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Message to Investors: The V recovery Borg have the upper hand. Assimilate or hide!

PBOC’s Powerful Policies to Boost Asia



FacebookTwitterEmail The PBOC signalled on Sunday, its intention to engage in more powerful policies to counter the slide in Chinese growth from the COVID-19 pandemic. In a rather Fed-like twin-mandate way, the PBOC stated in its quarterly monetary report that it would concentrate on growth and jobs amongst other things. In a decidedly non-Fed way, it indicated that it would maintain “normal” monetary policy, implying that quantitative easing and its ilk are not in the PBOC’s playbook. That, of course, does not mean that interest rates could not be much lower than where they are today though, and the report does imply that more cuts in the Loan Prime Rate are on the way. That should be enough to ensure that the welcome to your illusion rally in asset markets continues at full steam ahead in Asia today. That is despite a sudden outbreak of COVID-19 again in South Korea this weekend. Infected partygoers unwittingly exposure potentially thousands of their fellow night clubbers to some very non-uplifting house. Authorities in Seoul shut down bars and clubs in the capital and told the potentially 6000-7000 clubbers potentially exposed, that the only house they will be experiencing, is the four walls of Mum and Dad’s as they self-isolate. China has partially locked down the city of Jilin near the North Korean border after a surge in coronavirus cases. Singapore and Russian cases continued to climb over the weekend. And even the US White House has not been spared, as Mike Pence’s press secretary and various other staff all tested positive for coronavirus. All of which serves to highlight life after lockdowns for the world, and what an insidious nasty COVID-19 will be to control, let alone eliminate. With lockdowns being eased across Europe and Australasia, as well as the USA, and the rate of people dying falling in many countries, markets will likely ignore the threat of COVID-19 part two, staying with the momentum of the peak-virus trade. That all ran utterly to plan on Friday night, as expected by the author, unfortunately. The US Non-Farm Payrolls printed a drop of 20.5 million jobs. As stated on Friday, that news was well baked into the markets, and equities and energy rallied strongly, as did the rotation out of haven positions. With COVID-19 is defeated, or even controlled, you could argue. Millions of jobs are lost, whole industries are facing annihilation and the global economy taking repeated 8-counts. Wiser minds than I are also pondering how Wall Street could be so disconnected from the high street. The answer lies in the in momentum, hope, and central banks prepared to use unlimited amounts of unconventional monetary policy to backstop anybody suffering a loss. Financial markets are incredibly efficient at short term groupthink, seizing the narrative that suits their hopes in a lemming-like fashion, ignoring the bits that don’t. All in an emperor’s new clothes fashion; justified under the guise of being “forward-looking.” The momentum of the FOMO peak-virus v-shaped recovery Borg collective have the upper hand now, and resistance is futile. Until it isn’t. When that time comes, the reversal could be emotional, indeed. In the meantime, investors should either partially assimilate, or hide and await Star Fleet’s arrival. Another wise man, undoubtedly cleverer than I, John Maynard Keynes, once said: “markets can stay irrational longer than you can stay solvent.” You can build an entire career in investing around that phrase, and never has his sage advice been more relevant—one to beam up Scotty. Asia is bereft of tier-1 data today, with local markets, therefore, at the mercy of short-term headline volatility to detract from the peak-virus juggernaut. Data highlights for the region include Australian Unemployment on Thursday and China’s Industrial Production and Retail Sales on Friday. With the PBOC signalling, a release of the doves, poor numbers on Friday will be met with an expectation of further China stimulus on the way. In this market, that probably means continuing buying equities. US inflation on Tuesday night is expected to fall from 1.50% to 0.40%. That will probably impact bond markets more than other asset classes, with US yields likely to edge lower again, possibly eroding support for the US Dollar. PBOC easing bias to support Asian equities. The PBOC’s intention to more proactively support the Chinese economy is likely to boost equities across Asia today. Wall Street shrugged off a fall in Non-Farm Payrolls of 20.5 million jobs, and an explosion of the Unemployment rate to 14.70%. Both data points were lower than the street’s forecast with stocks not pausing for breath, finishing the session strongly. The S&P 500 rose 1.1%, the NASDAQ rose 1.0%, and the Dow Jones gained 1.3%. The US Dollar continues to wilt in the face of the peak-virus trade. The US Dollar mostly edged lower against most major and developing market currencies overnight as bullish momentum in equities and a rotation into EM continued unabated. Notably, the Dollar rose against fellow haven currency, the Japanese Yen, increasing 0.35% to 106.65. Higher oil prices saw the greenback give ground against the CAD, RUB and NOK, with the Mexican Peso notably outperforming, USD/MXN falling 1.50% to 23.6740. The trade-sensitive Australian Dollar again performed well on Friday, rising 0.55% to 0.6535, just below its 100-day moving average at 0.6540. The AUD/USD is likely to test higher again today in Asia following the dovish PBOC quarterly report released yesterday. Regional currencies should continue to fare better against the greenback with KRW, IDR and SGD expected to be the primary beneficiaries. Politics may temper gains by the Malaysian Ringgit this week. The Parliamentary Speaker is granting permission for a no-confidence vote to proceed when Parliament reconvenes on May 18th. Oil enjoys a bumper day as Baker Hughes rig counts fall. Oil had another outstanding day with the post-virus economic recovery momentum unabated. That was boosted further by the Baker Hughes Rig Count data, which showed the Oil Rigs count hitting a new low of 292 rigs. As recently as March, that count was 683 oil rigs, showing the scale of the new well cutbacks by the US oil industry. The expectations of lower US production, and higher consumption, as lockdowns globally are reduced, was fuel on the fire for oil prices on Friday. Brent crude leapt 5.05% to $30.85 a barrel, also its 50-day moving average. Brent’s next resistance is at $32.00 a barrel, with a break opening further rallies to $36.00 a barrel. WTI broke its 50-day moving average at $25.40 a barrel on the way to a 5.15% rise to $26.10 a barrel. WTI has resistance at $28.00 and $29.00 a barrel. The PBOC quarterly report should ensure that any profit-taking seen in early Asia is limited. The prospect of more Chinese stimulus should be positive for oil prices as the Asian session progresses. Gold continues to make much ado about nothing. The rotation out of haven positioning on Friday saw gold fall by 0.77% to $1702.50 an ounce, wiping out much of the previous day’s gains. Yet again though, it must be emphasised that gold continues to trade off the whims of day to day sentiment. A clear direction has yet to be established in May. Gold remains anchored in the middle of its larger $1650.00 to $1750.00 an ounce range. Until one of those sides breaks comprehensively, gold will continue to occupy the cheap seats of the financial market’s theatre.

