Trump Urges Saudi Arabia To List Shares of World’s Largest Oil Producer on NYSE

U.S. President Donald Trump urged Saudi Arabia Saturday to list its state-owned oil company on the New York Stock Exchange when the company goes public in what is expected to be the largest-ever initial public offering in which shares of a company are sold to investors.

“Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange. Important to the United States!,” Trump tweeted from Hawaii, his first stop ahead of a 13-day trip to Asia.

Saudi officials have reportedly said the government intends to list 5 percent of  the company’s shares on local and global stock exchanges in 2018 but have yet to select an overseas venue. Saudi officials have estimated the IPO will be worth about $100 billion.

The NYSE has had discussions with the Saudis about the upcoming IPO as has the London Stock Exchange. Exchanges in Hong Kong, Singapore, Tokyo, Toronto and the U.S. are also soliciting portions of the public offering.

New York-based NASDAQ, which provides technology to Saudi Arabia’s exchange, has been leveraging that relationship in an attempt to win the listing.

Trump has developed a close relationship with Saudi Arabia. During his visit there last summer, he signed a $110 billion defense agreement with Saudi King Salman.

At a $2 trillion valuation Saudi officials have projected for Aramco, selling five-percent of the company’s shares would reap $100 billion.

The public offering of shares of Aramco, the world’s largest oil producer, is part of Saudi government plans to sell state assets as a recession slows Riyadh’s effort to eliminate a budget deficit caused by low oil prices.

 

 

Saudi Crown Prince Tackles Extremism on the Road to Social, Economic Reform

The recent flurry of social and economic reform coming out of Saudi Arabia has left some Saudis ecstatic, others more circumspect, and a few conservatives bewildered or even angry.

Saudi Crown Prince Mohammed Bin Salman told a crowd of investors at a conference in late October that he was merely attempting to “return Saudi Arabia to the moderate Islam that once prevailed” before the Iranian Revolution in 1979. He stressed that 70 percent of Saudis are younger than 30 and vowed “not to spend another 30 years of our lives living under extremist ideas.”

The young crown prince also proposed an ambitious plan for a new economic zone on the Red Sea near Jordan and Egypt. In April, he put forward an economic road map for the kingdom, called Vision 2030. Part of the plan calls for privatizing 5 percent of the country’s flagship petroleum company Aramco, in addition to attracting foreign investment capital.

​Too much change too fast

Clarence Rodriguez, who spent 12 years as a French foreign correspondent in Riyadh and recently wrote a book called Saudi Arabia 3.0 on the aspirations of Saudi women and young people, tells VOA that she believes Saudi Arabia “is in crisis, due to the drop in the price of petroleum,” and that it has found itself under pressure to “diversify its economy, which necessitates societal reform involving women and young people, as well.”

Rodriguez points out that the late King Abdallah, who died in 2015, started the reform movement by allowing Saudi women to run for the country’s consultative “Shoura” council and to enter the work force, becoming lawyers, bankers and salespeople.

She worries, however, that some recent moves to change the status of women have angered parts of the kingdom’s mostly conservative population. Traditionalists, she says, are “not used to such quick change” and many “are afraid, because things are moving too fast for them.”

On a recent talk show on an Arabic-language news channel, a conservative Saudi caller told the show’s host that he thinks Saudi King Salman and Crown Prince Mohammed Bin Salman are “violating (Islamic) sharia law” with some of their recent reforms “and should go to jail.”

Saudi commentator Jamal Kashoggi tells VOA that he’s “not optimistic about the reforms,” but that he would “still like to be optimistic … since everyone will suffer if they fail.” Kashoggi worries that the reforms are “not engaging Saudi society, enough.” 

“We wish Mohammed Bin Salman well, and we need economic (and social) reform,” he said, “but, we also need to discuss (these issues). The change,” he said, “is being done in very narrow circles. (Ordinary) people are not feeling engaged.” 

Was Saudi society more moderate?

Hilal Khashan, who teaches political science at the American University of Beirut, is not convinced that Saudi society was more moderate before the Iranian Revolution in 1979. He thinks that parts of Saudi society have always had a conservative streak to them, pointing out that Wahabi conservatives killed many moderate Muslims, including the Shafa’i mufti of Mecca when they overran the city and the nearby resort city of Ta’ef in 1924.

A handful of prominent Saudi conservative clerics have been arrested since Mohammed Bin Salman replaced his cousin, Mohammed Bin Nayef, as crown prince, in June. 

“By weakening the clerical establishment and making clerics simple government workers,” Khashan said, “(Mohammed Bin Salman) will be able to give women more rights, as he is proposing.” Saudi women were allowed to drive, starting in September, and this week were given permission to attend sports matches with their families.

Khashan believes that economic considerations are a key factor in the decision to allow Saudi women to drive. 

“If 10 million women are given the right to drive in Saudi Arabia,” he said, “and if just a fraction of those women buy cars, take driving lessons or buy insurance, that would contribute to stimulating Saudi Arabia’s stagnant economy.” Allowing women to drive will also curtail the expensive practice of hiring foreign chauffeurs to drive women around.

Both Kashoggi and Khashan believe that the Saudi government will eventually prevail in its efforts to reform society. 

“Conservatives,” Kashoggi said, “have already lashed out. They’ve been lashing out since 2003. Al-Qaida, or ISIS, or the radical Wahabis … these are the extremists in Saudi Arabia … and they don’t want change. They have resisted, and will continue to resist. … The only thing stopping them is (government) security.”

Clashes with clerics

Khashan points out that in clashes with conservative clerics back in the 1960s, after King Faisal opened a school for girls in Riyadh, and when the king opened the first TV station in Riyadh in 1965, the government prevailed. 

“Whenever the state clashes with the (conservative) clerical establishment, the state emerges victorious,” he said, “and there’s no reason to believe that things will not be the same, this time.”

Jordanian analyst Shehab Makahleh is less certain about who will come out on top, however. 

“There is a kind of opposition among royal family members who are not happy (about the reforms),” he said, “and they have had a number of meetings to clarify where the country is heading in the coming five to 10 years.”

Makahleh believes that King Salman may soon abdicate in favor of Mohammed Bin Salman “in order to gain more support from the international community” for his ambitious reform program and to promote a more secular model of society.

US Unemployment Lowest in 17 Years After Employers Add 261,000 Jobs

A solid rebound for the job market in October as the U.S. economy added 261,000 jobs. Job gains were strong across the board, and the unemployment rate fell to 4.1 percent, its lowest level in 17 years. But, as Mil Arcega reports, American workers are not seeing any real growth in their wages.

Arrest Warrant Issued for Former Catalan Leader

A Spanish judge on Friday issued an international arrest warrant for Catalonia’s ousted president, a day after she jailed members of the region’s separatist government pending possible charges over last week’s declaration of independence.

The national court judge issued the warrant for Carles Puigdemont in response to a request from state prosecutors.

Puigdemont flew to Brussels earlier this week with a handful of his deposed ministers after Spanish authorities removed him and his cabinet from office for pushing ahead with the declaration, despite repeated warnings that it was illegal.

Puigdemont’s Belgian attorney said he would fight extradition without seeking political asylum.

The ousted president told Belgian state broadcaster RTBF he would turn himself in to Belgian authorities, “but not to Spanish justice.”

He said he would run for re-election and, if need be, run his campaign from Belgium, where he remained in hiding.

Puigdemont told RBTF Friday that he was “ready to be the candidate” in the election, scheduled for late December.

“We can run a campaign anywhere because we’re in a globalized world,” he said.

The beleaguered president was due to appear at Spain’s National Court on Thursday to answer questions in a rebellion case brought by Spanish prosecutors, but he did not show up.

The judge jailed nine former members of Catalonia’s separatist government on Wednesday, while they were being investigated on possible charges of rebellion, sedition and embezzlement connected to their push for achieving the region’s independence from Spain.

She later granted one of them bail at $58,300.

In an earlier address from Brussels broadcast by Catalan regional television TV3, Puigdemont called for the release of “the legitimate government of Catalonia” as hundreds of people gathered outside the Catalan parliament also calling for them to be freed.

“As the legitimate president of Catalonia, I demand the release of the members of my cabinet,” he said. “I demand respect for all political options, and I demand the end of the political repression.”

Puigdemont said the imprisonment of former Catalan Vice President Oriol Junqueras and eight members of his cabinet was an attack on democracy and not compatible with a “Europe in the 21st century.”

Meanwhile, data released Friday showed that unemployment rose sharply in Catalonia in October, more than anywhere else in Spain, as companies fled in the midst of the country’s worst political crisis in decades.

Implications of Venezuela’s Proposed Foreign Debt Restructuring

Venezuelan President Nicolas Maduro has announced that the country and state oil company PDVSA will restructure its burgeoning foreign debt, even as he vowed to make a payment of more than $1 billion that came due on Thursday.

