- For The First Time In 25 Years, China Has To Make A Choice Between External Stability And Growth
Back in August 2 we reported of a historic event for China’s economy: for the first time in its modern history, China’s current account balance for the first half of the year had turned into a deficit. And while the full year amount was likely set to revert back to a modest surplus, it was only a matter of time before one of the most unique features of China’s economy – its chronic current account surplus – was gone for good.
Fast forward to this weekend, when as part of its summary of Top Macro Trades for 2019, UBS wrote that the loss of China’s current account cushion, softening domestic activity, and upcoming tariffs mean that “for the first time in 25 years, China would have to make a choice between external stability and growth.”
Still, with many policy levers still available, China is likely to avoid uncontrolled depreciation, but with little carry protection, UBS believes that it makes sense to remain defensive on the CNY, especially as many currency strategists expect the trade war between the US and China to get worse, pushing the Yuan below Beijing’s “redline” of 7.00 vs the dollar.
Which brings us to one of UBS’ top recommended themes and trades for 2019, namely “China Stimulus” represented by going long Chinese stocks, and short the Yuan.
As UBS explains, Beijing’s dilemma is that Chinese easing now has to balance conflicting demands between external stability and growth. This according to the Swiss bank, “should lead to a welcome, but more limited, stimulus in this cycle and more emphasis on domestic than foreign spending. In turn, this easing cycle will likely provide more benefit to domestic assets rather than traditional China satellites.”
In equities, the direct expression of this theme is to be long China A-shares versus EM ex-China, with UBS expecting the coming infrastructure spending in China to have a larger impact on domestic equities than on EM in aggregate, and China equities should have more upside.
Meanwhile, from a portfolio perspective, long USD/CNY combines well with the equity trade, because in the base case, Chinese equites can perform well as the currency weakens. In a more adverse scenario for Chinese equities, the equity trade would likely perform poorly, but USD/CNY should be a good hedge.
To get a sense of the sensitivity between the relative strength of the Yuan and equities, UBS shows the following chart mapping the impact of a 1% change in the USDCNY on global stocks.
Finally, to complete its thematic recommendation, UBS adds a fixed income leg in the form of long Asia HY versus short Asia IG position as “slower Chinese growth, a weaker CNY, and a tight onshore credit environment should push Asia credit spreads wider, but HY should fare relatively better given extreme valuations.” Then again, many said the same thing for the US junk bond market until it finally cracked earlier this month…
- CJ Hopkins: Beware The 'Trumpenleft'
Authored by CJ Hopkins via The Unz Review,
Unless you move in certain leftist circles, you may not have heard about one of the Russians’ most insidiously evil active measures, an active measure so insidiously evil that it could only have been dreamed up in Moscow, the current wellspring of insidious evil. Its official Russo-Nazi-sounding code name is still being decided on by leftist cryptographers, but most people know it as the “Trumpenleft.”
The Trumpenleft (or “Sputnik Left,” as it is also called by professional anti-Putin-Nazi intelligence analysts) is pretty much exactly what it sounds like. It is a gang of nefarious Putin-Nazi infiltrators posing as respectable leftists in order to disseminate Trumpian ideology and Putin-Nazi propaganda among an assortment of online leftist magazines that hardly anyone ever actually reads. The aim of these insidious Trumpenleft infiltrators is to sow confusion, chaos, and discord among actual, real, authentic leftists who are going about the serious business of calling Donald Trump a fascist on the Internet twenty-five times a day, verbally abusing Julian Assange, occasionally pulling down oppressive statues, and sharing videos of racist idiots acting like racist idiots in public.
The Trumpenleft is determined to sabotage (or momentarily disrupt) this revolutionary work, mostly by tricking these actual leftists into critically thinking about a host of issues that there is no good reason to critically think about… global capitalism, national sovereignty, immigration, identity politics, corporate censorship, and other issues that there is no conceivable reason to discuss, or debate, or even casually mention, unless you’re some kind of Russia-loving Nazi.
Angela Nagle’s recent piece in American Affairs is a perfect example. Nagle (who is certainly Trumpenleft) puts forth the fascistic proposition that mass migration won’t help the world’s poor, and she claims that it creates “a race to the bottom for workers” in wealthier, developed countries and “a brain drain” in poorer, less developed countries. After deploying a variety of Trumpenleft sophistry (i.e., fact-based analysis, logic, and so on), she goes so far as to openly suggest that “progressives should focus on addressing the systemic exploitation at the root of mass migration rather than retreating to a shallow moralism” … a shallow moralism that reifies the dominant neoliberal ideology that is causing mass migration in the first place.
