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EU Leadership Holds Summit In Kiev Under Air Raid Sirens As Zelensky Urges Fast-Tracked Membership

EU Leadership Holds Summit In Kiev Under Air Raid Sirens As Zelensky Urges Fast-Tracked Membership A handful of top European Union officials gathered in Kiev with Ukraine's leadership on Friday under the sound of air raid sirens for a risky summit at a moment Ukraine is pushing to be fast-tracked for entry into the bloc. Though far from the front line fighting in the east and south, the capital has seen sporadic airstrikes over the past months, but none have been recorded thus far Friday while the summit is being held. Ukrainian Presidential Press Service/Handout via Rueters "There will be no let up in our resolve. We will also support you every step of the way on your journey to the EU," EU chairman Charles Michel wrote on Twitter Friday, with a photo of him in the capital's iconic central square. But Zelensky does has a specific timeline in mind, which he voiced Thursday after initial talks with European Commission President Ursula von der Leyen. "I believe that Ukraine deserves to start negotiations on EU membership this year," Zelensky told reporters. "Only together a strong Ukraine and a strong European Union can protect the life we value." EU Foreign Policy chief Josep Borrell was also at the summit. After Ukraine's candidacy was approved by the EU last June, huge hurdles remain which will without doubt make the process slower that Kiev desires, given any country seeking membership must meet key conditions in areas like corruption, an independent judiciary, media, and rule of law issues. For this reason, European Commission President von der Leyen acknowledged "no rigid timelines" it is being guided by. "There are no rigid timelines, but there are goals that you [Ukraine] have to reach," she told Zelensky. Charles Michel, President of the European Council, via Twitter She did preview the EU's next sanctions package targeting Russia, which in part will focus on sanctioning makers of drone components the Russian military is using to target Ukraine's energy and civilian infrastructure. In reality, if Ukraine is let into the EU, it will take not months but years: "The EU will support Ukraine and the Ukrainian people against Russia's ongoing war of aggression for as long as it takes," the EU leaders were expected to say a joint statement, a draft of which was seen by Reuters in advance. EU officials have listed multiple membership requirements, from political and economic stability to adopting various EU laws. The process is likely to take years. "Some may want to speculate about the endgame but the simple truth is that we are not there yet," an EU official said. Still, von der Leyen, Charles Michel, and Borrell are vowing to support Ukraine "for as long as it takes". Yet Ukraine's leadership, accustomed of late to get almost anything it asks of the West (with the latest being Leopard and Abrams M1 battle tanks), is likely to continue to voice its impatience. Together, we are bringing light to Ukraine!⁰ Ukrainians can exchange their old bulbs at the post office for energy-efficient LED bulbs. The EU is gladly providing 35 million of them. Every kW of energy saved is precious to counter Russia's energy war. pic.twitter.com/dkKpSRH6yv — Ursula von der Leyen (@vonderleyen) February 3, 2023 Not helping things is Ukraine's notorious corruption. Recently, Zelensky has booted well over a dozen top officials from office in an effort to show his Western funders that the government is getting serious about rampant corruption, especially as tens of billions in foreign aid flows through Kiev coffers. Zelensky on Friday also announced that Ukraine needs "accelerated" arms supplies if its forces hope to recapture Donbas, and at a moment Russian troops are poised to encircle the strategic city of Bakhmut. Tyler Durden Fri, 02/03/2023 - 14:01.....»»

Category: worldSource: nytFeb 3rd, 2023

Live updates: Russian forces "frustrated," Zelensky refuses evacuation help, Germany sends weapons and missiles to "friends in Ukraine"

Zelensky called for allies to send help. In a major "turning point," Germany will send 1,000 anti-tank weapons and 500 Stinger missiles. Ukrainian servicemen walk by fragments of a downed aircraft in Kyiv on February 25, 2022.AP Photo/Oleksandr Ratushniak President Zelensky said during a briefing on Saturday morning that Ukraine "survived" the night. He said that government forces still control Kyiv and called for allies to send help. Germany is planning to send 1,000 anti-tank weapons and 500 Stinger missiles to Ukraine. Germany to send anti-tank weapons and missiles to Ukraine in a major policy reversalGermany is planning to send 1,000 anti-tank weapons and 500 Stinger missiles to Ukraine, according to a statement made by German Chancellor Olaf Scholz on Saturday. "The Russian attack marks a turning point," Scholz wrote in a statement shared on Twitter. "It is our duty to do our best to help Ukraine defend against the invading army of Putin. That's why we're supplying 1000 anti-tank weapons and 500 stinger missiles to our friends in Ukraine."The announcement marks a significant shift of Germany's restrictive arms export policy. The country has previously said it held "historical responsibilities" that prevented it from sending weapons and arms to conflict areas, often citing guilt for crimes committed against the Soviet Union during World War II. Read Full StoryRussian forces are 'frustrated' with lack of progress, US official saysAn unexploded Grad rocket is seen at a kindergarten playground in Kharkiv, Ukraine, February 26, 2022, in this still image obtained from a videoReuters TV via REUTERSAccording to a Reuters report, the US official, who was not named by the outlet, said Russian forces had not planned to bring enough fuel or for other basic logistics. "We know that they have not made the progress that they have wanted to make, particularly in the north. They have been frustrated by what they have seen is a very determined resistance," the official told Reuters, adding: "It has slowed them down." An unnamed US official told Fox News: "We continue to believe, based on what we've observed, that this resistance is greater than what the Russians expected." The British Defense Ministry on Saturday made similar claims, saying: "The speed of the Russian advance has temporarily slowed likely as a result of acute logistical difficulties and strong Ukrainian resistance," according to the Associated Press.Read Full StoryZelensky called on 'every friend of Ukraine' to 'please come over' and help defend against Russian invasionUkraine President Volodymyr ZelenskyUkraine President Volodymyr ZelenskyUkrainian President Volodymyr Zelensky on Saturday remained defiant in the face of Russia's invasion, confirming that government forces continued to control Kyiv and "key points around the city.""Please stop those who are lying, or trying to lie to you, or lying to us. We need to stop this war," he said during a morning briefing, The Guardian reported, lambasting disinformation about the state of the country. "We can live in peace together, globally, as humans."He continued: "Our military, our national guard, our national police, our territory defense, special service, nationals of Ukraine, please carry on. We will win. Glory to Ukraine."Read Full StoryBiden's administration is reportedly working to set up a hotline with Russia to avoid an unintended clash between their military forces in Eastern EuropeU.S. soldiers of the 82nd Airborne Division and military vehicles are seen at the temporary military base for U.S. troops established at the Arlamow Airport.Beata Zawrzel/NurPhoto via Getty ImagesSources told NBC News that the United States is working to set up backchannel communications with the Russian military to prevent a clash between the two forces near Ukraine's border.The hotline would help both parties to avoid clashing as US forces are operating near Eastern Europe, according to the report.The open line of communication would also help US and Russian aircraft and ships remain in different areas and communicate the risk of missile strikes. However, it is not yet clear if Russia will subscribe to the potential plan. Mayor of Kyiv sets curfew amid battle to hold capital, says anyone on the street after curfew will be considered an enemyKyiv Mayor Vitali Klitschko on Saturday announced a curfew from 5 p.m. to 8 a.m. to ensure a "more effective defense of the capital" and its residents, according to reports. "This curfew is introduced until the morning of February 28," Klitschko said in the translated announcement. "All civilians who will be on the street during the curfew will be considered members of the enemy's sabotage and reconnaissance groups." —Alex Ward (@alexbward) February 26, 2022The mayor added: "Please treat the situation with understanding and do not go outside."Read Full StoryUkrainian President Zelensky says Ukraine 'survived' the nightUkrainian President Volodymyr Zelenskyy addresses nation in Kyiv, Ukraine on February 25, 2022.Ukrainian Presidential Press Office via APUkraine has "survived" the night, Ukrainian President Volodymyr Zelensky said during a briefing on Saturday morning."And we are successfully fighting off the enemy attacks," he added, per The Kyiv Independent.He said that government forces still control Kyiv and "key points around the city," The Guardian reported.Ukrainian President Zelensky addressed false information that circulated online claiming he called on residents to lay down armsIn a video posted early Saturday, Ukraine's President Volodymyr Zelensky can be seen in front of the House with Chimaeras in Kyiv. —Володимир Зеленський (@ZelenskyyUa) February 26, 2022Zelensky addressed misinformation that was circulating online and reiterated that he was not standing down. "Ukrainians, it has now come to our attention that a lot of fake information has been circulating about me allegedly calling to our armed forces to lay down their arms, and talks of de-evacuation. Let's get things straight. We are here, we are not laying down any arms, we are going to defend our nation." Zelensky said. He added: "This is because our weapons are our truth, and our truth lies in the fact that this is our land, this is our country, our children, and we are going to defend all of this. So this is what I want to tell you. Glory to Ukraine!" Officials in Kyiv are telling residents to seek shelter as street fights break out against Russian forcesIn this handout photo taken from video released by Ukrainian Police Department Press Service released on Friday, Feb. 25, 2022, firefighters hose down burning burning debris in front of a damaged building following a rocket attack on the city of Kyiv, Ukraine.Ukrainian Police Department Press Service via APThe Associated Press reported that on Saturday morning, Russian troops headed toward Kyiv as explosions could be heard across the city. Officials in the Ukrainian capital warned residents to stay away from windows and take shelter indoors as fighting escalated on the streets. President Joe Biden authorized the release of $350 million for military aid to UkrainePresident Joe Biden delivers remarks during a joint news conference with German Chancellor Olaf Scholz in the East Room of the White House on February 07, 2022.Anna Moneymaker/Getty ImagesIn a memorandum to Secretary of State Anthony Blinken sent on Friday night, President Joe Biden asked the State Department to release $350 million through the Foreign Assistance Act to be sent to Ukraine as it defends itself against a Russian invasion.   'The fight is here; I need ammunition, not a ride,' Ukrainian President Zelensky said following an offer to evacuateUkrainian President Volodymyr Zelensky seen at Arlington National Cemetery on September 1, 2021.Anna Moneymaker/Getty ImagesUkrainian President Volodymyr Zelensky refused an offer from the US to evacuate the Ukrainian capital, a senior American intelligence official with direct knowledge of the conversation told the Associated Press. "The fight is here; I need ammunition, not a ride," Zelensky said in response to the offer, the official said, describing Zelensky as "upbeat," according to the AP. US Secretary of State Antony Blinken accuses Russia of "abusing its power" on the UN Security Council with its attacks on UkraineSecretary of State Antony Blinken takes part in a press conference at the end of the Quadrilateral Security Dialogue (Quad) foreign ministers meeting in Melbourne on February 11, 2022.Kevin Lamarque/Getty ImagesUS Secretary of State Antony Blinken tweeted his support for the people of Ukraine on Friday night, rebuking Russia — an "irresponsible Permanent Member of the UN Security Council" — for "abusing its power to attack its neighbor and subvert the UN and our international system.Blinken said the US will be addressing the matter in the UN General Assembly where "the nations of the world can, will, and should hold Russia accountable..."—Secretary Antony Blinken (@SecBlinken) February 26, 2022Earlier Friday, Russia vetoed a United Nations Security Council draft resolution that called on Moscow to withdraw its troops and halt the attack on Ukraine.The US Embassy in Kyiv issued a travel advisory warning US citizens remaining in the city to "know your closest shelter"US Embassy building stays empty as the diplomatic staff was ordered to leave Ukraine Kiev, Ukraine on February 23, 2022.Photo by Dominika Zarzycka/NurPhoto via Getty ImagesThe US Embassy in Kyiv issued a new travel advisory for US citizens remaining in Kyiv early Saturday morning. As Russian forces intensify their attacks against the capital city, the embassy warned US citizens to exercise increased caution due to the possibility of active combat, crime, and civil unrest."The security situation throughout Ukraine is highly volatile, and conditions may deteriorate without warning," the statement said. "US citizens should remain vigilant and take appropriate steps to increase their security awareness."The advisory urged US citizens to know the location of "your closest shelter or protected space," and seek shelter immediately in "the event of mortar and/or rocket fire." "If you feel your current location is no longer safe, you should carefully assess the potential risks involved in moving to a different location," the advisory said. US government prepared to evacuate President Zelensky, according to The Washington PostUkrainian President Volodymyr Zelensky delivers a statement during the 58th Munich Security Conference (MSC) on February 19, 2022 in Munich, Germany.Photo by Ronald Wittek - Pool/Getty ImagesThe US government is ready to help Ukrainian President Volodymyr Zelensky flee Kyiv, but the president is so far refusing to leave, according to The Washington Post.US and Ukrainian officials told the outlet that preparations have been made to help Zelensky avoid being captured or killed as Russian forces descended upon the capital city early Saturday morning.Amid increasing Russian attacks on Friday, Zelensky promised to remain at the head of Ukraine's government in Kyiv, despite the danger."According to the information we have, the enemy has marked me as target No. 1, my family as target No.2," he said in an address. "They want to destroy Ukraine politically by destroying the head of state."Insider has reached out to the White House and the State Department for comment. A senior US official told The Post that US officials in recent days have talked to Zelensky about multiple security issues, including the safest place for the president to remain to maintain the Ukrainian government. "We have been making him aware not only of the threat of Russian invasion, now a reality, but also the threat to him personally," Rep. Adam Schiff, the chairman of the House Intelligence Committee, told The Post. "We stand ready to assist him in any way."Satellite image shows 4-mile-long traffic jam along the Ukrainian-Romanian borderSatellite image of a miles-long traffic jam along the Ukraine-Romania border.Satellite image ©2022 Maxar Technologies.Satellite images from Maxar show a 4-mile (6.5 km)-long traffic jam of people, cars, and trucks attempting to leave Ukraine and cross into Romania near the Siret border crossing.Tens of thousands of Ukrainian refugees have already fled the country since Russian forces invaded early Thursday morning.New explosions heard in Kyiv as Russian forces attack the cityA view of empty streets following the curfew in the country after explosions and air raid sirens wailing again in Kyiv, Ukraine on February 26, 2022.Photo by Aytac Unal/Anadolu Agency via Getty ImagesMore than four dozen explosions were heard early Saturday morning in Kyiv as Russian troops intensified their attacks on the capital city, according to The Washington Post.Thirty minutes of ongoing shelling could be heard as the Ukrainian military fought off Russian assaults in northern Kyiv, the Kyiv Independent reported.The State Special Communications Service instructed people to seek shelter following more than 50 shots fired in a suburb near the city's center.CNN reported that heavy fighting is being reported south of Kyiv as well.—The Recount (@therecount) February 26, 2022 Ukraine's president warns that Russia will try to 'break our resistance' and topple the government before the night is overPresident of Ukraine Volodymyr Zelenskyy holds a press conference in regard of Russia's attack on Ukraine in Kiev, Ukraine on February 24, 2022.Ukrainian Presidency/Handout/Anadolu Agency via Getty ImagesUkrainian President Volodymyr Zelensky said on Friday night that the future of his country "is being decided right now," a warning that comes amid reports that Russian troops are approaching Kyiv from multiple directions."Tonight the enemy will use all the resources they have to break our resistance in a mean, cruel, and inhuman way," Zelensky said in a message to his nation, according to a translation of his remarks. "Tonight they will assault us."He added that many Ukrainian cities remain under attack."Burn down the enemy's military vehicles, using anything—anything—you can. If even the kindergartens are an admissible target for the invaders, you must not leave them any chance," he said.READ FULL STORYRussia vetoed a UN Security Council draft resolution calling on Moscow to stop Ukrainian assaultUnited Nations Security Council vote on a resolution during a meeting on Russian invasion of Ukraine, Friday Feb. 25, 2022 at U.N. headquarters.AP Photo/Seth WenigRussia vetoed on Friday a United Nations Security Council draft resolution that called on Moscow to withdraw its troops and halt the attack on Ukraine.Eleven countries on the council voted in favor, while three abstained. The countries that voted in favor of the resolution were:United StatesUnited KingdomFranceNorwayIrelandAlbaniaGabonMexicoBrazilGhanaKenyaRussia voted no.The countries that abstained from voting were: ChinaIndiaUnited Arab EmiratesThe Biden administration is seeking $6.4 billion for Ukraine aid from CongressA view of the US Capitol at sunset on January 5, 2022 in Washington, DC.Photo by Drew Angerer/Getty ImagesThe White House on Friday asked Congress for an estimated $6.4 billion in additional spending to aid Ukraine amid Russia's invasion, according to Bloomberg.The outlet reported that $2.9 billion of the requested funds would go to humanitarian and security needs in Ukraine, the Baltics, and Poland, including food aid, refugee assistance, and energy stabilization. The remaining $3.5 billion would help the US Department of Defense respond to the conflict, a Biden administration official told Bloomberg.The funds could be included in a broad government spending package Congress is aiming to pass by mid-March. The The requested money is on top of $650 million in security aid and $52 million in humanitarian aid that the US promised Ukraine last year. Spy chief humiliated by Putin on Russian TV for stammering releases new video echoing Putin's war rhetoricRussian Foreign Intelligence Service (SVR) Director Sergei Naryshkin is seen while opening of the exhibition on violations of human rights in Ukraine (2017-2020), on January 18, 2022 in Moscow, Russia.Mikhail Svetlov/Getty ImagesJust days after being humiliated in a broadcast meeting by Vladimir Putin, the head of Russia's foreign intelligence agency, Sergei Naryshkin, returned to the screen to reiterate war rhetoric."Russia cannot allow Ukraine to become a dagger raised above us in the hands of Washington," Naryshkin said in a video on state television, according to the New York Times. "The special military operation will restore peace in Ukraine within a short amount of time and prevent a potential larger conflict in Europe."Read Full StoryBiden is planning to announce new sanctions that personally target Putin, report saysRussian President Vladimir Putin ordered troops into eastern Ukraine on Monday.Alexei Nikolsky/Associated PressUS President Joe Biden is planning to announce as soon as Friday that the US will sanction Russian President Vladimir Putin, CNN reported, a provocative move of condemnation against one of the world's most powerful leaders.The move would come after the US, in coordination with its partners and allies, slapped two rounds of sanctions on Russia following its military assault on Ukraine earlier this week.Biden's reported decision to sanction Putin personally is a rare step and follows the European Union and the UK announcing sanctions against the Russian leader.Read Full StoryA California professor says he spotted Russia's invasion of Ukraine on Google Maps hours before Putin announced the attackRadar imagery showed a large Russian military unit south of Belgorod before it moved toward the border with Ukraine.Capella Space/Middlebury Institute of International StudiesA California professor and arms control expert says he noticed Russia's invasion of Ukraine on Google Maps in real time hours before Russian President Vladimir Putin announced the attack in a televised address.Jeffrey Lewis, a nonproliferation professor at the Middlebury Institute of International Studies in Monterey, California, had been monitoring Google Maps with a small team of research assistants and graduate students when they spotted a "traffic jam" on a road from Belgorod, Russia, to the Ukrainian border at around 3:15 a.m. local time in the Russian city on Thursday.Lewis told Insider on Friday that the "unusual" early morning backup started exactly where a radar image taken a day earlier showed a newly arrived "large Russian military unit with a lot of armor," such as tanks and armored personnel carriers."What was important about that image is that they were not set up in a camp — they were lined up in columns along roads, which is what you do when you're about to pounce," Lewis said.Read Full StoryThe daughter of Putin's spokesman publicly opposed Russia's invasion of Ukraine, undermining her dadElizaveta Pesokva attends a restaurant opening in January 2022Vyacheslav Prokofyev/TASS via Getty ImagesThe daughter of President Vladimir Putin's spokesman posted an anti-war slogan in her Instagram Live on Friday, according to multiple reports.Elizaveta Peskova, 24, posted "HET BOЙHE" — "no to war," against a black background on her Instagram story according to a screenshot tweeted by the Russian outlet TV Rain.This slogan is the main chant used by Russian protesters to oppose the invasions of Ukraine.Read Full StoryVideo reportedly shows Ukrainian men helping themselves to guns on a Kyiv street after all 18-60 years were urged to take up arms and fight the Russian invasionVolunteers, holding AK-47 rifles, protect a main road leading into Kyiv on February 25, 2022DANIEL LEAL/AFP via Getty ImagesThe video, which was shared on Twitter by Illia Ponomarenko, the defense correspondent at the Kyiv Independent, appears to shows civilians on a suburban street in a Kyiv suburb rummaging through boxes of firearms unloaded from trucks, as a voice off-camera says "Slava Ukraini!" (Glory to Ukraine!)."Firearms are delivered to anyone willing," Ponomarenko said in the tweet of the video.Read Full StoryUkraine's president posts defiant video with top government leaders saying 'we are all here' in the streets of besieged KyivUkraine's President Volodymyr Zelenskyy holds a press conference on Russia's military operation in Ukraine, on February 25, 2022 in Kyiv.Photo by Presidency of Ukraine/Handout/Anadolu Agency via Getty ImagesUkraine's President Volodymyr Zelensky posted a defiant video on Friday, purportedly from streets of besieged Kyiv, with top government leaders."We are all here," he said in a video posted to his Facebook page with the words: "We're in here. We are in Kiev. We defend Ukraine."Zelensky said he was with Ukraine's prime minister, presidential advisor, and head of the president's office."Our military are here, our citizens and society are here. We are all here defending our independence, our state, and this is how it's going to be," he said.Read Full StoryRussia says it will partially restrict access to Facebook, accusing it of censorship and human rights violationsRussian President Vladimir PutinAlexey Nikolsky/Getty ImagesRussia said Friday that it would partially limit access to Facebook within its borders over what it alleges is censorship of four state news outlets. In its announcement, the country's communications regulator said it asked Facebook earlier in the week to remove the restrictions and explain its reasoning for them but did not hear back.It also accused the company of various other undetailed human rights and freedoms abuses. Read Full StoryBan children of Russian oligarchs from elite British schools, UK MPs urge after invasion of UkraineHarrow School is one of the many prestigious private schools included in testimonies on Everyone's Invited.Stefan Rousseau/PA Images via Getty ImagesBoris Johnson should ban the children of Russian oligarchs from enjoying the benefits of elite British schools, Conservative MPs have said. The prime minister is coming under increasing pressure to punish Russia for its invasion of Ukraine by targeting its super-rich, many of whom have interests in the UK and mingle with its high society.Read Full StoryThe 5,000 helmets Germany offered Ukraine are finally on their way as it faces a Russian onslaught from 3 sidesGermany is sending 5,000 military helmets to Ukraine, which had requested 100,000 of them.Friso GentschThe 5,000 helmets Germany offered to Ukraine are finally on their way as the country faces Russian attacks from 3 sides. Over a month after Germany's secretary of defense promised the equipment, two trucks are bound for a handoff just outside Ukraine, according to German media company Der Spiegel.  Read Full StoryRussia's advance on Kyiv hit more resistance and is moving slower than expected, US defense official saysUkrainian servicemen ride on tanks towards the front line with Russian forces in the Lugansk region of Ukraine on February 25, 2022ANATOLII STEPANOV/AFP via Getty ImagesRussia appears to have "lost a bit of momentum" as they continue their invasion of Ukraine, a senior US defense official told reporters on Friday. The official said Russian forces are "not moving on Kyiv as fast as they anticipated they would be able to" and are "meeting more resistance than they expected," CNN reported.Read Full StoryEuropean Union freezes assets of Putin and Foreign Minister Lavrov, Latvia's foreign minister saysRussian Foreign Minister Sergei Lavrov looks on, next to Russian President Vladimir Putin, as they wait for the US-Russia summit at the Villa La Grange, in Geneva on June 16, 2021.Photo by BRENDAN SMIALOWSKI/AFP via Getty ImagesThe European Union on Friday approved freezing the assets of Russian President Vladimir Putin and Foreign Minister Sergei Lavrov, Latvia's foreign minister said."EU Foreign Affairs Council has adopted the 2nd sanctions package, asset freeze includes President of Russia and its Foreign Minister. We will prepare the 3d package," Foreign Minister Edgars Rinkēvičs said on Twitter.Read Full StoryA Russian tennis star protested the war in Ukraine in a twist of a traditional celebration in the sportTSN/TwitterRussian tennis star Andrey Rublev has a message for the world — and maybe one directed at his own country."No war please."On Friday, the 24-year-old Moscow native called for peace after besting Poland's Hubert Hurkacz for a spot in the Dubai Tennis Championships title match.As is a popular tennis tradition, Rublev wrote a note on the TV camera lens following his victory.Instead of signing his name or sketching a cheeky doodle — as is the norm in the sport — the world No. 7 penned a serious message for all to see: "No war please."Read Full StoryMonuments around the world are lighting up in blue and yellow in support of UkraineSt Georges Hall in Liverpool is lit up in yellow and blue in an expression of solidarity with Ukraine following Russia's invasion.Peter Byrne/PA Images via Getty ImagesMonuments around the world are lit up in Ukrainian flag colors following Russia's invasion.Berlin's Brandenburg Gate and Rome's Colosseum, among other landmarks, displayed blue and yellow lights.Read Full StoryUkraine praises marine for sacrificing his life to blow up bridge to try to choke off Russian tanksSkakun Vitaliy Volodymyrovich.General Staff of the Armed Forces of UkraineOfficials in Ukraine praised a marine for sacrificing his life to blow up a bridge to try to stop Russian tanks from advancing.Vitaliy Skakun Volodymyrovych was positioned at the Henichesk bridge in the Kherson region during a standoff with Russian forces, the General Staff of the Armed Forces of Ukraine said in a Friday statement.In an effort to fight off advancing Russian tanks, Ukrainian forces decided to blow up the bridge, the statement said."According to his brothers in arms, Vitaly got in touch [with them] and said he was going to blow up the bridge," the statement said. "Immediately after, an explosion rang out."Volodymyrovych died immediately, the statement said.Read Full StoryOrdinary Ukrainian citizens are taking up arms to fend off Russian forces as they close in on KyivResidents attend an open training organised for civilians by war veterans and volunteers who teach the basic weapons handling and first aid on one of Kyiv's city beachesGenya Savilov/AFP via Getty ImagesOrdinary citizens all over Kyiv are taking up arms in the fight against Russian forces as they close in on the capital city following two days of heavy attacks and hundreds of casualties.As Russian forces started making their way toward Kyiv, the Ukrainian government called on all citizens and "patriots" to take up arms in defense of the country, saying that only an ID was required and adding, "We give weapons to all patriots!""We will give weapons to anyone who wants to defend the country," Ukrainian President Volodymyr Zelensky said in a tweet. "Be ready to support Ukraine in the squares of our cities."Read Full StoryRussian state media denies its military attacked Kyiv and claims Ukraine shot down its own plane thereDamage to a building in Kyiv Ukraine, on the morning of February 25, 2022. Russia insisted it was not attacking the city.Pierre Crom/Getty ImagesOn Thursday and into Friday it was clear to most people around the world that Russia had invaded Ukraine, and moved quickly to attack its capital, Kyiv.But those receiving their news from Russia's vast array of state media outlets were given no sense of this, according to a review by Insider and other monitors.A selection of stories from the front pages of major Russian outlets in the early afternoon of Friday, the second day of hostilities around Kyiv, show the news the Russian state is promoting. They had a common theme: Russia is winning, Ukraine is planning atrocities, and there are no Russian attacks on Kyiv.Read Full StoryPeople in Kyiv describe bombardment on night 2 of invasion as Russia closes in on the capitalA building hit by a missile in Kyiv, Ukraine, seen on February 25, 2022.Wolfgang Schwan/Anadolu Agency via Getty ImagesKyiv was rocked by shelling for the second straight day on Friday morning, with Russian forces entering the outskirts of the capital by the afternoon.Speaking from Kyiv by phone on Friday, five residents told Insider of multiple explosions overnight, interspersed with air raid sirens directing people to find safety in bunkers. Alisa Obraztsova, 25, said she was rocked away by explosions at 4:20 a.m."I slept in the guest room in my apartment because I could hear the sirens from that room better," she said. Oleksii, a Kyiv resident who asked to be identified only by his first name, told Insider he was also startled awake by bombs."I woke up at around 4 a.m. because there was a massive explosion," he said. "I looked out the window, everything was a bright orange, everything was getting brighter."Read Full StoryPutin falsely describes Ukraine's government as a 'band of drug addicts and neo-Nazis' in latest propaganda blitz as Russian troops fight to take KyivRussia's President Vladimir Putin meets with members of the Delovaya Rossiya [Business Russia] All-Russian Public Organization at Moscow's Kremlin.Photo by Alexei NikolskybackslashTASS via Getty ImagesRussian President Vladimir Putin falsely described Ukraine's government as a "band of drug addicts and neo-Nazis" in a television appearance on Friday.In the speech, Putin also said Ukrainian President Volodymyr Zelensky's government "lodged itself in Kyiv and taken hostage the entire Ukrainian people," according to a translation from New York Times Moscow bureau chief Anton Troianovski and The Guardian.Read Full StoryZelensky told European leaders, "This might be the last time you see me alive," report saysPresident of Ukraine Volodymyr Zelenskyy holds a press conference in regard of Russia's attack on Ukraine in Kiev, Ukraine on February 24, 2022.Ukrainian Presidency/Handout/Anadolu Agency via Getty ImagesUkrainian President Volodymyr Zelensky on Friday told European leaders on a conference call that it "might be the last time you see me alive" as the Russian military pushes ahead with its offensive in his country. Zelensky on Thursday said in a video address he would remain in Kyiv and would keep his family in Ukraine.Zelensky added that "the enemy marked me as the number one target," with his family being number two.Read Full StoryZelensky asks Putin to 'sit down at the negotiating table' to 'stop the dying' as Russian forces strike KyivUkraine's President Volodymyr Zelenskyy holds a press conference on Russia's military operation in Ukraine, on February 25, 2022 in Kyiv.Photo by Presidency of Ukraine/Handout/Anadolu Agency via Getty ImagesUkrainian President Volodymyr Zelensky asked Russian President Vladimir Putin for negotiations to "stop the dying" as Russian forces strike the country's capital city of Kyiv."Let us sit down at the negotiating table in order to stop the dying," he said in a video address on Friday, according to a translation from The New York Times.Zelensky added: "I want to turn again to the president of the Russian Federation... Fighting is taking place across the entire territory of Ukraine."Read Full StoryMap shows Russian troop movement in Ukraine on Friday!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r.....»»

Category: worldSource: nytFeb 26th, 2022

Live updates: Dozens of new explosions heard in Kyiv as Russian forces attack the city

Russia began its attack on Ukraine on Thursday morning. One official warned that Friday would be the "hardest day." Ukrainian servicemen walk by fragments of a downed aircraft in Kyiv on February 25, 2022.AP Photo/Oleksandr Ratushniak Russia continued its attack on Ukraine on Friday, advancing toward the capital, Kyiv. One Ukrainian official warned that Friday would be the "hardest day". At least 137 Ukrainians were dead as of early Friday morning. The death toll has since risen. US government prepared to evacuate President Zelensky, according to The Washington PostUkrainian President Volodymyr Zelensky delivers a statement during the 58th Munich Security Conference (MSC) on February 19, 2022 in Munich, Germany.Photo by Ronald Wittek - Pool/Getty ImagesThe US government is ready to help Ukrainian President Volodymyr Zelensky flee Kyiv, but the president is so far refusing to leave, according to The Washington Post.US and Ukrainian officials told the outlet that preparations have been made to help Zelensky avoid being captured or killed as Russian forces descended upon the capital city early Saturday morning.Amid increasing Russian attacks on Friday, Zelensky promised to remain at the head of Ukraine's government in Kyiv, despite the danger."According to the information we have, the enemy has marked me as target No. 1, my family as target No.2," he said in an address. "They want to destroy Ukraine politically by destroying the head of state."Insider has reached out to the White House and the State Department for comment. A senior US official told The Post that US officials in recent days have talked to Zelensky about multiple security issues, including the safest place for the president to remain to maintain the Ukrainian government. "We have been making him aware not only of the threat of Russian invasion, now a reality, but also the threat to him personally," Rep. Adam Schiff, the chairman of the House Intelligence Committee, told The Post. "We stand ready to assist him in any way."Satellite image shows 4-mile-long traffic jam along the Ukrainian-Romanian borderSatellite image of a miles-long traffic jam along the Ukraine-Romania border.Satellite image ©2022 Maxar Technologies.Satellite images from Maxar show a 4-mile (6.5 km)-long traffic jam of people, cars, and trucks attempting to leave Ukraine and cross into Romania near the Siret border crossing.Tens of thousands of Ukrainian refugees have already fled the country since Russian forces invaded early Thursday morning.New explosions heard in Kyiv as Russian forces attack the cityA view of empty streets following the curfew in the country after explosions and air raid sirens wailing again in Kyiv, Ukraine on February 26, 2022.Photo by Aytac Unal/Anadolu Agency via Getty ImagesMore than four dozen explosions were heard early Saturday morning in Kyiv as Russian troops intensified their attacks on the capital city, according to The Washington Post.Thirty minutes of ongoing shelling could be heard as the Ukrainian military fought off Russian assaults in northern Kyiv, the Kyiv Independent reported.The State Special Communications Service instructed people to seek shelter following more than 50 shots fired in a suburb near the city's center.CNN reported that heavy fighting is being reported south of Kyiv as well.—The Recount (@therecount) February 26, 2022 Ukraine's president warns that Russia will try to 'break our resistance' and topple the government before the night is overPresident of Ukraine Volodymyr Zelenskyy holds a press conference in regard of Russia's attack on Ukraine in Kiev, Ukraine on February 24, 2022.Ukrainian Presidency/Handout/Anadolu Agency via Getty ImagesUkrainian President Volodymyr Zelensky said on Friday night that the future of his country "is being decided right now," a warning that comes amid reports that Russian troops are approaching Kyiv from multiple directions."Tonight the enemy will use all the resources they have to break our resistance in a mean, cruel, and inhuman way," Zelensky said in a message to his nation, according to a translation of his remarks. "Tonight they will assault us."He added that many Ukrainian cities remain under attack."Burn down the enemy's military vehicles, using anything—anything—you can. If even the kindergartens are an admissible target for the invaders, you must not leave them any chance," he said.READ FULL STORYRussia vetoed a UN Security Council draft resolution calling on Moscow to stop Ukrainian assaultUnited Nations Security Council vote on a resolution during a meeting on Russian invasion of Ukraine, Friday Feb. 25, 2022 at U.N. headquarters.AP Photo/Seth WenigRussia vetoed on Friday a United Nations Security Council draft resolution that called on Moscow to withdraw its troops and halt the attack on Ukraine.Eleven countries on the council voted in favor, while three abstained. The countries that voted in favor of the resolution were:United StatesUnited KingdomFranceNorwayIrelandAlbaniaGabonMexicoBrazilGhanaKenyaRussia voted no.The countries that abstained from voting were: ChinaIndiaUnited Arab EmiratesThe Biden administration is seeking $6.4 billion for Ukraine aid from CongressA view of the US Capitol at sunset on January 5, 2022 in Washington, DC.Photo by Drew Angerer/Getty ImagesThe White House on Friday asked Congress for an estimated $6.4 billion in additional spending to aid Ukraine amid Russia's invasion, according to Bloomberg.The outlet reported that $2.9 billion of the requested funds would go to humanitarian and security needs in Ukraine, the Baltics, and Poland, including food aid, refugee assistance, and energy stabilization. The remaining $3.5 billion would help the US Department of Defense respond to the conflict, a Biden administration official told Bloomberg.The funds could be included in a broad government spending package Congress is aiming to pass by mid-March. The The requested money is on top of $650 million in security aid and $52 million in humanitarian aid that the US promised Ukraine last year. Spy chief humiliated by Putin on Russian TV for stammering releases new video echoing Putin's war rhetoricRussian Foreign Intelligence Service (SVR) Director Sergei Naryshkin is seen while opening of the exhibition on violations of human rights in Ukraine (2017-2020), on January 18, 2022 in Moscow, Russia.Mikhail Svetlov/Getty ImagesJust days after being humiliated in a broadcast meeting by Vladimir Putin, the head of Russia's foreign intelligence agency, Sergei Naryshkin, returned to the screen to reiterate war rhetoric."Russia cannot allow Ukraine to become a dagger raised above us in the hands of Washington," Naryshkin said in a video on state television, according to the New York Times. "The special military operation will restore peace in Ukraine within a short amount of time and prevent a potential larger conflict in Europe."Read Full StoryBiden is planning to announce new sanctions that personally target Putin, report saysRussian President Vladimir Putin ordered troops into eastern Ukraine on Monday.Alexei Nikolsky/Associated PressUS President Joe Biden is planning to announce as soon as Friday that the US will sanction Russian President Vladimir Putin, CNN reported, a provocative move of condemnation against one of the world's most powerful leaders.The move would come after the US, in coordination with its partners and allies, slapped two rounds of sanctions on Russia following its military assault on Ukraine earlier this week.Biden's reported decision to sanction Putin personally is a rare step and follows the European Union and the UK announcing sanctions against the Russian leader.Read Full StoryA California professor says he spotted Russia's invasion of Ukraine on Google Maps hours before Putin announced the attackRadar imagery showed a large Russian military unit south of Belgorod before it moved toward the border with Ukraine.Capella Space/Middlebury Institute of International StudiesA California professor and arms control expert says he noticed Russia's invasion of Ukraine on Google Maps in real time hours before Russian President Vladimir Putin announced the attack in a televised address.Jeffrey Lewis, a nonproliferation professor at the Middlebury Institute of International Studies in Monterey, California, had been monitoring Google Maps with a small team of research assistants and graduate students when they spotted a "traffic jam" on a road from Belgorod, Russia, to the Ukrainian border at around 3:15 a.m. local time in the Russian city on Thursday.Lewis told Insider on Friday that the "unusual" early morning backup started exactly where a radar image taken a day earlier showed a newly arrived "large Russian military unit with a lot of armor," such as tanks and armored personnel carriers."What was important about that image is that they were not set up in a camp — they were lined up in columns along roads, which is what you do when you're about to pounce," Lewis said.Read Full StoryThe daughter of Putin's spokesman publicly opposed Russia's invasion of Ukraine, undermining her dadElizaveta Pesokva attends a restaurant opening in January 2022Vyacheslav Prokofyev/TASS via Getty ImagesThe daughter of President Vladimir Putin's spokesman posted an anti-war slogan in her Instagram Live on Friday, according to multiple reports.Elizaveta Peskova, 24, posted "HET BOЙHE" — "no to war," against a black background on her Instagram story according to a screenshot tweeted by the Russian outlet TV Rain.This slogan is the main chant used by Russian protesters to oppose the invasions of Ukraine.Read Full StoryVideo reportedly shows Ukrainian men helping themselves to guns on a Kyiv street after all 18-60 years were urged to take up arms and fight the Russian invasionVolunteers, holding AK-47 rifles, protect a main road leading into Kyiv on February 25, 2022DANIEL LEAL/AFP via Getty ImagesThe video, which was shared on Twitter by Illia Ponomarenko, the defense correspondent at the Kyiv Independent, appears to shows civilians on a suburban street in a Kyiv suburb rummaging through boxes of firearms unloaded from trucks, as a voice off-camera says "Slava Ukraini!" (Glory to Ukraine!)."Firearms are delivered to anyone willing," Ponomarenko said in the tweet of the video.Read Full StoryUkraine's president posts defiant video with top government leaders saying 'we are all here' in the streets of besieged KyivUkraine's President Volodymyr Zelenskyy holds a press conference on Russia's military operation in Ukraine, on February 25, 2022 in Kyiv.Photo by Presidency of Ukraine/Handout/Anadolu Agency via Getty ImagesUkraine's President Volodymyr Zelensky posted a defiant video on Friday, purportedly from streets of besieged Kyiv, with top government leaders."We are all here," he said in a video posted to his Facebook page with the words: "We're in here. We are in Kiev. We defend Ukraine."Zelensky said he was with Ukraine's prime minister, presidential advisor, and head of the president's office."Our military are here, our citizens and society are here. We are all here defending our independence, our state, and this is how it's going to be," he said.Read Full StoryRussia says it will partially restrict access to Facebook, accusing it of censorship and human rights violationsRussian President Vladimir PutinAlexey Nikolsky/Getty ImagesRussia said Friday that it would partially limit access to Facebook within its borders over what it alleges is censorship of four state news outlets. In its announcement, the country's communications regulator said it asked Facebook earlier in the week to remove the restrictions and explain its reasoning for them but did not hear back.It also accused the company of various other undetailed human rights and freedoms abuses. Read Full StoryBan children of Russian oligarchs from elite British schools, UK MPs urge after invasion of UkraineHarrow School is one of the many prestigious private schools included in testimonies on Everyone's Invited.Stefan Rousseau/PA Images via Getty ImagesBoris Johnson should ban the children of Russian oligarchs from enjoying the benefits of elite British schools, Conservative MPs have said. The prime minister is coming under increasing pressure to punish Russia for its invasion of Ukraine by targeting its super-rich, many of whom have interests in the UK and mingle with its high society.Read Full StoryThe 5,000 helmets Germany offered Ukraine are finally on their way as it faces a Russian onslaught from 3 sidesGermany is sending 5,000 military helmets to Ukraine, which had requested 100,000 of them.Friso GentschThe 5,000 helmets Germany offered to Ukraine are finally on their way as the country faces Russian attacks from 3 sides. Over a month after Germany's secretary of defense promised the equipment, two trucks are bound for a handoff just outside Ukraine, according to German media company Der Spiegel.  Read Full StoryRussia's advance on Kyiv hit more resistance and is moving slower than expected, US defense official saysUkrainian servicemen ride on tanks towards the front line with Russian forces in the Lugansk region of Ukraine on February 25, 2022ANATOLII STEPANOV/AFP via Getty ImagesRussia appears to have "lost a bit of momentum" as they continue their invasion of Ukraine, a senior US defense official told reporters on Friday. The official said Russian forces are "not moving on Kyiv as fast as they anticipated they would be able to" and are "meeting more resistance than they expected," CNN reported.Read Full StoryEuropean Union freezes assets of Putin and Foreign Minister Lavrov, Latvia's foreign minister saysRussian Foreign Minister Sergei Lavrov looks on, next to Russian President Vladimir Putin, as they wait for the US-Russia summit at the Villa La Grange, in Geneva on June 16, 2021.Photo by BRENDAN SMIALOWSKI/AFP via Getty ImagesThe European Union on Friday approved freezing the assets of Russian President Vladimir Putin and Foreign Minister Sergei Lavrov, Latvia's foreign minister said."EU Foreign Affairs Council has adopted the 2nd sanctions package, asset freeze includes President of Russia and its Foreign Minister. We will prepare the 3d package," Foreign Minister Edgars Rinkēvičs said on Twitter.Read Full StoryA Russian tennis star protested the war in Ukraine in a twist of a traditional celebration in the sportTSN/TwitterRussian tennis star Andrey Rublev has a message for the world — and maybe one directed at his own country."No war please."On Friday, the 24-year-old Moscow native called for peace after besting Poland's Hubert Hurkacz for a spot in the Dubai Tennis Championships title match.As is a popular tennis tradition, Rublev wrote a note on the TV camera lens following his victory.Instead of signing his name or sketching a cheeky doodle — as is the norm in the sport — the world No. 7 penned a serious message for all to see: "No war please."Read Full StoryMonuments around the world are lighting up in blue and yellow in support of UkraineSt Georges Hall in Liverpool is lit up in yellow and blue in an expression of solidarity with Ukraine following Russia's invasion.Peter Byrne/PA Images via Getty ImagesMonuments around the world are lit up in Ukrainian flag colors following Russia's invasion.Berlin's Brandenburg Gate and Rome's Colosseum, among other landmarks, displayed blue and yellow lights.Read Full StoryUkraine praises marine for sacrificing his life to blow up bridge to try to choke off Russian tanksSkakun Vitaliy Volodymyrovich.General Staff of the Armed Forces of UkraineOfficials in Ukraine praised a marine for sacrificing his life to blow up a bridge to try to stop Russian tanks from advancing.Vitaliy Skakun Volodymyrovych was positioned at the Henichesk bridge in the Kherson region during a standoff with Russian forces, the General Staff of the Armed Forces of Ukraine said in a Friday statement.In an effort to fight off advancing Russian tanks, Ukrainian forces decided to blow up the bridge, the statement said."According to his brothers in arms, Vitaly got in touch [with them] and said he was going to blow up the bridge," the statement said. "Immediately after, an explosion rang out."Volodymyrovych died immediately, the statement said.Read Full StoryOrdinary Ukrainian citizens are taking up arms to fend off Russian forces as they close in on KyivResidents attend an open training organised for civilians by war veterans and volunteers who teach the basic weapons handling and first aid on one of Kyiv's city beachesGenya Savilov/AFP via Getty ImagesOrdinary citizens all over Kyiv are taking up arms in the fight against Russian forces as they close in on the capital city following two days of heavy attacks and hundreds of casualties.As Russian forces started making their way toward Kyiv, the Ukrainian government called on all citizens and "patriots" to take up arms in defense of the country, saying that only an ID was required and adding, "We give weapons to all patriots!""We will give weapons to anyone who wants to defend the country," Ukrainian President Volodymyr Zelensky said in a tweet. "Be ready to support Ukraine in the squares of our cities."Read Full StoryRussian state media denies its military attacked Kyiv and claims Ukraine shot down its own plane thereDamage to a building in Kyiv Ukraine, on the morning of February 25, 2022. Russia insisted it was not attacking the city.Pierre Crom/Getty ImagesOn Thursday and into Friday it was clear to most people around the world that Russia had invaded Ukraine, and moved quickly to attack its capital, Kyiv.But those receiving their news from Russia's vast array of state media outlets were given no sense of this, according to a review by Insider and other monitors.A selection of stories from the front pages of major Russian outlets in the early afternoon of Friday, the second day of hostilities around Kyiv, show the news the Russian state is promoting. They had a common theme: Russia is winning, Ukraine is planning atrocities, and there are no Russian attacks on Kyiv.Read Full StoryPeople in Kyiv describe bombardment on night 2 of invasion as Russia closes in on the capitalA building hit by a missile in Kyiv, Ukraine, seen on February 25, 2022.Wolfgang Schwan/Anadolu Agency via Getty ImagesKyiv was rocked by shelling for the second straight day on Friday morning, with Russian forces entering the outskirts of the capital by the afternoon.Speaking from Kyiv by phone on Friday, five residents told Insider of multiple explosions overnight, interspersed with air raid sirens directing people to find safety in bunkers. Alisa Obraztsova, 25, said she was rocked away by explosions at 4:20 a.m."I slept in the guest room in my apartment because I could hear the sirens from that room better," she said. Oleksii, a Kyiv resident who asked to be identified only by his first name, told Insider he was also startled awake by bombs."I woke up at around 4 a.m. because there was a massive explosion," he said. "I looked out the window, everything was a bright orange, everything was getting brighter."Read Full StoryPutin falsely describes Ukraine's government as a 'band of drug addicts and neo-Nazis' in latest propaganda blitz as Russian troops fight to take KyivRussia's President Vladimir Putin meets with members of the Delovaya Rossiya [Business Russia] All-Russian Public Organization at Moscow's Kremlin.Photo by Alexei NikolskybackslashTASS via Getty ImagesRussian President Vladimir Putin falsely described Ukraine's government as a "band of drug addicts and neo-Nazis" in a television appearance on Friday.In the speech, Putin also said Ukrainian President Volodymyr Zelensky's government "lodged itself in Kyiv and taken hostage the entire Ukrainian people," according to a translation from New York Times Moscow bureau chief Anton Troianovski and The Guardian.Read Full StoryZelensky told European leaders, "This might be the last time you see me alive," report saysPresident of Ukraine Volodymyr Zelenskyy holds a press conference in regard of Russia's attack on Ukraine in Kiev, Ukraine on February 24, 2022.Ukrainian Presidency/Handout/Anadolu Agency via Getty ImagesUkrainian President Volodymyr Zelensky on Friday told European leaders on a conference call that it "might be the last time you see me alive" as the Russian military pushes ahead with its offensive in his country. Zelensky on Thursday said in a video address he would remain in Kyiv and would keep his family in Ukraine.Zelensky added that "the enemy marked me as the number one target," with his family being number two.Read Full StoryZelensky asks Putin to 'sit down at the negotiating table' to 'stop the dying' as Russian forces strike KyivUkraine's President Volodymyr Zelenskyy holds a press conference on Russia's military operation in Ukraine, on February 25, 2022 in Kyiv.Photo by Presidency of Ukraine/Handout/Anadolu Agency via Getty ImagesUkrainian President Volodymyr Zelensky asked Russian President Vladimir Putin for negotiations to "stop the dying" as Russian forces strike the country's capital city of Kyiv."Let us sit down at the negotiating table in order to stop the dying," he said in a video address on Friday, according to a translation from The New York Times.Zelensky added: "I want to turn again to the president of the Russian Federation... Fighting is taking place across the entire territory of Ukraine."Read Full StoryMap shows Russian troop movement in Ukraine on Friday!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r.....»»

