Macro Links Sep 26th – “Declaration of War”

Macro Links Sep 26th – “Declaration of War”

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“DECLARATION OF WAR”

North Korea Says It Has the Right to Shoot Down U.S. Warplanes – The New York Times

The country’s foreign minister also said the North considered President Trump’s threatening comments about the country and its leadership “a declaration of war.”

North Korea accuses Trump of making declaration of war

“The whole world should clearly remember it was the US who first declared war on our country,” Mr Ri said in New York. “Since the US declared war on our country, we will have every right to make countermeasures, including the right to shoot down US strategic bombers even when they are not inside the airspace border of our country.”

U.S. Dismisses North Korea’s Talk of War – WSJ

North Korea warned it would shoot down U.S. warplanes even if they were outside of its airspace, while the White House called suggestions America had declared war on North Korea were “absurd.”

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PUERTO RICO, MEXICO DEVASTATION

Puerto Rico’s Agriculture and Farmers Decimated by Maria – The New York Times

Hurricane Maria’s barrage took out entire plantations and destroyed crops and livestock across the island. The storm knocked out about 80 percent of its crops.

Maria Cripples Puerto Rico’s Main Airport, Leaving Thousands Stranded – WSJ

After Hurricane Maria knocked out radar systems and power, the island’s main airport is struggling to get thousands of stranded passengers off the island.

Cash Is in Short Supply in Storm-Ravaged Puerto Rico – Bloomberg

The cash economy has reigned in Puerto Rico since Hurricane Maria decimated much of the U.S. commonwealth last week, leveling the power grid and wireless towers and transporting the island to a time before plastic existed. The state of affairs could carry on for weeks or longer in some remote parts of the commonwealth, and that means it could be impossible to trace revenue and enforce tax rules.

Trump declares Puerto Rico is in ‘deep trouble’ as questions mount about his commitment – The Washington Post

Monday night’s tweets were the first from Trump about Puerto Rico since Wednesday, when the hurricane made landfall and Trump declared “we are with you.”

Criticism of Trump has come from Democratic politicians, celebrities and others, focusing in part on the heavy attention he has put in recent days on his opposition to football players who kneel during the national anthem.

Villagers After the Quake: ‘They’re Left With Nothing’ – The New York Times

The village, set among rolling hills in southwest Puebla state, now calls to mind the checkered destruction of an aerial bombing campaign. Houses with minimal visible damage alternate with wastelands of pulverized concrete, crumbled adobe and bent and broken household objects.

The death toll among its 1,300 residents probably would have been higher had the earthquake not struck during the day, when children were at school and most of the adults were working in the fields of corn, beans, amaranth and chia that encircle the town like a wreath.

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TRUMP VS NFL

Trump, NFL Trade Barbs as Clash Over Protests Continues – WSJ

President Donald Trump and the National Football League on Monday intensified their criticisms of one another, deepening a divide over player protests that is roiling the sports world.

The continuing clash also appeared to create a growing rift among fans, with some vowing to boycott the league while others leapt to the defense of players after the president’s denunciation of the national anthem protests and the NFL through the weekend.

Singer Marc Anthony to Trump: ‘Shut the f— up about NFL’ and do something for Puerto Rico | TheHill

Singer Marc Anthony blasted President Trump for his criticism of National Football League (NFL) players, telling him to “shut the f— up” about the NFL and help Puerto Ricans.

Steelers’ Villanueva Takes a Stand, but Might Agree With Kaepernick’s Mission – The New York Times

He said he had intended to stand at the end of the tunnel where no one would see him, and watch from there as the anthem was played. But once he realized he was visibly outside, he decided he could not turn around and go back to where his teammates were standing, a few feet inside the tunnel.

Cowboys owner Jerry Jones kneels with Dallas players before anthem in Arizona – The Washington Post

“Our players wanted to make a statement about unity and we wanted to make a statement about equality,” Jones said at a postgame news conference.

Brady: Trump’s comments ‘just divisive’ | TheHill

New England Patriots quarterback Tom Brady said early Monday that he doesn’t agree with President Trump’s comments attacking NFL players who refuse to stand during the national anthem.

97-year-old WWII veteran takes a knee to support protesting NFL players – CBS News

Hours before NFL players across the league took a knee during the national anthem in defiance of President Trump on Sunday, one World War II veteran hosted a protest of his own — in his backyard.

“These people have every right to protest,” John Middlemas, a 97-year-old farmer from Springfield, Missouri, told his grandson, Brennan Gilmore, before kneeling. Gilmore said he was blown away by the outpouring of support for his grandpa, who served in the U.S. Navy for 21 years.

17U26 - MIDDLEMAS

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PRIVATE EMAIL HYPOCRISY

At Least 6 White House Advisers Used Private Email Accounts – The New York Times

While it is not necessarily illegal for White House officials to use private email accounts, President Trump had made Hillary Clinton’s mishandling of emails as secretary of state a centerpiece of his 2016 campaign.

Use of personal devices widespread in Trump’s West Wing – POLITICO

Top White House aides including Ivanka Trump and Gary Cohn, along with Jared Kushner, occasionally used private email accounts for official business.

Private emails: House committee ups pressure on White House – BBC News

The US Congress asks who apart from aide Jared Kushner uses private emails for official business. The demand for more information came in a letter from the House Committee on Oversight and Government Reform, signed by Republican Trey Gowdy and Democrat Elija Cummings.

