Brexit negotiations are going nowhere and both sides cannot agree. The central bankers will do everything to stop the UK from exiting the EU. Spending has declined. Amazon is not as strong in the retail market as everyone believes. Rents are falling and pending homes sales decline. We are now seeing a triple whammy in housing. Banks are preparing to use the blockchain technology to move currency around, this is the first step to convince the world that the banks need to be in control of this. DHS warned Charlottesville ahead of time and the mayor did not heed this warnings. US release 500,000 gallons of oil from its reserves because of the hurricane. The Pentagon is changing the troop count in and now we are going to find out there are a lot more troops overseas. US bombed on the border of NK to provoke them further. Iraq restores flights with Russia. The Syrian now has control over the routes to Deir-Ezor and Assad says the funding to the paid mercenaries is drying up. Martin Armstrong is predicting a major event this fall.
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Current News – 08.31.2017
- The third round of Brexit talks, which come to a close on Thursday, have been marked by insults and acrimony between the two negotiating sides.
- The EU has accused Britain of being ill-prepared, ambiguous in its position, and not taking negotiations seriously, while the UK has warned it could simply walk away if the EU does not show some flexibility.
- From the outside, talks appear deadlocked, with the UK and EU failing to make progress in any of the key areas.
- Juncker said there were still an “enormous” number of issues to be settled. He says the bloc had received “no definitive response” on the Ireland issue, citizens’ rights, or the divorce bill.
- Following June’s MoM decline in incomes, Americans saw a modest 0.4% bounce in July (better than expected). However, their spending grew less than expected (up 0.3% MoM vs 0.4% expectations).
- However, real personal spending rose just 0.2% MoM in July (below expectations).
- This sent the US personal savings rate down to just 3.5%, the lowest since December 2016.
- Amazon.com Inc., far from dominating the retail sector, is actually the weakest of the big U.S. players based on operating results, Moody’s Investors Service said Wednesday.
- The e-commerce giant is the subject of a number of myths regarding its size and clout that mask the reality of its position compared with rivals like Wal-Mart Stores Inc. WMT, -0.57% and Costco Wholesale Corp. COST, +1.57% , according to Charlie O’Shea, Moody’s vice president a
- Amazon’s stock AMZN, +1.27% has outperformed rivals, but it’s mostly based on the company’s growth story, and particularly the success of its cloud business, Amazon Web Services, O’Shea wrote in a new report.
- The perception that Amazon is poised to take over the grocery business via its acquisition of Whole Foods, which closed this week, is another myth, said O’Shea.
- “Online sales still account for only about 10% of overall U.S. retail sales, with a much lower percentage in the grocery segment, leaving the big brick-and-mortar retailers, led by Walmart, still really formidable competitors in the industry,” he wrote.
- Following Chicago PMI’s collapse in July, August failed to provde any bounce in the soft survey data, printing unchanged at 58.9 (July was revised slightly higher).
- The Employment indicator slipped for the third consecutive month in August,
- An inconvenient math for housing is beginning to dog Chicago: The third largest city in the US has been losing population for years. Not huge numbers, but it adds up… In 2016, according to the Census estimate, the population dropped by about 9,000 people. Since 2014, the population has dropped by about 14,000 people. Chicago’s fiscal woes, junk credit rating, and the threat of bankruptcy hanging over it don’t help.
- According to Zumper’s National Rent Report for August, the median asking rent in Chicago dropped by 13.7% year-over-year to $1,510 for a one-bedroom apartment, and by 15.7% to $2,200 for a two-bedroom. From their peaks in late 2015, asking rents have plunged 26% and 17% respectively.
- In New York City, the median asking rent for a one-bedroom dropped 8.9% year-over-year to $2,850. For two-bedrooms, it dropped 8.3%. Measured from the peak in March 2016, asking rents — not including incentives — have plunged 15% and 20%.
- Oakland, which received the San Francisco housing refugees, median one-bedroom and two-bedroom rents plunged 16% and 14% from their peak.
- And Honolulu, with an 18% and 23% plunge from the peak, nearly rivaling Chicago.
- Following a plunge in existing home sales and new home sales, pending home sales slumped in July, dropping 0.8% MoM (missing expectations of a 0.3% rise). This completes the triple whammy of misses and drops for July’s housing data…
- The world’s biggest banks aren’t immune from cryptocurrency euphoria, with a range of projects underway to explore how traditional financial firms can benefit from the innovation. Swiss banking giant UBS and 10 other companies say that they plan to use the technical idea behind bitcoin—a distributed ledger called a blockchain—for their own digital currency (paywall). This could show the way for the world’s biggest central banks to do the same.
- Banks like Barclays and HSBC are the latest to join the “utility settlement coin” project, started by UBS and Clearmatics
- the UBS group is looking to come up with something that is cheaper, and more reliable than existing systems. Each settlement coin would represent fiat currency like euros and dollars on a one-to-one basis, and would thus be 100% backed by collateral at the domestic central bank, according to UBS. The idea is that exchanging the digital currency as payment for assets will be a more efficient means of exchange.
- Governor Terry McAuliffe’s efforts to evade responsibility for the shocking violence at Charlottesville just got even more implausible. He and local authorities were warned, and yet allowed, if not forced, the two violence-prone parties into such close proximity that violence was a near certainty.Josh Meyer reports in Politico:
The Department of Homeland Security issued a confidential warning to law enforcement authorities three days before the deadly Aug. 12 Charlottesville protest rally, saying that an escalating series of clashes had created a powder keg that would likely make the event “among the most violent to date” between white supremacists and anarchists.