Category: topSource: businessinsiderFeb 25th, 2022

Live updates: Ukraine"s president warns that Russia will try to "break our resistance" and topple the government

Russia began its attack on Ukraine on Thursday morning. One official warned that Friday would be the "hardest day." Ukrainian servicemen walk by fragments of a downed aircraft in Kyiv on February 25, 2022.AP Photo/Oleksandr Ratushniak Russia continued its attack on Ukraine on Friday, advancing toward the capital, Kyiv. One Ukrainian official warned that Friday would be the "hardest day". At least 137 Ukrainians were dead as of early Friday morning. The death toll has since risen. Ukraine's president warns that Russia will try to 'break our resistance' and topple the government before the night is overPresident of Ukraine Volodymyr Zelenskyy holds a press conference in regard of Russia's attack on Ukraine in Kiev, Ukraine on February 24, 2022.Ukrainian Presidency/Handout/Anadolu Agency via Getty ImagesUkrainian President Volodymyr Zelensky said on Friday night that the future of his country "is being decided right now," a warning that comes amid reports that Russian troops are approaching Kyiv from multiple directions."Tonight the enemy will use all the resources they have to break our resistance in a mean, cruel, and inhuman way," Zelensky said in a message to his nation, according to a translation of his remarks. "Tonight they will assault us."He added that many Ukrainian cities remain under attack."Burn down the enemy's military vehicles, using anything—anything—you can. If even the kindergartens are an admissible target for the invaders, you must not leave them any chance," he said.READ FULL STORYRussia vetoed a a UN Security Council draft resolution calling on Moscow to stop Ukrainian assaultUnited Nations Security Council vote on a resolution during a meeting on Russian invasion of Ukraine, Friday Feb. 25, 2022 at U.N. headquarters.AP Photo/Seth WenigRussia on Friday vetoed a United Nations Security Council draft resolution that called on Moscow to withdraw its troops and halt the attack on Ukraine.Eleven countries on the council voted in favor, while three abstained. The countries that voted in favor of the resolution were:United StatesUnited KingdomFranceNorwayIrelandAlbaniaGabonMexicoBrazilGhanaKenyaRussia voted no.The countries that abstained from voting were: ChinaIndiaUnited Arab EmiratesThe Biden administration is seeking $6.4 billion for Ukraine aid from CongressA view of the US Capitol at sunset on January 5, 2022 in Washington, DC.Photo by Drew Angerer/Getty ImagesThe White House on Friday asked Congress for an estimated $6.4 billion in additional spending to aid Ukraine amid Russia's invasion, according to Bloomberg.The outlet reported that $2.9 billion of the requested funds would go to humanitarian and security needs in Ukraine, the Baltics, and Poland, including food aid, refugee assistance, and energy stabilization. The remaining $3.5 billion would help the US Department of Defense respond to the conflict, a Biden administration official told Bloomberg.The funds could be included in a broad government spending package Congress is aiming to pass by mid-March. The The requested money is on top of $650 million in security aid and $52 million in humanitarian aid that the US promised Ukraine last year. Spy chief humiliated by Putin on Russian TV for stammering releases new video echoing Putin's war rhetoricRussian Foreign Intelligence Service (SVR) Director Sergei Naryshkin is seen while opening of the exhibition on violations of human rights in Ukraine (2017-2020), on January 18, 2022 in Moscow, Russia.Mikhail Svetlov/Getty ImagesJust days after being humiliated in a broadcast meeting by Vladimir Putin, the head of Russia's foreign intelligence agency, Sergei Naryshkin, returned to the screen to reiterate war rhetoric."Russia cannot allow Ukraine to become a dagger raised above us in the hands of Washington," Naryshkin said in a video on state television, according to the New York Times. "The special military operation will restore peace in Ukraine within a short amount of time and prevent a potential larger conflict in Europe."Read Full StoryBiden is planning to announce new sanctions that personally target Putin, report saysRussian President Vladimir Putin ordered troops into eastern Ukraine on Monday.Alexei Nikolsky/Associated PressUS President Joe Biden is planning to announce as soon as Friday that the US will sanction Russian President Vladimir Putin, CNN reported, a provocative move of condemnation against one of the world's most powerful leaders.The move would come after the US, in coordination with its partners and allies, slapped two rounds of sanctions on Russia following its military assault on Ukraine earlier this week.Biden's reported decision to sanction Putin personally is a rare step and follows the European Union and the UK announcing sanctions against the Russian leader.Read Full StoryA California professor says he spotted Russia's invasion of Ukraine on Google Maps hours before Putin announced the attackRadar imagery showed a large Russian military unit south of Belgorod before it moved toward the border with Ukraine.Capella Space/Middlebury Institute of International StudiesA California professor and arms control expert says he noticed Russia's invasion of Ukraine on Google Maps in real time hours before Russian President Vladimir Putin announced the attack in a televised address.Jeffrey Lewis, a nonproliferation professor at the Middlebury Institute of International Studies in Monterey, California, had been monitoring Google Maps with a small team of research assistants and graduate students when they spotted a "traffic jam" on a road from Belgorod, Russia, to the Ukrainian border at around 3:15 a.m. local time in the Russian city on Thursday.Lewis told Insider on Friday that the "unusual" early morning backup started exactly where a radar image taken a day earlier showed a newly arrived "large Russian military unit with a lot of armor," such as tanks and armored personnel carriers."What was important about that image is that they were not set up in a camp — they were lined up in columns along roads, which is what you do when you're about to pounce," Lewis said.Read Full StoryThe daughter of Putin's spokesman publicly opposed Russia's invasion of Ukraine, undermining her dadElizaveta Pesokva attends a restaurant opening in January 2022Vyacheslav Prokofyev/TASS via Getty ImagesThe daughter of President Vladimir Putin's spokesman posted an anti-war slogan in her Instagram Live on Friday, according to multiple reports.Elizaveta Peskova, 24, posted "HET BOЙHE" — "no to war," against a black background on her Instagram story according to a screenshot tweeted by the Russian outlet TV Rain.This slogan is the main chant used by Russian protesters to oppose the invasions of Ukraine.Read Full StoryVideo reportedly shows Ukrainian men helping themselves to guns on a Kyiv street after all 18-60 years were urged to take up arms and fight the Russian invasionVolunteers, holding AK-47 rifles, protect a main road leading into Kyiv on February 25, 2022DANIEL LEAL/AFP via Getty ImagesThe video, which was shared on Twitter by Illia Ponomarenko, the defense correspondent at the Kyiv Independent, appears to shows civilians on a suburban street in a Kyiv suburb rummaging through boxes of firearms unloaded from trucks, as a voice off-camera says "Slava Ukraini!" (Glory to Ukraine!)."Firearms are delivered to anyone willing," Ponomarenko said in the tweet of the video.Read Full StoryUkraine's president posts defiant video with top government leaders saying 'we are all here' in the streets of besieged KyivUkraine's President Volodymyr Zelenskyy holds a press conference on Russia's military operation in Ukraine, on February 25, 2022 in Kyiv.Photo by Presidency of Ukraine/Handout/Anadolu Agency via Getty ImagesUkraine's President Volodymyr Zelensky posted a defiant video on Friday, purportedly from streets of besieged Kyiv, with top government leaders."We are all here," he said in a video posted to his Facebook page with the words: "We're in here. We are in Kiev. We defend Ukraine."Zelensky said he was with Ukraine's prime minister, presidential advisor, and head of the president's office."Our military are here, our citizens and society are here. We are all here defending our independence, our state, and this is how it's going to be," he said.Read Full StoryRussia says it will partially restrict access to Facebook, accusing it of censorship and human rights violationsRussian President Vladimir PutinAlexey Nikolsky/Getty ImagesRussia said Friday that it would partially limit access to Facebook within its borders over what it alleges is censorship of four state news outlets. In its announcement, the country's communications regulator said it asked Facebook earlier in the week to remove the restrictions and explain its reasoning for them but did not hear back.It also accused the company of various other undetailed human rights and freedoms abuses. Read Full StoryBan children of Russian oligarchs from elite British schools, UK MPs urge after invasion of UkraineHarrow School is one of the many prestigious private schools included in testimonies on Everyone's Invited.Stefan Rousseau/PA Images via Getty ImagesBoris Johnson should ban the children of Russian oligarchs from enjoying the benefits of elite British schools, Conservative MPs have said. The prime minister is coming under increasing pressure to punish Russia for its invasion of Ukraine by targeting its super-rich, many of whom have interests in the UK and mingle with its high society.Read Full StoryThe 5,000 helmets Germany offered Ukraine are finally on their way as it faces a Russian onslaught from 3 sidesGermany is sending 5,000 military helmets to Ukraine, which had requested 100,000 of them.Friso GentschThe 5,000 helmets Germany offered to Ukraine are finally on their way as the country faces Russian attacks from 3 sides. Over a month after Germany's secretary of defense promised the equipment, two trucks are bound for a handoff just outside Ukraine, according to German media company Der Spiegel.  Read Full StoryRussia's advance on Kyiv hit more resistance and is moving slower than expected, US defense official saysUkrainian servicemen ride on tanks towards the front line with Russian forces in the Lugansk region of Ukraine on February 25, 2022ANATOLII STEPANOV/AFP via Getty ImagesRussia appears to have "lost a bit of momentum" as they continue their invasion of Ukraine, a senior US defense official told reporters on Friday. The official said Russian forces are "not moving on Kyiv as fast as they anticipated they would be able to" and are "meeting more resistance than they expected," CNN reported.Read Full StoryEuropean Union freezes assets of Putin and Foreign Minister Lavrov, Latvia's foreign minister saysRussian Foreign Minister Sergei Lavrov looks on, next to Russian President Vladimir Putin, as they wait for the US-Russia summit at the Villa La Grange, in Geneva on June 16, 2021.Photo by BRENDAN SMIALOWSKI/AFP via Getty ImagesThe European Union on Friday approved freezing the assets of Russian President Vladimir Putin and Foreign Minister Sergei Lavrov, Latvia's foreign minister said."EU Foreign Affairs Council has adopted the 2nd sanctions package, asset freeze includes President of Russia and its Foreign Minister. We will prepare the 3d package," Foreign Minister Edgars Rinkēvičs said on Twitter.Read Full StoryA Russian tennis star protested the war in Ukraine in a twist of a traditional celebration in the sportTSN/TwitterRussian tennis star Andrey Rublev has a message for the world — and maybe one directed at his own country."No war please."On Friday, the 24-year-old Moscow native called for peace after besting Poland's Hubert Hurkacz for a spot in the Dubai Tennis Championships title match.As is a popular tennis tradition, Rublev wrote a note on the TV camera lens following his victory.Instead of signing his name or sketching a cheeky doodle — as is the norm in the sport — the world No. 7 penned a serious message for all to see: "No war please."Read Full StoryMonuments around the world are lighting up in blue and yellow in support of UkraineSt Georges Hall in Liverpool is lit up in yellow and blue in an expression of solidarity with Ukraine following Russia's invasion.Peter Byrne/PA Images via Getty ImagesMonuments around the world are lit up in Ukrainian flag colors following Russia's invasion.Berlin's Brandenburg Gate and Rome's Colosseum, among other landmarks, displayed blue and yellow lights.Read Full StoryUkraine praises marine for sacrificing his life to blow up bridge to try to choke off Russian tanksSkakun Vitaliy Volodymyrovich.General Staff of the Armed Forces of UkraineOfficials in Ukraine praised a marine for sacrificing his life to blow up a bridge to try to stop Russian tanks from advancing.Vitaliy Skakun Volodymyrovych was positioned at the Henichesk bridge in the Kherson region during a standoff with Russian forces, the General Staff of the Armed Forces of Ukraine said in a Friday statement.In an effort to fight off advancing Russian tanks, Ukrainian forces decided to blow up the bridge, the statement said."According to his brothers in arms, Vitaly got in touch [with them] and said he was going to blow up the bridge," the statement said. "Immediately after, an explosion rang out."Volodymyrovych died immediately, the statement said.Read Full StoryOrdinary Ukrainian citizens are taking up arms to fend off Russian forces as they close in on KyivResidents attend an open training organised for civilians by war veterans and volunteers who teach the basic weapons handling and first aid on one of Kyiv's city beachesGenya Savilov/AFP via Getty ImagesOrdinary citizens all over Kyiv are taking up arms in the fight against Russian forces as they close in on the capital city following two days of heavy attacks and hundreds of casualties.As Russian forces started making their way toward Kyiv, the Ukrainian government called on all citizens and "patriots" to take up arms in defense of the country, saying that only an ID was required and adding, "We give weapons to all patriots!""We will give weapons to anyone who wants to defend the country," Ukrainian President Volodymyr Zelensky said in a tweet. "Be ready to support Ukraine in the squares of our cities."Read Full StoryRussian state media denies its military attacked Kyiv and claims Ukraine shot down its own plane thereDamage to a building in Kyiv Ukraine, on the morning of February 25, 2022. Russia insisted it was not attacking the city.Pierre Crom/Getty ImagesOn Thursday and into Friday it was clear to most people around the world that Russia had invaded Ukraine, and moved quickly to attack its capital, Kyiv.But those receiving their news from Russia's vast array of state media outlets were given no sense of this, according to a review by Insider and other monitors.A selection of stories from the front pages of major Russian outlets in the early afternoon of Friday, the second day of hostilities around Kyiv, show the news the Russian state is promoting. They had a common theme: Russia is winning, Ukraine is planning atrocities, and there are no Russian attacks on Kyiv.Read Full StoryPeople in Kyiv describe bombardment on night 2 of invasion as Russia closes in on the capitalA building hit by a missile in Kyiv, Ukraine, seen on February 25, 2022.Wolfgang Schwan/Anadolu Agency via Getty ImagesKyiv was rocked by shelling for the second straight day on Friday morning, with Russian forces entering the outskirts of the capital by the afternoon.Speaking from Kyiv by phone on Friday, five residents told Insider of multiple explosions overnight, interspersed with air raid sirens directing people to find safety in bunkers. Alisa Obraztsova, 25, said she was rocked away by explosions at 4:20 a.m."I slept in the guest room in my apartment because I could hear the sirens from that room better," she said. Oleksii, a Kyiv resident who asked to be identified only by his first name, told Insider he was also startled awake by bombs."I woke up at around 4 a.m. because there was a massive explosion," he said. "I looked out the window, everything was a bright orange, everything was getting brighter."Read Full StoryPutin falsely describes Ukraine's government as a 'band of drug addicts and neo-Nazis' in latest propaganda blitz as Russian troops fight to take KyivRussia's President Vladimir Putin meets with members of the Delovaya Rossiya [Business Russia] All-Russian Public Organization at Moscow's Kremlin.Photo by Alexei NikolskybackslashTASS via Getty ImagesRussian President Vladimir Putin falsely described Ukraine's government as a "band of drug addicts and neo-Nazis" in a television appearance on Friday.In the speech, Putin also said Ukrainian President Volodymyr Zelensky's government "lodged itself in Kyiv and taken hostage the entire Ukrainian people," according to a translation from New York Times Moscow bureau chief Anton Troianovski and The Guardian.Read Full StoryZelensky told European leaders, "This might be the last time you see me alive," report saysPresident of Ukraine Volodymyr Zelenskyy holds a press conference in regard of Russia's attack on Ukraine in Kiev, Ukraine on February 24, 2022.Ukrainian Presidency/Handout/Anadolu Agency via Getty ImagesUkrainian President Volodymyr Zelensky on Friday told European leaders on a conference call that it "might be the last time you see me alive" as the Russian military pushes ahead with its offensive in his country. Zelensky on Thursday said in a video address he would remain in Kyiv and would keep his family in Ukraine.Zelensky added that "the enemy marked me as the number one target," with his family being number two.Read Full StoryZelensky asks Putin to 'sit down at the negotiating table' to 'stop the dying' as Russian forces strike KyivUkraine's President Volodymyr Zelenskyy holds a press conference on Russia's military operation in Ukraine, on February 25, 2022 in Kyiv.Photo by Presidency of Ukraine/Handout/Anadolu Agency via Getty ImagesUkrainian President Volodymyr Zelensky asked Russian President Vladimir Putin for negotiations to "stop the dying" as Russian forces strike the country's capital city of Kyiv."Let us sit down at the negotiating table in order to stop the dying," he said in a video address on Friday, according to a translation from The New York Times.Zelensky added: "I want to turn again to the president of the Russian Federation... Fighting is taking place across the entire territory of Ukraine."Read Full StoryMap shows Russian troop movement in Ukraine on Friday!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r.....»»

Category: topSource: businessinsiderFeb 25th, 2022

Escobar: Rewiring Eurasia - Mr. Patrushev Goes To Tehran...

Escobar: Rewiring Eurasia - Mr. Patrushev Goes To Tehran... Authored by Pepe Escobar via The Cradle, The meeting this week between two Eurasian security bosses is a further step toward dusting away the west's oversized Asian footprint... Two guys are hanging out in a cozy room in Tehran with a tantalizing new map of the world in the background. Nothing to see here? On the contrary. These two Eurasian security giants are no less than the – unusually relaxed – Russian Security Council Secretary Nikolai Patrushev and Ali Shamkhani, the Secretary of Iran’s Supreme National Security Council. And why are they so relaxed? Because the future prospects revolving around the main theme of their conversation – the Russia-Iran strategic partnership – could not be more exciting. This was a very serious business affair: an official visit, at the invitation of Shamkhani. Patrushev was in Tehran on the exact same day that Russian Minister of Defense Sergey Shoigu – following a recommendation from General Sergey Surovikin, the overall commander of the Special Military Operation – ordered a Russian retreat from Kherson. Patrushev knew it for days – so he had no problem to step on a plane to take care of business in Tehran. After all, the Kherson drama is part of the Patrushev negotiations with US National Security Advisor Jake Sullivan on Ukraine, which have been going on for weeks, with Saudi Arabia as eventual go-between. Besides Ukraine, the two discussed “information security, as well as measures to counter interference in the internal affairs of both countries by western special services,” according to a report by Russia’s TASS news agency. Both countries, as we know, are particular targets of western information warfare and sabotage, with Iran currently the focus of one of these no-holds-barred, foreign-backed, destabilization campaign. Patrushev was officially received by Iranian President Ebrahim Raisi, who went straight to the point: “The cooperation of independent countries is the strongest response to the sanctions and destabilization policies of the US and its allies.” Patrushev, for his part, assured Raisi that for the Russian Federation, strategic relations with Iran are essential for Russian national security. So that goes way beyond Geranium-2 kamikaze drones – the Russian cousins of the Shahed-136 – wreaking havoc in the Ukrainian battlefield. Which, by the way, elicited a direct mention later on by Shamkhani: “Iran welcomes a peaceful settlement in Ukraine and is in favor of peace based on dialogue between Moscow and Kiev.” Patrushev and Shamkhani of course discussed security issues and the proverbial “cooperation in the international arena.” But what may be more significant is that the Russian delegation included officials from several key economic agencies. There were no leaks – but that suggests serious economic connectivity remains at the heart of the strategic partnership between the two top sanctioned nations in Eurasia. Key in the discussions was the Iranian focus on fast expansion of bilateral trade in national currencies – ruble and rial. That happens to be at the center of the drive by both the Shanghai Cooperation Organization (SCO) and BRICS towards multipolarity. Iran is now a full SCO member – the only West Asian nation to be part of the Asian strategic behemoth – and will apply to become part of BRICS+. Have swap, will travel The Patrushev-Shamkhani get together happened ahead of the signing, next month, of a whopping $40 billion energy deal with Gazprom, as previously announced by Iranian Deputy Foreign Minister Mahdi Safari. The National Iranian Oil Company (NIOC) has already clinched an initial $6.5 billion deal. All that revolves around the development of two gas deposits and six oilfields; swaps in natural gas and oil products; LNG projects; and building more gas pipelines. Last month, Russian Deputy Prime Minister Aleksandr Novak announced a swap of 5 million tons of oil and 10 billion cubic meters of gas, to be finished by the end of 2022. And he confirmed that “the amount of Russian investment in Iran’s oil fields will increase.” Barter of course is ideal for Moscow and Tehran to jointly bypass interminably problematic sanctions and payment settlement issues – linked to the western financial system. On top of it, Russia and Iran are able to invest in direct trade links via the Caspian Sea. At the recent Conference on Interaction and Confidence Building Measures in Asia (CICA) summit in Astana, Kazakhstan, Raisi forcefully proposed that a successful “new Asia” must necessarily develop an endogenous model for independent states. As an SCO member, and playing a very important role, alongside Russia and India, in the International North-South Transportation Corridor (INSTC), Raisi is positioning Iran in a key vector of multilateralism. Since Tehran entered the SCO, cooperation with both Russia and China, predictably, is on overdrive. Patrushev’s visit is part of that process. Tehran is leaving behind decades of Iranophobia and every possible declination of American “maximum pressure” – from sanctions to attempts at color revolution – to dynamically connect across Eurasia. BRI, SCO, INSTC Iran is a key Belt and Road Initiative (BRI) partner for China’s grand infrastructure project to connect Eurasia via road, sea, and train. In parallel, the multimodal Russian-led INSTC is essential to promote trade between the Indian subcontinent and Central Asia – at the same time solidifying Russia’s presence in the South Caucasus and the Caspian Sea region. Iran and India have committed to offer part of Chabahar port in Iran to Central Asian nations, complete with access to exclusive economic zones. At the recent SCO summit in Samarkand, both Russia and China made it quite clear – especially for the collective west – that Iran is no longer going to be treated as a pariah state. So it is no wonder Iran that is entering a new business era with all members of the SCO under the sign of an emerging financial order being designed mostly by Russia, China and India. As far as strategic partnerships go, the ties between Russia and India (President Narendra Modi called it an unbreakable friendship) is as strong as those between Russia and China. And when it comes to Russia, that’s what Iran is aiming at. The Patrushev-Shamkhani strategic meeting will hurl western hysteria to unseen levels – as it completely smashes Iranophobia and Russophobia in one fell swoop. Iran as a close ally is an unparalleled strategic asset for Russia in the drive towards multipolarity. Iran and the Eurasian Economic Union (EAEU) are already negotiating a Free Trade Agreement (FTA) in parallel to those swaps involving Russian oil. The west’s reliance on the SWIFT banking messaging system hardly makes any difference to Russia and Iran. The Global South is watching it closely, especially in Iran’s neighborhood where oil is commonly traded in US dollars. It is starting to become clear to anyone in the west with an IQ above room temperature that the Joint Comprehensive Plan of Action (JCPOA, or Iran nuclear deal), in the end, does not matter anymore. Iran’s future is directly connected to the success of three of the BRICS: Russia, China and India. Iran itself may soon become a BRICS+ member. There’s more: Iran is even becoming a role model for the Persian Gulf: witness the lengthy queue of regional states aspiring toward gaining SCO membership. The Trumpian “Abraham Accords?” What’s that? BRICS/SCO/BRI is the only way to go in West Asia today. Tyler Durden Sat, 11/12/2022 - 23:20.....»»

