http://www.zerohedge.com/fullrss2.xml/sites/default/files/images/user5/imageroot/draghi/CBO en German Crisis Averted? SPD Ready To Negotiate With Merkel To End Political Deadlock http://www.zerohedge.com/news/2017-11-24/german-crisis-averted-spd-ready-negotiate-merkel-end-political-deadlock <p>The Euro has jumped to a six week high following the latest record high print in the German IFO Business Climate index, which rose from 116.7 to 117.5 (exp. 116.6), but mostly as a result of what appears to be a breakthrough in the German political deadlock that some likened to "<strong>Merkel's Brexit moment</strong>", after Germany’s biggest opposition party, the Social Democrats, on Friday morning announced a reversal in their political strategy and said they are open to talks on backing a government led by Chancellor Angela Merkel, offering a way to break the Berlin deadlock and restore political stability to Europe’s biggest economy.</p> <p>As the <a href="https://www.ft.com/content/4fe2dba2-d0e0-11e7-9dbb-291a884dd8c6">FT reports</a>, the decision, announced after an eight-hour meeting of SPD leaders in party headquarters in Berlin wrapped up in the early hours of Friday, marks a U-turn for the centre-left party, <strong>which had vowed since September’s indecisive general election not to rejoin Ms Merkel’s centre-right bloc in a “grand coalition”</strong>.</p> <p>Commenting on the latest political development, UBS economist Paul Donovan said that "the German SPD are discussing the possibility of some kind of support for the CDU, following talks with the German president. <strong>The German political crisis is not really looking very crisis-like. It is all very orderly and, frankly, a little dull</strong>."</p> <p>Social Democrat Secretary General Hubertus Heil told reporters that the party is ready to start discussions if that’s the course that President Frank-Walter Steinmeier, who is trying to broker a deal, decides upon. Heil spoke after an eight-hour meeting of the SPD leadership in Berlin.&nbsp; “The SPD is firmly convinced that talks are needed,” Heil was quoted as saying by Deutsche Presse-Agentur newswire. “The SPD won’t reject such talks.”</p> <p>More than two months after an inconclusive election that brought a far-right party into parliament and was the CDU's worst showing since World War II, Merkel is still trying to work out how she can govern after her effort to forge a deal with three smaller parties fell apart on Sunday. Still, while Merkel remains skeptical about ruling without a parliamentary majority and the SPD leader Martin Schulz wants to avoid a formal coalition, the two sides are inching closer as they try to bring stability to the country.</p> <p>Over the past few days, pressure has risen on Schulz to reverse his stance since the smaller free-market Free Democratic Party withdrew from coalition talks last week, plunging Germany into a rare bout of political uncertainty, as a repeat German vote is seen as the worst-case political outcome. As <a href="https://www.bloomberg.com/news/articles/2017-11-24/germany-s-spd-decides-to-accept-talks-with-merkel-on-government">Bloomberg notes</a>, "Schulz is facing calls by SPD lawmakers and state leaders to drop his refusal to join a Merkel coalition. <strong>Schulz favors pledging SPD support for a minority government, an arrangement Merkel wants to avoid. </strong>That arrangement might involve an SPD pledge to support Merkel on legislation on a case-by-case basis without joining her administration."</p> <p>Seeking to reciprocate, and sensing the change in the political climate, senior members of Merkel’s party have doubled their efforts to bring the SPD back into the fold. Volker Kauder, head of the CDU-CSU group in parliament, told Germany’s Südwest Presse on Thursday that he would be happy “if the current partners in government found each other once again”. Mr Kauder pointed to the “special responsibility” of the country’s two biggest establishment parties.</p> <p>Seeking to tame hopes that an SPD coalition is now a done deal, Manuela Schwesig, the Social Democrat prime minister of the eastern state of Mecklenburg-Western Pomerania, said on ZDF television that “for us it’s clear that if there are talks, then we will also take part in these talks, but added that "<strong>just because we’re saying that we’re open to talks, it’s not automatically a discussion about a grand coalition, and certainly not a vote for a grand coalition.</strong>”&nbsp; She also stated that some in the SPD are asking “aren’t there alternatives to the automatic grand coalition or to new elections, are there alternatives in between?” Different things are under discussion and we’re saying that we have to talk about these different things now." </p> <p>Furthermore, whatever the SPD decides, it will likely require the approval of members, Heiko Maas of the party leadership committee told ZDF television late Thursday. The SPD is holding a party congress in Berlin from Dec. 7 to Dec. 9, when Schulz will be up for re-election as chairman, and his political career is suddenly in doubt. Having led the SPD to its worst result since World War II in September, <strong>Schulz is under pressure from within his party to step aside, a move that might help clear the way for a grand coalition. </strong>Heil sought to quell the speculation on Thursday, saying “personnel matters” aren’t on the agenda for now. </p> <p>On Thursday, Schulz met with German President Steinmeier as Germany’s head of state, a former SPD foreign minister, tries to secure a stable government. <strong>Steinmeier has made clear he wants to avoid new elections, and has urged party leaders on all sides to show flexibility and readiness to compromise.</strong></p> <p>Meanwhile, as they prepare to engage with Merkel, the Social Democrats are split between those on the left who see the two coalitions with Merkel as the main reason for the slump in its support and those who spy a chance to push through policies such as expanded health care and reaching out to French President Emmanuel Macron to strengthen the euro area, according to a Bloomberg wrap. <strong>Many in the SPD would prefer to stay out of government to prevent the far-right Alternative for Germany, </strong>which entered parliament for the first time with 12.6 percent of the vote in September, from becoming the biggest opposition force.</p> <p>For now, the market is giving the latest developments the benfit of the doubt, and has sent the EURUSD up as much as 0.2% to 1.1875, its strongest level since Oct. 13; the pair climbs a fourth day, with the euro set for its best yearly performance since 2003. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/23/eurusd%2011.24.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/23/eurusd%2011.24_0.jpg" width="500" height="248" /></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="714" height="440" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/merkel%20shulz..jpg?1511518833" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-24/german-crisis-averted-spd-ready-negotiate-merkel-end-political-deadlock#comments Andrea Nahles Angela Merkel Frank-Walter Steinmeier Free Democratic Party German federal election German IFO Business Climate Germany Germany Government Grand coalition Hubertus Heil Martin Schulz Merkel’s Party Politics Politics of Germany Social Democratic Party of Germany Social Democrats SPY Volker Kauder Fri, 24 Nov 2017 10:21:06 +0000 Tyler Durden 607835 at http://www.zerohedge.com Europe's New 'Values' - Austerity, Bloodletting, And Incompetence http://www.zerohedge.com/news/2017-11-24/europes-new-values-austerity-bloodletting-and-incompetence <p><a href="https://www.theautomaticearth.com/2017/11/austerity-bloodletting-incompetence/"><em>Authored by Raul Ilargi Meijer via The Automatic Earth blog,</em></a></p> <p>Punxsutawney Phil Hammond, the UK chancellor, presented his Budget yesterday and <strong>declared five more years of austerity for Britain. As was to be expected. </strong>One doesn&rsquo;t even have to go into the details of the Budget to understand that it is a dead end street for both the country and for Theresa May&rsquo;s Tory party.</p> <p><em><strong>So why the persistent focus on austerity while it becomes clearer every day that it is suffocating the British economy? </strong></em>There are many answers to that. Sheer incompetence is a major one, a lack of empathy with the poorer another. Conservative Britain is a class society full of people who dream of empire, and deem their class a higher form of life than those who work low-paid jobs.</p> <p>When you see that the British Parliament has even voted that animals don&rsquo;t feel pain or emotions, you&rsquo;d be tempted to think it&rsquo;s a throwback all the way back to the Middle Ages, not just the British Empire. They&rsquo;re as lost in time as Bill Murray is in Groundhog Day. Only worse.</p> <p><strong>But perhaps incompetence is the big one here.</strong> The inability to understand that if your economy is not doing well, you need to stimulate it, not drain even more of what&rsquo;s left out of it. The people in government don&rsquo;t understand economics, and therefore rely on economic theory for guidance. And the prevailing theories of the day prescribe bloodletting as the cure, so they bloodlet (let blood?). Let it bleed.</p> <p><strong>This is not a British problem, it&rsquo;s pan-European if not global.</strong> Neither is the UK Tory party the only one being killed by it, all Conservative parties share that faith. They&rsquo;re just lucky that their left wing opponents have all committed hara kiri, and joined their ranks when it comes to economics. All of Europe&rsquo;s poorer have lost the voices that were supposed to speak for them, to economic incompetence.</p> <p>Obviously, the US democrats did their own hara kiri years ago. One might label -some of- Bernie Sanders&rsquo; views left-wing, but he&rsquo;s trapped in a system that won&rsquo;t let him breathe.</p> <p><strong>All of this leads me to question the following:</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>A letter in the Guardian published on Sunday called on Chancellor Philip Hammond, ahead of his budget presentation on Wednesday, to end austerity in the UK. It is signed by 113 people, a veritable who&rsquo;s who from the academic field, one -economics- professor after another. They include people like Joe Stiglitz, Steve Keen, Dave Graeber.