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Decoding Donald Trump ahead of his speech in Arizona, according to an expert in his political rhetoric

What to listen for as former President Donald Trump returns to hosting political rallies, starting with a speech in Arizona. Former President Donald Trump waves to the crowd at the end of a rally on September 25, 2021 in Perry, Georgia.Sean Rayford/Getty Images Donald Trump's stump speeches have been few and far between since he left office. Hitting the road again means getting reacquainted with his rhetorical moves. Casting doubt on everything about the insurrection in DC is his latest rallying cry. The return of over-the-top "Save America" rallies on January 15 in Arizona gives embattled former President Donald Trump another chance to publicly deny any responsibility for the deadly January 6, 2021 attack at the US Capitol.Here's how Jennifer Mercieca, author of "Demagogue for President: The Rhetorical Genius of Donald Trump," said the twice-impeached, revenge-seeking, presumed front-runner for the GOP nomination in 2024 has sought to bend reality to his will in the past. Mercieca, a communications professor at Texas A&M University, said Trump typically plays defense by sowing confusion in any way possible. For instance, while he told attendees at his fiery Ellipse address on January 6, 2021, to "fight like hell" to keep him in office, Trump's lawyers said in a civil suit filed against him by US Capitol Police Officers James Blassingame and Sidney Hemby that he was actually calling for "an effective, peaceful, and patriotic demonstration." Blassingame and Hemby were two of the law enforcement officials who defended the Capitol from roving MAGA invaders. Mercieca said the easiest way to tell that Trump's slipping into "apologia" mode during what's sure to be an hours-long airing of grievances in Florence, Arizona, is to listen for complaints about the "rigged" and "stolen" election, as well as arguments that he and his devoted followers are wildly misunderstood. Expect Trump to cloud the issue from there using the following techniques:Ad hominem: attack the personMercieca said deflection is a given. "I/we did no wrong. But do you know who did? The Bidens. And the Democrats. And the Deep State," she said of Trump's penchant for passing the buck. "He will likely use name-calling to accuse them of lying, subversion, and treason." Trump has repeatedly called Senate Minority Leader Mitch McConnell a "loser" and recently called Republican Sen. Mike Rounds of South Dakota a "jerk" for saying the 2020 presidential election was "as fair as we've seen." Ad populum: appeal to the wisdom of the crowd"He will portray himself as a righteous victim/hero who clearly sees the corruption, hypocrisy, and conspiracy against him, his people, and the American government," Mercieca said of the familiar role-playing. The second phase involves recasting the insurrection as "his 'good Americans' asserting their democratic rights against corruption" or a government plot to deny him a coveted second term. An image of former President Donald Trump appears on video screens before his speech to supporters from the Ellipse at the White House on January 6, 2021.Bill Clark/CQ-Roll Call, Inc via Getty ImagesDenial: it wasn't meThe problem with claiming ignorance of this particular subject — as Trump often does by disavowing that he's ever seen/met/spoken to politically inconvenient associates — is that the whole world watched it happen. "He can't deny that the insurrection took place, but he can try to re-frame how we understand it," Mercieca said. Differentiation: it isn't how it looksThis one works in tandem with denial to warp understanding. Mercieca said. "Taken together these strategies are designed to deal with the accusations made against him and his followers by trivializing them, accusing the accusers, and indicting the democratic and legal process itself," she told Insider, adding that any nods to actual reality will immediately be couched by comments about "what it all means." Transcendence: look at the bigger picture"He'll try to make his base feel better and show that he should be remembered as a great president," Mercieca said of any Trump-led walk down memory lane. The flipside is he now has to tear everything down to build himself back up. "He was so successful at making America great again, he'll say, that they had to cheat to get him out of office because they want America to fail," Mercieca said. Tu quoque: appeal to hypocrisyPointing fingers is one thing. Mercieca said Trump typically takes things further by accusing his accusers of doing the same —  so it seems like everyone is crooked. "I think we'll see a lot of him trying to blame the Democrats or the FBI or others for what happened on January 6th," Mercieca said. This weekend's rally marks Trump's return to in-person appearances outside the secretive fundraisers he routinely hosts at his pricey private golf clubs in Palm Beach, Florida, and Bedminster, New Jersey.It's possible he'll do two more of these a month in battleground states from now until the midterm elections. Politico reported Thursday.Read the original article on Business Insider.....»»

Category: personnelSource: nytJan 14th, 2022

How a US government program advocated using nuclear explosions for construction, farming radioactive crops, and blasting holes in the moon

In the 50s and 60s, the US dreamed up ways to bring nuclear tech into everyday life - like building dams with bombs or growing radioactive crops. Atoms for Peace. U.S. Department of Energy; Los Alamos National Laboratory; U.S. Department of Energy/National Nuclear Security Administration; Atomic Energy Commission; Samantha Lee/Insider A 50s US campaign called "Atoms for Peace" sought to bolster the reputation of nuclear weapons. It lasted for decades and encompassed schemes to use nukes to excavate highways and frack for gas. One expert called the campaign "propaganda" to cover up US nuclear proliferation. In 1963, nuclear experts had an idea for the US Department of Energy: to use 520 nuclear bombs to blast a second Suez canal through Israel's Negev desert.The US decided not to do that. But the plan, which seems outlandish now, was one of main considered in a concerted push to rehabilitate nuclear weapons by exploring their civilian uses.So-called peaceful nuclear blasts were the focus of intense political will, championed by the White House and given ample funding - and nuclear fuel - in the hope of making atomic blasts a part of everyday life. A crater created by the Sedan explosion in Nevada. Its scope dwarfs the construction vehicles seen on the left-hand side. U.S. Department of Energy Office of Scientific and Technical Information Despite its idealistic talk of harnessing destructive technology for good, in the years since these efforts have come to be seen as a ploy to provide cover for US nuclear research as its weapons stockpile ballooned."The idea was to offer some new vision for the world to make the US seem like a peace-loving country when it was planning to do this major upscaling of its military arsenal," historian Jacob Hamblin told Insider.(Hamblin is the author of the book "The Wretched Atom: America's Global Gamble with Peaceful Nuclear Technology.")Plans reviewed by Insider show the ideas circulating in the 1950s and 1960s to widen the use of nuclear materials. A diagram from an Atomic Energy Commission pamphlet describing how two nuclear blasts could be used to dam a river. US department of energy. Most focused on the potential for nuclear explosions to quickly excavate areas for construction projects at lower costs than conventional explosives.Some sought to harness radiation too, including purposefully mutating food crops with radiation in the hope of improving their quality.Relatively little attention was paid to the downsides, particularly the radioactive material such blasts would leave behind. President Dwight D. Eisenhower delivering the Atoms for Peace speech at the United Nations. IAEA Imagebank/United Nations/New York In December 1953, President Dwight D. Eisenhower gave an address at the UN which became known as the "Atoms for Peace" speech, in which he foresaw a world of peaceful nuclear devices.The problem was that, in 1953, all he really had was bombs."At that point, ninety-something percent of all atomic energy was military-related, said Alex Wellerstein, historian and author of "Restricted Data: the History of Nuclear Secrecy in the US.""There was a little bit of stuff with medical isotopes. These are just so tiny and insignificant compared to the bomb research."In an isotopic gardenThe answer was the US Atomic Energy Commission, a federal agency created to find peaceful uses for nukes."I don't think of it as 'big hammer, small nails.' I think of it as: 'I'm a hammer, I'm looking for nails,'" said Hamblin. One idea, atomic gardening, aimed to solve the world's food crisis.The principle is simple, if optimistic: different crops were arranged in a circle around a source of radioactive material, in the hope that the radiation would encourage random mutations that would improve the plants. An example of an atomic garden run by the Institute of Radiation Breeding in Hitachiomiya, Japan. Google Earth Many of these gardens didn't yield the superhero crops that were hoped for. But the technology did create some interesting breeds.The Star Ruby grapefruit, a widely-farmed variety that is recognizable because of its dark pink flesh and strong flavor, is said to have been bred from atomic gardening.Fly the radioactive skiesUS officials also hoped nuclear energy could be used for transportation. Newly-developed nuclear reactors worked a charm in submarines. But scientists had also developed plans for a nuclear-powered plane - which was touted to be able to fly one or more times around the world without having to land, per The Atlantic. They dreamed, too, of nuclear-powered rockets flying into space.Neither of these materialized and it's probably for the best, said Hamblin."All you really need is one crash and you've got a nuclear reactor that has fallen out of the sky," he said. A schematic of NASA's proposed Nuclear Engine for Rocket Vehicle Application (NERVA) program of the 1960s. NASA In space, nobody can hear you detonate a bombAnother close call was Project A119. A perfect example of the Atoms for Peace mindset, it suggested nuking the surface of the moon for the benign purpose of learning more about how craters are formed.Decades later, Dr Leonard Reiffel, a government physicist who fronted the project, said that its true purpose was to intimidate the Soviet Union, which had recently embarrassed the US by launching its Sputnik V satellite."The Air Force wanted a mushroom cloud so large it would be visible on earth," he said in 2000. A woman dancing in front of a mushroom cloud during Operation Upshot-Knothole, April 1953. U.S. Department of Energy/National Nuclear Security Administration, Nevada Site Office, UK-53-093. Big bombs made cheapAs the US made more bombs, each one become cheaper - heralding the possibility that nuclear explosives could supplant conventional ones like TNT in excavation work.This table, from an AEC document, gives prices for excavation by different methods, making the case that the best choice economically were very large nukes: A table compares the estimated cost of energy production by source from the "Understanding the atoms" information booklet US Department of Energy "By the 50s, the US is no longer in a place of nuclear scarcity, but it's in a world of nuclear plenty. They have more nukes than they need militarily. They can produce them much cheaper than they used to," said Wellerstein.The AEC's Project Chariot aimed to use four buried 100-kiloton nuclear bombs to create an artificial fishing harbor in Alaska's Cape Thompson.Its opponents did worry that fallout from the explosions could harm the environment, but AEC director Edward Teller was adamant that such risks were "greatly exaggerated," as he told Popular Mechanics magazine in 1960.The project was vehemently opposed by locals, including the Inupiaq people, who eventually stopped the project from going ahead, per The New York Times.By road or by riverAnother bold infrastructure plan was Project Carryall.The scheme called for 22 nuclear blasts, of between 20 and 200 kilotons, to blast a path through inconveniently-placed mountains in California's Mojave desert, through which a new highway and railroad could be built. A schematic shows the profile and nuclear explosive location for Project Carryall. US Department of Energy As well as blasting a canal through Israel, the US also considered using nuclear explosives to create an alternative to the Panama canal.Nicknamed the "pan-atomic canal," nuclear explosions would have carved a sea-level waterway through Nicaragua, Panama, or Colombia, per Forbes. A map shows proposed alternate routes to the Panama Canal. US Department of Energy US scientists boasted that any such canal would make the Panama route obsolete, as nuclear technology could blast a far deeper channel and connect the Atlantic and Pacific directly, rather than using the series of locks seen in the existing route.Blasting for gasA series of nuclear tests were also carried out to assess whether subterranean atomic blasts could help free natural gas from under the ground - essentially using bombs for a type of fracking.Five detonations took place to test the principle:Gasbuggy: a 29 kiloton explosion near Farmington, New Mexico in 1967.Rulison: one 40 kiloton detonation near Rulison, Colorado in 1969.Rio Blanco: three 30 kilotons explosions near Rifle, Colorado in 1973. The plan did work, but the gas that was collected was contaminated with radiation, which prevented its use.All of these projects were gradually suspended and scrapped, to Teller's frustration.He went to his grave convinced that the ideas would have worked but for the "unjustified fear of radiation," he said shortly before dying in 2003. A few people are gathered at the Atoms For Peace bus, a mobile exhibit from the Atomic Energy Commission circa 1947-1972. CORBIS/Corbis via Getty Images Nuclear electric power is probably the most successful application, which was envied around the world."Everybody wanted that electricity generation because it was kind of a symbol of modernity," said Hamblin.Nuclear power helped the US gain political traction around the world.For instance, in 1967, the US supplied Iran - then a US ally with a secular leader - with a 5-megawatt nuclear research reactor and highly enriched uranium to fuel it."Basically the US was saying: Hey, guess what? We are going to help you with a nuclear program. We will give you nuclear reactors, we're going to help you staff it," said Wellerstein. The idea is "if you have a dinky reactor program for peace, you probably don't have a proper reactor for war [and] I'm going to know exactly what you have exactly what you're capable of," he said. People look into the crater from the Project Sedan nuclear explosion near Mercury, Nevada, USA (undated). Corbis via Getty Images For Hamblin, the concept of "peaceful nuclear explosions" fell out of favor in the mid-70s. By then, the Cuba missile crisis and the Vietnam war had soured the country's relationship with atomic bombs. During the Atoms for Peace era, the US carried out 27 peaceful nuclear explosions on US soil - four in Colorado and New Mexico, the rest in Nevada - and several aboard, including 67 tests carried out in the Marshall Islands. 150-megaton thermonuclear explosion, Bikini Atoll, 1 March 1954. Ann Ronan Pictures/Print Collector/Getty Images Its legacy has been hotly disputed, said Wellerstein."Some of what came out of that project I think is pretty good. I think nuclear medicine is unambiguously good, right? Nuclear power I think is, on balance, good," he said.But it is clear that there had been little consideration for the long-term consequences, he said."Literally, the plan was: yeah, yeah, we'll figure that out at some point in the future," Wellerstein said. What is sure is that the tests left behind victims.Some Marshall islanders are still unsure whether they can safely go back to live on the islands. Navajo uranium miners and their families, who were exposed to toxic heavy metals for years, were left with serious health issues like cancers, respiratory illnesses, and Navajo neuropathy, a neurological disorder that affects children.Nuclear waste also accumulated without much of a plan for disposal.According to Hamblin, the "Atoms for Peace" campaign also inspired some of the arms-control problems that most frustrate the US today."Countries use it to bolster the peaceful side of what they're doing when intelligence organizations would say: they're building a nuclear bomb," he said. "They will join [nuclear watchdog] the IAEA and say: "Well, actually, no, we're just doing Atoms for Peace stuff, all these technologies that are supposed to help in our development.""That is the rhetoric that the US has been supplying them for decades."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 26th, 2021

Destroying A Democracy To Save it: Democrats Call For The Disqualification Of Dozens Of Republican Members

Destroying A Democracy To Save it: Democrats Call For The Disqualification Of Dozens Of Republican Members Authored by Jonathan Turley, Below is my column in the Hill on the continued calls to disqualify Republican members of Congress to prevent them from running for reelection. What is maddening is that Democratic groups and commentators are seeking to remove as many as 120 Republicans from the ballots in the name of democracy. It is like burning books in the name of literacy. Yet, on this anniversary of the January 6th riot, members of Congress and Democratic groups want to block voters from reelecting their preferred representatives. Like villages in Vietnam, it appears that some members and activists believe that you have to destroy democracy to save it from itself. Here is the column: This year, the Biden administration joined many in the United States in criticizing the mass disqualification of 583 candidates in Iran by the Guardian Council. The Iranian elections (like elections in other countries like China and Venezuela) are democratic only in the most artificial sense: You can freely vote from a pre-selected list of candidates. Electoral disqualification systems are generally anathema to democratic values, but some in the United States are now toying with the idea for the 2022 or 2024 elections. While more modest than the Iranian model, the Democratic calls for disqualification are just as dangerous. What is most maddening is that this anti-democratic effort is cloaked in democratic doublespeak. This week, Democratic lawyer Marc Elias predicted that 2022 would bring a renewed interest in disqualifying Republican members from office based on an obscure Civil War-era provision. Elias — the former Hilary Clinton campaign general counsel — is a well-known figure in Washington who has been prominently featured in the ongoing investigation of Special Counsel John Durham. Elias has founded a self-described “pro-democracy” group that challenges Republican voting laws and pledges to “shape our elections and democratic institutions for years to come.” In the age of rage, nothing says democracy like preventing people from running for office. Elias and others are suggesting that — rather than defeat Republicans at the polls — Democrats in Congress could disqualify the Republicans for supporting or encouraging the Jan. 6 “insurrection.” Last year, Democratic members called for the disqualification of dozens of Republicans. One, Rep. Bill Pascrell (D-N.J.) demanded the disqualification of the 120 House Republicans — including House Minority Leader Kevin McCarthy(R-Calif.) — for simply signing a “Friend of the Court brief” (or amicus brief) in support of an election challenge from Texas. These members and activists have latched upon the long-dormant provision in Section 3 of the 14th Amendment — the “disqualification clause” — which was written after the 39th Congress convened in December 1865 and many members were shocked to see Alexander Stephens, the Confederate vice president, waiting to take a seat with an array of other former Confederate senators and military officers. Justin Reade of the North Carolina Supreme Court later explained, “[t]he idea [was] that one who had taken an oath to support the Constitution and violated it, ought to be excluded from taking it again.” So, members drafted a provision that declared that “No person shall be a Senator or Representative in Congress, or elector of President and Vice-President, or hold any office, civil or military, under the United States, or under any state, who, having previously taken an oath, as a member of Congress, or as an officer of the United States, or as a member of any State legislature, or as an executive or judicial officer of any State, to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof.” By declaring the Jan. 6th riot an “insurrection,” some Democratic members of Congress and liberal activists hope to bar incumbent Republicans from running. Even support for court filings is now being declared an act of rebellion. House Speaker Nancy Pelosi (D-Calif.) helped fuel this movement — before Jan. 6 even occurred — by declaring that the Republicans supporting election challenges were “subverting the Constitution by their reckless and fruitless assault on our democracy which threatens to seriously erode public trust in our most sacred democratic institutions, and to set back our progress on the urgent challenges ahead.” Jan. 6 was a national tragedy. I publicly condemned President Trump’s speech that day while it was being given — and I denounced the riot as a “constitutional desecration.” However, it has not been treated legally as an insurrection. Those charged for their role in the attack that day are largely facing trespass and other less serious charges — rather than insurrection or sedition. That’s because this was a riot that was allowed to get out of control by grossly negligent preparations by Capitol Police and congressional officials. While the FBI launched a massive national investigation, it did not find evidence of an insurrection. With an ominous mid-term election approaching, much of the effort among Democrats on the Hill and in the media has been to keep the enmity alive from Jan. 6. In what seemed almost a hopeful plea, the New York Times recently declared “Every Day is Now Jan. 6.” It made this tragedy sound like the political equivalent of a year-round Christmas store: Every day should involve a renewed gift of reminiscence and rage. The saddest aspect of this politicization of the Jan. 6 riot is that many of us wanted a full, transparent, and apolitical investigation. House Republicans rejected that idea, but there remain many questions to be answered — which has not happened. Instead, we have an effort to encode the notion of an actual insurrection through mantra-like repetition. The Constitution fortunately demands more than proof by repetition. In this case, it requires an actual rebellion. The clause Democrats are citing was created in reference to a real Civil War in which over 750,000 people died in combat. The confederacy formed a government, an army, a currency, and carried out diplomatic missions. Conversely, Jan. 6 was a protest that became a riot. That is not meant to diminish the legitimate outrage over the day. It was reprehensible — but only a “rebellion” in the most rhetorical sense. More importantly, even if you adopt a dangerously broad definition of “insurrection” or “rebellion,” members of Congress who supported challenging the electoral votes (as Democrats have done in prior years) were exercising constitutionally protected speech. Moreover, the Democrats cannot simply use their razor-thin majority to disqualify opponents willy-nilly. Punishments like expulsions take two-thirds votes, and any disqualifications can be challenged in the court. Indeed, not long after ratification in 1869, Chief Justice Salmon P. Chase ruled in a circuit opinion that the clause was not self-executing. He suggested that allowing Congress to simply bar political opponents from office would be a form of punishment without due process and would likely violate the prohibition on bills of attainder. As Democrats push to federalize elections and negate the laws in a couple dozen states, figures like Elias are now suggesting that Republicans could also be listed as “rebels” and barred from the ballot. Congress would then control not just how states conduct their elections but even who can appear on such ballots. The renewed calls for disqualifications may be simply reckless rhetoric timed for the anniversary of the riot. After all, every day would not be Jan. 6 without the requisite rage. However, it is reason — not rage — that we need right now. A recent poll showed that one in three Americans believes that violence against the government can be justified. It often seems like some want to trigger an actual rebellion by disenfranchising parts of our population. The fact is that there are people who traffic and profit in rage, and we are all the poorer for it. Tyler Durden Thu, 01/06/2022 - 18:20.....»»

Category: blogSource: zerohedgeJan 6th, 2022

Biden Accuses Trump Of Spinning "Web Of Lies" While Promising To "Defend Democracy" In Jan. 6 Speech

Biden Accuses Trump Of Spinning "Web Of Lies" While Promising To "Defend Democracy" In Jan. 6 Speech Update (0940ET): Just as expected, President Biden came out swinging in his speech Thursday morning, but still somehow missed the mark. Although he never mentioned Trump by name, the 79-year-old geriatric president tried his hardest to sound virile. "I will stand in the breach. I will defend this nation. And I will allow no one to put a dagger to the throat of American democracy," Biden announced. At this point, we're mostly surprised he managed to wake up this early. In its review of the speech, the NYT wondered if this is a preview of the kind of rhetoric Americans are likely to see heading into the midterms this fall - and 2024 just around the corner after that. The strategy worked for Dems in 2020, but has been less effective in the months since, as the electorate has focused mostly on surging inflation and COVID numbers, issues that directly impact most Americans. At one point, Biden proclaimed that his predecessor wasn't just "a former president but a defeated former president". He also blasted Trump for doing "nothing" for hours as the "assault" on the Capitol ground on. He also accused his main political rival of spinning a "web of lies" and for placing his own ego above protecting Democracy. At least one GOP senator, Lindsey Graham, accused Biden of brazenly politicizing the occasion. What brazen politicization of January 6 by President Biden. I wonder if the Taliban who now rule Afghanistan with al-Qaeda elements present, contrary to President Biden’s beliefs, are allowing this speech to be carried? — Lindsey Graham (@LindseyGrahamSC) January 6, 2022 * * * As President Biden attempts to squeeze as much political capital as he can out of the anniversary of the Jan. 6 protest at the Capitol, the White House has informed the press that Biden intends to accuse his predecessor, President Trump, of having "singular responsibility" for the events of that day. The remarks come as the new AG Merrick Garland insists that anyone involved with that day's events will be prosecuted, whether they were present or not. We'll set aside the fact that the AG has stopped just short of openly calling for Americans to be persecuted for thought crimes, and focus on the matter at hand: that President Biden's sagging polling and twin devils of inflation and the current COVID surge have left him in a desperate position. In ten months, Americans will head to the polls in what's bound to be a closely watched midterm election. It's possible Democrats could lose both of their narrow Congressional majorities. To try and stop this from happening, Biden needs to try and scare Americans into remembering how bad the last guy was. And he intends to accomplish this with high-handed rhetoric about media lies and the "subversion" of Democracy. Biden is set to speak live from the Statuary Hall of the Capitol at 0900ET. Readers can watch live below: The Biden Team has already distributed select excerpts from the president's planned remarks to the media. In one quip, Biden exhorts Americans not to accept "political violence as the norm". "Are we going to be a nation that accepts political violence as a norm? Are we going to be a nation where we allow partisan election officials to overturn the legally expressed will of the people?” Biden will say in his speech, according to excerpts provided by the White House. “We cannot allow ourselves to be that kind of nation." As Bloomberg points out in its coverage, Biden appears to be abandoning a strategy of not mentioning Trump directly. As his poll numbers continue to sag, Biden and his team are going to try "reengaging" with Trump (on a purely rhetorical basis) to see if this might help lift Biden's sagging approval rating. The day represents "a rhetorical opportunity" for Biden to change the narrative of his flailing presidency and "reorient" the conversation away from the disastrous handling of the COVID pandemic and toward something more politically useful for the Democrats. Speaking during yesterday's White House press briefing, Biden Press Secretary Jen Psaki insisted that Biden was "personally" affected by the events of Jan. 6. "It hit him personally", she said (though not as personally as it hit AOC, who infamously lied about the "rioters" threatening her during the "siege". Psaki also claimed Biden would be discussing "the truth" of what happened that day, while pushing back against "lies" and the "subversion" of American democracy. Biden's comments are part of a "day long" parade of speeches from top Democrats including - of course - Nancy Pelosi. The speeches will focus on the importance of "democracy" and dovetail with Biden's planned push to reject voter ID laws that are increasingly being implemented across the country at the state level. Pelosi, Biden and VP Kamala Harris will all speak at the Capitol (starting at 0900ET, as we noted above). After a morning of remarks, a House pro forma session will be held on the House floor at noon, with prayer, a statement from the chair and a moment of silence. At 1300ET, Librarian of Congress Dr. Carla Hayden will moderate a conversation between historians Doris Kearns Goodwin and Jon Meacham to "establish and preserve the narrative" of Jan. 6.  At 1430ET, members of Congress will reflect on Jan. 6, presided over by Representative Jason Crowe. A prayer vigil will be held at 1730ET. One person we won't be hearing from Thursday (thanks in part to the ongoing social media blackout): President Trump. He has cancelled a planned press conference at Mar a Lago at the urging of allies, according to Bloomberg. Although we wouldn't be surprised to hear something from him, perhaps in the form of a statement disseminated through one of his former aides, or  perhaps on Gettr. Both Pelosi and Schumer have released statements to mark the occasion: Pelosi's comments came in the form of a press release: House Speaker Nancy Pelosi had a singular message for Americans and the world on the eve of the anniversary of the horrific attack on the Capitol: “Democracy won.” In an interview with The Associated Press on Wednesday, steps from where a mob loyal to Donald Trump laid siege to the building, Pelosi said it’s time for the country to turn to its “better angels,” draw from history and ensure a day like Jan. 6 never happens again. “Make no mistake, our democracy was on the brink of catastrophe,” Pelosi told the AP. “Democracy won that night,” she said. “These people, because of the courageous work of the Capitol Police and Metropolitan Police and others, they were deterred in their action to stop the peaceful transfer of power. They lost.” The speaker will lead Congress on Thursday in a day of remembrance at the Capitol, with President Joe Biden speaking in the morning, and historians and lawmakers sharing remembrances throughout the day — though few Republicans are expected to attend. The deadly insurrection stunned the country, and the world, as rioters ransacked the Capitol, some in hand-to-hand combat with police, after a defeated President Trump exhorted them to fight as Congress was certifying the Biden’s election. Pelosi said no one could have imagined a U.S. president calling for an insurrection, but there’s now an “enormous civic lesson learned as to what a president is capable of,” she said. “I think now people are alerted to the fact that there can be rogue presidents.” The California congresswoman, who made history 15 years ago as the first female speaker of the House -- and has become one of the most powerful leaders ever to have held the gavel -- said she bears “absolutely no sense of responsibility” for the current divisions in Congress, or the country. After having twice led the House to impeach Trump, she said her message to those who assaulted the Capitol — and the millions of Americans who backed Trump and may support him again — is that they were lied to. Countless court cases and investigations have shown no evidence of voter fraud that could have tipped the election, as he claims. “They may have thought that was right,” she said. ”But they were lied to by the president of the United States.” For that, she said, “he should be ashamed.” Sitting beneath a portrait of George Washington, Pelosi drew heavily on the founders’ vision for a country where Americans would have many differences but rely on common sense to resolve them. She drew on Abraham Lincoln’s time -- insisting on constructing the dome of the Capitol despite naysayers during the Civil War-- to keep the country together. “We cannot shirk our responsibility. We have the power and we have the responsibility and we will live up to that to keep our country together,” she said. “Let’s hope that we never elect a president who will incite an insurrection on the Congress of the United States.” Looking back on the night of Jan. 6 after the riot, Pelosi said she is most proud of the decision congressional leaders made, once the Capitol was cleared of the mob, to quickly return to certify the election results. She hopes to “soon” reopen the mostly shuttered Capitol -- a “symbol of democracy to the world,“ now closed longer than any other time in its history — once the coronavirus pandemic wanes and the physician’s office signals it is safe. And Pelosi urged Americans to look ahead, not back. “The future is America’s resilience, America’s greatness,” she said. “America will always prevail and that we will survive — even what we went through last year.” And here are Schumer's: Dear Colleague: As we approach the anniversary of the January 6 attack on our Capitol and our democracy, I am writing to follow up on my last Dear Colleague before Christmas, specifically to outline next steps on urgently-needed voting rights legislation. One year ago this week, we experienced great sorrow: mere hours after the dawn of a new Congress and a new Majority, our beloved Capitol was attacked. It was attacked in a naked attempt to derail our Republic’s most sacred tradition: the peaceful transfer of power. Domestic violent extremists sought to inflict chaos and violence. Fueled by conspiracy and the ravings of a vengeful former President, they sought to destroy our Republic. Our democracy held – for now. As we all are witnessing, the attacks on our democracy have not ceased. In fact, they have only accelerated. Much like the violent insurrectionists who stormed the US Capitol nearly one year ago, Republican officials in states across the country have seized on the former president’s Big Lie about widespread voter fraud to enact anti-democratic legislation and seize control of typically non-partisan election administration functions. While these actions all proceed under the guise of so-called “election integrity”, the true aim couldn’t be more clear. They want to unwind the progress of our Union, restrict access to the ballot, silence the voices of millions of voters, and undermine free and fair elections. They wish to propagate the Big Lie perpetuated by the former president that our elections are not on the level. Make no mistake about it: this week Senate Democrats will make clear that what happened on January 6th and the one-sided, partisan actions being taken by Republican-led state legislatures across the country are directly linked, and we can and must take strong action to stop this antidemocratic march. Specifically, as we honor the brave Capitol police officers who defended us from those motivated by the Big Lie who tried to undo a fair and free election, Senate Democrats will continue to make the case for passing voting rights legislation to counter the Republican voter suppression and election nullification laws with the same anti-democratic motives born out of the Big Lie. Let me be clear: January 6th was a symptom of a broader illness - an effort to delegitimize our election process, and the Senate must advance systemic democracy reforms to repair our republic or else the events of that day will not be an aberration – they will be the new norm. Given the urgency of the situation and imminence of the votes, we as Senate Democrats must urge the public in a variety of different ways to impress upon their Senators the importance of acting and reforming the Senate rules, if that becomes a perquisite for action to save our democracy. Our Caucus has fought back against these assaults, uniting behind comprehensive legislation that would address these threats to our democracy. Sadly, these common-sense solutions to defend our democracy have been repeatedly blocked by our Republican colleagues, who seem wholly uninterested in taking any meaningful steps to stem the rising tide of antidemocratic sentiment still being stoked by the former president today. In June, August, October, and once more in November, Republicans weaponized arcane Senate rules to prevent even a simple debate on how to protect our democracy. The Senate was designed to protect the political rights of the minority in the chamber, through the promise of debate and the opportunity to amend. But over the years, those rights have been warped and contorted to obstruct and embarrass the will of majority – something our Founders explicitly opposed. The constitution specified what measures demanded a supermajority – including impeachment or the ratification of treaties. But they explicitly rejected supermajority requirements for legislation, having learned firsthand of such a requirement’s defects under the Articles of Confederation. The weaponization of rules once meant to short-circuit obstruction have been hijacked to guarantee obstruction. We must ask ourselves: if the right to vote is the cornerstone of our democracy, then how can we in good conscience allow for a situation in which the Republican Party can debate and pass voter suppression laws at the State level with only a simple majority vote, but not allow the United States Senate to do the same? We must adapt. The Senate must evolve, like it has many times before. The Senate was designed to evolve and has evolved many times in our history. As former Senator Robert Byrd famously said, Senate Rules “must be changed to reflect changed circumstances.” Put more plainly by Senator Byrd, “Congress is not obliged to be bound by the dead hand of the past.” The fight for the ballot is as old as the Republic. Over the coming weeks, the Senate will once again consider how to perfect this union and confront the historic challenges facing our democracy. We hope our Republican colleagues change course and work with us. But if they do not, the Senate will debate and consider changes to Senate rules on or before January 17, Martin Luther King Jr. Day, to protect the foundation of our democracy: free and fair elections. Tyler Durden Thu, 01/06/2022 - 09:58.....»»

