- Vote As If Your Life Depended On It… Because It Does
Authored by Eric Zuesse,
Here’s why:
Hillary has repeatedly said: “We should also work with the coalition and the neighbors to impose no-fly zones that will stop Assad from slaughtering civilians and the opposition from the air. Opposition forces on the ground, with material support from the coalition, could then help create safe areas where Syrians could remain in the country, rather than fleeing toward Europe."
This would mean that U.S. fighter-jets and missiles would be shooting down the fighter-jets and missiles of the Syrian government over Syria, and would also be shooting down those of Russia. The Syrian government invited Russia in, as its protector; the U.S. is no protector but an invader against Syria’s legitimate government, the Ba’athist government, led by Bashar al-Assad. The CIA has been trying ever since 1949 to overthrow Syria’s Ba’athist government — the only remaining non-sectarian government in the Middle East other than the current Egyptian government. The U.S. supports Jihadists who demand Sharia law, and they are trying to overthrow and replace Syria’s institutionally secular government. For the U.S. to impose a no-fly zone anywhere in Syria would mean that the U.S. would be at war against Russia over Syria’s skies.
Whichever side loses that conventional air-war would then have to choose whether to surrender, or instead to use nuclear weapons against the other side’s homeland, in order for it to avoid surrendering. That’s nuclear war between Russia and the United States.
Would Putin surrender? Would Hillary? Would neither? If neither does, then nuclear war will be the result.
Here are the two most extensive occasions in which Hillary has stated her position on this:
To the Council on Foreign Relations, on 19 November 2015:
We should also work with the coalition and the neighbors to impose no-fly zones that will stop Assad from slaughtering civilians and the opposition from the air. Opposition forces on the ground, with material support from the coalition, could then help create safe areas where Syrians could remain in the country, rather than fleeing toward Europe.
This combined approach would help enable the opposition to retake the remaining stretch of the Turkish border from ISIS, choking off its supply lines. It would also give us new leverage in the diplomatic process that Secretary Kerry is pursuing. …
QUESTION: When you were secretary of state, you tended to agree a great deal with the then-Secretary of Defense Bob Gates. Gates was opposed to a no-fly zone in Syria; thought it was an act of war that was risky and dangerous. This seems to me the major difference right now between what the president — what Obama’s administration is doing and what you’re proposing.
Do you not — why do you disagree with Bob Gates on this?
CLINTON: Well, I — I believe that the no-fly zone is merited and can be implemented, again, in a coalition, not an American-only no-fly zone. I fully respect Bob and his knowledge about the difficulties of implementing a no-fly zone. But if you look at where we are right now, we have to try to clear the air of the bombing attacks that are still being carried out to a limited extent by the Syrian military, now supplemented by the Russian air force.
And I think we have a chance to do that now. We have a no-fly zone over northern Iraq for years to protect the Kurds. And it proved to be successful, not easy — it never is — but I think now is the time for us to revisit those plans.
I also believe, as I said in the speech, that if we begin the conversation about a no-fly zone, something that, you know, Turkey discussed with me back when I was secretary of state in 2012, it will confront a lot of our partners in the region and beyond about what they’re going to do. And it can give us leverage in the discussions that Secretary Kerry is carrying on right now.
So I see it as both a strategic opportunity on the ground, and an opportunity for leverage in the peace negotiations. …
QUESTION: Jim Ziren (ph), Madam Secretary. Hi. Back to the no- fly zone. are you advocating a no-fly zone over the entire country or a partial no-fly zone over an enclave where refugees might find a safe haven? And in the event of either, do you foresee see you might be potentially provoking the Russians?
CLINTON: I am advocating the second, a no-fly zone principally over northern Syria close to the Turkish (ph) border, cutting off the supply lines, trying to provide some safe refuges for refugees so they don’t have to leave Syria, creating a safe space away from the barrel bombs and the other bombardments by the Syrians. And I would certainly expect to and hope to work with the Russians to be able to do that. [She expects Putin to join America’s bombing of Syria’s government and troops and shooting-down of Russia’s planes in Syria, but no question was raised about this.] …
To have a swath of territory that could be a safe zone … for Syrians so they wouldn’t have to leave but also for humanitarian relief, … would give us this extra leverage that I’m looking for in the diplomatic pursuits with Russia with respect to the political outcome in Syria.
