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FERC certificates several new natural gas pipelines in 2017

Several large natural gas interstate pipeline projects have come online in recent years to support the shifting geography of domestic natural gas production. The Marcellus and Utica shale plays in the Northeast, where production has grown and resources…

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Wikileaks Unveils ‘Vault 7’: “The Largest Ever Publication Of Confidential Documents On The CIA”

Last night Wikileaks announced that it has released an encrypted torrent file which reportedly contains information on the mysterious “Vault 7”, and which we now know is the biggest “collection of material about CIA activities obtained by WikiLeaks.publication in history.” It can be downloaded now at the following URL, and accessed using the password “SplinterItIntoAThousandPiecesAndScatterItIntoTheWinds”

Wikileaks had previously announced that it would hold an 8am Eastern press conference, as part of the unveiling.

ANNOUNCE: WikiLeaks press conference in under five hours at 8am ET / 1pm UTC / 14:00 CET. Streamed live. #askWL

— WikiLeaks (@wikileaks) March 7, 2017

However, there appeared to have been some complications, with Wikileaks tweeting that “the press conference is under attack: Facebook+Periscope video used by WikiLeaks’ editor Julian Assange have been attacked. Activating contingency plans”

Press conf under attack: Facebook+Periscope video used by WikiLeaks’ editor Julian Assange have been attacked. Activating contingency (1/2)

— WikiLeaks (@wikileaks) March 7, 2017

Wikileaks then announced that “As Mr. Assange’s Perscipe+Facebook video stream links are under attack his video press conference will be rescheduled.”

NOTICE: As Mr. Assange’s Perscipe+Facebook video stream links are under attack his video press conference will be rescheduled.

— WikiLeaks (@wikileaks) March 7, 2017

In a separate tweet, Wikileaks has just released the passphrase to decrypt the torrent file: RELEASE: CIA Vault 7 Year Zero decryption passphrase:


RELEASE: CIA Vault 7 Year Zero decryption passphrase:


— WikiLeaks (@wikileaks) March 7, 2017


As a result, since Assange appears to have been unable to launch his previously scheduled press conference, he has gone ahead and issued the press release on Vault 7 Part 1 “Year Zero, which is titled: Inside the CIA’s global hacking force:

Press Release

Vault 7: CIA Hacking Tools Revealed

Today, Tuesday 7 March 2017, WikiLeaks begins its new series of leaks on the U.S. Central Intelligence Agency. Code-named “Vault 7” by WikiLeaks, it is the largest ever publication of confidential documents on the agency.

The first full part of the series, “Year Zero”, comprises 8,761 documents and files from an isolated, high-security network situated inside the CIA’s Center for Cyber Intelligence in Langley, Virgina. It follows an introductory disclosure last month of CIA targeting French political parties and candidates in the lead up to the 2012 presidential election.

Recently, the CIA lost control of the majority of its hacking arsenal including malware, viruses, trojans, weaponized “zero day” exploits, malware remote control systems and associated documentation. This extraordinary collection, which amounts to more than several hundred million lines of code, gives its possessor the entire hacking capacity of the CIA. The archive appears to have been circulated among former U.S. government hackers and contractors in an unauthorized manner, one of whom has provided WikiLeaks with portions of the archive.

“Year Zero” introduces the scope and direction of the CIA’s global covert hacking program, its malware arsenal and dozens of “zero day” weaponized exploits against a wide range of U.S. and European company products, include Apple’s iPhone, Google’s Android and Microsoft’s Windows and even Samsung TVs, which are turned into covert microphones.

Since 2001 the CIA has gained political and budgetary preeminence over the U.S. National Security Agency (NSA). The CIA found itself building not just its now infamous drone fleet, but a very different type of covert, globe-spanning force — its own substantial fleet of hackers. The agency’s hacking division freed it from having to disclose its often controversial operations to the NSA (its primary bureaucratic rival) in order to draw on the NSA’s hacking capacities.

By the end of 2016, the CIA’s hacking division, which formally falls under the agency’s Center for Cyber Intelligence (CCI), had over 5000 registered users and had produced more than a thousand hacking systems, trojans, viruses, and other “weaponized” malware. Such is the scale of the CIA’s undertaking that by 2016, its hackers had utilized more code than that used to run Facebook. The CIA had created, in effect, its “own NSA” with even less accountability and without publicly answering the question as to whether such a massive budgetary spend on duplicating the capacities of a rival agency could be justified.

In a statement to WikiLeaks the source details policy questions that they say urgently need to be debated in public, including whether the CIA’s hacking capabilities exceed its mandated powers and the problem of public oversight of the agency. The source wishes to initiate a public debate about the security, creation, use, proliferation and democratic control of cyberweapons.

Once a single cyber ‘weapon’ is ‘loose’ it can spread around the world in seconds, to be used by rival states, cyber mafia and teenage hackers alike.

Julian Assange, WikiLeaks editor stated that “There is an extreme proliferation risk in the development of cyber ‘weapons’. Comparisons can be drawn between the uncontrolled proliferation of such ‘weapons’, which results from the inability to contain them combined with their high market value, and the global arms trade. But the significance of “Year Zero” goes well beyond the choice between cyberwar and cyberpeace. The disclosure is also exceptional from a political, legal and forensic perspective.”

Wikileaks has carefully reviewed the “Year Zero” disclosure and published substantive CIA documentation while avoiding the distribution of ‘armed’ cyberweapons until a consensus emerges on the technical and political nature of the CIA’s program and how such ‘weapons’ should analyzed, disarmed and published.

Wikileaks has also decided to redact and anonymise some identifying information in “Year Zero” for in depth analysis. These redactions include ten of thousands of CIA targets and attack machines throughout Latin America, Europe and the United States. While we are aware of the imperfect results of any approach chosen, we remain committed to our publishing model and note that the quantity of published pages in “Vault 7” part one (“Year Zero”) already eclipses the total number of pages published over the first three years of the Edward Snowden NSA leaks.

* * *


CIA malware targets iPhone, Android, smart TVs

CIA malware and hacking tools are built by EDG (Engineering Development Group), a software development group within CCI (Center for Cyber Intelligence), a department belonging to the CIA’s DDI (Directorate for Digital Innovation). The DDI is one of the five major directorates of the CIA (see this organizational chart of the CIA for more details).

The EDG is responsible for the development, testing and operational support of all backdoors, exploits, malicious payloads, trojans, viruses and any other kind of malware used by the CIA in its covert operations world-wide.

The increasing sophistication of surveillance techniques has drawn comparisons with George Orwell’s 1984, but “Weeping Angel”, developed by the CIA’s Embedded Devices Branch (EDB), which infests smart TVs, transforming them into covert microphones, is surely its most emblematic realization.

The attack against Samsung smart TVs was developed in cooperation with the United Kingdom’s MI5/BTSS. After infestation, Weeping Angel places the target TV in a ‘Fake-Off’ mode, so that the owner falsely believes the TV is off when it is on. In ‘Fake-Off’ mode the TV operates as a bug, recording conversations in the room and sending them over the Internet to a covert CIA server.

As of October 2014 the CIA was also looking at infecting the vehicle control systems used by modern cars and trucks. The purpose of such control is not specified, but it would permit the CIA to engage in nearly undetectable assassinations.

The CIA’s Mobile Devices Branch (MDB) developed numerous attacks to remotely hack and control popular smart phones. Infected phones can be instructed to send the CIA the user’s geolocation, audio and text communications as well as covertly activate the phone’s camera and microphone.

Despite iPhone’s minority share (14.5%) of the global smart phone market in 2016, a specialized unit in the CIA’s Mobile Development Branch produces malware to infest, control and exfiltrate data from iPhones and other Apple products running iOS, such as iPads. CIA’s arsenal includes numerous local and remote “zero days” developed by CIA or obtained from GCHQ, NSA, FBI or purchased from cyber arms contractors such as Baitshop. The disproportionate focus on iOS may be explained by the popularity of the iPhone among social, political, diplomatic and business elites.

A similar unit targets Google’s Android which is used to run the majority of the world’s smart phones (~85%) including Samsung, HTC and Sony. 1.15 billion Android powered phones were sold last year. “Year Zero” shows that as of 2016 the CIA had 24 “weaponized” Android “zero days” which it has developed itself and obtained from GCHQ, NSA and cyber arms contractors.

These techniques permit the CIA to bypass the encryption of WhatsApp, Signal, Telegram, Wiebo, Confide and Cloackman by hacking the “smart” phones that they run on and collecting audio and message traffic before encryption is applied.


CIA malware targets Windows, OSx, Linux, routers

The CIA also runs a very substantial effort to infect and control Microsoft Windows users with its malware. This includes multiple local and remote weaponized “zero days”, air gap jumping viruses such as “Hammer Drill” which infects software distributed on CD/DVDs, infectors for removable media such as USBs, systems to hide data in images or in covert disk areas ( “Brutal Kangaroo”) and to keep its malware infestations going.

Many of these infection efforts are pulled together by the CIA’s Automated Implant Branch (AIB), which has developed several attack systems for automated infestation and control of CIA malware, such as “Assassin” and “Medusa”.

