Banks Have a Mountain of Deposits So They Don’t Need PPP Funding

A record surge in bank deposits has given U.S. lenders more cash than they know what to do with. One thing they don’t need: help from the Federal Reserve to fund the government-backed loans they made to small businesses.

Banks had tapped only $49 billion from the Paycheck Protection Program Liquidity Facility by May 27 as they loaned $511 billion, according to the central bank and the U.S. Small Business Administration. That’s largely because lenders are sitting on $1.8 trillion of new deposits that have flooded in since March 11 — a 13% increase, and the biggest two-month jump since at least 1973, when comparable data is available.

“It looks like this excess liquidity in the banking system is going to stick around much longer,” said Brian Klock, a bank analyst at Keefe, Bruyette & Woods. “So if you don’t really need it, why get the Fed loan?”

Deposits have surged as drops in securities markets and interest rates for bonds and money market funds pushed savers and investors to banks. Also, a jump in corporate borrowing amid the pandemic has ended up as deposits back at the banks.

The Fed loans are pretty cheap at 0.35%, but then deposit costs have gone down considerably as well. Interest-bearing deposits cost JPMorgan Chase & Co. 0.52% in the first quarter, and Bank of America Corp. paid 0.47% while the average was around 1% for smaller lenders. Meanwhile, non-interest-bearing accounts made up about 30% of all deposits at the four biggest banks, giving them cheaper funding than the Fed’s rate.

Among the top U.S. firms, only Citigroup Inc.’s name showed up on the list of 574 banks that used the Fed’s lending facility as of May 6. Citigroup has borrowed $1.3 billion from the central bank to fund some of the $3.3 billion loans it had made by May 1. It had the highest deposit cost among the four biggest banks in the first quarter at 1.1%, and the smallest deposit base. A Citigroup spokesman declined to comment.

While the PPP loans stay on the banks’ balance sheets, they’re risk-free because the SBA guarantees payment — and many will become government grants if companies meet certain criteria. Only a small portion are likely to mature to full term, KBW’s Klock estimates. Depending on how much of the loans are still outstanding and if liquidity gets tighter, banks can still access the Fed’s facility in the next two years.

One deterrent to borrowing from the Fed is political. Many banks probably want to stay off the list of borrowers to avoid the impression of government support for the industry, according to executives and others familiar with their decision-making.

ConnectOne Bancorp Inc., a regional lender in New Jersey, is among the top borrowers of the Fed facility, using $344 million of funds to cover about 75% of the PPP loans it has made. The bank has a 109% loan-to-deposit ratio. Small banks that are lending more than what they hold in deposits have to turn to other sources of funding, such as the Fed’s facility.

Even if the Fed’s lending or buying facilities are underutilized, they provide a backup for the market, Bank of America Chief Executive Officer Brian Moynihan said.

“The fact that those facilities aren’t all used is actually good news,” Moynihan said in a May 19 interview with Bloomberg Television. “That means you’re seeing stability in the funding structures.”

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Govt unlikely to tweak GST rates on non-essential items

Retaining the GST rate assumes importance since states are under pressure to increase their revenues, hit hard by lockdown.

Also, the Centre has not fully compensated states for their revenue losses on account of GST for 2019-20.

Top government officials recently hinted that the finance ministry may not push for hiking Goods and Services Tax (GST) rates on non-essential goods in a bid to bolster demand in the economy.

The GST Council is set to hold its first meeting in June after a national lockdown was enforced by the government on March 25 to curb the spread of the novel coronavirus.

“The demand for all goods, especially non-essential items, has to be induced. Tax-related measures will be taken up for discussions in the GST Council meeting.

“After the lockdown is lifted, economic activity has to improve on all counts.

“Though demand for essential items hasn’t been affected much,” a top government official said, requesting anonymity.

But the government will have to find ways in which essential and non-essential items can be segregated.

The present lockdown norms, which have considerably allowed economic activities, were in force till May 31.

Retaining the GST rate assumes importance since states are under pressure to increase their revenues, hit hard by lockdown.

