Archive for December, 2018

China’s Economy Slowed Again in November

December 14, 2018
“China won’t have double-digit growth like in the past years.”
  •  Industrial output, retail sales weaker than forecast in Nov.
  •  Communist Party to meet next week for Economic Work Conference

China’s economy slowed again in November as retail sales and industrial production weakened, creating a challenging backdrop for policy makers who gather next week to set the tone for the year at their annual Economic Work Conference in Beijing.

Image result for china, stock markets, photos
China’s stock market — FILE photo — Photograph by ChinaFotoPress/Getty Images

Industrial production growth decelerated to 5.4 percent, below all 38 economists’ estimates. Retail sales — formerly a pillar of support for the economy — posted the weakest performance since May 2003, rising 8.1 percent from a year earlier . Chinese stocks fell along with the currency as data signaled a deepening slowdown.

It wasn’t all bad news though. Fixed-asset investment growth firmed, expanding 5.9 percent in the first eleven months of the year, and the surveyed jobless rate dropped marginally to 4.8 percent. That suggests stimulus to cushion the slowdown is beginning to take root.

The data point to a continuation of 2018’s targeted approach to support growth. People’s Bank of China Governor Yi Gang indicated as much late Thursday, saying that monetary policy will remain supportive. Economists expect such support to involve another 200 basis points of reduction to the required reserve ratio for major banks, a measure that’s been used several times this year, according to Bloomberg survey published Friday.

“With consumers cutting back, and output sputtering, the need for stabilization measures is becoming more pressing,” said Frederic Neumann, co-head of Asian economics research at HSBC Holdings Plc in Hong Kong. “Even if the clouds on the trade front lift, at least temporarily, softening domestic demand continues to weigh on growth. Further policy easing will be necessary to arrest the slide.”

Continued Slowdown

Industrial output, retail sales expand at slowest pace for at least a decade

Note: Usually no data in January or February due to lunar new year.

Source: National Bureau of Statistics

The one-year lending rate, which has a broader influence on the economy, is forecast to remain unchanged at 4.35 percent through the first quarter of 2021, according to the Bloomberg survey, signaling that the central bank is expected to avoid adding downward pressure on the currency.

Looming over this year’s economic policy meeting is the urgency of reaching a sustainable agreement on trade with the U.S. before a deadline for higher tariffs expires on March 1. China may see the need to announce further measures aimed at answering U.S. criticism, such as steps to open up protected markets.

China’s Economic Policy Summit Nears, Overshadowed by Trade

Bloomberg’s monthly collation of early indicators correctly predicted the grim November numbers. An expected tapering of strong exports as the ‘front loading’ effect caused by the trade war fades means the first quarter is set to be challenging too.

“The worst is yet to come,” said Sue Trinh, head of Asia FX Strategy at RBC Capital Markets in Hong Kong. “Policymakers will be very worried, particularly with consumption growth falling off a cliff.”

That said, there’s increasing evidence that investment has stabilized. Manufacturing investment growth accelerated for the eighth straight month in November, with state firms leading the way. While that mightn’t be enough to brighten the current picture, it shows that stimulus measures announced during the year are having some effect.

That may encourage more, even as officials work continue to curb financial-sector risks.

What Our Economists Say…

Activity data for November show further weakening in the Chinese economy — with flagging private consumption the most worrying sign. That’s reflected in a notable slowdown in retail sales growth. Stable demand for consumer staples paired with waning demand for consumer discretionary goods suggests that the slowing economy has undermined confidence.
— Chang Shu and David Qu, Bloomberg Economics
For the full note click here

At a meeting of the Politburo led by President Xi Jinping, top leaders signaled that campaigns announced last year against financial risk, pollution and poverty will continue. The nation should further stabilize employment, finance, trade, foreign investment and boost market confidence in 2019, according to a statement published by the official Xinhua News Agency.

On Thursday, the PBOC’s Yi highlighted the balancing act that officials face — supporting growth while refraining from launching large-scale stimulus that would spur financial-sector bubbles and destabilize the economy.

“China won’t have double-digit growth like in the past years,” and it’s stayed around its potential growth rate in recent years, he said.

 Updated on 

— With assistance by Matthew Boesler, Natalie Lung, Yinan Zhao, and Kevin Hamlin



Asian markets sink as profit-takers move in, pound resilient

December 14, 2018

“Persistent uncertainties relating to geopolitical factors, the threat of protectionism, vulnerabilities in emerging markets and financial market volatility”.

Asian markets fell on Friday, putting the region on course to end a broadly positive week on a sour note, as traders took a step back and their profits off the table.

There was also some unease after the head of the European Central Bank raised concerns about the growth outlook for the eurozone owing to issues within and outside the bloc.

The pound showed some resilience, even as European leaders refused pleas for help from Prime Minister Theresa May to push their Brexit deal through a fractured British parliament.

Signs of easing tensions in the China-US trade row helped propel equities this week, with both sides seeming to give key concessions, fuelling hopes they can eventually resolve their differences.

