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SNBDL Daily Briefing
Report prepared using big data solution Quid
Our take away from the last 24 hours news
Debt vigilantes investors capitulation: In our article Perception & reality: closing the gap using big data, we concluded that it’s much better to be invested constructively while remaining a vigilantes blogger. Markets seem to give us credit. Treasuries rallied their biggest move since 2009 in a very large volumes to settle around 2.14% yesterday. Our readers were alerted (in our October 1st Daily Briefing), that by mid-October the excessive forecasting about Fed speed of rate normalisation will have to change with important performance cost (for those which made money in September). Once again we are witnessing the power of big data to construct a much better economic, political and geopolitical picture to forecast Fed or central banks actions. Some may consider that our call was about luck, but those have to witness that we have been saying that oil prices will plummet as well. Although we must recognised that the speed of oil prices decrease surprises us. Since Aug. 21th called for first future WTI to be around 80$, while our call of negative energy price development came in May 2014.
Finally, the Fed rate normalisation revision has cleared the way for BoK to cut rate without fearing a crisis. We emphasise that Fed rate normalisation postponing should not be a return to “carry-trade” without fundamentals. For example, we see Brazil to be the next shoe to drop. We see central banks reducing the carry-trade (or moral hazard) which have been very successful from 2009 to 2012/13 through regulation. Two-days ago, when we congratulated M. Tieule, we provided the essence of our views: smart regulation would be the 3rd genuine driver of central banking. This was the second part of Driss’s book “From one speculative bubble to another, how to avoid them”. In this book he was criticising moral hazard and carry trade because they constitute the upmost reason of underpricing risks and excessive leverage.
It’s very hard to stand up nowadays, forecasting that the situation is much better than people think, without being painted as naive: Ebola, ISIL beheadings, Russia tension with Ukraine, populists united against XXI century… But consider this, look at each of these “narrative” and reduce the volume of information while focusing on a list of questions: 1) is the situation improving, deteriorating? 2) do we have the tools to overcome it? 3) are they external factors which might derail the doom scenario (Iran succeed in replace Russia oil for example)?
Recent study run by Facebook, has shown that the more one is pressed watching negative pictures and posts, the more he/she becomes depressed (and inverse). We are in the same mode right now. ISIL terrorists for example are sharing dead bodies and apocalyptic pictures on the social media. This helps to increase the majority thinking that we are at the bring of the end of the world (a view Gold bugs and ISIL share). Factually, ISIL is representing what their future will look like (the end of their world). If there is one fear, risk I am still frustrated with, (because the public has not yet take it seriously) is might be the mistrust in our institutions. This mistrust is spread by populisms, some mainstream media etc. But these should make no mistake, tracking what does a media spread, the way it spreads it and its genuine objectives to do so, has became as easy as it can get. This will destroy some old media because one thing I learned from Hubert Beuve-Mery’s biography (Le Monde’s founder) is that a newspaper value is highly correlated to the intellectual honesty of its leaders.
US Beige book came as a confirmation that the US economy is not growing to a point when the Fed will be late in normalisation (a view shared by many sell-side economists and we hope that next years Institutional Investors Votes will reflect the pain inflicted to performance by XX Century economist enabling XXI Century eco to get some air time). Second, US fiscal budget deficit is shrinking, this reduces the solvency risk (which have been the wolf many – including Bill Gross- have been scaring investors with).
As we were saying, “by mid-October, USD will depreciate and EUR will rebound”. However, there is still some pessimism relative to EU because the recent budgets are not as good as they are in the US. But EU institutions and both creditors and debtors members countries acknowledge the need to keep the pace (fiscal responsibility) but to adapt the speed to reduce the grip of populism. Italy and France are genuinely reducing spending. We might be frustrated with the speed but we cannot question the trend. Markets have usually short memories. But grey-hairs will remember that France and Italy have been pressed for the last 30years to undertake the measures they are introducing now. Should they keep the pace, the EUR will become a reserve currency. We are a couple of months away from recognising the change in the narrative.
China inflation dropped to nearly 5Y low. This should NOT be analysed as deflationary risks because they constitute dis-inflationary boost (for consumer and producers).
Finally, our opponents consider that the Stock market is about to plunge because there is a genuine speculative bubble. We disagree and in the contrary we consider that going into the end of the year, investors are likely to recognised that the short term negative impact of governance improvement on profit margins are likely to be compensated by operating margin improvement enabled by tech, analysis et efficiency.
Ebola: “There’s nothing to fear but the fear itself”, President Roosevelt
Our competitors have started to compare Ebola to the 1918 Spanish Flu (more here) which has been responsible for 50 to 100 millions casualties and a genuine driver of WW-II. Why are we relaxed that this scenario will NOT take place? Two reasons explain our different view: 1) many of our economist colleagues have not spotted Ebola when it started as a driver to markets and economy, they have not had time to study three components (institution reaction, global coordination, and the 1st reason of spread of the disease : mistrust and disinformation), 2) many have not spotted the narrative around the vaccine and how the experimental vaccines have been effective (on primate as well as on humans). There is a third factor why media and some “newly declared experts” are getting morbid excitement. These are not getting all the story. Let’s face it, you can sell more volatility (VIX has spiked to 35%) and news paper when people fear something. At SNBDL, we consider that good research finds its clients without any need of stress.
Our main fear is that Ebola could be used as a dirty weapon, and many intelligence experts are fearing the same. But US military are taking the risk seriously and the newly installed military hospital in Africa is indicating that the US with France are leading the fight to this disease. The recent decision by CDC to strengthen its first response to Ebola, when some mistakes have been pointed out helps reduce the risk.
Unlike in the beginning of XX century, many corporations have contingency plans in place in the case the situation intensifies (and we are not ruling out that the number of cases will increase). In the XXI century, workers can continue to generate value from their homes. Furthermore, Japan Fukushima brought one of the most interesting innovation: the “now-ers”. These are people which use devices (in the case of Fukushima these devices provided the level of nuclear emissions) to map real time a situation in a country (nuclear emission in the case of Japan). Should the outbreak increase, everyone can use symptom reporting mobile Apps in order to avoid collusion between “non-lethal flu” symptoms reporting with Ebola cases. This collusion is likely to be the main driver of any excessive fear. Dr. Ezekiel Emanuel, a former White House health adviser, said ‘Panic is something we can’t afford’ when discussing Ebola. Some commentators are starting to challenge CDC ability to deal with the crisis. This gesture is natural should one consider the interests at stake should US citizens start to panic.
Gaza: During the last 20years, we have not been as optimistic that Palestine – Israel peace process to move forward as today. Why? Because this time, the global community has to get rid of ISIL – which uses Palestine’s and Assad’s victims as a justification for their hiring of new Jihadists *usually the use the definition of “humanitarian work” to get in contact with their victims*-. British parliament voted on Monday to recognize Palestine as a state, a move that will not alter government policy, but carries symbolic value as Palestinians pursue international recognition. Britain does not classify Palestine as a state, but says it could do so at any time if it believed it would help promote peace between the Palestinians and Israel. These development in addition to the aid decided by donors during the weekend and UN Chief Ban Ki-moon call for peace process to be discussed are bringing all the conditions to move forward. FM Fabius says that recognising Palestine should help ‘2-state-solution’ as French parliament mulls a bill.
Behind the scenes, Muslim brotherhoods are loosing the ideological fight, Hamas is splitting between moderate (which decided to participate to a coalition government) and extremists (which are struggling to look even more barbaric than ISIL to attract “talents”). Iran and Saudi are heading toward a peaceful Sunni-Shia schism etc.
What are the consequences for global markets? Less geopolitical risk premium and lower energy prices (low inflation, and higher profit margins for corporations).
Iraq & Syria: Information war is intensifying. ISIL claims winning battle even before fighting them (e.g. Baghdad). We have been indicating that Kobani battle is very important for ISIL to strengthen its narrative. Our analysis of ISIL communication tool have shown that the terrorist organisation is using Spartacus narrative in conjunction with the biblical reference of David & Goliath. Though we refuse to spread ISIL propaganda material, and I hope that our readers will understand our position, we can send to client our references upon-request. To sum up our finding, 1) ISIL needs to win Kobani or shift the focus to other places (Baghdad), 2) any news which could push oil prices higher is welcome (because ISIL Oil Co “refinery margins” are shrinking every day), 3) the investment portfolio of ISIL reserves (those stolen from Iraqi Central Banks) are invested – according to our sources – to benefit from any information win, 4) by spreading chaos, ISIL jihadists hiring initiative got more traction because their view of the “end of the world” (or the Apocalypse) get traction.
Turkey decision to let US military to use its bases in the country to fight ISIL is a game changer. This is a first step before Turkey found a narrative where it helps Kurds without giving credit to independent kurdistan. President Erdogan can play a very important political (and economical) card should he decided to lead the fight on the ground. The shift in Muslim Brotherhood position vis-a-vis of ISIL (please see our yesterday report on Tariq Ramadan) is likely to help President Erdogan to more ahead with the ground operations. But for now, Turkey has been reluctant to side with Kurdish Peshmerga in the fight against ISIL. This is a dangerous strategy and Erdogan is likely to find himself having to choose between Evil and Good. Pakistan Taliban have joined ISIL cause. This does not come as a surprise due to the other terrorists group struggle to attract new fighters.
We continue to be negative on Oil prices and on volatility because both include a risk premium related to ISIL battles. ISIL is winning some communication battle but is doomed to fail, because the international community is taking over the narrative and genuinely showing that the institutions are not rotten to the core. Gaza development is very positive element in our scenario.
Russia: President Putin ordered troops withdraw from the Ukrainian border ahead of Ukraine-Russia head of states meeting in Italy this week. While this action could be positively perceived, we advise cautious because the same action has been taken after Crimea annexation. Meanwhile, Ukraine is considering a peace process with Donbass region self-proclaimed republics. However, as we were indicating for some time (please see our Friday take below), a quick resolution seems un-compatible with Ukraine aim to ultimately join EU and NATO. President Putin actions could be explained by 1) Premier Li visit to Russia, which seeks economic collaboration, and 2) the acceleration in RUB depreciation which cost ~$1.5bn currency intervention daily. Putin is reducing the pressure on Eastern Ukraine because he stuck a domestic political win during last week Formula 1 in Sochi and wants to reduce the pressure ahead of the G-20 (please see PM Abbott declaration on MH-17)
From our Oct. 10th daily briefing
European Union’s incoming foreign affairs head Federica Mogherini hinted her strategy with the “bear” Russia: firmness and tact. Actually, we believe that firmness is coming from EU Council President Donald Tusk, while tact needs to come from the EC. EU’s Mogherini hinted that others in Brussels know better to deal with bears (in politics that mean “I know that you have vested interests with Russia”). Many political parties have to drop their support to Russia and start think about EU public interests. Otherwise, many will start questioning whether these are not conducting treason (betraying those who have voted for them). The list is long and no one have interest to name names. In an environment where Iran wants to secure the negotiation without upsetting Russia (a long term ally which have helped provide a back-door to Iran oil), Rouhani said that Iran negotiation should not derailed any political solution with Russia. Unfortunately for Russia this will not help lift sanctions. Because, many commentators are watching: EU should make no mistake, vested interest will not go away with the crimes Russia is responsible for (and that goes beyond annexing Crimea).
Oil prices plummeting continue to constitute an existential threat to President Putin administration. A policy document of the Islamic State discovered at one of the raids brings forth some alarmingly ambitious plots of the jihadist outfit. The plan includes bribing Russia with access to oilfields in exchange for Iran’s nuclear technology. This document confirmed that ISIL is looking to Russia to increase it force. We have been worry that vested interests would align their force with those of the barbaric. Should they do so, they would be no place to hide. Make no mistake, if ISIL got the technology Putin and Russia (with interest groups which have been supporting them) will be held accountable.
While Russia continue to prepare its isolation (VTB’s says consider that capital control is not the end of the world), Putin stays put and keep his narrative: the cost will be more harsher for EU than for Russia. Unfortunately, for President Putin, facts have no political bias or religion. Russia economy is collapsing and the Saudi oil prices cut, Iran negotiation amongst other thing are pushing oil prices to a free fall spiral and threatening the stability of the government (an Oil price at $75 will push Putin out). In our Energy Update (our call that oil might go as low as $80 for WTI) we’ve highlighted the trends we observe now. These are not only providing a boost to EU (currently mistakenly analysed by many XX Century economists as a deflationary risk) but also increasing the current Russian administration existential threat. We forecasted last February that Russia will have to go through a period of isolation, will create Eurasia by annexing Eastern Europe (we still unsure where the division will take place). We stick to this scenario. However, we are working on an alternative scenario, where the speed of oil prices collapse may over through Putin administration and oligarchs before President Putin reached his messianic goal (many economists agree with the view that some of Russian President speeches are messianic – 2007 Munich is a very telling speech-).
Ukraine President is taking the “good governance bill” to the floor. This on one hand increase the likelihood of our scenario that Ukraine – West will become a new Poland but it increases short term the risk of more actions of “bad governance agents: the self designated Eastern Republics”). I wonder what kind of economic prospect will have these Russian federation satellite. Old USSR satellite (Latvia and Bulgaria) are fighting political crisis spur by the widely spread mistrust in their government. Like during the Cold War, Russia continue to use the spread of disinformation (in the internet). But we see these posturing likely to fail, should EU Commission President pursue his genuine plan to change EU narrative (more jobs, more investment – specially in digital -). The emergence of new media companies helped by big data is likely to be another leap in defeating the disinformation and mistrust spread.
Hong Kong protests are calming down, as we were expecting. But Mainland sticks to its view that any political reform should bind by the “basic law”. We do not see HK and Mainland China governments to accept any substantial change in the short term. China wary of HK protests ease pain of Macau Casinos (a pain organised by China to reduce corruption). This is 100% in line with our first comment on HK protests please find below some of what we were saying yesterday.
However, unlike with Tian’anmen square protest, we see Chinese leadership being less “harsh” fighting the protests, as we acknowledge Chinese leader fear vis-a-vis social media power. The recent decision to suspend HK police for use of pepper spray on protesters is an indication that the level of tolerance for police action has came down substantially. What’s pepper spray relative to Tian’anmen tanks? Please don’t read this comparison as an acceptance for any police abuse but we might recognise that the tolerance level has shift downward substantially and this is a positive development for the Chinese political stability.
In the medium term, we see China devoting more democratic say in HK. Our forecast is built on the view that the Chinese government is fearing a HK political change to threat its reform agenda. President Xi wants to be seen as the strong man to fight conservatism push back to the reform, specifically ahead of the IV-th Plenum, which will focus on improving governance (which creates an important shift of power from “princelings” to the reformists). After the IV-th Plenum we see President Xi and HK government coming with a middle ground solution, which could take the form of a split designation of leaders. Democracy comes with cost and responsibility. We consider that President Xi long-term objective of political reform to be intact, but he fears that “House of Cards” like politics could jeopardise his aim to avoid the middle-income trap risk should interest groups (Raymond Tusk character in the TV-show) to derail his genuine fight against conservatism and vested interests.
Catalonia: referendum called off, Rajoy opened discussion to give more autonomy to Catalonia, Russia’s RT News is pressing Catalonian to revolt. We were expecting it and we add Catalonia to the numerous subjects were big data has proven its accuracy.
We were saying “calls for independence referendum is increasing pressure on both Madrid and EU to move forward to offer better conditions and better narrative to the public. We see PM Rajoy taking constitutional actions to deter Catalonia from conducting the referendum, at a moment where more the referendum is gaining support from the independence forces all over the world. Madrid may accept to open discussion to devote additional autonomy to Catalonia in order to reduce the pressure. This story is likely to push EUR existential threat higher short term, but we consider that EUR is likely to rebound by the end of this year, when these threats will be repriced as less likely.” (daily briefing Sept. 30 2014). Catalonia decision to suspend formal campaign is the first step in our constructive scenario. However, Artur Mas uses the threat of going ahead with the referendum, though the constitutional court has specified that’s un-constitutional. This threat is urging PM Rajoy to act which he did in Saturday by opening discussion of some kind of PM Cameron solution to Scotland independence call (i.e. more fiscal autonomy). Catalonia government will decide by October 15 on whether to hold referendum. We see the most likely scenario to be some deal with Madrid which would : 1) help Artur Mas to claim victory – he would have secured more autonomy – and 2) help PM Rajoy to de-escalade the tension over Catalonia. We see the next region to start a fight for more autonomy to be Bavaria (Germany’s most wealthy region which is pushing Alternative fur Deutschland – AfD – anti-EZ party wants to reduce its contribution to other regions – “lazy” EZ members states, in their parlance -. Business interest (Football Clubs) are starting to indicate the cost of a secession. Novo-Russia continue to support Catalonia, as a secession could help justify Crimea. Many have been talking about war in the East, the War against Russia is also taking place in Catalonia. The relations between populists parties in EU and Russia speaks volume. Czar Putin should make no mistake EU is one and indivisible. Populism is a cancer, EU is recovering from it.
