Sep 30, 2019

Politics: House Democrats subpoena Trump lawyer Rudy Giuliani in impeachment probe

Jacob Pramuk

(FILES) In this file photo Lawyer of the US president Rudy Giuliani looks on before the US president announces his Supreme Court nominee in the East Room of the White House on July 9, 2018 in Washington, DC.
Saul Loeb | AFP | Getty Images
The House Intelligence Committee has subpoenaed President Donald Trump’s personal attorney Rudy Giuliani for documents as part of its impeachment inquiry into the president.
In a letter to Giuliani dated Monday, the heads of three House committees asked for information related to the president and his lawyer’s efforts to get Ukraine’s government to investigate the Biden family. Three Democratic-led panels — the Intelligence, Oversight and Foreign Affairs committees — are demanding that Giuliani produce all text messages, phone records and other communications related to the “scheme” he is accused of perpetrating “in order to determine the full extent of this effort by the President and his Administration to press Ukraine to interfere in our 2020 presidential election.”
They wrote that House Democrats’ probe “includes an investigation of credible allegations that [Giuliani] acted as an agent of the President in a scheme to advance his personal political interests by abusing the power of the Office of the President.” They asked him to produce documents by Oct. 15.
Spokespeople for Giuliani and the White House did not immediately respond to CNBC’s requests to comment. Giuliani has suggested he may not comply with committee requests. On Sunday, he told ABC that he “wouldn’t cooperate” with House Intelligence Committee Chairman Adam Schiff, D-Calif., as long as he leads the panel.
The subpoena adds to the heightened scrutiny of both administration officials and outside Trump confidantes after the House decided last week to move forward with impeachment proceedings. On Friday, the Intelligence Committee subpoenaed Secretary of State Mike Pompeo for documents. The heads of the Appropriations and Budget committees also asked Friday for records related to the Office of Management and Budget’s involvement in the Trump administration deciding to hold back nearly $400 million in military aid to Ukraine.
Lawmakers are probing whether the president abused the power of his office to influence the 2020 election by pushing Ukraine to investigate Hunter Biden, the son of former Vice President Joe Biden. The elder Biden is one of Trump’s chief rivals for the presidency next year. The intelligence community whistleblower complaint at the center of the impeachment inquiry also alleges a White House effort to cover up records of a July 25 phone call during which Trump asked Ukrainian President Volodymyr Zelensky to “look into” the Biden family.
A summary of the conversation between the leaders, the whistleblower complaint released by the administration last week and Giuliani’s own comments suggest the president’s attorney played a major role in efforts to get Ukraine to investigate the Bidens. When discussing the Biden family with Zelensky, Trump mentioned that he would like Giuliani to call the Ukrainian president.
The whistleblower’s complaint, meanwhile, called Giuliani a “central figure” in the effort. The person writes that Giuliani met with one of Zelensky’s advisors in Madrid in August in what was described as a “direct follow-up” to the call between Trump and his Ukrainian counterpart.
Giuliani has talked personally about his involvement in efforts to influence the Ukrainian government. When asked by CNN earlier this month if he asked Ukraine to look into Joe Biden, he responded, “Of course I did.”
He also shared a text message from the administration’s former special envoy to Ukraine, Kurt Volker. After having breakfast with Giuliani, Volker said he was connecting the president’s attorney with Andrey Yermak, whom he described as being “very close to President Zelensky.” Volker resigned on Friday.

EU - FX | Currencies: Euro drops to 28 month low on growth concerns

3-4 minutes - Source: CNBC

GP: Paying cash $100 bills 190930
A customer pays with cash at a Best Buy store in Texas, United States, on November 26, 2010.
Aaron M. Sprecher | Bloomberg | Getty Images
The euro fell to its lowest in two-and-a-half years against the U.S. dollar on Monday as concerns about euro zone growth weighed on the single currency, while the greenback benefited from seasonal demand and uncertainty arising from the U.S.-China trade war. German annual inflation unexpectedly slowed for the third consecutive month in September, data showed on Monday.
The German CPI print this morning was a little bit on the disappointing side, said Bipan Rai, North American head of FX strategy at CIBC Capital Markets in Toronto.
Germany’s leading economic institutes have also revised down their growth forecast for Europe’s biggest economy for this year, two sources with knowledge of their decision told Reuters on Monday.
The revisions, which feed into the government’s own output projections, reflect growing concerns that a slowdown in Germany driven by a recession in the export-dependent manufacturing sector could hamper the broader euro zone economy. Demand for dollars heading into the last quarter of the year is also boosting the greenback.
In Q4 we tend to see strong seasonal demand for the U.S. dollar, and given the fact that euro/dollar is the most frequently traded pair in the foreign exchange market, that certainly means that we could be seeing some further downside in the euro going forward, Rai said.
The euro was last down 0.37% at $1.0898, after earlier falling to $1.0883, the lowest since May 2017. Investors are also focused on the U.S.-China trade war, which is being blamed for slowing global growth.
President Donald Trump’s administration is considering delisting Chinese companies from U.S. stock exchanges, three sources briefed on the matter said on Friday, in what would be a radical escalation of U.S.-China trade tensions. China warned on Monday of instability in international markets from any “decoupling” of China and the United States.
Washington and China are preparing for another round of trade talks scheduled for Oct. 10 and 11. Uncertainty around the outcome of an impeachment inquiry into Trump may also provide safe-haven demand for the greenback.
Trump on Monday escalated his attacks against the lawmaker leading the impeachment inquiry against him, suggesting that Representative Adam Schiff be arrested for “treason.”
New Zealand’s dollar dropped as low as $0.6247, its weakest since 2015, after a survey showed business sentiment weakening to an 11-1/2 year low in September, strengthening the case for a reduction in interest rates.

Bonds | Treasury Yields Report: Treasury yields little changed amid renewed US-China trade tensions

Thomas Franck

U.S. government debt held steady on Monday as investors monitored U.S. trade tensions with China and an impeachment inquiry into President Donald Trump.
The yield on the benchmark 10-year Treasury note, which moves inversely to price, was just higher at 1.673%. The yield on the 30-year Treasury bond was up at 2.11%.
Traders are monitoring news that the White House is looking at limiting U.S. investment in China – a move that could hurt their trade negotiations.
Multiple news outlets, including CNBC, on Friday reported that the White House is in the early stages of weighing . Such measures could include a block of all American investment in the country, a person familiar with the talks told CNBC.
White House trade advisor Peter Navarro told CNBC on Monday that such reports were “fake news” and scolded Bloomberg News, which first reported that the investment limitations were under consideration.
“The last time we talked, I proposed ‘Navarro’s Rule,’ which is that any story that comes from anonymous sources is likely to be fake news designed to part a fool from his money,” Navarro told CNBC. “And that story, which appeared in Bloomberg, I’ve read it far more carefully than it was written.”
“Over half of it was highly inaccurate or simply flat-out false,” he said.
In the meantime, the U.S. Congress is trying to get access to President Trump’s calls with Russian President Vladimir Putin and other world leaders. Lawmakers have said they are concerned that the president may have jeopardized national security during those calls.