Jared Kushner used private email with White House colleagues

The admission, prompted by a media report, was quickly seized on by Democrats who recalled Mr Trump’s fierce criticism of Hillary Clinton for using a private email server as secretary of state.

White House: There’s ‘Very Limited’ Use Of Private Email By Trump Administration – Talking Points Memo

The White House press secretary on Monday brushed aside reports that members of the Trump administration had used private email accounts to conduct government business, saying personal email use was “very limited” overall.

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OBAMACARE REPEAL COLLAPSES (AGAIN)

Senate GOP effort to unwind the ACA collapses Monday – The Washington Post

“Everybody knows that’s going to fail,” said Senate Finance Committee Chairman Orrin G. Hatch (R-Utah), who led a raucous, five-hour hearing on the bill Monday afternoon. “You don’t have one Democrat vote for it. So it’s going to fail.”

Health Bill Appears Dead as Pivotal G.O.P. Senator Declares Opposition – The New York Times

Senator Susan Collins of Maine announced her opposition to the latest bill to repeal the Affordable Care Act, leaving party leaders short of the votes they need.

Collins’ opposition dooms latest Obamacare repeal effort – POLITICO

Three GOP senators have come out against the Graham-Cassidy bill, dealing a fatal blow to the plan.

GOP already eyeing next chance to revive Obamacare repeal – POLITICO

Senate Republicans are discussing whether to use their next budget reconciliation measure to target the health law.

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RUSSIANS ON FACEBOOK

Obama tried to give Zuckerberg a wake-up call over fake news on Facebook – The Washington Post

Nine days after Facebook chief executive Mark Zuckerberg dismissed as “crazy” the idea that fake news on his company’s social network played a key role in the U.S. election, President Barack Obama pulled the youthful tech billionaire aside and delivered what he hoped would be a wake-up call.

For months leading up to the vote, Obama and his top aides quietly agonized over how to respond to Russia’s brazen intervention on behalf of the Donald Trump campaign without making matters worse. Weeks after Trump’s surprise victory, some of Obama’s aides looked back with regret and wished they had done more.

Now huddled in a private room on the sidelines of a meeting of world leaders in Lima, Peru, two months before Trump’s inauguration, Obama made a personal appeal to Zuckerberg to take the threat of fake news and political disinformation seriously, though the president did not single out Russia specifically. Unless Facebook and the government did more to address the threat, Obama warned, it would only get worse in the next presidential race.

How Russia’s Meddling Became Facebook’s Problem – Bloomberg

Facebook Inc. finds itself at the red-hot center of the investigation into Russia’s clandestine involvement in the 2016 U.S. election. The social-media giant said it has so far found $100,000 in advertising spending linked to the Internet Research Agency, a Russian troll farm with ties to the Kremlin. The company turned over details on the ads to Congress and to Robert Mueller, who is leading the criminal investigation into Russia’s campaign meddling and possible links to President Donald Trump’s associates. Facebook and its chief executive officer, Mark Zuckerberg, already had a problem with fake news. Now they’re trying to overhaul rules around political advertising before being ordered to do so.

Russian operatives used Facebook ads to exploit America’s racial and religious divisions – The Washington Post

The batch of more than 3,000 Russian-bought ads that Facebook is preparing to turn over to Congress shows a deep understanding of social divides in American society, with some ads promoting African American rights groups, including Black Lives Matter, and others suggesting that these same groups pose a rising political threat, say people familiar with the covert influence campaign.

The Russian campaign — taking advantage of Facebook’s ability to send contrary messages to different groups of users based on their political and demographic characteristics — also sought to sow discord among religious groups. Other ads highlighted support for Democrat Hillary Clinton among Muslim women.

These targeted messages, along with others that have surfaced in recent days, highlight the sophistication of an influence campaign slickly crafted to mimic and infiltrate U.S. political discourse while also seeking to heighten tensions between groups already wary of one another.

Steve Bannon Sought To Infiltrate Facebook Hiring

Steve Bannon plotted to plant a mole inside Facebook, according to emails sent days before the Breitbart boss took over Donald Trump’s campaign and obtained by BuzzFeed News.

The email exchange with a conservative Washington operative reveals the importance that the giant tech platform — now reeling from its role in the 2016 election — held for one of the campaign’s central figures. And it also shows the lengths to which the brawling new American right is willing to go to keep tabs on and gain leverage over the Silicon Valley giants it used to help elect Trump — but whose executives it also sees as part of the globalist enemy.

Reddit Limits Noxious Content by Giving Trolls Fewer Places to Gather – The New York Times

A new study shows that the website reduced hate speech by shutting down two particularly poisonous forums. The findings could have implications for social networks like Twitter and Facebook.

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GERMAN ELECTION

Germany’s election results in charts and maps

Angela Merkel goes into her fourth term as German chancellor following an election that dealt a big blow to the large parties of the centre-right and centre-left, which have been governing together as a grand coalition.

17U26 - MAJOR PARTIES WORST EVER RESULTS

Germany’s Far Right Complicates Life for Merkel — and the E.U. – The New York Times

Even if the far right was contained this year, it broke significant barriers in Europe’s core, making it to the final round of the presidential elections in France and now shattering a post-World War II taboo in Germany by entering the parliament.

