en ECB Warns Of "Excessive Exuberance" In House Prices; Sees Financial Instability Due To Higher Yields <p>In an unexpected two-part warning from the ECB, the European Central Bank warned of “excessive exuberance” in some European housing markets, driven by offshore buyers, that could spread to other areas in a “ripple effect.” Separately, the ECB also said "debt-sustainability concerns" have risen in the past six months amid a potential increase in yields and political uncertainty in some countries.</p> <p>We start with the latter warning, which we find ironic as it is a function of the ECB's own policies of keeping rates suppressed at record lows to promote inflation, and now that inflation has finally emerged, the ECB is worried about the spillover and unwind of its policies. "Risks to financial stability stemming from financial markets remain significant,” the ECB <a href="">said in its Financial Stability Review</a>. An abrupt bond-market repricing could “materialize via spillovers from higher yields in advanced economies, in particular the United States.”</p> <p><a href=""><img src="" width="500" height="302" /></a></p> <p>The ECB also warned that euro-area banks remain vulnerable as low interest rates and a big stock of non-performing loans in some regions challenge profitability. It cited structural challenges in the industry, including overcapacity and too little income diversification. </p> <p>In Italy, which has one of the euro region’s highest debt ratios and where the government is trying to finalize a plan to rescue Banca Monte dei Paschi di Siena SpA, <strong>business lobby Confindustria said on Wednesday that the country must “be ready for when the ECB will end sovereign bond purchases” </strong><a href="">according to Bloomberg</a><strong>. </strong>This means “quickly lowering the mountain of public debt through privatizations and sale of state-owned real estate,” Chairman Vincenzo Boccia said in Rome.</p> <p>While it did not show it, the chart below from Goldman summarizes the threat: a normalization of European rates would result in double digit principal losses for bondholders in countries like German, Spain, France and Italy... but not if they sell first to other "greater fools." It is this transition from a stable to a chaotic market, that is currently troubling the central bank.</p> <p><a href=""><img src="" width="500" height="343" /></a></p> <p>Two steps ahead of the ECB, the Fed has already raised rates twice since late last year and policy makers predict two more hikes in 2017. In Europe, an exit from unconventional stimulus is also moving closer, even though officials caution that quantitative easing must be unwound very gradually before higher borrowing costs should even be discussed.</p> <p>As it has done repeatedly in recent months, the ECB report also warned that Brexit “contributes to prevailing political uncertainties,” but said the impact on financial stability should be limited as long as banks take proper action in time. It sees a low risk of the euro-area economy facing restrictions in accessing financial services after Britain’s departure from the European Union. </p> <p>“Well-managed preparations will be essential as a relocation of financial services capacity during the transition from the current situation to the new equilibrium could, in some cases, face frictions,” according to the report. “Therefore, the ECB underlines the need for the concerned banks and other financial institutions to undertake all the necessary preparations in a timely manner.”</p> <p>* * * </p> <p>Separately, in a warning that resident of Vancouver and Toronto will appreciate, the central bank also cautioned that since 2010, <strong>house prices in European capital cities have risen far more than national averages</strong>. The ECB cited Berlin, Paris, Vienna and Amsterdam as cities that have performed particularly well. </p> <p>While it did not use the words irrational exuberance, it came close, when the ECB said that “<strong>exuberant house price developments in certain regions could, in principle, threaten the stability of financial institutions with mortgage exposures concentrated in those regions</strong>."</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Although diverging developments at the regional level could be justified by fundamentals, such as differences in regional income, employment, population dynamics and amenities, they could also signal <strong>excessive exuberance of house prices in certain areas</strong>, for example due to the strong presence of foreign buyers</em></p> </blockquote> <p> While hardly rocket science, <a href="">Bloomberg points out </a>that record-low interest rates have fueled demand for residential properties as investors seek to buy assets that generate returns rather than depositing their money in banks. That has benefited housing markets in Germany, France and the Netherlands, as well as Estonia and Ireland, the ECB said.</p> <p><a href=""><img src="" width="500" height="357" /></a></p> <p>Compounding the problem, the central bank warned that elevated levels of household indebtedness and large real estate exposures of banks in countries such as Finland and the Netherlands could&nbsp; “amplify” shocks. The central bank said it’s monitoring property-market developments closely and may top up national measures if necessary.</p> <p>To which all we can say is that we wish the ECB, which created all the problems it now complains about, the best of luck as it scrambles to contain the genie inside the bottle.</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="540" height="300" alt="" src="" /> </div> </div> </div> Benoît Cœuré Bond Borrowing Costs Business Central bank Economy Economy of the European Union Estonia Euro Europe European Central Bank European Central Bank European Central Bank European System of Central Banks European Union European Union European Union Eurozone Finland France Germany Ireland Irrational Exuberance Italy Netherlands non-performing loans Policy reactions to the Eurozone crisis Quantitative Easing Quantitative easing Real estate US Federal Reserve Wed, 24 May 2017 11:15:21 +0000 Tyler Durden 596533 at China Downgrade Forgotten As Asia Closes Higher, Futures Flat Ahead Of Fed Minutes <p>Not even last night's Moody's credit downgrade of China - the first since 1989 - could dent the global stock rally which has pushed global stock prices to all time highs. After initially sliding, regional stocks and emerging Asian currencies pared early losses following the unexpected downgrade of China, taking their cue from the "sudden reversal" of the Shanghai Composite Index, which some speculated saw the latest intervention of the "national team."</p> <p><a href=""><img src="" width="500" height="365" /></a></p> <p>Moody’s action on China briefly rattled Asian markets, but against a backdrop of strengthening global growth and the impending release of minutes from the Federal Reserve’s latest meeting, investors appeared to quickly move on. MSCI's broadest index of Asia-Pacific shares outside Japan was unchanged while Japan's Nikkei stock index ended 0.7 percent higher. </p> <p>The Shanghai Composite gained 0.1% at the close, reversing an early decline of 1%, while the offshore yuan inched up. As reported last night, the major overnight catalyst in Asia was <a href="">Moody's downgrade of China’s credit rating to </a>A1 from Aa3 in early Asia trading, citing a worsening outlook for the nation’s financial strength - in the end of the Chinese session it had little impact, aside from another steep selloff in iron ore, which traded nearly limit down. The downgrade impact on regional currencies was likewise limited as Asia’s economic growth is seen to be improving and there are still positive stories such as S&amp;P’s upgrade of Indonesia’s rating last week.</p> <p>By the end of the session, nobody even remembered China had been downgraded: the Shanghai Composite rose 0.1 percent, reversing a drop of 1.3 percent. The Hang Seng also ended higher after an earlier decline of 0.4 percent. Japan’s Topix index climbed 0.6 percent, while Indonesia’s benchmark index slumped 0.7 percent. The Australian dollar slipped 0.1 percent, paring a steeper drop of as much as 0.5 percent.</p> <p>Away from Asia, European stocks rose and U.S. equity futures and the dollar both steadied. The Stoxx Europe 600 Index climbed a second day, but struggled to gain momentum as miners slumped after China's downgrade. That triggered declines across copper, nickel, zinc and iron ore. The British pound strengthened after two days of losses, even as Prime Minister Theresa May warned that further terrorist attacks could be imminent. </p> <p>"There's been a cautious start in Europe this morning with stocks in the red following a downgrade in the Chinese credit rating from Moody's," said David Cheetham, chief market analyst at brokerage XTB. "After being very much at the front and center of global risk sentiment at the beginning of last year, the Chinese slowdown story has been almost forgotten, with politics throughout Europe and the U.S. taking the limelight."</p> <p>S&amp;P500 futures were little changed as investors awaited economic data and earnings reports, while volatility dropped for a fifth day. S&amp;P 500 contracts expiring in June added less than 0.1% to 2,398.5 at 6:30 a.m. in New York.</p> <p>Crude extended gains a sixth day as OPEC prepared for Thursday’s key meeting in Vienna, and where an announcement of a 9 month productin cut extension now is fully priced in.</p> <p><a href=""><img src="" width="500" height="281" /></a></p> <p>In currencies, the dollar was little changed against most of its peers and Treasury yields were steady before the U.S. Federal Reserve releases later Wednesday the minutes of its May 3 policy meeting. With Fed due to release its May meeting minutes, “markets are ready to catch any clue regarding the likelihood of an interest- rate hike at the FOMC’s June meeting,” writes Ipek Ozkardeskaya, senior analyst at London Capital Group. Fed Bank of Philadelphia President Patrick Harker said June “is a distinct possibility” for the U.S. central bank’s second interest-rate increase of 2017.