Category: personnelSource: nytNov 13th, 2022

US Futures Stabilize After Rollercoaster Session As Yuan, Chinese Stocks Crater

US Futures Stabilize After Rollercoaster Session As Yuan, Chinese Stocks Crater US stock futures steadied following a rollercoaster move earlier in the session and after Friday’s sharp rally as traders assessed moves by Chinese President Xi Jinping to tighten his grip on the nation’s leadership while keeping an eye on macro data now that the Fed is in a chatterbox blackout. Contracts on the S&P 500 edged 0.7% higher at 7:30a.m. in New York after earlier rising as much as 1.3% and dropping 0.7%, while the yield on the 10-year Treasury slipped for a second session. Nasdaq 100 futures were up 0.4% after bouncing between gains and losses earlier. Both underlying gauges are coming off their best week since June, and are entering the busiest week of the earnings season with 46% of the S&P 500’s market cap due to announce third-quarter results. A gauge of the dollar’s strength rose sharply unwinding some of Friday's losses, supported by a risk-off mood sparked by a rout across Chinese markets which saw the Hang Seng plunge 6.4%, the biggest one day drop since 2008! The offshore yen resumed its decline, tumbling by 1.3% - the biggest one-day slide since August 20019, to a record of 7.31, while the pound outperformed on bets for fiscal caution from the next UK prime minister. “Market sentiment could remain cautious near-term on China, on concerns of a shift of focus toward more state control versus a market-driven approach under the new leadership team,” said Xiaojia Zhi, the chief China economist at Credit Agricole CIB. “The exit path from zero-Covid is not yet clear.” Chinese economic data that was delayed last week and published Monday showed a mixed recovery, with unemployment rising and retail sales weakening despite a pickup in growth. Yet Xi’s Covid-zero campaign looks likely to continue to drag on the economy and there has been speculation that his “common prosperity” goal may even lead to property and inheritance taxes. “It’s clear demand is slowing but so far we’ve seen pockets of tech like software, cloud computing still being quite resilient,” said Laura Cooper, a senior investment strategist at BlackRock International Ltd., on Bloomberg TV. “We will be watching for any signs of cracks coming through that could put a dent to some of these earnings expectations.” In premarket trading, US-listed Chinese stocks tumbled, dragged lower by major internet and EV names including Alibaba, Baidu and Li Auto, which closed down more than 11%; search company Baidu was 12% lower while food delivery firm Meituan tanked more than 14%. The moves come after Chinese President Xi Jinping paved the way for an unprecedented third term as leader and packed the Politburo standing committee with loyalists. Tesla shares dropped after the company cut prices in China, reversing hikes imposed earlier this year.US stock futures steadied after Friday’s rally as traders assessed moves by Chinese President Xi Jinping to tighten his grip on the nation’s leadership. Other notable premarket movers: US-listed Macau casino stocks are also down, declining along with Chinese ADRs. Las Vegas Sands (LVS US) -7.9%, Wynn Resorts (WYNN US) -6.8%, Melco Resorts (MLCO US) -8.6% FedEx (FDX US) declines 1.9% in premarket trading after it was cut to equal-weight from overweight at Wells Fargo on concern that the revenue implications are not yet “fully captured” as the company pivots from growth and toward efficiency. Keep an eye on Williams-Sonoma (WSM US) stock as it was downgraded to underperform from hold at Jefferies, with broker saying it sees the home furnishing store operator underperforming ahead of a softer macroeconomic environment. Watch NXP Semiconductors (NXPI US) and Analog Devices (ADI US) shares as they were downgraded at Barclays, with the brokerage saying it expects cuts in the analog chip sector in the coming year and recommended “rotating out of the sub-sector sooner rather than later.” US investors have begun looking beyond the Federal Reserve’s ongoing tightening to a stage when it may begin to slow rate hikes. St. Louis Fed President James Bullard and his San Francisco counterpart Mary Daly made it clear they expect discussion at the November meeting to include debate on how high to raise rates and when to ease the pace. At the same time, Morgan Stanley’s Michael Wilson expects stocks to grind higher as markets transition to expectations of falling inflation and lower interest rates. The strategist, who correctly predicted this year’s slump, sees the S&P 500 Index bouncing as much as 15% if it breaches its 200-week moving average of 3,605 points, about 4% below Friday’s close. A similar view is held by Stifel Nicolaus & Co. strategists, who said in a separate note they see the benchmark rallying to 4,300 points in the next 6 months. "With the back end of the bond market offering real value for the first time since early 2021, rates are poised to come in," Wilson in a note on Monday. “Such a move could provide the necessary fuel for the next leg of the tactical rally in stocks until we get full capitulation on 2023 earnings estimates, something we think may take a few more months.” By contrast, Goldman Sachs Inc. strategists led by David Kostin are more cautious, seeing rising rates and slowing US growth hurting cyclicals and tech stocks. They recommend being overweight defensive sectors, as well as energy. In Europe, the Stoxx Europe 600 Index held an advance of about 1.3%. Media, utilities and travel are the strongest-performing sectors in Europe while miners and energy lag. IBEX outperforms peers, adding 0.9%, FTSE 100 lags, dropping 0.4% after Boris Johnson pulled out of the race to lead the UK’s ruling Conservative Party, placing Rishi Sunak closer to becoming the next prime minister.  A 12% slump in Prosus NV shares amid the China concerns pushed the technology sector into the red, while basic resources and energy stocks weighed on the benchmark amid lower commodity prices. Michelin shares rose as much as 3.7% in Paris trading and are the day’s top performers on the Stoxx 600 Automobiles & Parts Index, with the French tiremaker set to give a quarterly sales update on Tuesday. Here are the biggest European movers: Pearson shares jump as much as 7.8%, reaching the highest since January 2019, after the publishing and education company reported a 7% increase in underlying revenue in the first nine months of the year. Indivior gains as much as 7.6%, the most since February, after Morgan Stanley upgrades to overweight from equal-weight, describing the stock as a “value, growth and margin expansion story.” Auto Trader rises as much as 4.3% after announcing the disposal of Webzone Ltd. Peel Hunt upgrades to buy from hold, saying the sale shows the company’s “dedication to its key market.” Temenos climbs as much as 8.2%, the most intraday since mid-June, after Dealreporter reported that Goldman Sachs and Citi are sounding out interest in the buyout of the Swiss banking software developer. Prosus falls as much as 14% in Amsterdam and parent Naspers sinks as much as 14% in Johannesburg, with both declines the sharpest since March. Naspers holds a 28% stake in Tencent, which plunged in Hong Kong trading following President Xi Jinping’s move to stack his leadership ranks with loyalists. Galp drops as much as 6.1% after reporting third-quarter profit that missed the average analyst estimate. Philips falls as much as 4.5% to the lowest since 2011 after saying it would cut 4,000 jobs as part of a EU300 million cost-saving package, which analysts say may imply liquidity problems for the Dutch medical technology firm. Asian stocks fell, dragged by Chinese shares as President Xi Jinping’s move to tighten his leadership deepened investor worries, offsetting advances in Australia, South Korea and Japan. The MSCI Asia Pacific Index erased an earlier gain to drop as much as 1.2%, with Internet giants Tencent and Alibaba the biggest drags.  A selloff in Chinese stocks deepened in afternoon trading, as the Hang Seng plunged by more than 6%, its biggest drop since Lehman while the Hang Seng Tech Index crashed 9.7% to the lowest since February 2016, after Xi filled China’s most powerful bodies with close allies while securing a precedent-breaking third term. He installed six trusted associates alongside him on the Politburo’s supreme Standing Committee and put his former chief of staff Li Qiang in line for the premiership. Investors remained jittery as a leadership reshuffle highlighted Xi’s unquestioned grip over the ruling party, with allies set to take up key economic posts. An early loosening of Covid restrictions seemed less likely, while a set of long-delayed economic data showed a mixed recovery, further damping market sentiment. “The latest rally underlines our view that markets will remain volatile, and investors should prepare for large moves in both directions,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “Incremental improvements in inflation or labor market data, indications of economic resilience, any softening of language from the Fed, has the potential to drive a market bounce, as we have seen in recent days.” “Markets may be hoping now that the leadership transition is finalized, the focus will turn to the economy and mending the property sector,” said Marvin Chen, a strategist at Bloomberg Intelligence, adding that property investment is still a weak spot for the economy. “Still, these may take time. We may not see much change to Covid policies in the near term.” The declines in Chinese shares contrasted with the upbeat mood elsewhere in Asia, buoyed by declines in US Treasury yields and Federal Reserve officials’ indications of a potential slowing of rate hikes. Markets were closed for holidays in Singapore, India, Malaysia, Thailand and New Zealand In FX, the Bloomberg Dollar Spot Index rose, paring some of Friday’s losses and the greenback was steady or higher against all of its Group-of-10 peers. The pound jumped and gilts led Treasuries and European bonds higher as investors bet that Rishi Sunak would bring more stability to the country’s financial markets. Initial moves were however tempered, and the pound inched lower, sliding back under 1.13 after earlier rallying by as much as 0.9% to $1.1409. China’s offshore yuan led the decline in most emerging Asian currencies as traders assessed the impact of President Xi Jinping’s consolidation of power. Indonesia’s rupiah outperformed peers, supported by higher nickel prices. China’s onshore yuan weakened to a 14-year low while stocks headed for their biggest daily plunge in Hong Kong since the 2008 global financial crisis. Market setbacks following the reshuffle highlighted President Xi Jinping’s unquestioned grip over the ruling party and showed deep disappointment over a likely continuation of policies staked on Covid Zero and state- driven companies. The euro retreated after earlier rising to more than a two-week high of $0.9899. Eurozone composite PMI fell to 47.1 in October; economists had expected 47.6 The yen fell by more than 1%, to trade above 149 per dollar, after earlier surging to as much as 145.56 after suspected interventions by Japanese authorities Australian dollar declined against all of its G-10 peers after the Reserve Bank said it isn’t yet worried about the risk of imported inflation from a falling currency. Reports of fresh Covid restrictions in Guangzhou helped fuel a drop in China stocks and the yuan, pushing the Aussie even lower In rates, Treasuries trade off best levels of the session, although intermediate and long-end yields remain richer by 5bp-6bp. Gilts lead a global bond market rally, with front-end yields down nearly 40bp after Rishi Sunak emerged as the frontrunner to become new UK Prime Minister.  10-year TSY yields trade around 4.15%, richer by ~7bp on the day, trailing gilts by 18bp, bunds by 4bp in the sector; US 2s10s is ~5bp flatter on the day while gilt curve steepens. Treasuries extended their late-Friday rally during Monday’s Asia session, adding to a move sparked by comments from Fed’s Daly, who said policy makers should start planning for a reduction in the size of interest-rate increases, and a WSJ article predicting they will debate the size of future hikes in November. According to Bloomberg, dollar issuance slate includes OKB $1b 3Y and Cades 3Y; $20b of new bond sales are expected this week as companies emerge from earnings blackout periods; banks including JPMorgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc. and Bank of America Corp. could all come to market soon. Commodities were clipped as the USD rebounded and recessionary concerns mount (again); crude benchmarks are hampered on such factors, though similarly to US equity futures have recently eased off lows. Specifically, WTI and Brent benchmarks post downside of circa. USD 1.00/bbl compared to losses just shy of USD 2.00/bbl at worst. Both precious and base metals are broadly speaking under pressure; currently, Gold is impaired by circa. USD 10/oz and has been pushed back below the 10-DMA at USD 1650/oz. QatarEnergy head said the Co. is open to discussing working with Shell (SHEL LN) in all energy sectors, via Reuters. Looking at today's calendar, we get the US October PMIs, and September Chicago Fed national activity index, we also get PMI updates from Japan, UK, Germany, France and the Eurozone. Market Snapshot S&P 500 futures up 0.7% to 3,792 STOXX Europe 600 up 0.5% to 398.32 MXAP down 1.1% to 134.36 MXAPJ down 2.0% to 431.12 Nikkei up 0.3% to 26,974.90 Topix up 0.3% to 1,887.19 Hang Seng Index down 6.4% to 15,180.69 Shanghai Composite down 2.0% to 2,977.56 Sensex up 0.2% to 59,307.15 Australia S&P/ASX 200 up 1.5% to 6,779.36 Kospi up 1.0% to 2,236.16 German 10Y yield down 0.2% at 2.41% Euro down 0.3% to $0.9831 Brent Futures down 1.8% to $91.86/bbl Gold spot down 0.6% to $1,647.67 U.S. Dollar Index up 0.25% to 112.29 Top Overnight News from Bloomberg A sense of exasperation swept across Chinese markets as President Xi Jinping moved to stack his leadership ranks with loyalists, with stocks capping their worst day in Hong Kong since the 2008 global financial crisis and the yuan weakening to a 14-year low The ECB is priming another hefty hike in interest rates this week as the attention increasingly switches to how high it will eventually push Japan’s government will set out its expectation that the central bank watches the impact of moves in financial markets while emphasizing the two sides’ cooperation on policy, according to a draft of an upcoming stimulus plan obtained by Bloomberg Most of Japan’s currency intervention, confirmed and suspected, took place outside of regular trading hours, with the exception of probable action Monday -- unlike moves in 2010 and 2011 to weaken the yen. In contrast to that period, the government has only stated it intervened once, with the reluctance to do so seen as an additional tool to deter speculators Much of continental Europe is poised for an unusually warm end to the month, with Paris seeing temperatures more common on a summer day than well into the heating season A more detailed look at global markets courtesy of Newsquawk Asia-Pacififc stocks traded mixed after the initial optimism from Wall Street on Friday began to fade. ASX 200 was boosted by its commodities sector as the rise in underlying metals supported mining names in the region. Nikkei 225 was also  firmer but lagged behind peers (ex-China) following the touted FX intervention on Friday and again on Monday. KOSPI was led by gains in its IT names, but the region felt some jitters following an exchange of fire between North and South Korea after a North Korean boat crossed the South Korean maritime border. Shanghai Comp. initially traded flat after Chinese President Xi secured an unprecedented third term as the party leader, as expected. Chinese President Xi also suggested China's economy has high resilience and sufficient potential. The index also saw some brief upside after China released a myriad of delayed economic data, with Q3 GDP Y/Y topping forecasts and Trade Balance printing a larger surplus than expected, whilst exports also increased more than forecast, although these gains pared back. Hang Seng buckled as Xi’s leadership overhaul could prove to result in prolonged oversight and less autonomy for Hong Kong, with the Hang Seng Tech Index slumping over 5% and Alibaba, Tencent, JD.com, Baidu and Meituan shedding as much as 7-10%. Asia Data Recap Chinese GDP (Q3) Y/Y 3.9% (Exp. 3.3%, Prev. 0.4%); Q/Q 3.9% (Exp. 3.5%, Prev. -2.6%) Chinese Trade Balance (Sep) (USD) Y/Y 84.7bln (Exp. 80.3bln, Prev. 79.39B); Exports +5.7% (Exp. +4.0%, Prev. 7.1%), Imports +0.3% (Exp. 1.0%, Prev. 0.3%) Chinese Retail Sales (Sep) Y/Y 2.5% (Exp. 3.0%, Prev. 5.4%); YTD Y/Y 0.7% (Exp. 0.9%, Prev. 0.5%) Chinese Industrial Output (Sep) Y/Y 6.3% (Exp. 4.8%, Prev. 4.2%); YTD Y/Y 3.9% (Exp. 3.7%, Prev. 3.6%) Chinese Fixed Investments (Jan-Sep) 5.9% (Exp. 6.0%) Australian Composite PMI (Oct) 49.6 (Prev. 50.9); Services PMI (Oct) 49.0 (Prev. 50.6); Manufacturing PMI (Oct) 52.8 (Prev. 53.5) Japanese Jibun Manufacturing PMI (Oct) 50.7 (Prev. 50.8); Services PMI (Oct) 53.0 (Prev. 52.2); Composite PMI (Oct) 51.7 (Prev. 51.0) Top Asian News China suspended in-person schooling and dining-in at restaurants in a district in Guangzhou, "stoking concerns about the potential for disruption in the southern Chinese manufacturing hub that’s home to about 19mln people", Bloomberg reported. PBoC injected CNY 10bln via 7-day reverse repos at a maintained rate 2.00% for a daily injection of CNY 8bln. Japan's Top Currency Diplomat Kanda will not comment on whether they intervened in FX markets and said there is no change in stance that "we are ready to take action 24/7" and will continue to take appropriate action, via Reuters. Japan's Top Currency Diplomat Kanda offered no comments on intervention on Monday morning. Japanese Finance Minister Suzuki said no comment on FX intervention; currently trying to confront speculators; monitoring FX with a high sense of urgency. USD/JPY drop on Monday likely due to intervention, according to market participants cited by Reuters. Japanese government urges the BoJ to remain vigilant to the impact of sharp market moves, according to a draft document cited by Reuters. The Japanese government and the BoJ decided to intervene in FX on Friday by buying the Yen and selling the Dollar, according to Nikkei sources citing sources. Japan's FX intervention on October 21st is estimated at JPY 5.4-5.5tln, according to market sources and calculations cited by Reuters. BoJ Governor Kuroda said CPI growth beyond next FY likely to fall below 2%, will continue to put all effort into achieving price target along with rise in wages. Japanese gov't expects the BoJ to watch the impact of market moves, via Bloomberg citing a document; to collaborate closely with the BoJ on the policy mix; Finance Minister will not comment on FX intervention. Japan is to ease rules in relation to brokerages offering investment advice, according to reports citing Nikkei. Japanese Economy Minister Yamagiwa is planning to step down, according to NHK. South Korea is to expand its corporate-bond buying program, according to the finance minister cited by Reuters. RBA's Kent reiterated the Board expects to increase interest rates further in the period ahead; size and timing of rate increases in Australia will depend on incoming data. European bourses are mixed, though are well off lows, as initial strength faded following the open amid renewed USD strength and as PMIs flash ongoing recessionary/inflationary concerns. Sectors are a touch mixed amid the above action, Energy remains the standout laggard amid the complex's broader price action. US futures have managed to make their way back to being essentially unchanged on the session, as the initial bout of underperformance eases as US participants enter the fray pre-PMIs. Top European News UK's Boris Johnson has pulled out of the Conservative Party leadership contest, according to The Times' Swinford. UK's Boris Johnson and Rishi Sunak failed to strike a deal in talks on Saturday, according to the Times. UK leadership candidate Rishi Sunak so far received support from 147 MPs vs 24 for Penny Mordaunt. The deadline to reach the 100 threshold is at 14:00BST/09:00EDT on Monday. UK leadership candidate Penny Mordaunt will stay in the race as she reportedly sees a route to 100 nominations now Boris Johnson is out, according to sources cited by Bloomberg's Wickham. UK Chancellor Hunt backs Rishi Sunak for PM, via The Telegraph. UK Chancellor Hunt is said to be mulling up to GBP 20bln of tax rises in the October 31st budget, according to The Telegraph. The October 31st fiscal statement could be delayed after PM Truss' resignation, according to the FT. UK Chancellor Hunt is expected to extend the current freeze in income tax and allowances into the next parliament, according to FT citing sources. BoE's Mann said bond purchases for financial stability were targeted and temporary, and the start of bond selling on Nov 1st shows the BoE does not feel like its hands are tied. Mann said it is the BoE's job to address financial stability risks. Moody's affirmed UK's rating at Aa3; revised outlook to "Negative" from "Stable. FX Dollar regroups after Friday's reversal on less hawkish Fed dynamic and reports of Japanese intervention, DXY above 112.500 at best vs 111.760 low. Sterling underpinned ahead of deadline in race to be next UK PM with Sunak hot favourite to succeed, Cable holding within 1.1400-1.1300 range. Yen reverses from peaks as official buying momentum wanes, USD/JPY up to 149.70 from sub-145.50 at one stage. Aussie underperforms ahead of Budget that is expected to see growth forecast downgraded, AUD/USD under 0.6300 and Kiwi down in sympathy on NZ Labour Day as NZD/USD declines through 0.5700. Offshore Yuan below 7.3000 vs Buck as China tightens COVID restrictions in key southern manufacturing hub. Euro fades from a fraction below 0.9900 towards 0.9800 after broadly weak PMIs and amidst heavy option expiry interest. PBoC set USD/CNY mid-point at 7.1230 vs exp. 7.1173 (prev. 7.1186); weakest fix since June 1st 2020. Commodities Commodities clipped as the USD regains poise and recessionary concerns mount; crude benchmarks are hampered on such factors, though similarly to US equity futures have recently eased off lows. Specifically, WTI and Brent benchmarks post downside of circa. USD 1.00/bbl compared to losses just shy of USD 2.00/bbl at worst. Both precious and base metals are broadly speaking under pressure; currently, Gold is impaired by circa. USD 10/oz and has been pushed back below the 10-DMA at USD 1650/oz. QatarEnergy head said the Co. is open to discussing working with Shell (SHEL LN) in all energy sectors, via Reuters. China sold 100% of wheat offered at auction of state reserves on Oct 19th, according to Reuters citing the traded centre; sold at an average price of CNY 2,829/t. CCP National Congress Chinese President Xi secured an unprecedented third term as Chinese Communist Party (CCP) leader, as expected. The CCP amended its constitution to include "two establishes" and "two safeguards" to "cement" Xi Jinping's status as the core of the party, according to Reuters. Chinese President Xi is to head the communist party's central commission for discipline inspection, according to state media. The new CCP Politburo Standing Committee includes Li Qang, Li Xi, Ding Xuexiang, Cai Qi, Zhao Leji, Wang Huning, according to state media. The new Central Committee (comprising of 171 alternate members) does not include Liu He, Han Zheng, Sun Chunlan, Yi Gang, Guo Shuoing, Chinese President Xi said China's economy has high resilience, sufficient potential and has room for manoeuvre. Xi said China will open its doors even wider. Xi said China must ensure the CCP continues to be the backbone people can lean on, according to state media. Geopolitics Russian Defence Minister held phone calls with the US Pentagon Chief, UK Defence Minister, and the French Armed Forces Minister, according to Interfax and Reuters. French Armed Forces Minister has confirmed Russian Defence Minister told him Russia fears that Ukraine may use a "dirty bomb" on Russian territory. Russia's Shoigu warns of 'uncontrolled escalation' in Ukraine conflict, via Reuters. Ukraine's Foreign Minister spoke with US Defence Secretary Blinken and said they both agreed the Russian rhetoric on "dirty bombs" is aimed at creating a pretext for a false flag operation. They also discussed further practical steps to boost Ukraine’s air defense. Russian forces continued to target Ukraine's energy and military infrastructure over the weekend, according to the Russia Defence Ministry cited by Interfax. Russian authorities said two pilots died in a military plane crash into a residential building in Irkutsk, Russia, according to Interfax. Russian Deputy Foreign Minister said Russia completely reject any demilitarized zones in the vicinity of the Zaporozhye station, Via Al Jazeera. Russia continues to use Iranian uncrewed aerial vehicles (UAVs) against targets throughout Ukraine, according to the UK Ministry of Defence. US Event Calendar 08:30: Sept. Chicago Fed Nat Activity Index, est. -0.10, prior 0 09:45: Oct. S&P Global US Manufacturing PM, est. 51.0, prior 52.0 09:45: Oct. S&P Global US Composite PMI, est. 49.2, prior 49.5 09:45: Oct. S&P Global US Services PMI, est. 49.5, prior 49.3 DB's Jim Reid concludes the overnight wrap Morning from the middle of a forest in Center Parcs. We’ve had a biblical amount of rain, flash flooding in the resort and a weekend of over excitable children. We’re off to a safari park today where monkeys jump on your car. Only 24 hours before I can escape on a plane to New York. As we start a new week where we’re now in the Fed blackout period ahead of next week’s FOMC, we’re perhaps starting the 6th attempt this year at the Fed pivot trade. This only started on Friday as well-connected Nick Timiraos (WSJ) suggested that while a 75bps hike at the Fed’s next meeting was set to go ahead, officials were also likely to discuss “whether and how to signal plans to approve a smaller increase in December.” Whether this gets any further than the previous failed attempts to reprice markets only time will tell but with markets pricing in a terminal rate of over 5% prior to this, at least this is the first one that starts from anything vaguely resembling a realistic starting point given where inflation is. San Fran Fed President Daly also said on Friday that the Fed should start planning for a shift down in the pace of hikes but added that they are not there yet. The news helped price -8.0bps less Fed tightening by year-end on Friday, whilst also triggering a significant one-day decline in the 2yr Treasury yield of -13.8bps (-16bps post Timiraos). In turn the S&P 500 completed its strongest weekly performance since June, advancing +4.74% (+2.37% Friday). Futures are +0.3% this morning. The longer end rallied 12bps off the highs but was only -1.2bps on Friday as the same article discussed how the Fed could also signal a higher dot plot for 2023. Net net this left the biggest curve steepening since the pandemic (-12.2bps) which given that its not a huge move shows how massively flatter the curve has been since then. This morning in Asia 2 and 10yr yields are -4.3bps and -6.7bps lower respectively and this continuing the momentum from Friday. In the cold light of day (and it’s cold and dark in the forests of Center Parcs this morning), these more dovish stories are all plausible but between next week’s FOMC and the December equivalent we have CPI and NFP twice. So plenty of cold or hot water to flow under the bridge before then. On balance there are few signs at the moment that core inflation is about to see a rapid about turn and the Fed will be data dependent so it'll be impossible to have high conviction on what they do next without a strong view on the data. Before we examine the week ahead we should note that overall the 10yr yield ended last week up by +19.8bps (-1.2bps Friday), which marked its 12th consecutive weekly rise, and is also its longest run since 1984 when Paul Volcker was Fed Chair. So we need to put things into some perspective. In light of all this maybe the most interesting data this week comes on Friday with the Q3 employment cost index (DB at +1.1% vs. +1.3% last month) and the September personal income (+0.1% vs. +0.3%) and consumption (+0.3% vs. +0.4%) report, including the core PCE deflator (+0.58% vs. +0.56%). With respect to core PCE, our economists expect the Fed's preferred measure of inflation to rise by 40bps to 5.3%. Our economists highlight that as the median forecast for 2022 core PCE inflation in the Fed's Summary of Economic Projections from the September 21st meeting was 4.5%, it’s going to be tough to signal a downshift in December. Elsewhere this week the main highlights are the ECB (Thursday) and the BoJ (Friday) decisions and a huge round of earnings with big Tech the highlight. We’ll also have a new UK Prime Minister by Friday with a possibility we may have one after today’s ultra compressed rounds of Parliamentary votes. After Boris Johnson pulled out late last night it is possible that only tactical voting will stop ex-Chancellor Sunak being declared PM tonight. We’ll also see US Q3 GDP (Thursday) and flash PMIs in the US and Europe (today) and October CPIs and GDP for many European countries (Friday). There are other data which are in the day by day guide at the end as usual for a Monday but let’s take a brief look at the highlights outside the already discussed PCE. The ECB's decision on Thursday will be a big event with our European economists expecting another +75bps hike (72.3bp priced in), followed by +75bps in December (c.62bps priced in), +50bps in February (c.38bps priced), and +25bps in March, reaching a terminal rate of 3%. The press conference as ever will be a focal point and there’ll be lots of attention on technical things surrounding TLTROs and excess reserves. For more on the options here see our fixed income strategists blog from Friday here. Staying with central banks, over in Japan, the BoJ announces its decision on Friday amidst continued downward pressure on the yen, which hit a 32-year low against the dollar of 151.95 on Friday before surging again to end the week at 147.65 - c.3.5% swing while the Japanese slept after Nikkei reported fresh intervention from the Japanese authorities. The Yen has again seen a wild session in Asia. After falling again to 149.67 it surged to 145.65 and now trades at 148.88 as we go to press with no clarity on if and what intervention has been done. For US Q3 GDP this week, our US economists expect real growth to rebound to +3.0% from Q2's -0.6%. Q3 GDP figures will also be out for European countries on Friday, including for Germany and France with the former likely to be slightly negative and the latter slightly positive. Overall it’s likely to be the start of growth grinding towards or below zero and then staying negative for a few quarters. On European CPI on Friday remember September readings saw Germany's CPI reaching 10% for the first time since 1950. Earnings will come thick and fast this week, featuring the big tech, oil majors and key automakers and staples. In tech alone we have Microsoft, Alphabet (tomorrow), Meta (Wednesday) and Apple and Amazon (Thursday). A huge slug (20% by market cap) of the S&P 500 in 48 hours. Other notable tech firms reporting results will include Intel, Twitter, SAP and Samsung. The other main reporters are in the day by day week ahead at the end. Asian markets are higher outside of China/HK this morning with the Nikkei (+0.62%) and the KOSPI (+0.87%) up but with the Hang Seng (-4.99%) and the Shanghai composite (-0.89%) lower as markets worry about the policy direction of travel after the ending of the 20th Party Congress. We've also finally seen the monthly data dump out of China and despite a beat on Q3 GDP (+3.9% vs +3.3% expected) and industrial production (+6.3% vs 4.8%), we saw weaker retail sales (+2.5% vs +3.0%) and jobless rate (5.5% vs 5.2%). Looking back to last week, we've already discussed the US rates and equities pricing at the top. Over in Europe, gilts outperformed other sovereign bonds over the week as a whole thanks to the government’s Monday U-turn on the mini-budget. However, they became a major underperformer again on Friday as investors contemplated the likelihood that former Prime Minister Johnson could return to office. All-in-all that left 10yr yields down -28.2bps over the week (+14.1bps Friday), and after the close we heard that Moody’s had affirmed the UK’s credit rating but cut the outlook to negative. Elsewhere in Europe though there was a similar pattern to Treasuries, with 10yr bund yields also rising for a 12th week in a row with a +7.0bps gain over the week (+1.4bps Friday). At the same time, the STOXX 600 put in its best week since July, with a +1.27% advance (-0.62% Friday). Finally last week, European natural gas futures fell -20.02% (-10.67% Friday) to €114 per megawatt-hour after EU leaders endorsed a plan to cap gas prices. Tyler Durden Mon, 10/24/2022 - 08:12.....»»

Category: smallbizSource: nytOct 24th, 2022

Futures Green After Bouncing From Session Lows As Overnight Swings Turn Violent

Futures Green After Bouncing From Session Lows As Overnight Swings Turn Violent US equity-index futures have swung wildly in the illiquid, overnight session, and after earlier dropping as much as 0.5% following the rapid move higher in US Treasurys and UK gilts, they have since erased all losses to trade near session highs, up 0.3% with Nasdaq futures also up 0.2%, as investors the surge in yields fizzled and as investors assessed disappointing earnings from Tesla against resilient reports from AT&T and IBM. Oil jumped, Chinese stocks spiked (but then fizzled) and both the offshore and onshore yuan rose after a Bloomberg report sparked market optimism that Chinese officials are mulling shortening the amount of time people coming into the country must spend in mandatory quarantine, an implicit tempering of the country's much maligned coved zero policies. The US dollar slumped as sterling spiked as UK Prime Minister Liz Truss began meetings with a key Conservative party official, stoking speculation that a change in leadership may be afoot. US 10-year yield holds steady at about 4.12%. In other notable overnight developments, Hong Kong's Hang Seng index tumbled to the lowest level since 2009 amid continued liquidations and outflows from China... ... while the yen finally weakened past the closely watched 150 per dollar level, marking a 32-year low and keeping investors on high alert for further intervention to support it. And sure enough, the BOJ promptly jumped in sparking a big move lower in the pair. The move followed a surge in US Treasury yields to multi-year highs that widened the gap with Japanese equivalents. In premarket trading, bank stocks were mostly higher following their worst day in more than a month. In corporate news, the world’s biggest banks have already had to use about $30 billion of their own cash this year to fund loans for acquisitions and buyouts that they weren’t able to offload to investors. US-listed Chinese stocks bounced in premarket trading, a day after Wednesday’s selloff sent the Nasdaq Golden Dragon China Index down to its lowest closing level since July 2013. The KraneShares CSI China Internet Fund ETF rises 2.1% as of 7:20 a.m. in New York. Here are the other notable premarket movers: Tesla (TSLA US) falls 5.5% in premarket trading after the world’s most valuable automaker missed third-quarter revenue estimates as it struggled to get its cars to customers. Fellow EV firms lower in premarket trading include: Nikola (NKLA US) -2%, Faraday Future (FFIE US) -2%, Rivian (RIVN US) -1.8%, Canoo (GOEV US) -0.7% Alcoa (AA US) drops 9.3% in premarket trading after the aluminum giant reported worse-than-expected results for the third quarter, putting pressure on its global peers. International Business Machines (IBM US) shares rise 3.1% in premarket trading after the IT services company reported third-quarter revenue that beat expectations. Ally Financial (ALLY US) shares drop 2.5% in premarket trading as Morgan Stanley downgraded the car-finance company to equal-weight from overweight following Wednesday’s third-quarter results. Sunrun (RUN US) shares slump 4.1% in premarket trading after Wolfe downgrades the stock in a note to peer perform, citing headwinds from a rising interest-rate environment. Las Vegas Sands (LVS US) shares rise 1% in US premarket trading after posting better- than-expected 3Q adjusted property Ebitda. That was driven by a solid performance in Singapore while uncertainty remains around Macau. US stocks slipped on Wednesday after a two-day rally saw the S&P 500 reclaim $1.2 trillion in market capitalization amid support from technical levels and optimism about earnings. Higher bond yields and Tesla’s sobering report provided reminders of the tough macroeconomic backdrop as costs for companies remain high and the Federal Reserve pushes forward with interest rate hikes. “We continue to see plenty of macroeconomic headwinds,” said Marija Veitmane, a senior strategist at State Street Global Markets. “As central banks tighten financial conditions, earnings will crack. So we are very much in the sell-the-rally camp.” Investors continue to closely monitor events in the UK where Liz Truss’s chaotic premiership looked close to imploding as backbench Conservative lawmakers openly said she should resign and even Cabinet ministers discussed her future. The pound weakened and 10-year UK bond yields climbed, but were off their highs. A generally strong start to the third-quarter earnings season has bolstered sentiment toward equities. But investors are having to balance signs of corporate resilience against fears about the impact of persistent inflation, hawkish moves by the Federal Reserve and other central banks and threats to the economy. “I think the market now is looking at 2023 and baking some kind of mild downturn into the price,” Hugh Gimber, global market strategist at JPMorgan Asset Management, said on Bloomberg Television. “The key is that inflation number coming down, because if it does, 5% for the Fed looks to me roughly as the right figure and then the market can have a clearer picture.” In Europe, the Stoxx 50 fell 0.5% with Spain's IBEX flat but outperforming peers; the DAX lags, retreating 0.8%. Telecoms, financial services and retailers are the worst-performing sectors. Oil and gas shares are the only rising sector in Stoxx Europe 600 index on Thursday as crude extended gains amid a report that China debates easing some Covid restrictions, while European gas advanced after a five-day losing run. The Stoxx Energy sub-index advanced 1.3% as of 10:45 a.m. in London, while the broader equity benchmark declined 0.5%. Here are some of the biggest European movers today: Oil and gas shares are the only rising sector in Stoxx Europe 600 index on Thursday as crude extended gains amid a report that China is debating easing some Covid restrictions, while European gas advanced after a five-day losing run. BP gained 1.5%, Shell +1.4% and TotalEnergies +1.5% Saipem soars as much as 13% in Milan, the most intraday since July 14, after winning a $4.5 billion engineering and construction contract from Qatargas. Jefferies upgraded the stock to buy after the “material” award Yara shares gain as much as 7.2% after fertilizer maker’s 3Q adjusted Ebitda beat analyst estimates and was seen as very strong in an uncertain quarter. Declining gas prices are also pointing toward restarting fertilizer capacity in Europe as demand is rising Brunello Cucinelli shares soar as much as 11.5%, the most since March, after it delivered a significant beat in its 3Q results as well as a major uptick in FY guidance Nokia shares fall as much as 6.8% after a mixed set of results, with sales beating consensus estimates while profit and margin lagged. The bottom-line was dragged down by the network equipment maker’s Technologies segment, which continued to be hobbled by a delay in patent contract renewals Ericsson shares slide as much as 16%, the most since Oct. 2016, after reporting third-quarter operating profit and margin that missed analyst estimates. While the Swedish telecom equipment maker pledges to change pricing and cut costs, analysts still see margin pressure persisting into the next year Volvo shares fall as much as 5.9% in Stockholm trading, the most intraday since May 2, as analysts highlight that focus for 3Q results is on the weaker Truck division margin, which is driving a miss at Ebit level GB Group shares plummet as much as 20%, hitting the lowest since September 2017, after identity verification company published a first-half trading update. Davy said the revenue was below consensus expectations Earlier in the session, Asian equities headed for a second day of declines, as the recent selloff in Hong Kong shares deepened amid investor concerns on China’s zero-Covid approach. The MSCI Asia Pacific Index dropped as much as 1.6%, as tech shares faced fresh losses after bond yields spiked overnight. The gauge pared some of its earlier losses after a report that Chinese authorities were considering a shorter quarantine for inbound travelers. Hong Kong led declines in the region, with its benchmark falling to the lowest since 2009 as Chief Executive John Lee’s maiden policy speech left investors disappointed. Traders remained concerned about consumer demand in China amid lockdowns and rising Covid cases, as well as the spillover into earnings for the region.  “History suggests it is hard for stocks to rally in the face of EPS cuts,” said Stephen Innes, managing partner at SPI Asset Management in a note. “While stock prices should trough before EPS estimates bottom, there is still a lot of wood to chop.” Benchmarks in Taiwan, South Korea and Australia also fell, with the latter extending declines after government data showed that Australian hiring almost stalled in September. Japan’s gauges slid even as the yen weakened past the closely-watched 150 per dollar. Indexes in Indonesia and Malaysia defied the broader gloom to gain more than 1%. The Hang Seng Tech index has now tumbled more than 70% from its Jan 2021 high. China’s possible cut in quarantine period for inbound travelers is a small step in the right direction but a lot more is needed to lift investor sentiment dented by the country’s Covid Zero policy.  US futures pared losses after the Bloomberg report on the news. The offshore yuan briefly gained as much as 0.5% to 7.2353 against the dollar. According to Amir Anvarzadeh, a strategist at Asymmetric Advisors: “A cut to quarantine rules for inbound travelers will not be enough for the Chinese market to rebound” Japanese stocks slid as investors refocused on the impact of higher US interest rates and a looming global recession after a two-day rally. The Topix fell 0.5% to close at 1,895.41, while the Nikkei declined 0.9% to 27,006.96. Hoya Corp. contributed the most to the Topix decline, decreasing 3.5%. Out of 2,166 stocks in the index, 596 rose and 1,454 fell, while 116 were unchanged. Australian stocks declined with global growth fears in focus; the S&P/ASX 200 index fell 1% to 6,730.70, in step with most markets in Asia and on Wall Street amid worries of a global slowdown. Miners contributed the most to the gauge’s retreat as investors weighed quarterly production reports. They also assessed jobs data that suggest the RBA will continue to slow the pace of interest rate increases. In New Zealand, the S&P/NZX 50 index fell 0.8% to 10,832.03. Key Indian stock gauges gained for a fifth straight day, their longest run of advances in two months, before a key festival next week and as robust corporate earnings boost investor sentiment. The S&P BSE Sensex gained 0.2% to 59,202.90 in Mumbai, while the NSE Nifty 50 Index advanced 0.3%. The indexes overcame decline of as much as 0.5% as weekly derivative contracts expired Thursday. The key benchmarks have risen more than 2% this week and were trading near their highest level since Sept. 21. Twelve of 19 sector sub-gauges compiled by BSE Ltd. advanced, led by oil & gas companies while consumer durables were the worst performers. For the week, information technology stocks are the best performers, helped by stronger-than-expected earnings. Out of 11 Nifty 50 companies, which have so far reported earnings, eight have either met or exceeded average estimates, while three have trailed. Asian Paints’ quarterly results trailed estimates, dragged by weaker revenue growth and rising costs, while Bajaj Finance’s numbers matched consensus In rates, 10-year TSY yields trade near session lows at around 4.12%, richer by 1bp on the day after earlier rising 5bps to 4.17% while German 10-year yield rises 5.5bps to 2.43%. Treasuries pared losses in the early US session, rising with gilts which stretch to fresh session highs and outperform on the day as Bank of England Deputy Governor Ben Broadbent says UK rates may not rise as much as markets foresee. Gilts outperformed by 4bp while bunds lag Treasuries by 2bp; belly outperformance tightens 2s5s30s fly by 4bp on the day. Dollar issuance slate empty so far and expected to be light; Wednesday saw three borrowers price $6.5b. Three-month dollar Libor +4.70bp at 4.32457% In FX, the Bloomberg Dollar Spot Index hovered as the greenback traded mixed against its Group-of-10 peers, though most pairs consolidated recent moves. Treasury yields rose by as much as 2bps, led by the short end. The euro erased a modest loss to near $0.98. Bunds fell for a third session as traders continued to digest Wednesday’s unexpected German Finance Agency decision to increase its own securities holdings for repo purposes, with schatz swap spreads narrowing for a sixth day, the longest streak since December UK bonds pared an earlier loss and traders cut bets on BOE tightening after Deputy Governor Ben Broadbent said it’s not clear that UK interest rates need to rise as much as the market expects. The pound fell below $1.12 as Liz Truss’s premiership looks close to imploding after she fired one minister over a security breach and two others were heard resigning amid the fallout from a chaotic parliamentary vote before agreeing to stay in their posts The yen fluctuated in a tight range, and briefly rose above 150 per dollar. Japanese Finance Minister Shunichi Suzuki said excessive and sudden moves in the foreign exchange market triggered by speculation can’t be tolerated. Japan’s benchmark yield climbed above the central bank’s policy ceiling and monetary authorities announced unscheduled bond purchases to rein it back in. Demand for long gamma in dollar-yen gains traction as spot breaches the psychologically-key 150 level Australia’s dollar slid as much as 0.7% amid a weak jobs print, before reversing following a report that Chinese officials were debating whether to shorten quarantine for inbound travelers. Bonds fell. Australia’s employment rose by just 923 people in September, below the forecast of 25,000, government data showed In commodities, WTI and Brent December contracts are firmer intraday with the former around USD 86/bbl (84.49-86.27 range) whilst the latter resides around USD 93.50/bbl (91.95-93.92 range). The crude complex is buoyed by the pullback in the Dollar after receiving a boost from source reports that China is considering easing its COVID rules for travellers. Spot gold sees some support from the DXY remaining under 113.00, although remains well off recent highs, with the yellow metal still around the USD 1,630/oz mark (vs yesterday’s 1,654.50/oz high). LME metals are mixed but 3M copper receives a boost from the Buck alongside the aforementioned China source reports, but the red metal remains under USD 7,500/t. Overall, Bitcoin is contained and essentially unchanged on the session around USD 19.1k with specific updates relatively limited and participants focused on broader market action. To the day ahead now, and data releases from the US include the weekly initial jobless claims and existing home sales for September, whilst in Germany there’s the PPI reading for September. Central bank speakers include the Fed’s Harker, Jefferson, Cook and Bowman, the ECB’s de Cos and BoE Deputy Governor Broadbent. Earnings releases include Danaher, Philip Morris International, Union Pacific, AT&T and Blackstone. Finally, EU leaders will gather for a summit in Brussels. Market Snapshot S&P 500 futures down 0.5% to 3,690.25 MXAP down 0.8% to 136.26 MXAPJ down 0.9% to 440.36 Nikkei down 0.9% to 27,006.96 Topix down 0.5% to 1,895.41 Hang Seng Index down 1.4% to 16,280.22 Shanghai Composite down 0.3% to 3,035.05 Sensex down 0.3% to 58,948.91 Australia S&P/ASX 200 down 1.0% to 6,730.73 Kospi down 0.9% to 2,218.09 STOXX Europe 600 down 0.5% to 395.57 German 10Y yield up 3% to 2.45% Euro little changed at $0.9777 Brent Futures up 0.9% to $93.26/bbl Gold spot little changed at $1,630.01 U.S. Dollar Index down -0.1% at 112.86 Top Overnight News from Bloomberg Giorgia Meloni, the right-wing leader poised to form a new Italian government, said she’d give up on the fledgling coalition if her allies can’t commit to supporting Ukraine along with Italy’s European Union and NATO partners France’s Economy & Finance minister Bruno Le Maire targets inflation of 4% by the end of 2023, AFP reports, stressing these are “objectives, not forecasts” Turkey’s central bank is poised to take another step toward cutting interest rates into single digits this year, a gamble masterminded by President Recep Tayyip Erdogan to power economic growth ahead of elections next June German Chancellor Olaf Scholz warned that a proposal to introduce a European Union-wide cap on gas prices could backfire as the region seeks to offset a drastic supply cut from Russia. A more detailed look at global markets courtesy of Newquawk Asia-Pacific stocks were pressured following the weak handover from Wall Street owing to the higher yield environment and as global inflationary headwinds offset the recent earnings momentum. ASX 200 was led lower by the underperformance in tech and following disappointing jobs data, although the energy sector bucked the trend after gains in oil prices and strong quarterly output updates from Woodside Energy and Santos. Nikkei 225 briefly fell beneath 27,000 with participants on intervention watch, while stronger-than-expected Exports and Imports failed to spur risk appetite as the data also contributed to a record trade deficit for the fiscal first half. Hang Seng and Shanghai Comp. declined from the open with the former on course for its lowest close since 2009 amid heavy losses in tech and with the mainland also downbeat after the lack of surprises from the PBoC which maintained its benchmark lending rates unchanged as widely expected, although news of China mulling shortening its quarantine eventually lifted the Shanghai Comp into the green. Top Asian News PBoC 1-Year Loan Prime Rate (Oct) 3.65% vs. Exp. 3.65% (Prev. 3.65%); 5-Year Loan Prime Rate (Oct) 4.30% vs. Exp. 4.30% (Prev. 4.30%) China reportedly held emergency talks with chip firms after US curbs, according to Bloomberg. China is reportedly mulling cutting inbound quarantine to 7 days from 10 days which will be presented to the top leaders, according to Bloomberg. Indonesian 7-Day Reverse Repo (Oct) 4.75% vs. Exp. 4.75% (Prev. 3.75%); will intervene in FX to prevent imported inflation. Japanese Finance Minister Suzuki provides no comment on FX levels; cannot tolerate speculative moves; will take action against any speculative, excessive and sudden moves, via Reuters. Japanese currency diplomat Kanda says excessive and disorderly FX moves have a negative impact on the economy, will not comment on whether Japan is intervening now or has intervened today European cash bourses trade mixed with the breadth of the market narrow (Euro Stoxx 50 -0.2%; Stoxx 600 -0.4%). Sectors in Europe are mostly negative with no overarching theme – Energy and Banks outperform amid price action in underlying crude and yields respectively. Meanwhile, Telecom names sit at the bottom of the pile as Ericsson (-14%) and Nokia (-5.3%) slide following red flags on margins. US equity futures are softer across the board but to varying degrees, with the NQ (-0.9%) lagging the ES (-0.5%) and RTY (-0.4%), with Tesla carrying a larger weight in the NDX (circa. 4.0%) than the SPX (circa. 1.8%). Tesla Inc (TSLA) - Q3 2022 (USD): Adj. EPS 1.05 (exp. 1.00), Revenue 21.45bln (exp. 21.96bln). Q3 FCF USD 3.30bln (exp. 2.89bln). Q3 Automotive gross margin +27.9% (exp. +28.4%). Tesla sees initial phase of semi deliveries begin in December 2022. Tesla still sees 50% avg. annual growth in vehicle deliveries. Raw material cost inflation impacted quarterly profitability along with ramp inefficiencies from Gigafactory Berlin-Brandenburg, Gigafactory Texas, 4680 cell production. Battery supply constraints will be main limiting factor. CEO Musk said looking forward to a record-breaking Q4 and the Co. is gaining rapid traction in 4680 cell production. -5.0% in the pre-market Top European News BoE's Broadbent says the MPC is likely to respond relatively promptly to news about fiscal policy. Remains to be seen if rates need to rise as much as currently priced in by markets, via BoE. The justification for tighter policy is clear. If government support mitigates the effect of import costs, there is more at the margin for monetary policy to do. If Bank Rate really were to reach 5.25%, the cumulative impact on GDP of the entire hiking cycle would be just under 5% - of which only around one quarter has already come through UK Tory 1922 Committee officers are expected to meet on Thursday to discuss the leadership crisis in the Tory party, according to The Telegraph's Editor. However, recent reporting indicates the Committee will not be meeting today. UK PM Truss's office noted that the Tory party's chief whip and deputy chief whip remain in their posts. ITV's Peston, citing a member of UK Cabinet, that it is clear there is a will among ministers to attempt to keep PM Truss in office until October 31st (when the budget will be announced). A view that contrasts the recent update from ITV's Brand, citing a 1922 member, that the “odds are against” PM Truss surviving the day as PM FX Pound precarious as pressure continues to build against UK PM Truss and BoE's Broadbent infers that market expectations on rates may be too hawkish, Cable pivots 1.1200 Yen slips under 150.00 mark vs Dollar as yields continue to rally, but rebounds amidst further Japanese verbal, if not actual intervention Franc remains on the backfoot due to as a funding currency, but Euro gleans traction from data and EGB/UST spread convergence, USD/CHF straddles 1.0050 and EUR/USD bounces ahead of 0.9750 to reclaim 10 and 21 DMAs Aussie labours after payrolls miss consensus by some distance and before recovery in tandem with Yuan on reports that China may relax some Covid rules for inbound travellers, AUD/USD eyes 0.6300 from sub-0.6250 and USD/CNH off peaks near 7.2800 Riksbank's Ingves, to Swedish parliament, says easing mortgage repayment rules would be inappropriate. RBI is continuing spot USD sales and receiving December forwards, according to traders cited by Reuters. Fixed Income Debt remains depressed though notably off worst levels after dovish remarks from BoE's Broadbent lifted Gilts to the mid-98.00 region. In turn, both USTs and Bunds have climbed off lows of 109.19+ and 134.86 respectively, though still post downside of circa. 3 and 50 ticks respectively. The complex looks to US data and Fed speak while BTPs await updates out of Italy as potential PM Meloni is set to begin constructing her cabinet, with particular focus on the Berlusconi's Foreign Minister nominee. Commodities WTI and Brent December contracts are firmer intraday with the former around USD 86/bbl (84.49-86.27 range) whilst the latter resides around USD 93.50/bbl (91.95-93.92 range). The crude complex is buoyed by the pullback in the Dollar after receiving a boost from source reports that China is considering easing its COVID rules for travellers. Spot gold sees some support from the DXY remaining under 113.00, although remains well off recent highs, with the yellow metal still around the USD 1,630/oz mark (vs yesterday’s 1,654.50/oz high). LME metals are mixed but 3M copper receives a boost from the Buck alongside the aforementioned China source reports, but the red metal remains under USD 7,500/t. MMG's (1208 HK) Las Bambas copper mine in Peru reportedly halted copper transportation due to protests. German Energy Regulator says potential gas emergency is now end of February at the earliest, rather than end of November which was part of the scenario analysis in the August forecast, via Reuters. Geopolitical Russia's Deputy UN envoy said Russia would reassess cooperation with the UN Secretariat if the UN chief sends experts to Ukraine to inspect downed drones and is not optimistic about the renewal of the Ukraine grain Black Sea export deal, according to Reuters. US State Department said the US, UK and France raised the issue of Iran's transfer of drones to Russia at a meeting of the UN Security Council on Wednesday, according to Reuters. US Treasury senior official travelled to Turkey this week and discussed sanctions and export controls imposed on Russia, according to Reuters. US and South Korea are conducting military drills at their fastest pace in years to show their readiness as tensions rise on the divided Korean Peninsula, according to Nikkei Asia Review. EU states have agreed on new sanctions against Iran regarding the supply of drones to Russia, according to the Czech EU presidency; to freeze assets of three individuals and one entity responsible for the drone sale. US Event Calendar 08:30: Oct. Initial Jobless Claims, est. 232,000, prior 228,000 08:30: Oct. Continuing Claims, est. 1.38m, prior 1.37m 08:30: Oct. Philadelphia Fed Business Outl, est. -5.0, prior -9.9 10:00: Sept. Existing Home Sales MoM, est. -2.1%, prior -0.4% 10:00: Sept. Home Resales with Condos, est. 4.7m, prior 4.8m 10:00: Sept. Leading Index, est. -0.3%, prior -0.3% Central Bank Speakers 12:00: Fed’s Harker Discusses the Economic Outlook 13:30: Fed’s Jefferson Makes Opening Remarks at Careers Event 13:45: Fed’s Cook Speaks on Panel at Careers Event 14:05: Fed’s Bowman Has Opening Remarks at Community Development... DB's Jim Reid concludes the overnight wrap It's half-term and unfortunately I can't completely escape my responsibilities. Tomorrow I'm off to Center Parcs for the first time for a few days. It's fair to say I'm the least excited of the five of us going. All tips on how to survive the experience welcome. I'll be broadcasting the EMR live from there on Monday morning whilst on holiday as my co-authors are both off with Tim getting married. So many congratulations to him. Since I started the EMR nearly 16 years ago I think 9 of my co-authors have got married while working on it, 10 including me. It's a publication that breeds stability and wholesome values. All are still going strong as far as I'm aware! The honeymoon rally of the last few days petered out yesterday, with Treasury yields hitting multi-year highs as investors turned their focus back to central banks and how fast they’ll hike rates. All the big central banks are deciding policy over the next couple of weeks, so it’s not surprising that’s happening, but sentiment wasn’t helped either by further inflation surprises from the UK and Canada for September, which echoed what we’d already seen from the US last week. and added to the sense that the hiking cycle will be extended. After the close, we then heard from Tesla who missed revenue estimates, sending their shares -7% lower in after hours trading. Supply chain issues continued to beleaguer the company, particularly around batteries. Nevertheless, they still forecast strong growth and Elon Musk said a meaningful share buyback was likely. For whatever it’s worth on the macro side, Musk also believes commodity prices will continue to fall. Meanwhile, in overnight trading, futures tied to the S&P 500 (-0.3%) and NASDAQ 100 (-0.6%) are pointing to further losses. However these losses have halved as I type, possibly on breaking news on Bloomberg that China is considering cutting quarantine for arrivals from abroad from 10 to 7 days. I'd imagine there are hopes the zero covid policy is loosening a bit. Back to bonds and treasury yields rose to new highs for this cycle across the yield curve, with the 10yr yield up +12.7bps at 4.13%. This morning in Asia, they are another +1.25bps higher trading at a fresh 14-yr high of just under 4.15% as I type. This comes as investors move to expect an increasingly aggressive tightening cycle from the Fed over the months ahead, with the rate priced in for the December meeting up a further +3.2bps to 4.51%. It's gone just above the previous high for this cycle of 4.52% overnight. Furthermore, the peak rate for this hiking cycle priced in for May went up by +8.6bps to 4.97%. This morning in Asia it's gone above 5% for the first time in this cycle. We heard from a few Fed officials yesterday, including Presidents Bullard, Evans, and Kashkari. President Bullard noted the Fed could yet still bring forward tightening into 2022. If policy got tight enough, he noted that 2023’s inflation profile could look better. A point often cited by those expecting a rapid improvement in inflation is the composition of certain rent measures the Fed follows presents a lagged reading, and therefore inflation is not currently as bad as they expect. Bullard directly addressed that point in his remarks and that unsurprisingly, the Fed is aware of such methodological shortcomings and takes them into account when evaluating the stance of policy. President Kashkari spoke along similar lines, noting the Fed still needed tighter policy but could wind up pausing tightening come next year. Evans struck the same tone, expressing hope that the September dot plot would prove the optimal amount of tightening, so a much slower pace of tightening next year. Regardless of the above, we still have more than 75bps priced for November at 78.1bps. As we await their next decision in just under a couple of weeks from now, there was further evidence yesterday that the Fed’s hikes were filtering their way through to the real economy, with data from the mortgage Bankers Association showing the contract rate on a 30yr fixed mortgage hit 6.94% in the week ending October 14. That’s the highest it’s been since 2002, and came as their gauge of applications to purchase or refinance a home fell a further -4.5% to its lowest level since 1997, which echoes the decline in other housing indicators we’ve seen recently. US housing starts for September were also down more than expected, hitting an annualised rate of 1.439m (vs. 1.461m expected), with the previous month’s number also revised down by -9k. On the other hand, building permits rose to an annualised rate of 1.564m (vs. 1.530m expected). For equities it was also a rough session, with the S&P 500 coming down -0.67% after having gained +3.82% over the two days at the start of the week. Netflix (+13.09%) was the top performer in the index following its earnings release the previous day, but otherwise it was a broad-based decline that saw over 76% of the index move lower. The Nasdaq underperformed, falling -0.85%, and that was before Tesla’s earnings miss after the close. The major indices lost ground in Europe too, with the Stoxx 600 (-0.53%) bringing an end to its run of 4 consecutive gains. Back in Europe, sovereign bonds also lost ground across much of the continent as we approach the ECB’s decision next week. Yields on 10yr bunds were up +9.0bps to a post-2011 high of 2.37%, which followed comments by Slovenian central bank governor Vasle that the ECB should hike by 75bps at the next two meetings in October and December. Here in the UK, gilts outperformed other European sovereign bonds for a third day running, with markets remaining calm as they looked forward to the government’s fiscal announcement on October 31. That outperformance was particularly noticeable among long-dated gilts, with yields on 30yr gilts down -31.9bps after the BoE’s announcement the previous evening that their Q4 gilt sales as part of quantitative tightening would only involve short- and medium-maturity gilts, rather than long-dated ones. To be fair though, gilts rallied right across the curve, and that came in spite of the latest UK inflation data for September, which showed CPI rising to +10.1% (vs. +10.0% expected), so back up to its level in July. In addition, core inflation continued to accelerate, hitting a 30-year high of +6.5% in September (vs. +6.4% expected). Whilst UK markets were more subdued yesterday, there was fresh turmoil on the political front as Home Secretary Suella Braverman left the government after what was reported as a security breach. In Braverman’s resignation letter, the strong implication was that Truss herself should go, saying that “The business of government relies upon people accepting responsibility for their mistakes. Pretending we haven’t made mistakes, carrying on as if everyone can’t see that we have made them, and hoping that things will magically come right is not serious politics.” A chaotic parliamentary vote late in the session won't make life any easier for PM Truss in the short-term. Back on inflation, there wasn’t much respite elsewhere, as Canadian inflation similarly surprised on the upside with a +6.9% reading in September (vs. +6.7% expected). That prompted investors to ratchet up their expectations of future rate hikes from the Bank of Canada, with another 75bp move at their meeting next week now fully priced in. That said, there was some marginally better news from the Euro Area on inflation, as the final CPI release for September was revised down a tenth to +9.9%, having come in at +10.0% on the earlier flash reading. But although that revision takes it out of double-digit territory, it’s worth noting that’s still the fastest inflation since the single currency’s formation. Asian equity markets are tumbling this morning with the Hang Seng (-2.36%) leading losses, after briefly sliding -3.0% in early trade, its lowest intraday level since 2009 due to a selloff in Chinese listed tech shares. Elsewhere the KOSPI (-1.47%) and the Nikkei (-1.11%) are also deep in the red. Mainland China’s Shanghai Composite (-0.39%) and the CSI (-0.80%) are also falling. Early morning data showed that exports in Japan advanced +28.9% y/y (v/s +26.6% expected), increasing for the 19th consecutive month in September and compared to the prior month’s +22.0% rise. This was on the back of strong demand for autos and mineral fuels. At the same time, imports surged +45.9% y/y (v/s +44.9% expected) and against a +49.9% gain in the previous month. Staying on Japan, yields on 10yr JGBs again briefly moved beyond the BoJ's upper limit of 0.25%, prompting the central bank to announce unscheduled bond buying for the first time this month to bring it back within its target range. Adding to the challenge for policy makers, the Japanese yen continues to press towards the 150 level, as it reached yet another fresh 32-yr low of 149.96 against the US dollar, thus increasing the possibility for further government intervention to support the battered currency. Separately, the People’s Bank of China (PBOC) left its benchmark lending rates unchanged for a second month, keeping the 1-yr loan prime rate at 3.65% and the 5-yr rate at 4.3%. To the day ahead now, and data releases from the US include the weekly initial jobless claims and existing home sales for September, whilst in Germany there’s the PPI reading for September. Central bank speakers include the Fed’s Harker, Jefferson, Cook and Bowman, the ECB’s de Cos and BoE Deputy Governor Broadbent. Earnings releases include Danaher, Philip Morris International, Union Pacific, AT&T and Blackstone. Finally, EU leaders will gather for a summit in Brussels. Tyler Durden Thu, 10/20/2022 - 07:49.....»»