US 3-MOU.S. 3 Month Treasury1.830.0330.00
US 1-YRU.S. 1 Year Treasury1.7650.0050.00
US 2-YRU.S. 2 Year Treasury1.6260.0020.00
US 5-YRU.S. 5 Year Treasury1.5490.000.00
US 10-YRU.S. 10 Year Treasury1.6730.000.00
US 30-YRU.S. 30 Year Treasury2.116-0.0

Enforcement Action Release | SEC filed charges in Federal Court in Denver against and individual and six companies: Mark Ray, et al. (Release No. LR-24627; Sep. 30, 2019)

4-5 minutes - Source: SEC

Litigation Release No. 24627 / September 30, 2019

Securities and Exchange Commission v. Mark Ray, et al., No. 1:19-cv-2789 (D. Colo.), filed September 30, 2019.

The Securities and Exchange Commission today filed charges in federal court in Denver against an individual and six companies he controls for perpetrating a multimillion-dollar fraudulent "cattle-flipping" investment scheme. The SEC also charged two individuals for aiding and abetting their scheme.
The Commission's complaint alleges that Mark Ray, a Denver resident, was the mastermind of the scheme, which promised investors extremely high rates of return on investment contracts and promissory notes. These investments were for the purported purchase and immediate resale of large numbers of cattle. The complaint alleges that Ray similarly solicited investments in his state-licensed marijuana business by promising large returns. In fact, the vast majority of investor money allegedly was used to pay returns to earlier investors. According to the complaint, at the height of the scheme, Ray moved or directed the movement of more than $140 million per month through bank accounts under his control. The complaint alleges that Ray controlled various corporate entities, including Custom Consulting and Product Services, LLC; MR Cattle Production Services, LLC; Universal Herbs, LLC; DBC Limited, LLC; RM Farm and Livestock, LLC; and Sunshine Enterprises and used them to solicit investments and/or to receive money from or send money to investors. The complaint further alleges that Reva Stachniw of Galesburg, Illinois, and Ron Throgmartin of Buford, Georgia both assisted Ray's scheme. According to the complaint, Stachniw opened bank accounts nominally in her control but permitted Ray to use them in furtherance of the scheme, ignoring red flags that Ray was not running legitimate businesses. Throgmartin assisted Ray by drafting invoices and emails reflecting fictitious cattle trades and sending them to investors.
The complaint charges Ray and the entities under his control with violating the registration provisions of Section 5 of the Securities Act of 1933 (Securities Act) and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. The complaint charges Stachniw and Throgmartin with aiding and abetting defendants' violations of the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
Ray, Custom Consulting, MR Cattle, Universal Herbs, and DBC Limited have consented to bifurcated judgments that enjoin them from future violations of the securities laws, freeze certain of their assets, and permit the Commission to seek disgorgement and civil penalties by motion before the court. Throgmartin also has consented to a bifurcated judgment that enjoins him from future violations of the securities laws and permits the Commission to seek disgorgement and civil penalties by motion before the court.
The SEC's investigation was conducted by Joshua Mayes and Douglas Dykhuizen, supervised by Justin Jeffries and Graham Loomis, of the SEC's Atlanta Regional Office. The SEC's litigation is being led by Joshua A. Mayes and Graham Loomis.  The SEC appreciates the cooperation and assistance of the Colorado Division of Securities and the Colorado Attorney General. The SEC also appreciates the cooperation and assistance of the Fraud Section of the United States Department of Justice, the United States Attorney for the Central District of Illinois, the Federal Bureau of Investigation, and the Federal Deposit Insurance Corporation.

Energy | Oil | Oil Price Report: Oil down on trade war jitters and Chinese data

3-4 minutes - Source: CNBC

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The oil tanker ‘Devon’ prepares to transfer crude oil from Kharg Island oil terminal to India in the Persian Gulf, Iran, on March 23, 2018.
Ali Mohammadi | Bloomberg | Getty Images
Oil slipped on Monday as China’s economic outlook remained weak even as manufacturing data improved, with the continuing trade war with the United States weighing on demand growth for the world’s largest crude importer.
Brent crude futures were down $1.08, or 1.7%, at $60.83 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell by $1.13, or 2%, to $54.78.
China’s official Purchasing Managers’ Index (PMI) rose to 49.8 in September, slightly better than expected and advancing from 49.5 in August.
However, it remained below the 50-point mark that separates expansion from contraction on a monthly basis, data from the National Bureau of Statistics showed.
China warned on Monday of instability in international markets from any “decoupling” of China and the United States, after sources said that U.S. President Donald Trump’s administration was considering delisting Chinese companies from U.S. stock exchanges.
Meanwhile, top oil exporter Saudi Arabia has restored capacity to 11.3 million barrels per day after an attack on its processing facilities this month, sources told Reuters last week, though Saudi Aramco has yet to confirm it’s operations have been restored fully.
While Saudi Arabia is maintaining exports by using crude from inventories and spare production capacity, it remains unclear how much of its output has actually been restored.
Saudi Arabia’s Crown Prince Mohammed bin Salman, often referred to as MBS, warned in an interview broadcast on Sunday that oil prices could spike to “unimaginably high numbers” if the world does not come together to deter Iran, but said he would prefer a political solution to a military one.
“The remarks by MBS help to alleviate immediate concerns around escalations in the Middle East, leaving the market to revert its focus to the economy,” BNP Paribas global oil strategist Harry Tchilinguirian told the Reuters Global Oil Forum, noting the risk posed by the U.S.-China trade dispute.
Money managers cut their net long U.S. crude futures and options positions in the week to Sept. 24, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
“Clearly, speculators have taken comfort from Saudi comments and the speed at which they plan to bring supply back to the market,” ING bank said in a note.
“However, we still believe that the market is underpricing the geopolitical risk in the region.”
Oil prices are likely to remain steady this year, a Reuters survey showed on Monday, with supply shocks such as the attack on Saudi Arabia countering flagging demand.
Analysts forecast that Brent crude would average $65.19 a barrel in 2019 and WTI $57.96.

