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Phoenix Police And FBI On “High Alert” Ahead Of Trump Rally Tonight

August 22, 2017 Tyler Durden 0

There is no shortage of controversies surrounding Trump’s appearance tonight in Phoenix that could turn what is supposed to be a peaceful political rally into complete chaos.  With Trump’s reaction to the Charlottesville tragedy still fresh in the minds of political activists on the left, there are expected to be as many protesters outside the Phoenix Convention Center as there are inside watching the President’s speech. Sprinkle on top of that the fact that Trump could comment on a potential pardon of Sheriff Joe Arpaio and/or blast Arizona Senators John McCain and Jeff Flake and you have all the ingredients of another national disaster in the making.

As The Hill points out, the Phoenix Police Department has planned for “maximum staffing” during Trump’s visit and the FBI and DHS are also coordinating on the event.

Political leaders and law enforcement officials in Arizona are on high alert ahead of President Trump’s campaign rally Tuesday night in Phoenix.

 

The big question is whether there will be more supporters of Trump inside the Phoenix Convention Center, which holds 29,000, or protestors outside.

 

Phoenix Police Chief Jeri Williams said in a statement that her force will have “maximum staffing during the visit.”

 

The department is “working 24/7 with our partners to ensure all of our resources are in place,” Williams said.

 

Stanton said the city is committed to keeping everyone inside and outside the arena safe.

 

“The Phoenix police is always professional and the FBI and Department of Homeland Security have been great about coordinating with local law enforcement,” former Arizona GOP chairman Robert Graham told The Hill.

Meanwhile, Phoenix Police Chief Jeri Williams offered the following warning to protesters:

“There is a distinct difference between voicing your first amendment rights and committing unlawful acts.  As always, free speech will be supported but criminal conduct will be immediately addressed.”

 

Of course, racial tensions arising from Charlottesville are only part of what makes tonight’s rally a recipe for disaster.  Some fear that Trump could use the occassion to announce that he’ll pardon Maricopa County’s controversial former Sheriff, Joe Arpaio, who was found guilty of racially profiling hispanics and sentenced to jail time.

The president has mused publicly about pardoning controversial former Maricopa County Sheriff Joe Arpaio, an early Trump supporter who was found guilty of racially profiling Latinos. Arpaio, who was prosecuted and convicted of racial profiling by former President Obama’s Justice Department, is a well-known and controversial figure in Phoenix.

 

Democrats are warning that a public pardon at a campaign rally would stoke racial tensions at a time when the nation is on edge.

 

Stanton said a pardon would “enflame emotions and further divide our nation,” while Rep. Ruben Gallego (D-Ariz.) said Arpaio “shouldn’t be let off the hook for his crimes” just so Trump can win “some bonus points with his most racist supporters.”

 

But some Republicans in the state believe Arpaio was railroaded by the Obama Justice Department and are eager to see his name cleared.

 

Rep. Andy Biggs (R-Ariz.) released a statement on Monday calling Arpaio’s conviction “the culmination of a political witch hunt by the Obama administration to sideline and destroy a formidable opponent.”

 

“Sheriff Arpaio has been a faithful servant of this nation for over six decades,” Biggs said. “He should be allowed to live out the rest of his days in peace and confidence that his efforts were not in vain.”

Trump

 

And then there is Trump’s growing fued with Arizona Senator Jeff Flake whose book “Conscience of a Conservative,” which argues that Republicans must reclaim the soul of their party from Trump, apparently didn’t sit well with the White House.

Speculation is rampant among political operatives in Arizona about whether Trump will meddle in the state’s 2018 primary, where Flake has attracted a primary challenger in state Sen. Kelli Ward (R), who will attend the rally — though not as a guest of Trump’s.

 

The president has not made an endorsement in Flake’s race but has tweeted support for Ward, a former state senator who is not viewed as a credible challenger by many establishment Republicans.

 

A super PAC supporting Ward’s bid has received a $300,000 donation from conservative mega-donor Robert Mercer and several operatives from a pro-Trump outside group have peeled off to work for her.

Great to see that Dr. Kelli Ward is running against Flake Jeff Flake, who is WEAK on borders, crime and a non-factor in Senate. He’s toxic!

