Tag: March

Turkey Blames JPMorgan For Lira Crash, Launches Probe; Erdogan Threatens “Manipulators”

On Friday, when the Turkish lira suddenly cracked, and suffered its biggest one-day drop since last summer’s crisis as public attention turned to the sudden plunge in the nation’s reserves and the bank’s unexpected 150bps equivalent tightening in policy, JPMorgan FX strategists poured gasoline on the fire when – as the lira was sliding – they published a note recommending a 5.90 target on the USDTRY.

As JPM analysts Anezka Christovova and Saad Siddiqui wrote on Friday morning recommending a lira short, Turkish authorities would likely “attach less significance to lira stability and reduce FX reserve support” for the currency following March 31 elections, resulting in further lira weakness, adding that the pace at which Turkey’s burning net foreign reserves is “unsustainable” and therefore “FX reserve support will abate post local elections on March 31, which could lead to USDTRY trading substantially higher.”

Despite (or perhaps due to) our sarcastic comment….

…. JPM’s note only added impetus to the selloff, and by the end of the day, the TRY has crashed almost 400 pips, closing 5.5% lower on the day as it almost hit JPM’s target, and sparking fresh panic that Turkey’s economy is once again on the edge.

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Predictably, it also sparked Erdoga’s fury, with Turkey’s banking and capital markets regulators opening separate investigations into JPMorgan Chase the bank’s recommendation to short the lira.

Desperate to create a scapegoat for the sudden plunge in the currency, which as it turned out had since last summer been artificially propped up by local banks (while the central bank pretended not to intervene), Turkey delighted at the opportunity to blame the plunge in the lira, which is only just now restarting, on JPMorgan. As a result, the banking regulator BRSA said the JPMorgan analysts’ note had “misguiding and manipulative” content that resulted in volatility in markets and hurt the reputation of Turkish banks, according to state news agency Anadolu. The Capital Markets Board began its own investigation on similar grounds, according to a statement on its website.

According to Bloomberg, the disclosure of the two probes almost simultaneously suggested coordination between the regulators one day after the Turkish currency plunged as much as 6.5% against the dollar, leading retreats among emerging market peers. Panicked by the plunge, Turkey’s central bank was forced to announce a surprise tightening action in the middle of the day to stem the lira’s slump but it only made the selloff worse.

And in keeping with some quite bizarre banana republic measures, the banking regulator began another investigation against banks that manipulated their own clients to buy foreign currencies without naming the financial institutions that are targeted, Anadolu reported.

Finally just to make sure that the public knew the lira’s crash was due to evil “manipulators”, on Sundan Erdogan made it clear that anyone caught selling the lira would probably be thrown in jail…

  • ERDOGAN: MANIPULATORS TO PAY HEAVY PRICE AFTER ELECTIONS

… which in Turkey is not just a figure of speech but virtually an assured outcome. Meanwhile, the real question is how have more investors not realized that Turkey was and remains a quasi dictatorship, one where the rule of law will be changed and trampled any time it suits the “executive president”, whose power will become even greater after next week’s elections, and why is the lira not far lower than where it is now.

Water Is Life – They Are Stealing Our Livelihood and We Aren’t Even Noticing

This article was first published on World Water Day, 22 March 2018.

Author’s Update, March 24, 2019: Today is World Water Day 2019 – and the situation has become much worse.

Today, Jair Bolsonaro, is Brazil’s President, pushed in …

The post Water Is Life – They Are Stealing Our Livelihood and We Aren’t Even Noticing appeared first on Global Research.

Tuesday’s UK Vote Chaos: Will Brexit Never Happen?

We are closing in on the third anniversary of the UK’s referendum to exit the European Union. The decision by the British people on June 23, 2016, was overdramatically called by many as revolutionary, but it was significant without a doubt. In theory, Britain is set to leave the EU in a little more than two weeks — on March 29. Nonetheless, there might not have been a time since the vote in 2016 that Brexit actually happening was so much in doubt as today.

After a historic defeat in January in Parliament of the Withdrawal Agreement negotiated between the British government and Brussels, Prime Minister Theresa May was looking for a way out of the deadlock in Parliament. There have been a wide variety of opinions on May’s deal — most not overly positive, but the main criticism of the Withdrawal Agreement was that the so-called “backstop” for the Irish border was not definitively declared as temporary — which, many fear, could leave Britain in the EU’s Customs Union indefinitely and for as long as Brussels wants, making the UK a “vassal state” (read more on the “backstop” in my previous Brexit article on Mises.org).

On Monday, May got some concessions from Brussels on the “backstop,” making it possible for the UK to leave it by itself — without agreement from the EU, if the EU is breaching the negotiation standards. For the prime minister, as well as mainstream Tories (and the EU of course), this seemed like a breakthrough — but, eventually, it was deemed as not going far enough by the skeptics of the agreement, headed by the Northern Irish DUP, which is securing May’s power, as well as the European Research Group (ERG), i.e., those Tory MPs in favor of a hard Brexit over May’s deal.

Yesterday, in a second “Meaningful Vote” on the deal, it was once more soundly rejected by 391 to 242 — a little smaller gap than the first time, but still overwhelming. Today, Parliament will vote on whether a no-deal, i.e., a hard Brexit where Britain switches to WTO terms without a deal with the EU on March 29, should be possible — this option will in all likelihood also be rejected by a large margin.

Subsequently, there would be a vote on asking the EU to extend Article 50 and thus postpone Brexit until May finds a deal that could pass Parliament. This option might find agreement in Parliament, but not necessarily in the EU: all 27 national governments would have to agree to such an extension, and there are many different opinions voiced by these governments on whether an extension should happen and if so, how.

So where is Britain heading? For the moment, it is almost an impossibility to tell. Theresa May could try to get more concessions from Brussels or find some alternative arrangements to the “backstop” — both not very likely, and arrange a third “Meaningful Vote,” hoping that this time her ERG backbenchers and the DUP would vote for it. She could also simply repeat votes until, she may be hoping, “hard Brexiteers” would, in her opinion, face the reality that their vision has no way of being implemented, and thus, would finally back the deal.

An extension of Article 50 could also happen, which might also lead to more Parliament votes on the agreement — but it could just as easily lead to either a second referendum or re-elections. In the case of snap elections, Theresa May would surely be gone for good — what it would mean for the Tories and thus, Brexit, is entirely unknown. They may lead in the polls at the moment, but such a lead can easily dwindle down, as Theresa May found out herself in 2017.

In the case of a Labour win, socialist Jeremy Corbyn could become prime minister. Corbyn, in contrast to much of his own party, is not very adamant about calling Brexit off, possibly because he knows very well that the Labour constituency is much less enthusiastic about the EU than the party itself. But if hard Brexiteers are thinking that the current Withdrawal Agreement is only a Brexit In Name Only, they will be even more disappointed by Corbyn’s version, which would keep the UK in the Customs Union permanently (not even too mention his socialist policies he could implement in the country itself).

Of course, a no deal Brexit is still on the table. The biggest proponents of Brexit have been arguing that such an exit is to be preferred over a bad deal — indeed, Theresa May said so herself in 2018. A no deal Brexit would potentially cause major political and economic disruptions at the beginning with trade barriers coming in again vis-à-vis Europe (and certainly no friendlier relationship between London and European capitals). But it would also free Britain from all EU’s policies, regardless of whether it’s regulations or trade (or budget contributions). The British government has also announced already that in such an event, it would slash up to 90 percent of its tariffs, which would come quite close to the free-market dream of unilateral free trade.

How likely is a no deal Brexit, though? Not very, actually. As mentioned, Parliament will most likely reject it easily today and Theresa May is opposed to it as well. However, no deal still stays the default option in case no other agreement or extension is agreed to by March 29. Would May let the UK leave without an agreement? At least for now it seems unlikely.

This means that while the 60-something MPs from the ERG might have the best option at hand in theory, they will not find much support anywhere in Parliament or in the government for this option. Instead, by sticking with the no deal option, these pro-Brexit voices might have actually been helping in preventing what they are so adamantly fighting for: Brexit.

Chances of a no deal Brexit might have increased slightly yesterday, as chances of an orderly Brexit have gone down. But the overall possibility of Brexit actually happening on March 29 — not even talking about happening at all — have plummeted.

Hard Brexiteers had the opportunity yesterday to push a deal through Parliament which would have resulted in Britain leaving the EU in two weeks. That deal is not perfect, but it would have done the job of actually making Brexit happen. That deal, even besides that, was much better than it is commonly made out to be, as Open Europe’s Henry Newman summed it up last week.

Yet, despite finally officially making the ‘Brexit dream’ come true for themselves, they refused to. Of course, they can blame others for it: Theresa May, the EU, the opposition. And rightfully so from their perspective. But they knew that all of these other parties would not be on their side. As Alex Massie wrote before yesterday’s vote, “if the Commons is serious about avoiding a no-deal Brexit — and that is certainly the will of a majority of members — this set of arrangements, however inconvenient, is the best, hardest, Brexit available. Sometimes, however, you wonder if the ERG actually crave defeat and martyrdom.”

For me personally, I have defended Brexit from the first day it happened. I have made the case of unilateral free trade on many occasions. I have criticized, again and again, the EU’s response to the British wish to exit. And, indeed, I have put the leader of the ERG, Jacob Rees-Mogg, on a pedestal at least on one occasion.

But that all the hopes of hard Brexiteers at this point — with two weeks to the exit but with no end in sight — rests on the distant hope that May would let no deal simply happen, is surprising to the say the least. Indeed, the refusal of hard Brexiteers to face the political reality that their vision simply does not seem feasible, regardless of how unfair this may be, and that there is a solid alternative in front of them which they do not care for because it’s not perfect, is, put simply, frustrating (and can make people emotional, as you may notice reading this).

Who knows: maybe they still have a last trick up their sleeve — or maybe Theresa May will pull off some shocking stunt saving Brexit in the coming weeks or just letting no deal as the default option happen. But the events of the past days and weeks make this look rather unlikely. Instead, Brexit, this decision which was hailed as a great opportunity, is becoming, as Bob Seely noted, Hotel California: “You can check out any time but you can never leave.”