</em></p> </blockquote> <p>Looking at the letter itself, and then the entire list, makes me wonder: <em><strong>I&rsquo;m sure you all mean well, guys, but I think perhaps you should first of all ask yourselves how it is possible that such a large group of well-educated ladies and gentlemen has become so utterly sidelined over time when it comes to major economic decisions, has allowed itself to be sidelined.</strong></em></p> <p>It&rsquo;s one thing to ask what someone else is doing wrong, it&rsquo;s another to ask yourself what you have done wrong. My question to y&rsquo;all would be: where were you? Shouldn&rsquo;t you have written and/or signed this letter 7 years ago, or 5, even just 3? Isn&rsquo;t calling on the Chancellor to &lsquo;end austerity now&rsquo; a bit late in the game?</p> <p>Is it even the right call, or should you maybe be calling for him to simply resign (along with the entire cabinet)? After all, what are the odds that the Tories are going to turn on a dime and reverse their entire economic policies? They would look stupid, and they will avoid that like the plague. Here&rsquo;s that letter:</p> <p style="margin-left: 20px;"><a href="https://www.theguardian.com/society/2017/nov/19/the-chancellor-must-end-austerity-now-it-is-punishing-an-entire-generation" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">The Chancellor Must End Austerity Now &ndash; It Is Punishing An Entire Generation</span></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>Seven years of austerity has destroyed lives. <strong>An estimated 30,000 excess deaths can be linked to cuts in NHS spending</strong> and the social care crisis in 2015 alone. The <strong>number of food parcels given to impoverished Britons has grown from tens of thousands in 2010 to over a million</strong>. Children are suffering from real-terms spending cuts in up to 88% of schools. The public sector pay cap has meant that millions of workers are struggling to make ends meet. Alongside the mounting human costs, austerity has hurt our economy. </em></p> <p>&nbsp;</p> <p><em>The UK has experienced its weakest recovery on record and suffers from poor levels of investment, leading to low productivity and falling wages. This government has missed every one of its own debt reduction targets because austerity simply doesn&rsquo;t work. The case for cuts has been grounded in ideology and untruths. We&rsquo;ve been told public debt is the outcome of overspending on public services rather than bailing out the banks. We&rsquo;ve been told that while the government can find money for the DUP, we cannot afford investment in public services and infrastructure. </em></p> <p>&nbsp;</p> <p><em>We&rsquo;ve been told that unless we &ldquo;tighten our belts&rdquo; we&rsquo;ll saddle future generations with debt &ndash; but it&rsquo;s the onslaught of cuts that is punishing an entire generation. Given the unprecedented economic uncertainty posed by Brexit negotiations and the private sector&rsquo;s failure to invest, <strong>we cannot risk exacerbating an already anaemic recovery</strong> with further public spending cuts. <strong>We&rsquo;ve reached a dangerous tipping point</strong>. Austerity has failed the British people and the British economy. <strong>We demand the chancellor ends austerity now.</strong></em></p> </blockquote> <p><strong>If you ask me, Britain reached that &lsquo;dangerous tipping point&rsquo; years ago. </strong>And talking about &lsquo;an anaemic recovery&rsquo; sounds like total nonsense. There is no recovery, as you yourselves make clear with the examples you provide of the consequences of austerity. So why say it?</p> <p>I don&rsquo;t know if we can blame individual economists for missing out on the effects of political measures, although when those measures affect economics, we probably should. But regardless, the big game in town these days is politics, not economics. Everywhere there are &lsquo;leaders&rsquo; fighting for survival, and it&rsquo;s telling that Donald Trump is not nearly the most besieged among them.</p> <p><strong>That Theresa May is still PM of the UK is as surprising as it is ridiculous</strong>. But it also points to the lack of coherence and timing among her opponents, including those 113 academics. That once May goes, which could be soon, the Tories get to pick yet another one of their own as PM, is even more ridiculous. To top off the absurdity, the next in line could be Boris Johnson.</p> <p>A country that finds itself in a quandary as immense as the UK faces post-Brexit vote, should not let one party that had a mere 42% of the vote, run all the plans, decisions and negotiations, be they domestic and/or international. There is no surer way for disaster to ensue. It&rsquo;s the system itself that fails if that possibility exists, more than that one party.</p> <p><strong>The UK needs, more than anything, a national government (or something in that vein), an option in which at least a majority of the population is represented. That is much more important than some call for some policy to be halted.</strong></p> <p>Moreover, everyone should see this in the light of international political developments as a whole. What&rsquo;s happening in Albion is not an isolated event, and it doesn&rsquo;t happen under the influence of isolated forces or developments. What happened overnight on Sunday with the failure of Angela Merkel&rsquo;s attempt to form a German coalition government makes that more obvious than ever.</p> <p>Traditional political parties, left and right, have been swept out of power all over Europe. Germany is just one more example. The process doesn&rsquo;t have the same shape, or the same speed, everywhere. But it&rsquo;s real. It&rsquo;s due to a mixture of rising inequality, deteriorating economic conditions and no left left to represent the people, the victims, at the bottom of societies. Well, and there&rsquo;s the incessant lies about economic recovery.</p> <p>But let&rsquo;s take a little detour first. Just in order to illustrate the point even more. The Guardian ran a piece, also on Sunday, on newly minted French President Emmanuel Macron and his government and party, that is pretty hilarious.</p> <p style="margin-left: 20px;"><a href="https://www.theguardian.com/world/2017/nov/19/new-head-of-macrons-party-vows-to-recapture-grassroots-soul" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;">New Head Of Macron&rsquo;s Party Vows To Recapture Its Grassroots &lsquo;Soul&rsquo;</span></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>A fiercely loyal, self-styled &ldquo;man of the people&rdquo; has been appointed to lead Emmanuel Macron&rsquo;s fledgling political movement, La République En Marche (The Republic on the Move, or La REM), promising to recapture the party&rsquo;s&ldquo;soul&rdquo; after a hiatus since the recent election win. Christophe Castaner, 51, a burly member of parliament with a southern accent, styles himself as both in touch with everyday voters and devoted to Macron&rsquo;s well-oiled communications machine. He was handpicked by the French president to take over the running of La REM.</em></p> <p>&nbsp;</p> <p><em>Castaner, currently a minister and government spokesman, was a Socialist mayor of a picturesque small town in Provence for more than a decade before becoming one of the first politicians to jump ship to Macron&rsquo;s centrist project in its early days. He grew up in a military family in the south of France, left school before his final exams &ndash; which he retook as an adult &ndash; and has a reputation for straight-talking. At La REM&rsquo;s first party congress in Lyon this weekend, Castaner was the lone candidate for the role of party director. </em></p> <p>&nbsp;</p> <p><em>He was picked by Macron at a presidential palace dinner, then confirmed by a group of party members with a show of hands rather than a secret ballot, sparking criticism from the media and political observers about undemocratic internal party practices. A small group of 100 party followers went public last week with an open resignation letter, claiming the party had no internal democracy. Others, including La REM members of parliament, responded that Castaner was &ldquo;the obvious choice&rdquo;.</em></p> </blockquote> <p>Macron founded his own movement because he saw an opening to defeat all traditional French parties. He won the presidential elections, and only after that organized the movement into an actual political party ahead of parliamentary elections. I&rsquo;d still like to see someone explain who paid for the campaigns of hundreds of candidate parliamentarians. It&rsquo;s a mystery. France&rsquo;s banking and business sector?</p> <p>Macron has set an example for many people in other countries, provided they can unravel that mystery, of how they, too, can defeat incumbents and other long time power blocks. There are two countries where such tactics have until now not seemed possible: the UK and US. But that, too, will change.</p> <p><strong>In many other European countries, age-old blocks have already been beaten into submission.</strong> Even if many deep state powers in France et al have merely shifted allegiances. As their peers elsewhere will. But that&rsquo;s just the way things are. It doesn&rsquo;t negate the huge shifts in politics. Voters all over feel they&rsquo;ve been had for too long. It&rsquo;s all part of a tectonic shift. Deteriorating economic conditions will do that for you.</p> <p>What makes the article on Macron et al so entertaining is the mention of the promise to <em>&ldquo;..recapture the party&rsquo;s grassroots &ldquo;soul&rdquo;</em>. A political party that&rsquo;s barely a year old does not have grassroots, let alone a soul. Anyone who thinks otherwise is not thinking. And that is a good thing to keep in mind, because Macron&rsquo;s example &ndash; and success- will inspire similar initiatives in many places, and similar nonsensical narratives.</p> <p><strong>Ironically, if that&rsquo;s the right word, the world -or at least the EU- is now Macron&rsquo;s oyster. Angela Merkel has shown her weaknesses, and she has blinked first, in her failed attempt to form a new cabinet, and she will not recover from that, not with anything remotely like her past clout. Maybe -more than- 12 years as head of state is not such a good idea.</strong></p> <p>While Macron is a blank sheet without a soul or grassroots, Merkel and her CDU party possess both in spades. It&rsquo;s just that in today&rsquo;s world these things tend to easily turn against you. You&rsquo;re better off without a past that you can be blamed for. Macron has no past. And no soul.