Category: dealsSource: nytOct 20th, 2022

Crypto Goes to Washington

A clash of radically different cultures has implications for the future of the economy and technology in America To the untrained ear, Hester Peirce’s comment sounded anodyne, but everyone in the audience knew what she was doing: selling out her boss. “It’s fairly clear,” the U.S. Securities and Exchange commissioner said from the Washington conference stage, “that we’ve been taking an enforcement-first approach in an area where we should be taking a regulatory-first approach. I think we’ve got the balance wrong right now.” Peirce was speaking at the D.C. Blockchain Summit in May, to an audience of the cryptocurrency faithful. Outside the auditorium, geeks, lobbyists and investors mingled in a cavernous converted warehouse. “Trust is non-fungible,” read a banner for the accounting firm Deloitte, hung from a balcony where the company was sponsoring a lavish spread of snacks. Most attendees were done up in D.C. drag—conservative suits and dresses, more boardroom than Burning Man. [time-brightcove not-tgx=”true”] The message was clear: crypto has arrived in Washington. With more than 800 attendees, the summit was the largest ever hosted by the Chamber of Digital Commerce, a trade association representing blockchain companies. In prior years, the conference was co-sponsored with Georgetown University and had a sleepy, academic feel, with panels devoted to explaining or making the case for a technology that still seemed obscure. This year, its attendance and square footage had more than doubled from the last time it was held in 2019. “We’ve gone from ‘Is this magical internet money for real?’ to ’No question, this is definitely a thing,’” the Digital Chamber’s founder and president, Perianne Boring, proclaimed from the stage. The industry has spent the past year making a major play for D.C.’s attention and affection—a sea change for the utopian technology, with its animating vision of frictionless, borderless, intangible exchange. Bitcoin has been around for more than a decade, but until recently the rapid growth of an industry valued at $3 trillion at its peak has operated at arm’s length from the government—an arrangement that seemed to satisfy both sides. Now D.C. has moved into crypto’s territory, with regulatory crackdowns, tax proposals, and demands for compliance. And crypto has pushed into D.C.’s terrain, standing up multiple trade associations, think tanks, and political action committees and hiring hundreds of lobbyists. “The industry has gone from 0 to 100 in record time,” says one D.C. consultant who advises crypto and other tech firms and has seen business skyrocket in the past year. “Even small companies have some footprint now. The venture capital firms are stacked like cordwood with former regulators.” A collision is under way—not just the usual maneuvering between government and business, but a clash of radically different cultures. To crypto’s whiz-kid techno-futurists, the stodgy pencil-pushers of the Washington bureaucracy are nothing but a hindrance. To Washington’s straitlaced rule-makers, crypto’s wild, utopian promises are merely cover for dangerous fads and scams. The still-unknown potential of an ephemeral new technology has run up against the power of the state, and neither quite understands how the other works. How it shakes out will have major implications for the future of the economy and technology in America and the world. Right now, cryptocurrency exists in a legal gray area, scarcely mentioned in federal code. That has left financial regulators to try to interpret definitions created for ordinary markets and apply them to a nascent technology. The most prominent such dispute is over whether cryptocurrencies and related products should be categorized as securities—investments, like stocks and bonds—or commodities, interchangeable assets like oil or grain. At stake in the definition is whether crypto entities are regulated by Peirce’s agency, the SEC, or its smaller sister agency, the Commodities Futures Trading Commission (CFTC). Both agencies have asserted jurisdiction without issuing any official guidance about where they believe the lines ought to be drawn. SEC Chairman Gary Gensler has stiff-armed companies that try to ascertain their status, only to turn around and sue them for failing to comply with securities laws. This is the “enforcement-first approach” Peirce was describing, and it has drawn loud complaints and major lawsuits from the crypto industry. (Gensler, appointed by President Biden, isn’t technically the boss of Peirce, appointed by President Trump, since commissioners are independently appointed and confirmed, but he is her superior; differences of opinion are common on the bipartisan panel.) Melissa Lyttle—Bloomberg/Getty ImagesGary Gensler, chairman of the Securities and Exchange Commission, has drawn the ire of the cryptocurrency industry for his tough stance The inter-agency pissing match is the subject of endless speculation and argument among crypto people, but it’s important less in its particulars than what it signifies: would-be crypto innovators who are not trying to scam anybody have no way to be confident they’re following the law. Industry advocates warn that the resulting confusion not only hurts consumers but also damages a sector that acolytes say holds the keys to a technological revolution akin to the invention of the Web. U.S. crypto companies want to comply with the law, the industry says, but instead have been bankrupted or driven offshore by regulators’ approach. “We need a definition of which digital assets are securities or which ones are not,” the Digital Chamber’s Boring says in an interview. “The SEC has said, ‘We’re not going to tell you which ones meet our test, but make no mistake, we will come after you if you guess wrong.’ We have companies that want to be regulated, but they need to know who the regulator is, and if they are going to be regulated by the SEC, they need to know how to register. A lot of projects are in complete limbo today, and it has forced a significant amount of business activity outside of the United States, because they’re not willing to operate in a gray area with potential enforcement hanging over their head.” D.C. is beginning to listen. On Sept. 15, the Senate agriculture committee held the first hearing on the Digital Commodities Consumer Protection Act, a bipartisan proposal coauthored by Senators John Boozman and Debbie Stabenow. The bill is one of numerous crypto-related pieces of legislation introduced on Capitol Hill in recent months—Boring counts more than 60, with more in the process of being drafted. Meanwhile, on Sept. 16, the White House released its first-ever framework for crypto regulation, a follow-up to a first-of-its-kind March executive order in which President Biden directed agencies to research and report on the matter. The Blockchain Summit’s program featured four senators and three members of Congress, almost evenly divided between the parties. The industry says it wants rules it can live with; policymakers say they want to protect consumers and foster innovation. Those goals would seem to be compatible. But this is D.C., where finding common ground can come with its own costs. “When politicians say, ‘We hope to get this done by the end of the year,’ what I hear is ‘We want crypto lobbyists at our next fundraiser, and we’re going to milk this for at least three Congresses,’” a veteran D.C. tech lawyer says, speaking on condition of anonymity in order to be frank about how Washington really works. As soon as the law gets passed, the spigot of money turns off, or at least down. “It’s worth noting,” the lawyer says, “that in the California gold rush, the folks who supplied the picks and shovels and donkeys made a lot more than the miners.” There’s a common saying on Capitol Hill: if you’re not at the table, you’re on the menu. The crypto industry discovered this principle in remarkably literal fashion last year. In August 2021, a bipartisan group of senators was negotiating infrastructure legislation to fund roads, bridges, and broadband across America. To pay for all this, the senators consulted a “menu” of revenue options staff had prepared. Among them was a tax on cryptocurrency brokers that would raise an estimated $5 billion. The lead Republican negotiator, Rob Portman of Ohio, picked it off the list, sources familiar with the process confirmed. Crypto firms who would be affected by the provision were blindsided and scrambled to mount a response. The unexpected fight stalled the bill’s passage as exhausted senators worked around the clock to finalize the legislation. Lawmakers sympathetic to the industry proposed a compromise, but just when one seemed imminent, Republican Senator Richard Shelby of Alabama nixed it to protest the blockage of an unrelated bill. The tax went through. (Industry leaders remain hopeful that the provision, which is set to take effect next year, can be repealed.) The episode was a dramatic demonstration of crypto’s political vulnerability. “It was a last-minute addition, and all these crypto lobbyists were like, ‘Wait, what’s going on?’ They were asleep at the switch, basically,” says Avik Roy, president of the Foundation for Research on Equal Opportunity, a conservative think tank. Old pros like the pharmaceutical lobby, he notes, know that the time to stop Congress from doing this sort of thing is to keep it off the menu. “The crypto people did make a lot of noise, but it wasn’t enough to change the trajectory, which shows they were still pretty politically weak.” Representatives of numerous major blockchain companies cited this as the industry’s “aha” moment. “That was when people woke up and realized they’ve got to get involved,” says a lobbyist for a major crypto group. Determined not to let it happen again, the industry went on a spending spree, hiring platoons of lobbyists and advocates—many of them former policymakers and regulators fresh from the revolving door—and mounting a full-court press on D.C. The Chamber of Digital Commerce is the oldest blockchain trade association, but these days its competitors include the Blockchain Association, the Association for Digital Asset Markets, and the Crypto Council for Innovation. All have grown rapidly over the past year, flush with money from member companies suddenly desperate to have a voice in the policy process. Sarah Silbiger—Bloomberg/Getty ImagesPerianne Boring, founder and CEO of the Chamber of Digital Commerce, testifies before a congressional committee Read More: The Man Behind Ethereum Is Worried About Crypto’s Future. Industry bigwigs, such as FTX CEO Sam Bankman-Fried and the venture capitalist Marc Andreesen, made major contributions to a handful of new political-action committees—$500,000 to $1 million was the baseline expectation. GMI PAC, the most prominent, backed by Trump Administration official-turned-crypto dabbler Anthony Scaramucci, has raised more than $10 million since its founding in January. Few expect these vehicles to play a major role in electoral politics; despite some wishful thinking, there’s little evidence crypto is a top concern for most voters. It’s more about demonstrating that the industry knows how the game is played. “All the leaders in crypto, almost to a person, have been very intentional about trying to show that they have skin in the game,” says a D.C. tech policy leader. “Left to their own devices, they want nothing to do with Washington, but they’re coming around to the idea that it’s necessary and coalescing around a small handful of super PACs and donation platforms. They want in aggregate to send the message that the industry has matured and engaged.” Fending off unwanted taxes might have been the trigger, but the goal now is to do more than play defense. While many countries have a single, centralized regulatory body that oversees financial products, the U.S. system is fragmented, with an alphabet soup of different regulators. Gensler has become an outsize player in this dispute—the industry’s Public Enemy No. 1. A former Goldman Sachs partner, Gensler has served in government since the Clinton Administration and headed the CFTC during the Obama years. When Biden named him to lead the SEC, many crypto players were hopeful that he would bring needed expertise. Instead, they charge, he has mounted wide-ranging and arbitrary crackdowns while rebuffing calls for clearer rules. (Gensler, through a spokesperson, declined to comment for this story.) In an August Wall Street Journal column, Gensler wrote, “There’s no reason to treat the crypto market differently from the rest of the capital markets just because it uses a different technology.” In a Sept. 8 speech, he added, “Some in the crypto industry have called for greater ‘guidance’ with respect to crypto tokens. For the past five years, though, the Commission has spoken with a pretty clear voice,” through its orders and enforcement actions. “Not liking the message isn’t the same thing as not receiving it.” Crypto insiders find this position maddening. “We’ve seen Gary Gensler state many times that we do have clarity, but we don’t,” says the Digital Chamber’s Boring. “I represent over 200 businesses that have to navigate these laws, and I haven’t had one tell me that we do. I believe the SEC is the number one blocker to economic progress not only for the crypto space but also for our economy, because they’ve refused to put forward a framework for digital assets and to bring clarity. It’s holding back economic innovation, and it’s harming investors as well.” Without explicit rules, companies say they’re forced to parse Gensler’s public statements for clues. Even crypto skeptics who want scammers kept in line can see the benefit of knowing what, exactly, the government considers a scam, versus a legitimate enterprise. “Gary is out there stating over and over again, ‘I have jurisdiction over all of this, everyone needs to come in and register [with the SEC],’” says a lobbyist for a top crypto platform. “Well, people have tried to do that, but the staff is not helpful.” Coinbase, a publicly listed crypto exchange, has been blocked from issuing a bitcoin lending product and separately sued for alleged insider trading. BlockFi was fined $100 million for issuing an unregistered yield product, while two other companies, Celsius and Voyager, were threatened with lawsuits but went bankrupt instead. As the Bloomberg financial columnist Matt Levine has noted, the SEC seems to target companies that are trying to go legit, rather than obvious fly-by-night scammers. ”It is conspicuously the case that Gensler’s SEC mainly goes after the more law-abiding crypto actors,” Levine wrote. “Gensler’s posture is that he should be in charge of writing the rules for crypto, but not write them. I don’t see how that can work. “ Lacking regulatory guidance, the industry has turned to Congress to create the rules of the road. Many are pressing lawmakers to give the CFTC primary authority, sparking criticism from crypto skeptics that they’re venue-shopping for a less formidable regulator that would presumably take a less aggressive approach. (CFTC Chairman Rostin Benham pushed back against that perception at a recent congressional hearing: “We are one of the toughest cops on the beat in the world,” he said. On Sept. 22, the CFTC filed a first-of-its-kind lawsuit against the Ooki decentralized autonomous organization, or DAO, sparking fears of a broader crackdown.) Boring insists that any rules at all would be preferable to the current situation. “We would like to see a definition of a digital asset security,” she says. “That really would solve the majority of the issues that we have. It’s really quite simple.” Crypto founders are an idealistic bunch, and many are philosophically committed to a techno-libertarian ethos that shuns government involvement, says Alan Konevsky of the blockchain trading platform tZERO. But as a practical matter, they’re coming around to the need for regulation. “Setting aside some of the maximalist libertarian types, most responsible participants—whether they’re pioneers who survived and made big or traditional finance entities looking to enter the space—all support positive regulation,” he says. “The consensus is that it’s not about whether but how you regulate.” The situation reminds many observers of the 1990s, when the internet was new and barely regulated and Silicon Valley went gangbusters—until it crashed in the early 2000s, leaving major sports teams with stadiums named for defunct companies. A few titans emerged from the wreckage to become today’s tech behemoths: Amazon, Google, Facebook. In what might be a cautionary tale for Web 3.0, lawmakers are still struggling to rein them in, and public sentiment has turned sharply negative. “The internet had the advantage that everyone believed their bull—t for a long time,” the veteran tech lawyer says. “This amazing new technology is going to change the world and bring everybody together! Then we found out, yes, it’s transformed the world, but it’s brought a whole bunch of new problems.” Valerie Plesch—Bloomberg/Getty ImagesHester Peirce, commissioner of the U.S. Securities and Exchange Commission, speaks at the DC Blockchain Summit Back in July 2019, then-President Donald Trump tweeted about cryptocurrency. His take was not a positive one. “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” Trump wrote. He expressed concern that they could “facilitate unlawful behavior” and singled out Facebook’s plans to create a virtual currency called Libra. “We have only one real currency in the USA, and it is stronger than ever,” Trump concluded. “It is called the United States Dollar!” The U.S. President condemning your whole sector might seem like a discouraging development, but Perianne Boring was ecstatic. She printed out the tweets, mounted them in big gold frames, and hung them in her office, where she refers to them as “the crown jewels.” “It was the first time a sitting president tweeted about bitcoin. So I was like, well, at least we’re relevant!” she says. The Trump Administration’s stance toward crypto largely reflected the former President’s disdain. But on Capitol Hill, crypto’s loudest skeptics have been on the left, particularly Senator Elizabeth Warren, who famously derided the industry as a “shadowy, faceless group of supercoders.” The congressional blockchain caucus, which was started in 2016 by then-Reps. Mick Mulvaney and Jared Polis and now boasts nearly 40 members from both parties, is about two-thirds Republican. Ideologically, GOP crypto boosters tend to focus on the potential economic opportunity while Democrats tend to highlight the need to protect consumers. But so far the industry has succeeded in being seen as nonpartisan, which benefits its interests. The political divide over crypto, insiders say, tends to be more generational; older lawmakers often find blockchain technology befuddling. “We’ve got people out there investing in this and don’t have a clue what they’re doing, including me,” Republican Senator Tommy Tuberville said at a recent congressional hearing on crypto legislation. Read More: A Top Ethereum Developer On the Risks and Rewards of the Merge. The Biden Administration has made more favorable noises than its predecessor. In March, the President issued an executive order directing agencies to research the risks and benefits of crypto. “The United States must maintain technological leadership in this rapidly growing space, supporting innovation while mitigating the risks for consumers, businesses, the broader financial system, and the climate,” the White House said. This was a major milestone for the industry: not just recognition, but an acknowledgement that crypto is here to stay and has significant upside. “When there began to be chatter in D.C. around the White House putting something out, many people were concerned it might be quite punitive, but it ended up being something that most view as positive,” says Michael Sonnenshein, CEO of Grayscale, a publicly traded bitcoin investment fund. Now the Administration has followed up by issuing its proposed regulatory framework, aimed at “laying the groundwork for a thoughtful, comprehensive approach to mitigating digital assets’ acute risks and—where proven—harnessing their benefits,” according to a joint White House statement by Brian Deese, director of the National Economic Council, and National Security Advisor Jake Sullivan. (The framework directs both the SEC and CFTC to “aggressively pursue” misconduct, but does not take a position on the question of jurisdiction.) Things are moving on Capitol Hill too, albeit slowly. In June, a bipartisan pair of senators, Cynthia Lummis and Kirsten Gillibrand, released a wide-ranging bill covering all aspects of crypto regulation; it would define and expand the CFTC’s authority while leaving some digital securities under the SEC’s purview, and also would create new rules for NFTs, stablecoins and other blockchain-related products. Lummis, a conservative Republican from Wyoming, has been dubbed the Senate’s “crypto queen.” Gillibrand, a liberal Democrat from New York, joined the push earlier this year, pointing to her state’s centrality to the financial industry. Other prominent efforts include the House agriculture committee’s Digital Commodities Exchange Act, introduced in April, and the Senate agriculture committee’s Digital Commodities Consumer Protection Act, introduced in August. While the Digital Chamber counts 68 current crypto-related pieces of legislation, aides involved in the process consider those the top three currently introduced. Most observers see these major bills as complementary rather than in competition, and expect them to take time to work through the process. Gillibrand and Lummis have said their measure might have to go through four different committees and indicated they expect it to eventually be broken up into component pieces and modified rather than passed wholesale. Some are hopeful that legislation on stablecoins or regulatory jurisdiction could be attached to must-pass bills in Congress’s post-election lame-duck session. The top Democrat and Republican on the House banking committee, Maxine Waters and Patrick McHenry, have been working for months to draft a bipartisan stablecoin bill, but it has yet to see the light of day. At the D.C. Blockchain Summit, the excitement was palpable. “Bring these geniuses back on our soil!” Kevin O’Leary of ABC’s “Shark Tank” hollered onstage, rueing the business brains that have allegedly been lost to offshore havens. Two algorithmic stablecoins had just crashed, wiping out a trillion dollars in value, and a “crypto winter” of crashing prices was on the way, but everyone seemed to be taking it in stride. By afternoon, with cocktail hour looming, a brave new future of legal crypto working hand in hand with the regulatory state seemed within reach. Then Michael Hsu got up to speak. Hsu, whose title is acting comptroller of the currency, opened a folder on the lectern and began to read a tersely scripted speech. With center-parted black hair, oval glasses and a neat suit and tie, Hsu looked every inch the bureaucrat. He was there, he said, to provide “a bank regulator’s perspective.” (Despite its name, the Office of the Comptroller of the Currency, a division of the Treasury Department, does not issue currency—the Federal Reserve does that. Rather, it charters banks.) It quickly became clear that he had not gotten the Brave New World memo. Hsu said he had grave concerns about what he had observed from the world of cryptocurrency. It posed a contagion risk to the broader financial sector; it was a good thing it was under tight oversight by the SEC; it was too dependent on hype and Ponzi schemes. “The industry has grown too fast,” he said, “and recent events should be a wake-up call.” Crypto may believe its time has come. But Washington is not so sure—and Washington still has the upper hand. With reporting by Mariah Espada and Anisha Kohli.....»»

Category: topSource: timeOct 4th, 2022

China"s Marine Corps has doubled in size since 2017, and it would be a key part of any attempt to invade Taiwan

In 2017, as part of a sweeping military reorganization, China's Marine Corps was expanded to more than 30,000 personnel in six marine brigades. Members of the People's Liberation Army Marine Corps during training in Zhanjiang, Guangdong province, July 20, 2017.REUTERS/Stringer China's ability to invade Taiwan has gotten renewed attention amid heightened tensions in recent weeks. China's military has devoted much effort to improving its ability to conduct such a risky and costly operation. A key part of that operation would be China's Marine Corps, which has more than doubled in size since 2017. China's Marines would be key in a Taiwan War: Tensions between China, the US, and Taiwan have risen following a visit by US House Speaker Nancy Pelosi to the self-governing island. Renewed attention has fallen on the question of China's ability to seize the island in a D-Day-like amphibious invasion.Rampant speculation that a surprise invasion could occur any day now is off-base. The time and effort needed to assemble an adequate force would make preparations quite obvious, as they were in the lead-up to Russia's invasion of Ukraine.Nonetheless, China's military has unquestionably devoted much effort to improving its capability to undertake such a risky and costly campaign if ordered to.One important element of those plans is the People's Liberation Army Navy Marine Corps, or PLANMC, which has more than doubled in size since 2017. This article will review key findings from a study by Connor Kennedy for the China Maritime Studies Institute regarding the organization, mission, and methods of China's revamped Marine Corps as well as how that related to Taiwan.The death and rebirth of China's Marine CorpsMembers of China's Marine Corps at a military training base in China's Xinjiang Uighur Autonomous Region on January 21, 2016.REUTERS/StringerThe PLANMC was formed from the Army's 85th Division in May 1952. A company of this division saw action repelling a Nationalist landing force from Dongshan island in 1953.This corps was eventually disbanded, but after island skirmishes with Vietnam, two new Marine brigades were formed, one in 1980 and another in 1998. These totaled 12,000 personnel, stationed mostly at Zhanjiang to support the South China Sea Fleet in anti-piracy and island garrison missions.In 2017, as part of a sweeping reorganization of the Chinese military, the PLANMC was expanded to comprise more than 30,000 personnel in six marine brigades. These were supported by new Aviation and Special Forces brigades.However, even this expanded Marine Corps only supplements the Ground Force's six amphibious combined-arms brigades, which field twice as many heavy mechanized battalions, and more fire support. (You can read more about the Ground Forces' amphibious units in this study by People's Liberation Army expert Dennis Blasko.)The Navy Marine brigades focus on a more diverse set of skills for varied missions, including anti-piracy and crisis-response roles across the Pacific and Indian oceans. For example, a marine battalion is stationed at China's only oversea military base in Djibouti, and this will likely feature in future People's Liberation Army Navy, or PLAN, amphibious strike groups built around Type 071 and 075 amphibious carriers.Notably, Chinese action movie "Operation Red Sea" imagines Chinese marines rescuing foreign nationals from a Middle Eastern country.The organization of China's MarinesChinese participants in a competition among marine units at Russia's 2016 Army Games, August 9, 2016.Vitaly NevarbackslashTASS via Getty ImageThe new standard PLANMC brigade has two Amphibious Mechanized battalions, each with 56 ZBD-05 tracked amphibious carriers and ZTD-5 assault guns that can swim from ship to shore at an extraordinary 18 mph. (For comparison, US Marine Corps AAV-7 carriers max out at 8 mph on water.)The ZBDs are armed with rapid-firing 30-mm cannons and two HJ-73C anti-tank missiles — they can carry eight infantrymen. The ZTD-5s have 105 mm guns effective against tanks and strongpoints.Each battalion also has a fire support company, a reconnaissance platoon, and engineering, air defense, and repair sections.Each Marine brigade also has a Light Amphibious Mechanized Battalion using eight-wheeled ZBL-08 "Snow Leopard" infantry fighting vehicles, ZTL-11 assault guns (with the same turret as the ZTD-5) and four-wheeled CS/VP4 Lynx all-terrain vehicles. These can swim to shore too, but more slowly at 5 mph, meaning they would do so after the tracked battalions secure a beachhead.Each brigade should also have an air assault battalion (i.e. infantry landing by helicopter) and a reconnaissance battalion specialized in intelligence gathering and raiding missions.For combat support, each brigade has an artillery battalion with 18 PLZ-05A amphibious self-propelled howitzers, and an air-defense battalion that can provide low-altitude air defense using man-portable missiles and towed anti-aircraft guns. These can even be deployed on shipdeck to provide low-altitude defense when transiting.Chinese marines during a visit by a US official in Zhanjiang, November 16, 2006.US Marine Corps/Lance Corporal J.J. HarperWhile the above organization serves as the template, in reality the six Marine infantry brigades aren't standardized. Newly converted brigades lack a full complement of armored vehicles, supporting sub-units, and dedicated sealift.Unit NameMain Base(City, Province)Theater CommandFormer unitReadiness level1st Marine BrigadeZhanjiang, GuangdongSouth1st Marine BrigadeHigh2nd Marine BrigadeZhanjiang, GuangdongSouth164th Marine BrigadeHigh3rd Marine BrigadeJinjiang, FujianEast13th Coastal DivisionLow4th Marine BrigadeJieyang, GuangdongEast7th Coastal Defense BrigadeLow5th Marine BrigadeLaoshan, ShandongNorth8th Coastal Defense RegimentLow6th Marine BrigadeHaiyang, ShandongNorth77th Motorized Infantry (PLA)MediumIn November 2021, Kennedy estimated the PLANMC could operationally deploy only six of its theoretical 12 amphibious mechanized battalions. Currently, there remains an emphasis on improving battalion-level leadership, as many battalion command staff remain unfamiliar with the capabilities of their units.The same is true of the new Aviation Brigade, which in 2021 had just 20 air-assault helicopters in two squadrons — a mix of Z-8 and Z-9 helicopters, which are based on French Super Frelon and Dauphin helicopters. This unit has trained for ship-board operations from Chinese Type 071 and 075 amphibious carriers, as well as air-assault insertion of troops behind enemy lines, but it lacks attack helicopters for escort.It is, however, integrating Z-20 transport helicopters, which are based on the US Black Hawk, and it could eventually include Z-10 attack helicopters.Finally, the 3,000-strong, Hainian Island-based Seventh Brigade, formerly the Jiaolong ("Sea Dragon") commandos, is a special forces unit trained in demolitions, target reconaissance/designation, and sabotage. It can deploy by helicopter, parachute, submarine, and inflatable raft. China's Navy SEAL-equivalents, they have operationally deployed in China's anti-piracy patrols off Somalia and during foreign-national evacuations in Yemen.Target Taiwan: the Joint Island Landing CampaignChinese troops board landing craft during a joint amphibious exercise on the coast of China's Fujian Province on November 27, 1995.ReutersThe PLANMC would play an important role in what is called the Joint Island Landing Campaign, or JILC.The campaign would be a high-cost, high-risk endeavor, and thus far from Beijing's preferred approach to dealing with Taiwan, even in the event of kinetic hostilities. Nonetheless, it's the PLA's job to make sure that option is credibly on the table.However, PLANMC brigades don't have the numbers or firepower of the ground forces' amphibious brigades that are specifically equipped for a JILC contingency. Thus, Kennedy believes PLANMC units would be assigned secondary landing areas, seeking to "force defending forces into a passive position and complicate their ability to mass force against the heavier landing forces in the primary landing areas."Even combined, Ground Forces and Marine amphibious and airborne forces couldn't conquer Taiwan by themselves. Instead, they would have to seize and hold beachheads and/or port facilities through which non-amphibious PLA forces can pour in.A Chinese Marine Corps armored vehicle fires during a drill at a military base in Taonan, Jilin province, January 25, 2015.REUTERS/China DailyThe JILC would play out in three phases according to Kennedy.In the preliminary ops phase, small PLA units would conduct beach reconnaissance to identify safe landing zones and minefields, possibly clear mines and obstacles, and target key defensive infrastructure — notably command-and-control hubs, ammunition depots, observation posts, and even harbors and individual ships inside them.Such amphibious raids, likely aided by helicopter and maritime militia units, can be conducted by PLANMC reconnaissance battalions, and possibly battalion recon platoons, and are the core function of its special forces brigade.Such activities, however, risk betraying tactical surprise, so PLANMC units might also raid the wrong beaches in order to misdirect defensive efforts and sow confusion.Kennedy notes the subsequent Assembly, Embarkation, Transit phase will be complicated by the PLA's lack of sealift to transport all of its amphibious forces at once.To ease the logjam, civilian ships could be converted into troop carriers, and the PLANMC might also embark at sea. PLANMC units have also demonstrated capability to launch amphibious vehicles from civilian roll-on-roll-off cargo vessels.During embarkation and transit, PLANMC units would be vulnerable to medium-to-high altitude air and missile attacks — a subject of recent concern in Chinese media — and would likely rely on shore-based defenses for protection.The Assault Landing/Beachhead Establishment Phase would likely involve five to seven separate waves for a single battalion, according to Kennedy. Each amphibious battalion would land on a beachfront 1 to 2 kilometers wide, meaning the entire brigade would occupy 2 to 4 kilometers.In the first wave, combat engineers accompanied by specialized amphibious breaching vehicles would wade forth to clear corridors through minefields and obstacles using line-cable charges.Meanwhile, escorting ZTD-05 amphibious tanks would provide covering fire and plaster pre-identified defensive positions with 105mm shells, possibly using Beidou coordinates to hit pre-supplied targets, even in low-visibility conditions.Infantry companies would follow in the second and third waves, followed by artillery and rear echelon units.Chinese amphibious tanks land on a beach during a Sino-Russian military exercise in China, August 24, 2005.China Photos/Getty ImagesEven with a beachhead secured, PLANMC units would remain in the thick of the action. The wheeled vehicles of its light mechanized battalions could advance rapidly inland using Taiwan's extensive road infrastructure.Furthermore, PLANMC air-assault battalions could be used to insert troops 9 to 37 miles behind enemy lines. According to Kennedy, a single wave of five or six Z-8J helicopters could carry an infantry company, and would require an open landing zone of 1 to 2 square kilometers.PLANMC units also have trained to integrate additional firepower for post-landing missions. This would include towed howitzers, Type 81 forty-barrel 122mm multiple-rocket launcher trucks, and lightweight FHJ-02 seven-barrel 62mm multiple rocket system. Reportedly, PLANMC units have begun studying urban combat ops, unavoidable in a seizure of Taiwan, and are reportedly integrating non-amphibious Type 15 light tanks into their organization.Overall, China's new-pattern marine brigades appear designed to offer a flexible toolkit of capabilities, rather than providing maximal firepower for a Taiwan assault. As such, these units may constitute more of a handy strategic dagger, as a PLANMC commandant once put it, than a broadsword.Still, in a JILC operation, the PLANMC's reconnaissance and special forces units would be uniquely effective for pre-landing reconnaissance and raiding. And its mechanized and airborne battalions might be used for smaller-scale air/sea landings intended to outflank main beach defenses and capture sensitive rear-area positions.Sébastien Roblin writes on the technical, historical and political aspects of international security and conflict for publications including The National Interest, NBC News, Forbes.com, War is Boring and 19FortyFive, where he is defense-in-depth editor. He holds a master's degree from Georgetown University and served with the Peace Corps in China. You can follow his articles on Twitter.Read the original article on Business Insider.....»»

Category: worldSource: nytAug 14th, 2022

Futures, Yields, Oil And Gold Slide As German Confidence Plummets To 2011 Lows, Euro Hits Parity

