NO STRINGS ATTACHED NEWS THAT MAINSTREAM JUST WON'T COVER.
Clown world is here
https://www.infowars.com/lefto-the-clown-discusses-what-its-like-to-hang-out-with-joe-biden/
US Military Grounds 300 Saudi Aviation Students After Pensacola Shooting Spree
Following the shooting spree last week at the Naval air station in Pensacola, Fla. last week by 2nd Lt. Mohammed Saeed Alshamrani, who shot and killed three people, Reuters reports that roughly 300 Saudi Arabian military aviation students have been grounded as part of a "safety stand-down."
“A safety stand-down and operational pause commenced Monday for Saudi Arabian aviation students,” Navy spokeswoman Lt. Andriana Genualdi told Reuters.
Genualdi said the grounding included three different military facilities: Naval Air Station Pensacola, Naval Air Station Whiting Field and Naval Air Station Mayport, all in Florida; adding that while it was unclear when the Saudi students would be allowed to fly again, their classroom training was expected to resume soon.
There are currently about 850 Saudi students in the United States for military training.
The FBI has said that it believes the Saudi airman acted alone, and military leaders careful to portray this as a localized issue which would not affect the overall U.S.-Saudi relationship.
Of course, we are sure this will inflame the left as claims of racism will scream across Twitter faster than bullets from an M16.
Tyler Durden Tue, 12/10/2019 - 16:28 Tags Politics Education Disaster AccidentGundlach Live Webcast: "A Rolling Loan Gathers No Loss"
Last week, DoubleLine CEO Jeff Gundlach sat down with Yahoo Finance to discuss how US stocks would get absolutely crushed in the next recession. In a continuation piece via Yahoo, Gundlach suggested that trouble is brewing in debt markets as interest rates hover around zero. Gundlach said the 2020s could exhibit socio-economic chaos as the debt bomb the US is sitting on ignites into the next recession.
"It's pretty interesting because the 20s in the 20th century, the 20s were super boom times. And weirdly, I think the 20s this time will be very much different than that, with real turmoil."
Gundlach said the decades of can-kicking would finally stop in the 2020s, and the US will have to face realities relating to its debt situation.
"[We're] going to have to face Social Security, health care, all of these things, deficit-based spending — all of that is going to have to be resolved during the 2020s because the compounding curve is just so bad," he said.
The billionaire investor said interest costs on the debt would soar from 1.25% to at least 3% by 2027. "That's a big, big increase. And that's coming," he warned.
"And when you do that, it kind of says, 'Hey, GDP is going to be knocked by 2%-2.5% because we have to pay interest,'" he added, which suggests that the 2020s could be a lost era situated in a low growth period with social-economic instabilities.
He said the Federal Reserve understands what's coming down the pipe, and it's why everyone is starting to talk about MMT - as it could be the policy prescription pitched by lawmakers and the Fed to lift the US out of the next financial downturn.
Gundlach said, "they [Fed] knows that this problem is going to really hit the headlines when the next economic downturn comes, and I think it's foolish to believe that there will be no economic downturn for the next ten years considering where we are right now."
With all that in mind, Gundlach is holding his latest live DoubleLine webcast today at 4:15pm ET alongside DoubleLine Portfolio Manager Andrew Hsu, titled "A Rolling Loan Gathers no Loss" (a phrase borrowed from Kyle Bass), which we assume will focus on the (dis)continuity of the credit market in a world of ever lower rates, and what happens if and when rates spike. That and all the other usual macro and economic commentary.
Log into the webcast by clicking on the image below (or here).
Stocks, Bonds, & Dollar Stumble As Traders Reach 'Peak FOMO'
There's no better proxy for the traders' level of FOMO-ness, it is the beta between momo funds and the market, and as Bloomberg notes, it is sitting near its highest level in almost two years.
Source: Bloomberg
Cause or effect - Peak FOMO is occurring along with Peak Fed balance sheet expansion...
But... while hedgies are chasing the market with everything they have... others are buying extreme downside protection with both hands and feet...
Source: Bloomberg
The Other Top...
[youtube https://www.youtube.com/watch?v=CNpqVWhgdZs]
But none of that stopped China from rallying overnight...
Source: Bloomberg
And European stocks recovered most of Monday's losses...
Source: Bloomberg
US Majors slipped lower again on the day (despite plenty of vol-creating trade headlines)...
Source: Bloomberg
But futures show the real chaos...
NOTE how VWAP (blue line) was key trend change level all day
And stocks just kept decoupling from bonds
Source: Bloomberg
Another short-squeeze was engineered off trade headlines at the open... but again it lost its mojo...
