David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Tax Court of Canada rules in favour of Cameco

    This press release from Cameco may be of interest to subscribers. Here is a section:

    The Tax Court ruled that Cameco's marketing and trading structure involving foreign subsidiaries and the related transfer pricing methodology used for certain intercompany uranium sale and purchase agreements are in full compliance with Canadian laws for the tax years in question.

    "We are very pleased with the Tax Court's clear and decisive ruling in our favour," said Tim Gitzel, Cameco's president and CEO. "We followed the rules, yet this dispute has caused significant uncertainty for our investors during a period of prolonged weakness in markets for our products. Now we hope CRA accepts the decision and applies it to other tax years in dispute, so we can focus on managing our business for the benefit of all our stakeholders."

    The court has referred the matter back to the Minister of National Revenue in order to issue new reassessments for the 2003, 2005 and 2006 tax years in accordance with the court's decision. The timing for the issuance of the revised reassessments along with refunds plus interest is uncertain.


    Cameco will be making an application to the court to recover the substantial costs incurred over the course of this case.

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    Oil on Biggest Tear in Decade as Global Supply Cushion Vanishes

    This article by Samuel Robinson for Bloomberg may be of interest to subscribers. Here is a section:

    Fears are growing that the constriction of Iranian exports by U.S. sanctions and the collapse of Venezuela’s oil industry will leave a deep shortfall in the market. Those worries have only been stoked this week as key producers from Saudi Arabia to Russia and the U.S. signaled their reserves are off limits.

    Some of the world’s largest oil producers and traders are warning that triple-digit prices could soon return, with negative consequences for the economy.

    “There is concern in the market that the loss of barrels from Iran and Venezuela is not going to be made up for through extra supplies from particularly Saudi Arabia and Russia,” said Gene McGillian, manager of market research at Tradition Energy. “Worries about trade relations affecting economic growth have fallen away.”

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    H&M Soars Despite Record Inventories as CEO Says Worst Is Over

    This article by Anna Molin for Bloomberg may be of interest to subscribers. Here is a section: 

    H&M’s inventories have been a persistent problem, rising steadily as the Stockholm-based fast-fashion chain failed to keep up with consumers’ tastes and was struck by logistics woes.

    The company says it’s working through the excess stocks and will be able to scale back discounting as a result, even as it irons out its supply problems. “We are in a better position now than we were last year,” CEO Karl-Johan Persson said on a conference call Thursday. “We’re buying less and being smarter about our purchases.”

    The shares soared as much as 13 percent in Stockholm trading. Analysts at RBC Capital Markets pointed to H&M’s forecast that fourth-quarter markdowns will be about flat with last year’s, as well as a third-quarter gross margin that beat estimates.

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    Trump Is Looking for Quick Fix in Japan Talks, Abe Ally Says

    This article by Connor Cislo and Emi Urabe for Bloomberg may be of interest to subscribers. Here is a section:

    Abe and Trump agreed to open limited bilateral trade talks. Japan had resisted U.S. efforts at a more comprehensive bilateral trade deal, saying it preferred that the U.S. return to the TPP.

    The two leaders agreed to work to increase car production and auto-related jobs in the U.S., and that Japan wouldn’t be pressed to offer better access to its agricultural markets than it did under the original TPP. Trump also agreed not to place tariffs on imports of Japanese cars while the talks are taking place. The talks, limited to trade in goods, are aimed at seeking to "produce early achievements," according to a joint statement released by the White House.

    Amari also said Trump’s focus on selling autos in Japan is misplaced, noting that Japan does not levy tariffs on auto imports, unlike the U.S. He said Japanese consumers simply don’t want American cars, making talks on the subject "pointless."

    As Trump takes on China’s trade practices, it’s still possible that he brings the U.S. back to the TPP, given that it addresses many of the U.S. concerns -- such intellectual property theft, forced technology transfers and state-owned enterprises, Amari said.

    "But that’s just my modest hope," he said. "I’d put the odds at less than 50 percent."