</p> <p>Merkel leaves an enormous void both in Germany and in Europe (even globally). And it&rsquo;s one thing for her to have become too powerful at home, but it&rsquo;s quite another for the same to have been allowed on the entire continent. Germany, under any leadership, will remain the only power in Europe that matters, no matter what grand plans Macron devises. And that is the EU&rsquo;s fatal flaw. If you have 27-28 sovereign countries and you try to order them around all the time, you have a problem on your hands.</p> <p><strong>There is an inherent contradiction in being both the leader of political union&rsquo;s strongest country and -simultaneously- of the union as a whole, and Merkel has bitterly failed in addressing, let alone solving, that contradiction. Merkel didn&rsquo;t create it, true enough, but because she is/was the boss, it is her responsibility to address it. Even if it&rsquo;s ultimately unsolvable.</strong></p> <p>In the present setting, any German leader, Angela or someone else, will be voted in by Germans, and focus on their interests, to hold on to these votes. But German interests are not always the same as those of other countries. That means Germany will always come out on top, and more so as time passes. Ever more wealth will flow to Berlin. That&rsquo;s the fatal flaw, and at present there&rsquo;s no way out of it.</p> <p><strong>With Merkel weakened, or soon even gone, lots of voices will speak up across Europe for their countries&rsquo; sovereignty, and the attack on them from Brussels.</strong> We already have Poland, Czechia and Hungary. Expect a lot more noise from Italy in the run-up to its elections. The power balance that Merkel held together is gone for good.</p> <p>Yes, her refugee policy backfired, which is no surprise given that she decided on it like some empress. But what may be more important is that her traditional opponent, the left wing SPD, was not only her coalition partner, but it has no ideas that are notably different from her conservatives, and its new head is the former head of the European Parliament.</p> <p>Where does one turn as a German who doesn&rsquo;t want all that more EU all the time? Either far left or far right. Everything else has become a homogenous blob, all across Europe. And all of that blob is in favor of imposing ever more austerity on the most unlucky in their societies, because bloodletting is the most advanced treatment they know of.</p> <p><strong>It&rsquo;s not even so much the financial crisis that has caused a political crisis in Europe, it&rsquo;s the answers to it, the incompetence</strong>. Greece is a far worse-off victim of austerity than Britain is, and Yanis Varoufakis has described very well why that is: an absolute stonewalling refusal to talk about any alternatives to bloodletting. Because austerity is an ideology bordering on religion, executed by people who care much more about their own careers than they do about their people.</p> <p>Greece is beyond salvation, its economy has been so thoroughly destroyed it will take decades to recover, if it ever can. Britain is set to follow the Greek example. The blame for that will be put on Brexit, not disastrous economic &lsquo;policies&rsquo;. In the same way that the Greek crisis was blamed on the Greeks, not the German and French banks that treated the country like an overleveraged game of Texas Hold &rsquo;em.</p> <p><strong>After Merkel, Europe will fall victim to a vast power vacuum. </strong>In effect, today&rsquo;s already &lsquo;After Merkel&rsquo;, even if it will take people a while to understand that.<strong> The EU is unraveling, and the blame goes to austerity and its incompetent priests. </strong>Including Angela. The bloodletters destroy their own economies, and they don&rsquo;t understand that either.</p> <p>Merkel hasn&rsquo;t just demolished Greece, she has, in doing that, fatally undermined the foundations of the EU as well. And Germany. Look, &lsquo;Mutti&rsquo; Merkel invited a million refugees to her country, and now refuses to let hundreds of war-traumatized children stuck on Greek islands join their parents in Germany, because she fears it could cost her votes. Talk about priorities. Theresa May does the same as we speak.</p> <p><em><strong>There&rsquo;s a price to be paid for incompetence. It&rsquo;s a shame that Merkel and Theresa May and Punxsutawney Phil Hammond won&rsquo;t be the ones paying -the worst of- it.</strong></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="263" height="182" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171123aust.jpg?1511501662" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-24/europes-new-values-austerity-bloodletting-and-incompetence#comments Anti-austerity movement Austerity Bernie Sanders British parliament CDU party Conservatives Donald Trump Economy European Parliament European Union Fiscal policy France Germany Government of the United Kingdom Greece Groundhog Day Hungary Italy La République En Marche Macroeconomics NHS Philip Hammond Poland Politics Public finance Public policy recovery REM Theresa May’s Tory party UK Tory party United Kingdom government austerity programme Fri, 24 Nov 2017 10:00:00 +0000 Tyler Durden 607832 at http://www.zerohedge.com Irish Government On Verge Of Collapse, Could Impact Brexit http://www.zerohedge.com/news/2017-11-24/irish-government-verge-collapse-could-impact-brexit <p>The Irish government was on the verge of collapse as it faced a vote of no confidence in the deputy prime minister by a party whose votes are critical for Prime Minister Leo Varadkar to pass laws (the government is a minority administration).&nbsp; As Reuters reported <a href="https://uk.reuters.com/article/uk-ireland-politics/irish-government-on-verge-of-collapse-ahead-of-eu-brexit-summit-idUKKBN1DN25S">late on Thursday</a>, the opposition Fianna Fail party threatened it would put a motion of no confidence in Deputy Prime Minister Frances Fitzgerald on Tuesday - a move sparked by Fitzgerald’s handling of a legal case involving a police whistleblower - and which would breach the "confidence and supply" agreement that allowed Taoiseach Leo Varadkar’s Fine Gael party to form a minority government 18 months ago.</p> <p>And, as UBS notes, if the government were to lose such a vote, <strong>it would have implications within Europe over the Brexit process.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/23/ireland%20pm.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/23/ireland%20pm_0.jpg" width="500" height="287" /></a><br /><em>Ireland's Prime minister Leo Varadkar arrives for an EU Social Summit </em></p> <p>Fianna Fail indicated it might withdraw the motion if Fitzgerald resigned, but Foreign Minister Simon Coveney told state broadcaster RTE that Fitzgerald would not resign. Additionally, as <a href="https://www.bloomberg.com/news/articles/2017-11-23/irish-government-faces-home-crisis-as-brexit-decision-looms">Bloomberg reports</a>, Prime Minister Leo Varadkar won’t “abandon” deputy Frances Fitzgerald, Coveney also told RTE. Fitzgerald faces a “trumped up charge,” Varadkar told his party lawmakers late on Thursday. </p> <p>As <a href="https://www.politico.eu/article/ireland-government-on-brink-of-collapse-reports/">Politico adds</a>, Fine Gael MPs passed a unanimous motion of support in Fitzgerald at an emergency meeting convened Thursday evening. An unnamed “senior Fianna Fáil” source told Reuters the country was heading “straight toward” a new election after the motion was passed, and added the party would hold a meeting Friday on the matter. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>While Varadkar said he didn’t want an election, without support from Fianna Fail, the minority government could fall. Fine Gael is preparing for an election in January, the Irish Times reported, as the opposition readies to submit a no-confidence motion on Friday in Dublin. It will be debated on Tuesday. “We don’t have confidence in her ability, ” Fianna Fail spokesman Dara Calleary said in a RTE radio interview on Friday, suggesting Fitzgerald’s exit would defuse the issue as it prepares for more talks with the government. “There’s a long way to go until Tuesday.”</p> </blockquote> <p>The crisis comes at an awkward time for the UK's Brexit process, <strong>just weeks ahead of a European Union summit in which the Irish government has an effective veto on whether Britain’s talks on leaving the bloc progress as it determines if EU concerns about the future of the Irish border have been met. </strong>More from Bloomberg:<strong><br /></strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The affair comes at a delicate time for the government, as it moves toward a decision on the Brexit process. The Irish border is one of three key issues that have been identified, along with citizens’ rights and money owed by the U.K., that require “sufficient progress” toward a resolution before the EU will allow talks to move on to Britain’s future trade relationship with the bloc. </p> <p>&nbsp;</p> <p>“The timing is an issue when considering the crucial December meeting of the European Council, where Ireland will require a strong leader to deal with possible political pressure regarding the progress of Brexit talks,” said Ryan McGrath, head of fixed-income strategy at Cantor Fitzgerald LP. “Having Varadkar attend as a lame duck could potentially be very disadvantageous for Ireland.” </p> <p>&nbsp;</p> <p><strong>Varadkar has pledged to stand firm in the face of any pressure to move talks on without enough progress on the border question.</strong> </p> </blockquote> <p>It’s the biggest political crisis to hit Varadkar since he took over as premier from Enda Kenny in June, according to Bloomberg. <strong>Last year, Kenny’s coalition drew about 35 percent of votes, slumping from 55 percent five years earlier. That result left him at the mercy of his main rival, Fianna Fail, which agreed not to block him</strong>.</p> <p><strong>“If there is no confidence and supply agreement in place, I don’t see how we can have a government that can function,</strong>” said Coveney. “That is why the actions that Fianna Fail are taking today are so reckless at a time when the country does not need an election.”</p> <p>While the market reaction to the report has been contained, the Irish 10y yield has moved higher by 4bps to 0.62%, with fresh elections now seen as a potential risk according to traders.