http://www.zerohedge.com/fullrss2.xml/article/article/%22unambiguously%20bad%22 en Frontrunning: July 29 http://www.zerohedge.com/news/2016-07-29/frontrunning-july-29 <ul> <li>Yen, bond yields rise as Bank of Japan action underwhelms (<a href="http://www.reuters.com/article/us-global-markets-idUSKCN109027">Reuters</a>); Bank of Japan Takes Modest Easing Action (<a href="http://on.wsj.com/2a3Lgyd">WSJ</a>)</li> <li>Hong Kong shares end lower as BOJ disappointment sweeps Asia (<a href="http://www.reuters.com/article/china-stocks-hongkong-close-idUSZZN2NSL00">Reuters</a>)</li> <li>Accepting White House nomination, Clinton offers 'clear-eyed' vision (<a href="http://www.reuters.com/article/us-usa-election-idUSKCN105101">Reuters</a>)</li> <li>Two Conventions, Two Distinct World Views (<a href="http://www.wsj.com/articles/how-and-how-well-democrats-tackled-convention-challenge-1469743455">WSJ</a>)</li> <li>Democrats Emphasize American Exceptionalism at Convention (<a href="http://www.bloomberg.com/politics/articles/2016-07-29/democrats-emphasize-american-exceptionalism-at-convention">BBG</a>)</li> <li>Clinton’s Image Among Democrats at a Historic Low (<a href="http://blogs.wsj.com/washwire/2016/07/28/clintons-negative-image-among-democrats-at-a-historic-high/">WSJ</a>)</li> <li>The Number of Black C-Suite Executives Has Shrunk Under Obama (<a href="http://www.bloomberg.com/news/articles/2016-07-29/black-americans-in-the-c-suite-a-look-at-the-obama-era-declines">BBG</a>)</li> <li>Global funds cut share holdings to five-year lows as Brexit bites (<a href="http://www.reuters.com/article/us-funds-poll-global-idUSKCN109187">Reuters</a>)</li> <li>Here's a Reason Baby Boomers Will Curb U.S. Growth this Decade (<a href="http://www.bloomberg.com/news/articles/2016-07-29/here-s-a-reason-baby-boomers-will-curb-u-s-growth-this-decade">BBG</a>)</li> <li>Facebook May Owe Billions More in Taxes (<a href="http://www.wsj.com/articles/facebook-gets-tax-notice-over-transfer-of-assets-overseas-1469750400">WSJ</a>)</li> <li>Chinese Banks With Global Dreams Eye Middle East Mega Bonds (<a href="http://www.bloomberg.com/news/articles/2016-07-28/chinese-bankers-with-global-ambitions-eye-middle-east-mega-bonds">BBG</a>)</li> <li>The year of 'Neither': Why Reuters/Ipsos is tweaking its U.S. presidential poll (<a href="http://www.reuters.com/article/us-usa-election-poll-reutersipsos-idUSKCN10910T">Reuters</a>)</li> <li>Monte dei Paschi close to finalizing cash call guarantors (<a href="http://www.reuters.com/article/us-eurozone-banks-montedeipaschi-consort-idUSKCN10919N?il=0">Reuters</a>)</li> <li>French second quarter growth unexpectedly grinds to a halt on weak consumer spending (<a href="http://www.reuters.com/article/us-eurozone-economy-france-idUSKCN1090FN?il=0">Reuters</a>)</li> <li>Speed Traders Invade Sleepy Corner of England, Locals Bristle (<a href="http://www.bloomberg.com/news/articles/2016-07-28/speed-traders-invade-sleepy-corner-of-england-and-locals-bristle">BBG</a>)</li> <li>Phillips 66 profit halves on gasoline glut (<a href="http://www.reuters.com/article/us-phillips-66-results-idUSKCN10918R">Reuters</a>)</li> <li>Deutsche Bank Said to Revive Trading of Credit Options in Europe (<a href="http://www.bloomberg.com/news/articles/2016-07-29/deutsche-bank-said-to-revive-trading-of-credit-options-in-europe-ir7l2qu3">BBG</a>)</li> <li>U.S. military prepares for biggest Okinawa land return since 1972 (<a href="http://www.reuters.com/article/us-japan-usa-okinawa-idUSKCN1090KY">Reuters</a>)</li> <li>Yellen Chases Elusive U.S. Wage Gains With Georgia On Her Mind (<a href="http://www.bloomberg.com/news/articles/2016-07-29/yellen-chases-elusive-u-s-wage-gains-with-georgia-on-her-mind">BBG</a>)</li> <li>NextEra Agrees to Buy Oncor in Deal Valued at $18.4 Billion (<a href="http://www.bloomberg.com/news/articles/2016-07-29/nextera-agrees-to-buy-oncor-in-takeover-valued-at-18-4-billion">BBG</a>)</li> <li>Credit Suisse to create U.S. banking business for billionaire (<a href="http://www.reuters.com/article/us-credit-suisse-gp-wealth-idUSKCN1091B0?il=0">Reuters</a>)</li> </ul> <p>&nbsp;</p> <p><strong>Overnight Media Digest</strong></p> <p><em><span style="text-decoration: underline;">WSJ</span></em></p> <p>- The Bank of Japan announced an extra dose of monetary stimulus Friday, joining fresh efforts by Prime Minister Shinzo Abe to reboot the economy. The central bank said it would buy 6 trillion yen ($58.11 billion) worth of exchange-traded funds annually, up from 3.3 trillion yen ($31.96 billion) previously, in an attempt to stoke inflation and economic growth. It said it would leave its asset-purchase target at 80 trillion yen ($774.74 billion) a year. <a href="http://on.wsj.com/2a3Lgyd" title="http://on.wsj.com/2a3Lgyd">http://on.wsj.com/2a3Lgyd</a></p> <p>- Oracle Corp agreed to pay $9.3 billion for a cloud-computing pioneer that counts Larry Ellison as a major investor, using its second-largest acquisition to try to catch up in a key area where it has lagged. Oracle said it is paying $109 a share in cash for NetSuite Inc, a 19 percent premium to the stock's closing price Wednesday. <a href="http://on.wsj.com/2awSj1F" title="http://on.wsj.com/2awSj1F">http://on.wsj.com/2awSj1F</a></p> <p>- Microsoft Corp plans to lay off 2,850 employees, adding to previously announced job cuts as it retools its sales operations and dismantles its mobile phone hardware business. The software giant disclosed the latest cuts in a Thursday filing to the U.S. Securities and Exchange Commission. <a href="http://on.wsj.com/2aBUI9I" title="http://on.wsj.com/2aBUI9I">http://on.wsj.com/2aBUI9I</a></p> <p>- A Massachusetts judge denied a motion to dismiss a lawsuit brought by Viacom Inc Chairman and Chief Executive Philippe Dauman and board member George Abrams that seeks to reinstate the pair after they were ousted from the board of National Amusements Inc, the company through which Redstone controls Viacom and CBS Corp. They also want to be reinstated to a trust that was set up to oversee Redstone's holdings upon his death or incapacitation. <a href="http://on.wsj.com/2akNUM3" title="http://on.wsj.com/2akNUM3">http://on.wsj.com/2akNUM3</a></p> <p>- Facebook Inc said it could be on the hook for $3 billion to $5 billion in additional taxes as a result of an Internal Revenue Service investigation into how the social network transferred assets overseas. The IRS had issued a "statutory notice of deficiency" a day earlier saying Facebook owes more taxes for 2010. The July 27 notice came the same day that Facebook said second-quarter profit nearly tripled to $2.06 billion. <a href="http://on.wsj.com/2aBYrny" title="http://on.wsj.com/2aBYrny">http://on.wsj.com/2aBYrny</a></p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">FT</span></em></p> <p>* The Hinkley Point nuclear plant saw further delays on Thursday night as the UK government decided to hold another round of reviews. This delay came in spite of the nuclear plant getting the go-ahead from EDF, the project's French developer.</p> <p>* German Chancellor Angela Merkel has maintained her stance on her refugee policy even after the country saw terror attacks in the cities of Würzburg and Ansbach. She said the asylum seekers responsible for the attacks had "shamed the country that welcomed them" but that those fleeing from war-torn countries had a right to be protected.</p> <p>* Lloyds Banking Group Plc said on Thursday it would accelerate its cost-cutting plan to help offset a more testing economic environment and a likely drop in demand for credit caused by Britain's vote to quit the European Union. </p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">NYT</span></em></p> <p>- Google's parent, Alphabet's second-quarter revenue rose to $21.5 billion, about $750 million more than analysts were predicting and a 21 percent jump from a year earlier. Earnings per share after excluding certain items was $8.42, or 39 cents more than forecasts. Alphabet's shares immediately rose 4 percent after hours. <a href="http://nyti.ms/2av9tLF" title="http://nyti.ms/2av9tLF">http://nyti.ms/2av9tLF</a></p> <p>- The legal battle over whether Sumner Redstone has the mental capacity to make decisions about his $40 billion media empire, which includes Viacom and CBS, is scheduled to go to trial in October in a Massachusetts court house. In a ruling on Thursday, a court rejected motion by Redstone's lawyers to dismiss the lawsuit, but said there was no need to conduct an immediate mental and physical exam of him. <a href="http://nyti.ms/2av9Rdd" title="http://nyti.ms/2av9Rdd">http://nyti.ms/2av9Rdd</a></p> <p>- Oracle is buying NetSuite, a cloud company in which he controls a 45 percent stake, for $9.3 billion, a whopping 44 percent premium to where the shares were trading before news reports first mentioned a possible deal. <a href="http://nyti.ms/2avai7s" title="http://nyti.ms/2avai7s">http://nyti.ms/2avai7s</a></p> <p>- The French utility EDF said that its board had approved a plan to build the first nuclear power plant in Britain in a generation. The project for the state-controlled utility has long been contentious and critics have slammed it as an expensive and risky route to securing emission-free electricity. <a href="http://nyti.ms/2avaB28" title="http://nyti.ms/2avaB28">http://nyti.ms/2avaB28</a></p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Canada</span></em></p> <p>THE GLOBE AND MAIL</p> <p>** The pipeline and power company TransCanada Corp says it aims to have its new, discounted tolling system to help natural gas producers in Western Canada compete with abundant U.S. shale gas in place in the fall of 2017. (<a href="http://bit.ly/2aD4sjS" title="http://bit.ly/2aD4sjS">http://bit.ly/2aD4sjS</a>)</p> <p>** Canada's largest oil sands producers suffered heavy losses in the second quarter, but say two years of deep cost cutting has put them in a position to consider expansion. (<a href="http://bit.ly/2amzQl0" title="http://bit.ly/2amzQl0">http://bit.ly/2amzQl0</a>)</p> <p>** The soaring price of gold has failed to ignite expansion frenzy at Canada's largest gold miners. Instead, the latest round of earnings reports show an industry intent on reducing debt and rebuilding confidence. Goldcorp Inc said on Thursday that it was installing a new accounting system, cutting staff at head and regional offices by a third and selling mines. (<a href="http://bit.ly/2aOYKee" title="http://bit.ly/2aOYKee">http://bit.ly/2aOYKee</a>)</p> <p>NATIONAL POST</p> <p>** Canadian National Railway Co is taking advantage of low interest rates to raise $650 million in new debt. The company announced Thursday that the 3.2 percent notes, due in 2046, will be used to refinance outstanding debt and to buy back more shares. (<a href="http://bit.ly/2aBc21W" title="http://bit.ly/2aBc21W">http://bit.ly/2aBc21W</a>)</p> <p>** The Canadian Radio-television and Telecommunications Commission has launched a review of its three-year-old wireless code, the set of rules that effectively killed three-year cellphone contracts and put an end to exorbitant roaming fees. The review will culminate with a public hearing in February. (<a href="http://bit.ly/2aBcHAi" title="http://bit.ly/2aBcHAi">http://bit.ly/2aBcHAi</a>)</p> <p>** Potash Corp of Saskatchewan Inc cut its earnings forecast for the fifth time in six quarters on Thursday as its realized potash prices plunged to stunning lows. (<a href="http://bit.ly/2aD7mFi" title="http://bit.ly/2aD7mFi">http://bit.ly/2aD7mFi</a>) </p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Britain</span></em></p> <p>The Times</p> <p>Almost 800,000 savers have cashed out more than 6 billion pounds ($7.90 billion) from their retirement pots since the Treasury introduced new pension freedoms 15 months ago, official figures reveal. <a href="http://bit.ly/2auzv1J" title="http://bit.ly/2auzv1J">http://bit.ly/2auzv1J</a></p> <p>Millions of customers of Lloyds Banking Group Plc may not see the Bank of England's expected cut in interest rates next week passed on to them, after the bank said yesterday that it would consider its options in the wake of any move. <a href="http://bit.ly/2auzCuj" title="http://bit.ly/2auzCuj">http://bit.ly/2auzCuj</a></p> <p>The Guardian</p> <p>Britain's first new nuclear power station for a generation is in fresh doubt after the government delayed making a final decision on the 18 billion pounds Hinkley Point C, despite EDF SA's directors voting to start work on the project. <a href="http://bit.ly/2auzLOl" title="http://bit.ly/2auzLOl">http://bit.ly/2auzLOl</a></p> <p>Tesco Plc is promising to take some of the pain out of the weekly grocery shop for parents by offering free fruit for children to munch on. <a href="http://bit.ly/2auBSSn" title="http://bit.ly/2auBSSn">http://bit.ly/2auBSSn</a></p> <p>The Telegraph</p> <p>The International Monetary Fund's top staff misled their own board, made a series of calamitous misjudgments in Greece, became euphoric cheerleaders for the euro project, ignored warning signs of impending crisis, and collectively failed to grasp an elemental concept of currency theory. This is the lacerating verdict of the IMF's top watchdog on the Fund's tangled political role in the eurozone debt crisis. <a href="http://bit.ly/2auCcjM" title="http://bit.ly/2auCcjM">http://bit.ly/2auCcjM</a></p> <p>BT Group Plc's Chief Executive Gavin Patterson has said EU regulations mean it cannot be forced to break up with Openreach, the broadband network it controls, as it unveiled a boost in sales and profits. <a href="http://bit.ly/2auBrY8" title="http://bit.ly/2auBrY8">http://bit.ly/2auBrY8</a></p> <p>Sky News</p> <p>Ryanair Holdings Plc has announced plans to make it mandatory for adults travelling with children under 12 to buy reserved seating. <a href="http://bit.ly/2auB8wg" title="http://bit.ly/2auB8wg">http://bit.ly/2auB8wg</a></p> <p>The Independent</p> <p>UK Consumer confidence has fallen at its fastest pace in 26 years in the wake of Brexit according to the latest GfK survey. An early "Brexit special" reading from GfK in the wake of the June 23 poll pointed to the biggest slump in confidence since 1994 and was one of the first data signals of the likely negative economic toll of the vote. <a href="http://ind.pn/2auAU8y" title="http://ind.pn/2auAU8y">http://ind.pn/2auAU8y</a> </p> <p>&nbsp;</p> http://www.zerohedge.com/news/2016-07-29/frontrunning-july-29#comments After Hours Bank of Japan Bond Consumer Confidence Credit Suisse Deutsche Bank European Union Eurozone Greece Hong Kong Japan Lloyds Middle East National Amusements Natural Gas Nomination Nuclear Power Redstone Reuters Securities and Exchange Commission Viacom White House Yen Fri, 29 Jul 2016 11:46:58 +0000 Tyler Durden 567672 at http://www.zerohedge.com Trump Unloads On Hillary Speech Attacking His "Dark" Vision For America http://www.zerohedge.com/news/2016-07-29/trump-unloads-hillary-speech-attacking-his-dark-vision-america <p>In her climactic, nomination acceptance speech concluding the Democratic National Convention, as expected Hillary Clinton delivered remarks (which according to some were upstaged by previous speeches by Michelle Obama and the president) that focused on themes of "optimism" and "unity", while ripping her challenger, Donald Trump, and emphasizing his "dark" vision of America. </p> <blockquote class="twitter-video"><p dir="ltr" lang="en">.<a href="https://twitter.com/HillaryClinton">@HillaryClinton</a> accepts Democratic nomination for president, becoming first female nominee of major political party <a href="https://t.co/ghKFLtIHoK">https://t.co/ghKFLtIHoK</a></p> <p>— ABC News Politics (@ABCPolitics) <a href="https://twitter.com/ABCPolitics/status/758856640183402497">July 29, 2016</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>Much of Clinton’s address focused on the choice voters face between the former secretary of State and Trump, who Clinton said threatened to take the country from “morning in America to midnight in America.” "Bonds of trust and respect are fraying," she said. "We have to decide whether we will all work together so we can all rise together."</p> <p>"A man you can bait with a tweet is not a man we can trust with nuclear weapons," Clinton continued her attack on Donald, making the case that he was unfit to occupy the Oval Office.&nbsp; "Just ask yourself: You really think Donald Trump has the temperament to be commander in chief?" Clinton said. "Donald Trump can't even handle the rough and tumble of a presidential campaign," she added.