Futures & Commodities | Gold | Gold Price Report: Platinum, gold slide as dollar soars; palladium eases off record

3-4 minutes - Source: CNBC

GP: Gold bar in hand 171122
A worker holds a gold bullion on January 13, 2015 at Istanbul Gold Refinery in Istanbul, Turkey.
Ozan Kose | AFP | Getty Images
Platinum plunged more than 5% and gold shed 2% on Monday, leading a sharp decline across precious metals driven by a soaring dollar, with deficit-hit palladium too giving up some gains from a record rally that saw it breach $1,700.
Silver slid more than 3% to its lowest in more than a month.
Spot palladium eased 0.8% to $1,668.33 an ounce, having earlier touched a record high of $1,700.71. The metal has risen more than 9% this month.
“There is strong fabrication demand but a good part of this is speculative demand from investors who expect prices to rise and also people who are getting out of gold, silver and platinum because those prices are falling, some of them are shifting into palladium,” said Jeffrey Christian, managing partner of CPM Group.
“There’s a lot of concern that there isn’t a lot of palladium around; a big part of that is people who own the metal don’t want to sell at current prices. They want to see how high the price goes before they keep their profits.”
The price of palladium, used mainly in emissions-reducing catalysts for vehicles, has risen about 33% this year and nearly 9% this quarter, despite a weakening auto sector, due to tight supply.
Meanwhile, gold shed 1.8% to $1,469.61 after the dollar hit multi-year highs, making the dollar-denominated metal more expensive for holders of other currencies. Earlier, prices fell about 2% to their lowest since Aug. 6 at $1,465.90, with bullion also marking its first monthly decline in five.
For the quarter, however, bullion has risen more than 4% so far.
“Gold and silver ... continue to decline on a slightly firmer dollar and a relatively uneventful geopolitical landscape,” INTL FCStone analyst Edward Meir said in a note.
Also weighing on gold, stocks firmed after Washington’s dismissal of a report from Friday, which had said the U.S. administration was considering delisting Chinese companies from U.S. stock exchanges.
Investors also kept a close eye on the U.S. Federal Reserve’s monetary policy.
The central bank cut interest rates earlier in September for the second time this year.
“The Fed said they’re going to be very cautious about lowering rates since it’s not clear that we really need to, which was taken as a confirmation that there’s a fair bit of potential growth before getting concerned about recession. So people backed away from some of the fears that drove them into gold on a short-term basis.” CPM Group’s Christian said.
Elsewhere, platinum dropped 4.4% at $889.29, having earlier slid about 5% to touch its lowest since Aug. 28 at $876. Silver shed about 3% to $17.03 after hitting a more than one-month low of $16.92.
However, both metals are up about 6% and 11.5% for the quarter respectively.

Market Insider | Biggest Moves Premarket: Stocks making the biggest moves in the premarket: Apple, Bed Bath & Beyond, Blackstone & more

Fred Imbert

Check out the companies making headlines before the bell Monday:

Apple — An analyst at J.P. Morgan raised his price target on Apple to $265 per share from $243, implying a 21% gain from Friday’s close of $218.82. The analyst anticipates stronger iPhone sales and expects “investor sentiment on AAPL shares to improve materially given the firm’s ability to drive upward revision to volume expectations.”
Bed Bath & Beyond — Bed Bath & Beyond shares climbed more than 4% after an analyst at Wedbush upgraded the retailer to “outperform” from “neutral.” The analyst says he sees a “good chance of stabilization” in the company’s earnings over the next two years.
AB InBev — The beer giant’s Asia unit rose in its Hong Kong debut overnight, gaining more than 4%. Budweiser APAC CEO Jan Craps said: “We are focused on growth, growth is what we set out to do ... Asia, of course, is the largest beer market in the world.”
Rio Tinto — The Wall Street Journal reported on Saturday the mining giant will scrap sales plans for its iron-ore unit in Canada. The report, which cited people familiar with the matter, said Rio Tinto was not able to find an agreeable price with prospective buyers.
Sempra Energy — Sempra Energy agreed to sell its assets in Peru for $3.59 billion to China Yangtze Power International. The sale is expected to close in the first quarter of 2020.
Bristol-Myers Squibb — The company said about 40% of patients who received opdivo and yervoy as an initial treatment to lung cancer were alive after two years, outperforming patients who received chemotherapy as a first-line defense.
Blackstone — The private-equity giant announced its Real Estate Partners IX affiliate will acquire Colony Industrial from Colony Capital for $5.9 billion.

Market News: What to Expect in the Markets This Week

By Caleb Silver

What to Expect This Week:

The third quarter of 2019 comes to a close on Monday (where did the year go?).
Earnings season will kick off in a couple of weeks, except for a few companies that report off-cycle, such as Pepsi (PEP), Constellation Brands (STZ), and Bed Bath and Beyond (BBY), which all report next week. They all have their fingers on the pulse of the global consumer, so their forecasts will be important to listen to.
The theme of the second quarter earnings was the impact of the trade war and global uncertainty balanced by the strength of the U.S. consumer. We'll see if that narrative holds up, and more importantly, if companies are taking down forecasts going into the final quarter of the year.
Late Sunday, a reading of private manufacturing in China came in better than expected. The Caixin/Markit Purchasing Managers Index posted its best reading in 19 months. This Tuesday is the Republic of China's 70th anniversary and the stage will be set for President Xi to proclaim China's rise since he became president, and present his future vision. Note that the U.S. and Chinese trade representatives are planning to meet on Oct. 10.
We'll get U.S. manufacturing reports for September on Tuesday. That has also been trending lower until last month, when a rise in new orders and output growth boosted the U.S. Purchasing Managers Index off of 10-year lows. Export growth, however continued to weaken, which has been the pervasive theme since late 2017.

U.K. GDP and Brexit

We'll get the final second quarter GDP results for the United Kingdom on Monday and the forecast is for a 0.5% drop. That would be the first negative quarter of growth for the U.K. since 2009. But, let's be honest... all anyone cares about is if, how, and when Brexit will be resolved. Now that Parliament is back in session after a high court judge ruled that PM Boris Johnson's attempt to prorogue it was unlawful, the clock is ticking towards the Oct. 31 Brexit deadline.
 The potential outcomes are:
  • The UK asks for and is granted a delay by the EU, pushing the Oct. 31 deadline out and delaying Brexit
  • The U.K. asks for and is refused a delay, or doesn't ask for a delay, and the U.K. has to Hard Brexit out of the EU on Oct. 31
  • Members of the U.K. Parliament and PM Johnson miraculously agree on a plan that the EU blesses, and the U.K. exits the EU with a deal on Oct. 31
  • None of the above, and Parliament holds a "no confidence" vote on PM Johnson, and everything is thrown up in the air
  • Greenland buys the U.K. (I kid... it's Friday)

U.S. Jobs Report (Friday)

Friday brings the September nonfarm payrolls report. The U.S. jobs market is tight. Unemployment is low and we've seen some real wage increases that have helped boost consumer confidence. There are signs, however, that both are starting to show weakness.
 As mentioned earlier, consumer confidence in the U.S. weakened in the past month—the second in a row. It's still relatively strong, but the trade war and other political uncertainties are starting to wear down the consumer.