Also, the Centre has not fully compensated states for their revenue losses on account of GST for 2019-20.

Compensation is to be released to states on a bi-monthly basis.

However, due to the falling GST compensation cess collection, the Centre held back fund transfer to states beginning August.

Following this, states raised the matter with the Centre, and in December 2019, Rs 35,298 crore was released as compensation for August-September.

Also, Rs 34,053 crore was released in two instalments in February and April as compensation for October-November.

On the other hand, industries such as automobiles are demanding cut in the GST rates to increase their sales.

After easing curbs on economic activities, the government’s feedback from the industry is that in manufacturing hubs, factories are operating at 20-35 per cent capacity.

“Economic activity is beginning to start slowly.

“There is difficulty in terms of bringing back the workforce but business models are being re-cast in such a manner that they are now hiring locals at higher cost, offering them some incentives,” the official said.

The labour and employment ministry is gathering data on the potential job loss as a result of the national lockdown enforced in March and it will hold discussions with the state governments on mobilising on how to bring back the migrant workers to factories, the official said.

The government is not ruling out monetising the fiscal deficit.

“We will try to cross that bridge when it comes,” the official said, on being asked if the government is considering monetisation of fiscal deficit.

With revenues dipping and expenditures rising, the Centre’s fiscal deficit is expected to cross five per cent against 3.5 per cent pegged in the current financial year. Also states have been given leeway to increase their fiscal deficit till 5 per cent with some riders.

Even as the Centre has increased its proposed market borrowings by Rs 4.2 trillion for FY’21, many experts believe that this would not be enough and the RBI will have to directly buy the government bonds or in other words monetise the fiscal deficit which means printing more currency notes.

The official explained that the government had weighed the option of cash transfers while announcing the economic stimulus package, which was officially pegged at Rs 20 trillion, but decided against it due to large possible exclusions.

“We wanted the money to reach a point which triggers economic activities,” the official said.

The government is actively discussing the idea of a ‘bad bank’ which was also taken up briefly in the Financial Stability and Development Council (FSDC) meeting chaired by Finance Minister Nirmala Sitharaman on Friday.

“Though it is being regularly discussed but the idea has not moved forward,” the official said.

State Bank of India chairman Rajnish Kumar had said earlier in May that banks are discussing the idea to create a ‘bad bank’ in the form of an asset reconstruction company to deal with stressed assets.

The FSDC meeting also discussed ways in which the Securities and Exchange Board of India can bring in systematic reforms to bring down stock market volatility.

“If you look at the recent SEBI circulars, it took measures to curb speculative trade.

“More steps will be taken on those lines,” another finance ministry official said.

It discussed ways in which domestic investors can be given some support and how international investors can connect with joint venture partners in India.

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Michael Jordan “Saddened” And “Angry” Over Death Of George Floyd: “We Must Work Together To Ensure Justice For All”

Sports legend and basketball icon Michael Jordan has joined prominent names in the Black community in regards to the murder of George Floyd.

Jordan’s manager and spokeswoman, Estee Portnoy released his statement via social media: “I am deeply saddened, truly pained and plain angry. I see and feel everyone’s pain, outrage and frustration. I stand with those who are calling out the ingrained racism and violence toward people of color in our country. We have had enough.”

He continued, “I don’t have the answers, but our collective voices show strength and the inability to be divided by others. We must listen to each other, show compassion and empathy and never turn our backs on senseless brutality,” Jordan added. “We need to continue peaceful expressions against injustice and demand accountability. Our unified voice needs to put pressure on our leaders to change our laws, or else we need to use our vote to create systematic change. Every one of us needs to be part of the solution, and we must work together to ensure justice for all.”

He concluded, “My heart goes out to the family of George Floyd and to the countless others whose lives have been brutally and senselessly taken through acts of racism and injustice.”

Jordan, who is the subject of ESPN’s critically acclaimed docuseries The Last Dance, is one of many cultural figures, networks, and media entities in the past week who have denounced racism, police brutality, inequality and the protection of Black lives.

