There have been numerous articles slamming the iPhone’s results and outlook, along with a few analyst downgrades. However, when you dig into the numbers they look actually pretty good.
Shortly after noon on Friday, U.S. Special Counsel Robert Mueller announced an indictment of 13 Russian nationals and three Russian entities, accusing them of interfering in the 2016 presidential election and operating fake social media accounts.
In the indictment announced on Friday – the first criminal case to accuse Russians of seeking to influence the outcome of the U.S. election and support Donald Trump – Mueller describes a sweeping, years-long, multimillion-dollar conspiracy by hundreds of Russians aimed at criticizing Hillary Clinton and supporting Senator Bernie Sanders and Trump. He charged 13 Russian nationals and three Russian entities and accused them of defrauding the U.S. government by interfering with the political process.
Mueller charges “defendants knowingly and intentionally conspired with each other (and with persons known and unknown to the Grand Jury) to defraud the United States by impairing, obstructing, and defeating the lawful functions of the government through fraud and deceit for the purpose of interfering with the U.S. political and electoral processes, including the presidential election of 2016.”
The indictment adds that the Russians “were instructed to post content that focused on ‘politics in the USA’ and to ‘use any opportunity to criticize Hillary and the rest (except Sanders and Trump—we support them)’.”
It gets better: the defendants reportedly worked day and night shifts to pump out messages, controlling pages targeting a range of issues, including immigration, Black Lives Matter, and they amassed hundreds of thousands of followers. They set up and used servers inside the U.S. to mask the Russian origin of the accounts.
Ultimately, and this is the punchline, the goal was to disparage Hillary Clinton and to assist the election of Donald Trump.
In other words, anyone who was disparaging Clinton, may have “unwittingly” been a collaborator of the 13 Russian “specialists” who cost Hillary the election.
The Russian organization named in the indictment – the Internet Research Agency – and the defendants began working in 2014 – so one year before the Trump candidacy was even announced – to interfere in U.S. elections, according to the indictment in Washington. They used false personas and social media while also staging political rallies and communicating with “unwitting individuals” associated with the Trump campaign, it said.
The Russians “had a strategic goal to sow discord in the U.S. political system,” according to the indictment in Washington.
The Russians also reportedly bought advertisements on U.S. social media, created numerous Twitter accounts designed to appear as if they were U.S. groups or people, according to the indictment. One fake account, @TEN_GOP account, attracted more than 100,000 online followers.
The Russians tracked the metrics of their effort in reports and budgeted for their efforts. Some, as described below, traveled to the U.S. to gather intelligence for the surreptitious campaign. They used stolen U.S. identities, including fake driver’s licenses, and contacted news media outlets to promote their activities.
The full list of named defendants in addition to the Internet Research Agency, as well as Concord Management and Consulting and Concord Catering, include:
- MIKHAIL IVANOVICH BYSTROV,
- MIKHAIL LEONIDOVICH BURCHIK,
- ALEKSANDRA YURYEVNA KRYLOVA,
- ANNA VLADISLAVOVNA BOGACHEVA,
- SERGEY PAVLOVICH POLOZOV,
- MARIA ANATOLYEVNA BOVDA,
- ROBERT SERGEYEVICH BOVDA,
- DZHEYKHUN NASIMI OGLY ASLANOV,
- VADIM VLADIMIROVICH PODKOPAEV,
- GLEB IGOREVICH VASILCHENKO,
- IRINA VIKTOROVNA KAVERZINA,
- VLADIMIR VENKOV
- YEVGENIY VIKTOROVICH PRIGOZHIN
Mueller’s office said that none of the defendants was in custody.
