Just as the US trade delegation was set to leave for the first round of in-person talks with their Chinese counterparts since the latest Trump-Xi truce, President Trump sent out a furious series of tweets accusing Beijing of failing to live up to its promise to buy more American agricultural products - apparently "there are no signs that they are doing so" - while bashing the Chinese economy and suggesting that it might be better for the US in the long run to wait until after the 2020 election to make a deal, because "when I win, the deal that they get will be much tougher than what we are negotiating now...or no deal at all. We have all the cards, our past leaders never got it!"
Though, if Beijing gets lucky, they might get "one of the Democratic stiffs like Sleepy Joe. Then they could make a GREAT deal, like in the past 30 years..."
China is doing very badly, worst year in 27 - was supposed to start buying our agricultural product now - no signs that they are doing so. That is the problem with China, they just don’t come through. Our Economy has become MUCH larger than the Chinese Economy is last 3 years....
— Donald J. Trump (@realDonaldTrump) July 30, 2019
..My team is negotiating with them now, but they always change the deal in the end to their benefit. They should probably wait out our Election to see if we get one of the Democrat stiffs like Sleepy Joe. Then they could make a GREAT deal, like in past 30 years, and continue
— Donald J. Trump (@realDonaldTrump) July 30, 2019
...to ripoff the USA, even bigger and better than ever before. The problem with them waiting, however, is that if & when I win, the deal that they get will be much tougher than what we are negotiating now...or no deal at all. We have all the cards, our past leaders never got it!
— Donald J. Trump (@realDonaldTrump) July 30, 2019
Surprisingly, the market ignored Trump's comments, despite the President's suggestion that the talks with Beijing are essentially already doomed. This, of course, says a lot about what's really driving the market.
Amazing how the China deal bullshit supposedly added hundreds of points to the S&P and now that it's collapsing there's minimal reaction. Clearly, this entire move is REALLY about money-printing. https://t.co/wYUkhaXuVp
— Mark B. Spiegel (@markbspiegel) July 30, 2019
With the FOMC's two-day policy meeting set to begin on Tuesday, Trump just gave us the clearest indication yet that this market is all about the Fed.
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In 'Major Compliance Blunder', Laid Of Deutsche Bankers Retained Access To Corporate Email For Weeks
Blain's Morning Porridge, submitted by Bill Blain of Shard Capital
“I've seen things you people wouldn't believe. Attack ships on fire off the shoulder of Orion. I watched C-beams glitter in the dark near the Tannhäuser Gate. All those moments will be lost in time, like tears in rain. Time to die.”
The UK is a curious place. Boris Johnson’s feel-good drive and the numerous plots being arrayed against him, received rather less attention over the weekend than the Minister for the 18th Century’s rather ponderous style guide. Jacob Rees-Mogg, Esquire, has banned a host of words, outlawed clichés, demands double spaces after full-stops, insisted on imperial measure (Kilometers, Kilos and grams are banned), and has made the incorrect use of apostrophes a capital offence. Readers will know my grasp of punctuation, spelling and grammar is nebulous at best – so if I disappear suddenly you can assume the Extreme Grammar-Nazi wing of the Conservative Party has got me!
Back in the real world, this week is largely about tomorrow. Worry not about what’s going on in Hong Kong, the Gulf, or even how bad European economic data might be. The only real question is what will the US Federal Reserve do? It’s not a question of will they ease rates, but by how much- 20% change they may go for 50 bp!
Perhaps the question should be – why ease rates at all?
It may be the depths of a thin summer, but a 25 bp cut will be enough to please the market. The economy won’t change because of a quarter point reduction in ridiculously low rates, but stocks will rally and the market will be properly ecstatic! Donald Trump will tweet to his followers about what a great job he’s doing and how its confirmed by the strength of the stock market. That is a sh*t reason for cutting rates. It worries me the Fed is prepared to pander to Trump and the stock market.
The Fed will say it’s because of uncertainty and trade weakness. Horse fertiliser! After 10-years of lethargic economic growth, the only place you find real inflation in the US is in financial asset prices. Stock market prices are bloated by cheap money – which fuelled stock buybacks and hasn’t contributed to productivity gains, new factories, or infrastructure. Plenty of jobs have been created, but many of them are low value. A rate cut isn’t going to boost the economy – but it may well juice stock prices. Despite what Trump Tweets, they are not the same thing!
Meanwhile, the fact this week’s resumption of US/China trade discussions is unlikely to go anywhere significant will barely concern the market. But, if you want to juice the Global economy, then global trade and not rate cuts would be the way to do it. And once the market get’s the 25bp ease out the way it can go back to worrying about this week’s earnings (Apple and GE will be the ones to watch), and the payroll data on Friday.
Meanwhile, let us return to Camelot (currently in Administration)….
The political forecast here in Dear Old Blighty now says: “A strong probability of Bluff and Bluster across the country, outbreaks of Speaking Loudly and very Slowly to Foreigners to the East, while a sustained low of Furious Indignation will remain in the North”.
