http://www.zerohedge.com/fullrss2.xml/index.php/component/users en Global Stocks Slide, S&P Futures Tumble Below 50DMA As "Trump Trade" Collapses http://www.zerohedge.com/news/2017-03-27/global-stocks-slide-sp-futures-tumble-below-50dma-trump-trade-collapses <p>Global stocks are lower across the board to start the week, as concerns about Trump's administration to pull off a material tax reform plan finally emerge, pressuring S&amp;P futures some 20 points lower this morning, following European and Asian shares lower, while crude oil prices fall unable to find support in this weekend's OPEC meeting in Kuwait where a committee recommended to extend oil production cuts by another 6 months. Safe havens including the yen and bonds climbed as did gold, which continued its advance above the key resistance level of $1,250, while industrial commodities dropped.</p> <p>So-called "Trumpflation trades" - bets that Trump's pro-business policies would stoke growth and inflation in the U.S. and global economies, boosting assets such as commodities - came under heavy selling pressure.&nbsp; The dollar, whose index had surged more than 6 percent in the aftermath of Trump's election to hit 14-year highs at the start of 2017, slipped to its lowest since Nov. 11, two days after the results of the presidential vote. </p> <p>"Investors are viewing this setback as a broader loss of faith in the Trump administration’s ability to deliver on other campaign pledges - namely tax and spending policies, which have underpinned asset prices since the U.S. elections," said ING currency strategist Viraj Patel, in London.</p> <p>U.S. equity index futures suggested stocks would retreat for the seventh time in eight days, with S&amp;P futures sliding below the 50 DMA for the first time since the election.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/27/ES%20dma.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/27/ES%20dma_0.jpg" width="500" height="281" /></a></p> <p>The fall in risk appetite dominated European stockmarkets, with the pan-European STOXX 600 index falling 0.8 percent on the day led by the Basic Resources index which was the biggest sectoral loser, down 2 percent to a two-week low as copper prices slipped, while the banking index was down 1.3 percent. The Euro rose to the highest level of 2017...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/27/EURUSD%203.27.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/27/EURUSD%203.27_0.jpg" width="500" height="266" /></a></p> <p>... on the heels of a strong German IFO Business Climate reading, which rose to 112.3, beating expectations and above the last 111 print, indicative of a 3% GDP German print.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/27/ifo%20gdp.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/27/ifo%20gdp_0.jpg" width="500" height="262" /></a></p> <p>However, a potential red flag emerged in the latest monetary aggregate data out of the Eurozone, where M3 growth dipped from 4.9% to 4.7%, below the 4.9% expected, despite the ECB continuing its monetary blast at record levels, not to mention last week's massive TLTRO.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/27/Eurozone%20M3.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/27/Eurozone%20M3_0.jpg" width="500" height="264" /></a></p> <p>Bucking the weaker trend among European stocks were precious metal miners such as Randgold and Fresnillo, both up more than 1 percent, as risk aversion boosted gold. Gold prices climbed more than 1 percent to a one-month high of $1,259 an ounce.</p> <p>Attention today will remain fixed on Trump’s inability to push through the Republican healthcare bill through the House, which as noted last night, has derailed investor hopes that his pro-business agenda will pass smoothly through Congress. Reflation trades sparked by his election are faltering, with the dollar retreating and the S&amp;P 500 Index headed for its worst month since October. </p> <p>“Trump’s failure to get the health care bill through a Republican majority led Congress has raised some concerns about the President’s ability to implement his agenda of cutting taxes and raising infrastructure spending,” Ole Hansen, chief commodity strategist at Saxo Bank, <a href="https://www.bloomberg.com/news/articles/2017-03-26/wariness-engulfs-markets-as-trump-optimism-tested-markets-wrap">told Bloomberg</a>. </p> <p>“<strong>Failure would deflate further the months-long rally in stocks while reducing the need for further Fed action</strong>. The result of this has seen the dollar, stocks and bond yields lower which are all good news for investors looking for gold as an alternative.”</p> <p>The market reaction has been uniformly negative, with the MSCI Asia Pacific Index falling 0.3 percent, with more than three shares falling for every one advancing. Japan’s Topix led declines, dropping 1.3% to the lowest since Feb. 9 and almost wiping out gains for 2017. Chinese shares traded in Hong Kong fell 1.1% and India’s Sensex index slid 0.4 percent. </p> <p>Futures on the S&amp;P 500 lost 0.9 percent, or 20 points, to 2,324 as of 10:12 a.m. in London. The underlying gauge last week tumbled 1.4%, its worst week of 2017. The Stocks Europe 600 Index fell 0.6 percent as it was dragged down by miners and banks. In terms of relative valuations, U.S. stocks are trading well above their historical averages while Asia stocks are still broadly in line with theirs despite a recent bounce.</p> <p>WTI and Brent both dropped as markets looks past producers' soft committment to extend oil production cuts. A pledge by crude producers to consider extending their output-cut deal failed to excite oil bulls, with prices dropping as more time seen needed to trim swollen global stockpiles. Five OPEC producers joined with non-member Oman to voice support for prolonging supply curbs past June, with Kuwait saying it should be for an additional six months. Committee of ministers from Kuwait, Algeria and Venezuela and their counterparts from Russia and Oman that met over the weekend asked OPEC to review the market and give them a recommendation in April on rolling over the output reductions. Russia said it needs more time before making a decision. </p> <p>Oil prices rallied as OPEC, 11 other major producers including Russia agreed last year to slash production; the rally stalled this month as U.S. output, supplies have continued to grow. Libya’s biggest oil terminal was loading its first tanker since fighting earlier this month halted shipments. “There’s a lot of impatience when we continue to see builds in inventory and growing U.S. output,” Daniel Hynes, an analyst in Sydney at Australia &amp; New Zealand Banking Group, says in a Bloomberg Television interview. “The market’s definitely asking for it,” he says, referring to a deal extension.</p> <p>In rates, U.S. Treasury yields fell to a one-month low of 2.35%, while borrowing costs across the euro zone also fell sharply, as investors ditched riskier assets and unwound bets on higher inflation and interest rates.&nbsp; </p> <p><strong>Bulletin Headline Summary</strong></p> <ul> <li>European equities slip after US President Trump's healthcare bill collapsed, with markets now questioning whether Trump's other proposals can come to fruition.</li> <li>USD is on the backfoot, while EUR finds support early on with a data heavy week for the Eurozone kicking off to a strong start as German IFO data beats expectations.</li> <li>Looking ahead, highlights include comments from Fed's Evans and Kaplan</li> </ul> <p><strong>Market Snapshot</strong></p> <ul> <li>S&amp;P 500 futures down 0.8% to 2,325.00</li> <li>MXAP down 0.3% to 147.70</li> <li>MXAPJ down 0.1% to 478.21</li> <li>Nikkei down 1.4% to 18,985.59</li> <li>Topix down 1.3% to 1,524.39</li> <li>Hang Seng Index down 0.7% to 24,193.70</li> <li>Shanghai Composite down 0.08% to 3,266.96</li> <li>Sensex down 0.5% to 29,284.04</li> <li>Australia S&amp;P/ASX 200 down 0.1% to 5,746.70</li> <li>Kospi down 0.6% to 2,155.66</li> <li>STOXX Europe 600 down 0.7% to 374.02</li> <li>German 10Y yield fell 2.5 bps to 0.378%</li> <li>Euro up 0.6% to 1.0865 per US$</li> <li>Brent Futures down 0.7% to $50.47/bbl</li> <li>Italian 10Y yield fell 4.8 bps to 2.224%</li> <li>Spanish 10Y yield rose 0.4 bps to 1.697%</li> <li>Brent Futures down 0.7% to $50.47/bbl</li> <li>Gold spot up 1.1% to $1,257.71</li> <li>U.S. Dollar Index down 0.5% to 99.13</li> </ul> <p><strong>Top Overnight News</strong></p> <ul> <li>German Business Confidence Increases to Strongest Since 2011</li> <li>Trump Policy Travails Could Boost the Appeal of Asia’s Markets</li> <li>Lockheed’s $29 Billion Copter Poised to Win Pentagon’s Approval</li> <li>Apicorp in JV With Goldman Sachs for Energy Investments</li> <li>Goldman Sachs Said to Be in Talks for Saudi Equities License</li> <li>China Southern Says in Strategic Talks With American Airlines</li> <li>MoneyGram Enters Confidentiality Pact With Euronet Worldwide</li> <li>Fitbit Moves Toward Trial in Jawbone Trade Secrets Theft Case</li> <li>Coca-Cola to Add Fruit Juice to Fanta, Sprite in India: Standard</li> <li>Google Plans to Start Android Pay in S. Korea in May: ETNews</li> <li>Google Faces Demands for Ad Discounts After YouTube: FT</li> <li>Westinghouse Chapter 11 Filing May Come March 28: Nikkei</li> </ul> <p><strong>Asia equity markets traded mostly lower </strong>as the region digested the cancellation of the American Health Care Act vote on Friday due to insufficient support and the implications on the Trump reflation trade. This pressured US equity futures and Asia-Pac indices alike, with ASX 200 (-0.1%) also weighed by mining names after iron ore prices extended on last week over 7% declines. Nikkei 225 (-1.4%) underperformed on a firmer currency, while Shanghai Comp. (-0.1%) and Hang Seng (-0.7%) were choppy for much of the session as downside had been initially counterbalanced by several upbeat earnings and a 31.5% increase in Chinese Industrial Profits. 10yr JGBs traded higher as the cautious risk tone spurred safe-havens flows. However, upside was limited after the BoJ Summary of Opinions provided no surprises and the central bank also refrained from a Rinban announcement.</p> <p><em>Top Asian News</em></p> <ul> <li>Bonds Surge in India as Rupee Rally Spurs Bets of More Inflows</li> <li>China Said to Approve Carbon Quota Plans for National Market</li> <li>PBOC’s Zhou Signals Financial Opening Will Require Negotiation</li> <li>Don’t Fear This Selloff Is Investors’ Bold Call: Markets Live</li> <li>Skylark’s Largest Shareholder Bain to Sell Part of Its Stake</li> <li>Zhou Signals China Financial Opening Will Need Negotiation</li> <li>Korean Prosecutors Seek to Arrest Park on Graft Allegations</li> <li>Noble Group’s Elman Mixes Mea Culpa and Optimism Before Exit</li> <li>Hong Kong Stocks Decline as Developers Drop Amid Curb Concerns</li> </ul> <p><strong>European equities slip after US President Trump's healthcare bill collapsed, </strong>with markets now questioning whether Trump's other proposals can come to fruition. As such, there has been a notable broad based sell off as the negative sentiment spares no sector with very few stocks trading in positive territory include precious metal miners, which are being supported by their link with higher gold prices, while financials are providing the biggest drag to EU bourses. In terms of equity specific newsflow, Zurich underperforms in the SMI amid reports that the insurance firm is seeking raise EUR 8.6bIn via a capital increase. Fixed income markets have benefited from the risk averse tone, although the price action among spreads have been somewhat modest. Of note, as we approach the quarter-end, there has been notable corporate issuance.</p> <p><em>Top European News</em></p> <ul> <li>Oil Producers Consider Extending Output Cuts as Support Grows</li> <li>London Mansion Owners Turn to Airbnb as Buyers Turn Up Noses</li> <li>BOE Cites Brexit Among Financial Stability Risks for U.K.</li> <li>Cecabank Hires BBVA’s Head of Cash Equity Execution for New Unit</li> <li>Minsheng Investment Targets Elderly Care Groups Across Globe</li> </ul> <p><strong>In currencies, the Bloomberg Dollar Spot Index fell 0.5 percent. </strong>The yen rose 0.9 percent to 110.32 per dollar. The euro gained 0.5 percent to $1.0857 and the British pound added 0.8 percent.&nbsp;There is only one overriding theme the FX markets are trading off, and that is the failure of the Trump administration securing a vote to repeal Obamacare, abandoning proceedings late Friday. The initial response was to be ignored given liquidity issues, but this morning, traders have been left in no doubt as to where market sentiment lies. US Treasuries have been bid up as fiscal stimulus plans in the US have clearly suffered a blow, and watching the cash open on Wall Street, the latest sell off in risk/carry trade does not bode well. USD/JPY is an obvious casualty, but demand still reported ahead of 110.00, and given rate differentials, does not look out of place. EUR/USD has moved higher accordingly, pushing through 1.0850, but as noted, strong resistance levels of note at 1.0900 and 1.0950. Improving economic data in the EU has been a firm driver of trade, with last week's healthy PM! stats across the region backed up by a better than expected German Ifo survey today. Merkel's win in Saarland also supportive.<br />No jitters over Wednesday's scheduled activation of Article 50 as the Pound remains on the front foot. Cable has tested up to 1.2580 today, supported by the USD backdrop, but EUR/GBP also edging back under 0.8650 to put in a strong showing this morning.