MAR 31 17 SIT EC y POL
ND denuncia debacle of neoliberal Globaliz y
propone State-Social + Capit-compet in Econ
ZERO HEDGE ECONOMICS
Neoliberal
globalization is over. Financiers know it, they documented with graphics
Since the election, talking heads have crowed about
improving economic data (macro- and micro-). However, what they have failed to
mention is all of the improvements have been in 'soft' survey and sentiment
data, not 'hard' economic figures; and now, judging
from the plunge in Goldman Sachs Analyst Index, soft data is starting to lose
faith rapidly.
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Another dataset, another head-scratching disparity between ostensibly
fulsome confidence and evidently sluggish activity. While
markets get whipsawed reacting to divergent hard and soft data points, the question that traders need to
ask is whether this gap makes any sense.
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The global recession explained
"Go
long gold in anticipation of potential manias, panics or crashes."
As Hartnett explains,
the catalyst for bull in equity and credit markets since 2009 was the
"revolutionary monetary policy of central banks" who, since
Lehman, "have cut rates 679 times and bought $14.2tn
of financial assets." And, once again, he warns that
this central bank “liquidity supernova” is coming to an end, as is "the
period of excess returns in equities and corporate bonds, as is the period of
suppressed volatility."
Demonstrating how
insane just the past year has been in markets, Hartnett reminds us that just
eight months ago belief in debt deflation & secular
stagnation induced lowest interest rates in 5000 years.
- On July 11th 2016 Swiss government could have issued 50- year debt out to 2076 at a negative yield (of -0.035%)…
- …and in 1989 the Imperial Palace in Tokyo worth more than all real estate in California…
- …and in March’2000 the market cap of Yahoo was 25X greater than market cap of Chinese equity market (MSCI)…
- …and in 2008 the combined assets of Iceland’s three biggest banks were 14 times the size of the nation’s GDP…
- …all manias, all over now.
The period of great confusion is slowly coming to an end:
what happens next is split into two phases - the famous "Icarus
Trade" popularized by Hartnett several months ago, which the BOFA
strategist believes will send the S&P above 2,500 and the yield on the 30Y
to 3.5%, before the next "Great Fall" trade emerges.
First, a look at the near-term forecast:
We believe we are closer to the
highs than lows in risk markets. But tops are a process; lows are a moment. The hubris, monetary
tightening and macro peak that normally ends a strong bull trend feels H2 not
Q2. So our base case unchanged heading
into spring.
For those who wish to trade this last, marketwide blow-off
top, Hartnett has several "favorite Q2 trades": the US$, sterling,
oil and banks.
The risk to our bullish Q2 call
is the price action of 3C’s (China, commodities, credit) deteriorates and
signals synchronized global Profit top, on back of PBoC tightening. Commodity
prices must rise to maintain equity outperformance versus bonds: BofAML
forecast oil @ $57/b in Q2. EPS resilience required for stocks to continue to
outperform bonds.
Hartnett also presents "a nice Icarus stat":
"should the S&P500 exceed 2540 in conjunction with a 3% yield on the
10-year Treasury bond then US stocks will reach an all-time high versus US
bonds, exceeding the prior tech bubble peak reached in March 2000"
Still, all great -
if abnormal and fake - bull markets and manias come to an end
eventually, and Hartnett
warns that what follows the final, Q2 "Icarus" rally will be far less
enjoyable, because that's when the infamous "great fall" is set to
take place.
“Great
Fall” potentially comes in H2 as hubris, synchronized monetary tightening, EPS
peak coincide; buy long-dated puts in anticipation; we
believe best time to sell would likely be after a pop induced by a US tax
reform bill (March Fund Managers Survey showed only 10% of institutions expect
US tax reform passed before summer recess).
And yes, the Fed will
likely try to step in again with more rate cuts to prevent a crash,
although this time it won't work at least according to Hartnett, because after the "Great Fall"
comes the Long View, which Bank of America describes simply as: Manias, Panics, Crashes
Humiliation remains one of the best assets to
buy.
