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Debt Rattle October 23 2024

Oct 232024
 
 October 23, 2024  Posted by at 8:34 am Finance Tagged with: , , , , , , , , , ,  87 Responses »


René Magritte After the water, the clouds 1926

 

• Biden Wants Trump ‘Locked Up’ (RT)
• “This Is War”: Musk Responds To Bombshell “Kill Twitter” Plot (ZH)
• Musk’s Trump Support Follows Wave Of Government Probes Into His Companies (JTN)
• Polymarket Is Singlehandedly Moving The Entire US Bond Market (ZH)
• Biden Admin Under Fire Over Virginia Non-Citizen Voter Removals (Turley)
• Two Weeks Before the Meltdown Begins (Miele)
• Questions Are All “Pre Determined” At Kamala’s FAKE Town Hall (MN)
• Trump-Rogan Interview Set For Friday: Politico (ZH)
• Texas AG Demands FEC Action Over ‘Suspicious Donations’ To Democrats (ZH)
• Ukrainian Troops Increasingly Refusing Orders – El Pais (RT)
• Dumping US Dollar ‘Keeps Politics Out Of Economic Development’ – Putin (RT)
• Dollar’s Diktat Will Prove Its Downfall Once Emerging Powers Unite (Sp.)
• EU Bracing For Trade War With Trump – Politico (RT)
• Sharp Rise In Russia’s Share Of EU LNG Market (RT)
• Harris Denies Israel Is Committing Genocide in Gaza – Campaign (Antiwar)
• Biblical Cruelty Took Power In Israel: “Mein Kampf In Reverse” (José Goulão)

 

 

 

 


Elon Musk: “It must reach 69%, as foretold in the prophecy”

 

 

 

 

Vivek

High speed

Election day
https://twitter.com/i/status/1848572247650537955

Count

Lara

Convicted felon

RFK

Dana White

IRS

Tulsi

 

 

 

 

 

 

Scripted clickbait. “I know this sounds bizarre. If I had said this five years ago, you’d lock me up, but we’ve got to lock him up..”

• Biden Wants Trump ‘Locked Up’ (RT)

US President Joe Biden has claimed that Republican contender Donald Trump wants presidential immunity and powers to kill his opposition, and therefore should be locked up, as he spoke to a Democratic crowd with the election just half a month away. Biden, who stepped aside earlier this year to allow Vice President Kamala Harris to become the Democratic nominee, made the statement at a campaign office in New Hampshire on Tuesday. “He thinks he has a version of the Supreme Court ruling on immunity that allows him, if necessary, to physically eliminate someone he believes is a threat to him,” he said, referring to former President Trump. “I know this sounds bizarre. If I had said this five years ago, you’d lock me up, but we’ve got to lock him up,” Biden stated, drawing applause from the audience.

https://twitter.com/i/status/1848854784054571349

“Politically lock him up,” he clarified amid the crowd noise, seemingly backtracking on his statement. “Lock him out. That’s what we have to do.” Biden has faced scrutiny in the media over numerous gaffes, often misspeaking at similar events. He stepped aside as his party’s contender earlier this year amid concerns about his mental state following a disastrous televised debate against Trump. Last week, Biden suggested that Trump is running for president again “to stay out of jail,” referencing the Republican’s legal troubles.

Earlier this year, a Manhattan jury found Trump guilty on 34 charges related to falsifying business documents to cover up hush money paid to porn star Stormy Daniels. Trump also faces charges related to the January 6, 2021, Capitol riots. He denies any wrongdoing and insists that all of his legal troubles are a political witch hunt by his opponents. After Biden endorsed Harris as his party’s nominee, the Democrats initially enjoyed a honeymoon period with voters, rising in the polls. However, recent averages from the RCP polling data aggregator indicate that Trump is leading in all swing states.

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“..British advisors from Labour Together rescuing the distressed political damsel that is the Harris/Walz campaign..”

• “This Is War”: Musk Responds To Bombshell “Kill Twitter” Plot (ZH)

Elon Musk has responded to a bombshell report by journalists Paul Thacker and Matt Taibbi which reveals that a the UK’s Center for Countering Digital Hate – which is advising the Kamala Harris campaign, aims to “kill Musk’s Twitter”. [..] The British are coming, to meddle in our elections! In an explosive leak with ramifications for the upcoming U.S. presidential election, internal documents from the Center for Countering Digital Hate—whose founder is British political operative Morgan McSweeney, now advising the Kamala Harris campaign—show the group plans in writing to “kill Musk’s Twitter” while strengthening ties with the Biden/Harris administration and Democrats like Senator Amy Klobuchar, who has introduced multiple bills to regulate online “misinformation.”

[..] The documents obtained by The DisInformation Chronicle and Racket show CCDH’s hyperfocus on Musk — “Kill Musk’s Twitter” is the first item in the template of its monthly agenda notes dating back to the early months of this year. KILL, KILL, KILL: No matter what else the CCDH talks about, “Kill Musk’s Twitter” is its first item of business. The Center for Countering Digital Hate is the anti-disinformation activist ally of Prime Minister Keir Starmer’s Labour Party, and a messaging vehicle for Labour’s neoliberal think tank, Labour Together. Both the CCDH and Labour Together were founded by Morgan McSweeney, a Svengali credited with piloting Starmer’s rise to Downing Street, much as Karl Rove is credited with guiding George W. Bush to the White House.

The CCDH documents carry particular importance because McSweeney’s Labour Together political operatives have been teaching election strategy to Kamala Harris and Tim Walz, leading Politico to call Labour and the Democrats “sister parties.” CCDH’s focus on “Kill Musk’s Twitter” also adds to legal questions about the nonprofit’s tax-exempt status as a 501(c)(3) organization. According to the IRS, CCDH could lose its special tax status if “a substantial part of its activities is attempting to influence legislation.” Yet, CCDH’s third item on its annual priority list is “Trigger EU and UK regulatory action” and the group previously employed the firm Lot Sixteen to lobby congressional offices on “misinformation” in Washington. Both The DisInformation Chronicle and Racket have sent multiple, extensive questions to CCDH’s current CEO Imran Ahmed, another British political operative tied to McSweeney’s Labour Together. [..]

In the last two months, the Washington Post and Politico, among others, have run a series of features about British advisors from Labour Together rescuing the distressed political damsel that is the Harris/Walz campaign. Politico casts McSweeney as the “election mastermind” who first helped Keir Starmer defeat leftist Jeremy Corbyn to become the head of Labour, all the way to Starmer’s “landslide” win over Conservatives to become Prime Minister this past July, implying that McSweeney and his team can perform a similar miracle for Harris.

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“Take the red pill..”

• Musk’s Trump Support Follows Wave Of Government Probes Into His Companies (JTN)

As Elon Musk ramps up his $1 million-a-day support for Donald Trump, what appears to be a record of progressive harassment of his many companies may explain how the world’s richest man went all-in for Republicans. Musk’s transformation from a politically unengaged tech billionaire to mega-donor and avid campaigner has earned him the ire of Democrats who have derided “disinformation” on his X platform and suggest he is violating the law in his support for Trump. Undeterred, Musk, touting his most recent effort over the weekend, announced that his Trump-supporting Save America PAC would give away $1 million a day to people who sign an online petition pledging support for the First and Second Amendments. To date, the multibillionaire has reportedly dumped $75 million of his own cash into the political action committee to support Trump’s third bid for the presidency.

He has also joined the candidate on the campaign trail and is holding events in swing state Pennsylvania, becoming a de facto surrogate for the former president. “Take the red pill,” Elon Musk posted to X, alluding to the famous choice in the cult-classic movie “The Matrix” which has now come to represent a choice between the Red (Republican) and Blue (Democratic) political parties. Musk’s evolution into a fervent Trump supporter comes after years increasingly aggressive probes into his four companies by various agencies of the Biden administration for seemingly frivolous and potentially serious concerns alike. It is likely no accident that Musk now wants to see the government reduced in size and scope after burdensome lawsuits and regulatory actions against his companies, previously saying publicly that bureaucracy is “smothering” large projects in the United States.

Most recently, a California body responsible for managing the coastlines blocked a proposal for the Defense Department on behalf of SpaceX for increasing launches from Vandenberg Space Force Base in the state. Musk’s SpaceX has raked in billions from contracts primarily with DOD and NASA. The California Coastal Commission drew scrutiny after its members voiced criticisms of Musk’s political leanings during a meeting about whether to approve more frequent launches by the company in addition to other concerns, like the environment. “We’re dealing with a company, the head of which has aggressively injected himself into the presidential race and he’s managed a company in a way … that I find to be very disturbing,” said agency chair Caryl Hart. “The Coastal Commission has one job — take care of the California coast,” Musk shot back on X Tuesday before SpaceX filed a lawsuit against the commission.

“It is illegal for them to make decisions based on what they (mostly wrongly) think are my politics.” “Rarely has a government agency made so clear that it was exceeding its authorized mandate to punish a company for the political views and statements of its largest shareholder and CEO,” SpaceX alleged in the 45-page lawsuit. This is not the first time Musk’s SpaceX has been the target of government action. Last August, the Department of Justice announced a high profile lawsuit against the space exploration company for allegedly discriminating against asylum claimants and refugees in its hiring process. The suit alleged Musk’s company “routinely discouraged asylees and refugees from applying and refused to hire or consider them, because of their citizenship status,” according to the DOJ press release.

“SpaceX was told repeatedly that hiring anyone who was not a permanent resident of the United States would violate international arms trafficking law, which would be a criminal offense,” Musk said in post to X, which he acquired in a $44 billion deal in 2022. “We couldn’t even hire Canadian citizens, despite Canada being part of NORAD! This is yet another case of weaponization of the DOJ for political purposes.” Several months later, a federal judge in Texas blocked the administrative case against the company from proceeding while it challenged the specific internal adjudication process. In a preliminary ruling earlier this year, a Texas judge ruled that the internal DOJ administrative panel process was unconstitutional, though the decision is not binding on the federal government.

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“..both Treasuries and the Mexican peso appear to be pricing in a rising probability of Donald Trump winning..”

• Polymarket Is Singlehandedly Moving The Entire US Bond Market (ZH)

Online betting exchange Polymarket has not only taken the attention space by storm, rapidly becoming one of the most downloaded Apple apps… it is also quickly becoming a key driver behind the world’s largest and most liquid bond market. According to Bloomberg’s Masaki Kondo writes, Polymarket has become instrumental in setting at least the near-term price signals not only for the $28 trillion marketable US Treasury markets, but also for FX markets: that’s because both Treasuries and the Mexican peso appear to be pricing in a rising probability of Donald Trump winning the US presidential election, as indicated by Polymarket, while ignoring traditional polls which for the most part still show Kamala in the lead.

As this Bloomberg chart shows, the benchmark 10Y yield has been closely tracking the spread in the perceived odds of a vote victory between Trump and Kamala Harris. This difference has reached almost 30% points, according to data from Polymarket, with Trump seen leading the race, and where competitors such as Kalshi and PredictIt now show the same odds with a notable delay behind Polymarket which has emerged as the undisputed leader in the online betting space. Even such Bloomberg luminaries as John Authers admit Polymarket’s role in setting bond prices: “In the last few months, it’s striking that the 10-year yield has traced the Trump odds according to Polymarket — an offshore market that may be over-influenced by a few large bettors, but which seems to be driving opinion on Wall Street.”

Of course, Polymarket is just the starting signal: the actual driver behind the blowout move in yields, which as we noted earlier have surged by a whopping 50bps since the Fed’s very unironic 50bps rate cut one month ago…is because memory is still be fresh among bond traders that the 10-year yield soared almost 80bps in about a month after Trump’s last victory in November 2016. Granted, one can argue this time may be different, as the jump in yields back then was in part driven by the start of the Federal Reserve’s tightening cycle while the direction of Fed policy is the opposite now, but the kneejerk reaction to a market that is now is now aggressively pricing in a Trump presidency is there.

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“Motor Voter Law..”

• Biden Admin Under Fire Over Virginia Non-Citizen Voter Removals (Turley)

Call it the Mark of Kaine. The heated dispute between the Biden Administration and the State of Virginia just took a curious turn after Virginia lawyers released support for the effort to remove alleged noncitizens from the voting rolls ahead of the presidential election. The main witness against the Biden Administration may prove to be Sen. Tim Kaine (D., Va.) who is on the ballot this election. The Biden Administration sued to stop the removal of 6,303 alleged noncitizens from Virginia’s voter rolls before the election, which is expected to be close in the state. It relies on the National Voter Registration Act (NVRA), or the “Motor Voter Law,” which bars “systemic” removals for voters from the rolls less than 90 days before an election. Youngkin ordered compliance with existing laws, citing Virginia code 24.2-439, requiring the removal of noncitizens whose names were added under false pretenses. It also cited Virginia Code 24.2-1019, requiring registrars to immediately notify their county or city prosecutor of such situations.

The NVRA has exceptions for removals within what the Justice Department calls the “quiet” period before an election, including the removal of individuals who are “ineligible to vote because of a criminal conviction or mental incapacity, or for “correction of registration records pursuant to this chapter.” However, the state argues as a threshold matter that these are not systemic removals. The state argues that these are individual actions triggered automatically by citizens identifying themselves as noncitizens but then joining the voting rolls. It is a crime for a noncitizen to vote in the election. The state notes that the voter is notified of the problem and allowed to correct any errors to remain on the rolls. If they do not correct the problem, they are removed from the rolls. However, they can still vote on election day with a “provisional” ballot to challenge any removal.

Virginia is not targeting any group and does not know how these voters might vote. It is responding to a notice coming from the Department of Motor Vehicle of a possible ineligibility and potential criminal act if they person actually votes, which is admittedly rare for noncitizens. While the Justice Department insists that some of these individuals are actually citizens, the system allows for those citizens to remain on the rolls by simply correcting the DMV record. I understand concerns over changes close to the election, but there seemed to be a host of options for the Justice Department short of this lawsuit, including working with the state to be sure that this relatively small number of voters are given ample opportunity to correct their records. This weekend, Virginia added a new wrinkle in the litigation. The Virginia law has been on the books since 2006.

The bipartisan legislation was signed into law by then Virginia Gov. Tim Kaine. It has been used without any objection for all those years. However, it now appears that Kaine’s administration specifically asked the Justice Department to determine if the law was compliant with federal laws, including an express inquiry about the NVRA. On December 16, 2006, the Justice Department completed its review and found no objections to the Virginia law though it added that it reserves the right to object in the future to any such laws. Gov. Glenn Youngkin further told Fox News that past governors continued to use the law within the 90 days period without a peep of objection from the Justice Department. These facts distinguish the Virginia case from the Alabama case where a court enjoined removal of names of suspected non-citizens.

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“..a red, white and blue cap inscribed with “TUSA,” short for “Told U So America!”

• Two Weeks Before the Meltdown Begins (Miele)

I wouldn’t be much of a political pundit if I weren’t willing to share my prediction for what will happen in 15 days when one of the most important presidential elections in history is decided. So here goes: Donald Trump will win, and he will win convincingly. But that doesn’t mean the progressive left won’t have a meltdown. Just as in 2016, when Trump was first elected president, the media will be dismayed, the Democrats will be shocked, and there will be protests in the streets, possibly violent. Congressional Democrats such as Jamie Raskin will try to prevent Trump from being sworn in by declaring him an insurrectionist. Seven so-called battleground states are supposed to decide the election: Pennsylvania, Michigan, Wisconsin, North Carolina, Georgia, Nevada, and Arizona. But even more important will be the experience of the American people, who in large measure have come to regret the election that put Joe Biden in the White House four years ago.

That is the underlying story that the media will never acknowledge. Polling within the last year shows that less than one-third of Republicans believe Biden is the legitimate president, and 36% of all Americans have doubts about the 2020 election. That is only a feeling, not a fact, but feelings decide presidential elections, and the almost gleeful anti-American thrust of Biden’s presidency has given more than 60% of potential voters a feeling that we are on the wrong track as a nation. Five days before the 2020 election, I published a spoof that proved modestly prophetic as a warning about the pitfalls of a Democratic victory. Called “The Short Happy Presidency of Joe Biden,” it predicted that Kamala Harris would invoke the 25th Amendment immediately after Biden’s inauguration in order to seize power in a bureaucratic coup. It didn’t quite happen that way, of course, but 3 1/2 disastrous years later, Kamala along with Chuck Schumer and Nancy Pelosi seemingly used the specter of the 25th Amendment to force Biden to end his reelection bid. Life imitating art.

In my pastiche, President Trump had appeared close to sealing his victory in the 2020 election, thanks to late mail-in votes in Pennsylvania. But “in an emergency session, the Pennsylvania Supreme Court convenes and reverses its earlier ruling that late votes could be counted for up to three days. The new ruling asserts that late voting amounts to election interference ‘on account of Trump winning,’ thus handing the state and the Electoral College victory to Biden.” Exaggerated, yes, but prescient in regard to how courts across the country would eventually rule in Biden’s favor on almost every issue, refusing to look at the evidence of fraud or unconstitutional irregularities. Perhaps the most prophetic aspect of my column four years ago was how I depicted the reaction of Trump to losing a disputed election. Just two days after the inauguration of first Biden and then Harris:

“Former President Donald Trump announces that he is running for re-election in 2024 after taking a four-year rest to catch up on his golf and make a few billion dollars. Trump says his new role model will be Grover Cleveland, the only president to serve non-consecutive terms. “If it’s good enough for Grover, it’s good enough for me!” Trump also tries out a new campaign slogan, as he takes a swing at Biden voters with a red, white and blue cap inscribed with “TUSA,” short for “Told U So America!” When you think about it, that really is the underlying message that Trump has been sharing for the past four years. And Americans got the message – because it matched their lived experience. They saw with their own eyes that the wide-open Biden border was being called secure by Biden, Harris, and Homeland Security Secretary Alejandro Mayorkas. They saw that Biden’s Supreme Court nominee couldn’t say for sure what makes a woman a woman, and then they watched as boys began to dominate girls’ sports. They watched prices on the rise and safety in decline.

Worst of all, they stood helpless as the world seemed to be rushing headlong toward World War III, first in Ukraine, then the Middle East, all the while as China has been threatening to cripple the world economy by attacking Taiwan. So, yes, Trump will be elected as the 47th president of the United States, and the liberal talking heads will melt down just as they did in 2016. But what matters most is what happens after the election, and whether the experience of Americans will reflect renewed prosperity, a safer world, and respect for tradition and common sense. Many will try to prevent that, but making America great again should be a unifying goal. “Ask not what your country can do for you – ask what you can do for your country.” And if I am wrong and Kamala Harris becomes the 47th president, I pray that divine providence takes hold of her and guides her to protect, defend, and strengthen these United States and their Constitution. Seems like a long shot, but without Trump, prayer is all we got.

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“..hopefully I will be able to ask some questions that will be in your head..”

• Questions Are All “Pre Determined” At Kamala’s FAKE Town Hall (MN)

Kamala Harris held a “town hall” meeting Monday, giving those in attendance a chance to ask questions and testing her mettle when it comes to being put on the spot. Not really. It was all fake and scripted. The reality of the situation was unintentionally exposed by Maria Shriver, the moderator of the event in Royal Oak, Michigan. Shriver had to inform an audience member that they couldn’t actually ask any real questions at Kamala’s town hall because they were all scripted and handed to Harris beforehand. “We have some pre-determined questions and hopefully I will be able to ask some questions that will be in your head,” Shriver told the person. The thing was full of her own supporters and an anchor who was never going to challenge her on anything.

Why did it still have to be fake? What does this tell you about her if she were to become president? Even the press conference for the event was fake with Harris’ handler directing pre selected reporters with pre screened questions. The rest of the fake event was just word salads and empty platitudes as usual. It’s so hard to watch without grinding one’s teeth to pulp from cringing. Enough already. To top it all off they sat war obsessed RINO Liz Cheney next to her. Why can’t she do the fake Q&A on her own?

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“..the two have had a complicated relationship..”

• Trump-Rogan Interview Set For Friday: Politico (ZH)

Former President Donald Trump is set to record an interview with podcasting king Joe Rogan on Friday at Rogan’s studio in Austin, Texas. According to Politico, Rogan – who has over 14 million followers on Spotify, continues to dominate national podcast ratings. Trump’s appearance is expected to help Trump win young male voters – after appearing on such podcasts as “This Week w/ Theo Vaughn” and “Full Send.” Trump has never appeared on Rogan’s podcast and the two have had a complicated relationship. In August, Trump called out Rogan after the podcaster claimed that politicians on both sides are manipulative except for Robert Kennedy Jr., who at the time was running for president. -Politico

Reactions have been mixed – with some suggesting this is “incredible news,” and others suggesting this might not go well for the former president. Meanwhile, after rumors first emerged of a Trump appearance on Rogan, Reuters reported that Vice President Kamala Harris ‘could’ also sit down for an interview. (lol)

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ActBlue.

• Texas AG Demands FEC Action Over ‘Suspicious Donations’ To Democrats (ZH)

Texas Attorney General Ken Paxton says he has evidence that the Democrat fundraising platform ActBlue is interfering in the 2024 US election by allowing straw donors to mask “bad actors” donating to candidates “Our investigation into ActBlue has uncovered facts indicating that bad actors can illegally interfere in American elections by disguising political donations,” Paxton said in a statement on X. “It is imperative that the FEC close off the avenues we have identified by which foreign contributions or contributions in excess of legal limits could be unlawfully funneled to political campaigns, bypassing campaign finance regulations and compromising our electoral system.”

In a Monday press release, Paxton says he sent a Petition for Rulemaking to the Federal Election Commission (FEC) detailing how “suspicious actors appear to be using ActBlue’s political fundraising platform to make a large number of straw political donations.” “Our investigation into ActBlue has uncovered facts indicating that bad actors can illegally interfere in American elections by disguising political donations.” Last December, Paxton launched an investigation into ActBlue. In August, of this year he said that “straw donations” were systematically being made using false identities through untraceable payment methods. “I am calling on the FEC to immediately begin rulemaking to secure our elections from any criminal actors exploiting these vulnerabilities,” said Paxton. As Fox News reports further;

“ActBlue targets small-dollar donations, the Hill first reported, and has been an integral part of the Democratic fundraising structure, collecting an estimated $1.5 billion from about 7 million donors. While that influx of cash was split among nearly 19,000 campaigns, an excessive amount has gone to the highest profile races. In just the first few days of the Harris campaign, for example, donors gave her $200 million through the platform, per ActBlue’s account on the social platform X, the Hill reported. In September, Rep. Bryan Steil (R-Wis.) introduced a bill that would require political committees to collect CVVs — the three- or four-digit “card verification value” on the back of a credit card — along with political donations.

Steil, who chairs the Committee on House Administration, sent a letter to top FEC officials urging them to “immediately initiate an emergency rulemaking to require political campaigns to verify the card verification value (‘CVV’) of donors who contribute online using a credit or debit card, and to prohibit political campaigns from accepting online contributions from a gift card or other prepaid credit cards.” The Aug. 5 request came in response to accusations that ActBlue is skirting campaign donation laws that allow for rampant fraud on the site. Paxton’s office has said previously that “secure elections are the cornerstone of our republic.”

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“He fought the entire war on the front line, in Robotino, Soledar, Kherson… He was exhausted, he couldn’t take it anymore and the commanders didn’t give him a break. A few days ago he left, just like that..”

• Ukrainian Troops Increasingly Refusing Orders – El Pais (RT)

Ukrainian servicemen are increasingly refusing to follow orders and fleeing their positions, accusing their leadership of assigning them suicide missions, the Spanish newspaper El Pais reported on Monday, citing several Ukrainian officers. The outlet claimed that soldiers from four brigades fighting near the besieged settlement of Kurakhovo in Russia’s Donetsk People’s Republic have claimed that “the future of the war is bleak for their interests because there are not enough replacements.” “Why are we retreating? Because we have no rotations, we don’t rest, we are demoralized,” one officer told the outlet, adding that there is a growing problem of Ukrainian soldiers fleeing their positions. “I had a friend, we called him England. He fought the entire war on the front line, in Robotino, Soledar, Kherson… He was exhausted, he couldn’t take it anymore and the commanders didn’t give him a break. A few days ago he left, just like that,” the officer said.

A Ukrainian sergeant who goes by Churbanov also told the Spanish outlet that the shortage of soldiers had become the biggest problem facing the Ukrainian military, noting that servicemen often have to spend three months in their positions without rest or rotation. Another serviceman, identified as Alexander, who serves in the Territorial Defense Forces (TRO), also told El Pais that at one point the 116th TRO brigade near Kurakhovo staged a mass rebellion and refused to follow orders. After that, the whole brigade was supposedly transferred to Sumy Region, from where Kiev launched its incursion into Russia’s Kursk Region, according to the officer. A source within Russia’s security services has also confirmed to the TASS news agency that Ukraine’s 116th TRO brigade had indeed been transferred to participate in the Kursk incursion as punishment for its mutiny.

According to a source cited by the outlet, Kiev was trying to “somehow correct the situation in Kursk Region at the expense of the already demoralized Ukrainian Armed Forces soldiers.” Alexander also told El Pais that there had been a high-profile case earlier this month where 100 soldiers of the 123rd TRO Brigade abandoned their positions near Ugledar several days before the city was captured by Russian forces. The officer explained that they did this to “announce that without sufficient training and weapons they were being assigned to a suicidal defense,” according to El Pais. Moscow has long characterized the hostilities in Ukraine as a US-initiated proxy war against Russia in which Ukrainian soldiers were being expended as “cannon fodder” with the complicity of their government.

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“..helps to keep economic development free from politics as far as possible in the context of today’s world.”

• Dumping US Dollar ‘Keeps Politics Out Of Economic Development’ – Putin (RT)

Boosting trade settlements in national currencies between members of the BRICS group is a strategic necessity, Russian President Vladimir Putin has said, adding that a shift from the US dollar would strengthen financial independence and reduce geopolitical risks. Russia is currently hosting the 16th annual BRICS Summit in the city of Kazan. The group comprises Brazil, Russia, India, China, and South Africa, as well as new members Iran, Egypt, Ethiopia, and the UAE, which joined in January. Speaking on Tuesday with the president of the BRICS New Development Bank, Dilma Rousseff, Putin emphasized that the use of local currencies instead of the dollar or euro “helps to keep economic development free from politics as far as possible in the context of today’s world.”

The unprecedented US-led sanctions campaign against Moscow due to the Ukraine conflict has forced Russia and other BRICS members to seek alternative ways to pursue trade. Russia’s leading banks were banned outright from the SWIFT international payment system back in 2022 as part of the restrictions. Last month, Putin said that Russia was already actively switching to the use of national currencies in cross-border trade with its BRICS partners, and that the group’s members were jointly developing a payment and settlement framework to be used in trading. In August, Russian Prime Minister Mikhail Mishustin said that over 95% of mutual settlements between Russia and its biggest trading partner, China, are carried out using the ruble or yuan. Earlier this month, Indian Foreign Minister Subrahmanyam Jaishankar said New Delhi was looking to secure its interests and find “workarounds” in settlements with global partners, including Russia.

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“Other economies have to improve to a point where the relative US domination declines further, and in that case the alternative system will easily emerge.”

• Dollar’s Diktat Will Prove Its Downfall Once Emerging Powers Unite (Sp.)

The annual meetings of the International Monetary Fund and the World Bank kicked off in Washington, DC on Monday, with the gatherings, set to run through Saturday, expected to focus on the global debt crisis and ways to save the US-led international financial order. Here’s what will need to happen for the dollar’s dominance to fade into history. The US accounts for over a third of the skyrocketing $100 trillion in global public debt, with the country’s $35.75 trillion in borrowing (and climbing) gradually putting the economic behemoth in jeopardy as its share of global GDP by PPP sinks to below 15% – its lowest showing since the Great Depression of the 1930s, and down from a historic high of as much as 50% (in nominal terms) in the mid-1940s and the creation of the Bretton Woods System of international exchange.

“Countries are seeking ways and means of conducting trade and business outside the US-dominated financial architecture, because they are fed up with the US dictating terms to multiple countries, especially by preventing countries from doing business with countries under US sanctions,” Chintamani Mahapatra, founder and chairman of the Kalinga Institute of Indo-Pacific Studies, told Sputnik, commenting on the US’s relative decline against the backdrop of this week’s IMF/World Bank Group meetings. There is essentially no other option for many countries at the moment “to conduct business with countries under US sanctions, even if they do not support US sanctions,” Mahapatra stressed, pointing out that the rising Chinese yuan has a way to go before it can “emerge as a credible international currency,” and that US-led institutions like the IMF, World Bank and WTO will be certain to do their best to “ensure that the US and its allies maintain their dominance in the global financial ecosystem.”

“The combined West will try not to allow an alternative system from rising. And the non-West is hardly united. Countries have complex interdependence,” the observer said. “Thus, one cannot write the obituary of the dollar-dominated system at the moment. Other economies have to improve to a point where the relative US domination declines further, and in that case the alternative system will easily emerge.” “The first step should be to attempt to create an alternative financial system for global trade, so that the payment system can be other than the current financial architecture dominated by the United States. However, de-dollarization is not easy. The emerging economies will have to resolve their bilateral political and security differences before seeking to create a de-dollarized order based on non-discrimination, equity and justness,” Mahapatra emphasized.

For now, “the US, and not many other countries, are benefiting a great deal from the current war in Europe and the West Asian region. Thus, expecting other economies to perform better now is not appropriate,” Mahapatra added. As far as the IMF/World Bank agenda’s focus on debt is concerned, the observer stressed that so long as the dollar’s hegemony is maintained, growing debt in the US will create major risks for the global economy. “Although the US, the largest global economy, is facing huge public debt, the US economy is unlikely to suffer much. After all, the US Federal Reserve prints dollars and not any other country. But decline or turbulence in the US economy due to huge and unsustainable debt will have global ramifications and thus countries are trying to avoid shocks as a natural reaction,” Mahapatra said.

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“Our allies have taken advantage of us. More so than our enemies..”

“To me, the most beautiful word in the dictionary is ‘tariffs’..”

• EU Bracing For Trade War With Trump – Politico (RT)

The EU is bracing for a massive trade war with Donald Trump if he wins the US presidential race in November and erects new barriers to commerce with Europe, Politico reported on Monday, citing senior diplomats and EU officials. Concerns are mounting in EU capitals since the former US president has pledged to target the bloc with a slew of new punitive trade measures in a bid to address what he says are serious imbalances in imports and exports, the outlet said. Washington and Brussels have been at odds over the issue since Trump imposed 25% tariffs on imports of European steel and 10% on aluminum in 2018 in his first term as president, arguing EU competition was endangering US national security. The EU retaliated, imposing duties on companies including motorcycles produced by Harley-Davidson Inc. and Levi Strauss & Co jeans.

Trump went even further however, and threatened to impose tariffs on EU car exports. Although the threatened duties never took effect, Brussels “was shocked” by Trump’s willingness to overhaul supply chains. “Last time we didn’t believe how far Trump would actually go,” one of the diplomats told Politico. “This time we’ve had time to prepare. Europe has changed a lot, and we will be ready to act.” Trump has previously said that as president, he may also introduce counter-measures against EU digital services taxes that implicitly target US technology leaders. “Our allies have taken advantage of us. More so than our enemies,” Trump said last week in an interview with Bloomberg News Editor-in-Chief John Micklethwait. “Our allies are the European Union. We have a trade deficit of $300 billion with the European Union.”

The EU is preparing a coordinated impact assessment of a potential Trump victory with the European Commission overseeing the process, and is determined to retaliate and “hit back hard,” one diplomat told Politico. According a second diplomat, the bloc is confident it can “win this trade war.” The EU should aggressively retaliate given that Trump uses trade and tariffs as a negotiating tactic to force countries to act in the interest of the US, the report said. At his rallies, Trump has vowed to impose a 10% baseline duty on imports from other countries. “To me, the most beautiful word in the dictionary is ‘tariffs’,” he said. “It’s my favorite word.” He also took aim at German car producers last week, pledging to slap high levies on imported cars. According to Trump, such duties targeting EU industry would force producers in the bloc to move their factories to the US, boosting its long-term global manufacturing position.