</p> <p><strong>In commodities</strong>, gold rose 1.1 percent to $1,257.28, heading for the highest close since Nov. 10. West Texas Intermediate oil slipped 0.7 percent to $47.62 a barrel, erasing an earlier gain of as much as 0.7 percent. Crude producers pledged to consider extending their pact limiting supply. Iron ore futures slid 3.9 percent, after briefly erasing gains for the year. The commodity surged in the opening weeks of 2017 following a surprise rally last year amid optimism about the demand outlook in China. Copper fell 1.3 percent and tin dropped 2 percent. A mixed bag of drivers in the commodity markets at the moment, but a clear move in precious metals in response to the USD drop as a result of the failure to secure a positive health care vote for the Trump administration. US Treasuries have garnered a bid and this has sent Gold cleanly through USD1250.00, trading a little shy of USD1260.00. Sliver still unable to regain USD18.00 however. Base metals largely in the red, but platinum and palladium getting real money demand out of the European car-makers. Copper has dipped below USD2.60, with a (temporary) resumption in the Escondida mine having a modest positive impact. Iron ore prices in China are taking a hit as reports of China stockpiles at the major ports unsettle the supply/demand balance — demand still relatively steady though. Oil prices continue to look on the heavy side, as any recovery now looks to rest on whether OPEC/non OPEC decide to extend the production cut agreement. Some argue that the existing output adjustments have not fed through to inventory levels.</p> <p><strong>We kick off things this morning </strong>in Europe with Germany where the March IFO printed at 112.3, beating expectations and rising from February's 111. The latest M3 money supply reading for the Euro area was released, and disappointed when it dipped from 4.9% to 4.7%, missing expectations. Over in the US the sole release is the Dallas Fed’s manufacturing survey for March. The Fed's Evans and Kaplan speak later in the day.</p> <p><strong>US Event Calendar</strong></p> <ul> <li>10:30am: Dallas Fed Manf. Activity, est. 22, prior 24.5</li> <li>1:15pm: Fed’s Evans Speaks on Economy and Policy in Madrid</li> <li>6:30pm: Fed’s Kaplan Speaks in College Station, Texas</li> </ul> <p>* * * </p> <p><strong>DB's Jim Reid concludes the overnight wrap</strong></p> <p>It'll be interesting to know what words Mr Trump spoke on Friday night after the healthcare bill vote was abandoned. Even though defeat is not encouraging for markets there's an element of "healthcare reform is dead, long live tax reform". I write this this morning fairly confused as to how to think about markets in the near term though. The best way to benchmark my thoughts is perhaps to look back at what we expected for 2017 at the end of last year and work out what's occurred relative to expectations and whether anything has changed. The view then was that ultimately central banks pulling back from extreme policy was good for animal spirits and also that Trump was ultimately good for growth. We also thought Europe would have lots of political near misses without a fatal blow. </p> <p>A combination of these near misses and the fact that there was plenty of opportunity to doubt the ability of Trump to be radical growth wise meant we thought we'd have plenty of pockets of volatility without it changing the end result of the year. So as we approach the end of the first quarter where do we stand. Well the aborted health care bill is such an example of doubting Trump's legislative abilities. However so far all it's done is cause a -1.44% sell off in the S&amp;P 500 last week (only the second down week in nine and the worst week since November last year) and a spike intraday on Friday of the VIX to 14.16 and briefly to the highest point of the year. It's still very low historically though so as yet there is no major damage done. This morning S&amp;P futures are -0.50% and as we'll see below sentiment has been a bit softer in Asia.</p> <p>Although the healthcare bill was always going to be a huge test of the new administration's ability to peruse aggressive legislation Mr Trump has so far refrained from being too confrontational in defeat and there seems to be a desire to 'learn' from any mistakes and move on to tax. However he did blame the Freedom Caucus in a tweet yesterday and before that cryptically tweeted that his followers should watch Jeanine Pirro on Fox News on Saturday. On the show she called for Paul Ryan to step down. So this is perhaps some sign of tension and frustration without things blowing up directly.</p> <p>Friday's failure does now increase the risks of further difficult negotiations going forward which Ryan hinted at on Friday night but the reality is that tax reform is of far more economic consequence than healthcare so the market could give the GOP some benefit of the doubt. Event risk should be higher now though and volatility should be higher. However while global growth numbers continue to be decent then the risk premium increases will be probably be more muted than we thought they might be when we published our 2017 outlook. Although we thought growth would hold up in 2017 it's probably surprised on the upside relative to our expectations.</p> <p>So net net it leaves us with similar views to the outlook. A decent year for risk but with the technicals slightly negative for credit and thus encouraging mildly wider spreads. We think Euro IG will outperform HY from this starting point and we expect higher yields. However perhaps the vol we were expecting won't be quite as large even if we think it's still coming.</p> <p>Moving on to the immediate future, this week will see the UK activate article 50 on Wednesday with the Scottish Parliament debating the proposed second independence referendum tomorrow. So watch out for plenty of headlines on these topics. I can't help but think that PM May will have something up her sleeve for announcement day. What I'm not too sure.</p> <p>While on the topic of politics, Mrs Merkel got an unexpected boost yesterday following a relatively comfortable victory in the state election in Saarland. Merkel’s CDU party secured 40.7% of the vote which is up from 35.2% in the 2012 election. The Social Democratic Party, led by new leader Martin Schulz, took home 29.6% which is down from 30.4% five years ago. The anti-immigration Alternative for Germany secured 6.2% of votes. While Saarland is small with just 1 million people, the strong result for Merkel comes following rising support for the SPD following the announcement of Schulz as the leader of the&nbsp; party. Indeed the last 2 opinion polls (Emnid and Infratest dimap) show that support between the two parties at a national level is tied. This compares to the start of the year when the CDU held a double digit lead over the SPD across the vast majority of pollsters. So it’s worth seeing if this result is reflected in the next round of polls.&nbsp; Two more regional elections are due to be held in May (Schleswig-Holstein and Northrhine Westpahlia) before the national election in September.</p> <p>Over in markets this morning there is definitely a slightly more negative tone sweeping through Asia to start the week. That is being reflected in the bid for safe havens with the Yen (+0.89%), Gold (+1.07%) and Treasuries (10y -4.8bps) all stronger. In equities the rally for the Yen isn’t helping the Nikkei (-1.51%) while the ASX (-0.25%) and Kospi (-0.57%) are also in the red. The Hang Seng and Shanghai Comp are little changed however.</p> <p>Staying in Asia for a second, another interesting story from the weekend comes from China where, in a bid to clamp down on further capital flows out of China, banks are asking property agents in Hong Kong not to accept mainland China issued UnionPay cards for home purchases. This follows similar curbs on high priced insurance products and speculative offshore corporate acquisitions. </p> <p>Moving on and quickly recapping Friday’s session. Despite the abandoned healthcare vote coming to a head late in the day the S&amp;P 500 did only finish down a fairly paltry -0.08% and with that in fact had its second best day in the last seven sessions. That said there’s plenty asking the question about whether or not we’re starting to see the unwind of Trump trades and while the headline moves haven’t been particularly eye catching, there is some evidence of it coming through at a domestic and stock specific level. The biggest loser on Friday in the S&amp;P was a company which supplies gravel for roads - Martin Marietta Materials which tumbled -2.93% - which perhaps reflects some fading hopes in the infrastructure trade. Meanwhile, while the move lower in rates has also clearly had a big impact US Banks declined -4.81% last week and are off nearly 8% from the March highs. Small caps – a decent barometer of domestic performance – also tumbled -2.65% last week and fell for the fourth week in five. So perhaps some evidence of pockets of weakness but the overall magnitude of the selloff has still been fairly muted in the grand scheme of things.</p> <p>At the other end of the risk spectrum Gold, which did actually edge down -0.13% on Friday, rallied +1.16% last week and is now back into positive territory month to date. In rates Treasuries didn’t move much on Friday but the 10y yield still finished down 8.8bps last week and is now down around 22bps from the intraday highs just two weeks ago. Finally the US Dollar, measured by the Dollar index, fell -0.67% last week and is now down -2.68% from the early month highs. </p> <p>Closer to home on Friday it was economic data rather than politics which stole the spotlight in Europe. Indeed it was the release of the flash March PMI’s which were the focus with the big news being a further improvement in the Euro area composite PMI this month to 56.7 (vs. 55.8 expected) – a rise of 0.7pts from February. With that the reading notched up a second consecutive cyclical high and encouragingly the growth appeared to be broad-based with both the services (+1pt to 56.5) and manufacturing (+0.8pts to 56.2) PMI’s rising. Regionally both France (+1.7pts to 57.6) and Germany (+0.9pts to 57.0) led the way for the acceleration with the data suggesting a marginal decline (-0.2pts) on average for the composite of the non-core. All in all our economists in Europe highlight that they see a more significant risk from the positive PMIs relative to their view as being for Q2. At its latest level, the euro area composite PMI is in line with the economy growing at between 0.7% and 0.8% qoq. Our economists’ moderate Q2 growth view (0.3%) is predicated on some slowdown in activity due to the political calendar. However, surveys have shown no sign of this having an effect thus far. With less reason to expect temporary effects to weigh on activity as in Q1 (e.g. the very cold January), they see the PMIs as presenting a clearer upside risk to their Q2 view than for Q1.</p> <p>Wrapping up the remaining data on Friday, in the US headline durable goods orders rose a slightly better than expected +1.7% mom in February (vs. +1.4% expected) however largely as a result of a surge in aircraft orders. Indeed core capex orders were -0.1% mom (vs. +0.5% expected). Meanwhile the flash March composite PMI in the US declined 0.9pts to 53.2 and a six month low with both the manufacturing (-0.8pts to 53.4) and services (-0.9pts to 52.9) readings lower. </p> <p>To this week’s calendar now. We’re kicking off things this morning in Europe with Germany where the March IFO survey is due out. The latest M3 money supply reading for the Euro area is also due this morning. Over in the US this afternoon the sole release is the Dallas Fed’s manufacturing survey for March. With little to highlight in Europe tomorrow, the focus will be on the US where we get the advance goods trade balance for February, wholesale inventories for February, consumer confidence for March, S&amp;P/Case-Shiller house price index for January and Richmond Fed manufacturing survey for March are due. Wednesday kicks off in Japan where retail sales and small business confidence data is due. Over in Europe the focus will be on the UK with the February money and credit aggregates data. In the US on Wednesday the only data due out is pending home sales. Turning to Thursday, during the European session the most notable data is due out of Germany where the first estimate of CPI in March is due. Also due out are various March confidence indicators for the Euro area. In the US on Thursday the early data is the third estimate of Q4 GDP and Core PCE, while initial jobless claims data is also due. The busiest day looks set to be reserved for Friday. In Japan we will get February CPI, industrial production and employment data, while in China the official manufacturing and non-manufacturing PMI’s for March are due. In Europe we’ll get CPI reports for France and the Euro area along with Q4 GDP in the UK and unemployment in Germany. In the US data due includes February personal income and spending reports, PCE core and deflator readings, the Chicago PMI for March and the final University of Michigan consumer sentiment reading revision.</p> <p>Away from the data the Fedspeak diary this week is packed. Today we see Evans and Kaplan speak, tomorrow we have George, Kaplan and Powell speaking along with Fed Chair Yellen (albeit at a conference which doesn’t suggest a focus on the economy or monetary policy), Wednesday see’s Evans, Rosengren and Williams speak, Thursday has Mester, Williams and Kaplan scheduled and Friday finishes with Kashkari. Away from that other important events this week include the BoE bank stress test scenarios today, a Scottish Parliament debate on a possible independence vote tomorrow and of course UK PM Theresa May officially triggering Article 50 on Wednesday.