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Upcoming US Q4 GDP Release Expected To Report Strong Growth

The US economy remains on track to post a sharp rebound in the fourth-quarter GDP report that’s scheduled for Jan. 27. The momentum, however, is expected to slow in early 2022 amid stronger macro headwinds. Output in last year’s final quarter is on…



The US economy remains on track to post a sharp rebound in the fourth-quarter GDP report that’s scheduled for Jan. 27. The momentum, however, is expected to slow in early 2022 amid stronger macro headwinds.

Output in last year’s final quarter is on track to rise at a seasonally adjust annual 6.8% pace, based on the median estimate for a set of nowcasts compiled by — down slightly from the previous estimate in late-December. The expected gain marks a sharp improvement over Q3’s 2.3% increase.

The surge in growth relative to Q3 isn’t expected to last. Several factors are likely to weigh on the macro trend in this year’s first quarter, including ongoing supply-chain constraints and fallout linked to the recent spread of the Omicron variant of the coronavirus.

“We’re getting a sense that there are a lot of infections, but it’s not going to, in all likelihood, overwhelm us. But how long is it going to be around? Because that is disruptive,” says Mark Zandi, chief economist at Moody’s Analytics.  

Tighter monetary policy is also a reason to lower growth forecasts relative to Q4’s rebound. Federal Reserve Chairman Jerome Powell on Tuesday laid out a framework for raising interest rates this year. “As we move through this year … if things develop as expected, we’ll be normalizing policy, meaning we’re going to end our asset purchases in March, meaning we’ll be raising rates over the course of the year,” he told the US Senate Committee on Banking, Housing and Urban Affairs “At some point perhaps later this year we will start to allow the balance sheet to run off, and that’s just the road to normalizing policy.”

A pullback in fiscal stimulus is also a factor for managing expectations down for this year’s economic activity. “Peak fiscal policy support, and therefore peak real GDP growth, was likely realized in 2021, and the global economy now appears to be rapidly progressing toward late-cycle dynamics,” predicts PIMCO, an investment firm.

The main focus at the moment is on expectations for interest rate hikes. There’s a wide variety of outlooks on how far and how fast the Fed will life its target rate, which is currently set at a 0%-to-0.25% range. Fed funds futures are currently pricing in a 79% probability that the central bank will announce its first hike at the March 16 FOMC meeting, based on numbers published by CME Group.

Goldman Sachs sees several more increases later in the year. By some accounts, the Fed will be playing catch-up as it seeks to normalize policy in the wake of a sharp runup in inflation. In turn, the shift in monetary posture is a threat to economic growth, according to some analysts.

“Recessionary pressure is building,” says Jeffrey Gundlach, who oversees DoubleLine, a money manager. The Fed “seems pretty far behind the curve when you consider wage growth,” he advises. “We’re going to be more on recession watch than we have been.”

Perhaps, but recession risk remains low at the moment, based on analysis in this week’s issue of The US Business Cycle Risk Report. Economic momentum looks set to slow in early 2022, based on current estimates of the newsletter’s Economic Trend Index (ETI) and Economic Momentum Index (EMI) through February. But softer growth doesn’t yet translate into elevated recession risk: both indexes are expected to remain well above their tipping points (50% and 0%, respectively) that reflect neutral levels for economic activity.

The wild card is inflation and how the Fed reacts. But for the near term, the US economy remains on track to grow, albeit at a slowing pace.’s current estimate for Q1 is 3.2% (as of Jan. 7), which is roughly half the expected rise for Q4.

Deciding what happens in the months ahead is still highly uncertain. The one relatively high-confidence view at the moment is that 2022 will unfold with decelerating growth momentum and several risk factors lurking.

“The world economy is simultaneously facing COVID-19, inflation, and policy uncertainty, with government spending and monetary policies in uncharted territory,” observes World Bank President David Malpass.