Equity markets have gone into reverse after a broadly positive week

Equity markets have gone into reverse after a broadly positive week Equity markets have gone into reverse after a broadly positive week AFP

But observers noted that dealers will remain on alert for any negative news, including further developments in China’s detention of two Canadians on suspicion of threats to national security.

That move came after a top executive at Chinese telecoms giant Huawei was arrested in Ottawa. She faces extradition to the US over allegations the firm broke sanctions on Iran.

In early trade Hong Kong fell 1.6 percent and Shanghai was down 0.4 percent.

Tokyo finished the morning 1.7 percent lower. A survey of confidence among Japan’s big businesses showed they remain cautious, with worries about the global outlook offsetting fading concerns about the impact of this year’s major earthquakes and typhoons.

Sydney fell 1.2 percent, Singapore was 1.3 percent off and Seoul shed 1.5 percent while Taipei was also more than one percent lower. Wellington, Manila and Jakarta were also down.

On currency markets the pound was holding its own — maintaining gains won after May’s no-confidence vote win — despite the growing prospects of Britain leaving the EU without a deal.

With her agreement having no chance of passing through parliament in its present form, the PM called on her EU counterparts in a Brussels summit to give her some leeway that could get her majority support.

But she has so far failed to win any concessions on the main sticking point over Northern Ireland’s future relationship.

The euro continued to struggle after being sold Thursday in reaction to ECB boss Mario Draghi’s assessment that there were increasing risks to the eurozone.

After announcing the end to years of bond-buying stimulus, Draghi warned of “persistent uncertainties relating to geopolitical factors, the threat of protectionism, vulnerabilities in emerging markets and financial market volatility”.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: DOWN 1.7 percent at 21,439.16 (break)

Hong Kong – Hang Seng: DOWN 1.6 percent at 26,111.39

Shanghai – Composite: DOWN 0.4 percent at 2,622.85

Pound/dollar: DOWN at $1.2633 from $1.2660 at 2130 GMT

Euro/dollar: DOWN at $1.1360 from $1.1361

Dollar/yen: DOWN at 113.46 yen from 113.61 yen

Oil – West Texas Intermediate DOWN eight cents at $52.50

Oil – Brent Crude: DOWN 26 cents at $61.19 per barrel

New York – Dow: UP 0.3 percent at 24,597.38 (close)

London – FTSE 100: FLAT at 6,877.50 points (close)


US-China trade war accelerating South Korean companies’ plans to exit China

December 14, 2018

From economic to diplomatic to military fronts, private sector and government both taking steps to avoid being caught in a clash of major powers

South China Morning Post

t’s an uneasy time for Asian nations as the rivalry between China and the United States intensifies and uncertainty hangs on whether they can resolve their trade war beyond the 90-day truce. In this special series the South China Morning Post explores how the China-US rivalry is affecting four countries in Asia. In part two, Lee Jeong-ho looks at South Korea.

Image result for samsung, corporate,photos

As the confrontation between China and the United States spills over from trade to a wider range of issues challenging their relations, South Korea is taking steps on the economic, diplomatic and military fronts to avoid being caught between the two giants.

By Lee Jeong-ho

South Korea, which relies on the US for its security and on China for its economy, is among the nations that stand to suffer serious collateral damage from the trade war. The clashes of the two heavyweights vying for greater geopolitical interests over the Korean peninsula have sandwiched the “middle power”, with South Korea unable to fully accommodate both the US and China’s demands.

This is not South Korea’s first experience being caught between major powers in a period of transition. Indeed, the peninsula’s location has historically drawn great powers to engage it. Koreans have seen their lands used by major powers as a proxy to achieve geopolitical interests in the first Sino-Japanese war, the Russo-Japanese war and, of course, the Korean war, all of which resulted in millions of casualties and total destruction.

Vowing to learn from history, though, South Korea – both the government and the private sector – is implementing a new strategy to actively hedge the risks.

Samsung Electronics closed its China network equipment manufacturing unit in Shenzhen last year, and moved a production base to Vietnam. Photo: EPA

Economic shelter from the trade storm

The US-China trade collision is accelerating South Korean companies’ plans to exit China and would further lessen their presence in the world’s second-largest economy.

South Korean firms have long considered relocating their production facilities, due to rising wages and political uncertainties in China. Well before the current circumstances, the pace of South Korean manufacturers’ investment in China had already slowed for the past few years due to China’s unfair market practices and increased labour costs, according to a white paper by the Korea Chamber of Commerce in China.

Samsung Electronics, the world’s largest mobile phone maker, closed its China network equipment manufacturing unit in Shenzhen last year, and moved a production base to Vietnam. Samsung is also considering shutting its Tianjin mobile phone production plant by the end of this year, according to South Korean media outlet Electronic Times.

Samsung did not respond to a request for comment.

Still, experts say the US-China trade war has firmed the resolve of South Korean companies to exit China and seek other destinations for their investments.

One beneficiary is Vietnam: South Korean investment there came to US$1.97 billion in the first half of this year, exceeding South Korean investment in China – US$1.60 billion over the same period – for the first time, according to data compiled by the Export-Import Bank of Korea.