Ferguson – Missouri: replace Catalonia, HK Occupy with Ferguson, keep calm and carry on.
Ferguson-Missouri tension resumed during the weekend after a new fatal shooting. The Tea Party caucus is using these events as a way to increase the racial tension, while Sen. Rand Paul wants to use the spread of African-American anger vis-a-vis President Obama administration as a way to bring these voters to the GOP. Sen. Rand Paul has used exactly the same strategy with the youth, which suffers the most from the global financial crisis consequences. The administration needs to increase it rhetoric against disinformation, mistrust and pessimism should it want to avoid that the voters turn to those who are placing the most emphasis on pessimism with the help of donors which interest is to keep status quo (at a moment when the US need urgently to undertake structural reforms – immigration, taxes etc. -). Furthermore, not only Tea Party caucus is using this strategy, the moderate Chris Christie whom have suffered from the Bridge scandal, is using the same strategy to change his image.
Ferguson, HK Occupy, Scotland Independence, Catalonia share the same problem: inequality. Many are considering that Inequality will bring a class struggle and some kind of XIX century like revolution. Notwithstanding that depending on where someone seats, we might think that these mass protests (1000 for Ferguson, much more in Catalonia) are sufficient to start the revolution. But like we were saying in our earlier notes, we genuinely believe that Occupy and Anonymous groups have been hijacked by “commodity interest groups” (it suffice to look at the links between investment portfolio’s advise of those groups – Gold and Commodities – and the consequence of a derailed soft power to move toward better governance).
However, unlike in the old “organised revolutions” in LatAM, this time around the social media is in charge and the overwhelming majority wants to see soft power – and Ferguson is part of that – but the chaos and Apocalypses imagined by the 3G group (the most radical group within libertarians and their name stands for Gold, Guns and God) are unlikely to take place. Of course Ebola, and ISIL are genuine threats but 1) the on-going improvement in governance (cf. Australia G-20), 2) the work to reduce disinformation and skepticism (EU, Gaza), 3) military and medical action against the two deadly diseases ISIL and Ebola, are supportive to the positive scenario. Furthermore, there is a win-win scenario which is taking place and which could help: workers, shareholders and consumer to benefit from.
US Midterms elections: November 4th midterm elections is coming with many uncertainties. Should GOP win the Senate, the US administration is likely to find itself stuck with a divided government which could make : debt ceiling, budget negotiation, Fed Transparency Bill negotiation, very hard. Some humorists have called the Tea Party caucus to be the “no-negotiators”. Without leaning toward a liberal Tea Party bashing, we would like to remind our readers of October 2013 debt ceiling talk. These period have created too much fear that the US might default that some Sovereign Wealth Funds (SWF) have been considering challenging the USD reserve currency privilege status. The average polls are giving 55% chance to the GOP to secure a win in the Senate. However, these polls do not track the weak signals narrative nor participation variable (a model we’ve built for Scotland Independence and which has proven a very good results). Koch donors story (politico here) is very interesting because it shows that Oil interest groups are busy trying to reduce the speed at which their wealth is evaporating. $1bn is the amount invested, hope that this investment does not include any link to gestures to destabilise the Homeland security. We are confident that private initiative such as Super Pac of Super Pacs (using public donation to cut interest groups campaign financing) would take over in the short term because Pension Funds and Investors will soon recognise that “Greed is NOT good” and better have a functioning democracy.
We continue to side with the consensus. But we consider that as soon as investors will start looking at the consequence of a GOP Senate majority win we might see some change in the dynamics. We have the opportunity to use a new source of big data information. We will be using it to bring the change in the narrative in the coming 3 weeks. Stay tuned and thanks for your support.
US markets continue to behave between repricing downward growth prospect (as we were expecting) and reassign Fed policy going forward. Although VIX has moved up it still below the high stresses period we have experienced during the recent period. The Mid-Term elections prospect is not discussed as one reason which could create more crisis: GOP are likely to tight Fed hands, should they secure the Senate majority, while the recovery is still underway. We see the next two weeks to focus on the narrative on the negative consequences of a GOP Senate win. A strategy the UK has followed to secure the Scotland independence vote. Meanwhile, recent Clinton Presidency document release shows the stress around the impeachment risk (a gesture GOP has been considering until recently and which may resume after mid-term elections). Furthermore, the political mistrust continues to be on focus in DC while policymakers discussing inappropriate conduct during the 2012 prostitution scandal in Colombia
Earnings season kicked started with better than expected bottom line. However, chatters are starting to pencil down tax benefit (ahead of changes which are expected to take place during the G-20). While lower tax benefit is already in our scenario, we consider that analytics and new technology will help corporate America to keep profit margins high (please see our recent reports on robotics and big data).
EU is suffering from the combination of negative general sentiment (Ebola, ISIL etc.) and the negative press conducted by both populists when Russian media provides very good argument to drive the tensions between creditors and debtors higher. But the trend in EU continue to be supportive and as we were indicating the more markets will recognise the short term risk of US midterms elections, the more constructive they’ll become on EU and EUR. Markets were upset yesterday because Greece may postpone exiting from the program. The glass half full part of this story is that Greece, a country which once was considered to be doomed with the only hope for it is to become 2001 Argentina (according to some Nobel Prize laureates), is considering the idea of normalisation 5 years after its program. That’s in itself a strong argument to look at the glass half full.
Br-exit: Knowing that EU is changing its narrative, UKIP call for an early Br-exit vote doesn’t come as a surprise. Actually, we were expecting it to come earlier because the populist are likely to loose the supports they are having now. Populists parties are using investment advisory businesses to spread their mistrust. A recent study conducted by the AMF (France SEC), showed that 9 web-traders over 10 are loosing money when investing in FX. This is mainly due to the fact that 9 over 10 are investing like they vote: buy Gold, USD and sell EUR because it’s doomed (this is their beliefs not ours). By better regulating the internet retail investment sector, we are likely to see less spread of mistrust. These internet retail websites are widely spreading mistrust and advising ‘moms and pops’ to make easy money when the doom scenario will come. Again our legal have forbidden us from spreading some website adds (because they consider these are non respecting SEC and other regulations). These attract their “victims” by claiming making $8,000 a month by becoming a trader. The 9 over 10 are usually exposed to the next big splash in the markets. This is exactly how our research have found ISIL portfolio to be invested. While the first is betting that our institutions are rotten to the core and are listing to the doom and gloom widely spread, the former is speaking its own books. No one can be held accountable for making wrong investment decisions. However, by stressing the losses many individual investors are likely to change their strategy and diversify their views. This financial market war is likely to leave only those which bet on ISIL success largely exposed to the doom and gloom scenario.
While EU-skeptics groups continue to do well in the polls, EU is heading to a grand bargain which would clear the way to regain public support for the EU project. Germany’s FinMin Schauble indicated that Germany’s response to a “clear weakening” of the economy will be a shift in public spending toward investments and away from government consumption. He said that Germany could be willing to increase EIB capital (a strategy designated Commissioner Moscovici seems to be open to during his weekend interview). Eurogroup has cleared the way to a shift toward growth agenda / pact. Furthermore, China Premier Li visit to Germany has conducted to the release of a guideline for bilateral corporation. Furthermore, EcoMin Macron hinted that France may be considering a change in U/E allowances (a reform we understood to be very high on Chancellor Merkel ask list to move for more EU integration). Furthermore, US and UK are considering joint model to deal with too big to fail (after ISDA agreed on a “big bang” deal to reduce systemic risk arising from derivatives). Finally, according to Reuters, Germany is trying to convince Turkey and Iran to join the fight against Islamic State (IS) militants, Foreign Minister Frank-Walter Steinmeier told a German newspaper. EU developments are in line with our constructive scenario for the region (a view which is not priced yet by markets).
China: Continuing data out of China confirm that the country is soft landing while rebalancing. Labor statistics have been showing that the manufacturers have started to rebalance their activities away from labor intensive (an objective already stressed by the Chinese leadership). These are in line with the objective to rebalance the economy away from credit driven investment. “BHP Billiton has raised the stakes in the ongoing war of attrition in global iron ore with a plan to slash costs and lift production” confirms our view that commodity companies are starting to adapt to the new normal, while China is cutting the road to nowhere and excessive bureaucracy (China removes 160,000 phantom staff on payroll, China Today). Acknowledging that there is “phantom staff” out loud is an event for those who have been following China for years (this could have cost some China Today’s managers their jobs a couple of years ago).
Furthermore, the west is helping China to change it’s “narrative” from being anti-democracy (China has not gone back on its agreements with Britain over the future of Hong Kong, whose autonomy is far greater than what Britain expected three decades ago, a former aide to late British Prime Minister Margaret Thatcher has said.).
Furthermore, Premier Li is undertaking a state visit to EU. This is likely to bring more collaboration with the West, while China will be offering a back-door to Russia energy at a moment when : President Putin is challenged by plummeting oil prices and sanctions are making harder for the energy sector (finance projects and investments).
The government continues to fear that the economic rebalancing has not taken momentum yet although 1) labor intensive manufacturers are relocating in cheaper labor countries, 2) businesses are upgrading their business models [while becoming environmental friendly], 3) President Xi has conducted many trade – investment agreement with Neighbours (after Premier Li did the same in Africa) to secure investment projects which use Chinese manpower – engineers know-how in this domaine, 4) China is gaining more military presence and has fluxed it mussels – e.g. China “Top Gun” intercept by a US fighter jet -, 5) China has signed many RMB agreement which reinforce the currency usage and prepare its full liberalisation – after Free Trade Zones (FTZ) have proven to be a success -, 6) China has undertaken a genuine fight against bad governance and better regulation – many examples in our recent daily briefings of fight against corruption and bad governance-. We see in FinMin Lou Jiwei recent comment an indication that not only China wants to create a reserve currency it does want it to be strong when Chinese leaders perceive the heavy pressure place on USD by a category of investors to avoid debasing the currency through deficit financing – although we consider that this worry is misplaced –
Australia: Australia struggles with the labor statistics glitches. Treasurer Hockey offered the private sector to check the information and help to correct that data. While this information does not change drastically our view that the RBA will stay put (due to the fear of a housing bubble, which the central bank is dealing with through macro prudential tools). However, the glitches reduces the “view” in the market that countries such as China are manipulating their figures. While our work on macro eco data has pushed us to take the economic figures with a pinch of salt (due to the methodology which could create some issues), we do not side with camp mistrusting everything. However, we believe that the big data analytics is likely to help improve the accuracy and the frequency of the high frequency data. However, the statistic office may take time before undertaking the experiment.
Australia continues to be seen, by markets, as a derivative to the old Chinese model (i.e. commodity provider). This view explains the high beta between Australian assets and commodity prices (or China demand for commodities). Banks shares are suffering from the combination of the increase perception of increase in risks and additional macro prudential constants to curb housing prices frothiness. Small business defined the “goldilock range” for AUDUSD to be [.90-.94]. This level is much higher than RBA own assessment (based on PPP models). We have been criticising PPP models because they do not factor any structural changes.
These assume that neither China nor Australia are conducting their rebalancing agenda. We do believe that the current weaknesses offers genuine opportunity to benefit from the other drivers to the Australian economy which are not related to commodities. We see the current Australian Dollar weakness to continue at least until the USD start to weaken again when markets will realise that it has beaten too much on a quick rate normalisation. Meanwhile, from our previous daily briefing, we have gathered sufficient support to the view that the drivers of the Australian GDP are moving toward: 1) education, health and finance services provider to Asian neighbours, 2) innovation and digital sector, 3) energy resources export to Japan (the later contributes to our constructive view that the current negative Japan Energy Trade deficit will rebalance in the medium term – reducing Japanese Government bonds solvency risk – ).
Japan: inflation softening along with economic downgrade was widely expected as a result of the 1st VAT hike (cf our strategic note Dec 26th 2013). We see BoJ to keep the bazooka of QQE-2 un-tested until the JPY excessive depreciation and JGB solvency risk came down * investors are still short JGB expecting a Japan crisis *. The 2nd VAT hike will require some stabilisation at the current levels, though we expect that PM Abe will undertake the 2nd hike in steps, because BoJ is unlikely to be sufficiently confident to move ahead with more QQE while JPY is accelerating its depreciation. PM Abe voiced concerned over the JPY rapid depreciation, as he pointed (rightly in our opinion) to the increase in energy cost, which deteriorate further the energy trade deficit – and increase the risk of JGB solvency -. The Prime Minister confirmed in his Diet address to pursue Abenomics 3rd arrow. Japan is said to resume discussion with US on TPP, while energy sector is heading toward energy transition away from Nuxe. Physics Nobel price attribution to energy efficient and environmental friendly technology is a game changer because it does support the view that the Win-Win scenario is feasible, if only the consensus stop being pessimistic for no reason.
Furthermore, GPIF delayed its asset allocation review. This is positive because it will calm down markets nervousness that GPIF will shift over-night its JGB holding and would create a market fixed income crash. We see the current development in line with our constructive scenario.
However, BoJ might do some adjustment to its monetary program but nothing excessive. The news flow out of this weekend G20 meeting shows that the global community is gently pressing the government and the BoJ to pursue structural reforms, economic rebalancing, solvency improvement (through VAT 2nd hike commitment) and adequate monetary policy (not too hot – to avoid a crisis – not too cool – to avoid derailing the on-going portfolio rebalancing approach -). Japan continues to face heavy public pressure to rebalance its energy reliance to nuclear. While we believe that Japan will continue to press for reopening nuclear plants (when Nuclear Watchdog gives his green light), the medium to long term trend is that Japan will use Trade negotiation with neighbours to secure new energy sources while using this pressure to deregulate and move forward with Abenomics 3rd arrow (please see our Japan update for more on our views). We are not surprise by the fact that Russian news media are reporting the pushback to reopening nuclear plans, ahead of Japan-Russian talks (about sanctions, energy agreement, and disputed territories).
As China, Japan, and South Korea heads toward a constructive talks (as we were reporting in our previous daily briefings) and Japan and North Korea are heading toward a solution on Japanese civilians abduction, North Korea leaders close to Kim Jong Un held last weekend high level talks with South Korea minister of reunification. This indicates that the scenario of an unified Korea is advancing. We have been considering that the reunification will ultimately take place but it requires normalised relation amongst the 3 important players: China, Japan, South Korea.
Central banks News
Debt vigilantes investors capitulation: In our article Perception & reality: closing the gap using big data, we concluded that it’s much better to be invested constructively while remaining a vigilantes blogger. Markets seem to give us credit. Treasuries rallied their biggest move since 2009 in a very large volumes to settle around 2.14% yesterday. Our readers were alerted (in our October 1st Daily Briefing), that by mid-October the excessive forecasting about Fed speed of rate normalisation will have to change with important performance cost (for those which made money in September). Once again we are witnessing the power of big data to construct a much better economic, political and geopolitical picture to forecast Fed or central banks actions. Some may consider that our call was about luck, but those have to witness that we have been saying that oil prices will plummet as well. Although we must recognised that the speed of oil prices decrease surprises us. Since Aug. 21th called for first future WTI to be around 80$, while our call of negative energy price development came in May 2014.
Finally, the Fed rate normalisation revision has cleared the way for BoK to cut rate without fearing a crisis. We emphasise that Fed rate normalisation postponing should not be a return to “carry-trade” without fundamentals. For example, we see Brazil to be the next shoe to drop. We see central banks reducing the carry-trade (or moral hazard) which have been very successful from 2009 to 2012/13 through regulation. Two-days ago, when we congratulated M. Tieule, we provided the essence of our views: smart regulation would be the 3rd genuine driver of central banking. This was the second part of Driss’s book “From one speculative bubble to another, how to avoid them”. In this book he was criticising moral hazard and carry trade because they constitute the upmost reason of underpricing risks and excessive leverage.
It’s very hard to stand up nowadays, forecasting that the situation is much better than people think, without being painted as naive: Ebola, ISIL beheadings, Russia tension with Ukraine, populists united against XXI century… But consider this, look at each of these “narrative” and reduce the volume of information while focusing on a list of questions: 1) is the situation improving, deteriorating? 2) do we have the tools to overcome it? 3) are they external factors which might derail the doom scenario (Iran succeed in replace Russia oil for example)?
