With VW and GM pouring billions into production facilities for electric cars, Tesla’s supremacy is far from assured
In 1978, Norman Foster’s Sainsbury Centre for Visual Arts at the University of East Anglia was a gleaming vision of the future. A forthcoming exhibition there celebrates a distinctly British architecture driven by free-form technology and high idealsAh yes, the 1970s. The three-day week, the winter of discontent, Austin Allegros, punch-ups with the National Front, mutterings of rightwing coups, the Sex Pistols swearing on family TV. They included, to be sure, such now unavailable non-trivia as free higher education, affordable housing and a functioning health service. But it was a decade that, having flared into being in the psychedelic glow of its predecessor, embrowned itself into the tones of hessian and muesli and the guttering shadows of power cuts. It was the time when architectural modernism, imploding under the weight of self-doubt and external criticism, gave way to a meek “neo-vernacular” of bricks and pitched roofs.And then, in Norwich (to misquote the opening credits of the epoch’s epic game show, Sale of the Century), appeared an assured and beautiful statement of faith in the new: a shining shed on, if not quite a hill, this being Norfolk, at least an upward incline. The Sainsbury Centre for Visual Arts at the University of East Anglia, designed by the fortysomething architect Norman Foster, was, as he now says, based on “an optimistic view of the future”. The era’s mood of malaise and decay could only bounce off its aluminium hide. Continue reading...
Authored by Darius Shahtahmasebi via TheAntiMedia.org, At this critical juncture in modern history where tensions run at an all-time high between world powers that possess extensive nuclear weapons supplies, the United States and the United Kingdom would do well to re-educate themselves on the art of diplomacy. Instead, the United Kingdom has put its foot on the throttle, openly blaming Russia for poisoning a former Russian spy and his daughter in the U.K. Together with France, Germany and the United States, this western alliance has called on Russia to explain the military-grade novichok nerve toxin attack on Sergei Skripal and his daughter Yulia in Salisbury, England. They both remain in critical condition. U.K. Prime Minister Theresa May was one of the first to openly blame Russia for the incident, calling it a “brazen” act and expelling 23 Russian diplomats almost immediately. She also cut off high-level contact with Moscow for the attack on U.K. soil. U.S. President Donald Trump also came out behind the U.K., stating it “certainly looks like the Russians were behind” the incident. Apparently, Trump is happy to believe conspiracy theories regarding Russian interference as long as he is not the subject matter. Do we know the full facts regarding what happened to Skripal? No. But the minute western governments not only claim to know what happened but also take further action to demonize the state in question, we should immediately be skeptical. Let’s take a hypothetical scenario. Supposing someone wanted to kill Skripal but hoped to make it look like the Russian government was behind it, would it really be that hard for someone else to use the novichok nerve toxin in the commission of the killing? “Could somebody have smuggled something out [of the Soviet Union]?” Amy Smithson, a U.S.-based biological and chemical weapons expert, queried to Reuters. “I certainly wouldn’t rule that possibility out, especially a small amount and particularly in view of how lax the security was at Russian chemical facilities in the early 1990s.” If this is a possible scenario as Smithson has intimated, it should be ruled out as a possibility before the U.K. expels Russian diplomats who may or may not have been involved in an assassination attempt. Diplomacy is an art form. Right now, we don’t need world powers escalating tensions and blaming Russia for every single thing that goes wrong across the globe. Just how powerful is Russia, exactly? We are not only supposed to believe that the former Soviet Union can elect presidents at whim in the world’s most powerful country, but that it is also openly going around trying to assassinate people on British soil using chemical weapons that would directly implicate itself as the perpetrator. Former British Ambassador to Uzbekistan Craig Murray wrote in a blog post: “The same people who assured you that Saddam Hussein had WMD’s now assure you Russian ‘novochok’ nerve agents are being wielded by Vladimir Putin to attack people on British soil. As with the Iraqi WMD dossier, it is essential to comb the evidence very finely. A vital missing word from Theresa May’s statement yesterday was ‘only.’ She did not state that the nerve agent used was manufactured ONLY by Russia. She rather stated this group of nerve agents had been ‘developed by’ Russia. Antibiotics were first developed by a Scotsman, but that is not evidence that all antibiotics are today administered by Scots.” Murray also referred his readers to an article in Foreign Policy that laid out Israel’s quietly advancing chemical and biological weapon capabilities. If we want to talk about evidence, it’s actually worth noting that Israel is reportedly in the business of launching assassination attempts, even on scientists and researchers. Israeli operatives have even been caught during their assassination attempts whereas, as Murray notes, Russia has never actually killed a “swapped spy” before. Of course, this is not to say that Israel is responsible for the crime in question, but until hard evidence is produced that directly implicates the current Russian leadership, it is worth considering that other countries also have the power to launch assassination attempts. Regardless, more allegations against Russia are still mounting. The U.S. recently accused Russia of a wide-ranging cyber assault on its energy grid and other parts of its infrastructure, gearing up to impose more sanctions in response. Now, after years of constantly being painted as the enemy, Russia just declared via Twitter that a “Cold War II” has, indeed, begun. And who can blame them? The temperature of 🇷🇺 🇬🇧 relations drops to ➖2️⃣3️⃣, but we are not afraid of cold weather. pic.twitter.com/mand9YyoaE — Russian Embassy, UK (@RussianEmbassy) March 14, 2018 It is time for these countries to go back to the drawing board and teach themselves diplomacy. Nikki Haley is not a diplomat, the essential requirement of her job at the U.N. She is a warmongering neoconservative who is incapable of asking for basic evidence. The only high-level politician calling for diplomacy is the U.K.’s Jeremy Corbyn, the same man who is persistently demonized by the local and worldwide media, even while he has continued to be on the right side of history regarding almost every conflict since he became a politician. “This horrific event demands first of all the most thorough and painstaking criminal investigation, conducted by our police and security services,” Corbyn said. “To rush way ahead of the evidence being gathered by the police, in a fevered parliamentary atmosphere, serves neither justice nor our national security.” He also said that his Labour party is “of course no supporter of the Putin regime, its conservative authoritarianism, abuse of human rights or political and economic corruption” but “that does not mean we should resign ourselves to a ‘new cold war’ of escalating arms spending, proxy conflicts across the globe and a McCarthyite intolerance of dissent.” While the calm voice of reason, Corbyn to this day is vilified by the corporate media. The hostility towards Russia is one thing, but the double standards and hypocrisy are completely mind-blowing. The U.S. and its allies are the most meddlesome entities on the planet, but whenever something moves that can be blamed on Russia, Syria, North Korea or Iran, they take immediate action against adversarial states before a full investigation can ever be completed. It is a shoot first, ask questions later type of approach, and it needs to stop.