During a debate against Bernie Sanders in the Democratic primaries:
Hillary Clinton, in a debate with Bernie on 19 December 2015, argued for her proposal that the U.S. impose in Syria a “no-fly zone” where Russians were dropping bombs on the imported jihadists who have been trying to overthrow and replace Assad: "I am advocating the no-fly zone both because I think it would help us on the ground to protect Syrians; I'm also advocating it because I think it gives us some leverage in our conversations with Russia.” She said there that allowing the jihadists to overthrow Assad “would help us on the ground to protect Syrians,” somehow; and, also, that, somehow, shooting down Russia’s planes in Syria (the “no-fly zone”) "gives us some leverage in our conversations with Russia.”
Bernie Sanders’s response to that was: "I worry too much that Secretary Clinton is too much into regime change and a little bit too aggressive without knowing what the unintended consequences might be.” He didn’t mention nuclear war as one of them.
The “no-fly zone” policy is one of three policies she supports that would likely produce nuclear war; she supports all of them, not merely the “no-fly zone.”
Hillary Clinton has never been asked “What would you do if Russia refuses to stop its flights in Syria?” Donald Trump has said nothing about the proposal for a no-fly zone (other than “I want to sit back and see what happens”), because most Americans support that idea, and he’s not bright enough to take her on about it and ask her that question. Probably, if he were supportive of it, he’d have said so — in which case it wouldn’t still be an issue in this election. Trump muffed his chance — which he has had on several occasions. But clearly he, unlike her, has not committed himself on this matter.
Hillary Clinton is obviously convinced that the U.S. would win a nuclear war against Russia. The question for voters is whether they’re willing to bet their lives that she is correct about that, and that even if the U.S. ‘wins’, only Russia and not also the U.S. (and the world) would be destroyed if the U.S. nuclear-attacks Russia.
Every other issue in this election pales by comparison to the no-fly-zone issue, which is virtually ignored, in favor of issues that are trivial by comparison. But a vote for Hillary Clinton is a vote for nuclear war against Russia, regardless of whether or not the voters know this. And a vote for Trump is a vote for the unknown. Could the unknown be even worse than Hillary Clinton? If so, would it be so only in relatively trivial ways?
This election should be about Hillary Clinton, not about Donald Trump.
* * *
Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.
- Your Complete Guide To Election Night: What To Watch For And When
It’s almost over: the most divisive, theatrical, dramatic and dirty presidential campaign will be in the history books by this time tomorrow, with more than 130 million Americans expected to cast ballots across 50 states. However, just winning the popular vote will be insufficient: indeed, it may well be that the popular-vote winner does not win the electoral college.
So which states should one be looking at, and how long is the final day’s drama set to continue?
For the benefit of the traders out there, last week we showed a primer from Citigroup explaining when traders can hope to go home on election evening, according to which it was “all about Florida, North Carolina and Ohio.”
As Citi said, for traders hoping to capitalize on volatility next Tuesday as the election results come trickling in, it may all be over by early evening, at least if Trump loses. That is the calculation of Citi’s Steven Englander, who determined that if Trump loses either Florida or North Carolina or Ohio “the math doesn’t work and it tells us that the shift to Trump was not as pronounced as feared.”
Those states close at 7:00 or 7:30 ET. As Citi adds, even if Trump loses by a little in one of these states, it becomes almost impossible for him to win. It would take a tidal wave in a couple of states that look firmly Democrat. Citi helpfully added that “the odds that he loses, say a Florida or North Carolina, but wins a Pennsylvania do not seem high” at which point “vol collapses, MXN rallies and we go home early.”
However, in a hint that tomorrow may be a very long night for traders – recall that Brexit was an all-nighter, which briefly saw ES halted limit down – the just released “no toss up” map from RCP based on the latest polling, shows Trump winning all three of these key states, and suddenly opening up the prospect not only for much more volatility, and yet another all-nighter, but potentially a Trump victory, something the market after today’s furious rally, is certainly not prepared for.
In any event, no matter the fate of these three states, here is a full preview of tomorrow’s election night.
The following chart from Morgan Stanley summarizes what times polls close for any given state as well as the number of electoral votes afforded to each: .
As the FT observes, this year’s election is being fought hardest in 10 states: Arizona (11 electoral college votes), Colorado (9), Florida (29), Iowa (6), Nevada (6), New Hampshire (4), North Carolina (15), Ohio (18), Pennsylvania (20) and Virginia (13). Clinton starts with an advantage in the electoral college and can afford to lose traditional battlegrounds such as Florida and Ohio. But if that happens, falling short in states such as Pennsylvania and North Carolina could prove fatal to her presidential ambitions. On the other hand, as noted above, if Trump does not win in Florida and Ohio, his chances of victory will be non-existent. One key could be the size of the turnout of Latino voters in Arizona, Florida and Nevada, which have large Hispanic populations. Another could be whether African-American voters go to the polls at a high rate in North Carolina and Ohio.
