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Loonie Tumbles As Canadian Retail Sales Crashed In December

But, but, but… it was Christmas!!

Canadian retail sales have come out and they are shockingly low – even after bad weather and higher rates on big ticket items had kept surveys particularly low for December.

The headline print was -0.8% MoM (expectations were for no change)

Worse still, sales ex autos plunged 1.8% MoM (against expectations of a 0.3% gain) – the biggest drop since Jan 2015…

As Citi notes, these numbers, while often volatile, were not expected to be a big mover, but the extent of the miss has triggered some activity in USDCAD, which has jumped up to 1.2736 already and may have more to run.

Loonie is at its weakest vs the dollar since 12/21…

ECB Minutes Reveal Fears About Currency Wars, Euro Slides

There were two distinct reactions in the Euro to today’s ECB Minutes, released this morning.

At first, the EUR jumped following initial headlines that the ECB acknowledged that revisiting the guidance would be “part of a the regular reassessment” going forward, but noting that any changes are premature at this stage.

 In this context, it was remarked that communication on monetary policy would continue to develop according to the evolving state of the economy in line with the ECB’s forward guidance, with a view to avoiding abrupt or disorderly adjustments at a later stage. However, changes in communication were generally seen to be premature at this juncture, as inflation developments remained subdued despite the robust pace of economic expansion.

* * *

The language pertaining to the monetary policy stance could be revisited early this year as part of the regular reassessment at the forthcoming monetary policy meetings. In this context, some members expressed a preference for dropping the easing bias regarding the APP from the Governing Council’s communication as a tangible reflection of reinforced confidence in a sustained adjustment of the path of inflation. However, it was concluded that such an adjustment was premature and not yet justified by the stronger confidence.

Predictably, this hawkish take prompted a kneejerk move higher in the EUR as algos bought the EUR.

However, what traders focused on next was a rather explicit ECB concern over the weakness of the dollar, as the statement once again highlighted fears that the US administration was deliberately trying to engage in currency wars, something which Mario Draghi famously remarked on during the Q&A in the last ECB press conference, when asked for his response to Mnuchin’s statement.

…click on the above link to read the rest of the article…

Risking Major Escalation, Trump Weighs Killing Of Russian Fighters In Syria As Sign Of “Tough Stance” Toward Putin

In the aftermath of Robert Mueller’s indictment against 13 Russian “operatives” for meddling with the US presidential election, President Trump has been under fire for lashing out at everyone… except Russia. So, in response, Bloomberg reports that the Trump administration is weighing citing the deaths of more than 200 Russian fighters – or rather mercenaries – in Syria, who were killed following US strikes on February 7, as an example of Trump’s tough stance toward Russia.

Recall that last week, “more than 200 mercenaries, mostly Russians fighting on behalf of Syrian leader Bashar al-Assad, died in a failed attack on a base and refinery held by U.S. and U.S.-backed forces in the oil-rich Deir Ezzor region” In terms of total body count, the U.S. official put the death toll at about 100, with 200 to 300 injured; while Russia admitted that Russians were killed, it said the number was five and denied that the men killed were officially sanctioned Russian troops.

It is this attack that Trump hopes to use as proof of his administration’s determination to show a “hard line” stance toward Putin.

On Tuesday, White House Press Secretary Sarah Huckabee Sanders made an oblique reference to “an incident” as she argued that President Donald Trump has been tougher on Russia than his predecessor Barack Obama. And, according to Bloomberg, she was alluding to the Syria battle – an episode which as we suggested last week threatened to further deteriorate relations with Moscow, as it would put the onus on Putin to respond to what Trump will deem an official Russian provocation.

…click on the above link to read the rest of the article…

“The Petro Is Born Today” – Maduro Launches Oil-Backed Crypto “For The Welfare Of Venezuela”

More than two months after Venezuelan President Nicolas Maduro announced his intention to launch the world’s first state-sponsored cryptocurrency to try and help Venezuela raise some badly needed foreign capital, the Petro – backed by 5 billion barrels of oil that are still waiting to be pumped out of a local oilfield – is now a reality.

Venezuela first tipped its hand at its intentions over the summer, when it appointed what we believe to be the world’s first “superintendent of cryptocurrency.”

The Venezuelan government has been saying for months that the Petro would be available for sale beginning Feb. 20. According to Bloomberg, it’ll be a few weeks – if not months – before we know anything about the cryptocurrency.