Let’s speculate about Boris Johnson, Esquire. The feel-good he’s generated in just a few days has been extraordinary. His speeches have caught the mood. He smashed it at the dispatch box. Across the country, folk are sagely pontificating about an imminent European surrender now he’s so clearly delivering the message to Brussels – give us the deal we want or else. His new chief advisor, the frightening Dominic Cummings, Esquire, simply bites the heads off anyone who dares to question the Brexit Brexit Brexit strategy. Nothing else matter except to loudly and repeatedly proclaim it’s going to happen – no ifs, buts or maybes.
(This week’s Financial Porridge podcast includes an interview with serial entrepreneur and member of the leave campaign Martin Banbury, Esquire. We talked about Cummings. Unfortunately, Martin’s choicer comments about Cummings were too bleepy bleepy to use, but I did keep the one about how it might be a mistake to give Cummings a Kalashnikov and let him wander the corridors of power. This morning the Torygraph carries a leaked memo about Cummings threatening ministerial advisors with “one strike and you are out”!)
We are told an early general election is not on the cards – because it would distract from the Brexit Brexit Brexit First and Foremost strategy. Yet, the Tories are up 7% since Boris became Prime Minister, and they now hold a lead over Labour. Boris now comfortably outpolls Corbyn on nearly every aspect of leadership – and that’s confirmed in polls published in the left-leaning Guardian.
But can Boris’ bluff and bluster gamble work? The numbers still look dire. In a few weeks it’s likely he will have a parliamentary majority of one. There are swirling rumours of high-level defections to the Liberals. A gang of remoaner malcontents are apparently determined to stop a no-deal Brexit. Boris is sitting at the top of very wobbly greasy pole.
What could possibly be worse?
Being a Labour MP? That’s probably a much worse place to be. Corbyn was buried by Boris in Parliament and looks the tired old man he is. I’m not entirely sure I care where or what Labour policy is any more - Corbyn’s “settled” line of supporting a referendum on whatever the Tories comes up with is supporting a second referendum – which will likely prove divisive electoral suicide. Supporting a second neferendum will play wonderfully well in all these Labour seats that voted to leave. I’m not entirely sure Labour gets the fact the electoral question has changed: IN or Out is as important as choice of Party.
The new politics is great for the Liberals. They are the party of remain. And if you are committed Tory or Labour voter, but want to remain, then it’s not so hard for vote for them. Is it…?
The only thing we can say with any certainty is the UK is still uncertain!
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The question of which countries are paying more in EU contributions than they are getting out is a contentious issue for some and was also one major factor in the Brexit vote in the UK.
In the 2017 budget, there were ten EU members contributing more than they got out of the EU, at least in terms of direct monetary contributions. As Statista's Katharina Buchholz notes, UK came in second place in the ranking, with roughly 7.5 million euros of net contributions. Germany, topping the ranking, put in 12.8 billion euros more than it got out.
You will find more infographics at Statista
Poland was the biggest monetary benefactor from the EU, coming out with 8.2 billion euros earned, far ahead of Greece (3.7 billion euros) and Romania (3.4 billion euros).
But being on top of this list doesn’t have to send a country scrambling to leave the political union. In Germany, for example, support for the EU is high. While budget contributions might outweigh direct financial benefits for the country, a study by the Bertelsmann foundation suggests that the single EU market increased the average incomes of Germans by over 1,000 euros, above the EU average increase of 840 euros.
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There are 99 days left between now and Oct. 31 - the day the UK is set to leave the European Union. And newly elected Tory leader Boris Johnson (soon to be prime minister, barring some unforeseeable circumstance) will need every one of them to try and negotiate his way out of the mess that Theresa May is leaving behind.
Unlike May, Johnson is a leading voice in the "Brexiteer" faction of the Conservative Party. He has insisted that the UK will leave the EU on Oct. 31 with or without a deal. Of course, he would prefer to succeed where his predecessor failed and strong-arm the EU into a deal that excludes the troublesome Irish Backstop - the contingency in the prior agreement which would have allowed for the border between Ireland and Northern Ireland to remain open. But EU officials have insisted in recent days that they have no plans to change the withdrawal agreement negotiated with May; they are only open to making changes to the political declaration that accompanied it.
Moving forward, only one thing is clear right now: May's deal is dead. Johnson, who will officially take over as prime minister this afternoon, and who is currently scrambling to fill the top jobs in his government, is giving off the impression that he would have no problem with taking the UK over the no-deal cliff, and President Trump is dangling a US-UK trade deal in front of Johnson that would make such an outcome slightly more palatable, politically.
Among the personnel rumors circulating early on Wednesday were that Sajid Javid might be tapped to serve as Chancellor, while Dominic Raab might be tapped to serve as foreign secretary.
So, what are the options available to Johnson? These are four of the most likely scenarios, according to Bloomberg:
Renegotiate Withdrawal Deal
Johnson wants to scrap the deal Theresa May struck and restructure the whole negotiation that was agreed at the start of the process.
The most controversial element of May’s deal is the so-called Irish backstop, a fallback measure to ensure the border with Ireland remains open whatever future trading terms the two sides eventually agree on. He wants to postpone any talks about the border until after the U.K. has left the bloc, arguing they should be part of future trade negotiations. He also suggests using the 39-billion-pound ($49 billion) divorce settlement as leverage in the talks, making payment contingent on the terms negotiated.