Nancy Pelosi: Trump ‘Has Decided to be in Defiance of the Constitution’

(CNSNews.com) – House Speaker Nancy Pelosi (D.-Calif.) said at a press conference in New York City on Wednesday that President Donald Trump is “in defiance of the Constitution” with his move to declare a national emergency in order to fund construction of a wall on the U.S.-Mexico border.

Pelosi indicated that the House will vote on March 26 to try to override Trump’s veto of the resolution that Congress passed last week disapproving of the president’s national emergency declaration. Pelosi conceded that the House probably did not have the votes to override Trump’s veto but that the vote would demonstrate where Congress stands on the issue as it heads into the courts.

“We established March 26th as the date we would vote to override the president’s veto,” Pelosi said.

https://www.mrctv.org/embed/538136

“Whether we can succeed with the number of votes is not the point,” she said.

“We are establishing the intent of Congress,” Pelosi continued. “The president has–we are Article I, the first branch of government, the Legislative Branch–the president has decided to be in defiance of the Constitution, to deface it with his actions.

“Both Houses of Congress, in a bipartisan way, sent him a bill that said this is how we’ll address border security,” Pelosi said, referring to the appropriations bill that did not include the wall funding Trump wanted.

“He had to sign the bill to keep government open,” Pelosi said.

“He defied the Constitution with his action,” she said. “Congress has overridden that. He did veto it, but we’ll, this–Establishing the intent of Congress will help us in the court of law and in the court of public opinion.

“Twelve Republican Senators said no to the president when he wanted to usurp the Constitution of the United States,” she said.

“So, we didn’t have it this week because we’re in district work period this week. As soon as we go back on Tuesday, we will bring up that legislation,” she said.

Interest Rates and the US Economy. The Capitulation of Federal Reserve Chairman Jerome Powell

This past week, on March 20, 2019, Federal Reserve chairman Jerome Powell announced the US central bank would not raise interest rates in 2019. The Fed’s benchmark rate, called the Fed Funds rate, is thus frozen at 2.375% for the …

The post Interest Rates and the US Economy. The Capitulation of Federal Reserve Chairman Jerome Powell appeared first on Global Research.

Interest Rates and the US Economy. The Capitulation of Federal Reserve Chairman Jerome Powell

This past week, on March 20, 2019, Federal Reserve chairman Jerome Powell announced the US central bank would not raise interest rates in 2019. The Fed’s benchmark rate, called the Fed Funds rate, is thus frozen at 2.375% for the …

The post Interest Rates and the US Economy. The Capitulation of Federal Reserve Chairman Jerome Powell appeared first on Global Research.

CPAC Banishes America-Firsters, Welcomes Liberals With Open Arms

Multiple conservatives were booted out of this year’s GOP-backed Conservative Political Action Conference, while left-leaning journalists were given press credentials and one well-known radical leftist was even invited to speak.

By John Friend

The 2019 Conservative Political Action Conference, commonly known as CPAC, wrapped up on Saturday, March 2, with a reported record crowd of attendees and a fiery concluding speech by President Donald Trump in which he ripped Democrats and their socialist agenda while defending American values and his administration. The four-day conference, which brought together conservative activists from across the country, was held once again at the Gaylord National Resort and Convention Center in National Harbor, Md., just south of the nation’s capital on the Potomac River.

The president spoke for over two hours and touched on a variety of topics central to his 2016 presidential campaign, including the threat of illegal immigration, America’s disastrous trade deals, the reviving U.S. economy, and related subjects. Trump, like virtually all speakers and panels at this year’s conference, denounced the socialist agenda of the Democratic Party, focusing particular attention on the proposed Green New Deal advanced by radical far left congressional representatives including the firebrand freshman Rep. Alexandria Ocasio-Cortez (N.Y.). The Democrats were also characterized as promoting “a culture of death” for their support for controversial abortion practices, including partial-birth and late term abortions.

Think the IRS Never Loses Cases? Think again!

Trump’s freewheeling speech and the crowd’s response was reminiscent of the spirited, high-energy rallies then-candidate Trump held around the country during the 2016 campaign season. The president expressed confidence in his political future and that of the Republican Party heading into the 2020 election season.

“Our movement and our future in our country is unlimited,” President Trump stated. “I think we’re going to do even better in 2020.”

Perhaps one of the biggest stories to come out of the conference was the fact that a number of America-first nationalists and independent journalists were either excluded or expelled from the conference. Nick Fuentes, a young, independent pundit who hosts a popular YouTube program called “America First,” was kicked out of the conference, as were the independent journalists and political activists Patrick Casey, Faith Goldy, and Laura Loomer.

Meanwhile, several left-leaning journalists, including Jared Holt of Right Wing Watch, who regularly maliciously targets American populists and nationalists, were given press credentials and allowed to attend and cover the event. Van Jones, a radical left-wing commentator and pundit, even spoke at the conference, while some of the most popular conservative voices in America, such as Ann Coulter and Tucker Carlson, were not even invited.

Ship of Fools, Carlson
Brand new and available now from AFP, Tucker Carlson’s “Ship of Fools”

Fuentes, Casey, and Goldy organized and held their own press conference after it was made clear to them they were not welcomed at CPAC.

“This year, CPAC decided to ban American nationalists, while welcoming anti-American leftists,” Casey stated on Twitter when announcing the press conference, which took place the evening of March 3 at a private suite at the Gaylord.

Fuentes was especially targeted, not only by CPAC but also by many journalists and activists at the conference, who were determined to expel him from their venue.

“There has been a lot of slander and name-calling going on this week by so-called ‘conservatives’ trying to justify keeping me out of their little corporate club,” Fuentes tweeted recently. “I’ve been called a lot of things, but I’ve never been called un-American, and that’s all that matters.”

The fault lines in the conservative movement are becoming increasingly well-defined. A clear divide exists between the more populist, rightwing conservative movement, which denounces political correctness and is unafraid to openly address some of the most controversial and taboo subjects, and establishment conservatives represented at CPAC. Both factions are vying for the hearts and minds of conservative voters and activists in an attempt to bring the movement more into line with their worldview.

John Friend is a freelance author based in California.

RELATED ARTICLES FROM AMERICAN FREE PRESS

Three Neo-Nazis Lead Ukraine’s Presidential Contest: Gallup Finds Ukrainians Despise All the Candidates

Eric Zuesse

Gallup headlined on March 21st, “Ukraine’s Election: Voters Disenchanted Ahead of Key Vote”, and “World-Low 9% of Ukrainians Confident in Government”. Might the reason for both be that no candidate in the contest is respected by the Ukrainian public, and that only three — the candidates with the least-low public approval — are the only ones who have even a remote chance of winning, and that all three of those candidates are racist-fascists, or hold the ideology of nazism? This will be documented here:

Nazism, which is the ideology of fascism but with a heavy added component of racism, has been doing well in post-‘revolutionary’, or post-2013, or post ‘Maidan’ ‘revolution’, Ukrainian politics. The form of racism that dominates today’s Ukraine is against Russians more than against Jews, and so though the ideology is the same as was Germany’s nazi ideology, its main ethnic target isn’t the same. Some of Ukraine’s leading nazis are, in fact, Jews who hate Russians. Whereas Germany’s nazis wanted to exterminate all Jews, Ukraine’s nazis want to exterminate all Russians. But this is all that Ukraine’s voters are being offered, ever since the democratically elected President was thrown out in February 2014. He was fairly unpopular, but not as despised as the politicians who replaced him and his Government are.

The three top Presidential contenders in the upcoming March 31st election, as shown in all the polling, are:

Yulia Tymoshenko, the former ‘gas princess’ who had been convicted and sent to prison for skimming from Ukraine’s gas monopoly, the National Oil and Gas Company of Ukraine. She had established herself as a passionately anti-Russian Prime Minister and had been the preferred candidate of the Barack Obama U.S. Administration to win the 25 May 2014 election, but that election was instead won by a more moderate anti-Russian, the candy and shipbuilding oligarch Petro Poroshenko, who, as President, continued the ethnic-cleansing campaign that had been started by the interim leader of Ukraine who had been selected as Ukraine’s leader in a famous phone call by Victoria Nuland, who was U.S. President Obama’s top operative planning and executing the February 2014 U.S. coup, which coup overthrew the elected President, who hadn’t been sufficiently anti-Russian to suit U.S. President Obama. When I posted the transcript of that phone call years later, I noted that: “This historically mega-important phone-call, which was posted to the internet a week later, on February 4th — three weeks before the man whom she named there received (just as she had instructed) the appointment to lead the post-coup Ukraine — isn’t even being denied by Washington. Instead, it’s either ignored by them, or else totally misrepresented, in the ‘historical’ accounts by the agents of the U.S. regime.” The person she selected there to rule the interim government was “Yats” Yatsenyuk, Tymoshenko’s choice, who was chosen because if Nuland had appointed Tymoshenko, then Tymoshenko would have been unable to run in the 25 May 2014 Ukrainian Presidential election.

Petro Poroshenko, the incumbent President, and Ukrainian oligarch who had beaten Tymoshenko in the 2014 contest. He continued the ethnic cleansing campaign because unless enough of the voters in the far eastern region of Ukraine — where the elected President who had been ousted had received over 90% of the votes — were killed or else evacuated Ukraine (mostly by fleeing into neighboring Russia), Ukraine would again have an insufficiently anti-Russian Government to satisfy the U.S. Government, which wanted Ukraine in NATO. Consequently, both the Obama Administration and the IMF were strong supporters of continuing the ethnic-cleansing campaign. (And the U.S. regime is also using white phosphorous to burn whole areas to death in Syria, and a French officer who complained about it was punished by the French Government.) That campaign in far-east former Ukraine had enough success so as to ensure continuation of a rabidly anti-Russian Ukrainian Government, in elections such as now are taking place.