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Menendez indictment looks bad, but there are defenses he can make

The indictment of Sen. Bob Menendez is full of lurid details – hundreds of thousands of dollars in cash stuffed into clothes among them. Will they tank…




Senate Foreign Relations Committee Chairman, Sen. Bob Menendez, D-N.J., right, and his wife Nadine Arslanian. AP Photo/Susan Walsh, File

Reactions came quickly to the federal indictment on Sept. 22, 2023 of New Jersey’s senior U.S. senator, Democrat Bob Menendez. New Jersey Gov. Phil Murphy joined other state Democrats in urging Menendez to resign, saying “The alleged facts are so serious that they compromise the ability of Senator Menendez to effectively represent the people of our state.”

The indictment charged Menendez, “his wife NADINE MENENDEZ, a/k/a ‘Nadine Arslanian,’ and three New Jersey businessmen, WAEL HANA, a/k/a ‘Will Hana,’ JOSE URIBE, and FRED DAIBES, with participating in a years-long bribery scheme…in exchange for MENENDEZ’s agreement to use his official position to protect and enrich them and to benefit the Government of Egypt.” Menendez said he believed the case would be “successfully resolved once all of the facts are presented,” but he stepped down temporarily as the chairman of the Senate’s influential Committee on Foreign Relations.

The Conversation’s senior politics and democracy editor, Naomi Schalit, interviewed longtime Washington, D.C. lawyer and Penn State Dickinson Law professor Stanley M. Brand, who has served as general counsel for the House of Representatives and is a prominent white-collar defense attorney, and asked him to explain the indictment – and the outlook for Menendez both legally and politically.

What did you think when you first read this indictment?

As an old seafaring pal once told me, “even a thin pancake has two sides.”

Reading the criminal indictment in a case for the first time often produces a startled reaction to the government’s case. But as my over 40 years of experience defending public corruption cases and teaching criminal law has taught me, there are usually issues presented by an indictment that can be challenged by the defense.

In addition, as judges routinely instruct juries in these cases, the indictment is not evidence and the jury may not rely on it to draw any conclusions.

A man in a suit pointing at a poster board with various photos on it.
Damian Williams, U.S. Attorney for the Southern District of New York, speaks during a press conference on Sept. 22, 2023 after announcing the Menendez indictment. Alexi J. Rosenfeld/Getty Images

The average reader will look at the indictment and say “These guys are toast.” But are there ways Menendez can defend himself?

There are a number of complex issues presented by these charges that could be argued by the defense in court.

First, while the indictment charges a conspiracy to commit bribery, it does not charge the substantive crime of bribery itself. This may suggest that the government lacks what it believes is direct evidence of a quid pro quo – “this for that” – between Menendez and the alleged bribers.

There is evidence of conversations and texts that coyly and perhaps purposely avoid explicit acknowledgment of a corrupt agreement, for instance, “On or about January 24, 2022, DAIBES’s Driver exchanged two brief calls with NADINE MENENDEZ. NADINE MENENDEZ then texted DAIBES, writing, ‘Thank you. Christmas in January.’”