Category: smallbizSource: nytJan 6th, 2022

Stocks, Futures, Oil Tumble On Omicron Lockdowns, Manchin Shockwave

Stocks, Futures, Oil Tumble On Omicron Lockdowns, Manchin Shockwave Global stocks and US equity futures are sharply lower to start the otherwise very quiet holiday week, dragged lower by Manchin's shock decision to kill Biden's economic agenda (which Goldman said would cut US Q1 GDP from 3% to 2%), accelerating government measures to counter the fast-spreading omicron variant and fears over the growth outlook amid a tightening Fed. US equity futures tumbled almost 100 points from their Friday close (and more than 200 points from Thursday's all time high before paring some losses buoyed by optimism from news that Moderna’s booster vaccine increases antibodies 37-fold against omicron. Treasury yields also pared a sharp drop as low as 1.35% and the dollar held a jump from Friday, while crude oil slid on worries that mobility curbs to tackle the strain will hurt demand. As of 730am S&P 500 futures were down down 1.1%, Nasdaq 100 -1.3%, and Dow -1.0%. Global stocks have retreated from record highs in recent weeks amid concerns about Covid-19 hurting the economic recovery and as central banks pivot toward fighting inflation. Federal Reserve Governor Christopher Waller said a faster wind-down of the central bank’s bond-buying program puts it in a position to start lifting interest rates as early as March. “In our view, markets can look through omicron concerns, and the gradual pace of monetary tightening won’t bring the equity rally to an end,” UBS Global Wealth Management wrote in a note. “Overall, the latest news does not change our outlook for equities.” Luke Hickmore, investment director at Standard Life Investments, also recommended buying the dip. “The prospects for growth will improve rapidly from here,” he said. “The market will likely see a recovery in the new year when liquidity returns.” In the weekend's biggest news, senator Joe Manchin blindsided the White House on Sunday by rejecting Biden’s $1.75 trillion tax-and-spending package, prompting a sharply critical statement from the White House which called Manchin’s decision a “sudden and inexplicable reversal.”  Biden and top Democrats must now regroup to see if a scaled-back version remains possible with little more than 10 months before midterm elections that will decide control of Congress. As noted late last night, Goldman Sachs Group Inc. cut its forecast for U.S. economic growth for next year after Manchin’s move (more below). On Monday, Chuck Schumer said the Senate will still vote “very early” in 2022 on Biden’s economic agenda, although it was unclear just what the new plan will look like now that Build Back Better is dead. Not helping matters were the latest development in the Omicron front where the biggest European countries are introducing more curbs, with U.K. officials keeping open the possiblity of stronger measures before Christmas and the Netherlands returning to lockdown, even as Biden’s chief medical advisor said further U.S. lockdowns are unlikely. In some "good" news, said a third dose of its Covid-19 vaccine saw a 37-fold increase in neutralizing antibodies against omicron. Ironically. While investors remain on edge over the outlook for economic activity, there remains little evidence that the new variant causes illness as severe as the delta variant, especially among those already vaccinated. “The main reason behind the market sell off today is the rejection of Biden’s $2 trillion tax-and-spending package, which will lead to a reduction in U.S. economic growth forecasts,” said Michel Keusch, a portfolio manager at Bellevue Asset Management. “With trading volumes getting thinner and thinner into the year end, this is the catalyst creating some short-term nervousness.”  Then there are tightening concerns: the Federal Reserve’s decision to increase the pace of tapering last week is also adding to investor nerves about the outlook for 2022. And now, without either fiscal or monetary support, economists see a policy-induced slowdown in the economy where Goldman on Sunday cut its real GDP forecast for 2022: 2% in Q1 (vs. 3% prior), 3% in Q2 (vs. 3.5% prior), and 2.75% in Q3 (vs. 3% prior). One place which is convinced the Fed will not meet its targets it the bond market where traders of eurodollar futures price rates much lower than FOMC targets for the end of 2023 and 2024. Finally, as Bloomberg notes, there is also the issue of divergent global monetary policy to contend with, as the People’s Bank of China stepped up easing overnight with the first rate cut in 20 months. Looking at the premarket, travel stocks fell the most with United Airlines down 3.4% leading declines among major U.S. carriers, while a 4% slide in Royal Caribbean Cruises led the fall among cruise operators. Energy and industrial bellwethers also declined, with Chevron, 3M and Caterpillar falling over 2% each. Major U.S. tech and internet stocks slumped hitting shares in most highly valued names, as well as in cyclicals. Apple fell as much as 2.1% premarket while fellow large- cap tech names also drop, with Facebook-owner Meta Platforms down 1.9%, Alphabet -1.2%, Amazon.com -1.7%, Twitter -2.1%, Microsoft -1.6%. Here are some of the other big U.S. movers today: Major U.S. tech and internet stocks drop in premarket trading as risk appetite sours globally amid worries over further pandemic- related restrictions, hitting shares in most highly valued names, as well as in cyclicals. Shares in U.S. renewables firms drop in premarket after U.S. Senator Joe Manchin’s surprise rejection of President Joe Biden’s $2 trillion package. Moderna (MRNA US) rises 6% in U.S. premarket after the company said that a booster dose of its Covid-19 vaccine increased antibody levels against the omicron variant. Society Pass (SOPA US) surges 22% in premarket after the loyalty platform operator said in a statement it has been added to the Russell 2000 Index. Boston Beer (SAM US) upgraded to hold at Jefferies following pullback of more than 60% in the shares related to “massive” reset in expectations for hard seltzers, removing the only negative rating on the stock. Shares up 0.3% on low volume in premarket. "After battling endless headwinds in recent weeks, markets have finally been knocked over as the rapid spread of Omicron finally reaches panic mode," Russ Mould, investment director at AJ Bell, wrote in a client note. Europe's Stoxx 600 also stumbled, now down about 1.4% after falling as much as 2.6%, weighed down the most by travel and insurance. All sectors are in red. FTSE 100 recovers slightly as energy gets a leg up, but is still off by 1.2%. Dax -2%. Germany’s new coalition government picked Joachim Nagel, a Bank for International Settlements official, as the central bank’s next president. Earlier in the session, Asian stocks were set for the biggest drop since March, as the spread of the omicron variant and a surprising setback to U.S. President Joe Biden’s economic agenda forced traders to take bets off the table. The MSCI Asia Pacific Index sank as much as 2%, headed for its lowest close since November 2020, with tech and consumer shares the biggest drags. Relatively thin trading ahead of the year-end exacerbated declines in the region, as investors grapple with fresh outbreaks of Covid-19 and monetary policy tightening globally. The MSCI Asia Pacific Index is down about 15% from a peak in February, compared with an 18% gain in the S&P 500. “Omicron’s spread over the festive holidays and Manchin” are driving the risk-off mood, said Wai Ho Leong, strategist at Modular Asset Management (Singapore). “But most of all, it is the lack of liquidity in all markets.” India was the worst performer around the region, with its benchmark index poised to enter a correction amid the spread of the omicron variant. Chinese stocks also dropped despite a cut to bank borrowing costs for the first time in 20 months In FX, the dollar reversed gains and was little changed. The pound fell in line with other risk- sensitive currencies as global market sentiment soured; gilts advanced. Hedging the major currencies over the next month comes at a similar cost, yet the pound turns expensive further out as it holds a higher beta on monetary policy divergence. The Australian and New Zealand dollars followed a broader move lower in commodity FX amid a slide in oil and stocks. The yen advanced with Japanese government bonds. The lira tumbled to another record low after Turkish President Recep Tayyip Erdogan pledged to continue cutting interest rates. In rates, Treasury yields fell by ~3bp in 5-year sector, steepening 5s30s spread by 3bp on the day as long-end yields were little changed; 10-year yields 1bp lower around 1.39%, outperforming bunds and gilts. Treasuries drifted higher Monday as global stocks extended losses. Gains were led by front- and belly of the curve, while eurodollars advanced and the amount of Federal Reserve rate-hike premium for 2024 and 2024 eased. Long-end lagged the move ahead of a 20-year bond auction Tuesday.  Bund and gilt curves are mixed. Italy lags in the peripheral complex, widening ~2bps to Germany. In commodities, Brent crude extends dropped to trade down as much as 5.3%, trading as low as $69.60/bbl before paring some losses, with Brent down 3% to $71 per barrel, and WTI -4% to around the $68-handle. Spot gold drifts below the $1,800-handle. Base metals complex under pressure; LME aluminum and nickel decline the most.  There is nothing on the economic calendar today except that Nov. Leading Index, which is estimated to print at  0.9%. Market Snapshot S&P 500 futures down 1.6% to 4,535.75 MXAP down 1.8% to 187.95 MXAPJ down 1.8% to 607.98 Nikkei down 2.1% to 27,937.81 Topix down 2.2% to 1,941.33 Hang Seng Index down 1.9% to 22,744.86 Shanghai Composite down 1.1% to 3,593.60 Sensex down 2.0% to 55,848.23 Australia S&P/ASX 200 down 0.2% to 7,292.16 Kospi down 1.8% to 2,963.00 STOXX Europe 600 down 2.2% to 463.29 German 10Y yield little changed at -0.40% Euro up 0.2% to $1.1259 Brent Futures down 3.9% to $70.67/bbl Gold spot up 0.1% to $1,800.19 U.S. Dollar Index little changed at 96.61 Top Overnight News from Bloomberg President Joe Biden faces the unexpected task of quickly rewriting his policy agenda in a crucial election year after a key Senate Democrat abruptly rejected his signature $1.75 trillion economic plan Germany’s new coalition government picked Joachim Nagel, a former Bundesbank senior official, as the central bank’s next chief, according to a person with knowledge of the matter The ECB will not raise interest rates in 2022 if inflation behaves as expected, governing council member Pablo Hernandez de Cos told Expansion newspaper in an interview Europe’s biggest countries are introducing more curbs to fight a surge in Covid-19 infections, from another lockdown in the Netherlands to stricter travel restrictions at the height of the holiday period Chinese property stocks tumbled close to a fresh five-year low after a series of asset sales underscored concern that equity investors will bear the brunt of losses as developers offload projects to repay debt Chinese banks lowered borrowing costs for the first time in 20 months, foreshadowing more monetary support to an economy showing strain from a property slump, weak private consumption and sporadic virus outbreaks A more detail look at global markets courtesy of Newsquawk Asia-Pac equities traded mostly lower following the volatile session on Wall Street on Friday, which saw the Dow Jones, S&P 500 and the Nasdaq all posting varying degrees of losses, whilst the Russell 2000 outperformed with decent gains. Overnight, US equity futures opened with a mild upside bias, albeit the optimism faded in early trade as risk aversion materialised, with the ES Mar 2022 contract falling below its 50 DMA (4,596) whilst the NQ and RTY saw losses of over 1% apiece. Sentiment was hit by the slew of concerning COVID headlines over the weekend, whilst Friday saw further hawkish rhetoric from Fed officials - with Fed’s Waller suggesting the whole point of accelerating the bond taper was to make the March Fed meeting a live meeting for the first hike, and under his base case March is very likely for lift-off, although it could be pushed back to May. The ASX 200 (-0.3%) was pressured by some large-cap miners and banks, whilst the Nikkei 225 (-2.1%) and KOSPI (-1.8%) conformed to the downbeat tone, with upside in the former also capped by recent JPY strength. The Hang Seng (-1.9%) and Shanghai Comp (-1.1%) initially saw shallower losses after the PBoC opted to cut the 1yr Loan Prime Rate by 5bps, whilst the 5yr rate was maintained, although the property sector faced more woes after S&P downgraded Evergrande to Selective Default, whilst Kaisa shares slumped after trade resumed following a two-week hiatus, with the Co. in discussions regarding a debt restructuring plan. The Hang Seng dipped below 23,000 for the first time since May 2020. Elsewhere, US 10yr futures continued edging higher as APAC risk aversion supported the haven, whilst Goldman Sachs also cut its US real GDP Growth forecasts on the Build Back Better blockade. Top Asian News Coal India Defends Quality Level of Shipments After Complaints Hong Kong Eyes New Security Law After Electing Loyalist Council Asian Stocks Drop to Lowest in 13 Months on Virus Woes, Manchin Best Way for China to Lower Market Rates is to Sell Yuan: Nomura European bourses commenced the week on the backfoot, continuing the broad pressure seen in APAC trade, as focus is firmly fixed on the Omicron variant. The downside in APAC hours was also a feature of the choppy trade in the US on Friday, and amid non-COVID catalysts such as US Senator Manchin presenting a stumbling block to BBB which effectively ends the chances it can be passed this year, while hawkish central banks is also a theme traders are cognizant of for next year. Euro Stoxx 50 -1.4%, benchmarks are lower across the board as further COVID-19 restrictions are imposed/touted; thus far, the most stringent has seen the Netherlands return to lockdowns, while the likes of the UK and Germany are mulling measures. Vaccine producer Moderna (+5.5% in premarket trade) released preliminary booster data vs Omicron, which saw a modest paring of the risk-off conditions; the vaccine boosts neutralising antibody levels by 37-fold vs pre-boost levels. All sectors remain in the red however, with underperformance in those most exposed to COVID restrictions, such as Travel & Leisure, Oil & Gas and Autos. Individual movers were predominantly dictated by the broader price action; however, THG (+12.5%) is the morning’s outperformer following reports that a notable short on the name has removed its position. Meanwhile, US futures are softer across the board (ES -1.3%) ahead of a very sparse docket where focus will, as it is in European hours, centre around the fiscal narrative and COVID. On the latter, President Biden is due to speak on the situation on Tuesday, calling for individuals to get vaccinated. Top European News Johnson Appoints Truss to Key Brexit Role After Torrid Week Germany Picks Bundesbank Veteran Nagel as Central Bank Chief Czech Billionaire Family Faces Final Showdown Over Bank Merger Flashpoints That May Heal or Deepen the Lira’s Pain in 2022 In FX, the Dollar is mixed across the board, but retaining an upward bias overall amidst greater gains vs high beta, activity and cyclical currencies compared to losses against safer havens as broad risk sentiment sours on a number of factors, but mainly COVID-19. Hence, the index is holding quite firmly above 96.500 within a 96.504-680 range even though US Treasury yields are soft and the curve is marginally flatter, with traction or the Greenback coming via hawkish comments in wake of last week’s FOMC from Fed’s Waller who would not object to lifting rates as soon as tapering is done next March. Ahead, a very sparse Monday agenda only comprises November’s leading index. JPY/EUR/CHF/XAU - As noted above, risk-off positioning due to the ongoing spread of Omicron has prompted demand for the Yen, the Euro, with added momentum from bullish Eur/Gbp cross flows, plus the Franc and Gold to lesser extents. Usd/Jpy is tethered around 113.50 in response, though unhindered by imposing option expiries in contrast to last Friday and the headline pair capped by technical resistance in the form of 21 and 50 DMAs that come in at 113.77 and 113.83 respectively today. Meanwhile, Eur/Usd is back above 1.1250 amidst mixed ECB vibes as de Cos underscores guidance for no hikes in 2022, but sources say that GC hawks wanted explicit recognition of upside inflation risks and were shouted down by chief economist Lane. However, Eur/Gbp has bounced even more firmly from sub-0.8500 lows on what looks like a combination of early year end demand or RHS orders and Pound underperformance on pandemic, political and Brexit-related factors. Elsewhere, Usd/Chf is hovering mostly sub-0.9250 and Eur/Chf is pivoting 1.0400 with latest weekly Swiss sight deposits showing no sign of intervention and Gold is rotating around Usd 1800/oz after a false upside breach of Usd 1810, but not quite enough follow-through buying to scale another upside target circa Usd 1815. GBP/AUD/NZD/CAD - The major fall guys, as Sterling loses 1.3200+ status yet again on all the aforementioned negatives, and also feels some contagion from weakness in Brent, while the Aussie is straddling 0.7100, the Kiwi is trying to keep its head above 0.6700 and the Loonie contain declines through 1.2900 alongside the latest retracement in WTI. In commodities, WTI and Brent are also risk-off, moving in tandem with the equity action, on the COVID-19 narrative and implementation/prospect of further restrictions hitting the demand-side of the equation. WTI relinquishes USD 67.00/bbl and Brent gave up the USD 70.00/bbl level. In fitting the broader market move, some easing of the initial downside was seen post-Moderna’s update. Elsewhere, in crude specifics, Libya’s NOC confirmed reports that the Petroleum Facilities Guard was blocking several fields in the region; some suggest production of oil has dropped to 950k BPD due to losses of production at El Sharara field (estimated at 280k BPD). Elsewhere, OPEC+ compliance has reportedly increased marginally in November, in-fitting with the assessments in earlier sourced reports. In metals, spot gold and silver are contained on the session with little evidence of risk-off making its self-known at this point in time, with the yellow metal pivoting USD 1800/oz. Elsewhere, copper is impacted on the risk tone but offset somewhat by Chile’s President-elect Boric saying he will oppose the Dominga copper-iron mine project. US Event Calendar 10am: Nov. Leading Index, est. 0.9%, prior 0.9% DB's Jim Reid concludes the overnight wrap As we arrive at the final week before Christmas, there’s plenty of newsflow from the weekend for markets to digest this morning. In particular, there was the announcement from the US that Senator Joe Manchin of West Virginia wouldn’t be able to support the Build Back Better Bill, which has been the subject of intense negotiations over recent weeks and marks a significant blow for President Biden’s economic agenda. Meanwhile on the Covid front, there was a further ratcheting up of concerns about the Omicron variant, with the Netherlands becoming the latest European country to go back into lockdown as of yesterday, as cases continue to spread elsewhere. But otherwise, the events calendar is looking fairly quiet for now in this holiday-shortened week, with just a few lower-tier data releases and the occasional central bank speaker. We’ll start with Omicron, since that remains one of the biggest issues for markets right now and has significantly clouded the outlook moving into year-end. In a nutshell, the news over the weekend from Europe has only pointed in the direction of further restrictions across multiple countries, with the Netherlands being the most severe as a full lockdown was announced by the Prime Minister on Saturday that leaves just supermarkets and essential shops open, with even schools shut. When it comes to socialising, people will not be allowed to receive more than 2 visitors aged 13 and over per day, although over 24-26 December, New Year’s Eve and New Year’s Day, this will be raised to 4 people. Elsewhere in Europe there was a similar pattern towards tougher measures, with the Irish PM announcing on Friday evening that there would be an 8pm closing time for bars, restaurants and theatres, among others, which would last from today until January 30. Over in Spain, Prime Minister Sánchez said in a televised address yesterday that he’d be meeting with regional leaders virtually on Wednesday to look at measures for the weeks ahead. In Italy, it’s been widely reported that the government is looking at further measures to contain the spread as well, and they’re set to meet on Thursday to discuss these, whilst here in the UK, Health Secretary Javid was not ruling out further restrictions this side of Christmas. Separately in the US, President Biden is set to deliver a speech tomorrow about Covid and the steps that the administration will be taking, with Press Secretary Jen Psaki tweeting that Biden would also be “issuing a stark warning of what the winter will look like for Americans that choose to remain unvaccinated.” For those after a bit more optimism ahead of Christmas, then a couple of DB research notes out on Friday about the new variant will definitely be of interest. The first by FX Strategist Shreyas Gopal (link here) looks at London, which is the epicentre of Omicron infections in the UK, and tracks cases there against those in the South African province of Gauteng a couple of weeks back. The good news is that if the relationship is similar, then that does suggest a peak in cases soon. The other note comes from our head of rates research Francis Yared (link here) who shows that although deaths are starting to increase in South Africa, they’re currently on a much lower trajectory relative to cases compared to previous waves. An important question for markets is whether these patterns from South Africa can be extrapolated over to the advanced economies, which have much higher vaccination rates on the one hand, but also much older populations on the other, so there are factors that could push in either direction. Keep an eye out on these leading indicators from South Africa, as well as London, since they’ll have implications for what could occur in the coming weeks elsewhere. Away from Covid, the other main piece of news over the weekend came from the US, where the moderate Democratic senator Joe Manchin said that he couldn’t support the Build Back Better package that forms a key part of President Biden’s economic agenda, with much of his proposals on social programs and climate change. The news broke in an interview from Manchin on Fox News Sunday, when Manchin said “I can’t get there” when it comes to supporting the package, and follows direct negotiations that he’d been having with the president. Manchin’s support is crucial for the bill’s passage, since the Senate is split 50-50 between the Democrats and Republicans, with the Democrats having control only by virtue of Vice President Harris’ casting vote. So with zero Republican support for the package, that required every single Democratic senator on board with the proposals, giving Manchin enormous influence. A statement from White House Press Secretary Jen Psaki in response to Manchin did not sound impressed, saying that his comments “are at odds with his discussions this week with the President, with White House staff, and with his own public utterances.” It went on to say that “we will continue to press him to see if he will reverse his position yet again, to honor his prior commitments and be true to his word.” Nevertheless, Manchin’s own written statement wasn’t using the language of compromise, saying that his “Democratic colleagues in Washington are determined to dramatically reshape our society in a way that leaves our country even more vulnerable to the threats we face.” So the implication from Manchin is that Build Back Better won’t be happening this side of the mid-terms in its current form, and would require a fundamental rethink and meaningful slimming down were it to have any chance of passing. Those twin factors of further Omicron restrictions and Manchin’s announcement have weighed heavily on Asian equities overnight, with the Nikkei (-2.17%), KOSPI (-1.66%), Hang Seng (-1.44%), CSI (-0.98%) and Shanghai Composite (-0.75%) all moving lower. In India, the benchmark NIFTY is also down 10% from its peak in October, putting the index in correction territory. However, we did get a policy easing in China, with banks lowering the 1yr prime rate by -5bps to 3.8%. That move came alongside separate remarks from Bank of Japan Governor Kuroda, who said it was too early to think about policy normalisation, and that discussion should take place once inflation is closer to the 2% target. European and US equities are set to follow Asia lower later on, with futures on both the S&P 500 (-0.97%) and the DAX (-1.63%) both pointing lower this morning. And oil prices been struggling overnight as well in light of the recent virus news, with Brent Crude down -3.02% to $71.30/bbl at time of writing. Recapping last week now, and the main events were the array of central bank meetings ahead of the holidays. In the US, the Fed doubled the pace of their tapering as expected, which would bring net asset purchases to an end in mid-March, and the median dot now expects three rate hikes in 2022. By the close on Friday, Fed funds futures were pricing in a 55% chance of an initial hike by the March meeting, and an 87% chance of one by the May meeting. The ECB was then up next, and started a wind down of net PEPP purchases that are also set to finish in March next year. The ECB is cushioning the landing though, having moved to increase APP purchases until October next year after PEPP ends, following which they’ll maintain a pace of €20bn a month until shortly before liftoff. The ECB maintained some policy optionality through flexibility on PEPP reinvestments, which our Europe economists read as a commitment to smoothing the transmission of monetary policy. In the UK, the BoE hiked Bank Rate by +15bps to 0.25%. The MPC noted the decision was finely balanced due to Covid uncertainty, but the vote was still 8-1 in favour of a hike. Over in Japan, the BoJ rounded out the major DM central bank meetings, keeping rates unchanged and announcing a slow reduction in corporate debt holdings. At the same time, they extended a special covid loans program targeted at small and medium-sized firms to September 2022. When all was said and done, many sovereign bond yields actually ended the week lower, even with the hawkish pivot from the various central banks. 10yr yields on Treasuries (-8.2bps) and bunds (-3.1bps) both declined, although those on gilts did post a small +1.7bps gain over the week. Meanwhile growing Covid pessimism served to dampen risk appetite and send global equity indices lower last week. By Friday the S&P 500 (-1.94%) had fallen for the 3rd week out of the last 4, hampered by an underperformance from tech stocks that saw the NASDAQ (-2.95%) and the FANG+ index (-4.53%) both lose significant ground. Over in Europe the moves were smaller, albeit still lower, and the STOXX 600 ended the week -0.35%.   Tyler Durden Mon, 12/20/2021 - 08:02.....»»

Category: blogSource: zerohedgeDec 20th, 2021

The SEC could be the last, best hope to keep members of Congress from insider trading. The agency already has one Republican senator on its radar.

The agency's investigation of Sen. Richard Burr presents a test of the SEC's appetite for keeping members of Congress from insider trading. Rebecca Zisser/InsiderSen. Richard Burr of North Carolina is the subject of an investigation by the Securities and Exchange Commission.Anna Moneymaker/Getty Images Some experts see the SEC as the agency best suited to police insider trading by members of Congress. It is investigating GOP Sen. Richard Burr and his brother-in-law over a stock sell-off. Burr has faced scrutiny over whether he dumped shares based on an intelligence briefing. It was the STOCK Act's moment in the sun.Days before the coronavirus pandemic gripped the United States and sent markets crashing, Sen. Richard Burr sold off a significant portion of his stocks, raising suspicion that he was trading based on inside information gleaned from daily intelligence briefings. The Justice Department opened a criminal investigation into whether Burr violated a law known as the Stop Trading on Congressional Knowledge, or STOCK, Act. After months of work, the department closed the case without bringing charges against the Republican senator from North Carolina. The US Senate Select Committee on Ethics, meanwhile, has taken no public action against Burr.But Burr is not entirely cleared. Almost a year later, another enforcement agency — the Securities and Exchange Commission — continues to pursue him on civil grounds.The SEC's investigation presents a test of the agency's appetite for enforcing the STOCK Act, a 2012 law designed to defend against conflicts of interest and force lawmakers to become more transparent about their personal finances.But federal authorities have never prosecuted a federal lawmaker under the STOCK Act, and lawmakers have serially ignored the law's requirement to disclose their personal stock trades within 30 to 45 days of them being made.Gary Gensler has been chairman of the Securities and Exchange Commission since April.Yuri Gripas/ReutersThe SEC is independent, but it can only do so muchIn interviews, former SEC and congressional staffers said the SEC has certain advantages over the Justice Department that could position it as the enforcement muscle behind the STOCK Act. Foremost, while the Justice Department has a tradition of independence, it nonetheless exists within an executive branch led by either a Republican or Democratic president.The SEC's status as an independent commission, with seats divided between Democratic and Republican appointees, could therefore protect it from criticism that cases are politically motivated. And the commission has decades of experience monitoring markets for unusual activity and bringing insider-trading cases."The SEC understands how the financial markets work and, frankly, has a lot of expertise in bringing insider-trading cases," said Tyler Gellasch, a former Senate aide who helped draft the STOCK Act. "It also helps that the SEC is an independent agency, so its actions are often viewed as more cautious, and less overtly partisan."An SEC spokesperson declined to comment.Still, hurdles abound for any law-enforcement agency in the policing of elected lawmakers' financial trading.In the Burr investigation, the Justice Department ran into novel legal issues surrounding the communications of lawmakers. For example, when the Justice Department seized Burr's cellphone, it needed to navigate around restrictions raised by the Constitution's speech or debate clause, which broadly shields lawmakers from scrutiny over legislative activity.The SEC is nevertheless pressing ahead. The commission went to federal court in Manhattan to force Burr's brother-in-law Gerald Fauth to sit for an investigative interview. According to an SEC filing, Burr called Fauth after selling off more than $1.6 million in stock. After 50 seconds on the phone, Fauth called his broker and dumped his own stock, the filing shows.Fauth sat for the interview in late November.Proving insider trading 'gets sticky'In the face of the Justice Department investigation, Burr said he based his trading on publicly available information about the emerging coronavirus, such as news reports from CNBC. His case underscores how investigators can struggle to decipher when information — from a briefing or other closed-door setting — reaches the point of providing a degree of material, nonpublic detail that could lead to insider trading."Where it gets sticky is when the member of Congress has additional information that is not known to the public, that is more specific, and that a reasonable investor would want to know. And what the Burr case illustrates is the difficulty for the government of distinguishing between information that is, in some respects, public and, in other respects, not," said Daniel Hawke, a partner at the law firm Arnold & Porter and former chief of the SEC's market-abuse unit.Hawke noted that the political sphere also features a wider exchange of information that would make it difficult for the SEC or another law-enforcement agency to draw a connection between a lawmaker's stock trade and inside information. For the SEC, it's not as simple as monitoring the trading around the time of a business move such as a merger or acquisition.Unlike an M&A context, "where maybe only a handful of people working on a deal actually know what's going on, one of the challenges on the Hill is that it's an information exchange," Hawke said. "Information is being received and disseminated constantly. Figuring out how to surveil that, how to determine what information is significant and what information isn't — that's very difficult and time-consuming, and takes a lot of manual effort." The STOCK Act only goes so farWhile independent, the SEC also faces a real political dilemma when investigating a member of Congress.In 2019, former Rep. Chris Collins, a Republican from New York, pleaded guilty to insider trading and reached a settlement with the SEC resolving charges that he tipped his son off to negative trial results for a pharmaceutical drug. A federal judge later sentenced Collins to more than two years in prison, but then-President Donald Trump pardoned him in December 2020. The STOCK Act didn't come into play in Collins' case because he learned of the negative trial results in his capacity as a member of the drug company's board, not as a member of Congress. The House and Senate have oversight powers over the agency and regularly summon the SEC leadership to appear at committee hearings. SEC Chair Gary Gensler testified before the House Committee on Financial Services in October.The SEC also relies on congressionally authorized funds for its annual budget, meaning that any investigation into a lawmaker is inherently an inquiry into the commission's appropriators.For government-ethics advocates, that state of affairs has revealed how Congress failed — perhaps by its own choosing — to set up a robust enforcement regime for the STOCK Act.The answer, advocates said, is to prohibit lawmakers from trading stocks while serving in Congress."That's the serious way to do this," said Meredith McGehee, a government ethics expert who lobbied on the STOCK Act."Everything else is a Band-Aid."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 15th, 2021

Despite promises, Biden has yet to issue a single pardon, leaving reformers depressed and thousands incarcerated

President Biden has the unchecked power to grant clemency to any federal prisoner. But he hasn't used it. US President Joe Biden participates in the 74th annual Thanksgiving turkey pardon of Peanut Butter in the Rose Garden of the White House November 19, 2021 in Washington, DC.Alex Wong/Getty Images Presidents have the sweeping ability to commute sentences, immediately freeing any federal prisoner. They can also grant pardons, which erase a criminal conviction from a person's record. But Biden, like others before him, has been hesitant to use the power early on in his presidency. At this point in his presidency, Joe Biden has pardoned just two sentient beings: Peanut Butter and Jelly, 40-pound turkeys from Jasper, Indiana.Former President Donald Trump, by contrast, had pardoned three: a pair of flightless birds and Joe Arpaio, the ex-Arizona sheriff known for illegally detaining Latinos.Over the past three decades, that's pretty much been the norm, regardless of which political party claims the White House. Presidents Bill Clinton, Barack Obama, and George W. Bush all waited until at least their second year in office before granting clemency to a human being.That's not because there is a dearth of potential candidates. As of October 2021, the Department of Justice had just under 17,000 pending petitions for clemency, up from 15,000 around the time of the 2020 election.The problem, critics say, is one of urgency, or the lack thereof."Just because that's what the situation has been doesn't mean that's how it has to be," Nkechi Taifa, an attorney, activist, and leader of the progressive Justice Roundtable, said in an interview. "Where there's a will there's a way."President Joe Biden has a meeting in the Roosevelt Room of the White House on Nov. 15, 2021.AP Photo/Susan WalshThat's the message Taifa delivered to the Biden White House. In an early December meeting with Susan Rice, director of the Domestic Policy Council, and staff from the Office of the White House Counsel, she implored the administration to act now.More than 7,700 federal inmates are currently on home confinement, granted release from prison on the grounds that they pose no security threat and are at a heightened risk of suffering severe complications from COVID-19. When the public health emergency is declared over, they could be forced to return. Leading Democrats, including Senate Whip Dick Durbin of Illinois, have argued it would be an injustice to send them back, urging the White House to consider granting clemency en masse.In the meeting, White House staff appeared to agree, Taifa said. That's not the problem."Their rhetoric says that they understand what we're saying, and that they're working on it," she said. The issue is the conversation is taking place in December."If it's going to take this long for a first step, how long is it going to take for the rest?"A 'bureaucratic morass' to wade throughBiden has never been a favorite of those advocating criminal justice reform.In the 2020 primaries, he was arguably the most conservative Democrat running for his party's nomination. But he was also not the same man who, as a senator from Delaware, helped author legislation that put many people behind bars for nonviolent drug offenses.On his campaign website, Biden promised to use his clemency power, like Obama, "to secure the release of individuals facing unduly long sentences for certain non-violent and drug crimes."But others pledged to go further. Minnesota Sen. Amy Klobuchar, a former prosecutor, proposed a new clemency advisory board that could issue recommendations directly to the White House, bypassing what is currently a seven-step process.Democratic presidential candidates Sen. Elizabeth Warren, D-Mass., Sen. Bernie Sanders, I-Vt., former Vice President Joe Biden, former South Bend Mayor Pete Buttigieg, and Sen. Amy Klobuchar, D-Minn., participate in a Democratic presidential primary debate in Las Vegas on Feb. 19, 2020.AP Photo/John Locher"What we've got is this bureaucratic morass," Mark Osler, a former federal prosecutor, said in an interview. "There's seven levels of review, one after the other, and the first four levels are all in the Department of Justice, which of course is conflicted because they're the ones who sought the sentence in the first place."The first step is the Office of the Pardon Attorney, which is currently led, on an acting basis, by Rosalind Sargent-Burns, a career department lawyer former Attorney General William Barr appointed. They then present their recommendations on who should get clemency to the deputy attorney general's office, where another staffer reviews it and passes it on — maybe — to their boss. Then it goes to the staff for the White House counsel, then the actual counsel, then an aide to the president and then, if all goes well, to Biden himself.The president could, at any time, bypass this process. Trump did when he pardoned Arpaio and his other allies, such as Roger Stone and Steve Bannon.If anything, Osler, now a professor at the University of Saint Thomas, told Insider he thinks Biden is too committed to the way things were. It's one thing to respect the Justice Department's career bureaucracy when it comes to deciding who deserves prosecution but, he said, "it doesn't make sense in terms of clemency."A White House official told Insider the president is "exploring the use of his clemency power" for non-violent drug offenders who were moved to home confinement at the start of the pandemic, a transfer authorized by the March 2020 CARES Act — specifically, those with fewer than four years left on their sentences (one activist who has engaged the White House expects those with less than two years remaining will also be excluded)."At the same time," the official said, Biden "continues to consider requests for pardon and commutation that are submitted in the ordinary course."That's not exactly what reformers want to hear. While Obama granted clemency to more than 1,900 people — compared to just 200 under George W. Bush and 238 under Trump — the byzantine process for requesting one's freedom, "the ordinary course," means many more deserving cases likely never reach the president's desk for consideration.The American Civil Liberties Union has called on Biden to immediately grant clemency to 25,000 people, namely those serving sentences longer than those handed out today, nonviolent drug offenders, and the elderly."If it's unjust at the end of the term," when presidents typically wait to grant pardons, "it's unjust during the entire term," Cynthia Roseberry, deputy director at the ACLU's national policy advocacy department, told Insider.She argued that it would be a failure if the administration tried to achieve its stated goals — of racial justice and correcting past wrongs — by relying on prosecutors and judges who sent people to prison to co-sign petitions for release."Justice hasn't been done under that draconian system, and we can't expect justice from that kind of system going forward," she said. "It has to be radically changed."The Department of Justice declined to comment on how many petitions for clemency have received favorable recommendations within the department or have been referred to the White House. It is impossible to say for sure, then, how much the delay in granting pardons is due to bureaucracy or stalling by political actors.But sticking with the opaque status quo is itself a political decision — the president could unilaterally discard it — and it's a disappointment, if not a surprise, to people like Osler. He's not expecting big things."I haven't heard anything from the administration that gives me hope," he said.Reform, deniedIn 2020, there appeared to be a new consensus.Joe Biden greets Sen. Bernie Sanders before the Democratic presidential primary debate in Des Moines, Iowa, on January 14, 2020.Scott Olson/Getty ImagesA "unity" task force composed of Biden supporters and those backing Sen. Bernie Sanders of Vermont issued a report endorsing the creation of a independent board to recommend pardons, saying it would "ensure an appropriate, effective process for using clemency, especially to address systemic racism." The call also made it into the Democratic Party platform.But it didn't make it into the president's agenda. Respect for institutions, however slow and flawed, is one explanation. Bureaucracy could also explain the lack of pardons. It's not clear where in the process the 17,000-odd petitions for clemency are — if they are sitting on the president's desk or in a cabinet somewhere else in the White House or Department of Justice.The fear of political fallout could be another reason. Reports of someone who received a presidential pardon going on to commit a serious crime are extremely rare. But if it happens, that's a television ad; the benefits of mercy toward those who go on to lead quiet lives in obscurity are perhaps less obvious.The current political environment at least raises the question. Since the start of the pandemic, major cities in the US, red state and blue state alike, have seen an uptick in violent crime. Daring instances of smash-and-grab robberies have gone viral. And the opposition party has been eager to pin blame on the White House, despite the trend beginning under its previous inhabitant."It's less about the review process and more about power," Jeffrey Crouch, an expert on federal clemency at American University, told Insider. New presidents are, of course, focused on passing the big-ticket items in their agenda — think infrastructure and "building back better."They "may want to avoid potential controversy before a midterm election," Crouch added.Kermit Roosevelt, a law professor at the University of Pennsylvania, likewise thinks pardons are a victim of competing priorities, and not something that a new administration wants leading the news cycle."Some pardons are probably politically popular," he said, "but many of them don't actually look that good, which is why presidents tend to issue a lot just before leaving office."The vast majority of pardons, in fact, are uncontroversial. No one, for example, criticized Trump when he granted clemency to Alice Marie Johnson, a Black woman in her 60s who had already served two decades behind bars for a nonviolent drug offense.U.S. President Donald Trump signs a document as Alice Johnson looks on during an event in the Oval Office of the White House August 28, 2020 in Washington, DC.Anna Moneymaker/Pool/Getty ImagesBut it is the "bad" pardons — of political allies, be they Trump's former aides or, under Clinton, Democratic donor Marc Rich — that tend to stick out.The president's unique, unchecked power to commute sentences and free the imprisoned could, then, be seen as a potential liability with little upside.But fear is not typically a good basis for policy."I think it reflects an outdated view of the clemency power as something politically risky," Ames Grawert, senior counsel at the Brennan Center's Justice Program, told Insider.There may always be demagoguery associated with incarceration, but in recent years there has been increasing bipartisan agreement that too many people have been locked up for too long. Indeed, thousands of federal prisoners are serving sentences that would not be handed out today thanks to 2018 reform legislation that Trump signed into law."I understand the fear of backlash for perceived leniency — as if any tampering with the federal system, which is excessively punitive through and through — would be 'lenient' vs. 'just,'" Grawert said, "but I don't know if there's a constituency for that."'I pretty much lost all hope'On the surface, an article The New York Times published last May was a victory for reformers."Biden Is Developing a Pardon Process With a Focus on Racial Justice," the headline asserted, and this was the substance: that the president would begin to aggressively employ the power of his office ahead of the 2022 midterm elections — "identifying entire classes of people who deserve mercy."But to Rachel Barkow, a vice dean and law professor at New York University who is one of the nation's leading advocates of clemency reform, the piece was anything but inspiring."It was kind of the death knell," she said in an interview. "There were so many red flags that this was going to be a disaster that I pretty much lost all hope then."For starters, the piece said the Biden administration would continue to "rely on the rigorous application vetting process" at the Department of Justice. That process was established, in part, not by the US Constitution — which does not mention it at all — but by former President Ronald Reagan, whose administration issued strict guidelines on who is even eligible to ask for reprieve.From left: Donald Trump, Bill Clinton, Joe Biden, George Bush, and Barack Obama.Mandel NGAN/AFP via Getty; Ben Gabbe/Getty Images for Common Sense Media; Win McNamee/Getty; Nathan Congleton/NBC/NBCU Photo Bank via Getty; Scott Olson/Getty; Shayanne Gal/InsiderWhat the White House is calling "the ordinary course" was, Barkow said, an "historical accident." And not a best practice."No state does this," she said. "'Ordinary course' is not that you ask the same prosecutors who brought a case, 'Should this person now get clemency?' No one in their right mind would set clemency up that way."Every administration deals with competing priorities, and Biden, objectively, was dealt a bad hand, inheriting an economy still struggling to recover from a pandemic that continues to kill more than a thousand Americans every day. And his agenda is constrained by a slim Democratic majority in the House and a 50-50 Senate.But that's also why people like Barkow are so disappointed.They're passionate about freeing those they see as unjustly incarcerated, but they are not simply naive idealists, unaware of political realities. Clemency is an area where Biden can act alone and immediately improve lives. Democrats may feel constantly on the defensive over issues of criminal justice, but none other than Trump saw clemency as such a feel-good winner that his campaign ran a Super Bowl ad telling the story of one woman he freed from prison."Anyone who has spent any time with people who are incarcerated, with their loved ones, who have talked with people who were formerly incarcerated, would get the urgency of this," Barkow said. "You wouldn't be able to sleep at night."But there doesn't appear to be urgency at the White House.So far, roughly 1,200 petitions for pardons or commutations have been closed "without presidential action," per the Department of Justice. Each day, loved ones are separated due to policies that the current president helped shape, which he now says were mistaken — contributors to racial injustice — and which he has thus far declined to ameliorate."It's very depressing," Barkow said. "I think it's words on paper," she said of the administration's talk of change."It's just not really something that they're feeling in their bones. And as a result, it's not getting done."Have a news tip? Email this reporter: cdavis@insider.comRead the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 8th, 2021