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NYC’s Finance Jobs Won’t Recover for Six Years, Analysis Shows

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New York City’s finance industry won’t recover from the devastation wrought by Covid-19 until 2026, according to an analysis by software firm ThinkIQ that ranks U.S. employment markets.

The NYC region lost about 8% of its finance jobs this year, down from its peak of more than 800,000 last August. Coronavirus, which has killed at least 21,000 New Yorkers so far, isn’t the culprit in all of those cuts. But the lockdown stemming from the illness caused a domino effect on everything from rents to mortgage payments.

The finance sector spans industries ranging from banking and securities to real estate and insurance. Most Wall Street firms pledged not to cut staff during the pandemic, but Bloomberg reported last month that Cantor Fitzgerald was planning to lay off hundreds of workers due to the virus.

ThinkIQ, based in Aliso Viejo, California, uses 10 key economic indicators to rank U.S. employment markets — including job and wage growth, demographics and educational attainment. New York ranks No. 1 in population but doesn’t fare as well in other metrics such as wage increases (No. 47) and job growth (No. 143).

New York was rated the world’s leading financial market by the Global Financial Centres Index by Z/Yen Partners in collaboration with the China Development Institute and according to a survey from Duff & Phelps.

The city that never sleeps has shown its resiliency multiple times in the last 20 years, including from the Great Recession. ThinkIQ predicts that the employment level will be almost back to 2019 levels in six years.

Most industries will take years to recoup. Employment in the leisure and hospitality arena, for instance, is expected to reach only about 90% of its 2019 level by 2026, the latest year in the forecast.

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April’s GST collection falls 87% to Rs 5934 cr

The data primarily pertains to activities in March, which had only a few days under the Covid-19 lockdown. For April , hence, CGST collections could be much lower, fear analysts. 

Central goods and services tax (CGST) collection stood at Rs 5,934 crore in April, a fall of 87 per cent compared with the Rs 46,848 crore collected in the same month last year, according to the official data. 

The data primarily pertains to activities in March, which had only a few days under the Covid-19 lockdown. For April , CGST collection could be much lower, fear analysts. 

CGST is levied on intra-state supply of both goods and services by the central government. The slowdown in revenue collections could be attributed to the nationwide lockdown and the deferment of payment as well as return filing during March-May.  

From the data, it is not possible to deduce the overall GST collection since state GST (SGST) is usually higher than CGST. 

For instance, CGST stood at Rs 19,183 crore and SGST at Rs 25,601 crore in March 2019-20. The Budget has pegged CGST at Rs 5.8 trillion for 2020-21, which means Rs 48,333.33 a month on average. However, the Budget figures are outdated due to the outbreak of Covid-19 and the resultant lockdown. 

Abhishek Jain, tax partner, EY, said the due date of GST collection for activities in March was April 20. However, as part of the Covid-19 relief measures, the government had offered a 15-day interest-free grace period till May 5. 

“It seems, many taxpayers have opted for the grace period and hence the low collections,” he said. He said the larger impact was expected to be witnessed in collections for activities in April. 

Then, there is an issue of integrated GST, as it is not clear as to how much of it is allocated to the states. IGST stood at Rs 9,749 crore in April. It was, however, much higher than minus Rs 564 crore in April last year. The minus figure represents more allocation to the states than collected by the Centre. 

“Without the final IGST settlement among states and the Centre, accurately determining the excess deficit in state GST revenues would be difficult,” Jain said.  

The government had earlier announced that registered GST taxpayers with aggregate annual turnover less than Rs 5 crore can pay taxes and file GSTR-3B due in March, April, and May by the last week of June 2020. For such taxpayers, no interest, late fee, and penalty were to be charged. Those with annual turnover of at least Rs 5 crore can pay taxes till May 5 for March without any interest cost. 

However, if it is paid after this date and by June 30, an additional 9 per cent interest rate will be levied. This interest rate is half of the current rate of 18 per cent a year.

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‘China will recover faster than many countries’

‘COVID-19 will not stop the expansion of China’s ‘infrastructure power’.’