Here are the key events by hour, and when traders will have to be particularly careful
- 6pm EST — The first polls close in Indiana (11), home to Trump running mate Mike Pence, the state’s governor, and Kentucky (8). Both states are heavily Republican and likely to be carried by Mr Trump
- 7pm EST — Polls close in the battleground states of Florida (29) and Virginia (13). As well as Georgia (16), South Carolina (9) and Vermont (3). The counting of ballots across the nation will go on well into Wednesday. You can, however, expect US media outlets to begin calling the races in safe Democratic and Republican states such as Kentucky, Vermont and South Carolina. But do not expect early calls in Florida or Virginia. In 2012, a winner was not declared in Florida until days after the election. A result in Virginia was not declared until after midnight.
- 7:30pm EST — Polls close in two more important states: Ohio (18) and North Carolina (15). They also shut in West Virginia (5), where Trump is heavily favoured. Trump has done a lot of campaigning in Ohio, hoping to capitalise on the appeal of his protectionist trade policies in the rust belt state. In 2012, Mitt Romney had been declared the winner in four of the five states called before 8pm. President Barack Obama had won only Vermont.
- 8pm EST — Things start to heat up. Polls close in the crucial states of Pennsylvania (20) and Michigan (16), and in Alabama (9), Connecticut (7), Delaware (3), the District of Columbia (3), Illinois (20), Kansas (6), Maine (4), Maryland (10), Massachusetts (11), Mississippi (6), Missouri (10), New Jersey (14), Oklahoma (7), Rhode Island (4) and Tennessee (11). Expect a flurry of declarations in safe Republican and Democratic states. If Mrs Clinton does not take Pennsylvania it will be a big blow — especially because she chose to spend the last night of her campaign in Philadelphia alongside her husband and the Obamas. In 2012 it took almost two hours for Obama to be named the winner in the state. It was the first real battleground to be called. Maine is the first of two states that do not allocate their electoral college votes on a winner-takes-all system. Maine and Nebraska allocate some of their electoral votes by congressional district.
- 9pm EST — The polls close in Colorado (9), Wisconsin (10) and Texas (38). They also shut in Louisiana (8), Minnesota (10), Nebraska (5), New Mexico (5), New York (29), South Dakota (3) and Wyoming (10). Look for early calls for Clinton in the population-heavy states of New York and New Jersey where she is firmly favoured.
- 10pm EST — Polls are closing in western states Arizona (11), Idaho (4), Montana (3), Nevada (6) and Utah (6) as well as the mid-western farm state of Iowa (6). In 2012, this is when Mr Obama began really piling up the victories. Although it has a long tradition of voting Republican in presidential races, Arizona has been seen as more of a battleground this year. Utah is also interesting this year as conservative Mormon Evan McMullin has been polling well in the state and could even win it.
- 11pm EST — The polls close in the biggest electoral prize on the map — solidly Democratic California (55) — as well as Washington state (12), Oregon (7) and North Dakota (3).
- Midnight EST — Polls close in Alaska (3) and Hawaii (4).
* * *
Time for the concession speeches?
In 2008 and 2012, John McCain and Mitt Romney each gave nationally televised concession speeches shortly after midnight eastern time.
But what if there is no winner by the end of the night? In the event that neither candidate gets to 270, the Republican-controlled House of Representatives will decide who the next president should be.
* * *
What are the main factors to watch?
With polls showing voters having negative opinions of both major candidates, one of the key factors on election day could be the enthusiasm of their bases. If black, female, Latino and young voters do not turn out in significant numbers, it could represent a blow to the Clinton camp. Likewise, if white working class voters do not go to the polls in significant numbers it would hurt Mr Trump.
Turnout among African-American voters looks likely to be lower than it was in 2008 and 2012. But Trump’s provocative immigration policies mean a growing Hispanic electorate is expected to vote heavily against him.
What other races should I keep an eye on?
Americans will also be voting for 34 of the US Senate’s 100 seats and for all 435 seats in the House of Representatives. Twelve governorships are up for grabs this year. The big question beyond the presidency is what will happen in the Republican-controlled Congress. A good night for Democrats would see them win five seats and regain control of the Senate (four if Mrs Clinton wins as that would mean vice-president Tim Kaine would cast the deciding vote) while also whittling down the Republicans’ 30-seat majority in the 435-seat House. It is extremely unlikely Democrats will regain control of the House.
