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Tue, 17th January 2017

Anirudh Sethi Report

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Archives of “D.C.” Tag

Priebus: Trump “Accepts” That Russia Played A Role In Election Hacking

In a surprising twist, incoming White House chief of staff Reince Priebus said Sunday on Fox News that President-elect Donald Trump accepts that Russia played a role in hacking the Democratic National Committee and Clinton campaign Chairman John Podesta.

Priebus, the former RNC chairman, said Trump understands that Moscow was behind the intrusions into the Democratic Party organizations. “He accepts the fact that this particular case was entities in Russia so that’s not the issue” and added that Trump “is not denying that entities in Russia were behind this particular hacking campaign.”

“But here’s the thing that I think everyone needs to understand — when this whole thing started, it started from the Russians 50 years ago … This is something that’s been going on in our elections for many, many years.” Priebus said it “happens every election period.”

“In this particular case, it started way back in 2015 before either nominee of either party was chosen,” Priebus said. “And it started … as a spearfishing expedition over many different institutions.”

Additionaly, Priebus blasted the Democratic National Committee (DNC) for its lack of IT defenses. The DNC was warned multiple times by the FBI before being hacked, Priebus added, and officials didn’t respond. “So yes, we have bad actors around the world,” Priebus said.”But we also have a problem when we have a major political institution that allows foreign governments into their system with hardly any defenses or training.”

As Reuters notes, Priebus’ comments marked a major shift in the official Trump narrative: the president elect has repeatedly dismissed claims that the Russians were trying to help him, arguing that those charges are the product of his political opponents trying to undermine his victory. 

So far, Trump has only indirectly acknowledged the intelligence community’s conclusion that Russia interfered in the election and has consistently downplayed its significance — and the president-elect has a history of later contradicting what his surrogates tell the media.

On Friday morning, shortly before being briefed by US intelligence, Trump tweeted that “Gross negligence by the Democratic National Committee allowed hacking to take place.The Republican National Committee had strong defense!” He then tweeted two follow-up comments, first that “Intelligence stated very strongly there was absolutely no evidence that hacking affected the election results. Voting machines not touched!” followed by “Only reason the hacking of the poorly defended DNC is discussed is that the loss by the Dems was so big that they are totally embarrassed!”

After the briefing, Trump stated, “While Russia, China, other countries, outside groups and people are consistently trying to break through the cyber infrastructure of our governmental institutions, businesses and organizations including the Democrat National Committee, there was absolutely no effect on the outcome of the election including the fact that there was no tampering whatsoever with voting machines.”

Donald Trump Seals Electoral College Victory, Officially Becomes 45th US President

It’s finally over: Donald Trump has secured 304 Electoral Votes following the Texas vote (with 2 faithless electors), officially securing the presidency of the United States.  Of course, the now official President-Elect Trump took to twitter to confirm the victory:

Texas’ 36 electoral votes for Trump pushed him over the edge at around 4:30 Central Time, even though two rogue electors’ defections deprived Trump of one of those votes. That gave Trump 304 total electoral votes.

A quick recap of the day’s events from the WSJ:

 Members of the Electoral College meeting in state capitals across the country on Monday confirmed President-elect Donald Trump’s victory in the 2016 election, ending a last-ditch campaign to deny him the presidency. Mr. Trump amassed at least 270 electoral votes on Monday afternoon—enough to officially become the president-elect over his Democratic rival, Hillary Clinton, according to a tally of votes by the Associated Press.

Typically just a formality, this year’s Electoral College vote attracted an outsize amount of attention after a group of mostly Democratic electors made a late push to block Mr. Trump’s path to the White House. They argued the Electoral College had a constitutional duty to act independently of the will of the voters in extraordinary circumstances. Protesters gathered in several state capitols across the country to encourage electors to reject Mr. Trump.

China will give back seized drone, criticises U.S. “hyping up” the issue

China’s Defence Ministry said on Saturday it had been in talks with the United States about returning an underwater drone taken by a Chinese naval vessel in the South China Sea, but the U.S. was not helping by “hyping up” the issue.

The drone was taken on Thursday, the first seizure of its kind in recent memory, about 50 nautical miles northwest of Subic Bay off the Philippines, just as the USNS Bowditch was about to retrieve the unmanned underwater vehicle (UUV), U.S. officials said.

