Trump’s Controversy Could Unleash Uncertainties of Epic Proportions on the Global Economy

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President Donald Trump’s words, actions, and inactions can move the market – the Trump effect already moves stocks, commodities, forex, and the general economy. The Trump effect is understandable based on the fact that Trump wields huge power as the President of the United States. However, the Trump effect is being amplified in the socio-political, economic, and financial landscapes because Trump seems to thrive on controversy.

In the buildup to the 2016 elections, Trump was a constant feature in news headlines for the most controversial statements. During the campaigns, Trump made some ‘unconventional’ promises that the mass media, his critics, and political elites often dismissed as the ramblings of someone that doesn’t understand the workings of government. However, since taking the Oath of Office on January 20, Trump has set in motion the mechanisms to actualize many of his campaign promises.

Now, economists are scared that Trump could usher in a wave of uncertainty of epic proportions in the global economic and geopolitical landscapes. This post provides insights into some of the reasons economist are worried about how the global economy might fare under Trump.

Economists at Fitch Ratings are worried about what the future holds

Economists at the international rating agency, Fitch Ratings have submitted that Trump posses significant risks to the global economy going forward. Fitch is one of the three main rating firms that provide insights into the creditworthiness of countries, states, and firms that issue debt.

The economists note that the Trump administration is pushing unconventional and borderline controversial foreign and economic policies. They observed that “US policy predictability has diminished, with established international communication channels and relationship norms being set aside and raising the prospect of sudden, unanticipated changes in US policies with potential global implications. ” The sudden change and unpredictability in U.S. foreign policy in turn makes it harder for other countries to know what to expect in terms of trade with the U.S. going forward.

More so, the analysts noted that Trumps vocal stance on renegotiating trade deals could cause massive ripples through the global forex markets. In their words, the air of uncertainty in global trade could lead cause “disruptive changes to trade relations, diminished international capital flows, limits on migration that affect remittances and confrontational exchanges between policymakers that contribute to heightened or prolonged currency and other financial market volatility.”

Goldman Sachs is worried that Trump a trigger a war with China

Economists at Goldman Sachs are also worried about what the implications of Trump’s economic policies on the global economic landscape. The analysts are especially worried that some policies of the Trump administration could trigger a trade war with China. To start with, Trump has accused China of unfair forex practices as well as ‘theft’ of American jobs. In addition, Trump’s trade adviser, Peter Navarro has asked for a 45% tariff on goods made in China.

The analysts specifically observed that the presidency “is likely to make an announcement on China’s currency policy and impose unilateral tariffs on a number of products.” The analysts also observed that “China would definitely retaliate and would likely go above and beyond the US measures, potentially imposing tariffs as high as 80, 90% on imports from the US.”

Conclusion

Economists however believe that Trump administration will eventually find middle ground and drop some of its most polarizing foreign policies. Victor Alagbe, an analyst at 24option submits that “the air of uncertainty trailing Trump’s administration won’t continue indefinitely  because the U.S. government will eventually embrace a consistent business- and trade-friendly framework that combines the best of existing foreign policies with new ideas from a career businessman.” 

Nonetheless, the global economists could also enjoy some positives from the policy stance of Trump’s administration. For instance, Trump’s plan to boost spending on infrastructure could boost the construction sector and boost the ease of doing business in the U.S. More so, his plan to push major tax cuts and tax reforms as well as reducing regulatory requirement on banks could also boost the economic prospects of the world.

Vía Max Keiser http://ift.tt/2lgib43

VACCINES: BIG PHARMA CAN’T IGNORE YALE…

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President Trump, as readers of this website know, has appointed Robert F. Kennedy Jr to chair a panel on vaccine safety, and as readers…

The post VACCINES: BIG PHARMA CAN’T IGNORE YALE… appeared first on Giza Death Star.

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French Voters Call On Obama To Run For President To “Give French People Hope”

As French voters look set to make a massive swing to the right in their upcoming presidential election (see our notes on the topic here and here), a group of frightened liberal protesters have decided to back a relatively surprising, if impossible, presidential candidate in 2017, Barack Obama. 

And, lest you thing this is a joke, a quick walk around Paris even reveals campaign posters for “Obama17” plastered all around the city.

Obama17

 

The group of protesters who launched the effort to bring “hope and change” to France are urging French citizens to visit their website to sign a petition to convince Obama to enter the race.  They figure that 1 million signatures should do the trick.

Meanwhile, asked why they support Obama, protesters told ABC News they’re looking for a candidate they “really admire” and “someone who could lead us to project ourselves in a bright future to give French people hope.”

