting the road.
The U.S. National Highway Traffic-Safety Administration said Friday it is looking for input on how it can remove regulatory roadblocks to self-driving cars.
MEDICAL, PHARMA, BIOTECH
ARTIFICIAL INTELLIGENCE, DRONES, FUTURE TECH
With plans to go into mass production next year, Sony’s new class of sensors are designed for smartphones and augmented-reality devices. Eventually, the new chips could find their way into drones, self-driving automobiles, gaming consoles, industrial equipment, factory and warehouse robots, and many other machines that interact with their environments. All told, the market for these 3-D sensors will expand three-fold to $4.5 billion by 2022, according to researcher Yole Developpement, approaching Sony’s current revenue from image sensors.
“This has the scale to become the next pillar of our business,” said Satoshi Yoshihara, the general manager in charge of Sony’s sensors division.
A team of engineers at the Armstrong Flight Research Center in California have designed an experimental plane called a Low Boom Flight Demonstrator – more catchily, the X-plane – that they hope to have in the air within four years. By modifying the design, particularly of the front of the aircraft so that shock waves are more dispersed when they hit the ground, they aim to bring boom volumes down to an acceptable level.
Following a suggestion by President Theodore Roosevelt, boxing has been taught at the U.S. Military Academy at West Point for more than a century. Last year, boxing classes became mandatory for cadets of both sexes.
Gurriel’s immediate expression of remorse after the game, as well as a full apology and a desire to meet Darvish personally to apologize, may have helped the Astros first baseman avoid being suspended during this World Series.
Just as pertinent, Darvish, after saying that Gurriel’s acts were “disrespectful” to Asians around the world, wrote in a tweet that, “I believe we should put our effort into learning rather than to accuse him. . . . Let’s stay positive and move forward instead of focusing on anger. I’m counting on everyone’s big love.”
Boston Bruins captain Zdeno Chara is a 6-foot-9 mountain of a player with a diabolical routine for keeping up with guys half his age. “I like the challenge of finding comfort doing uncomfortable stuff,” he says. “The harder, the better.” He has tracked his workouts for the past 25 or so years. “I keep all of the data—the number of sets and reps, how much I lifted, how I felt—and at the end of each season I revaluate and create a new program for the following summer,” he says.
One eye-popping intersection in northwest Iceland is getting a lot of attention, by design. To encourage drivers to slow down, Ísafjörður’s city officials took a page from the centuries-old art of trompe-l’œil painting and installed a new pedestrian crossing lane that looks like it’s levitating a few inches from the pavement.
So has the Ísafjörður’s levitating crosswalk actually improved road safety in town? Trylla says that it’s hard to say because no accidents were ever recorded in that particular intersection in the town of 2,600 residents. “What is clear so far is that it has received lot of attention and people are for sure driving differently over this crossing, even if they’re eventually getting used to seeing it…So in that way, I would say that it’s a success so far.”
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