Nov 292021
 
 November 29, 2021  Posted by at 9:32 am Finance Tagged with: , , , , , , , , ,  58 Responses »


David Hockney Portrait of an Artist (Pool with Two Figures) 1972

 

Fauci Escalates Feud With GOP Senators, Declaring ‘I Represent Science’ (JTN)
Cruz Responds To Fauci’s Attack On Him, Doubles Down On Call For Criminal Probe (DW)
WHO: Omicron Poses ‘Very High’ Global Risk (R.)
Fauci Reveals Plan To Prepare Americans For Omicron (RT)
Biden and Fauci’s Omicron Travel Ban ‘Worse Than Useless,’ Critics Say (NYP)
BioNTech Testing New Covid Variant To See If It Responds To Vaccine (JTN)
Goldman Slams Omicron Panic: “This Mutation Is Unlikely To Be More Malicious” (ZH)
Swiss Get To Choose Whether To Keep Vaccine Passports In Place (RT)
Appeals Court Blocks California Vaccine Mandate For Prison Workers (Hill)
Rapid and Effective Vitamin D Supplementation in COVID-19 Patients (PubMed)
White Smoke From Wuhan Lab Chimney Signals New Variant Has Been Named (BBee)

 

 

 

 

Fauci Cruz

 

 

Alarm! Close down South Africa!

 

 

Declaring ‘I Represent Science’ disqualifies any scientist. Check what Einstein had to say.

Fauci Escalates Feud With GOP Senators, Declaring ‘I Represent Science’ (JTN)

Dr. Anthony Fauci escalated his feud with Republicans on Sunday, declaring on national television that senators who are challenging his COVID policy decision are “anti-science.” ”They’re really criticizing science because I represent science. That’s dangerous,” Fauci told CBS Face the Nation. The top doctor’s comment drew immediate criticism, including from longtime critic Sen. Rand Paul, who called it “hubris.” “It’s astounding and alarming that a public health bureaucrat would even think to claim such a thing, especially one who has worked so hard to ignore the science of natural immunity,” Paul wrote. Wikipedia founder Larry Sanger added his own slam. “Fauci is a bureaucrat, not a scientist,” he tweeted.

Fauci and his boss, NIH Director Francis Collins, spent most of their time on television Sunday talking about the new coronavirus variant called Omicron. Fauci said the U.S. must do “anything and everything” to curb cases of the variant, although it’s “too early to say” whether a lockdown was needed. Collins said it will take weeks before scientists understand how effective current vaccines are at protecting against it. “We do know that this is a variant that has a lot of mutations—like 50 of them, and more than 30 of those in the spike protein, which is the part off the virus that attaches to your human cells if you get infected,” Collins told Fox News. Fauci added he believed Americans had to get ready to live with COVID.

“I don’t think we’re going to eradicate it,” he said. “We’ve only eradicated one infection of mankind, and that’s smallpox. I don’t think we’re even going to eliminate it.” But it was Fauci’s war of words with GOP senators that generated the most buzz.. “Anybody who’s looking at this carefully, realizes that there’s a distinct anti-science flavor to this, so if they get up and criticize science, nobody’s going to know what they’re talking about,” Fauci said. “But if they get up and really aim their bullets at Tony Fauci, well people can recognize that there’s a person there, so it’s easy to criticize, but they’re really criticizing science because I represent science.”

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Fauci bringing up Jan 6 tells you his political leaning. And that is now the science.

Cruz Responds To Fauci’s Attack On Him, Doubles Down On Call For Criminal Probe (DW)

Sen. Ted Cruz (R-TX) responded to an attack from Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases and the Chief Medical Advisor to the president, on Sunday by doubling down on his call for the Department of Justice to investigate Fauci for alleged false statements that he made while testifying to Congress. “Anybody who spins lies and threatens and all that theater that goes on with some of the investigations and the congressional committees and the Rand Pauls and all that other nonsense, that’s noise, Margaret, that’s noise,” Fauci said during an interview with CBS News’ Margaret Brennan. Later, when asked about Sen. Ted Cruz (R-TX) saying that Fauci should be prosecuted by the Department of Justice, Fauci responded: “Yeah. I have to laugh at that. I should be prosecuted? What happened on Jan. 6, senator?”

Fauci claimed that Republicans were trying to scapegoat him to protect former President Donald Trump and that Republicans who are attacking him are “lying.” Cruz responded to Fauci’s remarks in a series of tweets late on Sunday afternoon, calling Fauci “an unelected technocrat who has distorted science and facts in order to exercise authoritarian control over millions of Americans.” “He lives in a liberal world where his smug ‘I REPRESENT science’ attitude is praised,” Cruz said.

Cruz then laid out four “facts” related to his call for the DOJ to investigate Fauci:
1/ On May 11, Fauci testified before a Senate Committee that “the NIH has not ever and does not now fund gain-of-function research in the Wuhan Institute of Virology.”
2/ On October 20, NIH wrote they funded an experiment at the Wuhan lab testing if “spike proteins from naturally occurring bat coronaviruses circulating in China were capable of binding to the human ACE2 receptor in a mouse model.” That is gain of function research.
3/ Fauci’s statement and the NIH’s October 20 letter cannot both be true. The statements are directly contradictory.
4/ 18 USC 1001 makes it [a] felony, punishable by up to 5 years in prison, to lie to Congress.

“No amount of ad hominem insults parroting Democrat talking points will get Fauci out of this contradiction,” Cruz concluded. “Fauci either needs to address the substance—in detail, with specific factual corroboration—or DOJ should consider prosecuting him for making false statements to Congress.”

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They’re just guessing. They have no idea. Very mild, no cough, no loss of smell. But but…

WHO: Omicron Poses ‘Very High’ Global Risk (R.)

The Omicron variant is likely to spread internationally, posing a “very high” global risk where Covid-19 surges could have “severe consequences” in some areas, the WHO said on Monday. The UN agency, in technical advice to its 194 member states, urged them to accelerate vaccination of high-priority groups and to “ensure mitigation plans are in place” to maintain essential health services. “Omicron has an unprecedented number of spike mutations, some of which are concerning for their potential impact on the trajectory of the pandemic,” the WHO said. “The overall global risk related to the new variant of concern Omicron is assessed as very high.” Further research is needed to better understand Omicron’s potential to escape protection against immunity induced by vaccines and previous infections, it said, adding that more data was expected in coming weeks. “Covid-19 cases and infections are expected in vaccinated persons, albeit in a small and predictable proportion”, it added.

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“The preparation that we have ongoing … just needs to be revved up,” he continued, “by getting more people vaccinated and getting the fully vaccinated boosted.”

They have no clue if the vaccines will do anything vs Omicron.

Fauci Reveals Plan To Prepare Americans For Omicron (RT)

White House coronavirus adviser Dr. Anthony Fauci has described the Omicron variant of Covid-19 as a “clarion call” to get people vaccinated. This is amid fears that the new variant may prove resistant to existing jabs. In the weeks since it was first discovered in Botswana, the Omicron variant of Covid-19 has rapidly become the dominant strain of the virus in South Africa, and cases have been discovered in Europe, Asia, and the Middle East. Although the US has shut down travel from a number of affected African countries, Fauci told ABC News on Sunday that “inevitably it will be here, and the question is, will we be prepared for it?” “The preparation that we have ongoing … just needs to be revved up,” he continued, “by getting more people vaccinated and getting the fully vaccinated boosted.”

Fauci also touted the wearing of face masks as key to preparing for Omicron. In a separate appearance on NBC News, he described the rise of the Omicron variant as a “clarion call” to get more people vaccinated. Little is known about Omicron, save for its high number of spike protein mutations, which Fauci said gave the variant “an advantage in transmissibility.” Preliminary information suggests the variant may evade the protection offered by the current crop of vaccines. The first recorded Omicron cases in Botswana occurred in fully vaccinated people, and the European Centre for Disease Control stated on Friday that the new variant might be associated with “a significant reduction in vaccine effectiveness and increased risk for reinfections.”

Fauci also touched on these worries on NBC News, telling host Chuck Todd that Omicron “might evade immune protection … possibly even against some of the vaccine-induced antibodies.” South African governmental adviser Professor Barry Schoub has described the Omicron symptoms as “mild” for “the great majority of the patients” infected with the new Covid-19 strain. “Their symptoms were so different and so mild from those I had treated before,” South African Medical Association chair Dr. Angelique Coetzee told The Telegraph on Saturday. In his push to get more Americans vaccinated, Fauci has previously described the Alpha, Beta, and Delta variants as “clarion calls” to boost vaccination. Some 59% of the US population is now fully vaccinated, and 21% of these people have received booster doses.

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“Why do people still take this man seriously?”

Biden and Fauci’s Omicron Travel Ban ‘Worse Than Useless,’ Critics Say (NYP)

Critics took aim Saturday at White House chief medical adviser Dr. Anthony Fauci and President Biden for their “worse than useless” response to the highly contagious Omicron variant of COVID-19. “No worries, travel ban begins next week because you know, variants don’t spread on holiday weekends,” Republican Rep. Thomas Massie of Kentucky scoffed on Twitter. “Who really believes this variant isn’t already here?” The Fauci-approved weekend-long delay in launching the ban on travel from Omicron-infected African countries angered City Councilman Joe Borelli (R-SI). “Why do people still take this man seriously?” Borelli, the chamber’s new minority leader, asked. “Either this is a life or death emergency, or it doesn’t need to happen. It seems like this is a lockdown for the sake of lockdowns.”


Rep. Elise Stefanik (R-NY) decried “the stunning hypocrisy of Democrats” regarding COVID travel bans during the last 20 months. “When President Trump took bold and decisive action in February 2020 to impose travel restrictions into the United States from coronavirus hot spots, Joe Biden attacked him, calling this decision a disgrace and xenophobic,” said Stefanik — who has called for Fauci to be fired over the gain-of-function funding controversy. And Sen. Tom Cotton (R-Ark.) condemned the Biden administration’s too-little, too-late travel measure as “worse than useless.” “Joe Biden and Tony Fauci push crushing restrictions on Americans—like masking two-year-olds—that are pointless,” Cotton tweeted Saturday. “But when it comes to targeted travel bans to protect American citizens, it’s nothing but incompetence and half measures from this White House.”

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Testing the variant? Not the vaccine?

BioNTech Testing New Covid Variant To See If It Responds To Vaccine (JTN)

Medical company BioNTech said this week that it is testing its vaccine against the latest COVID-19 variant to determine whether or not the shot is effective against the latest mutation of the pandemic virus. World leaders and medical officials expressed alarm this week at a new “variant of concern” arising in Africa, one that is allegedly, like the Delta variant before it, highly transmissible. Officials from numerous countries including the U.S. put in place travel bans against countries reportedly experiencing spread of the variant. BioNTech said that it was exploring whether or not it would have to alter its vaccine in any way to account for the new strain.


“We expect more data from the laboratory tests in two weeks at the latest,” the company told told Reuters. “These data will provide more information about whether B.1.1.529 could be an escape variant that may require an adjustment of our vaccine if the variant spreads globally.” The company told media this week that earlier this year it had already planned for the potential need of a rapid alteration of the vaccine in case of the emergence of new variants.

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Not the worst source for risk assessment.

Goldman Slams Omicron Panic: “This Mutation Is Unlikely To Be More Malicious” (ZH)

One look at the ridiculous plunge across asset markets on Friday, which sent oil into one of its biggest tailspins in history (which as Goldman calculated would only make sense if the Omicron lockdowns are twice as bad as anything observed so far), and one would think that the Omicron variant – which as Edward Snowden so aptly put it “sounds like the name of an 80s movie’s evil Robot King” (of course, the WHO had no choice but to skip the Xi variant, located right before Omicron in the Greek alphabet for obvious propaganda reasons) – is several times more aggressive and far more deadly than the Delta or any other Covid variant to date. Neither is the case, and in fact, as even Tom Peacock, one of the original Imperial College narrative-setters admitted, “it may turn out to be an odd cluster that is not very transmissable.”

Alas, that would not help politicians who kill a lot of birds with just one brand new and “horrifying” variant, including getting a carte blanche for trillions in new vote-buying stimmies, enforcing even more ruthless and authoritarian government restrictions a dream come true for all liberal fans of big government, and most importantly forcing another round of mail-in ballot elections one year from today.

And yet, perhaps the pandemic apocalypse is not just around the corner. On one hand, Angelique Coetzee, the chairwoman of the South African Medical Association said today that “the new Omicron variant of the Coronavirus results in MILD disease, WITHOUT prominent symptoms.” On the other, none other than the most important bank on Wall Street – Goldman “Vampire Squid” Sachs – which sets the narrative that all other banks dutifully follow, has decided that it’s not worth starting a panic crash over this mutation and in a note published late on Friday writes that “this mutation is unlikely to be more malicious and that the existing vaccines will most likely continue to be effective in preventing hospitalizations and deaths” and as a result, while Goldman “would monitor the situation in Gauteng closely over the next month, we do not think that the new variant is sufficient reason to make major portfolio changes.”

[..] Conclusion: while we do not have sufficient information to forecast a global B.1.1.529 wave, a high rate of transmission almost inevitably leads to a variant dominance. Nevertheless, we can have reasonable degree of confidence that this mutation is unlikely to be more malicious and that the existing vaccines will most likely continue to be effective in preventing hospitalizations and deaths. As such, while we would monitor the situation in Gauteng closely over the next month, we do not think that the new variant is sufficient reason to make major portfolio changes.

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“The deal was sweetened for voters by the promise of financial assistance.”

Swiss Get To Choose Whether To Keep Vaccine Passports In Place (RT)

Despite months of protests, Swiss citizens have overwhelmingly voted to keep the country’s system of Covid vaccination certificates in place. The deal was sweetened for voters by the promise of financial assistance. Some 62% of voters chose on Sunday to maintain the country’s coronavirus measures. These measures include a controversial system of Covid vaccination certificates, required since September to enter bars, restaurants, theaters and other public spaces. Majorities in 24 of Switzerland’s 26 cantons backed the law, with only the tiny cantons of Schwyz and Appenzell Innerrhoden rejecting the measures. All of Switzerland’s political parties with the exception of the right-wing Swiss People’s Party supported the law, which was brought to a vote after anti-lockdown groups gathered nearly 200,000 signatures to challenge it earlier this year.

Under Switzerland’s system of direct democracy, any initiative can be brought to a vote with 100,000 signatures. Voters in June backed the introduction of the measures by 60%, but recent months have seen protests break out in Swiss cities over the introduction of vaccine certificates. Police in October used rubber bullets, tear gas and water cannon to disperse crowds of people who broke through barriers outside the parliament building in Bern. “The democratic process has been respected but the law is still unconstitutional,” Michelle Cailler of the ‘Friends of the Constitution’ group said after the vote on Sunday. Cailler’s group was one of several who campaigned against the law.

Céline Amaudruz of the Swiss People’s Party, which is currently topping opinion polls in Switzerland, called on the government to take “coherent and measured” action, rather than treating the result as a “blank cheque” to impose whatever coronavirus-related policies it wishes. The law voted on provides for more than just vaccine passports. It also expands financial support for citizens and businesses affected by the pandemic, a provision that may have won over some reluctant voters.

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A little confusing.

Appeals Court Blocks California Vaccine Mandate For Prison Workers (Hill)

A federal appeals court on Friday issued a temporary stay of a coronavirus vaccine mandate for prison workers. The 9th U.S. Circuit Court of Appeals issued the stay, postponing the Jan. 12 deadline to get thousands of prison workers vaccinated until at least March, The Associated Press reported. The move by the appeals court came after a request for a stay of a September ruling by a lower court pending an appeal. The appeals court also moved up opening briefs to Dec. 13, according to AP. California Department of Corrections and Rehabilitation statistics show that at least 240 prisoners have died from COVID-19 and more than half the state prison population has been infected, according to the AP.


The move from the appeals court blocked an earlier decision from U.S. District Judge Jon Tigar that required prison employees to get the vaccine. Tigar’s decision would also require prisoners to get either the vaccine or a medical or religious exemption in order to do work outside the prison or get in-prison visits from family. Both Gov. Gavin Newsom (D) and the California Correctional Peace Officers Association opposed the prison worker mandate, the AP noted. Don Specter, director of the nonprofit Prison Law Office, said the court’s decision “puts both the prison staff and the incarcerated population at greater risk of infection,” according to AP.

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Simple. And this is in people who have already been infected.

Rapid and Effective Vitamin D Supplementation in COVID-19 Patients (PubMed)

Background : We aimed to establish an acute treatment protocol to increase serum vitamin D, evaluate the effectiveness of vitamin D3 supplementation, and reveal the potential mechanisms in COVID-19.

Methods : We retrospectively analyzed the data of 867 COVID-19 cases. Then, a prospective study was conducted, including 23 healthy individuals and 210 cases. A total of 163 cases had vitamin D supplementation, and 95 were followed for 14 days. Clinical outcomes, routine blood biomarkers, serum levels of vitamin D metabolism, and action mechanism-related parameters were evaluated.

Results : Our treatment protocol increased the serum 25OHD levels significantly to above 30 ng/mL within two weeks. COVID-19 cases (no comorbidities, no vitamin D treatment, 25OHD <30 ng/mL) had 1.9-fold increased risk of having hospitalization longer than 8 days compared with the cases with comorbidities and vitamin D treatment. Having vitamin D treatment decreased the mortality rate by 2.14 times. The correlation analysis of specific serum biomarkers with 25OHD indicated that the vitamin D action in COVID-19 might involve regulation of INOS1, IL1B, IFNg, cathelicidin-LL37, and ICAM1.

Conclusions : Vitamin D treatment shortened hospital stay and decreased mortality in COVID-19 cases, even in the existence of comorbidities. Vitamin D supplementation is effective on various target parameters; therefore, it is essential for COVID-19 treatment.

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The idea is better than the execution.

White Smoke From Wuhan Lab Chimney Signals New Variant Has Been Named (BBee)

Thousands gathered outside the Wuhan Institute of Virology with faces of anxious anticipation over the weekend, as rumors had been circulating that a new COVID-19 variant would soon be named. The hopeful pilgrims’ hours of waiting were not in vain. Cheers erupted as white smoke began pouring out of the chimney early Sunday morning, signaling the creation and naming of a new COVID-19 variant. “It was a lively debate,” said one source from inside the Wuhan lab. “Yuhang suggested we just keep following the Greek alphabet and name it Xi. We haven’t heard from him in a few days, come to think of it.”


“Nu” was also floated as a possibility, but scientists wanted to avoid the stigma of being associated with nu-metal, generally acknowledged as the worst musical genre on the planet. One guy kept wanting to call it “The One-Der Variant” but this was confusing as everyone kept pronouncing it as Oh-NEE-der instead of Wonder. Finally, there was a last-ditch effort to name it the Trump variant, but this was finally defeated in favor of the safer “Omicron variant” according to sources within the lab. After the celebration died down, the pilgrims shuffled away, their faces full of cheer. But they’ll be back in a few weeks for the next one.

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“Let your light shine so brightly that others can see their way out of the dark.”
~ Native American

 

 

 

 

 

 

 

 

France

 

 

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Jun 112021
 
 June 11, 2021  Posted by at 8:47 am Finance Tagged with: , , , , , , , , , ,  60 Responses »


Wassily Kandinsky Free Curve to the Point – Accompanying Sound of Geometric Curves 1925

 

Stalin’s Covid Mismanagement Gets International Attention (CM)
100s Suffer Heart Inflammation Following COVID Vaccines (ZH)
Highly Contagious Delta Variant Now Makes Up 91% Of UK’s New Covid Cases (F.)
As Trump Banned China Travel, Fauci Funded Wuhan Lab Studies (NP)
There Are No Solutions -Part Two (Jim Quinn)
Goldman Requires Workers To Report If They Are Vaccinated (ZH)
Celebrity Cruises Has A Workaround For DeSantis’ Vaccine Passport Ban (F.)
The Global Pandemic Requires A Global Vaccination Plan (F.)
China Passes Anti-Foreign Sanctions Law (Y!)
Cash Gone Nuts: Treasury General Account Drops to $674 Billion (WS)
Trump Tells Biden To Give Putin His ‘Warmest Regards’ (F.)
Convert New York’s Entire Grid to Renewables With This One Trick (Vice)

 

 

 

 

Bhakdi: the authorities who Ok’d this; the EU; all the governments who approved these vaccines.. I think they should all be taken to court.”

 

 

Come for the headline, stay for the ivermectin.

Stalin’s Covid Mismanagement Gets International Attention (CM)

In a special live broadcast on June 1 of the DarkHorse podcast, Dr. Bret Weinstein (Ph.D.) and Dr. Pierre Kory (M.D.) discussed the incredible story of the Ivermectin drug in controlling COVID, in which they criticized Tamil Nadu Chief Minister MK Stalin for his irresponsible behavior during the pandemic. In the recent broadcast, Dr.Pierre Kory praised the Indian Council of Medical Research (ICMR) and the All India Institute of Medical Sciences (AIIMS) for including Ivermectin in their treatment guidelines. He added,” Some of the states in India went even further and they went much more aggressive. One of the boldest and uplifting moves was that of the Chief Minister of Goa, who recommended the use of Ivermectin for every adult over the age of 18 who was infected with corona. This is what I would have done if I were the Chief Minister of state.”

He went on to say that states like Goa and Uttar Pradesh took bold steps to help India reduce the number of COVID cases in the country. Later, he slammed Tamil Nadu Chief Minister MK Stalin for effectively outlawing Ivermectin and going all-in on Remdesivir, which he claims is the cause of the state’s increasing cases. He also took a dig at MK Stalin’s name recalling the Russian Communist dictator Joseph Stalin who killed thousands of people. “I don’t know why but his name is MK Stalin. I just have to mention that. So, Stalin in India outlawed Ivermectin and it is not going well for the citizens”, he said. In another interview with Sky News Australia, Craig Kelly, Independent Federal Member for Hughes, Australia, also criticized MK Stalin for blocking Ivermectin drug in the state, claiming that it resulted in a rise in mortality and infection rates while every other state that used it experienced a decrease in COVID cases.

“There is one exception in India. It is the state of Tamil Nadu down the south where they have elected a new leader who goes by the name Stalin. People actually went to the ballot boxes and voted for a bloke called Stalin. He decided that Ivermectin wasn’t effective and basically blocked from the state. The death rate and infection rate have gone through the roof while every other state that is using it is seeing massive declines.” he said.

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Perfectly safe.

100s Suffer Heart Inflammation Following COVID Vaccines (ZH)

Federal authorities have received over 800 reports of heart inflammation in people who received a COVID-19 vaccine, a health official said Thursday. The reports of myocarditis or pericarditis were submitted to the Vaccine Adverse Event Reporting System, a passive reporting system run jointly by the Centers for Disease Control and Prevention (CDC) and the Food and Drug Administration, through May 31. The bulk of the reports described heart inflammation appearing after the second of two doses of either the Pfizer of Moderna vaccines, both of which utilize messenger RNA technology.

Authorities stress that anybody can submit reports through the reporting system but authorities have already verified that 226 of the reports meet the CDC’s working case definition, Dr. Tom Shimabukuro, a deputy director at the agency, said during a presentation of the data. Followup and review are in progress for the rest. Of the 285 case reports for which the disposition was known at the time of the review, 270 patients had been discharged and 15 were still hospitalized, officials said. Myocarditis typically requires hospital care. No deaths were reported.

Update (2000ET): The Centers for Disease Control and Prevention announced Thursday that it will convene an “emergency meeting” of its advisers on June 18th to discuss rare but higher-than-expected reports of heart inflammation following doses of the mRNA-based Pfizer and Moderna COVID-19 vaccines. The new details about myocarditis and pericarditis emerged first in presentations to a panel of independent advisers for the Food and Drug Administration, who are meeting Thursday to discuss how the regulator should approach emergency use authorization for using COVID-19 vaccines in younger children.

As CBS reports, the CDC previously disclosed that reports of heart inflammation were detected mostly in younger men and teenage boys following their second dose, and that there was a “higher number of observed than expected” cases in 16- to 24-year-olds. Last month, the CDC urged providers to “ask about prior COVID-19 vaccination” in patients with symptoms of heart inflammation.

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If they don’t open on June 21, watch the spectacle.

Highly Contagious Delta Variant Now Makes Up 91% Of UK’s New Covid Cases (F.)

The highly contagious “delta” variant of the coronavirus originating from India now makes up nearly all of the U.K.’s new coronavirus cases, Health Minister Matt Hancock revealed Thursday, as the rapid spread of the mutant strain adds a new threat to Europe’s reopening. Hancock told lawmakers while under questioning about the government’s handling of the pandemic that intelligence he saw Wednesday night showed 91% of the U.K.’s new cases are made up by the delta variant. While research is still ongoing about its transmission rate, Hancock told Parliament earlier this week that the British government believes the delta variant is 40% more transmissible than the alpha variant (B.1.1.7) first detected in Britain.

Notably, as of Thursday, just three fully vaccinated people in the U.K. infected with the new variant have been hospitalized, according to data cited by Hancock, who emphasized “the jabs are working.” However, government data shows cases have been sharply rising in the U.K.: more than 41,000 new infections were reported in England in the week through June 9, a two-thirds increase from the previous seven-day period. The revelation about the virus’s prevalence in the U.K. came as the World Health Organization on Thursday morning warned the delta variant is “poised to take hold” across Europe. Hans Kluge, WHO’s regional director for Europe, encouraged countries to “act fast on signals of increasing cases” and urged caution as some move to reopen.

Hancock stressed that vaccines appear to be effective against this version of the virus. So far, the U.K. has partially vaccinated over 60% of its population and fully vaccinated nearly 43%, boasting one of the most successful vaccine rollouts in the world. The broader European Union has moved more slowly, with just 42% partially vaccinated and 22% fully vaccinated against the virus. Nonetheless, the spread of the variant is threatening to prolong lockdowns in the U.K. as the government is currently weighing whether it should delay the lifting of restrictions in England scheduled for June 21.

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Fauci and Daszak above the law.

As Trump Banned China Travel, Fauci Funded Wuhan Lab Studies (NP)

Published on February 3rd 2020, the paper entitled Synergistic China–US Ecological Research is Essential for Global Emerging Infectious Disease Preparedness was authored by researchers from the notorious EcoHealth Alliance and several Chinese Communist Party-run scientific institutions, including the Wuhan lab. EcoHealth Alliance – run by self-declared “killer” virus creator Peter Daszak – and the Wuhan lab have both come under increased scrutiny for their potential role in the creation of COVID-19 as well as the cover-up of its true origins. The 14-page paper was the culmination of two-year collaborative project between Chinese and U.S. researchers involving two workshops on “Frontiers in Ecology and Evolution of Infectious Diseases” in Shenzhen, China and the University of California Berkeley in 2018.

