|Bid||0.00 x 1100|
|Ask||0.00 x 1100|
|Day's range||42.39 - 43.41|
|52-week range||26.19 - 45.86|
|Beta (3Y monthly)||0.19|
|PE ratio (TTM)||14.29|
|Earnings date||24 Oct 2019|
|Forward dividend & yield||N/A (N/A)|
|1y target est||42.12|
(Bloomberg) -- Facebook Inc. Chief Executive Officer Mark Zuckerberg is visiting Washington as the company confronts growing scrutiny over its privacy and marketplace practices.Zuckerberg will “meet with policy makers and talk about future internet regulation,” Facebook spokesman Andy Stone said in a statement.Senator Mark Warner, a Virginia Democrat and the ranking member of the Intelligence Committee, and other senators had dinner with Zuckerberg in Washington, Rachel Cohen, a Warner spokeswoman, said in a statement released Wednesday night.“The participants had a discussion touching on multiple issues, including the role and responsibility of social media platforms in protecting our democracy, and what steps Congress should take to defend our elections, protect consumer data, and encourage competition in the social media space,” Cohen said.Her statement did not identify the other senators, but said that Warner had helped organize the dinner “at Facebook’s request.”Zuckerberg is scheduled to meet with Senator Maria Cantwell of Washington State, according to a person familiar with the plans. Cantwell is the top Democrat on the Senate Commerce Committee, which is weighing privacy legislation.Zuckerberg will also meet with House Intelligence Chairman Adam Schiff of California, said another person familiar with the matter, who on Wednesday night declined to say exactly when the meeting would take place or provide additional information.Senator Jerry Moran, a Kansas Republican, is also working on scheduling a get-together with Zuckerberg, a senior Senate aide said.Zuckerberg is not scheduled to meet with House Speaker Nancy Pelosi, according to a person familiar with the matter. Democrats castigated the company earlier this year after it failed to remove a doctored video of Pelosi. She has snubbed at least two meetings with him, Bloomberg has reported.Zuckerberg’s Washington visit comes as Facebook is battling criticism from lawmakers over its handling of users’ personal information, the proliferation of violent content and election interference by foreign operatives. The company is also facing antitrust investigations of its business practices from federal, congressional and state authorities.On Wednesday, lawmakers from the Senate Commerce Committee grilled executives from Facebook, Twitter Inc. and Alphabet Inc.’s Google over the spread of extremism and violence on digital platforms.Separately, the Federal Trade Commission has opened an antitrust probe of the company, and New York is leading a coalition of states in a wide-ranging investigation of the social media giant. In July, Facebook agreed to pay $5 billion to settle FTC allegations it violated users’ privacy.The House Judiciary antitrust subcommittee is also investigating competition issues in the technology industry. Last week, the panel sent a letter to Facebook seeking information about its acquisitions as well as communications from Zuckerberg, Chief Operating Officer Sheryl Sandberg, former general counsel Colin Stretch and policy chief Kevin Martin.The company is trying to win over lawmakers threatening to stymie its launch of a new digital currency called Libra that its executives say can lower costs and expand access to the banking system in developing countries. The project faced bipartisan scorn during congressional hearings in July, even leading to legislative proposals that would kill it.(Updates with Warner dinner, starting in third paragraph.)\--With assistance from Billy House, Joe Light and Ben Brody.To contact the reporters on this story: Naomi Nix in Washington at firstname.lastname@example.org;Rebecca Kern in Arlington at email@example.comTo contact the editors responsible for this story: Sara Forden at firstname.lastname@example.org, John HarneyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Emmanuel Macron and his dinner host Giuseppe Conte made a warm display of unity in Rome, pledging to work together to boost flagging economic growth across Europe and share handling of migrant flows to turn the page on recent clashes between their two countries.The French leader, after initial talks at Conte’s official residence in the 16th-century Palazzo Chigi, described the France-Italy friendship as indestructible and underscored “our will to work together for the European project.”“Sometimes we disagree, we can quarrel, we can sometimes fail to understand each other, but we always find each other again,” Macron told reporters Wednesday, flanking Conte before a working dinner at the latter’s apartment.Macron, who is gradually replacing Germany’s Angela Merkel as Europe’s leading player, is seeking warmer ties with Conte who now heads a more centrist, pro-European coalition. Conte’s populist deputies in the previous administration had picked on France before European parliamentary elections, prompting Macron in February to briefly recall his ambassador to Rome.The newfound comity even extended into the potentially fraught terrain of the menu: The leaders’ meal twinned their nations’ cuisine, with dishes including salad with codfish and foie gras, marinated amberjack with olive paste typical of Provence and pesto, and croissant-flavored ice-cream.‘Historic Ties’Macron underscored his push for economic and fiscal stimulus in the European Union, paying tribute to the “courage and clear-sightedness” of the latest moves by Mario Draghi, president of the European Central Bank.“Monetary policy since 2012 has done the maximum it could do to preserve the EU situation, avoid deflation and avoid the worst,” Macron said. “It is now for the EU heads of state and governments to take their responsibility in their own budgets and at the EU level decisions for a real policy of stimulus and interior demand.”The French leader warned EU countries that coordinated stimulus action is needed as the continent is in “stagnation.”Read more: ECB Policy Makers Push Back Against Attacks on Draghi’s StimulusConte, who is seeking more flexibility and more room for investments for the 2020 budget while at the same time avoiding tensions with the European Commission, said he and his guest awaited efforts from “all Europe” to relaunch investments and “improve European economic governance which is indispensable for stability and growth.”“The historic ties of France and Italy are at the foundation of the European project, and we have a common responsibility to relaunch Europe with more growth, more jobs,” Conte said.‘Deeply Believe’The Italian leader is also seeking French support to cope with migrant flows from across the Mediterranean. The Italian premier is under constant pressure from Matteo Salvini of the rightist League, who had ordered ports closed to migrant ships when he served as Conte’s deputy in the previous coalition with the anti-establishment Five Star Movement.Conte won an early victory with Macron’s backing for the automatic redistribution to EU states of migrants landing in Italy, although whether this should apply to both asylum-seekers and economic migrants is still under discussion. Italy wants possible fines for members who refuse.Macron, who has made limiting illegal immigration a priority to shore up his electoral base, said he wants to change an agreement that says asylum-seekers must make their request in the first EU country of arrival. “I deeply believe the response to the subject of immigration is not in looking inward or in nationalist provocations, but in building effective European solutions,” Macron said.The two leaders agreed to hold a bilateral summit, including cabinet ministers, in Italy early next year.To contact the reporters on this story: John Follain in Rome at email@example.com;Helene Fouquet in Paris at firstname.lastname@example.orgTo contact the editors responsible for this story: Ben Sills at email@example.com, ;Flavia Krause-Jackson at firstname.lastname@example.org, Alessandro Speciale, Robert JamesonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Cboe Global Markets Inc.’s BZX exchange has withdrawn a proposal to the U.S. Securities and Exchange Commission to list and trade shares of a Bitcoin investment vehicle.A proposed rule change that would have allowed BZX to list and trade SolidX Bitcoin Shares issued by the VanEck SolidX Bitcoin Trust was withdrawn by the exchange on Sept. 13, according to an SEC filing.Gabor Gurbacs, director of digital asset strategy at VanEck Associates, tweeted in response to CoinDesk’s earlier report of the withdrawal that the firm continues “to work closely with regulators and market participants to get one step closer every day” to a Bitcoin exchange-traded fund.“This is not bad news in my view just a different process,” Gurbacs said later in response to questions from Bloomberg. The institutionally oriented VanEck SolidX 144A Bitcoin product “is a good step toward a full publicly traded ETF,” he said.A Cboe spokesperson told Bloomberg that “after careful consideration in cooperation with our esteemed client, we have decided to withdraw our filing with the SEC to list and trade shares of the VanEck SolidX Bitcoin Trust. We continue to believe there are opportunities for Cboe and our clients in the broader cryptocurrency market, and remain open to pursuing ETP and derivative listings and trading.”Earlier this month, VanEck and SolidX Management LLC said in a statement that they had found a way to offer a product for some large investors by using Rule 144A of the Securities Act of 1933. The VanEck SolidX Bitcoin Trust 144A Shares are the first Bitcoin product for institutions that is cleared and features the same creation-and-redemption process common with traditional ETFs, according to the statement.The SEC had in August delayed a decision on approving the Bitcoin ETFs, extending until Oct. 18 the period to consider whether listing rules could change to allow the funds to start trading. Other applications for approval have also been delayed. The agency rejected an exchange’s request last year to list a Bitcoin ETF backed by Tyler and Cameron Winklevoss.Bitcoin dropped 0.3% to $10.169 as of 7 a.m. in Hong Kong. The digital token has almost tripled this year, after tumbling 74% in 2018 and surging 1,400% in 2017.(Adds Cboe comment and updates market levels.)\--With assistance from Alastair Marsh and Vildana Hajric.To contact the reporter on this story: Joanna Ossinger in Singapore at email@example.comTo contact the editors responsible for this story: Christopher Anstey at firstname.lastname@example.org, ;Dave Liedtka at email@example.com, Andreea Papuc, Cormac MullenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Federal Reserve policy makers lowered their main interest rate for a second time this year and Chairman Jerome Powell said that “moderate” policy moves should be sufficient to sustain the U.S. expansion.“We took this step to help keep the U.S. economy strong in the face of some notable developments and to provide insurance against ongoing risks,” Powell told reporters Wednesday after the Fed cut its benchmark rate by a quarter percentage point to a range of 1.75% to 2%. “Weakness in global growth and trade policy have weighed on the economy.”Treasury yields rose, the dollar rallied and U.S. stocks reversed earlier losses after Powell made clear that policy makers did not expect to need deep rate cuts.The chairman has been under relentless public pressure to reduce rates from President Donald Trump, who returned to Twitter within minutes of the FOMC’s announcement to say policy makers had failed again by not cutting more and had “No ‘guts,’ no sense, no vision!”The Federal Open Market Committee decision didn’t alter expectations among futures traders for another 25 basis-point cut this year.Powell left the door open to “a more extensive sequences of cuts” if needed, but stressed this was not what officials expect. Instead, he described the situation as one “which can be addressed and should be addressed with moderate adjustments to the federal funds rate.”Fed officials maintained their pledge to “act as appropriate to sustain the expansion.”