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Rate of Contraction Exceeds the Global Financial Crisis
Rate of Contraction Exceeds the Global Financial Crisis
The US is suffering the fastest deterioration in operating conditions for over 11 years.
Markit reports Output Contracts at Fastest Pace in Survey History amid COVID19 pandemic .
Key Findings
- Flash U.S. Composite Output Index at 27.4 (40.9 in March). New series low.
- Flash U.S. Services Business Activity Index at 27.0 (39.8 in March). New series low.
- Flash U.S. Manufacturing PMI at 36.9 (48.5 in March). 133-month low.
- Flash U.S. Manufacturing Output Index at 29.4 (46.5 in March). New series low.
Adjusted for seasonal factors, the IHS Markit Flash U.S. Composite PMI Output Index posted 27.4 in April, down from 40.9 in March, to signal the fastest reduction in private sector output since the series began in late-2009.
Services companies registered the steepest rate of decline in the survey’s history, while manufacturers recorded the sharpest fall in sales since the depths of the financial crisis in early-2009.
The cancellation and postponement of orders led firms to reduce their workforce numbers at a rate far exceeding anything seen previously over the survey history at the start of the second quarter.
Chris Williamson, Chief Business Economist Comments
- “The COVID-19 outbreak dealt a blow to the US economy of a ferocity not previously seen in recent history during April. The deterioration in the flash PMI numbers indicates a rate of contraction exceeding that seen even at the height of the global financial crisis, with jobs also being slashed at a rate far exceeding anything previously recorded by the survey.”
- “The large swathe of non-essential business that has been shut down temporarily amid efforts to contain the virus means the blow has been most heavily felt in the service sector, and especially for consumer facing companies in the recreation and travel industries. Those companies still actively trading meanwhile reported the steepest drop in demand seen since data were first available, and are also struggling against twin headwinds of staff shortages and supply chain delays.”
…click on the above link to read the rest of the article…
As Unemployment Claims Rise, So Do Missed Mortgage Payments
As Unemployment Claims Rise, So Do Missed Mortgage Payments
Over 22 million people have filed for unemployment benefits in the past 4 weeks. Many struggle with payments.
Black Knight reports More than 2.9 Million in Forbearance, 5.5% of All Mortgages
Key Details
- As of April 16, more than 2.9 million homeowners – or 5.5% of all mortgages – have entered into COVID-19 mortgage forbearance plans
- This population represents $651 billion in unpaid principal and includes 4.9% of all GSE-backed loans and 7.6% of FHA/VA loans
- At today’s level, mortgage servicers would be bound to advance $2.3 billion of principal and interest payments per month to holders of government-backed mortgage securities on COVID-19-related forbearances
- Another $1.1 billion per month in lost funds will be faced by those with portfolio-held or privately securitized mortgages
Forbearance Totals
Payment Forbearance Under Cares Act
On March 27, 2020, President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security Act (also known as the CARES Act) into law. A provision of the CARES Act allows borrowers with federally backed mortgages to request temporary loan forbearance for up to 180 days. Borrowers also have the right to apply for an extension of another 180 days of forbearance.
Once a borrower requests hardship forbearance due to the COVID-19 pandemic, the act requires the servicer to offer a CARES Act forbearance.
Pitfalls
Forbes warns of Mortgage Forbearance Pitfalls.
John Ulzheimer, an Atlanta-based credit expert formerly of FICO and Equifax, warns of a potential balloon payment.
“If the lender or servicer demands that you pay back the deferred amount all at once or in an otherwise expedited manner, that could be impossible for the borrower.”
Unfortunately, having a mortgage servicer ask for a “balloon” payment once your forbearance period ends is a very real possibility. Borrowers from multiple national banks have reportedly been informed of the need to repay any delayed payments in a lump sum at a future date.
Three Things Not to Do
…click on the above link to read the rest of the article…
Hyperinflationists Come Out of the Woodwork Again
Hyperinflationists Come Out of the Woodwork Again
CoinDesk asked me to share my opinions on the chance of hyperinflation. My thoughts are below.
From CoinDesk
Hi Mish,
I am working on an article for CoinDesk about recent fiscal and monetary splurge by governments and central banks across the globe and the impact on gold and bitcoin. As I see, a majority of analysts and economists are calling for hyperinflation and rally in gold.
Could you please share your take?
Thanks
CoinDesk
Matter of Definitions
Before there can be a rational debate on anything, people must agree on definitions.
