Supreme Court rejects insider trading appeal brought by SAC’s Martoma

WASHINGTON ( ) – The U.S. Supreme Court on Monday rejected an appeal by Mathew Martoma, a former portfolio manager for billionaire Steven A. Cohen, challenging a conviction for insider trading.

The Supreme Court left in place a June 2018 ruling by the New York-based 2nd U.S. Circuit Court of Appeals, which found there was enough evidence to establish Martoma’s guilt despite defective jury instructions in the trial. Martoma had worked at the CR Intrinsic Investors unit of Cohen’s SAC Capital Advisors LP.

At issue in the appeal was whether the prosecution must prove insider trading by showing that the individual who supplied a tip sought personal gain or intended to confer a benefit to someone else.

The 2nd Circuit had upheld Martoma’s conviction and nine-year prison term in August 2017, but上海水疗 in a modified ruling almost a year later withdrew its prior finding that the jury instructions were “not obviously erroneous.”

The appeals court decided that the instructions wrongly allowed a conviction solely on evidence that a Michigan doctor had tipped Martoma about a Alzheimer’s drug trial to maintain a friendship, rather than to offer a benefit or further a “quid pro quo” relationship – something done in exchange for something else.

Martoma was convicted in February 2014 for making $275 million of illegal gains in Elan Corp and Wyeth. Now called Point72 Asset Management LP, SAC pleaded guilty to fraud and paid $1.8 billion in U.S. criminal and civil settlements. Cohen was not criminally charged.

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Trump nixes Abrams for No. 2 State Department job: sources

WASHINGTON ( ) – U.S. President Donald Trump has nixed Elliott Abrams for the No. 2 position at the State Department after learning that the Republican foreign policy veteran had criticized him during the 2016 election campaign, people familiar with the matter said on Friday.

Trump decided not to nominate Abrams, who had been the leading candidate for deputy secretary of state, after meeting him at the White House on Tuesday along with Secretary of State Rex Tillerson, two sources told .

Abrams, 69, who served in foreign policy roles for presidents Ronald Reagan and George W. Bush, was Tillerson’s pick for the job, and the administration’s newly installed top diplomat tried and failed to convince the president to reconsider and offer him the job, one of the sources said.

Trump’s resistance to hiring his former Republican critics has slowed his ability to fill positions in his administration, especially in the foreign policy and national security areas.

The leaves former diplomat Paula Dobriansky as a potential choice for the position. She has been on Trump’s short list, an official said.

While Abrams did not sign either of two highly publicized letters from members of the Republican foreign policy establishment during the campaign pledging not to back Trump, he did criticize him both in his writings and media interviews during the presidential primaries.

Abrams, 69, a neoconservative who has long advocated an activist U.S. role in the world, last 上海水磨会所served in government in the Bush White House, first as a Middle East expert on the National Security Council and later as a global democracy strategy adviser.

He was assistant secretary of state during the Reagan administration and was convicted in 1991 on two misdemeanor counts of withholding information from Congress during the Iran-Contra scandal. He was later pardoned by President George H.W. Bush.

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Pick your poison: For Fed, it’s higher inflation or an inevitable return to quantitative easing

WASHINGTON ( ) – The Great Recession ended a decade ago this month, but for the U.S. Federal Reserve the fallout has posed an era-defining choice: Either jolt Americans to expect higher inflation, or keep the printing press ready for the next economic slide.

That politically fraught decision is the focus of a conference in Chicago this week to debate the risks and merits of two controversial strategies for thwarting a future downturn.

One is a hard sell: Convincing elected officials and households that higher prices today 上海水磨会所could produce more stable employment in the future.

The other would leave the Fed’s current approach to inflation intact but means the next recession will likely require the bondbuying and unconventional strategies used to combat the last one, with less certain results and a political cost for the Fed.

“They are facing two potential outcomes, both of which are difficult,” said Adam Posen, head of the Peterson Institute for International Economics and a moderator of one of the panels in Chicago. “The politically, but not economically, difficult one is that they manage to overshoot on inflation.”

“The bigger concern is that we go into the next recession and we don’t have ammo, you cut rates to zero and you do quantitative easing,” Posen said. “That is the nightmare.”


The Chicago conference is the central event in a yearlong series of meetings and research panels convened by Fed Chair Jerome Powell, who said he wanted to take advantage of a growing economy to review how the Fed tries to meet its twin goals of maximum employment and stable prices.

It is cast in technical terms as a review of the Fed’s operating “framework,” featuring many of the A-list economists and policy experts who often contribute to major Fed events.

Attention has centered on whether the Fed should make its 2% inflation target a goal to be reached on average.

That would mean tolerating higher inflation for long enough to offset years of weak price increases, leaving interest rates lower than might otherwise be the case and, as a benefit, keeping unemployment lower as well.

Effectively, it is an effort to refine work begun more than a decade ago under former Fed chair Ben Bernanke, who advocated monetary policy worked best if central banks publicly committed to a specific inflation target. That commitment, if backed by consistent policymaking, would shape public expectations and choices and help produce the desired level of inflation.

That led the Bernanke Fed in 2012 to adopt “flexible inflation targeting” with a formal inflation goal of 2%.


The years since have not been kind to Bernanke’s framework.

Inflation, growth and interest rates have been stuck in low gear, a “new normal” that defied policymakers’ forecasts for inflation to pick up following their stimulative efforts, particularly buying trillions of dollars in bonds.

The Fed’s policy rate has been mired as well, currently in a range of 2.25% to 2.5% and unlikely to go higher. That is below historical averages, leaving the Fed less room to bolster the economy by cutting rates before it hits the zero lower bound and has to trot out the bond purchases and other tactics used to fight the 2007-2009 recession.

The aim of an inflation “make-up” strategy, considered risky and untested among the world’s major economies, would be to shock inflation expectations higher, yielding the full benefits Bernanke had anticipated.

To some, it’s an effort to better implement something the Fed could already do, if it took its current 2% goal more seriously.