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”There is no growth in Germany, there is growth in other countries, and the tax situation is not particularly good either..”

• Sharp Rise In Russia’s Share Of EU LNG Market (RT)

The share of Russian liquified natural gas (LNG) in the EU market has reached 20% this year, the bloc’s energy watchdog reported in a quarterly review released on Tuesday. In 2023, the share of Russian-sourced tanker-movable fuel was 14%, according to statistics cited by the Agency for the Cooperation of Energy Regulators (ACER). The shift came as supplies from Qatar, Nigeria, and minor suppliers declined. The US remains the biggest source of LNG, accounting for 45% of EU imports. The total flow as well as the EU’s share in the global LNG market have both shrunk this year. The bloc now accounts for 18% of all imports, down from 24% last year, the ACER report estimated. Roughly a third of all EU gas imports come in the form of LNG, with the rest being delivered via pipelines, according to the report.

Russian pipeline supplies grew from 7.9 billion cubic meters in Q3 of 2023 to 8.6 billion cubic meters this year. Commenting on the findings, Bloomberg said it highlighted challenges in implementing the EU’s policy of reducing reliance on Russian supplies. This summer, Brussels banned investment in LNG projects in Russia and targeted the transshipment of Russian gas by third nations with a port access ban. Qatar, a major natural gas producer, has been diverting shipments to Asian markets, in part due to the worsening security situation in the route through the Red Sea, Bloomberg said, explaining why its presence in the EU market has declined. The Yemeni-based Houthi rebels have been targeting commercial ships which they believe to be linked to Israel, in a campaign to pressure West Jerusalem to end its military action in Gaza.

The EU declared the intention wean itself off Russian supplies in its economy, particularly in the energy sector, following the outbreak of the Ukraine conflict in February 2022. Supplies of expensive US fuel have replaced much of the cheap pipeline gas that was previously delivered by Russia. The change contributed to a drop in the competitiveness of Western Europe, which was highlighted last week by an executive from German industrial giant Siemens. Speaking at a public hearing of the Bundestag’s Financial Committee, Christian Kaeser, the company’s head of global taxation, said it no longer invests at home due to the poor business climate. ”There is no growth in Germany, there is growth in other countries, and the tax situation is not particularly good either,” he stated.

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“..each one of them “treated pre-teen children who were shot in the head or chest on a regular or even a daily basis.”

• Harris Denies Israel Is Committing Genocide in Gaza – Campaign (Antiwar)

Vice President Kamala Harris’s presidential campaign has clarified that she does not believe Israel is committing genocide in Gaza after an incident at a rally suggested that she did. At a campaign event at the University of Wisconsin-Milwaukee, a protester interrupted Harris and said she invested “billions of dollars in genocide” and pressed her about the massive child casualties in Gaza, repeatedly describing the Israeli onslaught as a genocide. Addressing the students, Harris said, “What he’s talking about, it’s real. That’s not the subject that I came to discuss today, but it’s real, and I respect his voice.”

A spokesperson for Harris’s campaign said Sunday that the comments made by the protester “don’t reflect the position of the Biden-Harris administration or the vice president’s stance.” The spokesperson added that Harris “didn’t agree with defining the war as a genocide, and she has not expressed such a stance in the past, as this is not her position.” The International Court of Justice (ICJ) has ruled that its “plausible” Israel is committing genocide against the Palestinian population of Gaza. There have been massive civilian casualties in the onslaught, and Israeli forces have purposely targeted children.

A group of 99 American healthcare workers who volunteered in Gaza said in an open letter to Harris and President Biden that each one of them “treated pre-teen children who were shot in the head or chest on a regular or even a daily basis.” The American healthcare workers also estimated that over 118,000 Palestinians had been killed in Gaza, or about 5% of the population. Despite the mass slaughter, the Biden administration maintains Israel is not committing genocide since that would mean US officials are supporting genocide. Harris also angered pro-Palestine groups over the weekend when discussing the situation in Gaza by labeling the October 7 Hamas attack on southern Israel the “most tragic” part of the conflict.

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This is good. And long.

• Biblical Cruelty Took Power In Israel: “Mein Kampf In Reverse” (José Goulão)

The founding fallacy of Zionism has survived many decades since the establishment of the State while the continued colonization of Arab territories was developing, an illegal process only possible thanks to the tolerance and complicity of the UN, the United States and the countries involved in European integration: first in the territories allocated to the Arab population through the sharing agreement approved in 1948 by the United Nations; from 1967 and the so-called Six-Day War, in the Palestinian regions of Gaza, the West Bank and East Jerusalem occupied at that time, allowing the installation of settlements in vast areas stolen by the Zionist regime from the original population. They are now home to almost 700,000 fanatical fundamentalist Jews from all over the world, the overwhelming majority without any ethnic roots in Palestine.

This brutal and massive demographic violence, always with the character of ethnic cleansing, as it was written, mortally wounded the fallacy of secular Zionism. Real, fascist, fiercely racist and segregationist Zionism, which has the expulsion of all Palestinians on the horizon, has taken power over the most recent decades and intends to remain there eternally “by the will of God”, respected and fulfilled through “prophets ” self-taught and terrorists who consider themselves mandated by him to guarantee their vigilante role on Earth by applying the terrifying mythology of the Old Testament to the letter. Netanyahu is just another leader in this process of transforming the character of the State, even though the role of head of government played almost exclusively over the last 30 years has given him a natural prominence, although overestimated in relation to his real weight in the fundamentalist environment.

He inherited the mission from his father, Benzion Netanyahu, in turn personal secretary and one of the main ideological disciples of Volodymir Jabotinsky, the Ukrainian who was a collaborator of Mussolini and in 1925 had caused the great schism between the secular Zionism opportunistically proclaimed at birth and that designated “ revisionist Zionism” founded by him. This variant of extremist colonialism under “Hebrew” cover inspires the political-religious fanaticism that prevails in the current government and aims to create a theocracy – the primacy of the “Law of God”. Maintaining, of course, the mission of defending Western civilization in the Middle East. It is no small matter that this fanatical tendency has enormous representation within the World Jewish Congress and is supported without practical restrictions by the United States regime and the non-democratic bodies that define European Union policies.

Ehud Barak, one of the most experienced Israeli politicians, prime minister of a government at the beginning of the century that practiced a savage repression of the so-called Second Palestinian Intifada and was the last head of the Labor Party as an influential political organization, has a relevant opinion about the ongoing events. “Under the cover of war,” he says, “a governmental and constitutional coup is taking place without a shot being fired; If the coup is not stopped it will turn Israel into a dictatorship within weeks – Netanyahu and his government are murdering democracy.” The path proposed by the now “centrist” leader is to “close the country through large-scale civil disobedience 24 hours a day, seven days a week”.

A much more incisive and advanced opinion, and also alarming, comes from General Moshe Yalon, former Chief of Staff of the Armed Forces and former Minister of Defense: “An angry, eschatological cult is laying down the law in Tel Aviv, the headquarters of the genocidal and colonial construction of the settler community; This process is completed with a huge vigilante militia, or interconnected militias of hundreds of thousands of colonists armed to the teeth, uncontrollable and prepared for anything, even attacking the military and the State.” A “former Mossad director” quoted by the newspaper “Haaretz” even questions the future of the so-called “Jewish State” saying that if it takes the form of “a racist and violent State it will not be able to survive; and it’s probably already too late.”

When following the globalist media network, it will be said that the current Israeli government is made up only of Prime Minister Netanyahu and the Minister of Finance, Bezalel Smotrich, and the Minister of Security, Itamar Ben-Gvir, these two benevolently considered as “ far-right” when, in practice, they are nothing more than Nazi terrorists. Smotrich is a settler head of the National Religious Party who denies the existence of the Palestinian people, “composed of sub-humans”. On his record he has several accusations of terrorist attacks, including against Zionist authorities.

Itamar Ben-Gvir is the son of an Iraqi Kurdish Jew who was part of the terrorist group Irgun, a founding branch of the Israeli army born in the ranks of Mussolini and historically led by former prime minister Menahem Begin. He heads the Otzmar Yehdiut organization, equally “extreme right” and heir to the banned Kach movement of the fascist icon Meir Kahane, an American terrorist born in New York, where he committed several attacks for which he was sentenced to one year in prison, which he served in a hotel. He then settled in Israel to fight for the expulsion of all Palestinians from Palestine, was arrested at least 60 times for terrorist attacks and was elected a member of the Knesset (Parliament).

Read more …

 

 

 

 

Bike lock
https://twitter.com/i/status/1848688384392171691

 

 

Baby dog

 

 

Kiss
https://twitter.com/i/status/1848765037688557721

 

 

Pineapple
https://twitter.com/i/status/1848612938208215460

 

 

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Debt Rattle March 26 2023

Mar 262023
 
 March 26, 2023  Posted by at 9:00 am Finance Tagged with: , , , , , , , , , ,  37 Responses »


Jasper Johns Map 1961

 

• Ukraine Not Ready For Offensive – Zelensky (RT)
• No Ukraine Offensive Without More Weapons – Zelensky (BBC)
• Biden Downplays Russia-China Ties (RT)
• G7 vs BRICS – Off to the Races (Scott Ritter)
• Hungary Comments On Ukraine’s NATO and EU bids (RT)
• Biden Snubs Türkiye And Hungary For ‘Democracy’ Summit (RT)
• Putin Indictment Deals Fatal Blow to ICC Legitimacy (Develay)
• Western Economic Prosperity Is Over And Not Coming Back Any Time Soon (Fomenko)
• New Worldwide Financial System/Banking Crisis is Upon Us (Mannarino)
• Is A Full-Blown Global Banking Meltdown In The Offing? (Satyajit Das)
• Could Trump Win By Losing? Sometimes ‘Nothing’ Is ‘A Real Cool Hand’ (Turley)
• Fired FBI Goon Peter Strzok Issues Veiled Death Threat to Donald Trump (GP)
• Prosecutor Admits DC Police Officers Acted as Provocateurs on Jan. 6 (ET)
• CIA Says Americans Who Visited Assange Had No Privacy Rights (Gosztola)

 

 

 

 

Macgregor

 

 

 

 

France fire
https://twitter.com/i/status/1639775790698217472

 

 

 

 

ATF

 

 

GI bacteria

 

 

 

 

Greenwald

 

 

Bhakdi

 

 

Atlas

 

 

 

 

“..Moscow is well aware of Ukrainian plans to stage an offensive, noting that Russia’s General Staff is making its own assessments on the matter and planning a response.”

• Ukraine Not Ready For Offensive – Zelensky (RT)

Ukraine has not yet accumulated enough resources to stage an offensive, President Vladimir Zelensky has admitted. In an interview released on Saturday by the Japanese newspaper Yomiuri, Zelensky said that the situation on the frontline “was not good,” explaining that Ukraine was lacking enough ammunition for successful operations. On the subject of an offensive, the Ukrainian president stated that “we can’t start [it] yet. Without tanks, artillery and [US-supplied rocket launchers] HIMARS, we cannot send our brave soldiers to the front lines.” “We are waiting for ammunition to arrive from our partners,” he added, claiming that Russian troops had been firing three times as many shells as the Ukrainian side. In light of this, he reiterated his calls for Kiev’s Western backers to send more arms and urged them to sign off on deliveries of fighter jets.

Commenting on a potential dialogue with Russia, Zelensky insisted that “absolutely no conditions have been formed for this,” suggesting that Moscow would have to leave the territories Ukraine claims as its own first. Moscow has repeatedly said that it is open to talks with Kiev on condition that it recognize the “reality on the ground,” referring to the new status of four former Ukrainian regions as part of Russia. Speculations about an imminent Ukrainian spring counteroffensive have been swirling in the Western media for several weeks now. Last week, Politico reported that the US expected Kiev to start the offensive in May, with Ukrainian troops attempting to push into Crimea either by crossing the Dnieper River – which was considered an unlikely option – or moving out from their positions in the north.

Around the same time, the New York Times reported that Western officials were worried that Ukraine’s costly attempts to hold on to the strategic Donbass city of Artyomovsk (known as Bakhmut in Ukraine) could jeopardize the upcoming offensive, given that Kiev’s Western backers would not be able to replenish its ammunition stocks any time soon. With this in mind, one Pentagon official cited by the outlet described the anticipated push as a “last-ditch effort.” On Friday, former Russian President Dmitry Medvedev, who now serves as deputy chairman of the Security Council, said that Moscow is well aware of Ukrainian plans to stage an offensive, noting that Russia’s General Staff is making its own assessments on the matter and planning a response.

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BBC=MSM

• No Ukraine Offensive Without More Weapons – Zelensky (BBC)

President Volodymyr Zelensky has said Ukraine’s counter-offensive against Russia cannot start until Western allies send more military support. He told a Japanese newspaper he would not send his troops to the frontlines without more tanks, artillery and Himars rocket launchers. In an interview with Yomiuri Shimbun, he said the situation in eastern Ukraine was “not good”. “We are waiting for ammunition to arrive from our partners,” he said. And when asked about the expected counter-offensive, he said: “We can’t start yet, we can’t send our brave soldiers to the front line without tanks, artillery and long-range rockets.” He added: “If you have the political will, you can find a way to help us. We are at war and can’t wait.” There has been talk for some weeks of Ukraine launching a spring offensive against Russian forces. Ukrainian commanders have hinted it might be imminent.

Oleksandr Syrskyi, commander of Ukraine’s ground forces, said this week it might come “very soon”. Some analysts say Ukraine’s military is talking up the idea of a counter-offensive to discomfit their Russian counterparts. They want Russian commanders to spread their forces thinly along the front lines, ready for any attack, rather than concentrate them in particular places, such as the eastern city of Bakhmut. Other analysts believe a counter-offensive is possible soon. A US-based think tank, the Institute for the Study of War, last week suggested that Russia’s own offensive was potentially losing momentum and concluded: “Ukraine is therefore well positioned to regain the initiative and launch counter-offensives in critical sectors of the current frontline.”

But President Zelensky is more pessimistic. He has often warned that the war could drag on for years unless Western allies speeded up the delivery of weapons. But this is the first time he has actually said the counter-offensive itself might be delayed by the lack of Western equipment. His remarks reflect not only his desire to encourage more speed, but also his frustration at what he sees as the lack of haste.

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“..the Western countries have “significantly expanded our alliances.” “I haven’t seen that happen with China and/or Russia or anybody else in the world..”

• Biden Downplays Russia-China Ties (RT)

The global community is paying too much attention to cooperation between China and Russia, US President Joe Biden said on Friday. His comments came several days after Chinese President Xi Jinping concluded a landmark three-day visit to Russia. Speaking at a joint press conference with Canadian Prime Minister Justin Trudeau, Biden was asked to comment on China’s efforts to deepen economic ties with Russia. The president replied that the Western countries have “significantly expanded our alliances.” “I haven’t seen that happen with China and/or Russia or anybody else in the world,” he added. Biden went on to say that he has met with 80% of the world leaders since being sworn into office. “We’re the ones expanding the alliances. The opposition is not,” he claimed.

“We’re in a situation in the United States where NATO is stronger, we’re all together – the G7, the Quad [security agreement between Australia, India, Japan, and the US], the ASEAN [Association of Southeast Asian Nations], Japan, and Korea,” Biden said. The president stated that while he does not take China and Russia lightly, “we vastly exaggerate” their ties. “I’ve been hearing now for the past three months about ‘China is going to provide significant weapons to Russia, and they’re going to…’ They haven’t yet. Doesn’t mean they won’t, but they haven’t yet.” The US has said that China is considering arms shipments to help Russia in the Ukraine conflict. This claim has been vehemently denied by Beijing, which has positioned itself as a neutral party in the context of hostilities between Moscow and Kiev, while repeatedly calling for a peace settlement.

Earlier this week, Xi wrapped up a three-day visit to Moscow, which included talks with Russian President Vladimir Putin and resulted in the signing of more than a dozen agreements on cooperation in the defense, economic, and industrial spheres. Moscow and Beijing also pledged to “deepen relations of comprehensive partnership and strategic interaction entering a new era,” while urging the US “to stop undermining international and regional security… in order to maintain its own unilateral military superiority.”

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“This was not a projection, but rather a statement of accomplished fact: BRICS was responsible for 31.5 percent of the PPP-adjusted global GDP, while the G7 provided 30.7 percent..”

• G7 vs BRICS – Off to the Races (Scott Ritter)

Since the Russian invasion of Ukraine, an ideological divide that has gripped the world, with one side (led by the G7) condemning the invasion and seeking to punish Russia economically, and the other (led by BRICS) taking a more nuanced stance by neither supporting the Russian action nor joining in on the sanctions. This has created a intellectual vacuum when it comes to assessing the true state of play in global economic affairs. It is now widely accepted that the U.S. and its G7 partners miscalculated both the impact sanctions would have on the Russian economy, as well as the blowback that would hit the West. Angus King, the Independent senator from Maine, recently observed that he remembers “when this started a year ago, all the talk was the sanctions are going to cripple Russia. They’re going to be just out of business and riots in the street absolutely hasn’t worked …[w]ere they the wrong sanctions? Were they not applied well? Did we underestimate the Russian capacity to circumvent them? Why have the sanctions regime not played a bigger part in this conflict?”

It should be noted that the IMF calculated that the Russian economy, as a result of these sanctions, would contract by at least 8 percent. The real number was 2 percent and the Russian economy — despite sanctions — is expected to grow in 2023 and beyond. This kind of miscalculation has permeated Western thinking about the global economy and the respective roles played by the G7 and BRICS. In October 2022, the IMF published its annual World Economic Outlook (WEO), with a focus on traditional GDP calculations. Mainstream economic analysts, accordingly, were comforted that — despite the political challenge put forward by BRICS in the summer of 2022 — the IMF was calculating that the G7 still held strong as the leading global economic bloc.

In January 2023 the IMF published an update to the October 2022 WEO, reinforcing the strong position of the G7. According to Pierre-Olivier Gourinchas, the IMF’s chief economist, the “balance of risks to the outlook remains tilted to the downside but is less skewed toward adverse outcomes than in the October WEO.” This positive hint prevented mainstream Western economic analysts from digging deeper into the data contained in the update. I can personally attest to the reluctance of conservative editors trying to draw current relevance from “old data.” Fortunately, there are other economic analysts, such as Richard Dias of Acorn Macro Consulting, a self-described “boutique macroeconomic research firm employing a top-down approach to the analysis of the global economy and financial markets.”

Rather than accept the IMF’s rosy outlook as gospel, Dias did what analysts are supposed to do — dig through the data and extract relevant conclusions. After rooting through the IMF’s World Economic Outlook Data Base, Dias conducted a comparative analysis of the percentage of global GDP adjusted for PPP between the G7 and BRICS, and made a surprising discovery: BRICS had surpassed the G7. This was not a projection, but rather a statement of accomplished fact: BRICS was responsible for 31.5 percent of the PPP-adjusted global GDP, while the G7 provided 30.7 percent. Making matters worse for the G7, the trends projected showed that the gap between the two economic blocs would only widen going forward.

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“Around 156,000 ethnic Hungarians live in Ukraine, most of them in the western region of Transcarpathia. Ukraine is also home to around 150,000 ethnic Romanians and more than 250,000 Moldovans..”

• Hungary Comments On Ukraine’s NATO and EU bids (RT)

Hungary will not agree to Ukraine joining NATO and the EU as long as Kiev continues to discriminate against ethnic Hungarians living in Transcarpathia, Foreign Minister Peter Szijjarto has said. Szijjarto added that he raised the issue at a meeting with the UN assistant secretary general for human rights, Ilze Brands Kehris. Up to 99 Hungarian primary and secondary schools are in danger of being closed in Ukraine due to the nation’s education law, Szijjarto said. “I made it clear to Ilze Brands Kehris… that Hungary will not be able to support Ukraine’s transatlantic and European integration [bids] under any circumstances as long as Hungarian schools in the Transcarpathia region are in danger,” the minister wrote on Facebook on Friday. Kiev has been cracking down on minority language rights for years.

Laws enforcing the use of Ukrainian in education and television were adopted as early as 2017 under then-President Pyotr Poroshenko. In 2018, another law banned the teaching of Russian, as well as Romanian, Polish, and Hungarian beyond the primary school level. In 2019, the Council of Europe’s Venice Commission criticized Ukraine’s State Language Law, saying it “fails to strike balance between strengthening Ukrainian and safeguarding minorities’ linguistic rights.” Budapest has been among the most vocal critics of Kiev’s language policies in the West. According to Szijjarto, Ukraine has not done anything substantial to address Hungary’s concerns. “For the past eight years, we have continuously received promises from the Ukrainian authorities that they will solve this problem, but they have not actually done anything,” he said.

Around 156,000 ethnic Hungarians live in Ukraine, most of them in the western region of Transcarpathia. Ukraine is also home to around 150,000 ethnic Romanians and more than 250,000 Moldovans, and Bucharest previously joined Budapest in demanding that the language laws be revised. In February, Szijjarto announced that the Council of Europe will review Kiev’s treatment of minorities and issue a report on its alleged discrimination against ethnic Hungarians and Romanians living in Ukraine this summer. He pointed to yet another law adopted in December 2022, which mandated the use of Ukrainian in most aspects of daily and public life, including schools.

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They want a declaration of wonderful unity, not diverse voices.

• Biden Snubs Türkiye And Hungary For ‘Democracy’ Summit (RT)

The administration of US President Joe Biden has left NATO allies Türkiye and Hungary off the invite list for next week’s Summit for Democracy, Foreign Policy magazine reported on Thursday, citing three US officials familiar with the decision. The two countries were also snubbed from last year’s inaugural rendition of the summit, an event that, despite being held only twice, Biden has lauded as one of his signature foreign policy achievements. A State Department official confirmed that all participants in the 2021 summit had received an invitation for this year’s event, plus some additions. However, he said, the Biden administration was “not interested in this event being seen as an all-encompassing judgment on the strength of another country’s democracy.”

Rob Berschinksi, senior director for human rights and democracy in the National Security Council, told al-Monitor that while Türkiye was “an important NATO ally of the United States and an incredibly important partner,” Washington had “been quite clear in terms of [its] assessment of the status of democracy and human rights within the country,” namely, that it was declining. Turkish President Recep Tayyip Erdogan’s announcement last week that the country would begin ratifying Finland’s membership in NATO but not Sweden’s likely contributed to the decision to leave it off the list a second time. While Erdogan has not ruled out admitting Sweden to the military alliance, he stressed that Stockholm’s refusal to turn over more than 210 alleged terrorists to Turkish custody was a deal-breaker.

Hungary, which Biden memorably denounced as “totalitarian” in 2020, has fallen into disfavor among NATO allies for its refusal to support the strictest sanctions the EU has attempted to deploy against the Russian oil and gas industry. With about 80% of its natural gas coming from Russia, Budapest has repeatedly pointed out that an embargo would hurt Hungary and other European nations much more than it would punish Moscow for the conflict in Ukraine. The Hungarian prime minister’s office earlier this week reiterated calls for a ceasefire in Ukraine and condemned the UK’s decision to send depleted uranium ammunition to Kiev. The country’s opposition to allowing Ukraine into the EU will not change unless “basic human rights norms are complied with” regarding the use of EU languages in Ukraine, Gergely Gulyas, head of the PM’s office, told reporters on Thursday, though Hungary has expressed support for Finland and Sweden joining NATO. The Summit for Democracy will take place from March 28-30 in Washington, as well as in partner countries Costa Rica, South Korea, and Zambia.

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The ICC is just another black hole for money and truth.

• Putin Indictment Deals Fatal Blow to ICC Legitimacy (Develay)

Already under considerable pressure these past few years for its perceived selective prosecution of mostly African leaders, the International Criminal Court has placed its own proverbial “nail in the coffin” on March 17th when it issued an arrest warrant against the Russian Federation’s President Vladimir Putin. To be sure, the Court had since its inception faced numerous obstacle in trying to establish its status as the preeminent jurisdiction tasked with prosecuting senior official alleged to have committed or abetted the most heinous crimes under international criminal law. First, the United States never ratified the Rome Statute. While former US President William J. CLINTON had hinted that the US would join the list of Member-States by signing (but not ratifying the Treaty of Rome), George W. BUSH (egged on by his then Permanent Ambassador to the UN, John BOLTON) promptly dashed any hopes that this would ever happen.

Indeed, the BUSH administration presided over the adoption of the Hague Invasion Act of 2002 (the same year the Court effectively came into existence in the wake of its having collected the prerequisites sixty signatures from its Members). The Act openly called if necessary for the US military to storm the ICC in order to exfiltrate US soldiers. If that wasn’t enough of a message that some (the most powerful) States would take a pass on granting the Court jurisdiction over their nationals (China, Saudi Arabia, Iran, India and Israel never even signed the Treaty), Washington proceeded to amend all of the SOFAs (Status of Forced Agreements) negotiated with the governments of every country having ratified the Rome Statute where the US has some of its troops stationed by providing that American soldiers would not be subjected to any types of extradition proceedings to the Hague (ASPA).

This sequence of events essentially set the tone for 20 years of subsequent campaigns engineered by the Court so as to establish its own relevance. The powerlessness of the Court is to be found within the Rome Statute itself. Indeed, the Court may not claim jurisdiction over occurrences of alleged Jus Cogens violations (those violations not subjected to any Statute of limitations) unless said violations are alleged to have occurred on the territory of a Member-State which thus has accepted the Court’s jurisdiction or if said jurisdiction is expressly granted through a resolution adopted by the UN Security Council (not subjected to a veto from any of its Five Permanent Members).

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“US leadership is in the past, living in denial, and running policies on how they assume the world “should be,” rather than how it actually “is..”

• Western Economic Prosperity Is Over And Not Coming Back Any Time Soon (Fomenko)

The years of Western boom, enjoyed in the 90s and early 2000s, never returned and if the past few years are any indication, won’t anytime soon. The geopolitical climate is now in such a position that globalization is being rolled back, deliberately. The economic system the US once built and heralded as a virtue to show communist countries the light of capitalism is now being dismantled because it is perceived not to have converted, but empowered “adversarial” states. The US now opposes free trade, opposes economic integration between its allies and both China and Russia, and has no qualms about tearing up the roots of the globalization tree. The answer is less free trade, more tariffs, more sanctions, more export controls, more forcing allies to comply with what it wants, and unreasonable investments fueled by geopolitics, not market needs.

The Biden administration’s economic policy is a disaster precisely because it is a mix of geopolitical assertiveness, heavy-handed protectionism, and catastrophic fiscal policy. Washington’s decision to inject trillions to shore up the US economy, prolong a war which produces a running inflation crisis, insist on a growing economic war with China, and then be forced to raise interest rates multiple times, despite banks going under, is a cocktail of death. The US has drastically narrowed its options, and continually lied that it can handle the fallout.

Thus, the good old days of Western prosperity are over. The neoliberal Reaganite economic order was once the bedrock of global growth, as unfair and uneven as it was. But it is fair to say that by 2023, the geopolitical conditions which enabled this system no longer exist. The world has changed, and it is little wonder why. The US has not truly been able to arrest the rise of China despite trying its darndest to disrupt it, or to deal a death blow to the Russian economy, which Washington officials had prematurely declared doomed. All of it indicates that US leadership is in the past, living in denial, and running policies on how they assume the world “should be,” rather than how it actually “is,” and it’s ordinary people who are footing the bill for it all.

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” Year over year mortgage applications have dropped a record 43 percent, and bank refi’s have dropped another record 74 percent.”

• New Worldwide Financial System/Banking Crisis is Upon Us (Mannarino)

Once again! The global financial system finds itself in crisis. Indeed, a new full-on worldwide financial system/banking crisis is upon us. (And it’s just getting started). Let us consider… Is it even remotely possible that banking regulators and central banks simply missed this? Meanwhile, We the People saw this coming? Is that even possible? Really? How about no. There is absolutely no feasible or realistic way that banking regulators and central banks could have not seen this coming from miles away, and here are just a few reasons why. Let’s start with this. Every bank is required to submit financial reports to regulatory authorities every quarter and moreover, even without seeing these reports, it’s plainly obvious that banks were failing because of just three things. Number 1. No deposits, Number 2. No loans, and Number 3. No deals.

I brought these three things listed above up to the attention of those who follow my work beginning no less than eight months ago. Now, just to put this into further perspective. The average savings rate, which is calculated as the percentage of cash which people put away after expenses, is 8.84 percent. Again 8.84 percent is the average. Well today, the savings rate has dropped to just 4.7 percent (and personally I believe that this number is inflated). This 4.7 percent savings rate appears inflated to me because currently more and more people are becoming dependent on credit card usage. (Credit card debt has exploded, rising 11 percent in just the last year). With respect to “no loans and no deals.” Year over year mortgage applications have dropped a record 43 percent, and bank refi’s have dropped another record 74 percent.

And on top of all this, loan delinquencies across the board continue to skyrocket. But it gets even worse. People are withdrawing cash from both their money market and savings accounts at a record pace. So, no… It is not possible, even in the remote! That those who stand in charge of the world economy, the banking system, and the markets just missed all this. Therefore, it is deliberate. In fact, it’s more than just deliberate! This entire banking system crisis/global financial system collapse has been perfectly orchestrated and engineered by central planners/banks. But why? The question of why comes down to just a few things. Central banks are “rearranging the deck chairs” so to speak, and it comes down to a consolidation of the banking system in preparation for the rollout of an entirely new central bank digital/cashless system.

It is also about a consolidation of power. Understanding that even the Super Banks are also facing those same issues as the smaller regional banks, with “no deposits, no loans, and no deals.” That situation, combined with rising loan delinquencies. Let’s not forget the flight of cash from people who are being forced to deplete their savings and money market accounts just to make ends meet in this ongoing inflationary environment. What better way could central planners use to re-liquify the large Wall Street Super Banks than to foster a meltdown of the smaller regional banks who will have no choice but to be forced into selling their assets to the mega banks at fire sale prices?

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“In Annie Hall, Woody Allen cannot have his brother, who thinks he is a chicken, treated by a psychiatrist because the family needs the eggs. Banking regulation flounders on the same logic.”

• Is A Full-Blown Global Banking Meltdown In The Offing? (Satyajit Das)

The UBS acquisition of Credit Suisse requires the Swiss National Bank to assume certain risks. It will provide a Swiss Franc 100 billion ($108 billion) liquidity line backed by an enigmatically titled government default guarantee, presumably in addition to the earlier credit support. The Swiss government is also providing a loss guarantee on certain assets of up to Swiss Franc 9 billion ($9.7 billion), which operates after UBS bears the first Swiss Franc 5 billion ($5.4 billion) of losses. The state can underwrite bank liabilities including all deposits as some countries did after 2008. As US Treasury Secretary Yellen reluctantly admitted to Congress, the extension of FDIC coverage was contingent on US officials and regulators determining systemic risk as happened with SVB and Signature. Another alternative is to recapitalise banks with public money as was done after 2008 or finance the removal of distressed or toxic assets from bank books.

Socialisation of losses is politically and financially expensive. Despite protestations to the contrary, the dismal truth is that in a major financial crisis, lenders to and owners of systemic large banks will be bailed out to some extent. European supervisors have been critical of the US decision to break with its own standard of guaranteeing only the first $250,000 of deposits by invoking a systemic risk exception while excluding SVB as too small to be required to comply with the higher standards applicable to larger banks. There now exist voluminous manuals on handling bank collapses such as imposing losses on owners, bondholders and other unsecured creditors, including depositors with funds exceeding guarantee limit, as well as resolution plans designed to minimise the fallout from failures.