Mikko Huotari, executive director, Mercator Institute of China Studies, a Germany-based institute on China, is an expert on China’s foreign policy, China-Europe relations and global (economic) governance and competition.

He has published works on China’s rise as a financial power, trade and investment relations with Europe as well as on geopolitical shifts related to China’s emergence as a global security actor.

“Xi Jinping has managed to quell those that could undermine his position,” Huotari tells Aditi Phadnis.

China’s economy is expected to contract severely as a result of the pandemic.
What are the implications of this contraction for Europe, the US and the rest of Asia?

Europe and the rest of the world will not ride this crisis on the back of China’s growth as it did a decade ago.

But China will rebound faster than many other countries.

The depth of the valley in China’s growth outlook will be a key driver of uncertainty for neighbouring Asian economies.

If the crisis in China turns into a structural one and business risks accumulate, some Asian economies may benefit from relocation.

What happens to China’s Belt and Road initiatives now, given that it is not able to throw free cash at countries around the globe any more?
Will its global ambitions face a setback?
Or will it now be even more determined to strengthen its presence in the absence of competitors?
Are we looking at a global China resurgence?

The first important question will be whether and under which conditions China will allow for debt relief to loan recipients and BRI clients across the world.

The financial conditions for a massive expansion in BRI projects are clearly not in place in China.

Major financiers such as the China Development Bank will also be requested to help with domestic recovery first.

What COVID-19 will not stop is the structural trend towards the expansion of China’s ‘infrastructure power’, its SOEs and coordination of ‘credit spaces’ by its State-led financial system.

Even as he attempts to stabilise China’s global position, President Xi Jinping will face many domestic challenges: From those who question his ‘victory’ over the pandemic and those who seek to undermine his presence as the supreme leader of the Chinese Communist Party.
Do you see a struggle for power breaking out?

There are continuous struggles for power happening behind the curtains in Beijing. Just recently, a well-connected senior figure from the security apparatus fell.

But Xi Jinping has managed to quell those that could undermine his position.

He, and the CCP more generally, seems to be coming out of this crisis strengthened.

What will matter most for his reign will be economic performance going forward and this will suffer a hit.

A hallmark of Xi Jinping’s current spell of leadership was his battle against corruption.
Do you see this slowing down?

There are no indications for that — what we see is an institutionalisation of party disciplinary and control mechanisms over other spheres of the society, business and politics.

Reconstructing the domestic economy is not going to be easy: State-owned businesses will need funds and morale, private sector firms will need encouragement.
How do you see China handling this?

So far, the leadership was quite restrained with regard to a potential massive stimulus programme.

Everyone in Beijing is fully aware that it is thin tightrope to walk balancing stimulus and stability with the necessary structural reforms.

As the crisis becomes more entrenched as a sustained weakness of demand (internal and global), this balance will be harder to hold.

They will face choice then between letting the private sector and foreign companies drive the recovery – more reforms and more opening up — or doubling-down on State-led development and stability.

The latter is more likely.

In many countries around the world, the pandemic has led to a revival of nationalism.
China has its own challenges in managing nationalities.
What do you predict for its handling of Xinjiang, for instance, or Hong Kong?

There was already a strong trend towards less tolerance vis-a-vis ‘dual identities’; be it in Xinjiang, Hong Kong or Macao.

And this has now accelerated.

The leadership in Beijing seems to be on track to create new and hard facts this year in Hong Kong to prevent any further distancing from the mainland and resistance.

Vis-a-vis Taiwan, we also see a tougher line emerging.

And it remains, unfortunately, fully secret how the COVID-19 crisis has or is affecting Xinjiang, including the situation of minorities in the ‘re-education camps’ there.


Production: Ashish Narsale/

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Agriculture grew 4% in FY19-20, but what about this year?

As the growth figures relate to the pre-lockdown period, it does not reflect the real picture of distress which unfolded from April onwards.