So how is Trump involved? Well, he isn’t, as it now seems that collusion narrative is dead, and instead Russian involvement was unilateral. Instead, according to the indictment, the Russian operations were unsolicited and pro bono, and included “supporting Trump… and disparaging Hillary Clinton,’ staging political rallies, buying political advertising while posing as grassroots U.S. groups. Oh, and communicating “with unwitting individuals associated with the Trump Campaign and with other political activists to seek to coordinate political activities.“
Defendant ORGANIZATION had a strategic goal to sow discord in the U.S. political system, including the 2016 U.S. presidential election. Defendants posted derogatory information about a number of candidates, and by early to mid-2016, Defendants’ operations included supporting the presidential campaign of then-candidate Donald J. Trump (“Trump Campaign”) and disparaging Hillary Clinton. Defendants made various expenditures to carry out those activities, including buying political advertisements on social media in the names of U.S. persons and entities. Defendants also staged political rallies inside the United States, and while posing as U.S. grassroots entities and U.S. persons, and without revealing their Russian identities and ORGANIZATION affiliation, solicited and compensated real U.S. persons to promote or disparage candidates. Some Defendants, posing as U.S. persons and without revealing their Russian association, communicated with unwitting individuals associated with the Trump Campaign and with other political activists to seek to coordinate political activities.
Furthermore, the dastardly Russians created fake accounts to pretend they are Americans:
Defendants, posing as U.S. persons and creating false U.S. personas, operated social media pages and groups designed to attract U.S. audiences. These groups and pages, which addressed divisive U.S. political and social issues, falsely claimed to be controlled by U.S. activists when, in fact, they were controlled by Defendants. Defendants also used the stolen identities of real U.S. persons to post on ORGANIZATION-controlled social media accounts. Over time, these social media accounts became Defendants’ means to reach significant numbers of Americans for purposes of interfering with the U.S. political system, including the presidential election of 2016
Mueller also alleges a combination of traditional and modern espionage…
Certain Defendants traveled to the United States under false pretenses for the purpose of collecting intelligence to inform Defendants’ operations. Defendants also procured and used computer infrastructure, based partly in the United States, to hide the Russian origin of their activities and to avoid detection by U.S. regulators and law enforcement.
Mueller also charges that two of the defendants received US visas and from approximately June 4, 2014 through June 26, 2014, KRYLOVA and BOGACHEVA “traveled in and around the United States, including stops in Nevada, California, New Mexico, Colorado, Illinois, Michigan, Louisiana, Texas, and New York to gather intelligence, After the trip, KRYLOVA and BURCHIK exchanged an intelligence report regarding the trip.”
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The indictment points to a broader conspiracy beyond the pages of the indictment, saying the grand jury has heard about other people with whom the Russians allegedly conspired in their efforts.
Stocks are not happy.
Rosenstein is expected to hold a briefing at 1:30pm ET. Watch it live below:
Read the indictment below (link):
Scientists found a “highly unusual” particle containing enriched uranium-235 during a routine sampling of the air above the Aleutian Islands in August 2016. The source of the material, typically used in nuclear fuel and bombs, remains unclear – while the particle itself is unique in that it’s the first of its kind to be detected in 20 years of plane-based observations.
While uranium normally occurs in the ground as the moderately radioactive isotope U-238 – and typically not floating in the air, it must be refined using various methods – typically centrifuges, in order to produce U-235. Particles containing 3-4% U-235 are considered “low enriched” for civilian reactors, while anything north of 90% is considered “weapons grade.”
“During 20 years of aircraft sampling of millions of particles in the global atmosphere, we have rarely encountered a particle with a similarly high content of 238U [uranium-238] and never a particle with enriched 235U [uranium-235],” reads an abstract from the study.
The mystery particle – the bulk of which consisted of “material consistent with combustion of heavy fuel oil” and a “very small amount of enriched uranium” was discovered at an altitude of 7km (4.3 miles) – lower than Mount Everest.
Researchers involved in the joint project between NOAA ESRL Chemical Sciences Division, the Norwegian Institute for Air Research, and UC Irvine say they were making no special attempts to sample radioactive material during the routine flight to sample the atmosphere.
“One of the main motivations of this paper is to see if somebody who knows more about uranium than any of us would understand the source of the particle,” scientist Dan Murphy from NOAA told Gizmodo reporter Ryan F. Mandelbaum. After all, “aerosol particles containing uranium enriched in uranium-235 are definitely not from a natural source,” he writes in the paper, published recently in the Journal of Environmental Radioactivity.
