Aug 31, 2019

Economy: The Anatomy of the Coming Recession | by Nouriel Roubini

Nouriel Roubini

Unlike the 2008 global financial crisis, which was mostly a large negative aggregate demand shock, the next recession is likely to be caused by permanent negative supply shocks from the Sino-American trade and technology war. And trying to undo the damage through never-ending monetary and fiscal stimulus will not be an option.
NEW YORK – There are three negative supply shocks that could trigger a by 2020. All of them reflect political factors affecting international relations, two involve China, and the United States is at the center of each. Moreover, none of them is amenable to the traditional tools of countercyclical macroeconomic policy.
The first potential shock stems from the Sino-American , which earlier this month when US President Donald Trump’s administration threatened additional tariffs on Chinese exports, and formally labeled China a currency manipulator. The second concerns the slow-brewing cold war between the US and China over technology. In a rivalry that has all the hallmarks of a “,” China and America are vying for dominance over the industries of the future: artificial intelligence (AI), robotics, 5G, and so forth. The US has placed the Chinese telecom giant Huawei on an “entity list” reserved for foreign companies deemed to pose a national-security threat. And although Huawei has received temporary exemptions allowing it to continue using US components, the Trump administration this week announced that it was adding an additional 46 Huawei affiliates to the list.
The third major risk concerns oil supplies. Although oil prices have fallen in recent weeks, and a recession triggered by a trade, currency, and tech war would depress energy demand and drive prices lower, America’s confrontation with Iran could have the opposite effect. Should that conflict escalate into a military conflict, global oil prices could spike and bring on a recession, as happened during previous Middle East conflagrations in 1973, 1979, and 1990.
All three of these potential shocks would have a stagflationary effect, increasing the price of imported consumer goods, intermediate inputs, technological components, and energy, while reducing output by disrupting global supply chains. Worse, the Sino-American conflict is already fueling a broader process of deglobalization, because countries and firms can no longer count on the long-term stability of these integrated value chains. As trade in goods, services, capital, labor, information, data, and technology becomes increasingly balkanized, global production costs will rise across all industries.
Moreover, the trade and currency war and the competition over technology will amplify one another. Consider the case of Huawei, which is currently a global leader in 5G equipment. This technology will soon be the standard form of connectivity for most critical civilian and military infrastructure, not to mention basic consumer goods that are connected through the emerging Internet of Things. The presence of a 5G chip implies that anything from a toaster to a coffee maker could become a listening device. This means that if Huawei is widely perceived as a national-security threat, so would thousands of Chinese consumer-goods exports.
It is easy to imagine how today’s situation could lead to a full-scale implosion of the open global trading system. The question, then, is whether monetary and fiscal policymakers are prepared for a sustained – or even permanent – negative supply shock.
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Following the stagflationary shocks of the 1970s, monetary policymakers responded by tightening monetary policy. Today, however, major central banks such as the US Federal Reserve are already pursuing monetary-policy easing, because inflation and inflation expectations remain low. Any inflationary pressure from an oil shock will be perceived by central banks as merely a price-level effect, rather than as a persistent increase in inflation.

Over time, negative supply shocks tend also to become temporary negative demand shocks that reduce both growth and inflation, by depressing consumption and capital expenditures. Indeed, under current conditions, US and global corporate capital spending is severely depressed, owing to uncertainties about the likelihood, severity, and persistence of the three potential shocks.
In fact, with firms in the US, Europe, China, and other parts of Asia having reined in capital expenditures, the global tech, manufacturing, and industrial sector is already in a recession. The only reason why that hasn’t yet translated into a global slump is that private consumption has remained strong. Should the price of imported goods rise further as a result of any of these negative supply shocks, real (inflation-adjusted) disposable household income growth would take a hit, as would consumer confidence, likely tipping the global economy into a recession.
Given the potential for a negative aggregate demand shock in the short run, central banks are right to ease policy rates. But fiscal policymakers should also be preparing a similar short-term response. A sharp decline in growth and aggregate demand would call for countercyclical fiscal easing to prevent the recession from becoming too severe.
In the medium term, though, the optimal response would not be to accommodate the negative supply shocks, but rather to adjust to them without further easing. After all, the negative supply shocks from a trade and technology war would be more or less permanent, as would the reduction in potential growth. The same applies to Brexit: leaving the European Union will saddle the United Kingdom with a permanent negative supply shock, and thus permanently lower potential growth.
Such shocks cannot be reversed through monetary or fiscal policymaking. Although they can be managed in the short term, attempts to accommodate them permanently would eventually lead to both inflation and inflation expectations rising well above central banks’ targets. In the 1970s, central banks accommodated two major oil shocks. The result was persistently rising inflation and inflation expectations, unsustainable fiscal deficits, and public-debt accumulation.
Finally, there is an important difference between the 2008 global financial crisis and the negative supply shocks that could hit the global economy today. Because the former was mostly a large negative aggregate demand shock that depressed growth and inflation, it was appropriately met with monetary and fiscal stimulus. But this time, the world would be confronting sustained negative supply shocks that would require a very different kind of policy response over the medium term. Trying to undo the damage through never-ending monetary and fiscal stimulus will not be a sensible option.

Gerald Celente Video: Mad Dog Mattis, a Presstitute's Hero - Originally Published on August 30, 2019

Aug 30, 2019

Futures & Commodities I Gold I I Gold Price Report Gold, silver eye best month in over 3 years

3 minutes - Source: CNBC

RT: Gold ingots Russia 170922
Gold and silver were poised for their best month in more than three years as fears of a global recession and uncertainty on U.S.-China trade relations drove investors to safe havens, although a slight recovery in equities curbed gains on Friday.
Spot gold rose 0.1% to $1,529.17 per ounce, but has gained nearly 8% so far this month, which would be its biggest monthly gain since June 2016. U.S. gold futures rose 0.1% to $1,538.30.
The market is awaiting news on the trade front, said Suki Cooper, precious metals analyst at Standard Chartered Bank.
“At the moment, the gold market is focused on impact in terms of global growth and whether we’ll continue to see central banks around the world easing monetary policy,” Cooper added.
Chinese and U.S. trade negotiating teams are maintaining effective communication, a day after both sides discussed the next round of in-person negotiations in September, China’s foreign ministry said on Friday.
On Thursday, China’s commerce ministry said a September round of meetings was being discussed by the two sides, but added it was important for Washington to cancel a tariff increase.
Positive signs on the trade front also lifted world stocks to a one-week high, limiting bullion’s upside.
“Gold will have a very high beta to any reduction in trade tensions given that they have driven so much of its rally,” OANDA analyst Jeffrey Halley wrote in a note.
Escalation in the trade war between the world’s biggest economies and heightened fears over a global downturn contributed to a rise of more than $100 for gold in August.
A recent inversion of the U.S. yield curve, where short-dated yields are running above long-dated ones, has also unsettled investors as it often precedes a recession.
Meanwhile, the U.S. Federal Reserve and the European Central bank are widely expected to cut rates next month to stimulate their economies.
Elsewhere, silver rose 0.8% to $18.38 per ounce, on track for its biggest monthly percentage gain since June 2016, gaining 13% so far in August.
“Silver will be volatile going forward and is more likely to come under pressure when we see prices rising given that the industrial picture looks a little bit weak going forward,” Standard Chartered’s Cooper said.
Meanwhile, consumers in top Asian hubs sold their physical gold holdings this week to cash in on high prices with many opting for cheaper silver.
Spot platinum gained 2.2% to $936.02 per ounce, holding near a 16-month high while palladium jumped 4.3% to $1,538.55 per ounce after hitting a one-month peak of $1,504.71 earlier.

