Cyprus Archives - The Automatic Earth

US govt warns: Do not, under any circumstances, come to Russia. pic.twitter.com/Jpl9luk8Ie

— Ignorance, the root and stem of all evil (@ivan_8848) June 29, 2024

McAfee 2020 (!)

Russia's first time traveller has returned.

Guess what he said:

In September Biden is medically diagnosed as unfit for office and quits.

They discover that the DNC has legal power to choose a replacement without a National vote!

Weird huh?

You'll never guess who they chose.

— John McAfee (@officialmcafee) July 18, 2020

https://twitter.com/i/status/1806945470566056163

“Washington is unhinged and depraved. A collection of psychopaths as are its minions in Brussels and other NATO capitals.”

• Imagine a Missile Massacre On a Florida Beach On the Fourth of July (SCF)

The scenario is not hyperbole. Imagine a sunny beach in Florida crowded with families enjoying a holiday weekend. In a split second, mayhem and murder are unleashed as crowds flee in panic from a foreign missile exploding over the beach. There is no doubt that the United States would go to war immediately against the perpetrator. Furious condemnations would ring out for days, weeks, and months among American politicians and their media. But what is also obvious from this hypothetical scenario is the egregious double standard and hypocrisy of American and Western responses. Last weekend, Russia was celebrating its annual Day of Remembrance and Sorrow. The day honors the dead of the Great Patriotic War instigated by Nazi Germany’s invasion of the Soviet Union on June 22, 1941. That weekend also combines Trinity Sunday, a prominent religious holiday in the Orthodox calendar.

As Russian families were enjoying the festive weekend, the Kiev regime fired five U.S.-supplied ATACMS missiles at the Crimean city of Sevastopol. It was a deliberate targeting of civilian infrastructure. Four missiles were shot down by Russian air defenses, but a fifth exploded over a nearby beach, where hundreds of people were enjoying sun-splashed sand and the gentle lapping of waves. In the ensuing horror, four people including two children were killed. Over 150 were injured, dozens of them seriously, from the explosions caused by cluster bomblets released by the missile. Video footage clearly shows explosions and not merely ordnance shrapnel falling from the sky. This was an act of state-sponsored terrorism against civilians. The United States and its NATO partners bear responsibility for the massacre.

Only a week before the attack, U.S. President Joe Biden and other NATO leaders had signed off on supplying the Kiev regime with long-range (300 km) ATACMS weapons and a green light to use these missiles on Russian territory. Arguably, too, the atrocity was an unpardonable act of war against Russia. As the foreign ministry in Moscow noted, the U.S.-led NATO proxy war in Ukraine has become a direct war against Russia. The situation has entered a most dangerous moment. The Kremlin has warned that retaliation is coming. There is no question that under international law, the Russian Federation has every right to respond to murderous aggression. It only remains to be seen what the form of retaliation will be. It is doubtful that Russia would take revenge on innocent American civilians. The Russian leadership and its people are far too moral and strategically intelligent to countenance such barbarity.

The scenario of bombing a beach in Florida is invoked to demonstrate the heinous reality of what occurred in Crimea last weekend. And it also demonstrates the rank moral bankruptcy of American and European leaders. Only days before the missile attack on Crimea, the American Senate introduced a bill to declare Russia a “state sponsor of terrorism”. The bill was a hysterical reaction to Russian President Vladimir Putin’s state visit to North Korea and the signing of a mutual defense pact with Chairman Kim Jong Un. The irony of the U.S. reaction in light of the subsequent attack on Crimea is not merely bitter. Washington is unhinged and depraved. A collection of psychopaths as are its minions in Brussels and other NATO capitals.

“We have a serious problem here, because we have a president who, by all appearances, is not up to the task..”

• Biden Should Be Removed As President – US House Speaker (RT)

Joe Biden should be replaced as US president, having shown he is “not up to the task” during his debate with Donald Trump, House Speaker Mike Johnson has said. The US president’s performance in his first election face-off with Trump on Thursday was widely viewed as a disaster. The 81-year-old appeared frail and confused, struggling to finish his sentences and mixing up words. According to media reports, Democrats were “panicking” after the debate, and some donors have demanded that the president be dropped from the party’s ticket for the November 5 election. “I would be panicking too if I were a Democrat today and that was my nominee. I think they know they have a serious problem,” Johnson told journalists on Thursday. The Republican politician argued that Biden should not only withdraw from the race, but also be immediately removed from office.

“It’s not just political. It’s not just the Democratic Party. It’s the entire country. We have a serious problem here, because we have a president who, by all appearances, is not up to the task,” he said. Johnson said Biden’s administration could force him to step down by invoking the 25th Amendment – which states that the vice president and cabinet members can vote to declare the president “unable to discharge the powers and the duties of his office,” making the VP the acting head of state. If the commander-in-chief refuses to comply, the final decision on the issue would be made by Congress. The amendment has never been used in US history. “There are a lot of people asking about the 25th Amendment, invoking the 25th Amendment right now because this is an alarming situation,” the House speaker stressed.

Due to Biden’s mental condition, “our adversaries see the weakness in this White House as we all do. I take no pleasure in saying that.” “I think this is a very dangerous situation… And it needs to be regarded and handled as such. And we hope that they will do their duty, as we all seek to do our duty to do best for the American people,” Johnson stated. “I would ask the Cabinet members to search their hearts.” The results of a poll by Morning Consult, published by the news website Axios on Friday, suggested that 60% of the voters believe Biden should “definitely” or “probably” be replaced as the Democratic presidential nominee following his disappointing performance in the debate.

“.. the plan threatens Ukraine with certain defeat, regime, and, possibly, even state disintegration; it threatens Moscow with a harder time – a type of threat that has no record of success.”

• Trump the Peacemaker? His Presidency Might Help End The War In Ukraine (RT)

The likely next president of the US, Donald Trump, has signaled that he has a plan for bringing the war in Ukraine to an end. Or, at least, two of his advisers have such a plan. More importantly, they have submitted it to Trump. And most importantly, they have said that he has responded positively. As one of the plan’s authors has put it, “I’m not claiming he agreed with it or agreed with every word of it, but we were pleased to get the feedback we did.” It is true that Trump has also let it be known that he is not officially endorsing the plan. However, it is obvious that this is a trial balloon which has been launched with his approval. Otherwise, we would have either not have heard about it or it would have been disavowed.

The two Trump advisers are Keith Kellogg, a retired lieutenant general, and Fred Fleitz, a former CIA analyst. Both held significant positions on national security matters during Trump’s presidency. Currently, both play important roles at the Center for American Security: Kellogg serves as co-chair and Fleitz as vice chair. Both, finally, are clear about their belief in what is perhaps Trump’s single most defining foreign policy concept: America First. Fleitz recently published an article asserting that “only America First can reverse the global chaos caused by the Biden administration.” For Kellogg, the “America First approach is key to national security.” The Center for American Security, finally, is part of the America First Policy Institute, an influential think tank founded in 2022 by key Trump administration veterans to prepare policies for his comeback.

Clearly, this is a peace plan that has not come out of nowhere. On the contrary, it has not merely been submitted to Trump to receive his – unofficial – nod, it has also emerged from within Trumpism as a resurgent political force. In addition, as Reuters has pointed out, it is also the most elaborate plan yet from the Trump camp on how to get to peace in Ukraine. In effect, this is the first time that Trump’s promise to rapidly end this war, once he is back in the White House, has been fleshed out in detail. The adoption of the plan or any similar policy would obviously mark a massive change in US policy. Hence, this is something that deserves close attention.

What does the plan foresee? In essence, it is built on a simple premise: to use Washington’s leverage over Ukraine to force the country to accept a peace that will come with concessions, territorial and otherwise. In the words of Keith Kellogg, “We tell the Ukrainians, ‘You’ve got to come to the table, and if you don’t come to the table, support from the United States will dry up’.” Since Kiev is vitally dependent on American assistance, it is hard to see how it could resist such pressure. Perhaps to give an appearance of “balance” for the many Republicans still hawkish on Russia, the plan also includes a threat addressed to Moscow: “And you tell Putin,” again in Kellogg’s terms, “he’s got to come to the table and if you don’t come to the table, then we’ll give Ukrainians everything they need to kill you in the field.”

Yet it is obvious that, despite the tough rhetoric about Russia, the plan will cause great anxiety in Kiev, not Moscow, for two reasons. First, the threats addressed to Russia and Ukraine are not comparable: If the US were to withdraw its support from Ukraine, Kiev’s Zelensky regime would quickly not just lose the war but collapse. If the US were to, instead, increase its support for the Zelensky regime, then Moscow would respond by mobilizing additional resources, as it has done before. It might also, in that case, receive direct military assistance from China, which would not stand by and watch a potential Russian defeat unfold, because that would leave Beijing alone with an aggressive, emboldened West. In addition, Washington would, of course, have to weigh the risk of Russia engaging in counter-escalation. In sum, the plan threatens Ukraine with certain defeat, regime, and, possibly, even state disintegration; it threatens Moscow with a harder time – a type of threat that has no record of success.

The second reason the plan is bad news for Ukraine but not for Russia is that the peace it aims at is much closer to Moscow’s war aims than to those of Kiev. While the document that has been submitted to Trump has not been made public, American commentators believe that a paper published on the site of the Center for American Security under the title “America First, Russia, & Ukraine” is similar to what he – or his staff – got to see. Also authored by Kellogg and Fleitz, this paper, too, repeatedly stresses just how “tough” Trump used to be toward Russia. Plenty of strutting there for those who like that kind of stuff. These statements, however, are balanced by an emphasis on what used to be called diplomacy: “At the same time,” we read, “Trump was open to cooperation with Russia and dialogue with Putin. Trump expressed respect for Putin as a world leader and did not demonize him in public statements … This was a transactional approach to US-Russia relations … to find ways to coexist and lower tensions … while standing firm on American security interests.”

“..making no differentiation between conservatives and liberals, social democrats or Republicans and Democrats. All belong to the de facto Western War Party serving U.S.-led Western imperialism.”

• US and NATO Accomplices Play Terror Card Against Russia (Van den Ende)

Recently, two U.S. senators, Lindsey Graham and Richard Blumenthal, introduced a bill to designate Russia as a state sponsor of terrorism. “We will push for a vote, and the best thing we can do, I think, to shape the future is to label Putin as a terrorist leader, because that’s what he is,” said Graham. Graham can be compared to a (rather stupid) criminal cowboy. There are many senators with the same criminal mentality in the U.S. government. Graham is Republican, Blumenthal is a Democrat. It doesn’t matter who rules the U.S., both political parties are on the warpath and both are under the influence of the U.S. deep state (lobbies like the arms industry, military complex, etc.). Elections are a farce, just like in Europe. The U.S. together with its partners in the European Union and NATO, have instigated and prolonged all kinds of illegal wars for many years, with the reckless supply of weapons and money.

Recent wars include Afghanistan, Iraq, Syria and the bombing of Libya into the stone age, and now it is Russia’s turn. Since the start of the Special Military Operation in Ukraine in February 2022 (even before that going back to 2014), Russia has been the target of the entire West. European leaders have recently become even more radical than Uncle Sam and are using threatening war language – rabid rhetoric we have not heard since the Second World War. Now that Ukraine cannot win on the battlefield, the U.S. and the West are turning to other means, as they always do, namely terrorism. We see a pattern here over several decades. The worst manifestation perhaps were the bloody wars that culminated in terrorism in Syria and Iraq, where the U.S. and EU/NATO sponsored and still sponsor terrorism. ISIS or Daesh was created by the U.S. The deceased senator (a Republican) John McCain was one of the godfathers of ISIS, whose murderers were trained at the U.S. Camp Bucca in Iraq.

The same John McCain was in Kiev during the unfolding Maidan coup in December 2013 and told thousands of NeoNazi chanting demonstrators that Americans support their resistance to closer ties with Russia. The coup was executed in February 2014. Other senators and government officials from the U.S. and Europe were also present for the Kiev coup, such as Chris Murphy and Victoria Nuland from the U.S. From Europe, the Dutchman Hans van Baalen, the former Belgian Prime Minister Guy Verhofstad (now EU MEP) and other EU delegates were present and supported the neo-Nazi groups wreaking violence on the Maidan square, killing police officers and sacking public buildings. I must emphasize that the Western coup backers were from all kinds of political parties in the EU and the U.S., making no differentiation between conservatives and liberals, social democrats or Republicans and Democrats. All belong to the de facto Western War Party serving U.S.-led Western imperialism.

Victoria Nuland (now retired from the CIA-riddled U.S. State Department) followed in the footsteps of John McCain and emerged as the greatest Russia hater in the U.S. It was she who threatened Russian President Vladimir Putin with “nasty surprises” only weeks before the terrorist attack in March this year on the Crocus City Hall shopping-theater complex just outside Moscow where 144 people were killed by a team of gunmen. The embassies (U.S. and EU) issued warnings for their fellow countrymen not to go to events or busy places in the near future, so they knew something was coming – because they planned it themselves.

Nuland has spoken vulgarly over the years. We all know her “fuck the EU” comment. But at her so-called farewell speech in February this year, she literally said: “The war in Ukraine is not to help Ukraine, but to thwart Russia.” Also revealing was Nuland’s explanation of the background of the war. Nothing about saving Ukraine, but all about her aversion to Russia. “We wanted a partner that was focused on the West, that wanted to be European. But that was not what Putin brought,” she said. So, in other words, Putin has to go and Russia needs a regime change that is pro-West, in other words a puppet regime.

So we make her our top ‘diplomat’?!

• ‘She Eats Russians For Breakfast’ (RT)

Estonian Prime Minister Kaja Kallas has been nominated by the leaders of EU member states to become the next high representative for security and foreign policy. The politician – selected to speak for Brussels internationally and balance conflicting interests in the EU – has a reputation as an uncompromising hawk on Russia. Before beginning a five-year term, Kallas will need approval from the European Parliament, whose members are expected to vote on her appointment in July, a step widely seen as a formality. The 47-year-old’s attitude towards Moscow was summed up by an unnamed EU official, explaining why Western European nations were resisting her candidacy for another top job – the secretary general of NATO. “Are we really putting someone who likes to eat Russians for breakfast in this position?” the source told Politico in March. Kallas reacted by posting a picture of her breakfast, consisting of blueberries, muesli, a dairy product, and a drink.

Kallas has embraced the idea that at some point NATO countries may have to deploy troops in Ukraine to prevent Moscow from defeating Kiev, first put forward by French President Emmanuel Macron in February. “We shouldn’t be afraid of our own power. Russia is saying this or that step is escalation, but defense is not escalation,” the Estonian politician said of the proposal. Macron’s stated goal in voicing the idea publicly was to leave Russian President Vladimir Putin guessing as to how far the US-led military bloc might go in supporting Ukraine. After multiple member states, including the US, ruled out sending their soldiers to fight for Kiev, the suggestion was downgraded to a military training mission in Western Ukraine. Kallas has backed the new plan, saying it does not amount to an escalation – because a potential attack on the instructors would not trigger a mandatory joint NATO response. “If you send your people to help Ukrainians … you know the country is at war and you go to a risk zone. So you take the risk,” she explained in May.

According to Kallas, there should be no “Plan B” for Ukraine, because contemplating it would amount to undermining the primary goal of helping Ukraine prevail in the conflict. ”Victory in Ukraine is not just about territory,” she told the BBC in early June. “If Ukraine joins NATO, even without some territory, then that’s a victory because it will be placed under the NATO umbrella.” The Estonian politician believes the optimal scenario of a defeat for Russia would result in the country’s dissolution. Russia is composed of “many different nations” that could become independent, and “it is not a bad thing if the big power is actually [made] much smaller,” she argued last year. The Estonian daily Postimees argued earlier this month that leaving domestic politics behind may be the best thing the prime minister can do for her country. The Baltic nation is enduring a recession and severe budget deficit, and Kallas’ coalition government is unable to find common ground on tackling the problems, the editorial argued.

“She has earned the reputation of a strong voice of the eastern part of the EU and a convincing supporter of Ukrainian victory,” the newspaper said. “It’s all good, but the citizens of Estonia did not elect her based on her international image”. Her looming appointment has “paralyzed the government,” as the coalition is unable to function while everyone waits for Kallas to quit, Postimees said. Kallas is a vocal proponent of cutting all business ties with Russia as part of the Western response to the Ukraine conflict. However, last year Estonian media revealed that her Husband Arvo Hallik held a 25% stake in a logistics company that provides services in Russia. She has denied any wrongdoing and rejected calls to step down over the scandal, which she claimed to be a politically motivated hatchet job. But her reputation was severely damaged, at home and internationally. “This is hypocrisy in a cube,” Hungarian Foreign Minister Peter Szijjarto said at the time. He was referring to Kallas’ criticisms of Budapest, which views the EU decision to decouple from the Russian economy as self-harming, while having no impact on the hostilities.

“Orban also accused the EU leadership of “imposing their own ideologies” on the populations of member states, instead of “looking after the interests of the people.”

• EU Bureaucrats ‘Want War With Russia’ – Orban (RT)

The EU leadership is pushing the bloc towards war with Russia, while neglecting the interests of their own people, Hungarian Prime Minister Viktor Orban has claimed. In an op-ed published in the Magyar Nemzet newspaper on Saturday, Orban warned that the EU is facing a series of crises, including economic challenges and the heightened threat of terrorism. “To make matters worse, the Brussels bureaucracy that lives in a bubble has made a number of bad political decisions in recent years,” the prime minister argued. “Europe is increasingly being dragged into a war, in which it has nothing to gain and everything to lose.” “The bureaucrats in Brussels want this war. They see it as their own, and they want to defeat Russia. They keep sending the money of the European people to Ukraine. They have shot European companies in their feet with sanctions. They have driven up inflation and they have made making a living difficult for millions of European citizens.

The Brussels bureaucrats want this war, they see it as their own, and they want to defeat Russia. They keep sending the money of the European people to Ukraine, they have shot European companies in the foot with sanctions, they have driven up inflation and they have made making a living difficult for millions of European citizens. Orban also accused the EU leadership of “imposing their own ideologies” on the populations of member states, instead of “looking after the interests of the people.” The Hungarian prime minister made his comments shortly after EU leaders nominated Ursula von der Leyen to serve for a third term as the president of the European Commission. At the same time, Estonian Prime Minister Kaja Kallas was nominated to replace Josep Borrell as the bloc’s top diplomat. Known for her hawkish foreign policy, Kallas has been one of the key champions of tougher sanctions on Russia and more weapons shipments to Ukraine.

She is also an advocate of using frozen Russian assets for aid to Ukraine. Orban is an outspoken critic of the EU’s approach to the Ukraine conflict, favoring a diplomatic settlement through negotiations as opposed to more escalation. Unlike many other NATO members, Hungary has refused to send weapons to Kiev and lobbied against unconditional financial assistance. Orban previously claimed the US and the EU were “the sources” of the “war madness” sweeping the continent, and accused Brussels of dangerous brinkmanship with Russia.

Europe has all these women compensating for a lack of testicles.

• Ursula von der Leyen: Beyond Redemption (NC)

To be accused of impropriety on one occasion may be regarded as a misfortune but to be accused on four occasions looks like carelessness. (With apologies to Oscar Wilde) If there is one individual who, more than anyone else, symbolises the ineptitude of the European Commission then it is surely the Commission’s president, Ursula von der Leyen (hereafter, VDL). Questions about VDL’s lack of probity first surfaced in 2015 when she was accused of plagiarising her doctoral dissertation. She was eventually cleared of the accusations but as the BBC reported on 9 March 2016, the president of the Hannover Medical School, Christopher Baum, conceded that “Ms von der Leyen’s thesis did contain plagiarised material”, but he added “there had been no intent to deceive”. Her first lucky escape.

VDL’s lack of probity continued while she served as Germany’s Minister of Defence between 2013 and 2019. During her tenure at the ministry, she became embroiled in a scandal regarding payments of €250 million to consultants related to arms contracts. Germany’s Federal Audit Office found that, of the €250 million declared for consultancy fees, only €5.1 million had been spent. Furthermore, one of the consultants was McKinsey & Company, where VDL’s son was an associate, thus raising a possible conflict of interest. It also emerged that messages related to the contracts had been deleted from two of VDL’s mobile phones. Although she was eventually cleared of corruption allegations, questions over her probity during that period remain to this day.

Having survived two scandals, VDL couldn’t believe her luck when in July 2019 Macron, together with Merkel, bypassed the Spitzenkadidaten process and nominated her as Jean-Claude Junker’s successor as head of the European Commission. The Spitzenkadidaten process, through which the lead candidate emerges and is then ratified by the European Parliament, is itself somewhat arcane. In VDL’s case, she was fortunate that the EU couldn’t agree on either of the two lead candidates at the time, Martin Weber and Frans Timmermans. It was thus left to the consummate fixer, Macron, and VDL’s mentor, Merkel, to come to an agreement using that great democratic and transparent tool called the ‘backroom deal’. VDL’s nomination was accepted by the European Council and on 16 July the European Parliament voted to accept her appointment. But it was a close vote. Out of a total of 747 MEPs, only 383 voted for her, 327 voted against, 22 abstained, and one vote was invalid. Under the EU rules, the president of the Commission must be elected with more than 50% of the MEP votes. Thus, she received only 9 votes more than the threshold. Compare this to her predecessor, Juncker, who in 2014 received 422 votes.

After she was appointed president of the European Commission, VDL again became embroiled in controversy, this time involving the procurement of the Covid-19 vaccine from Pfizer. The scandal, which the media dubbed Pfizergate, related to the purchase of 1.8 billion doses of the Pfizer vaccine for use across the EU. It transpired that: a) the number of doses was far greater than was required, resulting in a significant number having to be either destroyed or donated; b) the excess doses cost the EU €4 billion; c) the total value of the contract, which Politico reported as being approximately €20 billion, was inflated; and d) the most damaging charge, the contract for the vaccines was negotiated directly between VDL and Albert Bourla, the CEO of Pfizer. The negotiations were conducted using sms messages, which VDL later claimed to have deleted.

The New York Times, which initially carried out the investigation into Pfizergate, brought a lawsuit against the European Commission for failing to provide access to the sms conversations between VDL and Bourla. In Belgium, a lobbyist, Frederic Baldan, filed a criminal complaint citing corruption and the destruction of documents. The Belgian lawsuit was eventually taken over by the European Public Prosecutors Office, which opened a criminal investigation. The outcome of these legal proceedings/investigations is still pending.

“BRICS countries are home to 45.2% of the world’s population, compared to just 9.7% in the G7..”

“Data on oil reserves show that BRICS countries now hold 45.8% of global volumes, while the G7 holds only 3.7%..”

• Why Does Türkiye Want to Join BRICS? (RT)

At the beginning of this month, news of Türkiye’s desire to join BRICS drew global media attention. The announcement was made by Turkish Foreign Minister Hakan Fidan during his visit to China. “Of course, we would like to become a member of BRICS. Let’s see what we can achieve this year,” said the minister, as quoted by the South China Morning Post. This issue was also discussed at the BRICS foreign ministers’ meeting in Nizhny Novgorod, attended by Türkiye’s chief diplomat, Hakan Fidan. Türkiye’s desire to join is not entirely new – during the BRICS summit of 2018, where Turkish leader Recep Tayyip Erdogan was a participant, Russian President Vladimir Putin said Ankara could join in 2022. However, subsequent events on the world stage apparently delayed that ambition, and Ankara is only now showing renewed interest.

[..] With the confrontation between the countries of the global majority and the West growing, BRICS is considered to be emerging as an alternative to the G7. This is determined by several key reasons related to economic, political, and social aspects. The G7, comprising leading economically developed countries – the US, Canada, the UK, France, Germany, Italy, and Japan – has traditionally dominated the international arena, shaping the global economic and political agenda. However, the emergence and development of BRICS have changed this balance, offering an alternative view on global governance and cooperation. BRICS unites the largest developing economies in the world, which together account for a significant share of global GDP and population. Collectively, BRICS countries possess vast resources and potential for economic growth, making them important players on the global stage.

To provide a clearer understanding, let’s compare some indicators. With its five new members, BRICS now accounts for almost 34% of the world’s land area, while the G7 accounts for 16%. BRICS countries are home to 45.2% of the world’s population, compared to just 9.7% in the G7. The combined GDP based on purchasing power parity in BRICS countries is 36.7% of the global total as of 2024, compared to 29.6% for the G7. Data on oil reserves show that BRICS countries now hold 45.8% of global volumes, while the G7 holds only 3.7%. Thus, in many respects, BRICS surpasses the G7. The economic power of BRICS allows these countries to propose alternative models of development and economic cooperation, differing from the Western approaches represented by the G7.

Due to international contradictions and the destructive hegemony of Western countries led by Washington, questions about the need to transform the world order are actively arising. BRICS advocates for a multipolar world, where the balance of power is more evenly distributed among various regions and countries. While the G7 represents the interests of economically developed Western powers, BRICS focuses on the issues and interests of developing nations, which are often marginalized in global politics. This makes BRICS an important platform for countries seeking greater autonomy and independence from Western influence. Moreover, the creation of the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA) demonstrates the BRICS countries’ desire to establish alternative financial institutions capable of competing with traditional Western institutions, particularly the IMF and the World Bank.

[..] Türkiye shows significant interest in joining BRICS, seeing it as an important step toward enhancing its international influence and economic potential. This aspiration is driven by several key factors related to economic, political, and geostrategic aspects. Possessing one of the largest economies in the region, Türkiye aims to diversify its economic ties and strengthen cooperation with rapidly developing countries. Joining BRICS would give Ankara access to a vast market and opportunities to increase trade and investment with the leading economies of the developing world. This is especially important in the context of global economic challenges and uncertainties, where diversifying partners becomes a key factor for sustainable growth.

Türkiye has repeatedly faced financial difficulties and restrictions imposed by Western financial institutions such as the IMF and the World Bank. Joining BRICS would provide Türkiye with access to the New Development Bank and the Contingent Reserve Arrangement, allowing it to secure funding on more favorable terms and with fewer political commitments. This is particularly relevant for Türkiye, which seeks to maintain its economic independence and minimize external pressure.

“Suddenly, it is not a cheap fake but reality.”

• The Art of Being Eternally Shocked (Turley)

No one would think of the Beltway as being a place of the naive innocents of our society. Washington is the only ecosystem composed entirely of apex predators. Yet, this week everyone seems to be eternally shocked by what has been obvious for years. The press and pundits are coming off an embarrassing couple of weeks where the Hunter Biden laptop was authenticated in federal court as real. This occurred in the trial of the president’s son almost on the anniversary of a debunked letter of intelligence officials claiming that the laptop appeared to be Russian disinformation. Biden then repeated the claim in the last presidential debates to avoid answering questions over the massive influence peddling scheme of this family revealed by the laptop. After the story was suppressed before the 2020 election, it took years for the media to admit that, oops, the laptop is surprisingly real.

For years, the press and pundits piled on experts who suggested that Covid 19 escaped from a Chinese lab. The New York Times reporter covering the area called it “racist” and implausible. Now, even W.H.O. accepts the lab theory as possible and federal agencies now believe it is the most likely explanation. The response: surprise and spin. This week, the Supreme Court ruled that the Justice Department has unlawfully charged hundreds of people with obstruction of an official proceeding after the January 6th riot. For years, objections to the excessive treatment of these cases were dismissed as the view of the radical right. Now, even Justice Ketanji Brown Jackson voted to toss out these convictions. Surprise. Whether it was the false story about agents whipping migrants in Texas or the photo op claim in Lafayette Park, false stories were disproven only to have a collective shrug from those who spread them.

For years, the press and pundits have repeated like gospel that Trump had called neo-Nazis “fine people.” At the time, most of us noted that Trump condemned the racists and neo-Nazis and made the statement about fine people on both sides of the controversy over the removal of historic statues. Six years later, Snopes finally decided to do a fact check and, surprise, found that Trump never praised neo-Nazis as fine people. The only person not surprised was Biden who repeated the false story on Friday as true. Heading into the presidential debate, the White House and the media attacked Fox News and other outlets for “cheap fake” videos designed to make the President look confused and feeble. For months, politicians and pundits have insisted that Biden is sharp and commanding in conversations even after Special Counsel Robert Hur cited his decline as a reason for not charging him criminally for the unlawful retention and mishandling of classified material.

On MSNBC, Joe Scarborough stated “start your tape right now because I’m about to tell you the truth. And F— you if you can’t handle the truth. This version of Biden intellectually, analytically, is the best Biden ever. Not a close second. And I have known him for years…If it weren’t the truth I wouldn’t say it.” Then the presidential debate happened and, after years of being protected by staff, tens of millions of people watched the president struggle to stay focused and responsive. After the debate, there was total surprise, if not shock, on CNN and MSNBC. Suddenly, it is not a cheap fake but reality.

“Given the multitude of errors at trial and the pending election, it is a near certainty that his request for a stay will be granted.”

“..federal statutes generally require that the highest court in a state rule before the Supreme Court intervenes..”

• Trump Sentencing Will Put Merchan’s Bias in Crosshairs (RCP)

On July 11, acting New York Judge Juan Merchan will sentence former President Donald Trump. Trump was convicted in a New York State court in Manhattan on a novel theory and on facts never before used to secure a conviction in New York. Disregarding at least a dozen reasons his conviction should be reversed, because Trump was convicted of falsifying records with the intent to commit a second crime – illegally interfering in the 2016 presidential election – the falsification was upgraded to a class E felony, comprising 34 counts, one for each entry. The maximum penalty is four years in jail on each count, not to exceed a total of 20 years. New York defendants sentenced to less than a year are usually jailed in notorious Rikers Island, known for its overcrowding, drug problems, and violence. The New York City Council voted to close the facility by 2026. New York Post photos from just a few years ago show the awful conditions there.

For sentences of a year or longer, Trump could be remanded to one of 41 state prisons for men, though most likely to one of the three minimum security facilities. It seems highly unlikely that the U.S. Secret Service would permit Trump to be held in a New York prison. While space might be made available in a federal prison, or a building converted for exclusive use by Trump, it is more likely that he would serve any sentence in home confinement, wearing an ankle monitor. Alternatives to incarceration include probation for up to 10 years, unconditional discharge, or discharge, without probation, conditioned on not committing a further crime during the following three years, and a fine of up to $5,000. Merchan could order that confinement be limited to weekends or nights, and could permit exceptions for political or business activities. He also could split the sentence, for example, requiring 30 days of home confinement followed by conditional discharge.

Even if Trump is conditionally discharged or given probation but is later convicted of another crime, he could be remanded to prison. In setting the sentence, Merchan will consider a mandatory Pre-Sentence Report and the nature of the crime in addition to Trump’s background, age, and health. Manhattan District Attorney Alvin Bragg follows a policy of not recommending incarceration for those convicted of non-violent class E felonies. During the trial, Merchan observed that he sees incarceration as a “last resort.”Trump’s indictment for numerous other crimes and his frequent violations of Merchan’s gag order will make unconditional release less likely. However, Trump’s evaluation also will suffer because of recent verdicts that he is liable for civil fraud and defamation, and for presumably refusing to accept guilt during the pre-sentence interview.

If Merchan properly considers the nature of the offense, that similar offenses have not been prosecuted in New York, the “false records” were internal Trump accounts, there was no monetary loss, and the so-called effort to interfere in the 2016 election failed in New York (where Clinton overwhelmingly won), and Trump has no prior record, there should be no jail time or home confinement.However, if Merchan approaches sentencing with the same antagonism to Trump’s rights he brought to the trial, he can be expected to cite a fraud on the national electorate to justify at least a brief period of home confinement. Even then, it would be shocking if Merchan did not stay the sentence until after the election, pending Trump’s appeal. Trump likely will appeal to New York’s intermediate appeals court and will seek to have any sentence stayed pending the outcome of the appeal. Given the multitude of errors at trial and the pending election, it is a near certainty that his request for a stay will be granted.