They were not intending to look for radioactive elements. “The purpose of the field campaign was to obtain some of the first global cross-sections of the concentration of trace gases and of dust, smoke, and other particles in the remote troposphere over the Pacific and Atlantic Oceans,” according to the paper. –Gizmodo
The precise origin of the radioactive particle remains a mystery, however the abstract suggests it could have originated “from a variety of areas across Asia,” and researchers are noting its existence “in case it indicates a novel source where enriched uranium was dispersed.”
“It’s not a significant amount of radioactive debris by itself,” said Dan Murphy of NOAA. “But it’s the implication that there’s some very small source of uranium that we don’t understand.”
But where the particle came from is a mystery. It’s pretty clear it came from recently made reactor-grade uranium, the authors write (aka, not from Fukushima or Chernobyl). Perhaps from burnt fuel contaminated with uranium, they thought. They tried to trace it to a source using the direction of the wind—but their best estimate pointed vaguely to Asia. Higher probability areas include some parts of China, including its border with North Korea, and parts of Japan. –Gizmodo
The NOAA scientists are hoping that other experts in the field will chime in with an answer. “We’re hoping that someone in a field that’s not intimately associated with atmospheric chemistry can say ‘a-ha!’ and give us a call.”
In a bombshell New Yorker report from Ronan Farrow, who was the first reporter to expose Democratic donor Harvey Weinstein for his decades-long history of sexual assault, Karen McDougal, a former Playboy Model who first met President Trump in 2006 during a pool party at the Playboy mansion, shared details about her alleged relationship with the president, and his relationship with National Enquirer owner David Pecker (and holding company American Media Inc), a longtime “personal friend” who once reportedly paid her $150,000 for the exclusive rights to her story, only to let it never see the light of day.
In the world of tabloid journalism, this process is called “catch and kill“. Though McDougal’s story was first reported in 2016 by the Wall Street Journal, Farrow’s account is the first time she’s shared her story – which she “corroborated with an eight-page handwritten account taken at the time of the affair” – in full detail.
The two first met after a taping of Trump’s show, the Apprentice, at the Playboy mansion. Trump was reportedly “all over her” and one of the show’s producers even remarked “you could be his next wife.” According to the New Yorker, McDougal kept handwritten notes about the affair, which she said began in 2006, after the taping of “The Apprentice” episode.
Over a period of nine months, Trump ferried her to meet him both in LA and around the country, taking care not to leave a paper trail. During their meetings, McDougal said she would first be led to meet Trump by Keith Schiller, his former bodyguard.
Pecker’s relationship with Trump is an advantageous one for him, because Pecker is likely one of the few people who knows where “all the bodies are buried” for the most powerful man in the world. Trump has denied the affair.
McDougal, in her first on-the-record comments about A.M.I.’s handling of her story, declined to discuss the details of her relationship with Trump, for fear of violating the agreement she reached with the company. She did say, however, that she regretted signing the contract. “It took my rights away,” McDougal told me. “At this point I feel I can’t talk about anything without getting into trouble, because I don’t know what I’m allowed to talk about. I’m afraid to even mention his name.”
A White House spokesperson said in a statement that Trump denies having had an affair with McDougal:
“This is an old story that is just more fake news. The President says he never had a relationship with McDougal.”
American Media said that an amendment to McDougal’s contract—signed after Trump won the election—allowed her to “respond to legitimate press inquiries” regarding the affair. The company said that it did not print the story because it did not find it credible.
Six former A.M.I. employees told me that Pecker routinely makes catch-and-kill arrangements like the one reached with McDougal. “We had stories and we bought them knowing full well they were never going to run,” Jerry George, a former A.M.I. senior editor who worked at the company for more than twenty-five years, told me. George said that Pecker protected Trump. “Pecker really considered him a friend,” George told me. “We never printed a word about Trump without his approval.” Maxine Page, who worked at A.M.I. on and off from 2002 to 2012, including as an executive editor at one of the company’s Web sites, said that Pecker also used the unpublished stories as “leverage” over some celebrities in order to pressure them to pose for his magazines or feed him stories. Several former employees said that these celebrities included Arnold Schwarzenegger, as reported by the Los Angeles Times, and Tiger Woods. (Schwarzenegger, through an attorney, denied this claim. Woods did not respond to requests for comment.) “Even though they’re just tabloids, just rags, it’s still a cause of concern,” Page said. “In theory, you would think that Trump has all the power in that relationship, but in fact Pecker has the power – he has the power to run these stories. He knows where the bodies are buried.”