</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="1200" height="675" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/ES%20dma.jpg?1490610381" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-27/global-stocks-slide-sp-futures-tumble-below-50dma-trump-trade-collapses#comments Android ASX ASX 200 Australia Bain Bank of England Bank of Japan Basic Resources Bloomberg Dollar Spot BOE Bond Borrowing Costs British Pound BSE 30 Business Business Carry Trade Case-Shiller CDU party Central Banks Chicago PMI China Congress Consumer Confidence Consumer Sentiment Copper CPI Crude Crude Oil Dallas Fed Dallas Fed Donald Trump Economy Equity Markets Euro European Central Bank European Union Eurozone federal government Finance fixed flash Fox News France FT Westinghouse Chapter Futures contract Futures markets Germany goldman sachs Goldman Sachs Hang Seng 40 headlines Hong Kong India Initial Jobless Claims Japan Jim Reid Kuwait M3 Market Sentiment Michigan Monetary Policy Money Supply MSCI Asia Pacific New Zealand Nikkei Nikkei 225 Obamacare OPEC OPEC Organization of Petroleum-Exporting Countries Pentagon People's Bank of China Personal Income Precious Metals Price Action Price of oil Pricing Reality recovery Republican Party Richmond Fed Risk Premium S&P S&P 500 S&P futures S&P/ASX 200 Saxo Bank Scottish parliament SMI 20 Social Democratic party Stoxx 600 Stress Test Topix Trade Balance Trump Administration Trump's administration U.S. Treasury Unemployment University Of Michigan University of Michigan VIX Volatility West Texas Wholesale Inventories Yen Zurich Mon, 27 Mar 2017 10:38:55 +0000 Tyler Durden 591795 at http://www.zerohedge.com Mark Cudmore: "The Marginal U.S. Stock Trader Will Be Selling Rather Than Buying This Week" http://www.zerohedge.com/news/2017-03-27/mark-cudmore-marginal-us-stock-trader-will-be-selling-rather-buying-week <p><em>By Mark Cudmore, a former FX trader who writes for Bloomberg</em></p> <p><span style="text-decoration: underline;"><strong>U.S. Equities Face a Tough Week as the Love Has Gone</strong></span></p> <p>It’s going to be a long, tough week for U.S. equities. </p> <p>While there’s no need to overreact to the Trump administration’s very public failure to reform health care, the evidence suggests that the marginal U.S. stock trader will be selling rather than buying this week.</p> <p>Even if this wasn’t the key economic policy that equity investors were betting on, the failure is negative in two ways: his perceived ability to press through stimulus has been undermined, and he has even less fiscal ammunition now without health-sector cuts.</p> <p><strong>The reflation trade isn’t just being undermined from within the U.S. The pronounced slump in global commodity prices is much more damaging. And the U.K. triggering of Article 50 this week will create more negative headlines globally.</strong></p> <p>The volume-weighted average price for the S&amp;P 500 Index in 2017 is 2321.9 -- less than 1% below where the gauge finished Friday. That means that below that price, the average long from this year is offside. And we’re likely to get there soon since those that are still onside will want to lock-in some profit before quarter-end.</p> <p>As I argued in this column Thursday, the bullish U.S. equity trade was psychologically broken last week. This is not about being structurally bearish –- it’s about a lack of incentives to attract fresh cash in the short term.</p> <p>The love has faded. It can be rekindled in a couple of months’ time, but most likely at much lower prices.</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="600" height="375" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/trader%20two%20phones%202_11.jpg?1490608116" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-27/mark-cudmore-marginal-us-stock-trader-will-be-selling-rather-buying-week#comments Business headlines Market sentiment Mathematical finance Options S&P 500 Stock market Trump Administration Volume-weighted average price Mon, 27 Mar 2017 09:48:53 +0000 Tyler Durden 591794 at http://www.zerohedge.com This Is The Nightmare Scenario For The GOP: A $2 Trillion Funding "Hole" http://www.zerohedge.com/news/2017-03-26/nightmare-scenario-gop-funding-hole-much-2-trillion-bigger <p>When one strips away the partisan rhetoric and posturing, the practical impact of Friday's GOP failure to repeal Obamacare has a specific monetary impact: <strong>approximately $1 trillion. </strong></p> <p>Since the ObamaCare repeal bill would have eliminated most of the 2010 health law’s taxes, this would have lowered by a similar amount the revenue baseline for tax reform. Essentially, with the ObamaCare taxes gone, it would have been easier to pay for lowering tax rates. Now, if Republicans want to eliminate the ObamaCare taxes as part of tax reform and ensure the bill does not add to the deficit - which they need to do to assure Trump's reform process continues under Reconciliation, avoiding the need for 60 votes in the Senate - they will have to raise almost $1 trillion in revenue. </p> <p>In other words that - all else equal - is how much less tax cuts Trumps and the republicans will be able to pursue unless of course they somehow find a source of $1 trillion in tax revenue (or otherwise simply add to the budget deficit) to offset the Obamacare overhang.</p> <p>Considering Paul Ryan's statement on Friday, it appears that at least for the time being, Republicans would leave the ObamaCare taxes in place.&nbsp; “That just means the ObamaCare taxes stay with ObamaCare,” he said. “We’re going to go fix the rest of the tax code.” </p> <p>Ryan also pushed back on the idea that the setback on healthcare previews difficulties with other items on the legislative agenda&nbsp; “I don’t think this is prologue to other future things, because members realize there are other parts of our agenda that people have even more agreement on what to achieve,” he said. “We have even more agreement on the need and the nature of tax reform, on funding the government, on rebuilding the military, on securing the border.” </p> <p>While the failure to pass the healthcare bill makes tax reform harder, “it does not in any way make it impossible,” Ryan said. “We will proceed with tax reform, we will continue with tax reform." Earlier in the week, Treasury Secretary Steven Mnuchin said that the administration has been working on tax reform for two months and plans to release a plan in the near future. House Ways and Means Committee Chairman Kevin Brady added in a statement that Republicans on his panel “are moving full speed ahead with President Trump on the first pro-growth tax reform in a generation.” </p> <p>Still, quick action on legislation is unlikely; in fact while the market narrative changed on a dime last Friday, with traders now convincing themselves the delay of Obamacare means tax reform passes quicker, this is not the case. As Larry Lindsey, a former economic adviser for George W. Bush, told <a href="http://www.cnbc.com/2017/03/25/the-biggest-loser-after-obamacare-reforms-death-may-be-trumps-whole-agenda-analysts-say.html">CNBC's "Power Lunch" last Friday</a>, <strong>one of the "silliest" things he's heard from people is that the health-care proposal not passing will be good for Trump's tax reform. "Absolutely not," he added</strong>. </p> <p>A replacement for Obamacare "was necessary for budgetary reasons, for tax reform, because it was a revenue gainer," said Lindsey. Trump's goals for economic growth should also be questioned now, he warned.</p> <p>"They might move on to [tax reform] next, but when you have a president who can't deliver his own caucus, then the president's position will be weakened on all issues," Lindsey said. "<strong>If you're in Congress and you don't like something, you now have an example of how you can 'roll' the president."</strong></p> <p><strong>* * * <br /></strong></p> <p>But wait, there's more<strong>.</strong></p> <p>While the GOP will be hard pressed to find $1 trilion in offsetting savings or revenues, their headaches could be doubled if the proposed border adjustment tax fails to pass next. As a reminder, <strong>BAT is <a href="http://www.zerohedge.com/news/2017-02-09/senate-war-against-border-tax-begins">expected to generate as much as $1.18 trillion</a> in offsetting revenues;</strong> should BAT no be DOA, that's another $1.2 trillion in potential government revenues that is gone.&nbsp; <strong></strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/02/08/BAT%20impact.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/02/08/BAT%20impact_0.jpg" width="500" height="230" /></a></p> <p>According to James Pethokoukis of the American Enterprise Institute of Economic Policy, the fact that the Republicans failed to pass a health-care reform bill <strong>makes the odds that they will pass a border adjustment provision much smaller, </strong>and "the odds of getting a bigger stimulus plan will drop, too", he told CNBC on Friday. Investors "won't get to see cuts to a 15 to 20 percent tax rate" in corporate and marginal tax rates such as those Trump has proposed, Pethokoukis added. Instead, it will likely be closer to what Obama worked toward — something closer to a 30 percent tax rate, he said. It raised the specter of more discontent among Trump's longtime supporters, considering he campaigned on that specific promise. </p> <p>Echoing this sentiment, Jared Bernstein, a senior fellow from the Center on Budget and Policy Priorities, said in an interview that tax reform and the health-care proposal were "intimately connected for precise reasons. Trump once suggested achieving growth of 2 to 4 percent, but this might look more like 1 to 2 percent now because of budgetary constraints, he added. Now, the government has less money available to hit "high revenue targets," Bernstein said.</p> <p>Summarizing the above, as a result of Friday's failure, <strong>the tax revenue "hole" Republicans have to fill now is at least $1 trillion bigger, and perhaps as large as $2.2 trillion. </strong></p> <p>* * * </p> <p>But wait, there's even more.</p> <p>As the <a href="https://www.wsj.com/articles/republicans-tax-overhaul-could-face-its-own-slings-and-arrows-1490531899">WSJ writes overnight</a>, in theory rewriting the tax code could be easier than revamping the whole health-care industry. Republicans pride themselves on ideological unity in favor of lower tax rates. And the stakes appear lower for Americans -- paperwork and money are far different than matters of life and death. "Tax reform is less visceral," said Rep. David Schweikert (R., Ariz.) "I can pull up a calculator and say 'it's this or this'...it's hard legislating to anecdotes and stories." </p> <p><strong>But scratch deeper, and the GOP quest for a full overhaul of the tax code is fraught with squabbles, procedural hurdles and difficult trade-offs. </strong>The party's failure on health care - after having seven years to prepare - shows how hard it is for Republicans to write complex legislation that attracts support from their moderate and conservative wings. "It's just a reminder of how incredibly hard transformational legislation is," said John Gimigliano, a former GOP congressional tax aide now at KPMG LLP.</p> <p>As the WSJ adds, to succeed, Republicans need to bridge at least three big gaps.</p> <ul> <li><strong>First, they need to balance competing desires to cut tax rates sharply and to slow the rise of national debt</strong>. Republican leaders in Congress say they want a revenue-neutral plan - one that brings in about as much money as today's tax system. Faster economic growth might help, but it doesn't fully bridge the divide. To accomplish revenue neutrality while sharply lowering rates, they will attempt to whack popular tax breaks, such as business deductions of interest on debt and individual state and local tax deductions. They will meet resistance from groups that want to protect those breaks.</li> <li><strong>Second, they have to reconcile alternate visions of what they are setting out to accomplish and who will benefit. </strong>Mr. Trump has said his priority is middle-class tax cuts for individuals. "Not the top 1%," said Mr. Mnuchin. House Speaker Paul Ryan (R., Wis.) and Ways and Means Chairman Kevin Brady (R., Texas) want an overhaul primarily focused on promoting economic growth, even if that means tax cuts that favor the very top of the income scale. </li> <li><strong>The plans they all campaigned on are tilted to the top, according to independent analyses. </strong>Third, the party is at odds over the Ryan-Brady plan for border adjustment - taxing imports and exempting exports. The Trump administration has been ambivalent and sometimes critical of the idea. Senate Republicans are outright cold to it. Messrs. Ryan and Brady say it's crucial because it provides about $1 trillion to offset corporate-tax-rate cuts and it discourages companies from shifting profits abroad.</li> </ul> <p>None of those divisions inside the GOP have been resolved yet, and dozens more are lurking, including debates over tax breaks for renewable energy, credits that aid low-income households, and the treatment of carried interest income for private-equity managers.</p> <p>"The notion that tax is easier than health is not borne out by the facts, " a Senate GOP aide told the WSJ. "Having discussed health care for seven years, Republicans were 75% in agreement on the policy. On tax, none of the foundational questions have been answered."</p> <p>In short, the market is about to be significantly - perhaps "<em>tremendously</em>" - disappointed once again, and quite soon. </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="1280" height="711" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/trupm%20ryan.jpg?1490556695" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-26/nightmare-scenario-gop-funding-hole-much-2-trillion-bigger#comments 111th United States Congress American Enterprise Institute of Economic Policy Budget Deficit Business Center on Budget and Policy Priorities Congress Donald Trump Economic policy of Donald Trump Internal Revenue Code Internal Revenue Service Kevin Brady National Debt None Obamacare Omnibus legislation Patient Protection and Affordable Care Act Political debates about the United States federal budget Politics Presidency of Barack Obama Republican Party Senate Social Issues Tax Tax reform Tax Revenue Trump Administration United States Ways and Means Committee Mon, 27 Mar 2017 09:39:09 +0000 Tyler Durden 591774 at http://www.zerohedge.com Trump's Border Wall Plan Faces 3 Key Hurdles http://www.zerohedge.com/news/2017-03-26/trumps-border-wall-plan-faces-3-key-hurdles <p>President Donald Trump has now laid out exactly what he wants in the &quot;big, beautiful wall&quot; that he&#39;s promised to build on the U.S.-Mexico border. But, as <a href="http://hosted.ap.org/dynamic/stories/U/US_BORDER_WALL?SITE=AP&amp;SECTION=HOME&amp;TEMPLATE=DEFAULT&amp;CTIME=2017-03-26-08-11-21">AP&#39;s Alicia Caldwell reports</a>,<em><strong> his effort to build a huge hurdle to those entering the U.S. illegally faces impediments of its own</strong></em>.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170325_wal.