Attacks against Internet infrastructure and webservers are developed by the CIA’s Network Devices Branch (NDB).

The CIA has developed automated multi-platform malware attack and control systems covering Windows, Mac OS X, Solaris, Linux and more, such as EDB’s “HIVE” and the related “Cutthroat” and “Swindle” tools, which are described in the examples section below.


CIA ‘hoarded’ vulnerabilities (“zero days”)

In the wake of Edward Snowden’s leaks about the NSA, the U.S. technology industry secured a commitment from the Obama administration that the executive would disclose on an ongoing basis — rather than hoard — serious vulnerabilities, exploits, bugs or “zero days” to Apple, Google, Microsoft, and other US-based manufacturers.

Serious vulnerabilities not disclosed to the manufacturers places huge swathes of the population and critical infrastructure at risk to foreign intelligence or cyber criminals who independently discover or hear rumors of the vulnerability. If the CIA can discover such vulnerabilities so can others.

The U.S. government’s commitment to the Vulnerabilities Equities Process came after significant lobbying by US technology companies, who risk losing their share of the global market over real and perceived hidden vulnerabilities. The government stated that it would disclose all pervasive vulnerabilities discovered after 2010 on an ongoing basis.

“Year Zero” documents show that the CIA breached the Obama administration’s commitments. Many of the vulnerabilities used in the CIA’s cyber arsenal are pervasive and some may already have been found by rival intelligence agencies or cyber criminals.

As an example, specific CIA malware revealed in “Year Zero” is able to penetrate, infest and control both the Android phone and iPhone software that runs or has run presidential Twitter accounts. The CIA attacks this software by using undisclosed security vulnerabilities (“zero days”) possessed by the CIA but if the CIA can hack these phones then so can everyone else who has obtained or discovered the vulnerability. As long as the CIA keeps these vulnerabilities concealed from Apple and Google (who make the phones) they will not be fixed, and the phones will remain hackable.

The same vulnerabilities exist for the population at large, including the U.S. Cabinet, Congress, top CEOs, system administrators, security officers and engineers. By hiding these security flaws from manufacturers like Apple and Google the CIA ensures that it can hack everyone &mdsh; at the expense of leaving everyone hackable.


‘Cyberwar’ programs are a serious proliferation risk

Cyber ‘weapons’ are not possible to keep under effective control.

While nuclear proliferation has been restrained by the enormous costs and visible infrastructure involved in assembling enough fissile material to produce a critical nuclear mass, cyber ‘weapons’, once developed, are very hard to retain.

Cyber ‘weapons’ are in fact just computer programs which can be pirated like any other. Since they are entirely comprised of information they can be copied quickly with no marginal cost.

Securing such ‘weapons’ is particularly difficult since the same people who develop and use them have the skills to exfiltrate copies without leaving traces — sometimes by using the very same ‘weapons’ against the organizations that contain them. There are substantial price incentives for government hackers and consultants to obtain copies since there is a global “vulnerability market” that will pay hundreds of thousands to millions of dollars for copies of such ‘weapons’. Similarly, contractors and companies who obtain such ‘weapons’ sometimes use them for their own purposes, obtaining advantage over their competitors in selling ‘hacking’ services.

Over the last three years the United States intelligence sector, which consists of government agencies such as the CIA and NSA and their contractors, such as Booze Allan Hamilton, has been subject to unprecedented series of data exfiltrations by its own workers.

A number of intelligence community members not yet publicly named have been arrested or subject to federal criminal investigations in separate incidents.

Most visibly, on February 8, 2017 a U.S. federal grand jury indicted Harold T. Martin III with 20 counts of mishandling classified information. The Department of Justice alleged that it seized some 50,000 gigabytes of information from Harold T. Martin III that he had obtained from classified programs at NSA and CIA, including the source code for numerous hacking tools.

Once a single cyber ‘weapon’ is ‘loose’ it can spread around the world in seconds, to be used by peer states, cyber mafia and teenage hackers alike.


U.S. Consulate in Frankfurt is a covert CIA hacker base

In addition to its operations in Langley, Virginia the CIA also uses the U.S. consulate in Frankfurt as a covert base for its hackers covering Europe, the Middle East and Africa.

CIA hackers operating out of the Frankfurt consulate ( “Center for Cyber Intelligence Europe” or CCIE) are given diplomatic (“black”) passports and State Department cover. The instructions for incoming CIA hackers make Germany’s counter-intelligence efforts appear inconsequential: “Breeze through German Customs because you have your cover-for-action story down pat, and all they did was stamp your passport”


Your Cover Story (for this trip)
Q: Why are you here?
A: Supporting technical consultations at the Consulate.

Two earlier WikiLeaks publications give further detail on CIA approaches to customs and secondary screening procedures.

Once in Frankfurt CIA hackers can travel without further border checks to the 25 European countries that are part of the Shengen open border area — including France, Italy and Switzerland.

A number of the CIA’s electronic attack methods are designed for physical proximity. These attack methods are able to penetrate high security networks that are disconnected from the internet, such as police record database. In these cases, a CIA officer, agent or allied intelligence officer acting under instructions, physically infiltrates the targeted workplace. The attacker is provided with a USB containing malware developed for the CIA for this purpose, which is inserted into the targeted computer. The attacker then infects and exfiltrates data to removable media. For example, the CIA attack system Fine Dining, provides 24 decoy applications for CIA spies to use. To witnesses, the spy appears to be running a program showing videos (e.g VLC), presenting slides (Prezi), playing a computer game (Breakout2, 2048) or even running a fake virus scanner (Kaspersky, McAfee, Sophos). But while the decoy application is on the screen, the underlaying system is automatically infected and ransacked.


How the CIA dramatically increased proliferation risks

In what is surely one of the most astounding intelligence own goals in living memory, the CIA structured its classification regime such that for the most market valuable part of “Vault 7” — the CIA’s weaponized malware (implants + zero days), Listening Posts (LP), and Command and Control (C2) systems — the agency has little legal recourse.

The CIA made these systems unclassified.

Why the CIA chose to make its cyberarsenal unclassified reveals how concepts developed for military use do not easily crossover to the ‘battlefield’ of cyber ‘war’.

To attack its targets, the CIA usually requires that its implants communicate with their control programs over the internet. If CIA implants, Command & Control and Listening Post software were classified, then CIA officers could be prosecuted or dismissed for violating rules that prohibit placing classified information onto the Internet. Consequently the CIA has secretly made most of its cyber spying/war code unclassified. The U.S. government is not able to assert copyright either, due to restrictions in the U.S. Constitution. This means that cyber ‘arms’ manufactures and computer hackers can freely “pirate” these ‘weapons’ if they are obtained. The CIA has primarily had to rely on obfuscation to protect its malware secrets.

Conventional weapons such as missiles may be fired at the enemy (i.e into an unsecured area). Proximity to or impact with the target detonates the ordnance including its classified parts. Hence military personnel do not violate classification rules by firing ordnance with classified parts. Ordnance will likely explode. If it does not, that is not the operator’s intent.

Over the last decade U.S. hacking operations have been increasingly dressed up in military jargon to tap into Department of Defense funding streams. For instance, attempted “malware injections” (commercial jargon) or “implant drops” (NSA jargon) are being called “fires” as if a weapon was being fired. However the analogy is questionable.

Unlike bullets, bombs or missiles, most CIA malware is designed to live for days or even years after it has reached its ‘target’. CIA malware does not “explode on impact” but rather permanently infests its target. In order to infect target’s device, copies of the malware must be placed on the target’s devices, giving physical possession of the malware to the target. To exfiltrate data back to the CIA or to await further instructions the malware must communicate with CIA Command & Control (C2) systems placed on internet connected servers. But such servers are typically not approved to hold classified information, so CIA command and control systems are also made unclassified.

A successful ‘attack’ on a target’s computer system is more like a series of complex stock maneuvers in a hostile take-over bid or the careful planting of rumors in order to gain control over an organization’s leadership rather than the firing of a weapons system. If there is a military analogy to be made, the infestation of a target is perhaps akin to the execution of a whole series of military maneuvers against the target’s territory including observation, infiltration, occupation and exploitation.


Evading forensics and anti-virus

A series of standards lay out CIA malware infestation patterns which are likely to assist forensic crime scene investigators as well as Apple, Microsoft, Google, Samsung, Nokia, Blackberry, Siemens and anti-virus companies attribute and defend against attacks.

“Tradecraft DO’s and DON’Ts” contains CIA rules on how its malware should be written to avoid fingerprints implicating the “CIA, US government, or its witting partner companies” in “forensic review”. Similar secret standards cover the use of encryption to hide CIA hacker and malware communication (pdf), describing targets & exfiltrated data (pdf) as well as executing payloads (pdf) and persisting (pdf) in the target’s machines over time.