Recent study run by Facebook, has shown that the more one is pressed watching negative pictures and posts, the more he/she becomes depressed (and inverse). We are in the same mode right now. ISIL terrorists for example are sharing dead bodies and apocalyptic pictures on the social media. This helps to increase the majority thinking that we are at the bring of the end of the world (a view Gold bugs and ISIL share). Factually, ISIL is representing what their future will look like (the end of their world). If there is one fear, risk I am still frustrated with, (because the public has not yet take it seriously) is might be the mistrust in our institutions. This mistrust is spread by populisms, some mainstream media etc. But these should make no mistake, tracking what does a media spread, the way it spreads it and its genuine objectives to do so, has became as easy as it can get. This will destroy some old media because one thing I learned from Hubert Beuve-Mery’s biography (Le Monde’s founder) is that a newspaper value is highly correlated to the intellectual honesty of its leaders.
Treasuries Rally Biggest Since 2009 on Fed Speculation
Treasuries surged, with benchmark 10-year yields falling the most since March 2009, as a decline in retail sales prompted traders to reduce wagers the Federal Reserve will raise interest rates in 2015.
U.S. debt pared gains as stocks trimmed losses after Bloomberg News reported Fed Chair Janet Yellen voiced confidence in the durability of the U.S. economic expansion during a closed-door meeting last weekend. Futures show traders betting that the Fed will raise interest rates in December 2015, with chances of an increase in September fading to 35 percent. The benchmark 10-year yield traded below 2 percent for the first time since June 2013 even as the Fed is forecast to end its quantitative easing this month.
“Everybody is finding something to worry about,” said Robert Tipp, chief investment strategist in Newark, New Jersey for Prudential Financial Inc.’s fixed-income division, which oversees $533 billion in bonds. “People who were concerned an end of QE would lead to a correction of the risk markets are getting their validation.”
The benchmark 10-year yield fell six basis points, or 0.06 percentage points, to 2.14 percent as of 5 p.m. New York time, according to Bloomberg Bond Trader prices. The 2.375 percent note due in August 2024 rose 17/32, or $5.31 per $1,000 face value, to 102 3/32. The yield fell as much as 34 basis points and reached 1.86 percent, the lowest level since May 17, 2013.
The Standard & Poor’s 500 Index of stocks declined 0.8 percent after dropping as much as 3 percent.
Oil Knows Smart Money Sees No Inflation With Futures Drop
For signs of just how much inflation concerns have been erased by the global economic slowdown, look no further than oil.
West Texas Intermediate crude, the U.S. benchmark, plunged 24 percent since June 20 to $81.84 a barrel yesterday, the lowest in more than two years, and extended losses today. A year ago, WTI for delivery this month traded at $95.91 a barrel, a level that implied a 6.3 percent decline over the next 12 months. Prices ended up falling even more as demand slowed across Europe and Asia and the dollar rallied, touching a two-year high against the euro.
The speculation that unprecedented central-bank stimulus would push up inflation has proven unfounded. In Europe, policy makers are now trying to stave off deflation while demand for inflation protection in the U.S. bond market is drying up and growth in China is slowing. Oil futures traders were ahead of this, anticipating falling prices as expanding U.S. supply sparked competition with OPEC just as demand weakened.
“The oil market seems to be a better economic indicator than anything else,” Phil Flynn, an analyst at Price Futures Group Inc. in Chicago, said in an Oct. 10 phone interview. “We probably wouldn’t have the stronger dollar if we didn’t have rising U.S. oil production, and we wouldn’t have the price of oil fall as far if we didn’t have a stronger dollar.”
WTI futures sank to $85.74 on Oct. 13, the lowest settlement on the New York Mercantile Exchange since December 2012, and traded as low as $80.37 in today’s electronic trading. Gasoline futures fell to $2.2553 a gallon on the Nymex, close to a four-year low. Pump prices for regular unleaded averaged nationwide were at $3.186 a gallon, the lowest in 11 months, according to Heathrow, Florida-based AAA.
FOREX-Dollar plunges after weak U.S. data signal delayed Fed rate hike
* Euro hits three-week high against dollar
* Dollar hits over one-month low against yen
* Weak retail sales, PPI data point to delayed Fed rate hike
* China inflation slows to nearly five-year low
NEW YORK, Oct 15 (Reuters) – The U.S. dollar hit a three-week low against the euro and a more than one-month low against the yen on Wednesday after weak U.S. economic data on retail sales and producer prices heightened concerns that the Federal Reserve would delay its first rate hike.
Commerce Department data showed U.S. retail sales dropped 0.3 percent in September, while the Labor Department said prices received by U.S. producers fell 0.1 percent in September, the first decline in more than a year.
The data bolstered traders’ views that the U.S. Fed would hold off on raising rates from rock-bottom levels. A rate hike is expected to boost the dollar by driving investment flows into the United States.
« The tone right now is to bet that the Fed will wait longer, » said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Ltd in New York.
He said a sharp drop in oil prices had also contributed to fears of disinflation worldwide and a delayed Fed rate hike. Brent crude hit a four-year low of $83.37 on Wednesday.
Beige Book: Modest economic growth, no inflation
The Federal Reserve’s Beige Book, a summary of economic activity in all 12 Fed districts, shows a moderate to modestly growing economy with little sign of inflation.
The Beige Book, so called because of the color of its cover, is a largely anecdotal survey of economic conditions in each Fed district. The survey covers a broad range of economic activity, from manufacturing to construction to financial services.
The brightest note: Commercial construction, which grew in most districts. In some areas, such as Chicago and Dallas, projects were delayed because of a shortage of skilled construction workers. And the New York Fed noted an increase in demand for commercial construction loans.
Another bright spot was transportation.The Fed said that demand for trucking, rail and other transportation was generally growing, and that insufficient capacity was a problem in some districts, such as Minneapolis, Cleveland and Kansas City.
Tourism also looked good in most districts, with upbeat reports from districts in Boston, New York, Atlanta, Minneapolis and Richmond, Va. Advance bookings for travel and lodging were strong in Philadelphia, Richmond and Minneapolis.
U.S. Federal Reserve to adopt bank risk retention rule next week
Oct 15 (Reuters) – The U.S. Federal Reserve will meet next week to adopt a rule requiring that banks keep some risk on their books when they sell loans, addressing a crucial issue that helped set off the 2007-09 credit crisis.
The Fed said it will meet on Oct. 22 to adopt the final version of the credit risk retention rule, a requirement of the 2010 Dodd-Frank law to reform Wall Street.
The rule, initially proposed in 2011, was reintroduced last year following two years of lobbying from the banking industry and affordable housing advocates.
Regulators initially wanted only safe loans, with a hefty down payment, to be exempted from the risk retention requirement, but dropped the demand after banks and consumer groups argued it would stifle the housing market’s recovery.
Under Dodd-Frank, banks must keep 5 percent of mortgages and other loans on their books – except for the most basic ones – when they sell them to investors through securitization, a central driver of the credit crisis. The new rule gives banks an incentive to be prudent when lending, regulators say.
SNB Seen Keeping Franc Cap Until 2016 as ECB Eases Policy
The Swiss National Bank is likely to keep its cap on the franc in place until at least 2016 as central bankers in the surrounding euro area loosen policy further, economists say.
Eighteen of 21 economists in the Bloomberg Monthly Survey say the SNB won’t give up its minimum exchange rate of 1.20 per euro this year or next. Just three predict an exit from the measure in 2015.
The Swiss central bank, based in Bern and Zurich, set the cap three years ago to ward off deflation after investor concern pushed the franc nearly to parity with the euro. The European Central Bank’s introduction of a negative deposit rate and announcement of plans to buy asset-backed securities has lifted the franc against the euro in recent months, intensifying speculation that the SNB could again wage currency interventions or enact its own deposit charge.
“With the ECB cutting interest rates and honing in on quantitative easing, the SNB will have no choice but to extend the timeframe of its currency cap against the euro,” said Eric Tannenbaum at Moody’s Analytics in West Chester, Pennsylvania. “The SNB will enforce this policy by either moving into negative-rate territory themselves, aggressively stepping up currency interventions, or both.”
Treasury Trading Volume Rise to Recoord as Fed Priced Out
Trading volume in U.S. Treasuries surged to the highest on record as investors drop wagers that the Federal Reserve will raise interest rates.
About $924 billion in U.S. government debt changed hands as of 2 p.m. New York time, according to ICAP Plc, the world’s largest interdealer broker. That’s surpassed the $662.2 billion traded on May 22, 2013, when former Fed Chairman Ben S. Bernanke mentioned the possibility of slowing bond purchases.
“The market has been forced to wake up fast as we are getting capitulation to the broader global forces,” said Larry Milstein, managing director in New York of government-debt trading at R.W. Pressprich & Co. “The Fed is data dependent. Europe is very weak and the U.S. is starting to show weakness, and the market is taking notice, pushing the timing of tightening back, until there is a reason not to.”
The increase in volume comes as Treasuries surged, with 10-year yields falling below 2 percent for the first time since June 2013, after a report showed U.S. retail sales fell a more-than-forecast 0.3 percent in September.
Rates on federal fund futures show the probability of a September 2015 rate increase fell to 35 percent, down from 46 percent yesterday and 67 percent two months ago, according to data compiled by Bloomberg. The chances for an increase in December 2015 were 61 percent, making it the first instance for a likely central bank move.
BOK Cuts Rate to 4-Year Low as Lee Risks Capital Outflows
The Bank of Korea cut its benchmark interest rate to a four-year low as Governor Lee Ju Yeol risks spurring capital outflows in his effort to bolster the economy.
The central bank lowered the seven-day repurchase rate to 2 percent from 2.25 percent, the second reduction in two months, and downgraded its estimates for growth and inflation. Twelve of 22 economists surveyed by Bloomberg forecast the rate cut, while nine projected no change.
The decision was opposed by one board member and follows calls from Finance Minister Choi Kyung Hwan to ensure monetary policy is in “harmony” with the government. Lee warned capital may flow out of South Korea if the interest rate gap with other nations narrows and the won falls, and said countermeasures should be considered.
“The possibility of a further rate cut is open until the first half of next year,” said Park Jong Youn, a Seoul based fixed-income analyst at Woori Investment & Securities Co. “The BOK’s belatedly revised down its economic outlook, but 2015 figures still look too rosy.’
Ukraine Central Bank Says $3.1 Billion Reserved for Gas Debt Repayment to Russia
MOSCOW, October 15 (RIA Novosti) – Ukraine has reserved $3.1 billion on a special account as part of payment for its total gas debt to Russia, the nation’s central bank chief said in an interview Wednesday.
« The account was opened back in July, and the money to settle the debt with Gazprom has long been transferred to that account, pending either a ruling by the Arbitration Institute of the Stockholm [Chamber of Commerce] or an agreement [between Russia and Ukraine], » said Valeria Hontareva, who has recently been appointed the head of the National Bank of Ukraine.
Economics News
US Beige book came as a confirmation that the US economy is not growing to a point when the Fed will be late in normalisation (a view shared by many sell-side economists and we hope that next years Institutional Investors Votes will reflect the pain inflicted to performance by XX Century economist enabling XXI Century eco to get some air time). Second, US fiscal budget deficit is shrinking, this reduces the solvency risk (which have been the wolf many – including Bill Gross- have been scaring investors with).
As we were saying, “by mid-October, USD will depreciate and EUR will rebound”. However, there is still some pessimism relative to EU because the recent budgets are not as good as they are in the US. But EU institutions and both creditors and debtors members countries acknowledge the need to keep the pace (fiscal responsibility) but to adapt the speed to reduce the grip of populism. Italy and France are genuinely reducing spending. We might be frustrated with the speed but we cannot question the trend. Markets have usually short memories. But grey-hairs will remember that France and Italy have been pressed for the last 30years to undertake the measures they are introducing now. Should they keep the pace, the EUR will become a reserve currency. We are a couple of months away from recognising the change in the narrative.
China inflation dropped to nearly 5Y low. This should NOT be analysed as deflationary risks because they constitute dis-inflationary boost (for consumer and producers).
Finally, our opponents consider that the Stock market is about to plunge because there is a genuine speculative bubble. We disagree and in the contrary we consider that going into the end of the year, investors are likely to recognised that the short term negative impact of governance improvement on profit margins are likely to be compensated by operating margin improvement enabled by tech, analysis et efficiency.
Italian gov’t approves 36-billion-euro budget
ROME, Oct. 15 (Xinhua) — The Italian government of Prime Minister Matteo Renzi on Wednesday passed a 36-billion-euro budget for 2015 including adjustments aimed at boosting the country’s stagnant economy.
The budget, which will be sent to the European Commission (EC) for review, contains 18 billion euros in tax cuts and 15 billion euros in spending cuts.
« The difference between the 2014 budget and 2015 is that there are 18 billion euros in lower taxes, » Renzi said earlier in the day presenting the bill.
Speaking in a press conference after the government’s approval on Wednesday evening, Renzi defined the budget as « anti-cyclical » and « respectful » of the 3 percent ceiling of deficit-gross domestic product (GDP) ratio allowed by European Union rules.
France faces EU budget showdown
Brussels (AFP) – France headed for a showdown with the EU over its 2015 budget Wednesday with deficit-ridden Paris under threat of becoming the first country to have its spending plans rejected by Brussels.
Eurozone countries have until midnight to submit their draft budgets to the European Commission and all eyes are on France, considered the new « sick man » of an increasingly unhealthy Europe.
Paris announced last month that next year’s budget deficit — the shortfall between revenue and spending — will hit 4.3 percent of annual economic output, far above the 3.0-percent ceiling set by the European Union for member states.
In a stark warning, the government of French President Francois Hollande said the deficit would not drop to this level until 2017.
Recession-hit Italy is also under the EU microscope, with the cabinet of Italian Prime Minister Matteo Renzi set to meet just hours before the Brussels deadline to discuss Rome’s budget.
The European Commission, the EU’s executive branch, has two weeks to decide whether countries’ budget submissions break the rules.
U.S. budget deficit shrinks to $483 bln – Treasury
WASHINGTON, Oct 15 (Reuters) – The U.S. budget deficit fell by nearly a third to $483 billion in fiscal 2014, the lowest level since 2008, as U.S. economic growth boosted tax collections, the Treasury Department said on Wednesday.
The deficit, down from $680 billion last year, was the lowest since a $459 billion budget gap in fiscal 2008, which was followed by four straight years of $1 trillion-plus deficits.
U.S. Treasury Secretary Jack Lew and White House Budget Director Shaun Donovan hailed the data as a « return to fiscal normalcy » as the 2014 deficit fell to 2.8 percent of gross domestic product. That’s the lowest since 2007 and a smaller share of the economy than the average for the last 40 years.
Lew told a news conference that the United States was now in a period of fiscal sustainability that is providing a strong foundation for growth.
« What I don’t think we have is an emergency right now, » Lew said. « The challenge we have is to sustain the economic engine so that we’re seeing the growth now and over these next 10 years. »
For the month of September, the Treasury recorded a budget surplus of $106 billion, up from a year-ago surplus of $75 billion. Analysts polled by Reuters had expected a $80.9 billion surplus for the final month of fiscal 2014.
UPDATE 2-China inflation slips to near 5-yr low, more stimulus measures expected
* Inflation data points to weaker economic growth
* More policy support seen but imminent rate cut unlikely
* Sept CPI +1.6 pct yr/yr vs f’cast +1.7 pct
* Companies under greater stress, producer price falls deepen
BEIJING, Oct 15 (Reuters) – China’s consumer inflation slowed more than expected in September to a near five-year low, adding to concerns that global growth is cooling fast unless governments take bolder measures to shore up their economies.
While much of the decline was due to falling prices for food, fuel and other commodities, which are benefiting consumers globally, the data also pointed to broad weakness in the world’s second-largest economy.
Facing mounting risks to growth and rising risks of deflation, Beijing is widely expected to continue rolling out a steady stream of stimulus measures in coming months, though most economists believe it will hold off on more aggressive action such an interest rate cut unless conditions sharply deteriorate.
« Policymakers in Beijing should begin to be concerned that global disinflationary pressures are spreading to China, » said Dariusz Kowalczyk, senior economist at Credit Agricole CIB in Hong Kong.
« The low inflation readings will open the door to further targeted monetary and fiscal easing. There is also less need for a strong currency to offset imported inflation. »
METALS-Copper pressured weak economic data, supply in focus
* Copper in 270,000 T deficit in 2014, surplus in 2015 -ICSG
* China inflation data leaves room for more stimulus
* U.S. retail sales, producer prices register falls in Sept (Updates with closing prices)
LONDON, Oct 15 (Reuters) – Copper prices fell on Wednesday, under pressure from Chinese inflation data and weak U.S. retail sales and producer prices, though losses were kept in check by a growing consensus that a surplus of the metal will be delayed until next year.