Why Obama? “Because he has the best resume in the world for the job,” reads the website, which is in no way connected to Obama.

 

“At a time when France is about to vote massively for the extreme right, we can still give a lesson of democracy to the planet by electing a French President, a foreigner,” reads the website in French.

 

A spokesperson for the group told ABC News Thursday morning, “We started dreaming about this idea two months before the end of Obama’s presidency. We dreamed about this possibility to vote for someone we really admire, someone who could lead us to project ourselves in a bright future. Then, we thought, whether it’s possible or not, whether or not he is French, we have to do this for real, to give French people hope … Vive la République, Vive Obama, Vive la France and the U.S.A.”

And while we have our doubts about the likelihood of this plan working out, might we suggest that Hillary Clinton would make a great candidate for a senior cabinet position in Obama’s new administration.

Obama17

 

Of course, while it’s a genius plan, if we understand it correctly, there is just one minor problem…the French president needs to be, well, French.


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How Does A Stock Market Operate In War? Syria – A Case Study

Submitted by Saxo Group's Jack Davies, via TradingFloor.com,

  • Last year was the Damascus Securities Exchange's busiest on record
  • The majority of shares traded on the exchange are in foreign-owned banks
  • Those banks are grossly overvalued by "financial engineering"
  • Increased activity could suggest improved confidence in the Syrian economy
  • But it could also suggest Syrian investors' lack of alternatives

tank

Forces loyal to the Assad regime have made considerable gains in recent months. On the surface this appears to be reflected on the Syrian stock exchange – but all is not as it seems.

Despite enduring more than half a decade of conflict leaving an estimated 400,000 dead and 11.4 million displaced, Syria retains an active stock market.

Established as part of a programme of economic reforms, the Damascus Securities Exchange opened its doors in 2009, two years before the onset of the crisis.

Not only does the market continue to function despite the conflict, if data published daily on the exchange’s website is to be believed, last year was its most active on record in terms of volume of trades and 2017 looks set to be busier still.

volume

Source: Damascus Securities Exchange (2017 data only reflects the first month and half of trading, of course.)

While under ordinary circumstances, such data might be interpreted as suggesting renewed confidence in the economy; the circumstances in Syria are far from ordinary and analysts say activity on the exchange are largely the product of a fiction.

“Measured in the number of shares traded, the volume may be up but their value is down significantly, even when denoted in Syrian pounds,” Dr Reinoud Leenders of Lebanon and Syria Research Group tells TradingFloor by email. “Market capitalisation may seem to be on the rise but this hardly reflects real economic terms due to very high inflation and the steep fall in the exchange value of the Syrian pound.”

The Syrian pound has fallen dramatically since the start of the conflict. In 2010, you would have needed just shy of £50 to buy $1; today you would need more than £500 to get your hands on $1.

Subdued activity

Additionally, Leenders points out, there are only about half a dozen stocks that are actively traded on the exchange. Almost all of them are subsidiaries of foreign banks.

Rashad al-Kattan is a graduate of Damascus University. Now based in the UK, he works as a risk analyst and holds a fellowship at St Andrews University’s Centre for Syrian Study. Having previously worked for Lebanese-owned banks in Syria, the bulk of his academic research focuses on his homeland’s banking sector and stock exchange.

“If you look at the indices, banks are the most traded,” says al-Kattan. “I would be surprised if those investors are actually doing any due diligence because the banks – and this was acknowledged by the exchange’s general manager – although they appear profitable, they are engaged in financial engineering.”

Al-Kattan recounts how his former colleagues who were once employed by the corporate services department of their banks are now in the loan recovery department, which he says reflects the reality that – for the time being, at least – profit generation has all but ceased within the banks and in its place is loss reduction.

While attempting to identify their few remaining borrowers able to repay their loans is one way of attempting to reduce their losses, al-Kattan says a more efficient and insidious technique is also being employed.

“[The banks’] equity is paid in US dollars. What they’ve been doing each year is recognising those dollars in Syrian pounds, and because the pound is depreciating it seems their profits are going up,” says al-Kattan. “Of course, in order to do that you have to engage in a transaction; but the Central Bank has been very lenient with that because they don’t want to make the banks look loss making and generate panic.”

The banks in question are, of course, obliged to submit quarterly reports and statements, which contain these fictional profits.

“Their statements are endorsed by international auditing firms. They’re not saying anything because they know how the game is played. Looking at those banks, as an investor, I would not think they’re a good investment.”

But if the valuation of the banks is so inflated, why would anyone bother to invest in them? One answer, according to Kings College’s Dr Leenders is that both bankers and investors haven’t got anywhere else to go.