Trump could also bring an action in federal district court asserting that Bragg and Merchan lacked jurisdiction to accuse him of interfering in a federal election, and he was not given adequate notice of the alleged crimes. It is unlikely a federal judge would get involved prior to a state appeals court. Trump could seek intervention from the U.S. Supreme Court, but federal statutes generally require that the highest court in a state rule before the Supreme Court intervenes. In the end, it seems likely that Trump’s conviction will be overturned. Whether the sentence is harsh or a slap on the wrist, the entire process has been a political prosecution intended to keep Trump off the campaign trail and give Biden the talking point that Trump is a convicted felon. That flagrant abuse of due process is not how our justice or electoral systems are supposed to work.

“Hezbollah chief Hassan Nasrallah has told Israel and its allies that a war with no limits will ensue if Israel attempts to invade southern Lebanon..”

• Iran Threatens Israel With ‘Obliterating War’ If It Attacks Lebanon (ZH)

Iran’s mission to the United Nations has put Israel and the world on notice, saying that if Israel launches an all-out war against Hezbollah in Lebanon the whole region will burn. A Friday statement from Iran’s ambassador warned the UN that any “full-scale military aggression” in Lebanon against Hezbollah will mean that “an obliterating war will ensue.” The Iranian statement continued by emphasizing that “all options, including the full involvement of all resistance fronts, are on the table” in a statement posted to X. By “resistance fronts” Tehran means the militias it supports in Syria, Iraq, and Yemen will also ramp up their military activities. On a few occasions, Iraqi Shia militias have launched missiles and drones against southern Israel, as have the Houthis, with limited effect.

Israel’s Prime Minister Benjamin Netanyahu has acknowledged this week that a “seven front war” could open up, in reference to all of Iran’s proxies across the region. For years already, Israeli jets have been regularly attacking ‘Iranian assets’ inside Damascus, also in a continued effort to weaken Assad, despite the presence of Russia’s military primarily in the northwest coastal region. Israel has meanwhile continued to pound Hezbollah positions in south Lebanon, amid continued fears of a bigger war at any moment. The US has even sent amphibious military ships closer to Israel and Lebanon in the Eastern Mediterranean to be ready to evacuate Americans if a bigger conflict ensues.

The Israeli Yedioth Ahronoth newspaper wrote Saturday, “In the past few hours, warplanes attacked several Hezbollah targets, including a military site for the organisation in the Zabqin area, two operational infrastructure sites in the Khiam area, and a Hezbollah building in the al-Adissa [Odaisseh] area.” Hezbollah chief Hassan Nasrallah has told Israel and its allies that a war with no limits will ensue if Israel attempts to invade southern Lebanon. Some Israeli officials fear that the IDF could be stretched too thin if this happens, considering it’s still in the thick of anti-Hamas Gaza operations in the south. Most analysts agree that Hezbollah is far more capable a paramilitary and guerilla force than Hamas, or any other Iran-linked group in the region for that matter. In the 2006 Lebanon war, there were reports that IRGC operatives were on the ground in Lebanon assisting Hezbollah.

“..the Cypriot government has become part of the war and the resistance [Hezbollah] will deal with it as part of the war..”

• Over 80 UK War Planes Deployed From Cyprus To Lebanon Since 7 Oct (Cradle)

The UK has sent over 80 military transport planes to the Lebanese capital of Beirut since the start of Israel’s war on Gaza nine months ago, Declassified UK reported on 28 June. All the flights have gone from the UK’s massive Akrotiri airbase on the nearby island of Cyprus, long a staging post for UK bombing missions in West Asia. Declassified UK notes that the number of UK military flights to Beirut has risen dramatically in recent months. The group tracked 25 flights in April and May and 14 so far in June. Flights from the UK base take around 45 minutes to reach Beirut, which Israel has increasingly threatened to bomb in a possible full-scale war with the Lebanese resistance movement, Hezbollah. The Ministry of Defense declined to disclose the number of UK military flights to Lebanon since the start of the war on 7 October or their purpose. A defense source told Declassified UK that the flights “have been primarily for the purpose of facilitating senior military engagement” with the Lebanese army.

But it is widely assumed the planes are carrying weapons to Beirut to arm anti-Hezbollah militias. The US, UK, and Israel would presumably use these militias to attack Hezbollah from within the country in the case of an Israeli invasion from the south. Declassified UK notes that nearly every Royal Air Force flight to Lebanon has been the Voyager KC mark 2, which can carry a payload of 45 tons and 291 personnel or provide air-to-air refueling. Another flight involved a vast C-17 cargo plane. Israeli threats to invade Lebanon have accelerated in tandem with the increase in flights. Israeli military leaders have increasingly warned of a Lebanon campaign to push Hezbollah away from the border and past the Litani River. Last week, the Israeli army approved “operational plans for an offensive in Lebanon,” and the US pledged to support Israel with weapons if a full-scale war breaks out.

Hezbollah leader Hassan Nasrallah warned the resistance movement will use its massive rocket and missile arsenal to hit targets across Israel in a “total war” if Tel Aviv decides to launch an invasion. Nasrallah also threatened Cyprus, noting its role as a US, UK, and Israeli staging ground. “The Cypriot government must be warned that opening Cypriot airports and bases for the Israeli enemy to target Lebanon means that the Cypriot government has become part of the war and the resistance [Hezbollah] will deal with it as part of the war,” he said. Nasrallah’s threat appeared to include the Akrotiri base, which lies in territory retained by the UK when Cyprus gained independence in 1960. The territory now hosts vast military and intelligence hubs for Britain and the US, Declassified UK notes.

“With the Chevron doctrine overturned, any future regulatory attempts to impose such burdens will require explicit and unambiguous congressional authorization..”

• Chevron and Bitcoin (Crossman)

Chief Justice Roberts, writing for the majority, delivered a decisive opinion that dismantles Chevron deference. The Court held that the Administrative Procedure Act (APA) requires courts to exercise independent judgment when interpreting statutes, rejecting the notion that ambiguities in law should default to agency interpretations. “Chevron defies the command of the APA that ‘the reviewing court’—not the agency whose action it reviews—is to ‘decide all relevant questions of law’ and ‘interpret . . . statutory provisions,’” Roberts wrote. “It requires a court to ignore, not follow, ‘the reading the court would have reached’ had it exercised its independent judgment. … Chevron cannot be reconciled with the APA… .” Slip Op., at 21 (emphasis added).

The ruling emphasizes that statutory ambiguities do not automatically delegate interpretive authority to agencies. Instead, courts must use traditional tools of statutory construction to determine the best reading of a statute, ensuring that agencies do not exceed their conferred powers. The implications of this ruling extend far beyond administrative law, reaching into the heart of the Bitcoin mining industry. Much like the Supreme Court’s decision in West Virginia v. EPA, which curbed the Environmental Protection Agency’s overreach, this ruling reinforces the need for clear congressional authorization before agencies can impose significant regulatory burdens. For the Bitcoin mining industry, this decision is a clear win. Regulatory uncertainty has long been a thorn in the side of Bitcoin miners, who rely on predictable and stable access to power and other resources. By curbing the ability of agencies to unilaterally expand their regulatory reach, the Court has created a more favorable environment for Bitcoin mining operations.

Bitcoin miners have often been at the mercy of shifting regulatory landscapes, which can dramatically impact their operations. For instance, stringent environmental regulations targeting power consumption could have severely constrained the industry. With the Chevron doctrine overturned, any future regulatory attempts to impose such burdens will require explicit and unambiguous congressional authorization, followed by detailed judicial scrutiny. This decision also invigorates the major question doctrine, which posits that significant regulatory actions with vast economic and political implications require clear congressional authorization. This doctrine can be a powerful tool for Bitcoin miners and other industries to challenge regulatory overreach, ensuring that agencies cannot impose wide-ranging policies without clear legislative backing.

CHEVRON GOES DOWN!

This is a great clip on the Chevron Doctrine. pic.twitter.com/4nkhbeA6GK

— eve (@eveforamerica) June 29, 2024

“Admittance is only granted to the select few who pay the massively extortionate ticket price..”

• Banksy ‘Launches’ Migrant Boat Stunt At Glastonbury Festival (MN)

The ‘street’ artist Banksy carried out a stunt at the now uber trendy Glastonbury Festival Friday night by launching a mock-up small boat complete with dummy migrants into the crowd. The Guardian reports that many in the crowd thought it was part of the band Idles’ set given that their songs are all about lefty political positions such as the idea that limiting mass illegal immigration is right wing and evil. The report notes, however, that Banksy was behind the stunt stating “The raft, a reference to the small boats carrying migrants across the Channel that have been such a high-profile target of Rishi Sunak’s immigration policy, was crowdsurfed through the thousands-strong Other stage crowd, which Idles were headlining on Friday night.” Given that Sunak has done practically nothing to prevent the boats and the Conservative government has actively incentivised mass illegal immigration for years now, you’d be forgiven for thinking the stunt was some sort of endorsement.

One of the most cringe, out of touch and middle class things I’ve seen at
Glastonbury. Crowdsurfing a lifeboat representing illegal migrants.

Being open borders at a music festival which has a gigantic fence & very high security. So edgy. pic.twitter.com/pJxwTUNnww

— Chris Rose (@ArchRose90) June 29, 2024

Indeed, it’s difficult to pinpoint exactly what the point of it was. What is the crowd cheering about here? The report further notes that the boat was ‘launched’ during a song called Danny Nedelko, which contains the following lyrics: “My blood brother is an immigrant, a beautiful immigrant. My blood brother’s Freddie Mercury. A Nigerian mother of three. He’s made of bones, he’s made of blood. He’s made of flesh, he’s made of love. He’s made of you, he’s made of me. Unity. Fear leads to panic, panic leads to pain. Pain leads to anger, anger leads to hate.” The report also notes that “Migration is a major theme at this year’s Glastonbury festival, with a new area dedicated to the topic.” Mega cringe. It continues, “Entrants to ‘Terminal 1’ must answer a question from the UK government’s citizenship test for prospective migrants.”

The message being that having some form of secure border and vetting system is oppressive… or something. If people manage to pass the test they’re then treated to “music by representatives from Notting Hill carnival and Bristol’s St Paul’s carnival, alongside visual art by global artists including Love Watts, Yoshi Sodeoka and the Turner prize winner Mark Wallinger.” No thanks then. Admittance is only granted to the select few who pay the massively extortionate ticket price and can afford to spend more than the majority of people earn in an entire month once inside. It’s basically full of metropolitan shitlib ‘creatives’ and influencers with trust funds and disposable incomes. So it’s the perfect venue to engage in empty virtue signalling stunts.

CO2

"It's just total nonsense."

Energy expert Alex Epstein debunks the bare-faced lie that we're living through the hottest period in Earth's history.

"They're trying to make our CO2 levels today, and our temperatures today, seem unprecedented… We're one tenth the CO2 that we've… pic.twitter.com/PU9szvqwCO

— Wide Awake Media (@wideawake_media) June 29, 2024

Whale

Not enough people are talking about how magnificent and terrifying this is pic.twitter.com/Z6zYVlvdyJ

— Nature is Amazing ☘️ (@AMAZlNGNATURE) June 29, 2024

Cracks

When life gives you lemons, make lemonade…or art

David Zinn has been creating original artwork in and around Ann Arbor, Michigan, since 1987.

Armed with a box of sidewalk chalk, he turns cracks into works of art.pic.twitter.com/T3CdMxNgNY

— Mario Nawfal (@MarioNawfal) June 29, 2024

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Debt Rattle October 22 2022

Oct 222022

October 22, 2022 Posted by Raúl Ilargi Meijer at 7:55 am Finance Tagged with: Blinken, Cyprus, Energy Charter Treaty, Fauci, Jan 6, Russian language, Steve Bannon, Trump 40 Responses »

Salvador Dali Punta es Baluard de la Riba d’en Pitxot 1918-19

• US Election Outcome Threatens Ukraine Aid – Politico (RT)

• Russian Language Should Become Extinct In Ukraine – Security Chief (RT)

• The Arms-Swapper (John Kiriakou)

• EU Leaders Fail To Agree On Russian Gas Price Cap (RT)

• EU Wants To Use Frozen Russian Assets To Finance Ukraine (RT)

• Musk Spars With Medvedev (RT)

• France To Leave Energy Charter Treaty (RT)

• Trump Officially Subpoenaed By Jan. 6 Committee (Axios)

• Biden DOJ Wants $34 Million To Keep Targeting J6 Defendants (ZH)

• The Authorities Are Our Enemies (Kunstler)

• Time for Doctors and Politicians to Stop Ignoring the Devastating Data (Evans)

• Fauci Forced To Testify On Social Media Censorship (RT)

• We Will Be Challenging Any State’s Covid-19 School Vaccine Requirement (Siri)

• I Try, But He Does It Better. He Cares About People. (Sotomayor)

Assange
https://twitter.com/i/status/1583390688959307777

Christine Anderson

Why is this not on the news? The media is completely complicit in this – there’s no confusing that now. pic.twitter.com/3vvSOnxxUl

— Brandon Taylor Moore (@LetsGoBrando45) October 20, 2022

NBC

Very Disturbing Story

Tucker Carlson & @DarrenJBeattie Expose NBC Reporter Whose Job It Is To Harass & Intimidate Trump Supporters

Darren: "She will do everything she can to unearth anonymous Trump supporters, basically so she can ruin their lives." pic.twitter.com/tSxwMNL3E9

— The Columbia Bugle 🇺🇸 (@ColumbiaBugle) October 22, 2020

This is becoming a popular theme in the politically correct press.

“I think people are gonna be sitting in a recession and they’re not going to write a blank check to Ukraine. They just won’t do it..”

• US Election Outcome Threatens Ukraine Aid – Politico (RT)

EU nations should be prepared to provide more aid to Ukraine after the November 8 midterm elections in the US, Politico reported. If the Republican Party takes control of Congress, “NATO’s most generous donor to Ukraine’s war effort may suddenly seem much more parsimonious,” next year, the publication warned on Thursday. Similar predictions have been made by other outlets, such as Axios. Opinion polls have been showing dwindling support among American voters for supporting Ukraine. Members of the Republican Party have been increasingly criticizing President Joe Biden for asking Congress for tens of billions of dollars in aid to Kiev and not spending the money on domestic issues that the party finds important, like border protection.

“I think people are gonna be sitting in a recession and they’re not going to write a blank check to Ukraine. They just won’t do it,” House minority leader Kevin McCarthy told Punchbowl News this week. Republicans have long urged Europe to take a greater burden in supporting Ukraine, arguing that the crisis there is a bigger threat to Europeans than it is to the US. Politico predicted that with the party gaining a stronger grip on pursestrings, Washington’s approach to its allies may shift. The Biden administration is using “friendly encouragement … rather than haranguing its partners,” the news outlet noted. If the GOP takes over Congress, they would not use “such a convivial tone.”

But officials in Brussels don’t expect any serious changes in Washington’s generosity towards Ukraine due to an overall bipartisan consensus in favor of it. Estonian ambassador to the US, Kristjan Prikk, said he has “been assured by different members of Congress that there is a strong core support to continue the assistance to Ukraine as long as needed from both parties.” David McAllister, chair of the European Parliament’s Foreign Affairs Committee, told Politico that ultimately “the president maintains considerable control over foreign policy.” Meanwhile, European voters are feeling the pain of the trade breakup with Russia and the surge in energy prices it has caused. The EU leadership has been calling for unity and resolve in the face of economic hardships, stating that the bloc had to ensure Moscow’s defeat by Kiev.

Zelensky is fluent in Russian. They all are. “The Russian language is nothing but an “element of enemy propaganda and brainwashing of our people..”

• Russian Language Should Become Extinct In Ukraine – Security Chief (RT)

The Russian language should be eradicated in Ukraine as it is allegedly being used as a tool by Moscow to wield influence on Ukrainians, one of the country’s key security officials has claimed. The Russian language is nothing but an “element of enemy propaganda and brainwashing of our people,” Alexey Danilov, the head of Ukraine’s National Security and Defense Council, said on the ‘Big Lviv Talks’ show on Friday. The official also spoke in favor of Ukrainians learning English instead. According to Danilov, the very idea that Ukrainians have to understand the Russian tongue is a “dangerous narrative.” “Look, we don’t want anything from them [Russians]. Why don’t they leave us alone? Let them go to their swamps and croak in the Russian language,” he stated.

The senior official went on to criticize pundits and experts who speak Russian while appearing on Ukrainian TV. According to the 2001 census, approximately 14.3 million Ukrainians (29% of the population) speak Russian as their first language. Some other estimates put that number even higher. The language is particularly widespread in the eastern and southern regions of the country. Ever since the Maidan coup back in 2014, Moscow has been consistently accusing the Ukrainian government of systematically discriminating against Russian-speakers. The perceived violations of the linguistic minority’s rights were also cited by the secessionist movements in the Donetsk and Lugansk Regions, parts of which went on to become the Donetsk and Lugansk People’s Republics, respectively.

Russian President Vladimir Putin recently cautioned his country against taking cues from those who engage in ‘cancel culture’. Speaking at a media conference in Astana, Kazakhstan, he noted that around three million Ukrainians permanently reside in Russia. “How can we prohibit their language and culture? We don’t have anything of the kind on our minds,” Putin added. Commenting on reports about a man who had been fined in Moscow for listening to Ukrainian music in his car, the president said that attempts to ban the Ukrainian language in Russia were “illegal in themselves.”

Blinken.

• The Arms-Swapper (John Kiriakou)

The problem the Ukrainians are facing is that American weapons are difficult to use. They’re sophisticated and complicated. And there just isn’t any time for Americans to train Ukrainians in how to use them. A better idea, the administration thinks, is to just ask countries around the world that have Russian weapons to help. It wasn’t just these three South American countries that he asked. Blinken also asked South Africa, Finland, Cambodia, Rwanda, Mexico, the Democratic Republic of Congo and Cyprus. Would they send their Russian weapons to Ukraine and take American weapons in return? According to The New York Times, most of those countries said yes. Cyprus, though, said no. The Cyprus situation is what I was referring to at the start of this article. Greece and Turkey are both members of NATO. Cyprus is not.

Greece and Cyprus are members of the European Union. Turkey is not. In 1974, Turkey invaded Cyprus and has occupied the northern third of the island ever since. There are 33,000 Turkish occupation troops there right now. In 1974, Henry Kissinger, who was then both secretary of state and national security adviser, believed that the only way to stop the fighting was to impose an arms embargo on all three countries. Greece quit NATO in protest. The arms embargo didn’t last long. It was lifted on Greece and Turkey in 1979 and Greece rejoined NATO. But for reasons that have never been terribly clear, the arms embargo was maintained on Cyprus — until last month. [A commonly cited explanation for the embargo was to support U.N.-facilitated reunification efforts for Cyprus.]

In the intervening 48 years, Cyprus developed its economy, joined the European Union and bought French and Russian weapons. Now Tony Blinken wants them to send those Russian weapons to the Ukrainians. The Cypriot parliament asked rhetorically last week where the United States has been for the past 48 years, while some 1,510 Cypriots are still missing and presumed dead from the Turkish invasion. Even five American citizens are still missing from the conflict. They told Tony Blinken that they have more pressing problems than what the nationality of Ukraine’s weapons happens to be. They’re worried about 33,000 Turkish combat troops and daily Turkish statements that another invasion may be in the cards in the run-up to Turkish elections next year.

George Webb – Schiff

Schiff shifting blame of Yu to Trump? Didn’t he do the same thing with his Ukraine weapons deals with Hunter Biden with his encrypted Blackberrys? pic.twitter.com/0uBPTXXw4h

— George Webb – Investigative Journalist (@RealGeorgeWebb1) October 21, 2022

“..a unilateral decision of this kind is, of course, a violation of essential terms of the agreements which would lead to a termination of supplies.”

• EU Leaders Fail To Agree On Russian Gas Price Cap (RT)

EU leaders have failed to agree on a gas price cap following a summit in Brussels, but expressed their willingness to keep looking for bloc-wide solutions to the energy crisis. “There is a strong and unanimously shared determination to act together, as Europeans, to achieve three goals: lowering prices, ensuring security of supply, and continuing to work to reduce demand,” European Council President Charles Michel said after the meeting in the Belgian capital concluded late on Thursday. During a press conference on Friday morning, Michel insisted that the summit had sent “a clear signal to the market” and pledged that “there will be an effect very soon” from the EU’s moves to alleviate the energy crisis.

While they failed to find common ground on a gas price cap, the EU leaders asked the European Commission to come up with a “temporary dynamic price corridor on natural gas transactions to immediately limit episodes of excessive gas prices.” The participants of the summit also suggested that the EU’s joint purchasing power should be used as leverage in negotiations with global suppliers of gas. Joint purchasing would be voluntary for member states, but would require them to buy 15% of the volume needed to fill gas storage through the bloc’s mechanisms. EU energy ministers are expected to meet next week to discuss solutions to the crisis, which was exacerbated by the fallout from European sanctions on Moscow over the conflict in Ukraine and the subsequent drastic reduction of Russian gas supplies to the bloc. The situation deteriorated even further in late September when the Nord Stream pipelines, which deliver Russian gas to European customers through Germany, were damaged.

German Chancellor Olaf Scholz, who opposes radical interventions in the gas market, said after the summit that “there is a lot to do to make this concrete, but we need to find a concrete way to limit” the spikes in prices. Dutch Prime Minister Mark Rutte has pointed out that it was “very difficult to see” an agreement on the price cap being reached within the next few weeks. “We really have to assess all the pros and cons and the ramifications. If it would not fulfill the requirements, for example, could also lead to a higher base price or gas sailing away from Europe,” he pointed out. Earlier this month, Russian President Vladimir Putin warned that Moscow would cut off energy deliveries altogether if any price caps were imposed. The head of Russian gas giant Gazprom Alexey Miller also insisted last week that “a unilateral decision of this kind is, of course, a violation of essential terms of the agreements which would lead to a termination of supplies.”

How to make theft legal. And lose your own legality in the process.

• EU Wants To Use Frozen Russian Assets To Finance Ukraine (RT)

EU leaders have instructed the European Commission to prepare proposals on ways of using frozen Russian assets to rebuild Ukraine, Russian media reported on Friday. The statement comes as EU leaders wrapped up a two-day summit in Brussels. “We have to talk about the use of [frozen] assets that we have – Russian [frozen] assets. We have over €300 billion ($292 billion) of [frozen] assets and how we can use them in benefit of Ukraine,” Estonian Prime Minister Kaja Kallas said on Friday, as quoted by CNN. Legally, frozen funds still belong to Russia or its citizens. In order to spend those assets, the EU needs to find a way of confiscating them. According to media reports, EU leaders will discuss the possible confiscation of frozen Russian assets at a summit in Brussels in May.

European Commission President Ursula von der Leyen said the EU was looking to provide Ukraine with about €1.5 billion each month. The bloc’s finance ministers have been tasked with pulling together the money. The EU seized property belonging to Russian businessmen and companies, along with the assets of the Russian Central Bank, as part of sanctions against Moscow. The idea of using the funds in Ukraine was first put forward several months ago and was supported by politicians such as Ukrainian President Vladimir Zelensky, former UK prime minister Liz Truss, and president of the European Council Charles Michel. Top US officials including Treasury Secretary Janet Yellen warned that using those funds in Ukraine could be illegal and would discourage other countries from investing in the United States. Russia strongly criticized the seizure of its assets by the Western nations, with Foreign Minister Sergey Lavrov saying the asset freeze essentially constitutes theft.

“See you in Moscow on the Victory Day!”

• Musk Spars With Medvedev (RT)

US billionaire Elon Musk and former Russian president, Dmitry Medvedev have lashed out at each other on Twitter. The Tesla CEO asked about the situation on the frontline in Ukraine, to which Medvedev invited him to Moscow to celebrate Victory Day. The exchange came on Friday after Musk expressed appreciation for a tongue-in-cheek comment that Medvedev made about outgoing British Prime Minister Liz Truss. He followed up on the compliment by asking Medvedev: “Btw, how’s it going in Bakhmut?” He was referring to a frontline city in the Donetsk People’s Republic in Russia which is currently controlled by Ukrainian troops. “See you in Moscow on the Victory Day!” Medvedev responded.

The term “Victory Day” usually refers to the Russian national holiday on May 9, which marks the defeat of Nazi Germany, when the country holds large-scale military parades in Moscow and other major cities. The first part of the online conversation between Medvedev and Musk was about the former president’s comment on Truss’ short tenure as Britain’s prime minister, which the billionaire called “a good troll.” Medvedev reacted to Truss’ resignation this week by bidding her farewell and congratulating “lettuce,” alluding to a popular running joke in Britain. Last week, The Economist magazine said that in just seven days of being in control since the period of mourning for Queen Elizabeth II ended, Truss “blew up her own government.” The time is “roughly the shelf-life of a lettuce,” it added. The Daily Star tabloid responded last Friday by launching an online broadcast of a lettuce, wondering if it would last longer than the prime minister. Truss resigned on Thursday.

The Energy Charter Treaty lets companies, investors sue governments for perceived damage to their profits. God knows why it was ever signed.

• France To Leave Energy Charter Treaty (RT)

French President Emmanuel Macron announced Friday that France will leave the Energy Charter Treaty. Report informs, citing Politico, that the pact, which allows international companies and investors to sue governments over interventions that hit the profits of energy projects, is increasingly seen as a threat to national climate plans. “France has decided to withdraw from the Energy Charter Treaty,” Macron said at a press conference following an EU leaders’ summit in Brussels, adding that the move is “coherent” with the country’s climate ambitions and the Paris climate agreement. The decision follows announcements from Spain, the Netherlands and Poland that they will withdraw from the pact. Germany and Belgium have signaled they are considering their options. Earlier this week, France’s High Council on Climate said continued membership of the treaty posed a threat to the EU’s climate goals.

This committee is America at its worst. It beats even Mueller for that top spot.

They got Steve Bannon convicted yesterday, but he says he simply acted on his lawyers’ advice.

• Trump Officially Subpoenaed By Jan. 6 Committee (Axios)

The House select committee investigating the Jan. 6 attack on Friday formally issued a subpoena to former President Trump. Trump is the highest-ranking individual targeted for testimony by the panel, which has been building a case that the ex-president was the primary instigator of the deadly riot. Reps. Bennie Thompson (D-Miss.) and Liz Cheney (R-Wyo.), the chair and vice chair of the panel, are requesting Trump turn over documents by Nov. 4 and appear for a deposition on Nov. 14. “As demonstrated in our hearings, we have assembled overwhelming evidence … that you personally orchestrated and oversaw a multi-part effort to overturn the 2020 presidential election,” they wrote in a letter shared publicly Friday.

The committee seeks testimony about Trump’s dealings with associates who invoked the Fifth Amendment when questioned by the panel about their communications with him, including Michael Flynn, Roger Stone, John Eastman, Jeffrey Clark and Kelli Ward. It also says the testimony and documents will inform the committee’s planned legislative recommendations to ensure “no future President could succeed at anything even remotely similar to the unlawful steps you took to overturn the election.” The details: Among the documents listed in the subpoena are Trump’s communications on Jan. 6, 2021 and any photographs or videos taken on that day related to the Ellipse rally, the joint session of Congress or the Capitol riot. Also requested are:

Communications from Nov. 3, 2020 to Jan. 6, 2021 about efforts to press former Vice President Mike Pence, state legislators, the Justice Department and members of Congress to help overturn the election, as well as summoning supporters to D.C. on Jan. 6. Communications during that period between Trump and more than a dozen of his associates including Stone, Flynn, Eastman, Rudy Giuliani, Steve Bannon and Sidney Powell. Communications during that period about lawsuits and potential lawsuits that may have delayed or disrupted the joint session, and about fundraising off of claims of election fraud. Documents and communications from Sept. 1, 2020 to the present regarding the Oath Keepers, the Proud Boys, other militia groups and any individuals who attended the Ellipse rally or the Capitol riot. Communications from July, 2021 to the present about the select committee, as well as witnesses who testified to the panel and their lawyers.Documents about the destruction of any materials that would have been covered by the subpoena.

“For comparison, the entire Mueller Russiagate investigation cost $32 million.”

• Biden DOJ Wants $34 Million To Keep Targeting J6 Defendants (ZH)

The Biden administration’s weaponized Department of Justice (DOJ) has asked Congress for more than $34 million in new funding to continue its January 6th investigation, NBC News reports. The budget request for 2023 will fund 130 employees, including 80 federal prosecutors, to aid in the “extraordinary,” “unprecedented” and “complex” investigation. “We don’t have the manpower,” said one official told the outlet, noting that many J6 participants who will eventually be charged haven’t been arrested yet. Another official said that the cash crunch was a “culmination” of various factors – including the need to provide support for cases moving to trial. A third official called it a “work-in-progress” as prosecutors from US attorney’s offices around the country are recalled to their offices.

The request comes after federal officials have made around 850 arrests in the nearly 19 months since the incident – just a fraction of the 2,500 people who entered the Capitol, and the “hundreds more who committed serious crimes outside but haven’t yet been arrested.” The massive trove of evidence — be it body camera and surveillance video or damning content generated by suspects themselves — presents a tremendous challenge for an enormous bureaucracy working with technology that’s often a few years behind the times, at best. The U.S. Attorney’s Office for the District of Columbia, which is overseeing the Capitol siege investigation, is also running separate inquiries exploring the fake electors scheme and a conspiracy to obstruct the Jan. 6 electoral vote certification, both of which touch on Trump’s actions in the lead-up to Jan. 6, as well as on the day of the attack. -NBC News

The requested funding comes after it was slashed from the omnibus spending bill passed in March. In an interview earlier this week, Attorney General Merrick Garland told NBC News that he was “confident” the DOJ would be able to handle the workload regardless of what Congress does. “Of course, we’d like more resources, and if Congress wants to give that to us, that would be very nice,” Garland said on Tuesday. “But we have people — prosecutors and agents — from all over the country working on this matter, and I have every confidence in their ability, their professionalism, their dedication to this task.” Former US Attorney Joyce Vance told MSNBC: “People are concerned about the resources. It’s an enormous amount of cases, and that puts pressure not just on DOJ, but on the courts and probation. It puts pressure on the entire system.”

“..unlike the experts who sit on the CDC’s Vaccine Advisory Committee, many parents have actually read about the serious adverse reactions in young people who get the shots.”

• The Authorities Are Our Enemies (Kunstler)

Adding the mRNA shots to the official vaccine schedule will make permanent the liability shield their makers enjoy under the current emergency use authorization (EUA). Pfizer and Moderna are now off-the-hook for any responsibility, unless fraud over the vaxxes is proven in a court of law. Given the vast evidence of harms done by these products, will that be a difficult thing to do? Consider: cases for fraud can be brought in any jurisdiction of the USA, not just in the notoriously corrupt DC federal district court, which does not recognize crime for what it is (crime). This is the first time that a pharmaceutical under an EUA has been admitted to the childhood vaccine schedule.

The Vaccine Advisory Committee said it was okay because it consulted with the Department of Justice’s Office of General Counsel, and the lawyers there said it was okay. One might ask: is it within the purview of the DOJ’s Office of General Counsel to review the medical criteria for such a decision? The answer must be no. How are they qualified? You may be certain they did not parse the drug trial data on the mRNA products, or study the official reports of deaths and injuries. In short, they know nothing. Their authority in the matter is vacated. Since many states and localities go by the CDC’s vaccine guidelines, as well as pediatricians, then millions of children will be required to get the shots to attend school. So, the CDC has not only put an as-yet-untold number of kids on the road to disability, infertility, and death, but it may have coincidentally destroyed public schooling in America.

The so-called “uptake” on mRNA shots for children has been paltry. Parents do not want their kids to get the shots. Do you know why? I’ll tell you: Because, unlike the experts who sit on the CDC’s Vaccine Advisory Committee, many parents have actually read about the serious adverse reactions in young people who get the shots. And many more have heard enough horrifying rumors — despite the criminal delinquency of the major news media in ignoring any negative news about the vaxxes — prompting these parents to steer clear of vaxxing their children. Other countries have officially and altogether discontinued mRNA vaxxes for children. Do you think that’s for no reason?

