Wednesday, August 3, 2016

European Bank Rebound Not Enough To Save World Stocks From Further Losses

By Jamie McGeever
Reuters
August 3, 2016

World stocks fell for a third straight day on Wednesday, depressed by growing nervousness surrounding central bank policy and the recent spike in world bond yields, although European bank shares rebounded after two major earnings reports.

Japanese stocks led the way, pushed down nearly 2 percent by the recent surge in Japanese government bond yields and the strength of the yen, overshadowing the slight rebound in European shares from Tuesday's three-week lows.

Shares in European banks HSBC (HSBA.L) and Societe Generale (SOGN.PA) rose as much as 5 percent after reporting second quarter earnings, a glimmer of light for the region's financials amid the recent gloom.

But that failed to lift the broader European indexes and U.S. futures pointed to a softer open on Wall Street ESc1.

In bond markets, yields were little changed on the day, but still well up from recent lows following the shakeout in debt markets globally since the Bank of Japan's policy meeting last Friday and as eyes turn to the Bank of England on Thursday.

"Investors are slowly realizing that with every spin of the central bank policy chamber the magazine is getting emptier," said Michael Hewson, chief market analyst at CMC Markets in London.

"The larger concern here given recent market reaction to policy moves by central bankers is that policymakers are losing the confidence of investors," he said.

In early trade the index of Europe's leading 300 shares was down 0.3 percent at 1,316 points .FTEU3 and Germany's DAX .GDAXI was down 0.4 percent at 10,104 points.

Banking shares rose 1.5 percent .SX7P, lifted by SocGen and HSBC after their respective earnings reports. SocGen profits beat expectations and HSBC announced a $2.5 billion share buyback plan.

MSCI's global share index fell 0.5 percent .MIWD00000PUS for its third straight decline, a run not seen since early June. Japan's Nikkei fell 1.9 percent .N225.

Credibility Test

The sharpest moves lately have been in sovereign bond markets where a sudden spike in yields stirred speculation that a multi-year bull run in prices might finally be nearing its end.

While Japanese bonds steadied on Wednesday they have still suffered the worst sell-off in over three years as investors feared the BoJ was out of easing ammunition and might leave it to fiscal policy to stimulate the economy.

Tokyo on Tuesday approved 13.5 trillion yen ($132 billion) in fiscal measures and the IMF urged Japan to mix fiscal stimulus with labor market reforms.

Bond bulls were worried the Bank of England might also under-deliver at its policy meeting on Thursday, putting the onus on debt-funded government spending to support growth.

"I would vote for no change in rates or QE (quantitative easing," former BoE policymaker Charles Goodhart told Reuters, adding that the Bank has effectively run out of policy ammunition and that further stimulus would be ineffective.

"There's so much assumption that the Bank will cut rates that even though the effect of that will be minimal, they will do it, because not doing it would have an adverse effect on their credibility," he said.

The 10-year UK gilt yield was unchanged at 0.80 percent GB10YT=RR and the comparable Bund yielded -0.4 percent EU10YT=RR, both up around 10 basis points so far this week.

Benchmark 10-year U.S. Treasuries were also little changed on the day at 1.54 percent US10YT=RR, and also up around 10 basis points this week, even though domestic data has generally been soft.

The recent outbreak of weaker U.S. data has further pushed back expectations for when the Federal Reserve might hike rates -- the market is not fully priced for a move until well into 2018 -- and taken a heavy toll on the dollar.

The dollar touched a near six-week trough against a basket of currencies .DXY, while the euro reached its highest since mid-July around $1.1230 before easing back to $1.12EUR=.

Against the yen, the dollar was at 101.13 yen JPY= having got as low as 100.75 and down from 105.33 in just four sessions.

In commodity markets, oil prices steadied in Asia but remained vulnerable to worries about a glut in both crude and refined product. [O/R]

Brent crude LCOc1 edged up 0.4 percent to $41.93 but remained near four-month lows reached on Wednesday. NYMEX crude CLc1 rose 0.5 percent to $39.70 a barrel, but was still under the psychological $40 level.


Article Link to Reuters:

U.S. Crude Remains Below $40 As Oversupply Weighs

By Henning Gloystein
Reuters
August 3, 2016

Oil prices remained weak on Wednesday, with U.S. crude below $40 per barrel and Brent under $42, as fuel oversupply and stuttering economic growth weighed on markets, although prices did receive some support from a weaker dollar.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading at $39.54 per barrel at 0651 GMT (2:51 a.m. ET), slightly above their last close and well below the $40 marker they settled below for the first time since April in the previous session.

International Brent crude futures LCOc1 failed to hold $42, trading at $41.77 per barrel.

Analysts said a weaker U.S. dollar, which has shed 2.5 percent in value against a basket of other leading currencies .DXY since July highs, was lending oil markets some support by making fuel imports cheaper for countries using other currencies, potentially stoking demand.

But they added oil prices would be under downward pressure in the near-term due to rising supplies, including from Libya, high crude and refined product inventories, as well as an uncertain demand outlook.

"In the last 72 hours, there have been reports of successful negotiations to re-open blockaded oil terminals in Eastern Libya and U.S. airstrikes against Daesh (ISIS) in Sirte. These increase the chances of a production ramp near-term, from 300,000 barrels per day (bpd) to 600,000 bpd," Morgan Stanley said on Wednesday, although it added that "longer-term (production) growth still looks challenging."

The fuel market's weakness was also seen in physical markets, with Abu Dhabi National Oil Co (ADNOC) saying it had cut the July retroactive selling price for its benchmark Murban crude MUR-OSP to $44.60 per barrel, dropping the grade's differential to Dubai to the lowest in eight months.

"Risks for oil remain skewed to the downside in 2H16. Supply disruptions and risk appetite were supportive April-June, but fundamental headwinds are growing, which outnumber any recent positives," Morgan Stanley said in a separate note to clients.

The bank said the economic outlook was also weak: "We expect global growth to move below consensus estimates," Morgan Stanley said.

Oil markets have been dogged by oversupply that started in the crude sector more than two years ago and which has since spread to refined products, leaving storage tanks filled to the brink, and unsold fuel stored on ships.

However, other analysts said recent price falls were overblown, with Citi saying bears, who speculate on falling prices, having "gone wild in oil at $40."

Standard Chartered bank said there was "no fundamental justification for recent oil price falls" and that "the global oil market has rebalanced, and U.S. crude supply and inventories are expected to fall."

Article Link to Reuters:

How Hackers Could Destroy Election Day

Donald Trump is already warning that the election’s going to be ‘rigged.’ Maybe, maybe not. But hacking the vote—and throwing the country into chaos—is terrifyingly simple.


