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Sat, 25th February 2017

Anirudh Sethi Report

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Archives of “Washington” Tag

White House Bars CNN, NYT, Others From Media Briefing

Just a few hours after Trump warned during his CPAC speech that “we’re gonna do something about the media”, he did just that after the White House barred a number of news outlets from covering Sean Spicer’s Q&A session on Friday afternoon.  Spicer decided to hold an off-camera “gaggle” with reporters inside his West Wing office instead of the traditional on-camera briefing in the James S. Brady Press Briefing Room according to press reports. 

Among the outlets not permitted to cover the gaggle were various news organizations that Trump has singled out in the past including CNN, The NYT, The Hill, Politico, BuzzFeed, the Daily Mail, BBC, the Los Angeles Times and the New York Daily News.

Several non mainstream outlets were allowed into Spicer’s office, including Breitbart, the Washington Times and One America News Network.  Several other major news organizations were also let in to cover the gaggle. That group included ABC, CBS, NBC, Fox, Reuters and Bloomberg, however AP and Time have boycotted the event.

The White House Correspondents’ Association sharply criticized the decision.

“The WHCA board is protesting strongly against how today’s gaggle is being handled by the White House,” Jeff Mason, the association’s president, said in a statement.  “We encourage the organizations that were allowed in to share the material with others in the press corps who were not,” he added. “The board will be discussing this further with White House staff.”

Traders Throw In The Towel On March Rate Hike

As we previously noted, while speculatrs had been reducing their shorts in Treasury futures, they had added to Eurodollar shorts – pushing their bets on Fed rate hikes to record highs. However, as Bloomberg notes, signals are starting to emerge that traders who built up that heavy short, or hawkish, eurodollar base since the start of 2016 could be starting to throw in the towel on a March Fed rate hike.

CME confirmed that Wednesday saw record volume in fed fund futures of 658.7k contracts, beating the previous record of 613k on Nov. 9, the day after the U.S. presidential election. Over the course of Wednesday’s session, a total of 283k Apr fed funds futures contracts traded, largest single-day volume seen in the contract. Open interest in the contract rose by 109k, suggesting some short covering before the minutes and potential new longs after the minutes.

Greek unemployment sticks at 23% amid escalating bailout row

Still no respite for Greece.

Amid a fresh escalation in a row over its bailout conditions, Greece’s stubbornly high unemployment rate is showing no sign of improvement.

The country’s jobless rate – which is the highest in the eurozone and has been above 20 per cent for six years – stuck at 23 per cent in November despite a general uptick in its economic prospects at the end of 2016.

The IMF has been accused by Athens and Brussels of an “overly pessimistic” view on the Syriza government’s ability to hit a 3.5 per cent budget surplus target over the next decade, which has led it to a wrong-headed forecast on Greece’s “explosive” debt dynamics.

The Fund’s latest report on the Greek economy suggest its debt-to-GDP mountain could reach 275 per cent over the next two decades without major debt restructuring. Unemployment meanwhile will only fall to 21.7 per cent this year, while the country’s long-term growth rate was downgraded to 1 per cent, IMF economists predict.

US Government’s 2016 Net Loss “More Than Doubled” To $1 Trillion

Just like Apple or Exxon, the government’s annual report contains several important financial statements and detailed commentary about their finances and operations.

But unlike Apple, Exxon, the government can’t manage to turn a profit. Ever.

According to this year’s report, the government’s net loss “more than doubled, increasing $533.2 billion (103.7%) during [Fiscal Year] 2016 to $1.0 trillion.”

It’s extraordinary that they lost $533 billion in 2015, let alone a full trillion in 2016.

Bear in mind, there was no major wars, recessions, or crises to fight.

What did you really receive in exchange for that trillion-dollar loss?

Brand new highway system? Giant tax rebate?

Nope. None of the above.

The sad reality is that it now costs the government so much to run itself, along with paying massive interest on the debt and supporting all of its entitlement obligations, that they lose $1 trillion even in a “normal” year.

What will happen in a bad year?

Then there’s the issue of the government’s “net worth”.

After adding up all of its assets (like tanks, aircraft carriers, government buildings, etc.) and subtracting liabilities (the national debt), the government’s “net worth” was MINUS $19.3 trillion at the close of the 2016 fiscal year.

That’s worse than 2015’s NEGATIVE $18.2 trillion, which was worse than 2014’s NEGATIVE $17.7 trillion, which was worse than 2013’s NEGATIVE $16.9 trillion.

The US federal government is insolvent, plain and simple.

This isn’t some wild conspiracy theory. It is a statement of fact based on publicly available data published by the US government itself.

It’s concerning that the government of the largest economy in the world is bankrupt.

But it’s even more concerning that more people aren’t concerned.

Naturally most of us have been programmed to believe for decades that the US government is rich and always pays its obligations.

This is a dangerous fantasy.

Yes, the government has been able to continually destroy its finances for years without consequence.

And for that accomplishment they should be awarded some special Nobel Prize in Ponzi Schemes.

But history is packed with examples of once-dominant empires who eventually declined under the weight of their unsustainable finances, from the French monarchy to ancient Rome.

Are we really supposed to believe that this time is any different?

Are we really supposed to believe that the US government can continue to indefinitely lose $1 trillion dollars per year without consequence?

Sure, it’s great to hope for the best. And maybe, just maybe, they manage to fix everything.