</p> <p>While equities quickly forgot the downgrade of China, the world's top user of materials, industrial metals were far more bruised, as nickel slumped 1.9% and copper fell 0.6%. Iron ore futures dropped 4.7%.&nbsp; West Texas oil rose 0.2 percent to $51.56 a barrel, adding to a five-day advance ahead of tomorrow's OPEC meeting. old added 0.1 percent to $1,252.30 an ounce, after dropping 0.8 percent on Tuesday.</p> <p>Elsewhere the Australian dollar fell and the yen pared losses against the U.S. currency after Moody’s Investors Service cut its rating on China’s debt for the first time in almost three decades. The euro was little changed ahead of the Fed minutes, even as ECB policy makers warned of the dangers of the ‘ripple effect’ from the house price boom and ‘significant’ bond risks spurring increased debt concerns.</p> <p>In rates, the yield on 10-year Treasury notes fell less than one basis point to 2.27 percent. Bonds fell during the previous four days. Yields on benchmark French, German and British bonds all dropped two basis points.</p> <p>Today investors await the minutes of the U.S. Federal Reserve's latest policy meeting, scheduled to be released at 2pm. Fed funds futures show that traders now see a 75% chance that the U.S. central bank would will raise interest rates at its June meeting. "Our U.S. economists expect the minutes to come down on the hawkish side and continue to expect the Fed to hike in June and September and announce balance sheet reduction in December," Citi analysts wrote on Wednesday.</p> <p><strong>Bulletin Headline Summary from RanSquawk</strong></p> <ul> <li>Equities fail to find firm direction and seemingly looking through China's sovereign downgrade as Moody's offers little in the way of any surprises.</li> <li>A very quiet morning in FX with focus on the FOMC minutes, alongside the OPEC/Non-OPEC meeting.</li> <li>Looking ahead, highlights include US Building Permits, Existing Home Sales, DoE Inventories, FOMC Minutes, BoC Rate Decision, ECB's Praet and Draghi</li> </ul> <p><strong>Market Snapshot</strong></p> <ul> <li>S&amp;P 500 futures little changed at 2,399.25</li> <li>STOXX Europe 600 up 0.1% to 392.48</li> <li>MXAP up 0.01% to 151.88</li> <li>MXAPJ up 0.02% to 495.69</li> <li>Nikkei up 0.7% to 19,742.98</li> <li>Topix up 0.6% to 1,575.11</li> <li>Hang Seng Index up 0.1% to 25,428.50</li> <li>Shanghai Composite up 0.07% to 3,064.08</li> <li>Sensex down 0.1% to 30,328.05</li> <li>Australia S&amp;P/ASX 200 up 0.2% to 5,768.98</li> <li>Kospi up 0.2% to 2,317.34</li> <li>German 10Y yield fell 1.1 bps to 0.399%</li> <li>Euro up 0.1% to 1.1197 per US$</li> <li>Brent Futures up 0.6% to $54.46/bbl</li> <li>Italian 10Y yield fell 1.5 bps to 1.83%</li> <li>Spanish 10Y yield fell 2.2 bps to 1.596%</li> <li>Brent futures up 0.6% to $54.49/bbl</li> <li>Gold spot little changed at $1,251.99</li> <li>U.S. Dollar Index little changed at 97.30</li> </ul> <p><strong>Top Overnight News from Bloomberg</strong></p> <ul> <li>Moody’s Investors Service cut its rating on China’s debt for the first time since 1989, challenging the view that the nation’s leadership will be able to rein in leverage while maintaining the pace of economic growth</li> <li>The European Central Bank said debt- sustainability concerns have risen in the past six months amid a potential increase in yields and political uncertainty in some countries</li> <li>U.K. Prime Minister Theresa May warned that further terrorist attacks could be imminent. The country’s terrorism threat level has been raised to “critical” -- the highest level -- from “severe”, as police hunt for potential accomplices of the suicide bomber who killed 22 people at a Manchester pop concert</li> <li>The White House said Trump’s request for fiscal 2018 would generate a fiscal surplus by 2027 after $3.6 trillion in spending reductions and $2.1 trillion in economic growth-induced revenue increases, but gave no details on how tax cuts would be paid for</li> <li>Traders in the world’s biggest financial market are about to get a new list of do’s and don’ts. The FX Global Code, which the Bank for International Settlements will publish Thursday, aims to stamp out misconduct in foreign-exchange markets after a rigging scandal triggered about $10 billion in fines for banks</li> <li>Glencore-Bunge Deal Would Add G to ABCD Dominating Grain</li> <li>SoftBank Said to Take $4 Billion Stake in U.S. Chipmaker Nvidia</li> <li>Troops Deployed in U.K. After Warning of Imminent Terror Attack</li> <li>Fed’s Harker Calls June Rate Hike a ‘Distinct’ Possibility</li> <li>Oil Holds Gain as Data Show U.S. Supplies Fall Before OPEC</li> <li>Fiat Chrysler Stumbles Into U.S. Regulatory Crosshairs Again</li> <li>Noble Group’s Wild Trading Day Demands ‘High Risk Appetite’</li> </ul> <p><strong>Asia equity markets traded mixed following the mildly positive US close, </strong>where indices eked a 4th consecutive daily gain and the S&amp;P 500 briefly advanced above 2,400 to within close proximity of its all-time highs. This provided the initial impetus for the ASX 200 (flat) and Nikkei 225 (+0.3%), while JPY weakness also underpinned Japanese exporter sentiment. Conversely, Shanghai Comp. (+0.1%) and Hang Seng (flat) underperformed after Moody's downgraded China's sovereign credit rating amid expectations of a deterioration in China's financial strength in the upcoming years. 10yr JGBs traded lower on spill-over selling from T-notes and alongside the increased risk sentiment in Japan, although downside was stemmed amid the BoJ's presence in the market for a total JPY 1.03trl in 1yr-10yrs government debt. Moody's downgraded China's sovereign credit rating to Al from AA3; outlook revised to stable from negative. Moody's commented that the rating reflects expectations that China's financial strength will erode somewhat over the approaching years. PBoC injected CNY 40bIn in 7-day reverse repos and CNY 50bIn in 14-day reverse repos. The PBoC set CNY mid-point at 6.8758 (Prey. 6.8661)</p> <p><em>Top Asian News</em></p> <ul> <li>China State Firms Face Threat of Higher Debt Costs After Moody’s</li> <li>Freeport Says Grasberg Output on Target as Union Extends Strike</li> <li>Evergrande Climbs Most Since July 2015, Leading Gains on HSCI</li> </ul> <p><strong>European equities trade with little in the way of firm direction (Eurostoxx 50 flat) </strong>as earnings season continues to peter out and markets shrug of overnight news that Moody's downgraded China's sovereign debt rating. Chinese bourses were initially hit on the news given the surprise of the timing but ultimately the action taken is of little surprise given debt concerns and Moody's bringing their rating in-line with that of Fitch and as such European traders have largely looked through the announcement. On a sector stand-point, energy names outperform ahead of this week's OPEC meeting despite a lack of clarity on the duration of any potential extension. Material names underperform amid Dalian ore futures sliding over 5% over night. In fixed income markets, price action has been particularly uneventful with prices stuck in a somewhat narrow range. In peripheral markets, spreads are also relatively unchanged to their core counterparts with markets most likely looking for further direction from today's speech by ECB's Draghi and any further update on the Greek situation after the IMF and German Finance Minister Schauble reportedly struck an agreement on Greek bailout with the IMF willing to participate in the program if Greece proves debt is sustainable.</p> <p><em>Top European News</em></p> <ul> <li>Morgan Stanley to ‘Significantly Reduce’ Recruiting of Brokers</li> <li>Constancio Says Brexit Won’t Materially Harm Euro-Area Recovery</li> <li>Understanding Poland’s Retreat From Costly Swiss-Loan Fix</li> <li>Wynnstay Shares Slump as Just for Pets Weakness Hits Profit</li> <li>Safran, Zodiac Shares Halted Pending Press Release: Euronext</li> <li>Ikea Names Brodin New CEO to Lead Asia Expansion, Online Growth</li> </ul> <p><strong>In currencies,</strong> the Bloomberg Dollar Spot Index was flat after climbing 0.3 percent Tuesday. The pound rose 0.1 percent to $1.2971 following a two-day loss. The euro fell by less than 0.1 percent to $1.1178. It has been a very quiet morning in FX and if anything stands out it is the resilience in the cross JPY rates. This is in the face of the Moody's downgrade of China's credit rating, which garnered brief attention in Asia, but little else. USD/JPY has tested 112.00, but good selling interest seen here despite a small tip over the figure level. EUR/USD is still in pullback mode, but fresh demand coming in already. The FOMC minutes ahead may underpin expectations of a Jun move, and this should see USD bids picking up dips — 1.1200 intact as a result. Not that this is deterring Cable buyers still intent on tripping stops through 1.3060-70. We see little other reason for the resilient bid tone in the Pound given what lies ahead, with some suggesting traders are pre-empting a Tory win in the elections. We doubt this would lead to a significant charge higher from current levels, but impulsive markets are here to stay.</p> <p><strong>In commodities,</strong> Iron ore led metals lower across the board today as the overnight markets reacted to the Moody's downgrade of China's credit rating. The DCE lost over 4.5% today, with the indices here requiring little to tip the balance these days. Copper has found some resistance at USD2.60 as many anticipated, but the pullback has been tame so far to suggest a more consolidative tone going forward. All eyes on Oil prices at the present time, and with the OPEC meeting not until tomorrow, but ongoing rhetoric supportive of an extension — though to what degree. 6 months is the minimum required to keep WTI above USD50.00, currently trading closer to USD52.00 while Brent is in the upper USD54.00's. Precious metals are out of the spotlight, but Silver has crept back above USD17.00.</p> <p><strong>Looking at today’s calendar, </strong>we’ll get the March FHFA house price index reading and also April existing home sales data. This evening we then get the FOMC minutes from the meeting on May 3rd where most be will combing through for discussion on the Fed’s balance sheet strategy. It’s another busy day for Fedspeak today too with Kaplan (6pm ) and Kashkari (6.30pm ) both scheduled. ECB President Draghi also speaks in Madrid at 1.45pm BST.