Volodmyr Zelenskiy, the popular Ukrainian actor and comedian who played Ukraine’s President on Ukranian TV, in a series telecast on a TV channel that is owned by the Ukrainian oligarch Ihor Kolomoyskyi, who, as a U.S.-appointed governor in eastern Ukraine during Poroshenko’s Presidency, had planned and overseen in Odessa on 2 May 2014 a massacre of opponents of the U.S. coup. Subsequently, Poroshenko fired Kolomoyskyi — an oil and gas oligarch himself — because Kolomoyskyi’s personal team of thugs, which he called his “militia,” had raided the National Oil and Gas Company of Ukraine, in order to expel the new government-appointed chief. So, Kolomoyskyi hates Poroshenko, and is determined that Poroshenko not be re-elected. His preferred candidate, and employee, Zelenskiy, leads in the polling, thus far. Zelenskiy is like a Ukrainian Donald Trump, who also won because he had no plicy-making track-record and he ran against people who did.

Here are recent polling results:

On March 13th, Reuters headlined “Comedian Zelenskiy extends Ukraine presidential poll lead”, and reported SOCIS polling during 5-10 March showed 20.7% for Zelenskiy, 13.2% for Poroshenko, and 11.0% for Tymoshenko.

Wikipedia’s article “Opinion polling for the 2019 Ukrainian presidential election” shows trendlines for each polling organization and for each of the three major candidates. Zelenskiy is now around 25%, and both Poroshenko and Tymoshenko are each around 18%.

Therefore, Zelenskiy seems to be heading into a run-off against either Poroshenko or Tymoshenko.

The Gallup report on March 21st, “World-Low 9% of Ukrainians Confident in Government”, said that:

Currently in the lead — according to other national polls in Ukraine — is comedian and actor Volodymyr Zelensky, who is most widely known for playing the president of Ukraine in the popular television series “Servant of the People.” Like his character on the show, Zelensky is campaigning largely on an anti-corruption platform — which likely resonates with many voters. Incumbent Poroshenko is working to shift the focus off of the many scandals he has been accused of and is taking a hard-line stance, promising to join NATO and reclaim Crimea if he wins re-election. Tymoshenko initially led the large field of candidates but has fallen in the polls recently as rumors regarding her involvement in corrupt deals for natural gas have resurfaced.

However, whoever will ultimately win, will almost certainly continue the U.S. Government’s campaign to get Ukraine admitted into America’s anti-Russian military alliance, NATO, so as to be able to place U.S. missiles close enough to Moscow so that a blitz knockout blow to conquer Russia could — some U.S. strategists hope and believe — become possible.

Obama’s strategy to conquer Russia is being carried forward by his successor, Trump.

Here is additional background on each of the three individuals who is a prospective next President of Ukraine:

Tymoshenko: In a phone-conversation with a political supporter on 18 March 2014, while Tymoshenko was Barack Obama’s and Hillary Clinton’s preferred candidate to replace the democratically elected President of Ukraine, Viktor Yanukovych, whom Obama’s February 2014 entirely illegal and very bloody coup in Ukraine had just recently overthrown, the then Ukrainian candidate to replace Yanukovych, Tymoshenko said “We should take weapons and shoot those God damned Russians along with their leader [Putin]. … I hope that [as Ukraine’s President] I will use all my connections [especially Obama and Clinton], and stir the entire world to action in order to make Russia into a field of scorched earth. … We should burn them with nuclear weapons!” Since Ukraine had no nuclear weapons, she was expressing there the hope that her connections inside the U.S. White House and State Department would produce a Third World War that would terminate Russia.

Poroshenko: The way he carried out the ethnic-cleansing campaign that had been started by the interim leader of Ukraine whom Obama’s agent Victoria Nuland had appointed, Arseniy Yatsenyuk, was to capture and kill all leaders of the resistance, and to bomb and terrorize into submission the residents in the resisting region. Under Yatsenyuk, a system was planned to be patterned upon Hitler’s treatment of Jews, Gypsies and other unwanted people, and it entailed concentration camps, but Poroshenko just wanted the people to die or else escape into Russia, so they’d not be voting in any future Ukrainian election. He also wanted the U.S. to help him to defeat the resistors, so that Ukraine could retake Crimea, which had been part of Ukraine during 1954-2014 but was Russian — and strongly pro-Russian ever since at least 1783. The Soviet dictator, Khruschchev, had been Ukrainian, and he arbitrarily transferred Crimea from Russia to Ukraine in 1954. Obama and Clinton insisted that Khruschev’s arbitrary decision continue to be honored, regardless of what the residents of Crimea wanted. Trump does likewise.

Zelenskiy: His patron, Kolomoyskyi, was one of the two main planners of the 2 May 2014 extermination inside the Odessa Trade Unions building, in which people who had distributed leaflets opposing the coup were trapped and burned and clubbed and shot to death. Like Donald Trump when Trump had run for the U.S. Presidency in 2016 against Clinton, Zelenskiy has no political track-record, but only political blatherings, by which his alleged policy-views can become (however dubiously) inferred by voters. And he seems likely to become Ukraine’s President in the same way that Trump did: by having no actual policymaking track-record, and running against opponent(s) whose policymaking track-records the electorate already know to be rotten.

The U.S. regime praises Ukraine now as a ‘democracy’ (and Americans apparently believe that). Before the U.S. take-over, it was called (by the U.S. Government and its allies) ‘authoritarian’ or ‘a dictatorship’. (That was when Ukraine had a freely elected President, who represented the whole country, instead of a truncated country, without the two regions that have the most strongly pro-Russia voters, who had voted the heaviest for that democratically elected President. The U.S. regime wants to control those regions, too, but without its residents. The U.S. regime wants the land, but not the people. The U.S. wants those people there eliminated. This is the type of ‘democracy’ America now is.)

—————

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

The 737 MAX Saga Is a Total Disgrace for Boeing and the FAA

by Michael Krieger, Liberty Blitzkrieg: The Worship of Mammon by Evelyn De Morgan. One of the first things to become apparent as I began reading about the deadly crash of Ethiopian Airlines’ Boeing 737 MAX 8 plane on March 10th, was the fact that nobody seemed to trust U.S. authorities. As Fortune noted: Ethiopia’s aviation authority is unable to […]

The post The 737 MAX Saga Is a Total Disgrace for Boeing and the FAA appeared first on SGT Report.

Video: Caracas Streets and Store — Food Crisis? See for Yourself!

I filmed these scenes on March 10, but until now have been too busy and also lacking good enough internet to upload.

My objective in filming is not to say there is no poverty in Venezuela, nor to imply there …

The post Video: Caracas Streets and Store — Food Crisis? See for Yourself! appeared first on Global Research.

Ukrainian Presidential Elections: Authoritarianism in Action

March 2019 is notable in the post-Soviet space for three interrelated reasons, all of which deal with Ukraine: it was half a decade ago that Crimea reunited with Russia, after which the country began its descent into failed state status, …

The post Ukrainian Presidential Elections: Authoritarianism in Action appeared first on Global Research.

SEC Slams “Ridiculous” Elon Musk “Reckless Conduct” In Contempt Motion Response

On Monday night, the Securities and Exchange Commission responded to Elon Musk’s “contempt” defense, shredding Musk’s arguments and making it clear that the regulatory agency will not back down in its attempt to get Musk held in contempt of court following a February tweet regarding Tesla’s production guidance. 

Musk had argued against the contempt of court motion days ago, with his well-paid lawyers bizarrely calling it an “unconstitutional power grab”. Musk’s lawyers argued, on his behalf, that production numbers – the lifeblood of the company’s relationship to Wall Street – were immaterial, also claiming that the Tweet “dutifully complied with the [settlement] Order”.

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The SEC made it clear in their response that they saw things very differently. They eviscerated the argument that production numbers were somehow not material, arguing:

“Musk’s recognition of the significance of Tesla’s vehicle production forecasts to investors is evidenced by the frequency with which he and Tesla highlight such forecasts in their public statements. For years and continuing through the company’s most recent earnings release, Tesla and Musk have prominently featured vehicle production forecasts in their public communications, including Tesla’s investor letters, Musk’s tweets, and the company’s filings with the SEC.

While some companies emphasize forward-looking guidance on financial metrics such as revenue and earnings per share, Tesla often highlights guidance regarding expected production rates and deliveries. Given this focus on Tesla’s production capabilities, Musk cannot credibly argue that his statement, as Tesla’s CEO, that the company ‘will make around 500k’ cars in 2019 could not have reasonably contained information material to Tesla and its investors.” 

The SEC continued, referring to Musk’s Tweet as “reckless conduct” and calling it “stunning” that Musk had not sought pre-approval for a single Tweets about Tesla since his settlement forcing him to do just that: 

“The pre-approval requirement was designed to protect against reckless conduct by Musk going forward. It is therefore stunning to learn that, at the time of filing of the [contempt] motion, Musk had not sought pre-approval for a single one of the numerous tweets about Tesla he published in the months since the court-ordered pre-approval policy went into effect. Musk reads this Court’s order as not requiring pre-approval unless Musk himself unilaterally decides his planned tweets are material. His interpretation is inconsistent with the plain terms of this Court’s order and renders its pre-approval requirement meaningless.”

The SEC did not request specific relief in its brief. Before the night was over on Monday, a letter from Musk’s attorneys hit the docket, requesting the court’s permission to file a sur-reply by March 22 to respond to the SEC as all signs point to Musk wanting to continue his fight, head on, with the regulatory agency. 

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The SEC has been looking to hold Tesla CEO Elon Musk in contempt for breaching a court ordered settlement that Musk slithered away with as a result of his fraudulent tweet from last summer claiming he had funding secured for the buyout of Tesla at $420 per share. After the SEC alleged that a recent Tweet from February 19 was in violation of Musk’s court order to have his social media posts pre-approved by a lawyer, Musk responded to the SEC action in late February by calling the agency “embarrassing”.

The SEC FOIA experts at Probes Reporter said that the agency’s contempt motion response shows that they are “playing for keeps” and will “crush Musk if needed”. 

The rest of Twitter, as usual, was vocal in its response to the filing.

“The SEC requests that this court hold Musk in contempt and impose an appropriate remedy to ensure future compliance,” the filing concludes. 

At this point, the ball is in the court of U.S. District Judge Alison Nathan, who has the authority to issue additional legal remedies such as additional fines and officer/director bars.