Futures, Yields, Oil And Gold Slide As German Confidence Plummets To 2011 Lows, Euro Hits Parity US index futures, global markets, Treasury yields, bitcoin and oil all fell on Tuesday as the dollar continued its relentless ascent to  levels just shy of the March 2020 global crash record high... ... highlighting pervasive trader unease about the economic outlook as high inflation and a looming recession are set to unleash a catastrophic global recession coupled with a worldwide dollar shortage, now with the added boost of China’s renewed struggles with Covid. S&P and Nasdaq 100 emini futures dropped about 0.5% each having slumped as much as 0.9% earlier, as traders brace for an ugly Q2 earnings season which may provide clues on how companies are weathering inflation and recession concerns. The US 10-year Treasury yield falls to about 2.91% amid a broad-based flight to safety; bonds also rallied in Europe. German bonds surged, sending the benchmark 10-year yield to the lowest since May, after data showed investor confidence plunged to a 2011 low. As shown above, the dollar rose just shy of record highs last seen at the height of the 2020 market panic over Covid and the yen strengthened, underlining investor caution. The euro meanwhile briefly touched parity (technically, it was 1.00003 but that's semantics for purists who have nothing better to do) hammered by the region’s energy crisis and acute recession fears. Dollar strength will not only “affect this quarter’s earnings, but more likely it’s going to affect the revenue generation outlook for the next couple of quarters and that, I think, is a big problem,” Kimberly Forrest, founder and chief investment officer of Bokeh Capital Partners, said on Bloomberg Radio. PepsiCo, one of the first major corporations to report, rose in premarket trading after lifting its revenue forecast. The soft-drinks maker said demand remained robust despite inflation, though it expected headwinds from the strong dollar. Bank stocks, meanwhile, were lower in premarket trading amid a broader slump in risk assets. Cryptocurrency stocks drop in premarket trading as Bitcoin drops below $20,000 in its fourth straight day of declines amid a stronger dollar. In corporate news, LoanDepot said it will cut about 2,000 additional staff by the end of the year. Here are the other notable premarket movers: Gap (GPS US) shares fall 6.4% in premarket trading after the apparel retailer fired CEO Sonia Syngal and said it expects rising costs and deepening discounts to erase this quarter’s operating profit. American Express (AXP US) shares are down 2.2% in premarket trading after Morgan Stanley cut the recommendation on the stock, as well as on Capital One (COF US), to equal- weight from overweight as inflation takes a larger share of household disposable incomes. STORE Capital (STOR US) shares fall 3.3% in premarket trading after Morgan Stanley downgrades it to underweight from equal-weight and cuts National Retail Properties (NNN US) to equal-weight from overweight, saying that US triple net REITs could see a headwind from the rising cost of capital. Ginkgo Bioworks (DNA US) shares are up 9% in premarket trading after exchange-traded funds managed by Cathie Wood’s Ark Investment Management bought 860,480 shares in the company. Meanwhile, the latest Fed commentary highlighted both the central bank’s hawkishness and the risks that come with aggressive interest-rate hikes. Fed Bank of Atlanta President Raphael Bostic said the US economy can copewith higher interest rates and repeated his support for another jumbo move this month. Fed Bank of Kansas City President Esther George, who dissented last month against the central bank’s 75 basis-point rate increase, cautioned that rushing to tighten policy could backfire. European bourses are also deep in the red. Euro Stoxx 50 falls 0.7% with the Stoxx Europe 600 sliding for a second day, though it pared the decline with utilities outperforming as EDF jumped after a report that the French government will pay a premium to take control of the electricity company. The DAX lags, dropping 0.8%. Banks, travel and autos are the worst performing sectors. German bonds surged, sending the benchmark 10-year yield to the lowest since May, after data showed investor confidence plunged to a level not seen since the sovereign debt crisis in 2011. Asian stocks fell to a new two-year low as China’s technology shares continued to face selling pressure amid regulatory jitters and a resurgence of Covid cases in the nation.  The MSCI Asia Pacific Index slipped as much as 1.5%, dragged by tech and consumer discretionary shares. The Hang Seng Tech Index fell 11% from a June high to enter a technical correction as regulatory fines for the country’s tech giants continued to damp sentiment. In China, investors are concerned more Covid lockdowns may lie ahead as Beijing continues with a strategy of mass testing and mobility curbs. Chinese benchmarks took a hit from renewed lockdown fears from a fresh virus outbreak in Shanghai. Japan and Taiwan were among the region’s worst performing markets on lingering concerns of a global economic slowdown. Market participants are hoping that key US inflation data due Wednesday and China’s GDP figures on Friday will provide clues on the global economy’s direction. Asia’s stock benchmark has slumped 20% this year amid worries about higher interest rates and the prospect of an economic downturn.  Investor sentiment continued to weaken in Asia despite remaining positive in China, said Olivier d’Assier, the head of APAC applied research at Qontigo. “Within an inflationary background, hopes of continued high profit margins in developed markets can only be balanced with fears of a margin squeeze among the developing world’s supply chain.” In FX, the Bloomberg Dollar Spot Index rose a second day as the greenback was steady or higher against all of its Group-of-10 peers apart from the yen amid rising recession concerns. The euro fell to a low of 1.00003 per dollar but struggled to go below parity. Options traders are still preparing for life below this psychological support level. The pound lagged all of its Group-of-10 peers. UK retailers reported another drop in sales, while economists see the risk of a UK recession in the next 12 months at almost 50-50. Australian and New Zealand fell gradually. Iron ore prices sank to a seven- month low, with the demand outlook dimming on fears China may again impose strict Covid-19 curbs that hurt construction activity. In rates, Treasuries were underpinned following gains for bunds and gilts after German ZEW expectations gauge dropped to -53.8 vs -40.5 estimate. Treasury yields richer by up to 7.5bp across intermediates, flattening 2s10s spread by 1.4bp on the day to -10.3bp, deepest inversion since 2007; German 10s outperform Treasuries by ~5bp, gilts by ~7bp. German 10-year yields dropped to lowest since May, dragging Treasury yields lower. German curve bull-flattens, richening 12-14bps across the back end. Gilts bull-steepen, with short-dated yields dropping over 15bps. Peripheral spreads widen to Germany with 10y BTP/Bund widening ~3bps to 199bps. In bond auctions we get a $33BN reopening of 10-year notes at 1pm ET follows good demand for Monday’s 3-year new issue, which stopped 0.5bp through. WI 10-year yield around 2.92% is ~11bp richer than June result, which tailed by 1.2bp. Crude futures decline. WTI falls ~2.5% to trade near $101.60. Base metals are mixed; LME tin falls 3.1% while LME aluminum gains 0.3%. Spot gold is little changed at $1,735/oz. Spot silver loses 1.1% near $19. Bitcoin drops over 3.5% to trade back below $20,000. Looking at the day ahead now, and data releases include the US NFIB small business optimism index for June. Central bank speakers include BoE Governor Bailey, the Fed’s Barkin and the ECB’s Villeroy. Finally, earnings releases today include PepsiCo. Market Snapshot S&P 500 futures down 0.6% to 3,835.50 STOXX Europe 600 down 0.4% to 413.46 MXAP down 1.3% to 154.65 MXAPJ down 1.3% to 508.44 Nikkei down 1.8% to 26,336.66 Topix down 1.6% to 1,883.30 Hang Seng Index down 1.3% to 20,844.74 Shanghai Composite down 1.0% to 3,281.47 Sensex down 0.6% to 54,067.35 Australia S&P/ASX 200 little changed at 6,606.28 Kospi down 1.0% to 2,317.76 German 10Y yield little changed at 1.16% Euro down 0.3% to $1.0008 Brent Futures down 2.1% to $104.83/bbl Gold spot up 0.2% to $1,736.88 U.S. Dollar Index up 0.43% to 108.48 Top Overnight News from Bloomnerg Investor confidence in Germany’s economy slumped to the lowest since 2011 as the country faces the growing prospect of a recession and risks mount that it’s shut off from Russian energy supplies US Treasury Secretary Janet Yellen agreed with her Japanese counterpart Tuesday that volatile exchange rates pose a risk, and pledged to consult and cooperate as appropriate A global squeeze on energy supply that’s triggered crippling shortages and sent power and fuel prices surging may get worse, according to the head of the International Energy Agency A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks were mostly negative after the weak performance across global counterparts as China's COVID flare-up and Europe's energy concerns added to the headwinds for the growth outlook. ASX 200 bucked the trend with the index kept afloat by defensives although the upside was capped by weak consumer and business confidence data. Nikkei 225 underperformed as the Japanese currency attempted to compose itself from recent rapid depreciation and with automakers pressured after Toyota flagged a potential cut to its output plan citing a chip shortage and COVID impact. Hang Seng and Shanghai Comp. were lower amid the ongoing COVD concerns which overshadowed reports that China’s authorities will increase financial support for manufacturers, as well as the recent stronger than expected aggregate financing and loans data. Top Asian News China is to lockdown Wugang city in Henan for 3 days due to 1 COVID case, according to Bloomberg. Japanese Finance Minister Suzuki said they will conduct necessary economic steps taking prices and economy into account, while he added that they are watching the FX market even more closely while working with the BoJ and will take necessary steps against the FX market with FX authorities from other nations, according to Reuters. Japanese Finance Minister told US Treasury Secretary Yellen that Japan is concerned about the rapid JPY weakening recently; watching currency markets with a sense of urgency; agreed to continue consulting in foreign exchange. European bourses are pressured in a broad China-COVID driven risk move, Euro Stoxx 50 -0.5%; alongside known concerns and a dismal ZEW. Stateside, futures are lower across the board with the NQ somewhat more choppy than peers amid pronounced rate activity this morning and on PEP earnings. Back to Europe, sectors are mixed and feature IT as the laggard while Energy is green despite benchmark pricing amid outperformance in EDF. PepsiCo Inc (PEP) Q2 2022 (USD): EPS 1.86 (exp. 1.74), Revenue 20.2bln (exp. 19.51bln). FY Revenue view 82.7bln (exp. 82.72bln) Top European News UK's Heathrow airport is imposing a capacity cap of 100k departing passengers a day, until September 11th. Beleive further action is needed now; cap means some summer journeys will be rescheduled, relocated or cancelled. Asks airline partners to stop the sale of summer tickets in order to limit the passenger impact. Former UK Chancellor Sunak confirmed his commitment to fiscal discipline and will stand firm on taxes until he has 'gripped inflation', according to FT. German ZEW Economic Sentiment (Jul) -53.8 vs. Exp. -38.3 (Prev. -28.0); ZEW Survey Expectations (Jul) -51.1 (Prev. -28.0) ZEW: current major concerns about energy supply, ECB's announced rate hikes, restrictions in China, led to a deterioration in the outlook; economic situation significantly more negative than in previous month, experts further lower their already unfavourable forecast for the next six months. Fixed Income Bonds breach recent resistance levels, with Bunds up to new July highs at 153.48 after a bleak German ZEW survey Gilts back on the 116.00 handle from a 115.04 Liffe low awaiting more comments from BoE Governor Bailey and 10 year T-note towards top of 119-03/118-09+ range pre-USD 33bn refunding leg DMO's 2032 tap well received and German Schatz covered, but results mixed overall FX Pound underperforms awaiting UK political developments as Labour Party prepares no-confidence motion against Tories; Cable on the cusp of 1.1800, while EUR/GBP rebounds over 0.8450. Euro prods parity vs Dollar before and after dire German ZEW survey, while DXY breaches 108.500 amidst broad Buck gains. Yen regroups as risk sentiment remains sour and yields retreat further, with Japan’s Finance Minister also raising concern about rapid decline, USD/JPY closer to 137.00 than 137.50+ top and Monday's 137.75 peak. Loonie and Nokkie recoil alongside crude prices, but Kiwi holds up better than Aussie ahead of anticipated 50bp RBNZ rate hike on Wednesday, USD/CAD back up near 1.3050, EUR/NOK propped around 10.2600, NZD/USD holding just above 0.6100 and AUD/USD sub-0.6750. Yuan breaks below recent range as China’s Covid situation continues to deteriorate - USD/CNH and USD/CNY probe 6.7500 and 6.7350 respectively. Commodities WTI and Brent have extended on APAC pressure as the demand-side of the equation remains sensitive to lockdowns with the OPEC MOMR and EIA STEO due. Currently, benchmarks are in relative proximity to their respective USD 101.06/bbl and USD 104.35/bbl lows. IEA's Birol said the world is in the midst of the first energy crisis and it has not seen the worst of the energy crisis, according to Bloomberg. US senior official warned that a failure to implement a proposed price cap on Russian oil with the exemption of purchases below the cap, could see oil prices increase to around USD 140/bbl, while the official added that Treasury Secretary Yellen will speak to Japanese Finance Minister Suzuki on the proposed Russian oil price cap, according to Reuters. US Department of Energy announced a contract for 14 companies to purchase crude oil from the SPR with deliveries to take place between August 16th to September 30th, according to Reuters. China's NDRC says retail prices of gasoline and diesel will be cut by CNY 360/tonne and CNY 345/tonne respectively from July 13th. US National Security Adviser Sullivan responded that there is a capacity for further steps that can be taken when questioned about oil output, according to Reuters. Spot gold is relatively resilient despite broader price action, and the yellow metal is torn between COVID-driven haven allure and the USD’s ongoing advances. US Event Calendar 06:00: June SMALL BUSINESS OPTIMISM, 89.5, est. 92.5, prior 93.1 Central Banks 12:30: Fed’s Barkin Discusses the ‘Recession Question’ Government: President Biden will meet with Mexico President Andrés Manuel López Obrador at 11:15am ET House Jan. 6 select committee will hold a hearing on the extremists involved in the assault at 1pm ET DB's Jim Reid concludes the overnight wrap It's so hot, even at 5am, that I have two fans pointing at me as I type this. Electric ones not two people that have kindly voted for me in the II survey. Never has a commute to the office and the lure of aircon been so alluring. When we renovated 3-4 years ago we considered having some aircon fitted but decided that given the cost we would forgo that for the couple of days a year where Britain sweltered. Given that this spell looks set to last a couple of weeks I may sleep in the office, especially as the kids have now broken up and are running riot at home. The heat may have also tired markets out after a mini rally so far in July. The last 24 hours has seen sentiment become more gloomy once again as investors looked forward to multiple data releases and earnings reports this week that’ll set the stage for some important central bank meetings over the next couple of weeks. The US CPI report will be the main highlight tomorrow, but we shouldn’t forget the start of the Q2 earnings season either, which will shed some light on how corporates are faring as the market narrative has flirted with the view that the US economy might already be in a recession. One bit of “good” news yesterday was the NY Fed’s long-run consumer inflation expectations series which showed a decent dip and helped encourage a big rally in bonds as the tug of war in the asset class continues. More on that later but equities didn’t get that memo as they lost ground on both sides of the Atlantic yesterday with the S&P 500 shedding -1.15% by the close of trade, in what looked like a classic risk off rotation, with only Utilities and Real Estate higher, and the latter only barely up (+0.01%). Tech stocks led the declines, with the NASDAQ down by -2.26% whilst the FANG+ index of megacap tech stocks saw an even larger -4.52% decline as all 10 companies in the index lost ground. Along with a sour risk day, mega-cap shares were probably sluggish following the news over the weekend that Elon Musk would be pulling out of his Twitter deal. Small-caps were another underperformer, with the Russell 2000 down -2.11%, whereas the Dow Jones experienced a more modest -0.52% loss. Meanwhile in Europe it was much the same story, with the STOXX 600 (-0.50%) and Germany’s DAX (-1.40%) seeing decent losses of their own. Speaking of Europe, all eyes are on what’s going to happen with the gas situation now that the Nord Stream pipeline is undergoing scheduled 10-day maintenance. European natural gas futures (-6.10%) did come down yesterday after rising for 4 consecutive weeks, thanks to the news at the very end of last week that Canada would return a turbine for the Nord Stream pipeline after their government issued a “time-limited and revocable” permit that removed it from sanctions. That said there are still significant jitters as to whether the pipeline will be turned back on again after the maintenance concludes, which meant that the Euro itself fell even closer to parity against the US Dollar. In fact, the euro closed near its weakest levels of the day at $1.0040, and has hit a fresh low of $1.0010 as we go to press as markets face up to the prospect of what a full cut-off of Russian gas would mean for the European economy. Speaking to DB's Peter Sidorov yesterday, he tells me that the ambiguity over gas may linger as even if Russia did need this turbine part to restore stronger gas flows, the technical logistics may mean it would take an extra week or two to integrate into the pipeline. So the uncertainty may linger until early August. Another factor behind the Euro’s decline recently has been the growing divergence in interest rates between the Fed (who’ve already hiked by 150bps this year) and the ECB (who haven’t even begun yet and with worries as to how far they will get). If the upcoming moves this month are in line with our economists’ (and market) expectations, then that divergence will only grow as the Fed hikes by 75bps for a second consecutive meeting, while the ECB commences the hiking cycle with a much smaller 25bps move. However, yesterday brought some more dovish news from the Fed, with Kansas City President George warning against moving too fast on rate hikes, saying that moving “too fast raises the prospect of oversteering”. That may not be too surprising given that George was the only FOMC voters to dissent from the 75bps majority last month in favour of a smaller 50bps hike. George also warned that the extra volatility the Fed injects into the market when its policy path is so uncertain may hurt Treasury market functioning, which seems like she was not a fan changing policy guidance with such short notice before the June FOMC, perhaps another reason for her dissent. Elsewhere, as discussed at the top, we also received the New York Fed’s latest Survey of Consumer Expectations for June. And whilst 1-year ahead inflation expectations hit a record high since the series began at 6.8%, 3-year ahead expectations came down from 3.9% in May to 3.6% in June, and 5-year ahead expectations fell from 2.9% to 2.8%. That newsflow along with the more general risk-off tone helped support a major rally in Treasuries, with 10yr yields falling -8.8bps to 2.99%, as both inflation breakevens and real rates fell on the day. There was also a fresh flattening in the yield curve, with the 2s10s closing in inversion territory for a 5th day running, finishing at -8.5bps, which isn’t such a good sign as a recessionary indicator, and the length of the inversion now puts it ahead of the 3-day inversion back in late-March/early April, so this is getting harder to dismiss as just a blip. Furthermore, even the Fed’s preferred yield curve indicator of the near-term forward spread flattened to just 114bps, which is something we haven’t seen since early January after peaking at 270bps on April 1. This morning yields on 10yr USTs are another -3.34 bps lower at 2.954% as I type. In Europe there was much the same pattern, with yields on 10yr bunds (-9.9bps), OATs (-10.3bps) and BTPs (-7.3bps) all moving lower. But the risk-off move meant there was a widening in peripheral spreads, and the iTraxx Crossover was another to widen (+8.6bps to 585bps), thus reversing three consecutive moves lower. The losses in US and European equities are echoing in Asian this morning. The nervousness is not being helped by news of another Covid-19 surge in China as the renewed outbreak is raising fears of more lockdowns (see below). As I type, the Nikkei (-1.68%) is leading losses across the region followed by the Hang Seng (-1.57%) and the Kospi (-1.37%). In mainland China, the Shanghai Composite and (-0.83%) and CSI (-0.74%) are also lower. Outside of Asia, equity futures in DMs point to further losses with contracts on the S&P 500 (-0.54%), NASDAQ 100 (-0.68%) and DAX (-0.71%) all weaker. Oil prices are also lower overnight as recession fears and China’s Covid curbs weigh on demand prospects. As we go to press, Brent futures are -1.46% at $105.54/bbl and WTI futures -1.68% at $102.34/bbl. Over in China, Shanghai city reported 59 new infections for Monday, above 50 for the fourth day in a row thus prompting the city authorities to another mass testing effort after finding a highly transmissible Omicron subvariant. Early morning data showed that producer prices in Japan rose +0.7% m/m in June (v/s +0.6% expected) and against a +0.1% rise in May. In the UK, the ruling Conservative party are opening nominations for the next leadership today, with voting starting tomorrow. MPs will then, through a series of voting rounds over the next week choose their favourite two candidates, from which point the party membership will make their decision and with the new PM expected to be announced on September 5. There wasn’t much data to speak of yesterday, but Italian retail sales for May grew by +1.9% (vs. +0.4% expected), and the prior month was also revised positively. To the day ahead now, and data releases include the German ZEW survey for July, as well as the US NFIB small business optimism index for June. Central bank speakers include BoE Governor Bailey, the Fed’s Barkin and the ECB’s Villeroy. Finally, earnings releases today include PepsiCo. Tyler Durden Tue, 07/12/2022 - 07:59.....»»

Category: blogSource: zerohedgeJul 12th, 2022

Luongo: Russia"s New Rules

Luongo: Russia's New Rules Authored by Tom Luongo via Gold, Goats, 'n Guns blog, Russia is done with the West. The divorce is nearly complete. In the past few days we’ve heard from all major Russian leaders the same thing, “The West will play by our rules now.” You can decide for yourselves whether Russia is writing checks they can’t cash, but in the words of Foreign Minister Sergei Lavrov telling the BBC bluntly, “We do not care about the eyes of the West.” Lavrov has always been the soul of politeness and discretion when dealing with European media. His open hostility towards his BBC interviewer was not only palpable, it was hard to argue with. He followed that up with: “I don’t think there’s even room for maneuver left anymore,” Lavrov replied. “Because both [Prime Minister Boris] Johnson and [Foreign Secretary Liz] Truss say publicly: ’We must defeat Russia, we must bring Russia to its knees. Go on, then, do it.” Russia’s leadership never talks in such openly blunt terms. It’s almost like Lavrov was channeling comedian Dennis Miller who used to say, “Feeling froggy, take that leap.” See where it gets you. Russia knows it has the West on the ropes. We need what they produce and now they are determined to set the rules on who gets them and for what price. It knows that European leaders are puppets with Klaus Schwab’s hand up their asses. And it knows Davos has zero leverage over Russia’s actions from here on out. Which brings me to the statements linked above by Gazprom CEO Alexei Miller, speaking at a panel at the St. Petersburg Economic Investment Forum (SPEIF) who just put the situation in the starkest terms there is. “The game of nominal value of money is over, as this system does not allow to control the supply of resources. …Our product, our rules. We don’t play by the rules we didn’t create.” Miller’s statement should be thought of as a statement of principle across all theatres of operation for Russia. This doesn’t just apply to natural gas or oil. This is everything, all of Russia’s dealings with the West from here on out will be on its terms not the West’s. This is clearly the biggest geopolitical middle finger in the post WWII period. Miller is clearly laying out the rules for a new, commodity-centric monetary system, one based on what Credit Suisse’s Zoltan Poszar called ‘outside money’ — commodities, gold, even bitcoin — rather than the West’s egregious use of ‘inside money’ — debt-based fiat and credit — to perpetuate old colonialist behavior well past its use-by date. I laid out the basic problem in an article from March after Russia soft-pegged the ruble to gold. Today’s “Inside Money” standard, known colloquially as the Dollar Reserve standard, is actually what I like to call “Milton Friedman’s Nightmare.” It is nothing more than a system of competitively devalued and inflated debt-based scrips running around drinking each other’s milkshakes until everyone’s glass is empty. Miller is definitely a glass full kinda guy now. These comments came after Gazprom began cutting gas flows to Europe through the Nordstream 1 pipeline using the cover story of repaired gas turbines trapped in fascist Canada which couldn’t be shipped back to Siemens because of sanctions. Now Germany and Canada are trying to figure out how to circumvent the sanctions to get these turbines back. At the same time Miller pledged more gas to China (up 67% yoy through May) because Russia is interested in energy stability for its friends, while its enemies can starve.  Reuters is reporting that “Russia’s Gazprom increased gas supplies to China by 67% in the first five months of this year, the company’s CEO Alexei Miller said on Thursday.” It was also on Wednesday that Russian President Vladimir Putin and Chinese President Xi Jinping held their second phone call since the Ukraine war began. Xi told Putin that China is “willing to continue to offer mutual support (to Russia) on issues concerning core interests and major concerns such as sovereignty and security,” as quoted in state broadcaster CCTV. The arrogance of EU commissars never ceases to amaze me. These people all but declare war on Russia and then act shocked (Shocked, I say!) that Russia then treats them like that. On the same day that four members of the EU Commission — France, Italy, Germany and Romania — approve fast-tracking Ukraine’s membership application, France’s Emmanuel Macron urges Ukrainian President Volodymyr Zelenskyy to go to the bargaining table with Russia. Even if Zelenskyy were to make those overtures to Russia, given his public statements on what his terms are, there would be absolutely zero chance that Russia would agree to show up for talks. At this point I see nothing more than Russia continuing to grind out the Ukrainian army, taking what territory they want and then shepherding through local elections by the conquered territory to either become independent states or part of Russia. It’s likely the latter at this point since Russia is now issuing Russian passports in regions they’ve taken from Ukraine, which the EU, of course, will refuse to honor until no one cares what they think anymore. The rules are changing rapidly. Looking ahead there is a real danger that what Russia has set in motion leads to something no one wants to contemplate. Of course the West helped create this situation by forcing Putin’s hand to invade Ukraine, so who’s to blame about where this all leads to may, ultimately, be an irrelevant point. Let’s hope the noises coming from the West about the sanctions having gone too far and the chest-beating of the worst US and British neocons is no longer being taken seriously by anyone with their fingers anywhere near the launch codes. If that’s the case than these new rules will be grudgingly accepted only after a lot of borders have been redrawn, new alliances formed and a different world order established. This morning at the President Putin declared the old world order dead. He finished his speech where he detailed how the West was committing suicide to suit the wishes of The Davos Crowd with the following definitive statement: “Russia is entering the coming era as a powerful sovereign country. We will definitely use the enormous new opportunities that time opens up for us. And we will become even stronger.” Putin is correct here. Russia is getting stronger by the day. The West took their best shot at destroying Russia and missed the mark. He clearly identified the real culprits for Europe’s and the US’s problems, subservience to an oligarch class who feel entitled to rule the world. When the war started I wrote about what I thought Putin’s intentions were. Then it was speculation: Russia held all the cards in the negotiations over Ukraine and we recklessly pursued a policy of insults and amateurish propaganda, refusing to believe Russia wouldn’t make her final stand. By putting boots on the ground, planes in the air and missiles up the ass of every Ukrainian military installation across the country, Russia turned the ‘might makes right’ argument of the US and Europe on its head. The game has changed because the rules have changed. It’s no longer a game of rhetorical chicken and virtue signaling. Today it is fact. When Putin made his move on Ukraine the ultimate goal was the end of Russia treating the West as an equal and leading the Global South out of what he has called “vassalage.” The reason Putin is hated is because he realizes there are two types of countries, “sovereigns” and “vassals.” It’s been his life’s work to make Russia into a ‘sovereign’ state free from the West. From Russia’s perspective their military operation in Ukraine was their Declaration of Independence from the old ‘rules-based order’ of the post-WWII era. Justified or not, we are now in a new age. The question is now, how many will survive into it. *  *  * Join My Patreon if you want a early read of the rulebook Tyler Durden Sun, 06/19/2022 - 07:00.....»»

Category: blogSource: zerohedgeJun 19th, 2022

Rabobank: Western Leadership Has Successfully Turned Our Economies Into Emerging Markets

Rabobank: Western Leadership Has Successfully Turned Our Economies Into Emerging Markets By Michael Every of Rabobank It was a tough call for me whether to go with the above title of the Daily today, or for ‘These are not serious people, and I refuse to take them seriously’. Friday’s shocking US inflation came in well above expectations at 1.0% m-o-m / 8.6% y-o-y headline, and 0.6% m-o-m / 6.0% y-o-y core. That’s the highest y-o-y headline CPI since December 1981, even further back in time than the first ‘Top Gun’ movie. Indeed, in Tom Cruise terms, it’s back to his second-ever movie, ‘Taps’. Over the past decade, US CPI averaged 1.6% y-o-y. Over the past 12 months, it was 6.9%. Food, energy, and services inflation is rampant, and while goods inflation is edging lower and inventories need to be cleared, there is still an implied manufacturing shock coming from the input side with a lag. Indeed, core inflation has only seen one monthly print lower than 0.5% (6% annualized) since October last year, the trend in energy is not going to stop, and neither will that in Owners’ Equivalent Rent given soaring mortgage rates force more people to rent. There is now some talk of so-called “core-core” inflation excluding food and energy, and airfares, rents, vehicles, hotels, and health insurance, which shows inflation is ebbing. Logically, if we take out everything going up then inflation is zero. Likewise, the Fed and the White House told us there was no inflation; was going to be no inflation; if there was any inflation it was mild; and once it got high, that it would be transitory. These are not serious people, and I refuse to take them seriously. Yet the Michigan consumer survey collapsing to a lower level than during the Global Financial Crisis should be, with 1-year ahead inflation seen at 5.4% and 5- to 10-year inflation up to 3.3%. Given it is estimated US households need over $430 more a month just to stand still vs. inflation, this is not a surprise. Indeed, what Philip Marey had already flagged the Financial Times’ today makes clear is now the widespread view: ‘US set for recession next year, economists predict’. Yet we were repeatedly told by the Fed, the White House, and many in markets that a US recession was not a risk. Likewise, RaboResearch flagged the energy-shock risks for Europe weeks ago, which the ECB still does not recognize. Even Australia is now seeing market calls for a 15% drop in house prices ahead, which is hardly GDP positive for an asset-addled economy. In short, we can ignore ‘stagflation’ and can proceed to a new word shared by an incisive reader: “Incession” – inflation and recession. I repeat that we aren’t used to that concept in developed markets by any name, but emerging markets know the phenomenon all too well. Congratulations to the Western leadership of the past four decades, who have successfully turned our economies into something closer to emerging markets! Markets are obviously far from happy. US 2-year yields leaped from 2.81% to 3.14% Friday, the kind of spike few see in a career. 5-years jumped from 3.07% to 3.31%. 10-years rose less, from 3.04% to 3.16%, so 2s-10s is close to inversion again, and 5s-10s already is. 30-years, despite wild swings, only rose 3bp at the close to 3.19%, so 5s-30s is also inverted and 2s-30s is close to it. Stocks went down again despite the hordes of deeply unserious people telling you they only go up. We also saw the US dollar surge, with EUR back below 1.05 this morning in Asian trading, and JPY moving past 135, as the DXY sits close to 104.5. Moreover, commodities dropped back only a little, with Brent -1.4% to $120.3. Imagine how much more is needed to get oil back to $100. So, what should the Fed do this week? The expectation is Wednesday’s meeting will still the pre-flagged 50bps move. However, we are starting to hear whispers of a 75bps hike, and this weekend saw the first suggestion of 100bps and the Fed opening the door to inter-meeting hikes of indeterminate size. A good emerging-market central bank would do exactly that in these kinds of circumstances. Of course, the author of the 100bps call made clear this will not happen,… because these are not serious people, who we should refuse to take seriously. A far broader range of policies are needed to fight inflation. Back in the late 70s and early 80s, supply-side reform moved the West away from a fiscal Keynesianism unable to cope with higher oil prices and tight labor markets by moving manufacturing jobs to emerging markets. Today, the trend is moving back towards fiscal populism and away from manufacturing in key emerging markets. However, these policies aren’t joined up in the way they were in the 70s and 80s, either intellectually or practically. On the fiscal side, UK PM BYO is promising tax cuts, which don’t help those who aren’t earning much suffering most from high inflation. On the production side, he is launching a scheme to grow more food in the UK,… while cutting subsidies to farmers, signing free trade deals with cheaper producers, closing off EU markets and cheap EU labour, and pushing ahead with green reforms that raise costs. As an anguished farmer notes in The Guardian in an article about “rural fury”, “We want to be eating more British and more local food but again I just ask how. It’s all very well to have words but it’s got to have really meaningful delivery and we aren’t seeing that yet.” In France, President Macron is projected to probably scrape a narrow parliamentary majority but is only going to take around 25% of the vote share. That will make it more difficult for him to cut taxes and raise the retirement age from 62 to 65, as pledged. So, perhaps just the tax cut then? In the US, the White House is talking about fighting inflation while doing little to expand domestic supply over imports, and winking at slashing student debt, which is a direct fiscal transfer (to the relatively better off). Markets won’t like it, but if we get “incession”, we are also going to get such “unpopulism”. So, back to the question of ‘what to do?’ On the UK front, there is a simple theoretical answer: shift away from ‘Brexit means Hard Brexit’ to re-join the European Free Trade Area (EFTA), or the so-called Norwegian Model. True, it would be politically impossible under present leadership, but it might perhaps happen after the next election under Labour. Yet what is the EU to do about its own self-inflicted structural problems that are far more difficult to resolve than Brexit? Note that Ukraine will find out within a week or so if it is going to get the green light to begin the (slow) EU membership process or not. At the same time, Ukraine is running out of ammunition with which to fight Russia, so determining what the country that joins will physically look like. Many Western soliloquies have been delivered, but far fewer arms: and Russia wants ‘its’ land back. That is also ammunition to those who dispute that a globalised, free-trade economy holds all the best answers to our existential economic questions. How many EU countries would find themselves in the same boat as Ukraine in a similar crisis, which cannot be ruled out? Arguably all of them expect France. They would end up relying on the US – as ever. And whom can the US rely on? Didn’t we just go through this with Covid? Despite that, and Ukraine, the West is still firing geopolitical/geoeconomic blanks. The simple fact is that if you push your commodities and manufacturing to other countries to lower inflation, you let those countries push you back by withholding supply, raising inflation again. Imagine if the US or EU were major net exporters to Russia or China, and D.C./Brussels didn’t like what they were doing: wouldn’t they withhold key goods as an economic pressure point? (Assuming American or EU firms cared more about home than their own profits - but there is always legislation/sanctions to give them a shove in the right direction.) Geopolitical logic says the West needs to increase supply. It needs to do it now. And it needs to reduce supply from those who threaten to withhold it. Yes, that is as “unpopulist” as the Fed hiking 75bps or 100bps to also reduce demand and refusing to spoon-feed pampered markets as to what happens next on rates to keep them on edge. However, it does not stop either being true. The fact that this is not happening only shows that those at the top are not serious people, and that we should refuse to take them seriously. Bringing it back to inflation, we are close to the summer solstice: then it’s six months until the depths of winter. At that point, Europe says it won’t be buying any Russian oil. If global supply is then constricted and demand hasn’t fallen, US retail gasoline prices might be $6 or $7 a gallon, or higher. Is that a recession? Yes, a deep one. Is it an inflation crisis too? Yes, a large one. And, crucially, it is driven by the geopolitical backdrop. Relatedly, at the Singapore Shangri-La Dialogue, the good news was that the US and China are talking again. The bad news was what they were saying to each other. The US stressed they aren’t looking to form an ‘Asian NATO’, but don’t want any forced changes in the region. China claimed the US is stirring up problems, smearing it, and Beijing is prepared to fight a war to the end to take Taiwan if it moves towards independence, while escalating claims to the South China Sea: the only stated route to de-escalation is the US acceding to Chinese demands. Meanwhile, Japanese PM Kishida’s keynote speech noted, “I will seek to build a stable international order through dialogue, not confrontation. At the same time, however, we must be prepared for the emergence of an entity that tramples on the peace and security of other countries by force or threat without honoring the rules.” He was not referring to the US. “This will be absolutely essential if Japan is to learn to survive in the new era and keep speaking out as a standard-bearer of peace. I am determined to… secure substantial increase of Japan’s defence budget... In doing so, we will not rule out any options, including so-called "counterstrike capabilities”, and will realistically consider what is necessary to protect the lives and livelihoods of our people.” He also spoke of the Quad offering $50bn in infrastructure funding to ASEAN over next 5 years, obviously as a counter-offer to Chinese capital. In short, the Japanese warning is that we risk stumbling towards a conflict like Ukraine in the Indo-Pacific too: and yet the West are *still* not moving supply chains fast enough to avoid calamity if it were to happen. So, what to do? Shift supply as if this were a war *now*. And raise rates as high as needed for as long as needed to stifle capital flowing into frivolous and vampiric asset-speculation over desperately-needed physical production. It’s an Austrian view; it’s a realpolitik view; and it’s a post-Keynesian MMT view on how to fund it. But we aren’t seeing any rapid movement in that direction because those at the top in D.C. thinktanks and key parts of the Pentagon are also not serious people - and we should also refuse to take them seriously. As the Modern War Institute at West Point puts it in its op-ed ‘We’re Doing It Wrong’, “The US just lost two wars. How is it possible that the war colleges have educated more than twenty thousand “strategists” over the last two decades and have nothing to show for it but two strategic defeats?... Take, for instance, economics. Students need to understand how economics works in the real world, such as how markets, debt, or rapid currency moves influence strategic decisions.”  Equally, the Fed, which bankrolls the fading military hegemon propping up the entire global financial system, needs to understand the Pentagon’s needs and geostrategy better – rather than how to get on the $250,000 after-dinner speech circuit. (Though those prices have surely risen with inflation.) Hold that thought as former Marine Gen. John Allen, President of the thinktank The Brookings Institute, steps down under an FBI probe for being an unregistered foreign agent (for Qatar). According to those who look at this in depth, that is the merest tip of the iceberg across D.C. – and Qatar is hardly the prime suspect. Which brings me back to 1981’s ‘Taps’, where the movie description is: “When an exclusive military school is threatened with demolition by a rapacious real-estate company, the students stage an uprising and siege control of the campus.” So, Wall Street triumphing over national security was a thing back in 1981 in Hollywood imaginations. Now it’s real life, and some are worried about playing Taps (a bugle call during flag ceremonies at military funerals by the US Armed Forces) for real. Reversing that US drift, and reversing a 1981 level of US inflation, requires new policies that are joined at the hip: and serious people we could take seriously. But for now we will probably just get 50bps this week and strategic inaction; and so higher commodity prices; and so higher inflation; and so incession. As a result, we will also get populist political distractions. Today, the British government will release legislation that opens the door to tearing-up the Northern Ireland Protocol, so breaking international law. The CBI are warning the UK this will be a huge error, and the EU have made clear it will trigger a trade war. Nonetheless, sausage rolls, the need to distract from two seemingly-inevitable byelection defeats this week, and PM BYO’s desire to stay in office all suggest the UK will nonetheless go down this route. Just don’t think the EU and US are immune from their own forms of such “unpopulism”. Tyler Durden Mon, 06/13/2022 - 09:47.....»»

Category: blogSource: zerohedgeJun 13th, 2022

Rabobank: Top Gun Is Great But This Isn"t 1986; Is The US 3 Years Away From Winning This Cold War.. Or Losing It

Rabobank: Top Gun Is Great But This Isn't 1986; Is The US 3 Years Away From Winning This Cold War.. Or Losing It By Michael Every of Rabobank Today is the US Memorial Day holiday mourning the military personnel who have died while serving in the US armed forces. The military-flick ‘Top Gun: Maverick’ is out too, and is going to gross a record $154m in its opening three-day run, while internationally it has taken in $124m. I can confirm it’s classic Hollywood spectacle. Only the US Navy (and the IAF?) can do this kind of thing with no CGI, while Tom Cruise, with none either, may really be the vampire Lestat. It’s razzle, dazzle, star-spangled stuff. In fact it’s the 1986 Cold War all over again - and the US and global public clearly loves it. There are other echoes of 1986 today: for one, the US is in a Cold War with Russia again. Indeed, as Russia flattens most of the Donbas with artillery and may be close to seizing it, despite a possible Ukrainian counterattack in Kherson, the US is arming Kyiv more and may finally rush long-range artillery there to allow it to fight back. This war is just getting started if so, not winding down. As Lawrence Freedman, Emeritus Professor of War Studies, argues, “The prudent assumption for now is that this is not a short-term emergency but, for those countries supporting Ukraine, a long-term commitment, that there is no easy diplomatic fix, and that Ukraine will keep on fighting for as long as it takes to regain its lost territory.” One can understand why those fearing Cold and hot war, and hot global inflation stemming from it, think a Donbas ‘win’ may offer Moscow a face-saving way out: Putin might then declare a unilateral ceasefire; and he just told France’s Macron and Germany’s Scholz he is ready for a (Melian) dialogue with Ukraine, and would increase flows of agri products and fertilizers if sanctions are lifted. Yet Andrew Michta, Dean of International and Security Studies, tweets: “As the brutality of Russian war against Ukraine increases, many among Western elites increasingly argue that Kyiv should agree to a cease fire in place to end the carnage. To advocate this is strategic myopia of the highest order, for such a deal would be tantamount to Russian victory… Too many Western governments seem unable (unwilling?) to recognize that we are at an inflection point in history that happens in four/five generations. This is potentially a system-transforming war.” Michta is not alone in geostrategic circles in arguing that a Russian Donbas win would cement violent border change as the new global normal, and that a Russian-flagged ceasefire would be used to rearm to enable them to move on towards new targets both inside and outside Ukraine. Western unity may still be undermined by such Russian tactics. Germany’s economy minister today bewails that the EU united stance is already “crumbling”, as Europe yet again fails to take any immediate action on energy that would stop Russia fighting *now*, when it counts, because Europe wants to fight this economic war painlessly. Yes, Scholz told Davos, “The world is indeed at a turning point… it is not only the state of Ukraine that is at stake. It is the system of international cooperation that was designed in the aftermath of two devastating world wars.” But Berlin is not *doing* much to help, and neither is France – other than talking to Putin. Very much related, Corriere Della Sera reports UK PM Johnson is proposing a European Commonwealth, “a new system of political, economic and military alliances --an alternative to the EU-- for countries united by distrust of Brussels and of Germany's response to Russian military aggression.” It claims if the EU summit on 23 June fails to deliver anything substantive on membership Ukraine may embrace the UK idea: and Poland, Estonia, Latvia, Lithuania, potentially Turkey, and I suspect, the Scandinavian countries, despite issues over NATO with Ankara. The paper concludes, “Thus Putin's war, now in its fourth month, begins to open the first political cracks in Europe,” as we alluded to back in ‘Ich Bin Ein Berliner(?)’ before the war started. On one hand, the UK is up to its old divide and rule, as it reembraces imperial measurements. On the other, the EU is up to its old selfishness, sanctimony, and hypocrisy. The EU was united against the metaphorical ‘existential‘ threat of an outgunned Brexit but is failing against the *literally* existential threat of Russia… to its outgunned east, not its comfortable west. As such, the Baltics, Poland, Ukraine, and Scandinavia may look to the UK more favourably than France reaching out to Putin, not into its pockets or weapon stores; Von der Leyen saying the EU has to be careful not to stop buying Russian oil too fast else Putin will sell it for more money to others and fight even harder(!); and Scholz asking on Twitter if war really has to be fought with violence(!), putting the 'Ahh, him!' in ahimsa. This White House won't back an EU split,… but the next might. Real life is also showing competition to be top gun in the Pacific, where the US holds territories (as does France). Beijing is offering a new Global Security Initiative (GSI) of “non-interference, respecting the UN Charter, and avoiding a Cold War mentality”, and, for Pacific Island nations, a ‘security deal’. The Solomons and Samoa have signed, and Vanuatu and Kiribati are expressing interest (the latter despite the Treaty of Tarawa). This is generating diplomatic pushback from Australia and even New Zealand, which sees the same risks. Fiji, hosting a Pacific Island summit with China today, has rejected that offer to become the 14th state in the IPEF “free and open Indo-Pacific”. Moreover, the President of Micronesia has warned attendees that China is proposing a “smokescreen for a larger agenda” that will “ensure Chinese control of ‘traditional and non-traditional security’ of our islands,”; seeks “control and ownership of our communications infrastructure, as well as customs and quarantine infrastructure…. and mass surveillance of those residing in, entering, and leaving our islands,”; is intended to “shift those of us with diplomatic relations with China very closely into Beijing’s orbit, intrinsically tying the whole of our countries and societies to them,”; and “increases the chances of China getting into conflict with Australia, Japan, the US, and NZ, on the day when Beijing decides to invade Taiwan,” as “To be clear, that’s China’s goal: to take Taiwan. Peacefully, if possible; through war, if necessary.” Yes, “That’s only Micronesia.” Except it’s Japan too. The Asia Nikkei reports China is practicing bombing Japanese targets; Tokyo is to increase its defence spending another 30% on top of a recent boost; PM Kishida says he fears East Asia is the “next Ukraine”; and the government has approved the export of weaponry to ASEAN, India, and Australia. Symbolically, despite the new ‘Top Gun’ enemy being anonymous, China’s Tencent withdrew co-financing for the movie when they saw how ‘USA!’ it was. It is not being shown in China; and so Cruise gets to show his jacket with the Taiwanese and Japanese flags on it, which had been removed in the early trailer. Yet this isn’t 1986: is the US three years away from winning this Cold War, as it was back then, or three years away from losing it? The West is hardly united: the US is hardly united either. Cruise is warned in the new Top Gun, this time the US enemy matches him technologically. That’s entirely plausible given western firms and universities have spent decades giving away their technology to China, and US asset managers are overlooking geopolitics, and China’s politics, economy, and demographics to expand their investments there. (Although actual business supply chains are looking to diversify.) Moreover, Secretary of State Blinken does not want to call a Cold war a Cold War, with all the associated policy shifts. That is despite President Biden repeating to a US Naval Academy graduating class that right after being elected, China’s Xi Jinping cautioned him that democracies are on the decline and that “one day autocracies will run the world.” Biden stressed to the class, "We're living through a global struggle between autocracies and democracies. Xi [is] wrong. Each of you, as you go out into the world, will not only be a proud member of the Armed Forces of the USA, you'll be representatives and defenders of our democracy,… That's why you swear an oath, not to me as your commander-in-chief or any political leader, but to the Constitution. Our nation is placing in you great trust and great faith." Just not enough joined-up power across all required dimensions, soft, hard, and economic/financial, as critics allege. Unlike in 1986, there is no replacement for an ageing Cruise in the Hollywood pantheon, only an army of social media influencers or YouTubers; and there are no replacements for much of the ageing US military for the same reasons, especially at sea. Meanwhile, the PLA --which answers to Xi (not Li for analysts LARPing ‘power struggles’) and belongs to the CCP not China-- is seeing huge growth and grey-zone utilization of China’s merchant marine, which dwarfs that of the US. ‘Top Gun: Maverick’ perhaps implies further smashes lie ahead for markets, as does “system-transforming war”. Beyond Russia-Ukraine, more war, shifts of alliances in the Pacific, and weaponization of commodities and the US dollar, consider @GMichaelRentzJR of Gnosis Freight tweeting, “Would a state backed American Ocean Carrier work?”; Russia saying it might take commodity payment in crypto, which may be their death knell given the current vibe in DC; or India and Russia agreeing barter trade for fertilizer in rupees, but priced in dollars. This *will* all flow on to the Fed. Even in the most mundane terms, Friday’s US personal consumption expenditure (PCE) data were as expected in m-o-m and y-o-y terms, yet because the y-o-y deflator (i.e., inflation rate) fell back again due to predictable base effects, the market decided ‘Inflation is transitory again!’ and rallied hard. Yet when ‘Top Gun’ came out in May 1986, the PCE deflator was 2.0% y-o-y: Friday’s was 6.3%. Fed Funds was at 6.75%: Friday’s was 1.0%. There looks to be a lot more firepower required yet, sorry. Crucially, inflation and Fed hikes cannot be ‘nearly over’ until the *geopolitical* situation is. Worse, the policy responses assumed in thinking things are nearly over -- fewer Fed hikes; risk-on stock rallies; launching idiocies like Luna 2.0; lower bond yields; and less Western geostrategic action on Russia (and China) -- only guarantee far larger problems ahead. On markets, if the Fed wanted a sign that animal spirits were subdued and markets were listening to it, last week showed the complete opposite: so they will have to try harder. On geopolitics, ask yourself who is global top gun, how they got there, and how they can now stay there: and, if they can’t, what happens next. Don’t just follow the mainstream market trend - be a maverick, not a goose. Tyler Durden Mon, 05/30/2022 - 13:55.....»»

Category: personnelSource: nytMay 30th, 2022

Why Did Vladimir Putin Invade Ukraine?