</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="613" height="352" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/ireland%20pm.jpg?1511515594" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-24/irish-government-verge-collapse-could-impact-brexit#comments Dáil Éireann Enda Kenny European Council European Union European Union Fail Fianna Fail Fianna Fail party Fine Gael Fine Gael Fine Gael party Frances Fitzgerald Ireland Irish government Leo Varadkar Members of the 28th Dáil Members of the 29th Dáil Members of the 30th Dáil Members of the 31st Dáil Members of the 32nd Dáil Politics Politics of Ireland Politics of the Republic of Ireland Reuters RTE Simon Coveney Taoisigh Fri, 24 Nov 2017 09:30:57 +0000 Tyler Durden 607834 at http://www.zerohedge.com French Asset Manager Launches World's First Bitcoin Mutual Fund http://www.zerohedge.com/news/2017-11-23/french-asset-manager-launches-worlds-first-bitcoin-mutual-fund <p>Since bitcoin first entered mainstream consciousness in 2013, regulators have been wary of authorizing the creation of bitcoin-linked financial products that would create a patina of legitimacy for a product that was all-too-recently associated with dark-web bazaars like the Silk Road. So far, the only bitcoin-linked financial product is the Nasdaq Stockholm-traded ETN that JP Morgan Securities famously purchased &ndash; purportedly for its clients&rsquo; accounts - after <a href="http://www.zerohedge.com/news/2017-09-16/if-jamie-dimon-hates-it-so-much-then-why-jpmorgan-buying-bitcoin-europe">Jamie Dimon</a> called the digital currency a &ldquo;fraud&rdquo; and said he would fire any JPM traders caught trading it.</p> <p>Back in March, the SEC rejected not one, but two proposed bitcoin ETFs. Recently, CME Group announced it would launch bitcoin-linked derivatives by the end of the year. Their prices will be set using a daily reference rate designed by the exchange that some critics have pointed out could strengthen the case for the SEC to approve a bitcoin-linked ETF in the US.</p> <p><strong>Well, one French asset manager just created a newfound sense of urgency for its rivals in the US by introducing the first bitcoin-linked mutual fund. </strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Announced today, Tobam&#39;s alternative investment fund perhaps represents the latest bid to attract institutional investors to cryptocurrencies (though, as in the case with similar financial instruments, investors wouldn&#39;t be holding bitcoin directly).</p> <p>&nbsp;</p> <p>&hellip;the mutual fund&#39;s launch follows approval from the Autorité des Marchés Financiers, one of the country&#39;s top financial regulators. Per the report, PwC will perform auditing services while Caceis, the asset servicing banking group of France-based Crédit Agricole, will hold custody of the bitcoins tied to the fund.</p> <p>&nbsp;</p> <p><strong>&quot;This first move in the world of cryptocurrencies showcases our dedication to remaining ahead of the curve and to provide our clients with innovative products in the context of efficient (i.e. unpredictable) markets,&quot;</strong> Yves Choueifaty, Tobam&#39;s president, said in a statement.</p> </blockquote> <p>Choueifaty said he expects the fund to swell to an AUM of $400 million over the next several years.</p> <p>Investors are already expressed interest, he said.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;We found some investors to launch the fund and we have had a lot of interest from an intellectual point of view,&quot;</strong> he told the publication.</p> </blockquote> <p>As <a href="https://www.coindesk.com/asset-manager-launches-europes-first-bitcoin-mutual-fund/">CoinDesk</a> pointed out, the idea that institutional investors want to gain access to bitcoin is unsurprising, given recent reports from the traditional hedge fund world. Whether products like Tobam&#39;s will further stoke interest remains to be seen.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.23bitcoin.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.23bitcoin_0.JPG" style="width: 500px; height: 200px;" /></a></p> <p>The announcement coincides with another all-time high for the digital currency, which has climbed more than 700% this year despite a crackdown in China, a hard fork, the collapse of several high-profile ICOs, declarations by Dimon and others that bitcoin is a bubble, a hoax or is outright dangerous (&ldquo;It&rsquo;s going to get somebody killed&rdquo;)&hellip;the list goes on.</p> <p>However, bitcoin has benefited in part from the fact that there&rsquo;s no easy way for retail traders to bet against it. That will soon change, now that a Swiss company has introduced futures contracts that will make it easier for retail investors to short bitcoin.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.23bitcoin.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.23bitcoin_0.png" style="width: 500px; height: 280px;" /></a></p> <p>Of course, that would mean the investors buying into this mutual fund would be getting in right at the market top&hellip;<br />&nbsp;</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="718" height="287" alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017.11.23bitcoin.JPG?1511443623" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-23/french-asset-manager-launches-worlds-first-bitcoin-mutual-fund#comments Alternative currencies Bitcoin Bitcoin Business China CoinDesk Cryptocurrencies Currency Digital currencies Economics of bitcoin Finance Financial cryptography Institutional Investors Jamie Dimon Legality of bitcoin by country or territory Money NASDAQ U.S. Securities and Exchange Commission Fri, 24 Nov 2017 09:15:00 +0000 Tyler Durden 607797 at http://www.zerohedge.com Gold Has Been on A Tear All Year http://www.zerohedge.com/news/2017-11-23/gold-has-been-tear-all-year <p><a href="https://www.sprottmoney.com/Blog/gold-has-been-on-a-tear-all-year-rory-hall.html"><br /></a></p> <h1><a href="https://www.sprottmoney.com/Blog/gold-has-been-on-a-tear-all-year-rory-hall.html"><span style="text-decoration: underline; color: #3366ff;"><em><strong>Gold Has Been On A Tear All Year</strong></em></span></a><a href="https://www.sprottmoney.com/Blog/gold-has-been-on-a-tear-all-year-rory-hall.html"></a></h1> <p><a href="https://www.sprottmoney.com/Blog/gold-has-been-on-a-tear-all-year-rory-hall.html"><span style="text-decoration: underline; color: #3366ff;"><em><strong>Posted with permission and written by Rory Hall, The Daily Coin</strong></em></span></a></p> <p>&nbsp;</p> <p>&nbsp;</p> <div class="post-thumbnail"> <img src="https://sprottmoney.com/media/magpleasure/mpblog/post_thumbnail_file/8/8/cache/1/ece9a24a761836a70934a998c163f8c8/8830a8b74da525b09853b64c01d29f55.jpg" alt="Gold Has Been on A Tear All Year - Rory Hall" class="thumbnail" /> </div> <p>&nbsp;</p> <p>&nbsp;</p> <p>The way gold has been moving the past few weeks, it’s easy to overlook the 11% growth it is enjoying during 2017. As we move towards year end, we see gold has been flat while suffering attack after attack from the banking cabal. The charts over the past ten trading day have these massive waterfalls that are intended to frighten traders. A few years ago this worked like a charm - today, not so much. </p> <p>&nbsp;</p> <p>While these waterfalls make the chart look horrific, if you look just past where the attack ends, <a href="http://thedailycoin.org/2017/11/10/4-billion-in-a-minute-is-that-the-best-you-can-do/" target="_blank" rel="noopener">you will see a reversal</a>. Not just a reversal, but over the past ten days, close to a 100% reversal. This shows just how the “strong hands” are not letting go and not being shaken at all from their stance. The word is out – gold is where it’s at and physical gold is really where it’s at. </p> <p>&nbsp;</p> <p>We have one more Federal Reserve meeting scheduled for the second week of December. We can only hope Fed Chairman Janet Yellen aka <a href="https://tfmetalsreport.com" target="_blank" rel="noopener">Mother Felon</a> does her thing and raises the Fed Rate by another 0.25% – 0.50%. If this happens we expect a similar reaction as has happened in January 2016 and January 2017. </p> <p>&nbsp;</p> <ul> <li> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>On December 15, 2015, gold bottomed out at $1,049 (on the London pm gold price fix) the day after the Federal Reserve raised rates for the first time in almost 10 years. Gold immediately took off and rose by almost $200 per ounce to $1,241 in less than two months (by February 11, 2016). </p></blockquote> </li> <li> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>On December 20, 2016, <a href="https://www.universalcoin.com/store/index.php?cn=UTHWBNO0916">gold</a> bottomed out at $1,125 on December 20, shortly after the Fed raised rates again. Gold then rose gradually to $1,257 in February and $1,346 by the next September. </p></blockquote> </li> </ul> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p></p></blockquote> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>It could happen again this year. Even if gold fell to the low $1,200s range, it could take off again in late December. That’s the theory of the Commodities Corner column in last week’s Barron’s. First, the article points out that gold rose 8.6% in 2016 and is on track to gain over 10% in 2017, <strong>so each year’s low gold price is higher than the previous year’s low</strong>. Then, Barron’s explained that speculative gold traders tend to ‘short’ <a href="https://www.universalcoin.com/store/index.php?cn=UTHWBNO0916">gold</a> in advance of the FOMC meeting and then cover those shorts when the Fed meets. <a href="https://finance.townhall.com/columnists/mikefuljenz/2017/11/16/gold-on-track-for-best-year-since-2011-n2410336" target="_blank" rel="noopener">Source</a> </p></blockquote> <p>&nbsp;</p> <p>We are hoping Mother Felon signals that 2018 is going to another great year for gold. Keep your eyes and ears open for the Fed Chair to, hopefully, announce an early Christmas present on December 12-13. The only question that remains is whether she will or she won’t do as she has done the past two years. </p> <p>&nbsp;</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p> Starting last Sept. 20, immediately after the Fed’s “pause” on rate hikes, the market began to price in a Fed rate hike for December. Asset classes adjusted in line with those expectations. </p></blockquote> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p> Treasuries, gold, euros and yen all fell. Bond yields and the dollar both rose. Tight money was on the way. </p></blockquote> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p> The problem is that the markets have now priced in a 100% chance of a