It has gained a powerful place from which to alter the agenda of European politics. The far right’s gains in Germany will now complicate not only the calculations of Ms. Merkel, the de facto leader of the European Union, but by extension the path ahead for the entire bloc.

Merkel admits she has ‘polarised’ Germany as grip on power weakens

Angela Merkel, German chancellor, on Monday admitted she had “polarised” her country with her controversial refugee policy after a decisive election breakthrough by the populist rightwing Alternative for Germany that upended national politics and weakened her grip on power.

Merkel wins fourth term but far-right populists make gains

Her win was marred by her party’s worst election result since 1949 and a bigger-than-expected success for her nationalist opponents — the anti-immigration Alternative for Germany. The AfD capitalised on Germany’s refugee crisis and will surge into the Bundestag as the first substantial rightwing populist party since the second world war. Turnout was more than 76 per cent compared with 71.5 per cent in 2013.

European leaders aim to seize the moment for reform

The results of the German elections mean that Ms Merkel’s final term in office, where she will preside over a weakened party base and will need to manage the competing agendas of her coalition partners, is likely to complicate a reform debate already riven with ideological divisions.

AfD leader splits with party after German election breakthrough

Ms Petry’s move showed the party remains deeply divided. Many experts believed it was inevitable that she would quit after she lost an internal power struggle to a rightwing nationalist faction led by her deputy, the 76-year-old former Christian Democrat official Alexander Gauland.

Mr Gauland caused controversy on Sunday evening by saying that the AfD would “hunt Merkel or whoever else down”, and “take our country back”. In the election campaign he also provoked outrage by saying Germany should be proud of what its soldiers had achieved in two world wars.

At a party conference in Cologne in April, Ms Petry had tried to steer the party away from a policy of “fundamental opposition” towards greater realism, and to distance it more clearly from the far right. She argued that this would enable the AfD to take part in future coalition governments, both on a regional and national level. But the initiative was soundly rejected by the rest of the party.

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UBER LONDON BAN

Lyft looks towards London as Uber reels from ban

US-based ride-hailing company Lyft has put the UK on the shortlist of international markets it is looking at to expand as its competitor Uber fights to overturn a planned ban in London.

The company has been working on a plan to expand internationally and is eyeing cities including London, Toronto and Mexico City, according to a person familiar with the internal discussions. Lyft has also held several high-level discussions with London’s transport regulator this year, according to public records.

Uber C.E.O., Reacting to London Ban, Apologizes for ‘Mistakes’ – The New York Times

Uber’s chief executive, Dara Khosrowshahi, apologized in an open letter on Monday for the company’s “mistakes,” after the transport authority for London said last week that it would not renew the ride-hailing service’s license to operate in the city.

“While Uber has revolutionized the way people move in cities around the world, it’s equally true that we’ve got things wrong along the way,” Mr. Khosrowshahi wrote. “On behalf of everyone at Uber globally, I apologize for the mistakes we’ve made.”

Understanding Uber: It’s Not About The App – London Reconnections

Uber London Ltd (ULL) are a minicab operator. This means they require a private hire operator’s licence. Licences last five years and ULL were last issued one in May 2012. They recently applied for its renewal.

ULL were granted a four-month extension to that licence earlier this year. This was because TfL, who are responsible for regulating taxi services in London, had a number of concerns that ULL might not meet the required standards of operational practice. These are rules that all private hire operators – from the smallest local cab firm to Addison Lee – are required to meet. Issuing a four-month extension rather than a five-year one was intended to provide the time necessary to investigate those issues further.

Put simply, this isn’t about the app. So why does everyone think it is?

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RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS

India, Indonesia Bonds: The Latest Emerging-Market Darlings – WSJ

Investors are rushing into the bond markets of India and Indonesia, drawn by rich yields and the rosy growth prospects of countries that a few years ago were considered among the most vulnerable emerging markets.

As with any popular trade, the worry is that the first sign of trouble could send investors running, especially in countries where they hold sizable bets. Such shocks could come from a faster-than-expected pace of U.S. interest rate increases, or a slowdown in Chinese growth, analysts say.

“When volatility in the market comes back, those are positions that are probably the first ones to be hit,” said Roland Mieth, emerging-markets portfolio manager at Pacific Investment Management Co. in Singapore.

Investors Take Cover in Gold as North Korea Threatens War: Chart – Bloomberg

After losing steam last week, bullion is back. Gold surged Monday as North Korea’s foreign minister said his country can shoot down U.S. strategic warplanes in international airspace, fueling a rush to safety. The metal is on track to close above $1,300 per ounce for the first time since Sept. 20. “North Korea doesn’t seem like they are backing down,” says Phil Streible, senior market strategist at RJO Futures in Chicago. “The one possible outcome is some type of military action.”

Muted Markets on North Korea are a Red Flag to Oaktree’s Wintrob – Bloomberg

Monday’s muted reaction was a red flag for Los Angeles-based Wintrob. “Absolutely zero,” he said when asked about North Korea’s market impact during a media briefing in Hong Kong on Monday. From equities to credit, interest rates, default rates and transaction volumes, there is “no sign” that people are concerned about the geopolitical risk, he said. “Which tells me if there is a problem, you have a big reaction because no one is prepared for it.”

China’s Crackdown Brings Developers Crashing Back to Earth – Bloomberg

After share price gains at Chinese property developers accelerated at a breathtaking pace in the past month, led by an 87 percent surge in Sunac China Holdings Ltd., the momentum has started to turn as authorities have taken a harder line on reining in financial risks.

