Fed Will Trap U.S. Economy in Recession With 0% Interest Rates

W. E. Messamore, CCN•March 9, 2020

If the Fed cuts rates to zero like markets believe it will, that will put the U.S. in the same boat as the rest of the world.

Markets are pricing in near-100% odds the Federal Reserve will drive interest rate targets down to zero percent next week.

If that happens, the Fed will trap itself between a recession and runaway inflation should prices skyrocket while GDP falls.

That is a horrific situation for the economy to be in: stagflation. It happened in the U.S. before, and it could easily happen again.

Earlier today, the market’s confidence that the Federal Reserve will slash its benchmark interest rate target to zero by next week temporarily soared to nearly 95%.

But if the Fed cuts interest rates all the way to zero, there’s a real danger of inflation making the financial crisis worse

The market briefly priced in a 93% probability of a massive interest rate cut that would take the Fed’s target down to zero. | Source: CME

Because the economy could slip into recession despite monetary intervention with record-low interest rates.

‘Let’s persist together’: Elizabeth Warren staffers endorse Bernie Sanders on crucial primaries day

Chris Riotta

,

The Independent•March 10, 2020

Getty Images

A group of nearly 40 staffers who worked for Elizabeth Warren’s presidential campaign has endorsed Bernie Sanders in an open letter, calling on their supporters to "persist together" in the battle for the White House.

In a letter published to Medium.com on Tuesday titled “Team Warren for Bernie Sanders”, the group of organisers and campaign directors stated their goals included working “to consolidate those who are ready to jump from Warren to Sanders immediately and build a community to facilitate the transition”.

The campaign staffers also said they wanted to reach out to Ms Warren’s supporters and urged them to support the Vermont senator in his bid against former Vice President Joe Biden for the Democratic nomination.

Those new forms of outreach, the letter stated, would use the foundation built by Ms Warren’s campaign and “the grassroots networks that we have cultivated” throughout the Democratic primaries.

- ADVERTISEMENT -

The letter comes just five days after Ms Warren, once considered a potential frontrunner in the Democratic primaries, dropped out of the race. It was published as voters in six battleground states participated in primaries across the country following last week’s Super Tuesday — with Mr Sanders fighting to maintain his campaign against Mr Biden’s newfound frontrunner status.

“Elizabeth ran a campaign on intersectional policy issues like Medicare for All, a Wealth Tax, a Green New Deal, cancelling student loan debt, providing universal free college, expanding Social Security, legalising marijuana at the federal level and erasing convictions, and raising the minimum wage to $15 an hour,” the letter read. “Now that Elizabeth has told us that her campaign is concluded, we know that she is considering how to best continue the fight for big, structural change. We respect that process and trust that she, as she always does, will do what is best to advance this movement.”

It continued: “We also understand and respect that many Warren supporters are still processing their feelings as well. We urge them to take care of themselves first and we stand ready to welcome them back into the fight when they are ready.”

The organisers said they ultimately made the decision to endorse Mr Sanders after Ms Warren dropped out of the race, writing: “We know that we won’t beat Donald Trump by simply talking about a return to business as usual.”

Ms Warren herself has declined to endorse anyone since dropping out of the race. If she were to choose Mr Sanders, her support could be seen as a boost of energy to his campaign after the former vice president raked in endorsements from previous Democratic presidential hopefuls just before last week’s vote.

If she chooses Mr Biden, that could potentially signal Mr Sanders’ campaign is dead in the water, according to some analysts.

35 former Warren staffers (and counting) just officially endorsed @BernieSanders and it’s honestly the most #NotMeUs thing I’ve even seen! 😭

Read their endorsement letter here: https://t.co/Agv8GHwaq2

h/t @People4Bernie for this wonderful solidarityforever graphic pic.twitter.com/S5bLVSnUga

— Bhavik Lathia (@bhaviklathia)

March 10, 2020

In announcing the end of her campaign, Ms Warren said she would need time before potentially making an endorsement during a press conference with reporters outside of her home in Cambridge.

"I need some space around this," she said, "and I want to take a little time to think a little more."

‘Let’s persist together’: Elizabeth Warren staffers endorse Bernie Sanders on crucial primaries day

Chris Riotta, The Independent•March 10, 2020

Getty Images

A group of nearly 40 staffers who worked for Elizabeth Warren’s presidential campaign has endorsed Bernie Sanders in an open letter, calling on their supporters to "persist together" in the battle for the White House.