</p> <p><strong>US Event Calendar</strong></p> <ul> <li>7am: MBA Mortgage Applications, prior -4.1%</li> <li>9am: FHFA House Price Index MoM, est. 0.5%, prior 0.8%</li> <li>9am: House Price Purchase Index QoQ, prior 1.5%</li> <li>10am: Existing Home Sales, est. 5.65m, prior 5.71m</li> <li>10am: Existing Home Sales MoM, est. -1.05%, prior 4.4%</li> <li>2pm: FOMC Meeting Minutes</li> <li>6pm: Fed’s Kaplan Speaks in Toronto</li> <li>6:30pm: Fed’s Kashkari Speaks in Wisconsin</li> </ul> <p><strong>DB's Jim Reid concludes the overnight wrap</strong></p> <p>Back in 1990 in an attempt to impress the young ladies on the school bus which we shared with the girls school next door I started watching Twin Peaks. I hated it but had to continue watching in case I could possibly be part of their arty, seemingly sophisticated conversation. They adored it (the show, not my input sadly). So it was some intrigue to me that a new series aired this week 25 years after the last one. I haven't watched it yet but I wonder whether any of it will make sense. For the uninitiated it was a surreal, confusing supernatural drama that amongst other things included a red room where everyone spoke backwards. At 16 this was the height of cool and it was the most popular show of 1990. Thankfully the days of trying to impress a potential new partner are over. What impresses my wife most these days is me changing a nappy so I do that when I can instead.</p> <p>Talking of twin peaks, US equities have again edged up towards the highs after the S&amp;P 500 closed last night within 0.30% of the all time peak from intraday last Tuesday before all the political headlines hit. The index was up +0.18% yesterday which means it has now gained for four consecutive sessions. You’d have to go back to February to find the last time it did that. The Dow (+0.21%) also edged up while there was a similarly positive mood in Europe with the Stoxx 600 (+0.22%) also finishing in positive territory. Some decent PMIs on both sides of the pond seemed to be the catalyst (we’ll come to those shortly) and it didn’t hurt that Oil continues to solidify gains. Indeed WTI (+0.66%) was up for the fifth day in a row yesterday and is holding above $51/bbl ahead of tomorrow’s OPEC meeting where there was more chatter yesterday from energy ministers that a nine-month extension agreement appears likely. In bond markets Treasuries (+2.6bps) and Bunds (+1.3bps) were a little weaker while in currencies the US Dollar (+0.38%) was up for only the second time in the last nine sessions. Needless to say that the tragic events in Manchester dominated the front pages around the world with UK PM Theresa May subsequently raising the terror alert in the UK to ‘critical’ from ‘severe’. Sterling (-0.30%) was a touch weaker yesterday and is holding just below $1.300 this morning.</p> <p>Before we go any further, the main news to report overnight is Moody’s cutting China’s sovereign credit rating by one notch to A1/Stable (was previously on Negative outlook). That is the first time Moody’s have cut China’s rating since 1989. The rating agency noted the likelihood of a “material rise” in economy-wide debt and expectations that China’s financial strength could “erode somewhat” as a result. China’s rating at Moody’s is now level with that of Japan and below other Asia economies of Taiwan and Macau.</p> <p>While there were no real revelations in the Moody’s statement the timing appears to have caught markets by surprise a little. Equity markets in China initially fell sharply on the news and while having pared back some of the losses, are still underperforming this morning. The Shanghai Comp is currently -0.63% and at the lowest level in nearly 8 months. It was initially down as much as -1.28%, while the CSI 300 and Shenzhen are -0.75% and -0.19% respectively. The Hang Seng is now flat after being in the red. Both the onshore (-0.10%) and offshore (-0.05%) renminbi are a shade weaker, while China’s sovereign 5y CDS is 1bp wider. The China sensitive Aussie Dollar is also down -0.40%. Elsewhere in Asia bourses are firmer and seemingly following the lead from Wall Street. The Nikkei (+0.48%), ASX (+0.10%) and Kospi (+0.20%) are all up.</p> <p>Away from markets, there were some interesting comments to come from the ECB’s Benoit Coeure yesterday. Speaking at a conference in Paris, Coeure said that “our current analysis of the secondary effects of negative rates suggest that there is no reason to change the indications we’ve given”. The board member also said that the ECB would start raising rates “well beyond the horizon” of asset purchases. Last week Coeure had said that the future path for rates was “not set in stone”. This suggests that the ECB is not about to change sequencing and is important as Coeure was previously seen as someone who had&nbsp; suggested a change in sequencing previously. We should get more hints at next month’s ECB meeting.</p> <p>Another focus for the market yesterday was Trump’s budget. Despite the wide acknowledgment that it stands little chance of being passed as proposed it was interesting to look at some of the details still. One questionable aspect is that the plan assumes that US economic growth would reach 3% by 2021 whereas the Fed and Congressional Budget Office project the US economy growing at an annual rate of just 1.8% and 1.9% in the coming years. In addition, the budget assumes to only balance in 10 years through strong growth. This follows the point we made in yesterday’s EMR about the UK not seeing a balanced budget&nbsp; until 2025 in the Conservative Party’s manifesto. Indeed one wonders how budgets will ever balance again in most countries especially given the demographic headwinds. Staying with the US the White House issued a statement yesterday saying that it does not confirm or deny ‘unsubstantiated claims based on illegal leaks from anonymous individuals’ concerning the investigation of the links between Russia and Trump’s presidential campaign. A reminder that former FBI Director James Comey is likely to testify next week which will no doubt be a talking point for the market.</p> <p>Back to those PMIs yesterday. In Europe the flash May composite for the Euro area came in at a fairly solid 56.8 which was modestly better than what the market was expecting and steady versus the April reading. The manufacturing reading edged up 0.3pts to 57.0 (vs. 56.5 expected) which offset a 0.2pt decline in the services reading to 56.2 (vs. 56.4 expected). In the country details there was a positive read-through in the data for both Germany and France. The former saw its composite rise 0.6pts to 57.3, driven by the manufacturing sector while the latter saw its composite rise 1pt to 57.6, driven by the&nbsp; services sector. This does however imply a roughly 1.1pt decline in the average composite for the periphery. Taken as whole, the composite reading for the Euro area implies GDP growth in Q2 of +0.8% qoq according to our economists, compared to their forecast of +0.5% qoq.</p> <p>Across the pond, the composite flash May reading in the US came in at 53.9 which was up 0.7pts from April. The details were a little more mixed however with the driver of the increase in the composite coming from the services sector where the PMI rose 0.9pts to 54.0. The manufacturing PMI actually edged down 0.3pts to 52.5.</p> <p>Away from the PMIs, the rest of the data in the US was a tad disappointing. New home sales fell sharply in April (-11.4% mom vs. -1.8% expected) albeit from a March reading which was revised up to an almost 10-year high. Meanwhile the Richmond Fed manufacturing index tumbled 19pts to +1 (vs. +15 expected), confirming some of the weaker data in the factory sector. In Germany Q1 GDP was confirmed as growing +0.6% qoq while the IFO business climate reading in May was revealed as climbing 1.6pts to a better than expected 114.6 (vs. 113.1 expected). The present situation index actually hit a new multi- decade high while the expectations index rose to its highest since February 2014. Finally in the UK the CBI’s distributive trades survey was disappointing with a net 2% of respondents reporting higher sales in May, down from 38% in April.</p> <p>Before we wrap up and look at the day ahead, it’s worth highlighting that German press outlet Handelsblatt was running a story yesterday suggesting that the IMF and German Finance Minister Wolfgang Schaeuble have reportedly reached an agreement on Greece. The article suggests that the IMF has signalled its willingness to participate in the program and would only provide money if Greece proves its debt is sustainable.</p> <p>Looking at today’s calendar, the only data due out in Europe this morning comes from Germany where the flash June consumer confidence reading is due. This afternoon in the US we’ll get the March FHFA house price index reading and also April existing home sales data. This evening we then get the FOMC minutes from the meeting on May 3rd where most be will combing through for discussion on the Fed’s balance sheet strategy. It’s another busy day for Fedspeak today too with Kaplan (11pm BST) and Kashkari (11.30pm BST) both scheduled. ECB President Draghi also speaks in Madrid at 1.45pm BST while Praet&nbsp; speaks this morning.