Jun 032022
 
 June 3, 2022  Posted by at 8:47 am Finance Tagged with: , , , , , , ,  36 Responses »


Carl Bloch The transfiguration c1865

 

The East Grows Stronger While The West Gets Weaker (ZH)
Zelensky Says Russia Controls A Fifth Of Ukrainian Territory (BBC)
Quo Vadis, Mr Johnson? (Batiushka)
US Engaged In “Offensive” Cyber Ops Against Russia In Ukraine: NSA Director (ZH)
Biden To Visit Saudi Arabia In Push To Lower Oil Prices And Punish Russia (G.)
Biden’s Inner Trudeau (Turley)
Arms Sent To Ukraine Will End Up In Criminal Hands, Says Interpol Chief (G.)
Voting Software Vulnerable In Some States (AP)
Bill Barr Applauds Durham For Showing Truth On Clinton Campaign, FBI (JTN)
The Decline and Fall of Davos Man (PS)

 

 

 

 

Inflation

 

 

Kat Lindley

 

 

Interesting graph. Qué pasa?

 

 

It’s like they do it on purpose.

The East Grows Stronger While The West Gets Weaker (ZH)

The latest agreement among member nations on export bans targeting Russia is largely oil focused, not natural gas focused, with the union demanding an immediate 70% decrease in Russian oil transferred BY SHIP. Oil transferred by pipeline will continue to flow into the EU for now. The ban is intended to expand to 90% of all shipborne Russian oil by the end of this year. Natural gas imports from Russia will also continue. While some European nations are more dependent on Russian energy than others, overall 40% of the EU’s needs are supplied by the country’s industry. It is not surprising that they are seeking an incremental approach to sanctions, they simply would not be able to survive another winter if they were to go cold turkey and block Russian imports completely. Of course, this does not mean that Russia has to operate on Europe’s timetable.

Russia is already reducing exports of natural gas to multiple EU countries, with Denmark, Netherlands and Germany being the latest to see losses. The EU’s ban was oil and ship focused because they cannot find an alternative source for natural gas that would resolve shortages if they banned everything. Germany in particular would be destroyed by the loss of natural gas supplies from Russia with its 42% dependency. The solutions offered by governments and in the mainstream media neglect certain realities. Namely, they claim that output can be increased or diverted to Europe to fill the gap. Joe Biden has suggested that the US is a “net exporter” of oil (this advantage has swiftly declined since he entered the White House according to the IEA) and that the US could help alleviate European demand. The IEA and OPEC members like Saudi Arabia have offered to increase market availability and output of oil if Russian exports are hit with sanctions.

The problem is that increased production is a fantasy stifled by the realities of labor shortages, increased drilling costs due to inflation and shortages in raw materials caused by supply chain disruptions. There is little chance that production capacity will ever be able to match EU demands, according to experts in the drilling industry. [..] Russia has shown considerable resilience to sanctions on oil as both China and India have increased purchases in tandem with Europe’s bans. The wider implication of this being that Europe and the West will be facing reduced global oil supplies and paying a premium while countries like China and India will be enjoying increased supplies and lower prices from Russia. The East grows stronger while the West gets weaker

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“Zelensky admits Russia now holds one-fifth of Ukraine, the largest country entirely within Europe. What he didn’t acknowledge is that Russia controls Ukraine’s industrial heartland, 90% of its energy resources (including all of offshore oil), and its critical ports and shipping.”

“BREAKING: Tribunal over Ukrainian warcrimes will be held in Mariupol. It will be called the Mariupol Tribunal. In addition to the Ukrainian Nazis who committed war crimes in Mariupol, foreign mercenaries and NATO instructors will also be tried there.”

Zelensky Says Russia Controls A Fifth Of Ukrainian Territory (BBC)

Ukraine’s President Volodymyr Zelensky says that Russian forces have seized 20% of his country’s territory, as Moscow’s invasion nears its 100th day. Addressing lawmakers in Luxembourg, he added that the front line extended for more than 1,000km (621 miles). “All combat-ready Russian military formations are involved in this aggression,” he told MPs via videolink. Russian forces have been intensifying attacks on the city of Severodonetsk in the eastern Donbas region. UK defence officials say Russia has seized most of the city and are making “steady local gains, enabled by a heavy concentration of artillery”.


Severodonetsk is the easternmost city under Ukrainian control and regional governor Serhiy Haidai said Russia was trying to break through defences in the city “from all directions”. However he said Ukrainian troops were carrying out counter-attacks, “pushing back the enemy on some streets and taking several prisoners”. Intense street-to-street fighting in the city had hampered evacuations, he said, describing such efforts as “extremely dangerous”. In a video address late on Thursday evening, Mr Zelensky said the situation in Donbas had not changed significantly that day but that Ukrainians had experienced “some success” in battles in Severodonetsk.

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“..Johnson regurgitates the old Victorian anti-Russian myths of ‘The Great Game’..”

Quo Vadis, Mr Johnson? (Batiushka)

Alexander Johnson, or to give him his full name, Alexander Boris de Pfeffel Johnson, was born to wealthy British parents in New York in June 1964, fifty years after the Sarajevo assassination in June 1914. Since 2019 Johnson has been the Prime Minister of the UK. Giving the impression of an elitist and snobbish aristocrat and distantly related to Queen Elizabeth II, he used to work as a right-wing journalist but is above all a renowned political opportunist. A man of the people he is not. Like so many other politicians, does he actually believe in anything, apart from in himself? Johnson is a biographer of his idol, the half-American Winston Churchill, whom he appears to imitate in his stoop and gait. His fawning book The Churchill Factor, clearly indicates who his model is.

He has five or six or seven children (he himself does not seem to be too sure how many he has fathered by various mothers) and enjoys drunken parties in Downing Street during and outside lockdowns. A highly divisive and controversial figure inside the UK, loved by a few and hated by most, the following quip is made about him: What is the difference between Zelensky and Johnson? Zelensky is a buffoon who became a politician, whereas Johnson is a politician who became a buffoon. More serious commentators ask the question: Is Johnson a natural buffoon, or does he just pretend to be a buffoon? Or, perhaps most likely of all, is he a natural buffoon who pretends to be an even greater buffoon? Of course, most people will admit that as regards Zelensky, he never became a politician, but remained a buffoon. But that is another story.

Despite his middle name of Boris (1), Johnson is a Russophobe to the core, as prejudiced as Sir Arthur Conan Doyle (given his title because he defended the indefensible Boer War) or any other old Imperialist. Like other blinkered representatives of the Norman-British Establishment, Johnson regurgitates the old Victorian anti-Russian myths of ‘The Great Game’ as well as the new ones. These latter include the 2006 poisoning of the British spy and traitor, Alexander Litvinenko (clearly not an act of the Russian secret services, who would have acted so as not to be identified), and the 2018 Skripal poisonings in the British Establishment military centre in Salisbury (and the subsequent censorship of the case and the father’s and daughter’s abductions carried out by MI5). These poisonings were due to a nasty substance to be found, perhaps uniquely on earth, at the highly secretive and evil Porton Down chemical weapons plant, just six miles from Salisbury. That MI5 and its SIS assassination arm (100 murders per year on average) with its many South African hirelings, could have been responsible would never be admitted by Johnson’s tiny mind.

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“..infrastructurally devastating cyberattacks..”

US Engaged In “Offensive” Cyber Ops Against Russia In Ukraine: NSA Director (ZH)

The US military has issued a stunning but perhaps not entirely unexpected admission that it has been conducting offensive cyber operations in support of Ukraine. It marks the first ever such acknowledgement, and suggests – as many observers have long suspected – a deeper Pentagon and US intelligence role in Ukraine against the Russian military than previously thought. National Security Agency (NSA) and US Cyber Command Director Gen. Paul Nakasone told the UK’s Sky News on Wednesday, “We’ve conducted a series of operations across the full spectrum: offensive, defensive, [and] information operations.” This includes “offensive hacking operations” he said.

Without offering specific details, he continued, “My job is to provide a series of options to the secretary of Defense and the president, and so that’s what I do.” Importantly, Gen. Nakasone gave the interview from allied Baltic country Estonia, from which other supporting operations including weapons transfers for Ukraine have come. He spoke of major attempts of the Russians to launch infrastructurally devastating cyberattacks on Ukraine, saying, “And we’ve seen this with regards to the attack on their satellite systems, wiper attacks that have been ongoing, disruptive attacks against their government processes.” “This is kind of the piece that I think sometimes is missed by the public. It isn’t like they haven’t been very busy, they have been incredibly busy.

“And I think, you know, their resilience is perhaps the story that is most intriguing to all of us,” he said, describing the Ukrainian response. As for support the US has given Ukraine in the lead-up to the Russian invasion, the NSA director referenced the following: Nakasone previously said his agency deployed a “hunt forward” team in December to help Ukraine shore up its cyber defenses and networks against active threats. But his latest remarks appear to be the first time that a U.S. official said publicly that the U.S. has been involved in offensive cyber operations in response to Russia’s invasion of Ukraine.

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Pick your enemies wisely.

Biden To Visit Saudi Arabia In Push To Lower Oil Prices And Punish Russia (G.)

Joe Biden will reportedly visit Riyadh later this month and meet Crown Prince Mohammed bin Salman, abandoning a campaign pledge to make Saudi Arabia “a pariah” for the murder of Washington Post columnist Jamal Khashoggi. The Riyadh trip, first reported by the Washington Post and New York Times, suggests Biden has prioritized his need to bring oil prices down and thereby punish Russia for its invasion of Ukraine, over his stand on human rights. The visit will be added on to an already planned trip to Israel, Germany and Spain. The White House said it had no new travel plans to announce, but made clear there was no barrier to Biden meeting the crown prince.

“If he determines that it’s in the interests of the United States to engage with a foreign leader and that such an engagement can deliver results, then he’ll do so,” a senior White House official said. “In the case of Saudi Arabia, which has been a strategic partner of the United States for nearly 80 years, there’s no question that important interests are interwoven with Saudi Arabia. And the President views the Kingdom of Saudi Arabia as an important partner on a host of initiatives that we are working on both in the region and around the world.” The end of the crown prince’s US isolation has looked likely since the Ukraine invasion began on 24 February. Seeking to cut off Russian revenue, Washington has sought an expansion of the global oil supply to bring down prices, which also represented a threat to already poor Democratic prospects in this year’s congressional elections.

The White House reportedly sought to set up a phone call between Biden and Mohammed in March, but was snubbed by the crown prince. However, the president’s top Middle East adviser, Brett McGurk, and his special envoy for energy issues, Amos Hochstein, have persevered in paving the way for a meeting with a string of quiet trips to Riyadh.

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“..politicians are once again ignoring what is constitutionally possible..”

Biden’s Inner Trudeau (Turley)

In our increasingly hateful and divisive politics, there are times when our nation seems incapable of coming together for a common purpose. Tragedies — moments of shared national grieving and mutual support — once were the exception. Yet one of the most chilling aspects of the aftermath of the school massacre in Uvalde, Texas, was how the moment of unity was quickly lost to political posturing. Politicians have long admitted that a crisis is an opportunity not to be missed — the greater the tragedy, the greater the opportunity. After the mass shooting at a Buffalo supermarket, New York’s Gov. Kathy Hochul (D) called for censorship to “silence the voices of hatred and racism.” After the Uvalde massacre, some Democrats renewed calls for everything from court packing to ending the Senate filibuster.

The most immediate response, however, was a call for gun bans. Vice President Kamala Harris got out front of the White House by demanding a ban on AR-15s, the most popular weapon in America. Then President Joe Biden created a stir by suggesting he might seek to ban 9mm weapons. Such calls are not limited to the United States. Canadian Prime Minister Justin Trudeau announced that his government is introducing legislation to “implement a national freeze on handgun ownership.” He said Canadians would no longer be able “to buy, sell, transfer or import handguns anywhere in Canada,” adding that “there is no reason anyone in Canada should need guns in their everyday lives.”

The difference between the push in the two countries is the existence of the Second Amendment in the United States — a constitutionally mandated “reason” why Americans are allowed to have guns; they don’t have to prove it to the government. While the White House subsequently tried to walk back his comments, Biden saying there’s “no rational basis” to own 9mms and AR-15s sounds like he’s channeling his inner Canadian.There is now a strong majority for gun control reforms. However, politicians are once again ignoring what is constitutionally possible by focusing on what is politically popular with their voting base.

