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Debt Rattle October 5 2021

Oct 052021

October 5, 2021 Posted by Raúl Ilargi Meijer at 8:15 am Finance Tagged with: antibodies, exterminations, India, iron, Italy, Kulldorff, PCR, zero Covid 84 Responses »

M. C. Escher Circle limit III 1959

• They All Lied. Throw Them All Out NOW (Denninger)

• Covid-19: The Hyperferritinemic Syndrome (Chesnut)

• Slowly, Then All at Once (Kunstler)

• The Age of Exterminations – III (Ugo Bardi)

• Italian Court Sides With Nurse Wrongly Suspended For Refusing Covid-19 Jab (LSN)

• New Zealand Abandons Controversial ‘Zero COVID’ Policy (SN)

• India To Pay $674 Compensation For Every Covid-19 Death (BBC)

• Harvard Epidemiologist Censored by LinkedIn for Defending Healthcare Jobs (BI)

• New PCR Test Intelligence Suggests Covid-19 Virulent Earlier Than Thought (RM)

• Antibodies Last Over A Year After Covid-19 Infection (JTN)

• Europe’s Energy Crisis Presents A Real Danger (Lacalle)

From https://wereldintransitie.files.wordpress.com/2021/10/covid-19-in-perspectief.pdf

Veritas Pfizer

BREAKING: @Pfizer Scientists: ‘Your [COVID] Antibodies are Probably Better than the [Pfizer] Vaccination’

'We’re Like Bred And Taught to be Like “Vaccine is Safer Than Actually Getting Covid”'

“Our Organization is Run on Covid Money”#ExposePfizer https://t.co/Fj2tBsbBc9

— Ivory Hecker (@IvoryHecker) October 5, 2021

Qantas
https://twitter.com/i/status/1444644291758919686

“The ghouls involved in this up and down the line, from hospital administrators to doctors to nurses to politicians all must hang for this.”

• They All Lied. Throw Them All Out NOW (Denninger)

The Government has been analyzing CMS data. Not a shock; they have every person over 65’s medical records, in real time, as everyone over 65, statistically speaking, is on Medicare and the government pays for it. They therefore have the records. The US Government has been analyzing this data through Project Salus. They know that:
• 71% of the Covid-19 cases occurred in these fully-vaccinated people and roughly 80% of the population >65 is vaccinated. In other words they know the vaccines do not stop you from getting Covid.
• Both of the mRNA vaccines lose effectiveness between 4-6 months post-injection; the failure rate doubles between 5-6 months as opposed to 3-4 months.
• Age is NOT why the vaccines lose effectiveness. It is simply that they stop working.
• While Moderna vaccines work slightly better than the Pfizer ones, the key word here is slightly. Both degrade materially and the difference in the 5-6 month timeframe is not statistically significant. Yes, it appears to be slightly better but not statistically so. In other words the damn things do not work to provide durable protection — period.
• The nuclear lie: As of August 7th 60% of hospitalizations were among fully-vaccinated individuals. You have heard repeatedly that this is now a “disease of the unvaccinated.” That is a damned, knowing lie.
• In the 5-6 month timeframe the hospitalization protection also is wildly ineffective; the rate per 100,000 approximately doubles between the 3-4 month and 5-6 month time periods.
• Prior infection is highly protective but post six months vaccination has become much less-so. Note that “prior infection” now goes back 18 months to the first wave. Do we still need to have a conversation about “natural immunity”? No: THE US GOVERNMENT KNOWS DAMNED WELL AND HAS PROVED THAT INFECTION PROTECTS BETTER THAN THEIR FRAUDULENT JABS.

This is now all in the data folks, and the US Government knows it. You have been lied to repeatedly folks — these are not errors, and what Fauci did yesterday on TV was not an error either. These are not “noble” anything; they are lies. The jabs are a failure in that no matter the promise you care to hang your hat on they become more and more worthless over time and that time period is short enough to void the effectiveness which the FDA claims must exist in order to approve such a thing as a “vaccine.” The Government has been analyzing this data and knows damned well the jabs stop working and in fact this is not a disease of the unvaccinated; the claims that the hospitals are “full of unvaccinated people” are damned lies intended to coerce you into a dangerous and, over time worthless act.

At the same time they know that prior infection and recovery is effective and remains effective yet they continue to claim that there is “no data” to prove this. They’re full of crap; they not only have the data they’ve analyzed it and know that’s yet another lie; there is no reason to take a jab that wears off if you have been previously infected. Period. And finally a new analysis shows this is not US-centric; infection rates are not correlated with vaccination percentages, which is hard, statistical proof that the jabs are worthless to stop you from getting and giving Covid-19 to others. The ghouls involved in this up and down the line, from hospital administrators to doctors to nurses to politicians all must hang for this.

Check your iron.

• Covid-19: The Hyperferritinemic Syndrome (Chesnut)

Ferritin is double edged. It is both an inflammation promoter and an immunosuppressant. But, it needs a trigger for BOTH of its abilities to be engaged. That trigger is none other than the Spike Protein’s cytotoxic attack on virtually EVERYTHING due to its affinity for ACE2! It is said that the Devil’s greatest trick is getting mankind to believe he doesn’t exist. It is the WHO’s and the CDC’s greatest trick that they convinced mankind that SARS-CoV-2 is a natural virus. It is a bioweapon. In particular, the Spike Protein. Only something invented could so artfully, perfectly bridge the gap and induce BOTH a hyperinflammatory state and immunosuppression. The result? ARDS in the short term. AUTOIMMUNITY in the long run.

“Help wanted signs are plastered everywhere and no help is on the way.”

• Slowly, Then All at Once (Kunstler)

Meanwhile, the country is too busy committing suicide by Covid-19. The stupid vaccine mandates guarantee the loss of hospital services and the failure of medical care generally as nurses, technicians, doctors, and even the cleaning crew peel away from their jobs. Ditto, public education… and just about everything else, really, where employment is conditioned on getting vaxed. A lot of ordinary people have weighed the costs and benefits and have decided to opt out. No thank you on blood clots and a premature death. Help wanted signs are plastered everywhere and no help is on the way. For many businesses, no parts or raw materials are on the way either. The truckers don’t want the vax. With the vaccine program failing, Pfizer and the gang are looking to ride to the rescue with a new magic Covid cure pill that does exactly what Ivermectin has been doing, though constantly maligned in the mainstream news. Get a load of this statement issued by the Associated Press on Friday.

“Falsely touted as a treatment for Covid-19?” That’s about as maliciously dishonest as you can get, since it will contribute to killing people whose lives would otherwise be saved by the Ivermectin protocol — which has been shown to be safe and effective in the clinical setting around the world. By the way, Ivermectin is an off-patent drug costing only about two dollars a pill. Since the Covid-19 early treatment protocol runs five days, that’s about $10 for that medication. It must gall the pharma companies to see that enormous profit-potential slip through their hands. Their go-to drug the past two years has been Remdesivir, which is neither safe nor effective and costs $3,100 for a course of treatment (NPR-News). How much do you suppose Pfizer will charge for its new ivermectin replacement? So, while America strangles its economy to death, seemingly on-purpose, do you suppose the capital markets will not notice? You bet they will, and that means big trouble for Wall Street, probably soon. This is their season of the witch, you know, and just last week they twitched up-and-down five hundred points a day. Looking a little shaky.

Is it a coincidence, by the way, that four officers of the Federal Reserve have been outed for trading stocks and bonds in a pattern that looks an awful lot like front-running the Fed’s own “guidance?” Robert S. Kaplan, head of the Dallas Fed, and Eric Rosengren, head of the Boston Fed announced their “early retirements” last week over stock-trading ethics issues. Fed Vice-chair Richard Clarida’s financial disclosure statement indicated that he dumped millions of dollars in a Pimco bond fund and jammed them into a Pimco stock fund the day before Fed Chair Jerome Powell announced emergency interventions to battle the Covid-19 epidemic in early 2020. Mr. Clarida was involved in deliberations leading to the change in fed policy. And Richmond Fed president Thomas Barkin is under scrutiny for voting to bail out the corporate bond market while sitting on a portfolio of corporate bonds. In his past role as CFO of McKinsey & Co, a global consulting firm, Barkin advised Purdue Pharma L.P. on maximizing sales of its painkiller OxyContin, the infamous scourge of the US opioid epidemic.

“In 2020 the average life expectancy in the US has declined by nearly 2% for a total of 600,000 extra deaths, most of them old people. So, we are talking of some 20 billion dollars saved just in terms of pensions. But it is much more than that considering the saving in health care costs.”

• The Age of Exterminations – III (Ugo Bardi)

Let’s make a few calculations. In the US, there are nowadays about 46 million retirees living on social security. The US spends about 7% of its GDP on pensions, that is, about 1.5 trillion dollars per year (about $30.000/person/year). That’s more than the about 1 trillion dollars that the US government spends for the military budget, bloated as it is. Assuming that you could remove just 10% of the retirees, it would mean saving some 150 billion dollars per year. But, in practice, much more than that if you take into account the health care costs. For instance, summing nursing care facilities and home care for the elderly, we are talking of something close to 300 billion dollars per year, and that does not include hospitalization costs. The potential savings are truly huge: hundreds of billions of dollars.

Of course, exterminating the elderly cannot be done using the same demonization techniques used in the past against the witches and the Jews. Old people are fathers and grandfathers and their offspring won’t normally like to see them burned at the stake or gassed in extermination chambers. But extermination takes many forms, and it is rarely explicitly proclaimed. After all, it never happened in history that you could find a sign with the words “extermination camp” at the gate of an extermination camp. During WWII. for instance, the Germans were told that the Jews were just being relocated, not that they were being exterminated. In other cases, the people being exterminated were glorified as heroes. So, what form could the extermination of old people take? It would be done using well-known propaganda techniques, the main one being to state the exact opposite of what is being done. In other words, when the idea is to kill some people, propaganda will convince everybody that it is done to do them a favor (do you remember the “humanitarian bombs” dropped on Serbia?)

In practice, the weak spot of the middle-class retirees is that they need medical assistance and that they cannot normally pay the skyrocketing costs on their personal saving. So, they could be gently removed from the state budget by degrading the public health care system while saying that it is being modified in order to protect them. A clever way of doing it would be to focus so much on curing a specific single disease that the result would be a decline of the care for the illnesses that mostly affect aged people: cardiovascular diseases and tumors. A parallel measure to intensify the effect would be to degrade the quality of the food available, making it become less nutritious and contaminated with all sorts of pollutants.This method would not affect the elites, who can pay for good health care and and good food, but it will hit directly those who live on pensions.

Now, let’s take a look at the current situation. In 2020 the average life expectancy in the US has declined by nearly 2% for a total of 600,000 extra deaths, most of them old people. So, we are talking of some 20 billion dollars saved just in terms of pensions. But it is much more than that considering the saving in health care costs. These numbers are not large in comparison to the US budget, but not peanuts, either. And what we are seeing is just the start of a trend.

“..suspended without pay in February..”

• Italian Court Sides With Nurse Wrongly Suspended For Refusing Covid-19 Jab (LSN)

A civil court has sided with a nurse who was suspended without pay after she refused the COVID-19 vaccine. The ruling was given by the Tribunal of Milan on September 16, following the appeal of the Italian nurse, who was not named. She had been suspended without pay in February because she refused to receive the jab in defiance of a vaccine mandate imposed by her employer. The tribunal called the suspension “illegitimate” and ordered the employer to pay the nurse her full wages with interest and arrears. The decision overturns previous court rulings for similar cases. It is the first time in Italy that a court of law has ruled in favor of an employee in a case of a suspension or a dismissal for failure to vaccinate.

The decision comes from one of Italy’s most authoritative courts and is considered particularly significant because it overturns precedents and enshrines in law the illegitimacy of dismissing or suspending employees without pay for failing to vaccinate. “This was one of the first cases of suspension of a healthcare worker,” stated Mauro Sandri, the nurse’s lawyer, in an interview on YouTube. Sandri compared the case to that of 5 nurses in a similar situation; they lost their appeal in May. “Everyone [in Italy] will remember the ruling in Belluno, when 5 nurses who were suspended by their employer launched an appeal and lost it,” he said. “The mainstream [media] amplified the outcome of that ruling by going so far as to say that it was pointless to appeal to suspensions imposed by employers.”

Sandri then recalled that the ruling in that case was “unfortunately emulated by other tribunals, including Modena and Verona” and that “a jurisprudence had been created, giving employers license to suspend their employees.” All of Sandri’s previous attempts to appeal such decisions had been unsuccessful. However, he sees that this new decision had overturned the trend. “This decision was overwhelmingly positive, as it established the illegitimate nature of the suspension,” he said. The nurse in question had been suspended since February and had not received any salary since that time. The court therefore ordered the employer to pay her salary for the full period in which she had not been compensated, with added interest, as Sandri pointed out. “The appeal aimed at obtaining her reinstatement in the workplace (…) So we requested that, as well as a full payment of her wages, with arrears.”

But the people who implemented it get to stay? How does that work?