A Lotte Mart that closed down in Jiaxing, Zhejiang province, in 2017. Photo: Reuters

The South Korean retail giant, Lotte, is diversifying into Vietnam, planning to build the Lotte Mall Hanoi, a US$600 million multi-purpose shopping centre, by 2020. Construction will include a hotel, flats, offices and a trade-centre complex.

Image result for Lotte, south korea


Kim Ill-san, chief representative of the Korea International Trade Association in Vietnam, said the US-China trade war had spurred many South Korean firms to move factories from China and into Vietnam to avoid tariffs slapped by Washington on products made in China.

“The change in the price of raw materials – due to the US-China trade war – is working as a burden for South Korean firms in China, making them shift their production base to Southeast Asia, including Vietnam,” Kim said.

“China’s increased labour costs would also be another reason for the decision. The [monthly] labour cost of manufacturing workers in China, on average, is approaching US$800 per person, while in Southeast Asia it marks about US$250-400.”

Kim Yun-hee, a senior trade commissioner at the Korea Trade-Investment Promotion Agency office in Beijing, said South Korean corporations in China were particularly concerned about the effects of a protracted US-China trade war.

“Increased cost and changes in exchange rates are some of the direct impacts of the US-China [trade] war on the corporations. Meanwhile, the increased uncertainties in the global trading environment are acting as an indirect impact to burden the businesses,” Kim Yun-hee said.

With a revised US-South Korea trade agreement, or KORUS, recently concluded with the Trump administration, South Korean companies might also consider bringing businesses back to their home, observers said.

“Southeast Asia, so far, has largely been spared from Trump’s tariff wrath … [but] Korean companies might also take another look at their own home market now that a revised KORUS agreement is in place. Higher costs aside, producing at home can at least give Korean companies US market access certainty,” Sean King, vice-president of political strategy firm Park Strategies, said.

Diversifying production facilities would also ease some of the huge fallout South Korean firms have faced from the THAAD dispute.

South Korean firms came under great pressure from China after Seoul deployed the US military’s Terminal High Altitude Area Defence system in Seongju county. South Korea says the anti-missile system is necessary to ward off threats from the North while China sees it as a challenge to its defences.

“The real turning point for South Korean companies in mainland China was … [being] mercilessly targeted by authorities after South Korea deployed THAAD … I think there’s a ‘before and after THAAD’ syndrome for South Korean companies in mainland China,” King said.

North Korean leader Kim Jong-un (left) and South Korean President Moon Jae-in after signing a joint statement at the border village of Panmunjom on April 27. Photo: AP

Minimising the US-China diplomatic factor

In addition to moving production out of China, South Korea is also trying to ensure its influence over the Korean peninsula.

Aside from the US-China trade war, of course, 2018 has been marked by the rapid thawing of relations with North Korea, with President Moon Jae-in seizing the chance to work with the North Korean leader Kim Jong-un. Seoul has focused on rebuilding its relations with Pyongyang, taking part in three inter-Korean summit meetings since April.

“An inter-Korean joint military committee will be activated shortly to avoid accidental military collision … the two Koreas have agreed to enhance exchanges and cooperation,” the September Pyongyang Declaration stated.

One reason behind Seoul’s peace initiatives was to remove the Korean peninsula as a bargaining chip in the US-China competition.

Park Byeong-seug, a South Korean lawmaker with Moon’s Democratic Party of Korea, said Seoul was trying its best to be an independent actor by improving its standing with North Korea during a transitional period of power relationships.

“It is in Seoul’s best interests to minimise its damage caused by the two countries’ hegemonic rivalry … and the only way to achieve that is by enhancing the relations with Pyongyang to create a new diplomatic space. If we go back to the cold war, there is nothing much Seoul can do as an actor,” Park said.

“US-China relations may further deteriorate beyond trade. A currency war and petroleum war between the two countries may ignite in the worst-case scenario.”

The deterioration of inter-Korean relations will only squeeze Seoul’s diplomatic space amid the intensifying US-China rivalry.

“The Korean peninsula becomes a subordinate factor of US-China relations if inter-Korean relations do not improve. This is why the Moon administration is focusing so much on improving inter-Korean relations … It will give Seoul the power to overcome the structural problem between the US and China to maximise Korean interests,” said Boo Seung-chan, a research fellow at the Yonsei Institute for North Korean Studies in Seoul.

South Korean naval destroyers with other vessels during an International Fleet Review held off Jeju Island in October. Photo: AP

Wading into deeper military waters

South Korea is also building up its own defences amid the uncertainty of the US military commitment on the region.

Seoul announced in October plans to expand its maritime forces into a blue-water navy – capable of operating globally, across oceans – to safeguard its strategic interests against China’s maritime expansion over the South China Sea.

A blue-water navy fleet “will contribute to expand the navy’s operational area into far seas, to secure maritime traffic routes, and ensure the free maritime activities and the safety of our citizens”, the South Korean navy reported to parliament in October, adding that it would also build an air command to support military aircraft and airborne weapon systems.