CIA hackers developed successful attacks against most well known anti-virus programs. These are documented in AV defeats, Personal Security Products, Detecting and defeating PSPs and PSP/Debugger/RE Avoidance. For example, Comodo was defeated by CIA malware placing itself in the Window’s “Recycle Bin”. While Comodo 6.x has a “Gaping Hole of DOOM”.

CIA hackers discussed what the NSA’s “Equation Group” hackers did wrong and how the CIA’s malware makers could avoid similar exposure.



The CIA’s Engineering Development Group (EDG) management system contains around 500 different projects (only some of which are documented by “Year Zero”) each with their own sub-projects, malware and hacker tools.

The majority of these projects relate to tools that are used for penetration, infestation (“implanting”), control, and exfiltration.

Another branch of development focuses on the development and operation of Listening Posts (LP) and Command and Control (C2) systems used to communicate with and control CIA implants; special projects are used to target specific hardware from routers to smart TVs.

Some example projects are described below, but see the table of contents for the full list of projects described by WikiLeaks’ “Year Zero”.



The CIA’s hand crafted hacking techniques pose a problem for the agency. Each technique it has created forms a “fingerprint” that can be used by forensic investigators to attribute multiple different attacks to the same entity.

This is analogous to finding the same distinctive knife wound on multiple separate murder victims. The unique wounding style creates suspicion that a single murderer is responsible. As soon one murder in the set is solved then the other murders also find likely attribution.

The CIA’s Remote Devices Branch‘s UMBRAGE group collects and maintains a substantial library of attack techniques ‘stolen’ from malware produced in other states including the Russian Federation.

With UMBRAGE and related projects the CIA cannot only increase its total number of attack types but also misdirect attribution by leaving behind the “fingerprints” of the groups that the attack techniques were stolen from.

UMBRAGE components cover keyloggers, password collection, webcam capture, data destruction, persistence, privilege escalation, stealth, anti-virus (PSP) avoidance and survey techniques.


Fine Dining

Fine Dining comes with a standardized questionnaire i.e menu that CIA case officers fill out. The questionnaire is used by the agency’s OSB (Operational Support Branch) to transform the requests of case officers into technical requirements for hacking attacks (typically “exfiltrating” information from computer systems) for specific operations. The questionnaire allows the OSB to identify how to adapt existing tools for the operation, and communicate this to CIA malware configuration staff. The OSB functions as the interface between CIA operational staff and the relevant technical support staff.

Among the list of possible targets of the collection are ‘Asset’, ‘Liason Asset’, ‘System Administrator’, ‘Foreign Information Operations’, ‘Foreign Intelligence Agencies’ and ‘Foreign Government Entities’. Notably absent is any reference to extremists or transnational criminals. The ‘Case Officer’ is also asked to specify the environment of the target like the type of computer, operating system used, Internet connectivity and installed anti-virus utilities (PSPs) as well as a list of file types to be exfiltrated like Office documents, audio, video, images or custom file types. The ‘menu’ also asks for information if recurring access to the target is possible and how long unobserved access to the computer can be maintained. This information is used by the CIA’s ‘JQJIMPROVISE’ software (see below) to configure a set of CIA malware suited to the specific needs of an operation.



‘Improvise’ is a toolset for configuration, post-processing, payload setup and execution vector selection for survey/exfiltration tools supporting all major operating systems like Windows (Bartender), MacOS (JukeBox) and Linux (DanceFloor). Its configuration utilities like Margarita allows the NOC (Network Operation Center) to customize tools based on requirements from ‘Fine Dining’ questionairies.



HIVE is a multi-platform CIA malware suite and its associated control software. The project provides customizable implants for Windows, Solaris, MikroTik (used in internet routers) and Linux platforms and a Listening Post (LP)/Command and Control (C2) infrastructure to communicate with these implants.

The implants are configured to communicate via HTTPS with the webserver of a cover domain; each operation utilizing these implants has a separate cover domain and the infrastructure can handle any number of cover domains.

Each cover domain resolves to an IP address that is located at a commercial VPS (Virtual Private Server) provider. The public-facing server forwards all incoming traffic via a VPN to a ‘Blot’ server that handles actual connection requests from clients. It is setup for optional SSL client authentication: if a client sends a valid client certificate (only implants can do that), the connection is forwarded to the ‘Honeycomb’ toolserver that communicates with the implant; if a valid certificate is missing (which is the case if someone tries to open the cover domain website by accident), the traffic is forwarded to a cover server that delivers an unsuspicious looking website.

The Honeycomb toolserver receives exfiltrated information from the implant; an operator can also task the implant to execute jobs on the target computer, so the toolserver acts as a C2 (command and control) server for the implant.

Similar functionality (though limited to Windows) is provided by the RickBobby project.

See the classified user and developer guides for HIVE.


* * *


Why now?

WikiLeaks published as soon as its verification and analysis were ready.

In Febuary the Trump administration has issued an Executive Order calling for a “Cyberwar” review to be prepared within 30 days.

While the review increases the timeliness and relevance of the publication it did not play a role in setting the publication date.



Names, email addresses and external IP addresses have been redacted in the released pages (70,875 redactions in total) until further analysis is complete.

  1. Over-redaction: Some items may have been redacted that are not employees, contractors, targets or otherwise related to the agency, but are, for example, authors of documentation for otherwise public projects that are used by the agency.
  2. Identity vs. person: the redacted names are replaced by user IDs (numbers) to allow readers to assign multiple pages to a single author. Given the redaction process used a single person may be represented by more than one assigned identifier but no identifier refers to more than one real person.
  3. Archive attachments (zip, tar.gz, …) are replaced with a PDF listing all the file names in the archive. As the archive content is assessed it may be made available; until then the archive is redacted.
  4. Attachments with other binary content are replaced by a hex dump of the content to prevent accidental invocation of binaries that may have been infected with weaponized CIA malware. As the content is assessed it may be made available; until then the content is redacted.
  5. The tens of thousands of routable IP addresses references (including more than 22 thousand within the United States) that correspond to possible targets, CIA covert listening post servers, intermediary and test systems, are redacted for further exclusive investigation.
  6. Binary files of non-public origin are only available as dumps to prevent accidental invocation of CIA malware infected binaries.


Organizational Chart

The organizational chart corresponds to the material published by WikiLeaks so far.

Since the organizational structure of the CIA below the level of Directorates is not public, the placement of the EDG and its branches within the org chart of the agency is reconstructed from information contained in the documents released so far. It is intended to be used as a rough outline of the internal organization; please be aware that the reconstructed org chart is incomplete and that internal reorganizations occur frequently.


Wiki pages

“Year Zero” contains 7818 web pages with 943 attachments from the internal development groupware. The software used for this purpose is called Confluence, a proprietary software from Atlassian. Webpages in this system (like in Wikipedia) have a version history that can provide interesting insights on how a document evolved over time; the 7818 documents include these page histories for 1136 latest versions.

The order of named pages within each level is determined by date (oldest first). Page content is not present if it was originally dynamically created by the Confluence software (as indicated on the re-constructed page).


What time period is covered?

The years 2013 to 2016. The sort order of the pages within each level is determined by date (oldest first).

WikiLeaks has obtained the CIA’s creation/last modification date for each page but these do not yet appear for technical reasons. Usually the date can be discerned or approximated from the content and the page order. If it is critical to know the exact time/date contact WikiLeaks.


What is “Vault 7”

“Vault 7” is a substantial collection of material about CIA activities obtained by WikiLeaks.


When was each part of “Vault 7” obtained?

Part one was obtained recently and covers through 2016. Details on the other parts will be available at the time of publication.


Is each part of “Vault 7” from a different source?

Details on the other parts will be available at the time of publication.


What is the total size of “Vault 7”?

The series is the largest intelligence publication in history.


How did WikiLeaks obtain each part of “Vault 7”?

Sources trust WikiLeaks to not reveal information that might help identify them.


Isn’t WikiLeaks worried that the CIA will act against its staff to stop the series?

No. That would be certainly counter-productive.


Has WikiLeaks already ‘mined’ all the best stories?

No. WikiLeaks has intentionally not written up hundreds of impactful stories to encourage others to find them and so create expertise in the area for subsequent parts in the series. They’re there. Look. Those who demonstrate journalistic excellence may be considered for early access to future parts.


Won’t other journalists find all the best stories before me?

Unlikely. There are very considerably more stories than there are journalists or academics who are in a position to write them.


The post Wikileaks Unveils ‘Vault 7’: “The Largest Ever Publication Of Confidential Documents On The CIA” appeared first on crude-oil.news.