Fed rate hike in December. You can’t get any more sure of yourself than that. This means that Treasuries, euros, gold and yen have all found a bottom. </p></blockquote> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p> They’re just waiting for confirmation from the Fed in a few weeks. As I said, markets are waiting for Godot. </p></blockquote> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p> This sets up one of my favorite trading situations. I call it the “asymmetric trade.” </p></blockquote> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p> When something is fully priced, the happening of the event does not move prices. But if the event does not happen, prices move violently to reprice for the unexpected outcome. </p></blockquote> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p> This means you have a “Heads I win, tails I don’t lose” situation. <a href="https://dailyreckoning.com/asymmetric-trade-gold/" target="_blank" rel="noopener">Source</a></p></blockquote> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p></p></blockquote> <p>I agree people that are holding physical gold, and not an illusion of gold like GLD, it’s a “<em>Heads I win, tails I don’t lose” </em>scenario. While gold is still under the control of the West, gold is nothing more than a hostage and does what it is told by its capture. Gold, in our opinion, is going higher: not just higher, but much higher from where it is currently. Will the next “gold master” allow it to roam free? We doubt it - we just hope gold has some breathing room and the leash is slightly longer than it is today. </p> <p>&nbsp;</p> <p>The global monetary system is beginning to change. Gold is going to be part of the change and a major player in the future global trade system. If one simply reviews gold through the lens that is the countries in Mackinder’s Heartland, you will see nations scooping up gold with both hands. These nations are members of the BRI, EAEU, SCO, AIIB and the endless list of economic and military alliances that are currently developing and solidifying their future economic growth. The picture is very clear – gold, probably on the blockchain or some form of new fintech, is going to be included in the future of global trade. The major players, Russia and China, are making this crystal clear. How we get to the new system is the question of our life time that could have a very ugly answer. </p> <p>&nbsp;</p> <p>We will continue holding physical gold and encouraging people to research reasons to hold physical gold. As we see it, our financial insurance policy increased by more than 8% in 2016 and another 11% in 2017 and is poised to continue to post gains over the next few years. Either way, gains or losses, insurance is insurance and only works if you hold it. We choose to hold it. </p> <p>&nbsp;</p> <p><em style="box-sizing: border-box; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit;"><span style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: 20.3333px; line-height: 17.3333px; font-family: &quot;Lucida Grande&quot;, Verdana, sans-serif;">Questions or comments about this article? Leave your thoughts <a href="https://www.sprottmoney.com/Blog/gold-has-been-on-a-tear-all-year-rory-hall.html"><span style="text-decoration: underline;"><strong>HERE</strong></span></a>.</span></em></p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <h1><a href="https://www.sprottmoney.com/Blog/gold-has-been-on-a-tear-all-year-rory-hall.html"><span style="text-decoration: underline; color: #3366ff;"><em><strong>Gold Has Been On A Tear All Year</strong></em></span></a><a href="https://www.sprottmoney.com/Blog/gold-has-been-on-a-tear-all-year-rory-hall.html"></a></h1> <p><a href="https://www.sprottmoney.com/Blog/gold-has-been-on-a-tear-all-year-rory-hall.html"><span style="text-decoration: underline; color: #3366ff;"><em><strong>Posted with permission and written by Rory Hall, The Daily Coin</strong></em></span></a></p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><span style="color: #000000;">Check out these other articles by our contributors:</span></p> <p><span style="color: #000000;"><br /></span></p> <p><span style="color: #000000;">Steve Rocco - <a href="https://www.sprottmoney.com/Blog/global-silver-investment-demand-maybe-down-but-still-double-pre-2008-market-crash-level-steve-rocco.html">Global Silver Investment Demand Maybe Down, But Still Double Pre-2008 Market Crash Level<br /></a></span></p> <p><span style="color: #000000;">Dave Kranzler - <a href="https://www.sprottmoney.com/Blog/the-debt-bubble-is-beginning-to-leak-air-dave-kranzler.html">The Debt Bubble Is Beginning To Leak Air</a><br /></span></p> <p><span style="color: #000000;">Craig Hemke - <a href="https://www.sprottmoney.com/Blog/does-the-cot-structure-prohibit-a-rally-craig-hemke.html">Does The CoT Structure Prohibit A Rally?</a><br /></span></p> <p><span style="color: #000000;"><a href="https://www.sprottmoney.com/Blog/ask-the-expert-danielle-dimartino-booth-november-2017.html">Sprott Money's Ask The Expert - Danielle DiMartino Booth</a></span></p> http://www.zerohedge.com/news/2017-11-23/gold-has-been-tear-all-year#comments AIIB Bond BRI Business China Federal funds rate Federal Reserve Finance Gold Janet Yellen Market Crash Matter Money Precious metals US Federal Reserve Yen Fri, 24 Nov 2017 09:14:29 +0000 Sprott Money 607828 at http://www.zerohedge.com Another One: Japan's "Fake Data" Scandal Hits Mitsubishi Materials http://www.zerohedge.com/news/2017-11-24/another-one-japans-fake-data-scandal-hits-mitsubishi-materials <p>So Kobe Steel was not an isolated incident and faking data on manufacturing quality in Japan is quite common, as other lower profile scandals at Nissan Motor and Takata proved. Today another culprit has come to light: Mitsubishi Materials &ndash; which may need to re-consider its corporate philosophy &ldquo;For People, Society and the Earth&rdquo; and Articles 2 and 3 of its code of conduct &ldquo;Safety First&rdquo; and &ldquo;Compliance&rdquo;.</p> <p>The company has admitted to falsifying data on rubber seals, brass strips and aluminum products sold to more than 250 customers in the aerospace and auto sectors. Having hit a two year high earlier this month, Mitsubishi Materials&rsquo; share price plunged during the Tokyo trading session, closing 8.1% lower on the day at 3,760 Yen, having traded as low as 3,635 Yen.</p> <p>More from <a href="https://www.bloomberg.com/news/articles/2017-11-23/mitsubishi-materials-says-two-of-its-units-falsified-parts-data-jaccl2us">Bloomberg</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Japan&rsquo;s reputation for manufacturing prowess took another hit as Mitsubishi Materials Corp. admitted it faked data on some products just weeks after a similar scandal engulfed Kobe Steel Ltd. Buyers of Japanese industrial goods from Boeing Co. to Airbus SE were once again scrambling to confirm whether safety had been compromised after Mitsubishi Materials said three of its units had faked data on products that may have been delivered to more than 250 customers. Its shares plunged as much as 11 percent in Tokyo, the most in eighteen months.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Mitsubishi Cable Industries Ltd. falsified data on rubber seals, while Mitsubishi Shindoh Co. misreported the strength of brass strips for auto parts, according to a statement Thursday. The products may have been shipped to 229 Mitsubishi Cable clients and 29 customers of Mitsubishi Shindoh. A third unit, Mitsubishi Aluminum Co. Ltd., also supplied non-conforming products, although it has already confirmed with customers that they are safe, the company said, adding that its investigation hasn&rsquo;t uncovered any cases that raise the possibility of legal violations or safety issues.</p> </blockquote> <p>The number of scandals of this type is a growing embarrassment to Japan&rsquo;s famed manufacturing excellence and quality control.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>The revelation is the latest in a series of scandals to dent the image of Japanese manufacturers and closely resembles recent admissions by Kobe Steel that it falsified data on the strength and durability of its products. </strong>In the auto sector, Nissan Motor Co. has said it conducted vehicle inspections that didn&rsquo;t comply with regulations for almost four decades, while Subaru Corp. allowed uncertified workers to inspect vehicles before shipment. Takata Corp. filed for bankruptcy earlier this year because of faulty airbags.</p> </blockquote> <p>A disconcerting feature of the breaking scandal at Mitsubishi is that like recent &quot;incidents&quot; at Equifax and Uber, the company was aware of the fake data problem at its Mitsubishi Cable subsidiary in February 2017, but failed to halt shipments until last month.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Japanese Trade Minister Hiroshige Seko called the matter &ldquo;extremely regrettable&rdquo; at a briefing Friday, and said the ministry has asked related departments to investigate its causes and is seeking an explanation from Mitsubishi Cable on why it took so long to report its problem. He added that he considers it a matter for the companies and not an industry-wide issue.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>According to the statement, Mitsubishi Cable uncovered the misconduct in February and stopped shipping non-conforming products on Oct. 23; the company told its parent two days later. Mitsubishi Shindoh found out about its problem in October and stopped shipments on Oct. 18, alerting Mitsubishi Materials the following day.</p> </blockquote> <p>As the <a href="https://www.ft.com/content/a023d962-d03c-11e7-b781-794ce08b24dc">Financial Times</a> reports, the falsification of data stretches back to 2015 at Mitsubishi Cable and Mitsubishi Shindoh has a joint venture with Kobe Steel.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Mitsubishi Materials said in a statement that its Mitsubishi Cable Industries unit had falsified data since April 2015 on the quality level of rubber O-rings, which are used to prevent leaks in aircraft, cars and other industrial equipment. Another subsidiary, Mitsubishi Shindoh, was found to have delivered metal products with quality levels below that claimed by the company or requested by customers.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Mitsubishi Materials has a 45 per cent stake in a copper tube venture with Kobe Steel, stemming from a partnership formed in 1999 alongside affiliate Mitsubishi Shindoh. That joint venture includes the Hatano plant south-west of Tokyo that has become the focal point of Kobe Steel&rsquo;s data falsification scandal, and been subsequently stripped of numerous Japanese and international quality certifications.