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A strange difference between guns for Ukraine and guns in America.

Arms Sent To Ukraine Will End Up In Criminal Hands, Says Interpol Chief (G.)

Weapons sent to Ukraine after Russia’s invasion in February will end up in the global hidden economy and in the hands of criminals, the head of Interpol has said. Jürgen Stock says once the conflict ends, a wave of guns and heavy arms will flood the international market and he urged Interpol’s member states, especially those supplying weapons, to cooperate on arms tracing. “Once the guns fall silent [in Ukraine], the illegal weapons will come. We know this from many other theatres of conflict. The criminals are even now, as we speak, focusing on them,” Stock said.

“Criminal groups try to exploit these chaotic situations and the availability of weapons, even those used by the military and including heavy weapons. These will be available on the criminal market and will create a challenge. “No country or region can deal with it in isolation because these groups operate at a global level.” He added: “We can expect an influx of weapons in Europe and beyond. We should be alarmed and we have to expect these weapons to be trafficked not only to neighbouring countries but to other continents.” He said Interpol urged members to use its database to help “track and trace” the weapons.

“We are in contact with member countries to encourage them to use these tools. Criminals are interested in all kinds of weapons … basically any weapons that can be carried might be used for criminal purposes.” Ukraine’s western allies have sent shipments of high-end military weapons to Ukraine since the Russian invasion more than three months ago. On Tuesday, the American president, Joe Biden, announced the US would supply Kyiv with advanced missile systems and munitions. After the US pulled out of Afghanistan in 2021, following 20 years of war, huge amounts of often highly sophisticated military equipment was left behind and fell into the hands of the Taliban.

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Who wrote that headline? It’s Dominion, in 16 states!

Voting Software Vulnerable In Some States (AP)

Electronic voting machines from a leading vendor used in at least 16 states have software vulnerabilities that leave them susceptible to hacking if unaddressed, the nation’s leading cybersecurity agency says in an advisory sent to state election officials. The U.S. Cybersecurity and Infrastructure Agency, or CISA, said there is no evidence the flaws in the Dominion Voting Systems’ equipment have been exploited to alter election results. The advisory is based on testing by a prominent computer scientist and expert witness in a long-running lawsuit that is unrelated to false allegations of a stolen election pushed by former President Donald Trump after his 2020 election loss. The advisory, obtained by The Associated Press in advance of its expected Friday release, details nine vulnerabilities and suggests protective measures to prevent or detect their exploitation.


Amid a swirl of misinformation and disinformation about elections, CISA seems to be trying to walk a line between not alarming the public and stressing the need for election officials to take action. CISA Executive Director Brandon Wales said in a statement that “states’ standard election security procedures would detect exploitation of these vulnerabilities and in many cases would prevent attempts entirely.” Yet the advisory seems to suggest states aren’t doing enough. It urges prompt mitigation measures, including both continued and enhanced “defensive measures to reduce the risk of exploitation of these vulnerabilities.” Those measures need to be applied ahead of every election, the advisory says, and it’s clear that’s not happening in all of the states that use the machines.

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That’s all?

Bill Barr Applauds Durham For Showing Truth On Clinton Campaign, FBI (JTN)

Former Attorney General Bill Barr defended special counsel John Durham after the acquittal of ex-Clinton Campaign attorney Michael Sussmann, saying the prosecutor was able to shed light on the Hillary Clinton campaign’s “dirty trick” with the disproven Trump-Russia scandal and the related problems at the FBI. “No, I’m very proud of John Durham, and I do take responsibility for his appointment, and I think he and his team did an exceptionally able job, both digging out very important facts and presenting a compelling case to the jury,” Barr told Fox News host Jesse Waters on Wednesday. After Sussmann was acquitted of lying to the FBI, the jury forewoman told reporters that the case was a waste of time. “I don’t think it should have been prosecuted,” she said, according to The Washington Times.


“There are bigger things that affect the nation than a possible lie to the FBI.” Durham told Waters that while Durham “did not succeed in getting a conviction from the D.C. jury, I think he accomplished something far more important, which is he brought out the truth in two important areas. “First, I think he crystalized the central role played by the Hillary campaign in launching, as a dirty trick, the whole Russiagate Collusion narrative and fanning the flames of it,” Barr explained. “And second, I think he exposed really dreadful behavior by the supervisors in the FBI… who knowingly used this information to start an investigation of [former President Donald] Trump and then duped their own agents by lying to them and refusing to tell them what the real source of that information was,” Barr said, adding, “And that was appalling.”

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“..not a single aspect of globalization has been spared from the fallout of new geopolitical conflicts..”

The Decline and Fall of Davos Man (PS)

“Davos Man” has had a grim 14 years. The late Harvard University political scientist Samuel P. Huntington popularized the term in 2004 to describe a new overclass of evangelists for globalization. Davos Man, he claimed, wanted to see national borders disappear and the logic of politics superseded by that of the market. But since the 2008 global financial crisis, politics has increasingly trumped economics, a trend that reached its apotheosis in 2016 with Donald Trump’s election in the United States and the Brexit referendum. Both events represented a backlash against Davos Man’s vision of a frictionless world governed (not run) as efficiently as possible by “multi-stakeholder processes.”

Moreover, at this year’s annual gathering in Davos, attendees had to confront an even bigger challenge than national politics: the return of geopolitics. The World Economic Forum’s theme was “History at a Turning Point,” in recognition of the fact that we have reached the end of the “end of history.” Although the WEF’s ethos is to promote cooperation in the pursuit of “one world,” the new agenda is necessarily focused on conflict and division. Russian President Vladimir Putin’s war of aggression on Ukraine obviously loomed large at this year’s meeting. To open the event, Ukrainian President Volodymyr Zelensky – appearing virtually in his now familiar military fatigues – spoke of a world split along the fault lines of fundamental values. And Russia House, the facility where Russian delegations hosted parties and networking events in years past, was transformed by Ukrainian activists and donors into the Russian War Crimes House, with an exhibition calling attention to Russian atrocities in Ukraine.

After browsing this year’s program, it soon became clear that not a single aspect of globalization has been spared from the fallout of new geopolitical conflicts – between Russia and the West, China and the West, China and its neighbors, and so forth. Instead of panels discussing free-trade agreements, there were multiple sessions on economic warfare. Political and business leaders grappled with the fact that we now live in a world where central-bank reserves can be confiscated, commercial banks can be summarily disconnected from the SWIFT international payments system, and private assets can potentially be seized to pay for a country’s reconstruction.

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Fertilization
https://twitter.com/i/status/1532366041115938816

 

 

Crazy dog
https://twitter.com/i/status/1385955664506150913

 

 

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Jun 302020
 
 June 30, 2020  Posted by at 10:37 am Finance Tagged with: , , , , , , , , , ,  36 Responses »


Pablo Picasso The dream 1951

 

China’s Military Becomes First To Use Experimental Coronavirus Vaccine (SCMP)
California, Texas See Record COVID-19 surges, Arizona Clamps Down (R.)
Norwegian Air Cancels 97 Boeing MAX And Dreamliners, Claims Compensation (R.)
Europe’s Recovery Fund: An Instrument of Class War (Varoufakis)
We Digitized the Mob, and There’s No Place to Hide (Miele)

 

 

As we approach the end of the first half of 2020, I’m seriously rethinking how to cover COVID19 going forward. The past five months have been intense in that regard, and at a certain point you need to wonder how useful such time-consuming work still is. For a long time I had the hope and belief that “we” would be able to halt the spread of the coronavirus, if only because that was -and is- the only sensible way to deal with a new pathogen about which very little is known, other than that it is potentially deadly.

But despite a huge number of actions, including lockdowns in many countries and societies, the infection numbers only keep rising. And at this point is is entirely unclear how countries like the US and Brazil will ever be able to get rid of the virus.

The consequences will be grave, albeit different in different places. We will see overwhelmed healthcare systems in some countries and states, while others will remain relatively unscathed, at least for a while. Ironically, in a world used to so much travelling it’s even useful to wonder what good it does to do a lockdown well. How long can New Zealand keep its borders closed?

As for healthcare, there was a report that it will take four years for the UK’s NHS to recover from COVID19, and that based on what they have experienced so far, while there is still plenty room for second or third waves, and/or any unforeseeable extra pressure.

Tourism as we’ve known it will never recover, at least not on a timescale that is meaningful to us. That whole industry needs a great reset. That is of course also true for airlines, plane manufacturers et al. As it is for the entire hospitality industry. People will be cautious when going out, the fear of infection rules supreme, as demonstrated again by this report from NBER, Fear, Lockdown, and Diversion, which shows it wasn’t the lockdowns that did the most damage.

This paper examines the drivers of the collapse using cellular phone records data on customer visits to more than 2.25 million individual businesses across 110 different industries. Comparing consumer behavior within the same commuting zones but across boundaries with different policy regimes suggests that legal shutdown orders account for only a modest share of the decline of economic activity (and that having county-level policy data is significantly more accurate than state-level data).


While overall consumer traffic fell by 60 percentage points, legal restrictions explain only 7 of that. Individual choices were far more important and seem tied to fears of infection. Traffic started dropping before the legal orders were in place; was highly tied to the number of COVID deaths in the county; and showed a clear shift by consumers away from larger/busier stores toward smaller/less busy ones in the same industry.

But I have to admit, over the past few days, when I was silent, I’ve become ever more worried by the American political and societal situation than by coronavirus. The images of people with guns standing outside of their homes, the stories of police and mob violence, shootings in “police-free” zones, it all starts to smell like a civil war.

While I wasn’t writing, I was reading all the more from both sides of aisle, and whatever they may still have had in common appears to disappear rapidly. The hunt for Trump continues unabated with yet another anonymous and unsourced tale about RussiaRussia, while the right is organizing to counter what they see as lawlessness across the nation.

Frank Miele, in a article below, quotes Bobby Kennedy, speaking after MLK was shot:

“The victims of the violence are black and white, rich and poor, young and old, famous and unknown. They are, most important of all, human beings whom other human beings loved and needed. No one — no matter where he lives or what he does — can be certain who will suffer from some senseless act of bloodshed. And yet it goes on and on. Why? What has violence ever accomplished? What has it ever created? … No wrongs have ever been righted by riots and civil disorders. … [A]n uncontrolled, uncontrollable mob is only the voice of madness, not the voice of the people.”

That sounds like a voice of reason that is sorely needed by the country right now. But does anyone see any of those? Ideally, Trump and Biden would get together on live TV to ask their supporters to please calm down. But I don’t see that happening in the present climate either. It’s become too polarized, fed by media and their business models.

I’m just trying to make sense of it all. Trying to find a way out of the mess, a way forward. But right now I’m mostly just thinking that Independence Day could turn into an incredibly messy affair. Or any other day between now and the election.

 

 

 

 

US has fifth day in a row with over 40,000 new cases

 

 

 

 

 

 

 

 

 

 

Key line: “The candidate is yet to start phase three trials, which would confirm whether it could protect recipients from infection.”

China’s Military Becomes First To Use Experimental Coronavirus Vaccine (SCMP)

China has approved military use of an experimental coronavirus vaccine developed by the People’s Liberation Army and a Chinese pharmaceutical company, in a first for the armed forces of any country. The vaccine, identified as Ad5-nCoV, was jointly developed by a team at the Academy of Military Medical Sciences, led by Major General Chen Wei, and Tianjin-based company CanSino Biologics. It is the first time that a vaccine candidate for Covid-19, the disease caused by the coronavirus, has been authorised for use for the military of any nation. CanSino said on Monday that the candidate had been through two phases of clinical trials, which indicated it was safe and there was “relatively high” immune response to the antigen.

The candidate is yet to start phase three trials, which would confirm whether it could protect recipients from infection. The military has approved its use for a year but it has not been authorised for civilian purposes. Adding Ad5-nCoV to the People’s Liberation Army’s catalogue of special drugs means that it can be deployed in major outbreaks. It is based on an Ebola vaccine that was developed by Chen but did not go into mass production. Scientists are racing to find an answer to the coronavirus that has already infected more than 10 million people and killed over 500,000. New cases continue to surge in the United States and India, with the US confirming more than 40,000 new cases for the third straight day on Monday.