Shane Harris
The Daily Beast
August 3, 2016

Stealing and leaking emails from the Democratic National Committee could be just the start. Hacking the presidential election itself could be next, a bipartisan group of former intelligence and security officials recently warned. Whomever was behind the DNC hack also could target voting machines and the systems for tabulating votes, which are dangerously insecure.

“Election officials at every level of government should take this lesson to heart: our electoral process could be a target for reckless foreign governments and terrorist groups,” wrote 31 members of the Aspen Institute Homeland Security Group, which includes a former director of the Central Intelligence Agency and a former secretary of Homeland Security.

That echoes warnings computer security experts have been sounding for more than a decade: that the system for casting and counting votes in this country is also ripe for mischief.

It also appears to mirror the concerns of one presidential candidate.

“I’m afraid the election’s going to be rigged. I have to be honest,” Donald Trump told voters in the key swing state of Ohio this week. Trump has complained before about bias and interference in the Republican nominating process, but this was the first time he claimed that the general election would be targeted.

A spokesman for Trump’s rival, Hillary Clinton, dismissed the Republican nominee as a “reflexive conspiracy theorist.”

But the election system in the United States can be manipulated, experts warn, through targeted attacks on its several weak points.

Whether Trump knows that is unclear. But he was be priming the pump for Election Night mayhem—and perhaps playing right into hackers’ hands. Voters already told to be on the lookout for shenanigans would be rightly incensed to learn that their votes had been manipulated. And a candidate who merely suggested that the system had been hijacked—without offering any proof—could inflame those passions and spread uncertainty. And God forbid the campaigns wind up suing one another over disputed ballots; the Supreme Court is down a justice, and is tied 4-4 between liberals and conservatives.

It’s hanging chads weaponized,” former National Security Agency. Stewart Baker told NBC, referring to the 2000 election’s paper ballot controversy.

Surely, hackers know that. If someone really wanted to “rig” the election, here are five ways he might do it, from attacking the ballot box to exploiting the raw emotions stoked by a conspiracy-minded candidate.

Intercept the Ballots

Once ballots are cast at a polling place, they’re sent to another location to be counted. And while they’re in transit, they’re vulnerable to tampering—especially if they travel electronically.

Thirty-one states and the District of Columbia allow military personnel and overseas voters to return their ballots electronically, according to Verified Voting, a non-profit group that advocates transparency and security in U.S. elections. “The election official on the receiving end has no way to know if the voted ballot she received matches the one the voter originally sent,” the group warns.

Some ballots are sent through online portals, which exposes the voting system to the internet. And that’s one of the most dangerous things elections officials can do, because it provides a remote point of access for hackers into the election system.

“Anything that doesn’t absolutely have to be connected to the internet, don’t connect it,” Pamela Smith, Verified Voting’s president, told The Daily Beast. U.S. officials have also given that same advice to the owners and operators of critical infrastructure, such as electrical power grids. Smith and her colleagues recently told U.S. officials crafting computer security guidelines that elections systems should also be treated as vital national assets, and protected as such.

Some ballots are returned via digital fax or email. And some—bafflingly—are sent via email.

“Without encryption, emailed ballots can be easily modified or manipulated en masse while in transit from the voter to the local election officials,” David Jefferson, a voting security expert and computer scientist at Lawrence Livermore National Laboratory, warned in a blog post in 2011.

The threat is still real. Jefferson called it “trivial” for someone with a modicum of technical skills to filter out ballots from a particular county or state and “to automate a process to either discard ballots that contain votes she does not like, or replace them with forged ballots that she likes better, all the while keeping the voter’s signed waiver and envelope attachments intact. Such malicious activity would only result in a transmission delay on the order of one second or so.”

Most states that allow voters to return ballots via the internet limit the practice to overseas voters. But in close elections, those votes could make a difference. Alaska is also unique in that it allows anyone in the state to send in their ballots online.

“Marking and sending votes over the internet is my biggest concern,” Smith said. “They could be infected or tampered with. Or something could just go wrong and you couldn’t do a good recount.”

That’s especially concerning in states that allow voters to electronically return their ballots but don’t have paper backups to record how that person actually voted.

Lie to the Voting Machines


This may be one of the trickier hacks to pull off, but potentially one of the most damaging.

Ballot definition files are an indispensible piece of the electronic voting system. They tell a voting booth a what precinct it’s sitting in, which races appear on the ballot, the candidate’s relationship to those races, and other essential information that a voter needs to cast his ballot correctly. When a voter touches a candidate’s name on a machine’s screen, it’s the ballot definition file that tells the machine to record that touch as a vote. The file actually defines how the machine sees the ballot.

And how are ballot definition files delivered to the voting machine? In some cases, via the internet. A corrupted ballot definition file could, in theory, tell the machine to count votes for Clinton as votes for Trump, and vice versa.

Such a mix-up has actually happened, though not by design. In a 2006 county election in Iowa, officials were surprised to find a popular incumbent who’d been in office more than 20 years losing to a practically unknown 19-year old college student. When they stopped electronic voting and counted ballots by hand, they saw that the voting machines were miscounting all the races on the ballots.

It turns out that the machines weren’t programmed to know that not every ballot in the county looked alike. Some put one candidate’s name at the top in one precinct, and others changed the order. This is a process known as “ballot rotation,” and it’s meant to avoid favoritism or bias by always having one candidate’s name at the top of the ballot. The machine didn’t know that.

In a hack, the ballot definition file could be corrupted not to recognize this rotation, throwing the whole election off kilter. How badly? In that Iowa race, the voting machines had the incumbent coming in 9th place out of 10 candidates. When officials recounted the ballots by hand, they saw he had actually won.

Target a State with No Paper Trail


Electronic voting machines pose risks. But jurisdictions can minimize them by creating tangible records called voter-verified paper audit trails. Think of it like a receipt that shows the voter how his selection was counted. Audit trails also let election officials conduct a hand-count if necessary. If a hacker changed the votes cast on a machine, the paper trail should tell counters for whom the votes were really meant.

But five states use electronic voting machines with no auditable paper trail—Louisiana, Georgia, South Carolina, Delaware, and New Jersey, according to data from Verified Voting. And seven states use a mix of paper ballots and electronic machines with no paper trail. Among them are the electoral battlegrounds of Florida, Virginia, and Pennsylvania.

Experts say states with no or incomplete audit trails pose a prime target for manipulation. If a hacker altered the vote totals in the machine, not only would there be no paper record to provide an authoritative count, but election officials might not even realize they’d been hacked, because the only record of the vote count would be the compromised machine.

“This is one of those things about paperless, electronic voting that makes it so unusual and problematic. How would you know?” says Smith of Verified Voting.