</p> <p>Her punchline phrase was that “America is once again at a moment of reckoning,” she warned, casing Trump’s policy goals as ushering in a dark view of the country. </p> <p>Clinton sought to portray her own leadership as being built on a vision of an optimistic present and future for the country that would be inclusive for all Americans.&nbsp;&nbsp; “We will not build a wall,” she said. “Instead we will build an economy where everyone who wants a good job can get one. And we will build a path to citizenship for millions of Americans who are already contributing.... We will not ban a religion, we will work with all Americans and allies to fight and defeat terrorism.”</p> <p>Stronger together is the theme of Clinton’s campaign, and she and other speakers repeatedly returned to it on Thursday evening as they sought to portray the former secretary of State as a more hopeful candidate than Trump, and one who could bring different people together instead of driving them apart. </p> <p>"He wants us to fear the future and to fear each other," she said.&nbsp; "He's taken the Republican Party a long way from 'morning in America' to midnight in America," Clinton said at the Democratic National Convention here, playing off former President Ronald Reagan's 1984 slogan. </p> <p>“Don’t let anyone tell you that our country is weak,” Clinton said. “We’re not. Don’t let anyone tell you we don’t have what it takes. We do."</p> <p>Considering that two thirds of Americans believe that the country is on the wrong course, this particular message may not resonante strongly with the independents whose votes she was trying to capture.</p> <p>As Clinton moves into the general election and the final 100 days of the campaign, a question of trust and likability looms over her campaign. And in her speech, Clinton sought to tell her story, acknowledging that as a public servant "the service part has always come easier to me than the public part.&nbsp; "I get it that some people just don't know what to make of me," she said. </p> <p>Her daughter Chelsea, who introduced her, also aimed to humanize her mother, regaling the crowd with tales about she loves FaceTiming with her granddaughter Charlotte. </p> <p>Still, it wasn't all unity when Clinton's opening remarks were greeted with a smattering of protests from Bernie Sanders holdouts.&nbsp; Dozens of people wearing bright neon-green shirts meant to represent Bernie Sanders held signs for Jill Stein, the Green Party candidate.&nbsp;&nbsp; As Sanders supporters shouted interruptions at the beginning of her speech, she said the Democratic platform represented Sanders’s beliefs, and argued it was time for all Democrats to get behind them. </p> <p>“That is the only way we can turn your progressive platform into real change for America,” she said.&nbsp; “We wrote it together. Now let’s go out an make it happen together.” </p> <p>On television, the interruptions were less noticeable, and may at times even have made the reception to Clinton’s speech seem more raucous. Chants of “Hillary, Hillary” from her own supporters repeatedly drowned out the protests. </p> <p>* * * </p> <p>And then there were Trump's reaction.</p> <p>The Republican candidate attacked Hilary Clinton with a rapid-fire string of tweets moments after her speech at the Democratic National Convention Thursday night.&nbsp; "Hillary's refusal to mention radical Islam, as she pushes a 550% increase in refugees, is more proof that she is unfit to lead the country," Trump tweeted minutes after Clinton wrapped up her speech accepting the Democratic presidential nomination. </p> <p>He repeatedly hit Clinton for being soft on terror.&nbsp; The GOP nominee added that Americans’ "way of life is under threat by Radical Islam and Hillary Clinton cannot even bring herself to say the words."</p> <p>Trump also hit Clinton over her role in the Obama administration, saying, "Hillary's wars have unleashed destruction, terrorism and ISIS across the world" while emphasizing that Hillary is Wall Street's candidate: "Hillary will never reform Wall Street. She is owned by Wall Street."</p> <p>He continued his attack by focusing on the economy, saying the world would have corruption and&nbsp; "no borders, no jobs, no safety" under her administration.&nbsp;&nbsp; Trump’s senior policy adviser Stephen Miller echoed the businessman’s complaints, calling her speech “an insulting collection of clichés and recycled rhetoric.” "She spent the evening talking down to the American people she’s looked down on her whole life,” Miller added. “Hillary Clinton says America is stronger together. But in Hillary Clinton’s America, millions of people are left out in the cold.”</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Hillary's refusal to mention Radical Islam, as she pushes a 550% increase in refugees, is more proof that she is unfit to lead the country.</p> <p>— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/758871653547806724">July 29, 2016</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">Our way of life is under threat by Radical Islam and Hillary Clinton cannot even bring herself to say the words.</p> <p>— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/758872422028148740">July 29, 2016</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">Hillary will never reform Wall Street. She is owned by Wall Street!</p> <p>— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/758872873234681860">July 29, 2016</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">Hillary's vision is a borderless world where working people have no power, no jobs, no safety.</p> <p>— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/758873275044798464">July 29, 2016</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>We now look forward to the next set of post-DNC polls to see if Hillary's message resonated with the broader public and received a comparable bounce to her approval ratings as did Trump, and more importantly, we eagerly await the first debate between the two candidates, which is scheduled in to take place in roughly two months.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="680" height="417" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/clinton%20dnc.jpg?1469791357" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-29/trump-unloads-hillary-speech-attacking-his-dark-vision-america#comments ABC News Bernie Sanders Corruption Donald Trump Nomination Obama Administration ratings Fri, 29 Jul 2016 11:24:00 +0000 Tyler Durden 567669 at http://www.zerohedge.com IMF Studies Sovereign Debt Restructurings, Admits Its Policy Was Responsible For Greek Depression http://www.zerohedge.com/news/2016-07-29/imf-studies-sovereign-debt-restructurings-admits-its-policy-was-responsible-greek-de <p>It appears causing an economic depression and significantly<a href="http://www.zerohedge.com/news/2016-06-16/austerity-kills-bank-greece-admits-greeks-health-deteriorating-life-expectancy-shrin"> deteriorating life expectancy in Greece</a> is not enough for the IMF.</p> <p>In a <a href="https://www.imf.org/external/pubs/ft/wp/2016/wp16147.pdf?utm_campaign=Hutchins+Center&amp;utm_source=hs_email&amp;utm_medium=email&amp;utm_content=32185694">paper published</a> this month, the IMF seeks to study the relationship between GDP and sovereign debt restructuring using data from 1970-2010. Its main conclusion may be shocking: &ldquo;<strong>the central finding of this paper is that sovereign debt restructurings with external private creditors can affect per capita GDP growth performance in the years after debt restructuring</strong>.&ldquo; And these are the people in charge of advising nations on managing their economy&hellip;</p> <p><a href="http://zerohedge.com/sites/default/files/images/user5/imageroot/2016/07/21/IMF%20admission.jpg"><img alt="" src="http://zerohedge.com/sites/default/files/images/user5/imageroot/2016/07/21/IMF%20admission_0.jpg" style="width: 500px; height: 313px;" /></a></p> <p>The paper continues with the following insight &ldquo;we find that <strong>there are bad and good (or &ldquo;not so bad&rdquo;) debt restructurings for growth</strong>. <strong>Growth generally declines following a debt restructuring </strong>operation; <strong>however</strong>, <strong>restructurings that allow countries to exit a default spell (i.e., final restructurings) lead to significant improvements in growth </strong>performance in the aftermath of the debt operation, with the effect being persistent over time.</p> <p><strong>Final restructurings are good for growth because they reduce countries&rsquo; debt (in NPV terms), and the lower the post restructuring debt is, the better the post restructuring growth performance for any given level of debt relief</strong>.</p> <p>These results suggest that there is a difference between addressing debt sustainability and debt overhang issues.</p> <p>While <strong>final restructurings </strong>supposedly address immediate debt sustainability issues and allow a country to exit default, they <strong>are important for growth if they address countries&rsquo; debt overhang issues and leave the country with a relative low debt ratio</strong>. These results can help to inform the policy debate concerning what to expect from different forms of restructuring&rdquo;</p> <p>Two interesting questions arise from this paper in our opinion: 1) Why is the Greece restructuring (2012) excluded from the analysis, especially considering that it is the largest sovereign restructuring in history? 2) If indeed final restructurings are important for growth, why has the Troika (IMF, ECB, and European Commission) essentially condemned Greece to a vicious cycle of debt re-negotiations, austerity and unsustainable expectations?</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="619" height="387" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/IMF%20admission.jpg?1469790416" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-29/imf-studies-sovereign-debt-restructurings-admits-its-policy-was-responsible-greek-de#comments Creditors default Greece Sovereign Debt Fri, 29 Jul 2016 11:07:04 +0000 Tyler Durden 567666 at http://www.zerohedge.com Execs Flee GLD - The revolving door at the SPDR Gold Trust Sponsor http://www.zerohedge.com/news/2016-07-29/execs-flee-gld-revolving-door-spdr-gold-trust-sponsor <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">by Ronan Manly, <a href="https://www.bullionstar.com/">BullionStar</a></span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">A remarkable but little noticed development has occurred behind the scenes of the&nbsp;<a data-mce-="" href="http://www.spdrgoldshares.com/usa/key-information/" style="color: rgb(172, 4, 4);">SPDR Gold Trust (GLD</a>) over the last 3 years. This development concerns the very high level of executive staff turnover at World Gold Trust Services, the New York based &lsquo;Sponsor&rsquo; of the mammoth gold GLD gold-backed Exchange Traded Fund that is listed on the NYSE.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">For within the space of less than 3 years, World Gold Trust Services has gone through 4 Chief Executive Officers (CEOs) and 3 Chief Financial Officers (CFOs). By any standard this is a huge amount of senior executives moving through the roles, and would normally ring alarm bells in the corporate governance departments of major institutional investors. Perhaps it has caused concern among institutional investors of the SPDR Gold Trust (GLD), but if it has, it has gone unreported.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">New York based World Gold Trust Services (WGTS) LLC is a fully owned subsidiary of the London-based World Gold Council. WGTS is a&nbsp;<a data-mce-="" href="http://www.delawareregistry.org/world-gold-trust-services-llc" style="color: rgb(172, 4, 4);">Delaware registered</a>&nbsp;limited liability company (for-profit)&nbsp;<a data-mce-="" href="https://www.sec.gov/Archives/edgar/data/1222333/000095013603001202/file004.htm" style="color: rgb(172, 4, 4);">established in 2003</a>&nbsp;by the World Gold Council and run out of offices at 685 Third Avenue, in midtown Manhattan, New York.&nbsp;The World Gold Council (WGC) itself is a&nbsp;<a data-mce-="" href="https://beta.companieshouse.gov.uk/company/FC014324" style="color: rgb(172, 4, 4);">non-profit association registered in Geneva</a>&nbsp;under Swiss Civil Code Article 60. So the structure of the relationship is a non-profit organization, the World Gold Council, owning 100% of a for-profit company, World Gold Trust Services.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">In summary, here are the lists of CEOs and CFOs of World Gold Trust Services between 2013- 2016:</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Chief Executive Officers (CEOs) of WGTS</span></p> <ul style="margin-top: 16px; margin-bottom: 16px; margin-left: 0px; padding-left: 40px; list-style-type: square; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"> <li data-mce-style="padding-left: 30px;" style="padding-left: 30px;"><span style="font-size:12px;">Jason Toussaint: April 2009 &ndash; left July 2013</span></li> <li data-mce-style="padding-left: 30px;" style="padding-left: 30px;"><span style="font-size:12px;">Kevin Feldman: Appointed June 2013 &ndash; Resigned 31<span style="line-height: 0; position: relative; top: -0.5em;">st</span>&nbsp;July 2014</span></li> <li data-mce-style="padding-left: 30px;" style="padding-left: 30px;"><span style="font-size:12px;">Aram Shishmanian (acting): 31<span style="line-height: 0; position: relative; top: -0.5em;">st</span>&nbsp;July 2014 to 8 September 2014</span></li> <li data-mce-style="padding-left: 30px;" style="padding-left: 30px;"><span style="font-size:12px;">William Rhind :Appointed 8<span style="line-height: 0; position: relative; top: -0.5em;">th</span>&nbsp;Sept 2014 - Resigned &nbsp;9 February 2016</span></li> <li data-mce-style="padding-left: 30px;" style="padding-left: 30px;"><span style="font-size:12px;">Aram Shishmanian (appointed): 10 February 2016</span></li> </ul> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Chief Financial Officers (CFOs) of WGTS</span></p> <ul style="margin-top: 16px; margin-bottom: 16px; margin-left: 0px; padding-left: 40px; list-style-type: square; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"> <li data-mce-style="padding-left: 30px;" style="padding-left: 30px;"><span style="font-size:12px;">Robin Lee : H1 2010 - Left WGTS / WGC December 2014</span></li> <li data-mce-style="padding-left: 30px;" style="padding-left: 30px;"><span style="font-size:12px;">Adrian Pound: Appointed Oct 2013&nbsp; - Resigned 10 March 2015</span></li> <li data-mce-style="padding-left: 30px;" style="padding-left: 30px;"><span style="font-size:12px;">Samantha McDonald: Appointed March 2015</span></li> </ul> <h3 style="clear: both; font-family: Bitter, Georgia, serif; line-height: 1.3; font-size: 22px; margin-top: 22px; margin-bottom: 22px; color: rgb(20, 20, 18);"><span style="font-size:12px;"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user227218/imageroot/2016/07/08/Revolving%20Door.jpg" style="width: 300px; height: 391px;" /></span></h3> <h3 style="clear: both; font-family: Bitter, Georgia, serif; line-height: 1.3; font-size: 22px; margin-top: 22px; margin-bottom: 22px; color: rgb(20, 20, 18);"><span style="font-size:12px;">Last In First Out</span></h3> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">On 10th February 2016, the SPDR Gold Trust&nbsp;<a data-mce-="" href="https://www.sec.gov/Archives/edgar/data/1222333/000119312516457645/d138980d8k.htm" style="color: rgb(172, 4, 4);">filed a form 8-K</a>&nbsp;with the US Securities and Exchange Commission (SEC) informing the market that WGTS CEO&nbsp;<strong>William Rhind</strong>&nbsp;had resigned, effective 12 February. The filing stated that:</span></p> <p data-mce-style="padding-left: 30px;" style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px; padding-left: 30px;"><span style="font-size:12px;"><em>&quot;Mr.&nbsp;Rhind&rsquo;s resignation was a personal decision and was not as a result of any CEO or WGTS performance-related issue or any other matters related to the operations, policies or practices of the Trust.&quot;</em></span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">On the same day, the board of WGTS (about which more below) appointed&nbsp;Aram Shishmanian, CEO of the World Gold Council, as CEO of WGTS, meaning that Mr Shishmanian is now CEO of both entities:</span></p> <p data-mce-style="padding-left: 30px;" style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px; padding-left: 30px;"><span style="font-size:12px;">&nbsp;<em>&quot;On February&nbsp;10, 2016, the Board of Directors of WGTS appointed Aram Shishmanian, Executive Director of WGTS, as the Chief Executive Officer of WGTS.