No Picture

Frontrunning: March 7

  • Trump’s New Travel Ban Replaces Chaos With Calm (BBG)
  • Indian Firms Look to Get Ahead of Immigration Curbs (WSJ)
  • Republicans unveil plan to dismantle Obamacare (Reuters)
  • Republicans Unveil Health Care Bill to Bridge Gaps in Party (BBG)
  • Wiretap Allegation Places Trump Nominee on Hot Seat (WSJ)
  • German, U.S. finance ministers to meet in Berlin next week (Reuters)
  • High Court Says Jury Secrecy Not Guaranteed If Racial Bias Exists (WSJ)
  • Coming Soon to Your Local Mall: Celery and Dog Food (WSJ)
  • Meet the Trader Amassing 3,000 Swimming Pools of Sugar (WSJ)
  • Wahaha boss sees U.S. suffering more in any trade war with China (Reuters)
  • OECD Sees Lots to Worry About in the Global Economic Outlook (BBG)
  • Fillon backers seek unity to revive French presidential bid (Reuters)
  • Exxon’s $20 Billion Spending Plan Points to U.S. Energy Surge (WSJ)
  • Hedge Funds Gird for Stock Selloff as Valuations Rattle Nerves (BBG)
  • Publicity looms as PwC, MF Global go to trial in New York (Reuters)
  • CSX Names Railroad Veteran Hunter Harrison as CEO (WSJ)
  • America’s Predator Retires, But the Reaper Lies in Wait (BBG)
  • ECB doing good job in balancing needs of euro zone members: Schaeuble (Reuters)
  • One of the Rarest Precious Metals Is on Best Run in a Decade (BBG)
  • Why You Should Love America’s Worst Airport (BBG)
  • Carson calls slaves ‘immigrants’ in speech, drawing criticism (Reuters)
  • Saudi Aramco to Pay Shell $2.2 Billion in Refinery Breakup (BBG)
  • Iraqi forces recapture Mosul government buildings, museum (Reuters)
  • Signs of slowdown grow as Britain gears up to trigger EU divorce (Reuters)


Overnight Media Digest


– Exxon Mobil Corp plans to spend about $20 billion on refineries, petrochemical plants and other projects in and around the Gulf of Mexico, Chief Executive Darren Woods said, underscoring how the giants of the global energy industry are turning to America. http://on.wsj.com/2mvQWGd

– RadioShack’s owner is preparing to seek bankruptcy protection for the second time in as many years, according to people familiar with the matter, as the 1,500-store chain looks to further shrink to survive. http://on.wsj.com/2mvUVT2

– South Korean prosecutors provided their most detailed account yet of bribery charges against Samsung Electronics Co Ltd’s de facto leader, Lee Jae-yong, after months-long investigation into a corruption scandal that has shaken the country’s corporate and political elite. http://on.wsj.com/2mvXEMi

– International Business Machines Corp and Salesforce.com Inc agreed to mingle their artificial-intelligence technologies in a bid to boost sales of data-analytics offerings. http://on.wsj.com/2mvNoDA

– After a boardroom battle that lasted less than two months, a rookie activist investor has upended management of CSX Corp., installing a 72-year-old industry maverick as chief executive with a mandate to slash costs and revamp one of the country’s biggest railways. http://on.wsj.com/2mvQibK

– Argentina’s government said it plans to allow the first budget airline to begin flying in the country, opening up one of the biggest untapped domestic airline markets to increased competition. http://on.wsj.com/2mvPinT

– Chobani Inc is shaking up its top ranks, bringing in a Nestlé SA veteran to be its second highest executive and adding traditional industry experience to the fast growing Greek-yogurt brand. http://on.wsj.com/2mvJWsI



BT Group Plc has paid 1.2 billion pounds ($1.47 billion) to control exclusive rights for broadcasting European football in UK.

PSA Group Chief Executive Carlos Tavares has pledged to increase the company’s foothold in UK in the face of a “hard Brexit”.

Transport for London has partnered with Triangle London Developments in order to raise 1.1 billion pounds for the city’s transportation system.

North Sea oil companies will generate positive free cash flow in 2017 for the first time in four years, in a sign of recovery following the oil price crash of 2014, says Oil & Gas UK, which represents operators in the region.

Former Tesla Inc executive Peter Carlsson will on Tuesday announce plans to set up a $4 billion factory in the Nordic countries, using in part metals mined in the region.



– House Republicans unveiled on Monday their long-awaited plan to repeal and replace the Affordable Care Act, scrapping the mandate for most Americans to have health insurance in favor of a new system of tax credits to induce people to buy insurance on the open market. http://nyti.ms/2mv4nG8

– Monday was the seventh straight day that Sean Spicer, President Trump’s press secretary, declined to hold a televised White House press briefing, an unusually long drought for someone whose role is traditionally to be the most visible face of a presidential administration. http://nyti.ms/2mZUIoY

– A farm in southern Tennessee that produces chickens for Tyson Foods was ordered to cull its flock after federal officials on Sunday identified an outbreak of lethal avian influenza there, the first time the disease has struck this year. http://nyti.ms/2lytZmw

– President Trump signed an executive order on Monday blocking citizens of six predominantly Muslim countries from entering the United States, the most significant hardening of immigration policy in generations, even with changes intended to blunt legal and political opposition. http://nyti.ms/2mgjZwU

– A special prosecutor in South Korea asked state prosecutors on Monday to indict President Park Geun-hye on bribery charges, saying that Ms Park and her secretive confidante conspired to take $38 million in bribes from Samsung , one of the world’s largest technology companies. http://nyti.ms/2n97eSj




** Veteran railroader and cost-cutter Hunter Harrison is taking charge at CSX Corp. The Florida-based railway said Monday night Harrison is the company’s new chief executive officer, effective immediately. https://tgam.ca/2mRff2b

** Top North American energy executives made a plea for continued North American free trade at a high-profile conference where Prime Minister Justin Trudeau will deliver a keynote speech later this week. https://tgam.ca/2mhoaIG

** The Liberal Party is claiming full discretion to wade into local races and decide who can run for its nominations even as Prime Minister Justin Trudeau publicly insists the process is open and in the hands of local members, internal documents show. https://tgam.ca/2n0GKmR


** Star Wars merchandise continued to dominate Canada’s toy industry in 2016. Annual sales of toys in Canada topped C$2 billion ($1.49 billion), up 6 percent from 2015 toy sales of $1.9 billion, according to a recent report by market research firm NPD Group. http://bit.ly/2mwOZJn

** Canada has been flagged by a global banking body for “vulnerabilities” tied to credit, property prices, and the prospect of rising interest rates. The Bank for International Settlements said Canada is among the jurisdictions showing early warning indicators for financial crises and domestic banking risks. http://bit.ly/2mwWEYF

** The clock is ticking for Canadian Imperial Bank of Commerce to decide whether to sweeten its offer to acquire PrivateBancorp Inc, as the Chicago-based bank announced the deal will go to a vote before its shareholders in May. http://bit.ly/2lRTZnZ



The Times

Vauxhall workers are likely to take a significant cut to their pensions before any decision about the long-term future of their jobs after the sale of the UK-based automotive group to France’s PSA Group. http://bit.ly/2lVWwOE

BT Group Plc is set to retain its grip on Champions League football, having agreed to pay nearly 1.2 billion pounds ($1.47 billion) over three years in a deal intended to thwart efforts by its arch-rival Sky Plc to take back the rights for the tournament. http://bit.ly/2lVRD8u

The Guardian

Parcelforce couriers who deliver packages for Marks & Spencer, John Lewis and Hamleys can be charged up to 250 pounds a day if they are off sick and cannot find someone to cover their shift. http://bit.ly/2lVRotW

Rupert Murdoch’s attempted takeover of Sky must be thoroughly investigated by Ofcom in light of corporate governance failures surrounding the phone-hacking scandal, Tom Watson, the shadow culture secretary, has said. http://bit.ly/2lVXdI3

The Telegraph

The UK boss of KPMG has lost out in his bid to become global chairman of the accountancy giant. Simon Collins, who threw his hat in the ring for the firm’s top job in December last year, has dropped out of the race in recent weeks. http://bit.ly/2lVRDW8

The North Sea oil industry is in dire need of fresh capital investment to drive activity in the embattled basin beyond 2020. The stark warning emerged from an annual industry-wide report from trade group Oil and Gas UK. http://bit.ly/2lVKBjV

Sky News

Prices in UK are now rising at an annual rate of more than 3 percent in the latest evidence of economic fallout from the EU referendum, according to figures seen by Sky News. http://bit.ly/2lW0ib9

A 1.5 trillion pound superfund should be created from thousands of existing retirement schemes in a bid to alleviate Britain’s mounting pensions crisis, a committee established by the Pensions and Lifetime Savings Association will recommend this week.

The Independent

Britons overwhelmingly oppose Prime Minister Theresa May’s plan to quit the EU with no deal in place if Parliament dares to reject the terms she agrees with Brussels, an exclusive poll has revealed. http://ind.pn/2lVMygy

Asda has been fined 300,000 pounds after inspectors found dead mice and flies at a depot that distributes food to online shoppers in London and Essex. http://ind.pn/2lVXvi1

The post Frontrunning: March 7 appeared first on crude-oil.news.

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Trumpcare: What Happens Next, In One Chart

Overnight, House republicans released their long-awaited proposed legislation to repeal and replace Obamacare, which many have already dubbed Trumpcare. We laid out some of the key changes and proposed provisions as part of the new law which will now be debated, first in committee as soon as Wednesday, and then will seek the approval of the House and Senate. It is here that things may turn more complicated.