Consumer Spending

1 minute - Source: BEA

August 2019: 0.1 percent
July 2019: 0.5 percent
June 2019: 0.3 percent
May 2019: 0.4 percent
Consumer spending, or personal consumption expenditures (PCE), is the value of the goods and services purchased by, or on the behalf of, U.S. residents. At the national level, BEA publishes annual, quarterly, and monthly estimates of consumer spending.
Release Information
  • Current Release: September 27, 2019
  • Next Release: October 31, 2019

US Politics: U.S. House impeachment inquiry to intensify; Trump remains defiant

David Morgan

WASHINGTON (Reuters) - The House of Representatives impeachment inquiry into President Donald Trump over his request that a foreign power investigate a domestic political rival is set to intensify this week with testimony due from witnesses concerning allegations made by a whistleblower within the U.S. intelligence community.
FILE PHOTO: U.S. President Donald Trump spaeks to reporters after arriving aboard Air Force One at Joint Base Andrews, Maryland, U.S. September 26, 2019. REUTERS/Jonathan Ernst/File Photo
The whistleblower’s complaint cited a July 25 telephone call in which Trump asked Ukrainian President Volodymyr Zelenskiy to investigate Joe Biden, one of the leading Democratic candidates seeking to challenge him in 2020, and his son Hunter, who sat on the board of a Ukrainian gas company.
Democrats have accused Trump of pressuring a vulnerable U.S. ally to get dirt on a political rival for personal political gain. Trump’s July 25 phone call came after he froze nearly $400 million in aid intended to help Ukraine deal with an insurgency by Russian-backed separatists in the eastern part of the country. The aid was later provided.
The House Intelligence Committee is leading the impeachment inquiry. The inquiry in the Democratic-led House could lead to approval of articles of impeachment against the Republican president and a subsequent trial in the Republican-led Senate on whether to remove Trump from office.
Intelligence Committee Chairman Adam Schiff said on Sunday he expects the whistleblower to appear before the panel very soon.
While Congress is on a two-week recess, members of the committee will return to the U.S. Capitol this week to carry out an investigation that is likely to produce new subpoenas for documents and other material.
The committee is scheduled to hold a closed-door hearing on Friday with the intelligence community’s inspector general, Michael Atkinson, who concluded that the whistleblower complaint was of urgent concern and appeared credible.
House investigators are set to take the first witness testimony from two people mentioned in the whistleblower’s complaint.
On Wednesday, three House committees - Intelligence, Foreign Affairs and Oversight - are due to get a deposition from former U.S. ambassador to Ukraine Marie Yovanovitch, who Trump labeled “bad news” during his call with Zelenskiy.
On Thursday, the committees are set to get a deposition from Trump’s former special representative for Ukraine, Kurt Volker, who resigned last week after the whistleblower complaint named him as one of two U.S. diplomats who followed up with Ukrainian officials a day after Trump’s call to Zelenskiy.
The whistleblower has not been publicly identified. Trump, in a series of Twitter posts on Sunday evening, said he wanted to “meet” the whistleblower, who he called “my accuser,” as well as “the person who illegally gave this information” to the whistleblower.
“Was this person SPYING on the U.S. President? Big Consequences!” Trump wrote.
Some House Democrats said articles of impeachment against Trump could move to the House floor as soon as next month.
“In my mind, it’s several weeks,” House Judiciary Committee member David Cicilline told reporters last week. “He has already admitted that he contacted a foreign leader and discussed with him ginning up a fake story about one of his political opponents.”
Last Friday, the House Foreign Affairs Committee issued a subpoena to Secretary of State Mike Pompeo for documents related to the Ukraine scandal. House Democrats also have sought material from the White House and Justice Department.
Schiff said any effort by Trump to stonewall the probe could be used to impeach him for obstructing Congress.
Trump has withstood repeated scandals since taking office in 2017. House Democrats considered, but never moved ahead with, pursuing articles of impeachment over Trump’s actions relating to Russian interference in the 2016 U.S. election aimed at boosting his candidacy.
The United States has been giving military aid to Ukraine since Russia’s annexation of Crimea in 2014.
Reporting by David Morgan; Editing by Will Dunham

U.S.Market | Futures Indicator: US futures point to a higher open on Wall Street

Elliot Smith

2 minutes - Source: CNBC

U.S. stock index futures were trading higher on Monday morning.
At around 4:00 a.m. ET, Dow futures climbed 88 points, indicating a positive open of almost 90 points. Futures on the S&P 500 and Nasdaq were also slightly higher.
Wall Street ended lower last week on reports that the White House is considering limiting U.S. investment into China, including a possible delisting of Chinese companies from U.S. stock exchanges, in a further aggravation of the ongoing trade dispute between the world’s two largest economies.
Chinese state media called the potential restrictions “the latest attempt at decoupling” and warned of “significant repercussions for the Chinese and U.S. economies, as well as their companies, in the future.”
U.S. and China trade delegations are due to meet on October 10, CNBC has reported, citing three sources.
U.S. House Intelligence Committee Chairman Adam Schiff said on Sunday that congress is determined to gain access to President Donald Trump’s calls with Russian President Vladimir Putin and other world leaders, citing concerns that the president may have compromised national security.
On the data front, Chicago PMI figures for September are due at 8:45 a.m. ET and Dallas Fed manufacturing index data will be published at 9:30 a.m. ET.
There are no major corporate earnings scheduled for Monday.

Sep 29, 2019

World Politics: Australia's relationship with China in a 'terrible' state after Morrison's US visit, Labor says

