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29 января, 21:45

White House Told Bolton His Book Contains 'TOP SECRET' Information - 3 Days Before NYT Leak

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White House Told Bolton His Book Contains 'TOP SECRET' Information - 3 Days Before NYT Leak The White House told former national security adviser John Bolton that his tell-all book contains "significant amounts of classified information," including some which is "TOP SECRET" and could harm national security. "Under federal law and the nondisclosure agreements your client signed, as a condition for gaining access to classified information, the manuscript may not be published or otherwise disclosed without the deletion of this classified information," the letter continues. Notably, the letter, sent from the National Security Counsel to Bolton's attorneys, was sent three days before the manuscript mysteriously leaked to the New York Times on the eve of the Senate impeachment proceedings - sparking a debate over calling Bolton as a witness in the trial. One interesting point with this letter - it was transmitted 3 days before the ⁦@nytimes⁩ article came out. pic.twitter.com/EcaZGmUixm — John Roberts (@johnrobertsFox) January 29, 2020 A fact checker for the Washington Post has already suggested the NSC is lying. Washington Post fact-checker insinuates, without any evidence whatsoever, that the top National Security Council lawyer tasked with vetting records is lying about the presence of classified top secret information in Bolton's book. Incredible. https://t.co/CDRLfNoP0j — Sean Davis (@seanmdav) January 29, 2020 As we noted on Tuesday, the identical twin brother of Democratic impeachment witness Alexander Vindman, Yevgeny Vindman, is reportedly in charge of reviewing all publications by current and former officials at the National Security Council (NSC), according to Breitbart News -  which would ostensibly include Bolton's manuscript. Meanwhile, House Impeachment Manager Adam Schiff insisted on Wednesday that Trump's impeachment trial won't be fair unless Bolton testifies. Where have we seen this before? Tyler Durden Wed, 01/29/2020 - 13:45 Tags Politics

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29 января, 21:30

Coronavirus Chaos Forces Starbucks To Shutter Almost Half Its Stores In China

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Coronavirus Chaos Forces Starbucks To Shutter Almost Half Its Stores In China Starbucks announced Tuesday that it could take a big financial hit from the coronavirus outbreak in China, as it was forced to close thousands of stores in top operating markets, reported Reuters.  The outbreak of the deadly disease has so far resulted in 132 deaths and over 6,145 confirmed cases.  Authorities have locked down 15 cities and all transportation networks, along with 57 million people confined to their homes. Many of these cities have shuttered factories and all retail stores for the next several weeks.  Starbucks said it closed more than 2,000 out of its 4,292 stores in China, which caused investors to sell the stock, down about one percent on Wednesday morning.  Management expects a material impact on global sales as there's no clear indication when stores will reopen, considering confirmed cases and deaths of the virus continue to rise exponentially.  The true extent of the damage to the world's largest coffee chain might not be realized until March, but the company stressed in a earnings call on Tuesday that long-term double-digit growth expectations won't be affected.  Starbucks CEO Kevin Johnson said the company is responding to the virus "in a thoughtful and responsible way to protect our partners and support health officials and the government as they work to contain this public health risk. I am proud of how Starbucks China is navigating a very dynamic situation." Starbucks has been one of the first major companies, besides Apple, to stress that a financial hit in 1Q is likely because of the coronavirus outbreak in China.  Investors might want to forget about the global growth rebound narrative for early 2020 as a black swan coronavirus event might produce a shock that could tilt the global economy into recession. This is much different than 2003 SARs, due mostly because of how large China's economy is today and interconnected with the rest of the world.  Tyler Durden Wed, 01/29/2020 - 13:30 Tags Business Finance Environment

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29 января, 21:10

Joe Biden Jokes About Being Old, Dying In Office

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Joe Biden Jokes About Being Old, Dying In Office Former Vice President Joe Biden won't reveal his short list for VP candidates, but whoever it is will have to be able to "immediately" take over in the event the 78-year-old politician dies while in office. "For me, it has to be demonstrated that whomever I pick, there’s two things: One, he’s capable of immediately being a president because I’m an old guy." Biden quickly added that he's "in great health" due to his morning workout routine (which allows him to call voters 'fat' and challenge them to pushup contests), but then said "you never know... you never know what's going on." Biden talks about @KamalaHarris as VP. Says most important criteria is knowing whether the woman or man can do the job ‘ because I’m an old guy.’ pic.twitter.com/Zycm4Z4ywh — Cleve R. Wootson Jr. (@CleveWootson) January 29, 2020 As the Daily Caller's Chuck Ross notes, "Biden has insisted throughout the campaign that his age should improve his electability." "Look, one of the reasons I’m running is because of my age and my experience," Biden said during a debate on Oct. 15. "With it comes wisdom," he continued. "We need someone to take office this time around who on day one can stand on the world stage, command the respect of world leaders from Putin to our allies, and know exactly what has to be done to get this country back on track" (via the Daily Caller). Biden has been dogged by concerns about his age throughout the campaign. His chief critics have pointed to his repeated gaffes on the campaign trail, and several speeches where he misidentified cities and states, or mixed up decades when certain events occurred. Rep. Alexandra Ocasio-Cortez questioned whether Biden’s age had anything to do with his poor debate performances over the summer. “His [Biden’s] performance on the stage kind of raised some questions with respect to [his age],” the New York Democrat said in an interview in July. -Daily Caller Yet - despite Biden's age, documented gropings, racism, creepy leg hair stories involving children, telling 10-year-old girls they're good looking, and snapping at voters - he's still the 2020 Democratic front runner. Tyler Durden Wed, 01/29/2020 - 13:10 Tags Politics