• New Zealand Abandons Controversial ‘Zero COVID’ Policy (SN)

New Zealand has announced it is dropping its controversial ‘zero COVID’ policy after numerous critics pointed out that such an approach to eliminating the virus was impossible. Prime Minister Jacinda Ardern made the announcement earlier today during a press conference in which she acknowledged, “The return to zero has been extremely difficult.” “What we have called a long tail has been more like a tentacle that has been difficult to shake,” she added, noting that the delta variant of the virus forced a change in policy. Critics had repeatedly asked how the country expected to maintain a ‘zero COVID’ policy given the emergence of new variants of the virus and decreasing efficacy of the initial round of vaccinations.

However, with 48% of the population fully vaccinated, no return to normal is expected anytime soon given that Ardern has said 90% will need to be fully vaxxed before the lockdowns will end. Kiwis have faced continuous lockdown measures almost as brutal as their Aussie neighbors since the beginning of the pandemic. As we highlighted in August, Ardern mimicked Australia’s top public health official by telling citizens, “Don’t talk to your neighbors,” after the country went into full lockdown as a result of just a single COVID case being detected. Authorities also previously announced that they would put all coronavirus infectees and their close family members in “quarantine facilities” even if they refuse.

Where will it stop?

Well this is different! Mysterious team appears in Edinburgh to raise awareness… pic.twitter.com/QJ1fjHeQbb

— No More Lockdowns UK (@NMLockdownsUK) October 4, 2021

The differences within India are stunning.

• India To Pay $674 Compensation For Every Covid-19 Death (BBC)

India’s top court has approved the government’s decision to pay 50,000 rupees ($674; £498) as compensation for every death due to Covid-19. The Supreme Court’s order followed a petition by lawyers seeking compensation under India’s disaster management laws. India has officially recorded more than 447,000 Covid-19 deaths so far. However, experts believe that up to 10 times more people could have died in the pandemic. They have arrived at different estimates after examining excess deaths – a measure of how many more people are dying than would be expected compared to the previous few years. On Monday Justice MR Shah said the “next of kith and kin of the deceased person” shall be paid this compensation within a month of applying. This would be “over and above the amounts paid by the centre and state under various benevolent schemes”, he said.

The court added that the compensation should be paid within 30 days after a family submits an application. In June, petitioners sought the court’s intervention in paying compensation to the families of Covid-19 victims. They said since Covid-19 was “specially” notified as a disaster under India’s National Disaster Management Act, compensation should be paid to the victims. The 2005 law was enacted for efficient management of disasters, including preparation of mitigation strategies, capacity-building and compensation for lost lives, injuries and damaged properties. The law says monetary assistance of 400,000 rupees should be paid to family of people who have lost their lives in a disaster.

Kulldorff.

• Harvard Epidemiologist Censored by LinkedIn for Defending Healthcare Jobs (BI)

Now LinkedIn – owned by Microsoft – appears to have joined the censorship brigade, targeting probably many venues but the Brownstone Institute in particular. The timing is particularly awkward because of the potentially millions of people who could be fired from their positions in the coming weeks and months for non-compliance with Covid mandates. Brownstone has defended the rights of workers to choose against vaccination and in favor of natural immunity or exposure through normal living. The takedowns of our posts began last week when the venue took down a piece arguing against the politicization of disease. The post was put up and disappeared. This happened to everyone who attempted to post the piece. It was a magic disappearing act, clearly targeting the URL and content.

We thought we found a workaround by posting the link for mobile viewing but LinkedIn’s algorithms figured that one out quickly and took it down too. As with all such cases, the first impulse is to believe that there was something about that piece that the censors found objectionable, perhaps in tone or content. And that piece did have an edge about it. Surely it was just once. It won’t happen again, or so we hoped. Now we find a pattern. The famed Harvard epidemiologist Martin Kulldorff – one of three brave scientists who drafted the Great Barrington Declartion one year ago today – wrote a piece in defense of the nurses at a Harvard hospital who are refusing the vaccination. These nurses and others in the hospital had worked mightily and tirelessly for 21 months with daily exposure to SARS-CoV-2 and had thereby acquired natural immunity which all research has shown to be as good or better than the vaccine.

They do not need it. It is unscientific to the point of absurdity for these immunity mandates not to consider natural immunity, about which humanity has known for 2.5 millennia. “Hospitals are firing nurses and other staff with superior natural immunity while retaining those with weaker vaccine-induced immunity,” wrote Kulldorff. “By doing so, they are betraying their patients, increasing their risk for hospital-acquired infections…. If university hospitals cannot get the medical evidence right on the basic science of immunity, how can we trust them with any other aspects of our health?” LinkedIn at first accepted the article on its platform. It unfurled the post with image and excerpt. It achieved a very high reach with many likes and shares. This makes sense because so many people on this platform are either losing their own jobs or losing colleagues in every profession. Kulldorff was bravely coming to their defense.

Within the first hour of posting, the unfurled posts started disappearing. Kulldorff’s own posting on his LinkedIn page disappeared. So did the Brownstone post. Along with it, all shares were made to disappear too. This article – by one of the world’s leading scientists at one of the world’s most prestigious universities that defended workers and their jobs – was being torn down by a platform designed to assist people in their career advancement.

“..the timeline for when the virus was actually spreading in the wild would dramatically shift: from December 2019 to as early as May 2019..”

• New PCR Test Intelligence Suggests Covid-19 Virulent Earlier Than Thought (RM)

The coronavirus may have been spreading through Wuhan, China much earlier than previously thought, according to an analysis of Chinese procurement records by Internet 2.0, a company that specializes in digital forensics and intelligence analysis. According to a report released Monday, entitled “Procuring for a Pandemic: An Assessment of Hubei Province PCR Procurement Contracts,” there was a dramatic increase in the number of Polymerase Chain Reaction, or PCR, contracts inked by Hubei Province and institutions in and around Wuhan in the second half of 2019. [..] PCR tests are the gold standard for COVID-19 virus testing and if there was spike in the use of those tests in the Spring of 2019, as the report suggests, that could mean the timeline for when the virus was actually spreading in the wild would dramatically shift: from December 2019 to as early as May 2019.

Among other things, there was a dramatic increase in the total amount of money spent on these tests in and around Wuhan, in Hubei province, the report said. In 2015, institutions there spent about 19.1 million yuan ($2.9 million) on PCR tests. Two years later, in 2017, they spent about 29.1 million yuan and in 2018, institutions around Wuhan spent 36.7 million on these tests. But when analysts looked at the spending in 2019, the government contract value for PCR tests was higher than the previous two years combined: 67.4 million yuan. (The tests got more expensive, which also suggests they got pricer as demand went up, the report says.) A team of experts from the World Health Organization investigating the origins of the pandemic visited The Wuhan Institute of Virology back in June to see if it could link its research on coronaviruses with the pandemic.

WHO’s findings have been inconclusive, though the Internet 2.0 report notes that the institute was one of the biggest purchasers of PCR tests and equipment in the second half of 2019. The company’s analysis is based on data collected through bidcenter.com.cn, which tracks Chinese government contracts. According to the researchers, there were 52 contracts found in 2015, and about the same number in 2016. In 2019, though, institutions like the Wuhan University of Science and Technology, the Wuhan CDC, and Hubei CDC had secured 135 contracts for PCR tests. Nearly double the number of the previous two years combined.

The monthly breakdown of purchases offers clues, too. There was a significant increase in spending on PCR tests and equipment over the summer of 2019, starting in May, which was remarkably different from the spending patterns in previous years. “The full inventory of this catastrophe is still being compiled,” Robert Potter, one of the authors of the report, said in a written statement. “What is clear is that investigating the coverup of the virus still has some distance to go before it is fully understood. The data presented here gives us a strong indication that the outbreak started prior to December 2019, meaning the information gap and window for the emergence of the virus is larger than when we started this project.”

Are we measuring the right thing? This appears to suggest that those who had severe Covid are better protected. I doubt it.

• Antibodies Last Over A Year After Covid-19 Infection (JTN)

Most people who have been infected with SARS-CoV-2, the virus that causes COVID-19, will carry antibodies for at least a year, according to a recent peer-reviewed study. The European Journal of Immunology accepted a study on Sept. 24 from scientists at the Finnish Institute for Health and Welfare, who studied 1,292 subjects eight months after infection for the presence of antibodies. Their findings included 96% of subjects still carrying neutralizing antibodies and 66% with the nucleoprotein IgG antibody. After randomly selecting 367 subjects from the original cohort who were not yet vaccinated a year following infection, the scientists found that 89% of subjects still had neutralizing antibodies, and 36% with the IgG antibody.

Subjects who had experienced a severe SARS-CoV-2 infection had higher antibody levels, anywhere from two to seven times as many antibodies as those with mild infections at least 13 months after contracting the disease. While the antibodies provide lasting protection against the original SARS-CoV-2 virus, their neutralization efficiency against the Alpha, Beta, and Delta variants decreased over time. The neutralizing antibodies “were only slightly reduced” in the Alpha variant and “considerably declined” in the Beta variant. However, “over 80% of the subjects who had recovered from severe” SARS-CoV-2 infection still had neutralizing antibodies against the Delta variant a year after being infected.

Nature Medicine published a study in May that found “that neutralization level is highly predictive of immune protection” against SARS-CoV-2. A preliminary study, which is not yet peer-reviewed, found that antibodies decreased 10-fold just seven months after subjects received the second dose of the Pfizer COVID-19 vaccine.

The decisions are made by people who don’t understand what energy is.

• Europe’s Energy Crisis Presents A Real Danger (Lacalle)

This week the wholesale price of electricity has exceeded the psychological barrier of 200 euros per megawatt hour in most countries of the European Union. Although the daily price currently only affects 15% of the energy sold, since the rest is locked for almost twelve months since last winter at much lower prices, it is a sign of future risk. Thousands of contracts are going to have to be revised with huge price increases in the next three months when the locked contracts expire. The price of liquefied natural gas (LNG) has soared to $34/mmbtu delivered in December and January. In comparable energy terms it would be about $197 per barrel of oil equivalent, according to Morgan Stanley. Meanwhile, the price of natural gas (NBP) has risen more than 200% in 2021.

The price of CO2 emission rights has increased more than 1,000% since 2017, and more than 200% in 2021. This concept, which is a hidden tax for which the governments of the European Union are going to collect more than 21 billion euros in 2021, adds to the inflationary spike.These extraordinary tax revenues should be used to mitigate the price increases in consumer bills and avoid an energy crisis in Europe that will sink the recovery. Two key factors explain the rise in energy prices and in both there is a responsibility of governments: The forced closure of the economy is a key factor to understand the damage generated in the supply chains, and the prohibition of investment in gas resources and abandoning nuclear in Germany has led to a more volatile and expensive energy mix in peak demand periods.

This, coupled with a political decision to impose a volatile and intermittent energy mix has left Europe much more dependent and exposed to gas price fluctuations. Renewable energies work 20% of the time and when they do not work, the only guarantee of supply is to use natural gas, which tends to happen as Asia demand rises and when its price has skyrocketed. Of course, demand is a very important factor, but we cannot forget that, in natural gas, as in coal, there is no supply problem. There is, in fact, excess capacity. Under normal circumstances, the price of natural gas and CO2 would have moderated once the base effect dissipated -in June-, but we forget the disastrous impact of monetary and government interventionism. The rise in CO2 emission rights is directly the fault of the tax voracity of European governments, which have massively limited the supply of these rights so that the price rises.

Additionally, the increase of many goods and services is directly due to the massive money supply growth in 2020, well above the demand for money, generating inflation by political decree. I do not understand how the fiscal voracity of some governments blinds them to two important risks: an energy crisis that leaves businesses and families suffocated by a price increase caused by political decisions, and a massive reaction of the population against environmental policies when they see prices skyrocket due to planning errors (more volatile and intermittent energy mix and dependent on gas) and legislation (charging citizens with the full cost of environmental policies and making those who pollute pay, and those who do not, pay even more ).

15 years of WikiLeaks
Julian Assange: Why the world needs WikiLeaks (Within months of this talk, #Assange was under house arrest. He has been arbitrarily detained since 7 December 2010.)

Ron Johnson

The question all Americans should be asking: did Dr. Fauci and our federal health agencies’ policy prescriptions work?

700,000 dead, the human toll, the economic devastation, and trillions added to our debt. pic.twitter.com/PxdCW8Zbmg

— Senator Ron Johnson (@SenRonJohnson) October 5, 2021

.@SenRonJohnson says we do not have a FDA approved vaccine in America. The @US_FDA did a bait and switch with the vaccine approval. The vaccine available in Europe is approved but the @pfizer vaccine used in America only has emergency authorization use. pic.twitter.com/rr22iwmBPQ

— The Dirty Truth (Josh) (@AKA_RealDirty) October 5, 2021

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Debt Rattle January 9 2017

Jan 092017

January 9, 2017 Posted by Raúl Ilargi Meijer at 10:34 am Finance Tagged with: bull market, chicken, China, corruption, fascism, Greece, Grillo, iron, Le Pen, Trump, VW 7 Responses »

AFP Photo/Johannes EISELE Giant Trump Chicken

• Locating Fascism on the Home Map (Ford)

• ‘The Bull Market Is In Its Final Inning’ (CNBC)

• Chinese Warns Trump: End One China Policy And China Will Take Revenge (R.)

• It’s Gonna Be Huge: China Factory Hatches Giant Trump Chickens (AFP)

• How Meaningful Will China “Opening Up” Markets To Foreigners Be? (BBG)

• China Tightens Rules After Anti-Corruption Staff Caught Up In Graft (R.)