Six of the 10 best performers on the MSCI All-Country World Index in the one month through Sept. 21 were Chinese real estate firms. Chinese developers had their biggest slump in six years on Monday, before some rebounded on Tuesday.

17U26 - CHINA RE SHARES PLUNGE

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MACRO OP-EDS, INSIGHT, EVENTS AND TRENDS

Sears’s History Predicts Almost Everything Amazon’s Doing – The Atlantic

Why is Amazon looking more and more like an old-fashioned retailer? The company’s do-it-all corporate strategy adheres to a familiar playbook—that of Sears, Roebuck & Company. Sears might seem like a zombie today, but it’s easy to forget how transformative the company was exactly 100 years ago, when it, too, was capitalizing on a mail-to-consumer business to establish a physical retail presence.

To understand Amazon—its evolution, its strategy, and perhaps its future—look to Sears.

From its founding in the late 19th century to its world-famous catalog, the history of Sears, Roebuck & Company is well known. Less storied is its magnificently successful transition from a mailing company to a brick-and-mortar giant. Like Amazon among its online-shopping rivals, Sears was not the country’s first mail-order retailer, but it became the largest of its kind. Like Amazon, it started with a single product category—watches, rather than books. But, like Amazon, the company grew to include a range of products, including guns, gramophones, cars, and even groceries.

From the start, Sears’s genius was to market itself to consumers as an everything store, with an unrivaled range of products, often sold for minuscule profits. The company’s feel for consumer demand was so uncanny, and its operations so efficient, that it became, for many of its diehard customers, not just the best retail option, but the only one worth considering.

By building a large base of fiercely loyal consumers, Sears was able to buy more cheaply from manufacturers and wholesalers. It managed its deluge of orders with massive warehouses, like its central facility in Chicago, in which messages to various departments and assembly workers were sent through pneumatic tubes. In the decade between 1895 and 1905, Sears’s revenue grew by a factor of 50, from about $750,000 to about $38 million, according to Alfred D. Chandler Jr.’s 1977 book The Visible Hand: The Managerial Revolution in American Business. (By comparison, in the last decade, Amazon’s revenue has grown by a factor of 10.)

Then, after one of the most successful half-centuries in U.S. corporate history, Sears did something really crazy. It opened a store.

The Untold Story of Kim Jong-nam’s Assassination | GQ

Two women had the most audacious task. Killing the brother of the North Korean leader. Right out in the open, using deadly chemical weapons in an international airport. And the craziest thing? They had no idea what they’d gotten into.

The female assassins had been identified on the CCTV footage with almost comic ease—the Vietnamese woman’s white jumper, adorned with LOL, proved easy to track through the grainy footage. Catching her was simple, too: Doan Thi Huong, 29, was arrested the day after the killing, when she returned to the airport. She had been born in a rural Vietnamese village, had her dreams of celebrity dashed when she lasted 20 seconds on Vietnam Idol, and ended up working as an escort in Hanoi, where she’d been recruited by an undercover North Korean agent.

At 2 A.M. the morning after the murder, Malaysian police marched through the dank hallways of the Flamingo Hotel in Kuala Lumpur, in which stained springless mattresses leaned against walls to air out during the day. In a third-floor room, the second alleged assassin, a 25-year-old from Indonesia named Siti Aisyah, had just finished servicing a Malaysian man and sent him on his way when the officers burst through the unlocked door.

The Modern IPO is Useless. Let’s Reinvent It – WSJ

Critics then and now of the IPO process are right. Companies planning an IPO pick underwriters among the Wall Street banks. Because the banks are on the hook to buy the shares if investors don’t subscribe enough, they have an incentive to underprice the issue to reduce their potential losses.

The too-low price creates excess demand for the shares, since they are artificially cheap, so banks have to ration the supply. Rationing is typically done by giving bigger allocations to their best clients, who do well from the usual first-day pop in price that results from the underpricing.

On top of that, preparing for an IPO involves stressful months of form-filling. An IPO brings an influx of new investors unknown to the company’s founders. Plus employees typically are restricted from selling shares for a six-month lockup period.

Messrs. Palihapitiya and Osborne aim to fix this process. They want tech “unicorns” worth above $1 billion to use a reverse takeover of the cash shell to gain a stock-market listing without all of the regulation and kerfuffle of an IPO.

In World’s Hottest Oil Patch, Jitters Mount That a Bust Is Near – Bloomberg

The telltale signs are the same as always, with companies like his desperate for skilled workers to man the drilling rigs that pierce the horizon in west Texas. What’s unusual, and unnerving, is that the Permian is still thrumming with activity after prices cratered for the stuff it pumps out. Crude is trading for around $50 a barrel, but this is the hottest oil patch anywhere on Earth, a swing producer influencing the trajectory of global markets and threatening OPEC.

That either means the industry has become so incredibly efficient that production can continue to rise even if prices don’t, or that it’s throwing money after a mirage. Pruett, chief executive officer of Midland, Texas-based Elevation Resources LLC, is more and more concerned about the latter.

“Oil men are innately optimistic,” he said, “and sometimes our optimism is our own worst enemy.”

What gives oil people pause is that costs for everything from pressure pumps to well casing have been been rising, up from 20 to 30 percent in the last year, a marker of an overheated situation that could burn out. Another is that possibly too-eager drillers are starting to venture from prime acreage to less bountiful formations, where they may get less bang for their bucks.