Despite dismal overall economic growth last year, India’s agriculture and allied activities registered an impressive 5.9 per cent growth in the fourth quarter (January to March) of the previous fiscal. More importantly; the growth at current prices was expected to be around 13 per cent in same period, which translates into an inflationary impact of around 7.4 per cent. 

The difference between agriculture GVA in current and constant prices, which according to some experts gives a broad idea of how farmers’ incomes are moving stood at 7.1 per cent in fourth quarter of last year, up from 5 per cent during the same period last year but slightly lower than 10.3 per cent of the previous quarter. 

For the full financial year (2019-20), agriculture and allied activities GVA was pegged at 4 per cent, which was near the long-term trend for the sector, while growth at current prices during the same period was estimated at 11.4 per cent, meaning an inflationary impact of 7.4 per cent. 

Farm sector growth during 2018-19 was estimated at 2.4 per cent at constant prices and 4.5 per cent at current prices. 

However, as the data relates to pre-Covid lockdown period it does not reflect the real picture of distress which unfolded from April onwards in the sector, when acute supply disruption led to sharp drop in prices of many commodities, largely perishables, impacting farmers. 

“The positive data for agriculture and allied activities in 2019-20 is mainly on account of a good southwest monsoon, which translated into record kharif and rabi harvests. But all of that might not translate into larger incomes for farmers, because when the produce reached the market, prices of several crops had crashed,” Madan Sabnavis, chief economist CARE Ratings told Business Standard

Moreover, the impact of the Covid lockdown will be felt in the first quarter of 2020-21, data for which will be out after a few months. 

The impact will be even more pronounced as farmers’ income has started showing some semblance of improvement in 2019-20 after years of remaining low, particularly in non-crop sector such as milk, meat and also eggs. 

In the 2019-20 financial year, one big factor that pushed up farm growth was the superlative performance of the southwest monsoon. 

Monsoon rains in 2019, was 110 per cent of the Long Period Average (LPA), which was the best in last 25 years. 

The last time India received rainfall more than 2019 was in 1994, when the actual rainfall in the country was 110 per cent above average rainfall during the June to September southwest monsoon season. 

Because of the good rains, which incidentally picked up pace after the first month, India total food grains production that includes both kharif and rabi is projected to be at a record 292 million tonnes, which is 2.36 per cent more than 2018-19.

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General Electric CEOs: A short but notable list

Former GE CEO Jack Welch was ‘something special’: Bob Wright

Former General Electric Vice Chairman Bob Wright remembers Jack Welch.

General Electric, once one of the world's premier industrial giants, was built by just a handful of CEOs most of whom were groomed internally.

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However, in recent years, the 2008 financial crisis combined with a strategy that failed to produce results, has pushed the share price below $10.

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During its prime, the company was known to be a key holding for "orphans and widows" because of its steady dividend. However, in October 2018 management was forced to slash it to one cent to conserve cash. Additionally, after over 110 years, the company was yanked from the Dow Jones Industrial Average in 2018.

FOX Business takes a look at the leaders that built GE up, those blamed for its demise, and the current CEO tasked with reviving the battered icon.

Jack Welch: 1981-2001

REUTERS/Lucas Jackson 

The Massachusetts native joined GE in 1960 rising through the ranks to become CEO in 1981. Welch went on to catapult the company into one of the strongest industrial giants in the world.

According to a company bio, "In 1980, the year before Welch became CEO, GE recorded revenues of roughly $26.8 billion; in 2000, the year before he left, they were nearly $130 billion."

He also had a reputation for ruling with an iron fist with GE describing his management skills as "legendary."

Following his passing in March 2020 after an illness, President Trump praised Welch as a corporate professional and a friend. "There was no corporate leader like “neutron” Jack. He was my friend and supporter…" Trump tweeted.


Jeff Immelt: 2001-2017

Jack Welch, Jeff Immelt

In 2001, Jeff Immelt, who once ran GE's Medical Systems business, beat out two of his colleagues for the coveted spot: Robert Nardelli, president and CEO of GE Power Systems, who went on to lead Home Depot and James McNerney, head of GE Aircraft Engines, who later led 3M and Boeing.