Source: Bloomberg
Bank stocks continue to relatively outperform despite the yield curve's collapse in the last couple of days...
Source: Bloomberg
Treasury yields were higher on the day with the short-end notably underperforming...
Source: Bloomberg
Flattening the yield curve dramatically...
Source: Bloomberg
The Dollar dropped for the 7th day in the last 8 to its lowest since Nov 5th...
Source: Bloomberg
Yuan rallied off the fix on optimistic traiff delay headlines...
Source: Bloomberg
Cryptos continue to slide...
Source: Bloomberg
Commodities were all higher on the day, but copper leads on the week...
Source: Bloomberg
WTI remains in its rising channel ahead of tonight's inventory data...
The year’s best-performing major commodity is showing no signs of slowing. Bloomberg points out that Palladium topped $1,900 an ounce for the first time ever on Tuesday after South African mining companies halted operations in response to the country’s power cuts.
Source: Bloomberg
Tight supplies and stricter vehicle-emissions rules have fueled a string of record highs for the metal used in autocatalysts, with Citi seeing prices jumping to $2,500 by mid-2020.
Palladium is up over 50% YTD...
Source: Bloomberg
Finally, as we noted previously, recession fears have disappeared from the headlines... in a rather ominous way...as the last time this happened was the summer of 2008...
Source: Bloomberg
And as we all anxiously await Powell's prognostications tomorrow, the market is pricing just a 0.2% chance of a rate-cut...
Source: Bloomberg
As stocks rallied in the last week, the market priced out more and more dovishness...
Source: Bloomberg
Something is breaking in leveraged balance-sheet-land.
Tyler Durden Tue, 12/10/2019 - 16:01 Tags Business FinanceNo Insurance Policy? Lisa Page Sues FBI, DOJ For "Unlawful" Disclosure Of Strzok Texts
Remember Lisa Page? She was the never-Trumping partisan FBI lawyer who, together with her lover Peter Strzok, was among the first FBI agents fired for "bias" on the job as part of their probe of Trump's "collusion" with Russia. She was also the one whose nearly 400 text messages with Strzok disclosed the presence of an "insurance policy" to prevent a Trump presidency.
Unfortunately for Lisa, she never came up with an insurance policy should Trump win the election and all her scheming come to light and grace the front pages of the world's newspaper. Except to sue that is.
I sued the Department of Justice and FBI today. I take little joy in having done so. But what they did in leaking my messages to the press was not only wrong, it was illegal.https://t.co/ecR58rmxlB
— Lisa Page (@NatSecLisa) December 10, 2019On Tuesday, Page - who has been a frequent target of President Donald Trump’s barbed tweets and fake orgasms - sued the Justice Department and the FBI over what she claims were illegal leaks to media outlets of her nearly 400 text messages with Strzok. These leaks are not to be confused with the near-daily leaking of virtually everything president Trump does by her colleagues at the FBI, CIA, NSA, and so on.
In her complaint, Page alleges "shocking and egregious behavior" - in the worlds of the ultraliberal Lawfare blog - by DOJ officials, specifically Rod Rosenstein and Sarah Flores.
Page’s lawsuit alleging violation of the Privacy Act came a day after the Justice Department’s internal watchdog in a new report said she "did not play a role in the decision" to open a probe into the Trump’s 2016 campaign even though Trump has argued that the bias against him by the married Page and FBI Agent Peter Strzok as displayed in their private text messages played a key role in the FBI’s decision.
Page’s text messages with Strzok were released “to a group of reporters” as part of a 90-page document by the Justice Department in December 2017, notes her suit, filed in federal court in Washington, D.C.
The officials who authorized their release "and their allies sought to use, and ultimately did use, the messages to promote the false narrative that [Page] and others at the FBI were biased against President Trump, had conspired to undermine him, and had otherwise had engaged in allegedly criminal acts, including treason." According to the lawsuit, at the time the messages were part of a larger group of materials that was under review by the Justice Department’s Office of Inspector General “for evidence of potential bias in the FBI’s investigation of former Secretary of State Hillary Clinton’s use of a private e-mail server for government communications."
In other words, it's ok to plot against an American citizen and launch a full blown investigation - and spying in the words of the US attorney general - on nothing more than competitor-funded opposition research, but once the details of your activity become common knowledge, well, that's really going too far.
Indeed, as the abovementioned ultraliberal Lawfare blog was quick to explain, all Page did was a simple "mistake":
Page made mistakes, which were appropriately addressed as a personnel matter. What happened following that was in no way justified or acceptable. It was politically motivated and it was wrong.
It gets better.
In her recent attempt to rehabilitate herself, Page gave an interview to The Daily Beast in which she said that whenever Trump mentions her name on Twitter or at political rallies "it’s like being punched in the gut."