* * *
Finally, here is Goldman’s own guide to election night:
- Poll closing times and the estimated time each state will be called: we note the time that polls close in each state. For states in multiple time zones, we include the latest poll closing time. We also include a rough estimate of when media outlets will announce a winner of the presidential race in each state, based on the polling margin (close votes take much longer to call).
- Prediction market probabilities: we note the implied probability of a Democratic win in each state for the presidential and Senate contests. Probabilities are taken from Predictit.org as of 2pm ET on Nov. 7.
- Trading Tomorrow's Main Event: "Keep It Simple" And Watch This Indicator
"Close your books. Take out a piece of paper. It’s time for a pop quiz," says Bloomberg's Richard Breslow. "What were the market-moving news items from last week?"
Amazing that it takes some work to remember that there were four big central bank meetings, a raft of PMIs, let alone a U.S. non-farm payroll report. When we look back, probably the only thing we’ll remember was the Article 50 decision in the U.K. And maybe one tracker poll for the bonus question.
I’ll bet this week will be easier for market historians to pinpoint on the economic time line. It’s rarely the regularly scheduled events that lastingly move the needle. No matter how much we build up the expectation.And then we can begin the latest test of all the “what to expect next year” theories. Word of caution, the shelf-life of these fun but mostly futile exercises gets shorter every year. And the cost of being wrong bigger. No death by a thousand cuts here. Let’s blow them out in January and get on with the thrust and parry of trading revolving themes.
One interesting event from last week, is that we saw futures pricing of a December rate-hike creep up; at the same time it was wilting for the year ahead.
Rising risk premium? Safe bet. Clever Fed messaging on low and slow? Well, we’ve had a one-two on the “running hot” question from Yellen and Fischer. Actually, a lot more hedging going on than we credited.
Rate expectations for next year are a big deal and not just for STIRT traders. The dollar will care and, by extension, commodities (read oil). The yield curve will bend to it.
Coming out of tomorrow, watch where 2017 futures reprice. It will help decide how aggressively you might consider chasing or fading the initial reactions.
If you’re going to trade the event. Keep it as simple as possible. We saw, from last week through this morning, how traders will likely react depending on the outcome. Down the road will be a chance to re-evaluate the prospects for global trade, geopolitics and latest forecast meme driving markets over the course of the year.
- NATO Places 300,000 Troops On "High Alert" In Readiness For Confrontation With Russia
Submitted by Alex Christoforou of The Duran
NATO a preparing a military force of up to 300,000 personnel, capable of being deployed within just two months to attack Russia.
As the world remains fixated on the outcome of Tuesday’s US elections, NATO continues its aggressive troop build up around Russia.
With each passing day, the constant NATO activity is looking more and more like a preparation for full scale conflict with Russia. Something that would become a very real possibility should Hillary Clinton make it to the White House.
Nato soldiers stand on a pontoon bridge constructed across the Vistula river
in Poland during the NATO Anaconda-16 exercise earlier this yearSecretary General of NATO, Jens Stoltenberg announced that NATO member nations are at this very moment putting hundreds of thousands of troops in a state of high alert, in an effort to deter the fantasy threat from Russia. Stoltenberg said…
“We have seen Russia being much more active in many different ways.”
“We have seen a more assertive Russia implementing a substantial military build-up over many years; tripling defence spending since 2000 in real terms; developing new military capabilities; exercising their forces and using military force against neighbours.”
“We have also seen Russia using propaganda in Europe among NATO allies and that is exactly the reason why NATO is responding. We are responding with the biggest reinforcement of our collective defence since the end of the Cold War.”
Adam Thomson, the outgoing permanent representative to Nato, estimates that at present, it would take the military alliance 180 days to deploy a force of 300,000, and that speeding up this rate is of top importance.
The measures come in response to Russia flexing its military might abroad, allegedly conducting cyber attacks on Washington and holding nuclear war drills at home.
Last week, Moscow was seen as deliberately antagonising Nato by sending hundreds of paratroopers to a Serbian airbase despite Nato holding disaster relief exercises just 150 miles away in Montenegro.
Putin’s decision to hold military drills so close to Nato’s emergency exercises in Montenegro – which went ahead despite Moscow’s drills – was seen as a brazen stand-off between both sides.
Igor Sutyagin, an expert at the Royal United Services Institute for Defence and Security Studies, said: “Russia wants to show that it can intimidate NATO… and NATO is saying to Russia, ‘If you show up, we’ll be there as well’.”
Meanwhile, Russian authorities have been accused of attempting to pervert the democratic process of the US presidential election by hacking into Democrat emails and sharing findings with vigilante publishers such as WikiLeaks and DC Leaks.