“Both are glued to the regime’s survival and/or are curtailed in their decisions by international sanctions,” he says in emailed remarks. “In this context, putting their money in either real estate or banks seems a sensible strategy, exactly because the rest of the economy fails (for now) to provide alternatives.”

Room for optimism

And while both Leenders and al-Kattan agree that the Syrian economy is in tatters, there are some causes for optimism for those who have bet their money on it recovering.

The rebound in trading on the Damascus Securities Exchange does coincide with the arrival of a large amount of Russian air and ground forces in Syria, and the re-capture of Aleppo by regime-aligned forces in December coincided with a massive uptick in trades on the exchange in the last quarter of 2016.

2016

Source: Damascus Securities Exchange.

“But assuming that the banks are indeed banking on a regime victory (and henceforth in this context hoping for a likely influx of aid and remittances for recovery), this doesn’t mean the conflict is expected to come to an end,” says Leenders. “I guess from a banker’s perspective all that matters is that the regime captures and consolidates control in key economic areas; the rest of the country could still be under rebel control.”

Although hopes of an uptick in aid might be not be realised as soon as those banks would hope. The Syrian minister of economy announced recently that any reconstruction contracts awarded to foreign companies would be contingent upon apologies from Europe and the US for their role in the conflict, the Syria Report said this week.

Another indication that perhaps things may be on the verge of looking up for Syrian investors is that the construction of a 701 megawatt power station south of Damascus by Athens-headquartered international engineering firm Metka is reportedly nearing completion.

On Wednesday, Syriatel – one of the country's two mobile phone service providers, headed by the president Bashar al-Assad's maternal cousin Rami Makhlouf – signed an agreement with the exchange to list its shares publicly.

Al-Kattan, too, does not believe the economic situation is going to get any worse: “Generally speaking, I don’t think the Syrian pound will suffer more. I think in the next few months it will improve and might even go back to 400 [per dollar] with foreign cash injections,” he says.

But in terms of the stock exchange’s viability, he is not so optimistic. With 90% of the population dependent on foreign or government aid for survival and less than a fifth of the population even holding bank accounts, the exchange will continue to find itself with a limited base of investors, he says.

“How will it develop? Not a lot better than what we’ve seen before,” he says. “In terms of raising capital, we’re still a long way from that.”

Al-Kattan says that one of the reasons he chose to focus his research on the Syrian economy and in particular its banking sector is that “everyone is obsessed with ISIL and military balance of power and no one is focused on the economy.”

“I think this is important. While we’re talking about dealing with the regime, people believe the banks they dealt with before the conflict are the same, but I would argue they present very substantial risks.”

Representatives of the Damascus Securities Exchange acknowledged but did not respond to multiple requests for comment.

h

Syria's stock exchange is far from being built on solid foundations.


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Could Rising Interest Rates Be Good for U.S. Treasury ETFs?

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A rising interest rate environment could be difficult for some bond investors. Assuming everything else remains stagnant, when interest rates rise, bond prices tend to fall, and the opposite is true. Consequently, a bond exchange-traded fund (ETF) or bond portfolios could experience volatility when interest rates are moving. On February 14, 2017, U.S. Treasury ETFs, such as the iShares 20+ Year Treasury Bond ETF (TLT) fell due to Federal Reserve Chair Janet Yellen’s comments in her speech, indicating that the Federal Open Market Committee (FOMC) was open to interest rate hikes.

According to Fed Chair Yellen, “At our upcoming meetings, the Committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations, in which case a further adjustment of the federal funds rate would likely be appropriate.”

According to the CME Group FedWatch Tool, Yellen pushed up the probability of a Fed rate hike. Based on the CME Group 30-Day Fed Fund futures prices, the current probability of a 25 BPs rise in the FOMC meeting in March jumped to 26.6%, from 17.7%.

rise in the FOMC

Trader Jason Bond said, “Although there is an increased probability of the Fed raising interest rates in its March meeting, the probability of a rate hike is still relatively low. Despite U.S. Treasury securities and U.S. Treasury yields having an inverse relationship, U.S. Treasury ETFs could rise over the long term if interest rates rise. It may sound counterintuitive, but fund managers are able to reinvest the cash flows received at a higher interest rate, which would increase income.”

Federal Reserve Could Raise Rates in March

Yellen stated, “Waiting too long to remove accommodation would be unwise,” when speaking to the Senate Banking Committee on February 14, 2017. The increasing economic growth and the market’s expectations of a potential increase in inflation has caused the Fed to leave the possibility of a rate hike on the table at its next meeting.

