Jul 162022
 
 July 16, 2022  Posted by at 9:01 am Finance Tagged with: , , , , , , , , ,  27 Responses »


Pablo Picasso Guernica [Study] V 1937

 

Useful European Idiots (Vilches)
The Imaginary War (Lawrence)
Is A US-Russia War Becoming Inevitable? (Pat Buchanan)
The Stupendous Tale (Tarik)
Europe’s Thirst For LNG Is Causing Blackouts In Developing Countries (OP)
Geert Vanden Bossche: Mass Covid Vax Triggering New Pandemics (NA)
Low Demand For Young Kids’ Covid Vaccines Is Alarming Doctors (Pol.)
Health Experts Are Quitting The NIH and CDC In Droves (DM)
Elon Musk Wants To Push Twitter Trial Back To 2023 (NYP)
A Tale of the Taco (Jim Kunstler)
Assange Fights Extradition To United States With Two Appeals (Dissenter)

 

 

 

 

Twitter board

 

 

 

 

NATO myths

 

 

 

 

“The US-UK cabal does not want Europe and Russia to trade, do business, relate, or grow together in any way, shape, or form.”

Useful European Idiots (Vilches)

“ Washington and London have drawn ´useful European idiots´ into an economic war against Russia ” – said former Russian president Dmitry Medvedev – adding that “the onset of a systemic crisis in the Eurozone is beginning to come true.” He added that Anglo-Saxons on both sides of the Atlantic conned EU members “like a couple of shell-game tricksters” by drawing them into an unwarranted economic war against Moscow which is actually an Anglo-Saxon project, not theirs. Paraphrasing James Carville, “it´s the Anglo-Saxons, stupid”. The US-UK cabal does not want Europe and Russia to trade, do business, relate, or grow together in any way, shape, or form. So they designed, built and forced upon Europe the current John Bolton-Ukraine war which had plan A (now failed) with Russia as target and plan B as substitute with Europe itself as the intended victim coming next.

What Dmitry Medvedev may not know though is that such ”useful European idiots” can be broken down into 3 fairly distinct categories starting with the EU “well-trained career idiots” basically focused on continuously earning salaries and perks way above their capabilities. So they know that (a) the EU system rewards them generously despite their obvious mediocrity and limitations and (b) thus do not dare to question, doubt, let alone defy the EU system or dictats. They all know and feel every day of their lives that the EU ´system´ has a very strict pecking order and what top-cock (or top-hen) says to do or say or think is to be summarily executed without questioning the mandate, even if against European best interests as is the case.

This simplifies the problem from the Washington-London perspective as by controlling a handful of EU leaders (more on that later) the rest just follow the Pied Piper of Hamelin. Furthermore, these EU-captured intellectual simpleton retards are not dumb enough to the extreme of questioning their unequivocal role (they are aware of it) and accordingly constantly strengthen their vested-interests relationship. In sum, they work hard at it. Then there is a second category of “useful European idiots” grouping the visible top EU leaders – many unelected — who can either be (a) plain corrupt as traditionally allowed for in Europe or (b) perceive themselves as God-chosen to lead Europe to a glorious yet undefined destiny no matter if actively hijacking any representational capacity and values they may have received.

Read more …

“.. a Marvel Comics of a conflict with little grounding in reality..”

The Imaginary War (Lawrence)

What were the policy cliques, “the intelligence community” and the press that serves both going to do when the kind of war in Ukraine they talked incessantly about turned out to be imaginary, a Marvel Comics of a conflict with little grounding in reality? I have wondered about this since the Russian intervention began on Feb. 24. I knew the answer would be interesting when finally we had one. Now we have one. Taking the government-supervised New York Times as a guide, the result is a variant of what we saw as the Russiagate fiasco came unglued: Those who manufacture orthodoxies as well as consent are slithering out the side door. I could tell you I don’t intend to single out the Times in this wild chicanery, except that I do.

The once-but-no-longer newspaper of record continues to be singularly wicked in its deceits and deceptions as it imposes the official but imaginary version of the war on unsuspecting readers. As Consortium News’s properly suspecting readers will recall, Vladimir Putin was clear when he told the world Russia’s intentions as it began its intervention. These were two: Russian forces went into Ukraine to “demilitarize and de–Nazify” it, a pair of limited, defined objectives. An astute reader of these commentaries pointed out in a recent comment thread that the Russian president had once again proven, whatever else one may think of him, a focused statesman with an excellent grasp of history. At the Potsdam Conference in July 1945, the Allied Control Council declared its postwar purpose in Germany as “the four D’s.” These were de–Nazification, demilitarization, democratization and decentralization.

Let’s give David Thompson, who brought this historical reference to my attention, a deserved byline here: “Putin’s reiteration of the de–Nazification and demilitarization principles established from the Potsdam Conference is not just some quaint tip of the hat to history. He was laying down a marker to the United States and the United Kingdom that the agreement reached at Potsdam in 1945 is still relevant and valid ….” The Russian president, whose entire argument with the West is that a just and stable order in Europe must serve the security interests of all sides, was simply restating objectives the trans–Atlantic alliance had once signed on to accomplish. In other words, he was pointing out said alliance’s gross hypocrisy as it arms the ideological descendants of German Nazis.

I dwell on this matter because the imaginary war began with the Biden regime’s and the press’s quite irresponsible misrepresentations of the Russian Federation’s aims in Ukraine. All else has flowed from it. You remember: Russian forces were going to “conquer” the whole of the nation, wipe out the Kiev regime, install a puppet government and then drive on to Poland, the Baltic states, Transnistria and the rest of Moldova, and who could imagine what after that. De–Nazification, we can now read, is a phony Kremlin dodge. Having lied outright on this score, the next edition of the comic went onto the market. Russia is failing to achieve its imaginary objectives. Low morale, desertions, poorly trained troops with not enough to eat, logistical failures, lousy artillery, inadequate ordnance, incompetent officers: The Russians were riding for a fall on Ukrainian soil.

The corollary here was the heroism, courage and battlefield grit of Ukrainian troops, least of all, the Azov Battalion, who were not any longer neo–Nazis. Never mind the Times, The Guardian, the BBC and various other mainstream publications and broadcasters had earlier told us about these ideological fanatics. That was then, this is now.

Read more …

Not yet.

Is A US-Russia War Becoming Inevitable? (Pat Buchanan)

At the NATO summit in Madrid, Finland was invited to join the alliance. What does this mean for Finland? If Russian President Vladimir Putin breaches the 830-mile Finnish border, the United States will rise to Helsinki’s defense and fight Russia on Finland’s side. If Putin makes a military move into Finland, the U.S. will go to war against the world’s largest nation with an arsenal of between 4,500 and 6,000 battlefield and strategic nuclear weapons. No Cold War president would have dreamed of making such a commitment — to risk the survival of our nation to defend territory of a country thousands of miles away that has never been a U.S. vital interest. To go to war with the Soviet Union over the preservation of Finnish territory would have been seen as madness during the Cold War.

Recall: Harry Truman refused to use force to break Joseph Stalin’s blockade of Berlin. Dwight Eisenhower refused to send U.S. troops to save the Hungarian freedom fighters being run down by Soviet tanks in Budapest in 1956. Lyndon B. Johnson did nothing to assist the Czech patriots crushed by Warsaw Pact armies in 1968. When Lech Walesa’s Solidarity was smashed on Moscow’s order in Poland in 1981, Ronald Reagan made brave statements and sent Xerox machines. While the U.S. issued annual declarations of support during the Cold War for the “captive nations” of Central and Eastern Europe, the liberation of these nations from Soviet control was never deemed so vital to the West as to justify a war with the USSR.

Indeed, in the 40 years of the Cold War, NATO, which had begun in 1949 with 12 member nations, added only four more — Greece, Turkey, Spain and West Germany. Yet, with the invitation to Sweden and Finland to join as the 31st and 32nd nations to receive an Article 5 war guarantee, NATO will have doubled its membership since what was thought — certainly by the Russians — to have been the end of the Cold War. All the nations once part of Moscow’s Warsaw Pact — East Germany, Poland, Hungary, the Czech Republic, Slovakia, Romania, Bulgaria — are now members of a U.S.-led NATO — directed against Russia. Three former republics of the USSR — Estonia, Latvia, Lithuania — are now also members of NATO, a military alliance formed to corral and contain the nation to which they had belonged during the Cold War. Lithuania, with 2% of Russia’s population, has just declared a partial blockade of goods moving across its territory to Kaliningrad, Russia’s enclave on the Baltic Sea. To Putin’s protest, Vilnius has reminded Moscow that Lithuania is a member of NATO.

Read more …

Stupendously long, too.

The Stupendous Tale (Tarik)

I love Elvira. She’s my sweetheart, ma babe. Were I set to marry a central banker, she’d be the one. And if Putin is the Father of modern Russia, then Nabiullina is the fiercely protective Mother. Her handling of the Ruble attack after the Crimean intervention, was truly heroic. I can almost hear the strident cries from all her brats: the public, the business class, academia, media and the government, to lower rates and open wide the money spigot. Had she fallen under the pressure as they all do since Volker, had she not risen interest rates to 17%, the ruble would have been irrevocably broken.

The entire economy would have loaded up on unsustainable debt that would trigger the familiar hyper inflationary trend common to US$ vassals going rogue with no understanding of the money game (Zimbabwe, Venezuela, Turkey, Argentina…), and thus annihilated Putin’s achievements on all fronts. Instead, by letting inviable western focused businesses fail, financial resources could flow to local production and eastbound and southbound ventures. As a result the economy cleansed itself of obsolete dead weights, excessive unserviceable debt, and business discipline was enforced, leaving it lean and mean, ready do tackle any future rough patch.

Once the last treacherous FDI dollar and Euro left the space, the ruble stabilized, interest rates slowly normalized, dollar reserves now kept at strict minimum to cover trade requirements while overall reserves quickly recovered all losses. Sure some short term pain on certain sectors, but necessary and long term well worth it. No wonder Putin today would ask her for another term (note that he asked, she did not offer). With roughest seas ahead, he imperatively needs a proven captain that can handle any coming economic tempest. What’s funny, those accusing her of “Atlanticism” seem to have completely missed that her policies selectively strained precisely those western bent businesses, while protecting the Eurasianists and patriots. Some reproach her playing into IMF hands yet she kept the RCB free from its predatory loans, thus keeping Russia safe from the coercive influence. Go figure.

Read more …

BRICS getting stronger by the day. This is why.

Europe’s Thirst For LNG Is Causing Blackouts In Developing Countries (OP)

In June, the European Union imported more liquefied natural gas from the United States than pipeline gas from Russia for the first time ever. The unprecedented shift came as the EU scrambled to fill up its gas storage facilities ahead of the next heating season in fear Russia could turn off the gas tap at any moment. It also pushed LNG prices sky-high, making it unaffordable for developing countries. “Because of the Ukraine war, every single molecule that was available in our region has been purchased by Europe, because they’re trying to reduce their dependence on Russia,” Pakistan’s Petroleum Minister Musadik Malik said earlier this month as quoted by the Wall Street Journal.


Pakistan has been suffering from blackouts because of insufficient LNG supplies that the country needs to keep its power plants going. And the reason for the insufficient supplies is that Europe can pay more for the commodity, so traders are sending their cargos there, including cargos originally destined for Pakistan and other Asian countries. According to data from Wood Mackenzie cited by the Wall Street Journal, while Europe’s LNG imports soared 49 percent from the start of the year to mid-June, Pakistan’s imports fell by 15 percent during the same period, those to India shed 16 percent, and China’s LNG imports fell by more than a fifth. “The European gas crisis is sucking the world dry of LNG,” Valery Chow, head of Asia Pacific gas and LNG research at Wood Mackenzie, told the WSJ.”Emerging markets in Asia have borne the brunt of this and there is no end in sight.”

Read more …

“If the antiviral treatments are not made massively available to the vaccinated people, the highly vaccinated countries will likely experience a tsunami of hospitalizations and death..”

Geert Vanden Bossche: Mass Covid Vax Triggering New Pandemics (NA)

In his first interview with The New American, renowned scientist Dr. Geert Vanden Bossche described why mass vaccination with non-sterilizing (“leaky”) vaccines could not lead to herd immunity, and why he expected the Covid infection and disease to aggravate in the vaccinated individuals. The New American is proud to become the first media to speak with Dr. Vanden Bossche about his latest research dedicated to the issue of Covid mass vaccination initiating a chain reaction of new pandemics and epidemics with a potentially catastrophic impact on global health. In addition to that, the doctor explained how the constant Covid reinfections trigger relapse or metastasis of certain cancers in vaccinated people.


If the antiviral treatments are not made massively available to the vaccinated people, the highly vaccinated countries will likely experience a tsunami of hospitalizations and deaths among the vaccinated, especially the elderly and those vaccinated early on, said Dr. Vanden Bossche. The doctor pleaded with the parents NOT to vaccinate their children against Covid. The vaccination would irreparably damage their innate immune system and leave them vulnerable to infection and re-infection by Covid and a range of other deadly pathogens. That would result in a massive loss of children’s lives.

Read more …

They should listen to Geert.

Low Demand For Young Kids’ Covid Vaccines Is Alarming Doctors (Pol.)

States where parents have hesitated to inoculate their children against Covid-19 are now ordering fewer doses of the vaccines for children under 5 than others, underscoring the challenge facing the Biden administration as a highly transmissible variant sweeps the nation. Experts broadly agree states shouldn’t order more doses than they think they’ll use. But they worry the low demand in states such as Alabama and Mississippi is a warning sign of the widening ambivalence among many parents about the benefits of vaccinating children against the virus and continuing politicization of health care. “Never before have we had a vaccine available for young children that has been in billions of people before it was given to a young child,” said Kawsar Talaat, a vaccine expert at the Johns Hopkins Bloomberg School of Public Health.

“The distrust in government, the distrust in public health and the distrust in science is growing and is very, very worrisome.” OLITICO contacted each state, the District of Columbia and Puerto Rico to ask how many of the recently authorized Moderna and Pfizer-BioNTech vaccines they ordered and 38 jurisdictions provided that data. Several of the states that reported placing some of the lowest orders relative to their under-5 populations also have low Covid-19 vaccination rates for 5- to 11-year-olds, an early indication that vaccinations for the youngest kids could follow a similar pattern. Since they became eligible last fall, 36.6 percent of 5- to 11-year-olds have received one Covid-19 shot and only 30 percent are fully vaccinated, compared to 69 percent of adults aged 18 to 49.

Public health experts and doctors attribute the slow uptake in part to the fact that many parents don’t believe that the vaccine is necessary, effective, or that its benefits outweigh any risks. [..] Florida — the only state to explicitly advise against Covid-19 vaccines for young children — did not pre-order any of the 5-and-under vaccines. It has now permitted practitioners and health systems to order the shots through a state portal, but is not making them available in state-run health programs.

Read more …

No credibility left. Or trust.

Health Experts Are Quitting The NIH and CDC In Droves (DM)

Two of America’s top health agencies are reportedly hemorrhaging staff as poor decision-making, described by staff as ‘bad science,’ has led to low morale. The Centers for Disease Control and Prevention (CDC) and the National Institutes of Health (NIH) are both suffering staff shortages, according to Dr. Marty Makary, a top public-health expert at Johns Hopkins University, writes at Common Sense, the Substack run by former New York Times columnist, Bari Weiss. Major decisions made by the agencies that hurt morale included support for masking in schools, school closures during the pandemic and the authorization of COVID-19 vaccines for children four and under.

Both agencies, along with the Food and Drug Administration (FDA) have been mired in controversy throughout the pandemic for inconsistent messaging and for decision-making that didn’t seem to line up with available science. ‘They have no leadership right now. Suddenly, there’s an enormous number of jobs opening up at the highest level positions,’ an anonymous NIH scientist told Common Sense. Schools became a battleground of the COVID-19 pandemic in America. When the virus stormed the world in 2020, many officials immediately shut things down – schools, retail stores, entertainment venues, restaurants – out of an fear of the unknown. Initial data showed children suffered limited risk when they contracted the virus, though, and that it was mainly the elderly and severely immunocompromised that bore the virus’s burden.

Despite the evidence, the CDC still recommended schools stay closed until the end of the 2019-2020 school year. While individual school districts were allowed to make decisions for themselves – and many Republican leaning counties did quickly reopen schools – many major metropolitan areas under Democratic control kept schools closed for extended periods of time. Earlier this year, Makary told DailyMail.com that the decision to keep schools closed was one of the worst made in the pandemic, specifically citing that minority communities who disproportionately lived in these areas were set the furthest behind academically. ‘CDC failed to balance the risks of COVID with other risks that come from closing schools,’ an anonymous CDC scientist told Common Sense.

Read more …

“Human reviewers randomly sampled 100 accounts per day (less than 0.00005% of daily users)..” “That’s it. No automation, no AI, no machine learning.”

Elon Musk Wants To Push Twitter Trial Back To 2023 (NYP)

Elon Musk told a judge Friday that he needs until next year to respond to Twitter’s “meritless” claims that the mogul tried to scuttle the $44 billion deal to buy the social media platform. Musk’s attorneys accused Twitter of fudging the figures over fake accounts and want the trial pushed back until at least Feb. 13, 2023, to gather information over the disputed bot data, according to court documents filed with the Delaware court Friday evening. “The core dispute over false and spam accounts is fundamental to Twitter’s value,” Musk’s lawyers wrote in the 14-page filing. “It is also extremely fact and expert intensive, requiring substantial time for discovery.”

Musk, who first agreed to buy the site for $44 billion in April, pulled out of the deal last week after repeatedly claiming Twitter may be lying about what percentage of its users are bots — a move that Twitter’s lawyers blasted in their suit filed Wednesday as a “bad faith” attempt to walk away from the agreement. Twitter is seeking an unusually short four-day Delaware Court of Chancery trial starting in September, which some observers have interpreted as a show of confidence in its legal case. Musk’s lawyers called Twitter’s request an unjustifiable “bid for extreme expedition,” and accused the company of “a two-month treasure hunt of delays, technical bottlenecks, evasive answers, and, ultimately, refusals,”

“In a May 6 meeting with Twitter executives, Musk was flabbergasted to learn just how meager Twitter’s process was,” Musk’s lawyers wrote in the filing. “Human reviewers randomly sampled 100 accounts per day (less than 0.00005% of daily users) and applied unidentified standards to somehow conclude every quarter for nearly three years that fewer than 5% of Twitter users were false or spam. That’s it. No automation, no AI, no machine learning.”

Read more …

“Have Americans been wearing their masks over the wrong bodily orifice? Is anyone conducting a peer-reviewed study on this?”

A Tale of the Taco (Jim Kunstler)

Has anyone noticed, by the way, that the US is under an invasion of breakfast tacos? So many of them, and so many kinds! Huevos con chorizo… Huevos y tocino… Huevos con queso! The diversity is staggering! Oddly, the US fast food industry has remained silent on the issue, despite the threat to their operations. Someone, please, send a memo to Homeland Security Secretary, Alejandro Mayorkas: a mighty influx of breakfast tacos marches day-and-night across our border with Mexico. They are being distributed — for free! — by bus and airplane from sea to shining sea — while millions of Egg McMuffins, Sausage, Egg, and Cheese Croissan’wiches, Grand Slamwiches, Kickin’ Maple Chicken BreakFEASTs, Country Fried Steak Biscuits, Chocolate Chip/Pecan Waffles, and Texas Melts go uneaten, wilting under the infrared Glo-Ray warming bulbs of American franchise eateries.


The wonder really is: how can America even manage to eat breakfast with its head so far up its ass? Perhaps Dr. Jill Biden can address that question in an upcoming speech to the National Association of Colorectal Surgeons. Now that the mRNA vaccines have Covid-19 so well under control — ask Dr. Anthony Fauci (he knows!) — shouldn’t we be concerned with this new scourge of cranialrectosis (the next pandemic)? Have Americans been wearing their masks over the wrong bodily orifice? Is anyone conducting a peer-reviewed study on this?

Read more …

“..Baraitser failed to recognize that the US government “misrepresented” facts in the case and the case was “pursued for ulterior political motives.”

Assange Fights Extradition To United States With Two Appeals (Dissenter)

On June 23, grounds for appeal were submitted against Patel’s Home Office. They claimed Patel erred by failing to recognize that the US-UK Extradition Treaty prohibited extradition for a political offense.Edward Fitzgerald QC emphasized to the district judge that due process protections, like the Magna Carta of 1215, were enshrined in UK law for centuries. He noted the US Constitution contained protections against arbitrary detention as well. Yet as the “Don’t Extradite Assange Campaign” observed, during proceedings Baraitser acted like she could discard the Magna Carta in favor of a lesser law, which the UK Parliament passed.

Attorneys also maintained Patel erred when she accepted that “specialty arrangements” with the US government would protect Assange from the death penalty, criminal contempt proceedings, and further prosecution for “conduct outside of the extradition request.”The legal team filed long-awaited grounds of appeal against District Judge Vanessa Baraitser’s decision on June 30. They claimed the district judge erred when she determined it would not be “unjust and oppressive” to extradite him given the passage of time. On human rights grounds, the attorneys maintained the district judge was wrong to determine extradition would not deny his right to fair trial, his right to be free from inhuman and degrading treatment, his right to freedom of expression, and his right to be free from a novel and unforeseeable extension of the law.

Further grounds of appeal included a claim that Baraitser failed to recognize that the US government “misrepresented” facts in the case and the case was “pursued for ulterior political motives. “His attorneys objected to Baraitser accepting a second superseding indictment that was sprung on Assange just weeks before the extradition hearing in September 2020. They contend she should have “excised” all allegations from this indictment to uphold “procedural fairness.” Patel approved Assange’s extradition on June 17, and the Westminster Magistrates’ Court ordered his extradition on April 20 after the UK Supreme Court refused to hear a prior appeal. But Assange’s legal team did not appeal that decision. They appealed an earlier decision issued by Baraitser on January 4, 2021.

Baraitser’s decision initially determined that extradition would be “oppressive” for mental health reasons and blocked extradition, however, the UK High Court of Justice overturned the decision after the US government appealed. The rest of the district judge’s decision was troubling to Assange’s attorneys, as well as press freedom and human rights groups opposed to the prosecution. It was not appropriate for the attorneys to file an appeal until after the US government’s appeal was settled. The challenge to the district judge’s refusal to recognize Assange’s right to freedom of expression is a relief to press freedom organizations. Human rights organizations like Amnesty International will appreciate the appeal related to the risk of cruel and inhuman treatment. Assange’s legal team requested an extension for drafting their appeals, and the US government did not object. The extension was granted by the UK High Court.

Read more …

 

 

 

 

 

 

 

 

 

Read the whole note

 

 


One of the best examples of cryptic plumage and mimicry in Australian birds is seen in the tawny frogmouth, which perch low on tree branches during the day camouflaged as part of the tree

 

 

Support the Automatic Earth in virustime with Paypal, Bitcoin and Patreon.

 

 

 

Jun 132022
 
 June 13, 2022  Posted by at 8:54 am Finance Tagged with: , , , , , , , ,  68 Responses »


Caravaggio I musici 1595-96

 

Russia Gains More Ground in Donbas Region (WSJ)
Should Russia Pay Reparations For The Ukraine War? (Barry Eichengreen)
Effort to Force Russia to Pay Reparations to Ukraine Faces Uphill Battle (WSJ)
Global Nuclear Arsenal Set To Grow For First Time In Decades (R.)
Army Official Predicted Vaccines Might Be Paused Over Myocarditis (ET)
99% Certain Justin Bieber’s Facial Paralysis Caused By Covid Vaccine (Kirsch)
USS Liberty: A Forgotten Anniversary (Moglia)
Greens Unlikely To Survive The Coming Winter (CoS)
Freeport LNG Explosion Raises Risk Of European Winter Energy Crisis (CNN)
Jan. 6 Committee Caught ‘Lying and Altering Evidence’ (TH)
Cost of Living Crisis a Result of Lockdowns, Experts Tell MPs (DS)
Elon Musk’s Twitter ‘Best’ Offer Looks Bogus (Gasparino)
Henry Kissinger At 99: How To Avoid Another World War (Ferguson)

 

 

 

 

3xvaxxed

 

 

 

 

Tulsi woke
https://twitter.com/i/status/1535920648622444545

 

 

 

 

Are the leaders of France, Germany and Italy going to talk some sense into Zelensky?

Russia Gains More Ground in Donbas Region (WSJ)

The leaders of France, Germany and Italy plan to meet with Ukrainian President Volodymyr Zelensky in Kyiv this week, officials said, as reports showed Russia making gains in the country’s east and Ukrainian officials urgently sought arms from Western nations to hold Russian forces at bay. French President Emmanuel Macron, German Chancellor Olaf Scholz and Italian Prime Minister Mario Draghi were planning to visit the Ukrainian capital on Thursday, said two European officials, who cautioned that plans could yet change. The trip would be the first to Ukraine since the beginning of the war for the three Western leaders.

News of the planned meeting came as Ukrainian officials said Russia had made fresh gains in its efforts to encircle and capture the city of Severodonetsk, which would bring Moscow significantly closer to its goal of controlling the Donbas area in the country’s east, its foremost target recently in the war. Serhiy Haidai, the Ukrainian governor of the Luhansk region, which includes Severodonetsk, said on Sunday that Russians had destroyed a second bridge connecting Severodonetsk to Lysychansk, a Ukrainian stronghold just across the Siverskyi Donets river. Russian forces also shelled a chemical plant in the city’s industrial section, where civilians had taken shelter in bunkers, Mr. Haidai said.

The battlefield advances were the latest evidence that Russia is outgunning Ukrainian forces, using its superior artillery power to steadily take territory. Its gains have thrown added focus onto Ukraine’s pleas for more powerful and longer-range artillery and other weaponry from the West, as well as on Ukraine’s lack of capacity to manufacture ammunition for the Soviet-era heavy weapons in its arsenal.

Read more …

Why would an economist want to opine on this?

Should Russia Pay Reparations For The Ukraine War? (Barry Eichengreen)

Russia’s war on Ukraine shows no sign of ending, but it is not too soon to start thinking about how to ensure postwar Ukraine’s stability, prosperity, and security. Already, two discussions are occurring: one about financing economic reconstruction, and the other about affirming Ukraine’s external security. The problem is that these discussions are proceeding separately, even though the issues are intimately related. Reconstruction costs are uncertain because the course of the war is uncertain. Ukraine’s prewar GDP was about $150bn (£120bn). Given a capital-output ratio of three, and assuming that a third of the capital stock will be destroyed, we are again talking about $150bn. As always, alternative assumptions yield alternative scenarios, but $150bn seems like a reasonable starting point.


This is not an impossible amount of aid for donors to commit. It is one-sixth the size of the NextGenerationEU program on which EU states agreed in July 2020. It is one-twelfth the size of the American Rescue Plan Act signed by Joe Biden in March 2021. Still, it seems wrong to ask the US and Europe to repair what Russia has broken. So, it is tempting to suggest that Ukraine’s reconstruction should be financed by garnishing Russian assets. At $284bn, the Bank of Russia’s frozen reserves would certainly fit the bill. True, there is a moral case for reparations: Russia started an unprovoked war and has almost certainly committed war crimes in prosecuting it. There is also an argument grounded in deterrence. As Volodymyr Zelenskiy put it at Davos this year: “If the aggressor loses everything, then it definitely deprives him of his motivation to start a war.”

Read more …

It’s a popular topic.

Effort to Force Russia to Pay Reparations to Ukraine Faces Uphill Battle (WSJ)

Since Russian forces swept into Ukraine on Feb. 24, swaths of the country’s buildings and infrastructure have been damaged or destroyed, leading to calls for Moscow to pay for the damage. As the leading western backer of Ukraine in the conflict, the U.S., which also holds some of Russia’s frozen assets, would likely be critical to any effort to get Moscow to pay for that damage. Yet even if Washington were to try to force Russia to pay reparations, the Biden administration would have limited options for making Moscow comply, particularly while the war rages on, according to former officials and legal experts. Ukrainian President Volodymyr Zelensky has called on Russia to compensate his country, saying in early May the war had caused more than $600 billion in damage to Ukraine’s infrastructure. The figure has only grown as the war continues.


There is, in theory, a pot of money for the West to draw on if it wants to force Russia to pay. Russian Finance Minister Anton Siluanov said in March that half the country’s gold and foreign-currency reserves were frozen as a result of sanctions, denying Moscow access to roughly $300 billion, according to the TASS news agency. The share of Russia’s foreign-exchange reserves held in Chinese currency wasn’t affected. When the Biden administration in late April submitted its $33 billion supplemental funding request for Ukraine, the White House said it was “proposing legislation to streamline the process to recoup proceeds from seized and forfeited assets and use them to remediate the harm caused in Ukraine.”

Read more …

Cui bono?

Global Nuclear Arsenal Set To Grow For First Time In Decades (R.)

The global nuclear arsenal is expected to grow in the coming years for the first time since the cold war, and the risk of such weapons being used is the greatest in decades, a leading conflict and armaments thinktank says. Russia’s invasion of Ukraine and western support for Kyiv has heightened tensions among the world’s nine nuclear-armed states, the Stockholm International Peace Research Institute (Sipri) thinktank said on Monday in a new set of research. While the number of nuclear weapons fell slightly between January 2021 and January 2022, Sipri said that unless immediate action was taken by the nuclear powers, global inventories of warheads could soon begin rising for the first time in decades.

“All of the nuclear-armed states are increasing or upgrading their arsenals and most are sharpening nuclear rhetoric and the role nuclear weapons play in their military strategies,” Wilfred Wan, the director of Sipri’s weapons of mass destruction program, said in the thinktank’s 2022 yearbook. “This is a very worrying trend.” Three days after Moscow’s invasion of Ukraine, which the Kremlin calls a “special military operation”, President Vladimir Putin put Russia’s nuclear deterrent on high alert. He has also warned of consequences that would be “such as you have never seen in your entire history” for countries that stood in Russia’s way.

Russia has the world’s biggest nuclear arsenal with a total of 5,977 warheads, 550 more than the United States. The two countries possess more than 90% of the world’s warheads, though Sipri said China was in the middle of an expansion with more than 300 new missile silos according to the latest estimate. Sipri said the global number of nuclear warheads fell from 13,080 in January 2021 to 12,705 in January 2022. An estimated 3,732 warheads were deployed with missiles and aircraft, and around 2,000 – nearly all belonging to Russia or the US – were kept in a state of high readiness.

Read more …

No, it’s too rare.