I believe most people would accept this definition: Hyperinflation is the complete collapse in currency against every other asset.
Pick a currency, say the US dollar. To bet on hyperinflation and be correct, the dollar would have to go nearly worthless vs the Euro, the Pound, the Yen.
Alternatively, 50% in a single month would quality. Professor Hanke defines Hyperinflation as a 50% Currency Collapser in a Month.
Q: How likely is that?
A: Close to zero.
Replay Discussion
Curiously, this is a replay of my 2010 article Williams Calls for “Great Hyperinflationary Great Depression”.
Williams is John Williams of Shadowstats. He was not alone. Here is a snip changing the name Williams to “Hyperinflationsists” in the first word of these four points.
- Hyperinflationists focus on money supply, ignoring credit although credit is far more important.
- Hyperinflationists ignore numerous global interconnections. Calling for hyperinflation in the US alone ignores happenings in Europe, Japan, and China. I remain amazed at how US-centric hyperinflationists in general are.
- Hyperinflationists ignore US gold holdings, the largest in the world.
- Hyperinflationists ignore the massive influence of consumer attitudes and bank attitudes towards lending.
To expect the US dollar to go to zero vs the Euro, Yen, Food, gold, Yuan, etc., was then and is now pure silliness.
…click on the above link to read the rest of the article…
50,000 New Coronavirus Infections Per Day in China
50,000 New Coronavirus Infections Per Day in China
Prof. Neil Ferguson, Vice Dean Faculty of Medicine, Imperial College in London, estimates 50K new infections per day.
Please consider the following video by Prof. Neil Ferguson.
10 Key Video Points
- 50,000 new cases a day in china
- Infections doubling every 5 days
- Death rate is still unknown
- China likely to peak in March
- Epidemic peak is still a month away
- It will be very hard to control this epidemic the say way we did with SARS 15-20 years ago
- Cases are always underestimated
- Death delays are as long as three weeks
- Reported deaths outside China are not reassuring because of delays
- We still don’t know the full effects
Tweet on Containment Strategies
Building on @ChristoPhraser et al’s work, @coreypeak‘s model examining the impact of disease dynamics on the relative benefits of symptom monitoring v quarantine seems relevant for thinking through #nCoV2019 containment strategies. https://www.pnas.org/content/114/15/4023.abstract …
Jim Bianco’s Latest Update
…click on the above link to read the rest of the article…
“Made in China” Economic Hit Coming Right Up
“Made in China” Economic Hit Coming Right Up
Economic contagion due to the coronavirus is underway. Hyundai halted production. Sony, Apple, and Ford issued warnings.
If you can’t get parts, you can’t build cars.
And due to a coronavirus-related manufacturing halt in China, Hyundai to Shut Down Some Production.
Hyundai, the world’s fifth-largest carmaker, announced Tuesday that it was suspending production lines at its car factories in South Korea, one of the first major manufacturers to face severe supply-chain issues because of the coronavirus.
Many auto plants in China have already shut down because of the virus, including factories run by Hyundai, Tesla, Ford and Nissan. Hyundai plants in South Korea would be the first to shut down lines outside of China, and comes as Hyundai has ramped up production in China over the past two decades.
Economic Contagion
The Wall Street Journal comments on China’s Economic Contagion
More than 20,000 coronavirus cases have been confirmed worldwide—an eight-fold increase over the last week—and experts say hundreds of thousands may not yet have been diagnosed. Two dozen or so countries have reported cases, and many have restricted travel from China to limit the contagion. Companies are evacuating employees from China.
U.S. manufacturers such as Ford, Apple and Tesla have temporarily halted production. One-sixth of Apple sales and nearly half of chip-maker Qualcomm’s revenues come from China. So do 80% of active ingredients used by drug-makers to produce finished medicines. Because China is the world’s largest manufacturer and an enormous consumer market, the economic freeze will disrupt supply chains and reduce corporate earnings.
China’s GDP growth was already almost certainly lower than the official figure of 6%, and it is likely to fall by a third or more.
…click on the above link to read the rest of the article…
Hundreds of Virus Carrying Planes Headed for US, London, Paris, Vancouver
Hundreds of Virus Carrying Planes Headed for US, London, Paris, Vancouver
Lockdowns are for the peasants, not those with money.
What Does Halt All Traffic Mean?
This morning, I Decided to Research this Question:
I don’t Know Jim, good question.