While there’s no evidence Pecker has ever used his leverage over Trump, several of his former employees said he would often use “killed” stories as leverage to get celebrities like Tiger Woods to feed him stories.
During their relationship, McDougal noted that Trump would always order the same meal (steak and potatoes with no alcohol) and that he often would send her press clippings about himself or his children. McDougal’s account shared some amusing similarities with an account of an affair with Trump offered by former adult film actress Stormy Daniels. For instance, both Daniels and McDougal said Trump watched Discovery Channel’s “Shark Week” programming with them. Daniels famously revealed that Trump told her he hates sharks.
After their first sexual encounter, McDougal said Trump offered to pay her – to which she declined.
As the pool party at the Playboy Mansion came to an end, Trump asked for McDougal’s telephone number. For McDougal, who grew up in a small town in Michigan and worked as a preschool teacher before beginning her modelling career, such advances were not unusual. John Crawford, McDougal’s friend, who also helped broker her deal with A.M.I., said that Trump was “another powerful guy hitting on her, a gal who’s paid to be at work.” Trump and McDougal began talking frequently on the phone, and soon had what McDougal described as their first date: dinner in a private bungalow at the Beverly Hills Hotel. McDougal wrote that Trump impressed her. “I was so nervous! I was into his intelligence + charm. Such a polite man,” she wrote. “We talked for a couple hours – then, it was “ON”! We got naked + had sex.” As McDougal was getting dressed to leave, Trump did something that surprised her. “He offered me money,” she wrote. “I looked at him (+ felt sad) + said, ‘No thanks – I’m not ‘that girl.’ I slept w/you because I like you – NOT for money’ – He told me ‘you are special.’
The New Yorker also described the elaborate system that was created to conceal Trump’s alleged affair:
Afterward, McDougal wrote, she “went to see him every time he was in LA (which was a lot).” Trump, she said, always stayed in the same bungalow at the Beverly Hills Hotel and ordered the same meal—steak and mashed potatoes—and never drank. McDougal’s account is consistent with other descriptions of Trump’s behavior. Last month, In Touch Weekly published an interview conducted in 2011 with Stephanie Clifford in which she revealed that during a relationship with Trump she met him for dinner at a bungalow at the Beverly Hills Hotel, where Trump insisted they watch “Shark Week” on the Discovery Channel. Summer Zervos, a former contestant on “The Apprentice,” alleged that Trump assaulted her at a private dinner meeting, in December of 2007, at a bungalow at the Beverly Hills Hotel. Trump, Zervos has claimed, kissed her, groped her breast, and suggested that they lie down to “watch some telly-telly.” After Zervos rebuffed Trump’s advances, she said that he “began thrusting his genitals” against her. (Zervos recently sued Trump for defamation after he denied her account.) All three women say that they were escorted to a bungalow at the hotel by a Trump bodyguard, whom two of the women have identified as Keith Schiller. After Trump was elected, Schiller was appointed director of Oval Office Operations and deputy assistant to the President. Last September, John Kelly, acting as the new chief of staff, removed Schiller from the White House posts. (Schiller did not respond to a request for comment.)
Over the course of the affair, Trump flew McDougal to public events across the country but hid the fact that he paid for her travel. “No paper trails for him,” she wrote. “In fact, every time I flew to meet him, I booked/paid for flight + hotel + he reimbursed me.” In July, 2006, McDougal joined Trump at the American Century Celebrity Golf Championship, at the Edgewood Resort, on Lake Tahoe. At a party there, she and Trump sat in a booth with the New Orleans Saints quarterback Drew Brees, and Trump told her that Brees had recognized her, remarking, “Baby, you’re popular.” (Brees, through a spokesman, denied meeting Trump or McDougal at the event.) At another California golf event, Trump told McDougal that Tiger Woods had asked who she was. Trump, she recalled, warned her “to stay away from that one, LOL.”
Trump promised to buy McDougal a condo – which he never did – and also introduced her to members of his family.
McDougal, who had earlier kept quiet for fear of reprisal, said she ended the affair in April 2007 because she felt “tremendously guilty” (though Trump had revealed to her that he and his wife Melania maintained separate bedrooms).