In terms of next steps, there are five immediate action items that politicians and pundits will focus on, courtesy of Axios:

  • How will the conservative Republicans react? They’re the ones who threatened to vote against anything less aggressive than the 2015 repeal bill, which this definitely is. Freedom Caucus chairman Mark Meadows said on Hannity last night that “we’re making progress,” but other early signs aren’t good: Rep. Jim Jordan reportedly doesn’t like it, a Republican Study Committee memo calls it a “Republican welfare entitlement,” and Rep. Justin Amash tweeted that it was “Obamacare 2.0.”
  • Will there be a Medicaid backlash? That looked like a serious danger after four GOP senators from states that expanded Medicaid said they wouldn’t support the changes they saw in an early draft. But they softened their tone after a meeting with Senate Majority Leader Mitch McConnell Monday night, Caitlin Owens reports. “It’s moving in the right direction,” said West Virginia’s Shelley Moore Capito, one of the worried senators.
  • How many people would be covered? Normally, the Congressional Budget Office would tell them that. But not this time — because the committees are plowing ahead without waiting for the cost and coverage estimates.
  • No Congressional Budget Office score? Really? They’re going to take a lot of heat from Democrats for that decision — Democrats are already accusing them of trying to hide the likely losses of coverage. The key, though, is how many Republicans are uncomfortable with it too. “That seems problematic.” Sen. Bill Cassidy told Caitlin, adding: “I’m trying to be diplomatic.”
  • Do they actually know how to pay for it? Here’s what House Republicans answer the “how will you pay for it” question in their FAQs: “We are still discussing details, but we are committed to repealing Obamacare and replacing it with fiscally responsible policies that restore the free market and protect taxpayers.”

A bigger picture question is how long will the entire process of repeal and replace take. Conveniently, over the weekend Goldman’s Alec Phillips address this issue. Here are this thoughts:

We think there is a good chance that Congress will resolve the ACA debate in Q2. Activity on the issue will intensify over the next few weeks; House committees may begin to vote on legislation as soon as the week of March 6. This could allow for passage by the full House by late March or early April, if plans remain on track. However, even on that timetable, the Senate is likely to take longer, and the odds that the Senate sends the President a bill prior to the congressional spring recess (April 10-21) seems fairly low. If so, final resolution could be pushed until May, in light of the upcoming debate on the confirmation of Supreme Court Justice nominee Neil Gorsuch and the April 28 expiration of federal spending authority, which will require new spending legislation to avoid a temporary government shutdown.

That’s the best case scenario. Here is the worst-case:

If Republican leaders cannot send the President an ACA bill by April or May, they will face two politically unpalatable options. First, they could continue to press for a solution, delaying consideration of tax reform for an indefinite period. This delay would occur because both proposals are expected to be considered under the “budget reconciliation” process. However, since only one tax bill and one spending bill can be considered under that process in each budget cycle—and ACA repeal legislation is expected to have tax and spending provisions—Republican leaders plan to consider the ACA bill in the FY2017 budget cycle, and to begin the FY2018 budget cycle, including instructions to pass tax reform, once the ACA bill has passed. A second option would be to postpone ACA legislation and move to tax reform, essentially reneging on a campaign commitment. 

Goldman also notes that beyond the timetable, the ACA debate is a reminder that enacting ambitious structural reforms on a partisan basis is difficult, for two reasons. First, shared accountability allows lawmakers to take greater political risks. Over the last few decades, most of the major fiscal reforms were enacted under divided government, as this allows for shared responsibility: the Social Security amendments in 1983, the Tax Reform Act of 1986, and the various deficit reduction measures of the late 1980s and 1990s all come to mind. Of course, this is not always the case; the ACA passed along party lines in 2010.

Second, relying on only Republican votes results in a very thin vote margin, particularly in the Senate. Republicans in that chamber have 52 seats, and will need 51 votes (potentially including Vice President Pence’s tie-breaking vote) to pass ACA or tax legislation through the budget reconciliation process. Although this is often sufficient on issues where there are clearly defined differences between the parties, it makes it quite difficult to pass legislation where lawmakers have more idiosyncratic concerns, as is often the case in tax reform.

As to why a potential Trumpcare slowdown is relevant, the answer is simple: delays would likely lead to substantial delays for the bulk of Trump’s proposed economic agenda, putting prompt implementation of his tax reform in jeopardy, as Phillips explains:

the slow process on ACA repeal signals that tax reform is likely to take longer than initially expected and that the final tax legislation that Congress enacts is likely to be less radical than the early proposals from House Republicans and the Trump campaign. That said, while tax legislation looks likely to be delayed we expect it to move forward eventually.”

Finally, putting it all together, here is Goldman’s chart showing “the long year ahead

The post Trumpcare: What Happens Next, In One Chart appeared first on crude-oil.news.

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North Korea Diplomat Warns Of “Major Escalation That Might Turn Into Actual War”

Yesterday’s snap deployment of the US THAAD anti-missile system in South Korea has led to significant reverberations among the region, with not only North Korea, but also Russia and China slamming the move.

As reported last night, various equipment including 2 launch pads for U.S. missile defense system known as THAAD arrived in South Korea on Monday and will continue to be brought in, Yonhap News said.”Continued provocative actions by North Korea, to include yesterday’s launch of multiple missiles, only confirm the prudence of our alliance decision last year to deploy THAAD to South Korea,” Adm. Harry Harris, commander, US Pacific Command, said in a news release.

US Secretary of Defense James Mattis and South Korean Defense Secretary Han Min-koo spoke over the phone last week and agreed that THAAD should be deployed “ASAP.”

U.S. military releases first pictures of THAAD anti-missile system being deployed to South Korea overnight. pic.twitter.com/wXx1dmddC8

— James Pearson (@pearswick) March 7, 2017

White House Press Secretary Sean Spicer signaled the deployment Monday when he told reporters that the United States is “taking steps to enhance our ability to defend against North Korea’s ballistic missiles, such as through the deployment of a THAAD battery to South Korea.” U.S. defense officials confirmed to NBC News on Monday night that that meant delivery was already under way — not that the United States was simply restating its previous promises to send the system to South Korea sometime in the future.

Both China and Russia lodged protests against the deployment: “We think the US-South Korean decision to deploy the THAAD missile defense system has seriously threatened China’s security interest. For the region, it will also break the strategic balance. So it’s completely understandable to see countries in the region firmly oppose this decision,” Chinese Foreign Ministry spokesman Lu Kang said. “China and other countries have to address our own legitimate security concerns and take necessary measures to safeguard our security interest.”

“Deployment of US missile defense systems in South Korea clearly goes beyond the tasks of deterring ‘the North Korean threat,'” Russian Deputy Defense Minister Anatoly Antonov said in October, according to Russian state-run Tass news agency.

However, it was North Korea which as expected, was the most vocal, and tried to shift blame away from its recent launch of 4 ballistic missiles and redirect attention to the joint US-South Korean drills taking place. As Reuters reports, North Korea faced a chorus of condemnation on Tuesday for its latest ballistic missile tests but declared that ongoing joint U.S.-South Korea military exercises were aimed at conducting a “pre-emptive nuclear attack” against Pyongyang.

Ju Yong Choi, a North Korean diplomat, told the U.N.-sponsored Conference on Disarmament in Geneva that the “massive, unprecedented” joint drills were “a major cause of escalation of tension that might turn into actual war”. 

Robert Wood, U.S. Disarmament Ambassador, retorted that North Korea was a “a pariah, an outlier” that has violated multiple U.N. Security Council resolutions and international law by conducting ballistic missile and nuclear tests.

With the US now ready to fire anti-missile weapons on a moment’s notice out of North Korea, many are concerned that the next launch by North Korea’s irrational ruler may promptly escalate the region to a state of conventional war.

The post North Korea Diplomat Warns Of “Major Escalation That Might Turn Into Actual War” appeared first on crude-oil.news.

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Futures Decline, Europe Slumps After German Industrial Orders Collapse

After a turbulent overnight session on Monday morning, this morning traders settle at their desks to find a relatively calmer environment, with US equity futures down 0.2% to 2,371.75, while European stocks fell for a third consecutive day, and Asian markets which closed mixed (China up, Nikkei down, MXAP up 0.2%). Basic metals continue to slide following another drop in copper as a result of the biggest inventory inflow to LME warehouses in 15 years, coupled with worries about China’s telegraphed slowdown.Some have also pointed out that the market topped just in time for the SNAP IPO, which after crashing yesterday to below its IPO break price of $24, continued to sink in the pre-market this morning.

In addition to hopes about an imminent Fed rate hike shifting to concerns, as reported yesterday JPMorgan warned that hawkish Fed rhetoric has increased the likelihood for a short-term pullback after stocks hit the bank’s year-end target of 2,400 the previous week. The dollar rose modestly as a surge in corporate bond issuance pushed up Treasury yields.

Markets appear to have topped off the relentless post-election surge, and are coming off recent peaks as investors start to contemplate what the upcoming March interest rate increase will mean for risk assets. They also have to contend with overnight headlines out of China where the “Two Sessions” are taking place, and where Premier Li Keqiang warned of larger challenges ahead during his work report to the annual National People’s Congress gathering in Beijing. In Europe, politics has become the main market driver as election campaigns in the Netherlands, France and Germany put the status quo under threat.