&quot;</em></span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">William Rhind had only been&nbsp;<a data-mce-="" href="http://www.gold.org/news-and-events/press-releases/world-gold-trust-services-appoints-william-rhind-chief-executive" style="color: rgb(172, 4, 4);">appointed</a>&nbsp;CEO of WGTS on 8 September 2014, and so was CEO for a relatively short period of 17 months. Rhind&#39;s departure looked to be sudden, since more than a month later in March 2016, the SEC was still&nbsp;<a data-mce-="" href="https://www.sec.gov/Archives/edgar/data/1222333/000000000016070231/filename1.pdf" style="color: rgb(172, 4, 4);">addressing a letter</a>&nbsp;to Mr Rhind even though he had departed.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Rewinding further, William Rhind had been&nbsp;<a data-mce-="" href="https://www.sec.gov/Archives/edgar/data/1222333/000119312514338027/d782799d8k.htm" style="color: rgb(172, 4, 4);">appointed</a>&nbsp;CEO of WGTS because the former CEO&nbsp;<strong>Kevin Feldman</strong>&nbsp;had himself resigned, on 31 July 2014, effective 15 August 2014. This too seemed to be a sudden departure because on 31 July 2014, the board had to make Aram Shishmanian &quot;Acting Chief Executive Officer&quot;, suggesting that the Board did not have the time to line up a successor or to run a search campaign. &nbsp;Shishmanian&#39;s Acting CEO position lasted nearly a month until Rhind&#39;s appointment in September 2014.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">In its form&nbsp;<a data-mce-="" href="https://www.sec.gov/Archives/edgar/data/1222333/000119312514291538/d768682d8k.htm" style="color: rgb(172, 4, 4);">8-K filing with the SEC detailing Kevin Feldman&#39;s resignation</a>, the SPDR Gold Trust statement says that:</span></p> <p data-mce-style="padding-left: 30px;" style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px; padding-left: 30px;"><span style="font-size:12px;"><em>&quot;Mr.&nbsp;Feldman&rsquo;s resignation was a personal decision and was not as a result of any CEO or WGTS performance-related issue or any other matters related to the operations, policies or practices of the Trust.&quot;</em></span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Kevin Feldman had only been&nbsp;<a data-mce-="" href="http://www.gold.org/news-and-events/press-releases/world-gold-council-appoints-kevin-feldman-managing-director-investment" style="color: rgb(172, 4, 4);">appointed as CEO of WGTS in late June 2013</a>&nbsp;when he joined&nbsp;the World Gold Council&#39;s Investment area as an external appointment. This means that when Feldman resigned as CEO of WGTS on 31 July 2014, he had been in that role for about a year only.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Jason Toussaint, the predecessor&nbsp;CEO of WGTS departed in July 2013, and had been in his role since April 2009 following his&nbsp;<a data-mce-="" href="http://www.gold.org/download/file/2644/Jason_Toussaint_appointment_pr.pdf" style="color: rgb(172, 4, 4);">appointment</a>&nbsp;as&nbsp;head of the World Gold Council&#39;s Exchange Traded Gold (ETG) group (which included the SPDR Gold Trust) in April 2009.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">So overall, that&#39;s 4 CEOs of World Gold Trust Services in less than a 3 year period.</span></p> <h3 style="clear: both; font-family: Bitter, Georgia, serif; line-height: 1.3; font-size: 22px; margin-top: 22px; margin-bottom: 22px; color: rgb(20, 20, 18);"><span style="font-size:12px;">A Run on the Pound</span></h3> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Turning to the &nbsp;number-crunchers, current WGTS CFO&nbsp;Samantha McDonald was appointed by the WGTS board of directors on 10 March 2015 &quot;with immediate effect&quot;, on the day that the previous WGTS CFO Adrian Pound resigned. Pound had been both Chief Financial Officer and Treasurer of World Gold Trust Services. The SPDR Gold Trust&nbsp;<a data-mce-="" href="https://www.sec.gov/Archives/edgar/data/1222333/000119312515087425/d887800d8k.htm" style="color: rgb(172, 4, 4);">8-K filing to the SEC</a>&nbsp;about Pound&#39;s resignation stated that:</span></p> <p data-mce-style="padding-left: 30px;" style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px; padding-left: 30px;"><span style="font-size:12px;"><em>&quot;His [Mr. Pound&#39;s] resignation did not arise from any disagreement on any matter relating to the operations, policies or practices of the SPDR<span style="line-height: 0; position: relative; top: -0.5em;">&reg;</span>&nbsp;Gold Trust.&quot;</em></span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Adrian Pound had only been appointed as WGTS CFO in October 2013, and so was only in the role for about 17 months, the same duration as William Rhind&#39;s stint as WGTS CEO. Pound&#39;s departure also looks unexpected since it was only announced to the SEC on 11 March 2015, and furthermore,<strong>&nbsp;</strong>Samantha McDonald&nbsp;took over the role &quot;with immediate effect&quot; and without a transition period.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Prior to October 2013, Robin Lee, the Secretary of the World Gold Council, had been the CFO and Treasurer of WGTS before Pound came in, and Lee signed off the accounts, for example in&nbsp;<a data-mce-="" href="https://www.sec.gov/Archives/edgar/data/1222333/000091066213000074/filename1.htm" style="color: rgb(172, 4, 4);">Q2 2013</a>. &nbsp;Robin Lee&nbsp;<a data-mce-="" href="https://www.bullionstar.com/blogs/ronan-manly/wp-admin/%20https://beta.companieshouse.gov.uk/company/FC014324/filing-history/MzE1MDk4MDgxNWFkaXF6a2N4/document?format=pdf&amp;download=0" style="color: rgb(172, 4, 4);">resigned as Secretary of the World Gold Council on 31 December 2014</a>, and looks to have stepped down as CFO of WGTS by October 2013.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">So, overall, that&#39;s 3 CFOs of World Gold Trust Services in less than a year and a half.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user227218/imageroot/2016/07/08/GLD%20NYSE.png" style="width: 600px; height: 400px;" /></span></p> <h3 style="clear: both; font-family: Bitter, Georgia, serif; line-height: 1.3; font-size: 22px; margin-top: 22px; margin-bottom: 22px; color: rgb(20, 20, 18);"><span style="font-size:12px;">The Board and Corporate Governance</span></h3> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">World Gold Trust Services, the sponsor of the SPDR Gold Trust, has a Board of directors, however, according to a&nbsp;<a data-mce-="" href="https://www.sec.gov/Archives/edgar/data/1222333/000119312513024303/d474035d8k.htm" style="color: rgb(172, 4, 4);">SPDR Gold Trust filing</a>, this Board was only established on 24 January 2013. The Board consists of&nbsp;William J. Shea (Chairman),&nbsp;Rocco Maggiotto, Neal Wolkoff, and WGTS CEO&nbsp;Aram Shishmanian. The Board (Shea, Maggiotto, Wolkoff and Shishmanian) also established an audit committee and appointed Shea, Maggiotto and Wolkoff to serve as members of this audit committee.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">As a reminder, Aram&nbsp;Shishmanian is CEO of the World Gold Council and is also CEO of World Gold Trust Services, and is also a board member of World Gold Trust Services.&nbsp;Aram Shishmanian&nbsp;<a data-mce-="" href="http://www.gold.org/download/file/2655/new_ceo_080908_pr.pdf" style="color: rgb(172, 4, 4);">became CEO of the World Gold Council</a>&nbsp;in January 2009.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">As CEO of the World Gold Council, Shishmanian has decision rights on the tenure of service and compensation of&nbsp;Shea, Maggiotto, and Wolkoff. In his role as CEO of WGTS, Shishmanian reports to the Chairman of the Board&nbsp;William Shea. This appears to be a very complicated and unusual organization structure of corporate governance. Furthermore, as mentioned above, World Gold Trust Services is a for-profit limited liability company and the World Gold Council is a non-profit Swiss Association. Potentially there could be conflicts of interest between the pursuit of commercial goals through WGTS and the pursuit of non-commercial goals through the WGC, especially as they have the same CEO.</span></p> <h3 style="clear: both; font-family: Bitter, Georgia, serif; line-height: 1.3; font-size: 22px; margin-top: 22px; margin-bottom: 22px; color: rgb(20, 20, 18);"><span style="font-size:12px;">The Rush to Leave?</span></h3> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">There are plenty of reasons why executives leave companies, including changes in reporting lines, smaller budgets, changes in job description, lack of opportunities, a fear of the company imploding, or just the pursuit of more attractive opportunities. Some of the above departures would surely fall into one or more of these categories. The short stints of CEO Kevin Geldman, CEO William Rhind, and CFO Adrian Pound are curious though since none of these people really stayed in their roles very long.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">CEO Feldman resigned on 31 July 2014, and CFO Pound resigned on 10 March 2015, and CEO Rhind resigned on 9 February 2016. Although I am second guessing, in my view, some or all of these departures could be related to one or both of the following factors:</span></p> <p data-mce-style="padding-left: 30px;" style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px; padding-left: 30px;"><span style="font-size:12px;">a) An environment of revenue and cost cuts at the World Gold Council and WGTS during 2014-2015</span></p> <p data-mce-style="padding-left: 30px;" style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px; padding-left: 30px;"><span style="font-size:12px;">b) Pressure from the World Gold Council or elsewhere to push through a complicated and stressful &#39;consent solicitation campaign&#39; in 2014 / 2015 that was required so as to alter the SPDR Gold Trust sponsor fee setup that allowed WGTS to collect a greater sponsor fee.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Point a) is pretty self-explanatory but I will illustrate it briefly below.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Point b) will make sense to readers after they have read future BullionStar coverage of the&nbsp;<strong>&quot;GLD proxy consent solicitation campaign&quot;</strong>&nbsp;which is very complex and quite shocking to the extent of the sheer constant barrage that WGTS unleashed on both institutional and retail GLD holders for months and months in the second half of 2014 and early 2015 to get the required proxy voting majority.&nbsp;This consent campaign eventually got the required ~51% of votes by the end of Q1 2015, and was effective by July 2015, after which WGTS began collecting 0.40% of the GLD NAV as sponsor fees. However, I&#39;ll explain it very briefly.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Before the sponsor fee change, the GLD Sponsor Fee was&nbsp;0.15% of the Adjusted NAV, or 15 basis points.&nbsp;The Marketing Agent fee (for State Street Global Advisors) was also set at 0.15% of the ANAV. The Trustee fee (to BoNY Mellon) was set at an annual rate of 0.02% of the ANAV, &ldquo;subject to a minimum fee of $500,000 and a maximum fee of $2 million per year&quot;.&nbsp;The custodian&rsquo;s fee (to HSBC) was approximately&nbsp;0.06% of the NAV.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">As mentioned in BullionStar blog &quot;<a data-mce-="" href="https://www.bullionstar.com/blogs/ronan-manly/the-funding-model-of-the-world-gold-council-gld-fees-and-gold-miner-dues/" style="color: rgb(172, 4, 4);">The funding model of the World Gold Council: GLD Fees and Gold Miner Dues</a>&quot; from June 2015:</span></p> <p data-mce-style="padding-left: 30px;" style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px; padding-left: 30px;"><span style="font-size:12px;">&quot;<em>Between June 2014 and February 2015, the GLD Sponsor, World Gold Trust Services, ran a protracted and non-stop blitz-like global consent solicitation campaign (using Broadridge and DF King) to try to persuade 51% of the beneficial owners of GLD Shares to consent to (vote for) 2 proposals that WGTS was desperate to push through. These two Sponsor proposals were to:</em></span></p> <p data-mce-style="padding-left: 60px;" style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px; padding-left: 60px;"><span style="font-size:12px;"><em><strong>a)&nbsp;</strong><strong>increase the Sponsor fee from 0.15% per annum to 0.40% per annum</strong></em></span></p> <p data-mce-style="padding-left: 60px;" style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px; padding-left: 60px;"><span style="font-size:12px;"><em><strong>b)&nbsp;</strong><strong>to be permitted to&nbsp;compensate the World Gold Council and its affiliates for the provision of marketing and other services to the SPDR Gold Trust</strong></em></span></p> <p data-mce-style="padding-left: 30px;" style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px; padding-left: 30px;"><span style="font-size:12px;"><em>Teeing up these&nbsp;2 proposals for implementation required amendments to the GLD&nbsp;<strong>Trust Indenture</strong>.&nbsp;Changes of this nature to the Trust Indenture required 51% of GLD Shareholders to consent, hence the consent solicitation campaign. This 51% threshold was eventually reached on 25 February 2015, after which the consent solicitation campaign was halted.&quot;</em></span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">What WGTS and the World Gold Council did essentially was boost the sponsor fee to themselves while then having the power to pay out the rest of the fees to the other parties, i.e. to the Marketing Agent, Trustee and Custodian. This basically allows WGTS to keep the extra fees for itself and these are used as revenue by the World Gold Council. As you will see below, this strategy started to become lucrative in 2015.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user227218/imageroot/2016/07/08/WGC.jpg" style="width: 560px; height: 315px;" /></span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">The vast majority of World Gold Council funding has traditionally been made up of member dues (from its gold mining company members) and sponsor fees (from the SPDR Gold Trust). The sponsor fees pass through WGTS and are booked as revenue of the WGC (since WGC fully owns WGTS). This revenue model was altered over 2014/2015 as member dues were phased out and the World Gold Council / World Gold Trust Services eventually pushed through the amendment (by proxy solicitation campaign) to alter the fee structure of the GLD.</span></p> <div style="color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">According to the&nbsp;<a data-mce-="" href="https://beta.companieshouse.gov.uk/company/FC014324/filing-history/MzEzMTU0NzgzM2FkaXF6a2N4/document?format=pdf&amp;download=0" style="color: rgb(172, 4, 4);">WGC annual accounts for the year to 31 December 2014</a>, in 2014, the WGC&#39;s member dues fell to&nbsp;$12.5 million compared to $28.2 million in 2013.&nbsp;In 2014, sponsor fees from the GLD<b>&nbsp;</b>were down to $46.1 million from $75.1 million earned in 2013. This was because of a lower NAV of the SPDR Gold trust, i.e. smaller gold holdings of GLD multiplied by a lower gold price.&nbsp;By 2015 member dues had been phased out to zero and WGC was even more reliant on the sponsor fees from GLD. It appears the gold mining companies no longer were willing or able to fund the World Gold Council.</span></div> <div style="color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">&nbsp;</span></div> <div style="color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">The WGC&#39;s overall revenue &nbsp;for 2014 was&nbsp;<strong>$61 million</strong>, which was $42 million less than 2013 total revenue of $103 million. WGC expenditure for 2014 was&nbsp;<strong>$85.3 million</strong>, down from $115.7 million in 2013.</span></div> <div style="color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">&nbsp;</span></div> <div style="color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Most of the expenditure drop came from reduced marketing development expenditure, with a small drop in general and admin expenditure, and a small reduction in personnel expenditure.