The announcement did not put Venezuela or PDVSA into default, but suggests that Maduro’s cash-strapped government may be preparing to do so as heavy debt payments aggravate the country’s crippling economic crisis.

Why is Venezuela so heavily indebted?

Even though the OPEC nation was flush with cash during a decade-long oil boom, Venezuela’s ruling Socialist Party borrowed heavily during the era of late president Hugo Chavez to finance generous social programs that made him popular. The country also dismantled mechanisms meant to ensure Venezuela saved money when oil prices were high, leaving it without sufficient hard currency reserves to import basic goods such as food and medicine after prices crashed in 2014. Hunger and preventable diseases are as a result taking a growing toll on the population of 30 million.

Why can’t Venezuela refinance its debt?

The most common refinancing mechanisms are effectively blocked by U.S. sanctions levied this year, in response to accusations that Maduro was undermining democracy, which prevent U.S. banks from acquiring newly issued Venezuelan debt.

Venezuela and PDVSA cannot carry out “swap” transactions in which they exchange maturing bonds for ones that come due further down the road because financial institutions with U.S. headquarters would not be able to acquire the new debt. Investors also say bondholders would have no interest in renegotiating payment timelines without a cohesive plan to reform the country’s dysfunctional socialist economic model. Maduro has repeatedly balked at carrying out such reforms.

Who are the major holders of Venezuela and PDVSA bonds?

These securities are popular among funds that invest in emerging market bonds. Their high yields – which are close to 10 times higher than those of neighboring Colombia – help increase the overall profitability of the portfolios.

Institutional investors with big holdings include T. Rowe Price Associates Inc., Ashmore Investment Management Ltd., and BlackRock Investment Management Ltd. Goldman Sachs Group Inc came under heavy fire this year for purchasing $2.8 billion in PDVSA bonds at a steep discount, which opposition critics dubbed “hunger bonds.”

What would be the consequences for Venezuela of default?

Creditors could seek to seize assets Venezuela owns in other countries, including refineries such as those operated by PDVSA’s U.S. refining and marketing subsidiary Citgo. A default could also make it more complicated for Venezuela to import products from foreign companies.  Providers of goods such as food and medicine may reduce sales to Venezuela on concern that they will not get paid, or that they could find themselves ensnared in creditor lawsuits.

What is the role of Russia and China in financing

Venezuela?

Venezuela has borrowed heavily from both nations via oil-for-loan agreements in which it pays back in deliveries of crude and fuel. Investors believe support from Moscow and Beijing has been instrumental in allowing Venezuela to keep up with bond payments so far. Russia recently said it was willing to restructure a $3 billion loan.  But both China and Russia have shown impatience with Venezuela’s continued refusal to reform its Byzantine socialist economic regulations that are widely cited as the principal obstacle to growth.

Could multi-lateral institutions such as the International Monetary Fund and the World Bank get involved in the country’s debt restructuring?

Maybe, but substantial obstacles loom. There has been no formal contact between Venezuela and the IMF and World Bank although it does have a representative on each of their boards. Before the fund could get involved again, Maduro’s government would have to agree to an economic and financial assessment – something it has for years refused to do on the grounds that it violates sovereignty. Its current willingness to submit to such a review is unclear.

How would a default affect daily life in Venezuela?

Default would likely further pummel the country’s already bruised bolivar currency, which has depreciated 99 percent on the black market since Maduro took office. Reluctance to do business with Venezuela could make it harder to import goods.

Some 700 Migrants Rescued in Mediterranean, 23 Found Dead

Rescuers pulled 700 boat migrants to safety in the Mediterranean and found 23 bodies during one operation on Friday, an Italian coastguard spokesman said, the second loss of multiple lives recorded in the area so far this week.

After around three years of mass arrivals, the number of migrants reaching Italy has fallen sharply since July, when Rome struck a deal with Libya to block what had become a busy route for people smugglers.

A Spanish ship deployed in the European Union’s Operation Sophia naval mission recovered the dead, along with 64 survivors, from a sinking rubber boat, the mission said on its Facebook page.

“A tough day in the Central Mediterranean Sea,” the Facebook post said, adding the rescues had started in the early morning.

Six rescue operations were carried out in total on Friday, the spokesman said, making it one of the busiest days for rescues in recent months. Seven people were found dead and 900 saved on Wednesday.

The Italian Coast Guard ship Diciotti was heading for the southern port of Reggio Calabria with 764 rescued migrants on board, the ANSA news agency said in a report confirmed by the coast guard spokesman.

Diciotti was also carrying eight dead bodies, ANSA said. It was not clear if they had been among those recovered by the Spanish ship.

Those rescued were originally from Sub-Saharan Africa, Pakistan, Libya, Bangladesh, Algeria, Egypt, Nepal, Morocco, Sri Lanka, Yemen, Syria, Jordan and Lebanon, ANSA said.

In the Aegean Sea on Friday, three people drowned, six were known to be missing and scores of others were rescued while trying to reach Greece.

 

California Asks US for $7.4 Billion for Wildfire Rebuilding

California Gov. Jerry Brown and lawmakers asked the U.S. government Friday for $7.4 billion to help rebuild after a cluster of fires tore through the heart of wine country, killing more than 40 people and leaving thousands without housing.

 

In a letter to the White House, Brown joined California’s U.S. senators and 39 members of its congressional delegation to urge President Donald Trump and Congress to quickly adopt a disaster-related appropriations measure to support the state’s recovery.

 

Brown said the funding would go toward cleanup and programs to support housing, transportation, agriculture, environmental protection and other services for those affected by the fires.

A series of blazes that started in Northern California the night of Oct. 8 killed at least 43 people and destroyed about 8,900 homes and other buildings. At the peak, thousands of firefighters battled 21 blazes that burned simultaneously.

Officials have not yet assessed all the damage and effects of the fires, but the governor’s office and the affected counties determined that $7.4 billion in federal funding is needed to help California recover, the letter says.

 

The wildfires significantly damaged farmland, rangeland and watersheds, and more than a third of the funding requested, $3.1 billion, would go toward helping agricultural industries bounce back, including affected wineries, California officials said.

 

“The full economic impact to the agricultural, tourism, hospitality, and wine industries is still not known,” the letter says. “Nine California wineries were destroyed and 21 were damaged in the nation’s most prominent winemaking region.”

Congress last month approved $576.5 million in aid for wildfires earlier this summer in California and the U.S. West. It also has approved billions in relief funding to help states affected by hurricanes and other weather-related disasters this year.

 

Trump pledged aid for California fire victims on Oct. 10, saying he had told Brown that “the federal government will stand with the people of California.”

 

Brown said he has asked the California Department of Finance to expedite doling out $41.5 million to support the immediate needs of victims not eligible for federal aid.

During the wildfires last month, Brown declared a state of emergency for the Northern California counties of Solano, Napa, Sonoma, Yuba, Butte, Lake, Mendocino and Nevada as well as Orange County in the south.

Albanians View Antique Communist-era Spyware in ‘House of Leaves’

In the days of communist Albania’s near-total isolation, Saimir Maloku used his technical know-how to gain illicit glimpses of the outside world. Unluckily for him, as he and his father watched forbidden Italian television, the regime was watching him.

Maloku was jailed for nine years in 1976 after the secret police bugged his home. Four decades on, he can visit a unique Tirana museum and see for himself the kind of listening devices that betrayed him.

At the Museum of Surveillance, created in the former headquarters of the feared Sigurimi security service, Albanians can now inspect some of the spying paraphernalia used by dictator Enver Hoxha’s totalitarian state as well as the files kept on many of them.

“Until now nothing had been done to show how Albanians were spied upon and kept in check, so this is a good step to illustrate the history of spying we were the victims of,” Maloku, now 71, told Reuters.

Visiting the museum, Maloku told the story of how he had wanted to help his paralyzed father by broadening his television viewing beyond the drab daily four hours of Albanian state broadcasts.

‘Opened a window’

An electronic engineer, he built a device he called “the can” to convert UHF signals from Italy’s RAI television so they could be viewed on an Albanian set.

“The can opened a window into the West for the Albanians. I made them free of charge for my friends, but later learned some of them had denounced me,” Maloku said.

The Sigurimi planted a listening device in a wall to gather evidence against him.

The same model of device — once attached to a broomstick to spy on the Italian Embassy in Tirana — is on display in another museum depicting the work of the communist-era Interior Ministry.

In the age of the smartphone, both Maloku’s and the Sigurimi’s electronic gizmos now look quaintly crude. But they did their jobs, and Maloku went to prison for devising his, convicted of hostile “agitation and propaganda.” He remembers singing Rolling Stones and Beatles songs in his underground cell to preserve his sanity.