This is the type of gobbledegook the Trumpenleft use to try to dupe real leftists into putting down their phones for a minute and actually thinking through political issues! Fortunately, no one is falling for it. As any bona fide leftist knows, there is no “mass migration problem.” The whole thing is simply a racist hoax concocted by Putin, Alex Jones, and other Trumpian disinformationists. The only thing real leftists need to know about immigration is that immigrants are good, and Trump, and walls, and borders are bad! All that other fancy gibberish about global capitalism, Milton Friedman, labor markets, and national sovereignty is nothing but fascist propaganda (which needs to be censored, or at least deplatformed, or demonetized, or otherwise suppressed).
But Angela Nagle is just one example. The Trumpenleft is legion, and growing. Its membership includes a handful of prominent (and rather less prominent) fake leftist figures: Glenn Greenwald, who many among the “Resistance” would like to see renditioned and indefinitely detained in some offshore Trumpenleft gulag somewhere; Matt Taibbi, who just published a treasonous article challenging the right of the US government to prosecute publishers as “enemy agents” for publishing material they don’t want published; Julian Assange, who is one such publisher, and who the US has scheduled for public crucifixion just as soon as they can get their hands on him; Aaron Maté of the Real News Network, a notorious Trump-Russia “collusion denialist“; Caitlin Johnstone, an Australian blogger and poet who the Red-Brown Putin-Nazi hunters at CounterPunch have become totally obsessed with; Diana Johnstone, who they also don’t like; and (full disclosure) your humble narrator.
Now, normally, the opinions of some political journalists and rather marginal political writers wouldn’t amount to a hill of beans in this crazy world, but there’s a war on, so there’s no room for neutrality. As I mentioned in my latest essay, over the course of the next two years, the global capitalist ruling classes need to make an example of Trump, and Assange, and anyone else who has had the gall to fuck with their global empire. Part of how they are going to do this is to further polarize the already extremely polarized ideological spectrum until everyone is forced onto one or the other side of a pro- or anti-Trump equation, or a pro- or anti-populist equation … or a pro- or anti-fascist equation.
As you probably noticed, The Guardian has just launched a special six-week “investigative series” exploring the whole “new populism” phenomenon (which began with a lot of scary photos of Steve Bannon next to the word “populism”). We are going to be hearing a lot about “populism” over the course of the next two years. We are going to be hearing how “populism” is actually not that different from fascism, or at the very least is inherently racist, and anti-Semitic, and xenophobic, and how, basically, anyone who criticizes neoliberal elites or the corporate media is Russia-loving, pro-Trump Nazi.
And this is where this “Trumpenleft” malarkey fits into the ruling classes’ broader campaign to eliminate any kind of critical thinking and force people to mindlessly root for their “team.” See, the problem with us “Trumpenleft” types is not that we support Donald Trump. For the record, none of us really do. Some of us think he us a dangerous demagogue. Others of us think he is a blithering idiot. None of us think he’s Fidel Castro, or that he cares one iota about the working classes, or about anyone other than Donald Trump.
No, the problem is not that we’re on the wrong team; the problem is that we are asking people to question the propaganda of the team that we’re supposed to be on, or at least be rooting for. We are asking people to pay attention to how the global capitalist ruling establishment is going about quashing this “populist” insurgency (of which Brexit and Trump are manifestations, not causes) so they can get back to the business of relentlessly restructuring, privatizing, and debt-enslaving everything, as they’ve been doing since the end of the Cold War.
We’re asking folks, not to join “the other team,” but to pay close attention to how they are being manipulated into believing that there are only two “teams,” and that they have to join one, and then mindlessly parrot whatever nonsense their team decides they need to disseminate in order to win a game that is merely a simulation they have conjured up (i.e., the ruling classes have conjured up) in order to inoculate themselves against an actual conflict they cannot win and so must prevent at all costs from ever beginning … which, they are doing a pretty good job of that so far.
In other words, the problem with us Trumpenlefters is, the prospect of defeating a fake Russian Hitler, and restoring neoliberal normality in the USA and the rest of the West, is just not all that terribly inspiring. So, rather than regurgitating the Russia hysteria and the fascism hysteria that is being produced by the global capitalist ruling establishment to gin up support for their counterinsurgency, we are continuing to focus on the capitalist ruling classes, which are actually still running things, globally, and will be running things long after Trump is gone (and the Imminent Threat of Global Fascist Takeover of Everything has disappeared, as the Imminent Threat of Nookular Terrorist Backpack Attack disappeared before it).