Voters in Washington state got a taste for this uncertainty in their 2004 gubernatorial election, Smith says. The election results were close—down to 100 votes in some counties—but in places that used voting machines without paper records, the candidates had to just trust that the machines had recorded the votes properly. They couldn’t be recounted by hand.

And in one election in North Carolina the same year, a machine with no paper trail that was used for early voting in a county government office inexplicably stopped counting votes. About 4,500 were irretrievably lost, in a statewide contest that was decided by fewer than 2,000 votes, Smith says.

“In a situation like that, what do you do? They didn’t even have punch cards to hold up,” she said, alluding to the infamous 2000 presidential recount in Florida, where election officials had to visually inspect cards to determine which candidate voters actually cast a ballot for.

Some counties in Florida are using electronic machines now, which were introduced to reduce the likelihood of another recount fiasco. But in Miami-Dade and Broward, the scene of so much confusion in 2000, there’s a mix of paper ballots and machines with no paper trails.

Go After Wireless Systems


Machines that can connect to each other or the internet wirelessly are the soft underbelly of election hacking.

In one of the most notorious cases of vulnerable election systems, researchers from the Virginia Information Technologies Agency found that WINVote, a touchscreen voting machine used in elections between 2002 and 2014, including three presidential races, contained wireless cards that would let an attacker “access the WINVote devices and modify the data without notice from a nearby location.”

The machines communicated with each other using an encrypted wireless system, but foiling it was easy: the password to gain access was “abcde,” which the Virginia researchers charitably described as “weak.”

“With that passphrase it was possible to join to the WINVote ad-hoc network with specialized security workstations and start attempting to compromise the WINVote device’s operating system,” the researchers wrote.

Virginia decertified the machines, and they’re no longer in use. In fact, no state uses WINVote, according to research from Verified Voting. But any election system that uses wireless components at other points in the tallying process is potentially at risk. That includes machines that may have wireless systems that election officials think they’ve disabled, but are actually still turned on. That was the case with WINVote.

Say You Hacked The Vote, Even If You Didn’t


Hackers don’t need to actually hijack a voting machine or ballot software to undermine confidence in election results. Merely the credible claim that an election had been tinkered with could compel a candidate’s supporters to cry foul, particularly if the vote counts are close or if the candidate performed worse than expected.

“If you have a system that’s been shown to have vulnerabilities, even if someone doesn’t attack them, but creates the impression that they might have, in a closely contested election you’ve got a problem,” Avi Rubin, a computer scientist at Johns Hopkins University, and one of the first technologists to warn about vote hacking, told The Daily Beast.

Given Trump’s claims that the system is rigged, and his pattern of inciting supporters, it’s not hard to imagine the nominee seizing on just the claim of foreign hacking as evidence of interference.

“Launching a disinformation campaign on social media, or via text messages, is not challenging. And you only need a small percentage of people [to react] to have results,” John Wethington, a vice president at computer security company Ground Labs, told The Daily Beast. Disinformation can also be used to depress turnout. “Tell them that a particular polling location is closed. Or notify them that the voting machines in a particular area have been compromised,” Wethington said. People might stay away if they think the election is already stacked against them.

Particularly if their candidate tells them so.


Article Link to The Daily Beast:

How Not To Write About Rio

International media should shelve tired clichés and pay attention to local struggles pre- and post-Olympics.


Politico EU
August 3, 2016

With an estimated 30,000 journalists set to descend on Rio de Janeiro to cover the 2016 Olympic and Paralympic Games, we can expect samba beats, aerial beach shots and moving stories of superhuman athletic feats to dominate international media coverage. We’re also sure to see a number of predictable mistakes: false information, sensational reporting on violence and poverty and, as the Games come to a close, the usual rush to label them a resounding “success.”

Foreign journalists unfamiliar with Rio have already made bewilderingly incorrect claims. Rio is not the capital of Brazil, as a surprising number of articles have suggested. According to Australia’s Herald Sun, 75 percent of Rio residents live in favelas. The actual figure is closer to 25 percent. The error must have left Aussie athletes a little nervous, especially when the Australian Olympic Committee categorically labeled favelas as dangerous “no-go zones.” USA Today claimed 40 percent of Rio favela residents use crack — a terrifying suggestion and, of course, an enormous exaggeration.

“Slum” is a lazy translation; these working class communities are not all impoverished.

These errors reflect an already inescapable cliché: Rio’s favela neighborhoods are the city’s “infamous” or “notorious” “underbelly.” These overused, sensationalist phrases need to be retired.

Yes, most favelas lack adequate sewage infrastructure, and some favelas are sites of drug trafficking and violence — symptoms of decades of government neglect alternating with government oppression. But contrary to what fans of “City of God” or “Elite Squad” or the Daily Mail might imagine, less than 1 percent of favela residents are involved in trafficking. Most favelas have no trafficking presence at all.

“Slum” is a lazy translation; these working class communities are not all impoverished. And most homes are built sturdily of brick, so “shantytown” is a misnomer too.

If there’s one thing that can shift this narrative, it’s the proliferating network of social media savvy community journalists and activists from the favelas and the city’s periphery. They denounce human rights violations and abandoned promises of a brilliant Olympic legacy. They document the diversity, communal memory, identities and resistance of these historically marginalized neighborhoods.

The more international journalists engage with these community leaders, the more meaningful and informed foreign reporting on the city’s Olympic moment will be.

* * *

Despite these missteps, the international press has done good work in highlighting the gap between the government’s rosy rhetoric and the more complicated reality. There have been some excellent investigative and news pieces about pre-Olympic Rio that explore citizens’ day-to-day experiences in a transforming city and examine what is driving development. A Guardian interview with billionaire Olympics developer Carlos Carvalho sparked reactions from Brazilian media and the mayor when Carvalho admitted his desire to create a city “of good taste” by excluding the poor.

The media is compiling evidence that the average Brazilian doesn’t stand to gain much from the Games, and that claims the event would create a better, more modern city for all were always a brazen bluff.

In response to the scrutiny, Rio’s mayor Eduardo Paes felt compelled to respond with no less than three opinion pieces in English-language outlets this July, to dispute “all the pessimism.”

But, sadly, much of the reporting unabashedly neglects the average Rio resident and focuses exclusively on potential threats to Olympic athletes and tourists. Articles decry sewage in the water because it may affect the athletes, not because it has destroyed the livelihoods of fishermen or because it poses a serious health risk to locals.

"If there’s one mistake...international media should avoid, it is letting the big sporting event overshadow critical narratives."

Journalists ponder whether athletes and tourists will be safe, without reflecting on why Rio’s crime and violence rates are so high in the first place, or questioning what effect an expanded force of 85,000 security officers will have in a city where killings by police are a common occurrence.