</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="654" height="477" alt="" src="" /> </div> </div> </div> 1yr-10yrs government Asia-Pacific ASX 200 Aussie Australian Dollar Bank of Japan Bloomberg Dollar Spot Bond Bond British Pound Business CDS China Chrysler Congressional Budget Office Congressional Budget Office conservative party Consumer Confidence Copper Credit rating agencies Crude Dow 30 Economy Equity Markets European Central Bank European Central Bank European Central Bank EUROSTOXX 50 Fail FBI Fed Bank of Philadelphia Federal Bureau of Investigation federal government Federal Open Market Committee Federal Reserve Finance Fitch fixed flash France Germany Greece Hang Seng 40 headlines International Monetary Fund Investors Service Japan Jim Reid Money Moody's Investors Service New Home Sales Nikkei Nikkei 225 OPEC Organization of Petroleum-Exporting Countries People's Bank of China Precious Metals Price Action Price of oil Rating Agency Renminbi Richmond Fed S&P 500 S&P/ASX 200 Shenzhen Sovereign Debt SSE 50 Standard & Poor's Stock market crashes Stoxx 600 the U.S. central bank Topix US Federal Reserve Volatility West Texas White House White House Yen Yuan Wed, 24 May 2017 10:44:12 +0000 Tyler Durden 596532 at Legendary Investor Asher Edelman Says "I Have No Doubt" PPT Behind Market Rally <p>Legendary vulture investor Asher Edelman, the 1980s model for Gordon Gekko, strayed into what must’ve been uncomfortable territory for CNBC during an appearance on "Smart Money" when he discussed his view that the government’s "plunge protection team" is the only thing propping up the current market rally, and said he suspects that it has again been recently een intervening in the market to keep stocks at record highs. </p> <blockquote class="twitter-video"><p dir="ltr" lang="en">Is the plunge protection at work? Legendary investor <a href="">@AsherEdelman</a> lays out the conspiracy <a href=""></a></p> <p>— CNBC's Fast Money (@CNBCFastMoney) <a href="">May 23, 2017</a></p></blockquote> <script src="//"></script><p>Edelman simply notes that he doesn’t want to be in the markets right now because “<strong>I don’t know when the plug is going to be pulled."</strong></p> <script src="//"></script><p>Few can explain the market's recent resilience, holding near record highs despite weak economic data and intensifying geopolitical tensions. The main benchmarks have risen for the fourth straight day following last week’s “Trump Dump"<a href=""> despite a terror attack in the U.K., the worst soft economic data since February 2016, and surprisingly low trading volume.</a></p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">'<a href="">@AsherEdelman</a>: "I don't want to be in the market because I don't know when the plug is going to get pulled"</p> <p>— CNBC's Fast Money (@CNBCFastMoney) <a href="">May 23, 2017</a></p></blockquote> <script src="//"></script><p>The “plunge protection team” was created by President Ronald Reagan one year after the stock market crash in 1987, when the president called for the creation of the “Working Group on Financial Markets.”</p> <p><a href=""><img src="" width="563" height="314" /></a></p> <p>It’s believed – as the name would suggest and as has been profiled on countless occasions on this website previously – that the group’s mandate is to maintain stability in the market and head off any severe crashes like what was seen in 1987. It's believed the group reports only to the president, though the head of the Treasury, head of the Securities and Exchange Commission and Federal Reserve Chairman are also involved. The team, according to Asher, steps in to execute trades on all exchanges when the market isn't behaving as it would like, working only with big banks like Goldman Sachs Group and Morgan Stanley.&nbsp;</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"We have seen the most extraordinary lack of volatility in the VIX since Trump has been in office and it's interesting the night he was elected you may recall the futures came down about 400 or 600 points. </p> <p>&nbsp;</p> <p><strong>You may also recall that the next morning they were even again. Watching plunge protection for years, I had no doubt that's what happened.</strong>"</p> </blockquote> <p>That may have been the case in the 1980s, however in recent years the PPT is the collaboration of the NY Fed and Citadel, which are most aggressive during times of substantial market stress and selling, when intervention is needed to stop the downward momentum in prices. </p> <p>Edelman says he believes one sign of TPP intervention is when a smaller, less-liquid stock suddenly rises late in the trading day.</p> <p>We’ve noted in the past that there appears to be a rule against mentioning the team on CNBC – <a href="">with guests routinely getting “Schiff’d” for doing so. </a></p> <p><iframe src="" width="560" height="315" frameborder="0"></iframe></p> <p>And once again, this time, the "theory" was treated with derision by his fellow hosts.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong><em>"I think we all have so many questions here I don't think I know where to begin,"</em></strong> Fast Money host Melissa Lee said.</p> </blockquote> <p>Some audience members were more enthusiastic.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">I can't believe <a href="">@AsherEdelman</a> just talked about the PPT on <a href="">@CNBCFastMoney</a>. Didn't think anyone was allowed to talk about it. That was crazy.</p> <p>— Hun (@sincerewoo) <a href="">May 23, 2017</a></p></blockquote> <script src="//"></script> <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="506" height="289" alt="" src="" /> </div> </div> </div> Asher Edelman Business Business CNBC Donald Trump Economy Fast Money Finance Gordon Gekko Melissa Lee NBCUniversal NY Fed Securities and Exchange Commission Smart Money Television in the United States Twitter Twitter U.S. Route 9W US Federal Reserve VIX Working Group on Financial Markets Wed, 24 May 2017 09:25:00 +0000 Tyler Durden 596522 at Catalonia Threatens Immediate Declaration Of Independence If Spain Doesn't Approve Referendum <p><a href=""><em>Authored by Mike Shedlock via,</em></a></p> <p><em><a href=""><img height="347" src="" width="600" /></a></em></p> <p>The<strong> constitutional crisis in Spain may be coming to a head quickly</strong>&nbsp;according to a leaked document on a &ldquo;<a href="" rel="noopener noreferrer" target="_blank">Secret Law for Catalonia Independence</a>&rdquo; as reported by El Pais.<br /><span id="more-45947">&nbsp;</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Spain&rsquo;s Attorney General José Manuel Maza is set to examine the legality of a plan outlined by the regional government of Catalonia to activate immediate secession from Spain if the central government in Madrid stops it from holding a vote on independence &ndash; something it is <a href="" rel="noopener noreferrer" target="_blank">planning on doing in September or October of this year</a>.</strong></p> <p>&nbsp;</p> <p>The independence mechanism is <strong>detailed in a secret draft version of legislation being prepared by the Generalitat, the Catalan regional government, </strong>and to which EL PAÍS has had access.</p> <p>&nbsp;</p> <p>The document aims to work as a provisional Catalan Constitution that, according to the text, would be in place during the two-month period that the parliament would have to begin a process that would culminate in the &ldquo;parliamentary republic&rdquo; of Catalonia.</p> <p>&nbsp;</p> <p><em><strong>&ldquo;If the Spanish state <a href="" rel="noopener noreferrer" target="_blank">effectively impedes the holding of a referendum</a>, this law will enter into effect in a complete and immediate manner when the [regional] parliament has verified such an impediment,&rdquo; </strong></em>the draft legislation reads.</p> <p>&nbsp;</p> <p>The document has a section that covers the referendum itself and features the question that would be asked of voters:<em><span style="text-decoration: underline;"><strong> &ldquo;Do you want Catalonia to be a state that is independent from Spain?&rdquo; </strong></span></em>The intention in the text is that this part of the legislation would come into effect first in order to be able to hold the referendum, and indicates that a majority of votes in favor, no matter how slim, and with no minimum participation level, would ratify the decision and mean that it was binding.</p> <p>&nbsp;</p> <p><strong>The text makes a number of references to itself as being a &ldquo;founding law,&rdquo; and goes into exhaustive details &ndash; albeit with many legal loopholes and unknowns &ndash; about the breakaway:</strong> i.e. who would be a Catalan citizen, how it would be possible to obtain nationality, which Spanish laws would remain in force and which would not, what would happen to government workers currently employed by the state, among other details.</p> <p>&nbsp;</p> <p>The authors of the text ignore legal and material elements that have enormous importance and complexity, such as the <a href="" rel="noopener noreferrer" target="_blank">whether this new republic would continue to form part of Europe</a>, or whether social benefits or pensions would be guaranteed, or whether all taxation &ndash; and fines for non-payment &ndash; would be the responsibility of the regional government.</p> <p>&nbsp;</p> <p>Under the reasoning of the authors of the text, none of these issues would infringe the law because, as the second article reads, &ldquo;national sovereignty resides with the people of Catalonia, from whom all powers of the State emanate.&rdquo;</p> </blockquote> <p><span style="text-decoration: underline;"><strong>Expect Fireworks</strong></span></p> <p><strong>The Catalonia independence threat is smack on top of a Spanish government crisis in which Mariano Rajoy has threatened to dissolve parliament and call snap elections if his budget does not pass. </strong></p> <p>The surprise results of Socialist Party (PSOE) leadership election on Sunday, in which Pedro Sánchez returned to power, makes it very likely Rajoy will not get his budget passed. For details, please see <a href="" target="_blank">Voters Smack Spain&rsquo;s Political Leadership: Snap Spanish Presidential Elections Coming Up?</a></p> <p>* * *</p> <p>As a reminder, Catalonia is not alone...</p> <p><a href=""><img height="345" src="" width="600" /></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="616" height="356" alt="" src="" /> </div> </div> </div> Autonomous communities of Spain Catalan independence Catalan independence movement Catalan nationalism Catalan self-determination referendum Catalonia Crown of Aragon El País None Politics Politics of Catalonia Politics of Spain regional government Socialist Party Spanish government Statute of Autonomy of Catalonia Wed, 24 May 2017 09:00:00 +0000 Tyler Durden 596531 at Here Are The 66 Programs That Trump's Budget Eliminates <p>President Trump&#39;s fiscal 2018 budget proposal would completely eliminate 66 federal programs, for a savings of $26.7 billion.