Futures Flat Ahead Of Taper Accelerating Payrolls

Futures Flat Ahead Of Taper Accelerating Payrolls U.S. equity futures are flat, rebounding from an overnight slide following news that 5 "mild" Omicron cases were found in New York, and European stocks wavered at the end of a volatile week as traders waited for the latest jobs data to assess the likely pace of Federal Reserve tightening and accelerated tapering. Emini S&P futures traded in a narrow range, and were up 2 points or 0.04%, Nasdaq futures were flat,while Dow Jones futures were up 8 points. The dollar edged higher, along with the euro after ECB President Christine Lagarde said inflation will decline in 2022. Crude advanced after OPEC+ left the door open to changing the plan to raise output at short notice. S&P 500 and Nasdaq 100 contracts fluctuated after dip-buyers Thursday fueled the S&P 500’s best climb since mid-October, a sign that some of the worst fears about the omicron virus strain are dissipating. That said, concerns about omicron are overshadowing economic news for now with “a lot of noise and very little meaningful information,” said Geir Lode, head of global equities at Federated Hermes in London. “The prospect of a faster monetary policy tightening could -- and should probably -- lead to a clear market reaction,” he said. “It is also another argument for why we assume value stocks outperform growth stocks. At the moment, however, investors’ attention is elsewhere.” In the latest U.S. data, jobless claims remained low, suggesting additional progress in the labor market. Traders are awaiting today's big event - the November payrolls numbers, which could shape expectations for the pace of Fed policy tightening (full preview here). Bloomberg Economics expects a strong report, while the median estimate in a Bloomberg survey of economists predicts an increase of 550,000. “Assuming the omicron news remains less end-of-the-world, a print above 550,000 jobs should see the faster Fed-taper trade reassert itself,” Jeffrey Halley, a senior market analyst at Oanda, wrote in a note. “That may nip the equity rally in the bud, while the dollar and U.S. yields could resume rising.” In premarket trading, Didi Global Inc. jumped more than 14% in U.S. premarket trading before reversing all gains, after the Chinese ride-hailing giant said it began preparations to withdraw from U.S. stock exchanges. U.S. antitrust officials sued to block chipmaker Nvidia’s proposed $40 billion takeover of Arm, saying the deal would hobble innovation and competition. Elon Musk’s offloading of Tesla Inc. shares surpassed the $10 billion mark as he sold stock in the electric-car maker for the fourth consecutive week. Here are some of the other biggest U.S. movers today: DocuSign (DOCU US) plunges 32% in premarket trading as the e-signature company’s quarterly revenue forecast missed analysts’ estimates. JPMorgan and Piper Sandler cut ratings. Marvell Technology (MRVL US) shares rise 18% in premarket after the semiconductor company’s fourth-quarter forecast beat analyst estimates; Morgan Stanley notes “an exceptional quarter” with surprising outperformance from enterprise networking, strength in 5G and in cloud. Asana (ASAN US) shares slump 14% in premarket trading after results, with KeyBanc cutting the software firm’s price target on a reset in the stock’s valuation. Piper Sandler said that slight deceleration in revenue and billings growth could disappoint some investors. Zillow Group (ZG US) shares rise 8.8% in premarket after the online real-estate company announced a $750 million share repurchase program and said it has made “significant progress” on Zillow Offers inventory wind- down. Stitch Fix (SFIX US) jumped in premarket after Morgan Stanley raised its rating to equal-weight from underweight. Smartsheet (SMAR US) rose in postmarket trading after the software company boosted its revenue forecast for the full year; the guidance beat the average analyst estimate. National Beverage Corp. (FIZZ US) gained in postmarket trading after the drinks company announced a special dividend of $3 a share. Ollie’s Bargain (OLLI US) plunged 21% in U.S. premarket trading on Friday, after the company’s quarterly results and forecast disappointed, hurt by supply-chain troubles. Smith & Wesson Brands (SWBI US) stock fell 15% in postmarket trading after adjusted earnings per share for the second quarter missed the average analyst estimate. In Europe, the Stoxx Europe 600 Index slipped as much as 0.2% before turning green with mining companies and carmakers underperforming and energy and utility stocks rising. Swedish Orphan Biovitrum AB fell as much as 26% after private-equity firm Advent International and Singapore wealth fund GIC abandoned their $7.6 billion bid to buy the drugmaker. Volatility across assets remains elevated, reflecting the Fed’s shift toward tighter monetary settings and uncertainty about how the omicron outbreak will affect global reopening. The hope is that vaccines will remain effective or can be adjusted to cope. New York state identified at least five cases of omicron, which is continuing its worldwide spread, while the latest research shows the risk of reinfection with the new variant is three times higher than for others. “The environment in markets is changing,” Steven Wieting, chief investment strategist at Citigroup Private Bank, said on Bloomberg Television. “Monetary policy, fiscal policy are all losing steam. It doesn’t mean a down market. But it’s not going to be like the rebound, the sharp recovery that we had for almost every asset in the past year.” Earlier in the session, Asian stocks held gains from the past two days as travel and consumer shares rallied after their U.S. peers rebounded and a report said Merck & Co. is seeking to obtain approval of its Covid-19 pill in Japan. The MSCI Asia Pacific Index was little changed after climbing as much as 0.3%, with Japan among the region’s best performers. South Korea’s benchmark had its biggest three-day advance since February, boosted by financial shares. Still, Asian stocks headed for a weekly loss as U.S. regulators moved a step closer to boot Chinese firms off American stock exchanges. The Hang Seng Tech Index slid as much as 2.7% to a new all time low, as Tencent Holdings and Alibaba Group Holding fell after Didi Global Inc. began preparations to withdraw its U.S. listing.  “While the risks of delisting have already been brought up previously, a step closer towards a final mandate seems to serve as a reminder for the regulatory risks in Chinese stocks,” said Jun Rong Yeap, a market strategist at IG Asia Pte. Asian stocks remain stuck near a one-year low, as the delisting issue damped sentiment already hurt by omicron and the Fed’s hawkish pivot. A U.S. payrolls report later today could give further clues on the pace of tightening Japanese equities rose, paring their weekly loss, helped by gains in economically sensitive names. Electronics makers reversed an early loss to become the biggest boost to the Topix, which gained 1.6%. Automakers and banks also gained, while reopening plays tracked a rebound in U.S. peers. Daikin and Recruit were the largest contributors to a 1% gain in the Nikkei 225, which erased a morning decline of as much as 0.6%. The Topix still dropped 1.4% on the week, extending the previous week’s 2.9% slide, amid concerns over the omicron coronavirus variant. Despite some profit-taking in tech stocks in the morning session, “the medium and long-term outlooks for these names continue to be really good,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities. “The spread of the omicron variant doesn’t mean an across-the-board selloff for Japanese stocks.” India’s benchmark equity index recorded a weekly advance, partly recovering from a sharp sell-off triggered by uncertainty around the new Covid variant, with investors focusing on the central bank’s monetary policy meeting from Monday.  The S&P BSE Sensex fell 1.3% to 57,696.46, but gained 1% for the week after declining for two weeks. The NSE Nifty 50 Index dropped 1.2%, the biggest one-day decline since Nov. 26. All but three of the 19 sector sub-indexes compiled by BSE Ltd. fell, led by a gauge of energy companies. “The focus seems to be shifting from premium Indian equities to relatively cheaper markets,” Shrikant Chouhan, head of retail equity search at Kotak Securities said in a note. The cautious mood in India was heightened by the “unenthusiastic” response to the IPO of Paytm, which was also the biggest public share sale in the country, and a resurgence of Covid concerns across Europe, he added.  Investors also focused on the country’s economic outlook, which is showing signs of improvement. Major data releases this week -- from economic expansion to tax collection -- showed robust growth. “Strong domestic indicators are playing a key role in driving the market amid negative global cues,” said Mohit Nigam, a fund manager with Hem Securities. But any further spread of the omicron strain in India may cap local equity gains, he said. Two cases of the new variant have been detected so far in the country. The market’s attention will shift to the Reserve Bank of India’s policy announcement on Dec. 8, after a three-day meeting from Monday. The panel is expected to leave record low interest rates unchanged as inflation remains within its target range. The economy faces new risks from the omicron variant after expanding 8.4% in the three months through September. Reliance Industries contributed the most to the Sensex’s decline, falling 3%. Out of 30 shares in the index, 26 fell and 4 gained. Australia stocks posted a fourth week of losses amid the Omicron threat even as the S&P/ASX 200 index rose 0.2% to close at 7,241.20, boosted by banks and miners. That trimmed the benchmark’s loss for the week to 0.5%, its fourth-straight weekly decline.  Corporate Travel was among the top performers, rising for a second session. TPG Telecom led the laggards, tumbling after media reports that founder David Teoh entered into an agreement to sell about 53.1 million shares in a block trade.  In New Zealand, the S&P/NZX 50 index was little changed at 12,676.50. In FX, the Bloomberg Dollar Spot Index advanced and the greenback was higher against all of its Group-of-10 peers, with risk-sensitive Scandinavian and Antipodean currencies the worst performers. Turkish lira swings back to gain against the USD after central bank intervention for the 2nd time in 3 days. The pound weakened and gilt yields fell after Bank of England policy maker Michael Saunders urged caution on monetary tightening due to the potential effects of the omicron variant on the economy. The euro fell below $1.13 and some traders are starting to use option plays to express the view that the currency may extend its drop in coming month, yet recover in the latter part of 2022. The Aussie dropped for a fourth day amid concern U.S. payroll data due Friday may add to divergence between RBA and Fed monetary policy. Australia’s sale of 2024 bonds saw yields drop below those in the secondary market by the most on record. The yen weakened for a second day as the prospects for a faster pace of Fed tapering fans speculation of portfolio outflows from Japan. In rates, Treasury yields ticked lower, erasing some of Tuesday jump after Fed officials laid out the case for a faster removal of policy support amid high inflation.  Treasurys followed gilts during European morning, when Bank of England’s Saunders said the omicron variant is a key consideration for the December MPC decision which in turn lowered odds of a December BOE rate hike. Treasury yields are richer by up to 1.5bp across 10-year sector which trades around 1.43%; gilts outperform by ~1bp as BOE rate- hike premium for the December meeting was pared following Saunders comments. Shorter-term Treasury yields inched up, and the 2-year yield touched the highest in a week Friday’s U.S. session features a raft of data headed by the November jobs report due 8:30am ET where the median estimate is 550k while Bloomberg whisper number is 564k; October NFP change was 531k Crude futures extend Asia’s modest gains advanced after OPEC+ proceeded with an output hike but left room for quick adjustments due to a cloudy outlook, making shorting difficult. WTI added on ~2.5% to trade near $68.20, roughly near the middle of the week’s range. Brent recovers near $71.50. Spot gold fades a small push higher to trade near $1,770/oz. Most base metals are well supported with LME aluminum and zinc outperforming.  Looking at the day ahead, and the aforementioned US jobs report for November will be the highlight. Other data releases include the services and composite PMIs for November from around the world, Euro Area retail sales for October, and in addition from the US, there’s October’s factory orders and the November ISM services index. From central banks, we’ll hear from ECB President Lagarde and chief economist Lane, the Fed’s Bullard and the BoE’s Saunders. Market Snapshot S&P 500 futures little changed at 4,574.25 STOXX Europe 600 up 0.2% to 466.43 MXAP little changed at 192.06 MXAPJ down 0.5% to 625.64 Nikkei up 1.0% to 28,029.57 Topix up 1.6% to 1,957.86 Hang Seng Index little changed at 23,766.69 Shanghai Composite up 0.9% to 3,607.43 Sensex down 1.3% to 57,692.90 Australia S&P/ASX 200 up 0.2% to 7,241.17 Kospi up 0.8% to 2,968.33 Brent Futures up 3.3% to $71.97/bbl Gold spot down 0.1% to $1,767.28 U.S. Dollar Index up 0.14% to 96.29 German 10Y yield little changed at -0.37% Euro down 0.1% to $1.1286 Top Overnight News from Bloomberg “I see an inflation profile which looks like a hump” and “we know how painful it is,” ECB President Christine Lagarde says at event Friday. She also said that “when the conditions of our forward guidance are satisfied, we won’t be hesitant to act” and that an interest rate increase in 2022 is very unlikely The betting window is open in the fixed-income market as hedge funds and other traders hunt for mispriced risk heading into 2022 -- whether it’s predictions for accelerating inflation or rising interest rates The U.K. Municipal Bonds Agency aims to sell the first ethical bonds on behalf of local governments early next year. The body, set up to help U.K. councils access capital markets, is looking to issue a couple of sustainable bonds in the first quarter of 2022, according to officials advising on the sales. It expects to follow that with a pooled ethical bond to raise money for a group of different local authorities Low- income countries indebted to Chinese commercial and policy banks could buy specially-created Chinese government bonds and then use these as collateral to support the sale of new yuan debt, Zhou Chengjun, head of the People’s Bank of China’s finance research institute, wrote in an article published in the ChinaBond Magazine Chinese tech shares briefly touched their record lows in Hong Kong, as Didi Global Inc.’s announcement to start U.S. delisting and rising scrutiny on mainland firms traded there dealt a further blow to already soured sentiment The yuan is set to weaken for the first time in three years in 2022, as capital inflows are expected to slow amid a shrinking yield gap between China and the U.S., a Bloomberg survey shows Turkish inflation accelerated for a sixth month in November to the highest level in three years, driven by a slump in the lira that continues to cloud consumer price outlook A more detailed look at global markets courtesy of Newsquawk Asian equities eventually traded mostly higher following the cyclical-led rebound in the US, but with the mood in the region tentative as Omicron uncertainty lingered after further cases of the new variant were reported stateside and with the latest NFP data drawing near. ASX 200 (+0.2%) lacked direction as resilience in cyclicals was offset by underperformance in defensives and amid ongoing COVID-19 concerns which prompted the Western Australian government to widen its state border closure to include South Australia. Nikkei 225 (+1.0%) was initially subdued amid recent currency inflows and with SoftBank among the worst performers amid several negative headlines including the FTC suing to block the Nvidia acquisition of Arm from SoftBank, while the Japanese conglomerate also suffered from its exposure in “super app” Grab which tumbled 20% in its New York debut and with Didi to start delisting from the NYSE in favour of a Hong Kong listing, although the index eventually recovered losses in latter half of trade. Hang Seng (-0.1%) and Shanghai Comp. (+0.9%) were varied with US-listed Chinese companies pressured as the US SEC moved closer to delisting Chinese ADRs for failing to comply with disclosure requirements, while the mood across developers was also glum with Kaisa shares at a record low after its bond exchange offer to avert a default was rejected by bondholders and China Aoyuan Property Group slumped by double-digit percentages following its warning of an inability to repay USD 651.2mln of debt due to a liquidity crunch. Furthermore, participants digested the latest Caixin Services and Composite PMI data which slowed from the prior month, but both remained in expansion territory and with reports that advisors are to recommend lowering China’s economic growth target to 5.0%-5.5% or above 5%, fanning hopes for looser policy. Finally, 10yr JGBs gained and made another incursion above 152.00 with prices supported amid the cautious mood in Japan and with the BoJ also present in the market today for a total of JPY 1.05tln of JGBs heavily concentrated in 1yr-5yr maturities. Top Asian News Astra Said to Sink Advent’s $7.6 Billion Buyout of Biotech Sobi BOJ Is Said to See Omicron as Potential Reason to Keep Covid Aid Kaisa Swap Rejected, Developer Bonds Slide: Evergrande Update Permira Is Said to Near Deal for U.K. Blood Plasma Lab BPL The positivity seen heading into the European open dissipated as the session went underway, with the region seeing more of a mixed configuration in cash markets (Euro Stoxx 50 -0.1%; Stoxx 600 Unch) – with no clear drivers in the run-up to the US jobs report. The release will be carefully watching measures of labour market slack to gauge the progress towards the Fed's 'three tests' for rate hikes, whilst the Fed appears almost certain to announce a quickening in the pace of asset purchase tapering at its December meeting (Full NFP preview available in the Newsquawk Research Suite). The recent downside in Europe also seeps into the US futures, with the RTY (-0.2%), NQ (-0.2%) and ES (-0.3%) posting broad-based losses as things stand. Sectors have shifted from the earlier firm cyclical layout to one of a more defensive nature, with Healthcare, Food & Beverages, and Personal & Household Goods making their way up the ranks. Travel & Leisure still sits in the green but largely owed to sector heavyweight Evolution (+6.3%) as the group is to acquire its own shares in Nasdaq Stockholm. Oil & Gas sits as the current winner as crude markets claw back a bulk of this week's losses. On the flip side, Basic Resources are hit as iron ore tumbled overnight. In terms of individual movers, Dassault Aviation (+8.0%) shares soared after France signed a deal with the UAE worth some EUR 17bln. Allianz (+1.0%) stays in the green after entering a reinsurance agreement with Resolution Life and affiliates of Sixth Street for its US fixed index annuity portfolio, with the transaction to unlock USD 4.1bln in value. Top European News U.K. Nov. Composite PMI 57.6 vs Flash Reading 57.7 The Chance of a BOE Rate Hike This Month Has Fallen: BofA’s Wood AP Moller Holding Agrees to Buy Diagnostics Company Unilabs Permira Is Said to Near Deal for U.K. Blood Plasma Lab BPL In FX, it’s debatable whether this month’s US jobs data will carry as much weight as normal given that Fed rhetoric in the run up to the pre-FOMC blackout period has effectively signalled a faster pace of tapering and the likelihood of more hawkishly aligned dot plots. However, the latest BLS report could be influential in terms of shaping the tightening path once QE has been withdrawn, as markets continue to monitor unfolding COVID-19 developments with the main focus on vaccine efficacy against the new Omicron variant. In the meantime, Buck bulls have resurfaced to lift the index more firmly back above 96.000 and towards loftier levels seen earlier this week within a 96.075-324 range, eyeing Monday’s 96.448 peak ahead of the semi-psychological 96.500 mark and then the w-t-d best at 96.647 set the day after. Back to Friday’s agenda, Fed’s Bullard is due to speak and the services ISM rounds off the week. AUD/NZD - The high betas are bearing the brunt of Greenback gains, but also bearish technical forces as the Aussie and Kiwi both lose sight of key chart and simple round number levels that were keeping them afloat or declines relatively contained at least. Aud/Usd is now probing 0.7050 and a Fib retracement just above, while Nzd/Usd is hovering around 0.6775 as the Aud/Nzd cross holds in the low 1.0400 zone. JPY/CAD/CHF/GBP/EUR - All softer vs their US counterpart, with the Yen looking towards 113.50 for support with added protection from option expiry interest up to 113.60 in 1.1 bn, while the Loonie is relying on WTI to maintain recovery momentum before Canada and the US go head-to-head in the employment stakes. Usd/Cad is meandering in the low 1.2800 area as the crude benchmark regains Usd 68+/brl status from a sub-Usd 66.50 base and even deeper trough below Usd 62.50 in knee-jerk response to OPEC+ sticking to its output plan yesterday. Elsewhere, the Franc continues to straddle 0.9200, Sterling has retreated from 1.3300+ terrain again post-fractionally softer than forecast final UK services and composite PMIs, whilst a less hawkish speech from BoE hawk Saunders took Cable to a session low of 1.3255 and a 15bps Dec hike pricing fell from 51% to 26%. The Euro has also reversed from recent highs beyond 1.1300 amidst rather mixed Eurozone readings and pretty routine ECB rhetoric from President Lagarde plus GC members Knot, de Cos and de Guindos. In commodities, WTI and Brent front month futures continue to nurse losses seen earlier this week, with the post-OPEC downside completely erased alongside some more. To recap, oil contracts were under pressure from compounding COVID headlines at the start of the week and in the run-up to OPEC+ whereby ministers opted to keep production plans despite the Omicron variant and the recent SPR releases. Delving deeper into these themes, desks suggest that a dominant Omicron variant could actually be positive if the strain turns out to be milder than some of its predecessors – with the jury still out but initial reports from India and South Africa suggesting so. Regarding OPEC+, some oil traders suggest the move to maintain plans was more of a political strategy as opposed to an attempt to balance markets, with journalists also suggesting that tensions with the US have simmered down and the prospect of further SPR releases have significantly declined. Further, it's also worth bearing in mind that due to maintenance and underinvestment, the real output hike from OPEC+ producers will likely be under the 400k BPD. In terms of Iranian developments, updates have been less constructive, with sources suggesting that Iran is holding a tougher stance than during the June talks. Negotiations will break today and resume next week. Crude contracts are modestly lower on the week and well-off worst levels, with Brent Feb now back around USD 71.50/bbl (65.72-77.02 weekly range), while WTI Jan resides around USD north of USD 68/bbl (62.43-72.93/bbl). Elsewhere, spot gold and silver vary, with the former finding some overnight support around USD 1,766/oz as risk sentiment erred lower, whilst the cluster of DMAs remain around the USD 1,790-91/oz region. In terms of base metals, LME copper is flat on either side of USD 9,500/t. Overnight, Dalian iron ore futures fell amid a decline in mill demand, whilst China's steel hub Tangshan city is to launch a second-level pollution alert from December 3-10th, the local government said – providing further headwinds for iron demand. US Event Calendar 8:30am: Nov. Change in Nonfarm Payrolls, est. 550,000, prior 531,000 Nov. Change in Private Payrolls, est. 525,000, prior 604,000 Nov. Change in Manufact. Payrolls, est. 45,000, prior 60,000 8:30am: Nov. Unemployment Rate, est. 4.5%, prior 4.6% Nov. Underemployment Rate, prior 8.3% Nov. Labor Force Participation Rate, est. 61.7%, prior 61.6% 8:30am: Nov. Average Hourly Earnings YoY, est. 5.0%, prior 4.9% Nov. Average Hourly Earnings MoM, est. 0.4%, prior 0.4% Nov. Average Weekly Hours All Emplo, est. 34.7, prior 34.7 9:45am: Nov. Markit US Composite PMI, prior 56.5 Nov. Markit US Services PMI, est. 57.0, prior 57.0 10am: Oct. Factory Orders, est. 0.5%, prior 0.2% Oct. Factory Orders Ex Trans, est. 0.6%, prior 0.7% Oct. Durable Goods Orders, est. -0.5%, prior -0.5% Oct. Cap Goods Ship Nondef Ex Air, prior 0.3% Oct. Cap Goods Orders Nondef Ex Air, prior 0.6% 10am: Nov. ISM Services Index, est. 65.0, prior 66.7 DB's Jim Reid concludes the overnight wrap I got great news yesterday. It was the school Xmas Fayre last weekend and at one stall we had to guess the weight of the school duck that lives in their pond. I spent a long time analysing it outside and was trying to mentally compare it to the weights of my various dumbbells at home. I learnt yesterday that I’d won. My prize? A rubber duck for the bath. In more trivial news I also learnt I was voted no.1 analyst in four categories of the Global Institutional Investor Fixed Income Analyst awards for 2021. So many thanks for all who voted. It is very much appreciated. However in terms of physical mementoes of my achievements yesterday, all I actually have to show for it is a brown rubber duck. Guessing the weight of a duck is a walk in the park at the moment compared to predicting markets. Indeed it’s been a wild week. If you’ve managed to time all the various swings you can surely only have done it via a time machine. If you have done so without one though I will happily hand over my prized rubber duck. By the close of trade, the S&P 500 (+1.42%) had begun to recover following its worst 2-day performance in over a year. The VIX index of volatility ticked back down beneath the 30 mark again, but finished above 25 for the fourth day in five for the first time since December of last year. Meanwhile Oil plunged and then soared on OPEC+ news and curves continued to flatten as 2yr yields got back close to their pre-Omicron levels after a near 20bps round journey over the last week. I’m glad I’m a research analyst not a day trader, and that’s before we get to today’s payrolls print. We’ll start with Omicron, where yesterday predictably saw a number of new countries report confirmed cases for the first time, as well as a second case in the United States during market hours, this one with roots in New York City, which reported more than 11,300 new cases yesterday, the highest daily count since January. After the market closed, an additional five cases were identified in New York, which sent futures over -0.5% lower at the time. They are back to flat as we type possibly helped by a late deal and vote in Congress to fund the US government through to February 18th and avert a shutdown at midnight tonight. Back to the virus and governments continued to ramp up their defence measures, with Germany yesterday announcing a range of fresh restrictions as they grapple with the latest wave, including a requirement that you must either be vaccinated or have recovered from Covid in order to get into restaurants or non-essential stores. There’s also set to be a parliamentary vote on mandatory vaccinations, and incoming Chancellor Scholz said that he expected it to pass. In the US, President Biden announced new measures to fight the impending winter wave and spreading Omicron variant, including tighter testing guidelines for international visitors, wider availability of at home tests, whilst accelerating efforts to get the rest of the world vaccinated. Over in South Africa, the daily case count rose further yesterday, with 11,535 reported, up from 8,561 the previous day and 4,373 the day before that. So definitely one to keep an eye on as we look for clues about what this could mean for the world more broadly. That said, we’re still yet to get the all-important information on how much less or more deadly this might be, as well as how effective vaccines still are and the extent to which it is more transmissible relative to other variants. Back to markets, and the revival in risk appetite led to a fresh selloff in US Treasuries, with the 2yr yield up +6.7bps, and the 10yr yield up +3.7bps. Nevertheless, as mentioned at the top, the latest round of curve flattening has sent the 2s10s slope to its flattest since before the Georgia Senate seat runoff gave Democrats control of Congress. It’s now at just +82.0bps, whilst the 5s30s slope is now at flattest since March 2020, at +55.0bps. So a warning sign for those who believe in the yield curve as a recessionary indicator, albeit with some way to go before that flashes red. In Europe there was also a modest curve flattening, but yields moved lower across the board, with those on 10yr bunds (-2.6bps), OATs (-3.2bps) and BTPs (-5.6bps) all down by the close. Over in equities, there was a decent rebound in the US following the recent selloff, with the S&P 500 (+1.42%) posting a solid gain. It was a very broad-based advance, with over 90% of the index’s members moving higher for the first time since mid-October. Every S&P sector increased, which was enough to compensate for the noticeable lag in mega-cap shares, with the FANG index gaining just +0.15%. The STOXX 600 decreased -1.15%, though that reflected the fact Europe closed ahead of the big reversal in sentiment the previous session. Aside from Omicron, one of the other biggest stories yesterday was the decision by the OPEC+ group to continue with their production hike, which will add a further +400k barrels/day to global supply in January. The news initially sent oil prices sharply lower, with Brent crude falling to an intraday low beneath $66/bbl, before recovering to end the day back at $69.67/bl in light of the group saying that they could adjust their plans “pending further developments of the pandemic”, with the ability to “make immediate adjustments if required”. Even with the bounceback yesterday however, oil has been one of the worst-performing assets over recent weeks, with Brent hitting an intraday high of $86.7/bbl in late-October, followed by a November that marked its worst monthly performance since the pandemic began. Overnight in Asia stocks are trading mostly higher with the KOSPI (+0.86%), Shanghai Composite (+0.58%), CSI (+0.35%) and the Nikkei (+0.29%) up but with the Hang Seng (-0.74%) under pressure amid the ongoing regulatory clampdown in technology from China as Didi prepares to delist on US markets. Looking forward now, the main highlight on today’s calendar is the US jobs report for November, which comes less than two weeks’ away from the Fed’s meeting where they’ll decide on the pace of tapering. In terms of what to expect, our US economists are looking for nonfarm payrolls to grow by +600k, which would be the fastest pace of job growth since July, and that in turn would take the unemployment rate down to a post-pandemic low of 4.4%. Ahead of that, we had another decent weekly claims report (albeit that took place after the jobs report survey period), with the number for the week through November 26 coming in at a stronger-than-expected 222k (vs. 240k expected). The previous week’s number was also revised down -5k, sending the 4-week moving average down to its own post-pandemic low of 238.75k. Looking at yesterday’s other data releases, the Euro Area unemployment rate fell to a post-pandemic low of 7.3% in October, in line with expectations. However producer price inflation shot up even faster than anticipated to +21.9% (vs. 19.0% expected). To the day ahead now, and the aforementioned US jobs report for November will be the highlight. Other data releases include the services and composite PMIs for November from around the world, Euro Area retail sales for October, and in addition from the US, there’s October’s factory orders and the November ISM services index. From central banks, we’ll hear from ECB President Lagarde and chief economist Lane, the Fed’s Bullard and the BoE’s Saunders. Tyler Durden Fri, 12/03/2021 - 07:55.....»»

Category: blogSource: zerohedgeDec 3rd, 2021

Putin is "deadly serious" about neutralizing Ukraine, and has the upper hand over the West, former US diplomats and officials warn

"You've got to take it seriously because Russia has crossed the Rubicon many times before when people said they wouldn't," one expert warned. Russian President Vladimir Putin speaks during a concert marking the seventh anniversary of the Crimea annexation on March 18, 2021 in Moscow, Russia.Mikhail Svetlov/Getty Images The buildup of Russian troops on Ukraine's border has prompted fears of an invasion. Former US diplomats and officials say there's a significant risk of a Russian incursion, given Putin's history. "One way or another, he wants Ukraine neutralized," Fiona Hill, a top Russia expert, told Insider. For the second time this year, there are serious concerns that Russia is on the verge of invading Ukraine. Tens of thousands of Russian troops have amassed along Ukraine's border, raising alarm across the West. Ukraine's president on Friday claimed to have uncovered a coup plot involving Russians. The world is on edge, with leaders in Washington and beyond contemplating what Russian President Vladimir Putin will do next. "We don't know what President Putin's intentions are, but we do know what's happened in the past," Secretary of State Antony Blinken recently told reporters. "We do know the playbook of trying to cite some illusory provocation from Ukraine or any other country and then using that as an excuse to do what Russia is planning to do all along."Former US diplomats, ex-officials, and experts say that a Russian military incursion into Ukraine is a strong possibility in the near future, emphasizing that Putin has a significant advantage over the US and NATO at a time when many Western countries are plagued by domestic disarray. "There is a major risk of Russian military activity in Ukraine in the next few months. All the signs point to a major build up of military capability," Ivo Daalder, the US ambassador to NATO from 2009 to 2013, told Insider.Moscow's rhetoric at the moment is "designed to heighten tensions" while "placing blame on the US and NATO for any possible escalation," Daalder said.Putin is "deadly serious" about taking action on Ukraine, Fiona Hill, who served as the top Russia advisor on the National Security Council under the Trump administration, told Insider. "One way or another, he wants Ukraine neutralized," she added. "You've got to take it seriously because Russia has crossed the Rubicon many times before when people said they wouldn't," Hill said, pointing to Russia's invasion of Georgia in 2008, Putin's unilateral annexation of Crimea in 2014, and the Kremlin's support for rebels in an ongoing war in Ukraine's eastern Donbass region, among other examples. The Kremlin, for its part, has denied any involvement in the ongoing conflict in eastern Ukraine, which has claimed over 13,000 lives since 2014.  With historic political polarization in the US, a growing divide between the US and European allies, and disunity within a number of European countries, Putin views the West as weak at present and sees an "incredible opportunity" to exploit, Hill said, adding that the Russian president "knows none of us want to fight for Ukraine." The US has provided over $2.5 billion in security assistance to Ukraine since 2014. There's strong bipartisan support in Congress for ramping up that financial assistance, but it's extremely unlikely that the US would send in troops to support Ukraine even if Russia did invade. 'A country that has invaded Ukraine before'Units of Russian mountain air assault division hold exercise in Crimea in March 2021.Sergei Malgavko/Getty ImagesSteven Pifer, the US ambassador to Ukraine from 1998 to 2000, told Insider that he puts the odds of Russia invading Ukraine on the "low side" because the "potential costs to the Kremlin could be very high: political isolation, more economic and individual sanctions, NATO more rejuvenated and, most importantly, Russian soldiers coming home in body bags, which would not be popular at home."But Pifer also underscored that Putin has his "own logic," making it hard to rule anything out. The US and Europe need to make it apparent there would be "big costs" if Russia took military action, Pifer said, suggesting that it should be privately communicated to the Kremlin what type of sanctions would be implemented. "If Russia does invade, NATO will not take direct military action against Russia," Pifer added. "But you will likely see more arms supplies by individual NATO members to Ukraine, and the Alliance as a whole will become even more serious about bolstering its deterrence and defense posture against Russia."NATO Secretary-General Jens Stoltenberg on Friday warned Russia there will be "costs" and "consequences" if force is used against Ukraine, the Associated Press reported. Stoltenberg said Russia's military buildup "is unprovoked and unexplained," warning that it raises tensions and risks miscalculations."There is no certainty about the intentions of Russia," the NATO chief said, but added "this is a military buildup by a country that has invaded Ukraine before."The top US diplomat for European affairs, Karen Donfried, on Friday told reporters that "all options are on the table" in terms of a response to the Russian troop buildup, per Reuters. Ukraine is 'unfinished business' for PutinRussian President Vladimir Putin looks over a mockup of Russian aircraft carrier Admiral Kuznetsov while at a military exposition in Sevastopol, Crimea, January 9, 2020.Mikhail Svetlov/Getty ImagesThe Kremlin has denied any plans to invade Ukraine, while blaming NATO for the contentious dynamic. Last Thursday, Putin said the West was not taking Russia's "red lines" seriously enough."We're constantly voicing our concerns about this, talking about red lines, but we understand our partners — how shall I put it mildly — have a very superficial attitude to all our warnings and talk of red lines," Putin said in a speech on foreign policy. Putin claimed that Western strategic bombers had been flying within roughly 12.5 miles of Russia's borders.This came after the Kremlin in September warned that NATO expanding military infrastructure in Ukraine would cross Putin's "red lines." Russia has repeatedly denounced US and NATO military activities in the Black Sea region. Though Ukraine is not a full NATO member, it has repeatedly expressed a desire to join while maintaining a robust partnership with the alliance. This has infuriated Putin — a former KGB operative — who views the increase of US and NATO military activities in Ukraine as a major threat to Russian security. Moscow has moved to crush virtually any Western influence in Ukraine, a former Soviet republic and its nextdoor neighbor. Putin is "engaged in a strategy of disruption," Daalder said, with the goal of sowing "disunity in Europe and the region" to ensure that "he and Russia aren't ignored."The Russian president places Ukraine "at the top of the hierarchy of issues that he wants to resolve" in terms of his red lines in Europe being recognized and respected, Hill said, underscoring that Putin views Ukraine as "unfinished business." Putin would be open to achieving a diplomatic resolution, Hill said, but could take things further if he feels that Russia isn't being taken seriously. The only way Putin will lose the "upper hand" he has over the West when it comes to Ukraine is if there is a "collective, forceful, diplomatic response," Hill said. "The big challenge is for Europe," Hill said, emphasizing that the US can't resolve this on its own.Read the original article on Business Insider.....»»