Why Did Vladimir Putin Invade Ukraine? Authored by Soeren Kern via The Gatestone Institute, Nearly three weeks have passed since Russian President Vladimir Putin began his invasion of Ukraine, but it still is not clear why he did so and what he hopes to achieve. Western analysts, commentators and government officials have put forward more than a dozen theories to explain Putin's actions, motives, and objectives. Some analysts posit that Putin is motivated by a desire to rebuild the Russian Empire. Others say he is obsessed with bringing Ukraine back into Russia's sphere of influence. Some believe that Putin wants to control Ukraine's vast offshore energy resources. Still others speculate that Putin, an aging autocrat, is seeking to maintain his grip on power. While some argue that Putin has a long-term proactive strategy aimed at establishing Russian primacy in Europe, others believe he is a short-term reactionary seeking to preserve what remains of Russia's diminishing position on the world stage. Following is a compilation of eight differing but complementary theories that try to explain why Putin invaded Ukraine. 1. Empire Building The most common explanation for Russia's invasion of Ukraine is that Putin, burning with resentment over the demise of the Soviet Empire, is determined to reestablish Russia (generally considered a regional power) as a great power that can exert influence on a global scale. According to this theory, Putin aims to regain control over the 14 post-Soviet states — often referred to as Russia's "near abroad" — that became independent after the collapse of the Soviet Union in 1991. This is part of greater plan to rebuild the Russian Empire, which territorially was even more expansive than the Soviet Empire. The Russian Empire theory holds that Putin's invasion of Georgia in 2008 and Crimea in 2014, as well as his 2015 decision to intervene militarily in Syria, were all parts of a strategy to restore Russia's geopolitical position — and erode the U.S.-led rules-based international order. Those who believe Putin is trying to reestablish Russia as a great power say that once he gains control over Ukraine, he will turn his focus to other former Soviet republics, including the Baltic countries of Estonia, Latvia, and Lithuania, and eventually Bulgaria, Romania and even Poland. Putin's ultimate objective, they say, is to drive the United States out of Europe, establish an exclusive great-power sphere of influence for Russia on the continent and dominate the European security order. Russian literature supports this view. In 1997, for instance, Russian strategist Aleksandr Dugin, a friend of Putin, published a highly influential book — "Foundation of Geopolitics: The Geopolitical Future of Russia" — which argued that Russia's long-term goal should be the creation, not of a Russian Empire, but of a Eurasian Empire. Dugin's book, which is required reading in Russian military academies, states that to make Russia great again, Georgia should be dismembered, Finland should be annexed and Ukraine should cease to exist: "Ukraine, as an independent state with certain territorial ambitions, represents an enormous danger for all of Eurasia." Dugin, who has been described as "Putin's Rasputin," added: "The Eurasian Empire will be constructed on the fundamental principle of the common enemy: the rejection of Atlanticism, the strategic control of the USA, and the refusal to allow liberal values to dominate us." In April 2005, Putin echoed this sentiment when, in his annual state of the nation address, he described the collapse of the Soviet empire as "the greatest geopolitical catastrophe of the 20th century." Since then, Putin has repeatedly criticized the U.S.-led world order, in which Russia has a subordinate position. In February 2007, during a speech to the Munich Conference on Security Policy, Putin attacked the idea of a "unipolar" world order in which the United States, as the sole superpower, was able to spread its liberal democratic values to other parts of the world, including Russia. In October 2014, in a speech to the Valdai Discussion Club, a high-profile Russian think tank close to the Kremlin, Putin criticized the post-World War II liberal international order, whose principles and norms — including adherence to the rule of law, respect for human rights and the promotion of liberal democracy, as well as preserving the sanctity of territorial sovereignty and existing boundaries — have regulated the conduct of international relations for nearly 80 years. Putin called for the creation of a new multipolar world order that is more friendly to the interests of an autocratic Russia. The late Zbigniew Brzezinski (former National Security Advisor to U.S. President Jimmy Carter), in his 1997 book "The Grand Chessboard," wrote that Ukraine is essential to Russian imperial ambitions: "Without Ukraine, Russia ceases to be a Eurasian empire.... However, if Moscow regains control over Ukraine, with its 52 million people and major resources as well as its access to the Black Sea, Russia automatically again regains the wherewithal to become a powerful imperial state, spanning Europe and Asia." The German historian Jan Behrends tweeted: "Make no mistake: For #Putin it's not about EU or NATO, it is about his mission to restore Russian empire. No more, no less. #Ukraine is just a stage, NATO is just one irritant. But the ultimate goal is Russian hegemony in Europe." Ukraine expert Peter Dickinson, writing for the Atlantic Council, noted: "Putin's extreme animosity towards Ukraine is shaped by his imperialistic instincts. It is often suggested that Putin wishes to recreate the Soviet Union, but this is actually far from the case. In fact, he is a Russian imperialist who dreams of a revived Czarist Empire and blames the early Soviet authorities for handing over ancestral Russian lands to Ukraine and other Soviet republics." Bulgarian scholar Ivan Krastev agreed: "America and Europe aren't divided on what Mr. Putin wants. For all the speculation about motives, that much is clear: The Kremlin wants a symbolic break from the 1990s, burying the post-Cold War order. That would take the form of a new European security architecture that recognizes Russia's sphere of influence in the post-Soviet space and rejects the universality of Western values. Rather than the restoration of the Soviet Union, the goal is the recovery of what Mr. Putin regards as historic Russia." Transatlantic security analyst Andrew Michta added that Putin's invasion of Ukraine was: "The culmination of almost two decades of policy aimed at reconstructing the Russian empire and bringing Russia back into European politics as one of the principal players empowered to shape the Continent's future." Writing for the national security blog 1945, Michta elaborated: "From Moscow's perspective the Ukrainian war is in effect the final battle of the Cold War — for Russia a time to reclaim its place on the European chessboard as a great empire, empowered to shape the Continent's destiny going forward. The West needs to understand and accept that only once Russia is unequivocally defeated in Ukraine will a genuine post-Cold War settlement finally be possible." 2. Buffer Zone Many analysts attribute the Russian invasion of Ukraine to geopolitics, which attempts to explain the behavior of states through the lens of geography. Most of the western part of Russia sits on the Russian Plain, a vast mountain-free area that extends over 4,000,000 square kilometers (1.5 million square miles). Also called the East European Plain, the vast flatland presents Russia with an acute security problem: an enemy army invading from central or eastern Europe would encounter few geographical obstacles to reach the Russian heartland. In other words, Russia, due to its geography, is especially difficult to defend. The veteran geopolitical analyst Robert Kaplan wrote that geography is the starting point for understanding everything else about Russia: "Russia remains illiberal and autocratic because, unlike Britain and America, it is not an island nation, but a vast continent with few geographical features to protect it from invasion. Putin's aggression stems ultimately from this fundamental geographical insecurity." Russia's leaders historically have sought to obtain strategic depth by pushing outward to create buffer zones — territorial barriers that increase the distance and time invaders would encounter to reach Moscow. The Russian Empire included the Baltics, Finland and Poland, all of which served as buffers. The Soviet Union created the Warsaw Pact — which included Albania, Bulgaria, Czechoslovakia, East Germany, Hungary, Poland and Romania — as a vast buffer to protect against potential invaders. Most of the former Warsaw Pact countries are now members of NATO. That leaves Belarus, Moldova and Ukraine, strategically located between Russia and the West, as the only eastern European countries left to serve as Russian buffer states. Some analysts argue that Russia's perceived need for a buffer is the primary factor in Putin's decision to invade Ukraine. Mark Galeotti, a leading British scholar of Russian power politics, noted that the possession of a buffer zone is intrinsic to Russia's understanding of great-power status: "From Putin's point of view, he has built so much of his political identity around the notion of making Russia a great power and making it recognized as a great power. When he thinks of great power, he is essentially a 19th century geopolitician. It's not the power of economic connectivity, or technological innovation, let alone soft power. No. Great power, in good old-fashioned terms, has a sphere of influence, countries whose sovereignty is subordinate to your own." Others believe that the concept of buffer states is obsolete. International security expert Benjamin Denison, for instance, argued that Russia cannot legitimately justify the need for a buffer zone: "Once nuclear weapons were invented ... buffer states were no longer seen as necessary regardless of geography, as nuclear deterrence worked to ensure the territorial integrity of great powers with nuclear capabilities.... The utility of buffer states and the concerns of geography invariably changed following the nuclear revolution. Without the concern of quick invasions into the homeland of a rival great power, buffer states lose their utility regardless of the geography of the territory.... "Narrowly defining national interests to geography, and mandating that geography pushes states to replicate past actions throughout history, only fosters inaccurate thinking and forgives Russian land-grabs as natural." 3. Ukrainian Independence Closely intertwined with theories about empire-building and geopolitics is Putin's obsession with extinguishing Ukrainian sovereignty. Putin contends that Ukraine has been part of Russia for centuries, and that its independence in August 1991 was a historical mistake. Ukraine, he claims, does not have a right to exist. Putin has repeatedly downplayed or negated Ukraine's right to statehood and sovereignty: In 2008, Putin told William Burns, then the U.S. ambassador to Russia (now director of the CIA): "Don't you know that Ukraine is not even a real country? Part of it is really East European and part is really Russian." In July 2021, Putin penned a 7,000-word essay — "On the Historical Unity of Russians and Ukrainians" — in which he expressed contempt for Ukrainian statehood, questioned the legitimacy of Ukraine's borders and argued that modern-day Ukraine occupies "the lands of historical Russia." He concluded: "I am confident that true sovereignty of Ukraine is possible only in partnership with Russia." In February 2022, just three days before he launched his invasion, Putin asserted that Ukraine was a fake state created by Vladimir Lenin, the founder of the Soviet Union: "Modern Ukraine was entirely created by Russia or, to be more precise, by Bolshevik, Communist Russia. This process started practically right after the 1917 revolution, and Lenin and his associates did it in a way that was extremely harsh on Russia — by separating, severing what is historically Russian land.... Soviet Ukraine is the result of the Bolsheviks' policy and can be rightfully called 'Vladimir Lenin's Ukraine.' He was its creator and architect." Russia scholar Mark Katz, in an essay — "Blame It on Lenin: What Putin Gets Wrong About Ukraine" — argued that Putin should draw lessons from Lenin's realization that a more accommodating approach toward Ukrainian nationalism would better serve Russia's long-term interests: "Putin cannot escape the problem that Lenin himself had to deal with of how to reconcile non-Russians to being ruled by Russia. The forceful imposition of Russian rule in part — much less all — of Ukraine will not bring about such a reconciliation. For even if Ukrainians cannot resist the forceful imposition of Russian rule over part or all of Ukraine now, Putin's success in imposing it is only likely to intensify feelings of Ukrainian nationalism and lead it to burst forth again whenever the opportunity arises." Ukraine's political independence has been accompanied by a long-running feud with Russia over religious allegiance. In January 2019, in what was described as "the biggest rift in Christianity in centuries," the Orthodox church in Ukraine gained independence (autocephaly) from the Russian church. The Ukrainian church had been under the jurisdiction of the Moscow patriarchate since 1686. Its autonomy dealt a blow to the Russian church, which lost around one-fifth of the 150 million Orthodox Christians under its authority. The Ukrainian government claimed that Moscow-backed churches in Ukraine were being used by the Kremlin to spread propaganda and to support Russian separatists in the eastern Donbas region. Putin wants the Ukrainian church to return to Moscow's orbit, and has warned of "a heavy dispute, if not bloodshed" over any attempts to transfer ownership of church property. The head of the Russian Orthodox Church, Patriarch Kirill of Moscow, has declared that Kyiv, where the Orthodox religion began, is comparable in terms of its historic importance to Jerusalem: "Ukraine is not on the periphery of our church. We call Kiev 'the mother of all Russian cities'. For us Kiev is what Jerusalem is for many. Russian Orthodoxy began there, so under no circumstances can we abandon this historical and spiritual relationship. The whole unity of our Local Church is based on these spiritual ties." On March 6, Kirill — a former KGB agent who is known as "Putin's altar boy" due to his subservience to the Russian leader — publicly endorsed the invasion of Ukraine. In a sermon he repeated Putin's claims that the Ukrainian government was carrying out a "genocide" of Russians in Ukraine: "For eight years, the suppression, extermination of people has been underway in Donbass. Eight years of suffering and the entire world is silent." German geopolitical analyst Ulrich Speck wrote: "For Putin, destroying Ukraine's independence has become an obsession.... Putin has often said, and even written, that Ukraine is not a separate nation, and should not exist as a sovereign state. It is this fundamental denial that has led Putin to wage this totally senseless war that he cannot win. And that leads us to the problem of making peace: either Ukraine has the right to exist as a nation and a sovereign state, or it hasn't. Sovereignty is indivisible. Putin denies it, Ukraine defends it. How can you make a compromise about the existence of Ukraine as a sovereign state? Impossible. That's why both sides can only fight on until they win. "Normally wars that take place between states are about conflicts they have between them. Yet this is a war about the existence of one state, which is denied by the aggressor. That's why the usual concepts of peacemaking — finding a compromise — do not apply. If Ukraine continues to exist as a sovereign state, Putin will have lost. He is not interested in territorial gain as such — it's rather a burden for him. He is only interested in controlling the entire country. Everything else for him is defeat." Ukraine expert Taras Kuzio added: "The real cause of today's crisis is Putin's quest to return Ukraine to the Russian orbit. For the past eight years, he has used a combination of direct military intervention, cyber-attacks, disinformation campaigns, economic pressure, and coercive diplomacy to try and force Ukraine into abandoning its Euro-Atlantic ambitions.... "Putin's ultimate objective is Ukraine's capitulation and the country's absorption into the Russian sphere of influence. His obsessive pursuit of this goal has already plunged the world into a new Cold War.... "Nothing less than Ukraine's return to the Kremlin orbit will satisfy Putin or assuage his fears over the further breakup of Russia's imperial inheritance. He will not stop until he is stopped. In order to achieve this, the West must become far more robust in responding to Russian imperial aggression, while also expediting Ukraine's own Euro-Atlantic integration." 4. NATO This theory holds that Putin invaded Ukraine to prevent it from joining NATO. The Russian president has repeatedly demanded that the West "immediately" guarantee that Ukraine will not be allowed to join NATO or the European Union. A vocal proponent of this viewpoint is the American international relations theorist John Mearsheimer, who, in a controversial essay, "Why the Ukraine Crisis Is the West's Fault," argued that the eastward expansion of NATO provoked Putin to act militarily against Ukraine: "The United States and its European allies share most of the responsibility for the crisis. The taproot of the trouble is NATO enlargement, the central element of a larger strategy to move Ukraine out of Russia's orbit and integrate it into the West.... "Since the mid-1990s, Russian leaders have adamantly opposed NATO enlargement, and in recent years, they have made it clear that they would not stand by while their strategically important neighbor turned into a Western bastion." In a recent interview with The New Yorker, Mearsheimer blamed the United States and its European allies for the current conflict: "I think all the trouble in this case really started in April 2008, at the NATO Summit in Bucharest, where afterward NATO issued a statement that said Ukraine and Georgia would become part of NATO." In fact, Putin has not always opposed NATO expansion. Several times he went so far as to say that the eastward expansion of NATO was none of Russia's concern. In March 2000, for instance, Putin, in an interview with the late BBC television presenter David Frost, was asked whether he viewed NATO as a potential partner, rival or enemy. Putin responded: "Russia is part of the European culture. And I cannot imagine my own country in isolation from Europe and what we often call the civilized world. So, it is hard for me to visualize NATO as an enemy." In November 2001, in an interview with National Public Radio, Putin was asked if he opposed the admission of the three Baltic states — Lithuania, Latvia and Estonia — into NATO. He replied: "We of course are not in a position to tell people what to do. We cannot forbid people to make certain choices if they want to increase the security of their nations in a particular way." In May 2002, Putin, when asked about the future of relations between NATO and Ukraine, said matter-of-factly that he did not care one way or the other: "I am absolutely convinced that Ukraine will not shy away from the processes of expanding interaction with NATO and the Western allies as a whole. Ukraine has its own relations with NATO; there is the Ukraine-NATO Council. At the end of the day the decision is to be taken by NATO and Ukraine. It is a matter for those two partners." Putin's position on NATO expansion radically changed after the 2004 Orange Revolution, which was triggered by Moscow's attempt to steal Ukraine's presidential election. A massive pro-democracy uprising ultimately led to the defeat of Putin's preferred candidate, Viktor Yanukovych, who eventually did become president of Ukraine in 2010 but was ousted in the 2014 Euromaidan Revolution. Former NATO Secretary-General Anders Fogh Rasmussen, in a recent interview with Radio Free Europe, discussed how Putin's views about NATO have changed: "Mr. Putin has changed over the years. My first meeting took place in 2002...and he was very positive regarding cooperation between Russia and the West. Then, gradually, he changed his mind. And from around 2005 to 2006, he got increasingly negative toward the West. And in 2008, he attacked Georgia.... In 2014, he took Crimea, and now we have seen a full-scale invasion of Ukraine. So, he has really changed over the years. "I think the revolutions in Georgia and Ukraine in 2004 and 2005 contributed to his change of mind. We shouldn't forget that Vladimir Putin grew up in the KGB. So, his thinking is very much impacted by that past. I think he suffers from paranoia. And he thought that after color revolutions in Georgia and Ukraine, that the aim [of the West] was to initiate a regime change in the Kremlin — in Moscow — as well. And that's why he turned against the West. "I put the blame entirely on Putin and Russia. Russia is not a victim. We have reached out to Russia several times during history.... First, we approved the NATO Russia Founding Act in 1997.... Next time, it was in 2002, we reached out once again, established something very special, namely the NATO-Russia Council. And in 2010, we decided at a NATO-Russia summit that we would develop a strategic partnership between Russia and NATO. So, time and again, we reached out to Russia. "I think we should have done more to deter Putin. Back in 2008, he attacked Georgia, took de facto Abkhazia and South Ossetia. We could have reacted much more determinedly already in that time." In recent years, Putin repeatedly has claimed that the post-Cold War enlargement of NATO poses a threat to Russia, which has been left with no other choice than to defend itself. He also has accused the West of trying to encircle Russia. In fact, of the 14 countries that have borders with Russia, only five are NATO members. The borders of those five countries — Estonia, Latvia, Lithuania, Norway and Poland — are contiguous with only 5% of Russia's total borders. Putin has claimed that NATO broke solemn promises it made in the 1990s that the alliance would not expand to the east. "You promised us in the 1990s that NATO would not move an inch to the east. You brazenly cheated us," he said in during a press conference in December 2021. Mikhail Gorbachev, then president of the Soviet Union, countered that such promises were never made. Putin recently issued three wildly unrealistic demands: NATO must withdraw its forces to its 1997 borders; NATO must not offer membership to other countries, including Finland, Sweden, Moldova or Georgia; NATO must provide written guarantees that Ukraine will never join the alliance. Writing for Foreign Affairs, Russian historian Dmitri Trenin, in an essay — "What Putin Really Wants in Ukraine" — argued that Putin wants stop NATO expansion, not to annex more territory: "Putin's actions suggest that his true goal is not to conquer Ukraine and absorb it into Russia but to change the post-Cold War setup in Europe's east. That setup left Russia as a rule-taker without much say in European security, which was centered on NATO. If he manages to keep NATO out of Ukraine, Georgia, and Moldova, and U.S. intermediate-range missiles out of Europe, he thinks he could repair part of the damage Russia's security sustained after the Cold War ended. Not coincidentally, that could serve as a useful record to run on in 2024, when Putin would be up for re-election." 5. Democracy This theory holds that Ukraine, a flourishing democracy, poses an existential threat to Putin's autocratic model of governance. The continued existence of a Western-aligned, sovereign, free and democratic Ukraine could inspire the Russian people to demand the same. Former U.S. Ambassador to Russia Michael McFaul and Robert Person, a professor at the United States Military Academy, wrote that Putin is terrified of democracy in Ukraine: "Over the last thirty years, the salience of the issue [NATO expansion] has risen and fallen not primarily because of the waves of NATO expansion, but due instead to waves of democratic expansion in Eurasia. In a very clear pattern, Moscow's complaints about NATO spike after democratic breakthroughs.... "Because the primary threat to Putin and his autocratic regime is democracy, not NATO, that perceived threat would not magically disappear with a moratorium on NATO expansion. Putin would not stop seeking to undermine democracy and sovereignty in Ukraine, Georgia, or the region as a whole if NATO stopped expanding. As long as citizens in free countries exercise their democratic rights to elect their own leaders and set their own course in domestic and foreign politics, Putin will keep them in his crosshairs.... "The more serious cause of tensions has been a series of democratic breakthroughs and popular protests for freedom throughout the 2000s, what many refer to as the "Color Revolutions." Putin believes that Russian national interests have been threatened by what he portrays as U.S.-supported coups. After each of them — Serbia in 2000, Georgia in 2003, Ukraine in 2004, the Arab Spring in 2011, Russia in 2011-12, and Ukraine in 2013-14 — Putin has pivoted to more hostile policies toward the United States, and then invoked the NATO threat as justification for doing so.... "Ukrainians who rose up in defense of their freedom were, in Putin's own assessment, Slavic brethren with close historical, religious, and cultural ties to Russia. If it could happen in Kyiv, why not in Moscow?" Ukraine expert Taras Kuzio agrees: "Putin remains haunted by the wave of pro-democracy uprisings that swept Eastern Europe in the late 1980s, setting the stage for the subsequent Soviet collapse. He sees Ukraine's fledgling democracy as a direct challenge to his own authoritarian regime and recognizes that Ukraine's historical closeness to Russia makes this threat particularly acute." 6. Energy Ukraine holds the second-biggest known reserves — more than one trillion cubic meters — of natural gas in Europe after Russia. These reserves, under the Black Sea, are concentrated around the Crimean Peninsula. In addition, large deposits of shale gas have been discovered in eastern Ukraine, around Kharkiv and Donetsk. In January 2013, Ukraine signed a 50-year, $10 billion deal with Royal Dutch Shell to explore and drill for natural gas in eastern Ukraine. Later that year, Kyiv signed a 50-year, $10 billion shale gas production-sharing agreement with the American energy company Chevron. Shell and Chevron pulled out of those deals after Russia annexed the Crimean Peninsula. Some analysts believe Putin annexed Crimea to prevent Ukraine from becoming a major oil and gas provider to Europe and thereby challenge Russia's energy supremacy. Russia, they argue, was also worried that as Europe's second-largest petrostate, Ukraine would have been granted fast-track membership to the EU and NATO. According to this theory, Russia's invasion of Ukraine is aimed at forcing Kyiv to officially acknowledge Crimea as Russian, and recognize the separatist republics of Donetsk and Lugansk as independent states, so that Moscow can legally secure control over the natural resources in these areas. 7. Water On February 24, the first day of the Russian invasion of Ukraine, Russian troops restored water flow to a strategically important canal linking the Dnieper River to Russian-controlled Crimea. Ukraine blocked the Soviet-era North Crimean Canal, which supplies 85% of Crimea's water needs, after Russia annexed the peninsula in 2014. The water shortages resulted in a massive reduction in agricultural production on the peninsula and forced Russia to spend billions of rubles each year to supply water from the mainland to sustain the Crimean population. The water crisis was a major source of tension between Ukraine and Russia. Ukrainian President Volodymyr Zelensky insisted that the water supply would not be restored until Russia returns the Crimean Peninsula. Security analyst Polina Vynogradova noted that any resumption of water supply would have amounted to a de facto recognition of Russian authority in Crimea and would have undermined Ukraine's claim to the peninsula. It would also have weakened Ukrainian leverage over negotiations on Donbas. Even if Russian troops eventually withdraw from Ukraine, Russia likely will maintain permanent control over the entire 400-kilometer North Crimean Canal to ensure there are no more disruptions to Crimea's water supply. 8. Regime Survival This theory holds that the 69-year-old Putin, who has been in power since 2000, seeks perpetual military conflict as a way of remaining popular with the Russian public. Some analysts believe that after public uprisings in Belarus and Kazakhstan, Putin decided to invade Ukraine due to a fear of losing his grip on power. In an interview with Politico, Bill Browder, the American businessman who heads up the Global Magnitsky Justice Campaign, said that Putin feels the need to look strong at all times: "I don't think that this war is about NATO; I don't think this war is about Ukrainian people or the EU or even about Ukraine; this war is about starting a war in order to stay in power. Putin is a dictator, and he's a dictator whose intention is to stay in power until the end of his natural life. He said to himself that the writing's on the wall for him unless he does something dramatic. Putin is just thinking short-term ... 'how do I stay in power from this week to the next? And then next week to the next?'" Anders Åslund, a leading specialist on economic policy in Russia and Ukraine, agreed: "How to understand Putin's war in Ukraine. It is not about NATO, EU, USSR or even Ukraine. Putin needs a war to justify his rule & his swiftly increasing domestic repression.... It is really all about Putin, not about neo-imperialism, Russian nationalism or even the KGB." Russia expert Anna Borshchevskaya wrote that the invasion of Ukraine could be the beginning of the end for Putin: "Though he is not democratically elected, he worries about public opinion and protests at home, seeing them as threats to retaining his grip on power.... While Putin may have hoped that invading Ukraine would quickly expand Russian territory and help restore the grandeur of the former Russian empire, it could do the opposite." Tyler Durden Tue, 03/15/2022 - 02:00.....»»

Category: blogSource: zerohedgeMar 15th, 2022

Ukraine"s Ministry of Defense posted a video of the Eiffel Tower getting blown up in a message apparently intended for NATO

"Just think if this were to happen to another European capital," the video's caption reads. The message urged NATO to "close the sky over Ukraine!" LONDON, UNITED KINGDOM - 2022/02/27: A protester holds a placard during the demonstration. Thousands of Ukrainians and their supporters gathered at Trafalgar Square to protest Russian invasion of Ukraine. They demanded the World to support and help Ukrainians to fight against the Russian troops.Hesther Ng/SOPA Images/LightRocket via Getty Images Ukraine's Ministry of Defense on Saturday posted a video showing the Eiffel Tower getting bombed. The video was intended to be a message for NATO.  "Just think if this were to happen to another European capital," a caption in the video reads. The Ministry of Defense of Ukraine posted a startling video to its Twitter on Saturday depicting a military attack on the Eiffel Tower in Paris. The 45-second video, intended to be a message for NATO, shows the Western city being bombed and urges NATO to "close the sky over Ukraine!""Just think if this were to happen to another European capital," a caption in the video said.—Defence of Ukraine (@DefenceU) March 12, 2022The video opens with a woman posing in front of the Eiffel Tower. Seconds later, an explosion rocks the city. At one point, flames surround the Eiffel Tower and several planes jet through the open sky.The camera pans from the Eiffel Tower to other French landmarks like the Sacré-Coeur basilica. Large plumes of smoke engulf the landmarks, and air raid sirens are heard in the distance. "We will fight to the end," reads a caption attributed to Ukrainian President Volodymyr Zelenskyy. "Just give us a chance to live. Close the sky over Ukraine or give us air fighters. If we fall, you fall."Zelenskyy has for days called on Western leaders to impose a no-fly zone. Last week, he reiterated that urge as he described in a video how eight Russian missiles "completely destroyed" an airport in Vinnytsia. Earlier this week, he rebuked NATO for deliberating on the decision to implement a no-fly zone, saying the inaction effectively gave Russia a "green light" to continue to strike at Ukraine. "All the people who will die from this day will die because of you, as well," Zelensky said. "Because of your weakness. Because of your disunity."NATO said implementing a no-fly zone would escalate the Ukraine-Russia conflict into "a full-fledged war in Europe, involving many more countries and causing much more human suffering." Last week, Russian President Vladimir Putin said any country that tries to impose a no-fly zone will be considered as "participants in a military conflict, and it doesn't matter members of which organizations they are.""It is impossible to do it, on the very territory of Ukraine, it's possible only from the territory of some neighboring states. But any movement in this direction will be considered by us as participation in an armed conflict," Putin added.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMar 14th, 2022

Sperry: Ukraine Worked With Democrats Against Trump In 2016 To Stop Putin -- And It Backfired Badly

Sperry: Ukraine Worked With Democrats Against Trump In 2016 To Stop Putin -- And It Backfired Badly Authored by Paul Sperry via RealClearInvestigations, Six years ago, before Russia’s full-scale invasion of their country, the Ukrainians bet that a Hillary Clinton presidency would offer better protection from Russian President Vladimir Putin, even though he had invaded Crimea during the Obama-Biden administration, whose Russian policies Clinton vowed to continue. Working with both the Obama administration and the Clinton campaign, Ukrainian government officials intervened in the 2016 race to help Clinton and hurt  Donald Trump in a sweeping and systematic foreign influence operation that's been largely ignored by the press. The improper, if not illegal, operation was run chiefly out of the Ukrainian Embassy in Washington, where officials worked hand-in-glove with a Ukrainian-American activist and Clinton campaign operative to attack the Trump campaign. The Obama White House was also deeply involved in an effort to groom their own favored leader in Ukraine and then work with his government to dig up dirt on – and even investigate -- their political rival. Ukrainian and Democratic operatives also huddled with American journalists to spread damaging information on Trump and his advisers – including allegations of illicit Russian-tied payments that, though later proved false, forced the resignation of his campaign manager Paul Manafort. The embassy actually weighed a plan to get Congress to investigate Manafort and Trump and stage hearings in the run-up to the election. As it worked behind the scenes to undermine Trump, Ukraine also tried to kneecap him publicly. Ukraine's ambassador took the extraordinary step of attacking Trump in an Op-Ed article published in The Hill, an influential U.S. Capitol newspaper, while other top Ukrainian officials slammed the GOP candidate on social media. Ukraine's ambassador to the U.S. attacked Trump in an Op-Ed weeks before the 2016 election. At first glance, it was a bad bet as Trump upset Clinton. But by the end of his first year in office, Trump had supplied Ukrainians what the Obama administration refused to give them: tank-busting Javelin missiles and other lethal weapons to defend themselves against Russian incursions. Putin never invaded on Trump's watch. Instead, he launched an all-out invasion during another Democratic administration – one now led by President Biden, Barack Obama's former Vice President, whose Secretary of State last year alarmed Putin by testifying, “We support Ukraine's membership in NATO.” Biden boasted he’d go “toe to toe” with Putin, but that didn't happen as the autocrat amassed tanks along Ukraine’s border in response to the NATO overtures. The Ukrainian mischief is part of Special Counsel John Durham’s broader inquiry – now a full-blown criminal investigation with grand jury indictments – into efforts to falsely target Trump as a Kremlin conspirator in 2016 and beyond. Sources say Durham has interviewed several Ukrainians, but it’s not likely the public will find out exactly what he's learned about the extent of Ukraine’s meddling in the election until he releases his final report, which sources say could be several months away. In the meantime, a comprehensive account of documented Ukrainian collusion – including efforts to assist the FBI in its 2016 probe of Manafort – is pieced together here for the first time. It draws from an archive of previously unreported records generated from a secret Federal Election Commission investigation of the Democratic National Committee that includes never-before-reviewed sworn affidavits, depositions, contracts, emails, text messages, legal findings and other documents from the case. RealClearInvestigations also examined diplomatic call transcripts, White House visitor logs, lobbying disclosure forms, congressional reports and closed-door congressional testimony, as well as information revealed by Ukrainian and Democratic officials in social media postings, podcasts and books. 2014: Prelude to Collusion U.S. envoys Victoria Nuland and Geoffrey Pyatt helped bring to power Ukraine's Petro Poroshenko, right. (AP) The coordination between Ukrainian and Democratic officials can be traced back at least to January 2014. It was then when top Obama diplomats – many of whom now hold top posts in the Biden administration – began engineering regime change in Kiev, eventually installing a Ukrainian leader they could control. On Jan. 27, U.S. Ambassador to Ukraine Geoffrey Pyatt phoned Assistant Secretary of State Victoria Nuland at her home in Washington to discuss picking opposition leaders to check the power of Ukrainian President Viktor Yanukovych, whom they believed was too cozy with Putin. “We’ve got to do something to make it stick together,” Pyatt said of a planned coalition government, adding that they needed “somebody with an international personality to come out here and help to midwife this thing.” Nuland responded that Biden’s security adviser Jake Sullivan had just told her that the vice president – who was acting as Obama’s point man in Ukraine – would give his blessing to the deal. “Biden’s willing,” she said. But they agreed they had to “move fast” and bypass the European Union. “Fuck the EU,” Nuland told the ambassador, according to a leaked transcript of their call. Hunter Biden: His father helped engineer the rise of an amenable Ukrainian leader who would later fire a prosecutor investigating the son.   Nuland’s role in the political maneuvering was not limited to phone calls. She traveled to Kiev and helped organize street demonstrations against Yanukovych, even handing out sandwiches to protesters. In effect, Obama officials greased a revolution. Within months, Yanukovych was exiled and replaced by Petro Poroshenko, who would later do Biden’s bidding – including firing a prosecutor investigating his son Hunter. Poroshenko would also later support Clinton's White House bid after Biden decided not to run, citing the death of his older son Beau. The U.S. meddling resulted in the installation of an anti-Putin government next door to Russia. A furious Putin viewed the interference as an attempted coup and soon marched into Crimea. Nuland is now Biden’s undersecretary of state and Sullivan serves as his national security adviser. Whispering in their ear at the time was a fiery pro-Ukraine activist and old Clinton hand, Alexandra “Ali” Chalupa. A daughter of Ukrainian immigrants, Chalupa informally advised the State Department and White House in early 2014. She organized multiple meetings between Ukraine experts and the National Security Council to push for Yanukovych’s ouster and economic sanctions against Putin. In the NSC briefings, Chalupa also agitated against longtime attorney-lobbyist Manafort, who at the time was an American consultant for Yanukovych's Party of Regions, which she viewed as a cat’s paw of Putin. She warned that Manafort worked for Putin’s interests and posed a national security threat. At the same time, Chalupa worked closely with then-Vice President Biden’s team, setting up conference calls with his staff and Ukrainians. Another influential adviser at the time was former British intelligence officer Christopher Steele, who provided Nuland with written reports on the Ukrainian crisis and Russia that echoed Chalupa’s warnings. Nuland treated them as classified intelligence, and between the spring of 2014 and early 2016, she received some 120 reports on Ukraine and Russia from Steele. 2015: The Move Against Manafort Commences Paul Manafort: Targeted by Chalupa over work for the ousted Ukrainian president and ties to Trump. (AP) In April 2015, the DNC hired Chalupa as a $5,000-a-month consultant, according to a copy of her contract, which ran through the 2016 election cycle. (Years earlier, Chalupa had worked full-time for the DNC as part of the senior leadership team advising Chairwoman Debbie Wasserman Schultz.) After Trump threw his hat in the ring in June 2015, Chalupa grew concerned that Manafort was or would be involved with his campaign since Manafort had known Trump for decades and lived in Trump Tower. She expressed her concerns to top DNC officials and “the DNC asked me to do a hit on Trump,” according to a transcript of a 2019 interview on her sister’s podcast. (Andrea Chalupa, who describes herself as a journalist, boasted in a November 2016 tweet: “My sister led Trump/Russia research at DNC.”) Chalupa began encouraging journalists both in America and Ukraine to dig into Manafort’s dealings in Ukraine and expose his alleged Russian connections. She fed unsubstantiated rumors, tips and leads to the Washington Post and New York Times, as well as CNN, speaking to reporters on background so a DNC operative wouldn’t be sourced. “I spent many, many hours working with reporters on background, directing them to contacts and sources, and giving them information,” Chalupa said. But no reporter worked closer with her than Yahoo News correspondent Michael Isikoff. He even accompanied her to the Ukrainian Embassy, where they brainstormed attacks on Manafort and Trump, according to FEC case files. Chalupa was also sounding alarm bells in the White House. In November 2015, for example, she set up a White House meeting between a Ukrainian delegation including Ukraine Ambassador Valeriy Chaly and NSC advisers – among them Eric Ciaramella, a young CIA analyst on loan to the White House who later would play a significant role as anonymous "whistleblower" in Trump’s first impeachment. In addition to Putin’s aggression, the group discussed the alleged security threat from Manafort. Chalupa was back in the White House in December. All told, she would visit the Obama White House at least 27 times, Secret Service logs show, including attending at least one event with the president in 2016. Eric Ciaramella (middle right) across from Ukrainians in a June 2015 meeting at the White House, flanked by Biden security adviser Michael Carpenter and Ciaramella's NSC colleague Liz Zentos. (unknownukraine.com) January 2016: High-Level Meetings With Ukrainians in the White House On Jan. 12, 2016 – almost a month before the first GOP primary – Chalupa told top DNC official Lindsey Reynolds she was seeing strong indications that Putin was trying to steal the 2016 election for Trump. Emails also show that she promised to lead an effort to expose Manafort – whom Trump would not officially hire as his campaign chairman until May – and link him and Trump to the Russian government. That same day, Chalupa visited the White House. A week later, Obama officials gathered with Ukrainian officials traveling from Kiev in the White House for a series of senior-level meetings to, among other things, discuss reviving a long-closed investigation into payments to American consultants working for the Party of Regions, according to Senate documents. The FBI had investigated Manafort in 2014 but no charges resulted. One of the attendees, Ukrainian Embassy political officer Andrii Telizhenko, recalled Justice Department officials asking investigators with Ukraine’s National Anti-Corruption Bureau, or NABU, if they could help find fresh evidence of party payments to such U.S. figures. (Three years later, Democrats would impeach Trump for allegedly asking Ukraine to dig up dirt on a political rival, Joe Biden.) The Obama administration’s enforcement agencies leaned on their Ukrainian counterparts to investigate Manafort, shifting resources from an investigation of a corrupt Ukrainian energy oligarch who paid Biden’s son hundreds of thousands of dollars through his gas company, Burisma. “Obama’s NSC hosted Ukrainian officials and told them to stop investigating Hunter Biden and start investigating Paul Manafort,” said a former senior NSC official who has seen notes and emails generated from the meetings and spoke on the condition of anonymity. Suddenly, the FBI reopened its Manafort investigation. “In January 2016, the FBI initiated a money laundering and tax evasion investigation of Manafort predicated on his activities as a political consultant to members of the Ukrainian government and Ukrainian politicians,” according to a report by the Justice Department’s watchdog. The White House summit with Ukrainian officials ran for three days, ending on Jan. 21, according to a copy of the agenda stamped with the Justice Department logo. It was organized and hosted by Ciaramella and his colleague Liz Zentos from the NSC. Other U.S. officials included Justice prosecutors and FBI agents, as well as State Department diplomats. The Ukrainian delegation included Artem Sytnyk, the head of NABU, and other Ukrainian prosecutors. Ciaramella was a CIA detailee to the White House occupying the NSC’s Ukraine desk in 2015 and 2016. In that role, Ciaramella met face-to-face with top Ukrainian officials and provided policy advice to Biden through the then-vice president's security adviser Michael Carpenter. He also worked with Nuland and Chalupa.Ciaramella was carried over to the Trump White House. As RealClearInvestigations first reported, he would later anonymously blow the whistle on Trump asking Ukraine’s new president, Volodymyr Zelensky, to help “get to the bottom of” Ukrainian meddling in the 2016 election, a phone call that triggered Trump’s first impeachment by a Democrat-controlled House. Ciaramella’s former NSC colleague Alexander Vindman leaked the call to him. Vindman, a Ukrainian-American, is also aligned with Chalupa. (Vindman is now back in the news for his demands that the United States provide more active military support to Ukraine and his insistence that Trump shares great blame for the war.) As Manafort drew closer to Trump, Obama officials zeroed in, and the FBI reopened a closed 2014 probe. (Justice Department Office of the Inspector General) February 2016: Obama White House-Ukraine Coordination Intensifies On Feb. 2, two weeks after the White House meetings, Secret Service logs reveal that Ciaramella met in the White House with officials from the U.S. Treasury Department’s Financial Crimes Enforcement Network, known as FinCEN, which would later provide the FBI highly sensitive bank records on Manafort. (In addition, a senior FinCEN adviser illegally leaked thousands of the confidential Manafort records to the media.) On Feb. 9, less than a month after the White House summit, Telizhenko, who worked for the Ukrainian Ministry of Foreign Affairs, met with Zentos of the NSC at a Cosi sandwich shop in Washington, according to emails obtained by the Senate. It's not known what they discussed. In addition, on Feb. 23, the two emailed about setting up another meeting the following day. “OK if I bring my colleague Eric, who works on Ukraine with me?” Zentos asked Telizhenko, apparently referring to Ciaramella. In the emails, they discussed the U.S. primary elections, among other things. NSC's Zentos and Ukraine's Telizhenko would meet and correspond numerous times during 2016. (HSGAC-Finance Committee Hunter Biden Report) Telizhenko would later testify that Ambassador Chaly had ordered him then to “start an investigation [into the Trump campaign] within the embassy just on my own to find out with my contacts if there’s any Russian connection that we can report back.” He suspects the Ambassador delivered that report to Chalupa and the DNC. Chalupa visited the White House on Feb. 22, entrance records show, just days before the second meeting Telizhenko had planned with Zentos. March 2016: Chalupa Engineers Manafort Messaging Assault With Ukrainians After Manafort was named Trump campaign chair, the campaign against him went into overdrive. New York Times On March 3, Zentos and Telizhenko planned to meet again, this time at a Washington bar called The Exchange. According to their email, Zentos wrote, “I’ll see if my colleague Eric is up for joining.” The pair also met the next day at Swing’s coffee house in Washington. After the meeting, Telizhenko emailed Zentos seeking a meeting with senior Obama NSC official Charlie Kupchan, an old Clinton hand who was Ciaramella’s boss on the Russia/Ukraine desk. Kupchan is an outspoken critic of Trump who has made remarks suggesting what countries “can do to stop him” and “protect the international institutions we’ve built .” Zentos and Telizhenko also met on March 10, patronizing the Cosi coffee shop again. On March 24, 2016, four days before the Trump campaign announced that it had hired Manafort, Chalupa met at the Ukrainian Embassy with Ambassador Chaly and his political counselor Oksana Shulyar, where they shared their concerns about Manafort, according to Politico. When news broke on March 28 that Manafort was joining the Trump campaign, Chalupa could hardly contain herself. “This is huge,” she texted senior DNC officials. “This is everything to take out Trump.” She immediately began circulating anti-Manafort memos, warning the DNC of the “threat” he posed of Russian influence. The next day, March 29, she briefed the DNC communications team about Manafort. They, in turn, hatched a plan to reach out to the Ukrainian Embassy to get President Porochenko to make an on-camera denouncement of Manafort and feed the footage to ABC News, where former Clinton aide George Stephanopoulos works as a top anchor. On March 30, Chalupa fired off an email to Shulyar, her contact at the Ukrainian Embassy: "There is a very good chance that President Poroshenko may receive a question from the press during his visit about the recent New York Times article saying that Donald Trump hired Paul Manafort as an adviser to his campaign and whether President Poroshenko is concerned about this considering Trump is the likely Republican nominee and given Paul Manafort’s meddling in Ukraine over the past couple of decades,” Chalupa wrote. "It is important President Poroshenko is prepared to address this question should it come up. In a manner that exposes Paul Manafort for the problems he continues to cause Ukraine." Within minutes of sending the email, Chalupa wrote the DNC’s communications director Luis Miranda, “The ambassador has the messaging.” Then she reached out to a friend in Congress, Democratic Rep. Marcy Kaptur of Ohio, about holding hearings to paint Manafort as a pro-Kremlin villain. April 2016: Chalupa Solicits Ukrainian Dirt on Trump, His Campaign, and Manafort Though accounts differ, Chalupa discussed Trump dirt with Ukrainian representatives. Federal Election Commission American presidential campaigns aren't supposed to work with foreign governments to dig up dirt on their political opponents. Geneva Convention rules bar diplomats from becoming entangled in their host country’s political affairs, particularly elections. There are also federal laws banning foreign nationals from engaging in operations to influence or interfere with U.S. political and electoral processes. In 2018, Special Counsel Robert Mueller indicted 13 Russian nationals on charges of conspiring to defraud the U.S. government for that purpose. But just weeks after Manafort was hired by the Trump campaign, the Ukrainian Embassy appeared to be working with the Clinton campaign to torpedo him and the campaign. Emails reveal that Chalupa and Shulyar, a top aide to Ambassador Chaly, agreed to meet for coffee on April 7, 2016, at Kafe Leopold, a restaurant near the Ukrainian Embassy in Washington. (Chalupa had paid a visit to the White House just three days earlier.) One of the purposes of the meeting, according to FEC case files, was to discuss Manafort and the danger he allegedly posed. They were joined at the café by Telizhenko, who said he was working on a “big story” on Manafort and Trump with the Wall Street Journal. In a sworn 2019 deposition taken by the FEC, Telizhenko alleged that Chalupa solicited “dirt” on Trump, Manafort, and the Trump campaign during the meeting. Telizhenko also testified that Chalupa told him that her goal was “basically [to] use this information and have a committee hearing under Marcy Kaptur, congresswoman from Ohio, in Congress in September and take him off the elections." Telizhenko later approached Ambassador Chaly about the DNC representative's overtures and he responded: “Yes. And I know that this is happening. You should work with her." After speaking with Chaly, Telizhenko claims that he went back to Shulyar who instructed him to help Chalupa. “I went to Oksana and said, ‘Like what are we doing?’” he testified. " And she told me, ‘You have to work with Chalupa. And any information you have, you give it to me, I’ll give it to her, then we’ll pass it on later to anybody else we are coordinating with.’” Less than a week later, on April 13, Telizhenko met again with White House official Zentos, email records reveal. Telizhenko said he resigned the next month because of concerns regarding his embassy’s work with Chalupa and the Clinton team. In her sworn account of the meeting, Chalupa acknowledged discussing Manafort and the “national security problem” he allegedly presented, but denied asking the embassy for help researching him. She allowed that she “could have mentioned the congressional investigation … that I had talked to Marcy Kaptur,” but maintained she couldn't recall trying to enlist the embassy in the effort. Shulyar, however, clearly recalls that Chalupa sought the embassy’s help warning the public about Manafort – including pitching stories to the press and lobbying Congress, according to a 2020 written statement to the FEC. An “idea floated by Alexandra Chalupa was that we approach a co-chair of the Congressional Ukraine Caucus to initiate a congressional hearing on Paul Manafort,” Shulyar said, though she denied the embassy acted on the idea. Around the same time, two Ukrainian lawmakers – Olga Bielkova and Pavlo Rizanenko – visited the U.S. and met with journalists, as well as a former State Department official with close ties to Sen. John McCain – David Kramer of the McCain Institute. Kramer would later leak the entire Steele dossier to the media. The meeting was arranged by major Clinton Foundation donor Victor Pinchuk, a Ukrainian oligarch who lobbied Clinton when she was Obama’s secretary of state. Bielkova was also connected to the Clinton Foundation, having once managed a Clinton Global Initiative program for Ukrainian college students. While Clinton was at Foggy Bottom from 2009 to 2013, Ukrainians gave more money – at least $10 million, including more than $8 million from Pinchuk – to the Clinton Foundation than any other nationality including Saudi Arabians. Pinchuk's donation was a down payment on an astounding $29 million pledge. On April 12, 2016, Bielkova also attended a meeting with Ciaramella and his NSC colleague Zentos, head of the Eastern Europe desk, according to lobbying disclosure records. In late April, Chalupa helped organize a Ukrainian-American protest against Manafort in his Connecticut hometown. Activists shouted for Trump to fire Manafort, whom they called “Putin’s Trojan Horse,” while holding signs that read: “Shame on Putin, Shame on Manafort, Shame on Trump” and “Putin, Hands Off the U.S. Election.” Chalupa also organized social media campaigns against Manafort and Trump, including one that encouraged activists to share the Twitter hashtags: “#TrumpPutin” and "#Treasonous Trump." Also that month, Chalupa reached out to Yahoo News reporter Isikoff to pitch a hit piece on Manafort. She connected him with a delegation of Ukrainian journalists visiting D.C. Isikoff would later be used by Steele to spread falsehoods from his dossier. May-June 2016: Manafort Dirt Spreads In a May 3 email, Chalupa alerted DNC communications director Luis Miranda and DNC opposition research director Lauren Dillion that there was “a lot more [dirt on Manafort] coming down the pipe[sic].” Chalupa told them the dirt has “a big Trump component” and would “hit in the next few weeks.” It’s not clear if she was referring to the notorious "black ledger” smear against Manafort, who was promoted to campaign chairman on May 19, but a story about it was brewing at the time. On May 30, Nellie Ohr, an opposition researcher for the Clinton-retained firm Fusion GPS, emailed her husband, Bruce Ohr, a top official at the Justice Department who would become a prime disseminator of the Steele dossier within the government, and two federal prosecutors to alert them to an article indicating NABU had suddenly discovered documents allegedly showing Manafort receiving illicit payments. Amid the flurry of anti-Manafort activity, Zentos met again with Telizhenko on May 4, records show. And Chalupa visited the White House for a meeting on May 13. Chalupa paid another visit to the White House on June 14, Secret Service logs show. On June 17, Ciaramella held a White House meeting with Nuland and Pyatt of the State Department to discuss undisclosed Ukrainian matters. In late June, the FBI signed an evidence-sharing agreement with NABU, less than two months before the Ukrainian anti-corruption agency released what it claimed was explosive new evidence on Manafort. July 2016: Ukrainian Officials Attack Trump Publicly Chalupa continued to pow-wow with the Ukrainian Embassy and got so cozy with officials there that they offered her a position, which she declined, as an “embedded consultant” in the country’s Ministry of Foreign Affairs. That same month, high-ranking Ukrainian officials openly insulted Trump on social media in an unusual departure from normal diplomacy. For instance, Ukraine Minister of Internal Affairs Arsen Avakov tweeted that Trump was a “clown” who was “an even bigger danger to the U.S. than terrorism.” In another July post, he called Trump “dangerous for Ukraine.” And on Facebook, Ukrainian Prime Minister Arseny Yatseniuk warned that Trump had “challenged the very values of the free world." (After Trump upset Clinton, Avakov and other officials tried to delete their statements from their social network accounts, saying that they had been wrong and had rushed to conclusions.) “It was clear that they were supporting Hillary Clinton’s candidacy,” Ukrainian lawmaker Andriy Artemenko told Politico. “They did everything from organizing meetings with the Clinton team to publicly supporting her to criticizing Trump." While attending the Democratic convention in Philadelphia, Chalupa spread the scurrilous rumor that Manafort was the mastermind behind the alleged Russian hacking of the DNC and that he “stole" her and other Democrats’ emails. She later told her sister’s podcast that she had reported her conspiracy theory to the FBI, eventually sitting down and meeting with agents in September to spin her tale of supposed espionage (the Senate has asked the FBI for copies of her interview summaries, known as FD-302s). Chalupa also prepared a report for the FBI, as well as members of Congress, detailing her Russiagate conspiracy theories, which Mueller later found no evidence to support. In addition, Chalupa helped spread a false narrative that Trump removed a reference to providing arms to Kiev from the Republican platform at the party's convention earlier that month. Internal platform committee documents show the Ukraine plank could not have been weakened as claimed, because the “lethal” weapons language had never been part of the GOP platform. The final language actually strengthened the platform by pledging direct assistance not just to the country of Ukraine, but to its military in its struggle against Russian-backed forces. August-September 2016: The Phony Manafort Ledger Leaks  A page released by Ukrainian authorities from the fake Manafort ledger. New York Times/NABU In another attempt to influence the 2016 election, Ukrainian lawmaker Serhiy Leshchenko leaked to the U.S. media what he claimed was evidence of a secret handwritten ledger showing Manafort had received millions in cash from Yanukovych’s party under the table. He claimed that 22 pages of the alleged ledger, which contained line items written by hand, had mysteriously appeared in his parliament mailbox earlier that year. Leshchenko would not identify the sender. A fuller copy of the same document showed up later on the doorstep of a Ukrainian intelligence official who passed it to NABU, which shared it with FBI agents stationed in Kiev. Leshchenko and NABU officials held press conferences declaring the document was “proof" of Manafort corruption and demanding he be “interrogated.” The Clinton campaign seized on the story. In an Aug. 14 statement, campaign manager Robby Mook stated: “We have learned of more troubling connections between Donald Trump's team and pro-Kremlin elements in Ukraine.” He demanded Trump "disclose campaign chair Paul Manafort's and all other campaign employees' and advisers' ties to Russian or pro-Kremlin entities." But there was a big hole in the story. Though Manafort was a consultant to Yanukovych's party, he was paid by wire, not in cash, casting serious doubt on the ledger’s authenticity. Another problem: the ledger was alleged to have been kept at party headquarters, but rioters had destroyed the building in a 2014 fire. Leshchenko admitted that he had a political agenda. He told The Financial Times at the time that he went public with the ledger because “a Trump presidency would change the pro-Ukrainian agenda in American foreign policy.” He added that most of Ukraine’s politicians are “on Hillary Clinton’s side." Leshchenko also happened to be "a source for Fusion GPS,” as Nellie Ohr confirmed under questioning during a 2019 closed-door House hearing, according to a declassified transcript. Fusion was a paid agent of the Clinton campaign, which gave the private opposition-research firm more than $1 million to gin up connections between Trump and Russia. Fusion hired Steele to compile a series of “intelligence” memos known as the dossier. As a former MI6 operative, Steele gave the allegations a sheen of credibility. FBI counterintelligence veteran Mark Wauck said the dossier and the black ledger both appear to have originated with Fusion GPS, which laundered it through foreigners who hated Trump – Steele and Leshchenko. "The ledger and the dossier are both Fusion hit jobs,” Wauck said. “The two items shared a common origin: the Hillary campaign’s oppo research shop." In an August 2016 memo written for Fusion GPS, “The Demise of Trump’s Campaign Manager Paul Manafort,” Steele claimed he had corroborated Leshchenko’s charges through his anonymous Kremlin sources, who turned out to be nothing more than beer buddies of his primary source collector, Igor Danchenko, a Russian immigrant with a string of arrests in the U.S. for public intoxication, as RealClearInvestigations first reported. Danchenko had worked for the Brookings Institution, a Democratic think tank in Washington that Durham has subpoenaed in connection to its own role in Russiagate. Danchenko was indicted last year by Special Counsel Durham for lying about his sources, including one he completely made up, as RCI reported. “YANUKOVYCH had confided in PUTIN that he did authorize and order substantial kick-back payments to MANAFORT as alleged,” Steele claimed in the unsubstantiated report, citing “a well-placed Russian figure” with knowledge of a "meeting between PUTIN and YANUKOVYCH” allegedly “held in secret” on Aug. 15. As a paid informant, Steele had long reported to the FBI about alleged corruption involving Yanukovych. The FBI used his Clinton-funded dossier as a basis to obtain warrants to spy on former Trump adviser Carter Page, including the false claim that Page acted as an intermediary between Russian leadership and Manafort in a “well-developed conspiracy of cooperation” that included sidelining Russian intervention in Ukraine as a campaign issue. Steele also falsely claimed that Page had helped draft the RNC platform statement to be more sympathetic to Russia’s interests by eliminating language about providing weapons to Ukraine, according to a report by the Department of Justice's watchdog. In fact, Page was not involved in the GOP platform. The misinformation came from Danchenko’s fictional source. Fusion co-founder Glenn Simpson worked closely with the New York Times on the Manafort ledger story. In his book, “Crime in Progress,” Simpson boasts of introducing Leshchenko to the Times as a source, who ended up providing the paper some of the dubious ledger records. On Aug. 19, Manafort stepped down from the Trump campaign the day after the Times reported what it had been fed by the anti-Trump operatives. In effect, Ukrainian government officials tried to help Clinton and undermine Trump by disseminating documents implicating a top Trump aide in corruption and telling the American media they were investigating the matter. In 2018, a Ukrainian court ruled that Leshchenko and NABU’s Sytnyk illegally interfered in the 2016 U.S. election by publicizing the black ledger. Among the evidence was a recording of Sytnyk saying the agency released the ledger to help Clinton’s campaign – “I helped her,” Sytnyk is recorded boasting. But the damage was done. The Ukrainians, along with Chalupa and the Clinton camp, achieved their goal of undermining the Trump campaign by prompting Manafort’s ouster though they never proved he was colluding with the Russians. Neither did Special Counsel Mueller. In fact, Mueller did not use the ledger to prosecute Manafort after a key witness for the prosecution told him it was fabricated. “Mueller ended up dropping it like a hot potato,” Wauck said.  Ukraine’s neutrality in the election was also called into further question that September, when Porochenko met with Clinton during a stop in New York. He never met with Trump, who appeared to get the cold shoulder from the Ukrainian leader. In statements following Trump’s surprise victory over Clinton in November, Ukraine’s embassy has denied interfering in the election and insisted that Chalupa was acting on her own. Epilogue After Trump won the election in spite of her efforts to sabotage him, Chalupa predicted: “Under President Trump, the Kremlin could likely invade U.S. allies in Europe without U.S. opposition.” Not only did Russia not invade Europe “under Trump,” it didn’t even invade Ukraine. Rather, the invasion came under Biden, whose campaign Chalupa supported. Yet she continues to blame Trump. Recent tweets show a still-obsessed Chalupa has not dialed back her extremist views about Trump or Manafort, whom she believes should be prosecuted for “treason." In a Feb. 28 post on Twitter, for example, Chalupa claimed that Putin installed “a puppet regime in the U.S. with the help of Paul Manafort.” The previous day, she tweeted, “We had a Putin installed Trump presidency.” A day before that, she wrote: “Now would be a good time to release the Putin-Trump treason calls.” And on Feb. 25, Chalupa tweeted another wild conspiracy theory: "It’s important to note that Putin’s imperial aspirations are of a global criminal empire, as we saw when he installed Donald J. Trump president and tried to turn the U.S. into a Russian satellite state." Tyler Durden Fri, 03/11/2022 - 19:00.....»»