Press Release: FDIC Makes Public July Enforcement Actions: PR-75-2019 8/30/2019

2 minutes - Source: FDIC

One Administrative Hearing Scheduled for September 2019

August 30, 2019

The Federal Deposit Insurance Corporation (FDIC) today released a list of orders of administrative enforcement actions taken against banks and individuals in July. There is one administrative hearing scheduled for September 2019.
The FDIC issued a total of 14 orders and one notice of charges in July 2019.The administrative enforcement actions in those orders consisted of four stipulated consent orders; four terminations of consent orders; four Section 19 orders; one stipulated civil money penalty order; one stipulated removal and prohibition order; and one notice of charges and hearing.
To view orders, adjudicated decisions and notices online, please visit the FDIC's Web page by clicking the link below.
July 2019 Enforcement Decisions and Orders
# # #
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's banks and savings associations, 5,362 as of March 31, 2019. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars—insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at, by subscription electronically (go to and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-75-2019

Europe I Europe Markets Closing Report: European stocks close higher on signs of trade war easing; Italy stock falls; Deutsche Wohnen up 10%

Chloe Taylor, Elliot Smith

European stocks rallied on Friday after China struck an accommodating tone over its trade war with the U.S., while British opposition lawmakers plan to trigger an emergency debate to prevent a no-deal Brexit.

European Markets: FTSE, GDAXI, FCHI, IBEX

FTSEFTSE 100FTSE7192.197.870.11378049305
The pan-European Stoxx 600 climbed 0.8% by the afternoon, with China-exposed basic resources stocks jumping 2.5% as all sectors traded in positive territory.
Bucking the trend, however, were Italian stocks, which fell on the back of new political developments in the country.
Luigi Di Maio, leader of Italy’s Five-Star Movement, said on Friday his party would only enter a coalition with opposition PD if it agreed to a string of policy demands, denting hopes that some political stability would soon be restored in Rome.
Italy’s FTSE MIB was more than 0.3% lower during afternoon deals, with Banco BPM slumping to the bottom of the Stoxx 600 on a 3% loss.
More broadly, stocks worldwide are experiencing a reprieve after the Chinese Ministry of Commerce on Thursday indicated that it would not escalate the trade war with Washington, urging negotiation and collaboration in pursuit of a “calm” resolution.
U.S. stocks were trading in positive territory on Friday as investors became more hopeful that a resolution to the Sino-U.S. conflict would soon be reached.
Back in Europe, investors continued to monitor the fallout from U.K. Prime Minister Boris Johnson’s suspension of parliament. The main opposition Labour party said on Thursday that it would trigger an emergency debate in parliament next week, in a bid to stop Johnson taking Britain out of the European Union without a withdrawal deal on October 31.
The no-deal scenario is widely opposed in the British parliament, and the elevated risk of it becoming reality has sent sterling lower.
In corporate news, Reuters reported on Thursday that French lender BNP Paribas plans to bid for Deutsche Bank’s equity derivatives book, with the intention of securing a deal within the next few weeks.
On the data front, French August CPI (consumer price index) inflation came in at 1.2% year-on-year, slightly softer than in July but in line with forecasts. Spanish retail sales rose by 3.2% in July from a year earlier after climbing by 2.5% in June.
U.K. consumer sentiment surveys revealed that confidence ebbed away from British businesses and consumers in August as the Brexit crisis metastasized, suggesting political turmoil is increasingly impacting the economy.

Stocks on the move

Deutsche Wohnen shares jumped 10.6% after a German newspaper reported that an incoming rent freeze in Berlin could be more lenient than previously planned.
Shares of Danish hospital equipment maker Ambu saw its shares rise 6% after a positive recommendation from the U.S. Food and Drug Administration (FDA).
At the other end of the Stoxx 600 was jewelry maker Pandora, which was trading 3% lower during the afternoon session. The Danish company recently announced it would undergo an extensive rebrand in a bid to boost sales.

Market Inside | Premarket | Biggest Moves Premarket:Stocks making the biggest moves premarket: Campbell Soup, Ulta, Tesla, GE & more

Peter Schacknow

Check out the companies making headlines before the bell:
Campbell Soup – Campbell Soup reported adjusted quarterly profit of 49 cents per share, 8 cents above estimates, with organic sales up 2%. Revenue did fall below Wall Street forecasts, but Campbell said it has built a solid foundation on which to improve its results in fiscal 2020.
Big Lots – The discount retailer beat estimates by 13 cents with adjusted quarterly profit of 53 cents per share, with revenue also above estimates. Comparable store sales rose 1.2%, shy of the 1.9% consensus estimate of analysts surveyed by Refinitiv. Big Lots also said it was confident it would be able to successfully navigate tariff-related headwinds.
Dell Technologies – Dell reported adjusted quarterly profit of $2.15 per share, well above the consensus estimate of $1.47. The computer maker also saw revenue beat estimates on strong sales across its computer product line. Dell also said it is successfully mitigating the impact of tariffs imposed by the U.S. and China.
Ulta Beauty – Ulta missed estimates by 4 cents with quarterly earnings of $2.76 per share, with the cosmetics retailer’s revenue essentially in line. However, comparable store sales rose less than expected, and Ulta lowered its profit forecast as sales of color cosmetics slow.
Marvell Technology – Marvell beat estimates by 1 cent with adjusted quarterly earnings of 16 cents per share, with the chip maker’s revenue also beating forecasts. However, Marvell gave weaker-than-expected current-quarter guidance for both revenue and profit, due to the impact of a ban on sales to China’s Huawei, as well as what the company calls a difficult macroeconomic environment.
Walt Disney – Disney sold its 80% stake in the YES Network to an investor group that includes the New York Yankees, and Sinclair Broadcast Group.
Tesla – Sixteen Tesla models will be exempt from China’s auto import tax, according to a government statement. Separately, Tesla raised prices for some of its vehicles in China, as the yuan drops to its lowest levels in more than a decade.
General Electric – GE won a partial dismissal of a shareholder lawsuit that had accused it of fraudulent accounting. The judge did give shareholders permission to amend their complaint.
Workday – Workday reported adjusted quarterly profit of 44 cents per share, 9 cents above estimates, while the maker of human resources and financial software also saw revenue come in above forecasts. Workday saw subscription revenue jump 34% during the quarter, and gave a better-than-expected forecast for current quarter subscription revenue.
Groupon – Groupon is being targeted by activist investors, according to the Wall Street Journal. The paper said those investors are hoping to persuade management to buy back stock, enter a strategic partnership, or sell the company.
American Outdoor Brands – American Outdoor Brands reported adjusted quarterly profit of 3 cents per share, 4 cents shy of estimates, with the Smith & Wesson parent also seeing revenue fall short of Wall Street forecasts. The company also gave a weaker than expected full year forecast.