South Korea’s navy has traditionally been almost exclusively concerned with coastal operations, to maximise its military readiness against North Korea. But as Beijing – which has overlapping exclusive economic zones (EEZ) with Seoul in the Yellow Sea – speeds up its military modernisation, Seoul’s concerns have grown.

The South Korean defence ministry said in September that it would closely monitor China’s installation of buoys in the two countries’ EEZs.

That concern grew sharply last year as US President Donald Trump repeatedly complained that South Korea was relying on the US too much for its security, raising the possibility that the US might weaken its commitments to the region.

Moon Jang-nyeol, a professor at Korea National Defence University, said South Korea would continue to strengthen its naval force.

“South Korea has long pursued having a blue-water navy to build a deterrent capability against the powerful peripheral states … Its decision to improve its naval force capacity is less likely to change, and its spending may continue to increase,” Moon said.

“But the chance of South Korea engaging in international disputes such as the South China Sea is quite low. Its main goal is to balance the power over the region, more than actually engaging in those conflicts.”

Trump Inauguration Spending Under Criminal Investigation by Federal Prosecutors

December 14, 2018

Probe looking into whether committee misspent funds and top donors gave money in exchange for access to the administration

Image result for donald trump, inauguration, photos
Christopher Morris—VII for TIME
President Trump delivered his inaugural address at the U.S. Capitol on Jan. 20, 2017.
President Trump delivered his inaugural address at the U.S. Capitol on Jan. 20, 2017. PHOTO: ALEX WONG/GETTY IMAGES

Federal prosecutors in Manhattan are investigating whether President Trump’s 2017 inaugural committee misspent some of the record $107 million it raised from donations, people familiar with the matter said.

The criminal probe by the Manhattan U.S. attorney’s office, which is in its early stages, also is examining whether some of the committee’s top donors gave money in exchange for access to the incoming Trump administration, policy concessions or to influence official administration positions, some of the people said.

Giving money in exchange for political favors could run afoul of federal corruption laws. Diverting funds from the organization, which was registered as a nonprofit, could also violate federal law.

The investigation represents another potential legal threat to people who are or were in Mr. Trump’s orbit. Their business dealings and activities during and since the campaign have led to a number of indictments and guilty pleas. Many of the president’s biggest campaign backers were involved in the inaugural fund.

The investigation partly arises out of materials seized in the federal probe of former Trump lawyer Michael Cohen’s business dealings, according to people familiar with the matter.

In April raids of Mr. Cohen’s home, office and hotel room, Federal Bureau of Investigation agents obtained a recorded conversation between Mr. Cohen and Stephanie Winston Wolkoff, a former adviser to Melania Trump, who worked on the inaugural events. In the recording, Ms. Wolkoff expressed concern about how the inaugural committee was spending money, according to a person familiar with the Cohen investigation.

The Wall Street Journal couldn’t determine when the conversation between Mr. Cohen and Ms. Wolkoff took place, or why it was recorded. The recording is now in the hands of federal prosecutors in Manhattan, a person familiar with the matter said.

The inaugural committee hasn’t been asked for records or been contacted by prosecutors, according to a lawyer close to the matter, who said: “We are not aware of any evidence the investigation the Journal is reporting actually exists.”

The inaugural committee has publicly identified vendors accounting for $61 million of the $103 million it spent, and it hasn’t provided details on those expenses, according to tax filings. As a nonprofit organization, the fund is only required to make public its top five vendors.

Money RaisedPrivate funds raised by each of the last fiveinaugural committeesSource: Federal Election Commission
Trump(2017)Obama(2013)Obama(2009)Bush (2005)Bush (2001)$0 million$50$100$150

The committee raised more than double what former President Barack Obama’s first inaugural fund reported raising in 2009, the previous record. President Trump’s funds came largely from wealthy donors and corporations who gave $1 million or more—including casino billionaire Sheldon Adelson, AT&T Inc. andBoeing Co. , according to Federal Election Commission filings. There is no sign that those three donors are under investigation.

Federal prosecutors have asked Richard Gates, a former campaign aide who served as the inaugural committee’s deputy chairman, about the fund’s spending and its donors, according to people familiar with the matter. Mr. Gates has met with prosecutors from the Manhattan U.S. attorney’s office and special counsel Robert Mueller’s office.

Mr. Gates, who served as deputy in the inaugural fund, in February pleaded guilty to conspiracy against the U.S. involving foreign political consulting work unrelated to the campaign. The case was brought by Mr. Mueller’s office. Mr. Gates agreed to cooperate with the Justice Department in ongoing investigations.

The committee was headed by Thomas Barrack Jr., a real-estate developer and longtime friend of Mr. Trump. There is no sign the investigation is targeting Mr. Barrack, and he hasn’t been approached by investigators since he was interviewed by the special counsel’s office last year, according to a person familiar with the matter. Mr. Mueller’s investigators,who are probing Russian interference in the 2016 U.S. election, asked Mr. Barrack only a handful of questions about the inaugural fund, the person said.