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‘I see no happy ending’ − a former national security leader on the Gaza hostage situation

No government wants to have to deal with a hostage crisis. A former US national security official explains that there is no winning without losing in such…




Israelis whose relatives are being held hostage demonstrate on October 26, 2023 in front of the Defense Ministry building in Tel Aviv, demanding the government to bring back their loved ones. Mostafa Alkharouf/Anadolu via Getty Images

Hamas took more than 200 people hostage during its deadly rampage in Israeli border towns on Oct. 7, 2023. Among the hostages are children and the elderly. While four of them have been released, the fate of the rest is unknown, as Qatar serves as an intermediary in working to free the hostages. In this interview with Naomi Schalit, The Conversation U.S. senior politics and democracy editor, Gregory F. Treverton of USC Dornsife, a former chairman of the National Intelligence Council in the Obama administration, says most hostage-taking has specific goals. This one, says Treverton, “is basically an adjunct of warfare, and that makes it very different” – and very hard to solve.

How do people in your field think about hostage-taking? I would imagine that the feeling is, “Oh, my god, please let nothing like that happen.”

It’s an utter dilemma, because on the one hand you feel for the hostages. And as we’ve seen in the past, the Israelis have been prepared to – and did – release a thousand hostages to get one Israeli back.

On the other hand, when you do a deal to get hostages released, you’re only encouraging more hostage-taking. So you’re damned if you do and damned if you don’t. As a result, every government, including the United States, says, “We never deal with hostage-takers.” But of course, they all do – and they have to.

I think it’s one of the hardest parts of being in the national security business. You want to free the people – but you’re also going to get criticized. Every time President Biden has gotten somebody out of Russia, people have said, “Oh, he’s paid too high a price” or “He’s rewarded hostage-taking,” and to some extent, that’s true. You are basically rewarding the hostage-takers. But we still have to deal with them. We want to get our people out. And at some some point – as the Israelis have shown – they’re prepared to pay almost any price to get them back.

A worried and teary-eyed woman holds a photo of her daughter.
Keren Shem, the mother of hostage Mia Shem, holds a photograph of her daughter as she speaks to the press in Tel Aviv on Oct. 17, 2023. Gil Cohen-MAGEN/AFP via Getty Images

Israel released more than 1,000 prisoners in 2011 in exchange for Israeli soldier Gilad Shalit, whom Hamas captured and held for five years. This is more than 200 times the number of hostages, so how do you even think about that?

At least in my professional experience, this is without precedent. The closest parallel would be the 1976 Entebbe hijacking and hostage-taking by two Germans and two Palestinians on a flight from Tel Aviv to Paris. Hijackers held 103 Israeli hostages, once they released the 148 non-Israeli hostages. Hamas holds twice the number of hostages, and in very, very different circumstances. In Entebbe, the Israeli government knew where they were, they were in a single place – the airplane – which had been forced to land in Entebbe, Uganda, after taking off from Tel Aviv. And that’s where Israeli commandos were able to rescue the hostages.

In Gaza, we don’t know where they are. We know for sure they’re scattered throughout the tunnels, likely in lots of different small groups. Hamas will presumably then use them as shields if fighting begins on the ground. They might think that that would encourage the Israelis not to make a major attack – to keep Hamas from killing all the hostages. We know that Israeli Prime Minister Benjamin Netanyahu isn’t keen on a major ground assault, and this really puts the onus on the Israelis for how the hostage situation ends.

When you think about the history of hostage negotiations, do you see something that has any relevance to what’s going on now?

It seems to me it’s a really different category. Even Entebbe was hostage-taking for some political aim – the hijackers wanted Israel to release a large number of prisoners who were Palestinian. A colleague of mine used to say that the point of terrorism was to do the least amount of violence with the most people watching it. But Entebbe was political theater, basically, and this is not political theater. This is basically an adjunct of warfare, and that makes it very different. It’s not the usual kind of tit for tat, with “How much am I willing to pay?” or “Can I take a hostage to get somebody else out?”

Two buses driving through an arid landscape.
Buses carrying Palestinian prisoners on Oct. 16, 2011, who were being exchanged for Israeli hostage Gilad Shalit, held by Hamas for five years. Jack Guez/AFP via Getty Images

What does Israel’s heavy bombing of Gaza and the beginning of a ground invasion tell you about the government’s approach to the hostage situation?