China’s annual consumer inflation slowed more than expected to 1.6 percent in September, a level not seen since January 2010, further evidence that the world’s second-largest economy is cooling but giving more room for policymakers to stimulate growth if needed.
On the upside, the global copper market will be in deficit for a fifth straight year in 2014 before switching to a surplus of about 390,000 tonnes next year, an industry group said on Tuesday.
The International Copper Study Group (ICSG) had in April forecast a surplus of 400,000 tonnes for 2014, illustrating the trend of copper production often falling short of estimates.
Ebola
Ebola: “There’s nothing to fear but the fear itself”, President Roosevelt
Our competitors have started to compare Ebola to the 1918 Spanish Flu (more here) which has been responsible for 50 to 100 millions casualties and a genuine driver of WW-II. Why are we relaxed that this scenario will NOT take place? Two reasons explain our different view: 1) many of our economist colleagues have not spotted Ebola when it started as a driver to markets and economy, they have not had time to study three components (institution reaction, global coordination, and the 1st reason of spread of the disease : mistrust and disinformation), 2) many have not spotted the narrative around the vaccine and how the experimental vaccines have been effective (on primate as well as on humans). There is a third factor why media and some “newly declared experts” are getting morbid excitement. These are not getting all the story. Let’s face it, you can sell more volatility (VIX has spiked to 35%) and news paper when people fear something. At SNBDL, we consider that good research finds its clients without any need of stress.
Our main fear is that Ebola could be used as a dirty weapon, and many intelligence experts are fearing the same. But US military are taking the risk seriously and the newly installed military hospital in Africa is indicating that the US with France are leading the fight to this disease. The recent decision by CDC to strengthen its first response to Ebola, when some mistakes have been pointed out helps reduce the risk.
Unlike in the beginning of XX century, many corporations have contingency plans in place in the case the situation intensifies (and we are not ruling out that the number of cases will increase). In the XXI century, workers can continue to generate value from their homes. Furthermore, Japan Fukushima brought one of the most interesting innovation: the “now-ers”. These are people which use devices (in the case of Fukushima these devices provided the level of nuclear emissions) to map real time a situation in a country (nuclear emission in the case of Japan). Should the outbreak increase, everyone can use symptom reporting mobile Apps in order to avoid collusion between “non-lethal flu” symptoms reporting with Ebola cases. This collusion is likely to be the main driver of any excessive fear. Dr. Ezekiel Emanuel, a former White House health adviser, said ‘Panic is something we can’t afford’ when discussing Ebola. Some commentators are starting to challenge CDC ability to deal with the crisis. This gesture is natural should one consider the interests at stake should US citizens start to panic.
Ebola patient flew on commercial jet; why didn’t anyone stop her?
(CNN) — The day before she went to the hospital with Ebola symptoms, Amber Vinson was flying halfway across the country on a commercial jet with 132 other people.
Centers for Disease Control and Prevention Director Dr. Tom Frieden said she never should have stepped foot on the flight, but another federal official told CNN that no one at the agency stopped her.
Before flying from Cleveland to Dallas on Monday, Vinson called the CDC to report an elevated temperature of 99.5 Fahrenheit. She informed the agency that she was getting on a plane, the official said, and she wasn’t told not to board the aircraft.
After authorities announced the 29-year-old nurse had been diagnosed with Ebola on Wednesday, they were quick to say guidelines weren’t followed when she took the commercial flight.
Dallas Mayor Mike Rawlings said he wasn’t sure how it happened.
CDC: ‘Intensively’ assessing 4 workers Second Texas health care worker has Ebola Ebola patient on plane before diagnosis Ebola patient showing ‘grit,’ ‘grace’ Gupta suits up in Ebola protective gear
« She was being monitored here in Dallas, » he told CNN’s « The Situation Room. »
NEWS GUIDE: LATEST NEWS ON EBOLA
Health officials announced early Wednesday that a second health care worker at a Dallas hospital had preliminarily tested positive for Ebola.
The news came the day after a top U.S. health official acknowledged that a nurse at the hospital – the first recorded case of the disease being contracted in the U.S. – might not have been infected if a special response team had been sent to Dallas immediately after a Liberian man there was diagnosed with the disease.
Meanwhile, the World Health Organization warned that West Africa could face up to 10,000 new Ebola cases per week within two months. It also said the death rate during the outbreak has risen.
A look at the top Ebola developments worldwide:
THE LATEST
The Texas Department of State Health Services said Wednesday said that the second health care worker reported a fever Tuesday and was immediately isolated at Texas Health Presbyterian Hospital in Dallas, which has become the center of the disease in the United States.
US sets up rapid-response Ebola team
DALLAS – The United States is establishing a rapid-response team to help hospitals « within hours » whenever there is a case of Ebola, the top doctor leading the fight against the deadly virus said on Tuesday.
Prospects for a quick end to the contagion fell as the World Health Organization (WHO) predicted that three impoverished countries in West Africa – Liberia, Sierra Leone and Guinea – could produce as many as 10,000 new cases per week by early December.
US Centers for Disease Control and Prevention (CDC) Director Dr. Thomas Frieden, acknowledging the lapses in treatment in Dallas for a Liberian man in late September, told reporters:
« I wish we had put a team like this on the ground the day the first patient was diagnosed … but we will do that from today onward with any case in the US »
« We will be there, hands on, within hours, helping hospitals with the situation if there is another case, » he said.
Ebola Hits Market Already Feeling Ill From Economic Data
Isolating and quantifying how much of the recent tumble in stocks stems from concerns about Ebola isn’t easy, given the wide range of global economic concerns facing investors.
It’s certainly in the mix of catalysts, along with signs of slowing international economic growth and potential deflation as well as the uncertain course of central bank policy in Europe and the U.S.
Shares of airlines, which entered a bear market this week before rebounding yesterday, are Exhibit A of the knee-jerk reaction to scary Ebola headlines. Just today it was announced that a second health-care worker in Texas tested positive for the deadly virus and the Bloomberg U.S. Airlines Index slid as much as 4.2 percent.
As for the rest of the market, it’s hard — maybe impossible — to isolate. Past health scares and full-blown pandemics also occurred in the midst of major market-moving events, so the lessons to glean are muddy. During the last big global health scare, bird flu, Fidelity International examined the effect of pandemics on the market and concluded that while investors do react to the spread of contagious illnesses, “market performance will also depend on the strength or weakness of prevailing conditions.”
Why the stock market selloff may be nearing an end
Earnings season could break the stock market’s bear run, despite the oil slick that continues to trip up stocks.
Stocks rallied Tuesday but gave up big gains as oil’s decline accelerated, dragging the S&P energy sector down over 1 percent and sending 15 of the S&P 500 energy names to 52-week or multi-year lows. The S&P energy sector is down over 4 percent so far this week and has declined 20 percent since June, making it the only major sector to be in a bear market.
But several analysts say they are not discouraged by the market’s behavior and expect it to recover as investors focus on improving earnings instead. Oil has been a negative factor for a market that has been jittery about slowing global growth and other factors, like worries about a broader Ebola scare.
Earnings season, meanwhile, just kicked off with major banks reporting mixed results Tuesday, and Intel releasing positive after-the-bell results. Intel gained more than 2 percent in late trading, and stock futures were higher.
Ebola Causing Social, Political Disruption in West Africa: Assistant UN Secretary General
UNITED NATIONS, October 15 (RIA Novosti) – The impact of Ebola on West Africa has been not only medical, but also political, UN Assistant Secretary General for Political Affairs Taye-Brook Zerihoun told the UN Security Council on Tuesday.
« As the outbreak of the Ebola virus disease enters its 42nd week, it has hampered efforts of regional groupings in implementing cross-border security strategies and in taking steps to strengthen regional economic and monetary integration, » Zerihoun said.
According to the assistant secretary general, Guinea, Liberia and Sierra Leone have been hit particularly hard by the epidemic.
In Liberia, « the constitutional review process was temporarily suspended due to the ongoing state of emergency, and senatorial elections scheduled for October may be postponed, » Zerihoun said.
In Sierra Leone, « lack of information about the medical facts of the disease has fueled resentment, leading to low-level public disturbances, attacks on the police and attempts to vandalize treatment centers in Freetown. »
Gaza
Gaza: During the last 20years, we have not been as optimistic that Palestine – Israel peace process to move forward as today. Why? Because this time, the global community has to get rid of ISIL – which uses Palestine’s and Assad’s victims as a justification for their hiring of new Jihadists *usually the use the definition of “humanitarian work” to get in contact with their victims*-. British parliament voted on Monday to recognize Palestine as a state, a move that will not alter government policy, but carries symbolic value as Palestinians pursue international recognition. Britain does not classify Palestine as a state, but says it could do so at any time if it believed it would help promote peace between the Palestinians and Israel. These development in addition to the aid decided by donors during the weekend and UN Chief Ban Ki-moon call for peace process to be discussed are bringing all the conditions to move forward. FM Fabius says that recognising Palestine should help ‘2-state-solution’ as French parliament mulls a bill.
Behind the scenes, Muslim brotherhoods are loosing the ideological fight, Hamas is splitting between moderate (which decided to participate to a coalition government) and extremists (which are struggling to look even more barbaric than ISIL to attract “talents”). Iran and Saudi are heading toward a peaceful Sunni-Shia schism etc.
What are the consequences for global markets? Less geopolitical risk premium and lower energy prices (low inflation, and higher profit margins for corporations).
France FM says recognizing Palestine should help ‘2-state solution’ as parliament mulls bill
France does not want the recognition of Palestine as a state to be “symbolic.” Instead, the decision should be “helpful to peace” and contribute to a two-state solution, according to Foreign Minister Laurent Fabius.
“From the moment that we say there must be two states (Israel and Palestine), there will be a need for recognition of the Palestinian state, that goes without saying,” Fabius told the French lower house (National Assembly) on Tuesday, as quoted by AFP.
“The only question is what are the procedures and how to be most effective. What we want is not a symbolic issue but to be helpful to peace,” the minister added.
Fabius said the “right time” for such a move would be when other negotiating options have failed to work.
France’s official position came to light just one day after the British parliament voted in favor of a symbolic move to recognize Palestine as a state. The vote – which took place on Monday evening – saw 274 MPs come out in support of the motion, while 12 voted against it.
“This House believes that the Government should recognize the state of Palestine alongside the state of Israel as a contribution to securing a negotiated two-state solution,” the passed motion reads.
The House of Commons has hosted the debate on Palestinian statehood since 2012, when a petition calling for the motion garnered over 100,000 signatures.
Islamic Jihad Movement Chief to Hold Talks With Iranian Officials Over Regional Security
MOSCOW, October 15 (RIA Novosti) – Islamic Jihad Movement of Palestine Secretary General Ramazan Abdullah will meet Iranian officials in Tehran on Wednesday to discuss regional security concerns, the FARS news agency has reported.
Abdullah will hold talks with Secretary of Iran’s Supreme National Security Council (SNSC) Ali Shamkhani, and Member of Iran’s Expediency Council Saeed Jalili.
The participants are expected to focus on the Palestinian issue and the Iran’s proposal on holding a referendum in Palestine to establish an independent state.
Iranian officials support Palestine in its longstanding goal to establish the Palestinian state and be relieved from Israel’s control and repeated attacks on Gaza Strip.
French MP: Recognizing Palestinian statehood would be ‘grave mistake’ for Europe
« Europe and France specifically refuse to recognize the reality and think that if they recognize a Palestinian state, the conflict will end. When will they wake up? » exclaims Meir Habib.
France is making a grave mistake in saying it will recognize a Palestinian state if peace talks fail, French MP Meir Habib said Wednesday.
« Europe and France specifically refuse to recognize the reality and think that if they recognize a Palestinian state, the conflict will end. When will they wake up? The free world must unite and realize that recognizing a Palestinian state without negotiations at this time is a grave mistake that will be costly for Europe, » he said.
Habib’s comments came a day after French Foreign Minister Laurent Fabius said Paris would recognize a Palestinian state if negotiations between the Palestinians and Israel fail.
The MP said that Israel has been trying to reach peace agreements since the state was founded and is willing to make painful concessions for peace, while the Palestinians refuse to recognize Israel’s right to exist.
« France is refusing to open its eyes and is once again acting out of weakness, » Habib stated. « Instead of fighting jihadists and sending a strong message to terrorists, [France] is blaming the only country that is truly fighting terror. »
Iraq & Syria
Iraq & Syria: Information war is intensifying. ISIL claims winning battle even before fighting them (e.g. Baghdad). We have been indicating that Kobani battle is very important for ISIL to strengthen its narrative. Our analysis of ISIL communication tool have shown that the terrorist organisation is using Spartacus narrative in conjunction with the biblical reference of David & Goliath. Though we refuse to spread ISIL propaganda material, and I hope that our readers will understand our position, we can send to client our references upon-request. To sum up our finding, 1) ISIL needs to win Kobani or shift the focus to other places (Baghdad), 2) any news which could push oil prices higher is welcome (because ISIL Oil Co “refinery margins” are shrinking every day), 3) the investment portfolio of ISIL reserves (those stolen from Iraqi Central Banks) are invested – according to our sources – to benefit from any information win, 4) by spreading chaos, ISIL jihadists hiring initiative got more traction because their view of the “end of the world” (or the Apocalypse) get traction.
Turkey decision to let US military to use its bases in the country to fight ISIL is a game changer. This is a first step before Turkey found a narrative where it helps Kurds without giving credit to independent kurdistan. President Erdogan can play a very important political (and economical) card should he decided to lead the fight on the ground. The shift in Muslim Brotherhood position vis-a-vis of ISIL (please see our yesterday report on Tariq Ramadan) is likely to help President Erdogan to more ahead with the ground operations. But for now, Turkey has been reluctant to side with Kurdish Peshmerga in the fight against ISIL. This is a dangerous strategy and Erdogan is likely to find himself having to choose between Evil and Good. Pakistan Taliban have joined ISIL cause. This does not come as a surprise due to the other terrorists group struggle to attract new fighters.
We continue to be negative on Oil prices and on volatility because both include a risk premium related to ISIL battles. ISIL is winning some communication battle but is doomed to fail, because the international community is taking over the narrative and genuinely showing that the institutions are not rotten to the core. Gaza development is very positive element in our scenario.
Kurds hold their own against militants in Syria
MURSITPINAR, Turkey (AP) — Intensified U.S.-led airstrikes and a determined Kurdish military force on the ground appear to have had some success in halting advances by Islamic State fighters on a strategic Kurdish town near Syria’s border with Turkey — at least for now.
More Americans Say Boots Are Needed on the Ground to Fight ISIS
Many believe the air campaign is not enough, a poll finds
More and more Americans say combat ground troops need to be deployed to take the fight to the Islamic State of Iraq and Greater Syria (ISIS), according to a recent poll conducted by NBC News and the Wall Street Journal.
Approximately 41% of Americans surveyed said the military campaign against ISIS should include “air strikes and combat troops,” compared with the 35% who said the offensive should be constrained to aerial bombardments. Of the individuals polled, just 15% said they believed no military action should be taken against the radical Islamist group.
Dutch bike gang members join Kurds to take on ISIS
The Dutch public prosecutor said on Tuesday that motorbike gang members who have reportedly joined Kurds battling the Islamic State group in Iraq are not necessarily committing any crime.
« Joining a foreign armed force was previously punishable, now it’s no longer forbidden, » public prosecutor spokesman Wim de Bruin told AFP.
« You just can’t join a fight against the Netherlands, » he told AFP after reports emerged that Dutch bikers from the No Surrender gang were fighting IS insurgents alongside Kurds in northern Iraq.
The head of No Surrender, Klaas Otto, told state broadcaster NOS that three members who travelled to near Mosul in northern Iraq were from Dutch cities Amsterdam, Rotterdam and Breda.
Gas prices at 5-year low and dropping
The pain oil producers feel with oil prices hovering just above $80 a barrel is a bonus for consumers filling up at the gas pump.
Gasoline prices are at a five-year low in Canada, leaving more money in consumers’ pockets.
Prices have dropped to the $1.11 a litre level in some parts of Ontario, as low as $1.03 in Edmonton, $1.25 in Vancouver and $1.22 in St. John`s, a sharp price drop from the early summer. The Canadian average was about $1.23, according to Roger McKnight, an analyst with En-Pro International,
Obama, foreign military chiefs coordinate Islamic State plans
(Reuters) – President Barack Obama on Tuesday told military leaders from more than 20 countries working with Washington to defeat Islamic State that he was deeply concerned about the radical group’s advances at the north Syrian town of Kobani and in western Iraq.
But Obama did not hint any changes to what he saw as long-term strategy that would see ups and downs in the months ahead, even as pressure builds for the coalition to stop the Islamic State from taking control of more territory.