&nbsp;With Revenue &lt; Expenditure, the WGC had to eat into its cash, and the group&#39;s cash holdings fell from $63.8 million in 2013 to $45.7 million in 2014, i.e. a reduction of $18.1 million in cash holdings.</span></div> <div style="color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">&nbsp;</span></div> <div style="color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Staff numbers at the World Gold Council stayed essentially unchanged in 2014, at 91 in December 2014, vs 92 in December 2013. However a reduction in the workforce was announced in January 2015 in Note 21 of the accounts, which stated:</span></div> <div style="color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">&nbsp;</span></div> <div data-mce-style="padding-left: 30px;" style="color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px; padding-left: 30px;"><span style="font-size:12px;"><i>&quot;Note 21: Subsequent events:</i></span></div> <div data-mce-style="padding-left: 30px;" style="color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px; padding-left: 30px;"><span style="font-size:12px;"><i>On 20 January 2015, the company announced to its employees that it would be eliminating certain activities that will result in a reduction of its workforce and lower office requirements. It is expected that the costs of the restructuring will be in the region of $15 million. A provision of $11 million was made in the year ended 31 December 2014.&quot;</i></span></div> <div data-mce-style="padding-left: 30px;" style="color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px; padding-left: 30px;"><span style="font-size:12px;">&nbsp;</span></div> <div style="color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">From the&nbsp;<a data-mce-="" href="https://beta.companieshouse.gov.uk/company/FC014324/filing-history/MzE0Njg1Mzc4MmFkaXF6a2N4/document?format=pdf&amp;download=0" style="color: rgb(172, 4, 4);">World Gold Council 2015 accounts</a>, by 2015, all WGC member dues (from the gold mining company members) had been phased out to zero, and the bulk of revenue,&nbsp;<strong>$66.9 million</strong>, came from the Sponsor Fees from the SPDR Gold Trust. Total revenue was&nbsp;<strong>$68.8 million</strong>. This meant that as of 2015, the GLD (a commercial ETF) was basically funding all of the operations of the World Gold Council (a non-profit association).</span></div> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">The WGC 2015 accounts also show (on page 34) that WGTS paid out the following fees in 2015 to the Marketing Agent, Trustee and Custodian, and some ancillary expenses:</span></p> <ul style="margin-top: 16px; margin-bottom: 16px; margin-left: 0px; padding-left: 40px; list-style-type: square; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"> <li><span style="font-size:12px;">Marketing Agent fees: $16.6 million</span></li> <li><span style="font-size:12px;">Custodian fees $4.1 million</span></li> <li><span style="font-size:12px;">Trustee fees $0.92 million</span></li> <li><span style="font-size:12px;">Other GLD Expenses: $4.9 million</span></li> <li><span style="font-size:12px;"><strong>Total</strong>&nbsp;of the above for 2015: $ 26.574 million</span></li> </ul> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Given that the <strong><u>World Gold Council took in&nbsp;$66.9 million as Sponsor Fees from GLD for 2015, that&#39;s a cool $ 40.3 million that the WGC kept out of the total Sponsor fee inflows</u></strong>. Now you can see why they were so eager to push through the consent solicitation campaign in 2014 and early 2015. Therefore, GLD shareholders are essentially bank-rolling the entire running of the World Gold Council. I wonder how many GLD shareholders are aware of this?&nbsp;</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Finally, WGC expenses for 2015 continued to drop slightly to $82.3 million. Probably the most shocking thing about the 2015 World Gold Council accounts is that the <strong>employee headcount had dropped to 51 at the end of 2015 from 91 at the end of 2014</strong>. Therefore there were 40 fewer people employed by the group. That&#39;s a 44% reduction in headcount over one year.</span></p> <h3 style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Conclusion</span></h3> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">My guess is that in a World Gold Council environment of cost cutting over 2014 / 2015 and mass personnel departures, the work environment probably contributed to some of the CEO / CFO departures by the WGTS execs. Furthermore, as you will see in a future post about the &#39;GLD consent solicitation proxy vote campaign&#39;, because this was, in my opinion, a very misleading and confusing non-stop campaign that bordered on bullying GLD shareholders, especially the retail shareholders, this could have also taken its toll and resulted in CEO / CFO departures from the SPDR Gold Trust sponsor, i.e. New York based World Gold Trust Services.</span></p> <p style="margin-top: 0px; margin-bottom: 24px; color: rgb(20, 20, 18); font-family: &quot;Source Sans Pro&quot;, Helvetica, sans-serif; font-size: 16px; line-height: 24px;"><span style="font-size:12px;">Finally, it would be interesting to see what the&nbsp;<a data-mce-="" href="https://www.bullionstar.com/blogs/ronan-manly/wp-admin/%20http://www.nasdaq.com/symbol/gld/institutional-holdings" style="color: rgb(172, 4, 4);">large institutional shareholders of GLD</a>&nbsp;such as Paulson and Blackrock make of this high turnover rate in GLD Sponsor executives, and what their corporate governance and proxy voting teams think of the WGTS driven GLD proxy solicitation campaign and the rather unusual governance structure of the World Gold Council and World Gold Trust Services.</span></p> <div>&nbsp;</div> http://www.zerohedge.com/news/2016-07-29/execs-flee-gld-revolving-door-spdr-gold-trust-sponsor#comments B+ Blackrock Exchange Traded Fund Institutional Investors None Securities and Exchange Commission State Street World Gold Council Fri, 29 Jul 2016 11:00:00 +0000 BullionStar 567654 at http://www.zerohedge.com Despite Huge BOJ Disappointment, Global Stocks Rise, US Equity Futures Flat As Yen Soars http://www.zerohedge.com/news/2016-07-29/despite-huge-boj-disappointment-global-stocks-rise-us-equity-futures-flat-yen-soars <p>European stocks and Asian shares rose, U.S. equity futures were unchanged and the yen surged after the BOJ shocked markets and kept its QE program unchanged, defying market expectations of a big boost to its monetary stimulus program. </p> <p>The session's key event, last night Bank of Japan policy announcement, the most anticipated in years, was - as we <a href="http://zerohedge.com/news/2016-07-28/all-eyes-tonights-boj-announcement-minor-snag-emerges">predicted yesterday </a>when we said that it would be impossible for the central bank to meet market expectations - a dud, one which sparked a surge in the yen and sending government bonds and emerging-market stocks lower. </p> <p>Japan’s currency soared against all of its 31 major peers after the BOJ effectively punted to the next meeting, keeping its government-bond buying target and policy interest rate unchanged, opting instead to double exchange-traded fund purchases to 6 trillion yen ($58 billion) a year, the BOJ said. The result was a 1.5% spike in the yen, bringing its gain this year to about 16 percent. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_BOJ2.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_BOJ2_0.jpg" style="width: 600px; height: 400px;" /></a></p> <p>&nbsp;</p> <p>The BOJ’s expanded stimulus “was as minimal as possible,” said Stefan Worrall, director of equity cash sales at Credit Suisse Group AG in Tokyo. “The tension was extremely high going into the announcement, and the market has reacted in a way that has perhaps reflected that.”</p> <p>Yields on 10-year JGBs climbed the most since 2013, while rates on similar-maturity Treasury notes increased from a two-week low. As shown below, JGB futures tumbled the most in two years. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_BOJ3.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_BOJ3_0.jpg" style="width: 600px; height: 316px;" /></a></p> <p>Many expected the disappointing BOJ announcement to send equities lower: "the yen’s move shows how the market is disappointed,” Nicholas Teo, a strategist at KGI Fraser Securities, said. “That’s got to trigger a risk-off move in equities. The market had expected very generous stimulus from the BOJ.” However, while the market soared in the past several weeks on expectations of helicopter money, it has failed to retrace any part of the move on the news. </p> <p>Indeed, while the BOJ announcement sent volatility in FX and rates soaring, after an initial plunge in the Nikkei as much as 2% lower, then rebound, then another plunge, Japan's stock index rose, and finally closed up 0.6% mostly on the back of a relief rally in the banks which were bought after the BOJ did not cut its negative interest rate even more. “The ETF purchase is directly good for the market,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo. “The BOJ didn’t go further into negative rates, so it’s good for the financial stocks.”</p> <p>In Europe, better-than-estimated earnings from Barclays Plc and UBS Group AG helped stocks extend their biggest monthly advance since October. Meanwhile, oil continued to sell off, and is now headed for a bear market, while gold pared a second month of gains. </p> <p>As <a href="http://www.bloomberg.com/news/articles/2016-07-28/yen-spike-sinks-nikkei-225-futures-on-boj-day-oil-extends-slump">Bloomberg reports</a>, a month of big swings in the $5.3 trillion-a-day foreign exchange market is set to end with a bang as markets digest the BOJ’s decision, and in a few hours the U.S. is set to report Q2 GDP, where it is expected to show a pickup in economic growth and results of bank stress tests in Europe. Earlier today Europe reported its own Q2 GDP which came in line with expectations at 0.3%, half of the growth rate seen in the first half. </p> <p>Ignoring the BOJ disappointment, the Stoxx Europe 600 Index climbed 0.4%, taking its monthly increase to 3.2%. The rebound hasn’t been enough for the gauge to recoup its losses following the U.K. vote to quit the European Union. Barclays jumped 6% as its core units posted adjusted pretax profit that topped projections and UBS climbed 2.8 percent. Italy’s Banca Monte dei Paschi di Siena SpA rallied 7.1 percent after it received a proposal. Stress-test results are due at 10 p.m. Milan time on Friday. Electricite de France SA surged 9.4 percent as its earnings beat projections and it maintained its 2016 objectives. The British government cast doubt on the future of a nuclear-power project in the U.K. ArcelorMittal rose 5.1 percent after posting its highest quarterly profit since 2014.</p> <p>While the S&amp;P 500 Index futures slipped 0.2 percent, we expect initial weakness to be bought and US stocks will close well in the green, adding to July's 3.4% gains. Google parent Alphabet advanced 3.5 percent in early trading after reporting second-quarter earnings and sales that beat analysts’ estimates as growth in cloud-computing and corporate software businesses improved. Amazon.com Inc. rose 1.4 percent as profit topped projections.</p> <p>The MSCI Emerging Markets Index slid 0.7 percent, leaving it 4.3 percent higher on the month. Both gauges are headed for the best month since March.</p> <p>The yield on Japan’s 10-year bonds jumped eight basis points to minus 0.19 percent, set for the steepest increase May 2013, based on closing prices. Yields on Treasuries with a similar maturities rose two basis points to 1.53 percent, having been at 1.48 percent earlier, the lowest since July 14. Treasury yields are still set for a weekly drop after Fed officials signaled this week they are in no rush to raise interest rates, even as they noted that near-term risks to the economic outlook have diminished. The economy probably grew at a 2.5 percent annualized rate from April through June, according to the median estimate of 76 forecasters before Friday’s release.</p> <p>On today's calendar, the US Q2 GDP report is front and center however there’s also other important data in the form of the employment cost index (expected to be +0.6% qoq), Chicago PMI for July (expected to decline 2.8pts to 54.0) and the final revisions to the July University of Michigan consumer sentiment report. There’s also a bit of Fedspeak to contend with with Williams and Kaplan&nbsp; both scheduled.&nbsp; Investors are also watching earnings from companies including Merck &amp; Co., Exxon Mobil Corp. and Chevron Corp. for further clues on how global monetary stimulus is filtering through the economy. A potential key risk event will the be the European stress test announcement which may impact Italy's insolvent Monte Paschi, which is rushing to arrange a last minute bailout plan. </p> <p>* *&nbsp; *</p> <p><strong>Market Snapshot</strong></p> <ul> <li>S&amp;P 500 futures down 0.1% to 2163</li> <li>Stoxx 600 up 0.4% to 341</li> <li>FTSE 100 down 0.2% to 6708</li> <li>DAX up 0.5% to 10325</li> <li>German 10Yr yield up 2bps to -0.07%</li> <li>Italian 10Yr yield up less than 1bp to 1.21%</li> <li>Spanish 10Yr yield down less than 1bp to 1.09%</li> <li>S&amp;P GSCI Index down 0.9% to 333.5</li> <li>MSCI Asia Pacific up 0.5% to 136</li> <li>Nikkei 225 up 0.6% to 16569</li> <li>Hang Seng down 1.3% to 21891</li> <li>Shanghai Composite down 0.5% to 2979</li> <li>S&amp;P/ASX 200 up 0.1% to 5562</li> <li>US 10-yr yield up 2bps to 1.53%</li> <li>Dollar Index down 0.37% to 96.38</li> <li>WTI Crude futures down 1.3% to $40.62</li> <li>Brent Futures down 1.9% to $41.89</li> <li>Gold spot down 0.3% to $1,332</li> <li>Silver spot down 0.6% to $20.05</li> </ul> <p><strong>Top Global Headlines</strong></p> <ul> <li>Hillary Clinton Accepts Democratic Nomination, Attacks Trump: Democratic nominee reaches out to supporters of Bernie Sanders, calls Trump’s vision for nation “Midnight in America”</li> <li>BOJ Opts for Limited Stimulus Expansion, Plans Policy Review: board expands ETFs; no change to bond purchases, negative rate; Kuroda calls for assessment of effectiveness of BOJ policy</li> <li>Google Results Show Signs of Cloud Progress Under Greene: “other revenue” jumps 33% to record on cloud and apps momentum; Alphabet Beats Analysts’ Estimates on Mobile Ads, Cost Controls</li> <li>Amazon Cloud Unit Helps It Stay Profitable While Investing: co. takes on Netflix, Wal-Mart and Flipkart at once; co. forecasts sales that may beat estimates on Prime Day</li> <li>Facebook Gets $3-5b IRS Tax Notice Over Ireland Move: IRS issues notice for 2010 tax year over operations transfer; co. plans to challenge notice in federal tax court</li> <li>UBS Scraps Near-Term Targets as 2Q Profit Declines: scraps near-term guidance after 2Q profit slipped 14%</li> <li>Sanofi Ready for Swift Action on Medivation as Earnings Drop: co. ready to act swiftly to reach a deal with Medivation as 2Q profit and sales declined</li> <li>Chubb Promotes Kessler to Reinsurance Chief; O’Farrell Exits: Kessler was previously chief actuary of an international unit</li> <li>America Movil Profit Misses Estimates as Revenue in Mexico Dips: carrier’s Mexico margins narrow amid stiff competition</li> <li>TerraForm Power Said to Plan September Auction of Its Shares</li> <li>Thoma Bravo Said to Seek Sale of Deltek for Up to $3b: Reuters</li> <li>N.Y. Fed Said to Be Moving On-Site Examiners Out of Banks: WSJ</li> <li>Ex-Goldman Exec Sues Bank Seeking Legal Fees in Fed Probe: WSJ</li> </ul> <p>* * *</p> <p><strong>Looking at regional markets, Asia stocks traded mostly lower following disappointment from the BoJ policy decision </strong>after the central bank refrained from cutting rates deeper into negative territory and also kept its rise in monetary base unchanged. This initially pressured the Nikkei 225 (+0.6%) although banking names benefitted from the pause in rates. ASX 200 (+0.1%) saw upside capped by energy weakness following the continued drop in WTI Crude prices, which tested USD 41/bbl to the downside while Chinese markets were in the red with Hang Seng (-1.3%) weighed on by subdued earnings from CNOOC while losses in Shanghai Comp (-0.5%) were stemmed by a larger net-weekly liquidity injection. 