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29 января, 20:59

U.S. Navy Confirms "Incident" Off Coast Of UAE As Oil Tanker Burns

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U.S. Navy Confirms "Incident" Off Coast Of UAE As Oil Tanker Burns Update (1300ET): It appears the ship on fire is not a tanker... The OSPREY is not a tanker, but a heavy load carrier. #OOTT https://t.co/VydvmPS6CE — TankerTrackers.com, Inc.⚓️🛢 (@TankerTrackers) January 29, 2020 *  *  * Footage of a crude tanker off the coast of the Emirate of Sharjah, UAE, surfaced on Twitter about an hour ago. Thick black smoke is seen billowing from the mid-section of a massive crude tanker moored off the coast. BREAKING: Footage of Tanker on fire off the coast of the Emirate if Sharjah, UAE #oott #tanker #fire pic.twitter.com/32GDx3YUdI — Katie McQue (@katiemcque) January 29, 2020 The U.S. Navy's Fifth Fleet has just confirmed there's an incident off the coast of UAE'S SHARJAH but didn't describe what was happening. The "incident" comes hours after Yemen's Houthi rebels launched a missile attack on a Saudi Aramco facility, but an official report has indicated missile defense systems intercepted the projectiles before they could hit their intended targets. Tensions in the Middle East are surging again as crude plunges almost 20%, or just about the technical level of declaring a bear market, in 14 sessions as the coronavirus outbreak across China has traders more worried about a reduced demand outlook. Tyler Durden Wed, 01/29/2020 - 12:59