“Although household spending has been rising at a strong pace, business fixed investment and exports have weakened,’’ the FOMC said.Updated quarterly forecasts showed officials split over the need for rate cuts this year. Five didn’t want to move. Five saw a quarter-point reduction warranted, while seven saw 50 basis points of easing needed by year-end -- half of which was delivered on Wednesday.The Fed board also took a separate step to calm this week’s strains in money markets and avert harm to the economy, lowering the interest rate on excess reserves to 1.8%. Earlier Wednesday the Fed injected $75 billion of liquidity to ease a crunch, and key rates pulled back from elevated levels.Global RiskPowell is trying to sustain the expansion despite slowing global growth that’s been chilled by uncertainty over U.S. trade policy, fanning fears of recession. Manufacturing has been hit hard, particularly in Germany, which prompted the European Central Bank to ease policy last week.Click here for probabilities on future Fed rate cutsKansas City Fed chief Esther George and Boston’s Eric Rosengren dissented against the reduction, as they did in July, preferring to keep rates unchanged. There was a new dissent by James Bullard of St. Louis, who preferred a half-point cut.Powell’s committee is split between those who don’t think cuts are needed because domestic spending is solid and those worried by global weakness and inflation running persistently under their 2% goal.“This statement seems carefully crafted to be silent on that question,” said David Wilcox, a former senior Fed economist and now at the Peterson Institute for International Economics in Washington. “There is no clue here as to whether this is the end of the line.”Fed officials also released new quarterly forecasts. There were few changes in the central bank’s median economic projections since the June policy meeting. Gross domestic product growth and unemployment were revised up 0.1 percentage point for 2019, while the forecasts for the preferred inflation gauges remained unchanged.The Fed’s back-to-back rate cuts reverse the tightening last year and follow a wave of easing this year by other central banks. In addition to the ECB, some analysts expect the Bank of Japan to act at its meeting Thursday.U.S. central bankers, who added the reference to exports, worry that uncertainty over trade is denting investment and could slow hiring. Private-sector job growth has slowed from last year.At the same time, consumption -- which accounts for most of the economy -- appears strong with retail sales rising 0.4% in August and sentiment indicators relatively solid. Financial conditions have remained easy since the July meeting, although the dollar has resumed gains against major currencies.\--With assistance from Katherine Greifeld, Nancy Moran, Matthew Boesler, Christopher Condon, Katia Dmitrieva, Reade Pickert and Vince Golle.To contact the reporters on this story: Craig Torres in Washington at firstname.lastname@example.org;Rich Miller in Washington at email@example.comTo contact the editors responsible for this story: Alister Bull at firstname.lastname@example.org, Jeff Kearns, Ben HollandFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- In some ways President Donald Trump’s new national security adviser, Robert O’Brien, seems like the opposite of the man he will replace, John Bolton.His current job in government is special envoy for hostage affairs, meaning he has had to negotiate with the sorts of rogues Bolton shunned. Last year he helped bring home the American pastor Andrew Brunson, who was imprisoned by the Turkish government. Earlier this year he negotiated the release of U.S. citizen Danny Burch from Yemen. In April he said that a necessary (though insufficient) step for Syria to rejoin the international community would be for it to help find and free the journalist Austin Tice.O’Brien’s personal style — quiet and lawyerly — also differs from Bolton’s pugnacity. A senior administration official told me that O’Brien pitched himself to the president and his top advisers as someone who would make the National Security Council functional again and largely keep his head down. Secretary of State Mike Pompeo, who was Bolton’s biggest rival in Trump’s cabinet, endorsed him for the post because of his understated approach.But O’Brien’s low-key style should not be confused with a softness on foreign policy. Trump disagreed with Bolton on Iran, Afghanistan and North Korea. His new national security adviser has a long history of conventional Republican Party hawkishness on all of those issues. He advised Mitt Romney’s 2012 presidential campaign, and in 2016 worked with Governor Scott Walker and Senator Ted Cruz.And way back in 2005, the so-called “anti-Bolton” worked for the man himself when Bolton was U.S. ambassador to the United Nations.To get a flavor for O’Brien’s worldview, it’s worth picking up a collection of his essays published in 2016. The title gives a good indication of what’s inside: “While America Slept: Restoring American Leadership to a World in Crisis.” Bolton himself blurbed the book, saying it should be “required reading” for all 2016 presidential candidates.It’s easy to see why Bolton liked it. O’Brien’s essay on the 2015 Iran nuclear deal is titled, “Obama’s Folly.” In the preface, he writes about his experience in Afghanistan when “some young Afghan patriots, who chose to side with us after the 9/11 attacks, asked me if we would abandon their country as we had abandoned Iraq.” O’Brien identifies “Russian aggression” as one of the primary threats Obama’s successor must address to restore U.S. leadership in the world.This is good news for America. There was a real risk that Trump would choose a national security adviser who would indulge the president’s worst instincts on foreign policy, arranging for flashy summits with the world’s most loathsome leaders. That is the kind of guidance he gets from people like Senator Rand Paul, who has tried to be an intermediary for Trump with Russia and Iran. And it’s the kind of advice he hears from Tucker Carlson of Fox News, who often sounds like a progressive activist when railing against neoconservatives.The danger, of course, is that Trump is capable of changing his mind in a flash. A year ago, it was Bolton who had the president’s ear and trust. A year later, Trump announced his firing on Twitter. Now it will be O’Brien’s turn to advise a mercurial president on how to lead a world in crisis.To contact the author of this story: Eli Lake at email@example.comTo contact the editor responsible for this story: Michael Newman at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Eli Lake is a Bloomberg Opinion columnist covering national security and foreign policy. He was the senior national security correspondent for the Daily Beast and covered national security and intelligence for the Washington Times, the New York Sun and UPI.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Donald Trump’s selection of top hostage-affairs official Robert O’Brien as his new national security adviser sends a clear signal the president is seeking to turn the page from the confrontation and controversy that defined John Bolton’s tenure in the job.Bolton regularly picked ideological fights with cabinet secretaries and the president over the approach to hotspots such as Afghanistan and Iraq. O’Brien, meanwhile, is a former corporate litigator and lawyer with the military’s Judge Advocate General’s Corps who is seen as an ally of Secretary of State Michael Pompeo. People who know both men say O’Brien will help mediate disputes, not create them.“I don’t think he’s looking to slam his fist on the table and yell at a four-star general,” said Christian Whiton, a former State Department official who has known O’Brien since well before his time on Senator Mitt Romney’s presidential campaign. “He sees himself more as that private counselor to Trump and working as an arbiter and not as a commander.”While many White House staffers viewed Bolton as a Washington insider who strategically leaked his dissatisfaction with the president’s foreign policy to the media, O’Brien has deployed the public show of loyalty adopted by the president’s most favored aides, lavishing praise on Trump as uniquely successful at winning the release of Americans in captivity abroad.And while Trump often joked about his confrontations with Bolton, who he said was always trying to get him into a war, officials say O’Brien has developed a trust factor with the president who sees his new national security adviser -- with his finely tailored suits and well-coiffed gray mane -- as someone out of central casting.That relationship will prove crucial as O’Brien assumes his role helming the National Security Council at a pivotal moment, with the administration weighing how to respond to the recent attack on Saudi Arabia’s oil industry, as well as foreign policy crises in Venezuela and North Korea.O’Brien comes in as Trump’s fourth national security adviser in just over two-and-a-half years, following Michael Flynn, H.R. McMaster and Bolton.Working in O’Brien’s favor is that he has a record of having delivered for the president earlier in his tenure. Trump tapped the longtime Republican lawyer to work for the release of American hostages held overseas and ordered him to Sweden to monitor proceedings involving A$AP Rocky, an American rapper who was arrested after a Stockholm street fight.‘Good Chemistry’O’Brien also was involved in the case of Danny Burch, who was working as an engineer at an oil company when he was taken hostage by a criminal gang in Yemen. O’Brien was in the Oval Office when Trump welcomed Burch back home following his release, and used the appearance to shower praise on the president.“This wouldn’t happen with all of these hostages and detainees without the support of the president,” O’Brien said. “The president has had unparalleled success in bringing Americans home without paying concessions, without prisoner exchanges, but through force of will and the goodwill that he’s generated around the world.”That acclaim seems to have stuck with Trump, who told reporters on Tuesday: “Robert O’Brien said Trump is the greatest hostage negotiator in history. He happens to be right.” On Wednesday, standing alongside O’Brien on the tarmac in Los Angeles, Trump added: “I think we have a very good chemistry together and I think we’re going to have a great relationship.”O’Brien benefited from the support of Pompeo, who was given significant sway over the pick after the secretary of state repeatedly clashed with Bolton. Bolton’s departure last week left Pompeo unchallenged as Trump’s closest foreign policy adviser.‘While America Slept’Before being named hostage envoy, O’Brien had been a partner at a California law firm and advised the 2016 presidential campaigns of Texas Senator Ted Cruz and former Wisconsin Governor Scott Walker. He was Romney’s senior foreign policy adviser when the Utah Republican ran for president in 2012, a position he earned in part through his friendship with Romney’s son, Tagg.O’Brien was involved in foreign-policy discussions among Republican strategists after Senator John McCain and Romney lost in 2008 and 2012, pressing for a return to former President Ronald Reagan’s “peace through strength” philosophy. In his 2016 book “While America Slept,” O’Brien railed against what he called Barack Obama’s “lead from behind” approach and accused the former president of emboldening “autocrats, tyrants and terrorists.”In the book, O’Brien calls Obama’s nuclear deal with Iran a “disaster” and compares it to the 1938 Munich Accords agreed between U.K. Prime Minister Neville Chamberlain and Adolf Hitler. Trump quit the nuclear accord in 2018.