But it would be dangerous to bet everything you’ve ever earned or plan to achieve on such an unreasonable expectation.

When nations go broke, there are consequences. Simple.

Overnight US Market :Dow closed -19 points.

Energy companies led U.S. stock indexes lower Monday as the price of crude oil declined. Phone company and materials stocks were also among the big decliners. Investors were weighing the latest batch of company earnings news.

The Dow Jones industrial average fell 19.04 points, or 0.1%, to 20,052. The Standard & Poor’s 500 index fell 4.86 points, or 0.2%, to 2293, as the broad-based index snapped a three-day winning streak. The Nasdaq composite index fell 3.21, or 0.1%, to 5664, as the tech-heavy index pulled back from Friday’s record closing high.

Benchmark U.S. crude fell 82 cents, or 1.5%, to close at $53.01 a barrel in New York. Brent crude, used to price international oils, lost $1.09, or 1.9%, to $55.72 a barrel in London.

Several energy companies were trading lower. Devon Energy slid 3.2%, while Chesapeake Energy dropped 3%. Marathon Oil shed 4.1%.

The 10-year Treasury yield fell to 2.42% from 2.47% late Friday.

Investors are still cautious as Trump’s early acts as president have been shaping markets for the past couple of weeks. On Friday, Trump directed the Treasury Secretary to look for potential changes to the Dodd-Frank law, which reshaped financial regulations after the 2008-09 financial crisis. Investors applauded that move but remain uncertain about the future impact of other policies. Over the weekend, the U.S. immigration ban on refugees and travelers from seven Muslim-majority countries was blocked by a federal judge and an appeals court turned down a Justice Department request to set that judgment aside. The White House said it expects the courts to restore executive order, which was founded on a claim of national security.

US court refuses to immediately restore Trump travel ban

A U.S. appeal court late on Saturday denied a request from the U.S. Department of Justice to immediately restore a immigration order from President Donald Trump barring citizens from seven mainly Muslim countries and temporarily banning refugees.

The court ruling dealt a further setback to Trump, who has denounced the judge in the state of Washington who blocked his executive order on Friday. In tweets and comments to reporters, the president has insisted he will get the ban reinstated.

 Trump says the temporary immigration restrictions on citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen, and on all refugees, are necessary to protect the United States from Islamist militants. Critics say they are unjustified and discriminatory.

The judge’s order and the appeal ruling have created what may be a short-lived opportunity for travelers from the seven affected countries to get into the United States while the legal uncertainty continues.

In a brief order, the appeals court said the government’s request for an immediate administrative stay on the Washington judge’s decision had been denied. It was awaiting further submissions from Washington and Minnesota states on Sunday, and from the government on Monday.

The government’s appeal says the decision by judge James Robart in Washington poses an immediate harm to the public, thwarts enforcement of an executive order and “second-guesses the president’s national security judgment about the quantum of risk posed by the admission of certain classes of (non-citizens) and the best means of minimizing that risk”.

Trump denounced the “so-called” judge in a series of tweets on Saturday and told reporters: “We’ll win. For the safety of the country, we’ll win.”

IRAQI FAMILY

The president’s Jan. 27 order has drawn criticism even from U.S. allies and created chaos for thousands of people who have, in some cases, spent years seeking asylum in the United States.

Iraqi Fuad Sharef, together with his wife and three children, spent two years obtaining U.S. visas, and had packed up to move to America last week, but were turned back to Iraq after a failed attempt to board a U.S.-bound flight from Cairo.

US Plans To Impose Additional Iran Sanctions As Early As Friday; Would Not Violate Nuclear Deal

According to Reuters, the United States is expected to impose sanctions on multiple Iranian entities as early as Friday following Tehran’s recent ballistic missile test, but in a way that will not violate the 2015 Iran nuclear deal, sources familiar with the matter said on Thursday.

One source, who spoke on condition of anonymity, said about eight Iranian entities were to be sanctioned, or “designated” in U.S. legal jargon, for terrorism-related activities and about 17 for ballistic missile-related activities under separate existing U.S. executive orders. The source declined to name the entities.

While we await more details, the fact that the Trump administration is in no hurry to scrap Obama’s Nuclear Deal is likely a suggestion that this particular draconian step will not be taken in the near future, if at all, and thus a potential major risk factor for higher oil prices can be eliminated for the time being.

Abe, Trump agree to hold meeting on Feb. 10

Japanese Prime Minister Shinzo Abe and U.S. President Donald Trump agreed on Saturday to hold a summit in Washington on Feb. 10.

It will be their first meeting since Trump assumed the presidency.

 The two spoke on Saturday by phone.

Afterward, Abe told reporters that he and Trump “confirmed the importance of the Japan-U.S. alliance in light of economic and security challenges facing the countries.”

He also said that during the planned February meeting, he “wants to have a candid and productive exchange of opinions on economic and security issues as a whole” with Trump.

When they get together, Abe plans to confirm that Trump will stick to the current policy that the Senkaku Islands in Okinawa Prefecture fall under Article 5 of the Japan-U.S. security treaty, which defines the U.S.’s defense commitment to Japan.

Abe looks to obtain assurance that the U.S. will continue to concern itself with security in the Asia-Pacific region by first discussing the handling of the Senkaku issue.

China also claims the islands.

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.