- The warning issued to state and city officials was clear that the violence in Charlottesville would come, as President Trump was widely criticized for saying, from “both sides.” As quoted by Politico, the DHS assessment issued three days ahead of the Charlottesville incident read, “Anarchist extremists and white supremacist extremists online are calling on supporters to be prepared for or to instigate violence at the 12 August rally.”This raises more serious questions about the culpability of Charlottesville and Virginia public officials, who appear to be engaged in a game of semantics about whether a “stand down” order was issued to police that day, leading to escalation of the violence between left-wing Antifa and neo-Nazis.
- The U.S. Energy Department announced on Thursday that it would release 500,000 barrels of crude oil from the US Strategic Petroleum Reserve as a result of the disruption to the US petroleum industry following Hurricane Harvey amid fears of a surge in motor fuel prices, which have been compounded by the previously reported shuttering of the Colonial pipeline. According to the DOE statement, the oil will be delivered to the Phillips 66 refinery in Lake Charles, Louisiana, a plant which has not been affected by the storm.
- According to Reuters, the release – the first emergency release from the reserve since 2012 – will include 200,000 barrels of sweet crude and 300,000 barrels of sour crude oil. It was an exchange agreement, meaning the government will loan crude to Phillips 66, which is required to replace the reserve’s oil at a later date.
- The 603,000 barrel per day (bpd) Port Arthur Refinery was shut on Wednesday due to flooding from Tropical Storm Harvey.
- It’s not the deployed force that changed, but rather the Pentagon’s method of calculating and reporting its size.Previously, U.S. officials had used an ambiguous metric called “force management level,” which was often thousands of troops lower than the actual numbers deployed. That was an attempt to rotate various units into the war zone and yet keep the total number of troops below caps set by the Obama administration and retained for seven months by the Trump White House.
- Following North Korea’s firing a ballistic missile across Japan overnight, China has warned that tensions on the Korean peninsula have reacha “tipping point” and urged all sides to avoid provocations.
- repeated Beijing’s call for the North to suspend missile tests in return for a halt to US-South Korean military exercises.
- The situation is “now at a tipping point approaching a crisis. At the same time there is an opportunity to reopen peace talks,” Hua told a regular news briefing. United States and South Korea “held one round after another of joint military exercises and they exerted military pressure on the DPRK (North Korea)”.
- China has backed the sanctions but also called for peace talks, but as Russia explains, sanctions pressure appears exhausted.
- A day after President Donald Trump finally broke his silence on North Korea after the isolated nation twice provoked its geopolitical adversaries in the span of just four days, Yonhap is reporting that the US sent four F-35B stealth jets and two nuclear-capable B-1B strategic bombers to train with South Korea’s F-15K fighter jets over the Korean Peninsula on Thursday in what it described as an “unprecedented” escalation of the allies’ military response to N.Korea’s provocations.
- Thursday’s air-to-ground precision-strike drills were conducted a mock bombing drill, which simulated a surgical strike of key enemy facilities, over the Pilsung Range in the eastern province of Gangwon.The “unprecedented” combined maneuver involved the F-35Bs from Japan and the long-range bombers based in Guam as well as a squadron of four F-15Ks, Yonhap said.They used and GBU-32 bombs, according to Yonhap. In a statement, US Pacific Command said the flyover was a “direct response to North Korea’s intermediate range ballistic missile launch.” “
- The Iraqi Airways company plans to launch regular flights between Baghdad and Moscow in September 2017, restoring air service after a 13-year break,
- “After a 13-year break, Iraq’s national carrier, the Iraqi Airways, plans to launch regular flights between Baghdad and Moscow in September 2017,
- Update: Russia’s response was quick:
- LAVROV TELLS TILLERSON HE REGRETS ESCALATION OF TENSIONS
- LAVROV: RUSSIA TO STUDY U.S. MEASURES AGAINST CONSULATES: RIA
- Exactly one month after Vladimir Putin ordered the expulsion of 755 US diplomats from Russia, as well as the seizure of two diplomatic compounds used by the US in Russia on July 31, moments ago the US State Department announced that “in the spirit of parity invoked by the Russians”, the US has ordered the Russian government to close its San Francisco consulate, a chancery annex in Washington and a consular annex in New York City.
- The State Department explains that “with this action both countries will remain with three consulates each.”
- And, in the spirit of “generosity”, the US added that “while there will continue to be a disparity in the number of diplomatic and consular annexes, we have chosen to allow the Russian Government to maintain some of its annexes in an effort to arrest the downward spiral in our relationship.”
- the Syrian Army has officially entered the administrative borders of Deir Ezzor.
- According to an informed military source, the government troops imposed full control over the strategic Bishiri mountain located to the west of Deir Ezzor city.
- The Pentagon announced Wednesday that it would start taking into account temporarily deployed military units when reporting troop numbers in Afghanistan, with updated numbers for Iraq and Syria to follow.
- Syrian President Bashar Assad said that victories of the Syrian army and its allies over terrorists have resulted in several states giving up their support for “terrorists” in the country.”Several countries have changed their positions in relation to the victories of the Syrian Army and its allies. Most importantly, several countries have taken measures aiming to suppress the financing of terrorists remaining in Syria,” Assad at a meeting with Iranian Deputy Foreign Minister Hossein Jaberi Ansari, as quoted by the presidential press service.
- According to cyclical forecaster Martin Armstrong, who has accurately predicted global crisis scenarios since the 1970’s, September may well be the month that propels the world into its next great conflict:
- Our models seem to be right on target for the escalation of military threats from North Korea. We gave our two targets for the opening of this window for a conflict on our war model with North Korea to watch were August 12/13, 2017 and September 11/12, 2017. We must be on guard for this is the prime period where a confrontation could emerge.