Sarah Martin

Labor’s shadow defence minister, Richard Marles, says Australia’s relationship with China is in a “terrible” state following Scott Morrison’s visit to the United States.
Speaking fresh from a visit to Beijing, Marles said that Morrison’s “megaphone diplomacy” alongside Donald Trump about China’s status as a developing country had inflamed tensions.
“What we saw this week was the prime minister in the United States in the context of there being trade tensions between the US and China, and from there, taking pot shots against our largest trading partner,” Marles said.
“The context in which he has engaged in this megaphone diplomacy is absolutely the issue, and it’s not the way in which this issue should be dealt with in a respectful way.”
Following calls from Morrison and Trump for China’s status to be upgraded from a developing country, as defined under World Trade Organisation rules, Marles said it was a “matter of fact” that China was still rightly defined as developing.
He pointed to average income figures for China as being less than $10,000 – below the World Bank threshold of $12,000 for a “developed” country, and compared to Australia’s average income of $47,000, according to the same index.
“China is a very large economy and it will become the largest economy in the world and it is still developing, that’s the matter of fact,” Marles said.
“But the point here is that exactly where China fits in terms of its place within the WTO, indeed its place within the world, ought to be a matter of negotiation with countries in the world, but certainly from an Australian point of view, that’s something that we should be negotiating and working through with China in a respectful way.”
After a series of meetings with officials in Beijing, Marles said that while he did not want to comment directly on how China had reacted to Morrison’s remarks in the US, he had heard clearly that the relationship was not in good shape.
“What I can say is that the state of the relationship as it exists between Australia and China right now is terrible,” Marles said.
“There is a sense in which we are falling down their ladder of relevance, that China is not seeing us in the serious way in which it has seen us in the past.”
He accused the government of mismanaging the “complex” relationship, which would have ramifications for Australian jobs dependent on exports.
He said an opinion piece written by the Liberal MP Andrew Hastie had been raised with him as an example of Australia’s disregard for China.
“That did resonate in Beijing,” Marles said. “People are unhappy about it. There is no moral equivalence between China and Nazi Germany. It’s a ridiculous thing to say and it’s damaging to the relationship.
“If you ask the question – has the relationship been managed well from an Australian point of view over the last six months – the answer is that it has been managed terribly,” Marles said.
“There is complete ineptness on the part of this government, and that is a matter of concern for everybody in this country who is engaged in the export to China, and everybody in this country who benefits from that – and we’re talking about millions of Australians in that category.”
He said the government needed to do more to address the trust deficit between the two countries, saying joint defence exercises was one way this was occurring.
“Right now, we have a massive trust deficit in terms of our relationship with China, and we need to build trust,” he said.
“If we’re engaging, then we need to be having the best relationship with China that we possibly can have. And right now, this government is not delivering it. In fact, they’re inept.”
But he also said Australia needed to be able to raise issues of concern, such as human rights issues, within that relationship.

Politics: Democrats count on Schiff to deliver focused impeachment inquiry of Trump

Rachael Bade

The confrontation served as a reminder of how the Democrats, through years of speeches, lawsuits and subpoenas — even after taking the House majority this year — have thus far failed to figure out how to hold a norm-busting president and his lieutenants in check.
It also laid the groundwork for a critical shift in the Democrats’ strategy that has emerged in recent days in the wake of the revelation about Trump’s interactions with Ukraine’s president and Trump’s alleged abuse of power in asking a foreign government to provide dirt on a political rival.
The confluence of two otherwise coincidental events — the embarrassing Lewandowski hearing followed in quick succession by the explosion of the Ukraine story — handed Pelosi an opening to sideline Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) in favor of the more widely trusted head of the Intelligence Committee, Rep. Adam B. Schiff (Calif.), as Democrats launch the formal impeachment inquiry. And Pelosi has made clear that the investigation will focus narrowly on the Ukraine matter, a scandal she says can be easily understood by the public.
Schiff, in concert with other chairmen, moved swiftly Friday to issue subpoenas for documents from Secretary of State Mike Pompeo and set up depositions next week with State Department officials who would have knowledge of Trump’s engagements with Ukraine. One official, Kurt Volker, suddenly resigned Friday as Trump’s special envoy on Ukraine, the first casualty of the burgeoning scandal.
The panel also scheduled a closed briefing for Friday with the intelligence community’s inspector general, whose preliminary investigation of a whistleblower’s complaint about Trump’s call found it a matter of “urgent concern.”
“We have to flesh out all of the facts for the American people,” Schiff said in a letter to colleagues last week. “The seriousness of the matter and the danger to our country demands nothing less.”
Pelosi repeatedly has expressed sadness about embarking on the consequential step of impeaching a president, a politically divisive move that could boost Trump’s reelection bid and imperil her majority. Even if the House votes to impeach Trump, ousting the president is a long shot in the Republican-controlled Senate. Democrats owe House control to dozens of moderates who won in Republican districts last fall and, like Pelosi, dropped their resistance to an impeachment inquiry in the days after the Ukraine revelation. Of the 235 Democrats in the House, 224 back an impeachment inquiry — 86 rushing to support it over a five-day period, according to a Washington Post analysis.
Where House Democrats stand on impeaching Trump
“We must be somber, we must be prayerful, and we must pursue the facts further to make a decision as to, did this violate the Constitution of the United States, which I believe it did,” Pelosi said Saturday at the Texas Tribune Festival in Austin.
Facing a skeptical public, House Democrats are overwhelmingly backing Schiff — none more so than endangered incumbents who privately pushed Pelosi to at least temporarily muzzle the House Judiciary Committee, which traditionally takes the lead in impeachment. Those lawmakers, mostly moderates in GOP-leaning districts, argued that the panel, which is packed with some of the caucus’s most liberal members, had bungled its investigations and appeared too partisan and eager to oust Trump to carry their message to the broader public.
“I have an issue with people bringing a bucket of chicken into a hearing room,” said centrist Rep. Max Rose (D-N.Y.), who has not backed impeachment and has been frustrated with the Judiciary theatrics. He was referring to Rep. Steve Cohen (D-Tenn.), who used fried chicken to mock Attorney General William P. Barr for his refusal to testify at a hearing in May.
In a private meeting Thursday night, several moderates told Pelosi that Schiff needed to be the face of their impeachment inquiry and said they didn’t want other, more liberal voices to continue making the case on television.
Rep. Darren Soto (D-Fla.), who represents an Orlando-area district, had pressed House leaders to appoint a special committee to probe the Ukraine allegations. Soto called the Judiciary hearing with Lewandowski “rudderless.”
After watching Schiff and colleagues question acting director of national intelligence Joseph Maguire on Thursday, Soto said he was satisfied with the selection of the Intelligence panel.
“This investigation has found the proper home to be conducted seriously,” he said.
Most Democrats, including many Judiciary members, see the Intelligence panel as the more appropriate venue for investigating Trump’s July 25 call to Ukrainian President Volodymyr Zelensky in which he asked the foreign leader to help dig up dirt on former vice president Joe Biden, a leading 2020 Democratic presidential contender, and his son Hunter.
“We need to be aware of the gravity of this moment,” said Rep. Josh Gottheimer (D-N.J.), a centrist who worked in the Clinton White House during the last impeachment proceedings and saw firsthand the political blowback against the GOP.
Nadler has accepted the change in leadership, according to lawmakers and aides. In a show of unity, the two men appeared side by side at a Congressional Progressive Caucus meeting Thursday, promising a swift and thorough investigation. Through a spokesman, Nadler declined to comment.
With a seemingly endless string of TV appearances, Schiff earned his Democratic colleagues’ trust as a public messenger early in the Trump administration, leading the party’s response to allegations of Russian interference in the 2016 election and possible obstruction of justice by the president.
Schiff, 59, was a prosecutor in the U.S. attorney’s office in Los Angeles from 1987 to 1993, served in the California Senate and defeated a Republican who had pushed for President Bill Clinton’s impeachment to secure a House seat in 2000.
As former special counsel Robert S. Mueller III’s investigation into Russian election interference unfolded, Republicans leveled withering attacks on Schiff for pushing a collusion narrative that Mueller’s report, they said, ultimately did not support. But inside the secretive confines of the Intelligence Committee, he has won universal praise from Democrats for his tone and professionalism.
“There’s no better guy on the face of the planet to undertake this in an adultlike, intelligent, integrity-filled manner than Adam B. Schiff. Period, full stop,” said Rep. Denny Heck (D-Wash.), a committee member.
But perils abound, as Schiff learned Thursday during the Maguire hearing. While many Democrats praised the solemn nature of the proceedings, his decision to dramatize and embellish the transcript of Trump’s call with Ukraine’s president drew criticism from potentially persuadable Republicans on his panel, not to mention Trump loyalists.
Schiff defended his words as a “parody,” but Rep. Andy Biggs (R-Ariz.), chairman of the Trump-friendly House Freedom Caucus, introduced a motion to condemn and censure him Friday, shortly after Trump tweeted that Schiff “totally made up my conversation” and demanded his resignation.
Acting intelligence chief Maguire defends his handling of whistleblower complaint in testimony before Congress
The greater concern, however, was rebukes from Intelligence Committee Reps. Michael R. Turner (Ohio) and Elise Stefanik (N.Y.) — moderate Republicans who some Democrats say could eventually endorse investigative findings condemning Trump. “We should focus on the facts,” Stefanik said, calling Schiff’s words “disturbing and outrageous.”
So far, the GOP has remained unified behind Trump, but that support has shown some cracks. In the Senate last week, Mitt Romney (R-Utah) and Ben Sasse (R-Neb.) said it was inappropriate for Trump to ask Ukraine to investigate a political adversary. And moderate Sen. Susan Collins (R-Maine) declined to comment on the controversy because she might someday be a juror in a trial to remove Trump from office.
In Texas on Saturday, Rep. Cheri Bustos (D-Ill.), chairwoman of the Democratic Congressional Campaign Committee, was asked whether impeachment would galvanize Republican voters. She held up copies of the whistleblower complaint and the memo of the president’s call with Ukraine’s president.
“These are his words, for God’s sake, and you’ve got Republicans who are silent,” Bustos said at the Texas Tribune Festival.
Schiff’s preeminent role means Nadler and the Judiciary Committee have been at least temporarily relegated to the wings, with their investigative work largely put on hold as Nadler awaits direction on how to write articles of impeachment.
For months, Nadler was the face of the left’s push to impeach Trump — much to the chagrin of Pelosi and moderate Democrats who thought he was too aggressive. The Judiciary panel hoped to investigate a list of Trump controversies, from hush payments made to women alleging sexual encounters with Trump to obstructions laid out in Mueller’s report — charges that many moderate Democrats worried wouldn’t resonate with the public.
At the same time, the tensions between Pelosi and Nadler were starting to spill out into the open. The two had never seen eye-to-eye on the pace or the substance of an impeachment inquiry, with Nadler pushing a reluctant Pelosi privately to embrace Trump’s ousting, while the speaker maintained that the panel didn’t yet have the goods to sway the public.
Rep. Mary Gay Scanlon (D-Pa.), the Judiciary vice chair, credited Nadler for making the best of a difficult situation “given the unprecedented executive branch noncompliance with the Constitution.”
And, Judiciary members were quick to point out, they will get to add the final flourish of impeachment. Lawmakers and aides said there is a growing desire, for instance, to include an article condemning Trump’s obstruction of Congress to the bill of offenses to be prepared by the panel.
“When it’s time to score the touchdown,” said Rep. Cedric L. Richmond (D-La.), a Judiciary panel member, “they’ll give us the ball.”
Karoun Demirjian and Paul Kane in Washington and Dave Weigel in Austin contributed to this report.