Authored by Irina Slav via OilPrice.com, Two trillion dollars: this was the price tag Riyadh put on the jewel in its crown, state oil and gas giant Aramco. This is how much the company was worth, officials said, if you multiplied its proven reserves by a factor of US$8, which is the figure used to value oil and gas reserves. There were doubts about that valuation from the start, and now these are deepening as the company crawls closer to the initial public offering. For starters Aramco’s opacity was very likely to make potential investors suspicious. Aramco has never published financial reports. Although there were assurances that it will start doing so ahead of the IPO, to date the latest entry on Aramco’s Corporate Reports page is from July 20 last year, and includes production figures for 2016. Last year, sources had told Reuters the company was planning to start publishing financial reports early this year, but this has not happened yet. Leaving these concerns aside, there is the bigger problem of the valuation methodology itself. In a blunt but very informative story for Bloomberg Gadfly, Liam Denning suggests that Aramco may need crude oil at US$80 a barrel to get the US$2-trillion valuation it claims it has. That’s in addition to making several wild assumptions along the way. The oil world today is different from what it was just five years ago. The oil price collapse taught oil producers to be more economical and to pick their projects more carefully to keep cash flows coming in and sharing them with shareholders. Yes, they had to sell additional stock, and some suspended dividends, but the lesson was learned, and the moment prices started perking up, dividends returned, and stock was bought back. Yields are what investors want when they consider whether to invest in a company, Denning says. They don’t care about proven reserves and production costs as such. Instead, they care about how these can turn into dividends. It’s as simple as that, but this is where it stops being simple. The average free cash flow yield of the global oil supermajors is between 5 and 7 percent. Russia’s Rosneft, while not a supermajor per se, sports the highest one, at 12.950 percent, while Exxon has the lowest at 5.194 percent. Based on these actual figures, Denning makes an entertaining set of calculations involving major assumptions about the price of oil, Aramco’s production and costs, and profit margins. The result is that to lure investors with a 5-percent cash flow yield (the minimum that would make it competitive), Aramco needs oil to sell for US$80 a barrel. This is the only scenario where it can be valued at US$2 trillion: the only scenario out of 35, all based on favorable assumptions. Oil is not going up to US$80 anytime soon unless something cataclysmic happens. Denning is also generously - and deliberately—not factoring in the inherent regional risk in the Middle East that is likely to act as a deterrent to potential investors. The publicity machine around the IPO has begun to creak already. Recently all those suspecting Aramco won’t make its own deadline for the IPO had to pleasure to be proved right: Saudi officials said it will be delayed until next year. Now, Bloomberg is reporting that U.S. investors have misgivings about the IPO. Citing sources wishing to remain unnamed, Bloomberg had this to say: “Among the issues raised were the $2 trillion valuation Saudi Arabia wants for the world’s largest oil producer, the scale of dividends Aramco’s prepared to pay and the impact of the shale boom on oil prices over the next few years.” Investors want cash, not massive reserves. Maybe this would prove a lesson Aramco has to learn the hard way.
The data analytics firm that used voter-targeting tactics to help President Donald Trump clinch the White House improperly collected information on more than 50 million Facebook users, The New York Times alleged Saturday in a report that raises further questions about both companies' conduct during and after the 2016 election.The Times article, and a companion piece published by the Observer in London, landed hours after Facebook announced that it had suspended the firm, Cambridge Analytica, while investigating whether it had improperly kept data on as many as 270,000 users.But the newest reports raise the prospect that the breach was far broader than what Facebook copped to Friday night — while tying the privacy violations directly to Cambridge's work for Trump's campaign and its alleged entanglements with Russia.The Times quoted an anonymous Cambridge employee as saying that hundreds of gigabytes of unencrypted Facebook data still exist on Cambridge's servers, contradicting assurances given to congressional investigators. Until Friday, the newspaper added, "Facebook downplayed the scope of the leak and questioned whether any of the data still remained out of its control."Enough is enough, top Senate Intelligence Committee Democrat Mark Warner said in a statement Saturday.“This is more evidence that the online political advertising market is essentially the Wild West,” said the Virginia senator, who has sponsored legislation to force greater transparency in online political advertising. “Whether it's allowing Russians to purchase political ads, or extensive micro-targeting based on ill-gotten user data, it's clear that, left unregulated, this market will continue to be prone to deception and lacking in transparency.”The Times said Cambridge Analytica — which has deep ties to Republican donor Robert Mercer and conservative firebrand Steve Bannon — used the harvested information to build a powerful political tool as political campaigns were increasingly looking to sway voters on popular digital platforms.The company has denied the claims, which date back to 2014. In a pair of statements, Cambridge Analytica said it had hired Global Science Research, a company run by U.K. professor Aleksandr Kogan, to conduct a “large scale research project” in the U.S. The company said it was unaware that Kogan’s data violated Facebook’s terms of service and subsequently deleted it at Facebook’s insistence.“No data from GSR was used by Cambridge Analytica as part of the services it provided to the Donald Trump 2016 presidential campaign,” the company said Saturday. “Cambridge Analytica only receives and uses data that has been obtained legally and fairly.”Facebook, for its part, sought to get ahead of the Times article with an announcement late Friday night that it had suspended Kogan, Cambridge Analytica and its parent company, Strategic Communication Laboratories, as well as a third firm, Eunoia Technologies, from the social network. Facebook said they had collected information from 270,000 users who voluntarily downloaded an app that Kogan created — though friends of those users with more relaxed privacy settings may have also had their data swept up. “People knowingly provided their information, no systems were infiltrated, and no passwords or sensitive pieces of information were stolen or hacked,” Paul Grewal, Facebook’s vice president and deputy general counsel, said in a statement. “Nevertheless, this was a scam. Mr. Kogan misled us all.