“The workshop has two objectives,” a summary notes before explaining: The first objective is to review recent progress in ecology and infectious disease research and identify key gaps in data, information, and knowledge. The second objective is to identify research priority areas and discuss possible mechanisms for joint, international cooperation on research and education activities in ecology and infectious disease research. The paper – which was published in EcoHealth Alliance’s official journal “EcoHealth” – asserts that collaboration between the U.S. and China is key to stopping future pandemics. “International cooperation, particularly between China and the USA, is essential to fully engage the resources and scientific strengths necessary to add this ecological emphasis to the pandemic preparedness strategy,” it posits.

“The global nature of emerging and re-emerging infectious disease threats indicates the critical role of international cooperation, particularly spearheaded by China and the USA, in emerging infectious disease (EID) preparedness,” the paper adds before calling for the two countries to form a “united front for research”: “The world would be much better equipped for curbing the next pandemic, if China and the USA provided a united front for research and progress toward EID preparedness.”

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“No scientist ever believes that he has the final answer or the ultimate truth on anything.”
– Carroll Quigley

There Are No Solutions -Part Two (Jim Quinn)

The boldness and extremeness of their actions since the Fall of 2019 seem out of character with their usual shrouded machinations behind the scenes, where the public is ignorant of their actions. Something broke within the debt saturated financial system and Powell was ordered to restart QE and start reducing interest rates to fend off disaster. In a fascinating coincidence, Event 201, a pandemic simulation, was conducted on October 18 in New York City, jointly run by The Johns Hopkins Center for Health Security, World Economic Forum, and Bill & Melinda Gates Foundation. The four-year coup attempt by the Deep State against Trump was floundering, with their pathetic last gasp impeachment farce in January 2020.

The weaponization of the Chinese bio-weapon lab virus into a global pandemic narrative accomplished numerous objectives for the Deep State. It provided cover for the Federal Reserve to funnel trillions into the pockets of the criminal Wall Street cabal and their billionaire clientele. It provided the means for Democrat governors and mayors to use it as an excuse to allow mass mail-in voting in order to fraudulently steal the election. Destroying the economy through unnecessary worthless lockdowns and blaming it on Trump gave the Democrats a further impetus to steal the election. Convincing the entire nation masking and lockdowns stopped the spread (they did not) allowed the ruling class to exercise tyrannical authoritarian un-Constitutional mandates with little to no push back from the masses – giving them the confidence to push further.

Cases and deaths were plummeting before vaccines were rolled out in any quantity, but the media mouthpieces and lying politicians will credit the jab for decline. Using propaganda fear, convincing the masses cowering in your basement was brave, using their captured media to lie about “being in this together” as our rulers flaunted their own lockdown dictates, creating social unrest based on the false narrative of systematic racism, forcing people to be scared and suspicious of each other, and pitting families and friends against each other based on falsehoods, has accomplished the mission of tearing the fabric of our society. And now for the coup de grace – forced vaccinations with an experimental untested DNA altering concoction for a virus with a 99.8% survival rate.

The immune systems of all but the sickliest are sufficient to fight off this virus and cheap, effective, and safe treatments like ivermectin and hydroxychloroquine have been scientifically proven to successfully defeat this virus. Watching scientists and doctors declare these treatments dangerous and ineffective, with Big Tech censoring anyone dissenting from this narrative, tells you how corrupted the medical and media industries have become. Science is never settled. “No scientist ever believes that he has the final answer or the ultimate truth on anything.” – Carroll Quigley

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“..the bank had sent a memo this week informing employees in the US that they had until noon on Thursday to report their vaccination status.”

Goldman Requires Workers To Report If They Are Vaccinated (ZH)

Goldman Sachs’ bankers dragged themselves back to the office last month, shortly before American workplace safety regulators weighed in on what employers are legally allowed to ask (and not ask) about their vaccination status. As it turns out, vague federal standards will allow Goldman to allow workers to go bare-faced in the office so long as they provided their managers with information confirming they had been vaccinated. Previously, disclosing vaccination status had been “optional” for employees. That has apparently changed, as Andrew Ross Sorkin’s “DealBook” reported Thursday that the bank had sent a memo this week informing employees in the US that they had until noon on Thursday to report their vaccination status.

Bankers can log their vaccination status with the bank’s internal app for employees. Since employers can’t directly ask for this information, the bank will instead ask workers to fill in the date where they received their shots, along with the maker of their vaccine. Goldman has also informed employees through the app that their vaccination status may be shared with managers and used for planning purposes. “Registering your vaccination status allows us to plan for a safer return to the office for all of our people as we continue to abide by local public health measures,” said a section of the memo, which was sent to employees who hadn’t already reported their vaccination status. A copy of the letter was obtained by the NYT.

One of the NYT’s “expert” sources explained that Goldman can share vaccination status “with certain individuals if it’s relevant to the individual’s responsibilities, but they can’t share for no reason,,” according to Jessica Kuester, who specializes in benefits at the law firm Ogletree Deakins. [..] Companies across the US are trying to find out how many workers are vaccinated ahead of full office reopenings. They have conducted surveys and given out cash rewards, mimicking strategies embraced by state governments, as the Biden Administration scrambles to meet its goal of having 70% of American adults at least partially vaccinated by July 4. Though as things stand, it looks like the US is going to miss that target.

No word yet on whether Goldman workers will receive any kind of compensation for getting vaccinated. But seeing as the bank largely skipped bonus compensation offered to junior employees by other banks, we suspect junior bankers who comply will be doing so mostly out of the goodness of their hearts – and their unwillingness to lose their jobs.

Read more …

“We’re going to manage that. We’ve got codes, we’ve got, you know, if we have to shut down cabin categories or open cabin categories, we are going to make sure that’s on us, not you.”

Celebrity Cruises Has A Workaround For DeSantis’ Vaccine Passport Ban (F.)

For cruise operators, their mission impossible is to figure out how to follow both the guidance from the Centers for Disease Control and Protection (CDC) — which recommends that 98% of crew and 95% of passengers on a ship be vaccinated before setting sail — and avoid violating a much-hyped law from Florida Governor Ron DeSantis that prohibits businesses in his state from verifying the vaccination status of individuals. The first ship slated to sail out of Florida in 15 months is Celebrity Edge, which will depart Fort Lauderdale on June 26 on a seven-night cruise to the Western Caribbean. That’s just the beginning. By mid-summer, nine of the cruise line’s 15 ships will be operating out of Florida and other ports.

On a call with travel agents on Tuesday, Dondra Ritzenthaler, senior VP of sales, trade support and service at Celebrity Cruises, outlined how Celebrity plans to thread the needle to stay on the right side of both the CDC guidance and the Florida law, according a scoop in the unofficial Royal Caribbean Blog, which is not affiliated with the cruise line. Forbes has also obtained a recording of the June 8 call. For context, this is the second such call within two weeks where Ritzenthaler has outlined a possible workaround to travel advisors. Forbes previously obtained a recording of a May 27 call where Ritzenthaler told agents that the DeSantis administration and major cruise lines had discussed a possible exemption to the Florida law for cruise lines. A DeSantis spokesperson denied that the governor had ever considered such an exemption and told reporters that Forbes had “misinterpreted” Ritzenthaler’s comments from that call.

Throughout Tuesday’s 46-minute call, Ritzenthaler outlined the CDC guidance and reiterated multiple times that 95% of passengers on all Celebrity ships would be fully vaccinated. “We will require documentation of full vaccination from all guests who are eligible,” she said. “This is for everybody, but Florida is a little bit different, okay?” “Florida — because we honor the government, we honor DeSantis — we will still go out with 100% of our crew and 95% of our guests vaccinated. But in Florida, we will not require you to have to show proof of vaccination, because we are doing this exactly the right way,” said Ritzenthaler.

“Our President and CEO, Lisa Lutoff-Perlo, right before this call, said, ‘Dondra, you reassure every travel adviser on this call that we will sail with 95% of our guests vaccinated,’” said Ritzenthaler, who did not explain in detail how Celebrity would accomplish this feat except to suggest that, instead of verifying passengers’ vaccination records at the port on embarkation day, Celebrity would manage the ratio of vaccinated-to-unvaccinated guests during the booking process. “Guys, the way we’re going to do that is we’re going to manage the sailing, right?” she told the hundreds of agents on the call. “We’re going to make sure that we open some cabin categories. We close some cabin categories. We are going to make sure that 95% of our guests are vaccinated.”

That would mean that only five percent of any ship’s inventory for any sailing would be made available to unvaccinated passengers. At the end of the call, Ritzenthaler fielded a question from a travel advisor asking for additional clarity on how the cruise line would achieve the 95% vaccination threshold. “That’s not anything you have to worry about,” Ritzenthaler reiterated. “We’re going to manage that. We’ve got codes, we’ve got, you know, if we have to shut down cabin categories or open cabin categories, we are going to make sure that’s on us, not you.”

Read more …

Don’t laugh, they’re serious.

The Global Pandemic Requires A Global Vaccination Plan (F.)

As world leaders gather for the annual G7 Leadership Summit, they have one job: end the pandemic by delivering a global roadmap to vaccinate the world. This must be a comprehensive, coordinated strategy that accelerates global Covid-19 vaccine access and delivery in order to achieve at least 70% coverage in all countries. Eighteen months into the Covid-19 pandemic, we find ourselves navigating a schism between the haves and the have-nots where those in high-income countries can see a light at the end of the pandemic tunnel while many in poorer countries are experiencing the persistence of this devastating crisis. More than 85% of vaccine doses administered to date have gone to people in high- and upper-middle-income countries. And low-income countries? Just 0.3%.

What was once the bright spot in the pandemic — the rapid development and manufacture of life-saving vaccines — now points to a vast moral failing. There are many reasons that this has happened, but it boils down to a difficult truth: there is still no end-to-end plan to vaccinate the world to at least 70% coverage and provide the support needed for every country to get vaccines delivered and administered safely. The system that allowed just a few countries to buy nearly all the world’s vaccine supply needs root and branch reform. But right now, we must collectively do more. We are calling for an end-to-end plan that addresses urgent gaps in vaccine supply and delivery. After all, vaccines alone don’t save lives — vaccinations do.

Though the commitment of COVAX — the mechanism to accelerate the development and manufacture of Covid-19 vaccines and guarantee fair and equitable vaccine access — is laudable, to date it is not enough. As WHO Director-General Dr. Tedros Adhanom Ghebreyesus said to the World Health Assembly, while COVAX has delivered 72 million doses to 125 countries, “those doses are sufficient for barely 1 percent of the combined population of those countries.” President Joe Biden’s announcement last week that shipments of surplus doses have begun is also promising, but global leaders must do more. According to the Launch & Scale Speedometer, the G7 countries (including the whole of the EU) have an excess of 3 billion doses, even after vaccinating their entire population. G7 countries have the opportunity to do the right thing. We urge leadership to share one billion doses by the end of August, and another billion by the end of the year to support the global vaccination effort.

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“The law aims to firmly safeguard the sovereign dignity and core interests of the country and oppose Western hegemony and power politics..”

China Passes Anti-Foreign Sanctions Law (Y!)

China on Thursday passed a new law to counter foreign sanctions, as it looks to build its defences against rising US and EU pressure over trade and human rights. Beijing has accused the United States of “suppressing” Chinese firms and issued veiled threats of retaliation after President Joe Biden last week expanded a blacklist of companies in which Americans are not allowed to invest. Countermeasures in the Chinese law include “refusal to issue visas, denial of entry, deportation… and sealing, seizing, and freezing property of individuals or businesses that adhere to foreign sanctions against Chinese businesses or officials,” according to the text published by the standing committee of the National People’s Congress, China’s top legislature. The restrictions can apply to family members of individuals who fall foul of Beijing.


The law also allows the country’s courts to punish companies that comply with foreign laws, and says that businesses or people in China do not need to comply with foreign restrictions. “The law aims to firmly safeguard the sovereign dignity and core interests of the country and oppose Western hegemony and power politics,” foreign ministry spokesman Wang Wenbing told a briefing. China has long complained about US sanctions and trade restrictions affecting Chinese companies, calling it an extraterritorial application of US law. Biden has stepped up US criticism of Beijing in recent months over the theft of intellectual property, and alleged human rights abuses in Hong Kong and the restive Xinjiang region. Last week, the White House expanded the blacklist of companies Americans are barred from investing in due to the firms’ links to Beijing’s military.

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“..in part responsible for the flood of cash that suddenly started to show up in the banking system that was already up to the gills in cash, and poured out from there.”

Cash Gone Nuts: Treasury General Account Drops to $674 Billion (WS)

The excess balances in the federal government’s checking account – the “Treasury General Account” (TGA) at the Federal Reserve Bank of New York – that had ballooned to $1.8 trillion by July 2020 plunged to $674 billion as of Wednesday, according to the Fed’s balance sheet, released today, the lowest since April 2, 2020, having now unwound most of the monetized-but-unspent debt-binge spike from spring last year. The Mnuchin Treasury started reducing the balance in the TGA in baby steps by borrowing less than they were spending. The Yellen Treasury announced in February that it would draw down the account to $500 billion by the end of June. $174 billion more to go:

Last spring, the government sold a gigantic amount of debt, piling an additional $3 trillion on top of its mountain of debt in just a few months. At the same time, the Fed bought $3 trillion in securities as part of its QE and wealth effect program, thereby monetizing nearly all of the $3 trillion in new debt that the government issued during that time. But the government didn’t spend all of the $3 trillion in proceeds from the new debt, and the TGA – a liability on the Fed’s balance sheet – soared from around $400 billion in February 2020 to $1.8 trillion in July. This $1.4 trillion addition that the government had borrowed and that the Fed had then monetized didn’t go into the economy and the markets but sat in the government’s checking account.


But now, during the drawdown of the TGA, that money has been going into the economy and the markets. The drawdown so far is money that the government has spent since February but didn’t have to collect in taxes or borrow from investors since it already borrowed it over a year ago, with the Fed having monetized the new debt. Since February, this money has started circulating in the economy, markets, and banking system, as the government spent it, and is in part responsible for the flood of cash that suddenly started to show up in the banking system that was already up to the gills in cash, and poured out from there.

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“..don’t fall asleep during the meeting.”

Trump Tells Biden To Give Putin His ‘Warmest Regards’ (F.)

Less than a week before President Joe Biden’s summit with Russian President Vladimir Putin in Geneva, Switzerland, former President Donald Trump put out a statement insisting his widely criticized 2018 Helsinki summit with Putin went “great” and telling Biden not to “fall asleep” when meeting with the strongman. Trump said in a statement he had a “great and productive” summit with Putin, at which he contradicted U.S. intelligence on alleged Russian collusion in the 2016 election, stating, “Putin says it’s not Russia. I don’t see any reason why it would be.” Trump said the negative image of that meeting is the result of a “belated Fake News portrayal,” claiming he “won much” from it, including the “respect of President Putin and Russia,” though what they actually discussed in their closed-door meeting remains a mystery.


Trump said it was the “obvious” choice for him to believe Russia over former U.S. intelligence officials with whom he has feuded, including former FBI directors James Comey and Andy McCabe. Trump wished Biden “good luck” in “dealing with President Putin,” and, in a continuation of attacks he made on Biden’s physical and mental capacity during the election, added “don’t fall asleep during the meeting.” “Because of the phony Russia, Russia, Russia Hoax, made-up and paid for by the Democrats and Crooked Hillary Clinton, the United States was put at a disadvantage—a disadvantage that was nevertheless overcome by me,” Trump said, reflecting how he feels his presidency was kneecapped by the Russia probe.

Read more …

The “trick” is more legislation?!

Convert New York’s Entire Grid to Renewables With This One Trick (Vice)

New York lawmakers are considering legislation that would drastically build out the state’s renewable energy offerings, a step toward a future in which some activists believe energy utilities could be fully renewable and municipally owned. The New York Build Public Renewables Act (Assembly Bill A1466A) would enable the New York Power Authority (NYPA)—the largest state public utility in the country—to develop and operate utility-scale renewable energy projects while requiring it to phase out fossil fuel infrastructure by 2025. The bill was introduced in January by State Senator Kevin Parker and Assemblymember Robert Carroll, and is championed by the Public Power NY Coalition—a statewide collective of environmental justice organizations that includes several Democratic Socialists of America (DSA) chapters and the NY Energy Democracy Alliance.

It is less radical than a previously considered piece of legislation that would have transitioned control over utilities to the state while banning for-profit energy service companies like National Grid and Con Edison. Advocates believe the passage of the Build Public Renewables Act would represent a first meaningful step toward climate action more than two years after the passage of New York’s landmark Climate Leadership and Community Protection Act (CLCPA). Passed in 2019, the CLCPA established a set of legally-binding environmental targets requiring 70 percent of New York’s energy to come from renewable sources by 2030 in order to reduce statewide greenhouse gas emissions by 85 percent by 2050.

The CLCPA was once lauded as the the most ambitious piece of state climate legislation in the country, but activists like Charlie Heller, organizer with the Public Power Coalition, say the state hasn’t upheld its promises. (Just five percent of New York’s energy production is currently generated by wind and solar power, for example.) “If you really think it’s a climate emergency, you wouldn’t just sit there and not pass any major climate bills,” Heller said.

Read more …

 

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Dec 292018
 


Sandro Botticelli Portrait of a Young Woman 1480 – 1485

 

Can an Inverted Yield Curve CAUSE a Recession? (St. Louis Fed)
The Malaysia Scandal Is Starting to Look Dire for Goldman Sachs (Taibbi)
How Crazy This Week Was For The Stock Market, In One Big Chart (MW)
Record-Bad Year-End For $1.3-Trillion “Leveraged Loan” Market (WS)
US Debt Soars $1.4 Trillion From Last Christmas, $44,000 Per Second (RT)
US Home Sales Decline To Steepen, No Respite In Sight. (WS)
Which Side Are You On? (Jim Kunstler)
Universal Basic Income Is Easier Than It Looks (Ellen Brown)
Guilty By Innuendo: The Guardian Campaign Against Julian Assange (Canary)

 

 

The St. Louis Fed says yes.

Can an Inverted Yield Curve CAUSE a Recession? (St. Louis Fed)

An inverted yield curve—or a situation in which market yields on shorter-term U.S. Treasury securities exceed those on longer-term securities—has been a remarkably consistent predictor of economic recessions. However, simply because inversions forecast recessions does not necessarily mean that inversions cause recessions. Why might a yield curve inversion cause economic activity to slow?

Recently, the Federal Reserve asked banks how their lending policies might change in response to a hypothetical moderate inversion of the yield curve.1 Many of those surveyed indicated that they would tighten lending standards or price terms on every major loan category. When asked why they would do so, several potential reasons were given: • An inversion could cause loans to be less profitable relative to the bank’s cost of funds. • An inversion would cause their banks to be less risk tolerant. • An inversion may signal a less favorable or more uncertain economic outlook. The figure below illustrates the tendency of banks to tighten lending terms when the yield curve inverts. It plots the yield on 10-year Treasury securities minus the yield on two-year securities.

Normally, the yield on 10-year securities exceeds the yield on two-year securities, reflecting the fact that the yield curve is usually upward sloping. The yield curve is downward sloping (or inverted) when the yields on shorter-term securities are higher than those on longer-term securities, as in 2000 and 2006. Both of those inversions were followed by the start of a recession within a few months. The Fed has surveyed banks on their lending terms continuously since 1990. The chart shows that the net percentage of banks tightening their lending standards on commercial and industrial loans began to rise around the time that the yield curve inverted in 2000 and 2006.

Why is this important? Researchers have found that the economy tends to slow after banks tighten their lending standards, suggesting that an inversion of the yield curve could cause economic activity to slow by leading banks to reduce the supply of loans. Thus, an inverted yield curve might do more than predict a recession: It might actually cause one.

Read more …

“..like a massage price that suggests you’re probably getting more than a massage.”

The Malaysia Scandal Is Starting to Look Dire for Goldman Sachs (Taibbi)

Goldman Sachs, which has survived and thrived despite countless scandals over the years, may have finally stepped in a pile of trouble too deep to escape. There’s even a Donald Trump angle to this latest great financial mess, but the outlines of that subplot – in a case that has countless – remains vague. The bank itself is in the most immediate danger. The company’s stock rallied Thursday to close at 165, stopping a five-day slide in which the firm lost almost 12 percent of its market value. The company is down 35 percent for the year, most of that coming in the past three months as Goldman has been battered by headlines about the infamous 1MDB scandal.

Just before Christmas, Malaysian authorities filed criminal charges against Goldman, seeking a stunning $7.5 billion in reparations for the bank’s role in the scandal. Singapore authorities also announced they were expanding their own 1MDB probe to include Goldman. In the 1MDB scheme, actors tied to former Malaysian Prime Minister Najib Razak allegedly siphoned mountains of cash out of a state investment fund. The misrouted money went to lavish parties with celebrity guests like Alicia Keys, a $35 million jet, works by Monet and Van Gogh, property in New York, Los Angeles and London, and (ironically) the funding of the movie The Wolf of Wall Street.

The cash for this mother of all bacchanals originally came from bonds issued by Goldman, which earned a whopping $600 million from the Malaysians. The bank charged prices for its bond issuance that analysts believe were suspiciously high – like a massage price that suggests you’re probably getting more than a massage.

Read more …

Not crazy, but the new normal. Because no market.

How Crazy This Week Was For The Stock Market, In One Big Chart (MW)

This Christmas week really was one for the history books. Whiplash, anyone? On Monday, the Dow Jones Industrial, the S&P 500 and the Nasdaq all booked their ugliest-ever plunges in the shortened Christmas Eve trading session. All three indexes rebounded Wednesday, only to sink early Thursday and then turn around in dramatic fashion to finish the session higher. The week finished Friday with an indecisive whimper, as stocks flipped back and forth between gains and losses all day long. The week’s sharp moves were attributed mostly to light holiday trading volume and computer-driven trading. But the ups and downs during a usually calm period are no doubt stoking investor anxiety about what’s to come.

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“..loan funds [must] hold considerable amounts of cash so that they can meet redemptions.”

Leveraged loans and considerable amounts of cash. That don’t rhyme.

Record-Bad Year-End For $1.3-Trillion “Leveraged Loan” Market (WS)

Part of the $1.3 trillion in “leveraged loans” — loans issued by junk-rated overleveraged companies — end up in loan mutual funds and loan ETFs. These funds saw another record outflow in the week ended December 26: $3.53 billion, according to Lipper. It was the sixth outflow in a row, another record. Over the past nine weeks, $14.8 billion had been yanked out, another record. These outflows are, as LCD, a unit of S&P Global Market Intelligence, put it, “punctuating a staggering turnaround for the asset class” that until October was red-hot. Despite $10 billion of net inflows during 2018 through early October, the record outflows at the end of the year caused a net outflow for the entire year of $3.1 billion. What a sudden turnaround!

It can take a long time to sell a leveraged loan. Each is a unique contract, and finding a buyer and agreeing on a price and completing the sale takes time. So loan funds hold considerable amounts of cash so that they can meet redemptions. But now, loan funds faced with this onslaught of redemptions have to dump loans in order to stay ahead of the redemptions and maintain a cash cushion. This forced selling by loan funds has caused prices to drop – which is further motivating investors to yank even more out of those loan funds. Since October 22, the S&P/LSTA US Leveraged Loan 100 Index, which tracks the prices of the largest leveraged loans, has dropped 4.8%. This price decline put the index back where it had been on October 5, 2017. But note, while there have been some defaults recently, the big wave of defaults that many expect in an environment where credit is tightening for risky corporate borrowers, hasn’t even started yet. These are still the good times:

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“..Christmas-to-Christmas growth in the federal debt equals approximately $4,178.10 per average US citizen..”

US Debt Soars $1.4 Trillion From Last Christmas, $44,000 Per Second (RT)

The year-on-year surge in US sovereign debt has totaled $1.37 trillion, the latest data released by the US Treasury Department shows. The national debt reportedly rose to $21,863,635,176,724.12 as of December 20 of the current year compared to $20,492,874,492,282.58 on December 25, 2017. The current US population stands at 328,082,386 according to the December statistics produced by the Census Bureau, a unit of the US Department of Commerce. Rough calculations show that Christmas-to-Christmas growth in the federal debt equals approximately $4,178.10 per average US citizen.

According to Census Bureau estimates, there were 127,586,000 households in the country in 2018, which means that an average American family owes some $10,743.82. Moreover, since the end of the last fiscal year through December 20, the federal government added some $340 billion to the country’s sovereign debt. That means the debt had been skyrocketing at around $3.8 billion per day, or nearly $44,000 per second. US debt is expected to hit $22 trillion in the near future and the ongoing government spending will drive the debt to $33 trillion within a decade.

Read more …

Remeber: this is what the economy runs on. This is how money enters that economy.

US Home Sales Decline To Steepen, No Respite In Sight. (WS)

Pending home sales is a forward-looking measure. It counts how many contracts were signed, rather than how many sales actually closed that month. There can be a lag of about a month or two between signing the contract and closing the sale. This morning, the National Association of Realtors (NAR) released its Pending Home Sales Index for November, an indication of the direction of actual sales to be reported for December and January. This index for November fell to the lowest level since May 2014:

“There is no reason to be concerned,” the report said, reassuringly. And it predicted “solid growth potential for the long-term.” And the index plunged 7.7% compared to November last year, the biggest year-over-year percentage drop since June 2014. The drops in October and November are indicated in red:

All four regions got whacked by year-over-year declines: • Northeast : -3.5% • Midwest: -7.0% • South: -7.4% • West: -12.2%. The plunge in pending home sales in the West, a vast and diverse region, will prolong the plunge in closed sales for the region. Particularly on the West Coast, the largest and very expensive markets — Seattle metro, Portland metro, Bay Area, and Los Angeles area — have been experiencing sharp sales declines, a surge in inventory for sale, and starting this summer, declining prices. Today’s pending home sales data confirms that these trends are intact and will likely continue.

The NAR report blames the sales decline in the expensive markets in the West on “affordability challenges” – because prices “have risen too much, too fast,” it said. And this is a true and huge problem: Home prices have shot up for years, even while wages ticked up at much slower rates. At some point, the market is going to run out of people with median incomes who are willing to stretch to the limit to buy a starter shack; and the market is going to run out of people with high incomes who are willing to stretch to the limit to buy a median house.