« This is going to be a long-term campaign, » Obama told the defense chiefs during a meeting at Andrews Air Force Base, outside Washington.
He spoke after U.S.-led air strikes had pounded Islamic State targets around Kobani near the Turkish border, where Kurdish fighters are struggling to repel an onslaught by the radical Islamist group.
He said at this point there was a focus on the fighting in Anbar, adding: « And we’re deeply concerned about the situation in and around the Syrian town of Kobani, which underscores the threat that ISIL poses in both Iraq and Syria. » He used an alternative acronym for the group.
Middle East Updates / Kerry: ‘No discrepancy’ between U.S. and Turkey over Islamic State
Turkish planes hit Kurdish targets in southeast Turkey; Obama to meet anti-Islamic State coalition partners.
9:50 P.M. U.S. Secretary of State John Kerry said there was « no discrepancy » between the United States and Turkey with regard to the strategy for fighting Islamic State militants trying to take over a Kurdish town in Syria near the Turkish border.
Kerry, in Paris for talks with Russian Foreign Minister Sergei Lavrov, added that Ankara would define its role according to its own timetable. (Reuters)
Turkey Still Considering Its Role in Anti-IS Coalition: US Official
WASHINGTON, October 16 (RIA Novosti) – Turkey is still considering its role in the anti-Islamic State (IS) coalition, including military operations out of the country’s territory, the United States’ Special Presidential Envoy for the Global Coalition to Counter Islamic State said.
« They (Turkey) as a frontline state which faces frankly an awful lot of the many lines, or faces participation in many of the lines of efforts, that we’ve talked about in terms of foreign fighters, disrupting finances and hosting coalition forces and potentially conducting military operations, » John Allen said during the press briefing on Wednesday. « They want to understand that, and they are owed that as friend and as a NATO partner, » he added.
On Monday, Turkey’s foreign minister Mevlut Cavusoglu stated that Istanbul has not yet made a decision on whether to allow the United States access to its Incirlik air base to carry out attacks against IS. The base, however, is already being used by the US Air Force for logistical and humanitarian purposes.
According to Allen, Turkish authorities want to understand how they will fit into the program and « how ultimately the coalition would operate out of Turkey. »
« The point of the planning team being on the ground and the point of our continued political consultation is to answer those questions and to go through a detailed planning process so they understand exactly what it is, » Allen concluded.
Terror accused ‘praised jihadist battles in Syria and Iraq’
The trial of a man accused of planning to target Tony Blair or carry out a Mumbai-style terror attack has heard secret recordings of him praising jihadist battles in Syria and Iraq.
Erol Incedal, from London, was recorded saying he hated white people and wanted to do « a drive-by ».
The Old Bailey heard lengthy recordings made by police after they bugged his car in September last year.
Mr Incedal, 26, who is being tried partly in secret, denies all charges.
The recordings were played in court, with many difficult to clearly hear.
In one video, Mr Incedal sings about killing Shia Muslims by cutting their throats.
In another, Mr Incedal and two others, who were watching or listening to accounts from fighters in Syria and elsewhere, are heard laughing and commenting on the deaths of enemies of al-Qaeda or Islamic State fighters.
Russia
Russia: President Putin ordered troops withdraw from the Ukrainian border ahead of Ukraine-Russia head of states meeting in Italy this week. While this action could be positively perceived, we advise cautious because the same action has been taken after Crimea annexation. Meanwhile, Ukraine is considering a peace process with Donbass region self-proclaimed republics. However, as we were indicating for some time (please see our Friday take below), a quick resolution seems un-compatible with Ukraine aim to ultimately join EU and NATO. President Putin actions could be explained by 1) Premier Li visit to Russia, which seeks economic collaboration, and 2) the acceleration in RUB depreciation which cost ~$1.5bn currency intervention daily. Putin is reducing the pressure on Eastern Ukraine because he stuck a domestic political win during last week Formula 1 in Sochi and wants to reduce the pressure ahead of the G-20 (please see PM Abbott declaration on MH-17).
From our Oct. 10th daily briefing
European Union’s incoming foreign affairs head Federica Mogherini hinted her strategy with the “bear” Russia: firmness and tact. Actually, we believe that firmness is coming from EU Council President Donald Tusk, while tact needs to come from the EC. EU’s Mogherini hinted that others in Brussels know better to deal with bears (in politics that mean “I know that you have vested interests with Russia”). Many political parties have to drop their support to Russia and start think about EU public interests. Otherwise, many will start questioning whether these are not conducting treason (betraying those who have voted for them). The list is long and no one have interest to name names. In an environment where Iran wants to secure the negotiation without upsetting Russia (a long term ally which have helped provide a back-door to Iran oil), Rouhani said that Iran negotiation should not derailed any political solution with Russia. Unfortunately for Russia this will not help lift sanctions. Because, many commentators are watching: EU should make no mistake, vested interest will not go away with the crimes Russia is responsible for (and that goes beyond annexing Crimea).
Oil prices plummeting continue to constitute an existential threat to President Putin administration. A policy document of the Islamic State discovered at one of the raids brings forth some alarmingly ambitious plots of the jihadist outfit. The plan includes bribing Russia with access to oilfields in exchange for Iran’s nuclear technology. This document confirmed that ISIL is looking to Russia to increase it force. We have been worry that vested interests would align their force with those of the barbaric. Should they do so, they would be no place to hide. Make no mistake, if ISIL got the technology Putin and Russia (with interest groups which have been supporting them) will be held accountable.
While Russia continue to prepare its isolation (VTB’s says consider that capital control is not the end of the world), Putin stays put and keep his narrative: the cost will be more harsher for EU than for Russia. Unfortunately, for President Putin, facts have no political bias or religion. Russia economy is collapsing and the Saudi oil prices cut, Iran negotiation amongst other thing are pushing oil prices to a free fall spiral and threatening the stability of the government (an Oil price at $75 will push Putin out). In our Energy Update (our call that oil might go as low as $80 for WTI) we’ve highlighted the trends we observe now. These are not only providing a boost to EU (currently mistakenly analysed by many XX Century economists as a deflationary risk) but also increasing the current Russian administration existential threat. We forecasted last February that Russia will have to go through a period of isolation, will create Eurasia by annexing Eastern Europe (we still unsure where the division will take place). We stick to this scenario. However, we are working on an alternative scenario, where the speed of oil prices collapse may over through Putin administration and oligarchs before President Putin reached his messianic goal (many economists agree with the view that some of Russian President speeches are messianic – 2007 Munich is a very telling speech-).
Ukraine President is taking the “good governance bill” to the floor. This on one hand increase the likelihood of our scenario that Ukraine – West will become a new Poland but it increases short term the risk of more actions of “bad governance agents: the self designated Eastern Republics”). I wonder what kind of economic prospect will have these Russian federation satellite. Old USSR satellite (Latvia and Bulgaria) are fighting political crisis spur by the widely spread mistrust in their government. Like during the Cold War, Russia continue to use the spread of disinformation (in the internet). But we see these posturing likely to fail, should EU Commission President pursue his genuine plan to change EU narrative (more jobs, more investment – specially in digital -). The emergence of new media companies helped by big data is likely to be another leap in defeating the disinformation and mistrust spread.
Putin, Poroshenko to discuss gas deal, peace moves in Italy
(Reuters) – Russian President Vladimir Putin and Ukrainian leader Petro Poroshenko will look for ways to settle a dispute over natural gas supplies and end months of conflict in east Ukraine at talks in Italy this week.
The meeting in Milan on Friday, is an encouraging sign for Moscow, Kiev and Brussels, which fears Russia’s decision to cut supplies to Ukraine because of unpaid bills could threaten disruptions in the gas flow to the rest of Europe this winter.
European leaders hope the presidents’ third meeting since Poroshenko was elected in May can help the sides build on a much-violated ceasefire agreed by government forces and pro-Russian separatists in eastern Ukraine on Sept. 5.
« I think there are some positive signs. It seems like we are entering a more promising and positive chapter of the whole puzzle about the crisis in and around Ukraine, » said Vygaudas Usackas, the European Union’s ambassador to Russia.
But he told Reuters the 28-nation bloc wanted « sustainable efforts, and concrete outcomes and tangible results.”
NATO Commander Claims No ‘Major Movement’ of Russian Troops Near Ukraine
MOSCOW, October 15 (RIA Novosti) – NATO’s top military commander said the alliance would welcome the withdrawal of Russian troops from the border with Ukraine, however claimed there had been no “major movement” yet, The Associated Press reported Wednesday.
« We would welcome withdrawal of troops on that border, and we are anxiously watching what is happening, » US Air Force Gen. Philip Breedlove, the Supreme Allied Commander Europe, told The Associated Press during the NATO conference in Thessaloniki, Greece.
« We have not seen major movements yet. Now we will watch to see if there is delivery on the promise, » the NATO military commander added.
US, Iran seek magic formula in nuke talks
US, Russia trade barbs over deadline extension
Ensconced for hours in a Vienna hotel room, US Secretary of State John Kerry and his Iranian counterpart yesterday tried to resuscitate troubled talks about limiting Tehran’s nuclear programme.
Iran and six world powers have less than six weeks, until November 24, to strike a comprehensive accord meant to prevent Tehran from developing nuclear weapons under the cover of its civilian atomic programme, in exchange for eased sanctions.
Ahead of his meeting in the Austrian capital with Mohammad Javad Zarif, also involving EU foreign policy chief Catherine Ashton, Kerry said there was still hard work to be done.
« I don’t believe it’s out of reach, but we have some tough issues to resolve, » Kerry told reporters in Paris Tuesday after meeting Russian Foreign Minister Sergei Lavrov.
Kerry refused to be drawn on whether — as floated by Lavrov, Iran’s president and many experts — Iran and the six powers might push back the target date, as they did earlier this year.
« We need to continue to have some serious discussions, which we will, and we’ll see where we are, » Kerry said.
« We’re not talking about an extension at the moment, » a senior US State Department official echoed yesterday. « There is still time to get this done… if everyone can make the decisions they need. »
Kerry Says U.S. and Russia Agree to Share Intelligence on Islamic State
U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov have agreed to increase intelligence sharing between Moscow and Washington on Islamic State militants, focusing on a common enemy even as deep divisions remained over the crisis in Ukraine.
Speaking Tuesday in Paris after talks with his Russian counterpart, Kerry said the two world powers, whose relations have hit a post-Cold War low over Russia’s role in Ukraine, had a « major responsibility » to find ways to work together on global issues, despite their stark differences in a number of areas.
While leaving little doubt that mutual distrust remains, Kerry stressed the search for common ground between the two countries against Islamic State, which has seized large swaths of Iraq and Syria in a brutal campaign. « We both recognize the need to destroy and ultimately defeat ISIL, to degrade their efforts and ultimately to defeat them, » Kerry told a news conference, using an alternative name for the group also known as IS.
« No decent country by any definition could support the horrors that are perpetrated by ISIL, and no civilized country should shirk its responsibility to stand up and be part of the effort to stamp out this disease. »
Kerry said the U.S. and Russia had agreed to « intensify intelligence cooperation with respect to IS and other counterterrorism challenges of the region. » He said Moscow would also explore whether it could do more to help arm and train Iraq’s embattled military.
However, Kerry stopped short of saying that Moscow would join the U.S.-led international coalition against Islamic State. In recent years, as U.S.-Russian relations have deteriorated, intelligence cooperation has suffered.
UPDATE 3-Oil dips below $84, near 4-year low, on oversupply
* Brent falls $4 after IEA cuts oil demand growth forecasts
* North Sea benchmark down more than 25 pct in four months
* OPEC shows no sign of cutting output to defend oil prices
* Coming up: API weekly oil inventories; 2030 GMT
LONDON, Oct 15 (Reuters) – Brent crude fell to a fresh 47-month low on Wednesday, dipping below $84 a barrel as faltering global growth curbed demand for fuel at a time of heavy oversupply.
Oil saw its biggest daily fall in more than three years on Tuesday after the West’s energy watchdog slashed its forecasts for world oil demand for this year and 2015.
Core members of the Organization of the Petroleum Exporting Countries appear to be focused on fighting for market share rather than on cutting production to shore up prices.
Weak European stock markets has helped extend the rout.
« The global environment is bearish, » said market analyst Olivier Jakob of PetroMatrix. « There’s broad acceptance by the market that Saudi Arabia is willing to let prices go lower. With the velocity of the drop, definitely you’ve got people liquidating positions. »
Half of Russians See Putin Cult as Rating Nears High
Half of Russians see signs of a personality cult forming around President Vladimir Putin, whose approval rating is close to a record high, a survey showed.
Nineteen percent said there were clear manifestations of a personality cult around Putin and 31 percent saw growing indications of one, according to the Sept. 26-29 survey by the Moscow-based Levada Center. A previous poll in Oct. 2011 found that 25 percent considered that a personality cult had formed and 30 percent believed one was coming.
Approval ratings for Putin, 62, have jumped since the Olympic Games in Sochi in February and Russia’s annexation of Crimea from Ukraine in March. His popularity has remained near a record high during the worst standoff since the Cold War between Russia and the U.S. and its allies, which has pushed the $2 trillion economy to the brink of recession, led to a ruble plunge and intensified capital flight.
Attitudes among Russians have shifted, from seeing “no real alternative” to Putin as president to believing that he was “successfully and worthily dealing with the country’s problems,” according to Levada.
Forty-two percent agreed that “Putin sincerely wants to increase the population’s wellbeing, but can’t do it because of bureaucratic resistance, lack of good team,” up from 33 percent in a similar survey in May 2012, the survey showed.
Levada polled 1,630 people in 46 regions of Russia. The results have a margin of error of 3.4 percentage points.
Putin’s approval rating increased to 86 percent at the end of September from 65 percent in January, according to a Sept. 19-22 survey by Levada. Public approval was at 88 percent in a Sept. 2008 poll.
Salaries in Moscow Rise to $1,200 Per Month as Wage Growth Slows
The average Muscovite is pulling in slightly more than 50,000 ($1,200) a month this year, as wages in all sectors increase but fall behind the double-digit pay rises of recent years, a Moscow city official said Tuesday.
Workers in municipal services, construction, social services and small business will earn 50,000 rubles or more on average in 2014, news agency TASS quoted Maxim Reshetnikov, head of Moscow’s economic policy department, as saying.
Wage growth in all sectors of the city’s economy will exceed inflation, he added. Inflation has spiked this year due to the devaluation of the ruble and Russia’s ban on an array of Western food imports. Officials now say it is likely to strike 7.5 to 8 percent for the year.
Russian, Serbian Presidents to Discuss South Stream Project: Kremlin Aide
MOSCOW, October 15 (RIA Novosti) – Russian President Vladimir Putin and his Serbian counterpart Tomislav Nikolic will discuss the South Stream project, as well as a number of bilateral issues during their meeting in Belgrade on October 16, Kremlin aide Yuri Ushakov said Wednesday.
« As for the talks in Belgrade, energy will be discussed, including the South Stream, the situation with the Serbian oil company NIS. As you know, there are still several problems,” the Russian presidential aide said.
“They will also discuss issues related to the Russian Railways cooperation. JSC Russian Railways is actively involved in various projects related to the reconstruction of Serbian railways,” Ushakov added.
On October 7, Serbia reaffirmed its commitment to build a leg of the South Stream pipeline, a Russia-led project that would bypass Ukraine to bring natural gas to Europe. Russia’s Gazprom energy giant started building the pipeline in 2012 and it is expected to be fully operational by 2018.
Putin: Sanctions Pressure on Russia Over Ukraine Illegitimate, Counterproductive
MOSCOW, October 15 (RIA Novosti) – Western sanctions against Russia over its alleged role in the Ukrainian crisis will not help to resolve the situation, but will rather hinder dialogue and could seriously undermine economic stability in the world, Russian President Vladimir Putin said.
« Our partners should be well aware that attempts to put pressure on Russia with unilateral and illegitimate restrictive measures will not bring about a settlement, but rather impede the dialogue, » Putin said in an interview with Serbian newspaper Politika ahead of his visit to Belgrade scheduled for October 16.
« If the main goal is to isolate our country, it’s an absurd and illusory goal. It is obviously impossible to achieve it, but the economic health of Europe and the world can be seriously undermined, » Putin stressed.
In his previous comments the Russian President has stressed that the sanctions hurt not only the target country but also those using the measure.
Hong Kong
Hong Kong protests are calming down, as we were expecting. But Mainland sticks to its view that any political reform should bind by the “basic law”. We do not see HK and Mainland China governments to accept any substantial change in the short term. China wary of HK protests ease pain of Macau Casinos (a pain organised by China to reduce corruption). This is 100% in line with our first comment on HK protests please find below some of what we were saying yesterday.