Under Bernanke, some officials worried that if the Fed specified an inflation goal without defining “maximum employment,” their bias would be to keep inflation in check and inevitably below target. The language agreed to then was meant to create what officials called a “big tent,” attractive to policymakers worried about high inflation and those worried about high unemployment, allowing for a consensus.

It may have been too big.

“The issue really is that the Fed has not pursued its target with the aggressiveness one might want to see,” said former Minneapolis Fed President Narayana Kocherlakota, who dissented against rate hikes at some of his last meetings because there was no apparent inflation pressure.


Indeed the last two years have pushed even the most inflation-conscious officials toward a rethink.

Unemployment has fallen far further than policymakers expected without signs of rising prices, evidence that some basic dynamics in the economy have shifted.

To some, including Fed Vice Chairman Richard Clarida, that suggests the Fed could perhaps lean more heavily toward its maximum employment goal with less fear of inflation rising.

Two of the seven Chicago panels will examine what maximum employment means, a possible sign the Fed may acknowledge much higher levels of employment may now be possible before inflation kicks in.

Related CoverageExplainer: The Fed wants ideas on how to target inflation

Any decision will likely come next year, possibly in January when the Fed releases its annual statement of longer-run goals and strategy.

“This is not a purely intellectual exercise,” said Dartmouth economics professor and former Fed adviser Andrew Levin. “The Fed should not be satisfied with how things went the last 10 years.”

“It was a long, slow painful recovery. To the extent that was tough for a lot of American families you should not be complacent that you can do the same thing again.”

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Trump’s new security advisor differs from him on Russia, other key issues

WASHINGTON ( ) – U.S. President Donald Trump has shown little patience for dissent, but that trait is likely to be tested by his new national security adviser, Army Lieutenant General H.R. McMaster.

McMaster is joining the White House staff with views on Russia, counterterrorism, strengthening the military and other major security issues that diverge not only from those of the Trump loyalists, but also from those the president himself has expressed.

A military intellectual whose ideas have been shaped more by experience than by emotion, more by practice than by politics, and more by intellect than by impulse may also find himself in political terrain that may be as alien, and perhaps as hostile, to him as the sands and cities of Afghanistan and Iraq were.

McMaster will not be alone, however. His prominent administration allies include Defense Secretary Jim Mattis; Marine General Joseph Dunford, the chairman of the Joint Chiefs of Staff; and Senator John McCain, chairman of the Senate Armed Services Committee; as well as many of the soldiers who have served with him.

White House press secretary Sean Spicer said on Tuesday that Trump told McMaster “he’s got full authority to structure the national security team the way he wants.”

Trump, however, already has taken the unusual step of adding Steve Bannon, his chief strategic adviser known for right-wing ideological views, to the White House National Security Council.

“The real potential for flashpoints is with some of the people that Steve Bannon has brought into the administration … people who see things very ideologically,” said Andrew Exum, a former Army officer and Defense Department Mideast policy official and McMaster friend for more than a decade.

Trump’s early missteps on immigration and other issues “have strengthened the leverage available to not only H.R. McMaster, but also Defense Secretary Mattis and Secretary (of State Rex) Tillerson potentially,” Exum said.

One of the first tests of McMaster’s influence will be the administration’s review of U.S. policy in Syria, and more broadly against Islamic militancy. The review’s results are due early next week, Pentagon officials said on Tuesday.

Bannon said last June that the United States and its European allies are fighting a “global existential war” against Islam.

McMaster’s approach to defeating Sunni Muslim militants has been more nuanced, resting largely on separating extremists from the vast majority of the local population.As commander of the Army’s 3rd Armored Cavalry Regiment, then-Colonel McMaster prepared his troopers for retaking the city of Tal Afar on the Iraqi-Syrian border in 2005 by having some of them dress in traditional Arab dishdashas, recruiting Arab-Americans to play the part of locals, and teaching his troops how to determine if a household was Sunni or Shiite by looking at the pictures hung on the walls.McMaster ordered his soldiers never to call the Iraqis they encountered “hajjis,” which many Americans used as a derogatory term for the Muslim pilgrimage to Mecca.

Writing in the journal Military Review, he warned that emphasizing force, as Trump has done in his vows to b上海水磨omb Islamic State into oblivion, could backfire.”In Iraq, an inadequate understanding of tribal, ethnic, and religious drivers of conflict … sometimes led to military operations (such as raids against suspected enemy networks) that exacerbated fears or offended the sense of honor of populations in ways that strengthened the insurgency,” he wrote.

That is not to say McMaster is a shaved-headed intellectual hesitant to use force. Twenty-one of his troopers were killed in action in Tal Afar, and one unit suffered 40 percent casualties.


A second early test for McMaster will be Russia policy.

Unlike his predecessor, Michael Flynn, and Trump himself, McMaster regards Moscow as an adversary rather than a potential partner.Last May, at the Center for Strategic and International Studies think tank, McMaster cited Russia’s annexation of Crimea and support for rebels in eastern Ukraine as evidence of a broader effort “to collapse the post-World War Two, certainly the post-Cold War, security, economic, and political order in Europe and replace that order with something that is more sympathetic to Russian interests.”A third area where McMaster’s thinking differs from the president’s rhetoric is the size and shape of the U.S. military.

Trump has promised to add tens of thousands more soldiers, expand the Navy to 350 ships from 282, and “provide the Air Force with the 1,200 fighter aircraft they need,” according to his campaign website.In his scholarly 2015 Military Review article, which has 39 footnotes, including one citing Greek historian Thucydides’ account of the Peloponnesian War, McMaster argued that “promising victory delivered rapidly from stand-off range, based on even better surveillance, intelligence, information, and precision strike capabilities” is a fallacy that “confuses targeting enemy organizations with strategy.”The question now is whether McMaster’s views will have sufficient force to alter the course of U.S. policy set by the president and his closest aides.

“The real challenges he’s going to confront, I think, are not the challenges of strategy and the global responsibilities of the world’s only superpower,” said John Nagl, a retired Army colonel who helped rewrite U.S. counterinsurgency doctrine for the Iraq and Afghanistan wars.

“He knows how to deal with those things.” Nagl continued. “The challenges he’s going to confront are moral, dealing with an administration that has not always been clear in its support for American values.”