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“..economies don’t de-grow, at least not in an orderly way.”

Which Side Are You On? (Jim Kunstler)

The true rebalancing of pension funds, and everything else in American life, will come with the recognition that we are tapped out and bumping up against actual limits. Alas, economies don’t de-grow, at least not in an orderly way. They reach a certain complete efflorescence and then they wilt, or collapse. Survival becomes a matter of how human beings adapt to new conditions. Attempts at mitigation — propping up the status quo — add up to a mug’s game, whether it’s stock markets, agri-biz, political parties, weather systems, or influence over people in distant lands.

The argument will come down to the Mitigationists versus the Adapters. The problem for the Mitigators is that most of what they can do is based on pretending: e.g. that some energy miracle is at hand… that we’ll soon be mining asteroids… that we’ll build dikes around Miami Beach… that Modern Monetary Theory (the “science” of getting something for nothing) can negate the physical laws of the universe. The Mitigationists will be disappointed as they “consume” their last images of iPhone porn, waiting for Elon Musk to save the world.

The Adapters will be out there working with the changes that reality serves up, probably with hand tools. There may be a lot fewer of them, living in a more austere everyday economy, but they will remain onstage when the Mitigationists depart this earth in tears for a mysterious realm that turns out not to be a golf course subdivision on Mars with a Tesla in every driveway. Something’s coming and the wild algo instability in the markets is yet another sign that anybody can read. Even if it quiets down for a few weeks in early 2019, as I think it may, the fireworks are only beginning. Which side are you on?

Read more …

Maybe not in practice, though.

Universal Basic Income Is Easier Than It Looks (Ellen Brown)

Calls for a Universal Basic Income have been increasing, most recently as part of the Green New Deal introduced by Rep. Alexandria Ocasio-Cortez (D-NY) and supported in the last month by at least 40 members of Congress. A Universal Basic Income (UBI) is a monthly payment to all adults with no strings attached, similar to Social Security. Critics say the Green New Deal asks too much of the rich and upper-middle-class taxpayers who will have to pay for it, but taxing the rich is not what the resolution proposes. It says funding would primarily come from the federal government, “using a combination of the Federal Reserve, a new public bank or system of regional and specialized public banks,” and other vehicles.

The Federal Reserve alone could do the job. It could buy “Green” federal bonds with money created on its balance sheet, just as the Fed funded the purchase of $3.7 trillion in bonds in its “quantitative easing” program to save the banks. The Treasury could also do it. The Treasury has the constitutional power to issue coins in any denomination, even trillion dollar coins. What prevents legislators from pursuing those options is the fear of hyperinflation from excess “demand” (spendable income) driving prices up. But in fact the consumer economy is chronically short of spendable income, due to the way money enters the consumer economy. We actually need regular injections of money to avoid a “balance sheet recession” and allow for growth, and a UBI is one way to do it.

The pros and cons of a UBI are hotly debated and have been discussed elsewhere. The point here is to show that it could actually be funded year after year without driving up taxes or prices. New money is continually being added to the money supply, but it is added as debt created privately by banks. (How banks rather than the government create most of the money supply today is explained on the Bank of England website) A UBI would replace money-created-as-debt with debt-free money – a “debt jubilee” for consumers – while leaving the money supply for the most part unchanged; and to the extent that new money was added, it could help create the demand needed to fill the gap between actual and potential productivity.

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This is a nice effort from Tom Coburg for the Canary, and very much in line with some of the things I’ve said. But he misses an enormous elephant, and it’s hard to see how. See, he cites a May 18 2018 article by Luke Harding, Dan Collyns and Stephanie Kirchgaessner as the instant when the Guardian campaign against Assange started. But just three days prior to that, on May 15, the same authors posted 3 articles about Assange and his relations with Ecuador that are pure smear and very much part of the campaign against Assange. I linked to these things in my May 16 article, “I Am Julian Assange”

Guilty By Innuendo: The Guardian Campaign Against Julian Assange (Canary)

An analysis of articles published by the Guardian over several months reveals what appears to be a campaign to link WikiLeaks founder Julian Assange with Russia and the Kremlin. But the paper has provided little or no evidence to back up the assertions. And amid recent revelations that Guardian journalists have associated with the psychological operations experts at the Integrity Initiative, we should perhaps be more sceptical than ever before. This particular campaign by the Guardian appears to have begun with an article on 18 May 2018 from Luke Harding, Dan Collyns and Stephanie Kirchgaessner.

It stated that “Assange has a longstanding relationship with RT”, the Russian TV broadcaster; and the headline was Assange’s guest list: the RT reporters, hackers and film-makers who visited embassy. Assange has had hundreds of people visit him at the embassy, but the article was keen to focus on the “senior staff members from RT, the Moscow TV network described by US intelligence agencies as the Kremlin’s ‘principal international propaganda outlet’”. On the same day, the Guardian published another article, claiming that Assange had visits from “individuals linked to the Kremlin”, but which offered no evidence for this.

Read more …

Dec 222018
 
 December 22, 2018  Posted by at 10:14 am Finance Tagged with: , , , , , , , , , , ,  5 Responses »


Mattia Preti The Adoration of the Shepherds 1660-99

 

More Than Half A Million Americans Will Be Homeless This Christmas (F.)
Dow Dives 400 Points To End Its Worst Week In 10 Years (CNBC)
NY Fed President John Williams: Central Bank Is Listening To The Market (CNBC)
Shutdown Begins As Trump, Democrats Wrestle Over Border Wall (ZH)
A Fretful Holiday (Kunstler)
Chinese Leaders Promise Tax Cuts To Boost Flagging Economic Growth (CNBC)
Goldman Sachs Facing Class Action Lawsuits Over 1MDB Scandal (G.)
Corbyn: Brexit Would Go Ahead Even If Labour Won Snap Election (G.)
Der Spiegel To Run 23-Page Special On Reporter Who Faked Stories (AFP)
WikiLeaks Exposes US Embassies Stockpiling Spy Gear (RT)
UN Tells UK: Allow Assange To Leave Ecuador Embassy Freely (R.)
UN Experts Call For Assange’s Release As He Loses Last Appeal Over Rules (RT)
Risks Of ‘Domino Effect’ Of Tipping Points Greater Than Thought (G.)

 

 

That’s all? Hard to believe. But whatever the real number, isn’t this what Christmas is about, and what should dominate the news?

More Than Half A Million Americans Will Be Homeless This Christmas (F.)

More than half a million Americans are going to be homeless this coming holiday season. Despite seven years of steady progress and decline, the homeless population has now increased slightly for the second year running. A report from the Department of Housing and Urban Development has found that just under 553,000 people are homeless, with approximately 65% staying in sheltered accommodation. Out of every 10,000 people in the United States, 17 experienced homelessness on a single night in 2018.

Half of all people experiencing homelessness are in one of five states – California (129,972 people), New York (91,897), Florida (31,030), Texas (25,310) and Washington (22,304). Unsurprisingly, the problem is far more visible in urban areas and over half of all homeless people live in one of the country’s 50 largest cities. In fact, nearly a quarter of all people sleeping rough did so in either New York or Los Angeles. The Big Apple has one of the lowest levels of unsheltered homeless at 5% while in Los Angeles, 75% of people were found in unsheltered locations.

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Some serious money was lost. But no-one will admit it.

Dow Dives 400 Points To End Its Worst Week In 10 Years (CNBC)

Stocks plunged again on Friday, sending the Dow Jones Industrial Average to its worst week since the financial crisis in 2008, down nearly 7 percent. The Nasdaq Composite Index closed in a bear market and the S&P 500 was on the brink of one itself, down nearly 18 percent from its record earlier this year. The Federal Reserve’s rate hike on Wednesday drove the losses this week and fears of an extended government shutdown only added to the pain on Friday. The Dow Jones Industrial Average fell 414.23 points to finish at 22,445.37 in turbulent trading that sent the blue-chip index up as much as 300 points earlier in the day, only to trade back in negative territory less than one hour later.

The initial rally upward on Friday came as Federal Reserve Bank of New York President John Williams told CNBC that the central bank could reassess its interest rate policy and balance sheet reduction in the new year if the economy slows. But those gains slowly disappeared as investors used that short-term pop as a chance to sell more. The broader S&P 500 fell 2.1 percent on Friday to close at 2,416.58, while the tech-heavy Nasdaq Composite shed 2.99 percent to 6,332.99 with big losses in technology stocks including Facebook, Amazon and Apple. Stocks accelerated to their lows after President Donald Trump’s trade adviser, Peter Navarro, told Nikkei that it would be “difficult” for the U.S. and China to arrive at a permanent economic agreement after a 90-day ceasefire in the trade tensions.

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Yeah, first you kill the markets and then you listen to them. Makes a lot of sense.

NY Fed President John Williams: Central Bank Is Listening To The Market (CNBC)

New York Federal Reserve President John Williams told CNBC on Friday that the central bank is listening “very carefully” to the market’s concerns on growth, but believes the U.S. economy is in good shape. Fed Chairman Jerome Powell and other central bank leaders are moving to more data dependency, Williams said, which includes listening to people in financial markets as well as local businesses. “We are listening very carefully to what’s happening in markets for two reasons. One is financial conditions have [an] important influence on [the] economic outlook,” Williams said on “Squawk on the Street” in an interview with CNBC’s Steve Liesman.

“Second, I think we are hearing something important from markets, and that is a concern risk to the economy and potential further slowdown than we currently expect in our base case.”It’s not just looking at the “hard GDP data” or “CPI data,” he added. “We’re listening to the message of the market.” Williams appeared on CNBC after the Fed on Wednesday raised its benchmark interest rate for a fourth time this year and lowered its rate hike projection for 2019 from three to two. He said Friday that this week’s rate increase was “fully justified and makes sense,” but he added the Fed is open to reconsidering its views on rate hikes next year. Stocks rose sharply during Friday’s interview, but then faded.

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Nothing better to do for Christmas.

Shutdown Begins As Trump, Democrats Wrestle Over Border Wall (ZH)

The US government has been partially shut down for the third time this year after Congress failed to agree on a comrpomise path forward as lawmakers continued to negotiate over funding for President Trump’s border wall. Senate negotiators from both parties agreed to keep talking in search of a spending deal as the House and Senate adjourned Friday night without an agreement to avoid at least a partial shutdown starting at midnight Earlier in the day, Trump scuttled an agreement that would have kept the government open until February after coming under heavy criticism from conservative talk show hosts and allies in the House because the measure didn’t include the $5 billion he wanted for the wall. According to Bloomberg, negotiations between the White House and Democrats went on late into Friday night.

Trump’s emissaries were Vice President Mike Pence, White House budget director Mick Mulvaney and senior adviser Jared Kushner, who shuttled between private meetings with lawmakers on Capitol Hill. And while negotiations to resolve the impasse are underway, it was unclear if parts of the government will remain shuttered for days or weeks as many expect a protracted fight with both side having dug in. Ending the shutdown which affects nine of 15 federal departments and dozens of agencies, requires Democratic leaders and Trump to reach a compromise, which so far has been elusive as both sides hardened their positions. The House and Senate are scheduled to convene at noon on Saturday, but lawmakers were told they’ll be given 24 hours notice of any planned votes.

The failure of elected officials to keep the government fully operating caps a chaotic week in Washington, during which Trump announced a withdrawal of all U.S. forces from Syria, a draw-down of U.S. forces in Afghanistan, and the resignation of Defense Secretary Jim Mattis. Senator Richard Shelby of Alabama, chairman of the Appropriations Committee, said Republicans made an offer on a funding measure and were waiting for a response from Senate Democratic leader Chuck Schumer of New York. “I am hopeful,” he said of the negotiations. “We’ve made some overtures.” Talks revolved around providing less money for border barriers and more restrictions than Trump initially demanded, however the president was said to balk at anything less than the $5 billion he demanded.

https://twitter.com/realDonaldTrump/status/1076239448461987841/photo/1

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“The USA is worse than broke. It’s down to liquidating its rehypothecated hypotheticals.”

A Fretful Holiday (Kunstler)

The stopgap spending bill before congress — to avert a government shut-down — is based on the comical idea that the money is actually there to spend. Everyone with half a brain knows that it’s not money but “money,” a hypothetical abstraction composed of hopes and wishes. The USA is worse than broke. It’s down to liquidating its rehypothecated hypotheticals. After all, financialization added up to money with its value removed. The global credit markets seem to be sensing this as the tide of borrowings retreats, exposing all the wretched, slimy creatures wheezing in the exposed mudflats who have no idea how to service their old loans or generate credible new ones. But, no matter. We’ll continue pretending until the US$ flies up its own cloacal aperture and vanishes.

Contingent on that exercise is “money” for Mr. Trump’s promised-and-requested border wall. The wall is really a symbol for the nation’s unwillingness to set a firm policy on immigration. Half of the political spectrum refuses to even make a basic distinction between people who came here legally and those who snuck in and broke the law. They’ve super-glued themselves to that position not on any plausible principle, but because they’re desperate to corral Hispanic votes — and notice how eager they are to get non-citizens on the voting rolls. Their mouthpiece, The New York Times, even ran an op-ed today, None of Us Deserve Citizenship, (is that even grammatical?) arguing that we should let everybody and anybody into the country because of our longstanding wickedness.

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This scares me: “substantially increase the size of local government special bonds..”

Chinese Leaders Promise Tax Cuts To Boost Flagging Economic Growth (CNBC)

China’s top leaders have ended a vital economic meeting with a fiscal pledge to support economic growth next year. According to state media, Beijing policymakers will keep liquidity “ample” and cut taxes on a bigger scale in a bid to keep 2019 growth within a “reasonable range.” The world’s second-largest economy grew at 6.5 percent year-on-year in the third quarter of 2018, marking the weakest pace since the global financial crisis in 2008. “The pro-active fiscal policy should enhance efficiency, implement larger-scale tax cuts and fee reductions, and substantially increase the size of local government special bonds,” Xinhua said in a translation provided by Reuters. The media outlet added that a “prudent monetary policy should be neither too loose nor too tight, keeping liquidity reasonable ample.”

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Goldman blames a bunch of Malaysian government-related guys.

Goldman Sachs Facing Class Action Lawsuits Over 1MDB Scandal (G.)

Goldman Sachs has been hit with two class action lawsuits on behalf of investors who claim they were misled over the bank’s involvement in the 1MDB scandal. Two separate cases have been filed at district court in New York over the past 48 hours by Pomerantz LLP and Rosen Law Firm. They allege that Goldman Sachs failed to disclose its dealings in a fraud and money laundering scheme around the Malaysian state development fund to investors, who bought shares between 2014 and 2018. The bank’s share price has fallen 29% since early November, when reports started to link it with closer involvement in the scandal.

News reports claimed Lloyd Blankfein, who was the CEO and is now chairman of Goldman Sachs, held initial meetings with Malaysian financier Jho Low, who has been accused of masterminding the fraud. Pomerantz and Rosen Law Firm have not disclosed how much they are seeking in damages through their respective class action suits. Goldman Sachs said in a statement: “The 1MDB bond offerings were meant to raise money to benefit Malaysia; instead, a huge portion of those funds were stolen for the benefit of members of the Malaysian government and their associates. The lawsuits are without merit and we intend to vigorously contest them.”

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What Corbyn would do an interview with Guardian I don’t know. They happily smeared him as an anti-Semite not long ago. And report he said Stupid Woman.

Corbyn: Brexit Would Go Ahead Even If Labour Won Snap Election (G.)

Jeremy Corbyn has defiantly restated Labour’s policy of leading Britain out of the European Union with a refashioned Brexit deal, shrugging off intense pressure from Labour MPs and activists for the party to throw its weight behind a second referendum. The Labour leader insisted that even if his party won a snap general election in the new year, he would seek to go to Brussels and try to secure a better deal – if possible, in time to allow Brexit to go ahead on 29 March. “You’d have to go back and negotiate, and see what the timetable would be,” he said. [..]

Twenty-four hours after the furore in the House of Commons in which he was accused of insulting the prime minister, the Labour leader appeared much more relaxed on a visit to the Hope Centre, a homelessness charity in Northampton whose campaign against eviction he is supporting. He admitted he had lost his temper when confronted with a wall of jeering Conservative MPs at prime minister’s questions after May had accused him of lacking a clear Brexit policy. “I was extremely angry: the last point I’d made was, they’d suddenly found £4bn to prepare for no deal. £4bn. At the same time, police officers have lost their jobs; 100,000 vacancies in the NHS, a housing crisis; a homeless man dies on the steps of Westminster; and she and the Conservative party turned the whole thing into some pantomime joke,” he said.

Conservative MPs challenged Corbyn’s claim that he muttered “stupid people” and not “stupid woman”, as many viewers of video footage believed. But he was unrepentant. “It’s interesting their sudden concern about these matters. Where is their concern about the homeless people of this country?” he said, repeatedly jabbing a finger on the table to emphasise his point. “Where is their concern about universal credit? Where is their concern about 200,000 children living in poverty in this country?” [..] As to what stance Labour would take if a referendum were held, Corbyn said, “it would be a matter for the party to decide what the policy would be; but my proposal at this moment is that we go forward, trying to get a customs union with the EU, in which we would be able to be proper trading partners.”

And he struck a distinctly Eurosceptic note by again highlighting Labour’s concerns about the state aid rules that form part of the architecture of the single market. “I think the state aid rules do need to be looked at again, because quite clearly, if you want to regenerate an economy, as we would want to do in government, then I don’t want to be told by somebody else that we can’t use state aid in order to be able to develop industry in this country,” he said.

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The Guardian ignores all evidence it makes up entire reports, the Spiegel tries to make it look like it was just one bad apple (and no-one had a clue for 7 years).

But they both play the same game. And its name is not Truth.

Der Spiegel To Run 23-Page Special On Reporter Who Faked Stories (AFP)

The German news weekly Der Spiegel is to publish a 23-page special report on how one of its award-winning reporters faked stories for years and dealt a blow to media credibility. Claas Relotius, 33, resigned after admitting making up stories and inventing protagonists in more than a dozen articles in the magazine’s print and online editions. Since the scandal was revealed by the magazine on Wednesday, other mainstream German outlets including Die Welt and Die Zeit, which once used Relotius as a freelancer, have also begun poring through articles that he wrote for them.

“Tell it like it is,” wrote Der Spiegel on its latest magazine cover page, in an allusion to the publication’s motto coined by its founder, Rudolf Augstein, that also hangs at the entrance of its headquarters in Hamburg. In its editorial, the magazine said the scam, involving subjects including Syrian orphans and a Holocaust survivor, was the “worst thing that can happen to an editorial team”. It also apologised for the mistake and promised to “do everything to boost our credibility again”.

[..] Der Spiegel said it was “lucky that one of our employees managed to uncover this case”. But for others, the damage was already done, particularly at a time when disinformation campaigns are posing a constant challenge to the credibility of the mainstream media. “The losers are all the journalists in the country who carry out their research in difficult or dangerous circumstances, as well as members of the editorial teams, who check through texts for quality and accuracy,” said Süddeutsche Zeitung in an editorial. It noted that politicians in the far-right party Alternative für Deutschland (AfD) had seized on the case as “evidence of the dysfunctionality of the quality media”.

The AfD, whose supporters often attack the mainstream media as the “lying press”, has been openly gloating over the scandal. One of its MPs, Götz Frömming tweeted: “Ironically, the Spiegel – the self-claimed leading media outlet that likes to slag off Trump, AfD and Co., has been for years delivering the best FakeNews via Relotius.” The public broadcaster Deutsche Welle appealed to people not to condemn all mainstream media because of the “dangerous, isolated case”. It said: “Before him there have also been other fraudsters who have fuelled the accusation of a lying press. But THE lying press doesn’t exist. Most of us are honestly, sincerely doing our work to give children like Alin and Ahmed from Aleppo a voice.”

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shoppinglist.wikileaks.org

WikiLeaks Exposes US Embassies Stockpiling Spy Gear (RT)

US embassies abroad have been buying spying tools, papers released by WikiLeaks show. The documents revealed that one embassy has ordered almost 100 spy cams masked as ties, caps, pens, buttons and watches. The US Embassy Shopping List, a collection of over 16,000 procurement requests filed by US embassies around the globe, was published by WikiLeaks on Friday, a day after a targeted DDoS attack briefly disabled all of its Twitter accounts. Although the trove of quotation requests are more of an open secret, since they are considered public information, WikiLeaks created a searchable database listing even those procurement documents that are no longer linked on the embassies’ websites.

While the bulk of the documents appear to be routine requests for janitor or carpenter services, or, in the case with the US embassy in Moscow, to plant summer flowers at the ambassador’s residence, some hint at the existence of secretive surveillance operations. For instance, in August, the US embassy in El Salvador requested a curious list of items to be procured by a responsible vendor, tellingly described as “tactical spy equipment.” The list includes 94 spying devices, masquerading as everyday objects, including nine pens, 11 lighters, 11 shirt buttons, 12 watches and 12 pairs of glasses, as well as more conventional tools such as hidden cameras and binoculars.

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Reuters is pretty much useless on the topic.

UN Tells UK: Allow Assange To Leave Ecuador Embassy Freely (R.)

U.N. rights experts called on British authorities on Friday to allow WikiLeaks founder Julian Assange to leave the Ecuador embassy in London without fear of arrest or extradition. The U.N. Working Group on Arbitrary Detention reiterated its finding published in February 2016 that Assange had been de facto unlawfully held without charge in the embassy, where he has now been holed up for more than six years. He initially took asylum to avoid being extradited to Sweden, where authorities wanted to question him as part of a sexual assault investigation. That investigation was dropped.

Assange, whose website published thousands of classified U.S. government documents, denied the Sweden allegations, saying the charge was a ploy that would eventually take him to the United States where a prosecutors are preparing to pursue a criminal case against him. Britain says Assange will be arrested for skipping bail if he leaves the embassy, but that any sentence would not exceed six months, if convicted. It had no immediate comment on the experts’ call, but in June, foreign office minister Alan Duncan said Assange would be treated humanely and properly.

“… the only ground remaining for Mr. Assange’s continued deprivation of liberty is a bail violation in the UK, which is, objectively, a minor offence that cannot post facto justify the more than six years confinement that he has been subjected to since he sought asylum in the Embassy of Ecuador,” the U.N. experts said in a statement. “It is time that Mr. Assange, who has already paid a high price for peacefully exercising his rights to freedom of opinion, expression and information, and to promote the right to truth in the public interest, recovers his freedom,” they said.

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RT does this much better than Reuters.

UN Experts Call For Assange’s Release As He Loses Last Appeal Over Rules (RT)

A UN-endorsed team of experts has urged London to “immediately” allow WikiLeaks co-founder Julian Assange to leave the Ecuadorian Embassy, as the court of last resort denied his appeal over a newly imposed set of ‘censure’ rules. Seong-Phil Hong, chair-rapporteur of the Working Group on Arbitrary Detention, and Michel Forst, special rapporteur on the situation of human rights defenders, reiterated calls for the UK to abide by international law and allow Assange to leave the Ecuadorian Embassy without any precondition.

“It is time that Mr Assange, who has already paid a high price for peacefully exercising his rights to freedom of opinion, expression and information, and to promote the right to truth in the public interest, recovers his freedom,” the UN experts demanded in a statement on Friday. The experts argued that “pre-trial detention must be only imposed in limited instances,” adding that the charges Assange faces in the UK for skipping his bail while applying for asylum cannot justify his six years within the embassy’s walls. Assange became holed up in the Ecuadorian Embassy in London in 2012 after being granted asylum by then-Ecuadorian president Rafael Correa. Assange, who was in the UK at the time, was unable to go to the airport for fear of being arrested and handed over to the US, where he is wanted for exposing diplomatic and military secrets, and has had to stay in the embassy since.

[..] Despite the UN experts’ support, Assange suffered a setback with the Ecuadorian justice system. On Friday, Pichincha Provincial Court reaffirmed a decision by a lower court to throw out his appeal against a new set of house rules. The rules laid out in a special protocol in October restricted Assange’s visitation rights, made him refrain from political statements, pay his own medical bills, and take better care of his cat. Shortly after the regulation was imposed, Assange gave the cat away, with reports circulating that he has become virtually isolated in the embassy after all the staff he had personally known left.

Speaking before the court via a video-link last week, Assange warned that the new rules would “inevitably lead to a health crisis for me, resulting in my death or hospitalization or a political excuse to illegally hand me over to the British, and therefore to the United States, where I face a potential life sentence.” In late October, a judge rejected his request to change the protocol, arguing that the government has the right to impose any rules it wants inside the premises. Assange’s lawyer Carlos Poveda admitted that the whistleblower is stuck with the rules since all legal options to revise them have been “exhausted.”

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“The risks are greater than assumed..” is starting to sound old. Preaching to the long converted.

Risks Of ‘Domino Effect’ Of Tipping Points Greater Than Thought (G.)

Policymakers have severely underestimated the risks of ecological tipping points, according to a study that shows 45% of all potential environmental collapses are interrelated and could amplify one another. The authors said their paper, published in the journal Science, highlights how overstressed and overlapping natural systems are combining to throw up a growing number of unwelcome surprises. “The risks are greater than assumed because the interactions are more dynamic,” said Juan Rocha of the Stockholm Resilience Centre. “The important message is to recognise the wickedness of the problem that humanity faces.”

The study collated existing research on ecosystem transitions that can irreversibly tip to another state, such as coral reefs bleaching and being overrun by algae, forests becoming savannahs and ice sheets melting into oceans. It then cross-referenced the 30 types of shift to examine the impacts they might have on one another and human society. Only 19% were entirely isolated. Another 36% shared a common cause, but were not likely to interact. The remaining 45% had the potential to create either a one-way domino effect or mutually reinforcing feedbacks.

[..] Until recently, the study of tipping points was controversial, but it is increasingly accepted as an explanation for climate changes that are happening with more speed and ferocity than earlier computer models predicted. The loss of coral reefs and Arctic sea ice may already be past the point of no return. There are signs the Antarctic is heading the same way faster than thought. Co-author Garry Peterson said the tipping of the west Antarctic ice shelf was not on the radar of many scientists 10 years ago, but now there was overwhelming evidence of the risks – including losses of chunks of ice the size of New York – and some studies now suggest the tipping point may have already been passed by the southern ice sheet, which may now be releasing carbon into the atmosphere.