IG Video: Week Ahead Video

Sep 28, 2019

Keiser Report Video: Keiser Report 1442

Gerald Celente Video: Markets Will Crash, Should Impeachment Tensions Sharply Spike

EU - FX | Currencies: Euro pinned at more than two-year lows; sterling drops

3 minutes - Source: CNBC

GP: Cash transaction at retail store 171123
A cashier, left, returns cash to a customer at a Vineyard Vines store in Illinois, the United States, on  November 23, 2017.
Daniel Acker | Bloomberg | Getty Images
The euro held at its lowest level in more than two years on Friday as quarter-end rebalancing flows boosted demand for the dollar, with investors unfazed by the latest political news out of the United States.
The euro fell 0.1% lower to $1.0904, its lowest level since May 2017. Against a basket of its rivals, the greenback pushed 0.1% higher to 99.27, its highest level in more than three weeks.
“Some corporate demand in the last few days seems to be boosting the dollar but our models show there should be net selling later in the day due to rebalancing flows,” said Manuel Oliveri, a currency strategist at Credit Agricole in London.
Sterling was the other big loser in early London trading after Bank of England policymaker Michael Saunders hinted at looser monetary policy if Brexit uncertainty remained prolonged against a backdrop of disappointing global growth.
The pound weakened 0.3% to a new two-week low of $1.2285 on Friday as his comments raised expectations that the next move from the central bank could be a rate cut.
Markets are also digesting the impeachment probe launched into U.S. President Donald Trump and the latest headlines from the trade dispute between the United States and China.
A whistleblower report released on Thursday said Trump not only abused his office in attempting to solicit Ukraine’s interference in the 2020 U.S. election, but the White House tried to “lock down” evidence about it.
China’s top diplomat said Beijing was willing to buy more U.S. products.
CNBC reported that trade war talks were on track and scheduled for Oct. 10-11 in Washington, citing people familiar with the arrangements.
Elsewhere, the dollar eased against the trade-sensitive Australian and New Zealand dollars, which gently rallied on hopes that next month’s U.S.-China trade talks will bring progress. Moves were slight, though and neither strayed far from two-week troughs against the greenback.
“A one word description of currency markets trading today: moribund,” said markets strategist Michael McCarthy of brokerage CMC Markets in Sydney. 

Bonds | Treasury Yields Report: Treasury yields rise as impeachment and trade remain in focus

Elliot Smith

U.S. government debt prices fell on Friday, sending yields higher, with investors monitoring an ongoing impeachment inquiry against President Donald Trump while looking ahead to a resumption of trade talks between the U.S. and China on October 10.

