Brexit Purgatory Continues
As the world turns, so the Brexit saga continues. Futures traders are now betting the odds of first contact with an alien species of hyperintelligent snails is more likely than this chapter ever being closed. (This is not to be taken literally.)
What happened over the weekend was that Prime Minister Boris Johnson brought his “new and improved” Brexit Deal, now with 20% extra Brexit sauce, to Parliament, which, instead of voting for or against it, voted to not vote on it at all, forcing Johnson to send his Brexit extension request to the European Union, which he was compelled to do by October 19th at 11pm, which he did. He basically just photocopied the text of the law that compelled him to send this letter, quite literally. He didn’t even sign the thing. Then he sent another letter which he actually signed, indicating that he was compelled to send the thing, but he doesn’t want to delay.
MPs are now complaining that Johnson broke the law by doing this, but the cat is already out of the bag. He can’t unsend the letter. So they could theoretically ask a Judge to put him in prison if they want to for sending two letters, but not much else can be done. They can’t force the EU to not read it.
If the EU really wants this over and done with already, then they’d best reject a delay and force Parliament to vote on the deal. That way, if Parliament votes it down, Brexit will be over anyway by the 31st, and at that point Parliament can ratify the agreement at any time, probably after a general election. Either way, a no deal Brexit probably won’t last that long. The biggest risk though is the effect that even a temporary no deal Brexit will have on the European banking system, as trillions of Euros worth of derivative contracts are contingent on smooth economic flow between the UK and EU.
Despite Syria Withdrawal, US Troops To Continue Fighting
If you thought that the US withdrawal from Syria would signal the end of US intervention in the region, think again. US. Defense Secretary Mark Esper revealed on Saturday that instead of going home, all US troops that were operating in Syria will now be stationed back in Iraq. “The U.S. withdrawal continues apace from northeastern Syria… we’re talking weeks not days…The current game plan is for those forces to re-position into western Iraq,” Esper said. Plans could change though, another official added. Reuters adds that it is unclear if the US troops moving to Iraq will use their new base as a launchpad for future raids into Syria, which would completely defeat the purpose of withdrawing from Syria. Meanwhile, in Iraq, 100 people have been killed in skirmishes since the beginning of the month.
Johnson & Johnson is Out to Get the Babies
In a development reminiscent of the recent protest against Rep. Alexandria Ocasio-Cortez in which a Trump plant advocated the consumption of babies to stop climate change, Johnson & Johnson (NYSE:JNJ) is now under fire for supposed poison in yet another baby product, this time baby food. J&J had barely started a voluntary recall of 30,000 bottles of baby powder when a new study came out showing that 95% of lab-tested baby foods contained traces of at least one of four heavy metals; arsenic, lead, cadmium, and mercury. (Arsenic is technically a metalloid but try to tell that to financial media.) One in four tested baby food products contained traces of all four metals. Nestle (OTCMKTS:NSRGY) is also coming under fire as its brand Gerber is also implicated. In their defense, Nestle said that trace amounts of these metals occur naturally and that it is not feasible to achieve a zero level of these elements even from homemade foods sourced from organic ingredients.
JPMorgan Chase CEO Reveals Details on Bank ‘Big Liquidity Thing’
The “Repocalypse” of mid September could signal the prelude to a much bigger crisis if the Federal Reserve doesn’t “learn from its mistakes”, said Jamie Dimon, CEO of JPMorgan Chase (NYSE:JPM). He did not specify what the Fed should learn and what mistakes it made, however, though since the only thing the Fed can really do is print money, perhaps he is saying that they should do that. Dimon revealed that JPMorgan has about $120 billion at the Fed in excess reserves but can only lend out about $60 billion due to regulatory issues, and therefore they are not fully equipped to step in during times of repo market stress. He said that the US banking system has about $4 trillion in total liquidity, and that this is the big bomb waiting to go off. “If you’re locked up on the ability [to intermediate] because of a multitude of regulations, that might cause more consternation in the market, which you don’t want,” said Dimon. He continued to detail a problem with the “big liquidity thing”, which is technical bank jargon for a “$4 trillion.”
“Banks hit that limit [in the repo market] and couldn’t deploy liquidity. The same issue will happen eventually in the big liquidity thing – the $4 trillion.”
Messages Between two Boeing Pilots Reveal 737 MAX Problems Back in 2016
Text messages between two Boeing (NYSE:BA) 737 MAX pilots from back in 2016 show that the airline was aware of serious problems with the model before either of the two crashes blamed on its safety systems occurred. The two pilots, Mark Forkner and Patrik Gustavsson, exchanged messages about the Maneuvering Characteristics Augmentation System (MCAS), the feature that pushes the plane’s nose down if it detects a stall is imminent due to elevation. Forkner wrote, “The system is running rampant. I basically lied to the regulators (unknowingly).”
Gustavsson replied, “it wasn’t a lie, no one told us that was the case. Forkner said that he “suck[s] at flying , but even this was egregious.” Boeing is reportedly fixing the system by November, hopefully to make it less egregious.
Forkner also said that if Gustavsson quits, he would cry uncontrollably and ask for a job in sales where he can get paid to drink with customers and lie about how awesome Boeing’s airplanes are. Though, this could have been hyperbole.