Mr. Mueller has also probed whether any foreign money flowed to the inaugural fund, which is prohibited from accepting foreign funds. In August, the U.S. attorney’s office in Washington, on a referral from Mr. Mueller, obtained a guilty plea from a Washington consultant who admitted he used a U.S. citizen to serve as a “straw purchaser” so that a “prominent Ukraine oligarch” could attend the inauguration. The names were never disclosed.

Manhattan federal prosecutors in recent months asked Tennessee developer Franklin L. Haney for documents related to a $1 million donation he made to Mr. Trump’s inaugural committee in December 2016, according to a person familiar with the matter. Mr. Haney in early April hired Mr. Cohen, at the time serving as Mr. Trump’s personal lawyer, to help obtain a $5 billion loan from the Energy Department for a nuclear-power project, the Journal has previously reported. Mr. Haney was asked for documents related to his correspondence with members of the committee, meeting calendars and paperwork for the donation, the person said. A loan application by Mr. Haney’s company is still pending at the Energy Department.

A lawyer for Mr. Haney didn’t respond to requests for comment.

The White House didn’t respond to requests for comment on the investigation. A lawyer for Mr. Cohen didn’t respond to requests for comment.

Since pleading guilty to federal crimes in August, Mr. Cohen has been cooperating with federal prosecutors in Manhattan and the special counsel’s office. He was sentenced Wednesday to three years in prison.

According to the inaugural fund’s tax filings, the committee’s top-paid vendor was an event-production firm led by Ms. Wolkoff called WIS Media Partners. The company, which California corporate records show was formed 45 days before the inauguration, was paid $25.8 million, the largest sum paid to a vendor.

Ms. Wolkoff is a former unpaid adviser to Mrs. Trump who also helped produce events surrounding the inauguration. Ms. Wolkoff and several partners were paid about $1.6 million of the $25.8 million, and the remainder went to subcontractors, a person familiar with Ms. Wolkoff’s work said.

It couldn’t be determined which expenses are the focus of scrutiny by federal prosecutors. The committee said in its tax documents that it spent $77 million on conferences, conventions and meetings, plus $4 million on ticketing, $9 million on travel, $4.5 million on salaries and wages, and other expenses. Mr. Barrack has said that an external audit was completed of the inaugural committee’s finances, but the organization has declined to make that audit available.

The January 2017 inaugural events included a celebration concert at the Lincoln Memorial, receptions, private meals and inaugural balls.

People involved in Mr. Trump’s inaugural have attributed some of the costs to the last-minute nature of the planning. Few expected Mr. Trump to win the 2016 election, leaving his camp scrambling to arrange events for the inaugural, with little time to bid for competitive contracts, they said.

Write to Rebecca Davis O’Brien at, Rebecca Ballhaus at and Aruna Viswanatha at

Appeared in the December 14, 2018, print edition as ‘Trump Inaugural Spending Is Probed.’

Trump met with Chris Christie to discuss chief of staff job

December 14, 2018

Chris Christie is a top contender for the White House chief of staff job, according to a new report.

Image result for Chris Christie, photos

President Trump met with the former New Jersey governor Thursday as he weighs who will replace John Kelly, Axios reported.

“He’s tough; he’s an attorney; he’s politically-savvy, and one of Trump’s early supporters,” a source familiar with Trump’s thinking told the news outlet.

Trump told reporters Thursday he had five people he was considering for Kelly’s replacement. Kelly is expected to depart at the end of the year after 18 months in the role.

Image result for Chris Christie, photos, donald trump

The Huffington Post reported the president’s son-in-law and White House adviser Jared Kushner was also in the running. Other news outlets reported that Kushner is not under consideration.

© Photo: Mark Wilson, Getty Images/ AFP

Christie and Kushner have had a fraught relationship. Christie, who was previously U.S. attorney for New Jersey, sent Kushner’s father, Charles, to federal prison in 2005 for tax evasion, witness tampering, and making illegal campaign donations.

Image result for chris christie photos

Image result for Chris Christie, photos, donald trump


© Win McNamee, Getty Images/AFP | Former New York City Mayor Rudy Giuliani (R) and New Jersey Gov. Chris Christie attend the Presidential Debate at Hofstra University on September 26, 2016 in Hempstead, New York.

See also:

PHOTOS: Chris Christie, family soak up sun on N.J. beach he closed to public


Saudi Arabia to Target U.S. With Sharp Oil Export Cut, Sources Say

December 13, 2018

After flooding the U.S. market in recent months, Saudi Arabia plans to slash exports to the world’s largest oil market in the coming weeks in an effort to dampen visible build-ups in crude inventories.

American-based oil refiners have been told to expect much lower shipments from the kingdom in January than in recent months following the OPEC agreement to reduce production, according to people briefed on the plans of state oil company Saudi Aramco.

Image result for muhammad bin salman, pictures

Saudi crude shipments to the U.S. next month could even test the 30-year low set in late 2017 of 582,000 barrels a day, down about 40 percent from the most recent three-month average, the same people said, asking not to be named as the information isn’t public. The final figure could still change, they added.