10yr JGBs are lower with prices declining by over a point which was the most since 2013, following the BoJ disappointment. BoJ disappointed markets and kept its policy rate unchanged at -0.1% and held the annual rise in monetary base. at JPY 80tIn via 7-2 vote with Sato and Kiuchi as the dissenters. The BoJ instead announced to expand purchases of ETFs to JPY 6.0tIn from JPY 3.3tln and doubled programme of USD lending from USD 12bIn to USD 24b1n. </p> <p><em>Top Asian News</em></p> <ul> <li>Japan Bank Shares Are Biggest Winners From BOJ’s Policy Decision: Banks including Mitsubishi UFJ jumped</li> <li>Sony Posts Surprise Profit as Games Outweigh Sagging Sensors: Net income 21.2b yen for 1Q ended June 30 vs est. 39b yen loss</li> <li>Sembcorp Joins Keppel With Profit Plunge as Oil Damps Demand: Slashes FY16 capital expenditure to half of previous year’s</li> <li>Cnooc Warns of $1.2b Loss Amid Canada Oil Sands Writedown: Co. expects first loss since Hong Kong listing in 2000</li> <li>India Lifts Veil on Army as Modi Moves to Spend $150b: Private-sector executives climb on tanks, speak with soldiers</li> </ul> <p><strong>European equities have kicked off the final trading day of the week higher despite some overnight disappointment from the BoJ. </strong>Although, financial names have been supported from a lack of further rate reductions which in turn saw Nikkei 225 (+0.6%) finish in the green. Furthermore, this filtered into the upside in European financial names, while gains in Barclays (+5.7%) have also been attributed to their firm earnings update, however the FTSE 100 does remain the notable laggard with the index hampered by lacklustre earnings from the likes of IAG, Pearson and Reckitt Benckiser as well as softness in energy heavyweight Shell. In terms of outperformers, the FTSE MIB (+1.8%) leads the region amid the strength in Monte Paschi (+6.9%) shares as reports have been circulating that the bank may receive an 11th hour rescue ahead of the ECB stress test results at 2100BST. Aside from equities, across fixed income markets, Bunds gapped lower at the open to hover around 167.00 level as the lack of significant action by the BoJ saw JGB yields with their third largest surge on record. However, for much of the morning, Bunds have pulled off its lows as the downside in oil prices, alongside month-end extension buying has led to somewhat of a short squeeze.</p> <p><em>Top Asian News</em></p> <ul> <li>Euro-Area Economy Slowed Before Brexit Vote Put Outlook at Risk: growth eased to 0.3% in 2Q, down from 0.6%; inflation in the region unexpectedly picked up to 0.2% in July</li> <li>Barclays Rises as Cost Cuts, Trading Gain Outshine Profit Drop: bank posted $1.4b pretax loss at non-core division; fixed-income trading revenue climbed 10% in quarter</li> <li>AB InBev Rises on Optimism SABMiller Deal Will Get Done: shares gain as much as 2.5% in Brussels after earnings miss</li> <li>BBVA Jumps as Earnings Beat Estimates on Better Lending Returns: net interest income and fees rebounded from slow 1Q</li> <li>Mediaset Rejects Vivendi’s Alternative Offer for TV Alliance: Italian broadcaster seeks to enforce deal to sell Premium unit; board authorizes ‘all necessary measures’ to respect contract</li> <li>Statoil Buys Petrobras Oilfield for $2.5b Amid Crude Rout: biggest Statoil acquisition since 2011 not expensive: analyst</li> <li>British Airways Owner Slashes Targets, Cuts Capacity on Brexit: IAG predicts only “low double-digit” profit increase for 2016</li> <li>EDF 1H Profit Drops After Writing Down Value of Assets: French utility extends depreciation period on nuclear plants</li> </ul> <p><strong>In FX, the yen climbed 1.5 percent to 103.65 per dollar at 10:25 a.m. in London, bringing its gain this year to about 16 percent. </strong>BOJ Governor Haruhiko Kuroda led his board in voting to increase its ETF program to 6 trillion yen ($58 billion) a year, the BOJ said. The announcement comes after decisions this month from the Federal Reserve, the European Central Bank and the Bank of England to leave their key interest rates unchanged as they assessed the economic fallout from the U.K.’s vote to leave the European Union. “The BOJ’s disappointment, which also follows the ECB and BOE’s recent decisions to hold off easing, may just cause markets to re-assess whether they had front-run things too much,” said Khoon Goh, head of Asia research at Australia &amp; New Zealand Banking Group Ltd. in Singapore. Away from the yen, foreign-exchange markets were more subdued. South Korea’s won strengthened 0.4 percent against the dollar to lead gains among emerging-market currencies. The Chinese yuan slipped 0.1 percent, paring a weekly gain. The euro increased 0.3 percent.</p> <p><strong>In commodities, oil headed for the biggest monthly decline in a year </strong>as brimming crude and fuel inventories spurred a retreat toward $40 a barrel. West Texas Intermediate crude dropped 1.2 percent $40.64 a barrel, extending declines from a peak in June to more than 20 percent. Brent oil in London slid 1.8 percent to $41.92. Spot gold slipped 0.3 percent to $1,331.95 an ounce after earlier rising in the wake of the BOJ decision. Industrial metals retreated, with copper losing 0.3 percent in London and nickel falling 1.4 percent.</p> <p><strong>On today's calendar, the US Q2 GDP report is clearly front and center </strong>however there’s also other important data in the form of the employment cost index (expected to be +0.6% qoq), Chicago PMI for July (expected to decline 2.8pts to 54.0) and the final revisions to the July University of Michigan consumer sentiment report. There’s also a bit of Fedspeak to contend with with Williams (2.30pm BST) and Kaplan (6.00pm BST) both scheduled. Away from that, the EU bank stress tests at 9pm BST will draw huge interest over the weekend. On the earnings front it’s another busy day with 18 S&amp;P 500 companies reporting including Merck, Exxon Mobil and Chevron all at or just prior to the open. In Europe both UBS and Barclays will report, along with Monte dei Paschi.</p> <p>* * * </p> <p><strong>Bulletin Headline Summary from RanSquawk and Bloomberg</strong></p> <ul> <li>The BoJ stood pat on rates and their monetary base, although did make adjustments to their ETF and USD lending programmes</li> <li>European equities trade higher as financial names lead the way amid upbeat earnings and the BoJ not delving deeper in to negative territory</li> <li>Looking ahead, highlights include EU Bank Stress Tests, US GDP, PCE and Michigan Sentiment and potential comments from Fed's Williams</li> </ul> <p><strong>US Event Calendar</strong></p> <ul> <li>8:30am: Employment Cost Index, 2Q, est. 0.6% (prior 0.6%)</li> <li>8:30am: GDP Annualized Q/q, 2Q A, est. 2.5% (prior 1.1%)</li> <li>9:45am: Chicago Purchasing Manager, July, est. 54 (prior 56.8)</li> <li>10am: U. of Mich. Sentiment, July F, est. 90.2 (prior 89.5)</li> <li>9:30am: Fed’s Williams speaks in Boston</li> <li>1pm: Fed’s Kaplan speaks in Albuquerque</li> <li>1pm: Baker Hughes rig count</li> </ul> <p><strong>DB's Jim Reid concludes the overnight wrap</strong></p> <p>The BoJ continue their fight to take the Japanese economy to higher ground at this morning's long awaited meeting. As expected, they’ve eased but the extent to which will be seen as a bit disappointing. ETF purchases have been expanded to ¥6tn (almost doubling the prior target), while the -0.1% base rate has been maintained and the pace of QE purchases held at ¥80tn per year. Kuroda has also ordered an assessment of the effectiveness of BoJ policy to be undertaken at the next meeting scheduled for September which is interesting. The Yen is +1.97% stronger following the news at 103. The Nikkei initially plummeted 2%, then rallied all the way, and has now plummeted 2% again. It feels like Kuroda might be doing some damage control come his press conference later this morning.</p> <p>The announcement follows a bumper set of data out of Japan this morning. The most notable was the CPI report where headline inflation stayed put at -0.4% yoy as expected in June. The core declined one tenth to -0.5% yoy (vs. -0.4% expected) while the core-core declined two-tenths to +0.4% yoy (vs. +0.5% expected). Retail sales rose a below market +0.2% mom (vs. +0.3% expected) and overall household spending tumbled -2.2% yoy in June (vs. -0.4% expected), down from -1.1% in May. On the positive side, industrial production grew more than expected in June (+1.9% mom vs. +0.5% expected) and the jobless rate fell one-tenth to +3.1% in June (vs. +3.2% expected) which is the lowest in 21 years.</p> <p>The rest of the bourses in Asia are weaker post the BoJ too. The Hang Seng is -0.82%, while the Kospi and ASX are -0.12% and -0.26% respectively. Markets in China are down a smidgen (Shanghai Comp -0.10%). It’s also worth noting that JGB yields have risen steeply. The 10y is 10.3bps higher currently at -0.182% and heading for the biggest one day move higher in yield since May 2013.</p> <p>Today also sees the EBA bank stress tests released at 9pm BST. On this round there will be no pass or fail, just a host of information with the ultimate test outcomes feeding into supervisors’ review and evaluation process. 51 banks with a minimum of €30bn in assets and representing about 70% of total EU bank assets will be covered. The list also includes five Italian banks, however the total number of banks covered is down from 123 in the 2014 tests. The data released should be vast though and the 12,000 or so data points we got in 2014 should represent a reasonable example of the level of granularity to expect.</p> <p>One of the criticisms before they've even been released the results is that one of the key stresses is what would happen under rising yield scenarios. It doesn't seem to us that any scenario for prolonged negative yields are being modelled. Most banks would be delighted to see rising yields at the moment!! Also one might ask how much investor’s rely on it as since the last stress test in October 2014, where 99 out of 123 passed, the Euro bank equity index is down 38%. Having said that it will be a mine of information and much attention will focus on the Italian banks. We could still get an announcement on how Monte Paschi's situation will be dealt with before or after the results. The FT is reporting that veteran Italian businessman Corrado Passero has teamed up with UBS to offer a last minute alternative rescue proposal, so keep an eye on that this morning. For more on explaining the Italian banking situation see my team's note from Wednesday morning on bank capital from Michal Jezek. It's not the main purpose of the note but the background is covered. Email him at <a href="mailto:Michal.Jezek@db.com" title="Michal.Jezek@db.com">Michal.Jezek@db.com</a> if you haven't got a copy.</p> <p>The third part of the three-pronged attack of big events today is the Q2 GDP report in the US. Yesterday was a pretty important day for data in light of last minute revisions to today’s print. We learnt that the advance goods trade deficit in June widened more than expected to $63.3bn from $61.1bn after an increase in imports more than outweighed the modest increase in exports. Also important was the Census Bureau Report on Advance Economic Indicators which for the first time shed light on wholesale and retail inventories for the last month of a quarter prior to the GDP report. The report showed that wholesale inventories were little changed in June but retail inventories rose +0.5% mom. Given the trade and inventory data, the Atlanta Fed cut their Q2 GDP forecast for the second time in two days and now have growth pencilled in at +1.8% (from +2.3%). Market consensus is +2.5%, however DB’s Joe Lavorgna is at the low end of the forecasts with a +1.0% expectation.</p> <p>Meanwhile, on the long and winding road towards Brexit it was interesting to see AstraZeneca up +7.19% and at all time highs yesterday. Clearly much of the +29% rally since Brexit is down to it being a dollar earner but a large part of yesterday's move was put down to speculation (reported on numerous newswires including Bloomberg) that Novartis might be interested in acquiring it. Given the recent fall in sterling it's fair to say that UK M&amp;A (or talks of it) has picked up. Now it's not clear that such a move for a multinational company is that relevant for the UK economy but it's interesting that Brexit isn't causing a lack of interest in UK based companies. One wonders whether the new UK PM would welcome such a stamp of approval in UK plc if it happened or whether she would be tempted to block it given her comments that the UK should be much more discriminative about selling its major companies to foreign owners. A dilemma.</p> <p>Bookended by a slightly hawkish Fed reading on Wednesday and the anticipation of today’s BoJ, US GDP and EU stress events, yesterday in markets was all about the bumper release of corporate earnings out on both sides of the pond. Overall the numbers were relatively mixed. Facebook shares closed up +1.5% following the strong results after the close on Wednesday. Google parent company Alphabet rose +0.5% into the close and a further 5% in extended trading after beating both earnings and revenue estimates with some encouraging growth seen in cloud-computing. The other tech heavyweight to report was Amazon which continued the trend of both better than expected earnings and revenue for the quarter. In fact revenues were up an impressive 31% yoy with cloud computing also at the centre of that growth. Shares were up 5% in extended trading.</p> <p>On the flip side, Ford Motor’s numbers were a little disappointing relative to market expectations, sending shares down 8%. Earnings per share trailed consensus by 8c, while the automaker also painted a bleaker picture for the second half of the year. Interestingly management also provided some quantitative guidance around the Brexit impact (the first that we’ve really seen) saying that they will likely face a headwind of $200m this year and $400-500m in each of 2017 and 2018 as a result.</p> <p>Meanwhile in Europe Lloyds Bank profit declined less than expected, but shares fell 6% over capital concerns, with the bank also announcing 3000 job cuts after warning of an economic slowdown driven by Brexit. Rolls-Royce shares rallied 14% however after reporting a big beat in earnings, raising hopes that we might be starting to see a turnaround following five profit warnings in less than three years. Shell (-3%) reported the lowest quarterly earnings in 11 years, which also happened to be worse than expected.</p> <p>European equity markets closed weaker with banks in particular under pressure following the Lloyds results and ahead of today’s stress tests. The Stoxx 600 closed -0.95% and peripheral bourses closed a 2% handle lower. Across the pond equity markets initially started on the back foot but bounced back into the close. The end result was little change on the day with the S&amp;P 500 closing +0.16% and Dow -0.09%. The ongoing tumble for Oil continues to rumble away in the background meanwhile. WTI was down another -1.86% yesterday to close a shade above $41/bbl. It’s down over $3/bbl this week and it means that the -20.5% decline from the June 8th intraday highs puts oil back in a bear market. More data which underscored the pressure on building US inventories was blamed on the latest leg lower. Equity markets have largely ignored or to some extent decoupled from the move lower in oil over the last month or so. Brexit and the overwhelming focus on more central bank stimulus has taken over as the dominating factor.</p> <p>In terms of the remainder of the data yesterday, in the US initial jobless claims ticked up 14k last week to 266k, although the four-week average continues to hover around a relatively lowly 256k. Meanwhile the Kansas City Fed’s manufacturing survey was a little disappointing with the print falling 8pts to -6 (vs. +2 expected). Elsewhere, Germany reported CPI a little higher than expected in July (+0.3% mom vs. +0.2% expected), which helped to nudge the YoY rate up one-tenth to +0.4%. Finally Euro area confidence indicators were resilient in July post Brexit. The headline economic confidence indicator rose 0.2pts to 104.6 (vs. 103.5) while indicators for business climate, industrial and services sectors all improved relative to June.