Developed in secret, the project was spearheaded by a 27-year-old blockchain engineer who, according to Bloomberg, earnestly believes in the power of crypto to rescue one of the world’s most repressive regimes from one of the worst economic disasters unfolding anywhere…

However, it turns out that the sale is the culmination of months of work, much of it done quietly by top bureaucrats loyal to Maduro. Working alongside them has been a 27-year-old Venezuelan technology entrepreneur named Gabriel Jimenez, who says he’s spent months helping develop the concept of the Petro and remains certain of its power to fix what ails Venezuela. “This is a lot more ambitious than just a cryptocurrency. It’s a project which I, along with a national and international team, have worked arduously to benefit this country,” says Jimenez. He says he hasn’t been paid for his work and will be compensated only in Petros if the token succeeds.

…click on the above link to read the rest of the article…

Syrian Fighters Enter Afrin; Turkey Retaliates With Immediate Bombing Sending Turkish Lira, Stocks Tumbling

As we reported yesterday, in a surprising twist in the ongoing Syrian proxy war, YPG Kurdish fighters in north-western Syria – who are backed by the US – had struck a deal with the Russia-backed Assad regime for Syrian forces to enter the Afrin region and repel a Turkish offensive which began last month.

Badran Jia Kurd, an advisor to the Kurdish-led administration in northern Syria told Reuters that Syrian troops will deploy along several border positions and could enter the region within the next two days: “we can cooperate with any side that lends us a helping hand in light of the barbaric crimes and the international silence,” Jia Kurd said.

We didn’t have long to wait for this escalation to unfold, and moments ago a convoy of fighters waving Syrian flags entered the northern Kurdish-held region of Afrin, which Turkey is targeting in a cross-border operation, according to footage on Syrian state TV shows.

BREAKING: Pro-Syrian government forces have begun entering in northern Syria, state TV reports. pic.twitter.com/ya1XixC15o

UPDATE: Footage of troops in now airing on state TV. pic.twitter.com/zJfrjhIK68

View image on Twitter

The pro-government fighters were filmed entering the village of Nubul in some 20 pickup trucks.  As Bloomberg adds, Rami Abdurrahman, head of the U.K.-based Syrian Observatory for Human Rights, which monitors the war through activists on the ground, also confirmed the movement.

…click on the above link to read the rest of the article…

Russia Warns US To “Stop Playing With Fire” In Syria, Immediately Leave Area It Controls

Two weeks after a US B-52 strike killed scores of Russian mercenaries in Syria, which according to Bloomberg and Reuters were are as many as 200, while Russia said no more than 5 Russians were killed in the attack then promptly refused to discuss the embarrassing topic further, Moscow has clearly not forgotten this latest – and most serious – escalation in the 7-year-old proxy war, and on Monday Russian Foreign Minister Sergei Lavrov warned the Trump administration not to “play with fire” as he lashed out at the U.S. over what he described as its “provocative” support for autonomy-seeking Kurds in Syria, while urging US troops in the area of Al-Tanf to “leave immediately.”

Speaking to a Moscow audience at the Valdai Club conference on the Middle East, Lavrov said that US troops must immediately cease operations in the Southern Syria area of Al-Tanf, adding that he once again calls “on our American colleagues not to play with fire and measure their steps proceeding not from immediate needs of today’s political environment, but rather from long-term interests of the Syrian people and of all peoples of this region, including the Kurds, of course,” the Russian top diplomat was quoted as saying by TASS News Agency.

Lavrov was referring to an area on Syria’s border with Jordan and Iraq, which the US declared to be under its protection last year. Among other things, it contains the Rukban refugee camp. The facility is apparently used by radical militants, including members of UN-designated terrorist group best known by its former name Al-Nusra Front, to recover and raid other parts of Syria, Lavrov said at the Valdai Club conference on the Middle East in Moscow, alongside his Iranian counterpart Mohammad Javad Zarif and a top adviser of Syrian President Bashar al-Assad.

…click on the above link to read the rest of the article…

Latvia Bank Crisis: Central Bank In Chaos As ECB Blocks Payments By Third Largest Bank

One day after we reported that the central bank governor and ECB Governing Council member Ilmars Rimsevics was detained by Latvia’s anti-corruption authority on Saturday on suspicion of accepting a bribe of more than €100,000, prompting both Latvia’s Prime Minister and the president to call on Rimsevics to resign, Latvia appears to have a full-blown banking crisis on its hands, after the European Central Bank froze all payments by Latvia’s third largest bank, ABLV, following U.S. accusations the bank laundered billions in illicit funds, including for companies connected to North Korea’s banned ballistic-missile program.