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170325_wal.jpg" style="width: 409px; height: 251px;" /></a></p> <p>It&#39;s still <strong>not clear how Trump will pay for the wall</strong> that, as described in contracting notices, would be 30 feet (9 meters) high and easy on the eye for those looking at it from the north. The Trump administration will also have to contend with <strong>unfavorable geography and many legal battles</strong>.</p> <p><span style="text-decoration: underline;"><strong>A look at some of those obstacles:</strong></span></p> <h3><u>MONEY</u></h3> <p>Trump promised that Mexico would pay for his wall, a demand Mexico has repeatedly rejected. Trump&#39;s first budget proposal to Congress, a preliminary draft that was light on details, asked lawmakers for a $2.6 billion down payment for the wall. An internal report prepared for Homeland Security Secretary John Kelly estimated that a wall along the entire border would cost about $21 billion. Congressional Republicans have estimated a more moderate price tag of $12 billion to $15 billion. Trump himself has suggested a cost of about $12 billion.</p> <p>It&#39;s unclear how much money Congress will approve. Lawmakers have been balking at his plans to sharply cut other federal spending to pay for the wall and other boosts to border security, while increasing military spending. White House spokesman Sean Spicer told reporters this past week that the administration was still looking at how the wall would be funded, adding that it hasn&#39;t given up on Mexico footing the bill.</p> <h3><u>GEOGRAPHY</u></h3> <p>Roughly half of the 2,000-mile (3,200-kilometer) U.S.-Mexico border is in Texas and marked by the winding and twisting Rio Grande. A 1970 treaty with Mexico requires that anything built near that river not obstruct its flow. The same treaty applies to a stretch of border in Arizona, where the Colorado River marks the international boundary.</p> <p>Some fencing that is already in place along the frontier is built well off the river, in some places nearly a mile (about a kilometer) away from the border.</p> <p>Trump will have to navigate not only the treaty maintained by the International Boundary and Water Commission but also various environmental regulations that protect some stretches of border and restrict what kind of structures can be built and where. The contracting notices of March 17 say the Trump administration wants the wall dug at least 6 feet (almost 2 meters) into the ground. Along parts of the border in California, environmentally sensitive sand dunes required that a &quot;floating fence&quot; was built to allow the natural movement of the sand.</p> <h3><u>LEGAL CHALLENGES</u></h3> <p>Nearly all of the land along the Texas border is privately held - much of it by people whose families have been in the region for generations - and buying their land won&#39;t be easy, as Presidents George W. Bush and Barack Obama discovered. Lawyers for both administrations fought in court with private landowners. Obama&#39;s efforts to buy privately held land in the Rio Grande Valley have carried over into Trump&#39;s term.</p> <p>The Trump administration appears to be preparing for the legal fight and included a request for more lawyers to handle such cases in its budget proposal. Spicer said this past week the administration would &quot;take the steps necessary&quot; to fulfill Trump&#39;s promise to secure the southern border.</p> <p><a href="http://hosted.ap.org/dynamic/stories/U/US_BORDER_WALL?SITE=AP&amp;SECTION=HOME&amp;TEMPLATE=DEFAULT&amp;CTIME=2017-03-26-08-11-21"><em>ource: AP</em></a></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="409" height="251" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170325_wal.jpg?1490584697" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-26/trumps-border-wall-plan-faces-3-key-hurdles#comments American people of German descent Barack Obama Business career of Donald Trump Climate change skepticism and denial Congress Donald Trump Donald Trump International Boundary and Water Commission Last Week Tonight segments about Donald Trump Mexico Mexico–United States border Politics The Apprentice Trump Administration United States White House White House WWE Hall of Fame Mon, 27 Mar 2017 09:00:00 +0000 Tyler Durden 591791 at http://www.zerohedge.com London Mayor's Ties To Extremism Call Commitment To Fighting Terror Into Question http://www.zerohedge.com/news/2017-03-27/london-mayors-ties-extremism-call-commitment-fighting-terror-question <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">Via <a href="http://disobedientmedia.com/london-mayors-ties-to-extremism-call-commitment-to-fighting-terror-into-question/" target="_blank">Disobedient Media</a></p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">In 2016, Prime Minister&nbsp;<a href="http://archive.is/180N9" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">David Cameron</a>&nbsp;was widely criticized in the UK when he claimed that London mayor Sadiq Khan had ties to the terror group ISIS. An investigation by Disobedient Media has determined that Khan has ties not just to organizations associated with ISIS, but also groups such as Hamas, Al-Nusra, Al-Qaeda and the Muslim Brotherhood. During his time as mayor, London has seen an increase in terror incidents with concerning indications that terror groups wish to stage a major attack on the City of London. Rather than focusing on combatting terror, Khan has used his forum to tell Londoners as well as citizens in other parts of Europe and the United States that the West must learn to live with terrorism as a part of daily life. Khan's extreme flirtation with radical Islamic extremism raises serious questions about his commitment to fighting a wave of extremist fueled terrorism that only continues to spread after a number of attacks and police operations in London and other areas of the UK.</p> <h5 style="clear: both; margin-top: 56px; margin-bottom: 28px; font-size: 19px; line-height: 1.1052631579; color: #1a1a1a; font-family: Merriweather, Georgia, serif;">I. Khan Has Been Affiliated With Organizations Tied To Hamas, Al-Qaeda, Al Nusra, ISIS And The Muslim Brotherhood</h5> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"><strong>A. Khan's Relationship To Figures Tied To Hamas And The Muslim Brotherhood</strong></p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">Khan has openly associated in the past with individuals and organizations tied to Palestinian terror group Hamas. During his time as a legal advocate, Sadiq Khan served as the&nbsp;Chief Legal Advisor of the&nbsp;<a href="http://archive.is/RWtFj" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Muslim Council of Britain's</a>&nbsp;legal affairs committee. Khan was a member of a delegation organized by the&nbsp;<a href="http://archive.is/tklxK" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Muslim Council of Britain</a>&nbsp;in 2003 to protest what they described as "indiscriminate" arrests of Muslims for alleged terror ties. The Muslim Council of Britain was placed under&nbsp;<a href="http://archive.is/LDacv" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">investigation</a>&nbsp;by the British government over "irregularities" surrounding&nbsp;£1,263,000 in aid given to it by the government. In the past it has admitted to funding groups tied to both Hamas and Palestinian Islamic Jihad and is banned from Israel as a result of its ties to terror. On&nbsp;September 19th, 2004,&nbsp;<a href="http://archive.is/uX0Kk" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Khan</a>&nbsp;spoke at an event which included Ibrahim Hewitt; Hewitt has decreed on record that adultery should be punished by stoning. Hewitt serves as the Chairman of&nbsp;The Palestinian Relief and Development Fund (Interpal), an organization which has been labeled as a Terrorist Entity by the&nbsp;<a href="http://archive.is/OMZ7w" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">United States Department of the Treasury</a>&nbsp;for&nbsp;providing support to Hamas and acting as a part of its funding network in Europe. Despite the US Treasury's designation, Labour Party Leader&nbsp;<a href="https://vid.me/WZO7" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Jeremy Corbyn</a>&nbsp;has described Hewitt as a "very good friend."</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">That same year,&nbsp;<a href="http://archive.is/G7VE4" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Khan</a>&nbsp;spoke out in defense of Qatar-based Egyptian cleric&nbsp;Sheikh Yusuf al-Qaradawi, who has praised&nbsp;<a href="http://archive.is/sqvSx" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">suicide attacks</a>&nbsp;and decreed that&nbsp;<a href="https://vid.me/VbHH" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">homosexuality is a crime</a>&nbsp;under Islam. Qaradawi has&nbsp;<a href="http://archive.is/OKsuS" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">travelled directly to Gaza</a>&nbsp;for the purpose of providing Hamas with ideological legitimacy and stated that&nbsp;<a href="https://vid.me/I7yj" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Palestinian suicide attacks</a>&nbsp;against the nation of Israel are justified.&nbsp;Qaradawi was also&nbsp;<a href="http://archive.is/PYdXX#selection-917.81-917.180" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">barred from entering</a>&nbsp;into the United States in 1999, the UK in 2008, and France in 2012.&nbsp;In 2007, Khan and Jeremy Corbyn were present at a tenth anniversary celebration of the&nbsp;<a href="http://archive.is/SnARc" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Palestinian Return Centre</a>&nbsp;(PRC). The PRC is accused by the Israeli government of being affiliated with Hamas and had invited Hamas Minister of Refugee Affairs&nbsp;<a href="http://www.washingtoninstitute.org/html/pdf/PLCHandbook.pdf" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Atef Ibrahim Adwan</a>&nbsp;to speak at the same event the year before.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">While the&nbsp;<a href="http://archive.is/XsvM8" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Muslim Council of Britain</a>&nbsp;(MCB)&nbsp;claims to be non-sectarian, a&nbsp;<a href="http://archive.is/Cbqna" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">government report</a>&nbsp;released in 2015 revealed that supporters of the Muslim Brotherhood “played an important role in establishing and then running” the MCB and continues to exert "significant influence" in it. In 2009 the&nbsp;<a href="http://archive.is/z56lM" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">UK government</a>&nbsp;cut ties with the MCB after it&nbsp;signed a public document which appeared to condone violence against any country supporting an arms blockade of Gaza.&nbsp;The government report also found that a number of Brotherhood groups have for years been raising funds in the UK. Some of those funds have allegedly been linked to Hamas, whose military wing was proscribed by Britain as a terrorist organisation in 2001. The&nbsp;<a href="http://archive.is/hvwVV" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">MCB</a>&nbsp;was also criticized for its ties to&nbsp;<a href="http://archive.is/4qEkx" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Jamaat-e-Islami</a>,&nbsp;an Islamic group linked to a number of terror organizations in Pakistan whose members have been accused of war crimes in&nbsp;<a href="http://archive.is/5tjle" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Bangladesh</a>.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"><strong>B. Khan Supported&nbsp;Convicted Taliban&nbsp;Sympathizers</strong></p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">In 2009, Khan acted as a&nbsp;<a href="http://archive.is/EnPID" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">member</a>&nbsp;of an&nbsp;<a href="http://archive.is/5u10F" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">international campaign</a>&nbsp;which sought to resist attempts to extradite&nbsp;Babar Ahmad and Syed Talha Ahsan for their role in providing material support to the Taliban and Chechen jihadist groups via a number of websites they ran under the name of&nbsp;Azzam Publications. Ahmad and Ahsan were ultimately extradited to the United States, where they&nbsp;<a href="http://archive.is/yy4ws" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">pled guilty</a>&nbsp;to terrorism charges.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">Khan went to visit Babar Ahmad on multiple occasions between May 21, 2005 and June 2006, while he was being held in Woodhill prison&nbsp;awaiting a ruling on his extradition request. It was reported that Khan visited Ahmad, not in his capacity as an MP, but as a friend, as the two had known each other since&nbsp;<a href="http://archive.is/XhVTN#selection-1155.192-1155.210" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">they were children</a>.&nbsp;In September of 2005, in an attempt to thwart Ahmad’s extradition to the United States, Khan presented a petition containing&nbsp;<a href="http://archive.is/Y8jca#selection-2865.92-2865.110" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">18,000 signatures</a>&nbsp;to then Home Secretary Charles Clarke, calling for him to be tried in the UK instead. However, Ahmad was ultimately extradited to the US on October 5, 2012, where he was held in custody until his release in July 2015.