However, unlike with Tian’anmen square protest, we see Chinese leadership being less “harsh” fighting the protests, as we acknowledge Chinese leader fear vis-a-vis social media power. The recent decision to suspend HK police for use of pepper spray on protesters is an indication that the level of tolerance for police action has came down substantially. What’s pepper spray relative to Tian’anmen tanks? Please don’t read this comparison as an acceptance for any police abuse but we might recognise that the tolerance level has shift downward substantially and this is a positive development for the Chinese political stability.
In the medium term, we see China devoting more democratic say in HK. Our forecast is built on the view that the Chinese government is fearing a HK political change to threat its reform agenda. President Xi wants to be seen as the strong man to fight conservatism push back to the reform, specifically ahead of the IV-th Plenum, which will focus on improving governance (which creates an important shift of power from “princelings” to the reformists). After the IV-th Plenum we see President Xi and HK government coming with a middle ground solution, which could take the form of a split designation of leaders. Democracy comes with cost and responsibility. We consider that President Xi long-term objective of political reform to be intact, but he fears that “House of Cards” like politics could jeopardise his aim to avoid the middle-income trap risk should interest groups (Raymond Tusk character in the TV-show) to derail his genuine fight against conservatism and vested interests.
Hong Kong police use pepper spray on protesters, anger simmers over beating
HONG KONG (Reuters) – Hong Kong police used pepper spray early on Thursday to stop pro-democracy protesters from blocking a major road near the office of the city’s embattled leader amid public anger over the police beating of a protester a day earlier.
At police headquarters in the nearby district of Wan Chai, hundreds of people gathered outside into the early hours of the morning to express outrage at the beating, with dozens queuing to lodge formal complaints over the incident.
Authorities on Wednesday said police involved in the beating of Ken Tsang Kin-chiu, a member of the pro-democracy Civic Party, would be suspended.
Footage of the beating has gone viral and injected fresh momentum into a protest movement that had been flagging after nearly three weeks of demonstrations over Chinese restrictions on how Hong Kong will choose its next leader.
In the latest confrontation, Hong Kong’s public broadcaster RTHK said protesters rushed onto Lung Wo road next to the office of Chief Executive Leung Chun-ying, dragging plastic barriers and other objects with them. A Reuters photographer saw protesters later scuffling with a small group of police on the side of the road. Police repelled them using pepper spray.
Hong Kong tensions rise as police officers suspended
Hong Kong authorities said police allegedly involved in the beating of a pro-democracy protester would be removed from their positions after footage of the overnight incident went viral, sparking outrage from some politicians and the public.
Police said they arrested 45 protesters in the early hours of today, using pepper spray on those who resisted, as they cleared a major road in the Chinese-controlled city that had been barricaded by pro-democracy demonstrators with concrete slabs.
Several officers appeared to beat and kick one protester for several minutes after dragging him to a dark corner next to the protest site in footage aired by television broadcaster TVB.
Hong Kong Secretary for Security Lai Tung-kwok told a news conference that police would investigate the suspected use of excessive force. The officers shown in the video would be removed from their positions, he added.
Heavy short-selling hints stocks rebound
Hong Kong stocks may rebound after short-selling climbed on Tuesday to the highest level since February amid protests in the city and a global equities selloff, according to Tanrich Securities Co.
The ratio of total short-selling by value on Hong Kong’s mainboard versus the shares traded reached almost 1-to-8 on Tuesday, the highest since Feb 24, according to data compiled by Bloomberg. The ratio surged by 58 percent since Sept 25, the last day of trading before the police’s use of tear gas and pepper spray to quell demonstrations galvanized protesters demanding electoral reforms.
« When short-selling reaches a peak, the market tends to rebound as people will have to cover their positions, » said Tanrich investment manager William Fung. « Shorts remained high after protests started. Investors may also be selling short as overseas volatility » impacts the Hong Kong market, he said.
The Hang Seng Index slid 0.4 percent on Tuesday. Hong Kong police cleared barricades erected by demonstrators in the city’s business district. The benchmark gauge has fallen by 3 percent since Sept 25 as retail outlets and banks closed their doors after protesters blocked some main roads.
Catalonia
Catalonia: referendum called off, Rajoy opened discussion to give more autonomy to Catalonia, Russia’s RT News is pressing Catalonian to revolt. We were expecting it and we add Catalonia to the numerous subjects were big data has proven its accuracy.
We were saying “calls for independence referendum is increasing pressure on both Madrid and EU to move forward to offer better conditions and better narrative to the public. We see PM Rajoy taking constitutional actions to deter Catalonia from conducting the referendum, at a moment where more the referendum is gaining support from the independence forces all over the world. Madrid may accept to open discussion to devote additional autonomy to Catalonia in order to reduce the pressure. This story is likely to push EUR existential threat higher short term, but we consider that EUR is likely to rebound by the end of this year, when these threats will be repriced as less likely.” (daily briefing Sept. 30 2014). Catalonia decision to suspend formal campaign is the first step in our constructive scenario. However, Artur Mas uses the threat of going ahead with the referendum, though the constitutional court has specified that’s un-constitutional. This threat is urging PM Rajoy to act which he did in Saturday by opening discussion of some kind of PM Cameron solution to Scotland independence call (i.e. more fiscal autonomy). Catalonia government will decide by October 15 on whether to hold referendum. We see the most likely scenario to be some deal with Madrid which would : 1) help Artur Mas to claim victory – he would have secured more autonomy – and 2) help PM Rajoy to de-escalade the tension over Catalonia. We see the next region to start a fight for more autonomy to be Bavaria (Germany’s most wealthy region which is pushing Alternative fur Deutschland – AfD – anti-EZ party wants to reduce its contribution to other regions – “lazy” EZ members states, in their parlance -. Business interest (Football Clubs) are starting to indicate the cost of a secession. Novo-Russia continue to support Catalonia, as a secession could help justify Crimea. Many have been talking about war in the East, the War against Russia is also taking place in Catalonia. The relations between populists parties in EU and Russia speaks volume. Czar Putin should make no mistake EU is one and indivisible. Populism is a cancer, EU is recovering from it.
Spain’s Rajoy says ‘chapter of dialogue’ is opened with Catalonia
MADRID (Reuters) – Spanish Prime Minister Mariano Rajoy said on Wednesday that a new « chapter of dialogue » was being opened with Catalonia after the northeastern region dropped plans to hold a referendum on independence from Spain next month.
But Rajoy also threatened to block a non-binding « consultation » ballot which Catalonia says it will hold instead, if it were found to be illegal.
Nor was it clear if the Catalan authorities wanted to start discussions with the central government. Regional president Artur Mas said on Tuesday the Spanish state was « the enemy ».
Mas said that a referendum on independence – strongly opposed by the Madrid government – would not now go ahead as planned on Nov.9 but instead a non-binding « consultation » ballot would take place.
Rajoy, who had welcomed the decision, told reporters at parliament on Wednesday: « A chapter of dialogue is now being opened. »
But he also said he would seek to block the consultation vote if there was any indication it was against the law.
‘No compromise possible: Catalonia demands self-determination vote’
Catalans see no possible compromise except a proper vote for self-determination, and are willing to decide their political future without Madrid, Elisenda Paluzie, Dean of the Faculty of Economics and Business at the University of Barcelona, told RT.
While Britain rolled the dice to let Scotland vote on its independence, Spain is not keen on letting Catalonia decide its own future.
According to Elisenda Paluzie, “Spain has never recognized Catalonia as a nation,” and it neither wants to let the region decide, nor to “recognize us as a nation.” Madrid fears a majority would vote in favor of Catalan independence, she told RT.
“Polls in Catalonia show stronger support for independence than in Scotland,” Paluzie said.
Catalonia “is not by far the richest area in Spain,” the autonomous region is the fourth by GDP per capita. However, she went on, “it is a rich territory and could be by itself perfectly well by collecting its own taxes and having its own policies in the context of level markets and openness.”
Ferguson
Ferguson – Missouri: replace Catalonia, HK Occupy with Ferguson, keep calm and carry on.
Ferguson-Missouri tension resumed during the weekend after a new fatal shooting. The Tea Party caucus is using these events as a way to increase the racial tension, while Sen. Rand Paul wants to use the spread of African-American anger vis-a-vis President Obama administration as a way to bring these voters to the GOP. Sen. Rand Paul has used exactly the same strategy with the youth, which suffers the most from the global financial crisis consequences. The administration needs to increase it rhetoric against disinformation, mistrust and pessimism should it want to avoid that the voters turn to those who are placing the most emphasis on pessimism with the help of donors which interest is to keep status quo (at a moment when the US need urgently to undertake structural reforms – immigration, taxes etc. -). Furthermore, not only Tea Party caucus is using this strategy, the moderate Chris Christie whom have suffered from the Bridge scandal, is using the same strategy to change his image.
Ferguson, HK Occupy, Scotland Independence, Catalonia share the same problem: inequality. Many are considering that Inequality will bring a class struggle and some kind of XIX century like revolution. Notwithstanding that depending on where someone seats, we might think that these mass protests (1000 for Ferguson, much more in Catalonia) are sufficient to start the revolution. But like we were saying in our earlier notes, we genuinely believe that Occupy and Anonymous groups have been hijacked by “commodity interest groups” (it suffice to look at the links between investment portfolio’s advise of those groups – Gold and Commodities – and the consequence of a derailed soft power to move toward better governance).
However, unlike in the old “organised revolutions” in LatAM, this time around the social media is in charge and the overwhelming majority wants to see soft power – and Ferguson is part of that – but the chaos and Apocalypses imagined by the 3G group (the most radical group within libertarians and their name stands for Gold, Guns and God) are unlikely to take place. Of course Ebola, and ISIL are genuine threats but 1) the on-going improvement in governance (cf. Australia G-20), 2) the work to reduce disinformation and skepticism (EU, Gaza), 3) military and medical action against the two deadly diseases ISIL and Ebola, are supportive to the positive scenario. Furthermore, there is a win-win scenario which is taking place and which could help: workers, shareholders and consumer to benefit from.
Police say tests show teen shot by St. Louis officer had gun residue on hands
(Reuters) – A black teenager fatally shot last week in St. Louis by an off-duty police officer had gunshot residue on his hands, jeans and T-shirt, according to crime lab results released on Tuesday after four days of protests in the city against police violence.
The killing of 18-year-old Vonderrit Myers by a white officer last Wednesday intensified the demonstrations over the deadly Aug. 9 shooting of unarmed black teenager Michael Brown by a white police officer in the St. Louis suburb of Ferguson.
Police said previously that Myers shot at least three times at the off-duty officer who was working with a security company and that Myers’ weapon was recovered at the scene. The officer’s name has not been released. Family and friends of Myers have said he did not have a gun.
His political standing damaged by bridge scandal, Chris Christie seeks a new image
CAMDEN, N.J. — Fresh off a flight from New Hampshire, New Jersey Gov. Chris Christie bounded toward the rain-soaked football field, shaking hands and posing for selfies with students from this mostly African American community.
“I come down here and I’m myself,” Christie said later as he paced past the end zone, near the gates where police officers patted down everyone who came to the game Friday at Camden High School. “No matter what the race or ethnicity of the person is, I don’t feel self-conscious.”
Ostensibly, the stop was a promise kept to the players, who invited Christie to a game when he visited a practice here last month. But it was also an illustration of Christie’s attempt this fall to revive and reshape his national political standing, which was hit hard by the George Washington Bridge scandal.
That incident, an act of political retribution that has ensnared his administration, remains under investigation by state and federal officials.
Seeking a path under those clouds, Christie, 52, has in recent months turned away from the fiscal battles that were the running theme of his first term and toward efforts designed to showcase the softer side of his politics, as well as his support among blacks and Hispanics. In his reelection campaign last year, Christie won 21 percent of the former’s vote and 51 percent of the latter.
US midterms elections
US Midterms elections: November 4th midterm elections is coming with many uncertainties. Should GOP win the Senate, the US administration is likely to find itself stuck with a divided government which could make : debt ceiling, budget negotiation, Fed Transparency Bill negotiation, very hard. Some humorists have called the Tea Party caucus to be the “no-negotiators”. Without leaning toward a liberal Tea Party bashing, we would like to remind our readers of October 2013 debt ceiling talk. These period have created too much fear that the US might default that some Sovereign Wealth Funds (SWF) have been considering challenging the USD reserve currency privilege status. The average polls are giving 55% chance to the GOP to secure a win in the Senate. However, these polls do not track the weak signals narrative nor participation variable (a model we’ve built for Scotland Independence and which has proven a very good results). Koch donors story (politico here) is very interesting because it shows that Oil interest groups are busy trying to reduce the speed at which their wealth is evaporating. $1bn is the amount invested, hope that this investment does not include any link to gestures to destabilise the Homeland security. We are confident that private initiative such as Super Pac of Super Pacs (using public donation to cut interest groups campaign financing) would take over in the short term because Pension Funds and Investors will soon recognise that “Greed is NOT good” and better have a functioning democracy.
We continue to side with the consensus. But we consider that as soon as investors will start looking at the consequence of a GOP Senate majority win we might see some change in the dynamics. We have the opportunity to use a new source of big data information. We will be using it to bring the change in the narrative in the coming 3 weeks. Stay tuned and thanks for your support.
Poll shows Obama approval low, GOP enthusiasm higher than Democrats’
Heading into the final weeks of the midterm campaign, the political landscape continues to tilt in favor of the Republican Party, with President Obama’s overall approval rating at the lowest level of his presidency and GOP voters signaling greater likelihood than Democrats that they will cast ballots, according to a new Washington Post-ABC News poll.
Americans are looking to November and beyond with dissatisfaction about the state of the country and the political leadership in Washington. Two-thirds say the country is seriously off-track. And while more than 6 in 10 say the president lacks a clear plan for governing, a slightly higher percentage says the same of Republicans in Congress.
Public impressions of the two political parties are similarly gloomy. “Favorable” ratings for the Democratic Party (39 percent) are at a 30-year low, and for the first time a majority (51 percent) gives the Democrats an “unfavorable” rating. The Republicans are rated even lower, with a 33 percent “favorable” mark. That is little changed since last year’s government shutdown, although the party’s “unfavorable” rating has improved.
US President Barack Obama hits campaign trail in delicate balancing act
WASHINGTON: Less than three weeks before key mid-term elections, US President Barack Obama on Wednesday finally hits the campaign trail, an event signaling a delicate balancing act for his Democratic party.
Obama Says Health Response Teams Readied for Ebola Cases
President Barack Obama said the government is examining what went wrong at a Texas hospital, where two nurses contracted Ebola, and will now send rapid response teams of specialists to be on-site within 24 hours after a patient is diagnosed in the U.S.
As public concern over the spread of Ebola rises, Obama said the federal government would be “much more aggressive” in ensuring that hospitals have proper protocols and training in place to contain the disease.
The federal Centers for Disease Control and Prevention also is reviewing every step taken at the Dallas hospital that treated a Liberian man who has since died of Ebola, to determine what went wrong, he said.
US News
US markets continue to behave between repricing downward growth prospect (as we were expecting) and reassign Fed policy going forward. Although VIX has moved up it still below the high stresses period we have experienced during the recent period. The Mid-Term elections prospect is not discussed as one reason which could create more crisis: GOP are likely to tight Fed hands, should they secure the Senate majority, while the recovery is still underway. We see the next two weeks to focus on the narrative on the negative consequences of a GOP Senate win. A strategy the UK has followed to secure the Scotland independence vote. Meanwhile, recent Clinton Presidency document release shows the stress around the impeachment risk (a gesture GOP has been considering until recently and which may resume after mid-term elections). Furthermore, the political mistrust continues to be on focus in DC while policymakers discussing inappropriate conduct during the 2012 prostitution scandal in Colombia
Earnings season kicked started with better than expected bottom line. However, chatters are starting to pencil down tax benefit (ahead of changes which are expected to take place during the G-20). While lower tax benefit is already in our scenario, we consider that analytics and new technology will help corporate America to keep profit margins high (please see our recent reports on robotics and big data).
U.S. sees some progress in Iran nuclear talks, still aims for November deal
VIENNA (Reuters) – A senior U.S. official said some progress was made in high-level nuclear negotiations with Iran on Wednesday but much work remained to be done, adding the goal was still to reach a deal by a late November deadline.
The State Department official spoke after about six hours of talks between U.S. Secretary of State John Kerry, Iranian Foreign Minister Mohammad Javad Zarif and European Union foreign policy chief Catherine Ashton in Vienna.
Iran and six world powers – the United States, France, Germany, China, Russia and Britain – aim to end a decade-long nuclear standoff by a Nov. 24 target date, although Tehran and Moscow have both indicated that more time may be required.