Obstacles: The EU has repeatedly said it’s not prepared to renegotiate the Withdrawal Agreement, and it’s the only deal on the table. It’s also said a backstop must be part of any withdrawal accord, because it wants to lock in a guarantee that no hard border will emerge. The exit bill is also part of the divorce deal, and is due to be paid whatever trade terms are eventually negotiated. EU law dictates that Brexit should happen in two parts: First the exit negotiation, and once the U.K. has left, formal trade talks can begin.
Leave on Oct. 31
Johnson has said that after May twice delayed Brexit, the U.K. must now leave the bloc on Oct. 31, “do or die,” whether a new deal has been negotiated or not. He’s refused to rule out suspending Parliament - known as proroguing - to achieve that.
Obstacles: The timetable is tight to negotiate an entirely new deal. And the U.K. Parliament is opposed to a no-deal Brexit. That was made clear again last week when Conservative rebels joined the opposition to pass an amendment aimed at preventing Johnson suspending Parliament. The EU side has indicated it would prefer another extension to a no-deal split.
Standstill Period After Brexit
Johnson is seeking to negotiate a "standstill" period with the European Union after Oct. 31, during which there would be zero tariffs and zero quotas to "smooth things over for business" - much the same as the transition period negotiated by May. He said it would end “well before the next election,” which is due in 2022.
Obstacle: The EU has said any form of transition period is contingent on there being a withdrawal agreement, which must contain an Irish backstop.
Use WTO rules if EU won’t cooperate
Johnson has said that if the EU won’t offer a new deal, the U.K. will be able to use Article 24 of the World Trade Organization’s General Agreement on Tariffs and Trade to ensure the terms of commerce remain the same after Brexit.
Obstacles: The clause Johnson cites applies to countries negotiating a trade deal rather than a country leaving a trading bloc. It would also require the agreement of the EU, and a clear timetable for the negotiation of a trade agreement -- neither of which would be guaranteed in the event of an acrimonious no-deal Brexit. The WTO and EU have said this won’t work, and Johnson revealed a hazy understanding during the campaign as to why it would.
Oddly, Bloomberg's options don't include 'general election', which is widely seen as possible as the Conservatives' majority is set to shrink to just one vote (and that's with Northern Irish DUP's votes included). Many expect that Johnson will be stuck in a similar impasse to May's and that he will need to call a general election - much like May once did - to strengthen his mandate. A group of strategists at UBS believe a general election toward the end of the year has the highest probability of all these outcomes, and many suspect that the odds of a vote and, once it's declared, the polls, will have a similar impact on UK markets that the original pre-referendum Brexit polls had.
If an election is called, the strategists believe the Bank of England is more likely to cut rates to boost sentiment, stocks with international exposure would outperform domestically focused shares and the FTSE 100 would move modestly lower.
Before Johnson takes over, May will preside over her last PMQs. Watch live coverage here.
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Submitted by Michael Every of Rabobank
The markets stabilised very quickly after the UK insisted on using diplomatic tools to solve the crisis with Iran, which seized a British oil tanker in the Strait of Hormuz last week. The UK will seek to put together a European-led naval mission to ensure safe shipping through the Strait of Hormuz. Britain is be hoping that various countries will show far more solidarity than the US whose Secretary of State Pompeo said that the UK must take responsibility for their own ships.
With the UK unlikely to pursue military confrontation with Iran, European equities eked out marginal gains and the S&P 500 ended Monday’s session 0.28% higher. That said, relationship between Iran and the West, the US particularly, remains strained. President Trump posted an inflammatory tweet claiming that the Iranian economy “is dead and will get much worse. Iran is a total mess!”
Initially Brent crude extended Friday’s gains, but the bullish momentum faded quickly and prices were not even able to revisit the July 18 high of USD 64.46 per barrel let alone the mid-July top of around USD 67.
EUR/USD continues to lean towards the June low at 1.1181 ahead of the upcoming ECB meeting on Thursday. Apart from market expectations that President Draghi will set the stage for a rate cut in September weighing on the euro, the dollar received a boost from President Trump and congressional leaders who reached an agreement to suspend the US debt ceiling for two years and allow hundreds of billions of dollars in new spending. Speaker of the House Pelosi revealed that avoiding a stock market collapse and a government shutdown were the main factors that played a critical role.
We are in a blackout period for Fed speakers ahead of next week’s crucial policy meeting, but it does not mean that President Trump will refrain from commenting on monetary policy. “It is far more costly for the Federal Reserve to cut deeper if the economy actually does, in the future, turn down! Very inexpensive, in fact productive, to move now. The Fed raised & tightened far too much & too fast. In other words, they missed it (Big!). Don’t miss it again!”, Trump tweeted on Monday.
It is reasonable to assume that Trump would prefer an insurance cut of at least 50bps on July 31 to prolong economic expansion and more importantly for him - given that he sees the S&P 500 Index as a barometer for his presidency – to sustain the bullish trend in US stocks. A 25bps cut may not prove sufficient for Trump, who will express his disappointment instantly on Twitter probably wishing that he could dismiss Powell as easily as Turkish President Erdogan fired Governor Cetinkaya for not following “instructions on rates”. Newly appointed Governor Uysal is set to cut interest rates much faster than his predecessor starting with a few hundred bps move this Thursday. Admittedly, the Turkish lira has been coping surprisingly well with President Erdogan essentially taking control of monetary policy. However, when the external backdrop worsens markedly, the lira will be far more exposed and vulnerable as a result of the CBRT potentially lowering interest rates to levels seen by foreign investors as inadequate to compensate for domestic risk factors.