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Dec 212018
 
 December 21, 2018  Posted by at 10:42 am Finance Tagged with: , , , , , , , , , , , , , , ,  12 Responses »


Pieter Bruegel the Elder Hunters in the snow 1565

 

Dow Drops 470 Points To 14-Month Low In Day 2 Of Big Losses After Fed Hike (CNBC)
As Fear Rises On Wall Street, Strategists Warn The Worst Is Yet To Come (CNBC)
US Defense Chief Mattis Quits As Trump Pulls From Syria, Afghanistan (AFP)
House Passes Spending Bill With Border Wall Money, Senate Showdown Next (CNBC)
China Denies ‘Slanderous’ Economic Espionage Charges From US Allies (R.)
Russian Media Regulator Starts Checking Legality Of BBC’s Operations (R.)
Gatwick Runway Reopens After Days Of Drone Disruption (G.)
There’s A National Emergency All Right – But It Isn’t Brexit (G.)
Germany’s Hidden Crisis – Social Decline In The Heart Of Europe (G.)
Malaysia Seeks $7.5 Billion In Reparations From Goldman Sachs Over 1MDB (R.)
Singapore Said To Expand 1MDB Criminal Probe To Include Goldman Sachs (BBG)
Carlos Ghosn Re-Arrested On New Charges In Japan (BBC)
New Tree Species Became Extinct Before It Was Named (Ind.)

 

 

Jay Powell pricks the bubbles. Painful and inevitable. But if he ever decides to lower rates again next year, look for the bubbles to return. That’s his dilemma.

Dow Drops 470 Points To 14-Month Low In Day 2 Of Big Losses After Fed Hike (CNBC)

U.S. stocks swooned for a second day Thursday after the Federal Reserve raised benchmark interest rates and said that it would continue to let its massive balance sheet shrink at the current pace. Fears of a government shutdown also sent stocks tumbling to new lows Thursday afternoon. The Dow Jones Industrial Average fell 464.06 points to 22,859.6, bringing its two-day declines to more than 800 points and its 5-day losses to more than 1,700 points. The S&P 500 fell 1.5 percent to finish at 2,467.41 as technology stocks underperformed. The Nasdaq Composite fell 1.6 percent and closed at 6,528.41, briefly dipping into bear market territory amid big losses in Amazon and Apple.

The Nasdaq is 19.7 percent below its recent high. Companies in the S&P 500 have lost a total of $2.39 trillion in market cap this month. The Cboe Volatility Index — one of the market’s best gauges of marketplace fear — rose above 30. The Dow and Nasdaq posted their lowest closes since October 2017, while the S&P 500 finished at its lowest level since September 2017. The Dow and S&P 500, which are both in corrections, are on track for their worst December performance since the Great Depression in 1931, down more than 10 percent each this month. The S&P 500 is now in the red for 2018 by 7.7 percent.

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Yeah, all these experts. Who cares? There’s not nearly enough fear yet.

As Fear Rises On Wall Street, Strategists Warn The Worst Is Yet To Come (CNBC)

“The market’s in no man’s land,” said Peter Boockvar, chief investment strategist at Bleakley Advisory Group. Stocks have broken through the lows of the year, and technicians are scurrying to find the next support levels. On the S&P 500, he said 2,400 is a potential psychological area of support. The market plunged Thursday against the backdrop of a congressional feud with the White House over a continuing budget resolution, but the markets were more focused on the worries that have been festering over global growth and the potential for recession. “You can guarantee if the government shuts down it’s going to very soon reopen,” said Boockvar.

“This could be a carry through from yesterday, that’s legitimate. The problem now is this is the first time in years in this bull market that people are doing tax-loss selling. That’s helping to exaggerate the move. You’re also having redemptions.” Since the Fed announced its rate hike Wednesday, the Dow was down 815 points. The sharp drop in stocks since early October was unexpected and even more crushing recently, since December is typically a positive time for stocks. The 10 percent decline so far in the S&P 500 is its worst December performance since 1931. If it remains this way, it would the first time ever that December is the worst month of the year for the index.

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Have all those people who now say Mattis is the wisest and most balanced in the White House, forgotten why he’s called Mad Dog?

US Defense Chief Mattis Quits As Trump Pulls From Syria, Afghanistan (AFP)

US Defense Secretary Jim Mattis resigned Thursday, leading a chorus of protests at home and abroad after President Donald Trump ordered a complete troop pullout from Syria and a significant withdrawal from Afghanistan. Trump steadfastly defended his sudden push for retrenchment, vowing that the United States would no longer be the “policeman of the Middle East” and saying the 2,000-strong US force in Syria was no longer needed as the Islamic State group had been defeated. Mattis, a battle-hardened retired four-star general seen as a moderating force on the often impulsive president, made little attempt to hide his disagreements with Trump.

“Because you have the right to have a secretary of defense whose views are better aligned with yours,” Mattis said in a letter to Trump, “I believe it is right for me to step down from my position.” Mattis hailed the coalition to defeat Islamic State as well as NATO, the nearly 70-year-old alliance between North America and Europe whose cost-effectiveness has been questioned by the businessman turned president. “My views on treating allies with respect and also being clear-eyed about both malign actors and strategic competitors are strongly held and informed by over four decades of immersion in these issues,” Mattis wrote. One day after the surprise announcement on Syria, a US official told AFP that Trump had also decided on a “significant withdrawal” in a much larger US operation – Afghanistan.

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No government into Christmas?

House Passes Spending Bill With Border Wall Money, Senate Showdown Next (CNBC)

The House passed a temporary spending bill Thursday with money for President Donald Trump’s proposed border wall, further muddying the scramble to dodge a partial government shutdown by Friday. The chamber approved the measure to keep the government running into February by a 217-185 vote. But the path forward now is murky. The bill likely will not clear the Senate because it includes more than $5 billion for the border barrier, increasing the chances that funding for seven agencies lapses after the midnight Friday deadline. Senators were told Thursday to prepare for potential votes Friday. The chamber convenes at noon. The Senate unanimously approved a bill Wednesday night to keep the government running through Feb. 8 — without border wall money.

Trump insisted Thursday that he would not sign it. It forced House Republicans to include the wall money in the new bill. Both House Minority Leader Nancy Pelosi and Senate Minority Leader Chuck Schumer have flatly said congressional Democrats will not approve wall money. As Republicans need Democratic votes to pass spending legislation in the Senate, a partial shutdown is all but assured if the GOP insists on funding for the barrier. It is unclear if Republicans will abandon that goal in an effort to keep the government running past Friday. During a televised Oval Office fracas last week, Pelosi challenged Trump by saying he did not have the votes for wall money in the House. It turns out he did.

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We can do it, but they can’t.

China Denies ‘Slanderous’ Economic Espionage Charges From US Allies (R.)

China’s Foreign Ministry said on Friday it resolutely opposed “slanderous” accusations from the United States and other allies criticizing China for economic espionage, urging Washington to withdraw its accusations. The United States should also withdraw charges against two Chinese citizens, the ministry said, adding that China had never participated in or supported any stealing of commercial secrets and had lodged “stern representations” with Washington. “We urge the U.S. side to immediately correct its erroneous actions and cease its slanderous smears relating to internet security,” it said, adding that it would take necessary measures to safeguard its own cybersecurity and interests.

It has long been an “open secret” that U.S. government agencies have hacked into and listening in on foreign governments, companies and individuals, the ministry added. “The U.S. side making unwarranted criticisms of China in the name of so-called ‘cyber stealing’ is blaming others while oneself is to be blamed, and is self-deception. China absolutely cannot accept this.” U.S. prosecutors indicted two Chinese nationals linked to China’s Ministry of State Security intelligence agency on charges of stealing confidential data from American government agencies and businesses around the world. Prosecutors charged Zhu Hua and Zhang Shilong in hacking attacks against the U.S. Navy, the space agency NASA and the Energy Department and dozens of companies. The operation targeted intellectual property and corporate secrets to give Chinese companies an unfair competitive advantage, they said.

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More of the same: We can do it, but they can’t. The west wants to blame RT for all sorts of stuff beacuse that fits the Russophobe narrative.

Russian Media Regulator Starts Checking Legality Of BBC’s Operations (R.)

Russia’s media regulator said on Friday it would carry out checks to determine if the BBC World News channel and BBC internet sites complied with Russian law, a move it described as a response to British pressure on a Russian TV channel. Roskomnadzor, the regulator, said in a statement its checks were Russia’s response to a decision by British media regulator Ofcom, which on Thursday said that Russian broadcaster RT had broken impartiality rules in some of its news and current affairs programs. “The results of our check will be announced separately,” the Russian regulator said. Ofcom said on Thursday it was considering imposing some kind of sanction on RT, which is financed by the Russian state.

It took issue in particular with its coverage of the poisoning in Britain of former Russian spy Sergei Skripal and his daughter. Britain has accused agents working for Russia’s military intelligence agency, the GRU, of committing the crime, an allegation Moscow denies. British Media Secretary Jeremy Wright also weighed in on Thursday, saying what he called RT’s mask as an impartial news provider was slipping. RT rejected Ofcom’s findings, saying Ofcom had ignored its explanations and not paid “due regard” to its rights. Commenting on the launch of the Russian investigation on Friday, Margarita Simonyan, RT’s editor-in-chief, said on Twitter that Ofcom had hinted that it planned to strip her channel of its broadcasting license in Britain. “(Welcome to the) brave new world,” she wrote.

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Days of panic due to one or two drones, at an airport that has just one runway to begin with?!

Gatwick Runway Reopens After Days Of Drone Disruption (G.)

The first flights have resumed at Gatwick airport after a series of drone sightings caused days of disruption, affecting more than 100,000 passengers. Airlines warned customers to continue to check their flight’s status on Friday morning as the airport worked to “introduce a limited number of flights over the coming hours”. The runway had remained closed throughout Thursday night, forcing passengers to search for accommodation or shelter at the airport, and bringing demands for new aviation regulations to tackle the threat. The airport’s chief operating officer, Chris Woodroofe, said 120,000 passengers’ flights had been disrupted by the incident.

On Thursday night police said there had been more than 50 sightings of the drone in 24 hours from when the runway was first closed. Night-flight restrictions had been lifted at other airports, so “more planes could get into and out of the country”, the transport secretary, Chris Grayling said. “This is clearly a very serious ongoing incident in which substantial drones have been used to bring about the temporary closure of a major international airport,” he said. “The people who were involved should face the maximum possible custodial sentence for the damage they have done. The government is doing everything it can to support Sussex police.”

Shooting down the drone was being considered as a “tactical option” after other strategies to stop it had failed. Amid disbelief that the drone incident could be enough to bring one of the UK’s key airports to a standstill, the perpetrator or perpetrators eluded a search conducted by 20 units from two police forces in the surrounding area.

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Britain just stumbles from crisis to crisis, hidden from view by discussions about someone saying Stupid Woman.

There’s A National Emergency All Right – But It Isn’t Brexit (G.)

[..] there is a world beyond Brexit. True, it lacks the frenzied drama of cabinet walkouts, prime ministerial straw-clutching or humiliation served cold in Brussels. But things still happen – it’s just that they haven’t won much attention. It has been a good month to bury bad news. So allow me to disinter some of the headlines deep inside the newspapers. Since we’re counting small things, let’s start with children. Last week it was reported that a primary school in Great Yarmouth had opened its own food bank. It was launched by the headteacher, Debbie Whiting, after she saw pupils under 11 so hungry they were stealing from others’ lunchboxes.

This week, more than half of teachers surveyed by the National Education Union expressed fears that some of their kids won’t have enough to eat this Christmas. They reported a boy turning up wearing his trousers back to front, in order to hide the holes in the knees, and a class where one in three children sleep in their uniforms because they have no pyjamas. If anything qualifies as a national emergency, it should be this. A new generation growing up without adequate food and clothing ought to be leading TV bulletins and shaming government ministers into action. What dominates instead is blue-on-blue match commentary, because Jacob Rees-Mogg is box office while poor people can be slipped in just before the “And finally”.

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“..of all German women in work only one in three earns the minimum wage…”

Germany’s Hidden Crisis – Social Decline In The Heart Of Europe (G.)

The cover of Oliver Nachtwey’s book depicts a VW Beetle, emblem of Teutonic manufacturing prowess since Hitler’s day, driving off a cliff. Is the country that got used to imposing its values on feebler client nations – bailing out southern Europeans with their oversized public sectors, rampant tax avoidance and long lunches – in trouble? The Germany described by this Frankfurt School professor is a basket case – post-growth, post-democratic, with the first fascists in the Bundestag since the Third Reich. Despite being Europe’s richest country, it has higher numbers of working poor than any other EU state; almost one in four of its workers is paid less than the €9.30 (£8.40) minimum wage, many requiring state support.

Sociologist Ulrich Beck in the giddy 1980s called Germany an elevator society, in which millions of skilled workers upgraded from VWs to Audis and expected their children to rise still further in social status and wealth. The elevator may have seized up for a while after reunification, but only five years ago Germany seemed unstoppable. Every German, Beck thought, was in the same lift. No longer. Not only has downward mobility become more evident but the poor get poorer, the rich get richer, the older get tenure, the younger join the precariat. Sure, greater equality of opportunity means more women work than ever before, but of all German women in work only one in three earns the minimum wage.

“So while German women are more equal in terms of rights, inequality between women has never been greater than it is today,” Nachtwey argues. This is symptomatic of what he calls regressive modernisation and of the following paradox: “The more a society is based on equality of opportunity, the more unequal it becomes, and the more legitimate its inequalities”. Legitimate? The losers are perceived to be those who deserve to lose, the winners those who deserve to win. And the losers are the usual suspects – women, immigrants, those who have no qualifications. A Germany that once prided itself on social mobility, and whose sociologists once crazily imagined class distinctions were over, has become, in terms of class, as sclerotic as Britain.

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There’s a class action case looming as well.

Malaysia Seeks $7.5 Billion In Reparations From Goldman Sachs Over 1MDB (R.)

Malaysia is seeking US$7.5 billion in reparations from Goldman Sachs over its dealings with scandal-linked state fund 1MDB, the Financial Times reported on Friday (Dec 21), citing the country’s finance minister. Malaysian prosecutors this week filed charges against Goldman Sachs in connection with its role as underwriter and arranger of three bond sales that raised US$6.5 billion for 1Malaysia Development Berhad (1MDB), the first criminal action against the US bank over the scandal. Goldman Sachs has consistently denied wrongdoing and said certain members of the former Malaysian government and 1MDB lied to the bank about the proceeds of the bond sales.

In addition to the bonds’ total value, Goldman Sachs should also return US$1 billion to cover US$600 million in fees paid to the bank and bond coupons that were “higher than the market rate”, the FT quoted Malaysian finance minister Lim Guan Eng as saying. The three 10-year bonds carried coupons ranging from 4.4 per cent to 5.99 per cent. Lim also told the FT that reparations should at least be more than US$1.8 billion, the sum Goldman Sachs has told investors it had set aside to cover potential losses related to 1MDB legal proceedings. “Their figure is US$1.8 billion. Ours is US$7.5 billion,” Lim said. Goldman Sachs told the FT: “The 1MDB bond offerings were meant to raise money to benefit Malaysia; instead, a huge portion of those funds were stolen for the benefit of members of the Malaysian government and their associates.”

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The squid screwed up royally. But no-one at Goldman will be arrested.

Singapore Said To Expand 1MDB Criminal Probe To Include Goldman Sachs (BBG)

Singapore has expanded a criminal probe into fund flows linked to scandal-plagued 1MDB to include Goldman Sachs, which helped raise money for the entity, people with knowledge of the matter said. Police in the city-state had been examining Goldman’s relationship with the Malaysian state investment company since at least late 2017, but until recently, the firm’s local unit itself wasn’t a focus of any investigation, said the people, asking not to be named discussing sensitive information.

Authorities are trying to determine whether some of the roughly $600 million in fees from the three bond deals Goldman arranged for 1MDB from 2012 to 2013 flowed to the Singapore subsidiary, they said. Singapore’s widened probe opens a potential new battle front for Goldman, less than a week after Malaysia filed the first criminal charges against the firm over a relationship that spawned one of the biggest scandals in its history. Singapore is coordinating closely with the U.S. Justice Department, which is also investigating Goldman and has filed criminal charges against two former senior bankers at the firm, the people said.

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He’s been at it for a while: “..prosecutors now accuse Mr Ghosn of shifting a private investment loss of over $16m onto Nissan in the wake of the 2008 financial crisis.”

Carlos Ghosn Re-Arrested On New Charges In Japan (BBC)

Former Nissan chairman Carlos Ghosn has been re-arrested on fresh charges, Japanese media report, dashing any hopes he could be released on bail. Mr Ghosn has spent the last month in prison, accused of misusing funds and hiding $80m of income. But on Thursday a court rejected a request by the prosecution to extend his detention, which meant he could apply to be released on bail. Friday’s arrest is on a new charge of aggravated breach of trust. According to Japanese broadcaster NHK, prosecutors now accuse Mr Ghosn of shifting a private investment loss of over $16m onto Nissan in the wake of the 2008 financial crisis.

A towering and revered figure in the auto industry, Mr Ghosn has not yet responded to the latest allegation – but he has consistently denied all prior accusations made against him. He was first arrested in Tokyo in November as allegations of financial misconduct surfaced. The BBC’s Mariko Oi says that ever since Carlos Ghosn stepped off his private jet only to be taken into police custody, the case has gripped Japan with speculation rife over what could be behind such a stunning fall from grace. The case has been highly unusual – not least for a high profile chief executive to be spending time in jail – but also because of its legal twists such as yesterday’s when the court rejected an application to extend his detention..

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Animal species are much easier to worry over. Maybe that’s not all that smart.

“..at least six other studies failed to turn up any sign that the tree still exists. Tens of thousands of plant species globally face similar risks.”

New Tree Species Became Extinct Before It Was Named (Ind.)

Scientists have identified a new species of tree that is thought to have become extinct before it was even named. The tree, which has now been called Vepris bali, is believed to have been unique to a forest reserve in west Africa, but forest clearing and agricultural development have wiped it out. Scientists are studying the vepris species for the antimicrobial and antimalarial properties of their essential oils. Researchers hope several other vepris trees will be identified and named in Cameroon before they also disappear. A specimen was collected by a forester, Edwin Ujor, in the Bali Ngemba Forest Reserve in Cameroon in 1951.

The specimen was thought to belong to the genus vepris, which has 80 species, mostly found across Africa. But the tree has not been seen anywhere since. Researchers from the Royal Botanic Gardens, Kew, and the country’s University of Yaoundé I examined the original specimens and used molecular phylogenetic studies to identify the new species. They say the tree is now either critically endangered or already extinct.

Repeated efforts to find the species between 2000 and 2004 and at least six other studies failed to turn up any sign that the tree still exists. Tens of thousands of plant species globally face similar risks. According to the International Plant Names Index, only about 5 per cent of all known species have ever been formally assessed for their extinction risk. The authors wrote: “This makes it a priority to discover, document and protect such species before they become globally extinct.” The Bali Ngemba Forest Reserve, an officially protected forest, is part of the Bamenda highlands, an area so denuded of its natural forest vegetation that it is now known in Cameroon as “the grasslands”.

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Nov 132018
 
 November 13, 2018  Posted by at 10:10 am Finance Tagged with: , , , , , , , , , , , , , ,  3 Responses »


Vincent van Gogh Peasant burning weeds 1883

 

Dow Plunges 600 Points As Apple Leads Tech Rout (CNBC)
The Economic Consequences Of Debt (Roberts)
The Fed Supports Capital In Its Eternal War With Labor (Hunt)
China State Banks Selling Dollars In FX Market To Arrest Yuan Losses (R.)
Goldman Sachs Down Most In 7 Years On 1MDB, ‘Fear Of The Unknown'(BBG)
Banking Consolidation In Europe Is ‘Inevitable’ – UBS Chief (CNBC)
China Scours Social Media, Erases Thousands Of Accounts (R.)
Working to Protect the World from Bananas (Epsilon)
Turkey, France Spar Over Khashoggi Killing (AFP)
US Federal, State Elections Still In Flux (R.)
Rock the Vote (Kunstler)
Crucifying Julian Assange (Chris Hedges)
Stan Lee Leaves a Legacy as Complex as His Superheroes (DB)

 

 

“..the FANG trade is dead and the market is struggling to find a replacement.”

Dow Plunges 600 Points As Apple Leads Tech Rout (CNBC)

The Dow Jones Industrial Average fell 602 points on Monday after a big decline in Apple shares, a rise in the U.S. dollar and lingering worries about global trade weighed on investor sentiment. Monday’s losses bring the Dow’s decline over the past two sessions to 804 points; it closed at 25,387.18. The tech-heavy Nasdaq Composite pulled back 2.8 percent to 7,200.87 and fell back into the correction territory it first entered during the October market rout. The S&P 500 dropped 2 percent to 2,726.22 as financials tanked, led by Goldman Sachs. In late-afternoon trading, the major indexes hit their lows of the day after Bloomberg News reported the White House was circulating a draft report on auto tariffs. Shares of General Motors turned negative following the report.

Apple shares tanked by 5 percent after Lumentum Holdings, which makes technology for the iPhone’s face-recognition function, cut its outlook for fiscal second quarter 2019. Lumentum CEO Alan Lowe said one of its largest customers asked the company to “materially reduce shipments” for its products. Shares of Lumentum plunged 33 percent. The decline in Apple pressured the broader technology sector. The Technology Select Sector SPDR dropped 3.5 percent. Alphabet and Amazon shares pulled back 2.7 percent and 4.3 percent, respectively. Amazon shares fell into bear-market territory, down about 20 percent from its 52-week high. [..] Peter Boockvar, chief investment officer at Bleakley Advisory Group, said “the FANG trade is dead and the market is struggling to find a replacement.”

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I’m partial to the last graph. It shows an undeniable long term trendline.

The Economic Consequences Of Debt (Roberts)

The relevance of debt growth versus economic growth is all too evident as shown below. Since 1980, the overall increase in debt has surged to levels that currently usurp the entirety of economic growth. With economic growth rates now at the lowest levels on record, the growth in debt continues to divert more tax dollars away from productive investments into the service of debt and social welfare. It now requires nearly $3.00 of debt to create $1 of economic growth.

Another way to view the impact of debt on the economy is to look at what “debt-free” economic growth would be. In other words, without debt, there has actually been no organic economic growth.

In fact, the economic deficit has never been greater. For the 30-year period from 1952 to 1982, the economic surplus fostered a rising economic growth rate which averaged roughly 8% during that period. Today, with the economy expected to grow at just 2% over the long-term, the economic deficit has never been greater.

But it isn’t just Federal debt that is the problem. It is all debt. When it comes to households, which are responsible for roughly 2/3rds of economic growth through personal consumption expenditures, debt was used to sustain a standard of living well beyond what income and wage growth could support. This worked out as long as the ability to leverage indebtedness was an option. The problem is that when rising interest rates hit a point where additional leverage becomes problematic, further economic cannot be achieved. Given the massive increase in deficit spending by households to support consumption, the “bang point” between rates and the economy is likely closer than most believe.

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The Fed must step back as wages rise.

The Fed Supports Capital In Its Eternal War With Labor (Hunt)

For 46 years, from 1951 to 1997, we were no more and no less rich than our economy grew. Which makes sense. That’s the neutral vision of monetary policy, where you’re not trying to pull forward future growth through leverage and easy money in order to create more wealth today. For the past 20 years, however, we have had a series of wealth bubbles – first the Dot-Com bubble, then the Housing Bubble, and today the Financial Asset Bubble – that have made us richer than our economy grows. Each of these bubbles was intentionally “blown” by the Fed through monetary policy. That’s the tried and true method of creating a wealth bubble in the modern age of fiat money – you artificially lower the cost of money to encourage borrowing and leverage, which in turn pulls future growth into the present. It’s a neat trick so long as you can keep it going.

But that’s the problem, of course. The Fed can’t keep it going, not if it wants to satisfy its raison d’etre, which is to keep inflation bottled up, particularly wage inflation. Once wage inflation starts to pick up, the Fed ALWAYS stops blowing bubbles. Why? Because the Fed, like every central bank, was created to support Capital in its eternal war with Labor. It’s in the name. They are bankers. I know that sounds all Marxist and conspiratorial and all that, but it’s really not. It’s very straightforward. It’s Alexander Hamilton, not Karl Marx. In case you haven’t noticed, wage inflation has started to pick up. The Fed has stopped blowing this Financial Asset Bubble. Then isn’t the inescapable conclusion that we are now inevitably heading back to that GDP growth line? And if that IS the conclusion, then how bad could it get for investors?

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A very ominous sign.

China State Banks Selling Dollars In FX Market To Arrest Yuan Losses (R.)

Major state-owned Chinese banks were seen selling dollars at around 6.97 per dollar in the onshore spot foreign exchange market in early trade on Tuesday, three traders said, in an apparent attempt to arrest sharp losses in the local currency. The onshore spot market opened at 6.9681 per dollar, weakening to a low of 6.9703 at one point in early deals. “Big banks were selling (dollars) to defend the yuan,” said one of the traders. The move by the state-run banks helped the yuan recover to 6.9550. The onshore spot yuan was trading at 6.9645 as of 0237 GMT.

Traders attributed the sharp morning losses in the yuan to broad strength in the U.S. dollar, which hit 16-month highs against a basket of six other major currencies. They also suspect the authorities are keen to prevent the yuan from weakening too sharply before U.S. President Donald Trump and his Chinese counterpart President Xi Jinping’s meeting later this month. The two countries’ leaders plan to meet on the sidelines of a G20 summit, in Argentina at the end of November for a high-stakes talk.

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The Squid got hungry.

Goldman Sachs Down Most In 7 Years On 1MDB, ‘Fear Of The Unknown'(BBG)

Goldman Sachs Group’s reputation is facing one of its biggest crises of the decade – and now its shares are, too. Since prosecutors implicated a trio of Goldman Sachs bankers in a multi-billion-dollar Malaysian fraud early this month, investors have endured an almost daily drip of news on the firm’s ties to the scandal. The barrage culminated on Monday (Nov 12) as Malaysia’s finance minister demanded a “full refund”, tipping Goldman’s shares into their biggest drop since 2011. Across Wall Street, analysts expressed surprise over the dive, noting the bank – which hasn’t been charged with wrongdoing – can probably stomach any payment that might be extracted in the case. Instead, some said, the decline appeared to be due to a combination of concern over the persistently harsh spotlight and uncertainty about what’s to come.