The Defence Ministry said a Chinese naval vessel discovered a piece of “unidentified equipment” and checked it to prevent any navigational safety issues, before discovering it was a U.S. drone.

“China decided to return it to the U.S. side in an appropriate manner, and China and the U.S. have all along been in communication about it,” the ministry said on its website.

“During this process, the U.S. side’s unilateral and open hyping up is inappropriate, and is not beneficial to the smooth resolution of this issue. We express regret at this,” it added.

U.S. President-elect Donald Trump weighed in to the row on Saturday, tweeting: “China steals United States Navy research drone in international waters – rips it out of water and takes it to China in unprecedented act.”

Without directly saying whether the drone was operating in waters China considers its own, the ministry said U.S. ships and aircraft have for a long period been carrying out surveillance and surveys in “the presence” of Chinese waters.

“China is resolutely opposed to this, and demands the U.S. stops this kind of activity,” it said.

China will remain on alert for these sorts of activities and take necessary steps to deal with them, the ministry said without elaborating.

Earlier, the Global Times, published by the ruling Communist Party’s official People’s Daily, cited an unidentified Chinese source as saying they believed the issue would be resolved smoothly.

The United States says the drone was operating lawfully.

Bitcoin trade volume hits record in November

A record 174.7 million bitcoins changed hands, so to speak, in November, a 50% or so increase from the previous month’s trade volume, according to Bitcoinity.org.

The spike came as Chinese jumped into the digital currency as a way to shift their assets into dollars.

 The previous monthly record, which came in March, was 148.6 million bitcoins.

The November trading volume was worth $137 billion.

The yuan has been weakening against the U.S. currency since Donald Trump’s victory in the presidential election on Nov. 8.

Many Chinese evade restrictions on directly buying dollars by taking a detour into bitcoins. This is what they were doing last month.

Short-term debt relief approved by Eurogroup but tough measures loom

Eurozone finance ministers struck a deal in Brussels on Monday on short-term measures to lighten Greece’s debt burden, but the conclusion of the country’s second review of its third bailout and the participation of the International Monetary Fund have been deferred to January.

“The Eurogroup endorsed today the full set of short-term measures, including extending the repayment period and an adjustment to interest rates,” the Eurogroup said a statement.

The decision was seen to reward Greece for implementing the latest batch of reforms demanded as part of its bailout program.

The head of the European Stability Mechanism, Klaus Regling, said after the meeting that the short-term measures will start being implemented “in the next weeks.”

The measures, however, did not meet the demands of the IMF, which has demanded substantial debt relief and harsher austerity procedures in order to join the Greek program.

Shifting Paradigms and the Market Adjustment

Around the middle of the year, St. Louis Federal Reserve President James Bullard revealed his new economic approach.  He argued that during economic phases, or paradigms, economic relationships wee fairly stable, such as unemployment and inflation.  
We cannot predict when a new paradigm emerges.  Economic forecasts must assume the continuation of whatever is the current paradigm.  Bullard accepts the need for one more interest rate, perhaps next month to bring the Fed funds to a neutral target within the existing set of economic relationships.  
Investors see two trends which could very well portend a changing paradigm.  First is reflation.  It was clear that whichever candidate won the US presidential election, fiscal policy was set to turn more accommodative.  Trump promised a large stimulus package, which included tax cuts as well as spending increases.  The size of the package he talked about during the campaign, and his economic advisers are maintaining after the election, is on par with the February 2009 measures when the economy was in the throes of the credit-crisis-induced recession.   
The limits of monetary policy were gradually becoming recognized and emphasized by economists and policymakers.  A few countries, such as Canada, led by a new Liberal government, provided modest fiscal support.  The UK is also widely expected to increase government spending.  Investors anticipate that Hammond, the UK Chancellor the Exchequer, will outline an increase in infrastructure investment (rail and roads) in the Autumn Statement on November 23.  Trump’s campaign rhetoric stands out for its size and the fact that it is for a US economy that is already growing near trend, which the Federal Reserve estimates near 1.8%.  The inflationary implications of provided significant stimulus under such pre-existing conditions are not lost on investors.  

Odds of a December rate rise hit 100%

100ppSo it’s a sure thing then?