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"><strong>C. Khan Has Involved Himself With Groups Connected To Al-Qaeda, ISIS and Al-Nusra</strong></p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">Sadiq Khan has historically maintained close relational and professional ties with groups associated with both Al-Qaeda and ISIS. During the 1990's, Khan's brother in law&nbsp;<a href="https://archive.is/yn7mn" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Makbool Javaid</a>&nbsp;gave fiery public addresses advocating jihad&nbsp;and whose&nbsp;name even appeared on a fatwa calling for holy war against the United Kingdom and United States. Javaid&nbsp;was a member of the Islamic group&nbsp;Al-Muhajiroun. Al-Muhajiroun was founded by Islamic hate preacher&nbsp;<a href="http://archive.is/buMmW" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Omar Bakri Muhammad</a>, who has been banned from the UK since 2005 and acted as a sponsor and recruiter of British jihadists seeking to join ISIS. Al-Muhajirou was also lead by&nbsp;<a href="https://vid.me/sYPQ" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Anjem Choudary</a>, a British Islamist who was&nbsp;<a href="http://archive.is/0pCUx" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">jailed</a>&nbsp;in 2016 for supporting the Islamic State after he&nbsp;<a href="http://archive.is/ODCIy" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">released guides</a>&nbsp;on making bombs and establishing "Muslim gangs" for the purpose of committing terror attacks. The guides are indicative of an increasingly tight relationship between organized crime and ISIS in Western Europe previously reported on by&nbsp;<a href="http://disobedientmedia.com/research-indicates-massive-isis-networks-in-europe-while-europol-warns-of-imminent-attacks/?to_id=1331&amp;from_id=1746" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Disobedient Media</a>. Other connections to&nbsp;<a href="http://archive.is/iZTmK" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Al-Muhajiroun</a>&nbsp;include Parliament attacker&nbsp;<a href="http://archive.is/16FdC" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Khalid Masood</a>,&nbsp;Lee Rigby's murderer&nbsp;<a href="http://archive.is/sJ0z5" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Michael Adebolajo</a>&nbsp;and&nbsp;<a href="http://archive.is/nD3pi" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Abdul Waheed Majeed</a>, an Al-Nusra affiliated militant who in 2014 became the first British born jihadist to carry out a suicide attack in Syria.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">While Khan has tried to distance himself from his brother in law and Al-Muhajiroun, in 2003 he shared a stage with&nbsp;<a href="https://archive.is/Ty4wr" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Sajeel Abu Ibrahim</a>, another member of Al-Muhajiroun and convicted terrorist who ran a camp in Pakistan which trained Taliban militants and Al-Qaeda 7/7 bomber&nbsp;Mohammad Sidique Khan. Also speaking at the same event was&nbsp;Yasser al-Siri, a terrorist who has been sentenced to death in absentia by Egyptian authorities&nbsp;over a political assassination attempt there which left a young girl dead.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">In 2004, Khan made an "error of judgement" by attending four meetings organized by&nbsp;<a href="http://archive.is/ieoN3" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Stop Political Terror</a>, a group supported by Al-Qaeda in the Arabian Peninsula senior recruiter Anwar al-Awlaki. Stop Political Terror was later merged with the Islamic organization CAGE, who represented&nbsp;the ISIS executioner "Jihadi John" (Mohammed Emwazi) as a "beautiful young man." Khan claimed that he was merely there as part of his efforts to help fight the extradition of convicted terrorist Babar Ahmed to the United States. He has furthermore stated that&nbsp;he condemns CAGE despite his appearances at events organized by their affiliates and the fact that he wrote a&nbsp;<a href="http://web.archive.org/web/20140318121550/http://www.irr.org.uk/pdf/FBA_counter_extraditions.pdf" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">forward</a>&nbsp;for a report run by CAGE in 2006.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">In 2008,&nbsp;reports revealed that Khan was serving&nbsp;as a legal consultant for convicted 9/11 plotter&nbsp;<a href="https://www.thelawyer.com/cowboy-courts/?nocache=true&amp;adfesuccess=1" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Zacarius Moussaoui</a>. It was&nbsp;further revealed that Khan was the&nbsp;<a href="http://archive.is/5V11U#selection-853.68-853.119" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">only practicing Muslim</a>&nbsp;on Moussaoui’s defense team. Moussaoui was ultimately extradited to the US, where he pled guilty to taking part in the 9/11 attacks. Moussaoui is currently being held at the Federal ADX Supermax prison in Florence, Colorado, where he is serving 6 life sentences without parole.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">Khan also regularly&nbsp;<a href="http://archive.is/FfdSS#selection-2131.1-2131.43" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">attended</a>&nbsp;Tooting Islamic Center (TIC), which was run by&nbsp;Suliman Ghani. Gani is a&nbsp;<a href="https://vid.me/MP3u" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">vocal supporter</a>&nbsp;of&nbsp;convicted&nbsp;Al Qaeda operative&nbsp;<a href="http://archive.is/s18iu#selection-585.2-585.103" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Aafia Siddiqui</a>, as well as a&nbsp;<a href="http://archive.is/bQGPD" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">supporter</a>&nbsp;of former&nbsp;Guantanamo Bay detainee&nbsp;<a href="http://archive.is/3WCKD#selection-2767.99-2767.156" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Shaker Aamer</a>. Khan has shared a platform with the controversial imam at least&nbsp;<a href="http://archive.is/5qtuK#selection-1951.32-1951.90" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">nine times</a>&nbsp;between 2004 and 2013.</p> <h5 style="clear: both; margin-top: 56px; margin-bottom: 28px; font-size: 19px; line-height: 1.1052631579; color: #1a1a1a; font-family: Merriweather, Georgia, serif;">II. Khan Has Used His Political Influence To Fuel Sectarianism And Has Routinely Failed&nbsp;To Speak Out Against Those Who Denigrate&nbsp;Women's Rights</h5> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"><strong>A. Promotion Of Sectarianism</strong></p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">Sadiq Khan claims that much of his association with various individuals and groups tied to jihad and terrorism was a result of his work as a human rights lawyer. However,&nbsp;<a href="http://archive.is/DMksc" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">The Daily Beast</a>&nbsp;has noted that Khan did not attend the majority of these events in his capacity as a lawyer at all.&nbsp;Khan has a long history of making off color comments justifying sectarianism and terror. He has repeatedly had to apologize for comments he has made smearing moderate Muslims and telling Europeans and Americans to expect terrorism as a part of living in metropolitan areas.&nbsp;In 2009, while serving as the "Minister for Community Cohesion," Khan was interviewed by Iranian-backed&nbsp;<a href="http://archive.is/OZHj3" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Press TV</a>. During the&nbsp;<a href="http://archive.is/2Mnqb" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">interview</a>, he referred to moderate Muslim groups who commonly lead the fight to curb Islamic extremism as “Uncle Toms."</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">While Khan apologized for the remark, he has had no qualms about fomenting sectarian strife against Islamic minorities for political gain. In 2010, while running for re-election as Shadow Justice Secretary, Khan worked with the&nbsp;<a href="http://archive.is/2vU7J" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Tooting Islamic Center</a>&nbsp;(TIC) to attack his political opponent, Nasser Butt based on his ties to the&nbsp;Ahmadiyya Islamic minority.&nbsp;The&nbsp;<a href="https://archive.is/5CNfU" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Muslim Council of Britain</a>&nbsp;also contributed to sectarian attacks against the Ahmadiyya community in the UK.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">In September 2016,&nbsp;<a href="http://archive.is/SB08O" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Khan</a>&nbsp;stated&nbsp;in the wake of the New York and New Jersey bombings, which injured 35 people&nbsp;that he believes the threat of terror attacks are simply “part and parcel of living in a big city."&nbsp;<a href="https://archive.is/SDgJN" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Khan</a>&nbsp;has demonstrated a ready willingness to&nbsp;label Scottish nationalism as promoting racism. Yet he was silent when huge crowds of Muslims descended upon London in December 2016 for a week of protests calling for the establishment of a global&nbsp;<a href="http://archive.is/ZJTcs" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Caliphate</a>. Protestors at the event openly waved flags and bore placards supporting the Taliban and&nbsp;Hizb ut-Tahrir Britain.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"><strong>B. Failure To Speak Out Against Marginalization Of Women</strong></p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">On many occasions, Khan has&nbsp;<a href="http://archive.is/oAswR" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">spoken</a>&nbsp;alongside individuals who promote Salafist principals advocating the abuse of women. In 2008, Khan was&nbsp;<a href="https://vid.me/roRg" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">filmed delivering a speech</a>&nbsp;at the Global Peace and Unity festival in 2008 organised by the Islam Channel. The Islam Channel was&nbsp;found guilty by &nbsp;the UK Office of Communications (Ofcom) of extremism both before and after the MP's appearance. Members of the audience during Khan's speech were openly waving the black flag of jihad and sporting headbands with extremist slogans written on them. The network's head,&nbsp;<a href="http://archive.is/71Xfy" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Mohamed Ali Harrath</a>&nbsp;was arrested on terror charges in South Africa after he was sought by Interpol and&nbsp;Tunisia due to his involvement with a militant group there.&nbsp;<a href="https://archive.is/JQHp6" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Ofcom</a>&nbsp;specifically criticized the Islam Channel for comments it made labeling women who wore perfume as prostitutes as well as for advocating marital rape and violence against women.</p> <div class="mceTemp" style="color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"> <dl id="attachment_2054" class="wp-caption aligncenter" style="margin-right: auto; margin-bottom: 28px; margin-left: auto; max-width: 100%; clear: both; background-color: transparent; border-style: none; text-align: inherit; width: 634px;"> <dt class="wp-caption-dt" style="font-weight: bold;"><img src="http://disobedientmedia.com/wp-content/uploads/2017/03/313E092600000578-3270034-image-a-1_1455574189063.jpg" width="634" height="463" style="height: auto; max-width: 100%; vertical-align: middle; display: block;" class="size-full wp-image-2054" /></dt> <dd class="wp-caption-dd" style="margin-bottom: 0px; margin-left: 0px; font-size: 13px; padding-top: 7px; color: #686868; font-style: italic; line-height: 1.6153846154;"> <dl id="attachment_2054" class="wp-caption aligncenter" style="margin-right: auto; margin-bottom: 28px; margin-left: auto; max-width: 100%; clear: both; background-color: transparent; border-style: none; color: #1a1a1a; font-size: 16px; font-style: normal; width: 634px;"> <dd class="wp-caption-dd" style="margin-bottom: 0px; margin-left: 0px; font-size: 13px; padding-top: 7px; color: #686868; font-style: italic; line-height: 1.6153846154;">Screenshot from a 2008 video of a speech by Sadiq Khan showing a spectator waving a jihadist flag</dd> </dl> </dd> </dl> </div> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">In addition to his appearances at events alongside individuals who have demeaned and denigrated women, Khan also accepts funding from financial backers who promote extremist figures who have repeatedly expressed contempt for women's rights. In 2016, the&nbsp;<a href="http://archive.is/zhvwu" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Daily Mail</a>&nbsp;revealed that Muslim millionaire&nbsp;Farouq Sheikh had donated&nbsp;£15,000 to Khan's mayoral campaign.&nbsp;Mr. Sheikh has also donated at least £150,000 over a three-year period to a charity founded by Dr Zakir Naik. Dr. Naik is a Indian cleric who has&nbsp;been barred from entering&nbsp;<a href="http://archive.is/IwmTV#selection-985.98-985.129" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Canada</a>&nbsp;and the&nbsp;<a href="http://archive.is/Gx9o7#selection-581.0-581.81" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">UK</a>&nbsp;after making very controversial comments exhorting&nbsp;Muslims&nbsp;to become&nbsp;terrorists&nbsp;as well as stating that "Jews are our staunchest enemy." Naik is also the founder and owner of&nbsp;<a href="http://archive.is/IwmTV#selection-997.0-997.46" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Peace TV</a>, which is believed to reach a global audience of nearly&nbsp;<a href="http://archive.is/zhvwu#selection-1199.153-1199.183" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">100 million</a>. Despite having such a large audience, Dr. Naik’s preaching has been&nbsp;<a href="http://archive.is/WCAlN#selection-1257.1-1271.14" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">banned</a>&nbsp;in India, Bangladesh, Canada, and the UK, due to the many extremely controversial statements he has made and beliefs he holds. In 2016,&nbsp;<a href="http://archive.is/S6fRw" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">The Huffington Post</a>&nbsp;condemned Naik over his comments supporting female sex slavery, beating one's wife, the death penalty for those who renounce Islam and the prohibition of homosexuality.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">In addition to taking funds from mutual supporters of Dr. Naik, Sadiq Khan has also advocated for groups which support his brand of extremism.&nbsp;In 2011, Khan defended a controversial organization known as iEngage, from being barred from involvement with the All Party Parliamentary Group. In Parliament, iEngage was described as having a&nbsp;<a href="http://archive.is/DMr7p#selection-7913.1-7919.60" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">track record</a>&nbsp;of aggressive anti-Semitism, homophobic, as well as having links to terror in Tunisia &amp; the Middle East. That same year, the Chief Executive of iEngage wrote a letter asking the Home Secretary to&nbsp;<a href="http://archive.is/oAswR#selection-3797.18-3797.189" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">lift the ban</a>&nbsp;that had been placed on Dr. Naik.