China statements say “tours”
Other sources suggest “individuals”
So … Is it Tours or Individuals?
And what about those who visited China from other countries?
Not covered at all IMO. https://twitter.com/biancoresearch/status/1221573171515678722 …Replying to @MishGEA97:21 PM – Jan 26, 2020
Results below.
Lockdown? What Lockdown?
There is no lockdown in China, if you are wealthy.
Check out this Beijing Flight Schedule for today. Here’s the Wuhan Flight Schedule for today.
Lockdowns are for those with no money, not the wealthy.
Beijing Departures
- 25 flights on a page
- 5 pages for the 00:00-06:00 departures
- 26 pages for 06:00-12:00 departures
- 22 pages for the 12:00-18:00 Beijing departures
- 20 pages for the 18:00-00:00 departures
That’s about 1825 flights out of Beijing.
Wuhan Departures Today
How easy is it to escape Wuhan?
You can still catch a flight from Wuhan to Anchorage, Tokyo, Seoul, Bangkok, Singapore, Taipei and countless cities in China including Beijing and Shanghai.
- There are 8 pages of flights out of Wuhan today. That’s about 200 flights. Most of the flights are within China, but that hardly stops containment.
- In the 00:00-06:00 slot one flight left for Anchorage. Another left for Bangkok, Thailand and another went to Tokyo.
- In the 06:00-12:00 slot, two planes left for Tokyo and three to Hong Kong.
- In the 12:00-18:00 slot, three planes left for Seoul, South Korea and two went to Taipei, Taiwan.
- In the 18:00-00:00 slot, one plane went to Bangkok , three went to Taipei, three went to Hong Kong,
Wuhan Departures Tomorrow
Tomorrow, there are four flights from Wuhan to Singapore, three to Taipei, two to Bangkok, three to Tokyo, three to Paris, and six to Hong Kong, three to San Francisco,
…click on the above link to read the rest of the article…
Bubbles Everywhere: All Dressed Up and Nowhere to Hide
Bubbles Everywhere: All Dressed Up and Nowhere to Hide
Economist Robert Shiller says there is no alternative to riding out bubbles.
Please consider Stock Market Crash Near? Nobel Laureate Sees ‘Bubbles Everywhere’
When Nobel Laureate and “Irrational Exuberance” author Robert Shiller says he sees bubbles in the financial markets — you’d better listen up. He literally wrote the book on stock market crashes and bubbles after all.
“I see bubbles everywhere,” Shiller, economics professor at Yale University and author of just-published “Narrative Economics” told investors gathered in Los Angeles Wednesday. “There’s no place to go. You just have to ride it out. You invest even though you expect the price to decline.” Shiller famously predicted the 2000 stock market crash and the 2007 crash of the housing market.
Shiller says the housing market is in a bubble phase, not unlike 2005. That was the point the housing bubble was inflated, but yet to go parabolic. “It’s like 2005 again,” Shiller said. “San Francisco and L.A. are already slowing down.” That’s a “bad indicator,” he said, as those markets have been going up for years.
No Place to Go?!
I do not care about books or past predictions.
I care about logic of the moment.
For starters, if housing was like “2005 again“, San Francisco and LA would not be “already slowing down.” But that is nitpicking.
Here’s the important issue: On an individual basis, It is absurd to say there is “no place to go“.
Places to Hide
- Gold
- US Dollar
- Foreign Currencies
- US treasuries 5-year or less
It is impossible for all of those to decline at the same time. Heck it is impossible for 2 and 3 to decline at the same time except compared to gold or some other asset, which of course implies somewhere else to hide.
…click on the above link to read the rest of the article…
What the Hell is the ECB Doing?
What the Hell is the ECB Doing?
Danielle DiMartino poses an interesting question regarding the ECB. I have a set of answers.
What is the ECB Doing?
I started thinking about that question weeks ago.
I have a set of answers and even started writing this post before DiMartino brought it to the forefront.
There are only two answers. One of them is very unsettling.
- Ignorance
- On Purpose
Occam’s Razor
Occam’s razor is a principle from philosophy. Suppose there exists two explanations for an occurrence. In this case the one that requires the least amount of assumptions is usually correct. Another way of saying it is that the more assumptions you have to make, the more unlikely an explanation.
Occam’s Razor typically eliminates most conspiracy theories. It’s not that conspiracies don’t happen, but that simpler solutions are far more likely.