If there’s one mistake that international media should avoid, it is letting the big sporting event overshadow critical narratives, and then abandoning them completely once the circus leaves town.

This has happened before. Ahead of the 2014 FIFA World Cup, the media openly questioned the monetary and social costs of hosting the event. Brazil-wide protests in 2013 helped ensure local activists’ questions of “World Cup for who?” and “At what cost?” were picked up by international press.

Then, following an immensely entertaining football tournament — in which Brazil suffered a bitter loss to Germany in the semi-finals — international headlines like this one from the New York Times proclaimed, “Success for Brazil, just not on the field.” Similarly, Bloomberg News predicted “Brazil’s success at hosting World Cup bodes well for Olympics,” while the BBC examined “How Brazil silenced its critics.”

“Will it be ready?” hysteria always precedes major events. As a result, the host country receives praise for simply seeing the event through from start to finish.

Before the 2014 World Cup, thousands of families were removed to clear the way for infrastructure. At least eight construction workers died during preparations, a newly constructed overpass bridge collapsed and killed two people, activists were preemptively arrested, protesters were tear-gassed — the real answer to “How Brazil silenced its critics” — and Brazilian taxpayers were left with an enormous bill.

"Media outlets are quick to claim these types of events a success based on unspecified — but apparently low — standards."

In declaring the tournament to be an unequivocal “success” for Brazil, the international media failed to do its job. As mega-events geographer Christopher Gaffney observed, “the pessimists were either shunted aside, swept up in the euphoria, or never interviewed again.”

This shift in discourse is typical. Media outlets are quick to claim these types of events a success based on unspecified — but apparently low — standards.

Political scientist Jules Boykoff examined Canadian coverage of the Vancouver 2010 Olympics and found that reports before the Games were more critical and inclusive of dissenting views, whereas as the event wrapped up, media “championed the Olympics as a success.”

This superficial treatment is a serious problem. It whitewashes the immense economic and socio-political side-effects of hosting a mega-event. It reassures future hosts that they too will not be held accountable to their bold bid claims. Blind, celebratory discourse hinders efforts to demand meaningful change in the way these events are held.

In a city like Rio, a verdict of “success” would undermine the legitimacy and urgency of the population’s ongoing struggles as an economic crisis erodes public services. It would set back the significant work done by activists to draw attention to these pressing issues.

Journalists should not abandon critical reporting during and after the Games. Only by continuing to ask tough questions will they empower Rio’s civil society and bring about the reform mega-events desperately need.


Article Link to Politico EU:

WSJ: Too Many Politicians Try To Hide The Real Problem

When government fails, more government is proposed—like asking the arsonist to put out the fire.


By Ron Johnson 
The Wall Street Journal
August 3, 2016

In October 2009, I gave a short speech at a tea party rally in Oshkosh, Wis. Having owned and operated a plastics manufacturing business for 31 years, I was asked to talk about the harmful effect of government regulations on business expansion and job creation.

I could have spoken for hours on that subject. Instead, I told the story of my daughter. Carey was born with a serious heart defect but was saved by wonderful medical professionals who had dedicated their lives to saving others.

The purpose of telling Carey’s story was to highlight the individuals who make America great day in and day out. I also wanted to emphasize that instead of demonizing success, we should celebrate and incentivize it.

I decided to run for office, and was elected to a Wisconsin U.S. Senate seat in 2010, because I was panicked for our country. Six years later, I am more panicked.

The public is justifiably frustrated and angry over the present state of the union. But elected officials and candidates running for office cynically use demagoguery to misdirect the public’s attention away from the real culprit: big government.

Our Founders, who fought to free themselves from dictatorial monarchies and aristocracies, understood that as government grows, freedom necessarily recedes. Because our schools have de-emphasized history, too many of our fellow citizens have never been taught this undeniable truth.

Instead, they have been led to believe that government is benevolent and capable of solving their problems. When government predictably fails, scapegoats are found and targeted to shoulder the blame. Even worse—like asking the arsonist to extinguish the fire—more government is then proposed to fix the very problems it most likely has only made worse.

We will never solve the enormous challenges facing America by sticking our heads in the sand, falling prey to demagoguery or relying on big government. As we are witnessing—before and during the current campaigns—the political process doesn’t lend itself to prioritizing problems, much less solving them.

Incredibly, neither candidate from the two major parties is seriously addressing our nation’s staggering debt. As former Chairman of the Joint Chiefs Adm. Mike Mullen has been saying since 2010: “The most significant threat to our national security is our debt.” I agree. We hear politicians talk about this “unsustainable path”—but few understand the numbers behind the rhetoric. Here’s the bad news.

Currently, our total debt exceeds $19 trillion. According to the Congressional Budget Office, the projected accumulated deficit over the next 30 years—the baby-boom generation’s retirement bubble—is $103 trillion.

To put that into perspective, the net value of all assets held by American households and businesses today totals $121 trillion. Now you know what is meant by unsustainable.

The $103 trillion projected deficit has three primary components: Social Security, $14 trillion; Medicare, $34 trillion; and interest on the debt, $55 trillion. If we want to avoid paying creditors all that interest, we need to address the deficits in Social Security and Medicare.

During a White House meeting in August 2013, I asked the president to use his bully pulpit to tell the American people the truth about the depth of our debt and deficits. He replied: “Ron, we can’t show the American people numbers that big. If we do, they’ll get scared and give up hope. Besides, we can’t do all the work. We have to leave some work for future presidents and future Congresses.”

This looming crisis hangs over my evaluation of every other problem America must confront. It should be at the forefront of every campaign and policy debate. Unfortunately, as Mr. Obama’s comment illustrates, it is largely being ignored, along with a host of other problems.

Our military is being hollowed out, and our ability to protect and project American values and leadership significantly weakened. Islamic terrorism is a real and growing threat and our borders are not secure.

We are not winning America’s wars on poverty or drugs, and both efforts have produced serious and destructive unintended consequences—including generational dependence on government assistance, overcrowded prisons, and too many fatherless homes. Our electrical grid is vulnerable to a number of threats, including cyber attacks—which also threaten other critical infrastructure, our financial systems and industrial technology base.

To address these enormous challenges, our economy must achieve its full potential. At approximately 2% real annual growth, we are experiencing the weakest recovery since the end of World War II. Boosting annual growth to 3% adds $14 trillion to our economy over 10 years, 4% adds $29 trillion.

Even with the meager economic growth we’ve experienced since 2009, annual revenue to the federal government has increased by more than $1.1 trillion. By reducing the enormous regulatory burden, replacing our tax system with one that is simple and globally competitive, and keeping energy prices low while we protect our environment, our economy can be dramatically strengthened.