In summary, NATO justifies its military build up around Russia as a response to:
- Alleged Russian cyber attacks to influence the US elections…allegations made by the honest and trustworthy Clinton campaign, and half heartedly commented on by US Intelligence Czar James Clapper, a man who lied under oath to the American public.
- Russia’s military exercises in its own country. I repeat, military exercises within its own borders.
- Russia sending hundreds of paratroopers to long time ally Serbia.
- “Russia using propaganda in Europe among NATO allies”. Whatever that means? Its cryptic and nonsensical…and of course we know the US and NATO allies never ever engage in propaganda against Russia, or other nations for that matter.
- China Trade Data Disappoints (Again) Despite Plunging Yuan
Chinese imports have now declined for 23 of the last 24 months (falling 1.4% YoY in USD terms) and for 18 of the last 20 months, despite a devaluing yuan, exports have declined YoY (-7.3% YoY in October). In both USD and Yuan terms, trade data disappointed across the board suggesting a global economy that is far from as exuberant as recent PMIs suggest.
As Bloomberg notes, a depreciation of about 9 percent in the yuan since August 2015 has cushioned the blow from tepid global demand, but failed to provide any sustained boost to shipments. Rising input costs and surging wages bills have flattened profit margins for exporters to the point where many can no longer discount and are mulling price increases, according to interviews at the Canton Fair last month.
“We expect export growth to remain sluggish over the coming quarters due to a weak global economic environment and rising costs for Chinese goods,” BMI Research wrote in a report ahead of the data release. “The slow growth in the global economy will continue to be the major factor weighing on China’s export sector over the coming quarters.”
But what may be most concerning, especially to oil bulls, is that it appears China’s oil SPR is getting full as China – the world’s second largest oil consumer – imported only 28.79m tons of crude last month, the lowest since January, according to the General Administration of Customs, equivalent to 6.81mmbpd. The October drop was 12.9% m/m, a huge drop and a big concern for OPEC which is suddenly seeing demand melt before its eyes.
Some other statistics:
- Oil product imports at 1.76m tons; exports at 4.07m tons
- Coal imports at 21.58m tons, lowest since July
- Natural gas imports at at 3.82m tons
In short, China’s trade – aside from the recent burst in coal imports – is once again slowing down rapidly, and what makes it worse is that this is taking place shortly after another massive credit impulse and near-record fiscal stimulus was created to stimulate the economy.
If China’s domestic economic weakness once again spills over to the rest of the world as it did in 2015, then good bye Fedrate hike plans.
- Judge Napolitano: "Comey Knows His FBI Days Are Numbered" No Matter Who Wins Election
Submitted by Josephn Jankowski via PlanetFreeWill.com,
Former New Jersey Superior Court Judge and Senior Judicial Analyst for Fox News Andrew Napolitano believes that the way in which FBI Director James Comey handled the re-opening and closure of the investigation into the emails of former Secretary of State Hillary Clinton will tarnish the reputation of the FBI and limit the time the current director has in his position no matter who is elected on Nov. 8.
On Sunday, FBI director Comey sent a letter sent to House and Senate committee leaders stating that agents had completed their review of all messages to or from Clinton on a laptop seized last month from former Rep. Anthony Wiener and that nothing worthy of prosecution was found.
“There’s nothing wrong with the FBI investigating (Hillary), absolutely should investigate her where ever the investigation takes her,” Judge Napolitano explained to Fox News’ Bill Hemmer on Monday. “But to have given a snapshot of that investigation ten days ago, and then another snapshot of it’s closure last night, all of this within two weeks of the election, puts a thumb on the political scale that will tarnish the FBI’s reputation and in my opinion, most respectfully, prevents Jim Comey from staying on as FBI director no matter which of the two candidates are elected tomorrow.”
When asked to clarify if he believes that Comey’s days are numbered as FBI Director, the Judge respond, “Yes, and I’m saying he knows his days are numbered and he is now just doing the best he can to burnish the reputation of the FBI, which I believe he loves, and to burnish his own personal reputation.”
It came as a shock to many that the FBI was able to review the 650,000 emails from the laptop of disgraced Anthony Wiener, the estranged husband of longtime Clinton aide Huma Abedin, in just a matter of days. Many believe that the investigation may have been extremely partial considering it took the FBI over a year to review some 50,000 Clinton emails during the initial investigation.
“You can’t review 650,000 emails in eight days,” Donald Trump said Sunday in a campaign speech in Michigan hours after Comey’s letter to congress made headlines.