&nbsp;</p> <p><iframe frameborder="no" height="332" scrolling="no" src=";widgetId=1&amp;trackingGroup=69016&amp;playlistId=19132&amp;siteSection=thehill2300_nws_pol_sec&amp;videoId=32451049" width="590"></iframe></p> <p><a href=""><em>As The Hill reports, </em></a>some of the programs would receive funding for 2018 as part of a phasing-out plan.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 94px;" /></a></p> <p>Here are the programs the administration wants on the chopping block...</p> <h3>Agriculture Department &mdash; $855 million</h3> <ul> <li>McGovern-Dole International Food for Education</li> <li>Business-Cooperative Service</li> <li>Rural Water and Waste Disposal Program Account</li> <li>Single Family Housing Direct Loans</li> </ul> <h3>Commerce Department &mdash; $633 million</h3> <ul> <li>Economic Development Administration</li> <li>Manufacturing Extension Partnership</li> <li>Minority Business Development Agency</li> <li>National Oceanic and Atmospheric Administration Grants and Education</li> </ul> <h3>Education Department &mdash; $4.976 billion</h3> <ul> <li>21st Century Community Learning Centers</li> <li>Comprehensive Literacy Development Grants</li> <li>Federal Supplemental Educational Opportunity Grants</li> <li>Impact Aid Payments for Federal Property</li> <li>International Education</li> <li>Strengthening Institutions</li> <li>Student Support and Academic Enrichment Grants</li> <li>Supporting Effective Instruction State Grants</li> <li>Teacher Quality Partnership</li> </ul> <h3>Energy Department &mdash; $398 million</h3> <ul> <li>Advanced Research Projects Agency&mdash;Energy</li> <li>Advanced Technology Vehicle Manufacturing Loan Program and Title 17 Innovative Technology Loan Guarantee Program</li> <li>Mixed Oxide Fuel Fabrication Facility</li> </ul> <h3>Health and Human Services &mdash; $4.834 billion</h3> <ul> <li>Agency for Healthcare Research and Quality</li> <li>Community Services Block Grant</li> <li>Health Professions and Nursing Training Programs</li> <li>Low Income Home Energy Assistance Program</li> </ul> <h3>Homeland Security &mdash; $235 million</h3> <ul> <li>Flood Hazard Mapping and Risk Analysis Program</li> <li>Transportation Security Administration Law Enforcement Grants</li> </ul> <h3>Housing and Urban Development &mdash; $4.123 billion</h3> <ul> <li>Choice Neighborhoods</li> <li>Community Development Block</li> <li>HOME Investment Partnerships Program</li> <li>Self-Help and Assisted Homeownership Opportunity Program Account</li> </ul> <h3>Interior Department &mdash; $122 million</h3> <ul> <li>Abandoned Mine Land Grants</li> <li>Heritage Partnership Program</li> <li>National Wildlife Refuge Fund</li> </ul> <h3>Justice Department &mdash; $210 million</h3> <ul> <li style="text-align: justify;">State Criminal Alien Assistance Program</li> </ul> <h3>Labor Department &mdash; $527 million</h3> <ul> <li>Migrant and Seasonal Farmworker Training</li> <li>OSHA Training Grants</li> <li>Senior Community Service Employment Program</li> </ul> <h3>State Department and USAID &mdash; $4.256 billion</h3> <ul> <li>Development Assistance</li> </ul> <h3>Earmarked Appropriations for Non-Profit Organizations</h3> <ul> <li>The Asia Foundation</li> <li>East-West Center</li> <li>P.L. 480 Title II Food Aid</li> </ul> <h3>State Department, USAID, and Treasury Department &mdash; $1.59 billion</h3> <ul> <li>Green Climate Fund and Global Climate Change Initiative</li> </ul> <h3>Transportation Department &mdash; $499 million</h3> <ul> <li>National Infrastructure Investments (TIGER)</li> </ul> <h3>Treasury Department &mdash; $43 million</h3> <p>Global Agriculture and Food Security Program</p> <h3>Environmental Protection Agency &mdash; $493 million</h3> <ul> <li>Energy Star and Voluntary Climate Programs</li> <li>Geographic Programs</li> </ul> <h3>National Aeronautics and Space Administration &mdash; $269 million</h3> <ul> <li>Five Earth Science Missions</li> <li>Office of Education</li> </ul> <h3>Other Independent Agencies &mdash; $2.683 billion</h3> <ul> <li>Chemical Safety Board</li> <li>Corporation for National and Community Service</li> <li>Corporation for Public Broadcasting</li> <li>Institute of Museum and Library Services</li> </ul> <h3>International Development Foundations</h3> <ul> <li>African Development Foundation</li> <li>Inter-American Foundation</li> <li>Legal Services Corporation</li> <li>National Endowment for the Arts</li> <li>National Endowment for the Humanities</li> <li>Neighborhood Reinvestment Corporation</li> <li>Overseas Private Investment Corporation</li> </ul> <h3>Regional Commissions</h3> <ul> <li>Appalachian Regional Commission</li> <li>Delta Regional Authority</li> <li>Denali Commission</li> <li>Northern Border Regional Commission</li> <li>U.S. Institute of Peace</li> <li>U.S. Trade and Development Agency</li> <li>Woodrow Wilson International Center for Scholars</li> </ul> <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="94" alt="" src="" /> </div> </div> </div> Administration of federal assistance in the United States Advanced Research Projects Agency African Development Foundation Arts National Endowment Business Commission Northern Border Regional Commission U.S. Institute Community Service Department of Agriculture Department of Commerce Department of Education Department of Energy Department of Housing and Urban Development Department of Justice Department of Labor Department of State Department of the Interior Department of the Treasury Development Agency Woodrow Wilson International Center Earth Science Missions Office Economy Environment Environmental Protection Agency Federal grants in the United States Food security Global Climate Change Initiative Transportation Department Government Green Climate Fund Heritage Partnership Program National Wildlife Refuge Fund Legal Services Corporation National Endowment National Aeronautics and Space Administration National Endowment for the Arts National Oceanic and Atmospheric Administration Occupational Safety and Health Administration Politics Public Broadcasting Institute Social Issues Treasury Department United States Agency for International Development United States Agency for International Development United States Department of Health and Human Services United States Department of Housing and Urban Development United States federal budget Wed, 24 May 2017 08:35:00 +0000 Tyler Durden 596525 at Yuan Tumbles As Moody's Downgrades China To A1, Warns On Worsening Debt Outlook <p><strong>Offshore Yuan tumbled as Moody&#39;s cut China&#39;s credit rating to A1 from Aa3</strong>, saying that the outlook for the country&rsquo;s <strong>financial strength will worsen, with debt rising and economic growth slowing</strong>. This leaves the world&#39;s hoped-for reflation engine rated below Estonia, Qatar, and South Korea and <strong>on par with Slovakia and Japan</strong>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;While ongoing progress on reforms is likely to transform the economy and financial system over time, it is <strong>not likely to prevent a further material rise in economy-wide debt, and the consequent increase in contingent liabilities for the government,</strong>&rdquo; the ratings company said in a statement Wednesday.</p> </blockquote> <p>And the most obvious reaction was Yuan selling.</p> <p><a href=""><img height="313" src="" width="600" /></a></p> <p>&nbsp;</p> <p><u><strong>Full Statement: Moody&#39;s Investors Service has today downgraded China&#39;s long-term local currency and foreign currency issuer ratings to A1 from Aa3 and changed the outlook to stable from negative.</strong></u></p> <p><em>The downgrade reflects Moody&#39;s expectation that China&#39;s financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows. While ongoing progress on reforms is likely to transform the economy and financial system over time, it is not likely to prevent a further material rise in economy-wide debt, and the consequent increase in contingent liabilities for the government.</em></p> <p><em>The stable outlook reflects our assessment that, at the A1 rating level, risks are balanced. The erosion in China&#39;s credit profile will be gradual and, we expect, eventually contained as reforms deepen. The strengths of its credit profile will allow the sovereign to remain resilient to negative shocks, with GDP growth likely to stay strong compared to other sovereigns, still considerable scope for policy to adapt to support the economy, and a largely closed capital account.</em></p> <p><em>China&#39;s local currency and foreign currency senior unsecured debt ratings are downgraded to A1 from Aa3. The senior unsecured foreign currency shelf rating is also downgraded to (P)A1 from (P)Aa3.</em></p> <p><em>China&#39;s local currency bond and deposit ceilings remain at Aa3. The foreign currency bond ceiling remains at Aa3. The foreign currency deposit ceiling is lowered to A1 from Aa3. China&#39;s short-term foreign currency bond and bank deposit ceilings remain Prime-1 (P-1).</em></p> <h2><u>RATIONALE FOR THE RATING DOWNGRADE TO A1</u></h2> <p><strong>Moody&#39;s expects that economy-wide leverage will increase further over the coming years. </strong>The planned reform program is likely to slow, but not prevent, the rise in leverage. The importance the authorities attach to maintaining robust growth will result in sustained policy stimulus, given the growing structural impediments to achieving current growth targets. Such stimulus will contribute to rising debt across the economy as a whole.</p> <p><strong><u>RISING DEBT WILL ERODE CHINA&#39;S CREDIT METRICS, WITH ROBUST GROWTH INCREASINGLY RELIANT ON POLICY STIMULUS</u></strong></p> <p>While China&#39;s GDP will remain very large, and growth will remain high compared to other sovereigns, potential growth is likely to fall in the coming years. The importance the Chinese authorities attach to growth suggests that the corresponding fall in official growth targets is likely to be more gradual, rendering the economy increasingly reliant on policy stimulus. At least over the near term, with monetary policy limited by the risk of fuelling renewed capital outflows, the burden of supporting growth will fall largely on fiscal policy, with spending by government and government-related entities -- including policy banks and state-owned enterprises (SOEs) -- rising.