— Donald J. Trump (@realDonaldTrump) August 17, 2017

 

Finally, of course, we all know how Trump feels about John McCain who cast the deciding vote to kill the Obamacare repeal bill just before the August recess.

The fireworks are set to start at 7pm local time…

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More Peak Shale: World’s Largest Miner Is Selling Its Shale Assets

August 22, 2017 Tyler Durden 0

Over the past several months, we have wondered if despite new all time high shale production, whether the US shale sector in the has peaked. Some of our recent thoughts can be found in the following articles:

The “peak shale” narrative got a boost in late July when one of the world’s most bearish hedge funds, Horseman Global, announced it was aggressively shorting shale companies on the thesis that funding is about to “run dry”, resulting in a sharp drop in production and with the lack of capex, would lead to another round of industry defaults (while sending the price of oil higher).

More evidence was revealed in the latest Baker Hughes data, which showed that both active Horizontal and Permian oil rigs had finally peaked and were now declining, while the number of oil rigs funded by Public junk bond deals had plateaued, suggesting little interest in future funding:

Fast forward to today when overnight, we got the clearest indication yet that the US shale sector may have indeed have peaked, when BHP Billiton – the world’s largest miner – said it was in talks with potential buyers of its U.S. shale assets, purchased during a frenzied $20 billion buying spree in 2011, just as the price of oil peaked.

“We’re talking to many parties and we’re hopeful” of completing a small number of trade sales to divest the onshore oil and gas division, Chief Executive Officer Andrew Mackenzie told Bloomberg Television Tuesday in an interview, adding that the moves on shale and potash aren’t the result of shareholder pressure. “We have been moving in this direction for some time” on shale.

As Bloomberg adds, BHP’s strategic pull-back by comes after new Chairman Ken MacKenzie, who starts his job next month, met more than a hundred investors in recent weeks in Australia, the U.S. and the U.K. in the wake of the campaign by some shareholders calling for reform.

BHP’s admission that there is no more upside for its shale assets, in their current form, is a victory for Elliott Singer’s ongoing activist campaign, which has been pushing for a disposition of these assets in a vocal activist campaign. According to Singer’s Elliott Management, strategic missteps by BHP’s leadership, including in the shale unit, have destroyed $40 billion in value; Elliott launched its public campaign seeking a range of reforms in April.

Admitting that Elliott is right, during a call with analysts, CEO Mackenzie said BHP’s 2011 shale deals had been too costly, poorly timed and the eighth-largest producer in U.S. shale didn’t deliver the expected returns. That said, if the company expected oil prices to rebound, or if the shale assets to become sufficient productive where they would generate positive returns, he would hardly have sold them. Which is why in the current configuration of prices and technology, at least one major player in the space has confirmed that shale’s euphoric days may be over.

This was confirmed by Macquarie Wealth Management Division Director Martin Lakos who said that BHP likely concluded the shale and Jansen assets were “not going to generate the returns that is going to make the grade,” although he added that “it’s most likely the Elliott activity has accelerated the shale sales process.”

BHP’s disposition of shale has been a long time coming:

Discussions among BHP shareholders have been dominated by concerns over shale and potash, according to Craig Evans, a portfolio manager at Tribeca Investments Partners Pty, which holds the producer’s shares. Tribeca and other investors have also pressed the case with BHP directly, he said.

 

“Elliott put the first balls in motion on this in calling them to task,” Evans said. “It’s no coincidence that we’re talking about those issues now.”

 

Investors including AMP Capital, Schroders Plc, Escala Partners and Sydney-based Tribeca have added to criticism of BHP, or offered support for some of Elliott’s proposals, in recent weeks. Elliott didn’t immediately respond to a request for comment on BHP’s decisions on shale and potash

Some believe that BHP timed its asset sale at just the right time: “BHP are going to get better value than they would have two years ago after the surge in crude oil price from last year’s 12-year low,” David Lennox, an analyst at Fat Prophets, said on Bloomberg TV. The company has “probably picked an opportune time because we’ve seen the oil price come up from a bottom,” he said.