</p> </blockquote> <p><a href="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/22/Mits1_0.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/22/Mits1_0.png" style="width: 600px; height: 544px;" /></a></p> <p>Mitsubishi Cable employs around 500 workers and Mitsubishi Shindoh over 1,000 out of a group workforce of some 25,000. In the year to March 2,017, group sales were $11.6 billion and net profit $252 million. &ldquo;Even if Mitsubishi Shindoh and Mitsubishi Cable don&rsquo;t make up a big portion of the company&rsquo;s earnings, not just the short-term impact, but the mid and long-term impact on its orders is a cause of concern,&rdquo; Keiju Kurosaka, senior analyst at Mitsubishi UFJ Morgan Stanley Securities, told Bloomberg.</p> <p>Naturally, when these &quot;fake something&quot; scandals relate to high precision engineering parts, attention immediately turns to the manufacturers of commercial aircraft. Airbus published a statement saying that it doesn&rsquo;t directly procure parts from Mitsubishi Materials and is investigating its supply chain. Boeing said that it&rsquo;s reviewing the matter. Whether it&rsquo;s a precedent for Mitsubishi Materials, time will tell, but Bloomberg notes that none of Kobe Steel&rsquo;s customers have reported a safety problem so far.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Kobe Steel&rsquo;s crisis erupted in early October, collapsing its shares. Although 525 customers were affected, none has yet to report safety issues and no products have been recalled, allowing its stock to recover some of its losses. As of last week, shipments to 484 clients had been given the all-clear.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Kobe blamed lax controls and too much focus on profit for its short-comings, including unrealistically high standards that exceeded clients&rsquo; expectations, which encouraged staff to disregard quality guidelines for a decade or more. The company was forced to abandon its profit forecasts and has lost quality assurance certification -- often demanded by customers as a condition of sale -- at seven of its 20 plants.</p> </blockquote> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/23/kobe%20recovery.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/23/kobe%20recovery_1.jpg" style="width: 600px; height: 338px;" /></a></p> <p>Mitsubishi Materials has to explain itself to the Japanese government by tonight. Transport Minister, Keiichi Ishii, stated that Mitsubishi Materials will report to his Ministry later on Friday with details on products and customers affected. He said that he will instruct the company to put the highest priority on safety&hellip;too late. We are nervously awaiting the next &ldquo;revelation&rdquo; on Japanese manufacturing.</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="280" height="180" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/mitsubishi%20materials.jpg?1511514200" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-24/another-one-japans-fake-data-scandal-hits-mitsubishi-materials#comments Boeing Business Business Copper Economy Economy of Japan Japan Japanese government Kobe Steel Mitsubishi Mitsubishi Aluminum Co. Ltd. Mitsubishi companies Morgan Stanley None Subaru Technology Yen Fri, 24 Nov 2017 09:04:59 +0000 Tyler Durden 607833 at http://www.zerohedge.com Alwaleed Bin Talal Reportedly Hung Upside Down And Beaten By US Mercenaries http://www.zerohedge.com/news/2017-11-23/alwaleed-bin-talal-hung-upside-down-and-beaten-us-mercenaries <p>Crown Prince Mohammed bin Salman must be worried that some of the royals rounded up during his <strike>&ldquo;corruption crackdown&rdquo;</strike> cash grab are holding out on him. <strong>Because the Saudi prince has reportedly hired a crew of American mercenaries who haven&rsquo;t hesitated to employ an array of &ldquo;enhanced interrogation&rdquo; techniques.</strong></p> <p>As the <a href="http://www.dailymail.co.uk/news/article-5108651/American-mercenaries-torturing-Saudi-princes.html">Daily Mail</a> reports, mercenaries purportedly employed by Academi, a successor to infamous US security contractor Blackwater, have been stringing up some of MBS&rsquo;s &ldquo;guests&rdquo; at the Riyadh Ritz Carlton by their feet and savagely beating them during interrogations. The claims have spread rapidly on Arabic-language social media, and even Lebanon&rsquo;s president Michel Aoun has accused MbS of using mercenaries. <strong>Still, the Daily Mail isn&#39;t the most reputable news organization, so these reports should be taken with a grain of salt. </strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><u><strong>&#39;They are beating them, torturing them, slapping them, insulting them. They want to break them down,&#39; </strong></u>the source told DailyMail.com.<strong> </strong></p> <p>&nbsp;</p> <p>&#39;Blackwater&#39; has been named by DailyMail.com&#39;s source as the firm involved, and the claim of its presence in Saudi Arabia has also been made on Arabic social media, and by Lebanon&#39;s president.</p> <p>&nbsp;</p> <p>The firm&#39;s successor, Academi, strongly denies even being in Saudi Arabia and says it does not engage in torture, which it is illegal for any U.S. citizen to commit anywhere in the world.</p> </blockquote> <p>The Saudi crown prince, according to the source, <strong>has also confiscated more than $194 billion from the bank accounts and seized assets of those arrested, and could eventually end up with $800 billion in cash and assets to replenish Saudi&rsquo;s rapidly diminishing reserves. Given the febrile atmosphere in the kingdom, and the tacit support for the crackdown among Saudi citizens, who have seen their jobs and generous government subsidies cut, MbS has been able to circumvent the country&rsquo;s legal system. </strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.23bintalal.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.23bintalal_0.JPG" style="width: 500px; height: 194px;" /></a></p> <p><em>Alwaleed bin Talal</em></p> <p>He&rsquo;s using mercenaries because, according to the Mail, Saudi soldiers might balk at torturing powerful men like Prince Alwaleed bin Talal, whom they&rsquo;ve been saluting their entire lives. According to the Mail, <strong>Talal, who is (or was, until recently) one of the richest men in the world, has also been hung upside down and beaten. </strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&#39;All the guards in charge are private security because MBS (Mohammed Bin Salman) doesn&#39;t want Saudi officers there who have been saluting those detainees all their lives,&#39; said the source, who asked to remain anonymous. </strong></p> <p>&nbsp;</p> <p>&#39;Outside the hotels where they are being detained you see the armored vehicles of the Saudi special forces. But inside, it&#39;s a private security company.</p> <p>&nbsp;</p> <p>&#39;They&#39;ve transferred all the guys from Abu Dhabi. Now they are in charge of everything,&#39; said the source.</p> <p>&nbsp;</p> <p>The source said that Salman, often referred to by his initials MBS, is conducting some of the interrogations himself.</p> <p>&nbsp;</p> <p>&#39;When it&#39;s something big he asks them questions,&#39; the source said.</p> <p>&nbsp;</p> <p><strong>&#39;He speaks to them very nicely in the interrogation, and then he leaves the room, and the mercenaries go in. The prisoners are slapped, insulted, hung up, tortured.&#39;</strong></p> <p>&nbsp;</p> <p><strong>The source says the crown prince is desperate to assert his authority through fear and wants to uncover an alleged network of foreign officials who have taken bribes from Saudi princes. </strong></p> </blockquote> <p>The Daily Mail&rsquo;s account of the treatment of the Saudi royals arrested in the crackdown is much more harrowing than anything the mainstream media has published. The Mail published photos of what appear to be some of the detainees sleeping on thin mattresses in the ballroom of the Ritz-Carlton.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Among those arrested on allegations of corruption is Prince Alwaleed Bin Talal, the Saudi King&#39;s nephew who is worth more than $17bn according to Forbes, and owns stakes in Twitter, Lyft and Citigroup.</p> <p>&nbsp;</p> <p>DailyMail.com&#39;s source claims the crown prince lulled Alwaleed into a false sense of security, inviting him to a meeting at his Al Yamamah palace, then sent officers to arrest him the night before the meeting.</p> <p>&nbsp;</p> <p>&#39;Suddenly at 2.45am all his guards were disarmed, the royal guards of MBS storm in,&#39; said the source.</p> <p>&nbsp;</p> <p><strong>&#39;He&#39;s dragged from his own bedroom in his pajamas, handcuffed, put in the back of an SUV, and interrogated like a criminal. </strong></p> <p>&nbsp;</p> <p><u><strong>&#39;They hung them upside down, just to send a message.</strong></u></p> <p>&nbsp;</p> <p>&#39;They told them that &quot;we&#39;ve made your charges public, the world knows that you&#39;ve been arrested on these charges.&#39;&quot;</p> </blockquote> <p>Of course, it&rsquo;s unlikely MbS, or the American mercenaries, will ever be prosecuted for their actions, either in Saudi Arabia or the US. It&rsquo;s rumored that MbS&rsquo;s aging father, King Salman, might soon abdicate, granting his son untrammeled power to run KSA as he sees fit.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.23rug.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.23rug_0.JPG" style="width: 500px; height: 234px;" /></a></p> <p>In 2008 the Boston-born son of former Liberian President Charles Taylor was found guilty by a US court of horrific torture. The jury in Miami found Charles &#39;Chuckie&#39; Taylor Jr. guilty on all eight counts brought against him, including allegations he and his cohorts tortured victims in Liberia by applying electric shocks to their genitals, burning them with hot irons and melting plastic and rubbing salt in their open wounds.