Before the collapse of Albanian communism in 1990, the building that now houses the Museum of Surveillance was known as the “House of Leaves” — a pun referring to both its ivy-clad walls and the “leaves” of secret police files kept on citizens.

During World War II it was used by the Gestapo of the occupying Nazi forces.

Spanish Judge Mulls International Arrest Warrant for Catalonia’s Ex-President

A Spanish judge is considering whether to issue an international arrest warrant for Catalonia’s ousted leader Carles Puigdemont over the region’s contested independence drive.

Puigdemont flew to Brussels with four members of his cabinet this week after Spanish authorities removed him and the 13-member Cabinet from office for pushing ahead with secession.

 

If an arrest warrant is issued, Puigdemont will fight extradition without seeking political asylum, according to his Belgian lawyer.

 

Puigdemont had been due to appear at Spain’s National Court on Thursday to answer questions in a rebellion case brought by Spanish prosecutors, but he did not show up.

The judge jailed nine former members of Catalonia’s separatist government on Wednesday, while they are investigated on possible charges of rebellion, sedition and embezzlement connected to their push for the region’s independence from Spain.

She later granted one of them bail at $58,300.

In a short address from Brussels broadcast by Catalan regional television TV3, Puigdemont called for the release of “the legitimate government of Catalonia” as hundreds of people gathered outside the Catalan parliament also calling for them to be freed.

“As the legitimate president of Catalonia, I demand the release of the members of my cabinet. I demand respect for all political options and I demand the end of the political repression,” he said.

Puigdemont said the imprisonment of former Catalan Vice-President Oriol Junqueras and 8 members of his cabinet was an attack on democracy and not compatible with a “Europe in the 21st century.”

Meanwhile, data released Friday showed that unemployment rose sharply in Catalonia in October, more than anywhere else in Spain as companies fled in the midst of the country’s worst political crisis in decades.

IMF Forecasts Modest Pick-up in African Economic Growth; Critics Say Figures Are Pessimistic

Economic growth in sub-Saharan Africa is expected to rebound this year from 20-year lows in 2016, according to the International Monetary Fund’s biannual report. The Washington-based organization warns that, despite the modest recovery, public debt is continuing to rise and could soon become unsustainable in some African countries. Henry Ridgwell has more.

May Names New Defense Chief as Harassment Scandal Grows

The resignation of Britain’s defense secretary amid a growing sexual harassment scandal is a sign the U.K.’s corridors of power are not always a comfortable place for women.

As allegations of impropriety and abuse spread to more politicians and officials, many women are expressing hope this will be a tipping point in transforming Britain’s macho political culture. Some men, though, worry they are being unfairly tainted by allegations of sexism.

​Political system challenged

Michael Fallon, a dependable lieutenant to Prime Minister Theresa May, quit as defense secretary late Wednesday, saying his past behavior “may have fallen below the high standards” expected. Fallon had apologized after a newspaper reported that he had repeatedly touched a journalist’s knee at a function in 2002, and reports suggested more allegations about him might emerge.

Fallon’s resignation is an unwelcome challenge for May, who is struggling to keep her fractious government united as Britain heads for the European Union exit. She replaced Fallon on Thursday with Gavin Williamson, the former Conservative chief whip.

It’s also a challenge to the British political system.

Multiple sexual-harassment claims against British politicians have emerged since the scandal around movie mogul Harvey Weinstein emboldened people in many industries, including politics, to speak up about improper behavior by powerful individuals who control their future job prospects.

In a new allegation, a 27-year-old woman told the Daily Telegraph newspaper that Labour Party lawmaker Kelvin Hopkins inappropriately touched her at a university event in 2014. Labour said it had suspended Hopkins after receiving allegations and was investigating.

​Intense and insular place

Britain’s Parliament is an intense and insular place, where politicians and parties employ large numbers of young and ambitious staff. The building, full of long corridors, dark crannies and cheap bars, is the perfect stage for liaisons, intrigue — and worse.

“Where you have lots of young individuals, be they men or women, with very little in terms of employment protection, it seems like the perfect environment for abuse,” said Victoria Honeyman, a lecturer in politics at the University of Leeds.

She said the allegations so far were likely “the tip of the iceberg.”

“I think there will be an awful lot of very, very worried individuals across the political spectrum,” she said.

For decades, Parliament was famous for a rowdy, male-dominated culture of hard drinking, boozy debates and midnight votes.

History of scandal

British politics also has a long history of sex scandals: The “Profumo affair” involving a government minister, a model and a Soviet attache helped bring down the Conservative government in 1963. Prime Minister John Major’s early-1990s government was debilitated by regular reports of embarrassing affairs.

Parliament’s raucous atmosphere was dealt a blow several years ago with a move to more “family friendly” hours, with sittings starting earlier in the morning and ending earlier in the evening. One of the building’s many bars has been turned into a nursery for the children of legislators and staff.

The number of female lawmakers has risen, though they are still outnumbered by men. When Margaret Thatcher became Britain’s first female prime minister in 1979, 3 percent of lawmakers were women. The figure rose to 22 percent by 2010, and to 32 percent this year.

In addition to a woman as prime minister, Scotland has a female leader in First Minister Nicola Sturgeon, and women lead the Scottish Conservatives, the Welsh party Plaid Cymru and Sinn Fein in Northern Ireland.

Yet many women in politics say there is much further to go.

Sophie Walker, leader of the Women’s Equality Party, said the stories emerging from the worlds of entertainment, media and politics “demonstrate an epidemic of sexual harassment which is absolutely about power — a massive, endemic imbalance of power.”

Fears of more to come

May has summoned party leaders to a meeting next week to discuss how to deal with harassment claims, amid worries there is more to come.

The No. 2 in May’s Cabinet, Damian Green, is being investigated by officials over an allegation he made inappropriate advances to a Conservative activist. Labour is investigating claims by a young activist that the party discouraged her from reporting that she was raped at a party conference.

A leaked document dubbed the “spreadsheet of shame” compiled by Conservative Party aides lists allegations about 36 lawmakers. The information ranges from gossipy claims of consensual affairs to allegations such as “handsy with women at parties” and “paid a woman to be quiet.”

Some of those named on the list have come forward to deny wrongdoing and suggest they are victims of a witch hunt.

Conservative lawmaker Dominic Raab said the document contained a false allegation that he had taken out an injunction against a woman, and accused those publishing untrue claims of “harassment and intimidation.”

As claim and counterclaim flew, Scottish Conservative leader Ruth Davidson called for major action, saying politicians are going to “need some pretty big shovels for the Augean stable” that must be cleaned.

“The house clearing that is about to happen needs to happen, and we can never go back to where we were before,” she said.

Trump Names Jerome Powell New Fed Chief

President Donald Trump is making his mark on the US Federal Reserve, naming former investment manager and central bank governor Jerome Powell to replace Janet Yellen, whose term expires in February. If confirmed by the Senate, the next chairman of the Federal Reserve will oversee U.S. monetary policy and maintain the stability of the world’s largest economy. Mil Arcega has more from the nation’s capital.

Venezuela Looks to Restructure Debt, but Default Looms

Venezuela on Thursday announced plans to restructure its burgeoning foreign debt, a move that may lead to a default by the cash-strapped OPEC nation whose collapsing socialist economy has left its population struggling to find food and medicine.

President Nicolas Maduro vowed to make a $1.1 billion payment on a bond maturing Thursday, but also created a commission to study “restructuring of all future payments” in order to meet the needs of citizens.

Venezuela has few avenues to do that though because of sanctions by the United States that bar American banks from participating in or even negotiating such deals.

Thus, Maduro’s most readily available recourse to ease payments is unilaterally halting them.

“I am naming a special presidential commission led by Vice President Tareck El Aissami to begin refinancing and restructuring all of Venezuela’s external debt and (begin) the fight against the financial persecution of our country,” Maduro said in a televised speech.

Billions in bonds

Venezuela and state-owned companies have $49 billion in bonds governed by New York Law and promissory notes, according to New York-based Torino Capital.

The government and state oil company PDVSA owe about $1.6 billion in debt service and delayed interest payments by the end of the year, plus another $9 billion in bond servicing in 2018.

The next hard payment deadline for PDVSA is an $81 million bond payment that was due Oct 12 but on which the company delayed payment under a 30-day grace period. Failing to pay that on time would trigger a default, investors say.

That would likely make countries less willing to do business with Venezuela, aggravating shortages of food and medicine and creating further problems for its oil industry, which is hobbled by under-investment.

Wall Street for years pumped billions of dollars into Venezuela by way of bond purchases, passing off the revolutionary rhetoric of the ruling Socialist Party as bluster that belied an iron-clad willingness to pay its debts.

Maduro surprised many by maintaining debt service after the 2014 crash in oil prices, diverting hard currency away from imports of food and medicine toward Wall Street investors.