Unfortunately, career politicians and vacuous campaigns rarely give any of these issues the serious attention they deserve. Witness how the recent ISIS-inspired attacks have failed to promote a serious discussion on how to defeat ISIS and Islamic terror. Instead, we’ve debated gun control.

For my part, I intend to campaign for Wisconsin’s U.S. Senate seat by telling the truth and focusing on these serious challenges instead of all the nonsense. Wish me luck, and pray for America.


Article Link to The Wall Street Journal:

Why Political Elites ‘Tax-Shame’ Outsiders Like Trump

By Betsy McCaughey
The New York Post
August 3, 2016

Hillary Clinton and the media again are trying to goad Donald Trump into releasing his tax returns, suggesting he’s unwilling to pay his “fair share.” Sadly, even a few of Trump’s fellow Republicans are piling on. Their crazy premise: Paying the IRS more than you legally owe makes you a better person.

That’s nonsense.

Call their assault “tax shaming” — demonizing high earners who take advantage of perfectly legal opportunities to lower their taxes. It’s part of the Democratic Party’s class-warfare toolkit.

Trump is wisely resisting calls to publicly air his tax laundry.

He knows releasing his returns would suck him into a media feeding frenzy dragging on right up to Election Day, as opponents and reporters make a federal case out of every line of his returns and clobber him for paying anything less than the maximum rate.

This focus on Trump’s personal tax returns distracts from the more important issue: Tax cuts are needed to jumpstart our anemic economy. Yet Clinton and running mate Tim Kaine think the opposite. They keep asking crowds to raise their hands if they think Trump is paying enough in taxes. “I don’t see a lot of hands,” Kaine jokes.

Tax shamers are trying to entangle Trump in the same trap they used successfully against Mitt Romney in 2012. President Obama, running for re-election, ran television ads hammering Romney for relying on “every trick in the book” to pay only 15 percent of his income in taxes — less than half the top rate at the time.

Trump is on to the tax-shamers’ ploy, and even said on Sunday he thinks Romney lost the election because of it.

Monday’s New York Times editorial did it again, smearing Trump without even seeing his returns and insinuating the tycoon uses “tax breaks that ordinary voters do not exercise.”

Of course they don’t, unless they’re also real-estate moguls building office towers and golf courses. It’s a widely accepted best practice in the industry to minimize tax liability by using depreciation allowances, property-tax deductions and other write-offs. No competent business person would do otherwise.

But tax-shaming is one way the political class has rigged the system to discourage outsiders — especially business leaders — from competing for political office. Most politicians don’t mind releasing their tax returns because there’s so little to see.

Voters can get a clear picture of the choice between Clinton and Trump by looking at the financial disclosures they’re legally required to release. Hillary’s is a mere 11 pages — almost all speaking fees and royalties from books she wrote about herself. She’s in the self-promotion business.

Compare that with Trump’s 104-page disclosure. It lists a whopping 185 income-producing business ventures, including office and apartment buildings, resorts and other companies around the world, as well as fees he earns managing other owners’ properties. He’s a builder and job creator, not just a braggart like Hillary.

The same is true of another business titan who cleverly managed to dodge the tax return trap: former New York City Mayor Mike Bloomberg.

Expecting that his billions in business activities would invite unfair criticism, he refused to disclose his tax rate or how much he paid, and allowed reporters to see only his highly redacted returns — and just for a few minutes, without allowing them to make copies. When the press objected that all other candidates were releasing their full returns, he said, “That’s fine. They don’t make anything.”

Tax returns disclose how business owners like Bloomberg and Trump make their money. While Clinton assails Trump for not releasing his tax returns, she’s withholding the transcripts of her paid speeches — keeping under wraps what she said to make her money.

Scrutiny of candidates’ tax returns has become a witch hunt, where legitimate business success and standard accounting practices are punished with suspicion. So far, Trump’s been too smart to take the bait.


Article Link to The New York Post:

Obama Just Became One Of The Great Trolls Of Our Time

By John Podhoretz
The New York Post
August 3, 2016

Surely you’ve heard of Internet trolls, those hardy souls who live to bait others into losing their cool and saying something stupid in response on social media. Trolling has long since transcended its roots in the anonymous content sections of websites to become a standing element of our political life.

And on Tuesday morning, boosted by an approval rating well over 50 percent, Barack Obama became one of the great trolls of our time.

In a statement in which he flatly declared Trump “unfit to be the president,” Obama then turned to senior Republicans and their efforts to distance themselves from Trump’s series of personal insults and his policy extremism.

“This isn’t a situation where you have an episodic gaffe,” Obama said of the former reality TV star’s political missteps. “This is daily and weekly, where they are distancing themselves from statements he’s making. There has to be a point at which you say, ‘This is not somebody I can support for president of the United States, even if he purports to be a member of my party.’ The fact that that has not yet happened makes some of these denunciations ring hollow.”

Consider the complex calculation Obama has made here.

No one in the GOP will dare follow the prescription he has suggested in his remarks — precisely because he’s the one making the suggestion.

Indeed, if House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell were in fact thinking at all seriously about withdrawing their endorsements of Trump, they could not possibly do so now.

They would not appear to be retracting their endorsements out of principle but rather in craven capitulation to the Democratic president who is trying to get his Democratic successor elected.

And he knows it. He isn’t calling on them to do the right thing. He’s wrapping Trump around them and the GOP like a boa constrictor in hopes that the party’s leader is going to cut off the circulation to the party’s body and leave it suffocated, bloodless and dead.

The minute that Trump went disgracefully ballistic on Gold Star parents Khzir and Ghazala Khan, the horrified response was genuine—and the political response practically wrote itself. Initially genuine, the outrage at Trump soon morphed into a all-front tactical onslaught once it became clear the GOP nominee wasn’t going to back down and would, in fact, double down.

Suddenly it became a matter of great moment to Democrats and liberals in the media and on Twitter just what Ryan and McConnell should do in response — oh, you know, for their own good.

It’s no accident, as they say, that Obama made this statement on the very day the New York Times editorial page called on senior Republicans to withdraw their endorsements of Trump. Or that both Obama and the Times are following in the footsteps of Democrats and liberals all over the media and Twitter who have suddenly turned into sober counselors of reason for conservative politicians they customarily despise.

As Nicholas Confessore, a reporter at the New York Times who cut his teeth working for left journals of opinion, tweeted on Tuesday, “There are an awful lot of liberals out there these days consumed with concern for whether the GOP stands up for its own principles.”

And not just professional liberals, but the mainstream media (but I repeat myself).