According to the World Health Organisation, clinical trials are under way for 17 vaccine candidates, seven of which have been developed in China. One candidate developed by Oxford University and AstraZeneca is in phase three studies. Phase one and two studies typically test if a candidate is safe and whether it can generate an immune response from the recipients, but vaccines must complete all three sets of trials to be licensed. CanSino said it completed phase two trials on June 11, but the company has not yet released data from the study. [..] Many Chinese candidates are planning phase three trials in other countries as the spread of the coronavirus in China is too limited to test the efficacy of the vaccine. CanSino reached an agreement with Canadian government to conduct phase three trials there but details of the studies have not been revealed.

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We’ll see anti-police protests and anti-lockdown protests all at the same time.

California, Texas See Record COVID-19 surges, Arizona Clamps Down (R.)

California and Texas both marked record spikes in new COVID-19 infections on Monday, a Reuters tally showed, as Los Angeles reported an “alarming” one-day surge in America’s second-largest city that put it over 100,000 cases. Los Angeles has become a new epicenter in the pandemic as coronavirus cases and hospitalizations surge there despite California Governor Gavin Newsom’s strict orders requiring bars to close and residents to wear masks in nearly all public spaces. “The alarming increases in cases, positivity rates and hospitalizations signals that we, as a community, need to take immediate action to slow the spread of COVID-19,” Barbara Ferrer, director of public health for Los Angeles County, said in a statement announcing the sharp rise.


“Otherwise, we are quickly moving toward overwhelming our healthcare system and seeing even more devastating illness and death,” Ferrer said. Los Angeles Mayor Eric Garcetti announced a “hard pause” on when movie theaters, theme parks and other entertainment venues can reopen. Los Angeles County is the biggest movie theater market in the United States. Los Angeles County said its beaches will be closed for the Independence Day weekend and fireworks displays will be banned.

 

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is there a better example of the future of tourism?

Norwegian Air Cancels 97 Boeing MAX And Dreamliners, Claims Compensation (R.)

Norwegian Air has cancelled orders for 97 Boeing aircraft and will claim compensation from the U.S. plane maker for the grounding of the 737 MAX and for 787 engine troubles that hit its bottom line, the Oslo-based carrier said on Monday. The airline cancelled 92 of the 737 MAX jets, five 787 Dreamliners and so-called GoldCare service agreements related to both aircraft, just as Boeing on Monday began a crucial set of flight tests of the 737 MAX in an effort to gain regulatory approval for it to return to the skies.


“Norwegian has in addition filed a legal claim seeking the return of pre-delivery payments related to the aircraft and compensation for the company’s losses related to the grounding of the 737 MAX and engine issues on the 787,” the airline said. Norwegian did not specify the amount it would seek to claim from Boeing, which it had been in talks with about compensation, and was not immediately available for comment. Boeing said it was working with Norwegian on a path forward in a challenging time as it was with other operators but it would not comment on commercial discussions.

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Nothing has changed in Europe.

Europe’s Recovery Fund: An Instrument of Class War (Varoufakis)

Europe was never the battlefield on which the frugal North clashed with the profligate South. Instead, every European country has been the battlefield where a vicious class war is fought by a transnational oligarchy-without-frontiers training its armour against the weaker residents of every country, every region, every community. COVID-19, and the European Union’s response to it, only magnifies the human costs of this unremitting class war. All talk of a North-South clash is founded on a gigantic lie, that is based on many small truths, conveniently hiding from Europeans’ gaze the class war that diminishes their life prospects.

The crisis of financialisation in 2008 intensified Europe’s class war massively, holding a majority of Northern and Southern Europeans behind and leaving Europe, including its capitalist class, much weakened in relation to the rest of the world — the United States and China in particular. Twelve years on, COVID-19 gives this crisis a new, violent spin. The weak are weakened much, much more while Europe as a whole falls further and further behind the United States and China. While the EU’s leadership and bureaucracy have been quite active in the past three months, producing one impressive-sounding policy announcement after the next, the sum of their actions boost the class war that enfeebled Europe over the past decade and weakened a majority of Europeans everywhere.

[..] Rumours that Covid-19 caused the EU to lift its game are grossly exaggerated. Good people who took heart from the news that, however reluctantly, the EU has embraced common debt in a bid to further the cause of pan-european solidarity, will soon be deeply disappointed. Behind the heroic pronouncements and the triumphant propaganda lurks a sordid truth: The class war against Europe’s weaker people is escalating. And so is Europe’s descent into global irrelevance.

It all began with the quiet death of the Eurobond. Eurobonds, as advocated by DiEM25, would perform a simple task: They would automatically convert any new Italian, Spanish or Greek public debt (due to the impact of the pandemic on public revenues and expenses) into European debt (in the same way that US Treasury Bills absorb the costs of a recession in Missouri and Wisconsin). But, once the Eurobond was killed off by the Eurogroup in early April, it is now a given that the gigantic increase in national budget deficits will be followed by equally sizeable austerity in every country — a euphemism for the intensification of the class war that depletes the already atrophied incomes of the majority in each of our countries.

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Excellent piece, what ever side you’re on.

We Digitized the Mob, and There’s No Place to Hide (Miele)

The most shocking aspect of the wave of rioting and destruction that has been unleashed on many of our American cities in the wake of George Floyd’s death is not that there is an underlying discontent with the rate of progress in racial equality. That is understandable. What is not is the way that mayors, governors and members of Congress have not just tolerated, but endorsed, mob violence as an acceptable weapon of social change. Growing up in the turbulent 1960s, I was given a very specific warning by my mother: If you ever get caught up in a mob, get out of it as soon as possible because a mob has no brain. It just has emotion — and whether that emotion is anger, hatred or even joyful exuberance, it cannot be controlled.

We saw that in Minneapolis following the death of George Floyd while in police custody. People with a brain were outraged by what they saw. They wanted to protest, to speak out, and to demand justice. But when they came together in the streets, they discovered how quickly protest can transform into riot, and how demands for justice can be used to justify injustice. The basic premise of justice, after all, is recompense, making sure that wrongdoers pay a price for their crime. Yet there was no recompense in burning the businesses of innocent bystanders. There was no justice in stealing TVs and PlayStations. This was just brainless mob violence. It was shameful and it should have been easily condemned by the politicians, news media and celebrities who were not part of the mob.

That’s what would have happened in the 1960s. When Martin Luther King Jr. was murdered, leading to riots across America in 1968, Bobby Kennedy appealed for peace amidst “this mindless menace of violence in America which again stains our land and every one of our lives.” The parallel is exact. A black man is unjustly murdered. The nation is outraged. Riots ensue. The only part that is missing today is a respected grown-up like Kennedy who would condemn the violence and recognize that “[i]t is not the concern of any one race.” As Kennedy said,

“The victims of the violence are black and white, rich and poor, young and old, famous and unknown. They are, most important of all, human beings whom other human beings loved and needed. No one — no matter where he lives or what he does — can be certain who will suffer from some senseless act of bloodshed. And yet it goes on and on. Why? What has violence ever accomplished? What has it ever created? … No wrongs have ever been righted by riots and civil disorders. … [A]n uncontrolled, uncontrollable mob is only the voice of madness, not the voice of the people.”

What a refreshing expression of common sense, and what a contrast it offers to the bleating appeasers from the Democratic Party today who have bent a knee in obeisance to the mob, to the rioters, to the monument defacers, to the statue topplers. But it’s not just the Democrats who have bowed to the “voice of madness.” Most Republicans are right there with them. So too are corporate entities such as Intel and Amazon, and sporting organizations such as the NFL and NASCAR. For their part, news outlets such as CNN and MSNBC are promoting the riots and the cleansing of American history that is being pushed by Black Lives Matter. The question is why?

It is easy to understand why someone surrounded by the mob surrenders to its power, but those corporate boardrooms are far from the fray and well-protected from the torches and Molotov cocktails. So why have they turned their backs on law and order and embraced the mob? What has changed since the 1960s that makes it so much harder for leaders in government, business and culture to condemn violence and lawlessness? The answer will not surprise you, but it should scare you. Somewhere along the way, we digitized the mob. The few dozen people surrounding a statue are not the problem. The few hundred people confronting police are not the problem. The few thousand people looting stores and throwing rocks are not the problem. The mob on the street is not the problem. The mob on the street is the symptom.

The millions of people acting without moral restraint, without reason and without fear of consequences on the Internet are the problem. Indeed, the digital mob is the unintended consequence of the Internet itself. Connecting the world via technology was supposed to encourage communication, understanding and a breaking down of barriers. Instead it has resulted in a world divided into silos, special interests, identity groups. We tend to seek out those we have the most in common with and to block, ban or troll those who are unlike us. We feel safety in numbers, and from that safety is often bred outright contempt for those who think differently.

Read more …

 

 

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I’ll close today with a series of clips of an interview yesterday with Michael Fynn’s attorney Sidney Powell, who’s going to be an important voice in the run-up to November 3, whether you agree with her or not. Stay safe.

 

 

 

 

 

 

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Mar 012018
 
 March 1, 2018  Posted by at 11:03 am Finance Tagged with: , , , , , , , , , , ,  3 Responses »


Paramount Theater, Times Square NYC 1956

 

Donald Trump Stuns Allies By Signalling Backing For Tighter Gun Control (G.)
Members of Congress Are Petrified of The NRA, Says Trump (Ind.)
Where Did The Republican Trump-Haters Go? (BBC)
This Has Predicted Every Market Crash in History (Bonner)
US January Pending Home Sales Crash Most Since 2010 (ZH)
Hawk Or Dove? Fed’s Powell Showed Markets Both Sides In Debut (R.)
Trump Says US Will Use “All Available Tools” To Pressure China On Trade (BBG)
South Korea Cuts 68-Hour Working Week (G.)
John Major Tears Into Theresa May’s ‘Grand Folly’ Brexit Strategy (Ind.)
Russia Says US Is Training Europe To Use Nuclear Weapons Against It (CNBC)
American Hellenic Institute Urges Trump To Condemn Turkish Aggression (K.)
Greece Loosens Capital Controls, Raises Cash Withdrawal Limit (R.)
Greek Jan-Feb 2018 Retail Sales Down 8.8% y-o-y (K.)

 

 

I don’t normally like to open Debt Rattles with politics, but this leads the news.

Trump’s stance here should be a huge opening for Democrats, but it can’t be: they‘re too far gone in their demonizing of him. So if nothing happens -again- you’re going to have to wonder whose fault that is.

Note: a first reaction to a school shooting is easy, but you are talking fiddling with about the US constitution here.

Donald Trump Stuns Allies By Signalling Backing For Tighter Gun Control (G.)

Donald Trump has repeatedly endorsed a series of gun control proposals that put the Republican president at odds with the National Rifle Association and stunned lawmakers within his own party. The president made the remarks during an extraordinary, hour-long White House meeting on Wednesday with congressional Republicans and Democrats who are under pressure to address gun violence in the aftermath of the massacre at a Florida high school earlier this month. During the meeting, Trump called for a “beautiful” comprehensive bill that would expand background checks on gun purchases, remove guns from the hands of the mentally ill, bolster security on school campuses and restrict young people from purchasing certain weapons.

Within hours of the meeting’s conclusion, conservatives and some Republicans turned on Trump, who was elected with broad support from the gun lobby and claimed on Wednesday that the National Rifle Association had “no bigger fan”. Breitbart, the far-right news organization that fanned the flames of Trump’s rise, denounced the president as a “gun grabber” who “cedes” to Democrats. [..] Trump, who ran the meeting like a boardroom CEO, pointing at lawmakers for updates on their legislation, called on Congress to be “very strong” on background checks, repeatedly offering his support for a plan that failed to pass the Senate in April 2013, months after a gunman killed 20 young children and six staff members at Sandy Hook elementary school.

“You have to be very, very powerful on background checks. Don’t be shy,” Trump said during the televised session. He added: “I’d rather have you come down on the strong side than the weak side. The weak side is easier to do.” Two senators, Democrat Joe Manchin and Republican Pat Toomey, both of whom attended the meeting, plan to reintroduce their bill that would have imposed universal background checks for commercial gun purchases, including at gun shows and over the internet. 84% of Americans favor such a law [..] In a surprising exchange with Toomey, Trump asked if his measure included a provision to raise the age to buy assault weapons from 18 to 21. Toomey replied that it did not, and Trump shot back: “You know why? Because you’re afraid of the NRA.”