In a letter published to Medium.com on Tuesday titled “Team Warren for Bernie Sanders”, the group of organisers and campaign directors stated their goals included working “to consolidate those who are ready to jump from Warren to Sanders immediately and build a community to facilitate the transition”.

The campaign staffers also said they wanted to reach out to Ms Warren’s supporters and urged them to support the Vermont senator in his bid against former Vice President Joe Biden for the Democratic nomination.

Those new forms of outreach, the letter stated, would use the foundation built by Ms Warren’s campaign and “the grassroots networks that we have cultivated” throughout the Democratic primaries.

The letter comes just five days after Ms Warren, once considered a potential frontrunner in the Democratic primaries, dropped out of the race. It was published as voters in six battleground states participated in primaries across the country following last week’s Super Tuesday — with Mr Sanders fighting to maintain his campaign against Mr Biden’s newfound frontrunner status.

“Elizabeth ran a campaign on intersectional policy issues like Medicare for All, a Wealth Tax, a Green New Deal, cancelling student loan debt, providing universal free college, expanding Social Security, legalising marijuana at the federal level and erasing convictions, and raising the minimum wage to $15 an hour,” the letter read. “Now that Elizabeth has told us that her campaign is concluded, we know that she is considering how to best continue the fight for big, structural change. We respect that process and trust that she, as she always does, will do what is best to advance this movement.”

It continued: “We also understand and respect that many Warren supporters are still processing their feelings as well. We urge them to take care of themselves first and we stand ready to welcome them back into the fight when they are ready.”

The organisers said they ultimately made the decision to endorse Mr Sanders after Ms Warren dropped out of the race, writing: “We know that we won’t beat Donald Trump by simply talking about a return to business as usual.”

Ms Warren herself has declined to endorse anyone since dropping out of the race. If she were to choose Mr Sanders, her support could be seen as a boost of energy to his campaign after the former vice president raked in endorsements from previous Democratic presidential hopefuls just before last week’s vote.

If she chooses Mr Biden, that could potentially signal Mr Sanders’ campaign is dead in the water, according to some analysts.

35 former Warren staffers (and counting) just officially endorsed @BernieSanders and it’s honestly the most #NotMeUs thing I’ve even seen! 😭
Read their endorsement letter here: https://t.co/Agv8GHwaq2

h/t @People4Bernie for this wonderful solidarityforever graphic pic.twitter.com/S5bLVSnUga
— Bhavik Lathia (@bhaviklathia)

March 10, 2020

In announcing the end of her campaign, Ms Warren said she would need time before potentially making an endorsement during a press conference with reporters outside of her home in Cambridge.

"I need some space around this," she said, "and I want to take a little time to think a little more."

Taliban fought IS with 'limited' US military support, US general reveals
AFP•March 10, 2020

Marine Corps General Kenneth F. McKenzie, head of the US Central Command, said that the Taliban has shown the "capability" of defeating jihadists with the Islamis State group (AFP Photo/SAUL LOEB)More


Washington (AFP) - The Taliban has shown that it can fight and defeat Islamic State group jihadists in Afghanistan, a top US general said Tuesday, revealing for the first time that it had done so in recent months with "very limited" US military support.

"It was a bloody mess, but they did it," General Kenneth McKenzie, head of the US Central Command, said of the Taliban's virtual defeat of IS in Afghanistan's Nangarhar province in recent months.

McKenzie disclosed the US military support for the Taliban operation in congressional testimony, but provided few details on the role played by US forces.

He was called to testify about the situation in Afghanistan following a peace deal that the United States signed with the Taliban February 29 in Doha

Under the agreement, the United States committed to the withdrawal of all foreign fores within 14 months in return for a Taliban pledge to tackle jihadists such as the Islamic State group and Al-Qaeda, and hold peace talks with the Afghan government.

"Over the last several months in eastern Afghanistan we've watched the Taliban compress and crush the ISIS presence on the ground in southern Nangarhar province, and they've been very effective doing that," McKenzie said, using an alternate acronym for Islamic State.

"There was very limited support from us," he said, without elaborating further on the role US forces played.

"They have demonstrated a capability to do it. It was a bloody mess, but they did it," the US general said.