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">Khan has also failed to address a growing epidemic of&nbsp;<a href="http://archive.is/2hi2g" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">acid attacks</a>&nbsp;in London;&nbsp;roughly 80% of victims of such attacks globally are on women. In 2016&nbsp;alone, London saw 431 acid attacks, a rise of over 170 cases from the previous year. The instances of attacks in London represent a rising number of crime related incidents as the city has grown increasingly lawless.</p> <h5 style="clear: both; margin-top: 56px; margin-bottom: 28px; font-size: 19px; line-height: 1.1052631579; color: #1a1a1a; font-family: Merriweather, Georgia, serif;">III. Authorities Have Sought To Minimize A Wave Of Terror Affecting London And The UK</h5> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">For well over a year now, London has been hit with a number of terror incidents. In some cases, these incidents appear to have been minimized by both authorities and the media in an attempt to stile public panic. Despite the denials by authorities in many cases, the confiscation abroad of large weapons shipments destined for London and the recent attack on Parliament makes it clear that the city's terror problem is more serious than is publicly acknowledged.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"><strong>October 6th, 2016:</strong>&nbsp;<a href="http://archive.is/vx2Pe" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">News World India</a>&nbsp;reported that police in Karachi, Pakistan had recovered the largest ever cache of NATO weapons in the hands of Islamic jihadists in the city’s history. Karachi’s police chief stated that the weapons were scheduled to be shipped to militant groups in London for a major operation they were planning. How the militants were able to acquire the massive supply of NATO arms is unclear.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"><strong>October 21st, 2016:</strong>&nbsp;<a href="http://archive.is/t2Eik" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">BBC News</a>&nbsp;reported a “chemical scare” at London City Airport. Paramedics treated 26 people at the scene and took two to hospital. The cause was claimed to be a&nbsp;CS gas spray which was “accidentally” released. The incident came several days after an&nbsp;<a href="http://archive.is/mwVa1" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">explosion</a>&nbsp;at facilities belonging to German chemical manufacturer BASF left two dead.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"><strong>November 9th, 2016:</strong>&nbsp;<a href="http://archive.is/mBGgv" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">BBC News</a>&nbsp;reported that a&nbsp;tram derailment in Croydon, London left seven dead and 50 injured. The driver was arrested on suspicion of manslaughter. The next day&nbsp;<a href="http://archive.is/c2kyU" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">The Guardian</a>&nbsp;cited a survivor of the crash who stated that the driver told him he had "blacked out." The story was then dropped from the press and not followed up on. ISIS has in the past targeted trains in a number of different geographic locales, including&nbsp;<a href="http://archive.is/s8bqP" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">India</a>&nbsp;and the&nbsp;<a href="http://archive.is/j9FJt" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">United States</a>.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"><strong>January 24th, 2017:</strong>&nbsp;The<strong>&nbsp;</strong><a href="http://archive.is/UAUTS" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Evening Standard</a>&nbsp;reported a huge explosion in Hornchurch, East London that sent five to the hospital. A Met Police spokesman said that two men were arrested on suspicion of arson. No further details were released about the suspects.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"><strong>February 8th, 2017:&nbsp;</strong><a href="http://archive.is/mztPG" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Metro</a>&nbsp;reported an explosion on an East London train where several were injured and passengers jumped onto the track in panic. The explosion was blamed on an “overheating battery.” The incident happened just hours after the&nbsp;<a href="http://archive.is/Ozrpx" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Daily Mirror</a>&nbsp;reported an explosion on the Paris metro which injured eight passengers and forced dozens to evacuate. The media immediately reported that the blast was caused by an “electrical fire” despite also reporting that it was unclear what caused the explosion.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"><strong>February 27th, 2017:</strong>&nbsp;<a href="http://archive.is/44Ps7" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">The Express</a>&nbsp;reported that a junction in Shoreditch high street in London was evacuated and bomb squad trucks&nbsp;called in to deal with what they said was a "suspected explosive device." Police stated afterward that the device was an "inert WWII bomb." How a WWII era munition had managed to sit undetected next to an incredibly busy intersection of London for decades was not explained.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"><strong>March 14th, 2017:&nbsp;</strong><a href="http://archive.is/GG77H" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">The Evening Standard</a>&nbsp; reported that a 60-year-old man was stabbed by a machete-wielding attacker outside of the&nbsp;Horse and Groom pub in London. The attacker was arrested by the&nbsp;Met Police and no further information was released.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"><strong>March 22nd, 2017:</strong>&nbsp;A&nbsp;<a href="http://disobedientmedia.com/london-suffers-double-terror-attack-parliament-westminster-bridge/" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">terror attack</a>&nbsp;targeting Westminster Bridge and Parliament has resulted in over 40 injuries and five dead, including an attacker. Authorities stated that the assailant acted alone despite multiple eyewitnesses claiming they saw multiple assailants during the attack.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"><strong>March 23rd, 2017:</strong>&nbsp;<a href="http://archive.is/UKMSV" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Londoners</a>&nbsp;reported a series of blasts coming from inside the city the day after the attack on Parliament.&nbsp;<a href="http://archive.is/zvxbp" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">The Express</a>&nbsp;subsequently reported that authorities had destroyed a suspicious package near the scene of the previous day's attack in a controlled demolition. Police also&nbsp;<a href="http://archive.is/2uS99" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">raided</a>&nbsp;six addresses in London, Birmingham and other areas of the UK in the aftermath of the terror incident, undermining official claims that the Parliament attacker had acted alone.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"><strong>March 25th, 2017:</strong>&nbsp;The London Met responded in force to an&nbsp;<a href="http://disobedientmedia.com/london-met-insists-no-terror-in-islington-incident-despite-presence-of-weapons/" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">incident</a>&nbsp;where a car ran over multiple pedestrians in the Islington area. Despite the Met's insistence that terrorism was not a factor, multiple knives were recovered from the scene invoking&nbsp;striking similarities to the Parliament attack just days earlier. The Islington incident occurred on the same day as a&nbsp;<a href="http://archive.is/4iTmr" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">massive explosion</a>&nbsp;in the&nbsp;town of New Ferry on Merseyside that authorities attributed to&nbsp;a gas leak.</p> <h5 style="clear: both; margin-top: 56px; margin-bottom: 28px; font-size: 19px; line-height: 1.1052631579; color: #1a1a1a; font-family: Merriweather, Georgia, serif;">IV. Conclusion</h5> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">David Cameron's 2016 attempts to foster a conversation about the Mr. Khan ties&nbsp;to extremism resulted in detractors branding him as a rampant racist.&nbsp;Yet the extremely concerning connections between Sadiq Khan and those who participate in terror, promote extremist ideologies and advocate for the marginalization of women's and LGBT rights raise very serious concerns about Khan’s willingness to take a firm stand against the threats facing London. Khan has shown that he has no qualms about fostering sectarian persecution against religious minorities not in line with mainstream Sunni Islam when it benefitted him politically. His unique history shows that he is prone to protecting the interests of his own cultural peers, but not those who differ from him culturally. As London descended into what appears to be a weekend of terror, it is apparent that the city faces these threats without a leader who is&nbsp;ready to take a bold stance to protect those who look up to him for guidance and protection.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"><em>This article&nbsp;was&nbsp;co-authored with&nbsp;Kenneth Whittle of Loyola University New Orleans College of Law</em></p> <div class="field field-type-filefield field-field-image-blog"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_blog" width="2560" height="1536" alt="" src="http://www.zerohedge.com/sites/default/files/images/user240135/imageroot/sadiq-khan-mp-at-westmins-014.jpg?1490592371" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-27/london-mayors-ties-extremism-call-commitment-fighting-terror-question#comments Al-Muhajiroun Al-Qaeda al-Qaeda Anti-Shi'ism Anwar al-Awlaki B+ British government Department of the Treasury Extremism France Hamas Hizb ut-Tahrir Britain India Interpol ISIS Islam Islamic Center Islamic extremism Islamic fundamentalism Islamic State of Iraq and the Levant Islamism Islamist groups Israel Israeli government Jamaat-e-Islami Karachi’s police Labour Party Loyola University New Orleans College Loyola University New Orleans College of La Met Police Middle East Middle East Mohammad Muslim Brotherhood Muslim Brotherhood Muslim Council of Britain Nationalism New Orleans North Atlantic Treaty Organization Palestinian Islamic Jihad Palestinian Relief and Development Fund Palestinian Return Centre Politics Taliban Tooting Islamic Center U.S. Treasury UK Government UK office of Communications United Kingdom United States Department of the Treasury Wahhabism War western Europe Yusuf al-Qaradawi Mon, 27 Mar 2017 08:30:00 +0000 William Craddick 591793 at http://www.zerohedge.com "We've Reached Our Limits" - Greece Begins Blocking Refugees http://www.zerohedge.com/news/2017-03-26/weve-reached-our-limits-greece-begins-blocking-refugees <p><strong><em>Greece will cease taking back refugees under the controversial Dublin Regulation,</em></strong> as the country&rsquo;s limited capacities to host people are already on the brink of collapse, the Greek migration minister announced in an interview.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170325_greece.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170325_greece.jpg" style="width: 600px; height: 314px;" /></a></p> <p><a href="https://www.rt.com/news/382334-greece-refugees-stop-resettlement/"><em>RT reports</em></a> that as the European Commission pressures Athens to re-implement the Dublin Regulation &ndash; stipulating that refugees can be returned to the first EU state they arrived in &ndash; the <strong>Greek migration minister told&nbsp;<a href="http://www.spiegel.de/politik/ausland/griechenland-wir-koennen-keinen-einzigen-fluechtling-zusaetzlich-unterbringen-a-1140403.html" rel="noopener noreferrer" target="_blank">Spiegel&nbsp;</a>his country is not in a position to do so.</strong> The agreement was put on hold for Greece back in 2011 over problems in the country&rsquo;s asylum system.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;Greece is already shouldering a heavy burden,&rdquo;</strong>&nbsp;Ioannis Mouzalas, the migration minister, said.</p> <p>&nbsp;</p> <p>&ldquo;<strong>We accommodate 60,000 refugees... and it would be a mistake to make Greece&rsquo;s burden heavier</strong> by the revival of the Dublin agreement,&rdquo; he said, also adding that Germany, the primary destination for most refugees, &ldquo;wants countries where refugees arrive first to bear a large portion of the burden.&rdquo;</p> <p>&nbsp;</p> <p>Asked if Athens is ruling out implementation of the Dublin Regulation, Mouzalas answered in the affirmative, adding, &ldquo;<strong><em>I want the Germans to understand that this is not because of political or ideological reasons, or failure to appreciate Germany&rsquo;s assistance.</em></strong>&rdquo;</p> <p>&nbsp;</p> <p><em><strong>&ldquo;Greece simply has no capacities to cope with additional arrival of refugees,&rdquo; </strong></em>he said. &ldquo;We&rsquo;ve just pulled ourselves together, so please, don&rsquo;t make us falter again.&rdquo;</p> <p>&nbsp;</p> <p>At this stage, Mouzalas said, Greece is ready to accommodate only a small number of refugees as a symbolic gesture, showing &ldquo;that we&rsquo;re not opposed to the Dublin agreement.&rdquo;<strong> Greece &ldquo;reached its limits&rdquo; and &ldquo;we can&rsquo;t bring in a single refugee,&rdquo;</strong> he reaffirmed, appealing &ldquo;to the common sense of Europe.&rdquo;</p> </blockquote> <p>Human rights groups warn that imminent transfers from other EU countries back to Greece in line with the regulations are<strong> likely to cause more refugees than ever to go underground in western European countries</strong>, as many are desperate to stay there because of family links or successful attempts to start a new life. The scheme also adds even greater pressure to existing refugee facilities in Greece and beyond.</p> <p>Of course, should Greece really go against Merkel&#39;s dream of assimilation, she will simply unleash further <em>austerical despair </em>on the nation in return for their next bailout. <strong>How much longer will the Greeks take it?