“He’s a very sharp guy,” said Kent Lucken, who was a colleague of O’Brien’s on two Romney campaigns. “A very sharp negotiator. Defense hawk. He’ll be tough on China.” O’Brien supports the North Atlantic Treaty Organization and other alliances, Lucken said.O’Brien didn’t answer a phone call on Wednesday or respond to an email seeking comment.Buzz Aldrin, Hobby LobbyO’Brien’s past legal practice focused on complex commercial litigation and arbitration, in entertainment, intellectual property, environmental, business torts, and contractual matters according a profile on the law firm’s website. Clients have included astronaut Buzz Aldrin, champagne makers F. Korbel & Brothers, Hobby Lobby, HBO, 20th Century Fox and Apartment & Investment Management Company, a real estate investment trust that is one of the nation’s biggest landlords.O’Brien also represented Oklahoma and its then-Attorney General Scott Pruitt -- later tapped by Trump to run the Environmental Protection Agency -- in the state’s lawsuit against Volkswagen AG over the company’s deceptive emissions reporting.But while O’Brien has deep connections to the Republican establishment, he has no known experience managing an organization the size of the National Security Council, which has hundreds of employees, many detailed from other federal departments and agencies. Staffers will be waiting to see if he uses their expertise more regularly than Bolton, who largely did away with traditional NSC deliberations.“He has done a brilliant job bringing home 14 hostages,” said Chris Burnham, chairman of Cambridge Global Capital LLC, who was a member of Trump’s transition team at the State Department. O’Brien “is balanced, levelheaded and will bring a fresh non-Washington insider approach to the office,” Burnham added.\--With assistance from Jordan Fabian and Bob Van Voris.To contact the reporters on this story: Nick Wadhams in Washington at email@example.com;Jennifer Jacobs in Washington at firstname.lastname@example.org;Justin Sink in Washington at email@example.comTo contact the editors responsible for this story: Alex Wayne at firstname.lastname@example.org, Bill Faries, Joshua GalluFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Boris Johnson’s lawyer promised the Supreme Court the government will file a statement overnight on what it will do if it loses the landmark case over its suspension of Parliament. The second of three days of hearings has finished in the landmark case, which has the potential to derail Johnson’s Brexit strategy and even curtail his premiership.Key Developments:Day 2 of court hearings has concluded; third and final day is Thursday, but the Supreme Court hasn’t given a date for a rulingGovernment lawyer James Eadie promised written statement on Johnson’s plans if he loses, after the court warned it would be “entirely inconvenient” if it wasn’t provided before the hearings endPound drops as much as 0.5% after European Commission President Jean-Claude Juncker said the risk of a no-deal Brexit is “palpable”German Chancellor Angela Merkel hasn’t given up a Brexit dealMorgan says government will heed Supreme Court VerdictMinister Says Government Will Heed Supreme Court (9 p.m.)Culture Secretary Nicky Morgan said the government will heed the verdict meted out by the Supreme Court after its third day of hearings Thursday.“The government is clear: we comply with the law, we respect the independence of the judiciary,” Morgan said in an interview on ITV’s “Peston” show. “What they do say will be followed by the government.”After saying at the weekend that she’d vote “remain” if there were a second referendum on EU membership, Morgan stressed on ITV that she wasn’t calling for such a vote, because she believes the result of the 2016 plebiscite should be respected.“I do not think that we should have a second vote on this,” Morgan said. “We had a clear vote in 2016. It wasn’t a position obviously that I had campaigned for, but I fully accept that we should now carry out that vote, and I think that Boris is completely right to set the 31st October, accept that as the deadline, not to be entertaining any extensions.”Foster Says DUP Prepared to be ‘Flexible’ (8:15 p.m.)Democratic Unionist Party Leader Arlene Foster said her party -- which three times voted down Theresa May’s Brexit deal -- is prepared to be flexible and countenance solutions to the Brexit impasse that apply only to Northern Ireland -- so long as there is an element of local consent.“We are prepared to be flexible and look at Northern Ireland specific solutions achieved with the support and consent of the representatives of the people of Northern Ireland,” Foster said in a speech in Dublin, according to extracts emailed by her office. “We want to have prosperous trading relationships across the island and allow businesses to get back to investing in the future with confidence.”Foster said she wants Britain to leave the EU with a deal, and that a no-deal Brexit “is no-one’s preferred outcome and is not of itself a final destination.” But she also warned that no deal will be reached that involves a backstop -- whether U.K.-wide or Northern Ireland-specific. The EU so far has refused to countenance removing the backstop -- a fallback position that will apply if future trade terms can’t be agreed -- from the deal.Day 2 Ends With Appeal to Judges’ ‘Better Nature’ (4:30 p.m.)The second day of arguments in the Supreme Court case looking at whether Boris Johnson’s decision to suspend Parliament was lawful has ended.Aiden O’Neill, representing Scottish lawmakers, urged the judges to “listen to the angels of your better nature” and rule Johnson’s suspension unlawful. He challenged the court to stand up for the U.K. constitution and the union between England, Northern Ireland, Scotland and Wales.The third and final day of hearings is on Thursday, and judges have firmly asked the government to outline what it intends to do if it loses the case. The court will hear from leading Northern Irish and Welsh lawyers, as well as representatives of former Prime Minister John Major. There is still no indication when the judges will reach a decision.Testimony Veers to Shakespeare, Scottish Battles (3:20 p.m.)Aiden O’Neill, representing almost 80 Scottish lawmakers who won the case against the government in Edinburgh, opened with a rhetorical flourish, invoking “Macbeth” and taking the judges through ancient Scottish battles and fictional ones before laying out the importance of the symbolism of the union of the U.K. in the case.When he finally got to the crux of his argument, he said there is clear case law showing the top court can rule in this suit, and that the decision to suspend Parliament fundamentally changed the balance of the constitution because it allows Prime Minister Boris Johnson to alter the U.K.’s relationship with Europe without parliamentary scrutiny.“That cannot be at this time, in this manner, a lawful use of the power,” he said.The approach was unusual, and there was a sense he was talking to an audience beyond the court. But as lawyer and legal blogger Adam Wagner pointed out, the fact that the arguments had been made by Gina Miller’s lawyers on Tuesday meant O’Neill had some freedom to go “a bit off grid.”Merkel Still Holding Out for a Deal (2:45 p.m.)Asked about the fallout from Boris Johnson’s visit to Luxembourg on Monday, when he skipped a planned press conference and the European Union complained about the lack of U.K. proposals in the prime minister’s talks with European Commission President Jean-Claude Juncker, German Chancellor Angela Merkel said she’s still holding out for a negotiated Brexit.“I’ll say again now just as I said during Boris Johnson’s visit, that I continue to see the possibility of an orderly exit,” Merkel told reporters in Berlin. “This was also the goal of the meeting with Jean-Claude Juncker. I didn’t expect that the visit in Luxembourg would offer a solution.”Merkel, who spoke with Johnson by phone Tuesday and plans to continue the conversation next week on the sidelines of the United Nations General Assembly in New York, said she’ll otherwise “wait to see how things develop.”“We are prepared for a disorderly exit, but I prefer an orderly exit with an agreement,” Merkel said.Coveney Warns Against Criticizing Johnson (2 p.m.)Criticizing Boris Johnson in public will not help to get a Brexit deal, Irish Foreign Minister Simon Coveney warned, days after Luxembourg leader Xavier Bettel did just that.Ireland and the EU are “in the business of trying to understand what are the limits of what Boris Johnson can offer” and whether the terms are “good enough to allow us to strike a deal,” Coveney said during a visit to Carlow, south east Ireland.Separately, Irish Prime Minister Leo Varadkar told lawmakers in Dublin he may meet Johnson when they are both in New York for the United Nations General Assembly next week. He said he’s also arranging to meet Arlene Foster, leader of Northern Ireland’s Democratic Unionist Party, “very soon.”Court Demands Johnson’s Plan If Defeated (1:30 p.m.)Just before finishing, Eadie turned to the question of what the court could order and how the government might respond if the ruling goes against it. It was an issue that concerned the judges on the first day of the hearing, with one asking if Boris Johnson might prorogue Parliament for a second time.The government must provide the court with its plan in the event of defeat and “it will be entirely inappropriate if you don’t do it by the end of tomorrow,” Judge Brenda Hale, the president of the court, said.Eadie responded that the government will work on its reply overnight as Judge Robert Reed spoke up to note that the issue could be a “very difficult question” for the judges.Judge Questions Lack of Government Witness (1:20 p.m.)Judge Nicholas Wilson asked James Eadie why no senior government official had come forward with a witness statement to back up the cabinet minutes outlining the reasons for the suspension of Parliament. Had that been done, the government’s evidence would have more weight in the court’s eyes.“No one has come forward from your side to say that this is true,” Wilson said. “Isn’t it odd that nobody has signed a witness statement saying this is true?”Eadie countered: “My Lords, you have the witness statement you have,” referring to the document from a government lawyer. It would be unusual for a senior official to be called to give evidence in a case like this, Eadie said, and any application for that to happen would “be resisted like fury.”Denmark Ramps-Up No-Deal Preparations (12:35 p.m.)Denmark is ramping up preparations for a no-deal Brexit amid concerns at Boris Johnson’s strategy and estimates that divorce without an agreement could cost the Nordic nation as much as 1.3% in lost growth over the next 5-10 years.“The new British government’s approach is worrying,” Danish Foreign Minister Jeppe Kofod told reporters in Copenhagen as he announced the creation of an emergency task force of officials from eight ministries.The Foreign Ministry estimates that around 60,000 Danish jobs, or 2% of the labor force, relies on exports to the U.K.. Tax authorities have hired 50 new staff and the government will spend 10 million kroner ($1.5 million) on a new public awareness campaign.Judges Question ‘Post Hoc’ System of Control (12:20 p.m.)Two judges challenged government lawyer James Eadie’s suggestion that Parliament could address any harm stemming from its suspension after it is recalled. Justice Brian Kerr called it a “post-hoc system of control,” and Justice Jill Black also questioned the idea.But Eadie said that Parliament “can resume all the functions of control it had beforehand.” Eadie effectively argued that the 17 days between Parliament is due to be recalled for a Queen’s speech and the Oct. 31 Brexit deadline would be enough to address any issues.