Prepared by expensive consultants, they serve the essential function of satisfying regulatory checklists. Theoretically sound reforms are not consistently followed in practice. Under fire in trenches, regulators concentrate on more practical priorities. The debate about bank regulation misses a central point. Since the 1980s, the economic system has become addicted to borrowing-funded consumption and investment. Bank credit is central to this process. Some recommendations propose a drastic reduction in bank leverage from the current 10-to-1 to a mere 3-to-1. The resulting contraction would have serious implications for economic activity and asset values. In Annie Hall, Woody Allen cannot have his brother, who thinks he is a chicken, treated by a psychiatrist because the family needs the eggs. Banking regulation flounders on the same logic.

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“..The level of excitement could prompt Pornhub to do its first live courthouse feed…”

• Could Trump Win By Losing? Sometimes ‘Nothing’ Is ‘A Real Cool Hand’ (Turley)

Donald Trump was back in all caps this week, denouncing prosecutors, warning of “death and destruction” if he is arrested, and even posting a picture wielding a baseball bat menacingly near a headshot of Manhattan District Attorney Alvin Bragg. After each tirade, many of us denounced the inflammatory rhetoric while others insisted the former president was becoming unhinged at the prospect of being arrested. As if to speed along that decline, others posted viral fake AI-generated pictures showing Trump being arrested. Then Trump shared his own AI-generated photo of praying. The fact is that Trump is in his element: In the land of rage, the most enraged man is king. If you surf cable shows, you will see pundits in virtual ecstasy as they prepare for the possibility of a Trump mug shot or perp walk. The level of excitement could prompt Pornhub to do its first live courthouse feed.

[..]Trump is unlikely to see the inside of a prison before the election. Even after the election, courts likely would allow appeals to be exhausted before ordering the arrest of a sitting president — and those appeals could take years. On the federal charge, special counsel Jack Smith would have to finish his grand jury investigation and then convince Attorney General Garland to green-light criminal charges. He then may need to bring an indictment before the end of summer 2024, since Justice Department policy discourages filings that might affect an election. For the presidential election, that period would likely extend to August 2024. If Smith cannot indict Trump before then, he would run into another long-standing Justice Department policy. The department has long maintained (in my view, incorrectly) that a sitting president cannot be indicted.

If Smith secured a conviction before the election, Trump could still stay on the ballot. Indeed, even if he were jailed, he still could be elected president. After all, Eugene Debs ran for president in 1920 on the Socialist ticket despite being in prison for violating the Espionage Act. Trump literally could run on a promise to self-pardon and then immediately negate any conviction. Indeed, that issue may prove the ultimate anti-establishment rallying point for him. Trump won in 2016 in part because many of his voters wanted to stick it to the media and political elites. So, a charge or conviction before the election could well turn that anti-establishment wave into a tsunami. Of course, Trump could not pardon himself on a state conviction. Moreover, Georgia is one of only three states that do not give pardon authority to the governor; that authority rests with Georgia Board of Pardons and Paroles. (Georgia Gov. Brian Kemp, a Republican who has long been a target of Trump’s ire, may feel relieved to have his authority limited in this instance.)

However, the state could push for changes to negate a conviction or prevent enforcement against a sitting president. To most people, that may seem like an utter mess. For Donald Trump, it is an opportunity. Trump has always found advantage in chaos. That is why, if much of the public continues to view these legal cases as political prosecutions, Democrats may be handing Trump a winning hand. A Washington Post columnist previously declared that Trump has nothing to offer in defense to federal charges. That may or may not be true, but “nothing” could prove a major “something” in an election year. In the film, “Cool Hand Luke,” fellow prisoners asked Paul Newman’s character why he would continually raise the stakes in a poker game when he was holding nothing of value. His reply: “Sometimes nothing can be a real cool hand.”

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“Strzok, who is famous for running an illicit coup on the US president and banging a colleague in the broom closet..”

• Fired FBI Goon Peter Strzok Issues Veiled Death Threat to Donald Trump (GP)

It’s been 30 years since the ATF-FBI siege on the Branch Davidian Compound in Waco, Texas in 1993. The government siege led to a massacre of 76 people including 25 children. The deadly assault on David Koresh’s Branch Davidian compound took place from February 28 through April 19, 1993, over suspected weapons violations. The ATF had attempted to raid the compound and a gun battle ensued, leaving four government agents and six Branch Davidians dead. For the next 50 days, the government would use psychological warfare, such as playing the sound of animals being slaughtered, until ultimately the compound was burned to the ground with nearly everyone still inside.


The siege ended with the massacre of 76 people. On Friday fired FBI agent Peter Strzok posted a veiled death threat against President Trump just hours before his historic rally Saturday in Waco, Texas. Strzok, who is famous for running an illicit coup on the US president and banging a colleague in the broom closet, posted a photo of the government-led massacre at the religious compound in Waco, Texas. Everyone knows it was the feds who were ultimately blamed for this horrible mass killing. And, now Peter Strzok is posting this warning to Trump and his supporters. It is shocking to see today that such an unhinged and unethical monster was sitting at the top level of the FBI!

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Where are Tucker’s 40,000 hours of video?

• Prosecutor Admits DC Police Officers Acted as Provocateurs on Jan. 6 (ET)

A federal prosecutor admitted in court papers that three D.C. Metropolitan Police Department undercover officers acted as provocateurs at the northwest steps of the U.S. Capitol on Jan. 6, 2021. The admission came in a March 24 filing before U.S. District Judge Rudolph Contreras that seeks to keep video footage shot by the officers under court seal. Prosecutors accused the case defendant—William Pope of Topeka, Kansas—of an “illegitimate” attempt to unmask the video as part of his alleged strategy to try the case in the news media. Pope filed a motion to remove the court seal on Feb. 21. [..] Nearly 30 members of the Electronic Surveillance Unit were assigned to duty on Jan. 6, some of whom were gathering evidence on crowd activity. Members wore special bands on their left wrists to identify themselves as part of the Electronic Surveillance Unit, according to the MPD’s 96-page Jan. 6 action plan.

Officer 1 repeatedly joined in chants of “Drain the swamp!” and “Our house! Our house! Our house!” A little closer to the Capitol, the video captures a protester shouting, “Joe Biden! We wanna hear you speak, you [expletive] pedophile satanist [expletive]!” A short time later, Officer 1 joined the crowd in a “USA!” chant, repeating the phrase five times. At the foot of the northwest stairs, someone leaned part of a bicycle rack against the balustrade. As a protester climbed up the makeshift ladder, Officer 1 shouted, “C’mon, man, let’s go! Leave that sh*t.” Officer 1 got help from a protester climbing onto the balustrade of the steps. Then, surveying the people moving up the staircase, he shouted, “C’mon, go, go, go!” Officer 1 encouraged the crowd to move up the stairs with repeated shouts, “Keep going! Keep going!” and “Keep going, keep going, come on!”

Once Officer 1 jumped from the balustrade onto the stairs, he passed someone he knew, a man in a blue sweatshirt wearing a dark cap, protective goggles, and what appeared to be a Halloween mask. “Tim!” the officer said, to which the unidentified man replied, “What’s going on, bro?” Walking on a sidewalk next to the Capitol, Officer 1 hears a protester say, “Now they’re letting everybody in, there ain’t nowhere to go.” Officer 1 replied, “I think it’s gonna…they’re going to trap everyone in.” “This video clearly evidences undercover law enforcement officers urging the crowds to advance up the stairs and scaffolding towards the Capitol on January 6,” Pope wrote in an earlier case filing. “The government may claim that incidents like this did not happen, but the facts show they did.”


Two undercover Metropolitan Police Department officers walk behind Ashli Babbitt on the northwest side of the Capitol on Jan. 6, 2021. One had earlier remarked “someone would get shot.” (William Pope via U.S. District Court/Screenshot via The Epoch Times)

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“..the United States government believes that any American who talked to Assange forfeited their privacy rights under the U.S. Constitution.”

• CIA Says Americans Who Visited Assange Had No Privacy Rights (Gosztola)

The Central Intelligence Agency and former CIA director Mike Pompeo contend that attorneys and journalists, who visited WikiLeaks founder Julian Assange, had no “legitimate expectation of privacy” when it came to conversations with a “notorious wanted fugitive in a foreign embassy.” “There is no plausible argument that it would be unreasonable or indiscriminate for the government to surveil Assange, who oversaw WikiLeaks’ publication of large amounts of U.S. national security information,” the CIA and Pompeo additionally contend. “Thus, any alleged surveillance of Assange that incidentally captured his conversations with U.S. citizens such as plaintiffs would not violate the Fourth Amendment [right to privacy] as a matter of law.”

The statements are part of a motion to dismiss a lawsuit that was brought by a group of Americans, who allege that they were spied on by the CIA when they met with Assange while he was living under political asylum in the Ecuador embassy. When one considers that Assange has been held in detention at Belmarsh prison and faces Espionage Act charges for publishing classified documents, the government is essentially arguing that it may spy on any journalist who publishes such documents and “incidentally capture” the communications of anyone communicating with that particular journalist. The CIA and Pompeo are also making it clear that the United States government believes that any American who talked to Assange forfeited their privacy rights under the U.S. Constitution.

In August 2022, four Americans who visited Assange in the embassy sued the CIA and Pompeo in his individual capacity: Margaret Ratner Kunstler, a civil rights activist and human rights attorney; Deborah Hrbek, a media lawyer, represented Assange or WikiLeaks; journalist John Goetz, who worked for Der Spiegel when the German media organization first partnered with WikiLeaks; and journalist Charles Glass, who wrote articles on Assange for The Intercept. The filed complaint alleged that as visitors Glass, Goetz, Hrbek, and Kunstler were required to “surrender” their electronic devices to employees of a private company called UC Global that was contracted to provide security for the embassy. They did not know that UC Global “copied the information stored on the devices” and allegedly shared the information with the CIA, and that Pompeo allegedly authorized and approved the action.

They further claim, “Security contractors required the attorneys and journalists to leave their devices with them, which contained ‘confidential and privileged information about their sources or clients.’” In the motion to dismiss filed on March 20 by United States Attorney Damian Williams of the Southern District of New York, the government asserts that the attorneys and journalists “cannot show they had a reasonable expectation of privacy with respect to conversations that took place on the property of a foreign embassy located in a foreign country.” The government insists any searches that may have taken place were reasonable or authorized. “Indeed, U.S. citizens who communicate with foreign surveillance targets have diminished Fourth Amendment rights that are easily overcome in the alleged circumstances at issue.”

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Hare

 

 

Horse power

 

 

Head lice

 

 


Schalow’s turaco birds have long white tripped crests with small red beaks and red skin around their dark eyes lined with white feathers. Mature birds have, on average, the longest crests of any turaco species

 

 

Platysternon megacephalum (or big headed turtle) is a very odd-shaped turtle with a huge head and a long tail that are almost the same size as its body.
https://twitter.com/i/status/1639360896085417999

 

 

Otters
https://twitter.com/i/status/1639785211679457283

 

 

 

 

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Debt Rattle June 18 2019

Jun 182019
 
 June 18, 2019  Posted by at 9:38 am Finance Tagged with: , , , , , , , , , ,  8 Responses »


Winslow Homer Camping in the Adirondacks (Wood engraving) 1874

 

• China Warns US Against Opening Mideast ‘Pandora’s Box’ (CNA)
• UN Officials: US Planning A ‘Tactical Assault’ In Iran (JPost)
• The Coming Show Trial of Julian Assange (Chris Hedges)
• Assange Judge Refuses To Recuse Herself Despite Evidence Of Bias (Can.)
• Julian Assange and the Scales of Justice (CP)
• FBI Never Saw CrowdStrike Unredacted or Final Report (McGovern)
• Deep State Players Lash Out At Trump (Noble)
• Swelling US Corporate Debt Raises Risk Of Global Financial Meltdown (Nikkei)
• Who Bought the $1 Trillion of New US Government Debt Over The Past Year? (WS)
• How Japan Turned Against Its ‘Bazooka’-Wielding Central Bank Chief (R.)
• Boeing’s 737 MAX Name Change (F.)
• Investors Demand Higher Premiums For Risky Australian Mortgage Bonds (R.)
• Fiscal Money Can Make or Break the Euro (Varoufakis)

 

 

That is a better term than just about everyone realizes.

• China Warns US Against Opening Mideast ‘Pandora’s Box’ (CNA)

China on Tuesday (Jun 18) warned against opening a “Pandora’s box” in the Middle East after the United States announced the deployment of 1,000 additional troops to the region amid escalating tensions with Iran. Foreign Minister Wang Yi also urged Tehran to not abandon the nuclear agreement “so easily” after Iran said it would exceed its uranium stockpile limit if world powers fail to fulfil their commitments under the agreement in 10 days. Fears of a confrontation between Iran and the United States have mounted since last Thursday when two tankers were attacked. The United States has blamed Iran, more than a year after President Donald Trump withdrew from a 2015 nuclear deal.


Iran has denied having any role in the attacks. The Chinese government’s top diplomat, Wang told reporters at a briefing that China was “of course, very concerned” about the situation in the Gulf, and called on all sides to ease tension and not head towards a clash. “We call on all sides to remain rational and exercise restraint, and not take any escalatory actions that irritate regional tensions, and not open a Pandora’s box,” Wang said. “In particular, the US side should alter its extreme pressure methods. Any unilateral behaviour has no basis in international law,” Wang said, warning that it could create “an even greater crisis”.

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I have my questions about this Jerusalem Post article, but they did publish it.

• UN Officials: US Planning A ‘Tactical Assault’ In Iran (JPost)

Is the US going to attack Iran soon? Diplomatic sources at the UN headquarters in New York revealed to Maariv that they are assessing the United States’ plans to carry out a tactical assault on Iran in response to the tanker attack in the Persian Gulf on Thursday. According to the officials, since Friday, the White House has been holding incessant discussions involving senior military commanders, Pentagon representatives and advisers to President Donald Trump. The military action under consideration would be an aerial bombardment of an Iranian facility linked to its nuclear program, the officials further claimed. “The bombing will be massive but will be limited to a specific target,” said a Western diplomat.


The decision to carry out military action against Iran was discussed in the White House before the latest report that Iran might increase the level of uranium enrichment. The officials also noted that the United States plans to reinforce its military presence in the Middle East, and in the coming days will also send additional soldiers to the area. The sources added that President Trump himself was not enthusiastic about a military move against Iran, but lost his patience on the matter and would grant Secretary of State Mike Pompeo, who is pushing for action, what he wants.

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“We know what will be done to Assange. It has been done to thousands of those we kidnapped and then detained in black sites around the world.”

• The Coming Show Trial of Julian Assange (Chris Hedges)

On Friday morning I was in a small courtroom at Westminster Magistrates’ Court in London. Julian Assange, held in Belmarsh Prison and dressed in a pale-blue prison shirt, appeared on a video screen directly in front of me. Assange, his gray hair and beard neatly trimmed, slipped on heavy, dark-frame glasses at the start of the proceedings. He listened intently as Ben Brandon, the prosecutor, seated at a narrow wooden table, listed the crimes he allegedly had committed and called for his extradition to the United States to face charges that could result in a sentence of 175 years. The charges include the release of unredacted classified material that posed a “grave” threat to “human intelligence sources” and “the largest compromises of confidential information in the history of the United States.” After the prosecutor’s presentation, Assange’s attorney, Mark Summers, seated at the same table, called the charges “an outrageous and full-frontal assault on journalistic rights.”

The publication of classified documents is not a crime in the United States, but if Assange is extradited and convicted it will become one. Assange is not an American citizen. WikiLeaks, which he founded and publishes, is not a U.S.-based publication. The message the U.S. government is sending is clear: No matter who or where you are, if you expose the inner workings of empire you will be hunted down, kidnapped and brought to the United States to be tried as a spy. The extradition and trial of Assange will mean the end of public investigations by the press into the crimes of the ruling elites. It will cement into place a frightening corporate tyranny. Publications such as The New York Times and The Guardian, which devoted pages to the WikiLeaks revelations and later amplified and legitimized Washington’s carefully orchestrated character assassination of Assange, are no less panicked. This is the gravest assault on press freedom in my lifetime.

[..] We know what will be done to Assange. It has been done to thousands of those we kidnapped and then detained in black sites around the world. Sadistic and scientific techniques of torture will be used in an attempt to make him a zombie. Assange, in declining health, was transferred two weeks ago to the hospital wing of the prison. Because he was medically unable to participate when the hearing was initially to be held, May 30, the proceeding was reset. Friday’s hearing, in which he appeared frail and spoke hesitantly, although lucidly, set the timetable for his extradition trial, scheduled to take place at the end of February. All totalitarian states seek to break their political prisoners to render them compliant. This process will define Assange’s existence over the next few months.

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“her husband had been exposed by WikiLeaks”

• Assange Judge Refuses To Recuse Herself Despite Evidence Of Bias (Can.)

UN Rapporteur on Torture Nils Melzer told US journalist Chris Hedges that Lady Arbuthnot “has a strong conflict of interest” and that “her husband had been exposed by WikiLeaks”. Hedges adds that Assange’s lawyers have asked the judge “to recuse herself”, but that “she has refused”. However, Lady Arbuthnot was forced to recuse herself in August 2018 after an investigation by the Observer into her husband’s business dealings with Uber. The judge ruled in favour of Uber but stepped down from the case when it was shown that SC Strategy’s client the QIA had taken a stake in Uber.


And there are other precedents. For example, retired high court judge Lady Butler-Sloss was forced to resign as chair of the panel tasked with examining allegations of child abuse within institutions. This was after she admitted to a family conflict of interest (Sir Michael Havers, her brother, was attorney-general during the period when most of the alleged abuse occurred). Given the evidence relating to her family background, it may be time for Lady Arbuthnot to recuse herself once more, and for the extradition proceedings to be halted.

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Did the US overplay its hand?: “Each of Assange’s possible defences are strengthened by the 17 counts of espionage”

• Julian Assange and the Scales of Justice (CP)

Massimo Moratti, Amnesty International’s Deputy Director for Europe, is certain that the Wikileaks publisher will suffer grave mistreatment if extradited to the United States. “The British government must not accede to the US extradition request for Julian Assange as he faces a real risk of serious human right violations if sent there.” This will further add substance to the potential breach of Article 3 of the Human Rights Convention, a point reiterated by Agnes Callamard, Special rapporteur on extra-judicial executions. Ecuador, she argues, permitted Assange to be expelled and arrested by the UK, taking him a step closer to extradition to the US which would expose him to “serious human rights violations.” The UK had “arbitrary [sic] detained Mr Assange possibly endangering his life for the last 7 years.”

On May 31, Nils Melzer, UN Special Rapporteur on torture, concluded after visiting Assange in detention that the publisher’s isolation and repeated belittling constituted “progressively severe forms of cruel, inhuman or degrading treatment or punishment, the cumulative effects of which can only be described as psychological torture.” The issue of Assange’s failing health is critical. An important feature of his legal team’s argument is the role played by the UK authorities in ensuring his decline in physical and mental terms. The argument in rebuttal, disingenuous as it was, never deviated: you will get treatment as long as you step out of the Ecuadorean embassy.

There is also another dimension which the distracted Javid failed to articulate: the sheer political character of the offences Assange is being accused of. Espionage is a political offence par excellence, and the UK-US extradition treaty, for all its faults, retains under Article 4 the prohibition against extraditing someone accused of political offences, including espionage, sedition, and treason. As John T. Nelson notes in Just Security, “Each of Assange’s possible defences are strengthened by the 17 counts of espionage”.

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They never finished the report.

• FBI Never Saw CrowdStrike Unredacted or Final Report (McGovern)

CrowdStrike, the controversial cybersecurity firm that the Democratic National Committee chose over the FBI in 2016 to examine its compromised computer servers, never produced an un-redacted or final forensic report for the government because the FBI never required it to, the Justice Department has admitted. The revelation came in a court filing by the government in the pre-trial phase of Roger Stone, a long-time Republican operative who had an unofficial role in the campaign of candidate Donald Trump. Stone has been charged with misleading Congress, obstructing justice and intimidating a witness. The filing was in response to a motion by Stone’s lawyers asking for “unredacted reports” from CrowdStrike in an effort to get the government to prove that Russia hacked the DNC server.

“The government … does not possess the information the defandant seeks,” the filing says. In his motion, Stone’s lawyers said he had only been given three redacted drafts. In a startling footnote in the government’s response, the DOJ admits the drafts are all that exist. “Although the reports produced to the defendant are marked ‘draft,’ counsel for the DNC and DCCC informed the government that they are the last version of the report produced,” the footnote says. In other words CrowdStrike, upon which the FBI relied to conclude that Russia hacked the DNC, never completed a final report and only turned over three redacted drafts to the government. These drafts were “voluntarily” given to the FBI by DNC lawyers, the filing says.

“No redacted information concerned the attribution of the attack to Russian actors,” the filing quotes DNC lawyers as saying. In Stone’s motion his lawyers argued: “If the Russian state did not hack the DNC, DCCC, or [Clinton campaign chairman John] Podesta’s servers, then Roger Stone was prosecuted for obstructing a congressional investigation into an unproven Russian state hacking conspiracy … The issue of whether or not the DNC was hacked is central to the Defendant’s defense.” The DOJ responded: “The government does not need to prove at the defendant’s trial that the Russians hacked the DNC in order to prove the defendant made false statements, tampered with a witness, and obstructed justice into a congressional investigation regarding election interference.”

At a time of high tension in the 2016 presidential campaign, when the late Sen. John McCain and others were calling Russian “hacking” an “act of war,” the FBI settled for three redacted “draft reports” from CrowdStrike rather than investigate the alleged hacking itself, the court document shows. Then FBI Director James Comey admitted in congressional testimony that he chose not to take control of the DNC’s “hacked” computers, and did not dispatch FBI computer experts to inspect them, but has had trouble explaining why. In his testimony, he conceded that “best practices” would have dictated that forensic experts gain physical access to the computers. Nevertheless, the FBI decided to rely on forensics performed by a firm being paid for by the DNC.

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Hmmm: “For a campaign to hire a law firm, an American law firm who then turns around and hires an American research company that then contracts out with a foreign individual, that is not illegal.”

• Deep State Players Lash Out At Trump (Noble)

When ABC’s George Stephanopoulos asked Trump whether his son, Donald Trump Jr., should have contacted the FBI after being invited in 2016 to meet with a Russian national who allegedly offered dirt on Hillary Clinton, the president answered, “Give me a break – life doesn’t work that way.” The ensuing exchange led Stephanopoulos to ask the president: “Your campaign this time around, if foreigners, if Russia, if China, if someone else offers you information on opponents, should they accept it or should they call the FBI?” Trump responded that, perhaps, the person in question should do both; look at the information being offered and notify the FBI. Stephanopoulos suggested this amounts to foreign interference in an American election, to which Trump responded: “It’s not an interference [sic]. They have information – I think I’d take it. If I thought there was something wrong, I’d go maybe to the FBI – if I thought there was something wrong.”

The wailing and gnashing of teeth that followed this interview prompted the anti-Trump cable networks to bring in two men who were embroiled in the Russia collusion hoax. One of these men, Andrew McCabe, was fired from the FBI and is fortunate not to have yet been charged with multiple counts of lying to federal investigators. The other is hysterical Trump critic Brennan, who is almost certainly a subject of the ongoing Department of Justice investigation into the genesis of the Russia collusion conspiracy theory. McCabe feigned horror at the idea that the president would be open to receiving information on a potential election opponent from a foreign source.

At the same time, however, he dismissed the idea that the Hillary Clinton campaign had done anything wrong in 2016 when it paid for Russian-sourced and unverified information to use against Trump. When asked by CNN’s Chris Cuomo about a possible analogy between the two situations, the former FBI official said: “There’s no equivalence between those two examples … For a campaign to hire a law firm, an American law firm who then turns around and hires an American research company that then contracts out with a foreign individual, that is not illegal.”

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Credit is cyclical.

• Swelling US Corporate Debt Raises Risk Of Global Financial Meltdown (Nikkei)

Surging U.S. business debt, already at historic levels, is posing a potentially huge risk for the global financial system and the world economy, raising concerns among market players and policymakers. Experts are growing increasingly uneasy about both the quality and quantity of debt in the U.S. corporate sector as the amount of loans to borrowers with lower credit ratings and already high levels of debt is increasing. A newly created index shows corporate debt levels are now even higher than before the dot-com bubble or the global financial crisis triggered by the 2008 collapse of U.S. investment bank Lehman Brothers.

Some experts warn that the ticking debt bomb in the U.S. corporate sector could eventually explode, triggering a new global financial meltdown. In a speech delivered on May 20, Federal Reserve Chairman Jerome Powell sounded the alarm about rising levels of business debt, although he dismissed comparisons between the current situation and the conditions in U.S. mortgage markets before the financial crisis. Views about the risks from rising corporate borrowing “range from ‘This is a return to the subprime-mortgage crisis’ to ‘Nothing to worry about here,'” Powell said. “At the moment, the truth is likely somewhere in the middle.”

One important concept for understanding the implications of corporate America’s borrowing binge for the financial system and the world economy is the credit cycle — the cyclical expansion and contraction of access to credit over time. Many policymakers and market players are beginning to fear that the U.S. corporate credit cycle is approaching its peak and will soon enter a phase of contraction.

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“.. Investors, mostly US institutional and individual investors but also some foreign investors, have gone nuts over it..”

• Who Bought the $1 Trillion of New US Government Debt Over The Past Year? (WS)

The US gross national debt soared by $960 billion over the 12-month period through April. Over the same period, all foreign investors combined increased their holdings by $253 billion. This leaves $707 billion that someone else must have bought. Who? Nope, not the Fed. It shed $271 billion in Treasury securities over the 12 months as part of its QE unwind, bringing its holdings down to $2.12 trillion by the end of April. US government entities piled on $102 billion in Treasury securities over the 12 months, bringing their total to $5.83 trillion. This “debt held internally” is held by government pension and disability funds, the Social Security Trust Fund, etc., that have invested their beneficiaries’ money in Treasury securities, rather than stocks or other instruments.

This “debt held internally” is owed the beneficiaries of those funds and is a real debt of the US government. To summarize: Over the 12 months, foreign investors added $253 billion; the Fed got rid of $271 billion; and US government funds acquired $102 billion. All three combined, accounted for a net increase of Treasury holdings of $84 billion. But the total gross national debt soared by $960 billion over the same period. Someone must have bought the remaining $876 billion. But who? The only one left… American institutions and individuals added $876 billion of Treasuries to their holdings, bringing them to $7.64 trillion.


US banks held nearly $500 billion of them, according to the FDIC. Other US institutional holders include pension funds, mutual funds, hedge funds, corporations such as Apple, and others. Individuals also hold a portion of these Treasury securities, either indirectly via bond funds or pension funds, or directly via their brokers or at Treasury. All combined, American institutions and individuals held 34.7% of the US gross national debt. Ironically, there is no shortage of demand for this debt – despite the charade of the debt-ceiling-default threat hanging over it. On the contrary. Investors, mostly US institutional and individual investors but also some foreign investors, have gone nuts over it, bidding up prices and thereby pushing down yields, with the 10-year yield today settling at 2.09%.

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Kuroda’s as clueless and delusional as Draghi and Powell.

• How Japan Turned Against Its ‘Bazooka’-Wielding Central Bank Chief (R.)

Convincing skeptics on the board to embrace negative rates wasn’t easy, according to previously unreported accounts of the events on that fateful night. The policy had been studied for years in Japan but shunned as too controversial. On the brown-carpeted eighth floor of the BOJ building, bank bureaucrats visited the offices of swing voters on the board to make the case. A dashboard on the eighth floor lights up in red to show whenever a board member has visitors. That night, the lights stayed on “for hours and hours for some of them,” one person said. “You could see there was heavy lobbying going on.”

The shift to negative rates carried by a narrow 5-4 vote. Almost immediately, it was clear within the BOJ that the move was a mistake. It crushed long-term interest rates, didn’t weaken the yen as hoped and angered commercial bankers, who felt blindsided by a policy that crimped their profits. In retrospect, the move marked the death knell of “Kuroda-nomics,” as the governor’s plan for reflating the Japanese economy became known. In the most detailed account of these efforts, reported here, BOJ technocrats went to work tip-toeing back Kuroda’s radical program.

Three years on, there is a broad consensus that Japan’s experiment in shock-and-awe monetary policy has failed. An intense debate is under way within the BOJ over why Kuroda’s assumptions about how he could fundamentally change the trajectory of the economy proved wrong and what the bank’s next steps should be. The picture that emerges is of a central bank under pressure and at a moment of reckoning.

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Yeah, that will work…

• Boeing’s 737 MAX Name Change (F.)

Boeing doesn’t have any immediate plans to rename its embattled 737 MAX aircraft despite CFO Greg Smith saying he was open to the idea earlier Monday. In an interview with Bloomberg at the Paris airshow, Smith said, “We’re committed to doing what we need to do to restore it. If that means changing the brand to restore it, then we’ll address that.” After the interview, the company told Reuters it isn’t currently working on a name change at the moment. “Our immediate focus is the safe return of the Max to service and re-earning the trust of airlines and the traveling public. We remain open minded to all input from customers and other stakeholders, but have no plans at this time to change the name of the 737 MAX,” said Boeing spokesman Paul Bergman.


The idea for a name change comes from President Donald Trump, who weighed in on Boeing’s myriad safety and public relations issues in March. “What do I know about branding, maybe nothing (but I did become President!), but if I were Boeing, I would FIX the Boeing 737 MAX, add some additional great features, & REBRAND the plane with a new name,” he tweeted. All 737s are still grounded: All 371 Boeing 737 MAX planes were grounded worldwide in March following two deadly crashes that claimed 346 lives. Investigators are focusing on design flaws in a component of the plane’s automated flight controls called the maneuvering characteristics augmentation system, or MCAS. Boeing said last month that it has completed the software update necessary to address the aircraft’s safety issues, but the Federal Aviation Administration still has to approve the change.

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Not a good sign.

• Investors Demand Higher Premiums For Risky Australian Mortgage Bonds (R.)

Investors in Australian mortgage bonds are demanding higher premiums to buy the riskiest tranches of new debt, as a slowing economy stokes concerns a property downturn could get worse and increase home loan defaults. High-yield investors are receiving up to 40 basis points more than they were last year to buy the lower-rated and unrated portions, according to an analysis of recent deals by large lenders including AMP, National Australia Bank and Members Equity Bank. That marks an important shift from a near decade-long run of relatively stable spreads for the lower-rated residential mortgage backed securities (RMBS), as the previously red-hot property prices have turned sharply lower, particularly in the major Sydney and Melbourne markets.


“When you are looking at those lower unrated tranches, they are deteriorating as one would expect at the late stage of the [property] cycle,” said George Boubouras, chief investment officer at Atlas Capital. “We see them as a leading indicator of risk, and they have been getting riskier.” Home prices in Australia’s heavily populated eastern states have fallen rapidly since late-2017 due to souring economic conditions, pushing problem home loans to their highest level since the aftermath of the global financial crisis, according to Standard & Poor’s.

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Varoufakis explains the difference between his plans and those of Salvini. Not the easiest topic, but interesting.

• Fiscal Money Can Make or Break the Euro (Varoufakis)

It’s a curious feeling to watch your plan being deployed to do the opposite of what you intended. And that’s the feeling I’ve had since learning that Italy’s government is planning a variant of the fiscal money that I proposed for Greece in 2015. My idea was to establish a tax-backed digital payment system to create fiscal space in eurozone countries that needed it, like Greece and Italy. The Italian plan, by contrast, would use a parallel payment system to break up the eurozone. Under my proposal, each tax file number, belonging to individuals or firms, would be automatically provided with a Treasury Account (TA) and a PIN number with which to transfer funds from one TA to another, or back to the state.