</p> <p>Looking at today’s calendar now, this morning in Europe we’re kicking off in France where shortly after we go to print France will report its Q2 GDP report. Germany retail sales follow this before we’re back to France with the July CPI report. The UK then follows this with the June money and credit aggregates data before we then get the July CPI report, June unemployment reading and Q2 GDP report for the Euro area. This afternoon in the US the aforementioned Q2 GDP report is clearly front and centre however there’s also other important data in the form of the employment cost index (expected to be +0.6% qoq), Chicago PMI for July (expected to decline 2.8pts to 54.0) and the final revisions to the July University of Michigan consumer sentiment report. There’s also a bit of Fedspeak to contend with with Williams (2.30pm BST) and Kaplan (6.00pm BST) both scheduled. Away from that, the EU bank stress tests at 9pm BST will draw huge interest over the weekend. On the earnings front it’s another busy day with 18 S&amp;P 500 companies reporting including Merck, Exxon Mobil and Chevron all at or just prior to the open. In Europe both UBS and Barclays will report, along with Monte dei Paschi.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="553" height="369" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/kuroda%20laughing_9.jpg?1469789162" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-29/despite-huge-boj-disappointment-global-stocks-rise-us-equity-futures-flat-yen-soars#comments Australia Bank of England Bank of Japan Barclays Bear Market Bernie Sanders Bond Census Bureau Chicago PMI China Consumer Sentiment Copper CPI Credit Suisse Crude Equity Markets European Central Bank European Union Exxon Fail Federal Reserve Federal Tax fixed Ford France Germany Google Hong Kong Initial Jobless Claims Ireland Japan Jim Reid Lloyds Mexico Michigan Monetary Base Monte Paschi New Zealand Nikkei Nomination RANSquawk Stress Test SWIFT Trade Deficit Unemployment University Of Michigan Volatility Wholesale Inventories Yen Yuan Fri, 29 Jul 2016 10:46:14 +0000 Tyler Durden 567664 at http://www.zerohedge.com Exposing Hillbama's Big Lie: The Central Issue In The U.S. Presidential Campaign http://www.zerohedge.com/news/2016-07-28/exposing-hillbamas-big-lie-central-issue-us-presidential-campaign <p><em><a href="http://thesaker.is/the-central-issue-in-the-u-s-presidential-campaign/">Authored by Eric Zuesse via The Saker</a>,</em></p> <p><strong>The central issue in the U.S. Presidential campaign can&rsquo;t even be discussed in U.S. newsmedia, because America&rsquo;s media have been almost uniformly complicit all along in hiding from the American public the crucial factual information that&rsquo;s necessary in order for the public to vote in an intelligent and truthfully informed way about it.</strong> No news medium wants to report its own having been complicit in anything; so, the cover-up here just continues; it has a life of its own, even though it&rsquo;s a life that brings the world closer and closer to a situation which would kill billions of people, as things get increasingly out-of-control the longer this coverup continues. The cycle of virtually uniform lying thus persists, despite the growing danger it produces. This article will need to be lengthy, because the American public have been almost consistently lied-to about so many very important things &mdash; things associated with the nation&rsquo;s central issue &mdash; an issue even bigger than terrorism, and than global warming, and than rising economic inequality and corruption, but which is still virtually ignored. <u><em><strong>This article is thus intended to be &lsquo;Drano&rsquo; for a political system that has become clogged by lies just jammed down into it, now backing up and pouring out onto America&rsquo;s political floor. The overflowing sludge has got to be cleaned up, and discarded. Or else &mdash; and very suddenly &mdash; it will kill us all.</strong></em></u></p> <p>This central issue is whether or not to continue to move forward with&nbsp;<a href="http://www.washingtonsblog.com/2015/09/how-america-double-crossed-russia-and-shamed-the-west.html" target="_blank">the American government&rsquo;s plan, ever since the Soviet Union and its military alliance the Warsaw Pact ended in 1991, to extend NATO &mdash; the anti-Russia military club &mdash; right up to Russia&rsquo;s borders</a>, surround Russia with NATO nuclear missiles a mere five minutes flight-time to Moscow, and simultaneously&nbsp;<a href="http://www.globalresearch.ca/the-end-of-m-a-d-the-beginning-of-madness/5528403?print=1" target="_blank">build a &ldquo;Ballistic Missile Defense&rdquo; or &ldquo;Anti Ballistic Missile&rdquo; (BMD or ABM) system to nullify Russia&rsquo;s retaliatory missiles</a>&nbsp;against an unannounced blitz U.S.-NATO invasion to take over, if not totally eliminate, Russia and its resistance to U.S. power.<strong> This operation is an ugly reality, but it is an American-led reality, and the outcome of the 2016 U.S. Presidential election will bring it into its final stage, either by ending it, or by culminating it &mdash; two drastically different outcomes</strong>, but one side or the other will prevail in this political contest, and the present article links to the documentation that America&rsquo;s voters will need to be aware of that shows not only that they&rsquo;ve been lied-to, but how and why they&rsquo;ve been lied-to. The documentation is all-important, especially because the facts that are being documented have been hidden so successfully for so long. This is not a world that Americans want to know, but it is a world that especially the few Americans who are in control, don&rsquo;t want the American public to know. That&rsquo;s a toxic combination (public ignorance, which the people in control want to continue), but it is tragically real (as the documentation here will make clear).</p> <p><strong>U.S. President Barack Obama has stated, on many occasions, that the U.S. is the only &ldquo;indispensable&rdquo; country, and that any country which refuses to capitulate to American global supremacy is an enemy. </strong>This applies especially to Russia and to China &mdash; two formerly communist nations. Thus, the &lsquo;Cold War&rsquo; is being resumed, and U.S. arms-makers are booming again, even though the ideological excuse (the &ldquo;red scare,&rdquo; communism) is now gone.</p> <p>For example,&nbsp;<a href="https://www.whitehouse.gov/the-press-office/2014/05/28/remarks-president-united-states-military-academy-commencement-ceremony" target="_blank">Obama told graduating cadets at West Point, on 28 May 2014</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;The United States is and remains the one indispensable nation. That has&nbsp;been true for the century passed and it will be true&nbsp;for the century to&nbsp;come. &hellip; Russia&rsquo;s aggression toward former Soviet states unnerves capitals in&nbsp;Europe, while China&rsquo;s economic rise and military reach&nbsp;worries its&nbsp;neighbors. From Brazil to India, rising middle classes compete with us,&nbsp;and governments seek a greater say in&nbsp;global forums. &hellip; It will be your generation&rsquo;s task to respond to this new world. The&nbsp;question we face, the question each of you will face, is not&nbsp;whether&nbsp;America will lead, but how we will lead &mdash; not just to secure our peace&nbsp;and prosperity, but also extend peace and&nbsp;prosperity around the globe.&rdquo;</p> </blockquote> <p><strong>He was telling West Point graduates there, that economic competition can become a cause for America to go to war, and that America&rsquo;s global supremacy is their job to enforce.</strong></p> <p>Obama placed this into a moralizing framework, as he always so skillfully does (for propaganda-purposes; he&rsquo;s terrifically gifted at that), by saying to those cadets:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;<strong>America&rsquo;s willingness to apply force around the world is the ultimate&nbsp;safeguard against chaos,</strong> and America&rsquo;s failure to act in&nbsp;the face of&nbsp;Syrian brutality or Russian provocations not only violates our&nbsp;conscience, but invites escalating aggression in the&nbsp;future. &hellip; In the 21st century American isolationism is not an option. We don&rsquo;t have a choice to ignore what happens beyond our&nbsp;borders. &hellip; As the Syrian civil war spills across borders, the capacity of&nbsp;battle-hardened extremist groups to come after us only increases.&nbsp;Regional aggression that goes unchecked&nbsp;&mdash; whether in southern Ukraine&nbsp;or the South China Sea, or anywhere else in the&nbsp;world&nbsp;&mdash; will ultimately&nbsp;impact our allies and could draw in our military. We can&rsquo;t ignore what&nbsp;happens beyond our boundaries. And beyond these narrow rationales, I believe we have a real stake, an&nbsp;abiding self-interest, in making sure our children and&nbsp;our grandchildren&nbsp;grow up in a world where schoolgirls are not kidnapped and where&nbsp;individuals are not slaughtered because&nbsp;of tribe or faith or political&nbsp;belief. I believe that a world of greater freedom and tolerance is not&nbsp;only a moral imperative, it also&nbsp;helps to keep us safe.&rdquo;</p> </blockquote> <p><strong>He was equating there the imposition of American control, as being &ldquo;a world of greater freedom and tolerance,&rdquo; which &ldquo;helps to keep us safe.&rdquo;</strong> Was it that, and did it do that, in Iraq? What about in Libya? What did it do for <a href="http://rinf.com/alt-news/breaking-news/obama-definitely-caused-malaysian-airliner-downed/" target="_blank">Ukraine</a>? Is it really doing that in Syria? What about all of the refugees that are pouring out of all of those countries, which are being &lsquo;saved&rsquo; by Obama&rsquo;s policy, which has been America&rsquo;s policy for decades, and which is not challenged, and which is bipartisan in every regard except for the style of lying rhetoric that&rsquo;s being used to &lsquo;justify&rsquo; it?</p> <p><strong>Obama&rsquo;s predecessor in office, George W. Bush, was working on the same plan, when he invaded Iraq in 2003.</strong> His allegations that he was certain that Saddam Hussein was rebuilding his nuclear-weapons program, and saying against &ldquo;Saddam&rsquo;s WMD program&rdquo; that <a href="http://www.washingtonsblog.com/2015/04/trustworthy-u-s-western-news-media.html" target="_blank">&ldquo;a report came out of the Atomic &mdash; the IAEA that they&nbsp;were six months away from developing a weapon. I don&rsquo;t know what&nbsp;more&nbsp;evidence we need&rdquo;</a>, all of it were just bald lies from him, because all of it was false, and <a href="http://www.washingtonsblog.com/2015/04/trustworthy-u-s-western-news-media.html" target="_blank">he knew that it was false</a>. He knew that there was no such &lsquo;IAEA&rsquo; &lsquo;report&rsquo;. And the press didn&rsquo;t even challenge him on it, but instead just parroted the President&rsquo;s lies as if they should automatically be taken as truths. (And <a href="http://www.washingtonsblog.com/2015/04/trustworthy-u-s-western-news-media.html" target="_blank">the press also hid the IAEA&rsquo;s immediate announcement that there was no such report.</a>) It&rsquo;s happening again, but the stakes this time are even more dangerous.</p> <p><u><strong>We&rsquo;re going into a Presidential election, in which one candidate, Hillary Clinton, clearly wants to continue the policy that has been in place since 1990 </strong></u>(and which her husband played a major role in), <u><strong>and in which the other candidate, Donald Trump, wants to stop it</strong></u>&nbsp; &mdash; he says we should end it. So, he is accused of being a <a href="http://www.theatlantic.com/international/archive/2016/07/clinton-trump-putin-nato/492332/" target="_blank">&lsquo;Soviet agent&rsquo;</a>. The same aristocracy that own the &lsquo;news&rsquo; media and that control both of the political Parties, is being threatened by Trump&rsquo;s repudiation of their program. They use moralisms &mdash; rightist ones for Republicans, and leftist ones for Democrats &mdash; to condemn him, but the real reason they are determined to defeat him is to continue <a href="http://rinf.com/alt-news/breaking-news/how-america-double-crossed-russia-and-shamed-the-west/" target="_blank">their war which (on its U.S. side) never really was against communism; it was always a war for global conquest, global control; that&rsquo;s how America&rsquo;s controllers have been controlling this country since at least 1990</a>. They want to continue it, though it&rsquo;s heading all of us toward disaster.</p> <p>In support of this aggressive agenda &mdash; a metastatically cancerous NATO &mdash; Obama <a href="https://www.youtube.com/watch?v=8-RyOaFwcEw" target="_blank">in 2014 perpetrated a very bloody Ukrainian coup (propagandized as &lsquo;democracy demonstrations&rsquo;), carried out by U.S.-paid rabid racist-anti-Russian fascists, nazis actually</a> (and <a href="https://www.youtube.com/watch?v=Wx5EkV_PhPI" target="_blank">from a tradition in Ukraine that descended from the pro-Hitler, anti-Stalin, side of Ukraine during World War II &mdash; the side that did Ukraine&rsquo;s pogroms, etc.) and which had been allied with the Axis powers during WW II</a> &mdash; but that now were <a href="http://rinf.com/alt-news/editorials/meet-ukraines-master-mass-murderer-dmitriy-yarosh/" target="_blank">in the pay of the U.S. government</a>.</p> <p>Some of the top members of Congress who have responsibility over foreign affairs refuse even to become acquainted with the evidence disproving the U.S. government&rsquo;s lies on this. <a href="http://content.blubrry.com/kkfi901fm/ts_2016_01_21.mp3" target="_blank">Elizabeth Murray</a> was shocked to find in government officials, this intentional refusal to see evidence. She had served as Deputy National Intelligence Officer for the Near East in the National Intelligence Council before retiring after a 27-year career in the U.S. government. (<a href="http://content.blubrry.com/kkfi901fm/ts_2016_01_21.mp3" target="_blank">She should be the head of the CIA.</a>) On 24 July 2016, in an article titled <a href="http://www.washingtonsblog.com/2016/07/rep-rick-larsen-bases-russia-policy-myth.html" target="_blank">&ldquo;Rep. Rick Larsen Bases Russia Policy on Myth&rdquo;</a>, she described her efforts to inform congressman Larsen about the reality of the U.S. operation in Ukraine. Wikipedia says: &ldquo;Richard Ray &lsquo;Rick&rsquo; Larsen is the United States Representative for Washington&rsquo;s 2nd congressional district and a member of the Democratic Party. &hellip; Larsen is a member of the House Armed Services Committee and the House Transportation and Infrastructure Committee. &hellip; He formerly worked as director of public affairs for the Washington State Dental Association and as a lobbyist for the dental profession. &hellip; the Second District was represented by future U.S. Senator Henry M. &lsquo;Scoop&rsquo; Jackson between 1941 and 1953.&rdquo; (Jackson later became famous as &ldquo;the Senator from Boeing,&rdquo; the first of the Democratic Party neoconservatives.)</p> <p>Murray <a href="http://www.washingtonsblog.com/2016/07/rep-rick-larsen-bases-russia-policy-myth.html" target="_blank">wrote</a> (and the links here are added by me):</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>I mentioned to Rep. Larsen that I had just returned from Russia with a U.S. delegation, and that all the people in Russia I had spoken with &mdash; including teachers, students, journalists, medical doctors, entrepreneurs and war veterans &mdash; had no desire for a nuclear war with the United States, but instead expressed the wish for peaceful, normalized relations . . . During our time in Yalta, I had organized a &lsquo;swim for peace&rsquo; with Americans and Russian war vets swimming together in the Black Sea, which had caused quite a stir in local Russian language media. I explained to Rep. Larsen my understanding of why the Russian public is suspicious about U.S. moves in the region (based on what I heard from people there), and why they would expect the United States to be the first to make a unilateral confidence-building measure in the direction of nuclear disarmament. Russians were savvy to <a href="https://www.youtube.com/watch?v=MSxaa-67yGM" target="_blank">the Nuland &lsquo;Yats&rsquo; youtube recording (in which Victoria Nuland is distinctly heard telling U.S. ambassador to Ukraine Geoffrey Pyatt that &lsquo;Yats is the guy&rsquo; just prior to</a> the regime change in which Arseniy Yatsenyuk became prime minister, and which directly implicated the U.S. in the Ukrainian <a href="http://www.washingtonsblog.com/2014/12/head-stratfor-private-cia-says-overthrow-yanukovych-blatant-coup-history.html" target="_blank">coup</a>), felt threatened by the recent <a href="http://www.eur.army.mil/anakonda/" target="_blank">NATO/Operation Anakonda</a> maneuvers that took place during our delegation&rsquo;s visit, and were extremely concerned about other provocative U.S. moves in the region, including economic sanctions on Russia and Crimea, the latter enacted after a majority of <a href="http://rinf.com/alt-news/editorials/entire-case-sanctions-russia-pure-lies/" target="_blank">Crimeans</a> voted to rejoin Russia in response to what they saw as outside interference in the affairs of Ukraine.