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29 января, 20:40

FOMC Preview: Here's What The Fed Will Say Today

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FOMC Preview: Here's What The Fed Will Say Today With a global viral pandemic raging, and even the WHO admitting to "human error" in "accidentally" mitigating the severity of the disease to avoid a panic, it is easy to forget that at 2pm the Fed will announce its first policy decision for 2020, this time with uber-dove Neil Kashkari voting. What to expect? Here one can be cynical, and simply take the assessment of Northman Trader who does an exquisite job of summarizing what will likely be the key highlights from today's FOMC announcement: Powell preview: We see no bubbles. Nothing we do juices stocks higher. There's uncertainty so we stay easy. Rate hikes? Ha ha. Rate cuts? Maybe, if the market wants them. Wealth inequality is bad. The Bezos party was awesome. — Sven Henrich (@NorthmanTrader) January 29, 2020 Joking aside, and even taking a more high-bro approach to previewing today's main event, expectations aren’t particularly high for any surprises: rates will almost certainly remain on hold at 1.50%-1.75%, with only a technical adjustment of a 5bp upward move on the IOER the most likely shift (after several downward adjustments previously). Indeed, as Curvature's Scott Skyrm writes, "the main thing to look for is a potential change in the IOER. Over the past two years the FOMC moved the IOER lower when fed funds were trading high within the target range. Many market participants are expecting a 5 basis point increase in the IOER in order to move the daily fed funds rate higher within the range." That said, Goldman writes that "the Fed is more likely to wait until March or later" on adjusting IOER, because while the fed funds effective rate briefly drifted down to 4bp from the bottom of the target range, it has since stabilized at a 5bp spread (in line with IOER). Additionally, in recent weeks, the New York Fed raised the offering rate on two of its term repo operations and cut the maximum size of February term repos modestly, both of which should exert some upward pressure on the fed funds effective rate. Besides an IOER nudge, Jim Reid writes that DB's economic team expects the meeting statement to be mostly unaltered relative to December’s communique and with the absence of an updated Summary of Economic Projections, that leaves Chair Powell’s press conference as the most likely source of new information. Here, the focus will be on five topics; the outlook for the policy rate; persistently low inflation and how it relates to the policy review; funding markets and whether T-bill purchases are QE; financial stability risks; implications for global markets While probably not on the agenda, a key wildcard will be whether Powell discusses the Coronavirus outbreak, and how the Fed may approach any possible economy slowdown that results. In other words, will the Fed promise a "monetary" vaccine should the pandemic lead to a sharp slowdown in either China or around the globe. There is also the chance of standing repo facility announcement, and while consensus is that this still seems premature, Bill Dudley told Bloomberg earlier today that it is possible the Fed could make a surprise announcement on it. Another possibility today is for the Fed to announce further adjustments to its Temporary Open Market Operations in the near term, but as reserves continue to grow, a 5bp adjustment to IOER will become more likely. What about the broader economy? Since the Fed last met in December, the growth picture has remained stable while inflation has fallen a bit short of expectations (as shown below). Financial conditions have eased significantly further, with a 37bp decline in the FCI since the last meeting, mostly driven by large gains in equity markets. This has in part reflected more positive news on the trade war with China, culminating in the signing of the Phase 1 agreement last week. In light of the limited changes in the economic data, the January FOMC statement will likely show minimal text changes. Goldman expects a modest downgrade to the characterization of household spending growth from “strong” to “solid,” reflecting somewhat softer Q4 consumption data since the December meeting. The statement will likely retain the characterization of overall growth as “moderate” and of inflation as “running below 2 percent.” Goldman does not expect any changes beyond the opening paragraph, with the statement continuing to characterize the current stance of monetary policy as “appropriate.” While downside risks have abated following better trade news and a continued easing in financial conditions, many Fed officials referenced slowing global growth, trade policy, and uncertainty as factors weighing on the outlook, even after the announcement of the Phase 1 trade deal on December 13. Fed officials have also increasingly mentioned geopolitical risks, including recent tensions with Iran. Goldman thus expects any acknowledgment of reduced risks from trade to come via the press conference rather than through any change in the statement, whose redline the bank believes will look as follows: Statement aside, Goldman's Jan Hatzius expects Powell’s press conference to reiterate comments made in the December press conference. In particular, expect a somewhat dovish tone that links any future hikes in response to inflation concerns to a significant and persistent move up in inflation and comfort with the “somewhat accommodative” policy stance. Powell, however, will avoid implying that either the current shortfall in inflation or possible future changes to the Fed’s framework create a need for further cuts, given the already accommodative policy stance. As indicated in the minutes of the December FOMC meeting, the Committee will not reaffirm its existing Statement on Longer-Run Goals and Monetary Policy Strategy next week. While typically reaffirmed each January, this delay likely reflects the ongoing framework review, which is set to conclude in the middle of the year. As a reminder, the Fed is expected to formally adopt some form of average inflation targeting, most likely a “fuzzy” version which formalizes the Committee’s desire to have inflation run modestly above 2% in the strong part of the business cycle, but stops short of a mechanical commitment to make up for below-target misses with a proportionate easing bias later. Beyond the January meeting, Goldman sees a high bar for policy moves in either direction, and expects the funds rate to remain unchanged in 2020, even if the market now prices in at least one rate cut this year. That said, comments from Fed officials also suggest wide agreement that the policy rate is likely to remain on hold for the near future, consistent with the median dot showing no rate change in 2020 and a relatively unified Committee, although should the S&P suffer a 5% drop, expect all this to change. Finally, on balance sheet issues, given current Fed communication, Goldman expects the current $60bn per month of purchases for reserve management will run through mid-April at a minimum. Beyond then, the Fed will likely buy bills (and most likely short coupons as discussed previously, with BMO expecting the Fed to start buying coupons in mid-March) at a pace at least consistent with the growth of non-reserve liabilities, or roughly $10bn per month, indicating perpetual QE has finally arrived; amusingly, even Goldman admits that "broadly we think that risks are skewed to purchases being somewhat higher than our baseline." Tyler Durden Wed, 01/29/2020 - 12:40 Tags Business Finance

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29 января, 20:20

Coronavirus Vaccine "Will Take Over A Year" To Develop, Warns Big Pharma Exec

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Coronavirus Vaccine "Will Take Over A Year" To Develop, Warns Big Pharma Exec Markets soared on Tuesday after the Trump administration pumped out overly optimistic headlines of an early-stage trial for a coronavirus vaccine could start within the next three months. It appears "trade optimism" to save the stock market has turned to "coronavirus cure optimism."  The CEO of Novartis added some color on timelines of a potential vaccine for the deadly virus, which has infected over 6,000 people, with 132 deaths across China.  Vas Narasimhan, CEO of Novartis, told CNBC on Wednesday that it could take upwards of one year to find a new vaccine, which he called the outbreak across the world "very serious." "The reality is, it will take over a year in my expectation to really find a new vaccine for this so, we need to really use epidemiological controls to really get this situation in a better place," Narasimhan told CNBC's Julianna Tatelbaum.  Already, scientists in Australia have attempted to create a lab-grown version of coronavirus, and it could be studied to develop virus detection tests and vaccines eventually, Reuters reported.  Investors appear less optimistic about the Trump administration's short timeline of the creation of a new vaccine and are listening to experts, like Narasimhan, who gives a rather gloomy view that the world could be without a proven vaccine for one year while the virus spreads across the globe.  We noted on Tuesday how a commercially available vaccine for the virus could "take months" to develop, but here's the catch: it would take over a year to test on animals before the drug was fit for humans. Maybe it's time to buy some more N95 masks...  Tyler Durden Wed, 01/29/2020 - 12:20 Tags Health Medical Pharma