• China’s Pyrrhic Growth Victory Spurs 2017 Shift To Contain Risks (BBG)

• The Rise, Fall and Comeback Of China’s Economy Over The Last 800 Years (BI)

• Australia Predicts Dramatic Fall In Iron Ore Prices (BBC)

• FBI Arrests Volkswagen Exec on Conspiracy Charges in Emissions Scandal (NYT)

• UK Motorists Launch Class-Action Suit Against VW (G.)

• Le Pen: I’ll Come To Brussels And Dismantle France’s Relationship With EU (EUK)

• Beppe Grillo Calls For Five Star Movement Vote On Quitting Farage Bloc (G.)

• New Cold Snap, Heavy Snowfall Causes Problems Across Greece (Kath.)

Hear hear!

• Locating Fascism on the Home Map (Ford)

In decadence and decline, the U,S. has produced two strong strains of fascism that now vie for supremacy. The First Black President, now outgoing, represents the “cosmopolitan, global obsessed” variety of fascist. Donald Trump hails from an older fascist strain, “crude and petty, too ugly for global prime time.” At this stage in history, the two corporate parties seem incapable of producing anything other than fascists of one kind or the other.

Barack Obama was a savior – of a drowning ruling class. Under his administration, Wall Street rose from near-death to new heights of speculative frenzy, awash in capital brutally extracted from the vanishing assets and past and future earnings of the vast majority of the population, or gifted in the form of trillions in free money at corporate-only Federal Reserve windows. The Big Casino, reduced to a rubble of its own contradictions in 2008, ushered in the New Year just shy of the once-fantastical 20,000 mark. Analysts credited Donald Trump’s victory for the bankers’ bacchanal, but it was Obama who made the party possible by overseeing the restructuring of the U.S. economy to accommodate and encourage the hyper-consolidation of capital – another way to describe the deliberate deepening of economic (and political) inequality. Having accomplished the mission assigned him by Wall Street in return for record-breaking contributions to his first campaign, Obama is said to be angling for a hot-money squat in Silicon Valley, the super-rich sector that was most supportive of his presidency.

Meanwhile, Hillary Clinton is melting quicker than the Wicked Witch of the West, principally due to the failure of traditionally Democratic working (and out of work) people of all races to turn out on November 8 – a perfectly understandable response to a party and a system that offers them absolutely nothing but grief, in ever quickening increments. The merciless downsizing of the American worker is a central element of Obama’s legacy. Real wages had been frozen or declining for decades. However, economic restructuring in the Age of Obama demanded that millions of workers be crushed all the way through the floor to a lower level of hell: temporary, contract, not-really-a-job, part-time “gig” employment. If the 1930s squatter shanty-towns called “Hoovervilles” were testaments to President Herbert Hoover’s economic policies, then the maddeningly precarious, no guaranteed hours, no benefits, zero job security, fraction of a shift, arbitrarily scheduled employment of today should be called ObamaJobs. A new study by economists at Princeton and Harvard universities shows that an astounding 94% of the 10 million jobs created during the First Black President’s two terms in office were ObamaJobs.

“Risk has been priced out of the market..”

• ‘The Bull Market Is In Its Final Inning’ (CNBC)

As investors await the Dow Jones 20,000 with baited breath, one widely followed chart watcher believes the current market rally is actually on its last legs. On Friday, blue chip shares in the Dow Industrial Average flirted with the psychologically charged 20,000 level, which have largely been driven higher by anticipation over President-elect Donald Trump’s business-friendly policies. Yet a few observers think the party is nearly over, and the punch bowl is about to run dry. “Risk has been priced out of the market,” said Sven Henrick of NorthmanTrader.com on CNBC’s “Futures Now.” Henrich, who is known online as the Northman Trader, said that despite the abundance of optimism on the part of investors, technical indicators could be pointing to some near-term pain.

According to the Northman’s chartwork, every time the S&P 500 Index has hit new highs, it eventually retreats back towards its 25-day moving average line, which would translate to a 4% pullback from current levels. The S&P 500 has rallied 6% since the election, and hit an intraday record high on Friday. “I would expect that at some point there would be a buying opportunity for people who may want to invest in this market,” said Henrich. “But if this line breaks, we may see significantly more downside that we’ve seen in previous corrections as well.” What’s more, Henrich also believes that the S&P 500 has continued to trade in a “bearish wedge pattern” that began just after the end of the last recession.

The wedge pattern Henrich speaks of consists of two trend lines: One that runs along the S&P’s highs and a second that runs along its lows, that look to meet sometime in 2017. It is at that point that Henrich believes the rally will have run its course, and a downside will soon follow. On a fundamental basis, the Northman Trader is troubled by “record debt levels” that the global governments have incurred. “In 2016, the U.S. government ran a deficit of over $600 billion,” explained Henrich.” “If we now add tax cuts and stimulus spending, you’re either going to have to cut a significant amount of programs somewhere, or you’re going to end up with an even larger deficit.”

For domestic use only?

• Chinese Warns Trump: End One China Policy And China Will Take Revenge (R.)

State-run Chinese tabloid Global Times warned U.S. President-elect Donald Trump that China would “take revenge” if he reneged on the one-China policy, only hours after Taiwan’s president made a controversial stopover in Houston. Taiwanese President Tsai Ing-wen met senior U.S. Republican lawmakers during her stopover in Houston on Sunday en route to Central America, where she will visit Honduras, Nicaragua, Guatemala and El Salvador. Beijing had asked Washington not to allow Tsai to enter the United States and that she not have any formal government meetings under the one China policy. A photograph tweeted by Texas Governor Greg Abbott shows him meeting Tsai, with a small table between them adorned with the U.S., Texas and Taiwanese flags. Tsai also met Texas Senator Ted Cruz.

“Sticking to (the one China) principle is not a capricious request by China upon U.S. presidents, but an obligation of U.S. presidents to maintain China-U.S. relations and respect the existing order of the Asia-Pacific,” said the Global Times editorial on Sunday. The influential tabloid is published by the ruling Communist Party’s official People’s Daily. Trump triggered protests from Beijing last month by accepting a congratulatory telephone call from Tsai and questioning Washington’s commitment to China’s position that Taiwan is part of one China. “If Trump reneges on the one-China policy after taking office, the Chinese people will demand the government to take revenge. There is no room for bargaining,” said the Global Times.

“..mimic his signature hand gestures with their tiny wings.”

• It’s Gonna Be Huge: China Factory Hatches Giant Trump Chickens (AFP)

A Chinese factory is hatching giant inflatable chickens resembling Donald Trump to usher in the Year of the Rooster. The five-metre (16-foot) fowls sport the distinctive golden mane of the US president-elect and mimic his signature hand gestures with their tiny wings. Cartoon figures of animals from the Chinese zodiac are ubiquitous around Chinese New Year at the end of this month. The balloon factory is selling its presidential birds for as much as 14,400 yuan ($2,080) on Chinese shopping site Taobao for a 10-metre version.

A golden mane and tiny wings that mimic his hand gestures – the resemblence of inflatable chickens produced for the Chinese New Year to US President-elect is unmistakable (AFP Photo/Johannes EISELE)

“I saw his image on the news and he has a lot of personality, and since Year of the Rooster is coming up I mixed these two elements together to make a Chinese chicken,” factory owner Wei Qing told AFP. “It is so funny, so we designed it and tried to sell it and it turned out to be popular.” The cartoon balloon appeared to be based on a sculpture designed by US artist Casey Latiolais, which was unveiled at a shopping mall last month in Taiyuan, capital of the northern province of Shanxi. Wei said he was not aware that the American designer had created the original, but added that “there are some differences in the facial expression. And that one is glass. Ours is inflatable.”

“If we do get any reforms this year, they are going to be Potemkin reforms. The veneer will look like they are moving to a market economy, and the reality will be anything but.”

• How Meaningful Will China “Opening Up” Markets To Foreigners Be? (BBG)

China’s recent policy of opening its markets to foreigners is expected to continue this year, but there are questions about how meaningful the change will be amid a clampdown on money leaving the country. While China loosened restrictions on its interbank bond market and relaxed rules for offshore investors trading stocks, it also saw $762 billion head overseas in the first 11 months of last year, according to Bloomberg Intelligence estimates, as investors sought safety in foreign assets. That helped push the yuan down 6.5% against the dollar in 2016, the most since 1994. Seeking to stem the flow, mainland authorities tightened rules that contributed to MSCI Inc. refusing to add Chinese-listed shares to its global indexes.

China’s regulators have indicated that this year foreigners might be allowed to access commodity futures and bond derivatives, while MSCI will again consider adding mainland stocks. But concerns remain about how open China’s markets will be, especially on the issue of taking assets out of the country. The contrast highlights the tension authorities face between inviting more investment while keeping control of the financial sector. “I’d describe China’s strategy as a pipeline strategy. Essentially what they do is to create various pipelines of inflows and outflows,” said John Greenwood, London-based chief economist at Invesco Asset Management. “The problem is the flows are always in the opposite direction of what they want.”

Among last year’s steps, Beijing lifted almost all quotas on China’s interbank bond market and scrapped some constraints under the Qualified Foreign Institutional Investor program, which governs how offshore funds invest in mainland markets. The Shenzhen-Hong Kong stock exchange link, the second between the mainland and the former British colony, opened in December. Expectations then rose as an official with the People’s Bank of China said the central bank is committed to further opening the interbank market, including giving foreign investors access to foreign-exchange and interest-rate derivatives to hedge risks, and expanding trading hours. Even as China opens up to incoming funds, it has been clamping down on outflows.

Officials have banned the use of friends’ currency quotas, made it more difficult to buy insurance policies in Hong Kong and prepared restrictions on overseas acquisitions by Chinese companies. Grants of new quotas for domestic fund managers to invest overseas were frozen, according to data compiled by Bloomberg. The tightening of outflow rules makes it hard for some to say that the country is fully embracing financial reform. “We have already seen in China’s case, markets only work when they go up. You are not allowed to go down,” said Michael Every at Rabobank in Hong Kong. “If we do get any reforms this year, they are going to be Potemkin reforms. The veneer will look like they are moving to a market economy, and the reality will be anything but.”

“500,000-plus corruption investigators..” Who are corrupt.

• China Tightens Rules After Anti-Corruption Staff Caught Up In Graft (R.)

China’s top anti-corruption watchdog has tightened supervision of its 500,000-plus corruption investigators, after some of its own staff were caught in graft probes. The Central Commission for Discipline Inspection (CCDI) said in a statement on its website late on Sunday that a new regulation would be applied to procedures such as evidence collection and case reviews, without providing further details. “Trust cannot replace supervision,” the CCDI said in the statement, released after it held an annual 3-day meeting. “We must make sure the power granted by the (Communist) Party and the people is not abused,” it said.

State newspaper the China Daily, which did not indicate its sources, said the new regulation would set clear standards on how to handle corruption tips, how to handle ill-gotten assets, and would encourage audio and video recordings to be made throughout interrogations. More than 7,900 disciplinary officials have been punished for wrongdoing since 2012, the newspaper said, citing CCDI figures. Of those, 17 were CCDI staffers who were put under investigation for graft, it said. On Friday, state news agency Xinhua quoted Chinese President Xi Jinping as saying that the battle against corruption “must go deeper”, and called for the Communist Party to be governed “systematically, creatively and efficiently”.

Stuck.

• China’s Pyrrhic Growth Victory Spurs 2017 Shift To Contain Risks (BBG)

As China’s top leaders tallied the cost of another year of debt-fueled growth at a December meeting, the imperative for stability as a leadership reshuffle loomed later this year prompted an unexpected conclusion. The price was too high, the leaders agreed, according to a person familiar with the situation. The buildup of debt used to fuel smokestack industries from steel to cement had helped win the short-term battle for growth, but the triumph itself undermined the foundations of long-term expansion, the leaders decided, according to the person, who asked not to be named because the meeting was private. What followed was an order to central and local government officials that if they are forced to choose this year, stability must be the priority while everything else, including the growth target and economic reform, is secondary, said another four people familiar with the situation.

Other concerns aired at the meeting that contributed to the policy shift were the short-term risk of a confrontation with the U.S. under President-elect Donald Trump over trade or Taiwan, and longer-term challenges including how to spur the innovation needed to prevent economic stagnation as well as cleaning up toxic air that enrages and poisons citizens, said the person. Left unsaid was that economic growth underpins the legitimacy of Communist Party rule. “China’s reaching the point where it has to pick its poison and giving up a half%age point of growth would be far less politically damaging than instability in the bond or currency markets,” said David Loevinger, a former China specialist at the U.S. Treasury and now an analyst at fund manager TCW in Los Angeles. “Looking past the Party Congress later in the year, President Xi Jinping may realize that unlike his predecessor, Hu Jintao, he can’t kick the can to his successor, even more so if he plans on extending his term” beyond 2022.

At the December meeting, officials expressed alarm over the nation’s rapid accumulation of total debt, with some present noting that other nations have experienced crises after allowing debt to climb to about 300% of gross domestic product, the person said. China’s credit boom may have pushed overall debt at the end of 2016 to 265% of GDP. Also aired at the meeting was the risk that China falls into the so-called Thucydides trap, a theory attributed to the eponymous Greek philosopher that says a rising power will clash with an established force. So menacing is the array of economic and political challenges confronting the nation that some leaders at the meeting said there’s no prospect for yuan appreciation against the dollar until at least 2020, said the person. “Tapping the brakes may help avoid the economy skidding off the road,” said Frederic Neumann at HSBC in Hong Kong.