Or maybe all that is just a ruse, an attempt on my part to dupe you into going out and buying a MAGA hat and shouting racist abuse at Honduran kids, assuming you can find some in your vicinity. You never know with us Trumpenleft types. Probably the safest thing to do to protect yourself from our insidious treachery is to start your own personal Trumpenleft blacklist, and spread lies about us all over the Internet, or just report us to Twitter, or Facebook, or somebody, whoever you feel are the proper authorities. The main thing is to shut us up, or prophylactically delegitimize us, to keep us from infecting other leftists with our filthy, nonconformist ideas. The last thing we need at a time like this is a bunch of leftists thinking for themselves and questioning official leftist dogma. Who knows what that kind of behavior might lead to?
N.B. As far as I could gather from my research, the “Trumpenleft” label was coined by Paul Street, a regular columnist at Truthdig and CounterPunch and all-around professional leftist. Like the editors of The New York Times, Street understands the importance of sloppily Germanicizing terms you want to frighten people with, because there’s nothing quite as terrifying as Nazi morphology!
- Maryland's Oyster Population Collapses, Sparks "Overfished" Fears
In the 1600s, oysters in the Chesapeake Bay were so plentiful that these saltwater bivalve molluscs were filtering the bay’s waters once a week.
As the Industrial Revolution kicked off new manufacturing processes in the period from about 1760 to between 1820 and 1840, the number of Chesapeake oysters began to decline due to over-harvesting.
In the last several decades, public and private interests in reviving the bay have stabilized oyster populations, but, according to a new study, the population has collapsed.
Mike Wilberg of the University of Maryland’s Center for Environmental Science told Maryland’s Oyster Advisory Commission last week that Chesapeake Bay’s market-sized oyster population is approximately 300 million, or half the amount found in 1999.
Wilberg spent 18 months developing a new model that could accurately estimate the number of oysters in the bay. It is the region’s first modern assessment of the population.
His assessment was immediately peer reviewed due to the shocking discovery that even local government officials in Maryland and Virginia did not realize the severity of the collapse.
The peer review stated Wilberg’s model was of working order and could be used to revise Maryland’s oyster management program, and some environmental groups are already demanding changes to Maryland’s law before the collapse turns into an ecological disaster.
The Chesapeake Bay Foundation told the Capital Gazette, the report has confirmed its worst fears about the bay’s oyster population.
“The state needs to develop a fishery management plan that protects existing and restored oyster reefs to significantly increase the overall oyster population,” Bay Foundation Maryland Executive Director Alison Prost said in a statement.
During the meeting, Shellfish Division Director Christopher Judy said a report about the assessment and oyster population management strategies would be sent to the state legislature Dec. 01.
During his presentation, Wilberg sectioned off the bay into 36 areas, giving a more in-depth view of the oyster population dynamics.
Between 1999 and 2002 the oyster population plummeted more than 600 million market-sized oysters to about 200 million, according to the report. Wilberg said there had not been a significant mortality event in the population since 2005.
“Some areas have been declining, others have been increasing or at least staying more stable over time,” he said.
The report specified 19 out of 36 areas of the bay were overfished in the 2017 to 18 season. Fishing levels in many parts of the bay were not sustainable.
How does this affect you?
Well, if you are an oyster aficionado, with the likes of “Skinny Dippers,” “Chesapeake Golds,” “Choptank Sweets,” “Holy Grails,” and “Sweet Jesus,” found only in the bay – new legislation by Maryland’s government could restrict the upcoming fishing season to prevent a further collapse thus limiting consumers to some of the country’s best oysters.
- Canada's Treacherous "Faustian Bargain"
Authored by Salim Mansur via The Gatestone Institute,
The Canadian government’s recent announcement that it will be providing more than CDN $600 million (USD $455 million) over the next five years to bail out the country’s financially strapped media outlets — as part of the fall fiscal update about the federal budget ahead of the 2019 federal election — is not as innocent as it may seem.
In response to the announcement, the heads of Canada’s media organizations promptly popped open the proverbial champagne and raised their glasses to Prime Minister Justin Trudeau. Unifor, a national union that represents Canadian journalists, was even more jubilant. It felt vindicated that its slogan of “Resistance” — which it touts as Conservative Party opposition leader Andrew Scheer’s “worst nightmare” — had so swiftly resulted in opening the government’s wallet, and handing out taxpayers’ money, to an industry that should actually be fighting to remain steadfastly independent of any form of government backing.
This is what a “free press” is presumably all about, after all; not as in countries with totalitarian regimes, such as the once-Czarist Russia-turned communist Soviet Union-turned Putinist Russia, or Maoist China, or the Kingdom of Saudi Arabia, or the Islamic Republic of Iran, or Castroist Cuba and many third-world states in which the press is simply a propaganda tool of the government, subjected to the dictates and whim of its leader.