Gold: Higher prices and custom duty dampened Indian demand in July

6-7 minutes - Source: GoldHub



  • Indian gold imports reached just 37.7t in July 2019 – 49% lower than the same month last year 
  • The domestic gold price was 2.3% higher in July compared to June; 23% higher y-t-d
  • The custom duty on gold was unexpectedly raised by 2.5% in the Union Budget on 5th July
  • With elevated domestic gold prices and a higher custom duty, the discount in the local gold market reached a peak of US$28/oz in July
  • Volatile prices and weak physical demand encouraged healthy gold futures trading on MCX: volumes touched a high of 46.8t in July

No support for consumer demand

Following weak domestic retail demand in June, gold demand suffered a big blow in July: the custom duty on gold was unexpectedly increased by 2.5% to 12.5% in the Union Budget. Demand received no support from the domestic price either. The spot gold price (995 fineness) maintained its positive trajectory and breached the Rs 35,000/10gm level on 19th July – the highest gold price on record. The price finished the month 2.3% higher than at the end of June, and year-to-date has increased 23%. Economic indicators, such as IIP and domestic vehicle sales, also further pointed towards a slowing economy, adding to the woe.
With the elevated domestic gold price and a higher custom duty, there was understandably little demand for gold in July. During the seasonally quiet period for Indian gold demand, the discount in the domestic market widened further, to a peak of US$28/oz in July – the biggest discount since August 2016 (Chart 1).

Imports declined m-o-m

Indian gold imports totalled 37.7t in July 2019 – 49% lower y-o-y and 39% lower m-o-m (Chart 2). The higher custom duty and elevated gold price level were the primary reasons for the lower levels of imports. Imports were further dampened by muted demand from rural communities, who diverted their spending towards the sowing of Kharif crops 1.

Breaking down July imports, bullion accounted for the lion’s share (Chart 3). A total of ten banks imported 7.4t of bullion during the month, while six refineries imported a meagre 3.4t of gold doré (fine gold content). Including jewellery exports and round-tripping estimates, net gold imports in July were 10.6t, some way off the 55.2t seen in July 2018. 2
Most of the bullion was sourced from Switzerland (69%) and the UAE (19%) in July. But gold doré imports came from a wider range of sources, including Africa, Middle East and Latin America. The prominent gold doré exporting countries to India were Tanzania, Saudi Arabia and Bolivia – accounting for a combined 82% of gold doré imports in July (Chart 4).

Record trading volumes on MCX

Driven by the volatile domestic gold price and the widening spread between futures and spot prices, trading volumes on MCX reached an all-time high of 46.8t on 5th July (more than three times the average volume of 15.2t in June) (Chart 5)3.  Weak physical demand also encouraged future trading on MCX. The trading volume on 5th July was the highest trading volume level since 13th June 2013.

Monsoon is progressing well

Having delayed its arrival, the monsoon began on a weak note in June, ending the month at 33% below the long period average rainfall (LPA). But the monsoon gained momentum in July, ending at just 9% below the LPA and has further gained strength in August. As of 28th August, the monsoon rainfall is 1% above the LPA, with Kharif crop sowing now just 2.3% lower than last year (Chart 6)4. A normal monsoon and healthy Kharif sowing bodes well for rural gold demand in Q4 2019.

Outlook for August 2019

Aligned with rising international gold price, the domestic gold price in August breached the Rs38,000/10gm level to reach a high of Rs38,795/10gm - an increase of 12% from end of July price. At these price levels, and during the seasonally quiet Q3, gold imports and demand are expected to remain muted in August and September.


  1. Kharif crop season sowing season is from June to October. The seeds are sown at the beginning of Monsoon season and crops are harvested at end of Monsoon season.
  2. Round-tripping is the act of exporting gold, be it jewellery, bars or coins, with the sole purpose of melting it down before re-importing it back to the original exporting country.
  3. The difference in spot and futures price widened to Rs300/10 gm providing an arbitrage opportunity for traders- where they bought gold in the spot market and sold it at profit on MCX 
  4. Monsoon rainfall is taken from India Meteorological Department and Kharif crop sowing is from Ministry of Agriculture with data as of week ending on 23 August 

U.S. Market | Dow Futures Indicator Update: Dow futures up more than 150 points, reversing earlier losses

Fred Imbert, Sam Meredith

U.S. stock index futures were higher Friday as the world’s two largest economies showed a willingness to resolve their long-running trade dispute.
At around 7 a.m. ET, Dow Jones Industrial Average futures rose 168 points, indicating a positive open of more than 189 points. Futures on the S&P 500 and Nasdaq 100 were both higher, reversing earlier losses.
Market focus is largely attuned to global trade developments, after President Donald Trump said that some trade discussions had taken place on Thursday, with more scheduled over the coming weeks.
China’s commerce ministry said Thursday it was willing to calmly resolve the long-running trade dispute, but added it was against any further escalation in tensions. The comments spurred hopes for progress in talks.
Trade tensions have dominated market sentiment for much of this year, with wild swings in global markets as rhetoric between world’s two largest economies fluctuates from conciliatory to combative.
The back and forth between China and the U.S. on the trade front has led to a volatile month on Wall Street. Entering Friday’s session — the last one for August — the Dow and S&P 500 were both down nearly 2% while the Nasdaq Composite had lost around 2.5%.
The Cboe Volatility Index (VIX), widely considered to be the best fear gauge on Wall Street, traded as high as 24.81 in August before pulling back to around 17. Investors also loaded up on traditionally safer assets such as gold and silver this month. The SPDR Gold Trust (GLD) is up more than 8% in August while the iShares Silver Trust (SLV) has surged 12.2%.
At the same time, economic data has also pointed to a global growth slowdown, ramping up concerns of a possible recession.
On the data front, personal income figures for July will be released at around 8:30 a.m. ET. Consumer spending for July and the latest monthly and annualized core personal consumption expenditures (PCE) index will be released at the same time.
Chicago PMI (Purchasing Managers’ Index) and consumer sentiment data for August will follow slightly later in the session.