Federal fund futures — or the contracts that investors use to bet on interest rate movements — currently imply a 100 per cent chance of a rate rise next month, compared with 96 per cent on Thursday.

The move comes as New York Fed president Bill Dudley on Friday said that “inflation expectations are well anchored”, adding that “we should be increasingly optimistic that we will reach our inflation objectives over the next few years”.

His remarks arrived a day after Fed chair Janet Yellen said that an increase in short-term interest rates could “become appropriate relatively soon”.

Commodity prices show global recovery may be on the horizon

In a major shift in economic trends, prices of raw materials started surging in October, possibly signaling that emerging economies are finally regaining strength after going through a distinctly rough patch.

The shift may be behind the recent stock market rally and the jump in long-term interest rates in the U.S.

 While the surprise outcome of the U.S. presidential election triggered wild movement in stock, bond and currency markets, commodities have been mostly insulated from its impact.
 The CRB BLS Raw Industrial Sub-index, which traces the overall direction of commodity prices, took an upturn early this year after plunging until the end of 2015. The index, a measure of nearly two dozen basic commodities excluding precious metals and crude oil, then began soaring in late October.

Meanwhile, U.S. long-term interest rates shot up after Donald Trump’s unexpected win in last week’s presidential election.

The upswing in interest rates has been attributed by many to concerns over an increase in the U.S. budget deficit due to the president-elect’s campaign promises to both cut taxes and increase public spending.

While such concerns may very well be a factor contributing to higher long-term rates, they do not paint the entire picture. A “bad rise” in the cost of borrowing due to expectations of a government spending spree is not entirely consistent with the rally in the U.S. stock market.

Yields on 10-year treasurys appear to be following the CRB index. The main factor pushing up the CRB commodity prices yardstick is the apparent bottoming-out of key emerging economies.

In China, for instance, investment in electric machinery, publicservice, construction and other sectors is rebounding, shored up by massive government spending on infrastructure.

Overnight US Market :Dow zooms to close up 257 points.S&P 500 + 24 Points

U.S. stocks held up remarkably well and jumped Wednesday as the major indexes pared steep losses after markets careened out of control in volatile trading overnight after a speech by U.S. President Elect Donald Trump helped reassure investors after his upset win vs. Hillary Clintoncaught investors around the globe by surprise.

The Dow Jones industrial average ended up 257 points, or 1.4%, after tumbling as much as 800 points in late-night futures trading. The blue chips are now 46 points and a fraction from an all-time record closing high.

The broad Standard & Poor’s 500 stock index, which was down 5% overnight and hit a trading halt designed to limit losses, erased its steep declines and climbed 1.1%. The Nasdaq composite also gained 1.2%.

Theories on why the initial market backlash to Trump’s shocking win has given way to stock market gains are starting to roll out. U.K. firm Capital Economics cited a few key reasons:

•  The market reaction from Brexit in June, a sharp drop followed by a rebound set a precedent.

•  Trump’s “gracious” acceptance speech “encouraged hopes that he will moderate his more extreme positions.”

•  Despite a GOP sweep of the White House and Congress, checks and balances remain due to Trump’s differences with “fiscally conservative” Republicans.

•  The economic backdrop is “generally improving” and supportive of assets.

Trump wins US presidency in stunning upset

Donald Trump, the property developer known for his divisive rhetoric, has been elected US president in a shock outcome that has roiled global financial markets.

The Associated Press has called the 2016 election for Mr Trump, who is set to garner enough seats in the US Electoral College to pass the critical 270 mark and succeed Barack Obama.

The news represents a stark contrast to polls that had put former secretary of state Hillary Clinton well ahead, and suggested Mr Trump would have a tough path to securing enough support in the Electoral College.

The strong showing was a strong rebuke of the political establishment — something that echoed June’s Brexit vote in which UK citizen’s confounded pollsters by voting to divorce from the EU.

Global financials were rocked by the surprise results, with US stock-index futures pointing to heavy losses on Wednesday. The Mexican peso, which has become a favoured proxy for the election, plummeted more than 10 per cent.

The GOP also had a strong showing in Congressional races, where the AP projected the party to retain control in the House of Representatives. Republicans were also looking more likely to hold their grip on the Senate, repelling an attempt by Democrats that appeared to have good odds of succeeding.