“The ‘pothole’ is a political one with far-right parties gaining ground in opinion polls ahead of both a Dutch and French ballots in spring,” Luca Paolini, chief strategist at Geneva-based Pictet, said in a research note. “We are scaling back exposure to European stocks, albeit retaining our overweight stance.”

Germany’s largest lender continued to grab attention and European stocks fell for a third consecutive day on Tuesday, once again dragged down by financials as Deutsche Bank shares slid again on deepening concern about its health after its $8.5 billion cash call. Deutsche shares dropped as much as 3% to a fresh 2017 low. They have lost more than 10% in the last few days since the bank said it would tap investors for $8.5 billion.

Furthermore, a batch of weak corporate earnings reports and the biggest fall in German industrial orders since the depths of the global financial crisis also disappointed investors, setting the tone for a lackluster session in Europe.  German industrial orders slumped 7.4 percent in January, the biggest fall since January 2009 and nearly three times as steep as the 2.5 percent fall expected by economists.

“Weak German industrial orders suggests it’s not a one-way ticket in Europe – there’s been a lot of bullishness around European equities lately but maybe this is a sign it’s not all positive. Deutsche Bank is not helping either,” Neil Wilson, senior market analyst at ETX Capital, told Reuters.

Across the Atlantic, S&P500 futures pointed to a slightly lower open on Wall Street, further cooling off last week’s record highs. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4%, and Japan’s Nikkei closed down 0.2%.

In currencies, the dollar inched higher against a basket of trade-weighted peers. The dollar index rose 0.1 percent to 101.73 mirroring Monday’s slender gain. The Bloomberg Dollar Spot Index added 0.2 percent, headed for its sixth advance in seven days. A rate hike from the Federal Reserve next week is virtually fully priced into financial markets, so the dollar and U.S. bond yields might be vulnerable to a correction lower. But investors saw enough room to push the greenback and yields higher on Tuesday, lifting the 10-year yield for the fifth day in a row back above 2.50 percent and the two-year yield up a basis point to 1.32 percent, on what traders attributed to interest rate locks following another massive corporate issuance session.

The Aussie Dollar has rallied after the RBA left rates on hold, as widely expected. The post meeting statement pointed to a firmly on hold RBA and few expect a change in the cash rate through 2017 or 2018. The pound was the biggest mover on major FX markets, falling nearly a third of one percent against the dollar to a seven-week low of $1.2202. Britain’s House of Lords will on Tuesday try to force the government to give lawmakers a greater say over the terms of Britain’s exit from the European Union and final approval of an eventual deal with the block.

Analysts at Morgan Stanley said on Tuesday they expect the pound to snap back as high as $1.45 by the end of next year. “Sterling looks increasingly cheap in a historical context and our FX strategists (have) recently turned more bullish on the currency, targeting $1.28 for year end and $1.45 by the end of 2018,” they wrote in a note on Tuesday.

The euro was steady at $1.0575 and the dollar was flat against the yen at 113.90 yen. In commodities, U.S. oil CLc1 rose 0.3 percent to $53.55 a barrel, following Monday’s 0.2 percent drop, and Brent crude also rose 0.3 percent to $56.17 LCOc1.

Market Snapshot

  • S&P 500 futures down 0.2% to 2,371.75
  • STOXX Europe 600 down 0.03% to 373.16
  • German 10Y yield fell 2.2 bps to 0.32%
  • Euro down 0.06% to 1.0576 per US$
  • Brent Futures up 0.3% to $56.16/bbl
  • Italian 10Y yield rose 6.5 bps to 2.165%
  • Spanish 10Y yield fell 2.6 bps to 1.702%
  • MXAP up 0.2% to 144.63
  • MXAPJ up 0.5% to 465.42
  • Nikkei down 0.2% to 19,344.15
  • Topix up 0.01% to 1,555.04
  • Hang Seng Index up 0.4% to 23,681.07
  • Shanghai Composite up 0.3% to 3,242.41
  • Sensex down 0.2% to 28,997.87
  • Australia S&P/ASX 200 up 0.3% to 5,761.39
  • Kospi up 0.6% to 2,094.05
  • Brent Futures up 0.3% to $56.16/bbl
  • Gold spot down 0.09% to $1,224.14
  • U.S. Dollar Index up 0.09% to 101.73

Top Overnight News

  • Hellman & Friedman, GIC Buy Allfunds Bank for $1.9 Billion
  • CSX Names Harrison CEO, Warns He’ll Exit Unless Paid $84 Million
  • Fitbit Chief Business Officer to Leave, Samir Kapoor Promoted
  • Copper’s Biggest Storage Rush in 15 Years Jeopardizes Rally
  • Ford Not Planning Job Cuts as it Pares Europe Costs After Brexit
  • Republicans Unveil Health Care Bill to Bridge Gaps in Party
  • WhatsApp Joins Arsenal of Online Luxury Amid Race for Customers
  • German Factory Orders Slump Most Since 2009 on Investment
  • Turkey Imposes Anti-Dumping Levy on Kraftliner Paper From U.S.
  • Dakota Access Pipeline Could See Oil by Week of March 13

Asian equity markets largely shrugged off the broad negative lead from Wall Stret to trade mixed as cautiousness remained ahead of the looming risk events. ASX 200 (+0.3%) recovered from early losses amid strength in healthcare and utilities, although upside was capped as participants awaited the RBA which kept rates unchanged and maintained a neutral tone, while Nikkei 225 (-0.2%) languished after USD/JPY failed to gain a footing above 114.00. Shanghai Comp. (+0.3%) was choppy as mainland sentiment was dampened following another weak PBoC liquidity injection and reports China is looking to slow borrowing using short term money markets, while the Hang Seng (+0.3%) was resilient after several encouraging operating updates. Finally, 10yr JGBs saw mild gains amid a lack of risk appetite in Japan, although upside has been limited following a mixed 30yr JGB auction in which accepted prices were higher and demand fell from prior.

Top Asian News

  • China to Avoid Coal Mining Limits If Prices Remain ‘Reasonable’
  • Japanese Double Bearish Yen Bets as Wall Street Cuts and Runs
  • PAG to Replace Yingde Chairman, CEO If Takeover Is Completed
  • Duterte Backs Environment Chief as Congress Weighs Endorsement
  • Lupin CFO Says $1 Billion M&A War Chest Could Be Just The Start
  • Traders Shun Hedges Before India Vote on Confidence in Modi Win

In European bourses, materials stocks are among the best performers amid a relatively flat session . Midcaps grabbed the attention given the number of earnings in an otherwise quiet session for large caps, with UK listed Intertek are at the top of the FTSE100 leader board after the company’s revenue and dividends both rose. Elsewhere, Paddy Power underperform after an uninspiring earnings update and this comes despite increased revenue past the GBP 1.5bIn mark during a “transformational” year. In Fixed Income markets, the German 2/10Y spread is nearly back to 119bps again after German factory orders fell short of expectation and many analysts are paying credence to the PSPP which has lifted the Shatz after strong buying yesterday.

  • RAI Way Said to Consider Takeover of Berlusconi’s EI Towers
  • U.K. House Price Growth Adds Weight to Predictions of a Slowdown
  • Deutsche Bank Bets on Ex-Goldman Partner in Strategy Revamp
  • EDF Begins $4.2 Billion Share Sale to Bolster Balance Sheet
  • Million Migrants Fleeing Putin Score a Jackpot for Poland
  • Norway Regional Survey Outlook Jumps to Highest in 4 Years
  • Niel’s Iliad Boosts Profit After Luring Users With Discounts

In currencies, despite the range bound USD, there has been some movement in major pairs to keep traders busy ahead of the US payrolls on Friday, as well as (what could be) a lively ECB meeting on Thursday, Both USD/JPY and EUR/USD are still trading inside relatively tight ranges, but with UST yields firm, the former is retesting 114.00 again. For EUR/USD, there is little to get excited about until we retest 1.0500 lower down. German factory orders fell 7.4% compared to a more modest forecast of -2.5%, and this may have assisted the move back towards 1.0550. The Bloomberg Dollar Spot Index added 0.2 percent, headed for its sixth advance in seven days. The euro weakened 0.4 percent to $1.0585, the worst performer among major. The yen was at 113.895 per dollar. Some support is coming through EUR/GBP buying as we continue to probe into offers ahead of 0.8700. Pressure on GBP has been exacerbated by yet another potential hurdle for PM May’s proposed Brexit timetable, as the House of Lords are set to seek a more meaningful vote on the terms of exit. This delay would have been GBP supportive a few months ago, but with the government seemingly undermined, the uncertainty factor has pushed the cross rate higher and Cable below 1.2200 accordingly. 1.2150 the next level of support to note here.