You can read the SEC’s full reply brief here.

Krieger: “The 737 MAX Saga Is A Total Disgrace For Boeing & The FAA”

Authored by Mike Krieger via Liberty Blitzkrieg blog,

One of the first things to become apparent as I began reading about the deadly crash of Ethiopian Airlines’ Boeing 737 MAX 8 plane on March 10th, was the fact that nobody seemed to trust U.S. authorities.

As Fortune noted:

Ethiopia’s aviation authority is unable to read the black box recorders from the Boeing 737 Max plane that crashed Sunday, but a row is brewing over just where the flight recorders will be sent for analysis.

The U.S. National Transportation Safety Board is pushing to have its experts analyze the data and voice recorders, which were partly damaged, the Wall Street Journal reports, but Ethiopian authorities would prefer to work with the U.K.’s Air Accidents Investigation Branch to ensure that U.S. experts won’t have undue influence in the probe of the American-made plane.

At the same time, pretty much the entire world had started to ground 737 MAX planes as this was the second time this model had crashed within the span of five months. By early last week, Canada and the U.S. had become increasingly isolated in insisting the planes were safe to fly, and then Canada folded too.

This represented a huge rebuke to the U.S. Federal Aviation Administration (FAA), which continued to defend the aircraft until the very last moment. In a ridiculous stunt, Transportation Secretary Elaine Chao even rode in a 737 MAX two days after the latest crash.

Many people, including myself, saw this lack of trust in the FAA as a watershed moment. Politico noted:

It was a sharp contrast to the typical way such decisions have been made in the past, in which countries would follow the lead of the agency that had certified the aircraft in question. In this case, that would be the FAA, which has historically been seen as the gold standard among aviation safety regulators.

Given the plethora of information to emerge in recent days, it turns out the rest of the world was correct to distrust the FAA and Boeing. The most illuminating article on the subject was published yesterday in The Seattle Times, titled: Flawed Analysis, Failed Oversight: How Boeing, FAA Certified the Suspect 737 Max Flight Control System.

If you read one article today, that should be it. It becomes perfectly clear that both the FAA and Boeing played major roles in allowing flawed planes to fly all over the world, and it took two disastrous crashes, as well as the whole world grounding them, to finally act.

Here’s some of what we learned. First, the FAA essentially outsourced much of its certification process for the 737 MAX planes to Boeing itself. Yes, you read that right.

The FAA, citing lack of funding and resources, has over the years delegated increasing authority to Boeing to take on more of the work of certifying the safety of its own airplanes. Early on in certification of the 737 MAX, the FAA safety engineering team divided up the technical assessments that would be delegated to Boeing versus those they considered more critical and would be retained within the FAA.

But several FAA technical experts said in interviews that as certification proceeded, managers prodded them to speed the process. Development of the MAX was lagging nine months behind the rival Airbus A320neo. Time was of the essence for Boeing.

As usual, it’s all about the money.

A former FAA safety engineer who was directly involved in certifying the MAX said that halfway through the certification process, “we were asked by management to re-evaluate what would be delegated. Management thought we had retained too much at the FAA.”

“There was constant pressure to re-evaluate our initial decisions,” the former engineer said. “And even after we had reassessed it … there was continued discussion by management about delegating even more items down to the Boeing Company.”

We also learn that the MCAS (Maneuvering Characteristics Augmentation System) was seemingly central to both fatal MAX crashes, and according to The Seattle Times, “the System Safety Analysis on MCAS, just one piece of the mountain of documents needed for certification, was delegated to Boeing.”

Even worse, Boeing gave inaccurate details to the FAA about MCAS and only informed it of the discrepancy after the first crash.

After the Lion Air Flight 610 crash, Boeing for the first time provided to airlines details about MCAS. Boeing’s bulletin to the airlines stated that the limit of MCAS’s command was 2.5 degrees.

That number was new to FAA engineers who had seen 0.6 degrees in the safety assessment.

“The FAA believed the airplane was designed to the 0.6 limit, and that’s what the foreign regulatory authorities thought, too,” said an FAA engineer. “It makes a difference in your assessment of the hazard involved.”

As such, according to The Seattle Times, Boeing gave inaccurate information to the FAA and foreign aviation regulators, an oversight that may have made a difference between life and death.

But there’s still more. Pilots weren’t even made aware about the MCAS in the first place so Boeing could sell more planes and save money on costs.

We learn:

Since MCAS was supposed to activate only in extreme circumstances far outside the normal flight envelope, Boeing decided that 737 pilots needed no extra training on the system — and indeed that they didn’t even need to know about it. It was not mentioned in their flight manuals.

That stance allowed the new jet to earn a common “type rating” with existing 737 models, allowing airlines to minimize training of pilots moving to the MAX.

Dennis Tajer, a spokesman for the Allied Pilots Association at American Airlines, said his training on moving from the old 737 NG model cockpit to the new 737 MAX consisted of little more than a one-hour session on an iPad, with no simulator training.

Minimizing MAX pilot transition training was an important cost saving for Boeing’s airline customers, a key selling point for the jet, which has racked up more than 5,000 orders.

The company’s website pitched the jet to airlines with a promise that “as you build your 737 MAX fleet, millions of dollars will be saved because of its commonality with the Next-Generation 737.”

Finally, in case you don’t think that’s bad enough, make sure you read through the following thread.

This whole affair seems like a perfect microcosm for our twisted and broken modern U.S. economy and culture in general. Greed, regulatory capture and death — it has it all.

Unfortunately, we appear determined to ride this freight train straight into a brick wall.

*  *  *

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Nunes Sues Twitter For $250 Million In “Shadow Ban” Lawsuit

Rep. Devin Nunes (R-CA) filed a lawsuit against Twitter and several of its users on Monday seeking $250 million in compensatory damages and $350,000 in punitive damages, reports Fox News.

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The suit accuses the social media giant of “shadow-banning conservatives,” including himself, in order to influence the 2018 US elections through the systematic censorship of certain opinions – while “ignoring” multiple lawful complaints of abusive behavior. 

Also included in the lawsuit are several accounts which Nunes claims defamed him – accusing the lawmaker of being a racist, having “white supremacist friends” and turning out “worse than Jacob Wohl,” a 21-year-old political exhibitionist and former investment adviser who was charged with 14 counts of securities fraud in 2017. 

The lawsuit alleges defamation, conspiracy, and negligence, and seeks not only damages, but also an injunction compelling Twitter to turn over the identities behind numerous accounts he says have harassed and defamed him.

Although federal law ordinarily exempts services like Twitter from defamation liability, Nunes’ suit said the platform has taken such an active role in curating and banning content — as opposed to merely hosting it — that it should face liability like any other organization that defames. –Fox News

“Twitter created and developed the content at issue in this case by transforming false accusations of criminal conduct, imputed wrongdoing, dishonesty and lack of integrity into a publicly available commodity used by unscrupulous political operatives and their donor/clients as a weapon,” reads the lawsuit. “Twitter is ‘responsible’ for the development of offensive content on its platform because it in some way specifically encourages development of what is offensive about the content.”

Twitter is accused of supporting “an orchestrated defamation campaign of stunning breadth and scope, one that no human being should ever have to bear and suffer in their whole life,” after the platform allowed defamatory material to be spread about Nunes. 

The complaint also named specific Twitter accounts that spread allegedly defamatory material about Nunes. One defendant, identified as “Liz” Mair, purportedly published tweets that “implied that Nunes colluded with prostitutes and cocaine addicts, that Nunes does cocaine, and that Nunes was involved in a ‘Russian money laundering front,'” according to Nunes’ lawyers. –Fox News

According to the complaint, “Twitter did nothing to investigate or review the defamation that appeared in plain view on its platform. Twitter consciously allowed the defamation of Nunes to continue” despite reports and reviews by Twitter’s content moderators. 

“As part of its agenda to squelch Nunes’ voice, cause him extreme pain and suffering, influence the 2018 Congressional election, and distract, intimidate and interfere with Nunes’ investigation into corruption and Russian involvement in the 2016 Presidential Election, Twitter did absolutely nothing,” the complaint continues. 

On Monday, Twitter admitted to shadowbanning The Federalist co-founder Sean Davis. 

Tweeting a passage last week from former FBI attorney Lisa Page’s Congressional testimony discussing the FBI’s rush to find connections between the Trump campaign and Russia, Davis pointed out the irony of Hillary Clinton’s campaign employing former UK spy Christopher Steele, a foreign national, “working with Russians to obtain damaging information about Donald Trump.” 

 

Twitter Admits Shadowbanning Lisa Page Tweet By Federalist Co-Founder “To Keep People Safe” 

Twitter has admitted to shadowbanning a tweet by The Federalist co-founder Sean Davis in order to “keep people safe.” 

Tweeting a passage last week from former FBI attorney Lisa Page’s Congressional testimony discussing the FBI’s rush to find connections between the Trump campaign and Russia, Davis pointed out the irony of Hillary Clinton’s campaign employing former UK spy Christopher Steele, a foreign national, “working with Russians to obtain damaging information about Donald Trump.” 

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Of note, the dossier Steele compiled which was subsequently used to obtain a warrant to spy on a Trump adviser (and later smear Trump) relied on a “senior Russian Foreign Ministry figure” and “a former top level intelligence officer still active in the Kremlin,” according to Vanity Fair. 

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Following his March 12 tweet, Davis wondered if Twitter was experimenting with “shadow bans” – as he could only see his tweet if he was logged in, meaning nobody else could see it.

Six days later, Twitter confirmed with Davis that they had deliberately shadow-banned his tweet in order to “keep people safe.”

“Twitter gave me no notice or explanation when it shadowbanned one of my Tweets about Russian interference in our elections,” wrote Davis, adding “But what’s worse is how Twitter apparently gives its users the fraudulent impression that their tweets, which Twitter secretly bans, are still public.“

In short, Twitter did not want the public to consider the irony of Hillary Clinton’s campaign paying for a foreign national to collude with Russians against Donald Trump, while the FBI scrambled to prove the Trump campaign did. 

Unreal.