Army Official Predicted Vaccines Might Be Paused Over Myocarditis (ET)

A U.S. military official predicted a pause in the administration of the Moderna and Pfizer COVID-19 vaccines could happen if more cases of post-vaccination heart inflammation were detected, according to newly obtained emails. Harry Chang, a U.S. Army lieutenant colonel, made the prediction on April 27, 2021—the same day the director of the U.S. Centers for Disease Control and Prevention (CDC) said the agency was not seeing a safety signal when it came to heart inflammation experienced after getting a COVID-19 vaccine. Chang noted the pause in the administration of the Johnson & Johnson vaccine over blood clots and said an increased number of heart inflammation issues could trigger a similar action.


“A pause of the Pfizer/Moderna administration (much like the J&J blood clot pause) will have an adverse impact on US/CA vaccination rates; assessed as unlikely due to causes of myocarditis can come from multiple sources (eg. COVID, other conditions, other vaccines/prescriptions, etc),” Chang wrote in an email. Myocarditis is a type of heart inflammation. “However, increased reported #s & media attention is likely to trigger a safety review pause by ACIP/FDA,” he added, referring to the Advisory Committee on Immunization Practices, which advises the CDC on vaccines, and the U.S. Food and Drug Administration (FDA), which decides whether to clear immunizations. Chang was talking to Tricia Blocher, an official at the California Department of Public Health, and other California and military officials. He was reacting to a story about the U.S. Department of Defense detecting a higher-than-expected number of cases of heart inflammation in troops following COVID-19 vaccination.”

Montagnier

Read more …

Very rare,

99% Certain Justin Bieber’s Facial Paralysis Caused By Covid Vaccine (Kirsch)

The VAERS data shows that Ramsay Hunt Syndrome (RHS) is 160 times more likely after a COVID vaccination than for all the other vaccines combined in any given year. And if you exclude the anthrax vaccine from that comparison, the likelihood is simply too high to calculate (0 cases in 32 years). So the COVID vaccine should definitely be considered as a possible cause for this rare disease because when you’ve been vaccinated, it’s no longer rare. For example, one doctor tweeted he say 4 cases in a month, but had never seen any cases before in the 32 years he’s practiced medicine. All the cases had gotten the COVID vax 3 to 4 months earlier.


I show below that the estimated rate of RHS after COVID vaccination is likely at least 338 cases per 100,000. The medical literature says it occurs naturally in 5 cases per 100,000. Therefore, because it is much more likely after vaccine than by chance, it is 99% likely that Justin’s RHS was caused by the vaccine, and only 1% chance that he got “unlucky.” Sadly, it’s unlikely Bieber’s doctors will ever acknowledge that so it’s unlikely he’ll get the care he needs (treat both the RHS and the vaccine injury). He’ll simply assume he is just unlucky. The mainstream press isn’t doing its job if they don’t report this (which they won’t).

Read more …

“..the attack on the Liberty dramatically demonstrates the nature of who exercises actual power in the United States.”

USS Liberty: A Forgotten Anniversary (Moglia)

It is a property of the past to sink into oblivion, and of unpleasant truths to fade into evanescence. To such past belongs the attack on the USS Liberty. When to the session of sweet silent thought I summon up remembrance of things past, Israel’s 1967 war of Middle East invasion is/was for me but a negligible blip compared to other important personal events. Such as my getting ready to read the thesis for my degree in Electronic Engineering, in Genova, Italy. Therefore, without particular consciousness I submitted to the sentences of the official media without examining the authority of the judge. My first doubts arose not long later when I decided to visit the Eastern Orthodox Saint Catherine’s Monastery, located on the Sinai Peninsula at the very foot of Mt. Sinai. It could then only be reached from Tel Aviv via Sharm-el-Sheikh and a bus trip.


On welcoming the tourists on the bus the guide announced with pride that the Sinai was “now and forever an unalienable part of Israel.” I found the declaration irrelevant, if not odd, but I consider that moment as the beginning of my associated historical interest. The official US line is that, on Jun 8, 1967, the Israelis mistakenly attacked by air, and torpedoed by sea, an unarmed US intelligence ship, killing 34 sailors and wounding 171 others. 2022 marks the 55th anniversary of that attack. Following are some details of the ship, of the episode and of its aftermath. For, similar to occasions that perhaps we all have felt, a detail that uncalled-for returns to mind, rekindles fuller memories of a larger connected event, not otherwise spontaneously recalled. The detail is the inspired arrogance of the Israeli guide I mentioned. More in general, I think that the attack on the Liberty dramatically demonstrates the nature of who exercises actual power in the United States.

Read more …

“..there is simply no way of maintaining even a fraction of the western standard of living in the event that anyone were foolish enough to remove the fossil fuels..”

Greens Unlikely To Survive The Coming Winter (CoS)

By 2017, real-life James Bond Villain Klaus Schwab was inviting celebrities, representatives of the technocracy, the godzillionaires and the political class to fly their carbon-belching private jets to Switzerland to learn about The Fourth Industrial Revolution, and to discuss how they could get the little people to cut their carbon footprints. By 2020, this had morphed in to the Green New Great Reset in which we – but not they, of course – would own nothing, and allegedly be happy as we ate our insects, spent our central bank digital basic incomes, and were driven around in a new fleet of corporate-owned, hydrogen-powered self-driving cars. There was – to paraphrase Captain Blackadder – just one teensy-weensy problem with the Great Plan adopted by the Davos crowd… it was bollocks!

Only by ignoring the physicists, engineers and technicians who were expected to make it happen, and by listening instead to the siren voices of climate NGOs, bankers and economists, could the technocracy convince itself that the world could seamlessly transition to the proposed bright green future. And to our cost, politicians of all stripes who bought into this nonsense are now grappling with the inevitable economic consequences. The problem, at is simplest, is that much of what was considered “green” was largely a conjuring trick. States like Britain and Germany, which claim to be world leaders simply offshored their most polluting industries (and a large part of the waste) to less prosperous parts of the world where governments were happy to load the environmental costs onto the indigenous population in exchange for tradable foreign currency.

This was the only politically-acceptable means of hiding the fact that there is simply no way of maintaining even a fraction of the western standard of living in the event that anyone were foolish enough to remove the fossil fuels which make up some 80 percent of the energy mix in the UK, and 85 percent of the global economy. Even this is a simplification of the problem because each fuel source has its uses in specific niches of the global economy and so is not interchangeable. Wind and solar, for example, cannot generate the heat required to manufacture steel (although they can recycle it) or, ironically, to produce the silicon wafers and high-grade glass required in solar panels.

Read more …

In 2021, LNG was maybe 10% of EU gas. It will have to be much more going forward. Disaster assured.

Freeport LNG Explosion Raises Risk Of European Winter Energy Crisis (CNN)

A fire at one of the world’s biggest suppliers of liquefied natural gas has thrown Europe’s fragile energy security into doubt and spooked global gas markets. Freeport LNG, a liquefied natural gas (LNG) producer in Texas, will shut its doors for at least three weeks, the company confirmed to CNN Business. “The cause of the fire at Freeport LNG’s liquefaction facility on Quintana Island remains under investigation,” Heather Browne, a company spokesperson, said.
Europe has snapped up global stocks of LNG in recent months as it attempts to sharply pivot away from Russia’s natural gas exports. The region, including the United Kingdom, imported 28.2 million tons between February and April, according to Independent Commodity Intelligence Services — up 29% from the same period last year.


The United States is the world’s largest supplier of LNG, accounting for just over a fifth of global exports, according to data from analytics firm Vortexa. Output from the Freeport LNG facility makes up 18% of these exports. With no direct pipeline between the United States and Europe, American energy companies cool their natural gas for export to -260 degrees Fahrenheit and place the liquefied gas on tanker ships for overseas transport. That process, though more complex than land transport, has become crucial to Europe meeting its energy demands during Russia’s invasion of Ukraine. The Freeport blast could deal a blow to that stopgap solution, particularly if the facility fails to come back online soon. “Despite the initial estimate of three weeks of downtime by the operator, the production impact is likely to stretch into July,” Felix Booth, head of LNG at Vortexa, told CNN Business.

Read more …

Adam Schiff is back.

Jan. 6 Committee Caught ‘Lying and Altering Evidence’ (TH)

The January 6 committee is facing pressure as details reveal it lied and altered evidence to favor Democrat’s radical narrative of the Capitol Hill protests. Rep. Jim Jordan (R-OH) called out the committee for changing text messages between him and former White House chief of staff Mark Meadows during an interview on Fox News. A spokesperson admitted that the messages Rep. Adam Schiff (D-CA.) showed during the hearings had been adjusted to support the idea that Meadows wanted former Vice President Mike Pence to overturn the election results. In a statement, the spokesperson confessed that “the Select Committee on Monday created and provided Representative Schiff a graphic to use during the business meeting quoting from a text message from ‘a lawmaker’ to Mr. Meadows.

The graphic read, ‘On January 6, 2021, Vice President Mike Pence, as President of the Senate, should call out all electoral votes that he believes are unconstitutional as no electoral votes at all.’ In the graphic, the period at the end of that sentence was added inadvertently. The Select Committee is responsible for and regrets the error.” Jordan fired back saying “this committee has altered evidence and lied to the American people about it, so much so that they had to issue a statement which says, ‘We regret the error,’ which is government speak for, ‘We got caught lying.’” The “error” was that Schiff presented the message out of context by cutting out key words and ending it with a period.

According to the Federalist, the original text message was a summary of a legal briefing Jordan forwarded from lawyer Joseph Schmitz to Meadows the day before the Capitol protests, meaning that a “lawmaker” did not write the message at all. Jordan has been blocked from taking part in the committee by House Speaker Nancy Pelosi (D-CA.). He is now undergoing his own investigation of the events that took place that day last year.

Read more …

“..the ability of governments to respond to this cost-of-living crisis via either tax cuts or increased benefits is limited due to the hit to public finances caused by lockdown-induced government spending.”

Cost of Living Crisis a Result of Lockdowns, Experts Tell MPs (DS)

The cost of living crisis and runaway inflation are a result of imposing ruinous lockdowns on society, experts have told MPs and Peers. The comments came in the latest meeting of the the Pandemic Response and Recovery All-Party Parliamentary Group (APPG). Chaired by the Rt Hon Esther McVey MP, the group heard from experts about the societal consequences of closing businesses and schools, prohibiting healthcare, ordering the public to stay at home and unchecked money printing. One businessman told the group how government COVID-19 policies personally affected him, costing him £120,000, destroying his previously thriving business and leaving him in debt. Professor of Industrial Economics at the University of Nottingham Business School, David Paton, explained why lockdowns are at the root of the current crisis:


“Eye-watering sums of money were spent during lockdowns, on furlough and business support schemes which helped mask the inevitable economic consequences we are now seeing. Many of our current problems could have been avoided had the government carried out an effective cost-benefit analysis of lockdowns and other restrictions. Quite simply, the lack of spending opportunities during lockdown contributed to a build up of personal and corporate savings. As restrictions eased, people began to spend these savings and, combined with the supply chain issues that built up in the meantime, sustained inflation became the inevitable result. Even worse, having spent about £70 billion, paying healthy people not to work and some £150 billion in total on support measures, the ability of governments to respond to this cost-of-living crisis via either tax cuts or increased benefits is limited due to the hit to public finances caused by lockdown-induced government spending.”

Read more …

Gasparino doesn’t appear to like Musk.

Elon Musk’s Twitter ‘Best’ Offer Looks Bogus (Gasparino)

[..] here’s the viewpoint of two bankers, one who has worked with his Tesla board, and another at a firm involved in his Twitter financing machinations. They say virtually the same thing. Musk is telling people he still wants Twitter. He thinks he can make it work as a private company, clean up the bot problem and sell it at a profit sometime in the next five years. But Musk wants the company (like everything else) on his terms, which are always in flux. He doesn’t read balance sheets but goes by his gut and has no issue with flouting conventional banker norms (i.e. your word is your bond) to get his prize. His gut told him to waive due diligence. It’s now telling him that even though he signed a deal leaving him on the hook for the $1 billion breakup fee and maybe more in damages, he can get Twitter to the table and agree to his terms, aka a much lower purchase price.

He might be right. Twitter first said it would enforce the initial deal terms, maybe even go to court, but now appears to be playing ball with Musk. It recently said it will turn over more data on its bot issue — a move that means talks are back on. The bankers tell me the Twitter board knows that finding another suitor will be difficult even at around the $40 a share it’s trading at now. The board can’t just accept anything, but also can’t tell Musk to just pound sand. So the thinking among my two guys is that Twitter agrees to a lower price, possibly significantly lower, and Crazy Elon gets his public square, albeit for much cheaper. That means the deal is on, right? Seems so. But no one really knows with Crazy Elon.

Read more …

Kissinger and Niall Ferguson. Not my favorite people, but here goes…

Henry Kissinger At 99: How To Avoid Another World War (Ferguson)

Henry Kissinger turned 99 on May 27. Born in Germany at the height of the Weimar hyperinflation, he was not yet ten years old when Hitler came to power and was just 15 when he and his family landed as refugees in New York City. It is somehow almost as astonishing that this former US secretary of state and giant of geopolitics left office 45 years ago. As he heads towards his century, Kissinger has lost none of the intellectual firepower that set him apart from other foreign policy professors and practitioners of his and subsequent generations. In the time I have spent writing the second volume of his biography, Kissinger has published not one but two books — the first, co-authored with the former Google CEO Eric Schmidt and the computer scientist Daniel Huttenlocher, on artificial intelligence, the second a collection of six biographical case studies in leadership.


We meet at his rural retreat, deep in the woods of Connecticut, where he and his wife, Nancy, have spent most of their time since the onset of Covid. The pandemic had its silver linings for them. It was the first time in 48 years of marriage that the compulsively peripatetic Dr Kissinger came to an enforced halt. Cut off from the temptations of Manhattan restaurants and Beijing banquets, he has shed pounds. Though he walks with a stick, depends on a hearing aid and speaks more slowly than of old in that unmistakable bullfrog baritone, his mind is as keen as ever. Nor has Kissinger lost his knack for infuriating the liberal professors and progressive or “woke” students who dominate Harvard, the university where he built his reputation as a scholar and public intellectual in the 1950s and 1960s.

Read more …

 

 

 

 

 

 

 

Bach

 

 

 

 

Mariupol

 

 

Support the Automatic Earth in virustime with Paypal, Bitcoin and Patreon.

 

 

 

Feb 272019
 


Salvador Dali Remorse – Sphinx Embedded in the Sand 1931

 

Michael Cohen Testimony: Trump A ‘Racist’, ‘Cheat’ And ‘Conman’ (G.)
3 Days That Will Decide Brexit – March 12-14th Will Seal Britain’s Fate (Exp.)
UK Economy Could Be 9% Weaker Under No-Deal Brexit – Government (G.)
The UK Doesn’t Have The Right Pallets For Exporting To The EU (BI)
The War on Venezuela is Built on Lies (Pilger)
Survival of the Richest (Nomi Prins)
Hey Yellen, It Was Trump Who Was Right (Every)
Now that Housing Bubble #2 Is Bursting…How Low Will It Go? (CHS)
Russia’s Share Of European Gas Market Surges To Almost 37%, Dwarfing LNG (RT)
UK Hunger Survey To Measure Food Insecurity (G.)
Glyphosate Found In 95% Of Wine And Beer (Ind.)
Am I The Only One Who’s Terrified About The Warm Weather? (G.)

 

 

Lots of wet panties, male and female, today in anticipation of Michael Cohen’s testimony. Of course, it’s been leaked, full text is here. A few quotes:

I may once again be in a party of one, but I think it’s awfully weak, it’s grasping for stuff rather than conveying it. First, there’s the inevitable Assange link:

In July 2016 [..] Mr. Stone told Mr. Trump that he had just gotten off the phone with Julian Assange and that Mr. Assange told Mr. Stone that, within a couple of days, there would be a massive dump of emails that would damage Hillary Clinton’s campaign. Mr. Trump responded by stating to the effect of “wouldn’t that be great.”

Anything related to Assange, whether from Mueller or Cohen, lacks credibility as long as he can’t defend himself against it. And Trump merely says: wouldn’t that be great? Not exactly the stuff of collusion or conspiracy.

Just as inevitable in smear campaigns: Trump the racist.

Mr. Trump is a racist. The country has seen Mr. Trump court white supremacists and bigots. You have heard him call poorer countries “shitholes.” While we were once driving through a struggling neighborhood in Chicago, he commented that only black people could live that way. And, he told me that black people would never vote for him because they were too stupid.

Calling a country a shithole is not racist. The policies that have created a situation in which many shithole countries are populated by black people stem from many decades of US/Europe policies that predate Trump. The rest is not racist either, if you look closer. Perhaps Trump is a bit racist, like so many Americans. But Cohen’s prepared words don’t show that.

Also: Trump doesn’t tell the full truth about his wealth. But Michael Cohen always has…

It was my experience that Mr. Trump inflated his total assets when it served his purposes, such as trying to be listed among the wealthiest people in Forbes, and deflated his assets to reduce his real estate taxes.

Gee, lock him up. I don’t get it. There’s so much wrong with Trump, but politics and media have singled out Russia collusion, and then failed to prove a thing about it, and now they switch to ‘racist conman’, with the weakest of accusations. I swear, they might as well all be working for the Donald.

Michael Cohen Testimony: Trump A ‘Racist’, ‘Cheat’ And ‘Conman’ (G.)

Michael Cohen is to accuse Donald Trump of being a “conman” and a “cheat” who had advanced knowledge that a longtime adviser was communicating with WikiLeaks during the 2016 campaign, according to opening testimony he will deliver to Congress on Wednesday. Cohen’s prepared remarks, confirmed by the Guardian, include a series of explosive allegations about the presidential campaign. The president’s former lawyer, who will publicly testify before the House oversight committee on Wednesday, will state that Trump was told by Roger Stone that WikiLeaks would publish emails stolen from the Democratic National Committee and Hillary Clinton’s campaign.

“In July 2016, days before the Democratic convention, I was in Mr Trump’s office when his secretary announced that Roger Stone was on the phone. Mr Trump put Mr Stone on the speakerphone,” Cohen’s opening statement reads. “Mr Stone told Mr Trump that he had just gotten off the phone with Julian Assange and that Mr Assange told Mr Stone that, within a couple of days, there would be a massive dump of emails that would damage Hillary Clinton’s campaign. Mr Trump responded by stating to the effect of ‘wouldn’t that be great.’” The remarkable allegations by Cohen go further than what has been made public thus far by the special counsel investigation into potential collusion between the Trump campaign in Moscow.

Cohen will also suggest his instructions to lie to Congress about a possible Trump Tower deal in Moscow during the 2016 campaign came from the president – albeit not directly. “In conversations we had during the campaign, at the same time I was actively negotiating in Russia for him, he would look me in the eye and tell me there’s no business in Russia and then go out and lie to the American people by saying the same thing,” Cohen will say. “In his way, he was telling me to lie.” “Mr Trump did not directly tell me to lie to Congress. That’s not how he operates,” he will add.

Read more …

Humor me and please read this. It’s so confusing that you almost forget it’s also complete madness.

3 Days That Will Decide Brexit – March 12-14th Will Seal Britain’s Fate (Exp.)

In a dramatic statement to the House of Commons, Mrs May confirmed that she will put her Withdrawal Agreement – including whatever additional assurances she has secured from Brussels – to a “meaningful vote” by March 12. If that fails, MPs will be offered two separate votes the following day – one on a no-deal Brexit, and the other on requesting an extension to the two-year Article 50 negotiation process to delay EU withdrawal beyond March 29. The sequence of votes will be proposed in an amendable motion tabled by the Prime Minister for debate and vote in the Commons on Wednesday. To uproar in the Commons, Mrs May told MPs: “They are commitments I am making as Prime Minister and I will stick by them, as I have previous commitments to make statements and table amendable motions by specific dates.”

Deputy Political Editor for Sky News Beth Rigby tweeted of Mrs May’s speech: “This really is a big shift. “May has finally played her cards and sided with the Europhile wing of her party .. “Vote for her deal (March 12) Vote for no-deal (March 13) Vote for delay (March 14) .. “Only yesterday she refused to even acknowledge there might have to be a delay to Brexit.”

Mrs May has declared a meaningful vote will take place by March 12, where MPs will vote on her Brexit deal. Should this deal not be voted through, on March 13, MPs will then be offered two separate votes by March 13 on whether the UK leaves with no deal or delays Brexit beyond March 29. The delay will then be voted on March 14, when a motion would be brought forward on whether Parliament wishes to seek a short limited extension to Article 50. If the House votes for an extension, this extension will have to be approved by the House with the EU and then necessary legislation will be brought forward to change the exit date.

[..] In her statement to MPs following a Cabinet meeting with senior colleagues at 10 Downing Street, Theresa May said she wanted to set out “three further commitments” to the Commons. She said: “First, we will hold a second meaningful vote by Tuesday, March 12 at the latest. “Second, if the Government has not won a meaningful vote by Tuesday, March 12, then it will – in addition to its obligations to table a neutral amendable motion under Section 13 of the EU Withdrawal Act – table a motion to be voted on by Wednesday March 13 at the latest, asking this House if it supports leaving the EU without a Withdrawal Agreement and a framework for a future relationship on March 29.

“So the United Kingdom will only leave without a deal on March 29 if there is explicit consent in the House for that outcome. “Third, if the House, having rejected the deal negotiated with the EU, then rejects leaving on March 29 without a Withdrawal Agreement and future framework, the Government will on March 14 bring forward a motion on whether Parliament wants to seek a short, limited extension to Article 50.” The Prime Minister also said she still believes she will be able to secure a deal: “I’ve had a real sense from the meetings I’ve had, and the conversations I’ve had in recent days, that we can achieve that deal. “It’s within our grasp to leave with a deal on March 29 and that’s where all of my energies are going to be focused.”

Read more …

Scared yet? Because that’s the idea.

UK Economy Could Be 9% Weaker Under No-Deal Brexit – Government (G.)

The government has issued a bleak warning over a no-deal Brexit, estimating the UK economy could be 9% weaker in the long run, businesses in Northern Ireland might go bust and food prices will increase. In an official document only published after repeated demands by the former Conservative MP Anna Soubry, the government also revealed it was behind on contingency planning for a third of “critical projects” in relation to business and trade. The latest no-deal notice states:

• The economy would be 6%-9% smaller over the next 15 years than it otherwise might have been, in the event of no deal, in line with Bank of England forecasts. • The flow of goods through Dover would be “very significantly reduced for months”. • With 30% of food coming from the EU, prices are likely to increase and there is a risk that panic buying might create shortages. • Only six of the 40 planned international trade agreements have been signed.

The document was published just hours after Theresa May was forced to promise two key votes, allowing MPs the option to reject no deal and to potentially delay Brexit for a short period, following pressure from remain-minded cabinet ministers. The prime minister set out a timetable that includes a vote on her Brexit deal by 12 March; if that fails, a vote the following day to support no deal, and if that also fails, a vote on 14 March on extending article 50. The delay is likely to further agitate the Tory party’s Eurosceptics, with Brexiter ministers including Andrea Leadsom and Liz Truss expressing their frustration over the issue in cabinet on Tuesday morning. Speaking in the House of Commons on Tuesday, May did not specify the length of any delay, saying only that she would prefer it to be the shortest possible. An extension beyond the end of June would involve the UK taking part in the European parliament elections.

[..] The no-deal notice said customs checks alone could cost businesses £13bn a year and that it was impossible to predict the impact of new tariffs. It said this was partly because the government’s communications to businesses and individuals about the need to prepare for no deal had not been effective. [..] The EU, which would treat the UK as a third country in the event of no deal, could impose tariffs of 70% on beef exports, 45% on lamb and 10% on cars, it said. “This would be compounded by the challenges of even modest reductions in flow at the border.”

Read more …

Absolutely fabulous.

The UK Doesn’t Have The Right Pallets For Exporting To The EU (BI)

The UK government is due to hold emergency talks with industry leaders on Tuesday after discovering that the country doesn’t have the right pallets to continue exporting goods to the European Union if it leaves without a deal next month. Under strict EU rules, pallets – wooden or plastic structures that companies use to transport large volumes of goods – arriving from non-member states must be heat-treated or cleaned to prevent contamination and have specific markings to confirm that they meet standards. Most pallets that British exporters are using do not conform to the rules for non-EU countries, or “third countries,” as EU member states follow a much more relaxed set of regulations.

The Department for Environment, Food, and Rural Affairs last week told business leaders that the UK would not have enough EU-approved pallets for exporting to the continent if it leaves without a withdrawal agreement next month. That means UK companies would be competing for a small number of pallets that meet EU rules, and those that miss out would be forced to wait for new pallets, which could take weeks to be ready. DEFRA has arranged for a conference call on Tuesday morning to discuss the pallet shortage, with 31 days until Brexit day on March 29. “It is the tiny, procedural, mundane-seeming stuff that will absolutely trip people up,” one industry figure briefed by Theresa May’s government told Business Insider, adding that the country was “not even remotely ready” for a no-deal Brexit.

Read more …

Chavez is the guy US intelligence have been chasing for so long, and still trying to get at after his death.

Got to love the man quoting world literature. Also because in the next article, Nomi Prins does the same.

The War on Venezuela is Built on Lies (Pilger)

Travelling with Hugo Chavez, I soon understood the threat of Venezuela. At a farming co-operative in Lara state, people waited patiently and with good humor in the heat. Jugs of water and melon juice were passed around. A guitar was played; a woman, Katarina, stood and sang with a husky contralto. “What did her words say?” I asked. “That we are proud,” was the reply. The applause for her merged with the arrival of Chavez. Under one arm he carried a satchel bursting with books. He wore his big red shirt and greeted people by name, stopping to listen. What struck me was his capacity to listen. But now he read. For almost two hours he read into the microphone from the stack of books beside him: Orwell, Dickens, Tolstoy, Zola, Hemingway, Chomsky, Neruda: a page here, a line or two there. People clapped and whistled as he moved from author to author.

Then farmers took the microphone and told him what they knew, and what they needed; one ancient face, carved it seemed from a nearby banyan, made a long, critical speech on the subject of irrigation; Chavez took notes. Wine is grown here, a dark Syrah type grape. “John, John, come up here,” said El Presidente, having watched me fall asleep in the heat and the depths of Oliver Twist. “He likes red wine,” Chavez told the cheering, whistling audience, and presented me with a bottle of “vino de la gente.” My few words in bad Spanish brought whistles and laughter. Watching Chavez with the people, la gente, made sense of a man who promised, on coming to power, that his every move would be subject to the will of the people. In eight years, Chavez won eight elections and referendums: a world record. He was electorally the most popular head of state in the Western Hemisphere, probably in the world.

Read more …

See? Like Pilger and Chavez, Nomi talks about literature. No space here to do this justice, please go read it. Key point: unlike the poor(er), the rich don’t live off the rewards of labor, but of that of wealth.

Survival of the Richest (Nomi Prins)

In George Orwell’s iconic 1945 novel, Animal Farm, the pigs who gain control in a rebellion against a human farmer eventually impose a dictatorship on the other animals on the basis of a single commandment: “All animals are equal, but some animals are more equal than others.” In terms of the American republic, the modern equivalent would be: “All citizens are equal, but the wealthy are so much more equal than anyone else (and plan to remain that way).” Certainly, inequality is the economic great wall between those with power and those without it. As the animals of Orwell’s farm grew ever less equal, so in the present moment in a country that still claims equal opportunity for its citizens, one in which three Americans now have as much wealth as the bottom half of society (160 million people), you could certainly say that we live in an increasingly Orwellian society.

Or perhaps an increasingly Twainian one. After all, Mark Twain and Charles Dudley Warner wrote a classic 1873 novel that put an unforgettable label on their moment and could do the same for ours. The Gilded Age: A Tale of Today depicted the greed and political corruption of post-Civil War America. Its title caught the spirit of what proved to be a long moment when the uber-rich came to dominate Washington and the rest of America. It was a period saturated with robber barons, professional grifters, and incomprehensibly wealthy banking magnates. (Anything sound familiar?) The main difference between that last century’s gilded moment and this one was that those robber barons built tangible things like railroads.

Today’s equivalent crew of the mega-wealthy build remarkably intangible things like tech and electronic platforms, while a grifter of a president opts for the only new infrastructure in sight, a great wall to nowhere. In Twain’s epoch, the U.S. was emerging from the Civil War. Opportunists were rising from the ashes of the nation’s battered soul. Land speculation, government lobbying, and shady deals soon converged to create an unequal society of the first order (at least until now). Soon after their novel came out, a series of recessions ravaged the country, followed by a 1907 financial panic in New York City caused by a speculator-led copper-market scam.

To fully grasp the nature of inequality in our twenty-first-century gilded age, it’s important to understand the difference between wealth and income and what kinds of inequality stem from each. Simply put, income is how much money you make in terms of paid work or any return on investments or assets (or other things you own that have the potential to change in value). Wealth is simply the gross accumulation of those very assets and any return or appreciation on them. The more wealth you have, the easier it is to have a higher annual income.

Read more …

Tyler got his hands on a piece by Michael Every at Dutch Rabobank.

Hey Yellen, It Was Trump Who Was Right (Every)

Rabo are already predicting a US recession in 2020, which will drag many down with it, and as the OECD now warns that swollen corporate debt piles, which central banks have so encouraged, is of ever lower quality and potentially more dangerous than it was back in 2008. 54% of investment grade bonds are now BBB-rated, up from 30% in 2008. The OECD argues “In the case of a downturn, highly leveraged companies would face difficulties in servicing their debt, which in turn, through higher default rates, may amplify the effects…Any developments in these areas will come at a time when non-financial companies in the next three years will have to pay back or refinance about USD4 trillion worth of corporate bonds. This is close to the total balance sheet of the US Federal Reserve.”

Guess what guys? China is right ahead of you on that curve – which is why it is trying to find another whale to nuke ASAP: things are looking truly ugly given many firms can’t even pay the interest on their debt, let alone the principle. And guess what else? That OECD and China warning sounds like an admission of the Minsky debt dynamic that you might have thought all central banks would have to have learned the lessons of post-GFC. Apparently not, however – because they think they already know everything. As former Fed Chair Yellen mocked yesterday, Trump doesn’t understand what the Fed’s dual mandates of price stability and stable employment are. That might well be true.