Judge Napolitano was able to give some insight into how the FBI went through the 650,000 emails.
“They devised software that would allow 650,000 emails to be examined digitally for certain keywords, phrases and references, which would draw out the ones they needed to read fully,” the Judge said. “They did that 24/7 for eight days and concluded yesterday afternoon – they started this Sunday afternoon a week ago yesterday when the search warrant was signed – that there is nothing in here that makes the case against her stronger.”
Napolitano predicts that if Trump manages to take the White House the DOJ will continue to pursue an investigation into Clinton pertaining to the Clinton Foundation and the allegations of pay-to-play public corruption.
As for Hillary, if elected the Judge believes she will “begin her presidency as wounded as Rich Nixon did as he began his second in January of 73′” and would still have to deal with House Republicans investigating her.
- Chinese Capital Outflows Send FX Reserves To Lowest Since 2011
Overnight, China reported that the PBOC’s FX reserves fell another US$46bn to US$3.121 trillion in October as the central banks struggled to offset the impact of accelerating capital outflows, a bigger drop than the consensus estimate of US$34bn, triple the official September decline of US$19bn (recall that according to Goldman, the true FX outflow in recent months has been far greater), and the biggest drop since January. The October decline brought China’s total reserves the lowest amount since 2011.
As we have shown previously, a separate dataset called “PBOC’s FX position”, which shows the amount of PBOC’s FX assets at book value and is usually released around the middle of the month, should provide a cross-check on PBOC’s FX sales net of valuation effects.
As Bloomberg notes, the data come amid a period of renewed weakness for China’s currency. The yuan fell 1.53 percent last month, the most since a devaluation in August last year that shook investor confidence and ignited global market turmoil. Policy makers were suspected of propping up the exchange rate in the weeks leading up to a Group of 20 meeting in September and before the yuan’s entry into the International Monetary Fund’s reserves on Oct. 1 – and then reducing support after exports plunged the most in seven months. The currency fell to a six-year low of 6.7856 a dollar on Oct. 28.
The chart below which correlated China’s outflows with the value of the Yuan suggests that either the currency is temporarily undervalued, or that the real amount of Chinese reserves, which may be unreported by the PBOC to prevent an even greater retail outflow scramble, may be as much as half a trillion dollars less than what has been officially reported.
And with Chinese capital outflows speculated as soon becoming the biggest risk factor to global financial stability, in a repeat of late 2015, once the chaos surrounding the US presidential election is over, below are some economist reactions to the reported number:
- “The yuan was sprinting all the way to approach 6.8 in October, which may have prompted the PBOC to sell some reserves to stabilize the market,” said Gao Qi, a Singapore-based foreign-exchange strategist at Scotiabank. “Capital outflows will continue, the only questions is how fast, and that depends on the dollar’s move.”
- “Capital outflow pressures will be sustained at least for the coming months,” said Frederik Kunze, chief China economist at Norddeutsche Landesbank in Hanover, Germany. “Growing anxiety with regard to the soundness of the Chinese financial markets and the fear of a property bubble have to be seen in this context.”
- “The number indicates relatively light intervention by PBOC during the month,” said Ding Shuang, head of Greater China economic research at Standard Chartered Plc. in Hong Kong. Most of the drop comes from valuation effects, he said.
- Faster yuan depreciation against the dollar, higher interbank interest rates, and PBOC liquidity injections via open market operations “pointed to continued capital outflows in October,” said Robin Xing, an economist at Morgan Stanley in Hong Kong.
Should Clinton win tomorrow, and push the USD even higher on expectations of a December Fed rate hike, many strategists believe that the next stop for the Yuan will be to drop to a level somewhere in the vicinity of USDCNY 7.00.
And speaking of tomorrow’s election outcome, and how it may impact Chinese risk assets, here is Bank of America with how 4 distinct election scenarios can impact Chinese equities:
- Best scenario for China equities: Clinton win/split congress
If Hillary Clinton wins with a split Congress, we suggest buying short-duration HSCEI calls to position for a potential relief rally (likely to be brief); if it’s a Clinton sweep, buying environmental sectors and exporters, selling Rmb-sensitive sectors such as property, financials and commodities; if Donald Trump win/split Congress, buying One-Belt One-Road (OBOR) sectors, selling Chinese exporters to the US and Rmb-sensitive sectors; if a Trump sweep, buying HSCEI puts and domestic service sectors, selling environmental, Rmb-sensitive sectors and exporters in general; whoever wins, buying defense stocks as regional tension rises
- Polls say Clinton win/split Congress most likely
For more details, please see US Election: four scenarios, four lists by Savita Subramanian on Oct 28. This is arguably the best outcome for China equities in our view because the status quo may largely be maintained and the absence of a clean-sweep may mean only moderate upward pressure on USD. In addition, as the US election uncertainty is largely removed, risky assets, including China equities, may stage a relief rally.