“Protecting people’s information is at the heart of everything we do, and we require the same from people who operate apps on Facebook,” Grewal added. “If these reports are true, it's a serious abuse of our rules.”Nevertheless, the New York Times report will undoubtedly create headaches for both Cambridge Analytica and Facebook. Each has come under fire from Washington lawmakers for their involvement in the 2016 president election, which according to U.S. intelligence agencies was marked by interference from Russian actors looking to undermine Hillary Clinton and, eventually, boost Trump’s prospects. Cambridge has been called upon to provide both information and testimony to congressional and FBI investigators exploring the extent of the election meddling and whether affiliates of the Trump campaign colluded with Russians. WikiLeaks founder Julian Assange, for example, said last year that CEO Alexander Nix had contacted him in an effort to obtain hacked emails from the Clinton's campaign.The company’s ties to U.S. conservatives are many. Mercer and Bannon played key roles in helping the company establish a foothold in the U.S. politics, the Times report explains. The company first used data to target voters during the 2014 midterm elections. And before switching to assist the Trump campaign, Cambridge Analytica was tapped to work on the presidential bid of Republican Texas Sen. Ted Cruz.Cambridge has also done work for a super PAC created by former U.S. diplomat John Bolton, who's been reported to be a potential candidate for White House national security adviser if Trump dismisses H.R. McMaster.Meanwhile, Facebook has been hauled to Capitol Hill to face a battery of questions from lawmakers concerned that the network did not do enough to prevent fake news and foreign trolls from manipulating American voters throughout the election cycle. Facebook, Google and Twitter found that ads, pages and fake accounts aiming to stoke political and social discord reached more than 125 million internet users.The Times story also raises questions about whether Cambridge and SCL may have violated U.S. law by having Canadian or European employees working on contracts for American political campaigns. Cambridge Analytica told the Times that all “personnel in strategic roles were U.S. nationals or green card holders," the newspaper said.
In a move that ratchets up the pressure on UK-based data analytics firm Cambridge Analytica, Facebook has suspended Cambridge from its platform after receiving reports that Cambridge stole user data taken from a third-party app. In a blog post, Vice President and General Counsel Paul Grewal explained that a researcher working for Cambridge lied to Facebook and improperly captured data from an app that was using Facebook login. Alexander Nix The accusation provides a rare glimpse into how, exactly Cambridge Analytica, which is partly owned by Trump backer Robert Mercer, came into possession of the reams of user data that its founder boasted helped it guide the Trump campaign to victory in 2016. Protecting people’s information is at the heart of everything we do, and we require the same from people who operate apps on Facebook. In 2015, we learned that a psychology professor at the University of Cambridge named Dr. Aleksandr Kogan lied to us and violated our Platform Policies by passing data from an app that was using Facebook Login to SCL/Cambridge Analytica, a firm that does political, government and military work around the globe. He also passed that data to Christopher Wylie of Eunoia Technologies, Inc. Like all app developers, Kogan requested and gained access to information from people after they chose to download his app. His app, “thisisyourdigitallife,” offered a personality prediction, and billed itself on Facebook as “a research app used by psychologists.” Approximately 270,000 people downloaded the app. In so doing, they gave their consent for Kogan to access information such as the city they set on their profile, or content they had liked, as well as more limited information about friends who had their privacy settings set to allow it. Although Kogan gained access to this information in a legitimate way and through the proper channels that governed all developers on Facebook at that time, he did not subsequently abide by our rules. By passing information on to a third party, including SCL/Cambridge Analytica and Christopher Wylie of Eunoia Technologies, he violated our platform policies. When we learned of this violation in 2015, we removed his app from Facebook and demanded certifications from Kogan and all parties he had given data to that the information had been destroyed. Cambridge Analytica, Kogan and Wylie all certified to us that they destroyed the data. Meanwhile, a New York Times story published Saturday claims the firm siphoned off information from the profiles of more than 50 million Facebook users without their permission. Despite Cambridge assuring Facebook the data were deleted - Facebook eventually received reports that the data was never disposed of. Several days ago, we received reports that, contrary to the certifications we were given, not all data was deleted. We are moving aggressively to determine the accuracy of these claims. If true, this is another unacceptable violation of trust and the commitments they made. We are suspending SCL/Cambridge Analytica, Wylie and Kogan from Facebook, pending further information. We are committed to vigorously enforcing our policies to protect people’s information. We will take whatever steps are required to see that this happens. We will take legal action if necessary to hold them responsible and accountable for any unlawful behavior. Cambridge Analytica founder Alexander Nix once boasted that his firm had collected as many as 5,000 data points on the 270 million likely American voters - a staggering number, according to Mother Jones. Looking back, that admission may have been ill-advised: Cambridge Analytica is now embroiled in a lawsuit over whether they need to turn over the data they've collected on individual voters should those voters request it. This threatens to pull back the curtain on methods that the company used to help Trump win - including the rumored use of a technique called psychographics. Psychographics is a groundbreaking data-analysis technique that sounds like something adapted from a bad science-fiction novel. Here's Mother Jones: Cambridge Analytica opened its doors in 2013 and claims to use big data to predict human behavior and influence political elections, according to the company’s website. But what sets Cambridge Analytica apart from other data firms is that it claims to use what’s known as psychographics to build its voter profiles. Many political campaigns have used demographics (e.g., age, race, gender) to target political messaging, and President Obama successfully and famously used consumer data to target voters. But psychographics, in theory, go deeper, claiming to be able to predict a voter’s personality traits, such as how organized, extroverted, or quick to worry they are, by looking at a person’s online and consumer behavior. Representatives of the company have since tried to walk this back: To add, even Cambridge Analytica itself is sending mixed messages about the use of psychographics on the Trump campaign. Nix said in that same fall 2016 presentation, “Of the two candidates left in the election, one of them is using these technologies,” referring to Trump. Then, at a December post-election panel hosted by Google, Matt Oczkowski, Cambridge’s head of product, said “I don’t want to break your heart; but we actually didn’t really do any psychographics with the Trump campaign.” Cambridge Analytica said it's in touch with Facebook in order to resolve the matter as quickly as possible, according to a company statement on Saturday. "No data from GSR was used by Cambridge Analytica as part of the services it provided to the Donald Trump 2016 presidential campaign," the statement said. The suspension comes as CA is embroiled in a lawsuit, brought by David Carroll, a media professor at Parsons School of Design, over whether it must turn over the data it has collected on American voters when they request it. While there are no US laws requiring this, CA, being a UK company, is subject to UK laws, that mandate disclosure. Still, critics of CA have sought to portray the firm as a purveyor of psychological warfare that has actively tried to interfere in international elections. The company has been forced to repeatedly deny allegations that it conspired with Russia to sway the US election in favor of Trump - allegations that surfaced after it was revealed that Nix, the founder of CA, had offered Julian Assange help in releasing Hillary Clinton's stolen emails.