Reverse damage

Is it possible to reverse damage from spike proteins? The options for detox are both interesting and encouraging. Why are public health officials and the media not talking about this? pic.twitter.com/y3n4Dee3kN

— America's Frontline Doctors (@AFLDSorg) October 21, 2022

“This failure of due diligence has come at a huge price – to doctors and nurses as individuals and clinicians, to the medical profession as a body, and to the public as a whole.”

• Time for Doctors and Politicians to Stop Ignoring the Devastating Data (Evans)

Tragically, the vast majority of the medical profession and wider public were deceived by the powerful and incessant Government and media messaging that the vaccines would be our ‘only way out’ and that we should ‘trust the science’. It is now clear that most people, including doctors, did no independent research beyond listening to the Government press conferences, the pronouncements of health officials, the Today programme and reading the Times, Telegraph, Guardian, Mail and so on. This failure of due diligence has come at a huge price – to doctors and nurses as individuals and clinicians, to the medical profession as a body, and to the public as a whole.

Trust in the medical profession and health bodies has been seriously damaged, as evidence of unprecedented levels of vaccine injury mount and the extravagant claims of 95% or even 100% effectiveness have not been borne out in the real world. Indeed, real world data is repeatedly showing negative effectiveness of the Covid jabs in a matter of weeks – meaning that you are more likely to catch Covid if you are vaccinated than unvaccinated. These Covid jabs have certainly not lived up to the incessantly repeated marketing slogan of ‘safe and effective’. The UKMFA is calling now for the medical profession, politicians and decision-makers to actively engage with the huge amount of published science and real-world data, and to listen to the multitude of eminent scientists, doctors and independent journalists laying the facts out for easy independent research and understanding.

A good place to start would be the two part paper “Curing the pandemic of misinformation on COVID-19 mRNA vaccines through real evidence-based medicine”, published by Dr. Aseem Malhotra in the Journal of Insulin Resistance on September 26th 2022, and the press conference that he gave to explain his findings and to call for an immediate and “complete suspension” of mRNA COVID-19 Vaccines pending a full and independent investigation into the safety of these products. As a society, we now have an opportunity and responsibility to change course, to start to put things right and to hold accountable those people who failed in their duties and responsibilities to protect the public, so that this can never happen again. There is no shame in admitting that you were wrong or misled. Science, unlike the dogma of ‘The Science’, is all about constantly testing existing hypotheses and adapting and changing them when the facts change or new information comes to light. We have more than enough evidence to challenge the hypothesis that Covid vaccines are ‘safe and effective’.

Kolakusic EU deaths
https://twitter.com/i/status/1583377222152654848

“Plaintiffs move for the following government officials to be deposed as a part of their limited preliminary injunction discovery. These are: (1) NIAID Director and White House Chief Medical Advisor Dr. Anthony Fauci, (2) Deputy Assistant to the President and Director of White House Digital Strategy Rob Flaherty, (3) former White House Senior COVID-19 Advisory Andrew Slavitt, (4) former White House Press Secretary Jennifer Psaki, (5) FBI Supervisory Special Agent Elvis Chan, (6) CISA Director Jen Easterly, (7) CISA official Lauren Protentis, (8) Surgeon General Vivek Murthy, (9) CDC Chief of the Digital Media Branch Carol Crawford, and (10) Acting Coordinator of the State Department’s Global Engagement Center Daniel Kimmage. Defendants oppose Plaintiffs’ deposing of all of them”

• Fauci Forced To Testify On Social Media Censorship (RT)

The White House’s chief medical advisor, Anthony Fauci, and other senior officials are set to be deposed under oath as part of a lawsuit claiming the government worked alongside social media platforms to create a “massive censorship enterprise” throughout the Covid-19 outbreak. In a Friday ruling, Judge Terry Doughty granted a joint request from the attorneys general of Missouri and Louisiana to compel several current and former officials to testify in the suit, among them Fauci, ex-White House press secretary Jen Psaki, Director of White House Digital Strategy Rob Flaherty, Surgeon General Vivek Murthy and two high-level figures from the FBI and Department of Homeland Security (DHS).

“After finding documentation of a collusive relationship between the [Joe] Biden administration and social media companies to censor free speech, we immediately filed a motion to get these officials under oath,” Missouri AG Eric Schmitt said in a statement. “It is high time we shine a light on this censorship enterprise and force these officials to come clean to the American people, and this ruling will allow us to do just that. We’ll keep pressing for the truth.” While the defense insisted that senior officials can only be called to testify about their actions in office under “extraordinary circumstances,” Judge Doughty said the personnel in question met that standard. He added that the two GOP-led states “have proven that Dr. Fauci has personal knowledge about the issue concerning censorship across social media as it related to Covid-19,”ordering him to cooperate with a deposition.

Requests to depose the other officials were granted on similar grounds, as the judge concluded all either held direct meetings with social media firms about the purported censorship, or had close knowledge of those discussions. Jen Easterly, who heads up the DHS’s Cybersecurity and Infrastructure Security Agency (CISA) was also ordered to testify. She played a “central role” in “flagging misinformation to social-media companies for censorship,”the plaintiffs argued, describing the cyber agency the “nerve center” of “the federal government’s efforts to censor social media users.” The same official was said to be involved in the DHS’ now-defunct ‘Disinformation Governance Board’ – dubbed the ‘Ministry of Truth’ by critics – which would have created a new mechanism to facilitate cooperation between the White House and social media sites.

Initially filed last May by Schmitt and Louisiana Attorney General Jeff Landry, the lawsuit claims the federal government encouraged online platforms to censor, delete or ban certain speech about the pandemic, including discussion of the “lab leak theory of Covid-19’s origin,” as well as questions about the effectiveness of face masks, vaccines or lockdown policies, among other issues. The two AGs have largely relied on documents obtained through subpoenas of YouTube, Twitter and Facebook’s parent firm Meta, which detail regular communications between the government and social media sites. The White House, as well as the eight officials ordered to testify, have yet to comment on Friday’s ruling. The depositions must take place within 30 days of the order, though it remains unclear whether the defense intends to appeal the decision.

95%

Reminder… pic.twitter.com/UFZNVPp0ZY

— Wittgenstein (@backtolife_2023) October 21, 2022

”Everyone should be free to get numerous shots because that is freedom.

And everyone should be free to reject any unwanted shot because that, too, is freedom”

• We Will Be Challenging Any State’s Covid-19 School Vaccine Requirement (Siri)

The CDC’s vaccine advisory committee unanimously voted a few hours ago to add the Covid-19 vaccine to the CDC’s routine childhood vaccination schedule. Immediately following the vote, I received a call from Del Bigtree, ICAN’s founder and host of The HighWire, to tell me that ICAN will support a legal challenge to any state that imposes a Covid-19 vaccine mandate to attend school. We look forward to bringing those challenges to protect the individual right of every American, especially the youngest among us, as we successfully did when challenging the San Diego School District’s Covid-19 vaccine mandate. Everyone should be free to get numerous shots because that is freedom.

And everyone should be free to reject any unwanted shot because that, too, is freedom. While most post-March 2020 mandates have been successfully challenged or rescinded, we must never forget that the repressive arm of government is just behind a curtain, waiting to strangle our rights. That is why we must fight, always fight, to push back against that oppression. It is not a war that is won. It is an endless battle with one side pushing the needle toward eliminating individual rights and the other side that must never stop pushing back – because once it swings too far, we will not easily regain our rights. Power seized is rarely returned.

The next battle front is the body of every child in this country whose parents do not want them to receive a Covid-19 vaccine. A product for which you cannot sue the manufacturers for harm. A product whose clinical trial for children was underpowered, not properly controlled, and that did not review safety for a sufficient duration. But even in the absence of these issues, corrosive rights-crushing mandates should never exist. We look forward to, with ICAN’s support, challenging any state’s Covid-19 vaccine mandate for school.

P.S. Note that the CDC’s action of adding the Covid-19 vaccine to its routine childhood vaccine schedule does not automatically make it mandatory in all states for attending school. In most states, the state itself needs to take action to make it mandatory. The expectation is that some states will seek to do just that.

C19 injury

This healthcare worker followed mandates and now has chronic inflammatory demyelinating polyradiculoneuropathy. She gets monthly infusions now. Tiktok suspended her last account for speaking up about her injuries. pic.twitter.com/qYrfGiYADv

— Nashville Angela (@angelanashtn) October 21, 2022

I read this from Sotomayor earlier, and never mind the Turley setting. It’s beautiful, and almost poetic.

• I Try, But He Does It Better. He Cares About People. (Sotomayor)

Supreme Court Justice Sonia Sotomayor, one of the Court’s most strident liberals, praised her conservative colleague, Justice Clarence Thomas, in a lecture at Roosevelt University in Chicago on Thursday evening, noting his unique compassion for others. Sotomayor was quoted as saying: “I have disagreed with [Thomas] more than with any other justice. Which means we don’t come together on many cases. And yet I can tell you that I spend time with him, understanding that he is one of the few justices who knows practically everybody in our building. He knows their name, he knows the things about their life, what their family is suffering. He’ll tell me, you know that person’s wife is sick right now, or that person’s child is having difficulty.

There’s no other justice who does that. I try, but he does it better. He cares about people. Now, he cares on legal interests differently. And he sees those legal issues much differently than I do. I tell people, you know Clarence believes, just like him, because he grew up very, very poor, that everyone is capable of picking themselves up by their bootstraps. I understand that some people can’t reach their bootstraps. That’s a fundamental difference in how we view what the law can or should or does do for people. But I can appreciate him.”

Elephants
https://twitter.com/i/status/1583479100265463809

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Debt Rattle March 18 2020

Mar 182020

March 18, 2020 Posted by Raúl Ilargi Meijer at 11:00 am Finance Tagged with: Bailouts, Boeing, casinos, central banks, coronavirus, Covid19, Cyprus, EU, hotels, Mnuchin, money tree, unemployment 47 Responses »

Matson Aircraft refueling at Semakh, British Mandate Palestine 1931

• Global Powers Unleash Trillions Of Dollars To Stem Coronavirus Crisis (R.)

• We’re at a Real Risk of Financial Markets Being Closed – Bianco (NZZ)

• The Lesson (Henrich)

• Boeing Seeks ‘Tens Of Billions’ In Bailouts (ZH)

• Hotel Industry To Ask Trump For $150 Billion In Aid (LAT)

• American Indian Casinos Close For Coronavirus, Seek $18 Billion Aid (R.)

• Mnuchin Warns Senators Of 20% US Unemployment Without Coronavirus Rescue (R.)

• 18% Of US Workers Have Lost Jobs Or Hours Since Coronavirus Hit (LAT)

• COVID-19 Pandemic Could Continue For 2 YEARS – German Health Expert (RT)

• New Coronavirus Can Persist In Air For Hours And On Surfaces For Days (R.)

• Australian Scientists Map How Immune System Fights Virus (BBC)

• A Coronavirus Outbreak In Jails Or Prisons Could Turn Into A Nightmare (Vox)

• Cyprus Bans Flights From 28 Countries From March 21 (R.)

• Beijing Tells NYT, WSJ, WaPo Journalists To Hand In Credentials (RT)

It is truly great to see that over the past 10 days or so, millions of coronavirus experts worldwide have come out of hiding whose existence we knew nothing about beforehand. We at the Automatic Earth have been following the virus for well over 2 months, and not only do we still not understand as much as all these experts, we even contradict ourselves and each other from time to time. With all the new expert knowledge and -especially- opinions, no doubt the crisis will be solved real soon now.

When I started working very early this working, one of the first things I saw was this from Reuters. Which shows, while for instance Worldometer still had total deaths at 7,915, a 8,410+ number. Somehow it feels too specific for just a random mistake. Worldometer now says 8,010, so there is an increase, but not nearly as much.

Do note, however, that both cases and deaths are up by much larger numbers in the past 24 hours than ever before…

• Cases 202,270 (+ 18,137 from yesterday’s 184,133)

• Deaths 8,012 (+ 830 from yesterday’s 7,182)

These numbers, too, are rising relentlessly.

From Worldometer yesterday evening (before their day’s close)

From Worldometer -NOTE: mortality rate is now at 9%!- (Note: some call this rate “misleading”, but that can by definition only be true if you don’t know the parameters. Worldometer is very clear: the death rate is part of Closed Cases, not All Cases. You may argue that Active Cases should be part of the equation, but that would only insert uncertainty into the number. Neither Worldometer nor I imply that 9% will be the ultimate fatality rate, just that at present it’s the rate among Closed Cases.)

From SCMP: (Note: the SCMP graph was useful when China was the focal point; they are falling behind now)

From COVID2019.app: (New format lacks new cases and deaths)

Somebody found a money tree. Or, rather, one in every country.

• Global Powers Unleash Trillions Of Dollars To Stem Coronavirus Crisis (R.)

The world’s richest nations prepared more costly measures on Tuesday to combat the global fallout of the coronavirus that has infected tens of thousands of people, triggered social restrictions unseen since World War Two and sent economies spinning toward recession. With the highly contagious respiratory disease that originated in China racing across the world to infect more than 196,000 people so far, governments on every continent have implemented draconian containment measures from halting travel to stopping sporting events and religious gatherings. While the main aim is to avoid deaths – currently at over 7,800 – global powers were also focusing on how to limit the inevitably devastating economic impact.

In the world’s biggest economy, U.S. President Donald Trump’s administration has proposed pumping $1 trillion into the market. Trump wants to send cash to Americans within two weeks as the country’s death toll approached 100 and more testing sent the number of coronavirus cases to over 5,700. Airlines are among the worst-hit sector, with U.S. carriers seeking at least $50 billion in grants and loans to stay afloat as passenger numbers evaporate. Britain, which has told people to avoid pubs, clubs, restaurants, cinemas and theaters, unveiled a 330 billion pounds ($400 billion) rescue package for businesses threatened with collapse. Budget forecasters said the scale of borrowing needed might resemble the vast amount of debt taken on during the 1939-1945 war against Nazi Germany.

“Now is not a time to be squeamish about public sector debt,” Robert Chote, head of the Office for Budget Responsibility, which provides independent analysis of the UK’s public finances, told lawmakers. France is to pump 45 billion euros ($50 billion) of crisis measures into its economy to help companies and workers, with output expected to contract 1% this year. “I have always defended financial rigor in peacetime so that France does not have to skimp on its budget in times of war,” Budget Minister Gerald Darmanin was quoted as saying by financial daily Les Echos. The European Union eased its rules to allow companies to receive state grants up to 500,000 euros ($551,000) or guarantees on bank loans to ensure liquidity.

But even with the promised cash splurges, world stock markets and oil prices were unable to shake off their coronavirus nightmare after Wall Street on Monday saw its worst rout since the Black Monday crash of 1987. The Philippines was the first country to close markets, while Europe – now the epicenter of the pandemic – saw airline and travel stocks plunge another 7%.

Central banks have run out of tools. Philippines the first to close markets altogether.

• We’re at a Real Risk of Financial Markets Being Closed – Bianco (NZZ)

Mr. Bianco, the Federal Reserve takes massive emergency actions. What does this mean for financial markets? The Central Banks went all in. They fired all of their ammunition and they’ve got only one goal in mind: They have to stop the decline in financial markets. This started late last week with the Fed’s giant repo operation. You can also throw in the announcements of the ECB and the Bank of Japan. Plus, we have the extraordinary actions taken by European governments to stem the effects of the pandemic. The government of Germany for instance is basically guaranteeing everybody’s job.

However, investors don’t seem convinced. What’s going to happen if markets drop further? Central Banks need to stop the stock market from falling through last week’s low. I believe if markets fall through those levels and keep going down, the so-called Fed Put is dead. It doesn’t work anymore, so quit trying to find new ways to exercise it. Just understand Einstein’s definition of insanity: Doing the same thing over and over again, and expecting different results.

What are the ramifications if the Fed Put doesn’t work anymore? Central Banks will need to move on. So if stocks make new lows we’re at a real risk of financial markets being closed. The Fed and other Central Banks have fired all their ammunition and if markets crash through last week’s lows, there’s nothing left. The Fed can’t buy equities outright without a change of the Federal Reserve Act. It would take weeks for Congress to do that. Even if Congress moves with lightning speed it will take them at least a week, and it will be over before that.

What would be the benefit of closing markets? It took the stock market sixteen trading days to drop by 27% from the all-time highs to Thursday’s lows. We have never seen anything close to that in history. The closest we’ve ever been in history was 1929, when it took 42 days to get from the all-time highs to a 20% correction. The speed in this decline is unprecedented.

Why is it so important to stop this crash? If it continues, you will get margin calls, involuntary liquidation. Markets will lose their ability to price securities, especially things like high yield bonds and emerging markets securities. Funds in those areas will be unavailable for people to redeem because they won’t have any prices. There will be trapped money. Also, you will get broken covenants in the corporate debt area, and that will force changes of control or restructurings. But the biggest damage will be that pensions will become underfunded. Companies will be forced to pony up billions of Dollars to get their pensions back into funding.

[..] You’re been in the investment business for a long time and have seen quite a few crashes. How do you experience this crisis personally? This is unlike anything we’ve seen in our lifetime. What’s going on in financial markets today exceeds the financial crisis of 2008, it exceeds 9/11, it exceeds the tech peak, and it exceeds the 1987 crash. Maybe 1929 is still bigger, but few of us were alive then. We’re writing a new chapter for American and world history textbooks. We’re only a few pages into it, and we’re not sure how it will end, but our grandchildren will one day learn school about the great pandemic of 2020 and what it meant for world history.

“What I’m opposed to is the hype, hypocrisy and excess that has preceded it. People got greedy, they piled into stocks at ungodly valuations. Companies that didn’t save or prepare for a crisis, instead were focused on short term market gains to juice up their stock prices. Companies such as Boeing that cut corners and blew money on buybacks for financial engineering purposes to enrich upper management and shareholders. I say screw them..”

• The Lesson (Henrich)

The lesson of it all? The lesson is that lessons are not being learned. Of course the human species has an ingrained problem: We are all born with a blank sheet and have to learn everything from scratch. It would be helpful though if the elders could pass lessons from past mistakes on to the new generation. But no. So we keep making the same stupid mistakes. And here we are. Just four weeks after all time highs in markets America is again turning into bailout nation. Yes coronavirus is an unforeseen shock. So what? We’re supposed to handle a shock. We’re supposed to be prepared. We’re supposed to have savings and great balance sheets.

After an 11 year recovery and market bull run based on cheap and easy money shouldn’t things be great and shouldn’t we be well prepared for the next downturn? Is that really too much to ask? Apparently. We can’t even go 4 weeks without the Fed going apeshit on cutting rates to zero, launching $700B in QE, making discount windows available and launching $500B, even trillion dollar repos. We can’t even go 4 weeks without the government launching a proposed $850B stimulus package, tax cuts, free money checks of $1,000 to Americans and suggesting bailouts for $BA and $GE. That’s how fragile things are. They must be, otherwise the system would be able to handle a temporary shock. But it can’t. Why? Well for one our supposed great economy ever has the vast majority of Americans live paycheck to paycheck:

The consumer is doing great:

“78 percent of full-time workers said they live paycheck to paycheck, up from 75 percent last year.
Overall, 71 percent of all U.S. workers said they're now in debt, up from 68 percent a year ago.” https://t.co/iLgLYRrPYN

— Sven Henrich (@NorthmanTrader) December 15, 2019

That’s a systemic problem. Sure you can blame people for living beyond their means, but in general most people just don’t have the income power to keep abreast with rising medial costs, home prices and all the other fun inflationary items that the Fed simply doesn’t count as inflation. How ignorant they are. PCE deflator. Please. And then of course the same lesson again not learned that keeps repeating ahead of every bust: Greed and more greed. When has it ever been a good idea to chase stocks to 150% market cap to GDP or even higher? The answer is never. Yet they convinced themselves and others that it’s different this time. New flash: It wasn’t. A lesson not learned and yet they did it. The chart was screaming unsutainability. And here we are 4 weeks later, yesterday closing at 109.5% market cap to GDP:

Reversion to the mean. And it could eventually get much worse. I showed this chart in Bull Cliff in February and I stated: “Investors keep piling money into this historically priced market….Central banks can deny all they want that they are not responsible for asset price inflation, but everybody knows better. The denials are not only hollow they are straight out lies. And having created the Pavlovian effect we now see in the investment community they are leading investors to abandon all sense of risk when risks are mounting ever more around us as valuations and earnings multiples keep expanding as a result of monetary policy. And hence it may be said that central bankers may be leading investors off the cliff.”

[..] I’m not opposed to the government stepping in to help in an emergency. That’s why we have government. What I’m opposed to is the hype, hypocrisy and excess that has preceded it. People got greedy, they piled into stocks at ungodly valuations. Companies that didn’t save or prepare for a crisis, instead were focused on short term market gains to juice up their stock prices. Companies such as Boeing that cut corners and blew money on buybacks for financial engineering purposes to enrich upper management and shareholders. I say screw them. If you don’t learn the lessons of the past then live with the consequences. And who pays ultimately for the consequences? We’ve seen this movie before

Still the greatest financial crisis explanation rant ever.
See if you note anything different 10 years later.#wankingbankers pic.twitter.com/FHutYeSJqD

— Sven Henrich (@NorthmanTrader) January 24, 2019

Even Tyler Durden vehemently disagrees. But this is major military supplier Boeing.

• Boeing Seeks ‘Tens Of Billions’ In Bailouts (ZH)

In its latest 8K, the plunging planemaker has completely drawn down its $13.8 billion credit line that it entered in October 2018 as it “navigates current business challenges” exposing just how fast this company is burning through cash. [..] This comes just hours after sources told Reuters that Boeing is seeking a bailout of ‘tens of billions’ in US government loan guarantees amid the Covid-19 crisis.[..] As we raged previously, this bailout demand comes after the company blew nearly $100 billion on stock buybacks since 2013 helping push its stock to all-time highs not that long ago, and instead of selling stock to get liquidity, they’re asking the Trump administration for a massive bailout.

So, no, nobody in their right minds should give Boeing even one penny in “short term aid”. Instead, management and the board should be ordered to sell as much stock as they need – you know, the opposite of buying it back – to maintain the business, even it means sending the stock price crashing far lower. Because it’s called capitalism, and because there is no reason why taxpayers should foot the bill for a company which instead of saving cash when times were good, was handing it out to shareholders and a handful of executives, and which should now for some insane reason be eligible for a bailout when times suddenly go bad. No: force Boeing – and others like it that spent billions repurchasing its stock while incurring massive amounts of debt – to sell its stock.

After all that’s what a public company’s stock is – a currency – and just as Boeing could repurchase it when it had cash, and lifted its stock price to all time highs, it should now sell its stock and use the proceeds to fund itself, like any other corporation does when it needs funding. Last time we checked, Boeing’s market cap was $73 billion, and it certainly afford to drop much more as the company now does the buyback in reverse. This is also a warning to Congress and the White House: if chronic stock repurchasers such as Boeing, are bailed out instead of ordered to find their own sources of liquidity, there will be a mutiny in America and rightfully so, because it was Boeing’s shareholders that got rich on the way up, and now it is somehow up to taxpayers to make sure the company, loaded up with record amounts of debt used to fund buybacks, survives one more quarter. That, in a word, is bullshit.

We have this opportunity to get the rotten apples out, but are we going to use it?

• Hotel Industry To Ask Trump For $150 Billion In Aid (LAT)

Staggered by the coronavirus outbreak, the lodging industry requested $150 billion in aid from the Trump administration Tuesday as Marriott International announced plans to furlough tens of thousands of workers. After a White House meeting with President Trump and Vice President Mike Pence, hotel industry leaders said the virus outbreak is on pace to cause a bigger economic hit than the 2001 terrorist strikes and the 2008-09 recession combined. In addition to the $150 billion requested by the hotel industry, other sectors of the travel industry — such as convention centers, theme parks and tour companies — have requested $100 billion in funding to overcome the crisis, said Roger Dow, president of the U.S. Travel Assn., the trade group for the country’s travel industry.

That is on top of the $58 billion in aid requested Monday by the airline industry to overcome a surge in flight cancellations amid new travel restrictions. Without federal aid to the travel and lodging industries, the U.S. could lose as many as 4 million jobs in 2020, pushing the unemployment rate from 3.3% to 6.3% across the country, Dow said. Hotel occupancy rates were around 80% a few weeks ago but are now 10% to 20% in the busiest cities of the country, Chip Rogers, president of the American Hotel & Lodging Assn., said in a conference call with reporters. The federal aid, he said, has been requested in the form of grants to keep workers employed until the crisis subsides. Details about how the money would be disbursed had yet to be decided, Rogers said.

Should casinos be bailed out? Or only those owed by Native Americans?

• American Indian Casinos Close For Coronavirus, Seek $18 Billion Aid (R.)

The Native American gaming industry on Tuesday requested $18 billion in U.S. federal aid as it shut casinos that are the sole source of commercial revenue for dozens of tribes in a bid to slow the coronavirus epidemic. Tribal governments will be unable to provide health and education services and will default on loans unless they get federal support to make up for lost casino money, the National Indian Gaming Association said in a letter to members of the U.S. House of Representatives. “Providing the means for tribal governments to continue paying all employees’ salaries and benefits will immensely help this country recover,” according to the letter addressed to Representatives Deb Haaland and Tom Cole of the House Native American Caucus.

The United States’ roughly 460 Indian casinos are in the process of closing given the threat of coronavirus to tribal members and many non-Native American employees. Tribes are sovereign nations but are following advice from U.S. states and the federal government to slow the virus’ spread. That means shutting American Indian casinos which employ a combined 700,000-plus people directly and indirectly and generated over $37 billion in 2017, making them the largest segment of the U.S. gaming industry, according to the association.

Frances Coppola: “Demand is falling because of virus control measures. Giving people money to spend (above their normal income) while simultaneously making it impossible for them to spend it is absurd.”

• Mnuchin Warns Senators Of 20% US Unemployment Without Coronavirus Rescue (R.)

U.S. Treasury Secretary Steven Mnuchin warned Republican senators on Tuesday that the country’s unemployment rate could hit 20% if they failed to act on a proposed coronavirus rescue package and there was lasting economic damage, a person familiar with the closed-door meeting said. Mnuchin met with senators to persuade them to pass a $1 trillion stimulus package that would send cash to Americans within two weeks and backstop airlines and other companies. The Senate is majority-controlled by President Donald Trump’s fellow Republicans. A Treasury official said Mnuchin was not providing a forecast but trying to illustrate the potential risks of inaction.

“During the meeting with Senate Republicans today, Secretary Mnuchin used several mathematical examples for illustrative purposes, but he never implied this would be the case,” Treasury spokeswoman Monica Crowley said in an emailed statement. The warning was similar to one issued to U.S. lawmakers at the depths of the 2008 financial crisis, when Treasury Secretary Henry Paulson and Federal Reserve Chair Ben Bernanke went to Capitol Hill to urge passage of a $700 billion plan to buy toxic mortgage assets.

Amazingly nice comment from @DanaBashCNN.

President @realDonaldTrump “is being the kind of leader that people need.”

It is incredible that unity is the byproduct of this aweful virus. It is beautiful to see and this is a great start. Thanks Dana…

pic.twitter.com/9ZNyOJkipx

— Eric Trump (@EricTrump) March 18, 2020

“56% of Americans considered the coronavirus outbreak a “real threat,” while 38% said it was “blown out of proportion.”

• 18% Of US Workers Have Lost Jobs Or Hours Since Coronavirus Hit (LAT)

As fallout from the coronavirus pandemic hits the economy, it’s slamming the American workforce: Some 18% of adults reported that they had been laid off or that their work hours had been cut, a new poll found. The proportion affected grew for lower-income households, with 25% of those making less than $50,000 a year reporting that they had been let go or had their hours reduced, according to a survey released Tuesday by NPR, PBS NewsHour and Marist of 835 working adults in the contiguous United States. The poll was conducted Friday and Saturday, just after stocks began their steep plunge and normal life started grinding to a halt, with schools and places of worship closing, concerts and conferences being canceled and sports leagues suspending their seasons. The same poll found that about 56% of Americans considered the coronavirus outbreak a “real threat,” while 38% said it was “blown out of proportion.”

Couldn’t we all make this prediction? It depends on 1001 variables. Who needs an expert for this?

• COVID-19 Pandemic Could Continue For 2 YEARS – German Health Expert (RT)

A senior German disease control expert has warned that the coronavirus pandemic could continue for two years, depending on how long it takes for an effective vaccine to be developed and if people develop immunity after illness. Speaking on Tuesday, the Robert Kock Institut’s (RKI) president, Prof. Lothar Wieler, said pandemics tend to run their course in waves, and factors influencing how it unfolds from this point include how many people become immune to it after contracting the virus – and how quickly a vaccine is made. The RKI, a German federal agency responsible for disease control and prevention, on Tuesday raised the country’s threat level from the ongoing coronavirus pandemic from ‘moderate’ to ‘high’.

It said the revision comes in light of the continuing increase in new infections of the rapidly-spreading virus, which originated in China late last year and whose symptoms range from fever to serious respiratory illness. Germany has recorded over 7,900 cases of Covid-19 to date, with 20 deaths. New research from RKI scientists and the Helios clinic group also says that the novel coronavirus can more seriously afflict adults aged under 60 who have no underlying health conditions than similar patients suffering severe pneumonia in the regular flu season.

Although countries around the globe have largely stepped up measures to counter the spread of the virus, including border closures, shutting schools and limiting mass gatherings, Covid-19 cases outside of China recently surpassed the total figure recorded inside the country that had, until now, suffered the worst of the outbreak. Italy, in particular, is struggling with the pandemic and recorded a larger single-day number of deaths last weekend than China did at the worst of the peak there.

I thought we already knew that, but the article is dated the 17th.

• New Coronavirus Can Persist In Air For Hours And On Surfaces For Days (R.)

The highly contagious novel coronavirus that has exploded into a global pandemic can remain viable and infectious in droplets in the air for hours and on surfaces up to days, according to a new study that should offer guidance to help people avoid contracting the respiratory illness called COVID-19. Scientists from the National Institute of Allergy and Infectious Diseases (NIAID), part of the U.S. National Institutes of Health, attempted to mimic the virus deposited from an infected person onto everyday surfaces in a household or hospital setting, such as through coughing or touching objects. They used a device to dispense an aerosol that duplicated the microscopic droplets created in a cough or a sneeze.

The scientists then investigated how long SARS-CoV-2 remained infectious on these surfaces, according to the study that appeared online in the New England Journal of Medicine on Tuesday – a day in which U.S. COVID-19 cases surged past 5,200 and deaths approached 100. The tests show that when the virus is carried by the droplets released when someone coughs or sneezes, it remains viable, or able to still infect people, in aerosols for at least three hours. On plastic and stainless steel, viable virus could be detected after three days. On cardboard, the virus was not viable after 24 hours. On copper, it took 4 hours for the virus to become inactivated.= In terms of half-life, the research team found that it takes about 66 minutes for half the virus particles to lose function if they are in an aerosol droplet.

That means that after another hour and six minutes, three quarters of the virus particles will be essentially inactivated but 25% will still be viable. The amount of viable virus at the end of the third hour will be down to 12.5%, according to the research led by Neeltje van Doremalen of the NIAID’s Montana facility at Rocky Mountain Laboratories. On stainless steel, it takes 5 hours 38 minutes for half of the virus particles to become inactive. On plastic, the half-life is 6 hours 49 minutes, researchers found. On cardboard, the half-life was about three and a half hours, but the researchers said there was a lot of variability in those results “so we advise caution” interpreting that number.

Encouraging, but looks like a long time option.

• Australian Scientists Map How Immune System Fights Virus (BBC)

Scientists in Australia say they have identified how the body’s immune system fights the Covid-19 virus. Their research, published in Nature Medicine journal on Tuesday, shows people are recovering from the new virus like they would from the flu. Determining which immune cells are appearing should also help with vaccine development, experts say. “This [discovery] is important because it is the first time where we are really understanding how our immune system fights novel coronavirus,” said study co-author Prof Katherine Kedzierska. The research by Melbourne’s Peter Doherty Institute for Infection and Immunity has been praised by other experts, with one calling it “a breakthrough”.