DealBook | DealBook Briefing: Could We Talk Ourselves Into Recession?

13 - 16 minutes - Source: NYT
CreditCreditDavid J. Phillip/Associated Press
Good Friday. We’ll be taking a break for Labor Day, but will be back in your inboxes on Tuesday. (Was this email forwarded to you? Sign up here.)
President Trump’s trade war with China and the gloom hanging over the global economy have many people thinking about the threat of recession in America. But some worry that there’s a danger of simply talking the U.S. into a downturn.
The U.S. economy is sending mixed messages about its health:
• G.D.P. “rose at a seasonally adjusted annual rate of 2.0 percent in the second quarter, a solid pace but down from a 3.1 percent rate in the first quarter and 2.9 percent overall in 2018,” the WSJ reports.
• The Economist says that some parts of the U.S. may already be in recession.
• But American corporate profits rose in the second quarter as companies reduced investment, the WSJ notes, and “U.S. households boosted spending at a 4 percent annual rate in the second quarter, the strongest pace since late 2014.”
Mr. Trump’s advisers think the gloom is being overstated. Tomas Philipson, the acting chairman of the White House’s Council of Economic Advisers, told the NYT that reporters who have focused on possible signs of a recession appeared “to want people to lose jobs” and “become not economically self-sufficient.”
• There is no guarantee that a recession is coming. And “by several measures, the American economy continues to thrive, particularly when compared with other rich countries,” Jim Tankersley and Jeanna Smialek of the NYT write.
• But “consumers drive about 70 percent of economic activity in America, and if they become spooked and pull back on purchases, growth could slow more sharply,” they add. “Stock market losses could unsettle Americans and cause them to clamp their wallets shut.”
Mr. Trump continues to shrug off economic worries. The economy is “doing GREAT, with tremendous upside potential,” he tweeted yesterday, while suggesting that he had little intention of backing down from the trade war with China.
But if the worst happens, he may have no choice. “The trade war is categorically the single biggest risk” to the economy, Seth Carpenter, the chief U.S. economist at UBS, told the NYT, adding that reducing tariffs could provide economic relief.
CreditRich Pedroncelli/Associated Press
Uber, Lyft and DoorDash each pledged $30 million to fight legislation in California that would force them to treat their drivers as employees instead of independent contractors, Kate Conger of the NYT reports.
• The companies plan to fund a ballot initiative that would essentially exempt them from the proposed law, which is part of California’s Assembly Bill 5.
• “The companies said their proposed ballot initiative would preserve drivers’ ability to set their own schedules, while Uber and Lyft would offer a concession on minimum wage standards, health benefits and collective bargaining rights,” Ms Conger writes.
• “But the bill’s sponsor, Assemblywoman Lorena Gonzalez, a Democrat from San Diego, has said she does not foresee a deal with the companies,” Ms. Conger adds.
The companies oppose classifying drivers as employees. As contractors, drivers receive almost no regular benefits, such as sick pay or vacation time, which saves businesses like Uber and Lyft millions of dollars. Both have said that categorizing drivers as full-time workers is a risk to their businesses.
But time is running out. A vote on the bill is expected before the legislative session ends in mid-September, and the companies’ ballot has not yet been drafted.
CreditJames Durbin/Reporter-Telegram, via Associated Press
The Trump administration announced plans to relax Obama-era methane emissions rules this week, in a move that might be expected to be welcomed by oil and gas producers. But not all of them approve, Cliff Krauss of the NYT writes.
The benefit of the rollback to them isn’t clear cut. It depends on whether the new rules would do more to benefit domestic energy production or tarnish the reputation of natural gas as a clean fuel:
• Natural gas often escapes unburned during production and distribution. Its main component is methane, which is far more potent than carbon dioxide as a greenhouse gas.
• Removing constraints on its emissions could hurt the argument that gas should replace coal in generating power.
Many global energy companies distanced themselves from the administration’s decision, Mr. Krauss writes. Royal Dutch Shell and BP said they supported regulation of methane emissions in some form, citing their commitments to environmental causes.
But smaller domestic companies support the rollback, Mr. Krauss adds. They often produce as little as 10 barrels a day and say they can’t afford higher compliance costs.
The difference in opinion mirrors larger divides over Mr. Trump’s other deregulation efforts, Mr. Krauss writes. Oil executives have shown little enthusiasm for new rules that could open the Arctic National Wildlife Refuge and deepwater areas off the Atlantic coast for further exploration.
Federal prosecutors are studying new allegations that Huawei stole American technology, according to Dan Strumpf of the WSJ, citing unidentified sources.
• “Among the situations being examined are episodes in which Huawei was accused of stealing intellectual property from multiple people and companies over several years.”
• The inquiries “suggest that the government is investigating aspects of Huawei’s business practices that weren’t covered in indictments of Huawei issued earlier this year.”
• “They include alleged theft of smartphone-camera technology from a Portuguese multimedia producer and Huawei’s practices of recruiting employees from rival companies, the people said.”
Huawei can’t catch a break from the U.S. right now. It remains on the so-called U.S. entity list, which means American companies can’t sell it components and software without a license. (However, the Trump administration recently extended a waiver that allows some transactions for another 90 days.)
But China isn’t sitting still. It plans to release its own “unreliable-entity list,” which would restrict foreign organizations from dealing with Chinese counterparts. And Beijing is reportedly studying Chinese companies’ exposure to U.S. suppliers to minimize the effect of current and future bans on purchases.