"ISIS really now no longer holds ground in Nangarhar province."

McKenzie, however, said he was "less optimistic" about the Taliban taking on Al-Qaeda, the jihadists who plotted the September 11, 2001 attacks on the United States from their base in then Taliban-ruled Afghanistan.

"That's something they're going to have to demonstrate that has not yet been demonstrated," McKenzie said.

McKenzie reminded lawmakers that the Taliban must meet its commitments for there to be a withdrawal.

"We don't need to trust them, we don't need to like them, we don't need to believe anything they say, we need to observe what they do," McKenzie said.

McKenzie said that the US military has yet to prepare a military plan for a total withdrawal from Afghanistan.

Guatemalan migrant dies in U.S. custody after gallblader operation

Reuters•March 9, 2020

Guatemala seeks to limit migrants returned under U.S. agreement

GUATEMALA CITY (Reuters) - A Guatemalan migrant who had passed a key hurdle in her bid to win asylum in the United States has died in U.S. custody after a gallbladder operation, the Guatemalan government said on Monday.

Maria Ochoa, 22, from the poor San Marcos region near Guatemala's border with Mexico, died on Sunday in a hospital in Houston, Texas, months after she was detained at the border by U.S. Immigration and Customs Enforcement (ICE) in September.

Ochoa, whose two brothers live in the United States, had an operation on her gallbladder in the neighboring state of Oklahoma on Feb. 7 and spent a week in hospital afterwards, Guatemala's foreign ministry said in a statement.

Weeks earlier, she had passed the "credible fear test", the statement said, which is among the first tests U.S. asylum seekers must pass before they are allowed to press their case while remaining in the United States.

A surge of mostly Central American migrants have made the perilous journey north to try to enter the United States in recent years, many with children in tow and most fleeing rampant violence and extreme poverty in their home countries.

Several have died in U.S. custody in recent months.

A young Guatemalan woman is the eighth person to die in ICE custody in 6 months

INSIDER•March 9, 2020

US Immigrations and Customs Enforcement (ICE) officers.

Immigration and Customs Enforcement

A Guatemalan woman, 22, died in the custody of Immigration and Customs Enforcement (ICE) on Sunday.

Her passing marks the eighth ICE-detainee death since October 1, when the 2020 fiscal year began six months ago.

A total of eight immigrants died while in ICE detention the previous year.

A 22-year-old Guatemalan woman died in a Texas hospital after several months in detention by Immigration and Customs Enforcement (ICE), Buzzfeed News reported Sunday.

The woman, who was arrested and detained by ICE after crossing the Mexico-Texas border last September, had passed her "credible fear" screening, demonstrating that she was escaping a credible threat of persecution or violence in Guatemala, according to Buzzfeed News' source, who spoke anonymously.

The woman is the eighth person to die in ICE custody since October 1, which marked the beginning of the fiscal year 2020. In the previous fiscal year, a total of eight detainees died in ICE custody.

She was in detention at an ICE facility in Oklahoma when, in early February, she was taken to a hospital in the state and had her gallbladder surgically removed. The day after the operation, she was taken back to the Oklahoma facility and then moved to another ICE detention center in Texas.

Five days later, on February 18, she began experiencing abdominal pain. She was taken to a Texas hospital for care, where she stayed until her death on Sunday.

Since President Donald Trump took office, more than two dozen immigrants have died in ICE custody. A recent Buzzfeed News expose found that ICE's health branch "has systematically provided inadequate medical and mental health care and oversight to immigration detainees across the U.S.," according to a whistleblower who corresponded with Buzzfeed News.

The whistleblower provided Buzzfeed News with an internal ICE memo that showed a trend of inadequate medical care, which led to the preventable death of three detainees.

The memo also revealed that immigrants were given the wrong medications. One man was given Advil despite having thin blood. Detainees that suffered from addiction withdrawal were not given proper treatment, according to the whistleblower.

"This is significant and very damning," the whistleblower, a former official, told Buzzfeed News. "It blows up a lot of the ICE responses to allegations of poor medical care and about how it provides 'the highest care of detainees.' This makes that seem pretty false, which it is."

An ICE spokesperson told Buzzfeed News at the time that the agency "is committed to ensuring that those in our custody reside in secure, humane environments and under appropriate conditions of confinement."