But was it the Fed or Trump who publicly called out how dangerous continuous Fed rate hikes are in a debt-laden, Minsky-teetering financial system where the yield curve is still inverted 9bps on 1s-5s even after a pause? I think Yellen will find it was Trump who was right and the Fed who was forced into a humiliating and frankly incongruous policy U-turn. So much expertise! Trump also made a similar intervention over oil prices overnight, and once again they dipped, though are opening up strongly this morning in Asia. [..] easy policy in the UK; ultra-easy policy in China; promises of more easing in Japan; an ECB U-turn to come(?); and the Fed on hold and stopping QT soon at least. And that’s with bullish markets and reasonable global growth – just wait until things head south: if all you have is a nuke, everything looks like a whale.

Read more …

Every bubble that bursts ends up below its starting level. Nicole had these graphs, Tulip, South Sea etc., that showed just that. This graph doesn’t quite do that.

Now that Housing Bubble #2 Is Bursting…How Low Will It Go? (CHS)

There are two generalities that can be applied to all asset bubbles: 1. Bubbles inflate for longer and reach higher levels than most pre-bubble analysts expected 2. All bubbles burst, despite mantra-like claims that “this time it’s different” The bubble burst tends to follow a symmetrical reversal of very similar time durations and magnitudes as the initial rise. If the bubble took four years to inflate and rose by X, the retrace tends to take about the same length of time and tends to retrace much or all of X. If we look at the chart of the Case-Shiller Housing Index below, this symmetry is visible in Housing Bubble #1 which skyrocketed from 2003-2007 and burst from 2008-2012.

Housing Bubble #1 wasn’t allowed to fully retrace the bubble, as the Federal Reserve lowered interest rates to near-zero in 2009 and bought $1+ trillion in sketchy mortgage-backed securities (MBS), essentially turning America’s mortgage market into a branch of the central bank and federal agency guarantors of mortgages (Fannie and Freddie, VA, FHA). These unprecedented measures stopped the bubble decline by instantly making millions of people who previously could not qualify for a privately originated mortgage qualified buyers. This vast expansion of the pool of buyers (expanded by a flood of buyers from China and other hot-money locales) drove sales and prices higher for six years (2012-2018).

As noted on the chart below, this suggests the bubble burst will likely run from 2019-2025, give or take a few quarters. The question is: what’s the likely magnitude of the decline? Scenario 1 (blue line) is a symmetrical repeat of Housing Bubble #2: a retrace of the majority of the bubble’s rise but not 100%, which reverses off this somewhat higher base to start Housing Bubble #3. Since the mainstream consensus denies the possibility that Housing Bubble #2 even exists (perish the thought that real estate prices could ever–gasp–drop), they most certainly deny the possibility that prices could retrace much of the gains since 2012.

More realistic analysts would probably agree that if the current slowdown (never say recession, it might cost you your job) gathers momentum, some decline in housing prices is possible. They would likely agree with Scenario 1 that any such decline would be modest and would simply set the stage for an even grander housing bubble #3. But there is a good case for Scenario 2, in which price plummets below the 2012 lows and keeps on going, ultimately retracing the entire housing bubble gains from 2003.

Read more …

Interesting how Europe smears Putin wherever it can, except where it counts.

Russia’s Share Of European Gas Market Surges To Almost 37%, Dwarfing LNG (RT)

Russia’s state-run energy major Gazprom said its share of sales of natural gas in the European Union has increased to 36.7 percent last year, rising over two percent against 34.2 percent in 2017. “In 2018, according to preliminary data, the share of gas supplies to the EU countries and Turkey has reached an all-time high and totaled 36.7 percent,” the director general of Gazprom Export Elena Burmistrova said at Gazprom’s Investor Day event, taking place in Singapore. Burmistrova added that Gazprom’s gas exports to Europe last year amounted to record 201.8 billion cubic meters, and is expected to significantly grow by 2035 due to the increasing demand.

According to a member of Gazprom’s management committee, Oleg Aksyutin, the company saw no threat to Gazprom’s business in the European market from global producers of liquefied natural gas (LNG), including the US. The company’s gas exports to Europe are reportedly three times more than the amount of LNG shipped to Europe by all global producers combined. Though the share of LNG shipments have been growing, it still makes up only 13 percent of the entire gas market, according to Burmistrova. The executive added that prices for natural gas saw a significant surge. “In 2018, in accordance with linked fuel prices, the average price of Gazprom gas increased by 24.6 percent to $245.5 for 1,000 cubic meters,” she said, stressing that in 2016 it stood at $167.

When it comes to China, one of the world’s biggest energy consumers, Gazprom is planning to become the country’s biggest supplier as soon as 2035, with the company’s share expected to reach 13 percent of Chinese overall consumption by the same year.

Read more …

It’s completely insane that any western country would have to do a Hunger Survey. Don’t fall for thinking it’s normal.

UK Hunger Survey To Measure Food Insecurity (G.)

The government is to introduce an official measure of how often low-income families across the UK skip meals or go hungry because they cannot afford to buy enough food, the Guardian can reveal. A national index of food insecurity is to be incorporated into an established UK-wide annual survey run by the Department for Work and Pensions (DWP) that monitors household incomes and living standards. Campaigners, who have been calling for the measure for three years, said the move was “a massive step forward” that would provide authoritative evidence of the extent and causes of hunger in the UK. They say food insecurity is strongly linked to poverty caused by austerity and welfare cuts and is driving widening health inequality.

Food insecurity is generally defined as experiencing hunger, the inability to secure food of sufficient quality and quantity to enable good health and participation in society, and cutting down on food because of a lack of money. The decision, which took campaigners by surprise, was revealed at an informal meeting on Tuesday attended by the DWP, the Office for National Statistics, Public Health England and the Scottish and Welsh governments, as well as a number of food poverty charities. Ministers have for years resisted calls to bring England into line with the US and Canada by measuring food insecurity. Critics said this was to avoid shedding unwanted light on the impact of welfare policy and the public health consequences of being unable to eat regularly or healthily.

Read more …

Why the hunger? Here’s why: we feed ourselves with plastics and poison.

Glyphosate Found In 95% Of Wine And Beer (Ind.)

A new study has shown that traces of a commonly-used and possibly cancerous weed killer can be found in the majority of wine and beer. Researches tested five wines and 15 beers from the US, Asia and Europe for traces of pesticide glyphosate. The research found that of the 20 samples, 19 (95 per cent) contained particles of the chemical, including products labelled as organic. The US Public Interest Research Group, which conducted the study, said the levels of the pesticide aren’t necessarily dangerous, but are still concerning. In 2015, the World Health Organisation’s International Agency categorised glyphosate as “probably carcinogenic to humans”, leading the state of California to add it to its list of chemicals that can cause cancer, which makes companies responsible for providing warnings to potential consumers.

The findings of the study coincide with the beginning of a class action lawsuit against Bayer, which acquired Monsanto last year. The suit claims that Roundup caused thousands of plaintiffs to develop non-Hodgkins lymphoma, a type of blood cancer. The first plaintiff, Ed Hardeman, testified this week, alleging that his use of the chemical on his 56 acres of land caused him to develop cancer aged 66. [..] Bayer has not commented on the results of the study, but the researchers are calling for glyphosate to be banned unless it can be proven safe.

Read more …

The earth’s weather system is far too complex to draw conclusions from a sunny day. The only things we can say about the climate must be based on long-term stats. This kind of article doesn’t help one bit, it merely points out the author literally doesn’t know what he’s talking about.

Am I The Only One Who’s Terrified About The Warm Weather? (G.)

They were everywhere in London on the weekend. The people in short sleeves or sandals. The ones with sunglasses ostentatiously hanging from the front of their shirts or balanced on top of their heads. The beer gardens and riverside pubs of the capital were heaving; corner shops ran out of ice-cream. Outside it was 17C (62F). Monday was another warm day, without a cloud in the sky, and in the late afternoon the light took on a magical, honey-coloured hue. It brought to mind one of those summer evenings you remember from childhood, when you’d be in the park all day and your parents let you stay out until bedtime, and you felt like you were doing something deliciously naughty just by being there.

Except it isn’t early summer: it’s February. And the entire developed world has not so much been doing something slightly naughty as systematically attacking the global ecosystem over a period of decades, and that’s how we go into this mess. We should try to hold on to this fact as young, posh men the nation over develop a strange delusion that anyone would want to see their elbows; this is not supposed to be happening. Less than a month ago, there was video footage of extreme cold weather coming out of Chicago. Forks supported in midair by suddenly frozen noodles, water poured from kettles instantly freezing on its way to the ground: you know the sort of thing.

OK, that was on the other side of the world, and was extreme and terrifying enough. But at least it was terrifying in the right direction. On Monday, though, the temperature hit 20.3C in Ceredigion, west Wales: the highest February temperature ever recorded in Britain and the first time the thermometer had breached 20C in winter. The BBC weather account tweeted it out with a gif of the sunshine icon and the same excitable breathlessness with which Springwatch would announce it had found a new type of vole. My response contained a single word, repeated seven times. It began with F.

Read more …

Dec 032018
 
 December 3, 2018  Posted by at 10:30 am Finance Tagged with: , , , , , , , , , ,  7 Responses »


Jules Adler Panorama de Paris vu du Sacré Coeur 1935

 

How Trump’s Bashing Of The New York Times and CNN Has Benefited All (F24)
Dow Futures Surge After Trump And Xi Agree To Pause Trade War (CNBC)
China Agrees To ‘Reduce And Remove’ Tariffs On US Cars: Trump (AFP)
UK Faces Constitutional Crisis Over Brexit Legal Advice – Labour (BBC)
Qatar To Withdraw From OPEC, Focus On LNG Exports (R.)
Macron Tells PM To Hold Talks, Mulls State Of Emergency (R.)
France’s Meltdown, Macron’s Disdain (Milliere)
Deutsche Bank Takeover Speculation Intensifies (ZH)
Merkel Protege Suggests Reducing Gas Flow Through Nord Stream 2 Pipeline (R.)
EU Delays Euro Zone Budget, Deposit Insurance Plans (R.)
World Bank Promises $200 Billion In 2021-25 Climate Cash (AFP)

 

 

A topic I’ve addressed a lot. It’s just that I would say “The New York Times and CNN’ Bashing of Trump”, not the other way around., After all, who started? Read the whole thing, it shows how smart Trump is when it comes to media.

“Concluding his December 2017 interview with The New York Times, Trump said: “Another reason that I’m going to win another four years is because newspapers, television, all forms of media will tank if I’m not there because without me, their ratings are going down the tubes […] So they basically have to let me win.“

How Trump’s Bashing Of The New York Times and CNN Has Benefited All (F24)

Although Donald Trump has an antagonistic relationship with The New York Times and CNN, the ‘Trump bump’ has been a business boon to these outlets, while the US president has been keen to use them to pursue publicity and legitimacy. While Trump often rails against the US media generally – most notably as “enemies of the people” – the country’s foremost newspaper of record, The New York Times, and its oldest 24-hour news network, CNN, are frequently singled out for opprobrium as “The Failing New York Times” and “Fake News CNN”. The acrimony between Trump and CNN reached its zenith on November 8 when the White House revoked the press access of its reporter Jim Acosta after a rancorous post-midterm news conference – only for his press pass to be restored thanks to judicial review three days later.

Meanwhile the vitriolic rhetoric from the White House has provoked considerable alarm amongst the press. New York Times’ publisher A.G. Sulzberger warned on July 30 that Trump’s increasingly splenetic attacks on the news media “will lead to violence”, before its sister paper The Boston Globe led the way in launching the #EnemyofNone campaign against the president’s relentless attacks on the American press. Despite these tensions, The New York Times – like CNN – is far from failing. On the contrary, both outlets are enjoying booming subscription and viewer figures thanks to Trump’s presidency. From Trump’s election on November 8, 2016 until the end of that month, The New York Times saw an increase of 132,000 in paid subscriptions – 10 times the growth rate in November 2015.

This trajectory has continued. “NYT has well surpassed initial expectations for subscriber growth […] following the ‘Trump bump’,” JP Morgan analyst Alexia Quadrani wrote to clients in April 2018. The New York Times Company’s share price outperformed those of Apple, Amazon and Facebook between Trump’s election in 2016 and the end of June 2018, soaring by 141 percent. “When I talked to the [executive] editor of The New York Times [Dean Baquet], he told me with a smile on his face that Donald Trump has done at least one good thing – and that is that he has boosted the circulation of The New York Times,” Marvin Kalb, a senior fellow at The Brookings Institution in Washington D.C. and author of “Enemy of the People”, a book on Trump’s hostile regard towards the US media, told FRANCE 24.

“People who subscribe to and read [The New York] Times are for the most part people who oppose Trump, who do not think it is fake news,” explained Robert Shapiro, a professor of political science at Columbia University, whose area of expertise includes the relationship between mass media and US politics, in an interview with FRANCE 24. The paper has “used the facts of the Trump presidency to draw attention to the bad things that he is doing, and that’s attracted readers who want to get information to use against Trump”, Shapiro continued.

Read more …

Anything to buy and sell some more.

Dow Futures Surge After Trump And Xi Agree To Pause Trade War (CNBC)

U.S. stock market futures surged after U.S. President Donald Trump and Chinese President Xi Jinping agreed to a 90-day ceasefire in the trade war that has weighed heavily on global stock markets for most of 2018. Futures on the Dow Jones Industrial Average jumped 488 points as of 11:31 p.m. ET Sunday. The advance implied a 471.54 point gain for the Dow at Monday’s open. Meanwhile, S&P 500 futures added around 1.71 percent, while futures on the Nasdaq-100, home of many technology companies which sell to China, jumped about 2.75 percent. Futures on oil and copper jumped on hopes a possible new China-U.S. trade agreement would boost global economic growth.

The two leaders, who met for dinner on Saturday at the G-20 summit in Argentina, agreed to hold off on additional tariffs on each other’s goods at the start of the new year to allow for talks to continue. The U.S. agreed to leave tariffs on more than $200 billion worth of Chinese products at 10 percent. If after 90 days the two countries are unable to reach an agreement, that rate will be raised to 25 percent, according to the White House. Trade negotiations will address forced technology transfer and intellectual property. “The explicit delay in tariffs is on the positive end of expectations,” said Helen Qiao, China and Asia economist with Bank of America Lynch, in a note to clients. “In contrast to the fear — especially in Asia —that the hawks in US administration would make impossible demands, evidence of President Trump working towards a trade deal with China has emerged.”

Read more …

Something tells me they’ll want something in return.

China Agrees To ‘Reduce And Remove’ Tariffs On US Cars: Trump (AFP)

China has agreed to scale back tariffs on imported US cars, President Donald Trump said Sunday, one day after agreeing with Xi Jinping to a ceasefire in the trade war between the world’s top two economies. Asia stocks had rallied on the news that Washington and Beijing would not impose any new tariffs during a three-month grace period, during which the two sides are meant to finalize a more detailed agreement. “China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40 percent,” Trump said on Twitter. On Saturday, Trump and Xi agreed to put a stop to their tit-for-tat tariffs row, which had roiled world markets for months.

The Republican president called their agreement – which Washington hopes will help close a yawning trade gap with the Asian giant and help protect US intellectual property – an “incredible” deal. Trump agreed to hold off on his threat to slap 25 percent tariffs on $200 billion worth of Chinese goods from January 1, leaving them at the current 10% rate. In return, China is to purchase “very substantial” amounts of agricultural, energy, industrial and other products from the US. In July, China reduced auto import duties from 25 percent to 15 percent, a boon for international carmakers keen to grow sales in the world’s largest auto market. But as trade tensions ratcheted up with the US this summer, Beijing retaliated by slapping vehicles imported from the US with an extra 25 percent tariff, bringing the total tariff rate to 40%.

Read more …

May’s worst crisis to date. Parliament first votes on December 11.

UK Faces Constitutional Crisis Over Brexit Legal Advice – Labour (BBC)

The UK faces a “constitutional crisis” if Theresa May does not publish the full legal advice on her Brexit deal on Monday, Labour has warned. The PM says the advice is confidential. but some MPs think ministers do not want to admit it says the UK could be indefinitely tied to EU customs rules. Ex-foreign secretary Boris Johnson has joined calls for its publication, which critics say could sink the PM’s deal. Attorney General Geoffrey Cox will make a statement about it on Monday. He is set to publish a reduced version of the legal advice – despite calls from MPs from all parties to publish a full version.

His statement to the House of Commons will be followed by five days of debate on the deal. MPs say the statement from the attorney general does not respect a binding Commons vote last month, which required the government to lay before Parliament “any legal advice in full”. Labour is planning to join forces with other parties, including the DUP, who keep Mrs May in power, to initiate contempt of Parliament proceedings unless the government backs down. Shadow Brexit secretary Sir Keir Starmer told Sky News: “If they don’t produce [the advice] tomorrow (Monday) then we will start contempt proceedings. This will be a collision course between the government and Parliament.”

Read more …

Reuters manages to do an entire article on this without mentioning the Saudi-led Qatar boycott even once. Well done!

Qatar To Withdraw From OPEC, Focus On LNG Exports (R.)

Qatar said on Monday it was quitting OPEC from January 2019 but would attend the oil exporter group’s meeting this week, saying the decision meant Doha could focus on cementing its position as the world’s top liquefied natural gas (LNG) exporter. Doha, one of the smallest oil producers in OPEC, is locked in a diplomatic dispute with the group’s de facto leader Saudi Arabia but said the move to leave OPEC was not driven by politics. Minister of State for Energy Affairs Saad al-Kaabi told a news conference that Qatar, which he said been a member of OPEC for 57 years, would still attend the group’s meeting on Thursday and Friday this week, and would abide by its commitments.

“Qatar has decided to withdraw its membership from OPEC effective January 2019 and this decision was communicated to OPEC this morning,” the minister said. “For me to put efforts and resources and time in an organization that we are a very small player in and I don’t have a say in what happens … practically it does not work, so for us it’s better to focus on our big growth potential,” he said. [..] Qatar has oil output of only 600,000 barrels per day (bpd), compared with the 11 million bpd produced by Saudi Arabia, the group’s biggest oil producer and world’s biggest exporter. But Doha is an influential player in the global LNG market with annual production of 77 million tonnes per year, based on its huge reserves of the fuel in the Gulf.

Read more …

Perhaps the best indicator of where Macron finds himself are the policemen taking off their helmets to show solidarity with the gilets jaunes.

Macron Tells PM To Hold Talks, Mulls State Of Emergency (R.)

Riot police on Saturday were overwhelmed as protesters ran amok in Paris’s wealthiest neighborhoods, torching dozens of cars, looting boutiques and smashing up luxury private homes and cafes in the worst disturbances the capital has seen since 1968. The unrest began as a backlash against fuel tax hikes but has spread. It poses the most formidable challenge yet to Macron’s presidency, with the escalating violence and depth of public anger against his economic reforms catching the 40-year-old leader off-guard and battling to regain control.

After a meeting with members of his government on Sunday, the French presidency said in a statement that the president had asked his interior minister to prepare security forces for future protests and his prime minister to hold talks with political party leaders and representatives of the protesters. A French presidential source said Macron would not speak to the nation on Sunday despite calls for him to offer immediate concessions to demonstrators, and said the idea of imposing a state of emergency had not been discussed. Arriving back from the G20 summit in Argentina, Macron had earlier rushed to the Arc de Triomphe, a revered monument and epicenter of Saturday’s clashes, where protesters had scrawled “Macron resign” and “The yellow vests will triumph”.

The “yellow vest” rebellion erupted out of nowhere on Nov. 17, with protesters blocking roads across France and impeding access to some shopping malls, fuel depots and airports. Violent groups from the far right and far left as well as youths from the suburbs infiltrated Saturday’s protests, the authorities said. Government spokesman Benjamin Griveaux had indicated the Macron administration was considering imposing a state of emergency. The president was open to dialogue, he said, but would not reverse policy reforms.

Read more …

A president with a low enough approval rating and etractors that are sufficiently organized will always have a hard time.

France’s Meltdown, Macron’s Disdain (Milliere)

On November 11th, French President Emmanuel Macron commemorated the 100th anniversary of the end of World War I by inviting seventy heads of state to organize a costly, useless, grandiloquent “Forum of Peace” that did not lead to anything. He also invited US President Donald Trump, and then chose to insult him. In a pompous speech, Macron – knowing that a few days earlier, Donald Trump had defined himself as a nationalist committed to defending America – invoked “patriotism”; then defined it, strangely, as “the exact opposite of nationalism”; then called it “treason”. In addition, shortly before the meeting, Macron had not only spoken of the “urgency” of building a European army; he also placed the United States among the “enemies” of Europe.

This was not the first time Macron placed Europe above the interests of his own country. It was, however, the first time he had placed the United States on the list of enemies of Europe. President Trump apparently understood immediately that Macron’s attitude was a way to maintain his delusions of grandeur,as well as to try to derive a domestic political advantage. Trump also apparently understood that he could not just sit there and accept insults. In a series of tweets, Trump reminded the world that France had needed the help of the USA to regain freedom during World Wars, that NATO was still protecting a virtually defenseless Europe and that many European countries were still not paying the amount promised for their own defense.

Trump added that Macron had an extremely low approval rating (26%), was facing an extremely high level of unemployment, and was probably trying to divert attention from that. Trump was right. For months, the popularity of Macron has been in free fall: he is now the most unpopular French President in modern history at this stage of his mandate. The French population has turned away from him in droves. Unemployment in France is not only at an alarmingly high level (9.1%); it has been been alarmingly high for years. The number of people in poverty is also high (8.8 million people, 14.2% of the population). Economic growth is effectively non-existent (0.4% in the third quarter of 2018, up from 0.2% the previous three months). The median income (20,520 euros, or $23,000, a year,) is unsustainably low. It indicates that half the French live on less than 1710 euros ($1946) a month. Five million people are surviving on less than 855 euros ($973) a month.

Read more …

Deutsche is the archetypical too big to fail hot potato. The Fed must help, and so does Merkel. But to what end?

Deutsche Bank Takeover Speculation Intensifies (ZH)

Since taking over troubled German lender Deutsche Bank back in April, Christian Sewing has watched the recidivist lender’s troubles go from bad to worse. On Friday, the bank’s shares reached an all-time low; they’re now down 50% YTD, making Deutsche the worst performer in a poorly performing index of the world’s largest global banks. The latest selloff was inspired by the Frankfurt prosecutor’s office deciding to raid six Deutsche buildings, including the bank’s headquarters The raid, which continued for two days, doubled as the first public revelation about the latest criminal scandal involving Europe’s biggest bank by assets, which has already paid $18 billion in legal penalties since the financial crisis.

Prosecutors revealed that they were investigating at least two employees in the bank’s wealth management unit (part of the division overseen by Sewing before he took the CEO job) for allegedly helping customers set up accounts in offshore tax shelters and helping criminals launder their ill-gotten gains – allegations that prosecutors said were inspired by the infamous ‘Panama Papers’ leak. During their raid, prosecutors searched the offices of five senior Deutsche executives, including the bank’s chief compliance officer, who was rumored to be leaving the bank in a report published just days before nearly 200 police officers, tax inspectors and prosecutors showed up outside Deutsche’s international headquarters and demanded that everybody step away from their computers.

Given the abysmal week the bank just had, it’s hardly surprising that the financial media has published a barrage of negative stories featuring anonymously sourced quotes from Deutsche “investors” effectively demanding that, if Sewing can’t get his shit together in the next quarter or two, he will need to abandon the “strategic alternatives” (cost-cutting, shifting the bank’s investment strategy to emphasize growth in wealth management) that he championed as a road toward salvation (alongside cost-cutting, of course) and seriously consider a sale.

Read more …

Nordstream2 would bankrupt Ukraine. Hence the anti-Russia desperation.

Merkel Protege Suggests Reducing Gas Flow Through Nord Stream 2 Pipeline (R.)

Germany must answer urgent, growing political concerns about the planned Nord Stream 2 gas pipeline project given Russia’s seizure of three Ukrainian ships and their crew off the coast of Crimea, a senior German conservative said on Sunday. Annegret Kramp-Karrenbauer, a top candidate to replace Chancellor Angela Merkel as leader of the Christian Democrats, told public broadcaster ARD it would be “too radical” to withdraw political support for the project, but Berlin could reduce the amount of gas to flow through the pipeline. Russia is resisting international calls to release three Ukrainian ships seized last weekend in the Kerch Strait near the Crimea region that Moscow illegally annexed from Ukraine in 2014.

Moscow has accused the 24 sailors of illegally crossing the Russian border, which Ukraine denies. After meeting with Russian President Vladimir Putin, Merkel on Saturday called on Russia to release the sailors and allow free shipping access to the Sea of Azov, but stopped short of endorsing any additional sanctions against Moscow. Kramp-Karrenbauer is a close Merkel ally but has taken a firmer stance on Russia’s actions in recent days. On Friday, she told Reuters the EU and the US should consider banning from their ports Russian ships originating from the Sea of Azov in response to the incident. She told ARD on Sunday that it was time to draw a firmer line against Russian actions, including its annexation of Crimea and its support for separatists in eastern Ukraine.

[..] Her suggestion of banning Russian ships from European ports triggered criticism from some Social Democrats, including former foreign minister Sigmar Gabriel, who urged calm and accused Ukraine of trying to drag Germany into a war with Russia.

Read more …

They’re still dead set on more Europe.

EU Delays Euro Zone Budget, Deposit Insurance Plans (R.)

EU finance ministers will agree on Monday to give the euro zone bailout fund new responsibilities, but they will delay decisions on the euro zone budget and a deposit guarantee scheme after failing to reach agreement, a draft document showed. The ministers will discuss deeper economic integration of the 19 countries sharing the euro, to prepare the single currency bloc for the next potential crisis. However, after a year of negotiations, fraught with political difficulties, little of the original ambition, championed by French President Emmanuel Macron, remains.

The two flagship ideas – a separate budget for euro zone countries to help stabilize their economies and a deposit guarantee scheme to make all euro zone bank deposits safe – are too controversial and will be worked on further until June 2019, according to the draft document, seen by Reuters. In the case of the deposit guarantee scheme, mistrust among euro zone countries is so great that they could not even agree on a roadmap for beginning political negotiations on EDIS (European Deposit Insurance Scheme), as mandated by EU leaders. “Further technical work is still needed to agree on a roadmap. We will establish a High-level working group with a mandate to work on next steps. The High-level group should report back by June 2019,” said the draft report by EU finance ministers.

Read more …

Advice: don’t support anything the World Bank is involved in. They are not your friends.

World Bank Promises $200 Billion In 2021-25 Climate Cash (AFP)

The World Bank on Monday unveiled $200 billion in climate action investment for 2021-25, adding this amounts to a doubling of its current five-year funding. The World Bank said the move, coinciding with a UN climate summit meeting of some 200 nations in Poland, represented a “significantly ramped up ambition” to tackle climate change, “sending an important signal to the wider global community to do the same.” Developed countries are committed to lifting combined annual public and private spending to $100 billion in developing countries by 2020 to fight the impact of climate change — up from 48.5 billion in 2016 and 56.7 billion last year, according to latest OECD data.

Southern hemisphere countries fighting the impact of warming temperatures are nonetheless pushing northern counterparts for firmer commitments. In a statement, the World Bank said the breakdown of the $200 billion would comprise “approximately $100 billion in direct finance from the World Bank.” Around one third of the remaining funding will come from two World Bank Group agencies with the rest private capital “mobilised by the World Bank Group.” “If we don’t reduce emissions and build adaptation now, we’ll have 100 million more people living in poverty by 2030,” John Roome, World Bank senior director for climate change, warned. “And we also know that the less we address this issue proactively just in three regions – Africa, South Asia and Latin America – we’ll have 133 million climate migrants,” Roome told AFP.

Read more …

Jan 022018
 
 January 2, 2018  Posted by at 10:36 am Finance Tagged with: , , , , , , , , , ,  18 Responses »


Horacio Coppola Avenida de Mayo entre Bolívar y Perú, Buenos Aires 1936

 

UPDATE: There is a problem with our Paypal widget/account that makes donating hard for some people. What happens is that for some a message pops up that says “This recipient does not accept payments denominated in USD”. This is nonsense, we do.

We have no idea how many people have simply given up on donating, but we can suggest a workaround (works like a charm):

Through Paypal.com, you can simply donate to an email address. In our case that is recedinghorizons *at* gmail *com*. Use that, and your donations will arrive where they belong. Sorry for the inconvenience.

The Automatic Earth and its readers have been supporting refugees and homeless in Greece since June 2015. It has been an at times difficult and at all times expensive endeavor. Not at least because the problems do not just not get solved, they actually get worse. Because the people of Greece and the refugees that land on their shores increasingly find themselves pawns in political games.

Therefore, even if the generosity of our readership has been nothing short of miraculous, we must continue to humbly ask you for more support. Because our work is not done. Our latest essay on this is here: The Automatic Earth for Athens Fund – Christmas and 2018 . It contains links to all 14 previous articles on the situation.

Here’s how you can help:

 

 

For donations to Konstantinos and O Allos Anthropos, the Automatic Earth has a Paypal widget on our front page, top left hand corner. On our Sales and Donations page, there is an address to send money orders and checks if you don’t like Paypal. Our Bitcoin address is 1HYLLUR2JFs24X1zTS4XbNJidGo2XNHiTT. For other forms of payment, drop us a line at Contact • at • TheAutomaticEarth • com.

To tell donations for Kostantinos apart from those for the Automatic Earth (which badly needs them too!), any amounts that come in ending in either $0.99 or $0.37, will go to O Allos Anthropos.

 

Please give generously.

 

 

No Financial Stress (Mish)
Bitcoin Is Already Having A Bad Year (BBG)
Bitcoin Fever To Burn Out In ‘Spectacular Crash’ – David Stockman (CNBC)
Britain’s Benefits System Has Become A Racket For Cheating Poor People (G.)
Russia Posts Highest-Ever Natural Gas Output in Expansion Drive (BBG)
US Is Running The Same Script With Iran That It Ran With Libya, Syria (CJ)
More Than 170 Refugees Reach Lesbos, Samos Early New Year’s Day (K.)
Syrian Grandmother Defies Perils To Cross Aegean At Age 110 (K.)
Drones Over Africa Target $70 Billion Illegal Poaching Industry (ZH)

 

 

Article by Mish. Graph annotation by Jesse Colombo.

No Financial Stress (Mish)

As we head into 2018, the St. Loius Fed reports there is no financial stress. The STLFSI measures the degree of financial stress in the markets and is constructed from 18 weekly data series: seven interest rate series, six yield spreads and five other indicators. Each of these variables captures some aspect of financial stress. Accordingly, as the level of financial stress in the economy changes, the data series are likely to move together. The average value of the index, which begins in late 1993, is designed to be zero. Thus, zero is viewed as representing normal financial market conditions. Values below zero suggest below-average financial market stress, while values above zero suggest above-average financial market stress.