One way TAs would be credited was by paying arrears into them. Taxpayers owed money by the state could opt for part or all of those arrears to be paid into their TA immediately, instead of waiting for months to be paid normally. That way, multiple arrears could be eliminated at once, thus liberating liquidity across the economy. For example, suppose Company A is owed €1 million ($1.1 million) by the state, while owing €30,000 to an employee and another €500,000 to Company B. Suppose also that the employee and Company B owe, respectively, €10,000 and €200,000 in taxes to the state. If the €1 million is credited by the state to Company A’s TA, and Company A pays the employee and Company B via the system, the latter will be able to settle their tax arrears. At least €740,000 in arrears will have been eliminated in one fell swoop.

Individuals or firms could also acquire TA credits by purchasing them directly, via web-banking, from the state. The state would make it worth their while by offering buyers significant tax discounts (a €1 credit purchased today could extinguish taxes of, say, €1.10 a year from now). In essence, a new dis-intermediated (middlemen-free) public debt market would emerge, allowing the state to borrow small, medium, and large sums from the private sector in exchange for tax discounts. When I first discussed the idea, staunch defenders of the status quo immediately challenged the legality of the proposed system, arguing that it violated the treaties establishing the euro as the sole legal tender. Expert advice that I had received, however, indicated that the system passed legal muster. A eurozone member state’s treasury has the authority to issue debt instruments at will, and to accept them in lieu of taxes.

Read more …

 

 

 

 

 

Debt Rattle December 17 2018

Dec 172018
 
 December 17, 2018  Posted by at 10:37 am Finance Tagged with: , , , , , , , , , , , ,  7 Responses »


Arnold Böcklin The Isle of Life 1888

 

• Market Meltdown Could Spark Conditions ‘Worse Than 1929’- Ron Paul (CNBC)
• For The First Month Since 2008, Not A Single Junk Bond Prices (ZH)
• Starvation, Homelessness And More REAL Problems Pushed Aside By Brexit (Mi.)
• Average UK Home Asking Price Dips £10,000 From October (G.)
• No 10 Denies Making Plans For Second Brexit Referendum (G.)
• May To Urge MPs Not To ‘Break Faith’ By Demanding People’s Vote (G.)
• Saudi Arabia Rejects US Senate ‘Interference’ In Kingdom’s Affairs (AFP)
• Turkey FM Says Saudis ‘Didn’t Share Anything’ On Khashoggi Murder (CNBC)
• Turkey FM: Washington Is ‘Working On’ Gulen Extradition (CNBC)
• US Ready To Fight To Last Brit (Garrison)
• Trump Will Sit Down With Mueller ‘Over My Dead Body’ – Giuliani (Ind.)
• FBI, CIA Told WaPo They Doubted Key Allegation In Steele Dossier (ZH)
• Guardian Most Trusted Newspaper In Britain – Report (G.)

 

 

We’re just waiting for leveraged loans to go Poof.

• Market Meltdown Could Spark Conditions ‘Worse Than 1929’- Ron Paul (CNBC)

Ron Paul is warning this year’s corrections could be a precursor to an epic market collapse that may come sooner than investors think. According to the former Republican presidential candidate, Wall Street is becoming more vulnerable to near-depression conditions within the next 12 months. “Once this volatility shows that we’re not going to resume the bull market, then people are going to rush for the exits,” Paul said Thursday on CNBC’s “Futures Now.” The relentlessly bearish former congressman added that “It could be worse than 1929.” During that year, the stock market began hemorrhaging, falling almost 90 percent and sending the U.S. economy into a tailspin.

Paul, a well-known Libertarian, has been warning Wall Street a massive market plunge is inevitable for years. He’s currently projecting a 50 percent decline from current levels as his base case, citing the ongoing U.S.-China trade war as a growing risk factor. “I’m not optimistic that all of the sudden, you’re going to eliminate the tariff problem. I think that’s here to stay,” he said. “Tariffs are taxes.” The scenario is exacerbating Paul’s chief reason behind his bearish call: 2008 financial crisis easy money policies. He contended the Federal Reserve’s quantitative easing has caused the “biggest bubble in the history of mankind.” “It’s so important to understand the original cause of the problem, and that is the Federal Reserve running up debt and letting politicians spend money,” he added.

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Damn vigilantes!

• For The First Month Since 2008, Not A Single Junk Bond Prices (ZH)

Late last week, we reported that in the aftermath of a dramatic drop in loan prices, a record outflow from loan funds, and a general collapse in investor sentiment that was euphoric as recently as the start of October, the wheels had come off the loan market which was on the verge of freezing after we got the first hung bridge loan in years, after Wells Fargo and Barclays took the rare step of keeping a $415 million leveraged loan on their books after failing to sell it to investors. The two banks now “plan” to wait until January – i.e., hope that yield chasing desperation returns – to offload the loan they made to help finance Blackstone’s buyout of Ulterra Drilling Technologies, a company that makes bits for oil and gas drilling.

The reason the banks were stuck with hundreds of millions in unwanted paper is because they had agreed to finance the bridge loan whether or not there was enough demand from investors, as the acquisition needed to close by the end of the year. The delayed transaction means the banks will have to bear the risk of the price of the loans falling further, as well as costs associated with holding loans on their books. The pulled Ulterra deal wasn’t alone. As we reported previously, in Europe the market appears to have already locked up, as three loans were scrapped over the last two weeks. To wit, movie theater chain Vue International withdrew a 833 million pound-equivalent ($1.07 billion) loan sale.

While the deal was meant to mostly refinance existing debt, around 100 million pounds was underwritten to finance the company’s acquisition of German group CineStar. More deals were pulled the prior week when diversified manufacturer Jason Inc. became at least the fourth issuer to scrap a U.S. leveraged loan. Additionally, Perimeter Solutions also pulled its repricing attempt, Ta Chen International scrapped a $250MM term loan set to finance the company’s purchase of a rolling mill, and Algoma Steel withdrew its $300m exit financing. Global University System in November also dropped its dollar repricing.

[..] the FT picks up on the fact that the junk bond market – whether in loans or bonds – has frozen up, and reported that US credit markets have “ground to a halt” with fund managers refusing to fund buyouts and investors shunning high-yield bond sales as rising interest rates and market volatility weigh on sentiment (ironically it is the rising rates that assure lower rates as financial conditions tighten and the Fed is forced to resume easing in the coming year, that has been a major hurdle to floating-rate loan demand as the same higher rates that pushed demand for paper to all time highs are set to reverse). Meanwhile, things are even worse in the bond market, where not a single company has borrowed money through the $1.2tn US high-yield corporate bond market this month according to the FT. If that freeze continues until the end of the month, it would be the first month since November 2008 that not a single high-yield bond priced in the market

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“About a third of all kids are in “Dickensian” poverty.”

• Starvation, Homelessness And More REAL Problems Pushed Aside By Brexit (Mi.)

I watched the ultimate damp squib -my friend’s mum says squid but I m pretty sure it’s squib- as it unfolded on Wednesday night. Theresa May had it confirmed that only 117 of her own MPs hate her. So, on she limps. She said she was going anyway but won’t say when -maybe not today, maybe not tomorrow, but soon and for the rest of our lives. In the process she revealed what this is really all about. Brexit must be delivered at all costs and it must be HER that does it. If not, she slinks off into the night with a legacy that adds up to nothing.

I watched it in one of the House of Commons bars with a friend of mine from Scotland. Good bloke. Hibs fan.And as we watched the ‘drama’ unfold we were talking about the real problems in the country. His mate helps direct people to foodbanks in Scotland. In one afternoon they saw five families, hungry and without food, seek help. Five different families. A mixture of out-of-work and in-work poverty. And across these five families there were 27 children. That is, in 2018, in Britain, 27 children going to bed hungry each night. It gets, as you can imagine, worse. One of the kids couldn’t go to school. Not through illness, mercifully, but because he didn’t have any shoes. One of the mums hadn’t eaten for three days. Three days without food. Starving so she could feed her kids.

There are lots more stories like this, about 4.1 million, in fact. About a third of all kids are in “Dickensian” poverty. In Britain, in the winter, in 2018. About 1.9 million pensioners live the same way. Last winter 94 people died on Scotland’s streets. Universal Credit has hit so hard some are turning to prostitution, others are eating out of bins. What happened this week is not going to make any of that better. Look at Scotland. Everything is viewed through the prism of independence and talk of a “second independence referendum”. That is the central aim of the Scottish National Party, so you can’t blame them for concentrating on it. But what it means is that, in the real world, people suffer. [..] here’s the thing about parliamentary sovereignty, and backstops, and Brexit, and independence, and the future of the Union: You can’t eat them.

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Only fools would buy homes in the UK right now. But yeah, there are lots of those over there.

• Average UK Home Asking Price Dips £10,000 From October (G.)

Asking prices for homes coming on to the market in the UK are nearly £10,000 lower than they were in October, as the property market headed for its worst annual performance in almost a decade. The average asking price of a UK home dipped by 3.2%, or £9,719, between October and December to £297,527, according to the property website Rightmove, with prices dipping 1.7% and 1.5% in November and December respectively. A softening of prices at the end of 2018 meant that asking prices rose by just 0.7% over the year as a whole, the weakest rate of growth since 2010. The traditional hotspots of London and south-east England became the weakest spots this year, recording the biggest annual falls in asking prices.

This followed a 1% rise in UK asking prices in 2017. Rightmove is predicting zero growth in UK prices in 2019, against a backdrop of stretched affordability and Brexit uncertainty. The property market is a cornerstone of the British economy and drives a large proportion of consumer spending, from DIY to carpets and furniture. But with buyers and sellers reluctant to pay the current market prices, especially in the east and south of England where prices have rocketed in recent years, analysts expect the difficult conditions to radiate out from the property market to other areas of spending. And while a slowdown in prices will be welcomed by younger buyers and those on lower incomes, any falls in values are expected to add the pressure on MPs to agree a Brexit deal.

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That can’t NOT do it.

• No 10 Denies Making Plans For Second Brexit Referendum (G.)

Theresa May will summon EU27 ambassadors to No 10 this week as she continues to seek reassurances over the Irish backstop, with Downing Street vehemently denying drawing up contingency plans for a second referendum. The education secretary, Damian Hinds, said on Sunday: “Government policy couldn’t be clearer. We are here to act on the will of the people clearly expressed in the referendum.” He added: “A second referendum would be divisive. We had the people’s vote, we had the referendum, and now we’ve got to get on with implementing it. Any idea that having a second referendum now would break through an impasse is wrong. It might postpone the impasse, but then it would extend it.”

May attacked the former Labour prime minister Tony Blair this weekend for advocating a second vote, saying: “There are too many people who want to subvert the process for their own political interests rather than acting in the national interest. “For Tony Blair to go to Brussels and seek to undermine our negotiations by advocating for a second referendum is an insult to the office he once held and the people he once served.” The prime minister appears determined to pursue her strategy of seeking legal guarantees on the backstop and then putting her deal to MPs after Christmas. She is sending the government’s most senior legal officer, Jonathan Jones, to Brussels this week.

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As millions of her people starve, May focuses on her legacy.

• May To Urge MPs Not To ‘Break Faith’ By Demanding People’s Vote (G.)

Theresa May will urge MPs on Monday not to “break faith with the British people” by demanding a second referendum, as she faces intense pressure to give parliament a say on Brexit before Christmas. The prime minister will make a statement to MPs on last week’s European council summit in Brussels, from which she returned with little evidence of progress in securing legal reassurances on the Irish backstop. Jeremy Corbyn will take the opportunity to call on her to hold a vote on her Brexit deal this week, and senior Labour figures refuse to rule out an imminent no-confidence motion if she fails to do so. May, however, will use her appearance at the dispatch box to strongly reject the idea of a second referendum after Downing Street was forced to deny reports on Sunday that some of her key aides were secretly considering the idea.

“Let us not break faith with the British people by trying to stage another referendum,” the prime minister will tell MPs. “Another vote which would do irreparable damage to the integrity of our politics, because it would say to millions who trusted in democracy, that our democracy does not deliver. Another vote which would likely leave us no further forward than the last.” Her message is aimed partly at Conservative MPs, and some ministers, who have become increasingly convinced that a referendum is the only way out of the impasse at Westminster after the prime minister abruptly pulled plans for a vote on her deal last week. She also faces growing demands from within cabinet to present MPs with alternatives in non-binding indicative votes that might help to find options that could command a majority.

[..] May’s reluctance to hold a second referendum put her in rare agreement with her former foreign secretary, Boris Johnson. In his column in Monday’s Telegraph, he said the public would be “utterly infuriated” if Britain were to be put through the “misery and expense” of another referendum. However, the former Labour foreign secretary Margaret Beckett said: “It is highly significant that Downing Street felt it had to issue these advance extracts of Theresa May’s statement to the House of Commons on Sunday night, because officials know the prospect of a people’s vote is being discussed, not just in Westminster, but in the corridors of Whitehall, too. “The case for the public being given the final say is becoming so overwhelming that people from all parties, and of none, now recognise that this is the best way forward for our country.”

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They’re only too happy when the interference benefits them., as it has for many decades.

• Saudi Arabia Rejects US Senate ‘Interference’ In Kingdom’s Affairs (AFP)

Saudi Arabia has rejected as “interference” a US Senate resolution to end American military support for a Riyadh-led war in Yemen, and another holding its crown prince responsible for the murder of Saudi journalist Jamal Khashoggi. “The Kingdom of Saudi Arabia rejects the position expressed recently by the United States Senate, which was based upon unsubstantiated claims and allegations, and contained blatant interferences in the Kingdom’s internal affairs, undermining the Kingdom’s regional and international role,” the statement carried by Saudi Press Agency on Sunday said.

“The Kingdom hopes that it is not drawn into domestic political debates in the United States of America, to avoid any ramifications on the ties between the two countries that could have significant negative impacts on this important strategic relationship.” On Thursday, the US Senate passed a resolution calling for an end to American military support to the Saudi-led coalition in the Yemen war, and asserted Congress’s right to decide on matters of war and peace. The measure, which passed by 56 votes to 41, marked the first time the Senate had invoked the 1973 War Powers Resolution to seek to curb the power of the president to take the US into an armed conflict. It marked a significant bipartisan rebuke to the Trump administration, which lobbied intensively against it.

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Maybe the US Senate can ask where the body is.

• Turkey FM Says Saudis ‘Didn’t Share Anything’ On Khashoggi Murder (CNBC)

Turkey still hasn’t received actionable information on the murder of Saudi journalist Jamal Khashoggi, its foreign minster Mevlut Cavusoglu told CNBC Sunday. “So far we haven’t been provided any information from the ongoing investigation in Saudi Arabia. Their chief prosecutor got everything from us, he didn’t share anything with us. We want a transparent, credible, swift investigation on Saudi side as well,” Cavusoglu told the network’s Hadley Gamble at the annual Doha Forum in Qatar. The minister has previously vowed to get to the bottom of the case and hold those responsible to account. [..] Among the many questions remaining unanswered is that of the whereabouts of Khashoggi’s remains.

“We don’t know where the body is,” the minister said. “This is the main question – we need to find out. They said they had local collaborators; they haven’t provided the names of collaborators.” [..] Meanwhile, Cavusoglu said Saudi officials have listened to tapes of Khashoggi’s murder, contradicting earlier statements by Saudi foreign minister Adel al Jubeir that the Saudis had not heard them. [..] “You can hear very clearly that they planned in advance to kill him,” Cavusoglu said, reminding the audience that a forensic expert had been brought into the consulate to cut Khashoggi’s body apart. “From the beginning we’ve been willing to cooperate with Saudi Arabia as well, since all these perpetrators came from Saudi Arabia and now they are arrested there and we accepted immediately the proposal coming from them for cooperation with our prosecutors.”

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If true, that would be a really bad thing.

• Turkey FM: Washington Is ‘Working On’ Gulen Extradition (CNBC)

Ankara and Washington have discussed the extradition of Turkish cleric Fethullah Gulen from the United States, Turkey’s foreign minister told CNBC Sunday. Turkey’s government has demanded Gulen’s return since the failed Turkish coup of 2016, which it accuses the cleric of orchestrating. “Last time when they met in Buenos Aires, Trump told Erdogan that they have been working on that, but we need to see concrete steps because it’s been already two years, almost three years,” Mevlut Cavusoglu told CNBC’s Hadley Gamble at the Doha Forum on Sunday. A former ally of President Recep Tayyip Erdogan, Gulen has lived in self-imposed exile in the U.S. for nearly 20 years.

He denies any involvement in the coup attempt, which saw rogue Turkish military personnel commandeer helicopters, jets and tanks, attack parliament and seize television stations. Political analysts suspected Trump might use Gulen as a bargaining chip in exchange for Turkish compliance in the scandal of Jamal Khashoggi. [..] But Trump told press last month that he was not considering extraditing the preacher to meet those ends.

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Ann Garrison interviews George Szamuely, a Hungarian-born scholar and Senior Research Fellow at London’s Global Policy Institute.

• US Ready To Fight To Last Brit (Garrison)

GS: Well, of course Ukraine can ask for anything it likes. There’s no way in the world Turkey would try to stop Russian ships going through the Bosporus Strait. That would be a violation of the 1936 Montreux Convention and an act of war on the part of Turkey. It isn’t going to happen. As for the Kerch Strait, it is Russian territorial water. Ukraine is free to use it and has been doing so without incident since 2014. The only thing the Russians insist on is that any ship going through the strait use a Russian pilot. During the recent incident, the Ukrainian tug refused to use a Russian pilot. The Russians became suspicious, fearing that the Ukrainians were engaged in a sabotage mission to blow up the newly constructed bridge across the strait. You’ll remember that an American columnist not so long ago urged the Ukrainian authorities to blow up the bridge. That’s why the Russians accuse Kiev of staging a provocation.

AG: There’s a longstanding back channel between the White House and the Kremlin, as satirized in Dr. Strangelove. Anti-Trump fanatics keep claiming this is new and traitorous, but it’s long established. Obama and Putin used it to keep Russian and US soldiers from firing on one another instead of the jihadists both claimed to be fighting in Syria. Kennedy and Khrushchev used it to keep the Bay of Pigs crisis from escalating into a nuclear war. Shouldn’t Trump and Putin be talking on that back channel now, no matter how much it upsets CNN and MSNBC?

GS: Well, of course, they should. The danger is that in this atmosphere of anti-Russian hysteria such channels for dialogue may not be kept open. As a result, crises could escalate beyond the point at which either side could back down without losing face. What’s terrifying is that so many US politicians and press now describe any kind of negotiation, dialogue, or threat-management as treasonous collusion by Donald Trump.

Remember Trump’s first bombing in Syria in April 2017. Before he launched that attack, Trump administration officials gave advance warning to the Russians to enable them to get any Russian aircraft out of harm’s way. This perfectly sensible action on the part of the administration—leave aside the illegality and stupidity of the attack—was greeted by Hillary Clinton and the MSNBC crowd as evidence that the whole operation was cooked up by Trump and Putin to take attention off Russia-gate. It’s nuts.

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Why would there be a sit down with so much water under the bridge? What are the odds that Mueller would be impartial?

• Trump Will Sit Down With Mueller ‘Over My Dead Body’ – Giuliani (Ind.)

Donald Trump will sit and talk to special counsel Robert Mueller “over my dead body”, his lawyer Rudy Giuliani has said, in the latest pushback against the investigation into possible collusion between the president’s election campaign and Moscow. As Mr Trump called his former personal lawyer Michael Cohen “a rat” for cooperating with the FBI, Mr Giuliani made clear Mr Mueller would not be offered an interview with the president. Mr Trump recently provided Mr Mueller’s team written answers to a series of questions, but on Friday CNN said the special prosecutor was still interested in an in-person interview. “Nothing has changed in that sense from the first day,” said a source.

Mr Giuliani, the former New York mayor who now serves as the president’s personal lawyer, on Sunday again firmly pushed back at such a notion. Asked on Fox News whether Mr Trump would take part in an interview, Mr Giuliani said: “Yeah, good luck, good luck – after what they did to [Michael] Flynn, the way they trapped him into perjury, and no sentence for him.” He added: “Over my dead body. But you know, I could be dead.” Mr Giuliani also attacked Mr Mueller’s investigation, saying the probe was a “joke”. “I am disgusted with the tactics they have used in this case,” he said. “What they did to Gen Flynn should result in discipline. They’re the ones who violated the law. They’re looking at a non-crime, collusion.”

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And WaPo declined to follow up on it. That’s American media for you.

• FBI, CIA Told WaPo They Doubted Key Allegation In Steele Dossier (ZH)

FBI and CIA sources told a Pulitzer Prize-winning Washington Post reporter that they didn’t believe a key claim contained in the “Steele Dossier,” the document the Obama FBI relied on to obtain a surveillance warrant on a member of the Trump campaign. The Post’s Greg Miller told an audience at an October event that the FBI and CIA did not believe that former longtime Trump attorney Michael Cohen visited Prague during the 2016 election to pay off Russia-linked hackers who stole emails from key Democrats, reports the Daily Caller’s Chuck Ross. “We’ve talked to sources at the FBI and the CIA and elsewhere — they don’t believe that ever happened,” said Miller during the October event which aired Saturday on C-SPAN.

“We literally spent weeks and months trying to run down… there’s an assertion in there that Michael Cohen went to Prague to settle payments that were needed at the end of the campaign. We sent reporters to every hotel in Prague, to all over the place trying to – just to try to figure out if he was ever there, and came away empty.” -Greg Miller. Ross notes that WaPo somehow failed to report this information, nor did Miller include this tidbit of narrative-killing information in his recent book, “The Apprentice: Trump, Russia, and the Subversion of American Democracy.”

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Britian is as bad as the US.

Not the Onion, not April 1.

Guardian still hasn’t apologized for making up the Manafort-Assange story from scratch.

• Guardian Most Trusted Newspaper In Britain – Report (G.)

The Guardian is the most trusted newspaper in Britain as well as being the most read quality news outlet, and the most popular quality news outlet among younger readers, according to industry figures released on Monday. The Guardian is now reaching more than 23 million British adults every month, with the organisation’s articles being read by 12 million Britons in a typical week and 4.1 million on the average day, aided by the decision to keep the website free for all readers. In addition, more than 97% of online readers think that reading the Guardian is time well spent, which is the highest score among all national publishers in the country. The figure rises to 99% among Guardian print readers.

Readers of the Guardian website were also substantially more likely to say that they felt a close connection to the outlet, that it offered them something they could not get elsewhere, and that they trusted its reporting. The Observer topped the equivalent rankings for Sunday newspapers. “This fantastic set of results demonstrates the Guardian’s unique position in the media,” said the editor-in-chief, Katharine Viner. “We see consistently high scores for trust and engagement from both our digital and print readers, and it is excellent news that the Guardian resonates so strongly with younger audiences, too.”

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Debt Rattle June 2 2018

Jun 022018
 
 June 2, 2018  Posted by at 8:56 am Finance Tagged with: , , , , , , , , , , ,  3 Responses »


Edward S. Curtis Crow Scout in Winter 1908

 

• The US Economy Suddenly Looks Like It’s Unstoppable (CNBC)
• Record 95.9 Million Americans Are No Longer In The Labor Force (ZH)
• The Pause That Refreshes (Roberts)
• EU Joins Global Battle Against Trump Tariff Onslaught (AFP)
• Eurozone Not Facing New Debt Crisis – Juncker (R.)
• Three Critical Lessons From Europe’s Recent Mini-Meltdown (Black)
• EU Lawmakers From Italy’s Coalition Parties Seek Funds To Quit Euro (R.)
• Canada Auditor General To Public Service: Stop Ignoring My Reports (CBC)
• Greece’s Busiest Port Reveals the Perils of Privatization (Nation)
• EU Scraps Plans To Tackle Antibiotics Abuse (G.)

 

 

And I have a bridge in Brooklyn.

• The US Economy Suddenly Looks Like It’s Unstoppable (CNBC)

In the face of persistent fears that the world could be facing a trade war and a synchronized slowdown, the U.S. economy enters June with a good deal of momentum. Friday’s data provided convincing evidence that domestic growth remains intact even if other developed economies are slowing. A better-than-expected nonfarm payrolls report coupled with a convincing uptick in manufacturing and construction activity showed that the second half approaches with a tail wind blowing. “The fundamentals all look very solid right now,” said Gus Faucher, chief economist at PNC. “You’ve got job growth and wage gains that are supporting consumer spending, and tax cuts as well. There’s a little bit of a drag from higher energy prices, but the positives far outweigh that. Business incentives are in good shape.”

The day started off with the payrolls report showing a gain of 223,000 in May, well above market expectations of 188,000, and the unemployment rate hitting an 18-year low of 3.8%. Then, the ISM manufacturing index registered a 58.7 reading — representing the%age of businesses that report expanding conditions — that also topped Wall Street estimates. Finally, the construction spending report showed a monthly gain of 1.8%, a full point higher than expectations. Put together, the data helped fuel expectations that first-quarter growth of 2.2% will be the low-water point of 2018. “May’s rebound in jobs together with yesterday’s report of solid income growth and the rise in consumer confidence points to the economy functioning very well,” the National Retail Federation’s chief economist, Jack Kleinhenz, said in a statement.

“Solid fundamentals in the job market are encouraging for retail spending, as employment gains generate additional income for consumers and consequently increase spending.” The most recent slate of widely followed barometers could see economists ratchet up growth expectations. Already, the Atlanta Fed’s GDPNow tracker sees the second quarter rising by 4.8%. While the measure also was strongly optimistic on the first quarter as well, at one point estimating 5.4% growth, other gauges are positive as well. CNBC’s Rapid Update, for instance, puts the April-to-June period at 3.6%.

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The unemployment rate is meaningless. Is that why it keeps being reported?

• Record 95.9 Million Americans Are No Longer In The Labor Force (ZH)

In what was otherwise a solid jobs report – one which Donald Trump may or may not have leaked in advance – in which the establishment survey reported that a higher than expected 223K jobs were added at a time when numbers below 200K are expected for an economy that is allegedly without slack, the biggest surprise was not in the Establishment survey, but the household, where the unemployment rate tumbled once more, sliding to a new 18 year low of 3.8%, even as the participation rate declined once again, as a result of a stagnant labor force, which was virtually unchanged (161.527MM in April to 161.539MM in May, even as the total civilian non-inst population rose by 182K to 257.454LMM).

What was perhaps more interesting, however, is that for all the talk that the slack in the labor force is set to decline, precisely the opposite is taking place, because in May, the number of people not in the labor force increased by another 170K, rising to 95.915 million, a new all time high. Adding to this the 6.1 million currently unemployed Americans, there are 102 million Americans who are either unemployed or out of the labor force (and it is also worth noting that of those employed 26.9 million are part-time workers). In other words, contrary to prevailing economist groupthink, there is a lot of slack in the economy, and if as the latest Beige Book revealed, employers are now hiring drug addicts and felons to make up for the shortage of qualified candidates, a long time will pass before wages see significant gains.

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Deutsche is dangerous.

• The Pause That Refreshes (Roberts)

As long as interest rates remain low and negative in some cases, debt can continue to be accumulated even with weaker rates of economic growth. More importantly, as long as rates remain low, the banking system can continue to play the “hide-the-debt game” through derivatives, swaps and a variety of other means. But rates are rising, and sharply, on the shorter-end of the curve. Historically, sharply rising rates have been a catalyst for a debt related crisis. As long as everything remains within the expected ranges, the complicated “math” behind trillions of dollars worth of financial instruments function properly. It is when those boundaries are broken that things “go wrong” and quickly so.

People have forgotten that in 2008 a major U.S. financial firm crashed as its derivative based exposure “blew up.” No, I am not talking about Lehman Brothers, the poster-child of the financial crisis, I am talking about Bear Stearns. In just 365-days, Bear Stearns stock went from $159 to $2, with about half of the loss occurring within a few weeks. Bear Stearns was the warning shot for the financial markets in early 2008 that no one heeded. Within a couple of months, the markets dismissed Bear Stearns as a “non-event” and rallied to a higher level than prior to the event, and almost back to highs for the year. Remember, there was “nothing to worry about” at the time, even though the Fed was increasing interest rates, as the “Goldilocks economy” could handle tighter monetary policy.

Sure, housing had been slowing down, mortgage delinquencies were rising, along with credit card defaults, but there wasn’t much concern. Today, we are seeing similar signs.Interest rates are rising, along with delinquencies, defaults, and a slowing housing market. But no one is concerned as the “Goldilocks economy” can clearly offset these mild risks. And no one is paying attention to, what I believe to be, one of the biggest risks to the global financial markets – Deutsche Bank.

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Globalization in reverse.

• EU Joins Global Battle Against Trump Tariff Onslaught (AFP)

The EU on Friday launched its first counteroffensive against Washington’s punishing steel and aluminum tariffs while the US began meetings in Canada with outraged finance ministers from its top trading partners. Meanwhile in Washington, US President Donald Trump floated the possibility of scrapping the 24-year-old North American Free Trade Agreement in favor of separate bilateral deals with Canada and Mexico. And in another leg of Trump’s multi-front trade offensive, Commerce Secretary Wilbur Ross arrived in Beijing to continue fraught talks with Chinese officials. Trump has vowed to press ahead with tariffs on as much as $50 billion in imports from China.

Brussels and Ottawa on Friday filed legal challenges at the World Trade Organization against Washington’s decision. The EU, Canada and Mexico also threatened stiff retaliatory tariffs as they pushed back against Trump’s moves. Canadian Prime Minister Justin Trudeau said Friday he was dumbfounded by Washington’s national security basis for the tariffs, given that US and Canadian troops had fought together in World War II, Afghanistan and elsewhere. “This is insulting to them,” he told NBC News. British Prime Minister Theresa May said she was “deeply disappointed” and reiterated a call for Britain and the EU to be “permanently exempted” from the “unjustified” metals tariffs.

At the Group of Seven ministerial meeting in Canada, US Treasury Secretary Steven Mnuchin faced stern reactions from his counterparts, who accused Trump of jeopardizing the world economy with steps that would prove job killers for all concerned. “The French, British and Germans held firm,” French Finance Minister Bruno Le Maire told reporters. “Everyone expressed their complete incomprehension of the American decisions and everyone said it was up to the Americans to take the next step since they were the ones who imposed the tariffs.”

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This is like the owner of a sports team publicly declaring the coach has their full support. Bad sign.

• Eurozone Not Facing New Debt Crisis – Juncker (R.)

There is no threat of a new sovereign debt crisis in the euro zone despite an anti-establishment coalition government taking power in Italy, European Commission President Jean-Claude Juncker said in remarks published on Saturday. Asked by the RND network of German newspapers if the single currency bloc faced a new crisis, Juncker said: “No. The reactions of the financial markets are irrational. People should not draw political conclusions from every fluctuation in the stock market. Investors have been wrong on so many occasions before.” A governing coalition comprising two parties hostile to the euro was installed in Italy on Friday, calming markets spooked by the possibility of a new election that might have become a referendum on quitting the single currency. “I am certain the Italians have a keen sense of what is good for their country,” Juncker said. “They will sort it out.”

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It will just take one little spark.

• Three Critical Lessons From Europe’s Recent Mini-Meltdown (Black)

1) On the day that the finance minster was rejected, financial markets worldwide tanked. Italy’s stock market plunged 5%, which is considered a major drop. But curiously, the stock market in the US fell as well, with the Dow Jones Industrial Average shedding 400 points. Even markets in China and Japan had significant drops as a result of the Italy turmoil. Now, it’s easy to see why Italy’s markets fell. And even the rest of Europe. But the entire world? Granted, a lot of people made a really big deal out of this event, concluding that it signals the end of the euro.. or Europe itself… or some other such drama. Sure, maybe. But it’s almost impossible to foretell a trend as significant as ‘the end of the euro’ based on a single event.