Interesting point of view.

• The Rise, Fall and Comeback Of China’s Economy Over The Last 800 Years (BI)

China’s economy led its European counterpart by leaps and bounds at the start of the Renaissance. China was so far ahead, in fact, that economic historian Eric L. Jones once argued that the Chinese empire “came within a hair’s breadth of industrializing in the fourteenth century.” At the start of the 15th century, China already had the compass, movable type print, and excellent naval capacity. In fact, Chinese Admiral Zheng He commanded expeditions to Southeast Asia, South Asia, Western Asia, and East Africa from about 1405-1433 – about a century before the Portuguese reached India. He also had ships several times the length of Christopher Columbus’ Santa Maria, the largest of Columbus’ three ships that crossed the Atlantic.

Still, it’s hard to understand the magnitude of the shift China’s economic fortunes have seen just with historical anecdotes. And so, in a recent note to clients, Macquarie Research’s Viktor Shvets included two fascinating charts showing the changes China saw over the last 800 years, which we included below. The first chart shows the estimated percent share of a given country’s economy as a part of the overall world economy. In the 15th and 16th centuries, China was about 25-30% of the global economy, but come 1950-1970, after the destruction of World War II and under the rule of Mao Zedong, it was under 5%. Today, its economy is about 17% of the global economy – roughly the same as the US.

The second chart compares GDP per capita in China, Japan, and the US to the British GDP per capita measured in 1990 US dollars. In this case, the British GDP per capita in each year is 100, so if a number from China, Japan, or the US is above 100, then its GDP per capita is greater than in Britain, and if the number falls below 100, per capita output is lower than that in Britain. As Shvets writes, on a per capita basis, China was the wealthiest part of the world in the 1200-1300s — aside from Italy. Even as late as the 1600s it was roughly on par with the Brits. However, after that, the GDP per capita relative to Britain declines all the way up to the 1970s, when it was below 10% of the British standard of living. Around 1990, it starts to pick up again, but it has yet to recover to levels seen in 1200-1600.

And what does this say about China?

• Australia Predicts Dramatic Fall In Iron Ore Prices (BBC)

Shares in Australian mining companies have fallen after the government forecasted a dramatic decline in iron ore prices. The government forecast an iron ore price of $46.70 a tonne by 2018, almost half the current level of $80. The current price is supported by resurgent demand from China. But the Department of Industry, Innovation and Science said that demand was unlikely to continue over the coming years. The department also lowered its forecast for iron ore exports by 2% to 832.2 million tonnes for the fiscal year 2016-17. Australia is the world’s biggest supplier of iron ore and shares in the country’s main mining companies fell after the report was released. Hardest hit was Fortescue Metals which fell more than 3% in early trade, while commodity giants BHP Billiton and Rio Tinto also saw their shares prices drop. In its forecast early last year, the department had predicted an iron ore price of $44.10 per tonne, but an increase in Chinese demand spurred the price to above $80.

This guy’s been lying outright to US authorities.

• FBI Arrests Volkswagen Exec on Conspiracy Charges in Emissions Scandal (NYT)

The Federal Bureau of Investigation has arrested a Volkswagen executive who faces charges of conspiracy to defraud the United States, two people with knowledge of the arrest said on Sunday, marking an escalation of the criminal investigation into the automaker’s diesel emissions cheating scandal. Oliver Schmidt, who led Volkswagen’s regulatory compliance office in the United States from 2014 to March 2015, was arrested on Saturday by investigators in Florida and is expected to be arraigned on Monday in Detroit, said the two people, a law enforcement official and someone familiar with the case. [..] In a statement, Jeannine Ginivan, a spokeswoman for Volkswagen, said that the automaker “continues to cooperate with the Department of Justice” but that “it would not be appropriate to comment on any ongoing investigations or to discuss personnel matters.”

Lawsuits filed against Volkswagen by the New York and Massachusetts state attorneys general accused Mr. Schmidt of playing an important role in Volkswagen’s efforts to conceal its emissions cheating from United States regulators. Starting in late 2014, Mr. Schmidt and other Volkswagen officials repeatedly cited false technical explanations for the high emissions levels from Volkswagen vehicles, the state attorneys general said. In 2015, Mr. Schmidt acknowledged the existence of a so-called defeat device that allowed Volkswagen cars to cheat emissions tests. Volkswagen eventually said that it had fitted 11 million diesel cars worldwide with illegal software that made the vehicles capable of defeating pollution tests. [..] James Liang, a former Volkswagen engineer who worked for the company in California, pleaded guilty in September to charges that included conspiracy to defraud the federal government and violating the Clean Air Act. But Mr. Schmidt’s arrest brings the investigation into the executive ranks.

Settling the UK alone could cost VW £3.6 billion.

• UK Motorists Launch Class-Action Suit Against VW (G.)

Thousands of British motorists have launched a lawsuit against Volkswagen over the “dieselgate” emissions scandal, in a claim that could end up costing the carmaker billions of pounds. The group of 10,000 VW owners has filed a class action lawsuit against the German car firm, seeking £30m, or £3,000 each. If VW ends up having to pay the amount to each one of the 1.2 million people in the UK who own affected cars, including its Skoda, Audi and Seat marques, it would cost the company around £3.6bn.The German firm has yet to reach a settlement with British and European owners affected by the scandal, in which the company admitted using “defeat devices” to cheat emissions tests, making its cars appears greener than they were.

It has not compensated British owners despite reaching a £15bn settlement with 500,000 US drivers, offering instead to fix affected vehicles. The class action suit, which is being led by law firm Harcus Sinclair, is expected to claim that drivers should be compensated because they paid extra for what they thought were clean diesel cars. In fact, the claimants will allege, the cars emitted far higher levels of NOx – a mixture of pollutants nitrogen oxide and nitrogen dioxide – than stated. Damon Parker, head of litigation at Harcus Sinclair, told the Daily Mail that claimants were “angry and believe that VW might get away with it”. “They feel that they have been left with no choice but to take legal action,” Parker said. “We have paved the way for consumers who trusted but were let down by VW, Audi, Seat and Skoda to seek redress through our courts.

My guess is pollsters and media will get this as wrong as they got Brexit and Trump.

• Le Pen: I’ll Come To Brussels And Dismantle France’s Relationship With EU (EUK)

Marine Le Pen announced her first foreign visit would be to Brussels to dismantle France’s relationship with the EU if elected president later this year. The National Front leader has been a long-time critic of the EU and has promised to push back the sprawling European superstate and take back sovereignty to France. The 48-year-old said: “I would go to Brussels to immediately launch negotiations allowing me to give back to the French people their sovereignty.” The right-wing leader attacked the faltering euro currency as one of the root problems of the EU and described her main economic proposals as “economic patriotism, intelligent protectionism and a return to monetary independence”. She added: “The euro is a major obstacle to the development of our economy.”

Le Pen mooted that she was in favour of maintaining a form of common currency mechanism between France and the EU to help prevent sharp currency fluctuations. Recent opinion polls predicted that Le Pen would finish second in April’s first round of voting – putting her through to the next round in a run-off against Les Repubicain’s François Fillon. If pollsters are correct, France would be guaranteed a right-wing leader after five years of left-wing leadership from Francois Hollande.

Farage got his price, Grillo still has nothing. Weird to ally himself with Verhofstadt, but it’s how Brussels is set up: you either force yourself into some group or you don’t count.

• Beppe Grillo Calls For Five Star Movement Vote On Quitting Farage Bloc (G.)

The founder of Italy’s populist Five Star Movement (M5S) has asked members to vote on splitting from a Eurosceptic bloc of MEPs co-chaired by Nigel Farage. Beppe Grillo, a comedian turned politician, said in a post on his blog that since Farage had led Ukip to Britain voting to leave the EU, the two parties no longer shared common goals and he recommended leaving the Europe of Freedom and Direct Democracy (EFDD). “Recent events in Europe, such as Brexit, have led us to reconsider the nature of the EFDD group,” Grillo wrote. “With the extraordinary success of the leave campaign, Ukip achieved its political objective: to leave the EU. “Let’s discuss the concrete facts: Farage has already abandoned the leadership of his party and British MEPs will leave the European parliament in the next legislature. Until then, our British colleagues will be focused on developing the choices that will determine the UK’s political future.”

Grillo and Farage forged an alliance over lunch in Brussels after 2014’s European elections, in which Ukip took the largest share of the vote in Britain and M5S came second in Italy after winning 17 seats. Both said at the time that the group was aimed at “restoring freedom and national democracy”, with Farage adding: “Expect us to fight the good fight to take back control of our countries’ destinies.” In a move that would see his party mesh with European liberals, Grillo has called an online referendum, scheduled for Sunday and Monday, on breaking away and instead forming a new group with the Alliance of Liberals and Democrats for Europe (ALDE), led by the former Belgian prime minister, Guy Verhofstadt, who is also the EU’s chief Brexit negotiator. Grillo has long called for a referendum on Italy’s membership of the euro currency, but not on Italy leaving the EU.

With ALDE’s 68 MEPs, the alliance could become the “third political force in the European parliament”, Grillo wrote, while pointing to the fact that his party had only voted alongside Ukip about 20% of the time within the past few years. He said the two shared values linked to “direct democracy, transparency, freedom and honesty”. “With our vote we can make a difference and influence the result of many important decisions to counter the European establishment,” Grillo added. Farage said in a statement: “In political terms it would be completely illogical for Five Star to join the most Euro fanatic group in the European parliament. The ALDE group doesn’t support referenda or the basic principle of direct democracy. ALDE are also the loudest voice for a EU army. I suspect if Five Star joins ALDE it’s support will not last long.” A Ukip spokesman said: “Both Ukip and Five Star are free to choose to stay or quit a political relationship. While it’s interesting that some Five Star MEPs adamantly wish to stay in the EFDD group, as adults we wish them all the best whatever they do.”

The scandal spreads and deepens. Tens of millions have been handed to NGOs to prepare for winter, and they simply haven’t done it. While those of us that could make it happen don’t have the money. People have to die first?

• New Cold Snap, Heavy Snowfall Causes Problems Across Greece (Kath.)

A new cold snap brought snowfall to many parts of the country, leaving the Sporades islands of Alonissos and Skopelos without a ferry connection to the mainland and the Aegean islands of Lesvos and Chios struggling to care for hundreds of migrants amid freezing temperatures. Schools remained closed in many parts of the country due to heavy snowfall, including in the northern suburbs of Athens. According to meteorologists, the bad weather is set to continue through Wednesday. From Monday evening, the cold snap is forecast to spread to eastern Macedonia, Thrace, Halkidiki, the northern Aegean, the Sporades and across Crete. Storms are also likely at sea.

Moria camp, Lesbos, Jan 7

Temperatures are set to drop to -16 degrees Celsius in western Macedonia. The icy conditions left many households in the Thessaloniki region without water as pipes froze or broke. Most schools in the region were to remain closed on Monday due to heavy snowfall and low temperatures. The cold snap has made road travel risky in many parts of the country with motorists advised to fit their cars with anti-skid chains in northern areas.

Moria camp, Lesbos, Jan 7

Debt Rattle May 24 2016

May 242016

May 24, 2016 Posted by Raúl Ilargi Meijer at 9:40 am Finance Tagged with: bailout, China, debt, derivatives, Deutsche, Greece, iron, NIRP, refugees, SOE, yen, yuan Comments Off

Lewis Hine A heavy load for an old woman. Lafayette Street below Astor Place, NYC 1912

• ‘Massive Bailout’ Needed in Debt-Saddled China: Charlene Chu (BBG)

• SOE Debt Could Easily Overwhelm China’s Banking System (Abc.au)

• China Takes Back Control Over Yuan (WSJ)

• Negative Rates Prompt Japan Banks to Opt Out Via Derivatives (BBG)

• Iron Ore Price Falls 27% In Past Month (BI)

• Deutsche Bank Ratings Cut by Moody’s (BBG)

• Greece Is Never Going To Grow Its Way Out Of Debt (Coppola)

• Austerity Means Privatizing Everything We Own (G.)

• US Court Opens Door Over Libor Claims (FT)

• Italy Helps Rescue 2,600 Migrants From Sea In 24 Hours (R.)

• Greece Starts Clearing Makeshift Refugee Camp On Border (R.)

Selling vehicles to vehicles: “The WMPs [wealth management product] used to be predominantly sold to the public, but now they’re increasingly being sold to banks and other WMPs.”

• ‘Massive Bailout’ Needed in Debt-Saddled China: Charlene Chu (BBG)

Charlene Chu, a banking analyst who made her name warning of the risks from China’s credit binge, said a bailout in the trillions of dollars is needed to tackle the bad-debt burden dragging down the nation’s economy. Speaking eight days after a Communist Party newspaper highlighted dangers from the build-up of debt, Chu, a partner at Autonomous Research, said she was yet to be convinced the government is serious about deleveraging and eliminating industry overcapacity. She also argued that lenders’ off-balance-sheet portfolios of wealth-management products are the biggest immediate threat to the nation’s financial system, with similarities to Western bank exposures in 2008 that helped to trigger a global meltdown.