PDVSA carried out a debt renegotiation in 2016.

But that option was taken off the table after U.S. President Donald Trump levied sanctions blocking the purchase of new debt issued by Venezuela and government-owned entities.

Investors puzzled

Investors seemed puzzled by Maduro’s statements Thursday, which neither clearly declared default nor laid out a path to easing payment burden.

“At no moment did he say they wouldn’t pay, so it’s not a default,” said Alejandro Grisanti of Caracas-based consultancy Ecoanalitica. “But in this environment, Maduro has no way to restructure or refinance as he said today.”

And the mere presence of El Aissami on the new debt commission makes it a non-starter for U.S. financial institution. He was blacklisted this year by U.S. Treasury Department on accusations he is involved in drug trafficking.

The increased pressure of the sanctions has made banks more nervous about working with PDVSA, according to financial industry sources, leading to delays in simple operations.

PDVSA struggled for days to deliver funds for a bond payment due last week amid confusion over which banks were charged with transferring the money.

​Toll on Venezuelans

Critics say Maduro’s decision to put debt above imports has taken a huge toll on the population.

Child malnutrition has reached the scale of a humanitarian crisis in four Venezuelan states, according to a May 2017 report by Caritas Internationalis, a Rome-based nongovernmental organization with links to the Catholic Church. Medicine shortages have also left children dying of preventable diseases.

Officials say ideological adversaries are exaggerating problems for political effect.

But the situation is a stark contrast to the oil boom years of late socialist leader Hugo Chavez, who spent generously on social welfare programs while borrowing profusely to keep spending at full tilt.

Venezuela’s debt is the highest yielding of emerging market bonds measured by JPMorgan’s EMBI Global Diversified Index , paying investors an average of 31 percentage points more than comparable U.S. Treasury notes.

That is nearly double the spread on bonds issued by Mozambique, which is already in default, and more than six times the spread on bonds from war-torn Ukraine.

Poland to Ban Ukrainians With ‘Anti-Polish Views’

Poland plans to bar Ukrainians with “anti-Polish views,” its foreign minister said on Thursday, emphasizing the nationalist credentials of his ruling party that often talks of the “historic wrongs” inflicted on Poles by their neighbors.

Witold Waszczykowski said the policy was a reaction to disrespect shown at a Polish cemetery in the western city of Lviv, which was part of Poland before World War II.

The foreign ministry said lion sculptures at the cemetery’s entrances that hold shields inscribed with the Polish phrases “Always faithful” and “To you, Poland” had been covered up with boxes.

Waszczykowski said Ukrainians who express anti-Polish sentiments or make it difficult to maintain ageing Polish symbols in Ukraine would be refused visas. He did not say how the policy would be applied in practice.

“At the moment, we are launching procedures that will not allow people with extremely anti-Polish views to come to Poland … Those who demonstrate and use administrative instruments against Poland will also bear the consequences,” Waszczykowski told state-run TVP1 television.

Poland is home to between 1.5 million and 2 million Ukrainians who left their country seeking jobs after the 2014 Maidan uprising and conflict with pro-Russian rebels in eastern Ukraine plunged their economy into recession.

Despite Poland’s support for an independent Ukraine that can stand up to Russia, tensions over the countries’ troubled shared history have risen since the Law and Justice (PiS) party came to power in Poland two years ago.

Poland last year passed a resolution that declared the World War Two-era killing of tens of thousands of Poles by units in the Ukrainian Insurgent Army (UPA) “genocide.” Ukraine rejects that label, saying the killings were tragic and calling for reconciliation and forgiveness.

Waszczykowski said Poland’s sympathy for Ukraine’s struggles with Russia must not push “historical issues” into the background.

“It cannot be that geopolitics, that the Russian aggression will be an excuse and that for years we will not settle the issues that divide us,” Waszczykowski said.

Trump Announces Company’s Return to US

A $100 billion semiconductor company based in Singapore will legally relocate its home address to the United States, President Donald Trump announced Thursday.

Broadcom Limited, which manufactures communications chips around the world, said it would relocate its legal address to Delaware once shareholders approve the move, bringing $20 billion in annual revenue back to the U.S. The move will allow Broadcom to avoid a cumbersome federal review process.

The Oval Office announcement was tied to the release of congressional Republicans’ tax reform proposal, which would drastically reduce corporate rates and makes it easier for companies to deduct foreign taxes.

The company credits the GOP plan with making it easier to do business in the U.S. “America is once again the best place to lead a business with a global footprint,” Broadcom CEO Hock Tan said.

However, Broadcom’s move to the U.S. will take place regardless of whether the Republican plan passes, the company said.

Scrutiny regarding merger deal

A year ago, the company entered a $5.5 billion agreement to merge with U.S. network provider Brocade Communications Systems, but that has been delayed while it’s scrutinized by the Committee on Foreign Investment in the United States. The high-level government committee, familiarly known as CFIUS, investigates proposed acquisitions of U.S. companies by foreign buyers on national security and intellectual property grounds.

By becoming a U.S.-based company, Broadcom can avoid the CFIUS process. Broadcom’s corporate headquarters will remain in San Jose, California.

The company makes semiconductor chips used for a variety of products, from cable set-top boxes to smartphones and other wireless devices.

It’s rooted in one of the largest-ever tech industry acquisitions, when Singapore-based Avago Technologies Ltd. bought Broadcom Corp. for $37 billion last year. The deal made Broadcom Ltd. the parent company of both Broadcom Corp. and Avago Technologies. By joining forces, the rival chipmakers hoped to make a bigger dent in the rapidly growing market for wireless devices.

Nearly 20 percent of its revenue in the most recent fiscal quarter came from sales to Apple and the contractors that manufacture Apple products, such as the Foxconn Technology Group.

About half of its revenue comes from China-based distributors and manufacturers, though the end products are used around the world.

Singapore tax breaks

The Singapore Economic Development Board has awarded the company with tax breaks for having a major presence there, but the company warned in a recent regulatory filing that one of those benefits terminates in 2021, four years earlier than expected.

About 39 percent of Broadcom’s employees are in Asia.

Broadcom has 7,500 U.S. employees across 24 states, the company said. It has manufacturing facilities in Colorado and Pennsylvania and engineering offices in California and traces its origins to blue chip American companies like Bell Laboratories, Lucent, and Hewlett-Packard.

“The proposed tax reform package would level the global playing field and allow us to compete worldwide from here in the United States,” Tan said in a statement. “Our move would domicile our $20 billion annual revenue in the United States. From our base here, each year we will invest $3 billion in research and engineering and $6 billion in manufacturing, resulting in more high-paying tech jobs.”

Turkey Keeps Watchful Eye on Succession of Iraqi Kurd Leadership

Ankara is anticipating who will succeed Iraqi Kurdish President Masoud Barzani, following his announcement he plans to quit. Relations between Ankara and Iraqi Kurds, once close allies, collapsed after Barzani held an independence referendum. But Ankara could be eyeing his nephew as an ideal successor.

Turkey made little secret of its pleasure at Sunday’s announcement by Iraqi Kurdish President Masoud Barzani that he is planning to step down. Turkish President Recep Tayyip Erdogan slammed Barzani for holding an independence referendum, which Ankara feared could fuel similar secessionist demands among its own restive Kurdish minority.

 

At his weekly news conference, Turkish presidential spokesman Ibrahim Kalin made clear Ankara was already looking to who will lead Iraqi Kurds going forward.

“A new tableau appears when the term of office of Masoud Barzani is not extended and there will be a transfer of his duties to Prime Minister Nechirvan Barzani,” Kalin said.

Nechirvan Barzani, a nephew of outgoing President Masoud Barzani, is widely seen as by Turkey as the ideal future leader. Being a regular visitor to Ankara, Nechirvan has developed close ties with Erdogan. The Iraqi Kurdish prime minister’s coolness towards the independence referendum will likely enhance his credentials in Ankara.

His close ties with Turkey reportedly extend to significant personal business investments. Analysts say he is also seen by Turkey’s political leaders as sympathetic to its calls for more help in its war against the Kurdish rebel group PKK, which is has many bases in Iraqi Kurdistan.

Former senior Turkish diplomat Aydin Selcen established Turkey’s consulate in Iraqi Kurdistan. He said while Nechirvan Barzani is viewed as the ideal new leader of Iraqi Kurdistan, Turkey is being careful not to be seen to be interfering in the succession process.

“We know that Mr. Nechirvan Barzani’s relations with Ankara are best when compared to other political figures in Iraqi Kurdistan,” he said. “So that would be seen as a welcome development [by Ankara], although judging by the statement of Mr. [Mevlut] Cavusolgu, who is the foreign minister of Turkey, the official position of Ankara is that this is the internal political affairs of the Iraqi Kurdistan region, so Ankara will not have an official reaction to this development.”