With less than six weeks to go, Western officials say important differences still remain, especially over the future scope of Iran’s production of enriched uranium, which can have civilian as well as military uses.
« We’ve been chipping away at some of the issues. Everybody has put ideas on the table to see if we can move the ball forward, » said the U.S. official, who declined to be named.
Some Harvard Professors Oppose Policy on Assaults
CAMBRIDGE, Mass. — Dozens of Harvard Law School faculty members are asking the university to withdraw its new sexual misconduct policy, saying that it violates basic principles of fairness and would do more harm than good.
“Harvard has adopted procedures for deciding cases of alleged sexual misconduct which lack the most basic elements of fairness and due process, are overwhelmingly stacked against the accused, and are in no way required” by the federal anti-discrimination law, known as Title IX, they wrote in an op-ed article signed by 28 current and retired members of the Harvard Law faculty and posted online by The Boston Globe on Tuesday night.
“It’s a totally secret process, in which real genuine unfairnesses can happen, and it’s so airtight that no one would know,” Janet Halley, one of the professors who signed the article, said Wednesday.
Madeleine Smith, a rape victim, and Vice President Joseph R. Biden Jr. on Tuesday for the first report of the White House Task Force to Protect Students From Sexual Assault.News Analysis: Behind Focus on College Assaults, a Steady Drumbeat by StudentsAPRIL 29, 2014
President Obama signed a memorandum in January creating a task force to respond to campus rapes.White House to Press Colleges to Do More to Combat RapeAPRIL 28, 2014
Harvard College and Harvard Law School are among the dozens of higher-education institutions under investigation by the federal Education Department over their handling of complaints of sexual assault or sexual harassment.
The federal government has threatened to withhold funds from universities that do not have adequate sexual misconduct policies.
So over the summer, Harvard, like many other institutions, announced a broad new policy aimed at preventing sexual harassment and sexual violence. The policy, which went into effect last month, defined sexual harassment for the first time, and created new procedures for dealing with complaints.
The future of tech: Your local library
Want your own robot? All you need is a library card.
At least if you’re in Chicago. The Windy City is leading the way when it comes to innovating libraries, making a trip to the local branch a multimedia experience, especially for those who might not have access to the technology otherwise.
The libraries offer patrons the chance to use cutting-edge technology in one of the « maker labs, » which are stocked with 3D printers and laser cutters. There’s a permanent maker lab at the main library, and rotating labs that tour the smaller branches.
« The city has had a longstanding, roll-up-your-sleeves, problem-solving mentality, » said Erika Poethig of the Urban Institute, which specializes in social and economic policy research. « The maker labs are a concept of what libraries are in the 21st century. »
In addition to the maker labs, which offer demonstrations and workshops, there are Finch Robots available for check out. Shaped like stingrays, they teach kids about computer science.
US Troops Found Huge Caches Of Chemical Weapons In Iraq — And The Pentagon Tried To Keep It A Secret
Numerous US troops found and were exposed to chemical weapons while serving in Iraq after the 2003 invasion of the country, and they were plagued by not only the terrible aftereffects but also by substandard medical care and little recognition after the military attempted to keep the discovery of the munitions a secret.
In a long exposé highlighting the « secret US casualties » posted Tuesday evening by The New York Times, journalist C.J. Chivers brings to light what has been suppressed for years by military officials. Between 2004 and 2010, according to The Times, troops found thousands of rusty, corroded chemical munitions throughout Iraq, though all were manufactured before 1991.
« I love it when I hear, ‘Oh there weren’t any chemical weapons in Iraq,' » former Army Sgt. Jarrod L. Taylor told Chivers. « There were plenty. »
In the runup to the Iraq war in March 2003, the Bush administration made the case that Saddam Hussein was actively working to build and obtain weapons of mass destruction. These included claims of building biological weapons, chemical weapons, and nuclear weapons. The Times report, while revealing that Hussein did in fact have chemical munitions, notes that all were made before the 1991 Gulf War, and quite embarrassingly, often with US help.
U.S. encouraged by progress with Japan on Pacific trade pact, but ‘tough’ issues remain
(Reuters) – Progress in U.S. talks with Japan towards a Trans-Pacific Partnership trade pact is encouraging, but difficult issues remain, the acting deputy U.S. trade representative said on Wednesday.
Hopes of sealing the deal this year took a blow last month, when talks between the two nations seen as key to concluding the ambitious 12-nation trade pact hit a snag, with each side blaming the other for a stalemate over farm exports.
The United States insists that Japan lower barriers to agricultural imports, but Japan wants to protect sensitive products, including pork, beef, dairy and sugar.
« We were encouraged by the progress we made this week during our negotiations, but we need to underscore that the issues before us are tough, » Wendy Cutler told reporters at Japan’s foreign ministry, following four days of talks with Japan’s deputy chief negotiator, Hiroshi Oe.
« Our hope is that … Japanese negotiators will be bold.”
Why Americans Can’t Answer the Most Basic Retirement Question
Workers are confused by the unknowns of retirement planning. No wonder so few are trying to do it.
This Little-Known Social Security Strategy Can Boost Your Retirement Income
Here’s the Least Understood Cost of a 401(k) Loan
Planning for retirement is the most difficult part of managing your money—and it’s getting tougher, new research shows. The findings come even as rising markets have buoyed retirement savings accounts, and vast resources have been poured into things like financial education and simplified investment choices meant to ease the planning process.
This Comic Perfectly Captures How Feminism Helps Everyone Huffington Post
Some 64% of households at least five years from retirement are having difficulty with retirement planning, according to a study from Hearts and Wallets, a financial research firm. That’s up from 54% of households two years ago and 50% in 2010. Americans rate retirement planning as the most difficult of 24 financial tasks presented in the study.
How can this be? Jobs and wages have been slowly improving. Stocks have doubled from their lows, even after the recent market tumble. The housing market is rebounding. Online tools and instruction through 401(k) plans have greatly improved. We have one-decision target-date mutual funds that make asset allocation a breeze. Yet retirement planning is perceived as more difficult.
Jeb Bush’s family on presidential race: ‘My wife is supportive’
Jeb Bush is locking up the first votes he needs to run for president — from his family.
In an interview with the Associated Press, the former Florida governor didn’t give away anything about his plans for 2016. But he indicated Barbara Bush has come around some since saying she hoped her son wouldn’t run and proclaiming “we’ve had enough Bushes” in the White House.
“She just believes that it’s something that she doesn’t want my family to go through, although she’s changed her mind on that,” Jeb Bush said about his mother’s evolution. “So I’m marking her down to ‘neutral, trending in a different direction’ than she was.”
As for his wife, Columba, who doesn’t like the spotlight, Jeb Bush told the Associated Press:
“My wife is supportive, but that doesn’t mean that I don’t understand the challenges that this brings. This is ultimately my decision with as much consideration as I can to take into account the people that I really love.”
Europe News
EU is suffering from the combination of negative general sentiment (Ebola, ISIL etc.) and the negative press conducted by both populists when Russian media provides very good argument to drive the tensions between creditors and debtors higher. But the trend in EU continue to be supportive and as we were indicating the more markets will recognise the short term risk of US midterms elections, the more constructive they’ll become on EU and EUR. Markets were upset yesterday because Greece may postpone exiting from the program. The glass half full part of this story is that Greece, a country which once was considered to be doomed with the only hope for it is to become 2001 Argentina (according to some Nobel Prize laureates), is considering the idea of normalisation 5 years after its program. That’s in itself a strong argument to look at the glass half full.
Br-exit: Knowing that EU is changing its narrative, UKIP call for an early Br-exit vote doesn’t come as a surprise. Actually, we were expecting it to come earlier because the populist are likely to loose the supports they are having now. Populists parties are using investment advisory businesses to spread their mistrust. A recent study conducted by the AMF (France SEC), showed that 9 web-traders over 10 are loosing money when investing in FX. This is mainly due to the fact that 9 over 10 are investing like they vote: buy Gold, USD and sell EUR because it’s doomed (this is their beliefs not ours). By better regulating the internet retail investment sector, we are likely to see less spread of mistrust. These internet retail websites are widely spreading mistrust and advising ‘moms and pops’ to make easy money when the doom scenario will come. Again our legal have forbidden us from spreading some website adds (because they consider these are non respecting SEC and other regulations). These attract their “victims” by claiming making $8,000 a month by becoming a trader. The 9 over 10 are usually exposed to the next big splash in the markets. This is exactly how our research have found ISIL portfolio to be invested. While the first is betting that our institutions are rotten to the core and are listing to the doom and gloom widely spread, the former is speaking its own books. No one can be held accountable for making wrong investment decisions. However, by stressing the losses many individual investors are likely to change their strategy and diversify their views. This financial market war is likely to leave only those which bet on ISIL success largely exposed to the doom and gloom scenario.
While EU-skeptics groups continue to do well in the polls, EU is heading to a grand bargain which would clear the way to regain public support for the EU project. Germany’s FinMin Schauble indicated that Germany’s response to a “clear weakening” of the economy will be a shift in public spending toward investments and away from government consumption. He said that Germany could be willing to increase EIB capital (a strategy designated Commissioner Moscovici seems to be open to during his weekend interview). Eurogroup has cleared the way to a shift toward growth agenda / pact. Furthermore, China Premier Li visit to Germany has conducted to the release of a guideline for bilateral corporation. Furthermore, EcoMin Macron hinted that France may be considering a change in U/E allowances (a reform we understood to be very high on Chancellor Merkel ask list to move for more EU integration). Furthermore, US and UK are considering joint model to deal with too big to fail (after ISDA agreed on a “big bang” deal to reduce systemic risk arising from derivatives). Finally, according to Reuters, Germany is trying to convince Turkey and Iran to join the fight against Islamic State (IS) militants, Foreign Minister Frank-Walter Steinmeier told a German newspaper. EU developments are in line with our constructive scenario for the region (a view which is not priced yet by markets).
Greek stocks went into a free fall after ratings agency Fitch issued a warning about its banks at a time when the country is already on the verge of a political crisis.
The benchmark stock index in Athens fell over 10% before recovering a little to close down 6.25% on Wednesday. Shares of Greek banks were among the hardest hit, with the National Bank of Greece (NBG) falling as much as 13% at one point.
The selloff came after Fitch said Greek banks remain fragile despite improving their balance sheets and showing progress on restructuring plans. The ratings agency said upcoming stress tests by the European Central Bank could show additional shortfalls because of problem loans at various banks, including National Bank of Greece, Piraeus, Eurobank and Alpha.
The warning comes in the midst of political uncertainty. The Greek government could face early elections in February if lawmakers cannot agree on a candidate for president soon.
There is also fears that Greece won’t be able to exit its bailout agreement with the International Monetary Fund ahead of schedule, as some officials had hoped.
RPT-Euro partners see Greece softening line on ending support
Oct 15 (Reuters) – Greece’s partners in the euro zone believe Athens is changing its mind about giving up on their financial help next year and might ask for a credit line to replace funds from the IMF.
Euro zone officials told Reuters that Greece seemed to be having second thoughts about a return to purely market funding after pressure from EU powers – and from investors who sold off Greek bonds this week. They also said Europeans were resisting a push by Athens to end borrowing from the IMF, which is unpopular in Greece and causing political problems.
« There is recognition on the Greek side that a total cut-off from the euro zone and the IMF programmes is not in their best interest, » one euro zone official said. Another EU official said a sharp rise in Greek debt yields had been a « reality check », while several officials said talks at an EU finance ministers meeting in Luxembourg this week had also helped change Greek minds. (Reporting by Jan Strupczewski; Editing by Alastair Macdonald and Susan Fenton)
Long-dormant concerns over Greece flare up, causing dramatic sell-off in stock, bond markets
ATHENS, Greece (AP) — After months out of the spotlight, Greece was back at the center of Europe’s financial troubles on Wednesday, when concerns over the stability of the government and its bailout program triggered a massive sell-off in stocks and bonds.
Greece’s main stock index closed 6.3 percent lower – having traded down as much as 9.8 percent lower earlier in the day. Following a 5.7 percent loss on Tuesday, that brings the index to its worst level in 14 months.
Yields on Greece’s 10-year bonds also rose sharply, to 7.73 percent – up 1.10 percentage points on the day, a sign investors are more worried about default.
Economist Megan Greene said investors were rattled by a combination of factors, with the sudden rise in Greece’s borrowing rates likely to hurt the country’s hopes of leaving its bailout program.
Views on Switzerland’s economic prospects sour in ZEW poll
Oct 15 (Reuters) – Expectations for Switzerland’s economy slumped in October as fears spread that euro zone weakness will spill over into the Alpine nation, a survey of investors by the ZEW economic research institute showed. The euro zone’s fortunes are front and centre for respondents in Switzerland’s ZEW survey, who sent the index spiralling to -30.7 points, compared with -7.7 in September. Results of the survey, conducted in conjunction with Swiss bank Credit Suisse, were published on Wednesday.
« The sharp 23-point drop from the previous month likely reflects concerns that euro zone contagion will spread to Switzerland’s economy, » the institute said in a statement.
UK unemployment rate falls to 6.0 per cent, employment growth slows
LONDON: Growth in employment in Britain was its slowest in more than a year in the three months to August even as the unemployment rate fell more than expected.
Official data also showed workers’ earnings edged up only slightly in the three months to August and still lagged far behind inflation.
The Bank of England is watching for signs of a pickup in labour costs as it considers when to start raising interest rates and its policymakers.
More two-way investment benefits China, Italy: Premier Li
ROME, Oct. 14 (Xinhua) — Visiting Chinese Premier Li Keqiang said here Tuesday that expanding mutual investment would benefit both China and Italy.
Li made the remarks when meeting with Italian President Giorgio Napolitano after he arrived in Rome for an official visit to Italy.
The premier said expanding two-way investment is a mutually beneficial choice.
With the two economies opening up to each other and becoming more integrated, Chinese investment in Italy has expanded in both depth and scope in recent years, he added.
While encouraging more Chinese investors to come to Italy, Li said the Chinese government also welcomes more Italian companies to do business in China.
He hoped that the two countries would also join hands in exploring the third-party markets.
Li said China and Italy, both heirs to great ancient civilizations, should enhance cultural and people-to-people exchanges, in a bid to lay a more solid foundation for the future development of bilateral relations.
Since the establishment of their diplomatic ties, he said, China and Italy have strived for all-round cooperation in politics, economics, culture and innovation, which benefited the two peoples.
British CPI down to five-year low
LONDON, Oct. 14 (Xinhua) — The Britain’s consumer prices index (CPI) fell to 1.2 percent in the year to September 2014, marking a five-year low, data from the Office for National Statistics (ONS) showed Tuesday.
The inflation rate fell from 1.5 percent in August. Falls in transport costs and prices for a range of recreational goods provided the largest contributions to the slowdown in the rate of inflation between August and September, said ONS.
Housing and household services accounted for a third of the rate of inflation in the year to September, said ONS. If falling food and motor fuel prices were excluded, the rate of inflation would be a third higher.
CPIH, an inflation gauge include consumer prices and owner occupier’s housing costs, increased 1.2 percent in the year to September 2014, down from 1.5 percent a month previous, data also showed.
September’s sharp fall in Britain consumer price inflation provides additional support to committee members of the Bank of England (BoE) arguing that there is no hurry to raise interest rates, said Samuel Tombs, senior British economist at Capital Economics.
China News
China: Continuing data out of China confirm that the country is soft landing while rebalancing. Labor statistics have been showing that the manufacturers have started to rebalance their activities away from labor intensive (an objective already stressed by the Chinese leadership). These are in line with the objective to rebalance the economy away from credit driven investment. “BHP Billiton has raised the stakes in the ongoing war of attrition in global iron ore with a plan to slash costs and lift production” confirms our view that commodity companies are starting to adapt to the new normal, while China is cutting the road to nowhere and excessive bureaucracy (China removes 160,000 phantom staff on payroll, China Today). Acknowledging that there is “phantom staff” out loud is an event for those who have been following China for years (this could have cost some China Today’s managers their jobs a couple of years ago).
Furthermore, the west is helping China to change it’s “narrative” from being anti-democracy (China has not gone back on its agreements with Britain over the future of Hong Kong, whose autonomy is far greater than what Britain expected three decades ago, a former aide to late British Prime Minister Margaret Thatcher has said.).
Furthermore, Premier Li is undertaking a state visit to EU. This is likely to bring more collaboration with the West, while China will be offering a back-door to Russia energy at a moment when : President Putin is challenged by plummeting oil prices and sanctions are making harder for the energy sector (finance projects and investments).