In other censorship news, ZeroHedge is now banned in New Zealand and much of Australia following our reporting on the Christchurch terror attacks. 

Sorry citizen, some facts are just too dangerous for your own good.

Map (and Objectives) of the Irregular War on Energy in Venezuela

The latest evidence gathered by the Venezuelan government and presented on Monday, March 11, to the Venezuelan population about the attack on the national electricity system, allows us to reconstruct the multidimensional nature of the attack that was unleashed in …

The post Map (and Objectives) of the Irregular War on Energy in Venezuela appeared first on Global Research.

CME says euro trading has moved to Amsterdam ahead of Brexit

March 18, 2019

By Huw Jones

LONDON (Reuters) – Euro-denominated government bond, repurchase agreement and foreign exchange trading at CME Group has moved from London to Amsterdam to avoid disruption from Brexit, the exchange said on Monday.

CME Group, one of the world’s biggest exchanges, set up new units in the Dutch financial capital to avoid European Union customers being disrupted by whatever form Britain’s departure from the bloc takes.

Clearing of its euro repo trades at London Stock Exchange’s LCH unit in London had already moved to LCH’s Paris arm in order to be inside the EU after Brexit.

Migration of trading and clearing is a blow to London as a global financial center, with more business to follow the Chicago-headquartered exchange.

While Brexit is due to take place on March 29, it now looks increasingly likely that it will be delayed.

Cboe Europe, the largest pan-European share trading platform, plans to move euro-denominated share trading from London to a new unit in Amsterdam, with trading starting on April 1.

But Cboe Europe said last week it was “closely monitoring” political discussions and would react as quickly as possible to any developments that would alter this launch date.

Britain’s government is scrambling to get support in parliament for a Brexit deal ahead of an EU summit on Thursday.

Separately on Monday, EuroCCP, a clearing house for stock trades, said it had obtained regulatory approval to clear trades for the new EU entities of Cboe Europe, Aquis Exchange, and London Stock Exchange’s Turquoise from April 1.

EuroCCP said it had also “on-boarded” six new EU-based entities acting as clearing members, and more than 10 new EU-based trading members.

EuroCCP, which clears over 30 percent of European share trades, is incorporated in the Netherlands and owned by Dutch Bank ABN Amro, Cboe Europe, Euronext, Nasdaq, and the U.S. Depository Trust & Clearing Corp (DTCC).

The announcement means that a large chunk of clearing in euro-denominated share trades, currently handled by EuroCCP and rivals like LCH in London, is also set to move to Amsterdam.

Clearing refers to a third party that ensures completion of a trade even if one side goes bust.

EuroCCP said it would activate the new clearing arrangements in EU-listed securities as soon as the new EU-based venues are ready

“While the uncertainty continues and despite the increasing likelihood that there may be a delay to Brexit, we are still focused on our preparations in case the UK leaves the EU on 29 March,” said EuroCCP Chief Executive Cécile Nagel.

Aquis is opening a new hub in Paris for trading euro-denominated shares, while the Turquoise unit is in Amsterdam.

(Reporting by Huw Jones; Editing by Louise Heavens/Mark Heinrich)

Global Stocks Hit 5 Month High, Ignore Reports Of Trump-Xi Meeting Delay, 737 MAX Subpoena

Global stocks rose to the highest level in five months and the dollar dipped on Monday as traders ignored a SCMP report that the April meeting between presidents Xi and Trump had been delayed to June, and glossed over the latest slide in Boeing stock following a WSJ report of a grand jury subpoena into the 737 MAX’s development, as they once again priced in the dovish stance from the Fed at its policy meeting this week, a process which has been going on since December.

MSCI’s World index was up 0.3% on the day, sitting at a five-month high, hitting its highest since October 10.

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European markets were broadly in the green, led by miners and banks, helped by a jump in shares in German lenders Deutsche Bank and Commerzbank after they confirmed over the weekend they were in talks to merge, a process which is far from certain will end with a merger despite the German government’s backing. The STOXX Europe 600 index rose 0.3%, hitting a five-month high, before trimming gains in half.

Britain’s FTSE 100 outperformed its European peers with a 0.3 percent gain, the main beneficiary from the surge in base metal prices with heavyweight miners all sitting comfortably at the top of the index (Rio Tinto +2.2%, Anglo American +2.1%, Antofagasta +1.8%, Glencore +1.7%); gains were boosted by prospects of parliament voting for a third time on Prime Minister Theresa May’s Brexit plan after ruling out a near-term no-deal exit.

European material names initially outperformed but were later overtaken by financial names ahead of a plethora of central bank rate decision including FOMC and BOE. Financial names may also feel support from the Deutschebank (+3.9%)/Commerzbank (+6.6%) saga, with the latest reports confirming merger talks between the two banks after the German government approved the tie-up, although, German union Verdi warned that merger could put up to 30k jobs at risk, to which the government replied that jobs at stake are being examined.

Earlier in the session, Asian stocks began the week mostly higher after last Friday’s tech-led upside on Wall St, but with early cautiousness amid reports the Trump-Xi summit was said to be pushed back to June. In related news, a source reportedly suggested that there was a divergence within the Trump administration regarding the deal with China.  ASX 200 (+0.3%) eked marginal gains as underperformance in telecoms and financials offset some of the commodity-driven strength in the Australian bourse, while the Nikkei 225 (+0.6%) was underpinned by a weaker currency following weaker than expected data in which Trade Surplus topped estimates but both Exports and Imports contracted more than expected. Elsewhere, Hang Seng (+1.4%) and Shanghai Comp. (+2.5%) were both positive after the PBoC increased its liquidity efforts and as mainland China shrugged off an early whimsical tone caused by uncertainty from the delay of the Trump-Xi summit. 

U.S. equity indexes were flat, with the Dow in the red, dragged lower by the latest drop in Boeing stock which tumbled following a WSJ report that the US Transportation Department are reportedly probing FAA approval of the 737 Max.

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Still,the generally positive mood remains ahead of a week filled with potentially significant catalysts from central bank meetings, geopolitical developments and economic data.

With a signs of global economic growth slowing, and with “bad news once again good news”, traders were focused on the Federal Reserve, which meets on Wednesday for further cues about the path of U.S. interest rates. In particular focus will be the whether policymakers will have sufficiently lowered their interest rate forecasts to more closely align their “dot plot.”

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“The market is probably expecting some down-shift in the ‘dot plots’ (which currently see two hikes in 2019 and one in 2020), plus some more discussion on the end of quantitative tightening – i.e. stopping its balance sheet reduction. This should maintain a positive environment for risk,” ING analysts said.

Also expected is more detail on a plan to stop cutting the Fed’s holdings of nearly $3.8 trillion in bonds. The two-day meeting ends with a news conference on Wednesday.

Treasuries were little changed and most European bonds climbed: yields on three and five-year Treasuries are dead in line with the effective Fed funds rate, while futures imply a better-than-even chance of a rate cut by year end. In European bonds, no news proved the most important news in euro zone bonds on Monday after ratings agency Moody’s decided not to downgrade Italy’s credit rating, prompting investors to buy Italian government bonds.

Italy’s 10-year government bond yield fell as much as four basis points on the day to 2.46 percent, its lowest since May 2018. Its spread over higher-rated Germany briefly narrowed to its tightest since September 2018.

Elsewhere, in the latest Brexit developments, UK PM May received backing by some staunch Brexiteers after she personally lobbied MPs but still remained significantly short of the number she needs to win a vote this week. Furthermore, it was separately reported that 40 Tory rebels told PM May they would only support her deal if she quits as PM.  Various UK ministers suggested PM May could cancel this week’s 3rd Brexit vote if there is not enough support. In related news, former UK Foreign Minister Johnson called for a delay in the 3rd Brexit vote and said it is not too late to get a real change regarding backstop. The  DUP reportedly want a seat in trade negotiations with the EU in exchange for supporting PM May and there were also reports citing senior DUP figures that they held constructive Brexit talks with ministers, while sources close to the DUP also said that the regulatory alignment offer may have won over the DUP.

In currencies, the dollar slipped versus most of its G10 peers and the euro strenghtened ahead of a Federal Reserve policy announcement Wednesday where the central bank is seen striking a dovish tone. The pound fell as Prime Minister Theresa May continued to face opposition to her Brexit plans, pushing up U.K.

May has only three days to win approval for her deal to leave the European Union if she wants to go to a summit with the bloc’s leaders on Thursday with something to offer them in return for more time. “Should May hold another vote tomorrow that would constitute a signal that she considers it possible that her deal will be accepted,” said Ulrich Leuchtmann, a currency strategist at Commerzbank. “It should no doubt have a moderately positive effect on the British currency,” he added.

The Australian and New Zealand currencies both rallied, as stocks traded in the green and Treasuries edged up.

Expected data include NAHB Housing Market Index. HealthEquity, StoneCo, Syneos Health, and Tilray are among companies reporting earnings.