In Feb 2009 the 10-year rolling
return from US large-cap stocks humiliatingly dropped to -3.4%, lowest since
1930s.
Since then S&P 500 up from 676
to 2368; now second longest bull ever (longest ever if runs past August 22nd
2018), and becomes 3rd largest ever at 2467.
His conclusion is two
fold.
On one hand, "our Longest
Pictures argue for a treacherous period of potential manias, panics or
crashes as policy makers try to normalize policy."
And this is how to
trade it:
- The beneficiaries of rising inflation and rates are many.
The long-run price relative of real assets (real
estate, commodities, and collectibles) to financial assets (stocks and bonds) is
at its lowest level since 1926.
Bull markets in real assets have coincided with
war and fiscal stimulus programs in 1940s, rise of inflation in 1960s and
1970s, and 9/11 &
China accession to WTO in the early years of this century.
Higher inflation and interest rates are consistent
with real assets outperforming financial assets: since 1970, relative performance of real assets 83%
correlated with inflation.
His best trade
recommendation?
"Buy gold."
….
Source.see big graphics at: http://www.zerohedge.com/news/2017-03-31/bank-america-unexpectedly-warns-coming-manias-panics-and-crashes
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It was a
week when the world was supposed to come to an end, notes
Bloomberg's Richard Breslow, but then it didn’t... However, next week’s big
events include a meeting between the Chinese and American presidents. Don’t underestimate the importance of it or the market
interest it will garner.
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We are perfectly primed for the greatest financial disaster in American history,
and yet very few people are sounding the alarm...
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We want
growth by default, we want growth for growth’s sake, without caring much where
it will lead us. Maybe we think unconsciously that as long as we can
secure growth, we can figure out what to do with it later. But it doesn’t work that way...
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"The warning signs are
there for anyone willing to see, and they are flashing
red. Even cursory research into the numbers underlying our system
will tell you that we’re on an unsustainable
financial path. It’s simple math. And
yet the system has proven far more durable than most people thought... The only
reasonable explanation I can think of, is that the
system is being held up by wishful thinking and willful ignorance."
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“The United States have developed a new weapon that destroys people but it leaves buildings
standing. It’s called the stock market...”
Here the suggested reading:
Trump/Fed/Economy
- Retailing In America: Game Theory In Reverse by Danielle DiMartino-Booth via Money Strong
- Political Noise Can’t Drown Out Russia by James Rickards via Daily Reckoning
- Trump Faces An Even Bigger Debacle by David Stockman via Daily Reckoning
- Will Tax Reform Boost Economic Growth by James Picerno via Capital Spectator
- Building More Apartments Than Renters by Akin Oyedele via BI
- #MAGA Poll Explodes To Highest Since 70’s by Bob Bryan via BI
- GOP Failure On AHCA Just The Beginning by Glenn Reynolds via USA Today
- The Reason Why Significant Tax Reform Hasn’t Happened Since 80’s by Pedro Da Costa via BI
- Trumps Poll Numbers Low, Can He Boost Them? by Jake Novak via CNBC
- Tax Reform Not As Simple As It Sounds by Caroline Baum via MarketWatch
- No, Tax Reform Won’t Be Easier Than AHCA by Howard Gleckman via Forbes
- GOP Nightmare: $2 Trillion Funding Hole by Tyler Durden via Zero Hedge
- Tax Cuts Can’t Be Financed By Cutting Waste by Mark Thoma via Fiscal Times
- GOP Will Struggle To Win Tax Reform by William Gale via RCM
- Trump’s Tax Approach Could Look Like Obama’s by Andrew Ross-Sorkin via NY Times
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Markets
- Don’t Mistake A Bubble For Economic Growth by Jesse Colombo via Forbes
- Raoul Pal: Everyone Is On The Wrong Side Of Bonds by Jonathan Garber via BI
- Market Impact Of AHCA Failure Unclear by Mohamed El-Erian via Bloomberg
- Two Fed Presidents Warn Of Valuations by Tyler Durden via Zero Hedge
- As Markets Sag, Might Be Time To Be Bullish by Avi Gilburt via MarketWatch