It was also a generally bad day in US markets. “It’s not so much the dollar amount,” said Mr Gerard Cassidy at RBC Capital Markets. “It’s more that we don’t know all of the facts yet; we don’t know all of the important points to the story at this time. It’s the fear of the unknown.” On Nov 1, at least three senior Goldman Sachs bankers were publicly implicated by the US Department of Justice in a multi-year criminal enterprise that included bribing officials in Malaysia and elsewhere and laundering hundreds of millions of dollars. The firm has said it’s cooperating with the investigations and may face “significant” fines. [..] The Malaysia probe focuses on the country’s scandal-plagued state investment company, 1Malaysia Development Bhd and the US$6.5 billion it raised in 2012 and 2013. Goldman Sachs handled the deals, reaping almost US$600 million in fees.

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“..technology will make the sector more “effective and more efficient.”

Banking Consolidation In Europe Is ‘Inevitable’ – UBS Chief (CNBC)

The European banking system needs consolidation and “as time goes by, it will become more and more inevitable,” the head of one of the largest banks in Europe told CNBC on Tuesday. Often investors, policy-makers and other industry experts refer to fragmentation as one of the biggest hurdles to European banks. UBS chief Sergio Ermotti told CNBC that the issue is “not sustainable.” “That’s something that as time goes by will become more and more inevitable, is part of the solutions. For sure consolidation needs to happen, in particular in Europe, where we see a lot of fragmentation that it is not sustainable,” Ermotti told CNBC’s Joumanna Bercetche. He further added that technology will make the sector more “effective and more efficient.”

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Self-media: social media not run by government.

China Scours Social Media, Erases Thousands Of Accounts (R.)

China’s top cyber authority has scrubbed 9,800 social media accounts of independent news providers deemed to have posted sensational, vulgar or politically harmful content on the Internet, it said late on Monday. China’s strict online censorship rules have tightened in recent years with new legislation to restrict media outlets, surveillance measures for media sites and rolling campaigns to remove content deemed unacceptable. The Cyberspace Administration of China (CAC) said in a statement that the campaign, launched on Oct. 20, had erased the accounts for violations that included “spreading politically harmful information, maliciously falsifying (Chinese Communist) party history, slandering heroes and defaming the nation’s image.”

CAC also summoned social media giants, including Tencent’s Wechat and Sina-owned Weibo, warning them against failing to prevent “uncivilized growth” and “all kinds of chaos” among independent media on their platforms. “The chaos among self-media accounts has seriously trampled on the dignity of the law and damaged the interests of the masses,” CAC said. The term “self-media” is mostly used on Chinese social media to describe independent news accounts that produce original content but are not officially registered with the authorities.

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Despair no more. Big Brother is here.

Working to Protect the World from Bananas (Epsilon)

The main story is the increased pace and arc of the Chinese system overall, not the ‘play-by-play’. With technology, even totalitarian surveillance technology, there typically is no ‘big bang’, just a bunch of independent systems coming on line, getting adopted over time, then getting networked together, resulting in a series of subtle shifts in personal behavior, and then a tipping point. Having watched this system come on line for nearly 20 years, the deployment of the Chinese technology-driven domestic surveillance system was pretty limited even up until 2010, but has been absolutely rip-roaring and accelerating over the last five years thanks to the same driving forces of most other tech advances since 2010:

• Ubiquitous handheld connected device • App adoption • Cheap sensors (inc. cameras) • Cheap massive data storage • Sophisticated statistical algorithms • Leaps forward in compute power and cost. All of these advances are so powerful for surveillance with its inherent big, unstructured data characteristics that I think we are now really close to an inflection point where the system is starting to really work in a functional day-to-day way, which will then lead to a behavioral tipping point. I don’t think the main story is that controversial at this point, i.e., I don’t think anyone, even the Chinese government, denies this system is being built, the intention of it, or that it is starting to work in a practical way.

Therefore, I think the more interesting story in many ways is the sub-story of the willful ignorance of the main story by the West. I was at an event last week where a new fancy think tank on AI ethics based here in San Francisco was presenting and expounding their tenet of “Working to protect the privacy and security of individuals”, whilst simultaneously welcoming Baidu into their organization. I’m sorry, but that’s like “Working to protect the world from bananas” while signing up Del Monte as a member. Bananas. With hypocritical sprinkles. And a big ignorant cherry on top.

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They’ve all heard the tapes, but not one of them talks about the content.

Turkey, France Spar Over Khashoggi Killing (AFP)

Turkey on Monday lashed out at “unacceptable” and “impertinent” comments by the French foreign minister who accused President Recep Tayyip Erdogan of playing a “political game” over the murder of Jamal Khashoggi. Erdogan said on Saturday that Turkey had shared recordings linked to the Saudi journalist’s murder last month with Riyadh, the United States, France, Britain and other allies, without giving details of the tapes’ specific content. In an interview with France 2 television on Monday, French Foreign Minister Jean-Yves Le Drian said he “for the moment was not aware” of any information transmitted by Ankara. Asked if the Turkish president was lying, he said: “It means that he has a political game to play in these circumstances.”

His comments provoked fury in Ankara. “We find it unacceptable that he accused President Erdogan of ‘playing political games’,” the communications director at the Turkish presidency, Fahrettin Altun, told AFP in a written statement. “Let us not forget that this case would have been already covered up had it not been for Turkey’s determined efforts.” Turkish Foreign Minister Mevlut Cavusoglu responded even more sharply, saying that his French counterpart’s accusations amounted to “impertinence”. “It does not fit the seriousness of a foreign minister,” he said, accusing Le Drian of “exceeding his authority”.

[..] Altun said Ankara had shared evidence linked to the murder with officials from a large number of countries and that France was “no exception”. “I confirm that evidence pertaining to the Khashoggi murder has also been shared with the relevant agencies of the French government,” he said. A representative of French intelligence listened to the audio recording and examined detailed information including a transcript on October 24, he added.

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The US is incapable of building a strong election system. How disgraceful is that?

US Federal, State Elections Still In Flux (R.)

Democrats took control of the U.S. House of Representatives in the Nov. 6 elections and Republicans held onto a majority in the U.S. Senate, but more than a dozen races remain undecided nearly a week later. The outcomes of two Senate races, 13 House seats and two governorships had yet to be settled on Monday. The results of Arizona’s U.S. Senate race became clear on Monday, when Democratic candidate Kyrsten Sinema declared victory and Republican candidate Martha McSally conceded after multiple media outlets called the race for Sinema. Florida ordered a recount in the race where Democratic Senator Bill Nelson trailed his Republican challenger, Florida Governor Rick Scott.

Florida also ordered a recount for its gubernatorial race, while the winner of the governor’s race in Georgia remained uncertain, with a December runoff still possible. In one of Mississippi’s U.S. Senate races, Republican Senator Cindy Hyde-Smith and her Democratic challenger, Mike Espy, will contest a runoff on Nov. 27 after neither won a majority. Vote tallies continue to trickle in for the 13 U.S. House races that appear too close to call, and there is no consensus among media outlets and data provider DDHQ that a victor has emerged. Democrats held narrow leads in eight of those races, according to unfinished tallies compiled by DDHQ.

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“.. C-Span will be livelier and more colorful than the WWE Wrestlemania round-robin, midget division.”

Rock the Vote (Kunstler)

It warmed my heart to read in The Wall Street Journal that Hillary Clinton is preparing to re-enter the Washington DC swamp from her deluxe exile in the woods of Chappaqua, New York, and make another run for the White House — though it’s hard to calculate how many porters in sandals and loincloths will be required to lug all her baggage around the campaign trail. Will hubbie hit the hustings with her? That would be rich. I can just imagine the pussy-hatted legions shrieking #MeToo at every stop. Surely there is no better way to put the Democratic Party out of its misery. The post-election melodramas in Georgia and Florida grind on, despite the various rules and laws about deadlines for certifying ballots and accounting for their origin.

What is a ballot after all but a mere scrap of paper, easily reproducible, and interchangeable. Sometimes, they make strange journeys out of election headquarters in trucks and SUVs, seeking fun and excitement, and they have been known to mysteriously turn up by the hundredweight in broom closets where they retreat to caucus. Only one thing is certain: the ballot fiasco is a billable hours bonanza for DC lawyers arriving on the scene to sort things out — which they may not manage anyway. If the vote count somehow remains in favor of the provisional winners — Republicans Rick Scott, Ron DeSantis (Fla), and Brian Kemp (Ga) — you can be sure we’ll be in a frenzy of sore loserdom that will make the Medieval ergot outbreaks of yore look like episodes of Peewee’s Playhouse.

If the provisional votes get overturned, the attorneys billable hours will quickly exceed the national debt, and we’ll find ourselves in a new era where the free citizens of this republic can‘t be trusted to the simple task of counting ballots, or even holding elections in the first place. [..] Meanwhile, the new Democratic majority congress prepares to ramp up its longed-for multi-committee inquisition against Trump and Trumpism, and the Republican Senate will counter-punch with binders of criminal referrals against the superstars of the Resistance. C-Span will be livelier and more colorful than the WWE Wrestlemania round-robin, midget division.

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The role of the MSM demands much more scrutiny.

Crucifying Julian Assange (Chris Hedges)

Assange was once feted and courted by some of the largest media organizations in the world, including The New York Times and The Guardian, for the information he possessed. But once his trove of material documenting U.S. war crimes, much of it provided by Chelsea Manning, was published by these media outlets he was pushed aside and demonized. A leaked Pentagon document prepared by the Cyber Counterintelligence Assessments Branch dated March 8, 2008, exposed a black propaganda campaign to discredit WikiLeaks and Assange.

The document said the smear campaign should seek to destroy the “feeling of trust” that is WikiLeaks’ “center of gravity” and blacken Assange’s reputation. It largely has worked. Assange is especially vilified for publishing 70,000 hacked emails belonging to the Democratic National Committee (DNC) and senior Democratic officials. The Democrats and former FBI Director James Comey say the emails were copied from the accounts of John Podesta, Democratic candidate Hillary Clinton’s campaign chairman, by Russian government hackers. Comey has said the messages were probably delivered to WikiLeaks by an intermediary. Assange has said the emails were not provided by “state actors.”

The Democratic Party—seeking to blame its election defeat on Russian “interference” rather than the grotesque income inequality, the betrayal of the working class, the loss of civil liberties, the deindustrialization and the corporate coup d’état that the party helped orchestrate—attacks Assange as a traitor, although he is not a U.S. citizen. Nor is he a spy. He is not bound by any law I am aware of to keep U.S. government secrets. He has not committed a crime.

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Enough controversy for ten.

Stan Lee Leaves a Legacy as Complex as His Superheroes (DB)

He was born Stanley Martin Lieber in the Bronx. For nearly 22 years, beginning almost immediately after graduating from DeWitt Clinton High School, he labored in obscurity as a writer, editor, and art director in a publishing industry just one cultural rung above pornography: comic books. And then, in 1961, he became one of the pivotal 20th century figures who elevated comics into the first draft of American pop culture. Stan Lee, who died Monday, November 12 at age 95, is synonymous with Marvel Comics. Nearly every movie released by Hollywood upstart-turned-juggernaut Marvel Studios can trace part of its creative origins to Lee. (The exceptions are the Captain America, Guardians of the Galaxy, and forthcoming Captain Marvel franchises.)

Among people who shaped the legacy of the Disney company, which purchased Marvel in 2009 for $4 billion, Lee is probably second only to Walt Disney himself. George Lucas is third because of the debts Star Wars owes to the comics creations of Lee’s greatest creative partner and bitterest foe, Jack Kirby. Lee’s legacy at Marvel is immortal. But so too is the debate and controversy over what that legacy specifically is. In some quarters in comics, and especially to devotees of Kirby, Stan Lee is a supervillain–a man who stole credit, and corresponding fortunes, from the people who truly shaped Marvel creatively in the ’60s, relegating them to also-ran obscurity.

Aspects of that critique, uncomfortably, have merit. Lee had a maestro’s instincts for what we now call branding, and it cast a shadow long enough to keep his Marvel collaborators in darkness. In press interviews, his endless public appearances, and his own writing, Lee portrayed himself as the driver of the Marvel Universe, rendering artists like Kirby and Spider-Man co-creator Steve Ditko as afterthoughts.

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Jul 192018
 
 July 19, 2018  Posted by at 8:16 am Finance Tagged with: , , , , , , , , ,  8 Responses »


Félix Vallotton The balloon 1899

 

Is Goldman Sachs Really a Bank? Really? (Whalen)
Everyone Is Smart Except Trump (Fischer)
Russiagate Is Like 9/11, Except It’s Made Of Pure Narrative (CJ)
Kudlow: US Expecting Significant Trade Offer From EU Soon (CNBC)
Mega Tech’s Trillions Of Market Value In Eye-Popping Perspective (MW)
Amazon Now Accounts For 49% Of US Online Retail (ZH)
EU Commissioner On $5 Billion Fine: Google Has To ‘Stop This Behavior’ (CNBC)
How Can We Reverse Brexit When Europe Doesn’t Want Us Back? (Münchau)
Police ‘Identify’ Skripal Suspects (PA)
Cali High Court Orders Proposal To Split Up State Removed From Ballot (R.)
The Cashless Society Is A Con – And Big Finance Is Behind It (G.)
The Most Unbelievable Tax Break Ever (F.)

 

 

No, it’s not.

Is Goldman Sachs Really a Bank? Really? (Whalen)

Most of the largest US banks that reported earnings this week saw interest expense rise by mid-double digits even as interest earnings rose by single digits. Goldman Sachs, for example, saw its funding expenses increase 61% year-over-year (YOY) in Q2’18 while interest income rose just 50%. Citigroup (C), on the other hand, being already positioned in the world of institutional funding, saw interest expense rise only 28%. But the Q2’18 earnings seem to confirm a rising trend in funding costs that could see NIM flatten out and decline by 2019. When Solomon’s ascension to the top spot was announced at Goldman Sachs, our friend Bill Cohan commented on CNBC that this amounted to a takeover of GS by alumni of Bear, Stearns & Co. God does have a sense of humor.

He also reminded Andrew Sorkin et al on Squawk Box that the freewheeling Goldman of old is long gone and that GS is now run and regulated as “a bank.” Well, no, not really. Goldman Sachs is basically a broker-dealer with a small bank in tow. When you compare the net interest margin of GS with its peers, for example, the other members of Peer Group 1 defined by the FFIEC reported NIM of 3.28% vs 0.41% for GS in Q1’18. Because the bank unit of GS is so small, the overall NIM for the group is 1/10th of its peers compared with total assets. Goldman makes less than 2% on earning assets vs almost 4% for its asset peers. So to paraphrase the wisdom of Josh Brown, GS does not make money on interest rates, up or down, but rather earns fees from trading and investment banking. GS profits from the spread, both in terms of price and volume.

The basic problem confronting David Solomon and his colleagues is that GS really is not a bank. It is regulated like a bank and therefore constrained in terms of business activities, but it does not earn the carry on assets that most banks take for granted when they turn on the lights each morning. Talk of expanding the banking side of the business (aka “Marcus”) is fine, but progress in this regard is very slow indeed. Of the $9.4 billion in net revenues reported in Q2’18, just $1 billion represented net interest earnings.

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My Twitter account risks becoming unreadable because of this. I like diverse points of view, but there’s just too much nastiness. People retweeting factoids dozens of times a day.

Everyone Is Smart Except Trump (Fischer)

It really is quite simple. Everyone is smart except Donald J. Trump. That’s why they all are billionaires and all got elected President. Only Trump does not know what he is doing. Only Trump does not know how to negotiate with Vladimir Putin. Anderson Cooper knows how to stand up to Putin. The whole crowd at MSNBC does. All the journalists do. They could not stand up to Matt Lauer at NBC. They could not stand up to Charlie Rose at CBS. They could not stand up to Mark Halperin at NBC. Nor up to Leon Wieseltier at the New Republic, nor Jann Wenner at Rolling Stone, nor Michael Oreskes at NPR, at the New York Times, or at the Associated Press. But — oh, wow! — can they ever stand up to Putin! Only Trump is incapable of negotiating with the Russian tyrant.

Remember the four years when Anderson Cooper was President of the United States? And before that — when the entire Washington Post editorial staff jointly were elected to be President? Remember? Neither do I. The Seedier Media never have negotiated life and death, not corporate life and death, and not human life and death. They think they know how to negotiate, but they do not know how. They go to a college, are told by peers that they are smart, get some good grades, proceed to a graduate degree in journalism, and get hired as analysts. Now they are experts, ready to take on Putin and the Iranian Ayatollahs at age 30. That is not the road to expertise in tough dealing. The alternate road is that, along the way, maybe you get forced into some street fights.

Sometimes the other guy wins, and sometimes you beat the intestines out of him. Then you deal with grown-ups as you mature, and you learn that people can be nasty, often after they smile and speak softly. You get cheated a few times, played. And you learn. Maybe you become an attorney litigating multi-million-dollar case matters. Say what you will about attorneys, but those years — not the years in law school, not the years drafting legal memoranda, but the years of meeting face-to-face and confronting opposing counsel — those years can teach a great deal. They can teach how to transition from sweet, gentle, diplomatic negotiating to tough negotiating. At some point, with enough tough-nosed experience, you figure out Trump’s “The Art of the Deal” yourself.

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Well, it sells. Bigtime.

Russiagate Is Like 9/11, Except It’s Made Of Pure Narrative (CJ)

[..] the current administration has actually been far more aggressive against Russia than the previous administration was, and has worked against Russian interests to a far greater extent. If they wanted to, the international alliance of plutocrats and intelligence/defense agencies could just as easily use their near-total control of the narrative to advance the story that Trump is a dangerous Russia hawk who is imperiling the entire world by inflicting insane escalations against a nuclear superpower. They could elicit the exact same panicked emotional response that they are eliciting right now using the exact same media and the exact same factual situation. They wouldn’t have to change a single thing except where they place their emphasis in telling the story.

The known facts would all remain exactly as they are; all that would have to change is the narrative. Public support for Russiagate depends on the fact that most people don’t recognize how pervasively their day-to-day experience is dominated by narrative. If you are intellectually honest with yourself, you will acknowledge that you think about Russia a lot more now than you did in 2015. Russia hasn’t changed any since 2015; all that has changed is the narrative that is being told about it. And yet now the mass media and a huge chunk of rank-and-file America now view it as a major threat and think about it constantly. All they had to do was talk about Russia constantly in a fearful and urgent way, and now US liberals are convinced that Vladimir Putin is an omnipotent world-dominating supervillain who has infiltrated the highest levels of the US government.

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Juncker to visit Trump next week.

Kudlow: US Expecting Significant Trade Offer From EU Soon (CNBC)

Top White House economic adviser Larry Kudlow said the administration expects a significant trade offer to come from the European Union soon. In an interview at CNBC’s Delivering Alpha conference in New York on Wednesday, Kudlow said a lot of discussions are being held with individual countries. EU President Jean-Claude Juncker is coming to Washington next week, Kudlow said. “We will be in discussions,” he said. “I am told he’s bringing a very important free trade offer.” Kudlow added he couldn’t confirm that.

President Donald Trump has opened trade discussions on numerous fronts, using tariffs on products like steel and aluminum imports and the threat of tariffs on automobiles to get people to the negotiating table. The tariffs have rankled long-time allies in Europe and elsewhere, and tensions elevated after Trump’s visit to the NATO summit last week. That hasn’t deterred progress, however. “I am told through sources, including our ambassadors, that [German Chancellor Angela] Merkel has been working on that, shaking up the EU,” Kudlow said. “The president has put things on the table. The Europeans are looking at them, okay? And we may be pleasantly surprised.”

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“Value”.

Mega Tech’s Trillions Of Market Value In Eye-Popping Perspective (MW)

A picture is worth a thousand words but a pie chart may be more eloquent, especially when it comes to sizing up the giants of the tech industry. Michael Batnick, director of research at Ritholtz Wealth Management, on Wednesday tweeted out a chart that underscored how absolutely dominant tech companies have become in a world where size seems to increasingly matter. Batnick, in his tweet, noted that the top five S&P 500 companies — Apple, Amazon.com, Alphabet Inc., Microsoft and Facebook — combined are worth $4.095 trillion versus $4.092 trillion for the bottom 282 companies.

As mind-boggling as that may be, Batnick told MarketWatch that this sort of concentration is normal, pointing out that AT&T and General Motors represented 14.5% of the S&P 500 during their heyday in 1965. What is different today, however, is that all the big players are uniformly tech names. “The gains have been extraordinary over the past five years, with Facebook, Apple, Amazon, Microsoft and Google growing from $1.2 trillion to near $4 trillion,” wrote Batnick in a recent blog entry.

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At what point do we call it a monopoly?

Amazon Now Accounts For 49% Of US Online Retail (ZH)

Amazon will account for 49.1% of all online retail sales, up from 43% the year before, if they clear an expected $258 billion in sales this year. The stunning figure provided by research firm eMarketer is tempered by the fact that Amazon’s near-majority share of online sales accounts for just 5% of all retail sales. Amazon is set to rake in $258.22 billion in US retail sales in 2018, while annual growth has jumped 29.2% year-over-year, reports Tech Crunch. Fueling Amazon’s rise is a robust network of third-party sellers and a rapidly expanding range of goods from groceries to fashion – made all the more attractive for subscribers of their Prime services.

Now, it is fast approaching a tipping point where more people will be spending money online with Amazon, than with all other retailers — combined. Amazon’s next-closest competitor, eBay, a very, very distant second at 6.6 percent, and Apple in third at 3.9 percent. Walmart, the world’s biggest retailer when counting physical stores, has yet to really hit the right note in e-commerce and comes in behind Apple with 3.7 percent of online sales in the US. -TC

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And more fines coming. But who pays in the end?

EU Commissioner On $5 Billion Fine: Google Has To ‘Stop This Behavior’ (CNBC)

The EU’s commissioner for competition, Margrethe Vestager, said Google has to “stop this behavior” in an interview with CNBC on Wednesday, after a record antitrust fine against the company. “The thing that Google has to do now is of course to stop,” Vestager told “Squawk on the Street.” “This of course will free up the market to allow mobile manufacturers to use other Android systems.” Regulators hit the Alphabet unit with a $5 billion fine for abusing the dominance of its Android mobile operating system – by far the most popular smartphone OS in the world. The EU says Google pushed device makers to bundle Google apps like the Chrome web browser and Gmail, which harms competition. The European Commission, the EU’s executive body, threatened additional fines if Google didn’t put an end to illegal conduct within 90 days.

“They have products that we all like and like to use,” Vestager said. “The only thing we don’t like is when they get to misuse their success and put in place illegal restrictions.” Wednesday’s fine is the largest ever issued to Google, dwarfing even the $2.7 billion penalty from the EU last year for favoring its shopping service over competitors. The company plans to appeal the ruling, according to a statement. The commission is still investigating a third antitrust case against Google’s search advertising service, AdSense. “This is not about Apple, this is not about Android, this is about Google behavior — a behavior that’s illegal for a dominant company because it’s locking down competition and disabling innovation and choice that we would all like to enjoy,” Vestager said.

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Good question. But first more mayhem at home.

How Can We Reverse Brexit When Europe Doesn’t Want Us Back? (Münchau)

What strikes me most about the Brexit discussions in the UK is not the usual Eurosceptic xenophobia, but the lack of understanding of the EU’s position by those who campaign in favour of a Brexit reversal. The leaders of the EU are officially disappointed that Britain is headed for the door; secretly they will be relieved when it goes. In truth, the EU does not really want Brexit to be reversed. Why? Britain has a reputation as an obstreperous “partner” in the institutions, and in the past has sometimes made it harder for Europe to move forward—most notoriously in 2011, when David Cameron used the euro–crisis to try and extract concessions on other things. In the event of a reversal, the Europeans would rightly assume that the ghost of Brexit would never go away.

Ukip would be back in the European Parliament, adding strength to the Salvini and Le Pen factions. Brussels, Berlin and Paris could all do without that. Let’s imagine—and it’s more of a leap than many Remainers acknowledge—that all the legal questions could be swept out of the way. I suppose the EU would ultimately accept a reversal, but without enthusiasm—and with conditions. If a UK prime minister wrote a letter to Donald Tusk, president of the European Council, asking for Brexit to be reversed, he would immediately invoke a special EU summit, in which the other leaders would make at least three demands: the first is an end to the British budget rebate for the next budget period, and perhaps also an end to certain other instances of special treatment, such as on the Charter of Fundamental Rights.

Secondly, the EU would insist that the UK could not block decisions they have taken since the UK announced its intention to leave. The third ask would be for a political commitment by the big political parties not to trigger Brexit again after the next elections. Just let that sink in for a minute. And in any second referendum, the Brexiteers could reasonably argue that the UK was not simply remaining, but doing so on much less advantageous terms. Britain, in other words, would inject a whole new wave of political instability and unpleasantness into its own politics, and those of the continent, if—after all the turmoil—it tried to remain. It would become harder, not easier, for Europe to grapple with the really big challenges it faces with the UK back on board.

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No they haven’t. An unnnamed cources alleges the police say it’s the Russians. And that is presented as news. Because waiting for proof is so last century.

Police ‘Identify’ Skripal Suspects (PA)

Police are believed to have identified the suspected perpetrators of the Novichok attack on Russian former spy Sergei Skripal. Officers think several Russians were involved in the attempted murder of the former double agent and daughter Yulia in Salisbury and are looking for more than one suspect. A source with knowledge of the investigation told the Press Association: “Investigators believe they have identified the suspected perpetrators of the Novichok attack through CCTV and have cross-checked this with records of people who entered the country around that time. They (the investigators) are sure they (the suspects) are Russian.”

The news comes as an inquest is due to open on Thursday for Dawn Sturgess, 44, who died earlier this month, eight days after apparently coming into contact with Novichok from the same batch used in the attempted murder of the Skripals in March. Her partner Charlie Rowley, 45, was left fighting for his life after also being contaminated by the chemical weapon. It is understood Sturgess was exposed to at least 10 times the amount of nerve agent the Skripals came into contact with. Investigators are working to the theory that the substance was in a discarded perfume bottle found by the couple in a park or somewhere in Salisbury city centre and Sturgess sprayed Novichok straight on to her skin, the source said.

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Some rich guy’s hobby.

Cali High Court Orders Proposal To Split Up State Removed From Ballot (R.)

The California Supreme Court on Wednesday ordered the November ballot purged of an initiative that seeks to split California into three states, citing significant questions raised about the proposal’s validity. State election officials certified last month that supporters of the so-called Cal3 measure, also known as Proposition 9, had collected enough signatures to qualify it for the ballot in the country’s most populous state. An environmental group, the Planning and Conservation League, challenged the measure in court, arguing it posed a “revision” of the state constitution – as opposed to an amendment – that is too sweeping to be legally subjected to the direct consent of the voters.