Financial stress has been negative since June 18, 2010. I expect 2018 will not be so complacent.

Jesse’s annotations: “Bubbles form during periods of very low financial stress”.

Read more …

Check back minutes later and it’s rising.

Bitcoin Is Already Having A Bad Year (BBG)

Bitcoin is already having a bad year. For the first time since 2015, the cryptocurrency began a new year by declining, extending its slide from a record $19,511 reached on Dec. 18. The virtual coin traded at $13,624.56 as of 5 p.m. in New York on Monday, down 4.8% from Friday, according to data compiled by Bloomberg. That’s also a fall from the $14,156 it hit Sunday, according to coinmarketcap.com, which tracks daily prices. The cryptocurrency fluctuated in early Asian trading on Tuesday.

Bitcoin got off to a much stronger start last year, and then kept that momentum going, helping to create a global frenzy for cryptocurrencies. It rose 3.6% on the first day of 2017 to $998, data from coinmarketcap.com show. It ended the year up more than 1,300%. That rally drew a growing number of competitors and last month brought bitcoin to Wall Street in the form of futures contracts. It reached the Dec. 18 peak hours after CME Group Inc. debuted its derivatives agreements, which some traders said would encourage short position-taking.

Read more …

Any questions?

Bitcoin Fever To Burn Out In ‘Spectacular Crash’ – David Stockman (CNBC)

David Stockman, President Ronald Reagan’s former director of the Office of Management and a relentless Wall Street bear, is warning investors that the cryptocurrency boom will end disastrously. “It’s basically a class of really stupid speculators who have convinced themselves that trees grow to the sky,” he told CNBC’s “Futures Now” last week. “It will burn out in a spectacular crash. All of these latter-day speculators will have their hands burned to a crisp, and they will learn the proper lesson.” Stockman’s latest prophecy isn’t exclusive to bitcoin. He’s been saying a “gigantic, horrendous storm” could soon hit stocks. In September, he warned investors that a 40% to 70% correction wasn’t too far down the road. On Friday, the Dow Jones Industrial Average flirted with 25,000, with the S&P trading just shy of a new record.

Stockman blamed the Federal Reserve and central banks for creating the hype surrounding the stock and cryptocurrency markets. He argued that too much liquidity was pumped into the marketplace to deal with the 2008 global financial crisis — noting that not even regulators can improve the frothy situation. “What we really need to do is not think these are regulator problems, but understand they’re monetary problems,” he said. “It’s an irrational, overheated market like never before.” In the past two years, bitcoin prices have soared by more than 3,000%. Its wild price swings have sparked debates on Wall Street over how much it’s really worth. Bitcoin’s less expensive peers such as litecoin and ether have also surged. Stockman can’t put a price tag on them.

“I have no idea. I mean it could double or triple from here or it could fall to zero. But the point is that it’s not real money because real money for transactions has to be stable,” he said. According to Stockman, the CBOE and CME decisions to add bitcoin futures to their exchanges don’t give this emerging asset class legitimacy. “Anytime Wall Street sees an opportunity to shear the sheep, and they see the sheep stampeding to the slaughter, they line up with some new gimmick to take advantage of the circumstances. That’s all,” he said. “There is nothing that’s being validated by the opening up of a futures market. It’s just everybody trying to get on the train for the ride,” he added.

Read more …

Who needs the poor?

Britain’s Benefits System Has Become A Racket For Cheating Poor People (G.)

When Moira gets scared, she cuts herself. “It’s my way of taking control.” Right now she’s very scared. In a few days she faces a tribunal that will judge whether she is entitled to her disability benefit. She has been through forms and examinations and the officials who tell her one thing and those who tell her another, and she is nearly broken. In a low-ceilinged office at the back of a housing estate, she starts sobbing. “I cannot live like this any more.” Steph Pike lets Moira talk, before telling her, “stay focused”. After years as a welfare rights adviser, Pike knows what tribunals want: short, direct answers shorn of humiliation and pain. Now in her late 40s, Moira was raised in care, went to jail and has been repeatedly cheated of her benefits. Part of her life story is of being let down and punished by authority – but Pike needs her to set all that aside. “Bear with me,” Pike keeps saying. “This is important.”

Such meetings are normally confidential, but for three days over two weeks I had exclusive access to Pike in her work for the Child Poverty Action Group charity. I saw her advise others who appeared to have been wronged by state officials – and I accompanied Moira to that tribunal. That our benefits system is broken is no longer up for debate. Ministers are told universal credit is a fiasco and MPs weep over starving families in one of the richest societies in human history. Even rightwing tabloids run grim updates on how men with terminal cancer are declared fit to work just weeks before they die. Such cases are described as shameful. As failures. They are lined up like so many one-offs – not representative of fair-play Britain. But Pike and her colleagues know different. They see a system that routinely snatches money out of the hands of people who need and are entitled to it and bullies claimants with contempt.

Moira never went looking for welfare advice; she was just starving That’s Moira’s experience, too. Her trouble started when she found herself feeling steadily worse – and so did as she was told and rang the Department for Work and Pensions. Her recent back operation hadn’t worked, the arthritis in her spine, hips and knees was getting worse and the heavy-duty painkillers were wrecking her kidneys. She was summoned for a reassessment in Southend, a 70-mile round trip from her home in London – tricky for a woman who cannot walk more than 10 steps without crutches. Claimants such as Moira are entitled to a home assessment, but Pike told me they are often dispatched “miles away”. She was still told off for being late, says Moira. After the examination, she lost her personal independence payment.

Read more …

Selling to the west and east.

Russia Posts Highest-Ever Natural Gas Output in Expansion Drive (BBG)

Russia registered its highest-ever natural gas production last year amid plans to expand into China and boost sales of liquefied natural gas. The nation’s output of the fuel jumped 7.9% to 690.5 billion cubic meters, according to data emailed Tuesday by the Russian Energy Ministry’s CDU-TEK unit. That beat the previous record, set in 2011, by 2.9%. Russia, the world’s largest gas exporter, is working to boost output with plans to increase production of LNG with new plants in an area that stretches from the Baltic region to its Pacific coast. That will put the country up against the biggest producers of the super-chilled fuel, including Qatar, Australia and the U.S. Russia has resources to increase its LNG production almost 10 times by 2035, led by the privately-owned Novatek PJSC in the Arctic, according to the nation’s Energy Ministry.

The country is also working to keep shipments to Europe near record levels this year as state-run Gazprom PJSC, the continent’s biggest supplier, plans to start pipeline exports to China in late 2019. Gazprom meets more than a third of Europe’s demand for natural gas, Russia’s biggest and most lucrative market worth some $37 billion in revenue this year. The U.S. became the world’s largest natural gas producer in 2009, leapfrogging Russia thanks to its fracking revolution. It pumped 22.1 trillion cubic feet (about 626 billion cubic meters) of dry gas in first 10 months of 2017, according to December data from the U.S. Energy Information Administration. This was 11% higher than Russia for the same period.

Read more …

Create chaos.

US Is Running The Same Script With Iran That It Ran With Libya, Syria (CJ)

Two weeks ago a memo was leaked from inside the Trump administration showing how Secretary of State and DC neophyte Rex Tillerson was coached on how the US empire uses human rights as a pretense on which to attack and undermine noncompliant governments. Politico reports: The May 17 memo reads like a crash course for a businessman-turned-diplomat, and its conclusion offers a starkly realist vision: that the US should use human rights as a club against its adversaries, like Iran, China and North Korea, while giving a pass to repressive allies like the Philippines, Egypt and Saudi Arabia. ‘Allies should be treated differently -and better- than adversaries. Otherwise, we end up with more adversaries, and fewer allies,’ argued the memo, written by Tillerson’s influential policy aide, Brian Hook.

With what would be perfect comedic timing if it weren’t so frightening, Iran erupted in protests which have been ongoing for the last four days, and the western empire is suddenly expressing deep, bipartisan concern about the human rights of those protesters. So we all know what this song and dance is code for. Any evil can be justified in the name of “human rights.” In October we learned from a former Qatari prime minister that there was a massive push from the US and its allies to topple the Syrian government from the very beginning of the protests which began in that country in 2011 as part of the so-called Arab Spring. This revelation came in the same week The Intercept finally released NSA documents confirming that foreign governments were in direct control of the “rebels” who began attacking Syria following those 2011 protests.

The fretting over human rights has occurred throughout the entirety of the Syrian war, even as the governments publicly decrying human rights abuses were secretly arming and training terrorist factions to murder, rape and pillage their way across the country. We’ve seen it over and over again. In Libya, western interventionism was justified under the pretense of defending human rights when the goal was actually regime change. In Ukraine, empire loyalists played cheerleader for the protests in Kiev when the goal was actually regime change. And who could ever forget the poor oppressed people of Iraq who will surely greet the invaders as liberators?

Read more …

Conveyor belt.

More Than 170 Refugees Reach Lesbos, Samos Early New Year’s Day (K.)

More than 170 undocumented migrants reached the shores of Lesvos and Samos in the early hours of New Year’s Day, according to government figures. The first incident occurred at 12.30 a.m. when a plastic boat carrying 52 people reached the coastline of Mytilene, the main port of Lesvos. Another 83 migrants arrived at 1.30 a.m. on another boat that followed the same route from neighboring Turkey. Shortly after midnight, a vessel belonging to the European Union’s border monitoring agency Frontex intercepted another plastic boat east of Samos, with 38 people aboard. All the migrants were transferred to reception centers on the two islands.

Read more …

“..The family now live in Athens and are getting to know their new neighborhood until their asylum hearing – unfortunately set for 2019, despite Laila’s age…”

Syrian Grandmother Defies Perils To Cross Aegean At Age 110 (K.)

How far can a desire to see a loved one take us? Laila Saleh was so desperate to see the granddaughters she helped raise that she didn’t think twice about following the rest of her family out of northern Syria, despite being 110 years old. Her yearning to see Nisrin and Berivan, who had fled Kobani for Europe three years ago and now live in Germany after being granted asylum, bolstered her determination. “The journey was not easy, of course,” Laila’s grandson, Halil, told Kathimerini as he welcomed us into an apartment rented by Solidarity Now for asylum seekers in downtown Athens. The family, which is of Kurdish descent, traveled from Kobani to Izmir on the Turkish coast, and from there to the Greek island of Lesvos by inflatable boat. “Our grandmother can walk a little bit, but not long distances.”

Their group consisted of seven people, spanning four generations, and tried to ensure that as little as possible of the journey was on foot. When finding transport proved impossible, Halil and his father would carry Laila. “I carried the two children, one on my front and one on my back,” said his young wife, Saousan, as she played with twins Azar and Ari, Laila’s great-grandchildren. Despite the enormous challenges of the journey and a treacherous sea crossing – a first for Laila – the idea of leaving the elderly woman behind never crossed her children’s minds. “Our house had been bombed and we had to rent another one, but living conditions were bad,” said Halil. “Even though Grandmother is independent, she wouldn’t want to live anywhere without her children.”

The family had already suffered tremendous loss and there was little to keep them in war-ravaged Kobani. “In Syria, it is the duty of the youngest son to take care of his mother when she grows old,” said Laila’s son Ahmet, who has a heart problem and couldn’t carry his mother alone. He thankfully has his wife of 33 years, Ali, by his side, who helps care for the elderly woman. “I sleep very lightly at night because she often needs me,” said the 58-year-old woman. “She is very confused right now because of all the changes,” she added of her mother-in-law. Born in December 1907, Laila had a birthday this month, though the family does not know her exact date of birth. He longevity may make an impression on outsiders, but the family thinks it normal. “Our grandfather, Laila’s husband, died at the age of 115. That was in 1987, and Grandmother has lived with us since,” said Halil.

Read more …

“.. a 9000% increase in rhino killings since 2007 in South Africa alone..

” .. a rhino is slaughtered twice a day and an elephant is killed every 14 minutes…”

I’ve said it before, unless and until the penalty for killing big game is death (and even then!), we won’t solve this.

Drones Over Africa Target $70 Billion Illegal Poaching Industry (ZH)

In addition to the central bank-created bubble in financial markets, there is another bubble festering in the fields of Africa, called the “poaching boom.” Economic development in Vietnam, China, and the United States have fueled an illegal $70 billion industry of killing elephants and rhinoceroses for tusks. Poachers illegally hunt elephants and rhinos under the cover of darkness using surveillance equipment and high-tech weaponry.

The boom in poaching has contributed to a 9000% increase in rhino killings since 2007 in South Africa alone. Across Africa, a rhino is slaughtered twice a day and an elephant is killed every 14 minutes. According to Air Shepherd, a wildlife conservation group aimed at stopping poachers through a new AI drone system that targets poachers said, “at this rate elephants and rhinos will be extinct within 10 years.”

According to Air Shepherd, a wildlife conservation group aimed at stopping poachers through a new AI drone system that targets poachers said, “at this rate elephants and rhinos will be extinct within 10 years.” Air Shepherd has already conducted 6,000 flight hours over the skies of Africa testing the new AI drone system. Air Shepherd’s drones use high-tech airborne sensors, such as thermal infrared vision to detect heat coming from human or animal bodies. The mobile command center fits into the back of a van and uses AI systems developed by researchers from Carnegie Mellon, the University of Southern California, and Microsoft to detect potential poachers.

For now, the new AI drone surveillance system could greatly expand the area of coverage used to protect endangered wildlife by spotting poachers and alerting officials before the killing of an elephant and rhinoceros occurs. Which begs the question: are AI drones set to disrupt an illegal $70 billion industry in Africa? Perhaps, but not without a fight. Which is why we expect that the poaching industry will soon unveil a new set of aggressive countermeasures, which renderd the drone system powerless, which leads to the next question: are we about to observe the first drone-on-drone violence deep in the bowels of Africa?

Read more …

Jul 232017
 


Vincent van Gogh Women Picking Olives 1889

 

Lock Them Up! (David Stockman)
This Recovery Isn’t All That Resilient (DDMB)
Is Productivity Growth Becoming Irrelevant? (Adair Turner)
EU Sounds Alarm, Urges US To Coordinate On Russia Sanctions (R.)
EU Will Hit Poland With Deadline To Reverse Curbs On Judicial Freedom (G.)
EU’s Car Regulator Warns Against Car Diesel Ban In Cities (R.)
100 British Tenants A Day Lose Homes On Rising Rents And Benefit Freeze (G.)
Australia and Its Volatile Future as an LNG Superpower (Nikkei)
Fukushima Robot Images: Massive Deposits Thought To Be Melted Nuclear Fuel (G.)
US Continues Supporting Terrorists in Syria (Lendman)
Meow (Jim Kunstler)
Europe Seeks Long-Term Answer To Refugee Crisis That Needs Solution Now (G.)
Indigenous Australians Take Carbon Farming To Canada (G.)

 

 

Watch out. Stockman’s had enough.

Lock Them Up! (David Stockman)

We frequently hear people say they have nothing to hide—-so surrendering privacy and constitutional rights to the Surveillance State may not be such a big deal if it helps catch a terrorist or two. But with each passing day in the RussiaGate drama we are learning that this superficial exoneration is dangerously beside the point. We are referring here to the unrelenting witch hunt that has been unleashed by Imperial Washington against the legitimately elected President of the United States, Donald J. Trump. This campaign of lies, leaks and Russophobia is the handiwork of Obama’s top national security advisors, who blatantly misused Washington’s surveillance apparatus to discredit Trump and to effectively nullify America’s democratic process.

That is, constitutional protections and liberties were systematically breached, but not simply to intimidate, hush or lock up citizens one by one as per the standard totalitarian modus operandi. Instead, what has happened is that the entire public debate has been hijacked by the shadowy forces of the Deep State and their partisan and media collaborators. The enabling culprits are Obama’s last CIA director, John Brennan, his national security advisor Susan Rice and UN Ambassador Samantha Power. There is now mounting evidence that it was they who illegally “unmasked” NSA intercepts from Trump Tower; they who confected the Russian meddling narrative from behind the protective moat of classified intelligence; and they who orchestrated a systematic campaign of leaks and phony intelligence reports during the presidential transition—-all designed to delegitimize Trump before he even took the oath of office.

So all three of them should be locked up -that’s for sure. But the more urgent solution would be to unlock and make public all the innuendo, surmises, assessments, half-truths and boilerplate intelligence chatter on which the entire false narrative about Russian meddling and collusion is based. Stated differently, without the nation’s massive intelligence apparatus and absurd system of secrecy and classified information to hide behind, the RussiaGate witch hunt would have never gotten off the ground. In truth, as we will essay below, there is no there, there. So what this new chapter in McCarthyite hysteria actually demonstrates is that the Imperial City’s far-flung, 17-agency, $75 billion Intelligence Behemoth is a plenary threat not just to individual liberty, but to the very constitutional democracy on which the latter depends.

To appreciate the severity of the threat, it is necessary to recognize that the post-9/11 Deep State has lowered a double whammy on our system. That is, it unconstitutionally collects the entirety of all internet based communications of America’s 325 million citizen, while at the same time it has effectively disenfranchised 98% of the 535 members of the House and Senate who have been elected to represent them. Accordingly, behind the Surveillance State’s vast wall of secrecy and so-called “classified” information, there operates a Dark Government that is unaccountable to the public and largely unconstrained by normal constitutional limits, which the Patriot Act and secret FISA courts have more or less suspended. [..] Unfortunately, the Donald doesn’t seem to recognize that he is actually President. If he did, he would have the Justice Department launch a prosecution against the faithless officials—-Brennan, Rice and Power—-who concocted the whole RussiaGate defamation in the first place.

Read more …

No, Danielle. It’s not about resilience. It’s simply not a recovery. No series of numbers, no matter how impressive looking can change that.

This Recovery Isn’t All That Resilient (DDMB)

Are Federal Reserve stress tests leading economic indicators? That certainly seems to be the case. Just ask Capital One. As of the first quarter, credit card loss provisions at Capital One were above 5%, a six-year high. The company recorded some improvement for the second quarter, yet Fed stress tests of the bank’s overall loan portfolio in a deep downturn show losses topping 12%. That explains Capital One’s “conditional” passing score, a black eye that prompted a reduced share buyback plan and no increase in its dividend. Most economists today applaud the resilience of the current recovery, which has stretched into its eighth year, the third-longest in postwar history. Resilience and rising household defaults, though, don’t tend to go hand in hand. Pressures have been building in the background for some time.

When adjusted for inflation, credit card usage has grown faster than incomes for 18 months. According to Fed data, that time frame coincides with the upturn in revolving credit, a proxy for credit card debt. In November 2015, outstanding revolving credit crossed above the $900-billion threshold for the first time since December 2009. By May of this year, annual growth was clocking 8.7%. Meanwhile, credit card balances hit $1.02 trillion, the highest level in almost eight years. Whether by choice or force, the aftermath of the financial crisis prompted households to ratchet back their usage of credit cards. As the recovery got underway, frugality prevailed, punctuated by an increase in debit card purchases. It is thus notable that Bank of America data find debit card usage has weakened in recent years as households grew more comfortable rebuilding their credit card balances.

“Confidence” is the term most associated with the rising credit card debt. But it’s fair to ask why confident households would choose to pay so dearly for the privilege. At 15.83%, the average rate on credit card balances is at a record high. It is more likely that households are increasingly tapping their credit cards to cover the cost of necessities, that they are less confident and more anxious about their future finances. The latest University of Michigan consumer confidence data suggest anxiety is indeed setting in. At 80.2, the expectations component is at the lowest since October and running below the 2016 average of 81.8.

Read more …

Productivity in a so-called service economy. A mirage.

Is Productivity Growth Becoming Irrelevant? (Adair Turner)

Our standard mental model of productivity growth reflects the transition from agriculture to industry. We start with 100 farmers producing 100 units of food: technological progress enables 50 to produce the same amount, and the other 50 to move to factories that produce washing machines or cars or whatever. Overall productivity doubles, and can double again, as both agriculture and manufacturing become still more productive, with some workers then shifting to restaurants or health-care services. We assume an endlessly repeatable process. But two other developments are possible. Suppose the more productive farmers have no desire for washing machines or cars, but instead employ the 50 surplus workers either as low-paid domestic servants or higher-paid artists, providing face-to-face and difficult-to-automate services.

Then, as the late William Baumol, a professor at Princeton University, argued in 1966, overall productivity growth will slowly decline to zero, even if productivity growth within agriculture never slows. Or suppose that 25 of the surplus farmers become criminals, and the other 25 police. Then the benefit to human welfare is nil, even though measured productivity rises if public services are valued, as per standard convention, at input cost. The growth of difficult-to-automate service activities may explain some of the productivity slowdown. Britain’s flat productivity reflects a combination of rapid automation in some sectors and rapid growth of low-productivity, low-wage jobs – such as Deliveroo drivers riding around on plain old-fashioned bicycles. In the United States, the Bureau of Labor Statistics reports that eight of the ten fastest-growing job categories are low-wage services such as personal care and home health aides.

The growth of “zero-sum” activities may, however, be even more important. Look around the economy, and it’s striking how much high-talent manpower is devoted to activities that cannot possibly increase human welfare, but entail competition for the available economic pie. Such activities have become ubiquitous: legal services, policing, and prisons; cybercrime and the army of experts defending organizations against it; financial regulators trying to stop mis-selling and the growing ranks of compliance officers employed in response; the huge resources devoted to US election campaigns; real-estate services that facilitate the exchange of already-existing assets; and much financial trading. Much design, branding, and advertising activity is also essentially zero-sum. It is certainly good that new fashions can continually compete for our attention; choice and human creativity are valuable per se. But we have no reason to believe that 2050’s designs and brands will make us any happier than those of 2017.

Read more …

The new House sanctions under fire from Merkel AND Trump.

EU Sounds Alarm, Urges US To Coordinate On Russia Sanctions (R.)

The European Union sounded an alarm on Saturday about moves in the U.S. Congress to step up U.S. sanctions on Russia, urging Washington to keep coordinating with its G7 partners and warning of unintended consequences. In a statement by a spokeswoman after Republicans and Democrats in the U.S. Congress reached a deal that could see new legislation pass, the European Commission warned of possibly “wide and indiscriminate” “unintended consequences”, notably on the EU’s efforts to diversify energy sources away from Russia. Germany has already warned of possible retaliation if the United States moves to sanction German firms involved with building a new Baltic pipeline for Russian gas.

EU diplomats are concerned that a German-U.S. row over the Nord Stream 2 pipeline being built by Russia’s state-owned Gazprom could complicate efforts in Brussels to forge an EU consensus on negotiating with Russia over the project. “We highly value the unity that is prevailing among international partners in our approach towards Russia’s action in Ukraine and the subsequent sanctions. This unity is the guarantee of the efficiency and credibility of our measures,” the Commission said in its statement. “We understand that the Russia/Iran sanctions bill is driven primarily by domestic considerations,” it went on, referring to a bill passed in the U.S. Senate last month and to which lawmakers said on Saturday they had unblocked further obstacles.

“As we have said repeatedly, it is important that any possible new measures are coordinated between international partners to maintain unity among partners on the sanctions that has been underpinning the efforts for full implementation of the Minsk Agreements,” the Commission said, referring to an accord struck with Moscow to try to end the conflicts in Ukraine. “We are concerned the measures discussed in the U.S. Congress could have unintended consequences, not only when it comes to Transatlantic/G7 unity, but also on EU economic and energy security interests. This impact could be potentially wide and indiscriminate, including when it comes to energy sources diversification efforts.

Read more …

The heavy hand tactics will backfire at some point, it’s just a matter of time.

EU Will Hit Poland With Deadline To Reverse Curbs On Judicial Freedom (G.)

The EU is expected to give Poland’s rightwing government until September to reverse a controversial set of laws that give the country’s politicians control over its supreme court. The Polish senate defied international condemnation early on Saturday and mass demonstrations in Warsaw to approve a law that allows the firing of its current supreme court judges, except those chosen by the justice minister and approved by the president. Protests continued in Poland on Saturday. But despite increasing dismay at developments, the European commission knows it needs time to build support before moving towards what is regarded as the nuclear option – of suspending a country’s voting rights in the EU for the first time. Last week the first vice-president of the EU’s executive, Frans Timmermans, warned that Brussels was “very close” to triggering the sanction, which would spark a major confrontation with one of the EU’s most populous member states.

The legislation passed on Saturday is only one of a series of contentious legal reforms being pursued by the ruling Law and Justice party (PiS) which have prompted thousands to take to the streets in protest against what many claim is the death of Polish democracy. The new law gives the president the power to issue regulations for the supreme court’s work. It also introduces a disciplinary chamber that, on a motion from the justice minister, would handle suspected breaches of regulations or ethics. The law now requires only the signature of the president, Andrzej Duda, who was previously a member of PiS, to become binding. With Brexit negotiations in full flow, there is unease in Brussels at taking any action that could be seen as heavy-handed in relation to a member state.

With the EU engaged in a difficult balancing act, it is understood Timmermans will suggest at a meeting of commissioners on Wednesday that Poland be given until the next general affairs council of EU ministers, on 25 September, to respond to claims that its measures are a systemic threat to the rule of law. While Poland has ignored the commission when it has previously set deadlines on this issue, the move would at least give the commission the summer months to garner the support required to impose tough sanctions. The EU believes, however, that it will be in a position to launch two infringement proceedings against Poland as soon as this week, in an attempt to slow the country’s drift towards what Brussels regards as authoritarianism.

[..] The Hungarian prime minister, Viktor Orbán, said on Saturday that Budapest would fight to defend Poland. “The inquisition offensive against Poland can never succeed, because Hungary will use all legal options in the European Union to show solidarity with the Poles,” he said.

Read more …

So both Berlin and brussels are in bed with the automakers. Lovely.

I have a question: why are cities full of cars in the first place?

EU’s Car Regulator Warns Against Car Diesel Ban In Cities (R.)

Banning diesel cars in European cities could hamper automakers’ ability to invest in zero-emission vehicles, the European Union’s commissioner for industry has warned the bloc’s transport ministers. In a letter seen by Reuters, Commissioner Elzbieta Bienkowska said there would be no benefit in a collapse of the market for diesel cars and that the short-term focus should be on forcing carmakers to bring dangerous nitrogen oxide emissions into line with EU regulations. “While I am convinced that we should rapidly head for zero-emission vehicles in Europe, policymakers and industry cannot have an interest in a rapid collapse of the diesel market in Europe as a result of local driving bans,” Bienkowska said. “It would only deprive the industry of necessary funds to invest in zero-emissions vehicles,” she said in the letter, dated July 17.

Germany’s three major carmakers have invested heavily in diesel technology, which offers more efficient fuel burn and lower carbon dioxide emissions than gasoline-powered cars. But since Volkswagen admitted in 2015 to cheating on U.S. emissions tests, worries about vehicle pollution have left the entire auto industry under scrutiny. A particular concern is emissions by diesel cars of nitrogen oxide, which is blamed for causing respiratory diseases. In the letter, Bienkowska told ministers she was concerned that the latest emissions violations at Audi and Porsche (PSHG_p.DE) were discovered by prosecutors and not Germany’s vehicle and transport authorities. Bienkowska’s letter also called for all cars with excessively high levels of nitrogen oxide emissions to be taken of European roads, but said carmakers should act on a voluntary basis. The commissioner did raise the prospect of an EU testing agency if national regulators failed to spot more emissions-test cheats.

Read more …

Once again: what a society. Makeover!

100 British Tenants A Day Lose Homes On Rising Rents And Benefit Freeze (G.)

A record number of renters are being evicted from their homes, with more than 100 tenants a day losing the roof over their head, according to a shocking analysis of the nation’s housing crisis. The spiralling costs of renting a property and a long-running freeze to housing benefit are being blamed for the rising number of evictions among Britain’s growing army of tenants. More than 40,000 tenants in England were evicted in 2015, according to a study by the Cambridge Centre for Housing and Planning Research for the Joseph Rowntree Foundation (JRF). It is an increase of a third since 2003 and the highest level recorded. The research appears to confirm fears that a mixture of rising costs and falling state support would lead to a rise in people being forced out of their homes. It will raise concerns that even those in work are struggling to pay their rent.

High numbers of “no-fault” evictions by private landlords is driving the increase. More than 80% of the extra evictions had occurred under a Section 21 notice, which gives a tenant two months to leave. The landlord does not have to give a reason and there does not need to be any wrongdoing on the part of the tenant. The study found that changes in welfare benefits have combined to make rents unaffordable to claimants in many areas. Housing benefit was no longer covering the cost of renting in some cases, with average shortfalls ranging from £22 to £70 a month outside of London, and between £124 and £1,036 in inner London. Housing benefit has not risen in line with private rents since 2010, and a current freeze means the rates paid will not increase until 2020. A series of interviews with private renters who are struggling to meet their bills exposed the pressure some low-paid tenants are now under.

One man said that the £50 shortfall he had suffered was “almost a week’s money in itself”. “And then you’ve got the other bills…I just couldn’t make it work. I had to choose, what do I pay this month – do I pay the rent? Do I pay the electricity? Do I buy some food? And it just snowballed.” A single mother in her 20s said: “I paid it as much as I could, but my youngest child has been quite sickly … If my kids are sick, I don’t get paid.” The problem is particularly acute in London and the south-east. Four out of every five repossessions using Section 21 orders are in London, the east of England and the south-east. Nearly two-thirds are in London. Within the city, Section 21 repossessions are concentrated in the boroughs of Newham, Enfield, Haringey, Brent and Croydon. Of the 40,000 evictions, there were 19,019 repossessions in the social housing sector, and 22,150 in the private rented sector.

Read more …

Burn baby burn! But not all of it. Maybe. Or not right now.

Australia and Its Volatile Future as an LNG Superpower (Nikkei)

Australia is expected to overtake Qatar to become the world’s largest exporter of liquefied natural gas in 2019, but a political risk has emerged that is casting a dark cloud over the resource-rich nation’s future as an LNG export superpower. The government of Prime Minister Malcolm Turnbull introduced a new energy policy this month to prioritize the domestic gas supply and regulate LNG exports. Australian oil and gas major Santos has seen its stock price decline as the company is expected to be subjected to the regulations as early as next year. Australia’s conservative ruling coalition, whose approval rating is languished since a narrow election win a year ago, is aiming to allay public discontent with rising electricity and gas bills. But the new energy policy has sparked confusion across corporate Australia.

On April 27, the Turnbull government announced the introduction of the Australian Domestic Gas Security Mechanism, or ADGSM. According to details released on June 20, the Australian resources minister every summer will discuss plans for the following year’s domestic g

as supplies by consulting gas companies, industry regulators and other parties. The resources minister is to then determine by Sept. 1 – or Nov. 1 at the latest – whether the country will face a gas shortage the following year. LNG export controls will be imposed in the event of a supply shortage at home. Three LNG projects in the eastern state of Queensland will be subject to the new regulations for the time being. They are the world’s first projects to extract coal bed methane, also known as coal seam gas in Australia, and export the gas in the form of LNG.