</p> <p><strong>GDP growth has decelerated in recent years from a peak of 10.6% in 2010 to 6.7% in 2016.</strong> This slowdown largely reflects a structural adjustment that we expect to continue. Looking ahead, we expect China&#39;s growth potential to decline to close to 5% over the next five years, for three reasons. First, capital stock formation will slow as investment accounts for a diminishing share of total expenditure. Second, the fall in the working age population that started in 2014 will accelerate. Third, we do not expect a reversal in the productivity slowdown that has taken place in the last few years, despite additional investment and higher skills.</p> <p>Official GDP growth targets have also adjusted downwards gradually and the authorities&#39; emphasis is progressively shifting towards the quality rather than the quantity of growth. However, the adjustment in official targets is unlikely to be as fast as the slowdown in potential growth as robust economic growth is essential to fulfilment of the current Five Year Plan and appears to be considered by the authorities as important for the maintenance of economic and social stability.</p> <p><strong>As a consequence, notwithstanding the moderate general government budget deficit in 2016 of around 3% of GDP, we expect the government&#39;s direct debt burden to rise gradually towards 40% of GDP by 2018 and closer to 45% by the end of the decade, in line with the 2016 debt burden for the median of A-rated sovereigns (40.7%) and higher than the median of Aa-rated sovereigns (36.7%).</strong></p> <p>We also expect indirect and contingent liabilities to increase. We estimate that in 2016 the outstanding amount of policy bank loans and of bonds issued by Local Government Financing Vehicles (LGFVs) increased by a combined 6.2% of 2015 GDP, after 5.5% the previous year. In addition to investment by LGFVs, investment by other SOEs increased markedly. Similar increases in financing and spending by the broader public sector are likely to continue in the next few years in order to maintain GDP growth around the official targets.</p> <p>More broadly, we forecast that economy-wide debt of the government, households and non-financial corporates will continue to rise, from 256% of GDP at the end of last year according to the Institute of International Finance. This is consistent with the gradual approach to deleveraging being taken by the Chinese authorities and will happen because economic activity is largely financed by debt in the absence of a sizeable equity market and sufficiently large surpluses in the corporate and government sectors. While such debt levels are not uncommon in highly-rated countries, they tend to be seen in countries which have much higher per capita incomes, deeper financial markets and stronger institutions than China&#39;s, features which enhance debt-servicing capacity and reduce the risk of contagion in the event of a negative shock.</p> <p>Taken together, we expect direct government, indirect and economy-wide debt to continue to rise, signalling an erosion of China&#39;s credit profile which is best reflected now in an A1 rating.</p> <p><strong><u>REFORMS WILL NOT FULLY OFFSET THE RISE IN ECONOMIC AND FINANCIAL RISK</u></strong></p> <p>The authorities are part of the way through a reform program intended to sustain and enhance the quality of growth over the longer term, as well as to reduce the risks to the economy and the financial system posed by high corporate and, in particular, SOE debt. One related objective is to contain, and ultimately reduce, SOE leverage.</p> <p>The authorities&#39; commitment to reform is clear. It is quite likely that their efforts will, over time, improve the allocation of capital in the economy. Over the nearer term, the authorities have taken steps to contain the rise in SOE debt and to discourage some SOEs from further domestic and external investment, particularly in over capacity sectors.</p> <p><strong>However, we do not think that the reform effort will have sufficient impact, sufficiently quickly, to contain the erosion of credit strength associated with the combination of rising economy-wide leverage and slower growth.</strong> In particular, in our view, the key measures introduced to date will have a limited impact on productivity and the efficiency with which capital is allocated over the foreseeable future.</p> <p>For example, one key set of reforms is the program of debt-equity swaps which aims to lower leverage in parts of the SOE sector, transferring the associated risks to the banking sector. At present, we estimate that the value of swaps announced is a very small fraction -- around 1% -- of SOE liabilities. Moreover, there is very little transparency about the terms of these transactions or their likely impact on SOEs&#39; and banks&#39; creditworthiness.</p> <p>Other measures intended to improve investment allocation include negative lists on investment in excess capacity sectors and the introduction of mixed ownership. The former will likely reduce the major losses on investments of the past. However, excess capacity sectors only account for a small proportion of total investment. Only limited improvement in the allocation of capital would result from such measures. Meanwhile, mixed ownership is at a very preliminary stage, having been introduced in only a few dozen SOEs, and on too small a scale for now to have any impact on productivity in the economy as a whole.</p> <p><strong>Looking beyond the corporate sector, the financial sector remains under-developed, notwithstanding reforms introduced to improve the provision of credit; pricing of risk remains incomplete, with the cost of debt still partly determined by assumptions of government support to public sector or other entities perceived to be strategic.</strong> And with increased scrutiny of capital outflows, the capital account remains largely closed. While that insulates the economy and financial system from global volatility, it also constrains the development of domestic capital markets by limiting the flow of inward and outbound capital.</p> <p>Overall, we believe that the authorities&#39; reform efforts are likely, over time, to achieve some measure of economic rebalancing and improvement in the allocation of capital. <strong>But we think that progress will be too slow to arrest the rise in economy-wide leverage.</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="954" height="498" alt="" src="" /> </div> </div> </div> Asian financial crisis Bond Budget Deficit Business Capital Markets China Economy Economy of Indonesia Economy of the European Union Estonia European debt crisis Finance in China Great Recession Japan Monetary Policy ratings Slovakia Sovereigns Stock market crashes Transparency Volatility Yuan Wed, 24 May 2017 08:32:21 +0000 Tyler Durden 596524 at Fidelity Is Mining Bitcoin, CEO Abigail Johnson Admits <p>In what bitcoin geeks undoubtedly interpreted as a sign of bitcoin&rsquo;s renewed relevance now that its price is at all-time highs, Fidelity CEO Abigail Johnson told <strong>CoinDesk&rsquo;s Consensus conference that her company is now in the business of mining bitcoin.</strong></p> <p><a href="">Per the FT:</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Ms Johnson noted that<strong> Fidelity has also set up a bank of computers </strong>built by 21 Inc that can crunch complex algorithms to be rewarded with bitcoin.</p> <p>&nbsp;</p> <p>&ldquo;<strong>My&hellip;computer has mined over 200,000 satoshis,&rdquo; she said, using the name for the smallest unit of bitcoin.</strong></p> </blockquote> <p>Her remarks coincide with an astounding rally in virtual currencies like bitcoin.<a href=""> As DoubleLine&rsquo;s Jeffrey Gundlach noted on Tuesday,</a> bitcoin is up 100% in under two months, implying that the turmoil in Chinese markets was driving more locals into bitcoin.</p> <p><a href=""><img alt="" src="" style="width: 500px; height: 287px;" /></a></p> <p>One coin was trading at $2,275 Tuesday according to Coinbase, the latest in a series of all-time highs as global uncertainty rises...</p> <p><a href=""><img alt="" src="" style="width: 500px; height: 288px;" /></a></p> <p>Johnson also added that <strong>Fidelity now allows employee to pay for lunch with bitcoin </strong>at the cafeteria in its Boston headquarters. She noted that fewer than 100 employees have paid with bitcoin, demonstrating an unnatural-sounding mastery of industry slang.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;I guess we have a lot of <u><em><strong>hodlers</strong></em>,</u>&rdquo; she said, using the <strong>slang for bitcoin users who avoid selling the currency when it jumps in value.</strong></p> </blockquote> <p>And Fidelity&#39;s CEO also revealed information about her company&#39;s partners on its journey, naming blockchain startup Axoni, investment firm Boost VC and university initiatives based out of MIT, University College London and Cornell. To date, Johnson explained that Fidelity Labs, its internal R&amp;D division has also set up experiments for bitcoin micropayments and even run bitcoin and ethereum mining operations in the spirit of learning more about the technology. Further,<strong><em> she revealed that Fidelity will be taking some conservative steps to expose Fidelity&#39;s customers more to the industry, announcing that customers will soon be able to see Coinbase holdings on Already, she said, this feature is available to employees who own digital currencies available through the startup&#39;s services.</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="1000" height="665" alt="" src="" /> </div> </div> </div> Bitcoin Bitcoin BitPay Blockchain Business Coinbase CoinDesk Cornell Cryptocurrencies Currency Draft:Bitcoin Suisse AG E-commerce Exonumia Financial technology Gundlach MIT University College London Wed, 24 May 2017 08:15:00 +0000 Tyler Durden 596516 at The Republic Has Fallen: The Deep State's Plot To Take Over America Has Succeeded <p><a href=""><em>Submitted by John Whitehead via The Rutherford Institute,</em></a></p> <p>No doubt about it.</p> <p><strong>The coup d&rsquo;etat has been successful.</strong></p> <p>The Deep State - a.k.a. the police state, a.k.a. the military industrial complex - has taken over.