Category: dealsSource: nytNov 26th, 2021

Futures Trade Near All Time High As Traders Shrug At Inflation, Covid Concerns

Futures Trade Near All Time High As Traders Shrug At Inflation, Covid Concerns US equity futures and European markets started the Thanksgiving week on an upbeat note as investors set aside fear of surging inflation and focused on a pickup in M&A activity while China signaled possible easing measures. The euphoria which lifted S&P futures up some 0.5% overnight and just shy of all time highs ended abruptly and futures reversed after German Chancellor Angela Merkel said the Covid situation in the country is worse than anything so far and tighter curbs are needed. At 730 a.m. ET, Dow e-minis were up 95 points, or 0.26%. S&P 500 e-minis were up 12.25 points, or 0.26% and Nasdaq 100 e-minis were up 58.75 points, or 0.357%. U.S. stocks trade near record levels, outpacing the rest of the world, as investors see few alternatives amid rising inflation and a persistent pandemic that undermines global recovery. Concerns about high valuations and the potential for the economy to run too hot on the back of loose monetary and fiscal policies have interrupted, but not stopped the rally. In other words, as Bloomberg puts it "bears are winning the argument, bulls are winning in the market" while Nasdaq futures hit another record high as demand for technology stocks remained strong. “Based on historical data, the Thanksgiving week is a strong week for U.S. equities,” Ipek Ozkardeskaya, a senior analyst at Swissquote, wrote in a note. “Black Friday sales will be closely watched. The good news is, people still have money to spend, even though they get less goods and services in exchange of what’s spent.” In premarket moves, heavyweights, including most FAANG majors, rose in premarket trade. Vonage Holdings Corp. jumped 26% in premarket trading after Ericsson agreed to buy it. Telecom Italia SpA jumped as much as 30% in Europe after KKR offered to buy it for $12 billion. Energy stocks recovered slightly from last week's losses, although anticipation of several economic readings this week kept gains in check. Bank stocks rose in premarket trading as the U.S. 10-year Treasury yield climbed for the first time in three sessions to about 1.58%. S&P 500 futures gain as much as 0.5% on Monday morning. Tesla gained 2.8% after Chief Executive Elon Musk tweeted that Model S Plaid will "probably" be coming to China around March. Activision Blizzard (ATVI.O) slipped 1.1% after a media report that the video game publisher's top boss, Bobby Kotick, would consider leaving if he cannot quickly fix culture problems. Travel and energy stocks, which were among the worst performers last week, also marked small gains before the open. Here is a list of the other notable premarket movers: Astra Space (ASTR US) shares surge 33% in premarket trading after the company said its rocket reached orbit. Aurora Innovation (AUR US) falls 8% in premarket, after soaring 71% last week amid a surge in popularity for self-driving technology companies among retail traders. Chinese electric-carmaker Xpeng (XPEV US) rises as much as 2.8% premarket after co. unveils a large sports-utility vehicle pitted more directly against Tesla’s Model Y and Nio’s ES series. Stocks of other EV makers are mixed. Monster Beverage (MNST US)., the maker of energy drinks, is exploring a combination with Corona brewer Constellation Brands (STZ US), according to people familiar with the matter. CASI Pharma (CASI US) jumped 17% in postmarket trading after CEO Wei-Wu He disclosed the purchase of 400,000 shares in a regulatory filing. Along with an eye on the Fed's plans for tightening policy, investors are also watching for an announcement from Joe Biden on his pick for the next Fed chair. Powell was supposed to make his decision by the weekend but has since delayed it repeatedly. Investors expect current chair Jerome Powell to stay on for another term, although Fed Governor Lael Brainard is also seen as a candidate for the position. “Bringing the most dovish of the doves wouldn’t guarantee a longer period of zero rates,” Ozkardeskaya wrote. “If the decisions are based on economic fundamentals, the economy is calling for a rate hike. And it’s calling for it quite soon.” The Stoxx 600 trimmed gains after German Chancellor Angela Merkel called for tighter Covid-19 restrictions. European telecom shares surged after KKR’s offer to buy Telecom Italia for about $12 billion, which boosted sentiment about M&A in the sector. The Stoxx 600 Telecommunications Index gained as much as 1.6%, the best-performing sector gauge for the region: Telefonica +4.8%, Infrastrutture Wireless Italiane +4%, KPN +2.7%. Meanwhile, telecom equipment stock Ericsson underperforms the rest of the SXKP index, falling as much as 4.9% after a deal to buy U.S. cloud communication provider Vonage; Danske Bank says the price is “quite steep”. Earlier in the session, Asian stocks fell as Covid-19 resurgences in Europe triggered risk-off sentiment across markets amid weaker oil prices, a strong U.S. dollar and higher bond yields. The MSCI Asia Pacific Index declined 0.3%, with India’s Sensex measure slumping the most since April as Paytm’s IPO weighed on sentiment. The country’s oil giant Reliance dragged down the Asian index after scrapping a deal with Saudi Aramco, and energy and financials were the biggest sector losers in the region. Asian markets have turned softer after capping their first weekly retreat this month, following lackluster moves from economically sensitive sectors in the U.S., while investors continue to monitor earnings reports of big Chinese technology firms this week. “Some impact from the regulatory risks and dull macroeconomic conditions have shown up in several Chinese big-tech earnings and that may put investors on the sidelines as earnings season continues,” Jun Rong Yeap, a market strategist at IG Asia Pte., wrote in a note. China’s equity gauge posted a second straight day of gains after the central bank’s quarterly report indicated a shift toward easing measures to bolster the economic recovery. South Korea led gains in the region, with the Kospi adding more than 1%, helped by chipmakers Samsung Electronics and SK Hynix. Asia’s chip-related shares rose after comments from Micron Technology CEO Sanjay Mehrotra added to optimism the global shortage of semiconductors is easing. Reports of Japan earmarking $6.8 billion to bolster domestic chipmaking and Samsung planning to announce the location of its new chip plant in the U.S. also aided sentiment. Japanese stocks fluctuated after U.S. shares retreated on Friday following hawkish remarks from Federal Reserve officials. The Topix index was virtually unchanged at 2,044.16 as of 2:21 p.m. Tokyo time, while the Nikkei 225 advanced 0.1% to 29,783.92. Out of 2,180 shares in the index, 1,107 rose and 948 fell, while 125 were unchanged. “There are uncertainties surrounding the direction of U.S. monetary policy,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute Co. “The latest comments from FRB members are spurring talk that steps to taper could accelerate.” Australian stocks sunk as banks tumbled to almost a 4-month low. The S&P/ASX 200 index fell 0.6% to close at 7,353.10, weighed down by banks and technology stocks as the measure for financial shares finished at the lowest level since July 30.  Nickel Mines was the top performer after agreeing to expand its strategic partnership with Shanghai Decent. Flight Centre fell for a second session, ending at its lowest close since Sept. 20, as the Covid-19 situation worsens in Europe. In New Zealand, the S&P/NZX 50 index fell 1% to 12,607.64. In FX, the Bloomberg dollar index holds Asia’s narrow range, trading little changed on the day. AUD outperforms G-10 peers, extending Asia’s modest gains. SEK and JPY are the weakest. RUB lags in EMFX, dropping as much as 1% versus the dollar with USD/RUB on a 74-handle. According to Bloomberg, hedge funds’ bullishness toward the dollar is starting to evaporate amid speculation the U.S. currency has risen too much given the Federal Reserve remains adamant it’s in no rush to raise interest rates. Meanwhile, the euro pared modest Asia session losses to trade below $1.13, while European bond yields edged higher, led by bunds and gilts. The pound dipped after comments from Bank of England policy makers raised questions about the certainty of an interest-rate increase in December. Governor Andrew Bailey said that the risks to the U.K. economy are “two-sided” in a weekend interview. Australian dollar advanced against the kiwi on position tweaking ahead of Wednesday’s RBNZ’s rate decision, and after China’s central bank removed sticking with “normal monetary policy” from its policy outlook. Yen declines as speculation China will steer toward more accommodative policy damps the currency’s haven appeal. Hungary’s forint tumbled to a record low against the euro as back-to-back interest rate increases failed to shield it during a rapidly deteriorating pandemic and a flight to safer assets. In commodities, crude futures drifted higher. WTI rises 0.3% near $76.20, Brent regains at $79-handle. Spot gold has a quiet session trading near $1,844/oz. Base metal are mixed: LME copper, tin and zinc post small losses; lead and nickel are in the green Looking at today's calendar, we get the October Chicago Fed national activity index, existing home sales data, and the Euro Area advance November consumer confidence. Zoom is among the companies reporting earnings. Market Snapshot S&P 500 futures up 0.3% to 4,710.75 STOXX Europe 600 up 0.3% to 487.45 German 10Y yield little changed at -0.34% Euro little changed at $1.1283 MXAP down 0.2% to 198.88 MXAPJ down 0.2% to 647.20 Nikkei little changed at 29,774.11 Topix little changed at 2,042.82 Hang Seng Index down 0.4% to 24,951.34 Shanghai Composite up 0.6% to 3,582.08 Sensex down 2.0% to 58,450.84 Australia S&P/ASX 200 down 0.6% to 7,353.08 Kospi up 1.4% to 3,013.25 Brent Futures up 0.4% to $79.22/bbl Gold spot little changed at $1,846.10 U.S. Dollar Index also little changed at 96.08 Top Overnight News from Bloomberg Negotiators hammering out details of a transformative new global corporate tax regime are shaping the deal to maximize its chance of winning acceptance in the U.S., whose companies face the biggest impact from the overhaul The U.S. has shared intelligence including maps with European allies that shows a buildup of Russian troops and artillery to prepare for a rapid, large-scale push into Ukraine from multiple locations if President Vladimir Putin decided to invade, according to people familiar with the conversations. The ruble slid to the weakest since August and the hryvnia fell With investors ramping up expectations for the Federal Reserve and other developed-market central banks to tighten policy, the likes of the Brazilian real and Hungarian forint have been weighed down by inflation and political concerns even as local officials pushed up borrowing costs. The Chinese yuan, Taiwanese dollar and Russian ruble have been among the few to stand their ground An organization formed by key participants in China’s currency market urged banks to limit speculative foreign-exchange trading after the yuan climbed to a six-year high versus peers The Avalanche cryptocurrency has surged in the past several days, taking it briefly into the top 10 by market value and surpassing Dogecoin and Shiba Inu, after a deal related to improvement of U.S. disaster-relief funding A more detailed breakdown of overnight news courtesy of Newsquawk Asia-Pac stocks traded mixed following last Friday's mostly negative performance stateside, where risk appetite was dampened by concerns of a fourth COVID wave in Europe and recent hawkish Fed rhetoric. Weekend newsflow was light and the mood was tentative heading into this week's risk events including FOMC minutes and US GDP data before the Thanksgiving holiday. The ASX 200 (-0.6%) was subdued with declines led by weakness in gold miners and the energy sector. The Nikkei 225 (+0.1%) was lacklustre after last week’s inflows into the JPY but with downside eventually reversed as the currency faded some of the gains and following the recent cabinet approval of the stimulus spending. The KOSPI (+1.4%) outperformed and reclaimed the 3k level with shares in index heavyweight Samsung Electronics rallying as its de facto leader tours the US which spurred hopes the Co. could deploy its USD 100bln cash pile. The Hang Seng (-0.4%) and Shanghai Comp. (+0.6%) diverged with the mainland kept afloat after the PBoC conducted a mild liquidity injection and maintained its Loan Prime Rate for a 19th consecutive month as expected, although Hong Kong was pressured by losses in energy and cautiousness among developers, as well as the recent announcement of increased constituents in the local benchmark. Finally, 10yr JGBs eked marginal gains amid the cautious risk tone in Asia and following firmer demand at the enhanced liquidity auction for 2yr-20yr JGBs, but with upside capped as T-note futures continued to fade Friday’s early gains that were fuelled by the COVID-19 concerns in Europe before the advances were later halted by hawkish Fed rhetoric calling for a discussion on speeding up the tapering at next month’s meeting. Top Asian News China Blocks Peng Shuai News as It Seeks to Reassure World China FX Panel Urges Banks to Cap Speculation as Yuan Surges Paytm Founder Compares Himself to Musk After Historic IPO Flop China Tech Stocks Are Nearing Inflection Point, UBS GWM Says European cash bourses kicked off the new trading week with mild gains (Euro Stoxx 50 +0.3%; Stoxx 600 +0.3%) following a mixed APAC handover. Some have been attributing the mild gains across Europe in the context of the different approaches of the Fed and ECB, with the latter expected to remain dovish as the former moves tighter, while COVID lockdowns will restrict economic activity. News flow in the European morning has however been sparse, as participants look ahead to FOMC Minutes, Flash PMIs and US GDP ahead of the Thanksgiving holiday (full Newsquawk Desk Schedule on the headline feed) alongside the Fed Chair update from President Biden and a speech from him on the economy. US equity futures see modestly more pronounced gains, with the more cyclically-exposed RTY (+0.6%) performing better than then NQ (+0.4%), ES (+0.4%) and YM (+0.4%). Since the European cash open, the initial mildly positive momentum has somewhat waned across European cash and futures, with the region now conforming to a more mixed picture. Spain's IBEX (+0.7%) is the clear regional outperforming, aided by index heavyweight Telefonica (+5.0%), which benefits from the sectorial boost received by a couple of major M&A updates. Firstly, Telecom Italia (+22%) gapped higher at the open after KKR presented a EUR 0.505/shr offer for Telecom Italia. The offer presents a ~45% premium on Friday's close. Second, Ericsson (-3.5%) made a bid to acquire American publicly held business cloud communications provider Vonage in a deal worth USD 6.2bln. As things stand, the Telecom sector is the clear outperformer, closely followed by banks amid a revival in yields. The other end of the spectrum sees Travel & Leisure back at the foot of the bunch as COVID fears in Europe mount. In terms of individual movers, Vestas Wind Systems (-2.0%) was hit as a cyber incident that impacted parts of its internal IT structure and data has been compromised. Looking ahead, it’s worth noting that volume will likely be more muted towards the latter half of the week on account of the Thanksgiving holiday. Top European News Scholz Closer to German Chancellery as Cabinet Takes Shape Austria Back in Lockdown Ahead of Mandatory Vaccine Policy Energy Crunch Drives Carbon to Record as Europe Burns More Coal BP Goes on Hydrogen Hiring Spree in Bid for 10% Market Share In FX, the Antipodean Dollars are outperforming at the start of the new week on specific supportive factors, like a bounce in the price of iron ore and a further re-opening from pandemic restrictions in both Australia and New Zealand, while the REINZ shadow board is ‘overwhelmingly’ behind another RBNZ rate hike this week. Aud/Usd is holding around 0.7250 and Nzd/Usd is hovering circa 0.7000 as the Aud/Nzd cross pivots 1.0350 in the run up to flash Aussie PMIs and NZ retail sales. DXY - Aussie and Kiwi strength aside, the Greenback retains a solid underlying bid on safe haven and increasingly hawkish Fed grounds after a run of recent much better than expected US data. In index terms, a base just above 96.000 provides a platform to retest last week’s peaks at 96.245 and 96.266 vs 96.223 so far, but Monday’s agenda may not give bulls much in the way of encouragement via data with only existing home sales scheduled. Instead, the Buck could derive more impetus from Treasuries given front-loaded supply ahead of Thanksgiving in the form of Usd 58 bn 2 year and Usd 59 bn 5 year notes. CHF/CAD/EUR/GBP/JPY - All narrowly mixed against their US rival, as the Franc keeps its head above 0.9300 and meanders between 1.0485-61 vs the Euro amidst some signs of official intervention from a rise in weekly Swiss sight deposits at domestic banks. Meanwhile, the Loonie has some leverage from a mild rebound in crude prices to pare declines from sub-1.2650 and should glean support into 1.2700 from 1 bn option expiries at 1.2685 on any further risk aversion or fallout in WTI. Conversely, 1 bn option expiry interest from 1.1300-05 could scupper Euro recoveries from Friday’s new y-t-d low around 1.1250 against the backdrop of ongoing COVID-19 contagion and pre-ECB speakers plus preliminary Eurozone consumer confidence. Elsewhere, the Pound is weighing up BoE tightening prospects and the impact of no breakthrough between the UK and EU on NI Protocol as Cable and Eur/Gbp straddle the 1.3435-40 zone and 0.8400 respectively, while the Yen has unwound more of its safe haven premium within a 114.27-113.91 range eyeing UST yields in relation to JGBs alongside overall risk sentiment. SCANDI/EM - The Nok is deriving some traction from Brent back over Usd 79/brl, but geopolitical concerns are preventing the Rub from benefiting and the Mxn is also on a weaker footing along with most EM currencies. However, the Try is striving to draw a line in the sand irrespective of a marked deterioration in Turkish consumer sentiment and the Cnh/Cny are holding up well regardless of a softer PBoC fix for the onshore unit as LPRs were unchanged yet again and China’s FX regulator told banks to limit Yuan spec trades. In CEE, the Pln has plunged on diplomatic strains between Poland and the EU, the Huf has depreciated to all time lows on virus fears and the Czk has been hampered by CNB’s Holub downplaying the chances of more big tightening surprises such as the aggressive hike last time. In commodities, WTI and Brent front month futures see some consolidation following Friday’s slide in prices. In terms of the fundamentals, the demand side of the equations continues to be threatened by the fourth wave of COVID, namely in the European nations that have not had a successful vaccine rollout. As a reminder, Austria is in a 20-day nationwide lockdown as of today, whilst Germany, Belgium and the Netherlands see tighter restrictions, with the latter two also experiencing COVID-related social unrest over the weekend. The European Commission will on Wednesday issue a set of new recommendations to its member states on non-essential travel, a senior EU diplomat said, which will be watched for activity and jet fuel demand. Over to the supply side, There were weekend reports that Japan and the US are planning a joint announcement regarding the SPR release, although a key Japanese official later noted there was no fixed plan yet on releasing reserves. Japanese PM Kishida confirmed that they are considering releasing oil reserves to curb prices. Meanwhile, Iranian nuclear talks are regaining focus as negotiations are poised to resume on the 29th of November – it is likely we’ll see officials telegraph their stances heading into the meeting. Eyes will be on whether the US offers an olive branch as Tehran stands firm. Elsewhere, the next OPEC+ meeting is also looming, but against the backdrop of lower prices, COVID risk and SPR releases, it is difficult to see a scenario where OPEC+ will be more hawkish than dovish. WTI and Brent Jan trade on either side of USD 76/bbl and USD 79/bbl respectively and within relatively narrow bands. Spot gold and silver meanwhile see a mild divergence, with the yellow metal constrained by resistance in the USD 1,850/oz area, whilst spot silver rebounded off support at USD 24.50/oz. Finally, base metals are relatively mixed with no standout performers to point out. LME copper is flat but holds onto USD 9,500+/t status. US Event Calendar 8:30am: Oct. Chicago Fed Nat Activity Index, est. 0.10, prior -0.13 10am: Oct. Existing Home Sales MoM, est. -1.8%, prior 7.0% 10am: Oct. Home Resales with Condos, est. 6.18m, prior 6.29m DB's Jim Reid concludes the overnight wrap This morning we’ve just published our 2022 credit strategy outlook. 2021 has been one of the lowest vol years for credit on record but we think this is unlikely to last and spreads will sell-off at some point in H1 when markets reappraise how far behind the curve the Fed is. Even with covid restrictions mounting again in Europe as we go to print, we think it’s more likely that we’ll be in a “growthflationary” environment for 2022 and think overheating risks are more acute than the stagflation risk, especially in the US. Strong growth and high liquidity should mean that full year 2022 is a reasonable year for credit overall but if we’re correct there’ll be regular pockets of inflationary/interest rate concerns in the market, which we think is more likely to happen in H1. At the H1 wides, we could see spreads widen as much as 30-40bps in IG and 120-160bps in HY which is consistent with typical mid-cycle ranges through history. We do expect this to mostly retrace in H2 as markets recover from the shock and growth remains decent and liquidity still high. However, with the potential for a shift in the narrative to potential late-cycle dynamics, we think spreads will close 2022 slightly wider than they are today. We will be watching the yield curve closely through the year for clues as to how the cycle will evolve into 2023. This has the ability to move our YE 22 forecasts in both directions as the year progresses. This week will be heavily compressed given Thanksgiving on Thursday. The highlight though will be a likely choice of Fed governor before this, assuming the timetable doesn’t slip again. Overnight it’s been announced that Biden will give a speech to the American people tomorrow on the economy and prices. It’s possible the Fed Chair gets announced here and perhaps plans to release oil from the strategic reserve. We will see. Following that, Wednesday is especially busy as a pre-holiday US data dump descends upon us. We’ll see the minutes of the November 3rd FOMC meeting and earlier that day the core PCE deflator (the Fed's preferred inflation metric), Durable Goods, the UoM sentiment index (including latest inflation expectations), new home sales and jobless claims amongst a few other releases. More internationally, covid will be focus, especially in Europe as Austria enters lockdown today after the shock announcement on Friday. Germany is probably the swing factor here for sentiment in Europe so case numbers will be watched closely. Staying with Germany, there’s anticipation that a coalition agreement could be reached in Germany between the SPD, Greens and the FDP, almost two months after their federal election. Otherwise, the flash PMIs for November will be in focus, with the ECB following the Fed and releasing the minutes from their recent meeting on Thursday. As discussed at the top the most important market event this week is likely to be on the future leadership of the Federal Reserve, as it’s been widely reported that President Biden is expected to announce his choice on who’ll be the next Fed Chair by Thanksgiving on Thursday. Previous deadlines have slipped on this announcement, but time is becoming increasingly limited given the need for Senate confirmation ahead of Chair Powell’s current four-year term expiring in early February. The two names that are quite obviously in the frame are incumbent Chair Powell and Governor Brainard, but there are also a number of other positions to fill at the Fed in the coming months, with Vice Chair Clarida’s term as an FOMC governor expiring in January, Randal Quarles set to leave the Board by the end of this year, and another vacant post still unfilled. So a significant opportunity for the Biden administration to reshape the top positions at the Fed. In spite of all the speculation over the position of the Fed Chair, our US economists write in their latest Fed update (link here), that the decision is unlikely to have a material impact on the broad policy trajectory. Inflation in 2022 is likely to remain at levels that make most Fed officials uncomfortable, whilst the regional Fed presidents rotating as voters lean more hawkish next year, so there’ll be constraints to how policy could shift in a dovish direction, even if an incoming chair wanted to move things that way. Another unconfirmed but much anticipated announcement this week could come from Germany, where there’s hope that the centre-left SPD, the Greens and the liberal FDP will finally reach a coalition agreement. The general secretaries of all three parties have recently said that they hope next week will be when a deal is reached, and a deal would pave the way for the SPD’s Olaf Scholz to become chancellor at the head of a 3-party coalition. Nevertheless, there are still some hurdles to clear before then, since an agreement would mark the start of internal party approval processes. The FDP and the SPD are set to hold a party convention, whilst the Greens have announced that their members will vote on the agreement. On the virus, there is no doubt things are getting worse in Europe but it’s worth putting some of the vaccine numbers in some context. Austria (64% of total population) has a double vaccination rate that is somewhat lower than the likes of Spain (79%), Italy (74%), France (69%), the UK (69%) and Germany (68%). The UK for all its pandemic fighting faults is probably as well placed as any due to it being more advanced on the booster campaign due to an earlier vaccine start date and also due to higher natural infections. It was also a conscious decision back in the summer in the UK to flatten the peak to take load off the winter wave. So this is an area where scientists and the government may have made a calculated decision that pays off. Europe is a bit behind on boosters versus the UK but perhaps these will accelerate as more people get 6 months from their second jab, albeit a bit too late to stop some kind of winter wave. There may also be notable divergence within Europe. Countries like Italy and Spain (and to a slightly lesser extent France) that were hit hard in the initial waves have a high vaccination rate so it seems less likely they will suffer the dramatic escalation that Austria has seen. Germany is in the balance as they have had lower infection rates which unfortunately may have encouraged slightly lower vaccination rates. The irony here is that there is some correlation between early success/lower infections and lower subsequent vaccination rates. The opposite is also true - i.e. early bad outcomes but high vaccination rates. The US is another contradiction as it’s vaccination rate of 58% is very low in the developed world but it has had high levels of natural infections and has a higher intolerance for lockdowns. So tough to model all the above. Overall given that last winter we had no vaccines and this year we have very high levels of protection it seems unfathomable that we’ll have an outcome anywhere near as bad. Yes there will be selected countries where the virus will have a more severe impact but most developed countries will likely get by without lockdowns in my opinion even if the headlines aren’t always going to be pleasant. Famous last words but those are my thoughts. In light of the rising caseloads, the November flash PMIs should provide some context for how the global economy has performed into the month. We’ve already seen a deceleration in the composite PMIs for the Euro Area since the summer, so it’ll be interesting to see if that’s maintained. If anything the US data has reaccelerated in Q4 with the Atlanta Fed GDPNow series at 8.2% for the quarter after what will likely be a revised 2.2% print on Wednesday for Q3. Time will tell if Covid temporarily dampens this again. Elsewhere datawise, we’ll also get the Ifo’s latest business climate indicator for Germany on Wednesday, which has experienced a similar deceleration to other European data since the summer. The rest of the week ahead appears as usual in the day-by-day calendar at the end. Overnight in Asia stocks are mixed with the KOSPI (+1.31%) leading the pack followed by the Shanghai Composite (+0.65%) and CSI (+0.53%), while the Nikkei (-0.18%) and Hang Seng (-0.35%) are lower. Stocks in China are being boosted by optimism that the PBOC would be easing its policy stance after its quarterly monetary policy report on Friday dropped a few hints to that effect. Futures are pointing towards a positive start in the US and Europe with S&P 500 futures (+0.31%) and DAX futures (+0.14%) both in the green. Turning to last week now, rising Covid cases prompted renewed lockdown measures to varying degrees and hit risk sentiment. Countries across Europe implemented new lockdown measures and vaccine requirements to combat the latest rise in Covid cases. The standouts included Austria and Germany. Austria will start a nationwide lockdown starting today and will implement a compulsory Covid vaccine mandate from February. Germany will restrict leisure activities and access to public transportation for unvaccinated citizens and announced a plan to improve vaccination efforts. DM ten-year yields decreased following the headline. Treasury, bund, and gilt yields declined -3.8bps, -6.7bps, and -4.6bps on Friday, respectively, bringing the weekly totals to -1.3bps, -8.3bps, and -3.5bps, respectively. The broad dollar appreciated +0.54% Friday, and +0.98% over the week. Brent and WTI futures declined -2.89% and -3.68% on Friday following global demand fears, after drifting -4.27% and -5.79% lower throughout the week as headlines circulated that the US and allies were weighing whether to release strategic reserves. European equity indices declined late in the week as the renewed lockdown measures were publicized. The Stoxx 600, DAX, and CAC 40 declined -0.33%, -0.38%, and -0.42%, respectively on Friday, bringing their weekly totals to -0.14%, +0.41%, and +0.29%. The S&P 500 index was also hit ending the week +0.32% higher after declining -0.14% Friday, though weekly gains were concentrated in big technology and consumer discretionary stocks. U.S. risk markets were likely supported by the U.S. House of Representatives passing the Biden Administration’s climate and social spending bill. The bill will proceed to the Senate, where its fate lays with a few key moderate Democrats. This follows President Biden signing a physical infrastructure bill into law on Monday. On the Fed, communications from officials took a decidedly more hawkish turn on inflation dynamics, especially from dovish members. Whether the Fed decides to accelerate its asset purchase taper at the December FOMC will likely be the key focus in markets heading into the meeting. Ending the weekly wrap up with some positive Covid news: the U.S. Food and Drug Administration cleared Pfizer and Moderna booster shots for all adults. Additionally, the US will order 10 million doses of Pfizer’s Covid pill. Tyler Durden Mon, 11/22/2021 - 07:49.....»»

Category: blogSource: zerohedgeNov 22nd, 2021

Why Steve Bannon should worry about the Trump-appointed judge handling his criminal case

Bannon's case is being overseen by Judge Carl Nichols, a Trump appointee who has ruled repeatedly against Trump and his allies. Steve Bannon appeared in federal court Monday after being charged with criminal contempt of Congress.Anna Moneymaker/Getty Images A Trump appointee, Judge Carl Nichols, was randomly assigned to preside over the prosecution of Steve Bannon. Nichols has ruled repeatedly against Trump and his allies since his confirmation to the federal bench in 2019. The judge will weigh legal issues and set the pace for the closely-watched and politically-charged prosecution.  At first glance, Steve Bannon appeared to hit the judge-drawing lottery when his criminal prosecution was randomly assigned to a Donald Trump appointee.But in the two years since Judge Carl Nichols' confirmation to the federal trial court in Washington, DC, he has ruled repeatedly against Trump and his allies — and often found himself in high-profile cases like the closely-watched prosecution against Bannon that has landed in his lap. Nichols' record could be concerning for Bannon, a former top White House advisor and Trump 2016 campaign official who was charged last week with criminal contempt of Congress over his refusal to turn over documents or testify as part of the House investigation into the January 6 attack on the Capitol. Just a month into his tenure on the federal bench, as House Democrats aggressively investigated Trump and his administration, Nichols drew a politically-charged case that presented — in his words — a "conundrum." It was July 2019, and then-President Trump had sued preemptively to prevent New York from turning over his financial records to House Democrats. The case put Nichols in a "very awkward position," the judge said in court at the time, since House Democrats had not even asked New York for Trump's state tax returns. At the same time, the House could request the records at any moment and New York could turn them over without notifying Trump, depriving the sitting president of a chance to challenge the move.In a blow to Trump, Nichols later dismissed the lawsuit, ruling that the federal district court in DC was the wrong venue for a case against New York officials.From the Supreme Court to Bush's DOJBannon's prosecution has returned the longtime corporate lawyer to the spotlight and positioned him to make critical, closely-watched decisions in a case with ramifications extending beyond Bannon to the future of congressional investigations and the ongoing House inquiry into the January 6 attack on the Capitol.A former Supreme Court clerk for Justice Clarence Thomas, Nichols held a top Justice Department role in the George W. Bush administration and later worked as a corporate lawyer at the firm Wilmer, Cutler, Pickering, Hale and Dorr. As Politico recently reported, Nichols argued as a top Justice Department lawyer that the president's close advisors have "absolute immunity" and can ignore congressional subpoenas."Carl Nichols is a straight-shooter. He was in the government himself and had to make decisions on hard issues. He will understand the equities all around," said Jamie Gorelick, a partner at Wilmer Hale who served as the second-ranking Justice Department official in the Clinton administration.Calling him a "very smart and principled lawyer," Gorelick added that Nichols will "want to move things along quickly but with the defendant's rights in mind."Nichols will likely have to rule ahead of any trial on Bannon's arguments that executive privilege shields him from having to comply with the special House committee's subpoenas. But Bannon had not worked in the White House for years by the time of the January 6 attack on the Capitol, undercutting his claim of privilege, legal experts said. Those experts added that, even if Bannon's conversations with Trump were protected, he would still need to appear before the House committee and invoke privilege on a question-by-question basis."It's pretty clear that the subpoena was issued, he received it and then he failed to show up. Unless he has some legal privilege argument to make, I don't think he has a leg to stand on," said Randall Eliason, a former public corruption prosecutor in Washington who now teaches at the George Washington University School of Law."I just don't think the executive privilege questions are very difficult since Bannon had not been in the White House for three years" by January 6, Eliason added.Insurrectionists loyal to President Donald Trump breach the Capitol in Washington on January 6.AP Photo/John MinchilloThe pace of prosecutionNichols will also set the pace of a prosecution that House Democrats hope will proceed quickly to deter other Trump officials from snubbing their noses at congressional subpoenas. A federal grand jury returned an indictment last week charging Bannon with two counts of contempt of Congress over his refusal to testify or turn over documents as part of the House investigation into the Capitol siege. On Thursday, Bannon appeared for the first time before Nichols at a virtual hearing that focused on how quickly the prosecution should proceed, with prosecutors urging a swift pace and defense lawyers seeking to drag out the proceedings."In our view, this is a very straightforward case about whether or not the defendant showed up. So we don't see any reason to delay setting up trial dates," said Amanda Vaughn, a federal prosecutor in the US attorney's office in Washington, DC. Bannon defense lawyer M. Evan Corcoran asserted that the case involves "complex constitutional issues" and argued Nichols should not set a trial date and recommended that the judge instead schedule a hearing for early 2022. Nichols responded by scheduling a hearing for early December where he said he will address the timing for a trial.Bannon's comment and reputation for fiery rhetoric has raised speculation that Nichols might eventually consider a gag order similar to what was imposed on Roger Stone when he was prosecuted in 2019 for obstructing Congress' investigation into Russia interference in the 2016 election. In response to the indictment, Bannon threatened outside of court last week that he would make his case the 'misdemeanor from hell" for the Biden administration.Going against TrumpTrump has demonstrated that he expects loyalty and favorable decisions out of judges he appointed. But, beginning with Trump's case against New York, Nichols has ruled against the former president and his allies.More recently, Nichols has presided over civil defamation cases that the voting equipment manufacturer Dominion Inc. has filed against Rudy Giuliani, Sidney Powell and My Pillow CEO Mike Lindell alleging that they spread accusations that the company rigged the 2020 presidential election. Giuliani, Powell and Lindell argued that their claims were protected political speech, in a bid to have Nichols toss the defamation lawsuits.But Nichols rejected their arguments and, in an August ruling, allowed the defamation cases to proceed into discovery."There is no blanket immunity for statements that are 'political' in nature," Nichols wrote. "It is true that courts recognize the value in some level of 'imaginative expression' or 'rhetorical hyperbole' in our public debate. … But it is simply not the law that provably false statements cannot be actionable if made in the context of an election."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 18th, 2021

