Tag Archives: United States

Global stocks dip, bond yields rise as Fed zest fades

Photo courtesy of Reuters/Brendan McDermid

NEW YORK (Reuters) – Stock markets around the world fell and bond yields rose as investors weighed the implications that a U.S. interest rate rise before the end of the year would have for the global economy and markets.

The Federal Reserve, which kept its rates on hold as expected on Wednesday, took the unusual step of strengthening its language about timing in its statement, making it clear that a December rate hike was still possible. The Fed also removed a previous warning about slowing global growth.

Wall Street was lower, giving up some of Wednesday’s gains. The U.S. stock market initially reacted negatively to the Fed statement, but later reversed course to end near the day’s highs on Wednesday.

The MSCI All-Country World Index <.MIWD00000PUS> has recovered most of the losses that occurred beginning in mid-August on worries about slowed worldwide demand and the Fed’s plans. It was last down 0.6 percent on Thursday.

U.S. Treasury yields continued Wednesday’s rise after the Fed explicitly referred in its statement at the end of its two-day policy meeting to conditions necessary “to raise the target range at its next meeting”. Reference to a particular meeting is rare for the Fed.

The benchmark 10-year Treasury yield rose 7 basis points to 2.16 percent <US10YT=RR>. The two-year note’s yield was 0.73 percent, highest since late September.

The Dow Jones industrial average <.DJI> fell 32.98 points, or 0.19 percent, to 17,746.54, the S&P 500 <.SPX> lost 1.42 points, or 0.07 percent, to 2,088.93 and the Nasdaq Composite <.IXIC> dropped 12.32 points, or 0.24 percent, to 5,083.38.

The first estimate of third quarter U.S. growth, released on Thursday, showed the world’s biggest economy expanded at a 1.5 percent annualized pace, below the expected 1.6 percent. But economists expect growth to pick up in the fourth quarter, given strong consumer spending figures.

In Europe the pan-European FTSEurofirst 300 index <.FTEU3> was down 0.2 percent at 1,481 points. Earlier in Asia, Japan’s Nikkei share average <.N225> gained 0.2 percent to close at 18,935.71.

Many investors are still not convinced about a rate lift-off given a recent run of soft U.S. data, making economic releases in coming weeks more crucial in determining a December move.

Economists expect a key U.S. manufacturing index due Monday <USPMI=ECI> to show the first contraction in the sector in 2-1/2 years, which would not be conducive for a rate hike.

The Fed’s stance contrasts to the European Central Bank and other major central banks, a factor that is expected to underpin the dollar. The Fed and ECB hold policy decisions within two weeks of each other in December.

The ECB last week signaled its readiness to inject more stimulus to boost prices and the People’s Bank of China followed with its sixth interest rate cut in less than a year.

The dollar gave back its earlier gains, with the euro trading 0.4 percent higher on the day at $1.0966 <EUR=>, having skidded to a 2-1/2 month low of $1.0826 overnight.

Crude oil futures were slightly higher one day after soaring more than 6 percent as the U.S. government reported an inventory build.

U.S. crude <CLc1> rose 0.4 percent to $46.11 a barrel. Brent <LCOc1> was steady at $49.05. Spot gold <XAU=> fell 2 percent to $1,150 an ounce.

(By David Gaffen; Additional reporting by Anirban Nag; Editing by Gareth Jones and Nick Zieminski)

TruNews: Iran to Participate in Syria Talks in Vienna

TRUNEWS – Talks will be held in Vienna starting Thursday to discuss an end to the war in Syria.

The U.S. announced Tuesday Iran would be participating. But Syria’s opposition party, which is backed by the U.S. and its allies, claims Iranian attendance could be a hindrance to peace. Iran is an ally of Syrian President Bashar al-Assad.

“The Russian intervention blocks a political solution and Iran’s involvement was, and still is, able to obstruct a political solution,” said Hisham Marwa, Vice President of the Syrian National Coalition, according to the Jerusalem Post.

China Condemns U.S. for Sailing Too Close to Man-Made Islands in South China Sea

The United States angered China on Tuesday by sailing a U.S. Navy guided-missile destroyer 12-nautical-miles from their man-made islands in the disputed South China Sea.

A U.S. defense official told Reuters that this was the first in a series of exercises that will test China’s territorial claims. While tensions are rising, the actions of the U.S. are intended to keep the freedom of navigation in one of the world’s busiest shipping lanes.