The recipients of Trudeau’s “gift” will argue that their editorial independence could not possibly be hindered — heaven forfend! — in such a liberal democracy as Canada. Their irreproachable backs will go up at the mere suggestion that their journalistic integrity might be compromised by entering into a financial deal with the powers-that-be.
No matter how much ink they spill or bytes they waste defending their virtue, however, they will not be able to fool the public about the nature of this Faustian bargain, which is tantamount to being bought by Trudeau’s Liberal Party in exchange for favorable press ahead of the next federal election.
Canadians ought to recoil from this “slippery slope” to some version of a state-controlled society that this deal has created. How ironic that the announcement of the media bailout came less than a week after the 100th anniversary of the First World War armistice and Remembrance Day, during which Canadians honored the memory of countrymen killed and maimed in wars fought for freedom against the advance of tyranny.
Perhaps this deal should not have come as a surprise, however, considering Trudeau’s stated position that Canada is a post-national state with no core identity. In other words, in Trudeau’s Canada there is no tradition to revere, no sacred values to defend and no identity to preserve.
Trudeau, it seems, adheres to the principle of globalism, according to which the world is borderless, and the idea of sovereign nation-states is both reactionary and obsolete. In this borderless world, the governing body is the unelected, untransparent, unaccountable, corrupt United Nations and its agencies, which possess the authority to legislate international law that is then enforced by member states.
Trudeau appears determined to turn Canada into a laboratory of the globalist agenda. This is probably why he is rushing to embrace the UN-proposed Global Compact for Safe, Orderly and Regular Migration, to be adopted at the Intergovernmental Conference in Marrakech, Morocco, on December 10-11, 2018. Most Canadians are unaware of the content of the Global Compact, which their government has committed to sign. Yet it is in the context of this agreement that various decisions taken by the Trudeau government can be explained — decisions on issues such as immigration, climate change, “Islamophobia” and the $600 million media bailout.
The Global Compact is a document detailing the requirements for member-states to adopt as policy that amounts to unfettered global migration. Trudeau has bought into this UN agenda and has decided to impose it on the Canadian people without their prior knowledge or consent.
Objective 17 of the Global Compact states:
“We commit to eliminate all forms of discrimination, condemn and counter expressions, acts and manifestations of racism, racial discrimination, violence, xenophobia and related intolerance against all migrants in conformity with international human rights law. We further commit to promote an open and evidence-based public discourse on migration and migrants in partnership with all parts of society, that generates a more realistic, humane and constructive perception in this regard. We also commit to protect freedom of expression in accordance with international law, recognizing that an open and free debate contributes to a comprehensive understanding of all aspects of migration.” [Emphasis added.]
In pursuance of the above, member-states are required, therefore, to:
“Promote independent, objective and quality reporting of media outlets, including internet-based information, including by sensitizing and educating media professionals on migration-related issues and terminology, investing in ethical reporting standards and advertising, and stopping allocation of public funding or material support to media outlets that systematically promote intolerance, xenophobia, racism and other forms of discrimination towards migrants in full respect for the freedom of the media.” [Emphases added.]
Translated from UN-speak, this means that media outlets of member-states are required to adhere to the objectives adopted in the Global Compact, and refrain from any critical discussions of these objectives that would be deemed as not “ethical“ and against UN norms or standards consistent with the ideology of globalism. This helps to explain the Trudeau government’s generous handout to the Canadian media. In this light, the $600 million can be viewed as a form of secretive soft control and censorship, ensuring that the Canadian press abides by the requirements of the Global Compact.
In accepting the money, the Canadian media as a whole becomes no different from the national public broadcaster CBC, all of whose news and opinion are slanted to the center-left, espousing the Liberal Party’s political, economic and cultural positions – with an occasional token and highly controlled conservative view in the mix for the purpose of maintaining the façade of free speech.
The gradual elimination of free speech is characteristic of the Trudeau government, which last year adopted parliamentary motion M-103, condemning any critical discussion of Islam and Muslims as “Islamophobia.” “Islamophobia,” in UN-speak, is bigotry and racism, and could be subject to censorship or liable to criminal prosecution under the “hate speech” provision of the human rights commissions in Canada. This is consistent with the recent ruling by the European Court of Human Rights, that criticism of the Prophet of Islam is tantamount to inciting hatred and is not, therefore, protected free speech. It is also consistent with the effort of the Organization of Islamic Cooperation -– the largest bloc of 57 member-states in the UN — to declare any criticism or insult of the founder of Islam and the religion itself as blasphemy in accordance with Islamic shariah law.