</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="778" height="407" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170325_greece.jpg?1490584330" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-26/weve-reached-our-limits-greece-begins-blocking-refugees#comments Aftermath of war Article 13 of the European Convention on Human Rights Demography Dublin Regulation Europe European Commission European migrant crisis European Union Forced migration Germany Greece Greece Refugee Refugees of the Syrian Civil War Right of asylum Social Issues Mon, 27 Mar 2017 08:15:00 +0000 Tyler Durden 591790 at http://www.zerohedge.com Europe Unveils New Gun Laws: "Like Putting A Band-Aid On A Bullet Wound" http://www.zerohedge.com/news/2017-03-26/europe-unveils-new-gun-laws-putting-band-aid-bullet-wound <p><a href="https://www.sovereignman.com/"><em>Authored by Simon Black via SovereignMan.com,</em></a></p> <p><strong>The EU has almost regulated firearms enough to keep people completely safe from terrorism. Just one more law, and they should be able to usher Europe into a new age of utopian peace.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170325_EUGuns.jpg"><strong><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170325_EUGuns.jpg" style="width: 228px; height: 147px;" /></strong></a></p> <p><span style="text-decoration: underline;"><strong>What happened:</strong></span></p> <p>The European Parliament<a href="http://www.europarl.europa.eu/news/en/news-room/20170308IPR65677/parliament-approves-revised-eu-gun-law-to-close-security-loopholes"> passed a bill </a>this month which <strong>closes loopholes in regards to &ldquo;acoustic&rdquo; and &ldquo;deactivated&rdquo; prop guns to make them irreversibly unusable</strong>.</p> <p>If the law passes the Council of Ministers, it will also apply s<strong>tricter regulations on semi-autos </strong>with high capacity magazines.</p> <p>Included in the bill are obligations of <strong>member states to monitor the issuance of firearms licenses, and share that information across the EU. </strong></p> <p>Countries in the EU will have <strong>30 months to implement the required procedures</strong> for tracking firearms.</p> <p><span style="text-decoration: underline;"><strong>What this means: </strong></span></p> <p>With so much focus on tracking firearms, it is interesting to note that <strong>one of the weapons used in the Paris terror attacks may have been acquired through &ldquo;Operation Fast and Furious,&rdquo;</strong> where the ATF purposely leaked guns into criminal hands for the supposed purpose of tracking them.</p> <p>But yes, why doesn&rsquo;t the European Parliament simply require more tracking of guns, since it <strong>has worked so well in the past. </strong></p> <p>And then of course we will have to <span style="text-decoration: underline;"><strong>ban trucks,</strong></span> since those have been used in multiple terror attacks across Europe.</p> <p>Because the root of the issue is access to items that could be used as weapons, right? <span style="text-decoration: underline;"><strong><em>It has nothing to do with deep ideological differences of people from a region plagued by war. </em></strong></span></p> <p>The EU passing more gun laws is <strong>like putting a bandaid on a bullet wound. </strong></p> <p>The vice grip of government tightens; as always <strong>they say just a little more control will keep everyone safe.</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="228" height="147" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170325_EUGuns.jpg?1490583734" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-26/europe-unveils-new-gun-laws-putting-band-aid-bullet-wound#comments 21st century in the United States ATF gunwalking scandal Bureau of Alcohol, Tobacco, Firearms and Explosives Council of Ministers European Parliament European Union Law Organized crime Overview of gun laws by nation War Mon, 27 Mar 2017 07:30:00 +0000 Tyler Durden 591789 at http://www.zerohedge.com Trump Handed Merkel $375 Billion Invoice For NATO Defenses During Recent Visit http://www.zerohedge.com/news/2017-03-26/trump-handed-merkel-375-billion-invoice-nato-defenses-during-recent-visit <p>A couple of weeks ago we wrote several notes about German Chancellor Angela Merkel's painfully awkward visit to the White House.&nbsp; After meeting in private, the pair sat down in the oval office for a brief press conference where you could cut the tension with a knife.&nbsp; At one point someone from the media asked for a handshake but the request was promptly ignored.</p> <blockquote class="twitter-video"><p dir="ltr" lang="en">"Can we get a handshake?"</p> <p>*Merkel looks at Trump*</p> <p>*Trump grins*</p> <p>*Press is ushered out without any handshake* <a href="https://t.co/dKxu5C5X9Y">pic.twitter.com/dKxu5C5X9Y</a></p> <p>— Steve Kopack (@SteveKopack) <a href="https://twitter.com/SteveKopack/status/842777050830266368">March 17, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>&nbsp;</p> <p>Now, a couple of weeks later, we learn what may have prompted some of the tension in the room between Merkel and Trump that day.&nbsp; According to a new report from <a href="http://www.thetimes.co.uk/article/germany-dismisses-white-houses-intimidating-300bn-bill-for-defence-dl7dk629k">The Times of London</a> today, <strong>Trump apparently took advantage of Merkel's visit to Washington D.C. to pass her a $375 billion invoice for 'overdue' NATO defense expenses.</strong>&nbsp; Per <a href="http://thehill.com/homenews/administration/325847-donald-trump-printed-out-made-up-ps300bn-nato-invoice-and-handed-it">The Hill</a>, Merkel largely ignored the invoice though it certainly seems to have accomplished it's goal of ruffling some feathers.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>“The concept behind putting out such demands is to intimidate the other side, but the chancellor took it calmly and will not respond to such provocations,” </strong>a German minister told the newspaper.</p> <p>&nbsp;</p> <p>Trump during his presidential campaign railed against the NATO alliance and has called for member countries to increase defense spending to support the organization.</p> <p>&nbsp;</p> <p><strong>Merkel “ignored the provocation,”</strong> the Times said.</p> </blockquote> <p>As reported, the invoice was based on a 2014 pledge from NATO countries to spend 2% of their GDP on national defense.&nbsp; As such, <strong>Trump allegedly instructed aides to calculate how much German spending fell below that 2% target for the past 12 years, added interest and created an invoice which he hand delivered.</strong></p> <p>Meanwhile, with the benefit of this new information, Trump's tweets from March 18th, after his meetings with Merkel, take on all new meaning.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Despite what you have heard from the FAKE NEWS, I had a GREAT meeting with German Chancellor Angela Merkel. Nevertheless, Germany owes.....</p> <p>— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/843088518339612673">March 18, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">...vast sums of money to NATO &amp; the United States must be paid more for the powerful, and very expensive, defense it provides to Germany!</p> <p>— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/843090516283723776">March 18, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>&nbsp;</p> <p>And while Merkel has largely ignored the invoice, other German ministers have decided upon more aggressive responses.&nbsp; Per the <a href="http://www.independent.co.uk/news/world/americas/us-politics/donald-trump-angela-merkel-nato-bill-defence-ignore-usa-germany-spending-a7650636.html">Independent</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>In response to the claims, German defence minister Ursula Von der Leyen rejected the notion the European nation owed the US or Nato.</p> <p>&nbsp;</p> <p>She issued a statement saying: “There is no debt account at Nato</p> <p>&nbsp;</p> <p><strong>“Defence spending also goes into UN peacekeeping missions, into our European missions and into our contribution to the fight against [Isis] terrorism.”</strong></p> <p>&nbsp;</p> <p>Her comments were backed by Ivo Daalder, permanent representative to Nato from 2009 to 2013 under the Obama administration, who queried the President’s understanding of the organisation.</p> <p>&nbsp;</p> <p>He tweeted: <strong>“Sorry Mr President, that’s not how Nato works. The US decides for itself how much it contributes to defending Nato.</strong></p> <p>&nbsp;</p> <p><strong>“This is not a financial transaction, where Nato countries pay the US to defend them. It is part of our treaty commitment.”</strong></p> </blockquote> <p>Never a dull moment in the Trump White House.</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="648" height="399" alt="" src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017.03.25%20-%20Merkel.JPG?1490554499" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-26/trump-handed-merkel-375-billion-invoice-nato-defenses-during-recent-visit#comments Angela Merkel Business Donald Trump Foreign policy of the Angela Merkel government German Lutherans Germany Germany Government House of Leyen Military NATO Newspaper North Atlantic Treaty Organization Obama Administration Obama administration Politics Politics Politics of Germany Twitter Twitter United Nations Ursula von der Leyen War Washington D.C. White House White House Mon, 27 Mar 2017 06:45:00 +0000 Tyler Durden 591771 at http://www.zerohedge.com Are America And China Destined For War? http://www.zerohedge.com/news/2017-03-26/are-america-and-china-destined-war <p><em><a href="http://www.strategic-culture.org/news/2017/03/26/are-america-and-china-destined-for-war.html">Authored by Harry Kazianis via The Stratgeic Culture Foundation,</a></em></p> <p>In&nbsp;his recent book The Improbable War, professor Christopher Coker explains that <em><strong>it is &ldquo;of vital importance that the possibility of a conflict between China and the United States continues to be discussed.&rdquo;</strong></em> Coker&rsquo;s rationale for this is simple: <strong><em>&ldquo;If the United States and China continue to convince themselves that war is too &lsquo;improbable&rsquo; to take seriously, it is not they but the rest of the world that may ultimately pay the price.&rdquo;</em></strong></p> <p>It would seem the good professor&rsquo;s wish is about to be granted. We are about to be treated to what surely will be a media blitz over what can only be described as<strong> the most comprehensive book to ever tackle the question of not only whether a US-China war is possible, but what steps Washington and Beijing can take to avoid such a calamity.</strong></p> <p>Written by one of the world&rsquo;s most prominent political scientists and strategic thinkers of the day, director of Harvard University&rsquo;s Belfer Center, Graham Allison, anyone who has been following China in recent years likely guessed such an effort was in the works. The book is hooked on Allison&rsquo;s popular &ldquo;Thucydides Trap&rdquo; concept. The trap, as Allison described in a prominent piece for the Atlantic in 2015, is &ldquo;the attendant dangers when a rising power rivals a ruling power &mdash; as Athens challenged Sparta in ancient Greece, or as Germany did Britain a century ago.&rdquo; Allison goes on to warn that in 12 of 16 cases he has studied throughout history, when such a situation takes place, war has been the result.</p> <p><span style="text-decoration: underline;"><strong>US&nbsp;and China: A relationship in dangerous flux</strong></span></p> <p>So what happens in case study number 17? <strong>Knowing the odds history has given us, is war between China and America unstoppable?</strong></p> <p>To answer such questions, we first need to understand the complexity that is the US-China relationship. In fact, there are two US-China relationships.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>The first, is the economic relationship. </strong>At least until the election of Donald Trump, many scholars and Asia hands would argue that both sides prospered from their deep economic ties. US-China bilateral trade in goods and services has skyrocketed since the two nation&rsquo;s opened their doors to each other in 1971 and is now more than US$600 billion per year. Trade between both Washington and Beijing has made both countries wealthier with millions of jobs created on both sides of the Pacific.</p> <p>&nbsp;</p> <p><strong>The second part is the strategic relationship</strong> &mdash; something that was bound to become strained after the collapse of the Soviet Union, the real threat that brought America and China together. Without a common foe, tensions on both sides have begun to grow. Washington and Beijing now face off in various parts of the Asia-Pacific with no letup in sight.</p> </blockquote> <p><strong>Such an odd, dual-sided relationship, filled with equal promise and peril, made sense for decades.</strong> When times got tough &mdash; look no further than the 1995-1996 Taiwan Crisis, the 1999 Chinese Embassy bombing, the 2001 EP-3 Crisis and many other smaller incidents &mdash; the dangers of severing the economic relationship always seemed to smooth out any talk of a rupture. But with Trump and advisers such as Death by China author Peter Navarro calling into question the economic benefits of trade with Beijing, the one thing that always seemed to anchor relations in times of trouble seems to be at an end.</p> <p><u><em><strong>Why Destined for War is a must read:</strong></em></u></p> <p>To be fair, there are many great articles, long-form pieces and books that detail the dangers of a US-China military clash and how to avoid it. So why read this one?</p> <p>I offer three reasons: <strong>Comprehensiveness, readability and telling hard truths most Asia experts here in Washington won&rsquo;t want to hear.</strong></p> <p>In the interests of full disclosure, I have published Allison&rsquo;s works on many occasions as Executive Editor of the National Interest, but Allison&rsquo;s efforts in Destined for War will surely be praised, and for good reasons.