It suggests either that they have a pretty good fix on where the hostages are located, which seems unlikely given the network of Hamas tunnels, or that they have decided they must proceed in any case and will try their best to safeguard and free hostages as they go. Given the Hamas practice of using civilians as human shields, the outcome is likely to be very ugly.

Where do you see this going?

I see no happy ending. I don’t think there’s a deal that Israel could conceivably make, given its own politics. Or that Hamas would accept. So it does seem to me that at some point there is going to be that ground attack and the hostages are going to be caught in the middle of it. I see almost no alternative, given what Israel has pledged – to destroy Hamas. The Biden administration maintains that Israel doesn’t really have a strategy. They have a desire, which is to destroy Hamas. But that’s not a strategy for dealing with the hostages or for Gaza after the attack.

Gregory F. Treverton 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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Hamas Delegation Arrives In Moscow As Russia Blames US For Escalation

Hamas Delegation Arrives In Moscow As Russia Blames US For Escalation

In a somewhat unexpected development, a delegation of Hamas leaders…



Hamas Delegation Arrives In Moscow As Russia Blames US For Escalation

In a somewhat unexpected development, a delegation of Hamas leaders have arrived in Moscow for talks, the Russian Foreign Ministry has confirmed Thursday evening (local time). "I can confirm that representatives of the [Hamas] Palestinian movement are visiting Moscow,” Foreign Ministry spokeswoman Maria Zakharova said in a press briefing, vowing to provide relevant details as the talks unfold.

The visit had not been previously announced by either side, and the Hamas delegation is being led by a senior member of the group, Moussa Abu Marzouk. Hamas is a designated terror organization in the US, European Union, and some other countries; but it has official relations with countries like Iran, Turkey, Syria, and now apparently Russia.

A 2019 meeting involving Hamas, Fatah, and Russian representatives, via Reuters

Russia, however, has said it remains willing to talk to all sides of the conflict in hopes of achieving ceasefire and peace. After the US exit from Afghanistan, Moscow had similarly hosted a Taliban delegation. 

It's as yet unclear whether Russia's top diplomat, Sergei Lavrov, will meet with the Hamas representatives, given he's said to currently be in Minsk. 

RIA Novosti has reported that Hamas has during opening meetings with Russian officials "commended Putin’s position and the efforts of Russia’s diplomacy."

The Kremlin has said it is engaged in crisis diplomacy talks with both the Hamas and Israeli sides, at a moment that over 220 hostages are still being held in Gaza. Four have been released thus far, including two Americans, due in large part to the mediation of Qatar. Will Russia press the delegation to release more captives? Likely this is high on the agenda for Moscow. 

Just days ago Russia blamed the United States for stoking escalation by positioning Navy warships in the Mediterranean near Israel. FM Lavrov said Monday during a meeting in Tehran that "the more a state takes this kind of proactive measures, the greater the risk and the danger of an escalation of the conflict".

He called out Washington as "already among the countries intervening the most" since the October 7 Hamas terror attack. The Biden administration as of course rejected the charge, and blamed Iran for ultimately being behind Hamas and regional terror.

At the UN in New York, Russia and China have also just vetoed US drafted UN Security Council resolution on Gaza. The dueling sides have rejected the proposals of the other given Washington's pro-Israel stance, and the willingness of Moscow and Beijing to heap criticism on Tel Aviv for the humanitarian crisis and soaring death toll among Palestinians.

Turkey has also been a foremost critic of Israel's assault on Gaza, as the death toll surpasses 7,000 - with President Erdogan blasting the West's double standard on the crisis. 

He said in his most recent speech at a Thursday conference, "Is it possible not to react while seeing what happens in Gaza? Nothing justifies such savagery. Unfortunately, so-called 'civilized' countries watch it. We heard that the EU is still hesitating to call for a cease-fire. How many children should die before you decide on a call? Let us know when the cease-fire should be declared. I have been in politics for 40 years, but I never sat idly in the face of such savagery,” Erdoğan said.