McDougal ended the relationship in April, 2007, after nine months. According to Crawford, the breakup was prompted in part by McDougal’s feelings of guilt. “She couldn’t look at herself in the mirror anymore,” Crawford said. “And she was concerned about what her mother thought of her.” The decision was reinforced by a series of comments Trump made that McDougal found disrespectful, according to several of her friends. When she raised her concern about her mother’s disapproval to Trump, he replied, “What, that old hag?” (McDougal, hurt, pointed out that Trump and her mother were close in age.) On the night of the Miss Universe pageant McDougal attended, McDougal and a friend rode with Trump in his limousine and the friend mentioned a relationship she had had with an African-American man. According to multiple sources, Trump remarked that the friend liked “the big black dick” and began commenting on her attractiveness and breast size. The interactions angered the friend and deeply offended McDougal.
Speaking carefully for fear of legal reprisal, McDougal responded to questions about whether she felt guilty about the affair, as her friends suggested, by saying that she had found God in the last several years and regretted parts of her past. “This is a new me,” she told me. “If I could go back and do a lot of things differently, I definitely would.”
Trump also hooked up with McDougal at the Lake Tahoe golf tournament in 2006 where he also met Daniels. While McDougal said she voluntarily sold her story to the Enquirer, she insists that the way the deal was done was “exploitative.”
She sold the story during the 2016 presidential election, after a friend suggested it, and brokered the transaction – though she was fearful of going public for fear that Trump’s supporters might harass her. McDougal says she is a Republican. She signed her agreement with the Enquirer on Aug. 5, 2016, about a month before the infamous “Access Hollywood” tape broke, and while Daniels was also trying to negotiate selling her story to “Good Morning America” and Slate.
Picture this: A tribal leader from a distant country visits the US. He’s brought to a large apartment building in New York City. When he gets out of the car, he looks up at the great building and is quite impressed. A uniformed doorman exits the foyer and comes out on the sidewalk. The tribesman sees the gold braiding and brass buttons of his coat and immediately decides that this is a very important person. Again he looks up at the building and says to the doorman, “This is a very great home you have. You must be very important indeed.”
Of course, if we were present, we might chuckle at the tribesman’s naiveté. The owners of such a great building would never greet people at the entrance. They leave such trivial tasks to hired servants, whilst they run the real business without ever needing any direct contact with visitors as they enter the building. And, in addition, doormen come and go – they are, after all, disposable. The owners – those who control what happens in the building – retain their positions over the long term… and may remain anonymous, if they so choose.
We find this simple concept easy enough to understand, and yet we chronically have difficulty in understanding that, in most countries, the president, or prime minister, is not by any means the man who makes the big decisions in the running of the country.
We assume that, because we were allowed to vote for our leader, he must actually be our leader. But, as Mark Twain has at times been credited as saying, “If voting made any difference, they wouldn’t let us do it.”
Similarly, the man whose family took over the financing of Europe, Meyer Rothschild, said, “Permit me to issue and control the money of a nation and I care not who makes its laws.” His family has been calling the shots for centuries, but like the owners of the apartment building, they keep a low profile.
Remarkably, most people will nod their heads at the above quotes, yet somehow still imagine their elected leader to be in charge.
Most anyone will accept that the voting system in their country has been corrupted in one way or another and it’s even more likely that they’ll acknowledge that the central banks control the flow of money. Yet, they persist in believing that, even if elections are financed by the big banks, the military industrial complex, Big Pharma, etc., somehow, those who are elected remain loyal to the voters, not to those who paid for their election.
And, they imagine these elected members to be running the show.
Further, whilst they often acknowledge that the political party that they oppose is bought and paid for, they prefer to think that the one they favour is not.
At this point, both the EU and the US are run by the Deep State. In Europe it’s a bit more obvious, as the EU is a visible, unelected body that holds sway over all of the most significant developments in Europe.
In the US, it’s a bit less obvious, but it’s generally understood that the CIA, FBI and other similar organisations run independently of the president. (He has the power to fire a Director, but does not have the power to eliminate these organisations or change their agenda.)
The US is run as a corporatist body – joint rule by big business and the state.