Siding with opponents for the time being, the court directed state election officials to keep the measure off the upcoming November ballot to allow the justices sufficient time to review and decide the merits of the case. The court left open the possibility of allowing the initiative to be put before voters in the future, saying the “potential harm in permitting the measure to remain on the ballot outweighs” the harm of its delay. The initiative was launched by billionaire Silicon Valley venture capitalist Tim Draper, who has argued that California’s size makes it ungovernable. He failed in two previous bids to qualify a six-way split of California for the ballot.

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Nudging.

The Cashless Society Is A Con – And Big Finance Is Behind It (G.)

All over the western world banks are shutting down cash machines and branches. They are trying to push you into using their digital payments and digital banking infrastructure. Just like Google wants everyone to access and navigate the broader internet via its privately controlled search portal, so financial institutions want everyone to access and navigate the broader economy through their systems. Another aim is to cut costs in order to boost profits. Branches require staff. Replacing them with standardised self-service apps allows the senior managers of financial institutions to directly control and monitor interactions with customers. Banks, of course, tell us a different story about why they do this.

I recently got a letter from my bank telling me that they are shutting down local branches because “customers are turning to digital”, and they are thus “responding to changing customer preferences”. I am one of the customers they are referring to, but I never asked them to shut down the branches. There is a feedback loop going on here. In closing down their branches, or withdrawing their cash machines, they make it harder for me to use those services. I am much more likely to “choose” a digital option if the banks deliberately make it harder for me to choose a non-digital option. In behavioural economics this is referred to as “nudging”. If a powerful institution wants to make people choose a certain thing, the best strategy is to make it difficult to choose the alternative.

We can illustrate this with the example of self-checkout tills at supermarkets. The underlying agenda is to replace checkout staff with self-service machines to cut costs. But supermarkets have to convince their customers. They thus initially present self-checkout as a convenient alternative. When some people then use that alternative, the supermarket can cite that as evidence of a change in customer behaviour, which they then use to justify a reduction in checkout employees. This in turn makes it more inconvenient to use the checkout staff, which in turn makes customers more likely to use the machines. They slowly wean you off staff, and “nudge” you towards self-service.

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Looks like a good story. But is it?

The Most Unbelievable Tax Break Ever (F.)

Success Street in North Charleston, South Carolina, might be the most misnamed place in America, a path through a weedy, desolate neighborhood with 20% unemployment and a 40% poverty rate. Its biggest claim to fame strolls past the gritty brick apartment buildings and tumbledown bungalows on a muggy morning in late June: Timothy Scott, a local product who grew up to become the first black Republican U.S. senator in more than three decades. Joining Scott is another success story: the frenetic, peripatetic tech billionaire Sean Parker, who flew in by private jet from Los Angeles’ ritzy Holmby Hills for a personal tour of the senator’s hometown.

“I remember so many kids with amazing potential who died on the vine,” Scott says as he surveys the shuttered Chicora Elementary School, where weeds climb the walls and graying plywood shields shattered windows. “The frustration, irritation and low expectations were so pervasive here that I always wanted to make a difference.” He now may get his chance. Today’s visit is less a grim walk down memory lane than a legislative victory lap for Scott and Parker. The unlikely pair are core members of an even more unlikely group of conservatives and liberals, capitalists and philanthropists, U.S. lawmakers and small-town mayors who have successfully created one of the greatest tax-avoidance opportunities in American history, in the service of underperforming American cities and neighborhoods.

For all the focus on drastic tax-rate cuts, the fate of the state and local tax deduction and the exploding federal deficits, it’s the least-known part of last year’s tax-cut law that could be the most consequential. Officially called the Investing in Opportunity Act, it promises to pump a massive amount of cash into America’s most impoverished communities by offering wealthy investors and corporations a chance to erase their tax obligations. [..] The heart of this new law: Opportunity Zones, or “O-zones,” low-income areas designated by each state. Investors will soon be able to plow recently realized capital gains into projects or companies based there, slowly erase the tax obligations on a portion of those gains and, more significantly, have those proceeds grow tax-free. There are almost no limits.

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Aug 172017
 
 August 17, 2017  Posted by at 9:02 am Finance Tagged with: , , , , , , ,  2 Responses »


Laura Gilpin The Rio Grande 1947

 

The ‘Wall Of Worry’ That Stocks Have Climbed To Rally 271% Since 2009 (MW)
Global Negative-Yielding Debt Surges To Highest Since October (ZH)
The Fed Is Asking Questions, Not Providing Answers (BBG)
Fed Starts to Wonder If Cornerstone Inflation Model Still Works (BBG)
Goldman Sachs Is Infiltrating The Fed In Ways Most People Haven’t Noticed (BI)
Chinese Takeovers Of US Companies Plummet This Year (CNBC)
The World’s Most Ridiculous Constitutional Crisis (BBG)
Hell Hath No Fury Like An Australian Retiree Scorned (BBG)
Americans Are Rapidly Descending Into Madness (Krieger)
A Primer On Bitcoin: The Ultimate Fiat Currency (Lebowitz)
Spain Rescues 600 Migrants, Refugees In Busiest Day as 120 Drown (BBC)

 

 

Stocks have been disconnected from reality. But that can’t last.

The ‘Wall Of Worry’ That Stocks Have Climbed To Rally 271% Since 2009 (MW)

This may be the most sedated stock-market rally of our times. Even as tensions heightened between the U.S. and North Korea and violence broke out on the streets of Charlottesville, Va., stocks took the alarming news in stride, continuing to scale the “wall of worry” in defiance of doomsday predictions of an imminent selloff. “It seems like every day the headlines outside of the market get more and more frightening,” said Michael Batnick, director of research at Ritholtz Wealth Management, who illustrated the resilience of the market in the chart below. As the graph shows, since stocks bottomed in March 2009, the S&P 500 index has soared 271% to multiple records, meandering higher through the European debt crisis, Brexit, and the U.S. presidential election.

Batnick had originally published the chart in March but updated it Wednesday given the recent developments. “This year has been the perfect reminder that political volatility does not necessarily translate into the stock market, with this being the quietest year since 1965,” he said. The S&P 500’s daily trading range averaged 0.32% in the first half of the year, the narrowest in over half a century, underscoring the gap between market volatility and the political upheaval that has marked Trump’s presidency so far, according to Batnick.

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We can all figure what could happen if you throw $20 trillion or so into non-functional markets. Can we figure what happens when they start to function again?

Global Negative-Yielding Debt Surges To Highest Since October (ZH)

The market value of bonds yielding less than zero percent has jumped by a quarter over the past month to $8.68 trillion, the highest since October… which is odd given the mainstream narrative that everything is awesome and global growth is heading for escape velocity?

“probably nothing”

As Bloomberg notes, slower-than-forecast inflation data and haven demand on geopolitical risk have revived bond bulls around the world. With global borrowing costs already so low, central banks should be prepared to cut interest rates deep into negative territory in the next economic downturn, warn economists including Harvard professor Kenneth Rogoff.

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Oh well, it’ summer after all.

The Fed Is Asking Questions, Not Providing Answers (BBG)

The Federal Reserve is either lucky or clever. By signaling that it won’t touch interest rates again until December, it’s bought itself time to have a longer – and much needed – conversation about inflation. Good. There are very legitimate doubts that traditional models explain what’s happening or, rather, what’s not happening. Minutes of the Federal Open Market Committee’s July meeting show a growing debate about inflation and why it’s retreating, instead of advancing, in the face of 4.3% unemployment. The central bank is puzzled that prices have been soft for several months. In the absence of any real inflation pressure, the Fed might be reasonably expected to take a break from raising rates while it got a handle on what’s happening. By acting in March and June and hinting that September will be about balance sheet reduction, the Fed gave itself some wiggle room.

Policy makers basically have until December to either see inflation head back toward their 2% target or figure out how to respond if it doesn’t behave. There’s a meeting scheduled for late October, but the Fed’s historical aversion to moving in the absence of new forecasts and a press conference effectively rules out a surprise then. Delaying until December gives officials at least four more months of inflation data. Most still see it returning to its target, in keeping with traditional economic models. And to be fair, as I have written, this isn’t exclusively an American phenomenon. Inflation is weak in Europe and Japan despite a pronounced pickup in growth. (It’s above target in the U.K.; Brexit complicates that particular picture.) But the U.S. is still the world’s largest economy, and the Fed is still the world’s de facto central bank.

The country’s financial markets dwarf others despite frequent predictions of decline. How this inflation mystery ends will matter greatly. What if the book doesn’t have an end? The minutes show some self-doubt starting to creep in alongside the confidence of the majority: Most participants indicated that they expected inflation to pick up over the next couple of years from its current low level and to stabilize around the Committee’s 2% objective over the medium term. Many participants, however, saw some likelihood that inflation might remain below 2% for longer than they currently expected, and several indicated that the risks to the inflation outlook could be tilted to the downside. The account of the July conclave even suggested some heretical questioning of the link between very low unemployment and wages and inflation. The majority are still wedded to the traditional models.

Until we start to see a convincing swing back to the Fed’s target of 2%, we will probably see more of this public questioning of assumptions. Something less contentious was skepticism about the prospects for large-scale fiscal stimulus, the domain of Congress and the White House. A few participants at the Fed meeting doubted it would happen and, if it did, they suspected the boost would be less than might have once been anticipated. That observation went unchallenged. Stay tuned for the last day of August. That’s when the Commerce Department publishes closely watched inflation figures. Enjoy the debate.

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Over 1000 utterly useless PhD economists work for the Fed. The world doesn’t behave like my models do!

Fed Starts to Wonder If Cornerstone Inflation Model Still Works (BBG)

Federal Reserve officials are looking under the hood of their most basic inflation models and starting to ask if something is wrong. Minutes from the July 25-26 Federal Open Market Committee meeting showed a revealing debate over why the economy isn’t producing more inflation in a time of easy financial conditions, tight labor markets and solid economic growth. The central bank has missed its 2% price goal for most of the past five years. Still, a majority of FOMC participants favor further rate increases. The July minutes showed an intensifying debate over whether that is the right policy response. “These minutes to me were troubling,” said Ward McCarthy, chief financial economist at Jefferies in New York. “They don’t have their confidence in their policy decisions; and they don’t have confidence that they can provide the right kind of guidance.”

The FOMC tried hard to avoid that kind of message. In several passages, the minutes asserted that “most” officials were sticking with a forecast that higher inflation would eventually show up. However, the debate over resource slack models and whether standard data sources were telling them the whole story also showed convictions about their forecast are fraying. Price indexes have shown unusual inertia even as the U.S. unemployment rate has fallen, matching a 16-year low of 4.3% in July. The U.S. consumer price index rose 1.7% for the 12 months ending July, while the Fed’s preferred measure, which is tied to consumption, rose 1.4% in June. Another gauge calculated by the Dallas Fed, which trims index outliers to highlight the underlying price trend, rose 1.7% for the 12 months ending June.

That was the same as May, which was down from 1.74% in April. The minutes said “a few” officials described resource slack models as “not particularly useful” while “most” thought the framework was valid. The committee also pondered a number of theories as to why inflation wasn’t responding to tightening labor resources, such as “the possibility that slack may be better measured by labor market indicators other than unemployment.” “It is a battle between data and theory,” said Ethan Harris, head of global economic research at Bank of America in New York.

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A silent coup.

Goldman Sachs Is Infiltrating The Fed In Ways Most People Haven’t Noticed (BI)

Since when do underlings get to chime in on who their next boss should be? That’s just what William Dudley, president of the Federal Reserve Bank of New York, did in an interview with AP this week. His fairly strong recommendation of Gary Cohn, Donald Trump’s economic advisor and apparent favorite, was especially egregious since Cohn is former president at Goldman Sachs, where Dudley essentially spent most of his career as chief economist and partner. The Fed’s chairperson is appointed by the president of the United States. Dudley should stick to monetary policy and regulating big banks. As a matter of central bank independence and integrity, he has no business opining on future candidates.

As Bloomberg’s veteran Fed watcher, Rich Miller, put it: “It’s rare for Fed officials like Dudley to comment publicly on such personnel matters because they usually want to avoid doing anything that might be seen as undermining the central bank’s political independence.” “AP: On a personal level, Gary Cohn has been mentioned as potentially a Fed Chair if Yellen were not to be reappointed or declined. Did you work with Gary Cohn at Goldman Sachs? What is your impression of him as a potential Federal Reserve Chair? DUDLEY: I don’t want to evaluate the various candidates for the Federal Reserve, except to say that I think Gary is a reasonable candidate. He knows a lot about financial markets. He knows lots about the financial system. I don’t think you have to have a PhD in Economics, which I have, to be a Chair of the Fed or Governor or a President of one of the Federal Reserve Banks. I think it’s important to have a committee that has diversity. That has different backgrounds and perspectives. So I think Gary’s a reasonable candidate.

[..] Despite the clear conflict, he apparently sees nothing wrong with recommending Cohn while saying nothing to praise his current boss, Fed Chair Janet Yellen, who is also supposedly in the running for reappointment (but not really, it’s just another Trump reality TV suspense stunt). Dudley then coyly declines to discuss other names being floated for the post. Dudley has crossed a line, although it’s not a new one for his institution. The New York Fed was home to one of the financial crises most blatant conflicts of interest, and it’s all related to how Dudley was hired to head it in the first place.

This is what happened: Stephen Friedman was chairman of the New York Fed at the height of the crisis — but at the same time he was a member of Goldman Sachs’ board of directors. He also held a significant financial stake in the megabank, even as he was involved in the bank bailout negotiations. Yes, really (The New York Fed is supposed to play a pivotal role in regulating Wall Street). And here’s the kicker: The Fed’s board granted Friedman a waiver to buy Goldman stock just as prices had hit bottom and the central bank was stepping in to make all the banks, including Goldman, whole on their misguided bets on housing and related assets. Friedman was eventually pressured to step down, but that’s about it. In his role as NY Fed board chair, Friedman got to pick its next president. Who did he run with? Bill Dudley.

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it’s about foreign reserves.

Chinese Takeovers Of US Companies Plummet This Year (CNBC)

As the Trump administration looks to take a tougher stance against Beijing, Chinese investments in the U.S. have more than halved this year, according to Dealogic. “Amid growing regulatory scrutiny of China outbound M&A targeting the U.S., volume has seen a 65% year-on-year decline in 2017 year-to-date,” Nicholas Farfan and Karl But of Dealogic Research said in an Aug. 8 note. “In comparison, such deals peaked at $65.2 billion last year, with high-profile deals including HNA’s acquisition of 25% of Hilton Worldwide.” “With tightening restrictions, Chinese buyers may look to stop pursuing or shelve potential acquisitions in the U.S.,” the note said. The pressure and uncertainty are coming from both countries. On Beijing’s side, authorities are reportedly targeting some of the largest Chinese dealmakers to try to keep capital from fleeing the country and contributing to yuan weakness.

On the American side, reports indicate the Committee on Foreign Investment in the United States is looking to use national security concerns to prevent more Chinese purchases of U.S. firms, especially in technology. Anecdotally, Gregory Husisian, chair of the export controls and national security group at law firm Foley & Lardner, noted that an increasing number of clients are concerned about working with Chinese buyers due to the potential for regulatory intervention. The dealmaking industry could also suffer some significant business setbacks. The Dealogic analysts estimate about $9.7 billion in pending Chinese deals to buy U.S. firms could fall under regulatory scrutiny, potentially putting $75 million in advisor fees at risk.

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Baffling. They really don’t seem to know their own laws. Which might be a problem if you’re in government?!

The World’s Most Ridiculous Constitutional Crisis (BBG)

Australia’s parliament is in the grip of the world’s most ridiculous constitutional crisis. The situation threatens the country’s democratic process, which is reason enough for politicians and courts to work to unpick it. More importantly, though, it raises questions the rest of the world would do well to ponder. Over the past month, five members of Australia’s 226-member parliament have admitted that they may have unwittingly held dual citizenship – a condition that, under Australia’s 1900 constitution, disqualifies them from political office in Canberra. The latest blow on Monday ensnared Deputy Prime Minister Barnaby Joyce, putting into jeopardy the government’s one-seat majority in the governing House of Representatives. Joyce’s father was born in New Zealand in 1924. As a result, Kiwis officially consider him one of their own.

Journalists and political staffers have launched a hunt to see who will fall next. The country’s justice minister Michael Keenan took to social media Thursday to confirm he renounced his British citizenship 13 years ago, after the Sydney Morning Herald reported that he may have been a dual citizen. In total, 13 senators and 11 House members were born overseas, equivalent to about 17% and 7.3% of the respective chambers. More may be caught, like Joyce, as a result of their parentage. With both chambers finely-balanced between parties – and renouncing foreign citizenship, in many cases, a long and complex process – the crisis could hamstring the government’s ability to pass legislation. Australia has one of highest proportions of foreign-born residents among democratic countries. Nearly half of permanent residents are first- or second-generation migrants, with about 28% born overseas and 21% having at least one foreign-born parent.

About 4.6% were, like me, born in the U.K.; another 2.6% in China, Hong Kong and Macau, plus 2.2% from New Zealand and 1.9% from India. More than 27% of the population speaks a language other than English at home. That’s a vast population whose ability to serve in parliament is potentially restricted. There are so many different regulations around the world that it’s not always obvious to individuals which countries might claim them as citizens. Larissa Waters, a Greens senator who was born in Winnipeg but has lived in Australia since infancy, quit last month after discovering that a Canadian law that entered into force when she was seven days old meant Canada still considered her a citizen. A week later, Australia’s then-Resources Minister Matthew Canavan was caught out after discovering his mother had once sought Italian citizenship for herself and for him. “Until last week I had no suspicion I could be an Italian citizen,” he wrote on Twitter. “I was not born in Italy and have never been to Italy.”

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Your pension has left the building. Those are its foorprints over there.

Hell Hath No Fury Like An Australian Retiree Scorned (BBG)

Hell hath no fury like an Australian retiree scorned.Shares in the country’s giant phone company Telstra fell as much as 12% after it announced annual results Thursday, wiping off some A$6.2 billion ($4.9 billion) of value. The reason for this massive hissy fit was a cut to Telstra’s historically lavish dividend policy. Investors who’ve been scraping by on payouts equivalent to about 100% of underlying earnings will in future have to subsist on a mere 70% to 90%. Why should Telstra shareholders be so sensitive about dividends, especially as net income came in ahead of analyst estimates at A$3.89 billion? The answer lies in the nature of Australia’s equity market, and in particular the 1.1 million retirees managing their own investments via self-managed superannuation funds.

Helped by years of tax breaks and laws mandating that companies fund their employees’ retirement savings, Australia’s gray army has built up a A$648 billion piggy bank. The A$340 billion they have in equities and investment funds is equivalent to a fifth of the benchmark S&P/ASX 200 index, and their might is such that some analysts, such as Credit Suisse’s Hasan Tevfik, argue they’ve distorted the investment priorities of the wider market. Retirees’ love of a household-name stock that provides a steady income without the fuss of buying or selling helps explain the Australian share market’s obsession with dividend yield. There’s certainly something unusual in the water: Of the 42 companies in developed markets with dividend yields above 5% and market capitalizations above $10 billion, 11 are Australian, according to data compiled by Bloomberg.

In some ways, this trend is a favorable one. Australia’s big four retail banks and Macquarie, which all meet the key criteria of familiarity and generous payouts, trade on some of the highest price-book multiples in the world. As a result, when they want to raise equity capital – as they all did in 2015, to the tune of an aggregate A$18.5 billion – it works out rather cheap. Still, Telstra’s experience is a lesson that playing footsie on dividends can be a dance with the devil. Its desire to hold back just a thin slice of earnings alongside a 70% to 90% payout ratio would be considered reasonable in most markets. Chinese companies are notoriously stingy, as Gadfly’s Shuli Ren wrote this week. Among major equity indexes, only the U.K. boasts ratios on a par with Australia’s; the Shanghai Composite rarely turns more than a third of earnings into dividends.

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No kidding. Conversation is impossible just when it’s most needed.

Americans Are Rapidly Descending Into Madness (Krieger)

I don’t live in an echo chamber, partly because there aren’t enough people out there who think like me, but also because I constantly and intentionally attempt to challenge my worldview by reading stuff from all over the political map. I ingest as much as I can from a wide variety of intelligent sources, picking and choosing what makes sense to me, and then synthesizing it the best I can. Though I’m certainly grounded in certain key principles, my perspective on specific issues remains malleable as I take in additional information and perspectives. I try to accept and acknowledge my own ignorance and view life as a journey of constant mental, emotionally and spiritual growth. If I’m not growing my capacity in all of those realms until the day I die, I’m doing it wrong. Life should be seen as a battle against one’s own ignorance, as opposed to an obsession with the ignorance of others.

You can’t legislate morality, nor can you legislate wisdom. The only way the world will improve on a long-term sustainable basis is if more of us get wise. That’s a personal journey and it’s our individual duty to accept it. While I’m only in control of my own behavior, this doesn’t mean that the behavior of others is irrelevant to my life. Unfortunately, what I see happening to the population of America right now seems very troublesome and foreboding. What I’m witnessing across the board is hordes of people increasingly separating themselves into weird, unthinking cults. Something appears to have snapped in our collective consciousness, and many individuals I used to respect (on both sides of the political spectrum) are becoming disturbingly polarized and hysterical. People are rapidly morphing into radicalized mental patients.

What’s worse, this environment is providing a backdrop for the most destructive people of my lifetime – neoconservatives and neo liberals – to preen around on corporate media as “the voices of reason.” This is one of the most perverse and dangerous side-effects of the current political climate. If in your disgust with Trump, you’re willing to run into the cold embrace of these destroyers of the middle class and the Middle East, you’ll get what you deserve. In contrast, if we really want to deal with our very real and very systemic problems, the last thing we need is a population-level mental breakdown that leads to a longing for the criminally destructive political status quo, yet that’s exactly what seems to be happening.

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Every single Bitcoin transaction uses as much energy as 15 UK households do daily. Whatever you think about crypto, that is a problem no matter what.

A Primer On Bitcoin: The Ultimate Fiat Currency (Lebowitz)

Cryptocurrency is an independent, digital currency that uses cryptology to maintain privacy of transactions and control the creation of the respective currency. While not recognized as legal tender, cryptocurrencies are becoming more popular for legal and illegal transactions alike. Bitcoin (BTC), developed in 2009, is the most popular of the cryptocurrencies. It accounts for over half the value of the more than 750 cryptocurrencies outstanding. In this article we refer to cryptocurrencies generally as BTC, but keep in mind there are differences among the many offerings. Also consider that, while BTC may appear to be the currency of choice, Netscape and AOL shareholders can tell you that early market leadership does not always translate into future market dominance.

Before explaining how BTC is created, acquired, stored, used and valued, it is vital to understand blockchain technology, the innovation that spawned BTC. [..] Blockchain is an open database or book of records that can store any kind of data. A blockchain database, unlike all other databases, is stored real time and is accessible for anyone to view its complete history of data. The term block refers to a grouping of transactions, while chain refers to the linkages of the blocks. When a BTC transaction is completed BTC “miners” work to solve the cryptology algorithm that will enable them to link it to the chain of historical transactions. As a reward for being the first to solve the calculation, the miner receives “newly minted” BTC. As the chain grows, the effort needed to solve and verify the algorithms increase in complexity and demand greater computing power. As an aside consider the following statement by Bitcoin Watch (courtesy Goldman Sachs):

“BTC worldwide computational output is currently over 350 exaflops – 350,000 petaflops – or more than 1400 times the combined capacity of the top 500 supercomputers in the world.”

Needless to say, a tremendous amount of computing resources and energy are being used by BTC miners, and it is still in its infancy. Could these resources be better employed in other industries, and if so, how much productivity growth is BTC leeching from the economy? The takeaway is that blockchain is an open, real-time database that provides anonymity to its users. It is not controlled or regulated (yet) by any government. BTC miners, driven by the incentive to earn BTC, and fees at times, verify and authenticate the database. Blockchain technology is incredibly powerful and will likely revolutionize data management regardless of whether cryptocurrencies thrive or disappear.

New Bitcoins are created as payment to BTC miners that solve the aforementioned calculations that verify transaction data and link it to the blockchain. This ingenious reward system incentivizes miners to compete to perform these calculations, enabling the blockchain to exist. Currently there are approximately 16 million bitcoins outstanding out of a proposed limit of 21 million. As the blockchain grows, the calculations required to mine BTC and add to the chain become more complex, making each bitcoin harder and more costly to earn than the prior one.

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The value of life, all life. must trump all else. Or else.

Spain Rescues 600 Migrants, Refugees In Busiest Day as 120 Drown (BBC)

Spain’s coastguard says it has rescued 600 migrants crossing from Morocco in a 24-hour period amid a spike in the number of migrant arrivals. The rescued migrants were in 15 vessels including toy paddleboats and a jet ski and included 35 children and a baby. The UN says more than 9,000 people have arrived in Spain so far this year – three times as many as the previous year. More than 120 people are believed to have drowned attempting the crossing. The increase in crossings means Spain could overtake Greece this year in the number of migrants arriving by sea, the UN’s International Organization for Migration (IOM) said earlier this month.

Most are sailing across the 12km (seven-mile) Strait of Gibraltar and many are choosing cheap, child-sized paddle boats without motors that allow them to bypass people smuggling networks and their fees. Some migrants are using social media to contact the Spanish authorities and inform them of their location once they are in territorial waters, the BBC’s Gavin Lee in the Spanish city of Tarifa says. However, a much larger number – nearly 100,000 – have crossed from Libya to Italy since the start of the year. The IOM says 2,242 people have died on that route. In June, about 5,000 people were rescued in one day in the Mediterranean off Libya, Italian coastguards said.

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Jul 222017
 
 July 22, 2017  Posted by at 8:34 am Finance Tagged with: , , , , , , , , , , ,  Comments Off on Debt Rattle July 22 2017


Jackson Pollock Pasiphae 1943

 

House of Cards (Paul Craig Roberts)
Deeply Flawed Western Economic Models Undermine Worst Recovery In History (CNBC)
Short Sellers Give Up as Stocks Run to New Records (WSJ)
Greed Is No Longer Good – Bond Boom Comes To An End (G.)
The Media’s War On Trump Is Destined To Fail. Why Can’t It See That? (Frank)
Goldman Sachs Boss Urges Long Brexit Transition. Is Anyone Listening? (Ind.)
US To Drop Criminal Charges In ‘London Whale’ Case (R.)
A Third Of Greeks At Risk Of Poverty As Athens Wants Return To Bond Market
No Surprises From IMF Report On Greek Debt (K.)
The Kingdom Whose Name We Dare Not Speak At All (Robert Fisk)
EPA Will Allow Fracking Waste Dumping in the Gulf of Mexico (TO)
German Carmakers Colluded On Diesel Emissions For Decades (Qz)
Number Of Homeless Children In Temporary Accommodation in UK Rises 37% (G.)
Sicilian Mayor Moves To Block Far-Right Plan To Disrupt Migrant Rescues (G.)
All Hell Breaks Loose As The Tundra Thaws (G.)

