Trump Lashes Out At Macron, Trudeau Ahead Of “G6+1” Summit

Tomorrow’s G7, or rather G6+1 meeting, is shaping up to be one for the ages.

As we reported previously, chancellor Merkel already was setting the ground for the Toronto showdown among the world’s top political leaders, vowing to challenge Donald Trump on virtually every issue, from trade to climate, and warning that the lack of room for compromise means leaders may fail to agree on a final statement, an unprecedented event at a summit of the world’s 7 most advanced nations.

Then, earlier today, in comments made alongside Canada PM Justin Trudeau in Ottawa, French President Emmanuel Macron said that no head of state is “eternal” and that he stands ready to work with the six other Group of Seven members if U.S. wants to stand alone.

You say President Trump doesn’t care. Maybe. But none of us are eternal and our countries, the commitments taken, go beyond us. None of us who have been elected by the people can say ‘all prior commitments disappear.’ It’s just not true, there is a continuity in state affairs at the heart of international laws. Sometimes we’ve inherited some commitments that weren’t core to our beliefs, but we stuck to them, because that is how it works for nations. And that will be the case for the United States – like for every great democracy”, Macron said quoted by Bloomberg.

The common theme: the rest of the world is desperate to show just how united it is again Trump, perhaps in hopes of subduing him and quashing his opposition.

Good luck with that.

Shortly after the constant barrage of anti-Trump rhetoric out of the G6, Trump on Thursday was quick to take even more jabs at Canada and France on the eve of the G-7 summit.

In a tweet, Trump accused the U.S. allies of levying “massive tariffs” and creating “non-monetary barriers.”

Trump’s comment was in response to French President Emmanuel Macron’s tweet in which he echoed Merkel’s threat to exclude U.S. from a joint statement issued every year at the G-7 summit.

“The American President may not mind being isolated, but neither do we mind signing a 6 country agreement if need be. Because these 6 countries represent values, they represent an economic market which has the weight of history behind it and which is now a true international force,” Macron tweeted.

Later on Thursday, Trump attacked Trudeau over Canada’s dairy industry, claiming that Canada is “killing” U.S. agriculture.

As CNBC notes, Canada bought 31% of U.S. milk exports and 5.3% of its cheese exports in 2016, according to data from MIT’s Observatory of Economic Complexity.

Trump then pivoted back the EU, asking its progressive, liberal leaders “Why isn’t the European Union and Canada informing the public that for years they have used massive Trade Tariffs and non-monetary Trade Barriers against the U.S. Totally unfair to our farmers, workers & companies. Take down your tariffs & barriers or we will more than match you!”

Tensions between the U.S. and many of its allies were already high after the Trump administration decided late last month to impose tariffs on imports from Canada, Mexico and the European Union, citing national security concerns. Trudeau responded that it’s offensive for the Trump administration to claim that Canada poses a security threat to the United States, given the “the thousands of Canadians who have fought and died alongside their American brothers in arms.”

Later it emerged that in a phone conversation, Trump blamed Canada for burning down the White House in 1812, an escalation which Larry Kudlow said was nothing more than a “family quarrel.”

Over the weekend, in the G7 meeting for finance ministers, the world’s top economic leaders asked Treasury Secretary Steven Mnuchin to relay their “unanimous concern and disappointment” over the tariffs on steel and aluminum imports.

It appears the relaying had no impact, and what’s more there is no desire on either side to spend more time in Toronto than is absolutely required. According to Bloomberg’s Jennifer Epstein, Trump is getting to the G-7 summit late (11:15 tomorrow morning, while other leaders are already in Charlevoix) and leaving early (roughly 23 hours after his arrival, ahead of an afternoon of meetings).

Commenting on what to expect tomorrow, Eurasia’s Ian Bremmer said “the meeting this week will be by far the most dysfunctional G-7. The old order is over. What we are fighting over now, as the new order emerges, is whether the U.S. wants to have the most important seat at the table or not. Right now the answer is no.”

Perhaps: for the full answer tune in tomorrow for what promises to be the most exciting G6+1 meeting ever.

How To Reduce Your Risk Of Death By Gun Violence

Authored by Jim Cox via The Foundation for Economic Education,

Do you want to reduce your risk of death by gun violence?

If so, consider these 10 common sense ways to do so. These are things one can implement fully and immediately with no permission or agreement from anyone else but are entirely in the control of any individual.

Marching to persuade politicians is a very indirect way of reducing anyone’s risk from gun violence. And considering their track record on so many issues, politicians may end up putting us all at further risk when all is said and done.

  1. Don’t commit suicide. This is the most common gun-related death, being about 63% of all firearm deaths in the US.

  2. Adopt a policy of not escalating any road rage situations. If someone does something offensive on the highways have it pre-settled in your mind to react by de-escalating the situation (refrain from responding in kind) and back off to allow the heat of the moment to cool.

  3. Do not join a gang. Violence is the accepted norm among gang members, resulting in many becoming victims of gun violence.