Of course, a much bigger question is whether the potential buyer will agree, as any acquiror will be purchasing not on current or historical prices, but where they expect oil prices to go in the future. As such, the big wildcard is shale’s access to cheap funding, which for the past 3 years has been the only factor that mattered not only for the US oil industry, but also for OPEC, whose repeated attempts to push the price of oil higher has been foiled every single time thanks to record low junk debt yields and an investor base that will oversubscribe every single shale offering. Well, as we showed last month, that is now ending as bond investors have suddenly turned quite skittish, and the result is that US shale production has not only peaked but is once again declining. While it remains to be seen how the overall industry will respond, if indeed we have hit “peak shale”, OPEC’s long awaited moment of redemption may finally be here.

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A 3% Drop Is All It Takes…

August 22, 2017 Tyler Durden 0

A 2.8% drop in stocks is all it takes…

…to convert sheer near full euphoria into outright panic

Source: CNNMoney

Quite a collapse in confidence for a ‘blip’ in stocks… (NOTE – this collapse in sentiment is bigger and faster than the plunge in Aug 2015 following China’s devaluation and the US flash crash)

 

At the same time, the ‘plunge’ in stocks has hammered BofAML’s Global Panic-Euphoria index out of ‘Euphoria’…

On a global basis, put-call ratios signal less euphoria than a month ago, and volatility has risen, taking Global Risk-love indicator from a protracted period in euphoria to barely inside the neutral zone.

With most of CNN’s Fear & Greed factors suddenly flashing “Extreme Fear”…

 

But there’s just one big caveat – almost 40% of the S&P 500 members are now trading below their 200-day moving-averages…

 

And that is what years of Central Bank conditioning does for investors’ risk appetites.

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Why billionaire investors like Warren Buffett are chasing after this energy investment

August 22, 2017 crude oil 0

The steady, reliable income from electricity transmission businesses is attractive to investors like Warren Buffett.

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Treasury Slaps Sanctions On China, Russia Entities And Individuals Over North Korea

August 22, 2017 Tyler Durden 0

In a move that is certain to infuriate China further and result in another deterioration in diplomatic relations between Washington and Beijing, moments ago the United States slapped both Chinese and Russian entities and individuals with new sanctions in the Trump administration’s escalating attempts to pressure North Korea to relent and stop its nuclear program and occasional missile launches.

The Treasury Department’s Office of Foreign Assets Control said it would target 10 entities and six individuals who help already sanctioned people who aid North Korea’s missile program or “deal in the North Korean energy trade.” The U.S. also aims to sanction people and groups that allow North Korean entities to access the U.S. financial system or helps its exportation of workers, according to the Treasury:

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated 10 entities and six individuals in response to North Korea’s ongoing development of weapons of mass destruction (WMD), violations of United Nations (UN) Security Council Resolutions, and attempted evasion of U.S. sanctions.  Today’s sanctions target third-country companies and individuals that (1) assist already-designated persons who support North Korea’s nuclear and ballistic missile programs, (2) deal in the North Korean energy trade, (3) facilitate its exportation of workers, and (4) enable sanctioned North Korean entities to access the U.S. and international financial systems

As a result of the latest action, “any property or interests in property of the designated persons in the possession or control of U.S. persons or within the United States must be blocked, and U.S. persons are generally prohibited from dealing with them.”

Speaking on today’s sanctions, Steven Mnuchin who, or rather whose wife today is in the news for an entirely different reason, made the following statement:

“Treasury will continue to increase pressure on North Korea by targeting those who support the advancement of nuclear and ballistic missile programs, and isolating them from the American financial system,” said Treasury Secretary Steven T. Mnuchin. 

 

“It is unacceptable for individuals and companies in China, Russia, and elsewhere to enable North Korea to generate income used to develop weapons of mass destruction and destabilize the region.  We are taking actions consistent with UN sanctions to show that there are consequences for defying sanctions and providing support to North Korea, and to deter this activity in the future.”

Among the companies sanctions in regards to North Korea’s “WMD program” are the following:

OFAC designated China-based Dandong Rich Earth Trading Co., Ltd. for its support to UN- and U.S.-designated Korea Kumsan Trading Corporation, an entity OFAC previously designated for being owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, the UN- and U.S.-designated General Bureau of Atomic Energy, which is responsible for North Korea’s nuclear program.  Dandong Rich Earth Trading Co., Ltd. has purchased vanadium ore from Korea Kumsan Trading Corporation.  UNSCR 2270 prohibits North Korea’s exports of vanadium ore, and requires member states like China to prohibit the procurement of vanadium ore from North Korea.