- Why Long-Term Stock Returns Look Miserable by Anora Mahmudova via MarketWatch
- No Indication Bull Market Is Slowing Down by Andrew Slimmon via US News
- Corporate Profits Have Stalled by Anthony Mirhaydari via Fiscal Times
- Yes, The Trump Rally Is Over by Jeff Reeves via The Hill
- Fear Threatens Market Comeback by Mark DeCambre via MarketWatch
- Post-Election Rally May Be Repealed & Replaced by Doug Kass via Real Clear Markets
- Stock Rally Could Last Until 2018 by Avi Gilburt via BI
- Dollar Will Lead Stocks Lower by Erik Swarts via Market Anthropology
- Market Strength Has Little To Do With Trump by Michael Brush via MarketWatch
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Research /
Interesting Reads
- How Many Jobs Do Robots Destroy by Wolf Richter via Wolf Street
- Mnuchin Says Not To Worry About Robots by Elena Holodny via BI
- Optimistic Americans Losing Hope by John Mauldin via Maulding Economics
- The Holy Grail: Fair Value Of Equity Market by Research Affiliates
- Robots: The 4th Industrial Revolution by David Kelnar via Medium
- Pensions Crisis Coming by Stephen McBride via Forbes
- 10-Retirement Stats Every Boomer Should Know by Maurie Backman via Motley Fool
- Asset Price Collapse Is Biggest Economic Risk by Martin Feldstein via Project Syndicate
- White Working Class In Big Trouble by Noah Smith via Bloomberg
- Hayek Saw It Coming 70-Years Ago by Tyler Durden via ZeroHedge
- Say’s Other Law by Sandwichman via EconoSpeak
- $17 Trillion Will Vanish In This Cycle by John Hussman via Hussman Funds
- Can Small Caps Turn It Around? by Dana Lyons via Tumblr
- Bogle’s 4% Return Estimate May Be Optimistic by Jesse Felder via The Felder Report
….
Here a gift from Lance Roberts via RealInvestmentAdvice.com,
Our assessment has
not changed in the past week, and already we are beginning to discussions
of border wall construction being postponed, along with infrastructure
spending, and tax cuts being whittled down to just
28% for corporations vs. 15-20%.
The last point is the most important given that current
valuations in the market are currently being supported by the notion that tax
cuts will lead to a profits expansion. The issue, however, remains that
while profits may expand from paying lower taxes, and could be much less than
currently hoped for, top line revenue growth still remains a missing ingredient
as shown in the chart below.
While anything is
certainly possible, there is the simple issue that
economic cycles do NOT last forever. With wage
growth still stagnant, debt levels rising and inflation coming from all the
wrong areas (health care, rent & gasoline), the risk of
disappointment in the “hope” trade is very high.
Of course, you
combine the risk of a “fiscal policy” error with the Fed on a “monetary
policy tightening” cycle and you have all the
ingredients for a bad outcome.
But then again, maybe this time will indeed “be
different.”
….
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RBC's head of cross asset strategy Charlie McElligott dons his full
wonksh equity analyst hat today, exposing "The April Effect," and the specific risk of "nasty double whammy" of levered
long-short unwinds should momentum stall.
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POLITICS
La seudo democ USA y su sistema duopolico es
obsoleto por fraudulento y corrupto
In just
a few moments, Trump is set to sign a pair of executive orders which will
initiate a 'yuge' review of America's trade deficits and look to impose
restrictions on countries that perpetually "cheat on trade."
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If you’re one of the countless Americans who was distraught to learn of
the revelations made by former National Security Agency (NSA) contractor Edward
Snowden, the mere idea that
there might be yet another agency out there - perhaps just as powerful and much
more intrusive - should give you goosebumps.
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"Unmasking is not
unprecedented, but unmasking for political purposes
... specifically of Trump transition team members ... is highly suspect and
questionable. Opposition by some in the intelligence agencies who
were very connected to the Obama and Clinton teams was strong. After Trump was elected, they decided they were going to ruin
his presidency by picking them off one by one."