Trump rejected a demand by conservatives in the House that this so-called Fix Nics bill be paired with controversial concealed carry legislation, which is favoured by the NRA and would loosen restrictions by enabling gun owners with concealed-carry permits in their home states to take their firearms across state lines. “If you add concealed carry to this, you’ll never get it passed,” Trump told Steve Scalise, the House majority whip, who was last summer by a gunman targeting a congressional baseball practice. “Let it be a separate thing.” Trump repeatedly berated his Republican colleagues, accusing them of being afraid of the NRA, and appeared to take pleasure in stating his willingness to take on the gun lobby. “Some of you people are petrified of the NRA. You can’t be petrified,” he said.

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And they get their funding there.

Members of Congress Are Petrified of The NRA, Says Trump (Ind.)

President Donald Trump has accused members of Congress of being afraid of the National Rifle Association (NRA), as he called for an increase in the minimum age for buying a rifle. “[The NRA] has great power,” Mr Trump said at a bipartisan meeting with members of Congress on school safety. “They have great power over you people. They have less power over me. I don’t need it. What do I need? But I’ll tell you, they are well-meaning … We have to do what is right.” Members of Congress have again been anxious to find a solution to prevent mass shootings after an alleged 19-year-old gunman on Valentine’s Day open fired at Marjorie Stoneman Douglas high school in Florida, killing 17 people.

On the first day students of the school resumed their lessons following the shooting, several legislators gathered at the White House to discuss school safety and legislation aimed at combatting gun violence. One such proposal, drafted by Republican Senator Pat Toomey and Democratic Senator Joe Manchin, is primarily focused on expanding background checks for gun purchases. Mr Trump asked Mr Toomey about a proposal to raise the age limit for purchasing assault weapons from 18 to 21, a measure the NRA does not support.

“Now, this is not a popular thing in terms of the NRA, but I’m saying it anyway,” Mr Trump said. “Right now, you have to wait to buy a handgun until you’re 21, but you can buy the type of weapon used in a school shooting at 18. I can say the NRA is opposed to it… These are great patriots, they love our country, but that doesn’t mean we have to agree on it.” Mr Toomey said the age issue is not addressed in his bill with Mr Manchin. “You know why, because you’re afraid of the NRA,” the President responded.

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This fits in nicely with the gun issue. Scott “Dilbert” Adams’ view on Twitter: “Persuasion Phase 1 is complete. He’s coming for Democrats next.”

Where Did The Republican Trump-Haters Go? (BBC)

Once upon a time there was an active, vocal resistance among conservatives to the prospect of Donald Trump’s presidency. One year in, and the signs of dissent are rapidly fading. On Friday morning at the Conservative Political Action Conference on the outskirts of Washington, DC, Donald Trump took the stage and reminded the packed hall just how far he’d come. “Remember when I first started running?” the president asked. “People said, ‘Are you sure he’s a conservative?’ I think I proved I’m a conservative.” Mr Trump then launched into nearly an hour and a half of his trademark campaign-style oratory, often acknowledging that he was deviating from his “boring” speech text. On script and off, however, it was clear his intended objective was to drive home the point that he has governed as a true conservative.

He boasted of his tax cuts, right-wing judicial nominations, regulatory rollbacks and defence of religious liberty. Those are the sort of accomplishments attendees of this annual conference of young Republicans, grassroots activists, party functionaries, conservative media pundits, assorted merchants and special interests longed for through eight years of the Obama presidency, and now they’re getting. That’s got to make them thrilled, right? Well, sort of. According to straw poll of conference attendees, 93% approve of the job Mr Trump is doing in the White House. It’s a number not too far from the 80% of Republicans across the US who continue to tell pollsters they support the president. That, as the president acknowledged, was not always the case.

In 2016 – at the beginning of his long march to the Republican nomination and the presidency, Mr Trump abruptly cancelled an appearance at Cpac when faced with the prospect of a walkout from “never-Trump” conservatives. [A 2015] straw poll had Mr Trump as the presidential pick of just 3.5% of attendees, in eighth place, far behind libertarian-leaning Senator Rand Paul’s 25.7%. Another Republican presidential hopeful at that conference, former Texas Governor Rick Perry, would just a handful of months later describe Mr Trump’s politics as “a toxic mix of demagoguery and mean-spiritedness and nonsense” and call his candidacy a “cancer on conservatism”. Last week, Mr Perry – now Mr Trump’s energy secretary – was back at Cpac, referring to himself as “footsoldier in the army”. Donald Trump’s army, that is.

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Should that say “predicted after the fact”? (From Bill Bonner, Mish and Semper Augustus)

This Has Predicted Every Market Crash in History (Bonner)

“Buy the dip” has worked for the last 38 years. And now, investors are more than 100% convinced that it will work again. But they are wrong. Semper Augustus: “Every major stock market decline and every recession in the last 100 years was preceded by the Federal Reserve raising short-term interest rates by enough to provide the pin to prick the balloon. Note the emphasis on every. Yes, there have been periods where the Fed raised rates and a recession didn’t ensue. Everyone knows the famous saying about the stock market having predicted nine of the past five recessions! That may be true, that rising rates don’t necessarily cause a recession. But as an investor, you must be aware that every major stock market decline occurred on the heels of a tightening phase by the Fed. More importantly, there have been no substantive Fed tightening phases that did not end with a stock market decline”.


Going back to 1950, every U.S. recession (gray shaded area) has been preceded by the Fed hiking interest rates

A little debt may be a good thing; a lot of it is not. At a certain point, you have more than “too much debt,” and it becomes toxic. Where exactly in the cycle we are, we don’t know. But our guess is we are already way beyond the place where we are fully indebted. This is an economy built on debt. The whole capital structure – stocks, bonds, and real estate – now depends on excess debt… and more of it. In a correction, the only way to stop stock prices from falling and the economy from shrinking is to bring in some more debt. But when you do that a few times, you are soon beyond Peak Debt… which is to say, you’re way over the legal limit.

Debt has been growing three to six times faster than income for more than an entire generation. This makes the old 1.5-to-1 ratio of debt to income seem quaint. It is now 3.5-to-1 nationwide. Which is why deficits still matter. Every penny in debt that we add now is a penny that cannot be repaid, not by any plausible combination of economic projections. Because there is no way to “grow your way out of debt” when your income is falling while your debt is still increasing. Instead, you have to suffer the indignities of a correction, including a major reset in the stock market. That’s what happens when stocks that are more than fully priced meet a debt load that is beyond 100% of capacity.

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As noted earlier, new home sales were down 33.3% in the northeast. Pending home sales feel by 9% there.

US January Pending Home Sales Crash Most Since 2010 (ZH)

After New- and Existing-Home-Sales have already disappointed, Pending Home-Sales just collapsed too (to the lowest since Oct 2014) to confirm January was a bloodbath for the real estate market. Pending Home Sales plunged 4.7% in January (massively below the 0.5% expected rise in sales) – this is the biggest drop since May 2010. Year-over-year Pending home sales are down 1.7%. Purchases fell 9% in the Northeast, 6.6% in the Midwest, 3.9% in the South and 1.2% in the West.

NAR is desperate to convince home-buyers and sellers that this is nothing but an inventory issue, but it is affordability that is the real driver here. “There’s little doubt last month’s retreat in contract signings occurred because of woefully low supply levels and the sudden increase in mortgage rates,” Lawrence Yun, NAR’s chief economist, said in a statement. “With the cost of buying a home getting more expensive and not enough inventory, some prospective buyers are either waiting until listings increase come spring or now having to delay their search entirely to save up for a larger down payment.” So, will higher rates break housing market momentum? The following chart suggest ‘yes’ – that surge in rates will have a direct impact on home sales (or prices will be forced to adjust lower) as affordability collapses…

And Homebuilder stocks are starting to look a lot less invincible…

As Bloomberg notes, economists consider pending sales a leading indicator because they track contract signings; purchases of existing homes are tabulated when a deal closes, typically a month or two later.

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Something for everyone. Useless.

Hawk Or Dove? Fed’s Powell Showed Markets Both Sides In Debut (R.)

Financial markets barely batted an eye on Tuesday when Jerome Powell’s first public statement as Federal Reserve chief saw daylight, interpreting it as a steady-handed commitment to the U.S. central bank’s policy of gradual interest rate increases. The calm evaporated about a couple of hours later, at 10:42 a.m. EST, when Powell, testifying before a U.S. House of Representatives committee, struck a bullish, and personal, tone on the strength of the economy. U.S. bond yields jumped as investors raised their bets for four rate increases this year, rather than the three that Fed policymakers projected in late December, and began asking one key question: Is a hawk or a dove now running the Fed?

“The message coming from the written portion of the testimony did not signal any change,” analysts from Barclays wrote on Tuesday, drawing a contrast with Powell’s live remarks that “point to a risk of a steeper policy rate path.” Fed policymakers consider their public statements an important tool in shaping public perceptions and, in doing so, making monetary policy more effective. Fed chiefs try to avoid off-the-cuff remarks that cause impromptu repricing, preferring to hew close to their job of representing the views of the Fed’s rate-setting committee and avoiding disclosing much about their personal opinions. Veteran Fed analysts were split over whether Powell had broken that unwritten rule in his remarks, which came just weeks after he took over from Janet Yellen.

“The tone of the testimony was definitely NOT hawkish,” said Cornerstone Macro economist and former Fed staffer Roberto Perli, who emphasized Powell’s written comments might be read as a willingness to allow the economy to run hot in order to boost inflation to the Fed’s 2% target on a sustained basis. “Powell more confident on growth, putting 2018 dots in play,” is how JP Morgan’s Michael Feroli summed up the day, referring to the quarterly “dot plot” of projected interest rates that Fed policymakers submit. Feroli argued that Powell’s “modestly hawkish” appearance in Congress strengthened the chance that policymakers’ rate outlook would rise when the central bank issues its next set of economic projections next month.

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Xi advocating against protectionism is a keeper.

Trump Says US Will Use “All Available Tools” To Pressure China On Trade (BBG)

President Donald Trump is warning the U.S. will use “all available tools” to prevent China’s state-driven economic model from undermining global competition, the latest warning to Beijing as America readies a host of trade actions. China hasn’t lived up to the promises of economic reforms it made when it joined the World Trade Organization in 2001, and actually appears to be moving further away from “market principles” in recent years, according to the president’s annual report to Congress on his trade-policy agenda. China’s “statist” policies are causing a “dramatic misallocation” of global resources that is leaving all countries poorer than they should be, said the report. Chinese President Xi Jinping has dispatched one of his top economic advisers, Liu He, this week to Washington to meet with senior administration officials amid signs of growing tension between the world’s two biggest economies.

“China is free to pursue whatever trade policy it prefers. But the United States, as a sovereign nation, is free to respond,” according to the report, which is prepared by the U.S. Trade Representative’s office. Xi has called for countries to avoid protectionism and stick to the current path of globalization. At the same time, Chinese officials are weighing raising tariffs on U.S. soybeans as tensions escalate. Trump’s warning comes as his administration considers a range of actions either directly aimed at China, or that could impact the Asian power. The president is weighing several options for curbing imports of steel and aluminum, and Trump has told confidants he’s considering a global tariff on steel of 24%, the most punitive alternative recommended by his officials. The administration is ready to act unilaterally if necessary to fight unfair trading practices, according to trade report.

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Well, it did get them the Olympics…

South Korea Cuts 68-Hour Working Week (G.)

Employees in one of the most overworked countries in Asia are about to get a break after South Korea passed a bill to reduce the typical work week in an effort to improve quality of life and boost employment. South Korea’s National Assembly overwhelmingly passed the law which cut the maximum weekly work hours to 52, down from 68. The law comes into force in July and will apply to large companies before being rolled out to smaller businesses. The cut was a campaign promise by President Moon Jae-in, who also secured a 16% increase in the minimum wage this year. The law faced opposition from businesses but was seen as necessary to improve living standards, create more jobs and boost productivity. It is also aimed at increasing the country’s birth rate, which hit record lows last year.