There is a pattern emerging that indicates the sort of country that Trudeau and his Liberal Party are trying to create: a borderless Canada where UN-devised international law will take precedence over legislation enacted by elected representatives of the Canadian people who go against it.
If this process is not reversed, Canadians — inundated by mass-migration — will become citizens of the world; and Canada will become a multicultural North American protectorate of an emergent 21st century, UN-administered borderless world. In such a world, there is no room for freedom of speech or a free press. The Canadian media should think long and hard before selling its soul to Trudeau.
- Former Employee Says Facebook Has A "Black People Problem"
With the world still focused on Facebook’s ineffectual response to election hacking and fake news, longstanding criticisms about the company’s lack of diversity and exclusion or undermining of people of color exploded back into public view on Tuesday when a departing senior employee published a Facebook post criticizing what he described as discriminatory practices against black people who use the platform, as well as the company’s work place culture, which he said is hostile to minorities.
Mark Luckie, a digital strategist and former journalist who has worked at the Washington Post and the Los Angeles Times, as well as Twitter and Reddit, published the note, entitled “Facebook is failing its black employees and its black users” Tuesday morning, after circulating it among the company’s employees earlier this month.
In the note, Luckie alleges that black people are routinely disenfranchised on Facebook’s platform. Minority users’ posts are often reported as offensive despite not meeting the company’s criteria, and then deleted without warning or recourse. Furthermore, the company doesn’t do a thorough enough job verifying and supporting minority influencers, and complaints lodged by minorities or minority groups are often ignored.
Luckie’s allegations about the company’s workplace culture were also shocking, but sadly unsurprising. For one, the company only employs a handful of black people. Black employees frequently complain about managers accusing them of being aggressive or hostile when they try to share their views. Managers sometimes would even go so far as to dissuade internal groups for blacks from doing “black stuff” – without specifying what exactly he meant by this. Black employees are also routinely accosted by campus security at the company’s headquarters in Menlo Park. And at least two or three times a day, white employees would clutch their wallets while passing Luckie in the halls, he said.
Given the overwhelmingly liberal leanings of the company’s employees, the hypocrisy alleged by Luckie is stark.
“In some buildings, there are more ‘Black Lives Matter’ posters than there are actual black people. Facebook can’t claim that it is connecting communities if those communities aren’t represented proportionately in its staffing.”
During an interview with USA Today, Luckie said he felt obligated to go public on behalf of those who “don’t feel empowered to speak up.”
“I wish I didn’t have to write it. I was determined to stay there and build,” Luckie told USA TODAY in an interview Tuesday. “I had to write what all the black employees are saying and feeling and we don’t feel empowered to speak up about.”
Having worked in a senior position at Facebook, Luckie said he knows that the company won’t enact meaningful change unless it’s held publicly accountable.
Keeping with Facebook’s reputation for never admitting fault or accepting responsibility, a company spokesman insisted to USA Today that it has “people from diverse groups” working in “many different functions” across the company.
“The growth in representation of people from more diverse groups, working in many different functions across the company, is a key driver of our ability to succeed,” Harrison said.
So first Facebook pissed off Jews by hiring a lobbying firm to smear George Soros, now the company has managed to offend African Americans. The company has also been accused of favoring white male program. And let’s not forget about pervasive accusations of Silicon Valley sexism that have touched every major firm, including Facebook.
We look forward to seeing what minority group or protected class Zuckerberg & Co. offend next.
- The Coming Bankruptcy Of The American Empire
Authored by Hunter Derensis via The American Conservative,
Better to bring the troops home on our terms than wait for a debt crisis to do it for us…
The chickens are coming home to roost. It’s only a question of when.
Herbert Stein was chair of the Council of Economic Advisors under Presidents Richard Nixon and Gerald Ford and is the father of the more well known Ben Stein. In 1976, he propounded what he called “Stein’s Law”: if something cannot go on forever, it will stop. Stein was referring to economic trends, but the same law applies just as much to foreign policy and the concept of empire.
Stein’s Law at first glance might seem like a banal platitude. But we should be fully cognizant of its implications: an unsustainable system must have an end. The American empire is internally flawed, a fact that anti-imperialists both left and right should appreciate.
The United States’ national debt is approaching $22 trillion with a current federal budget deficit of over $800 billion. As Senator Rand Paul often points out, bankruptcy is the Sword of Damocles hanging perilously close to Uncle Sam’s neck. Outside of a handful of libertarian gadflies in Congress such as Paul, there is no serious political movement to curb the country’s wayward spending. It would take some upset of multiple times greater magnitude than Donald Trump’s 2016 victory to alter this course.