</p> <p><u><strong>The American system of representative government has been overthrown by a profit-driven, militaristic corporate state bent on total control and global domination through the imposition of martial law here at home and by fomenting wars abroad.</strong></u></p> <p><strong>When in doubt, follow the money trail.</strong></p> <p>It always points the way.</p> <p>Every successive president starting with Franklin D. Roosevelt has been bought&mdash;lock, stock and barrel&mdash;and made to dance to the tune of the Deep State.</p> <p>Enter Donald Trump, the candidate who swore to <a href="">drain the swamp</a> in Washington DC.</p> <p>Instead of putting an end to the corruption, however, Trump has <a href="">paved the way for lobbyists, corporations, the military industrial complex, and the Deep State</a> to feast on the carcass of the dying American republic.</p> <p>Just recently, for instance, Trump agreed to <a href="">sell Saudi Arabia more than $110 billion in military weapons</a>.</p> <p>Meanwhile, Trump&mdash;purportedly in an effort to balance the budget in 10 years&mdash;wants to <a href="">slash government funding for programs for the poor</a>, ranging from health care and food stamps to student loans and disability payments.</p> <p>The <a href="">military doesn&rsquo;t have to worry</a> about tightening its belt, however. No, the military&rsquo;s budget&mdash;with its trillion dollar wars, its <a href="">$125 billion in administrative waste</a>, and its contractor-driven <a href="">price gouging</a> that hits the American taxpayer where it hurts the most&mdash;will continue to grow, thanks to Trump.</p> <p><strong>This is how you keep the Deep State in power.</strong></p> <p><em><strong>The rich will get richer, the poor will get poorer, the military will get more militaristic, America&rsquo;s endless wars will get more endless, and the prospect of peace will grow ever dimmer.</strong></em></p> <p>As for the terrorists, they will keep on being played for pawns as long as <a href="">Saudi Arabia remains their breeding ground</a> and America remains the source of their weapons, training and know-how.</p> <p><strong>Follow the money.&nbsp; It always points the way.</strong></p> <p>As Bertram Gross noted in <em>Friendly Fascism: The New Face of Power in America</em>,<strong> &ldquo;<a href="">evil now wears a friendlier face than ever before in American history</a>.&rdquo;</strong></p> <p>Writing in 1980, Gross predicted a future in which he saw:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&hellip;a new despotism creeping slowly across America. Faceless oligarchs sit at command posts of a corporate-government complex that has been slowly evolving over many decades. In efforts to enlarge their own powers and privileges, they are willing to have others suffer the intended or unintended consequences of their institutional or personal greed. For Americans, these consequences include chronic inflation, recurring recession, open and hidden unemployment, the poisoning of air, water, soil and bodies, and, more important, the subversion of our constitution. More broadly, consequences include <a href="">widespread intervention in international politics through economic manipulation, covert action, or military invasion</a>...</p> </blockquote> <p><em><strong>We&rsquo;ve been losing our freedoms so incrementally for so long&mdash;sold to us in the name of national security and global peace, maintained by way of martial law disguised as law and order, and enforced by a standing army of militarized police and a political elite determined to maintain their powers at all costs&mdash;that it&rsquo;s hard to pinpoint exactly when it all started going downhill, but we&rsquo;re certainly on that downward trajectory now, and things are moving fast.</strong></em></p> <p>The &ldquo;government of the people, by the people, for the people&rdquo; has perished.</p> <p>It will not be revived or restored without a <a href="">true revolution of values</a> and a <a href="">people&rsquo;s rebellion</a> the likes of which we may not see for a very long time.</p> <p>America is a profitable business interest for a very select few, and war&mdash;wars waged abroad against shadowy enemies and wars waged at home against the American people&mdash;has become the Deep State&rsquo;s primary means of income.</p> <p><u><strong>After all, war is big business.</strong></u></p> <p>In order to maintain a profit margin, one would either have to find new enemies abroad or focus on fighting a war at home, against the American people, and that&rsquo;s exactly what we&rsquo;re dealing with today.</p> <ul> <li>Wars waged abroad to the tune of <a href="">trillions of dollars</a> since 9/11.</li> </ul> <ul> <li><a href="">Military equipment</a> sold to foreign enemies.</li> </ul> <ul> <li>Local police transformed into a standing army in the American homeland through <a href="">millions of dollars&rsquo;</a> worth of <a href="">grants</a> to local police agencies for military weapons, <a href="">vehicles</a>, training and assistance.</li> </ul> <ul> <li>The public acclimated to the sights and sounds of martial law through <a href="">urban training exercises</a> and domestic military training drills <a href="">timed and formulated to coincide with or portend actual crises</a>.</li> </ul> <ul> <li>The citizenry taught to fear and distrust each other and to welcome the trappings of the police state.</li> </ul> <p>Had the government tried to ram such a state of affairs down our throats suddenly, it might have had a rebellion on its hands. Instead, the American people have been given the boiling frog treatment, immersed in water that slowly is heated up&mdash;degree by degree&mdash;so that they&rsquo;ve fail to notice that they&rsquo;re being trapped and cooked and killed.</p> <p><u><em><strong>&ldquo;We the people&rdquo; are in hot water now.</strong></em></u></p> <p>As I make clear in my book <a href=""><em>Battlefield America: The War on the American People</em></a>, the Constitution doesn&rsquo;t stand a chance against a federalized, globalized standing army protected by legislative, judicial and executive branches that are all on the same side, no matter what political views they subscribe to: suffice it to say, they are not on <em>our </em>side or the side of freedom.</p> <p><strong>From Clinton to Bush, then Obama and now Trump, it&rsquo;s as if we&rsquo;ve been caught in a time loop, forced to re-live the same thing over and over again: the same assaults on our freedoms, the same disregard for the rule of law, the same subservience to the Deep State, and the same corrupt, self-serving government that exists only to amass power, enrich its shareholders and ensure its continued domination.</strong></p> <p>The republic has fallen to <a href="">fascism with a smile</a>.</p> <p>Elections will not save us.</p> <p><em><strong>Learn the treacherous lessons of 2008 and 2016:&nbsp; presidential elections have made a mockery of our constitutional system of government, suggesting that our votes can make a difference when, in fact, they merely serve to maintain the status quo.</strong></em></p> <p>Don&rsquo;t delay.</p> <p><strong>Start now&mdash;in your own communities, in your schools, at your city council meetings, in newspaper editorials, at protests&mdash;by pushing back against laws that are unjust, police departments that overreach, politicians that don&rsquo;t listen to their constituents, and a system of government that grows more tyrannical by the day.</strong></p> <p>If you wait until 2020 to rescue our republic from the clutches of the Deep State, it will be too late.</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="858" height="502" alt="" src="" /> </div> </div> </div> Alt-right American people of German descent Climate change skepticism and denial Corruption Donald Trump Donald Trump Fail Foreign policy of Donald Trump Local police Martial Law Militarism Militarization of police national security Newspaper Political positions of Donald Trump Politics Politics Recession Rutherford Institute Saudi Arabia Student Loans The Apprentice Unemployment United States War WWE Hall of Fame Wed, 24 May 2017 08:00:00 +0000 Tyler Durden 596527 at UK Deploys Army As Terror Threat Raised To Critical, May Warns "More Attacks Imminent" <p>In a televised statement from Downing Street, UK PM Theresa May said Britain has increased its security threat level to the highest possible &quot;critical&quot; from &quot;severe&quot;, following Monday&#39;s suicide attack in Manchester that killed 22 people, and she also said members of the army would be positioned at key sites to free up police for patrols and military personnel might be deployed at public events such as concerts and sports events as a further attack was seen as potentially imminent.</p> <p>&ldquo;Members of the armed forces deployed in this way will be under the command of police officers,&rdquo; May said, adding that &quot;we cannot ignore that there is a wider group of individuals linked to Manchester attack&quot;.</p> <p>The Prime Minister also said the independent body which sets the threat level had recommended it be raised from &quot;severe&quot; after a man named by police as Salman Abedi set off an improvised bomb on Monday night as crowds streamed out of a concert.</p> <p>&quot;It is now concluded on the basis of today&#39;s investigations that the threat level should be increased for the time being from severe to critical,&quot; she said in a televised statement following a meeting of the government&#39;s crisis response committee. <strong>This means that their assessment is not only that an attack remains highly likely but that a further attack may be imminent</strong>.&quot;</p> <p>May continued: &quot;I do not want the public to feel unduly alarmed. &quot;We have faced a serious terror threat in our country for many years and the operational response I have just outlined is a proportionate and sensible response to the threat that our security experts judge we face.</p> <p>&quot;I ask everybody to be vigilant and to co-operate with and support the police as they go about their important work.