More: A court case brought by the Justice Department against the Chinese chip maker Fujian Jinhua Integrated Circuit over theft of American intellectual property, which was announced 10 months ago, still hasn’t gone to court. And the Chinese authorities effectively expelled a WSJ reporter after he wrote an article about a cousin of President Xi Jinping.
CreditGeorge Frey/Getty Images
When FedEx decided this month to cut ties to Amazon, it brought into focus a new reality: that the e-commerce giant is now a shipping force in its own right and a huge rival to incumbents, according to Sebastian Herrera and Vanessa Qian of the WSJ.
• “Amazon has quietly blanketed the nation with hundreds of sprawling suburban warehouses and neighborhood package-sorting centers, flooded the streets with tens of thousands of vans and even taken to the airways,” Mr. Herrera and Ms. Qian write.
• Amazon has increased the number of its delivery facilities to roughly 400, from about 65 in 2013 , according to the consulting firm MWPVL International.
• Over the past decade, Amazon’s spending on shipping and fulfillment has risen to about $61.7 billion in 2018, from $5.5 billion in 2010. That equals about a quarter of Amazon’s revenue.
• Amazon now handles an estimated 4.8 million packages every day in the U.S., according to MWPVL, as the company now delivers nearly half of its orders itself.
CreditCarlo Allegri/Reuters
Since Jeffrey Epstein’s death, the federal authorities have refocused their investigation on the more than half-dozen employees, girlfriends and associates who prosecutors say recruited girls for him to abuse, the NYT reports.
Mr. Epstein relied on a network of underlings, according to civil suits. Some trained girls how to sexually pleasure him; others ensured that he always had a fresh supply of teenage girls at the ready.
There was a hierarchy to the sex-trafficking ring, accusers say. At the top was Ghislaine Maxwell, Mr. Epstein’s longtime companion. Below her was Sarah Kellen, referred to as the “lieutenant” in one lawsuit, who is accused of managing contact information for girls.
The federal authorities are eyeing possible charges that include sex trafficking and sex trafficking conspiracy, the NYT reports, citing people with knowledge of the investigation. So far, federal prosecutors have not charged or named any co-conspirators.
Bennett Goodman, the co-founder of Blackstone’s powerful credit-investing unit, GSO, plans to retire at the end of the year.
UBS named Sabine Keller-Busse, currently its C.O.O., as its president of Europe, the Middle East and Africa. It also appointed Suni Harford as head of asset management.
Madeleine Westerhout has resigned as President Trump’s personal assistant, after sharing details about his family and administration at an off-the-record dinner with reporters.
Vice Media is reportedly laying off 15 employees from its Viceland cable channel.
• Disney agreed to sell its stake in YES Network, the New York Yankees’ regional sports network, to a group including Amazon, the Sinclair Broadcast Group and the team, for $3.47 billion. (CNBC)
• G.E. said it planned to sell an aircraft-financing unit with $3.6 billion in receivables to Apollo Global Management and Athene Holding. (Bloomberg)
• Sony plans to sell its $760 million stake in Olympus back to the imaging company, a move called for by Third Point’s Dan Loeb. (Reuters)
• Activist investors are taking stakes in Groupon with a goal of pushing the e-commerce company to consider share buybacks or a sale of itself. (WSJ)
• CNH Industrial, the Italian-American industrial vehicles maker, is reportedly considering a spinoff of its Iveco truck unit. (Reuters)
Politics and policy
• The Democratic National Committee blocked plans to let Iowans vote by phone in next year’s presidential caucuses, citing cybersecurity concerns. (NYT)
• The Trump administration reportedly plans to unveil a new rule expanding the number of Americans eligible for overtime pay. (WSJ)
• The Justice Department’s watchdog criticized James Comey for leaking memos about his interactions with President Trump to people outside the F.B.I. (NYT)
• Mr. Trump authorized the creation of a U.S. Space Command yesterday, describing it as a precursor to a full-fledged space branch of the military. (NYT)
• Joe Biden dismissed a report that he has been telling an embellished story about a war hero while on the campaign trail. (NYT, WaPo)
• Legal experts say that court challenges to a British government plan to suspend Parliament, which would hurt efforts to block a no-deal Brexit, would be unlikely to succeed. (FT)
• Some members of the governing Conservative Party have allied themselves with the opposition Labour Party to help prevent Britain from leaving the E.U. without a deal. (FT)
• Negotiations between British and European officials over Brexit will take place twice a week starting in September. (Politico)
• Why Britain’s economy isn’t ready for a no-deal Brexit. (FT)
• India’s restaurants are rebelling against food delivery apps like Zomato and Uber Eats. (NYT)
• YouTube is removing its paywall for original content in favor of an ad-supported model, rather than chasing subscription-based rivals like Netflix. (FT)
• Apple will unveil its latest iPhones on Sept. 10. (Bloomberg)
• Here’s what the U.S. could learn from Europe about antitrust regulation of Big Tech. (Politico)
• Uber’s C.E.O., Dara Khosrowshahi, said “it sure looked like” the company’s former engineer Anthony Levandowski had taken information on self-driving cars from Google. (Bloomberg)
Best of the rest
• State attorneys general say that a proposed deal for Purdue Pharma to settle more than 2,000 lawsuits over its role in the opioid crisis doesn’t offer enough money. (WSJ)
• The marketing practices of the e-cigarette manufacturer Juul are reportedly under investigation by the F.T.C. (WSJ)
• “Fears of a world domination by a handful of asset managers are overblown.” (Institutional Investor)
• China’s renminbi looks set to suffer its biggest monthly fall in value in more than 25 years. (FT)
• Most people who start successful tech companies are middle-aged. (NYT)
• “American workers under 35 report being happier with their paychecks than people over 55 for the first time since at least 2011.” (WSJ)