<br />&nbsp;</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="805" height="312" alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017.11.23bintalal.JPG?1511446898" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-23/alwaleed-bin-talal-hung-upside-down-and-beaten-us-mercenaries#comments Abu Dhabi Al-Waleed bin Talal Chivalry Citigroup Corruption Custodian of the Two Holy Mosques House of Saud Kings of Saudi Arabia MBS Middle East Mohammad bin Salman Monarchy Salman of Saudi Arabia Saudi Arabia Saudi Arabia Twitter Twitter U.S. court Fri, 24 Nov 2017 08:31:51 +0000 Tyler Durden 607800 at http://www.zerohedge.com How Turkey, Iran, Russia, And India Are Playing The New Silk Roads http://www.zerohedge.com/news/2017-11-24/how-turkey-iran-russia-and-india-are-playing-new-silk-roads <p><a href="http://www.atimes.com/article/turkey-iran-russia-india-playing-new-silk-roads/"><em>Authored by Pepe Escobar via The Asia Times,</em></a></p> <p><strong><em>A pacified Syria is key to the economic integration of Eurasia through energy and transportation connections...</em></strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171123_turk.jpg"><img height="316" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171123_turk.jpg" width="600" /></a></p> <p><strong>Vladimir Putin, Recep Tayyip Erdogan and Hassan Rouhani will hold a summit this Wednesday in Sochi to discuss Syria. </strong>Russia, Turkey and Iran are the three power players at the Astana negotiations &ndash; where multiple cease-fires, as hard to implement as they are, at least evolve, slowly but surely, towards the ultimate target &ndash; a political settlement.</p> <p>A stable Syria is crucial to all parties involved in Eurasia integration. As Asia Times <a href="http://www.atimes.com/article/new-silk-road-will-go-syria/">reported</a>, China has made it clear that a pacified Syria will eventually become a hub of the New Silk Roads, known as the Belt and Road Initiative (BRI) &ndash; building on the previous business bonanza of legions of small traders commuting between Yiwu and the Levant.</p> <p><strong>Away from intractable war and peace issues, it&rsquo;s even more enlightening to observe how Turkey, Iran and Russia are playing their overlapping versions of Eurasia economic integration and/or BRI-related business.</strong></p> <p>Much has to do with the energy/transportation connectivity between railway networks &ndash; and, further on the down the road, high-speed rail &ndash; and what I have described, since the early 2000s, as <a href="http://www.tomdispatch.com/post/175050/pepe_escobar_welcome_to_pipelineistan">Pipelineistan</a>.</p> <p><img alt="map2" class="lazy alignnone size-textwidth wp-image-172598" src="http://static.atimes.com/uploads/2017/11/map2-580x366.gif" style="width: 601px; height: 379px;" /></p> <p><strong>The Baku-Tblisi-Ceyhan (BTC) pipeline, a deal brokered in person in Baku by the late Dr Zbigniew &ldquo;Grand Chessboard&rdquo; Brzezinski, was a major energy/geopolitical coup by the Clinton administration, laying out an umbilical steel cord between Azerbaijan, Georgia and Turkey.</strong></p> <p>Now comes the Baku-Tblisi-Kars (BTK) railway &ndash; inaugurated with great fanfare by Erdogan alongside Azerbaijani President Ilham Aliyev and Georgian Prime Minister Giorgi Kvirikashvili, but also crucially Kazakh Prime Minister Bakhytzhan Sagintayev and Uzbek Prime Minister Abdulla Aripov. After all, this is about the integration of the Caucasus with Central Asia.</p> <p>Erdogan actually went <a href="https://www.dailysabah.com/economy/2017/10/30/baku-tbilisi-kars-railway-to-stimulate-economic-growth-boost-human-development">further</a>: BTK is &ldquo;an important chain in the New Silk Road, which aims to connect Asia, Africa, and Europe.&rdquo; The new transportation corridor is configured as an important Eurasian hub linking not only the Caucasus with Central Asia but also, in the Big Picture, the EU with Western China.</p> <p><strong>BTK is just the beginning, considering the long-term strategy of Chinese-built high-speed rail from Xinjiang across Central Asia all the way to Iran, Turkey, and of course, the dream destination: the EU. Erdogan can clearly see how Turkey is strategically positioned to profit from it.</strong></p> <p><img alt="map1" class="lazy alignnone size-textwidth wp-image-172597" src="http://static.atimes.com/uploads/2017/11/map1-580x255.jpg" style="width: 600px; height: 264px;" /></p> <p><strong>Of course, BTK is not a panacea.</strong> Other connectivity points between Iran and Turkey will spring up, and other key BRI interconnectors will pick up speed in the next few years, such as the Eurasian Land Bridge across the revamped Trans-Siberian and an icy version of the Maritime Silk Road: the Northern Sea Route across the Arctic.</p> <p>What&rsquo;s particularly interesting in the BTK case is the Pipelineistan interconnection with the <a href="http://www.tanap.com/tanap-project/why-tanap/">Trans-Anatolian Gas Pipeline</a> (TANAP), bringing natural gas from the massive Azeri gas field Shah Deniz-2 to Turkey and eventually the EU.</p> <p>Turkish analyst Cemil Ertem stresses, &ldquo;just like TANAP, the BTK Railway not only connects three countries, but also is one of the main trade and transport routes in Asia and Europe, and particularly Kazakhstan and Turkmenistan ports. It connects Central Asia to Turkey with the Marmaray project in Istanbul and via the Caspian region. Along with the Southern Gas Corridor, which constitutes TANAP&rsquo;s backbone, it will also connect ports on the South China Sea to Europe via Turkey.&rdquo;</p> <p><strong>It&rsquo;s no wonder BTK has been met with ecstatic reception across Turkey &ndash; or, should we say, what used to be known as Asia Minor.</strong> It does spell out, graphically, Ankara&rsquo;s pivoting to the East (as in increasing trade with China) as well as a new step in the extremely complex strategic interdependence between Ankara and Moscow; the Central Asian &ldquo;stans&rdquo;, after all, fall into Russia&rsquo;s historical sphere of influence.</p> <p><strong>Add to it the (pending) Russian sale of the S-400 missile defense system to Ankara, and the Russian and Chinese interest in having Turkey as a full member of the Shanghai Cooperation Organization (SCO).</strong></p> <h3><u>From IPI to IP and then II</u></h3> <p><strong><em>Now compare the BTK coup with one of Pipelineistan&rsquo;s trademark cliff-hanging soap operas; the IPI (Iran-Pakistan-India), previously dubbed &ldquo;the <a href="https://www.outlookindia.com/website/story/pipelineistans-new-silk-road/267453">peace pipeline</a>&rdquo;.</em></strong></p> <p>IPI originally was supposed to link southeastern Iran with northern India across Balochistan, via the Pakistani port of Gwadar (now a key hub of the China-Pakistan Economic Corridor, CPEC). The Bush and Obama administrations did everything to prevent IPI from ever being built, betting instead on the rival TAPI (Turkmenistan-Afghanistan-Pakistan-India) &ndash; which would actually traverse a war zone east of Herat, Afghanistan.</p> <p>TAPI might eventually be built &ndash; even with the Taliban being denied their cut (that was exactly the contention 20 years ago with the first Clinton administration: transit rights). Lately, Russia stepped up its game, with Gazprom seducing India into becoming a partner in TAPI&rsquo;s construction.</p> <p>But then came the recent announcement by Russian Energy Minister Aleksandr Novak: Moscow and Tehran will sign a memorandum of understanding to build a 1,200km gas pipeline from Iran to India; call it II. And Gazprom, in parallel, will invest in unexplored Iranian gas fields along the route.</p> <p><strong>Apart from the fact of a major win for Gazprom &ndash; expanding its reach towards South Asia &ndash; the clincher is the project won&rsquo;t be the original IPI (actually IP), where Iran already built the stretch up to the border and offered help for Islamabad to build its own stretch; a move that would be plagued by US sanctions. The Gazprom project will be an underwater pipeline from the Persian Gulf to the Indian Ocean.</strong></p> <p>From New Delhi&rsquo;s point of view, this is the ultimate win-win. TAPI remains a nightmarish proposition, and India needs all the gas it can get, fast. Assuming the new Trump administration &ldquo;Indo-Pacific&rdquo; rhetoric holds, New Delhi is confident it won&rsquo;t be slapped with sanctions because it&rsquo;s doing business with both Iran and Russia.</p> <p>And then there was another key development coming out of Putin&rsquo;s recent visit to Tehran: the idea &ndash; straight out of BRI &ndash; of building a rail link between St. Petersburg (on the Baltic) and Chabahar port close to the Persian Gulf. Chabahar happens to be the key hub of India&rsquo;s answer to BRI: a <a href="https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/wadeshepard/2017/06/28/watch-out-china-india-is-building-a-new-silk-road-of-its-own/&amp;refURL=https://www.google.com/&amp;referrer=https://www.google.com/">maritime trade link</a> to Afghanistan and Central Asia bypassing Pakistan, and connected to the North-South Transport Corridor (INSTC), of which Iran, India and Russia are key members alongside Caucasus and Central Asian nations.</p> <p><strong>You don&rsquo;t need a weatherman to see which way the wind blows across Eurasia; integration, all the way.</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="595" height="313" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171123_turk.jpg?1511501091" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-24/how-turkey-iran-russia-and-india-are-playing-new-silk-roads#comments Afghanistan Caspian Sea Caucasus Central Asia Central Asia Chabahar Port China China–Pakistan Economic Corridor Clinton administration Economy Economy of Asia European Union first Clinton administration India Indian Ocean Iran Iran–Pakistan gas pipeline Kazakhstan Levant Natural Gas northern India Persian Gulf Politics Shah Deniz gas field Shanghai Cooperation Organization South Asia South China southeastern Iran Taliban Trade routes Trans-Anatolian gas pipeline Transport Trump Administration Turkey Turkmenistan Vladimir Putin western China Fri, 24 Nov 2017 08:30:00 +0000 Tyler Durden 607831 at http://www.zerohedge.com 2nd Largest Gunmaker Nears Default As Americans Buy Fewer Firearms Post-Obama http://www.zerohedge.com/news/2017-11-23/2nd-largest-gunmaker-nears-default-americans-buy-fewer-firearms-post-obama <p><strong>2017 has seen the biggest drop in American firearms sales in history.</strong></p> <p>After 8 years of almost incessant rises in<a href="https://www.fbi.gov/services/cjis/nics"> NICS Firearms Checks</a> (a proxy for &#39;legal&#39; arms sales) under President Obama...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171121_rem1_1.