The former Fitch Ratings analyst uses a top-down approach to calculating China’s bad-debt levels as the credit to GDP ratio worsens, requiring more credit to generate each unit of GDP. She’s on the bearish side of the debate about the outlook for China and has sounded warnings since the nation’s credit binge began in 2008. “China’s debt problems are large and severe, but in some respects a slow burn. Over the near term, we think the biggest risk is banks’ WMP [wealth management product] portfolios. The stock of Chinese banks’ off-balance-sheet WMPs grew 73% last year. There is nothing in the Chinese economy that supports a 73% growth rate of anything at the moment.

Regardless of all of the headlines and announcements about the authorities cracking down on WMPs, they have done very little, really, and issuance continues to accelerate. “We call off-balance-sheet WMPs a hidden second balance sheet because that’s really what it is – it’s a hidden pool of liabilities and assets. In this way, it’s similar to the Special Investment Vehicles and conduits that the Western banks had in 2008, which nobody paid attention to until everything fell apart and they had to be incorporated on-balance-sheet. “The mid-tier lenders is where these second balance sheets are very large. China Merchants Bank is a good example. Their second balance sheet is close to 40% of their on-balance-sheet liabilities. Enormous.”

“Although contributing to less than one-third of economic output and employment, SOEs take up nearly half of bank lending..”

• SOE Debt Could Easily Overwhelm China’s Banking System (Abc.au)

Chinese banks are looking down the barrel of a staggering RMB 8 trillion – or $1.7 trillion – worth of losses according to the French investment bank Societe Generale. Put another way, 60% of capital in China’s banks is at risk as authorities start the delicate and dangerous process of reining in the debt-bloated and unprofitable state-owned enterprise (SOE) sector. Disturbingly though, debt is not only not shrinking, it is accelerating, making the eventual reckoning far worse. China’s overall non-financial debt grew by 15.2% in 2015 to RMB 167 trillion ($35 trillion) or almost 250% of GDP. That is up from 230% of GDP the year before and the 130% it was eight years ago before the global financial crisis hit.

The problem is largely centred on China’s 150,000 or so SOEs, which suck-up an entirely disproportionate amount of the nation’s capital. “Although contributing to less than one-third of economic output and employment, SOEs take up nearly half of bank lending (RMB 37 trillion) and more than 80% of corporate bond financing (RMB 9.5 trillion),” Societe Generale found. “While the inefficiency of SOEs is gradually dragging down economic growth, recognising even a small share of SOEs’ non-performing debt would easily overwhelm the financial system.” Despite their moribund financial performance, the SOEs still enjoy a considerable advantage in access to funding through the banking system than the private sector.

“To put things into perspective, a quarter of SOEs’ loans and bonds are equivalent to the entire capital base of commercial banks plus their loan-loss reserves, equivalent to 23% of GDP,” Societe Generale’s China economist Wei Yao said. On the bank’s figures, if just 3% of loans to SOEs sour, commercial banks’ non-performing loans would double.

Wanting to control the yuan exchange rate is a threat to reserves.

• China Takes Back Control Over Yuan (WSJ)

Behind closed doors in March, some of China’s most prominent economists and bankers bluntly asked the People’s Bank of China to stop fighting the financial markets and let the value of the nation’s currency fall. They got nowhere. “The primary task is to maintain stability,” said one central-bank official, according to previously undisclosed minutes of the meeting reviewed by The Wall Street Journal. The meeting left little doubt China’s top leaders have lost interest in a major policy shift announced in a surprise move just nine months ago. In August 2015, the PBOC said it would make the yuan’s value more market-based, an important step in liberalizing the world’s second-largest economy.

In reality, though, the yuan’s daily exchange rate is now back under tight government control, according to meeting minutes that detail private deliberations and interviews with Chinese officials and advisers who spoke with The Wall Street Journal about the country’s currency policy. On Jan. 4, the central bank behind closed doors ditched the market-based mechanism, according to people close to the PBOC. The central bank hasn’t announced the reversal, but officials have essentially returned to the old way of adjusting the yuan’s daily value higher or lower based on whatever suits Beijing best. The flip-flop is a sign of policy makers’ deepening wariness about how much money is fleeing China, a problem driven by its slowing economy.

For now, at least, officials believe the benefits of freeing the yuan are outnumbered by the number of threats. Re-emphasizing the yuan’s stability would also bring a sigh of relief to trading partners who worried a weaker currency would boost Chinese exports at the expense of those produced elsewhere. Freeing the yuan, the biggest overhaul of China’s currency policy in a decade, was meant to empower consumers and help invigorate the economy. The negative reaction, from financial markets world-wide and Chinese who sped their efforts to take money out of the country, was so jarring that the top leadership, headed by President Xi Jinping, began to have second thoughts.

At a heavily guarded conclave of senior Communist Party officials in December, Mr. Xi called China’s markets and regulatory system “immature” and said “the majority” of party officials hadn’t done enough to guide the economy toward more sustainable growth, according to people who attended the meeting. To the central bank, there was only one possible interpretation: Step on the brakes.

Turns out, it can still get worse.

• Negative Rates Prompt Japan Banks to Opt Out Via Derivatives (BBG)

Japanese banks reluctant to pay for the privilege of lending are opting out by using derivatives. The options set a floor on rates used to determine interest on loans, and the holder will be paid if the rates fall below that level, according to Aozora Bank and Tokyo Star Bank. The benchmark three-month Tokyo interbank offered rate has plunged to a record low of 6 basis points since the Bank of Japan announced it would start charging fees on some lenders’ reserves in January. Options with floors at zero% or minus rates have been traded recently, according to Aozora Bank. “There’s a need to hedge against money-losing lending that could happen if the Tibor falls to negative levels,” said Tetsuji Matsuka, the head of the ALM planning treasury department at Tokyo Star Bank.

“We think demand will increase” for such products, he said. Japanese banks are getting hurt as the negative-rate policy compresses their lending margins, with the top-three firms including Mitsubishi UFJ Financial forecasting this month that net income will fall a combined 5.2% in the year started April 1. The BOJ’s radical stimulus has already dragged yields on more than 70% of Japanese government bonds to below zero, meaning that investors will have to effectively pay a fee to hold such debt to maturity. In the yen London interbank offered rate market, where some rates are already below zero, options have been traded with floors as low as minus 1%, according to Nobuyuki Takahashi, the general manager of the derivatives sales division at Aozora Bank.

The three-month yen Libor was at minus 0.02% on Friday. Companies that borrow at floating rates may also be able to use floor options to ensure that interest-rate swaps they use to hedge against rising rates don’t end up costing them due to negative rates, Takahashi said. Actual trades of such derivatives are still not that common because the contracts are expensive to buy now, he said. “It will be hard to price these options unless we get more liquidity,” said Tateo Komatsu, a deputy general manager of global markets at Sumitomo Mitsui Trust Bank Ltd. “It will take time for the market to get used to minus rates.”

Roller coaster in a casino.

• Iron Ore Price Falls 27% In Past Month (BI)

The iron ore price is imploding. Following the ugly lead provided by Chinese futures on Monday, the spot iron ore price followed suit, suffering one of the largest declines seen in years. According to Metal Bulletin, the spot price for benchmark 62% fines fell by 6.69%, or $3.67, to $51.22 a tonne, leaving it down 27.3% from the multi-year peak of $70.46 a tonne struck on April 21. The decline was the third-largest in percentage terms in the past two years, and left the price at the lowest level seen since March 3 this year. The losses in physical and futures markets followed news that Chinese iron ore port inventories swelled to over 100 million tonnes last week, leaving them at the highest level seen since March last year.

That followed the revelation that Chinese crude steel output contracted in April after hitting a record high in March, declining marginally according to figures released by the China Iron and Steel Association (CISA). Given the increasing correlated relationship between the two, it’s also clear that an unwind of speculative positioning in Chinese iron ore futures is also impacting prices in the physical iron ore market. After watching prices in many bulk commodity futures rally more than 50% in less than two months, regulators at both the Dalian Commodities Exchange and Shanghai Futures Exchange introduced measures in recent weeks to discourage excessive levels of speculation in these markets.

Slow death?!

• Deutsche Bank Ratings Cut by Moody’s (BBG)

Deutsche Bank had its credit rating cut by Moody’s Investors Service, which said the German lender faces mounting challenges in carrying out its turnaround. The bank’s senior unsecured debt rating was lowered to Baa2 from Baa1, Moody’s said Monday in a statement. That left the grade two levels above junk. The firm’s long-term deposit rating fell to A3 from A2. “Deutsche Bank’s performance over the last several quarters has been weak, and substantial operating headwinds, including continuing low interest rates and macroeconomic uncertainty, will challenge the firm,” Moody’s said in the statement. CEO John Cryan’s planned overhaul of the bank, laid out in October, ran into an industrywide slump in trading and investment banking, as well as interest rates that have gone from low to negative in parts of Europe and Asia.

Net income fell 61% in the first quarter, leaving the company at risk of a second straight annual loss this year as it tries to resolve legal cases. Results so far and the challenges ahead, including a chance of further slumps in retail and market-linked businesses, will probably force Deutsche Bank to balance restructuring costs with the need to amass capital for stiffened regulatory requirements, Moody’s wrote. “The plan they’re trying to execute is a good plan for the bondholder in the long run, but they face some pretty challenging headwinds when you look at the current operating environment,” Peter Nerby, a senior vice president at Moody’s, said in a phone interview. “They’re working on it, but it’s tougher than it was.”

“A whole generation will have been consigned to the scrapheap.”

• Greece Is Never Going To Grow Its Way Out Of Debt (Coppola)

The IMF has just released its latest Debt Sustainability Analysis (DSA) for Greece. It makes grim reading. Greece is never going to grow its way out of debt. And the 3.5% primary surplus to which the Syriza government seems hell-bent upon committing is frankly unbelievable: the IMF thinks sustaining even 1.5% would be a stretch. Banks will need another €10bn (on top of the €43bn the Greek government has already borrowed to bail them out). Asset sales are a lost cause, mainly because the banks – which were a large proportion of the assets up for sale – won’t be worth anything for the foreseeable future. Like it or not, debt relief will be necessary. If there is no debt relief, by 2060 debt service will soar to an impossible 60% of government spending. Of course, Greece would default long before that – but that would make the situation in Greece even worse.

None of this is news. The IMF has been saying for nearly a year now that Greece will need debt relief. This latest DSA is designed to shock the Europeans into giving it serious consideration. It is not surprising, therefore, that the debt sustainability projections are significantly worse than in previous DSAs. No doubt the European creditors will disagree with them, the Syriza government will side with the Europeans because the only alternative is Grexit, and the European Commission will claim there is “progress” when all that is really happening is that a very battered can is being kicked once again. But buried in the IMF’s report are some very unpleasant numbers indeed – the IMF’s projections for population and employment out to 2060. And I think the world should know about them. Here is what the IMF has to say about the outlook for Greek unemployment:

Demographic projections suggest that working age population will decline by about 10 percentage points by 2060. At the same time, Greece will continue to struggle with high unemployment rates for decades to come. Its current unemployment rate is around 25%, the highest in the OECD, and after seven years of recession, its structural component is estimated at around 20%. Consequently, it will take significant time for unemployment to come down. Staff expects it to reach 18% by 2022, 12% by 2040, and 6% only by 2060. So even if the Greek economy returns to growth and its creditors agree to debt relief, it will take 44 years to reduce Greek unemployment to something approaching normal. For Greece’s young people currently out of work, that is all of their working life. A whole generation will have been consigned to the scrapheap.

Think Britain is bad? Try Greece.

• Austerity Means Privatizing Everything We Own (G.)

Almost everyone who gives the matter serious thought agrees that George Osborne and David Cameron want to reshape Britain. The spending cuts, the upending of the NHS, even this month’s near-miss over the BBC: signs lie everywhere of how this will be a decade, maybe more, of massive change. Yet even now it is little understood just how far Britain might shift – and in which direction. Take austerity, the word that will define this government. Even its most astute critics commit two basic errors. The first is to assume that it boils down to spending cuts and tax rises. The second is to believe that all this is meant to reduce how much the country is borrowing. What such commonplaces do is reduce austerity to a technical, reversible project.

Were it really so simple all we would need to do is turn the spending taps back on and wash away all traces of Osbornomics. Austerity is far bigger than that: it is a project irreversibly to transfer wealth from the poorest to the richest. It’s doing the job very nicely: while the typical British worker is still earning less after inflation than he or she was before the banking crash, the number of UK-based billionaires has nearly quadrupled since 2009. Even while he slashes benefits, Osborne is deep into a programme to hand over much of what is still owned by the British public to the wealthiest. Privatisation is the multibillion-pound centrepiece of Osborne’s austerity – yet it rarely gets a mention from either politicians or press. The Queen mentioned it in her speech last week, but the headline writers ignored it.

And if you don’t know that this Thursday is the closing date for consultation on the sale of the Land Registry, our public record of who owns what property, that’s hardly your fault – I haven’t spotted it in the papers, either. But without getting rid of prize assets, Osborne’s austerity programme falls apart. At a time when tax revenues are more weak stream than healthy flood, those sales bring much-needed cash into the Treasury and make his sums add up. The independent Office for Budget Responsibility has ruled that the only reason the chancellor met his debts target last year was because he flogged off our public assets. And what a fire sale that was, with everything from our last remaining stake in the Royal Mail to shares in Eurostar shoved out the door in the biggest wave of privatisations of any year in British history.