The United States holds the most debt of any country in the history of the world. In fairness, when our debt-to-GDP ratio is factored in, there are many countries in far more perilous economic situations than the U.S. But there will come a tipping point. How much debt can the system hold? When will the cracks grow too big to hide? When will the foundation crumble? There’s a great deal of ruin in a nation, said Adam Smith, and our ruin must ultimately come.
Is bankruptcy possible? As some Beltway economists remind us, no. Technically the government has the power to artificially create as many dollars as it needs to pay its debts. But this kind of hyper-inflation would deprive the U.S. dollar of any value and tank the global economy that trades with it. Simple failure to pay back our debt might even be a better scenario that such an inflationary hellscape.
When the world loses confidence in the American government’s ability to pay its debt, or the interest rate on our debt becomes unsustainably high, choices will have to be made. No more kicking the can down the road, no more 10-year projections to balance the budget. Congress, in a state of emergency, will have to take a buzzsaw to appropriations. And the empire will be the first thing to go.
Just like its warfare state, the government’s welfare state has plenty of internal calamities. But while it might be the preference of some megalomaniacal globalists to let the proles starve while preserving overseas holdings, it’s not going to happen. What would transpire if Social Security checks stopped showing up in mailboxes and Medicare benefits got cut off? When presented with that choice, will the average American choose his social safety net or continued funding for far-flung bases in Stuttgart, Okinawa, and Djibouti? Even the most militaristic congressperson will know which way to vote, lest they find a mob waiting outside their D.C. castles
Neoconservatives constantly harp on the danger of vacuums. Without a U.S. presence, the logic goes, more sinister forces will take over. What happens when American troops must be evacuated from all over the world because we can’t afford to keep them there anymore? There’s no debate, no weighing of options, and no choice. If the money isn’t there, the money isn’t there. Nothing could tie the hands of America’s military more than a debt crisis. And if one happens, it will be in part because those same neoconservative intellectuals preached a multi-trillion-dollar global war to remake humanity in our image. Hubris leads to downfall.
This is the kind of danger that Rand Paul and others warn about. Not only are our undeclared wars illegal, counterintuitive, and destabilizing to foreign regions, they’re financially destabilizing for us as well.
A radical reexamination of America’s overseas assets and obligations must take place. Ideologically motivated wars have led us to the precipice of financial disaster. American foreign policy must adopt a limited, highly strategic view of its national interest and use its remaining wealth sparingly and only when necessary. Realism can stave off national ruin. Close bases in Germany and bring the money home, instead of forcing the troops to evacuate in the dead of night after it’s too late. Enter negotiations with the Taliban and have a planned withdrawal from Afghanistan, lest it end with helicopters fleeing Kabul like they did Saigon. Make the hard choices before circumstances make them for you.
Our leaders ignore Stein’s Law at their own peril. No matter what, U.S. troops are coming home. Better it be our decision than the debt collectors’.
- Trump Advisors "Not Happy" With President's Aggressive Trade Threats: Politico
Since the US-China trade war broke out this spring, Larry Kudlow and Steven Mnuchin have repeatedly tried to arrange senior-level trade talks with their Chinese counterparts, only to be frustrated or sabotaged by President Trump.
So when the two officials tasked with managing the detente read the transcript of a WSJ interview with Trump where their boss once again resorted to making provocative threats just four days before the beginning of the G-20 summit, where Trump is expected to meet with Chinese President Xi Jingping, we could imagine them being (understandably) miffed.
With equity futures on track to open lower as investors worry that Trump’s bellicose trade talk might anger Xi, several senior Trump administration officials reportedly told Politico that they’re “not happy with the nature of Trump’s comments.” Speaking “anonymously,” the officials – we have a few guesses as to their identities – told Politico that they are worried Trump’s comments might make reaching a deal with Xi – or at least a “pathway” to future talks – difficult, if not impossible.
MM hears that some of Trump’s top advisers were not at all happy with the bellicose nature of the president’s comments to the Wall Street Journal on China tariffs, fearing they could make the high-stakes meetings with Xi even more difficult.
During the interview, Trump said he had no plans to cancel the next stage of tariffs on Chinese imports (tariffs on roughly $200 billion of Chinese goods are set to rise to 25% from 10% early next year), and added that he wouldn’t hesitate to slap tariffs on the other $267 billion in imports that haven’t already been targeted. Even Apple products and other consumer electronics would not be spared, Trump said. If Apple wants to avoid the tariffs, it can build factories in the US. Since May, the US has slapped tariffs on some $250 billion on Chinese goods, while China has retaliated with tariffs on $60 billion of American products, including foodstuffs like soybeans, which have hammered US farmers.