Whatever his odds, McMaster took the job not simply because his commander-in-chief could order him to do it.

“Those who ignore history are doomed to repeat it,” he once said. “Those who ignore them are doomed to watch.”

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Republican senators start attack on U.S. consumer financial watchdog

WASHINGTON ( ) – Republicans lawmakers are starting to put in motion plans to destroy or defang the U.S. agency intended to protect individuals from financial fraud.

On Tuesday, two Texas Republicans, Senator Ted Cruz and Representative John Ratcliffe, introduced a one-page bill to kill the Consumer Financial Protection Bureau entirely.

Their move comes a few days after Representative Jed Hensarling, the chairman of the House Financial Services Committee, outlined a plan to limit the independent agency’s power and to crimp its funding via Congress’ budget process.

The agency focuses on financial products such as mortgages and student loans.

Next up: David Perdue, a Republican from Georgia on the Senate Banking Committee, will introduce a bill to make the CFPB more accountable to Congress by changing its funding mechanism, according to an aide. Unlike a complete elimination of the agency, which would require 60 vot上海水磨会所es, Perdue’s bill could be affixed to budget legislation that could become law with a 51-vote majority vote in the Senate.

Senate Democrats, including Elizabeth Warren from Massachusetts and Sherrod Brown, the senior Democrat on the Banking Committee, have vowed to block changes they say would weaken the CFPB’s independence.

Killing the agency altogether would be a hard sell, and even some banking lobbyists have said they would be comfortable with a more restricted CFPB.

The agency, which is also facing a court test, was created in the 2010 Dodd-Frank Wall Street reform law. Its sole director, currently Richard Cordray, serves a fixed term and its budget flows through the Federal Reserve without being subject to congressional review.

Republicans criticizing the CFPB say it overreaches its authority, pushes unnecessary regulation on small banks and uses large fines to direct lenders’ behavior without going through proper rule-making processes. Perdue has also struck at the agency more specifically, introducing a resolution to repeal a new CFPB regulation requiring prepaid cards to disclose their terms prominently.

Hensarling’s plan, which anti-CFPB lobbyists and congressional staffers are positing as a compromise, would push some CFPB powers to other agencies while making its budget subject to congressional review and its director a political appointee. Others want to see the agency become a five-member bipartisan commission.

President Donald Trump, also a Republican, was elected partly on promises to lighten regulation and is expected to sign any CFPB-related legislation that reaches his desk.

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Trump, Republicans set timeframe for introducing Obamacare replacement

WASHINGTON ( ) – President Donald Trump and Republicans in Congress said on Thursday that they will soon unveil plans to repeal and replace Obamacare, providing a timeframe for a legislative goal they have struggled with for weeks.

Republicans, who control the White House, the U.S. House of Representatives and U.S. Senate, have long vowed to repeal the Affordable Care Act but have had difficulty agreeing on a detailed plan for replacing the signature domestic policy of former Democratic President Barack Obama.

But announcements from Trump and House Speaker Paul Ryan claimed progress.

“We’re doing Obamacare, we’re in the final stages,” Trump told a news conference. “So we will be submitting sometime in early March, mid-March.”

Earlier Thursday, Ryan told reporters on Capitol Hill that House Republicans would introduce legislation to repeal and replace Obama’s program after a 10-day recess that begins on Friday.

“After the House returns following the Presidents Day break, we intend to introduce legislation to repeal and replace Obamacare,” Ryan said at a press conference. Presidents Day is on Monday and the House returns on Feb. 27.

Ryan spoke shortly after many House Republicans huddled in a closed session with newly-installed U.S. Health and Human Services Secretary Tom Price to discuss their options to change the 2010 law.

The session was part pep talk and part laying out of talking points that can be delivered to constituents during the recess.

A 19-page “policy brief” was distributed to lawmakers, and it included some details of the emerging House Republican healthcare strategy.

In the weeks ahead, Republicans intend to repeal the penalties for Obamacare’s mandate requiring individuals to get coverage and employers to provide it, the policy brief said.上海水磨

The House Republican replacement plan for Obamacare will include an age-based monthly tax credit that Americans who do not get health insurance through their employer can use to buy health insurance and take from job to job, the brief said.

House Republicans plan to unwind the expansion of the Medicaid healthcare program for the poor that happened under Obamacare, and eventually cap federal Medicaid payments to states, the document said. And they plan to repeal cuts that Obamacare made in payments to hospitals treating large numbers of uninsured.

Lawmakers left the meeting saying there was plenty more work ahead on thorny issues. House Ways and Means Committee Chairman Kevin Brady said there is “a range of options” for giving states more say over Medicaid. He also said there were options to offset the cost of a Republican plan, such as capping the tax exclusion for employer-based healthcare plans.

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Trump questions lawmakers’ efforts to curb asset seizures by police

WASHINGTON ( ) – President Donald Trump said on Tuesday there was “no reason” to curb law enforcement agencies that seize cash, vehicles and other assets of people suspected of crimes, a practice that some lawmakers and activists have criticized for denying legal rights.

The issue of civil asset forfeiture, created to disrupt the activities of organized crime groups, arose when sheriffs from around the United States told Trump at a White House meeting that they were under pressure to ease the practice.

“I’d like to look into that,” Trump said. “There’s no reason for that.”

In 2016, a group of Republican and Democratic lawmakers introduced a bill, which did not become law, that would have required the government to do more to show that seized property was connected to a crime. Critics have said suspects have few avenues to challenge the seizures and that forfeiture laws were sometimes abused. Police in some cases seize property from people who are never charged or convicted.

Trump, a Republican, asked acting U.S. Attorney General Dana Boente, who was at the gathering, whether executive orders or legislation were needed to support forfeiture. Boente said that was unnecessary but law enforcement agencies needed encouragement.

Trump voiced disagreement with lawmakers who want to change asset forfeiture laws, and some of the sheriffs laughed when Trump suggested he might want to “destroy” the career of one Texas legislator.

He said members of the U.S. Congress would “get beat up really badly by the voters” if they interfered with law enforcement’s activities.