While the USS Lassen wasn’t met with any resistance, Chinese ships did follow the vessel throughout the South China Sea, and Chinese officials quickly and angrily responded.

“The actions of the U.S. warship have threatened China’s sovereignty and security interests, jeopardized the safety of personnel and facilities on the reefs, and damaged regional peace and stability,” China’s Foreign Ministry said in a statement on its website, according to NBC News.

The “U.S. side [should] think twice, not … take rash moves and stir up troubles,” China’s Foreign Minister Wang Yi warned in a separate statement.

China has reclaimed approximately 2,000 acres of the three main locations in the Spratly Islands located in the South China Sea over the past 18 months. Officials believe that China is building airstrips with the capability of handling bombers. Other countries fighting with China over the territorial claims of the South China Sea include Brunei, the Philippines, Malaysia, Taiwan, and Vietnam. The U.S. has not taken any sides in this dispute.

U.S. concerned by Russian operations near undersea cables: NY Times

WASHINGTON (Reuters) – The presence of Russian submarines and spy ships near undersea cables carrying most global Internet communications has U.S. officials concerned that Russia could be planning to sever the lines in periods of conflict, the New York Times reported on Sunday.

The Times said there was no evidence of cable cutting but that the concerns reflected increased wariness among U.S. and allied officials over growing Russian military activity around the world.

The newspaper quoted naval commanders and intelligence officials as saying they were monitoring significantly greater Russian activity along the cables’ known routes from the North Sea to Northeast Asia and waters closer to the United States.

“It would be a concern to hear any country was tampering with communication cables; however, due to the classified nature of submarine operations, we do not discuss specifics,”

U.S. Navy spokesman Commander William Marks told the Times.

Last month, the United States closely monitored the Russian spy ship Yantar, which equipped with two self-propelled deep-sea submersible craft, cruised off the U.S. East Coast toward Cuba, where one cable lands near the U.S. naval base at Guantanamo Bay, according to the Times.

Naval officials said the ship and the submersible craft were capable of cutting cables miles (km) deep beneath the sea, the Times said.

While cables are frequently cut by ship anchors or natural disasters and then quickly repaired, Pentagon officials are concerned that the Russians seem to be looking for vulnerabilities at much greater depths where cable breaks are harder to locate and repair, the paper said.

It said the cables carried more than $10 trillion daily in global business and more than 95 percent of daily communications.

(Reporting by Peter Cooney; Editing by Eric Walsh)

Planned Parenthood to No Longer Receive Medicaid Funding in Texas

The issue of defunding Planned Parenthood took a big step on Monday as Texas Governor Greg Abbott announced that Planned Parenthood would no longer receive funding from the state’s Medicaid program.

The Texas Health and Human Services Commission’s Office of Inspector General told the group and its affiliates in a letter that their state-federal Medicaid funding would end due to violations in the Medicaid program. According to USA Today, Planned Parenthood and its affiliates receive about $3 million to $4 million a year in Medicaid reimbursements.

“The State has determined that you and your Planned Parenthood affiliates are no longer capable of performing medical services in a professionally competent, safe, legal, and ethical manner,” the letter said.

The move comes after undercover videos showed employees of Planned Parenthood discussing the sale of fetal tissue and organs, which has sparked national uproar and controversy. After the videos were released, several government officials, including Gov. Abbott, called for an investigation. Congress is still investigating the claims made in the videos.

“Texas has stepped forward and shown its unyielding commitment to both protecting life and providing women’s health services,” Gov. Abbott told NBC News. “The gruesome harvesting of baby body parts by Planned Parenthood will not be allowed in Texas and the barbaric practice must be brought to an end. As such, ending the Medicaid participation of Planned Parenthood affiliates in the State of Texas is another step in providing greater access to safe healthcare for women while protecting our most vulnerable — the unborn.”

Gov. Abbot has also stated that this latest step is part of his administration’s LIFE movement. The “F” in this movement stands for the deFunding of Planned Parenthood.

A similar situation is taking place in Louisiana where Gov. Bobby Jindal stopped Planned Parenthood from receiving state money. Planned Parenthood quickly filed a lawsuit that reinstated their funding for 14 days; the judge’s order came just hours before Texas announced their defunding move.