But whoever went squawking to Politico has apparently forgotten that this isn’t the first time Trump has made a threat like this. Hard-line rhetoric has become a staple of Trump’s negotiating strategy, as one Credit Suisse analyst told Bloomberg.
“This is largely a negotiation tactic,” said Tao Dong, vice chairman for Greater China at Credit Suisse Private Banking in Hong Kong. “Putting high stakes pressure on to the other side seems to be a consistent pattern from the Trump administration.”
China almost certainly recognizes this. And given their willingness to engage in the talks to begin this, it’s likely that they’ve already accepted that Trump will from time to time make these types of public threats. And as China has repeatedly rebuffed US demands to agree to a deal ‘framework’ that would involve China lowering subsidies for tech firms and end its IP theft, in addition to lowering its trade surplus with the US, Xi will likely arrive at the meeting with his own hard-line stance.
As investors have probably ascertained from the first five months of the trade war, the “talks” between the US and China will probably come down to who blink first.
- Manafort's Lawyer Repeatedly Briefed Trump Attorneys On What He Told Mueller
One day after Special Counsel Robert Mueller said that Paul Manafort had lied and violated his plea agreement with Federal prosecutors, and as a result should be sentenced immediately, the NYT has reported that in a “highly unusual” arrangement, a lawyer for Paul Manafort had repeatedly briefed president Trump’s lawyer on what he told Mueller and other federal investigators after he agreed to cooperate with the special counsel.
While the arrangement is not illegal, it reportedly inflamed tensions with the special counsel’s office when prosecutors discovered it after Mr. Manafort began “cooperating” two months ago, with some legal experts speculating that Manafort’s backdoor cooperation with Trump’s legal team was a bid by Trump’s former campaign chair for a presidential pardon even as he worked with Mueller in hopes of a lighter sentence.
Trump lawyer Rudy Giuliani acknowledged the arrangement to the NYT, and “defended it as a source of valuable insights into the special counsel’s inquiry and where it was headed.”
Such information could help shape a legal defense strategy, and it also appeared to give Mr. Trump and his legal advisers ammunition in their public relations campaign against Mr. Mueller’s office.
As an example of of what Manafort told the Trump legal team, Giuliani said, Manafort’s lawyer Kevin Downing told him that prosecutors hammered away at whether the president knew about the June 2016 Trump Tower meeting where Russians promised to deliver damaging information on Hillary Clinton to his eldest son, Donald Trump Jr, although this line of investigation is hardly a surprise. Trump has long denied knowing about the meeting in advance, with Giuliani saying that Mueller “wants Manafort to incriminate Trump.”
What is notable is that this kind of joint defense agreement is legal, and while Downing’s discussions with the president’s team violated no laws, they helped contribute to a deteriorating relationship between lawyers for Manafort and Mueller’s prosecutors, who on Monday accused Manafort of holding out on them and even lying, despite his pledge to assist them in any matter they deemed relevant. As a result of the collapse of the plea deal, Manafort will now face sentencing on two conspiracy charges and eight counts of financial fraud — crimes that could put him behind bars for at least 10 years.
Just as importantly, Manafort’s frequent updates helped reassure Trump’s legal team that Manafort had not implicated the president in any possible wrongdoing, which begs the question just how was Manafort “cooperating” with Mueller for two whole months.
Meanwhile, according to the NYT, Giuliani seized on Downing’s information to unleash lines of attack onto the special counsel.
In asserting that investigators were unnecessarily targeting Trump, Giuliani accused the prosecutor overseeing the Manafort investigation, Andrew Weissmann, of keeping Manafort in solitary confinement simply in the hopes of forcing him to give false testimony about the president.
Meanwhile, in his own repeated Twitter attacks on the special counsel, the president suggested that he himself had inside information about the prosecutors’ lines of inquiry and frustrations. “Wait until it comes out how horribly & viciously they are treating people, ruining lives for them refusing to lie,” Trump wrote on Tuesday, and earlier this month tweeted: “The inner workings of the Mueller investigation are a total mess. They have found no collusion and have gone absolutely nuts. They are screaming and shouting at people, horribly threatening them to come up with the answers they want.”
As noted above, the basis for Manafort’s legal team keeping Trump’s lawyers abreast of developments in his case is thanks to a joint defense agreement. According to the Times, Trump’s team has pursued such pacts as a way to monitor the special counsel’s inquiry. Last month, Giuliani said that the president’s lawyers had agreements with lawyers for 32 witnesses or subjects of Mueller’s 18-month-old investigation, effectively receiving up to date information on virtually every aspect of the Mueller probe.