My corollary to the theory is very easy to understand: If stupidity is one of the possible answers, it is the most likely answer.
I am a normally a big fan of Occam’s Razor.
But this is so bizarre that I have my doubts.
Importantly, this may not be a conspiracy at all. Mario Draghi can easily be acting alone.
My Lead Question
How stupid can things get before one starts believing something else is in play?
I had already been thinking about that question when not only did ECB president Mario Draghi further push interest rates into negative territory but he also said it was a good idea for the ECB to think about MMT.
Shocking ECB Dissent
Dissent at the Fed happens all the time. It is rare at the ECB. The ECB builds a consensus and it is typically unanimous.
…click on the above link to read the rest of the article…
Lagarde Praises Negative Rates, Study Shows They Reduce Lending
Lagarde Praises Negative Rates, Study Shows They Reduce Lending
Incoming IMF chief Christine Lagarde says negative rates have helped Europe more than they’ve hurt. I disagree.
The nearly always wrong Christine Lagarde is wrong once again.
Today she claims Negative Rates Have Helped Europe More Than They’ve Hurt.
The next head of the European Central Bank, Christine Lagarde, appears to be as much of a fan of negative interest rates as the current chief, Mario Draghi.
European banks have complained about the impact on profitability, but even there the current managing director of the International Monetary Fund defended the move.
“On the one hand, banks may decide to pass the negative deposit rate on to depositors, lowering the interest rates the latter get on their savings,” she wrote. “On the other hand, the same depositors are also consumers, workers, and borrowers. As such they benefit from stronger economic momentum, lower unemployment and lower borrowing costs. All things considered, in the absence of the unconventional monetary policy adopted by the ECB – including the introduction of negative interest rates – euro area citizens would be, overall, worse off.”
Negative Rates Actually Cut Lending
Research shows Negative Rates Actually Cut Lending.
Central banks’ negative interest rates were supposed to increase spending, stop deflation and stimulate the economy. They may have done the exact opposite.
According to research from the University of Bath, central banks charging commercial banks to hold excess cash reserves have actually decreased lending. That’s because the additional costs reduce banks’ profit margins, leading to a drop in loan growth.
“This is a good example of unintended consequences,” said Dr. Ru Xie of the university’s School of Management, one of the study’s authors. “Negative interest rate policy has backfired, particularly in an environment where banks are already struggling with profitability.”
…click on the above link to read the rest of the article…
Barron’s Nonsensical Idea: Cut Rates Like Mad to Avoid Recession
Barron’s Nonsensical Idea: Cut Rates Like Mad to Avoid Recession
Barron’s writer Matthew Klein proposes to stop the recession by cutting interest rates like it’s 1995.
Klein says How to Avoid a Recession? Cut Interest Rates Like It’s 1995.
One of the most reliable harbingers of U.S. recession—short-term interest rates on U.S. Treasury debt higher than longer-term yields—has been flashing warning signs for months. That doesn’t mean the economy is doomed to a downturn.
So-called yield-curve inversions have preceded every U.S. downturn since the 1950s, with only one false positive in 1966. This past week, the yield on two-year Treasuries briefly surpassed the yield on 10-year notes for this first time since 2007. The most straightforward explanation is that traders…
Absurd Notion
The rest of the article is behind a paywall, but I can tell you with 100% certainly Klein’s notion is absurd.
Inverted yield curves do not cause recessions. They are symptoms of a buildup of excess debt or other fundamental problems.
Those problems will not not go away if the Fed “cuts rates like 1995” or even like 2008.
If a zero percent interest rate stopped recessions, Japan would not have had a half-dozen recessions in the past decades that it did have, many without inversions.
Not even negative rates can stop recessions.
The Eurozone, especially Germany, has negative rates. Yet, it’s highly likely the Eurozone is in recession now and even more likely Germany is (with the rest of the Eurozone to follow).
Monetary Madness
As a prime example of global monetary madness, witness Inverted Negative Yields in Germany and Negative Rate Mortgages.
Even if the Fed made a 100 basis point cut (four quarter point cuts at once), what the heck would that do?
Stop recession for how long? Zero months? Six months? And at what expense?
What Then?
Yes, what then? Negative mortgages? A 10-year yield of -1.0% like Switzerland.
And if that doesn’t work?