European Army: Rhetoric Versus Reality

European Army: Rhetoric Versus Reality Authored by Soeren Kern via The Gatestone Institute, The call for a supranational army, part of a push for Europe to achieve "strategic autonomy" from the United States, is being spearheaded by French President Emmanuel Macron, who, as part of his reelection campaign, apparently hopes to replace outgoing German Chancellor Angela Merkel as the de facto leader of Europe. Many EU member states disagree with Macron. Eastern European countries, some of which face existential threats from Russia, know that neither the EU nor France can match the military capabilities offered by NATO and the United States. Other countries are concerned about a panoply of issues ranging from financial costs to national sovereignty. "If the EU Army undermines NATO, or results in the separation of the U.S. and Europe or produces a paper army, Europe will be committing the most enfeebling and dangerous act of self-harm since the rise of fascism in the 1930s. An EU Army will amount to European de-arming." — Bob Seely, Tory MP. "It will be hard to convince some member states that collective EU defense would bring the same security as NATO's U.S.-backed defense arrangement." — Richard Whitman, professor of politics and international relations at the University of Kent. "Few share France's willingness to splurge on defense, or its expeditionary military culture. (Germany, especially, does not.) Nobody agrees what 'strategic autonomy' actually means." — The Economist. "The EU is not a credible substitute for what NATO represents. You will not see any appetite for the European army amongst member states." — Kristjan Mäe, head of the Estonian defense ministry's NATO and EU department. "Even if national capitals wanted to lunge for a common army, there are so many technical, legal, and administrative differences between their militaries that it would take decades to produce a smoothly functioning force.... Conclusion: any talk of creating a fully-fledged common army, even within the next generation, is just that: jaw-jaw and not real-real." — Brooks Tigner, analyst, Atlantic Council. European federalists seeking to transform the 27-member European Union into a European superstate — a so-called United States of Europe — have revived a decades-old proposal to build a European army. The call for a supranational army, part of a push for Europe to achieve "strategic autonomy" from the United States, is being spearheaded by French President Emmanuel Macron, who, as part of his reelection campaign, apparently hopes to replace outgoing German Chancellor Angela Merkel as the de facto leader of Europe. Macron claims that Europe needs its own military because, according to him, the United States is no longer a reliable ally. He cites as examples: U.S. President Joe Biden's precipitous withdrawal of American troops from Afghanistan; the growing pressure on Europe to take sides with the United States on China; and France's exclusion from a new security alliance in the Indo-Pacific region. Many EU member states disagree with Macron. Eastern European countries, some of which face existential threats from Russia, know that neither the EU nor France can match the military capabilities offered by NATO and the United States. Other countries are concerned about a panoply of issues ranging from financial costs to national sovereignty. Still others are opposed to creating a parallel structure to NATO that could undermine the transatlantic alliance. A common EU army appears to be a long way from becoming reality. A logical course of action would be for EU member states (which comprise 21 of the 30 members of NATO) to honor past pledges to increase defense spending as part of their contribution to the transatlantic alliance. That, however, would fly in the face of the folie de grandeur — the delusions of grandeur — of European federalists who want to transform the EU into a major geopolitical power. Pictured: Soldiers of the Franco-German brigade, a military unit founded in 1989, jointly consisting of units from the French Army and German Army. (Photo by Sean Gallup/Getty Images) Strategic Autonomy The term "strategic autonomy" in European discussions on defense has been in use since at least December 2013, when the European Council, the EU's governing body comprised of the leaders of the 27 EU member states, called for the EU to improve its defense industrial base. In June 2016, the term appeared in the EU's security strategy. The document — "A Global Strategy for the European Union's Foreign and Security Policy" — was said to "nurture the ambition of strategic autonomy" for the European Union. "An appropriate level of ambition and strategic autonomy," it stated, "is important for Europe's ability to promote peace and security within and beyond its borders." In recent years, the concept of "strategic autonomy" has taken on far broader significance: the idea now means that the EU should become a sovereign power that is militarily, economically, and technologically independent from the United States. EU observer Dave Keating noted: "The Brussels buzzword is now 'strategic autonomy,' an effort to wrestle the word 'sovereignty' away from nationalists and make the case that only a strong EU can make Europeans truly sovereign in relation to Russia, China, and the United States." European federalists increasingly have called for building an autonomous EU military force: March 8, 2015. In an interview with the German newspaper Welt am Sonntag, Jean-Claude Juncker, then the president of the European Commission, the EU's administrative arm, declared that the European Union needed its own army because it was not "taken entirely seriously" on the international stage. The proposal was flatly rejected by the British government, which at the time was still an EU member: "Our position is crystal clear that defense is a national — not an EU — responsibility and that there is no prospect of that position changing and no prospect of a European army." September 26, 2017. President Macron, in a major speech at Sorbonne University, called for a joint EU defense force as part of his vision for the future of the bloc: "Europe needs to establish a common intervention force, a common defense budget and a common doctrine for action." November 6, 2018. Macron, marking the centenary of the armistice that ended World War 1, warned that Europe cannot be protected without a "true, European army." He added: "We have to protect ourselves with respect to China, Russia and even the United States of America." November 13, 2018. German Chancellor Angela Merkel echoed Macron's calls for a European army: "The times when we could rely on others are over. This means nothing less than for us Europeans to take our destiny in our own hands if we want to survive as a Union.... We have to create a European intervention unit with which Europe can act on the ground where necessary. We have taken major steps in the field of military cooperation; this is good and largely supported in this house. But I also have to say, seeing the developments of the recent years, that we have to work on a vision to establish a real European army one day." September 10, 2019. During her first press conference as the new president of the European Commission, Ursula von der Leyen, who has long called for a "United States of Europe," said that she will lead a "geopolitical Commission" aimed at boosting the EU's role on the world stage. She did not offer many details other than a vaguely worded pledge that the European Union would "be the guardian of multilateralism." November 7, 2019. President Macron, in an interview with the London-based magazine, The Economist, declared that NATO was "brain dead" and warned that European countries can no longer rely on the United States for defense. Europe, he said, stands on "the edge of a precipice" and needs to start thinking of itself strategically as a geopolitical power and regain "military sovereignty" or otherwise "we will no longer be in control of our destiny." Macron criticized U.S. President Donald J. Trump because he "doesn't share our idea of the European project." Chancellor Merkel said Macron "used drastic words — that is not my view of co-operation in NATO." November 26, 2019. France and Germany announced the "Conference on the Future of Europe," a two-year post-Brexit soul-searching exercise aimed at reforming the EU to make it "more united and sovereign." June 17, 2020. The European Council tasked the EU's foreign policy chief, Josep Borrell, with drafting a written "Strategic Compass." The document should have three main purposes: 1) to formulate the EU's first common threat analysis; 2) to strengthen the EU's security and defense role; and 3) to offer political guidance for future military planning processes. The Strategic Compass, aimed at harmonizing the perception of threats and risks within the EU, is to be presented in November 2021, debated by EU leaders in December 2021, and approved in March 2022. December 3, 2020. EU foreign policy chief Josep Borrell, in blog post, "Why European Strategic Autonomy Matters," wrote: "It is difficult to claim to be a 'political union' able to act as a 'global player' and as a 'geopolitical Commission' without being 'autonomous.'" He described "strategic autonomy" as a long-term process intended to ensure that Europeans "increasingly take charge of themselves." May 5, 2021. Fourteen EU countries — Austria, Belgium, Cyprus, Czech Republic, Germany, Greece, France, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia and Spain — called for the creation of a so-called EU First Entry Force consisting of 5,000 troops with air, land and sea capabilities. August 29, 2021. In an interview with the Italian newspaper Corriere della Sera, Borrell, the EU's foreign policy chief, said that the moment had come to establish an EU expeditionary force — a "First Entry Force" — to compensate for U.S. "disengagement" from international affairs. A senior EU diplomat, speaking to the Guardian newspaper, asked: "We have been here before — which leader is going to allow their nationals to be killed in the name of the EU? What problem is this reaction force meant to solve? Does Borrell seriously entertain the idea the EU would be able to step into the void the US left?" September 15, 2021. In her annual State of the Union speech delivered to the European Parliament in Strasbourg, von der Leyen urged greater military independence from the United States. "Europe can — and clearly should — be able and willing to do more on its own," she said. She called for a "European Defense Union" but admitted the "lack of political will" to "build the foundation for collective decision-making." October 2, 2021. European Council President Charles Michel, speaking at an award ceremony of the International Charlemagne Prize, declared that "2022 will be the year of European defense." October 5-6, 2021. At an EU Summit in Slovenia, EU member states were so divided on the issue of strategic autonomy that the topic was not even included in the summit's final declaration. To create the illusion of consensus, Michel issued an "oral conclusion" of the summit: "To become more effective and assertive on the international stage, the European Union needs to increase its capacity to act autonomously." A History of Failure The debate over building a European army has been going on since the end of World War 2. In 1950, France proposed creating a common army to protect Western Europe from the Soviet Union without having to rearm Germany. A treaty creating the so-called European Defense Community was signed in 1952, but it was never ratified by the French Parliament due to concerns that France would lose its sovereignty to a multilateral decision-making body. In the late 1990s, after the EU and its member states failed to prevent a decade of bloodletting in the Yugoslav Wars, and after the United States intervened, European leaders called for the creation of a European Rapid Reaction Force capable of acting in future crises. In 2007, after years of debate, the EU established two so-called EU battlegroups consisting of 1,500 troops each to respond to crises, but due to intra-European disputes over financing and deployment, they have never been used. The European Union is now calling for the battlegroups to be rebranded as a "First Entry Force" comprised of 5,000 troops. It remains unclear why EU leaders think the latter will achieve what the former could not. In any event, a force that small is nowhere near enough to give the EU "strategic autonomy" from the United States. Over the decades, the European quest for "strategic autonomy" has resulted in dozens of summits, declarations, concept papers, reports, institutions, terms and acronyms, including: Petersberg Declaration; St. Malo Declaration; Berlin Plus Agreement; Franco-German Brigade; German-Netherlands Corps; Belgian-Dutch Naval Cooperation Accord; European Security and Defense Policy (ESDP); Common Security and Defense Policy (CSDP); Permanent Structured Cooperation (PESCO); European Capabilities Action Plan (ECAP); Headline Goals; EU Battlegroups; European Gendarmerie Force; European Rapid Operational Force (EUROFOR); European Maritime Force; Eurocorps; Combined Joint Expeditionary Force (CJEF); Entente frugale; European Defense Agency; European Security Strategy; European Intervention Initiative (EI2); EUFOR; European Command and Control (C2); European Union Military Committee (EUMC); European Union Military Staff (EUMS); Joint Support Coordination Cell (JSCC); Military Planning and Conduct Capability (MPCC); Political and Security Committee (PSC); Politico-Military Group (PMG); European Defense Fund; Coordinated Annual Review on Defense (CARD); and the EU's ongoing "Strategic Compass" process, among many others. German Defense Minister Annegret Kramp-Karrenbauer, in a recent opinion article published by Politico, concluded that "illusions of European strategic autonomy must come to an end." She added: "Europeans will not be able to replace America's crucial role as a security provider. We have to acknowledge that, for the foreseeable future, we will remain dependent." Lack of Capabilities An important obstacle to building a European army is the reluctance of EU governments to invest in defense. At the 2014 Wales Summit of the North Atlantic Treaty Organization, allies agreed to spend a minimum of 2% percent of their gross domestic product (GDP) to defense spending. In 2020, only nine of NATO's 21 European members honored their pledges, according to data supplied by NATO. Germany — the biggest economy in the EU and the fourth-biggest in the world — spent only 1.53% of GDP on defense in 2020. That represents an increase of less than 0.5% of GDP since 2015. France, the EU's second-biggest economy, spent 2.01% of GDP on defense in 2020, an increase of only 0.3% of GDP since 2015. Italy, the EU's third-biggest economy, spent 1.41% of GDP on defense in 2020, while Spain, the EU's fourth-biggest economy, spent a mere 1.02% of GDP on defense in 2020, according to NATO data. The numbers show that defense spending is not a priority in most European countries. The German armed forces (the Bundeswehr) are in an especially sad state of disrepair. A damning report published by the German Parliament in January 2019 found that critical equipment was scarce and that readiness and recruitment were at all-time lows. "No matter where you look, there's dysfunction," said a high-ranking German officer stationed at Bundeswehr headquarters in Berlin. A May 2018 report by the German magazine Der Spiegel revealed that only four of Germany's 128 Eurofighter jets were combat ready. Germany's obligation to NATO requires it to have at least 80 combat-ready jets for crisis situations. At the end of 2017, not one of the German Air Force's 14 large transport planes was available for deployment due to a lack of maintenance, according to the German Parliament. In October 2017, a spokesman for the German Navy said that all six of Germany's submarines were in the dock for repairs. In February 2015, Germany's defense ministry admitted that its forces were so under-equipped that they had to use broomsticks instead of machine guns during a NATO exercise in Norway. Much of the blame falls on German Chancellor Angela Merkel. During her 16 years in office, she has been content to free-ride on the U.S. defense umbrella. Also to blame is Ursula von der Leyen, who was German defense minister between 2014 and 2019, before she was promoted to lead the European Commission, and who now wants to build a European army. As German defense minister, von der Leyen was plagued by scandals and accused of cronyism, mismanagement and nepotism. EU affairs analyst Matthew Karnitschnig quipped: "With Merkel on her way out, fixing the Bundeswehr will likely be up to her successor. Until then, plans for a 'European Army' that includes Germany have about as much chance of getting off the ground as the German Air Force." France, which has just under 300,000 active-duty personnel, has the largest military in Europe. Still, it remains a regional power, not a global one. In September 2021, the RAND Corporation, in a major study — "A Strong Ally Stretched Thin: An Overview of France's Defense Capabilities from a Burdensharing Perspective" — concluded that the French military suffers many shortcomings that render as "limited" its capacity to sustain a high-end, conventional conflict. The French Army "faces a challenge with respect to readiness, owing to past budget cuts and austerity measures, a small number of weapon systems, and the burden of sustaining ongoing overseas operations," according to RAND. The French Air Force "suffers from limited capacity" and "severely lacks strategic airlift." The French Navy, which has only one aircraft carrier, like France's other services, "has issues with readiness, and munitions stocks reportedly are low," according to RAND. The report's takeaway is that the French military would require decades of preparation and massive budget increases to realistically form the basis for a European army. Poland, which is opposed to a European army because it would "weaken" the armies of NATO's member states, plans to double the size of its armed forces to 250,000 soldiers and 50,000 reserves. The expansion, announced on October 26, would make the Polish military the second-largest in Europe, ahead of that of the United Kingdom. In January 2020, Poland signed a contract worth $4.6 billion to purchase 32 F-35A fighter jets from the United States. In October 2018, Belgium signed a $4.5 billion deal to purchase 34 F-35A fighter jets from the United States. "The offer from the Americans was the best in all our seven evaluation criteria," Belgian Defense Minister Steven Vandeput wrote on Twitter. "The decision is a setback for Britain, Germany, Italy and Spain, who are behind the Eurofighter program, and also means the rejection of an informal French offer to sell Belgium the Rafale fighter built by Dassault Aviation," according to Reuters. This implies that in the future the Belgian and Polish militaries will be further integrated with the United States and NATO rather than with a hypothetical European army. Macron's Motives One of the most vocal champions of the idea of a European army is French President Emmanuel Macron. He must know that an independent EU military remains only a distant possibility, despite his describing the NATO alliance as "brain dead." As German Chancellor Angela Merkel is set to retire, it appears that much of Macron's posturing on European "strategic autonomy" is part of a French nationalist campaign strategy aimed at presenting France as a great power that dominates the European Union. Macron seems to be trying to appeal to French voters while carving out a role for himself to replace Merkel as the new leader of Europe. Macron, who has yet to declare his candidacy, faces reelection in April 2022. Currently he is the clear first-round front-runner at 24%, according to recent polls cited by Politico. His main rivals are two nationalists: Marine Le Pen of the right-leaning National Rally party, and Éric Zemmour, a French essayist and media personality. Macron has been calling for a European army for several years, but his professed aspiration for "strategic autonomy" shifted into high gear after U.S. President Donald J. Trump threatened to withdraw from NATO if European member states refused to pay their fair share. Trump's warning, which appears to have been more of a bluff than a real threat, prompted many European countries to increase their defense spending, even if most are still below the agreed-upon threshold of 2% of GDP. Macron subsequently was dealt a humiliating blow by the Biden administration. In September 2021, Australia, the United Kingdom and the United States announced a new tripartite strategic alliance aimed at countering China's growing assertiveness in the Indo-Pacific region. Notably, the so-called AUKUS agreement does not include any member state of the European Union, which was completely left in the dark about the new alliance. AUKUS was announced on September 15, just hours before the EU unveiled its much-hyped "Strategy for Cooperation in the Indo-Pacific." The EU had been hoping that its new plan would highlight its "strategic autonomy" from the United States in the Pacific region. Instead, the EU was eclipsed by AUKUS and exposed as a paper tiger. Adding insult to injury, Australia announced that as part of the AUKUS deal, it had cancelled a multi-billion-dollar submarine contract — once dubbed the "contract of the century" — under which France was to supply Australia with 12 diesel-powered submarines. Instead, Australia said that it would be buying nuclear submarines from the United States. France has reacted angrily to its change of fortunes. French Foreign Minister called AUKUS a "stab in the back." The French Ambassador to Australia, Jean-Pierre Thébault, said that Australia's decision to cancel the submarine deal was akin to "treason." The French government claimed that the Australian decision caught Paris by surprise, but the subsequent leak of a text message between Macron and Australian Prime Minister Scott Morrison revealed that Macron knew well in advance that Australia was planning to cancel the contract. The AUKUS humiliation set Macron into a rage and appears to be fueling his increasingly frenzied calls for "strategic autonomy." An advisor to Macron said: "We could turn a blind eye and act as if nothing had happened. We think that would be a mistake for all Europeans. There really is an opportunity here." So far, however, only Italy and Greece have come out in support of Macron's calls for an autonomous EU military force. In September 2021, France and Greece signed a new defense and security agreement in which France pledged to provide military assistance to Greece in the event of an attack by a third country, even if such a country, Turkey, is a member of NATO. Macron said the deal, worth $3 billion to France, was a "milestone" in European defense because it strengthened the EU's "strategic autonomy." Greek Prime Minister Mitsotakis described the Greek-French defense deal "a first step towards the strategic autonomy of Europe." But some in the EU were skeptical of the deal and are concerned it will only serve to inflame tensions between Greece and Turkey. "It is a bit bizarre to say the pact contributes to European sovereignty," an unnamed EU diplomat told Politico. "By all accounts, this is a traditional 19th-century defense pact between two European powers." Danish Prime Minister Mette Frederiksen, in an interview with the Danish newspaper Politiken, said that Macron was escalating his dispute with the United States way out of proportion: "I think it is important to say, in relation to the discussions that are taking place right now in Europe, that I experience U.S. President Joe Biden as being very loyal to the transatlantic alliance. "I think in general that one should refrain from lifting some specific challenges, which will always exist between allies, up to a level where they are not supposed to be. I really, really want to warn against this." Meanwhile, the British newspaper, The Telegraph, on September 22 reported that Macron had offered to put France's seat on the United Nations Security Council "at the disposal of the European Union" if its governments back Macron's plans for an EU army. The French Presidency later denied the report: "Contrary to the assertions reported this morning, no, France has not offered to leave its seat on the United Nations Security Council. It belongs to France, and it will remain so." France assumes the EU's six-month rotating presidency on January 1, 2022. During that time, Macron is sure to continue pushing for "strategic autonomy" from the United States, including at a "Summit on European Defense" scheduled for the first half of 2022. Select Commentary Analysts James Jay Carafano and Stefano Graziosi, in an essay, "Europe's Strategic Autonomy Fallacy," wrote: "Strategic autonomy might sound empowering, but it remains little more than a distraction and irritant to the transatlantic community and the real issues. European nations need more national defense capacity. Europe needs a strong, innovative, and productive defense industrial base, and Europeans need to take collective security and its role in a Europe whole, free, prosperous and at peace seriously. These problems can be better addressed by building the militaries the Europeans need than the fantasies Brussels wants." A senior Tory MP, Bob Seely, warned: "If the EU Army undermines NATO, or results in the separation of the U.S. and Europe or produces a paper army, Europe will be committing the most enfeebling and dangerous act of self-harm since the rise of fascism in the 1930s. An EU Army will amount to European de-arming." EU affairs expert Dave Keating noted: "The problem is that while leaders like Macron have tasked the Commission to make the EU more geopolitically strong, he and others still refuse to give the Commission the tools that would make it strong. For the last decade, the European Council has consistently opposed measures that would strengthen the Commission, because it would mean diluting the power of national governments.... "EU national leaders are all well aware of the need for Europe to speak with one voice if it ever wants to be taken seriously on the global stage. But their natural instinct to preserve their own power gets in the way of achieving this goal." In an interview with France 24, the French state-owned television network, Richard Whitman, a professor of politics and international relations at the University of Kent, said: "It will be hard to convince some member states that collective EU defense would bring the same security as NATO's U.S.-backed defense arrangement. Nobody in the EU has ever been able to come up with a decision-making arrangement that takes national divides into account while facilitating expeditious decision-making; it's either the lowest common denominator or grand rhetorical comments tied to absurd propositions. Military action is politically defensible only when taken by national leaders and parliaments — and it's difficult to see that being worked around." Writing for the Wall Street Journal, Walter Russell Mead noted that the entire premise of European leaders that the United States was "disengaging" from international affairs was based on a "significant misunderstanding." He wrote: "Many Europeans, including some seasoned observers of the trans-Atlantic scene, believe that if the U.S. sees the Indo-Pacific as the primary focus of its foreign policy, it must be writing off the rest of the world. These observers look at the American withdrawal from Afghanistan and imagine that this is the kind of headlong retreat they can expect from America in Europe and the Middle East. "This is unlikely. American interests are global, and American presidents, like it or not, can't confine their attention to a single world theater." Polish analyst Łukasz Maślanka tweeted that the French arguments for "strategic autonomy" from the United States are lacking in substance: "French reports from the European Council summit in Slovenia assess Macron's chances of convincing Europeans to EU defense. A critical tone prevails against the reluctant Balts and Poles who still stubbornly believe in NATO despite the U.S.'s allegedly inevitable withdrawal from Europe. "However, it is French observers who lack lucidity: the U.S. presence in Central Europe has been growing, not diminishing in recent years. It is many times greater not only than what France currently delivers, but what it could ever deliver. "Finally, if the U.S. really did intend to turn its back on Europe, the dismay in Paris would be no less than in Warsaw. It's harmful to drive something that can finally become a self-fulfilling prophecy." The London-based magazine, The Economist, wrote that Europeans feel "unnerved" by Macron's push for "strategic autonomy" from the United States: "Most of them, especially those near the Russian border, are happy to rely on America's security guarantee. Few share France's willingness to splurge on defense, or its expeditionary military culture. (Germany, especially, does not.) Nobody agrees what 'strategic autonomy' actually means. Low odds, however, seldom deter Mr. Macron. After the latest snub, the unhugged French president will doubtless conclude that he has little choice but to keep trying." John Krieger, writing for the UK-based The Spectator, noted: "Given that Emmanuel Macron has nailed his colors to the mast on driving European integration deeper, a refusal by European member states to follow suit would be embarrassing and not a good omen for his forthcoming presidency of the EU in January." Kristjan Mäe, head of the Estonian defense ministry's NATO and EU department said: "The EU is not a credible substitute for what NATO represents. You will not see any appetite for the European army amongst member states." Analyst Brooks Tigner, writing for the Atlantic Council, concluded: "Even if national capitals wanted to lunge for a common army, there are so many technical, legal, and administrative differences between their militaries that it would take decades to produce a smoothly functioning force. "Those differences boil down to some of the most mundane things such as soldiers' rights. Strong unions representing military personnel in rich Scandinavian countries, for instance, ensure that their soldiers enjoy levels of physical comfort, hardship pay, and access to medical care that their equivalents in poorer southern EU countries can only dream of for an exercise, much less an actual operation. Whose union rules would govern a common European army? And how would that be financed? "The differences are even sharper at the strategic level when it comes to intelligence. As a whole, the EU countries (and those of NATO as well) do not trust one another with sensitive information: it is parceled out very parsimoniously from one capital to a few trusted others. It would never work for a truly common army. Changing that alone via twenty-five-way trust for intelligence-sharing within PESCO would take years and years. Some deem it impossible. "Conclusion: any talk of creating a fully-fledged common army, even within the next generation, is just that: jaw-jaw and not real-real." Tyler Durden Sat, 11/13/2021 - 08:10.....»»

Category: blogSource: zerohedgeNov 13th, 2021

Social media was once a neutral battleground. Now, both Republicans and Democrats have demonized them to drive political agendas.

Facebook, Google, Twitter, and others have become punching bags on Capitol Hill, with lawmakers accusing them of both censorship and turning a blind eye to hate speech and lies. Facebook, Google, Twitter, and others have become targets on Capitol Hill, with lawmakers using them to push their agendas. Google; Twitter; Instagram; Facebook; Samantha Lee/Insider Lawmakers have weaponized tech firms and their content moderation decisions to drive agendas. It's the culmination of a slew of factors, like the post-2016 techlash and the Trump administration. Experts say tech animosity has become "a core Republican tenet," and progressives want more rules. See more stories on Insider's business page. Tech companies haven't had an easy time lately, with lawsuits and critique lobbed at them.But the platforms have also been dragged into a new war in recent years: lawmakers using them and the decisions they make as punching bags to drive their political agendas. Experts told Insider it's the product of the post-2016 election realization that online platforms were not all benign, a Trump-era political marketing test, internet platforms' shift from their historical hands-off approach to content moderation, and mounting polarization in a country where a political tug-of-war was growing ever nastier."We've always seen polarization in the US," Ari Lightman, professor of digital media at Carnegie Mellon and social media expert, told Insider. "Social media companies just escalate that."Republicans and Democrats want Big Tech reined in - for very different reasons Facebook CEO Mark Zuckerberg at a Senate hearing in 2018. Chip Somodevilla/Getty Images One of the first major instances of Trump accusing a tech company of anti-conservative bias was in August 2018, when he said Google was promoting former President Barack Obama's speeches ahead of his own in search results."Politicians are always looking for successful marketing, and he was testing the idea," John Samples - a vice president of the CATO Institute and a member of Facebook's Oversight Board - told Insider.It worked, and from that point on, every decision that companies made around what to flag, remove, or keep up on their sites became another data or talking point to support a cause.For conservatives, that cause was the belief that internet platforms are hellbent on silencing them. And for progressives, the argument that tech platforms don't do enough to crack down on false facts and hate speech dates back to Obama-era scholars, Samples said.Once the 2016 US presidential election came around, it didn't just spawn the "techlash" - it produced a president whose favorite messengers were the very internet platforms he would end up crusading against, and "antipathy toward social media elites became a core Republican tenet," Samples said.The divisive tone on social media became even more pronounced by the 2020 election cycle. Republicans repeated Trump's unfounded claims that the election was stolen, riling up a base that was already heated after a year of pandemic-driven safety protocols. Democrats had to use their platforms to repeat that it was the most secure election in history. Both sides were shouting into a void of followers who already believed what they were saying.And through it all, members of Congress began pouncing on opportunities to grill tech CEOs, which often devolved into political theater, even though some of tech's biggest critics in Washington happily use the platforms to their advantage to win elections. Twitter CEO Jack Dorsey and Sen. John Kennedy at a November hearing in 2020. Bill Clark-Pool/Getty Images After Zuckerberg reportedly said he'd "go to the mat and fight" threats to break up the company, Democratic Rep. Alexandria Ocasio-Cortez tweeted that his comments signaled he was against keeping corporate power and monopolies in check.Sen. Elizabeth Warren tweeted last month that "no company should be too big to be held accountable for spreading misinformation" after the Wall Street Journal reported an algorithm change favored divisive false content.-Elizabeth Warren (@SenWarren) September 17, 2021Republican Reps. Madison Cawthorn and Marjorie Taylor-Greene and Sens. Josh Hawley and Ted Cruz are some of the loudest voices posting about alleged censorship.Cruz in January tweeted that "Big Tech's PURGE, censorship & abuse of power is absurd & profoundly dangerous," after platforms began suspending Trump following the January 6 Capitol insurrection.-Ted Cruz (@tedcruz) January 9, 2021 "Some of that is just politics, some of that is a general reaction," Paul Barrett, a deputy director at NYU's Stern Center, told Insider. Barrett was among the NYU researchers who published a report that disproved conservatives' claims of anti-right discrimination online.Social media companies and the rules they enforce are now inextricably subject to vicious political judgment.Zuckerberg "went from being angelic to being Satan, and it happened in three or four years," Samples said. "But it's really tied up in the politics of the country."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 6th, 2021

How tech platforms were dragged into America"s polarized political tug-of-war

Facebook, Google, Twitter, and others have become punching bags on Capitol Hill, with lawmakers using them to drive their own political agendas. Facebook, Google, Twitter, and others have become targets on Capitol Hill, with lawmakers using them to push their agendas. Google; Twitter; Instagram; Facebook; Samantha Lee/Insider Lawmakers have weaponized tech firms and their content moderation decisions to drive agendas. It's the culmination of a slew of factors, like the post-2016 techlash and the Trump administration. Experts say tech animosity has become "a core Republican tenet," and progressives want more rules. See more stories on Insider's business page. Tech companies haven't had an easy time lately, with lawsuits and critique lobbed at them.But the platforms have also been dragged into a new war in recent years: lawmakers using them and the decisions they make as punching bags to drive their political agendas. Experts told Insider it's the product of the post-2016 election realization that online platforms were not all benign, a Trump-era political marketing test, internet platforms' shift from their historical hands-off approach to content moderation, and mounting polarization in a country where a political tug-of-war was growing ever nastier."We've always seen polarization in the US," Ari Lightman, professor of digital media at Carnegie Mellon and social media expert, told Insider. "Social media companies just escalate that."Republicans and Democrats want Big Tech reined in - for very different reasons Facebook CEO Mark Zuckerberg at a Senate hearing in 2018. Chip Somodevilla/Getty Images One of the first major instances of Trump accusing a tech company of anti-conservative bias was in August 2018, when he said Google was promoting former President Barack Obama's speeches ahead of his own in search results."Politicians are always looking for successful marketing, and he was testing the idea," John Samples - a vice president of the CATO Institute and a member of Facebook's Oversight Board - told Insider.It worked, and from that point on, every decision that companies made around what to flag, remove, or keep up on their sites became another data or talking point to support a cause.For conservatives, that cause was the belief that internet platforms are hellbent on silencing them. And for progressives, the argument that tech platforms don't do enough to crack down on false facts and hate speech dates back to Obama-era scholars, Samples said.Once the 2016 US presidential election came around, it didn't just spawn the "techlash" - it produced a president whose favorite messengers were the very internet platforms he would end up crusading against, and "antipathy toward social media elites became a core Republican tenet," Samples said.The divisive tone on social media became even more pronounced by the 2020 election cycle. Republicans repeated Trump's unfounded claims that the election was stolen, riling up a base that was already heated after a year of pandemic-driven safety protocols. Democrats had to use their platforms to repeat that it was the most secure election in history. Both sides were shouting into a void of followers who already believed what they were saying.And through it all, members of Congress began pouncing on opportunities to grill tech CEOs, which often devolved into political theater, even though some of tech's biggest critics in Washington happily use the platforms to their advantage to win elections. Twitter CEO Jack Dorsey and Sen. John Kennedy at a November hearing in 2020. Bill Clark-Pool/Getty Images After Zuckerberg reportedly said he'd "go to the mat and fight" threats to break up the company, Democratic Rep. Alexandria Ocasio-Cortez tweeted that his comments signaled he was against keeping corporate power and monopolies in check.Sen. Elizabeth Warren tweeted last month that "no company should be too big to be held accountable for spreading misinformation" after the Wall Street Journal reported an algorithm change favored divisive false content.-Elizabeth Warren (@SenWarren) September 17, 2021Republican Reps. Madison Cawthorn and Marjorie Taylor-Greene and Sens. Josh Hawley and Ted Cruz are some of the loudest voices posting about alleged censorship.Cruz in January tweeted that "Big Tech's PURGE, censorship & abuse of power is absurd & profoundly dangerous," after platforms began suspending Trump following the January 6 Capitol insurrection.-Ted Cruz (@tedcruz) January 9, 2021 "Some of that is just politics, some of that is a general reaction," Paul Barrett, a deputy director at NYU's Stern Center, told Insider. Barrett was among the NYU researchers who published a report that disproved conservatives' claims of anti-right discrimination online.Social media companies and the rules they enforce are now inextricably subject to vicious political judgment.Zuckerberg "went from being angelic to being Satan, and it happened in three or four years," Samples said. "But it's really tied up in the politics of the country."Read the original article on Business Insider.....»»