</p> <p>&quot;I want to end by repeating the important message I gave in my statement earlier today. We will take every measure available to us and provide every additional resource we can to the police and the security services as they work to protect the public.</p> <p>&quot;And while we mourn the victims of last night&#39;s appalling attack, we stand defiant. The spirit of Manchester and the spirit of Britain is far mightier than the sick plots of depraved terrorists, that is why the terrorists will never win and we will prevail.&quot;</p> <p>May, who is facing a national election in two weeks, said the man named by police as the attacker, Salman Abedi, was born and brought up in Britain and investigations into whether he was working alone were ongoing.</p> <p><u><strong>Full Statement:</strong></u></p> <p><iframe frameborder="0" height="315" src="" width="560"></iframe></p> <p>* * *</p> <p>Britain&rsquo;s threat level has been at the &ldquo;severe&rdquo; level since 2014. It has only been at a &ldquo;critical&rdquo; level twice before, in 2006 and 2007 (see table below). May said the independent body which sets the threat level had recommended it be raised after a man named by police as Salman Abedi set off an improvised bomb on Monday night as crowds streamed out of a concert.</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">Terror threat now critical. And 5k troops on streets guarding parliament, stations etc.<br />Extraordinary <a href=""></a></p> <p>&mdash; Paul Johnson (@paul__johnson) <a href="">May 23, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>&nbsp;</p> <p><strong>May mentions &quot;Operation Temperer&quot; </strong>which has been prepared since 2015<a href=""> (as The Telegraph details)</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>More than 5,000 soldiers could be deployed on the streets of Britain in the wake of major terrorist attacks, under a secret Government plan, it has emerged.</strong></p> <p>&nbsp;</p> <p>The troops would be sent to guard key targets in major cities if Isil or other terror groups launched multiple attacks on UK soil, under the plan, codenamed Operation Temperer.</p> <p>&nbsp;</p> <p>Details of the operation were disclosed<a href=""> by the Mail on Sunday</a> after accidentally being uploaded to the National Police Chiefs Council website last week.</p> <p>&nbsp;</p> <p>Officers had been briefed on the plan by Deputy Chief Constable Simon Chesterman, the &lsquo;national lead&rsquo; for armed policing, during an NPCC meeting in Leicester in April.</p> <p>&nbsp;</p> <p><strong>Under the heading &lsquo;counter terrorism post Paris large scale military support to the police&rsquo;,</strong> minutes of the meeting disclosed that <strong>up to 5,100 troops could be deployed &ldquo;based on force assessments of how many military officers could augment armed police officers engaged in protective security duties&rdquo;.</strong></p> <p>&nbsp;</p> <p><strong>Soldiers would serve alongside armed police officers to protect against further attacks while plotters were hunted down.</strong></p> </blockquote> <p>A spokesman for the Ministry of Defence said: <strong>&ldquo;The MOD works closely with other government departments and agencies to ensure that it is able to provide appropriate assistance in response to any security threats, including national security. We keep contingency plans under constant review.&rdquo;</strong></p> <p>May says the public should not be &quot;unduly alarmed&quot; and says the deployment is proportional to the situation. The good news is these &#39;critical&#39; alerts usually do not last long...</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">The last two occasions the threat level was raised to Critical the alert lasted no more than a few days: <a href=""></a></p> <p>&mdash; Alan Travis (@alantravis40) <a href="">May 23, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>Not exactly reassuring.</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">Martial laws &amp; threats levels escalated in two countries in 24-hours only because of <a href="">#ISIS</a>. Panic is going from regional to global now.. <a href=""></a></p> <p>&mdash; Rami (@RamiAILoIah) <a href="">May 23, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="644" height="403" alt="" src="" /> </div> </div> </div> Airport security army Counter-intelligence and counter-terrorism organizations Counter-terrorism ETC Europe Firearms unit Geography of Europe Government Government of the United Kingdom Inter-Services Intelligence Iraqi insurgency Islam Islamic State of Iraq and the Levant Islamic terrorism in England Islamic terrorism in the United Kingdom Law enforcement Manchester Arena Ministry of Defence National Police Chiefs Council National security Politics Politics Politics of the United Kingdom Prevention Prime Minister of the United Kingdom Public safety Safety Security Terrorism Theresa May Threat U.K. United Kingdom Violence against LGBT people Wahhabism War World Wed, 24 May 2017 07:45:32 +0000 Tyler Durden 596519 at Turkish NBA Player Has Passport Revoked By "Hitler Of Our Century" <p><a href=""><em>Authored by Simon Black via,</em></a></p> <p><strong>Enes Kanter is a Turkish citizen who plays center for the NBA&rsquo;s Oklahoma City Thunder.</strong></p> <p>Like many professional athletes, Kanter has a couple of charities in his name.</p> <p>His education fund provides first-year college scholarships to support selected US students &ndash; including a family&rsquo;s first female child and children of law enforcement and firefighters who lost their lives on duty.</p> <p>Kanter&rsquo;s other charity is the Light Foundation. This one has an international bent, providing meals and clothes to needy families.</p> <p>A global tour with the Light Foundation stirred up Friday&rsquo;s troubles.</p> <p><strong>After traveling to a few countries, Kanter and his team flew from Indonesia to Romania. But upon landing in Romania, Kanter found his passport cancelled by the Turkish embassy.</strong></p> <p><span style="text-decoration: underline;"><em><strong>Kanter&rsquo;s crime? His political views.</strong></em></span></p> <p><strong><a href=""><img height="313" src="" width="600" /></a></strong></p> <p><strong>Enes Kanter has long been a vocal critic of Turkey&rsquo;s president, Recep Erdogan, calling him the Hitler of our century.</strong></p> <p><em><strong>Although not a Hitler, Erdogan is far from an angel.</strong></em></p> <p>In July 2016 when facing a coup, he ordered his forces to open fire on his own people, killing 270. He had another 50,000 arrested.</p> <p>Last month in the country&rsquo;s constitutional referendum, Erdogan consolidated greater power by the slimmest majority &ndash; 51% of the votes, if the vote count is to be believed.</p> <p><strong>With that victory, Erdogan has near dictatorial powers, which is why he was able to unilaterally suspend Kanter&rsquo;s passport.</strong></p> <p>Last week, I wrote about Venezuela. There, government-sanctioned snipers scan the streets. Its starving, desperate citizens are trapped inside the country&rsquo;s borders with no way out.</p> <p><u><em><strong>To Europeans and Americans, Turkey&rsquo;s crackdown and Venezuela&rsquo;s hell on earth are a world away from their comfortable lives.</strong></em></u></p> <p><u><em><strong>But in the West, symptoms of government overreach that adversely impact its citizens&rsquo; futures are everywhere.</strong></em></u></p> <p>The war on cash continues unabated.</p> <p>Near-zero interest rates return nothing on retirees&rsquo; life savings.</p> <p>Easy credit ensures that any entrepreneur with a bozo idea receives funding. And it fuels both our insane stock market valuations and <a href="" rel="noopener noreferrer" target="_blank">consumer debt to all-time highs</a>.</p> <p>US regulators crank out 150, 200, sometimes 300+ pages <a href="" rel="noopener noreferrer" target="_blank">daily</a>.</p> <p>And then there&rsquo;s the ballooning national debts of the Eurozone and the US.</p> <p>It would be foolish to place all your faith and confidence in only one such government.</p> <p><strong>Enes Kanter&rsquo;s experience with Turkey is the latest example. It shows how susceptible citizens are to an out of control government, even when traveling beyond its borders.</strong></p> <p>Whether locked inside borders like Venezuelans or locked out of travel like Kanter, these cases highlight the importance of having a Plan B.</p> <p>A savings account in a well-capitalized foreign jurisdiction, investments outside the ridiculously valued stock market (e.g. Peer to Peer lending backed by real collateral), a second residence and yes, a second passport&hellip;these are steps to ensure that no matter what, you&rsquo;ll be okay.</p> <p>You&rsquo;re not going to be worse off because you&rsquo;re holding a significant amount of, say, Hong Kong dollars.</p> <p>You&rsquo;re not going to curse the fact that you receive steady and safe investment returns.</p> <p>And you&rsquo;re not going to worry about your ability to freely travel around the world.</p> <p>Oh, and if what happened to Kanter seems impossible, consider this:</p> <p><strong>On December 30, 2015 when no one was looking, the US government passed <a href="" rel="noopener noreferrer" target="_blank">H.R. 22 (The FAST Act)</a>, which authorizes them to revoke your passport if they believe, in their sole discretion, that you owe $50,000 in taxes.</strong></p> <p>It&rsquo;s important to note that they don&rsquo;t actually have to prove any wrongdoing.</p> <p><em><strong>They can make a simple allegation. It could even be a clerical error. Then, poof, no more passport.</strong></em></p> <p>It&rsquo;s important to have a hedge against this to ensure that your entire life and livelihood isn&rsquo;t held in the hands of a single government.</p> <p><a href=""><u><em><strong>Do <span class="underline_text">you</span> have a Plan B?</strong></em></u></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="600" height="313" alt="" src="" /> </div> </div> </div> B+ Enes Eurozone Hong Kong Kanter Light Foundation National Basketball Association National Basketball Association Oklahoma Passport peer to peer Politics Romania Russian passport Turkey Turkish embassy US government Wed, 24 May 2017 07:30:00 +0000 Tyler Durden 596530 at