The statement went on to say: "The agency takes very seriously the health, safety and welfare of those in our care, including those who come into ICE custody with prior medical conditions or who have never before received appropriate medical care. It also uses a multi-layered inspections program to ensure its facilities meet a certain threshold of care as outlined in our contracts with facilities, as well as the National Detention Standards and the Performance Based National Detention Standards."

In December, the House Oversight and Reform Committee launched an investigation into ICE's medical-care apparatus, citing numerous detainee complaints of "inadequate medical treatment."

Olive Garden employee, 16, to file lawsuit after customer requested white server, reports say

Michael Doyle, Evansville Courier & Press,USA TODAY•March 9, 2020

EVANSVILLE, Ind. – An Olive Garden employee who made headlines last week when a customer singled her out in an incident of racial discrimination has decided to sue the restaurant.

According to a Facebook post Saturday from Indiana law firm Danks and Danks, Amira Donahue, 16, decided to quit her position at the restaurant because of what she said has become a hostile work environment.

"After Amira spoke up about being discriminated against by an Olive Garden customer, she has been harassed by and retaliated against by her coworkers and superiors," the post reads. "Amira told her superiors about the harassment and retaliation by her coworkers, and Olive Garden failed to stop it from continuing.

"Amira did her best to overcome the adversity at Olive Garden, but her environment had become intolerable. The final straw happened yesterday evening when Amira overheard a coworker say, 'black people will do anything for money' and 'I don’t like her,’" the Facebook post continues.

Previously: Olive Garden customer reportedly refused service from a black server and the manager complied

As first reported by the USA TODAY Network's Evansville Courier & Press on March 2, Donahue was working her shift as a host at Olive Garden in Evansville on Feb. 29 when a customer requested a white server instead of the server already assigned to the table. Both Donahue and the server are black.

The manager of the restaurant granted the customer's request. That manager was later “separated” from the company, according to Olive Garden corporate management.

"We have zero tolerance for discrimination of any kind, and the manager involved no longer works for our company," an emailed statement from the company said.

Customers at the restaurant corroborated Donahue's account of what happened the next day.

"A few white people come in (and) says that they refuse service from a 'colored' server and asks to speak with the manager," wrote Maxwell Robbins, who told the Courier & Press he went to dinner at the restaurant. "The manager without hesitation ensures that they will not receive service from a person of color."

Danks and Danks issued a statement saying the firm was "proud to join Amira in this fight."

Attorney Brandon Danks told local news outlet WEVV that the firm is "anticipating litigation" and expects to "eventually file something."

"We stand with Amira and fully support her decision," the firm's Facebook post concluded. "She has been strong in facing adversity and brave for exposing it.

"We will continue the fight for Amira and hold Olive Garden responsible for its treatment of employees."

As part of an outpouring of support on social media, Paparazzi Glamour & Gowns, an Evansville formal wear store, said Donahue's prom gown, which she purchased on a payment plan, would be free.

The store went a step further, also offering her a new job.

"Your prom dress is here waiting for you – as is a sales associate position with a management team and co-workers who support you in your fundamental right to be amazing, if you ever choose to take us up on it!" a post on the store's Facebook page reads.

This article originally appeared on Evansville Courier & Press: Olive Garden employee Donahue to sue after racist incident: reports

McDonald's hourly workers in U.S. demand paid sick leave as virus spreads

Reuters•March 10, 2020


(Reuters) - Hourly wage workers at McDonald's Corp on Tuesday sought paid sick leave for those working at its U.S. restaurants and an update to the safety protocols as coronavirus cases in the United States rise.

The burger chain has not trained or given any guidelines on the epidemic, McDonald's cooks and cashiers associated with labor group Fight for $15 and a Union said in a statement.

Maurilia Arellanes, a McDonald's worker in California, said on a media call organized by the labor group that she cannot afford to take a day off if she is sick.

"McDonald's needs to step up and do everything it can to make sure workers like me are safe and that if we do get sick, we can take time off to get better without falling behind on our bills," she said.

The labor group asked the company to pay workers for any missed shifts if its restaurant shuts down due to the spread of COVID-19. McDonald's hourly pay for workers varies from $7.25 to $15 based on the state.

"As we proactively monitor the impact of the coronavirus, we are continuously evaluating our policies to provide flexibility and reasonable accommodations," a company spokesperson said in a statement.