Europe Economy: ECB hawks are trying to downplay the chances of a huge stimulus package in September

Silvia Amaro , Matt Clinch

GP: ECB Governing Council Meets As Eurozone Slumps 1
FMario Draghi (C), president of the European Central Bank (ECB)speaks flanked by Luis de Guindos, vice president of the European Central Bank (ECB), and Christine Graeff, director general for communications to the media following a meeting of the ECB Governing Council at ECB headquarters of March 7, 2019 in Frankfurt, Germany.
Thomas Lohnes | Getty Images
Two top officials have tried to temper market expectations of an immediate quantitative easing (QE) package being launched by the European Central Bank (ECB).
Earlier in the summer, ECB President Mario Draghi said he was looking at further options to prop up the 19-member euro zone economy, outlining that one of the possibilities included a new program of asset purchases to stimulate lending and boost inflation.
Investors cheered his dovish comments with ECB members like François Villeroy de Galhau highlighting that a major bond-buying program, also known as QE, could come in the proceeding months if needed.
But just as investors gear up for the ECB’s next meeting on September 12, two notably hawkish members of the euro zone’s central bank have decided to inject some reality back into the debate.
“In my opinion, based on the current data, it is much too early for a huge package,” executive board member Sabine Lautenschlaeger said in an interview with Market News this week which was published on the ECB’s website Friday.
“I am still convinced that the Asset Purchase Programme (APP) is the ultima ratio, and it should only be used if you have a risk of deflation; and the risk of deflation is nowhere to be seen now.”
Fellow ECB member and Dutch central bank chief Klaas Knot added his own words of caution. “If deflation risks come back on the agenda then I think the asset-purchase programme is the appropriate instrument to be activated, but there is no need for it in my reading of the inflation outlook right now,” he told Bloomberg Thursday.
But there’s only been a muted market response since these comments with European stocks posting gains on both Thursday and Friday. Analysts at Rabobank put this down to traders already being aware that there wasn’t unanimity among the ECB’s board members on QE.
They also highlighted in a research note that the reason the hawks “are stating their objections so vociferously is that they know that it is very likely that the APP will imminently be re-started.”
If implemented, it would be the second time in its history that the central bank has announced a massive program to directly inject money into the euro zone economy.
Last week, Erik Nielsen, group chief economist at UniCredit, predicted QE would be launched in September and could between 300 billion and 400 billion euros ($333.07 and $444.10 billion) over a nine-month period.
The euro area is still struggling to deal with its low inflation levels and to grow at a significant rate. According to the central bank’s latest forecasts, out in June, headline inflation is set to reach 1.3% in 2019 — the ECB’s target is “below but close to 2%.” In terms of growth, the central bank is expecting growth to reach 1.2% this year — having grown at a rate of 1.8% in 2018.
Silvia Dall’Angelo, senior economist at Hermes Investment Management, told CNBC via email last week that he wouldn’t rule out an open-ended approach by the ECB.
“An ECB official recently made the case for a more forceful move, a bigger rather than smaller programme is likely, say 45 billion euros per month for a year,” he said.

U.S. Market | Dow Futures Indicator: Dow futures up more than 100 points, reversing earlier losses

Sam Meredith

U.S. stock index futures were higher Friday morning, as the world’s two largest economies showed a willingness to resolve their long-running trade dispute.
At around 05:30 a.m. ET, Dow futures rose 138 points, indicating a positive open of more than 159 points. Futures on the S&P and Nasdaq were both higher, reversing earlier losses.
Market focus is largely attuned to global trade developments, after President Donald Trump said that some trade discussions had taken place on Thursday, with more scheduled over the coming weeks.
China’s commerce ministry said Thursday it was willing to calmly resolve the long-running trade dispute, but added it was against any further escalation in tensions. The comments spurred hopes for progress in talks.
Trade tensions have dominated market sentiment for much of this year, with wild swings in global markets as rhetoric between world’s two largest economies fluctuates from conciliatory to combative.
At the same time, economic data has also pointed to a global growth slowdown, ramping up concerns of a possible recession.
On the data front, personal income figures for July will be released at around 8:30 a.m. ET. Consumer spending for July and the latest monthly and annualized core personal consumption expenditures (PCE) index will be released at the same time.
Chicago PMI (Purchasing Managers’ Index) and consumer sentiment data for August will follow slightly later in the session.
In corporate news, Campbell Soup and Big Lots are among the companies scheduled to publish their latest quarterly results before the opening bell.

Asia Market | Asia Markets Closing Report: Asia stocks mixed amid positive signals from Beijing on US-China trade

Eustance Huang

Stocks in Asia were mixed on Friday as Beijing hinted that it will not retaliate against the latest round of tariffs from Washington for now.
In Japan, the Nikkei 225 rose 1.19% to close at 20,704.37 as shares of index heavyweight and robot maker Fanuc surged 2.73%. The Topix index also added 1.46% to end its trading day at 1,511.86.
Similar gains were seen in South Korea, where the Kospi finished the session 1.78% higher at 1,967.79 as chipmaker SK Hynix saw its stock soar 5.59%.
The Bank of Korea left its benchmark interest rate unchanged on Friday, a decision that was in line with expectations of analysts surveyed by Reuters. The central bank had cut its base rate for the first time in three years in July.
Australia’s S&P/ASX 200 jumped 1.49% to close at 6,604.20.
Mainland Chinese shares, on the other hand, slipped on the day. The Shanghai composite was down 0.16% to about 2,886.24 and the Shenzhen component shedding 0.35% to 9,365.68. The Shenzhen composite fell 0.744% to approximately 1,579.25.
Hong Kong’s Hang Seng index was fractionally higher, as of its final hour of trading, with the city remaining in a state of turmoil as planned protests for the weekend were cancelled and pro-democracy activist Joshua Wong was arrested.
Overall, the MSCI Asia ex-Japan index gained 0.95%.

Positive signals from Beijing

Gao Feng, a spokesman for China’s Ministry of Commerce, said Thursday that Beijing is willing to resolve its trade fight with Washington calmly, indicating that the Chinese are more interested in negotiations than they are on retaliating.
“We firmly reject an escalation of the trade war, and are willing to negotiate and collaborate in order to solve this problem with a calm attitude,” Feng said, according to a CNBC translation of his Mandarin-language remarks. He noted that the Chinese and U.S. trade delegations have maintained “effective” communication.
Still, one strategist urged caution for investors.
“We have been telling our clients to somewhat de-risk portfolios a month ago,” Vasu Menon, executive director of investment strategy at Singapore’s OCBC Bank, told CNBC’s “Squawk Box” on Friday.
“In some ways, we are neutral,” Menon said. “We’re not saying you should get out of the market completely. I think that’s not a good idea, fundamentals are not that bad right now. What’s dragging the market down is sentiment.”
Meanwhile, a closely watched yield curve inversion in U.S. Treasurys remained, with the yield on the 10-year Treasury note below that of the 2-year note’s rate. That has raised concerns among some investors as the phenomenon has historically preceded a recession. The yields on the 10-year and 2-year Treasury notes were last at 1.5298% and 1.5359%, respectively.

Asia-Pacific Market Indexes Chart

NIKKEINikkei 225 IndexNIKKEI20704.37243.441.19
HSIHang Seng IndexHSI25724.7321.230.08
ASX 200S&P/ASX 200ASX 2006604.2096.801.49
KOSPIKOSPI IndexKOSPI1967.7934.381.78
CNBC 100CNBC 100 ASIA IDXCNBC 1007696.6181.351.07

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.579, recovering from lows below 98.0 seen earlier in the week.
The Japanese yen traded at 106.37 against the dollar after weakening from levels below 106.2 yesterday, while the Australian dollar changed hands at $0.6712 after seeing an earlier high of $0.6736.
Oil prices were lower in the afternoon of Asian trading hours, with international benchmark Brent crude futures slipping 0.36% to $60.86 per barrel and U.S. crude futures losing 0.67% to $56.33 per barrel.
— Reuters and CNBC’s Evelyn Cheng contributed to this report.