</p> <p>Any Asia hand will quickly be floored by the level of detail and research the manuscript includes. With a grounding in history, Allison takes his readers on a journey through many <strong>similar cases in the past where a rising nation challenged a status-quo power,</strong> detailing where things went wrong, and, in some instances, <strong>how war was avoided. </strong>This is all done in a style that makes the book a real page turner, written in a prose that is easy to understand, never getting bogged down in often pointless jargon, tables, graphs or pie-charts. Allison&rsquo;s ideas flow easily, no matter how frightening they are.</p> <p>But some will likely have a problem with some of what the work offers. For example, he compares Xi Jinping and Donald Trump as two men who have similar goals: to make their nations great again. At the same time, Allison boldly, and quite correctly, couches China&rsquo;s quest for primacy in Asia as something like what the United States did when it rose to power almost a century ago. <em><strong>While clearly stating that China has not acted as aggressively as America did in the past, especially back around the turn of century during the time of President Theodore Roosevelt, Allison skillfully hints at what could occur if China were to take such a step &mdash; and embark on a real path to war.</strong></em></p> <h3><u>Reasons for hope:</u></h3> <p>While I don&rsquo;t want to offer any spoilers, <u><strong>Allison offers four key ways to mitigate the possibility of conflict</strong></u>. One of my favorites, clarifying vital interests, is worth spoiling. What are America&rsquo;s vital interests in the Asia-Pacific region? What are we willing to fight for? What are we willing to die for? And, perhaps, most importantly, what are we not willing to fight for? To this day, I would challenge any past Obama administration official to be able to explain that with clarity &mdash; they likely can&rsquo;t, beyond mentioning the word pivot or rebalance &mdash; terms that are rightly relegated to the past. The Trump administration will need to take up this challenge fast, considering Xi and Obama have a big summit set for early next month.</p> <p>While many will sing the praises of Allison&rsquo;s work, there is a much simpler reason why the good professor&rsquo;s effort should be commended:<strong><em> it stands to reason a flood of op-eds, blogs, editorials and podcasts will flood the media as this books nears its release. We are finally about to have a real public debate about the very distinct possibility of a war between the US and China &mdash; and that itself might be the real accomplishment.</em></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="609" height="339" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170325_china.jpg?1490583149" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-26/are-america-and-china-destined-war#comments Asia-Pacific Business China China–United States relations Chinese Embassy Donald Trump Donald Trump Germany Greece Harvard University’s Belfer Center Obama Administration Obama administration Peter Navarro Politics of the United States Stratgeic Culture Foundation Trump Administration United States Mon, 27 Mar 2017 06:00:00 +0000 Tyler Durden 591787 at http://www.zerohedge.com Putting Pennies in the Fusebox, Report 26 Mar, 2017 http://www.zerohedge.com/news/2017-03-27/putting-pennies-fusebox-report-26-mar-2017 <p>Back in the old days, homes had fuse boxes. Today, of course, any new house is built with a circuit breaker panel and many older homes have been upgraded at one time or another. However, the fuse is a much more interesting analogy for the monetary system.</p> <p>When a fuse burned out, it was protecting you from the risk of a house fire. Each circuit is designed for only so much current. The problem is that higher current causes more heat, and it can start a fire. So they put fuses in, which burn out before the wire gets hot enough to be dangerous.</p> <p>The problem is that it’s annoying when a fuse burns out, especially when it’s the last one and the hardware store is far away and/or closed for the weekend. So people all too often put a penny in the place of the fuse. And then, human nature being what it is, they left it there long-term. As an aside, pennies in those days were solid copper, not the copper plated zinc they use today because it’s cheaper.</p> <p>We would guess that a disproportionate number of house fires were started because an overloaded circuit became overheated, and the protective fuse was replaced with a penny that would keep the juice flowing no matter what.</p> <p>So, what has that got to do with gold and silver? A penny in the fuse box is a perfect analogy for what President Roosevelt did in 1933. Many believe when he confiscated gold, it was to grab the loot. While we have no doubt that he and his cronies lusted for the gold of the people, he had a more serious purpose.</p> <p>Until 1933, gold was the core monetary asset in the banking system. When people withdrew their gold coin—redeeming their gold, not <em>buying</em> gold—that forced the bank to sell a bond to raise the gold to redeem depositors. If a bank could not raise enough gold, perhaps because bond prices were going down, then the bank was bankrupt. Another problem is that falling bond prices mean rising interest rates.</p> <p>Roosevelt was trying to stop the run on the banks, and trying to push interest rates down.</p> <p>He did stop the run, and interest continued to fall through the end of World War II. However, his act was the monetary equivalent of the penny in the fuse box. In making it illegal to own gold, he made the dollar irredeemable for Americans. Gold is the only financial asset that is not someone else’s liability. Deprived of this outlet, people were forced to be a creditor. The only choice was to lend to the Federal Reserve, the US Treasury, a commercial bank, a corporation, etc.</p> <p>When people are running to the bank to withdraw their gold coin, it’s like a fuse burning out. You really should find out the root cause when a fuse keeps burning out, and not just jam a solid copper conductor into the circuit. You really should find out why people keep pulling money (i.e. gold) out of the banks, and not just outlaw it.</p> <p>The reasons were simple. The rate of interest was below the marginal time preference of the savers. This is, of course, the purpose for which any central bank is established: to enable the government and its cronies to borrow more cheaply. And the banks had become unsound (due in no small part to the actions of the Fed taken prior to 1933).</p> <p>By corralling everyone in the banking system, FDR put a penny in the monetary fusebox. In 1971, President Nixon realized there was one last fuse that could still burn out and thereby signal that all was not well. Americans could not withdraw gold, but foreign governments could. And, led by France, they were doing. So Nixon “closed the gold window”, thereby inserting a second penny.</p> <p>Now the system was perfect—perfectly irredeemable. Money is credit and credit is money and there is no longer a way for the market to express concerns about either interest rates or soundness. An individual can escape being a creditor if he buys gold (legalized in 1975, after gold was entirely demonetized), but his dollars simply trade hands. The seller of the gold gets the credit-dollars, and the buyer gives them up for the gold. There is zero effect on the banking system (other than causing the price of the dollar to go down).</p> <p>Unlike the simple and elegant mechanism of the bank run in the gold standard, buying gold is awkward, clunky, and risky for the participants. With dollar-credit no longer being tied to gold, there is a price risk. And of course, price is the motivator for many participants.</p> <p>Two people, call them Joe and Mary, could both be right that the dollar-credit system is headed towards a crisis. Joe bought at $1,060 in the last week of 2015. Unfortunately, Mary bought at $1,375 in July of 2016. Both bought because of the same reason. But Joe has a big fat gain of $183 and Mary has a loss of $132. This volatility makes people alternatively greedy and fearful, which is not really providing a good signal that the monetary system has problems urgently in need of addressing.</p> <p>And so the system goes, careening around, from crisis to crisis and nothing gets fixed and there is no signal that is clear to everyone the way a run on the banks is clear.</p> <p>With this backdrop, we note that the price of gold is on the rise again. Since its low around $1,120 late last year, it has been rising to its current price about $120 above that. What’s more, the fundamentals have been getting stronger at the same time. What could be causing this, and now?</p> <p>Rising interest rates (which we believe is just a correction in the long falling rates trend) are putting more and more stress on banks and corporations alike. If you have borrowed short to lend long (as all banks do nowadays, this is called “maturity transformation") then rising rates cause immediate pain. Your cost of funding goes up instantly. However, the interest you earn on long-term bonds does not go up. Instead, the market price of those bonds drops. Equity is disappearing from your balance sheet.</p> <p>Now consider major corporations, who too often borrowed in the short term bond markets. Their cost of funding is rising. Nearly every carmaker now offers 0% financing to qualified buyers. Their cost to offer this is now obviously much higher than it was a year or two ago. And that does not even count if they had used short-term borrowing to finance those loans, in which case their existing book is bleeding cash too.</p> <p>This same pressure is occurring anywhere a vendor is financing its customers. The vendor can always try to pass through the increased cost. However, if buying volume was anemic previously with lower interest cost, it will only get worse when this cost goes up.</p> <p>In the housing market, most people are monthly payment buyers. A higher interest rate means a lower price to get the same payment.</p> <p>And what happens to lower credit corporations who issue junk bonds? Like most corporations they have to roll over their bonds when mature. So far, rising rates has passed over this market and junk bonds have held up. However, should this tide turn, many of these companies will be forced to default under a deluge of rising interest expense, if not softer demand for their products. They are junk credits for a reason, and higher rates can be the final straw.</p> <p>Or let’s look at the pension funds. They are already badly underfunded. That is, they are already destined to arrive at terra firma. Many have bought equities and real estate in an attempt to juice up their returns. What happens if the prices of those assets comes down significantly?</p> <p>Finally, let’s look at municipalities. They derive revenue from home building and turnover of not only homes but home furnishings, remodeling, etc. If these markets slow down significantly, their ability to service their debts is going to be taxed to the limits and beyond.</p> <p>No wonder people are buying gold. Fundamental demand, as opposed to speculative, is when people buy gold coins and bars, presumably not to bring back to the market soon.</p> <p>Below, we will show the only true picture of the gold and silver supply and demand. But first, the price and ratio charts.</p> <p>The Prices of Gold and Silver<br /><img src="http://monetary-metals.com/wp-content/uploads/2017/03/letter-mar-26-prices.png" alt="The Prices of Gold and Silver" title="The Prices of Gold and Silver" width="1064" height="365" /></p> <p>Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. It moved down this week.</p> <p>The Ratio of the Gold Price to the Silver Price<br /><img src="http://monetary-metals.com/wp-content/uploads/2017/03/letter-mar-26-ratio.png" alt="The Ratio of the Gold price to the Silver price" title="The Ratio of the Gold price to the Silver price" width="1016" height="383" /></p> <p><em>For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and cobasis in red.</em></p> <p>Here is the gold graph.</p> <p>The Gold Basis and Cobasis and the Dollar Price<br /><img src="http://monetary-metals.com/wp-content/uploads/2017/03/letter-mar-26-gold.png" alt="The Gold Basis and Cobasis and the Dollar Price" title="The Gold Basis and Cobasis and the Dollar Price" width="1025" height="348" /></p> <p>The price of the dollar fell another 0.3 milligrams gold (this is the inverse of the rising price of gold, measured in dollars, +$14). However, this week, the cobasis (our measure of scarcity) decreased a bit. Gold buying this week was biased towards speculation. Last week, we said fundamental buying was a trend but it’s “sputtering”. This is an example.</p> <p>Our calculated fundamental price of gold is up $3, or still about $160 over the market price.</p> <p>Now let’s look at silver.</p> <p>The Silver Basis and Cobasis and the Dollar Price<br /><img src="http://monetary-metals.com/wp-content/uploads/2017/03/letter-mar-26-silver.png" alt="The Silver Basis and Cobasis and the Dollar Price" title="The Silver Basis and Cobasis and the Dollar Price" width="1032" height="330" /></p> <p>The story is the same in silver. The price rose, a bit more than the price of gold did. With the rising price, we see decreasing scarcity this week.</p> <p>Our calculated silver fundamental price rose 4 cents, now about $0.85 over the market price.</p> <p>We leave on a question today. When interest returns to gold and silver, which metal will have the higher rate? We plan to publish something about this soon.</p> <p>© 2017 <a href="https://monetary-metals.com">Monetary Metals</a></p> http://www.zerohedge.com/news/2017-03-27/putting-pennies-fusebox-report-26-mar-2017#comments Bank Run Bond Bond Business Central bank Copper default Economic history of Japan Economy ETC Federal Reserve Finance fixed France Gold as an investment Gold standard Housing Market International trade Monetary policy Money Precious metals Real estate U.S. Treasury United States housing bubble US Federal Reserve Volatility Mon, 27 Mar 2017 05:06:08 +0000 Monetary Metals 591792 at http://www.zerohedge.com