Restaurant workers have for long complained about poor pay and working conditions, drawing support from politicians and Fight for $15, which has regularly targeted McDonald's calling for higher pay and union rights for workers.

Their demands come close on the heels of Darden Restaurants, the owner of Olive Garden and Bahama Breeze chains, saying it would provide its hourly workers paid sick leaves starting Tuesday.

Separately, retailer Walmart Inc said an employee in Kentucky tested positive for the coronavirus, adding that employees would receive up to two weeks of pay in case of infection or if their store, club, office or distribution center were quarantined.

Over 600 cases and 26 deaths have been reported in the United States due to the coronavirus. However, McDonald's has not issued an update on the potential financial impact on its home.

When the outbreak was first reported in China late last year and the company said in January it does not see a big financial hit as it only collected royalty fees from China.

It last week decided to cancel its biennial in-person worldwide convention, attended by operators from around the world and set to take place in a few weeks. It will now hold a digital convention.

"The company canceled a meeting of executives and franchisees, but it's not making any plans for us frontline workers, who cannot afford to take a day off without pay if we get sick," said Fran Marion, a McDonald's worker in Kansas City, Missouri.

(Reporting by Nivedita Balu in Bengaluru; Additional reporting by Praveen Paramasivam; Editing by Arun Koyyur)

US MEN'S SOCCER TEAM ARE SNOWFLAKES

Hostile crowds a factor in equal pay row: US federation

AFP•March 10, 2020

Police watch over fans during a World Cup qualifier between the 

USA and Mexico at Mexico City's Azteca Stadium 

(AFP Photo/BRIAN BAHR)


Los Angeles (AFP) - The United States Soccer Federation says that having to play regularly in front of hostile crowds in Mexico and Central America is one reason why the US men's national team should be treated differently to their female counterparts.

In a filing made in a federal court in Los Angeles on Tuesday, the USSF said the fact that the men's team routinely plays in intimidating arenas showed that their jobs were different to the women's team.

The United States women's team is suing the USSF, accusing the federation of gender discrimination and demanding $66 million in back pay under the Equal Pay Act and the Civil Rights Act.

Both sides have requested a summary judgement from the judge presiding in the case, seeking a ruling in their favour before the May 5 trial in Los Angeles.

In its submission filed Tuesday, the USSF argues that the different work environments of the men's and women's teams was a reason why their jobs could not be regarded as the same under the Equal Pay Act.

"(Mens National Team) players routinely play matches (important World Cup qualifiers, in particular) throughout Mexico, Central America and the Caribbean," the filing says. "The WNT (Women's National Team) does not."

"Opposing fan hostility encountered in these MNT road environments, especially in Mexico and Central America, is unmatched by anything the WNT must face while trying to qualify for an important tournament.

"Even the hostility of fans at home crowds for the MNT in some friendlies can be unlike anything the WNT faces. This is all evidence of substantially different jobs under the EPA (Equal Pay Act)."

- 'More responsibility' -

The filing also argues that the job of a men's soccer player "carries more responsibility within US soccer than the job of a WNT player, from an Equal Pay Act standpoint."

Lawyers for the USSF cite television ratings to back the claim, arguing that US men's national team games have attracted more than three times the number of viewers per game than women's games since 2017.

On Saturday, USSF president Carlos Cordeiro released an open letter stating that the federation had "offered to provide identical compensation to our women's and men's players for all matches controlled by US Soccer."

But Cordeiro said the issue of $66 million in back pay related to disparities in prize money awarded by FIFA for the men's and women's World Cups -- an amount that the USSF could not afford to make up.

Germany won $35 million for their victory in the 2014 World Cup while France earned $38 million after triumphing in Russia in 2018.

The United States women, victors in the 2015 and 2019 World Cups, earned total prize money of $6 million over the two tournaments.

"There is indeed a significant difference in World Cup prize money awarded by FIFA to the men's and women's championship teams," Cordeiro wrote.

"However it is not reasonable or fiscally sound for US Soccer to make up the gap. It would seriously impair our ability to support our mission."

---30---

Mexico president's response to historic femicide protests: more of the same

David Agren in Mexico City,The Guardian•March 10, 2020

Photograph: Henry Romero/Reuters

A day after Mexico’s women collectively shut down the country in an eruption of fury over gender violence, President Andrés Manuel López Obrador has insisted that he will not try a new strategy to stop femicides.