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171121_rem1_1_0.png" style="width: 600px; height: 396px;" /></a></p> <p><a href="https://www.fbi.gov/services/cjis/nics"><em>source: NICS</em></a></p> <p>2017 has seen a considerable drop (year-to-date) - the biggest on NICS records...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171121_rem2_1.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171121_rem2_1_0.png" style="width: 600px; height: 393px;" /></a></p> <p><a href="https://www.fbi.gov/services/cjis/nics"><em>source: NICS</em></a></p> <p>This sudden drop in demand after President Trump&#39;s election has meant Remington Outdoor, the second-largest U.S. gunmaker, has <strong>suffered a &ldquo;rapid&rdquo; and &ldquo;sharp&rdquo; deterioration in sales and a similar drop in profits since January</strong>, and faces &ldquo;continued softness in consumer demand for firearms,&rdquo; according to credit analysts at Standard &amp; Poor&rsquo;s Global Ratings.</p> <p><a href="http://www.philly.com/philly/blogs/inq-phillydeals/gunmaker-remington-faces-default-as-americans-buy-fewer-firearms-20171117.html?mobi=true"><em>As Philly.com&#39;s Joseph DiStefano reports</em></a>,<strong> S&amp;P cut the company&rsquo;s corporate credit rating - already at a junk-bond-level CCC+ - two full notches, to CCC- </strong>as:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>...a <strong>backlog of unsold, unwanted firearms will force Remington to operate at a loss and &ldquo;pressure the company&rsquo;s sales and profitability at least through early 2018, resulting in insufficient cash flow for debt service and fixed charges,&rdquo;</strong> unless Remington gives up cash to pay for ongoing operations.</p> <p>&nbsp;</p> <p><strong>S&amp;P expects &ldquo;a heightened risk of a restructuring&rdquo;</strong> of Remington&rsquo;s $575 million senior secured loan and asset-based lending facility, which it is supposed to pay back in 2019.</p> <p>&nbsp;</p> <p>If Remington defaults on its payments, based on the company&rsquo;s current value, S&amp;P expects first-lien creditors may receive around 35 cents back from every dollar they have lent or invested.<strong> Lower-rated creditors would get back less, or nothing.</strong></p> </blockquote> <p>While the report said that <strong>default is not yet &quot;a virtual certainty,&quot; </strong>judging by the collapse in Remington&#39;s bond prices this week... the market is pretty sure.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171119_rem.jpg"><img height="314" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171119_rem_0.jpg" width="600" /></a></p> <p>And while Remington is not public, it is not alone in pain as shown below...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171123_nics.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/21/20171123_nics_0.jpg" style="width: 600px; height: 360px;" /></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="978" height="550" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171123_rem11.jpg?1511458384" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-23/2nd-largest-gunmaker-nears-default-americans-buy-fewer-firearms-post-obama#comments Bond Bond Business Creditor Creditors default Economy Finance fixed High-yield debt Money President Obama ratings Remington Remington War Fri, 24 Nov 2017 08:30:00 +0000 Tyler Durden 607819 at http://www.zerohedge.com Merkel Tanks In German Polls As Critical Discussions Take Place With SPD http://www.zerohedge.com/news/2017-11-23/merkel-tanks-german-polls-critical-discussions-take-place-spd <p><strong>Angela&rsquo;s Merkel&rsquo;s ability to restore her power in Germany should be decided in the next few days, as talks take place with Martin Schultz&rsquo;s SPD.</strong></p> <p>In the meantime, Merkel&rsquo;s ratings have unexpectedly &ldquo;tanked&rdquo; in the latest German polls. <strong>More than half of Germans believe she should not run for office</strong> in a poll conducted for t-online.com, as the <a href="https://www.express.co.uk/news/world/882250/angela-merkel-news-coalition-jamaika-jamaica-election-chancellor">Daily Express</a> reports.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Angela Merkel&rsquo;s worries continue as the latest polls reveal the majority of Germans did not want her to run as a candidate for Chancellor again. The survey, carried out in the coalition talks breakdown, makes worrying reading for Angela Merkel. While Mrs Merkel said yesterday she wanted to stand again in any new snap election the German people appear to be turned off by the prospect.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Of those polled, 54 per cent said she should not run for office, according to the polling institute Civey for t-online.de. Only 38.5 percent of Germans would welcome a renewed candidacy of the chancellor. A breakdown of those views saw Mrs Merkel pick up 76.2 per cent support amongst the supporters of the Christian Democratic Union (CDU) and the Christian Social Union (CSU) which stood at 76.2 per cent.</p> <p>&nbsp;</p> <p>Amongst supporters of the Greens, Mrs Merkel also seemed to gain a sizeable backing with 52.2 per cent wanting the current leader to stand again. Among the FDP supporters that was only about 30 per cent. Perhaps unsurprisingly supporters of the right-wing Alternative for Germany (AfD) do not want her to stand again with 88.5 per cent calling on her to step back.</p> </blockquote> <p>There was little comfort for the German leader in another poll published yesterday in Der Spiegel.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The latest SPON poll indicated that support for the coalition between Mrs Merkel&rsquo;s CDU and the CSU fell below 30 per cent to 29.2 per cent. This is believed to be their lowest ever level. The polling institute Civey, based in Berlin, indicated the fall is part of a downward trend for the two parties.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>There was no joy though either for the main opposition party the Social Democrats (SPD) which also suffered a decline in popularity. Leader Martin Schulz saw the support for his party drop to 19.5 per cent, its lowest level since December 2016. A similar fate was suffered by the AfD which had been making progress in popularity recently. The latest poll shows the party has fallen by 1.5 per cent points since negotiations over forming a new coalition had failed. It is now at to 13.6 per cent.</p> </blockquote> <p>The FDP, which ruled out a forming a &ldquo;Jamaican coalition&rdquo; with Merkel and the Greens, rose 1.7% to 13.3% and the Greens rose 1.5% to 11.9%. The co-founder of the Greens, Hans-Christian Strobele said recently.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;The end of the chancellorship of Angela Merkel has already been announced by the outcome of the general election. &quot;Now Merkel&#39;s political end can indeed come very quickly. In my opinion, Mrs Merkel will not be able to stay at the top of the government for much longer.&quot;</p> </blockquote> <p>After the &ldquo;Jamaican Coalition&rdquo; talks broke down, Merkel indicated her preference for a new election, rather than ruling with a minority. However, we suspected it was a bluff to scare other parties back to the negotiating table. On this note there are signs of progress. Merkel&rsquo;s former &ldquo;Grand Coalition&rdquo; partner, the SPD, has been under pressure support Merkel to secure Germany&rsquo;s stability. According to <a href="https://www.bloomberg.com/news/articles/2017-11-23/germany-s-spd-said-to-be-open-to-talks-on-new-merkel-government">Bloomberg</a>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Germany&rsquo;s biggest opposition party is ready to begin talks with Angela Merkel on a minority government, offering her a way to restore political leadership in Europe&rsquo;s biggest economy.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>It&rsquo;s the first sign the Social Democratic Party is ready to help the chancellor stay in office after her talks on forming a coalition with three other parties fell apart. SPD head Martin Schulz, who faces party pressure to go further and disavow his refusal to join a Merkel government, is meeting Germany&rsquo;s president on Thursday for consultations on the way forward.</p> </blockquote> <p><a href="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/22/Merkel1.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/22/Merkel1_0.jpg" style="width: 500px; height: 338px;" /></a></p> <p>SPD officials are making positive noises about shoring up Merkel and German stability, which could include ditching Schulz. Bloomberg continues.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Of course we want to help Germany and we haven&rsquo;t ruled out anything,&rdquo; SPD lawmaker Karl Lauterbach said in a ZDF television interview. That includes the option of a &ldquo;grand coalition&rdquo; with Merkel&rsquo;s Christian Democrat-led bloc as a last resort, he said. Schulz, who led the SPD to its worst result since World War II in September, faces increasing pressure within the party to step aside, a move that might help clear the way for a grand coalition.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>He is ready to hold talks with Merkel and is prepared to back her in a minority government, though he won&rsquo;t offer another grand coalition, according to a person familiar with his thinking who asked not to be identified. Schulz will inform President Frank-Walter Steinmeier of his plan at their one-on-one meeting in Berlin, the person said.</p> </blockquote> <p>Germany&rsquo;s political establishment is in turmoil but, in its quest for stability, we can&rsquo;t rule out a rapid resurgence in Merkel&#39;s at the head of a reformed Grand Coalition, if Schulz is sacrificed. In the meantime, Merkel is almost making Theresa May&rsquo;s position look stable.<br />&nbsp;</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="524" height="342" alt="" src="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/merkel2.png?1511447112" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-23/merkel-tanks-german-polls-critical-discussions-take-place-spd#comments Angela Merkel Chancellors of Germany Christian Democratic Union Christian Democratic Union (CDU) Christian Democratic Union of Germany Christian Social Union (CSU) European Parliament Frank-Walter Steinmeier German federal election German Lutherans Germany Government Grand coalition Grand Coalition Jamaican Coalition Martin Schulz Merkel government Politics Politics of Germany ratings Social Democratic party Fri, 24 Nov 2017 07:45:00 +0000 Tyler Durden 607801 at http://www.zerohedge.com