Many people have recovered from Covid-19, meaning it was already known that the immune system can successfully fight the virus. But for the first time, the research identified four types of immune cells which presented to fight Covid-19. They were observed by tracking a patient who had a mild-to-moderate case of the virus and no previous health issues. The 47-year-old woman from Wuhan, China, had presented to hospital in Australia. She recovered within 14 days. Prof Kedzierska told the BBC her team had examined the “whole breadth of the immune response” in this patient. Three days before the woman began to improve, specific cells were spotted in her bloodstream. In influenza patients, these same cells also appear around this time before recovery, Prof Kedzierska said.

Chest scans showed the patient’s lungs clearing after immune cells appeared

Iran has released 54,000 + 85,000 prisoners “temporarily”.

• A Coronavirus Outbreak In Jails Or Prisons Could Turn Into A Nightmare (Vox)

The next site of a deadly coronavirus outbreak may not be a cruise ship, conference, or school. It could be one of America’s thousands of jails or prisons. Just about all the concerns about coronavirus’s spread in packed social settings apply as much, if not more, to correctional settings. In a prison, multiple people can be placed in one cell. Hallways and gathering places are often small and tight (often deliberately so, to make it easier to control inmates). There is literally no escape, with little to no space for social distancing or similar recommendations experts make to combat coronavirus. Hand sanitizer can be contraband.

Such an outbreak could not only infect and kill hundreds or thousands of people in prison, but potentially spread to nearby communities as well. Visitors and correctional staff could spread the disease when they go back home, and inmates could spread it when they’re released. Even an outbreak contained within a jail or prison could strain nearby health care systems, as hundreds or thousands of people suddenly need medical care that jails and prisons themselves can’t provide. So if you want to “flatten the curve” to spread out the illness and avoid overwhelming health care systems, experts say, you should worry about coronavirus in prisons and jails.

In the US, the concern is particularly acute because America puts so many people in jail or prison. The US locks up about 2.3 million people on any given day — the highest prison and jail population of any country in the world. With an incarceration rate of 655 per 100,000 people, the US locks up people at nearly twice the rate of Russia, more than five times that of China, more than six times Canada and France, nearly nine times Germany, and almost 17 times Japan. “We can learn what works in terms of mitigation from other countries who have seen spikes in coronavirus already, but none of those countries have the level of incarceration that we have in the United States,” Tyler Winkelman, a doctor and researcher at the University of Minnesota focused on health care and criminal justice, told me.

While France and Germany go out of their way to keep EU (Schengen) borders open, EU member Cyprus says no.

• Cyprus Bans Flights From 28 Countries From March 21 (R.)

Cyprus on Tuesday announced a two-week ban on flights from 28 countries, including Britain and Greece, to curb the coronavirus outbreak. The measure will come into effect from 0100 GMT on March 21 for a 14-day period, an official statement said. It does not affect cargo flights. The island has already enacted stringent entry requirements, effective from March 16, barring anyone into the island, including Cypriots, without a medical certificate that they are clear of coronavirus. Those who do arrive are placed in compulsory quarantine in a government-supervised facility for two weeks. The east Mediterranean island has reported 49 cases of coronavirus.

Australia’s DFAT travel advisory map has been updated. Every country in the world is labelled “Do Not Travel”, for the first time ever.

Best friends.

• Beijing Tells NYT, WSJ, WaPo Journalists To Hand In Credentials (RT)

China is pulling the press credentials of US journalists from outlets including the New York Times and the Washington Post whose passes expire in 2020, in the latest move of an ongoing tit-for-tat with America over media access. In a statement about China’s “countermeasures against US suppression of Chinese media organizations in the United States,” Beijing announced that American reporters working for the NYT, Wall Street Journal, Voice of America, Time and the Washington Post whose credentials are due to expire by the end of this year must hand them over within 10 days. These reporters will also not be allowed to work in China – including Hong Kong and Macau – in the future, and other US journalists will face new visa restrictions similar to those Washington recently introduced for Chinese reporters.

“In view of the US’ discriminatory restrictions on visas, administrative review, and interviews of Chinese journalists, China will take reciprocal measures against US journalists,” it added. The back-and-forth expulsions of journalists started in February, when Chinese authorities gave three Wall Street Journalists five days to leave the country after Beijing objected to an opinion piece in the outlet calling China the “real sick man of Asia.” The paper refused to apologize for the piece. Shortly afterwards, the US dramatically reduced the number of journalists it would permit to work for four Chinese state-owned media companies inside the US, cutting the number allowed from 160 to 100. They also reduced the length of time those permitted entry could remain in the US. Beijing condemned the move as reflecting a “Cold War mindset” and warned of retaliation.

Clean water in Venice for the first time in forever. The flipside of this: Free parking in Athens to limit use of public transportation.

https://twitter.com/ikaveri/status/1239660248207589383

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Debt Rattle July 10 2019

Jul 102019

July 10, 2019 Posted by Raúl Ilargi Meijer at 9:47 am Finance Tagged with: Antarctica, AOC, Attenborough, Cyprus, Deutsche, drilling, Epstein, Facebook, honeybees, Syria, Trump, Turkey, Twitter, Yemen 11 Responses »

Pablo Picasso Guernica [Study] V 1937

• Jeffrey Epstein Shipped Himself A 53-Pound Shredder (Grim)

• Doubts Over Deutsche Bank Turnaround Plan Dent Shaky Shares (R.)

• Trump’s Twitter Blocking Violates Constitution – Appeals Court (CNN)

• Ocasio-Cortez Sued Over Twitter Blocks (Hill)

• Facebook’s New Policy Says It’s OK to Post Death Threats Against Me (PJW)

• EU Subsidy Loss ‘Could Wipe Out UK Farms’ Like The Coal Industry (BBC)

• UK, France To Send Forces To Syria … But Americans Will Pay (RT)

• U.S Wants Military Coalition To Safeguard Waters Off Iran, Yemen (R.)

• US Urges Turkey To Halt Drilling Operations Off Cyprus Coast (R.)

• EU To Cut Contacts, Aid To Turkey Over Cyprus Drilling Violations (K.)

• Turkey Rejects Greek, EU Claims That Drilling Off Cyprus Illegitimate (R.)

• Holland Covers Hundreds Of Bus Stops With Plants As Gift To Honeybees (Ind.)

• David Attenborough: Polluting Planet May Become As Reviled As Slavery (G.)

• Glacial Melting In Antarctica May Become Irreversible (G.)

The news will be all over Epstein for a long time to come. This overview from Ryan Grim is as good as the next one. We must wait till details start leaking out. Trump Labor Sec. Acosta will be gone, but who else pops up?

• Jeffrey Epstein Shipped Himself A 53-Pound Shredder (Grim)

Jeffrey Epstein shipped a shredder from the U.S. Virgin Islands to his Palm Beach home in July 2008, shortly after reaching a non-prosecution agreement with then-U.S. Attorney Alex Acosta, maritime records show. Then, in March of this year, shortly after a Florida federal judge invalidated that agreement, Epstein shipped a tile and carpet extractor from the Virgin Islands to his Manhattan townhouse, the records show. Epstein, a billionaire financier, was arrested in New Jersey last Saturday on charges of running a sex trafficking ring that involved luring underage girls to his New York and Florida residences, and taking them on global flights on his airplane, dubbed the “Lolita Express.”

Epstein was first accused of abusing underage girls, some of them as young as 14, more than a decade ago, and he evaded prosecution potentially due to his high-profile connections. A key challenge investigators faced when first targeting Epstein in the mid-2000s was an inability to obtain evidence through subpoena. A 2005 search of Epstein’s Palm Beach home came up empty in its quest for computers that investigators suspected contained critical evidence connected to his alleged sexual abuse of young girls. In 2007, a federal grand jury subpoenaed the computers. That August, Acosta, who is now Donald Trump’s labor secretary, entered into plea agreement discussions with Epstein.

Because of those talks, a motion to compel production of Epstein’s computers was delayed, according to the Miami Herald. Epstein held out, however, resisting the deal because it would require him to register as a sex offender. The FBI continued investigating and in March 2008, according to the Miami Herald, preparations were being made to take the case to a new federal grand jury. That would prove unnecessary, as Epstein agreed to a deal with Acosta. Without notifying the 32 identified victims, the federal government reached a non-prosecution agreement with Epstein in exchange for his guilty plea in state court to a minor offense. He pleaded guilty on June 30.

On July 7, 2008, federal prosecutors told Epstein’s attorneys via email that they intended to notify the 32 victims about the agreement. Epstein’s lawyers and the prosecutors debated how much of the agreement to reveal, settling on a less than full accounting. A week later, on July 15, Epstein received a shipment at his Palm Beach home from the port in the U.S. Virgin Islands closest to his home there, according to maritime shipping records compiled by ImportGenius and provided to The Intercept. The shipment was a 53-pound shredder.

For the next decade, Epstein’s legal troubles appeared to be behind him. Then, in November 2018, the Miami Herald published a new investigation into Epstein’s alleged child sex trafficking ring, which prompted federal investigators to take a new look at the case. However, the agreement not to prosecute first had to be invalidated. That came on February 21, when a Florida federal judge ruled that Acosta’s office had violated the Crime Victims’ Rights Act by keeping the women in the dark.

Best-selling author James Patterson on the Jeffrey Epstein case as it relates to President Donald Trump: “There were some complaints about Epstein at Mar-a-Lago. I spoke to the head of the spa there. … She said she went to Trump and he threw [Epstein] out of the club.” pic.twitter.com/kNDK4MdrEd

— Ryan Saavedra (@RealSaavedra) July 9, 2019

They’re on “on a week-long roadshow to explain the restructuring”?! What century is this?

• Doubts Over Deutsche Bank Turnaround Plan Dent Shaky Shares (R.)

Deutsche Bank shares extended losses on Tuesday on investor doubts that its chief executive can revive the lender by shrinking the investment bank and returning to its roots as banker to corporate Germany. Christian Sewing, CEO for just over a year, and his finance chief are on a week-long roadshow to explain the restructuring. To underline his commitment, Sewing plans to invest a quarter of his fixed salary — around 820,000 euros — in Deutsche shares, a person with knowledge of the matter said. Deutsche’s stock price has fallen 10 percent since Sunday’s restructuring announcement to cut 18,000 jobs in a 7.4 billion euro ($8.3 billion) “reinvention”. It is the biggest two-day decline in almost three years.

By 1312 GMT, shares were down 3.8% on the day, after sliding as much as 6.5% earlier. The bank’s bonds also fell. Analysts and investors say Sewing, who joined Deutsche Bank in 1989, is right to cut back its trading desks but question if he can make his plan work when interest rates are still low and U.S. banks have expanded their share of the German market. “There seems to be some concerns around the plan details, particularly the ability for the bank to retain revenues while cutting costs,” one of the bank’s top 25 shareholders told Reuters, citing worries the bank would need fresh equity to execute Sewing’s plan.

But if this applies to Trump, who’s next?

• Trump’s Twitter Blocking Violates Constitution – Appeals Court (CNN)

An appeals court said Tuesday that President Donald Trump violated the First Amendment by blocking users on Twitter. The 2nd US Circuit Court of Appeals upheld a New York judge’s ruling and found that Trump “engaged in unconstitutional viewpoint discrimination by utilizing Twitter’s ‘blocking’ function to limit certain users’ access to his social media account, which is otherwise open to the public at large, because he disagrees with their speech.” “We hold that he engaged in such discrimination,” the ruling adds. The judges on the appeals court concluded that “the First Amendment does not permit a public official who utilizes a social media account for all manner of official purposes to exclude persons from an otherwise-open online dialogue because they expressed views with which the official disagrees.”

The challenge to Trump’s unprecedented use of Twitter in office came from seven individuals he blocked, as well as the Knight First Amendment Institute, which argued that the President’s personal account is an extension of his office. The Justice Department argued in March that the President wasn’t “wielding the power” of the federal government when he blocked certain individuals from his personal Twitter account, @realDonaldTrump, because while the President sends tweets in his official capacity, he blocks users as a personal matter. But the appeals court disagreed with that view.

The goose and the gander.

• Ocasio-Cortez Sued Over Twitter Blocks (Hill)

One former Democratic state lawmaker and one Republican congressional hopeful announced this week that they are suing Rep. Alexandria Ocasio-Cortez (D-N.Y.) over being blocked from her personal Twitter account. Former state assemblyman Dov Hikind (D) and congressional candidate Joseph Saladino, who is running in a Republican primary for the chance to battle Rep. Max Rose (D-N.Y.), announced lawsuits this week against the freshman Democratic congresswoman, seeking injunctive relief in the form of a court order demanding they be unblocked. Saladino announced in a press release that he had filed suit in the Southern District of New York, while Hikind told Fox News that he had filed his claim in the state’s Eastern District.

“I have officially filed my lawsuit against AOC for blocking me on twitter,” Saladino tweeted. “Trump is not allowed to block people, will the standards apply equally? Stay tuned to find out!” “If we can’t talk to one another, the whole system breaks down,” Saladino added in his press release. “Look what is happening in my district when entrenched NeverTrumpers are confronted by America First ideas. Like it or not we live in the same city and we need to be professional.” In an interview with Fox News, Hikind pointed to a recent court ruling declaring that President Trump is not allowed to block critics from his official Twitter account because of his status as a public official as legal precedent for his claim.

“Just today the 2nd Circuit Court of Appeals affirmed a ruling that elected officials cannot block individuals from their Twitter accounts, thereby setting a precedent that Ocasio-Cortez must follow,” Hikind told the network. “Twitter is a public space, and all should have access to the government officials on it.”

Think of Paul Joseph Watson what you like, but this is insane. Time to tackle Zuck.

• Facebook’s New Policy Says It’s OK to Post Death Threats Against Me (PJW)

Facebook has issued a new policy update saying it’s acceptable to post death threats and incite violence against me, despite this being a crime in the United Kingdom. No, I’m not joking. A Community Standards update published by Facebook states (emphasis mine); “Do not post: Threats that could lead to death (and other forms of high-severity violence) of any target(s) where threat is defined as any of the following: “Statements of intent to commit high-severity violence; or Calls for high-severity violence (unless the target is an organization or individual covered in the Dangerous Individuals and Organizations policy)….”

Back in May, Facebook and Instagram banned me under the justification that I was a “dangerous individual”. They provided no evidence whatsoever that I had behaved in a “dangerous” manner or violated any of their policies. Facebook has designated me a “dangerous individual” and now says it’s acceptable for its users to issue death threats against me. This is a crime in the United Kingdom under the 1988 Malicious Communications Act which states, “Any person who sends to another person a letter, electronic communication or article of any description which conveys….a threat….is guilty of an offence.” The largest social media company in the world with over 2 billion users literally says its fine to incite violence against me, despite this being illegal. They are painting a target on my back.

[..] Two months ago, via my lawyers, I filed a Subject Access Request demanding Facebook turn over all information relating to me. Facebook has yet to respond to this request, despite it being a legal requirement to respond within 30 days. If and when Facebook ever responds to this legal demand, the next step will be to begin litigation proceedings. The fact that Facebook has literally said it’s OK to incite violence against me is going to be a very interesting potential addition to those proceedings.

Maybe the coal industry is not the best example in the time of climate crisis.

• EU Subsidy Loss ‘Could Wipe Out UK Farms’ Like The Coal Industry (BBC)

With three months to go before the UK could leave the European Union (EU), farmers say they still face uncertainty about future subsidy levels. Last year farmers received £3.5bn in financial support through the EU’s Common Agricultural Policy (CAP). One farmer from York said he feared farms could soon be “wiped out like the coal industry”. The government said farmers had been told subsidy levels would be maintained until the next general election. But the National Audit Office said farmers had been left unable to plan for the future and the main farming union called for “cast-iron commitments” from the government. CAP funding is one of the EU’s biggest policies with a Europe-wide budget worth more than £50bn a year.

The subsidies are designed to support the farming industry and help farmers and landowners maintain their land. Some farmers have said without long-term guarantees about future subsidy levels, farms could disappear from the landscape. “We could be wiped out like the coal industry,” said Roger Hobson, whose 4,500-acre farm near York qualifies for a subsidy worth £100,000 a year. “This is not just about growing food, these subsidies help us improve the landscape and protect endangered species. “What we fear is that in the future the farm industry will have to go to the government and compete for funding alongside the NHS and other public services. “In that situation the government is always going to pick the NHS over farmers.”

Don’t.

• UK, France To Send Forces To Syria … But Americans Will Pay (RT)

With US President Donald Trump hungry for a withdrawal from Syria, a new report claims Britain and France will send their own forces to pick up the slack, along with other allies. But the swap will cost Washington. Between 1,000 and 2,000 American troops are presently stationed in northeastern Syria, supporting anti-government Kurdish fighters. However, as the US looks to wind down its presence in Syria, the Trump administration has looked to its allies to pick up the slack. Germany rebuffed a request for ground troops on Monday, citing “well known” German policy. Britain and France, on the other hand, are willing to heed Washignton’s call, according to a new report from Foreign Policy.

Both countries have a limited number of special forces on the ground in Syria, and will commit to a troop increase of between 10 and 15 percent to allow the US to withdraw. President Trump is no fan of outsourcing American jobs to foreigners, so why have Britain and France to do America’s dirty work? Well, for one thing, it’ll silence saber-rattlers like John Bolton. Trump announced the US’ complete withdrawal from Syria in December, a country that he said at the time was “sand and death.” The move was seen as a return to the non-interventionist platform he touted during his election campaign, when he mused “why aren’t we letting ISIS go and fight Assad and then we pick up the remnants?”

Yeah, we really need Europeans involved in the Saudi war on Yemen.

• U.S Wants Military Coalition To Safeguard Waters Off Iran, Yemen (R.)

The United States hopes to enlist allies over the next two weeks or so in a military coalition to safeguard strategic waters off Iran and Yemen, where Washington blames Iran and Iran-aligned fighters for attacks, the top U.S. general said on Tuesday. Under the plan, which has only been finalized in recent days, the United States would provide command ships and lead surveillance efforts for the military coalition. Allies would patrol waters near those U.S. command ships and escort commercial vessels with their nation’s flags. Marine General Joseph Dunford, the chairman of the Joint Chiefs of Staff, articulated those details to reporters following meetings on Tuesday about it with acting U.S. Defense Secretary Mark Esper and Secretary of State Mike Pompeo.

“We’re engaging now with a number of countries to see if we can put together a coalition that would ensure freedom of navigation both in the Straits of Hormuz and the Bab al-Mandab,” Dunford said. “And so I think probably over the next couple of weeks we’ll identify which nations have the political will to support that initiative and then we’ll work directly with the militaries to identify the specific capabilities that’ll support that.” Iran has long threatened to close the Strait of Hormuz, through which almost a fifth of the world’s oil passes, if it was unable to export its oil, something U.S. President Donald Trump’s administration has sought as a way to pressure Tehran to renegotiate a deal on its nuclear program.

Or what? Sanctions? Erdogan is a wounded animal, beware.

• US Urges Turkey To Halt Drilling Operations Off Cyprus Coast (R.)

The US State Department on Tuesday urged Turkish authorities to halt energy drilling operations off the Cypriot coast in the Mediterranean, a day after Cyprus protested a Turkish ship dropping anchor there. “This provocative step raises tensions in the region. We urge Turkish authorities to halt these operations and encourage all parties to act with restraint and refrain from actions that increase tensions in the region,” a US State Department spokeswoman said in a statement. Turkey and the internationally recognized government of Cyprus have overlapping claims in that part of the Mediterranean, an area thought to be rich in natural gas.

Cyprus, a member of the European Union, has discovered natural gas in areas off the southern coast of the disputed island, though nothing has been extracted. Turkey contests the rights of Cyprus to explore for gas, sending its own drilling ships to stake claims around the island. Refinitiv Eikon shipping data showed a Turkish ship arrived off the east coast of Cyprus earlier this week. Another Turkish vessel has been spotted off the west of Cyprus since early May. The Cypriot presidency on Monday accused Turkey of a “grave violation,” and an EU statement also rebuked the Turkish action.

“Such action could target companies, individuals, and Turkey’s deep-sea hydrocarbon exploration and production sectors..”

• EU To Cut Contacts, Aid To Turkey Over Cyprus Drilling Violations (K.)

The European Union is considering suspending most high-level contacts with Turkey and cut the flow of funds in protest of the Turkish drilling activities in the Cyprus EEZ, Bloomberg reports. A range of measures will reportedly be discussed by EU ministers on Wednesday in Brussels. One measure could limit the European Investment Bank’s sovereign-backed lending in Turkey and confirm a cut of some 146 million euros ($163 million) in aid for next year. The options proposed by the European Commission also include suspending all ministerial and leaders’ meetings, as well as ongoing talks between the two sides on an aviation agreement.

The European External Action Service would also advise member states to refrain from high-level contacts with Turkey. Bloomberg reports that EU leaders have sided with Cyprus in the dispute, declaring last month that they are ready to consider sanctions if Turkey continues drilling. Such action could target companies, individuals, and Turkey’s deep-sea hydrocarbon exploration and production sectors, though they aren’t currently on the menu of the commission’s proposals. The measures will likely be agreed Wednesday and approved by EU foreign ministers when they meet in Brussels next week.

Turkey claims northern Cyprus is Turkish land.

• Turkey Rejects Greek, EU Claims That Drilling Off Cyprus Illegitimate (R.)

Turkey’s foreign ministry said on Wednesday it rejected statements by Greek and European Union officials that Turkish drilling for gas and oil off Cyprus was illegitimate and said the EU could not be an impartial mediator on the Cyprus problem. The ministry said in a statement that Turkey’s Fatih ship had started drilling activities to the west of the Mediterranean island at the start of May and its Yavuz ship had recently arrived to the east of Cyprus and would conduct drilling activities.

Sometimes it’s the simplest things. But when they start blabbing about “completely clean public transport”, you know they don’t really have a clue. A long struggle lies ahead.

• Holland Covers Hundreds Of Bus Stops With Plants As Gift To Honeybees (Ind.)

The roofs of hundreds of bus stops have been covered in plants as a gift to honeybee, by a city in the Netherlands. Mainly made up of sedum plants, a total of 316 have been covered in greenery in Utrecht. The shelters not only support the city’s biodiversity, such as honey bees and bumblebees, but they also help capture fine dust and store rainwater. The roofs are looked after by workers who drive around in electric vehicles, and the bus stops have all been fitted with energy-efficient LED lights and bamboo benches.

The city aims to introduce 55 new electric buses by the end of the year and have “completely clean public transport” by 2028. The electricity used to power the buses will come directly from Dutch windmills. Utrecht also runs a scheme which allows residents to apply for funding to transform their own roofs into green roofs.

He woke up late, but he did.

• David Attenborough: Polluting Planet May Become As Reviled As Slavery (G.)

The attitude of young people towards tackling the environmental crisis is “a source of great hope”, David Attenborough has told MPs, as he predicted that polluting the planet would soon provoke as much abhorrence as slavery. Giving evidence to the business, energy and industrial strategy committee on how to tackle the climate emergency, the naturalist and TV presenter said radical action was required. Asked by the Tory MP Patrick McLoughlin, a committee member, whether the government’s new commitment of net zero carbon emissions for the UK by 2050 was rapid enough, Attenborough said such targets were not necessarily the best approach. “In a way I would think that is not the way of focusing on the problem,” he said.

“We cannot be radical enough in dealing with the issues that face us at the moment. The question is: what is practically possible? How can we take the electorate with us in dealing with these things?” He said: “The most encouraging thing that I see, of course, is that the electors of tomorrow are already making themselves and their voices very, very clear. And that is a source of great comfort in a way, but also the justification, the reality, that these young people are recognising that their world is the future. “I’m OK, and all of us here are OK, because we don’t face the problems that are coming. But the problems in the next 30 years are really major problems that are going to cause social unrest, and great changes in the way that we live, and what we eat. It’s going to happen.”

Asked by the Labour MP Vernon Coaker to expand on how public attitudes were shifting, Attenborough replied: “There was a time in the 19th century when it was perfectly acceptable for civilised human beings to think that it was morally acceptable to actually own another human being for a slave. And somehow or other, in the space of 20 or 30 years, the public perception of that totally transformed.” He said: “I suspect that we are right now in the beginning of a big change. Young people in particular are the stimulus that’s bringing it about.

Not surte that talking about things that MIGHT happen in 600 years is very useful…

• Glacial Melting In Antarctica May Become Irreversible (G.)

Antarctica faces a tipping point where glacial melting will accelerate and become irreversible even if global heating eases, research suggests. A Nasa-funded study found instability in the Thwaites glacier meant there would probably come a point when it was impossible to stop it flowing into the sea and triggering a 50cm sea level rise. Other Antarctic glaciers were likely to be similarly unstable. Recent research found the rate of ice loss from five Antarctic glaciers had doubled in six years and was five times faster than in the 1990s. Ice loss is spreading from the coast into the continent’s interior, with a reduction of more than 100 metres in thickness at some sites.

The Thwaites glacier, part of the West Antarctic ice sheet, is believed to pose the greatest risk for rapid future sea level rise. Research recently published in the Proceedings of the National Academy of Sciences journal found it was likely to succumb to instability linked to the retreat of its grounding line on the seabed that would lead to it shedding ice faster than previously expected. Alex Robel, an assistant professor at the US Georgia Institute of Technology and the study’s leader, said if instability was triggered, the ice sheet could be lost in the space of 150 years, even if temperatures stopped rising. “It will keep going by itself and that’s the worry,” he said.

Modelling simulations suggested extensive ice loss would start in 600 years but the researchers said it could occur sooner depending on the pace of global heating and nature of the instability. Hélène Seroussi, a jet propulsion laboratory scientist at Nasa, said: “It could happen in the next 200 to 600 years. It depends on the bedrock topography under the ice, and we don’t know it in great detail yet.”

Debt Rattle June 24 2019

Jun 242019

June 24, 2019 Posted by Raúl Ilargi Meijer at 9:22 am Finance Tagged with: antidepressants, Boeing, Caribbean, Chrome, Cyprus, derivatives, Facebook, Google, Greece, Iran, Libra, socialism, Turkey 5 Responses »

Pablo Picasso Sleeping girl 1935

• Free Money Socialism (Henrich)

• Iran Goes For “Maximum Counter-Pressure” (Escobar)

• Facebook’s Libra Cryptocurrency ‘Poses Risks To Global Banking’ -BIS (G.)

• Google’s Chrome Web Browser “Has Become Spy Software” (ZH)

• Austerity, Inequality Fuelling Mental Illness – Top UN Envoy (G.)

• Republicans Don’t Understand Democrats – and Vice Versa (Atl.)

• 400 Pilots Sue Boeing In Class Action Over 737 MAX Cover-Up (ABC.au)

• How Wall Street Colonized the Caribbean (BR)

• Blow To Turkey’s Erdogan As Opposition Wins Big In Istanbul (R.)

• Turkey Warns EU Not To Interfere On Cyprus EEZ Issue (K.)

• Greek Armed Forces On Standby For Turkish Moves In East Med, Aegean (K.)

Very close to what I’ve been saying.

• Free Money Socialism (Henrich)

According to Jay Powell the Fed’s primary mission is now to “sustain the economic expansion.” I’ve never used the term “manipulation” before, but let’s just be clear what “sustain the economic expansion” really means: To prevent natural market forces from taking hold. That’s manipulation. Business cycles are natural. They serve a purpose, they lay the foundation for new growth, they weed out the excess, they permit for a reset of an aging expansion, for a renewed flourishing of innovation, new solutions, creativity, and yes growth. Of course because of all this recessions bring about temporary pain, but nobody wants pain anymore, and hence central bankers with hero magazine covers have now taken on a new role, that of preventing a recession altogether.

No more cleansing, no more resets, but only ever more excess and propagating the notion that they alone can prevent the cleansing process from taking place with their favorite and only method: Free Money. Oh yes, the free money whores are here again. Hurry back into stocks: “Now, interest rates are coming down en masse. Investors who adjusted their portfolios for a high-rate environment must readjust. That means leaning into growth stocks again, scouring Asia for opportunities, and earning income from investments that won’t succumb to the low-rate trend and will also hold up in a shaky economy”. Barron’s calls the Fed flip flop “graceful”. I call it disgraceful.

Just stop. It’s 2019, wealth inequality is higher than ever, corporate debt is higher than ever, and growth is slowing. Innovation is hampered by a system that has benefitted the few which have grown into bloated monopolies, and the entire system itself remains held afloat by massive and ever more expending debt. After all there is zero intellectual integrity to anything that is being propagated. In recent times Fed chairs have bemoaned rising wealth inequality, oh how un-American it all is, and rising corporate debt being a threat to the economy, but then they proceed to again exacerbate both by promising more easy money, their default solution in the misguided attempt to bail investors out from all pain and any bad decisions.

For everyone whining about socialism: It already exists.
It’s called central banking.
Socialism for the top 1%.

— Sven Henrich (@NorthmanTrader) April 21, 2019

“The key in the analysis is what is called notional. They are so far out of the money that they are said to mean nothing. But in a crisis the notional can become real.”

• Iran Goes For “Maximum Counter-Pressure” (Escobar)

The facts are stark. Tehran simply won’t accept all-out economic war lying down – prevented to export the oil that protects its economic survival. The Strait of Hormuz question has been officially addressed. Now it’s time for the derivatives. Presenting detailed derivatives analysis plus military analysis to global media would force the media pack, mostly Western, to go to Warren Buffett to see if it is true. And it is true. Soleimani, according to this scenario, should say as much and recommend that the media go talk to Warren Buffett. The extent of a possible derivatives crisis is an uber-taboo theme for the Washington consensus institutions. According to one of my American banking sources, the most accurate figure – $1.2 quadrillion – comes from a Swiss banker, off the record.

He should know; the Bank of International Settlements (BIS) – the central bank of central banks – is in Basle. The key point is it doesn’t matter how the Strait of Hormuz is blocked. It could be a false flag. Or it could be because the Iranian government feels it’s going to be attacked and then sinks a cargo ship or two. What matters is the final result; any blocking of the energy flow will lead the price of oil to reach $200 a barrel, $500 or even, according to some Goldman Sachs projections, $1,000. Another US banking source explains; “The key in the analysis is what is called notional. They are so far out of the money that they are said to mean nothing.

But in a crisis the notional can become real. For example, if I buy a call for a million barrels of oil at $300 a barrel, my cost will not be very great as it is thought to be inconceivable that the price will go that high. That is notional. But if the Strait is closed, that can become a stupendous figure.” BIS will only commit, officially, to indicate the total notional amount outstanding for contracts in derivatives markers is an estimated $542.4 trillion. But this is just an estimate. The banking source adds, “Even here it is the notional that has meaning. Huge amounts are interest rate derivatives. Most are notional but if oil goes to a thousand dollars a barrel, then this will affect interest rates if 45% of the world’s GDP is oil. This is what is called in business a contingent liability.”

“John Bolton is kind of a bureaucratic tapeworm” that keeps causing pain and suffering, but never suffering himself – ⁦@TuckerCarlson⁩ describes Neocon infestation in Washington. pic.twitter.com/PBlKDhP14U

— Vera Van Horne (@VeraVanHorne) June 23, 2019

“If even modestly successful, Libra would hand over much of the control of monetary policy from central banks to these private companies.”

• Facebook’s Libra Cryptocurrency ‘Poses Risks To Global Banking’ -BIS (G.)

Facebook’s plan to operate its own digital currency poses risks to the international banking system that should trigger a speedy response from global policymakers, according to the organisation that represents the world’s central banks. Although the move of big tech firms such as Facebook, Amazon and Alibaba into financial services could speed up transactions and cut costs, especially in developing world countries, it could also undermine the stability of a banking system that has only just recovered from the crash of 2008. Echoing warnings from many tech experts, the Bank for International Settlements (BIS) said that while there were potential benefits to be made, the adoption of digital currencies outside the current financial system could reduce competition and create data privacy issues.