SARAH HOYT: Russians Don’t Understand Us Enough to Hack Us. Okay. Before you read this, check under your bed for Russians. Once you’re done, check under your desk for Russians. Then check your computer for Russian robots. You won’t find any, of course, but you’ll have assured the left and the mainstream media (but I […]
Via Themis Trading blog, Do you remember Haim Bodek? We first wrote about Haim back in October 2012 in a post titled “Who is Haim Bodek?”. Haim was the first whistleblower to expose how a major stock exchange (Direct Edge) created an order type (Hide Not Slide) that provided HFT firms with unfair advantages that propelled them to the exchanges’ best prices at investors’ expense. Back in 2012, the financial media was all over this story and market structure savvy journalists like Scott Patterson were able to shine a light on these shady exchange practices. Scott’s article “How “Hide Not Slide” Orders Work” was a virtual blueprint in how unsuspecting investors were getting ripped off by HFT traders who were armed with Direct Edge’s special order type. Direct Edge was subsequently fined $14 million by the SEC for failing to properly describe order types. Haim has been relatively quiet for the past few years (at least publicly) but he has just resurfaced as the whistleblower in the latest SEC case against the NYSE. Last week, we wrote about the details of this case and how the NYSE was fined $14 million by the SEC for five serious violations. Haim Bodek was the whistleblower for the most serious – in our view – of these five violations in which the NYSE failed to state that pegging interest orders created the possibility of detection of prices of non-displayed depth liquidity. We were outraged by the facts of this case and were sure that the financial media would cover the case similar to how they did back in 2012 with the Hide Not Slide scandal. But you know what we heard from the press? Crickets. Hardly a word was written. The WSJ covered the story in a very small article buried deep in the B section of the print edition which highlighted the case as “trading malfunctions”. We felt that the contribution of Haim Bodek and his team has been overlooked so we reached out to Haim to get some more details about how he once again caught a major stock exchange with their hand in the cookie jar. Haim told us that he thought everything in this case was the investigated very methodically and thoroughly by the SEC and that this case should encourage more whistleblowers to have confidence in the regulators’ readiness to pursue solid cases against key players in securities markets. Haim first learned of the NYSE pegging interest problem when a trader who had encountered it firsthand approached Haim for his assistance with solving this bug-like puzzle. In 2013, the trader (who remains anonymous) confronted the NYSE with a complaint that his non-displayed orders might be shadowed by other orders which would peg to the non-displayed order. The trader suspected this was occurring because he was placing non-marketable orders in illiquid securities and monitoring subsequent trading activity. Despite repeated interactions of the trader with NYSE, the exchange shockingly declined to fix the problem and concluded, as noted in the SEC order, that “the system had operated according to specifications.” Culminating in a whistleblower complaint submitted to the SEC, Haim worked with the trader and formed a research team that included his long-standing counsel Shayne Stevenson of Hagens Berman LLP and Stanislav Dolgopolov who is the chief regulatory officer of Decimus Capital Markets. This team quickly put together the details of the case and realized that NYSE had created an order type that would allow pegging interest (PI) orders to peg to non-displayed interest. Haim’s team established that the shadowing was accomplished by the entry of thousands of pegged orders which went through floor broker pipes and used the pegging interest (PI) order type. These orders were placed by customers of the floor brokers and were non-bona fide orders that acted as a type of radar to identify non-displayed orders. In November 2014, NYSE filed a rule proposal, which was later withdrawn, to explain that the “next available best-priced interest” to which PIs could peg included non-displayed orders. However, in March 2015, NYSE realized – with some pressure being exerted by the SEC – that they had a problem and decided to stop the information leakage by changing the order type to peg to only displayed interest through another (quickly approved) rule proposal. Haim Bodek’s team was responsible for alerting the SEC to what was going on at the NYSE. He initially didn’t think that the complaint would result in a significant fine because it was so deep in the weeds of market structure and likely to disappear through technical housecleaning. But Haim was elated to see the SEC dig into the case and (as he assumes) reject whatever efforts were assuredly made by NYSE to try convincing the regulators it had done nothing wrong. However, Haim was disappointed that the financial press did not take time to cover this story and bring to light what a major exchange was doing to investors. He wonders what has happened to the reporters like Scott Patterson. This is Haim’s fourth whistleblower case contributing to a significant monetary penalty imposed by the SEC. In fact, Haim has played a role in both of the record-tying SEC fines against securities exchanges, and he wants the world to know that, if you put together the right team, you can help correct bad behavior by working with the regulators even if that behavior is being perpetrated by a major exchange. While whistleblowers do get a share of SEC fines, the work they do is not easy. There are thousands of whistleblower complaints filed with the SEC every year, and very few ever get to collect a reward. Haim Bodek and his team performed a public service, and we as investors should all be thankful to them.