By shifting the focus of Saudi export reductions toward the U.S., Riyadh hopes to show to the market it’s making good on its promise to cut supplies. Fluctuations in U.S. crude imports and stockpiles have an outsize impact on the market because data are available on a weekly basis. In other regions, oil traders only get official figures on a monthly basis, or not at all in the case of stockpiles in big consumers such as China and India.

The Saudi energy ministry didn’t respond to a request for comment.

While the plan to slash Saudi exports to America may ultimately convince a skeptical oil market about the kingdom’s resolution to bring supply and demand in line, it may anger U.S. President Donald Trump, who has used social media to ask the Saudis and OPEC to keep the taps open.

Donald J. Trump


Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!

31.9K people are talking about this

Saudi total exports are set to drop to around 7 million barrels a day in January, down from about 8 million barrels a day in November-December, one of the people said. Khalid Al-Falih, the kingdom’s energy minister, told reporters last week that Saudi production will drop in January to 10.2 million barrels a day, down from 11.1 million barrels a day in November.

The oil market has so far largely ignored the production cuts that OPEC and its allies announced in early December, a larger-than-expected 1.2 million barrels a day — or just over 1 percent of global demand. Despite the OPEC+ curbs, benchmark Brent crude has hovered near $60 a barrel. Futures in London jumped 2.2 percent Thursday on the prospect of lower Saudi shipments to the U.S., closing at $61.45. Prices are still down 7.7 percent for the year.

The export curbs, if fully implemented, will affect big U.S. refiners such as Valero Energy Corp., Phillips 66, Chevron Corp., Exxon Mobil Corp., and Marathon Petroleum Corp. forcing them to buy similar crude elsewhere, such as Mexico, Canada or Venezuela. They could also hit Motiva Enterprises LLC, the Saudi-owned company that operates the largest refinery in the U.S.

Saudi Arabia has shipped 860,000 barrels a day of crude to the U.S. on average so far this year, according to Bloomberg calculations based on weekly customs data. Saudi exports into America had run even higher in the second half of the year, with July-to-December shipments rising to an average of 975,000 barrels a day, according to Bloomberg calculations.

Inventories Scrutinized

Oil trader Andy Hall, who earned the nickname “God” for his prescient calls on pricing before closing his hedge fund after suffering losses last year, says the oil market is heavily influenced by data like the weekly U.S. stockpile figures.

“People look at these things, scrutinize them,” he said of the data on Bloomberg Television Thursday. “The fact is, they only cover the U.S., which is 25 percent of the world oil market. The data available for inventories elsewhere in the world is poor at best.”

Hall now serves on the advisory board of Orbital Insight, a Palo Alto-based provider of analytic platforms to translate satellite and aerial images into useful data, including global oil supplies.

Senate Passes Resolution to Withdraw U.S. Support for War in Yemen

December 13, 2018

Resolution faces limited prospects for passage in House this year

Image result for Bernie sanders, AL DRAGO, photos
Sen. Bernie Sanders, the Vermont independent, was co-sponsor of a resolution to withdraw U.S. support for the war in Yemen.

WASHINGTON—The U.S. Senate ignored appeals by the Trump administration and passed a resolution on Thursday to withdraw U.S. support for the Saudi-led coalition at war in Yemen, delivering a bipartisan setback for the president’s Middle East policy.

The measure, which passed in a 56-41 vote, pits a Senate upset by the October killing of journalist Jamal Khashoggi by Saudi agents against the Trump administration, which views Saudi Arabia as a vital strategic ally. Seven Republicans joined with all 49 members of the Democratic caucus to support the resolution. Three Republican senators were absent.

The resolution, sponsored by Sens. Bernie Sanders (I., Vt.) and Mike Lee (R., Utah), would withdraw U.S. military support for the Saudi-led coalition fighting Iran-allied Houthi militants in a conflict that has left tens of thousands dead and pushed millions to the brink of starvation. Among other elements, it would bar U.S. refueling of Saudi planes and scale back the U.S. presence in the region.

While setting up a clash between the Senate and Trump administration, the resolution is unlikely to affect U.S. military policy in the region. House Republican leaders on Wednesday stopped an effort that would have forced a vote on a similar Yemen resolution on the floor.

The CIA’s Evidence Linking Saudi Crown Prince to Khashoggi Killing

The CIA’s Evidence Linking Saudi Crown Prince to Khashoggi Killing
How did the CIA conclude that journalist Jamal Khashoggi was killed on the orders of Saudi Crown Prince Mohammed bin Salman? WSJ’s Warren P. Strobel has an exclusive look at the secretive evidence behind the assessment. Photo: Reuters

“It’s important to send a message,” Mr. Sanders told reporters before the vote, adding that it could come up next year. “My very strong expectation is that in January, with Democratic control over the House, it will succeed.”