The three LNG projects, which include the Santos-operated Gladstone LNG, or GLNG, project, went on stream over 2014 and 2015 in anticipation of swelling Asian demand. They have a combined annual production capacity of 25.3 million tons. The resources minister is to take into account the volume of exports and that of domestic shipments from each project and determine whether each project is denting the domestic supply, including through emergency procurements for export purposes. If any of the projects is deemed to be harming domestic supplies, the project operator will be required to take measures, such as cutting exports and increasing domestic shipments.

Read more …

Fukushima. Where robots go to die.

Fukushima Robot Images: Massive Deposits Thought To Be Melted Nuclear Fuel (G.)

Images captured by an underwater robot on Saturday showed massive deposits believed to be melted nuclear fuel covering the floor of a damaged reactor at Japan’s destroyed Fukushima nuclear plant. The robot found large amounts of solidified lava-like rocks and lumps in layers as thick as 1m on the bottom inside a main structure called the pedestal that sits underneath the core inside the primary containment vessel of Fukushima’s Unit 3 reactor, said the plant’s operator, Tokyo Electric Power Co. On Friday, the robot spotted suspected debris of melted fuel for the first time since the 2011 earthquake and tsunami caused multiple meltdowns and destroyed the plant. The three-day investigation of Unit 3 ended on Saturday.

Locating and analysing the fuel debris and damage in each of the plant’s three wrecked reactors is crucial for decommissioning the plant. The search for melted fuel in the two other reactors has so far been unsuccessful because of damage and extremely high radiation levels. During this week’s probe, cameras mounted on the robot showed extensive damage caused by the core meltdown, with fuel debris mixed with broken reactor parts, suggesting the difficult challenges ahead in the decades-long decommissioning of the plant. TEPCO spokesman Takahiro Kimoto said it would take time to analyse the debris in the images to figure out removal methods.

Read more …

Will the CIA destroy Trump and Putin’s ceasefire?

US Continues Supporting Terrorists in Syria (Lendman)

It’s naive to believe otherwise. It’s central to US strategy since launching war for regime change. Tactics alone changed from then to now, not Washington’s objective – allied with Israel and other rogue states to topple Syria’s legitimate government. In response to Trump’s announced end to covert CIA-arming and training of so-called “moderate rebels” (aka terrorists like all other anti-government groups), Russia’s Information and Press Department deputy director Artyom Kozhin said the following: “We have not heard anything regarding this decision from the official sources. Neither do we know about the status of other similar programs that could be implemented by other US agencies.” “(W)e have expressed how we feel when it comes to the US flirting with militants in Syria more than once. We have forewarned that this flirtation could have unpredictable military and political consequences.”

“We repeatedly pointed to the Americans’ unscrupulous actions taken in Syria in the pursuit of their self-seeking geopolitical interests.” “It is an open secret that a substantial number of militants who have been trained under the US Train and Equip program ultimately joined ISIS and al-Nusra.” “We regard this as a repetition of the tragic story of Afghanistan and Libya. The potential consequences of this should be obvious to everyone.” On Friday, Sergey Lavrov minced no words, saying Washington continues arming anti-government terrorist groups in Syria, euphemistically called the moderate opposition. It has illegal bases in the country, established without Security Council or Damascus authorization. According to CENTCOM commander General Joseph Votel, US forces will remain in Syria after the battle for Raqqa is over – on the phony pretext of stabilizing the region.

Washington wants northern Syrian territory occupied, along with other areas it’s able to gain control over – a scheme risking direct confrontation with Russia and Damascus. Trump wants increased funding for US military bases in Iraq and Syria, reflecting plans for permanent (illegal) US occupation. Saying it’s to continue combating ISIS is willful deception, concealing America’s support for the terrorist group and likeminded ones. On July 19, Russia’s upper house Federation Council ratified a January protocol agreed on in Damascus to establish the legal presence of Russian aerial forces and support personnel in Syria for 49 years – to be automatically extended for subsequent 25-year periods. The move aims to secure and protect Syrian sovereignty. It continues longstanding mutually cooperative bilateral relations. It signifies Russia’s intention to challenge US, NATO and Israeli imperial designs on the country.

Read more …

” And then the US Treasury will destroy the dollar trying (again) to save the banks. And the bank accounts will be frozen. And the loans will stop being paid.”

Meow (Jim Kunstler)

I’d actually go further now than the “soft coup d’état” scenario that has Trump run over by the 25th amendment. It will happen, of course, but it will not satisfy anybody. Mike Pence will prove to be as ineffectual and unpopular as Trump, and he will be drowning in financial and fiscal problems, and he will get no help from the legislature in resolving any of it, and before too long there may be a general in the White House – or attempting to run things from someplace else, if he can. The whole nauseating spectacle will be attended by violent popular revolt of region against region and tribe against tribe in a great civil explosion of long-suppressed angst. Too many nasty forces are vectoring in on the scene to overthrow the dream state America has been languishing in.

Most of them involve money (or “money”) and the questions of how can we possibly keep paying for the way we live in this country, and who exactly has been fobbing off with the former wealth of every rusted and busted community in the land? It’s going to start in the stock and bond markets and it will be soon. And then the US Treasury will destroy the dollar trying (again) to save the banks. And the bank accounts will be frozen. And the loans will stop being paid. And the SNAP cards are going to stop working, and pretty soon the just-in-time deliveries to the supermarkets, and the resupply to the gas stations, and there won’t be much that Mike Pence can do about it. He’ll be shoved aside and the military will have to try to restore order in the land. When they do, it will not be the same land we sang about back in the fifth grade. Up in a cloud somewhere over Ohio, maybe, Schrödinger’s Cat will be gazing down on us, grinning.

Read more …

Europe only seeks a way to not have to deal with it.

Europe Seeks Long-Term Answer To Refugee Crisis That Needs Solution Now (G.)

European efforts to deal with the influx, hastily enacted two years ago at the height of Syria’s civil war, are faltering. A burden-sharing deal agreed by all 28 EU states in 2015, when Germany took nearly 1 million people, has arguably never worked. Of 160,000 refugees due to be accepted under the scheme, fewer than 21,000 have been relocated. Europe is split down the middle. Poland and Hungary have refused to take anyone. The Czech Republic initially accepted 12 people but has since slammed the door. The European commission has begun legal action against all three. Italy and Greece, so-called “frontline states”, are at odds with their northern neighbours, notably France and Austria. Dashing hopes of a new approach, the new French president, Emmanuel Macron, is proving inflexible on the issue.

As we report today, hundreds of migrants are effectively kettled in Ventimiglia on the Italian side of the border with France. Paris is preventing vessels carrying rescued migrants docking in French ports. Nor has France met its share of the European Union relocation quota. Austria is paying refugees to leave, amid a rise in far right and neo-Nazi attacks. The Vienna government says it will close the Brenner Pass if Italy issues temporary travel visas for the migrants. The Italian government, facing elections in 2018 and under pressure from the populist Five Star movement opposition, is furious about perceived French hypocrisy. “After saying they understand our problem, it doesn’t seem like France wants to help us concretely … we need more solidarity,” says Mario Giro, Italy’s deputy foreign minister.

The new refugee crisis is playing into a bigger, EU-wide battle about respect for national sovereignty. Hungary’s rightwing prime minister, Viktor Orbán, says he will “not give in to blackmail from Brussels”. Poland says the EU relocation scheme encourages more migrants, arguing most refugees do not genuinely fear persecution but are economic migrants seeking a better life. [..] Confusion and division also characterise Europe’s policy towards Libya, the main stepping-off point for migrants. Much of Libya is ungoverned following the US, British and French-backed overthrow of Muammar Gaddafi’s regime in 2011, and UN-led efforts to restore order are floundering. Overwhelmed by sheer numbers, Italy has been trying to limit its at-sea rescue efforts. But as elsewhere, political and humanitarian responses are in conflict.

About 3,000 people from Libya were picked up in one day in May in more than 20 rescue operations mounted by the Italian coastguard and navy, ships from the EU’s Mediterranean mission, its Frontex border agency, and merchant vessels. Merkel was widely praised for her open-door response in 2015 but public attitudes have hardened, and she faces a general election in September. Her focus now is her new “compact with Africa”, showcased at the Hamburg G20 summit, which seeks more state and private investment in Africa to combat poverty and the effects of climate change, and thereby deter mass migration to Europe. But Merkel’s solution is long-term. Europe’s new refugee crisis is happening now, as British beach-goers may soon testify.

Read more …

Love it. The wiser peoples of the world working together.

Indigenous Australians Take Carbon Farming To Canada (G.)

Australia’s world-leading Indigenous land management and carbon farming programs are spreading internationally, with a formal agreement signed to help build a similar program in Canada. A chance meeting between Rowen Foley from the Aboriginal Carbon Fund and a Candian carbon credit businessman at the 2015 Paris climate conference spawned a relationship that led to an agreement this week that will help Canadian First Nations peoples learn from the Australian Aboriginal carbon farming success. “Sometimes chance meetings are a form of karma or synchronicity at play,” Foley says. Foley set up the Aboriginal Carbon Fund in 2010 to help other Indigenous organisations make money by managing land in such a way that it sequesters carbon in the soil.

One of the most successful types of Indigenous carbon farming in Australia has been savannah burning, in which regular small fires are lit, replicating ancient Aboriginal practices and helping to prevent larger fires that release more carbon dioxide into the atmosphere. The projects are often managed by workers in the Indigenous ranger program, which a recent government review concluded were enormously effective, increasing employment, building stronger communities and reducing violence, while also increasing income tax and reducing welfare payments. “Sustainable Indigenous land management, such as savannah burning, not only reduces carbon emissions but also builds communities by offering meaningful jobs for local traditional owners as rangers and an independent income,” Foley says.

One project – run by the Karlantijpa North Kurrawarra Nyura Mala Aboriginal Corporation – was awarded a contract for carbon credits under the Australian government’s Emissions Reduction Fund. By burning the savannah early in the season, it secured payments for sequestering 24,100 tonnes of carbon, in an auction where the average value for such abatement would have been $257,629. The Aboriginal Carbon Fund works with similar groups to produce carbon credits that can be bought by corporations as carbon offsets. Now the lessons learned in Australia are set to be taken to Canada, with an agreement between the Aboriginal Carbon Fund and the Canadian First Nations Energy and Mining Council. “It feels like the idea is coming of age,” Foley says.

Foley travelled to Vancouver to meet David Porter, the chief executive of the First Nations Energy and Mining Council, to sign the agreement. It notes the “strong similarities” between the First Peoples of Canada and the Indigenous people of Australia in relation to land management and climate mitigation.

Read more …

Jul 082017
 
 July 8, 2017  Posted by at 9:19 am Finance Tagged with: , , , , , , , , , ,  2 Responses »


Canaletto View of the Churches of the Redentore 1750

 

‘Neither Of Them Wanted To Stop’: Trump And Putin Enjoy Successful ‘First Date’ (G.)
US, Russia Agree To Cease-Fire In Southwest Syria Starting Sunday (AP)
Russia Disputes US Claim Trump “Pressed” Putin on Election Hacking (IC)
Trump Says Trade Deal With UK Will Be Agreed “Very Very Quickly” (BBC)
Why the Next Recession will be a Doozie for Consumers (WS)
U.S. Jobs Growth Picks Up, but Wage Gains Lag Behind (WSJ)
A Multibillion-Dollar Crack In One Of The World’s Largest LNG Projects (CNBC)
Even The IMF Says Austerity Doesn’t Work (G.)
RIvers Do Not Have Same Rights As Humans: India’s Top Court (AFP)
Greek Bankruptcies Grew Fivefold In Last Decade (K.)
War and Violence Drive 80% Of People Fleeing To Europe By Sea (G.)
The US Has Been at War for Over 220 in 241 Years (AHT)

 

 

I tried to find an objective description of the Trump-Puin meeting, but it’s all echo chamber all the way (like this from the Guardian). The world is full of people who seem to have convinced themselves and each other that any one of them would be a better US president than Trump. The problem is, they’re not, and he is. So it’s all about ‘topics’ such as handshakes, and the deeper meaning thereof. Apparently, Trump should have damned Putin to hellfire and threatened him with war, with election hacking accusations he has no proof of. But US intelligence says it’s so! Yeah, and they would never lie, would they, for power political reasons. Maybe they shouldn’t have turned on Trump in the first place.

Meanwhile, I am glad that the two prime world leaders took the time, and then some, to talk to each other. And I hope they will do so again, and regularly. The world is not a better place is they do not. No matter what the echo chamber says.

‘Neither Of Them Wanted To Stop’: Trump And Putin Enjoy Successful ‘First Date’ (G.)

It is a blossoming bromance. In what one US-based critic called a “first Tinder date”, Donald Trump and Vladimir Putin talked for two and a quarter hours on Friday instead of their scheduled 30 minutes. “I think there was just such a level of engagement and exchange, and neither one of them wanted to stop,” US secretary of State Rex Tillerson said afterwards. “Several times I had to remind the president, and people were sticking their heads in the door. And they sent in the first lady at one point to see if she could get us out of there, and that didn’t work either.” There were sighs of relief in Washington that Trump, an erratic and volatile president with little foreign policy experience, had avoided a major gaffe. The news website Axios summed it up: “Trump survives the Putin meeting.”

But diplomats and experts said this was hardly cause for celebration. Thomas Countryman, former US acting undersecretary for arms control and international security, commented: “It’s an indication of how rapidly our standards are falling when we’re reasonably pleased that President Trump has not made an obvious error.” Pre-meeting hype had focused on whether Trump would confront Putin over Russia’s interference in the US election. He delivered, according to Tillerson, pressing the issue repeatedly. But Putin denied it and Tillerson later admitted that the two leaders had focused on how to move on from here. There seemed little indication that Trump had held Putin’s feet to the fire.

Trump had accepted Putin’s assurances, Countryman said: “It certainly was the minimum that any US president should have done in this situation. I’m glad he brought it up. What we don’t know – and may never know – is what he replied when Vladimir Putin looked him in the eye and falsely said: ‘It was not us.’” Russian foreign minister Sergei Lavrov claimed Trump had accepted Putin’s assurances, although the US disputed that.

Read more …

A good first outcome. Now don’t the US military dare interfere.

US, Russia Agree To Cease-Fire In Southwest Syria Starting Sunday (AP)

The United States and Russia struck an agreement Friday on a cease-fire in southwest Syria, crowning President Donald Trump’s first meeting with Russian President Vladimir Putin. It is the first U.S.-Russian effort under Trump’s presidency to stem Syria’s six-year civil war. The cease-fire goes into effect Sunday at noon Damascus time, according to U.S. officials and the Jordanian government, which is also involved in the deal. Secretary of State Rex Tillerson, who accompanied Trump in his meeting with Putin, said the understanding is designed to reduce violence in an area of Syria near Jordan’s border and which is critical to the U.S. ally’s security.

It’s a “very complicated part of the Syrian battlefield,” Tillerson told reporters after the U.S. and Russian leaders met for about 2 hours and 15 minutes on the sidelines of a global summit in Hamburg, Germany. Of the agreement, he said: “I think this is our first indication of the U.S. and Russia being able to work together in Syria.” [..] Russia’s top diplomat, who accompanied Putin in the meeting with Trump, said Russian military police will monitor the new truce. All sides will try to ensure aid deliveries to the area, Foreign Minister Sergey Lavrov said. The deal marks a new level of involvement for the Trump administration in trying to resolve Syria’s civil war.

Read more …

No, Intercept, Lavrov, let alone Russia, has not disputed anything Tillerson said. To dispute something, you need to address it. Lavrov has simply provided his version of what was said.

Russia Disputes US Claim Trump “Pressed” Putin on Election Hacking (IC)

According to two widely divergent witness accounts, Donald Trump either “pressed” Vladimir Putin repeatedly on Friday to admit that Russia helped him get elected president of the United States — by stealing and releasing embarrassing emails from Democrats — or told the Russian leader that he accepted his claim that Russia had nothing to do with the hacking and called concern over the issue “exaggerated.” Those two very different accounts of what was said in the meeting between Trump and Putin in Hamburg, Germany, came in dueling press briefings given after it by the only other senior officials in the room when the conversation took place: Rex Tillerson, the U.S. secretary of state, and Sergey Lavrov, Russia’s foreign minister.

“The President opened the meeting with President Putin by raising the concerns of the American people regarding Russian interference in the 2016 election,” Tillerson told American reporters, according to audio recorded by PBS Newshour. “Now they had a very robust and lengthy exchange on the subject,” Tillerson continued. “The President pressed President Putin on more than one occasion regarding Russian involvement; President Putin denied such involvement, as I think he has in the past.” “The two leaders agreed though,” Tillerson added, “that this is a substantial hinderance in the ability of us to move the Russian-U.S. relationship forward, and agreed to exchange further work regarding commitments on non-interference.” The Russians, Tillerson said, also asked to see whatever proof of their role in the hacking American intelligence agencies claim to have.

Lavrov, who is fluent in both Russian and English, offered a very different summary of the conversation. Trump, he told Russian reporters, had raised the issue during a broader conversation about threats posed to society by the internet, including terrorism and child pornography. “President Trump said that in the U.S. there are still some circles who are talking about Russian alleged intrusion and Russian alleged attempts to influence the U.S. election,” Lavrov said, according to translation from Ruptly, a Russian state-owned news agency. “President Trump said that this campaign has already taken on a rather strange character because over the many months that these accusations have been made, not a single fact has been presented,” Lavrov added. “President Trump said that he had heard the clear statements from President Putin about this being untrue, that the Russian leadership did not interfere in the election, and that he accepts these statements.”

Read more …

Not possible until UK has left EU.

Trump Says Trade Deal With UK Will Be Agreed “Very Very Quickly” (BBC)

US President Donald Trump has said he expects a “powerful” trade deal with the UK to be completed “very quickly”. Speaking at the G20 summit in Hamburg, he also said he will come to London. The US president is holding one-to-one talks with UK Prime Minister Theresa May to discuss a post-Brexit trade deal. It is one of a series of one-to-one meetings with world leaders which will also see Mrs May hold trade talks with Japanese Prime Minister Shinzo Abe. Ahead of their meeting, Mr Trump hailed the “very special relationship” he had developed with Mrs May. “There is no country that could possibly be closer than our countries,” he told reporters.

“We have been working on a trade deal which will be a very, very big deal, a very powerful deal, great for both countries and I think we will have that done very, very quickly.” Mr Trump said he “will be going to London”. Asked when, he replied: “We’ll work that out.” But Sir Simon Fraser, a former diplomat who served as a permanent under-secretary at the Foreign Office, cast doubt on how soon any deal could be reached. “The point is we can’t negotiate with them or anyone else until we’ve left the European Union.”

Read more …

Running to stand still. And as Wolf says, these are the good times.

Why the Next Recession will be a Doozie for Consumers (WS)

But here is the thing about employment and recessions: Something big changed since 2000. It can be seen in the employment-population ratio, which tracks people over 16 years of age who have jobs, as defined by the Bureau of Labor Statistics. From the 1960s until 2000, the ratio fell during recessions, but then during the recovery regained all the lost ground plus some, ratcheting up to new records after each recession. Some of this had to do with women entering the work force in large numbers. But since the ratio’s peak in April 2000 at 64.7%, a new pattern has developed. As before, the ratio drops before the official recession begins and keeps dropping until after the recession has ended. But when employment recovers, the ratio ticks up only slowly, recovering only a fraction of the ground lost, before the next recession hits. This has happened over the last two recessions.

For the 2001/2002 recession, the ratio started falling in May 2000 and continued falling until September 2003. During those 3.5 years, it fell 2.7 percentage points from 64.7% to 62%. Over the next three-plus years of the “recovery,” the ratio rose to 63.4% by December 2006, having regained only half of the lost ground, before the next downturn set in. This time, the ratio plunged from 63.4% to 58.2% in November 2010 and again in June and July 2011. It plunged 5.2 percentage points in 4.5 years. During that time, nonfarm payrolls plunged by 8.7 million jobs. Over the seven-plus years of the jobs recovery since then, the economy added 16.7 million jobs (146.4 million nonfarm payrolls, as defined by the BLS). But the employment-population ratio only made it to 60.1%. It regained only 1.9 percentage points, after having plunged 5.2 percentage points. In other words, after seven-plus years of jobs recovery, it has regained less than one-third of what it had lost:

And now the Fed is preparing for the next recession. There are all kinds of factors that move this equation one way or the other. Baby boomers are not retiring to the extent prior generations did. Millennials have fully entered into the working-age population (16 and over by this definition) though many are still in school. And according to Census Bureau estimates, the overall US population has surged by 16.7 million people from April 2010 through “today,” to 325.4 million. Since the bottom of the employment crisis in February 2010, the economy has created 16.7 million jobs as measured by nonfarm payrolls. During the same time, the population has grown by 16.7 million people. Not all of this population growth is working age. But this is the problem that the employment-population ratio depicts: jobs are being created, but not enough for the dual task of absorbing the growth in the working-age population and in putting people back to work who lost their jobs during the recession.

And these are the good times! What happens during the next recession?

Read more …

Why don’t you fit my theory? It’s failproof!

U.S. Jobs Growth Picks Up, but Wage Gains Lag Behind (WSJ)

U.S. employers are churning out jobs unabated as the economic expansion enters its ninth year, but the inability to generate more robust wage growth represents a missing piece in a largely complete labor recovery. U.S. employers added a seasonally adjusted 222,000 jobs in June, the Labor Department said Friday, and the unemployment rate rose slightly to 4.4% with more people actively looking for work. The U.S. has added jobs every month since October 2010, a record 81-month stretch that has absorbed roughly 16 million workers and slowly repaired much of the damage from the 2007-09 recession. The unemployment rate touched a 16-year low in May and the number of job openings hit a record earlier this year.

Still, average hourly earnings for private-sector workers rose slightly in June, 2.5% compared with a year earlier, a level little changed since March. As recently as December, the figure was 2.9% and in the months before the recession, wage gains consistently topped 3%. Since mid-2009, when the expansion started, hourly earnings of blue-collar workers—for which long-run data series are available—have grown on average 2.2% a year, much less than the 3% expansion of the 2000s, the 3.2% expansion of the 1990s or the 3.3% expansion of the 1980s. Tepid wage growth is a puzzle because worker incomes should in theory rise faster as employers compete for scarce labor, though some economists say broader economic forces are at work. “With both productivity growth and inflation continuing to prove sluggish, it is not altogether surprising that wage growth has disappointed,” said John E. Silvia, chief economist at Wells Fargo.

Read more …

“..it may suggest Inpex has lost control over costs.”

A Multibillion-Dollar Crack In One Of The World’s Largest LNG Projects (CNBC)

One of the biggest, most expensive liquefied natural gas projects in history may have developed a physical crack — and the managing company isn’t answering questions from investors. They may have reason to worry. The crack, which is believed to be in a floating production storage and offloading (FPSO) unit, could add billions of dollars in upfront costs, and it could delay the project even further, likely costing more down the line as a major competitor plans to swoop in. The floating unit is sitting at a yard in Busan, South Korea, and is set to eventually operate at “Ichthys” — a giant gas and condensate field offshore western Australia led by Japan’s Inpex, with a 30% stake from France’s Total. That project first broke ground in 2012 and is set to be a mega-scale operation that produces about 8.9 million tons of LNG every year if it reaches full capacity.

Inpex said earlier this month that the unit would “soon” sail away to Australia, and the Japanese operator said the unit is undergoing “last-minute preparation work” including commissioning, cleaning and certification work. One person familiar with the project, however, told CNBC that they have firsthand knowledge of an unannounced crack in the equipment, which was driving up costs and delaying the unit’s journey to Australia, previously expected for 2015. An additional three sources said they had been told there was a crack, but could not independently confirm the defect. When CNBC reached out to the company and asked whether the rumored crack is real, Inpex said it “cannot provide details concerning reasons for the delay.” According to one person familiar with the matter, Inpex recently hired as many as 300 welders to fix the damage. Several sources said they believe the damage is the main reason for the delay.

The alleged fault is in the unit’s “turret,” a central part of an FPSO that conveys “almost everything that will enter or leave” the unit, including chemical injection lines and power cables, Ichthys LNG Project Offshore Director Claude Cahuzac said in comments available on Inpex’s website. A fault in a big piece of liquid natural gas equipment isn’t so abnormal, industry analysts told CNBC, with one suggesting LNG projects generally require “lots of trials and errors.” What is less common, they said, is the amount of investor concern being generated by the Ichthys project. Naturally enough, that concern comes down to money. The original budget of the project back in 2008 was around $20 billion. Inpex’s estimate now stands at $37 billion plus an additional amount of spending, Mizuho Securities said following an analyst briefing in May this year.

In fact, one portfolio manager who reviewed the recent spending projections by Inpex said that “with the 2018 capital expenditure guidance increasing by around 50% over the last six months, it may suggest Inpex has lost control over costs.”

Read more …

Writing about austerity without addressing Greece is useless, Britain.

Even The IMF Says Austerity Doesn’t Work (G.)

A few weeks on from the general election, and David Cameron has been disinterred to say giving public sector workers pay rises is the height of selfishness – while Theresa May is back to harping on in prime minister’s questions about the debt left by the last Labour government. It’s apparently 2015 all over again. It’s tiresome to have to keep pointing it out, but Dave from PR was wrong then, and he remains wrong now. He was a good salesman, for sure. Pretending that “The Deficit” is a scary monster that will eat us unless we appease it by sacrificing our wages plays into many instinctual beliefs about the virtues of probity and thrift. But if anything, the monster in the room is the prevalence of what economist John Quiggin called “zombie economics” – ideas that are constantly discredited, but insist on shambling back to life and lurching their way through our public discourse.

The supposed justifications for austerity were always, Quiggin writes, “absurd on the face of things”. The theory that government spending crowds out private sector investment never withstood scrutiny. As he points out, “the painfully evident fact that there is already plenty of room for private expansion, in the form of unemployed workers and idle factories, is simply ignored”. The IMF – historically the world’s foremost cheerleader of austerity – admitted that it was based on a false prospectus: these policies do more harm than good. Simon Wren-Lewis of Oxford University said that the issue was not whether attempts to reduce the deficit had damaged the economy, but “how much GDP has been lost as a result”. Amartya Sen said that while austerity “deepened Europe’s economic problems, it did not help in the aimed objective of reducing the ratio of debt to GDP to any significant extent”.

[..] With the evidence so prolific that Cameron’s supposed “sound finance” is anything but, and with battalions of respected economists lined up to denounce it, why does this zombie idea keep resurrecting itself? The answer must surely lie in its political utility. The global financial crisis was an opportunity for politicians to practise Naomi Klein’s “shock doctrine” capitalism in the west rather than in the developing world. The Conservatives have presented their ideological project of returning us to the early 19th century as being economically necessary, even unavoidable.

Before Jeremy Corbyn’s rise, elements in the Labour party were similarly enamoured with recession as an opportunity to push a culture war over what they saw as a betrayal of “authentic” left politics. Just as austerity economics relies on the demonisation of immigrants and “identity politics” to mask its own crippling impact, so authentocracy relies on a false zero-sum formula where the “white working class” is in a battle with new arrivals for a share of a fixed pot of cash. Its proponents can hide behind discredited economics to claim they are making “hard but necessary choices” about resource allocation which, somehow, never address the actual allocation of said resources.

Read more …

In other words: you can’t protect a river, not even if people are at risk by the failure to do so?!

RIvers Do Not Have Same Rights As Humans: India’s Top Court (AFP)

India’s sacred Ganges and Yamuna rivers cannot be considered “living entities”, the country’s top court ruled Friday, suspending an earlier order that granted them the same legal rights as humans. The Supreme Court stayed a March order by a lower body that recognised the Ganges and its tributary the Yamuna as “legal persons” in an attempt to protect the highly polluted rivers from further degradation. The landmark ruling made polluting or damaging the rivers legally comparable to hurting a person, and saw three top government officials appointed as custodians. But the Himalayan state of Uttrakhand, where the Ganges originates, petitioned the top court arguing the legal status to the venerated rivers was “unsustainable in the law”.

In its plea, the state said the ruling was unclear on whether the custodians or the state government was liable to pay damages to those who drown during floods, in case they file damage suits. Petitioner Mohammad Saleem, on whose plea the Uttrakhand High Court bestowed the legal rights to the water bodies, will have the opportunity to appeal the ruling by a bench headed by chief justice J S Khehar. M C Pant, Saleem’s lawyer, said he was “shocked and surprised” over the government’s decision to oppose the status. “We will present our case before the court and convince them,” Pant told AFP. The Ganges is India’s longest and holiest river, but the waters in which pilgrims ritualistically bathe and scatter the ashes of their dead is heavily polluted with untreated sewage and industrial waste.

Read more …

Why Greece cannot recover.

Greek Bankruptcies Grew Fivefold In Last Decade (K.)

Corporate bankruptcies in Greece are still a staggering five times what they were in the period before the outbreak of the financial crisis, despite the small 2 percentage point decline recorded so far in 2017, according to international credit insurance company Atradius. The 2% decline is the smallest drop recorded among eurozone member-states, while Greece remains on top of the 22 countries Atradius monitors in Europe and beyond in terms of bankruptcies. While Greece’s rate is currently five times what it was before 2009, in Portugal it is four times as high, in Italy 2.4 times, in Ireland 2.2 times and in Spain it is twice as high.

The business sectors of food and electronics are expected to be among those to enjoy a reduction in their bankruptcy rate, unlike the construction, apparel and machinery sectors, which will continue to see high bankruptcy levels, the survey has found in Greece. The local credit system remains entrapped in the problem of nonperforming loans, which account for 37% of their total portfolios, Atradius says. This hampers lending to the private sector, it adds, calling for the swift enforcement of the recent law for clearing out or selling bad loans.

Read more …

As if there was any doubt about this. We need to stop bombing them. That’s the only answer there is.

War and Violence Drive 80% Of People Fleeing To Europe By Sea (G.)

The vast majority of people arriving in Europe by sea are fleeing persecution, war and famine, while less than a fifth are economic migrants, a report published on Friday reveals. More than 80% of an estimated 1,008,616 arrivals in 2015 came from refugee-producing countries including Syria, Afghanistan and Iraq, and a quarter of that number were children. Researchers say the findings challenge the myth that migrants are coming to Europe for economic reasons. The study is based on 750 questionnaires and more than 100 interviews carried out at reception centres in Greece, Italy and Malta. It highlights the abuse many have faced, with 17% experiencing forced labour. Half of those questioned had been arrested or detained during their journeys.