Market Snapshot

  • S&P 500 futures little changed at 2,831.25
  • STOXX Europe 600 up 0.2% to 381.98
  • MXAP up 0.9% to 160.30
  • MXAPJ up 1% to 529.77
  • Nikkei up 0.6% to 21,584.50
  • Topix up 0.7% to 1,613.68
  • Hang Seng Index up 1.4% to 29,409.01
  • Shanghai Composite up 2.5% to 3,096.42
  • Sensex up 0.07% to 38,050.16
  • Australia S&P/ASX 200 up 0.3% to 6,190.53
  • Kospi up 0.2% to 2,179.49
  • German 10Y yield unchanged at 0.083%
  • Euro up 0.2% to $1.1343
  • Italian 10Y yield fell 0.5 bps to 2.142%
  • Spanish 10Y yield fell 0.5 bps to 1.184%
  • Brent futures down 0.4% to $66.90/bbl
  • Gold spot up 0.2% to $1,304.47
  • U.S. Dollar Index down 0.1% to 96.47

Top Overnight News

  • Theresa May is threatening to give up trying to get Brexit done any time soon unless euroskeptics in her Conservative party back down and promise to vote for her deal this week. The British prime minister is still working to win support for her divorce agreement but she won’t bother putting it to another vote in Parliament as planned on Tuesday unless there is a strong chance it will be approved, ministers said
  • The Federal Reserve will bring the current cycle of interest-rate increases to an end after one more hike later this year, according to a Bloomberg survey of economists
  • OPEC and its allies have much work ahead to balance global oil markets and are prepared to do what’s necessary in the second half, Saudi Energy Minister Khalid Al- Falih said
  • Asked about the possibility of Japanese Prime Minister Shinzo Abe running for a fourth term as leader of the ruling Liberal Democratic Party, 59.3% of respondents said they oppose it and 31.1% were in support in an FNN poll conducted over the weekend.
  • Asking prices for London homes fell this month as buyers hesitated on closing deals amid political turmoil over Brexit. Average values declined in March, slumping 1.1 percent from February to 607,557 pounds ($806,000), property-website Rightmove said in a report Monday
  • The proportion of Japan bond transactions made by overseas funds climbed to 14.57 trillion yen ($131 billion) in January, or 11.9 percent of the total, a record in data from the Japan Securities Dealers Association starting in 2004
  • Deutsche Bank and Commerzbank have confirmed they are in merger talks, bowing to officials’ desire to forge a durable German lender with global reach out of two troubled firms
  • Credit stress in China is deepening with another local conglomerate, backed by a state-owned giant, struggling under the weight of its debts
  • Italy’s Finance Minister Giovanni Tria is working on a new plan of incentives that would allow the country to avoid a budget adjustment, according to newspaper Corriere della Sera

Asian stocks began the week mostly higher after last Friday’s tech-led upside on Wall St, but with early cautiousness observed ahead of the week’s plethora of central bank activity and amid uncertainty with the Trump-Xi summit said to be pushed back to June. ASX 200 (+0.3%) eked marginal gains as underperformance in telecoms and financials offset some of the commodity-driven strength in the Australian bourse, while the Nikkei 225 (+0.6%) was underpinned by a weaker currency following mixed data in which Trade Surplus topped estimates but both Exports and Imports contracted more than expected. Elsewhere, Hang Seng (+1.4%) and Shanghai Comp. (+2.5%) were both positive after the PBoC increased its liquidity efforts and as mainland China shrugged off an early whimsical tone caused by uncertainty from the delay of the Trump-Xi summit. Finally, 10yr JGBs were relatively unchanged with demand dampened by the gains in riskier assets and with downside also restricted by the BoJ’s presence in the market. A summit between US President Donald Trump and Chinese counterpart Xi Jinping could be delayed to June according to sources who noted they will not be able to finalise an agreement by April. In related news, a source reportedly suggested thatthere was a divergence within the Trump administration regarding the deal with China. Chinese President Xi is set to visit Europe this week in efforts to bolster trade relationships. The Chinese President will travel to France, Italy and Monaco from March 21st to 26th; according to Chinese Foreign Ministry Spokesman Lu Kang.

Top Asian News

  • Hong Kong Train Collision Marks Latest Mishap for City Metro
  • Some at BOJ Are Said to See Price Goal Out of Reach Through 2021
  • Takeda Is Said to Plan Sale of Tachosil in Shire Divestments
  • Sensex, Nifty Pare Gains After Five-Day Rally to Six- Month Highs
  • India Seeks Higher Weighting in MSCI Equity Indexes, Report Says

Mixed start to the week for major European indices [Stoxx 600 +0.1%] following a relatively optimistic lead from Asia where China outperformed amid liquidity efforts by the PBoC coupled with the Chinese government’s steps to enhance the country’s economy. UK’s FTSE 100 (+0.6%) is the marked outperformer and major beneficiary from the surge in base metal prices with heavyweight miners all sitting comfortably at the top of the index (Rio Tinto +2.5%, Anglo American +2.3%, Antofagasta +2.1%, Glencore +1.8%). Sector-wise, material names initially outperformed (for the aforementioned reason) but was later overtaken by financial names ahead of a plethora of central bank rate decision including FOMC and BOE. Financial names may also feel support from the Deutschebank (+3.1%)/Commerzbank (+5.8%) saga, with the latest reports confirming merger talks between the two banks after the German government approved the tie-up, although, German union Verdi warned that merger could put up to 30k jobs at risk, to which the government replied that jobs at stake are being examined. On a broader front for European banks, GS notes that the sector has been amongst the weakest performers in the Stoxx 600 YTD as the banks continue to battle with concerns over long term growth. In terms of strategy, GS noted that Japanese banks trades at an even lower multiple than the European, but the latest TLTRO move (although positive for sector liquidity) “further erodes the competitive advantage of European banks”. GS is taking a neutral stance on the European equity market over the next three months.

Top European News

  • Italy’s Nexi Files for IPO in Milan, to Begin Offer in April
  • Domino’s Pizza Group Says Talks With Franchisees Continuing
  • After Danske, Next Dirty Money Risk Is Examined in Denmark
  • Leoni Falls After Cutting 2,000 Jobs, Guidance on Autos Slowdown

In FX, both AUD/NZD are off overnight highs, but the Aussie and Kiwi remain elevated and ahead of their G10 counterparts on a combination of renewed risk appetite, short covering and for the former also a supply-related rise in iron ore prices following further production problems for Brazil’s Vale. Aud/Usd has extended its rebound to 0.7100+ and Nzd/Usd to around 0.6875 as the Aud/Nzd cross pivots 1.0350 ahead of Westpac’s NZ Q1 consumer survey later today and Q4 GDP on Wednesday. In terms of options, large expiries in Nzd/Usd run off later, including 1 bn at 0.6825 and 1.5 bn at 0.6925.

  • GBP – In contrast to the outperformance down under noted above, the Pound has handed back gains vs a generally soft Dollar and weakened relative to the Euro amidst ongoing Brexit uncertainty after last week’s string of UK Parliamentary votes, as PM May  strives to drum up DUP support for the current Withdrawal Agreement in the hope that this may entice enough of the ERG to back the deal in time for a pre-EU Summit 3rd MV. Cable has backed off from another 1.3300 venture to sub-1.3250 and Eur/Gbp has bounced to around 0.8570 vs circa 0.8510 at one stage, with a hefty 1.7 bn option expiry at the 0.8500 strike now looking pretty safe.
  • EUR – Aside from benefiting from Sterling’s Brexit angst, the single currency has taken advantage of the aforementioned Greenback weakness post-recent soft if not quite downbeat US data and pre-FOMC. Indeed, the headline pair has rebounded further from  early March lows (in wake of the dovish ECB) to establish a firmer footing above 1.1300 and briefly touched 1.1350, with the next bullish targets at 1.1367 and 1.1373 (100 DMA and 50% Fib of the 1.1570-1.1177 move respectively).
  • CHF/CAD/JPY – All narrowly mixed vs the Greenback, as the Franc attempts to break resistance at the psychological parity level in the run up to the SNB and FOMC, but holds steady vs the Eur on the 1.1350 pivot, while the Loonie sits midway between 1.3300-50 ahead of Canadian securities data for January and the Jpy straddles 111.50 in wake of mixed Japanese trade figures and reports suggesting that some BoJ members are not even sure if the 2% inflation target is attainable by 2021. Note also, decent option expiry interest could be influential given 1.1 bn rolling off from 111.55-60 today.

In commodities, WTI (-0.4%) and Brent (-0.2%) futures are marginally lower as participants digest the latest from the meeting of the OPEC cartel in Baku, although there seems to be some discrepancy as to when the next JMMC meeting will take place. Energy futures saw a marginal leg lower, with WTI losing more ground below its 100 WMA (USD 58.46/bbl) after sources stated that the JMMC panel recommended no meeting in April, but the Kazakh Energy Minister said nothing was set in stone. Furthermore, the Iraqi Energy Minister reportedly confirmed that the next JMMC meeting will take place in June, however sources later came out with a May meeting in Riyadh. Prices were little affected by developments over the weekend wherein the Saudi Energy Minister stated that the Kingdom’s March and April output is to drop to around 9.8mln BPD vs. February level of 10.09mln BPD (January 10.24mln BPD). Recalling some comments from last week, a Saudi official stated that March an April output is to be “well below” 10mln BPD. Saudi did however mention that OPEC’s job from rebalancing is far from over whilst signalling that output curbs need to be extended to H2 2019. Elsewhere, the metals complex is bolstered by a pullback in the Greenback with gold reclaiming the USD 1300/oz level and breaching its 50 DMA to the upside at 1304.10 whilst copper prices benefit from the overall risk appetite. Finally, Dalian iron ore futures surged over 3% on supply concerns after a Brazilian court ordered Vale halts operations at another mine and as the miner suggested a 12mln ton decline in annual output due to dam suspensions.

US Event Calendar

  • 10am: NAHB Housing Market Index, est. 63, prior 62

DB’s Jim Reid concludes the overnight wrap

I hope you had a good weekend and if around Northern Europe that you survived the gales that played havoc with my golf ball on Saturday. Yesterday, I thought myself very clever for taking the family to a miniature steam railway as all three children are currently obsessed with trains. As fun as it was it was a little embarrassing as the event seemed to be predominantly aimed at steam engine enthusiasts rather than children. So a lot of older men with big bushy beards, flat caps and notebooks! I’d imagine their first note was that those three children make a lot of noise!

Talking of noise, it’s possible that Brexit muffles will amplify to a crescendo this week as Mrs May will more than likely try to bring her twice defeated Withdrawal Agreement back to the House of Commons tomorrow. We’ll find out today and much will depend on whether the DUP agree to back it after talks continue today. The UK’s Chancellor of the Exchequer Philip Hammond said in a weekend interview with BBC TV that PM May will only put her WA to another vote if there is a strong chance that it will be approved while adding that otherwise PM May will head to the EU summit on Thursday possibly seeking a long delay to Brexit. The magnitude of her task is best explained by the fact that the first and second attempt were the largest and fourth largest defeats in the whole history of the House of Commons with the second and third being the same bill on the same day in 1924. The likelihood is that the vote will be pretty tight if the DUP agree to vote for it as they will bring tens of Tory MP’s along with them. However, there are a hardline group of Brexiteers (possibly 15-25 depending on reports) who dislike the deal so much that very little would change their mind even though a softer (or no) Brexit is the likely outcome if the WA doesn’t pass very soon. So best case scenario is that Mrs May probably needs to secure over 10 opposition Labour MPs to get over the line. She only had three last time. If she doesn’t get it over the line it will be over to the EU at their council summit on Thursday and Friday to decide what length of extension they offer the UK to Article 50 and what the conditions will be. The direction of travel seems to be towards a lengthy one of at least a year if the WA doesn’t pass or a quick alternative plan is not reached. In the offer of such a lengthy delay, the EU would hope to either focus the minds of the Brexiteers voting against the current deal or leave time for the UK to change its mind or commit to a softer Brexit. Remember the government has committed to indicative votes (probably early April) but we may still see a fourth attempt to pass the WA before that.