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    DARPA's New Brain Chip Enables Telepathic Control of Drone Swarms

    This article from sputniknews.com may be of interest to subscribers. Here is a section:

    "As of today, signals from the brain can be used to command and control… not just one aircraft but three simultaneous types of aircraft," Justin Sanchez, director of DARPA's biological technology office, said Thursday at the agency's D60 Symposium in National Harbor, Maryland.

    "The signals from those aircraft can be delivered directly back to the brain so that the brain of that user [or pilot] can also perceive the environment," Sanchez said at the symposium, which celebrated DARPA's 60th birthday. "It's taken a number of years to try and figure this out."

    "We've scaled it to three [aircraft], and have full sensory [signals] coming back. So, you can have those other planes out in the environment and then be detecting something and send that signal back into the brain," he said, according to Defense One.

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    Neutral Fed Funds, Dead Ahead

    This article from Bloomberg’s economists may be of interest to subscribers. Here is a section:

    Given the lagged and variable impact of monetary policy on economic conditions -- further complicated in the current cycle by the Fed’s balance-sheet unwind -- policy makers will need to navigate with caution when in the proximity of neutral. Fed Chairman Jerome Powell, in his Jackson Hole speech, sounded dual warnings about this: First, he stressed economists’ inability to estimate the neutral level of interest rates in real-time and cautioned against the “mistake of overemphasizing imprecise estimates of the stars”; second, he invoked the Brainard principle, which advocates moving conservatively on policy when the effects of action are unknown.

    If growth is moderating toward trend and inflation appears to be centering around policy makers’ objective as the fed funds rate probes neutral territory, a significant portion of the FOMC should be willing to slow -- if not pause -- the pace of interest-rate increases in order to assess economic conditions. Policy makers may not be able to precisely identify the neutral policy rate in real time, but a continual decline in the terminal fed funds rate over the past several tightening cycles (shown below) serves as a cautionary reminder that, as Powell quipped at Jackson Hole, a “smaller dose” of normalization may prove adequate.

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    Sony finally gives into 'Fortnite' PS4 cross-play demands

    This article by Swapna Krishna for engadget.com may be of interest to subscribers. Here is a section:

    PlayStation gamers have been frustrated by the lack of cross-platform support for the popular game Fortnite. But now Sony has some good news. Today, the company announced an open beta that will allow for Fortnitecross-platform play between the PlayStation 4 and iOS, Android, the Nintendo Switch, Xbox One, Microsoft Windows and Mac.

    The aim of the beta is to test the user experience on this kind of cross-platform play, which is the first time Sony Interactive Entertainment has experimented with this feature. The release makes clear that, if this test goes well, the company may be open to cross-platform play on other games in the future.

    Part of the appeal of Fortnite has been the ability to play with other gamers, regardless of the platform you are on. PlayStation users were unable to partake in that aspect of the game. To make matters worse, SIE's restrictive policies ensured that players weren't able to sign into an Epic Games account linked to PSN from their Nintendo Switch.

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    How China Is Losing the World

    This article from The Diplomat may be of interest to subscribers. Here is a section:

    But to the more attentive, a new counternarrative is also starting to emerge, which stands against this tale of an ever more powerful China that can name its terms and act without restraint or pretense. As more and more people start to know far more about the China model, and to see it manifested in their daily lives, doubts start to grow. The sharp treatment of Taiwan, the actions in Xinjiang, the incredible, pervasive growth of the surveillance state in China and its annexation of almost every aspect of life without any institutional or legal restraint – all these register in some form and shape a little resistance.

    In the past, issues about China were once disparate; now they are being linked and form the basis of a critical counternarrative. Suddenly, there is more sympathy for Taiwan, for example. More people in Europe and the United States are starting to be uneasy about the ways in which Confucius Institutes are allowed to operate in Western establishments without similar freedoms for Western equivalents in Chinese ones. They wonder why Chinese can buy, invest, and work so freely in their environments while it is so difficult for foreigners to do the same back in China. They wonder why Chinese lobbyists and activists are able to freely express their ideas in London, Sydney, or Washington, and seek to influence outcomes that matter to them there, when there is precious little space for this sort of activity back in China.

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