Later, Sheriff Harold Eavenson of Rockwall County, Texas, told Trump of his re上海水疗sponse to a state lawmaker who had introduced legislation requiring suspects first be convicted before assets could be seized.

“I told him that the cartel would build a monument to him in Mexico if he could get that legislation passed,” Eavenson said.

“Who was the state senator?” Trump asked.

“You want to give his name? We’ll destroy his career,” the president deadpanned, to laughter.

Eavenson did not identify the lawmaker, but a Republican state senator has introduced similar legislation in Texas. The Texas Observer magazine reported that the bill had support from Republicans and Democrats.

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Peruvian president threatens to dissolve Congress unless anti-graft reforms passed

LIMA ( ) – Peru’s president on Wednesday threatened to dissolve Congress unless his anti-graft proposals are passed, raising the stakes in a power struggle with the opposition that could usher in a new period of political turmoil in one of Latin America’s most stable economies.

Invoking a constitutional measure that would authorize him to call new legislative elections if his proposed reforms are not passed, President Martin Vizcarra told Peruvians in a televised address that the fight against corruption was the centerpiece of his administration and accused lawmakers of trying to obstruct it.

“Our firm decision to correct and change the political and justice system affects powerful interests that are protected by unscrupulous politicians,” Vizcarra said in a 10-minute message, flanked by his cabinet and regional governors.

“We’ll take this struggle to the final consequences, because that’s what Peru deserves,” he added.

The move triggered immediate cries of “coup” from allies of opposition lawmakers and could stir some debate over its legality, potentially distracting the government from efforts to mediate disputes over mining and oil operations and pass a labor reform package.

Opposition lawmaker Luz Salgado said that lawmakers would evaluate Vizcarra’s request for a vote of confidence over his reforms after returning from their scheduled visits with constituents this week.

“We lament the adjectives and name-calling he has used against Congress,” Salgado told 上海水疗journalists.

Vizcarra is betting that most Peruvians support him and his legislation following back-to-back graft scandals that have discredited major political parties and institutions in Peru in recent years. A recent poll published in local daily La Republica found that 55 percent of Peruvians wanted him to turn the dispute with Congress into a vote of confidence.

A business-friendly former vice president, Vizcarra took office a little over a year ago after his predecessor resigned in disgrace – one of several politicians entangled in a bribery probe involving Brazilian builder Odebrecht.

Vizcarra’s proposals include measures aimed at cleaning up campaign financing, strengthening political parties and ending parliamentary immunity from prosecution.

But his political reform package has languished in commission and the opposition has shelved or voted down other proposals. One congressman who is the target of a criminal probe recently proposed penalties for prosecutors who leak information to the press.

“They keep putting up obstacles, building a system of impunity and doing all they can to keep Peru from progressing,” Vizcarra said. “It’s unacceptable.”

Shortly before Vizcarra spoke, the chief justice in Peru’s highest court, Ernesto Blume, warned that forcing a vote of confidence over proposed reforms should only be done when all attempts at dialogue had failed.

If Congress issues a vote of no-confidence and Vizcarra dissolves Congress, new parliamentary elections could be held as early as this year.

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UPDATE 1-German inflation rate drops sharply below ECB target in May

(Adds analysts, background)

BERLIN, May 31 ( ) – German annual inflation eased sharply in May after exceeding the European Central Bank’s target level in the previous month for the first time since November, preliminary data showed on Friday.

Analysts said the drop to the lowest level since Feb. 2018 was expected given that the sharp rise last month was the result of special effects like the Easter holiday falling later in April this year than last, driving up the cost of package holidays.

German consumer prices, harmonised to make them comparable with inflation data from other European Union countries, rose by 1.3% year-on-year after an increase of 2.1% in the previous month, the Federal Statistics Office said.

“The fall in the inflation rate is above all the result of a statistical effect as Easter was later,” VP Bank Group Chief Economist Thomas Gitzel wrote in a note. “The rate seen in April was an outlier.”

The May reading was the lowest since February 2018 and compared with a forecast of 1.4%.

The ECB targets inflation of close to but below 2% for the euro zone as a whole.

On the month, EU-harmonised prices rose by 0.3%, in line with market expectations.

Sebastian Wanke of KfW Bank said the ECB target-exceeding rate in April is unlikely to repeat itself this year given the German economy is slowing down as trade disputes and the prospect of Britain leaving the European Union without a deal weigh on it export-dependent manufacturers.

“And in this respect上海水疗, we depend on the development of the trade disputes and the Brexit confusion – both are now weighing like a stone on the mood of internationally operating companies,” Wanke said.

“This illustrates the full extent of the ECB’s current dilemma. In any case, with such poor inflation prospects for Germany, the largest economy in the euro zone, key interest rates are not likely to be hiked in the foreseeable future.”

The ECB faces the challenge of a weakening euro zone economy, where growth started to slow just after it ended its massive bond purchase programme in December.

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U.S., Japan first ladies: both unconventional yet poles apart

WASHINGTON ( ) – When Japanese first lady Akie Abe made her rounds in Washington on Friday, noticeably absent was the high-level chaperone of previous visits – America’s first lady.

Rather than Melania Trump, it was the wife of the Japanese ambassador to the United States who accompanied Akie Abe on a visit to a local university, a Japanese embassy official said.

That was a departure from Akie Abe’s previous visits to Washington. In 2007, she was treated to a tour with Laura Bush to George Washington’s home, Mount Vernon, and in 2015, she and Michelle Obama stopped by a northern Virginia elementary school with a Japanese immersion program.

The break with convention, three weeks into husband Donald Trump’s presidency, is another sign that Melania Trump may have different designs on the first lady’s role than her predecessors.

Melania Trump has elected to stay in New York for now while her son finishes his school year. It is not yet clear if she will take a prominent role in White House social events, including accompanying fellow first ladies on their visits to the capital.

Japanese Prime Minister Shinzo Abe and his wife are scheduled to spend the weekend at the Trumps’ Florida Mar-a-Lago retreat, where the two leaders will golf and the task of hosting Mrs. Abe will fall to Melania.