“The aim should be to respond to big techs’ entry into financial services so as to benefit from the gains while limiting the risks,” said Hyun Song Shin, economic adviser and head of research at BIS. “Public policy needs to build on a more comprehensive approach that draws on financial regulation, competition policy and data privacy regulation.” The warning from the BIS on Sunday comes only days after Facebook announced it would launch its own digital currency, Libra, in 2020. It will allow its billions of users to make financial transactions across the globe in a move that could potentially shake up the world’s banking system.

Chris Hughes, a co-founder of Facebook, last week added his voice to concerns being expressed over big tech’s move into finance, warning that Libra could shift power into the wrong hands. Hughes, who is co-chair of the Economic Security Project, an anti-poverty campaign group, said: “If even modestly successful, Libra would hand over much of the control of monetary policy from central banks to these private companies. If global regulators don’t act now, it could very soon be too late.”

Very easy for a government to counter. Should make one suspicious as to why they don’t.

• Google’s Chrome Web Browser “Has Become Spy Software” (ZH)

Google’s Chrome is essentially spy software according to Washington Post tech columnist Geoffrey Fowler, who spent a week analyzing the popular browser and concluded that it “looks a lot like surveillance software.” Fowler has since switched to Mozilla’s Firefox because of its default privacy settings, and says that it was easier than one might imagine.

“My tests of Chrome vs. Firefox unearthed a personal data caper of absurd proportions. In a week of Web surfing on my desktop, I discovered 11,189 requests for tracker “cookies” that Chrome would have ushered right onto my computer but were automatically blocked by Firefox. These little files are the hooks that data firms, including Google itself, use to follow what websites you visit so they can build profiles of your interests, income and personality. Chrome welcomed trackers even at websites you would think would be private. I watched Aetna and the Federal Student Aid website set cookies for Facebook and Google. They surreptitiously told the data giants every time I pulled up the insurance and loan service’s log-in pages.

And that’s not the half of it.= Look in the upper right corner of your Chrome browser. See a picture or a name in the circle? If so, you’re logged in to the browser, and Google might be tapping into your Web activity to target ads. Don’t recall signing in? I didn’t, either. Chrome recently started doing that automatically when you use Gmail. -Washington Post”

Iceland?!

• Austerity, Inequality Fuelling Mental Illness – Top UN Envoy (G.)

Austerity, inequality and job insecurity are bad for mental health and governments should counteract them if they want to face up to the rising prevalence of mental illness, the UN’s top health envoy has said. In an exclusive interview with the Guardian to coincide with a hard-hitting report to be delivered to the UN in Geneva on Monday, Dr Dainius Puras said measures to address inequality and discrimination would be far more effective in combatting mental illness than the emphasis over the past 30 years on medication and therapy. “This would be the best ‘vaccine’ against mental illness and would be much better than the excessive use of psychotropic medication which is happening,” said Puras, who as the UN’s special rapporteur on health reports back to the UN human rights council in Geneva.

He said that since the 2008 financial crisis, policies that accentuated division, inequality and social isolation have been bad for mental equilibrium. “Austerity measures did not contribute positively to good mental health,” he said. “People feel insecure, they feel anxious, they do not enjoy good emotional wellbeing because of this insecurity situation.” “The best way to invest in the mental health of individuals is to create a supportive environment in all settings, family, the workplace. Then of course [therapeutic] services are needed, but they should not be based on an excessive biomedical model.”

Puras said there had been an overemphasis on trying to cure mental illness like physical illness, through “good medicine”, without thinking about the social factors that cause or contribute to some mental disorders. The prescription of psychotropic drugs to deal with mental illness, particularly antidepressants, has soared across the developed world in the past 20 years.

What do Americans understand these days?

• Republicans Don’t Understand Democrats – and Vice Versa (Atl.)

Unfortunately, the “Perception Gap” study suggests that neither the media nor the universities are likely to remedy Americans’ inability to hear one another: It found that the best educated and most politically interested Americans are more likely to vilify their political adversaries than their less educated, less tuned-in peers. Americans who rarely or never follow the news are surprisingly good at estimating the views of people with whom they disagree. On average, they misjudge the preferences of political adversaries by less than 10 percent. Those who follow the news most of the time, by contrast, are terrible at understanding their adversaries. On average, they believe that the share of their political adversaries who endorse extreme views is about 30 percent higher than it is in reality.

Perhaps because institutions of higher learning tend to be dominated by liberals, Republicans who have gone to college are not more likely to caricature their ideological adversaries than those who dropped out of high school. But among Democrats, education seems to make the problem much worse. Democrats who have a high-school degree suffer from a greater perception gap than those who don’t. Democrats who went to college harbor greater misunderstandings than those who didn’t. And those with a postgrad degree have a way more skewed view of Republicans than anybody else. It is deeply worrying that Americans now have so little understanding of their political adversaries. It is downright disturbing that the very institutions that ought to help us become better informed may actually be deepening our mutual incomprehension.

And that’s just in one airline.

• 400 Pilots Sue Boeing In Class Action Over 737 MAX Cover-Up (ABC.au)

More than 400 pilots have joined a class action against American plane manufacturer Boeing, seeking damages in the millions over what they allege was the company’s “unprecedented cover-up” of the “known design flaws” of the latest edition of its top-selling jet, the 737 MAX. Boeing’s 737 MAX series— first announced in 2011 and put to service in 2017 — is the fourth generation of its 737 aircraft, a widely popular narrow-body aircraft model that has been a mainstay of short-haul aircraft routes across the globe. By March 2019, the entire global fleet was suspended by a US presidential decree, following the second fatal crash involving a 737 MAX that killed 157 people in Ethiopia.

The first crash involving the 737 MAX jet happened off the coast of Indonesia in October 2018, killing 189 people. In the time since the two fatal crashes, some of the families of the 346 people killed have sought compensation, while aircraft carriers — such as Norwegian Air — have sought compensation from the American manufacturer for lost revenue as a result of the plane’s global ban. This latest lawsuit filed against Boeing marks the first class action lodged by pilots qualified to fly the 737 MAX series, who have alleged that Boeing’s decisions have caused them to suffer from monetary loss and mental distress since the jet’s suspension.

The originating plaintiff, known as Pilot X —who has chosen to remain anonymous for “fear of reprisal from Boeing and discrimination from Boeing customers” — lodged the statement of claim on Friday, which seeks damages for them and more than 400 colleagues who work for the same airline. In court documents seen by the ABC, the claim alleges that Boeing “engaged in an unprecedented cover-up of the known design flaws of the MAX, which predictably resulted in the crashes of two MAX aircraft and subsequent grounding of all MAX aircraft worldwide.” They argue that they “suffer and continue to suffer significant lost wages, among other economic and non-economic damages” since the fleet’s global grounding. The class action will be heard in a Chicago court, with a hearing date set for October 21, 2019.

History lesson” “The Caribbean archipelago was ground zero for U.S. imperial banking.”

• How Wall Street Colonized the Caribbean (BR)

Scrubbed from the pages of glossy coffeetable books, the history of U.S. imperialism can be found in the archives of Wall Street’s oldest, largest, and most powerful institutions. A deep dive into the vaults and ledgers of banking houses such as Citigroup, Inc., and J. P. Morgan Chase and Co. reveals a story of capitalism and empire whose narrative is not of morally pure and inspiring economic growth, technological innovation, market expansion, and shareholder accumulation, but rather of blood and labor, stolen sovereignty and pilfered resources, military occupation and monetary control. Sugar comingles with blood, chain gangs cross spur lines, and the magical abstractions of finance are found vulgarized in the base manifestations of racial capitalism.

This history of bankers and empire is also a Caribbean history. The Caribbean archipelago was ground zero for U.S. imperial banking. Wall Street’s first experiments in internationalism occurred in Cuba, Haiti, Panama, Puerto Rico, the Dominican Republic, and Nicaragua, often with disastrous results—for those countries and colonies, and often for the imperial banks themselves. Yet where there was expansion, there was also pushback. The internationalization of Wall Street was met with local resistance, refusal and revolt. And just as the history of imperialism has been excised from popular narratives, so too has this history of Caribbean anti-imperialism and autonomy. The history of imperial banking and racial capitalism begins at the end of the nineteenth century, at the historical horizon where the project of U.S. settler colonialism that spurred the financing of the West became the enterprise of U.S. territorial colonialism in the Caribbean and Asia.

Buoyed by unprecedented wealth and boosted by the expansionist jingoism following the victory over Spain in the Caribbean and the Pacific, New York City’s bankers and merchants believed that the organization of an imperial banking system—one that could compete with Europe’s long-established institutions—was critical to the global rise of the city and to the consolidation of Wall Street’s position in international ﬁnance, trade, and commerce. With these ambitions, bankers and business-people set their sights on asserting control over the trade and ﬁnance of the Americas. They sought to control local central banks, establish U.S. branch banks, take over commodity financing, reorganize monetary systems on a dollar basis, and refinance European-funded sovereign debt.

He’s losing it. Beware. Next move will be to suggest Turkey’s under threat, call for patriotism.

• Blow To Turkey’s Erdogan As Opposition Wins Big In Istanbul (R.)

Turkey’s opposition has dealt President Tayyip Erdogan a stinging blow by winning control of Istanbul in a re-run mayoral election, breaking his aura of invincibility and delivering a message from voters unhappy over his policies. Ekrem Imamoglu of the Republican People’s Party (CHP) secured 54.21% of votes, according to state-owned Anadolu news agency – a far wider victory margin than his narrow win three months ago. The previous result was annulled after protests from Erdogan’s Islamist-rooted AK Party, which said there had been widespread voting irregularities. The decision to re-run the vote was criticized by Western allies and caused uproar among domestic opponents who said Turkey’s democracy was under threat.

On Sunday, tens of thousands of Imamoglu supporters celebrated in the streets of Istanbul after the former businessman triumphed over Erdogan’s handpicked candidate by almost 800,000 votes. “In this city today, you have fixed democracy. Thank you Istanbul,” Imamoglu told supporters who made heart signs with their hands, in an expression of the inclusive election rhetoric that has been the hallmark of his campaigning. “We came to embrace everyone,” Imamoglu said. “We will build democracy in this city, we will build justice. In this beautiful city, I promise, we will build the future.”

The EU has no choice anymore.

• Turkey Warns EU Not To Interfere On Cyprus EEZ Issue (K.)

Turkey has warned the European Union that any intervention on their part on the issue of Cyprus’ Exclusive Economic Zone (EEZ) would negatively affect relations between Greece and Turkey, as well as any prospects for an end to the occupation of the northern part of Cyprus. The warning was made through a non-paper sent to 27 of the EU’s 28 member-states on June 16, Cyprus’ “Fileleftheros” newspaper reports. Turkey didn’t send the note to Cyprus, whose government it does not recognize. The non-paper says the EU would be wise not to act as a judge in the dispute on sea borders and that a similar stance would further discourage efforts to solve the “Cyprus problem” and would cause Greek-Turkish relations to deteriorate.

Turkey claims that the area where one of its drillships has begun exploring for oil and natural gas, soon to be joined by a second, is within Turkey’s continental shelf and that no islands, Cyprus included, can constitute a “full” EEZ. Turkey repeats its views on “equal rights” between Greek- and Turkish-Cypriots, that-is, between the internationally-recognized Republic of Cyprus and the Turkish-occupied north of the island, which Turkey alone has recognized as the “Turkish Republic of Northern Cyprus” and says the best solution is the appointment of a mixed commission with representatives of both sides. Failing that, Turkey says, it is determined to protect the rights of the Turkish-Cypriot resources in the area. The non-paper ends with the hope that, in the decisions to be taken by the EU, “common sense” will prevail.

Greece will not give in.

• Greek Armed Forces On Standby For Turkish Moves In East Med, Aegean (K.)

As Turkey continues with its provocative behavior in the Eastern Mediterranean, despite European Union calls for it to desist from drilling for oil in Cyprus’ exclusive economic zone (EEZ), Greece’s armed forces are on standby to deal with a possible escalation of tensions in the East Med or the Aegean, Kathimerini understands. According to sources, the key question being pondered in Athens is how to react in the event that Turkey decides to conduct seismic research or drilling within Greece’s continental shelf or its EEZ. The biggest concern is about a potential Turkish intervention east of Rhodes and south of Kastellorizo.

On the political level, Athens has done what it can, underlining the potential repercussions of Turkey’s provocative behavior on stability in the broader region. The statement by the EU last week, though vague, was welcomed by Prime Minister Alexis Tsipras as “the first clear and decisive” condemnation of Turkey by the bloc “after decades of violations of international law.” On the operational level, however, it is less clear what Greece’s response should be. The country’s armed forces will be on high alert over the summer as defense officials prepare a series of plans to deal with a possible Turkish intervention. The plans are primarily based on Hellenic Navy maneuvers, as Turkey is currently using research ships and drilling vessels to entrench its presence in the region.

However, the Hellenic Air Force would likely play a supportive role in any response. Asked last week whether Greece can count on military support from the EU or the United States in the event of an incident, Defense Minister Evangelos Apostolakis told reporters that Greece will have to plan to deal with such a scenario independently. “There is no such promise, nor any such issue at the moment, but as I’ve said before, when we need to do something we expect that we will basically be alone.” Athens also holds little faith in promises by French President Emmanuel Macron to send French Navy ships to the Aegean if necessary, as such pledges have been made in the past.

Debt Rattle June 11 2018

Jun 112018

June 11, 2018 Posted by Raúl Ilargi Meijer at 9:47 am Finance Tagged with: apocalypse, austerity, Bilderberg, Cyprus, debt, Erdogan, Italy, migrants, palm oil, Road Less Traveled, Saudi, Trump, truth 6 Responses »

Pierre-Auguste Renoir Les parapluies 1880-86

• Debt Clock Ticking (Mauldin)

• Southern Mayors Defy Italian Coalition To Offer Safe Port To Migrants (G.)

• Italy’s New Finance Minister Rules Out Leaving Euro (Pol.eu)

• In The Western World Truth Is An Endangered Species (PCR)

• Will Bilderberg Still Be Relevant As The Future Of War Is Transformed? (G.)

• Saudi Arabia Suffers Shock Collapse In Inward Investment (F.)

• French Farmers Start Refinery Blockade Over Palm Oil Imports (R.)

• Our Generation Is Presiding Over An Ecological Apocalypse (G.)

• Erdogan Ally Says ‘Cyprus Is Turkish And Will Remain So’ (K.)

• Austria Closing Mosques May Mean ‘War Between Cross & Crescent’ – Erdogan (RT)

• Greece Puts Men Accused Over Turkey Coup Attempt Under Armed Guard (G.)

• New Austerity Bill Hits Greeks With €5.1 Billion More Cuts Until 2022 (KTG)

• Last Exit to the Road Less Traveled (JD Alt)

As the G7 leaders have a few days to lick their wounds, and all attention will continue to be on Trump, I’ll leave all that alone for now. One last thing: hope they understand now that ganging up on Trump is not a good idea. It would be good if the Democrats and media understand that too. They must all reinvent themselves.

Let’s turn to debt: “There is no set of math that works to pay this off.”

• Debt Clock Ticking (Mauldin)

“Modern slaves are not in chains, they are in debt.” – Anonymous. You can find hundreds of quotes on the Internet discussing the problems of debt. Debt traps borrowers, lenders, and innocent bystanders, too. If debt were a drug, we would demand it be outlawed. The advantage of debt is it lets you bring the future into the present, buying things you couldn’t afford if you had to pay full price now. This can be good or bad, depending on what you buy. Going into debt for education that will raise your income, or for factory equipment that will increase your output, can be positive. Debt for a tropical vacation, probably not.

And that’s our core economic problem. The entire world went into debt for the equivalent of tropical vacations and, having now enjoyed them, realizes it must pay the bill. The resources to do so do not yet exist. So, in the time-honored tradition of lenders everywhere, we extend and pretend. But with our ability to pretend almost gone, we’re heading to the Great Reset. I’ve been analogizing our fate to a train wreck you know is coming but are powerless to stop. You look away because watching the disaster hurts, but it happens anyway. That’s where we are, like it or not.

And we don’t even really like to talk about it in polite circles. In a private email conversation this week, which must remain anonymous, this pithy line jumped out at me: “The total of Federal (remember they do not use GAAP) debt, state debt, and city debt [unfunded liabilities included] exceeds $200 trillion dollars. There is no set of math that works to pay this off. Let me be sure it’s heard by repeating it: There is no set of math that works to pay this off. Therefore, there has to be some form of remediation. This conversation is uncomfortable, so it is avoided.”

Hopeful but for now not practical. The solution is in Africa itself. Let Salvini work on that, instead of this sort of stunts.

• Southern Mayors Defy Italian Coalition To Offer Safe Port To Migrants (G.)

Mayors across the south of Italy have pledged to defy a move by the new Italian government – an alliance of the far right and populists – to prevent a rescue boat with 629 people on board from docking in the Sicilian capital. But the mayors’ defiance appears unlikely to serve any practical purpose without the direct support of the Italian coastguard. In the first evidence of the new government’s hardline approach, the interior minister, Matteo Salvini, said on Sunday that all Italian ports were closed to the rescue boat, Aquarius. The Maltese government rejected a request to take the boat, saying international law required that the migrants should be taken to Italian ports.

Salvini, the leader of the League, a far-right party, wrote on Facebook: “Malta takes in nobody. France pushes people back at the border, Spain defends its frontier with weapons. From today, Italy will also start to say no to human trafficking, no to the business of illegal immigration.” Leoluca Orlando, the mayor of Palermo, said he was ready to open the city’s seaport to allow the rescued migrants to safely disembark. “Palermo in ancient Greek meant ‘complete port’. We have always welcomed rescue boats and vessels who saved lives at sea. We will not stop now,” Orlando said. “Salvini is violating the international law. He has once again shown that we are under an extreme far-right government.’’

Other mayors in Italy’s south, including those in Naples, Messina and Reggio Calabria, also said they were ready to disobey Salvini’s order and allow Aquarius to dock and disembark in their seaports. A representative of Doctors Without Borders said the mayors’ remarks were “nice but not practical” because it was standard practice to wait for the Italian coastguard, which is under the control of the Italian government, to allow a ship to dock.

Why the confusion between Finance Minister and Economy Minister?

• Italy’s New Finance Minister Rules Out Leaving Euro (Pol.eu)

Italy’s new economy minister Giovanni Tria ruled out leaving the euro and said he would focus on structural reforms over deficit spending. “The position of the executive is clear and unanimous,” Tria told Italian newspaper Corriere della Sera in his first major interview since the country’s populist government was sworn in at the start of this month. “There isn’t any discussion on a plan to leave the euro,” he said, adding that “the government is determined, in any event, to prevent market conditions which push towards the exit to be materialized.”

Tria’s comments appeared designed to reassure financial markets — and to calm fears in the European Commission and among other EU governments that the new administration would implement anti-euro policies and clash with Brussels. Tria told Corriere that the government’s strategy would be “growth and employment” with a program “based on structural reforms,” and that his country would also “make progress on many aspects of the European governance program and banking union.” Though the new government has not adopted a policy of leaving the euro, some members of the coalition including Matteo Salvini, the new interior minister, have criticized the currency in the past and others have floated the idea of a referendum on Italy quitting the monetary union.

Support for Assange is mounting. But not nearly enough yet. This must grow the same way Free Nelson Mandela did

• In The Western World Truth Is An Endangered Species (PCR)

Nowhere in the Western world is truth respected. Even universities are imposing censorship and speech control. Governments are shutting down, and will eventually criminalize, all explanations that differ from official ones. The Western world no longer has a print and TV media. In its place there is a propaganda ministry for the ruling elite. Whistleblowers are prosecuted and imprisoned despite their protection by federal statue. The US Department of Justice is a Department of Injustice. It has been a long time since any justice flowed from the DOJ. The total corruption of the print and TV media led to the rise of Intermet media such as Wikileaks, led by Julian Assange, a prisoner since 2012.

Assange is an Australian and Ecuadorian citizen. He is not an American citizen. Yet US politicians and media claim that he is guilty of treason because he published official documents leaked to Wikileaks that prove the duplicity and criminality of the US government. It is strickly impossible for a non-citizen to be guilty of treason. It is strickly impossible under the US Constitution for the reporting of facts to be spying. The function of the media is to expose and to hold accountable the government. This function is no longer performed by the Western print and TV media. Washington wants revenge and is determined to get it.

If Assange were as corrupt at the New York Times, Washington Post, CNN, National Public Radio, MSNBC, etc., he would have reported the leaker to Washington, not published the information, and retired as a multi-millionaire with Washington’s thanks. However, unfortunately for Assange, he had integrity. Integrity today in the Western world has no value. You cannot find integrity in the government, in the global corporations, in the universities and schools, and most certainly not in the media.

President #Trump: "Excitement is in the air."pic.twitter.com/dQ6NSgHirR

— Praying Medic (@prayingmedic) June 11, 2018

“What the politicians at Bilderberg ought to realise, when they take a break from brainstorming war to enjoy the buffet, is that they are the buffet.”

• Will Bilderberg Still Be Relevant As The Future Of War Is Transformed? (G.)

This year’s Bilderberg summit is a council of war. On the agenda: Russia and Iran. In the conference room: the secretary general of Nato, the German defence minister, and the director of the French foreign intelligence service, DGSE. They are joined in Turin, Italy, by a slew of academic strategists and military theorists, but for those countries in geopolitical hotspots there is nothing theoretical about these talks. Not when the prime ministers of Estonia and Serbia are discussing Russia, or Turkey’s deputy PM is talking about Iran. The clearest indication that some sort of US-led conflict is on the cards is the presence of the Pentagon’s top war-gamer, James H Baker.

He is an expert in military trends, and no trend is more trendy in the world of battle strategy than artificial intelligence. Bilderberg is devoting a whole session to AI this year – and has invited military theorist Michael C Horowitz, who has written extensively on its likely impact on the future of war. Horowitz sees AI as “the ultimate enabler”. In an article published just a few weeks ago in the Texas National Security Review, he quotes Putin’s remark from 2017: “Artificial intelligence is the future, not only for Russia, but for all humankind. Whoever becomes the leader in this sphere will become the ruler of the world.”

Horowitz says “China, Russia, and others are investing significantly in AI to increase their relative military capabilities”, because it offers “the ability to disrupt US military superiority”. Global military domination is suddenly up for grabs – which brings us to the most intriguing item on this year’s Bilderberg agenda: “US world leadership”. [..] What the politicians at Bilderberg ought to realise, when they take a break from brainstorming war to enjoy the buffet, is that they are the buffet. There’s not much dignity in undermining democracy. But there is a huge pile of money, and for many people that’s enough.

Just as MSB is trying to invest a lot in his ‘new’ Saudi Arabia.

• Saudi Arabia Suffers Shock Collapse In Inward Investment (F.)

Inward investment into Saudi Arabia collapsed last year, according to newly published data from the UN Conference on Trade and Development (UNCTAD), raising serious questions about the prospects for the economic reform agenda being pursued by Crown Prince Mohammed bin Salman (MBS). According to the latest UNCTAD World Investment Report, published on June 7, foreign direct investment (FDI) into Saudi Arabia last year amounted to just $1.4 billion, down from $7.5bn the year before and as much as $12.2bn in 2012. The precipitous fall means the country was outranked by far smaller economies in terms of its ability to attract international investment last year, with the likes of Oman and Jordan overtaking it in 2017, with inward FDI of $1.9bn and $1.7bn respectively.

The situation is equally stark when one looks at the amount of investment coming to Saudi Arabia compared to the rest of the surrounding West Asia region. While the kingdom accounted for around a quarter of total regional FDI between 2012 and 2016, last year it attracted just 5.6% of the regional total. While the Saudi economy has been losing out, others have been gaining a bigger piece of the pie. The UAE has seen its share of regional FDI more than double over the past six years, from 19% in 2012 to 41% in 2017. And even Qatar – which has been the subject of an economic boycott by Bahrain, Egypt, Saudi Arabia and the UAE since June last year – managed to increase its FDI take in 2017, attracting $986m compared to $774m a year earlier.

UNCTAD attributed the fall in investment into Saudi Arabia to significant divestments and negative intra-company loans by foreign multinationals. As an example, it pointed to the UK/Dutch Shell Group which sold its 50% stake in the Sadaf petrochemicals venture to its partner Saudi Basic Industries Corporation (Sabic) for $820m in August. However, the report also notes that FDI to Saudi Arabia has been contracting since the global financial crisis in 2008/09. And although there has been a similar pattern across the region – inflows to West Asia have fallen in most years since hitting a peak of $85bn in 2008 – the performance of Saudi Arabia last year is still appreciably worse than any other economy in the immediate neighbourhood. It is also far worse than the global picture – worldwide FDI inflows were down 23% last year to $1.43 trillion.

Palm oil destroys rainforests and orangutans. And you want to burn it?

• French Farmers Start Refinery Blockade Over Palm Oil Imports (R.)

French farmers began a blockade of oil refineries and fuel depots on Sunday evening over plans by Total to use imported palm oil at a biofuel plant, which have fanned farmer discontent over unfair competition. The Vatry fuel depot in the Marne region of northeastern France was the first to be blocked on Sunday evening as about 100 farmers set up barricades with tractors and mounds of rubble, a spokesman from the FNSEA farmers union told Reuters. At least five sites will be blocked on Sunday evening, with a total of 13 sites blocked from 9 a.m. Monday, Christiane Lambert, president of the FNSEA said in an interview with France Info television.

French oil and gas major Total, which operates five refineries and nine petrol depots in France, said late on Sunday that farmers have gathered at two depots and it had taken measures together with authorities, to limit disruptions. It urged clients not to rush to petrol stations to fill their tanks, which could spark panic buying and shortages. The French authorities last month gave Total permission to use palm oil as one of the feedstocks at its La Mede biofuel refinery in southern France, infuriating farmers who grow local oilseed crops such as rapeseed and environmentalists who blame palm oil cultivation for deforestation in southeast Asia.

[..] Palm oil has been widely criticized in Europe for environmental destruction and some lawmakers are pushing for a ban on its use in biofuel as part of new EU energy targets. The issue has caused friction with Indonesia and Malaysia, the world’s two largest palm oil producers, with Malaysian officials warning of trade repercussions that could affect a potential deal to buy French fighter jets. The refinery protests in France also illustrate a souring relationship between farmers in the EU’s biggest agricultural producer and the government of President Emmanuel Macron. Many farmers welcome the president’s call for fairer farmgate prices as part of a food chain review last year, but they have been angered by Macron’s attempt to phase out common weedkiller glyphosate before other EU countries.

“..among the most nature-depleted countries in the world..”

• Our Generation Is Presiding Over An Ecological Apocalypse (G.)

He’s currently enjoying a great bounty of nature, from tree-climbing slugs to blackbird-gobbling little owls on this year’s Springwatch, but Chris Packham warns that we are presiding over “an ecological apocalypse” and Britain is increasingly “a green and unpleasant land”. The naturalist and broadcaster is urging people to join him next month on a 10-day “bioblitz”, visiting road verges, farmland, parks, allotments and community nature reserves across the country to record what wildlife remains – from butterflies to bryophytes, linnets to lichens. According to Packham, British people have normalised a “national catastrophe” and only see a wealth of wildlife in nature reserves, with the wider countryside bereft of life.

“Nature reserves are becoming natural art installations,” he said. “It’s just like looking at your favourite Constable or Rothko. We go there, muse over it, and feel good because we’ve seen a bittern or some avocets or orchids. But on the journey home there’s nothing – only wood pigeons and non-native pheasants and dead badgers on the side of the road. “It’s catastrophic and that’s what we’ve forgotten – our generation is presiding over an ecological apocalypse and we’ve somehow or other normalised it.” Packham said he looked at the rolling hills beyond this year’s setting for Springwatch on the National Trust’s Sherborne estate in the Cotswolds and despaired. “How many wildflowers can we see? None. Where’s the pink of ragged robin? Where’s the yellow of flag iris? The other colours are not there. It’s not green and pleasant – it’s green and unpleasant.”

Packham’s recent tweets have gone viral after he commented on the absence of insects during a weekend at his home in the middle of the New Forest national park. He did not see a single butterfly in his garden and said he sleeps with his windows open but rarely finds craneflies or moths in his room in the morning whereas they were commonplace when he was a boy. Since Packham first became passionate about birds, in 1970, Britain has lost 90 million wild birds, with turtle doves (down 95% since 1990) hurtling towards extinction. The State of Nature 2016 report described Britain as being “among the most nature-depleted countries in the world”, with scientific data from more than 50 conservation and research organisations revealing that 40% of all species are in moderate or steep decline.

Opposition leader is a government ally.

• Erdogan Ally Says ‘Cyprus Is Turkish And Will Remain So’ (K.)

The leader of Turkey’s nationalist MHP opposition party Devlet Bahceli, an ally of Turkish President Recep Tayyip Erdogan, attacked Greece and Cyprus during an election rally in Izmir on Sunday, claiming “Cyprus is Turkish.” Bahceli was commenting on Greek criticism over an MHP campaign video that depicts the island of Cyprus as Turkish territory. “What else are we to do? Cyprus is Turkish and will remain so,” he was quoted as saying by Turkish conservative newspaper Yeni Safak. He went on to “warn” Greeks not to forget “the days when their grandfathers drowned in the bottom of the sea,” and accused the Greek government of “playing games” in the Aegean.

Ehh.. racist it is not.

• Austria Closing Mosques May Mean ‘War Between Cross & Crescent’ – Erdogan (RT)

Austria’s move to close mosques and expel “foreign-funded” imams has infuriated Turkish President Recep Tayyip Erdogan, warning of a war “between cross and crescent” and threatening that Ankara will not sit idle. “These measures taken by the Austrian prime minister are, I fear, leading the world towards a war between the cross and the crescent,” Erdogan said in a speech in Istanbul on Sunday. Crescent, which can be seen on mosques and other Muslim entities, symbolizes Islamic religion since time immemorial. “They say they’re going to kick our religious men out of Austria. Do you think we will not react if you do such a thing?” he asked, quoted by AFP. “That means we’re going to have to do something,” Erdogan added without elaborating.

Earlier this week, Austrian Interior Minister Herbert Kickl from the right-wing FPO party announced that the country vows to close seven mosques and potentially expel dozens of Turkish-funded imams and their families in Austria’s crackdown on “political Islam.” Austrian officials, including Chancellor Sebastian Kurz, claimed the move was to battle radicalization and growing ‘parallel societies’. However, this explanation did not sit well with Ankara. “Austria’s decision to close seven mosques and expel imams is a reflection of the Islamophobic, racist and discriminatory wave in this country,” Ibrahim Kalin, the spokesman of Tayyip Erdogan, commented on Twitter.

A crazy situation. Turkey can not be allowed to enter Greek territory to abduct or murder anyone.

• Greece Puts Men Accused Over Turkey Coup Attempt Under Armed Guard (G.)

Greece has put in place the “greatest possible” measures to protect eight Turkish commandos accused of being coup plotters after Ankara said it would do everything possible to bring them back. A week after the men were freed from detention, Athens said they were under 24/7 guard at an undisclosed location, for fear of retaliation. The admission came despite mounting tensions with Ankara, which has scrapped a refugee readmission deal with Athens, arguing the soldiers participated in the abortive coup against Recep Tayyip Erdogan in July 2016. Greece’s deputy defence minister, Fotis Kouvelis, told the Guardian: “We are enforcing the greatest possible measures to secure their safety in a place which for obvious reasons will remain unknown.

“We haven’t forgotten what happened in our region a few months ago.” Kouvelis was referring to the enforced removal from Kosovo of six Turkish citizens also denounced as followers of the US-based cleric Fethullah Gülen, who Ankara has blamed for orchestrating the putsch. Tensions over the eight men, who flew into Greece on a Black Hawk helicopter a day after the failed coup, have added to an increasingly fiery campaign ahead of in Turkey on 24 June. Friction with the west has escalated as the race appears to have tightened. At the weekend, Erdogan accused Austria of fomenting a religious war between “cross” and “crescent” after it raised the prospect of expelling Turkish Muslim clerics.