“There is time, and it’s up to Parliament and the government to legislate what they consider necessary,” he said.Barnier: U.K. Must Provide ‘Robust’ Solutions (11:40 a.m.)Michel Barnier, the EU’s chief Brexit negotiator, said the U.K. government must accept the need for “legally robust solutions” in any withdrawal accord, and said the two sides shouldn’t be wasting time “pretending to negotiate.”“We are building a treaty, we’re not making a speech” Barnier told the EU Parliament in Strasbourg. “It’s finding solutions that work, and that’s something that we’ve communicated to Boris Johnson and his team.”Barnier’s comments echo those of European Commission President Jean-Claude Juncker (see 8:40 a.m.), who demanded the U.K. provide its proposals for an alternative solution to the contentious backstop -- the fallback measure designed to keep the Irish border free of checks after Brexit -- as soon as possible. A British official said Tuesday the government is still sounding out the bloc on its ideas for the border before submitting written proposals.Tytti Tuppurainen, European affairs minister of Finland -- which currently holds the EU’s rotating presidency -- said in the same debate that achieving the U.K.’s orderly withdrawal must remain the bloc’s priority “until the very last moment, given the negative consequences of a hard Brexit.”German Businesses Toughen No-Deal Tone (11:30 a.m.)The influential German BDI industry lobby group said it would rather have a hard Brexit on Oct. 31 than accept another delay that leads nowhere, even if -- as the group expects -- it trims economic growth by 0.5 percentage points and leads to the loss of nearly 100,000 jobs.“With every delay, the cost of preparations increase,” Director General Joachim Lang said Wednesday at a press briefing in Berlin. He accused Boris Johnson’s government of “playing with fire,” and said it shouldn’t be given an extension without a plan in place to avoid a no-deal split with the EU.Despite the tougher tone, the BDI, which estimates German companies have spent billions of euros on preparations, said it still sees a no-deal Brexit as the “worst of all possible outcomes.”Who Better Than Court to Protect Parliament? (11:15 a.m.)Justice Nicholas Wilson asked government lawyer James Eadie who was “better placed to protect the principle of parliamentary sovereignty” than the Supreme Court.Eadie replied: “It’s no good simply turning up and shouting about parliamentary sovereignty, because parliamentary sovereignty can mean a number of things.”The exchange goes to the heart of the case, which is trying to determine whether the government’s five-week suspension of Parliament was unlawful.‘Treasury Devil’ to Open Day 2 for Government (10:15 a.m.)James Eadie, the government’s go-to lawyer in major pieces of litigation -- a role known as the “Treasury Devil” -- is due to kick off the second day of hearings at the Supreme Court. Aidan O’Neill then presents on behalf of 80 Scottish lawmakers, who secured the ruling in Edinburgh that the government’s suspension of Parliament was unlawful.The government’s main contention is the issue has no place being decided by judges, and that Johnson has acted within his powers. The decision to prorogue Parliament was one of “high policy and politics, and not law,” they argue.“The appeals would also involve the courts identifying and enforcing a new constitutional convention as to the length of prorogation, which the courts have no jurisdiction to do,” lawyers led by Eadie said in their written arguments.Both the Scottish and English challengers -- who lost their separate case in the High Court in London -- argue the issue falls squarely in the jurisdiction of the court to deal with and that Johnson abused his executive powers.“It is not, and cannot be, right that the executive can exercise its powers so as to remove itself from accountability to Parliament in relation to decisions of high constitutional -- and potentially irreversible legal, economic and social -- impact,” lawyers for Joanna Cherry in the Scottish case said.Sturgeon Doubts Johnson’s Brexit Ideas (9:30 a.m.)Scotland’s First Minister Nicola Sturgeon cast doubt on Boris Johnson’s proposal to replace the so-called Irish backstop, and said the prospects of a Brexit deal “have to be slim.”“We will have to see what unfolds over the next few weeks, but it’s a very limited form of Northern Ireland-only backstop he appears to be talking about,” Sturgeon told reporters in Berlin, where she is due to meet German officials. “It’s very difficult to see how Boris Johnson can secure a deal that satisfies the European Union and commands a majority” in Parliament.On the Supreme Court hearings in London, Sturgeon said that a ruling for the government would effectively mean a “government can suspend Parliament at any time it wants.” Conversely, a loss for Johnson would mean he “will have been found to have acted unlawfully” and would have to consider his position.Speaking at the German Council on Foreign Relations on the fifth anniversary of the Scottish independence referendum, Sturgeon predicted that “over the next few years,” Scotland will become an independent member of the EU. “We are living in extraordinary and unprecedented times in the U.K,” she said.Juncker: Sticking Point Is Still the Backstop (8:40 a.m.)In his briefing to the European Parliament in Strasbourg, France, on Monday’s talks with Boris Johnson, European Commission President Jean-Claude Juncker said the main sticking point remains -- as it has for months -- the so-called backstop provision for the Irish border. He demanded the U.K. provide its proposals for an alternative solution in written form as soon as possible.Juncker said that while the discussions with Johnson in Luxembourg were “friendly, constructive and, in part, positive,” the risk of the U.K. leaving the bloc without an agreement at the end of October is “palpable.” The pound fell 0.3% after Juncker’s comments.A British official said on Tuesday the government is sounding out the bloc on its ideas for the Irish border before submitting its plans in written form.Carney Could Be Asked to Extend Term on Brexit: FT (Earlier)Bank of England Governor Mark Carney could be asked to extend his term past Jan. 31 if Brexit is delayed again, the Financial Times reported, citing people familiar with the matter it didn’t identify.The newspaper cited a government official as saying the process of choosing Carney’s successor is going “very slowly,” while an expected election in the fall makes it likely that a decision would not be made until a new government was in place.Responding to the report, the Treasury said “the process is on track and we will make an appointment in due course.”Earlier:Johnson Struggles in Supreme Court on Day One of Suspension CaseRecord Numbers Seek Debt Help With U.K. on Brink of BrexitEurope Hunts For Boris Johnson’s Plan: Brexit Bulletin\--With assistance from Stuart Biggs, Thomas Penny, Alan Crawford, Ian Wishart, Chris Reiter, Jonathan Stearns, Morten Buttler, Peter Flanagan, Dara Doyle and Franz Wild.To contact the reporters on this story: Jeremy Hodges in London at email@example.com;Jonathan Browning in London at firstname.lastname@example.org;Alex Morales in London at email@example.comTo contact the editors responsible for this story: Flavia Krause-Jackson at firstname.lastname@example.org, Stuart Biggs, Thomas PennyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Mark Zuckerberg’s cryptocurrency project, Libra, has become the regulatory equivalent of a pinata: Everyone is lining up to hit it with a stick. France’s finance minister Bruno Le Maire calls it an assault on sovereignty and a risk to financial stability, an attack backed up by his German counterpart Olaf Scholz who dubbed it a “parallel currency.” You can see their point.Across the Atlantic, U.S. Democrats and Republicans — including President Donald Trump — have called for tough scrutiny of the Facebook Inc. payments system, whose potential 2-billion strong user base could threaten the U.S. dollar’s supremacy.Facebook’s attempt this week to debunk the argument that it’s encroaching on government turf, via a Twitter thread from its blockchain boss David Marcus, won’t allay these fears. Marcus’s depiction of Libra as a system “running on top of” existing currencies rather than supplanting them — that is, a digital token backed by a basket of assets including dollars, euros, yen and the like — is exactly what has spooked politicians and central bankers. Libra is a so-called “stablecoin,” meaning its value will be anchored to the hard currencies that back it — similar to Singapore’s currency peg and unlike Bitcoin with its wild swings in value. But that doesn’t mean Libra’s rise would be good for those underlying currencies. If it took off, Libra would have a bigger potential user base than the combined populations of China, the U.S. and the EU. A mighty, privately-backed cryptocurrency would have all sorts of consequences on the enforcing of economic sanctions or regulation of global trade, as well as on central banks’ ability to respond to crises or recessions. Libra could gain great influence over countries with weak or unstable currencies that might otherwise lean toward the dollar or euro. That this would all be led by a tech industry that has frequently trampled consumer privacy underfoot is another worry, even if safeguards were put in place to keep the social media behemoth at arm’s length.Rather than debate with Zuckerberg, some central bankers seem to be mulling the idea of grabbing the Libra idea for themselves and setting up an alternative. If the problem with such a currency is Facebook, why not make one yourself that’s Facebook-free?The Bank of England governor Mark Carney floated last month the idea of a “Synthetic Hegemonic Currency,” one backed by a basket of reserve currencies but without the “fundamental” problems raised by Libra. This week Benoit Coeure, a European Central Bank executive, called on other central bankers to join forces and look into issuing digital currencies to fend off the private stablecoins. You can see why this might be preferable to digital coins run by Facebook, Amazon.com Inc. or Apple Inc. Ideally, central bank cryptocurrencies would have the convenience of digital cash and would probably do a better job of reining in illicit transactions and money laundering. They would let a central bank keep a tighter grip on financial stability too. And the risk of “digital dollarization,” in which countries find themselves falling under the sway of powerful digital tokens, is lessened.There are, nonetheless, trade-offs with any digital currency whomever issues it. National sovereignty might be protected but at what cost? A more efficient payments system may look cheaper but it would put central banks in a new role, one that would require more staff and better cyber-defenses. These are not things you naturally associate with cash-starved public institutions.The “sovereignty” of citizens could be eroded too as cash became more traceable. And we have no idea how it would perform in a financial panic. A digital bank run might be very ugly.These are political and social questions. It’s good for regulators to be grappling with them now rather than letting Facebook do what it likes. It doesn’t make the answers any easier, though. A central banker’s Bitcoin is no magic bullet.To contact the author of this story: Lionel Laurent at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The Terminal is Square’s third hardware product launched in the UK and does not need to be linked to a smartphone or tablet to function.
(Bloomberg Opinion) -- The House Judiciary Committee brought in President Donald Trump’s former campaign manager Corey Lewandowski on Tuesday as part of what it’s now calling an impeachment investigation. Indeed, the committee subpoenaed Lewandowski, former White House staff secretary Rob Porter and former White House deputy chief of staff Rick Dearborn to discuss clear evidence of obstruction of justice by Trump in attempting to shut down the Justice Department’s investigation of Russian campaign interference.Porter and Dearborn didn’t show up after the White House instructed them not to. Lewandowski did, but he refused to answer most questions under White House instructions. In each case, the White House made assertions of executive privilege that went far beyond any interpretation that’s ever been claimed. Or, as Democratic Representative Jamie Raskin of Maryland put it while questioning Lewandowski, it was a “tooth fairy” privilege that doesn’t actually exist. Committee Chairman Jerrold Nadler of New York eventually made the key point, as my Bloomberg Opinion colleague Timothy L. O’Brien noted in a tweet, in response to prodding from another committee Democrat, Eric Swalwell of California:Indeed, as Nadler added, obstruction of a Congressional inquiry was part of the three counts of impeachment voted by the Judiciary Committee in 1974 against President Richard Nixon, which would certainly have been overwhelmingly adopted by the full House before an overwhelming Senate vote to remove him if Nixon hadn’t resigned first. In other words, whatever Trump did or didn’t do in response to the Russia inquiry, he is now fully engaged (as Nixon was in the months before he resigned on Aug. 9, 1974) in a a coverup of a coverup.And that is legitimate grounds for impeachment and removal.As it happens, there’s plenty of evidence of obstruction of the Russia probe, which the Democrats attempted to dramatize in their questions to Lewandowski. He didn’t say much, but he did confirm that the description of obstruction detailed by the report that Justice Department special counsel Robert Mueller delivered in April was, to the extent it involved him, accurate. That is: The president used Lewandowski as part of his scheming to shut down investigations into his campaign, and more broadly into Russian interference with the 2016 election. The crucial point here is that Republicans in Congress are unmoved by any of this. What’s important to understand is just how much all of this undermines the rule of law. The president certainly did something that looks like obstruction of justice. The Mueller report said that it was obstruction of justice. And yet congressional Republicans are ignoring it. And they are actively cooperating with the president’s attempts to stretch executive privilege to the point where the president would be immune from any congressional and perhaps judicial oversight at all. Whether or not Tuesday’s hearing has any effect on public or media opinion, it is further evidence of the president’s abuse of power, and legitimate cause for removing him.That’s in theory. In reality, we’re still pretty far from actually getting to impeachment. Democrats continue to have difficulty using oversight hearings to make their points. They are getting better: Committee members asked good questions on Tuesday or used their five-minute turns to highlight the key points of the Mueller report and the case against Trump. But Nadler stumbled at the beginning, not seeming to know exactly how to deal with Lewandoski’s entirely expected refusal to answer questions. CNN, MSNBC and Fox News all carried the beginning of the hearing live, but all three cut away after an hour or so, missing some of the more effective questions. What’s more urgent than the eventual decision on impeachment — which, remember, won’t actually do anything to slow Trump down as long as Republicans in the Senate are unlikely to even take it seriously — is whether Trump will get away with obstructing Congress and inventing ever-expanding claims of executive privilege. It appears at this point that the courts will weigh in, with the Democratic House choosing to look for answers there rather than attempting to cite anybody for contempt, which would be subject to enforcement by a Trump Justice Department that’s unlikely, to put it mildly, to follow through.The danger is that if the courts side with Trump then they’ll be establishing that the president is, for all practical purposes, above the law. It would be better if Congress, Democrats and Republican together, made it clear that such conduct is unacceptable. But without that, House Democrats, and the rule of law, just don’t have a lot of good options.To contact the author of this story: Jonathan Bernstein at email@example.comTo contact the editor responsible for this story: Jonathan Landman at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Jonathan Bernstein is a Bloomberg Opinion columnist covering politics and policy. He taught political science at the University of Texas at San Antonio and DePauw University and wrote A Plain Blog About Politics.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Facebook Inc., ahead of a congressional hearing on violent content, revealed the charter for an independent oversight board that will make irreversible decisions about what posts stay up and come down, even if the company disagrees.The board, which Facebook started talking about in January and which will begin to hear cases early next year, represents the first real check on Facebook’s power to decide who gets a voice on its site. Its members -- at least 11 people at any given time and fully staffed at 40 -- will be the final word on controversial cases that affect Facebook’s 2.7 billion users. The board’s charter outlines a vision that is easier said than done.The members will “exhibit a broad range of knowledge, competencies, diversity and expertise” with no “actual or perceived” conflicts of interest that would affect their decisions on user content, according to the charter revealed Tuesday. They will “collaborate in decision-making to foster an environment of collegiality, and issue principled decisions and policy recommendations using clearly articulated reasoning.” The committee deciding on cases will include one member from the region of the post in dispute.Facebook spent months deliberating with outside experts to ensure the board acts independently, even though members are paid indirectly by the tech giant. Funding is channeled through a trust and the trustees can’t fire board members if they make bad content decisions, only if their conduct is poor. At stake is the trust of Facebook’s users, who sometimes don’t understand why posts are removed, or why questionable content they report remains online.The company is also dealing with increasingly damaging types of content -- like posts to recruit terrorists or influence elections. On Wednesday, executives from Facebook, Twitter Inc. and Google will testify before a Senate committee on violent content and extremism, after a string of mass shootings, some of which were broadcast live on social media.Kate Klonick, an assistant professor at St. John’s University Law School, has been embedded at Facebook to observe the oversight board’s creation, including sitting in on meetings with staff. She described a notable update: The board can provide feedback on Facebook policies, and the company will review that and write a public statement explaining why it did or did not change a policy as a result.“That’s actually kind of a huge deal,” Klonick said. “That’s probably the most accountable we’ve ever seen Facebook.”There are still elements that are unclear, according to Klonick. The charter references “bylaws” -- the “operational procedures of the board” -- and a Code of Conduct outlining the “norms, procedures, and proper practices” expected of board members. Neither exists right now, but both will be important to start the board off in the right direction with the right set of principles, she said.To contact the reporters on this story: Sarah Frier in San Francisco at email@example.com;Kurt Wagner in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Jillian Ward at email@example.com, Alistair Barr, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Facebook Inc. is once again defending Libra -- this time against fears that the envisioned cryptocurrency could replace sovereign currencies from the U.S. dollar to the Euro and threaten central banks’ control over money creation.David Marcus, the executive leading the project, posted a series of tweets the same day members of the Libra Association met with regulators convened by a G-7 working group in Switzerland. He argued that creating Libra isn’t the digital equivalent of printing U.S. dollars or minting new euros. The simple existence of Libra, he says, doesn’t create new value.Facebook’s crypto plans, unveiled in June, have faced intense push-back from regulators all over the world. One of the biggest concerns is that the new digital currency will be used by smugglers, drug dealers and terrorists. Another is that the social media giant, which has run afoul of regulators over user data in the past, should not be trusted to handle sensitive financial information. Facebook has said repeatedly it would be just one of many companies managing the new currency.“Recently there’s been a lot of talk about how Libra could threaten the sovereignty of nations when it comes to money,” Marcus tweeted. “Libra will be backed 1:1 by a basket of strong currencies. This means that for any unit of Libra to exist, there must be the equivalent value in its reserve,” he tweeted. “As such there’s no new money creation, which will strictly remain the province of sovereign nations.”Currency competition is yet another sticking point for wary regulators.In a follow-up call after Marcus’s tweets, Christian Catalini, the lead economist inside Facebook working on Libra, declined to say whether or not the issue came up during Monday’s meeting. But he did say that this element of Libra is one of many that are “misunderstood or not correctly interpreted.”“All of the design of Libra is really around being a complement of fiat [currencies], not a substitute,” he said.Why Everybody (Almost) Hates Facebook’s Digital Coin: QuickTakeLibra does not yet exist, and Facebook has pledged that it will not launch until regulators are appeased. It hopes to start the currency sometime in 2020. Facebook shares were little changed Tuesday in New York at $186.70.The concern from regulators is that giving over the control of currency creation to Facebook -- or any private company -- would strip governments of one of their greatest assets: monetary policy. The response from central banks has varied from active engagement as in the case of Singapore, to China considering its own equivalent.In a blog post from July on Harvard Law School’s forum for “corporate governance and financial regulation,” three professors who wrote a paper about regulating Libra argued that it posed a threat to sovereign governments.“Once Libra becomes well established in some countries, national governments will lose control of their money supply and lose monetary policy as a tool of economic expansion or contraction,” the post reads. “They will also lose the capacity, in times of severe uncertainty, to impose capital controls to prevent capital flight. All of these changes may well prove highly destabilising to the entire global financial system.”Catalini disagrees. He says that even for countries whose currency is not part of Libra’s reserve, there is little fear of Libra replacing local tender because of how the digital coin will be used. Its main purpose, Catalini says, is to help with payments that include lots of fees or burdens, like cross-border money transfers. It will be less useful for day-to-day commerce, he added.“It’s unlikely that Libra will be used locally because the local currencies have better properties” for local commerce, he said.(Updates with shares in eighth paragraph)To contact the reporter on this story: Kurt Wagner in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Jillian Ward at email@example.com, Edwin Chan, Joanna OssingerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Oil surged the most on record after a devastating attack on Saudi Arabia intensified concerns about growing instability in the world’s most important crude-producing region.In an extraordinary start to the week’s trading, Brent futures in London leaped a record $12 a barrel in early trading Monday, before settling just above $69 for the biggest one-day percentage gain since the contract began trading in 1988. Prices may remain elevated after Saudi officials downplayed prospects for a rapid recovery of production capacity.Saudi Aramco faces weeks or months before most output from its giant Abqaiq crude-processing complex is restored, according to people familiar with matter. Saudi Arabia’s Foreign Ministry said Iranian weapons were used in the attacks on Saudi Aramco, while the U.S. blamed Iran for the attacks.For oil markets, it’s the worst sudden supply disruption ever. The attacks that damaged a key processing complex and one of the Saudi’s marquee fields highlight the vulnerability of the world’s biggest exporter. The crisis also means a “new geopolitical premium” of about $5 a barrel, Mizuho Securities USA’s Paul Sankey wrote in a note.“We have never seen a supply disruption and price response like this in the oil market,” said Saul Kavonic, an energy analyst at Credit Suisse Group AG. “Political-risk premiums are now back on the oil-market agenda.”Meanwhile, U.S. Energy Secretary Rick Perry told CNBC that a “coalition effort” will be needed to counter Iran, which the Trump administration said was behind the attacks.Haven assets including gold and U.S. government debt surged as investors fled riskier instruments. Currencies of commodity-linked nations including the Norwegian krone and the Canadian dollar also advanced. U.S. gasoline futures jumped 13%.State-run producer Saudi Aramco lost about 5.7 million barrels a day of output on Saturday after 10 unmanned aerial vehicles struck the Abqaiq facility and the kingdom’s second-largest oil field in Khurais. A Saudi military official earlier said preliminary findings showed that Iranian weapons were used in the attacks but stopped short from directly blaming the Islamic Republic for the strikes.The disruption surpasses the loss of Kuwaiti and Iraqi petroleum output in August 1990, when Saddam Hussein invaded his neighbor. It also exceeds the loss of Iranian oil production in 1979 during the Islamic Revolution, according to the International Energy Agency.“The vulnerability of Saudi infrastructure to attacks, historically seen as a stable source of crude to the market, is a new paradigm the market will need to deal with,” said Virendra Chauhan, a Singapore-based analyst at industry consultant Energy Aspects Ltd. “At present, it is not known how long crude will be offline for.”Aramco officials are growing less optimistic that there will be a rapid recovery in production, a person with knowledge of the matter said. The kingdom -- or its customers -- may use stockpiles to keep supplies flowing in the short term. Aramco could consider declaring itself unable to fulfill contracts on some international shipments -- known as force majeure -- if the resumption of full capacity at Abqaiq takes weeks. Alternatively, the kingdom’s own refineries may cut runs just to keep crude exports flowing, according to analysts with JBC and Energy Aspects.Declaring force majeure would rattle oil markets further and cast a shadow on Aramco’s preparations for what could be the world’s biggest initial public offering. It’s also set to escalate a showdown pitting Saudi Arabia and the U.S. against Iran, which backs proxy groups in Yemen, Syria and Lebanon. Iran-backed Houthi rebels in Yemen claimed credit for the attack, but U.S. President Donald Trump and Secretary of State Mike Pompeo have already blamed Iran.Trump Vows U.S. ‘Locked and Loaded’ If Iran Was Behind AttacksTrump, who said the U.S. is “locked and loaded depending on verification” that Iran staged the attack, earlier authorized the release of oil from the nation’s emergency reserves. The IEA, which helps coordinate industrialized countries’ emergency fuel stockpiles, said it was monitoring the situation.Brent for November settlement rose 15% to $69.02 on ICE Futures Europe. The global benchmark could rise above $75 a barrel if the outage at Abqaiq lasts more than six weeks, Goldman Sachs Group Inc. said.On the New York Mercantile Exchange, West Texas Intermediate futures for October delivery settled up 15% at $62.90, the highest close since May 21. Brent’s premium to WTI for the same month closed at $6.35 a barrel. Volume for both Brent and WTI hit record highs, according to the exchanges.The drama wasn’t limited to flat prices. The spread between Brent and WTI widened as much as 37%, showing that the oil spike will affect global prices more than those in the U.S., where shale output and ample supplies provide more of a buffer.\--With assistance from Nayla Razzouk, Javier Blas, Anthony DiPaola, Michael Roschnotti, Tina Davis, Serene Cheong, Dan Murtaugh, Stephen Stapczynski, Ramsey Al-Rikabi, Saket Sundria, Ann Koh, Andrew Janes, Heesu Lee, Sarah Chen, Sharon Cho and Ben Sharples.To contact the reporter on this story: Sheela Tobben in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: David Marino at email@example.com, Joe Carroll, Mike JeffersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
One in five users say they had their privacy violated on social media, according to an exclusive new Verizon Media survey.
(Bloomberg) -- Saudi Arabia said preliminary findings show Iranian weapons were used in the attack on one of its key oil installations, but stopped short of directly blaming the Islamic Republic for the strikes that cut its crude output by half and rattled oil markets.Ongoing investigations of “debris and wreckage” show “it belongs to the Iranian regime,” Turki al-Maliki, a spokesman for the Saudi-led coalition in Yemen, told reporters in Riyadh on Monday. He said initial findings suggest the attack was not launched from Yemen, contradicting claims by Iranian-backed Houthi rebels that they carried out the attack using a swarm of long-range drones with more sophisticated engines.“We are working right now to spot the launch point of those attacks,” he said.Saturday’s attacks caused an unprecedented surge in oil prices and cast a shadow over preparations for the sale of a stake in Saudi Aramco that could be the world’s biggest initial public offering.While President Donald Trump hasn’t directly blamed Iran for the attacks, Secretary of State Michael Pompeo has. Two U.S. officials said the location of the damage and weapons used suggest the attack was not launched by the Houthis, who have been fighting the Saudi-led coalition in Yemen for four bruising years.Al-Maliki said evidence of Iranian involvement would be released, without saying when. Iran denied involvement.“Accusing Iran of the attacks is in line with the U.S.’s maximum-lies policy,” said Abbas Mousavi, spokesman at the foreign ministry in Tehran. “Such accusations are unsurprising, unacceptable and baseless.”Russia, a leading Iranian ally in the Middle East, called on countries not to rush to conclusions over who was responsible, Kremlin spokesman Dmitry Peskov said.In a tweet on Monday, Trump cast doubt on Iran’s denials of responsibility, citing the Islamic Republic’s claim that a U.S. drone shot down over the Persian Gulf in June was actually over Iranian waters.“Remember when Iran shot down a drone, saying knowingly that it was in their “airspace” when, in fact, it was nowhere close,” Trump wrote. “They stuck strongly to that story knowing that it was a very big lie. Now they say that they had nothing to do with the attack on Saudi Arabia. We’ll see?”During that incident, Trump said he called off a retaliatory military strike on Iran at the last minute, after learning about potential casualties that he said would be out of proportion to the destruction of a U.S. drone.Yet over the weekend Trump raised the specter of a military confrontation with Iran, saying that the U.S. is “locked and loaded depending on verification” that Tehran staged the attack. He then said he’d wait for Saudi comments on who was responsible.There were a total of 19 impact points at the world’s biggest crude-processing facility at Abqaiq and at an oil field in Khurais, and equipment used in the incidents that’s been recovered so far was inconsistent with the Houthi claims, the U.S. officials said. The Houthis had said they used unmanned aerial vehicles in the attack.Oil posted its biggest ever intraday jump, briefly surging above $71 a barrel after the strike removed about 5% of global supplies and raised the specter of more destabilization in the region.The U.S. president promised to help allies following the attacks, saying he’d do so despite America not being as reliant on Middle East oil. The crisis comes as Trump’s White House operates without a national security adviser. John Bolton, who had the post, was dismissed last week.The Houthis on Monday said oil installations in Saudi Arabia remained a target for weapons that could reach anywhere in the kingdom.“We assure the Saudi regime that our long hand can reach wherever we want, and whenever we want,” Houthi spokesman Yahya Saree said in a statement. “We warn companies and foreigners not to be present in the facilities that were hit in the strikes because they are still within range and may be targeted at any moment.”Difficult ChoiceThe Trump administration and Saudi leaders now face a difficult choice in how to respond to Iran or its proxies without triggering a broader conflict that could spiral out of control with potentially devastating consequences for global oil markets and the world economy. Neither country has tipped its hand.Trump will “be quite reluctant to start a war with Iran over Saudi Arabia,” said Ali Vaez, Iran Project Director at the International Crisis Group. “But Iran has increasingly less to lose and so is becoming less risk averse which means Trump’s policy of maximum pressure has backfired. At this stage, if there were a direct retaliation against Iran, the Iranians would find the draw of retaliation irresistible and we could enter a tit-for-tat situation that could easily spiral.”Trump officials had recently floated the idea of talks between the president and his Iranian counterpart Hassan Rouhani at the United Nations General Assembly this month, after more than a year of escalating tensions between the two countries following the U.S. withdrawal from the 2015 nuclear deal.Mousavi on Monday confirmed Rouhani would travel to New York, but said he had “no plans” to meet Trump. Iran has consistently said that no progress was likely in improving ties without the U.S. first removing sanctions on Iranian oil exports.While analysts estimate Saudi Arabia may be able to restore half of the lost production as early as Monday, Trump said on Twitter Sunday that he’s authorized the release of oil from the Strategic Petroleum Reserve if needed “in a to-be-determined amount sufficient to keep the markets well-supplied.”The stock of about 645 million barrels of crude and petroleum products could help meet demand during the time it would take for the Saudis to repair the facilities. Trump also told U.S. agencies to expedite permitting approvals of oil pipelines.\--With assistance from Lin Noueihed.To contact the reporters on this story: Vivian Nereim in Riyadh at firstname.lastname@example.org;Abbas Al Lawati in Dubai at email@example.com;Bill Faries in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Alaa Shahine at email@example.com, ;Lin Noueihed at firstname.lastname@example.org, Mark WilliamsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- One of Patrick Byrne’s last acts at Overstock.com Inc. is making life difficult for the short sellers he was forever battling.Shares of the online merchant are on a tear, up about 60% in two weeks. The rally coincides with a flurry of short covering that comes a week before the record date for an exotic dividend the company unveiled to much fanfare and confusion last month.Overstock’s flamboyant founder may be gone, having stepped down Aug. 22 after saying he got enmeshed in a government spy probe, but vestiges of his two-decade-long war with detractors linger. The latest twists have been manna for the stock’s true-believer longs, kicking up Twitter skirmishes while pushing the envelope of another Byrne obsession, blockchain.Data from S3 Partners, a financial analytics firm, show that about 6% of the 13.2 million shares borrowed by people betting against Overstock have been bought back in the past three business days. Shares fell for the first time in eight days Friday in volume that was three times the recent average.“There’s been a serious acceleration of short covering just recently,” said Ihor Dusaniwsky, managing director of S3. “To have that much short covering in that amount of time is responding to an event that’s changing people’s trading strategies.”In a short sale, a bearish trader sells borrowed stock, hoping to buy it back at a lower price, return it and pocket the difference. Frantic buying to close such positions is termed a “squeeze” and can boost shares rapidly.While other reasons may exist for the rally, one explanation centers on a blockchain-based “digital security” that Overstock said on July 30 it would grant to shareholders of record on Sept. 23 as a dividend. Because the security could prove hard for others to lay hands on, the potential exists for it to snarl the process by which shorts maintain positions.Stocks all over America have been benefiting last week from rushed purchases by bears as equities marched back toward records. Overstock’s case may be different. Its 65% rally since Sept. 3 stands out even in a market as volatile as this one.The theory behind the squeeze is technical but comes down to the obligation a short seller faces to pass dividends back to whomever lent him shares. That may prove difficult in Overstock’s case because the so-called “Digital Voting Series A-1 Preferred Stock” it promised in July is unregistered, will trade only on a blockchain exchange owned by a subsidiary, and may face restrictions on transfer.“You can expect a lot of buy-to-covers before the record day,” said Dusaniwsky. The 764,000 shares bought back since Sept. 10 are “the tip of the iceberg if people are wary of how the dividend settles out,” he said.Pressure on shorts would conceivably ease if the firms that lent shares were to accept something else in lieu of Overstock’s digital security -- cash, for instance. Dusaniwsky said brokerages he’s spoken to “are trying to figure out” how to handle it.A spokeswoman for Nasdaq, the exchange where Overstock shares trade, declined to comment. Overstock didn’t respond to an email seeking comment.“It’s a complex situation and we’re trying to help our clients figure out the best course of action,” said JJ Kinahan, chief market strategist at TD Ameritrade. As for the rally, he said: “If you’re short the stock, how are you going to deliver crypto? You have no way of delivering it, so you’re like, ‘OK, well I have to cover this stock because I can’t deliver the dividend.”’Whatever’s causing it, a rally this extreme puts anyone betting against a stock in difficult straits. That’s unlikely to bother Byrne, the 56-year-old founder who over the years espoused conspiracy theories about Wall Street and the evil “Sith Lord” hedge fund manager who conspired to take him down.Until recently, parts of the bear case on Overstock were Byrne himself. Before stepping down, he claimed in a series of public announcements that entanglements with the “deep state” that included cooperating with law enforcement agents he called “Men in Black” with their “Clinton Investigation” and “Russia Investigation.” Byrne said he’d been romantically involved with Maria Butina, a Russian operative jailed for failing to register as a foreign agent.The digital dividend was mentioned by Saum Noursalehi, CEO of Overstock’s tZero unit, in a Sept. 6 letter to shareholders published on Business Wire.“Given the digital preferred shares trade exclusively on the PRO Securities ATS, broker-dealers representing Overstock common shareholders will need to subscribe to the PRO Securities ATS in order to allow their clients to transact the dividend directly,” he wrote. “Introducing more investors to the platform is a key priority and this announcement should serve as a catalyst for enhancing liquidity.”To contact the reporters on this story: Jeran Wittenstein in San Francisco at email@example.com;Sarah Ponczek in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, Chris NagiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- President Donald Trump promised to help allies following attacks on major Saudi Arabian oil facilities, even though he said the U.S. is no longer directly reliant on Middle Eastern oil and gas and has few tankers there.“We are a net Energy Exporter,” Trump tweeted Monday morning. “We don’t need Middle Eastern Oil & Gas, & in fact have very few tankers there, but will help our Allies!”Brent oil posted its biggest ever intraday jump Monday to more than $71 a barrel. It pared some gains, though both Brent and West Texas crude were still trading about 10% higher as news of the devastating attack on the world’s largest exporter also sent currencies of commodity-linked nations higher.Trump’s statement Monday followed his weekend vow that the U.S. is “locked and loaded depending on verification” that Iran staged the attack on major Saudi Arabian oil facilities, an assertion already made by his secretary of state and backed by administration officials.Trump said he’s awaiting word from Saudi Arabia about who it believed caused the attack and “under what terms we would proceed!”Trump, in another tweet on Monday, said Iran didn’t tell the truth in June after shooting down a U.S. drone in the Strait of Hormuz. “Now they say that they had nothing to do with the attack on Saudi Arabia,” Trump said. “We’ll see?”Several administration officials said Sunday that they had substantial evidence that Iran was behind the oil attack, not the Iranian-backed Houthi rebels in Yemen who claimed responsibility. On Saturday, Secretary of State Michael Pompeo said unequivocally in a tweet that Iran was to blame.Two administration officials who asked not to be identified discussing internal deliberations told reporters that cruise missiles may have been used in the attacks on a Saudi oil field and the world’s biggest crude-processing facility in Abqaiq. The range from Yemen was also far beyond the distance of anything the Houthis have ever done, the officials said.A third administration official, who also asked not to be identified discussing non-public findings, said precision-guided munitions had been used. The U.S. officials didn’t rule out that armed drones were used as well, even as they rejected the Houthi claims that they mounted the attacks using such pilotless aircraft.Now, the challenge that the Trump administration faces is balancing a tough response to what it says is a clear act of of Iranian aggression, against concern that it’s rushing headlong into a conflict that could spiral out of control. Analysts also warn that doing nothing could send a message to Iran or its proxy militias across the Middle East that they can strike their enemies with impunity.“There’s no great response here,” said Aaron David Miller, senior fellow at the Carnegie Endowment for International Peace. “The question becomes how does the U.S. navigate between not allowing this precedent to stand on one hand, and avoiding a punitive escalation or one designed to deter future attacks without an escalation. And the answer is there is no answer.”Still, a major U.S. military response may be unlikely, according to experts who said they doubt Trump will be willing to use force against Tehran or risk escalating violence in the Middle East ahead of the 2020 presidential election. In June, Trump said he considered a military strike on Iran for shooting down a U.S. drone, only to call off the action at the last minute.Analysts also said the attacks may do little to deter the president from seeking a meeting with Iranian President Hassan Rouhani in an effort to broker a new nuclear agreement.Trump hasn’t ruled out a possible meeting with Rouhani when both are in New York in a week for the annual United Nations General Assembly. He tweeted on Sunday that the “Fake News is saying that I am willing to meet with Iran, ‘No Conditions’ That is an incorrect statement (as usual!).” But officials including Pompeo and Treasury Secretary Steven Mnuchin have told reporters publicly that Trump is willing to take a meeting with no conditions.‘Maximum Pressure’The administration’s “maximum pressure” stance against Iran is focused on imposing sanctions and isolating the country over its nuclear ambitions and malign activities in the region. That approach has come under renewed scrutiny at a time the president’s foreign policy team is in flux, after Trump’s firing of hawkish National Security Adviser John Bolton last week.U.S. and Saudi officials say they’re gathering more evidence that Iran was behind the attacks -- some of it on the ground in Saudi Arabia -- that will be released in due time. Iran’s Foreign Ministry described Pompeo’s comments blaming the Islamic Republic as “blind and fruitless accusations.”According to U.S. government information, there were 19 points of attack at state-owned Saudi Aramco’s crude-processing facility at Abqaiq and the Khurais oil field, all on the north or northwest-facing sides -- suggesting that the weaponry used came from that direction. Iraq lies to the north, and the U.S. in the past has accused Iran of stashing explosives with affiliated militias in the country. Yemen, by contrast, is hundreds of miles to the south.Saudi Aramco lost roughly 5.7 million barrels per day of output after the attacks, although officials cited progress in restoring production.Pompeo’s TweetPompeo tweeted Saturday that there is “no evidence the attacks came from Yemen” and accused Iran of being behind “an unprecedented attack on the world’s energy supply.”“The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression,” he added.Paul Pillar, a former U.S. Central Intelligence Agency officer, said the one “policy option left is de-escalation -- of the Saudi air war against Yemen, and of the Trump administration’s economic war against Iran.”Pillar, who’s now a non-resident senior fellow at Georgetown University in Washington, said “further attempts to escalate on either of those war fronts offers no reason to believe that they would be any more successful than the wars have been up to this point.”Trump would risk criticism from many of his Republican allies if he chose to meet with Iran’s leader barely a week after accusing the country of being responsible for a strike that caused a significant disruption to the world’s oil markets. Republican Senator Lindsay Graham of South Carolina has said the U.S. shouldn’t rule out a military strike on Iranian oil facilities in response.Graham Tweet“Iran will not stop their misbehavior until the consequences become more real, like attacking their refineries, which will break the regime’s back,” Graham tweeted Saturday.One Western diplomat, who asked not to be identified, said Trump sees what he wants to see in world events, so if he wanted to meet with Iran’s president, the strikes wouldn’t necessarily deter him. Trump has repeatedly brushed aside short-range missile tests by North Korea as he seeks to broker a historic nuclear pact with leader Kim Jong Un.White House Counselor Kellyanne Conway said on “Fox News Sunday” that the administration will continue its “maximum pressure campaign,” but she added that “the president will always consider his options,” including a meeting with Rouhani. That was hours before Trump seemed to rule out a meeting unless the Iranian president met unspecified conditions.UN MeetingNor is it clear the Iranian leader would be willing to take such a meeting -- even an informal chat on the sidelines of the UN gathering -- without the U.S. making some gesture to ease its sanctions on his country. The strikes in Saudi Arabia may all but rule out such a move anytime soon despite pleas by Western leaders led by French President Emmanuel Macron.The attacks on Saudi Arabia also pose a major test for Pompeo, who has an opportunity to consolidate power after Bolton’s departure.Pompeo and Brian Hook, the State Department’s special representative for Iran, have argued the U.S. could afford to ramp up sanctions and diplomatic pressure on Iran because there’s plenty of global oil supply. But there’s now little cushion in the market with the major disruption caused by the drone attacks, which could force the president and his team to look for ways to relieve the pressure.While analysts estimate Saudi Arabia may be able to restore half of the lost production as early as Monday, Trump said on Twitter Sunday that he’s authorized the release of oil from the Strategic Petroleum Reserve if needed based on the attacks “in a to-be-determined amount sufficient to keep the markets well-supplied.” The stock of about 645 million barrels of crude and petroleum products could help meet demand during the time it would take for the Saudis to repair the facilities. Trump also told U.S. agencies to expedite approvals of oil pipelines in the permitting process.There’s also the question of the administration’s credibility. Some foreign policy analysts said it’s hard to take at face value the claim that Tehran is responsible, given the hard line against Iran advocated by Pompeo, Bolton and others.“The Trump administration appears to have evidence of Iranian responsibility but will face skepticism from others, both because of policy disagreements between the US and its allies, and because declining to attribute an attack provides an excuse not to respond,” tweeted Michael Singh, managing director for the Washington Institute for Near East Policy.