After the Senate approved the resolution, it also unanimously passed a resolution with broad bipartisan sponsorship that condemned the killing of Mr. Khashoggi and directly connected Saudi Crown Prince Mohammed bin Salman to the journalist’s death.

“It’s a strong statement of our condemnation of what has happened. To me, that’s important even if it doesn’t affect policy,” said Sen. Bob Corker (R., Tenn.).

The Saudi government has repeatedly said the crown prince had no knowledge of the operation.

The Wall Street Journal reported earlier this month that the Central Intelligence Agency determined in a highly classified assessment that Prince Mohammed sent at least 11 messages to his closest adviser, who oversaw the team that killed Mr. Khashoggi, in the hours before and after the journalist’s death.

Senior administration officials urged senators to vote against the Sanders-Lee resolution, arguing that withdrawing U.S. support would only harm the international effort to secure an end to the conflict and hinder efforts to contain Iran.

A Yemeni man sits in front of a destroyed building allegedly targeted by a Saudi-led airstrike, in San'a, Yemen, earlier this month.
A Yemeni man sits in front of a destroyed building allegedly targeted by a Saudi-led airstrike, in San’a, Yemen, earlier this month. PHOTO: YAHYA ARHAB/SHUTTERSTOCK

The congressional action came hours after the warring parties meeting at United Nations-led peace talks in Sweden agreed to a breakthrough deal meant to avert a dangerous military fight over Yemen’s most important port city.

Martin Griffiths, the U.N. special envoy on Yemen, secured agreement on Thursday from both sides for a peaceful handover of control of the Hodeidah port from Houthi fighters to U.N. forces, a deal designed to avert a risky military fight for the country’s main gateway for humanitarian aid.

The agreement marked a rare moment of diplomatic success in the four-year-old conflict.

Mr. Griffiths is hoping to use the peace talks in Sweden as a launching pad for more substantive talks to resolve the war in Yemen, which the U.N. says is home to the worst humanitarian crisis in the world.

“The progress on the peace negotiations is not coincidental to this vote,” said Sen. Chris Murphy (D., Conn.). “The United States has said through the Senate that our support for the Saudi-led coalition is no longer open-ended. We expect our partners to be partners in peace.”

In addition to the Sanders-Lee resolution, the Senate is also reviewing a separate bill introduced last week by Sen. Bob Menendez (D., N.J.) and Sen. Todd Young (R., Ind.) that would suspend weapons sales to Saudi Arabia, sanction people who block humanitarian access in Yemen or aid Houthi rebels there, as well as sanction those responsible for Mr. Khashoggi’s death.

Write to Natalie Andrews at and Dion Nissenbaum at

Senate votes to condemn Saudi Crown Prince Mohammed bin Salman as responsible for Khashoggi killing

December 13, 2018

The Senate cast two historic votes Thursday to end U.S. participation in the Saudi-led war effort in Yemen and condemn the Saudi crown prince as responsible for the killing of journalist Jamal Khashoggi, delivering clear political rebukes of President Trump’s continued embrace of the kingdom.

The unanimous vote to hold Crown Prince Mohammed bin Salman responsible for Khashoggi’s murder reflects the extent to which senators of both parties have grown tired of Trump’s continued defense of Mohammed’s denials. It also puts significant pressure on leaders in the House — where the president’s Saudi policy is a much more partisan issue — to allow members to cast a similar vote condemning the crown prince before the end of the year.

Regardless, the two Senate votes Thursday set the stage for broader strategic debates about Saudi policy when Congress regroups next year.

Sen. Bob Corker (R-Tenn.) speaks to the media as the Senate prepares to vote on whether to end U.S. military support for the Saudi-led war in Yemen. (Jim Lo Scalzo/EPA-EFE/REX/Shutterstock)

Just before the Senate voted to condemn Mohammed over Khashoggi’s murder, senators voted 56-to-41 vote to end U.S. participation in the Saudi-led campaign in Yemen by invoking the War Powers Resolution — the first time a chamber of Congress has ever done so.

More importantly, the 56-vote majority — a figure that includes seven Republicans — suggests that Saudi critics will still have a majority next year to challenge Trump on Saudi policy. Both Republicans and Democrats have said they plan to pursue sanctions against Saudi officials involved in Khashoggi’s murder, to stop the transfer of nondefensive weapons until Saudi forces withdraw from Yemen, and other measures to restrain a crown prince whom many lawmakers see as out of control.

“Today we tell the despotic regime in Saudi Arabia that we will not be part of their military adventurism,” said Sen. Bernie Sanders (I-Vt.), who co-sponsored the Yemen resolution with Sen. Mike Lee (R-Utah). “Today, for the first time, we are going to go forward . . . and tell the president of the United States, and any president … that the constitutional responsibility of making war rests in the United States Congress, not the White House.”

The votes came just hours after Secretary of State Mike Pompeo and Defense Secretary Jim Mattis briefed House lawmakers behind closed doors — a meeting from which Republicans and Democrats emerged urging very different responses to Saudi Arabia and its crown prince.