But Greece has been the focus of growing animus in Ankara. Turkey has consistently argued the eight men were involved in the putsch against Erdogan. The Greek supreme court has rejected any notion of sending the men back, saying they would not get a fair trial in Turkey, where a purge of the military and civil establishment continues. In April, the council of state, Greece’s highest administrative court, granted one of the eight commandos permanent asylum, despite objections by Alexis Tsipras’s leftist-led government. Similar judgments are expected to follow when verdicts are issued in the remaining cases.

Pile it on!

• New Austerity Bill Hits Greeks With €5.1 Billion More Cuts Until 2022 (KTG)

Greece submitted a draft bill to parliament late on Friday, a bill fully packed with austerity measures worth 5.1 billion euros and counter-measures worth 1.5 billion, in an effort to sweeten the bitter pill to thousands of pensioners and employees. The bill outlines reforms in the energy, pension and labor sectors as the government races to secure the last loans from its international bailout program, conclude the last program review and head to a so-called “clean exit” in August. The bill includes the country’s medium-term fiscal strategy framework through 2022, which foresees an average 2 percent annual growth and pledges to increase minimum wages and restore collective labor bargaining.

At the same time, the bill includes measures to expedite privatizations in the energy sector, the reduction of state spending on pensions and labor market reforms including arbitration when there is a dispute between employers and staff. • Pension cuts up to 18% to be implemented as of 2019. • Tax-free basis will be broadening to annual income of 5.686 euros, when EU’s poverty line is at 6,000. The measure to go into effect as of 2020. • Privatizations worth 3.9 billion euros
Lawmakers are expected to vote on the bill on upcoming Thursday, before the Eurogroup of June 21.

Athens is keen to pass a final review by its creditors ahead of a Eurogroup meeting on June 21, where it is also hoping for progress on a deal on further debt relief to be implemented after the current bailout program expires in August. If it gets the green light from the review and Eurogroup, it will receive about 12 billion euros ($14 billion) of new loans. [..] revenues will increase through the pension cuts, the changes in real estate objective value that will increase the property taxes, scrapping the decreased of Value Added Tax on all islands, scrapping the 15% discount on social security contributions as of 2019. • Pension cuts worth €2.9 billion annually. €1.2 billion will be cut from public sector pensions and €1.4 billion on private sector pensions. • Broadening the tax-free basis will bring revenues worth €1.9 billion.

h/t Lambert Strether

• Last Exit to the Road Less Traveled (JD Alt)

We now stand where two roads diverge. But unlike the roads in Robert Frost’s familiar poem, they are not equally fair. The road we have long been traveling is deceptively easy, a smooth superhighway on which we progress with great speed, but at its end lies disaster. The other fork of the road—the one less traveled by—offers our last, our only chance to reach a destination that assures the preservation of the earth. –Rachael Carson, Silent Spring What’s important to keep in mind in this quote from Rachael Carson’s 56-year-old warning shot over the bow of corporate civilization is that there are two roads being traveled now. We are no longer at a fork. The fork is half-a-century behind us. The goal is not to get the superhighway to somehow re-route itself and follow the path less traveled. It can’t.

The superhighway will, and must, continue accelerating in its inevitable direction, simply because the greed and power of the people driving that highway will not allow them to alter course. But if there is any truth to Rachael Carson’s warning (and there seems to be growing evidence of it) the other path—the Road Less Traveled—will become the surviving branch of our evolutionary diagram. The present goal, therefore, should be to create as many exits from the superhighway as possible—and to encourage and enable as many people as possible to take those exits to explore and follow the other path. Visualizing how we all got on this superhighway in the first place will be helpful to seeing the exit ramps. To make this visualization, it isn’t necessary to speculate about an ancient, human pre-history.

The process can be clearly seen and understood in a modern anecdote describing how one particular community of people joined the highway. I quote now from the book Fishing Lessons by Kevin M. Bailey*, where he retells author Robert Johannes’ story of fishermen in Palau, an island country in Micronesia. “Seafood was once abundant there. The Palauan fisherman never had trouble finding enough fish to satisfy their own and their village’s needs. The fisherman gave away the fish they didn’t eat to other villagers…. They lived in a state of ‘subsistence affluence.’ “…. After Japan colonized Palau in the 1920s the fishermen began to sell their fish to obtain attractive and exotic goods offered by the Japanese. The fishermen bought nets and motorized boats with the money, allowing them to catch more fish to sell in order to obtain more goods.

They fished harder to harvest more fish and visited more distant areas of the reef to find them. Over the years, the fish abundance dropped. “The fishermen bought even bigger boats to catch the vanishing fish, but to do that they had to borrow money. They had to sell all their fish to pay off their loans. They stopped giving them away in the villages; instead they sold them to the outsiders and to other villagers. Now the people in the village had to work for the money to buy their food…. “Pretty soon, there were not enough fish over the reefs for the fishermen to make payments on their loans, so the village sold their customary access rights to the fishing grounds. The people in the village began to eat imported fish in cans.”

Debt Rattle March 8 2018

Mar 082018

March 8, 2018 Posted by Raúl Ilargi Meijer at 11:01 am Finance Tagged with: Cohn, currency war, Cyprus, exports, Exxon, Fukushima, iPhone, Peak Trade, Putin, Québec, retirement, squid, tariff, Trump 14 Responses »

Paul Gauguin Tahitian village 1892

• We May Have Hit ‘Peak Trade’ Even Without Trump’s Tariffs – UBS (CNBC)

• China’s Exports Surge At The Fastest Pace In 3 Years (R.)

• 42% of Americans Are Set To Retire Broke (CNBC)

• Trump’s Volley (Lebowitz)

• Divorced From Reality (RIA)

• A Currency War Is Coming – With Japan (BBG)

• Hallelujah! The Squid Regency At The White House Is Finally Over (Stockman)

• Canada, Mexico to Get Initial Exemption From Trump Tariffs (BBG)

• New iPhones Aren’t Selling In Asia (CNBC)

• Vancouver Declares 5% Of Homes Empty And Liable For New Tax (G.)

• More People Called David And Steve Lead FTSE 100 Companies Than Women (Ind.)

• ‘Why Would We Want A World Without Russia?’ – Putin (RT)

• Sergei Skripal Is Not Litvinenko (Ind.)

• Turkey Renews Threat Against Cyprus Offshore Gas Exploration (AP)

• US State Department Stresses Cyprus’s Right To Develop Resources In EEZ (K.)

• Tepco’s ‘Ice Wall’ Fails To Freeze Fukushima’s Toxic Water Buildup (R.)

• Over 500 Quebec Doctors Protest Their Own Pay Raises (CNBC)

And not a day too soon. There’s nothing more destructive than schlepping 10 million things 10,000 miles across the planet that don’t neeed to be.

• We May Have Hit ‘Peak Trade’ Even Without Trump’s Tariffs – UBS (CNBC)

The world may have hit ‘peak trade,’ according to an expert who pointed to robotics, digitization and localization as major game-changers for the sprawling supply chains that have defined globalization. Paul Donovan, global chief economist at UBS Wealth Management, said Wednesday that President Donald Trump’s recently announced trade tariffs are not to blame. “I don’t think that the modest taxes imposed by Trump are a driver of peak trade, at this stage. Trade protectionism — mainly non-tariff barriers to trade — have been rising for some years,” he told CNBC. Rather, Donovan said, the peak trade argument is based on “a reversal of the structural way in which globalization took place in recent years.” Globalization as we know it has meant long cross-border supply chains, where many different countries and entities would take part in the production or processing of goods.

The resulting value of trade rose for each country as a proportion of GDP. Trade to GDP, therefore, rose as supply chains lengthened. “What is now happening is that robotics and digitization mean we can produce efficiently, locally,” Donovan said. As an example, he compared the purchase of a compact disc — whose components, intellectual property and packaging would come from different places — a decade ago to downloading music now, which requires only one transaction of intellectual property. This reduces the ratio of trade to GDP. [..] “Robotics, digitization and localization mean that trade wars today are fighting battles from the past,” Donovan said. “I think global trade in goods (not services) revert to something like the old ‘imperial model’ of importing raw materials and then processing close to the consumer.”

Cancer growth.

• China’s Exports Surge At The Fastest Pace In 3 Years (R.)

China’s exports unexpectedly surged at the fastest pace in 3 years in February, suggesting its economic growth remains resilient even as trade relations with the United States rapidly deteriorate. Trade tensions have jumped to the top of the list of risks facing China this year, with proposed U.S. tariffs on steel and aluminium imports suggesting more measures may be on the way, Zhou Hao, senior emerging markets economist at Commerzbank, [said]. China’s February exports rose 44.5% from a year earlier, compared with analysts’ median forecast for a 13.6% increase, and an 11.1% gain in January, official data showed on Thursday. Imports grew 6.3%, the General Administration of Customs said, missing analysts’ forecast for 9.7% growth, and down from a sharper-than-expected 36.9% jump in January.

Analysts caution Chinese data early in the year can be heavily distorted by the timing of the Lunar New Year holiday, which fell in February this year but in January in 2017. But combined January-February trade data also showed a dramatic acceleration in export growth. Exports rose 24.4% on-year in Jan-Feb, much better than 10.8% in December and 4% growth in Jan-Feb last year. The government also releases combined data for the first two months in an attempt to smooth out seasonal distortions. The deceleration in import growth for February may be payback for the previous month’s unusual strength, rather than a sign there has been an abrupt weakening in demand. Robust import growth in January was mostly led by commodities as factories scrambled to restock inventories ahead of the long holiday. Imports in the first two months of the year rose 21.7%, compared with 4.5% in December.

Jesse Colombo’s comment: “And what’s amazing is that these retirement stats are during a massive, Fed-driven asset bubble that has inflated the value of retirement accounts – and people STILL can’t retire! Stick a fork in it…we’re done.”

• 42% of Americans Are Set To Retire Broke (CNBC)

At this rate, retirement is more of a fantasy than a reality for many people in this country. About 42% of Americans have less than $10,000 saved for when they retire, according to a study by GoBankingRates released Tuesday. The No. 1 reason most people cited for not stashing more away was because they didn’t earn enough to save, followed by the fact that they were already struggling to pay bills, GoBankingRates said. The personal finance site polled more than 1,000 adults online in February.

For those with little or no savings, a serious lack of proper investment income and planning, coupled with a longer life expectancy, has destroyed any retirement expectations. Although millennials are most likely to have less than $10,000 saved, older Americans are also becoming steadily more pessimistic about their future economic prospects, according to a separate study by United Income, a start-up that aims to apply big-data analysis to financial planning.

The role of teh reserve currency warrants way more attention.

• Trump’s Volley (Lebowitz)

America relinquished its role as the world’s leading manufacturer in exchange for cheaper imported goods and services from other countries. The profits of U.S.-based manufacturing companies were enhanced with cheaper foreign labor, but the wages of U.S. employees were impaired, and jobs in the manufacturing sector were exported to foreign lands. This had the effect of hollowing out America’s industrial base while at the same time stoking foreign appetite for U.S. debt as they received U.S. dollars and sought to invest them. In return, debt-driven consumption soared in the U.S. The trade deficit, also known as the current account balance, measures the net flow of goods and services in and out of a country. The graph shows the correlation between the cumulative deterioration of the U.S. current account balance and manufacturing jobs.

Since 1983, there have only been two quarters in which the current account balance was positive. During the most recent economic expansion, the current account balance has averaged -$443 billion per year. To further appreciate the ramifications of the reigning economic regime, consider that China gained full acceptance into the World Trade Organization (WTO) in 2001. The trade agreements that accompanied WTO status and allowed China easier access to U.S. markets have resulted in an approximate quintupling of the amount of exports from China to the U.S. Similarly, there has been a concurrent increase in the amount of credit that China has extended the U.S. government through their purchase of U.S. Treasury securities as shown below.

To further understand why the current economic regime is tricky to change, one must consider that the debts of years past have not been paid off. As such the U.S. Treasury regularly issues new debt that is used to pay for older debt that is maturing while at the same time issuing even more debt to fund current period deficits. Therefore, the important topic not being discussed is the United States’ (in)ability to reduce reliance on foreign funding that has proven essential in supporting the accumulated debt of consumption from years past. Trump’s ideas are far more complicated than simply leveling the trade playing field and reviving our industrial base. If the United States decides to equalize terms of trade, then we are redefining long-held agreements introduced and reinforced by previous administrations.

In breaking with that tradition of “we give you dollars, you give us cheap goods (cars, toys, lawnmowers, steel, etc.), we will most certainly also need to source alternative demand for our debt. In reality, new buyers will emerge but that likely implies an unfavorable adjustment to interest rates. The graph below compares the amount of U.S. Treasury debt that is funded abroad and the total amount of publicly traded U.S. debt. Consider further, foreigners have large holdings of U.S. corporate and securitized individual debt as well. (Importantly, also note that in recent years the Fed has bought over $2 trillion of Treasury securities through QE, more than making up for the recent slowdown in foreign buying.)

“Investors still believe in stocks as an asset class.”

• Divorced From Reality (RIA)

There are many ways of assessing the value of the stock market. The Shiller PE (price relative to the past decade’s worth of real, average earnings) and Tobin’s Q (the value of companies’ outstanding stock and debt relative to their replacement cost) are likely the two best. That doesn’t mean those metrics are accurate crash indicators, or that one can use them profitably as trading signals. Expensive stocks can stay expensive or get more expensive, and cheap stocks can stay cheap or get cheaper for inconveniently long periods of time.

But those metrics do have a good record of forecasting future long-term (one decade or more) returns. And that’s important for financial planning and wealth management. Difficult though it is sometimes, everyone must plug in an estimated return into a formula for retirement savings. And if an advisor is plugging in a 7% or so return for a balanced portfolio currently, he or she is likely not doing their job well. Stocks will almost certainly return less than their long-term 10% annualized average for the next decade or two given a starting Shiller PE over 30. The long-term average of the metric, after all, is under 17.

[..] Companies are always manipulating items on income statements to arrive at a particular earnings number. Recently, record numbers of companies have supported net income numbers with non-GAAP metrics. That can be legitimate sometimes. For example, depreciation on real estate is rarely commensurate with reality. But it can also be nefarious[..] So I created a chart showing sales per share growth and price per share growth of the S&P 500 dating back to the end of 2008. From the beginning of 2009 through the end of 2016, companies in the index grew profits per share by nearly 4% annualized, a perfectly respectable number for a mature economy. But price per share grew by a whopping 14.5% over that time. Over that 8 year period, sales grew less than 50% cumulatively, while share prices tripled.

Anyone invested in stocks should worry about this chart. How do share prices get so divorced from underlying corporate sales? One likely answer is low interest rates. But there must be other reasons because we’ve had low interest rates and low stock prices before – namely in the 1940s. That was after the Great Depression, and stocks were still likely viewed as suspect investments. Today, by contrast, stocks are not viewed with much suspicion, despite the technology bubble peaking in 2000 and the housing bubble in 2008. Investors still believe in stocks as an asset class.

Japan cannot do a strong yen for too long.

• A Currency War Is Coming – With Japan (BBG)

As if a brewing trade war wasn’t enough to worry about, investors also need to be alert to the threat of a major currency conflict. Norihiro Takahashi, president of Japan’s Government Pension Investment Fund, dismissed Donald Trump’s tariffs plan as a “performance” for his supporters, and said U.S. assets are no longer expensive, in an interview with The Wall Street Journal this week. That marks a change in stance since the December quarter, when the world’s largest pension fund scaled back its exposure to foreign assets. Takahashi’s comments could well be a veiled expression of Japan’s displeasure at a stronger yen. The Japanese currency has soared 6.6% against the greenback this year — and we’re only three months into 2018. For a yen-based investor, Treasuries, in particular, do indeed look more reasonably priced than in December.

In theory, currency policy falls under the jurisdiction of Japan’s finance ministry. In practice, government agencies from the Bank of Japan to the GPIF co-ordinate their actions. Don’t forget that on Oct. 31, 2014, the central bank expanded its monetary policy on the same day the GPIF adopted a “new policy asset mix” that increased the fund’s exposure to foreign bonds. BOJ Governor Haruhiko Kuroda can deny it, but the central bank has every interest in seeking a weak yen. Japanese corporate earnings are highly cyclical: On a market-weighted basis, companies on the Topix index derive more than 37% of their revenue from abroad, data compiled by Gadfly show. A strengthening yen can cause stocks to plunge, depressing consumption and tipping the economy back into deflation.

With the Topix down more than 10% from its January high, that’s no idle threat. CPI ex-food, the BOJ’s inflation metric, was 0.9% in January, still nowhere near the 2% target that was last breached in 2015. Kuroda’s domestic toolbox, meanwhile, is starting to look empty. With a record 40% of government bonds already in its hands, the central bank is running out of assets to buy.

I was wondering yesterday why not more people were happy about this. Question is: how far do the Squid’s tentacles still reach?

• Hallelujah! The Squid Regency At The White House Is Finally Over (Stockman)

The financial commentariat and the robo-machines are all in a tizzy this morning because Gary Cohn up and quit. But we say good riddance: The man gave Trump bad advice on nearly every single issue – trade, taxes, fiscal policy and the Fed. We didn’t make any bones about that viewpoint during our appearance on Fox Business this AM. When Maria Bartiromo asked us about Cohn’s departure, our reply was: Hallelujah, the Goldman Sachs Regency in the White House is finally over! The fact is, we do have a trade crisis, but Gary Cohn and the Wall Street pseudo-free traders don’t care and never have. That’s because they fiercely support a perverted, self-serving monetary regime that systematically and massively inflates financial assets, even as it strip mines and deflates the main street economy.

As we have been pointing out in this series, there is a perverse symbiosis between the Fed and the Dirty Float central banks of the 10 major countries (China, Vietnam, Mexico, Japan, etc), which account for 90% of the nation’s $810 billion trade deficit (2017). Together they have ripped the guts out of the US industrial economy – effectively sending jobs and production abroad and cash flow and liquidated capital to Wall Street. For its part, the Fed has monkey-hammered US competitiveness. That’s the result of its insensible 2.00% inflation policy, which has fatally inflated nominal dollar wages in a world market drowning in cheap labor priced in artificially under-valued currencies. At the same time, its massive interest rate repression and price-keeping operations in the stock market have turned the C-suites of corporate America into financial engineering joints.

So doing, they have slashed real net business investment by nearly 3o% since the turn of the century, by 20% from the 2007 pre-crisis peak and, actually, to a level in 2016 that barely exceeded real net investment two decades earlier in 1997. Meanwhile, the C-suites shuttled upwards of $15 trillion of cash flow and debt capacity during the last decade alone into stock buybacks, vanity M&A deals and excess dividends and recaps.

Re-negotiate.

• Canada, Mexico to Get Initial Exemption From Trump Tariffs (BBG)

The Trump administration will initially exclude Canada and Mexico from stiff tariffs on steel and aluminum imports, an exemption they would lose if they fail to reach an updated Nafta agreement with the U.S., White House trade adviser Peter Navarro said on Wednesday. The two nations won’t be subject to tariffs on their steel and aluminum if they sign a new NAFTA that meets the satisfaction of the U.S., Navarro said, adding that other American allies could use a similar system to ask for an exemption. If Nafta talks fall through, Canada and Mexico would face the same tariff as other nations, expected to be 25% on steel and 10% on aluminum. “Here’s the situation, and the president has made this public,” Navarro said. “There’s going to be a provision which will exclude Canada and Mexico until the Nafta thing is concluded one way or another.”

The decision-making process regarding the tariffs has evolved and more changes could be made before President Donald Trump formally approves them. China on Thursday vowed to retaliate, its most forceful comments yet on the threatened tariffs. “A trade war is never the right solution,” China’s Foreign Minister Wang Yi told reporters in Beijing. “In a globalized world, it is particularly unhelpful, as it will harm both the initiator and the target countries. In the event of a trade war, China will make a justified and necessary response.” Earlier Wednesday, White House Press Secretary Sarah Huckabee Sanders said the tariff plan would feature “potential carve outs for Canada and Mexico based on national security” considerations and also possible exclusions for specific countries. Australia is among those making the case for exemption, with Foreign Minister Julie Bishop citing her nation’s status as a “close ally and partner” in a Sky News interview on Thursday.

Good headline, followed by shameless promo.

• New iPhones Aren’t Selling In Asia (CNBC)

Apple’s iPhone X may not have wooed Asian consumers during the Lunar New Year holiday — but the company has some new products in the pipeline, according to Rosenblatt Securities’ Jun Zhang. Zhang chopped 5.5 million units off expectations for iPhone X sales for the first half of this year in a Wednesday research note. But with sales of high-end smartphones shrinking, Apple could offset lower iPhone sales with new products. “We are not surprised with the quick cooldown of iPhone X sales following Chinese New Year,” Zhang wrote. “Further iPhone X cuts, in our view, suggest the high-end smartphone market upgrade cycle continues to extend. We are seeing similar issues for Samsung’s S9 model since our research suggests that preorders are weak.”

Apple and Samsung, like many tech companies, and rarely release data on new products or unit sales outside of quarterly reports or launch events. But, Zhang wrote, Apple could sell 6 million to 8 million iPad Pro units with more advanced 3-D sensing, as well as new phones in the fall. A new red iPhone model, lower-end iPhones and a lower-priced HomePod might also be in the works, Zhang said. (Apple has had a partnership with HIV/AIDS organization (RED) for over a decade, and often sells red-colored products to support AIDS research and prevention.) “Since we expect the overall smartphone market to be flat this year, particularly in the mid-to-high end markets, Apple’s upcoming lower priced iPhone model could drive Apple’s unit growth,” Zhang wrote.

Why do I get the idea there’s not an actual plan behind any of this, or a philosophy?

• Vancouver Declares 5% Of Homes Empty And Liable For New Tax (G.)

Thousands of homes in Vancouver have been declared unused and liable for a new empty homes tax as part of a government attempt to tackle skyrocketing home prices and soaring rents. About 4.6% or 8,481 homes in the western Canadian city stood empty or underutilised for more than 180 days in 2017, according to declarations submitted to the municipality by 98.85% of homeowners. Properties deemed empty will be subjected to a tax of 1% of their assessed value. Vancouver has rolled out a raft of measures to cool prices and improve housing affordability in the country’s most expensive real estate market. Empty houses, also a big issue in the UK, are only one aspect of the problem. In 2017 the provincial government of British Columbia raised its foreign buyer tax from 15% to 20% to target offshore investors blamed for pushing up prices.

Toronto, Canada’s biggest city, followed suit with a 15% tax in April. Before the foreign buyer tax, sales agents said investors in Hong Kong, China and other parts of Asia were acquiring up to 40% of Vancouver condominium projects marketed abroad, absorbing the more expensive units that domestic buyers could not afford. Nearly 61% of the homes declared empty in Vancouver were condos, and other multi-family properties made up almost 6%, according to the city government. More than a quarter of the empty properties were in downtown Vancouver. Property owners who did not submit a declaration and those who claimed exemptions, such as for renovations or if the owner was in hospital or long-term care, were included in the empty homes number.

I’m a sucker for headlines. The original says “..women and ethnic minorities..”, but that had me wondering how many immigrants are named David or Steve. More than women, I’d bet.

• More People Called David And Steve Lead FTSE 100 Companies Than Women (Ind.)

There are more people called David or Steve who head up FTSE 100 companies than there are women or ethnic minorities, underscoring the extent to which corporate Britain is still dominated by men. According to research conducted by INvolve, a group that champions diversity and inclusion in business, there are currently five ethnic minority and seven female chief executives of FTSE 100 companies. Nine are named David and four are called Steve. Later this month Royal Mail, which is headed up by Moya Greene, is set to join the index of the UK’s biggest publicly listed companies, taking the total number of female-led firms to eight.

The number highlights how women and ethnic minorities are still dramatically underrepresented on corporate boards across the UK. According to the Government’s Hampton-Alexander Review into female leaders across FTSE companies published last November, only five FTSE 250 companies had at the time achieved a gender-balanced board. Speaking at an event in London to mark International Women’s Day this week, Carolyn Fairbairn, director general of the Confederation of British Industry, said that women are now joining boards in greater numbers than ever, but often as non-executive directors.

He doesn’t give an inch. Why would he?

• ‘Why Would We Want A World Without Russia?’ – Putin (RT)

President Vladimir Putin, who recently startled the world by unveiling Russia’s advanced nuclear arsenal, has again spoken of nuclear arms, clarifying the circumstances in which Moscow is prepared to enter a nuclear war. “Certainly, it would be a global disaster for humanity; a disaster for the entire world,” Putin said, in an interview for a Russian documentary “The World Order 2018,” adding that “as a citizen of Russia and the head of the Russian state I must ask myself: Why would we want a world without Russia?” Even though Putin admitted that any conflict involving the use of nuclear weapons would have dire consequences for humanity, he maintained that Russia would be forced to defend itself using all available means if its very existence is put at stake.

“A decision on the use of nuclear weapons may only be taken if our ballistic missile attack warning system not only detects a launch, but also predicts that the warheads would hit Russian territory. This is called a retaliation strike,” he said in the interview. Russia’s latest edition of its nuclear doctrine allows the use of nuclear weapons in response to a nuclear attack against Russia or its allies, or to a conventional attack that threatens the existence of Russia. Putin also denied Russia was interested in pursuing a nuclear arms race, saying that “to begin with, we did not start this… nuclear bomb was first developed not by us but by the US,” he said in the interview, pointing out that “we have never used nuclear weapons [although] the US used them against Japan.”

A rare dose of reality in a British press -and politics- engaged in full-steam Russia bashing.

• Sergei Skripal Is Not Litvinenko (Ind.)

Boris Johnson just about observed diplomatic protocol when he addressed MPs about the apparent poisoning of Sergei Skripal. He stopped short of accusing the Russian state directly. But his inference – a malevolent and unjustified inference for the Foreign Secretary of a country that harps on about the rule of law – was indeed of Russian guilt. And it was clearest in the parallel he invited MPs to draw with the death of Alexander Litvinenko. Now it may indeed be that Russia – or Russians (something rather different) – are responsible for whatever happened in Salisbury. And it is true that Russians in the UK seem disproportionately accident-prone. But it is premature in the extreme to blame the Russian state, and just as misleading to draw this particular parallel with the Litvinenko case.

Both men may have been Russians branded traitors by their homeland, and both may have been victims of poisoning, but there are important differences. In Russia, Litvinenko worked against organised crime; he was less a spy in the conventional sense than a criminal intelligence officer. He fled the country after blowing the whistle on his corrupt bosses, and applied for asylum in the UK. His first choice, the US, had turned him down on the apparent grounds that the information he had to offer was not valuable enough. Unlike Skripal, he started working for MI5/6 only after arriving in the UK, and even then seems to have had difficulty getting on the payroll. His widow, Marina, is still battling to get the intelligence agencies to pay a pension or recognise a duty of care. It is cruel to say so, but Litvinenko seems almost to have been more use to the UK in death – as a totem of Russia’s general badness – than he was in life.

[..] For the moment, though, I will resist the temptation to delve into my inner Le Carre and return to Litvinenko. As I said, there are crucial differences between the two – differences that should militate against state-sponsored assassination being the favoured explanation for Skripal’s plight. But there should be doubts, too, about this judgment in the case of Litvinenko. The conclusions of the Litvinenko inquiry, now treated as unimpeachable proof of Russian state culpability, are nowhere near as definitive – or credible – as they have since been presented. The much-trumpeted (and over-interpreted) conclusion of the judge, Sir Robert Owen, was that “the FSB operation to kill Litvinenko was probably approved by Mr Patrushev [then head of the FSB] and also by President Putin”. He said there was “a strong probability” that Andrei Lugovoy poisoned Litvinenko “under the direction of the FSB” and the use of polonium-210 was “at very least a strong indicator of state involvement”. What sort of proof is that?

They better be careful….

• Turkey Renews Threat Against Cyprus Offshore Gas Exploration (AP)

Turkey’s prime minister has renewed a threat against efforts to search for offshore gas around Cyprus. Turkey opposes what it says are “unilateral” efforts to search for gas, saying they infringe the rights of Turkish Cypriots to the ethnically split island’s resources. Binali Yildirim said Wednesday during a joint news conference with Tufan Erhurman, the so-called “prime minister” of the breakaway north of Cyprus, that “provocative activities will be met with the appropriate response.” Yildirim’s comments were in response to reports that an ExxonMobil vessel was heading toward the Mediterranean, coinciding with exercises in the area involving the US Navy. Last month, Turkish warships prevented a rig from reaching an area southeast of Cyprus where Italian company Eni was scheduled to drill for gas.

….because the US must defend Exxon.

• US State Department Stresses Cyprus’s Right To Develop Resources In EEZ (K.)

The United States recognizes the right of Cyprus to develop the resources in its Exclusive Economic Zone, and discourages any actions or statements that provoke a rise in tensions in the region, a State Department official has said. In a statement late on Wednesday, the official said that Washington’s policy on Cyprus’ EEZ was longstanding and has not changed, noting that the US “recognizes the right of the Republic of Cyprus to develop its resources in its Exclusive Economic Zone.” “We continue to believe the island’s oil and gas resources, like all of its resources, should be equitably shared between both communities in the context of an overall settlement,” the official said. “We discourage any actions or rhetoric that increase tensions in the region.” The official did not comment directly on threats from Ankara regarding the arrival in the region of a research vessel belonging to US company ExxonMobil.

How is it possible that TEPCO is allowed to just keep on lying?

• Tepco’s ‘Ice Wall’ Fails To Freeze Fukushima’s Toxic Water Buildup (R.)

A costly “ice wall” is failing to keep groundwater from seeping into the stricken Fukushima Dai-ichi nuclear plant, data from operator Tokyo Electric Power Co shows, preventing it from removing radioactive melted fuel at the site seven years after the disaster. When the ice wall was announced in 2013, Tepco assured skeptics that it would limit the flow of groundwater into the plant’s basements, where it mixes with highly radioactive debris from the site’s reactors, to “nearly nothing.” However, since the ice wall became fully operational at the end of August, an average of 141 metric tonnes a day of water has seeped into the reactor and turbine areas, more than the average of 132 metric tonnes a day during the prior nine months, a Reuters analysis of the Tepco data showed.

The groundwater seepage has delayed Tepco’s clean-up at the site and may undermine the entire decommissioning process for the plant, which was battered by a tsunami seven years ago this Sunday. Waves knocked out power and triggered meltdowns at three of the site’s six reactors that spewed radiation, forcing 160,000 residents to flee, many of whom have not returned to this once-fertile coast. Though called an ice wall, Tepco has attempted to create something more like a frozen soil barrier. Using 34.5 billion yen ($324 million) in public funds, Tepco sunk about 1,500 tubes filled with brine to a depth of 30 meters (100 feet) in a 1.5-kilometre (1-mile) perimeter around four of the plant’s reactors. It then cools the brine to minus 30 degrees Celsius (minus 22 Fahrenheit).

The aim is to freeze the soil into a solid mass that blocks groundwater flowing from the hills west of the plant to the coast. However, the continuing seepage has created vast amounts of toxic water that Tepco must pump out, decontaminate and store in tanks at Fukushima that now number 1,000, holding 1 million tonnes. It says it will run out of space by early 2021. “I believe the ice wall was ‘oversold’ in that it would solve all the release and storage concerns,” said Dale Klein, the former chairman of the U.S. Nuclear Regulatory Commission and the head of an external committee advising Tepco on safety issues.

The people that see the threats to the entire system are not politicians.