Planned Parenthood told NBC News that they will rebuke the new steps and fight for the funding. They noted that they provide non-abortion health care services to thousands of women through Medicaid statewide, according to ABC News.

“It is completely outrageous that Texas officials are using these thoroughly discredited, fraudulent videos to cut women off from preventive health care, including cancer screenings, HIV testing, and birth control,” Dawn Laguens, executive vice president of Planned Parenthood Federation of America, said in a statement to the Associated Press.

“We will fight back against this outrageous, malicious, political attack in Texas with everything we’ve got, and we will protect women’s access to the health care they need and deserve.”

Planned Parenthood continues to deny that they have done anything wrong and that the undercover videos that were released over the summer were biased in their editing.

Putin Claims that Russia is Still Fighting ISIS and the U.S. is Getting in the Way

As tensions rise between the U.S. and Russia over the situation in Syria, both sides claim that their main priority is to eradicate ISIS.

U.S. officials continue to accuse Russian President Putin’s new bombing campaign in Syria is to boost the regime of Syrian President Bashar al-Assad. Multiple maps have shown Russia’s targets in Syria, and the majority of targets have been key locations of U.S.-backed Syrian rebels, not ISIS. And again, Putin has brushed off these accusations.

“What we are trying to achieve is to contribute to the fight against terrorism, which is a threat to both the United States to Russia to European countries and the whole world,” Putin said at an investment conference.

Boths sides disagree on how the civil war in Syria can be resolved and how ISIS can be defeated. Russia believes al-Assad needs to remain in power while the U.S. says the Syrian president needs to step down.

Putin claimed that his administration warned the United States out of “respect” before they began using airstrikes in Syria. They also sought cooperation on targets. Washington has been reluctant to work with Russia as they fear Russia would use their coordinates to target the rebels that the U.S. does not want targeted. The Syrian rebels are also already suspicious that the U.S. is already working with Russia on attacks, and U.S. officials do not want to feed those suspicions.

The Russian president also ridiculed the U.S. over their attempt to arm the Syrian rebels with air dropped munitions. He believes that the supplies will end up in the hands of ISIS.

“The United States has recognized that it was a failure and right now they keep distributing ammunition, hardware, equipment,” Putin said. “Who will get a hold of those? And it is not a rhetorical question.”

While U.S. officials state the main priority in Syria is to defeat ISIS rather than counter Russia’s involvement in the Syrian civil war, they will be holding a third meeting with officials from the Russian Ministry of Defense via video conference on Wednesday. They hope to establish safety protocols for aircrews flying over Syria.

Turkey Warning U.S. & Russia, Do Not Back Kurds in Syria

Turkey summoned the U.S. and Russian ambassadors separately on Tuesday to convey their concerns regarding Syrian Kurdish forces fighting the ISIS terrorist group in Syria and “unacceptable military and political support by the U.S. or by Russia.”

Turkish Prime Minister Ahmet Davutoğlu, said in televised comments: “We have a clear position. That position has been conveyed to the United States and the Russian Federation. Turkey cannot accept any cooperation with terrorist organisations which have waged war against it.”

Turkey has been active on its war on terror against ISIS and with the Kurdistan Workers’ party (PKK) who has waged a bloody insurgency since 1984 into Turkey, but has so far focused almost exclusively on bombing of the Kurdish militants in northern Iraq. The Democratic Union party (PYD) is considered to be a Syrian offshoot of the PKK by Turkey and military officials there are concerned that weapon drops to Syrian rebels by the U.S. and ammunitions being supplied to Assad’s forces by Russia are being confiscated and used by the PYD.   

Involved in harsh fighting with ISIS for many months, the PYD’s Kurdish fighters control large parts of northern Syria on the Turkish border.  

“We know that some of those who fled from [Turkish] operations against the PKK in northern Iraq joined the ranks of the PYD in Syria. We have a clear stance against terrorist organisations which waged a war against Turkey. We have the same attitude against their affiliates.” said Prime Minister Davutoğlu. “Just as the United States and other friendly allies fight against al-Qaida linked groups, Turkey is determined to fight against the PKK and its affiliates.”

Goldman Sachs: The Third Wave of 2008’s Financial Crisis is Coming

In 2008, the U.S. real estate and investment banking collapsed, resulting in a financial disaster that is returning in a third wave.