 

 

PCR short and to the point. And don’t you ever forget it.

House of Cards (Paul Craig Roberts)

Despite unrealistic plots and weak characterization (except for Francis Urquhart), Michael Dobbs’ books, House of Cards, Play the King, and The Final Cut were best sellers that provided the basis for a long-running TV series. I haven’t seen the films, but I have read the books. I conclude that plot and characters are mere props for the didactic lesson of the novels: Democratic politics is concerned only with power and sex. Nothing else is in the picture. There is no such thing as a politician concerned with the people’s well being or capable of marital fidelity.

The media are as bad as the politicians. Female journalists use their bodies for access to power and become accomplices in political intrigues. Idealism is merely another vehicle used in the competition for power. I suspect the novels and TV series were popular because they expose politics for what it is. Politics serves only personal ambition. This is a lesson that liberals and progressives, who present government as a public-spirited alternative to private greed, need to learn. In showing politics in service to personal ambition, Dobbs is a master of truth despite his shortcoming as a novelist.

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Yeah, the future of the world depends on the definition of “tight”. Do you buy it?

Deeply Flawed Western Economic Models Undermine Worst Recovery In History (CNBC)

The Western economic system is deeply flawed with countries such as the U.S. and Britain contributing to the lowest quality economic recovery the world has ever seen, Chris Watling, chief executive of Longview Economics, told CNBC on Friday. “The economic model is deeply flawed and the system in the west is deeply flawed, particularly in the English speaking part of the world and it needs to change,” Watling said. “I think this is undoubtedly the lowest quality economic recovery we have seen globally… full stop,” he added. The Longview Economics CEO explained that a debt-laden global economy could be vulnerable to looming interest rate hikes. The Federal Reserve is on a course to gradually increase interest rates, with financial markets expecting it to approve one more rate hike this year.

In addition, other central banks are pulling the reins on bond-buying and other liquidity programs aimed at injecting cash into their respective economies. “This is a world that is more indebted than it was before the global financial crisis in 2007, there’s no productivity growth, asset prices are very elevated, a lot of debt that corporates have built up has gone to share buy backs (and) the number of ‘zombie companies’ has doubled since 2007,” Longview Economics’ CEO explained. In the U.S. alone, households have $14.9 trillion in debt while businesses owe $13.7 trillion, according to the Federal Reserve.

Bond guru Bill Gross also warned that the course of global central banks toward tightening policy could be detrimental for the economic recovery. He argued that raising interest rates would increase the cost of short-term debt that corporations and individuals currently hold. When asked whether an imperfect system constituted a clear and present danger for the financial markets, Watling replied, “Whatever you want to call it doesn’t really matter but these sorts of things always unwind when you tighten money. The problem is judging what is tight? And that is sort of the million dollar question.”

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What are shorts worth in a world without price discovery? Shorts are there to chase off zombies. But central banks keep them alive.

Short Sellers Give Up as Stocks Run to New Records (WSJ)

Times are tough for skeptics of the bull market. Flummoxed by the endurance of a 2017 rally that produced its 27th S&P 500 record this week, investors are backing off bets that major indexes are headed downward. Bets against the SPDR S&P 500 exchange-traded fund, the largest ETF tracking the broad index, fell to $38.9 billion last week, the lowest level of short interest since May 2013, and remained near those levels this week, according to financial-analytics firm S3 Partners. Short sellers borrow shares and sell them, expecting to repurchase them at lower prices and collect the difference as profit. Bearish investors say they are scaling back on these bets not because their view of the market has fundamentally changed, but because it is difficult to stick to a money-losing strategy when it seems stocks can only go up.

They believe the market moves are at odds with an economy that remains lukewarm as it enters its ninth year of growth, stock valuations that are historically high and a delay of business-friendly policies in Washington like tax cuts and infrastructure spending. “There seems to be an overall view that people are invincible, that things will always go up, that there are no risks and no matter what goes on, no matter what foolishness is in play, people don’t care,” said Marc Cohodes, whose hedge fund focused on shorting stocks closed in 2008. Mr. Cohodes is now a chicken farmer based in California who is looking to get into goat herding in Canada. He shorts a handful of individual stocks personally, but isn’t focused on the broader market.

[..] The practice of shorting companies is also going by the wayside as stocks continue to notch records. Short-biased hedge funds had $4.3 billion in assets at the end of March, down from $7.1 billion at the end of 2013, according to HFR Inc. The difficulty for stock-market bears stems from a Goldilocks-like market environment, in which the economy is expanding fast enough to support corporate earnings, but slow enough for the Federal Reserve to keep rates relatively low. Years of low rates and easy-money policies have boosted stocks, defying forecasts for a steep, prolonged downturn. “The shorts have been frustrated now for quite a while,” said Scott Minerd, global chief investment officer at Guggenheim Partners, which has $260 billion in assets under management. The scenarios that might lead to a payout for market bears—an economic recession or a sharp rise in interest rates—don’t seem imminent, either, Mr. Minerd added.

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Sure, I believe you.

Greed Is No Longer Good – Bond Boom Comes To An End (G.)

City bond traders have put the champagne on ice. They had a good run. For some it lasted almost a year. But it’s over now and the “new normal” of low trading volumes and weak profits is reasserting itself. On Wall Street, Goldman Sachs took the biggest hit. This week the firm reported profits had plunged 40% in the second quarter on its bond, currency and commodities trading desks. All the other big names in the US investment banking world saw bond trading profits dive in the three months to the end of June, save for age-old Goldman rival Morgan Stanley, which restricted the loss to 4%. Lloyd Blankfein, the Goldman boss who rose through the ranks of bond traders to the top job, was unlikely to be sanguine about the turn of events amid concerns that his bank suffered more than most for relying on out-of-favour hedge funds as clients.

Back in October 2016 the story was very different. Barclays was on a high after what it said was a summer bonanza for its bond traders, pushing quarterly profits to a two-year high. Likewise Goldman, Deutsche Bank, Bank of America and JPMorgan were raking in the trades. Much of the reason for their optimism was a change of stance at the Federal Reserve. The US central bank signalled in late 2015 that the post-crash era of low inflation and low interest rates was coming to an end. To combat the threat of inflation, it would start to raise rates consistently through 2016 and 2017. This move put two trends in motion that spelled a big payday for the banks. First, the price of bonds started to fall, making them more attractive to buy. Second, not long afterwards, it became clear the other central banks were not going to follow suit in raising rates.

That broke seven years of agreement among the major central banks to hold interest rates at near zero as a way to boost economic activity. The Bank of England, the European Central Bank and the Bank of Japan were still on board, but Janet Yellen at the Fed had broken away. Without a consistent story, investors in fixed-income securities, the jargon name for bonds, found themselves needing to back several horses. And investors demanded the banks buy and sell their securities more frequently as uncertainty translated into an ever-changing mood in the market. The main measure of volatility – the Vix index – was still well below the 2009 peak, but it was elevated in 2016. And traders make money in periods when uncertainty and confusion raise levels of volatility.

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Thomas Frank (re-)writes my article from a few weeks ago, Feeding Frenzy in the Echo Chamber.

The Media’s War On Trump Is Destined To Fail. Why Can’t It See That? (Frank)

These are the worst of times for the American news media, but they are also the best. The newspaper industry as a whole has been dying slowly for years, as the pathetic tale of the once-mighty Chicago Tribune reminds us. But for the handful of well funded journalistic enterprises that survive, the Trump era is turning out to be a “golden age” – a time of high purpose and moral vindication. The people of the respectable east coast press loathe the president with an amazing unanimity. They are obsessed with documenting his bad taste, with finding faults in his stupid tweets, with nailing him and his associates for this Russian scandal and that one. They outwit the simple-minded billionaire. They find the devastating scoops. The op-ed pages come to resemble Democratic fundraising pitches. The news sections are all Trump all the time. They have gone ballistic so many times the public now yawns when it sees their rockets lifting off.

A recent Alternet article I read was composed of nothing but mean quotes about Trump, some of them literary and high-flown, some of them low-down and cruel, most of them drawn from the mainstream media and all of them hilarious. As I write this, four of the five most-read stories on the Washington Post website are about Trump; indeed (if memory serves), he has dominated this particular metric for at least a year. And why not? Trump certainly has it coming. He is obviously incompetent, innocent of the most basic knowledge about how government functions. His views are repugnant. His advisers are fools. He appears to be dallying with obviously dangerous forces. And thanks to the wipeout of the Democratic party, there is no really powerful institutional check on the president’s power, which means that the press must step up.

But there’s something wrong with it all. The news media’s alarms about Trump have been shrieking at high C for more than a year. It was in January of 2016 that the Huffington Post began appending a denunciation of Trump as a “serial liar, rampant xenophobe, racist, birther and bully” to every single story about the man. It was last August that the New York Times published an essay approving of the profession’s collective understanding of Trump as a political mutation – an unacceptable deviation from the two-party norm – that journalists must cleanse from the political mainstream. It hasn’t worked. They correct and denounce; they cluck and deride and Trump seems to bask in it. He reflects this incredible outpouring of disapprobation right back at the press itself.

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Contemplating the horrors of bankers leaving your society.

Goldman Sachs Boss Urges Long Brexit Transition. Is Anyone Listening? (Ind.)

I’ve no fondness for wealthy bankers, but that doesn’t mean to say they aren’t sometimes right. An example of that is Goldman Sachs International chief executive Richard Gnodde, who has just entered the Brexit debate to urge a “significant” transition period. Mr Gnodde is currently pouring money down a bottomless pit labelled “Brexit Contingency Plans”. There aren’t many Britons who will feel all that much sympathy for him over that. That money pit will mean less is available for the bonuses he and his colleagues are so fond of. So tough luck. Trouble is, his masters in New York won’t see it that way. They will eventually say that’s enough of that, start moving your people over to Frankfurt. Actually, the process has already begun. Some jobs are moving over to Germany.

Still more are simply staying in New York, which, for all the scrambling being done by Frankfurt, and Paris, and Dublin, has quietly become the biggest winner from this whole sorry affair. There are many who would shrug some more. What do we lose by inconveniencing a few thousand wealthy bankers anyway. They don’t exactly contribute much to society. Well, they pay a lot of tax for starters. It’s also true that they should pay more. But that’s just another debate. Despite that, I have for years argued that London’s financial centre has played too central a role in the nation’s economy, and that it would be a good idea for the Government to pursue a more balanced economic approach rather than coddling it (as it did until recently).

The trouble is it is now happening at a dangerously fast pace and it is impossible to see, as things stand, quite what is going to replace those tax revenues, which contribute to things like the NHS, schools, roads without potholes, and any number of other things. There are also a lot of support staff who work for banks like Goldman in the City. They’re not rich, by any means, and they’re unlikely to be able to move like the bankers so they’ll just lose their jobs. If it’s unpalatable hearing about this from Mr Gnodde – as it will be to an awful lot of people – consider also that the CBI has said much the same thing as have most sensible, and even semi-sensible, businesses both in the square mile of the City of London and beyond.

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Everyone walks. Yawn.

US To Drop Criminal Charges In ‘London Whale’ Case (R.)

U.S. prosecutors have decided to drop criminal charges against two former JPMorgan Chase derivatives traders implicated in the “London Whale” trading scandal that caused $6.2 billion of losses in 2012. In seeking the dismissal of charges against Javier Martin-Artajo and Julien Grout, the Department of Justice said it “no longer believes that it can rely on the testimony” of Bruno Iksil, a cooperating witness who had been dubbed the London Whale, based on recent statements he made that hurt the case. Prosecutors also said efforts to extradite Martin-Artajo and Grout, respectively citizens of Spain and France, to face the charges have been “unsuccessful or deemed futile.” Acting U.S. Attorney Joon Kim in Manhattan asked a federal judge for permission to drop charges that included securities fraud, wire fraud and falsifying records. Martin-Artajo and Grout were indicted in September 2013.

“After four long years of protracted litigation, we are very pleased that the government has decided to do the right thing, and dismiss the criminal case,” Grout’s lawyer, Edward Little, said. The dismissal request marks a fresh setback in U.S. efforts to prosecute individuals for financial crimes. This has included the undoing of several insider trading convictions and pleas that had been won by Kim’s predecessor Preet Bharara. It has also included this week’s overturning of the convictions of two former Rabobank NA traders for rigging the Libor interest rate benchmark. Martin-Artajo and Grout were accused of hiding hundreds of millions of dollars of losses within JPMorgan’s chief investment office (CIO) in London by marking positions in a credit derivatives portfolio at inflated prices.

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At risk of, you said? Weird that if you let investors and analysts discuss this, turns out they have no idea what’s really going on. But doesn’t that cluelessness hurt their investments. their clients?

A Third Of Greeks At Risk Of Poverty As Athens Wants Return To Bond Market

The Greek government might be preparing to return to the bond market but there are many structural problems that have yet to be resolved to make the economy more sustainable, an analyst told CNBC on Friday. Greece is currently on a third financial program since 2010, due to expire next year. According to James Athey, fixed income investment manager at Aberdeen Asset Management, despite the reforms implemented until now, “it still doesn’t seem we are particularly far down the road in solving the structural issues of Greece.” “Until the Greek economy has got a business model which works and it’s productive and it’s creating stable, secure growth that it’s not reliant on debt relief, external support and constantly bailouts from the Europeans, then it’s difficult to believe that the path is towards something more healthy rather than something less healthy,” Athey told CNBC on Friday.

The IMF agreed Thursday to make a loan of $1.8 billion to Greece as part of its current bailout program, but warned that the country will have to continue reforming in order to receive that money. Greece has to continue focusing on reducing the level of bad loans in its financial sector and extend labour market reform to liberalize Sunday trade and allow for collective dismissals, the fund said. However, with the bailout program due to end in 2018, Greece wants to come back to bond markets to show the rescue has been successful and the economy is able to fund itself. The government is studying when and how such a comeback will be more appropriate. Though Athens refuses to comment on this issue, it is widely expected that Greece will issue bonds next week.

The move is somewhat confusing given that Greek government bonds do not qualify for the ECB’s asset purchase program. They are considered junk by credit rating agencies, and thus cannot feature on the central bank’s balance sheet. When asked how Greece would convince investors to buy bonds if the ECB isn’t buying these assets, Athey said: “I don’t know.” “I guess from a Greek perspective it seems to be a window of opportunity, we’ve seen Greek yields have fallen fairly consistently throughout the year…the fact that Greece might come to market at what optically looks like an attractive yield for a Greek issuer must be tempting to them, especially considering that we are expecting the QE program to ultimately come to a conclusion over the next 6 to 12 months, they certainly would not want to wait until then,” he suggested.

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Absolute fantasy predictions. That’s the only way left to sell their stories. They all want Greece back in ‘markets’ before the next bailout expires next year.

No Surprises From IMF Report On Greek Debt (K.)

Bond markets responded calmly on Friday to the debt sustainability analysis (DSA) of the IMF, which found Greece’s debt exceptionally unsustainable, while deciding to participate in the Greek bailout program with 1.6 billion euros. The markets’ reaction allows for the government to issue the five-year bond as early as on Monday. The DSA reiterates that the eurozone’s commitments to secure the sustainability of the Greek debt are not sufficient. The IMF estimates the debt will slide to 160% of GDP in 2020 and to 150% in 230, before soaring to 190% in 2060. Servicing the debt will exceed 15% of GDP in 2028, reaching as high as 45% in 2060.

The Fund argues that the estimates of Athens and the eurozone on growth rates, primary surpluses and other parameters affecting the debt are optimistic and insists its own views are realistic, saying that Greece has historically been weak in implementing reforms and cannot support high primary surpluses for many years. It goes on to say that revenues from privatizations will not exceed €2 billion by 2030 and believes that the state will not collect any substantial funds from the sale of the bank shares it acquired in the last few share capital increases. It therefore calls on the eurozone to reach an agreement on a realistic strategy for easing Greece’s debt.

The IMF’s proposal for a new stress test on Greek banks and a fresh asset quality review were met with a clear dismissal on Friday by a ECB spokesman, who pointed to Frankfurt being the sole monitoring authority that decides on such issues. The strong ECB response was also addressed at the IMF’s estimate that Greek lenders will require fresh recapitalization to the tune of €10 billion. On Friday Standard & Poor’s stopped short of raising the country’s credit rating, affirming it at ‘B-,’ but pointed to an upcoming upgrade switching Greece’s outlook from stable into positive.

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How much longer? We know there are reports.

The Kingdom Whose Name We Dare Not Speak At All (Robert Fisk)

Theresa May has oddly declined to comment on the reported arrest of the mini-skirted lass who was videotaped cavorting through an ancient Najd village this week, provoking unexpected roars of animalistic male fury in a kingdom known for its judicial leniency, political moderation, gender equality and fraternal love for its Muslim neighbours. May should, surely, have drawn the attention of the rulers of this normally magnanimous state to the extraordinarily uncharacteristic behaviour of the so-called religious police – hitherto regarded as extras in the very same kingdom’s growing tourism industry which is supported by its newly appointed peace-loving and forward-thinking young Crown Prince.

But of course, since May cannot possibly believe that a single person in this particular national entity would give even a riyal or a halfpenny to “terrorists” – of the kind who have been tearing young British lives apart in Manchester and London – she’s hardly likely to endanger the “national security” of said state by condemning the arrest of the aforementioned young lady. In any event, a woman so proper that she would not risk soiling her hands by greeting the distraught survivors of the Grenfell Tower fire has no business shedding even a “little tear” for middle class girls who upset what we must now call The Kingdom Whose Name We Dare Not Speak At All. Or at least, we do not dare to speak its name.

It’s now a week since this extraordinary woman – our beloved May, not the cutie of Najd – declined to publish perhaps the most important, revelatory document in the history of modern “terrorism” on the grounds that to identify the men who are funding the killers running Isis, al-Qaeda, al-Nusrah and sundry other chaps, would endanger “national security”. Note that Amber Rudd, May’s amanuensis, intriguingly declined to specify whose “national security” was at risk. Ours? Or that of The Kingdom Whose Name We Dare Not Speak At All – henceforth, for brevity’s sake, the KSA – which must surely be well aware which of its illustrious citizens (peace-loving, moderate, gender-equalised, etc) have been sending their lolly to the Isis lads.

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If you read carefully, you see that it’s all been a mess for many years. The only difference is Trump doesn’t try to hide that.

EPA Will Allow Fracking Waste Dumping in the Gulf of Mexico (TO)

As the Trump administration moves to gut Obama-era clean water protections nationwide, an environmental group is warning the Environmental Protection Agency (EPA) that its draft pollution discharge permit for offshore drilling platforms in the Gulf of Mexico violates clean water laws because it allows operators to dump fracking chemicals and large volumes of drilling wastewater directly into the Gulf. In a recent letter to the agency, the Center for Biological Diversity told the EPA that the dumping of drilling wastewater – which can contain fracking chemicals, drilling fluids and pollutants, such as heavy metals – directly into Gulf waters is unacceptable and prohibited under the Clean Water Act.

Under current rules established by the Obama administration, offshore oil and gas platforms can discharge well-treatment chemicals and unlimited amounts of “produced waters” from undersea wells directly into the Gulf as long as operators perform toxicity tests a few times a year and monitor for “sheens” on the water’s surface. About 75 billion gallons of produced water were dumped in the Gulf in 2014 alone, according to EPA records. Offshore fracking, which typically involves injecting water and chemicals at high pressure into undersea wells to improve the flow of oil and gas, has rapidly expanded in the Gulf of Mexico over the past decade.

The latest draft of the pollution discharge permit, which was largely prepared under the Obama administration, would require drillers to collect information on the fracking chemicals they dump overboard. Regulators want to know what these chemicals are; their catalogue of offshore fracking chemicals has not been updated since 2001, despite advancements in technology.

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Here’s real collusion for you: “special committees of up to 200 employees”. It wasn’t just software, they also agreed to use too small versions of the ‘tanks’ that clean emissions. Now VW is talking, trying to get its own fines diminished.

Oh, and you think nobody in government ever knew about this? Prediction: Merkel will push EU into lower fines. Prediction 2: they will comply.

German Carmakers Colluded On Diesel Emissions For Decades (Qz)

German magazine Der Spiegel reports that the country’s powerful automakers have been meeting in secret since the 1990s—and their joint decisions on dealing with diesel emissions may have laid the groundwork for Volkswagen’s massive emissions-cheating scandal. According to Der Spiegel, VW admitted to German authorities that it may have engaged in “anti-competitive behavior” with rivals BMW and Daimler via special committees of up to 200 employees that set prices, agreed on suppliers, and engaged in other forms of coordination. One major topic of the meetings was how to manage emissions from diesel engines. The result, as we now know in Volkswagen’s case, was the installation of emissions-cheating software, which was uncovered by American regulators in 2015 and has cost the automaker dearly since.

Daimler tried to get ahead of things this week by recalling 3 million diesel vehicles in Europe for a free emissions-system alteration. Audi followed suit today, with a similar offer to “improve emissions behavior” for 850,000 cars. Spiegel says that German regulators discovered signs of an illegal agreement between the automakers this summer, when they were investigating Volkswagen on suspicion that carmakers were fixing the price of steel. Volkswagen, Daimler, and BMW declined to comment on the Spiegel report, with the latter two calling it “speculation.” Germany’s automakers are anxious as a backlash against diesel motors gathers pace. Several European cities—including Stuttgart, the home of Porsche—have called for a ban on diesel cars, which accounted for around 47% of cars sold in Europe’s five biggest markets in the second quarter of this year.

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Nice society you got there. Britain’s way overdue for a complete make-over.

Number Of Homeless Children In Temporary Accommodation in UK Rises 37% (G.)

Councils across England are housing the equivalent of an extra secondary school of pupils per month as the number of homeless children in temporary accommodation soars, according to local government leaders. The Local Government Association (LGA) said councils are providing temporary housing for around 120,540 children with their families – a net increase of 32,650 or 37% since the second quarter of 2014. It said the increase equates to an average of 906 extra children every month. The LGA said placements in temporary accommodation can present serious challenges for families, from parents’ employment and health to children’s ability to focus on school studies and form friendships. The LGA, which represents 350 councils across England, said the extra demand is increasing the pressure on local government.

It said councils need to be able to build more “genuinely affordable” homes and provide the support that reduces the risk of homelessness. This means councils being able to borrow to build and to keep 100% of the receipts of any home they sell to reinvest in new and existing housing, the LGA said. Council leaders are also calling for access to funding to provide settled accommodation for families that become homeless. Martin Tett, the LGA’s housing spokesman, said: “When councils are having to house the equivalent of an extra secondary school’s worth of pupils every month, and the net cost for councils of funding for temporary accommodation has tripled in the last three years, it’s clear the current situation is unsustainable for councils, and disruptive for families.

“Councils are working hard to tackle homelessness, with some truly innovative work around the country – and we now need the Government to support this local effort by allowing councils to invest in building genuinely affordable homes, and taking steps to adapt welfare reforms to ensure housing remains affordable for low-income families.”

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EU policies bring the vermin our of the woodwork.

Sicilian Mayor Moves To Block Far-Right Plan To Disrupt Migrant Rescues (G.)

A Sicilian mayor is seeking to block a ship chartered by a group of far-right activists attempting to disrupt migrant rescues in the Mediterranean. Enzo Bianco, the mayor of Catania, has urged authorities in the port city on the island’s east coast to deny docking rights to C-Star, a 40-metre vessel hired by Generation Identity, a movement made up of young, anti-Islam and anti-immigration activists from across Europe, for its sea mission to stop migrants entering Europe from Libya. The ship is expected to arrive on Saturday, and the group intends to launch its mission next week. “I’ve told [the relevant] authorities that allowing the ship to dock in our port would be very dangerous for public order,” Bianco said in a statement to the Guardian.

“I also consider it to be a provocation by those involved, with their sole purpose being to fuel conflict by pouring fuel on the fire.” Under a vigilante scheme called “Defend Europe”, the activists crowdfunded more than €75,000 (£67,000) to hire the boat. In a “trial run” two months ago, the ship successfully intercepted a charity rescue ship off Sicily. The activists’ aim is to expose what they claim to be wrongdoing by “criminal” NGO search and rescue vessels, which they accuse of working with people smugglers to transport illegal immigrants to Europe. They also plan to disrupt the work of the crews by calling the Libyan coastguard and asking them to take migrants and refugees attempting to cross the Mediterranean back to war-torn Libya.

Anti-racism groups across Sicily have also urged authorities to take action against the group, to prevent them interfering in the life-saving missions. “Sicily is a place where every family has an emigration story,” Bianco said. “In recent years we have welcomed thousands of people fleeing from war and hunger, people who were saved from dying in the Mediterranean by European vessels, and those who have lost one or more family members crossing the sea. Talking about ‘defending Europe’ is not just demagogic, it’s unworthy.”

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“Long dormant spores of the highly infectious anthrax bacteria frozen in the carcass of an infected reindeer rejuvenated themselves and infected herds of reindeer and eventually local people.”

All Hell Breaks Loose As The Tundra Thaws (G.)

Strange things have been happening in the frozen tundra of northern Siberia. Last August a boy died of anthrax in the remote Yamal Peninsula, and 20 other infected people were treated and survived. Anthrax hadn’t been seen in the region for 75 years, and it’s thought the recent outbreak followed an intense heatwave in Siberia, temperatures reaching over 30C that melted the frozen permafrost. Long dormant spores of the highly infectious anthrax bacteria frozen in the carcass of an infected reindeer rejuvenated themselves and infected herds of reindeer and eventually local people. More recently, a huge explosion was heard in June in the Yamal Peninsula. Reindeer herders camped nearby saw flames shooting up with pillars of smoke and found a large crater left in the ground.