At yesterday’s press availability, Obama specifically sought out CBS’s Margaret Brennan for the first question. Here’s what Brennan asked: “Given the Republican nominee’s recent comments about the Khan family and his statement that he would consider recognizing Russia’s annexation of Crimea, does it make you question his fitness to be president?”

Brennan teed it up exactly where Obama wanted it. What a coincidence.

Look, Trump brought this upon himself, and it looks like if he goes down he’s going to do his best to bring Ryan and McConnell down with him. In that respect, he is Obama’s servant right now.

The troll has been out-trolled.

I don’t say this out of admiration for Barack Obama as a policymaker or as a serious-minded public servant but as a partisan political operative. I am a conservative who despises what Obama has done as president.

But even a Yankees fan must grudgingly acknowledge the skill of Big Papi when he crushes a homer against your team.


Article Link To The New York Post:

Obama Isn’t On #NeverTrump’s Side

By Noah Rothman
Commentary
August 3, 2016

Now in its fifth day, the controversy over Donald Trump’s response to a Gold Star family who criticized the GOP nominee’s immigration policies regarding Muslims is beginning to feel similar to the backlash over Trump’s attacks on Judge Gonzalo Curiel. After contending that the judge presiding over a civil trial involving allegations of fraud at “Trump University” was biased against the defendant as a result of his Mexican heritage, Republicans—even Trump endorsers—lined up with Democrats to condemn his remarks. With Newt Gingrich and Chris Christie now joining a broad swath of Republicans condemning Trump’s attacks on the Khan family, history is repeating itself.

Amid the fallout resulting from the GOP president nominee’s latest self-inflicted wound, President Barack Obama has sought to inject himself into the process. In adding his voice to the chorus condemning Trump, Obama is not descending from Olympus to offer his authoritative take on events but to put his thumb on the scale for Democrats. Though it’s unsubtle and manipulative, Obama’s plan might also work.

In a departure from the detached view outgoing two-term presidents often adopt when opining on the race for their replacement, President Obama unleashed a searing attack on the Republican presidential nominee.

“The notion that he would attack a Gold Star family that made such extraordinary sacrifices on behalf of our country, the fact that he doesn’t appear to have basic knowledge around critical issues in Europe, in the Middle East, in Asia, means that he is woefully unprepared to do this job,” Obama said. “The Republican nominee is unfit to be president. He keeps on proving it.”

“I think what has been interesting is the repeated denunciations of his statements by leading Republicans,” Obama told reporters at a press conference alongside the prime minister of Singapore. “Why are you still endorsing him? What does this say about your party that this is your standard-bearer?”

Extraordinarily, the president insisted that the point had been reached when Republicans need to say “enough.” In doing so, Obama implied that, by criticizing Trump from inside the Republican tent, Republicans had adopted a half-measure. They should, he appeared to suggest, withdraw their support from Trump entirely and perhaps even actively oppose his bid for the White House.

Those are remarkable comments about an ongoing and delicate political phenomenon from someone who ostensibly supports the direction in which proceedings are moving. Unless, of course, it is not Obama’s intention to catalyze a wave of un-endorsements among Trump-skeptical Republicans but to put a stop to such a prospect before it begins.

The right has proven itself remarkably susceptible to reverse psychology over the course of the last year, but this is a pretty ham-fisted attempt to intervene in the course of Republican events. From this moment on, Republicans who may be inclined to withdraw their support for Trump—itself a remarkable prospect with little historical precedent—will risk being tarred by the nominee’s supporters as having done so at the president’s behest. Republican supporters of Donald Trump would be foolish not to link anti-Trump Republicans to Barack Obama if only to cauterize the wound exposed by Trump’s attacks on a Gold Star family and to stop other Republicans from giving up on the GOP nominee.

It’s fair to say that the flap over Trump’s charged criticisms of the Khan family won’t be the nominee’s last self-inflicted wound. As with his comments about Curiel and his erroneous and slanderous suggestion that American soldiers in Iraq were stealing coalition funds for their own benefit, there will be another controversy that prompts Republicans to wonder whether they should cut bait. When that happens, it will have occurred in the general election—when the electorate’s opinions about the nominees are starting to harden and as voters begin to associate a party’s down-ballot candidates with their presidential nominee. If Trump’s polls are as weak as they have been in the immediate wake of the Democratic nominating convention, there won’t be many ties tethering the party’s elected leaders to their nominee. The temptation will be great to cut him loose. Barack Obama just created a rather substantial downside for those Republicans tempted to pursue this course.

There may be some Republicans who regard it a greater moral hazard to be associated with Trump in November than to be attacked as an Obama acolyte by conservative commentators and blogs. Most Republicans, however, will not take that risk—particularly not if that means creating grist for a primary challenger in 2018. This was hardly sophisticated psychological manipulation on the president’s part, but he likely accomplished what he had to do. What’s interesting is that he felt that he needed to break this emergency glass in the first place.


Article Link to Commentary:

China's Trouble With Bubbles

By Tom Orlik
The Bloomberg View
August 3, 2016

The collapse of China's stock markets a year ago was eye-catching, but in the end, hardly earth-shattering. Despite the pain for millions of retail investors, the fact is that stocks remain a small part of the financial system in China. Their brief, giddy rise and spectacular collapse never really threatened the wider Chinese economy, let alone the global financial system.

That doesn't mean the rest of the world should rest easy, however. While equities remain subdued, bubbles are growing in bonds and real estate -- two markets that play a much bigger role in the mainland economy. The question is whether Chinese regulators can handle a new crisis any better than the old one.

Faith that China can safely manage fast-growing, debt-fueled bubbles assumes its regulators aren’t just as good as their peers in the rest of the world, they're better. Last year’s events should call that confidence into question. Throughout the first half of 2015, policymakers allowed leverage to grow unchecked. When the market peaked and margin calls accelerated the decline, the combined force of financial regulators, public security officials and the state press were powerless to stop the slide.

The situation places a premium on policies, rather than personalities, that can prevent things from unraveling. China needs to find a way to tap the brakes on credit without sending the markets into a downward spiral. Tighter rules and larger capital requirements for wealth management products -- a key source of risk -- are a start. But as long as loan growth continues to accelerate faster than GDP, it’s hard to argue that a true basis for stability has been established.

For evidence the underlying problems remain unsolved, look no further than China's other asset markets. One might've expected that after the trauma of the stock crash, Chinese investors would become a shade more cautious. Nothing could be further from the truth. The equity boom-and-bust was followed almost immediately by a similar cycle in the metal market, which saw steel prices surge almost 80 percent. Property prices in Shenzhen are up 64 percent in the last nine months. Leveraged bets in the fixed income market mean yields continue to creep down, even as default risks grow.