As South Korea’s economy boomed in the 80s and 90s, a workaholic culture took hold and the birth rate plummeted. Chung Hyun-back, the gender equality and family minister, has called the country’s working hours “inhumanely long” and said they were a factor in the South’s rapidly ageing society. South Koreans workers have some of the longest weeks in the developing world, behind only Mexico, according to data from the Organisation for Economic Co-operation and Development. The group of mostly developed economies does not include countries such as China and India, and developing countries tend to work more. But South Koreans still work about 400 more hours a year compared with workers in the UK and Australia, about 10 additional standard work weeks, despite having relatively similar average incomes.

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Just as she tries to strike a defiant pose…

John Major Tears Into Theresa May’s ‘Grand Folly’ Brexit Strategy (Ind.)

Former Conservative leader John Major has launched a devastating attack on Theresa May’s approach to Brexit, just 48 hours before the Prime Minister sets out her plans for future relations with the EU. In a significant intervention, Mr Major tore into Ms May’s negotiating red lines as “bad politics” and “grand folly” dictated by “ultra Brexiteers”. He demanded MPs be freed from the party whip and allowed to vote with their conscience on her final deal, and said Britain may need a second referendum to avoid years of damaging rows over Brexit. His explosive speech sparked a ferocious backlash from Tories that back hard Brexit, with one saying his arguments were “grubbing around in the weeds”.

The surgically timed intervention comes as Ms May prepares to reveal the final text of her next big Brexit speech to the Cabinet, before meeting European Council president Donald Tusk in Downing Street on Thursday. Mr Major’s intervention also appears to have been choreographed with another speech from ex-prime minister Tony Blair in Brussels on Thursday, in which the ex-Labour leader will address European politicians on Brexit. When the ex-Tory leader stood to make his speech on Wednesday, Ms May had already locked horns with Brussels negotiators who had in the morning published what she called an “unacceptable” draft withdrawal agreement.

Despite Ms May having repeatedly claimed she settled the withdrawal agreement last year, she argued in the Commons that a new draft had crossed her Brexit red lines. It was those very “red lines” that Mr Major took aim at when he began talking in London minutes later, claiming they had “boxed” Ms May in. He said: “They are so tilted to ultra-Brexit opinion, even the Cabinet cannot agree them – and a majority in both Houses of Parliament oppose them. “If maintained in full, it will be impossible to reach a favourable trade outcome.”

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The western press will simply continue to claim that Russia’s the aggressor, not NATO or the US. Case solved.

Russia Says US Is Training Europe To Use Nuclear Weapons Against It (CNBC)

Russian Foreign Minister Sergei Lavrov said Wednesday that the U.S. was still deploying “strategic arms” in Europe and was training European countries to use nuclear weapons, violating a major nuclear arms agreement called the Non-Proliferation Treaty (NPT). Lavrov said that nuclear disarmament was impossible without taking into account factors which destabilize “strategic stability and international security today,” including, he said, “the deployment of a global anti-missile system” and “the deployment of U.S. strategic arms in Europe and the continuing destabilizing practice of ‘joint nuclear missions,’ as they call them.” “As we all know, these nuclear missions violate the Non-Proliferation Treaty and non-nuclear states plan and take part in the U.S. exercises and learn how to use the nuclear weapons,” he said.

For its part, he said Russia had reduced its nuclear arsenal by 85% compared to the Cold War era. The Russian Foreign Ministry has complained about what it calls “joint nuclear missions” and says the U.S. has many nuclear weapons located in Europe. It also says the U.S. is training European countries to use these weapons. Last April, the foreign ministry issued a statement in which it said that “Washington’s approach to compliance with its obligations under the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) is still of great concern. The U.S. and its non-nuclear NATO allies continue their nuclear skill training as part of the so-called “nuclear sharing”,” it said.

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But Merkel wants her refugee treaty. Or she’s done.

American Hellenic Institute Urges Trump To Condemn Turkish Aggression (K.)

The American Hellenic Institute (AHI) sent a letter to US President Donald J. Trump in the wake of acts of Turkish provocation and aggression in the eastern Mediterranean and broader region that have dire implications to American security interests. In the February 27 letter, AHI President Nick Larigakis requests President Trump to condemn strongly Turkish aggression and acts of provocations that have been directed at the United States, Greece, Cyprus, and international oil and gas companies – all of which have occurred in the month of February.

Larigakis cites: a Turkish coastguard vessel colliding with a stationary Greek coastguard vessel, the harassment of Italian oil company Eni’s surveying vessel by Turkish warships, which threatened to sink Eni’s surveying vessel because it was on its way to survey for energy resources in the exclusive economic zone of Cyprus; and Turkish President Erdogan’s threat of an “Ottoman slap” to United States military forces if they continued to partner with Syrian Kurds in Syria.

In addition, Larigakis raised the concern among NATO allies about Turkey’s purchase of four divisions of S-400 missiles from Russia and how it potentially subjects Turkey to US sanctions. “Turkey’s aggressive and provocative actions directed at the United States and U.S. allies, Greece and Cyprus, are overt, egregious and dangerous. I urge the administration to act to uphold the rule of law and to call on Turkey, the provocateur of these tensions, to cease and desist with its aggressive actions that are a threat to peace and stability and are not in the best interests of the United States,” Larigakis concludes.

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Just about nobody has that kind of cash to withdraw anymore. Thanks a lot.

Greece Loosens Capital Controls, Raises Cash Withdrawal Limit (R.)

Greece on Wednesday moved to ease capital restrictions imposed since the summer of 2015, raising the monthly limit of cash that can be withdrawn from bank accounts by 28%. Athens first imposed capital controls in July 2015 to stem a flight of cash from its banks at the height of a debt crisis which led to its third financial bailout since 2010. Based on a finance ministry decree published in the government’s gazette, individuals will be allowed to withdraw lump sums of up to 2,300 euros in cash per month from bank accounts from 1,800 euros currently, effective from March 1.

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Just imagine the added job losses that come with this. And still, as I keep on saying, things can still only get worse from here.

Greek Jan-Feb 2018 Retail Sales Down 8.8% y-o-y, Up To 20% In Cities (K.)

Retail sales in the first two months of the year were down some half a billion euros on the same period in 2017, as households were left with less spending money after their Christmas shopping and purchases made during the Black Friday promotional event at the end of November. According to a survey conducted by the Hellenic Confederation of Commerce and Enterprises (ESEE), retail turnover declined this past January and February by 8.8% compared to 2017. In absolute figures, this reduction translates into the loss of 484 million euros, with turnover up until Wednesday amounting to 5.02 billion, against 5.5 billion in January-February 2017.

In certain areas of the country the drop in sales turnover in the first two months of the year reached up to 40%, while out of Greece’s 65 traders’ associations, only one reported an increase from last year. In the cities of Athens and Thessaloniki, sales declined between 11 and 20% year-on-year. The ESEE survey showed that one in three enterprises offered discounts of between 21 and 40%, while two out of five offered discounts in excess of 40%.

Read more …

Apr 072017
 


Fred Stein Times Square at Night 1947

 

Eyewitness Says Syrian Military Anticipated US Raid (ABC)
The Biggest Stock Bubble In US History (IRD)
The Unavoidable Pension Crisis (Roberts)
Americans Are Taking Out The Largest Mortgages On Record (MW)
Global Debt Explodes At ‘Eye-Watering’ Pace To Hit £170 Trillion (Tel.)
Wall Street Doubts Trump Wants to Split Up Biggest US Banks (BBG)
Fed’s Asset Shift To Pose New Test Of Economy’s Recovery, Resilience (R.)
M5S Plans To ‘Revolutionize Democracy’ With Online Voting, E-petitions (LI)
Arms Sales Becoming France’s New El Dorado, But At What Cost? (F24)
Guns Are The True Cause Of Hunger And Famine (G.)
Greece’s Dark Age: How Austerity Turned Off The Lights (R.)
On Dimitris Christoulas: ‘He Is A Part Of History Now’ (AlJ)

 

 

“I think Secretary of Defense [General] James Mattis gave the president a list of options, this being the smallest…”

Eyewitness Says Syrian Military Anticipated US Raid (ABC)

Syrian military officials appeared to anticipate Thursday’s night raid on Syria’s Shayrat airbase, evacuating personnel and moving equipment ahead of the strike, according to an eyewitness to the strike. Dozens of Tomahawk missiles struck the airbase near Homs damaging runways, towers and traffic control buildings, a local resident and human rights activist living near the airbase told ABC News via an interpreter. U.S. officals believe the plane that dropped chemical weapons on civilians in Idlib Province on Tuesday, which according to the Syrian Observatory for Human Rights killed 86 people, took off from the Shayrat airbase. The attack lasted approximately 35 minutes and its impact was felt across the city, shaking houses and sending those inside them fleeing from their windows. Both of the airport’s major runways were struck by missiles, and some of its 40 fortified bunkers were also damaged.

Local residents say the Russian military had used the airbase in early 2016 but have since withdrawn their officers, so the base is now mainly operated by Syrian and Iranian military officers. There is also a hotel near the airport where Iranian officers have been staying, though it was not clear whether it was damaged. The eyewitness believes human casualties, at least within the civilian population, were minimal, as there was no traffic heading toward the local hospital. [..] Former National Security Adviser and ABC News contributor Richard Clarke said this attack, one of the quickest displays of force by a new president in recent history, is largely “symbolic.”

Following a 2013 chemical weapons attack that killed more than 1400 people outside of Damascus which a U.S. government intelligence assessment concluded likely used a nerve agent, the Obama administration threatened retaliation but ultimately called off planned airstrikes after Assad agreed to turn over the majority of his chemical weapons arsenal to an international watchdog group. Trump has attempted to blame Obama’s “weakness” for the worsening violence in Syria. “This attack on one air base seems more symbolic,” Clarke said. “I think Secretary of Defense [General] James Mattis gave the president a list of options, this being the smallest. It was a targeted attack not designed to overwhelm the Syrian military … I think the president was trying to differentiate himself from his predecessor.”

Read more …

“Tesla has never made money and never will make money. Next to Amazon, it’s the biggest Ponzi scheme in U.S. history.”

The Biggest Stock Bubble In US History (IRD)

Please note, many will argue that the p/e ratio on the S&P 500 was higher in 1999 than it is now. However, there’s two problems with the comparison. First, when there is no “e,” price does not matter. Many of the tech stocks in the SPX in 1999 did not have any earnings and never had a chance to produce earnings because many of them went out of business. However – and I’ve been saying this for quite some time and I’m finally seeing a few others make the same assertion – if you adjust the current earnings of the companies in SPX using the GAAP accounting standards in force in 1999, the current earnings in aggregate would likely be cut at least in half. And thus, the current p/e ratio expressed in 1999 earnings terms likely would be at least as high as the p/e ratio in 1999, if not higher. (Changes to GAAP have made it easier for companies to create non-cash earnings, reclassify and capitalize expenses, stretch out depreciation and pension funding costs, etc).

We talk about the tech bubble that fomented in the late 1990’s that resulted in an 85% (roughly) decline on the NASDAQ. Currently the five highest valued stocks by market cap are tech stocks: AAPL, GOOG, MSFT, AMZN and FB. Combined, these five stocks make-up nearly 10% of the total value of the entire stock market. Money from the public poured into ETFs at record pace in February. The majority of it into S&P 500 ETFs which then have to put that money proportionately by market value into each of the S&P 500 stocks. Thus when cash pours into SPX funds like this, a large rise in the the top five stocks by market cap listed above becomes a self-fulfilling prophecy. The price rise in these stocks has nothing remotely to do with fundamentals. Take Microsoft, for example (MSFT). Last Friday the pom-poms were waving on Fox Business because MSFT hit an all-time high.

This is in spite of the fact that MSFT’s revenues dropped 8.8% from 2015 to 2016 and its gross margin plunged 13.2%. So much for fundamentals. In addition to the onslaught of retail cash moving blindly into stocks, margin debt on the NYSE hit an all-time high in February. Both the cash flow and margin debt statistics are flashing a big red warning signal, as this only occurs when the public becomes blind to risk and and bet that stocks can only go up. As I’ve said before, this is by far the most dangerous stock market in my professional lifetime (32 years, not including my high years spent reading my father’s Wall Street Journal everyday and playing penny stocks).