And maybe sometime in the next century something will be done. But they’re all still too big to fail.

• US Court Opens Door Over Libor Claims (FT)

A US appeals court has opened the door for more claims against the big banks for rigging benchmark interest rates, by overturning a three-year-old ruling which threw out a host of private antitrust-related lawsuits. Monday’s decision by the 2nd US Circuit Court of Appeals in Manhattan could be a setback for the likes of Bank of America, JPMorgan Chase and Citigroup, which had hoped that most of the wave of post-crisis litigation was behind them. The decision reverses a lower court decision from 2013, in which US District Judge Naomi Reice Buchwald dismissed claims on the grounds that the plaintiffs had failed to plead antitrust injury.

The lawsuits had accused 16 major banks of collusion in manipulating the London interbank offered rate, or Libor, which approximates the average rate at which a select group of banks can borrow money. Beginning in 2007, the plaintiffs argued, the banks engaged in a horizontal price-fixing conspiracy, with each submitting an artificially low cost of borrowing US dollars in order to drive Libor down. At the time of her rejection, Judge Buchwald reasoned that the Libor-setting process was co-operative rather than competitive, and so any attempt to depress the rate did not cause investors to suffer anti-competitive harm. At best, she said, investors had a fraud claim based on misrepresentation.

But the appeals court on Monday disagreed and sent the case back to the lower court for further proceedings. A three-judge panel found that price-fixing was an antitrust violation in itself, and therefore needed no separate plea of harm. “The crucial allegation is that the banks circumvented the Libor-setting rules, and that joint process thus turned into collusion,” the panel said. The private suits are separate from the criminal and civil probes into Libor rigging, which have ensnared banks and traders around the world and drawn about $9bn so far in penalties.

Do we even still notice?

• Italy Helps Rescue 2,600 Migrants From Sea In 24 Hours (R.)

Italian vessels have helped rescue more than 2,600 migrants from boats trying to reach Europe from North Africa in the last 24 hours, the coastguard said on Monday, indicating that numbers are rising as the weather warms up. Some 2,000 migrants were rescued off the Libyan coast from 14 rubber dinghies and one larger boat in salvage operations by the Italian navy and coastguard, the medical charity Medecins Sans Frontieres and an Irish navy vessel, the coastguard said. Another 636 migrants were rescued from two boats in Maltese waters, in operations involving Maltese and Italian vessels, it said. It gave no information about the nationalities of those saved. More than 31,000 migrants have reached Italy by boat so far this year, slightly fewer than in the same period of 2015.

Humanitarian organizations say the sea route between Libya and Italy is now the main route for asylum seekers heading for Europe, after an EU deal on migrants with Turkey dramatically slowed the flow of people reaching Greece. Officials fear the numbers trying to make the crossing to southern Italy will increase as conditions improve in warmer weather. More than 1.2 million Arab, African and Asian migrants fleeing war and poverty have streamed into the European Union since the start of last year. Most of those trying to reach Italy leave the coast of lawless Libya on rickety fishing boats or rubber dinghies, heading for the Italian island of Lampedusa, which is close to Tunisia, or toward Sicily.

Peaceful until now.

• Greece Starts Clearing Makeshift Refugee Camp On Border (R.)

Greek police started moving migrants and refugees out of a sprawling tent camp on the sealed northern border with Macedonia on Tuesday where thousands have been stranded for months trying to get into western Europe. Reuters witnesses saw several bus loads of migrants leaving the makeshift camp of Idomeni early on Tuesday morning, with about another dozen buses lined up. It appeared to be mainly families who were on the move. Greek authorities said they planned to move individuals gradually to state-supervised facilities further south in an operation expected to last several days. “The evacuation is progressing without any problem,” said Giorgos Kyritsis, a government spokesman for the migrant crisis.

A Reuters witness on the Macedonian side of the border said there was a heavy police presence in the area but no problems were reported as people with young children packed up huge bags with their belongings. Media on the Greek side of the border were kept at a distance and a group of people dressed as clowns waved balloon hearts and animals as the buses drove past. “Those who pack their belongings will leave, because we want this issue over with. Ideally by the end of the week. We haven’t put a strict deadline on it, but more or less that is what we estimate,” Kyritsis told Reuters. At the latest tally, 8,199 people were camped at Idomeni after a cascade of border shutdowns throughout the Balkans in February barred migrants and refugees from central and northern Europe. More than 12,000 lived in the camp at one point.

Debt Rattle December 15 2015

Dec 152015

December 15, 2015 Posted by Raúl Ilargi Meijer at 9:53 am Finance Tagged with: China, commodities, deflation, Fed, gas, iron, junk, oil, refugees Comments Off

Unknown No Dog Biscuits Today

• Stephen Roach: China Is The Biggest Commodities Story Since WWII (BBG)

• Fitch Warns Of Effects Of Sharp China Slowdown (CNBC)

• Rio Tinto CEO Says Iron Ore Rivals ‘Hanging on by Their Fingernails’ (BBG)

• Miners Shoveling Furiously Prop Up Aussie GDP as Iron Ore Melts (BBG)

• US Natural-Gas Prices Plunge Toward A 14-Year Low (MarketWatch)

• Never Mind $35, The World’s Cheapest Oil Is Already Close to $20 (BBG)

• Junk Rated Stocks Flashing Same Signal as High-Yield Bond Market (BBG)

• Big Banks In Europe And US Announced 100,000 New Job Cuts This Year (FT)

• Yahoo Told: Cut 9,000 Of Your 10,700 Staff (AP)

• Economic Pain In US Heartland As Likely Fed Hike Nears (Reuters)

• The Mystery of Missing Inflation Weighs on Fed Rate Move (WSJ)

• Are Negative Rates Fueling Deflation? (Martin Armstrong)

• Fedpocalypse Now? (Jim Kunstler)

• Throwing Out Granny: Abe Wants Elderly Japanese To Move To Countryside (BBG)

• Absolute Good -Us- vs Absolute Evil -Them- (Crooke)

• EU To Offer Turkey No Guarantee On Taking In Refugees (Reuters)

• Where The Dream Of Europe Ends (Gill)

• EU Backs Housing Scheme For Migrants And Refugees In Greece (AP)

• Three Of Six Missing Migrants Confirmed Drowned (Kath.)

“The Bloomberg Commodity Index, a measure of returns for 22 raw materials, closed at the lowest in 16 years on Monday..”

• Stephen Roach: China Is The Biggest Commodities Story Since WWII (BBG)

Commodities are at risk of extending declines as China’s slowdown hurts demand and the world’s largest user shifts its economic model away from raw materials, according to Stephen Roach, who said some producers haven’t yet faced up to the change. “The China factor can’t be emphasized enough,” Roach, a senior fellow at Yale University, said in a Bloomberg Television interview in Hong Kong on Tuesday. China “has been the most commodities-intensive story that the world economy has seen in the post-WWII period. Now China is shifting the model to more of a commodity-light, services-led economy.”

Raw materials sank to the lowest level since 1999 this week as China’s slowest expansion in a quarter of a century cut demand in a reversal of the pattern seen a decade ago, when booming growth in Asia fueled a surge across commodity prices that was dubbed the super-cycle. Continued concern about China, coupled with a rising dollar as the Federal Reserve raises rates, will make it difficult for commodities to rebound, according to Roach, a former non-executive chairman for Morgan Stanley in Asia. “Commodities are, after a super-cycle, obviously going the other way, big time,” Roach said. Some companies “are in denial that China is changing its character, its structure. It’s going to take a while for that to sink in, and until it sinks in, there’s still downward pressure on commodity markets and prices.”

The Bloomberg Commodity Index, a measure of returns for 22 raw materials, closed at the lowest in 16 years on Monday as supplies of everything from oil to copper outstripped demand. Base metals and crude oil fell on Tuesday, with copper trading 0.6% lower at $4,645 a metric ton in London, down 26% this year. The best way to heal lower prices are lower prices, as that takes supply out of the system, according to Roach. Metals companies in China including producers of copper, aluminum, zinc and nickel have all announced cuts to supply or plans to rein in capacity growth to stem the price rout. Outside China, Glencore pared copper production from mines in Africa, while Alcoa has curbed aluminum output.

A test run that puts China GDP growth at 2.3%. A number picked by accident?

• Fitch Warns Of Effects Of Sharp China Slowdown (CNBC)

A sharp slowdown in the world’s second largest economy China would hit global growth hard, according to a report by Fitch ratings agency, which warned of “significant knock-on effects” for the rest of the world. In its report published Tuesday, Fitch warned that a sharp slowdown in China’s GDP growth rate to 2.3% during 2016-2018 “would disrupt global trade and hinder growth, with significant knock-on effects for emerging markets and global corporates. In turn, this would keep short-term interest rates and commodity prices lower for longer.” Global GDP growth is currently expected to be 3.1% in 2017, according to Oxford Economics’ global economic model which was used by Fitch to frame its “shock” China scenario. But if a slowdown of such a magnitude materialized in China, Fitch said global GDP growth would slow to 1.8% in 2017.

As a result, any rise in U.S. and euro zone short-term interest rates would be postponed, and oil prices would remain under pressure, Fitch said. ‘Lower-for-longer in terms of growth, interest rates and commodity prices, could be the defining mantra of this decade for the major advanced economies if a Chinese shock scenario materializes,’ Bill Warlick, senior director of Macro Credit Research at Fitch, noted in the study. While Fitch emphasized that this hypothetical scenario did not reflect its current expectations for China’s growth, it was “designed to test credit connections between China and the rest of the world.”

In terms of these “credit connections”, a China slowdown would “impair” the credit profiles of many companies globally, particularly commodity-dependent ones in oil and gas, steel, and mining, Fitch said. “Shipping companies would also suffer, as commodities account for a significant portion of freight volume. The global technology, heavy manufacturing and automotive sectors would also feel increased credit pressure due to a slowdown in Chinese demand,” the agency warned. [..] Within Fitch’s rated portfolio, 25 percent of oil and gas companies and 52 percent of other commodities companies are already sub-investment grade. If the slowdown scenario materialized, it could create ripple effects through the high-yield bond market, the agency said.

They should have checked his hands, too.

• Rio Tinto CEO Says Iron Ore Rivals ‘Hanging on by Their Fingernails’ (BBG)

The iron ore collapse has pushed producers to the brink of survival, according to the head of the world’s second-biggest mining company. “There are a lot of producers that we believed would leave the market that are hanging on by their fingernails,” Sam Walsh, chief executive officer of Rio Tinto Group, said in an interview with Bloomberg TV. “They are burning up cash reserves of their shareholders.” Iron ore’s 45% retreat this year has left the industry on the precipice of an unprecedented shake-out as higher-cost suppliers are slowly forced to exit the market. Prices are continuing to fall as the largest companies, including Vale, Rio Tinto and BHP Billiton, expand production and grab market share. Iron ore fell below $39 a metric ton last week, a record low in daily prices dating back to 2009. That’s down from near $190 in 2011, when Chinese demand was booming.

“I suspect that right now, even at a price of $39 a ton, there are people that are suffering pretty loudly,” Walsh said. “Sooner or later the adjustment will take place.” The slump has hurt miners’ shares. Rio stock has lost 28% in Sydney this year, dropping to A$40.39 on Dec. 9, the lowest price since 2009, while BHP has fallen 40%. In Brazil, Vale has dropped 49%. Rio and its rivals have been criticized by analysts, competitors and governments for pursuing a strategy of expanding lower-cost mines even as prices fell amid a global glut. Walsh said it would be abnormal for his company to consider withholding supply given that Rio is the lowest cost producer. Rio and BHP are in an “imaginary world” because their strategy hurts themselves as much as their competitors, Lourenco Goncalves, the CEO of Cliffs Natural Resources, the biggest U.S. iron ore producer, said last month. Prices below $50 are “not comfortable to anyone,” he said.

It’s same all over commodities: overproduce to stay alive. Run and still move backwards.

• Miners Shoveling Furiously Prop Up Aussie GDP as Iron Ore Melts (BBG)

The price of Australia’s top export has been almost slashed in half this year. That makes it all the more surprising economists increasingly see iron ore propping up growth as they assemble their 2016 forecasts. The reason: Australian producers are making up for the price destruction by doubling down on volume, in the process worsening a global supply glut. There’s even a new entrant to the market – Gina Rinehart, Australia’s richest person, last week oversaw her company’s first shipment of iron ore to South Korea. The surging exports are also papering over a massive drag on the economy from collapsing mining investment and could account for most of next year’s growth, according to Citigroup and Goldman Sachs.

Still, the fall in commodity prices will hurt fiscal revenue, making it more difficult for the government to pare back a deficit and reach its goal for a surplus by the end of the decade. “We’re running faster to stand still when it comes to national income,” said James McIntyre at Macquarie in Sydney. Australia is forecasting an 8% rise in the volume of iron ore exports next year to 824 million metric tons, which would be almost double the amount the country shipped five years earlier. Goldman Sachs estimates that the country’s net exports will contribute 2 percentage points to growth next year without which the economy would stall.