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29 января, 20:00

Watch: Angry Rand Paul Demands Trump Sue Schumer

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Watch: Angry Rand Paul Demands Trump Sue Schumer Authored by Steve Watson via Summit News, An uncharacteristically angry Senator Rand Paul slammed Chuck Schumer Tuesday, urging President Trump to sue the Democratic leader for defamation amidst the ongoing impeachment saga. “I’m offended and shocked that Schumer would be so scurrilous as to accuse the president and his children of making money illegally off of politics when the only people we know have made money off of this have been Hunter Biden and Joe Biden,” Paul urged. “Hunter Biden makes a million dollars a year, that’s documented, but Schumer simply creates and makes up and says, ‘Oh, maybe the president’s kids are making money.’” Paul continued. Alex Jones breaks down the latest delusion of the left to justify their partisan crusade to overthrow President Trump and the will of the American People. The Senator then noted that former White House advisor John Bolton is peddling a book off the back of the trial. “John Bolton is making money as we speak. He has probably already gotten the several million dollar advance for this book. He’s making money by testifying against the president.” Paul proclaimed. “Look, a month ago, he didn’t want to testify in the House. Why? Maybe his book wasn’t finished. Now his book is finished. He wants to testify,” Paul remarked. Why didn’t John Bolton testify to the US House? Apparently his book wasn’t quite finished yet for presales! — Senator Rand Paul (@RandPaul) January 27, 2020 “The only people we know who have actually made money? Hunter Biden and now John Bolton. And they’re not objective. John Bolton is not objective in any way now that he’s cashing million dollar checks.” Paul noted, echoing comments made by the President: I NEVER told John Bolton that the aid to Ukraine was tied to investigations into Democrats, including the Bidens. In fact, he never complained about this at the time of his very public termination. If John Bolton said this, it was only to sell a book. With that being said, the... — Donald J. Trump (@realDonaldTrump) January 27, 2020 Why didn’t John Bolton complain about this “nonsense” a long time ago, when he was very publicly terminated. He said, not that it matters, NOTHING! — Donald J. Trump (@realDonaldTrump) January 29, 2020 “To have Schumer come up and say out of the blue, ‘Maybe the president’s kids are making money,’ with no evidence at all, that’s defamation and they ought to sue him,” the Kentucky Senator asserted. “There is nothing in the record about the president’s kids,” Paul again pointed out, adding “So Schumer has just created this whole thing out of whole cloth and said, ‘Oh, why don’t we go after the president’s kids?’ We don’t know yet whether or not the president’s dealings with the Chinese president have something to do with the Trumps making money.’ He just made it up! Completely made it up! That’s defamation of character and he ought to go to court and be sued for it.” Paul has continually pushed for having the Bidens testify and even threatened to force a vote on the matter. The Senator has also repeatedly called for the so called ‘whistleblower’ to be put on the stand. Tyler Durden Wed, 01/29/2020 - 12:00 Tags Politics