While their husbands strive to appear in lock-step on U.S.-Japan relations this weekend, Melania Trump ma上海水疗会所y find in her Japanese counterpart someone who is in many ways her opposite – a political spouse who does not shun the limelight and disagrees publicly with her powerful husband.

Melania Trump, a former model from Slovenia, rarely airs differences of opinion with her husband. Akie Abe, in contrast, has used news interviews to make policy recommendations for his administration, leading some to dub her the “household opposition.”

She told in 2014 that Japan should consider cutting spending and boosting the economy before further raising the sales tax, to 10 percent. She said she had urged her husband not to go forward with the first stage of the rise, to 8 percent, to no avail.

Critiquing Japan’s male-dominated professional culture, Akie Abe told Bloomberg last year that Japanese women are held back by pressure from men to be “cute” rather than “capable and hardworking.”

Her public profile makes her a rarity in Japan as well as a stark contrast with Melania Trump, who largely avoided the campaign trail, has not shown deep interest in public policy, and has rarely disagreed with Trump in public despite some damaging revelations.

When a videotape of Trump emerged during the 2016 presidential campaign in which he boasted about grabbing women by their genitals, Melania said in a brief statement that his words were “unacceptable and offensive” but that she had accepted his apology.

The differing styles could keep the weekend conversations on the light side.

“I would certainly expect no discussion of global politics” between Melania and Akie, said Jean Harris, a University of Scranton professor who has studied the role of first ladies. “I don’t see Melania as wanting to be part of those conversations.”

Akie Abe’s openness in stating points of disagreement with her husband has few parallels even in American politics, where first ladies tend not to diverge from their husbands in public, though they may be crucial advisors behind the scenes, Harris said.

Just after the election, Melania Trump said in a CBS interview that she chides her husband “all the time” for his Twitter attacks.

“Sometimes he listens, sometimes he doesn’t,” she said. “I give him my opinion. And he could do whatever he likes with it.”

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First planned North Korea-U.S. contact in Trump administration canceled: WSJ

SEOUL ( ) – Plans for the first contact between North Korea and the United States after President Donald Trump took office were canceled after the U.S. State Department denied a visa for the top envoy from Pyongyang, the Wall Street Journal reported on Saturday.

The talks, between senior North Korean foreign ministry envoy Choe Son Hui and former U.S. officials, were scheduled to take place on March 1 and 2 in New York but were called off after Choe was denied a visa, the Journal said.

It was not clear what led the State Department to deny the visa but North Korea’s test-firing of a ballistic missile on Feb. 12 and the murder of North Korean leader Kim Jong Un’s half brother in Malaysia may have played a role, the report said.

South Korean and U.S. officials have said they believe North Korean agents assassinated Kim Jong Nam, the estranged half brother of Kim Jong Un, on Feb. 13.

A U.S. State Department official denied so-called track two discussions had been scheduled.

“The U.S government had no plans to engage in track 2 talks in New York,” the official said, declining comment on individual visa cases.

A South Korean foreign ministry official declined to comment on the report of the canceled meeting in上海水磨 New York, saying the reported plan did not involve the U.S. or South Korean government.

The meeting in New York would have been the first time a senior North Korean envoy would visit the United States since 2011 and the first contact between U.S. and North Korean representatives since Trump took office.

Choe, director general for North American affairs at the North’s foreign ministry, has previously met former U.s. officials and academics, the last time in November in Geneva for informal discussions.

Trump said in a interview on Thursday that he was concerned about North Korea’s ballistic missile tests and “it’s a very dangerous situation”. Trump did not ruling out meeting Kim at some point in the future under certain circumstances but suggested it might be too late.

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German Bund yield at record low as Trump’s Mexico tariff vow rattles markets

LONDON ( ) – Germany’s 10-year bond yield slid to record lows on Friday, after U.S. President Donald Trump’s sudden threat to impose tariffs on Mexican goods sent shock waves through world markets and heightened fears of a global recession.

Seen as unthinkable even a few weeks ago, the relentless fall in yields in what is seen as one of the world’s safest assets — German government debt — speaks to the scale of pessimism gripping investors.

“The Trump Mexico tariffs surprised me and more so than the escalation in the trade war with China,” said Nordea chief market strategist Jan von Gerich. “This news is negative for markets and the economic outlook.”

The global outlook darkened further and a rally in so-called safe assets — government bonds, yen and gold — accelerated after a measure of Chinese manufacturing activity in May disappointed.

Dovish comments from the U.S. Federal Reserve’s Richard Clarida, saying the Fed would act if inflation stays too low or global risks endanger the economic outlook, only added to a sense that a U.S. rate cut may come sooner rather than later.

Germany’s 10-year bond fell more than three basis points to a record low of minus 0.21%. It surpassed a previous all-time low hit in July 2016 just after Britain voted to leave the European Union.

The yield is down more than 20 basis points this month.

“Bund yields are at historic lows even as there are no real rate cuts priced in the euro area,” said Rishi Mishra, interest rates strategist at Futures First Info Services.

“It’s either the biggest mispricing of the century, or Bund yields are headed below minus 50 bps.”

Data showing annual inflation in Germany eased sharply in May reinforced expectations for lower bond yields.

Yields on Dutch 10-year bonds fell below 0% for the first time since 2016.

French 10-year bond yields hit their lowest since 2016 at just 0.21% and Spanish and Portuguese yields hit fresh record lows.

Greece’s 10-year bond yield fell below 3% for the first time, putting it on track for its biggest weekly fall since December 2017.

“We have a market that is increasingly concerned about what the future holds for the government of Italy…and the backdrop in Greece is one where the government..has made some notable structural reforms and improved the debt to GDP,” said Matt Cairns, rates strategist at Rabobank.

The latest moves will have added to the pool of euro zone bonds carrying sub-zero yields. This amounted to 3.71 trillion euros by close of trade on Thursday, according to Tradeweb, a sharp rise from 3.44 trillion in April.

Worldwide, analysts reckon more than $10.5 trillion in bonds now carry negative yields.

“We have to repeat the old saying that the trend is your friend,” DZ Bank strategist Christian Lenk said.