Perhaps the loudest bell ringing and signaling a top is the market’s valuation of Tesla. On Monday the market cap of Tesla ($49 billion) surpassed Ford’s market cap ($45 billion) despite the fact that Tesla delivered 79 thousand cars in 2016 while Ford delivered 2.6 million. “Electric Jeff” (as a good friend of mine calls Elon Musk, in reference to Jeff Bezos) was on Twitter Monday taunting short sellers. At best his behavior can be called “gauche.” Musk, similar to Bezos, is a masterful stock operator. Jordan Belfort (the “Wolf of Wall Street”) was a small-time dime store thief compared to Musk and Bezos. Tesla has never made money and never will make money. Next to Amazon, it’s the biggest Ponzi scheme in U.S. history. Without the massive tax credits given to the first 200,000 buyers of Tesla vehicles, the Company would likely be out of business by now.

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And to think even without demographics pensions look screwed too, just from financial engineering and insane debt levels.

The Unavoidable Pension Crisis (Roberts)

There is a really big crisis coming. Think about it this way. After 8 years and a 230% stock market advance the pension funds of Dallas, Chicago, and Houston are in severe trouble. But it isn’t just these municipalities that are in trouble, but also most of the public and private pensions that still operate in the country today. Currently, many pension funds, like the one in Houston, are scrambling to slightly lower return rates, issue debt, raise taxes or increase contribution limits to fill some of the gaping holes of underfunded liabilities in their plans. The hope is such measures combined with an ongoing bull market, and increased participant contributions, will heal the plans in the future. This is not likely to be the case. This problem is not something born of the last “financial crisis,” but rather the culmination of 20-plus years of financial mismanagement.

An April 2016 Moody’s analysis pegged the total 75-year unfunded liability for all state and local pension plans at $3.5 trillion. That’s the amount not covered by current fund assets, future expected contributions, and investment returns at assumed rates ranging from 3.7% to 4.1%. Another calculation from the American Enterprise Institute comes up with $5.2 trillion, presuming that long-term bond yields average 2.6%. With employee contribution requirements extremely low, averaging about 15% of payroll, the need to stretch for higher rates of return have put pensions in a precarious position and increases the underfunded status of pensions. With pension funds already wrestling with largely underfunded liabilities, the shifting demographics are further complicating funding problems.

One of the primary problems continues to be the decline in the ratio of workers per retiree as retirees are living longer (increasing the relative number of retirees), and lower birth rates (decreasing the relative number of workers.) However, this “support ratio” is not only declining in the U.S. but also in much of the developed world. This is due to two demographic factors: increased life expectancy coupled with a fixed retirement age, and a decrease in the fertility rate. In 1950, there were 7.2 people aged 20–64 for every person of 65 or over in the OECD countries. By 1980, the support ratio dropped to 5.1 and by 2010 it was 4.1. It is projected to reach just 2.1 by 2050. The table below shows support ratios for selected countries in 1970, 2010, and projected for 2050:

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Happy days!

Americans Are Taking Out The Largest Mortgages On Record (MW)

For the past few years, the housing market has been unbalanced. Strong demand and lean supply keep pushing prices higher and higher. On Wednesday, a fresh piece of data confirmed that trend. The Mortgage Bankers Association’s weekly purchase loan data showed that the average size of a home loan was the largest in the history of its survey, which goes back to 1990. Higher prices have a few different effects on the market. Buyers have to make tradeoffs on the kinds of homes they can afford, or may be shut out of ownership altogether. They may also adjust their borrowing. Larger mortgage sizes may reflect not just more expensive properties, but also more leveraged ones.

The 20% down payment is a relic: the median down payment in 2016 was 10%. For first-time buyers, it was 6%. First-timers and other buyers of less-expensive homes are more leveraged now than they were at the height of the housing bubble a decade ago. Home loan sizes aren’t the only things that have changed in the years since MBA started its survey. Back at the start of the survey, the median mortgage size was only about 3.3 times the median annual income. It’s now over five times as big – though buyers get bigger homes and lower interest rates.

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Over $70 trillion since 2008.

Global Debt Explodes At ‘Eye-Watering’ Pace To Hit £170 Trillion (Tel.)

Global debt has climbed at an “eye-watering” pace over the past decade, soaring to a fresh high of £170 trillion last year, according to the Institute of International Finance (IIF). The IIF said total debt levels, including household, government and corporate debt, climbed by more than $70 trillion over the last 10 years to a record high of $215 trillion (£173 trillion) in 2016 – or the equivalent of 325pc of GDP. It said emerging markets posed “a growing source of concern” to financial stability and the global economy as debt burdens in these countries climb at a rapid pace. The IIF data showed the increase was partly driven by a “spectacular rise” in emerging markets, where total debt stood at $55 trillion at the end of 2016, or 215pc of total emerging market GDP.

Debt has risen from $16 trillion in 2006 and $7.4 trillion in 1996. The body, which represents the world’s top financial institutions, said a wave of maturing debt this year presented a “growing refinancing risk”. It estimates that more than $1.1 trillion of emerging market bonds and loans will mature this year, with dollar-denominated debt accounting for a fifth of all redemptions. It said China faced around $40bn of dollar-denominated redemptions this year, while Russia faced redemptions of $20bn. International bodies including the IMF and OECD have warned that rising interest rates in the US could bring an end to an emerging market corporate debt binge as companies in these countries see their debt servicing costs rise in local currency terms. “While risks associated with currency mismatches may not be as acute as during past emerging market debt crises, the overall emerging market debt burden – particularly as global interest rates head higher – is a growing source of concern,” the IIF said in a note.

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Goldman is not a consumer bank. They might actually profit from this.

Wall Street Doubts Trump Wants to Split Up Biggest US Banks (BBG)

President Donald Trump and his advisers have vowed to bring back a Depression-era law that would cleave the biggest U.S. lenders in half by separating commercial and investment banking operations. Wall Street doesn’t expect that to happen. After chief economic adviser Gary Cohn reiterated the administration’s stance toward the Glass-Steagall Act in a private meeting with lawmakers on Wednesday, analysts said they viewed any radical regulatory changes as unlikely. Shares of Bank of America and JPMorgan Chase, which would be most affected by the rule, rose Thursday after Bloomberg first reported on Cohn’s comments. Reinstating Glass-Steagall, which was created after the banking crises of the 1930s and repealed in 1999, would require a rewriting of U.S. banking rules. The Dodd-Frank Act took more than a year of work by Congress.

The Trump administration hasn’t put forward a detailed plan and the revisions proposed by House Republicans don’t involve the return of Glass-Steagall. “Anything resembling Glass-Steagall is so far from happening that it’s hard to envision,” said Ian Katz, an analyst at Capital Alpha. “It simply isn’t a priority issue in Congress.” The Republicans who control the House and the Senate want to loosen banking regulations, not make them stricter, Katz wrote. The Republican Party made restoring Glass-Steagall part of its platform, and Trump sometimes criticized the big banks during the campaign, saying “I’m not going to let Wall Street get away with murder.” Since taking office, he’s appointed Cohn and several other former Goldman Sachs bankers to top posts, and said that he’ll look to JPMorgan CEO Jamie Dimon for advice about regulatory reform.

Treasury Secretary Steven Mnuchin said during his confirmation hearing that he opposes the old Glass-Steagall, but supports a “21st Century” version. He didn’t elaborate on what he meant. “If you’ve listened to all the rhetoric on regulation, we’ve no real guidance on where we are going,” said Christopher Wheeler, an Atlantic Equities analyst in London. “The uncertainty is immense and what you have to believe is that things will continue as they are.” The regulation might not mean that commercial and investment banks have to be separated, Cowen Group analyst Jaret Seiberg wrote in a report. Instead, the government could require that broker-dealers be subsidiaries of holding companies, rather than banks, he said. That would mean that the brokerage arm would have to be separately funded. “Cohn was the most likely obstacle within the Trump White House,” Seiberg wrote. “With him supporting Glass-Steagall’s restoration, there is no one in the inner circle left to fight it.”

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More uncharted territory. We tend to forget, but for 10 years now they’re grasping in the dark. They have no idea what they do, all they have to go on are outdated textbooks that were flawed to begin with. Time to audit the Fed and then close it.

Fed’s Asset Shift To Pose New Test Of Economy’s Recovery, Resilience (R.)

The Federal Reserve’s coming decision to reduce its massive asset holdings will set off a complex dance with global investors and the U.S. Treasury as it tries to put a final end to policies used to fight the 2007 financial crisis without upending the economy along the way. It is a feat with no clear precedent, according to analysts and officials involved in the process: a central bank trying to squeeze trillions of dollars out of markets it has supported for a decade, and in the process likely pushing up the cost of home buying, corporate finance and an array of other activities. Though final decisions have not been made, the Fed may shift policy as soon as the end of this year, and over 2018 begin pulling anywhere from $20 billion to $60 billion a month out of bond markets, according to a review of current Fed asset holdings.

For several years during the crisis, the Fed added to its holdings of U.S. Treasury bonds and securities backed by home mortgages to the tune of $85 billion a month before the program was slowed. The purchases were an emergency measure made necessary because the Fed’s short-term interest rate – its primary tool to encourage people and businesses to spend and invest – had already been cut to zero. With the economy still in freefall, the asset purchases added to demand for financial securities, and are thought to have held down long-term interest rates in general, a boost to the home-building and other industries in particular. The central bank is already raising its short-term interest rate and has managed a series of increases without slowing the economy. When it starts to scale back the size of its $4.5 trillion stockpile of Treasury bonds and mortgage-backed securities – essentially reversing the purchases it made during the crisis – it will pose a stiff new test of the economy’s resilience.

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This was always the plan. Use technology to strengthen democracy.

M5S Plans To ‘Revolutionize Democracy’ With Online Voting, E-petitions (LI)

Italy’s anti-establishment Five Star Movement party plans to introduce online voting and public referendums to increase “democracy and transparency” in the country’s capital. Five Star councillors presented the draft resolution at Rome’s city hall on Monday, where it will be debated. They claimed the proposed ideas would take the city “from Mafia Capitale [the ongoing corruption scandal which has seen dozens of Rome politicians and businessmen put on trial] to direct democracy and transparency in five years”. The ideas suggested included online consultations and participatory budgeting. The latter process would give citizens more say in how Rome money is spent, and has already been introduced by Five Star-led local authorities in some areas, including Mira and Ragusa.

In a blog post, leader Beppe Grillo said that within a year, a Five Star government would introduce public petitions which can be created online and sent directly to the Italian parliament for discussion – a system which already exists in the UK, for example. “It should be the citizens and the local community who govern cities through the Internet, using collective intelligence,” said Grillo. “The web is revolutionizing the relationship between citizens and institutions making direct democracy feasible, as applied in ancient Greece.” Angelo Sturni, one of the councillors behind the proposal, said: “We also want to experiment with electronic voting in referendums, using the American model.” Discontent over widespread corruption in Rome, as revealed in the Mafia Capitale trial, was one of the main factors in Five Star candidate Virginia Raggi’s victory in mayoral elections last June.

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UK, France, Germany, Holland, Belgium: merchants of death. Government sponsored murder.

Arms Sales Becoming France’s New El Dorado, But At What Cost? (F24)

When Qatar agreed to buy 24 French Rafale fighter jets in a €6.3 billion contract at the end of April, it represented yet another major success for France’s arms industry, coming hot on the heels of further multi-billion euro sales of Rafales to Egypt and India. The deals have been hailed by Hollande and his government. According to France’s Minister of Defence Jean-Yves Le Drian, in comments made to the Journal du Dimanche newspaper Sunday, the Qatar contract brought the value of the country’s arms exports to more than €15 billion this year so far. That sum is already more than the €8.06 billion for the whole of 2014, which itself was the highest level seen since 2009 – suggesting a continued upward trajectory for the French arms trade and one that is providing a much-needed salve to the country’s economic woes.

But some of these deals have raised more than a few eyebrows, with anti-arms trade campaigners critical of France’s willingness to sell weapons to countries with less than stellar human rights records. These concerns are only set to rise when Hollande heads first to Doha on Monday and then Saudi Arabia’s capital of Riyadh the day after, where furthering the recent success of the French arms industry is likely to be one of his top priorities. Saudi Arabia has already proved a lucrative trading partner for French arms manufacturers, most recently in a deal signed in November that saw the kingdom buy $3 billion-worth (€2.7 billion) of French weapons and military equipment to supply the Lebanese army. The oil-rich country is currently on something of an arms spending spree. Last year, the Saudis surpassed India to become the world’s biggest arms importer, upping its spending by 54% to €5.8 billion, according to a report by industry analyst IHS.