“My heart drops to my stomach when I realize he has tweeted about me again,” Page told The Daily Beat. “The president of the United States is calling me names to the entire world. He’s demeaning me and my career. It’s sickening.”
Here's a thought: perhaps if he didn't have a reason to do so, he wouldn't do it? To Page though, that thought is lost. Instead she complained that "when the president accuses you of treason by name, despite the fact that I know there’s no fathomable way that I have committed any crime at all, let alone treason, he’s still somebody in a position to actually do something about that. To try to further destroy my life. It never goes away or stops, even when he’s not publicly attacking me."
We look forward to finding if John Durham shares her conclusion.
Page's lawsuit is below (pdf link).
Tyler Durden Tue, 12/10/2019 - 15:55Baby GATT Back: The End Of The World Trade Organization?
Submitted by Hugo Erken, head of International Economics at Rabobank
The WTO Appellate Body crisis
On 10 December, two members of the highest dispute settlement body of the World Trade Organisation, the Appellate Body, are retiring. As the US has been blocking the appointment of new members since 2017, the Appellate Body, as of today, won’t be able to fulfil its tasks
The shutdown of the Appellate Body carries the risk that the entire dispute mechanism of the WTO collapses
The discontent of the US with the WTO’s dispute settlement system (DSS) is not new. The US is especially dissatisfied with judicial overreach, the WTO’s rulings in anti-dumping cases and the slow process of the entire DSS. However, the data shows that the US is not in a disadvantageous position vis-à-vis other countries in the rulings of the WTO
Hence, a more strategic reason to strip the Appellate Body of its powers is that the US wants to settle international disputes again according to the GATT regime, the predecessor of the WTO. Under GATT, large trading blocs will have the upper hand over smaller ones and dictate the rules of the trading game
What has happened?
On 10 December, two member of the highest body of the dispute settlement system (DSS) of the World Trade Organization (WTO), the Appellate Body, are retiring. What is problematic is that since 2017 the United States has blocked the appointment of new members to this body, because it is dissatisfied with the way the Appellate Body operates. All WTO members must agree with the appointment of new members and the US has used its veto. Under normal circumstances, the Appellate Body has seven members who review cases. But, due to the US blockage, the number of members has gradually declined over the last two years to only three members in the last couple of months, which is the minimum requirement for the Appellate Body to review cases. As of today, the Appellate Body has insufficient members to fulfil its task.
Choking off funding
The US also has cranked up the pressure on the Appellate Body by choking off its funding. In order to secure the WTO’s preliminary Budget for 2020, members states complied to the US demand to lower the annual spending of Appellate Body members by 87% and the operating fund by 95%.
How does the dispute settlement system work?
With the founding of the World Trade Organisation in 1995, countries have also agreed to forge a judicial framework to formalise the way disputes between member states are resolved. The Dispute Settlement Understanding (DSU) sets out the procedures under the flag of the WTO. If consultation among quarrelling WTO members has failed to produce a solution, the case is taken to an ad hoc dispute panel, whose decisions are binding unless appealed. Cases that are appealed, are brought before the Appellate Body. The Appellate Body is only able to rule over the dispute panel’s legal findings and conclusions. The Appellate Body report is final and legally binding and the defending country must bring itself in conformity with WTO obligations within a ‘reasonable period of time’. If a defending party fails to implement a panel or Appellate Body decision, the complainant party may be given the right to respond with protectionist measures. This was for instance the case in the Airbus dispute early October of this year, where the WTO ruled that European airplane manufacturer Airbus received illegal subsidies. As a result, the WTO authorized the United States to impose retaliatory tariffs of 100% on USD 7.5bn worth of export products from the EU.
An Appellate Body in limbo
With a total case load exceeding 600 cases since the start of the WTO in 1995, the DSS is probably the busiest international dispute settlement system in the world. The Appellate Body has an extremely important task within this system, as two thirds of the disputes are appealed. All in all, the Appellate Body could be seen as the Supreme Court of trade rulings or the international arbiter of trade. However, now that this body has been shut down and at the same time is choked off important funding sources, the entire dispute mechanisms of the WTO is at risk. In his farewell speech, departing Appellate Body member Peter Van den Bossche said: “One can predict with confidence that, once the Appellate Body is paralyzed, the losing party will in most cases appeal the panel report and thus prevent it from becoming legally binding. Why would WTO members still engage in panel proceedings if panel reports are likely to remain unadopted and thus not legally binding? As from 11 December 2019, it is therefore not only appellate review but also the entire WTO dispute settlement system that will no longer be fully operational and may progressively shut down."