The elected members are, like doormen, temporary. They are, of course, highly visible, which they’re intended to be, as they’re meant to distract the public eye away from those who are truly in charge.
And, like doormen, they’re disposable. They can be unelected at four-year intervals and the agenda continues as planned. They are, in fact, largely irrelevant to the direction that the country takes.
The president in particular falls into this category. There have been quite a few presidents, such as the present one, who rose to that post with little or no previous experience in elected office. Their election is a result of popularity. If they do a better job of creating campaign-promises than their opponents, they emerge as the winners, even if they have no political ties, associations with other legislators, or previous experience in the job.
And yet, we somehow assume that those who really pull the strings would spend hundreds of millions of dollars on elections, then tolerate a newly-elected outsider to wash away their investment by actually taking charge.
To be sure, there have been presidents who have bucked the Deep State, but they tend to change their tune rather quickly and get back into line. Those who have refused have sometimes found themselves on the business end of a bullet, although, more recently, the preferred tactic has been to invent accusations of corruption and indecency, then to produce questionable witnesses to discredit the leader. (A leader who has been forced out in disgrace is just as gone as one that’s been assassinated.)
But, almost invariably, the “leader” sees that it’s in his interest to cave in to the Deep State, as, perennially, they hold the real power. Campaign promises are tossed into the dustbin and it’s back to the previous, ongoing agenda. This we’ve witnessed time after time.
Does this mean that the president is only a mouthpiece for the Deep State? Well, no, it’s actually advantageous for him to express his own opinions, ruffle the public’s feathers and push his pet projects. It adds to the distraction that he’s in charge. However, the larger issues – particularly the flow of tax dollars into the pockets of corporations, continue exactly as planned, regardless of who’s in office. Bankers continue to receive absurdly large bailouts when they’ve grossly mismanaged their banks. The military industrial complex continues to enjoy perpetual warfare, so that they can supply armaments to the government for unnecessary conflicts. Big Pharma enjoys legislation that forces people to be vaccinated against their will and accept outrageously high prices for medications that are generally inexpensive to produce.
But, yes, as long as a president remains the spokesman to explain why such policies are not only tolerable, but essential, he may be allowed to occupy the oval office until the voters tire of him.
But, if this is true, why do people so quickly and so readily accept the “leader” to actually be unilaterally responsible for every facet of every governmental policy and action?
Well actually, nothing could be easier. It’s human nature to want to put a face to our praise and/or criticism. We can’t muster the same focus if we’re advised that we’re being ruled by a faceless group. We tend to respond more readily and more intensely to a single individual – a face we can conjure up immediately. “People desire certainty,” Doug Casey once observed to me, when discussing a related subject, and that’s exactly so. If we’re uncertain during troubled times, we’ll instantly jump at the opportunity to put a single face to the problem, to blame one individual for whatever is troubling us.
This is evidenced by the presentation of photos of Lee Harvey Oswald and Osama bin Laden, mere hours after major events, as the certain culprits. They were immediately accepted, without any question, by a people desperately seeking certainty.
Therefore, as soon as one leader is out and another takes his place, we’re able to immediately transfer our devotion or hatred to the replacement.
The concept of providing a single face to the public is one that was understood by George Orwell, who created the character of “Big Brother,” who would be on the video screens incessantly, as the face of the government.
But, in stating all of the above, it may seem that I’ve portrayed the doorman as insignificant and this is not the case. He does play quite an important role.
He’s absolutely essential, as he, more than any other legislator, creates a suitable distraction from those who really run the show. He’s in front of the microphone, does interviews, is filmed almost on a daily basis, and is constantly credited by the media as being either the saviour or the devil, depending upon which media outlet is providing the portrayal.
And the shakier an economy, and the greater the problems of a country, the more essential it is that the “leader” be visible. After all, when things go badly awry, someone has to serve as the fall guy.
When this occurs, he is, of course, disposable. He leaves in disgrace or is voted out and a new puppet is voted in whose loyalty is again to the Deep State, not to the voters. And, most importantly, the real agenda continues, as planned, regardless of whatever new campaign promises got him elected.
(This is not at all new. In 1933, Franklin Roosevelt introduced the Emergency Banking Act the day after his inauguration speech, in which he had assured the country that he would not mess with the currency.)