France, thanks to some adept diplomatic manoeuvering in recent years, is well placed to take advantage of the Saudi cash cow. Paris has been an increasingly close ally of Riyadh ever since it was among the most vocal in backing military intervention against Syria’s President Bashar al-Assad, a key ally of Shiite Iran – one of Sunni Saudi Arabia’s main regional rivals. “You’re seeing political fractures across the region, and at the same time you’ve got oil, which allows countries to arm themselves, protect themselves and impose their will as to how they think the region should develop,” Ben Moores, author of the IHS report, told AP in March. France, of course, is not alone in striking lucrative arms deals in the region. The US remains the biggest arms exporter to the Middle East, with $8.4 billion (€7.5 billion) worth of weapon sales in 2014, while the UK and Germany are also major players.

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And this is what the merchants of death leave behind.

Guns Are The True Cause Of Hunger And Famine (G.)

Last year, the World Bank revised its position on conflict – upgrading it from being one of many drivers of suffering and poverty, to being the main driver. In Somalia, despite some political progress the conflict has put more than half the population in need of assistance, with 363,000 children suffering acute malnutrition. In north-east Nigeria, conflict with Boko Haram has left 1.8m people still displaced, farmers unable to grow crops, and 4.8 million people need food. In Yemen, an escalation in conflict since 2015 has worsened a situation already made dire by weak rule of law and governance. Now more than 14 million people need food aid. Only if we understand conflict can we understand hunger. South Sudan is another example. I worked there for two years following the signing of the comprehensive peace agreement in 2005.

Right now a place called Koch, where Mercy Corps works, is in what the famine early warning systems network calls a “level 4 emergency phase”. This means that people will start to die of hunger in a matter of months if they don’t receive enough aid. Until recent years, Koch was a thriving community with fertile land. It has been destroyed in armed clashes since conflict broke out in South Sudan in December 2013. Families have had to move time and time again and disease is rampant due to the lack of clean water. As one father of five told our team in Koch: “My house was burnt, everything was looted and I do not know how to rebuild my life.” Across the places where we work and where people are facing starvation, the pattern is the similar.

Hunger is not some freak environmental event; it is human-made, the result of a deadly mix of conflict, marginalisation and weak governance. Yet watching some of the news and the crisis appeals, one could be forgiven for thinking that what we need is another Live Aid song and airdrops of food. Red Nose Day has been criticised for portraying Africa as a place where “nothing ever grows”. A recent social media campaign to send a plane filled with food to Somalia gathered support: a noble gesture, but not a long-term solution. Mercy Corps’ own emergency response is not the long-term answer either.

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It’s easy to label something ‘theft’, but for Greeks it’s either go illegal or sit in the dark, freeze etc. Still can’t believe this is the European Union.

Greece’s Dark Age: How Austerity Turned Off The Lights (R.)

Kostas Argyros’s unpaid electricity bills are piling up, among a mountain of debt owed to Greece’s biggest power utility. His family owe €850 to the Public Power Corporation (PPC), a tiny fraction of the state-controlled firm’s 2.6 billion euros ($2.8 billion) in unpaid bills. Argyros picks up only occasional work as an odd-job man. “When you only work once a week, what will you pay first?” said the 35-year-old, who lives in a tiny apartment in an Athens suburb with his unemployed wife and four small children. The Argyros family are emblematic of deepening poverty in Greece following seven years of austerity demanded by the country’s international creditors. They burn wood to heat their home in winter, food is cooked on a small gas stove, and hot water is scarce.

The only evening light is the blue glare of a TV screen, for fear of racking up more debt. Five-watt lightbulbs provide a dim glow and Argyros worries about the effect on their eyesight. More than 40% of Greeks are behind on their utility bills, higher than anywhere else in Europe. People in poor neighborhoods are also increasingly turning to energy fraud, meaning that the problem for PPC is much higher than the mountain of unpaid bills suggests. Power theft is costing PPC around €500-600 million a year in lost income, an industry official said, requesting anonymity because he was not authorized to divulge the numbers. Public disclosures by the Hellenic Electricity Distribution Network Operator HEDNO, which checks meters, show that verified cases of theft climbed to 10,600 last year, up from 8,880 in 2013 and 4,470 in 2012.

Authorities believe theft is far higher than the cases verified by HEDNO, another official said, declining to be named. Households in the country are equipped with analog meters, which are easy to hack. One of the most common tricks is using magnets, which slow down the rotating coils to show less consumption than the real amount, a HEDNO official said. Some websites even offer consumers tips and tricks on power fraud. For households who have had their electricity cut off, a group of activists calling themselves the “I Won’t Pay” movement have taken it upon themselves to reconnect the supply. The group says it has done hundreds this year. PPC, which has a 90% share of the retail market and 60% of the wholesale market, is supposed to reduce this dominance to less than 50% by 2020 under Greece’s third, 86 billion euro bailout deal.

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It’s time to make this personal. Against Schäuble and Dijsselbloem, Merkel and Rutte and Hollande. They are killing people. There’s nothing innocent about that. Making it personal is the only thing that’ll work. Bring it to their doorstep. Literally to their doorstep.

On Dimitris Christoulas: ‘He Is A Part Of History Now’ (AlJ)

On the morning of April 4, 2012, a gunshot sounded amid the city’s hustle and bustle. As passers-by rushed to work through Syntagma Square in central Athens, Dimitris Christoulas had taken his life with a shotgun a few metres from the Greek parliament. The 77-year-old pensioner, a former pharmacist, had left a note in his pocket. “The occupation government literally annihilated my ability to survive,” he wrote. “I depended on my decent pension, which I alone and without the support of the state, paid for 35 years.” His only daughter, Emmy Christoula, had known nothing about his plans. But, speaking as the fifth anniversary of his death approached, she confidently described her father’s public suicide as a political act. Her father woke up in the morning, got dressed, and wrote two identical notes – putting one in his pocket and leaving the other on his kitchen table for his daughter to read.

He took the subway to the square, site of the country’s most important protests for more than a century. When Dimitris arrived at Syntagma, he texted his daughter – “It’s the end, Emmy,” he wrote – and switched off his phone. Greek morning television talk shows broke the news of Christoulas’s suicide a few minutes after it happened. Hundreds soon gathered to pay their respects. Flowers, letters and notes of resistance were left by the tree where he chose to take his life. Spaniards wrote songs of his resistance. Irish poets wrote odes to him. His funeral turned into a rally against the austerity measures imposed on Greece, when the country’s debt payments became too onerous to pay amid the worldwide recession. The country’s creditors called for harsh spending cuts and steep tax increases so that Athens could make the payments. Protests and riots became a staple of life in Athens in the years that followed.

Five years on from Christoulas’ suicide, the crisis has only grown deeper. Greece’s debt is 175% of its GDP. Greek officials have cut retirees’ pensions 17 times to around half of their value before the recession, according to the Greek Association of Pensioners. Budget cuts have also been implemented in education, health, and welfare services. Lenders must improve most government decisions. Unemployment stands at more than 23%. A fourth bailout agreement is expected soon. According to the Greek Statistical Service, suicides have increased by 68% since 2008, the first year Greek economic growth stagnated. “I’m of a certain age and don’t have the power of dynamically reacting,” wrote Christoulas in his suicide note. “I can’t find another solution to a dignified end, as soon I’d have to start scavenging through the garbage to find my own food.”

Christoulas’ suicide became a symbol of the devastating effects of austerity on the Greek people. Until then, the majority of the stories published in the international media on the issue were about lazy Greeks who deserved their comeuppance for living off debt for so many years. “[My father] taught me that you shouldn’t just follow history, you should write it,” said Emmy, adding that she has accepted her father’s decision but still aches from his absence. Emmy describes her father as a wiry and lean man who had long participated in public life. Her first childhood memories include sitting on his shoulders at pro-democracy rallies against Greece’s military government in the 1970s. The police brutality didn’t deter father and daughter from participating.

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Sep 262016
 
 September 26, 2016  Posted by at 8:50 am Finance Tagged with: , , , , , , , , ,  2 Responses »


NPC Fire at Thomas Somerville plant, Washington DC 1926

Asian Markets Drop As Pessimism Increases Ahead Of OPEC Meeting (MW)
Deutsche Bank Slumps to Fresh Record Low on Capital Concerns (BBG)
China’s Smaller Banks Are Funding Each Other’s Lending (BBG)
China Launches $52.5 Billion Restructuring Fund For State-Owned Firms (R.)
A Weaker Currency Is No Longer the Economic Elixir It Once Was (BBG)
US Home Prices Rose 76% Since 1999 As Real Income Grew Less Than 2% (BBG)
Justin Trudeau’s Canadian Honeymoon Is About to End (BBG)
The Know-Nothing Economists Who Created This Mess Blast Trump’s Plan (MW)
Amazon “Tweaks” Hillary Book Stats: ‘5-Star’ Reviews Double Overnight (ZH)
Cracks Showing In Germany’s Fragile Truce With The ECB (R.)
German Minister: Britain Won’t Stop EU Army (Pol.)
50% Of Guns In America Owned By Just 3% Of Population (ZH)
African Elephants ‘Suffer Worst Decline In 25 Years’ (AFP)

 

 

And Europe’s falling faster.

Asian Markets Drop As Pessimism Increases Ahead Of OPEC Meeting (MW)

Asian shares were broadly lower Monday, as relief over a delay by the U.S. Federal Reserve in raising interest rates wore off. Japan’s Nikkei was down 0.8%, while Hong Kong’s Hang Seng Index retreated 0.7%. South Korea’s Kospi slipped 0.4%. “Asia Pacific investors are bracing for a sell day after European and U.S. traders took some hard won risk off the table,” wrote Michael McCarthy, chief market strategist at CMC Markets, in a note. On Friday, the S&P 500 and Nasdaq both fell 0.6% and the Dow Jones Industrial Average shed 0.7% as energy stocks slid with oil prices Friday. Investors were also pessimistic on Monday over any breakthroughs in oil-production cuts when OPEC gathers for an informal meeting later this week.

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Merkel’s comments weigh in.

Deutsche Bank Slumps to Fresh Record Low on Capital Concerns (BBG)

Deutsche Bank shares dropped to a record low amid concerns that the lender’s capital buffers will be undermined by mounting legal charges including a settlement tied to the sale of U.S. securities The shares dropped 4.2% to €10.93 at 9:15 a.m. in Frankfurt, an all-time low. The 38-member Bloomberg Europe Banks and Financial Services Index slipped 1.5%, with Deutsche Bank the worst performer. A potential $14 billion bill to settle a U.S. probe into residential mortgage-backed securities is more than twice the €5.5 billion ($6.2 billion) Deutsche Bank has set aside for litigation. The lender also faces inquiries into legal issues including currency manipulation, precious metals trading and billions of dollars in transfers out of Russia, complicating CEO John Cryan’s efforts to bolster profitability and capital ratios.

Germany’s biggest bank would be “significantly under-capitalized” even assuming enough provisions to cover an eventual settlement with the U.S. Justice Department, Andrew Lim at Societe Generale said in a note earlier this month. A settlement range of $3 billion to $3.5 billion would leave the German lender room to settle other legal issues, while any additional $1 billion in litigation charges would erode 24 basis points in capital, JPMorgan analysts wrote. Chancellor Angela Merkel has ruled out any state assistance for Deutsche Bank in the year heading into the national election in September 2017.

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Big warning sign. Circle jerking tail eating snakes.

China’s Smaller Banks Are Funding Each Other’s Lending (BBG)

[..] China’s banking regulator told city banks last week to learn the lesson of the global financial crisis and get back to traditional businesses. CLSA estimates total debt may reach 321% of GDP in 2020 from 261% in the first half. “Contagion risks are definitely rising,” said Liao Qiang, Beijing-based senior director for financial institution ratings at S&P Global Ratings. “The pace of the development is concerning. If this isn’t stopped in time, the central bank will lose some control and flexibility of its monetary policy.” Shanghai Pudong Development Bank said in an e-mailed response on Sept. 24 it has been using appropriate financing and its regular deposits and interbank borrowing have been developing properly and in synchronization.