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29 января, 19:41

Coronavirus Geometric Progression Suggests 100,000 Infections In A Week

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Coronavirus Geometric Progression Suggests 100,000 Infections In A Week Authored by Mike Shedlock via MishTalk, Bianco Research mapped out the geometric progression of coronavirus cases. We are on track for 100K in a week. Jim Bianco shared some of his coronavirus research with me yesterday. I asked if he would make the article public. Thanks to Bianco please consider Coronavirus Growth Rates and Market Reactions. This is a guest post courtesy of Bianco Research Summary The growth in coronavirus infections has continued along a geometric progression for the last 12 days. Should it continue along this path, infection cases could approach 100,000 in a week. Comments The following charts were constructed from the daily update from the National Health Commission of the People’s Republic of China. The blue line in the chart below shows the actual number of reported coronavirus cases stands at 4,515 as of January 27. The orange line is a simple progression that assumes a 53% increase in the cases every day. Or, one person infects 2 to 2.5 people. So it is a simple multiplier, nothing more. This is known as R0 (R-Naught), or the infection rate. Note the chart is a log scale. The reported number of infections perfectly track this simple multiplier. This is how viral inflections growth, along a geometric path. If this track is not altered, the number of reported cases will top 16,000 by Friday. Not trying to be an alarmist, but the number of confirmed coronavirus cases has jumped by more 50% to nearly 4,500 in less than 24 hours. It's possible today's stock market dip-buyers were a bit premature. https://t.co/OJ9fBMfwhX — fred hickey (@htsfhickey) January 28, 2020 To many, such a geometric progression is alarming (see the tweet immediately above). As the orange line shows, this type of growth rate would suggest 80,000+ infections next Monday and 138 million by February 20. Is this growth rate possible? Over the near-term yes. The National Health Commission of the People’s Republic of China offers another statistic, the number of people in quarantine suspected of having the coronavirus. As of January 27, over 44,000 are quarantined. Many of these people will unfortunately be reported as infected. To be absolutely clear, this is NOT a prediction that 100 million people will be infected by Feb 20. Rather, this has been its growth rate for the last 12 days. A vaccine, mutation or successful quarantine/isolation could help reduce this growth rate. Market Implications Mongolia and North Korea have already closed their border with China. Hong Kong is restricting its border. As cases continue to emerge in Japan and outside of Asia, calls will grow for the Chinese to engage in drastic action to stop its spread. This potentially means Chinese businesses will halt, flights will stop (see the plunge in crude oil on oversupply worries) and the global supply chain will grind to a halt. This could have enormous economic consequences for global growth. While not overlooking the human tragedy, the markets have the difficult task of pricing an event that has a small chance of being devastating to global growth, but a more likely outcome of being contained. Yesterday’s selloff in stocks was likely a response to the fact that this virus has continued to grow at a geometric pace thus far. In trying to quantify the market impact, perhaps these charts offer one way to gauge the severity of this virus in the days ahead. End Guest Post Here is another link echoing Bianco's market concerns. Coronavirus fallout could shock the global economy into recession, Stephen Roach warns https://t.co/w0X80ceuK0 — Jeff Lee (@JeffLee2020) January 29, 2020 *  *  * Thanks to Jim Bianco for these charts. He has a couple more including one on death rates that I did not copy. Click on this link for a Free Trial to Bianco Research. Tyler Durden Wed, 01/29/2020 - 11:41