Outside of Brexit, we have both a BoE (Thursday) and Fed meeting (Wednesday) this week as well as the aforementioned EU council meeting on Thursday/Friday. As for data, the undoubted highlights are the flash global PMIs on Friday.

Briefly previewing the Fed, no change in policy is expected and the meeting should reinforce the message that the Fed will remain patient for now. That being said, our economists believe that there are two key topics that market participants should focus on. The first is any signals about the timeline for ending the Fed’s balance sheet unwind and the second is any insights into the conditions needed to drop their patient guidance and possibly raise rates again later in 2019. On the former, while an announcement of the date for stabilising the SOMA portfolio is possible next week, we now think it is more likely at the May FOMC meeting. On the latter, Powell should maintain significant flexibility while likely reiterating that a dissipation of the crosscurrents, evidence of continued above-potential growth, and higher inflation are all likely preconditions for another rate increase this cycle.

As for the flash March PMIs around the globe, a reminder that last month in Europe we saw the manufacturing print slide below 50 for the first time in nearly 6 years to 49.3 for the Euro Area. That also confirmed declines in 13 out of the last 14 months after peaking at 60.6 in December 2017. The consensus expects another below 50 print at 49.5, albeit one which would at least signal that we’ve potentially hit the lows. In contrast, the services sector picked up last month with the Euro Area reading up from 51.2 to 52.8. The consensus expects a small pullback to 52.5. So expect there to be a continued focus on the services versus manufacturing divergence. In the US, the consensus expects the manufacturing PMI to jump 1pt to 54.0 and the services PMI to jump 0.5pts to 56.5.

Asian markets have started the week on a firm footing with China’s bourses leading the advance. The Shanghai Comp (+1.36%), CSI (+1.71%) and Shenzhen Comp (+1.47%) are all up along with the Nikkei (+0.59%), Hang Seng (+0.81%) and Kospi (-0.02%). Elsewhere, futures on the S&P 500 (+0.04%) are trading flattish. Overnight, we saw Japan’s February trade stats indicating that exports (at -1.2% yoy vs. -0.6% yoy expected) have now fallen for three months in a row while imports also declined larger than expectations (at -6.7% yoy vs. -6.4% yoy expected) bringing the trade balance to JPY 339.0bn (vs. JPY 305.1bn expected).

In other news, Saudi Arabia’s Energy Minister Khalid Al-Falih said, ahead of the planned OPEC+ meeting beginning today, that OPEC and its allies have much work ahead to balance global oil markets and are prepared to do what’s necessary in the second half. He said that OPEC+ needs to “stay the course” until June as its job is “nowhere near complete” in terms of restoring oil-market fundamentals. However, Russian Energy Minister Alexander Novak said at the same briefing that uncertainties arising from production in Venezuela and Iran make it difficult for the coalition to determine its next step before May or June. This indicates that we might not get any output cut extensions at today’s meeting. Oil prices (Brent -0.24% and WTI -0.41%) are trading weaker this morning.

Let’s recap last week’s market activity. US equities had their best weekly performance of the year last week, with the S&P 500 advancing +2.89% (+0.50% Friday) and the NASDAQ gaining +3.78% (+0.76% Friday). The DOW – up +1.57% on the week (+0.54% Friday) – lagged as Boeing underperformed sharply after its 737 Max plane was broadly grounded. European equities also had a strong week, with the Stoxx 600 advancing +2.84% (+0.68% Friday). Banks outperformed, with the Stoxx bank index gaining +5.16% (+1.12% Friday).

In fixed income, 10yr treasury yields fell -4.0bps (-4.1bps Friday), after the first economic data for March printed soft, as the Empire manufacturing survey unexpectedly fell to a 22-month low. 10yr US yields have only been lower on one day (Jan 3rd this year) over the last 14 months. In Europe, bund yields rose +1.5bps (-0.2bps Friday) but are still as low as 0.084%. The tightening spread between the two though helped the euro advance +0.83% (+0.21% Friday) versus the dollar, its biggest weekly rally since September. Meanwhile, the dollar index dropped -0.76% (-0.22% Friday) for its worst performance of the year. Credit markets rallied further, with HY spreads tightening -11bps and -19bps in the US and Europe, respectively (+1bps and -1bps on Friday, respectively).

Looking ahead, it is a quiet start to the week with the only data due being January industrial production in Japan, the January trade balance for the Euro Area and the March NAHB housing market index reading in the US.

The Best Analysis Of What Really Happened To The Boeing 737 Max From A Pilot & Software Engineer

The following tweets from Trevor Sumner, CEO of Perch Experience, of what really happened to the Boeing 737 Max, may be one of the best summaries of the events that led to the two recent airplane crashes, and also why Boeing’s “software upgrade” response is a farce.

 

And for those who are not particular fans of tweetstorms, here it is recapped:

BEST analysis of what really is happening on the #Boeing737Max issue from my brother in law @davekammeyer, who’s a pilot, software engineer & deep thinker. Bottom line don’t blame software that’s the band aid for many other engineering and economic forces in effect.

Some people are calling the 737MAX tragedies a #software failure. Here’s my response: It’s not a software problem. It was an

  • Economic problem that the 737 engines used too much fuel, so they decided to install more efficient engines with bigger fans and make the 737MAX.
  • Airframe problem. They wanted to use the 737 airframe for economic reasons, but needed more ground clearance with bigger engines.The 737 design can’t be practically modified to have taller main landing gear. The solution was to mount them higher & more forward.
  • Aerodynamic problem. The airframe with the engines mounted differently did not have adequately stable handling at high AoA to be certifiable. Boeing decided to create the MCAS system to electronically correct for the aircraft’s handling deficiencies.

During the course of developing the MCAS, there was a:

  • Systems engineering problem. Boeing wanted the simplest possible fix that fit their existing systems architecture, so that it required minimal engineering rework, and minimal new training for pilots and maintenance crews.

The easiest way to do this was to add some features to the existing Elevator Feel Shift system. Like the #EFS system, the #MCAS relies on non-redundant sensors to decide how much trim to add. Unlike the EFS system, MCAS can make huge nose down trim changes.

On both ill-fated flights, there was a:

  • Sensor problem. The AoA vane on the 737MAX appears to not be very reliable and gave wildly wrong readings. On #LionAir, this was compounded by a
  • Maintenance practices problem. The previous crew had experienced the same problem and didn’t record the problem in the maintenance logbook. This was compounded by a…
  • Pilot training problem. On LionAir, pilots were never even told about the MCAS, and by the time of the Ethiopian flight, there was an emergency AD issued, but no one had done sim training on this failure. This was compounded by an..
  • Economic problem. Boeing sells an option package that includes an extra AoA vane, and an AoA disagree light, which lets pilots know that this problem was happening. Both 737MAXes that crashed were delivered without this option. No 737MAX with this option has ever crashed.

All of this was compounded by a:

  • Pilot expertise problem. If the pilots had correctly and quickly identified the problem and run the stab trim runaway checklist, they would not have crashed.

Nowhere in here is there a software problem. The computers & software performed their jobs according to spec without error. The specification was just shitty. Now the quickest way for Boeing to solve this mess is to call up the software guys to come up with another band-aid.

I’m a software engineer, and we’re sometimes called on to fix the deficiencies of mechanical or aero or electrical engineering, because the metal has already been cut or the molds have already been made or the chip has already been fabed, and so that problem can’t be solved.

But the software can always be pushed to the update server or reflashed. When the software band-aid comes off in a 500mph wind, it’s tempting to just blame the band-aid.

NZ Threatens 10 Years In Prison For ‘Possessing’ Mosque Shooting Video; Web Hosts Warned, ‘Dissenter’ Banned

New Zealand authorities have reminded citizens that they face up to 10 years in prison for “knowingly” possessing a copy of the New Zealand mosque shooting video – and up to 14 years in prison for sharing it. Corporations (such as web hosts) face an additional $200,000 ($137,000 US) fine under the same law. 

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Terrorist Brenton Tarrant used Facebook Live to broadcast the first 17 minutes of his attack on the Al Noor Mosque in Christchurch, New Zealand at approximately 1:40 p.m. on Friday – the first of two mosque attacks which left 50 dead and 50 injured. 

Copies of Tarrant’s livestream, along with his lengthy manifesto, began to rapidly circulate on various file hosting sites following the attack, which as we noted Friday – were quickly scrubbed from mainstream platforms such as Facebook, YouTube, Twitter and Scribd. YouTube has gone so far as to intentionally disable search filters so that people cannot find Christchurch shooting materials – including footage of suspected multiple shooters as well as the arrest of Tarrant and other suspects. 

On Saturday, journalist Nick Monroe reported that New Zealand police have warned citizens that they face imprisonment for distributing the video, while popular New Zealand Facebook group Wellington Live notes that “NZ police would like to remind the public that it is an offence to share an objectional publication which includes the horrific video from yesterday’s attack. If you see this video, report it immediately. Do not download it. Do not share it. If you are found to have a copy of the video or to have shared it, you face fines & potential imprisonment.“

Dissenter blocked in New Zealand

Along with the censorship of online materials and investigation of content sharing platforms such as BitChute and 8chan – where the shooter posted a link to the livestream of his attack, social discussion service Dissenter has been blocked in New Zealand. Created by the people behind Twitter competitor Gab.ai – Dissenter is a browser extension which pops up a third-party comments section for any website where people can discuss content outside of the control of the website owner. 