Professor Brad Blitz, who led the research team, said the findings made it clear that people had complex reasons for coming to Europe. He said: “Governments and certain media organisations perpetuate the myth that the ‘pull’ factors are stronger than the ‘push’ factors with economic reasons being the key catalyst – but we found the opposite. “The overwhelming majority of people we spoke to were coming from desperately poor countries but also places where they were subject to targeted violence or other concerns around family security. They had no other option.” War was the biggest “push”, and given as the reason for leaving their homes by 49% of those questioned in Greece, and 53% of those in Malta. One Syrian said: “I used to live with my wife in Idlib. We had a normal life there until the outbreak of war. Our house was bombed and we lost everything, we hadn’t any option but to leave.”

Read more …

“U.S. soldiers gave poisoned cookies to children seeking their help.”

The US Has Been at War for Over 220 in 241 Years (AHT)

The United States presents itself to the world as a beacon of liberty and a proponent of human rights around the world, ready and willing to stand up for and defend the downtrodden. Florida Senator Marco Rubio recently said that the world looks to the U.S. as an example of democracy. This myth is not believed outside of the United States’ borders, and decreasingly within. There is simply too much evidence to the contrary. The U.S. has been at war for over 220 of its 241 year history. During that time, it has shown a complete lack of respect for the human rights of both the citizens of the nations against which it wages war, and its own soldiers. We’ll take a look at examples from recent history, and see how the U.S. continues these barbaric practices today.

During the U.S. war against Viet Nam, which lasted for several years, conservative estimates indicate that at least 2,000,000 men, women and children were killed. Entire villages were burned; soldiers were told to assume that anyone, of an age, was the enemy. U.S. soldiers gave poisoned cookies to children seeking their help. The My Lai massacre, in which between 350 and 500 innocent people were killed, mostly women, children and elderly men, garnered international publicity, but was only one example of U.S. barbarity. U.S. soldiers returned home from this and later wars with severe physical and emotional problems. Veterans’ organizations worked for years to have the effects of ‘Agent Orange’, a chemical defoliant used in Viet Nam that caused birth defects in the children of soldiers who used it, recognized by the government so they could get government assistance.

A generation later, the reality of Gulf War Syndrome was denied for years by the U.S. government. How does this continue in the current environment? When the U.S. invaded Iraq early in the administration of President George Bush, it bombed residential areas in a country where over half the population was under the age of 15. It destroyed government institutions, even as it protected oil lines, leaving millions of people without essential services.

In Yemen, drones have killed at least 6,000 people. In the first drone attack authorized by then President Barack Obama, 34 people were killed. Of these, two were suspected of having ties to so-called terrorist groups. The other 32 were innocent men, women and children. And these atrocities continue to this day. In Syria, the U.S. is supporting radical groups that are causing untold suffering. At least one third of the population of Syria has fled their homes; recently, due to the efforts of the Syrian army and its allies, some have begun to return. The death toll, directly attributable to the actions of the U.S., is at least half a million.

Read more …

Jun 082017
 
 June 8, 2017  Posted by at 9:37 am Finance Tagged with: , , , , , , , , , ,  1 Response »


Roy Lichtenstein Femme d’Alger 1963

 

UK Press Gang Up On Jeremy Corbyn In Election Day Coverage (G.)
US Market Risk Is Highest Since Pre-2008 Crisis – Bill Gross (BBG)
Global Financial System More Leveraged Than 2008 – Paul Singer (BBG)
UK Housing Weakens Further as Market Emits ‘Ominous’ Signals (BBG)
The Cost of Getting It Wrong (Claire Connelly)
The UAE Needs Qatar’s Gas to Keep Dubai’s Lights On (BBG)
Oil Prices Drop More Than 4% On Surge In Stockpiles (CNBC)
China’s Top Property-Bubble Prophet Says Prices Set to Soar 50% (BBG)
Banco Popular Wipeout Leaves CoCo Bonds On The Drawing Board (BV)
A Reform Beyond Macron’s Grip: The Revolving Door of French Politics (BBG)
OECD Puts Greek Growth At Just 1.1% This Year (K.)
Athens To Seek Growth Package At Eurogroup Meeting (K.)
Greece Says Colombian Gangs Plundering Hospitals Europe-Wide (AP)
Greek Room Owners Threaten To Return Permits in Airbnb Challenge (K.)
Bid For EU States To Stop Migrants, Refugees ‘Asylum Shopping’ (K.)

 

 

The Daily Mail ran 13 pages yesterday on the theme of Corbyn and Labour being terrorist apologists. No shame, no morals. In the same vein, I tried to find an objective piece on the Comey testimony, but couldn’t find one. The UK press has no faith in its voters, the US press has none in its Senate: the press draws the conclusions before anyone else can. The media cares little about credibility, it’s all echo chambers all the way down.

UK Press Gang Up On Jeremy Corbyn In Election Day Coverage (G.)

The Sun has urged its readers not to “chuck Britain in the Cor-bin” on its final front page before the country votes in the general election. The tabloid, owned by Rupert Murdoch’s News Corp, published an editorial on its front page under the headline “Don’t Chuck Britain in the Cor-bin” alongside 10 bullet points that described the Labour leader Jeremy Corbyn as a “terrorists’ friend”, “useless on Brexit”, “puppet of unions” and “Marxist extremist”. The article said readers could “rescue Britain from the catastrophe of a takeover by Labour’s hard-left extremists”. The Daily Mail front page roared, “Let’s reignite British spirit” on the back of a Theresa May speech and also promoted a feature inside called “Your tactical voting guide to boost the Tories and Brexit”.

The Daily Mirror reiterated its support for the Labour party with a front page headline of “Lies, damned lies, and Theresa May”, while the Daily Telegraph ran a story headlined “Your Country Needs You” based on an editorial by the prime minister that urged “patriotic” Labour supporters to vote Conservative. The Daily Express front page said: “Vote for May Today”. Meanwhile, the Times reported that the Conservatives had a seven-point in the final opinion poll before the election, and the Guardian covered May and Corbyn’s late attempts to win support from voters. Thursday’s front pages come after the Daily Mail devoted 13 pages to attacking Labour, Jeremy Corbyn, Diane Abbott and John McDonnell on Wednesday under the headline: “Apologists for terror”. The tabloid urged readers to support the Conservatives in an editorial on its first and second pages, but concentrated its fire on Labour’s leadership, compiling hostile anecdotes dating back to the 1970s.

Read more …

“Instead of buying low and selling high, you’re buying high and crossing your fingers…”

US Market Risk Is Highest Since Pre-2008 Crisis – Bill Gross (BBG)

U.S. markets are at their highest risk levels since before the 2008 financial crisis because investors are paying a high price for the chances they’re taking, according to Bill Gross, manager of the $2 billion Janus Henderson Global Unconstrained Bond Fund. “Instead of buying low and selling high, you’re buying high and crossing your fingers,” Gross, 73, said Wednesday at the Bloomberg Invest New York summit. Central bank policies for low-and negative-interest rates are artificially driving up asset prices while creating little growth in the real economy and punishing individual savers, banks and insurance companies, according to Gross. The U.S. economy is expected to grow 2.2% this year and 2.3% in 2018, according to forecasts compiled by Bloomberg. Trump administration officials have said their policies will boost annual growth to 3%.

Despite being concerned about high asset prices, Gross said he feels required to stay invested and sees value in some closed-end funds. Examples he gave are the Duff & Phelps Global Utility Income Fund and the Nuveen Preferred Income Opportunities Fund. He also said he has about 2% to 3% in exchange-traded funds to get yield and add diversification. “They’re appetizers, not entrees,” he said in an interview outside the conference. Gross’s fund has returned 3.1% in the year through June 6, outperforming 22% of its Bloomberg peers. It has posted a total return of 5.4% since Gross took over management in October 2014 after he was ousted from PIMCO. ”If there’s a common factor it’s the expansion of credit,” Gross said on Bloomberg TV Wednesday. “And the credit that’s being generated by central banks. Money is being pumped out into the system and money that is yielding less than nothing seeks a haven not only in bonds that are under-yielding but in stocks that are overpriced.”

Read more …

We know.

Global Financial System More Leveraged Than 2008 – Paul Singer (BBG)

Billionaire investor Paul Singer said “distorted” monetary and regulatory policies have increased risks for investors almost a decade after the financial crisis. “I am very concerned about where we are,” Singer said Wednesday at the Bloomberg Invest New York summit. “What we have today is a global financial system that’s just about as leveraged – and in many cases more leveraged – than before 2008, and I don’t think the financial system is more sound.” Years of low rates have eroded the effectiveness of central banks to contend with downturns, Singer said at the event in an interview with Carlyle Group co-founder David Rubenstein. “Suppressive” fiscal, regulatory and tax policies have also exacerbated income inequality and led to the rise of populist and fringe political movements, he added. Confidence “could be lost in a very abrupt fashion causing conceivably a ruckus in bond markets, stock markets and in financial institutions,” said Singer, founder of hedge fund Elliott Management, which is known for being an activist investor.

Read more …

Volatility is back.

UK Housing Weakens Further as Market Emits ‘Ominous’ Signals (BBG)

While the general election had an impact on activity in May, damping buyer demand and new sellers coming to the market, RICS used its latest monthly report to highlight broader, and more damaging, risks. That includes the dearth of homes for sale, which has pushed up values in recent years, cutting off many potential first-time buyers. RICS Chief Economist Simon Rubinsohn said the report shows the issue of affordability may even worsen further.“Perhaps the most ominous signal is that contributors still expect house prices to increase at a faster pace than wages over the medium term despite the difficulty many first-time buyers are clearly having,” he said. On the shortage, “it’s hard to see this as anything other a major obstacle to the efficient functioning of the housing market.”

In May, RICS’s monthly price index fell to 17 – the lowest since August – from 23 in April, indicating modest price gains. A gauge for London, where prime properties have been under pressure, remained below zero for a 14th month. Nationally, the supply-demand imbalance means it’s a sellers’ market and recent reports show that any uncertainty about the election had little effect on U.K. asking prices, which according to Rightmove jumped 1.2% to a record in May. For some, it’s reminiscent of the overheating seen before the financial crisis.“Prices are too expensive,” Josh Homans at surveyors Valunation said in the RICS report. “Excessive” valuations are increasing and “we are now in a 2007 situation,” he said.

Read more …

One of those must reads. Economics is all but dead, but not entirely yet.

The Cost of Getting It Wrong (Claire Connelly)

What most of us have long believed about how the economy works is based on a set of fundamental myths, supported by a series of inappropriate and misleading metaphors, from which it is difficult to escape. The emotional investment we have made in these myths has allowed for levels of unemployment, underemployment, inequality and relative poverty which would have seemed incredible a generation ago. Somehow we have convinced ourselves of the following:
– Governments need taxpayers’ money to pay for things.
– Governments, like households, need to at least balance their budgets.
– Deficits are bad and government surpluses are good.
– Deficits paid for by printing money causes inflation.
– Surpluses set aside savings which can be spent in the future.
– Lower wages promote full employment.

Wrong, wrong, all wrong. The federal government does not need taxpayers’ money. Actually, it is the other way around. The government issues the currency. We use it. Taxes help to control inflation and stop us spending too much. (It can also be used to control behaviour, as witnessed by taxes on cigarettes and alcohol). Professor Steve Keen says the government, and the public, have the most basic fundamentals of macroeconomics backwards. “Expenditure is what causes income,” he said. “Reducing expenditure also reduces income.” “Individuals can save (without a significant effect on national income), but if you extrapolate that to the whole economy, you are going to make a huge error.” Similarly, the economist says the idea that the government can save by paying down the national debt is misleading.

“Believing that government saving will increase employment or growth is like believing the Earth sits at the centre of the universe”, he says. All it does is destroy spending which would otherwise have created private sector incomes. “If you don’t understand where income comes from, then it means you don’t understand economics, or the economy.” “Individuals can save money by spending less than they earn but if everyone decides to do that, income falls by precisely as much as you try to save. If the government does the same thing, by saving money at a national level, you cause a recession.”

Read more …

As solid as the Saudi grip on OPEC cuts: “Abu Dhabi’s Petroleum Ports Authority removed the ban on Wednesday – just one day after announcing it.”

The UAE Needs Qatar’s Gas to Keep Dubai’s Lights On (BBG)

When it comes to natural gas shipments, the United Arab Emirates needs Qatar more than Qatar needs the U.A.E. The U.A.E. joined Saudi Arabia in cutting off air, sea and land links with Qatar on Monday, accusing the gas-rich sheikhdom of supporting extremist groups. But the U.A.E., which depends on imported gas to generate half its electricity, avoided shutting down the pipeline supplying it from Qatar, which has the world’s third-largest gas deposits. Without this energy artery, Dubai’s glittering skyscrapers would go dark for lack of power unless the emirate could replace Qatari fuel with more expensive liquefied natural gas. Qatari natural gas continues to flow normally to both the U.A.E. and Oman through a pipeline, with no indication that supplies will be cut, according to a person with knowledge of the matter who asked not to be identified because the information isn’t public.

Qatar sends about 2 billion cubic feet of gas a day through a 364-kilometer (226-mile) undersea pipeline. Dolphin Energy, the link’s operator, is a joint-venture between Mubadala Investment, which holds a 51% stake, and Occidental Petroleum and Total, each with a 24.5% share. Since 2007, the venture has been processing gas from Qatar’s North field and transporting it to the Taweelah terminal in Abu Dhabi, according to Mubadala’s website. Dolphin also distributes gas in Oman. Apart from preserving gas shipments from Qatar, the U.A.E. on Wednesday actually eased efforts to isolate its smaller neighbor. The oil-port authority in Abu Dhabi, the U.A.E. capital, lifted restrictions on international tankers that have sailed to Qatar or plan to do so. Abu Dhabi’s Petroleum Ports Authority removed the ban on Wednesday – just one day after announcing it.

Read more …

The Saudi-Qatar spat is growing and oil plunges? Huh?

Oil Prices Drop More Than 4% On Surge In Stockpiles (CNBC)

U.S. crude prices plunged toward $46 a barrel on Wednesday after weekly government data left the oil market with virtually nothing to cheer. West Texas Intermediate futures dropped more than 4% as stockpiles of oil in the US surged by 3.3 million barrels in the week ended June 2, according to the Energy Information Administration. That confounded analysts’ estimates for a 3.5 million-barrel decline. WTI prices fell as far as $45.92, a four-week low, following the report. The drop below $47 was a “big deal” said John Kilduff at energy hedge fund Again Capital. The next level to watch is the March low just below $44 a barrel, struck after oil prices fell through a number of key technical levels, culminating in a flash crash to $43.76. The bad news kept on coming below the headline figure. Gasoline stocks also jumped by 3.3 million barrels, more than five times the expected increase. Inventories of distillate fuels like diesel and heating oil rose by 4.4 million barrels, 15 times the anticipated rise.

Read more …

Author of “China’s Guaranteed Bubble”.

China’s Top Property-Bubble Prophet Says Prices Set to Soar 50% (BBG)

China’s home prices could rise by another 50% in the nation’s biggest cities, as the latest measures to rein them in are likely to be eased by policy makers seeking to support the broader economy. So says Zhu Ning, deputy director of the National Institute of Financial Research at Tsinghua University in Beijing and author of “China’s Guaranteed Bubble: How Implicit Government Support Has Propelled China’s Economy While Creating Systemic Risk.” As measures to curb housing prices drag on growth in the second half and early next year, he says, the government will resort to its old playbook of dialing them back again to shore up expansion. “We’re living through a bubble,” Zhu said. “If we don’t engage in more meaningful reform, which we haven’t, we’re very likely to have a financial crisis or a burst of the bubble. It’s a matter of sooner or later.”

Real estate prices in major cities will surge again “by another 50% or so” after measures to rein them in are eased, said Zhu, without specifying a time. Because policy makers have previously imposed curbs only to ease them again, people see them as a bluff, he said. Last year 45% of new loans went to mortgages. Local authorities have boosted down-payment requirements, restricted purchases by non-residents, and capped the number of dwellings that a household can own. Since March, at least 26 cities have imposed resale lock-up periods, with Hebei’s Baoding city slapping a decade-long ban on some homes, according to Shanghai-based Tospur Real Estate Consulting.

Zhu said he arrived at the 50 percent estimate based on the average price appreciation after past curbs were lifted, an ever-stronger belief among buyers that housing prices will rise, China’s humongous supply of credit, and tighter controls on capital outflows. Over the past year, however, Zhu, who earned his doctorate in finance at Yale, said he’s had more doubts over whether the thinking of western-trained economists applies to a nation that’s proven naysayers wrong “with its might and its determination” for three decades. “Over the past 12 months my confidence has really been shaken,” he said, adding that a crisis remains probable. “Could China be the black swan that we’ve never seen before?”

Read more …

Where would the EU be without creative accounting?

Banco Popular Wipeout Leaves CoCo Bonds On The Drawing Board (BV)

Banco Popular’s wipeout has left CoCo bonds on the drawing board. The Spanish lender’s failure and rescue by rival Santander did not provide the expected test for bonds which convert into equity under stress: the securities were wiped out before they could be triggered. It’s still not clear whether the bonds work as intended. The collapse of Spain’s sixth-largest bank by assets marked the first big loss for investors in so-called contingent convertible bonds. The securities were created after the 2008 financial crisis to provide an extra buffer when banks are struggling. They permit lenders to preserve capital by suspending dividends, and convert into ordinary shares when capital ratios run low.

The Popular trauma has eased one fear: that investors would panic when a CoCo bond went down, creating a spiral of contagion to other lenders. Similar securities issued by other Spanish banks actually rose in value on June 7, suggesting that investors see Popular as an isolated case. Yet in another way, Popular’s bonds fell short. The securities are supposed to provide extra capital before a bank fails, allowing it to absorb losses over time without failing or requiring a government bailout. But regulators deemed Popular non-viable before any of the triggers in its bonds could blow. The CoCo bonds suffered the same fate as other, more senior bonds that only suffer losses when a bank goes bust.

Read more …

Civil servants and jobs for life. It’s like talking about dinosaurs.

A Reform Beyond Macron’s Grip: The Revolving Door of French Politics (BBG)

French President Emmanuel Macron has promised to change how politics is done in France, starting with the parliament to be elected beginning Sunday. Half of the 500-plus candidates for his young party are women. Half have never held office. They all had to apply online. But he isn’t taking the biggest step: requiring that anyone running for parliament resign from his or her government job. Unlike many other other developed countries, France allows bureaucrats to hold political office—multiple offices, in fact—without having to quit the civil service. And they have a guaranteed right to return. Should the bureaucrat-candidate lose an election, there’s a job for life waiting back at the Agriculture Ministry or the Ministry for Overseas Territories. And a pension at retirement.

Having lawmakers remain part of the civil service creates conflicts of interest, said Dominique Reynie, head of Fondapol, a political research institute. “You have lawmakers making funding decisions about institutions such as universities and hospitals where they are still officially employed,” he said. “We have a parliament that’s inbred.” Among the many beneficiaries of the system: Macron’s prime minister, Edouard Philippe, several others in the cabinet and fully 55% of the parliament that just finished its five-year term. Macron himself, though he’s never been in parliament, kept bureaucrat status through several government and private jobs until he resigned last year to start his political party.

[..] “France is one of the rare countries in Europe where a civil servant can serve an elected mandate without resigning, and with the certainty of going back to their job in case of failure,” said Luc Rouban, a professor at Sciences Po in Lille who has compiled a database of all 2,857 French members of parliament back to 1958. “The absence of professional risk encourages employees from the public sector to run for office.”

Read more …

And that will make any agreements with the Troika impossible. All growth assumptions are wrong.

OECD Puts Greek Growth At Just 1.1% This Year (K.)

The OECD has further doused hopes regarding Greek growth this year, forecasting an expansion of 1.1%, and stresses the need to implement reforms and for the national debt to be lightened. The Organization for Economic Cooperation and Development wrote in its annual report on the global economy published on Wednesday that “delays in reform implementation and reaching an agreement on debt relief would weigh on confidence, hampering investment,” while adjusting its Greek GDP forecast. The 1.1% growth it expects contrasts with the 2.7% growth the budget provides for, the recent European Commission estimate for 2.1% and even the 1.8% forecast included in the midterm fiscal plan the government voted for last month.

Still, the OECD says in its Global Economic Outlook that the economy will expand by 2.5%. It anticipates the primary budget surplus to slide from last year’s 3.8% of GDP, but no lower than 2.5% of GDP for the next few years. The report notes that the Greek economy is beginning to recover although uncertainty remains over the country’s growth prospects. Further progress in reforms is necessary for productivity and exports to grow, the OECD argues. It makes special reference to the reforms in the products markets and in the reduction of nonperforming loans, which could lead to more exports and investments. It also warns that “the expansion of exports depends largely on the pace of world trade growth. Geopolitical tensions among Greece’s neighbors and a renewed large influx of refugees would pose additional risks.”

Read more …

Who does any of the parties involved think they’re fooling? A serious question.

Athens To Seek Growth Package At Eurogroup Meeting (K.)

Ahead of yet another crucial Eurogroup on June 15, the government has its mind set on seeking a package of growth-inducing measures which it hopes may, finally, pry open the door that will ultimately put Greece on the road to recovery. Athens believes that securing such a package could work to bridge the difference between the country’s EUpartners, and lead to an agreement which could pave the way for Greece to access international markets. Speaking to reporters on Wednesday, government spokesman Dimitris Tzanakopoulos outlined three basic principles that should govern any proposal that comes Greece’s way at the meeting of the eurozone finance ministers. Firstly, he insisted that the proposal must specify, in the clearest possible way, what midterm debt relief measures Greece should expect.

Secondly, these measures should also allow all the institutions, including the ECB, to proceed with positive sustainability studies of the Greek debt. Finally, he said, a proposal must include specific measures that will boost growth. The government reckons that a growth-oriented agreement will prompt the IMF to positively revise its projections on the Greek economy, reduce its demands with regard to the Greek program, and open the way for an agreement. Athens believes the formula that is being promoted to get the Fund to join the Greek bailout will stipulate that it will not have to provide immediate funding. Instead, the IMF’s contribution will be placed in a fund of sorts, which will be made available at a later date, on the condition that the midterm debt relief measures are implemented.

Read more …

Why have none of the other countries involved ever said a word?

Greece Says Colombian Gangs Plundering Hospitals Europe-Wide (AP)

Greek authorities say Colombian organized crime rings were behind a string of heists targeting costly medical diagnostic equipment from hospitals in Greece and another 11 European countries. Police say three Colombian suspects have been identified in connection with last month’s four thefts in Greece. Four out of about a dozen stolen pieces of equipment, worth more than half a million euros, have been recovered in Colombia. There were similar thefts in the past four years in France, Germany, Italy, Austria, the Netherlands, Spain, Poland, Lithuania, Luxembourg, Croatia and the Czech Republic, Major-General Christos Papazafeiris said. Papazafeiris, head of security police for the greater Athens region, said Wednesday the stolen equipment had been mailed to Colombia, and was seized in cooperation with local authorities.

Read more …

Airbnb is huge in Athens. Must cost the government a fortune in taxes. Why then liberalize laws even more?

Greek Room Owners Threaten To Return Permits in Airbnb Challenge (K.)

Owners of rooms for rent are threatening to return their operating licenses to the state unless the government withdraws legal clauses that fully liberalize the short-term urban lease market where accommodation is advertised through platforms such as Airbnb and Homeaway. According to a statement by the Confederation of Greek Tourism Accommodation Entrepreneurs (SETKE), if the room owners do hand in their licenses they will be able to enjoy the special privileges of the short-term rental market, which, it argues, has created unfair competition at the expense of legal accommodation. In its statement it claims this will lead to the elimination of the tourism accommodation sector’s 30,000 small entrepreneurs. “Instead of withdrawing the semi-liberal status of the short-term urban lease market under the 2016 law, the government is fully liberalizing it with a 2017 law abolishing the quantitative and qualitative limitations and permitting the rental for tourism purposes of all properties of all owners year round without any income limits,” SETKE says.

Read more …

The EU keeps thinking reality is whatever it wants it to be. The European Parliament President says: “The rules have to be the same for everybody.”. They’re not. They’re obviously different for Greece, and that’s not Greece’s doing.

Bid For EU States To Stop Migrants, Refugees ‘Asylum Shopping’ (K.)

As Greece continues to struggle to host thousands of migrants, European Parliament President Antonio Tajani on Wednesday called for a common agreement from all European Union member-states on the implementation of asylum procedures aimed at stopping migrants traveling from one country to another “shopping for asylum status.” “At the moment the rules are not properly harmonized,” Tajani told reporters. “The rules have to be the same for everybody. Otherwise we will end up with people shopping for asylum status, which undermines our credibility.” He noted that many refugees who have been accepted in European countries as part of an EU relocation program have continued their journeys to more prosperous nations such as Germany or Sweden.

Latvia welcomed 380 refugees as part of the relocation program but most of those – 313 – have already moved on to Sweden or Germany, according to Agnese Lace from Latvia’s Center for Public Policy. She said low salaries, a lack of jobs and language barriers meant asylum seekers had little incentive to remain in the country. Meanwhile Andras Kovats of the Hungarian Association for Migrants said Hungary’s failure to support integration was pushing new arrivals abroad. In a related development, Nils Muiznieks, the Council of Europe’s commissioner for human rights, expressed concern at reports of collective expulsions of asylum seekers from Greece to Turkey. “I urge the Greek authorities to cease immediately the pushback operations and uphold their human rights obligation to ensure that all people reaching Greece can effectively seek and enjoy asylum,” Muiznieks said in a statement.

Read more …

Jun 062017
 
 June 6, 2017  Posted by at 9:32 am Finance Tagged with: , , , , , , , , , , ,  1 Response »


Pablo Picasso Les femmes d’Alger 1955

 

Trump Set To Make First Moves At Completely Revamping The Fed (CNBC)
Trump’s ‘Been Clear To Me’ To Try To Rebuild Russia Ties: Tillerson (R.)
Contractor Charged With Leaking Document About US Election Hacking (R.)
How The Intercept Outed Reality Winner (ErrataS)
China’s Biggest Bank Is Wall Street’s Go-To Shadow Lender (BBG)
One Belt, One Road, and One Debt Hangover (Rickards)
Qatar Stocks Tumble 7% As Six Arab Nations Cut Diplomatic Ties (CNBC)
Qatar’s Real Power Is As The World’s Largest LNG Exporter (BBG)
Britain’s Economic Model Is Broken: This Is Our First Post-Crash Election (G>)
Simple Numbers Tell Story Of Police Cuts Under Theresa May (G.)
Earnings vs. Profits & The Bull Market (Roberts)
US M&A: One Of The Scariest Charts To Look At – Citi (BI)
IMF’s Lagarde Offers Eurozone Greek Debt Compromise, Handelsblatt Says (R.)
The Euro’s Future Demands Trust (K.)
An Occupied Hotel In Greece Models How To Welcome Refugees (WNV)

 

 

Well, it’ll be different alright. Given the Fed’s actions over the past decade, it can hardly get wrose.

Trump Set To Make First Moves At Completely Revamping The Fed (CNBC)

President Donald Trump appears ready to remake the Federal Reserve in an image that will be considerably different than what investors have known for many years. The president is prepared to nominate Randal Quarles and Marvin Goodfriend to two of three vacancies at the central bank, according to multiple press accounts that have not been disputed by the administration. Quarles likely would assume the role vacated by Daniel Tarullo to oversee the nation’s banking system. White House officials did not respond to a CNBC request for comment. Should Trump nominate the two men and they receive confirmation, it will represent the first steps in a possible substantial remaking of a Fed that has practiced ultra-loose monetary policy for the past decade but has been tight on banking regulations.

Trump will have the opportunity to name one more person now, then can fill two even more critical vacancies in 2018 — that of Chair Janet Yellen and Vice Chair Stanley Fischer. If the Quarles and Goodfriend moves are indicators of what’s to come, things could start getting less comfortable for Yellen. Both are considered solidly conservative, in line with the Republican president and Congress but perhaps not with Yellen. “Clearly, these appointees are a significant departure from the crowd that we’ve had on the board,” said Christopher Whalen, head of Whalen Global Advisors and a former investment banker and long-time financial analyst. “Yellen is probably the most left-wing Fed chair we’ve ever had. I also think both Quarles and Goodfriend have much better grounding in the financial markets. That would be refreshing.”

Yellen, however, may not think so, particularly if the coalition she has carefully crafted since taking the chair’s seat in 2014 starts to unravel. “I welcome these additions,” Whalen said. “Hopefully they put a banker in the third slot. Then eventually Yellen’s going to leave because she’s going to start losing votes.”

Read more …

Kiwis flipping birds.

Trump’s ‘Been Clear To Me’ To Try To Rebuild Russia Ties: Tillerson (R.)

U.S. President Donald Trump told his top diplomat that the dispute over probes into links between his inner circle and Russia should not undermine U.S. efforts to rebuild relations with Moscow, Secretary of State Rex Tillerson said on Tuesday. Speaking in New Zealand after a trip to Australia, Tillerson reiterated the U.S. commitment to the Asia-Pacific region as global leaders have expressed growing mistrust over the Trump administration, which has withdrawn from key international agreements since taking office. At home, Trump’s administration has been plagued by questions over links to the Russian government. Tillerson said Trump told him to try to improve ties with Russia regardless of the U.S. political backdrop.

“I can’t really comment on any of that because I don’t have any direct knowledge,” Tillerson told a news conference in Wellington, when asked how worried he was that the U.S. political crisis could take down the Trump administration. “The president’s been clear to me: do not let what’s happened over here in the political realm prevent you from the work that you need to do on this relationship and he’s been quite clear with me… that we might make progress. I’m really not involved in any of these other issues,” he said after a meeting with New Zealand Prime Minister Bill English.

Read more …

This is another very curious story, and it’s not just the girl’s name, Reality Leigh Winner. Still, even The Intercept jumps to conclusions:

“Russian military intelligence executed a cyberattack on at least one U.S. voting software supplier and sent spear-phishing emails to more than 100 local election officials just days before last November’s presidential election, according to a highly classified intelligence report obtained by The Intercept.”

Even though they know that when signs point to Russia, it’s probably not Russial, the caveat only come later:

“While the document provides a rare window into the NSA’s understanding of the mechanics of Russian hacking, it does not show the underlying “raw” intelligence on which the analysis is based. A U.S. intelligence officer who declined to be identified cautioned against drawing too big a conclusion from the document because a single analysis is not necessarily definitive.”