Despite Nechirvan Barzani’s close ties with Ankara, the Turkish president has refused to meet him along with the rest of the Iraqi Kurdish leadership for several months, a result of the collapse in relations between the once-close allies.

But Turkish presidential spokesman Kalin said a future request by the Iraqi Kurdish prime minister would now be considered, but will hinge on unspecified conditions being met by the Iraqi Kurds.Ankara is demanding the Iraqi Kurdish leadership annul the result of October’s referendum vote, in which 93 percent of Kurds voted in favor of independence.

Spanish Judge Orders 9 Former Catalan Leaders Jailed

A Spanish judge Thursday ordered nine former leaders from Catalonia jailed while they are investigated on possible charges of rebellion, sedition and embezzlement connected to their push for the region’s independence from Spain.

The judge later granted one of them bail at $58,300.

Ousted Catalan leader Carles Puigdemont was not among those who appeared in court in Madrid. A state prosecutor has called for an international arrest warrant to be issued for Puigdemont as he did not abide by a court order to appear. Puigdemont, along with four members of his former Cabinet, have been in Brussels for a week.

Puigdemont has dismissed the charges against him as politically motivated and said he would only return to Spain if he receives a guarantee that the legal process will be impartial and fair.

Prosecutors have filed charges against 14 Catalan leaders, including Puigdemont and his deputy, Oriol Junqueras.

Spain’s central government moved to take control of Catalonia last week and disbanded the regional parliament in response to an October 1 independence referendum and subsequent declaration of independence by Catalan lawmakers.

Catalonia itself is divided on the secession issue. Those who participated in the referendum opted for independence, but the opposition boycotted the vote, while the Madrid government also declared it illegal.

Last week’s move to strip Catalonia of its autonomy included setting up new elections in the region for December. 

 

Google, AutoNation Partner on Self-driving Car Program

Google is partnering with AutoNation, the country’s largest auto dealership chain, in its push to build a self-driving car.

AutoNation said Thursday that its dealerships will provide maintenance and repairs for Waymo’s self-driving fleet of Chrysler Pacifica vehicles. The agreement will include additional models when Waymo brings them on line.

Terms of the multi-year deal were not disclosed.

Google has been partnering with a number of car-centric companies like Avis, the ridesharing company Lyft, and Fiat Chrysler.

AutoNation Inc., based in Fort Lauderdale, Florida, runs about 360 dealerships in the U.S.

British Government Roiled By Sex Scandal

Britain’s defense secretary has become the first Cabinet casualty of a burgeoning sex harassment scandal roiling the country’s Parliament and threatening Prime Minister Theresa May’s highly fragile minority Conservative government, already riven over Brexit.

Michael Fallon resigned Wednesday after allegations that he’d repeatedly put his hand on the knee of a female political journalist during a party conference.  His resignation came as he was preparing for a scheduled meeting with U.S. Defense Secretary James Mattis.

Amid claims he had behaved inappropriately towards other women journalists, Britain’s 65-year-old defense secretary said he had fallen below the high standards required of his position.

Several other ministers are under investigation, including May’s deputy, Damian Green, who’s accused of making inappropriate sexual advances towards a journalist, and Mark Garnier, the international trade minister, who demanded his secretary buy sex toys for him and repeatedly made sexual remarks about her publicly.

Garnier has dismissed the incidents as “good-humored high jinks” and “amusing conversation,” but apparently that has not satisfied May, who has declined to express her confidence in him.

Two other ministers have denied allegations of sexual harassment, and in Britain’s House of Commons there is a swirl of rumors circulating about more ministers amid a torrent of misconduct allegations that started to flow after harassment and rape accusations against Hollywood producer Harvey Weinstein.

Allegations of sexual abuse have included a charge of rape by an activist against a senior lawmaker in the opposition Labour Party.  Researchers and aides in the House of Commons have been keeping a list of serial “sex pests” in the ranks of the country’s lawmakers that include nearly 50 names.  

The list, portions of which are spreading across social media sites, includes seven Cabinet ministers, 14 junior ministers and eight former ministers.

“The culture has changed over the years and what might have been acceptable 10 or 15 years ago is clearly not acceptable now,” Fallon told the BBC Wednesday.  “Parliament now has to look at itself and the prime minister has made very clear that conduct needs to be improved and we need to protect the staff of Westminster,” he added.

Government officials admit they are concerned other Cabinet ministers could be forced to resign over past conduct, not only embarrassing May but risking the longevity of her government, which is engulfed by sharp divisions over Brexit and economic policy that threaten to tear apart the Conservative Party.

May has been able to just about contain, partly thanks to her deputy Damian Green, the internecine rifts by balancing her Cabinet between so-called “hard Brexiters,” who want a clean break from the European Union, and those who want to maintain close links with the economic bloc or not to exit at all.  

“The fall of Michael Fallon is a mighty blow to Theresa May.  Her rickety government has just lost one of its old reliables,” argued veteran political commentator Polly Toynbee.  She added, “What an irony it would be if another good old British parliamentary sex scandal brought down this government” rather than Brexit.

May’s minority government is dependent on the votes of Northern Ireland’s Ulster Unionists.  But their votes might not be sufficient if there are not only departures from her Cabinet, but also resignations from the House of Commons, thinning out Conservative ranks in the Parliament, and triggering an early election.   

Fallon’s downfall shocked Conservative lawmakers Thursday.  A solid politician, they had thought the first casualty would be among the more colorful characters of the Cabinet, most likely the foreign secretary and leading Brexiter Boris Johnson, who has long been dogged by controversy over highly public affairs and the fathering of a child outside his marriage.

Some lawmakers included on the list compiled by House of Commons researchers and aides have reacted angrily, complaining the definition of sexual misconduct being used is far too broad.  Some lawmakers have been included in the list, nicknamed by Britain’s tabloid press “the dirty dossier,” because they had affairs with staff even though the relationships were consensual.

But many of the misconduct allegations include abuse, harassment and coercion.

Earlier this week, former Cabinet minister Stephen Crabb, who last year ran for the party leadership, apologized for sexting a 19-year-old woman after he interviewed her for a job.  Crabb resigned from the Cabinet last year following reports of a similar incident.

The House of Commons has long been notorious for sexual misadventures and misconduct and has had difficulty, despite the dramatic increase in the number of female lawmakers in recent years, from shaking off its reputation and habits as an “old boys club” where female staff have been considered prey and can come under pressure to agree to sexual favors to get jobs or keep them.

Women lawmakers, backed by some of their male counterparts, have long campaigned for the introduction of a tough disciplinary mechanism and a “grievance procedure” that is transparent and not convoluted as the current one to protect staff and deter misconduct.

Official: Vietnam Hoping for Revised Pacific Rim Trade Pact

Vietnam is hoping leaders of the remaining 11 member countries of a Pacific Rim trade pact, the Trans-Pacific Partnership, may be able to discuss during next week’s regional summit a revised deal following the U.S.’s withdrawal.

 

Deputy Foreign Minister Bui Thanh Son said he hoped talks held in Japan this week will have narrowed differences enough to allow trade ministers and leaders to endorse an amended TPP agreement during the Asia Economic Cooperation forum, whose annual regional summit will be held in Danang, Vietnam, next week.

 

“Vietnam will actively contribute together with other TPP member countries to achieve the most positive results that meet the interests of TPP members,” Son said. He told reporters he hoped there would be ministerial and summit meetings on it next week.

 

In Tokyo, Japanese officials also said they were hoping for a “framework” agreement on pursuing the TPP by the time of the APEC summit, despite having lost the U.S., the world’s biggest economy, as its anchor.

 

U.S. President Donald Trump withdrew the U.S. from the dozen-member trade agreement just days after taking office earlier this year, saying he preferred country-to-country trade deals, a departure from his predecessor Barack Obama in which TPP was the key to his “pivot” to Asia policies.

 

The TPP is meant to dismantle tariffs and other trade barriers while protecting labor, environment and intellectual property standards.

 

Son said the remaining 11 member countries in the TPP are still working toward an agreement with balanced interests to all members and it’s open for the United States and other countries to join in the future.

 

The TPP includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

 

 

Facebook Profit Soars, No Sign of Impact from Russia Issue

Facebook reported better-than-expected quarterly profit and revenue on Wednesday as it pushed further into video advertising, showing no sign of financial damage from the controversy over how Russia used the social network in an attempt to sway voters in the 2016 U.S. election.

The company’s shares, which hit a record earlier in the day, initially rose in after-hours trading, but later fell into negative territory. They have gained almost 60 percent this year.

Chief Executive Mark Zuckerberg condemned Russia’s attempts to influence last year’s election through Facebook posts designed to sow division, and repeated his pledge to ramp up spending significantly to increase the social network’s security, something he said on Wednesday would affect profits.