White House chief of staff John Kelly reassured West Wing staffers on Friday that further administration upheaval is not forthcoming, press secretary Sarah Huckabee Sanders told reporters, an assurance that runs counter to multiple media reports of further changes in Trump’s team.“The chief of staff actually spoke to a number of staff this morning, reassuring them that there were personnel changes — no immediate personnel changes at this time — and that people shouldn’t be concerned,” Sanders said at the daily press briefing. “We should do exactly what we do every day. And that’s come to work and do the very best job that we can. And that’s exactly what we’re doing. That’s exactly what we’re focused on, and many of us have relayed that to other staffers that weren’t part of that meeting.”Although he told West Wing staff members that no changes were imminent, Kelly is said to be among those in the Trump administration possibly on their way out. Multiple media outlets reported this week that Trump is close to replacing national security adviser H.R. McMaster, while the job status of several Cabinet and Cabinet-level officials — David Shulkin, Ben Carson, Ryan Zinke and Scott Pruitt — has also been the subject of speculation.Rumblings of further shifts in the Trump administration have followed the president’s surprise firing of Secretary of State Rex Tillerson earlier this week, a decision the secretary reportedly learned of only when the president posted it on Twitter. After firing Tillerson, Trump told reporters that he was “really at a point where we’re getting very close to having the Cabinet and other things that I want.”Sanders dismissed the notion that talk of a further shakeup in the Trump administration has damaged morale inside the West Wing.“We're going to continue to focus on having record success in the second year as we had in our first year,” she said, “and we fully expect to do that and we expect to do that as a staff and as a team.”
Authored by Jeffrey Snider via Alhambra Investment Partners, If indeed this inflation hysteria has passed, its peak was surely late January. Even the stock market liquidations that showed up at that time were classified under that narrative. The economy was so good, it was bad; the Fed would be forced by rapid economic acceleration to speed themselves up before that acceleration got out of hand in uncontrolled consumer price gains. On February 1, the Atlanta Fed’s GDPNow tracking model was moved up to predict 5.4% GDP growth in Q1. It was the perfect top for the hysteria; a blowout estimate that was every bit as hollow as the narrative. First, the narrative: The economy is on track to put up blockbuster growth numbers in the first quarter, according to the latest forecast from the Atlanta Fed… If the forecast holds, it would be the best quarter since the Great Recession ended in 2009. The previous highest was third quarter of 2014, which hit 5.2 percent. The GDP tracking model was, in the beginning, a good idea. To be able to predict the big aggregate in close to real-time was a considerable draw. Unfortunately, it has proven just as difficult as ever. Demonstrating over time instead that there is quite a bit of noise on these shorter timescales, it’s the very problem that led to the creation of GDP (derived from GNP before it) in the first place. To be fair to CNBC, the outlet publishing the article quoted above, these flaws were pointed out in the article. In particular, GDPNow over the past year and a half has fallen frequent victim to the ISM and sentiment. According to the ISM and other PMI’s, the economy is booming in a way it hasn’t since the turn of the millennium. According to GDP, not even close. The Atlanta Fed’s model has trouble reconciling these vast differences. Part of the problem especially in the latter stages of 2017 was the introduction of artificial elements in the aftermath of Harvey and Irma. For a project like GDPNow, the shorter scale for measurement meant a susceptibility to distortions. This is particularly true when carrying estimates of output from one quarter to start off the next. For inflation hysteria, however, none of this mattered. The economy was if not yet booming just about to start. Retail sales, for example, absolutely surged starting last September. What had been unusually weak (even for this economy) throughout the middle months of 2017 suddenly the US consumer was awake. For three months, retail sales (seasonally adjusted) jumped by 3.5%, an annual rate of 14.7%. It fed not just GDPNow’s baseline but fueled the hysteria. Common sense is less charitable at times. The major problem, other than the obviousness of the timing, was the scale of that acceleration. A boom is as much a process as a crash. As it builds, you can see the reasonable basis for a change in trend (almost always staring with income). It doesn’t just start at the flip of a switch. Retail sales, as many other economic accounts, appeared to do just that, however. There was a very weak economy and then out of nowhere there wasn’t. Since November, retail sales have now declined for the third month in a row through February 2018. Estimates for December have been reduced at each update since their initial release in January. The following first two months of 2018 have only elongated the giveback aftermath of the hurricanes’ aftermath. The length of retrenchment suggests it’s too much for bad weather, or at least the typical mainstream excuse that somehow assigns winter as a cause for consumer pause. There was some heavy storms and snows, but there are always heavy storms and snows. Not only was the hurricane distortion temporary, we are also likely seeing the emerging second part of Frederic Bastiat’s broken windows fallacy. While there was clearly a substantial gain in economic activity following the twin landfalls of Harvey and Irma, the bill for all that destruction is now coming due and is surely falling upon a wider segment than just those who fell within the hurricanes’ tracks. In addition, though it’s only two months so far, there obviously has been no boost due to tax cuts and bonuses, either. This is also unsurprising, representing more of the same hardened (meaning permanent, absent the mythical S-curve shift) consumer problems that have plagued the global economy since 2006. In short, without enormous debt supplement labor utilization and therefore incomes and wages are too low to support anything more than low level growth even at these “best” of times upturns (essentially a no-growth baseline when factoring the downturns). This hurricane cycle, for lack of a better term, is proving that fact once again. The economic problem is intractable, not something that will just disappear for whatever reasons one might wish to ascribe for tomorrow. This is the major problem with interpretation of these and other statistics; we have been conditioned to believe that economic growth just happens, and that if it is absent for any length of time it won’t be for much longer. Therefore, the longer it is absent the more assured many people (Economists, in particular) become that restoration just has to be close at hand. The idea that an economy can stagnate (depression) for a very long time is still a foreign one no matter how many times it has been re-affirmed since August 2007. This desperation forces the hype; to look to any small positive as if definitive on the matter even when it is otherwise easily explained as something like Harvey and Irma. For February 2018, retail sales unadjusted were up just 4.06%. That’s the same level of growth far too close to the recession 3% level prevalent since 2012. And those figures include the 3-month hurricane boost late last year. Worse, retail sales are up just 5.1% since February 2016, which was just about the bottom of that last downturn. Taking out sales of gasoline, retail sales were up just 3.7% year-over-year. As a result of this “unexpected” decline in retail sales, as well as the lack of acceleration in the CPI, GDPNow currently predicts Q1 GDP of just 1.9%. This latest reduction is primarily attributable to lowered expectations for Personal Consumption Expenditures; or, the same “residual seasonality” kind of first quarter that is both typical and all-too-easily explained. What’s important about GDPNow is not its latest 1.9% prediction, rather it’s the broad variation between that low and the prior 5.4% high. Who knows what Q1 GDP might end up being? It is descriptive of the difficulties with not just economic measurements, but more so the economy itself. As always, the question needs to be asked every time – what has changed? Time is definitive on this matter, just not in the way it is taken in the mainstream. If the answer is tropical weather, or tax cuts, then the return to weakness is nowhere near “unexpected.”