Tyler Durden Thu, 10/26/2023 - 12:05

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Maine Gov. Confirms 18 Killed, 13 More Injured In Mass Shootings Overnight, Suspect Still At Large

Maine Gov. Confirms 18 Killed, 13 More Injured In Mass Shootings Overnight, Suspect Still At Large

Update: (1145ET): Maine Gov. Janet Mills said…



Maine Gov. Confirms 18 Killed, 13 More Injured In Mass Shootings Overnight, Suspect Still At Large

Update: (1145ET): Maine Gov. Janet Mills said at a press conference that 18 people were killed and 13 people were injured in last night’s attacks.

“This is a dark day for Maine,” Mills said.

Earlier, a federal law-enforcement official said a shooter killed at least 22 people.

The Wall Street Journal reports that Maine State Police worked through the night alongside local officers and the Federal Bureau of Investigation to find Robert Card, 40 years old, who was their sole person of interest in the shootings.

“Card is considered armed and dangerous,” said Mike Sauschuck, Maine’s public-safety commissioner.

“We’re gonna not stop until we locate him,” Lisbon police chief, Ryan McGee, told a local TV station as the manhunt continued early Thursday.

Of course, it did not take long for President Biden to demand gun reform:

“Today, in the wake of yet another tragedy, I urge Republican lawmakers in Congress to fulfill their duty to protect the American people,” he wrote.

“Work with us to pass a bill banning assault weapons and high-capacity magazines, to enact universal background checks, to require safe storage of guns, and end immunity from liability for gun manufacturers.”

However, as The Hill reports, GOP presidential candidate Vivek Ramaswamy said the mass shooting in Maine illustrates why communities should revive mental health institutions and involuntary commitments for those who need help, alluding to the shooting suspect.

“We pray for the Maine shooting victims, their families, and for the brave law enforcement members who are working to bring this deeply sick individual to justice,” Ramaswamy posted on X.

“We must remove these violent, psychiatrically deranged people from their communities and be willing to involuntarily commit them.”

He said this includes reviving mental health institutions and less reliance on pharmaceuticals.

“We know from the 1990s how to stop violent crime,” he added.

“The real question is if we have the spine to do it.”

The answer, sadly, Vivek is... no.

*  *  *

As we detailed last night, authorities in Maine are investigating three mass casulaty events and a single suspect remains at large, the Androscoggin County Sheriff’s Office said in a post on Facebook.

“We are encouraging all businesses to lock down and or close while we investigate,” the sheriff’s office said.

As The Sun Journal reports, police, fire and rescue personnel descended on Sparetime Recreation on Mollison Way about 7:15 p.m. after a report of an active shooter.

Shortly after, reports came in that there was another shooting at Schemengees Bar & Grille Restaurant on Lincoln Street.

Lewiston public information officer Derrick St. Laurent told the Sun Journal at about 8:15 p.m. that another shooting was reported at the Walmart Distribution Center on Alfred A Plourde Parkway.

CNN reports that at least 16 people are dead, according to Lewiston City Councilor Robert McCarthy, and dozens more are injured in the incidents, though it’s unclear how many are injured due to gunfire.

The Sheriff's office released this image of the alleged suspect....

The Maine State Police have named Robert Card as a person of interest. A trained firearms instructor and army reservist who has recently been released from a mental health facility...

Maine State Police also said they are responding to an active shooter situation in Lewiston in a post on Facebook.

“Please stay inside your home with the doors locked,” state police said.

“If you see any suspicious activity or individuals please call 911.”

In a statement, the FBI said its Boston division is coordinating with law enforcement partners in Maine and stands “ready to assist with any available resources,” and urged the public to remain vigilant.

Maine Gov. Janet Mills said Wednesday night she has been briefed on the situation.

“I urge all people in the area to follow the direction of State and local enforcement. I will to continue to monitor the situation and remain in close contact with public safety officials,” the governor said on Facebook.

Tyler Durden Thu, 10/26/2023 - 11:40

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