Category: dealsSource: nytMar 11th, 2022

ADTRAN (ADTN) Gains on Strong Collaborations, Tech Innovation

ADTRAN (ADTN) is likely to be a promising investment option on the back of its growing partnerships with several telcos supported by an array of innovative solutions. At a time when telcos are inundated with requests to provide crucial connectivity services to support businesses amid the COVID-19 pandemic, the need for an efficient network services provider holds utmost importance. One such company is ADTRAN, Inc. ADTN, which is gaining significant momentum in the global market, thanks to its diverse portfolio of innovative networking solutions, accretive collaborations and back-to-back network deployments.The Huntsville, AL-based network service provider’s end-to-end solutions simplify the deployment of fiber-based broadband services and provide a better customer experience with differentiated product offerings. ADTRAN operates in two business segments — Network Solutions, and Services and Support. Network Solutions includes hardware and software products. The Services and Support unit include consulting and network implementation, among other services.Growing Partner Ecosystem Bodes WellIncreasing network deployments are the reason behind ADTRAN’s thriving community of partners. Few days back, it had partnered with Sonic, an Internet Service Provider (ISP), to enhance the latter’s network infrastructure with the deployment of Total Access 5000 10G fiber access platform and Combo PON technology. The deployment has helped the ISP to augment its fiber network in the highly-competitive region of Oakland, CA and expand its market share, while supporting the latest broadband technologies.ADTRAN also secured multiple partnerships with service providers to deploy its highly-scalable fiber access network in the rural regions of the U.K. It has collaborated with Alncom, Wildanet, and Netomnia. The alliances helped in bridging the digital divide on the back of a cost-effective fiber-to-the-home network, thereby delivering exceptional broadband experiences to customers based in the underserved areas of the European country.In a landmark move, ADTRAN had inked a definitive agreement to acquire ADVA Optical Networking SE in an all-stock deal. The transaction aims to leverage ADTRAN’s expertise in fiber access, fiber extension and subscriber connectivity solutions with ADVA’s global leadership in metro wavelength division multiplexing, data center interconnect, business ethernet and network synchronization solutions to create a comprehensive portfolio of fiber networking products.The transaction is expected to be completed in mid-2022, subject to the fulfillment of mandatory closing conditions and other regulatory approvals. The combined company is likely to be renamed ADTRAN Holdings Inc. with its global headquarters in Huntsville, AL, and European headquarters in Munich, Germany. The development is pursuant to an exchange offer of all the outstanding shares of ADVA. Post the completion of the deal, ADTRAN shareholders will own approximately 54% of the combined company with the remainder being owned by ADVA shareholders. The combined entity is expected to generate $52 million in pre-tax annual cost synergies within the first two years of operation, driven by supply chain efficiencies and optimization of resources.ADTRAN had announced its membership in a Germany-based fiber optic consortium — BUGLAS. The company has been a prominent broadband equipment developer in Germany for a long time. As part of the collaboration, ADTRAN is primarily focused on establishing a streamlined connectivity infrastructure with a superior fiber broadband delivery. It is also supporting alternative networks in the European country to address the accretive demands of high-speed bandwidth driven by sustainable broadband access technology.Innovation is the KeyADTRAN’s products and services provide solutions that support fiber- and copper-based infrastructures as well as a growing number of wireless and coax-based solutions. The company’s solutions lower the overall cost to deploy advanced services across a wide range of applications. It has a major role to play when it comes to eliminating digital disparity by deploying high-speed connectivity in rural areas.A few months back, it had unveiled Total Access 5004 Micro-Cabinet. The avant-garde fiber access platform enables rural, last-mile subscriber reach deployments and drives time-to-market for broadband services delivery. To enhance end-to-end broadband access solutions with advanced software capabilities, ADTRAN extended its avant-garde Mosaic One platform by launching three intelligent applications.Dubbed Mosaic One Promote, Mosaic One Care and Mosaic One Operate, these offerings are best known for service optimization with the widest gigabit broadband coverage. It monetizes networks by facilitating service providers to unlock new revenue streams and enhance competitiveness to deliver an improved broadband experience.The company is focused on being a top global supplier of access infrastructure and related value-added solutions from the Cloud Edge to the Subscriber Edge through a broad portfolio of flexible hardware and software network solutions. These products enable customers to transition to the fully converged, scalable, highly automated, cloud-controlled voice, data, Internet and video network of the future. Moreover, ADTRAN expects solid traction in its domestic markets for ultra-broadband and fiber-to-the-home solutions. The company also anticipates a pickup in capital spending in Tier-1, Tier-2 and the regional service provider market segments.Wrapping UpDriven by such focused endeavors, ADTRAN is well poised to optimize its customer, regional and product diversity momentum. The company expects to gain from high customer engagements across its portfolio of software-defined access, 10G solutions and G.fast products. Its network implementation services provide speed and scale to build fiber and fixed wireless networks. This enables service providers to reach more customers and expand their competitive edge. Also, back-to-back technological collaborations and its strategy to diversify across regions and markets are commendable.Some prominent players in the broader industry are Viasat, Inc. VSAT, Clearfield, Inc. CLFD, and Wireless Telecom Group, Inc. WTT.Viasat delivered a trailing four-quarter earnings surprise of 373.3%, on average.Clearfield pulled off a trailing four-quarter earnings surprise of 49%, on average.Wireless Telecom delivered a trailing four-quarter earnings surprise of 27.5%, on average. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ADTRAN, Inc. (ADTN): Free Stock Analysis Report Viasat Inc. (VSAT): Free Stock Analysis Report Clearfield, Inc. (CLFD): Free Stock Analysis Report Wireless Telecom Group, Inc. (WTT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksOct 15th, 2021

The "Great Game" Moves On

The 'Great Game' Moves On Authored by Alasdair Macleod via GoldMoney.com, Following America’s withdrawal from Afghanistan, her focus has switched to the Pacific with the establishment of a joint Australian and UK naval partnership. The founder of modern geopolitical theory, Halford Mackinder, had something to say about this in his last paper, written for the Council on Foreign Relations in 1943. Mackinder anticipated this development, though the actors and their roles at that time were different. In particular, he foresaw the economic emergence of China and India and the importance of the Pacific region. This article discusses the current situation in Mackinder’s context, taking in the consequences of green energy, the importance of trade in the Pacific region, and China’s current deflationary strategy relative to that of declining western powers aggressively pursuing asset inflation. There is little doubt that the world is rebalancing as Mackinder described nearly eighty years ago. To appreciate it we must look beyond the West’s current economic and monetary difficulties and the loss of its hegemony over Asia, and particularly note the improving conditions of the Asia’s most populous nations. Introduction Following NATO’s defeat in the heart of Asia, and with Afghanistan now under the Taliban’s rule, the Chinese/Russian axis now controls the Asian continental mass. Asian nations not directly related to its joint hegemony (not being members, associates, or dialog partners of the Shanghai Cooperation Organisation) are increasingly dependent upon it for trade and technology. Sub-Saharan Africa is in its sphere of influence. The reality for America is that the total population in or associated with the SCO is 57% of the world population. And America’s grip on its European allies is slipping. NATO itself has become less relevant, with Turkey drawn towards the rival Asian axis, and its EU members are compromised through trading and energy links with Russia and China. Furthermore, France is pushing the EU towards establishing its own army independent of US-led NATO — quite what its role will be, other than political puffery for France is a mystery. It is against this background that three of the Five Eyes intelligence partnership have formed AUKUS – standing for Australia, UK, and US — and its first agreement is to give Australia a nuclear submarine capability to strengthen the partnership’s naval power in the Pacific. Other capabilities, chiefly aimed at containing the Chinese threat to Taiwan and other allies in the Pacific Ocean, will surely emerge in due course. The other two Five Eyes, Canada and New Zealand, appear to be less keen to confront China. But perhaps they will also have less obvious roles in due course beyond pure intelligence gathering. The US, under President Trump, had failed to contain China’s increasing economic dominance and its rapidly developing technological challenge to American supremacy. Trump’s one success was to peel off the UK from its Cameron/Osbourne policy of strengthening trade and financial ties with China by threatening the UK’s important role in its intelligence partnership with the US. For the UK, the challenge came at a critical time. Brexit had happened, and the UK needed global partners for its future trade and geopolitical strategies, the latter needed to cement its re-emergence onto the world stage following Brexit. Trump held out the carrot of a fast-tracked US/UK trade deal. The Swiss alternative of neutrality in international affairs is not in the UK’s DNA, so realistically the decision was a no-brainer: the UK had to recommit itself entirely to the Anglo-Saxon Five-Eyes partnership with the US, Canada, Australia, and New Zealand and turn its back on China. But gathering intelligence and building naval power in the Pacific won’t defeat the Chinese. All simulations show that the US, with or without AUKUS, cannot win a military conflict against China. But AUKUS is not a formal model on NATO lines which commits its members by treaty to aggression against a common enemy. While Taiwan remains a specific problem, the objective is almost certainly to discourage China from territorial expansion and protect and give other Pacific nations on the Asian periphery the security to be independent from the SCO behemoth. The trade benefits of closer relationships with these independent nations are also an additional reason for the UK to join the CPTPP — the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. It qualifies for membership through its sovereignty over the Pitcairn Islands. And that is why China has also applied to join. Therefore, AUKUS’s importance is in the signal sent to China and the whole Pacific region, following the abandonment of land-based operations in the Middle East and Afghanistan. The maritime threat to China is a line which must not be crossed. We are entering a new era in the Great Game, where the objective has changed from dominance to containment. Having lost its position of ultimate control in the Eurasian land mass America has selected its partners to retain control over the high seas. And the UK has found a new geopolitical purpose, re-establishing a global role now that it is independent from the EU. The French cannot join the CPTPP being bound into the common trade policies of the EU. Seeing the British escape the strictures of the EU and rapidly obtain more global influence than France could dream of has touched a raw nerve. Mackinder vindicated The father of geopolitics, Halford Mackinder, is frequently quoted and his theories are still relevant to the current situation. Much has been written about Mackinder’s prophecies. His concept of the World Island was first mentioned in his 1904 presentation to the Royal Geographic Society in London: “a pivot state, resulting in its expansion over the marginal lands of Euro-Asia”. In 1943 he updated his views in an article for the Council on Foreign Relations, adding to his heartland theory. Written during the Second World War, his commentary reflected the combatants and their positions at that time. But despite this, he made a perceptive comment relative to the situation today and AUKUS: “Were the Chinese for instance organised by the Japanese to overthrow the Russian Empire and conquer its territory they might constitute the yellow peril to the world’s freedom just because they would add an oceanic frontage to the resources of the great continent.” When Mackinder wrote his article the Japanese had already invaded Manchuria, but their subsequent defeat removed them from an active geopolitical role, and in place of a Soviet defeat China has entered a peaceful partnership with Russia that extends to all its old Central Asian soviet satellites. It is the focus on the ocean frontage that matters, upon which the maritime silk road depends. The article brings into play another aspect mentioned by Mackinder, and that is the Heartland’s tremendous natural resources, “…including enough coal in the Kuznetsk and Krasnoyarsk basins capable of supplying the requirements of the whole world for 300 years”. And: “In 1938 Russia produced more of the following food stuffs than any other country in the world: wheat, barley, oats, rye, and sugar beets. More manganese was produced in Russia than in any other country. It was bracketed with United States in the first place as regards iron and it stood second place in production of petroleum”. Through its partnership with Russia all these latent resources are available to the Chinese and Russian partnership. And the real potential for industrialisation, held back by communism and now by Russian corruption, has barely commenced. After presciently noting that one day the Sahara may become the trap for capturing direct power from the sun (foreseeing solar panels), Mackinder’s article ended on an optimistic note: “A thousand million people of ancient oriental civilisation inhabit the monsoon lands of India and China [today 3 billion, including Pakistan]. They must grow to prosperity in the same years in which Germany and Japan are being tamed to civilisation. They will then balance that other thousand million who live between the Missouri and the Yenisei [i.e., Central and Eastern America, Britain, Europe and Russia beyond the Urals]. A balanced globe of human beings and happy because balanced and thus free.” Both China and now India are rapidly industrialising, becoming part of a balanced globe of humanity. While the West tries to hang on to what it has got rather than progressing, China and India along with all of under-developed Asia are moving rapidly in the direction of individual freedom of economic choice and improvements in living conditions, to which Mackinder was referring. Obviously, there is some way for this process yet to go, displacing western hegemony in the process. America particularly has found the political challenges of change difficult, with its deep state unable to come to terms easily with the implications for its military and economic power. We must hope that Mackinder was right, and the shift of economic power is best to be regarded as the pains of geopolitical evolution rather than conditions for escalating conflict. But in pursuing its green agenda and eschewing carbon fuels, the West is unwittingly handing a gift to Mackinder’s Heartland, because despite diplomatic noises to the contrary China, India and all the SCO membership will continue to use cheap coal, gas, and oil which Asia has in abundance while Western manufacturers are forced by their governments to use expensive and less reliable green energy. Green obsessions and global trade Meanwhile, the West has gone green-crazy. Banning fossil fuels without there being adequate replacements must be a new definition of insanity, for which the current fuel crises in Europe attest. With over 95% of European logistics currently being shifted by diesel power, switching to battery power or hydrogen by 2030 by banning sales of new internal combustion engine vehicles is a hostage to fortune. While it is hardly mentioned, presumably the Western powers think that by banning carbon fuels they will take the wind out of Russia’s energy quasi-monopoly, because including gas Russia is the largest exporter of fossil fuels in the world. Instead, the West is creating an energy shortage for itself, a point driven home by Gazprom withholding gas flows through its pipelines to Europe, thereby driving up Europe’s energy costs sharply and ensuring a far more severe energy crisis this winter. Even if Russia turns on the taps tomorrow, there is insufficient gas storage in reserve for the winter months. And Europe and the UK have got ahead of themselves by decommissioning coal and gas-fired electricity. In the UK, a massive undersea gas storage facility off the Yorkshire coast has been closed, leaving precious little national storage capacity. As we have seen with the post-covid supply chain chaos, energy problems will not only become acute this winter, but are likely to persist through much of next year. And even that assumes Russia relents and moderates its energy stance to European customers. By way of contrast, though its partnership with Russia China is gifted unlimited access to all carbon fuels. She is still building coal-fired electricity power stations at an extraordinary rate — according to a BBC report there are 61 new ones being commissioned. A further 51 outside China are planned. As a sop to the West China has only said she won’t finance any more outside her territory. And India relies on coal for over two-thirds of its electrical energy. While Europe and America through their green obsessions are denying themselves the availability and technologies that go with carbon fuels, the Russian/Chinese axis will continue to reap the full benefits. The West’s response is likely to be to decry Chinese pollution and its contribution to global warming, but realistically there is little it can do. Demand for Chinese-manufactured goods will continue because China now has a quasi-monopoly on global manufacturing for export. In the unlikely event western consumers become avid savers while their governments continue to run massive budget deficits, their trade deficits will rise even more, allowing Chinese exporters to increase prices for consumers and intermediate goods without losing export sales. While there is nothing it can do about China’s production methods, AUKUS members will undoubtedly lean on other exporting CPTPP members to comply with global green policies. But they will be competing with China, and while they may pay lip service to the climate change agenda, in practice they are unlikely to implement it without holding out for unrealistic subsidies from the western nations driving the climate change agenda. Under current circumstances, it seems unlikely that China’s CPTPP application will lead to membership, given the CPTPP requirement for China’s central government to relinquish ownership of its SOEs and to permit the free flow of data across its borders. In any event, China is focused on developing its Regional Comprehensive Economic Partnership (RCEP), a free trade agreement with ratification signed so far by China, Japan, South Korea, Australia, and New Zealand. It will come into effect when ratified by ten out of the fifteen signatories, likely to be in the first half of 2022, and in terms of population will be two and a half times the size of the EU and the US/Mexico/Canada (USMCA) trade agreements combined. With four out of five of the signatories being American allies, RCEP demonstrates that the AUKUS defence partnership is an entirely separate issue from trade. While the US may not like it, if RCEP goes ahead freer trade will almost certainly undermine a belligerent stance in due course. Despite hiccups, the progression of trade dealing in the Pacific region promises to prove Mackinder right about the prospect of a more balanced world. All being well and guaranteed by a balance of naval capabilities between AUKUS and China, a free-trading Pacific region will render the European and American trade protectionist policies an anachronism. But the threat is now from another direction: financial instability, with western nations pulling in one direction and China in another. Since the Lehman collapse and the ensuing financial crisis, China has been careful to prevent financial bubbles. Figure 1 shows that the Shanghai Composite Index has risen 82% since 2008, while the S&P500 rose 430%. While the US has seen financial asset values driven by a combination of QE and investor speculation, these factors are absent and discouraged in China. Government debt to GDP is about half that of the US. It is true that industrial debt is high, like that of the US. But the difference is that in China debt is more productive while in America there has been a growing preponderance of debt zombies, only kept solvent by zero interest rate policies. China’s policy of ensuring that the expansion of bank credit is invested in production and not speculation differs fundamentally from the US approach, which is to deliberately inflate financial assets to perpetuate a wealth effect. China avoids the destabilising potential of speculative flows unwinding because it lays the economy open to the possibility that America will use financial instability to undermine China’s economy. In a speech to the Chinese Communist Party’s Central Committee in April 2015, Major-General Qiao Liang, the People’s Liberation Army strategist, identified a cycle of dollar weakness against other currencies followed by strength, which first inflated debt in foreign countries and then bankrupted them. Qiao argued it was a deliberate American policy and would be used against China. In his words, it was time for America to “harvest” China. Drawing on Chinese intelligence reports, in early 2014 he was made aware of American involvement in the “Occupy Central” movement in Hong Kong. After several delays, the Fed announced the end of QE the following September which drove the dollar higher, and “Occupy Central” protests broke out the following month. To Qiao the two events were connected. By undermining the dollar/yuan rate and provoking riots, the Americans had tried to crash China’s economy. Within six months the Shanghai stock market began to collapse with the SSE Composite Index falling from 5,160 to 3,050 between June and September 2015. One cannot know for certain if Qiao’s analysis was correct, but one can understand the Chinese leadership’s continued caution based upon it. For this and other reasons, the Chinese leadership is extremely wary of having dollar liabilities and the accumulation of unproductive, speculative money in the economy. It justifies their strict exchange control regime, whereby dollars are not permitted to circulate in China, and all inward capital flows are turned into yuan by the PBOC. Furthermore, domestic monetary policy appears deliberately different from that of America and other western nations. While everyone else has been inflating their way through covid, China has been restricting domestic credit expansion and curtailing shadow banking. The discount rate is held up at 2.9% with market rates slightly lower at 2.2%, and the only reason it is that low is because alternative dollar rates are at zero and EU and Japanese rates are negative. It is this restrictive monetary policy that has led to the current crisis in property developers, with the very public difficulties of Evergrande. Far from being a surprise event, with cautious monetary policies it could have been easily foreseen. Moreover, the government has a sensible policy of not rescuing private sector businesses in trouble, though it is likely to take steps to limit financial contagion. In their glass houses, Western critics continually throw stones at China. But at least her policy makers have attempted to avoid contributing to the global inflation cycle. With prices beginning to rise at an accelerating pace in western currencies, a new global financial crash is in the making. China and her SCO cohort would be adversely affected, but not to the same extent. The fruits of China’s policies of restricting credit expansion are showing in the commodity prices she pays, which in her own currency have increased by ten per cent less than for dollar-based competition, judging by the exchange rate movements since the Fed reduced its funds rate to the zero bound and instigated monthly QE of $120bn on 19-23 March 2020 (see Figure 2). And while both currencies have moved broadly sideways since January, there is little doubt that the fundamentals point to an even stronger yuan and weaker dollar. The domestic benefits of a relatively stronger yuan outweigh the margin compression suffered by China’s exporters. It is worth noting that as well as moderating credit demand, China is attempting to increase domestic consumer spending at the expense of the savings rate, so consumer demand will begin to matter more than exports to producers. It is in line with a long-term objective of China becoming less dependent on exports, and exporters will benefit from domestic sales growth instead. Furthermore, with China dominating global exports of intermediate and consumer goods and while western budget deficits are increasing and leading to yet greater trade deficits, Chinese exporters should be able to secure higher prices anyway. There can be little doubt that the budget deficits financed by monetary inflation in America, the EU, Japan and the UK, plus central bank stimulus packages are now undermining the purchasing power of all the major currencies. The consequences for their purchasing powers are now becoming apparent and attempts to calm markets and consumers by describing them as transient cuts little ice. In terms of their purchasing powers, these currencies are now in a race to the bottom. Not only are the costs of production rising sharply, but following a brief pause of three months, commodity and energy prices look set to rise sharply. Figure 3 shows the Invesco commodity tracker, which having almost doubled since March 2020 now appears to be attempting a break out on the upside. Since global competitiveness is no longer a priority, China would be sensible to let its yuan exchange rate rise against western currencies to help keep a lid on domestic prices and costs. It is, after all, a savings driven economy, with the sustainable characteristics of a strong currency relative to the dollar. Conclusions Having failed in their land-based military objectives, America’s undeclared tariff and financial wars against China are also coming to an end, to be replaced by a policy of maritime containment through the AUKUS partnership. Attempts to stem strategic losses in Asia have now ended with the withdrawal from Afghanistan and from other interventions.The change in geopolitical policy is not yet widely appreciated. But the parlous state of US finances, dollar market bubbles, persistent and increasing price inflation and the inevitability of interest rate increases will make a policy backstop of maritime containment the only geostrategic option left to America. By pursuing more cautious monetary policies, China is less exposed to the inevitable consequences of global monetary inflation. While yuan currency rates are managed instead of set by markets, it is now in China’s interest to see a stronger yuan to contain domestic price and cost inflation. Even though fiat currencies could be destroyed by imploding asset bubbles, these factors contribute to a set of circumstances that appear to lead to a more peaceable outcome for the world than appeared likely before America and NATO withdrew from Afghanistan. There’s many a slip between cup and lip; but it was an outcome forecast by Halford Mackinder nearly eighty years ago. Let us hope he was right. Tyler Durden Sun, 09/26/2021 - 08:10.....»»

Category: personnelSource: nytSep 26th, 2021

France is already sending one armored "oddity" to Ukraine. Now it might send a slightly odder one.

One expert said the AMX-10P was "very sturdy" and "quite efficient," but the French military took them out of service nearly a decade ago. French soldiers with AMX-10P armored vehicles at a UNIFIL base in southern Lebanon in September 2006.THOMAS COEX/AFP via Getty Images France is reportedly considering sending AMX-10P amphibious infantry fighting vehicles to Ukraine. France has already sent its AMX-10RC armored vehicle to Ukraine, among other military hardware. The AMX-10P may have some utility but it's unclear how many France has or what condition they're in. France may send Ukraine its AMX-10Ps, an amphibious infantry fighting vehicles that the French military took out of service nearly a decade ago.While the transfer isn't confirmed, the report raises questions about how many are available and their mechanical condition.The potential arms sale was first reported on Twitter in February by French defense journalist Jean-Dominique Merchet and later picked up by the Ukrainian Ministry of Defense.France may send 25 AMX-10Ps, Merchet said. Paris has already sent its Caesar 155 mm self-propelled howitzer and its AMX-10RC armored car. The AMX-10RC's heavy cannon and light design has led some to call it a "bit of an oddity."French soldiers practice shooting an AMX-10RC in Afghanistan in September 2010.JOEL SAGET/AFP via Getty ImagesThe AMX-10P first appeared in 1968 and went into production in 1973. It was one of a new generation of infantry fighting vehicles — such as the US's M2 Bradley and the Soviets' BMP — that replaced lightly armed armored personnel carriers in the 1970s.The AMX-10P's fully amphibious capability set it apart from its US and Soviet counterparts, which need slight adjustments to operate in water, and it could prove useful for crossing Ukraine's many rivers.The AMX-10P is a roughly 15-ton tracked vehicle with a crew of three — commander, driver, and gunner — as well as room for eight infantry. While it came in 15 versions, the basic model used by the French Army has a turret with a 20 mm cannon and can travel 40 mph. Some variants were armed with a 90 mm gun, Milan and HOT anti-tank missiles, or a 120 mm mortar, and other models were designed for command, forward observer, and radar operations.The AMX-10P weighs about half the weight of a 27-ton Bradley. One reason for that may be the AMX-10P's welded aluminum armor, which is less than an inch thick on the front hull and thinner elsewhere. That can defend against shrapnel, small-arms fire, and light cannon rounds but not anti-tank shells and rockets.Troops exit an AMX-10P armored vehicle in FranceKEYSTONE-FRANCE/Gamma-Rapho via Getty ImagesAbout 2,000 AMX-10Ps were manufactured between 1973 and 1985. In addition to France, the AMX-10P has been used by nine countries, including Greece, Iraq, and Singapore.A few AMX-10Ps were upgraded with extra armor and better gearboxes in the 2000s, but the vehicle has been replaced in French service by the 25-ton VBCI — an eight-wheeled, 25-ton infantry fighting vehicle similar to the US's Stryker and the wheeled VBMR Griffon.French armor officers considered the AMX-10P to be "very sturdy," Léo Péria-Peigné, a defense expert at the French Institute of International Relations, told Insider, calling it "very simple, quite efficient."However, by the time the AMX-10P was retired, the vehicles "were quite tired," Péria-Peigné said. Indeed, he was surprised to learn that there were any available to be sent to Ukraine: "In France, when a vehicle is retired or replaced, it doesn't exist anymore."That raises questions about the condition of the remaining AMX-10Ps. Ukraine must already cope with a garage-sale collection of donated armored vehicles from numerous countries.A French AMX-10P enters a UNIFIL base in southern Lebanon in September 2006.THOMAS COEX/AFP via Getty ImagesSpain is sending 10 Leopard 2 tanks to Ukraine — but they are in such poor condition that the Spanish government is spending millions to refurbish them. Germany will sell 88 Leopard 1 tanks — which debuted in 1965 — but they also need refurbishment.This suggests that it may be a while before Ukraine gets any AMX-10Ps. While Kyiv is happy to get whatever armor it can, this will be yet another vehicle that Ukrainian troops will have to learn to operate, repair, and supply — while the AMX-10P and AMX-10RC share some automotive components, they are not related.Nonetheless, the AMX-10P would be a welcome addition to Ukraine's military, though not a crucial one. It is reasonably fast and it is a lightweight tracked vehicle, which should enable it to traverse smaller bridges and soft terrain.It is also relatively easy to learn and operate, Péria-Peigné said, describing it as "simpler than most modern" infantry fighting vehicles. As Ukraine struggles to assimilate a plethora of Western arms quickly, an old but simple armored vehicle may be good enough.Michael Peck is a defense writer whose work has appeared in Forbes, Defense News, Foreign Policy magazine, and other publications. He holds a master's in political science. Follow him on Twitter and LinkedIn.Read the original article on Business Insider.....»»