Category: smallbizSource: nytOct 2nd, 2021

Futures Slide, Nasdaq Plunges As Yields Surge And Oil Tops $80

Futures Slide, Nasdaq Plunges As Yields Surge And Oil Tops $80 For much of 2021, a vocal contingent of market bulls had claimed that there is no way the broader market could sell off as long as the gigacap tech "general" refused to drop. Well, it looks like that day is finally upon us because this morning US equity futures are sliding again, continuing their Monday drop as yields from the US to Germany again, the 10Y TSY rising as high as 1.55%, driven to an extent by Fed tapering fears but mostly by the surge in oil which has pushed Brent above $80, the highest price since late 2018. The dollar gained amid the deteriorating global supply crunch from oil to semiconductors. The surge in oil sparked a new round of stagflation fears, sending Nasdaq futures down 240 points or 1.3% as the yield on the benchmark 10-year U.S. Treasury climbed sharply. S&P 500 and Dow Jones futures also retreated, with spoos sliding below 4,400 as to a session low of 4,390. Rising bond yields prompted a shift from growth to cyclical stocks in the United States, in a move that analysts expect could become more permanent after a prolonged period of supressed bond yields. The premarket selloff was led by semiconductor stocks which tracked similar falls for European peers, as a rising 10-year Treasury yield puts pressure on the tech sector. Applied Materials Inc. led a slump in chip stocks in New York premarket trading while Nvidia was down 2.6%, AMD -2.1%, Applied Materials -2.9%, Micron -1.6%. Meanwhile retail trader favorite meme stock Naked Brand Group, an underwear and swimwear retailer, rises again after having surged 40% in the past two trading sessions after Chairman Justin Davis-Rice said in a letter to shareholders that he believes the company has found a “disruptive” potential acquisition in the clean technology sector. Frequency Electronics also soared after being awarded a contract by the Office of Naval Research to develop an atomic clock. Chinese stocks listed in the U.S. were mixed and semiconductor stocks declined. Here are some of the other notable U.S. movers today: iPower (IPW US) shares rise as much as 61% in U.S. premarket trading after the online hydroponics equipment retailer posted 4Q and FY21 earnings Alibaba (BABA US) rises 2.5% in U.S. premarket trading after the company’s shares listed in Hong Kong rose, adding to the Hang Seng Tech Index’s gains Frequency Electronics (FEIM US) soars 20% in U.S. premarket trading after being awarded a contract by the Office of Naval Research to develop an atomic clock Concentrix (CNXC) jumped 5.9% in Monday after hours trading after setting its first dividend payment and buyback program since being spun off from from Synnex in December Brookdale Senior Living (BKD US) shares fell in extended trading on Monday after announcing a $200 million convertible bond offering Altimmune (ALT US) rose as much as 4.2% in Monday postmarket trading on plans to announce results for an early stage study of ALT-801 in overweight people on Tuesday Ziopharm Oncology (ZIOP US) fell in extended trading after company said it cut about 60 positions, or a more than 50% reduction in personnel, to extend its cash runway into 1H 2023 Montrose Environmental Group (MEG US) was down 2.8% Monday postmarket after offering shares via JPMorgan, BofA Securities, William Blair The main catalyst for the stock selloff was the continued drop in Treasurys which sent the 10-year Treasury rising as high as 1.55% while shorter-dated rates surged toward pre-pandemic levels. This in turn was driven by the relentless meltup in commodities: overnight Brent roared above $80 a barrel - on its way to Goldman's revised $90 price target - on louder signs that demand is running ahead of supply and depleting inventories as the world finds itself in an unprecedented energy crisis. The international crude benchmark extended a recent run of gains to hit the highest since October 2018, while West Texas Intermediate also climbed. Oil’s latest upswing has come with a flurry of bullish price predictions from banks and traders, forecasts for surging demand this winter, and speculation the industry isn’t investing enough to maintain supplies. The jump to $80 also is adding inflationary pressure to the global economy at a time when prices of energy commodities are soaring. European natural gas, carbon permits and power rose to fresh records Tuesday, with little sign of the rally slowing. As Bloomberg notes, traders have begun reassessing valuations amid multiplying global risks, while Fed officials have communicated increasingly hawkish signals in recent days as supply-chain bottlenecks threaten to keep inflation elevated. China’s growth slowdown which saw Goldman lower its q/q Q3 GDP forecast to a flat 0.0%, and a debt crisis in the nation’s property market.have also fueled the risk-off shift. "Central bankers have set out how they want to normalize monetary policy for some time,” Chris Iggo, chief investment officer for core investments at AXA Investment Managers, said in a note. “That process could start soon. The realization of this has the potential to provoke some volatility in rates and equities." Elsewhere, European stocks also declined with the Stoxx Europe 600 dragged down most by technology shares. Europe’s Stoxx Tech Index drops as much as 2.8% to a five-week low after falling 1.5% on Monday having previously touched its highest level since 2000 earlier in the month. Single-stock downgrades also weighed. Stocks which performed particularly well this year are among the biggest fallers, with chip equipment makers BE Semi -4.6% and ASML -4.4%, and chipmaker Nordic Semi down 4.2%. Among other laggards, Logitech drops as much as 8.5% after being downgraded to underweight at Morgan Stanley. Earlier in the session, Asian stocks fell for the first time in four days as declines in technology names overshadowed a rally in energy shares.  The MSCI Asia Pacific Index dropped as much as 0.7%, with a jump in U.S. Treasury yields weighing on richly-valued tech stocks. That’s even as the region’s oil and gas shares climbed amid signs of a global energy crunch. Chipmakers Taiwan Semiconductor Manufacturing and Samsung Electronics were the biggest drags on the Asian benchmark. “The climb in yields led to the selling of growth stocks that have been strong, with investors rotating into names that are sensitive to business cycles - not unlike what happened in U.S. equities,” said Shutaro Yasuda, an analyst at Tokai Tokyo Research Center.  Asian equities have been recovering after being whipsawed by concerns over any fallout from China Evergrande Group’s debt troubles. As worries over the distressed property developer abate, the pace of rise in Treasury yields and global inflation data are being closely watched for clues on the U.S. Federal Reserve’s policy stance. Australia’s equity benchmark was among the biggest losers in Asia Tuesday, dragged down by losses in mining and healthcare stocks. Still, broad-based gains in oil explorers and refiners helped mitigate the Asian market’s retreat. In South Korea, importers and distributors of liquefied petroleum gas and liquefied natural gas rallied as the price of natural gas jumped. The future of Evergrande is being forensically scrutinized by investors after the company last Friday did not meet a deadline to make an interest payment to offshore bond holders. Evergrande has 30 days to make the payment before it falls into default and Shenzen authorities are now investigating the company's wealth management unit. Without making reference to Evergrande, the People's Bank of China (PBOC) said Monday in a statement posted to its website that it would "safeguard the legitimate rights of housing consumers". Widening power shortages in China, meanwhile, halted production at a number of factories including suppliers to Apple Inc and Tesla Inc and are expected to hit the country's manufacturing sector and associated supply chains. Analysts cautioned the ongoing blackouts could affect the country's listed industrial stocks. "What we see in China with the developers and the blackouts is going to be a negative weight on the Asian markets," Tai Hui, JPMorgan Asset Management's Asian chief market strategist told Reuters. "Most people are trying to work out the potential contagion effect with Evergrande and how far and wide it could go. We keep monitoring the policy response and we have started to see some shift towards supporting homebuyers which is what we have been expecting." In rates, as noted above, the selloff in Treasuries gathered pace in Asia, early Europe session leaving yields cheaper by 3.5bp to 5.5bp across the curve with 20s and 30s extending above 2% and 10-year through 1.50%. Treasury 10-year yields traded around 1.53%, cheaper by 4.5bp on the day after topping at 1.55%, highest since mid-June; in front- and belly, 2- and 5-year yields remain near cheapest levels in at least 18 months; in 10-year sector, gilts lag by 3bp vs. Treasuries while German yields are narrowly richer. Gilts underperformed further, where long-end yields are cheaper by up to 7.5bp on the day. Treasury futures volumes over Asia, early European session were at more than twice usual levels, with most activity seen in 10-year note contract; eurodollar futures volumes were also well above recent average. With recent aggressive move higher in yields, threat of convexity hedging has exacerbated moves as rate hike premium continues to filter into the curve after last week’s FOMC. Auctions conclude Tuesday with 7-year note sale, while busy Fed speaker slate includes Fed Chair Powell. In FX, the Bloomberg dollar index reached the highest level in more than a month as rising energy costs drove up Treasury yields for a fourth session. The dollar gained against all its peers; Japan’s currency slid for a fifth day against the greenback before a speech Tuesday from Fed Chair Jerome Powell who will say inflation is elevated and is likely to remain so in coming months, according to prepared remarks. Treasury two-year yields rose to the highest since March 2020. “Dollar-yen saw the clearest expression of Treasury yield increases and we attributed this divergence to the surge in energy prices,” says Christopher Wong, senior foreign-exchange strategist at Malayan Banking in Singapore. U.S. natural gas futures soared to their highest since February 2014 on concern over tight inventories. Brent oil topped $80 a barrel amid signs demand is outrunning supply. The euro slipped to hit its lowest level since Aug. 20, nearing the year-to-date low of $1.1664. The Treasury yield curve bear steepened; euro curves followed suit, with the yield on U.K. 10-year notes soaring past 1% for the first time since March 2020 on the prospects for Bank of England policy tightening. In commodities, Crude futures extend Asia’s gains. WTI rises as much as 1.6% to highs of $76.67 before stalling. Brent holds above $80. Spot gold trades around last week’s lows near $1,740/oz. Base metals are mixed: LME aluminum outperforming, rising as much as 1.1%; nickel and copper are in the red. Looking at the day ahead, one of the main highlights will be the appearance of Fed Chair Powell, and Treasury Secretary Yellen at the Senate Banking Committee. Otherwise, central bank speakers include ECB President Lagarde, Vice President de Guindos, and the ECB’s Schnabel, Panetta and Kazimir, along with the BoE’s Mann and the Fed’s Evans, Bowman and Bostic. US data highlights include the US Conference Board’s consumer confidence indicator for September and the FHFA house price index for July. Market Snapshot S&P 500 futures down 0.7% to 4,403.50 STOXX Europe 600 down 1.2% to 456.83 MXAP down 0.4% to 200.06 MXAPJ down 0.4% to 641.05 Nikkei down 0.2% to 30,183.96 Topix down 0.3% to 2,081.77 Hang Seng Index up 1.2% to 24,500.39 Shanghai Composite up 0.5% to 3,602.22 Sensex down 1.4% to 59,209.94 Australia S&P/ASX 200 down 1.5% to 7,275.55 Kospi down 1.1% to 3,097.92 Brent Futures up 0.8% to $80.15/bbl Gold spot down 0.4% to $1,742.61 U.S. Dollar Index up 0.20% to 93.57 German 10Y yield rose 2.7 bps to -0.196% Euro down 0.1% to $1.1681 Top Overnight News from Bloomberg Chinese authorities are striving to signal to traders that whatever happens to China Evergrande Group, its debt crisis won’t spiral out of control or derail the economy Brent oil roared above $80 a barrel, the latest milestone in a global energy crisis, on signs that demand is running ahead of supply and depleting inventories As the dust settles on Germany’s election, control over the finances of Europe’s largest economy could fall to a 42-year-old former tech entrepreneur who wants to lower taxes and tighten spending Wells Fargo agreed to pay $37 million in penalties and forfeiture to settle U.S. claims that it overcharged almost 800 commercial customers that used its foreign exchange services, the latest in a series of scandals at the bank A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded mixed following on from a Wall Street lead where value outperformed growth and tech suffered as yields rose. ASX 200 (-1.5%) was the laggard with losses in healthcare, gold miners and tech frontrunning the declines which dragged the index beneath 7300. Nikkei 225 (-0.2%) was lacklustre and briefly approached 30k to the downside but then bounced off worse levels amid a softer currency, while the KOSPI (-1.1%) also declined following a suspected North Korean ballistic missile launch and with a recent South Korean court order to sell seized Mitsubishi Heavy assets as compensation for wartime forced labour, threatening a flare up of tensions between Japan and South Korea. Hang Seng (+1.2%) and Shanghai Comp. (+0.5%) were underpinned after the PBoC continued to inject liquidity ahead of the approaching National Day holidays and with Hong Kong led higher by strength in property names after the PBoC stated it will safeguard legitimate rights and interests of housing consumers which also provided Evergrande-related stocks further reprieve from their recent sell-off. Finally, 10yr JGBs retreated on spillover selling from T-notes after yields rose on the back of further Fed taper rhetoric and with prices not helped by the uninspiring 2yr and 5yr auctions stateside, while weaker results at the 40yr JGB auction also provided a headwind for prices. Top Asian News Top-Performing Global Luxury Stock Seen Cooling After 680% Gain China Power Price Hike Sought Amid Supply Crunch: Energy Update Macau Evacuates Airport Quarantine Hotel After Outbreak Iron Ore Dips Again as China Power Crisis Adds to Steel Curbs Bourses in Europe extended on the losses seen at the cash open and trade lower across the board (Euro Stoxx 50 -1.7%; Stoxx 600 -1.7%) as sentiment retreated from a mixed APAC handover as month-end looms alongside tier 1 data and a slew of central bank speakers. US equity futures have also succumbed to the mood in Europe alongside the surge in global yields – which takes its toll on the NQ (-1.5%) vs the ES (-0.8%), YM (-0.4%) and RTY (-0.3%). From a more technical standpoint, ESZ1 fell under its 50 DMA (4,431) and tested the 4,400 level to the downside, whilst NQZ1 briefly fell under 15k and the YMZ1 inches towards its 100 DMA (34,489). Back to Europe, the FTSE 100 (-0.4%) sees losses to a lesser extent vs its European peers as energy prices and yields keep the index oil giants and banks supported – with some of the top gainers including Shell (+2.8%), BP (+2.1%). Sectors in Europe are predominantly in the red, but Oil & Gas buck the trend. Sectors also portray more of a defensive bias, whilst the downside sees Tech, Real Estate, and Travel & Leisure at the foot of the bunch, with the former hit by the rise in yields, which sees the US 10yr further above 1.50%, the 20yr above 2.00% and the UK 10yr hitting 1.00% for the first time since March 2020. In terms of individual movers, Smiths Group (+3.8%) is at the top of the Stoxx 600 following encouraging earnings. ING (+0.3%) holds onto gains after sources noted SocGen's (-0.6%) interest in ING's retail banking arm. Finally, chip-maker ASM International (-3.5%) has succumbed to the broader tech weakness despite upping its guidance and announcing capacity expansion by early 2023. Top European News U.K. 10-Year Yield Rises Past 1% for First Time Since March 2020 Goldman’s Petershill Unit Valued at $5.5 Billion in U.K. IPO Go-Ahead Sinks as U.K. Takes Over Southeastern Rail Franchise Hedge Funds and Private Equity Are Targeting European Soccer In FX, It took a while for the index to breach resistance ahead of 93.500, but when US Treasuries resumed their bear-steepening run and the intensity of the moves in futures and cash picked up pace the break beyond the half round number was relatively quick and decisive. Indeed, the DXY duly surpassed its post-FOMC peak (93.526) and a prior recent high from August 19 (93.587) on the way to reaching 93.619 amidst almost all round Dollar gains, as 5, 10, 20 and 30 year yields all rallied through or further above psychological levels (such as 1%, 1.5% and 2% in the case of the latter two maturities). However, petro and a few other commodity currencies are displaying varying degrees of resilience in the face of general Greenback strength that is compounded by buy signals for September 30 rebalancing on spot month, quarter and half fy end. Ahead, trade data, consumer confidence, more regional Fed surveys, speakers and the 7 year auction. NZD/CHF/JPY/AUD - The Kiwi was already losing altitude above 0.7000 vs its US counterpart and 1.0400 against the Aussie on Monday, so the deeper retreat is hardly surprising to circa 0.6975 and 1.0415 awaiting some independent impetus that may come via NZ building consents tomorrow. Meanwhile, the Franc has recoiled towards 0.9300 in advance of comments from SNB’s Maechler and the Yen continues to suffer on the aforementioned rampant yield and steeper curve trajectory on top of a more pronounced 1+ sd portfolio hedge selling requirement vs the Buck, with Usd/Jpy meandering midway between 110.94-111.42 parameters irrespective of renewed risk aversion due to same bond rout dynamic. Back down under, Aud/Usd has faded from around 0.7311 to the low 0.7260 area, though holding up a bit better in wake of not quite as weak as forecast final retail sales overnight. CAD/EUR/GBP - All softer against their US rival, but the Loonie putting up a decent fight with ongoing help from WTI crude that has now topped Usd 76.50/brl, and Usd/Cad also has decent option expiry interest to keep an eye on given 1.2 bn rolling off at 1.2615 and an even heftier 3 bn at 1.2675 compared to current extremes spanning 1.2693-1.2652. Elsewhere, the Euro has lost its battle to stay afloat of multiple sub-1.1700 lows even though EGBs are tumbling alongside USTs and the same goes for Sterling in relation to the 1.3700 handle irrespective of the 10 year Gilt touching 1% for the first time since March 2020. SCANDI/EM - Brent’s advances on Usd 80 brl have been offset to an extent by soft Norwegian retail sales data, as the Nok pares more of its post-Norges Bank gains, while the Sek looks somewhat caught between stalls following a recovery in Swedish consumption, but big swing in trade balance from surplus to larger deficit. However, the Try is taking no delight from the costlier price of oil or remarks from Turkey’s Deputy Finance Minister contending that interest rates can move lower by reducing the current account and budget deficits, or conceding that Dollarisation is a problem and steps need to be taken to enhance confidence in the Lira. Conversely, the Cnh and Cny are still holding a firm line following another net injection of 2 week funds from the PBoC and the Governor saying that China will lengthen the period for the implementation of normal monetary policy, adding that it has conditions to keep a normal and upward yield curve, as it sees no need to purchase assets at present. In commodities, WTI and Brent futures have extended on the gains seen during APAC hours, which saw the Brent November contract topping USD 80/bbl, albeit the volume and open interest has migrated to the December contract – which topped out just before the USD 80/bbl mark. WTI November meanwhile advanced past the USD 76/bbl mark to a current peak at USD 76.67/bbl (vs low USD 75.21/bbl). Desks have been attributing the leg higher to tight supply – with the UK fuel situation further deteriorating amid a shortage of drivers coupled with panic buying. It's worth bearing in mind that the demand side of the equation has also seen supportive, with the US announcing the lifting of international travel curbs recently alongside the economic resilience to the Delta variant heading into the winter period. Traders would also be keeping an eye on the electricity situation in China, which in theory would provide tailwinds for diesel demand via generators, although this could be offset by a slowdown in economic activity due to power outages. There has also been growing noise for OPEC+ to hike output beyond the monthly plan of 400k BPD, with some African nations also struggling to ramp up production due to maintenance issues and lack of investments. Ministers recently noted that the plan would be maintained at next week's confab. As a reminder, the OPEC World Oil Outlook is set to be released at 13:30BST/08:30EDT, although the findings may be stale given the recent developments in crude dynamics. Major banks have also provided commentary on Brent following Goldman Sachs' bullish call recently, with Barclays upping its forecast for both benchmarks due to supply deficits, whilst Morgan Stanley maintained its forecast but suggested that the USD 85/bbl Brent scenario clearly exists. MS also noted that oil inventories continue to draw at high rates and suggest that the market is more undersupplied than generally perceived; the analysts see the market undersupplied into 2022 amid its expectation for further OPEC discipline. Nat gas also remains in focus, with prices +11% at one point, whilst Russia's Kremlin said Russia remains the safeguard of natural gas to Europe and Gazprom is ready to discuss new gas supply contracts with increased volumes to meet rising European demand. It's also worth being aware of the increasing likelihood of state intervention at these levels as nations attempt to save or at least cushion consumers and company margins. Elsewhere, precious metals are under pressure as the Buck remains buoyant, with spot gold still under USD 1,750/oz as it inches closer to the 11th August low of USD 1,722/oz. Spot silver remains within recent ranges above USD 22/oz. Overnight Chinese nickel and tin prices extended losses with traders citing subdued demand, whilst coking coal and coke futures leapt on tight supply. US Event Calendar 8:30am: Aug. Advance Goods Trade Balance, est. -$87.3b, prior -$86.4b, revised -$86.8b 8:30am: Aug. Retail Inventories MoM, est. 0.5%, prior 0.4%; Wholesale Inventories MoM, est. 0.8%, prior 0.6% 9am: July S&P CS Composite-20 YoY, est. 20.00%, prior 19.08% 9am: July S&P/CS 20 City MoM SA, est. 1.70%, prior 1.77% 9am: July FHFA House Price Index MoM, est. 1.5%, prior 1.6% 10am: Sept. Conf. Board Consumer Confidence, est. 115.0, prior 113.8 Expectations, prior 91.4 Present Situation, prior 147.3 10am: Sept. Richmond Fed Index, est. 10, prior 9 Central Bank Speakers 9am: Fed’s Evans Makes Welcome Remarks at Payments Conference 10am: Powell and Yellen Appear Before Senate Banking Panel 1:40pm: Fed’s Bowman Speaks at Community Bank Event 3pm: Fed’s Bostic Discusses the Economic Outlook 7pm: Fed’s Bullard Discusses U.S. Economy and Monetary Policy DB's Jim Reid concludes the overnight wrap What a difference a week makes. You hardly hear the word Evergrande now. We asked in a flash poll last week whether we would still be talking about it in a month or whether it would be a distant memory by then. Maybe we should have narrowed the time frame to a week! We’ve quickly moved on to rate hikes and rising bond yields as the topic de jour. A further rise in the Bloomberg Commodity Spot Index (+1.87%) to a fresh high for the decade helped reinforce the move. Indeed, sovereign bond yields moved higher once again yesterday amidst a sharp rise in inflation expectations, with those on 10yr Treasury yields rising +3.6bps to 1.487%, their highest level in over 3 months. Meanwhile the 2yr yield rose +0.8bps to 0.278%, its highest level since the pandemic began, which comes on the back of last week’s Fed meeting that prompted investors to price in an initial rate hike from the Fed by the end of 2022. The moves in Treasury yields were almost entirely driven by higher inflation breakevens, with 10yr breakevens up +3.7bps. That echoed similar moves in Europe, where the German 10yr breakeven (+4.7bps) hit a post-2013 high of 1.653%, and their Italian counterparts (+3.9bps) hit a post-2011 high. The biggest move was in the UK however, where the 10yr breakeven (+13.2bps) reached its highest level since 2008, which comes amidst a continued fuel shortage in the country, alongside another rise in UK natural gas futures, which were up +8.20% yesterday to £190/therm, exceeding the previous closing peak set a week earlier. We were waiting for the wind to blow in this country to get alternatives back on stream and boy did it blow yesterday but with no impact yet on gas prices. Lower real rates dampened the rise in yields across the continent, though yields on 10yr bunds (+0.5bps), OATs (+0.9bps), BTPs (+1.3bps) and gilts (+2.7bps) had all moved higher by the close of trade. Those spikes in commodity prices were evident more broadly yesterday, with energy prices in particular seeing a major increase. Brent crude oil prices were up +1.84% to $79.53/bbl, marking their highest closing level since late-2018, and this morning in trading they have now exceeded the $80/bbl mark with a further +0.94% increase. It was much the same story for WTI (+1.99%), which closed at $75.45/bbl, which was its own highest closing level since 2018 too. And those pressures in UK natural gas prices we mentioned above were seen across Europe more broadly, where futures were up +8.92%. With yields moving higher and inflationary pressures growing stronger, tech stocks struggled significantly yesterday, with the NASDAQ down -0.52%. The megacap tech FANG+ index fell -0.15% on the day, but was initially down as much as -1.7% in early trading. The NASDAQ underperformed the S&P 500, which was only down -0.28%, but that masked significant sectoral divergences, with interest-sensitive growth stocks struggling, just as cyclicals more broadly posted fresh gains. More specifically, energy (+3.43%), bank (+2.29%) and autos (+2.19%) led the S&P, while biotech (-1.65%) and software (-1.39%) shares were among the largest laggards. European equities were also pretty subdued, with the STOXX 600 down -0.19%, though the DAX was up +0.27% following the results of the German election, which removed the tail risk outcome of a more left-wing coalition featuring the SPD, the Greens and Die Linke. Staying on the political scene, we are now less than 72 hours away from a potential US government shutdown as it stands. As was expected, Republicans in the Senate blocked the House-passed measure to fund the government for another 2 months and raise the debt ceiling for 2 years. While Democrats have not put forward their alternative strategy if Republicans refuse to vote to lift the debt ceiling, their only option would be to attach it to the budget reconciliation plan that currently makes up much of the Biden economic agenda. In an effort to keep all party members on board, Speaker Pelosi moved the vote on the $550bn bipartisan infrastructure bill to Thursday in order to give all sides more time to finish the larger budget bill and pass both together. It is a going to be a very busy Thursday, since Congress will have to also pass the funding bill that day. Republicans and Democrats already agree on a funding bill to keep the government open that does not include the debt ceiling increase so it is just a matter of how exactly the debt ceiling provision goes through without a Republican Senate vote. Overnight in Asia, equity indices are seeing a mixed performance. On the one hand, most of the region including the Nikkei (-0.24%) and KOSPI (-0.80%) are trading lower as investors begin to price in tighter monetary policy from the Fed. However, the Hang Seng (+1.50%), Shanghai Composite (+0.53%) and CSI (0.38%) have all advanced after the People’s Bank of China said that they would ensure a “healthy property market”. Looking forward, US equity futures are pointing to little change, with those on the S&P 500 down just -0.05%, and 10yr Treasury yields have risen +1.9bps this morning to trade above 1.50% again. Back to the German election, where the aftermath yesterday saw various party leaders assess the results and stake their claims to participate in a new coalition. As a reminder, the SPD came in first place with 25.7%, but the CDU/CSU weren’t far behind on 24.1%, making it mathematically possible for either to form a government in a coalition with the Greens and the FDP. The SPD’s chancellor candidate, Finance Minister Olaf Scholz, appealed for the Greens and FDP to join him in forming a government, and told the media that he wanted to form a coalition before Christmas. Meanwhile Green co-leader Robert Habeck said that “Of course there is a certain priority for talks with the SPD and the FDP”, but said that this didn’t mean they wouldn’t speak with the CDU/CSU either. As the SPD were calling for an alliance, the tone sounded more negative from the CDU’s leadership, even though Armin Laschet said that he had not given up on the idea of forming a government. Notably, Laschet said that no party was able to draw a clear mandate from the result, including the SPD, and this echoed remarks from the CSU leader Markus Söder, who said that the conservatives had no mandate to form a government, though they could “make an offer out of a sense of responsibility for the country.” Meanwhile, attention will turn to the FDP and the Greens to see which way they’re leaning when it comes to forming a government. FDP leader Lindner said that he would hold preliminary talks with the Greens, after which they would be open to invitations from either the SPD or the CDU/CSU for further discussions. Back on the UK, there was an interesting speech from BoE Governor Bailey yesterday, where he echoed the line from the MPC minutes last week, saying that “all of us believe that there will need to be some modest tightening of policy to be consistent with meeting the inflation target sustainable over the medium-term”. However, he also said that their view was that “the price pressures will be transient”, and that “monetary policy will not increase the supply of semi-conductor chips … nor will it produce more HGV drivers.” He then further added that tighter policy “could make things worse in this situation by putting more downward pressure on a weakening recovery of the economy”. So a bit of a mixed message of backing rate hike expectations but warning about its impact on growth. Over in the US we heard from a host of Fed speakers with Governor Brainard saying that while “employment is still a bit short of the mark” of “substantial further progress”, she expects that the labour market will recover enough to start tapering asset purchases soon. Separately on the inflation debate, Minneapolis Fed President Kashkari argued that this year’s pickup in US inflation has been a byproduct of the supply disruptions associated with Covid and that policy makers should not react to it just yet. He cited the need to get US employment back up as the Fed’s “highest priority”. New York Fed President Williams agreed with his colleague, saying that “this process of adjustment may take another year or so to complete as the pandemic-related swings in supply and demand gradually recede.” And Chicago Fed President Evans is even worried about downside inflation risks, as he is " more uneasy about us not generating enough inflation in 2023 and 2024 than the possibility that we will be living with too much.” Lastly, news came out yesterday that Boston Fed President Rosengren will retire this week due to health concerns. He was due to step down in June regardless as there is a mandatory retirement age of 65. Dallas Fed President Kaplan also announced his retirement yesterday, which will take effect October 8th. Both officials have drawn scrutiny in recent days stemming from their recent disclosure of trading activity over the last year, though the activity did not violate the Fed’s ethics code even as Fed Chair Powell announced an official review of those rules. The Boston Fed President will be a voting member on the FOMC next year, and the Dallas Fed President in 2023. Running through yesterday’s data, the preliminary reading for US durable goods orders in August showed growth of +1.8% (vs. +0.7% expected), and the previous month was also revised up to show growth of +0.5% (vs. -0.1% previously). Meanwhile core capital goods orders grew by +0.5% (vs. +0.4% expected), and the previous month’s growth was revised up two-tenths. Finally, the Dallas Fed’s manufacturing activity index for September came in at 4.6 (vs. 11.0 expected) – its lowest reading since July 2020. To the day ahead now, and one of the main highlights will be the appearance of Fed Chair Powell, and Treasury Secretary Yellen at the Senate Banking Committee. Otherwise, central bank speakers include ECB President Lagarde, Vice President de Guindos, and the ECB’s Schnabel, Panetta and Kazimir, along with the BoE’s Mann and the Fed’s Evans, Bowman and Bostic. US data highlights include the US Conference Board’s consumer confidence indicator for September and the FHFA house price index for July. Tyler Durden Tue, 09/28/2021 - 07:52.....»»

Category: blogSource: zerohedgeSep 28th, 2021

Futures Slide On Growing Stagflation Fears As Treasury Yields Surge

Futures Slide On Growing Stagflation Fears As Treasury Yields Surge US index futures, European markets and Asian stocks all turned negative during the overnight session, surrendering earlier gains as investors turned increasingly concerned about China's looming slowdown - and outright contraction - amid a global stagflationary energy crunch, which sent 10Y TSY yields just shy of 1.50% this morning following a Goldman upgrade in its Brent price target to $90 late on Sunday. At 745 a.m. ET, S&P 500 e-minis were down 4.75 points, or 0.1% after rising as much as 0.6%, Nasdaq 100 e-minis were down 83 points, or 0.54% and Dow e-minis were up 80 points, or 0.23%. The euro slipped as Germany looked set for months of complex coalition talks. While the market appears to have moved beyond the Evergrande default, the debt crisis at China's largest developer festers (with Goldman saying it has no idea how it will end), and data due this week will show a manufacturing recovery in the world’s second-largest economy is faltering faster. A developing energy crisis threatens to crimp global growth further at a time markets are preparing for a tapering of Fed stimulus. The week could see volatile moves as traders scrutinize central bankers’ speeches, including Chair Jerome Powell’s meetings with Congressional panels. “Most bad news comes from China these days,” Ipek Ozkardeskaya, a senior analyst at Swissquote Group Holdings, wrote in a note. “The Evergrande debt crisis, the Chinese energy crackdown on missed targets and the ban on cryptocurrencies have been shaking the markets, along with the Fed’s more hawkish policy stance last week.” Oil majors Exxon Mobil and Chevron Corp rose 1.5% and 1.2% in premarket trade, respectively, tracking crude prices, while big lenders including JPMorgan, Citigroup, Morgan Stanley and Bank of America Corp gained about 0.8%.Giga-cap FAAMG growth names such as Alphabet, Microsoft, Amazon.com, Facebook and Apple all fell between 0.3% and 0.4%, as 10Y yield surged, continuing their selloff from last week, which saw the 10Y rise as high as 1.4958% and just shy of breaching the psychological 1.50% level. While growth names were hit, value names rebounded as another market rotation appears to be in place: industrials 3M Co and Caterpillar Inc, which tend to benefit the most from an economic rebound, also inched higher (although one should obviously be shorting CAT here for its China exposure). Market participants have moved into value and cyclical stocks from tech-heavy growth names after the Federal Reserve last week indicated it could begin unwinding its bond-buying program by as soon as November, and may raise interest rates in 2022. Here are some other notable premarket movers: Gores Guggenheim (GGPI US) shares rise 7.2% in U.S. premarket trading as Polestar agreed to go public with the special purpose acquisition company, in a deal valued at about $20 billion. Naked Brand (NAKD US), one of the stocks caught up in the first retail trading frenzy earlier this year, rises 11% in U.S. premarket trading, extending Friday’s gains. Among other so-called meme stocks in premarket trading: ReWalk Robotics (RWLK) +6.5%, Vinco Ventures (BBIG) +18%, Camber Energy (CEI) +2.9% Pfizer (PFE US) and Opko Health (OPK US) in focus after they said on Friday that the FDA extended the review period for the biologics license application for somatrogon. Opko fell 3.5% in post-market trading. Aspen Group (ASPU) climbed 10% in Friday postmarket trading after board member Douglas Kass buys $172,415 of shares, according to a filing with the U.S. Securities & Exchange Commission. Seaspine (SPNE US) said spine surgery procedure volumes were curtailed in many areas of the U.S. in 3Q and particularly in August. Tesla (TSLA US) and other electric- vehicle related stocks globally may be active on Monday after Germany’s election, in which the Greens had their best-ever showing and are likely to be part of any governing coalition. Europe likewise drifted lower, with the Stoxx Europe 600 Index erasing earlier gains and turning negative as investors weighed the risk to global growth from the China slowdown and the energy crunch. The benchmark was down 0.1% at last check. Subindexes for technology (-0.9%) and consumer (-0.8%) provide the main drags while value outperformed, with energy +2.4%, banks +2% and insurance +1.3%.  The DAX outperformed up 0.5%, after German election results avoided the worst-case left-wing favorable outcome.  U.S. futures. Rolls-Royce jumped 12% to the highest since March 2020 after the company was selected to provide the powerplant for the B-52 Stratofortress under the Commercial Engine Replacement Program. Here are some of the other biggest European movers today IWG rises as much as 7.5% after a report CEO Mark Dixon is exploring a multibillion-pound breakup of the flexible office-space provider AUTO1 gains as much as 6.1% after JPMorgan analyst Marcus Diebel raised the recommendation to overweight from neutral Cellnex falls as much as 4.3% to a two-month low after the tower firm is cut to sell from neutral at Citi, which says the stock is “priced for perfection in an imperfect industry” European uranium stocks fall with Yellow Cake shares losing as much as 6% and Nac Kazatomprom shares declining as much as 4.7%. Both follow their U.S. peers down following weeks of strong gains as the price of uranium ballooned For those who missed it, Sunday's closely-watched German elections concluded with the race much closer than initially expected: SPD at 25.7%, CDU/CSU at 24.1%, Greens at 14.8%, FDP at 11.5%, AfD at 10.3% Left at 4.9%, the German Federal Returning Officer announced the seat distribution from the preliminary results which were SPD at 206 seats, CDU/CSU at 196. Greens at 118, FDP at 92, AfD at 83, Left at 39 and SSW at 1. As it stands, three potential coalitions are an option, 1) SPD, Greens and FDP (traffic light), 2) CDU/CSU, Greens and FDP (Jamaica), 3) SPD and CDU/CSU (Grand Coalition but led by the SPD). Note, option 3 is seen as the least likely outcome given that the CDU/CSU would be unlikely willing to play the role of a junior partner to the SPD. Therefore, given the importance of the FDP and Greens in forming a coalition for either the SPD or CDU/CSU, leaders of the FDP and Greens have suggested that they might hold their own discussions with each other first before holding talks with either of the two larger parties. Given the political calculus involved in trying to form a coalition, the process is expected to play out over several months. From a markets perspective, the tail risk of the Left party being involved in government has now been removed due to their poor performance and as such, Bunds trade on a firmer footing. Elsewhere, EUR is relatively unfazed due to the inconclusive nature of the result. We will have more on this in a subsequent blog post. Asian stocks fell, reversing an earlier gain, as a drop in the Shanghai Composite spooked investors in the region by stoking concerns about the pace of growth in China’s economy.  The MSCI Asia Pacific Index wiped out an advance of as much as 0.7%, on pace to halt a two-day climb. Consumer discretionary names and materials firms were the biggest contributors to the late afternoon drag. Financials outperformed, helping mitigate drops in other sectors.  “Seeing Shanghai shares extending declines, investors’ sentiment has turned weak, leading to profit-taking on individual stocks or sectors that have been gaining recently,” said Shoichi Arisawa, an analyst at Iwai Cosmo Securities. “The drop in Chinese equities is reminding investors about a potential slowdown in their economy.”  The Shanghai Composite was among the region’s worst performers along with Vietnam’s VN Index. Shares of China’s electricity-intensive businesses tumbled after Beijing curbed power supplies in the country’s manufacturing hubs to cut emissions. The CSI 300 still rose, thanks to gains in heavily weighted Kweichow Moutai and other liquor makers. Asian equities started the day on a positive note as financials jumped, tracking gains in U.S. peers and following a rise in Treasury yields. Resona Holdings was among the top performers after Morgan Stanley raised its view on the stock and Japanese banks. The regional market has been calmer over the past few trading sessions after being whipsawed by concerns over any fallout from China Evergrande Group’s debt troubles. While anxiety lingers, many investors expect China will resolve the distressed property developer’s problems rather than let them spill over into an echo of 2008’s Lehman crisis. Japanese equities closed lower, erasing an earlier gain, as concerns grew over valuations following recent strength in the local market and turmoil in China. Machinery and electronics makers were the biggest drags on the Topix, which fell 0.1%. Daikin and Bandai Namco were the largest contributors to a dip of less than 0.1% in the Nikkei 225. Both gauges had climbed more 0.5% in morning trading. Meanwhile, the Shanghai Composite Index fell as much as 1.5% as industrials tumbled amid a power crunch. “Seeing Shanghai shares extending declines, investors’ sentiment has turned weak, leading to profit-taking on individual stocks or sectors that have been gaining recently,” said Shoichi Arisawa, an analyst at Iwai Cosmo Securities Co. “The drop in Chinese equities is reminding investors about a potential slowdown in their economy. That’s why marine transportation stocks, which are representative of cyclical sectors, fell sharply.” Shares of shippers, which have outperformed this year, fell as investors turned their attention to reopening plays. Travel and retail stocks gained after reports that the government is making final arrangements to lift all the coronavirus state of emergency order in the nation as scheduled at the end of this month. Australia's commodity-heavy stocks advanced as energy, banking shares climb. The S&P/ASX 200 index rose 0.6% to close at 7,384.20, led by energy stocks. Banks also posted their biggest one-day gain since Aug. 2. Travel stocks were among the top performers after the prime minister said state premiers must not keep borders closed once agreed Covid-19 vaccination targets are reached. NextDC was the worst performer after the company’s CEO sold 1.6 million shares. In New Zealand, the S&P/NZX 50 index. In FX, the U.S. dollar was up 0.1%, while the British pound, Australian dollar, and Canadian dollar lead G-10 majors, with the Swedish krona and Swiss franc lagging. •    The Bloomberg Dollar Spot Index was little changed and the greenback traded mixed versus its Group-of-10 peers o    Volatility curves in the major currencies were inverted last week due to a plethora of central bank meetings and risk-off concerns. They have since normalized as stocks stabilize and traders assess the latest forward guidance on monetary policy •    The yield on two-year U.S. Treasuries touched the highest level since April 2020, as tightening expectations continued to put pressure on front-end rates and ahead of debt sales later Monday •    The pound advanced, with analyst focus on supply chain problems as Prime Minister Boris Johnson considers bringing in army drivers to help. Bank of England Governor Andrew Bailey’s speech later will be watched after last week’s hawkish meeting •    Antipodean currencies, as well as the Norwegian krone and the Canadian dollar were among the best Group-of-10 performers amid a rise in commodity prices •    The yen pared losses after falling to its lowest level in six weeks and Japanese stocks paused their rally and amid rising Treasury yields   In rates, treasuries extended their recent drop, led by belly of the curve ahead of this week’s front-loaded auctions, which kick off Monday with 2- and 5-year note sales.  Yields were higher by up to 4bp across belly of the curve, cheapening 2s5s30s spread by 3.2bp on the day; 10-year yields sit around 1.49%, cheaper by 3.5bp and underperforming bunds, gilts by 1.5bp and 0.5bp while the front-end of the curve continues to sell off as rate-hike premium builds -- 2-year yields subsequently hit 0.284%, the highest level since April 2020. 5-year yields top at 0.988%, highest since Feb. 2020 while 2-year yields reach as high as 0.288%; in long- end, 30-year yields breach 2% for the first time since Aug. 13. Auctions conclude Tuesday with 7-year supply. Host of Fed speakers due this week, including three scheduled for Monday. In commodities, Brent futures climbed 1.4% to $79 a barrel, while WTI futures hit $75 a barrel for the first time since July, amid an escalating energy crunch across Europe and now China. Base metals are mixed: LME copper rises 0.4%, LME tin and nickel drop over 2%. Spot gold gives back Asia’s gains to trade flat near $1,750/oz In equities, Stoxx 600 is up 0.6%, led by energy and banks, and FTSE 100 rises 0.4%. Germany’s DAX climbs 1% after German elections showed a narrow victory for social democrats, with the Christian Democrats coming in a close second, according to provisional results. S&P 500 futures climb 0.3%, Dow and Nasdaq contracts hold in the green. In FX, the U.S. dollar is up 0.1%, while the British pound, Australian dollar, and Canadian dollar lead G-10 majors, with the Swedish krona and Swiss franc lagging. Base metals are mixed: LME copper rises 0.4%, LME tin and nickel drop over 2%. Spot gold gives back Asia’s gains to trade flat near $1,750/oz Investors will now watch for a raft of economic indicators, including durable goods orders and the ISM manufacturing index this week to gauge the pace of the recovery, as well as bipartisan talks over raising the $28.4 trillion debt ceiling. The U.S. Congress faces a Sept. 30 deadline to prevent the second partial government shutdown in three years, while a vote on the $1 trillion bipartisan infrastructure bill is scheduled for Thursday. On today's calendar we get the latest Euro Area M3 money supply, US preliminary August durable goods orders, core capital goods orders, September Dallas Fed manufacturing activity. We also have a bunch of Fed speakers including Williams, Brainard and Evans. Market Snapshot S&P 500 futures down 0.1% to 4,442.50 STOXX Europe 600 up 0.3% to 464.54 MXAP little changed at 200.75 MXAPJ little changed at 642.52 Nikkei little changed at 30,240.06 Topix down 0.1% to 2,087.74 Hang Seng Index little changed at 24,208.78 Shanghai Composite down 0.8% to 3,582.83 Sensex up 0.2% to 60,164.70 Australia S&P/ASX 200 up 0.6% to 7,384.17 Kospi up 0.3% to 3,133.64 German 10Y yield fell 3.1 bps to -0.221% Euro down 0.3% to $1.1689 Brent Futures up 1.2% to $79.04/bbl Gold spot little changed at $1,750.88 U.S. Dollar Index up 0.15% to 93.47 Top Overnight News from Bloomberg House Speaker Nancy Pelosi put the infrastructure bill on the schedule for Monday under pressure from moderates eager to get the bipartisan bill, which has already passed the Senate, enacted. But progressives -- whose votes are likely vital -- are insisting on progress first on the bigger social-spending bill Olaf Scholz of the center-left Social Democrats defeated Chancellor Angela Merkel’s conservatives in an extremely tight German election, setting in motion what could be months of complex coalition talks to decide who will lead Europe’s biggest economy China’s central bank pumped liquidity into the financial system after borrowing costs rose, as lingering risks posed by China Evergrande Group’s debt crisis hurt market sentiment toward its peers as well Global banks are about to get a comprehensive blueprint for how derivatives worth several hundred trillion dollars may be finally disentangled from the London Interbank Offered Rate Economists warned of lower economic growth in China as electricity shortages worsen in the country, forcing businesses to cut back on production Governor Haruhiko Kuroda says it’s necessary for the Bank of Japan to continue with large-scale monetary easing to achieve the bank’s 2% inflation target The quant revolution in fixed income is here at long last, if the latest Invesco Ltd. poll is anything to go by. With the work-from-home era fueling a boom in electronic trading, the majority of investors in a $31 trillion community say they now deploy factor strategies in bond portfolios A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded somewhat mixed with the region finding encouragement from reopening headlines but with gains capped heading towards month-end, while German election results remained tight and Evergrande uncertainty continued to linger. ASX 200 (+0.6%) was led higher by outperformance in the mining related sectors including energy as oil prices continued to rally amid supply disruptions and views for a stronger recovery in demand with Goldman Sachs lifting its year-end Brent crude forecast from USD 80/bbl to USD 90/bbl. Furthermore, respectable gains in the largest weighted financial sector and details of the reopening roadmap for New South Wales, which state Premier Berijiklian sees beginning on October 11th, further added to the encouragement. Nikkei 225 (Unch) was kept afloat for most of the session after last week’s beneficial currency flows and amid reports that Japan is planning to lift emergency measures in all areas at month-end, although upside was limited ahead of the upcoming LDP leadership race which reports noted are likely to go to a run-off as neither of the two main candidates are likely to achieve a majority although a recent Kyodo poll has Kono nearly there at 47.4% of support vs. nearest contender Kishida at 22.4%. Hang Seng (+0.1%) and Shanghai Comp. (-0.8%) were varied with the mainland choppy amid several moving parts including back-to-back daily liquidity efforts by the PBoC since Sunday and with the recent release of Huawei’s CFO following a deal with US prosecutors. Conversely, Evergrande concerns persisted as Chinese cities reportedly seized its presales to block the potential misuse of funds and its EV unit suffered another double-digit percentage loss after scrapping plans for its STAR Market listing. There were also notable losses to casino names after Macau tightened COVID-19 restrictions ahead of the Golden Week holidays and crypto stocks were hit after China declared crypto activities illegal which resulted in losses to cryptoexchange Huobi which dropped more than 40% in early trade before nursing some of the losses, while there are also concerns of the impact from an ongoing energy crisis in China which prompted the Guangdong to ask people to turn off lights they don't require and use air conditioning less. Finally, 10yr JGBs were flat but have clawed back some of the after-hour losses on Friday with demand sapped overnight amid the mild gains in stocks and lack of BoJ purchases in the market. Elsewhere, T-note futures mildly rebounded off support at 132.00, while Bund futures outperformed the Treasury space amid mild reprieve from this month’s losses and with uncertainty of the composition for the next German coalition. Top Asian News Moody’s Says China to Safeguard Stability Amid Evergrande Issues China’s Tech Tycoons Pledge Allegiance to Xi’s Vision China Power Crunch Hits iPhone, Tesla Production, Nikkei Reports Top Netflix Hit ‘Squid Game’ Sparks Korean Media Stock Surge Bourses in Europe have trimmed the gains seen at the open, albeit the region remains mostly in positive territory (Euro Stoxx 50 +0.4%; Stoxx 600 +0.2%) in the aftermath of the German election and amid the looming month-end. The week also sees several risk events, including the ECB's Sintra Forum, EZ CPI, US PCE and US ISM Manufacturing – not to mention the vote on the bipartisan US infrastructure bill. The mood in Europe contrasts the mixed handover from APAC, whilst US equity futures have also seen more divergence during European trade – with the yield-sensitive NQ (-0.3%) underperforming the cyclically-influenced RTY (+0.4%). There has been no clear catalyst behind the pullback since the Cash open. Delving deeper into Europe, the DAX 40 (+0.6%) outperforms after the tail risk of the Left party being involved in government has now been removed. The SMI (-0.6%) has dipped into the red as defensive sectors remain weak, with the Healthcare sector towards to bottom of the bunch alongside Personal & Household Goods. On the flip side, the strength in the price-driven Oil & Gas and yield-induced Banks have kept the FTSE 100 (+0.2%) in green, although the upside is capped by losses in AstraZeneca (-0.4%) and heavy-weight miners, with the latter a function of declining base metal prices. The continued retreat in global bonds has also hit the Tech sector – which resides as the laggard at the time of writing. In terms of individual movers, Rolls-Royce (+8.5%) trades at the top of the FTSE 100 after winning a USD 1.9bln deal from the US Air Force. IWG (+6.5%) also extended on earlier gains following reports that founder and CEO Dixon is said to be mulling a multibillion-pound break-up of the Co. that would involve splitting it into several distinct companies. Elsewhere, it is worth being cognizant of the current power situation in China as the energy crisis spreads, with Global Times also noting that multiple semiconductor suppliers for Tesla (Unch), Apple (-0.4% pre-market) and Intel (Unch), which have manufacturing plants in the Chinese mainland, recently announced they would suspend their factories' operations to follow local electricity use policies. Top European News U.K. Relaxes Antitrust Rules, May Bring in Army as Pumps Run Dry Magnitude 5.8 Earthquake Hits Greek Island of Crete German Stocks Rally as Chances Wane for Left-Wing Coalition German Landlords Rise as Left’s Weakness Trumps Berlin Poll In FX, the Aussie is holding up relatively well on a couple of supportive factors, including a recovery in commodity prices overnight and the Premier of NSW setting out a timetable to start lifting COVID lockdown and restrictions from October 11 with an end date to completely re-open on December 1. However, Aud/Usd is off best levels against a generally firm Greenback on weakness and underperformance elsewhere having stalled around 0.7290, while the Loonie has also run out of momentum 10 pips or so from 1.2600 alongside WTI above Usd 75/brl. DXY/EUR/CHF - Although the risk backdrop is broadly buoyant and not especially supportive, the Buck is gleaning traction and making gains at the expense of others, like the Euro that is gradually weakening in wake of Sunday’s German election that culminated in narrow victory for the SPD Party over the CDU/CSU alliance, but reliant on the Greens and FDP to form a Government. Eur/Usd has lost 1.1700+ status and is holding a fraction above recent lows in the form of a double bottom at 1.1684, but the Eur/Gbp cross is looking even weaker having breached several technical levels like the 100, 21 and 50 DMAs on the way down through 0.8530. Conversely, Eur/Chf remains firm around 1.0850, and largely due to extended declines in the Franc following last week’s dovish SNB policy review rather than clear signs of intervention via the latest weekly Swiss sight deposit balances. Indeed, Usd/Chf is now approaching 0.9300 again and helping to lift the Dollar index back up towards post-FOMC peaks within a 93.494-206 range in advance of US durable goods data, several Fed speakers, the Dallas Fed manufacturing business index and a double dose of T-note supply (Usd 60 bn 2 year and Usd 61 bn 5 year offerings). GBP/NZD/JPY - As noted above, the Pound is benefiting from Eur/Gbp tailwinds, but also strength in Brent to offset potential upset due to the UK’s energy supply issues, so Cable is also bucking the broad trend and probing 1.3700. However, the Kiwi is clinging to 0.7000 in the face of Aud/Nzd headwinds that are building on a break of 1.0350, while the Yen is striving keep its head afloat of another round number at 111.00 as bond yields rebound and curves resteepen. SCANDI/EM - The Nok is also knocking on a new big figure, but to the upside vs the Eur at 10.0000 following the hawkish Norges Bank hike, while the Cnh and Cny are holding up well compared to fellow EM currencies with loads of liquidity from the PBoC and some underlying support amidst the ongoing mission to crackdown on speculators in the crypto and commodity space. In commodities, WTI and Brent front-month futures kicked the week off on a firmer footing, which saw Brent Nov eclipse the USD 79.50/bbl level (vs low 78.21/bbl) whilst its WTI counterpart hovers north of USD 75/bbl (vs low 74.16/bbl). The complex could be feeling some tailwinds from the supply crunch in Britain – which has lead petrol stations to run dry as demand outpaces the supply. Aside from that, the landscape is little changed in the run-up to the OPEC+ meeting next Monday, whereby ministers are expected to continue the planned output hikes of 400k BPD/m. On that note, there have been reports that some African nations are struggling to pump more oil amid delayed maintenance and low investments, with Angola and Nigeria said to average almost 300k BPD below their quota. On the Iranian front, IAEA said Iran permitted it to service monitoring equipment during September 20th-22nd with the exception of the centrifuge component manufacturing workshop at the Tesa Karaj facility, with no real updates present regarding the nuclear deal talks. In terms of bank commentary, Goldman Sachs raised its year-end Brent crude forecast by USD 10 to USD 90/bbl and stated that Hurricane Ida has more than offset the ramp-up in OPEC+ output since July with non-OPEC+, non-shale output continuing to disappoint, while it added that global oil demand-deficit is greater than expected with a faster than anticipated demand recovery from the Delta variant. Conversely, Citi said in the immediate aftermath of skyrocketing prices, it is logical to be bearish on crude oil and nat gas today and forward curves for later in 2022, while it added that near-term global oil inventories are low and expected to continue declining maybe through Q1 next year. Over to metals, spot gold and silver have fallen victim to the firmer Dollar, with spot gold giving up its overnight gains and meandering around USD 1,750/oz (vs high 1760/oz) while spot silver briefly dipped under USD 22.50/oz (vs high 22.73/oz). Turning to base metals, China announced another round of copper, zinc and aluminium sales from state reserves – with amounts matching the prior sales. LME copper remains within a tight range, but LME tin is the outlier as it gave up the USD 35k mark earlier in the session. Finally, the electricity crunch in China has seen thermal coal prices gain impetus amid tight domestic supply, reduced imports and increased demand. US Event Calendar 8:30am: Aug. Cap Goods Ship Nondef Ex Air, est. 0.5%, prior 0.9% 8:30am: Aug. Cap Goods Orders Nondef Ex Air, est. 0.4%, prior 0.1% 8:30am: Aug. -Less Transportation, est. 0.5%, prior 0.8% 8:30am: Aug. Durable Goods Orders, est. 0.6%, prior -0.1% 10:30am: Sept. Dallas Fed Manf. Activity, est. 11.0, prior 9.0 Central Banks 8am: Fed’s Evans Speaks at Annual NABE Conference 9am: Fed’s Williams Makes Opening Remarks at Conference on... 12pm: Fed’s Williams Discusses the Economic Outlook 12:50pm: Fed’s Brainard Discusses Economic Outlook at NABE Conference DB's Jim Reid concludes the overnight wrap Straight to the German elections this morning where unlike the Ryder Cup the race was tight. The centre-left SPD have secured a narrow lead according to provisional results, which give them 25.7% of the vote, ahead of Chancellor Merkel’s CDU/CSU bloc, which are on 24.1%. That’s a bit narrower than the final polls had suggested (Politico’s average put the SPD ahead by 25-22%), but fits with the slight narrowing we’d seen over the final week of the campaign. Behind them, the Greens are in third place, with a record score of 14.8%, which puts them in a key position when it comes to forming a majority in the new Bundestag, and the FDP are in fourth place currently on 11.5%. Although the SPD appear to be in first place the different parties will now enter coalition negotiations to try to form a governing majority. Both Olaf Scholz and the CDU’s Armin Laschet have said that they will seek to form a government, and to do that they’ll be looking to the Greens and the FDP as potential coalition partners, since those are the most realistic options given mutual policy aims. So the critical question will be whether it’s the SPD or the CDU/CSU that can convince these two to join them in coalition. On the one hand, the Greens have a stronger policy overlap with the SPD, and governed with them under Chancellor Schröder from 1998-2005, but the FDP seems more in line with the Conservatives, and were Chancellor Merkel’s junior coalition partner from 2009-13.  So it’s likely that the FDP and the Greens will talk to each other before talking to either of the two biggest parties. For those wanting more information, our research colleagues in Frankfurt have released a post-election update (link here) on the results and what they mean. An important implication of last night’s result is that (at time of writing) it looks as though a more left-wing coalition featuring the SPD, the Greens and Die Linke would not be able for form a majority in the next Bundestag. So the main options left are for the FDP and the Greens to either join the SPD in a “traffic light” coalition or instead join the CDU/CSU in a “Jamaica” coalition. The existing grand coalition of the SPD and the CDU/CSU would actually have a majority as well, but both parties have signalled that they don't intend to continue this. That said, last time in 2017, a grand coalition wasn’t expected after that result, and there were initially attempts to form a Jamaica coalition. But once those talks proved unsuccessful, discussions on another grand coalition began once again. In terms of interesting snippets, this election marks the first time the SPD have won the popular vote since 2002, which is a big turnaround given that the party were consistently polling in third place over the first half of this year. However, it’s also the worst ever result for the CDU/CSU, and also marks the lowest combined share of the vote for the two big parties in post-war Germany, which mirrors the erosion of the traditional big parties we’ve seen elsewhere in continental Europe. Interestingly, the more radical Die Linke and AfD parties on the left and the right respectively actually did worse than in 2017, so German voters have remained anchored in the centre, and there’s been no sign of a populist resurgence. This also marks a record result for the Greens, who’ve gained almost 6 percentage points relative to four years ago, but that’s still some way down on where they were polling earlier in the spring (in the mid-20s), having lost ground in the polls throughout the final weeks of the campaign. Markets in Asia have mostly started the week on a positive note, with the Hang Seng (+0.28%), Nikkei (+0.04%), and the Kospi (+0.25%) all moving higher. That said, the Shanghai Comp is down -1.30%, as materials (-5.91%) and industrials (-4.24%) in the index have significantly underperformed, which comes amidst power curbs in the country. In the US and Europe however, futures are pointing higher, with those on the S&P 500 up +0.37%, and those on the DAX up +0.51%. Moving onto another big current theme, all the talk at the moment is about supply shocks and it’s not inconceivable that things could get very messy on this front over the weeks and months ahead. However, I think the discussion on supply in isolation misses an important component and that is demand. In short we had a pandemic that effectively closed the global economy and interrupted numerous complicated supply chains. The global authorities massively stimulated demand relative to where it would have been in this environment and in some areas have created more demand than there would have been at this stage without Covid. However the supply side has not come back as rapidly. As such you’re left with demand outstripping supply. So I think it’s wrong to talk about a global supply shock in isolation. It’s not as catchy but this is a “demand is much higher than it should be in a pandemic with lockdowns, but supply hasn't been able to fully respond” world. If the authorities hadn’t responded as aggressively we would have plenty of supply for the demand and a lot of deflation. Remember negative oil prices in the early stages of the pandemic. So for me every time you hear the phrase “supply shock” remember the phenomenal demand there is relative to what the steady state might have been. This current “demand > supply” at lower levels of activity than we would have had without covid is going to cause central banks a huge headache over the coming months. Should they tighten due to what is likely to be a prolonged period of higher prices than people thought even a couple of months ago or should they look to the potential demand destruction of higher prices? The risk of a policy error is high and the problem with forward guidance is that markets demand to know now what they might do over the next few months and quarters so it leaves them exposed a little in uncertain times. This problem has crept up fast on markets with an epic shift in sentiment in the rates market after the BoE meeting Thursday lunchtime. I would say they were no more hawkish than the Fed the night before but the difference is that the Fed are still seemingly at least a year from raising rates and a lot can happen in that period whereas the BoE could now raise this year (more likely February). That has focused the minds of global investors, especially as Norway became the first central bank among the G-10 currencies to raise rates on the same day. Towards the end of this note we’ll recap the moves in markets last week including a +15bps climb in US 10yr yields in the last 48 hours of last week. One factor that will greatly influence yields over the week ahead is the ongoing US debt ceiling / government shutdown / infrastructure bill saga that is coming to a head as we hit October on Friday - the day that there could be a partial government shutdown without action by the close on Thursday. It’s a fluid situation. So far the the House of Representatives has passed a measure that would keep the government funded through December 3, but it also includes a debt ceiling suspension, so Republicans are expected to block this in the Senate if it still includes that. The coming week could also see the House of Representatives vote on the bipartisan infrastructure bill (c.$550bn) that’s already gone through the Senate, since Speaker Pelosi had previously committed to moderate House Democrats that there’d be a vote on the measure by today. She reaffirmed that yesterday although the timing may slip. However, there remain divisions among House Democrats, with some progressives not willing to support it unless the reconciliation bill also passes. In short we’ve no idea how this get resolved but most think some compromise will be reached before Friday. Pelosi yesterday said it “seems self-evident” that the reconciliation bill won’t reach the $3.5 trillion hoped for by the administration which hints at some compromise. Overall the sentiment has seemingly shifted a little more positively on there being some progress over the weekend. From politics to central banks and following a busy week of policy meetings, there are an array of speakers over the week ahead. One of the biggest highlights will be the ECB’s Forum on Central Banking, which is taking place as an online event on Tuesday and Wednesday, and the final policy panel on Wednesday will include Fed Chair Powell, ECB President Lagarde, BoE Governor Bailey and BoJ Governor Kuroda. Otherwise, Fed Chair Powell will also be testifying before the Senate Banking Committee on Tuesday, alongside Treasury Secretary Yellen, and on Monday, ECB President Lagarde will be appearing before the European Parliament’s Committee on Economic and Monetary Affairs as part of the regular Monetary Dialogue. There are lots of other Fed speakers this week and they can add nuances to the taper and dot plot debates. Finally on the data front, there’ll be further clues about the state of inflation across the key economies, as the Euro Area flash CPI estimate for September is coming out on Friday. Last month's reading showed that Euro Area inflation rose to +3.0% in August, which was its highest level in nearly a decade. Otherwise, there’s also the manufacturing PMIs from around the world on Friday given it’s the start of the month, along with the ISM reading from the US, and Tuesday will see the release of the Conference Board’s consumer confidence reading for the US as well. For the rest of the week ahead see the day-by-day calendar of events at the end. Back to last week now and the highlight was the big rise in global yields which quickly overshadowed the ongoing Evergrande story. Bonds more than reversed an early week rally as yields rose for a fifth consecutive week. US 10yr Treasury yields ended the week up +8.9bps to finish at 1.451% - its highest level since the start of July and +15bps off the Asian morning lows on Thursday. The move saw the 2y10y yield curve steepen +4.5bps, with the spread reaching its widest point since July as well. However, at the longer end of the curve the 5y30y spread ended the week largely unchanged after a volatile week. It was much flatter shortly following the FOMC and steeper following the BoE. Bond yields in Europe moved higher as well with the central bank moves again being the major impetus especially in the UK. 10yr gilt yields rose +7.9bps to +0.93% and the short end moved even more with the 2yr yield rising +9.4bps to 0.38% as the BoE’s inflation forecast and rhetoric caused investors to pull forward rate hike expectations. Yields on 10yr bunds rose +5.2bps, whilst those on the OATs (+6.3bps) and BTPs (+5.7bps) increased substantially as well, but not to the same extent as their US and UK counterparts. While sovereign debt sold off, global equity markets recovered following two consecutive weeks of declines. Although markets entered the week on the back foot following the Evergrande headlines from last weekend, risk sentiment improved at the end of the week, especially toward cyclical industries. The S&P 500 gained +0.51% last week (+0.15% Friday), nearly recouping the prior week’s loss. The equity move was primarily led by cyclicals as higher bond yields helped US banks (+3.43%) outperform, while higher commodity prices saw the energy (+4.46%) sector gain sharply. Those higher bond yields led to a slight rerating of growth stocks as the tech megacap NYFANG index fell back -0.46% on the week and the NASDAQ underperformed, finishing just better than unchanged (+0.02). Nonetheless, with four trading days left in September the S&P 500 is on track for its third losing month this year, following January and June. European equities rose moderately last week, as the STOXX 600 ended the week +0.31% higher despite Friday’s -0.90% loss. Bourses across the continent outperformed led by particularly strong performances by the IBEX (+1.28%) and CAC 40 (+1.04%). There was limited data from Friday. The Ifo's business climate indicator in Germany fell slightly from the previous month to 98.8 (99.0 expected) from 99.4 on the back a lower current assessment even though business expectations was higher than expected. In Italy, consumer confidence rose to 119.6 (115.8 expected), up just over 3pts from August and at its highest level on record (since 1995). Tyler Durden Mon, 09/27/2021 - 08:09.....»»