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WORLD ISSUES and ME
Depression is on at
global level. China, RU, Iran, n LA search to mix of State socialis+K- compet
It was China, whose gargantuan credit
expansion, monetary easing and "Shanghai Accord" in early 2016
unleashed the global reflationary wave which central banks are currently
mistaking for "growth." It is only appropriate that China will be the
catalyst that ends it.
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Price manipulation is not a coincidence.. its is a planned
act by US NATO.. to put down VEN
For the 11th week in a row, the number of US
oil rigs rose (up 10 to 662 - the
highest since September 2015). And worse still, there are thousands of drilled shale wells are sitting
idle, unfracked and uncompleted. That supply sitting on the
sidelines will put downward pressure on
any new oil price rally... which may
explain why the Saudis have just cut prices once again.
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Tillerson
Blasts Russia For "Ukraine Aggression" As GERMANY SLAMS TRUMP'S
"UNREALISTIC" NATO DEMANDS
As
relations between the Kremlin and the White House deteriorate with every
passing day before Trump has even met with Putin, accusations that Trump is a
puppet of the Kremlin remain the topic du jour across the US media.
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It doesn’t make sense
to put wall in the border.. 1st in breaking it .. the US investors
"When you dissect the worst-case
scenarios, it still makes sense to go forward with their business plans.
It’s a competitive world." [Case: planta de
motores Ford in Chihuahua ]
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DEMOCRACY NOW
US politics crisis:
Deep state captured Trump to reproduce old cronyism with no clear plan
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GLOBAL RESEARCH
La crisis politica
mundial leads to more business-war: US-NATO under screen
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“We
Stand on the Precipice of History”: The Nuclear Weapons Ban Treaty Talks.
“Nukes are Illegitimate, Immoral and Illegal” By Ray Acheson,
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INFORMATION CLEARING HOUSE
Deep on the US
political crisis; their internal conflicts and intention of war
Russia Justifiably Fears Possible Preemptive
US Nuclear Attack By Stephen
Lendman
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John Pilger: Disastrous Consequences if US Proceeds with
“Policy of Provocation” Video The coming war on China: .. prospect
of nuclear war is no longer unthinkable
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Trump Succumbs to Bush/Obama Perpetual War By Ann Wright
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Is Putin the 'Preeminent Statesman' of Our
Times? By Patrick Buchanan
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The Russia Hacking Fiasco: No Evidence
Required By Mike Whitney And yet some people believe this
baloney. The
intention: create a “reason” for first strike. ..RU in high alert n ready to respond.
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Latest WikiLeaks Shows How the CIA Hides the
Origins of its Hacking Attacks and 'Disguise them as Russian or Chinese
Activity' By Mail Online CIA disguise its own hacking attacks
and point the finger at Russia, China, North Korea and Iran
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Trump Declares War on The Planet in Real-Life
Remake of The Purge By J
Scahill and Naomi Klein
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The Unbelievers: By Richard Dawkins & Lawrence Krauss These scientists speak publicly about
the importance of science and reason in the modern world.