At face value, the rejection of a cabinet minister in Italy should have almost -zero- relevance on economies as large and diversified as the US, China, and Japan. To me, this is another sign that we’re near the peak of the bubble… and possibly already past it. Markets are so stretched, and investors are on such pins and needles, that even a minor, insignificant event induces panic. And it makes me wonder: if financial markets are so tightly wound that something so irrelevant can cause such an enormous impact, how big will the plunge be when something serious happens?

2) It wasn’t just stocks either. Bond markets were also keenly impacted. Bear in mind that stocks are volatile by nature; prices move much more wildly than other asset classes. But bonds, on the other hand, are supposed to be safe, stable, boring assets. Especially government bonds in highly developed nations. In Italy the carnage was obviously the worst. Investors dumped the 2-year Italian government bond, and yields (which move opposite to prices) surged from 0.9% to 2.4% in a matter of hours. Simply put, that’s not supposed to happen. And it hadn’t happened in at least three decades. Again, though, even in the United States, yields on the US 10-year note dropped 16 basis points overnight, from 2.93% to 2.77% (which means US bond prices increased).

That’s considered MAJOR volatility for US government bonds. To put it in context, the only day over the past few YEARS that saw 10-year yields move more than that was the day after Donald Trump won the US Presidential Election in 2016. So it was a pretty big deal. Again, this leads me to wonder: if safe, stable assets like government bonds can react so violently from such an insignificant event, how volatile will riskier assets be when there’s an actual crisis? Just imagine what’s going to happen to all the garbage assets out there (like unprofitable, heavily indebted businesses) when a real downturn kicks in.

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No, they supported setting up a fund for countries in trouble.

• EU Lawmakers From Italy’s Coalition Parties Seek Funds To Quit Euro (R.)

European Union lawmakers from the two parties forming Italy’s new government coalition backed this week a rejected proposal to set up EU funds to help countries quit the euro, a sign of the Italian leadership’s ambivalent position on the common currency. Their vote came as the anti-establishment 5-Star Movement and far-right League were finalising a deal to form an executive in Rome, under pledges that leaving the euro was not in their government programme. The government was sworn in on Friday. An earlier attempt to form a government foundered after the parties proposed as economy minister an economist who had devised a plan for Italy’s departure from the euro zone, prompting his rejection by the head of state.

Despite the declared intentions to stay in the euro, all six EU lawmakers from the League and all but one of the 14 5-Star Members of the European Parliament voted on Wednesday for a document that called for the establishment of programmes of financial support “for member states that plan to negotiate their exit from the euro.” The document voted on by their EU lawmakers called for compensation for “the social and economic damages caused by the euro zone membership.” The document was an amendment to a European Parliament resolution on the EU budget for the 2021-2027 period. The proposal, advanced by three leftist MEPs, was backed by 90 lawmakers but was rejected by a majority of the 750 MEPs.

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Sure this is very recognizable across the globe.

• Canada Auditor General To Public Service: Stop Ignoring My Reports (CBC)

Canada’s auditor general says he’s getting tired of filing annual reports recommending reforms to the way the government does business — only to see those recommendations disappear down the memory hole afterward. Michael Ferguson released his spring audits on Tuesday. They included scathing criticisms of the government’s performance on the Phoenix pay system, Indigenous services and military justice. Many of these problems have been highlighted in Ferguson’s reports in the past. And that, he told CBC News, is the problem. “We always get the department agreeing to our recommendation but then somehow we come back five years later, 10 years later and we find the same problems,” he told host Chris Hall on CBC Radio’s The House on Wednesday.

“It almost is like the departments are trying to make our recommendations and our reports go away by saying they agree with our recommendations.” His work has made one thing clear, he said: the federal government has a culture problem that makes meaningful change difficult. “They need to do things to make the results better.” Part of the problem stems from political pressure on the public service, said Ferguson. Politicians tend to think from election to election, he said, which can undermine public servants’ efforts to bring in a longer-term plan. “It seems like the political side of things ends up having more weight in the conversation.” In Parliament, he said — and particularly with respect to Indigenous Services — progress tends to be measured on the basis of how much money the government spends on a particular policy file, and not on measurable outcomes.

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“.. it is clear there were strong interests to see Greece’s public wealth turned over into other peoples’ hands..”

• Greece’s Busiest Port Reveals the Perils of Privatization (Nation)

In 2015, as a condition of the $100 billion European Union bailout that followed the 2008 financial crisis, the Greek government agreed to privatize a number of state-held assets including the Piraeus Port Authority, which manages the port’s container and passenger terminals. The Greek state sold a majority stake for $330 million to COSCO. For the Chinese company, the purchase had a clear financial logic. About 80 percent of China’s imports and exports to and from Europe are transported by sea, and by avoiding the need to sail to busy Northern European ports like Rotterdam or Hamburg, COSCO could offload containers in Piraeus, reducing the time it takes cargo to get to Europe by nearly a week. Plus, by owning the port authority, COSCO could help determine how much its own ships would have to pay itself in port fees.

As part of the deal, COSCO pledged to participate in financing $410 million worth of investment in the port, including a repair of port equipment and the dredging of Piraeus’s central port. Supporters of privatization argue these improvements signal a coming maritime renaissance at Piraeus—already the busiest port in the eastern Mediterranean. Nektarios Demenopolous, the deputy manager for investor relations at Piraeus Port Authority, told me, “There are 300 million euros [$350 million] of investment to come in the next five years, followed by another 50 million. Privatization has made the port much more dynamic and will reboot activities at the port like ship repair that have been in recession. It will be remembered as a success story.”

But a “success story” for whom? The dockworkers of Piraeus say they and their families have seen little of the alleged gains brought by COSCO. As Piraeus Port Authority boasts of widening profit margins and increasing maritime traffic, wages for dockworkers haven’t budged since they were slashed from 1500 euros ($1,750) per month to 600 euros after the financial crisis. Beyond that, COSCO now hires few dockworkers as full-time employees, and tends to enlist unskilled laborers for complex container unloading. COSCO also primarily remunerates people on an ad hoc basis as subcontractors, leaving dockworkers and their families entirely dependent on the ebb and flow of traffic into Piraeus. It also means their traditional retirement benefits have disappeared.

The long list of Greek public assets in the privatization pipeline includes Athens International Airport, the oil refiner Hellenic Petroleum, and the electric-grid operator. To date, some roughly $5 billion in Greek state assets, including the Port of Piraeus and Greece’s regional airport network, have been sold, and it is expected that the Greek government will sell nearly $55 billion worth of state assets within the next decade. There is no conclusive evidence that privatized state assets are more efficiently managed than their state-owned predecessors, but privatization is undoubtedly an effective means for a cash-strapped government to raise funds when its creditors are getting impatient. “Piraeus was always a profitable port. However, it is clear there were strong interests to see Greece’s public wealth turned over into other peoples’ hands,” said Giorgos Gogos, head of the Piraeus dockworkers’ union.

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How corrupt is Juncker?

• EU Scraps Plans To Tackle Antibiotics Abuse (G.)

The EU has scrapped plans for a clampdown on pharmaceutical pollution that contributes to the spread of deadly superbugs. Plans to monitor farm and pharmaceutical companies, to add environmental standards to EU medical product rules and to oblige environmental risk assessments for drugs used by humans have all been discarded, leaked documents seen by the Guardian reveal. An estimated 700,000 people die every year from antimicrobial resistance, partly due to drug-resistant bacteria created by the overuse, misuse and dumping of antibiotics. The UK’s chief medical officer, Dame Sally Davies, has warned that failing to act could lead to a post-antibiotic apocalypse, spelling “the end of modern medicine” as routine infections defy effective treatment.

Some studies predict that antimicrobial resistance could cost $100tn (£75tn) between now and 2050, with the annual death toll reaching 10 million over that period. An EU strategy for pharmaceuticals in the environment was supposed to propose ways to avert the threat, but leaked material shows that a raft of ideas contained in an early draft have since been diluted or deleted. Proposals that have fallen by the wayside include an EU push to have environmental criteria for antibiotic use included in international agreements as “good manufacturing practice requirements”. This would have allowed EU inspectors to visit factories in Asia or Africa, sanctioning them were evidence of pharmaceutical pollution found.

[..] The pharmaceutical industry spent nearly €40m on lobbying EU institutions in 2015, according to voluntary declarations, and enjoys infamously easy access to officials. Public records show that the European Federation of Pharmaceutical Industries and Associations had more than 50 meetings with the Juncker commission in its first four and a half months of office. In the same period, GlaxoSmithKline had 15 meetings with the commission, Novartis had eight engagements, Sanofi and Johnson & Johnson had six sessions apiece, while Pfizer and Eli Lilly both met with EU officials five times each.

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Debt Rattle March 6 2018

Mar 062018
 
 March 6, 2018  Posted by at 11:16 am Finance Tagged with: , , , , , , , , , , ,  11 Responses »


Vincent van Gogh Le Moulin à Poivre, Montmartre 1887

 

• EU Proposes Retaliatory Tariff of 25% Against U.S. Goods (BBG)
• Trump’s Tariff Threat On European Cars Could Spell Big Trouble For Germany (CNBC)
• Retail Investor Bullishness Collapses (WS)
• World’s ‘Shadow Banks’ Continue To Expand (R.)
• China to Ease Bad-Loan Provision Rules to Support Growth (BBG)
• China Faces an ‘Impossible Challenge’ on Budget, Tax and GDP (BBG)
• China’s Coming Meltdown Will Rapidly Spread to US (Rickards)
• Sex, Money & Happiness (Roberts)
• British Can’t Deliver Promises Of Frictionless Trade (Fintan O’Toole)
• Canada’s Looming Economic Meltdown (GT)
• Coinbase Accused of Cheating Consumers in More Ways Than One (BBG)
• US, UK Support World’s Worst Humanitarian Disaster In 50 Years (CP)
• Light It Up (Jim Kunstler)
• The Ocean Currents Brought Us In A Lovely Gift Today (G.)

 

 

Trump said ‘if you don’t have steel, you don’t have a country’. Is he all that wrong?

• EU Proposes Retaliatory Tariff of 25% Against U.S. Goods (BBG)

The EU is preparing punitive tariffs on iconic U.S. brands produced in key Republican constituencies, raising political pressure on President Donald Trump to ditch his plans for taxing steel and aluminum imports. Targeting $3.5 billion of American goods, the EU aims to apply a 25 percent tit-for-tat levy on a range of consumer, agricultural and steel products imported from the U.S. if Trump follows through on his tariff threat, according to a list drawn up by the European Commission and obtained by Bloomberg News. The list of targeted U.S. goods – including motorcycles, jeans and bourbon whiskey – sends a political message to Washington about the potential domestic economic costs of making good on the president’s threat.

Paul Ryan, Republican speaker of the House of Representatives, comes from the same state – Wisconsin – where motorbike maker Harley-Davidson is based. Earlier this week, Ryan said he was “extremely worried about the consequences of a trade war” and urged Trump to drop his tariff proposal. Other U.S. officials will also feel the pressure. Bourbon whiskey hails from Senate Majority Leader Mitch McConnell’s home state of Kentucky. San Francisco-based jeans maker Levi Strauss is headquartered in House Minority Leader Nancy Pelosi’s district. The EU’s retaliatory list targets imports from the U.S. of shirts, jeans, cosmetics, other consumer goods, motorbikes and pleasure boats worth around €1 billion; orange juice, bourbon whiskey, corn and other agricultural products totaling €951 million; and steel and other industrial products valued at €854 million.

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Tariff on US cars exported to Europe is 25%. Tariff on EU cars imported in US is 10%. Looks like there is room for talks there.

• Trump’s Tariff Threat On European Cars Could Spell Big Trouble For Germany (CNBC)

The war of words between President Donald Trump and the EU could lead to some serious pressure on the German auto industry, one expert told CNBC. Trump threatened via Twitter on Saturday to hit back at any tariff measures from the European Union — floated in response to Trump’s recently announced global steel import tariffs — in kind. The billionaire businessman’s potential next target? European cars. And the biggest victim of them all may be Germany. “It would be quite severe if we were to face additional import duties to ship the cars into the U.S. — the Germans in particular are very, very exposed,” Arndt Ellinghorst, the head of global automotive research for advisory firm Evercore ISI, told CNBC Monday.

He noted the example of BMW, which sells about 350,000 cars in the U.S. annually, roughly 70% of which come from Europe. “That’s probably an $8 billion to $9 billion revenue stream, if you put a 5 to 10% additional cost on it, it would cost something like $400 million to $800 million. Some of that would be absorbed by the company, and some of it would have to be absorbed by the consumer in the U.S.” Ellinghorst did add that cars being shipped from the U.S. into Europe faced a 10% import duty while European cars into the U.S. faced a 2.5% import duty. “I think what the administration is talking about is to balance out this difference in tariffs to make it more of an equal playing ground for American and European carmakers,” he said.

Out of roughly six million cars exported by Europe in 2016, more than one million were absorbed by the U.S. — just over 16% — its largest country market by a wide margin. Meanwhile, of America’s $53.6 billion in car exports that same year, the value of its car exports into Europe was $11.8 billion, or roughly 22% of the total, according to the Observatory of Economic Complexity. The U.S. is the third-largest car exporter globally after Germany and Japan, accounting for 7.7% of total world exports. It ran a trade deficit of more than $151 billion overall with Europe in 2017.

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The aftermath of the reurn of volatility.

• Retail Investor Bullishness Collapses (WS)

TD Ameritrade’s Investor Movement Index – “designed to indicate the sentiment of retail investors” based on what they’re doing in their accounts and “how they are actually positioned in the markets” – plunged 23% in February to 5.95, the biggest month-over-month plunge in the history of the index, “as volatility returned to the market.” This comes after a 9% plunge of the index in January, the largest month-over-month plunge in three years, which occurred despite the final spurt of the rally that took the stock market indices to new highs on January 26. It’s as if retail investors, for once, smelled a rat. After which the sell-off started:

TDA Chief Market Strategist JJ Kinahan explained in an interview that TDA’s clients “didn’t want to be as exposed” in February to risk “as they were.” “What’s interesting is they were net buyers, and they were net buyers because of the February 9th move,” he said. “They bought a lot of stocks that day. But as the month went on, they just continued to sell those stocks back out, and then some. So it was a really interesting pattern that developed.” The stocks they bought had “lower beta than some of the stocks they sold,” he said. “So it was really and truly a risk-off trade. But the bigger part about it is they lightened up their exposure across the board. So one or two days truly of buying,… but after that, not only selling what they’d bought that day, but selling on top of it what they’d bought earlier” this year and last year.

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Hard to gauge how much of a grip the Financial Stability Board has on the actual numbers. 2016 is the first time they include China. But what do they actually know, and how much is guesswork?

• World’s ‘Shadow Banks’ Continue To Expand (R.)

Growth in global bond, real estate and money market funds continued to swell the world’s“shadow banking” sector, a watchdog that coordinates financial regulation for the G20 big economies said on Monday. The Financial Stability Board said its“narrow” measure of shadow banking activities that could pose a threat to stability, rose 7.6% to $45.2 trillion in 2016, the latest year for which figures have been collated. It represents 13% of total financial system assets in the 29 jurisdictions surveyed. Data from China and Luxembourg were included in the measure for the first time. “Non-bank financing provides a valuable alternative to bank financing and helps support real economic activity,” the FSB said in its report. Nevertheless, increased reliance on non-bank funding could give rise to new risks, it said.

The so-called shadow banking sector, made up of companies other than banks that provide financial services, has been treated with suspicion by some regulators since the financial crisis a decade ago. Still, it has some champions among policymakers who say it helps keep capital markets more liquid. The European Union actively courts participants to diversify away from heavy reliance on bank loans for EU companies. Apart from debt investment funds, the measure of shadow banking also includes the repurchase and debt securitization markets as well as hedge funds involved in credit. Faced with few rules in the past, sub-sectors like securitization are now regulated and seen to pose less risk to stability.

Open-ended bond funds, hedge funds that offer credit and money market funds account for 72% of the narrow measure, and grew by 11% in 2016. Regulators have asked funds to have safeguards in place for extreme market turbulence to avoid instability from fire sales of assets if many investors ask for their money back. The United States accounts for 31% of the narrow measure, followed by China with 16%, the Cayman Islands at 10% and Japan at 6%. A broader measure, which includes all financial firms that are not central banks, banks, pension funds or insurers, rose 8% to $99 trillion to represent 30% of global financial assets, its highest level since at least 2002, the FSB said.

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How transparent are these shadows?

• China to Ease Bad-Loan Provision Rules to Support Growth (BBG)

China is relaxing rules governing how much banks must set aside to cover bad loans, people with knowledge of the matter said, a sign that regulators are comfortable the nation’s lenders are sound enough to extend additional credit and support the economy. The China Banking Regulatory Commission has issued a notice lowering the bad-loan coverage ratio to a minimum 120% from the previous 150%, the people said, asking not to be identified as the matter isn’t public. Relaxed bad-loan coverage rules will allow banks to extend more credit, supporting an economy the government expects to expand about 6.5% this year, a slower pace than in 2017. Additional lending from giants such as Industrial & Commercial Bank of China would also counter some of the effects on the economy of President Xi Jinping’s campaign to curb financial risk, one of the government’s top priorities.

The changes also indicate regulators are confident that they’ve come to grips with a bad-loan epidemic that plagued lenders over the past few years. In 2016, when problem loans at Chinese banks were on the rise, the CBRC resisted lobbying from the nation’s lenders to relax the provisioning thresholds. The timing of the CBRC move suggests that “nonperforming loans are not a problem,” analysts at Shenwan Hongyuan said in a research note. [..] According to the notice, the CBRC will differentiate the amount of provisions an individual bank must hold within the new band of 120% to 150%, based on the level of its capital, the accuracy of its loan classification policies and its proactiveness in handling nonperforming loans, the people said.

China’s banking industry has a bad loan coverage ratio above 180%, CBRC official Xiao Yuanqi said at a briefing last week, indicating banks have plenty of room to reduce provisions. As well as lowering the threshold, the CBRC notice said it will reduce the amount of provisions banks must hold against their total loan book, including healthy loans, to as low as 1.5% from the previous 2.5% minimum.

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They can’t have it all.

• China Faces an ‘Impossible Challenge’ on Budget, Tax and GDP (BBG)

Premier Li Keqiang has an “impossible challenge” if he wants to slash China’s budget deficit target, deleverage the economy, and cut taxes, according to Pantheon Macroeconomics. Li on Monday said this year’s deficit goal was cut to 2.6% of gross domestic product, from 3%, the first reduction since 2012. At the same time, he pledged tax cuts of 800 billion yuan ($126 billion) for companies and individuals and set a 6.5% annual economic growth target – the same as last year’s target but slower than the actual performance of 6.9%. “These targets suggest tight monetary conditions and tight fiscal policy, with GDP growth holding up, despite an intensified deleveraging campaign,” said chief Asia economist Freya Beamish in London. “Something’s got to give. We reckon it’s fiscal policy, though monetary policy could also turn out on the easier side, with the yuan also set to weaken.”

[..] While China is aiming for a narrower official deficit, leaders still plan to expand the issuance of special purpose bonds, which are sold by local governments to finance items that aren’t included in the general public budget and not counted in the deficit ratio released annually. Local governments have used special bonds to help pay for highways, railroads and other construction projects in recent years, and the securities are designed to be covered by returns of the projects rather than general revenues. Special purpose bond issuance will jump to 1.35 trillion yuan this year to prioritize “supporting ongoing local projects to see them make steady progress,” the Finance Ministry said Monday. That’s up from 800 billion yuan in 2017 and 400 billion yuan in 2016.

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An entire series of companies guaranteeing each other’s debt. How does that surface in those shadow reports?

• China’s Coming Meltdown Will Rapidly Spread to US (Rickards)

The coming credit crisis in China is no secret. China has $1 trillion or more in bad debts waiting to explode. These bad debts permeate the economy. Some are incurred by Chinese provincial authorities trying to get around spending limitations imposed by Beijing. Some are straight commercial loans on bank balance sheets. Some are external dollar-denominated debts owed to foreign creditors. The most dangerous type of debt involves a daisy chain of insolvent corporations buying debt from each other. A single cash advance of $100 million can be passed from corporation to corporation in exchange for a new promissory note, used to extinguish an old unpayable promissory note. Repeated enough times, the $100 million can be used as window dressing to prop up $1 billion or even $2 billion of bad debts.

These kinds of accounting tricks will land you in jail in the U.S., but it’s an accepted practice in China as long as the corporate CEO is a “Princeling” (a politically connected Communist Party insider descended from the old guard) or an oligarch willing to pay bribes. This state of affairs has existed for years. The question investors keep asking is, “How long can this last?” How long can the daisy chain keep operating to gloss over a sea of bad debt and give the Chinese economy an appearance of good health? Well, the answer is the Ponzi will not likely last much longer. Even compliant Chinese regulators are starting to blow the whistle on bad loans and the banks that cover them up. So the good news is that China is starting to address the problem. The bad news is that if China gets serious about cleaning up bad debts, their growth will slow significantly and so will world economic growth.

That’s bad news for global stock markets. Essentially, China is on the horns of a dilemma with no good way out. On the one hand, China has driven growth for the past eight years with excessive credit, wasted infrastructure investment and Ponzi schemes like wealth management products (WMPs). The Chinese leadership knows this, but they had to keep the growth machine in high gear to create jobs for millions of migrants coming from the countryside to the city and to maintain jobs for the millions more already in the cities. The Communist Chinese leadership knew that a day of reckoning would come. The two ways to get rid of debt are deflation (which results in write-offs, bankruptcies and unemployment) or inflation (which results in theft of purchasing power, similar to a tax increase). Both alternatives are unacceptable to the Communists because they lack the political legitimacy to endure either unemployment or inflation. Either policy would cause social unrest and unleash revolutionary potential.

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Americans can’t get away from the money makes you happy syndrome.

• Sex, Money & Happiness (Roberts)

“Sex” and “Money” are probably two of the most powerful words in the English language. First, those two words got you to look at this article. They also sell products, books, and services from “How To Have Better Sex” to “How To Make More Money” — ostensibly so you can have more of the former. Unfortunately, they are also the two primary causes of divorce in the country today. But “happiness,” is also an interesting word because it is ultimately derived from the ability to obtain money and the lifestyle with which it will afford. Researchers at Purdue University recently studied data culled from across the globe and found that “happiness” doesn’t rise indefinitely with income. In fact, there were cut-off points at which more annual income had a negative effect on overall life satisfaction.

So, what’s that number? In the U.S., $65,000 was found to be the optimal income for “feeling” happy. In the U.S., despite higher levels of low income (now there’s an oxymoron), inflation-adjusted median incomes have remained virtually stagnant since 1998.

However, the chart above is grossly misleading because the income gains have only occurred in the Top 20% of income earners. For the bottom 80%, they are well short of the incomes needed to obtain “happiness.”

For most American “families”, who have to balance their living standards to their income, the “experience” of “happiness” is more of a function of “meeting obligations” each and every month. Today, more than ever, the walk to the end of the driveway has become a dreaded thing as bills loom large in the dark crevices of the mailbox. If they can meet those obligations, they are “happy.” If not, not so much.

In my opinion, what the study failed to capture was the “change” in what was required to achieve “perceived” happiness following the “financial crisis.” Just as with “The Great Depression,” individuals forever altered their feelings about banks, saving and investing after an entire generation had lost “everything.” It is the same today as sluggish wage growth has failed to keep up with the cost of living which has forced an entire generation into debt just to make ends meet. As the chart below shows, while savings spiked during the financial crisis, the rising cost of living for the bottom 80% has outpaced the median level of “disposable income” for that same group. As a consequence, the inability to “save” has continued.

[..] Not surprisingly, the “financial stress” in American households is leading to other factors which are fueling the “demographic” problem in the future. The equation is very simple – when individuals are stressed over finances they are less active sexually. This was shown in a recent study by the National Bureau of Economic Research. Ahead of the past three US recessions, the number of conceptions began to fall at least six months before the economy started to contract. As the FT notes, while previous research has shown how birth rates track economic cycles, the scientific study is the first to show that fertility declines are a leading indicator of recessions. [..] To the researchers’ surprise, they found that falls in conceptions were a far better leading indicator of recessions than many commonly used indicators such as consumer confidence, measures of uncertainty, and purchases of big-ticket items such as washing machines and cars.

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Sheer incompetence. Much more of that to come.

• British Can’t Deliver Promises Of Frictionless Trade (Fintan O’Toole)

In 2016, more than 310 million people and nearly 500 million tonnes of freight crossed the UK’s borders. If this continues to happen in a “frictionless” way after Brexit, the disturbances to the status quo in Ireland will be limited. If it doesn’t, hang on to your hats. Frictionless trade is the only condition under which Brexit can happen without inflicting a hard border on Ireland. It is almost certainly a political impossibility if the UK leaves the customs union. But even if it could somehow be agreed in principle, there is another enormous obstacle: the actual capacity of the British to handle it. On Friday, after Theresa May’s big set-piece speech on Brexit, the DUP leader Arlene Foster issued a glowing endorsement. She referred back to a paper issued by the UK government last August: “Those proposals can ensure there is no hard border between Northern Ireland and the Republic of Ireland after we exit the EU.”

Foster recognises how much unionism is staking on that document and on the ability of the UK’s bureaucracies to deploy technology to take the sting out of the potentially toxic irritant of the Irish Border. This forces us to consider something that would previously have been of little interest to Irish people: the recent and dismal history of the UK’s adventures in using digital technology to control its borders. In 2003, the British established a spanking new “e-borders” system which was meant to collect and analyse advance passenger information for people travelling into the UK. It had a generous timescale – the full programme was meant to be in place by 2011. In 2010, the Home Office admitted that e-borders was so useless it had to be abandoned. By then, it had spent £340 million (€380 million) on the programme.

The cancellation of the contract led to a legal settlement for another £150 million. The Home Office then spent another £303 million on a new programme, bringing expenditure to £830 million. In 2015, the National Audit Office reported that all of this expenditure “has failed, so far, to deliver the full vision” of what was supposed to be achieved. The current date for completion of the programme is 2019. The whole thing will have taken a mere 16 years. On the same timescale, the new post-Brexit systems on which the future of Ireland may hinge would be delivered in 2035. In 2015, 55 million UK customs declarations were made by 141,000 traders. Once Brexit happens, that will increase fivefold to 255 million. Leaving aside all the issues of political principle, this is the vast logistical challenge that will have to be dealt with if May and Foster are to get the Brexit they want.

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The numbers are interesting, the political stance not so much.

• Canada’s Looming Economic Meltdown (GT)

Canada’s Fourth Quarter economic growth was 1.7% following positive signs of growth earlier in the year. This growth, however modest, is attributable to easy credit and the increased consumer spending. At this time, Canadian households are facing one the largest indebtedness when compared to most other countries. For every $1.00 of income, consumers owe $1.68. This is the highest income to debt ratio in the world. For low-income Canadian households, the $1.00 disposable income to $3.33 debt ratio is even worst. Canada, along with other nations, especially emerging markets are carrying records levels of consumer debts, may be facing a serious crash as further growth becomes unsustainable.

Canada combined deficit rose to $18.1 billion in 2016, from $12.9 billion in the previous year. Higher debts and increased spending are causing serious concerns that the Canadian economy is on an unsustainable economic path. A considerable portion of Canada’s future economic growth has been predicated on strengthening and improving the country’s infrastructure. However, Prime Minister Trudeau’s policies are destined to strangle potential economic growth by shifting C$7.2 billion allocated to infrastructure improvements to government programs such as gender equality hiring opportunities. According to the Conference Board of Canada’s Craig Alexander: “This isn’t a budget that’s about growth, as much as it’s about equality and breaking down barriers to opportunity.”

Canada appears to be stunting its own economic growth as a matter of policy. Three major infrastructure projects, The Northern Gateway pipeline ($7.9 billion), the Pacific Northwest LNG project ($36 billion), and possibly the Energy East pipeline ($15.7 billion) would have been instrumental in guaranteeing economic growth for decades to come. However, these have been stymied in favor of Trudeau’s economic egalitarian vision. As a result, investors have been abandoning certain projects. The last time Canada’s saw such heavy-handed government interference in its economy was during the presidency of Trudeau’s father, Pierre Trudeau.

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This could hurt.

• Coinbase Accused of Cheating Consumers in More Ways Than One (BBG)

Coinbase was slapped with a pair of lawsuits by disgruntled consumers, one alleging insider trading by employees at the giant digital currency exchange and the other accusing the company of failing to deliver cryptocurrencies to people who didn’t have accounts. The class-action suits come as Coinbase and other crypto startups are beefing up their staffs with regulatory experts to legitimize themselves as they prepare for government authorities to impose stricter rules. The first of the complaints filed in San Francisco federal court centers on Coinbase’s announcement in December that it would enable purchases of the bitcoin spinoff known as Bitcoin Cash. The customer who sued alleges that employees were tipped off a month in advance, allowing them to instantly swamp Coinbase with buy and sell orders and leaving other traders at a great disadvantage.

Coinbase CEO Brian Armstrong said at the time that the company would investigate an increase in the price of bitcoin cash in the hours before its Dec. 19 announcement and that any employee or contractor found to have violated internal policies would be terminated. “To date, neither Armstrong nor the company has disclosed the result of its purported investigation,” according to the March 1 lawsuit. In the other suit, two men claim that they were unable to redeem bitcoin that had been transferred to them through Coinbase via their email addresses in 2013. They allege that when they got reminder notices in February, they tried to recover the bitcoin only to discover that the links provided by Coinbase were broken. They accused the company of keeping their funds and say they want to represent “thousands” of other people in the same position.

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As long as the press continue to ignore this, who cares really?

• US, UK Support World’s Worst Humanitarian Disaster In 50 Years (CP)

“The situation in Yemen – today, right now, to the population of the country,” UN humanitarian chief Mark Lowcock told Al Jazeera last month, “looks like the apocalypse.” 150,000 people are thought to have starved to death in Yemen last year, with one child dying of starvation or preventable diseases every ten minutes, and another falling into extreme malnutrition every two minutes. The country is undergoing the world’s biggest cholera epidemic since records began with over one million now having contracted the disease, and new a diptheria epidemic “is going to spread like wildfire” according to Lowcock. “Unless the situation changes,” he concluded, “we’re going to have the world’s worst humanitarian disaster for 50 years”.

The cause is well known: the Saudi-led coalition’s bombardment and blockade of the country, with the full support of the US and UK, has destroyed over 50% of the country’s healthcare infrastructure, targeted water desalination plants, decimated transport routes and choked off essential imports, whilst the government all this is supposed to reinstall has blocked salaries of public sector workers across the majority of the country, leaving rubbish to go uncollected and sewage facilities to fall apart, and creating a public health crisis. A further eight million were cut off from clean water when the Saudi-led coalition blocked all fuel imports last November, forcing pumping stations to close.

[..] As of late January, fuel imports through the country’s main port Hodeidah were still being blocked, with cholera cases continuing to climb as a result. And on 23rd January, the UN reported that there are now 22.2 million Yemenis in need of humanitarian assistance – 3.4 million more than the previous year – with eight million on the brink of famine, an increase of one million since 2017.

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America’s fast becoming a cartoon nation.

• Light It Up (Jim Kunstler)

It must be hard on The New York Times editors to set their hair on fire day after day in their effort to start World War Three. Today’s lead story, Russian Threat on Two Fronts Meets Strategic Void in the U.S., aims to keep ramping up twin hysterias over a new missile gap and fear of Russian “meddling” in the 2018 midterm elections. The Times’s world-view begins to look like the script of a Batman sequel with Vlad Putin cast in The Joker role of the cackling psychopath who must be stopped at all costs! America’s generals have switched on the Batman signal beacon, but Donald Trump in the role of the Caped Crusader, merely dithers and broods in the splendid isolation of his 1600 Penn Avenue Bat Cave, suffering yet another of his endless bipolar identity crises.