Category: personnelSource: nytMar 12th, 2023

Transcript: Maria Vassalou

     The transcript from this week’s, MiB: Maria Vassalou, Goldman Sachs Asset Management, is below. You can stream and download our full conversation, including any podcast extras, on iTunes, Spotify, Stitcher, Google, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is… Read More The post Transcript: Maria Vassalou appeared first on The Big Picture.      The transcript from this week’s, MiB: Maria Vassalou, Goldman Sachs Asset Management, is below. You can stream and download our full conversation, including any podcast extras, on iTunes, Spotify, Stitcher, Google, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have an extra, extra special guest. Maria Vassalou has a fascinating history and background, London School of Economics to Columbia School of Business, where she actually was a professor for over a decade, and started consulting to the hedge fund and financial services industry. And that led her to various jobs at Wasserstein Perella McKinsey’s Asset Management Group. She worked with George Soros, she worked with Steve Cohen at SAC Capital, and ultimately ends up joining Goldman Sachs Asset Management Group, as co-CIO, a fascinating approach to macro, very quantitatively driven and very academic research-oriented. She wants to know exactly when this, that and the other thing happens, what does it mean for this segment of the market? When do you own growth? When do you own equity? Why does certain anomalies persistent? And why do some seem to get arbitrage away fairly quickly? I found this to be an absolutely fascinating conversation, and I think you will also. With no further ado, Goldman Sachs. Maria Vassalou. Tell us a little bit about the sort of work you did, how relevant was the academic research to what you’re actually doing today. MARIA VASSALOU: Well, actually, it sounds very unusual to go from academia to the industry, and usually it’s not considered a very successful path. But in my case, it was very helpful because I had the opportunity to spend over 10 years doing intensive research in the intersection of macro and finance and asset pricing. And all these questions that I was trying to answer had direct applications to hedge fund strategies and portfolio management. And so, actually, part of the reason I moved to the industry was because while I was doing this research and presenting it around, and publishing it in academic journals, it was attracting attention from the industry. And I had the opportunity to be a retained consultant for Citadel, for Deutsche Asset Management, and then eventually also for Soros Fund Management. And so along the way, I was getting offers to join the industry. And finally, I decided to join the Soros. RITHOLTZ: So it wasn’t like a big eureka moment, it just gradually became apparent that you were working in a space that was very valuable to people managing capital on a very, let’s call it, aggressive basis. Just, hey, we’re looking for alpha, we’re looking to outperform. And what Maria does could be really useful to us. VASSALOU: That was certainly part of it. There was also an intellectual, like, curiosity aspect to it. Because when I was doing that work, it was also the time where behavioral finance became more prevalent, if you like, and I was always on the camp of rational, risk-based explanations for various asset pricing phenomena. And my view was always if an anomaly persists and it doesn’t go away, then — RITHOLTZ: Maybe it’s not an anomaly. VASSALOU: — maybe it’s an anomaly. Maybe it’s risk based and it’s a risk factor that we haven’t really accounted for. And so, a lot of my research was related to trying to uncover what were the underlying risk factors. And the place where I was looking for this risk factors was in the real economy. So I was relating asset prices to GDP growth, to investment growth, to default rest, to factors like this. And so, I was providing explanations for asset pricing anomalies such as the small cap effect, or the value effect. RITHOLTZ: Those were the first two that popped into my mind when you said, hey, is this truly anomalous, or is there a risk factor? Some people have said small caps tend to be more volatile, more risky. That’s where the additional performance comes from. When we look at value, a lot of people say, well, they’re widely disliked that’s why they’re cheap. So there’s a behavioral side. How do you crunch the numbers on that, and where do you come out on small cap and value? VASSALOU: Yeah. It was actually very interesting because when I looked at the small caps, actually, if you dissect the small caps, you see that the small-cap effect always exists in the smallest of the small caps, and it’s related to default risk. RITHOLTZ: Wait a second. So there’s a small-cap effect. And then within small caps, there’s a micro-cap effect and even smaller-cap effect? VASSALOU: Yes. And what happens is, the small-cap effect is related to the default probability. So I have a paper where I computed default probabilities based on Merton’s model, and I did this for the whole cross-section of assets. And then I sorted them, and created the deciles and so on, and tracked how the behavior is over time. And of course, you see that depending on the part of the business cycle you’re going through, the default probability varies over time, and it increases during downturns of the business cycle, and so on. And when that happens, then the small-cap effect becomes much more prominent, and so you see it in the whole cross -section of small caps. But when the default probabilities are lower, and you look at the whole cross-section of small caps, it’s not so apparent. So people say that it goes away, but it doesn’t really go away. It’s a matter of magnitude than where you’re looking for it. RITHOLTZ: Oh, that’s really interesting. What about in the value space, do you see the same issue of what Benjamin Graham called stubs or cigar stubs? Is that the same default risk when stocks become very, very cheap, or is there something else at play there? VASSALOU: In the case of value versus growth, it’s more related to the level of GDP growth and investment growth, and the different sectors of the economy. So it’s not so much a default aspect, but it has to do with a variation of real GDP growth. RITHOLTZ: So when GDP is growing rapidly, I would assume you would want growth stocks. And when things are going sideways, there’s a greater margin of safety with value. That’s the way to go? VASSALOU: Exactly. And that’s why you saw last year, for instance, when GDP growth started becoming a little bit more muted and expectations were for a lower GDP growth going forward, value stocks outperformed growth. RITHOLTZ: By a huge margin, right? VASSALOU: Right. RITHOLTZ: Big, big disparity. VASSALOU: Yeah. So at that time, I would go to conferences and publish papers and then make those arguments. And then I had other colleagues that I would try to provide behavior explanations. And similarly, with the momentum effect, which I had related to corporate innovation, as I was calling it, which was — RITHOLTZ: Corporate? VASSALOU: Innovation, which was really a firm level total factor productivity, so how much innovation companies produce, and how long they can remain leaders in that innovation to really maintain that momentum. RITHOLTZ: So a company becomes very innovative, you get a little bit of a flywheel effect. VASSALOU: Yes. RITHOLTZ: And that innovation DNA starts to spill over into everything they do. Is it just that simple? VASSALOU: Right. But then it’s a matter of being able to maintain this. And — RITHOLTZ: Can companies maintain this indefinitely, or is there a sell-by date? VASSALOU: Usually not. RITHOLTZ: Right. VASSALOU: And so they go into cycles, and it also relates to when they are losers, you know, what’s the probability of recovering, and it really has to do with whether they have the ability to innovate and get out of that trap. So you can see a very high correlation between losers and winners with respect to how they perform on that measure. But, anyway, I had all these ideas about how all these different phenomena were formed and what was driving them. And of course, my colleagues on the behavioral side had different ideas. And so, we were always debating these topics at conferences and through publications. And at some point, it became to me a little bit repetitive and I felt like nobody could unequivocally prove their point as to — RITHOLTZ: Right. VASSALOU: — who is really right. And so at some point, I thought, well, if I can go and manage money based on these risk-based explanations and based on the way I understand how the world functions, how the markets functions, if that works, then that’s one form of justification of what I’m doing. RITHOLTZ: Really intriguing. It’s sort of like the John Saxe poem about the blind men describing the elephant, one doesn’t have to be right or wrong. They could both be right; you’re just approaching it from a different angle. Is that fair? Or is it clearly one is right and one is wrong, and that’s that? VASSALOU: I think it’s much more nuanced. And as the time goes by, I think the two lines get blurred also because of technology, because of the increased presence of retail investors in the markets. The market microstructure has changed. And so it’s much more common now to see prolonged deviations from fundamentals in the market, and we’ve seen that recently as well. And so I wouldn’t say that one approach is right and the other one is wrong. But maybe it’s a matter of timing. I think the risk-based explanations need longer time to play out. Some of these behavioral drivers are more short-term drivers. RITHOLTZ: So you were consulting to the industry while you’re in academia, that had to make that transition when you finally decided to jump in with both feet. I’m assuming you were prepared for what you were jumping into. It wasn’t a big shock. Or am I wrong? Once you left the quiet confines of academia, Wall Street is still a shock to the system. VASSALOU: Well, it was certainly not exactly a shock, but I had to get adapted to it. But I am someone who is quite adaptable. I left my country. I lived in six different countries. I came to the U.S. And so, you know, I’m used to changing environments and try to adapt to these new environments. Certainly, going to Soros was a big eye-opener. And also, I was there during a very interesting time in the markets because — RITHOLTZ: What years were those? VASSALOU: I joined in the summer of 2006. RITHOLTZ: Were you there for the financial crisis? VASSALOU: Pretty much. Actually, I developed my strategies and built the quantitative strategies group from the summer of 2006 onwards, and I started running my strategies with money in March of ’07, so soon before the quant meltdown — RITHOLTZ: Right. VASSALOU: — which was interesting. And so, certainly, I had a baptism by fire in the markets, but they do us a great experience. We did very well during the quant meltdown. And it was also an opportunity to see up close what was happening behind the scenes in the markets, how the financial crisis was developing. And also it was very interesting because even though George Soros had to retired from active investing, when he saw what was happening in the markets, he came back. And so I had the — RITHOLTZ: Undecided (ph). VASSALOU: Yeah. And so I had the opportunity to observe him up close, to listen to his views, to interact with him. And that was certainly a great experience. RITHOLTZ: I can imagine. So when you go through a substantial macro event, whether it was the quants crash, or the financial crisis, or even the pandemic, does that send you back to your models to tweak them? Do those giant events affect how markets behave subsequently, and that leads you to have to make some changes, or, hey, the model is going to do what the model does and it doesn’t matter what happens out there? VASSALOU: Well, quant models always need to be evolved. So you can’t build it — RITHOLTZ: Constantly. VASSALOU: Yes. You can just build it and then forget it. But it has to be done in a way that keeps up with the developments in the market. So for instance, when the British referendum happened, well, we didn’t have such an event before in the market. RITHOLTZ: Right. VASSALOU: So that’s not something where you want to make your model adapted to, because we’re not going to be having these events all the time. But that’s an instance where you want to take your model and stress test it to see how it will behave depending on different scenarios that may transpire as a result of this event. So that’s what we would do, and then we will decide is whether to take down risk or leave the risk on and so on. If you have other phenomenon like, you know, changes in correlations between assets, or changes in the level of volatilities, these are things that you want the model to adapt to going forward and incorporate this information into the model. So, in that case, you want to evolve it, or there maybe factors that were not present before and you want to inform the model with it, for instance, how the monetary policy changes over time, the fact that we had QE for a long period of time. All these things are things you want to include in the model. But you have to be selective and really treat each case separately. RITHOLTZ: So you’re working with George Soros, known as a big macro trader. He makes big bets about these large events. You end up going to Steve Cohen in SAC Capital. He’s much more of a granular trader. He is not necessarily looking at the big events. He’s looking at things really where the rubber meets the road, so to speak. What was that transition like to go from a very top-down approach to somebody who’s, you know, right there in the weeds with the rest of the trading desk? VASSALOU: Yes. Another the great lesson, and I was still a global macro portfolio manager with my own silo at SAC Capital. But as you said, at Soros, it was all about big macro bets. And at the SAC Capital, it was all about risk management. So even though when I came from academia to Soros, I would look at how they were running the portfolios and I was constantly scared because I felt they were taking way too much risk compared to what I thought from an academic perspective they should be doing. Of course, I was nervous at that time in the profession. Then I went to SAC and I realized that, actually, being careful with risk management is very much respected, and even more than what I thought should have been happening at Soros. And so I spent the subsequent years trying to refine my models, make them much more smooth in terms of their return stream. I’ve focused much more on risk management, downside risk hedging. And I think the models became better as a result. RITHOLTZ: So let’s talk a little bit about how you ended up at Goldman. You were at Columbia School of Business, where you were teaching. You were at Soros and SAC Capital. What attracted you to Goldman? VASSALOU: Well, actually, the whole asset management business is changing. So we went from a period where hedge funds were really the hot area to be and, of course, there are all these big hedge funds that were developed over time. But over time, as you know, there was this big shift towards passive investing. And so, that was a big challenge for hedge funds. At the same time, we had all this decrease in volatility and financial repression because of the QE. And now, the extra liquidity that was in the markets that made trading in hedge funds much more difficult, if you like, in terms of providing superior returns. RITHOLTZ: I’m glad you brought that up because if you look at hedge fund performance before the financial crisis, there’s a lot of alpha generators. The hedge fund industry, generally, is outperforming their benchmarks. I mean, not just the top decile, as a group, they seem to have done very well. And then post financial crisis, it became very hard to generate alpha, and there was a huge gap between the big winners and the losers. Are you attributing that to zero interest rate and quantitative easing, or did things just change so much, people didn’t adapt quickly enough? VASSALOU: I mean, my strategies were always in the space of relative value across asset classes. So there, there was all — RITHOLTZ: Didn’t make a difference. VASSALOU: Yes. There was always some volatility to pick up, and so the strategies kept working. But by and large, in the overall industry, if you look at long/short equity, there was very little, you know, within asset class, volatility to pick up. And also you have a period that because of this extreme liquidity and quantitative easing, equities were performing extremely well. And so being passive and just holding the index — RITHOLTZ: Without a fight. VASSALOU: — you were doing great. RITHOLTZ: Right. VASSALOU: So what was the point of getting into hedge funds, having zero beta exposure, or going into other strategies? And so, you saw that the hedge fund industry started changing over time. A lot of traditional macro funds actually started becoming more equity-oriented funds, so including a lot of equity exposure, just to try to pick up beta in their strategies. And also, there was an increased consolidation of the industry towards bigger managers. But to me, at the same time, I was finding this concentration on passive investing also problematic because passive investing works when the markets are efficient, and the markets are efficient when there is enough trading happening for new information to be incorporated in the prices. If everybody is a passive investor, then you don’t have this mechanism in place to incorporate information in prices right away, to really benefit from them. So — RITHOLTZ: So how much active management does there have to be for price discovery to really take place? And I’ve asked people like Andrew Lo in MIT who said, you can have 90 percent passive, the remaining 10 percent is where all your price discovery will take place. Does that sound like it’s a lot, or do you agree with that perspective? VASSALOU: Andrew’s answer I think derives from the idea of the marginal investor — RITHOLTZ: Right. VASSALOU: — as we say in academia. So all you need is a marginal investor to — RITHOLTZ: Who’s rational and always ready to take advantage of opportunities. VASSALOU: Yes. But it’s not very clear who the marginal investor is in practice — RITHOLTZ: Or if they even exist. VASSALOU: If they exist. Then what I have noticed through the 15 years that I’ve been managing my own strategies is that the markets have become a little bit less efficient over time — RITHOLTZ: Really? VASSALOU: — in the sense that you see longer deviations from fundamentals. Eventually, they do correct, but you see longer deviations from fundamentals. Sometimes you see more intraday volatility in certain events, especially around announcements and so on. And so maybe this is attributable to an increased exposure to passive management, maybe it’s attributable to more noise traders, what we used to call noise traders — RITHOLTZ: Right. VASSALOU: — which are effectively retail investors. RITHOLTZ: Right. Well, let’s stay with this a second because I’m intrigued by the concept of the market becoming less efficient. When I look at the ‘60s, the ‘70s, the ‘80s and ‘90s, it seems as if we’ve gotten more and more heavily focused on technology and program training, and now algorithmic and high frequency trading. And I would assume that that would make the market more efficient and harder to spot arbitrage opportunities and these various anomalies. You’re suggesting passive is creating less efficiency. Does that mean there’s more opportunity for active traders? VASSALOU: I think there is more intraday trading now than it used to be. So you have the passive investors and then you have a lot of intraday trading, and that’s based on algos that are looking for short-term trends to capitalize. Some of them are AI-based, so they may be looking for particular words, and then they will extrapolate from that. For instance, it was interesting to notice in the last Fed meeting, Chair Powell used the word disinflation a few times and — RITHOLTZ: Disinflation? VASSALOU: Yes. RITHOLTZ: Not deflation, just slower rate of inflation. VASSALOU: Yeah. So that means that the inflation is coming down. And the markets will start rallying as soon as he will pronounce that, not because he was suggesting an inflation, by and large, is coming down. But he did say that in certain segments of the CPI, we were observing disinflation, such as in the goods markets. And that could have been a case of, you know, AI-based algorithms that were utilizing words to really take advantage of developments in the markets. And the following day, the market will reverse the rally, once people will digest what he actually said. RITHOLTZ: So perhaps some of these algorithms are making markets less efficient then because they’re keying on a word, but not necessarily the full meaning of the speech. Is that what we’re thinking? VASSALOU: They certainly create more intraday volatility. Maybe in some cases they make them more efficient, maybe in some cases less efficient. But I think what is likely the case is that they create more intraday volatility. RITHOLTZ: So let’s bring this back to how does this attract you to Goldman Sachs? You know, back in the ‘80s, and ‘90s, it seemed like these young hot shots would start at Goldman. They’d put together a trading record. Goldman would basically seed them, become their prime broker and send them out to be hedge funds. Now, it almost sounds as if the opposite is happening. Hey, at a big firm with Goldman, we have so many different tools that you can use, that you don’t get at a small hedge fund. You’re better off working at the big firm. Did that play into your thought process? Tell us a little bit about that. VASSALOU: I think the future of the industry is really in the solution space. RITHOLTZ: Solutions space? VASSALOU: Yes. That’s really what institutional investors need. And what we needed — RITHOLTZ: Let’s define that a little bit. In other words, we’re not just looking for alpha, we have a problem and we’re looking for a solution to that issue. VASSALOU: Well, yes, we’re looking for particular solutions, whether that’s a liability, whether it’s a completion of existing portfolio, whether it’s a particular return target they have, whether there is a particular liquidity profile that they need to achieve. There are all kinds of needs that institutional investors have, that they cannot satisfy by just investing in the hedge fund industry, because the assets they manage are many times larger than what the hedge fund industry can absorb. At the same time, just being passive is not really the way to go. And so what I think is happening is the two areas are merging somewhere in the middle, where really what the demand is, is for creating holistic portfolios that incorporate asset classes from the whole spectrum of assets out there, whether it’s in public markets or private markets, focus on portfolio construction, with good risk management framework and try to provide the right profile of risk-adjusted returns for the particular needs of the investor, incorporating alpha in there. But now just focusing on the alpha component. And I think this is interesting in many respects. You’re really fulfilling a big need of this institutional investors. You’re bringing together skills from the whole spectrum of the industry, and you get to create that bespoke customized solutions. So for someone like me, who started my career in academia and spent my research years thinking about portfolio construction, asset allocation, macro, asset pricing, and then I went into the hedge fund industry. This is an area that really straddles the whole spectrum of things that I have done, and I think it’s really where the future is. RITHOLTZ: So when you talk about clients, I’m assuming the bulk of your clients are institutional, foundations, endowments, family offices, things along those lines? VASSALOU: And sovereigns as well. RITHOLTZ: Sovereigns. Okay. VASSALOU: Central banks. RITHOLTZ: Oh, really. So that runs the gamut of the largest of the large sort of clients. I’m going to assume that each of those clients have a very different profile and are looking for a very different sorts of solutions. VASSALOU: That’s true. RITHOLTZ: So we were talking about when you joined Goldman, you picked quite a time to come into Goldman, just about the top of the market. Tell us a little bit about what that transition was like when you started at Goldman. VASSALOU: It’s certainly a time when we need to rethink the way we approach investing. That’s because now we are dealing with much higher volatility than we did in the past. Instead of ample liquidity in the markets and accommodative monetary policy, we have a reversal of the monetary policy and then and actually, withdrawal of accommodation. At the same time, we are going through tectonic changes in the world economic order. We’re going through deglobalization process, where we see that actually onshoring becoming more and more a topic of discussion. There is fragmentation in the goods markets. There is destabilization that we are observing in the geopolitical front that can significantly change. Also trade patterns, but it also affects alliances at the political level. We have changing demographics. We have the decarbonization process that it’s also affecting investment production processes across the board. And we also have the digitization process that has been going on for a long time, and it got accelerated with the pandemic. So there is a whole host of factors that affect the background of the environment in which we operate, and how growth and inflation is going to evolve over time. And at the same time, we have also a number of short-term drivers to the markets that we need to take into account. RITHOLTZ: Before we get to the short term, let’s stick with these big long term macro deglobalization and geopolitical unrest, and a new rate regime and on and on. How do you work these big factors into your process? Do you create a model where each of these factors have a specific way? When you’re looking at the world from a top-down perspective, how does that find its way to be expressed in an investment posture? VASSALOU: We have a dual approach. So we certainly have a research process that is based on models that we have created, and we keep evolving. But we also have a qualitative approach in investing, and that comes through the experience of our analysts and researchers on particular asset classes, but also in terms of our ability to think through the macro environment and the implications that they may have on the investment environment and the various asset classes. So one of the things that I do is to really try to think through all these developments that are happening and the effects that may have on the markets and on our investments. RITHOLTZ: And then you mentioned there are shorter term inputs that drive volatility and obviously affect price. How do you incorporate that into your process? VASSALOU: Those are easier to incorporate into the process, because they’re things that you can observe at higher frequencies and you can incorporate into the models through quantitative approaches. The hardest part is to incorporate the bigger picture, and that’s really where the qualitative overlay comes into play. RITHOLTZ: Very, very intriguing. So you’re looking at the world late 2021, markets are just about at their all-time high. And yet, it’s pretty clear, inflation has ticked up. The Fed hasn’t begun raising rates, but they’re talking about it. At what point do you start to say the 2022 and forward era has looked very different than the decade from 2021 back? Where do you say, all right, this is the line in the sands and we have to very much adapt to what’s coming? VASSALOU: Well, I joined the Goldman in July of 2021 and — RITHOLTZ: Which was a pretty good year in the equity markets. VASSALOU: Yes. But by the fall of 2021, and particularly November, I was convinced that we needed to start cutting risk in our portfolios because we had a period of the pandemic where we so a reversal of monetary policy back to zero rates and increased QE, at the same time as we had massive fiscal accommodation, and that had to be inflationary. And so I was very concerned about this effects, and how inflation will play out and how growth will react going forward. RITHOLTZ: Only a handful of people were saying that in mid to late 2021. Jeremy Siegel at Wharton was warning about it mostly on the fiscal side. And some of the people who’ve been complaining about inflation for a decade, warned about it, but I think they were generally ignored. When you bring up this regime change to your investment committee that you’re co-CIO of, what sort of pushback do you get? Oh, we’ve had no inflation for decades. Or are people very much looking at the data and saying, well, rates haven’t gone up yet, but they have to. How is that internal discussion? Like, what are the key points that everybody focuses on when the market is still going higher week after week? VASSALOU: We had a rigorous discussion on the topic and not everybody was on the same page, but we have a collaborative approach. So it was also part of my task to try to convince people that, you know, we had to moderate risk. And so eventually, we did do that. But it’s always good to have a plurality of views and debate them, because that’s how we all become better at what we do. RITHOLTZ: And your title is multi-asset solutions. What sort of assets are we looking at? Is it completely unconstrained and you could look at anything, or are there certain things you’re really focused on? VASSALOU: We can invest across all asset classes, both in private and public markets. It depends very much on the mandates that we have and the — RITHOLTZ: For each individual investor? VASSALOU: For each individual investor, we have different channels that we do cluster the mandates. But effectively, we can provide any solution that an investor may need. RITHOLTZ: Really, really — VASSALOU: And we can tap on all the capabilities of Goldman Sachs across the firm, and really service our investors using the one GS approach. RITHOLTZ: So let’s talk about that one GS approach. I’m a fan of the Goldman soft landing basket. I just love the name of that. Tell us a little bit about that. It’s been doing really well because it looks like the economy is holding up better than a lot of people expected last year. Tell us a little bit about the soft landing basket. VASSALOU: Yeah, At the multi-asset solutions, we are not in the camp of soft landing. That’s where we disagree with our friends there — RITHOLTZ: You’re in the recession camp, right? VASSALOU: Yes, we are in the recession camp. That’s where we disagree with our colleagues at the GIR, but that’s a healthy disagreement. We think that given where inflation is and where the forces of inflation are, and given how stubborn inflation seems to be on the services sector, ex-housing, it’s going to be almost impossible for this to be reduced without loosening up the labor market significantly. And if you loosen up the labor market significantly, you’re likely to see negative GDP growth at some point. We don’t expect it to be a deep recession, because we are starting from good initial conditions. So balance sheets are not over expanded. Consumers are not overleveraged, and so on. But we do think that we are likely to see a recession eventually. RITHOLTZ: So let’s take that apart a little bit. So the soft landing basket, those folks who are saying, look, consumer spending is robust. Unemployment is at, you know, near record lows. The economy looks pretty good. But I suspect your perspective is something along the lines of, but inflation is sticky. The Fed keeps telling you they’re not done raising rates. And at five and a half or 6 percent, that’s going to cause an increase in unemployment and a short, shallow recession. Is that what you’re looking for in ‘23, or ‘24? VASSALOU: I don’t know if it’s going to be short. I hope it’s going to be shallow for the reasons we discussed that we are not getting into this environment with high leverage and high, you know — RITHOLTZ: Low unemployment — VASSALOU: Yes. RITHOLTZ: — and household wealth seems to be doing pretty well. Back half of ‘23 or ’24? VASSALOU: It could be the second half of ’23. We could still have a scenario where the GDP for ‘23 is not negative, but we have started entering a recession. We don’t expect the Fed to cut rates this year. We think that right now, the market is pricing a terminal rate of around 5.3 percent. RITHOLTZ: Right. Which is above where we are today. VASSALOU: Yes. We may actually go higher than that. I had said a few weeks ago that we may go up to 5.5 percent before we are done with the rate hikes. And again, I think what the Fed will do is it will continue hiking and then pause, and depending on how inflation evolves, they may have to do more. I think that inflation will come down to around 3 to 4 percent, and then it’s going to get very sticky, and that’s the — RITHOLTZ: Right. 2 percent is done. We’re done with that, right? VASSALOU: I think it’s really hard for them to get back to 2 percent, and I’m not sure that 2 percent is the right target level anymore, because of all the other factors we discussed, the deglobalization, all this segmentation in the markets that we are observing, the geopolitical developments, decarbonization, et cetera. I think all these developments are inflationary. RITHOLTZ: So given the past decade of zero interest rate policy and quantitative easing versus the current policy, for you as a top down macro strategist, which is the more challenging period? Because I recall a lot of macro strategists couldn’t wrap their head around how positive ZIRP and QE were for equity markets, and they seem to be fighting the tape quite a bit. Which is the easier environment to navigate through? VASSALOU: I don’t know if it is a matter of easy versus hard environment. I would say that the investment approach has to be different. RITHOLTZ: So which one do you find, you could go to the playbook and I have a solution for this, as opposed to we’ve never seen this before and let’s see if we can figure out what we can do? VASSALOU: One of the things we’ve been doing at Goldman Sachs and my team is really to rethink our playbook. So what we are seeing now also means lower correlations across different markets. So there may be more opportunities for relative value trades, or more opportunities for diversification. You need the lower leverage than you used to need before. You have to lean on diversifying strategies and uncorrelated strategies. We think this is a great environment for alpha. It’s a great environment for active management. But you cannot run the size of assets that we are running with just active management. And so — RITHOLTZ: So you marry beta and alpha together? VASSALOU: Yes. And the importance of risk management and downside risk control becomes even more important in this environment. You have to be very conscious of the potential for external shocks, and constantly evaluate what the probability of those shocks to materialize is, and how they will affect your portfolio. So it’s a little bit of a different environment than the previous one, where we were in a low volatility environment, correlations were pretty stable, and really the way to play that market was very different. RITHOLTZ: Really quite fascinating. Let’s talk about how to apply your discipline within the current environment. And I want to start by giving you a quote from you, which is “We expect the U.S. economy to enter recession in 2023 as the Federal Reserve pushes borrowing costs to 5 percent or higher.” So clearly, a lot of Wall Street thinks we’re going to duck now a recession that will end up with a soft landing. You were firmly in the recession camp, in the hard landing camp. VASSALOU: Yes. RITHOLTZ: And we talked earlier, you said we can see a terminal rate of about five and a half percent. Now, is that historically a very high number? Forget the ‘70s, even the ‘80s and ‘90s, mortgages were 7 percent. Five and a half percent doesn’t sound that bad. VASSALOU: No, it doesn’t. And actually, you know, a lot of people were talking about being in a restrictive territory already in terms of the monetary policy. Most likely, we’re not at the restrictive territory yet because you see how strong the labor market is. RITHOLTZ: Labor market is strong. Consumer spending is strong. The one area we’ve really seen the rubber meets the road in terms of rates having a negative impact is housing. Housing really is doing as poorly as it’s done in a long time. How does that translate into future economic contractions? VASSALOU: Well, housing is having some cooling effects manifesting recently. But at the same time, we haven’t really seen the housing rollover, and the way that it did during the financial crisis. And that’s because most U.S. households have 30-year mortgages. They had the opportunity to refinance while the rates were at zero, and so they don’t necessarily need to tap the mortgage markets right now. RITHOLTZ: I think it’s — VASSALOU: And others are really waiting for prices to come down before buying. RITHOLTZ: So I think the number is 75 percent of households with a mortgage are paying 4 percent or less. Is that keeping people locked in place? Is that part of the inventory shortfall? VASSALOU: As long as they have jobs that pay decently, I think, you know, they don’t really need to sell and they don’t need to relocate. RITHOLTZ: But for real estate, the rest of the economy seems to be doing pretty well. This year, the market started out really hot, what, we’re up 10 percent in January. What do you make of that? Is that just the reaction to how oversold we got in 2022? You know, 10 percent is a good year, forget a good month. VASSALOU: Yes. One of the things I have said, though, in another interview was that we had a year in January, and now we should focus in on alpha. But, yeah, the January performance was largely driven by thin trading, positioning, short covering, and also a number of very strong economic news. But I think, in a way, the market is misinterpreting the Fed here because strong economic numbers, strong labor market data do not imply to me that we’re going to have a soft landing. What it implies is that the fact will have to go higher, and therefore we’re going to see, you know, a higher probability of recession going forward because — RITHOLTZ: So — VASSALOU: — the segment of the CBI where inflation is concentrated is in CERT core services, ex-housing, and that’s directly related to disposable income and to the labor markets. RITHOLTZ: So what do you make of the market not taking Jerome Powell at his word? They’ve been pretty clear, hey, we’re going higher, and we’re going to keep it higher for longer. And anybody who thinks we’re done raising rates isn’t listening to what we’re saying. And the market says, yeah, you’ll cut later this year. How are we supposed to interpret both the equity and the bond market really not listening to what Fed Chair Jerome Powell is saying? VASSALOU: The equity markets have been conditioned to always buy the dip and to really not fight the Fed in the sense of not fighting the Fed when the Fed kept doing QE and increasing the monetary accommodation. But now, they are doing the opposite. So right now, not fighting the Fed means actually selling. It doesn’t mean buying, because the Fed wants to tighten financial conditions. The Fed wants to loosen up the labor market. So in fact, what the market is doing is fighting the Fed. The bond market is doing better than the equity market. So I think what the two markets are pricing is not exactly the same thing. RITHOLTZ: So the odds of a rate cut in 2023, they’ve gone down a lot since that big move up in January. I’m going to assume you are definitely not in the Fed will be coming in 2023 camp. You think they’re going to continue tightening, and perhaps tightened too far? VASSALOU: I don’t see any reason for the Fed to cut this year. We are not seeing any loosening up of the labor markets, which means that the monetary policy hasn’t really become restrictive enough to have an effect on the real economy in a profound way yet. Inflation continues to be elevated, still very far away from their target. The only case in my mind in which the Fed may cut rates is if we have some significant external shock that necessitates them to intervene in the market, something like what happened in the U.K. with the LDI crisis, or, God forbid, some geopolitical event of great significance. In other cases, I don’t expect them to cut. RITHOLTZ: So I look at rates alone as a very blunt tool, especially when we’re looking at the labor market where we have a shortage of workers now across all sorts of skill levels. Housing, there’s a giant inventory shortfall by some estimates. We’re 2 to 3 million single family homes short. Even things like inflation in cars and used cars, you know, semiconductors are still way beyond the sort of yields that we’re used to. How much can the Fed really fix the things that are broken, and are causing prices and wages to be as elevated as they are? Are these things really that susceptible to ongoing rate increases short of a full recession? VASSALOU: Well, the Fed can help with certain things. They can’t fix everything. And I think the factors that you pointed out suggest that it may be very difficult for them to go back to 2 percent under all this conditions. They can certainly go down to 3 to 4 percent of inflation. The question is whether they will be satisfied with that and they will declare, at that point, that because of all these changing geopolitical and economic conditions, that 2 percent is no longer relevant and they will move their target, or whether they will insist on continuing to reach 2 percent and then the process overtighten and really damage the economy. There is a question of credibility of the Fed. And so they will have to be very careful with how they message that in order not to damage the credibility of the Fed in the long run. In terms of the wages, it’s interesting to see also the evolution of the share of labor as a percentage of real GDP over time. And what you see is that the share of labor was much higher in the ‘90s. And as globalization started expanding, the share of labor went down. And obviously, the share that would go to capital increased. But since the pandemic, this process has reversed and the share of labor is increasing again, which means that it compresses the share of real GDP that goes to capital. Now, that makes it less attractive for capital to invest, and obviously, less profitable for them. And part of what the changing Fed policy is doing is redressing the balance of the shares between labor and capital in real GDP. So what we’re likely to see is a decrease again of the share of real GDP that goes to labor, which in the short run will be negative for risk assets. But in the medium to long run, it will actually increase the profitability of companies and also the incentive to invest. RITHOLTZ: So let’s fast forward a year out. First or second quarter 2024, CPI has come down to let’s call it three and a half percent, and the Fed is at five and a quarter and they are no longer raising rates. What does that mean for the equity and bond markets a year out? Can you think in those terms? Like, do you have a sense of where the Fed wants to navigate to? And what does that mean for the outlook barring exogenous events and all sorts of unanticipated surprises? VASSALOU: I think that as inflation is coming down and stabilizes around the levels that you mentioned, around 3, three and a half percent, the Fed will become much more attuned to its dual mandate and start focusing on how the labor market is evolving. And I think that’s obviously one of the factors that they’re very focused on already. But at the moment, because the labor market is so tight, they’re single-handedly focused on the inflation side of their mandate. Once inflation starts coming down and to the extent that unemployment starts rising, they will start balancing out the two sides of their mandate. And that’s really where the policy be will be determined. If unemployment starts rising rapidly, then they will give up part of their inflation fighting in order to stabilize the labor markets. If labor markets react more positively and we don’t see a massive increase in the unemployment, they are more likely to persist with our inflation fighting mandate. RITHOLTZ: And then last inflation question, China has ended their zero COVID policy, they’re reopening. How potentially impactful is China on global GDP and to some degree, global inflation? VASSALOU: Certainly, the reopening of China has a positive effect on global GDP. It will also potentially have a positive effect on inflation in the sense that the demand for commodities will increase as a result of China’s reopening. The question is whether that will translate into more inflationary pressures that we’ll see a backup and inflation in the goods markets, or whether demand have moderated enough in other places to keep prices contained there. RITHOLTZ: Lastly, as a multi-asset manager, what are you looking at in this current environment that you think today is suddenly much more appealing and exciting than it might have been last decade? What asset classes suddenly have become, or not so suddenly, have become much more interesting given the world we’re in? VASSALOU: Well, certainly, fixed income is more interesting now than it was in the past because real yields are positive. We are getting closer to peak rates, and so locking in some of these rates make sense. Credit will become an interesting area as we’re going through this process. We expect the default rates to rise a bit, but not that levels that we saw in previous crisis. But it’s also interesting now because we need less leverage to achieve our return goals. And so, in a way, cash is king again, whereas before it was not. So the way we look at portfolios, how we invest is different. And I think it is an environment that favors active management. So stock-picking will be a really important component. As we are going through this deglobalization process and restructuring of supply chains, there will be opportunities across the board in different industries to capitalize on this changes in the economic structure of different countries. And some of these opportunities will manifest themselves in the public markets and some in the private markets. So the way we look at portfolios is holistically across private and public markets, and really focus on the opportunities that may exist. RITHOLTZ: Really interesting. So let me jump to my favorite questions that I ask all of our guests. Tell us what you did to stay entertained during the lockdown and afterwards. What were you streaming? What was keeping you occupied? VASSALOU: Well, one of the things I used to do was go for long runs in Central Park. So that was one of the things that was keeping me sane during the lockdown. And otherwise, I watch all the usual shows that everybody was watching at that time on Netflix and Amazon, and the various other streaming platforms. RITHOLTZ: Tell us about some of your mentors who helped to shape your career. VASSALOU: I had the opportunity to meet a number of very interesting people through my career. And I can’t say that I had mentors early on in my career, but I certainly was around very interesting and impressive people that I was able to observe and learn from them. In a way, because of my process, because of my path, starting doing my PhD at London Business School, then coming to the U.S., without having studied in the U.S., I was a little bit of an orphan when I came here. And so I didn’t have an obvious mentor through the process. And perhaps that’s one of the reasons why I tried to find my path on my own. But over the years, as I became more advanced in my career, I started meeting people who have been acting as mentors. Certainly, at Perella Weinberg Partners, Joe Perella was someone who spent a lot of time talking with me, and I learned a lot from him, both about the profession and his experience. And I’m fascinated by the interest of my colleagues at Goldman Sachs to guide me through the firm, make my transition easier, mentor me. And I find this extremely impressive and very grateful that they are willing to spend the time to do that. So I must say not so many mentors early on in my career, but actually more mentors later on. RITHOLTZ: Very interesting. Let’s talk about books. What are some of your favorites, and what are you reading right now? VASSALOU: In the old days, I was reading a lot of literature. And so my favorite book was Proust’s Remembrance of Times Past, which I read both in French and English, and also various books by Dostoyevsky whom I like very much. But this day, so I read a lot about what’s going on in the markets, the world, and I’m trying to think about those things. So one of the last books I read was unrelated to that but it was Art as Therapy, which I found very interesting. And it’s one of those topics where once you read the book, you think that makes a lot of sense and you should have known this all along, but obviously I didn’t before. And now, some of the books that I have on my side and starting reading is 21 Lessons for the 21st Century by Yuval Harari. And also Leadership by Henry Kissinger, because I think we are in a very important time for global world order. Nothing geopolitics will be really important, and the leadership that the world leaders will show now and in the coming months and years could shape our world in a profound way. RITHOLTZ: Very interesting. What sort of advice would you give to a recent college graduate who is interested in a career in macro or multi-asset investment? VASSALOU: I think they need to have both good technical skills, but also understand macro. So I think this combination used to be rare. I think it becomes more and more important to be able to combine STEM skills with more of the economic science and thinking that will help you understand the markets better. RITHOLTZ: And our final question, what do you know about the world of investing today you wish you knew 25 or so years ago when you were first getting started? VASSALOU: When I first got started, the world was different than it is now. I think what is important is to be cognizant of the fact that conditions change, the world changed, and we need to evolve with those conditions. So obviously, I learned along the way. But I think what I know now was not necessarily applying 20 years ago, and vice versa. So if there is a lesson for all of us to learn is that we need to keep evolving. We need to keep learning and we need to keep adapting to our environment. RITHOLTZ: Very interesting. Maria, thank you for being so generous with your time. We have been speaking with Maria Vassalou. She is co CIO at Goldman Sachs Asset Management. If you enjoy this conversation, well, please check out any of the previous 470 something we’ve done over the past nine years. You can find those at YouTube, Spotify, iTunes, Bloomberg, wherever you feed your podcast fix. Sign up from my daily reading list at ritholtz.com. Follow me on Twitter @ritholtz. Follow all of the Bloomberg family of podcasts @podcast on Twitter. I would be remiss if I did not thank the crack team that helps put these conversations together each week. Atika Valbrun is my project manager. Sarah Livesey is my audio engineer. Sean Russo is my head of Research. Paris Wald is my producer. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio. END   ~~~   The post Transcript: Maria Vassalou appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureMar 8th, 2023

Escobar: The Valdai Meeting - Where West Asia Meets Multipolarity

Escobar: The Valdai Meeting - Where West Asia Meets Multipolarity Authored by Pepe Escobar via The Cradle, At Russia's Valdai Club meeting - the east's answer to Davos - intellectuals and influencers gathered to frame West Asia's current and future developments... The 12th “Middle East Conference” at the Valdai Club in Moscow offered a more than welcome cornucopia of views on interconnected troubles and tribulations affecting the region. But first, an important word on terminology – as only one of Valdai’s guests took the trouble to stress. This is not the “Middle East” – a reductionist, Orientalist notion devised by old colonials: at The Cradle we emphasize the region must be correctly described as West Asia. Some of the region’s trials and tribulations have been mapped by the official Valdai report, The Middle East and The Future of Polycentric World.  But the intellectual and political clout of those in attendance can provide valuable anecdotal insights too. Here are a few of the major strands participants highlighted on regional developments, current and future: Russian Deputy Foreign Minister Mikhail Bogdanov set the stage by stressing that Kremlin policy encourages the formation of an “inclusive regional security system.” That’s exactly what the Americans refused to discuss with the Russians in December 2021, then applied to Europe and the post-Soviet space. The result was a proxy war. Kayhan Barzegar of Islamic Azad University in Iran qualified the two major strategic developments affecting West Asia: a possible US retreat and a message to regional allies: “You cannot count on our security guarantees.” Every vector – from rivalry in the South Caucasus to the Israeli normalization with the Persian Gulf – is subordinated to this logic, notes Barzegar, with quite a few Arab actors finally understanding that there now exists a margin of maneuver to choose between the western or the non-western bloc. Barzegar does not identify Iran-Russia ties as a strategic alliance, but rather a geopolitical, economic bloc based on technology and regional supply chains – a “new algorithm in politics” – ranging from weapons deals to nuclear and energy cooperation, driven by Moscow’s revived southern and eastward orientations. And as far as Iran-western relations go, Barzegar still believes the Joint Comprehensive Plan of Action (JCPOA), or Iran nuclear deal, is not dead. A least not yet. ‘Nobody knows what these rules are’ Egyptian Ramzy Ramzy, until 2019 the UN Deputy Special Envoy for Syria, considers the reactivation of relations between Egypt, Saudi Arabia, and the UAE with Syria as the most important realignment underway in the region. Not to mention prospects for a Damascus-Ankara reconciliation. “Why is this happening? Because of the regional security system’s dissatisfaction with the present,” Ramzy explains. Yet even if the US may be drifting away, “neither Russia nor China are willing to take up a leadership role,” he says. At the same time, Syria “cannot be allowed to fall prey to outside interventions. The earthquake at least accelerated these rapprochements.” Bouthaina Shaaban, a special advisor to Syrian President Bashar al-Assad, is a remarkable woman, fiery and candid. Her presence at Valdai was nothing short of electric. She stressed how “since the US war in Vietnam, we lost what we witnessed as free media. The free press has died.” At the same time “the colonial west changed its methods,” subcontracting wars and relying on local fifth columnists. Shaaban volunteered the best short definition anywhere of the “rules-based international order”: “Nobody knows what these rules are, and what this order is.” She re-emphasized that in this post-globalization period that is ushering in regional blocs, the usual western meddlers prefer to use non-state actors – as in Syria and Iran – “mandating locals to do what the US would like to do.” A crucial example is the US al-Tanf military base that occupies sovereign Syrian territory on two critical borders. Shaaban calls the establishment of this base as “strategic, for the US to prevent regional cooperation, at the Iraq, Jordan, and Syria crossroads.” Washington knows full well what it is doing: unhampered trade and transportation at the Syria-Iraq border is a major lifeline for the Syrian economy. Reminding everyone once again that “all political issues are connected to Palestine,” Shaaban also offered a healthy dose of gloomy realism: “The eastern bloc has not been able to match the western narrative.” A ‘double-layered proxy war’ Cagri Erhan, rector of Altinbas University in Turkey, offered a quite handy definition of a Hegemon: the one who controls the lingua franca, the currency, the legal setting, and the trade routes. Erhan qualifies the current western hegemonic state of play as “double-layered proxy war” against, of course, Russia and China. The Russians have been defined by the US as an “open enemy” – a major threat. And when it comes to West Asia, proxy war still rules: “So the US is not retreating,” says Erhan. Washington will always consider using the area “strategically against emerging powers.” Then what about the foreign policy priorities of key West Asian and North African actors? Algerian political journalist Akram Kharief, editor of the online MenaDefense, insists Russia should get closer to Algeria, “which is still in the French sphere of influence,” and be wary of how the Americans are trying to portray Moscow as “a new imperial threat to Africa.” Professor Hasan Unal of Maltepe University in Turkiye made it quite clear how Ankara finally “got rid of its Middle East [West Asian] entanglements,” when it was previously “turning against everybody.” Mid-sized powers such as Turkiye, Iran, and Saudi Arabia are now stepping to the forefront of the region’s political stage. Unal notes how “Turkiye and the US don’t see eye to eye on any issue important to Ankara.” Which certainly explains the strengthening of Turkish-Russian ties – and their mutual interest in introducing “multi-faceted solutions” to the region’s problems. For one, Russia is actively mediating Turkiye-Syria rapprochement. Unal confirmed that the Syrian and Turkish foreign ministers will soon meet in person – in Moscow – which will represent the highest-ranking direct engagement between the two nations since the onset of the Syrian war. And that will pave the way for a tripartite summit between Assad, Russian President Vladimir Putin and his Turkish counterpart Recep Tayyip Erdogan. Note that the big regional reconciliations are being held – once again – either in, or with the participation of Moscow, which can rightfully be described as the capital of the 21st century multipolar world. When it comes to Cyprus, Unal notes how “Russia would not be interested in a unified state that would be EU and NATO territory.” So it’s time for “creative ideas: as Turkey is changing its Syria policy, Russia should change its Cyprus policy.” Dr. Gong Jiong, from the Israeli campus of China’s University of International Business and Economics, came up with a catchy neologism: the “coalition of the unwilling” – describing how “almost the whole Global South is not supporting sanctions on Russia,” and certainly none of the players in West Asia. Gong noted that as much as China-Russia trade is rising fast – partly as a direct consequence of western sanctions – the Americans would have to think twice about China-hit sanctions. Russia-China trade stands at $200 billion a year, after all, while US-China trade is a whopping $700 billion per annum. The pressure on the “neutrality camp” won’t relent anyway. What is needed by the world’s “silent majority,” as Gong defines it, is “an alliance.” He describes the 12-point Chinese peace plan for Ukraine as “a set of principles” – Beijing’s base for serious negotiations: “This is the first step.” There will be no new Yalta What the Valdai debates made crystal clear, once again, is how Russia is the only actor capable of approaching every player across West Asia, and be listened to carefully and respectfully. It was left to Anwar Abdul-Hadi, director of the political department of the Palestine Liberation Organization (PLO) and the latter’s official envoy to Damascus, to arguably sum up what led to the current global geopolitical predicament: “A new Yalta or a new world war? They [the west] chose war.” And still, as new geopolitical and geoeconomic fault lines keep emerging, it is as though West Asia is anticipating something “big” coming ahead. That feeling was palpable in the air at Valdai. To paraphrase Yeats, and updating him to the young, turbulent 21st century, “what rough beast, its hour come out at last, slouches towards the cradle [of civilization] to be born? Tyler Durden Mon, 03/06/2023 - 23:40.....»»

Category: blogSource: zerohedgeMar 7th, 2023