In commodities the big story at present is the recent highs seen in base metals, where the growing stockpiles in China have been garnering greater attention. Copper prices have continued their move below USD2.70 to trade below USD2.65 today, with losses in Zinc and Nickel also impacted given supply issues in all cases (strikes/mine closures). Precious metals are also lower today as they follow in tight correlation to Treasuries. The USD has been a little more reluctant to follow, but enough to pull Gold back towards USD1220 again while Silver is still pressuring the recent lows around USD17.70.  Gold futures slumped 0.1 percent to settle at $1,225.50 an ounce in New York for a fifth day of losses. That’s the longest slump since November. Oil prices still in a range, with compliance and production/inventory levels ahead feeding near term support, but CERA week could prompt some volatility: speakers include Barkindo, Novak and Al-Falih. West Texas Intermediate crude slipped 0.2 percent to settle at $53.20 a barrel. Clashes between armed factions in Libya curbed crude output, while U.S. drilling increased.

Looking at the day ahead, we will get the January trade balance and then the January consumer credit reading in the evening. Away from the data, German Finance Minister Schaeuble is scheduled to speak this morning, while in the UK we are also expecting the House of Lords to complete its scrutiny of the Brexit bill.

* * *

US Event Calendar

  • 8:30am: Trade Balance, est. $48.5b deficit, prior $44.3b deficit
  • 3pm: Consumer Credit, est. $17.3b, prior $14.2b

DB’s Jim Reid concludes the overnight wrap

In terms of markets, yesterday felt like a day you rolled the dice and landed on someone’s property and had to pay a small unwelcome amount of rent after a good run of accumulating cash in the bank. Equities closed on the soft side led by Europe with financials and commodity names in particular having a rough start to the week. Coming off the back of a +1.41% gain last week which was the strongest week this year, the Stoxx 600 closed -0.52% and European banks finished -1.23%. Markets in the US were back peddling from the start although the S&P 500 (-0.33%) did manage to pare back heavier losses into the close. The Dow (-0.24%) did likewise but still closed back below the 21,000 level for the first time since passing it last week. There were similar losses across credit markets with CDX IG about 0.8bps wider and the iTraxx Main 1.5bps wider. Sub-financials in Europe did however outperform on a relative basis, with the iTraxx Sub-Fins index finishing just 0.5bps wider (compared to +1.5bps for iTraxx  Senior-Fins). It was a similar outperformance story in the cash credit market with EUR Fin Subs actually 1bp tighter (using Markit indices), compared to EUR Fin Sen which was just 0.5bps tighter.

On those moves for commodities, while Oil ended up little changed both precious and base metals struggled throughout the day. Gold (-0.77%), Silver (-1.07%), Iron Ore (-1.74%), Copper (-1.00%) and Aluminium (-0.82%) in particular all finished lower. A few potential reasons were discussed but it appears that a combination of the China NPC headlines from the weekend, rising Copper inventories and a stronger US Dollar in the face of geopolitical related headlines all contributed to some degree. The latter concerned the reports of North Korea firing missiles into the Sea of Japan – although in fairness there didn’t appear to be a huge reaction in EM FX or equity markets – while later on in the day we got confirmation that President Trump has signed a new travel order banning the entry of citizens from 6 countries (1 less than the initial January order) into the US for the next 90 days from March 16th. The new order will also see the US Refugee Admissions Program suspended for 120 days.

Elsewhere, all things considered Treasuries had a relatively calm day compared to the Fed-driven excitement of last week. 10y Treasury yields finished +2.2bps higher at 2.500% with the slight weakness reflecting a busy day for corporate issuance with over $22bn of IG sales coming, while short end yields ended little changed. A Fed rate hike next week also consolidated around 96% according to Bloomberg’s calculator. Meanwhile bond markets in Europe were busy digesting the latest French presidential election update. Indeed as hinted by the L’Obs press report over the weekend Juppe left the French elections for a second time as he ruled out a comeback in spite of the fragile nature of Fillon’s campaign. His speech didn’t endorse Fillon’s campaign and the Republicans have to choose soon whether to stick with a candidate who is losing support due to the recent allegations or to consider alternatives who weren’t part of the original run-off or who were earlier beaten. Bloomberg reports they have 10 days to file paperwork if they want to replace Fillon. French 10y yields climbed +2.3bps yesterday versus a -1.5bps fall in the German equivalent. The spread tightened 15.6bps last week and this gave up around a quarter of these gains.

Refreshing our screens this morning now. It’s been a fairly mixed but quiet start in Asia. While the Nikkei (-0.20%) and Shanghai Comp (-0.07%) are posting modest losses, the Hang Seng (+0.42%), Kospi (+0.64%) and ASX (+0.27%) are all firmer. In FX the Aussie Dollar has rallied +0.64% after the RBA left rates on hold, as widely expected. Our economists in Australia believe that the post meeting statement point to a firmly on hold RBA and expect no change in the cash rate through 2017 or 2018.

Moving on. The latest ECB CSPP data came out yesterday. The average daily run rate in the week to March 3rd was €339mn, a bit below the average of €365mn since the scheme started. In February 8.8% was bought in the primary market, lower than the 13.5% ratio since the scheme commenced and the lowest ratio since the summer. It’s too early to say whether the ECB are starting to prepare for taper but there seems to have been a reduction recently from peak purchases. We can’t extrapolate too much as there are many who think they’ll initially taper more on the government side rather than the corporate side. Anyway one to keep an eye on over the weeks ahead.

With regards to the rest of the data yesterday, in the US factory orders in January printed at +1.2% mom which was marginally ahead of consensus expectations for a +1.0% rise in orders. The final revisions to January durable and capital goods orders were also released. Headline durable goods orders were confirmed at +2.0% mom which was up two-tenths from the initial estimate while core capex orders were revised up three-tenths to -0.1% mom. Interestingly the two most followed GDP trackers have diverged significantly for Q1 GDP estimates.

The Atlanta Fed is now at 1.8% while the NY Fed is at 3.1%. It’s worth noting that over the past 4 quarters the NY Fed has tended to be the more accurate of the two although both have shown a tendency to have large errors during various quarters. Elsewhere and wrapping up, yesterday in Europe the most notable release was the Sentix investor sentiment reading for the Euro area which showed the index as rising 3.3pts in February to 20.7 and in the process reaching a new post financial crisis high. So a sign perhaps that improving data is overshadowing any potential political concerns for now.

Looking at the day ahead, this morning in Europe the early data comes from Germany where the January factory orders data is due. Shortly after that we’ll get the February Halifax house prices data in the UK before we then get the final Q4 GDP print for the Euro area. No change from the initial +0.4% qoq estimate is expected. This afternoon in the US we will get the January trade balance and then the January consumer credit reading in the evening. Away from the data, German Finance Minister Schaeuble is scheduled to speak this morning, while in the UK we are also expecting the House of Lords to complete its scrutiny of the Brexit bill.

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Exxon to invest $20 billion on US Gulf Coast refining projects

Exxon Mobil said on Monday it would invest $20 billion through 2022 to expand its chemical and oil refining plants on the U.S. Gulf Coast.

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China FX Reserves “Unexpectedly” Rebound Above $3 Trillion, First Increase Since June

With China’s “Two Sessions” currently taking place, and Beijing hard-pressed to report positive economic data (including banning the sale of stocks by some mutual funds according to Bloomberg), it was perhaps not surprising that overnight China reported that its foreign-currency reserves “unexpectedly” rose in February for the first time since June 2016, halting a seven-month decline, rebounding over the psychological $3 trillion level controls on capital outflows and a rally in the yuan. China’s foreign reserve holdings increased by $6.9 billion to $3.005 trillion last month the PBOC reported, exceeding the consensus estimate for a $30 billion decline to $2.969 trillion. According to Goldman calculations, after adjusting for currency valuation effects, reserves rose by about $19 billion.

Among the factors cited for the rebound in the world’s biggest FX reserve holdings are stronger economic growth, stricter capital controls and a stabilizing yuan. China’s reserves have shrunk by $1 trillion from a peak of $4 trillion in 2014 as Beijing has struggled to slow yuan depreciation. Following the positive data, the offshore yuan extended gains to rise as much as 0.17%, although it has since given up all gains and was little changed at 6.8975. With pressure on reserves easing in recent months, the onshore yuan has advanced 0.7% this year amid a decline in the Bloomberg Dollar Spot Index.

“The rebound is a surprise as there should have been a negative valuation effective given that the dollar gained in February,” said Zhou Hao, an economist at Commerzbank AG in Singapore. “The increase shows the PBOC probably hasn’t been doing much spot market intervention last month, given market sentiment was stable and onshore yuan trade volume has been lower than usual.”

“Strict capital controls have taken effect, as it has reduced outflows and helped market sentiment on the yuan,” Nomura’s Zhao Yang told Bloomberg. “Reserves still face pressures, as the nation won’t want to keep tight capital controls in place for the medium term as they create difficulties for firms and thus weigh on the economy.”

In recent months Chinese authorities have boosted efforts to prevent outflows since late 2016, as the yuan headed for the biggest annual loss in more than two decades. Measures include ordering banks to stop processing cross-border yuan payments until they balance inflows and outflows, and even cracking down on bitcoin. Additionally, China’s residents face tougher reporting requirements when they want to convert yuan into foreign currency.