For God’s sake, The Times, shrieks, do something! The Russians are coming! (Gotham City’s Chief of Police Hillary said exactly that last week in a Tweet!) I think they misunderstood Mr. Putin’s recent message when he announced a new hypersonic missile technology that would, supposedly, cut through any imaginable US missile defense. The actual message, for the non mental defectives left in this drooling idiocracy of a republic, was as follows: Nuclear war remains unthinkable, so kindly stop thinking about it. Mr. Putin’s other strategic position is also misrepresented — actually, not even acknowledged — in Monday’s NYT propaganda blast, namely, to discourage the USA’s decades-long policy of regime change here, there, and everywhere on the planet, creating a debris trail of one failed state after another.

As a true-blue American, I must say these are two admirable propositions. Is it fatuous to add that atomic war is unlikely to benefit anyone? Or that the world has had enough of US military “meddling” in foreign lands? Of course the shopworn trope of Russian “meddling” in the 2016 election still occupies the center ring of the American political circus. Today’s Times story includes another clumsy attempt to set up expectations that the 2018 midterm elections will be hacked by Russia, in order to keep the hysteria at code-red level. As usual, the proposition assumes that the alleged 2016 hacking is both proven and significant when, going on two years, there is no evidence of hacking besides the obviously amateurish Facebook troll farm.

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Sickening to watch.

• The Ocean Currents Brought Us In A Lovely Gift Today (G.)

A British diver has captured shocking images of himself swimming through a sea of plastic rubbish off the coast of the Indonesian tourist resort of Bali. A short video posted by diver Rich Horner on his social media account and on YouTube shows the water densely strewn with plastic waste and yellowing food wrappers, the occasional tropical fish darting through the deluge. The footage was shot at a dive site called Manta Point, a cleaning station for the large rays on the island of Nusa Penida, about 20km from the popular Indonesian holiday island of Bali. In a Facebook post on 3 March Horner writes how the ocean currents had carried in a “lovely gift” of jellyfish and plankton, and also mounds and mounds of plastic.

“Plastic bags, plastic bottles, plastic cups, plastic sheets, plastic buckets, plastic sachets, plastic straws, plastic baskets, plastic bags, more plastic bags, plastic, plastic,” he says, “So much plastic!” The video shows Horner swimming through the mess for several minutes and also how the waste coagulated on the surface, mixing in with some organic matter to form a slick of floating rubbish. Manta Point is regularly frequented by numerous manta rays that visit the site to get cleaned of parasites by smaller fish, but the video shows just one lone manta in the background. “Surprise, surprise, there weren’t many mantas there at the cleaning station today…” notes Horner, “They mostly decided not to bother.”

Several weeks ago thousands across Bali took part in a mass clean up, in attempt to rid the island’s beaches, rivers and jungles of waste, and raise awareness about the harmful impacts of trash. Rich Horner said that while divers regularly see “a few clouds of plastic” in the rainy season, the slick he identified is the worst yet. Divers returned to the site the next day, he reports, by which time the slick had already moved on, “continuing on its journey, off into the Indian Ocean..”

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Debt Rattle January 10 2018

Jan 102018
 
 January 10, 2018  Posted by at 10:19 am Finance Tagged with: , , , , , , , , , , , ,  11 Responses »


Ansel Adams The Tetons and the Snake River 1942

 

• Is Bank of Japan The Latest To Take The Punch Bowl Away? (CNBC)
• Fed Officials Are Scrambling To Figure Out How To Fight Next Recession (BI)
• Market Could Be Headed For A ‘Melt-Up’ Of 30% – Bill Miller (CNBC)
• People Have A Hard Time Even Imagining How The Market Could Decline (ZH)
• World Bank Issues Warnings On Interest Rates And Inflation (G.)
• South Korea’s Moon Says Trump Deserves ‘Big’ Credit For North Korea Talks (R.)
• Apple’s Privacy Feature Costs Ad Companies Millions (G.)
• Antivirus Tools Caught With Their Hands In The Windows Cookie Jar (Reg.)
• Julian Assange’s Stay In London Embassy Untenable, Says Ecuador (G.)
• Australia Must Rescue Assange From The Establishment That Tortured Manning (CJ)
• The Fog of War: Global Airstrike Deaths Up At Least 82% In 2017 (RT)
• Scores Feared Dead And Up To 100 Missing After Boat Sinks Off Libya Coast (G.)

 

 

The Last of the Mohicans. But does Japan really want to, and can it, carry the global financial system on its shoulders now the Fed and ECB no longer want to do their share?

• Is Bank of Japan The Latest To Take The Punch Bowl Away? (CNBC)

The Bank of Japan is seen as the last grown-up in the room actively filling the global liquidity punch bowl with both hands. That’s why a slight tweak to its bond-buying program caused a flurry across financial markets Tuesday, sparking speculation it was joining the Fed and ECB in cutting back on asset purchases, a move that could ultimately help drive up global interest rates. On Tuesday, the BOJ modestly trimmed its purchases of Japanese government bonds by about $10 billion in the 10- to 25-year maturities and another $10 billion in maturities of more than 25 years. The yen jumped about 0.5% to about 112.60 to the dollar, and bond yields rose. The U.S. 10-year yield also moved higher, breaking above the key 2.50% to as high as 2.55%. Meanwhile, the 10-year JGB yield moved in a range of about 0.16 and saw a high of 0.074%.

But some strategists say while the BOJ may have sent a powerful signal, it is just acting on a technicality that comes with changes it made to its bond purchase program back in 2016. Unlike the U.S. and Europe, where central banks have targeted the balance sheet size, the Japanese central bank is targeting interest rates and its purchases are based on prices. “I think it’s too early to proclaim the easy conditions in Japan are over. That said, I do think it’s constructive and it shows how sensitive the markets are to any potential change,” said Greg Peters, senior portfolio manager at PGIM Fixed Income. The Bank of Japan has been a poster child for central bank easing, taking its rates to negative levels and buying all types of assets, including stocks.

“They’re still buying ETFs, J-REITs, corporate paper. They changed how they’re easing, but they’re still easing,” said Marc Chandler, head of fixed-income strategy at Brown Brothers Harriman. “I think the market is overinterpreting this, partly because of their positions. They’re short yen. They’re long euros. They’re being squeezed on both legs today.” [..] While it’s last to leave the party, a change in BOJ policies would be the most symbolic move yet that the extreme policies adopted in the global financial crisis are finally coming to an end, and the juice that helped push risk assets higher is being slowly withdrawn. Chandler said the BOJ has made a point of saying it will continue to ease. “The BOJ says, ‘We’re going to be patient. We’re going to be the last one out.’ … [Prime Minister Shinzo] Abe told the Bank of Japan..

“If long rates continue to move higher, and the BOJ follows this with a continued reduction in the pace of the purchases, then we know we’re on to something. We’re on to a potential change in monetary policy in Japan,” said Peter Boockvar, chief investment officer at Bleakley Financial Group. “I think that is likely in 2018,” Boockvar said. “Whether this is the beginning of it, we’ll have to see. They have some cover too. They know what the Fed is going to do, and they know what the ECB is doing. Does the BOJ want to be the outlier of temporary insanity when every other central bank is pulling back? They are the epitome of extremity in terms of monetary policy.”

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Fed interference will go down in history as the uttermost of stupidities. Not yet though, the narrative of saving the economy can still be kept alive. But wait till things go south.

• Fed Officials Are Scrambling To Figure Out How To Fight Next Recession (BI)

Federal Reserve officials puzzled by chronically-low US inflation seem to agree on at least one thing: They worry, almost universally, that they will lack the tools to fight the next recession, whenever it comes. Yet instead of focusing on tried and true policy measures like low interest rates and possibly bond buys, Fed officials current and former appear focused instead on broad shifts in the policy framework, including moving away from the current inflation targeting regime toward a potentially more aggressive approach. More importantly, the string of discordant ideas being offered up at a Brookings Institution conference by such high profile figures as former Fed Chairman Ben Bernanke, former White House economic advisor Lawrence Summers, and two current Fed members, does more to confuse the already muddled outlook for monetary policy than clarify it.

Boston Fed President Eric Rosengren suggested the Fed follow the model of the Bank of Canada, which periodically reviews its approach to maintaining price stability. He also called for the Fed to move toward an inflation target range, which he hinted might be from 1.5% to 3%, rather than the current 2% goal. John Williams, president of the San Francisco Fed, called for a system where the Fed would target the price level, meaning that it would compensate periods of undershooting the 2% inflation goal with periods of overshooting. US inflation has remained stubbornly below the Fed’s 2% target for much of the economic recovery, suggesting the labor market is not as healthy as the 17-year low unemployment rate of 4.1% suggests.

Shifting to a price-level target is “not nearly as scary as you might think” Williams told the audience of monetary economists, academics, and market participants. He worried about the “issue of credibility” that has resulted from persistently below-target inflation, which makes it look ” like the central bank is not committed to its goals.” Prolonged low inflation, which also reflects soft wage growth, can make monetary policy less effective because “it gets into inflation expectations and makes it harder to achieve 2% objective in good times.”

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Possible in theory, but with CB tightening not in practice.

• Market Could Be Headed For A ‘Melt-Up’ Of 30% – Bill Miller (CNBC)

Worried about higher interest rates putting a dent on the stock market’s rip-roaring rally? Fear not, a rise in rates will actually help stocks, according to legendary investor Bill Miller. “Those 10-year yields go through 2.6% and head towards 3%, I think we could have the kind of melt-up we had in 2013, where we had the market go up 30%,” Miller, the founder of Miller Value Partners, told CNBC’s “Closing Bell” on Tuesday. “If we can get the 10-year towards that 3% level, you’ll see the same thing.” “In 2013, people finally began to lose money in bonds. They took money out of bond funds and put it into equity funds,” Miller said. Miller is considered one of the best investors ever, after beating the market for 15 years in a row while working at Legg Mason. Stocks have been on a rip-roaring rally for more than a year, as economic data and corporate earnings have improved.

On Tuesday, they closed at fresh record highs. But some experts fear the improvements in the economy could force the Federal Reserve to tighten monetary policy faster than they forecast, thus pushing interest rates higher. The 10-year U.S. Treasury yield rose to 2.55% on Tuesday and hit its highest level since March.The yield has not traded above 3% since early 2014. It last traded above 2.6% last March. But Miller thinks the stock market could get another boost from lower corporate tax rates. President Donald Trump signed a bill in December that slashed the corporate tax rate to 21% from 35%. “The tax cuts are probably partly in the market, but maybe not wholly in the market because we’re seeing things like companies raising the minimum wage, giving bonuses,” he said. “The people that are getting those $1,000 bonuses probably have a marginal propensity to consume of 99%.”

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It’s high time for that decline then.

• People Have A Hard Time Even Imagining How The Market Could Decline (ZH)

A calm complacency never before seen has fallen blanket-like over US equity markets. “The behavior of volatility has entirely changed since 2014,” noted BAML in a a recent note thanks to major central banks keeping interest rates near historic lows (and printed more money than ever before). As The Wall Street Journal points out, One sign of that: VIX closed below 10 more times last year than any others year in its history, and until today, closed below 10 for the first 5 days of 2018… And while correlation is not causation, there is a clear causal link between the conditioning now deeply embedded within investors’ minds and the endless expansion of central bank balance sheets…

As JPMorgan’s infamous quant guru Marko Kolanovic wrote, “the first four Fed hikes in a decade have failed to generate the revival of volatilities that many had expected at the end of last year,” and a wave of political uncertainty linked to U.S. tensions with North Korea and the new presidential administration also raised the prospect that market tumults could occur with greater frequency… but no… In fact worse still for The Fed, financial conditions eased as they tightened and vol collapsed to levels never seen before…

All of which has led, as The Wall Street Journal reports, to a number of investors abandoning defensive positions taken to protect against a market downturn, in the latest sign that many doubters are shedding caution as the long rally rolls on. “I haven’t seen hedging activity this light since the end of the financial crisis,” said Peter Cecchini, a New York-based chief market strategist at Cantor Fitzgerald. “It started in late 2016 and accelerated in the second half of the year.” But as Morgan Stanley warns in a recent note, what goes up (this fast) typically comes down… “Our team has observed a dramatic shift in sentiment since we initiated coverage in April. In April, it felt as if people were looking for a reason for the market to fail. Now, we have seen a total reversal with people having a hard time even imagining how the market could decline.”

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Recovery is just a story. Unless it has become viable to fight debt with more debt.

• World Bank Issues Warnings On Interest Rates And Inflation (G.)

Financial markets are complacent about the risks of sharply higher interest rates that could be triggered by better than expected growth in the global economy this year, the World Bank has warned. The Washington-based organisation said that much of the rich west was running at full capacity as a result of a broad-based upswing in activity, but were now vulnerable to a period of rising inflation that would prompt action from central banks. Launching the Bank’s global economic prospects, the lead author Franziska Ohnsorge said: “There could be faster than expected inflation that would mean faster than expected interest rate hikes.” Ohnsorge added that stock markets were at levels similar to those seen before the Wall Street Crash of 1929, while bond markets were assuming that low inflation would keep official borrowing costs down.

“Financial markets are vulnerable to unforeseen negative news. They appear to be complacent,” she said, while announcing that the Bank has revised up its 2018 forecast for the global economy following a better than expected performance in the US, China, the eurozone and Japan in 2017. In its half-yearly assessment, the Bank said a recovery in manufacturing, investment and trade would mean global growth of 3.1% this year, up from the 2.9% pencilled in last June. But it warned the acceleration in growth would be temporary unless governments implemented structural reforms to raise long-term growth potential. “The broad-based recovery in global growth is encouraging, but this is no time for complacency,” said Jim Yong Kim, the World Bank’s president.

“This is a great opportunity to invest in human and physical capital. If policy makers around the world focus on these key investments, they can increase their countries’ productivity, boost workforce participation, and move closer to the goals of ending extreme poverty and boosting shared prosperity.”

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They’re even planning to march in the Olympics opening ceremony together.

• South Korea’s Moon Says Trump Deserves ‘Big’ Credit For North Korea Talks (R.)

South Korean President Moon Jae-in credited U.S. President Donald Trump on Wednesday for helping to spark the first inter-Korean talks in more than two years, and warned that Pyongyang would face stronger sanctions if provocations continued. The talks were held on Tuesday on the South Korean side of the demilitarized zone, which has divided the two Koreas since 1953, after a prolonged period of tension on the Korean peninsula over the North’s missile and nuclear programs. North Korea ramped up its missile launches last year and also conducted its sixth and most powerful nuclear test, resulting in some of the strongest international sanctions yet. The latest sanctions sought to drastically cut the North’s access to refined petroleum imports and earnings from workers abroad. Pyongyang called the steps an “act of war”.

Seoul and Pyongyang agreed at Tuesday’s talks, the first since December 2015, to resolve all problems between them through dialogue and also to revive military consultations so that accidental conflict could be averted. “I think President Trump deserves big credit for bringing about the inter-Korean talks, I want to show my gratitude,” Moon told reporters at his New Year’s news conference. “It could be a resulting work of the U.S.-led sanctions and pressure.” Trump and North Korean leader Kim Jong Un exchanged threats and insults over the past year, raising fears of a new war on the peninsula. South Korea and the United States are technically still at war with the North after the 1950-53 Korean conflict ended with a truce, not a peace treaty.

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Ads are killing the experience. Most people by now have ad blockers. That whole industry needs drastic change.

• Apple’s Privacy Feature Costs Ad Companies Millions (G.)

Internet advertising firms are losing hundreds of millions of dollars following the introduction of a new privacy feature from Apple that prevents users from being tracked around the web. Advertising technology firm Criteo, one of the largest in the industry, says that the Intelligent Tracking Prevention (ITP) feature for Safari, which holds 15% of the global browser market, is likely to cut its 2018 revenue by more than a fifth compared to projections made before ITP was announced. With annual revenue in 2016 topping $730m, the overall cost of the privacy feature on just one company is likely to be in the hundreds of millions of dollars. Dennis Buchheim, general manager of the Interactive Advertising Bureau’s Tech Lab, said that the feature would impact the industry widely.

“We expect a range of companies are facing similar negative impacts from Apple’s Safari tracking changes. Moreover, we anticipate that Apple will retain ITP and evolve it over time as they see fit,” Buchheim told the Guardian. “There will surely be some continued efforts to ‘outwit’ ITP, but we recommend more sustainable, responsible approaches in the short-term,” Buchheim added. “We also want to work across the industry (ideally including Apple) longer-term to address more robust, cross-device advertising targeting and measurement capabilities that are also consumer friendly.” ITP was announced in June 2017 and released for iPhones, iPads and Macs in September. The feature prevents Apple users from being tracked around the internet through careful management of “cookies”, small pieces of code that allow an advertising technology company to continually identify users as they browse.

Its launch sparked complaints from the advertising industry, which called ITP “sabotage”. An open letter signed by six advertising trade bodies called on Apple “to rethink its plan … [that risks] disrupting the valuable digital advertising ecosystem that funds much of today’s digital content and services.” It also accused the company of ignoring internet standards, which say that a cookie should remain on a computer until it expires naturally or is manually removed by a user. Instead, the industry said, Apple is replacing those standards “with an amorphous set of shifting rules that will hurt the user experience and sabotage the economic model for the internet”.

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We haven’t heard the last of this flaw which is actually a feature.

• Antivirus Tools Caught With Their Hands In The Windows Cookie Jar (Reg.)

Microsoft’s workaround to protect Windows computers from the Intel processor security flaw dubbed Meltdown has revealed the rootkit-like nature of modern security tools. Some anti-malware packages are incompatible with Redmond’s Meltdown patch, released last week, because the tools make, according to Microsoft, “unsupported calls into Windows kernel memory,” crashing the system with a blue screen of death. In extreme cases, systems fail to boot up when antivirus packages clash with the patch. The problem arises because the Meltdown patch involves moving the kernel into its own private virtual memory address space. Usually, operating systems such as Windows and Linux map the kernel into the top region of every user process’s virtual memory space.

The kernel is marked invisible to the running programs, although due to the Meltdown design oversight in Intel’s modern chips, its memory can still be read by applications. This is bad because it means programs can siphon off passwords and other secrets held in protected kernel memory. Certain antivirus products drill deep into the kernel’s internals in order to keep tabs on the system and detect the presence of malware. These tools turn out to trash the computer if the kernel is moved out the way into a separate context. In other words, Microsoft went to shift its cookies out of its jar, and caught antivirus makers with their hands stuck in the pot. Thus, Microsoft asked anti-malware vendors to test whether or not their software is compatible with the security update, and set a specific Windows registry key to confirm all is well.

Only when the key is set will the operating system allow the Meltdown workaround to be installed and activated. Therefore, if an antivirus tool does not set the key, or the user does not set the key manually for some reason, the security fix is not applied. In fact, until this registry key is set, the user won’t be able to apply any Windows security updates – not just this month’s patches, but any of them in the future.

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UK and US will not give in any time soon.

• Julian Assange’s Stay In London Embassy Untenable, Says Ecuador (G.)

Ecuador’s foreign minister has said Julian Assange’s five-and-a-half-year stay in her country’s London embassy is “untenable” and should be ended through international mediation. The WikiLeaks founder has been holed up in Knightsbridge since the summer of 2012, when he faced the prospect of extradition to Sweden over claims that he sexually assaulted two women. He denies the accusations. Swedish prosecutors last year unexpectedly dropped their investigation into the allegations, which included a claim of rape. But Assange still faces arrest for breaching bail conditions if he steps outside the embassy and WikiLeaks has voiced fears that the US will seek his extradition and that there is a sealed indictment ordering his arrest. [..] Jeff Sessions, said last May that Assange’s arrest was now a “priority”.

Ecuador’s foreign minister, María Fernanda Espinosa, said her country was now seeking a “third country or a personality” to mediate a final settlement with the UK to resolve the impasse and said it was “considering and exploring the possibility of mediation”. “No solution will be achieved without international cooperation and the cooperation of the United Kingdom, which has also shown interest in seeking a way out,” she told foreign correspondents in Quito, according to Agence France-Presse. Assange, who has received numerous visitors to his modest quarters in the embassy, ranging from Nigel Farage to Lady Gaga, has described the period since his initial arrest as a “terrible injustice”. Not being able to see his children grow up was “not something I can forgive”, he said.

[..] On Tuesday evening, a lawyer for Assange appeared to welcome Ecuador’s proposal. He said his client had a right to asylum and argued that the risk of him being persecuted in the US had “escalated further in recent months under the Trump administration’s war on WikiLeaks” and that the investigation in Sweden had twice been discontinued. “If the UK wishes to show that it is a nation that respects its human rights obligations and commitments to the United Nations, it is time for Mr Assange to be allowed to enjoy his right to liberty, and fundamental right to protection against persecution in the United States,” he said. A spokesperson for the UK government said: “The government of Ecuador knows that the way to resolve this issue is for Julian Assange to leave the embassy to face justice.”

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“Julian Assange isn’t hiding from justice, he’s hiding from injustice.”

• Australia Must Rescue Assange From The Establishment That Tortured Manning (CJ)

Private Manning was tortured. As sure as if they’d strapped her down and set upon her flesh with fire and steel, she was tortured. United Nations special rapporteur on torture Juan E. Mendez stated unequivocally in 2012 that Manning’s treatment at the hands of the US government during her imprisonment was “cruel, inhuman and degrading,” after 295 legal scholars had already signed a letter in 2011 declaring that she was being “detained under degrading and inhumane conditions that are illegal and immoral.” Humans, like all primates, are evolutionarily programmed to be social animals, which is why solitary confinement causes our systems to become saturated in distress signals as real as pain or fear. Studies have shown that fifteen days of this draconian practice causes permanent psychological damage. Manning was in solitary confinement for nearly a year.

Manning attempted suicide in July of 2016. To punish her for her attempt to end her misery, they tortured her some more. She attempted suicide again three months later. The same sadistic regime which inflicted these horrors upon Manning has during the current administration prioritized the arrest of WikiLeaks editor-in-chief Julian Assange, and the international arms of the US power establishment have been working to facilitate that aim. The Guardian reports that Ecuador’s foreign minister is now saying Assange’s continued stay in the nation’s London embassy has become “untenable” and is seeking international mediation, to which a spokesman for the UK government has responded that “The government of Ecuador knows that the way to resolve this issue is for Julian Assange to leave the embassy to face justice.”

Justice. A government whose international operations are uniformly indistinct from America’s wants Assange to leave political asylum and trust his life to an international power establishment that tortures whistleblowers in the name of “justice”. Julian Assange isn’t hiding from justice, he’s hiding from injustice. What sane human being wouldn’t? Time after time after time we are shown that whistleblowers, leakers, and those who facilitate them are not shown anything remotely resembling justice by this depraved Orwellian establishment. Which is why Australia must intervene and protect him.

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The value of your life plunges along with that of others.

• The Fog of War: Global Airstrike Deaths Up At Least 82% In 2017 (RT)

More than 15,000 civilians were killed by explosive weapons in 2017, a 42 percent increase on last year, while deaths by airstrikes increased by 82 percent, a new study by Action on Armed Violence has found. The research shows that, while official stats on civilian casualties are on the rise, they’re still modest in comparison to the “true figures.” “The US has a habit of assuming all fighting-aged men are, in fact, fighters…This is the hammer that the US uses to establish the truth in war,” the organization’s Executive Director Iain Overton told RT. Much of the increase is due to the battles to retake Islamic State strongholds in Mosul, Iraq and Raqqa, Syria. The Syrian conflict and the Saudi-led coalition bombing Yemen also accounted for a large proportion of civilian deaths.

The survey, found 8,932 civilians were killed by air-launched explosives in the first 11 months of 2017, compared to 4,902 during the same period in 2016. “At least 60 countries around the world saw explosive weapons being used last year,” Action on Armed Violence’s Executive Director Iain Overton told RT. “We have always acknowledged that our data would likely represent a lower figure of total civilians killed or injured than might actually be the case,” Overton said. “This is particularly true when there is a single fatality or wounding, and particularly in under-reporting of those injured by a bomb blast.” “When the fog of war descends casualty figures often fall short – both because they become highly politicized and because accurate reporting is often a casualty of war itself,” he added.

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Europe has no morals left.

• Scores Feared Dead And Up To 100 Missing After Boat Sinks Off Libya Coast (G.)

Survivors from a boat that foundered off Libya’s coast on Tuesday said about 50 people who had embarked with them were feared dead, while the coastguard said the number of missing might be as high as 100. Libyan coastguard vessels picked up nearly 300 migrants from three boats off the coast of the North African country on Tuesday, but one rubber boat was punctured and the coastguard only found 16 survivors clinging to its wreckage. “We found the migrant boat at about 10 o’clock this morning. It had sunk and we found 16 migrants. The rest were all missing and, unfortunately, we didn’t find any bodies or [other] survivors,” said Nasr al-Qamoudi, a coastguard commander.

Several of the survivors, who were brought back to a naval base in Tripoli, said there were originally about 70 people on board the boat when it set off near the town of Khoms, east of the capital. A coastguard statement later said that “at least 90-100” migrants were missing. The two other migrant boats were found off Zawiya, west of Tripoli. [..] Libya is the most common departure point for migrants trying to reach Europe from Africa by sea. More than 600,000 have crossed the central Mediterranean in the past four years, generally travelling in flimsy inflatable craft provided by smugglers that often break down or puncture. Under heavy pressure from Italy, some Libyan armed factions have blocked smuggling since last summer. Libya’s Italian-backed coastguard has also stepped up interceptions, returning migrants to Libya, where they are detained and often re-enter smuggling networks.

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Debt Rattle November 21 2017

Nov 212017
 
 November 21, 2017  Posted by at 9:51 am Finance Tagged with: , , , , , , , , , ,  6 Responses »


Notting Hill Gate Station, London 1860s

 

• China’s $15 Trillion Problem: Investors Don’t Believe in Losses (BBG)
• Household Debt, Size Of Home Loans A Worry – Australia Regulator (ND)
• Fiscal Sundown In America, Part 1 (Stockman)
• The Approaching Silicon Valley Meltdown (St. Cyr)
• Merkel Prefers Fresh Elections To Minority Government As Talks Fail (G.)
• Italy To Go Beyond GDP, Measure La Dolce Vita (BBG)
• Your Retirement Cash May Be In The Caymans. Can You Get It Back? (IBT)
• Room Rates At Trump’s Hotels Have Fallen By Up To 63% (Tel.)
• Why Are We Helping Saudi Arabia Destroy Yemen? (Ron Paul)
• Spain ‘Ready To Discuss’ Greater Fiscal Autonomy For Catalonia (G.)
• 37.5% of Greece’s Children Are At Risk Of Poverty (KTG)
• Greek Online Foreclosures To Start With Big Debtors’ Assets (K.)
• EU Orders Greece To Recover Up To €55 Million In State Aid (R.)
• As Oceans Warm, the World’s Kelp Forests Begin to Disappear (Yale)

 

 

They wouldn’t let that happen…

• China’s $15 Trillion Problem: Investors Don’t Believe in Losses (BBG)

When China unveiled plans on Friday to end the implicit guarantees underpinning asset-management products worth trillions of dollars, it should have been a bombshell for the nation’s savers. But for Yolanda Yuan and other individual investors who’ve piled into AMPs issued by banks, insurers and securities firms, the government’s announcement was largely a non-event. The reason: they didn’t believe it. “I don’t think any big banks will dare to take the risk of allowing defaults on AMPs, as that will lead to a flood of fund redemptions,” said Yuan, a 29-year-old sales manager at a state-run financial company in Shanghai. She has about 100,000 yuan ($15,069) of personal savings in products covered by the new regulations.

Over the past 13 years, assets in Chinese AMPs have swelled from almost nothing to $15 trillion in large part due to one key assumption: that investors would be made whole no matter what happened to the products’ underlying assets. Authorities are now moving to quash that belief amid concern that rampant moral hazard is distorting market prices and making the financial system vulnerable to crises. Yuan’s enduring faith in implicit guarantees suggests the government’s task won’t be easy. It may ultimately require an AMP blowup for Chinese regulators to convince investors that they’re serious about the new rules, which are set to take effect in mid-2019. But a major product failure is risky: In a worst-case scenario, it could spark a destabilizing stampede out of AMPs, which have become a key source of funding for banks and other financial institutions.

It’s not clear that’s a chance Beijing is willing to take, despite last week’s rhetoric. “It’s very hard,” said David Loevinger, a former China specialist at the U.S. Treasury Department who now works at TCW Group in Los Angeles. “You have to show people that there are no longer guarantees. The only way to show it is to force investors to take losses. They have to see it to believe it.”

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Not at all late.

• Household Debt, Size Of Home Loans A Worry – Australia Regulator (ND)

The banking regulator is concerned about the size of mortgages being taken on by homeowners, issuing a warning to both lenders and borrowers. Australian Prudential Regulation Authority chairman Wayne Byres on Tuesday said Australia’s household debt was high and would continue to rise, and that too many loans were still being approved above people’s ability to pay. “Household indebtedness is high. Perhaps more importantly, the trajectory is clearly for it to rise further,” Mr Byres told the Australian Securitisation Forum in Sydney. “Lenders need to be vigilant to ensure their policies and practices are both prudent and responsible. “In short, heightened risk requires heightened prudence by APRA but also – and preferably – by lenders and borrowers themselves.”

Mr Byres said APRA’s moves to limit investor and interest-only mortgages had worked, bringing growth in lending to property investors back into line with owner-occupier lending. APRA decreed in March that big banks should limit interest-only loans to 30% of new residential mortgages, on top of a 10% cap on investor lending growth. But Mr Byres said the size of loans being issued by the big banks was still an issue, with consumers vulnerable if historically low interest rates are lifted by the Reserve Bank of Australia. Mr Byres said there had been only a slight drop in the proportion of borrowers being granted loans six times the amount of their income – a level at which they would spend about half their net income on repayments if interest rates returned to their long-term average of about 7%.

Such leverage was far higher in Australia than in comparable markets such as the UK and Ireland, he said. That left considerable potential for banks to further tighten lending practices, Mr Byres said. “Aided by file reviews conducted by external auditors, we have confirmed there is more to do in this area to improve serviceability measures, particularly in relation to the assessment of living expenses and the identification of a borrower’s existing debts.” APRA’s move to limit investor lending has borne fruit, with interest-only lending accounting for about 23% of new lending in the three months to September 30, well below its 30% limit.

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Dave’s still an angry young man.

• Fiscal Sundown In America, Part 1 (Stockman)

[..] at least the Democrats did attempt to finance the trillions in new tax credits and Medicaid costs generated by ObamaCare with some revenue raisers such as the medical device and insurance company taxes and the added levies on upper income earners and investment returns. Back in the day, in fact, this kind of “tax and spend” welfare statism is exactly what the Democrats stood for. And it was also the party’s political Achilles Heel because it enabled the GOP to periodically arouse the electorate on the dangers of “big government” and thereby obtain a resurgence in Washington’s corridors of political power. But after the break from the old-time fiscal religion of balanced budgets during the so-called Reagan Revolution in 1981, the GOP has slowly morphed into the “borrow and spend” party.

Indeed, as the historically ordained party of fiscal rectitude, the GOP’s apostasy has enabled two-party complicity in a mindless regime of fiscal kick-the-can since the turn of the century. That lapse, in turn, acutely aggravated an already perilous fiscal equation owing to the baby boom retirement wave and the Fed induced slowdown in the trend rate of economic growth (see below). In this context, it should be noted that the Senate bill is a farce insofar as it claims to be a middle class tax cut and growth stimulant – since it actually accomplishes neither. On a honestly reckoned basis (counting debt service and eliminating budget gimmicks), however, it would add $2.2 trillion of new debt over the next decade on top of the $12 trillion already built-in under current policy.