Thousands of women went on strike on Monday, in a historic protest against the murder of women and girls – and the failure of successive governments’ efforts to stop a crisis in which around 10 women are murdered every day.

But asked on Tuesday if he would consider a new approach to the problem, López Obrador replied: “No – on the contrary, we are going to reinforce the same strategy of looking at the causes of violence.”

Related: Mexico: activists voice anger at Amlo's failure to tackle 'femicide emergency'


The comments echoed the president’s previous response to Mexico’s spiraling drug war violence, which he has insisted can be reined in with an ill-defined policy of “moral renewal”.

López Obrador, known as Amlo went on to list a litany of possible solutions, including “finding ways to live in a better society … [making sure] that there is no unemployment, that there are good salaries, that family disintegration is avoided, that there are proper salaries, that values are strengthened.”

He did not use the word “femicide” or mention any gender issues or specific security concerns for women.

He did, however, cast himself as the victim of a conspiracy as he accused “conservatives” of “putting on the mask of feminism and saying, ‘we’re going to get rid of the government.’”

A string of especially gruesome murders have injected new urgency into Mexican women’s calls for action on femicides.

But Amlo has repeatedly voiced misgivings about the growing women’s protests.

In one press conference, he appeared bothered by a question on femicides – which he said overshadowed his plans to raffle off the presidential aircraft.

Related: The Guardian view on Mexico’s women’s strike: let the machistas tremble | Editorial

VIDEO
A group of women clashed on Sunday with men protesting abortion outside Mexico City's main cathedral on International Women's Day. The confrontation capped off multiple scuffles that left dozens injured during a protest of tens of thousands of people

Exclusive: U.S., Canada, European nations meet to discuss concern over Mexico energy policy

ALMO IS NOT A LEFTIST HE IS A NEOLIBERAL NATIONALIST

By Dave Graham,Reuters•March 8, 2020

FILE PHOTO: Mexico's President Andres Manuel Lopez Obrador speaks 

during a news conference to announce a plan to strengthen finances of 

state oil firm Pemex, at the National Palace in Mexico City

By Dave Graham

MEXICO CITY (Reuters) - The United States, the European Union, Canada and six European nations have held joint talks on concerns over Mexico's energy policy, sources told Reuters, as President Andres Manuel Lopez Obrador pushes for a bigger role for the state in the sector.

The unusually broad diplomatic encounter is a measure of how the leftist (SIC) Lopez Obrador's break with the energy policy of the previous government is worrying economies that have traditionally been some of Mexico's biggest foreign investors.

U.S., Canadian and European officials privately voice concern that Mexico's energy policy is eroding the legal foundations of contracts worth billions of dollars with the previous administration, in what they fear is a creeping squeeze-out of their interests.

Mexico's government denies it is undermining those deals, but says prior contracts were often damaging to the country, and has sought to renegotiate the terms of some.

At Friday's meeting in Mexico City hosted by the U.S. embassy, diplomats from Britain, Canada, the EU, France, Germany, Italy, the Netherlands and Spain discussed their concerns and how best to relay them to Lopez Obrador, said five people familiar with the gathering.

Asked for comment, the U.S. embassy responded to Reuters that it did not discuss its diplomatic conversations. The other foreign embassies did not reply to requests for comment, nor did Lopez Obrador's office.

Details of what happened at the meeting were not immediately clear, although there was discussion about whether to make it public, said one person. All the sources spoke on condition of anonymity, due to the sensitivity of the matter.

Diplomats say foreign government differ in their opinions of how openly to communicate their grievances to Lopez Obrador, lest he feel he is being pushed about and ends up taking a more hardline approach.

Lopez Obrador has committed himself to strengthening the state's role in the energy sector, arguing that past market liberalization and privatization of other industries deepened chronic inequality in Mexico and encouraged corruption.

Broader concerns over Lopez Obrador's economic policies sapped investment in Mexico last year and contributed to a slowdown that pushed the economy into a mild recession.

Companies from around the world pledged to invest billions of dollars in Mexico under constitutional changes to open up the energy market, in particular for oil and gas, made by Lopez Obrador's centrist predecessor, Enrique Pena Nieto.

Lopez Obrador has put the brakes on that liberalization process, saying it has not yielded benefits for Mexico.