Latvia’s Central Bank governor Ilmars Rimsevics

The troubles started on February 14, when Latvia began investigating  ABLV over suspicions of illegal trading related to North Korea’s weapons system. The investigation was launched after the Treasury Department charged the bank with having “institutionalized money laundering as a pillar of the bank’s business practices,” which proposed preventing the bank from opening an account in the U.S.

That decision immediately made ABLV a pariah to other financial institutions, effectively cutting its access to the dollar and funding flows from the world’s most important market, and forcing it to rely exclusively on the ECB as it sole-source of funds.

As the WSJ reported, in proposing the ban on ABLV, Treasury said the bank managed transactions for clients connected to several long-sanctioned North Korean firms.

These include North Korea’s Foreign Trade Bank, the institution that manages Pyongyang’s foreign-currency earnings, revenue that U.S. and United Nations officials say go directly to North Korea’s nuclear and missile programs.

According to the Treasury, ABLV’s alleged illegal activity also included funneling billions of dollars in public corruption proceeds from Azerbaijan, Russia and Ukraine through shell company accounts.

…click on the above link to read the rest of the article…

Kim Dotcom: “Let Me Assure You, The DNC Hack Wasn’t Even A Hack”

Kim Dotcom has once again chimed in on the DNC hack, following a Sunday morning tweet from President Trump clarifying his previous comments on Russian meddling in the 2016 election.

I never said Russia did not meddle in the election, I said “it may be Russia, or China or another country or group, or it may be a 400 pound genius sitting in bed and playing with his computer.” The Russian “hoax” was that the Trump campaign colluded with Russia – it never did!

In response, Dotcom tweeted “Let me assure you, the DNC hack wasn’t even a hack. It was an insider with a memory stick. I know this because I know who did it and why,” adding “Special Counsel Mueller is not interested in my evidence. My lawyers wrote to him twice. He never replied. 360 pounds!” alluding of course to Trump’s “400 pound genius” comment.

Let me assure you, the DNC hack wasn’t even a hack. It was an insider with a memory stick. I know this because I know who did it and why. Special Counsel Mueller is not interested in my evidence. My lawyers wrote to him twice. He never replied. 360 pounds!https://www.google.com/amp/s/amp.smh.com.au/world/us-election/dnchack-did-kim-dotcom-warn-the-world-about-the-democratic-party-hacking-20160622-gpp15a.html  https://twitter.com/realdonaldtrump/status/965202556204003328 

Dotcom’s assertion is backed up by an analysis done last year by a researcher who goes by the name Forensicator, who determined that the DNC files were copied at 22.6 MB/s – a speed virtually impossible to achieve from halfway around the world, much less over a local network – yet a speed typical of file transfers to a memory stick.

The local transfer theory of course blows the Russian hacking narrative out of the water, lending credibility to the theory that the DNC “hack” was in fact an inside job, potentially implicating late DNC IT staffer, Seth Rich.

…click on the above link to read the rest of the article…

US Fiscal Policy Will Lead To A Debt Catastrophe: Goldman

Judging by how urgently Goldman’s research department is trying to get the bank’s clients to sell treasuries, Goldman’s prop traders must have a desperate bid for duration in anticipation of what probably will be a historic deflationary shock. It started a month ago when Goldman calculated that the US debt supply will more than double from $488bn to $1,030bn in 2018.

Then last Friday, Goldman revised its 10-year bond yield forecasts by around 20bp across the board – in part due to revised growth and inflation expectations – and now projects 3.25% for US Treasuries, 1.0% for Bunds, 2.0% for Gilts and 10bp for JGBs (the bank kept the peak level of Treasury yields in this cycle unchanged at 3.5-3.75%). Its full old vs new projection matrix is shown below:

Now, in yet another note meant to prompt selling of Treasurys (and buying of stocks that Goldman’s co-head of equities admitted last week he is all too willing to sell), overnight Goldman’s economist team wrote that “Federal fiscal policy is entering uncharted territory” after Congress “voted twice in the last two months to substantially expand the budget deficit despite an already elevated debt level and an economy that shows no need for additional fiscal stimulus.”

As a result of this historic expansion in U.S. borrowing during a period of economic growth, alongside rising bond yields, Goldman predicts a surge in the cost of servicing American debt, and goes so far as to warn that the current US fiscal trajectory would lead to catastrophe: “the continued growth of public debt raises eventual sustainability questions if left unchecked.”

* * *

What has so spooked Goldman, which rhetorically asks “what’s wrong with Fiscal Policy?” is that “US fiscal policy is on an unusual course.