Accordingly, the Senate version of Trumpite “tax reform” would accelerate the public debt toward $35 trillion by 2027 or 140% of GDP. Yet all of this added red ink would be “wasted” on cuts for 150 million individual taxpayers that are written in disappearing ink (i.e. they lapse after 2025) and on misbegotten corporate rate cuts that will do virtually nothing for economic growth. Indeed, contrary to the old Washington saw about “wasting a good crisis” the Senate bill involves something more like creating a good crisis and wasting it, too.

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“The Valley” (and its entire ancillary complex aka “the disruptor class”) is on the verge of receiving a wake up call..”

• The Approaching Silicon Valley Meltdown (St. Cyr)

[..] there has been one outlier, for the most part, which seemed to skirt around all the current chaos, relatively unscathed. That would be Silicon Valley and all its ancillary provinces aka “Disruptive Tech.” So far the coveted group known collectively as “FAANG” (e.g., Facebook™, Apple™, Amazon™, Netflix™, Google™) seems to have held the “barbarians at the gates” known as investors relatively at bay, or “stable” in their positions, if you will. What has been, anything but, is their cohort of IPO brethren that were supposed to have joined them. “The Valley” seems to fit nicely as a moniker for a now self-recognized nation-state, after-all, if you include the market cap of these and a few others (e.g., Tesla™ and more) their combined valuations rival those of sovereign nations.

For all intents and purposes one could say they’re already developing and embracing their own newly formed currency, aka “Bitcoin™.” All that’s needed would seem is proposing a charter, and recognition. And that’s why it’s all about to burst, in my opinion. All of it. Why? Just as there are always clues, it’s in the consistency of further developments, along with weighing any prior, coupling them with the current, then trying to extrapolate whether or not they still stand, or are valid. This is the work most people (especially those paraded across the sycophantic mainstream business/financial media) won’t do. And not doing so for many – as of today – will have ramifications, maybe for a lifetime. So what’s the “Why?” Of course, it’s only my opinion, but I stand behind it more fervently than ever before. And it is this…

“The Valley” (and its entire ancillary complex aka “the disruptor class”) is on the verge of receiving a wake up call, the likes, that may make the dot-com era look relatively “stable” in hindsight. To use the political as an analogy, let’s just say, I believe the newly formed “nation-state” of FAANG will have much more in common with the turmoil in Brazil, Spain, Venezuela, and a few others in the coming months as it continues to desperately cling to the mythical Utopia of magical creatures known as unicorns, and cash out riches known as IPO’s. That “Utopia” has already been found to be a Potemkin Village made of spreadsheet papier-mâché analysis and valuation metrics, not worth the digital paper they’re written on.

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All of a sudden, both Merkel’s career and Germany’s role in Europe are under fire.

• Merkel Prefers Fresh Elections To Minority Government As Talks Fail (G.)

Angela Merkel has indicated that she would rather have fresh elections than try to rule in a minority government as the collapse of German coalition talks posed the most serious threat to her power since she became chancellor more than a decade ago. Merkel, who has headed three coalitions since 2005, said she was “very sceptical” about ruling in a minority government and suggested she would stand again as a candidate if elections were called in the new year, telling public broadcaster ARD she was “a woman who has responsibility and is prepared to take responsibility in the future”. Exploratory talks to form the next German government collapsed on Sunday night after the pro-business Free Democratic Party (FDP) walked out of marathon negotiations with Merkel’s Christian Democrats, its Bavarian sister party, the Christian Social Union (CSU), and the Green party.

Germany’s president had earlier urged political parties to resume efforts to a build a governing coalition following a meeting with Merkel. “I expect the parties to make the formation of a new government possible in the foreseeable future,” Frank-Walter Steinmeier said, adding that the parties had a responsibility that “cannot be simply given back to the voters.” Elections in September saw Merkel’s bloc poll first place but with a reduced share of the vote and with the FDP and Greens as its only plausible coalition partners. The collapse in the talks and possibility of fresh elections brings further uncertainty for the British government over Brexit, which had hoped that a strong German coalition, including the FDP, might help smooth the next phase of negotiations.

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“There may be cases when a government is willing to press ahead with a policy even if it reduces short-term growth because it produces benefits in terms of broader welfare.”

• Italy To Go Beyond GDP, Measure La Dolce Vita (BBG)

Italy has long prided itself for its quality of life – and with good reason. Italy may be only just recovering from a long economic crisis, but its citizens are healthier and live longer than those of most other countries in the world. It is perhaps no coincidence then that the Italian government is pioneering the use of welfare indicators in its budget process. As of this year, the finance ministry will produce official forecasts for 12 indicators, ranging from income inequality to CO2 emissions to obesity – the first country to do so in the EU and the G7. Measuring “la dolce vita” is a complex task, but one other countries should consider too. Growth will remain the main indicator to judge a country’s economic success because of its conciseness.

But, to the extent they can, it is hard to see why governments should not monitor the broader impact their policies have on the well-being of citizens. The push to go beyond GDP as a measure of welfare dates back at least to former U.S. presidential candidate Robert Kennedy. “The gross national product does not allow for the health of our children, the quality of their education or the joy of their play,” said Kennedy in a speech in 1968. Since then, economists have produced a long list of reports on well-being – the most famous of which was probably one by the Stiglitz-Sen-Fitoussi Commission set up by the French Government in 2008. Yet, so far this paperwork has produced little action: Governments still base their economic policy-making primarily on the basis of GDP.

There are very good reasons for continuing to do so. The choice of other welfare indicators is arbitrary and may be imprecise. In Italy, one of the biggest drivers of inequality is the gap between the young, whose incomes have fallen the most during the crisis, and the elderly and yet this is not included in the range of selected measures. There is also an issue of weighting: How will the Italian government decide which of the 12 indicators it has chosen is the most important? Finally, forecasting some variables such as “predatory crime” is bound to pose some serious headaches. Yet, this does not mean the principle is wrong. There may be cases when a government is willing to press ahead with a policy even if it reduces short-term growth because it produces benefits in terms of broader welfare.

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Chasing yield. What ultra low rates do.

• Your Retirement Cash May Be In The Caymans. Can You Get It Back? (IBT)

The release of the so-called “Paradise Papers” touched off new scrutiny of how moguls, celebrities and politicians stash their cash in offshore tax havens. The practice, though, is hardly limited to the global elite. In fact, government documents show that local government officials have sent hundreds of billions of dollars of public sector workers’ retirement savings to a tiny archipelago most famous for white-sand beaches — and laws that shield investors from taxes. Operating outside the U.S. legal system, the offshore accounts in the Cayman Islands give Wall Street firms leeway to make complex international investments and to earn big fees off investors’ capital. But with offshore accounts featuring prominently in high-profile Ponzi schemes, some critics warn that the use of tax havens can endanger the retirement savings of millions of teachers, firefighters, cops and other public workers — a situation that could put taxpayers on the hook for losses if the investments go bust, or the money goes missing.

The tidal wave of cash has flowed from public pension systems into so-called “alternative investments”: private equity, hedge funds, venture capital firms and real estate. While many alternative investment firms operate in Lower Manhattan, more than a third of all the cash in those private funds flows through vehicles domiciled in the Caymans, according to Securities and Exchange Commission records reviewed by International Business Times. Those same records show that public pension plans, university endowments and other nonprofits have funneled a massive $1.8 trillion into alternative investments.

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From the Telegraph’s travel section. Is it Airbnb?

• Room Rates At Trump’s Hotels Have Fallen By Up To 63% (Tel.)

There is further evidence that Donald Trump’s occupation of the Oval Office has had a negative impact on his business empire, with new research showing that average room rates have fallen by as much as 63%at all but one of his 13 hotels. Hardest hit was Trump Las Vegas. The average cost of a two-night stay in a standard double room during January 2017, just before his inauguration, was priced at £637, according to analysis by FairFX, the currency provider. But a two-night break in January 2018, one year on, can be secured for just £237.

At Trump Turnberry, his Ayrshire golf hotel, the average cost of a two-night stay has fallen by 57%, from £498 to £215, while steep drops have also been found for stays at Trump Doral in Miami (down 53%), Trump Washington DC (down 52%), Trump Vancouver (down 48%), and Trump New York (down 32%). Only the president’s Irish hotel, Trump Doonbeg, has seen a rise in rates, from £334 to £357. “One year after Trump’s inauguration, prices for a weekend in one of his hotels have for the most part decreased,” said Ian Strafford-Taylor, FairFX CEO. “While big events, like the inauguration in Washington, will usually cause prices to rise in that city for a particular weekend, the decreases in other places suggest that it doesn’t necessarily pay to be president.”

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“Does holding hands with Saudi Arabia as it slaughters Yemeni children really reflect American values?”

• Why Are We Helping Saudi Arabia Destroy Yemen? (Ron Paul)

It’s remarkable that whenever you read an article about Yemen in the mainstream media, the central role of Saudi Arabia and the United States in the tragedy is glossed over or completely ignored. A recent Washington Post article purporting to tell us “how things got so bad” explains to us that, “it’s a complicated story” involving “warring regional superpowers, terrorism, oil, and an impending climate catastrophe.” No, Washington Post, it’s simpler than that. The tragedy in Yemen is the result of foreign military intervention in the internal affairs of that country. It started with the “Arab Spring” which had all the fingerprints of State Department meddling, and it escalated with 2015’s unprovoked Saudi attack on the country to re-install Riyadh’s preferred leader.

Thousands of innocent civilians have been killed and millions more are at risk as starvation and cholera rage. We are told that US foreign policy should reflect American values. So how can Washington support Saudi Arabia – a tyrannical state with one of the worst human rights record on earth – as it commits by what any measure is a genocide against the Yemeni people? The UN undersecretary-general for humanitarian affairs warned just last week that Yemen faces “the largest famine the world has seen for many decades with millions of victims.” The Red Cross has just estimated that a million people are vulnerable in the cholera epidemic that rages through Yemen. And why is there a cholera epidemic? Because the Saudi government – with US support – has blocked every port of entry to prevent critical medicine from reaching suffering Yemenis.

This is not a war. It is cruel murder. The United States is backing Saudi aggression against Yemen by cooperating in every way with the Saudi military. Targeting, intelligence, weapons sales, and more. The US is a partner in Saudi Arabia’s Yemen crimes. Does holding hands with Saudi Arabia as it slaughters Yemeni children really reflect American values? Is anyone even paying attention?

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What they refused to do 5 years ago. Now withdraw the warrants for Catalan elected officials.

• Spain ‘Ready To Discuss’ Greater Fiscal Autonomy For Catalonia (G.)

Madrid is paving the way for Catalonia to be given the power to collect and manage its own taxes, similar to the system enjoyed by the autonomous Basque country, in an attempt to defuse the crisis over an illegal referendum on independence for the region. Senior sources in the Spanish government have told the Guardian that although there remains intense opposition within the ruling People’s party (PP) to any future referendum on self-determination, there is a renewed willingness to open discussions on a new fiscal pact under which Catalonia would have greater control of its finances. “If the Catalans ask for a fiscal pact, we are ready to discuss this,” one senior source said.

“The Basque country [in northern Spain] and Navarre collect their own taxes. They have their own system and there is a meeting between the Basque country and the central government and they decide how much they contribute to foreign policy and defence. It‘s a negotiation. Every five years. “We are open to discuss this, taking into account that the constitution of Spain also establishes solidarity [among the Spanish regions].” A fiscal pact was proposed in 2012 by Catalonia’s then president, Artur Mas, but the Spanish government blocked the move over concerns that it would be destabilising at a time when Spain appeared to be in dire economic peril. A cross-party commission on potential constitutional reform opened discussions last week on a new settlement between the Catalans and the Spanish government, with the support of the prime minister, Mariano Rajoy.

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Child poverty is high all over the EU. In Greece, it’s criminal.

• 37.5% of Greece’s Children Are At Risk Of Poverty (KTG)

Year in, year out since 2010, the number of children at risk of poverty is continuously increasing in Greece. With 37.5%, Greece is tops among members of the eurozone and third after Romania and Bulgaria within the European union. Four in 10 children aged up to 17 years old in Greece are at risk of poverty or social exclusion, Europe’s statistical agency Eurostat has found, putting the crisis-hit country at the top of the eurozone child poverty scale. In its report published on Monday and using 2016 data, Eurostat reported that with 37.5% of children facing the threat of poverty, Greece has the highest rate of at-risk children in the eurozone and the third highest in the European Union, behind Romania (49.2%) and Bulgaria (45.6%). At the opposite end of the scale, the lowest shares of children at risk of poverty or social exclusion were recorded in Denmark (13.8%), Finland (14.7%) and Slovenia (14.9%), ahead of the Czech Republic (17.4%) and the Netherlands (17.6%).

Greece also saw the highest rise in the number of at-risk children in the period between 2010 and 2016, growing 8.8% from a pre-crisis level of 28.7%. Cyprus also saw a spike of 7.8%, followed by Sweden (5.4%) and Italy (1.1%). In total in 2016, 24.8 million children in the EU, or 26.4% of the population aged up to 17 years old, were at risk of poverty or social exclusion. This means that the children were living in households with at least one of the following three conditions: at-risk-of-poverty after social transfers (income poverty), severely materially deprived or with very low work intensity. The proportion of children at risk of poverty or social exclusion in the EU has slightly decreased over the years, from 27.5% in 2010 to 26.4% in 2016, Eurostat reported.

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Prediction: a big mess.

• Greek Online Foreclosures To Start With Big Debtors’ Assets (K.)

The first online foreclosures, set to start on November 29, will concern the assets of individuals or enterprises with debts of €500,000 or more (in some cases over €2 million). Villas, large buildings, historic buildings with one owner, plots of land, professional facilities and even parking spaces are among the assets slated to go under the electronic hammer as of end-November, when the online process finally begins. The amount of debts banks are seeking from these foreclosures comes to tens of millions of euros and concerns loans issued between 2005 and the outbreak of the crisis, when credit flowed handsomely.

Such is the case of one property with a single owner that will be auctioned for that individual’s debts of over €1.5 million to two systemic banks. The amount banks hope to claim is just €100,000, as it is common practice that the starting price is far smaller than the actual debt. The banks have vowed not to auction the homes of vulnerable groups or families without any other assets, but bank sources cannot rule out any exceptions made either intentionally or not, as 98% of debtors have failed to update their property details.

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The EU shouldn’t get to order Greece to do anything.

• EU Orders Greece To Recover Up To €55 Million In State Aid (R.)

The European Commission ordered Greece on Monday to recover up to €55 million in state aid from Hellenic Defense Systems (HDS), a largely state-owned company that makes defense-related products. Greece granted a number of support measures between 2004 and 2011 including a direct grant of €10 million, a capital increase of €158 million and state guarantees for loans of up to €942 million. The Commission said in a statement that its investigation had concluded that the vast majority of Greek measures fell outside the scope of EU state aid control because they served Greek security interests. However, some measures worth up to €55 million did amount to illegal state aid because they supported the HDS’s civil activities, which include small pistols, explosives for construction and fireworks.

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Global.

• As Oceans Warm, the World’s Kelp Forests Begin to Disappear (Yale)

A steady increase in ocean temperatures — nearly 3 degrees Fahrenheit in recent decades — was all it took to doom the once-luxuriant giant kelp forests of eastern Australia and Tasmania: Thick canopies that once covered much of the region’s coastal sea surface have wilted in intolerably warm and nutrient-poor water. Then, a warm-water sea urchin species moved in. Voracious grazers, the invaders have mowed down much of the remaining vegetation and, over vast areas, have formed what scientists call urchin barrens, bleak marine environments largely devoid of life. Today, more than 95 percent of eastern Tasmania’s kelp forests — luxuriant marine environments that provide food and shelter for species at all levels of the food web — are gone.

With the water still warming rapidly and the long-spine urchin spreading southward in the favorable conditions, researchers see little hope of saving the vanishing ecosystem. “Our giant kelp forests are now a tiny fraction of their former glory,” says Craig Johnson, a researcher at the University of Tasmania’s Institute for Marine and Antarctic Studies. “This ecosystem used to be a major iconic feature of eastern Tasmania, and it no longer is.” The Tasmanian saga is just one of many examples of how climate change and other environmental shifts are driving worldwide losses of giant kelp, a brown algae whose strands can grow to 100 feet.

In western Australia, increases in ocean temperatures, accentuated by an extreme spike in 2011, have killed vast beds of an important native kelp, Ecklonia radiata. In southern Norway, ocean temperatures have exceeded the threshold for sugar kelp — Saccharina latissima — which has died en masse since the late 1990s and largely been replaced by thick mats of turf algae, which stifles kelp recovery. In western Europe, the warming Atlantic Ocean poses a serious threat to coastal beds of Laminaria digitata kelp, and researchers have predicted “extirpation of the species as early as the first half of the 21st century” in parts of France, Denmark, and southern England.

Read more …

Debt Rattle August 26 2017

Aug 262017
 
 August 26, 2017  Posted by at 7:40 am Finance Tagged with: , , , , , , , , ,  6 Responses »


Vincent van Gogh Self-Portrait with Straw Hat Aug-Sep 1887

 

• Draghi Warns Of Serious Risk To Global Economy From Rising Protectionism (CNBC)
• Yellen and Draghi Both Defend Post-Crisis Financial Regulation (BBG)
• Central Banks’ Pursuit Of Inflation Has Turned Sisyphean (CNBC)
• IMF: We See A Broad-Based Global Recovery (CNBC)
• Rickards: September Meltdown Ahead (DR)
• Negative Interest Rates Have Come To America (Black)
• Adults Take Over at Uber, Cost Cutting Starts (WS)
• Sears Revenues to Hit Zero in 3 Years. But Bankruptcy First (WS)
• Health-Care Costs Could Eat Up Your Retirement Savings (BBG)
• Schaeuble Defends Tough Line On Greek Reforms (K.)
• Minister: Young Greeks Fleeing A ‘Debt Colony’ (K.)

 

 

Only globalization can save you. In other news: all your base are belong to us.

• Draghi Warns Of Serious Risk To Global Economy From Rising Protectionism (CNBC)

European Central Bank President Mario Draghi said protectionist policies pose a “serious risk” for growth in the global economy. At a gathering of central bankers, economists and others in Jackson Hole, Wyoming, on Friday, Draghi said the global economy is firming up. He told the audience in a speech that “a turn towards protectionism would pose a serious risk for continued productivity growth and potential growth in the global economy.” The comments come at a time when President Donald Trump is taking a hard look at the U.S.’s trade agreements around the world, pushing to reduce trade deficits and make conditions more favorable for American manufacturers.

Trump also came to office promising American business leaders he would break down regulations, which he said have constrained economic growth. The financial industry in particular seems poised to benefit if Obama-era regulations on banks and Wall Street get dismantled or diluted. On Friday, Draghi, a former Goldman Sachs executive, said “there is never a good time for lax regulation” especially because it can create incentives that lead to higher risk-taking. “By contrast, the stronger regulatory regime that we have now has enabled economies to endure a long period of low interest rates without any significant side-effects on financial stability, which has been crucial for stabilizing demand and inflation worldwide,” Draghi said. “With monetary policy globally very expansionary, regulators should be wary of rekindling the incentives that led to the crisis.”

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MO: make a godawful mess, then switch to being sensible.

• Yellen and Draghi Both Defend Post-Crisis Financial Regulation (BBG)

The world’s two most powerful central bankers on Friday delivered back-to-back warnings against dismantling tough post-crisis financial rules that the Trump administration blames for stifling U.S. growth. ECB President Mario Draghi, speaking at the Federal Reserve’s annual retreat in Jackson Hole, Wyoming, said it was a particularly dangerous time to loosen regulation given that central banks are still supporting their economies with accommodative monetary policies. That warning followed earlier remarks by Fed Chair Janet Yellen, who offered a broad defense of the steps taken since the 2008 financial-market meltdown and urged that any rollback of post-crisis rules be “modest.” The combined effect was “a subtle shot across the bow of those who seek deregulation,” said Michael Gapen, chief U.S. economist at Barclays in New York.

The complementary speeches come at what may be the tail end of Yellen’s tenure at the Fed’s helm. President Donald Trump is not expected to reappoint her when her leadership term expires in February, according to economists surveyed by Bloomberg. Gapen said that by delivering overlapping messages, Yellen and Draghi could help amplify their points, but “in practice that’s not the agenda the Trump administration is likely to seek.” In a talk aimed broadly at defending the merits of globalization, Draghi said it’s crucial to make sure open policies on trade and global finance should be safeguarded with regulations designed to make globalization fair, safe and equitable. “We have only recently witnessed the dangers of financial openness combined with insufficient regulation,” Draghi said, referring to the global financial crisis of 2008-09.

Any reversal of the regulatory response to that crisis, he added, “would call into question whether the lessons of the crisis have indeed been learnt – and thus whether financial integration can still be considered safe.” That point was all the more important given that central banks are continuing to provide stimulus to their economies. “With monetary policy globally very expansionary, regulators should be wary of rekindling the incentives that led to the crisis,” Draghi said.

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Blind as bats.

• Central Banks’ Pursuit Of Inflation Has Turned Sisyphean (CNBC)

Central banks globally have spent years fruitlessly trying to awaken long-dormant inflation, and some analysts say it’s time to stop trying. Anemic inflation has become a bugaboo for global central banks, with frequent mentions in the meeting minutes. It’s been a speed bump in the U.S. Federal Reserve’s path toward normalizing interest rates, with members voting at the July meeting to keep the current target rate in a 1% to 1.25% range. Minutes from that July decision show some policymakers were pushing for caution on rate hikes due to low inflation. The Fed’s target is for 2% inflation, and its preferred measure of inflation is at about 1.5%. It’s not limited to the U.S. by any stretch: Japan’s colossal struggle to goad inflation to life has been a stalemate at best. Since the Bank of Japan launched a massive quantitative easing program in 2013, the country has exited deflation.

But even the September 2016, introduction of a “yield-curve control” policy, seen by markets as essentially a “whatever it takes” stance on boosting inflation, hasn’t seemed to move the needle much. Japan’s core consumer price index, which includes oil products and excludes fresh food, rose 0.5% year-on-year in July, Reuters reported on Friday. That compared with the BOJ’s goal for inflation to meet or exceed its target of 2% “in a stable manner.” It also was oddly jarring compared with Japan’s economy growing a better-than-expected annualized 4% year-on-year in the April-to-June quarter. Some analysts have said the persistently low inflation was a signal that central banks shouldn’t be using inflation to guide monetary policy. “If we’ve got growth at trend, which most places appear to have, if we’ve got the unemployment rate at full employment, which most places appear to have, then we shouldn’t even worry about what inflation is doing,” Rob Carnell, head of research for Asia at ING, said recently.

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The future’s are so bright you just got to wear shades.

• IMF: We See A Broad-Based Global Recovery (CNBC)

The global economy is doing well, the chief economist for the International Monetary Fund told CNBC on Friday. The IMF’s new forecast on the world’s economy is expected in about five weeks, Maury Obstfeld said. And while he wouldn’t divulge what that may be, he did say the organization “certainly” isn’t going to lower the number from its last projection. In July, the IMF forecast global economic growth of 3.5% for 2017 and 2.5% for 2018. “We see broad-based recovery. The importance is that it’s really broad-based in a way that it hasn’t been in a decade,” Obstfeld said in a “Closing Bell” interview from the sidelines of the Federal Reserve’s symposium in Jackson Hole, Wyoming.

That doesn’t mean there won’t be concerns ahead. While there are not any immediate downside risks, there are longer-term ones, he noted. “One risk is just continuing tepid growth. What we’re seeing now is a cyclical upswing, but potential growth remains slow,” Obstfeld said. “That brings with it political tensions which we’ve seen spilling over into protectionist rhetoric, for example.” Earlier Friday, ECB Mario Draghi told the audience at Jackson Hole that protectionist policies pose a “serious risk” for growth in the global economy. The comments come at a time when President Donald Trump has been scrutinizing U.S. trade agreements around the world in a push to reduce trade deficits and boost conditions for American manufacturers.

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Ice-9.

• Rickards: September Meltdown Ahead (DR)

Jim Rickards joined Alex Stanczyk at the Physical Gold Fund to discuss current destabilizing factors that could drastically impact investors. During the first part of their conversation the economic expert delved into gold positioning for the future, the expanding threats from North Korea and liquidity in global markets. To begin Rickards’ was prompted on his latest analysis over North Korea and the international threat the country poses going forward. The currency wars expert urged, “The fact is, the threats from North Korea, even if not to the mainland, still threaten U.S territory. There are a lot of Americans living there. As this escalation continues in sequence the problem is not new.” “The threat of North Korea has been going on for decades and has escalated since the mid 1990’s. Bill Clinton and George W. Bush both offered sanctions relief for the country in exchange for program reductions.

The Obama administration essentially did nothing for eight years. I do think the Trump administration at least deserves credit for clarity.” “Trump has identified that he is not willing to negotiate to arrive at negotiations. They have indicated to North Korea that if the regime wishes to come to the table what the White House must see is a verified cessation of weapons programs. In exchange they could offer potential sanctions relief and even the possibility of integrating the North Korean economy into the global economy. The North Koreans are actually very rich in natural resources and could be a commodity driven exporter.” “The U.S is not going to be bullied. It will continue to operate in South Korea with joint military exercises. One by one the North Koreans have come to understand missile technology and it seems like they are within the final steps toward miniaturization of weapons.”

[..] The author of Road to Ruin highlighted the severity of the debt ceiling and what it means for the economy. Rickards went on, “There are two really big, but separate, deadlines converging on September 29th. The first is the debt ceiling. This has to deal with the borrowing authority of the U.S Treasury and to be able to pay the bills of the government.” “That authority includes the money to cover social security, medicare, medicaid, military and all of the operations within the budget. Until it is authorized, the Treasury is essentially running on fumes. They are running out of cash. They need Congress to authorize an increase in the debt ceiling so they can borrow money so they can pay for their bills. The problem is that Congress is not functional right now.”

[..] Rickards then turned to warn how liquidity can be frozen by governments. “In October 1987, the major U.S stock market, and in particular the Dow Jones, fell 22% in one day. That kind of a drop would be 4,000 Dow points. When I explain that move to investors they typically respond that there are measures in place to freeze the market and stop such a loss.” “My immediate reaction is, which makes you feel more concerned; thousand point drops, or a closed exchange? At least with a significant point drop you can still get out at a price. If you shut the market down, that’s Ice-9. My thesis is that if you shut down one market the demand for liquidity then just moves to another market, requiring another sector shutdown.”

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“..in principle there’s nothing wrong with paying a bank a reasonable fee to safeguard your money. But that’s not what banks do.”

• Negative Interest Rates Have Come To America (Black)

Negative interest rates are particularly prominent in Europe. Starting back in 2014, the European Central Bank (ECB) slashed its main interest rate to below zero. One bizarre effect of this policy is that some banks have passed on these negative interest rates to their retail depositors. This trend has persisted across Europe, Japan, and many other parts of the world. Yet at least Americans were able to breathe a sigh of relief that negative interest rates hadn’t crossed the Atlantic. Well, that’s not entirely true. Recently I was reading through Bank of America’s most recent annual report; it’s filled with some shocking facts about the -real- level of wealth in the Land of the Free… which I’ll tell you more about next week. But here’s one of the things that caught my eye: Bank of America has $592.4 billion in deposits from retail customers, i.e. regular folks who bank at BOA.

And according to its annual report, BOA paid its retail depositors an average interest rate of 0.04% last year. Seriously. That’s a tiny, laughable amount of interest. But hey, at least it’s positive. That 0.04% average rate means the bank paid its retail depositors a total of $236 million in interest. Yet at the same time, Bank of America charged those very same retail depositors $4.1 BILLION in fees. So in total, small depositors forked over a net sum of $3.8+ billion to Bank of America last year for the privilege of holding their money at the bank. Based on the bank’s total consumer deposits of $592.4 billion, it’s as if the bank had charged its customers a negative interest rate of 0.64%. What’s the point? It’s one thing to pay fees to a bank that will safeguard your capital and act in the most conservative way possible.

People pay fees to storage companies to safeguard their wine collections, baseball card collections, all sorts of stuff. We even pay fees for safety deposit boxes to store important documents. So in principle there’s nothing wrong with paying a bank a reasonable fee to safeguard your money. But that’s not what banks do.

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It’s time for competition.

• Adults Take Over at Uber, Cost Cutting Starts (WS)

[..] now the adults have taken over at Uber. And money has become an objective. A 14-member executive committee is running the show since there’s no CEO, no CFO, no number two behind the CFO, and no COO. A gaggle of other executives and managers left or were shoved out in the wake of scandals, chaos, and lawsuits. And the adults have decided to bring the expenses down. One of the steps is to unload Uptown Station. According to the San Francisco Business Times: The possible sale of Uptown Station means Uber can move the asset and development costs off its books, which could put it in a better financial position. That was a key motivator for exploring the sale, spokesperson MoMo Zhou told the Business Times. Uber was looking “to strengthen our financial position so we can better serve riders and drivers in the long term,” she said.

So they’re starting to concentrate their efforts and prioritize their spending where it matters: riders and drivers. In March already, Uber had decided to scale down its move to Uptown Station. Instead of migrating 2,500 to 3,000 employees into the building, it said it would move just a few hundred, and lease out the remaining space. Uber has booming sales – in Q2, “adjusted net revenue” soared by 118% year-over-year to $1.75 billion – but it also has booming expenses and losses, and sooner or later something has to give. In 2016, it booked an “adjusted” loss of $3.2 billion (not including interest, tax, employee stock compensation expenses, and other items). In the first two quarters of 2017, it booked an “adjusted” loss of $1.4 billion: $4.6 billion in “adjusted” losses in six quarters. It has $6.6 billion in cash. At this pace, it’ll be gone quickly.

Uber is now trying to cut its losses and reach profitability, a “person with knowledge of the matter” told the Business Times. And given the chaos surrounding Uber, it might be a better idea to concentrate employees in one place rather than scattering them all over the landscape. This comes after the adults have also decided to shut down Uber’s subprime auto leasing program that was started two years ago. “Xchange Leasing” put their badly paid drivers with subprime credit into new vehicles they couldn’t afford. The leases allowed drivers to put “unlimited miles” on their cars without consequences and return the cars after 30 days with two weeks’ notice. No one in the car business would ever offer this kind of lease. But the folks at Uber simply didn’t need to do the math. Uber invested $600 million in this program. Now the adults found out they’re losing $9,000 per car. With 40,000 cars in the fleet, it adds up in a hurry. So they decided to shut down that program.

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Sears is toast.

• Sears Revenues to Hit Zero in 3 Years. But Bankruptcy First (WS)

In its fiscal year 2017, it already closed about 180 stores and expects to shutter an additional 150 stores in the third quarter. Those closings had been announced previously. But in its earnings release, it announced the closing of 28 more Kmart stores “later this year.” Liquidation sales will begin as early as August 31, it said. The rest of the plunge was caused by same-store sales (sales at stores open longer than one year) which dropped 11.5%. “Softness in store traffic” the company called it. But the trend is falling off a cliff: In Q2 2016, same-store sales had dropped “only” 5.2%. Now they’re plunging at more than double that rate. Despite the ceaseless corporate rhetoric of operational improvements, this baby is going down the tubes at an ever faster speed. How does that $4.37 billion in revenues stack up? They’re down by nearly two-thirds from Q2 2007. This is what the accelerating revenue shrinkage looks like:

[..] Over the past three years, the momentum of the revenue decline has accelerated sharply. Q2 revenues have plummeted from $8.0 billion in 2014 to $4.37 billion in 2017. A decline of $3.6 billion, or 45% in three years. This chart shows Q2 revenues from 2014 to 2017, with the trend line (purple) extended until it hits zero. This is the same track that Q1 revenues are on. As I’d postulated three months ago, at this rate, revenues of the once largest retailer in the US will be zero in three years, or by 2020. Zero is the inevitable result of a hedge-fund strategy of asset-stripping and cost-cutting at a retailer that had already been struggling before the takeover, and that now finds itself embroiled without effective online strategy in the American brick-and-mortar retail meltdown. But revenues won’t drop to zero. Sears won’t last that long.