One particular dispute centers on who has the right to operate a major offshore crude discovery in a reservoir straddling areas held by state oil firm Petroleos Mexicanos (Pemex) and a U.S.-led consortium of private investors.

Last year, Lopez Obrador's government also upset some countries by threatening to tear up about $12 billion in contracts agreed under Pena Nieto for construction of a string of natural gas pipelines, arguing they ripped off taxpayers.

Although that dispute was eventually resolved, fresh conflicts have surfaced.

Government steps to strengthen the state power utility Comision Federal de Electricidad (CFE) have reduced incentives for private capital to enter renewable projects, further clouding investor confidence in Mexico.

Some of the money tied up in energy investments in Mexico is linked to pension funds in Europe and North America. Critics of the government's policies worry that diminishing returns on those Mexican energy investments may hit pensioners.




(Reporting by Dave Graham; Additional reporting by Ana Isabel Martinez; Editing by Clarence Fernandez)

America’s worst financial adviser

Kudlow, 72, is not an economist, even though he served as “chief economist” at investing firm Bear Stearns in the 1980s. 

I HAVE BEEN SAYING THIS ABOUT KUDLOW FOR YEARS


Rick Newman Senior Columnist, Yahoo Finance•March 9, 2020


The Kudlow Portfolio is tanking.

On Feb. 25, Larry Kudlow, director of the White House’s National Economic Council, suggested it was a good time to buy stocks. “The virus story is not going to last forever,” Kudlow said on CNBC around 2:30 p.m. “To me, if you are an investor out there and you have a long-term point of view, I would suggest very seriously taking a look at the market, the stock market, that is a lot cheaper than it was a week or two ago.”

At the time, the S&P 500 (^GSPC) index was around 3,128. Two weeks later it closed at 2,746. If you took Kudlow’s advice, you were the dumb money buying in a selloff. You’d be down more than 12%.

Kudlow hedged his suggestion with the “long term” reference. But it was still a foolish thing to say, and Kudlow’s not the only one saying it. Trump himself is a frequent stock-market commentator (always buy, never sell) who is now dismissing the recent plunge in stocks as a panicky reaction to “fake news”—the coronavirus outbreak. Treasury Secretary Steven Mnuchin has been another occasional up-talker of stocks. We all know the game: Trump’s minions must say anything to goose stocks and aid Trump’s reelection odds.

We know now that Kudlow issued his buy recommendation in the early stages of a worsening downturn that might end the bull-market rally that stretches all the way back to 2009. The coronavirus has unnerved investors because nobody can gauge the severity and duration of an epidemic forcing closures, cancellations and lost business worldwide. On top of that, a spat between oil producers Russia and Saudi Arabia led to a crash in oil prices and new worries about energy firms going bust.

White House chief economic adviser Larry Kudlow adjusts his tie before speaking with reporters about the impact of the Coronavirus on markets in the Brady Press Briefing Room of the White House, Friday, Feb. 28, 2020, in Washington. (AP Photo/Evan Vucci)More

Kudlow couldn’t have known all this, right? Shouldn’t he get a pass for an innocent mistake? How about no. Kudlow’s recommendation came with stocks down 7.6% from their peak, which might sound like a nice dip-buying opportunity in normal times. But this was at a time when the coronavirus death toll in Italy hit double digits, the mayor of San Francisco declared a state of emergency and public health experts were warning of an exponential spike in infections. The volatility index (^VIX) which measures uncertainty in financial markets, had doubled in a week and was well into the range often associated with market turmoil.

Kudlow, 72, is not an economist, even though he served as “chief economist” at investing firm Bear Stearns in the 1980s. Kudlow was a successful Wall Street salesman who capitalized on an upbeat personality to land a job as a commentator and show host at CNBC, starting in 2002, which made him famous. He’s a fervent supply-sider favoring tax cuts and laissez-faire policies as the best path to a strong economy, one reason Trump tapped him to replace Gary Cohn at the White House in 2018.

Kudlow has produced some famously bad predictions, however. “Larry Kudlow is usually wrong and frequently absurd,” housing analyst Bill McBride, who pens the Calculated Risk blog, wrote in 2016. In 2005, for instance, Kudlow, argued that “bubbleheads” predicting real estate crashes in Las Vegas and Florida were “dead wrong.” Kudlow turned out to be dead wrong. An epic housing bust began right around that time, with gigantic losses in Las Vegas and Florida. In 2007, Kudlow wrote, “there is no recession.” In reality, a terrible recession began that very month.