“What they did is wrong, and we are not going to stand for it,” Zuckerberg said of the Russians, on a conference call with analysts.

Facebook is at the center of a political storm in the United States for the ways it handles paid political ads and allows the spread of false news stories. U.S. lawmakers have threatened tougher regulation and fired questions at Facebook General Counsel Colin Stretch in hearings this week.

Facebook, in a series of disclosures over two months, has said that people in Russia bought at least 3,000 U.S. political ads and published another 80,000 Facebook posts that were seen by as many as 126 million Americans over two years. Russia denies any meddling.

Facebook’s total advertising revenue rose 49 percent in the third quarter to $10.14 billion, about 88 percent of which came from mobile ads.

Analysts on average had expected total ad revenue of $9.71 billion, according to data and analytics firm FactSet.

Facebook in the third quarter gave advertisers for the first time the ability to run ads in standalone videos, outside the Facebook News Feed, and the company is seeing good early results, Chief Operating Officer Sheryl Sandberg told analysts on a conference call.

“Video is exploding, and mobile video advertising is a big opportunity,” Sandberg said.

More than 70 percent of ad breaks up to 15 seconds long were viewed to completion, most with the sound on, she said.

The 49 percent increase in total ad sales in the latest quarter compares with a 47 percent rise in the prior quarter and a 51 percent jump in the first quarter.

Facebook has been warning for more than a year about reaching a limit in “ad load”, or the number of ads the company can feature in users’ pages before crowding their News Feed.

Advertisers seem unfazed, though, spending heavily as the social network continues to attract users.

The nearly 50 percent jump in ad revenue “is phenomenal, especially when for the past few quarters they’ve been trying to bring that expectation way, way down. Yet it keeps going up,” Tigress Financial Partners analyst Ivan Feinseth said.

Of the Russia scandal enveloping Facebook publicly, Feinseth said: “In the bigger picture, I don’t think it’s a really big factor.”

The company’s performance was strong in comparison with smaller social media firms Snap Inc and Twitter, Wedbush analyst Michael Pachter said.

“Facebook grew revenues by $3.3 billion year-over-year for the quarter. This is more than Twitter and Snapchat generate combined for the full year,” he said.

Facebook said about 2.07 billion people were using its service monthly as of Sept. 30, up 16 percent from a year earlier.

Analysts on average had expected 2.06 billion monthly active users, according to FactSet.

Net income rose to $4.71 billion, or $1.59 per share, from $2.63 billion, or 90 cents per share.

Analysts on an average were expecting the company to earn $1.28, according to Thomson Reuters I/B/E/S.

Total revenue increased 47.3 percent to $10.33 billion beating analysts estimate of $9.84 billion, according to Thomson Reuters I/B/E/S.

Various U.S. investigations into how Russia may have tried to sway American voters in the months before and after last year’s elections are hanging over Facebook and its competitors.

There is also proposed U.S. legislation that would extend rules governing political ads on television, radio and satellite to also cover digital advertising.

“We expect more scrutiny about Facebook’s ad system ahead,” analyst Debra Aho Williamson of research firm eMarketer said in a note. “We’re also monitoring for any signs that this investigation will have a material impact on ad revenue.”

British Defense Minister Resigns Over Harassment Allegations

Britain’s Defense Minister Michael Fallon has resigned after allegations of inappropriate behavior emerged.

Fallon said in a resignation letter to Prime Minister Theresa May that his “previous conduct … may have fallen below the high standards that we require of the Armed Forces.”

May accepted the resignation Wednesday, saying she appreciated “the characteristically serious manner” in which Fallon had considered his position.

The sexual harassment and assault allegations brought against Hollywood mogul Harvey Weinstein have emboldened women in several countries to speak out about their experiences.

In Britain, it has produced soul-searching about the growing number of reports of sexual harassment and abuse in politics. May has called a meeting of party leaders to discuss how to deal with the topic.

Fallon apologized this week for putting his hand on the knee of a journalist, Julia Hartley-Brewer, in 2002, but he was not being investigated over the incident.

Hartley-Brewer said she was “incredibly shocked” by Fallon’s resignation and did not think his decision was based solely on the 2002 incident.

“I’m assuming there are more allegations to come,” she told Sky News. “I doubt very much it’s because of my knee.”

Ousted Catalan Leader Says Will Not Return to Spain to Testify

Dismissed Catalan leader Carles Puigdemont said on Wednesday he would ignore a court order to return to Spain to answer charges over the region’s push for independence, but he could testify from Belgium.

If Puigdemont fails to answer Thursday’s High Court summons, an arrest warrant could be issued that would make it virtually impossible for him to stand in a snap regional election called by the Spanish government for Dec. 21.

Prime Minister Mariano Rajoy sacked Puigdemont and his government on Friday, hours after the Catalan parliament made a unilateral declaration of independence in a vote boycotted by the opposition and declared illegal by Spanish courts.

On Monday, Spain’s state prosecutor filed charges of rebellion, sedition and misuse of public funds against Puigdemont for defying the central government by holding an referendum on secession on Oct. 1 and proclaiming  independence.

Puigdemont traveled to Belgium at the weekend with other members of the dismissed Catalan administration and hired a lawyer.

“Those summonses are part of proceedings that lack any legal basis and only seek to punish ideas. This is a political trial,” Puigdemont said in a statement signed by “the legitimate government of Catalonia.”

The High Court summoned Puigdemont and 13 other former members of the Catalan government to testify in Madrid on Thursday and Friday on the prosecutor’s charges.

A judge will then decide whether those called to testify should go to jail pending an investigation that could take several years and potentially lead to a trial. The judge might also grant them conditional bail or order them to surrender

their passports.

If Puigdemont and his associates did not turn up, the judge would be more likely to order them jailed as a flight risk.

The courts have also told the Catalan secessionist leaders to deposit 6.2 million euros ($7.2 million) by Friday to cover potential liabilities.

“Off to Prison?”

Three former Catalan government advisors returned to Spain from Belgium late on Tuesday and were greeted at Barcelona’s international airport by a small crowd chanting “off to prison.”

Puigdemont said on Tuesday he would only go back to Spain when given unspecified “guarantees” by the Spanish government.

He said he accepted the election called by Rajoy for December and Madrid said he was welcome to stand, though the legal proceedings might prevent that.

Uncertainty over how the crisis will play out has prompted more than 1,800 Catalonia-based companies to move their legal headquarters out of the region and the government to lower its national economic forecasts for next year.

On Wednesday, rating agency Moody’s said the declaration of independence and the suspension of self rule were credit negative for the region and the country, and that associated uncertainty would damage sentiment and consumer spending.

Moody’s raised Spain’s credit rating to Baa2 in 2014 as the country emerged from a prolonged economic slump.

On Tuesday, Moody’s affirmed Catalonia’s long-term issuer and debt ratings of Ba3, saying the government’s reinforced control compensated for the increased risks, in particular the region’s rapidly deteriorating business climate.

Report: White House Has Told Powell He Will Be New Fed Chief

President Trump appears to be a step closer to naming Jerome Powell as the new head of the U.S. central bank.

Late Wednesday, The Wall Street Journal, citing unnamed sources, reported that White House officials have notified Powell that he will replace Federal Reserve Chair Janet Yellen when her term expires early next year.

Trump is expected to announce his choice to head the bank on Thursday.

Powell is already one of the Federal Reserve’s governors.  Analysts say he is a Republican centrist who appears inclined to continue the Fed’s strategy of gradually raising interest rates.  The Journal story cautions that Trump, who has praised Yellen recently,  might still change his mind.

Powell would be a middle-ground pick for Trump, who is also considering current Fed Chair Janet Yellen as well as Stanford University economist John Taylor and former Fed Governor Kevin Warsh.

While Powell is expected to continue Yellen’s cautious approach to raising interest rates, economists say he might relax some of the financial rules designed to prevent another financial crisis like the one that caused chaos in the markets during the 2007-2008 recession.  Trump has complained that those rules hurt banks and economic growth.  

Yellen, who was selected as Fed chair by President Barack Obama, has been an outspoken advocate for the stricter financial regulations that took effect in 2010.

Many conservative members of Congress had been pushing Trump to select Taylor, rather than Powell, for Fed chairman. Taylor, one of the country’s leading academics in the area of Fed policy, would likely embrace a more “hawkish” approach — more inclined to raise rates to fight inflation than to keep rates low to support the job market.

Taylor is the author of a widely cited policy rule that provides a mathematical formula for guiding rate decisions. By one version of that rule, rates would be at least double what they are now.

Trump Signs GOP Repeal of Consumer Banking Rule

President Donald Trump on Wednesday signed the repeal of a banking rule that would have allowed consumers to join together to sue their bank or credit card company to resolve financial disputes.