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On Saturday, Gab’s official accounts (@gab and @getongab) reported that “New Zealand ISPs have banned dissenter.com until it is “censorship compliant.””

Update: Shortly after this article published, we were informed that ZeroHedge is unable to be reached by Votafone customers.

Milo banned

Meanwhile, far-right commentator Milo Yiannopoulos was banned from Australia in the wake of the New Zealand shootings after he said on Facebook that attacks like Christchurch happen because “the establishment panders to and mollycoddles extremist leftism and barbaric, alien religious cultures.”

Australia’s immigration minister, David Coleman, said in a Saturday statement that Yiannopoulos’s comments were “appalling and forment hatred and division,” adding “Milo Yiannopoulos will not be allowed to enter Australia for his proposed tour this year.” 

UK man arrested

While the Christchurch attacks were utterly reprehensible, supporting them is now punishable in the United Kingdom. On Saturday afternoon, a 24-year-old man from Oldham was arrested on suspicion of sending malicious communications in support of the mosque attacks. It is unclear what he is alleged to have written. 

The Greater Manchester Police said in a statement that they “became aware of a post on social media making reference and support for the terrible events in New Zealand,” adding “Police have made urgent enquiries and a man aged 24 from the Oldham area is now under arrest on suspicion of sending malicious communications.”

“It is clear that people are worried and we really understand that… It is truly terrible what happened yesterday. It is hard to put into any form of words,” said Assistant Chief Constable Russ Jackson, who added “We have nothing to suggest any threat locally, but none of this can diminish how people feel and that is why we want to be there to offer more support at this difficult time.”

Exclusive: Eldorado Resorts, Caesars explore merger – sources

March 17, 2019

By Greg Roumeliotis

(Reuters) – U.S. casino operators Eldorado Resorts Inc and Caesars Entertainment Corp are in the early stages of exploring a merger, people familiar with the matter said on Sunday.

The deal talks come after Caesars agreed this month to give billionaire investor Carl Icahn, who has been pushing the company to sell itself, three board seats to his representatives and a say on the selection of its next chief executive officer.

Caesars is providing some limited confidential financial information to Eldorado, which is carrying out due diligence on the potential combination of the two companies, the sources said.

Eldorado has yet to make a binding offer for Caesars, and there is no certainty any bid will materialize or that a deal will be successfully negotiated, the sources added, asking not to be identified because the matter is confidential.

Caesars and Eldorado have market capitalizations of $5.4 billion and $3.6 billion, respectively. They also had debt piles of $9.1 billion and $3.3 billion, respectively, as of the end of December.

Caesars declined to comment, while Eldorado did not immediately respond to a request for comment.

The combination of Caesars and Eldorado would create a more formidable competitor to larger casino industry players, such as Las Vegas Sands Corp, Wynn Resorts Ltd and MGM Resorts International.

“The universe of buyers (for Caesars) is limited, and Eldorado is best suited to extract full value from Caesars’ assets in our view,” Roch Capital Partners analysts wrote in a March 6 research note.

Caesars, whose casinos include the Harrah’s and Horseshoe brands, emerged from bankruptcy protection in 2017, after failing to cope with some $25 billion in debt. It had 53 properties in 14 U.S. states and five countries outside the United States, including the UK, as of the end of December.

Eldorado owns and operates 26 properties in 12 U.S. states.

Last year, Caesars rejected a merger approach by Tilman Fertitta, the billionaire owner of Golden Nugget casinos. That deal would essentially have been structured as an acquisition by Caesars given its larger size. Fertitta has not submitted any new offer for Caesars this year, according to the sources.

Caesars has also said it is exploring strategic alternatives that could lead to some kind of transaction.

Icahn has been steadily raising his stake in Caesars in anticipation of a deal. Last week, he disclosed his stake had reached 17.8 percent, up from 9.8 percent when he clinched his deal over board seats with the company on March 1.

(Reporting by Greg Roumeliotis in New York; Editing by Peter Cooney)

Today We’re All Irish: Debt Serfdom Comes to America

First published by GR on March 15, 2008

March 17 is St. Patrick’s Day, when people of all national origins raise a glass and declare, “Today we’re all a bit Irish!” This may be truer than we know. The Irish …

The post Today We’re All Irish: Debt Serfdom Comes to America appeared first on Global Research.

UK’s Hammond says not there yet on Brexit vote support

March 17, 2019

LONDON (Reuters) – The British government does not yet have the support of enough lawmakers to win a parliamentary vote on its Brexit deal but a “significant number” of colleagues are coming around to back the plan, finance minister Philip Hammond said on Sunday.

Prime Minister Theresa May is expected to bring her deal back to parliament for a third vote this week, but Hammond said it would only go ahead if the government thought it could win.

“What has happened since last Tuesday is that a significant number of colleagues, including some very prominent ones who have gone public, have changed their view on this and decided that the alternatives are so unpalatable to them that they on reflection think the prime minister’s deal is the best way to deliver Brexit,” he told BBC’s Andrew Marr program.

Asked if the government had enough numbers yet, he replied: “Not yet, it is a work in progress.”

British lawmakers rejected May’s deal by 149 votes on March 12.

(Reporting by Kate Holton and Elizabeth Piper)

Fed looks to avoid crossed signals at policy meeting

March 17, 2019

By Trevor Hunnicutt and Ann Saphir

NEW YORK/SAN FRANCISCO (Reuters) – Only two things will really matter when Federal Reserve Chairman Jerome Powell strides to the podium for his press conference on Wednesday after the end of the U.S. central bank’s latest two-day policy meeting: Dots and bonds.

That Powell and his colleagues will leave the Fed’s benchmark overnight interest rate unchanged in a range of 2.25 percent to 2.50 percent and stick to their pledge of a “patient” approach to monetary policy is effectively a given.

The big reveal, though, will be whether policymakers will have sufficiently lowered their interest rate forecasts to more closely align their notorious “dot plot,” a diagram showing individual policymakers’ rate views for the next three years in little blue-shaded circles, with that pledge of patience.

And, just as importantly, what new details will they share on a plan to stop culling the Fed’s holdings of nearly $3.8 trillion in bonds?

“It’s going to be new information for the market to trade whether it’s the Fed’s intention or not,” said Ben Jeffery, a strategist at BMO Capital Markets.

Dissatisfaction with Powell’s remarks in December regarding the balance sheet threw markets for a spin and helped lead to the Fed’s pause on rates a month later. Since then, the Fed chief has explicitly said one of his aims is to avoid “needless market disruptions.”

Traders currently expect there will be no rate hikes this year, and are even building in bets for a rate cut in 2020. Any gap between that view and the Fed’s could send markets lower. So too could a sharp drop in policymakers’ rate-hike expectations, especially if coupled with a softer economic outlook.

(Graphic: Federal Open Market Committee target rate projections – https://tmsnrt.rs/2UCRTe1)

Wrong or confusing signals on either the rate forecasts or the Fed’s bond portfolio could upend the market calm the central bank in large part has engineered despite nosediving economic forecasts.

Making Powell’s task even harder: A jumble of economic data, including a sharp slowdown in jobs growth last month that was accompanied by rising wages.

Uncertainty on the outlook for the world economy and global trade as well as a sharp U.S. growth slowdown expected by a range of forecasters mean that markets are on a hair trigger for signals from the Fed.

FED’S GUIDANCE

In January, the Fed pivoted from hiking rates quarterly to pledging patience before making more moves. Powell has also said the central bank could stop shedding bonds this year.

The central bank’s last official policy statement offered no hint about whether rates will rise or fall. The statement from the March 19-20 meeting is likely to do the same.

Asked if they would support rate hikes this year, Fed policymakers have been offering less information.

“Patience is basically saying we’re not going to give a lot of guidance to what we’re expecting down the road because there’s enough uncertainty that we just have to see how things evolve,” Boston Fed President Eric Rosengren told a National Association of Corporate Directors chapter on March 5.

But guidance is exactly what the Fed offers in its Summary of Economic Projections slated for release alongside the policy statement on Wednesday. That document could show the central bank expecting a rate hike if the economy delivers the strong 2019 growth most policymakers still forecast.

Some Fed officials voiced concern at the Jan. 29-30 policy meeting that the projections could send a misleading statement about what the central bank is doing, according to the records from that meeting. Powell warned on March 8 against reading too much into the forecasts.

So far, the Fed’s on-guard and guarded communication has given markets new confidence. A gauge of swings expected in U.S. government bond prices over three months hit its lowest levels in 17 years. Stock markets have reacted as well, with the S&P 500 index up more than 12 percent this year.

With little sign of an inflation pickup, there would seem to be no urgency to raise U.S. borrowing costs, and investors have all but written off the possibility of a hike this year, especially with signs that slowing European and Chinese growth might weigh on the United States.

BALANCE SHEET

Meanwhile, the Fed faces pressure to elaborate on piecemeal statements that it will stop cutting bond holdings this year.

The Fed bulked up its books with bank reserves in order to buy trillions of bonds and further stimulate the economy once rates neared zero in the aftermath of the 2008 global financial crisis. To restore policy to normal, the Fed began shrinking its balance sheet in late 2017 by not replacing as many bonds when they mature.

Now, with the central bank ending that process, Fed policymakers face a number of questions. Some, for instance, have said they would not want the balance sheet policies, which might tighten financial conditions, to work at cross-purposes with the more cautious rate policy.

(Graphic: Federal Reserve bond holdings – https://tmsnrt.rs/2UD2oOr)

New York Fed President John Williams told Reuters earlier this month that “there is no clear answer” to exactly how large the balance sheet needs to be. Investors will be looking for answers as soon as this week. Powell is likely to be pressed on the subject at his press conference on Wednesday.

Cliff Corso, executive chairman at investment manager Insight North America LLC, said markets are looking for “confirmation and comfort” about their assumptions about the size and composition of the Fed’s assets. “Any deviations around that might create a little bit of volatility,” he said.

(Reporting by Trevor Hunnicutt in New York and Ann Saphir in San Francisco; Editing by Paul Simao)

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