…click on the above link to read the rest of the article…


‘Ring Of Fire’ Quake-Cluster Prompts Scientists To Warn Of “Large Rupture Sooner Than Later”

Earlier in the week we reported on scientists’ warnings over the “strained” magma chamber within Yellowstone’s supervolcano.

And now, perhaps even more concerning, The Daily Express reports that scientists in California have analyzed 101 major earthquakes around the Pacific Ring of Fire, a horseshoe-shaped geological disaster zone, between 1990 and 2016.

They believe a cluster of tremors around the area could indicate a “big one” is due to hit.

Earthquakes have already struck in Japan, Tawain, Guam and Indonesia in the past few weeks.

Thorne Lay, professor of Earth and planetary sciences at UC Santa Cruz, said: “Based on the clustering of earthquakes in space and time, the area that has just slipped is actually more likely to have another failure.

He added that “the surrounding areas have been pushed towards failure in many cases, giving rise to aftershocks andthe possibility of an adjacent large rupture sooner rather than later.

The Express notes that the study comes after the Ring of Fire was hit by earthquakes in the first two weeks of February.

More than 180 people were injured and 17 killed when a 6.4 magnitude quake struck Taiwan’s coast on February 6.

A series of tremors on reaching magnitudes as high as 5.7 shook the US territory of Guam.

Three earthquakes have hit Japan since February 11, with the largest measuring at 4.8 on the Richter scale.

Additionally, numerous volcano eruptions, hit the Pacific Rim in January.

…click on the above link to read the rest of the article…

“Sudden Stratospheric Warming Event” Fractures The Polar Vortex In Two

This split of the polar vortex will shift the upper atmospheric pattern such that the coldest airmass is located in western North America as well as over parts of Europe. This will allow for a ridge of high pressure to amplify in the eastern US, bringing unseasonably warm conditions next week,” said Ed Vallee, Long-Range Meteorologist and President of Vallee Wx Consulting.

The Weather Channel describes the atmosphetic impact for the Northern Hemisphere, as this unique weather event splits the polar vortex into two smaller vortices: one over western Canada and another over Europe.

  •  A split of the polar vortex occurred this week due to warming in the stratosphere
  • This is likely to result in cold temperatures in Europe
  • Although a disruption of the polar vortex is sometimes associated with cold weather in the eastern U.S., that is not always guaranteed

Further, from the Weather Channel:

“Across the Arctic, where the polar vortex typically stays locked, the stratosphere has warmed. This typically kicks into motion a polar vortex disruption like we are seeing. The stratosphere is a layer of the upper atmosphere above which most of our weather occurs – known as the troposphere – and where most of the polar vortex resides.” (Shown Below: The polar vortex has split into smaller vortices, one over Europe, and the other over northwestern North America.)

The one vortex over Western Europe and much of Eurasia will send the region into a dangerous deep freeze for the second half of February into early March. A disruption of the polar vortex has sent March 18 U.K. natural gas contracts soaring on the session, advancing +3.6% to 51.540.

…click on the above link to read the rest of the article…

This Year’s Stock Buybacks Are Already Bigger Than All Of 2009’s

While there is still some fringe debate what companies will do with the hundreds of billions in offshore funds repatriated to the US as part of the recently passed Trump tax reform, the discussion is largely over, especially after last week’s Cisco results. The company, which has $68 billion of overseas cash, third after AAPL and MSFT, announced that it would raise its buyback authorization by $25 billion, and revealed plans to repurchase its entire authorization of $31 billion during the next 6-8 quarters, equal to roughly 15% of its current market cap.

Call it a partial LBO, courtesy of Donald Trump.

In other words, those who said that companies will use virtually all repatriated proceeds for buybacks, congratulations, you were right, or as the FT humorously put it:

Flush with cash after the Republican tax cuts, Cisco announced on Wednesday that it was building gleaming factories across the US, employing hundreds of thousands of workers to make the latest cutting-edge routers.

Sorry, of course not. The money is going back to shareholders.

Don’t believe it? Here’s what Goldman’s David Kostin said in his latest Weekly Kickstart report:

Since December, S&P 500 firms have announced buybacks totaling $171 bn. YTD announcements of $67 bn represent a 22% increase versus the same period in 2017. The buyback window has re-opened and firms are taking advantage of the recent correction; the GS Buyback Desk reported that last week was the most active week in its history.

The $171 billion in YTD stock buyback announcements is the most ever for this early in the year. In fact, it is more than double the prior 10 year average of $77 billion in YTD buyback announcements.

…click on the above link to read the rest of the article…

Is New Zealand A Doomsday Preppers’ Paradise?