Now, in January 2017, U.S. Consumer Price Index was released, and U.S. consumer prices rose in December 2016, which was the largest YoY rise in two-and-a-half years. Moreover, on February 15, 2017, the U.S. Consumer Price Index increase by 0.6% in January, the largest increase in close to four years. This signaled that inflation pressures may be building.

Rate Hike Could Be Good For Treasury Funds

With strong economic data, and data suggesting inflation could be picking up, the Fed will not be able to ignore the strength in the U.S. economy and inflationary pressures. The Fed has an inflation target of 2%, and the current inflation rate is at 1.7%. If the Fed is proactive, it would not wait too long to raise rates, as Yellen stated in her speech.

That being said, some traders still believe that bond and U.S. Treasury funds could still rise over the long term, despite the potential rise in interest rates.

According to Director of Income Planning at the Schwab Center for Financial Research, “… a fund manager can react to rising rates by buying and selling bonds to try to maximize coupon income. For instance, a manager may sell lower-coupon bonds and use the proceeds to buy bonds with higher coupons, or may reinvest the income payments from individual bonds in higher-yielding bonds. Over time, that can actually boost the income you earn from a bond fund, meaning you can potentially recover from losses through increased returns.”

The Bottom Line

Federal Reserve Chair Yellen made some hawkish comments in her speech, on February 14, 2017, and it sent U.S. Treasury yields higher, and in turn, U.S. Treasury securities and Treasury ETFs fell. However, rate hikes could actually be good for Treasury funds because fund managers would be able to reinvest cash flows in bonds with higher yields.

Vía Max Keiser http://ift.tt/2kTa8Oo

In The Police-State-Versus-Freedom Arms Race, Freedom Seems To Be Winning

Submitted by John Rubino via DollarCollapse.com,

In the past 48 hours, two stories broke that illustrate how dominant technology has become in the age-old war between freedom and control:

Malware Lets a Drone Steal Data by Watching a Computer’s Blinking LED

(Wired) – A group of researchers at Ben-Gurion’s cybersecurity lab has devised a method to defeat the security protection known as an “air gap,” the safeguard of separating highly sensitive computer systems from the internet to quarantine them from hackers. If an attacker can plant malware on one of those systems—say, by paying an insider to infect it via USB or SD card—this approach offers a new way to rapidly pull secrets out of that isolated machine. Every blink of its hard drive LED indicator can spill sensitive information to any spy with a line of sight to the target computer, whether from a drone outside the window or a telescopic lens from the next roof over.

————-

Conservative provocateur targets CNN with secret recordings

(CNN) – Conservative provocateur James O’Keefe is setting his sights on CNN.

 

O’Keefe said in a telephone interview with CNN on Wednesday that he has “a few hundred hours” of “secretly recorded material” from inside the network. “We’re calling it CNN Leaks,” he said, drawing inspiration from WikiLeaks’ document dumps.

 

He said “part one” would be published Thursday at about 10 a.m. ET. “This is all legally recorded information,” he said, declining to be more specific.

The first article illustrates the extraordinary – and increasing — power that cutting-edge tech offers governments to watch and otherwise control their citizens. Combine the above relatively-narrow-gauge application with the NSA’s existing ability to monitor pretty much every electronic signal, facial recognition software that can pick individuals out of crowds, algorithms that lip read, and tiny drones that can see without being seen, and the potential result is a police state that’s slicker, subtler and therefore scarier than anything envisioned in dystopian novels like Brave New World or 1984.

But the second story is the counterweight, illustrating how those same technologies are being used around the world to expose the secrets of the powerful. Where Daniel Ellsberg once had to spend months photocopying the Pentagon Papers and physically sneaking them out of his Defense Department office, today all that’s required for a major leak is one disillusioned or otherwise motivated insider with a thumb drive, laptop or smart phone.

In just the past few years, Sony’s emails were hacked and released, to the profound embarrassment of Hollywood; US military misbehavior was exposed by a lowly private named Bradley Manning; the Democrat National Committee’s emails – which exposed collusion between political operatives and mainstream media, among many other things — were published just in time to cost that party the presidency; and of course the great Edward Snowden, an outside contractor for the NSA, exposed the breathtaking illegality of US spying here and abroad.

Every big organization now lives with the knowledge that it’s one leak away from existential crisis — and that there is no fix. Doing big, bad things requires a lot of people with the ability to access and understand what you’re doing. And it only takes one of them with widely-available technology to expose you to the whole world.