US 3-MOU.S. 3 Month Treasury1.805-0.0230.00
US 1-YRU.S. 1 Year Treasury1.771-0.010.00
US 2-YRU.S. 2 Year Treasury1.638-0.0160.00
US 5-YRU.S. 5 Year Treasury1.565-0.0080.00
US 10-YRU.S. 10 Year Treasury1.6870.0020.00
US 30-YRU.S. 30 Year Treasury2.1310.0030.00

At around 7:25 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was higher at 1.7026%. The yield on the 30-year Treasury bond was up at 2.1538%.
A whistleblower report released on Thursday alleged that President Trump not only abused his office in encouraging Ukrainian interference in the 2020 U.S. election, but that the White House tried to “lock down” evidence of his conduct.
The inquiry stemmed from revelations about a phone call in which the president pressured Ukrainian President Volodymyr Zelensky to investigate Democratic rival Joe Biden and his son, Hunter Biden.
Modest optimism over U.S.-China trade relations has been positively impacting yields as traders shift toward riskier assets.
On Thursday, China’s top diplomat said Beijing was willing to buy more U.S. products and indicated that impending trade talks could produce a positive result if both sides “take more enthusiastic measures” and dial down the rhetoric in the ongoing dispute.
Personal income and spending data for August is set to be published at 9:30 a.m. ET, along with PCE price index figures and durable goods orders.

Energy | Oil | Oil Price Report: Oil falls after Iran claims US offered to remove sanctions, Trump denies

Yun Li

PA: Rouhani Iran
Iranian President Hassan Rouhani makes a speech during a ceremony in Tehran, Iran on January 10, 2019.
Anadolu Agency | Anadolu Agency | Getty Images
Oil slid after Iranian President Hassan Rouhani claimed Friday that the U.S. offered to remove all sanctions on Iran in exchange for negotiations. President Donald Trump and the State Department later denied those claims, causing oil to rebound from the lows.
WTI crude futures were last down by 0.9% to $55.91 after falling as low as $54.79. Brent crude futures dropped 1.4% to $61.89.
“The German chancellor, the prime minister of England (Britain) and the president of France were in New York and all insisted that this meeting take place. And America says that it will lift the sanctions,” Rouhani said on his official website, according to Reuters. “It was up for debate what sanctions will be lifted and they (the United States) had said clearly that we will lift all sanctions.”
Trump later said he responded “of course, NO!” to Iran who he said wanted him to lift the sanctions in order to meet.
The State Department called the report “baseless,” adding the U.S. is committed to zero oil exports from the Iranian regime, Bloomberg News said.
Rouhani’s comment came after a series of drones attacked oil facilities in Saudi Arabia on Sept. 14, which had forced the kingdom to cut production in half. The U.S. and some European countries, as well as Saudi Arabia, have blamed the attack on Iran. Tehran has denied any role in the incident. The Trump administration also announced plans to deploy U.S. forces to the region.
The State Department didn’t immediately respond to CNBC’s request for comment.
“There’s been a big bearish risk from a thaw in the US Iran situation for some time and this will put a remarkable amount of oil back onto the market immediately if it were to occur,” said John Kilduff of Again Capital.
“It’s not just Iranian production and exports. Its’ millions of barrels in floating storage and millions of barrels sitting in China’s ports waiting to be processed by customs,” Kilduff said.
Trump last year withdrew the U.S. from a nuclear deal between Iran, the U.S. and five other countries that removed sanctions from the country in return for its commitment to end its nuclear.
The Islamic Republic, a target of U.S. sanctions for decades, was blamed by Washington for recent attacks on oil tankers in the Strait of Hormuz, which Tehran denies. Iran also shot down a U.S. military drone and announced plans to execute 17 suspected U.S. spies.
— CNBC’s Patti Domm contributed reporting.

Futures $ Commodities | Gold | Gold Price Report: Gold set for weekly loss as US data, dollar weigh

3-4 minutes - Source CNBC

GP: Gold Bars And Coins 181129
Canadian maple leafs sit on the faces of one ounce gold coins in London, the United Kingdom, on July 15, 2014.
Chris Ratcliffe | Bloomberg | Getty Images
Gold prices fell on Friday and was on track for its third weekly fall for the month, restrained as a slew of U.S. economic data beat expectations and the dollar held near multi-week highs against major currencies.
Spot gold fell 0.4% to $1,499.22 per ounce at 0744 GMT, declining 1% for the week after a near 2% gain last week.
U.S. gold futures were down 0.6% lower at $1,506.01 per ounce.
“A bunch of U.S. economic data came way above the forecasts, like the new home sales data and that along with a strong dollar is weighing on gold right now,” said Jigar Trivedi, a commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers.
The National Association of Realtors’ pending home sales index rose 1.6% to a reading of 107.3 for August, the association said on Thursday, while economists polled by Reuters had forecast an increase of 0.9%.
The greenback held near multi-week highs against major currencies as heightened risks from political tensions to the Sino-U.S. trade war increased its safe-haven appeal.
A whistle-blower report released on Thursday said U.S. President Donald Trump not only abused his office in attempting to solicit Ukraine’s interference in the 2020 U.S. election for his political benefit, but that the White House tried to “lock down” evidence about that conduct.
This added to the uncertainties around the global growth outlook amid a prolonged U.S.-China trade spat.
European shares also rose on Friday, with London stocks outperforming due to a weaker pound, while hopes of a quick resolution to the U.S.-China trade war offset worries of slowing economic growth and rising political risks.
However, investors were cautious on mixed signals from China and the United States on their tariff dispute, which has helped the bullion gain about 17% so far this year.
A number of central banks across the globe, like the Fed, the European Central Bank and Bank of Japan, have cut interest rates to stimulate the economy amid fear of a potential recession.
“If the global economic situation does not improve, we may see central banks around the world cutting down interest rates,” said Margaret Yang Yan, a market analyst at CMC Markets.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.
China’s top diplomat said on Thursday Beijing was willing to buy more U.S. products, and that talks would yield results if both sides “take more enthusiastic measures” to show goodwill and reduce “pessimistic language.”
But reports saying Washington is unlikely to allow American firms to supply China’s Huawei Technologies undermined hopes of a complete deal between the countries.
Spot gold may test a support at $1,488 per ounce, a break below which could cause a fall towards $1,446, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.
Silver fell 1.34% to $17.56 per ounce, platinum down 0.2%, at $928.34 per ounce and palladium fell 0.5% to $1,659.54 per ounce. 

Sep 26, 2019

DealBook: SoftBank Bet Big on Disruptive Companies. Many Have Not Paid Off.