A recent CIA assessment found Mohammed was probably responsible for the killing of Khashoggi, a Washington Post contributing columnist, in a Saudi consulate in Istanbul on Oct. 2.

“They have to be held responsible,” Rep. Eliot L. Engel (D-N.Y.), the incoming chairman of the House Foreign Affairs Committee, said after the briefing, referring to Mohammed and Saudi King Salman.

But there remain Republicans in the House who defend the crown prince — and those who think that even if he should be called out for his involvement in Khashoggi’s death, the punishment should stop there.

“We recognize killing journalists is absolutely evil and despicable, but to completely realign our interests in the Middle East as a result of this, when for instance the Russians kill journalists . . . Turkey imprisons journalists?” Rep. Adam Kinzinger (R-Ill.) said. “It’s not a sinless world out there.”

That stands in sharp contrast to the Senate, where several Republicans have been encouraging a broad response to Saudi Arabia over not just Khashoggi’s killing and the Yemen war, but the Kingdom’s blockade in Qatar, its recent detainment of Lebanese Prime Minister Saad Hariri, and a slate of human rights abuses they say have compromised the U.S.-Saudi alliance.

Trump has refused to condemn Mohammed for the killing of Khashoggi, a Saudi national. Pompeo has echoed Trump’s stance in public interviews, and behind closed doors as well, lawmakers said.

“All we heard today was more disgraceful ducking and dodging by the secretary,” said Rep. Lloyd Doggett (D-Tex.), who supports bringing up a War Powers resolution in the House to cut off U.S. support for the Saudis’ Yemen war effort. On Wednesday, the House narrowly voted to block rank-and-file members from demanding a floor vote on any such Yemen resolution, after leaders slipped in a rule change to do so into an unrelated agricultural bill.

House leaders also met with CIA director Gina Haspel on Wednesday to hear the details of Khashoggi’s slaying. But they emerged offering few details about the briefing — or about what step House Democrats would take, once they assume the majority in January, to pursue more punitive measures against Saudi Arabia, beyond holding hearings.

In the Senate, meanwhile, both Republican and Democratic lawmakers are making plans to capi­tal­ize on the Yemen resolution vote with further measures next year — including sanctions on Mohammed and the other Saudis implicated in Khashoggi’s killing, and an order to halt all nondefensive weapons transfers to Saudi Arabia until hostilities in Yemen cease.

“The current relationship with Saudi Arabia is not working for America,” Sen. Lindsey O. Graham (R-S.C.) said Wednesday, in comments to reporters about what next steps senators planned to take to address Saudi policy. “I’m never going to let this go until things change in Saudi Arabia.”

Trump Vows Consequences for GM, Says China Car Tariffs Too High

December 13, 2018

President Donald Trump reaffirmed his promise to punish General Motors Co. for plans to close an auto factory in the electoral battleground of Ohio and said China’s plan to lower tariffs on U.S. cars to 15 percent doesn’t go far enough.

“General Motors is not going to be treated well,” Trump said in a Fox News interview Thursday. He said GM chief executive Mary Barra was “nasty” to announce the factory-closing plan shortly before the holidays.

“I don’t like what she did, I think it was nasty,” Trump said. “It doesn’t really matter because Ohio is under my leadership from a national standpoint. Ohio is going to replace those jobs in like two minutes.”

Image result for GM, Lordstown, factory, pictures

GM announced in November it planned to cut more than 14,000 jobs and close seven factories worldwide, including one in Lordstown, Ohio, that produces the Chevrolet Cruze. The announcement drew immediate criticism from Trump and he later said he would seek to block any federal subsidies the carmaker receives.

Trump also said he would seek further reductions in the tariff China charges on U.S.-made automobiles.

“It’s not acceptable, 15 is still too high,” Trump said.

proposal to reduce tariffs on cars made in the U.S. to 15 percent from the current 40 percent — bringing the U.S. back in line with what other countries pay — has been submitted to China’s Cabinet for review, according to people familiar with the matter.

Trump blasts General Motors for move toward electric vehicles

December 13, 2018

President Trump said Thursday that car companies should not switch wholly to making electric vehicles while arguing U.S. job loses in the industry are “not acceptable” and that France is “burning down” because of clean-energy policies.

Trump, during an interview with Fox News, blasted looming General Motors job cuts in the Midwest and mentioned ongoing fuel-tax protests in France.

Image result for Chevy Volt, assembly line, photos

“They are changing the whole model of General Motors. They going to all electric. That’s not going to work,” Trump said. “I don’t run a car company, but all electric isn’t going to work.”

“It’s wonderful to have it as a percentage of your cars,” he continued, “but to tell me a couple weeks before Christmas that [GM is] going to close in Ohio and Michigan? Not acceptable to me.”

In the same interview, Trump said the international Paris climate accord, from which he withdrew the U.S., “is not working out too well for Paris.

“That whole country is burning down. I was the one who kept us out of the Paris accord. If I was in the Paris accord, we would be paying trillions of dollars. Trillions of dollars for nothing,” he said.

[Read more: Trump’s GM threats put electric vehicles at risk]