Campaign promises are dumped wholesale; the demeanour of the new leader may change dramatically, and the new leader’s very principles may suddenly evaporate after election day. However, the ongoing agenda does not. Regardless of who’s elected, or what party he professes to represent, we witness a continuation of the previous directions taken by those who truly hold the power.
What’s important to recognize is that, no matter how large the apartment building may be, no matter how impressive the presentation of the doorman may be, he is just that. He is only the front man, and he is disposable.
The Deep State runs the show. Their presence is permanent and their agenda is both ongoing and impervious to the whims of the voting public.
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The Deep State’s quiet control on the US financial system has pushed it to the brink. Find out how to protect yourself in our Guide to Surviving and Thriving During an Economic Collapse. Click here to download your free PDF copy now.
Earlier this week, the bizarre, unexplainable, ongoing plunge in the dollar and US bond prices in the aftermath of the stronger than expected CPI print which also sent equities surging, prompted at least one trader at Citi to explode: “Wake Up Folks, It’s Not Risk Positive“
Then again, maybe it is not all that unexplainable.
As Deutsche’s FX strategist, George Saravelos, writes, he has been getting numerous inquiries as to how can it be that US yields are rising sharply, yet the dollar is so weak at the same time?
He believes the answer is simple: the dollar is not going down despite higher yields but because of them. Higher yields mean lower bond prices and US bonds are lower because investors don’t want to buy them, or as he puts it “this is an entirely different regime to previous years.”
Below we repost his simple explanation, while highlighting that maybe…
… just maybe, the bottom for the dollar is now in?
From Deutsche Bank:
Blame the dollar on yields
We are well into 2018 and our feedback from recently attending the TradeTech FX conference in Miami is that the market is still struggling to understand or embrace dollar weakness. How can it be that US yields are rising sharply, yet the dollar is so weak at the same time? The answer is simple: the dollar is not going down despite higher yields but because of them. Higher yields mean lower bond prices and US bonds are lower because investors don’t want to buy them. This is an entirely different regime to previous years.
Dollar weakness ultimately goes back to two major problems for the greenback this year. First, US asset valuations are extremely stretched. As we argued in our 2018 FX outlook a combined measure of P/E ratios for equities and term premia for bonds is at its highest levels since the 1960s. Simply put, US bond and equity prices cannot continue going up at the same time. This correlation breakdown is structurally bearish for the dollar because it inhibits sustained inflows into US bond and equity markets.
The second dollar problem is that irrespective of asset valuations the US twin deficit (the sum of the current account and fiscal balance) is set to deteriorate dramatically in coming years. Not only does the additional fiscal stimulus recently agreed by Congress push the fair value of bonds even lower via higher issuance and inflation risk premia effects, but the current account that also needs to be financed will widen via import multiplier effects. When an economy is stimulated at full employment the only way to absorb domestic demand is higher imports. Under conservative assumptions the US twin deficit is set to deteriorate by well over 3% of GDP over the next two years.
The mirror image to all of this is that the flow picture into both Europe and Japan has been improving dramatically anyway. We have previously written about the positive flow dynamics in Europe as the flow distortions caused by extremely unconventional ECB policy are starting to adjust. But the Japanese basic balance has also shot up to a 4% surplus in recent years helped by a big improvement in the services balance (Chinese tourists) and a collapse of Japanese inflows into the US: treasuries simply do not provide enough duration compensation any more. To conclude, embrace dollar weakness, it has more to run.
First ‘PJ Masks’ toys for season 2 of popular kid’s show revealed at New York Toy Fair.
She was shot in the back with a grenade launcher at Standing Rock. She’s walked the runways at New York’s Fashion Week, and she ran for Congress in Northern California, when she was only 24 years old.
And for the last five months, Erin Schrode, 26, has been in charge of feeding Puerto Rico.
WASHINGTON (Reuters) – A Russian propaganda arm oversaw a criminal and espionage conspiracy to tamper in the 2016 U.S. presidential campaign to support Donald Trump and disparage Hillary Clinton, said an indictment released on Friday that revealed more details than previously known about Moscow’s purported effort to interfere.