Russia and North Korea are making waves with their big, scary weapons. But America has ideas of its own, including this nightmarish machine.
It's been four months since an Argentinian submarine went missing in the southern Atlantic. Relatives of crew members on the submarine are demanding answers. They're not convinced by government assurances that everything possible is being done to find the vessel. Al Jazeera's Teresa Bo reports from Buenos Aires. - Subscribe to our channel: http://aje.io/AJSubscribe - Follow us on Twitter: https://twitter.com/AJEnglish - Find us on Facebook: https://www.facebook.com/aljazeera - Check our website: https://www.aljazeera.com/
MANILA (Reuters) - The Philippines has notified the U.N. secretary-general of its decision to withdraw from the International Criminal Court (ICC), but has assured the United Nations of its commitment to the rule of law.
Milton Ezrati Economics, Asia Dependence is baked into China's industrial plans—and will likely fail. Chinese premier Li Keqiang recently delivered a remarkably revealing speech. Addressing the National People’s Congress for two full hours early in March, he stressed the county’s determination to rely on broad industrial policies as a means to development. The objective, to use Li’s words, is to “speed up work to build China into a leader in manufacturing.” Li doubtless wanted his audience and the world to hear his remarks as a challenge to Western economic power. Many no doubt did. What Li failed to note, and assuredly does not realize, is how his blueprint for progress, rather than ensure Chinese dominance, will instead keep that country indefinitely dependent on the West, doom it to repeat its already well-established pattern of wasteful overbuilding, and ensure that its economy will always remain just a bit behind the West technologically. Dependence is baked into these industrial plans. By twisting effort to secure manufacturing dominance instead of a balanced economy, China will for the foreseeable future produce much more stuff than it can use. However impressive that great manufacturing surplus might look, it can only do China good if its state-owned firms can sell it. Without buyers, stacks steel girders, and concrete reinforcement bars will only rust in factory yards, as will the “jet engines” and “clean cars” that Li told the world he very much wants China to produce in abundance. And, as Li made clear in his long talk, China’s plans firmly put most of those buyers abroad. The whole structure then depends on prosperity elsewhere. Most reports on China’s economy draw attention to this fact, though they seldom acknowledge its significance. In, for instance, the commentary on the country’s recent growth acceleration, every article, even China’s own statistical bureau, points to the accelerating growth in the United States and Europe as the main contributor to China’s improvement. If the buyers fail to grow, China, by its own design, will languish. Read full article
Francis Grice Politics, Asia Trump must stay vigilant to the very real risk that Kim intends only to pursue short-term goals through deception rather than genuinely search for long-term solutions. According to Kim Jong-un, the centerpiece of his intended negotiations with President Donald Trump is a newfound willingness to stall or even disarm his nuclear program in exchange for satisfactory guarantees of security. Yet, there are no obvious ways in which Trump could offer any assurances or concessions at the talks he has agreed to hold that would meet Kim’s security needs. The coldness of this reality, undoubtedly fully known by Kim, should cast doubt onto the sincerity of his request for a bilateral summit to start with. At the most basic level, it seems unlikely that Kim could ever accept a purely verbal or implicit reassurance in exchange for denuclearization. Kim will have learned this lesson by watching the fate of Muammar el-Qaddafi in Libya, who unilaterally renounced his nuclear program in 2003 in response to the American-led intervention into Iraq. Qaddafi had hoped that better relationships with the West would reduce the chances of it intervening against him militarily. This gambit failed in 2011 when a rebellion erupted in Libya and numerous states provided aid, arms and even airstrikes to assist the rebels against him. Read full article
Texas Republican Jeb Hensarling is standing in the way of President Donald Trump’s next big legislative victory.The outgoing chairman of the House Financial Services Committee, backed by House leadership, is refusing to rubber-stamp the landmark bank deregulation bill the Senate passed Wednesday night in an overwhelming, bipartisan vote after years of work.The White House wants a bill on Trump's desk as soon as possible. But Hensarling warned Thursday that the House would sit on the legislation until senators agree to negotiate how to expand the package to include proposals that would benefit more sectors of the financial industry. That’s something the lawmakers are showing no appetite for after a brutal floor debate leading up to the bill's passage. “Some seem to be under the impression that we are going to vote on their bill," Hensarling said. "They are under a misimpression." Hensarling's refusal to accept the Senate proposal — which already incorporates about 40 pieces of House legislation — is stoking fears among some in the Trump administration and in the finance industry that their big win may become mired in the House.For the conservative lawmaker, a legacy is on the line. He faces a short window to put his imprint on the most important banking legislation since the 2010 Dodd-Frank law — probably the last major initiative he’ll deal with before he steps down in January. Senate Democrats who helped draft and pass the bill have inflamed tensions with the powerful committee chairman as well as House leaders by saying there's little room to modify the legislation. In a comment that rattled House Republicans, Sen. Jon Tester (D-Mont.) said Wednesday, "If he adds a bunch of crazy shit, it's going to die."