- A Clinton sweep could hurt China equities
As David Woo argued, a clean sweep, either by Clinton or Trump, would be bullish for the USD. Such strength would come at a particularly sensitive time for Rmb devaluation expectations, thus, may trigger significant capital outflow from China and put significant pressure on Rmb, by our assessment. Separately, given the Democrats’ emphasis on environmental issues and the global nature of such issues, we expect related sectors in China to benefit as well.
- A Trump win/split Congress: impact on Rmb more uncertain
On the campaign trail, Trump wanted to label China as a currency manipulator & impose a 45% tariff on Chinese exports (Helen Qiao, Asia: trade tensions either way, Oct 24). This is behind our strategy-level call to sell Chinese exporters with heavy US exposure (Table 1, stocks with the highest US revenue ratio). To counter, China may speed up its OBOR program (One Belt & One Road, Great Expectations, 16 Mar, 2015). The impact on Rmb/USD rate is more uncertain – the Chinese govt may strengthen the soft peg to ease the trade tension or it may allow more flexibility on the exchange rate to stand up to the US or to reduce the chance of being labeled a manipulator. On balance, we think the latter is more likely due to the constraint imposed by capital outflow.
- A Trump sweep is the worst scenario for China stocks
In our view, a Trump sweep may mean a very strong USD, a much reduced risk appetite and a major sell-off of offshore China stocks by global investors. It could also blunt globalization as it loses its biggest champion, hence our selling of exporters broadly (Table 6 in our 2016 Year-Ahead lists the top exporters). If China’s growth turns inward, we expect domestically-oriented sectors, especially services, to benefit the most.
- Florida, Florida, Florida: National Race A Dead-Heat As Polls Swing In Toss-Up States
As the 2016 Presidential campaign comes to a frenetic end, with both candidates frantically hopping from rally to rally across several key swing states, RealClearPolitics made two significant shifts in its “no toss up states” electoral college map.
1. Shifting Florida from Clinton to Trump as the latest Trafalgar Group poll showed Trump up by 4 points…
2. Shifting New Hampshire from Trump to Clinton as the latest Emerson poll showed Clinton up by 1 point…
Which left the electoral map in an almost dead-heat on election eve…
As The Hill reports, the Democratic nominee will enter Tuesday with several different paths to the White House, and Clinton wasn’t timid about showing her assurance when asked about the challenge of unifying the nation after a bitterly divisive presidential campaign.
“I think I have some work to do to bring the country together,” Clinton said. “I really do want to be the president for everybody.”
Clinton held a lead of around 3 percentage points in the RealClearPolitics national average. Her margin had been twice as large in mid-October. Nonetheless, her lead has actually ticked upward from a recent low in the past few days.
Trump insisted that he was going to win, pointing to his tens of thousands of enthusiastic supporters. Lines for Trump rallies snaked around the grounds even for last-minute stops in states that are normally safe for Democrats in presidential elections, such as Minnesota.
“The whole psyche will change tomorrow,” Trump said at a Monday rally in Florida.
While Clinton betrayed no nervousness, her campaign lavished attention on Michigan, a seemingly safe state for the Democrat that hasn’t voted for a Republican presidential nominee since 1988.
President Obama spoke in Ann Arbor, while the candidate herself returned for the second time since Friday for a rally in Grand Rapids. Those efforts suggest the Clinton campaign sees challenges in the Wolverine State, which Obama won by 10 points in 2012.
A Trump victory in Michigan would upend the electoral map, suggesting that Clinton could be in real trouble, with demographically comparable states like Wisconsin, Pennsylvania and Ohio also in play.
“She’s defending states she thought she had locked up months ago,” Trump deputy campaign manager David Bossie said on a conference call with reporters. “A late surge of enthusiasm for Donald Trump is forcing her to make an unanticipated last-minute defense of these states, particularly Pennsylvania and Michigan.”
Clinton campaign manager Robby Mook dismissed Trump’s efforts, calling his blue-state strategy a desperate end-of-game ploy with no real muscle behind it.
“I think he needed to get those into play much earlier,” Mook said on ABC’s “Good Morning America.”
“I’m not concerned that he’s spending so much time there at the end because he didn’t build a ground game.”