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COUNTER PUNCH
Though “academicistic”
(no pre-define thesis), it provides some good arts on Econ n Politics
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Susan Babbitt Academics Collude With Imperialism: Another
Reason Lenín Moreno Must Win Sunday in Ecuador
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Michael J. Sainato Bernie
to Democrats: You’ll Never Win Without Independents
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Cesar Chelala Argentina
Has Clear Rights Over the Malvinas (Falklands)
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SPUTNIK and RT SHOWS
The nasty business of
US-NATO global wars uncovered .. pro RU view
White House: US 'Must Accept' Political Reality That Assad is Syria's President https://sputniknews.com/world/201703311052175536-white-house-political-reality-assad/
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Iran's Defense Minister Urges US to Stop Harassing Mideast States https://sputniknews.com/middleeast/201704011052179780-iran-us-stop-harassing-mideast-states/
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Moscow Welcomes Fitch rating to Keep Russia's IDRs at Investment Level https://sputniknews.com/russia/201703311052179478-russia-fitch-stable-outlook/
RELATED
Moody's Upgrade of Russia's Rating Outlook Reflects 'Improvement in Economy'
https://sputniknews.com/business/201702181050820341-moodys-russia-rating/
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Syrian Crisis Remains 'Acute Humanitarian Emergency' - IFRC Head https://sputniknews.com/middleeast/201704011052179715-syrian-crisis-acute-humanitarian-emergency/
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'Senate Looking in the Wrong Place' as FBI Influenced US Election – Kucinich https://sputniknews.com/politics/201703311052176006-us-senate-election-tempering-interview-dennis-kucinich/
LISTEN Radio Sputnik
'If
you want to know who influenced US election look no further than the FBI' -
Dennis Kucinich
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North Korea Implores South Koreans to Join ‘Anti-War’ Campaign Against US https://sputniknews.com/politics/201703311052177241-dprk-sends-south-korea-letter/
RELATED
US Deploys F-35s to South Korea For Joint Drills in Show of Force Against North https://sputniknews.com/military/201703301052139362-jets-sent-to-south-korea/
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New Images of 9/11 Attack on Pentagon Revealed to Public (PHOTOS) https://sputniknews.com/news/201703311052177204-pentagon-terrorist-attack-photos-revealed/
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RT SHOWS
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WASHINGTON BLOG
Flash points on US
politics: internal contradict.. Hugh Smith good articles reproduced
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I presented this chart of rising
wealth inequality a number of times over the past year. Do you notice something
peculiar about the inflection points in the 1980s?
So what happened between 1978 and
1986? The first phase of the financialization of the U.S. economy.
What is financialization? In
a financialized economy, speculating with highly leveraged debt and exotic
financial instruments is far more profitable than producing goods and services.
Financialization hollows out the productive assets of an
economy by incentivizing leverage, debt, opacity, speculation, financial fraud,
collusion and the perfection of crony capitalism, i.e. financial
Elites’ ownership of the government’s regulatory and legislative bodies.
Here is another less pungent description via Wikipedia: “Financial
leverage overrides capital (equity) and financial markets dominate traditional
industrial economy and agricultural economics.”
⇒ Keep Reading
⇒ Keep Reading
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NOTICIAS IN SPANISH
La crisis pol y Ec en
Latino America: leftist view on
alternatives
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El Tribunal Supremo de Justicia hizo
su parte y si hay pueblo que apoya desacato la FA must act
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Las
"mamushkas" financieras de Lasso Cynthia García
El pueblo de EC representa la dignidad Latina.
Aun si fallo Correa lo peor es el suicidio. El candidato del imperio Lasso solo
traerá hambre y destrucción. No creo que Ec vote por el
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J Miras: Crítica del
republicanismo liberal “Toda sociedad genera vida inherente al orden que la organiza" Salvador López
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“Exalto los valores puros de mi
pueblo, y a su lado voy a vivir como a morir" Miguel Hernández,
entre el amor y el compromiso
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En situac de crisis como esta .. hay que cerrar Embajada USA y frenar
su intervenc
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Estados Unidos, ¿gestor de caos y violencia en México? John Saxe-Fernández
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Keiser
Report 1051 "La cultura estadounidense
rinde homenaje y culto a la muerte"
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PRESS TV
Global situation
described quickly by Iranian observers..
often title distorted by ISR-Mosad
UK to open own version of Guantanamo They
enjoy torturing prisoners
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This warmonger has to
be rid-off by T. .. The hidden target is China .. N-K is not the prob.
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VEN Attorney
General raps violation of constitution by rightist parliamentarian coup
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One in three voters gives ‘F’ to Trump one in two would be
more accurate
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Four countries at high risk of famine: FSIN Nigeria, Somalia, S-Sudan and Yemen
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US
to NATO allies: Step up contributions
Tillerson. NATO must be dissolved .. it’s a waste of maney
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Saudi
general escapes citizen’s arrest in UK: Video Over
war crimes in Yemen. Both US-UK involved
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‘US
no longer focusing on getting Assad out’ US Ambas to UN
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