…click on the above link to read the rest of the article…
Recession Looms: Cass Freight Index Negative for 7th Month
Recession Looms: Cass Freight Index Negative for 7th Month
According to Cass, “Freight shipments signal economic contraction”.
The Economic Outlook from Freight’s Perspective is not promising.
- With the -5.3% drop in June following the -6.0% drop in May, we repeat our message from last month: the shipments index has gone from “warning of a potential slowdown” to “signaling an economic contraction.”
- May and June’s drops are significant enough to pose the question, “Will the Q2 ’19 GDP be negative?”
- We acknowledge that all of these negative percentages are against extremely tough comparisons; and the Cass Shipments Index has gone negative before without being followed by a negative GDP.
- The weakness in spot market pricing for many transportation services, especially trucking, is consistent with the negative Cass Shipments Index and, along with airfreight and railroad volume data, strengthens our concerns about the economy and the risk of ongoing trade policy disputes. Weakness in commodity prices and the decline in interest rates have joined the chorus of signals calling for an economic contraction.
- We are concerned about the severe declines in international airfreight volumes (especially in Asia) and the ongoing swoon in railroad volumes, especially in auto and building materials.
- We see the weakness in spot market pricing for transportation services, especially in trucking, as consistent with and a confirmation of the negative trend in the Cass Shipments Index.
- As volumes of chemical shipments have lost momentum, our concerns of the global slowdown spreading to the U.S., and the trade dispute reaching a ‘point of no return’ from an economic perspective, grow.
European Airfreight
European airfreight volumes have been negative since March 2018, but only by a small single-digit margins (-1% to -3%), until November 2018. Unfortunately, since then, volumes have started to further deteriorate. Our European Airfreight Index was down a concerning -7.2% in April, only down -2.6% in May, before dropping -7.9% in June. Although by itself distressing, it’s the Asian data that has become the most alarming.
…click on the above link to read the rest of the article…
Not Winning: Collapse in Global Trade Escalates, Imports -2.7%, Exports -4.0%
Not Winning: Collapse in Global Trade Escalates, Imports -2.7%, Exports -4.0%
Those who claim that Trump has already won or is sure to win the trade war need to ponder actual trade results.
Exports rose 1.0% in March with imports up a reported 0.9%. That progress was taken away and then some in April.
The Census Bureau Advance Trade report shows the balance of trade widened by 0.3%. The details, as noted by Econoday are downright ugly.
Sharp declines in exports are unwelcome headlines in April’s advance data on goods trade. The monthly deficit remains very deep, at $72.1 billion with exports falling 4.2 percent year-on-year and with imports also down, 2.7 percent lower. The deficit compares unfavorably with a $71.3 billion monthly average in the first quarter that marks a weak opening for net exports in the second quarter.
Capital goods are the US’s largest exports and these fell 6.5 percent in the month to $44.3 billion. Compared with April last year, capital goods exports are down 3.7 percent. Auto exports are also down, 7.2 percent lower to $12.9 billion and 6.7 percent below last year. The only export component showing a gain is food & feeds which rose 0.5 percent to $11.2 billion but which is nevertheless 6.2 percent below April last year.
The decline on the import side is also led by a 3.5 percent decline for capital goods ($55.4 billion) but also includes 3.1 percent and 2.3 percent monthly declines in autos ($30.9 billion) and consumer goods ($54.2 billion) as well as a 1.1 percent drop in foods ($12.8 billion).
Global trade figures have been contracting and the latest US numbers are part of that picture. Today’s report gets second-quarter GDP, already held down by contractions for April retail sales and industrial production, off to a slow start.
Note that country balances aren’t posted with the advance report but will follow with the subsequent international trade report that will also include data on services.
…click on the above link to read the rest of the article…
Lacy Hunt Blasts MMT and Speaks of Hyperinflation If Implemented
Lacy Hunt Blasts MMT and Speaks of Hyperinflation If Implemented
In the Hoisington First Quarter Review, Lacy Hunt blasts MMT as “self-perpetuating” inflation.
Please consider the Hoisington Investment Quarterly Outlook for the first quarter of 2019.
MMT Leads to Hyperinflation
Under existing statutes, Fed liabilities, which they can create without limits, are not permitted to be used to pay U.S. government expenditures. As such, the Fed’s liabilities are not legal tender. They can only purchase a limited class of assets, such as U.S. Treasury and federal agency securities, from the banks, who in turn hold the proceeds from this sale in a reserve account at one of the Federal Reserve banks. There is currently, however, a real live proposal to make the Fed’s liabilities legal tender so that the Fed can directly fund the expenditures of the federal government – this is MMT – and it would require a change in law, i.e. a rewrite of the Federal Reserve Act.