 

OFAC designated Gefest-M LLC and its director, Russian national Ruben Kirakosyan, for support to the UN- and U.S.-designated Korea Tangun Trading Corporation, also known as Korea Kuryonggang Trading Corporation, which is subordinate to the UN- and U.S.-designated Second Academy of Natural Sciences, an entity involved in North Korea’s WMD and missile programs.  Gefest-M LLC, a company based in Moscow, has been involved in the procurement of metals for Korea Tangun Trading Corporation’s Moscow office.

 

OFAC also designated China- and Hong Kong-based Mingzheng International Trading Limited (“Mingzheng”).  Mingzheng acts as a front company for UN- and U.S.-designated Foreign Trade Bank (FTB), and it has provided financial services to FTB by, among other things, conducting U.S.-dollar denominated transactions on behalf of FTB.  FTB is North Korea’s primary foreign exchange bank; it was designated by the United Nations on August 5, 2017 as part of UNSCR 2371.  OFAC designated FTB in 2013 for facilitating transactions on behalf of North Korea’s proliferation network, including for UN- and U.S.-designated Korea Mining Development Corporation and Korea Kwangson Banking Corporation.  On June 29, 2017, OFAC designated Mingzheng’s owner, Sun Wei.

The Treasury also designated three Chinese coal companies collectively responsible for importing nearly half a billion dollars’ worth of North Korean coal between 2013 and 2016.  Dandong Zhicheng Metallic Materials Co., Ltd. (“Zhicheng”), JinHou International Holding Co., Ltd., and Dandong Tianfu Trade Co., Ltd. have sold, supplied, transferred, or purchased coal or metal, directly or indirectly, from North Korea, and the revenue may have benefitted the nuclear or ballistic missile programs of the Government of North Korea or the Workers’ Party of Korea.  JinHou International Holding Co., Ltd. and Dandong Tianfu Trade Co., Ltd. also were designated for operating in the mining industry in the North Korean economy.

Meanwhile, top U.S. officials have said they do not want to take military action against North Korea unless it is a last resort, and as a result getting China to cooperate is seen as a key part of a diplomatic solution.

Of course, what this latest round of sanctions will achieve, is to further anger Beijing and the local population, in the process making a diplomatic solution even more unlikely and “forcing” America’s ruling Generals, Kelly and McMaster to launch the first “preemptive” shot against Pyongyang.

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Venezuela’s Grim Reaper – A Weekly Report

August 22, 2017 Steve H. Hanke 0

Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

The Grim Reaper has taken his scythe to the Venezuelan bolivar. The death of the bolivar is depicted in the following chart. A bolivar is worthless, and with its collapse, Venezuela is witnessing the world’s worst inflation. 

As the bolivar collapsed and inflation accelerated, the Banco Central de Venezuela (BCV) became an unreliable source of inflation data. Indeed, from December 2014 until January 2016, the BCV did not report inflation statistics. Then, the BCV pulled a rabbit out of its hat in January 2016 and reported a phony annual inflation rate for the third quarter of 2015. So, the last official inflation data by the BCV is almost two years old. To remedy this problem, the Johns Hopkins – Cato Institute Troubled Currencies Project, which I direct, began to measure inflation in 2013. 

The most important price in an economy is the exchange rate between the local currency and the world’s reserve currency — the U.S. dollar. As long as there is an active black market (read: free market) for currency and the black market data are available, changes in the black market exchange rate can be reliably transformed into accurate estimates of countrywide inflation rates. The economic principle of Purchasing Power Parity (PPP) allows for this transformation.

I compute the implied annual inflation rate on a daily basis by using PPP to translate changes in the VEF/USD exchange rate into an annual inflation rate. The chart below shows the course of that annual rate, which peaked at 1823% (yr/yr) in early August 2017. At present, Venezuela’s annual inflation rate is 1538%, the highest in the world (see the chart below).

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