U.S. Treasury yields are not in negative territory but they too resumed their slide, with 10-year yields falling to new 20-month lows.

The U.S. yield curve, as measured in the gap between three-month and 10-year bond yields, was at its most inverted since 2007 in a sign of growing investor concern about recession risks.

And in Britain, 10-year gilt yields fell to their lowest since October 2016 at 0.85%.

Elsewhere in the euro zone, Italian yields jumped in response to the selloff in riskier assets, and growing concerns about the policies of the government in Rome.

Italy’s government has no plans to issue small denomination bonds to help pay state debts owed to companies, the Treasury said, looking to quell market concerns about the introduction of a parallel currency.

The so-called “mini-BOT” scheme, named after Italy’s Treasury bills, was drawn up by the ruling League party, and on Tuesday parliament approved a motion saying it should be considered.

Two-year Italian yields were up as much as 15 bps at 0.821% but pulled back as trading worse on to 0.70%. Having also risen, long-dated Italian bond yields fell below Thursday’s close late in 上海水磨the session. Its 10-year touched a low of 2.626%.

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Credit Suisse CEO dismisses European bank mergers as ‘solution’

ZURICH ( ) – Mergers are not the best way to help Europe’s banks deal with negative interest rates, Credit Suisse Chief Executive Tidjane Thiam said in an interview published on Sunday.

“That is not the solution,” Thiam told Swiss newspaper Blick am Sonntag. “Negative interest rates have created an extremely difficult environment, where many banks have come under long-term pressure. A merger here would fix nothing.”

UBS Chief Executive Sergio Ermotti said last month after Germany’s Deutsche Bank and Commerzbank called off merger talks that consolidation in the European banking industry remains inevitable.

However, Thiam said he did not think that eit上海水疗her of Switzerland’s two largest banks, UBS and Credit Suisse, would become takeover targets. The failed merger talks between Germany’s two biggest lenders prompted speculation of deals with other European banks, including UBS.

Thiam said in the interview he was not criticizing the policies of the Swiss National Bank (SNB), which has used negative rate to weaken the Swiss franc.

“I am only saying that negative rates have a negative effect on the economy,” he said.

Thiam, who has led Credit Suisse since 2015, said its main problems have now been settled and the bank had made great strides in reducing costs through technology.

The former minister in his native Ivory Coast also ruled out a return to politics, saying a change of jobs was not on the cards and he was planning “for the long term”.

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Kenya to retire old 1,000 shilling banknote to stem illicit flows

NAIROBI ( ) – Kenya plans to withdraw an old version of its 1,000 shilling ($9.88) banknote to tackle illicit financial flows and counterfeiting, its central bank governor said on Saturday.

President Uhuru Kenyatta promised to stamp out graft when he was first elected in 2013, but critics say he has been slow to pursue top officials and there have been few high profile convictions since he took office.

Patrick Njoroge said while launching new bank notes of other denominations that older versions of smaller denominations will remain in circulation alongside the new ones, but after Oct. 1, the older 1,000 shilling note would be invalid.

“We have assessed the grave concern that our large banknotes, particularly the older one thousand shillings series, are being used for illicit financial flows in Kenya and also other countries in the region,” Njoroge said.

Speaking while launching the notes during a national holiday celebration, Njoroge gave no more de上海水磨tail on the illicit flows.

The central bank’s move comes as Kenyan lawmakers push for the implementation of amendments to banking laws that would relax the east African country’s rigorous requirements for recording transactions above $10,000.

The central bank has said these changes could undermine efforts to tackle money laundering, financing of terrorism and proceeds from crime.

Dozens of Kenyan government officials and business people have appeared in court since May 2018 on charges relating to the alleged theft of hundreds of millions of shillings from public coffers.

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Elections official asks Trump for evidence of voter fraud

WASHINGTON ( ) – A member of the Federal Election Commission on Friday called on President Donald Trump to share any evidence he has to support a statement that voter fraud caused him and former Senator Kelly Ayotte to lose in New Hampshire in the 2016 U.S. election.

“The scheme the President of the United States alleges would constitute thousands of felony criminal offenses under New Hampshire law,” FEC Commissioner Ellen Weintraub said in a statement. (

Trump blamed voter fraud for his and Ayotte’s losses in New Hampshire in November’s election while speaking on Thursday with a bipartisan group of U.S. senators, saying that Ayotte’s re-election bid was spoiled by “thousands” of people from neighboring Massachusetts voting in New Hampshire, according to media reports.

Democratic presidential nominee Hillary Cl上海水疗inton narrowly won New Hampshire’s four electoral votes by nearly 3,000 votes, while Ayotte, a Republican like Trump, lost by only 743 votes.

Weintraub, who was appointed by former Republican President George W. Bush, asked Trump to “immediately share his evidence with the public and with the appropriate law-enforcement authorities so that his allegations may be investigated promptly and thoroughly.”

Trump said on Sunday he would put Vice President Mike Pence in charge of a special commission to investigate voter fraud, despite numerous studies showing that such fraud is rare in the United States.

Trump has said that fraud may account for his loss nationwide in the popular vote to Clinton by nearly 3 million votes.

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Few good options in Trump arsenal to counter defiant North Korea

WASHINGTON ( ) – Despite his campaign vows to take a tougher line with North Korea, President Donald Trump’s restrained public reaction to Pyongyang’s first ballistic missile launch on his watch underscores that he has few good options to curb its missile and nuclear programs.

The responses under consideration – which range from additional sanctions to U.S. shows of force to beefed-up missile defense, according to one administration official – do not seem to differ significantly so far from the North Korea playbook followed by Trump’s predecessor, Barack Obama.

Even the idea of stepping up pressure on China to rein in a defiant North Korea has been tried – to little avail – by successive administrations. But Beijing is showing no signs of softening its resistance under a new U.S. president who has bashed them on trade, currency and the contested South China Sea.

More dramatic responses to North Korea’s missile tests would be direct military action or negotiations. But neither appears to be on the table – the first because it would risk regional war, the latter because it would be seen as rewarding Pyongyang for bad behavior. And neither would offer certain success.

“Trump’s options are limited,” said Bonnie Glaser, an Asia expert at the Center for Strategic and International Studies think tank in Washington.