The government continues to fear that the economic rebalancing has not taken momentum yet although 1) labor intensive manufacturers are relocating in cheaper labor countries, 2) businesses are upgrading their business models [while becoming environmental friendly], 3) President Xi has conducted many trade – investment agreement with Neighbours (after Premier Li did the same in Africa) to secure investment projects which use Chinese manpower – engineers know-how in this domaine, 4) China is gaining more military presence and has fluxed it mussels – e.g. China “Top Gun” intercept by a US fighter jet -, 5) China has signed many RMB agreement which reinforce the currency usage and prepare its full liberalisation – after Free Trade Zones (FTZ) have proven to be a success -, 6) China has undertaken a genuine fight against bad governance and better regulation – many examples in our recent daily briefings of fight against corruption and bad governance-. We see in FinMin Lou Jiwei recent comment an indication that not only China wants to create a reserve currency it does want it to be strong when Chinese leaders perceive the heavy pressure place on USD by a category of investors to avoid debasing the currency through deficit financing – although we consider that this worry is misplaced –
Li focuses on ‘innovative’ projects
Premier suggests Beijing and Moscow move beyond ‘mere trading partnership’
Premier Li Keqiang called for « innovative cooperation » between China and Russia on large projects in areas such as research and development, manufacturing and marketing.
His comments on Tuesday followed agreement on deals worth $10 billion the day before.
« We’d like to see energy companies take stakes in enterprises from the other country, » Li said in an address at the opening ceremony of the Open Innovations forum.
Sino-Russian energy cooperation — which saw the signing of a $400 billion pact in May to transport natural gas from Russia to China — should « go beyond a mere trading partnership », the premier said.
He said China has substantial experience in high-speed railway manufacturing and maintenance and is willing to take part in the construction of high-speed rail lines and the upgrade of standard rail lines in Russia.
Also on Tuesday, while meeting Russian President Vladimir Putin, Li proposed that Beijing and Moscow beef up cooperation on major projects.
« China and Russia are highly complementary in economic cooperation, » Li told Putin, and he hopes trade will continue to increase, especially in energy, finance and high-speed rail cooperation.
China, EU vow to speed up investment treaty talks
MILAN, Oct. 15 (Xinhua) — Leaders of China and the European Union (EU) agreed Wednesday to put their investment treaty negotiation on a faster track so as to further cement bilateral economic ties.
The pledge was made when visiting Chinese Premier Li Keqiang met here with President of the European Council Herman Van Rompuy and European Commission President Jose Manuel Barroso.
Li is in Italy for an official visit, and will attend the 10th Asia-Europe Meeting summit to be held in the Italian city of Milan on Thursday and Friday.
China, Li noted, attaches great importance to its relations with the EU, which is China’s largest trade partner. « We are each other’s opportunities for development, » he added.
The two sides should implement the China-EU partnerships for peace, growth, reform and civilization, Li said.
They should also strengthen their all-round cooperation in such areas as economic and trade, energy, urbanization, interconnectivity, finance, science and technology, and people-to-people exchanges, he said.
The Chinese leader also expressed his hope that the two sides can respect each other, treat each other as equals, and address frictions and differences in a proper way through dialogues and negotiations, so as to ensure the healthy and stable development of bilateral relations.
« The prosperity of Europe benefits the development of the world, » Li stressed.
The European integration process is accelerating and the euro, as a major international currency, stays stable, which will play a positive role in promoting world multi-polarization and the diversification of international reserve currencies, he said.
China willing to further enhance mutual support with FAO: premier
ROME, Oct. 15 — Chinese Premier Li Keqiang pledged here Wednesday to further strengthen communication, coordination and mutual support with the UN food agency.
Li made the remarks when meeting Jose Graziano da Silva,director-general of the UN Food and Agriculture Organization (FAO).
He also called for the deepening of South-South agricultural cooperation and trilateral collaboration.
The Chinese leader spoke highly of the FAO’s role in safeguarding global food security, boosting international agricultural cooperation, and promoting poverty reduction across the globe.
To safeguard food security, individual countries need to take the issue of food and agriculture as a top priority, Li said, adding that concerted efforts of the international community are also required.
China, as the largest developing country, has already solved the problem of food and clothing, but still has an impoverished population of over 100 million, Li noted.` « We will exert our utmost efforts to eliminate poverty caused by hunger, and we are confident that we can feed the 1.3 billion Chinese people mainly with our own efforts, so as to make our contribution to global food security, » said the premier.
China sees tech cure for healthcare woes
HANGZHOU, China – Liu Chunming almost died after a car crash in July in Taihe, a remote county in China’s southeast Jiangxi province, but survived serious abdominal injuries thanks to specialist doctors who led his treatment from 1,000 kms away.
From a central « operations room » in the eastern city of Hangzhou, doctors diagnosed and directed treatment for the 48-year-old using live video feeds and software that shares patient scans and files to aid consultation.
My experience at a Chinese hospital
Liu’s case – one of a growing number of distance healthcare cases in China – reflects the rise in digital healthcare, or eHealth, to bridge the chasm between China’s developed health services in large cities and its grassroots rural care.
And that’s a multi-billion dollar opportunity for technology firms.
« I’m not sure what would have happened without the distance diagnosis technology, » Liu said in a phone interview from his village of Xiakeng in Taihe. He has since recovered.
China’s first spallation neutron device makes headway
BEIJING, Oct. 15 –The construction of the China Spallation Neutron Source (CSNS) makes continued progress as a crucial component finishes installation on Wednesday.
When completed in 2018, the CSNS, used to probe the microscopic structure of the microscopic world producing similar results as an x-ray, will be China’s largest scientific device.
The installation of the negative hydrogen ion source, the first accelerator which provides a high quality and stable particle beam, marks a new phase for the whole project, the Chinese Academy of Sciences (CAS) said in a statement.
As one of the first pieces of equipment, the negative hydrogen ion device will determine the performance and efficiency of the whole project, CAS said.
The whole device mainly consists of an H-linac and a proton rapid cycling synchrotron and is designed to accelerate proton beam pulses to strike a solid metal target to produce spallation neutrons.
The CSNS is the first of its kind in developing countries and projected to be operational in 2018, with a budget of 2.2 billion yuan (about 358 million U.S. dollars), according to the statement.
Australia News
Australia: Australia struggles with the labor statistics glitches. Treasurer Hockey offered the private sector to check the information and help to correct that data. While this information does not change drastically our view that the RBA will stay put (due to the fear of a housing bubble, which the central bank is dealing with through macro prudential tools). However, the glitches reduces the “view” in the market that countries such as China are manipulating their figures. While our work on macro eco data has pushed us to take the economic figures with a pinch of salt (due to the methodology which could create some issues), we do not side with camp mistrusting everything. However, we believe that the big data analytics is likely to help improve the accuracy and the frequency of the high frequency data. However, the statistic office may take time before undertaking the experiment.
Australia continues to be seen, by markets, as a derivative to the old Chinese model (i.e. commodity provider). This view explains the high beta between Australian assets and commodity prices (or China demand for commodities). Banks shares are suffering from the combination of the increase perception of increase in risks and additional macro prudential constants to curb housing prices frothiness. Small business defined the “goldilock range” for AUDUSD to be [.90-.94]. This level is much higher than RBA own assessment (based on PPP models). We have been criticising PPP models because they do not factor any structural changes.
These assume that neither China nor Australia are conducting their rebalancing agenda. We do believe that the current weaknesses offers genuine opportunity to benefit from the other drivers to the Australian economy which are not related to commodities. We see the current Australian Dollar weakness to continue at least until the USD start to weaken again when markets will realise that it has beaten too much on a quick rate normalisation. Meanwhile, from our previous daily briefing, we have gathered sufficient support to the view that the drivers of the Australian GDP are moving toward: 1) education, health and finance services provider to Asian neighbours, 2) innovation and digital sector, 3) energy resources export to Japan (the later contributes to our constructive view that the current negative Japan Energy Trade deficit will rebalance in the medium term – reducing Japanese Government bonds solvency risk – ).
Malaysia Airlines MH370 search company Immarsat cast doubts on plane’s location
THE satellite communications company central to the MH370 search has acknowledged there remains “significant uncertainty” about the final location of the Boeing 777.
As the underwater search for the missing Malaysia Airlines plane continues in the southern Indian Ocean, Inmarsat has published a report on the data analysis process in the Journal of Navigation.
The report goes into extraordinary detail about the satellite “handshakes” that took place between MH370 and satellite equipment and how that data was applied to try to map its path.
Using this information, the report says what is certain is that “the aircraft remained operational for at least seven hours after the loss of contact as the satellite terminal continued to transmit messages during this period”.
“It may further be deduced that the aircraft navigation system was operational since the terminal needs information on location and track to keep its antenna pointing towards the satellite,” said the report.
The main problem with the information was the large number of possible flight paths it suggested, which could only be refined so much.
Facebook and Apple offer $20,000 to freeze eggs for female staff: reports
Apple and Facebook are reportedly offering to pay up to $20,000 for female employees to freeze their reproductive eggs, in a bid to hold on to their best workers.
The companies are covering up to $20,000 for the procedure and annual storage costs, NBC said, citing sources at the Silicon Valley firms.
« We continue to expand our benefits for women, with a new extended maternity leave policy, along with cryopreservation and egg storage as part of our extensive support for infertility treatments, » Apple said in a statement.
Apple recently introduced new benefits including extended parental leave, while Facebook said it offers four months of paid leave for both new mothers and fathers.
« We want to empower women at Apple to do the best work of their lives as they care for loved ones and raise their families, » the tech giant said.
Egg-freezing ‘enlightened’
Tech companies offering to freeze women’s eggs represents another tool to allow women to plan their lives, and that can’t be a bad thing, writes Lauren Rosewarne.
Queried about the reports by AFP, Facebook and Apple declined to comment.
Whoops! Apple leaks iPad Mini 3 and iPad Air 2 details ahead of Thursday’s event
Apple seems to have inadvertently leaked details of new iPads that are expected to be announced Thursday.
An image published on Apple’s iPad User Guide page for iOS 8 on iTunes Wednesday reveals that the company may announce the iPad Mini 3 and an iPad Air 2.
Apple usually holds on tight to its product announcements, so the posting mistake is unusual for the company. The images show the iPads are similar in design to their predecessors and have the familiar iOS 8 interface.
The TouchID fingerprint sensor is one new feature revealed in the user guide. Otherwise, the images don’t share many details about the features. The tablets have iSight and FaceTime cameras, volume buttons and headset jacks. The iPad Mini 3 also has a nano-SIM slot for mobile broadband connectivity.
Japan News
Japan: inflation softening along with economic downgrade was widely expected as a result of the 1st VAT hike (cf our strategic note Dec 26th 2013). We see BoJ to keep the bazooka of QQE-2 un-tested until the JPY excessive depreciation and JGB solvency risk came down * investors are still short JGB expecting a Japan crisis *. The 2nd VAT hike will require some stabilisation at the current levels, though we expect that PM Abe will undertake the 2nd hike in steps, because BoJ is unlikely to be sufficiently confident to move ahead with more QQE while JPY is accelerating its depreciation. PM Abe voiced concerned over the JPY rapid depreciation, as he pointed (rightly in our opinion) to the increase in energy cost, which deteriorate further the energy trade deficit – and increase the risk of JGB solvency -. The Prime Minister confirmed in his Diet address to pursue Abenomics 3rd arrow. Japan is said to resume discussion with US on TPP, while energy sector is heading toward energy transition away from Nuxe. Physics Nobel price attribution to energy efficient and environmental friendly technology is a game changer because it does support the view that the Win-Win scenario is feasible, if only the consensus stop being pessimistic for no reason.
Furthermore, GPIF delayed its asset allocation review. This is positive because it will calm down markets nervousness that GPIF will shift over-night its JGB holding and would create a market fixed income crash. We see the current development in line with our constructive scenario.
However, BoJ might do some adjustment to its monetary program but nothing excessive. The news flow out of this weekend G20 meeting shows that the global community is gently pressing the government and the BoJ to pursue structural reforms, economic rebalancing, solvency improvement (through VAT 2nd hike commitment) and adequate monetary policy (not too hot – to avoid a crisis – not too cool – to avoid derailing the on-going portfolio rebalancing approach -). Japan continues to face heavy public pressure to rebalance its energy reliance to nuclear. While we believe that Japan will continue to press for reopening nuclear plants (when Nuclear Watchdog gives his green light), the medium to long term trend is that Japan will use Trade negotiation with neighbours to secure new energy sources while using this pressure to deregulate and move forward with Abenomics 3rd arrow (please see our Japan update for more on our views). We are not surprise by the fact that Russian news media are reporting the pushback to reopening nuclear plans, ahead of Japan-Russian talks (about sanctions, energy agreement, and disputed territories).
As China, Japan, and South Korea heads toward a constructive talks (as we were reporting in our previous daily briefings) and Japan and North Korea are heading toward a solution on Japanese civilians abduction, North Korea leaders close to Kim Jong Un held last weekend high level talks with South Korea minister of reunification. This indicates that the scenario of an unified Korea is advancing. We have been considering that the reunification will ultimately take place but it requires normalised relation amongst the 3 important players: China, Japan, South Korea.
Russia proposes building natural gas pipeline to Japan -Nikkei
Oct 15 (Reuters) – Russia has proposed to Tokyo building a natural gas pipeline connecting fields in its far east with northern Japan, the Nikkei newspaper reported on Wednesday.
The construction of a gas pipeline between the two countries, which has been mooted for decades, would face many obstacles, including a dispute over islands taken by Russian forces at the end of World War II that has prevented Moscow and Tokyo from signing a formal peace treaty.
The plan to build a pipeline between Sakhalin and the northern Japanese island of Hokkaido was presented to Japan last month by Russia, the Nikkei reported, citing diplomatic sources it did not identify.
An official in Japan’s Ministry of Economy, Trade and Industry involved in gas and oil denied Tokyo had received an offer from Russia, when contacted by Reuters. He declined to be identified due to the sensitivity of the matter.
Obama, Japan PM discuss TPP trade deal, Ebola by phone – Jiji
TOKYO (Reuters) – U.S. President Barack Obama and Japanese Prime Minister Shinzo Abe discussed stalled trade talks and the Ebola virus epidemic in a telephone conversation on Wednesday morning Tokyo time, Jiji news agency reported.
A Japanese official had earlier confirmed that the two leaders would talk by phone.
The latest outbreak of Ebola, which causes fever and bleeding, has already killed more than 4,000 people, mostly in West Africa, and global concern is growing about the virus spreading.
Obama was set to hold a video conference on Wednesday with British, French, German and Italian leaders to discuss Ebola and other international issues, the White House said.
Japan has had no Ebola cases, while in the United States, a Liberian man died from the disease and a nurse who contracted it from him was said to be « in good condition » on Tuesday.
U.S.-Japan trade talks, vital to concluding a 12-nation Trans-Pacific Partnership (TPP) pact, stalled at talks in Washington last month, with each side blaming the other for a stalemate over tariffs on farm products.
Abe, Obama agree on global effort against Ebola
Japanese Prime Minister Shinzo Abe and US President Barack Obama have agreed on the need for their countries and the rest of the international community to work together to tackle the Ebola epidemic.
Obama initiated a 25-minute telephone conversation with Abe on Wednesday morning, Japan time. The 2 leaders agreed that Ebola poses a threat to international peace and security, and requires a concerted effort to prevent it from spreading further.
Japan Display to consolidate smartphone panel output
TOKYO — Japan Display will close a Saitama Prefecture factory making LCD panels for smartphones to consolidate production into a more efficient plant also in the greater Tokyo area, the company said Wednesday.
The company decided to shut down the Fukaya plant in April 2016 as it struggles to increase shipments to Chinese smartphone makers.
The plant closure will result in 7 billion yen ($64.6 million) in extraordinary losses this fiscal year. Falling prices of panels supplied to Chinese manufacturers have also squeezed profits. As a result, the company now expects a net loss of 10 billion yen, a reversal from its earlier forecast for a 26.8 billion yen profit.
Ball in Japan’s court for Xi Jinping-Shinzo Abe talks: China envoy
TOKYO: There is « a significant opportunity » for a first meeting between the Chinese and Japanese leaders at a regional gathering near Beijing next month, but the ball is in Tokyo’s court, China’s envoy to Japan said Wednesday.
After almost two years of high tensions, Japanese Prime Minister Shinzo Abe has wasted no opportunity in recent weeks to talk up his chances of meeting President Xi Jinping on the sidelines of an APEC (Asia Pacific Economic Co-operation) summit.
Observers say the strategy is intended to bounce the Chinese president into a summit, or into a public snub that allows Japan to paint itself as the aggrieved party in a gathering PR war.
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