Category: personnelSource: nytSep 27th, 2021

Kamala Harris team looking to reboot her political trajectory after first-year stumbles: report

After having a schedule that featured a limited number of interviews, Vice President Harris has had a stronger media presence in recent weeks. Vice President Kamala Harris.SARAHBETH MANEY/POOL/AFP via Getty Images Advisors to Harris are seeking to reset her political trajectory, per a Washington Post report. Harris, the first female vice president, has endured a wave of reports about office dysfunction. In recent weeks, Harris has been a more visible presence at major events with President Biden. Vice President Kamala Harris' political team has put into place a number of changes in a concerted effort to boost her public reception and political future after hitting some turbulence in her first year in office, according to The Washington Post.Harris, a former California state attorney general and US senator, has had a meteoric rise on the national political scene, moving into the Naval Observatory only four years after she walked into the Senate Chamber in 2017.However, months after taking office last January, she faced a series of media reports about dysfunction in her office, coupled with news of stagnant approval ratings, which advisors and supporters feel have dampened the fortunes of the first female, first Black, and first Indian American vice president in American history.Now — nearly one year after the inauguration — there's a major effort for a successful reset by Harris' team.The vice president has brought on Jamal Simmons, a longtime Democratic analyst who been a staple on cable news programs, to become her communications director at a time when many have said her office has lacked consistent messaging on her duties and accomplishments.After stepping back from attending large events alongside President Joe Biden, Harris has become a more visible presence, as was evidenced at the signing of the $1.2 trillion bipartisan infrastructure bill in November and their joint appearance in Atlanta on Tuesday where they both pushed for the passage of voting-rights legislation that has stalled in Congress.And after having a schedule that featured a limited number of interviews with media figures, Harris has had a stronger television presence in recent weeks.As Democrats face political headwinds in maintaining their congressional majorities in 2022, the vice president is also set to become a familiar presence on the campaign trail — a relief to many who want to see her engaged with voters ahead of an expected 2024 Biden reelection campaign and a potential presidential run in 2028.This week's voting-rights speech in Atlanta was a harbinger of what will be a more substantive influence on public policy from Harris, especially for issues that are being closely watched by the American public.Before Biden spoke in support of the Freedom to Vote Act and the John Lewis Voting Rights Advancement Act — key pieces of legislation that the party hopes to pass in the face of near-certain Republican filibusters in the Senate — Harris remarked on the bills and introduced the president."Years from now, our children and our grandchildren, they will ask us about this moment," she said during her speech. "They will look back on this time, and they will ask us not about how we felt — they will ask us what did we do."She continued: "We cannot tell them that we let a Senate rule stand in the way of our most fundamental freedom.  Instead, let us tell them that we stood together as people of conscience and courage."However, several challenges remain for the vice president as advisors seek to jumpstart her role.Vice President Kamala Harris speaks in front of President Joe Biden advocating for the passage of voting-rights legislation at the Atlanta University Center Consortium, on the grounds of Morehouse College and Clark Atlanta University on January 11, 2022.AP Photo/Patrick Semansky'She can't own voting rights'Harris has not yet announced a replacement for Symone Sanders, her former senior advisor and chief spokesperson who left the role in late December and was recently named as the host of a new weekend show on MSNBC.Last year, after Harris was tapped to focus on the causes of migration from Northern Triangle countries, Republicans lodged a series of attacks about the sharp increase in illegal border crossings and repeatedly asked her to visit the US-Mexico border. When the vice president traveled to El Paso, many Republicans still criticized her for not coming to the region sooner.A testy exchange with NBC's Lester Holt over visiting the border led some in the Biden administration to be "quietly perplexed" by her response — in which she also stated that she had not been to Europe as vice president — according to a CNN report.After the NBC interview, Harris reportedly viewed such engagements with caution and is attempting to put aside her previously "defensive posture," according to the Post report.While the vice president granted an interview with NBC's Craig Melvin earlier this week and forcefully advocated for the administration's voting-rights push in a manner that was pleasing to many Democrats, she was also grilled about the timetable for COVID-19 tests, which have been in short supply across the country with the rapid spread of the Omicron variant.The Biden administration plans to make 500 million free tests available to Americans in the coming weeks. When asked if the tests could have been distributed sooner, Harris responded: "We are doing it."And some Harris backers are exasperated that Biden has given Harris thorny issues like immigration and voting rights, which will require a Herculean effort and a near-perfect set of circumstances to enact visible progress.Also, unlike Biden, Harris assumed the vice presidency without decades on Capitol Hill, lacking the contacts and deep relationships that her boss cultivated during his 36-year tenure representing Delaware in the Senate.According to the Post report, aides said that it has been hard for Harris to debunk the narrative that she is a difficult employer, especially with articles that have mentioned everything from "soul-destroying criticism" to longtime supporters feeling restricted in their access to the vice president.The New York Times reported last month that Harris privately told allies that she felt as though her media coverage would be "different" if she were a white male, noting her trailblazing status in the role and the high expectations that often come with such a distinction.Donna Brazile, a former chair of the Democratic National Committee and the campaign manager for former Vice President Al Gore's 2000 presidential campaign, said that the issues tasked to Harris are complicated and can't be fit into a set timetable."She can't own voting rights. No one can own a century-long struggle that has defined the country," Brazile told The Post. "This is a huge assignment. It took a civil war, and then later a civil rights movement, to get us to where we stood prior to 2020. And it's going to take a lot more to get us further."Read the original article on Business Insider.....»»

Category: personnelSource: nytJan 15th, 2022

Yale history professor Timothy Snyder told Insider he fears American democracy may not survive another Trump campaign

Author and historian Timothy Snyder thinks the 2024 campaign could end with the loser claiming power — and that could break up the United States. Timothy Snyder, Professor of History at Yale University specializing in the history of Central and Eastern Europe and the Holocaust, speaks at Oslo Freedom Forum 2019 on May 27, 2019 in Oslo, Norway.Julia Reinhart/Getty Images Timothy Snyder is a history professor at Yale University and an expert on the rise of authoritarianism. Snyder is the author of "The Road to Unfreedom: Russia, Europe, America," among other books. He spoke to Insider about what he sees as grave threats to democracy in the United States. Timothy Snyder does not want to be a downer, he says, but he is not feeling too optimistic about America these days. A history professor at Yale University, and the author of a series of books on authoritarianism and the road to tyranny, he looks at the United States these days and wonders if the country as we know it will still exist in a few years.In a recent article — marking one year since a former president, who lost an election, sought to thwart the peaceful transfer of power — Snyder painted a grim scenario where something like the January 6 insurrection had succeeded. How would the country, and the rest of the world, react to the installation of a leader who clearly did not win?In an interview with Insider, Snyder discussed Donald Trump, democracy, and what he fears could happen come 2024.It's been a year now since the January 6th insurrection. What do you think the state of American democracy is? Are we on firmer ground now, a year out?Well, I mean, obviously things could be worse. The January 6th insurrection a year ago could have succeeded. We could be living in a country that is wracked by civil and indeed violent conflict after Donald Trump succeeds in, at least temporarily, staying in power, thanks to some kind of conspiracy of his supporters, the Department of Justice, supporters in Congress and so on, right? So things could be worse. And I wouldn't wanna deny that.Unfortunately, that scenario is not one that is just in the rearview mirror. It's also one that is right in front of us. The problem with a failed coup, which is what January 6th, 2021, is, is that it is practice for a successful coup. So what we're looking at now is a kind of slow-motion practice for a repetition of all of that, but this time with the legal parts of it more fully prepared. What I'm afraid of is that now, in the shadow of a big lie — namely, that Trump actually won — the states are preparing the legal steps that will enable Trump to be installed as president the next time around. And that in turn will lead to a terrible sort of conflict, the kind that we haven't seen before. Some people look at January 6th and they see that — as bad as it was — it did not succeed, obviously. And, in fact, the leading players were kind of bumbling, right? I think that some have dismissed January 6th as a foolish stunt that got out of hand, but that never stood a chance of succeeding. I guess maybe you could both agree with that, but also think that's something that could be a lesson for them going forward.Let me try a comparison. If you think that democracy just succeeded on January 6th, sort of on its own strength, then you're missing the backdrop. In the course of the year 2020 there were a lot of important individuals and institutions, ranging from civil society to business, who were aware that there was some possibility that Trump would go for it, even if he lost, and were making preparations for that all year long. Without those preparations, it's very likely that Trump would have succeeded, or at least he would've come close enough to succeeding that we would be in terrible, bloody chaos for a very long time. It's like you're imagining an athlete winning a gold medal in the Olympics and thinking, 'Okay, that guy never actually practiced. He just showed up that day, in Tokyo, and won the medal'. The reason why democracy succeeded in 2021 is that a lot of people put in a lot of hard work ahead of time. And if it's going to keep succeeding, a lot of people are going to have to keep doing a lot of hard work. That attitude, that things just kind of happened because they happened — if we have that attitude, we're not going to put in the work and we're going to have this problem a second time around. The second thing to say about that is that, sure, sometimes coups fail, and when they fail the people who carry them out look foolish. But we're kind of in a strange spot in the US. Normally when you try a coup and you fail, you face some kind of consequence, right? In an authoritarian regime, your political life is terminated in some unpleasant way. In a democratic regime with a rule of law, you face legal consequences. We in the US are in this weird middle state, where you can try to carry out a coup, and pretty obviously break the law in all kinds of ways, and nevertheless, you can kind of just hang out and remain in politics. We're in a very awkward place, a strange place, where this sort of thing can repeat itself,Are you encouraged at all by the work of the January 6 committee and also the charges that the Department of Justice unveiled, where they've actually started charging people with seditious conspiracy?I hate to always be negative, and I won't be, but let me just start with a proviso. It's really too bad that, thanks to the archaic institution known as the filibuster, we don't have a bipartisan January 6th committee. We did have majorities in both the house and the Senate for something like that, but nevertheless, it doesn't exist. And that's a shame because democracy depends upon reflection and self-correction, and the January 6th committee is about reflection and self-correction, and so it's too bad that it couldn't have been done in the broadest way possible.That said, the work that it's doing is incredibly important. Democracy depends upon facts. Democracy depends upon knowing what's going on, operating in the shadow of a big lie, as a lot of us are doing — and even those of us who don't believe in the lie have to deal with it all the time — is incompatible with democracy. Myths and personality cults, and massive doses of self-deception, are incompatible with democracy. Figuring out just what happened, step by step, is compatible because it gives us that chance to reflect and to improve and to move on. So the work that the January 6th committee is doing is absolutely indispensable.I was going to ask you about the Democrats' response in January 6th, but actually your response there makes me want ask you about the Republicans' response. Because does the Democrats' response even matter if one of the major political parties is completely behind what you call 'the big lie'? There was a brief moment, after January 6th, where it seemed like the leading members of the Republican Party were going to break from Donald Trump and his claims. But it definitely seems like that's a way to get yourself kicked out of the party these days.To answer your literal question, it does of course matter what the Democrats do. It matters whether they try to figure out the truth. It matters whether they dig in and do the hard work of having to challenge their colleagues in the Senate, in the House, which of course is not that pleasant for the Democrats. That all matters very much because, without a legal and historical sense of the events of January 6th, we're not going to be able to keep going as a democracy. All of that baggage, from the Civil War forward that we don't clean up, just stands in the way of a democratic future. So it does matter what the Democrats are doing.The Republicans are facing a different kind of problem than the Democrats. Their problem is that, if they don't stand up to the big lie, and to the big liar himself, then they are doomed to become an authoritarian party. The logic of the big lie is such that, since you're claiming that the other side cheated you are then going to cheat yourself. You're basically promising your supporters that you're going to cheat. You're telling your supporters that a vote for us is not really a vote to try to win an election, a vote for us is just to kind of get us vaguely close enough that we can then fix the election, thanks to voter suppression and voter subversion and all the things that we're preparing now. So the Republicans face this very different ethical situation, which is that the longer they operate within the shadow of the big lie, the more they're gonna be remembered by posterity as a party that became authoritarian and possibly broke the system.I think, by the way, that a good number of them realized that. I think, by the way, that a good number of them are trying to find some way to get out from under this. And I hope that I hope that more of them find the courage to try to do so.Do you agree with the assessment that this is the worst crisis for democracy since the Civil War?I think we're in the same territory as the Great Depression and the Civil War. And those were moments when the United States was very lucky with its leaders. I mean, it's no coincidence that we tend to remember Lincoln and Roosevelt as the presidents that stand out. I would add the Great Depression to that because I think the Great Depression was also a moment when it could have all gone south. But yes, we're on historically dangerous territory.Obviously, when people refer to the Civil War, I mean, one response to that can be that that's, you know, hysterical, right? We don't appear to be on the verge of a violent conflict between two heavily armed sides. So how do you see that playing out? Where could this lead?First of all, I just want to say that, for the people who actually study the origins of civil wars, not just in the US, but as a class of events, America doesn't look good right now, with its high degree of polarization, with its alternative reality, with the celebration of violence — the example of Kyle Rittenhouse. Those social scientists who actually work on this topic — neutrally — see indicators in the United States, which suggests that we are on the brink of some kind of conflict.You're asking me about my scenario? My scenario is not very complicated. My scenario is that if, as is very possible, we install a president in January 2025 who has lost by a clear margin — let's say 10 million popular votes, and let's say 89 electoral votes — it's not very difficult in that situation for the loser to become the winner, thanks to just a few gimmicks. A few states just have to withhold their electoral votes; the House of Representatives then votes, according to state delegations; the Supreme Court then blesses the whole configuration; and then all of a sudden you have an installed president of the United States.I think by 2025 it's going be very hard for a lot of Americans to accept something so blatantly undemocratic, the more so since people will have known that this kind of plot was in the works for several years. So my scenario is at that point you would then have uncertainty as to who the President of the United States actually was — uncertainty among the population and also uncertainty within the institutions of government, both bureaucracy, the civil administration, but also unfortunately the armed parts of the government: the armed forces, the national guard.So that's the scenario. It's not very complicated. And unfortunately, it's the kind of thing that one has seen in other countries. And it's not really all that implausible.Speaking of other countries, what parallels can you draw, with the caveat that we know history doesn't repeat, exactly? What do you see as analogous to the situation that the United States finds itself in today?There are all kinds of comparisons. History doesn't repeat, but it does instruct. And it also instructs the people who are trying to undermine the rule of law. An easy, contemporary example is Hungary. Hungary is a place where, legalistic step by legalistic step, the spirit and reality of democracy and the rule of law were removed, such that Hungary, although it still has elections, is a country, which you can't really characterize as a functioning democracy. That is the road that we are on. And that is a model, not a historical one, but a contemporary one for a lot of Republicans right now.  Hungary's going to be more and more present — in fact, it's already been present, for example, on Tucker Carlson — as a kind of positive ideal for rule: an authoritarian regime, on the basis of a minority and kind of ritual elections.Going back a few years: Russia. Russia pioneered what's called the 'administrative resource.' That is, you have elections, but the elections are arranged in such a way that you know who's going to win. And you can't really point to exactly where things went wrong because they went wrong at a whole bunch of different levels at the same time. But nevertheless, your guy always wins. We're moving in that direction. We're moving towards the administrative resource.A more distant historical parallel: the failed democracies of the 1920s and 1930s. A similarity there is that, thanks to obstreperousness and complicated parliamentary rules, laws weren't passed and people all over Central and Eastern Europe began to think that parliament, or what we call Congress, is just not very important. It would be better to have a strong leader. Someone who at least reflects our mood. Someone who can get things done. As it becomes difficult for our Congress to pass laws, and as Republicans deliberately, of course, make it difficult for our Congress to pass laws, that kind of sentiment is also building in the US.Where do you trace the beginnings of guess what you would call the Republicans' weakening commitment to democracy? Is it the rise of Donald Trump and his personality call and his unique characteristics? Is he a product of a conservative movement that had been, for years, kind of slowly moving away from the idea of democracy as a value?You have to go way back in US history. There's always been a party which wanted to suppress the votes of all of Black people and call that democracy. For a long time, that was the Democratic Party. They switched, after civil rights in the sixties, and it became the Republican party. But this is kind of the original sin of American democracy — that we've always had a political party which wants to suppress votes and game the system.I think there are three recent developments, though. One is the surgical precision by which we now carry out gerrymandering, which means that the Republican Party, in particular, is playing only to the loudest voices in its own choir and is ever less representative of the general public. The second change is social media, within which I would include also foreign interventions in our social media. Social media is a bit like a gerrymandering of the brain. It allows voters to collect themselves into clusters and not have contact with anyone else. And that radicalizes things.And then the third is, I mean, give credit where credit is due: the personality cult of Donald Trump. The Republicans have not had a figure like this before, who is willing to call them out on their own hypocrisies, basically to expose them nakedly for the worst things that they do, as opposed to the values that some of them still would like to express in politics. They've never had a kind of cult of personality like this, where everything was out in the open. That creates a new kind of popularity. I think it'll be hard for Republicans to rally around, at this point, someone else to carry out a second coup, partly because I think no one has both the combination of a sheer indifference to ethics and the popularity that Mr. Trump has at this moment.It sounds like you're saying if in 2024 the Republican nominee were Ron DeSantis or Tucker Carlson, who seem to have the same political values — Tucker Carlson, as you mentioned, openly admires [Hungary's] Viktor Orbán — that the threat to democracy would be greatly diminished, which seems to reduce the threat to the person of Donald Trump.I wouldn't want to say it's a good situation to have a whole cast of characters who want to come to power under the cover of a big lie, using non-democratic means. That's still not a good situation that we have a DeSantis or a Carlson or a Josh Hawley or possibly a Ted Cruz — that we have a whole list of people who'd be willing to come to power that way. That's not a good situation. But, at the moment, it's Mr. Trump who captures the imagination of a lot of the American electorate. To carry out a coup of this kind, you've gotta get close enough to make it plausible. And you have to have somebody who's absolutely ruthless. And I think he remains, therefore, the best of the worst, or the worst of the worst, depending upon how you want to look at it.I want to ask you about President Biden. Obviously, he's given a couple of speeches recently that have explicitly labeled not just Donald Trump but the Republican Party as a threat to democracy. How do you grade his response to January 6th?It's a tough time right now for Mr. Biden in public opinion. I think he has been put in a very difficult situation — in a way, an historically unprecedented situation. With the exception, we just don't have presidents coming to power at a time when the existence of the republic has been challenged. And unlike Lincoln, Biden, can't begin from the position of some kind of clear victory. That is to say, the people who oppose American democracy are still out there in the field. Mr. Trump is in Florida doing his thing, every day. And there's no clear way to remove them from the picture.So he has to be president, and he has to do the normal things that a president does, which is try to get laws passed. And he has to, simultaneously, embody the values of our democratic Republic. It's a tough combination. Because he'd like to be able, I think, to stand above all of this. And then, after a year, it's become clear that he just can't. I think all of these attitudes have been correct. I just think it's unfortunate — going back to the comparison to FDR, unlike FDR he doesn't have big majorities in his first term. If he had big majorities, a lot of the stuff that we're talking about would be moot. We would have a bipartisan investigation. A lot more laws would've been passed.And above all, we'd already have electoral reform, which is the single most important thing: making it easier for Americans to vote would be good, not only for the whole system, it would also be good for the Republicans because it would force the Republican closer into the role of being a party which has to seek votes, has to care about public opinion, has to represent people, rather than the worst parts of a system. If Biden had a bigger majority, then all that stuff would've already happened. I think he's come to power at a really uninviting time. His first year has been, let's say a lot better than we think — it's been a lot better than the atmospherics would suggest.President Biden's approval rating, some polls suggest, is in the 30s and Democrats look like they're on the verge of losing their majority in the House and their 50-50 control of the Senate. Polls also suggest that a large majority of the public is concerned about the state of democracy. They do not particularly like Donald Trump. Yet they seem ready to return the Republican Party — a party that's committed to Donald Trump and his lies about the 2020 election — to power. How do you reconcile all that?I think there are several things going on there. One, just lots of people, regardless of party commitment, don't see the kind of legalistic threat building up to a second coup attempt or an installation of a president. In early 2020, and this is perfectly understandable, people don't necessarily see that the combination of voter suppression and vote subversion and a candidate who's going to break all the rules in a few years that this — that this combined with Republican victory in both the House and the Senate makes the end of democracy in the US, unfortunately, conceivable. People don't see that because it's a complicated institutional story and people would prefer to vote in 2022 on the stuff they're thinking about in 2022. That's understandable, but it's really unfortunate.The second thing, which is going on here, is that there's a kind of irony in our system, which is that Democrats tend to trust the very institutions that Republicans are corrupting. Republicans are the ones who, if you poll them, are more likely to say somebody's gonna fix the election. Democrats just aren't worried enough about this because they tend to believe the institutions are going to work, that everybody will come together, etcetera. And so I think it's hard in particular for Democrats to think, okay, it's 2022, we have to vote like hell because otherwise we're going to have Trumpland — in a worse version — two years down the line.And then the third thing that's going on is just people are sick of COVID. People are sick of living unusual lives. People are sick of all these restrictions on them, understandably. And people are going to vote their mood. That's just the way democracy is.The things that we're talking about, we should talk about and try to get them across, but there's also just this basic matter that people are unsatisfied with COVID. And Republicans know this and they're trying to keep COVID going as long as possible because they think it favors them. And they're probably right. People want to go back to normal life and until they go back to normal life, it's hard to have a normal election where the kinds of things we're talking about will get to the surface.Let's revisit this scenario where Trump and the Republican Party have claimed victory and have had some legal cloaking of this claim that has installed the loser of the election in power. You talked about competing allegiances among, perhaps, different branches of the military. It would be a very unclear situation of who, legally, different institutions in the United States should be pledging allegiance to. How do you see that playing out a year later? If Trump is in there as a minority, loser-president, seen as illegitimate by 55% of the American public, what's that look like for him and for the rest of the country?I mean, look, god forbid, I don't want all this to happen. And I think there's time to prevent it from happening. But I don't think the scenario that you're talking about is the one that we have to worry about. I think the scenario we have to worry about is that there isn't a US at that point. The kind of conflict that begins January 20, 2025, isn't the kind of conflict that ends with one president being just unpopular, or even seen as illegitimate. It's a kind of conflict that ends with governors seeking some kind of safe haven for their states. It's a kind of conflict that ends with Americans moving from one part of the country to another to be with people with whom they feel safer. It's the kind of conflict that ends with some kind of basic political reconstruction, where the US as we know it doesn't have to exist.That's the thing I think that people have the hardest time getting through their minds. Like the US, as we know it, doesn't have to exist. It's built upon these constitutional foundations, which are very flawed and which are now being intensely abused. If those constitutional foundations lead to something which is broadly unacceptable, we're going to be in unknown territory, which can go to unknown places. But it's very often the thing that you take for granted the most, like the existence of your own country, which is the thing that you should be paying the most attention to.That's a lesson which the Soviets learned in 1991, right? It's 30 years since the Soviet Union came to an end. We can look back at that and say, 'aha, it came to an end because it was a flawed communist system.' And sure, that's true. But we didn't expect it to come to an end, and they didn't expect it to come to an end. The fundamental lesson there is that big, powerful systems that you don't think can come to an end can come to an end if you don't get a hold of the internal problems — what they used to call the internal contradictions. We have some internal contradictions. We say we're a democracy, but we're becoming ever less so in practice. And if we don't get a hold of that, the system as we know it may not continue at all.That's what I'm worried about, sincerely. And I like to think — maybe I'm naive — that if folks on both sides of the aisle, Republicans, Democrats, and others, could imagine themselves into a 2025 where the existence of the country is actually in doubt, if we could think ourselves forward to that, and then think back to where we are now, it might moderate things that we're doing.My basic feeling is that the Republicans are right to think they can game their way to power. But by the time they game their way to power, it's not clear that there will be anything to have power over. And I don't think they've thought their way through to the end of that. And I think they need to, and everyone needs to, so that we can, you know, so that we can operate in such a way where at least our republic is still around a few years from now,To clarify that: you're thinking less that scenario where it's a shooting war between the army and the navy or competing factions in the military, and more like what we've kind of seen with blue states and climate change, for example, under Trump, where they kind of announce we have our own foreign policy, and we're actually going to band together and pursue our own policies. Speak directly to us, not Washington, DC. That's not America.I think some combination of that is what we're talking about. The more you get into details, the more you're going to be wrong, because the details won't be exactly what we think. In that scenario, I think Trump is president of something, but I'm not sure he governs from Washington, DC, and I'm not sure the thing that he runs is called the United States of America.In that scenario, he and the Supreme Court get to get to run something, but I'm not sure it's most of the country at that point. The military, you know, is subordinate to civilian command, which is a proud tradition that we have, but it's not clear who the civilian commander actually is, that's a real problem. And if there are conflicting orders coming down, or if different commanders within our armed forces are giving conflicting orders, then you have a situation where either you're going to have a literal civil war or people are going say, 'Hey, the way to prevent violent conflict is to have some kind of peaceful separation along some kind of lines.' That will suggest itself. The model that I have in mind now is Yugoslavia.It all seems wild and science-fictiony at this point, but if you reason your way through to 2025 with an installed president, and you don't see some scenario like this, you must be thinking, 'Okay, Trump can get installed and nobody will care.' And I just don't think that's plausible. I just don't think the combination of Trump himself — who's wildly unpopular along among a lot of people and who has already effectively announced that his policies next time around will be still more radical — and installation will be accepted by Americans and American institutions. That's a step that I can't make mentally. I don't see how installing Trump won't lead to a major challenge to the existence of the republic.Read the original article on Business Insider.....»»