- "I Just Lost All Faith In Our Deeply Corrupt Legal System And In The Rule Of Law In The US"
Submitted by Michael Snyder via The End of The American Dream blog,
The FBI just gave Hillary Clinton the biggest gift in the history of presidential politics. Two days before the election the FBI has announced that they are ending their investigation into Hillary Clinton’s mishandling of classified information. After reviewing the emails that were found on electronic devices owned by Huma Abedin and Anthony Weiner, FBI Director James Comey sent a letter to Congress telling them that “we have not changed our conclusions that we expressed in July with respect to Secretary Clinton.” That means that there will be no indictment, and the path is now clear for Hillary Clinton to become the next president of the United States on Tuesday unless an election miracle happens.
These days it is unusual for a news story to hit me on a deeply emotional level, but this one sure did. When the FBI originally announced that they were renewing this investigation, it gave me a glimmer of hope that there may be a little bit of integrity left in our legal system.
But after yesterday’s announcement I have lost all faith in our deeply corrupt system of justice. America has become a lawless nation, and the rule of law is completely dead in this country.
Yes, it is true that those of us in the general public do not know what was contained in those emails, and Director Comey says that nothing significant was found in them…
In a letter to lawmakers, Comey said the FBI is standing by its original findings, made in July, that Clinton should not be prosecuted for her handling of classified information over email as secretary of State.
“The FBI investigative team has been working around the clock to process and review a large volume of emails from a device obtained in connection with an unrelated criminal investigation,” Comey said in the letter. “During that process we reviewed all of the communications that were to or from Hillary Clinton while she was secretary of State,” Comey wrote. “Based on our review, we have not changed our conclusions that we expressed in July with respect to Secretary Clinton.”
But of course the truth is that the FBI already had more than enough to go after Clinton based on what they discovered the first time around.
In the world of national security, if you transmit a single classified document via a channel that is unsecured, you will lose your security clearance in a heartbeat and it is quite likely that you will be prosecuted and sent to prison for mishandling classified information.
In fact, two different members of the U.S. military were recently convicted for doing precisely that…
Just last month, Bryan Nishimura, a California Naval reservist, was sentenced to two years’ probation and a $7,500 fine after he pleaded guilty to removing classified material and downloading it to a personal electronic device. The FBI found no evidence he planned to distribute the material.
Last year, Bronze Star recipient and combat veteran Chief Petty Officer Lyle White pleaded guilty to storing classified documents on a nonsecure hard drive in Virginia. He received a suspended 60-day sentence and a suspended $10,000 fine in return for the plea. White said the information was for training purposes to study and that he had no intent to communicate with anyone.
Neither of those individuals intended to mishandle classified information, and they certainly never intended to share it.
But they were both convicted anyway.
So what makes Hillary Clinton any different?
During the initial investigation, the FBI found 113 emails that contained classified information…
Clinton had repeatedly said she did not have any classified emails on her server, but the results of the FBI investigation show that claim was incorrect.
Of the tens of thousands of emails investigators reviewed, 113 contained classified information, and three of those had classification markers. FBI Director James Comey has said Clinton should have known that some of the 113 were classified, but others she might have understandably missed.
And I would be willing to bet that the FBI found some more classified emails that they had not seen previously among the 650,000 or so that they reviewed for this renewed investigation.
But it doesn’t matter now. Hillary Clinton is free as a bird even though she mishandled 113 classified emails, and it looks like she is going to become the next president of the United States on Tuesday.
As a law student and then later as an attorney working in Washington D.C., I got to see just how deeply corrupt our legal system has become.
But after yesterday, I don’t see how any American can ever have faith in the rule of law again.
If the law does not apply equally to all persons at all times and in all circumstances, we might as well not even have a legal system.
At this point, there is only one way that some sort of justice can be achieved in this case. And that is if the American people go to the polls on Tuesday and vote to keep her out of the White House.
It won’t be perfect justice of course, but at least it would keep Hillary Clinton from getting what she wants more than anything else in life.
The choice before the American people is very simple. Hillary Clinton is the most corrupt politician to ever run for the presidency, and the extremely long laundry list of Clinton scandals and crimes has been well documented over the past three decades.
The voters know exactly what they are getting with her. And if they choose her anyway despite all of the things that have been revealed, that means that America is willingly choosing lawlessness.
To most conservatives, this election is all about Trump, but I believe that it is far more about Hillary Clinton.
I am convinced that we are at a pivotal moment in American history, and if the American people willingly choose Hillary Clinton it will be an indication that there is zero hope for the future of this nation.
So let us pray for an election miracle, because right now Donald Trump is behind in most national polls and time is running out.
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