• Over 500 Quebec Doctors Protest Their Own Pay Raises (CNBC)

In Canada, more than 500 doctors and residents, as well as over 150 medical students, have signed a public letter protesting their own pay raises. “We, Quebec doctors who believe in a strong public system, oppose the recent salary increases negotiated by our medical federations,” the letter says. The group say they are offended that they would receive raises when nurses and patients are struggling. “These increases are all the more shocking because our nurses, clerks and other professionals face very difficult working conditions, while our patients live with the lack of access to required services because of the drastic cuts in recent years and the centralization of power in the Ministry of Health,” reads the letter, which was published February 25.

“The only thing that seems to be immune to the cuts is our remuneration,” the letter says. Canada has a public health system which provides “universal coverage for medically necessary health care services provided on the basis of need, rather than the ability to pay,” the government’s website says. The 213 general practitioners, 184 specialists, 149 resident medical doctors and 162 medical students want the money used for their raises to be returned to the system instead. “We believe that there is a way to redistribute the resources of the Quebec health system to promote the health of the population and meet the needs of patients without pushing workers to the end,” the letter says.

“We, Quebec doctors, are asking that the salary increases granted to physicians be canceled and that the resources of the system be better distributed for the good of the health care workers and to provide health services worthy to the people of Quebec.” A physician in Canada is paid $260,924 ($339,000 Canadian) for clinical services by the government’s Ministry of Health per year on average, according to a report from the Canadian Institute for Health Information published in September 2017. On average, a family physician is paid $211,717 ($275,000 Canadian) for clinical services and a surgical specialist is paid $354,915 ($461,000 Canadian), according to the same report.

Debt Rattle February 24 2018

Feb 242018

February 24, 2018 Posted by Raúl Ilargi Meijer at 11:21 am Finance Tagged with: Assange, Brexit, Cyprus, Fed, London, May, Powell, QE, Turkey, VIX, Xi 5 Responses »

Arthur Rothstein Rear of interstate truck. Elko, Nevada 1940

• Debt On Track To Destroy The American Middle Class (GoldT)

• The Only Thing That Can Save Stocks Is QE (ZH)

• Fed ‘Quite Likely’ To Require Large-Scale QE Again (ZH)

• VIX Funds Face Fresh Scrutiny From US Regulators (BBG)

• Xi Confidant Emerges As Front Runner To Head China’s Central Bank (R.)

• Brexit To End London House Price Boom (Ind.)

• UK Post-Brexit Plans Based On A “Pure Illusion”- EU (G.)

• Ecuador Blames UK As Assange Talks Break Down (G.)

• Europe to Wind Down Latvian Bank Targeted by U.S. Over Sanctions (BBG)

• After New Incident Off Cyprus, EU Calls On Turkey To Stop Naval Aggression (K.)

Going down down down.

• Debt On Track To Destroy The American Middle Class (GoldT)

Economists report the household debt to be at its highest in decades. Yet, at the same time, we are being told that the economy is doing great. Does anyone see a serious contradiction? In fact, the current economy only favors the wealthy owing to their flourishing financial assets such as stocks and bonds. Owing to the lack of real assets such as property and commodities, the middle and lower classes are becoming overwhelmed due to the serious consequences of the spending/debt cycle. American consumers have a collective outstanding household debt of about $13.15 trillion of which nearly $1 trillion is the credit card debt alone, households are truly on a debt binge. These figures should be a wake-up call to all the Americans. The convulsive household debt has surpassed the bubble of 2008 and is still escalating. The economy may not be doing so great, after all.

Compared to 2008, the automobile credit balances have increased to $367 billion whereas the outstanding student loans are around $671 billion. Moreover, 67% of household debts belong to consumer mortgages. In 2016, 25% of all the Americans purchased a new or used vehicle and two-thirds of them are repaying through high-interest, long-term loans. In fact, the consumer debt has exceeded their income for majority of the Americans. Consumers have become accustomed using easy credit to maintain a lifestyle unaffordable for them otherwise. If this trend continues, and facts indicate that it will, we will be facing a monumental credit crisis in the near future. A huge portion of credit card debt is the interest. Credit cards are a convenience and consumers readily pay for the privilege.

[..] The decline in automobile sales is already an indication of the future consumer debt crisis. If lenders continue to provide easy access to credit regardless of its looming default and delinquent potential, retail purchase will face a sharp decline in 2018. This will have serious consequences on the overall economy. The Federal Reserve and other global lenders are a significant contribution to the problem. They allow printing of trillions of dollars and yens for the lenders to distribute to the borrowing consumers at a high interest, leading to a worldwide inflation. All this printed wealth is merely an illusion yet it is raising the cost of living. Prices are rising at an alamingly faster rate compared to the consumer income. There is no increase in real assets. All this is but a mere mushrooming of debt.

The consequences of federal policy will be inescapable unless reversed and there are no signs of any reversal in near or distant future. At this rate, the consumers will soon face a critical financial bubble. Financial assets, such as stocks and bonds, risk losing substantial value. The wealthy can absorb the losses but the poor and middle class will face financial ruin. Consumers need to seriously consider the need to increase their “real” assets, such as real estate and commodities to prevent a long-term financial nightmare. The chart below shows how the real assets have curved to an all-time low.

Gee, what a surprise.

• The Only Thing That Can Save Stocks Is QE (ZH)

In the last 45 years, there have been seven periods of persistent US dollar and Treasury bond weakness and as BofAML notes, during six of those periods, stocks have been pressured significantly lower.

This could be a problem, as it’s happening again… and stocks are beginning to wake up to it…

There has only been one period in history when falling dollar and bond prices did not lead to slumping stocks…And that was when QE was expanded drastically in March 2009.

Tightening and then not.

• Fed ‘Quite Likely’ To Require Large-Scale QE Again (ZH)

Ahead of Fed Chair Powell’s first semi-annual monetary policy report to Congress next week (brought forward to 2/27), The Fed has released his prepared remarks warning that “valuations are still elevated across a range of asset classes” and fears “signs of rising non-financial leverage.” To wit: Looking at the key topic of inflation, and the labor market, the Fed found that U.S. labor market is “near or a little beyond” full employment in early 2018, and that while the pace of wage growth has been modest, “serious labor shortages” would probably give it an upward push. Ironically, and paradoxically for an “economy beyond full employment”, the Fed observes that “the pace of wage gains has been moderate; while wage gains have likely been held down by the sluggish pace of productivity growth in recent years.”

Regardless, the Fed clearly is concerned about labor supply-demand imbalances, and has even added a new word: serious, as in “serious labor shortages would probably bring about larger increases than have been observed thus far.” In a separate special section on financial stability, the Fed notes that overall vulnerabilities in the U.S. financial system remain moderate, while noting some spots where things are warming up. These include signs of increased leverage to the nonbank sector, noting greater provision of margin credit to equity investors such as hedge funds. Looking at financial imbalances, the Fed warns that “leverage in the nonfinancial business sector has remained high, and net issuance of risky debt has climbed in recent months. In contrast, leverage in the household sector has remained at a relatively low level, and household debt in recent years has expanded only about in line with nominal income.”

[..] Curiously, before Powell’s remarks were dropped, both Dudley and Rosengren were on the tape this morning talking super dovish about QE as “useful to have in the toolkit for those times when the short-term interest rate tool may not be available,” adding that The Fed is “quite likely” to require large-scale asset purchases again because real rates will remain low due to slow productivity and labor-force growth.

Horse has left that barn ages ago.

• VIX Funds Face Fresh Scrutiny From US Regulators (BBG)

U.S. regulators are scrutinizing this month’s implosion of investments that track stock-market turmoil, including whether wrongdoing contributed to steep losses for VIX exchange-traded products offered by Credit Suisse and other firms, several people familiar with the matter said. The Securities and Exchange Commission and the Commodity Futures Trading Commission have been conducting a broad review of trading since Feb. 5, when volatility spiked and investors lost billions of dollars, the people said. Among those looking into what happened are lawyers in the SEC’s enforcement division, which investigates firms for potential misconduct and fines them if it finds violations of securities laws, two of the people said. There is no indication thus far that specific companies, including Credit Suisse, are being probed.

The scrutiny puts a spotlight on a small corner of the $3.4 trillion exchange-traded fund industry that lets everyone from hedge funds to mom-and-pop investors engage in complex trading strategies. With losses now piling up, allegations of market manipulation are getting more attention and government watchdogs face questions about why small-time investors were permitted to buy such products in the first place. “The values of these exchange-traded products are based on a combination of futures, options and three indices. Quite the maze,” Democratic SEC Commissioner Kara Stein said Friday in a speech at a conference in Washington. “What troubles me is that oftentimes complex products fall into the hands of people who don’t fully understand them.”

SEC Chairman Jay Clayton told reporters at the same event Friday that he wasn’t concerned about how the market functioned during the steep decline in equities on Feb. 5 and in the two weeks since. He said it would be appropriate, however, to review which types of more complex investments are widely available to average investors. “The portfolio of products available to retail investors has changed dramatically and it’s worth taking a look at,” Clayton said.

Tough job. Xi sets rates all by himself.

• Xi Confidant Emerges As Front Runner To Head China’s Central Bank (R.)

Liu He, a Harvard-trained economist who is a trusted confidant of Chinese President Xi Jinping, has emerged as the front runner to be the next governor of the People’s Bank of China (PBOC), according to three sources with knowledge of the situation. Liu may be in a position to become one of China’s most powerful economic and financial officials ever, as he is already top adviser to Xi on economic policy and is also expected to become vice premier overseeing the economy. Liu would replace current PBOC chief, 70-year-old Zhou Xiaochuan, who is China’s longest-running head of the central bank, having taken the job in 2002. Zhou is expected to retire around the time of the annual session of parliament in March, sources previously told Reuters.

The change would be part of a wider government reshuffle following the 19th Communist Party Congress in October last year, during which Xi laid out his vision for China’s long-term development, and elevated his key allies. Speculation has been rife for months over the choice of the next central bank governor. Xi will have the final say, and the sources noted that while Liu is clearly the frontrunner he is not yet certain to get the job. Just before last October’s Congress, sources told Reuters that China’s banking regulator head Guo Shuqing and veteran banker Jiang Chaoliang were leading contenders for the PBOC job. But at the congress, the influence of the 66-year-old Liu continued to grow. He was elected into the 25-member Politburo, the second-highest tier in Beijing’s political power structure after the seven-member Politburo Standing Committee.

Sources previously told Reuters that Liu, a fluent English speaker, is set to become one of China’s four vice premiers and would oversee the economy and financial sector. Two of the sources said that Liu could serve concurrently as vice premier and head of the central bank.

Brexit is not all bad.

• Brexit To End London House Price Boom (Ind.)

UK inflation will outstrip gains in house prices this year and next, particularly in the capital, as uncertainty over Brexit and weak consumer spending power hits demand, a Reuters poll found on Friday. According to the latest quarterly Reuters poll of 33 housing market specialists, taken in the past week, property prices will rise 2.0% this year, much slower than the predicted 2.5% rise in general costs in the economy. In London – long the hotbed for foreign investors behind a decade of skyrocketing prices – the difference will be even starker: the average price is expected to fall 0.5% this year. Next year, house prices will rise 0.9% in London and 2.0 nationally, still both below the 2.1% expected inflation rate. In 2020, London prices will increase 2.0% and by 2.3% nationally. “A significant effect of Brexit is subdued investment confidence,” said Rod Lockhart at online mortgage lender LendInvest.

“Would-be sellers are holding onto assets for longer and buyers are being a little more diligent before committing to significant expenditures, all this against a backdrop of inflation-surpassing wage growth.” Most respondents in the poll said the Brexit vote had been negative for both turnover and prices in London but were split over whether it had been negative or had no impact nationally. Sterling is over 6% weaker than before the June 2016 vote to leave the EU, something that should make properties more attractive to foreign investors, who can take advantage of cheaper prices. But uncertainty over how Brexit divorce talks will pan out has deterred overseas buyers. “Foreigners get more pounds in their pockets, but the nation and its capital has lost some of its allure,” said Tony Williams at property consultancy Building Value.

May the masochist.

• UK Post-Brexit Plans Based On A “Pure Illusion”- EU (G.)

Theresa May’s reported agreement with her cabinet on a future trading relationship with the EU has been criticised as based on “pure illusion” by the European council president, Donald Tusk, as frustration with the UK erupted in Brussels. Reports that May’s inner cabinet had agreed on a policy of “managed divergence” during eight hours of talks at an awayday in Chequers were met with incredulity by EU leaders. Tusk told reporters on Friday: “I am glad the UK government seems to be moving towards a more detailed position. “However, if the media reports are correct, I am afraid the UK position today is based on pure illusion. It looks like the cake [and eat it] philosophy is still alive. “From the very start it has been a set principle of the EU27 that there cannot be any cherrypicking of single market à la carte. This will continue to be a key principle, I have no doubt.”

Speaking at a summit of EU27 member states in Brussels, to discuss the EU’s budget and leadership post-Brexit, Leo Varadkar, the Irish taoiseach, also insisted that the single market was “not à la carte”. It is believed the British government is seeking to maintain frictionless trade in some sectors by staying in lock-step alignment with EU regulation, while opening up the prospect of diverging in other areas in order to gain a competitive advantage in the international marketplace. “It is not possible for UK to be aligned to EU when it suits and not when it doesn’t,” Varadkar said. “The UK position needs to be backed up with real detail that can be written into a legal treaty with the EU. We are well beyond the point of aspirations and principle. We need detail.”

Britain should be taken to The Hague for its involvement.

• Ecuador Blames UK As Assange Talks Break Down (G.)

Talks between the UK and Ecuador over the future of Julian Assange at its London embassy have broken down, the South American country’s foreign minister has said. Maria Fernanda Espinosa suggested British officials had been unwilling to negotiate over the Wikileaks founder’s potential release. Earlier this month, a judge upheld an arrest warrant issued when Assange skipped bail as he fought extradition to Sweden in 2012. The 46-year-old has been at the embassy ever since because he fears extradition to the United States for questioning over the activities of WikiLeaks if he leaves. Espinosa said of the failed talks: “To mediate you need two parties, Ecuador is willing, but not necessarily the other party.”

Ecuador said it would continue to protect Assange’s rights, however there was a risk to his physical and psychological wellbeing after spending nearly six years in the building as a “refugee”. The country has assessed more than 30 similar cases in a bid to break the deadlock, including that of British-Iranian citizen Nazanin Zaghari-Ratcliffe, who is in prison in Iran accused of spying. This included options for granting diplomatic immunity, although Ecuador said it would continue to respect the UK’s laws. In November, Espinosa said Assange had been granted Ecuadorian citizenship. The foreign minister said Ecuador was trying to make Assange a member of its diplomatic team, which would grant him additional rights under the Vienna Convention on Diplomatic Relations – including special legal immunity and safe passage.

All because of North Korea?!

• Europe to Wind Down Latvian Bank Targeted by U.S. Over Sanctions (BBG)

European authorities moved to liquidate Latvia’s ABLV Bank after clients pulled assets from the lender following U.S. accusations that it laundered money. The ECB, which had already placed a freeze on payments by the lender, said that ABLV was failing or likely to fail, handing it over to Europe’s Single Resolution Board. That authority said a resolution of the bank, which generally means a sale or restructuring, isn’t in the public interest because neither ABLV nor its Luxembourg-based subsidiary provide “critical functions” and their failure won’t have a “significant adverse impact” on financial stability. ABLV was plunged into crisis after the U.S. Treasury this month proposed to ban it from the American financial system, saying it helped process illicit transactions, including for entities with alleged ties to North Korea’s ballistic missile program.

The bank responded by saying the allegations are wrong and misleading and that it was working to provide information to the Treasury that would help to overturn the proposal. “The bank is likely unable to pay its debts or other liabilities as they fall due,” the ECB said in a statement on Saturday in Frankfurt. “The bank did not have sufficient funds which are immediately available to withstand stressed outflows of deposits before the payout procedure of the Latvian deposit-guarantee fund starts.” ABLV took a different view, saying it accumulated more than €1.36 billion over four business days to strengthen its liquidity and ensure 86% of its demand deposits. “The bank considers that it has fulfilled all requirements of the regulator in order to resume operation,” ABLV said. “It was absolutely sufficient for the bank to resume executing payments and meet all obligations toward its clients, yet due to political considerations the bank was not given a chance to do it.”

Turkey threatens to fire on an Italian ship.

• After New Incident Off Cyprus, EU Calls On Turkey To Stop Naval Aggression (K.)

Just a day after it said it won’t allow Cyprus to conduct a “unilateral” gas search off the Eastern Mediterranean island’s coast if Turkish Cypriots don’t also reap the benefits, Ankara ratcheted up tensions with Nicosia Friday when its warships threatened to use force against a drillship contracted to Italian energy giant Eni as it tried, again, to reach an area in Cyprus’s exclusive economic zone (EEZ) to commence exploratory gas drilling. Turkey has been obstructing the Saipem 12000 drillship from approaching an area in Block 3 of Cyprus’s EEZ since February 9, citing naval exercises. This week it announced it is reserving the area until March 10. Earlier in the month a Turkish gunboat rammed a Hellenic Coast Guard vessel near the eastern Aegean islet of Imia. Turkey’s aggression was raised by Greek Premier Alexis Tsipras and Cypriot President Nicos Anastasiades at the informal summit of EU leaders in Brussels Friday.

European Council President Donald Tusk told reporters after the meeting that the bloc was calling on Turkey to stop activities that have led to recent incidents in Greece and Cyprus, stressing that both countries have the “sovereign right” to explore for resources. He also said the EU will assess during March’s European Council meeting whether the conditions are ripe for a high-level meeting with Turkey in Varna on March 26. The drillship left the area after the incident and headed west for the city of Limassol, where it is expected to remain for a few days before sailing to Morocco. “Unfortunately, the drillship was halted by five Turkish warships and after threats of violence and the threat of a collision, it was compelled to return back,” said Cypriot government spokesman Victoras Papadopoulos, who stressed, however, that the postponement of the scheduled drilling does not mean that the island’s energy plans will change.

Debt Rattle July 7 2017

Jul 072017

July 7, 2017 Posted by Raúl Ilargi Meijer at 8:08 am Finance Tagged with: apocalypse, bonds, central banks, Cyprus, Dalio, delusion, G20, Putin, Qatar, Trump 2 Responses »

Francis Bacon Triptych 1976

• All Eyes On Trump-Putin Dynamics As They Meet For First Time At G20 (R.)

• Deep State Begins Anti-Russia Media Blitz Ahead Of Trump-Putin Meeting

• Anti-G20 Protesters Clash With Hamburg Police ‘Like Never Before’ (RT)

• The Party Is Over: Central Banks Pull The Plug On Bond Market Rally (CNBC)

• Central Bank Easy Money ‘Era Is Ending’ – Ray Dalio (CNBC)

• Ray Dalio’s ‘Beautiful’ Deleveraging Delusion (ZH)

• ‘It’s Too Late’: 7 Signs Australia Can’t Avoid Economic Apocalypse (News)

• World-Beating Wealth Props Up Qatar Against Arab Sanctions (R.)

• Home Sales In Greater Toronto Area Plunged 37.3% Last Month (CP)

• The Fast Track to “Carmageddon” (David Stockman)

• Clinton, The IMF And Wall Street Journal Toppled Suharto (Hanke)

• Our Political Parties Are Obsolete (CH Smith)

• Cyprus Reunification Talks Collapse (R.)

If only they could have a decent conversation.

• All Eyes On Trump-Putin Dynamics As They Meet For First Time At G20 (R.)

U.S. President Donald Trump and Russian President Vladimir Putin are set to size each other up in person for the first time on Friday in what promises to be the most highly anticipated meeting on the sidelines of the G20 summit. Trump has said he wants to find ways to work with Putin, a goal made more difficult by sharp differences over Russia’s actions in Syria and Ukraine, and allegations Moscow meddled in the 2016 U.S. presidential election. That means every facial expression and physical gesture will be analyzed as much as any words the two leaders utter as the world tries to read how well Trump, a real estate magnate and former reality television star, gets along with Putin, a former spy. The fear is that the Republican president, a political novice whose team is still developing its Russia policy, will be less prepared than Putin, who has dealt with the past two U.S. presidents and scores of other world leaders.

“There’s nothing … the Kremlin would like to see more than a (U.S.) president who will settle for a grip and a grin and walk away saying that he had this fabulous meeting with the Kremlin autocrat,” Representative Adam Schiff, the top Democrat on the House of Representatives’ Intelligence Committee, said in an interview on MSNBC. As investigations at home continue into whether there was any collusion between Trump’s presidential campaign and Russia the U.S. president has come under pressure to take a hard line against the Kremlin. Moscow has denied any interference and Trump says his campaign did not collude with Russia. On Thursday, Trump won praise from at least one Republican hawk in the U.S. Congress after his speech in Warsaw in which he urged Russia to stop its “destabilizing activities” and end its support for Syria and Iran.

“This is a great start to an important week of American foreign policy,” said Republican Senator Lindsey Graham, who has often been critical of Trump on security issues. But earlier in the day, Trump declined to say definitively whether he believed U.S. intelligence officials who have said that Russia interfered in the 2016 election. “I think it was Russia but I think it was probably other people and/or countries, and I see nothing wrong with that statement. Nobody really knows. Nobody really knows for sure,” Trump said at a news conference, before slamming Democratic former President Barack Obama for not doing more to stop hacking.

So much for that decent conversation. James Clapper, who not long ago stated there is no proof of Russian election hacking, now claims that there is no proof of anyone BUT the Russians being involved.

• Deep State Begins Anti-Russia Media Blitz Ahead Of Trump-Putin Meeting

It’s been relatively quiet in the last few weeks on the “the Russians did it, and Trump’s Putin’s best-buddy” propaganda-fest, but it appears the Deep State had three stories tonight – just hours ahead of Trump’s face-to-face with Putin – claim Russian hackers are targeting US nuclear facilities, the Russians are nonchalantly stepping up their spying, and that Russia alone interfered with the US election. With all eyes on the ‘handshake’ as Putin and Trump come face-to-face for the first time as world leaders, it seems the Deep State is desperately fearful of some rapprochement, crushing the need for NATO, and destroying the excuses for massive, unprecedented military-industrial complex spending.

And so, three stories (2 anonymously sourced and one with no facts behind it) in The New York Times (who recently retracted their “17 intelligence agencies” lie) and CNN (where do we start with these guys? let’s just go with full retraction of an anonymously sourced lie about Scaramucci and Kushner and the Russians) should stir up enough angst to ensure the meeting is at best awkward and at worst a lose-lose for Trump (at least in the eyes of the media). First off we have the ‘news’ that hackers have reportedly been breaking into computer networks of companies operating United States nuclear power stations, energy facilities and manufacturing plants, according to a new report by The New York Times.

“The origins of the hackers are not known. But the report indicated that an “advanced persistent threat” actor was responsible, which is the language security specialists often use to describe hackers backed by governments. The two people familiar with the investigation say that, while it is still in its early stages, the hackers’ techniques mimicked those of the organization known to cybersecurity specialists as “Energetic Bear,” the Russian hacking group that researchers have tied to attacks on the energy sector since at least 2012.” And Bloomberg piled on…”The chief suspect is Russia, according to three people familiar with the continuing effort to eject the hackers from the computer networks.” So that’s that 5 people – who know something – suspect it was the Russians that are hacking US nuclear facilities (but there’s no proof).

Next we move to CNN who claim a ‘current and former U.S. intelligence officials’ told them that Russian spies have been stepping up their intelligence gathering efforts in the U.S. since the election, feeling emboldened by the lack of significant U.S. response to Russian election meddling. “Russians have maintained an aggressive collection posture in the US, and their success in election meddling has not deterred them,” said a former senior intelligence official familiar with Trump administration efforts. “The concerning point with Russia is the volume of people that are coming to the US. They have a lot more intelligence officers in the US” compared to what they have in other countries, one of the former intelligence officials says.”

Holding it in Hamburg is a conscious decision intended to show muscle, and the necessity to show that muscle. Do it in the middle of the Pacific and you can’t show off your new high tech water cannon.

• Anti-G20 Protesters Clash With Hamburg Police ‘Like Never Before’ (RT)

An anti-G20 rally in Hamburg has erupted into a violent confrontation between police and protesters. Dozens of officers have been injured by rioters as sporadic clashes on the streets of the German city continued into the night. “There have been offenses committed by smaller groups [but] we now have the situation under control… I was there myself, I’ve seen nothing like that before,” Hamburg police spokesman Timo Zill told German broadcaster ZDF. The ‘Welcome to Hell’ anti-globalist rally started off relatively peacefully as activists marched through the streets chanting slogans and holding banners. Clashes begun in the early evening after roughly 1,000 anti-globalism activists, wearing face masks, reportedly refused to reveal their identity to the authorities.

According to an official police statement, the trouble started when officers tried to separate aggressive black-bloc rioters from peaceful protesters at the St. Pauli Fish Market but were met with bottles, poles and iron bars, prompting them to use justifiable force. Police used pepper-spray on rioting protesters. Water cannons were also deployed by authorities and several people seemed to be injured as a number of people were seen on the ground or with bloody faces being led away by police. Footage from the scene also showed columns of green and orange smoke rising above the crowds. At least 76 police officers were injured in the riots, most, though, suffered light injuries, Bild reports. Five of them were admitted to hospital, a police officer told AFP. One policeman suffered an eye injury after fireworks exploded in front of his face. The number of injured demonstrators has not yet been released by authorities, DW German notes.

As a result of the violence, organizers declared the protest over Thursday evening, but pockets of activists remained on the streets throughout the night. Police confirmed persistent sporadic attacks on security forces in the districts of St. Pauli and Altona. Damage to property has also been reported throughout the city. According to RT’s correspondent on the scene, Peter Oliver, one of the protesters’ grievances was that they received no clear directives from the police as to where they were allowed to march and found themselves kettled by officers in riot gear once they set off. “They are macing everyone,” one witness at the scene told RT. “As far as I could tell, they were attacking the demonstration with no reason.” “I’m from Hamburg, [and] I’ve never seen anything like this. We’ve had fights about squatted houses and all that, [but] I’ve never seen anything like that. The aggression, as far as I could tell, the purposelessness… my face hurts, I’ve got mace and everything, this is unbelievable.”

Central bankers trying to deflect the blame.

• The Party Is Over: Central Banks Pull The Plug On Bond Market Rally (CNBC)

Central banks are shutting down the music and turning on the lights after a near decade-long bond market party that resulted in ultra-low yields and low volatility. In the past two weeks, interest rates have been rising, at the prodding of the world’s central banks. Some bond strategists now see the possibility of a shift to a more fundamental-driven market, which could result in higher, more normal interest rate levels that will affect everything from home mortgages to commercial loans. That doesn’t mean the wake-up call will be a jolt, with rates snapping back violently or markets spinning out of control—though it could if rates begin to move too quickly. For now, market pros expect the rising interest rates of the past several weeks to be part of an orderly adjustment to a world in which central banks are preparing to end excessive easy policies.

The Federal Reserve is about to take the unprecedented step of reducing the balance sheet it built up to save the economy from the financial crisis. Since June 26, the U.S. 10- year yield has risen from 2.12% to Thursday’s high of 2.38%. The move has been global, after ECB President Mario Draghi last week pointed to a less risky outlook for the European economy, and Fed officials made consistently hawkish remarks. Some of those officials said they were even concerned that their policies created a too easy financial environment, meaning interest rates should be higher. The stock market caught wind of the rate move Thursday, and equities around the world responded negatively to rising yields. Bond strategists say if higher yields trigger a bigger sell off in stocks it could slow down the upward movement in interest rates, as investors will seek safety in bonds. Bond prices move opposite yields.

Friday’s June jobs report could be a moment of truth for the bond market. Strategists are looking to the wage gains in the report, expected at 0.3%. If they are as expected, the move higher in yields could continue. But a surprise to the upside could mean a much bigger move since it would signal a return of inflation. The Fed has said it is looking past the recent decline in inflation, but the market would become more convinced of the Fed’s rate-hiking intentions if it starts to rise.

“..our responsibility now is to keep dancing but closer to the exit and with a sharp eye on the tea leaves..”

• Central Bank Easy Money ‘Era Is Ending’ – Ray Dalio (CNBC)

Ray Dalio has declared the era of easy money is ending. The founder and chief investment officer of the world’s biggest hedge fund said Thursday in a commentary posted to LinkedIn that central bankers have “clearly and understandably” signaled the end of the nine-year era of monetary easing is coming. They are shifting strategy and are now focused on raising interest rates at a pace that keeps growth and inflation in balance, risking the next downturn if they get it wrong. “Recognizing that, our responsibility now is to keep dancing but closer to the exit and with a sharp eye on the tea leaves,” Dalio wrote.

In May, Dalio posted a commentary that said he was worried about the future, concerned that the magnitude of the next downturn could produce “much greater social and political conflict than currently exists.” On Thursday, he said the aggressive easing policies brought about “beautiful deleveragings,” and it was time to pause and thank the central bankers for pursuing them. “They had to fight hard to do it and have been more maligned than appreciated.” Dalio ends by saying he doesn’t see a big debt bubble about to burst, largely because of the balance sheet deleveraging that came about in the last few years. But, he said, “we do see an increasingly intensifying ‘Big Squeeze.'”

“..the only reason the world is in its current abysmal socio-political and economic shape is due to the cumulative effect of their disastrous policies..”

• Ray Dalio’s ‘Beautiful’ Deleveraging Delusion (ZH)

For some inexplicable reason, Ray Dalio still thinks the the world not only underwent a deleveraging, but that it was “beautiful.” Not only did McKinsey prove that to be completely false two years ago, but for good measure the IIF confirmed as much last week, when it revealed that global debt has hit a record $217 trillion, or 327% of GDP… while Citi’s Matt King showed that with no demand for credit in the private sector, central banks had no choice but to inject trillions to keep risk prices from collapsing.

And now, replacing one delusion with another, the Bridgewater head has penned an article in which he notes that as the “punch bowl” era is ending – an era which made Dalio’s hedge fund the biggest in the world, and richer beyond his wildest dreams – he would like to take the opportunity to “thanks the central bankers” who have ‘inexplicably’ been “more maligned than appreciated” even though their aggressive policies have, and here is delusion #1 again, “successfully brought about beautiful deleveragings.” “In my opinion, at this point of transition, we should savor this accomplishment and thank the policy makers who fought to bring about these policies. They had to fight hard to do it and have been more maligned than appreciated. Let’s thank them.” They fought hard to print $20 trillion in new money? Now that is truly news to us.

That said, we can see why Dalio would want to thank “them”: he wouldn’t be where he is, and his fund would certainly not exist today, if it weren’t for said central bankers who came to rescue the insolvent US financial system by sacrificing the middle class and burying generations under unrepayable debt. Still, some who may skip thanking the central bankers are hundreds of millions of elderly Americans and people worldwide also wouldn’t be forced to work one or more jobs well into their retirement years because monetary policies lowered the return on their savings to zero (or negative in Europe), as these same “underappreciated” central bankers created three consecutive bubbles, and the only reason the world is in its current abysmal socio-political and economic shape is due to the cumulative effect of their disastrous policies which meant creating ever greater asset and debt bubbles to mask the effects of the previous bubble, resulting in unprecedented wealth and income inequality, and which have culminated – most recently – with Brexit and Trump.

Amen.

• ‘It’s Too Late’: 7 Signs Australia Can’t Avoid Economic Apocalypse (News)

Australia has missed its chance to avoid a potential “economic apocalypse”, according to a former government guru who says that despite his warnings there are seven new signs we are too late to act. The former economics and policy adviser has identified seven ominous indicators that a possible global crash is approaching – including a surge in crypto-currencies such as Bitcoin – and the window for government action is now closed. John Adams, a former economics and policy adviser to Senator Arthur Sinodinos and management consultant to a big four accounting firm, told news.com.au in February he had identified seven signs of economic Armageddon. He had then urged the Reserve Bank to take pre-emptive action by raising interest rates to prevent Australia’s expanding household debt bubble from exploding and called on the government to rein in welfare payments and tax breaks such as negative gearing.