By this point, “we’ve given up all of our profit margin,” he said, referring to the industry. “We’re over-capitalized, we’re over-drilling and, if prices don’t rise, we might be facing a double dip in drilling.”

Eric Reid: Why Colin Kaepernick and I Decided to Take a Knee – The New York Times

We chose to kneel because it’s a respectful gesture. I remember thinking our posture was like a flag flown at half-mast to mark a tragedy.

It baffles me that our protest is still being misconstrued as disrespectful to the country, flag and military personnel. We chose it because it’s exactly the opposite. It has always been my understanding that the brave men and women who fought and died for our country did so to ensure that we could live in a fair and free society, which includes the right to speak out in protest.

The large parts of America left behind by today’s economy – Axios

U.S. geographical economic inequality is growing, meaning your economic opportunity is more tied to your location than ever before. A large portion of the country is being left behind by today’s economy, according to a county-by-county report released this morning by the Economic Innovation Group, a non-profit research and advocacy organization. This was a major election theme that helped thrust Donald Trump to the White House.

Compared to the rest of the country, tech hub cities have remained economically robust. Business growth in these areas seems to be especially strong, mostly because the “the rest of the country has fallen off a cliff,” said Glickman. “That’s allowed us to obscure the fact that there are a huge number of people and places being left out.”

U.S. Politics Could Diminish Dollar’s Role as Global Reserve Currency – WSJ

The U.S. currency has been the most important in the world for decades. Central banks hold the bulk of their reserves in dollars. The currency is involved in 9 out of every 10 transactions in the $5.1 trillion-a-day foreign-exchange market. Oil, sugar and almost all other commodities are priced in dollars.

Now some economists and analysts think Washington’s political dysfunction and growing push for isolation may loosen the dollar’s central role in the global economy.

Let’s be clear: The experts don’t think the world will simply drop the dollar. But, they say, the state of U.S. politics could spook investors and central banks enough to pare their dollar-denominated holdings and seek shelter elsewhere. Those fears are reflected in part by the dollar’s big declines in 2017, to its lowest level in nearly 2½ years.

“We are closer to a loss of confidence in the dollar,” says Ben Cohen, a professor of international political economy at the University of California, Santa Barbara. If the dollar’s status were to change, he says, “the most likely explanation would be a failure of domestic policy.”

Hussman: Bubble Mindset – September 25, 2017

Specifically, the mindset boils down to the proposition that stocks have gone up, and though valuations have become rich, stocks have continued to go up, so valuations must not matter all that much. And even if valuations did matter, low interest rates “justify” extreme market valuations while simultaneously offering no alternative to stocks. So market valuations are obscene because stocks have to compete with interest rates, but apparently, interest rates can’t compete with stocks.

In effect, stocks are viewed as good investments because they have been going up, and the evidence that stock prices will go up is that stock prices have gone up. Every additional market advance makes stocks look even better, based on past returns. Indeed, the more extreme valuations become, the more convinced investors become that extreme valuations don’t matter.

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CENTRAL BANKS & MONETARY POLICY

Fed’s Kashkari Again Says Raising Rates A Mistake Given Weak Inflation – WSJ

Federal Reserve Bank of Minneapolis President Neel Kashkari reiterated Monday that he believes raising rates right now is a bad idea. “The Fed should be under no pressure to raise rates. We have time to let inflation climb back to target,” Mr. Kashkari said.

Mr. Kashkari spoke during an appearance at the University of North Dakota. The official is a voting member of the interest-rate setting Federal Open Market Committee, which met last week and maintained its short-term interest rate target at 1% and 1.25%. It also announced the start of a long-touted program to allow its $4.5 trillion balance sheet to start shrinking.

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USA ECONOMY DATA, CITIES AND STATES

Target to Boost Minimum Wages in Battle for Store Workers – WSJ

Target said it is raising its minimum wage to $11 an hour starting next month and to $15 an hour within three years, as the retailer

competes to fill low-wage jobs in a tighter labor market.

U.S. Economic Expansion is Unevenly Spread, Study Says – WSJ

“The prime years of the national economic recovery bypassed many of America’s most vulnerable places altogether,“ the report said. ”Far from achieving even anemic growth from 2011 to 2015, distressed communities instead experienced what amounts to a deep ongoing recession.”

Millions mired in poverty as US upturn passes them by, study finds

According to research from the Economic Innovation Group think-tank, one in six Americans resides in a zip code it defines as a “distressed community”. These are areas with a falling number of businesses and in which the local population has low median income, poor labour force participation, high levels of poverty and low educational achievement.

US violent crime jumps by most in 25 years

The US violent crime rate jumped last year by the largest amount in a quarter of a century, lending support to warnings by President Donald Trump and attorney-general Jeff Sessions of an epidemic of lawlessness. The annual increase was the second in a row.

Nothing Is Too Strange for Cities Wooing Amazon to Build There – The New York Times

Amazon, on the hunt for a place to build a second headquarters, where it plans to invest $5 billion and create 50,000 jobs, has begun an enormous competition among cities across North America. With a loose set of requirements like proximity to an airport and walkability, the e-commerce behemoth has set officials on a journey to sell their towns, with the aim of getting in on what some are calling one of the largest economic development deals of the century.

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COLOR, EARNINGS, SENTIMENT, VALUATIONS

Apple shares flirt with correction territory

Digitimes, citing unnamed sources, reported that Apple suppliers were shipping just 40 percent of the components originally ordered for the premium phone, which goes on sale in early November.

That added to concerns on Wall Street about demand for Apple’s new devices after the launch on Friday of the iPhone 8, a less expensive model than the iPhone X, drew smaller crowds than previous launches.

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DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS

China’s Netflix to Seek at Least $8 Billion Value in IPO – Bloomberg

Baidu Inc.’s iQiyi is targeting a U.S. initial public offering as soon as in 2018 that could value China’s most popular Netflix-style streaming video service at more than $8 billion, two people familiar with the matter say.

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FOREX, CRYPTOCURRENCY, EXCHANGE IMPACTS

Consortium of Japanese banks to launch new digital currency

Japanese banks plan to introduce a digital currency ready for the 2020 Tokyo Olympics as they respond to the threat from China’s Alibaba, which recently launched its mobile-phone payments service in the country.

‘Crypto’ hedge funds spring up in crowded field

Many of the new cryptocurrency funds that have sprung up call themselves hedge funds, but few have the infrastructure or level of experience to qualify as such, neither have they attracted many sophisticated institutional investors or shown signs they are doing much to hedge their long positions.

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ENERGY CRUDE OIL, OIL SANDS, SHALE

Brent oil holds highest level since July 2015

Brent crude is holding above a more than two-year high of $59 a barrel, lifted by fast-growing demand and a threat to Iraqi Kurdistan’s crude exports as the autonomous region holds a referendum on independence.

Citi Says Get Ready for an Oil Squeeze – Bloomberg

Those in the oil market fearing a flood of OPEC supply next year will probably be better off preparing for a shortage, according to Citigroup Inc.

Five countries in the group — Libya, Nigeria, Venezuela, Iran and Iraq — may already be pumping at their maximum capacity this year, Ed Morse, the bank’s global head of commodities, said in an interview. Rather than a surge in output, there’s a risk of a market squeeze emerging as early as 2018, driven by those nations because of weaker investment in exploration and development, he said.

Oil Trader Trafigura Heralds End of ‘Lower for Longer’ Crude Era – Bloomberg

The age of persistently weak oil prices is nearing its end, with demand booming and a supply squeeze in the offing, according to Trafigura Group.

The global market could face a shortage by 2019, Ben Luckock, co-head of Group Market Risk at the third-largest independent oil trader, said at the S&P Global Platts APPEC conference on Tuesday. As much as 9 million barrels a day of supply could be lost to crude-well declines by 2019, and the company is bullish on demand, he said, especially in India, the world’s fastest growing oil consumer.

Oil Traders Turn More Bullish at Asia’s Top Energy Conference – Bloomberg

Stronger-than-expected global oil demand coupled with output cuts by OPEC and non-OPEC producers form the backdrop of this year’s event, which started Sunday evening. Bloated crude inventories have started to shrink, and products markets — particularly diesel — are getting tighter. If 2016 was about $50 a barrel, it’s $60 a barrel this year.

OPEC’s Efforts Pay Off: Oil Is Back in Bull Market – WSJ

U.S. oil prices returned to bull-market territory while the global benchmark hit a two-year high, as investors gained faith that OPEC will successfully shrink a global supply glut.

A drumbeat of bullish data in September, including the International Energy Agency’s upward revision to its demand outlook, has lifted prices. Investors have become more confident that the Organization of the Petroleum Exporting Countries will continue cutting production and that its efforts are helping bring oil’s supply and demand into balance.

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COMMODITIES AGRICULTURE & SOFTS

Here’s One Commodity Rally That May Turn Out to Be Short-Lived – Bloomberg

Since the end of June, prices for the world’s most commonly used crop nutrient have soared 60 percent in the U.S. — rebounding from the lowest levels in more than a decade. There have been similar moves in Brazil, India and the Middle East as some major consumers unexpectedly boost purchases. Shares of fertilizer companies such as CF Industries Holdings Inc. and Yara International ASA have surged.

But the rallies are defying a lingering global surplus that some analysts say will probably send prices back where they were earlier this year. Production capacity in the U.S. is still expanding. And with grain prices weak because of a bumper harvest, farmers may reduce spending as their incomes decline.

“Oversupply is coming on like a tidal wave,” said Ken Zuckerberg, senior inputs analyst for Rabobank in New York. “Farmers have been and continue to be under extreme financial pressure. The near-term optimism seems unsustainable.”

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CANADA, AUSTRALIA, NEW ZEALAND

Meet the Maverick Who’ll Decide Who Runs New Zealand—Again – WSJ

Winston Peters, a 72-year-old populist and immigration hawk, is back in the kingmaker position after New Zealand’s election failed to deliver a clear winner.

Mr. Peters, who entered parliament as a National in 1978 and started NZ First in 1993, has been in this position before. After an inconclusive election in 1996, he reportedly went fishing and then kept the country waiting for weeks. He has also served as deputy prime minister and foreign minister in previous coalition governments. What happens now depends on what Mr. Peters decides are the priority issues from his campaign.

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BREXIT, SCOXIT, LONDON, UK ECONOMY

Michel Barnier rules out transition talk until Brexit divorce is settled – POLITICO

The EU’s chief Brexit negotiator, Michel Barnier, on Monday ruled out a transition period until divorce terms with the U.K. are settled. Speaking to reporters after briefing EU ministers on the state of the negotiations, Barnier said: “For me, discussing a potential period of transition can be done only if we have found an agreement on an orderly withdrawal.”

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CHINA

China ‘strongman’ Xi to put stamp on Communist charter

Since becoming Chinese president in 2012, Xi Jinping has been tightening his grip on civil society, the military and competing political cliques. Now, as the Communist party prepares for the five-yearly congress that will launch his second term, he is about to give the clearest signal yet of the personal power he has amassed.

Mr Xi will elevate a new generation of loyalists to the nation’s top ruling body at the meeting in mid-October, which has been preceded by months of factional fighting, intrigue and purges. But he will also add to the party’s charter — and the way he makes his mark will be closely watched for signs of a growing cult of personality.

“It’s the institutionalisation of the legitimacy of power,” says Kerry Brown, a Chinese studies professor at King’s College London. “Xi Jinping is putting his imprimatur on the body politic.”

China Disrupts WhatsApp Texts as Censor Tools Grow More Powerful – Bloomberg

China is tightening the screws on Facebook Inc.’s WhatsApp, honing and employing cutting-edge surveillance technology to disrupt the messaging service as part of a longer-term crackdown on its online spheres.

China’s ‘Unprecedented’ Anti-Pollution Drive to Rattle Metals – Bloomberg

China’s plans to tackle pollution over the winter could be the “next big event to unsettle global commodity prices,” and plant closures may be compounded by restrictions on transport and construction, according to Morgan Stanley.

“These policies really are unprecedented,” analysts including Tom Price said in an emailed note dated Monday that lifted the bank’s forecasts for most metals. Investors will probably be cautious as they wait to see the scale and timing of the measures, which could include disruptions to ports, rail and road, as well as closing steel and aluminum plants in key hubs, according to the bank.

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JAPAN

Japan’s PM Shinzo Abe calls snap election – BBC News

Japanese Prime Minister Shinzo Abe has called an election a year early and will dissolve parliament on Thursday. Mr Abe said he was seeking a fresh mandate to overcome “a national crisis” amid rising threats from North Korea. His decision comes amid rebounding approval ratings after a record low over the summer and with the opposition largely in disarray.

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DACA, TRAVEL BAN, IMMIGRATION, WALL

Supreme Court Cancels Hearing on Previous Trump Travel Ban – The New York Times

The Supreme Court on Monday abruptly canceled oral arguments on President Trump’s travel ban, signaling the beginning of the end for a politically charged legal case that could have produced a blockbuster ruling on the clash between presidential power and claims of religious discrimination.

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GEOPOLITICS, CRIME, TERRORISM

As Kurds Celebrate Independence Vote, Neighbors Threaten Military Action – The New York Times

The vote, a milestone in Kurdish aspirations for their own state, was opposed by Iraq, Turkey and Iran, which held military exercises on the border.

Iran’s supposed missile launch was fake, US officials say | Fox News

Iranian state television released video footage Friday claiming to show the launch of a new type of medium-range ballistic missile, a few hours after it was displayed during a military parade in Tehran.

Syrian War Drags On, but Assad’s Future Looks as Secure as Ever – The New York Times

Bashar al-Assad has not declared victory but no one is left who could oust him, and regional powers increasingly operate as though he is here to stay.

U.S. to Curb Russian Military Flights Over American Territory – WSJ

U.S. officials are preparing to announce restrictions to Russian military flights over American territory under the Treaty on Open Skies in the latest sign of strain in U.S.-Russia relations.

The treaty, part of a suite of arms-control, transparency and confidence-building agreements that proliferated in the late stages of the Cold War, permits its 34 ratified member states to conduct observation flights over each other’s territory while capturing aerial imagery of military personnel and materiel.

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PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE

WhatsApp messaging service hit by full blockage in China

WhatsApp suffered a complete blockage in China this week, prompting suggestions the government was cracking down on the Facebook-owned messaging app ahead of the Communist party congress next month.

China Blocks WhatsApp, Broadening Online Censorship – The New York Times

With a crucial Communist Party meeting just weeks away, Beijing is further tightening its already formidable internet controls.

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PROPAGANDA, CORRUPTION, AUTHORITARIANISM

In Ivanka’s China, business ties shrouded in secrecy

In the months since she took her White House role, public information about the companies importing Ivanka Trump goods to the U.S. has become harder to find. Information that once routinely appeared in private trade tracking data has vanished, leaving the identities of companies involved in 90 percent of shipments unknown. Even less is known about her manufacturers. Trump’s brand, which is still owned by the first daughter and presidential adviser, declined to disclose the information.

Zinke: One-third of Interior employees not loyal to Trump

Interior Secretary Ryan Zinke said Monday that nearly one-third of employees at his department are not loyal to him and President Donald Trump, adding that he is working to change the department’s regulatory culture to be more business friendly.

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TRADE, PROTECTIONISM, REGULATION, OVERSIGHT

In Trump Era, Boeing Trade Case Boils Over Into ‘Multicountry Feud’ – The New York Times

Boeing is no stranger to disputes with foreign competitors, but a rising tide of protectionism has turned its most recent trade disagreement into an international throw down.

On Tuesday, the Commerce Department is expected to announce a decision on Boeing’s allegation that Bombardier, a Canadian jet maker, was able to sell new aircraft in the United States at unfairly low prices because of subsidies it received from the Canadian government. If the Commerce Department rules in Boeing’s favor, it could impose duties on Bombardier, making imports of the Canadian aircraft more expensive and potentially reshaping the airline industry for years.

Trade fights between multinational companies are routine, with career officials at Commerce weighing dozens of cases each year with little fanfare. Yet Boeing’s most recent challenge has become unusually high profile: In recent weeks, Prime Minister Justin Trudeau of Canada and Prime Minister Theresa May of Britain have publicly and privately urged President Trump to persuade Boeing to drop the case.

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ELECTORAL POLITICS

Alabama Senate election: ‘They think you’re a pack of morons’ – POLITICO

Steve Bannon barreled onstage at a raucous rally inside a barn here to deliver a warning to the national Republican establishment ahead of Tuesday’s special Senate election: I’m just getting started.

In a thundering 20-minute speech Monday night that was partly a rally for insurgent Senate candidate Roy Moore but equally a declaration of war on the Republican Party hierarchy, Bannon made clear that this next act of his political career could make the Republican civil war of recent years look tame.

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SCANDALS, LAWSUITS, FINES, REGULATORY

Anthony Weiner Sentenced to 21 Months in Prison in Sexting Case – WSJ

A federal judge sentenced Anthony Weiner, the former Democratic congressman from New York, to 21 months in prison for exchanging sexually explicit messages with a 15-year-old girl.

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CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE

Amazon Hopes Alexa Voice Assistant Will Offer Traction for Music App – WSJ

Amazon Music listeners will now be able to ask Alexa to DJ on-the-go. Amazon.com said it would launch the personal assistant technology in its mobile music streaming apps on Tuesday.

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AUTOS, ELECTRIC, SELF-DRIVING

Oliver Blume: the Porsche CEO on the electric car revolution

Despite strong sales, the challenges are enormous. “Ten or 20 years ago, it was obvious that when you thought about a new product, you were thinking about design,” he says. Now, instead of perfecting one iteration to the next, Porsche faces wholesale disruption and must balance “staying close to our roots with doing something very innovative”.

The Mission E has been called “the Tesla-killer” by some journalists, but Mr Blume insists Elon Musk’s US electric vehicle company is not a rival. “What Porsche is doing is to follow our own way. We did it in the past and we’ll do so in the future. Therefore it’s not so important what Tesla does.”

Mr Blume credits Mr Musk, Tesla’s co-founder and chief executive, with introducing innovations that have “moved the whole industry”, such as iPad-like displays, but he considers Tesla only “the first step” in the evolution of electric cars.

Porsche, like other traditional carmakers, he says, must always generate profits — something Tesla has not yet achieved for a full year. The US company is listed, but behaves more like a start-up, with its emphasis on spending on research and development. “For us, [generating profits] is the main topic, and for Tesla it’s not,” he says.

Tesla’s China Dream Edges Closer to Reality – WSJ

China is considering relaxing rules requiring foreign auto makers to have a local partner, according to people with knowledge of the situation, a move that could pave the way for Tesla Inc. TSLA -1.74% to manufacture vehicles in the country.

Tesla has long dreamed of planting its flag in China, the world’s biggest market for electric vehicles, but finds itself the only notable auto maker without public plans to manufacture electric vehicles there. Finding a local partner has been a sticking point.

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ARTIFICIAL INTELLIGENCE, DRONES, FUTURE TECH

Bill Gates disagrees with Elon Musk: We shouldn’t panic about A.I.

“The so-called control problem that Elon is worried about isn’t something that people should feel is imminent,” says Gates, according to a transcript of the interview published by the Journal Monday. “We shouldn’t panic about it.”

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SCIENCE, NATURE, PSYCHOLOGY

Man in Vegetative State for 15 Years Responds to Nerve Stimuation

It wasn’t a scene from a daytime soap opera, but his progress was surprising. In medical terms, his condition shifted from a vegetative state to a minimally conscious one. After a month of vagal nerve stimulation, the man was newly able to respond to simple commands, such as slowly turning his head from left to right, Sirigu says.

He was able to stay awake for much longer than before while listening to a therapist read a book. And he responded to perceived threats, opening his eyes wide when someone suddenly approached his face, Sirigu says. People in a vegetative state show no response at all to such invasions of space.

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MISCELLANEOUS

Russian couple suspected of eating up to 30 victims – CNN

Russian police appear to have discovered one of the country’s most grisly cases of cannibalism after pictures of dismembered bodies were found on a phone belonging to one of the main suspects, Russia’s state media reported Monday.

The gruesome case in the southern Krasnodar region has led to the arrest of a 35-year-old man and his wife, both of whom are alleged to have murdered as many as 30 people since 1999 and consumed parts of the bodies, Russian media reported. Police have identified seven victims so far.

Disconnected by Disaster—Photos From a Battered Puerto Rico – The Atlantic

Five days after Hurricane Maria made landfall in Puerto Rico, its devastating impact is becoming clearer. Most of the U.S. territory currently has no electricity or running water, fewer than 250 of the island’s 1,600 cellphone towers are operational, and damaged ports, roads, and airports are slowing the arrival and transport of aid. Communication has been severely limited and some remote towns are only now being contacted. Jenniffer Gonzalez, the Resident Commissioner of Puerto Rico, told the Associated Press that Hurricane Maria has set the island back decades.

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