Category: personnelSource: nytJan 14th, 2022

The DOJ has its work cut out after charging 11 Capitol riot defendants with seditious conspiracy, "the closest crime we have to treason"

The DOJ's critics "have to be quieted today," said one ex-prosecutor. "Seditious conspiracy is about as serious as it gets." Surveillance footage shows David Moerschel (red arrow) walking towards the eastern facade of the Capitol at 2:27 pm on January 6.Department of Justice The DOJ's Capitol riot probe took a big step forward when 11 people were charged with seditious conspiracy. One legal expert said the charge represents "the closest crime we have to treason." There are few historical examples of seditious conspiracy convictions, and the DOJ has an uphill battle. The Justice Department on Thursday silenced critics who accused it of being too lenient in the Capitol riot investigation when it charged the leader of the far-right extremist group Oath Keepers and ten others with seditious conspiracy.It's the most significant charge yet in the department's sprawling investigation into the deadly Capitol siege on January 6, 2021 that resulted in the deaths of at least seven people.The 48-page indictment alleges that the defendants planned the Capitol siege in advance and accuses them of attempting to use force to disrupt the peaceful transfer of power. In bringing seditious conspiracy charges, experts said, the Justice Department confirmed that it sees at least some elements of the Capitol riot as a coup attempt.The federal seditious conspiracy statute makes it a crime for two or more people to conspire to overthrow, put down, or destroy by force the United States government. It's also a crime to use force to prevent, hinder, or delay the execution of any law of the United States.Barbara McQuade, the former US attorney for the Eastern District of Michigan, told Insider that it's a "very serious charge and is rarely used."In charging Oath Keepers leader Elmer Stewart Rhodes and ten others with seditious conspiracy, the Justice Department is acknowledging that the January 6 riot "was a threat to our democracy, not a simple protest that got out of hand," McQuade added.Asha Rangappa, a director of admissions at Yale University's Jackson Institute for Global Affairs, noted that seditious conspiracy is "the closest crime we have to treason."Harry Litman, a longtime former federal prosecutor, also pointed out that the charges fly in the face of those who have criticized the Justice Department for showing too much leniency toward those involved in the failed insurrection."Those who say DOJ hasn't delivered on the most serious charges have to be quieted today," Litman wrote after the charges were unsealed. "Seditious conspiracy is about as serious as it gets."The seditious conspiracy indictment alleged that Rhodes and other co-defendants conspired to "oppose by force the lawful transfer of presidential power."It went on to say that core members of the Oath Keepers not only forced their way into the Capitol but also extensively planned for the siege beforehand, communicating on encrypted messaging apps from December 2020 onward, keeping a "quick reaction force" on standby at a Virginia hotel, and in some cases bringing weapons to Washington, DC, on January 6.Neama Rahmani, a former federal prosecutor, told Insider that a seditious conspiracy indictment "requires an agreement to overthrow the United States government or to prevent the execution of United States law by force, and one overt act in furtherance of the conspiracy."In this case, he added, the US Capitol was breached, which would "easily satisfy" the overt act element.Rhodes, for his part, repeatedly said during interviews with the right-wing conspiracy theorist Alex Jones that he and others were prepared to take extraordinary measures to keep then-President Donald Trump in power.Shortly after the November 2020 election, for instance, he said on Jones' Infowars show that he had armed men stationed outside Washington, DC, who were "prepared to go in if the president calls us up."And on January 20, 2021, two weeks after the failed insurrection and on the day Joe Biden was sworn into office, Rhodes again appeared on Jones' show and urged "local militias" to "get together" and fight the "illegitimate" Biden administration.The DOJ has its work cut out for itThat said, there have been relatively few federal cases involving the Civil War-era charge in US history, and the Justice Department has an uphill battle to fight in making the case against Rhodes and his co-defendants.The last time federal prosecutors secured a seditious conspiracy conviction was in 1995, when Sheikh Omar Abdel-Rahman, known as the "blind Sheikh," and nine others were found guilty in connection to their plan to blow up a bridge and two tunnels between New York and New Jersey, the United Nations headquarters, and the FBI's headquarters.Four decades earlier, four Puerto Rican activists and more than a dozen others were convicted of seditious conspiracy after they stormed the US Capitol in 1954 and opened fire on the floor of the House of Representatives, the Associated Press reported.The Justice Department also brought seditious conspiracy charges in a 2010 case in which nine members of a Michigan militia were accused of planning to kill a member of local law enforcement and attack law enforcement officers who would gather for the funeral. According to the AP, a judge ordered acquittals on the seditious conspiracy charges because he didn't believe prosecutors had proven that the defendants explicitly planned for a rebellion.McQuade told Insider that although there are few seditious conspiracy cases in US history that resulted in convictions, "the evidence here looks strong."She noted that the encrypted communications between Rhodes and others which appear to show them planning ahead for the Capitol riot "will make for devastating evidence."The next question, legal scholars said, is whether any of the defendants will strike cooperation deals, and who else may have been involved."The question that I have moving forward from this indictment is just how high does this conspiracy go?" Joyce Vance, a former federal prosecutor and a professor at the University of Alabama School of Law, told MSNBC after Thursday's charges were revealed. McQuade echoed that, saying, "Were any Trump advisors working with the Oath Keepers to plan the attack? Who funded their travel and equipment? With a potential 20-year sentence for seditious conspiracy, DOJ now has leverage to see if they can obtain evidence from these defendants against others higher up in the chain."Rhodes' plea hearing is set to take place Friday afternoon, where he's expected to plead not guilty. He has said he never entered the US Capitol on January 6, and his lawyer, Jon Moseley, told a local CBS affiliate that his client was arrested as part of a political fishing expedition by Democrats."I don't think any of these charges can be proven at trial," Moseley told CBS 11.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 14th, 2022

Futures Slide After Disappointing JPMorgan Earnings, Tech Rout Worsens

Futures Slide After Disappointing JPMorgan Earnings, Tech Rout Worsens After trading flat for much of the overnight session, S&P futures slumped to session lows shortly after JPM reported earnings that disappointed the market (see our full write up here) and were last trading down 30 points or 0.64%, with Dow futures down 0.3% and Nasdaq futures taking on even more water as the "sell tech" trade was back with a bang. Treasury yields rose 3bps to 1.74% and the dollar reversed an overnight loss. The VIX jumped above 20 and was last seen around 21. The Nasdaq 100 fell to the lowest in almost three months yesterday as tech came under pressure after Fed Governor Lael Brainard said officials could boost rates as early as March. It looks like the selling will continue today. “Market sentiment has been shaken by concerns over the prospect of imminent Fed tightening along with record global Covid-19 infection rates, but we don’t expect either of these factors to end the equity rally,” said UBS Wealth Management CIO Mark Haefele in a note. “The fourth-quarter U.S. earnings season, which started this week, could turn investor attention back to strong fundamentals.” JPMorgan shares dropped in premarket trading after revenues and EPS beat thanks to a $1.8 billion reserve release while FICC trading revenue missed expectations even as its dealmakers posted their best quarter ever and Chief Executive Officer Jamie Dimon gave an upbeat assessment of prospects for growth. Wells Fargo advanced after reporting higher-than-estimated revenue. BlackRock Inc. became the first public asset manager to hit $10 trillion in assets, propelled by a surge in fourth-quarter flows into its exchange-traded funds. Here are some of the other notable pre-movers today: U.S.-listed casino stocks with operations in Macau rise after the announcement of much-anticipated changes to the local casino law aimed at tightening government oversight on the world’s largest gaming market. Las Vegas Sands (LVS US) +6.6%; Melco Resorts (MLCO US) +5.5%; Wynn Resorts (WYNN US) +5.6%. Apple (AAPL US) shares are up in U.S. premarket trading after Piper Sandler raises its target for the stock, saying that Apple’s set-up for 2022 is favorable. Broker adds that the tech giant’s venture into health-care and automotive markets are the next catalysts to drive the stock to a $4 trillion market cap and beyond. NextPlay Technologies (NXTP US) shares jump 19% in U.S. premarket trading after giving an update for fiscal 3Q 2022 late yesterday. Domino’s Pizza (DPZ US) is cut to equal-weight from overweight at Morgan Stanley, while Chipotle is upgraded to overweight from equal-weight amid a “mixed” view on restaurant stocks into 2022. Amicus Therapeutics (FOLD US) advanced in postmarket trading after being upgraded to outperform from market perform at SVB Leerink, which cited the potential of a treatment for Pompe disease, should it be approved. Spirit Realty dropped 4% postmarket after launching a share sale via Morgan Stanley and BofA Securities. European equities traded poorly and followed the drop in Asia, with most sectors trading lower, weighed down once again by a soft tech sector. Euro Stoxx 50 is down 0.8%, most major indexes dropped over 1% before rising off the lows. Oil & gas is the best Stoxx 600 performer with crude trading well. European technology stocks as well as pandemic winners are leading declines after a U.S. selloff in tech shares resumed Thursday as Federal Reserve officials signaled their intention to combat inflation aggressively.  European chipmakers are down in early trading Friday: ASM International -3.5% at 9.17 a.m. CET, Infineon -0.9%, ASML -2.9%, STMicroelectronics -2.3%. Meanwhile, energy and automakers outperformed. Utilities were also in focus as French nuclear energy producer Electricite de France SA (EDF) plunged by a record as the French government confirmed plans to force it to sell more power at a steep discount to protect households from surging wholesale electricity prices, a move that could cost the state-controlled utility 7.7 billion euros ($8.8 billion) at Thursday’s market prices. There was some good news: a majority of strategists still see the rally in European equities continuing this year. The Stoxx Europe 600 Index will rise about 5.2% to 511 index points by the end of 2022 from Wednesday’s close, according to the average of 19 forecasts in a Bloomberg survey. Equity funds once more led inflows among asset classes in the week through Jan. 12, as investors reduced cash holdings, according to BofA and EPFR Global data. Earlier in the session, Asian stocks slid as investors offloaded technology shares on growing speculation the Federal Reserve will raise interest rates in March.  The MSCI Asia Pacific Index fell as much as 1.3% before paring losses to 0.7% in afternoon trading. Alibaba, Keyence and Sony Group were among the largest contributors to the benchmark’s slide. The Hang Seng Tech Index, which tracks China’s biggest tech firms, closed down 0.5%. Electronics makers also dragged down indexes in Japan and South Korea, with benchmarks in both nations leading the region’s drop. China’s CSI 300 Index closed at its lowest since November 2020. Asian stocks have been whipsawed this year by remarks from Fed officials as investors try to gauge the timing and scope of the anticipated interest rate hikes. The renewed weakness on Friday was triggered by comments from Fed Governor Lael Brainard, who said officials could boost rates as early as March to ensure that price pressures are brought under control. “This kind of hawkishness and a rush for rate hikes is, of course, a minus for share prices,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank in Tokyo. If the Fed were to increase rates in March, “investors will want to make sure the economy remains strong despite the monetary tightening before making their move,” Sera added.  With Friday’s moves, Asia’s benchmark is set to pare its weekly gain to about 1.6%, which would still be its best weekly performance since October.    In Japan, sentiment worsened as Tokyo raised its Covid alert to the second-highest of four levels as virus cases surged. South Korea’s Kospi was also weighed down as the central bank increased its policy rate for the third time in just five months In rates, Treasuries pared declines with stock index futures under pressure as U.S. day begins. Yields beyond the 2-year reached session highs inside Thursday’s ranges amid a global government bond selloff. Treasury yields are cheaper by 3bp to 4bp across the curve with 10- year yields around 1.7274%, fading a bigger loss earlier and slightly underperforming bunds and gilts. Asia session featured speculation about tighter global monetary policy. IG dollar issuance slate empty so far and expected to remain light ahead of U.S. holiday weekend with markets closed Monday; four names priced $3.8b Thursday. In FX, the Bloomberg dollar spot is little changed around worst levels for the week, while NOK, JPY and CAD top the G-10 scoreboard. The yen advanced, and is set for its largest weekly advance in more than a year as speculation about a shift in the Bank of Japan’s policy spurred a further unwinding of dollar longs. The five-year Japanese government bond yield climbed to a six-year high. The volatility term structure in dollar-yen shifted higher Friday and inverted. The euro was little changed around $1.1460 and European sovereign bond yields rose, with the core underperforming the periphery. Norway’s krone and the Canadian dollar advanced as oil prices rose, with Brent trading above $85 per barrel, while the Australian and New Zealand dollars were the worst performers. The pound extended its longest winning streak in nearly two months as the U.K. economy surpassed its pre-pandemic size in November for the first time. Sweden’s krona inched down, shrugging off data showing that the nation’s inflation rate rose to the highest level in 28 years In commodities, crude futures rally with WTI recovering to Wednesday’s best levels near $83 and Brent putting in fresh highs near $85.40. Spot gold is little changed a brief retest of the week’s highs, trading near $1,823/oz. Base metals are mixed: LME nickel adds about 2% extending its recent surge; copper holds a narrow range in the red Looking at the day ahead now, data releases include US retail sales, industrial production and capacity utilisation for December, along with the University of Michigan’s preliminary consumer sentiment index for January and the UK’s GDP for November. Central bank speakers include ECB President Lagarde and New York Fed President Williams. Lastly, earnings releases include Citigroup, JPMorgan Chase, Wells Fargo and BlackRock. Market Snapshot S&P 500 futures up 0.3% to 4,667.00 STOXX Europe 600 down 0.5% to 483.71 MXAP down 0.8% to 195.28 MXAPJ down 0.5% to 639.13 Nikkei down 1.3% to 28,124.28 Topix down 1.4% to 1,977.66 Hang Seng Index down 0.2% to 24,383.32 Shanghai Composite down 1.0% to 3,521.26 Sensex up 0.1% to 61,320.31 Australia S&P/ASX 200 down 1.1% to 7,393.86 Kospi down 1.4% to 2,921.92 German 10Y yield little changed at -0.08% Euro up 0.1% to $1.1467 Brent Futures up 0.8% to $85.16/bbl Gold spot up 0.1% to $1,823.97 U.S. Dollar Index little changed at 94.73 Top Overnight News from Bloomberg Federal Reserve Governor Christopher Waller said that three interest-rate increases this year was a “good baseline” but there may be fewer or even as many as five moves, depending on inflation The U.K. and the European Union agreed to intensify post-Brexit negotiations over Northern Ireland, as Foreign Secretary Liz Truss led the British side for the first time in a meeting at her official country residence Germany’s economy contracted by as much as 1% in the final quarter of 2021 as the emergence of the coronavirus’s omicron strain added to drags on output from supply snarls and the fastest inflation in three decades Japan’s Government Pension Investment Fund, the world’s largest, may mull investing in Chinese government bonds if the market situation improves, GPIF President Masataka Miyazono says at a press conference in Tokyo Ukraine said a cyberattack brought down the websites of several government agencies for hours. Authorities didn’t immediately comment on the source of the outage, which comes as tensions with Russia surge over its troop buildup near the border Russia won’t wait “endlessly” for a security deal with NATO and progress depends on the U.S., Foreign Minister Sergei Lavrov said Friday, keeping up pressure after a week of high-level talks with the West failed to yield noticeable progress Turkey’s newly appointed finance chief said the country’s inflation will peak months earlier and at a level far lower than predicted by top Wall Street banks The global pressures driving inflation higher represent a “major change in trends” and will keep price growth high for the foreseeable future, Bank of Russia Governor Elvira Nabiullina said North Korea appears to have fired two ballistic missiles into waters off its east coast-- in what could be its third rocket-volley test in less than 10 days -- hours after issuing a fresh warning to the Biden administration A more detailed look at global markets courtesy of Newsquawk Asian equity markets weakened amid headwinds from the US where all major indices declined led by losses in tech and consumer discretionary amid a slew of hawkish Fed speak, while mixed Chinese trade data added to the cautiousness in the region. ASX 200 (-1.1%) traded lower as tech and consumer stocks mirrored the underperformance of stateside peers and with nearly all industries on the back foot aside from utilities and gold miners. Nikkei 225 (-1.3%) briefly gave up the 28k level amid a firmer currency and source reports that BoJ policy makers are said to debate how soon they can begin signalling a rate hike. In terms of the notable movers, Fast Retailing was the biggest gainer after it reported a record Q1 net, followed by Seven & I Holdings which also benefitted post-earnings, while Hitachi Construction was at the other end of the spectrum after news that parent Hitachi will offload half its majority stake. KOSPI (-1.4%) eventually underperformed after the Bank of Korea hiked rates by 25bps for a third time in the current tightening cycle to 1.25%, as expected. BoK also noted that CPI is to stay in the 3% range for a while and BoK Governor Lee made it clear that rates will continue to be adjusted which has fuelled speculation of similar action at next month’s meeting. Hang Seng (-0.2%) and Shanghai Comp. (-1.0%) were also pressured with participants digesting the latest trade figures which showed weaker than expected Imports although Exports topped estimates. Nonetheless, the downside was somewhat limited amid ongoing expectations for PBoC easing to support the economy as the Fed moves closer towards a rate lift off and with some encouragement after Evergrande averted its first onshore debt default whereby bondholders approved a six-month postponement of bond redemption and coupon payments. Finally, 10yr JGBs retreated beneath the 151.00 level following the source report that suggested debate within the BoJ on how soon a rate increase can be signalled which could occur ahead of the 2% price target, while this coincided with an increase in the 5yr yield to a 6-year high and a weaker than previous 20yr JGB auction. Top Asian News Chinese Developer R&F Downgraded to Restricted Default by Fitch Macau Cuts Casino License Tenure, Caps Float as Controls Tighten Inflation Irks Asia as Japan Yields Hit Six-Year High, BOK Hikes China Builders’ Dollar Bonds Slump Further; Logan, KWG Lead The major cash equity indices in Europe remain subdued but off worst levels (Euro Stoxx 50 -0.7%; Stoxx 600 -0.6%) as the downbeat APAC mood reverberated into the region amid a slew of hawkish Fed speak, while the mixed Chinese trade data added to the concerns of a slowdown ahead of next week’s GDP metrics. Newsflow had overall been quiet during the European session ahead of the start of US earnings season, but geopolitical tensions remain hot on the radar after North Korea fired its third missile of the year (albeit landing outside Japan’s EEZ), whilst Russia closed all communication channels with the EU and exerted some time-pressure on Washington with regards to Moscow’s security demands. Back to trade, a divergence is seen between Europe and the US as the former catches up to the late accelerated sell-off on Wall Street yesterday; US equity futures have been consolidating with mild broad-based gains seen across the ES (+0.2%), YM (+0.2%), NQ (+0.2%) whilst the RTY (Unch) narrowly lags. Delving into Europe, the UK’s FTSE 100 (-0.1%) is cushioned by gains across its Oil & Gas and Financial sectors as crude oil prices and yields clamber off intraday lows, whilst the SMI (-0.3%) sees some losses countered by its heavyweight healthcare sector. Sectors in Europe are mostly in the red with a slight defensive tilt, although Oil & Gas stands as the top gainer and the only sector in the green. The downside meanwhile sees Tech following a similar sectorial underperformance seen on Wall Street and APAC overnight. In terms of individual movers, DAX-heavyweight SAP (-0.3%) conforms to the losses across tech after initially rising as a result of upgraded guidance and the announcement of a share buyback programme of up to EUR 1bln. The most notable mover of the day has been EDF (-17.5%) as the Co. withdrew guidance after noting the impact of new French price cap measures is forecast to be around EUR 8.4bln on FY22 EBITDA. Top European News EDF Slumps by Most on Record on Hit From Price Cap U.K. Economy Surpasses Pre-Pandemic Size With November Surge German Recovery Lags Rest of Europe on Supply Snarls, Inflation HSBC Markets Chief Georges Elhedery To Take Six-Month Sabbatical In FX, another lower low off a lower high does not bode well for the index and Buck more broadly, but some technicians will be encouraged by the fact that chart supports in the form of a Fib retracement and 100 DMA have only been breached briefly. Meanwhile, Friday may provide the Greenback with a prop via pre-weekend position squaring and US data could lend a hand if upbeat or better than expected at the very least. For now, the DXY is restrained between 94.887-626 confines, with the upside capped by a major trendline that falls just below 95.000 around 94.980, and the Dollar also hampered by pressure emanating outside the basket from the likes of the Yuan, crude oil and other commodities. CAD/JPY/GBP - The Loonie has reclaimed 1.2500+ status in line with a rebound in WTI towards Usd 83/brl, but still faces stiff trendline resistance vs its US counterpart at 1.2451 and probably conscious that several multi-billion option expiries roll off either side of the 1.2500 level today. Conversely, the Yen has cleared the psychological 114.00 hurdle with some fundamental impetus coming from hawkish BoJ source reports contending that policy-setters are contemplating how soon the Bank can telegraph a rate hike that is likely to be delivered prior to inflation reaching its 2% target. Elsewhere, Sterling remains elevated above 1.3700, though unable to scale 1.3750 even with tailwinds from stronger than forecast UK GDP and IP or a narrower than feared trade gap amidst ongoing political uncertainty. CHF/EUR/NZD/AUD - All narrowly divergent and contained against their US rival, with the Franc straddling 0.9100 and Euro holding within a 1.1483-51 range and immersed in hefty option expiry interest spanning 1.1395 to 1.1485 (see 7.01GMT post on the Headline Feed for details). On the flip-side, the Aussie and Kiwi have both lost a bit more momentum after probing 0.7300 and approaching 0.6900 respectively yesterday, and Aud/Usd appears to have shrugged off robust housing finance data in the run up to China’s trade balance revealing sub-consensus imports. SCANDI/EM - Firmer than anticipated Swedish CPI and CPIF metrics have not offered the Sek much support, as the stripped down core ex-energy print was in line and bang on the Riksbank’s own projection. However, the Huf has been underpinned by hot Hungarian inflation and the Cnh/Cny in wake of the aforementioned Chinese trade data showing a record surplus for December and 2021 overall. In Turkey, the Try is flattish following the latest CBRT survey that predicts a weaker year-end Lira from current levels, but above record lows and still well above target CPI, while in Russia the Rub is benefiting from Brent’s rise above Usd 85.50/brl (in keeping with the Nok) against the backdrop of geopolitical and diplomatic strains as the country’s Foreign Minister declares that all lines of communication with the EU have ended. In commodities, WTI and Brent front-month futures have been on an upward trajectory since the Wall Street close, with the former now above USD 83/bbl (vs 81.58/bbl low) and the latter north of USD 85.50/bbl (vs 83.99/bbl low) in European hours. Overall market sentiment has been a non-committal one amid a lack of fresh macro catalysts, however, geopolitical updates have been abundant: namely with Russia’s punchy rhetoric surrounding its security demand from NATO and Washington, whilst North Korea fired what is said to be ballistic missiles which landed just outside Japan’s Exclusive Economic Zone (EEZ). On the demand side of the equation, eyes remain on China’s economic and COVID situations, with the import figures indicating China's annual crude oil imports drop for the first time in 20 years, whilst the nation grounded further flights between the US due to its zero-COVID policy. On the supply side, reports suggested that China will release oil stockpiles in the run-up to the Lunar New Year (dubbed as the largest human migration). The release is part of a coordinated plan with the US and other major consumers, according to the reports, which cited sources suggesting China will likely ramp up its releases if prices top USD 85/bbl. Turning to metals, spot gold is trading sideways and prices waned after again hitting the resistance zone around USD 1,830/oz flagged earlier this week. LME copper meanwhile remains under USD 10,000/t – subdued by the sharp slowdown in Chinese imports suggesting weaker demand, albeit annual imports of copper concentrate hit a historic high in 2021. The trade data also indicated a fall in iron ore imports as a factor of the steel production curbs imposed last year to tackle pollution and high iron ore prices. US Event Calendar 8:30am: Dec. Import Price Index YoY, est. 10.8%, prior 11.7%; MoM, est. 0.2%, prior 0.7% Export Price Index YoY, est. 16.0%, prior 18.2%; MoM, est. 0.3%, prior 1.0% 8:30am: Dec. Retail Sales Advance MoM, est. -0.1%, prior 0.3% Dec. Retail Sales Ex Auto MoM, est. 0.1%, prior 0.3% Dec. Retail Sales Ex Auto and Gas, est. -0.2%, prior 0.2% Dec. Retail Sales Control Group, est. 0%, prior -0.1% 9:15am: Dec. Industrial Production MoM, est. 0.2%, prior 0.5% Capacity Utilization, est. 77.0%, prior 76.8% Manufacturing (SIC) Production, est. 0.3%, prior 0.7% 10am: Nov. Business Inventories, est. 1.3%, prior 1.2% 10am: Jan. U. of Mich. Sentiment, est. 70.0, prior 70.6; Expectations, est. 67.0, prior 68.3; Current Conditions, est. 73.8, prior 74.2 U. of Mich. 1 Yr Inflation, est. 4.8%, prior 4.8%; 5-10 Yr Inflation, prior 2.9% DB's Jim Reid concludes the overnight wrap There was no rest for markets either yesterday as the tech sell-off resumed in earnest, which came as fed funds futures moved to price in a 93% chance of a March rate hike, the highest closing probability to date. At the same time, however, the US dollar continued to weaken and has now put in its worst 3-day performance in over a year, having shed -1.25% in that time. And all this is coming just as earnings season is about to ramp up, with a number of US financials scheduled to report today ahead of an array of companies over the next few weeks. Starting with sovereign bonds, yields on 10yr Treasuries fell a further -3.9bps yesterday, their biggest decline since mid-December, to their lowest closing level in a week, at 1.704%, with most of the price action again happening during the New York afternoon. Lower inflation breakevens helped drive the decline, with the 10yr breakeven down -3.4bps after the producer price inflation data for December came in softer than expected. Indeed, the monthly gain of +0.2% (vs. +0.4% expected) was the slowest since November 2020, and in turn that left the year-on-year measure at +9.7% (vs. +9.8% expected), which is actually a modest decline from the upwardly revised +9.8% in November. As with the previous day’s CPI reading though, there was a more inflationary interpretation for those after one, as the core PPI measure came in at a monthly +0.5% as expected, leaving the year-on-year change at an above-expected +8.3% (vs. +8.0% expected). So something for everyone but no massive surprises either way. The latest inflation data came as numerous Fed speakers continued to match the recent hawkish tone, which helped strengthen investor conviction in the odds of a March hike as mentioned at the top. Philadelphia Fed President Harker said at an event that “My forecast is that we would have a 25 basis-point increase in March, barring any changes in the data”, and that he had 3 hikes pencilled in but “could be convinced of a fourth if inflation is not getting under control.” Separately, we heard from Governor Brainard, who appeared before the Senate Banking Committee as part of her nomination hearing to become Fed Vice Chair. She signalled that she would be open to a March hike as well, saying that they would be in a position to hike “as soon as asset purchases are terminated”, which they’re currently on course to do in March. Even President Evans, one of the most dovish members of Fed leadership, said a March rate hike and multiple hikes this year were a possibility. As it happens, today is the last we’ll hear from various Fed speakers for a while, as tomorrow they’ll be entering their blackout period ahead of the next FOMC announcement later in the month. Staying on the Fed, Bloomberg reported overnight that President Biden has picked three nominees for the vacant slots. They include Sarah Bloom Raskin, previously Deputy Secretary of the Treasury, who’s reportedly going to be nominated to become the Vice Chair of supervision, as well as Lisa Cook and Philip Jefferson, who’d become governors. Cook is an economics professor at Michigan State University, and Jefferson is an economics professor at Davidson College in North Carolina. All 3 would require Senate confirmation, and bear in mind those choices haven’t been officially confirmed as of yet. Over on the equity side, the main story was a further tech sell-off that sent both the NASDAQ (-2.51%) and the FANG+ index (-3.72%) lower for the first time this week, and taking the former to a 3-month low. That weakness dragged the S&P 500 (-1.5%) lower, though despite the stark headline numbers, it was only just over half of the shares in the index that were in the red on the day. Meanwhile in Europe, the STOXX 600 (-0.03%) also saw a modest decline, though the STOXX Banks (+1.10%) hit a fresh 3-year high after advancing for the 8th time in the last 9 sessions. Sovereign bond yields echoed the declines in the US too, with those on 10yr bunds (-3.1bps), OATs (-3.3bps) and BTPs (-4.6bps) all moving lower. Following that tech-driven fall overnight on Wall Street on the back of those hawkish comments, Asian stock markets are trading lower this morning. Japan's Nikkei (-1.42%) extended the previous session’s losses while briefly falling over -2%, as the Japanese Yen found a renewed bid amid the risk-off mood. Additionally, the Kospi (-1.37%) widened its losses, after the BOK lifted borrowing costs by 25bps to 1.25% amidst rising concerns about inflationary pressure. That takes the benchmark rate back to pre-pandemic levels after the central bank's 25bps rate increase in August and November last year. Meanwhile, the Korean government unveiled a supplementary budget worth 14 trillion won in size to continue providing support to the economy. Elsewhere, the Hang Seng index (-0.86%), CSI (-0.60%) and Shanghai Composite (-0.53%) have all moved lower as well. Data released in China showed that exports went up +20.9% y/y in December (vs +20.0% market expectations) albeit imports in December rose +19.5% y/y less than +28.5% as anticipated. That meant that they posted a trade surplus of $94.46bn last month, above the consensus forecast for a $74.50bn surplus. Looking ahead, futures on both the S&P 500 (-0.19%) and DAX (-0.79%) are pointing to further losses later on. Elsewhere in markets, yesterday saw another surge in European natural gas futures (+13.71%), albeit still at levels which are less than half of the peaks seen in mid-December. The latest moves came as Russia’s deputy foreign minister Sergei Ryabkov said that talks with the US had reached a “dead end”, amidst strong tensions between the two sides with Russia rejecting any further expansion of NATO as well as calls to pull back its forces from near Ukraine’s border. In response, the Russian ruble weakened -2.31% against the US dollar yesterday, whilst the MOEX stock index (-4.05%) suffered its worst daily performance since April 2020. Turning to the Covid-19 pandemic, the decline in UK cases continued to accelerate yesterday, with the number of cases over the past week now down -24% relative to the previous 7-day period. Looking at England specifically, the total number of Covid-19 patients in hospital is now down for a 3rd day running, and in London the total number in hospital is down to its lowest level since New Year’s Eve. To the day ahead now, and data releases include US retail sales, industrial production and capacity utilisation for December, along with the University of Michigan’s preliminary consumer sentiment index for January and the UK’s GDP for November. Central bank speakers include ECB President Lagarde and New York Fed President Williams. Lastly, earnings releases include Citigroup, JPMorgan Chase, Wells Fargo and BlackRock. Tyler Durden Fri, 01/14/2022 - 08:13.....»»

Category: dealsSource: nytJan 14th, 2022

One year after the Capitol riot, experts warn more political extremism and violence could be on the horizon in 2022

Experts told Insider that increasing partisanship since the January 6 attack has made a full-throttle condemnation of extremism difficult. Trump supporters clash with police and security forces as people try to storm the Capitol on January 6, 2021 in Washington.Brent Stirton/Getty Images The country marked the first anniversary of the deadly January 6 attack earlier this month. But experts said the root causes of the Capitol riot have yet to be addressed in the year since.  "I want to be real with people — we have hard days to go," Eric Ward, an extremism expert, said.  As the first anniversary of the deadly January 6 Capitol attack arrived earlier this month, the country reflected on the landmark event and its rippling repercussions in the year since.One expert on extremism told Insider that historians will likely look back on the siege — which saw a mob of thousands of Trump supporters storm the Capitol in an attempt to stop the certification of the 2020 election results — as the beginning of an American insurrectionist period, marked by civil unrest and a continuing rise in right-wing extremism.Another suggested January 6 will be remembered as a crossroads for the future of American democracy.But one thing has become clear to both experts in the last year — the political unrest is ongoing."I think what historians will understand most is that the insurrection on January 6 did not end on January 6," Eric Ward, executive director of Western States Center and a senior fellow at the Southern Poverty Law Center, told Insider.And experts' outlook on the ongoing fallout of the siege is not necessarily a positive one."I want to be real with people — we have hard days to go," Ward said. Increasing partisanship since the attack has made it difficult to condemn extremismSince January 6, 2021, authorities have been working to apprehend and punish perpetrators involved in the domestic terrorism incident. The federal government has arrested more than 730 people in connection with the attack that left five people dead and more than 100 law enforcement officers injured. But a dangerous trend of conspiracy theories and lies surrounding the event have allowed a revisionist history of the attack to take shape — promoted by one powerful political entity in particular, according to Heidi Beirich, co-founder of the Global Project Against Hate and Extremism."The rise of extremist groups like the Proud Boys and Oath Keepers are undeniably concerning and very serious," Beirich told Insider. "But even more worrying is the radicalization of the Republican party in the last 12 months since the attack."A December survey from the University of Massachusetts at Amherst found that nearly three-quarters of Republicans believe that President Joe Biden was not legitimately elected to the White House — a staggering statistic considering the number of election experts, government agencies, and Trump allies who have disputed the pervasive claim time and time again.A recent survey from The Washington Post and the University of Maryland provides even more cause for concern — forty percent of Republicans think violent actions against the government could be justified in certain instances.Over the last year, high-profile Republican lawmakers have engaged in ongoing January 6 denialism, purported debunked conspiracy theories, and, for the most part, refused to participate in a bipartisan Congressional committee on the attack."The partisanship is making a full-throttled condemnation of extremism difficult," Beirich said. "You have one party saying this is a threat and we need to do something about it, while the other party is saying those were just tourists on January 6." The lasting effects of Republicans' attitude post-Capitol siege extend beyond downplaying the riot. According to Beirich, the party now seems to be trending toward a disturbing new mission: undermining the US election structure.That progression tracks, according to Ward, who noted that the physical violence witnessed on January 6 was an attempt to subvert the American vote."A few thousand people were close to overthrowing a critical part of American democracy, and that has galvanized that base," he said. "Republican politicians are taking note."Jessica Huseman, editorial director of Votebeat, said the Republican party swiftly made election security a "life or death issue" in the aftermath of January 6. Democrats, however, have not risen to meet them in exuding the same urgency around the topic, she said."I have very little patience for the lack of progress that has been made even though Democrats control... the government," Huseman told Insider. Much of the voting legislation proposed and passed by Democrats at both the state and federal level since last year's attack has focused on targeted issues like gerrymandering, or election technology, Huseman said."Those things are important, but at the end of the day, if we have allowed January 6 to pass us by for a whole year without dealing with the root causes of the crisis, I think we've failed," she said. A person is seen hanging from the Capitol facade.Alan Chin for InsiderThe root cause of that crisis can be traced back to Trump's "Big Lie"The idea of voter fraud within American elections has been a persistent talking point in the Republican party for years, according to Huseman, but Trump was the first to make it an ongoing advocacy issue. Even before the 2020 election, Trump spent much of his presidency spreading the idea that US elections are neither free nor fair. His insistence only intensified as it became increasingly clear that Biden was likely to beat him in the November election, and Trump's fixation with the "Big Lie" that he won the election ballooned into obsession following Biden's victory.The ex-president reiterated the claim during a speech he gave at the "Stop the Steal" rally that preceded the January 6 attack, and he has continued to push the idea in the year since."For democracy to function, the broad groupings of people have to agree you can lose and fight and win another day," Beirich said, "and now Trump has eroded that belief."Trump's lie has undoubtedly had long-lasting effects on members of the Republican party — millions of whom believe Biden should not be president — a reality for which Ward laments, there is little to be done."It is a lie that has led to physical violence and an existential attack on the US," Ward said."But it's not about redeeming those Republicans who have, many through no fault of their own, been deceived," he added. "This is about inoculating the rest of Americans from that lie." Americans worry more violence could be coming, and experts agreeMore than half of Americans believe an attack similar to the Capitol riot will happen again, according to a recent Axios poll. Ward and Beirich said it's possible. "I don't know what form something like this would take, but I think unrest will be coming," Beirich said.Ward predicted 2022 will bring more hate crimes, attacks on elected officials and government employees, and the continued intimidation of educators and healthcare workers.But the "real fight" in the coming year, he said, will revolve around elections. With 2022 midterm elections on the horizon and Trump teasing a possible 2024 campaign, a repeat of January 6 could come sooner than later."It's possible we could find ourselves right back to this moment within the next year or two," Ward said. Beirich pointed to a slate of domestic terrorism events committed around the 2018 midterms, including the Pittsburgh Tree of Life attack and a shooting at a Tallahassee yoga studio, as harbingers of what impending elections could potentially spark later this year."Americans don't understand how fragile our democracy is at this point," Beirich said.Trump supporters clash with police and security forces as the violent mob breached the Capitol on January 6, 2021.Photo by Brent Stirton/Getty ImagesDespite the dread spawned by January 6, Ward said the date also signals hope"January 6 also represents the day that Americans began to defend their democracy," he said, adding that more work is needed to do so.Strong sentiments from civic and religious leaders, as well as politicians speaking out against increasing violence is a necessary stopgap against rising extremism, both experts said. Ward and Beirich also said social media companies have a crucial role to play in combating extremism."Social media can stop allowing these ideas to proliferate," Beirich said. "Same with Fox News."Movement from Democrats on impactful voting legislation, as well as federal resources targeted toward local governments dealing with community insurgence, could also help. "We need a norms-resetting," Beirich said. "We need to try and roll back all the terrible things Trump rolled into our system." But the most important defense against rising extremism in the US, according to Ward and Beirich, lies with everyday Americans."Vote for people not undermining our system," Beirich said. People need to show that extremism is being contested; that people are fighting on behalf of democracy, Ward added."What has to happen is we have to break this illusion that we're losing," he said. "The idea that democracy has lost is to buy into the narrative of the insurrectionists. Democracy is not lost."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 13th, 2022