Earlier today, we reported that Peter Thiel, the Bay Area’s most prominent conservative and one of President Trump’s most outspoken supporters from the LGBT community, announced that he was relocating to Los Angeles – and taking his investment firm with him – because of the famously intolerant culture in Silicon Valley.

The announcement of the move conjured up images of street harassment for Thiel, who is loathed in Silicon Valley and by the mainstream media because of his role in bringing down Gawker as part of a nearly decade-long revenge plot…

Interestingly, the Guardian also happened to publish today a profile about Thiel’s decision to build another potential domicile much, much further south: In New Zealand, where it was reported last year that he had become a citizen in 2011, and later that he purchased a large tract of land nearly the size of Manhattan that used to be a sheep station on New Zealand’s southern island.

Of course, the wealthy have many options for doomsday preparedness, as we’ve noted time and time again – from personal bunkers to memberships to luxury post-apocalyptic communities.

But New Zealand represents something different: A sparsely populated island with plenty of resources – essentially clay for wealthy capitalists to mold a new society from the ashes of the old after the collapse sets in…

But while Thiel’s New Zealand investment was more of a novelty news story in the US, in New Zealand, it has become a major scandal, sparking a national debate over how much leeway wealthy individuals should be given to become citizens and provide property.

And Thiel isn’t the only one: The Guardian points out that several other wealthy Silicon Valley figures have also taken an interest in the country…

…click on the above link to read the rest of the article…

How WaPo, BuzzFeed, And Soros-Backed Group Pushed The Phrase “Fake News” Until It Backfired

In the immediate aftermath of Wednesday’s tragic school shooting in Parkland, Florida, several major news outlets published a report that the shooter, Nikolas Cruz, was a member of a white supremacist organization. In fact, the MSM was hoodwinked by 4chan users into publishing fake news.

In fact, the stories are still up despite the Broward County Sherriff’s department declaring that there are “no known ties” between the shooter and the hate group.

Jordan said Thursday that his office has arrested militia leader Jordan Jereb at least four times since January 2014 and has been monitoring the group’s membership.

He says his office has “very solid” information on the group and “there’s no known ties that we have that we can connect” 19-year-old Nikolas Cruz with the group.TampaBay.com

And while the MSM’s enormous mistake was simply a case of terrible journalism, those very outlets participated in a seemingly coordinated effort to brand any media with a divergent opinion as “fake news,” with a little help from their friends.

In a recent Tedx talk at the University of Nevada, investigative journalist Sharyl Attkisson revealed some of the earliest efforts to seed the phrase “fake news” into the public lexicon by a little nonprofit group funded in part by George Soros’ Open Society Foundation and Google.

The group, “First Draft,” announced a partnership on September 13, 2016 “to tackle malicious hoaxes and fake news reports,” said Attkisson. “The goal was supposedly to separate wheat from chaff, to prevent unproven conspiracy talk from figuring prominently in internet searches. To relegate today’s version of the alien baby story to a special internet oblivion.”

…click on the above link to read the rest of the article…

Brazilian Army Ordered To “Restore Order” In Rio De Janeiro

With public spending on police and social services collapsing amid Brazil’s worsening economic crisis, violent crime has crept back up in Rio de Janeiro, a city widely recognized for its favelas – urban hillside slums teeming with violence, drugs and prostitution, according to Bloomberg.

And ahead of an October election where President Michel Temer will try to win his first full term in office, the president is trying to send in the army to seize control of the city’s streets and restore order to an increasingly lawless town.

President Michel Temer issued a decree on Friday putting an Army general in charge of Rio’s security forces, including the state’s civilian police. The intervention, which requires congressional approval, will last until the end of the year, according to the decree.

“Our prisons will no longer be offices for thieves, our public squares party halls for organized crime,” Temer said after signing the decree.

“I know it’s an extreme measure but many times Brazil requires extreme measures to put things in order.”

But as is often the case with Brazilian politics, Temer has a plausible ulterior motive: By sending in the army, he might create enough of a distraction to avoid voting on an unpopular pension bill because Brazilian law conveniently prohibits making constitutional changes during times of military crisis.

Temer told Reuters that the intervention wouldn’t halt negotiations over pension reform or stop a vote on the plan, which is deeply unpopular with the country’s retirees, who stand to see their benefits cut.

Meanwhile, crime in the city has erased nearly a decade of progress, climbing back to its highest level since 2009. Temer’s decision is the first time the military has intervened in public affairs since the former military dictatorship ended in the mid-1980s and the country returned to democracy.

…click on the above link to read the rest of the article…

Olduvai II: Exodus
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Olduvai II: Exodus
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Olduvai III: Cataclysm
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