It’s everywhere. NatGas could bounce back a little if winter sets in.

• US Natural-Gas Prices Plunge Toward A 14-Year Low (MarketWatch)

The winter heating season has begun, but natural-gas prices have plunged toward levels they haven’t seen since January 2002. Natural gas for January delivery fell 10.9 cents, or 5.5%, to trade at $1.881 per million British thermal units Monday. It suffered a weekly loss of nearly 11% last week. Prices traded as low as $1.862 and based on the most active contracts, prices haven’t seen an intraday level this low since January 2002, according to FactSet data. A settlement around the current level would be the lowest since September 2001. The price drop comes amid a glut in supply. Domestic natural-gas supplies in storage topped out just above 4 trillion cubic feet the week of Nov. 20, the largest storage level on record, based on U.S. government data.

There is “too much natural gas, not enough demand—that is even with the shutdown of coal facilities,” said Richard Gechter, Jr., principal and president of Richard W. Gechter Natural Gas Consulting. “Supply has increased beyond anyone’s expectations.” The winter season historically runs from November to March of the following year. Supplies in storage stood at 3.88 trillion cubic feet as of Dec. 4, and the U.S. Energy Information Administration expects inventories will finish the end of the winter season at 1.862 trillion cubic feet. That would be a smaller drawdown than what’s typically seen in the winter. “Strong inventory builds, continuing production growth and expectations for warmer-than-normal winter temperatures have all contributed to low natural-gas prices,” the EIA said.

“It’s really a dramatic situation that really cannot continue for a very long time for many producers.”

• Never Mind $35, The World’s Cheapest Oil Is Already Close to $20 (BBG)

As oil crashes through $35 a barrel in New York, some producers are already living with the reality of much lower prices. A mix of Mexican crudes is already valued at less than $28, an 11-year low, according to data compiled by Bloomberg. Iraq is offering its heaviest variety of oil to buyers in Asia for about $25. In western Canada, some producers are selling for less than $22 a barrel. “More than one-third of the global oil production is not economical at these prices,” Ehsan Ul-Haq at KBC Advanced Technologies said. “Canadian oil producers could have difficulty in covering their operational costs.” Oil has slumped to levels last seen in the global financial crisis in 2009 amid a global supply glut.

While the prices of benchmarks West Texas Intermediate and Brent hover in the $30s, they represent a category of crude – light and low in sulfur – that is more highly valued because it’s easier to refine. Some producers of thicker, blacker and more sulfurous varieties have suffered heavier losses and are already living in the $20s. A blend of Mexican crude has plunged 73% in 18 months to $27.74 on Dec. 11, its lowest level since 2004, according to data compiled by Bloomberg. Venezuela is experiencing similar lows. Western Canada Select, which is heavy and sulfurous, has slumped 75% to $21.82, the least in seven years. Other varieties including Ecuador’s Oriente, Saudi Arabia’s Arab Heavy and Iraq’s Basrah Heavy were selling below $30, the data show.

Crudes of this type trade at a discount to lighter varieties because to process them “refiners have to invest in upgrading facilities such as coking plants, which are very expensive,” KBC’s Ul-Haq said. “Most places in the world, a lot of the producers they don’t really get the Brent price, and they don’t get the WTI price,” Torbjoern Kjus at DNB ASA in Oslo said. “It’s really a dramatic situation that really cannot continue for a very long time for many producers.”

Interconnected.

• Junk Rated Stocks Flashing Same Signal as High-Yield Bond Market (BBG)

Think equity investors have been blind to warning signs coming from junk bonds? Not quite. For most of the year pessimists have warned that equity markets were missing signals in high-yield credit, where losses snowballed even as gauges like the Standard & Poor’s 500 Index remained relatively stable. While true, most of that is an illusion of index composition – not evidence of complacency. As one of the broadest share gauges, the S&P 500 has companies that span the credit spectrum from junk to investment grade – or have no debt at all. From that perspective, it’s less surprising that the full index wouldn’t mimic the plunge in junk bonds themselves, where annual losses for related exchange-traded funds exceed 10%. And that’s what happened: until Friday, the equity gauge was virtually flat for the year.

What if you look at stocks that are representative of the high-yield universe? A basket compiled by Bloomberg of below investment-grade companies, including Chesapeake and Cliffs Natural Resources, has dropped a lot more – 51% in 2015. The slump in stocks with the lowest credit quality reflects the same concern gripping the debt market, that the commodity selloff and the Federal Reserve’s plan to start raising interest rates will jeopardize solvency. While near record cash and the resilience in large technology firms have sheltered the S&P 500 from deeper losses, junk-rated stocks are vulnerable to a credit contagion with a smaller size and a tilt toward commodities. “It’s really the same kind of signal,” Curtis Holden at Tanglewood Wealth Management, which oversees about $840 million, said. “The market is saying through how well the S&P 500 is holding up on a relative basis, ‘Look for quality. Don’t look for junk companies.”’

They would like you to believe this is due to “robots and regulation”.

• Big Banks In Europe And US Announced 100,000 New Job Cuts This Year (FT)

Big banks in Europe and the US announced almost 100,000 new job cuts this year, and thousands more are expected from BNP Paribas and Barclays early next year, as the wave of lay-offs that began in 2007 shows no sign of abating. The 2015 cuts – which exclude the impact of major asset sales — amount to more than 10% of the total workforce across the 11 large European and US banks that announced fresh lay-offs, according to analysis by the Financial Times. The most recent came last week, as workers at Dutch lender Rabobank learnt of 9,000 cuts across their bank the day after Morgan Stanley announced 1,200 lay-offs, including at its ailing fixed income division.

Barclays and BNP Paribas, two of Europe’s biggest banks, will unveil job cuts when they announce strategies that are designed to strip out 10 to 20% of the costs at their investment banks, people familiar with the situations said. At Barclays, the axe will fall on March 1 when chief executive Jes Staley unveils a fresh strategy with the bank’s annual results. The announcement will include Barclays’ plans to move more quickly to shrink its investment bank, which employs about 20,000 people. BNP Paribas’s new corporate and institutional banking chief Yann Gérardin will announce a new cost cutting plan in February. The French bank has already said it is planning to cut more than 1,000 jobs in its Belgian retail network.

Banks have found that they have been carrying too many staff, as they suffer falls in revenues from a combination of tougher post-crisis regulation, ultra-low interest rates and sluggish activity among clients. Those under new leadership — such as Deutsche Bank, Credit Suisse and Barclays — have been under particular scrutiny, as incoming chief executives try to turn the ailing banks they inherited into the more profitable companies demanded by investors.

Good by and thanks for all the fish.

• Yahoo Told: Cut 9,000 Of Your 10,700 Staff (AP)

Yahoo is facing shareholder pressure to pursue other alternatives besides a complex spin-off of its internet operations while chief executive Marissa Mayer struggles to revive the company’s revenue growth. The demands from SpringOwl Asset Management and Canyon Capital Advisors reflect shareholders’ frustration with Ms Mayer’s inability to snap the company out of a financial downturn after three-and-half years in the top job. Ms Mayer hoped to placate investors with last week’s announcement of a revised spin-off, but the company’s shares have slid 6pc since then. The shares fell 32 cents to close at $32.59 on Monday. SpringOwl, a New York hedge fund, has sent a 99-page presentation to Yahoo’s board that calls for the company to lay off 9,000 of its 10,700 workers and eliminate free food for employees to help save $2bn annually.

Canyon Capital, a Los Angeles investment firm, wants Yahoo to sell its internet business instead of spinning it off. Yahoo has warned the spin-off could take more than a year to complete, a time frame that Canyon Capital called “simply unacceptable” after Yahoo spent most of 2015 preparing to hive off its $31bn stake in China’s Alibaba in an attempt to avoid paying taxes on the gains from its initial investment of $1bn. Yahoo scrapped the Alibaba spin-off after another shareholder, Starboard Value, threatened an attempt to overthrow the board if the company stuck to that plan. Starboard and other investors were worried the Alibaba stake would be taxed at a cost of more than $10bn after the Internal Revenue Service declined to guarantee it would qualify for an exemption.

Now that two more shareholders expressing their dismay with Yahoo’s direction, Ms Mayer’s fate could be tied to a cost-cutting reorganisation that she has been working on for the past two months. Ms Mayer, who is on a brief maternity leave after giving birth to twins last week, says the overhaul will jettison Yahoo’s least profitable products – a shake-up that could lay off a large number of workers.

The truth is slipping through the cracks of propaganda. American recovery my…

• Economic Pain In US Heartland As Likely Fed Hike Nears (Reuters)

America’s heartland, the vast area in the middle of the country that produces much of the nation’s food and energy and is home to many of its traditional manufacturers, is sending warning signals that all is not well with the economy. From agriculture to heavy equipment and small business lending, farmers, manufacturers and transport companies that serve them are taking hits from a stronger dollar or plunging prices for farm commodities and oil. Industry executives worry that the expected move by the U.S. Federal Reserve to raise interest rates on Wednesday – which would be the first hike in a decade – could put more jobs at risk.

“Many of the companies that we do business with are hurting and some have already gone away,” said Bill Hickey, president of Chicago-based steel company Lapham-Hickey Steel, which has seven mills across the country and supplies processed steel to car makers and construction firms. He worries banks could start cutting off credit to troubled industrial companies. The Thomson Reuters/PayNet Small Business Lending Index fell 5% in October from the previous month and was flat on the year, marking only the second time it had failed to rise since February 2010. Weakness in the manufacturing, farm and transport sectors likely will not deter a rate increase by the Fed, economists say. There is “no doubt that manufacturing weakness is costing growth,” said Harm Bandholz at UniCredit Research.

However, the sector only accounts for about 12% of the U.S. economy and some areas like automotive are performing well. “You can’t say that everything is perfect,” he said. “But the United States is not doing so bad anymore that we need 0% interest rates.” The downbeat indicators from heartland industries illustrate the economy’s lumpiness. Preliminary data show that November U.S. orders for heavy, over-the-road trucks fell 59% from a year earlier – the worst November since 2009, according to transportation analysis firm FTR. Freight at the U.S. major railroads was off 1.9% for the year through Dec. 5. Coal accounts for much of the decline. But shipments of consumer goods by container – or intermodal shipments – were only up 1.6%. “The numbers are as bad as I’ve seen them,” said Anthony Hatch, an independent railroad analyst.

Farmers are under pressure from declining crop prices and weak demand. U.S. farm incomes are expected to drop 38% for all of 2015, the steepest year-on-year drop since 1983. Nathan Kauffman, an economist with the Kansas City Fed, said higher rates would create “the potential for more financial stress.”

Set a target, make a prediction, see both fail miserably, rinse and repeat.

• The Mystery of Missing Inflation Weighs on Fed Rate Move (WSJ)

Federal Reserve officials this week are expected to raise interest rates for the first time in nine years on the expectation that employment and inflation will hit targets reflecting a healthy U.S. economy. But Fed officials face a troubling question: Jobs are on track, but inflation isn’t behaving as predicted and they don’t know why. Unemployment has fallen to 5%, a figure close to estimates of full employment, while inflation remains stuck at less than 1%, well below the Fed’s 2% target. Central bank officials predict inflation will approach their target in 2016. The trouble is they have made the same prediction for the past four years. If the Fed is again fooled, it may find it raised rates too soon, risking recession.

Low inflation—and low prices—sound beneficial but can stall growth in wages and profits. Debts are harder to pay off without inflation shrinking their burden. For central banks, when inflation is very low, so are interest rates, leaving little room to cut rates to spur the economy during downturns. The Fed’s poor record of predicting inflation has set off debate within the central bank over the economic models used by central bank officials. Fed Chairwoman Janet Yellen, in a 31-page September speech on the subject, acknowledged “significant uncertainty” about her prediction that inflation would rise. Conventional models, she said, have become “a subject of controversy.”

Ms. Yellen faces dissent from Fed officials who want to keep interest rates near zero until there is concrete evidence of inflation rising, voices likely to try to put a drag on future rate increases. While the job market is near normal, “I am far less confident about reaching our inflation goal within a reasonable time frame,” Charles Evans, president of the Chicago Fed, said in a speech this month. “Inflation has been too low for too long.” For a generation, economists believed central banks had control over the rate of inflation and could use it as a policy guide: If inflation was too low, then lower interest rates could boost the economy; high inflation could be checked by raising rates.

If the Fed would just listen to Martin Armstrong… (or the Automatic Earth, for that matter) “..lowering interest rates is DEFLATIONARY, not inflationary, for it reduces disposable income.”

• Are Negative Rates Fueling Deflation? (Martin Armstrong)

Those in power never understand markets. They are very myopic in their view of the world. The assumption that lowering interest rates will “stimulate” the economy has NEVER worked, not even once. Nevertheless, they assume they can manipulate society in the Marxist-Keynesian ideal world, but what if they are wrong? By lowering interest rates, they ASSUME they will encourage people to borrow and thus expand the economy. They fail to comprehend that people will borrow only when they BELIEVE there is an opportunity to make money. Additionally, they told people to save for their retirement. Now they want to punish them for doing so by imposing negative interest rates (tax on money) to savings. They do not understand that lowering interest rates, when there is no confidence in the future anyhow, will not encourage people to start businesses and expand the economy.