Day Ahead
The Conservative Party will announce its new leader who will become the new Prime Minister. Hard Brexiteer Johnson is favourite to take over from PM May. However, the parliamentary arithmetic has changed and he will struggle to deliver his “do or die” pledge to leave the EU on October 31. Based on comments from prominent EU officials, it is very unlikely that he will be able to secure a much better deal with the EU than his predecessor whose Withdrawal Agreement was rejected on three occasions by parliament. Johnson’s ultimate solution would be a hard Brexit and he may even consider suspending parliament. That said, MPs passed an amendment to a Northern Ireland bill that prevents the new Prime Minister from requesting a suspension of parliament between October 9 and December 18. Essentially, political uncertainty will not diminish and will continue to weigh on sterling in the coming months.
It is worth noting that speculators increased their bearish bets against GBP to the highest level so far this year, almost matching the August 2018 high. This reflects increasingly negative sentiment towards sterling, which has been the worst performing G10 currency versus the dollar since May.
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A recent climate change study has found that London's weather could feel more like Barcelona's in 2050.
Even though that might sound like a dream for Londoners, Statista's Niall McCarthy notes that the change could be accompanied by severe drought. The research focused on 520 major cities and it was published in journal Plos One. Its most concerning finding was that residents in around a fifth of all cities including Jakarta, Singapore and Kuala Lumpur will experience climate conditions that have never been seen in any major cities.
You will find more infographics at Statista
By 2050, it is forecast that Madrid will feel like Marrakech, Stockholm will feel like Budapest, Seattle will feel like San Francisco and New York will be like Virginia Beach.
In the UK, the temperature increase would see the country's average temperature during its hottest month soar around six degrees to 27C.
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Blain's Morning Porridge, submitted by Bill Blain of Shard Capital
Thanks goodness for all the happy pictures of Prince George’s Birthday across the papers this morning. Not much else to celebrate here in Blighty. We’re about see a screed of cabinet ministers resign before they are pushed, while other Tories are threatening to decamp to the Liberals.. (which is likely to prove a career call ranking alongside joining Deutsche’s equity trading team..). The prospect of Boris? The Scots are going to demand immediate independence. What could possibly make the mood worse? All we really need now to complete the misery would be something scandalous from up in the Turnip growing regions.. and the country will tip into utter despair and despondency…
There is plenty of noise out there – tankers being seized in the Gulf, more demonstrations in Hong Kong and Trump digging his hole even deeper. Much talk over the weekend about how the US news about Trump’s racism is covering up the real story of the summer – who has Jeffrey Epstein been pimping for? More will no doubt be revealed. In terms of investments – passive stock funds do best, alpha funds trying to beat the market lost. The market can stay irrational longer than you can stay solvent has never been more true.
In terms of markets the coming two weeks are likely to be dominated by Central Banks. What addictive crack of lower rates and QE infinity will the ECB foist on Europe? After last week’s spat about Fed members giving poorly coordinated academic speeches to market audiences suggesting a double cut was on the way, what will Fed do at the end of the month? (The answers: i) wait, and kick the can down road, ii) 25 bp ease.)
This really is not a good time to be a central banker. For a start, the last 10 years of stunning economic growth and shared wealth expansion across the global economy, the last 10 years of stuttering faltering growth, monetary experimentation, rising social and wealth inequality and pointlessly low interest rates is being squarely blamed on their policy responses. Their solution? More of the same… It’s not a confidence building agenda.
The dangers are about credibility – what does the increasing politicisation of Central Banking mean for markets as their credentials are increasingly strained? The theme central bankers have screwed up and governments can’t be trusted is being exploited by crypto-currency snake oil salesman, and by big business that understands the attractions of non-government fiat money – unregulated - which is why banks are flirting with crypto and Facebook dipped its Libra idea to test the waters. Others are trying to crypo-ize gold – one scheme I’ve seen is a gold crypto coin backed by a fortress-vault hidden in the Swiss alps guarded by former Mossad agents! The consequences of a fiat breakdown could be horrible.
Central banks being independent is a comparatively recent notion. Giving them tightly defined objectives was designed to stop them simply juicing Government policy – but given the last 10-years of economic mayhem its hardly surprising they “tried to help”. Just a shame it’s gone so badly.
There are variations on the problems of Central Banking. The ECB is about politics – rebuilding Europe’s moribund economy needs a political figurehead to move on from the Mario Draghi age and pull Europe towards agreement on fiscal policy. However, do the German’s get that? It really worries me when I read an in-depth report by a German bank on domestic politics, and it doesn’t mention Europe once! Without German participation and agreement on fiscal union, then Europe and the Euro remains an ongoing crisis.
The Fed is a very different matter – Trump behaves like it’s his own personal piggy bank, at his beck and call to support the illusion he’s selling to his part of the electorate: “hey look, I’ve made the stock market strong, therefore I’ve Made America Great!”. For the Fed to capitulate would be a very bad thing indeed.