The government will argue that this reflects acknowledgment of a connection between official action and delivery of cash to Sen. Menendez, even though it is a less than express statement of the connection.

Speaking in this kind of code may not fully absolve the defendants, but the government must prove the defendants’ intent to carry out a corrupt agreement beyond a reasonable doubt – and juries sometimes want to see more than innuendo before convicting.

The government has also charged a crime calledhonest services fraud” – essentially, a crime involving a public official putting their own financial interest above the public interest in their otherwise honest and faithful performance of their duties.

The alleged failure of Sen. Menendez to list the gifts, as required, on his Senate financial disclosure forms will be cited by prosecutors as evidence of “consciousness of guilt” – an attempt to conceal the transactions.

However, under a recent Supreme Court case involving former Gov. Bob McDonnell of Virginia for similar crimes, the definition of “official acts” under the bribery statute has been narrowly defined to mean only formal decisions or proceedings. That definition does not include less-formal actions like those performed by Sen. Menendez, such as meetings with Egyptian military officials.

The Supreme Court rejected an interpretation of official acts that included arranging meetings with state officials and hosting events at the Governor’s mansion or promoting a private businessman’s products at such events.

When it comes time for the judge to instruct the jury at the end of the trial, Sen. Menendez may well be able to argue that much of what he did not constitute “official acts” and therefore are not illegal under the bribery statute.

This case involves alleged favors done for a foreign country in exchange for money. Does that change this case from simple bribery to something more serious?

The issue of foreign military sales to Egypt may also present a constitutional obstacle to the government.

The indictment specifically cites Sen. Menendez’s role as chairman of the Senate Foreign Relations Committee and actions he took in that role in releasing holds on certain military sales to Egypt and letters to his colleagues on that issue. The Constitution’s Speech or Debate Clause protects members from liability or questioning when undertaking actions within the “legitimate legislative sphere” – which undoubtedly includes these functions.

While this will not likely be a defense to all the allegations, it could require paring the allegations related to this conduct. That would whittle away at a pillar of the government’s attempt to show Sen. Mendendez had committed abuse of office.

In fact, when the government has charged members of Congress with various forms of corruption, courts have rejected any reference to their membership on congressional committees as evidence against them.

Three men in suits, standing in front of a fire engine.
NJ Gov. Phil Murphy, left, seen here in 2018 with fellow Democrats Sens. Robert Menendez and Cory Booker, has called on Menendez to resign. AP Photo/Wayne Parry

How likely is Sen. Mendendez’ ouster from the Senate?

Generally, neither the House nor Senate will move to expel an indicted member before conviction.

There have been rare exceptions, such as when Sen. Harrison “Pete” Williams was indicted in the FBI ABSCAM sting operation from the late 1970s and early 1980s against members of Congress. He resigned in 1982 shortly before an expulsion vote. With current Democratic control of the Senate by a margin of just one seat, Sen. Menendez’ ouster seems unlikely even though the Democratic governor of New Jersey would assuredly appoint a Democrat to fill the vacancy.

“In the history of the United States Congress, it is doubtful there has ever been a corruption allegation of this depth and seriousness,” former New Jersey Sen. Robert Torricelli said. True?

That seems hyperbolic. The Menendez case is just the latest in a long line of corruption cases involving members of Congress.

In the ABSCAM case, seven members of the House and one Senator were all convicted in a bribery scheme. That scheme involved undercover FBI agents dressed up as wealthy Arabs, offering cash to Congressmembers in return for a variety of political favors.

In the Korean Influence Investigation in 1978 – when I served as House Counsel – the House and Department of Justice conducted an extensive investigation of influence peddling by Tongsun Park, a Korean national in which questionnaires were sent to every member of the House relating to acceptance of gifts from Park.

Going all the way back to 1872, there was the Credit Mobilier scandal that involved prominent members of the House and Vice President Schuyler Colfax in a scheme to reward these government officials with shares in the transcontinental railroad company in exchange for their support of funding for the project.

Stanley M. Brand does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Von Der Leyen Speech Suggests Russia Dropped Nuke On Hiroshima 

Von Der Leyen Speech Suggests Russia Dropped Nuke On Hiroshima 

Von der Leyen just said what?…

This past Wednesday, President of the European…



Von Der Leyen Speech Suggests Russia Dropped Nuke On Hiroshima 

Von der Leyen just said what?...