</p> </blockquote> <p><strong>Larsen immediately responded with rebuttals, stating flat-out he didn&rsquo;t believe there was <a href="https://www.youtube.com/watch?v=8-RyOaFwcEw" target="_blank">a U.S. role in the Ukrainian events</a> &mdash; that what I&rsquo;d just told him was &lsquo;not what I&rsquo;ve been hearing&rsquo; &ndash; and he went on to talk about how the Baltic states felt threatened by Russia, etc.</strong> He didn&rsquo;t know what &lsquo;Operation Anakonda&rsquo; was and seemed unaware that the largest-ever NATO military maneuvers since WWII had just taken place on Russia&rsquo;s borders. I offered to send his office additional information about that and the Ukrainian events &ndash; an offer he ignored.</p> <p><u><strong>The path we&rsquo;re on can end only in one of two ways</strong></u>: <strong>Either the U.S. &lsquo;news&rsquo; media will get real and start reporting the crucial realities</strong> (such as that the aggression in Ukraine wasn&rsquo;t <a href="http://rinf.com/alt-news/editorials/entire-case-sanctions-russia-pure-lies/" target="_blank">Putin&rsquo;s &lsquo;seizure&rsquo; of Crimea</a> but the immediately prior <a href="https://www.youtube.com/watch?v=8-RyOaFwcEw" target="_blank">coup</a> &mdash; and its necessary <a href="http://www.washingtonsblog.com/2014/08/enemies-ukraine-speak.html" target="_blank">ethnic cleansing afterwards</a> &mdash; by Obama&rsquo;s hirees, which <a href="http://rinf.com/alt-news/editorials/new-video-evidence-americas-coup-ukraine-means/" target="_blank">started being organized by him no later than 1 March 2013</a>, and which culminated nearly a year later), these being the crucial realities that contradict <a href="http://www.washingtonsblog.com/2015/08/how-why-the-u-s-media-do-propaganda-against-russia.html" target="_blank">the official lies</a> and thus might (if we&rsquo;re extremely lucky) compel the U.S. government to reverse its present course; <strong>or else, there will be a surprise blitz attack by U.S.-NATO against Russia, or else by Russia against U.S.-NATO.</strong> The closer we get to the end of this matter, the more difficult the former option becomes, and the more inevitable the latter option &mdash; a blitz attack (by either side) &mdash; becomes. That&rsquo;s the reality.</p> <p><strong>Obama&rsquo;s &lsquo;mono-polar world&rsquo; is a fiction, and the sooner that he and his Big Lie can be exposed (by the Western press, to the Western publics), the safer everyone will be</strong>. Discomforts on the parts of those who have promulgated and propagandized that lie will be vastly less than the disastrous alternative, which would destroy the world for everyone.</p> <p>*&nbsp; *&nbsp; *</p> <p><em>Investigative historian Eric Zuesse is the author, most recently, of&nbsp; <a href="http://www.amazon.com/Theyre-Not-Even-Close-Democratic/dp/1880026090/ref=sr_1_9?ie=UTF8&amp;qid=1339027537&amp;sr=8-9" target="_blank">They&rsquo;re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010</a>, and of &nbsp;<a href="http://www.amazon.com/dp/B007Q1H4EG" target="_blank">CHRIST&rsquo;S VENTRILOQUISTS: The Event that Created Christianity</a>.</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="211" height="148" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160728_lie.jpg?1469756433" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-28/exposing-hillbamas-big-lie-central-issue-us-presidential-campaign#comments Barack Obama Boeing Brazil China Corruption Donald Trump ETC Global Warming India Iraq Isolationism national intelligence Reality Ukraine Fri, 29 Jul 2016 08:45:00 +0000 Tyler Durden 567626 at http://www.zerohedge.com Turkey Creates "Traitors' Cemetery" For Dead Coup-Plotters http://www.zerohedge.com/news/2016-07-28/turkey-creates-traitors-cemetery-dead-coup-plotters <p><a href="http://www.zerohedge.com/news/2016-07-25/credible-evidence-shows-turkish-authorities-raped-and-tortured-detainees-failed-coup">Following the "credible evidence" provided by Amnesty International on the torture and mistreatment of alleged coup-plotters in Turkey</a>, The <a href="http://www.military.com/daily-news/2016/07/28/turkey-creates-traitors-cemetery-dead-coup-plotters.html">Associated Press' Cinar Kiper and Elena Becatoros report</a> that, <strong>tucked in the back corner of a construction site for a new dog shelter in eastern Istanbul lies a freshly dug, unmarked grave — the first in the new "Traitors' Cemetery," created specifically to hold the bodies of coup plotters who died in the July 15 abortive putsch</strong>.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>In the week following the attempted coup in Turkey, which killed about 290 people, the municipality announced it intended to set up a cemetery specifically for those involved — people that officials have branded as traitors undeserving of a proper burial. About 24 coup plotters are believed to have been killed that night.</p> <p>&nbsp;</p> <p><strong>Authorities would "reserve a spot and call it a traitors' cemetery. Passers-by will curse them," </strong>Istanbul Mayor Kadir Topbas said in remarks carried by the Dogan News Agency. <strong>"May every passer-by curse them and let them not rest in their tombs."</strong></p> <p>&nbsp;</p> <p>The creation of the cemetery comes amid a widespread crackdown in the aftermath of the coup. Nearly 16,000 people have been detained, including about 10,000 military personnel; displays of patriotism abound, with many Turks flying national flags from the windows of their apartments or cars; and nightly pro-government rallies are held in cities across the country.</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>Turkey's Directorate of Religious Affairs issued a directive denying funeral prayers and services for those who died while trying to overthrow the government.</strong></span> Such prayers, it said, were intended for the faithful as an act of exoneration, "but these people, with the action they undertook, have disregarded not just individuals but also the law of an entire nation and therefore do not deserve exoneration from the faithful."</p> <p>&nbsp;</p> <p>Andrew Gardner, Turkey researcher for the Amnesty International rights group, said such moves were "contributing to what is a pretty poisonous atmosphere and a dangerous atmosphere" in the aftermath of the failed coup.</p> <p>&nbsp;</p> <p><strong>"Denying people religious services and decent burial is a basic denial of people's rights. In any normal circumstances such statements would be unimaginable,"</strong> Gardner said.</p> </blockquote> <p>Construction was quick. In two days, workers had built a low stone wall around a patch of land in the back of the site that will hold a new shelter for some of Istanbul's many stray dogs. <strong>A black metal sign was put up Monday, with the words "Traitors' Cemetery" in white.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_turky.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_turky.jpg" width="576" height="386" /></a></p> <p>The first — and so far, only — body arrived in an ambulance Monday, the workers say. No prayers were said and no ceremony was held for the burial beneath a dying pine tree.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>The workers aren't sure who lies beneath the rough mound of earth, stones and broken pine branches, but local media say the first to be interred there was Mehmet Karabekir, a 34-year-old captain and father of two. His mother, they reported, refused to claim his body, so he was taken to the new cemetery.</strong></p> <p>&nbsp;</p> <p>Next to his lie three more graves — deep, open trenches dug out of the rocky ground with heavy machinery, waiting for new arrivals. The workers haven't been told when more bodies might come.</p> <p>&nbsp;</p> <p>All they know, workers said Wednesday, is that they were told to build a dry stone wall in a corner of the construction site, and dig some graves</p> <p>&nbsp;</p> <p><strong>"Those who disrespect this nation will not be allowed to rest even in their tombs,"</strong> Topbas said in a speech Monday night.</p> </blockquote> <p>Deep within the animal shelter construction site, the cemetery isn't accessible to the public. But some of those at the existing makeshift dog shelter next door were furious to hear the newly announced cemetery had already been constructed in their area.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>"They should have buried them somewhere far from our animals. I wish we didn't know those traitors were here. We don't want them,"</strong> said Serhan Baturay, a 57-year-old volunteer who also runs animal welfare groups.</p> <p>&nbsp;</p> <p><strong>"They shouldn't be placed near our dogs, they shouldn't be anywhere in Turkey," </strong>she said. "They should be cremated and their ashes tossed into the ocean. <strong>There shouldn't be a trace of them anywhere in the country. </strong>As a Turkish citizen I don't want such a thing."</p> </blockquote> <p>And through all of this... Washington has been eerily silent...</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="576" height="386" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160728_turky.jpg?1469763178" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-28/turkey-creates-traitors-cemetery-dead-coup-plotters#comments Turkey Fri, 29 Jul 2016 08:00:00 +0000 Tyler Durden 567636 at http://www.zerohedge.com Russia And China Will Hold Joint Naval Drills In Contested South China Sea http://www.zerohedge.com/news/2016-07-28/russia-and-china-will-hold-joint-naval-drills-contested-south-china-sea <p>When on July 12 <a href="http://www.zerohedge.com/news/2016-07-12/china-has-no-legal-claim-most-south-china-sea-un-tribunal-finds">we described the symbolic</a>, if utterly meaningless ruling by the Hague's Permanent Court of Arbitration on July 12, according to which China had no legal claim on most of the South China Sea (obviously, a ruling that China said repeatedly both before and after it would ignore), we said that "Ironically, in attempting to stem China's territorial expansions in the region, the tribunal will likely just provoke Beijing even more." </p> <p>Just over two weeks later we got the first official confirmation that this is precisely <em>what has happened</em>, when overnight China's Defen<em>s</em>e Ministry announced that China and Russia would hold "routine" naval exercises in the contested area in the South China Sea this coming September, "adding that the drills were aimed at strengthening their cooperation and were not aimed at any other country."</p> <p>Translation: the drills are aimed at the US, whose diplomatic relationship with "uber hacker" Russia is the worst it has been since the cold war, and whose ties with China have been deteriorating over the past several years, and culminating with July's ruling which clearly pinpointed the biggest geopolitical tension point - the South China Sea. </p> <p>As <a href="http://www.reuters.com/article/us-southchinasea-china-drills-idUSKCN1080O8">Reuters trivially adds</a>, "the exercises come at a time of heightened tension in the contested waters after an arbitration court in The Hague ruled this month that China did not have historic rights to the South China Sea and criticized its environmental destruction there. China rejected the ruling and refused to participate in the case." </p> <p>"This is a routine exercise between the two armed forces, aimed at strengthening the developing China-Russia strategic cooperative partnership," China's defense ministry spokesman Yang Yujun told a regular monthly news conference. </p> <p>"The exercise is not directed against third parties."</p> <p><em>Of course, </em>it isn't.</p> <p>While China and an isolated by the west Russia, have been developing increasingly closer commercial ties over the past several years, including bilateral currency swaps, a major natural gas pipeline, and joint exploration projects, so far the two countries had not had a chance to demontrate the tight nature of their Eurasian geopolitical "<em>axis.</em>" Furthermore, China and Russia are veto-wielding members of the U.N. Security Council, and have held similar views on many major issues such as the crisis in Syria. This has repeatedly put them at odds with the United States and Western Europe. </p> <p>Last year, they held joint military drills in the Sea of Japan and the Mediterranean. However, nowhere has the tension been higher than in the South China Sea, which is precisely where China will show the US how is boss. And it will have Russia by its side. </p> <p><em><a href="http://zerohedge.com/sites/default/files/images/user5/imageroot/2016/07/21/china%20russia%20ships.jpg"><img src="http://zerohedge.com/sites/default/files/images/user5/imageroot/2016/07/21/china%20russia%20ships_0.jpg" width="500" height="339" /></a><br />Chinese and Russian naval vessels participate in the Joint Sea-2014 naval drill <br /></em><em>in the East China Sea, May 24, 2014.</em></p> <p>Naturally, White House spokesman Josh Earnest played down the significance of the exercises even though he conceded that the South China Sea was "a sensitive diplomatic topic right now". </p> <p>"I don't know what exercises they are planning, but in the same way the United States and China have a military-to-military relationship, I'm not surprised that Russia and China are seeking to build upon their military-to-military relationship as well," he told a regular briefing. </p> <p>The question then is whose military-to-military relationship is more important to Beijing. </p> <p>China has recently taken part in U.S.-led multinational naval drills in the Pacific and a U.S. defense official said he did not expect the China-Russia exercises to affect U.S. military activity or behavior in the South China Sea.&nbsp; </p> <p>“We're not concerned about the safety of U.S. vessels in the region as long as interactions with the Chinese remain safe and professional, which has been the case in most cases,” the official said. Except for those cases in which it wasn't. </p> <p>China claims most of the South China Sea, through which more than $5 trillion of trade moves annually. Brunei, Malaysia, the Philippines, Taiwan and Vietnam have rival claims. </p> <p>China has repeatedly blamed the United States for stoking tension in the region through its military patrols, and of taking sides in the dispute. The United States has sought to assert its right to freedom of navigation in the South China Sea with its patrols and denies taking sides in the territorial disputes.</p> <p>And this is why September's drills are important: Russia has been a strong backer of China's stance on the arbitration case, which was brought by the Philippines. Yang said China and Russia were comprehensive strategic partners and had already held many exercises this year. </p> <p><strong>"These drills deepen mutual trust and expand cooperation, raise the ability to jointly deal with security threats, and benefit the maintenance of regional and global peace and stability," </strong>he said.</p> <p>And, as time goes by, Russia and China will only become closer strategic partners, to the exclusion of the US and Washington's own Pacific Rim sphere of influence.