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29 января, 19:20

Bill Dudley: The Fed's Balance-Sheet Expansion Has No Effect On The Stock Market

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Bill Dudley: The Fed's Balance-Sheet Expansion Has No Effect On The Stock Market The dust still hasn't settled on the shock and outrage that followed Bill "let them eat deflationary iPads" Dudley's oped in which he suggested that the Fed could crash Trump's reelection chances by sinking the economy into a recession, when today the former NYFed president and Goldman Sachs economist and current Bloomberg op-ed writer decided to lend some support to his colleague Neel Kashkari by writing yet another op-ed titled "Fed’s Repo Response Isn’t Fueling the Stock Market" in which Dudley "explains" that "equities are being driven by low rates and a healthy economy, not central bank T-bill purchases." As a reminder, two weeks ago, Neel Kashkari sparked a vocal  response among Fed watchers when he urged "QE conspiracists" to show him how the Fed is moving stock prices. And while we did just that, using none other than a recent BIS article to explain to Kashkari precisely how the Fed is "moving stock prices", Neel probably did not anticipate that one of his own FOMC colleagues, Dallas Fed president (and another former Goldmanite), Robert Kaplan, would join the ranks of "QE conspiracists" when he told Bloomberg that what the Fed is doing now is "a derivative of QE when we buy bills and we inject more liquidity; it affects risk assets" adding that "growth in the balance sheet is not free. There is a cost to it." Kashkari certainly did not expect Trump's top economic advisor, Larry Kudlow, and Morgan Stanley CEO James Gorman to also admit that the Fed's balance sheet expansion is quantitative easing, as more and more establishment luminaries joined the ranks of "QE conspiracists." So with Neel suddenly feeling all alone in his lack of understanding of monetary policy, Bill Dudley decided to join the fray, and ignoring all the recent statements from Kaplan, Kudlow and Gorman, trumpeted today that he is "skeptical that the Fed’s balance-sheet expansion is having a major effect on U.S. stock prices." Dudley is of course referring to the fact that ever since the start of the repo "bailout" by the Fed in September, when Powell launched hundreds of billions in overnight and term repos and especially with the start of "Not QE" on October 11, stocks soared, something we have shown virtually every week since October when we demonstrated the uncanny correlation between the rise in the Fed's balance sheet and the S&P. This is how Dudley framed this: During the past few months, the U.S. stock market has surged as the the Federal Reserve bought hundreds of billions dollars of Treasury bills to add reserves to the banking system and calm the repo market. To Dudley none of this matters because "of course, correlation isn't the same as causation. Just because two things are moving together doesn’t mean that one causes the other" which would be a great argument if one were to exclude, for example, the fact that global central bank liquidity and the market's performance ever since the Fed's infamous pivot, have moved tick for tick. In other words, according to Dudley the chart below is pure coincidence: Second, and more importantly, Dudley continues, "the notion that the Fed’s actions are fueling a stock market bubble isn’t supported by how the Fed’s T-bill purchases are affecting short-term interest rates or how the Fed’s actions are increasing liquidity in the financial system." As Dudley then "explains", the "Fed’s T-bill purchases substitute a bank reserve (essentially equivalent to a one-day T-bill) for a slightly longer risk-free asset (a T-bill) that the Fed now holds in its portfolio. But that’s it. There are no funds created to purchase equities." This is great, and if correct would certainly validate Kashkari's skepticism... if it were true. Unfortunately it isn't. As a reminder, none other than the BIS explained how generous commercial bank leverage was necessary and sufficient to allow hedge funds to engage in massively-levered, repo funded Treasury pair trades, and that without this liquidity - which the Fed directly enabled - hedge funds would be forced to unwind trillions in trades, resulting in a liquidation cascade. But don't take our word for it, this is what Claudio Borio, head of the monetary and economic department at the BIS, said to explain the dramatic surge in funding needs among commercial banks which was to meet... ... high demand for secured (repo) funding from non-bank financial institutions, such as hedge funds heavily engaged in leveraging up relative value trades In short: whereas both Kashkari and Dudley only look at the supply side of the newly injected reserves into the US commercial banking system, they both ignore the demand side, i.e., all those funds whose very existence is dependent on there being a generous excess of liquidity in the US financial system, or else all those "free" pair trades that boost returns would collapse overnight. What happens then? See LTCM. Dudley's third, and final point is the most laughable: "there is a more obvious explanation behind the stock market’s rise: the prospect of a sustained economic expansion and a Fed that is likely to stay on the sidelines and not raise its federal funds rate target in 2020." We have no idea what is going on here: maybe Dudley was  busy eating iPads last Monday when the IMF cut its global economic forecast for a 6th consecutive time, including slashing its US GDP forecast for 2020. Or maybe he has not pulled up the Citi US econ surprise index, which after - ironically - surging into the September repocalypse, has since drifted lower and has been hugging the flatline for the past 5 months? So three specious, if not outright fallacious, arguments down, what is the real purpose behind Dudley's screed? It's simple: as Dudley himself says, the answer is important whether the Fed's balance sheet expansion is pushing stocks higher "because the Fed’s large T-bill purchases will end soon. If the central bank’s balance-sheet expansion is truly lifting stocks, then the market is vulnerable when these purchases cease." And it is here, where Dudley's op-ed shifts from facts to hope: The Fed’s expansion of its balance sheet and the increase in bank reserves have stabilized U.S. money markets. As a result, the Fed is likely to gradually taper its repo-market interventions and significantly slow its T-bill purchases after the April tax season. The end of this aggressive provision of bank reserves, however, is unlikely to create major problems for the U.S. equity market. And there you have it: all Dudley hopes to do by siding with his Minneapolise Fed colleague is preparing the market for what comes next, namely the tapering of QE4 and the tremendous growth of the Fed's balance sheet, which as most sellside strategists expect to start slowing sometime in late Q1 and certainly Q2. It explains why at the very end of his op-ed the former NY Fed president has nothing more to offer his read than a hope that "the end of this aggressive provision of bank reserves, however, is unlikely to create major problems for the U.S. equity market." In other words, nothing more than his own, biased opinion; the opinion of a man who outraged even his former employer when he suggested the Fed should prevent Trump's reelection. Well, Bill, you know what they say about opinions and anal sphincters. As for Dudley's emotion appeal, we have a simple counterargument, the same one we offered Neel Kashkari: announce today that QE4, pardon "NOT QE" is ending and surprise the market. Let's see what the reaction will be. Of course, that won't happen for the simple reason that markets would instantly crash, and instead the Fed will make such an announcement in the coming weeks, giving markets plenty of advance notice of what is coming. It is then that all future debate on whether this was or wasn't QE will finally, mercifully end, as the market's reaction will give us all the answers we need, and it is then that we will see if Dudley's conclusion that "it is unlikely to create major problems for US equity markets" is correct. Tyler Durden Wed, 01/29/2020 - 11:20 Tags Business Finance

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29 января, 18:57

WHO Blames "Human Error" After Downplaying Coronavirus Risk, Will Reconvene Emergency Committee Thursday