Why? Oh, would you really like the last 10-years of monetary distortion on financial assets to continue, ultra-low rates, corporate leverage, income inequality and financial asset inflation? Well, lots of short-term market professionals say yes – what’s not to like about rising bond and equity prices… Oh, nothing, except the higher they go, the more distorted they become..
The result is bad financial allocations – money chasing over-expensive financial assets and pushing investors to buy impossibly tighter, less liquid and more risky junk bonds and dimly understood equity models. Paying more for lower returns and lower liquidity is not a smart investment policy. And it’s just as bad in stock markets - last week I got pages of abuse for not understanding the value of Netflix. What’s not to understand? They charge too much for a lacklustre product while customers are leaving/not signing up and going elsewhere to binge-watch, while markets will be increasingly sensitive to funding them. But people buy it on the dips because they believe?
Being a central banker today has become a matter of patronage. The IMF job – which is traditionally run by a European - will be decided by the EU Brussels Blundership, largely on the basis that since Europe’s socialists didn’t get much of a share of the Brussels Jobs for the Boys, then they will get the IMF sinecure as a consolidation prize. Which one? Doesn’t much matter… But, no offense to unoffensive Dutch Finance Minister, Jerome Dijsselbloem, whomever Europe nominates is likely a bad compromise.
The best known technocratic central banker without a seat at the new table looks to be Mark Carney. He hasn’t been everyone’s cup of tea while head of the Bank of England, but he is a proper banker, rather than a second-career politician. He’s got the technical credentials and head for detail that’s needed to build credibility – a critical role for central bankers in today’s fervid markets. If confidence in the IMF and other global institutions wanes because its seen as European sideshow (which it became under Legarde), then the next move is not a compelling one.
Back to the UK…
Rumours and counter rumours about the soon to be upon us “First 100 Days of Boris” – which will incidentally be November 1st, the day after Boris promises we leave Europe with or without a deal. Without being harsh, opinionated or balanced – I give him ZERO chance of success. But I’ll be delighted if he can pull it off.
How will his rumoured European charm offensive work? Is Europe preparing a coordinated and enticing new deal for him? Is there a solution? Does Boris think an easier Irish backstop and more open dialog with Europe will pass muster with the No-Deal Brexit hard wing? Oh what fun we have to look forward to. Still selling sterling…
My immediate bet remains an Early Election as it becomes clear i) he can’t command a majority, ii) he can’t close any deal, and then line up another Tory Leader as the UK fragments.
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It was the biggest hack of private data in modern history, and now, two years later, Equihacks Equifax has agreed to pay up to $700 million to resolve U.S. federal and state investigations into the 2017 hack that compromised the most sensitive information of 147 million people.
The resolution with the Federal Trade Commission, Consumer Financial Protection Bureau and 50 state attorneys-general draws a line under the hack, the largest-ever breach of consumer data. The credit scoring company has also settled with claimants in a class-action lawsuit.
“Equifax failed to take basic steps that may have prevented the breach that affected approximately 147 million consumers,” said Joe Simons, FTC chairman, in a statement on Monday morning.
“This settlement requires that the company take steps to improve its data security going forward, and will ensure that consumers harmed by this breach can receive help protecting themselves from identity theft and fraud,” he added.
Equifax will also pay as much as $425 million to compensate consumers - which works out to about $3 per affected individual so don't spend it all at once - and will provide credit monitoring to those whose information was exposed. Equifax will separately pay $175 million to 48 states, the District of Columbia, and Puerto Rico, and an additional $100 million to the U.S. Consumer Financial Protection Bureau.
The agreement which is the largest data-security settlement by the agency, resolves a nearly two-year investigation by all 50 states and the FTC into the massive breach that compromised sensitive information like Social Security numbers and dates of birth, Bloomberg reported.
While the incident sparked outcries in Washington and among consumer advocates for more oversight of the three big consumer credit-rating companies: Equifax, TransUnion and Experian, culminating with a February hearing in which Democrats and Republicans on the House Financial Services Committee slammed the companies as Chairwoman Maxine Waters promised to tighten regulation of the industry, lawmakers have so far failed to act since the hack was disclosed.
In May 2017, hackers gained access to the Equifax network and attacked the company for 76 days, without the company being aware it was infiltrated. Equifax noticed “red flags” in late July, and then in early August contacted the Federal Bureau of Investigation, outside counsel and cybersecurity firm Mandiant. The company waited until September to inform the public of the breach.
As part of the hack, at least 147 million names and dates of birth, nearly 146 million Social Security numbers, and 209,000 payment card numbers and expiration dates were stolen, the FTC said, adding that Equifax failed to patch its network after being alerted in March 2017 to a critical security vulnerability affecting a database that handles inquiries from consumers about their personal credit data. Equifax’s security team ordered that vulnerable systems be patched, there was no follow-up to ensure the order was carried out, the FTC said.
Under the FTC settlement, Equifax will pay up to $425 million into a fund that will provide affected consumers with credit monitoring. The fund will also compensate consumers who bought credit- or identity-monitoring services from Equifax and paid other expenses as a result of the breach, the FTC said. The company also will implement an information-security program that will require annual assessments of security risks, obtaining annual certifications from the board of directors that the company has complied with the settlement, and testing security safeguards.