Press Release: SEC Shuts Down $300 Million Fraud Perpetrated by San Diego Company and Its Principal

3 minutes - Source: SEC

Obtains Consent to Asset Freeze Preserving Retail Investor Assets

Washington D.C., Aug. 29, 2019 —
The Securities and Exchange Commission today announced it has filed charges and obtained a consented-to asset freeze against San Diego-based ANI Development LLC, its principal, Gina Champion-Cain, and a relief defendant, for operating a multi-year $300 million scheme that defrauded approximately 50 retail investors. 
According to the SEC’s complaint, beginning in 2012, defendants fraudulently raised hundreds of millions of dollars from investors by claiming to offer investors an opportunity to make short-term, high-interest loans to parties seeking to acquire California alcohol licenses. In truth, the SEC alleges, the investment opportunity was a sham. Contrary to defendants’ representations, the SEC asserts, defendants did not use investor funds to make loans to alcohol license applicants. Instead, Cain directed significant amounts of investor funds to a relief defendant that she controlled. 
“The SEC took emergency action to stop what we allege is an egregious fraud,” said Los Angeles Regional Director Michele Wein Layne. “Importantly, the agreement we reached with the defendants to freeze their assets during the litigation will give investors the best chance to maximize their recovery going forward.”
The SEC’s complaint, filed in federal district court in San Diego on August 28, 2019, charges defendants with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933. Without admitting any violations of federal law, defendants have agreed to preliminary injunctions against violations of these provisions of the federal securities laws, asset freezes, and the appointment of a receiver over ANI and the relief defendant to marshal and preserve assets. The stipulated order is subject to court approval. The complaint seeks disgorgement of allegedly ill-gotten gains and prejudgment interest, monetary penalties, and permanent injunctions. 
The SEC’s ongoing investigation is being conducted by Alec Johnson and Louis Boyarsky of the SEC’s Los Angeles Regional Office and supervised by Marc J. Blau. The SEC’s litigation will be led by Kathryn Wanner. 

Press Release: SEC Charges Adviser Firm and Its Principals With Defrauding Retired NFL Players

3-4 minutes - Source: SEC

Washington D.C., Aug. 29, 2019 —
The Securities and Exchange Commission today charged a Tallahassee-based investment adviser firm and its two former principals with defrauding investors, most of whom were retired NFL players who had joined a class-action lawsuit against the league claiming they suffered brain injuries as a result of concussions.
The SEC charged Cambridge Capital Group Advisors, LLC (f/k/a Cambridge Capital Advisors, LLC); Cambridge’s president Phillip Timothy Howard, a Florida attorney who represented the retired players in the class action lawsuit; and Don Warner Reinhard, a former registered investment adviser previously barred by the SEC, with defrauding 20 investors in two proprietary hedge funds operating out of Howard’s law offices.  According to the SEC’s complaint, the defendants advertised that the funds would invest in a variety of instruments, but unbeknownst to investors, in fact invested almost exclusively in settlement advance loans to more than 70 of Howard’s NFL class-action clients.
As alleged, the defendants represented that Reinhard was an “extremely successful investment manager,” but failed to mention that he had served jail time for bankruptcy and tax fraud, and had been barred by the SEC from working for any investment adviser firm.  The SEC further alleges that Howard defrauded investors by borrowing $612,000 in undisclosed personal mortgage loans from the funds, which he never repaid, and that Howard and Reinhard used investor funds to pay themselves fabricated “broker fees” on settlement advance loans to Howard’s legal clients.  Howard and Reinhard allegedly raised $4 million from the retired NFL players, about half of whom rolled over their NFL 401(k) accounts to the hedge funds.
“We allege that Cambridge, Howard and Reinhard defrauded these particularly vulnerable investors, many of whom invested their retirement savings,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office.  “Instead of investing all of the funds’ assets as promised, Howard and Reinhard used a significant portion of investor money to line their own pockets.”
The SEC’s complaint filed in federal district court in the Northern District of Florida charges Howard, Reinhard, and Cambridge with violating the anti-fraud provisions of the federal securities laws, and seeks permanent injunctions, disgorgement of allegedly ill-gotten gains, prejudgment interest, and financial penalties.
The SEC’s investigation was conducted by David P. Staubitz and Mark Dee, under the supervision of Chedly C. Dumornay and Glenn S. Gordon of the SEC’s Miami Regional Office.  The litigation will be led by Amie R. Berlin, under the supervision of Andrew O. Schiff.

Press Release: SEC Charges Private Lender and CEO with Fraudulent Mismarking Scheme

3-4 minutes - Source: SEC

Washington D.C., Aug. 29, 2019 —
The Securities and Exchange Commission today charged Live Well Financial, Inc. and its CEO, Michael Hild, both of Richmond, Va., with perpetuating a multi-million dollar bond mismarking scheme against Live Well's short-term lenders. The complaint also charges Live Well's CFO, Eric Rohr, and Executive Vice President, Darren Stumberger, both of whom consented to partial judgments against them.
The SEC alleges that Live Well, under the direction of Hild, fraudulently inflated the value of its portfolio of complex reverse-mortgage bonds.  According to the complaint, Hild directed Live Well to submit falsely inflated bond prices to an industry-leading pricing service, who he knew would simply publish the prices Live Well gave it. As Hild was aware, most of Live Well's lenders relied on those inflated prices in loaning money to Live Well through repurchase securities transactions. Through this alleged scheme – which Hild called a "self-generating money machine" – Live Well was able to borrow tens of millions of dollars more from its lenders through the securities transactions than it could have borrowed had the bonds been priced accurately and was able to fund lavish compensation packages for Hild and others. During the 18 months following the implementation of the scheme, Live Well's bond portfolio shot up in value from $71 million to $570 million. According to the complaint, the fraudulent scheme collapsed in 2019 when Live Well's lenders sought to sell the bonds back to Live Well and Live Well did not have the requisite funds to complete the repurchase securities transactions, leaving its counterparties exposed to losses in excess of $80 million.
"Hild's 'self-generating money machine' was a brazen fraud through which Hild enriched himself at the expense of Live Well's counterparties," said Daniel Michael, Chief of the SEC's Complex Financial Instruments Unit. "This case starkly underscores the risks of improperly valuing assets, and we will remain focused on pursuing those who misrepresent the value of their securities."
The SEC's complaint charges Live Well, Hild, Rohr, and Stumberger, with violations of the anti-fraud provisions of the federal securities laws. The complaint seeks a permanent injunction, disgorgement of ill-gotten gains along with prejudgment interest, financial penalties, and officer and director bars against Hild and Rohr. Stumberger and Rohr have consented to the entry of a partial judgment that permanently enjoins them from future violations of the charged provisions of the federal securities laws.
In a parallel action, the U.S. Attorney's Office for the Southern District of New York today announced criminal charges against Hild, Rohr, and Stumberger.
The SEC's investigation was conducted by Gregory Smolar and Jeff Leasure of the Complex Financial Instruments Unit and Robert Gordon of the Atlanta Regional Office under the supervision of Natalie Brunson and Reid Muoio of the Complex Financial Instruments Unit. The litigation is being conducted by Mr. Gordon, Mr. Smolar, and H.B. Roback of the Atlanta Regional Office. The SEC acknowledges the assistance and cooperation of the U.S. Attorney's Office for the Southern District of New York and the FBI in this matter.