Adams says he has for years been publicly and privately urging his erstwhile colleagues in the Coalition to take action but that since nothing has been done, the window has now closed and Australia is completely at the mercy of international forces. “As early as 2012, I have been publicly and privately advocating that Australian policy makers take pre-emptive policy action to deal with the structural imbalances within the Australian economy, especially Australia’s household debt bubble which in proportional terms is larger than the household debt bubbles of the 1880s or 1920s, the periods which preceded the two depressions experienced in Australian history,” he told news.com.au this week. “Unfortunately, the window for taking pre-emptive action with an orderly unwinding of structural macroeconomic imbalances has now closed.”

Adams has now turned on his former party and says both its most recent prime ministers have led Australia into a potential “economic apocalypse” and Treasurer Scott Morrison is wrong that we are heading for a “soft landing”. “The policy approach by the Abbott and Turnbull Governments as well as the Reserve Bank of Australia and the Australian Prudential Regulation Authority, which has been to reduce systemic financial risk through new macro-prudential controls, has been wholly inadequate,” he says. “I do not share the Federal Treasurer’s assessment that the economy and the housing market are headed for a soft landing. Data released by the RBA this week shows that the structural imbalances in the economy are actually becoming worse with household debt as a proportion of disposable income hitting a new record of 190.4%.

“Because of the failure of Australia’s political elites and the policy establishment, the probability of a disorderly unwinding, particularly of Australia’s household and foreign debt bubbles, have dramatically increased over the past six months and will continue to increase as global economic and financial instability increases. “Millions of ordinary, financially unprepared, Australians are now at the mercy of the international markets and foreign policy makers. Australian history contains several examples of where similar pre conditions have resulted in an economic apocalypse, resulting in a significant proportion of the Australian people being left economically destitute.”

Sanctions don’t really work in this case.

• World-Beating Wealth Props Up Qatar Against Arab Sanctions (R.)

A month after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed diplomatic, trade and transport ties with Qatar, accusing it of backing terrorism, it is suffering from isolation but is nowhere near an economic crisis. The alliance against it, meanwhile, may not have options to inflict further damage. As the world’s top liquefied natural gas exporter, Qatar is so rich – at $127,660, its gross domestic product per capita in purchasing power terms is the highest of any country, according to the IMF – it can deploy money to counter almost any type of sanction. In the past month it has arranged new shipping routes to offset the closure of its border with Saudi Arabia, deposited billions of dollars of state money in local banks to shore them up, and drawn the interest of some of the West’s biggest energy firms by announcing a plan to raise its LNG output 30%.

The success of these initiatives suggests Qatar could weather months or years of the current sanctions if it has the political will to do so – and that further sanctions being contemplated by the alliance may not prove decisive. On Wednesday, the alliance said Qatar, which denies any support for terrorism, had missed a deadline to comply with its demands. Further steps against Doha will be taken in line with international law “at the appropriate time”, Saudi Foreign Minister Adel al-Jubeir said. Saudi media reported this week that the new sanctions would include a pull-out of deposits and loans from Qatar by banks in alliance states, and a “secondary boycott” in which the alliance would refuse to do business with firms that traded with Qatar. Those steps would cause further pain for Qatar, but not to the point of destabilizing its financial system or breaking the peg of its riyal currency to the U.S. dollar, senior Qatari businessmen and foreign economists said.

“..a soft month for Toronto real estate market..”, “..a better supplied market and a moderating annual pace of price growth…”

• Home Sales In Greater Toronto Area Plunged 37.3% Last Month (CP)

The number of homes sold last month in the Greater Toronto Area plunged a whopping 37.3% compared to the same month a year ago, the city’s real estate board said Thursday, weeks after Ontario introduced measures aimed at cooling the housing market. The Toronto Real Estate Board said 7,974 homes changed hands in June while the number of new properties on the market climbed 15.9% year over year to 19,614. The average price for all properties was $793,915, up 6.3% from the same month last year. In April, the Ontario government implemented rules intended to dampen Toronto’s heated real estate market, where escalating prices have concerned policy-makers at the municipal, provincial and federal levels.

Ontario’s measures, retroactive to April 21, include a 15% tax on foreign buyers in the Greater Golden Horseshoe region, expanded rent controls and legislation allowing Toronto and other cities to tax vacant homes. “We are in a period of flux that often follows major government policy announcements pointed at the housing market,” TREB president Tim Syrianos said in a statement. “On one hand, consumer survey results tell us many households are very interested in purchasing a home in the near future, but some of these would-be buyers seem to be temporarily on the sidelines waiting to see the real impact of the Ontario Fair Housing Plan. On the other hand, we have existing homeowners who are listing their home because they feel price growth may have peaked. The end result has been a better supplied market and a moderating annual pace of price growth.”

60-odd years later, it’s still true: “As General Motors goes, so goes the nation.”

• The Fast Track to “Carmageddon” (David Stockman)

Back in the 1950s when GM had 50% of the auto market they always said that, “As General Motors goes, so goes the nation.” That was obviously a tribute to GM’s economic muscle and its role as the driver of growth and rising living standards in post-war America’s booming economy. Those days are long gone for both GM and the nation. GM’s drastically reduced 20% market share of U.S. light vehicle sales in June was still an economic harbinger, albeit of a different sort. GM offered a record $4,361 of cash incentives during June. That was up 7% from last year and represented 12% of its average selling price of $35,650 per vehicle, also a record. But what it had to show for this muscular marketing effort was a 5% decline in year-over-year sales and soaring inventories. The latter was up 46% from last June.

My purpose is not to lament GM’s ragged estate, but to note that it — along with the entire auto industry — has become a ward of the Fed’s debt-fueled false prosperity. The June auto sales reports make that absolutely clear. In a word, consumers spent the month “renting” new rides on more favorable terms than ever before. But that couldn’t stop the slide of vehicle “sales” from its 2016 peak. In fact, June represented the 6th straight month of year-over-year decline. And the fall-off was nearly universal — with FiatChrysler down 7.4%, Ford and GM off about 5% and Hyundai down by 19.3%. The evident rollover of U.S. auto sales is a very big deal because the exuberant auto rebound from the Great Recession lows during the last six years has been a major contributor to the weak recovery of overall GDP.

In fact, overall industrial production is actually no higher today than it was in the fall of 2007. That means there has been zero growth in the aggregate industrial economy for a full decade. Real production in most sectors of the U.S. economy has actually shrunk considerably, but has been partially offset by a 15% gain in auto production from the prior peak, and a 130% gain from the early 2010 bottom. By comparison, the index for consumer goods excluding autos is still 7% below its late 2007 level. So if the so-called “recovery” loses its automotive turbo-charger, where will the growth come from?

20th Anniversary, Asian Financial Crisis.

• Clinton, The IMF And Wall Street Journal Toppled Suharto (Hanke)

On August 14, 1997, shortly after the Thai baht collapsed on July 2nd, Indonesia floated the rupiah. This prompted Stanley Fischer, then the Deputy Managing Director of the IMF and presently Vice Chairman of the U.S. Federal Reserve, to proclaim that “the management of the IMF welcomes the timely decision of the Indonesian authorities. The floating of the rupiah, in combination with Indonesia’s strong fundamentals, supported by prudent fiscal and monetary policies, will allow its economy to continue its impressive economic performance of the last several years.” Contrary to the IMF’s expectations, the rupiah did not float on a sea of tranquility. It plunged from a value of 2,700 rupiahs per U.S. dollar to lows of nearly 16,000 rupiahs per U.S. dollar in 1998. Indonesia was caught up in the maelstrom of the Asian Financial Crisis.

By late January 1998, President Suharto realized that the IMF medicine was not working and sought a second opinion. In February, I was invited to offer that opinion and was appointed as Suharto’s Special Counselor. Although I did not have any opinions on the Suharto government, I did have definite ones on the matter at hand. After nightly discussions at the President’s private residence, I proposed an antidote: an orthodox currency board in which the rupiah would be fully convertible into and backed by the U.S. dollar at a fixed exchange rate. On the day that news hit the street, the rupiah soared by 28% against the U.S. dollar on both the spot and one year forward markets. These developments infuriated the U.S. government and the IMF. Ruthless attacks on the currency board idea and the Special Counselor ensued. Suharto was told in no uncertain terms – by both the President of the United States, Bill Clinton, and the Managing Director of the IMF, Michel Camdessus – that he would have to drop the currency board idea or forego $43 billion in foreign assistance.

Economists jumped on the bandwagon, trotting out every imaginable half-truth and non-truth against the currency board idea. In my opinion, those oft-repeated canards were outweighed by the full support for an Indonesian currency board by four Nobel Laureates in Economics: Gary Becker, Milton Friedman, Merton Miller, and Robert Mundell. Also, Sir Alan Walters, Prime Minister Thatcher’s economic guru, a key figure behind the establishment of Hong Kong’s currency board in 1983, and my colleague and close collaborator, endorsed the idea of a currency board for Indonesia. Why all the fuss over a currency board for Indonesia? Merton Miller understood the great game immediately. As he said when Mrs. Hanke and I were in residence at the Shangri-La Hotel in Jakarta, the Clinton administration’s objection to the currency board was “not that it wouldn’t work, but that it would, and if it worked, they would be stuck with Suharto.”

Much the same argument was articulated by Australia’s former Prime Minister Paul Keating: “The United States Treasury quite deliberately used the economic collapse as a means of bringing about the ouster of Suharto.” Former U.S. Secretary of State Lawrence Eagleburger weighed in with a similar diagnosis: “We were fairly clever in that we supported the IMF as it overthrew (Suharto). Whether that was a wise way to proceed is another question. I’m not saying Mr. Suharto should have stayed, but I kind of wish he had left on terms other than because the IMF pushed him out.” Even Michel Camdessus could not find fault with these assessments. On the occasion of his retirement, he proudly proclaimed: “We created the conditions that obliged President Suharto to leave his job.”

Hmm. Treating this is an American phenomenon is not useful. It’s global. And that has a lot to do with deteriorating economic conditions. Centralization is only accepted as long as it has tangible benefits for people.

• Our Political Parties Are Obsolete (CH Smith)

History informs us that once something is obsolete, it can disappear far faster than anyone expected. While we generally think of obsoleted technologies vanishing, social and political systems can become obsolete as well. Should a poor soul who entered a deep coma a year ago awaken today, we must forgive his/her astonishment at the political wreckage left by the 2016 election. The Democratic Party, a mere year ago an absurdly over-funded machine confident in an easy victory in the presidential race, is now a complete shambles: its leadership in free-fall, its Fat-Cat donors disgusted, and its demented intoxication with pinning collaboration with Russia on the Trump camp eroding whatever feeble legacy legitimacy it still holds. What the party stands for is a mystery, as its Elites are clearly beholden to insiders, special interests and Corporate donors while glorifying the worst excesses of globalism and the National Security State’s endless war on civil liberties.

The newly awakened citizen would also marvel at the chaotic war zone of the Republican Party, in which the Insider Warlords are battling insurgent Outsiders, while the same Elites that fund the Democratic machine are wondering what they’re buying with their millions of dollars in contributions, for it’s unclear what the Republican Party stands for: it’s for Small Government, except when it’s for Bigger Government, which is 95% of the time; it’s for more law enforcement and the militarization of local police, and more intrusion into the lives of the citizenry; it’s for stricter standards for welfare, except for Corporate Welfare; it’s for tax reform, except the thousands of pages of give-aways, loopholes and tax breaks for the wealthy and corporations all remain untouched, and so on: a smelly tangle of special interests masked by a few sprays of PR air freshener to the millions left behind by the globalization that has so enriched Corporate America and the class of financier-owners, bankers, insiders and technocrats–the same group that funds and controls both political parties.

Political parties arose to consolidate centralized control of the central state. We have now reached the perfection of this teleology: the political elites and the financial elites are now one class. In our pay-to-play “democracy,” only the votes of wealth and institutional power count. As I have often noted here, the returns on centralization are diminishing to less than zero. The initial returns on centralizing capital, production and social-political power were robust, but now the centralized cartel-state is eating its own tail, masking its financial bankruptcy by borrowing from the future, and cloaking its political bankruptcy behind the crumbling facades of the legacy parties. Now that technology has enabled decentralized currency, markets and governance, the centralized political parties are obsolete.

Erdogan was never going to withdraw his troops. That’s the whole story. Guterres just looks foolish.

• Cyprus Reunification Talks Collapse (R.)

Talks to reunify the divided island of Cyprus collapsed in the early hours of Friday, U.N. Secretary General Antonio Guterres said after a stormy final session. “I’m very sorry to tell you that despite the very strong commitment and engagement of all the delegations and different parties … the conference on Cyprus was closed without an agreement being reached,” he told a news conference. The collapse marked a dramatic culmination of more than two years of a process thought to be the most promising since the island was split more than 40 years ago. Guterres had flown in on Thursday to press Greek Cypriot President Nicos Anastasiades and Turkish Cypriot leader Mustafa Akinci to seal a deal reuniting the east Mediterranean island, while U.S. Vice President Mike Pence had phoned to urge them to “seize this historic opportunity”.

Diplomatic efforts to reunite Cyprus have failed since the island was riven in a 1974 Turkish army invasion triggered by a coup by Greek Cypriots seeking union with Greece. The week of talks in the Swiss Alps, hailed by the United Nations as “the best chance” for a deal, ground to a halt as the two sides failed to overcome final obstacles. Diplomats said Turkey had appeared to be offering little to Greek Cypriots wanting a full withdrawal of Turkish troops from the island, although the Greek Cypriots had indicated readiness to make concessions on Turkish Cypriot demands for a rotating presidency, the other key issue. Guterres finally called a halt at 2 a.m. after a session marred by yelling and drama, a source close to the negotiations said. “Unfortunately… an agreement was not possible, and the conference was closed without the possibility to bring a solution to this dramatic and long-lasting problem,” Guterres said.

Debt Rattle May 28 2017

May 282017

May 28, 2017 Posted by Raúl Ilargi Meijer at 9:51 am Finance Tagged with: Canada, climate, Corbyn, Cyprus, DAPL, home prices, ISIS, May, migrants, Trump, volatility 1 Response »

Fred Stein Little Italy New York 1943

• Trump Tells ‘Confidants’ US Will Leave Paris Climate Deal (R.)

• New Home Prices Are Over 50% Higher In Canada Than The US (BD)

• Low Volatility Is Market’s Most Significant Danger (BBG)

• Jeremy Corbyn Within Striking Distance Of No. 10 (Mirror)

• Fourth Turning’s Neil Howe: We Are In The 1930s, “Winter Is Coming” (Mauldin)

• We’re Dealing With a New Type of War Lie (Swanson)

• Private Mercenary Firm Targeted Dakota Access Pipeline Movement (IC)

• Once-in-a-Generation Hopes Of Cyprus Reunification Appear To Be Dashed (G.)

• US-Led Syria Strikes Kill Scores Of Relatives Of IS Fighters (AFP)

• 10,000 Migrants Rescued, Dozens Drown Between Italy And Libya This Week (AFP)

It’ll take Europe a while to recover from Trump.

• Trump Tells ‘Confidants’ US Will Leave Paris Climate Deal (R.)

U.S. President Donald Trump has told “confidants,” including the head of the Environmental Protection Agency Scott Pruitt, that he plans to leave a landmark international agreement on climate change, Axios news outlet reported on Saturday, citing three sources with direct knowledge. On Saturday, Trump said in a Twitter post he would make a decision on whether to support the Paris climate deal next week. A source who has been in contact with people involved in the decision told Reuters a couple of meetings were planned with chief executives of energy companies and big corporations and others about the climate agreement ahead of Trump’s expected announcement later in the week. It was unclear whether those meetings would still take place.

“I will make my final decision on the Paris Accord next week!” he tweeted on the final day of a G7 summit in Italy at which he refused to bow to pressure from allies to back the landmark 2015 agreement. The summit of G7 wealthy nations pitted Trump against the leaders of Germany, France, Britain, Italy, Canada and Japan on several issues, with European diplomats frustrated at having to revisit questions they had hoped were long settled. [..] Although he tweeted that he would make a decision next week, his apparent reluctance to embrace the first legally binding global climate deal that was signed by 195 countries clearly annoyed German Chancellor Angela Merkel. “The entire discussion about climate was very difficult, if not to say very dissatisfying,” she told reporters. “There are no indications whether the United States will stay in the Paris Agreement or not.”

Is optimism your friend?

• New Home Prices Are Over 50% Higher In Canada Than The US (BD)

The price of new homes is quickly diverging in Canada and the US. Data from the Canadian Housing and Mortgage Corporation (CMHC) show that new homes are selling for substantially more than the same time last year. Meanwhile south of the border, data from the US Bureau of Census show that new home prices are on the decline. This has lead to an even wider gap between the average price of a new home in Canada and the US. The price of a new home across Canada is up for the second month in a row. The average sale price in April was CA$751,881 (US$559,123). This represents an 11% increase from the same time last year, when measured in Canadian dollars. When compared in US dollars, that increase drops to a much more conservative 2.64%. Even after factoring in the loonie’s decreased buying power in Canada, new home prices still climbed.

American new home builders aren’t seeing such steep climbs in sale prices. Actually, they aren’t seeing climbs at all. The average price of a new home in the US was CA$495,271 (US$368,300). This represents a 3% decline from the same time last year, when measured in US dollars. In Canadian dollars, this was a 0.49% decline from the same time last year. Both forms of measurement show declining home prices in the US, curious since their economy is in a much better state than Canada right now. New homes are trading at substantially higher values in Canada than the US in April. The average new home in April 2017 was 51% higher in Canada than the US. The same time last year, prices in Canada were only 36% higher. It appears in a post-crash United States, new home buyers are taking much more conservative strides. In a hasn’t-crashed-in-decades Canada, new home buyers are optimistic about future values.

When markets don’t function, i.e. there is no price discovery, why would there be volatility?

• Low Volatility Is Market’s Most Significant Danger (BBG)

Of all the dangers in the world of finance, the enduring low level of market volatility is the most significant. How quiet is quiet? Recently, the six-month realized volatility for the S&P 500 dipped to 6.7 percent, lower than even the period leading up to the financial crisis of 2008-09. During the mid-’90s, volatility was as low as it is now, but the size, complexity and interlinkages of financial market exposures were far less significant. Now, fluctuations are severely muted, and thus send a false signal of safety to both investors and policy makers who misread the calm as an “all clear” sign, dismissing the events above as insufficiently relevant. The result is an inability to appreciate how quickly market conditions can change, especially as trading strategies that capitalize on quiet markets become vulnerable to unwind, serving to amplify a risk-off event.

[..] There is an important debate in markets now about the causes of low realized volatility. A decline in the correlation among stocks, a global economy on more stable footing and a decline in perceptions of systemic risk (a euro-zone unraveling, for example) are among the factors. We should appreciate the importance of money flows as well. According to ETF.com, the exchange-traded fund industry is on pace for $500 billion in new asset growth in 2017. These vehicles can provide cheap, liquid access to market risk exposures. They simply put the money received to work in passive fashion, without evaluating the risk/return trade-off. The flows themselves are a factor in the positive returns and the low volatility that, in turn, attract additional flows.

What results is a dangerous circularity. Recall the period of wonderful outcomes preceding the financial crisis. The demand for housing spurred price appreciation, which enabled mortgage credit to be supplied at increasingly generous terms. The most suspect credit cannot default if the value of the collateral keeps appreciating and, as a result, the supply of credit keeps expanding. The fear of missing out is also supremely powerful. The conservative individual becomes less so when he or she sees a neighbor flipping houses with success. Similarly, the conservative lender is forced to compete with more aggressive suppliers of credit. For lenders, not being accommodative enough during the go-go years can amount to an existential business question.

Today’s risks differ meaningfully from those of a decade ago. However, the excess amount of capital chasing opportunity at increasingly aggressive terms is similar. The competition to put money to work, then, like now, results in low volatility. Investors are in danger of misinterpreting this tranquility as conveying safety when crowded positioning is resulting in more, not less, risk. While spending money on hedging is especially difficult in a seemingly benign environment, investors should be actively vigilant to market risks, devoting time to an action plan that helps protect portfolio wealth against the inevitable return of volatility.

Different polls have very different numbers.

• Jeremy Corbyn Within Striking Distance Of No. 10 (Mirror)

In the first week of the General Election campaign our ComRes poll for the Sunday Mirror gave Theresa May a magic 50% of the vote. She looked unstoppable. Today’s ComRes poll shows Jeremy Corbyn has narrowed her lead to 12 points , six points up on two weeks ago. As the man who invented the Swingometer says he’s never seen swings like it. If the PM goes into polling day on June 8th with this kind of lead she would not be unhappy. It would give her an overall majority of 62. Not the landslide she wished for perhaps, but with enough MPs to get her own way every time. But we are still 11 days from polling day – and on present form that’s enough for Mr Corbyn to pick up another 12 points. And that puts him in striking distance of No10. Our survey puts the Conservatives on 46%, Labour on 34% and the Lib Dems down two points on 8%.

Ukip are unchanged in fourth place at 5%. But the most striking findings are that the Labour leader’s personal ratings are up in every category while Mrs May’s are down in all but one. Mrs May’s Dementia Tax on the elderly and her U-turn over how to pay for it has clearly boomeranged. The Manchester bombing appears to have had little effect on voting intention. Mrs May is still way ahead of Mr Corbyn as being best to deal with terrorism. But she’s five points down on two weeks ago. Only a fifth of voters say she is most likely to protect elderly people dependent on social care while Mr Corbyn scores 43%. Curiously the mess she made of the Dementia Tax has not damaged her among voters aged 65 plus with nearly seven in ten saying they will still vote for her. But Mr Corbyn is ahead in every age group until pollsters get to those 44 or older.

“..what comes next will be an era in which there is a new order..”

• Fourth Turning’s Neil Howe: We Are In The 1930s, “Winter Is Coming” (Mauldin)

From the Balkans to the US, walls are going up, not down, according to demographer and The Fourth Turning author Neil Howe. Speaking to a packed crowd at Mauldin Economics’ Strategic Investment Conference in Orlando, Howe said we are reliving many of the same trends and changes of the 1930s. “Worldwide, people are losing trust in institutions,” he said. “Trust in the military, small business, and police is still there. But trust in democracies, media, and politicians is dropping.” When was the last time we saw these changes and the rise of right-wing populism?” he asked. “The 1930s.” Howe’s statement is borne out of a June 2016 Gallup poll. When poll takers were asked how much confidence they had in institutions in American society, the results were troubling.

Just 15% said they had a “great deal” of confidence in the US Supreme Court. Banks trailed behind at 11%, followed by the criminal justice system (9%), newspapers (8%), and big business (6%). Meanwhile, just 16% expressed a “great deal” of confidence in the presidency, with that number plummeting to 3% for Congress. In his keynote, Howe shared his forecasting logic: “My method is to step back and realize one thing: There is something we know about the world in 20 years’ time. The people who live there will be all of us, 20 years older and playing a different role. I call this ‘looking along the generational diagonal.’ The critical thing to remember about the current crisis period is that what comes next will be an era in which there is a new order.

According to the Strauss-Howe generational theory, as this new order takes root, individualism declines and institutions are strengthened. “History is seasonal, and winter is coming,” Howe has said. But after winter, comes spring. As the American Revolution was followed by calm, as the Civil War was followed by reconstruction and a gilded age, and as the Great Depression and World War II were followed by an age of peace and prosperity, so too will this crisis period be followed by a calm, stable era. It’s simply a matter of time.

Russiagate.

• We’re Dealing With a New Type of War Lie (Swanson)

The “Russian interference in the 2016 United States elections” even exists as a factual event in Wikipedia, not as an allegation or a theory. But the factual nature of it is not so much asserted as brushed aside. Former CIA Director John Brennan, in the same Congressional testimony in which he took the principled stand “I don’t do evidence,” testified that “the fact that the Russians tried to influence resources and authority and power, and the fact that the Russians tried to influence that election so that the will of the American people was not going to be realized by that election, I find outrageous and something that we need to, with every last ounce of devotion to this country, resist and try to act to prevent further instances of that.” He provided no evidence. Activists have even planned “demonstrations to call for urgent investigations into Russian interference in the US election.”

They declare that “every day we learn more about the role Russian state-led hacking and information warfare played in the 2016 election.” (March for Truth.) Belief that Russia helped put Trump in the White House is steadily rising in the U.S. public. Anything commonly referred to as fact will gain credibility. People will assume that at some point someone actually established that it was a fact. Keeping the story in the news without evidence are articles about polling, about the opinions of celebrities, and about all kinds of tangentially related scandals, their investigations, and obstruction thereof. Most of the substance of most of the articles that lead off with reference to the “Russian influence on the election” is about White House officials having some sort of connections to the Russian government, or Russian businesses, or just Russians.

It’s as if an investigation of Iraqi WMD claims focused on Blackwater murders or whether Scooter Libby had taken lessons in Arabic, or whether the photo of Saddam Hussein and Donald Rumsfeld shaking hands was taken by an Iraqi. A general trend away from empirical evidence has been extensively noted and discussed. There is no more public evidence that Seth Rich (a Democratic National Committee staffer who was murdered last year) leaked Democratic emails than there is that the Russian government stole them. Yet both claims have passionate believers. Still, the claims about Russia are unique in their wide proliferation, broad acceptance, and status as something to be constantly referred to as though already established, constantly augmented by other Russia-related stories that add nothing to the central claim. This phenomenon, in my view, is as dangerous as any lies and fabrications coming out of the racist right.

Blackwater 2.0

• Private Mercenary Firm Targeted Dakota Access Pipeline Movement (IC)

A shadowy international mercenary and security firm known as TigerSwan targeted the movement opposed to the Dakota Access Pipeline with military-style counterterrorism measures, collaborating closely with police in at least five states, according to internal documents obtained by The Intercept. The documents provide the first detailed picture of how TigerSwan, which originated as a U.S. military and State Department contractor helping to execute the global war on terror, worked at the behest of its client Energy Transfer Partners, the company building the Dakota Access Pipeline, to respond to the indigenous-led movement that sought to stop the project. Internal TigerSwan communications describe the movement as “an ideologically driven insurgency with a strong religious component” and compare the anti-pipeline water protectors to jihadist fighters.

One report, dated February 27, 2017, states that since the movement “generally followed the jihadist insurgency model while active, we can expect the individuals who fought for and supported it to follow a post-insurgency model after its collapse.” Drawing comparisons with post-Soviet Afghanistan, the report warns, “While we can expect to see the continued spread of the anti-DAPL diaspora … aggressive intelligence preparation of the battlefield and active coordination between intelligence and security elements are now a proven method of defeating pipeline insurgencies.” More than 100 internal documents leaked to The Intercept by a TigerSwan contractor, as well as a set of over 1,000 documents obtained via public records requests, reveal that TigerSwan spearheaded a multifaceted private security operation characterized by sweeping and invasive surveillance of protesters.

As policing continues to be militarized and state legislatures around the country pass laws criminalizing protest, the fact that a private security firm retained by a Fortune 500 oil and gas company coordinated its efforts with local, state, and federal law enforcement to undermine the protest movement has profoundly anti-democratic implications. The leaked materials not only highlight TigerSwan’s militaristic approach to protecting its client’s interests but also the company’s profit-driven imperative to portray the nonviolent water protector movement as unpredictable and menacing enough to justify the continued need for extraordinary security measures. Energy Transfer Partners has continued to retain TigerSwan long after most of the anti-pipeline campers left North Dakota, and the most recent TigerSwan reports emphasize the threat of growing activism around other pipeline projects across the country.

Not much use talking to Erdogan. He needs his strongman image to much at home.

• Once-in-a-Generation Hopes Of Cyprus Reunification Appear To Be Dashed (G.)

The best hope yet of reuniting war-partitioned Cyprus has been dashed after reconciliation attempts were brought to an abrupt halt following two years of intense negotiations. The optimism engendered by talks seen as a once-in-a-generation opportunity to unite the Mediterranean island ended when the United Nations special envoy, Espen Barth Eide, announced that he was terminating negotiation efforts. “Without a prospect for common ground, there is no basis for continuing this shuttle diplomacy,” the Norwegian former foreign minister said in a short statement. Eide now enters the long list of diplomats who, for the best part of 50 years, have attempted to solve one of the world’s most intractable diplomatic disputes.

Split between the majority population of Greeks in the south and Turks in the north, Cyprus has been divided since 1974 when Ankara ordered troops to invade the island in response to an Athens-organised coup to unite it with Greece. In Nicos Anastasiades and Mustafa Akinci – the respective leaders of the island’s Greek and Turkish communities – the two sides had found men who were not only moderate and born in the same town – Limassol – but willing to make the sort of concessions necessary to find a solution. Both had got to the point of poring over maps outlining territorial adjustments in a envisaged bi-zonal, bi-communal federation. In January, the first international conference on Cyprus was held at the UN headquarters in Geneva with representatives from Greece, Turkey and Britain – the island’s three guarantor powers.

Hundreds of people are collateral damage.

• US-Led Syria Strikes Kill Scores Of Relatives Of IS Fighters (AFP)

Dozens of relatives of Islamic State group fighters were killed Friday in Syria in US-led strikes, regime or Russian raids, after the UN urged nations striking the jihadists to protect civilians. Raids by the US-led coalition have pounded IS positions across Iraq and Syria since the jihadist group claimed responsibility for the devastating bombing of a concert in Manchester on Monday. Scores of civilians, many of them families of IS members, have been killed in bombing raids in recent days on the eastern Syrian town of Mayadeen, held by IS since 2014. Early Friday, at least 80 relatives of IS fighters were killed in US-led coalition bombardment, according to the Syrian Observatory for Human Rights.

“The toll includes 33 children. They were families seeking refuge in the town’s municipal building,” said Observatory head Rami Abdel Rahman. “This is the highest toll for relatives of IS members in Syria,” he told AFP. Coalition strikes on the town killed 37 civilians on Thursday night after 15 had been killed on Wednesday, according to the Britain-based Observatory. The US military on Friday confirmed that it had struck “near Mayadeen” on May 25 and 26, but said it was “still assessing the results of those strikes”, according to Pentagon spokesman Eric Pahon. The US military insists that it takes every precaution to avoid hitting civilians, but the United Nations on Friday urged parties bombing IS to do more.

No moral values left: “The G7 only managed to “reaffirm the sovereign rights of states to control their own borders and set clear limits on net migration levels.“

• 10,000 Migrants Rescued, Dozens Drown Between Italy And Libya This Week (AFP)

Nearly 10,000 migrants were rescued off the coasts of Italy and Libya this week, as the leaders of G7 gathered for a summit coincidentally held in Sicily. And at least 54 people have drowned in the Mediterranean since Tuesday. Large-scale rescue efforts off the Italian coast on Friday saved 2,200 migrants who risked their lives traveling in unworthy sea vessels to reach Italy. Italian coastguard and commercial boats delivered those rescued to reception centers in Italy. A further 1,200 people were rescued by Libyan ships and taken to Tripoli or Zawiya. Some 6,400 migrants were rescued from the Mediterranean between Tuesday and Thursday. The Italian coastguard also discovered another 10 bodies, bringing to 54 the total number of officially registered deaths this week, officials told AFP.

The biggest tragedy occurred on Wednesday, when 35 migrants drowned, including at least 10 children, after they fell off an overloaded vessel that was hit by a huge wave while being rescued by an aid boat. At least 1,400 people have drowned so far this year trying to make the perilous journey across the sea to Italy, according to UN figures, while more than 50,000 migrants reached Italian coasts, most of them through Libya. Italy has on numerous occasions said that it barely has enough resources to deal with the migrant influx from Libya. The situation has become an EU-wide concern in recent years, with Brussels facing mounting pressure from human rights groups over its handling of the migrant crisis in the Mediterranean.

G7 leaders, who met in Sicily, discussed providing greater assistance to African countries to persuade migrants to stay at home rather than make the dangerous journey across the Mediterranean. However, no concrete plan of action was agreed upon at the end of the two-day summit in Taormina. The G7 only managed to “reaffirm the sovereign rights of states to control their own borders and set clear limits on net migration levels.”

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