Kudlow was one of several Trump officials who predicted the 2017 Republican tax cuts would produce a surge of economic growth, perhaps hitting 4% for the first time since 2003. It hasn’t happened. Growth under Trump peaked at 3.3% in the second quarter of 2018 and drifted down to 2.3% by the end of last year. Most economists think the economy was growing at around 2% before the coronavirus crisis, which will undoubtedly slow the economy.

Kudlow might be able to argue that he’s simply a sunny analyst eager to see the bright side. But he has a giant conflict of interest when commenting on financial markets, because it’s in his interest and Trump’s that markets do well this year, to help Trump with reelection. If everybody loses their shirts the day after the election, who cares.

What about Obama? It’s a fair question. On March 3, 2009, when markets were reeling from the Great Recession, President Obama said, “What you’re now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal, if you’ve got a long-term perspective on it.” That was a buy recommendation, just like Kudlow’s. Obama should have kept his mouth closed and let the market sort itself it, but history has treated him kindly. Stocks bottomed out six days later—down a nauseating 56%—triggering a bull market that continues to this day.

Yahoo Finance reached out to the White House to ask if Kudlow still recommends buying stocks, or has any regrets about his Feb. 25 buy recommendation. We got no response. That sounds about right.

Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman.


In coronavirus crisis, Trump's stock market advice keeps looking worse

David Knowles Editor, Yahoo News•March 9, 2020

Almost forgotten in the rush of doom-and-gloom headlines about the spread of coronavirus and Monday’s record-breaking stock market sell-off is President Trump’s two-week-old advice to would-be investors to buy stocks.

Though the first market jitters over the economic impact of coronavirus had already led to consecutive triple-digit losses, Trump posted an optimistic appraisal of the investment landscape on Feb. 24.

The Coronavirus is very much under control in the USA. We are in contact with everyone and all relevant countries. CDC & World Health have been working hard and very smart. Stock Market starting to look very good to me!
— Donald J. Trump (@realDonaldTrump) February 24, 2020

Hours after Trump’s tweet was published, the Dow Jones Industrial Average closed at 28,992, down 227 points.

A day later Larry Kudlow, Trump’s director of the National Economic Council, made a second appeal on behalf of the beleaguered stock market.

“The virus story is not going to last forever,” Kudlow said in an interview. “I would suggest very seriously taking a look at the market, the stock market, that is a lot cheaper than it was a week or two ago.”

President Trump and Larry Kudlow, director of the National Economic Council.

 (Photo illustration: Yahoo News; photos: AP)

Despite Kudlow’s optimism, the Dow fell another 1,031 points that day, to close at 27,912.

In fact, that week turned out to be the worst for the stock market since the 2007 financial crisis, with the Dow losing 3,500 points and wiping out $3 trillion in value.

On Feb. 27, three days after offering his stock market tip, Trump announced he was appointing Vice President Mike Pence to head up his coronavirus task force, which also included Kudlow. During a White House press conference, Trump assured assured the country that the number of Americans infected with the virus “was going very substantially down, not up,” and that “within a couple of days” the tally would be “down close to zero.”

Perhaps buoyed by that infectious confidence, Trump’s son, Eric, jumped on the “buy the dip” bandwagon.

In my opinion, it’s a great time to buy stocks or into your 401K. I would be all in... let’s see if I’m right...
— Eric Trump (@EricTrump) February 28, 2020

But just as the number of cases did not go down as Trump had foreseen (the number has risen from 60 confirmed cases at the time of Trump’s press conference to over 600 as of Monday), the stock market proved an equally bad bet.

On Monday, it fell 2,014 points, the largest single-day point loss in history, and closed at 23,851. For those keeping score at home, that’s more than 5,000 points lower than when Trump proclaimed the markets were starting to look good.

Of course, Trump isn’t the first president to encourage Americans to invest in the stock market. On March 3, 2009, then-President Barack Obama saw an opportunity to buy following a nearly 300-point dip in the Dow, which at that time had fallen to 6,726 points in the wake of the Great Recession.

“What you’re now seeing is profit-and-earnings rations are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it.”

From the time he said that through the end of his presidency, the S&P 500 rose by nearly 225 percent.

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