The president signed the measure at the White House in private. Journalists were not present to witness the signing.

The Republican-led Senate narrowly voted to repeal the Consumer Financial Protection Bureau’s regulation, which the banking industry had been seeking to roll back.

The Trump administration and Republicans have pushed to undo regulations they say harm the free market and lead to frivolous lawsuits.

Democrats contend the rule would have given consumers more leverage to stop companies from financial wrongdoing. CFPB Director Richard Cordray, an appointee of former President Barack Obama, has called the move a “giant setback” for consumers.

The repeal means bank customers will still be subject to what are known as mandatory arbitration clauses. These clauses are buried in the fine print of nearly every checking account, credit card, payday loan, auto loan or other financial services contract and require customers to use arbitration to resolve any dispute with their bank. They effectively waive the customer’s right to sue.

The overturning of the rule marks a notable victory for Wall Street. After the financial crisis, Congress and the Obama administration installed tough new regulations on how banks operated and fined them tens of billions of dollars for the damage they caused to the housing market.

But since Trump’s victory last year, banking lobbyists have worked hard to get some of the rules repealed or replaced altogether.

Khamenei: Iran, Russia Should Cooperate to Isolate US, Foster Mideast Stability

Iranian Supreme Leader Ayatollah Ali Khamenei told visiting Russian President Vladimir Putin on Wednesday that Tehran and Moscow must step up cooperation to isolate the United States and help stabilize the Middle East, state TV reported.

Iran and Russia are the main allies of Syrian President Bashar al-Assad, while the United States, Turkey and most Arab states support rebel groups fighting to overthrow him.

Putin met Iranian political leaders in an effort to nurture a warming relationship strengthened since U.S. President Donald Trump threatened recently to abandon the international nuclear deal with Iran reached in 2015.

“Our cooperation can isolate America … The failure of U.S.-backed terrorists in Syria cannot be denied but Americans continue their plots,” Khamenei told Putin, according to Iranian state television.

Since Russia’s military intervention in Syria’s war in 2015, and with stepped-up Iranian military assistance, Assad has taken back large amounts of territory from rebels as well as swaths of central and eastern Syria from Islamic State militants.

Moscow is now trying to build on that success with a new diplomatic initiative, including a congress of Syria’s rival parties it plans in the Black Sea resort of Sochi on November 18, though a major opposition bloc has refused to take part.

Pragmatist Iranian President Hassan Rouhani echoed Khamenei, saying Iran and Russia together could tackle “regional terrorism” – an allusion to Sunni Muslim armed groups hostile to Iran, Assad and many other Arab states.

“Our cooperation has helped the fight against terrorism in the region…. Together we can establish regional peace and security,” Rouhani said in a televised joint press conference with Putin and Azerbaijan President Ilham Aliyev, who took part in a three-way summit in Tehran.

Rapprochement

The rapprochement between Iran and Russia is worrying for both Saudi Arabia, Shi’ite Muslim Tehran’s main Sunni rival for dominance in the Middle East, and the United States. Putin praised cooperation with Iran as “very productive.”

“We are managing to coordinate our positions on the Syrian issue,” Putin said.

Moscow is also an important ally for Iran in its renewed confrontation with the United States, where Trump broke ranks with major allies on October 13 by de-certifying Tehran’s nuclear deal with six world powers including Washington under his predecessor Barack Obama.

Trump has called the agreement “the worst deal ever negotiated” and branded Iran a “terrorist nation” for involvement in conflicts in the Middle East.

“We oppose any unilateral change in the multilateral nuclear deal,” Putin told Khamenei, Iranian state TV reported.

Russia has criticized Trump’s disavowal of the nuclear agreement, which has opened a 60-day window for the U.S. Congress to act to reimpose economic sanctions on Iran. These were lifted under the 2015 accord in return for Tehran curbing nuclear activity of potential use in developing an atomic bomb.

“This is a very important visit [by Putin]…. It shows the determination of Tehran and Moscow to deepen their strategic alliance …, which will shape the future of the Middle East,” an Iranian official told Reuters on condition of anonymity.

“Both Russia and Iran are under American pressure…. Tehran has no other choice but to rely on Moscow to ease the U.S. pressure,” said the official.

Another Iranian official said Trump’s hawkish Iran policy had united the Islamic Republic’s often feuding leadership – split into hardline conservative, pragmatist and reformist factions – in alignment with Russia.

During Putin’s visit, Russian oil producer Rosneft and the National Iranian Oil Company agreed an outline deal to work on a number of “strategic” projects in Iran together worth up to $30 billion.

The deal appeared to dovetail with Putin’s strategy to reassert Russian political and economic influence in the Middle East that faded after the 1991 collapse of the Soviet Union.

 

The Catalonia Crisis: What’s Next?

Catalonia’s ousted leader Carles Puigdemont agreed Tuesday to a snap election called by Spain’s central government when it took control of the region to stop it breaking away, but he said the fight for independence would go on.

Below are several scenarios of what could happen in the next few days.

Courts

Puigdemont and his sacked cabinet have been ordered to testify before the Spanish High Court on Thursday and Friday after charges of rebellion, sedition and breach of trust were filed against them.

Under Spain’s legal system, a judge will then decide whether Puigdemont should go to jail pending an investigation that can sometimes take up to several years — and a potential trial.

Puigdemont traveled to Brussels after the Catalan regional parliament issued a unilateral declaration of independence on Friday, and it was not immediately clear whether he would heed the call to appear before the court.

He had said earlier Tuesday he would return to Spain only when given unspecified “guarantees” by the Spanish government.

The same charges have been drawn up against the Catalan parliament’s speaker, Carme Forcadell, and other senior lawmakers but, given they have parliamentary immunity, they will testify before the Supreme Court, which is in charge of handling cases relating to lawmakers or members of the government.

Prosecutors have asked the courts to order Catalan secessionist leaders to deposit 6.2 million euros to cover potential liabilities but they have not sought preventive jail against them.

This could change, however, if Puigdemont and his associates did not show up at the High Court as the judge could deem them to be a flight risk and jail them.

Elections

It is not clear whether a snap regional election will resolve the crisis.

Two recent opinion polls showed support for independence may have started to wane.

But an official regional survey published Tuesday showed some 48.7 percent of Catalans believe the region should be independent, up from 41.1 percent in June and the highest since December 2014.

Based on 1,338 interviews, the Centre d’Estudis d’Opinio poll was the first survey released since the independence declaration though the bulk of it was taken before then, between Oct. 16 and Oct. 29.

Other opinion polls have also shown Catalonia is almost evenly split between pro- and anti-independence supporters.

One key thing to watch will be if pro-independence parties run on a joint ticket or on separate platforms. If they ran separately, they could find it more difficult to reach a parliamentary majority.

They must say whether they intend to run together before Nov. 7, and then put forward their candidates by Nov. 18.

Direct rule

Prime Minister Mariano Rajoy sacked Catalonia’s government — including Puigdemont and his deputy Oriol Junqueras — and assumed direct control over the region. Central government ministries assumed the powers of the Catalan administration until a regional election takes place on Dec. 21.

That unprecedented step was implemented smoothly and calls for civil disobedience were widely disregarded.

US Trade Panel Recommends Varying Solar Panel Import Restrictions

Members of the U.S. International Trade Commission on Tuesday made three different recommendations for restricting solar cell and panel imports on Tuesday, giving President Donald Trump a range of choices to address injury to domestic producers.

The recommendations range from an immediate 35 percent tariff on all imported panels to a four-year quota system that allows the import of up to 8.9 gigawatts of solar cells and modules in the first year. The president’s ultimate decision could have a major impact on the price of U.S. power generated by the sun.

Both supporters and critics of import curbs on solar products were disappointed by the proposals, which were unveiled at a public meeting in Washington.

Trade remedies were requested in a petition earlier this year by two small U.S. manufacturers that said they were unable to compete with cheap panels made overseas, mainly in Asia. The companies, Suniva Inc and the U.S. arm of Germany’s SolarWorld AG, said Tuesday’s recommendations did not go far enough to protect domestic producers.

“The ITC’s remedy simply will not fix the problem the ITC itself identified,” Suniva said in a statement. The company, which is majority owned by Hong Kong-based Shunfeng International Clean Energy, filed the rare Section 201 petition nine days after seeking Chapter 11 bankruptcy protection in April. It had sought a minimum price on panels of 74 cents a watt, nearly double their current cost.

One analyst said the stiffest remedy recommended, a 35 percent tariff on solar panels, would add about 10 percent to the cost of a utility-scale project but would have a negligible impact on the price of residential systems because panels themselves make up a small portion of their overall cost.