  4. Do not buy or sell illegal drugs. Yes, I do know that it’s the drug laws more than the drugs themselves that leads to gun violence among drug buyers and sellers. But, people already on the wrong side of the law are more likely to commit gun violence than the law-abiding population.

  5. Do not get involved with abusive people. Someone who previously has physically abused a partner is more likely to do so than are those who have never engaged in such abuse.

  6. Implement a personal curfew. The safest place anyone can be at 2am is at home in bed. Roaming the streets in the middle of the night exposes one to gangs, drug sellers, and other dangerous people.

  7. Stay away from Gun-Free Zones. One study showed that 98% of all mass shootings happen in these places. Gun Free Zone signs tell violent people this is a spot where the picking will be easy. As for everywhere else, these predators may be deterred since they have to wonder if there’s already a good guy with a gun on the property.

  8. Do not associate with convicted criminals. Like the abuser, violent criminals out of prison are likely to continue their habits.

  9. Be aware of your surroundings. Make it a habit to look around and assess any situation you are in. Most victims of gun violence have no warning of the impending danger, the old saying “to be forewarned is to be forearmed” is pertinent here. So, no staring at your cell phone!

  10. Avoid people who handle guns in an irresponsible manner. Anyone who casually or even unknowingly points a gun at someone or who does not exercise good gun safety such as carefully checking to see that a gun is unloaded is someone to be avoided.

  11. Bonus Suggestion: Do not be a predator. A significant number (about 700 each year) of gun deaths are justifiable homicide wherein a victim successfully defends themselves from criminal assault.

Thankfully, the odds of anyone in the U.S. dying from gun violence each year is exceedingly low. Implementing the suggestions here will reduce those odds even further.

George Soros Wastes Millions Backing Losing Candidates In California DA Races

George Soros-backed candidates for district attorney in Sacramento, San Diego and Alameda counties lost to their conservative opponents in midterm elections on Tuesday, handing the “Open Society” billionaire a handful of embarrassing defeats in the most progressive state in the US.

Soros and several other like-minded donors – the American Civil Liberties Union, for example – poured millions into four DA races across California in hopes of electing reform-minded DAs. Instead, the judges running against Soros’s candidates won by comfortable margins.

Soros

Conservative Sacramento incumbent Anne Marie Schubert won with 64% of the vote.

Incumbent Republican Summer Stephan received 64% of the vote in San Diego.

And Alameda County incumbent District Attorney Nancy O’Malley also won her race with 60% of the vote.

In each case, Soros’s team had thought the incumbents were vulnerable to a challenge given the supposed anti-Republican backlash caused by Trump.

Another Soros-backed candidate, Contra Costa County District Attorney Diana Becton, won, but may face a runoff in the November general election if she fails to win more than 50% of the votes in a recount that is ongoing, according to the Daily Caller

Since 2014, Soros has spent more than $2.7 million in DA races in California alone, helping more liberal candidates catch up with their conservative counterparts. And since 2014, he has spent some $16 million in 17 races in other states, with his candidates winning 13 of them.

The losses in this cycle were so bracing, that Michael Smolens, a columnist with the San Diego Tribune, questioned whether “these are mere speed bumps or is the political pendulum swinging against Soros and his progressive coalition?”

Argentina Bailed Out With Biggest Ever Loan In IMF History

Just a few weeks after Argentina became ground zero for the coming Emerging Market crisis, when its currency suddenly collapsed at the end of April amid soaring inflation, exploding capital outflows and a central bank that was far behind the curve (as in “13% of rate hikes in a week” behind)…

… the IMF has officially bailed out the country – again – this time with a $50 billion, 36-month stand-by loan, and coming in about $10 billion more than rumored earlier in the week, it was the largest ever bailout loan in IMF history, meant to help restore investor confidence in a nation that, between its soaring external debt and current account deficit, prompted JPMorgan to suggest that along with Turkey, Argentina is in effect, doomed.

As the JPM chart below shows, the country’s total budget deficit, which includes interest payments on debt, was 6.5% of GDP last year, much of reflecting a debt binge of about $100 billion over the last two and a half years. The primary fiscal deficit in 2017 was 3.9%.

The loan will have a minimum interest rate of 1.96% rising as high as 4.96%.

“We are convinced that we’re on the right path, that we’ve avoided a crisis,” Finance Minister Nicolás Dujovne said at a press conference in Buenos Aires. “This is aimed at building a normal economy.”

Dujovne said that about $15 billion from the credit line would be immediately available to Argentina after the package is approved by the IMF’s board, which is expected on June 20. The rest would be dispersed as needed as Argentina meets its targets.

Shortly after the news the loan was finalized, Dujovne made some additional, more bizarre comments, saying that “the amount we received is 11 times Argentina’s quota, which reflects the international community´s support of Argentina,” almost as if he was proud at just how insolvent his country “suddenly” become. He was certainly delighted that, in his view, Argentina is now “too big to fail”, and received not only this loan as a result…

“It’s very good news that the integration with the world allows us to receive this support.”

… but also hinted that the international community would also foot the bill for all other upcoming Argentinian bailouts. And if the country’s history is any indication, there will be plenty more, as well as the occasional military coup for good measure.