“We've gotten it through the Senate," Tester said. “If he screws it up in the House, it's not going to go anywhere, and that would be real unfortunate for our community banks and credit unions." Hensarling has refused to back down, and he's now trying to force the Senate Democrats to come to the negotiating table."The next step is for certain senators to realize that for this to get to the president's desk they will have to negotiate in good faith," he said. "I'm not sure everyone has awakened to that reality."It’s familiar territory for Hensarling. His tenure as Financial Services chairman has been marked by a struggle to advance conservative economic policies that he says are critical to protect taxpayers and curtail government intervention in financial markets. He has at times let those steadfast beliefs trump pragmatism, even if it meant losing a legislative battle.This time, he's fighting for bills that he says have broad support from Democrats as well.Since he became chairman in 2013, the Financial Services Committee has been the spawning ground for dozens of pieces of legislation intended to scale back regulations. Amid resistance from former President Barack Obama, the Senate and the top Democrat on his committee, Rep. Maxine Waters (D-Calif.), much of the legislation that Hensarling ushered through the House failed to become law. But his deregulatory efforts "kept the fire going," said Independent Community Bankers of America President and CEO Cam Fine."He kept pounding the drum during the Obama administration," Fine added. "As chairman, he kept having his committee pass correction bill after correction bill after correction bill even though they didn't go anywhere in the Senate. It was a constant reminder that there were things happening that were hurting the local financial institutions."Trump’s election changed the equation. Coupled with control of Congress, Republicans — and a coalition of willing Democrats — found their first real opportunity to revise Dodd-Frank.Hensarling wasted little time. He drafted a sweeping deregulatory bill called the Financial CHOICE Act that the House passed in June. It failed to attract a single Democratic vote, dooming its chances of becoming law.Late last year, Hensarling announced his plans to retire and pivoted. He began moving a raft of narrower, bipartisan bills, including pieces of the CHOICE Act, that would chip away at regulations in a more targeted fashion.At the same time, Senate Banking Chairman Mike Crapo (R-Idaho) began ramping up talks with moderate Democrats on how to move a wide-ranging bank deregulation bill through the Senate. The negotiations, which built upon talks that had been quietly under way in the Senate for years, produced the bill the Senate passed Wednesday in a 67-31 vote. Sixteen Democrats withstood a barrage of attacks from the progressive wing of their party to help advance the legislation.The next morning, Hensarling stood his ground. He described the Senate bill as "an important first step in getting a bill to the president's desk" and demanded that senators sit down with him at the negotiating table."I have spoken to the Speaker, and I am assured that S. 2155 will stay on his desk unless and until the Senate negotiates with the House," he said.Hensarling's office has circulated a list of 30 bipartisan bills that he wants to be considered. In a press briefing Thursday, Hensarling highlighted a few of them, including proposals aimed at easing rules for "angel" investors and mergers and acquisitions brokers. In addition, he said there was language in the Senate bill that he wanted to negotiate.Hensarling has declined to highlight that the Senate bill includes dozens of proposals that have also moved through the House — a fact that the bill's supporters are beginning to tout amid the emerging legislative stalemate."There's a ton of stuff," Sen. Heidi Heitkamp (D-N.D.) said Wednesday. "[National Economic Council Director] Gary Cohn was an honest broker coming back and forth saying, 'Here's the list.' A lot of what's in this bill already is stuff that has had tremendous support over in the House and the House has done a good job on."For Hensarling, however, it's still worth pushing for a few more to be included."The good news is if they respect our work product there's so much more for them to choose from," he said.A Crapo spokeswoman declined to comment Thursday on Hensarling’s request for negotiations. Democrats indicated they had no desire to expand the Senate legislation. Heitkamp said in a statement that the bill was “carefully crafted so it would maintain strong bipartisan support.”Hensarling is insisting on negotiations even as some House Republicans have admitted publicly that the Senate was already under strain. Last month, Rep. Patrick McHenry (R-N.C.), the vice chairman of the Financial Services Committee and one of the House's top vote counters, said the Senate was "at its limit with that piece of legislation."The rift between the House and the Senate is exposing the legislation to a fresh wave of lobbying from sectors of the finance industry dissatisfied with the bill, including large insurers, big banks and credit-reporting companies. At the same time, Hensarling has begun to face unusually public pressure from lobbyists who want the Senate bill to become law without delay."We agree with Chairman Hensarling that not every single good proposal is in the bill," said Fine of the community bankers trade group. "However, we will not participate in killing a solid bipartisan bill just because it does not have everything we could want in it. We will not participate in making the perfect the enemy of the good."A senior Trump administration official praised the House for passing bills with bipartisan support."There's been a lot of good policies that have been shaped in the House and Senate that are coming together in this bill," the official said. "The president has said he would sign the bill."