“It’s not nearly the doomsday impact we were potentially expecting,” said Camron Barati, a solar analyst with market research firm IHS Markit Technology.

But the top U.S. solar trade group, the Solar Energy Industries Association, said in a statement on Tuesday that any tariffs would be “intensely harmful” to the industry. The group has lobbied heavily against import restrictions on the grounds that they would undermine a 70 percent drop in the cost of solar since 2010 that has made the technology competitive with fossil fuels.

Recommendations

The ITC will deliver its report to Trump by Nov. 13. He will have broad leeway to come up with his own alternative or do nothing at all. Since only two members agreed on the same restrictions, there was no majority recommendation from the four-member commission.

“There is still plenty to be worried about,” said MJ Shiao, who follows the U.S. solar market for GTM Research.

Trump has vowed to protect U.S. manufacturers from low-priced imports, and U.S. Commerce Secretary Wilbur Ross has talked about tariff-rate quotas as a flexible way to protect some industries, allowing imports in as needed, but only up to a certain level before high tariffs kick in.

Commissioners David Johanson and Irving Williamson urged the president to impose an immediate 30 percent tariff on completed solar modules, to be lowered in subsequent years, and a tariff-rate quota on solar cells. Imports of cells in excess of one gigawatt would be subject to a 30 percent tariff that would decline after the first year.

ITC Chair Rhonda Schmidtlein recommended an immediate 35 percent four-year tariff on imported solar modules, with a four-year tariff rate quota on solar cells. This would impose a 30 percent tariff on imports exceeding 0.5 gigawatts and 10 percent on imports below that level. These tariffs would decline over a four-year period.

In the most lenient recommendation, Commissioner Meredith Broadbent said the president should impose a four-year quota system that allows for imports of up to 8.9 gigawatts of solar cells and modules in the first year.

California Wildfire Insurance Claims Top $3.3B

Property damage claims from a series of deadly October wildfires now exceed $3.3 billion, California Insurance Commissioner Dave Jones said Tuesday.

The figure represented claims for homes and businesses insured by 15 companies and was more than triple the previous estimate of $1 billion. Jones said the number would continue to rise as more claims were reported.

The amount of claims now reported means that the fires caused more damage than California’s 1991 Oakland Hills fire, which was previously the state’s costliest, with $2.7 billion in damage in 2015 dollars, according to the Property Casualty Insurers Association of America.

Forty-three people were killed in the October blazes that tore through Northern California, including the state’s renowned winemaking regions in Napa and Sonoma counties. They destroyed at least 8,900 buildings as more than 100,000 people were forced to evacuate. It was the deadliest series of fires in California history.

Several dozen buildings were also damaged or destroyed in fires in Southern California’s Orange County.

“Behind each and every one of these claims … are ordinary people, Californians who lost their homes, lost their vehicles, in some cases whose family members lost their lives,” said Jones, a Democrat who is running for attorney general.

Jones said there were just over 10,000 claims for partial home losses, more than 4,700 total losses and about 700 for business property. There were 3,200 claims for damaged or destroyed personal vehicles, 91 for commercial vehicles, 153 for farm equipment and 111 for watercraft.

The figures do not reflect uninsured losses, including public infrastructure and the property of people who were uninsured or underinsured.

Arson suspect’s warning

Meanwhile, a man facing arson charges for a wildfire that destroyed two homes south of the San Francisco Bay Area had an ominous message for a prosecutor during a court hearing Tuesday: “You’re next.”

Marlon Coy, 54, uttered the words while glaring at Santa Cruz County District Attorney Jeffrey Rosell while he explained four of the felony charges Coy is facing, the Santa Cruz Sentinel reported.

Coy pleaded not guilty to charges of arson of a nondwelling, arson causing bodily injury and being a felon in possession of a firearm, the newspaper reported.

Witnesses saw Coy start the fire on October 16 near a property in Santa Cruz County connected to someone with whom he had a dispute, sheriff’s officials said.

Coy was arrested in possession of jewelry and a bicycle taken from a home that had been burglarized while under evacuation, according to sheriff’s officials.

Ukraine Official: US Should Demand Access to Yanukovych in Manafort Case

A top Ukrainian official says Russia should provide U.S. investigators with access to former Ukrainian President Viktor Yanukovych, who fled to Russia after his rule was toppled in Ukraine’s Maidan revolution of 2014.

Dmitry Shymkiv, the deputy head of the administration of President Petro Poroshenko, said access to Yanukovych could prove vital to an understanding of the work done for Ukraine by indicted former Trump campaign chairman Paul Manafort.

Shymkiv, whose role is similar to that of deputy chief of staff in the United States, spoke to VOA in response to comments made Tuesday by Russian Foreign Minister Sergei Lavrov, who said Washington should further investigate Ukrainian links to Manafort.

Kyiv “has information” about the 2016 U.S. presidential election, Lavrov told a news briefing, according to reports by Russian news outlet RIA.

U.S. investigators probing Russian efforts to interfere in the 2016 U.S. election — which Moscow denies having made — charged Manafort and a business associate on Monday with conspiracy to launder money and other crimes. The charges, some going back more than a decade, center on Manafort’s work in Ukraine, specifically for Yanukovych’s pro-Russian Party of Regions.

Yanukovych, who fled to Crimea just before it was annexed by Russian forces in February 2014, was not seen again until he held a news conference three weeks later in Rostov-on-Don, Russia.

Ukrainian TV channel TSN has reported that Yanukovych lives in the Rostov region, although Russian officials have never confirmed this.

“We need to understand … how all of the [ties between Manafort and top Ukrainian officials] took place,” said Shymkiv, secretary of the National Reform Council to the president of Ukraine and deputy head of Poroshenko’s administration.

Russia, however, has not cooperated with a Ukrainian government arrest warrant for Yanukovych, who stands accused of the “mass murder of peaceful citizens” during the uprising against his administration. Similarly, Shymkiv suggested in a Skype interview with VOA’s Ukrainian service, Russian officials would be unlikely to accommodate a U.S. request for Yanukovych to testify in the Manafort trial.

“I believe Yanukovych should be interrogated by the U.S. government, but I don’t think the Russians would let the Americans do that,” he said, laughing. “But it is absolutely a valid claim, because Yanukovych was the leader of Ukraine’s oligarchical structure, the leader of the corrupted vertical that was built in Ukraine since his rise to power in 2012 and up to the 2013 revolution of dignity.”

Watch: Ukraine, Russia urge US to expand Manafort probe

In his remarks Monday, Lavrov suggested that the charges over Manafort’s work for Ukraine indicated that the U.S. investigators had so far been unable to make a case against Russia, which has been the main focus of the probe headed by special counsel Robert Mueller.

“He has been working for several months. Accused two former Trump campaign managers of what they were doing on behalf of Yanukovych. Even though they were looking for a Russian trace,” Lavrov said, according to the Russian news outlet Sputnik International.

Lavrov also hinted at a Ukrainian role in last year’s U.S. presidential election, saying Ukrainian officials “can say a lot about their position toward the candidates during the 2016 presidential campaign.”

Shymkiv said U.S. investigators should explore whether Manafort was connected to the confiscation of revenue from some Ukrainian businesses while he was serving as a consultant to Yanukovych’s party.

“There was very aggressive behavior toward Ukrainian business people, and there was a strong extraction of money from different industries, so [Yanukovych] should be interrogated in this case, or at least be a subject of the case, because Paul Manafort was hired by the Party of Regions, which represented Mr. Yanukovych,” said Shymkiv.

Ukraine focus on lobbying

Asked for his reaction to the Manafort indictment, Shymkiv, who is tasked with overseeing post-Maidan reforms under Poroshenko’s administration, said that while U.S. news coverage has been dominated by the money-laundering and tax-evasion charges, Ukrainians are focused on U.S.-based lobbying groups in the employ of various Ukrainian politicians.

“[The Manafort trial] puts a significant light on a lot of lobbying activities in the U.S. from international governments or some political forces,” he said. “We’ve seen many Ukrainian politicians hiring lobbyists for different activities — creating, for example, fake hearings in the Congress.

“We appreciate American journalists who investigated it and showed how fake it is. But it is important that through the interrogation of Manafort by U.S. law enforcement agencies, we might get some additional insight into corruption practices, or other similar activities, which were happening in Ukraine during the Yanukovych regime,” Shymkiv added. “This can help Ukrainian law enforcement agencies build stronger cases on convicting some Ukrainian individuals.”

Ukrainian prosecutors, he noted, are willing to remain in touch with U.S. Justice Department officials.

“As this Manafort case evolves, there will be more stories and more disclosures taking place,” he said.

Manafort, who served as Trump’s campaign manager for about two months in the summer of 2016, was forced to resign after reports surfaced about his financial relationship with Yanukovych.

This story originated in VOA’s Ukrainian service.