According to Bloomberg, Argentina will see 30% of the funds a day or two after the Fund’s June 20 board meeting, and in typical IMF-bailout fashion, a form of austerity will be imposed on what was once Latin America’s richest nation: as part of the agreement, the country will now target a fiscal deficit of 1.3% of GDP in 2019 and 2.7% this year, with a fiscal balance targeted for 2020 (good luck). And since the previous targets of 2.2% and 3.2%, were almost as laughable, this latest IMFian austerity package not only has zero chance of ever being achieved, but if Greece is any indication, it will make the Argentina crisis far worse. The government has also set a new inflation target of 17% in 2019 – It’s considered low – declining to 13% in 2020 and 9% in 2021.

And the biggest joke, as part of the program, Argentina will agree to accelerate the pace at which it reduces the government deficit. The nation spends more than it collects in revenue and imports more than it exports, creating fiscal and current-account shortfalls that leave Argentina vulnerable to fluctuations in its currency. But, thanks to the even more idiotic policies of central banks, Argentina managed to sell a 100 year bond last year, demonstrating just how stupid some managers of “other people’s money” really are.

“This is a plan owned and designed by the Argentine government, one aimed at strengthening the economy for the benefit of all Argentines,” IMF Managing Director Christine Lagarde says in the statement which can be found on the IMF’s website.

To take effect, the deal reached between the IMF’s staff and Argentine authorities still requires the approval of the IMF’s executive board.

Oh, and thank you American taxpayers: the IMF’s largest shareholder, the U.S., said in a statement Thursday from Treasury Secretary Steven Mnuchin that it supported the program, according to the WSJ.

“The size of the package should provide relief, but implementing the program entails significant challenges and will require skillful political leadership,” said Martin Castellano, the head of Latin America research at the Institute of International Finance.

Argentina was bailed out by the IMF for the second time in 2 decades after three rate hikes pushed borrowing costs above 40% but failed to halt a plunge in the currency. The peso fell 25% against the dollar this year to trade at 24.9850 on Thursday, while capital outflows soared.

Central Bank President, Federico Sturzenegger, said the bank will continue to intervene in currency markets in times of “disruptive movement” although the central bank will not target inflation this year, he said. Meanwhile, the government has agreed to send a bill that gives the central bank more autonomy, and as a result it wil no longer transfer funds to the Treasury. 

“We’re convinced that we’re on the right track, that we managed to avoid a crisis, gather support for the program we already had and that has been in place since Dec. 2015, which looks to build a normal economy, reduce poverty and protect the vulnerable,” Dujovne said, echoing what Greece said after its first bailout 8 years… and its second… and its third.

Gerry Rice, an IMF spokesman, speaking Thursday before the details of the bailout were announced, told reporters that the IMF is “not seeing negative spillovers to other countries at this point.”

Well, he may want to take a look at Brazil.

* * *

As for what happened the last time the IMF bailed out Argentina in the early 2000, the following 2004 article from the Telegraph tells you all you need to know why when a nation is desperately in need of deleveraging, giving it another $50 billion in debt is generally a bad idea.

IMF admits mistakes in Argentina crisis

By Edmund Conway12:01AM BST 30 Jul 2004

The International Monetary Fund yesterday admitted that its mistakes helped plunge Argentina deeper into the red during the currency crisis that crippled the country’s economy three years ago.

In a report published yesterday by its independent evaluation office, the IMF said it ought to have prevented the Argentine government from following poor economic policies.

“IMF surveillance failed to highlight the growing vulnerabilities in the authorities’ choice of policies and the IMF erred by supporting inadequate policies too long,” it said.

The financial meltdown that reached a climax in 2001, causing the country to default on $132 billion of foreign debt, was worsened by the government’s vain attempts to maintain the Argentine peso’s peg against the dollar. The IMF ploughed money into the country to help it sustain the peg, pledging an extra $22 billion as late as the end of 2000.

“In retrospect, the resources used in an attempt to preserve the peg could have been better used to mitigate some of the inevitable costs of exit,” the report said.

Although it became clear to some IMF staff that the country’s currency plan was flawed in the 1990s, they did not report their doubts to their board for fear of triggering a speculative attack on the peso. The executive board, for its part, ignored staff complaints that Argentina was not reforming its economy satisfactorily.

Both the IMF and the US touted the country as Latin America’s economic success story but the fund maintained its support despite the fact that Argentina missed its fiscal targets every year since 1994. Analysts have also claimed that the IMF’s demands that Argentina raise taxes in 2002 worsened the crisis. The conclusions will come as a blow to the institution, whose role has come under increased scrutiny in recent years.

Yesterday the Argentine finance minister, Roberto Lavagna, argued that the country should not be pressed too hard for repayments of its current three-year $13 billion loan. He said the IMF was now insisting it reformed its economy “in a way absent throughout the 90s” and “under a schedule that is oblivious to the political realities of the country”.

Good luck, and some advice to Argentina: this time try to prevent Elliott Management from buying up your debt at distressed prices.