By Peter Eavis and Michael J. de la Merced

CreditCreditRyan Pfluger/August
Anyone who has taken an Uber, sent a Slack message or enjoyed a free beer at a WeWork owes a little something to Masayoshi Son.
Through his Japanese conglomerate SoftBank and a $100 billion investment fund, Mr. Son plowed huge sums into these and other companies that aim to change how people work, travel and live. His investments enabled the young companies to throw caution to the wind and run up big losses as they expanded at a breakneck pace in recent years. Even in the start-up world, where idealism is abundant and losses are a badge of honor, Mr. Son’s approach and ambition stood out.
His early bet on the Chinese technology giant Alibaba earned a return of more than $100 billion and cemented his reputation as a farsighted investor. He has outlined a 300-year plan to make SoftBank a leader in artificial intelligence, robotics and other advanced technologies.
But this year, his grand designs collided with reality.
In what may turn out to be a reckoning for Mr. Son, Wall Street has started running from companies backed by SoftBank and its Vision Fund. The chief executive of WeWork stepped down this week after a botched initial public offering. Uber’s stock has fallen nearly 30 percent from its I.P.O. price in May. And shares in Slack, which provides a workplace messaging service, have tumbled more than 40 percent from their first day of trading in June.
SoftBank’s critics said its investments have poisoned the ecosystem for young companies by encouraging founders to take excessive risks with little regard for building businesses that can last through the ups and downs of the economy. They are hoping the WeWork debacle will force investors to be more skeptical about fast growing companies. Even Mr. Son has acknowledged that the businesses his company invests in need to become financially sustainable more quickly.
“I’m hoping this is the tipping point that brings more sanity into the capital markets,” said Len Sherman, a former senior partner at Accenture who is now an adjunct professor at Columbia Business School.
CreditFaisal Al Nasser/Reuters
SoftBank and the Vision Fund now face the prospect of harsh write-downs on some of their investments. WeWork and its advisers considered selling shares in its public offering at a valuation as low as $15 billion, well below the $47 billion valuation at which SoftBank last invested in the company in January. If the stock market does value WeWork at $15 billion, SoftBank could be forced to take a $2 billion loss on its investment in the office-space business, according to analysts at Bernstein.
The prospect of such sizable losses has cast a cloud over SoftBank and raised doubts about Mr. Son’s investment style. And that, in turn, could undermine his effort to raise an estimated $108 billion for a second Vision Fund. SoftBank said in July that it expected Apple, Microsoft and other companies to contribute to the new fund, but the most important investors in the first fund — Saudi Arabia and Abu Dhabi — have yet to commit to it. (Apple declined to comment on the fund, and a Microsoft spokesman said the company’s participation had not changed since the July announcement.)
A spokeswoman for SoftBank declined to comment.
Speaking to executives of companies backed by the Vision Fund last week at the Langham Hotel in Pasadena, Calif., Mr. Son said they needed to be able to bring in enough revenue to more than cover expenses within a few years of going public, according to a person who attended the event but was not authorized to discuss it.
Simply increasing sales is not sufficient, Mr. Son said in what people in the audience understood as an implicit reference to WeWork.
Mr. Son, 62, built his business empire on huge bets and an unshakable belief in his own convictions. One frequently told story about him is that he once threatened to set himself on fire in the offices of a Japanese telecom regulator unless policymakers gave him what he wanted. He was one of the first corporate moguls to visit President-elect Donald J. Trump in 2016, promising to invest $50 billion and create 50,000 jobs in the United States. (The pledge was based on investments that SoftBank had already planned to make.)
Born to a family of Korean descent, he grew up in Japan and studied computer science at the University of California, Berkeley, where he made his first foray into business — creating an electronic translator that he sold to Sharp.
CreditKim Kyung Hoon/Reuters
He started a computer parts shop in Tokyo called SoftBank in 1981 and built it into a technology and telecommunications conglomerate. His wealth swelled during the dot-com boom, withered in the early 2000s and slowly recovered as SoftBank became one of Japan’s biggest cellphone companies.
In 2000, Mr. Son put $20 million into Alibaba, a stake that is now worth nearly $119 billion even after SoftBank sold off some of its shares three years ago. That windfall also helped pump up Mr. Son’s personal net worth to an estimated $20 billion.
Mr. Son has sought to duplicate his Alibaba investment again and again.
“You cannot think small,” he told analysts in May 2017. With the prospect of what he called a “gold rush” in the tech industry, now was the time to “open up our mind, open up our heart and think big.”
The Vision Fund has hit some home runs. The fund earned a roughly $1.5 billion return on its 2017 investment in Flipkart, an Indian e-commerce company, when Walmart acquired that business last year. Despite missteps like WeWork, the fund might need only a few bets that pay off big to make up for losses elsewhere, said Tom Nicholas, a professor at Harvard Business School.
“That said, when you invest at high valuations — as SoftBank is prone to doing — it puts a lot of pressure on the fund to generate truly outsized returns from the successful portfolio investments,” Mr. Nicholas said in an email.
Several of Mr. Son’s investments have been disappointments, including one of SoftBank’s biggest forays into the United States: the 2013 acquisition of a controlling stake in Sprint, the struggling wireless company.
CreditKiyoshi Ota/Bloomberg
Mr. Son paid $21.6 billion and took on billions more in debt to buy the company. But he predicted that SoftBank would help Sprint overtake its bigger rivals, Verizon and AT&T, in part by upgrading the company’s network to deliver the better services and faster speeds.
Yet that promise remains just that. Excluding accounting changes that lifted Sprint’s earnings, the company’s bottom line has stayed roughly flat under SoftBank, said Craig Moffett, a research analyst at MoffettNathanson. Sprint has not only fallen further behind its bigger rivals, but also lost ground to T-Mobile, a smaller competitor.
“It’s been a terrible investment,” Mr. Moffett said.
Mr. Son tried several times to combine Sprint with T-Mobile. Only last year did SoftBank finally strike a deal by agreeing to sell Sprint to T-Mobile, a deal that 18 attorneys general are seeking to block.
That deal is crucial to Sprint’s survival, Mr. Moffett said. “There’s a very solid argument that Sprint’s equity is worthless if the merger doesn’t go through,” he said.
Several of SoftBank’s more recent investments have also struggled.
Analysts say one of the biggest problems for the company is that its enormous investments in start-ups have pushed up valuations for young companies to levels that no other investors are willing to pay.
WeWork is a prime example. Mr. Son first agreed to invest in that company after a 2016 meeting with its founder and chief executive, Adam Neumann, that lasted less than an hour. In January this year, the last time SoftBank invested in the office-space company, the two sides agreed to value the company’s shares at $47 billion, up from the $20 billion they said the business was worth in 2017.
Another major flaw with SoftBank’s approach, critics say, is that it imposes few constraints on founders of the companies it invests in. Corporate governance experts were aghast when they learned of some of the conflicts of interests at WeWork that Mr. Son and SoftBank tolerated. For example, the company rented space in buildings partly owned by Mr. Neumann. (The stakes were later assumed by a WeWork affiliate.)
Mr. Son’s chosen start-ups may also lack discipline because he lavished hundreds of millions or billions of dollars on them before they had even figured out what customers really wanted and how to turn a profit, said Bill Aulet, a professor at the Massachusetts Institute of Technology’s Sloan School of Management. “Hungry dogs hunt best,” he said.
Erin Griffith contributed reporting.

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