This past Wednesday, President of the European Commission Ursula von der Leyen delivered a speech before the 2023 Atlantic Council Awards in New York, where she sounded the alarm over the specter of nuclear war centered on the Russia-Ukraine conflict. But while invoking remembrance of the some 78,000 civilians killed instantly by the atomic bomb dropped on Hiroshima at the end of WWII, she said her warning comes "especially at a time when Russia threatens to use nuclear weapons once again". She  actually framed the atomic atrocity in a way that made it sound like the Russians did it. Watch:

There was not one single acknowledgement in Von der Leyen's speech that it was in fact the United States which incinerated and maimed hundreds of thousands when it dropped no less that two atomic bombs on Japanese cities.

Here were her precise words, according to an Atlantic Council transcript...

You, dear Prime Minister, showed me the meaning of this proverb during the G7 summit in Japan last year. You brought us to your hometown of Hiroshima, the place where you have your roots and which has deeply shaped your life and leadership. Many of your relatives lost their life when the atomic bomb razed Hiroshima to the ground. You have grown up with the stories of the survivors. And you wanted us to listen to the same stories, to face the past, and learn something about the future.

It was a sobering start to the G7, and one that I will not forget, especially at a time when Russia threatens to use nuclear weapons once again. It is heinous. It is dangerous. And in the shadow of Hiroshima, it is unforgivable

The above video of that segment of the speech gives a better idea of the subtle way she closely associated in her rhetoric the words "once again" with the phrase "shadow of Hiroshima" while focusing on what Russia is doing, to make it sound like it was Moscow behind the past atrocities.

Via dpa

Russian media not only picked up on the woefully misleading comments, but the Kremlin issued a formal rebuke of Von der Leyen's speech as well:

In response to von der Leynen's remarks, Russian Foreign Ministry spokeswoman Maria Zakharova accused the European Commission president of making "no mention whatsoever of the US and its executioners who dropped the bombs on populated Japanese cities."

Zakharova responded on social media, arguing that von der Leyen's assertions on Moscow's supposed intentions to employ nuclear weapons "is despicable and dangerous" and "lies."

Some Russian embassies in various parts of the globe also highlighted the speech on social media, denouncing the "empire of lies" and those Western leaders issuing 'shameful' propaganda and historical revisionism.

Tyler Durden Sun, 09/24/2023 - 13:15

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Saudi Arabia Sentences Schoolgirl To 18 Years In Prison Over Tweets

Saudi Arabia Sentences Schoolgirl To 18 Years In Prison Over Tweets

Via Middle East Eye,

Saudi Arabia has sentenced a secondary schoolgirl…



Saudi Arabia Sentences Schoolgirl To 18 Years In Prison Over Tweets

Via Middle East Eye,

Saudi Arabia has sentenced a secondary schoolgirl to 18 years in jail and a travel ban for posting tweets in support of political prisoners, according to a rights group.

On Friday, ALQST rights group, which documents human rights abuses in Saudi Arabia, revealed that the Saudi Specialised Criminal Court handed out the sentence in August to 18-year-old Manal al-Gafiri, who was only 17 at the time of her arrest.

Via Reuters

The Saudi judiciary, under the de facto rule of Crown Prince Mohammed bin Salman, has issued several extreme prison sentences over cyber activism and the use of social media for criticising the government.

They include the recent death penalty against Mohammed al-Ghamdi, a retired teacher, for comments made on Twitter and YouTube, and the 34-year sentence of Leeds University doctoral candidate Salma al-Shehab over tweets last year.

The crown prince confirmed Ghamdi's sentence during a wide-ranging interview with Fox News on Wednesday. He blamed it on "bad laws" that he cannot change

"We are not happy with that. We are ashamed of that. But [under] the jury system, you have to follow the laws, and I cannot tell a judge [to] do that and ignore the law, because... that's against the rule of law," he said.

Saudi human rights defenders and lawyers, however, disputed Mohammed bin Salman's allegations and said the crackdown on social media users is correlated with his ascent to power and the introduction of new judicial bodies that have since overseen a crackdown on his critics. 

"He is able, with one word or the stroke of a pen, in seconds, to change the laws if he wants," Taha al-Hajji, a Saudi lawyer and legal consultant with the European Saudi Organisation for Human Rights, told Middle East Eye this week.

According to Joey Shea, Saudi Arabia researcher at Human Rights Watch, Ghamdi was sentenced under a counterterrorism law passed in 2017, shortly after Mohammed bin Salman became crown prince. The law has been criticised for its broad definition of terrorism.

Similarly, two new bodies - the Presidency of State Security and the Public Prosecution Office - were established by royal decrees in the same year.

Rights groups have said that the 2017 overhaul of the kingdom's security apparatus has significantly enabled the repression of Saudi opposition voices, including those of women rights defenders and opposition activists. 

"These violations are new under MBS, and it's ridiculous that he is blaming this on the prosecution when he and senior Saudi authorities wield so much power over the prosecution services and the political apparatus more broadly," Shea said, using a common term for the prince.

Tyler Durden Sun, 09/24/2023 - 11:30

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