Trump’s initial public comments on Saturday on the test launch of what was believed to be an intermediate-range Musudan-class missile were unexpectedly measured – and brief – compared to earlier bluster about another U.S. adversary, Iran, since he took office on January 20.

“I just want everybody to understand, and fully know, that the United States of America is behind Japan, our great ally, 100 percent,” Trump told reporters in Palm Beach, Florida, speaking in a solemn tone alongside visiting Japanese Prime Minister Shinzo Abe.

The U.S. president did not mention North Korea or signal any retaliatory plans for what was widely seen as an early effort to test the new administration.

By contrast, Trump tweeted “It won’t happen!” in January after North Korean leader Kim Jong Un said the North was close to testing an intercontinental ballistic missile.

White House adviser Stephen Miller insisted on ABC’s “This Week” that Trump’s one-sentence statement was an “important show of solidarity” with Japan. He told “Fox News Sunday” the administration was going to bolster its allies in the region against the “increasing hostility” of North Korea.

While no one can rule out that Trump might still take to Twitter with harsh rhetoric as he often does, some analysts said his relatively subdued initial statement could show that aides have convinced him not to be baited by Pyongyang into issuing threats that would be hard to carry out, especially while his North Korea strategy is still being formulated.


Trump’s aides have said that they will take a more assertive approach than the Obama policy dubbed “strategic patience,” which involved gradually scaling up sanctions and diplomatic pressure and essentially waiting out the North Korean leadership. But the new administration has been vague about how it would do this.

The Trump administration had been expecting a North Korean “provocation” and will consider a full range of options in response, but they 上海水磨会所would be calibrated to show U.S. resolve while avoiding escalation, the U.S. official said, speaking on condition of anonymity.

The stakes would be higher, however, if nuclear-capable North Korea makes good on its threat to test an ICBM of a kind that could someday hit the United States, analysts said.

Trump and his aides are likely to weigh new U.S. sanctions to tighten financial controls, an increase in naval and air assets and joint military exercises in and around the Korean peninsula and accelerated installation of new missile defense systems in South Korea, the official said.

Trump has also made clear that he believes China has not done enough to use its influence to help rein in Pyongyang’s nuclear and ballistic programs.

The U.S. official told that Trump would now step up pressure on Beijing, but acknowledged that there were limits to how far China would go, especially in enforcing sanctions, because of its own interests in avoiding destabilization of North Korea.

It remains to be seen, however, whether the new administration might go a step beyond Obama’s approach and focus on imposing “secondary sanctions” on firms and entities that help North Korea’s weapons programs, many of which are in China.

Also unclear is whether Trump’s phone call last week with Chinese President Xi Jinping, in which the U.S. president backed away from his threat to break from America’s long-standing “one China” policy, would engender greater cooperation from Beijing on North Korea.

“Beijing has enormous leverage over Pyongyang thanks to being one of its only trading partners and in fact could not survive without Chinese economic assistance,” said Harry Kazianis, director of defense studies at the conservative Center for the National Interest.

Riki Ellison, who heads the Missile Defense Advocacy Alliance, an industry group, said Trump should also move quickly to beef up missile defense in both South Korea and Japan – for which the Obama administration has already laid much of the groundwork. “He cannot ignore this,” he said. “It has to be swift.”

North Korea’s repeated missile launches prompted Washington and Seoul to agree to deploy a Terminal High Altitude Area Defense (THAAD) anti-missile battery in South Korea later this year, a system strongly opposed by Beijing, which worries that its powerful radar undermines its own security.

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Mounting climate change fears push U.S. investors to assess geographical risks

NEW YORK ( ) – With an above-average percentage of its power generated from renewable sources and one of the largest battery storage operations in the United States, utility Sempra Energy seemed to check all the boxes for portfolio manager Todd Ahlsten, who manages more than $18 billion for Parnassus Investments based on each company’s environmental, social and governance attributes.

But he sold his shares in the San Diego-based company earlier this year because of his conviction that its location in California will put it in the crosshairs of increasingly severe weather patterns, no matter how environmentally responsible it may be.

“They were doing all the right things, but the risks were too high on the physical side so we exited the position,” Ahlsten said.

Ahlsten’s decision to factor in the geographical risks of climate change is becoming increasingly familiar in the fast-growing world of so-called ESG investing, which has long focused more on avoiding companies with poor environmental track records than assessing which face the greatest risk of physical damage or business disruptions from more volatile climate.

The bankruptcy of California utility company Pacific Gas and Electric in January following devastating wildfires caused in part by climate change is prompting investors to recognize what had been one of the biggest blind spots of environmentally driven investing: the reality that even companies that pledge to combat climate change could be negatively affected by it.

As a result, ESG investors are increasingly judging companies based on what sort of physical risks they will face as global temperatures continue to rise and storms become more severe.

Firms including Parnassus, Hermes Investment Management and Eaton Vance’s Calvert Research and Management are avoiding companies ranging from retailers with large footprints in Florida to utilities in Southern California to barge shipping companies that may have to deal with more frequent Midwestern floods.

PG&E faces liabilities that it estimates at over $30 billion in the aftermath of November’s Camp Fire, which killed more than 85 people and destroyed more than 14,600 homes, making it the most destructive wildfire in California history.


The risks of physical damage, liabilities or business disruptions from climate change do not currently factor into ESG-ratings by index-providers, which often shape the investable universe for fund managers or exchange-traded funds.

“The industry is turning more to try to understand and embed and measure the physical risks associated with climate change, but that’s still an evolving area,” said Tony Campos, head of ESG, Americas, at FTSE Russell.

More accurate analytics and modeling programs that help predict the specific impacts of different weather scenarios on individual companies are prompting more fund managers to take the impact of climate change into consideration, said Louise Dudley, portfolio manager of the Federated Hermes Global Equity fund in London.

“In terms of physical risk up, until now we’ve looked at the type of companies that are the most exposed. But now with more data we’re able to get more specific, more accurate insights and therefore more useful outputs,” she said.