Press Release | SEC Charges Dallas Company and its Founders With Defrauding Investors in Unregistered Offering and Operating Unregistered Digital Asset Exchange

3-4 minutes - Source: SEC

Washington D.C., Aug. 29, 2019 —
The Securities and Exchange Commission today announced settled charges with Bitqyck Inc. and its founders, who allegedly defrauded investors in securities offerings of two digital assets, Bitqy and BitqyM, and operated an unregistered exchange to permit trading in one of them, a digital token called Bitqy. 
According to the SEC’s complaint, Bitqyck and founders Bruce Bise and Sam Mendez­ created and sold Bitqy and BitqyM in unregistered securities offerings to more than 13,000 investors, raising more than $13 million. Investors allegedly received $4.5 million for referring new investors to Bitqyck but collectively lost more than two-thirds of their investment in the Dallas-based company.
The SEC’s complaint alleges that Bise and Mendez misrepresented QyckDeals, a daily deals platform using Bitqy, as a global online marketplace, and falsely claimed that each Bitqy token provided fractional shares of Bitqyck stock through a “smart contract.” The complaint alleges that the defendants falsely told investors that BitqyM tokens provided an interest in a Bitqyck cryptocurrency mining facility powered by below-market rate electricity. In reality, Bitqyck did not have access to discounted electricity and didn’t own any mining facility.  Bitqyck, aided and abetted by its founders, also is alleged to have illegally operated TradeBQ, an unregistered national security exchange offering trading in a single security, Bitqy. 
“Because digital investment assets represent a new and exciting technology, they can be very alluring, especially if investors believe they are getting in on the ground floor and will own part of the operations,” said David Peavler, Director of the SEC’s Fort Worth Regional Office. “We allege that the defendants took advantage of investors’ appetite for these investments and fraudulently raised millions of dollars by lying about their business.” 
The SEC’s complaint, filed in U.S. District Court for the Northern District of Texas, seeks permanent injunctions, return of allegedly ill-gotten gains with interest, and civil money penalties. Without admitting or denying the allegations, Bitqyck, Bise and Mendez consented to final judgments agreeing to all the injunctive relief.  Bitqyck also consented to an order requiring that it pay disgorgement, prejudgment interest and a civil penalty of $8,375,617.  Bise and Mendez consented to the entry of an order that they each pay disgorgement, prejudgment interest and a civil penalty of $890,254 and $850,022, respectively.  
The SEC’s investigation was conducted by David Hirsch, Melvin Warren, and Carol Hahn with litigation support from Keefe Bernstein, and supervised by Scott F. Mascianica and Eric R. Werner of the SEC’s Fort Worth Regional Office.  The SEC appreciates the assistance of the Texas State Securities Board, and the State of Hawaii Office of the Securities Commissioner.

Politics in Asia Pacific: Prominent activists Joshua Wong and Agnes Chow are arrested in Hong Kong

By Shibani Mahtani

Democracy activist Joshua Wong addresses crowds outside Hong Kong’s legislature during a demonstration against the extradition bill on June 17. (Thomas Peter/Reuters)
HONG KONG — Joshua Wong and Agnes Chow, who rose to prominence as the student leaders of pro-democracy street protests five years ago, were arrested Friday, their organization said in a statement, in a widening crackdown on activists and demonstrators in Hong Kong.
The group, Demosistō, did not immediately have details on their charges. A spokeswoman for the Hong Kong Police Force could not immediately confirm the arrests and the circumstances under which the pair were detained.
Wong was seized at roughly 7:30 a.m. Friday “when he was suddenly pushed into a private car on the street,” his organization said. Chow was arrested a short time later at her home, Demosistō added. Both are being held in the Hong Kong police headquarters in the Wan Chai district. 
The group has sought help from its lawyers.
The arrests come at a tense time in the semiautonomous Chinese territory, where an official proposal to allow extraditions to mainland China triggered months of protests that have increasingly descended into street battles with police.
As the demonstrations have turned violent, and grown to encompass a broader push for democracy in Hong Kong, authorities have stepped up arrests and the use of force. China’s government has issued increasingly strident threats in an effort to quell the protests.
Wong rose to prominence as the face of the 2014 Umbrella Movement, a 79-day street occupation aimed at securing universal suffrage for Hong Kong. He was charged and sentenced several times in connection with those protests, and served three stints in jail. Most recently, on May 16, Wong was sentenced to two months in prison after losing an appeal against a prison term for contempt of court. He was released in June.
Chow was arrested along with Wong and Nathan Law, another party leader, in 2017 ahead of Chinese leader Xi Jinping’s visit to the city, but was never charged or imprisoned. 

Agnes Chow, right, and Joshua Wong outside government offices in Hong Kong in June. The pair were arrested Friday in a widening crackdown on the pro-democracy movement. (Kin Cheung/AP)
This time, the protest movement in Hong Kong has taken a leaderless form — in part to avoid arrests and detentions that plagued leaders like Wong in the past, and also to empower a broader base of participants. Demosistō members, unlike in 2014, have not delivered speeches at rallies, nor have they been prominent faces on the front lines, but have used the group’s social media presence to help the movement gain awareness globally. 
“We’ll use our influence and connections with the international community to tell the world about what’s happening,” Chow said in an earlier interview with The Washington Post. “It’s still very important.”
Wong and Chow were due to travel to Washington next month, where they were to meet with lawmakers and participate in a Congressional Executive Committee on China hearing on the Hong Kong Human 

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