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Authored by Mike Shedlock via MishTalk,
Labour leader Jeremy Corbyn is reeling from an ad by members of his own party accusing him of being anti-Jewish.
If you support @JeremyCorbyn in any way you are not antiracist. And we believe that MPs and peers in @UKLabour are now condoning and complicit with Corbyn’s nasty politics of hate.
— Rabbi Zvi Solomons 🕎 (@RabbiZvi) July 17, 2019
This advert is clever, but won’t change anything. pic.twitter.com/0HGVdQjTe7
The Telegraph reports Labour peers take out newspaper advert to tell Corbyn he is 'failing the test of leadership'.
The full page advert, published in The Guardian on Wednesday, criticises Mr Corbyn for a "toxic culture you have allowed to divide our movement", saying it has prompted the resignation of "thousands" of members.
The party, it says, is no longer a "safe place" for its members and supporters.
"We are saying you are accountable as Leader for allowing antisemitism to grow in our party and presiding over the most shaming period in Labour's history," it adds.
The advert is supported by a total of 67 Labour members of the House of Lords, including Peter Hain, Peter Mandelson and Robert Winston, and comes after a damning report by BBC's Panorama programme into the party's handling of allegations of anti-Semitism.
The peers also accuse Mr Corbyn of not having "opened (his) eyes" or "accepted responsibility" for the row which has engulfed the party.
More Labour Splintering
The timing of this attack could not come at a worse time for Corbyn or a better time for Johnson.
Corbyn was already reeling from wishy-washy policy that simultaneously supported Brexit, a referendum, Remain, and a customs union.
Obviously, that's impossible.
'Inevitable' Labour MPs Will Try To Oust Corbyn Over Anti-Semitism
The Huffington Post reports 'Inevitable' Labour MPs Will Try To Oust Corbyn Over Anti-Semitism
“If he doesn’t resign, there will be a clamour for a vote of no-confidence.”
A vote of no-confidence by MPs would be largely symbolic because Labour’s leader is elected by members and not parliamentarians.
MPs can, however, trigger a leadership contest if 20% of MPs - or 49 of them nominate an alternative challenger.
MPs have stepped up criticism of the leader in the wake of a BBC Panorama probe which detailed shocking complaints of anti-Semitism, interviewed former staff members turned whistleblowers and alleged political interference from Corbyn’s communications chief Seumas Milne.
Boris Johnson the Primary Beneficiary
Boris Johnson, the UK's next Prime Minister is the primary beneficiary.
The Liberal Democrats are the secondary beneficiary
Meanwhile, how long can Corbyn hang on as Labour leader?
This looms as a key question in the next election.
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Submitted by Eric Peters, CIO of One River Asset Management
Capitulation Collage
"“Based on my many conversations, if I were to create a composite of the emerging consensus amongst traders today, it would be this,” I said, answering the investor’s question.
“The trade war and America’s domestic political drama has sparked an economic soft patch. The Fed has panicked. It’ll cut rates even though it doesn’t need to. Every other country is stimulating too. And just as the stimulus kicks in, we’ll have a trade war truce which will reignite animal spirits in corporate board rooms everywhere, lifting capital investment."
"But that’s not the end of the story,” I said, describing the emerging consensus.
"The starting point in terms of positioning is a massive investor underweight in risk assets. Despite the S&P being at all time highs, there have been investor outflows. Active managers are all underperforming and are scrambling to chase performance. Corporate buybacks continue at a $1trln/year pace. There is $13trln in negatively yielding debt globally. And now that we’re in an earnings recession, people say things are probably going to get better anyway."
"The continued shift toward passive investing is pushing more cash into the market,” I continued.
“Pensions are taking more risk in order to hit their magic +7.5% return targets. The capitulation to this collective view has grown over the past month. Before that there were plenty of bears. And now everyone agrees this will be the last leg of history’s longest bull market."
"Guys managing other people’s money seem more bullish than those who trade their own capital. Naturally, everyone plans to sell to someone else before this market rolls over."
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From observing the behaviour of ‘leavers‘ and ‘remainers‘ since the EU referendum in 2016, I have seen first hand how partisanship works as an effective tool to cloud judgement. Once a position of bias becomes ingrained, it has proved next to impossible to see beyond it or for the individual concerned to be convinced of an alternative perspective.
The psychological operation of ‘fake news‘ is now entrenched within society, with both sides of the divide claiming one another to be peddlers of false truths. By my reckoning this is all the more reason why positioning yourself as neither one thing or the other is the only logical way in which facts can be objectively scrutinised.
The role of the Bank of England in the Brexit process is an example of how bias is serving to insulate central banks from impartial and informed criticism. On one side are those who depict governor Mark Carney as an ‘enemy‘ of Brexit, whilst on the other are people who consider Carney as a safe pair of hands amidst a whirlwind of political turmoil. Non-partisan analysis of communications and policy decisions emanating from the BOE is rarely given space to evolve.
For instance, last week the bank published its latest Financial Stability Report in conjunction with a press conference delivered by Mark Carney. Whilst much of his interaction with the press on Brexit was of a similar theme to previous events, one aspect in particular stood out.