Over the last year, Hermes has spent more time on modeling the likely outcomes for each company it evaluates based on global temperatures rising by 2, 4, or 6 degrees Celsius, she said. Global temperatures are on course to rise between 3 and 5 degrees Celsius (5.4 to 9 degrees Fahrenheit) by the end of this century, according to a 2018 estimate by the U.N. World Meteorological Organization.

Brian Ellis, portfolio manager of the Calvert Bond fund and the Calvert Green Bond fund, said his fund is increasingly focusing on the geographical footprint of companies, ranging from retailers to hotel operators to real estate investment trusts that may be concentrated in areas that could get hit by severe storms or high temperatures.

That focus on recognizing which companies may be more likely to bear the physical brunt of climate change is relatively new, he said, and is a step up from crediting companies that had been investing in renewable energy or decreasing their carbon emissions.

“I think people are recognizing more so that you can do all that but you can still have very large impacts to your infrastructure” due to more v上海水疗olatile weather patterns, Ellis said.

As a result, he is increasingly demanding more enticing potential returns to compensate for the risks of physical damage from climate change, he said.

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U.S. 30-year mortgage rates drop below 4%: Freddie Mac

NEW YORK ( ) – Interest rates on U.S. 30-ye上海水疗ar fixed-rate mortgages fell below 4% for the first time since January 2018 in step with declining U.S. bond yields due to growing trade tension between China and the United States, Freddie Mac said on Thursday.

Thirty-year mortgage rates averaged 3.99% in the week ended May 30, down from 4.06% a week earlier and 4.56% a year ago, the mortgage finance agency said.

The average 15-year mortgage rate fell to 3.46% from 3.51% the week before. It was 4.06% a year earlier.

Interest rates on five-year adjustable mortgages averaged 3.60%, down from 3.68% the prior week and 3.80% from the year before.

While the U.S. economy is on relatively steady footing, Wall Street has wobbled on fears about a protracted trade conflict between the world’s two biggest economies.

Jitters about flagging business activities around the world spurred a safe-haven stampede for longer-dated U.S. government debt, sending 10-year Treasury yields to 2.21% on Wednesday, their lowest level since September 2017.

Ten-year yields also fell below the interest rates on 3-month Treasury bills. This inversion of the yield curve has preceded every U.S. recession in the past 50 years.

“While economic data points to continued strength, financial sentiment is weakening with the spread between the 10-year and the 3-month Treasury bill narrowing as fears of the impact of the trade war with China grow,” Freddie Mac’s chief economist Sam Khater said in a statement.

Khater said cheaper borrowing costs should support the housing market.

Recent data suggest a cloudy picture of the housing industry.

Domestic new home sales hit a near 11-1/2-year peak in March before retreating in April.

Existing home sales, on the other hand, fell for a second consecutive home in April due primarily to a shortage of inventories, while pending home sales unexpectedly decreased last month.

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Trump’s Interior Dept. pick wins Senate confirmation

WASHINGTON ( ) – The U.S. Senate on Wednesday confirmed President Donald Trump’s pick to head the Interior Department as the White House seeks to increase fossil fuel production on federal lands.

Ryan Zinke, a U.S. Representative from coal-producing Montana, won confirmation by a vote of 68 to 31, with several Democrats joining Republicans, who lead the chamber.

The former Navy SEAL commander is an avid hunter and angler who is popular with many outdoor enthusiasts, including Trump’s son Donald Jr.

Many environmentalists, however, are concerned about Zinke’s zeal for exploiting coal and other fossil fuels. As a one-term Congressman, Zinke worked to boost mining, including supporting an effort to end a coal leasing moratorium on federal lands. Forty percent of U.S. output comes from federal lands that are mostly in Wyoming and Montana.

In his confirmation hearing in January Zinke said he would consider an expansion of energy drilling and mining on federal lands but would ensure that sensitive areas were protected.

Democrats who voted against Zinke, including Senators Maria Cantwell and Chuck Schumer, questioned his support of fossil fuel development on federal lands.

“Congressman Zinke says he’s a dyed in the wool conservationist, but doesn’t have the record to back it up,” said Schumer, the Senate’s top Democrat. “That should concern every outdoor enthusiast, every lover of our great and grand 上海水疗会所national parks.”

Zinke will head an agency that employs more than 70,000 people across the country and oversees more than 20 percent of federal land, including national parks such as Yellowstone and Yosemite.

Fellow Republican Senator Steve Daines, also from Montana, said Zinke “knows we must strike a balance between conservation and responsible energy development.”

The White House is expected to issue an executive order soon reversing former President Barack Obama’s temporary moratorium on coal leasing on U.S. lands, which is part of a wider review of the program.

The Senate is also expected to easily confirm Trump’s pick to head the Department of Energy, Rick Perry, a former governor of Texas, this week.

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MONEY MARKETS-Traders build bets on multiple U.S. rate cuts

(Updates market action, adds graphics)

NEW YORK, June 3 ( ) – U.S. short-term interest rates futures jumped on Monday as traders increased their bets the Federal Reserve would embark on a series of rate cuts starting next month to avert a recession due to growing global trade conflicts and sluggish inflation.

St. Louis Federal Reserve James Bullard said on Monday a rate decrease may be “warranted soon.”

Bullard’s view of a likely imminent rate cut came after the Institute for Supply Management said earlier Monday its gauge of domestic manufacturing activity fell to its weakest level in 2-1/2 years in May.

In late U.S. trading, federal funds futures implied traders saw about a 67% chance the U.S. central bank would reduc上海水疗e key short-term borrowing costs by a quarter point to 2.00%-2.25% at its July 30-31 policy meeting. This was higher than 53% on Friday and 18% a week earlier, CME Group’s FedWatch program showed.

Fed funds contracts suggested traders are pricing in an 86% chance of at least one more rate decrease, in addition to the possible one in July, and a 55% chance of at least two more rate cuts by year-end.

Going into mid-2020, the fed funds complex implied traders expect a 24% probability the central bank would reduce key borrowing costs to 1.00%-1.25% or lower, which is more than 1 point lower than its current target range of 2.25%-2.50%.

Fed policymakers will next meet on June 18-19.

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