During his 16-year tenure as CEO, Immelt diversified the industrial company. For example, GE whittled down its finance arm, GE Capital, to become a simpler enterprise. It also sold its appliance unit to Chinese manufacturer Haier for $5.6 billion. At the same time, Immelt was pushing into areas such as the 'Internet of Things' and he also took a stake in oil giant Baker Hughes.

His strategy irked longtime investors who feared GE was becoming too complicated as the stock underperformed the S&P 500 for years. He was forced out in June 2017.

As FOX Business reported, before his death, Welch was on fire over the state of the company, while Nardelli told FOX Business he was "heartbroken" after GE was yanked from the Dow Jones Industrial Average.


John Flannery: 2017-2018

GE insider John Flannery, who led a turnaround at GE Healthcare, became the company's 11th CEO following the resignation of Immelt. He officially took the helm that August. Despite the familial changing of the guard, Flannery was inheriting a basket of issues, including whether or not the company's generous dividend could be saved. It couldn't.


On October 1, 2018, Flannery was booted, effective immediately, and was replaced by former Danaher CEO Lawrence Culp, who was also a GE board member. Culp won praise from several investors after the announcement.

Larry Culp: 2018-Present

Culp is  GE's 12th CEO and holds a "B.A. in Economics from Washington College and an MBA from Harvard Business School" according to his company bio.

While he is well respected on Wall Street say, shareholders, he too is facing challenges in reviving GE.

More recently, the fallout from the coronavirus has taken its toll, especially in the aviation unit. Speaking at a Bernstein conference in late May 2020, Culp warned that cash flow will be negative.


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Pentagon Puts Military Police on Alert to Go to Minneapolis

Delray Beach, Fla. (AP) — As unrest spread across dozens of American cities on Friday, the Pentagon took the rare step of ordering the Army to put several active-duty U.S. military police units on the ready to deploy to Minneapolis, where the police killing of George Floyd sparked the widespread protests.

Soldiers from Fort Bragg in North Carolina and Fort Drum in New York have been ordered to be ready to deploy within four hours if called, according to three people with direct knowledge of the orders. Soldiers in Fort Carson, in Colorado, and Fort Riley in Kansas have been told to be ready within 24 hours. The people did not want their names used because they were not authorized to discuss the preparations.

The get-ready orders were sent verbally on Friday, after President Donald Trump asked Defense Secretary Mark Esper for military options to help quell the unrest in Minneapolis after protests descended into looting and arson in some parts of the city.

Trump made the request on a phone call from the Oval Office on Thursday night that included Esper, National Security Advisor Robert O’ Brien and several others. The president asked Esper for rapid deployment options if the Minneapolis protests continued to spiral out of control, according to one of the people, a senior Pentagon official who was on the call.

”When the White House asks for options, someone opens the drawer and pulls them out so to speak.” the official said.

The person said the military units would be deployed under the Insurrection Act of 1807, which was last used in 1992 during the riots in Los Angeles that followed the Rodney King trial.

“If this is where the president is headed response-wise, it would represent a significant escalation and a determination that the various state and local authorities are not up to the task of responding to the growing unrest,” said Brad Moss, a Washington D.C.-based attorney, who specializes in national security.

Members of the police units were on a 30-minute recall alert early Saturday, meaning they would have to return to their bases inside that time limit in preparation for deployment to Minneapolis inside of four hours. Units at Fort Drum are slated to head to Minneapolis first, according to the three people, including two Defense Department officials. Roughly 800 U.S. soldiers would deploy to the city if called.

Protests erupted in Minneapolis this week after video emerged showing a police officer kneeling on Floyd’s neck. Floyd later died of his injuries and the officer, Derek Chauvin, was arrested and charged with third-degree murder and manslaughter on Friday.

The protests turned violent and on Thursday rioters torched the Minneapolis Third Police Precinct near where Floyd was arrested. Mayor Jacob Frey ordered a citywide curfew at 8 p.m. local time, beginning on Friday. In that city, peaceful protests picked up steam as darkness fell, with thousands of people ignoring the curfew to walk streets in the southern part of the city. Some cars were set on fire in scattered neighborhoods, business break-ins began and eventually there were larger fires.