Asked by Joel Hills of ITV News about the level of preparation in the event of a no deal Brexit, Carney affirmed that the financial system in which the BOE presides over was ‘ready for whatever form Brexit takes.’ Carney’s conviction stems from a series of bank stress tests that the BOE conducted in 2018 in an attempt to gauge how the financial system would stand up to a crisis greater than 2008. The results as published by the BOE showed that the UK’s banking system was fully prepared.
Indeed, Carney’s confidence was such that he went on to say how the system would continue serving both households and businesses, ‘even if a worst case disorderly Brexit occurred at the same time as a global slowdown triggered by a trade war.’
Where it started to get more interesting is when Carney made an unequivocal distinction between financial stability and that of market and economic stability. The area where the BOE possess overarching control – the financial system – is, according to the bank, prepared for any adverse scenario. But this preparation does not extended to currency or equity markets, nor economic fundamentals such as inflation which would likely become volatile should supply chains into and out of the UK be compromised.
To quote Carney exactly, ‘market stability will adjust potentially quite substantially if there is a no deal Brexit. Even with a smooth adjustment this would still be a major economic adjustment and major economic shock – in not just a short period of time but virtually instantaneously.’
The expectation from the BOE is for immediate volatility if and when a no deal exit is confirmed. Not from within the financial system itself, but within the surrounding economic environment. The areas which the bank purport not to have direct jurisdiction over. Those who keep abreast of Brexit led developments will know that the pound would be most susceptible to a dysfunctional exit from the EU.
According to Carney, the preparedness of the UK system, which encompasses the country’s trade infrastructure, had seen ‘some progress‘, but ultimately it was for ‘the government to speak directly to that‘ and not the Bank of England.
Gradually over the last three years, the BOE have been carefully positioning themselves so as not to be held culpable for the economic ramifications of a ‘disorderly‘ Brexit. One mechanism for achieving this has been to re-elevate the importance of their 2% mandate for inflation, when in the years post 2008 it had no direct relevance for how the bank conducted monetary policy.
What we learn from Carney is that a no deal eventuality is a more pressing concern for markets and the economy than it is for the financial sector. Is this true? To a point perhaps, but not entirely as the Financial Stability Report alludes to.
An area of concern that has gestated since the referendum result is with uncleared OTC (Over the Counter) derivative contracts. Derivatives are essentially a contract between two or more parties that derive their value from the performance of an underlying asset, such as a commodity, currency or interest rate. Banks use a high degree of leverage to attain these positions in the market. Derivatives can also be used to speculate (bet) on the future value of assets, without the need to own the asset outright.
When it comes to uncleared contracts between the UK and EU, the Financial Policy Committee specifies these as a medium risk should Britain depart with no withdrawal agreement. As for the scale of contracts affected, the report is forthright. Note that the term ‘lifecycle events‘ includes actions such as settlement, modification and termination of derivative contracts.
Certain ‘lifecycle’ events will not be able to be performed on cross-border derivative contracts after Brexit. This could affect £23 trillion of uncleared derivatives contracts between the EU and UK, of which £16 trillion matures after October 2019. This could compromise the ability of derivatives users to manage risks, and could therefore amplify any stress around the UK’s exit from the EU.
This concern is what Mark Carney refers to as a potential ‘spillover‘. In their communications the Bank of England have routinely called for EU regulators to implement measures to mitigate the risks of a no deal exit. This is something that The European Banking Federation and The European Banking Authority have also been encouraging.
As well as this, the report states that for derivatives, the government has ‘legislated to ensure that EU banks can continue to perform lifecycle events on contracts they have with UK businesses.’
A possible spillover, however, stems from how The European Commission ‘does not intend to reciprocate for UK-based banks’ contracts with EU businesses.’ In particular, ‘uncertainty remains about the scope of current or proposed legislation in jurisdictions which account for approximately half of the notional value of outstanding contracts.’
A safe assumption is that potential economic fallout from derivatives would impact on financial stability. On the home front the Bank of England’s position is that markets and the economy would suffer from a volatile form of Brexit, but the financial system would remain fully functional and be able to withstand unprecedented stress. The validity of this claim could only be tested if a no deal exit comes to pass.
The caveat here is spillovers originating outside of the UK, which three months before the intended exit date of October 31st remain unresolved. Because the global economic system is interconnected, a banking crisis in one part of the world has the capacity to infect the system as a whole. This was evident over a decade ago when Lehman Brothers was sacrificed.
Derivatives, along with other financial instruments, are an inherent weakness built into the system. But instead of automatically interpreting such weaknesses as a threat to central bank autonomy, it is feasible that they present an opportunity for further far-reaching ‘reforms‘ to the financial system.
To globalists, crises open the gateway for establishing broad consensus for major economic change. Because out of chaos invariably comes consolidation of resources.
The question is, how could substantial financial instability be of benefit to the Bank of England? After the initial phase of the 2008 crisis had played out, the Bank for International Settlements put into motion new regulatory standards called ‘Basel III‘. Conceived on the global stage, the new regulations were designed to be implemented by national jurisdictions over a gradual period of time. Many of the standards are now in place, but the full roll out is not due to be completed until around 2021.