While joint defense agreements are frequently used by lawyers involved in investigations with multiple witnesses so they can share information without running afoul of attorney-client privilege rules, usually when one defendant decides to cooperate with the government in a plea deal, that defense lawyer typically pulls out rather than antagonize the prosecutors who can influence the client’s sentence. One such example is when a lawyer for Michael T. Flynn withdrew last year from such an agreement with Trump’s lawyers before pleading guilty to a felony offense and agreeing to help the special counsel.
On the other hand, even after Manafort pleaded guilty to two conspiracy counts in September and began answering questions in at least a dozen sessions with the special counsel, Manafort’s lawyers maintained their joint defense agreement with the president’s legal team.
Why would Manafort seek the continuation of such an agreement, even if it meant risking his plea deal? Simple: he wants Trump to pardon him.
Manafort must have wanted to keep a line open to the president in hope of a pardon, said Barbara McQuade, a formder United States attorney who now teaches law at University of Michigan. “I’m not able to think of another reason,” she said.
If Mr. Manafort wanted to stay on the prosecutors’ good side, “it would make no sense for him to continue to share information with other subjects of the investigation,” said Chuck Rosenberg, a former United States attorney and senior F.B.I. official. He added: “He is either all in or all out with respect to cooperation. Typically, there is no middle ground.”
Whether Manafort gets a pardon, remains to be seen. Last year, a former Trump lawyer allegedly broached the idea of presidential pardons to lawyers for both Manafort and Flynn as prosecutors were building cases against both men, according to people familiar with the conversations. The lawyer, John Dowd, who later resigned from the president’s team, denied ever raising the prospect of a pardon.
However, to keep Manafort’s hopes alive, after Dowd’s departure Giuliani himself suggested that Manafort and others might be eligible for pardons after Mueller’s inquiry ends, and the prospect has continued to hover over Manafort’s case. On Tuesday, Sarah Huckabee Sanders, the White House press secretary, said she had no knowledge of any conversations about a pardon for Mr. Manafort. A week ago, after months of negotiations, Trump provided written answers to some questions from Mueller.
That said, even if Manafort lucks out and gets out of prison early, he will be a poor man. The reason is that prosecutors deliberately fashioned Manafort’s plea agreement to counter a possible pardon. As the NYT reports, in forcing Manafort to forfeit almost all of his wealth — including five homes, various bank accounts and an insurance policy — prosecutors specified that they could seize his assets under civil procedures “without regard to the status of his criminal conviction.”
According to UCSD law professor Harry Litman, similar provisions had been used in other such cases, but other legal experts said it seemed tailor-made to ensure Manafort would lose virtually all of his wealth, no matter what Mr. Trump did.
And while Trump will likely end up pardoning Manafort before the president leaves office, whether Trump will also personally fund his former campaign chair’s retirement account is an entirely different matter.
- How Much Does OPEC Need To Cut To Balance The Market?
Authored by Irina Slav via Oilprice.com,
OPEC will probably agree to cut production to the tune of between 1 and 1.5 million bpd, analyst Johannes Benigni from Austrian JBC Energy Group told CNBC, adding there was clearly a glut on global oil markets at the moment and such a cut would likely help the market to return to balance.
“OPEC will probably manage to stabilize the oil market by choosing the right language,” Benigni said.
“They will indicate a cut of between 1 million and 1.5 million, and that will do, the market probably will stabilize.”
It’s somewhat surprising how fast the market swung into excess after in June, OPEC and Russia agreed to stop cutting production and to begin to ramp up as prices climbed to uncomfortably high levels for some major importers. This month all three biggest producers globally hit new records, with Saudi Arabia’s daily production rate exceeding 11 million bpd for the first time ever.
The latest production data from the Kingdom, Russia, and the United States has pressured prices in addition to gloomy demand outlooks, and the talk about production cuts started by Saudi Arabia has not been able to apply sufficient counter pressure.
Yet if these talks end with a decision to start cutting, price movement could be reversed. What’s more, the glut is not across all grades, according to JBC Energy Group’s chairman said.
“What really are in oversupply are the light crude barrels which are coming out of the U.S.,” he said.
“So the expectation or the hope for OPEC right now would be that prices go lower, and demand may come back.”
But others are skeptical that this will be so easy to do.
In a note to clients, Jefferies said today “The oil price correction has become a rout of historic proportions,” as quoted by Reuters.
“The negative price reaction is as severe as the 2008 financial crisis and the aftermath of the November 2015 OPEC meeting, when the group decided not to act in the face of a very over-supplied market,” the investment bank said.
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