While equities can be dismissed as a sideshow, the same can hardly be said for the fixed income or property markets. The latter is the single biggest driver of demand in China. Equities account for about 7 percent of corporate fund raising; the bond market accounts for about a quarter -- a burst bubble there would have a much larger blast radius. A slew of bond defaults and cancelled issuances in recent months have raised warning flags. So have economic indicators for June, which suggest that the policy-induced boom that inflated property sales and prices earlier in the year may be coming to an end.

None of these problems are going away on their own. Money continues to pour into speculative bubbles -- first in equities, then in metals, bonds and property -- for one big reason: the lack of profitable investment opportunities in China’s real economy. Despite repeated interest rate cuts, Chinese companies remain reluctant to borrow and invest. Capital spending by private firms is on the verge of contraction, leaving state-owned enterprises to do all the work of propping up growth.

The situation is the consequence of a whole cluster of challenges, none of which are easily solved. Overcapacity in sectors ranging from steel to sportswear has made companies reluctant to expand. Slow progress on market opening to the private sector limits space for investment.

Any possible solutions are going to painful. Similar to the situation facing financial regulators, Chinese authorities have to balance the short-term costs and long-term benefits of corporate reform. Sweeping cuts in capacity and aggressive market opening would hammer the state-owned firms that are currently the only force holding up growth. Without such cuts though, stimulus will continue to fuel speculative bubbles.

The lesson of China's 2015 market crash -- that early intervention is less costly than crisis resolution -- is easy enough to learn. With the potential costs rising, it's even more urgent for regulators to heed.


Article Link To The Bloomberg View:

Why Investing In ‘Trump Stocks’ Or ‘Clinton Stocks’ Is A Wasted Vote

Own shares of companies that can succeed in any political climate.


By Chuck Jaffe
MarketWatch
August 3, 2016

Many investors have taken to wondering how they might cash in on “Trump stocks” or “Clinton stocks.” Truth is, trying to divine which stocks will benefit after November’s presidential election is frivolous and even dangerous to your wealth.

The folly of trying to turn current events into investment hunches just played out on a grand scale in Great Britain, where bookies and investing experts alike were sure that the vote to leave the European Union would be defeated. Moreover, if Brexit passed, the British stock markets would tank.

The oddsmakers were wrong, and so were the market observers, because although Brexit triggered a knee-jerk downward reaction, the British stock market then raced off to record highs.

The Brexit investment-wager silliness subsided just as the Republican and Democratic presidential conventions ramped up, which is why the popular sport right now in the financial media and on the talk shows is to cover what stocks to buy for each presidential contender, and which industries are likely to prosper with their election.

Kiplinger’s Personal Finance, for example, picked the seven “best stocks” for each candidate’s potential presidency. Companies tied to Trump included Coach COH, -4.12% – because Trump plans to cut taxes on high earners, so they will have disposable income, and for-profit prison operator The Geo Group GEO, -2.35% (because of his law-and-order pledge) and gun-maker Smith & Wesson SWHC, -1.84%

Clinton stocks included HCA Holdings Inc. HCA, -0.64% SunPower and Wal-Mart Stores, due to her support of the Affordable Care Act, a pledge to install 500 million solar panels by 2021, and plans for tax cuts for low- and middle-income earners.

Likewise, S&P Global Market Intelligence issued a research report about how the election could disrupt certain sectors. While noting that neither candidate may have the juice after election to follow through on their campaign promises, the firm nonetheless tied key issues to market sectors.

Accordingly, consumer-discretionary stocks could be impacted by the outcome of minimum-wage legislation (more likely hurt by Clinton and helped by Trump), health care by the Affordable Care Act (helped by Clinton and hurt by Trump) and industrials, aided by defense spending (both candidates are seen as hawkish, thus good for industrial companies).

Purported analysis abounds, with some experts suggesting that it’s time to make moves now, because the swings that could occur once the outcome is clear could be major.

Market strategist Lawrence McDonald said this week on my show, “MoneyLife with Chuck Jaffe,” that we “must prepare ourselves for a Trump presidency.” He made it clear he was not making a political statement, but that he believes “social tensions are playing right into Trump” and that he expects the vote won’t be close. McDonald suggested that, among other things, a Trump win would trigger a major sell-off in Treasurys, meaning investors would “want to start getting out of bonds.”

By comparison, McDonald noted that a Clinton presidency, from an investor’s perspective, would offer “more of what you have right now.”

But for any long-term investor, the idea that you would overhaul a portfolio on the whims of the voters is ridiculous.

David Trainer, president of New Constructs Inc., an investment-research firm, called the political plays being discussed now, “Yet another baseless theme to encourage investors to trade on non-fundamental but entertaining factors. In the end, the result is mostly that unsophisticated investors further line the pockets of the more-sophisticated investors that create baseless trends to exploit them.”

It’s a bit like using the Super Bowl indicator — where the direction of the stock market for the year is supposedly foretold by the outcome of the game — and putting real money behind what amounts to a coincidence. Sure, history shows that this coincidence occurs about 80% of the time — there are some variations in how the Super Bowl indicator is tallied, giving comfort to true believers — but you still wouldn’t want to lay down big market bets after just three quarters, when the game is too close to call.

Making Trump or Clinton stock plays right now is no different; interesting to talk about, dumb to wager on, and dangerous as a basis to overhaul a portfolio now.

That said, there are plenty of studies to show that U.S. presidential election years typically coincide with favorable markets, and that the market’s long-term trends don’t seem to be affected by the party that holds the presidency.

Ignoring logic to invest on the outcome of a political event and its potential impact makes no sense. Investors would be better off looking at the fundamentals of the companies that pique their interest, although that takes work that betting on a political kick doesn’t.

“As a short-term trade you can find a reason to buy or sell anything, whether it’s a newly elected president or the NCAA tournament,” said Brian Frank, manager of the Frank Value Fund “Long-term, your buy valuation and fundamentals are the only thing that matter.”

So enjoy the conversations about which stocks may profit from politics, but don’t bet on them without first removing your red- or blue-tinted blinders and making sure you invest in a solid business or industry that can succeed regardless of who is in the White House..


Article Link to MarketWatch:

Wednesday, August 3, Morning Global Market Roundup: Bonds Shaken By Stimulus Doubts, Dollar On Defensive

By Wayne Cole
Reuters
August 3, 2016

Asian shares fell on Wednesday while the yen lorded over a weakened U.S dollar as fears that the Bank of Japan may retreat from its massive bond-buying campaign added to a shakeout in debt markets globally.

Worryingly for energy shares, the broad-based decline in the dollar was still not enough to spare U.S. crude oil from its first finish under $40 a barrel since April.