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WHO Blames "Human Error" After Downplaying Coronavirus Risk, Will Reconvene Emergency Committee Thursday Update (1111ET): After some confusion about the timing, the WHO's Wednesday press conference has begun, competing directly with President Trump's signing of the USMCA trade deal. HO's Tedros said: the decision to reconvene emergency panel is based mainly on the evidence of increasing numbers of cases, and on evidence for human to human transmission that has occurred outside of China. China is sharing virus data with researchers around the world despite reports that they've been holding back WHO's Mike Ryan adds: very impressed with the level of Chinese engagement at all levels and fight against coronavirus. After WHO officials praised China's transparency about the virus outbreak, a reporter questioned the WHO about Beijing's decision to hold back on releasing information to the public. The WHO's Director-General insisted that China and Wuhan local authorities have been completely transparent, citing "red alerts" on a local website. Even after reports claimed government scientists knew about the virus as early as Dec. 1, Tedros said authorities have been providing comprehensive updates since Dec. 31. Of course, the reporter isn't just talking about sharing information with the community - he's talking about sharing information with the international community. Also, case counts aren't the only vital piece of information: Beijing withheld evidence of human-to-human transmission, as well as evidence that health-care workers were getting sick. But if the world believes China truly has this outbreak "contained", then the risk to global markets will evaporate. * * * The WHO is still apparently took worried about the fragility of global equity markets to finally acknowledge that the novel coronavirus outbreak has metastasized into a global pandemic. A press conference that was supposed to be held Wednesday afternoon in Switzerland was postponed, and then postponed again. Now, the organization is saying it plans to reconvene its emergency committee meeting on Thursday. The press conference hasn't yet been cancelled. Instead, it's been moved to 2 pm (where it will compete directly with Jerome Powell). Meanwhile, the WHO's Director-General tweeted Wednesday that the organization had made an embarrassing error in its 'situation report' published earlier this week. Due to a "human error", the word "moderate" was wrongly inserted in the organizations' risk assessment of the coronavirus, basically admitting that they mistakenly played down the severity of the crisis. WHO deeply regrets the error in this week's situation report, which inserted the word “moderate” inaccurately in the #coronavirus global risk assessment. This was a human error in preparing the report. I have repeatedly stated the high risk of the outbreak https://t.co/Qp871ObmdE — Tedros Adhanom Ghebreyesus (@DrTedros) January 29, 2020 In a second tweet, he said the Emergency Committee would have "more news" tomorrow. [email protected] is monitoring the new #coronavirus outbreak every moment of every day. My respect and appreciation to my colleagues @WHO who are showing great commitment. We will have more news following tomorrow’s Emergency Committee meeting. — Tedros Adhanom Ghebreyesus (@DrTedros) January 29, 2020 Dr. Ghebreyesus has just returned from Beijing, where he met with senior Chinese officials and praised Beijing's response to the outbreak However, the local officials who have been set up by Beijing for scapegoating claimed yesterday that their hands were initially tied by Beijing. Tyler Durden Wed, 01/29/2020 - 11:20 Tags Disaster Accident

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29 января, 18:45

Hunter Biden 'Relevant Witness' Says Dem Senator As Joe Begs For Backup

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Hunter Biden 'Relevant Witness' Says Dem Senator As Joe Begs For Backup Sen. Joe Manchin (D-WV) said on Wednesday that Hunter Biden would be a "relevant witness" in President Trump's impeachment trial over withholding aid to Ukraine while pushing for an investigation into allegations of Biden corruption. "I think so — I really do," Manchin told MSNBC's "Morning Joe," adding "I don’t have a problem there because this is why we are where we are." "Now, I think that he [can] clear himself — what I know and what I’ve heard ... But being afraid to put anybody that might have pertinent is wrong, no matter if you’re a Democrat or Republican." Sen. Manchin (D): Hunter Biden is a relevant witness. “This is why we are where we are”pic.twitter.com/Uc4vlLDHRD — Benny (@bennyjohnson) January 29, 2020 Manchin expounded after his appearance: Sen. Joe Manchin: "The whole process is hypocrisy... They've all reversed themselves, Schumer and McConnell both." pic.twitter.com/pP8ks3Ktd0 — The Hill (@thehill) January 29, 2020 During this week's impeachment arguments, President Trump's defense walked the Senate through Hunter Biden's 'nepotistic at best, nefarious at worst' board seat at Ukrainian gas giant Burisma. Joe Biden, meanwhile, bragged in 2018 about withholding $1 billion in US loans to Ukraine if they didn't fire their top prosecutor who had been investigating Burisma. "All we are saying is that there was a basis to talk about this, to raise this issue, and that is enough," said Bondi, who noted that Hunter Biden was paid over $83,000 per month to sit on Burisma's board even though he had zero experience in natural gas or Ukrainian relations while his father was Vice President and in charge of Ukraine policy for the United States. Pam Bondi explains the Bidens’ connection to the corrupt Ukrainian gas company Burisma https://t.co/SpmArCYbb7 pic.twitter.com/aKNqQKo8cl — RNC Research (@RNCResearch) January 27, 2020 Other top Democrats have categorically ruled out testimony from the Bidens, with Senate Minority Leader Chuck Schumer claiming that Hunter wouldn't be able to offer relevant testimony about Trump's interactions with Ukraine, and that his appearance would be a distraction. Republicans have threatened to subpoena Hunter, 49, if Democrats succeed in securing testimony from former White House National Security Adviser John Bolton, who claims in a leaked manuscript of his book that President Trump explicitly tied Ukraine aid to investigations into the Bidens. Democratic strategists haunted by damaging right-wing attacks on past nominees Hillary Clinton and John Kerry say the specter of Hunter Biden getting publicly grilled by Senate Republicans would inject uncertainty into a still-fluid primary race. ... Trump’s allies vow that if Bolton is called, they’ll subpoena Hunter Biden, and perhaps the former vice president. “If you call John Bolton, we’re going to call everybody,” South Carolina Senator Lindsey Graham, one of Trump’s most vocal defenders, said Tuesday. He made clear that means the Bidens. -Bloomberg "Biden can expect Trump and outside groups to deliver the same experience that wrecked Clinton’s and Kerry’s campaigns," said Trump's former chief strategist, Steve Bannon, adding "Isolate and amplify the most damaging charge against the strongest Democratic candidate and hammer into voters’ minds until Election Day." Meanwhile, in 'please clap' news, Joe Biden's 2020 campaign is now begging his supporters to defend him against online attacks from Bernie Sanders supporters, according to Bloomberg. With less than a week before the Iowa caucuses, the Biden campaign expressed concern on a call to its supporters that Sanders people were “getting ugly” and it had to “step up its game” defending the vice president. The message was confirmed by campaign national press secretary TJ Ducklo. -Bloomberg And last but not least, Joe Biden put his hands on an Iowa voter Tuesday, telling him to "go vote for someone else" after he was asked not to support the construction of new pipelines. The man replied that he would support Biden in the general election against Trump, but that he supports billionaire Tom Steyer for the primaries. A man in Iowa asks Joe Biden to stop supporting the building of new pipelines. Joe Biden tells him to go vote for someone else and then starts accusing him of voting for Bernie Sanders. Actually, the man says, he's voting for Tom Steyer. Very awkward. pic.twitter.com/OOuGiypED8 — Zaid Jilani (@ZaidJilani) January 28, 2020 Tyler Durden Wed, 01/29/2020 - 10:45 Tags Politics

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29 января, 18:36

WTI Extends Losses After Failed Missile Attack, Big Crude Build

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WTI Extends Losses After Failed Missile Attack, Big Crude Build Oil prices surged overnight after API's surprise draw and headlines about a Houthi missile attack on Aramco facilities, but after tagging unchanged from Friday's close (erasing the post-virus drop), comments that all missiles were intercepted sent prices lower and refocused traders' attention on the potential for an imminent demand crisis due to the 'Devil'-Virus spreading across the world. Refinery utilization rates have been sluggish for this time of year, says Bob Iaccino, market strategist at Path Trading Partners: “If refineries are not operating at capacity, it’s because they don’t have the demand, a lower draw or a build could make the demand fear worse” So all eyes once again revert to inventories.. API Crude -4.27mm (+500k exp) Cushing +1.02mm (-870k exp) Gasoline +3.27mm (+1.3mm exp) Distillates -141k (-1.1mm exp) DOE Crude +3.548mm (+500k exp) Cushing +758k (-870k exp) Gasoline +1.203mm (+1.3mm exp) Distillates -1.289mm (-1.1mm exp) A big surprise crude draw from API was not enough to trump china demand fears but the official data from DOE shows a much bigger than expected 3.548mm crude build Source: Bloomberg As Bloomberg warns, the world is swimming in refined products. Gasoline stockpiles hit a seasonal high in data going back 29 years in last week’s report. Demand is likely to be soft, especially if we see a big slowdown in exports to Asia as fears persist about the coronavirus. US Crude production remains at a record high, as forward-looking rig-counts begin to stabilize after their collapse... Source: Bloomberg WTI had dropped back to just above $43 before the DOE data - close the levels before API's surprise draw was reported. Finally, as Bloomberg Intelligence Senior Energy Analyst Vince Piazza explains, measured against the 2002-2003 SARS outbreak, the coronavirus situation in China will have a larger absolute effect but about the same effect on a relative basis. Daily demand may be curtailed by more than 200,000 barrels vs 100,000 in the earlier incident, but China now accounts for 15% of global use vs 7% in 2003. U.S. exports and therefore inventories may show a more marked effect, however, as China is now more integrated into the global economic system. Tyler Durden Wed, 01/29/2020 - 10:36 Tags Business Finance