If the raw intelligence is not available, how can one draw the Russia conclusions? The Intercept now blindly trusts US intelligence agents? And that’s not all, see next article…

Contractor Charged With Leaking Document About US Election Hacking (R.)

The U.S. Department of Justice on Monday charged a federal contractor with sending classified material to a news organization that sources identified to Reuters as The Intercept, marking one of the first concrete efforts by the Trump administration to crack down on leaks to the media. Reality Leigh Winner, 25, was charged with removing classified material from a government facility located in Georgia. She was arrested on June 3, the Justice Department said. The charges were announced less than an hour after The Intercept published a top-secret document from the U.S. National Security Agency that described Russian efforts to launch cyber attacks on at least one U.S. voting software supplier and send “spear-phishing” emails, or targeted emails that try to trick a recipient into clicking on a malicious link to steal data, to more than 100 local election officials days before the presidential election last November.

While the charges do not name the publication, a U.S. official with knowledge of the case said Winner was charged with leaking the NSA report to The Intercept. A second official confirmed The Intercept document was authentic and did not dispute that the charges against Winner were directly tied to it. The Intercept’s reporting reveals new details behind the conclusion of U.S. intelligence agencies that Russian intelligence services were seeking to infiltrate state voter registration systems as part of a broader effort to interfere in the election, discredit Democratic presidential candidate Hillary Clinton and help then Republican candidate Donald Trump win the election. The new material does not, however, suggest that actual votes were manipulated.

Read more …

… but it gets weirder. Soon after the Intercept published the story and docs, the leaker was arrested. How? She could easily be traced back to these docs. Was the Intercept not aware of this? That’s hard to believe, leaked documents is what they do. Was someone careless? We haven’t seen any excuses made. Did they knowingly give her up? Is this then the end of the Intercept?

How The Intercept Outed Reality Winner (ErrataS)

Today, The Intercept released documents on election tampering from an NSA leaker. Later, the arrest warrant request for an NSA contractor named “Reality Winner” was published, showing how they tracked her down because she had printed out the documents and sent them to The Intercept. The document posted by the Intercept isn’t the original PDF file, but a PDF containing the pictures of the printed version that was then later scanned in. The problem is that most new printers print nearly invisibly yellow dots that track down exactly when and where documents, any document, is printed. Because the NSA logs all printing jobs on its printers, it can use this to match up precisely who printed the document. In this post, I show how.

You can download the document from the original article here. You can then open it in a PDF viewer, such as the normal “Preview” app on macOS. Zoom into some whitespace on the document, and take a screenshot of this. On macOS, hit [Command-Shift-3] to take a screenshot of a window. There are yellow dots in this image, but you can barely see them, especially if your screen is dirty.

We need to highlight the yellow dots. Open the screenshot in an image editor, such as the “Paintbrush” program built into macOS. Now use the option to “Invert Colors” in the image, to get something like this. You should see a roughly rectangular pattern checkerboard in the whitespace.

It’s upside down, so we need to rotate it 180 degrees, or flip-horizontal and flip-vertical:

Now we go to the EFF page and manually click on the pattern so that their tool can decode the meaning:

This produces the following result:

The document leaked by the Intercept was from a printer with model number 54, serial number 29535218. The document was printed on May 9, 2017 at 6:20. The NSA almost certainly has a record of who used the printer at that time.

Read more …

“With 260-to-1 Leverage A Chinese Giant Takes On Goldman In US Repo”

China’s Biggest Bank Is Wall Street’s Go-To Shadow Lender (BBG)

High up in a New York City skyscraper, China’s biggest bank is playing in the shadows of American finance. The prize for Industrial & Commercial Bank of China isn’t stocks, bonds or currencies. It’s the grease in the wheels of all those markets: repurchase agreements. By exploiting a loophole in rules intended to keep U.S. banks from getting “too big to fail,” the state-owned ICBC has become a go-to dealer in repos in just a few short years, alongside longtime powerhouses like Goldman Sachs Group Inc. The short-term loans allow investors to borrow money by lending securities, serving a vital role in day-to-day trading on Wall Street. ICBC’s rise reflects not only China’s global ambitions in high finance, but also how post-crisis rules have let a whole host of new players profit from the murky world of shadow banking, largely beyond the reach of bank regulators.

As big banks face tougher standards, they’re being replaced by brokers, asset managers and foreign firms like ICBC, which can use more leverage and take greater risks. That has some regulators worried non-bank lenders are once again emerging as a threat to financial stability, less than a decade after panic in the repo market wiped out Lehman Brothers. “The concern is that non-bank dealers are becoming a larger part of the repo market,” said Benjamin Munyan, who specializes in shadow banking and regulation at Vanderbilt University’s Owen Graduate School of Management. “These intermediaries are outside the scope of our traditional Federal Reserve safety net.” In some ways, the development is emblematic of how steps taken to stamp out financial risk-taking in one area have created unforeseen risks in another. But it also highlights the willingness and ability of firms to jump through whatever holes regulators leave or create.

In a repo, firms borrow money by putting up securities like Treasuries as collateral. The cash can then be used to buy higher-yielding assets, something hedge funds often do. When the agreement expires, the borrower “repurchases” the collateral, paying interest to the lender. The process can be repeated over and over, boosting a firm’s leverage, as long as the assets backing the repo maintain their value. During the credit crisis, reliance on such short-term funding helped bankrupt Lehman and imperiled the financial system. Bailouts put the biggest securities firms under Fed supervision as banks, and Dodd-Frank regulations forced them to shrink their assets. A key provision has been the enhanced capital requirements, which made it prohibitively expensive for large U.S. banks to warehouse low-yielding Treasuries and finance repos.

Read more …

China runs out of collateral.

One Belt, One Road, and One Debt Hangover (Rickards)

China is not only one of the world’s largest debtors, it is one of the world’s largest creditors. China uses debt not in the customary financial manner, but as a political tool to generate employment and maintain social stability. Likewise China uses loans and investment as a tool to advance its strategic interests. This may be good geopolitics in the short run, but it will be a disaster economically in the long run. Just as Chinese state owned enterprises (SOEs) can’t repay debts to Chinese banks, China’s foreign partners will not be able to repay debts to China itself. These twin disasters-in-the-making may converge in such a way that China’s assets disappear or become illiquid at exactly the time they are most needed to bail-out its own banking system.

China has launched four major overseas investment initiatives in the past ten years. The oldest is their sovereign wealth fund, China Investment Corporation, or CIC, established in 2007. Sovereign wealth funds are a way for countries to invest their reserves in securities other than safe instruments such as U.S. Treasury notes. CIC today has assets of over $800 billion, spread among stocks, corporate bonds, hedge funds, private equity, commodities, and commercial real estate. Some of CIC’s investments are directly-owned enterprises, including gold mines in Zimbabwe. While these assets may outperform Treasury notes over time, they are also illiquid, and would tend to decline in value during a financial panic. This means that about 20%, of China’s reserves are unavailable for critical tasks such as bailing out the banking system or defending the currency.

[..] The problem with One Belt, One Road is that many of the potential recipients of development loans are not highly creditworthy or have a track record of defaulting on debts or requiring substantial debt restructuring in order to stay current. As with Chinese bank loans to SOEs, the NDB, AIIB, and One Belt, One Road efforts are not primarily economic but political. China is seeking to use its economic clout to create jobs and control critical infrastructure. [..] As with its other policies, China will turn liquid assets into illiquid assets in order to pursue its ambitions. This could make sense if nothing goes wrong. But, things will go wrong. China will face a monumental liquidity crisis sooner than later and find that its liquid assets have been turned into bridges to nowhere.

Read more …

This thing has been developing over decades.

Qatar Stocks Tumble 7% As Six Arab Nations Cut Diplomatic Ties (CNBC)

Qatar’s stock market tumbled more than 7% on Monday as six of the Middle Eastern country’s neighbors reportedly severed diplomatic relations with Doha for allegedly supporting terrorism. The key stock index in Doha slipped shortly after Monday’s open – the benchmark’s sharpest fall in more than seven years – before paring some its losses to trade down 7.2% at around 3:00 p.m. local time. Six countries, including Saudi Arabia and Egypt, had all coordinated on Monday to accuse the wealthy Gulf state of supporting terrorism, which Qatar has denied. Investors viewed the diplomatic withdrawal as a major breakdown between powerful Gulf nations, who are also close U.S. allies. While Saudi Arabia – the world’s leading crude oil exporter – said Qatar had supported “Iranian-backed terrorist groups,” Qatar described the joint decision as having “no basis in fact” and was therefore “unjustified”.

Political tensions in the region had been building in recent weeks as Egypt, Saudi Arabia, Bahrain and the United Arab Emirates – all countries to have cut relations with Doha on Monday – had blocked Qatari-based news sites in May. However, Monday’s decision was reported to be based on Qatar’s alleged role in supporting Islamist groups and its stance concerning Iran – a regional rival to Saudi Arabia. Qatar, a member of the U.S. coalition against the so-called Islamic State, has frequently and consistently rejected accusations from Iraq’s Shia leaders that it has provided financial backing to ISIS. “Whilst Qatar is the member of the U.S. coalition against IS, wealthy individuals have reportedly made donations to extremist groups and the government is also accused of supporting extremists – allegations that Qatar vehemently deny,” Tamas Varga, oil associates analyst at PVM, said in an email on Monday.

Read more …

If I remember, the UK gets 90% of its LNG from Qatar.

Qatar’s Real Power Is As The World’s Largest LNG Exporter (BBG)

Oil markets seem impervious to geopolitical risk. As four Arab neighbors imposed an unprecedented embargo on Qatar on Monday, oil prices briefly jumped 1.6 percent before falling back. The fuel to watch, though, is not oil, but gas. If this dispute is not resolved quickly, it may mean a hot summer in the Gulf. The problem has been simmering for a long time, with three of Qatar’s Gulf Cooperation Council colleagues blaming it for backing Islamist groups including the Muslim Brotherhood, and being too friendly with Iran. But in a dramatic escalation shortly after U.S. President Donald Trump’s visit to Saudi Arabia, the United Arab Emirates and Bahrain, along with Egypt, the shaky official government of Yemen and Libya’s contested eastern government broke relations with Doha and imposed a ban on air, land and sea travel.

Much of Qatar’s food and key equipment comes by land from Saudi Arabia, or reshipments through Dubai’s Jebel Ali port. Qatar is one of the smallest oil producers in OPEC, at 618,000 barrels per day, but condensate (light oil) and natural gas liquids – byproducts of its giant North Field – add about another 1.3 million barrels per day. It will stay in the OPEC production cuts deal, and even if it does not, its contribution is small. Its real power comes from being the world’s largest liquefied natural gas exporter. Qatar’s liquefied natural gas and oil exports should not be affected, even if Saudi and Emirati waters are barred to its ships. They can sail via Iranian waters and then pass the Strait of Hormuz via the usual shipping lane in Omani territory, or stay in the Iranian sector if Oman joins its GCC colleagues in the blockade. Any attempt to stop Qatari exports would be a major crisis, and would invite a serious response from major LNG customers Japan, South Korea, China and India.

Read more …

So is Britain’s political model.

Britain’s Economic Model Is Broken: This Is Our First Post-Crash Election (G>)

Mayism could mean Brexit Britain renaming itself Poundland – cheap goods and cheap workers – or it might mean a reversion to some kind of one-nation Toryism. Her party just doesn’t know. Were it not for the Tories’ slim majority, their crisis would be far more exposed. The sofa class don’t do political economy, more’s the pity, but if they did they’d see the contradictions of Conservatism in 2017. The party of capital is now pursuing a policy – hard Brexit – hated by capital. The political arm of the City is about to rip a hole through the City. All these paradoxes are given almost physical representation on our tellies every night by May herself – a populist who doesn’t actually like people.

As a non-believer in New Labour, Corbyn has no such ideological awkwardness, while John McDonnell is one of the few people in the Labour party who didn’t subcontract out their economic thinking to Brown and Ed Balls. But still, their team admit they have a way to go in rethinking Britain’s economy – and they are having to do so against a famously hostile parliamentary party. The result is Corbyn’s manifesto, which is chiefly remarkable for its unabashed defence of basic social democratic values. It’s the programme you imagine Brown would like to have delivered – if only he hadn’t been so busy triangulating.

But behind the scenes, the party is doing much deeper thinking. I have seen an internal Labour report commissioned by McDonnell. It forms one part of what could be a far more radical programme after Thursday night. Some of the lines in it will give the Daily Mail stories for days – such as calling for a overhaul of the BBC trust (which is “dominated by appointees from the corporate and financial sectors”) and hundreds of millions in public money to be spent on establishing workers co-ops. For the sympathetic reader, however, it contains some of the most imaginative thinking around economic democracy to come out of the party in decades (not saying much, sadly). In that, it sits alongside the speeches made by Corbyn’s team last week about the need for “industrial patriotism”, and to give public backing to new sectors.

Read more …

More cuts are being prepared.

Simple Numbers Tell Story Of Police Cuts Under Theresa May (G.)

Police numbers, including the number of armed police officers, have fallen sharply under Theresa May’s watch first as home secretary between 2010 and 2016 and then as prime minister. The simple numbers tell the story. In 2010 May as home secretary made the mistake that Margaret Thatcher never made in the 1980s and agreed to a Treasury demand to cut police budgets by 18%. Over the next five years the number of police officers in England and Wales fell from a peak of 144,353 in 2009 to 122,859 in 2016. At the same time the number of specialist armed police officers has fallen from a peak of 6,796 in 2010 to 5,639 in 2016. As the graph shows it would appear to be an open and shut case that cuts in police officer numbers have had an impact on the capacity of the police to respond.

May was told in 2010 that in cutting police funding she was making a mistake that Thatcher never made when she instinctively realised that there would come a crucial moment when the country, and her premiership, would depend entirely on the resilience of the thin blue line. May took a different approach as home secretary that was not without foundation. She argued that with the big continuing falls in crime that had been seen since the mid-1990s it was not necessary to maintain such a large police force. Anyway, it was argued, there was no direct link between the number of officers and the level of crime.

Read more …

What you get after years of having zero price discovery. It gets worse as we go along.

Earnings vs. Profits & The Bull Market (Roberts)

As I have discussed previously, the operating and reported earnings per share are heavily manipulated by accounting gimmicks, share buybacks, and cost suppression. To wit: “The tricks are well-known: A difficult quarter can be made easier by releasing reserves set aside for a rainy day or recognizing revenues before sales are made, while a good quarter is often the time to hide a big ‘restructuring charge’ that would otherwise stand out like a sore thumb. What is more surprising though is CFOs’ belief that these practices leave a significant mark on companies’ reported profits and losses. When asked about the magnitude of the earnings misrepresentation, the study’s respondents said it was around 10% of earnings per share.“ However, if we analyze corporate profits (adjusted for taxes and inventory valuations) we find a very different story. Since the lows following the financial crisis, the S&P 500 has grown by 266% versus corporate profit growth of just 98%.

Important Note: The profits generated by the Federal Reserve’s balance sheet are included in the corporate profits discussed here. As shown below, actual corporate profitability is weaker if you extract the Fed’s profits from the analysis. As a comparison, in the first quarter of 2017, Apple reported a net income of just over $17 billion for the quarter. The Fed reported a $109 billion profit.

With corporate profits still at the same level as they were in 2011, there is little argument the market has gotten a bit ahead of itself. Sure, this time could be different, but it usually isn’t. The detachment of the stock market from underlying profitability suggests the reward for investors is grossly outweighed by the risk. But, as has always been the case, the markets can certainly seem to “remain irrational longer than logic would predict.” This was something Jeremy Grantham once noted: “Profit margins are probably the most mean-reverting series in finance, and if profit margins do not mean-revert, then something has gone badly wrong with capitalism. If high profits do not attract competition, there is something wrong with the system, and it is not functioning properly.” Grantham is correct. As shown, when we look at inflation-adjusted profit margins as a percentage of inflation-adjusted GDP we see a clear process of mean reverting activity over time. Of course, those mean reverting events are always coupled with a recession, crisis, or stock market crash.

More importantly, corporate profit margins have physical constraints. Out of each dollar of revenue created there are costs such as infrastructure, R&D, wages, etc. Currently, one of the biggest beneficiaries to expanding profit margins has been the suppression of employment, wage growth, and artificially suppressed interest rates which have significantly lowered borrowing costs. Should either of the issues change in the future, the impact to profit margins will likely be significant. The chart below shows the ratio overlaid against the S&P 500 index.

Read more …

Well, if you don’t know what something’s worth, how are you going to justify purchasing it? At some point that stops.

US M&A: One Of The Scariest Charts To Look At – Citi (BI)

The slowdown in US dealmaking since 2015 is cause for concern, Citi’s equity strategists say. “In some respects, one of the scariest charts to look at currently is the number of announced mergers & acquisition deals over the past year or two,” Tobias Levkovich, the chief US equity strategist at Citi, said in a note on Friday. “M&A lawyers argue the ‘uncertainty’ factor, which has come about recently, given some unpredictable aspects of the new Trump administration, has been the issue. It only may explain the last six months, but the trend has been poor for about two years or more. In the past, there has been some correlation with the S&P 500 and thus it could generate more legitimate fears than some of the other excuses that are put forth for not wanting to buy American equities.”

This year through June 5, 7,561 deals were announced, the lowest count since 2013, according to S&P Global Market Intelligence. M&A volume reached a record $2.055 trillion that year, the firm’s data show, slipping in 2016 to $1.7 trillion. More dealmaking signals, in part, that companies are placing big bets on the long-term growth of certain pockets of the market. Levkovich said tough antitrust measures from European authorities and the Department of Justice antitrust division may be slowing dealmaking.

Read more …

Please let it stop.

IMF’s Lagarde Offers Eurozone Greek Debt Compromise, Handelsblatt Says (R.)

IMF Managing Director Christine Lagarde has offered Greece’s European creditors a way out of their impasse over Athens’s debts that would allow the eurozone to release a tranche of aid later this month. The IMF believes Greece needs a debt haircut, which Germany rejects. Lagarde suggested agreeing a deal whereby the IMF would stay on board in the bailout, as Berlin wants, but not pay out further aid until debt relief measures are clarified. “There can therefore be a program in which the disbursement only takes place when the debt measures have been clearly outlined by the creditors,” she told Handelsblatt in pre-released comments to run in its Tuesday edition. The compromise could allow eurozone finance ministers to give the go-ahead for their next payment of their tranche of aid at their meeting on June 15, Handelsblatt said.

“It is a possibility for an agreement,” Lagarde said. Greece has about €7 billion of debt maturing in July, a sum it will not be able to repay unless it gets new loans out of its current bailout worth up to 86 billion euros, the third aid program since its debt crisis began. Eurozone finance ministers failed to agree with the IMF last month on debt relief terms for Greece. They did not release new loans to Athens but recognized it had made significant progress with reforms. Greece hopes that eurozone finance ministers will offer enough clarity in June on debt relief measures that could be carried out after its bailout ends in 2018, to show investors that its debt – now at 197% of GDP – will be sustainable and help it return to bond markets as early as this summer.

Read more …

Trust in the Troika has proven to be a very expensive mistake.

The Euro’s Future Demands Trust (K.)

The European Commission presented its proposal for possible ways to deepen Europe’s Economic and Monetary Union a few days ago, as part of the public debate on the EU’s future. It went unnoticed in Greece, which is a pity, because if all that is proposed is adopted, the Greek problem will be overcome; also, if the mechanisms and procedures now in place had existed from the start, our country would not have hit a dead end. The question now is how Greece will be part of a system that was established because of the Greek crisis but from which our country is still excluded.

For the Greeks – sinking in recession, insecurity and isolation – the ironies are many. Presenting the proposals in Brussels on Wednesday, Commission Vice President Valdis Dombrovskis said: “The euro is one of Europe’s most significant achievements. It is much more than just a currency. It was conceived as a promise of prosperity. To keep that promise for future generations, we need the political courage to work on strengthening and completing Europe’s Economic and Monetary Union now.” Pierre Moscovici, commissioner for economic and financial affairs, added: “The euro is already a symbol of unity and a guarantee of stability for Europeans. We now need to make it a vehicle for shared prosperity. Only by reversing economic and social divergence in the euro area will we be able to defeat the dangerous populism that this fuels.”

The indirect references to Greece are clear. This is where the euro’s weaknesses first appeared, this is where the political center was torn apart and fringe groups gained power, this is where confidence in the common currency and in solidarity is being tested. The Commission’s proposals focus on completing a genuine financial union, achieving a more integrated economic and fiscal union, on greater democratic accountability and strengthening euro-area institutions (including a full-time Eurogroup chair and a European Monetary Fund). The Commission noted the euro’s successes, adding, “And yet it is only 25 years since the Treaty of Maastricht paved the way for the single currency and only 15 years since the first coin was used.” So we ask: As the currency is so new, and as the necessary mechanisms and procedures are only now being instituted, why is Greece continually an outcast? How can we pretend all is well with the euro? .

Read more …

Nice thing is the City Plaza is not really occupied, nor a squat. The former employees own everyhting inside the building.

An Occupied Hotel In Greece Models How To Welcome Refugees (WNV)

It is almost summer in Europe. Temperatures are rising, and many are preparing for vacations somewhere in the Mediterranean, which means searching for accommodation online. “No pool, no minibar, no room service, and nonetheless: the best hotel in Europe” reads the City Plaza Hotel’s homepage. A joke? Yes. A lie? Not at all. While this hotel in Athens, Greece might not offer those conventional services, it provides something far better: Free housing, medical care and meals for hundreds of people who have had to flee their countries. [..] Over the course of the year, the hotel has provided decent housing for over 1,500 refugees — 400 at any one time — in times of undignified detention camps. It is a model of self-organization and solidarity with refugees — who share living quarters with locals — in times of rising racism and nationalism.

[..] Thousands of homeless refugees are living in the streets of Athens, including families with small children. In response to this crisis, the Greek state set up more than 49 detention centers and camps. Activists and refugees had another idea of how to respond. On April 22, 2016 they took over the City Plaza — which, like many businesses since the economic collapse, had been abandoned for six years. Along with eight other self-organized shelters occupied by refugees and activists around the city, the hotel offers displaced people a safe and dignified alternative to the miserable, unhygienic and cruel conditions of the detention facilities. When the City Plaza went bankrupt in 2010, the management failed to pay the employees their final salaries. According to a court ruling, since they were unable to pay the workers monetarily, everything that is inside the building belongs to the workers.

However, the owner prevented auctioning the hotel for years. When the seven-story building was finally occupied last year, the former hotel employees declared that they were happy to offer and share everything. And the activists running City Plaza now support the workers and are planning common efforts to meet the demands of both the former workers and the refugees. The refugees’ demands include access to housing, education and employment. By providing everything that is needed themselves, the project proves that decent living conditions for everyone is possible, even in a country as burdened by crisis as Greece. And the warm reception that the refugees have received by those living near the hotel demonstrate that poverty is not an obstacle to welcoming people with open arms. “The neighbors bring some clothes, some food — you know, they are warm. Although their lives are also ruined, they see in the ruins of their lives, the ruins of the lives of other people,” said Maria, one of the Greek activists running the hotel.

Read more …

Dec 082014
 
 December 8, 2014  Posted by at 11:36 am Finance Tagged with: , , , , , , , , , ,  3 Responses »


Russell Lee Front of livery stable, East Side, New York City Jan 1938

Japan’s Economy Is Worse Than Feared (WSJ)
Japan’s Recession Deepens as Election Looms for Abe (Bloomberg)
China Trade Data Miss Forecasts By A Wide Margin (MarketWatch)
China Trade Data Paints Dreary Picture Of Economy (CNBC)
The Two Main Threats That Are Shaking Global Firms: China And Deflation (CNBC)
Oil, Gas Bloodbath Spreads to Junk Bonds, Leveraged Loans. Defaults Next (Wolf)
Canada’s LNG Export Dream Is Dead (Oilprice.com)
Dollar Surge Endangers Global Debt Edifice, Warns BIS (AEP)
Sudden Swings Expose Fragility Of Financial Markets: BIS (Reuters)
International Lending To China Soars In 2014: BIS (Reuters)
Why The Dollar Is Still King: BIS (CNBC)
Why The World Is Like A Real-Life Game Of Global Domination (Guardian)
Citigroup Panicked Over Fraud at Chinese Ports (Bloomberg)
The Long Slow Inexorable Demise Of America’s Working-White-Male (Zero Hedge)
ECB’s Loans Offer Clues In QE Guessing Game (Reuters)
Bank of England: Half A Million Housebuyers Face Mortgage Arrears (Guardian)
Bank of England: UK Banking To Double In Size, Reach 950% of GDP (Guardian)
Keep An Eye On The Fed’s Accelerating Asset Sales (CNBC)
Bill Gross: You Can’t Cure Debt With More Debt (CNBC)
The Most Essential Lesson of History That No One Wants To Admit (Beversdorf)
Uncork the Central Bank Bubbly (StealthFlation)
Taming Corporate Power: The Key Political Issue Of Our Age (Monbiot)

“The key economic figures come just six days before general elections ..”

Japan’s Economy Is Worse Than Feared (WSJ)

Japan’s economy contracted for the second straight quarter in the July-to-September period, revised data released Monday showed, serving as a bitter reminder to Prime Minister Shinzo Abe that the nation’s economy remains in the woods two years after he came into office. Gross domestic product shrank an annualized 1.9% in the third quarter from the previous three-month period. The government last month estimated that the economy shrank 1.6% in the third quarter after a 6.7% plunge in the second quarter, indicating that the economy had entered a recession.

The key economic figures come just six days before general elections, which Mr. Abe is framing as a referendum on his economic policy program known as Abenomics. Recession or not, Japan’s economy is in a funk. Private consumption, the most important pillar of the economy, has shown little sign of life after a one-two punch of a sales tax increase in April and inflation caused by the yen’s 30% fall against the dollar. The consumption slump had led businesses to slash production and capital investment, further undermining economic growth.

Read more …

How crazy will he get after being re-elected?

Japan’s Recession Deepens as Election Looms for Abe (Bloomberg)

Japan’s recession was deeper than initially estimated as company investment unexpectedly shrank, a blow to Prime Minister Shinzo Abe as he campaigns for re-election on his economic credentials. The economy contracted an annualized 1.9% in the July to September period from the previous quarter, weaker than the 1.6% drop reported in preliminary data. The result was also below every forecast in a Bloomberg News survey that showed a median 0.5% decrease. The surprise decline in business investment sapped the strength of the world’s third-biggest economy, compounding damage from a slump in consumer spending after a sales-tax rise in April. With the main opposition party caught unprepared, Abe is on-track to win the Dec. 14 election, even as a decline in the yen cuts into people’s spending power. “Today’s report shows a pretty bleak picture of Japan’s economy,” said Taro Saito, director of economic research at NLI Research Institute in Tokyo. “We are going to see a recovery but only a gradual one. The weakening yen should provide a boost to manufacturers and those benefits will penetrate through a wide range of industries.”

Read more …

Not much use, these analysts.

China Trade Data Miss Forecasts By A Wide Margin (MarketWatch)

China’s exports rose a disappointing 4.7% in November while imports unexpectedly fell, as the world’s second-largest economy grapples with sluggish global activity and weak demand at home. Analysts said the data the government released on Monday show that the country’s crucial export sector – the one segment of the economy that had been showing signs of strength – was struggling during the month. “This was worse than expected,” said Ma Xiaoping, economist at HSBC. “We can see there is considerable downward pressure on the economy.” China’s economy has been showing slower growth after years of double-digit expansion. Growth slipped to 7.3% year-over-year in the third quarter, its slowest pace in more than five years. Full-year growth could fail to reach the government target of about 7.5% for the year.

November exports were below market expectations of an 8% gain compared with a year earlier and much less robust than the 11.6% increase in October. Meanwhile, imports sank 6.7% against expectations for a 3% rise, after a 4.6% year-over-year rise in October. Analysts said a rebound in the yuan’s value against other currencies could have been a factor. CIMB economist Fan Zhang said the weak export growth also reflects a strong month in the year-earlier period, while the drop in imports includes the impact of a sharp decline in global commodities prices, particularly oil. “In 2015, I still expect exports to improve over 2014 because of U.S. economic growth,” Mr. Zhang said. China’s central bank in late November cut benchmark interest rates for the first time in more than two years in a bid to give the economy a boost and cut borrowing costs for struggling companies. It has also injected liquidity into the banking system and encouraged banks to lend to struggling small businesses and the agricultural sector.

Read more …

Time for Xi and Li to set a new, much power, growth target?!

China Trade Data Paints Dreary Picture Of Economy (CNBC)

China’s annual import and export figures slowed sharply in November, data showed on Monday, reinforcing signs of fragility in the world’s second-largest economy. Exports rose 4.7% in November from a year earlier, much slower than an 11.6% rise in October and below expectations for an 8.2% increase in a Reuters poll. Imports fell an annual 6.7% in November, well below October’s 4.6% rise, and below expectations for a 3.9% increase. That left the country with a trade surplus of $54.5 billion for the month, above expectations of $43.5 billion. The Australian dollar weakened against the U.S. dollar after the data was released, recently trading at $0.8297.

“It’s clear domestic demand is pretty weak, most of the decline seems to be commodity related – which partly reflects lower prices, but is also because of the slowdown in the housing sector and overcapacity in industrial sectors,” Alaistair Chan, economist at Moody’s Analytics told CNBC. The slowdown in exports, meanwhile, was likely driven by a clamp down on over-invoicing seen earlier in the year and could suggest a cooling in global demand, said Dariusz Kowalczyk, senior economist and strategist at Credit Agricole.

Read more …

“The Asian powerhouse, which has been the world’s biggest consumer of raw materials, is now on course to post its slowest growth in nearly a quarter of a century.”

The Two Main Threats That Are Shaking Global Firms: China And Deflation (CNBC)

With an uneasiness looming over the global economy as the year draws to a close, chief financial officers (CFOs) have told CNBC that softer growth in China and the threat of deflation in the euro zone are the two biggest issues their firms are facing. Fifty-one CFOs from Europe and Asia – who make up the CNBC CFO Global Council – were asked what the major risks that their firms are currently up against. Coming ahead of the pack by a clear margin was the threat of falling growth in China. It came top of the list for Asian CFOs and was the third biggest risk for their European counterparts. When asked which of the year’s geopolitical or economic risks had the greatest impact on their businesses, 57% pointed at the warning signs coming from the world’s second largest economy.