Adding to the jittery mood was a renewed selloff in bank stocks following stress tests in Europe.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 1 percent, backing away from its recent one-year peak.

Japan's Nikkei .N225 lost 0.9 percent as the rising yen pressured exporter stocks while financials slid 2.7 percent.

Shanghai .SSEC was near flat, with a private survey showing growth in China's services sector cooled in July and companies shed staff for first time in four months.

The sharpest moves have been in sovereign bond markets where a sudden spike in yields stirred speculation that a multi-year bull run in prices might finally be nearing its end.

While Japanese bonds steadied on Wednesday they have still suffered the worst sell-off in over three years as investors feared the BoJ was out of easing ammunition and might leave it to fiscal policy to stimulate the economy.

Tokyo on Tuesday approved 13.5 trillion yen ($132 billion) in fiscal measures and the IMF urged Japan to mix fiscal stimulus with labor market reforms.

Bond bulls were worried the Bank of England might also under-deliver at its policy meeting on Thursday, putting the onus on debt-funded government spending to support growth.

"With Japan and the UK set to ease fiscal policy, it will be important to watch whether we are at the beginning of a global policy re-pivot away from monetary easing," wrote analysts at ANZ in a note.

No Fed Hike Until 2018?

The ripples spread all the way to U.S. Treasuries where 30-year yields US30YT=RR hit their highest since July 21 even though domestic data were generally soft.

Disappointing auto sales slugged shares in Ford (F.N) and General Motors (GM.N), which both dropped more than 4 percent.

The Dow Jones Industrial Average .DJI ended Tuesday down 0.49 percent, while the S&P 500 .SPX lost 0.64 percent and the Nasdaq .IXIC 0.9 percent.

The recent outbreak of weaker U.S. data has further pushed back expectations for when the Federal Reserve might hike its rates -- the market is not fully priced for a move until well into 2018 -- and taken a heavy toll on the dollar.

The dollar touched a near six-week trough against a basket of currencies .DXY, while the euro reached its highest since mid-July around $1.1230 EUR=.

Against the yen, the dollar was at 101.19 yen JPY= having fled from 105.33 in just four sessions.

In commodity markets, oil prices steadied in Asia but remained vulnerable to worries about a glut in both crude and refined product.

Brent crude LCOc1 edged up 19 cents to #41.99 and away from four-month lows on Wednesday. NYMEX crude CLc1 edged up 25 cents to $39.76 a barrel, but was still under the psychological $40 level.


Article Link to Reuters:

Judge Refuses Bonuses For Executives At Bankrupt Sports Authority

By Tom Hals
Reuters
August 3, 2016

A U.S. bankruptcy judge refused on Tuesday to allow Sports Authority to pay up to $2.85 million in bonuses to four executives for overseeing the winding down of the national sporting goods chain.

Englewood, Colorado-based Sports Authority filed for bankruptcy in March with hopes of keeping some of its 464 stores open, but battles among lenders and suppliers eventually scuttled those plans. Its final stores closed last month.

"I think it’s just inappropriate to pay senior executives a bonus when all the employees are losing their jobs," said Judge Mary Walrath during a hearing in Wilmington, Delaware.

Sports Authority said the bonuses were essential to ensure executives squeeze the most value out of its assets by adhering to a budget and preventing waste.

The company asked to keep the identities of the executives under seal to "minimize detrimental impacts on employee morale," which prompted an outcry from some of the 14,000 former staffers.

"I’m not surprised the employees are sending angry emails about it," said Walrath.

Bankrupt companies often get court approval to make special bonus payments to top executives for hitting performance targets designed to maximize value for creditors.

The payments are routinely opposed by the U.S. Trustee, which is the government's bankruptcy watchdog, and by unions, particularly when aspects of the bonus programs are filed under seal.

Last year, judges rejected bonus plans from both Molycorp Inc, a producer of rare earth materials, and GT Advanced Technologies Inc, which developed mobile device screens for Apple Inc (AAPL.O).

Also on Tuesday, Walrath approved a settlement among Sports Authority, its lenders and creditors over the division of the remaining cash and legal claims.

Under the deal, landlords would get most of their unpaid rent that accrued during the bankruptcy, and the lenders would give up claims they could have pursued against suppliers and other unsecured creditors.

Unsecured creditors agreed to drop their request to convert the case to a Chapter 7 liquidation.

The largest U.S. sporting goods retailer, Dick's Sporting Goods Inc (DKS.N), acquired the Sports Authority name and other intellectual property at a June auction.


Article Link To Reuters:

Latest North Korea Missile Launch Lands Near Japan Waters, Alarms Tokyo

By Ju-min Park
Reuters
August 3, 2016

North Korea launched a ballistic missile on Wednesday that landed in or near Japanese-controlled waters for the first time, the latest in a series of launches by the isolated country in defiance of United Nations Security Council resolutions.

The main body of the missile landed in Japan's economic exclusion zone, a Japanese defense official said, escalating regional tensions that were already high after a series of missile launches and the decision by the United States to place a sophisticated anti-missile system in South Korea.

Japanese Prime Minister Shinzo Abe described the launch as a "grave threat" to Japan and said Tokyo "strongly protested".

The missile that landed in the Sea of Japan was launched at about 7:50 a.m. Seoul time (2250 GMT Tuesday) from a region in South Hwanghae province to the southwest of the capital, Pyongyang, South Korea's Office of the Joint Chiefs of Staff said in a statement.

The launch showed North Korean ambition to "directly and broadly attack neighboring countries and target several places in the Republic of Korea such as ports and airfields", the statement said, referring to South Korea by its official title.

The missile appeared to be a Rodong-type medium-range missile that flew about 1,000 km (620 miles), it said.

The South Korean statement referred to just one launch, although the U.S. Strategic Command said it had detected two missiles, one of which it said exploded immediately after launch.

On July 19, North Korea fired three ballistic missiles that flew between 500 km and 600 km (300-360 miles) into the sea off its east coast.

The North later said the launches were part of an exercise simulating preemptive strikes against South Korean ports and airfields used by the U.S. military.

The launches follow an agreement last month between South Korea and the United States to deploy an advanced Terminal High Altitude Area Defense anti-missile system in the South.

North Korea had threatened a "physical response" against the deployment decision.

Japan also said its self-defense force would remain on alert in case of further launches.

North Korea came under the latest round of U.N. Security Council sanctions in March after its fourth nuclear test in January and the launch of a long-range rocket the following month.

Tensions have been high on the Korean peninsula since the January nuclear test. The two Koreas remain technically at war under a truce that ended fighting in the 1950-53 Korean War.


Article Link to Reuters: