by Bill O’Grady and Thomas Wash

[Posted: 9:30 AM EDT] Risk markets are down this morning on continued trade worries.  Here are the key items we are watching this morning:

Trade wars: The U.S. announced tariffs on $50 bn of Chinese imports[1] and China responded in kind.  Goods included in China’s tariffs include most of the grains, so soybeans, corn, etc. are sharply lower this morning.  Fear in the financial markets is palpable.  However, the fear factor is more based on continued escalation, not what was actually announced yesterday and this morning.  The proposed tariffs open up 60 days of negotiations.  We fully expect that any tariffs actually implemented will probably be less than what have been announced over the past few hours.  In other words, these announcements are the opening salvo in broader negotiations. United States Trade Representative (USTR) Lighthizer is a seasoned trade negotiator and seems to have the confidence of POTUS.  Thus, we believe it is too soon to panic.  China has shifted from attacking exports of blue states (California almonds) to red states (Iowa pork, corn and soybeans).  This will raise political opposition in the U.S. to the tariff proposals.

It is important to remember that the White House’s ultimate goal probably isn’t merely a drop in the trade deficit.  After all, that would be quite easy to implement.  Just trigger a recession, which cuts consumption, reduces imports and, lo and behold, cuts the trade deficit.

This chart shows the current account (trade + remittances) as a percentage of GDP.  Note that in every recession, the current account either shifts to a surplus or the deficit narrows.  No politician wants this outcome; what is really desired is job growth.  The president should want export growth.  A better tool for this would be dollar weakness.

This chart shows the yearly change in the JPM dollar index and the yearly change in exports.  They are correlated at -62% (with a one-quarter lag).  Note the dollar has weakened recently, which should help improve the trade situation.  Stronger goods job growth is positively correlated to export growth.

The real issue is boosting market access to China—an obvious way to get there is with a weaker dollar/stronger Chinese yuan.  This is the path the Reagan administration took during the 1980s with the yen and D-mark at the Plaza Accord, in which Lighthizer participated.

We do not want to be overly sanguine on this topic.  The president is mercurial and could stumble into an open trade war.  However, we are not in one now and there is a mostly clear path to avoid one.  China has used a mercantilist trade policy to foster development.  Most nations do this—the U.S. could have been accused of similar practices 150 years ago.  But, a point is reached where such policies become counterproductive.  The U.S. ran into this issue in the 1930s, as did Japan in the late 1980s and Germany in the mid-1980s (although Germany was able to maintain such policies via colonization, otherwise known in polite company as the Eurozone).  China is at that point now.  It under-consumes, is over-indebted and needs to rebalance by reducing debt and investment and boosting household consumption.  Chairman Xi has accumulated massive political power; if he wants to restructure China’s economy, he has the power to do so.  A stronger CNY would assist in that process.

It should be noted that other nations are beginning to understand that U.S. trade policy is going to affect them as well.  South Korea’s revamped trade deal with the U.S. will require a stronger won.  Japan is increasingly concerned that the U.S. is going to demand a stronger yen and a reversal of Abenomics.[2]  Perhaps the clearest signal we are getting is that the U.S. wants dollar weakness.  If so, that is usually bullish for foreign equities (to dollar-based investors, obviously).

Thus, the bottom line is that although risks are elevated, a full-scale trade war remains in the “tails” of the distribution.  The most likely outcome is a negotiated trade deal that increases foreign investment in the U.S., opens markets abroad and brings a weaker dollar.  We remain concerned about a policy error, but it is too early to declare that one has occurred.

Williams at the NY FRB: Despite calls for diversity, in the end, the NY FRB selected John Williams as its next president.  We suspect that the need to add a strong economic mind to the roster of permanent voters on policy outweighed other concerns.  We would not be surprised to see a more regulatory oriented replacement for Williams at the San Francisco FRB.  We rate Williams as more hawkish than Bill Dudley, who is leaving the NY FRB president positon in mid-June, so the FOMC just got a bit more hawkish.

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[1] This actually clears up one serious concern, which was whether it would be $50 bn in tariffs, which would be huge, or tariffs on $50 bn of goods, which is roughly 9.5% of Chinese exports to the U.S.

[2] https://www.reuters.com/article/us-usa-trade-japan/japan-braces-for-trump-assault-on-trade-yen-policy-as-summit-looms-idUSKCN1HB0K7

by Bill O’Grady and Thomas Wash

[Posted: 9:30 AM EDT] We are seeing a bit of a recovery this morning after a hard sell-off yesterday.  Here are our thoughts:

This is mostly about technology: Tech companies have, until recently, had a reputation for good.  Their goal seemed to be to improve our lives at apparently low cost.  That reputation has taken a beating in recent months.  The social media model is one element of the problem.  These firms seemingly offer their products for free but, in reality, they are platforms to watch us, foretell our future behavior based on past actions and sell this information to advertisers.  The power of this information is, as it turns out, extensive.  Not only can it be used to direct us to items we might want to purchase, but it can shape our opinions on politics and social factors.

Steadily, we are being warned of the potential and real dangers posed by this data gathering.[1] The influential and powerful are trying to harness this data to shape the world in their image.  How this situation is resolved is unknown.  However, it is apparent that the industrialized world’s citizens are beginning to realize these tech companies and what they provide are not necessarily benign, and that there is a cost to convenience.

The U.S. has faced similar issues before.  In the 1890s, it was becoming evident that the industrial trusts were reaching levels of concentration to where they represented the market.  In other words, price, the method by which market economies match supply and demand, was becoming so controlled on one side that price no longer worked for creating an ideal distribution of goods and services.  This is how anti-trust law was born.  The concentration of data is different in many ways.  Unlike price, which is obvious, the value of our personal data is not clear.  Thus, there is grave danger that we are undervaluing our personal data and tech companies are illicitly capturing value because of our ignorance.  Essentially, they are monetizing our behavior without compensating us.  In the political sphere, we are at risk of being manipulated—being fed simplified outrage to capture our vote.  At least the old party machines used to pay people for their votes!

The uncertainty the market faces is how the political class will regulate the data accumulators.  When the trust-busters broke up the large industrial firms in the early part of the last century, it turned out to create value.  The smaller firms were better managed, the competition encouraged their growth and they provided ample services to the economy.  A similar outcome is possible today.  But, until we understand the landscape, the current dominant firms will be under fire and this will likely increase the volatility of their price performance in the coming months and years.  We suspect this situation will be part of the environment for a long time.  It’s important to remember that the Sherman Anti-Trust Act passed in 1890, but Standard Oil wasn’t broken up until 1911.

Equities and the Fed: A question we are getting from advisors is whether market weakness will delay or stop Fed tightening?  This is really a question about the “Fed put,” which captures the central bank’s reactions to market declines by easing monetary policy.  Greenspan did cut rates after the 1987 crash and there is an obvious pattern to rate cuts during financial crises, which are usually accompanied by equity market declines.  So far, we aren’t seeing evidence from the interest rate markets that the FOMC should change behavior.  Expectations from fed funds futures still show an 80% chance of a rate hike at the June meeting, and Eurodollar futures say the FOMC has at least another 100 to 125 bps of tightening.

This chart shows the implied three-month LIBOR rate, two years deferred, from the Eurodollar futures market and the fed funds target.  The Fed tends to raise rates until the two rates cross.

So far, financial authorities and the interest rate markets are treating this equity pullback as a normal correction.  Given the lack of evidence of a recession, that is a logical conclusion.  Thus, until proven otherwise, that would be the prudent expectation.

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[1] Galloway, S. (2017). The Four: The Hidden DNA of Amazon, Apple, Facebook and Google. New York, NY: Random House. See ‘Reading List’ for our recent review of this work.  Also, https://www.ft.com/content/6c6c730e-3298-11e8-ac48-10c6fdc22f03.

by Bill O’Grady and Thomas Wash

[Posted: 9:30 AM EDT] We are seeing a mixed market this morning—U.S. equity futures are lower as are Treasury prices, while commodities are higher.  Much of Europe is closed today for Easter Monday.  Here is what we are watching this morning:

China retaliates…sort of: China slapped tariffs on 125 items, mostly foodstuffs.  Steel and aluminum were targeted, a direct action against U.S. tariffs on those two metals.  Frozen pork was included, as were tree nuts, including almonds.  Between 2012 and 2017, about 75% of China’s almond market came from the U.S.[1]  However, we do note that soybeans were specifically excluded from the list, suggesting China is taking a measured approach to trade tensions.  A potential trend we are watching is that China may be implementing trade actions against products in “blue” states; putting tariffs on soybeans harms the Midwest, which is generally supportive of the GOP.  Assigning tariffs that harm California, on the other hand, probably won’t trigger an aggressive response from the White House.

NAFTA threat: There are reports that “caravans” of Central American migrants are moving through Mexico to the U.S.  The president tweeted that if Mexico doesn’t stop these flows then he will end NAFTA.  Trade and immigration policy are complicated.  The agriculture and hospitality industries often need seasonal workers and the local markets are simply unable to provide enough labor.[2]  Completely restricting immigration will adversely affect some industries; therefore, reform needs border control but also rules to allow needed workers in some industries.  Meanwhile, U.S., Canadian and Mexican trade negotiators are working to reform the NAFTA agreement, but the statements we saw on Easter from the White House complicate those discussions.  There is no doubt that the U.S. will be less affected than other nations in a trade war.  However, there will be significant costs to the U.S.; for investors, a trade war means higher inflation, which lifts nominal interest rates and contracts P/Es.

A threat to Putin?  Although President Putin has faced widespread protests in the past, they have obviously failed to remove him from office or prevent him from executing his preferred policies.  However, last week there was a fire at a shopping mall in Kemerovo, a small city in south-central Russia, killing 64 people, 41 of which were children.  A zoo and its animals also perished.  Protests have broken out; corruption is being blamed for the deaths as emergency services and normal precautions were clearly inadequate.  Local leaders have been astoundingly tone deaf—one official noted that children die every day and thus dismissed the protesters as trying to court the media.  As anger has increased, Putin has followed his usual script, which is a staged photo op of him showing concern.  Protests have begun to spread, with large demonstrations noted in 20 cities.  The governor of the Kemerovo Province, Aman Tuleev, resigned over the weekend.  History suggests that these protests will eventually die out but the fact that they have not only lasted this long but also spread does suggest that Putin’s power may be under pressure.

The NY FRB spat: John Williams, the current president of the San Francisco FRB, is the leading candidate to fill the president vacancy at the NY FRB.  Its current occupant, Bill Dudley, is expected to retire by summer.  Williams is an accomplished economist and is qualified for the position.  However, two problems have emerged; first, diversity advocates would prefer someone other than a white male for the job, and second, there are concerns about his regulatory history.  Here is what we find interesting about this debate.  During the late 1960s into the early 1980s, central banks in the West were often compromised by political influence.  This was true at the Federal Reserve, which became legally independent of the Treasury under Truman.  Nixon pushed out Fed Chair William Martin in the late 1960s and then undermined his successor, Arthur Burns, forcing him into inappropriate policy accommodation in the early 1970s to support Nixon’s re-election campaign.  Central banks in much of the West were beholden to finance ministries to “coordinate” monetary policy with fiscal policy.  In fact, standard Keynesian economics argues that monetary and fiscal policy should be coordinated.  In a non-political world, this idea is uncontroversial.  In the real political world, it’s a recipe for inflation because the political class usually opposes austerity.  So, in the deregulatory revolution of the 1980s, central bank independence became common.  Since the 1980s, the Federal Reserve has mostly operated with minimal congressional oversight (governors require congressional approval while regional bank presidents only require approval from the Board of Governors).  Some on the right, notably the Pauls (Ron Paul was a Texas congressman and Rand Paul is the current junior senator from Kentucky), have been calling for “Fed audits” which are really policy audits.  Their goal is to force a monetary policy that mimics a gold standard.  However, if we see monetary policy politicized, the most likely outcome would be inflation.  The current uproar over John Williams likely portends a bigger shift to reinjecting political oversight into monetary policy.  We have been expecting policy reflation to steadily develop over the next decade.  This potential interference into the policy process is one part of that expected development.

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[1] http://www.chinadaily.com.cn/business/2017-05/24/content_29471108.htm

[2] http://www.ky3.com/content/news/Branson-want-permanent-job-recruiting-relationship-with-Puerto-Rico–464249763.html

by Bill O’Grady and Thomas Wash

[Posted: 9:30 AM EDT] Risk assets are trending higher this morning in a quiet trade.  Several markets are closed today for Holy Thursday and U.S. markets will be closed tomorrow for Good Friday.  A number of European markets will close for Easter Monday.  When a group of markets are closed in this fashion, trading usually slows and liquidity thins, which can lead to violent market reactions.  Here is what we are watching today:

More beat down on tech: Yesterday, we noted that Amazon (AMZN, 1431.42) took a drop on reports that the president didn’t like the company’s behavior.  Facebook (FB, 153.03) has also been under pressure.  However, there is another, more interesting, trend developing.  Traditional media has seen the tech giants destroy its business model by (a) ending the classified advertising market for newspapers, and (b) skimming their content for free and reducing subscription revenue.  Media companies, such as newspapers and magazines, have been under pressure since the middle of the last decade due to the onset of social media.  However, the current turmoil in tech, especially with social media and data gatherers, reminds us of a famous quote, sometimes attributed to Mark Twain:^[1]

Never pick a fight with people who buy ink by the barrel.

The media companies may be fanning the flames of this discontent with social media and tech, in general, and, ironically, these same firms provide the content “skimmed” by social media.^[2]  Simply put, this may be traditional media’s chance to undermine technology and retake control of the media landscape.  What this means for the market is that the problems for technology are not likely to go away soon because the media has an incentive to keep the topic front and center in the minds of the public and lawmakers.

The new German foreign minister: Meiko Maas, a member of the Social Democrats (SDP), has been given the mandate of foreign minister in the new Merkel government.  Maas’s appointment was something of a surprise; although he has a long career in German politics, he has virtually no foreign policy experience.  So far, Maas has surprised Germans by hewing to a hard line on Russia.  The SDP has a reputation of being “chummy” with Russia.  Former Chancellor Gerhard Schröder called Putin a “flawless democrat” in 2004 and, shortly after leaving office, joined the board of directors of the Nord Stream natural gas pipeline, a Russian/European venture.  Sigmar Gabriel, the recently ousted leader of the SDP, repeatedly supported an end to Russian sanctions.  As Russia becomes increasingly belligerent toward the West, having a hardliner in the German foreign ministry is an unexpected development and will help in creating a united Western front against Putin.

Energy recap: U.S. crude oil inventories rose 1.6 mb compared to market expectations of a 0.5 mb build.

This chart shows current crude oil inventories, both over the long term and the last decade.  We have added the estimated level of lease stocks to maintain the consistency of the data.  As the chart shows, inventories remain historically high but have declined significantly since last March.  We would consider the overhang closed if stocks fall under 400 mb.

As the seasonal chart below shows, inventories are usually rising this time of year.  This week’s rise was below normal and is supportive.  Every week that fails to show a build on the seasonal pattern is a week in which the seasonal factors become less bearish.  Although there is still time for stockpiles to rise, it is unlikely they will reach their seasonal norms.

Based on inventories alone, oil prices are undervalued with the fair value price of $64.24.  Meanwhile, the EUR/WTI model generates a fair value of $75.02.  Together (which is a more sound methodology), fair value is $71.51, meaning that current prices are below fair value.  Oil prices remain range bound but should move higher by early summer when the driving season begins.

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[1] Although, like all famous quotes, the attribution is in dispute.

[2] https://www.axios.com/media-vs-facebook-this-time-its-personal-1522183448-542df9fc-f4a5-41fe-964f-7c955bbb96c9.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosam&stream=top-stories

by Bill O’Grady and Thomas Wash

[Posted: 9:30 AM EDT] Equities were weak around the world but we are seeing a mixed recovery in the early U.S. trade.  Technology remains under pressure.  Here is what we are watching today:

Oops: Yesterday, we bravely opined that Kim Jong-un probably didn’t go to China.  Well, today we get to issue a correction.  He did go to China, although the visit was officially “unofficial.”  In other words, it wasn’t a scheduled state visit.  We don’t know for sure why Kim chose China and Chairman Xi for his first visit with foreign leaders.  However, there are a number of possibilities.  First, China may have feared being isolated.  As North Korea prepares for summit meetings with South Korea, the U.S. and maybe Japan, China may have suddenly become quite open to meeting with the North Korean leader.  Simply put, the diplomatic situation is changing and China has been mostly on the sidelines.  China may have wanted to improve relations before the summits, fearing it was out of the loop.  Second, Kim may have wanted to remind his summit “guests” that he still has ties to China and use that knowledge for leverage.  Kim comes from a long family line of leaders who are deft at playing powers off each other.  Third, we expect China to try to host the U.S./North Korean summit to increase leverage over both nations.  From what we said yesterday, we still believe North Korea eyes China warily.  Kim Jong-un executed his uncle along with most of his family and also assassinated his brother in a spectacular attack in a Malaysian airport.  His uncle was well liked in China and had close ties with Beijing.  And, his brother, Kim Jong-nam, was being protected by China.  The North Korean leader has reasons to believe China would prefer a more accommodating leader in Pyongyang and thus fears Chairman Xi.  The fact that this meeting has taken place suggests that either (a) Kim Jong-un feels more confident now, or (b) Chairman Xi has signaled to Kim that he doesn’t have designs on his removal from power.  That probably doesn’t mean China can put itself between the U.S. and North Korea, but it has an incentive to try and Kim has an incentive to see what that insertion is worth to Beijing.

Market action: The equity markets have been struggling since their late January peak.  Although a number of factors are involved, the biggest is the sentiment turn against technology.   In our recent review of Scott Galloway’s book (see Reading List link above), The Four, we note how the major tech firms have become darlings of consumers, with two of them providing what appeared to be “free services” which are, instead, data accumulating operations that are sold to advertisers or, as we have discovered, political campaigns.  Galloway has made it clear that about the only force that can restrict these firms is government.  Until recently, government regulation looked like a long shot but that is no longer the case.  Mark Zuckerberg of Facebook (FB 152.22) is preparing to testify before Congress.  According to Axios,^[1] the president has Amazon (AMZN, 1497.05) in his sights.  Technology isn’t the whole market but it has become the largest sector in the S&P, currently at 24.8%.  The impact of technology and the effect of concentration (always an issue in a capitalization-weighted index) is best observed in the relationship between the cap-weighted and equal-weighted S&P indexes.

This is a five-year chart of the normalized spread between the equal-weighted and the cap-weighted indexes.  When the chart is red, the equal-weighted index is outperforming the cap-weighted index.  Over the long run, the equal-weighted index tends to outperform.  Why?  Because the buyer of a cap-weighted index is usually buying more of the most expensive stocks in the index.  Since about mid-2017, the cap-weighted index has outperformed; however, that performance gap is narrowing rapidly.

Although we will have more to say on this topic in the upcoming Asset Allocation Weekly Comment (which will be published on Thursday due to the market’s close for Good Friday), we suspect we are in a corrective phase.  Earnings should remain robust due to the tax changes and strong economy, and there is no recession in sight, which usually triggers major bear markets.  Although a 1987 event is possible, the fact that we call it a “1987 event” shows how long it’s been since a major bear market has occurred without a coincident recession.

How long will this go on?  The following Bloomberg chart offers some insight.

The shortest corrective, or, perhaps better said, “digestive,” phase in this bull market was 97 days, which means we have about another month.  As we will show in the upcoming AAW Comment, all three of these sideways corrections occurred with low levels of liquidity; this one is occurring with over $1.0 trillion in retail money markets.  Thus, we suspect it will be shorter.   But, we will likely see continued churn in the market for at least another few weeks.

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[1] https://www.axios.com/trump-regulation-amazon-facebook-646c642c-a2d7-454b-a9a9-cdc6e4eaef2c.html

by Bill O’Grady and Thomas Wash

[Posted: 9:30 AM EDT] It’s risk-on around the world so far today.  Here is what we are watching:

Is Kim in Beijing?  Although a number of reports have speculated the leader of North Korea has traveled to China, this news has yet to be confirmed.  If he did travel to China, it would be his first foreign visit since becoming the leader of North Korea in 2011.  We suspect he isn’t on the train.  Instead, this is more likely a high-level delegation updating China on the path of negotiations.  Beijing has significant interest in North Korea’s ongoing thaw with the South and potential summit meetings with Japan and the U.S.  Although China is likely relieved that the prospect of war has been reduced, it is also probably concerned that it isn’t participating in any of these meetings and worried that its interests are not being represented.  As we have discussed, relations between China and North Korea are not nearly as warm as advertised.^[1]  China does not want to see a hostile power on its border and if the U.S. and North Korea normalize relations it is quite possible that North Korea could become allied with the U.S. and, at least from China’s perspective, part of America’s containment of China.  Hence, the visit by someone from North Korea.

Is Abe ok?  Over the past month, Japanese PM Abe has been under fire for a land sale scandal.  His finance minister looked in grave danger and Abe himself was facing the threat of an internal party revolt.  Abe’s approval rating plunged from 56% in February to 42%, the fifth lowest in his current round as PM.  Nobuhito Sagawa, a key figure in this scandal and Ministry of Finance official, testified that neither Abe, his wife nor Finance Minister Aso had any involvement in changing the documentation surrounding the land deal.  His testimony, at least for now, reduces the likelihood that Abe’s government will fall.  On the news, the Nikkei jumped 2.72% and the JPY weakened.  The fear has been that a fall of the Abe government would also spell the end of Abenomics, which relies mostly on a weaker JPY and has lifted the values of Japanese financial assets.

Pound down: A report from the BOE, expressing concern that Brexit will lead to loss of market share in the EU for London’s financial services industry, triggered a sharp drop in the GBP this morning.  The currency has been appreciating as PM May moves toward a soft Brexit but the BOE’s report acts as a reminder that there will be disruptions from Brexit that will adversely impact the most globalized parts of the U.K. economy.

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[1] See WGRs, North Korea and China: A Difficult History, Part 1 (10/16/17); Part II (10/23/17); and Part III (10/30/17).

by Bill O’Grady and Thomas Wash

[Posted: 9:30 AM EDT] Risk assets are rising this morning after the weekend media suggests the rhetoric on trade is much more potent than the reality.  Here is what we are watching this morning:

BREAKING: President Trump to expel 60 Russian diplomats, joining 14 other EU nations taking similar actions in response to Russia’s attack on a former double agent in the U.K.

The trade walk back: In a series of Sunday interviews, Treasury Secretary Mnuchin intimated that the administration is in trade talks with Chinese officials.[1]  We suspect China is working from the position that giving President Trump some high-profile “wins” will likely placate him and persuade him to back away from blanket trade impediments.  We agree with this assessment.  As we have said repeatedly, if the president had really wanted to implement anti-import legislation, he could have simply accepted the border adjustment tax.  President Trump appreciates the power of image.  Passing a complicated tax that reduces imports won’t fire up anyone (expect a few policy wonks), whereas high-profile actions, such as promises from China to purchase more U.S. goods, have much more impact on voters but matter little to the overall flows in the end.[2]  Our position is that trade action will end up being rather modest; significant trade restrictions are more likely to come from a left-wing populist.

John Williams to the NY FRB: Reports indicate that San Francisco FRB President John Williams is the leading candidate for the NY FRB position.  Williams is a respected economist, considered strong on policy.  We rate Williams a “2” on our 1-5 “hawk-dove” ranking system, meaning he is a moderate hawk.  What makes this job important is the unique voting power of the NY FRB president.  The other 11 regional FRB presidents rotate on the voting roster; only four of the 11 regional bank presidents actually vote on policy in a given year.  However, the NY FRB is a permanent voting member due to that district’s power as the center of American finance.  Like all FRB presidents, the local FRB bank board approves its president with the approval of the Federal Reserve in Washington.  The governors of the FOMC are approved by Congress.  Thus, the NY FRB president is a rather powerful position.  If he is appointed, he will make the FOMC’s permanent voters a bit more hawkish than the current composition.

Radicals in Italy?  In a rather unexpected development, the Five-Star Movement and the Northern League are making progress toward forming a government.  If that were to occur, it would be a “Nader alignment.”  Ralph Nader[3] proposed that right- and left-wing populists should make common cause based on their economic interests and build coalitions to remove the establishment from power.  Although the economic attractiveness of such a coalition makes sense, in reality, the social differences are really difficult to overcome.  However, if this government does develop, it would offer a roadmap of sorts for other populists in the West.  Thus far, financial markets are not expecting these parties to actually form a government as the German/Italian bond spreads have not widened significantly.

Puigdemont arrested: The former leader of Catalonia was detained[4] as he crossed the border from Denmark into Germany.  Germany intends to extradite Puigdemont to Spain where he is subject to arrest for separatist activities.[5]  News of the arrest sparked protests in Barcelona.

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[1] https://www.wsj.com/articles/u-s-china-quietly-seek-trade-solutions-after-days-of-loud-threats-1522018524

[2] https://www.ft.com/content/1d56221c-30bb-11e8-b5bf-23cb17fd1498

[3] See Nadar, R. (2014). Unstoppable: The Emerging Left-Right Alliance to Dismantle the Corporate State. New York, NY: Nation Books.

[4] https://www.nytimes.com/2018/03/25/world/europe/germany-carles-puigdemont.html?emc=edit_mbe_20180326&nl=morning-briefing-europe&nlid=5677267&te=1

[5] For background on Catalan separatism, see WGRs, The Situation in Catalonia: Part 1 (11/6/17) and Part II (11/13/17).