Goldman Sachs analysts led by Peter Oppenheimer stated that the new crisis is characterized by a triple-whammy of rock bottom commodities prices, China’s stalling growth and other emerging markets economies, and low global inflation. The triple-whammy is a result of the banking collapse and European sovereign debt crisis, what experts call a debt supercycle that has taken place over the last few decades.

During the first two debt-fuelled crises, central banks all began to lower interest rates, encouraging investors to lend in emerging markets like China for a decent return. However, now that interest rates may be on the rise, lenders are pulling out of commodities.

During the first wave in 2008, the same situation happened along with the crash of the U.S. housing market. The low interest rates were put into place to grow credit and increase leverage, particularly in China. Combine this with China trying to escape the middle-income trap and the plunge of global commodity prices, and a new crisis is not very far away. At best, the situation would be a painful readjustment period for China.

The global economy will soon slow down thanks to developed economies raising interest rates. The raised rates will also apply to safer assets such as government bonds, which gives investors less incentive to take risks overseas in emerging markets. Without the investments, emerging market companies can’t fund big projects, which in turn, slows down the global economy.

What makes the situation even worse, is that recovery from the crisis is continuously stalled due to the different stages of the economy interacting with each other. In 2010 and 2011, the EU sovereign debt crisis derailed the U.S. economic recovery.

What will it take for the world to recover from the financial crisis? All excess lending in emerging markets have to be worked through, and investors will have to take losses.

Putin Confirms Protecting Assad Regime

It seems now that President Vladimir Putin has confirmed what many have continued to suspect. On state run Russia 24 TV Putin acknowledged that the Russian airstrikes in Syria are meant to bolster President Bashar al-Assad’s regime.

“Our task is to stabilize the legitimate government and to create conditions for a political compromise … by military means, of course, The units of international terrorists and their ilk have no desire to negotiate with the Syrian government, who is almost sieged in its own capital.”
Russia has said it’s coordinating with the Syrian regime to target ISIS and other terrorists. Al-Assad has used the term “terrorists” to describe Syrians who seek his ouster.

Until now, Putin and the Russian military have stated numerous times that their main objective in Syria was to fight the Islamic State.

CNN military analyst Lt. Col. Rick Francona said he had no doubt Russia was targeting Syrian rebels rather than ISIS.

“I think it’s very apparent from the target sets that we’re watching. Even the maps that are released from the Russians themselves show where they’re concentrating their airstrikes,” Francona said.

“And if you look at the map where they are hitting, most of them are concentrated in that area between Hama and Aleppo — and that’s where the Syrian rebels have had success over the past two months.”

The bombings are numerous. The Russian Defense Ministry said it has struck 53 alleged Islamic State targets in the past 24 hours, destroying command centers, ammunition and fuel depots as well as training camps.

In the meantime, according to a government official, U.S. forces carried out an airdrop of small arms ammunition on Sunday to Syrian Arabs in northern Syria, a U.S. military official said on Monday.

The official, speaking on condition of anonymity, said the airdrop of supplies to the opposition fighters was part of a revamped U.S. strategy announced last week to help rebels in Syria battling Islamic State militants.

Russia Denies Missiles Landed in Iran, Despite Pentagon Reports

Pentagon officials reported Friday that the 4 of the 26 missiles fired by Russian warships in the Caspian Sea landed in a rural area of northern Iran.

Both Iran and Russia deny the claims, saying that it’s propaganda. Russia states that all 26 missiles hit ISIS targets in north and northwest Syria. The Russian defense ministry posted this on Facebook: “No matter how unpleasant and unexpected it is for our colleagues in the Pentagon and Langley, our strike yesterday with precision-guided weapons at Isis infrastructure in Syria hit its targets.”

Reports on Iranian TV indicated that an “unidentified flying object” had crashed and exploded in a village, killing a number of cows. At this time it’s still unclear if that object was a Russian missile, but social media posts showed missiles flying overhead at low altitudes.

A U.S. defense official said that the missiles used by Russia to attack Syrian targets are typically used to attack heavy air defenses, which the Syrian rebel groups do not have. They speculate that the use of the cruise missile is a sign of Russia’s power to the rest of the world.

The Pentagon report comes days after Russian forces coordinated attacks with the Syrian military to attack Syrian rebel groups. Russia continues to claim that their presence in Syria is to fight ISIS, despite their continuous attacks on groups that are against the Syrian President Bashar al-Assad regime.