“The fact that they showed the world that the reserves are stabilizing at a fairly high number is an important signal,” said Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis SA in Hong Kong. “The realization that the leadership wants us to have is that China is out of the woods, it’s not losing reserves, and we’re back to normal.”

In a statement posted by China’s FX regulator, the State Administration of Foreign Exchange, it said that outflow pressures are expected to ease and reserves may gradually stabilize, however it added that global financial market uncertainties remain.

Meanwhile, in a note from Goldman, the bank warned that estimates of overall valuation effects can be noisy, pointing out that SAFE indicated that the market value of the reserve portfolio increased in Feb, which counteracted the negative currency valuation effect. That said, it is unclear exactly how large these effects were in Feb (and it has not always been obvious how the portfolio valuation effects are recorded). Therefore, as Goldman has traditionally cautioned, another dataset, the “PBOC’s FX position” (usually released in the middle of the month), will give us a much better sense of the PBOC’s FX sales net of valuation effects, as this dataset shows the PBOC’s FX assets recorded at book value. On several occasions in the past year this dataset has suggested a meaningfully different amount of FX sales by the PBOC than implied by the reserve data.

For reference, in January the PBOC’s FX position dataset showed a decline of US$30bn, even after a strong trade surplus of US$33bn (including merchandise and service trade). The trade surplus was likely not nearly as strong in Feb due to Chinese new year seasonality—in other words, the capital account dynamics would have needed to undergo a significant reversal for the PBOC to accumulate (rather than de-accumulate) FX assets in Feb.

In general, reserve data provide only partial information on the FX flow situation, and readers should await further SAFE and PBOC data to assess the underlying trend. In terms of the macro backdrop, the relatively subdued USD, which helped to stabilize USD/CNY even as the CNY continued to weaken moderately against the CFETS basket (by 0.4% in Feb, and cumulatively by 1% since end-‘16), has likely supported CNY sentiment. The various capital flow management measures introduced in the last few months have likely also helped slow outflows.

Looking farther ahead, recent policy signals and news suggest that the process of getting domestic bonds included in global bond indices has gathered pace. The amount of bond inflows following the SDR inclusion decision and more liberalized access to the domestic market by central bank-type investors has been fairly modest (about US$30bn over the past year) and may be less than hoped for. This has likely made the authorities keener to attract more bond inflows from private investors through the inclusion in the major global bond indices, which could potentially bring in significant foreign investment. This may not materialize any time soon and the precise timing is hard to predict, but continued news on this front bears close watching in the coming months.

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Last Night On Tucker: House Intel Committee Member Jim Himes (D-CN) Justifies Spying On Trump Campaign

Last night, Tucker Carlson debated a rapidly blinking Rep. Jim Himes (D-CT) – a member of the House Intelligence Committee, on claims that former President Obama ordered a wiretap of Donald Trump’s administration during the election. Tucker went into the interview giving Himes the respect of an unfurrowed brow, which did not last long. While the entire interview was an insightful sparring match (entire interview here), a particularly interesting moment came when Himes effectively laid out the legal mechanism which would justify spying on members of Trump’s campaign, including incoming NSA director Mike Flynn – the fruits of which led acting Attorney General (and Obama appointee) Sally Yates warning the Trump administration that Flynn had not been truthful about his conversations with Russia, and could possibly be blackmailed. This knowledge, and the leak of the story leading up to Flynn’s eventual resignation, could only have been obtained through covert surveillance.

In a response to Tucker – Himes suggested that since it’s routine for US Intelligence to monitor foreigners “like the Russian ambassador” who will sometimes “be talking to US persons,” it’s reasonable to expect that in the normal course of surveillance of foreigners, Americans might be monitored as well.

Tucker Carlson debates House Intel Committee member Jim Himes (D-CT) – who justifies spying on Trump campaign. https://t.co/jSh60OMmqp pic.twitter.com/spstxToZ9k

— ZeroPointNow (@ZeroPointNow) March 7, 2017

This was a half-baked answer considering the well known scope and use of the surveillance in question as political weapons – leaked to various news organizations and spun into half-truths and wild accusations in an attempt to delegitimize Donald Trump. At the end of this political rabbit hole, the FBI, NSA, and the CIA have all said that there was no evidence of collusion between the Trump campaign and the Russians.

On the topic of survezillance:

The Tucker interview goes hand in hand with a well reasoned series of tweets made over the weekend by Michael Doran – Senior Fellow at the Hudson Institute and an expert on international politics of the Middle East. Doran laid out quite an interesting scenario – suggesting that while Trump’s phone may not have specifically been targeted, the Intel community may have indirectly targeted him similar to a “dolphin “accidentally” caught in a tuna net.” (#15 below). Doran also summed his tweets up in a WSJ article:

In mid-January both the BBC and McClatchy reported that on Oct. 15 a Foreign Intelligence Surveillance Act court approved an investigation into Russian activities in the U.S. that focused on nameless Trump associates—three of them, according to the BBC. Also in mid-January, the New York Times reported on “a broad investigation into possible links between Russian officials and associates of [Mr.] Trump.”


Stipulating that they were, the government would find itself monitoring all of Mr. Trump’s calls with one of his political advisers, his lawyer and his national security adviser. Transcripts of those intercepts would be available to the Obama administration’s senior national-security officials. In this scenario, the tapping of Mr. Trump’s calls would be extensive –WSJ

Below is the first tweet in case you want to jump over to Twitter and follow along – or scroll down and keep reading:

1. Why I Take Trump’s Claims of Wiretapping Seriously: An Essay in 30 Tweets

— Mike (@Doranimated) March 5, 2017

Why I Take Trump’s Claims of Wiretapping Seriously: An Essay in 30 Tweets

  1. All you bright bulbs say that Trump’s claim that Obama tapped his phone is “baseless.”
  2. He got the idea, you snicker, from an old Breitbart article—or from talk radio. Ha ha ha ha!
  3. I really do wish Trump hadn’t used a tweet storm to make his accusation. It’s grave & deserves a more solemn & judicious presentation.
  4. And I don’t know whether he’ll succeed in backing it up. But I bet he does, at least so as to win the political argument—and here’s why.
  5. You bright bulbs point to Clapper’s statement and coo, “No wiretapping of Trump took place!”
  6. This, however, is an overly literal interpretation of “wiretapping Trump.”
  7. The BBC reports that on 15 Oct a FISA court approved an investigation focusing on 3 Trump associates:
  8. Let’s speculate that this investigation allowed the NSA to monitor all calls of all 3 individuals.
  9. This allows us to build a scenario in which both Trump’s harsh accusation & Clapper’s categorical denial are true.
  10. Who might the 3 under investigation be? Candidate #1 would be Roger Stone, Trump’s informal political advisor:
  11. My 2nd candidate: Michael Cohen, Trump’s lawyer, who helped generate a pro-Russian peace plan for Ukraine.
  12. 3rd on my list: General Mike Flynn, who unwisely took money from the Russian government in 2015.
  13. All 3 had some connection or another w/Russia, so a request for a national security wiretap on them is a plausible possibility.
  14. As a result, Trump’s calls w/his pol advisor, lawyer, & Natsec advisor would be monitored. That’s many calls covering a lot of ground!
  15. Yet Clapper’s denial stands, b/c Trump’s phone wasn’t explicitly targeted. He was just a dolphin “accidentally” caught in a tuna net.
  16. You bright bulbs’ll stand your ground on the technical claim that Trump’s phone wasn’t tapped, but politically it’s a losing argument.
  17. And you’ll also say, “A cardinal rule of the Obama admin” was to leave FISA requests to the DOJ:
  18. Leave them to Loretta Lynch, you say? Someone about as divorced from politics as this video would suggest:
  19. Come on. It’s easy to imagine Obama winking & nodding to Lynch, or sending a trusted friend to whisper a few thoughts in her ear.
  20. “You have no evidence to back up that scurrilous claim!” you will scream.
  21. To which I must confess, you’re absolutely right. I don’t. I’m totally speculating. Point to you!
  22. And while I’m in retreat, let me also concede that Lynch’s meeting w/Bill Clinton was accidental & innocuous.
  23. But Trump still wins before the court of public opinion, b/c you just admitted 3 key things:
  24. (A) That Loretta Lynch got the NSA to tap hours and hours of Trump’s calls.
  25. (B) That she did so just 3 weeks before the election! And (C) That her “natsec investigation” turned up zero, zilch, nada & niente.
  26. But meanwhile, it “accidentally” generated copious leaks fueling the sinister accusation that Trump is Putin’s Manchurian candidate.
  27. I predict that if a Lynch “investigation” anything like this scenario did in fact occur, fair-minded people will side with Trump.
  28. Rachel Maddow will love your arguments, but they will only convince registered Dems, and not even all of them.
  29. This scenario is speculative. We don’t know the facts. They might yet prove you right. But the ground you’re on is weaker than you know.

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