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But who actually has the required $275,000? And what happens to those who don’t have it?

• Health-Care Costs Could Eat Up Your Retirement Savings (BBG)

In a perfect world, the largest expenses in retirement would be for fun things like travel and entertainment. In the real world, retiree health-care costs can take an unconscionably big bite out of savings. A 65-year-old couple retiring this year will need $275,000 to cover health-care costs throughout retirement, Fidelity Investments said in its annual cost estimate, out this morning. That stunning number is about 6% higher than it was last year. Costs would be about half that amount for a single person, though women would pay a bit more than men since they live longer. You might think that number looks high. At 65, you’re eligible for Medicare, after all. But monthly Medicare premiums for Part B (which covers doctor’s visits, surgeries, and more) and Part D (drug coverage) make up 35% of Fidelity’s estimate.

The other 65% is the cost-sharing, in and out of Medicare, in co-payments and deductibles, as well as out-of-pocket payments for prescription drugs. And that doesn’t include dental care—or nursing-home and long-term care costs. Retirees can buy supplemental, or Medigap, insurance to cover some of the things Medicare doesn’t, but those premiums would lead back to the same basic estimate, said Adam Stavisky, senior vice president for Fidelity Benefits Consulting. The 6% jump in Fidelity’s estimate mirrors the average annual 5.5% inflation rate for medical care that HealthView Services, which makes health-care cost projection software, estimates for the next decade. A recent report from the company drilled into which health-care costs will grow the fastest.

It estimates a long-term inflation rate of 7.2% for Medigap premiums and 8% for Medicare Part D. For out-of-pocket costs, the company estimates inflation rates of 3.7% for prescription drugs, 5% in dental, hearing, and vision services, 3% for hospitals, and 3.4% for doctor’s visits and tests. Cost-of-living-adjustments on Social Security payments, meanwhile, are expected to grow by 2.6%, according to the HealthView Services report.

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“One day they will build a statue in my honor in Greece in a show of gratitude..”

• Schaeuble Defends Tough Line On Greek Reforms (K.)

As Prime Minister Alexis Tsipras prepares to present a positive narrative at next month’s Thessaloniki International Fair about how the country is turning a corner ahead of the next review by international creditors in the fall, German Finance Minister Wolfgang Schaeuble has reportedly suggested that Athens should be grateful to him for his tough stance on economic reform and austerity. “One day they will build a statue in my honor in Greece in a show of gratitude for the pressure that I imposed in order for necessary reforms to be carried out,” the outspoken minister was quoted as saying by German newspaper Handelsblatt. According to the same newspaper, Schaeuble aims to turn the European Stability Mechanism into a European version of the IMF, one of Greece’s creditors.

The concept is that of a European monetary fund that would help eurozone states in financial crisis but subject to strict terms, such as those that underpinned the IMF’s support to Greece and other countries in recent years. Other ideas, such as the possibility of introducing growth-inducing measures in such countries, were reportedly rejected by Schaeuble. French President Emmanuel Macron meanwhile has suggested that the eurozone should have its own central budget which it could tap if necessary to support member-states in financial difficulty. He is also said to back the idea of a eurozone finance minister, another idea opposed by Berlin. Macron is due in Athens in the first week of September for an official visit that government sources hope will bolster Tsipras’s positive narrative while there are also signs that French firms might confirm their interest in investing in the Thessaloniki Port Authority.

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When you’re bled dry of your young and their energy, you’re not going to recover.

• Minister: Young Greeks Fleeing A ‘Debt Colony’ (K.)

In comments to Skai TV on Friday, Deputy Education Minister Costas Zouraris said he understood why large numbers of young Greeks are abandoning the country for better employment opportunities abroad, noting that Greece is “a debt colony” that is “slightly worse” than India. “For now, it’s understandable that kids are saying they want to leave,” Zouraris told Skai. “Let’s hope they return because we are, as you know, bankrupt and a debt colony.” He added that the Greek state has invested about 1 million euros in its top graduates who are now leaving the country. “We are now giving this as a gift to foreign countries for a few years,” he said.

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Debt Rattle December 2 2016

Dec 022016
 
 December 2, 2016  Posted by at 10:34 am Finance Tagged with: , , , , , , , , , ,  2 Responses »


Harris&Ewing Washington, DC, Storm damage..” Between 1913 and 1918

• Global Bonds Suffer Worst Monthly Meltdown as $1.7 Trillion Lost (BBG)
• What’s Causing The Fire Sale In The Bond Market (CNBC)
• Donald Trump Promises to Usher In New ‘Industrial Revolution’ (WSJ)
• Trump Will End Growth-Zapping Fiscal Austerity – McCulley (CNBC)
• China’s Central Bank Is Facing a Major New Headache (BBG)
• Rural China Banks With $4 Trillion Assets Face Debt Test (BBG)
• Obama Set To Block Chinese Takeover Of German Semiconductor Supplier (BBG)
• QE Infinity Eyed In Europe If Renzi Loses Crucial Italian Referendum (CNBC)
• December 4 Could Trigger the “Most Violent Economic Shock in History” (IM)
• How Putin, Khamenei And Saudi Prince Got OPEC Deal Done (R.)
• Russian Oil Output Near Post-Soviet Record as It Prepares to Cut (BBG)
• US Veterans Arrive At Pipeline Protest Camp In North Dakota (R.)
• Joy As China Shelves Plans To Dam ‘Angry River’ (G.)
• World’s Growing Inequality Is ‘Ticking Time Bomb’: Nobel Laureate Yunus (R.)
• This Is The Most Dangerous Time For Our Planet (Stephen Hawking)

 

 

Things get crowded, it’s inevitable. And much more so in manipulated markets.

• Global Bonds Suffer Worst Monthly Meltdown as $1.7 Trillion Lost (BBG)

The 30-year-old bull market in bonds looks to be ending with a bang. The Bloomberg Barclays Global Aggregate Total Return Index lost 4% in November, the deepest slump since the gauge’s inception in 1990. Treasuries extended declines Thursday along with European bonds on speculation that the ECB will consider sending a signal that stimulus will eventually end. The reflation trade has been driving markets since Donald Trump’s election victory due to his promises of tax cuts and $1 trillion in infrastructure spending. Calling an end to the three-decade bond bull market is no longer looking like a fool’s errand: the Federal Reserve is expected to raise interest rates again – and do so more often than once a year, inflationary expectations are climbing and there are hints global central banks may buy less sovereign debt going forward.

Investors pulled $10.7 billion from U.S. bond funds in the two weeks after Trump’s victory, the biggest exodus since 2013’s “taper tantrum,” while American stock indexes jumped to records. “The market has moved with remarkable swiftness to price in the anticipated reflationary impact of a Trump administration,” said Matthew Cairns, a strategist at Rabobank International in London. “This has, in turn, prompted a notable rotation out of fixed income and into equities.” Still, Cairns cautioned the moves are “remarkable given the distinct lack of clarity as regards what policies the president-elect will actually pursue.” November’s rout wiped a record $1.7 trillion from the global index’s value in a month that saw world equity markets’ capitalization climb $635 billion.

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Eevrybody’s been on the same side of the boat for too long.

• What’s Causing The Fire Sale In The Bond Market (CNBC)

There’s a fire sale in the bond market, and the November jobs report could make it burn even hotter. The wild move came amid speculation that Friday’s employment report could be better-than-expected and drive interest rates even higher. Interest rates surged Thursday, with the 10-year yield spiking as much as 12 basis points at its peak, to 2.49%, the highest yield since June 2015. Yields move inversely to prices and rates snapped higher across the whole yield curve. The 2-year pressed up against 1.17% and the 30-year rose to as high as 3.15%. In afternoon trading, some of the selling subsided, and the 10-year yield slipped back to just under 2.44%, but 2.50 is being watched as the next psychological line in the sand.

“In order to stay above 2.50, it’s got to be a really good number. The way we’re going, it’s like an unhinged market. It’s also going to be counterproductive for things down the road. This is not a healthy adjustment in rates. There’s going to be some losses on this,” said George Goncalves at Nomura. The 10-year yield affects consumer loans especially home mortgage rates, which have already risen near 4%, slowing borrowing activity. The 2-year is the rate most closely watched as a signal about the market’s expectation for Fed rate activity. The Fed is expected to hike rates Dec. 14 but traders have been speculating a stronger economy could force it into a faster hiking cycle next year.

Strategists say Thursday’s rate spike was driven by a combination of factors and at the same time inexplicable in its scope. The overriding themes are that the world is moving to a higher interest rate environment and for the first time in years, there could be inflation. OPEC’s deal to cut production Wednesday, drove oil prices 15% higher in just two days, ramping up inflation expectations that already had been on the rise.

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“There is no global anthem, no global currency..”

• Donald Trump Promises to Usher In New ‘Industrial Revolution’ (WSJ)

President-elect Donald Trump on Thursday said his administration would usher in a new “Industrial Revolution,” one of numerous promises he made in Cincinnati as he began a nationwide “Thank You” tour following his Nov. 8 election. Mr. Trump used the 53-minute speech, the first of its kind since he became president-elect, to reflect on his victory but also to outline a number of goals, many of them lofty, for his term as president. The speech was more than just thematic, however. He said for the first time that on Monday he would announce that he was nominating Ret. Gen. James Mattis as his first secretary of defense. Mr. Trump promised sweeping changes to trade policy, national security, infrastructure, military spending and immigration. He said he wanted to work with Democrats but said he could get the work done without them, even without his supporters.

“Now that you put me in this position, even if you don’t help me one bit, I’m going to get it done,” he said. “Don’t worry.” The Cincinnati rally resembled, in some ways, the campaign rallies he held for months as his candidacy gained steam during the year. There were chants of “U.S.A.,” and vendors sold Trump campaign memorabilia. But there was one notable difference: with the election over, the crowd was far smaller[..] During his speech, he stuck to many of his campaign promises. He said a wall would be built along the U.S.-Mexico border. He said his administration would “repeal and replace” the Affordable Care Act. He said the Trump administration would seek plans and deals that benefited Americans first and not get duped into deals with other countries. “There is no global anthem, no global currency,” he said. “We pledge allegiance to one flag, and that flag is the American flag.”

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It’ll fail. You can’t ‘make’ growth.

• Trump Will End Growth-Zapping Fiscal Austerity – McCulley (CNBC)

Economist Paul McCulley told CNBC on Thursday he’s had a “big ax to grind” with Washington for years over the need for more deficit spending, and it appears Republican Donald Trump may actually be the one to deliver. The stock market rally since Trump won the presidential election has been reflecting that notion, argued McCulley, who said he voted for Democrat Hillary Clinton. “The market is essentially celebrating the end of fiscal austerity. And it just happens to be a vehicle of Mr. Trump. But the end of fiscal austerity is the key economic issue.” “My big ax to grind in recent years — not months but years — is that we needed to have more fiscal policy expansion, because we’re in a liquidity trap,” said McCulley, former chief economist at Pimco. He said too much responsibility has fallen on the Federal Reserve for growing the economy.

“We needed some help with larger budget deficits.” “I’ve never had an issue with increasing the size of the budget deficit. I think it’s been too small. I have zero problem with increased public investment and funding it with deficits,” he said. “To the extent that Mr. Trump wants to do that, I think that is the right Keynesian policy.” McCulley was referring to the British economist John Maynard Keynes, who is often credited with the concept of deficit spending as a means of fiscal policy. “My biggest complaints for the person I voted for, Mrs. Clinton, is that she said, ‘I will not add a penny to the national debt.’ That was basically putting you in a straightjacket of fiscal austerity forever,” said McCulley, senior fellow in financial macroeconomics at Cornell Law School.

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Mundell: “..nations can’t sustain a fixed exchange rate, independent monetary policy, and open capital borders all at the same time..”

• China’s Central Bank Is Facing a Major New Headache (BBG)

People’s Bank of China Governor Zhou Xiaochuan already has one policy headache with the currency falling to near an eight-year low. He could have an even bigger one next month. That’s when a $50,000 cap on how much foreign currency individuals are allowed to convert each year resets, potentially aggravating capital outflow pressures that are already on the rise. If just 1% of China’s almost 1.4 billion people max out those limits, that’s an outflow of about $700 billion – more than the estimated $620 billion that Bloomberg Intelligence estimates indicate has already flowed out in the first 10 months of this year. Middle class and wealthy Chinese have been converting money into other currencies to protect themselves from devaluation, exacerbating downward pressure on the yuan.

Outflows could intensify if Federal Reserve interest-rate hikes fuel further dollar appreciation. That leaves Zhou in a bind identified by Nobel-prize winning economist Robert Mundell as the “impossible trinity” – a principle that dictates nations can’t sustain a fixed exchange rate, independent monetary policy, and open capital borders all at the same time. “At a moment like this, you have to compare two evils and pick the less-worse one,” said George Wu, who worked as a PBOC monetary policy official for 12 years. “Capital free flow may have to be abandoned in order to maintain a relatively stable currency rate.” China is moving further away from balance among trinity variables, at least temporarily, and “it may take a while before the situation stabilizes” for the yuan and capital outflows, said Wu, who’s now chief economist at Huarong Securities in Beijing.

[..] rather than raise borrowing costs to try to make domestic returns more attractive – China has added new restrictions on the flow of money across its borders. They include a pause on some foreign acquisitions and bigger administrative hurdles to taking yuan overseas, people familiar with the steps have told Bloomberg News. China should cut intervention in foreign exchange markets while stepping up capital control, Yu Yongding, a former academic member of the PBOC’s monetary policy committee, said Friday at a conference in Beijing. Yuan internationalization shouldn’t be promoted too aggressively, said Yu, a senior research fellow at the Chinese Academy of Social Sciences.

About $1.5 trillion has exited the country since the beginning of 2015. While China still has the world’s largest foreign exchange stockpile, the hoard shrank in October to a five-year low of $3.12 trillion, PBOC data show. That means there’s less in the armory to battle depreciation if China’s famously frugal savers park more cash abroad. The outflow pressure rose in January as individuals socked away a record amount in domestic bank accounts denominated in other currencies. Household foreign deposits surged 8.1% to $97.4 billion, according to the central bank, for the biggest jump since it began tracking the data in 2011. Those holdings stood at $113.1 billion in October.

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The correct way to write this is: “Assets”.

• Rural China Banks With $4 Trillion Assets Face Debt Test (BBG)

Bond investors are weighing rising risks that smaller Chinese banks will fail against growing signs the government will do anything to avoid a financial meltdown. A lender called Guiyang Rural Commercial Bank in the southwestern province of Guizhou sparked concern that risks among smaller lenders are spreading after its rating outlook was cut last month following a jump in overdue loans to 30% of the total. That compares with just 3% at the nation’s biggest lender. Short-term borrowing costs surged for the riskiest lenders including rural commercial banks, which hold 29 trillion yuan ($4.2 trillion) of assets, 13.4% of the total amount in China’s banking system.

Yet confidence in the government’s readiness to step in and offer support to struggling borrowers is rising as authorities allow a credit-fueled recovery of manufacturing activity, helping an official factory gauge match a post-2012 high last month. While 17 onshore public bonds defaulted in the first half of the year, there have since been only seven. The combination of government support and desperation for yield helps explain why Guiyang Rural was able to sell a junior bond at 4.7% last month, 1.7 %age points less than a similar offering last year. “Investors have yet to suffer losses from any bank capital securities, which adds to their confidence,” said He Xuanlai at Commerzbank.

“Smaller banks have a less diversified business profile and will likely get less support from the central government compared with bigger banks. Still, the base case is the government is still not ready to let any bank fail in a disorderly way.” That assumption has helped cut the extra yield investors demand to hold AA- rated five-year bank subordinated notes over AAA rated peers to a record low of 81 basis points, from 113 at the start of the year. There are some positive fundamentals. Rural banks are tied with the big five state-owned banks for the best Tier 1 capital ratio at 12%, according to an analysis by Natixis.

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And Germany says what?

• Obama Set To Block Chinese Takeover Of German Semiconductor Supplier (BBG)

U.S. President Barack Obama is poised to block a Chinese company from buying Germany’s Aixtron, people familiar with the matter said, which would mark only the third time in more than a quarter century that the White House has rejected an investment by an overseas buyer as a national security risk. The president is expected Friday to uphold a recommendation by the Committee on Foreign Investment in the U.S. that the sale of the semiconductor-equipment supplier to China’s Grand Chip Investment should be stopped, according to the people, who asked not to be identified as the details aren’t public. Blocking the €670 million ($714 million) acquisition would mark the second time Obama has rejected a deal on national security grounds. The first was in 2012 when he stopped Chinese-owned Ralls Corp. from developing a wind farm near a Navy base in Oregon.

Before that, in 1990 then-president George H.W. Bush stopped a Chinese acquisition of MAMCO, an aircraft-parts maker. CFIUS reviews purchases of U.S. companies by foreign buyers and pays particular attention to purchases of technology, especially when it has defense applications. It has a say in the Aixtron deal because the company has a subsidiary in California and employs about 100 people in the U.S., where it generates about 20% of its sales. Aixtron technology can be used to produce light-emitting diodes, lasers, transistors, solar cells, among other products, and can have military applications in satellite communications and radar. Northrop Grumman, a major U.S. defense contractor, is among its customers, according to a Bloomberg supply chain analysis. “It will be extremely difficult for China’s state owned enterprises to do deals in the semiconductor industry looking forward,” said He Weiwen at the Center for China and Globalization.

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A No vote is also a vote against the ECB.

• QE Infinity Eyed In Europe If Renzi Loses Crucial Italian Referendum (CNBC)

Dovish words from the ECB this week have fueled speculation of more accommodative monetary policy if Italians reject constitutional reforms this weekend, but one economist has told CNBC that it might not be that simple. “The market believes that we are basically in for QE infinity in Europe and that might be a stretch of the imagination,” said Elga Bartsch, Morgan Stanley’s global co-head of economics. While the Morgan Stanley economist acknowledged the rhetoric emanating from ECB President Mario Draghi this week arguably did imply there could be a so-called “Draghi put” in the case of a “no” vote in the referendum, she also posited that this view was somewhat simplistic.

“There was strong communication from him (Draghi) and a number of executive board members at the ECB, but at the same time, the views of the broader council and among the national central bank governors seem to be a little bit more mixed,” she explained. “For instance, the debate as to whether instead of extending by six months at €80 billion, just to do nine months of €60 billion doesn’t really want to go away,” Bartsch noted.

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“December 4 referendum fails >> M5S comes to power >> Italians vote to leave the euro currency >> European Union collapses.”

• December 4 Could Trigger the “Most Violent Economic Shock in History” (IM)

The Five Star Movement (M5S) is Italy’s new populist political party. It’s anti-globalist, anti-euro, and vehemently anti-establishment. It doesn’t neatly fall into the left–right political paradigm. M5S has become the most popular political party in Italy. It blames the country’s chronic lack of growth on the euro currency. A large plurality of Italians agrees. M5S has promised to hold a vote to leave the euro and reinstate Italy’s old currency, the lira, as soon as it’s in power. That could be very soon. Given the chance, Italians probably would vote to return to the lira. If that happens, it would awaken a monetary volcano. The Financial Times recently put it this way: “An Italian exit from the single currency would trigger the total collapse of the eurozone within a very short period. It would probably lead to the most violent economic shock in history, dwarfing the Lehman Brothers bankruptcy in 2008 and the 1929 Wall Street crash.”

If the FT is even partially right, it means a stock market crash of historic proportions could be imminent. It could devastate anyone with a brokerage account. Here’s how it could all happen… On December 4, Italian Prime Minister Matteo Renzi’s current pro-EU government is holding a referendum on changing Italy’s constitution. In effect, a “Yes” vote is a vote of approval for Renzi’s government. A “No” vote is a chance for the average Italian to give the finger to EU bureaucrats in Brussels. Given the intense anger Italians feel right now, it’s very likely they’ll do just that. According to the latest polls, the “No” camp has 54% support and all of the momentum. Even prominent members of Renzi’s own party are defecting to the “No” side.

If the December 4 referendum fails, Renzi has promised to resign. Even if he doesn’t, the loss would politically castrate him. In all likelihood his government would collapse. (Italian governments have a short shelf life. There have been 63 since 1945. That’s almost a rate of a new government each year.) One way or another, M5S will come to power. It’s just a matter of when. If Renzi’s December 4 referendum fails—and it looks like it will—M5S will likely take over within months. Once it’s in power, M5S will hold a referendum on leaving the euro and returning to the lira. Italians will likely vote to leave. [..] December 4 referendum fails >> M5S comes to power >> Italians vote to leave the euro currency >> European Union collapses.

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Don’t be fooled: it’s all Putin, the one non-OPEC voice. And he’s playing the rest like so many fiddles.

• How Putin, Khamenei And Saudi Prince Got OPEC Deal Done (R.)

[..] Heading into the meeting, the signs were not good. Oil markets went into reverse. Saudi Prince Mohammed had repeatedly demanded Iran participate in supply cuts. Saudi and Iranian OPEC negotiators had argued in circles in the run-up to the meeting. And, then, just a few days beforehand, Riyadh appeared back away from a deal, threatening to boost production if Iran failed to contribute cuts. But Putin established that the Saudis would shoulder the lion’s share of cuts, as long as Riyadh wasn’t seen to be making too large a concession to Iran. A deal was possible if Iran didn’t celebrate victory over the Saudis. A phone call between Putin and Iranian President Rouhani smoothed the way.

After the call, Rouhani and oil minister Bijan Zanganeh went to their supreme leader for approval, a source close to the Ayatollah said. “During the meeting, the leader Khamenei underlined the importance of sticking to Iran’s red line, which was not yielding to political pressures and not to accept any cut in Vienna,” the source said. “Zanganeh thoroughly explained his strategy … and got the leader’s approval. Also it was agreed that political lobbying was important, especially with Mr. Putin, and again the Leader approved it,” said the source. On Wednesday, the Saudis agreed to cut production heavily, taking “a big hit” in the words of energy minister Khalid al-Falih – while Iran was allowed to slightly boost output. Iran’s Zanganeh kept a low profile during the meeting, OPEC delegates said.

Zanganeh had already agreed the deal the night before, with Algeria helping mediate, and he was careful not to make a fuss about it. After the meeting, the usually combative Zanganeh avoided any comment that might be read as claiming victory over Riyadh. “We were firm,” he told state television. “The call between Rouhani and Putin played a major role … After the call, Russia backed the cut.”

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As you can see here, Putin even prepared for the cuts: all Russia needs to cut is that 2016 production surge. Which may have been untenable to begin with. And it catches out those who haven’t created a surge, but will have to cut anyway.

• Russian Oil Output Near Post-Soviet Record as It Prepares to Cut (BBG)

Russia, the world’s largest energy exporter, held November output near a post-Soviet record , which is likely to remain a high-water mark in the near term after a pledge to cut production. Russian crude and condensate production averaged 11.21 million barrels a day in November, compared with a record 11.23 million barrels a day in October, according to the Energy Ministry’s CDU-TEK statistics unit. Russia promised to support a push by OPEC to reduce a global oil oversupply after the group agreed to cut production by 1.2 million barrels a day on Wednesday.

Energy Minister Alexander Novak pledged Russia would cut its own output by as much as 300,000 barrels a day, a stronger move than the previously preferred position of a freeze. Russia will make a gradual reduction over the first half of the year starting in January, Novak said Thursday. The reduction, supported by Russian oil producers, would be spread proportionally among companies, he said without providing further detail. Gazprom Neft and Novatek led Russian output growth in November compared with a year earlier, although both companies posted lower oil production than October, according to the data.

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“I bought a one-way ticket [..] Hopefully we can shut this down before Christmas.”

• US Veterans Arrive At Pipeline Protest Camp In North Dakota (R.)

U.S. military veterans were arriving on Thursday at a camp to join thousands of activists braving snow and freezing temperatures to protest a pipeline project near a Native American reservation in North Dakota. However, other veterans in the state took exception to the efforts of the group organizing veterans to act as human shields for the protesters, saying the nature of the protests reflected poorly on the participants. Protesters have spent months rallying against plans to route the $3.8 billion Dakota Access Pipeline beneath a lake near the Standing Rock Sioux reservation, saying it poses a threat to water resources and sacred Native American sites.

State officials on Monday ordered activists to vacate the Oceti Sakowin camp, located on U.S. Army Corps of Engineers land near Cannon Ball, North Dakota, citing harsh weather conditions. Officials said on Wednesday however that they will not actively enforce the order. Matthew Crane, a 32-year-old Navy veteran who arrived three days ago, said the veterans joining the protest were “standing on the shoulders of Martin Luther King Jr and Gandhi” with the their plans to shield protesters. “I bought a one-way ticket,” he told Reuters as he worked to build a wooden shelter at the main camp. “Hopefully we can shut this down before Christmas.”

[..]Veterans Stand for Standing Rock, a contingent of more than 2,000 U.S. military veterans, intends to reach North Dakota by this weekend and form a human wall in front of police, protest organizers said on a Facebook page. The commissioner of the state’s Department of Veterans Affairs, who appeared at the West Fargo event, said he was worried about the involvement of individuals who have been in war situations. “We’re going to have veterans that we don’t know anything about coming to the state, war time veterans possibly with PTSD and other issues,” Lonnie Wangen told Reuters. “They’re going to be standing on the other side of concertina fence looking at our law enforcement and our (National) Guard, many of whom have served in war zones also,” he added. “We don’t want to see veterans facing down veterans.”

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“Thirty years ago there were 50,000 rivers in China; today there are less than 23,000.”

• Joy As China Shelves Plans To Dam ‘Angry River’ (G.)

Environmentalists in China are celebrating after controversial plans to build a series of giant hydroelectric dams on the country’s last free-flowing river were shelved. Activists have spent more than a decade campaigning to protect the Nujiang, or “angry river”, from a cascade of dams, fearing they would displace tens of thousands of people and irreparably damage one of China’s most spectacular and bio-diverse regions. Since the start of this year, hopes had been building that Beijing would finally abandon plans to dam the 1,750-mile waterway, which snakes down from the Tibetan plateau through some of China’s most breathtaking scenery before entering Myanmar, Thailand and eventually flowing into the Andaman Sea.

On Friday, campaigners said that appears to have happened after China’s State Energy Administration published a policy roadmap for the next five years that contained no mention of building any hydroelectric dams on the Nu. “I am absolutely thrilled,” said Wang Yongchen, a Chinese conservationist and one of the most vocal opponents of the plans, which first surfaced in 2003. Wang, who has made 17 trips to the Nu region as part of her crusade to protect the river, said geologists, ecologists, sociologists and members of the public who had been part of the campaign could all take credit for halting the dams. “I think this is a triumph for Chinese civil society,” the Beijing-based activist said. Stephanie Jensen-Cormier, the China programme director for International Rivers, said environmentalists were “very happy and very excited” at what was a rare piece of good news for China’s notoriously stressed waterways.

“The state of rivers in China is so dismal. Thirty years ago there were 50,000 rivers in China; today there are less than 23,000. Rivers have completely disappeared. They have become polluted, they have become overused for agriculture and manufacturing,” she said. “So it is so exciting when a major river – which is a major river for Asia – is protected, at least where it flows in China.” Jensen-Cormier said the shelving of plans to dam the Nu – which is known as the Salween in Thailand and the Thanlwin in parts of Myanmar – represented “a great turning point for the efforts to preserve China’s rivers”. “It is a really good indication that China is starting to look at other ways of developing energy, and renewable energies especially, that mean they don’t have to sacrifice their remaining healthy river.”

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I don’t know, I think perhaps many people are born followers: “People are not born to be job seekers – they are entrepreneurs by nature..”

• World’s Growing Inequality Is ‘Ticking Time Bomb’: Nobel Laureate Yunus (R.)

The widening gap between rich and poor around the world is a “ticking time bomb” threatening to explode into social and economic unrest if left unchecked, Nobel Peace laureate Muhammad Yunus said on Thursday. The banking and financial system has created a world of “the more money you have, the more I give you” while depriving the majority of the world’s population of wealth and an adequate standard of living, Yunus told the Thomson Reuters Foundation. “Wealth has become concentrated in just a few places in the world … It’s a ticking time bomb and a great danger to the world,” said the founder of the microfinance movement that provides small loans to people unable to access mainstream finance.

Yunus cited Donald Trump’s victory in the U.S. presidential election on Nov. 8 and Britain’s vote to leave the EU on June 23 as expressions of popular anger with ruling elites who have failed to stem the widening global wealth gap. A 2016 report by charity Oxfam showed that the wealth of the world’s richest 62 people has risen by 44% since 2010, with almost half of the super-rich living in the United States, while the wealth of the poorest 3.5 billion fell 41%. “This creates tension among people at the bottom (of the income ladder). They blame refugees and minorities – and unscrupulous politicians exploit this,” said Yunus [..]

To break free from an unequal financial system that disadvantages the poor, people should use their creative energy to become entrepreneurs themselves and spread wealth among a broader base of citizens, said Yunus. “People are not born to be job seekers – they are entrepreneurs by nature,” he said, adding that businesses that are focused more on doing social good than generating maximum profit can help to rectify economic and gender inequality. “If wealth comes to billions of people, this wealth will not come to the top one percent (of rich people), and it will not be easy to concentrate all the wealth in a few hands,” he said.

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It’s a little painful to see Hawking lose himself in a field of logic that is not his. He claims we should go to Mars, but then he says earth is our only planet. Isn’t it true that the time and energy dispensed in efforts to get to Mars might be better used in saving earth? Or are we going to claim we can do both?

• This Is The Most Dangerous Time For Our Planet (Stephen Hawking)

As a theoretical physicist based in Cambridge, I have lived my life in an extraordinarily privileged bubble. Cambridge is an unusual town, centred around one of the world’s great universities. Within that town, the scientific community that I became part of in my 20s is even more rarefied. And within that scientific community, the small group of international theoretical physicists with whom I have spent my working life might sometimes be tempted to regard themselves as the pinnacle. In addition to this, with the celebrity that has come with my books, and the isolation imposed by my illness, I feel as though my ivory tower is getting taller. So the recent apparent rejection of the elites in both America and Britain is surely aimed at me, as much as anyone.

Whatever we might think about the decision by the British electorate to reject membership of the EU and by the American public to embrace Donald Trump as their next president, there is no doubt in the minds of commentators that this was a cry of anger by people who felt they had been abandoned by their leaders. It was, everyone seems to agree, the moment when the forgotten spoke, finding their voices to reject the advice and guidance of experts and the elite everywhere. I am no exception to this rule. I warned before the Brexit vote that it would damage scientific research in Britain, that a vote to leave would be a step backward, and the electorate – or at least a sufficiently significant proportion of it – took no more notice of me than any of the other political leaders, trade unionists, artists, scientists, businessmen and celebrities who all gave the same unheeded advice to the rest of the country. What matters now, far more than the choices made by these two electorates, is how the elites react.

Should we, in turn, reject these votes as outpourings of crude populism that fail to take account of the facts, and attempt to circumvent or circumscribe the choices that they represent? I would argue that this would be a terrible mistake. The concerns underlying these votes about the economic consequences of globalisation and accelerating technological change are absolutely understandable. The automation of factories has already decimated jobs in traditional manufacturing, and the rise of artificial intelligence is likely to extend this job destruction deep into the middle classes, with only the most caring, creative or supervisory roles remaining. This in turn will accelerate the already widening economic inequality around the world. The internet and the platforms that it makes possible allow very small groups of individuals to make enormous profits while employing very few people. This is inevitable, it is progress, but it is also socially destructive.

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