Melting permafrost was again suspected, thawing out dead vegetation and erupting in a blowout of highly flammable methane gas. Over the past three years, 14 other giant craters have been found in the region, some of them truly massive – the first one discovered was around 50m (160ft) wide and about 70m (230ft) deep, with steep sides and debris spread all around. There have also been cases of the ground trembling in Siberia as bubbles of methane trapped below the surface set the ground wobbling like an airbed. Even more dramatic, setting fire to methane released from frozen lakes in both Siberia and Alaska causes some impressive flames to erupt. Methane is of huge concern. It is more than 20 times more potent a greenhouse gas than carbon dioxide, and a massive release of methane in the Arctic could pose a significant threat to the global climate, driving worldwide temperatures even higher.

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Feb 112017
 
 February 11, 2017  Posted by at 10:26 am Finance Tagged with: , , , , , , , , , , ,  Comments Off on Debt Rattle February 11 2017


Dorothea Lange Play street for children. Sixth Street and Avenue C, NYC 1936

 

Trump ‘May’ Not Appeal Travel Ban Ruling To Supreme Court (ZH)
What’s Really Behind Trump’s Bungling Of The Immigration-Ban Order? (MW)
White House: Cohn-Led Tax Plan Is Real and It’s Phenomenal
Daniel Tarullo, Federal Reserve Regulatory Point Man, to Resign (WSJ)
Foreigners Dump Debt, Offering Up a Test for Rates (WSJ)
Russia’s Exile From World Markets May Soon Be Over (BBG)
EU Foreign Policy Chief Tells Trump Not To Interfere In Europe’s Politics (G.)
EU In Disintegration Mode (Martin Armstrong)
Eurozone, IMF Agree On A Common Stance On Greece (R.)
Greek Bailout Talks Set to Drag Past February Amid Standoff (BBG)
Universal Basic Income ‘Useless’, Says Finland’s Biggest Union (Ind.)
Snowden Claims Report Russia May ‘Gift’ Him To Trump Proves He’s No Spy (G.)
‘We Are Silently Dying’: Refugees In Greek Camp Slip Into Despair (MEE)

 

 

Keep ’em guessing.

Trump ‘May’ Not Appeal Travel Ban Ruling To Supreme Court (ZH)

Update: In the latest moment of confusion for the new administration, chief of staff Reince Priebus said the administration was still considering an appeal to the Supreme Court after a lower court soundly rejected its request to reinstate the order. Priebus’s statement came one hour after a White House official said it was not planning to challenge the Ninth Circuit Court of Appeals ruling upholding a temporary restraining order (TRO) blocking the ban, while Trump himself has said a new order on security could come next week. Priebus told The Washington Post that “every single court option is on the table, including an appeal of the Ninth Circuit decision on the TRO to the Supreme Court. In short, the situation remains fluid.

What a difference a day makes. Less than 24 hours after an angry Trump tweeted “SEE YOU IN COURT, THE SECURITY OF OUR NATION IS AT STAKE!” in the aftermath of yesterday’s adverse Appeals Court ruling… … the President has changed his mind and has decided not to see anyone in court – if only for the time being – because according to Reuters, his administration is not currently planning to appeal the temporary hold on his travel ban to the Supreme Court, a White House official said Friday according to multiple media sources. The official noted, however, that the White House said it will forge ahead on the broader battle against a lawsuit challenging the executive order, if out of court. Which means, that as per the steps we laid out last night, the administration will now prepare a brand new immigration order.

Trump hinted as much earlier in the day when during his press conference with Abe, he said: “We’ll be doing something very rapidly having to do with additional security for our country; you’ll be seeing that sometime next week,” Trump said with Abe by his side. He offered no specifics. He then added “we are going to keep our country safe,” he said on Friday. “We are going to do whatever’s necessary to keep our country safe.” He added he would continue to fight for the travel ban in courts, and that “ultimately, I have no doubt we will win that particular case.” Trump later told reporters aboard Air Force One that he would likely wait until next week to respond with legal action. “Perhaps Monday or Tuesday,” he said.

Trump earlier Friday hinted a new order could be in the works, but he declined to detail what it would look like. And so, while his travel ban is held up in court, Trump said he is considering ordering his staff to draft a new executive order that will have an easier time clearing legal hurdles. “We also have a lot of other options, including just filing a brand new order,” he told reporters on the presidential aircraft.

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“The justices were very unlikely to second-guess a president’s national security intelligence. They don’t consider that to be their job, they don’t want to do it, and they know how dangerous that could be – for the country and, indeed, for the standing of the courts. Legal precedent strongly suggests that they’d support the president so long as he could reassure them he had a rational basis for his action. But that’s not what Trump’s lawyer did.”

What’s Really Behind Trump’s Bungling Of The Immigration-Ban Order? (MW)

What on Earth is wrong with Donald Trump? Did he actually set out to lose his immigration ban in the appeals court deliberately, so that he could whip up his base into ever more fury at the “elites”? Contrary to what you may hear, the U.S. Court of Appeals for the 9th Circuit on Thursday did not — repeat: did not — repudiate Trump’s legal right to suspend selective immigration. It just repudiated the bungling incompetence with which his administration made the case. Yes, the three justices ruled: “Courts owe substantial deference to the immigration and national security policy determinations” of the president and Congress. That is “an uncontroversial principle that is well-grounded in our jurisprudence.” Indeed, as I pointed out earlier this week, it is well established that the president has very broad discretion to suspend immigration where he deems it necessary.

But that was not what the Trump administration claimed. Instead, they argued that they were actually above the law, the Constitution or legal review. “The Government has taken the position that the President’s decisions about immigration policy, particularly when motivated by national security concerns, are unreviewable, even if those actions potentially contravene constitutional rights and protections,” the justices wrote with disbelief. They added: “There is no precedent to support this claimed unreviewability, which runs contrary to the fundamental structure of our constitutional democracy.” You couldn’t make this up. Trump is now raging at the judges. But the blame for this fiasco lies entirely with him, and no one else. All the administration had to tell the appeals court was that it had rational reasons for suspending immigration from the seven specific countries.

Even with national security details “redacted,” the president’s lawyer could have laid out a simple case. Call it Iraq War II. “Intelligence sources say .. intelligence sources warn .. We have received intelligence ..” And so on. He could have kept it vague and menacing. He could have made it up. So long as he offered something. All the courts needed was an excuse. Cue our old friend “Curveball.” The justices were very unlikely to second-guess a president’s national security intelligence. They don’t consider that to be their job, they don’t want to do it, and they know how dangerous that could be – for the country and, indeed, for the standing of the courts. Legal precedent strongly suggests that they’d support the president so long as he could reassure them he had a rational basis for his action. But that’s not what Trump’s lawyer did.

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Having Goldman do your tax policies can backfire in seconds.

White House: Cohn-Led Tax Plan Is Real and It’s Phenomenal

Former Goldman Sachs president Gary Cohn is leading the effort to craft President Donald Trump’s plan to overhaul taxes that will be released within weeks, a White House official said. Unnamed congressional leaders have been consulted on the blueprint, the official said. It’s separate from Trump’s proposed budget, the official said, requesting anonymity because the plan is still under development. During a meeting at the White House with U.S. airline executives Thursday, Trump said he had a “phenomenal” plan to revamp business taxes that would be revealed within the next two or three weeks, without offering details. White House Press Secretary Sean Spicer told reporters later that day that specifics would emerge only in the coming weeks.

Still, he said the White House is at work on an outline of the most comprehensive business and individual tax overhaul since 1986. Cohn, 56, stepped down as Goldman’s president and COO in December after agreeing to lead Trump’s National Economic Council, an influential panel that helps coordinate and develop the president’s economic program. He was long seen as the heir apparent to the bank’s CEO Lloyd Blankfein. During a news conference Friday with Japanese Prime Minister Shinzo Abe, Trump said he was working with House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell on the tax measure, which would be guided by an “incentive-based policy” and released “over the next short period of time.”

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3 seats now, Yellen’s in a year. Politicians deciding where a by law independent central bank will turn.

Daniel Tarullo, Federal Reserve Regulatory Point Man, to Resign (WSJ)

The Federal Reserve’s lead architect of postcrisis financial regulations plans to resign this spring, giving President Donald Trump more freedom to remake the central bank and to accelerate a deregulatory agenda by putting his own appointees in charge of overseeing Wall Street. Daniel Tarullo, a 64-year-old Fed governor and the government’s most influential overseer of the American banking system, wrote to Mr. Trump on Friday saying he would resign “on or about” April 5. The move had been expected, and will remove from the policy-making debate one of the strongest voices for imposing safeguards on big banks and nonbanks to protect against another meltdown. Mr. Trump and many of his advisers have criticized those rules as hampering economic growth, and have suggested they will fill vacancies with officials who will handle banking policy with a lighter touch.

Stock prices for megabanks jumped on the news of Mr. Tarullo’s imminent departure, with shares in Bank of America and Citigroup rising almost 1% in the half-hour following the announcement. Mr. Tarullo’s resignation will also give the Trump administration broad discretion to put its own stamp on the central bank at a time when critics—including top Republicans in Congress—have accused the institution of lacking transparency and accountability. The departure could leave vacant three of the seven slots on the Fed’s board of governors. In addition, Janet Yellen’s term as chairwoman expires early next year. Filling those vacancies would also give the new president the chance to redirect the course of monetary policy, though it is unclear whether he would seek officials who would alter Ms. Yellen’s current course of cautious rate increases.

Mr. Tarullo’s announcement came exactly a week after Mr. Trump signed an executive order instructing regulators to review the rules implemented since the 2010 Dodd-Frank financial overhaul, and as Republican lawmakers intensify their plans to rewrite that landmark law. But partisan gridlock on Capitol Hill makes it unlikely Congress can make big changes, leaving it to the regulators Mr. Trump nominates to change the way rules are written, implemented and enforced.

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I’m going with Tim Duy’s tweet on this one: “I would say “Foreigners back away from US Treasury, proving they aren’t necessary to finance deficits.”

Foreigners Dump Debt, Offering Up a Test for Rates (WSJ)

Foreign buyers, led by China, are taking a smaller slice of the debt issued by the U.S. and other major economies, a change that may test the long-held belief that overseas money has kept interest rates low in the developed world. For much of this century, the world’s money increasingly sought the harbors of the bond markets of big, Western nations, principally the U.S. but also Germany and Britain. During that period those countries, and their citizens and companies, borrowed money at remarkably low interest rates. The receding foreign tide comes amid other momentous changes for the global economy and interest rates, including a turn in many political corners away from the free-trading ethos that has defined modern capitalism and glimmers of inflation that are encouraging major central banks to pare back their unprecedented economic stimulus measures.

Foreigners are steadily pulling back: As of November, for the first time since 2009, less than 30% of the $20 trillion market for U.S. government debt was held overseas, according to the latest official data, released in January, from the Treasury Department and Federal Reserve. In the U.K., it is now 27%, compared with a record of 36% in 2008. In Germany, it is 49%, down from a peak of 57% in 2014. The consequences from this shift are uncertain. Strong demand helps push up prices, and lower yields, of government bonds, at least in the short term. And buyers such as the Chinese state have been ravenous sources of demand.

Between 2000 and 2014, Chinese authorities built up a $4 trillion currency reserve, mainly through buying Treasurys to keep the yuan weak and help the country’s exporters. In January, its reserves fell below $3 trillion, the lowest level in almost six years. China is now trying to boost its currency, and its Treasury holdings fell by about $200 billion between May and November. “You create an environment where yields are manipulated lower by captive investors,” said Paul Donovan, chief economist at UBS Wealth Management. “There is now a shift going on here, which is most significant for the U.S.”

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Russia did so well under the sanctions, perhaps it’s better for them to keep doing what they were.

Russia’s Exile From World Markets May Soon Be Over (BBG)

As Donald Trump edges the U.S. closer to a thaw in relations with Vladimir Putin’s Russia, commodity investors are already jumping in. A plan by United Co. Rusal, the biggest Russian aluminum maker, for a London sale of shares valued at about $1.7 billion is the latest sign that Russia’s exile from world markets is over for the nation’s metal and mining giants. It’s a turnaround from years in which slumping raw-materials prices, a weak economy and sanctions imposed by then-U.S. President Barack Obama over the annexation of Crimea punished valuations and drove away foreign investors. Share sales by Russian mining companies have been rare since 2010. Until two months ago, PhosAgro’s offering in April 2013 was the last major sale by a non-state Russian mining company.

The fertilizer miner and processor is among those that have returned since December. Offerings from Novolipetsk Steel and TMK bring the total raised by mining and metals producers since then to about $575 million. Others weighing offers include En+ Group and Polyus. Magnitogorsk Iron & Steel, also known as MMK, is also considering selling a small stake to the market, people familiar said on Friday. Billionaire Mikhail Prokhorov’s Onexim may offer up to 5% of Rusal to investors soon, people said late Thursday. It’s not just plain equities. In a sign of investor appetite, steelmaker Severstal sold $250 million of convertible bonds on Thursday paying a zero coupon. “Investors see less risk in Russian companies now as the geopolitical situation has eased,” Rusal Deputy Chief Executive Officer Oleg Mukhamedshin said in an interview in Moscow last week following a company sale of eurobonds. “That affects demand for both bonds and equities.”

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Brussels trembles ahead of multiple national elections. But faking your great achievements and position of strength doesn’t actually make you look strong.

EU Foreign Policy Chief Tells Trump Not To Interfere In Europe’s Politics (G.)

The EU foreign policy chief, Federica Mogherini, has warned the Trump administration not to interfere in European politics, advising it to “deal with America first”. Speaking during a two-day visit to Washington, Mogherini did not make specific accusations but said that she sometimes heard voices in the new administration “saying the European Union is not necessarily a good idea. Inviting us to dismantle what we have managed to build and which has brought us not only peace, but also economic strength.” “It’s not for me or another European to speak about domestic political choices or decisions in the US. The same goes with Europe – no interference,” Mogherini said, speaking at the Atlantic Council thinktank. “Maybe America first means also that you have to deal with America first.”

Mogherini’s tone echoed the increasing alarm in Brussels over the new administration’s attitudes. Donald Tusk, the head of the European Council, has listed the new US administration and its “worrying declarations” as one of the leading global threats to the EU. Trump has not missed a chance to deride the EU, going out of his way to praise Brexit, and in an interview just before taking office, he depicted the continent as being dominated by Germany and on the brink of collapse. “President Trump believes that dealing bilaterally with different European countries is in US interests, that we could have a stronger relationship with the countries individually,” said Ted Malloch, the man tipped to be Donald Trump’s nominee as ambassador to the EU. He also accused Europe of “blatant anti-Americanism”.

She also took the opportunity to remind the administration, which hosted the UK prime minister, Theresa May, as the president’s first foreign guest, and promised her a favourable trade deal, that Britain did not have the right to negotiate independently until it was outside the EU, which was two years away at least. “The strength of the EU and the unity of the EU I believe is more evident today than it was a few months ago. This has to be clearly understood here,” Mogherini said. “This also means respect for the EU not simply as an institution. It is a union of 28 member states.”

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“..the Trump Administration [..] fail to grasp that talking the dollar down will just not work if the political structure of the EU is breaking up.”

EU In Disintegration Mode (Martin Armstrong)

The EU leadership is really trying to make Great Britain pay dearly for voting to exit the Community. Like the socialists in America, it’s our way or no way. The left may call the right the “deplorables” but the left are the “intolerables” who refuse to ever consider they might be wrong. The EU thinks that if they can make it so bad for Britain, nobody else will leave. They refuse to examine why there is rising discontent within Europe. They refuse to let go of this dream of a federalized Europe to eradicate national identities along with sovereign rights. [..] Britain is not willing to surrender all domestic law to that of the EU. Indeed, EU law is no longer to be applied in Britain. Here we have the EU demanding Ireland retroactively charge Apple taxes simply because their tax rate is less that the highest EU member.

That is surrendering everything sovereign to Brussels. Laws are only to be decided by the British parliament – not Brussels. Jurisprudence is a matter for the British courts not the European Court. Britain is to leave the EU internal market and the EU Customs Union and seeks a free trade agreement to be concluded between the EU and Great Britain. The EU seeks to punish Britain for rejecting its dream. The EU forgets that Trump is now in and a trade deal with Britain will no longer be at the back of the queue as was the case under Obama. Free movement of people, together with the free movement of goods, free movement of services and the free movement of capital, are the four fundamental freedoms which are regarded as the foundation of the EU. The free movement of persons justifies the right of all EU citizens to settle in the Union and to accept work. However, this has not worked as smoothly as presumed.

The cost of living is significantly different throughout the EU. Eastern Europeans, mainly from Poland, have infiltrated Britain working for less money creating competition for domestic workers while foreign companies use cheaper labor in the East to undercut domestic companies on their home-turf. As the economy turns down and deflation prevails, the threat of foreign jobs is being addressed throughout Europe. Add to this the refugee crisis and you have a powder keg throughout Europe waiting to go off. In view of the high unemployment in almost all countries, domestic citizens have ALWAYS turned against foreign workers as the easy scapegoats for the economic decline. This only merges with the high taxes reducing disposable income.

The EU leaders [..] have no clear statement to challenge what is going on. The regulatory nightmare and outright rage that is rising among the people is simply ignored by Brussels. The legal uncertainty with the British exit on the banking system is something nobody even wants to speculate about. How do bail-ins work in Europe if abandoned in Britain? So while the EU thinks by punishing Britain they will discourage others from leaving, they are seriously mistaken. The dream of the EU is dead. It should have remained just a trade union – that was it. What the Trump Administration is clueless about is the ability of the EU to hold it together, they fail to grasp that talking the dollar down will just not work if the political structure of the EU is breaking up.

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All that’s left is emptiness.

Eurozone, IMF Agree On A Common Stance On Greece (R.)

Euro zone lenders and the International Monetary Fund have reached agreed between themselves to present a common stance to Greece later on Friday in talks on reforms and the fiscal path Athens must take, euro zone officials said. Such a united stance would be a breakthrough because the two groups have differed for months on the size of the primary surplus Greece should reach in 2018 and maintain for years later as well as the issue of debt relief. Those differences have hindered efforts to unlock further funding for Greece under its latest euro zone bailout program. “There is agreement to present a united front to the Greeks,” a senior euro zone official said, adding that the outcome of Friday’s meeting with the Greeks was still unclear and it was unclear if Athens would accept the proposals. “What comes out of it, we will see,” the official said. Financial markets took heart from the news, however.

Greece’s two-year bond yield fell almost 50 basis points to 9.55%. It hit the 10% mark on Thursday as worries about the bailout drove away buyers. The chairman of euro zone finance ministers, Jeroen Dijsselbloem, said in The Hague that Friday’s meeting, in which Greek Finance Minister Euclid Tsakalotos will take part, was to discuss the size of Greece’s primary surplus. The euro zone wants Greece to reach a primary surplus – which excludes interest repayments on debt – of 3.5% of GDP and keep it there for many years. But the IMF believes that with reforms in place now Greece will reach only 1.5% next year and in the following years and has therefore been pushing for Athens to legislate new measures that would safeguard the agreed euro zone targets. Officials said the lenders would ask Greece to take €1.8 billion worth of new measures until 2018 and another €1.8 billion after 2018, focused on broadening the tax base and on pension cutbacks.

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What a surprise.

Greek Bailout Talks Set to Drag Past February Amid Standoff (BBG)

Greece probably won’t complete its bailout review by the time the euro area’s finance ministers next meet, on Feb. 20, setting the stage for potentially thorny negotiations in the midst of next month’s bitter electoral campaign in the Netherlands. “We will take stock of the further progress of the second review during the next Eurogroup,” Dutch Finance Minister Jeroen Dijsselbloem said in a statement after a meeting with his Greek counterpart, Euclid Tsakalotos, in Brussels on Friday. “There is a clear understanding that a timely finalization of the second review is in everybody’s interest,” Dijsselbloem said after the meeting, in which representatives of creditor institutions also participated.

Greece is locked in talks with the European Commission, the ECB, the European Stability Mechanism and the IMF over the conditions attached to its latest bailout. During Friday’s meeting, bailout auditors asked the government to legislate additional fiscal cuts equal to about 2% of GDP if the country fails to meet certain budget targets, a person familiar with the matter said after the talks. These contingent measures are the basis for further discussions, the person said, asking not to be named as the matter is sensitive. While progress was made in the meeting, unreasonable demands from the IMF make a resumption of staff-level talks difficult, a Greek government official said in a text message, asking not to be named in line with policy.

The Greek government has been resisting calls to preemptively legislate contingent belt-tightening for 2018 and beyond, arguing that measures already in place should suffice to meet an agreed goal for a budget surplus – before interest payments – equal to 3.5% of GDP. Among the measures the IMF is demanding is pension cuts and a lowering of the threshold at which income tax is paid. Both are red lines the government says it’s not willing to cross. “Although we expect that the Greek government will implement the required measures, the risk of early elections is increasing given the rising political cost to the government and its slim majority in the parliament,” Moody’s analyst Kathrin Muehlbronner said. “Early elections might bring a new and more reform-minded conservative government, but Greece’s economy would be hit again by prolonged uncertainty, after having just started to record positive growth.”

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This must be the dumbest thing I’ve heard in a long time. And that’s saying something these days. The UBI trial started just weeks ago, and they already know it will fail?

Universal Basic Income ‘Useless’, Says Finland’s Biggest Union (Ind.)

Finland’s basic income experiment is unworkable, uneconomical and ultimately useless. Plus, it will only encourage some people to work less. That’s not the view of a hard core Thatcherite, but of the country’s biggest trade union. The labour group says the results of the two-year pilot program will fail to sway its opposition to a welfare-policy idea that’s gaining traction among those looking for an alternative in the post-industrial age. “We think it takes social policy in the wrong direction,” said Ilkka Kaukoranta, chief economist of the Central Organisation of Finnish Trade Unions (SAK), which has nearly 1 million members. Since January, a group of unemployed Finns aged between 25 and 58 have been receiving a stipend of €560 per month. The amount isn’t means-tested and is paid regardless of whether the recipient finds a job, starts a business or returns to school.

Popular in the 1960s, the idea of a guaranteed minimum income for everyone is gaining more proponents again amid resurgent populism. French Socialist candidate Benoit Hamon has made it a policy platform in his presidential campaign. A universal — or unconditional — basic income (UBI), which would replace means-tested welfare payments, has its share of supporters on both the left and the right of the political spectrum. Advocates say it eliminates poverty traps and redistributes income while empowering the individual and reducing paperwork. In Finland, which like other Nordic nations is seen as a trendsetter when it comes to the welfare state, the idea is being explored by a center-right government headed by a former businessman and self-made millionaire.

While limited in scope (it’s conditional on the beneficiary having received some form of unemployment support in November 2016) and size (it’s based on a randomly-selected sample of 2,000 jobless people), the Finnish trial may help answer questions like: “Does it work”? “Is it worth it”? And the most fundamental of all: “Does it incite laboriousness or laziness?”

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“Speak not because it is safe, but because it is right.”

Snowden Claims Report Russia May ‘Gift’ Him To Trump Proves He’s No Spy (G.)

Whistleblower Edward Snowden has seized on a report that Russia is considering sending him back to the US as a “gift” to Donald Trump, saying that the story vindicates him of charges that he is a spy. “Finally: irrefutable evidence that I never cooperated with Russian intel,” he said on Twitter. “No country trades away spies, as the rest would fear they’re next.” Snowden was responding to a report by NBC which stated that US intelligence had collected information that Russia wanted to hand Snowden over in order to “curry favor” with Trump, who has said that the former NSA contractor is a “traitor” and a “spy” who deserves to be executed. The report – based on two sources in the intelligence community – said the intelligence had been gathered since Trump’s inauguration.

Snowden’s ACLU lawyer, Ben Wizner, told NBC News he was unaware of any plan to return his client to the US. “Team Snowden has received no such signals and has no new reason for concern,” Wizner said. Russia granted Snowden asylum in 2013 and a three-year residency in 2014. Snowden has been living in exile in Moscow, facing charges in the US including violations of the US Espionage Act for leaking documents about secret mass surveillance programs. Speaking at a GOP candidate debate in March 2016, Trump said of Snowden: “I said he was a spy and we should get him back. And if Russia respected our country, they would have sent him back immediately, but he was a spy. It didn’t take me a long time to figure that one out.” The Kremlin publicly dismissed these claims.

Snowden offered a longer explanation of his feelings of vindication when he was interviewed by Katie Couric in December 2016, when rumours of a Russian handover first started circulating. He described the suggestion as vindication that he was“independent”. He added: “The fact that I’ve always worked on behalf of the United States and the fact that Russia doesn’t own me. In fact the Russian government may see me as a sort of liability.” Snowden suggested that a reason why Russia might want to return him was his recent criticism of the Kremlin’s human rights record and his suggestions that its officials had hacked US security networks. Previously Snowden has said that Moscow had “gone very far, in ways that are completely unnecessary, costly and corrosive to individual and collective rights” in monitoring citizens online.

When Couric asked if Snowden would mind being extradited, he replied: “That would obviously be something that would be a threat to my liberty and to my life. “But what I’m saying here is you can’t have it both ways. You can’t say this guy’s a bad guy – a Russian tool or something like that – at the same time you say he’s going to be traded away.” After reiterating his sense of vindication on Friday, Snowden posted again to Twitter: “Speak not because it is safe, but because it is right.”

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Incredible.

‘We Are Silently Dying’: Refugees In Greek Camp Slip Into Despair (MEE)

Poor living conditions, a sudden spate of deaths and a “complete loss of hope” are exacerbating mental health issues and leading to suicide attempts and self-harm in the Moria refugee camp on the Greek island of Lesvos, NGOs and refugees have warned. “More and more what we are seeing is people with severe depression linked to the conditions in which they are in and to the complete loss of hope,” said Louise Roland-Gosselin, an advocacy manager for the medical NGO, Doctors Without Borders (MSF). “[Refugees] in Moria are absolutely crushed and we hear more and more about how people are self-mutilating, how they want to commit suicide and we are aware of cases of suicide and attempted suicide, not only on Lesbos but also on other islands,” she added.

[..] For many of the camp’s residents the long and backlogged process of applying for asylum and the lack of activities in the camp has heightened their despair. “It’s still quite a depressing sight,” explained Roland-Gosselin. “You still have hundreds of people who are sleeping in tents, there is little access to water, hygiene conditions are not acceptable, there’s still hundreds of people without heating and they have absolutely no activity, they have nothing to do all day. So it’s an incredibly depressing place.” Some are turning to self-harm as a result of the situation. Cutting is common in the camp according to refugees MEE spoke to. “People here die inside, so when they die inside they either hurt someone else or they hurt themselves, that’s why they do it, to get the pain out. So they cut themselves. I’ve seen it happen to my friend. He’d cut himself, we’d bandage his arm and then he’d do it again the second day,” explained al-Anny.

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