MAXIMUM VERIFICATION: It’s the “deadly fine print” in any denuclearization deal with North Korea. Assuring denuclearization will require a very intrusive, long term, take your shorts off, take your shoes off, spread your glutes, check your hair for lice, open every cave, every bunker, every laboratory, every crevice verification regimen. Call it maximum verification. If […]
Forgive us if you've heard this one before. For at least the third time in the past month, a respected national media organization has published a story claiming that President Trump's legal team is leaning toward advising their client to sit for an interview - albeit with certain restrictions - with Special Counsel Robert Mueller. Today's report, published by Politico, bore certain similarities to a story published by the Wall Street Journal last week. Last month, the New York Times reported that Trump's lawyers were pushing Mueller to accept written answers - a solution reminiscent of Ronald Reagan's handling of the Iran-Contra scandal. One of Politico's sources said the negotiations were "moving fast", and that an interview could be arranged soon. Of course, we've heard that one before. "I don’t think it’s months and months out. I don’t think it’s in a week," said the person familiar with the negotiations. "But I think it’s moving toward closure." Given Trump's litigious reputation, one might expect the president to be comfortable during interviews and depositions of this nature. However, his legal team is worried that what Politico characterizes as the president's "improvisational nature" could lead to Trump accidentally uttering a falsehood, potentially drawing a perjury charge from Mueller. Trump is hardly a stranger to legal proceedings: In one 2012 deposition, according to the Atlantic, Trump said he had participated in more than 100 depositions. But that doesn’t mean Trump is always well-prepared to field complex legal questions under oath. During a 2016 deposition tied to his lawsuit against a chef who backed out of a deal to open a restaurant at Trump’s Washington D.C. hotel, Trump was asked what he did to prepare for the hearing. "I would say virtually nothing," he replied. "I spoke with my counsel for a short period of time. I just arrived here, and we proceeded to the deposition." Trump added that he didn’t study any documents beforehand. Before any interview, Trump and his lawyers must complete their sensitive negotiations with Mueller over its terms. Among other things, Trump’s lawyers have argued that the burden is on Mueller to show his investigation can’t be completed without an interview with the president. They have also studied the feasibility of answering questions in writing, as President Ronald Reagan did during the Iran-Contra scandal. And they have made clear their resistance to Mueller questioning Trump more than once. To mitigate these risks, Trump's lawyers are seeking clear boundaries for the topics discussed, and the NYT has even reported that Trump's lawyers were seeking assurances that, should Trump agree to a sit-down, Mueller would see to it that the probe concludes before a given date. Trump's legal team should already have a clear picture of what Mueller intends to ask: Thanks to his documents requests, Mueller is interested in a broad range of topics from Trump’s firing of FBI director James Comey to how he responded to the theft and leaks of Democratic emails during the 2016 presidential campaign. "It’s a tug of war both internally and probably with Mueller," said a senior Republican who recently met with the president. "The end goal for the White House is to get as narrow a discussion as can be possibly negotiated including maybe just answering written questions like Reagan." Then again, we've also heard reports to the contrary: The NYT's Maggie Haberman published a report earlier this month about Trump's growing frustration with his legal team - drawing a tweeted rebuke from the president. Some legal experts objected to the idea that Mueller might agree to a predetermined end-date for the probe. Solomon Wisenberg, a former deputy on Kenneth Starr's independent counsel investigation into President Bill Clinton, said that idea would be a non-starter for Mueller. "That’s bullshit," he said. "You accommodate the president but you don’t change the rules for him in a substantive way." Notably, one anonymous Trump associate who spoke with Politico confirmed an idea that we first highlighted following the initial reports about the behind-the-scenes bargaining: That is, the notion that Trump's legal team is using these media reports as a ploy to convince Trump that they at least tried to strike a deal with Mueller. As one strategist points out, Trump's legal team has crafted a "win-win" scenario for itself. "It's a strategy by the lawyers," the defense attorney said. "Either Mueller will agree to the terms in some fashion, and at least they get something out of it, or he won't and then they can convince the president not to sit for the interview." ...Sounds like a pretty good deal to us. The House Intelligence Committee announced last week that it would be ending its collusion probe - to the horror of the committee's Democrats, who have pledged to issue a dissenting report.
We're beginning to notice a pattern here... For the second time in the span of a week, the New York Times is once again rebutting reports that Special Counsel Robert Mueller's wide-ranging probe into malfeasance by President Trump and his associates is finally winding down. This time, a report from Politico published earlier today claimed that Trump's lawyers were nearing an agreement on a sit-down with Mueller... But barely six hours later, NYT reported that Mueller has subpoenaed records from the Trump Organization pertaining to Russia. The request is clearly intended to gather more information about Trump Tower Moscow, which has reportedly become a focus of the Mueller probe. As the Times explains that "The subpoena is the latest indication that the investigation, which Mr. Trump’s lawyers once regularly assured him would be completed by now, will drag on for at least several more months." As a reminder, the Moscow deal initially caught Mueller's attention when he learned that Trump Organization lawyer Michael Cohen had reached out to a spokesman for Russian President Vladimir Putin to inquire about getting the necessary permissions to restart the project, which had stalled. The Trump Organization has said that it never had real estate holdings in Russia, but witnesses recently interviewed by Mr. Mueller have been asked about a possible real estate deal in Moscow. In 2015, a longtime business associate of Mr. Trump’s emailed Mr. Trump’s lawyer Michael Cohen at his Trump Organization account claiming he had ties to President Vladimir V. Putin of Russia and said that building a Trump Tower in Moscow would help Mr. Trump’s presidential campaign. Mr. Trump signed a nonbinding “letter of intent” for the project in 2015 and discussed it three times with Mr. Cohen. Wary of the risks that his tax return might become part of the investigation, Trump publicly warned Mueller during an interview in July that his family's finances should be off limits to the Mueller probe. ...However, it appears that ship has sailed. Mr. Mueller could run afoul of a red line the president has warned him not to cross. Though it is not clear how much of the subpoena is related to Mr. Trump’s business beyond ties to Russia, Mr. Trump said in an interview with The New York Times in July that the special counsel would be crossing a “red line” if he looked into his family’s finances beyond any relationship with Russia. The president declined to say how he would respond if he concluded that the special counsel had crossed that line. While Congressional investigators have demanded documents from the Trump Organization, this is the first time Mueller has done so. The request suggests that Mueller is once again zeroing in on Trump's finances, and the finances of his associates (and you know what that means)... The Times added that Trump's lawyers are still negotiating with Mueller's team about the parameters of a possible sit-down (or written) interview. Trump recently brought on another Washington lawyer to join the team of lawyers who are handling the Mueller probe. As far as we know, Mueller's probe isn't focusing on collusion so much as it's focusing on Trump's and his family's (i.e. Kushner's) business ties with Russia and other foreign powers like the United Arab Emirates. Obstruction of justice has also been bandied about, but given that former FBI Director James Comey has already declared during a Congressional hearing that the president didn't obstruct justice, it might be difficult to convince a jury otherwise. And the notion that the Trump campaign was in direct contact with Putin - and furthermore that their partnership (which didn't exist) had a meaningful impact on the outcome of the election - has also been discounted... ...That leaves Trump's incredibly complex and murky financial history. Financial misdeeds proved to be Paul Manafort's undoing - but then again, he had already been on the FBI's radar before he even met Trump. Stocks erased most of their earlier gains on the news...