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="644" height="437" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/china%20russia%20ships.jpg?1469753101" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-28/russia-and-china-will-hold-joint-naval-drills-contested-south-china-sea#comments China Japan Natural Gas Reuters White House Fri, 29 Jul 2016 06:55:16 +0000 Tyler Durden 567619 at http://www.zerohedge.com The Power Of "Nyet" - How One Word Staggered Imperial Washington http://www.zerohedge.com/news/2016-07-28/power-nyet-how-one-word-staggered-imperial-washington <p><a href="http://cluborlov.blogspot.gr/2016/07/the-power-of-nyet.html"><em>Submitted by Dmitry Orlov via Club Orlov blog,</em></a></p> <p><u><strong>The way things are supposed to work on this planet is like this</strong></u>: <em>in the United States, the power structures (public and private) decide what they want the rest of the world to do. They communicate their wishes through official and unofficial channels, expecting automatic cooperation. If cooperation is not immediately forthcoming, they apply political, financial and economic pressure. If that still doesn&rsquo;t produce the intended effect, they attempt regime change through a color revolution or a military coup, or organize and finance an insurgency leading to terrorist attacks and civil war in the recalcitrant nation. If that still doesn&rsquo;t work, they bomb the country back to the stone age. </em><strong>This is the way it worked in the 1990s and the 2000s, but as of late a new dynamic has emerged.</strong></p> <p><strong>In the beginning it was centered on Russia, but the phenomenon has since spread around the world and is about to engulf the United States itself.</strong> It works like this: the United States decides what it wants Russia to do and communicates its wishes, expecting automatic cooperation. Russia says<strong> &ldquo;Nyet.&rdquo; </strong>The United States then runs through all of the above steps up to but not including the bombing campaign, from which it is deterred by Russia&rsquo;s nuclear deterrent. The answer remains <strong>&ldquo;Nyet.&rdquo;</strong> One could perhaps imagine that some smart person within the US power structure would pipe up and say: &ldquo;Based on the evidence before us, dictating our terms to Russia doesn&rsquo;t work; let&rsquo;s try negotiating with Russia in good faith as equals.&rdquo; And then everybody else would slap their heads and say, &quot;Wow! That&#39;s brilliant! Why didn&#39;t we think of that?&quot; But instead that person would be fired that very same day because, you see, <strong>American global hegemony is nonnegotiable.</strong> And so what happens instead is that the Americans act baffled, regroup and try again, making for quite an amusing spectacle.</p> <p><strong>The whole Edward Snowden imbroglio was particularly fun to watch. </strong>The US demanded his extradition. The Russians said: &ldquo;<strong>Nyet</strong>, our constitution forbids it.&rdquo; And then, hilariously, some voices in the West demanded in response that Russia change its constitution! The response, requiring no translation, was &ldquo;Xa-xa-xa-xa-xa!&rdquo; Less funny is the impasse over Syria: the Americans have been continuously demanding that Russia go along with their plan to overthrow Bashar Assad. The unchanging Russian response has been: &ldquo;<strong>Nyet</strong>, the Syrians get to decide on their leadership, not Russia, and not the US.&rdquo;<strong> Each time they hear it, the Americans scratch their heads and&hellip; try again. </strong>John Kerry was just recently in Moscow, holding a marathon &ldquo;negotiating session&rdquo; with Putin and Lavrov. Above is a photo of Kerry talking to Putin and Lavrov in Moscow a week or so ago and their facial expressions are hard to misread. There&rsquo;s Kerry, with his back to the camera, babbling away as per usual. Lavrov&rsquo;s face says: &ldquo;I can&rsquo;t believe I have to sit here and listen to this nonsense again.&rdquo; Putin&rsquo;s face says: &ldquo;Oh the poor idiot, he can&rsquo;t bring himself to understand that we&rsquo;re just going to say &lsquo;<strong>nyet</strong>&rsquo; again.&rdquo; <strong>Kerry flew home with yet another &ldquo;nyet.&rdquo;</strong></p> <p><em><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_nyet.jpg"><img height="354" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_nyet_0.jpg" width="600" /></a></em></p> <p><strong>What&rsquo;s worse, other countries are now getting into the act.</strong> The Americans told the Brits exactly how to vote, and yet the <strong>Brits said &ldquo;nyet&rdquo; and voted for Brexit. </strong>The Americans told the Europeans to accept the horrendous corporate power grab that is the Transatlantic Trade and Investment Partnership (TTIP), and the<strong> French said &ldquo;nyet, it shall not pass.&rdquo; </strong>The US organized yet another military coup in Turkey to replace Erdo?an with somebody who won&rsquo;t try to play nice with Russia, and the <strong>Turks said &ldquo;nyet&rdquo; to that too. </strong>And now, horror of horrors, there is Donald <strong>Trump saying &ldquo;nyet&rdquo; to all sorts of things</strong>&mdash;NATO, offshoring American jobs, letting in a flood of migrants, globalization, weapons for Ukrainian Nazis, free trade&hellip;</p> <p><strong>The corrosive psychological effect of &ldquo;nyet&rdquo; on the American hegemonic psyche cannot be underestimated.</strong> If you are supposed to think and act like a hegemon, but only the thinking part still works, then the result is cognitive dissonance. If your job is to bully nations around, and the nations can no longer be bullied, then your job becomes a joke, and you turn into a mental patient. The resulting madness has recently produced quite an interesting symptom: some number of US State Department staffers signed a letter, which was promptly leaked, calling for a bombing campaign against Syria in order to overthrow Bashar Assad. These are diplomats. Diplomacy is the art of avoiding war by talking. Diplomats who call for war are not being exactly&hellip; diplomatic. You could say that they are incompetent diplomats, but that wouldn&rsquo;t go far enough (most of the competent diplomats left the service during the second Bush administration, many of them in disgust over having to lie about the rationale for the Iraq war).<strong> The truth is, they are sick, deranged non-diplomatic warmongers. Such is the power of this one simple Russian word that they have quite literally lost their minds.</strong></p> <p>But it would be unfair to single out the State Department.<strong> It is as if the entire American body politic has been infected by a putrid miasma.</strong> It permeates all things and makes life miserable. In spite of the mounting problems, most other things in the US are still somewhat manageable, but this one thing&mdash;the draining away of the ability to bully the whole world&mdash;ruins everything. It&rsquo;s mid-summer, the nation is at the beach. The beach blanket is moth-eaten and threadbare, the beach umbrella has holes in it, the soft drinks in the cooler are laced with nasty chemicals and the summer reading is boring&hellip; and then there is a dead whale decomposing nearby, whose name is &ldquo;<strong>Nyet</strong>.&rdquo; It just ruins the whole ambiance!</p> <p>The media chattering heads and the establishment politicos are at this point painfully aware of this problem, and their predictable reaction is to blame it on what they perceive as its ultimate source: Russia, conveniently personified by Putin. <strong>&ldquo;If you aren&rsquo;t voting for Clinton, you are voting for Putin&rdquo; is one recently minted political trope.</strong> Another is that Trump is Putin&rsquo;s agent. Any public figure that declines to take a pro-establishment stance is automatically labeled &ldquo;Putin&rsquo;s useful idiot.&rdquo; Taken at face value, such claims are preposterous. But there is a deeper explanation for them: what ties them all together is the power of &ldquo;<strong>nyet</strong>.&rdquo; <strong>A vote for Sanders is a &ldquo;nyet&rdquo; vote: the Democratic establishment produced a candidate and told people to vote for her, and most of the young people said &ldquo;nyet.&rdquo;</strong> Same thing with Trump: the Republican establishment trotted out its Seven Dwarfs and told people to vote for any one of them, and yet most of the disenfranchised working-class white people said &ldquo;nyet&rdquo; and voted for Snow White the outsider.</p> <p><u><strong>It is a hopeful sign that people throughout the Washington-dominated world are discovering the power of &ldquo;nyet.&rdquo; </strong></u>The establishment may still look spiffy on the outside, but under the shiny new paint there hides a rotten hull, with water coming in though every open seam. A sufficiently resounding &ldquo;nyet&rdquo; will probably be enough to cause it to founder, suddenly making room for some very necessary changes. <strong>When that happens, please remember to thank Russia&hellip; or, if you insist, Putin.</strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="726" height="428" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160728_nyet.jpg?1469758494" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-28/power-nyet-how-one-word-staggered-imperial-washington#comments Cognitive Dissonance Donald Trump Iraq Turkey Fri, 29 Jul 2016 06:00:00 +0000 Tyler Durden 567631 at http://www.zerohedge.com Bank Of Japan Shocks Market, Shuns Government Pressure: Leaves QE, Rates Unchanged, Questions Policy Effectiveness http://www.zerohedge.com/news/2016-07-28/bank-japan-shuns-government-market-pressure-leaves-qe-rates-unchanged-questions-poli <p>Expectations were extremely high heading into tonight&#39;s BoJ decision, and market liquidity disappeared with massive violent swings in FX, rates, and equity markets before Kuroda unleashed his disappointing statement:</p> <ul> <li><strong>*BANK OF JAPAN TAKES ADDITIONAL ACTION</strong></li> <li><strong><u>*BOJ EXPANDS PURCHASES OF ETFS TO 6T YEN</u></strong></li> <li><strong>*BOJ DOUBLES USD LENDING PROGRAM TO $24B</strong></li> </ul> <p>But...</p> <ul> <li style="text-align: justify;"><strong><u>*BOJ MAINTAINS POLICY BALANCE RATE AT MINUS 0.100%</u></strong></li> <li style="text-align: justify;"><strong>*BOJ BOARD VOTES 7-2 TO KEEP NEG RATE UNCHANGED</strong></li> <li style="text-align: justify;"><u><strong>*BOJ MAINTAINS MONETARY BASE TARGET AT 80T YEN</strong></u></li> </ul> <p>Finally, details are emerging of the stimulus package, NHK reporting:</p> <ul> <li><strong>~7.5t yen of fiscal spending</strong></li> <li><strong>~6t for fiscal investment and loan financing program</strong></li> <li><strong><u>15,000 yen handouts for low-income people</u></strong></li> <li><strong>10.7t yen for infrastructure spending such as maglev line, ports</strong></li> <li><strong>10.9t in SME support to weather Brexit</strong></li> </ul> <p>And most fascinatingly...</p> <ul> <li><u><strong>*KURODA ORDERS ASSESSMENT OF POLICY EFFECTIVENESS NEXT MEETING</strong></u></li> </ul> <p>Raising doubts about the whole house of cards.</p> <p><u><strong>So to summarize, Kuroda left rates unchanged, left QE unchanged, implicitly raised doubts about the effectiveness of the world&#39;s monetray policy machinations.. and increased the stock market ETF buying to make sure that the illusion of normality is maintained.</strong></u></p> <p><a href="http://www.zerohedge.com/news/2016-07-28/all-eyes-tonights-boj-announcement-minor-snag-emerges">As we noted this afternoon,</a> the worst case for Yen shorts would be if the BOJ simply does what both the ECB and the Fed did in recent days and punts to September.. and sure enough: <u><strong>markets are unahppy...</strong></u></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_BOJ1.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_BOJ1_0.jpg" style="width: 600px; height: 407px;" /></a></p> <p>&nbsp;</p> <p>JGB Futures are crashing most sicne 2013...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_BOJ3.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_BOJ3_0.jpg" style="width: 600px; height: 316px;" /></a></p> <p>&nbsp;</p> <p>As 2Y Yields soar...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_BOJ4.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_BOJ4_0.jpg" style="width: 600px; height: 318px;" /></a></p> <p>&nbsp;</p> <p>Yen strength is weighing on US equity futures through the carry trade and gold is jumping...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_BOJ2.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_BOJ2_0.jpg" style="width: 600px; height: 400px;" /></a></p> <p>As one twitter-er noted so eloquently: <em><u><strong>US equities have rallied for weeks in part on BOJ expectations. Now nothing much, oil on its knees, earnings neg (still).. ok good luck buying</strong></u></em></p> <p>*&nbsp; *&nbsp; *</p> <p>As we detailed earlier, before the statement, <strong>32 of 41 analysts (the most in 3 years) expected an expansion of QQE2 </strong>shifting to ETFs (because that worked so well), but surprises will be hard to come by...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;It&rsquo;s Kuroda -- you can&rsquo;t underestimate what he is going to do,&rdquo; </strong>said Yasuhide Yajima, chief economist at NLI Research Institute.<em><strong> &ldquo;What&rsquo;s certain is that Kuroda has to do something extreme or unthinkable if he wants to surprise.&rdquo;</strong></em></p> </blockquote> <p>2Y JGB yields were screaming for moar....</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_jgb2.jpg"><img height="315" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_jgb2_0.jpg" width="600" /></a></p> <p>&nbsp;</p> <p>JGBs had been halted...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_jgb.jpg"><img height="321" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_jgb_0.jpg" width="600" /></a></p> <p>And FX market liquidity disappeared..</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_USDJPY5.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_USDJPY5_0.jpg" style="width: 600px; height: 317px;" /></a></p> <p>Total chaos. Nikkei Futs crash 600 points instantly...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_USDJPY6.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_USDJPY6_0.jpg" style="width: 600px; height: 407px;" /></a></p> <p>*&nbsp; *&nbsp; *</p> <p>Morgan Stanley economists Robert Feldman, Takeshi Yamaguchi and Shoki Omori, writing in the firm&#39;s Global Macro Summer Outlook, say Japan&#39;s policy approach is having weak short-term impact:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em><strong>&quot;The BOJ&rsquo;s negative interest rate policy (NIRP) has bull-flattened the yield curve, but has yet to improve the economy or prices; indeed NIRP may have worsened inflation expectations, and started a credit crunch for small businesses.&quot;</strong></em></p> </blockquote> <p><strong><span>The spectrum of forecasts includes a boost to government bond buying to as much as 100 trillion yen a year -- up from 80 trillion, quadrupling exchange-traded fund buying and cutting the policy interest rate to -0.3 percent. A more radical option: a pledge to maintain the BOJ&rsquo;s balance sheet in its forward</span><span> guidance</span><span>.</span></strong></p> <p><strong><span>Prime Minister<span>&nbsp;</span></span><span>Shinzo Abe</span></strong><span><strong>&rsquo;s government has added pressure</strong> for bolstering monetary stimulus at this meeting. Abe in a surprise announced his economic package on Wednesday, which economists including<span>&nbsp;</span></span><span>Daiju Aoki</span><span><span>&nbsp;</span>saw as an intention to pressure the central bank by showing the government it <span>is doing what it can to spur growth.</span></span></p> <p><span><span><strong><u>So this was a big disappointment.</u></strong></span></span></p> <p><span><span><strong>Some may see it as a step toward hitting policy limits, with growing concerns about the sustainability of the easing program. </strong>There&rsquo;s a limit to the amount of bonds in the market and the faster the BOJ buys them, the sooner it hits the ceiling. The size of the BOJ&rsquo;s balance sheet is now more than 80 percent of Japan&rsquo;s gross domestic product.</span></span></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_USDJPY4.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/25/20160728_USDJPY4_0.jpg" style="width: 600px; height: 297px;" /></a></p> <p>&nbsp;</p> <p>&nbsp;</p> <p><em><span><span>Charts: Bloomberg</span></span></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="963" height="507" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160728_BOJ3.jpg?1469766928" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-28/bank-japan-shuns-government-market-pressure-leaves-qe-rates-unchanged-questions-poli#comments Bank of Japan Bond Carry Trade Equity Markets Gross Domestic Product Japan Monetary Base Morgan Stanley Nikkei Yen Yield Curve Fri, 29 Jul 2016 03:54:21 +0000 Tyler Durden 567639 at http://www.zerohedge.com