It wipes out the income of savers and then the only way to make and preserve money becomes ASSET investment, as in the stock market — not creating business startups. So lowering interest rates is DEFLATIONARY, not inflationary, for it reduces disposable income. This is particularly true for the elderly who are forced back to work to compete for jobs, which increases youth unemployment. Since the only way to make money has become ASSET INFLATION, they must withdraw money from banks and buy stocks. Now, they are in the hated class of the “rich” who are seen as the 1% because they are making money when the wage earner loses money as taxation rises and the economy declines. As taxes rise, machines are replacing workers and shrinking the job market, which only fuels more deflation.

Then you have people like Hillary who say they will DOUBLE the minimum wage, which will cause companies to replace even more jobs with machines. Democrats, in particular, are really Marxists. They ignore Keynes who also pointed out that lowering taxes would stimulate the economy. Keynes, in all fairness, did not advocate deficit spending year after year nor never paying off the national debt. Keynes wrote regarding taxes: “Nor should the argument seem strange that taxation may be so high as to defeat its object, and that, given sufficient time to gather the fruits, a reduction of taxation will run a better chance, than an increase, of balancing the budget.” Keynes obviously wanted to make it clear that the tax policy should be guided to the right level as to not discourage income.

Keynes believed that government should strive to maximize income and therefore revenues. Nevertheless, Democrats demonized that as “trickle-down economics.” Keynes explained further: “For to take the opposite view today is to resemble a manufacturer who, running at a loss, decides to raise his price, and when his declining sales increase the loss, wrapping himself in the rectitude of plain arithmetic, decides that prudence requires him to raise the price still more–and who, when at last his account is balanced with nought on both sides, is still found righteously declaring that it would have been the act of a gambler to reduce the price when you were already making a loss.

“There is something in the air like a gigantic static charge, longing for release.”

• Fedpocalypse Now? (Jim Kunstler)

If ever such a thing was, the stage is set this Monday and Tuesday for a rush to the exits in financial markets as the world prepares for the US central bank to take one baby step out of the corner it’s in. Everybody can see Janet Yellen standing naked in that corner — more like a box canyon — and it’s not a pretty sight. Despite her well-broadcasted insistence that the economic skies are blue, storm clouds scud through every realm and quarter. Equities barfed nearly four% just last week, credit is crumbling (nobody wants to lend), junk bonds are tanking (as defaults loom), currencies all around the world are crashing, hedge funds can’t give investors their money back, “liquidity” is AWOL (no buyers for janky securities), commodities are in freefall, oil is going so deep into the sub-basement of value that the industry may never recover, international trade is evaporating, the president is doing everything possible in Syria to start World War Three, and the monster called globalism is lying in its coffin with a stake pointed over its heart.

Folks who didn’t go to cash a month ago must be hyperventilating today. But the mundane truth probably is that events have finally caught up with the structural distortions of a financial world running on illusion. To everything there is a season, turn, turn, turn, and economic winter is finally upon us. All the world ‘round, people borrowed too much to buy stuff and now they’re all borrowed out and stuffed up. Welcome to the successor to the global economy: the yard sale economy, with all the previously-bought stuff going back into circulation on its way to the dump. A generous view of the American predicament might suppose that the unfortunate empire of lies constructed over the last several decades was no more than a desperate attempt to preserve our manifold mis-investments and bad choices.

The odious Trump has made such a splash by pointing to a few of them, for instance, gifting US industrial production to the slave-labor nations, at the expense of American workers not fortunate enough to work in Goldman Sachs’s CDO boiler rooms. Readers know I don’t relish the prospect of Trump in the White House. What I don’t hear anyone asking: is he the best we can come up with under the circumstances? Is there not one decent, capable, eligible adult out there in America who can string two coherent thoughts together that comport with reality? Apparently not.

The Ballad of Narayama. 1983 version is a great movie. Don’t think I ever saw the 1958 one.

• Throwing Out Granny: Abe Wants Elderly Japanese To Move To Countryside (BBG)

Mayor Yukio Takano has a problem. Since 1980, the number of children in his Tokyo ward has halved while the elderly population has doubled – and he’s running out of space to build more nursing homes in the Japanese capital’s most densely populated borough. A possible solution: Relocate his older constituents to the countryside. It’s an audacious idea, and it’s none other than Prime Minister Shinzo Abe who is pushing it. His government sees an exodus of elderly to rural precincts as the best way of coping with Tokyo’s rapidly aging population and shrinking numbers elsewhere. Then again, asking seniors to decamp to the countryside may also be unpopular.

“For sure, people are going to say this is like throwing out your granny, or pushing out people out who don’t want to go, but that’s not the case,” says Takano who is surveying residents of his Toshima ward on such a plan before moving ahead. “Japan is doomed if people in Tokyo can’t co-exist, and we can’t get the countryside reinvigorated.” For many in Japan, the idea of moving seniors to the countryside rekindles the legend of “ubasuteyama,” meaning granny-dumping mountain. Legend has it that old people in ancient times were carried off to the hills and left to die. There’s even a mountain named after the folk story in Nagano, central Japan. Abe put tackling Japan’s declining population at the top of his agenda in September in a revamp of his economic policies known as Abenomics. The government is trying to reverse two unwelcome trends.

A surge in Tokyo’s elderly population over the next 10 years may overwhelm urban healthcare systems; while depopulation and stagnant economies in rural Japan are set to leave nursing homes and hospitals half-empty. Eighty minutes by express train from Takano’s ward is the mountain town of Chichibu where the population has been decreasing since 1975. While the town’s center is lined with shuttered businesses and abandoned buildings, it does have plenty of empty nursing-home beds and underused medical facilities. [..] Japan’s population is set to drop by more than 700,000 a year on average between 2020 and 2030, when a almost third of the population will be 65 or older, according to the National Institute of Population and Social Security Research. At the same time, the government’s ability to extend financial incentives to spur population growth is limited, according to Ishiba, with central government debt at more than double that of GDP.

“It’s the old apocalyptic tale: God’s people versus Satan’s.”

• Absolute Good -Us- vs Absolute Evil -Them- (Crooke)

We all know the narrative in which we (the West) are seized. It is the narrative of the Cold War: America versus the “Evil Empire.” And, as Professor Ira Chernus has written, since we are “human” and somehow they (the USSR or, now, ISIS) plainly are not, we must be their polar opposite in every way. “If they are absolute evil, we must be the absolute opposite. It’s the old apocalyptic tale: God’s people versus Satan’s. It ensures that we never have to admit to any meaningful connection with the enemy.” It is the basis to America’s and Europe’s claim to exceptionalism and leadership. And “buried in the assumption that the enemy is not in any sense human like us, is [an] absolution for whatever hand we may have had in sparking or contributing to evil’s rise and spread.

How could we have fertilized the soil of absolute evil or bear any responsibility for its successes? It’s a basic postulate of wars against evil: God’s people must be innocent,” (and that the evil cannot be mediated, for how can one mediate with evil). Westerners may generally think ourselves to be rationalist and (mostly) secular, but Christian modes of conceptualizing the world still permeate contemporary foreign policy. It is this Cold War narrative of the Reagan era, with its correlates that America simply stared down the Soviet Empire through military and – as importantly – financial “pressures,” whilst making no concessions to the enemy. What is sometimes forgotten, is how the Bush neo-cons gave their “spin” to this narrative for the Middle East by casting Arab national secularists and Ba’athists as the offspring of “Satan”: David Wurmser was advocating in 1996, “expediting the chaotic collapse” of secular-Arab nationalism in general, and Baathism in particular.

He concurred with King Hussein of Jordan that “the phenomenon of Baathism” was, from the very beginning, “an agent of foreign, namely Soviet policy.” Moreover, apart from being agents of socialism, these states opposed Israel, too. So, on the principle that if these were the enemy, then my enemy’s enemy (the kings, Emirs and monarchs of the Middle East) became the Bush neo-cons friends. And they remain such today – however much their interests now diverge from those of the U.S. The problem, as Professor Steve Cohen, the foremost Russia scholar in the U.S., laments, is that it is this narrative which has precluded America from ever concluding any real ability to find a mutually acceptable modus vivendi with Russia – which it sorely needs, if it is ever seriously to tackle the phenomenon of Wahhabist jihadism (or resolve the Syrian conflict).

What is more, the “Cold War narrative” simply does not reflect history, but rather the narrative effaces history: It looses for us the ability to really understand the demonized “calous tyrant” – be it (Russian) President Vladimir Putin or (Ba’athist) President Bashar al-Assad – because we simply ignore the actual history of how that state came to be what it is, and, our part in it becoming what it is. Indeed the state, or its leaders, often are not what we think they are – at all. Cohen explains: “The chance for a durable Washington-Moscow strategic partnership was lost in the 1990 after the Soviet Union ended. Actually it began to be lost earlier, because it was [President Ronald] Reagan and [Soviet leader Mikhail] Gorbachev who gave us the opportunity for a strategic partnership between 1985-89.

Then Turkey will simply have to ask for more billions.

• EU To Offer Turkey No Guarantee On Taking In Refugees (Reuters)

The European Union will set no minimum on the number of Syrian refugees its member states are willing to take from Turkey in a resettlement scheme to be unveiled on Tuesday, a senior EU official said on Monday. The European Commission, the bloc’s executive, will present the proposal following an agreement with Ankara two weeks ago that European leaders hope can help stem the flow of refugees and economic migrants reaching the EU from Turkey via Greece. It will mention no number, the official said, in its plan for deserving cases to be flown directly from Turkey to the EU – an omission that could disappoint Turkish leaders. Nor will there be any system to send them to certain states – rather, EU countries can volunteer to take part in the scheme.

Germany under Chancellor Angela Merkel has led efforts for an EU agreement on taking in substantial numbers of the 2.3 million Syrians now sheltering in Turkey as a way of cutting back on people risking their lives in chaotic migration by sea. But few other states have been so enthusiastic, particularly following bitter rows inside the bloc in recent months caused by a German-backed push to impose mandatory quotas on governments to take in asylum seekers from frontier states Italy and Greece. An agreement among EU states in the summer to take in up to 22,000 refugees, mainly from the Middle East, has yet to become fully operational. The same is true for schemes to relocate up to 160,000 asylum seekers already inside the EU. Some countries argue against more schemes until capacity is reached in others.

They open the door and then close it. Just like that.

• Where The Dream Of Europe Ends (Gill)

Macedonia has shut its borders to all but three nationalities and the backlog has been returned to Athens where they wonder what to do next. Idomeni, the small Greek village that represents the final Greek frontier and the doorway to Europe for refugees fleeing war and poverty in their countries, was strangely empty on Wednesday night. After days of a stalemate when Macedonia closed its border to everyone except refugees from Syria, Afghanistan and Iraq, Greek authorities took measures to transport around 2,000 refugees back to Athens where they will be accommodated at Elaionas camp and, most recently, the Tae Kwon Do stadium, built for when Athens hosted the Olympic games in 2004 and converted into a temporary shelter.

Most refugees arriving in Greece want to move onward, heading through Macedonia mainly towards the promised lands of Germany, the Netherlands or Sweden. When the border shut, a backlog of desperate people became stranded at Idomeni in freezing conditions and with little food and water. These were people mainly from Iran, Pakistan, Eritrea, Sudan and other countries deemed non eligible by the Macedonian authorities. Back in Athens, their time is running out. At Victoria Square in central Athens, brothers Saif Ali, 18 and Ali 15 from Lahore in Pakistan were pondering their next move after reluctantly returning to Athens the previous day. Having wasted their money on an unsuccessful trip to Idomeni, they are currently staying at Elaionas camp, which is now full.

“We knew when we paid to take a bus to Idomeni that the border was closed, but we decided to take the risk. They didn’t let us pass, they beat us with sticks. They sent us back. Our money got wasted. “We were stuck there for five days, it was so cold.” said Saif Ali. “We tried to pass through with everyone else, they check your papers one by one. People had fake papers, and I saw some people borrow the papers of Afghanis, show them to the guards and then slip them back to the owners.”

Crazy.

• EU Backs Housing Scheme For Migrants And Refugees In Greece (AP)

The European Union has pledged to spend €80 million on a housing scheme for migrants and asylum speakers stranded in Greece. Kristalina Georgieva, the EU Commissioner for Budget and Human resources, signed an agreement Monday for a rent subsidy program due to launch next year. Thousands of stranded refugees are currently housed in old venues from the 2004 Olympics or are sleeping in tents pitched in city squares and parks in Athens. More than 750,000 migrants and refugees have crossed through Greece this year, hoping to travel to central and northern Europe, but Macedonia and other Balkan countries last month toughened border rules, restricting crossings to nationals from Syria, Iraq and Afghanistan. Under the scheme, migrants will receive hotel vouchers or checks to live in vacant apartments.

And why not drown some more people.

• Three Of Six Missing Migrants Confirmed Drowned (Kath.)

Greek coast guard officers recovered the bodies of three of the six people who were reported missing after their boat capsized off the coast of Kastelorizo as they tried to reach Greece from Turkey on Tuesday morning. The authorities said three of the passengers were confirmed drowned as the search continued for the other three. Greek coast guards were alerted by their Turkish counterparts after the latter rescued 12 migrants who had managed to swim to a small islet off Turkey’s coast and another five people from the sea. The nationality of the passengers was not clear.