(Updates with Trump tweet in sixth paragraph.)\--With assistance from Laura Curtis.To contact the reporters on this story: Jordan Fabian in Washington at firstname.lastname@example.org;Nick Wadhams in Washington at email@example.com;David Wainer in New York at firstname.lastname@example.org;Glen Carey in Washington at email@example.comTo contact the editors responsible for this story: Alex Wayne at firstname.lastname@example.org, ;Bill Faries at email@example.com, Justin Blum, Larry LiebertFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Iranian-backed Yemeni rebels said oil installations in Saudi Arabia remain a target after drone attacks on two major sites slashed the kingdom’s output by half and triggered a record surge in oil prices.The rebel group said its weapons could reach anywhere in Saudi Arabia. Saturday’s strikes were carried out by aircraft equipped with a new type of engine, the Houthi rebel group said.“We assure the Saudi regime that our long hand can reach wherever we want, and whenever we want,” Houthi spokesman Yahya Saree said in a statement. “We warn companies and foreigners not to be present in the facilities that were hit in the strikes because they are still within range and may be targeted at any moment.”U.S. Secretary of State Mike Pompeo said Sunday that there was no evidence the raids were carried out from Yemen. He blamed Iran, as did Secretary of Energy Rick Perry on Monday.“The U.S. wholeheartedly condemns Iran’s attack on the kingdom of Saudi Arabia. We call on other nations to do the same,” Perry said at a meeting of the International Atomic Energy Agency in Vienna. “This behavior is unacceptable. They must be held responsible.”President Donald Trump said the U.S. is “locked and loaded depending on verification” of the culprit. Russia called on countries not to rush to conclusions over who was responsible, Kremlin spokesman Dmitry Peskov said. Iran denied responsibility.“Accusing Iran of the attacks is in line with the U.S.’s maximum-lies policy,” said Abbas Mousavi, spokesman at the foreign ministry in Tehran. “Such accusations are unsurprising, unacceptable and baseless.”Saudi Arabia has yet to assign blame. Its state oil company Saudi Aramco is due to give an update on Monday following the attacks on a major oil field and the world’s biggest crude-processing facility at Abqaiq. Oil posted its biggest ever intraday jump to more than $71 a barrel after the attack knocked out about 5% of global supplies.Oil Jumps Most on Record After Attack Cuts Saudi Arabian SupplyThe Trump administration and Saudi leaders now face a difficult choice in how to respond to Iran or its proxies without triggering a broader conflict that could spiral out of control with potentially devastating consequences for global oil markets and the world economy. Neither country has tipped its hand.“There’s no great response here,” said Aaron David Miller, senior fellow at the Carnegie Endowment for International Peace. “The question becomes how does the U.S. navigate between not allowing this precedent to stand on one hand, and avoiding a punitive escalation or one designed to deter future attacks without an escalation. And the answer is there is no answer.”Trump officials had recently floated the idea of talks between the president and his Iranian counterpart at the United Nations General Assembly this month, after more than a year of escalating tensions between the two countries following the U.S. withdrawal from the 2015 nuclear deal.Mousavi on Monday confirmed Rouhani would travel to New York, but said he had “no plans” to meet Trump. Iran has consistently said that no progress was likely in improving ties without the U.S. first removing sanctions on Iranian oil exports. The downing in June of a U.S. Navy drone by Iranian forces almost triggered a conflict.Its Lifeblood Attacked, What Are Saudi Arabia’s OptionsThe circumstances of Saturday’s attack remain unclear. Two administration officials said on Sunday that cruise missiles may have been used. The officials, who asked not to be identified discussing internal deliberations, didn’t rule out the use of armed drones but said the range was beyond anything the Houthis had carried out in the past.The U.S. government has determined there were 19 points of attack at the crude-processing facility and the Khurais oil field, all on the north or northwest-facing sides -- suggesting the weapons used came from that direction.Iraq lies to the north, and the U.S. in the past has accused Iran of stashing explosives with affiliated militias in the country. Yemen is hundreds of miles to the south.Saudi Arabia entered Yemen’s civil war in 2015 to push back Houthi rebels who captured the capital, Sana’a. Despite devastating aerial bombardment and support for groups on the ground, it has struggled to turn the tide of the war or reinstate the internationally recognized government of Yemen President Abd Rabbuh Mansur Hadi. The Saudi-led coalition has instead watched local allies turn their guns on each other in recent weeks while the U.S. has said it’s looking to talk to the Houthis directly about ending the war.Oil Jumps Most on Record After Attack Cuts Saudi Arabian SupplyWhile analysts estimate Saudi Arabia may be able to restore half of the lost production as early as Monday, Trump said on Twitter Sunday that he’s authorized the release of oil from the Strategic Petroleum Reserve if needed “in a to-be-determined amount sufficient to keep the markets well-supplied.”The stock of about 645 million barrels of crude and petroleum products could help meet demand during the time it would take for the Saudis to repair the facilities. Trump also told U.S. agencies to expedite permitting approvals of oil pipelines.(Updates with details on U.S.-Iran confrontation)\--With assistance from Jonathan Tirone.To contact the reporter on this story: Abbas Al Lawati in Dubai at firstname.lastname@example.orgTo contact the editors responsible for this story: Alaa Shahine at email@example.com, Mark WilliamsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- A small squadron of drones — and possibly cruise missiles — penetrated Saudi Arabia’s air defenses on Saturday, laying waste to a significant, valuable portion of two of the world’s most essential oil processing facilities. Amid worries about the impact of the strikes on global oil markets (half the kingdom’s oil output was affected) and fears about broader military confrontations upending a region perennially vexed by crossed swords, ancient religious rifts, geopolitical maneuvering and greed, facts and conjecture began jockeying for attention.Houthi rebels fighting the Saudis in a brutal civil war in Yemen took credit for the strikes. Iran backs the Houthis, and U.S. Secretary of State Mike Pompeo took to Twitter on Saturday afternoon to blame Iran for “an unprecedented attack on the world’s energy supply” and to assert that there “is no evidence the attacks came from Yemen.” Pompeo didn’t specify where the strikes actually originated. The Saudis, backed by the U.S. in Yemen, have yet to pin the strikes on Iran, while the Iranians themselves deny any involvement. On Sunday, the U.S government produced photos that officials said indicated that the drones had to have flown into Saudi Arabia from Iraq or Iran. Iraq denies being involved.Not everyone is telling the truth here (although everyone might think they are) and any prudent response to the attacks hinges on more factual certainty. Patience and foresight are diplomatic virtues in moments like this, even if the correct response ultimately involves more severe economic sanctions on Iran or military actions designed to rein in its rulers.Like any U.S. president, Donald Trump could play a clarifying role and use the power and prestige of his office to bring a sense of order to what is a dangerous dynamic in the Arab world right now. It’s possible that the next few days will build toward the most momentous foreign policy challenge Trump will experience. But we’ve also arrived here precisely because of Trump’s own haphazard and conflicted approach to regimes he claims he wants to upend. Someone who has presided over the most chaotic White House of modern times is unlikely to navigate this complicated crisis with the necessary deftness.The White House issued a statement Saturday confirming that Trump had phoned Saudi Crown Prince Mohammed bin Salman to offer support for the country and oil markets. The president then filled his communication platform of choice, Twitter, with an array of attacks on the media, praise for Supreme Court Justice Brett Kavanaugh, promos for events meant to support black colleges, and a reminder that the “USA is Winning Again!”At about 6 p.m. Sunday, Trump tweeted that he planned to release inventories from the U.S. Strategic Petroleum Reserve to help stabilize oil markets. About an hour later, he weighed in again on behalf of the Saudis.“Saudi Arabia oil supply was attacked,” he tweeted. “There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!”In a flash, and most likely without consulting anyone else on his White House team, Trump indicated he was willing to put the U.S. military at the disposal of the Saudis and that he’d come out, guns blazing, whenever the Saudis thought the time was right.Shortly after that, he noted that there was “PLENTY OF OIL!” and that no one should think that he stumbled in his own dealings with the Iranians — that perhaps the Iranians saw him softening and took advantage of him.“The Fake News is saying that I am willing to meet with Iran, ‘No Conditions.’ That is an incorrect statement (as usual!),” he tweeted just after 7 p.m.The problem with that one is that Trump did, in fact, say in June that he’d be willing to take a meeting with Iran with “no preconditions.” And several days ago Trump said he’d be willing to meet with Iranian President Hassan Rouhani at the upcoming United Nations General Assembly meeting in New York.Did any of that diplomatic signaling ( including the departure of Trump’s hawkish national security adviser John Bolton) coax the Iranians into a more aggressive stance, convincing them to try to disable a crucial oil field controlled by its most powerful foe in the Arab world at a time when that foe was moving toward a public offering of shares in its national oil company, Saudi Aramco? Who knows.What probably hasn’t been lost on Iran is that Trump has postured and blustered about his willingness to use military force to corral countries he considers hostile to the U.S., but then fails to follow through. In June, Trump ordered a military strike on Iran, only to call it off at the last minute.This isn’t new behavior from the president. He spent parts of his business life threatening to vanquish competitors or run circles around them when he was “artofthedealmaking,” only to find himself outmaneuvered or unable to deliver on his warnings (often to his own financial and reputational detriment).The president has likewise boxed himself in with the Saudis. In addition to turning a blind eye to the kingdom’s own military atrocities in Yemen, and to countenancing the murder of the Saudi journalist and dissident Jamal Khashoggi, Trump and his family have myriad financial conflicts of interest involving Saudi money. Trump has left himself little room to find diplomatic solutions that don’t meet the Saudis’ needs first, while he continues to blur the line between serving the U.S. national interest and his own self-interest.And one of the most harrowing aspects of Trump’s presidency — that an inexperienced self-promoter utterly ignorant about much of the world and lacking any real interest in international affairs had assumed power over the mightiest military force on the planet — is now in full relief in the wake of the drone strikes in Saudi Arabia.Character is at play here, too. There’s a presidential election coming and with it the danger that Trump will find military confrontations overseas useful avenues for a political boost. That would suggest he may not be making completely sober-minded decisions. Perhaps the president will rise to the occasion this week, despite the forces he helped set in motion and which are now pulling him in multiple directions. But don’t hold your breath.To contact the author of this story: Timothy L. O'Brien at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Timothy L. O’Brien is the executive editor of Bloomberg Opinion. He has been an editor and writer for the New York Times, the Wall Street Journal, HuffPost and Talk magazine. His books include “TrumpNation: The Art of Being The Donald.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.