The results underline how important China is for global confidence as the country shifts from its traditional role as the world’s factory floor to becoming a consumer-led economy. The Asian powerhouse, which has been the world’s biggest consumer of raw materials, is now on course to post its slowest growth in nearly a quarter of a century. It grew 7.3% year-on-year during the July-September period, its slowest pace in more than five years, jeopardizing Beijing’s 7.5% target for 2014. The slowdown comes after years of double-digit growth and at a time when the country’s new leadership is stepping up regulation and trying to curb an overheated credit market. As well as the tougher stance by Beijing, there has been a more gentle touch from the People’s Bank of China.

The central bank looks increasingly ready to backstop the economy and manage the fall in growth after announcing a surprise rate cut last month. Diana Choyleva, the head of macroeconomic research at Lombard Street Research, believes that growth and monetary conditions in China are actually much weaker than the official numbers suggest. She regularly concentrates her research on the country and said in a note last week that Beijing is battling an ongoing correction in investment and capital flight from its shores. “China’s banks are one of the victims of Beijing’s past excesses and will have to pay the price as the needed cleanup and financial market reforms unfold,” she said.

Read more …

“.. what the Fed has been worrying about is already happening in the energy sector: leveraged loans are getting mauled. And it’s just the beginning.”

Oil, Gas Bloodbath Spreads to Junk Bonds, Leveraged Loans. Defaults Next (Wolf)

The price of oil has plunged nearly 40% since June to $65.63, and junk bonds in the US energy sector are getting hammered, after a phenomenal boom that peaked this year. Energy companies sold $50 billion in junk bonds through October, 14% of all junk bonds issued! But junk-rated energy companies trying to raise new money to service old debt or to fund costly fracking or off-shore drilling operations are suddenly hitting resistance.

And the erstwhile booming leveraged loans, the ugly sisters of junk bonds, are causing the Fed to have conniptions. Even Fed Chair Yellen singled them out because they involve banks and represent risks to the financial system. Regulators are investigating them and are trying to curtail them through “macroprudential” means, such as cracking down on banks, rather than through monetary means, such as raising rates. And what the Fed has been worrying about is already happening in the energy sector: leveraged loans are getting mauled. And it’s just the beginning.

This monthly chart by S&P Capital IQ’s LeveragedLoan.com shows the leveraged loan index for the oil and gas sector. Earlier this year, when optimism about the US shale revolution was still defying gravity, these loans were trading at over 100 cents on the dollar. In July, when oil began to swoon, these loans fell below 100 cents on the dollar. The trend accelerated during the fall. And in November, these loans dropped to around 92 cents on the dollar.

How bad is it? The number of leveraged loans in the oil and gas sector trading between 80 and 90 cents on the dollar (blue line in the chart below) has soared parabolically from 0% in September to 40% now. These loans are now between 10% and 20% in the hole! And some leveraged loans are now trading below 80 cents on the dollar:

Read more …

And so is Australia’s.

Canada’s LNG Export Dream Is Dead (Oilprice.com)

Lower oil prices have killed off major plans for liquefied natural gas exports from Canada’s west coast. On December 2 the state-owned oil company of Malaysia, Petronas, decided to shelve plans to build an enormous LNG export terminal in British Columbia, citing the falling price of oil. It is common for LNG contracts to be priced using a formula linked to the price of crude oil, so declining oil prices pushes down prices for LNG. Petronas’ Pacific NorthWest LNG, as it was known, was a proposed $32 billion export terminal that would send LNG to Asia. The decision highlights how competitive global LNG trade has become, despite growing demand. Greenfield projects, such as Pacific Northwest LNG, face steep startup costs that become prohibitive when oil prices fall. Although low oil prices may have been the icing on the cake, Canadian LNG projects were facing serious obstacles before oil prices plummeted.

There is stiff competition from a slew of LNG projects already under construction in the U.S. and Australia, which will come online much earlier than anything from British Columbia. Several LNG export facilities in the U.S. are not starting from scratch, for example. The Sabine Pass terminal on the Gulf Coast and the Cove Point facility on the Chesapeake Bay were both originally constructed to import LNG rather than export. The original facilities were put on ice when the U.S. no longer needed LNG imports. Now, companies are retrofitting them to handle exports – a much cheaper process than building a new facility. The indefinite cancellation of Pacific NorthWest LNG is a major setback for Canada’s plans to export natural gas. The move comes after BG Group abandoned plans to build a separate LNG export terminal on Canada’s west coast. Chevron is also in limbo with its Kitimat LNG project after its partner Apache pulled out.

Read more …

“BIS officials are worried that tightening by the US Federal Reserve will transmit a credit shock through East Asia and the emerging world, both by raising the cost of borrowing and by pushing up the dollar.”

Dollar Surge Endangers Global Debt Edifice, Warns BIS (AEP)

Off-shore lending in US dollars has soared to $9 trillion and poses a growing risk to both emerging markets and the world’s financial stability, the Bank for International Settlements has warned. The Swiss-based global watchdog said dollar loans to Chinese banks and companies are rising at annual rate of 47%. They have jumped to $1.1 trillion from almost nothing five years ago. Cross-border dollar credit has ballooned to $456bn in Brazil, and $381bn in Mexico. External debt has reached $715bn in Russia, mostly in dollars. A chunk of China’s borrowing is disguised as intra-firm financing. This replicates practices by German industrial companies in the 1920s, which hid their real level of exposure as the 1929 debt trauma was building up. “To the extent that these flows are driven by financial operations rather than real activities, they could give rise to financial stability concerns,” said the BIS in its quarterly report. “More than a quantum of fragility underlies the current elevated mood in financial markets,” it warned.

Officials are disturbed by the “risk-on, risk-off, flip-flopping” by investors. Some of the violent moves lately go beyond stress seen in earlier crises, a sign that markets may be dangerously stretched and that many fund managers do not really believe their own Goldilocks narrative. “Mid-October’s extreme intraday price movements underscore how sensitive markets have become to even small surprises. On 15 October, the yield on 10-year US Treasury bonds fell almost 37 basis points, more than the drop on 15 September 2008 when Lehman Brothers filed for bankruptcy.” “These fluctuations were large relative to actual economic and policy surprises, as the only notable negative piece of news that day was the release of somewhat weaker than expected retail sales data for the US one hour before the event,” it said.

The BIS said 55% of collateralised debt obligations (CDOs) now being issued are based on leveraged loans, an “unprecedented level”. This raises eyebrows because CDOs were pivotal in the 2008 crash. “Activity in the leveraged loan markets even surpassed the levels recorded before the crisis: average quarterly announcements during the year to end-September 2014 were $250bn,” it said. BIS officials are worried that tightening by the US Federal Reserve will transmit a credit shock through East Asia and the emerging world, both by raising the cost of borrowing and by pushing up the dollar. “The appreciation of the dollar against the backdrop of divergent monetary policies may, if persistent, have a profound impact on the global economy. A continued depreciation of the domestic currency against the dollar could reduce the creditworthiness of many firms, potentially inducing a tightening of financial conditions,” it said.

Read more …

They do know.

Sudden Swings Expose Fragility Of Financial Markets: BIS (Reuters)

Sudden swings in financial markets recently suggest they are becoming increasingly sensitive to unexpected events, the global organization of central banks said on Sunday, warning “more than a quantum of fragility” underlies the current bullish mood. MSCI’s all-country world stock index is hovering around multi-year highs after rebounding from sell-offs in August and October. The downturns were triggered by uncertainty over the global economic outlook and monetary policy, as well as geopolitical tensions, and the Bank for International Settlements (BIS) said the sharp and sudden dips pointed to frailty in the markets. “These abrupt market movements (in October) were even more pronounced than similar developments in August, when a sudden correction in global financial markets was quickly succeeded by renewed buoyant market conditions,” the BIS said in its quarterly review.

“This suggests that more than a quantum of fragility underlies the current elevated mood in financial markets,” it said, adding that recent developments suggest markets are becoming “increasingly fragile” “Global equity markets plummeted in early August and mid-October. Mid-October’s extreme intra-day price movements underscore how sensitive markets have become to even small surprises,” it said in the report. The comments followed the organization’s warning in September that financial asset prices were at “elevated” levels and market volatility remained “exceptionally subdued” thanks to ultra-loose monetary policies being implemented by central banks around the world.

Since then, the U.S. Federal Reserve has brought its monthly bond-purchase program to an expected end. However, Japan’s central bank has spurred global markets by expanding its massive stimulus spending while China unexpectedly cut interest rates, adding to stimulus measures from the European Central Bank. The BIS said these divergent monetary policies, coupled with the recent appreciation of the dollar, could have a “profound impact” on the global economy, particularly in emerging markets where many companies have large dollar-denominated liabilities. Separately, the BIS report said that international banking activity expanded for the second quarter running between end-March and end-June. Cross-border claims of BIS reporting banks rose by $401 billion. The annual growth rate of cross-border claims rose to 1.2% in the year to end-June, the first move into positive territory since late 2011.

Read more …

“China’s share of BIS reporting banks’ foreign claims on all emerging markets stood at 28% in mid-2014, up from just 6% at the end of 2008.”

International Lending To China Soars In 2014: BIS (Reuters)

China has become the largest emerging market destination for international bank lending, accounting for more than a quarter of cross-border claims on all emerging market economies, a central banking report shows. Cross-border claims on China increased by $65 billion in the second quarter of 2014 to $1.1 trillion, and were up nearly 50% in the year to the end of June, according to a quarterly report from the Bank for International Settlements on Sunday. “China has become by far the largest (emerging market) borrower for BIS reporting banks. Outstanding cross-border claims on residents of China totaled $1.1 trillion at end-June 2014, compared with $311 billion on Brazil and slightly more than $200 billion each on India and Korea,” the report says.

It said China’s share of BIS reporting banks’ foreign claims on all emerging markets stood at 28% in mid-2014, up from just 6% at the end of 2008. The BIS, often referred to as the central bankers’ central bank, says China’s status as the principal emerging market destination for international bank lending reflects a “remarkable evolution” since the financial crisis of 2008-9. However, concerns are mounting among international investors of a credit bubble developing in China, with the country’s property market seen as the biggest risk to the economy.

In late November, after saying for months that China did not need any big economic stimulus, the People’s Bank of China surprised financial markets with its first interest rate cut in more than two years to shore up growth and help firms pay off mountains of debt. Outside China, cross-border claims on emerging market economies rose 2.7%, or $33 billion, in the three months to the end of June, the BIS said, with the increase coming mainly from Asia. However, cross-border lending to Russia declined 10%. Russia has seen its finances come under strain from western sanctions over Moscow’s role in the Ukraine crisis and the falling price of oil, its main export.

Read more …

“We argue that the dollar’s role may reflect instead the share of global output produced in countries with relatively stable dollar exchange rates – the ‘dollar zone’ ..”

Why The Dollar Is Still King: BIS (CNBC)

A question that has frustrated even the most experienced economists in the last few decades is how the dollar has remained the most prominent reserve currency in the world despite the global share of U.S. output eroding away. The Bank for International Settlements (BIS), a Basel-based institution that is known as the central bank of central banks, thinks it has found the answer. “We argue that the dollar’s role may reflect instead the share of global output produced in countries with relatively stable dollar exchange rates – the ‘dollar zone’,” it said in its new quarterly report released on Sunday. In 1978, economists Robert Heller and Malcolm Knight were credited as first to draw attention to the fact that countries held an average of 66% of their foreign-exchange reserves in dollars. Even today that number hasn’t budged much with the latest statistics from the International Monetary Fund showing that just over 60% of allocated funds are held in the greenback.

The higher the correlation in price between a given currency and the dollar, the higher the economy’s dollar share of that country’s official reserves, according to Robert McCauley and Tracy Chan, the two authors of the BIS report. The report adds that the dollar’s robustness comes despite an 18% decline against major currencies since 1978 and the U.S. economy’s share of global GDP (gross domestic product) shrinking 6% in those 36 years. “The ‘dollar zone’ still accounts for more than half of the global economy. In countries whose currencies are more stable against the dollar than against the euro, reserve composition that favors the dollar produces more stable returns in terms of the domestic currency,” they said.

Read more …

It’s a shame this guy feels he needs to resort to Putin bashing.

Why The World Is Like A Real-Life Game Of Global Domination (Guardian)

Putin gives a speech and the rouble falls. Europe’s central bank boss gives a speech and the stock markets fall. Opec meets in Vienna and the oil price plummets. Japan’s prime minister calls a snap election and the yen’s slide against the dollar accelerates. All these things in the last six weeks of an already fractious year. There are suddenly multiple conflicts being played out in the global markets, conflicts the global game’s usual rules are not built to handle. The first concerns a clear game of beggar thy neighbour between China and Japan. Since 2012 Japan has printed money hand over fist, with the aim of kickstarting economic growth. With growth stalling for a third time in the final quarter of 2014 its premier Shinzo Abe printed more. China perceives this as unfair competition, and with its own growth slowing, it responded in late November with a surprise interest-rate cut.

Many see this as the outbreak of a classic currency war, along 1930s lines, where rival economic giants engage in a pointless game of devaluing their own currency – boosting exports but hitting the spending power of their people – to their mutual detriment. By hitting each other’s capacity to export, they edge the region towards deglobalisation. The second new dynamic is the game of chicken being played over the oil price between America, Russia and Opec. Oil demand is falling because growth in the emerging markets – China, Brasil and the like – is slowing down. Yet supply has risen – by 11m barrels to 92m barrels per day since the global financial crisis began. America has become the world’s biggest oil producer thanks to the rapid rollout of shale and deep sea oilfields.

Since June 2014 the price of a barrel of Brent crude has fallen from $115 to $68 – and after Opec met in late November and rejected calls to cut production some analysts predicted the price could collapse to $40. Saudi Arabia and the other gulf monarchies were the key players in the decision to keep production high and prices falling – and few doubt there is politics behind the move. It hurts Russia, Venezuela and Iran. For Saudi Arabia there are scores to settle with both Russia and Iran over their role in crushing the Syrian revolution, and with Venezuela for being Russia’s perpetual Bolivarian cheerleader.

As a result, Vladimir Putin has had to admit to his people that a combination of western sanctions and Saudi oil strategy will push Russia into recession next year. At times like this economists resort to game theory, warning sparring countries that, in a game where everybody is trying to shrink something – whether it be prices or currencies – everybody loses out. So let’s game it out – not in the austere language of theory but of the empire-building “god games” popular on games consoles.

Read more …

The whole shebang is still under lockdown after all this time.

Citigroup Panicked Over Fraud at Chinese Ports (Bloomberg)

Citigroup was in a “state of panic” when alleged fraud was uncovered in two Chinese ports, Mercuria Energy’s lawyer said as a London trial over disputed metal finance deals got under way. “The discovery of the fraud was a massive problem for Citi as it was their metal and it was at their risk,” Mercuria lawyer Graham Dunning told a London judge. “There was a state of panic.” The disputed copper and aluminum is under lockdown in the ports of Qingdao and Penglai, where Chinese authorities are investigating an alleged fraud. Neither side can get access and they don’t know how much of the metal is there, Dunning said at a pre-trial hearing in August. Citigroup argues that it effectively delivered the metal to Mercuria under the terms of a sale-and-repurchase agreement by handing over warehouse receipts. The bank says it is owed about $270 million. Mercuria, a Cyprus-based firm with major trading operations in Geneva, argues the products were never properly delivered.

“It appears that substantial quantities may be missing from the warehouses or may be the subject of multiple pledges,” Dunning said today. The probe at Qingdao, China’s third-largest port, is examining companies owned by a Chinese-Singaporean metals trader, Chen Jihong, who is alleged to have pledged the same metal inventories multiple times for collateral on loans. Chinese authorities have uncovered almost $10 billion in fraudulent trade, including irregularities at Qingdao, according to the country’s currency regulator. Standard Chartered, Standard Bank and ABN Amro have also made loans affected by the alleged fraud. “Mercuria’s apparent goal is for it to be Citi, not Mercuria, which is left out of pocket,” Citigroup said in documents from the trial. Mercuria was responsible for safeguarding and insuring the metal, the bank said.

Read more …

What do they do all day?

The Long Slow Inexorable Demise Of America’s Working-White-Male (Zero Hedge)

Not “off the lows”…

Read more …

Germany holds the levers here.

ECB’s Loans Offer Clues In QE Guessing Game (Reuters)

The guessing game over the timing of euro zone money printing will intensify as the European Central Bank unveils a closely watched gauge of policy in the coming week, the highlight of a calendar dominated by Europe’s malaise. On the other side of the Atlantic, investors will continue placing their bets on a different but equally crucial event: when the U.S. Federal Reserve might raise interest rates. U.S. data and several Fed central bankers will give a sense of the speed of the recovery and when a rate rise might be merited, while oil prices and Chinese data will provide plenty more for markets to digest. “The key story is going to be in the euro zone,” said James Knightley, ING’s senior economist, referring to the results of the ECB’s targeted long-term refinancing operations (TLTROs) on Thursday. The cheap loans for banks are one of the ECB’s main ways to flush money into the stagnating euro zone economy. “If the take-up is poor, that could increase market talk that the ECB is going to step in and use other tools,” Knightley said.

That means a sovereign bond-buying program like those used in the United States, Britain and Japan, but which Germany fears would encourage reckless state borrowing and fuel inflation. Such a program may come early next year. “The take-up of TLTROs could swing the ECB’s Governing Council between January and March, depending on how the number looks,” said Citigroup economist Guillaume Menuet. The first TLTRO was taken up only to the tune of €83 billion. Hopes are higher for this time but forecasts hover around the €150 billion mark, leaving the ECB short of the €400 billion it was prepared to offer banks in total. On Monday in Brussels, ECB President Mario Draghi will tell euro zone finance ministers no amount of stimulus can replace reforms to tax, labor and pension systems to bring down near-record unemployment.

Read more …

Rate rises will be murder.

Bank of England: Half A Million Housebuyers Face Mortgage Arrears (Guardian)

The Bank of England has warned half a million families would be at risk of falling into mortgage arrears once it started to raise interest rates from their emergency level of 0.5%. Threadneedle Street said the number of households running into difficulties would increase by a third to 480,000 in the event of a two-percentage-point increase in the cost of borrowing. The Bank stressed the proportion of borrowers having trouble paying their home loans should remain well below the levels of the early 1990s – when Britain suffered its worst postwar property crash – provided incomes rose alongside interest rates. “Higher interest rates will increase financial pressure on households with high levels of debt,” the Bank said in its Quarterly Bulletin. “The%age of households with high debt-servicing ratios, who would be most at risk of financial distress, is not expected to exceed previous peaks given the likely paths of interest rates and income.

“But developments in incomes for the households who are potentially most vulnerable will be an important determinant of the extent to which financial distress does increase.” The findings were based on a survey for the Bank conducted by NMG consulting. It found that the average outstanding mortgage debt was £83,000 per household, with average household income of £33,000 a year (£43,000 for those with a mortgage) and unsecured debt £8,000. Interest rates have been pegged at 0.5% – the lowest in the Bank’s 320-year history – since March 2009 and cheap borrowing costs have made it easier for households with large home loans to keep up payments on their mortgages. The Bank has used its forward guidance policy to stress that interest rate rises, when they come, will be gradual and limited in size. Financial markets do not anticipate the first rise to come before the second half of 2015 but the Bank is exploring the impact of tighter policy on households where more than 40% of income is spent on mortgage repayments, since these housebuyers are most likely to fall into arrears.“

Read more …

Oh, great! 950% of GDP. What could go wrong?

Bank of England: UK Banking To Double In Size, Reach 950% of GDP (Guardian)

Britain’s exposure to its banks, already the largest in the G20 group of leading nations, is set to double in the next 35 years. “The size of the UK banking system might roughly double from its current size to over 950% of GDP by 2050, far outstripping the projected increase in other G20 banking systems,” the Bank of England said. The UK’s banking system is currently 450% of GDP, Threadneedle Street said. In money terms, it would amount to a rise from over £5tn to £60tn. “Some have suggested that the current size of the UK banking system represents a material risk to economic stability and that action should be taken to reduce its size,” the central bank said in its latest quarterly bulletin. However, in an article asking “Why is the banking system so big and is that a problem?” the Bank of England said it had not found evidence of a link between the size of the economy and the risk of a crisis.

It said more work was needed and that it had not looked at the interconnectedness of the banking system and its opacity as it increases in size. “The empirical analysis in this article does not find a strong link between banking system size and the probability or output cost of a crisis, at least once the resilience of the system is taken into account,” the bank said in the article. “Establishing empirically whether banking system size is a leading indicator of banking crises is not straightforward,” it said. The banking system has undergone a dramatic shift in past 40 years, with assets rising from about 100% of GDP in 1975, the Bank of England said. It said the UK’s banking system was the largest out of Japan, the US and the 10 biggest EU economies. Nearly a fifth of global banking activity is booked in the UK, where there are 150 deposit-taking foreign branches of banks and almost 100 foreign subsidiaries from more than 50 countries.

Read more …

“Since peaking at $4.07 trillion last August, the Fed’s monetary base has been reduced by $259.2 billion as of the latest reserve reporting date on November 26, 2014.”

Keep An Eye On The Fed’s Accelerating Asset Sales (CNBC)

The U.S. monetary authorities (Fed) are stepping up the contraction of their balance sheet at a surprisingly fast pace. Since peaking at $4.07 trillion last August, the Fed’s monetary base has been reduced by $259.2 billion as of the latest reserve reporting date on November 26, 2014. More than half of these Fed asset sales occurred between the end of October and the end of November. But the balance sheet remains an impressive $3.8 trillion – a huge difference with the pre-crisis monetary base of $820-$830 billion. It is interesting to note that even at these comparatively modest amounts of high-powered money, the pre-crisis U.S. monetary policy was very expansionary: the federal funds rate was fluctuating around 3% while the inflation rate was accelerating above 4%.

Obviously, these are different times now: the U.S. financial system and the economy have changed in a rapidly evolving global context. Still, the comparison is useful because it shows how much the Fed’s balance sheet will have to adjust in the months ahead. One key aspect of that adjustment process is the Fed’s statement that interest rates will remain low well after the beginning of large liquidity withdrawals to “normalize” the policy stance. The question is: how is that possible? If the quantity of money is being reduced in as large amounts as is currently the case, would it not be normal to expect that its price (i.e., interest rate) would also have to rise? Certainly it would.

But what makes the Fed’s statement credible is the fact that huge excess reserves (money banks can use to make loans) of the U.S. banking system – $2.4 trillion at the last count – will continue to keep an extraordinarily liquid interbank market for some time. Last Friday, for example, the effective federal funds rate (overnight money banks lend to each other) closed trading at 0.11% – more than half way below the Fed’s target of 0.25%. These excess reserves are now being drained by the Fed’s bond sales; they have been cut by $286.1 billion from their peak of last August. There is still plenty of cutting to do, though. Just think that during the pre-crisis period from January 2007 to June 2008 banks’ average excess reserves were fluctuating around monthly levels of $1.9 billion (sic). That is a far cry from the $2.4 trillion we have now.

Read more …

Not exactly a new point, but ..

Bill Gross: You Can’t Cure Debt With More Debt (CNBC)

Central banks are trying to solve a debt crisis by piling on more debt, creating a “point of low return” for investors, bond guru Bill Gross said in a letter to clients. The Janus Capital portfolio manager and Pimco founder takes the Federal Reserve, Bank of Japan and European Central Bank to task for using monetary policy to make it easier for governments to run up debt, all in the hopes of stimulating anemic global growth. “How could they?” Gross asks, using nursery rhymes including the characters Punch and Judy to bemoan the possibility of “inflationary horror” that characterized the 1970s. It’s probably better to read the Gross letter in its entirety – get it here – to see how he connects the dots, but his conclusion is stark:

Ah, policymakers. Perhaps the last five years have been one giant nursery rhyme. But each of these central bankers is trying to achieve the same basic objective: Solve a debt crisis by creating more debt. Can it be done? A few years ago, I wrote that this uncommonsensical feat could be accomplished, but with a number of caveats: 1) Initial conditions must not be onerous; 2) Both monetary and fiscal policies must be coordinated and lead to acceptable structural growth rates; and 3) Private investors must continue to participate in the capital market charade that such policies produced.

Several pitfalls have occurred within each caveat, not the least of which is stagnant growth and companies using the easy money of the past six years not to propel the economy but to jack up their own stock prices and reward themselves and shareholders. At the same time, the much-awaited handoff from monetary to fiscal policy has not happened, in large part because the Fed and others have been willing to provide trillions in accommodation:

In the U.S., as elsewhere, there has been little focus on public investment and infrastructure spending. It’s been all monetary policy, all of the time, with most of the positives flowing over to markets as opposed to the real economy. The debt currently being created is not promoting real growth and solving a debt crisis – it is being used by corporations to repurchase shares and accentuate the growing inequality between the very rich and the middle class.

Read more …

” .. as Dr. Paul so clearly points out, the sole purpose of H. Res. 758 is simply a pouring of the legal foundation for something much more substantive. You see, this is how wars begin.”

The Most Essential Lesson of History That No One Wants To Admit (Beversdorf)

Ron Paul wrote an eye opening article recently about some legislation that was just signed in Congress, namely H. Res. 758. In the article Dr. Paul explains the purpose of the resolution. It’s not a new law but provides a basis of facts that will be relied on for future action. So essentially the resolution purports that Russia behaved badly in various ways and by way of signing H. Res. 758 each congressman was indicating their agreement that the propositions contained therein are factual. Now just because a group of obnoxiously arrogant A-holes stand around in a tax-revenue financed chamber and say “yeah” to several assertions does not make those assertions factual, but here in the United Orwellian States of America it kinda does. Because those assertions that were voted to be fact (similar to the First Council of Nicaea) will now be written as factual history and taught to our children as having happened that way. The very same way we all attained our ideas of American superiority.

The dishonesty and ignorance it creates is reason enough not to do such things, however, the real stinker of it is, as Dr. Paul so clearly points out, the sole purpose of H. Res. 758 is simply a pouring of the legal foundation for something much more substantive. You see this is how wars begin. And the wheels for this particular war have been in motion for many years now. We’ve been told our actions heretofore are simply a necessary response to the Ukraine situation. However, those who can objectively look at the Ukraine situation will realize the US sponsored coup in Ukraine was simply a spark to light the fuse of a much larger detonation.

Now I understand many at this point are thinking “yep another conspiracy theory, why can’t it ever just be the US government thinks what they are doing is best for Americans”? And it can, it just never is anymore and perhaps ever was. Lies are told and public opinion is manipulated. For war must be every bit good theatre in the press, as good strategy on the ground. It is the theatre that makes war so ugly. Fighting a war for what one believes in is unfortunate and brutal but fighting for lies and deceit to an end that benefits only those telling the lies is a type of ugliness most of us cannot comprehend. It is only in the world ruled by sociopaths where such things can happen.

Read more …

“No worries, Father Allen, Brother Ben and Sister Janet figured out how to turn the universe’s economic waters into wine.”

Uncork the Central Bank Bubbly (StealthFlation)

What a glorious global economic gala! Apparently, contracting world GDP growth, monumental sovereign debt loads, ballooning central bank balance sheets, crashing commodity prices, competitive currency devaluations and synthetically suppressed interest rates, as far as the eye can see, are all great tidings to be joyously celebrated throughout this holiday season. Well, at least that’s the takeaway from the whooping wonderful world of capital markets. Have no fear, all is perfectly in order. Jamie Dimon, Jim Cramer, Larry Fink and Company have our back. The rest of us mere mortals are simply supposed to stand aside and take their professional word for it, silently sipping the financial establishment’s spiked eggnog until we attain a sheepish state of stupid stupor. After all, the money experts at the Fed are on the case, what could possibly go wrong?

Joy to the world! es, it’s true, your Nation too can enjoy the very same blissful state of economic euphoria, all you need is the will to turn your monetary policy completely on its head, a la festive freeloading Fed. No need to maintain the integrity of your means of exchange, that’s so old school. That’s right, you too are absolutely invited to enter the ZIRP zero bound party zone, just buy out all your own newly issued treasury obligations and be sure to lap up any illiquid debt that may be languishing. Set it and forget it, that’s it, nothing to it. In the end, it will all take care of itself according to the all knowing fabulous Fed heads and the crazed Keynesian collegiate kooks that orchestrated and obliged this opulent banker blowout. No worries, Father Allen, Brother Ben and Sister Janet figured out how to turn the universe’s economic waters into wine.

Oh, there is one important caveat which needs to be pointed out, along with the monetary ecstasy ease regime, your Nation is also required to unequivocally serve the United States’ geopolitical ambitions and global economic interests, otherwise, no monetary marmalade for you! Just ask Vlad on that score. His toast is badly burnt, his olive oil spread is spoiled, and his Ruble is now rubble. No money honey for comrade Putin until he bows down to the high and mighty masters of the badass bully banking USD monetary system hegemony.

Read more …

Wealth inequality is a symptom. Power inequality is the disease.

Taming Corporate Power: The Key Political Issue Of Our Age (Monbiot)

Does this sometimes feel like a country under enemy occupation? Do you wonder why the demands of so much of the electorate seldom translate into policy? Why parties of the left seem incapable of offering effective opposition to market fundamentalism, let alone proposing coherent alternatives? Do you wonder why those who want a kind and decent and just world, in which both human beings and other living creatures are protected, so often appear to be opposed by the entire political establishment? If so, you have encountered corporate power – the corrupting influence that prevents parties from connecting with the public, distorts spending and tax decisions, and limits the scope of democracy.

It helps explain the otherwise inexplicable: the creeping privatisation of health and education, hated by the vast majority of voters; the private finance initiative, which has left public services with unpayable debts; the replacement of the civil service with companies distinguished only by incompetence; the failure to re-regulate the banks and collect tax; the war on the natural world; the scrapping of the safeguards that protect us from exploitation; above all, the severe limitation of political choice in a nation crying out for alternatives. There are many ways in which it operates, but perhaps the most obvious is through our unreformed political funding system, which permits big business and multimillionaires in effect to buy political parties. Once a party is obliged to them, it needs little reminder of where its interests lie. Fear and favour rule.

And if they fail? Well, there are other means. Before the last election, a radical firebrand said this about the lobbying industry: “It is the next big scandal waiting to happen … an issue that exposes the far-too-cosy relationship between politics, government, business and money … secret corporate lobbying, like the expenses scandal, goes to the heart of why people are so fed up with politics.” That, of course, was David Cameron, and he’s since ensured that the scandal continues. His Lobbying Act restricts the activities of charities and trade unions but imposes no meaningful restraint on corporations.

Read more …