This is not a theoretical exercise. Harvard Professor Kenneth Rogoff, writing in ProjectSyndicate.org (March 4, 2019), states “A number of leading U.S. progressives, who may well be in power after the 2020 elections, advocate using the Fed’s balance sheet as a cash cow to fund expansive new social programs, especially in view of current low inflation and interest rates.” How would MMT be implemented and what would be the economic implications? The process would be something like this: The Treasury would issue zero maturity and zero interest rate liabilities to the Fed, who in turn, would increase the Treasury’s balances at the Federal Reserve Banks. The Treasury, in turn, could spend these deposits directly to pay for programs, personnel, etc. Thus, the Fed, which is part of the government, would be funding its parent with a worthless IOU.
…click on the above link to read the rest of the article…
Zombified Economy: What Will the Next Recession Look Like?
Zombified Economy: What Will the Next Recession Look Like?
The short answer is nothing like the last.
If you search for “next recession” numerous ideas pop up. Many believe there will not be a recession soon.
Condition Comparison
Conditions are radically different than in 2007 and 2000.
The Fed re-blew a housing price bubble but the number of jobs tied to construction, sales, CDOs, agents and even the impact on banks is a shell of what happened then.
Technology is bubbly, but not like 2000. This is how I see things.
- We will not have bank failures in the US.
- There will be major bank failures or bail-ins in Europe.
- Housing will not have a major role but will strengthen the recession.
- Millennials simply cannot afford houses so housing will not lead a Fed attempt at a recovery even if interest rates plunge.
- Low interest rates will keep zombie companies alive for a while longer .
- Proliferation of retail stores, Walmart, Target, everything requires minimum staffing levels no matter how poor sales become.
- Unemployment will not rise much like last time. Instead, expect to see hours cut.Also expect for many of those currently working two jobs to lose one of them.
- Retail sales will plunge with the reduction in work.
- The impact of the above is very weak profits but not massive labor disruption
- Stocks will get clobbered as earnings take a huge hit.
- Junk bonds also get clobbered on fears of rolling over debt.
- This malaise can potentially last for years.
Zombified Economy
Japan is in a state of zombification and Europe is on the verge.
The US may not and likely will not go through Japanese-like extremes just yet. However, the demography setup is poor, the student debt problem is a huge overhang, boomers unprepared for retirement is a huge overhang, and pensions are a huge overhang.
…click on the above link to read the rest of the article…
Real Reason Trump Wants to Ban Huawei: US Wants to Spy and China Won’t Cooperate
Real Reason Trump Wants to Ban Huawei: US Wants to Spy and China Won’t Cooperate
The UK, Germany, India, and the United Arab Emirates are among the countries resisting US pressure to Ban Huawei.
The New York Times reports U.S. Campaign to Ban Huawei Overseas Stumbles as Allies Resist.
Over the past several months, American officials have tried to pressure, scold and, increasingly, threaten other nations that are considering using Huawei in building fifth-generation, or 5G, wireless networks. Mike Pompeo, the secretary of state, has pledged to withhold intelligence from nations that continue to use Chinese telecom equipment. The American ambassador to Germany cautioned Berlin this month that the United States would curtail intelligence sharing if that country used Huawei.
But the campaign has run aground. Britain, Germany, India and the United Arab Emirates are among the countries signaling they are unlikely to back the American effort to entirely ban Huawei from building their 5G networks. While some countries like Britain share the United States’ concerns, they argue that the security risks can be managed by closely scrutinizing the company and its software.
The United States is not ready to admit defeat, but its campaign has suffered from what foreign officials say is a scolding approach and a lack of concrete evidence that Huawei poses a real risk. It has also been hampered by a perception among European and Asian officials that President Trump may not be fully committed to the fight.
Mr. Trump has repeatedly undercut his own Justice Department, which unveiled sweeping criminal indictments against Huawei and its chief financial officer with accusations of fraud, sanctions evasion and obstruction of justice. Mr. Trump has suggested that the charges could be dropped as part of a trade deal with China. The president previously eased penalties on another Chinese telecom firm accused of violating American sanctions, ZTE, after a personal appeal by President Xi Jinping of China.
…click on the above link to read the rest of the article…