One of the aims of the FPC, as expressed in the Financial Stability Report, is to ‘ensure that systemically important payment systems support financial stability.’ This resonated with me because as I have touched on in previous articles, the Bank of England is targeting the year 2025 for the wholesale reform of the RTGS payments system in the UK. A reformed RTGS would have the capability of connecting to distributed ledger technology (DLT). As explained elsewhere, blockchain is a form of DLT, and works in conjunction with cryprocurrencies such as Bitcoin.
Changes on this scale would represent a major overhaul of the UK’s financial system, and would conveniently coincide with the BIS 2025 initiative. This initiative, as outlined by the BIS, will ‘foster international collaboration on innovative financial technology within the central banking community‘.
Based on the documentation I have read from the BIS, the IMF and the BOE, the introduction of central bank digital currencies (CBDC’s) is very much part of the drive for ‘innovative financial technology.’
The prospect of central banks issuing their own form of digital currencies in the future is, according to BIS general manager Agustin Carstens, something that might come sooner than people realise:
Many central banks are working on it; we are working on it, supporting them. And it might be that it is sooner than we think that there is a market and we need to be able to provide central bank digital currencies.
Whereas attention is directed to the short term actions of central banks, longer term plans provide a clearer perspective on the direction that global institutions want to take the financial system in the medium to longer term. It appears that globalists are targeting the period between 2025 and 2030 as the time when digital currencies would start to be implemented, resulting in the eventual abolition of physical money.
The concerted attention placed on CBDC’s comes as sterling remains highly sensitive to the Brexit process. I continue to think it is probable that a no deal exit will trigger a currency crisis. And given that currency markets have no borders, the danger is that a global trade conflict stemming from Brexit and the trade policies of the Trump administration would jeopardise the fiat currency system. This is a topic I discussed earlier this year when looking at the possibility of sterling no longer being considered a reserve currency post Brexit.
A crisis of this magnitude could quite easily be used by central banks as a rationale for a new approach to how currencies are disseminated and controlled.
Back in the present, the conventional theory pushed throughout alternative media is that protectionism is something that central banks and international institutions like the BIS and the IMF fear. On examination, I am doubtful of this claim. The FPC’s report makes it clear that even in the event of a ‘protectionist-driven slowdown‘ running in parallel to a no deal Brexit, the financial system would ‘absorb, rather than amplify, the resulting economic shocks.’ It remains to be seen whether this rhetoric bares any semblance to reality.
My concern is that rather than fear the breakdown of what globalists call the ‘rules based global order‘, it is in actuality an essential variable for orchestrating reforms of the system.
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UFO sightings have been making headlines again lately, notably with The New York Times running an interesting article about several U.S. Navy fighter pilots encountering mysterious objects near the southeastern coast of the United States.
That high-profile story remains unexplained and so do plenty of other UFO sightings reported by members of the public every year like strange lights crossing the night sky or orange disks hovering in the distance.
However, as Statista's Niall McCarthy notes, according to The National UFO Reporting Center - which is based in the U.S. and maintains statistics - global UFO sightings have declined steadily since 2014.
You will find more infographics at Statista
There were just over 8,000 reported sightings in 2014 and in 2018, there were 3,343. So far in 2019, 2,371 UFO sightings have been reported. Despite the decline in sightings, interest in UFOs and alien life remains strong judging by an event that went viral on social media this week.
Conspiracy theorists have long maintained that a secret U.S. base in Nevada known as Area 51 harbors alien life or parts of a crashed spacecraft. The event called for people to storm the base and find out and it attracted 1.4 million signatures. Entitled "Storm Area 51, They Can't Stop All Of Us", it also prompted the Air Force to issue a warning to stay well away from the facility.
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On July 21, 1969, astronauts Neil Armstrong and Buzz Aldrin were the first men to set foot on the moon. Ten more Apollo astronauts followed in their footsteps until 1972 but since then, no human has set foot on Earth’s closest companion in space.
Fifty years later, the race for the moon is starting anew with several countries and private companies announcing missions. As Statista's Katharina Buchholz notes, after the successful landings of Chinese probes Chang'e 3 in 2013 and Chang'e 4 in January 2019, who will be the next space agency or company succeeding in landing the next spacecraft or putting the next man (or first woman) on the moon?
Our graphic gives a rundown of the main lunar missions announced to date. Given the remaining uncertainties surrounding some programs, the dates may be subject to change.
You will find more infographics at Statista
After a failed mission by the Israeli private company SpaceIL in April, it is the Indian space agency ISRO that will be up next, with the launch of Chandrayaan-2 moon rover mission currently delayed but to commence in 2019.
Three U.S. companies - Astrobotic, OrbitBeyond and Intuitive Machines – are scheduled to carry out a series of missions in anticipation of astronauts returning to the lunar surface. This is an objective that U.S. President Donald Trump would like to achieve in 2024 and that is supposed to be carried out by NASA in the Artemis 3 and 4 missions.
Another independent private mission, "DearMoon", could see a Japanese billionaire accompanied by six artists making the first touristic flight around the moon in a SpaceX vessel as early as 2023.
Finally, it is interesting to note that the Moon Treaty has still not been ratified by most space-faring nations to date (except for three member countries of the European Space Agency). This treaty, adopted in 1979, stipulates that the moon may only be used for peaceful purposes and that any activity on the moon must comply with international laws.
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