Why is the US asphyxiating the WTO’s dispute settlement system?
The discontent of the US with the WTO’s dispute settlement system, and the Appellate Body in particular, is not something that has been solely brought to the fore by the Trump Administration. In fact, there has been a litany of US-led complaints over the last decade (see here for a reconstruction). There are three reasons which are important to address and which illustrate the frustration of the US:
Judicial overreach: the US has criticized the judicial overreach of the Appellate Body in interpreting WTO law. This covers a numbers of problems, for instance the practice by the Appellate Body to follow previous rulings. Moreover, the US has argued that the Appellate Body takes an overly broad view of matters that it can deal with. For instance, the US would like to adopt protectionist measures as a means to curb the negative impact of tradedistorting subsidies provided to state-owned enterprises (see here). This complaint of course relates to China’s growth model. But a number of Appellate Body interpretations have prohibited the US from installing such trade barriers. Anti-dumping: another topic which has led to frustrations in Washington is that the US has lost 93% of all anti-dumping cases (2 out of 29) which have been reviewed by the WTO (see here). Slow process: all stages of the dispute settlement process should take no longer than 18 to 19 months, if we take into account an extended panel period and appeal period. In practice, however, the duration of proceedings has reached an average of almost 34 months (see Reich, 2017).Is the action by the US proportionate?
The question of course is whether asphyxiating the WTO’s dispute settlement system is the appropriate way to safeguard US interests. Although the dispute settlement system is far from flawless, endangering the existence of the Appellate Body is perhaps not proportionate.
Moreover, to avoid the situation we are currently facing, WTO members have continuously been working on reform proposals, but thus far neither seem to have pleased the US, leading to the deadlock that we are facing today. Peter Van den Bossche says: “It is, however, not clear to me, whether any reform of the current system, short of its virtual elimination, will satisfy the United States.”
What do the data tell us?
If we look at the data, both the US and the EU are by far the biggest users of the DSS. Over the course of time, the US has filed 132 cases as complainant and was defendant in 164 cases (Figure 1). Of the complaints it has filed, the US has won 90% of the cases (see Jacques Delors Institute, 2018), but at the same time it is also the country that loses the most cases in which it is respondent. All in all, the win/lose ratio does not differ much from that of other countries.
Strategic reasons
So the data does not show that the US is in a disadvantageous position vis-à-vis other countries in the ruling of the WTO. At the same time, the shutdown of the Appellate Body is quite drastic, which fuels the suspicion that there must be a more strategic reason for the US to take these draconian measures.
And on this we can obviously only speculate, but one motivation could be that the US wants to settle international disputes again according to the GATT (General Agreement on Tariffs and Trade) regime, which is the predecessor of the WTO. With the Appellate Body in limbo and DSS likely to collapse, trade disputes would have to be settled again under that regime. Under GATT, disputes were not resolved within a judicial formalised framework (with legally binding rulings), but had to be resolved the diplomatic way. This means we are shifting to a more power-oriented regime, rather than a law-oriented one. Especially large countries could block rulings under the GATT regime, without being penalised. Indeed, McGivern (2002) argues that the complaining country could only retaliate by consent of all GATT Contracting Parties, includes the defendant, which ensure that retaliation under GATT was completely absent. This perspective might sound interesting to the US Administration and is in line with its ‘America First’ doctrine, as large trading blocs will have the upper hand over smaller ones and dictate the rules of the trading game.
Trade powerplay
If countries are not able to persuade the US to lift the blockage on the appointment of Appellate Body members, the world will lose its international legal trade arbiter (i.e. the Appellate Body) and the dispute settlement system will likely collapse in a short period of time. Meanwhile the EU is trying to patch the broken system, by copying the Appellate Body framework and rallying partners to join this temporary appeal system voluntarily. Norway and Canada have agreed to join, but the US, China and India have refused.
If the current issues are not resolved in a reasonable time frame, this implies that, in the future, countries will have to settles trade disputes again according to the GATT regime, which generally means trade rules will be dictated by the most powerful countries. Especially smaller countries will lose out, as larger countries can simply ignore a ruling against them without repercussions. This is a fate that may befall smaller emerging market economies and could expose their vulnerabilities. Many smaller European countries, such as the Netherlands, are protected by overarching EU framework under which they operate. The United Kingdom, on the other hand, is already vulnerable due to Brexit and the current course of events will likely impinge on its trade perspectives even more.
Tyler Durden Tue, 12/10/2019 - 15:30
![The [DS] Crimes Will Be Publicly Answered Soon, Sheep No More - Episode 2040b](https://i1.ytimg.com/vi/880Zr9yOMJo/hqdefault.jpg)