With all the issues now dividing people – abortion, Israel, immigration, etc., etc. – this might be the most telling. Do you see Snowden and WikiLeaks’ Julian Assange as traitors or heroes? Because the worlds in which they end up one or the other couldn’t be more different.


via Read More Here..

In The Police-State-Versus-Freedom Arms Race, Freedom Seems To Be Winning

Submitted by John Rubino via DollarCollapse.com,

In the past 48 hours, two stories broke that illustrate how dominant technology has become in the age-old war between freedom and control:

Malware Lets a Drone Steal Data by Watching a Computer’s Blinking LED

(Wired) – A group of researchers at Ben-Gurion’s cybersecurity lab has devised a method to defeat the security protection known as an “air gap,” the safeguard of separating highly sensitive computer systems from the internet to quarantine them from hackers. If an attacker can plant malware on one of those systems—say, by paying an insider to infect it via USB or SD card—this approach offers a new way to rapidly pull secrets out of that isolated machine. Every blink of its hard drive LED indicator can spill sensitive information to any spy with a line of sight to the target computer, whether from a drone outside the window or a telescopic lens from the next roof over.

————-

Conservative provocateur targets CNN with secret recordings

(CNN) – Conservative provocateur James O’Keefe is setting his sights on CNN.

 

O’Keefe said in a telephone interview with CNN on Wednesday that he has “a few hundred hours” of “secretly recorded material” from inside the network. “We’re calling it CNN Leaks,” he said, drawing inspiration from WikiLeaks’ document dumps.

 

He said “part one” would be published Thursday at about 10 a.m. ET. “This is all legally recorded information,” he said, declining to be more specific.

The first article illustrates the extraordinary – and increasing — power that cutting-edge tech offers governments to watch and otherwise control their citizens. Combine the above relatively-narrow-gauge application with the NSA’s existing ability to monitor pretty much every electronic signal, facial recognition software that can pick individuals out of crowds, algorithms that lip read, and tiny drones that can see without being seen, and the potential result is a police state that’s slicker, subtler and therefore scarier than anything envisioned in dystopian novels like Brave New World or 1984.

But the second story is the counterweight, illustrating how those same technologies are being used around the world to expose the secrets of the powerful. Where Daniel Ellsberg once had to spend months photocopying the Pentagon Papers and physically sneaking them out of his Defense Department office, today all that’s required for a major leak is one disillusioned or otherwise motivated insider with a thumb drive, laptop or smart phone.

In just the past few years, Sony’s emails were hacked and released, to the profound embarrassment of Hollywood; US military misbehavior was exposed by a lowly private named Bradley Manning; the Democrat National Committee’s emails – which exposed collusion between political operatives and mainstream media, among many other things — were published just in time to cost that party the presidency; and of course the great Edward Snowden, an outside contractor for the NSA, exposed the breathtaking illegality of US spying here and abroad.

Every big organization now lives with the knowledge that it’s one leak away from existential crisis — and that there is no fix. Doing big, bad things requires a lot of people with the ability to access and understand what you’re doing. And it only takes one of them with widely-available technology to expose you to the whole world.

With all the issues now dividing people – abortion, Israel, immigration, etc., etc. – this might be the most telling. Do you see Snowden and WikiLeaks’ Julian Assange as traitors or heroes? Because the worlds in which they end up one or the other couldn’t be more different.


via Read More Here..

Iraqi War Report: ISIS Combat Drones in Battle for Mosul

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Global Research Editor’s Note:
The ISIS is an instrument of US intelligence. it is not an autonomous force.
The Combat UAV drones analyzed in this report were supplied to the ISIS by the Western military alliance and its Gulf partners.…

Vía Global Research http://ift.tt/2me4QNy

GFP Newsletter – 2/23/2017

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I can only show you the way to find your own answer. Truth liberates, but it has to be your own.

Otherwise, if it is somebody else’s, truth binds. Jesus Christ’s truth, Mohammed’s truth, Buddha’s truth, have all become prisons. I don’t want my truth to become a prison for anybody.

I want my truth to be an inspiration.

I want my truth to trigger something in you which is yours.

My truth simply gives you an assurance that a human being, just like you, can attain to truth.

That will give you immense respect towards yourself. You will not feel unworthy sinners, that somebody has to come to save you – some Christ, some Buddha has to come, and then you will be saved. You don’t have to wait for anybody to save you. You are born saved, just a little insight …. If my presence can do that, then my work is finished.

I don’t want to become a prison around you.

I want to become a freedom around you, an open sky around you, not a golden cage – so that you can open your wings and feel the joy of flying higher and higher towards the stars.

Rajneesh

 

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Vía The Galactic Free Press http://ift.tt/2lyaGrv