The unrest has since spread across the country, with protests, some violent, erupting in cities including Washington DC, Atlanta, Phoenix, Denver and Los Angelas.

Minnesota Governor Tim Walz ordered 500 of his National Guard troops into Minneapolis, St. Paul, and surrounding communities.

But a Pentagon spokesman said Walz did not ask for the Army to be deployed to his state.

“The Department has been in touch with the Governor and there is no request for Title 10 forces to support the Minnesota National Guard or state law enforcement,” the spokesman said, Title 10 is the U.S. law that governs the armed forces, and would authorize active duty military to operate within the U.S.

Alyssa Farah, the White House director of strategic communications, said the deployment of active-duty military police is untrue.

“False: off the record – title 10 not under discussion,” said Farah in an email response. No off-record agreement was negotiated with The Associated Press.

The 16th Military Police Brigade forwarded the AP’s questions to the Defense Department.

The three officials with direct knowledge of the potential deployment say the orders are on a classified system, known as the Secret Internet Protocol Router or SIPR for short.

Active-duty forces are normally prohibited from acting as a domestic law enforcement agency. But the Insurrection Act offers an exception.

The Act would allow the military to take up a policing authority it otherwise would not be allowed to do, enforcing state and federal laws, said Stephen Vladeck, a University of Texas School of Law professor who specializes in constitutional and national security law.

The statute “is deliberately vague” when it comes to the instances in which the Insurrection Act could be used, he said. The state’s governor could ask President Donald Trump to take action or Trump could act on his own authority if he’s determined that the local authorities are so overwhelmed that they can’t adequately enforce the law, Vladeck said.

“It is a very, very broad grant of authority for the president,” he added.


Associated Press reporters Lolita Baldor, Michael Balsamo, and Zeke Miller contributed to this story.

Contact AP’s global investigative team at [email protected]

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European Shares Seen Opening On Firm Note

European stocks are seen opening higher on Monday as investors react to reports that Japan is looking to lift a state of emergency for Tokyo and remaining areas and also considering fresh stimulus worth almost $1 trillion to help companies ride out the coronavirus pandemic.

U.S. markets are closed today for Memorial Day holiday, while the U.K. is shut for the Spring bank holiday.

Asian markets are moving higher, even as Hong Kong shares extended losses after the city was rocked by protests at the weekend over a controversial proposed security law.

The dollar edged higher and oil prices fell after the U.S. Commerce Department added as many as 33 Chinese companies and other institutions to a blacklist for human rights violations and to address U.S. national security concerns involving weapons of mass destruction and other military activities.

On Sunday, China’s foreign minister said the U.S. was pushing relations between the two to “the brink of a new Cold War”.

Meanwhile, Greece, Germany and the Czech Republic are preparing to allow bars and restaurants to begin serving again. Primary schools in parts of England are set to reopen from Jun 1.

Elsewhere, the United States has banned flights from Brazil as the Latin American country sees deaths and infections spiral.

In economic news, business sentiment and revised quarterly national accounts data from Germany are due later in the session, headlining a light day for the European economic news.

U.S. stocks ended mixed on Friday as rising U.S.-China tensions amid fresh turmoil in Hong Kong kept investors nervous ahead of a three-day weekend.

The Dow Jones Industrial Average edged down marginally, while the tech-heavy Nasdaq Composite rose 0.4 percent and the S&P 500 added 0.2 percent.

European markets also turned in a mixed performance on Friday as the minutes of the European Central Bank’s April meeting showed the bank was “fully prepared” to add stimulus again next month, in an attempt to support the economy amid the coronavirus pandemic.

The pan European Stoxx 600 ended flat with a negative bias. The German DAX inched up 0.1 percent, while France’s CAC 40 index finished marginally lower and the U.K.’s FTSE 100 dropped 0.4 percent.

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