Total liabilities will be kept under control in the long run and all liquidity gauges meet regulatory requirements, it said. Rising short-term borrowing doesn’t mean its risks have climbed as well, the bank said. “City commercial banks should change as soon as possible the situation of allocating more funds into investing than lending, and developing their off-balance-sheet businesses too fast,” Shang Fulin, chairman of the China Banking Regulatory Commission, said. The PBOC resumed longer-term reverse repos to boost borrowing costs in August and deputy governor Yi Gang said in a television interview earlier this month that the nation’s short-term goal is to curb leverage. It gauged demand for such auctions today. The benchmark 10-year government bond yield climbed slightly, to 2.73% from a decade low of 2.64% on Aug. 15.

[..] The higher the reliance on wholesale funds and investment in illiquid assets, the greater the risk of a liquidity crunch, said Christine Kuo at Moody’s. “When banks face fund withdrawals by other financial institutions, this will in turn prompt them to call back their own funds,” she said. Banks are also buying each others’ wealth-management products and accounting for the transactions as investment receivables. A record 26.3 trillion yuan of WMPs were outstanding as of June 30, doubling over two years, official data showed. Investment receivables at 25 listed banks grew 13.4% in the first half to 11 trillion yuan.

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Doesn’t sound like real restructuring.

China Launches $52.5 Billion Restructuring Fund For State-Owned Firms (R.)

A private equity fund worth 350 billion yuan ($52.5 billion) has been launched in China to help with the restructuring of state firms, a newspaper run by Xinhua news agency reported on Monday. The China State-owned Enterprises Restructuring Fund will be managed by the State-owned Assets Supervision and Administration Commission (SASAC), according to the Economic Information Daily. The report said 10 state-owned enterprises have established the fund to help with restructuring of state firms, including M&A deals, as part of government efforts to advance supply side reform. The 10 firms have provided initial registered capital of 131 billion yuan, the newspaper said.

No detail was provided on the source of the rest of the equity fund. The 10 firms include China Mobile, China Railway Rolling Stock, China Petroleum & Chemical and China Chengtong, a restructuring platform supervised by SASAC that will lead the fund. China is embarking on a revamp of its massive but debt-ridden state sector, which has struggled under a system that requires firms to maximize economic gains while fulfilling government policy objectives. The government has vowed to create innovative and globally competitive enterprises through mergers, asset swaps and management reforms.

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Caveat: a weak currency doesn’t automatically spur more exports. But they should also ask where exports would be if the currency had remained strong. Maybe they would have plummeted. Maybe global trade is falling fast.

A Weaker Currency Is No Longer the Economic Elixir It Once Was (BBG)

A weaker currency, once the cure-all for ailing economies around the world, isn’t the panacea it once was. Just look at Japan, where the yen plunged 28% in the two years through 2014, yet net exports to America still fell by 10% in the span. Or at the U.K., where the pound’s 19% tumble in the two years through 2009 couldn’t stave off a 26% decline in shipments to the U.S. In fact, since the turn of the century, the ability of exchange-rate movements to affect trade and growth in major economies has fallen by more than half, according to Goldman Sachs. The findings suggest that weaker currencies may not provide much assistance to officials in countries like Japan and the U.K. that are relying on unprecedented easy-money policies to help boost tenuous growth and inflation.

On the flip side, the data also indicate that concerns U.S. growth will be derailed as rising interest rates drive investors into the dollar are also overblown. A shift in the structure of advanced-economy trade to less price-elastic goods and services, combined with the prolonged effects of the financial crisis, have stunted the sensitivity of trade volumes relative to global exchange rates, according to Goldman Sachs analysts led by Jari Stehn. “If you’re a central banker, yes you’re paying attention to currency levels, but the more-developed market economies aren’t reacting to currency debasing policies like they used to,” said Philippe Bonnefoy, the founder of hedge fund Eleuthera. “The impact has been diluted.”

Global central banks have cut policy rates 667 times since 2008, according to Bank of America Corp. During that period, the dollar’s 10 main peers have fallen 14%, yet Group-of-Eight economies have grown an average of just 1%. Since the late 1990s, a 10% inflation-adjusted depreciation in currencies of 23 advanced economies boosted net exports by just 0.6% of GDP, according to Goldman Sachs. That compares with 1.3% of GDP in the two decades prior. U.S. trade with all nations slipped to $3.7 trillion in 2015, from $3.9 trillion in 2014.

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“Since 1999 year-end through 2015 home prices have risen 76% while household mean real income has grown less than 2%..”

US Home Prices Rose 76% Since 1999 As Real Income Grew Less Than 2% (BBG)

U.S. home prices appear to be getting out of hand again as the gap between home price growth and household real income growth is close to where it was just before the housing collapse. It’s also notable, and worrying, that the housing market is back in a “flipping frenzy” with non-bank actors climbing aboard to fund the speculation. Since 1999 year-end through 2015 home prices have risen 76% while household mean real income has grown less than 2%; the millennium-to-date gap between the two growth rates peaked at 84% during 2005-2006 and has risen back to 74% as of 2015 year-end. Gap at year-end 2007 was 75%. This millennium through 2015 has seen average new and existing home sale prices rise 84% and 55%, respectively, despite the lack of income growth.

Existing and new home sales average prices peaked at $280.2k in June 2015 and $384k in Oct. 2014, respectively; both peaks exceeded levels seen during housing boom. Over the same period outstanding home mortgage debt has risen 14%, though it’s notable that with the end of easy mortgage credit it has fallen 11% from its June 2008 peak. Concurrent with this 11% fall, the homeownership rate (63.8% at 2015 year-end) has slid back to levels last seen in the mid-1960s. Monthly U.S. single-family home price y/y growth hit a post-crisis peak of 10.85% in Oct. 2013 and has since leveled off at ~5% each month since July 2015; this is still easily outpacing growth in real income.

The disconnect between home price growth and the lack of real income growth has led homebuilders’ to turn to the higher-end of the market and for Ginnie Mae to take the lead in mortgage lending. GNMA offers taxpayer-guaranteed loans to first-time homebuyers who have lower credit scores and smaller down payments than those who obtain loans through Fannie Mae or Freddie Mac. Whereas from 2005-2007 GNMA pct share of net MBS issuance was ~2% each year, during 2014, 2015 and 2016 YTD it is ~67%, according to BofAML data. Another severe downturn in home prices would be unlikely to play out in the agency MBS market in like manner to 2007-2008 as the Fed now holds ~33% of the outstanding universe and the U.S. taxpayer now guarantees almost all of the market with Fannie and Freddie remaining under government conservatorship.

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A big bad hornet’s nest. And that’s before the economic poisoned chalice is served.

Justin Trudeau’s Canadian Honeymoon Is About to End (BBG)

Along Canada’s evergreen-draped west coast, the fate of a multi-billion-dollar energy project and a nation’s reconciliation with its dark, colonial past hang in the balance. Beating rawhide drums and singing hymns, occupiers of Lelu Island—where Malaysia’s state oil company plans a $28 billion liquefied natural gas project—assert indigenous claims to the area where trees bear the markings of their forefathers and waters run rich with crimson salmon they fear the project will obliterate. “The blood of my ancestors is on my hands if I don’t defend this land,” says Donald Wesley, 59, a hereditary chief of the Gitwilgyoots tribe which has inhabited the area for more than 6,000 years.

That claim is about to test Justin Trudeau, the country’s telegenic 44-year-old prime minister, who swept to power a year ago vowing to be many things to many people—to tackle climate change, revive the economy, and reset Canada’s fraught relationship with its indigenous communities. Those pledges are set for collision in British Columbia—home to more First Nations communities than any other province and the crucible where a resource economy seeks to reinvent itself. Trudeau has promised to decide on the LNG project on Lelu Island by Oct. 2. He has big spending plans to spur growth in a commodities downturn, and B.C., the birthplace of Greenpeace, is where most energy projects able to support that growth are located.

Indigenous groups, essential to public support, are divided, with some seeking to preserve their habitat and traditions, and others arguing that the projects offer a path out of poverty, addiction and suicide. Facing five major energy initiatives in B.C., Trudeau will choose which constituency to abandon. He’s allowed a hydroelectric dam to proceed; pending are decisions on Enbridge’s Northern Gateway crude pipeline, Petroliam Nasional’s LNG project on Lelu Island, a pipeline expansion by Kinder Morgan, as well as a ban on crude oil tankers. He’s said to want at least one pipeline, and favor Kinder Morgan. Trudeau says regularly it’s a prime minister’s job to get the country’s resources to market, and a pipeline approval would demonstrate Canada can get major projects completed as warnings mount that the complex web of regulatory rules is spurring a flight of capital.

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“It was refreshing to hear that Trump economic adviser Stephen Moore responded to a question from Pethokoukis about all the red ink in Trump’s plan with, “Whether it’s going to pay for itself, I don’t really care.”

The Know-Nothing Economists Who Created This Mess Blast Trump’s Plan (MW)

Establishment economists ranging from austere neoliberals to spendthrift Keynesians are united in branding Donald Trump’s proposed economic policies as “disastrous.” He must be on to something. These economists are the distinguished experts, after all, who have championed the globalization that gutted American manufacturing, promoted the offshoring and outsourcing of American jobs, encouraged American companies to keep trillions (trillions!) of dollars of profit abroad, and enabled the tax inversions allowing American companies to move to the country most willing to beggar its neighbor. These are the celebrity academics who have championed the deficit-reducing, budget-balancing, tax-cutting policies that have crippled our infrastructure, degraded our schools, and cut public services from police and fire protection to garbage collection.

And now this gaggle of Washington insiders is warning us that Trump’s policies will throw the country into recession, ignite a trade war, launch the national debt into the stratosphere, and create more unemployment rather than jobs. Why, really, should anyone listen to them? There is Mark Zandi, whose title as chief economist of Moody Analytics makes this sometime adviser to Barack Obama and backer of Democratic nominee Hillary Clinton seem nonpartisan, even though he clearly is not. Not surprisingly, Zandi had his team at Moody’s produce some modeling this summer that concluded that Trump’s economic proposals would result in a less global economy, lead to larger government deficits and more debt, will largely benefit very high-income households, and will result in a weaker U.S. economy.

The implication is that these are all bad things. Those for whom Trump’s economic message resonates might consider a less global U.S. economy a good thing. To brand deficits and debts as terrible you would first have to prove that they do more harm than good.

[..] those establishment economists who through several administrations have served so ably on the president’s Council of Economic Advisers, in the Treasury Department and the Federal Reserve — the people, in short, who have delivered us into the economic morass they blithely call secular stagnation — are training their heavy artillery on poor, dumb Trump. Progressive economist Joseph Stiglitz, who chaired the CEA under President Bill Clinton, gives Trump an “F” in economics because the nominee apparently doesn’t understand the principle of comparative advantage in global trade — as if we lived in a world where currency manipulation, dumping subsidies, and substandard environmental and labor conditions don’t keep this pristine economic principle from working its magic.

And conservative analyst James Pethokoukis, a fellow at the American Enterprise Institute, labeled Trump’s economic plan “a complete and utter joke” as he took the Republican nominee to task for potentially adding $2.6 trillion to $3.9 trillion to the national debt over the next 10 years — even though the $9 trillion in debt added during the 7.5 years of the Obama administration has caused no detectable harm. It was refreshing to hear that Trump economic adviser Stephen Moore responded to a question from Pethokoukis about all the red ink in Trump’s plan with, “Whether it’s going to pay for itself, I don’t really care.” High time someone influencing policy fully appreciated the dynamic flexibility of a fiat currency in government finance. We don’t really need to care whether the plan “pays for itself” in the short term, if it does indeed produce the accelerated growth promised.

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For entertainment purposes only.

Amazon “Tweaks” Hillary Book Stats: ‘5-Star’ Reviews Double Overnight (ZH)

Two short weeks ago, we exposed the gaping difference between Amazon reader reviews of Hillary Clinton’s “Stronger Together” book (14% 5-Stars) and Donald Trump’s “Great Again” book (74% 5-Stars)… As The New York Times reported at the time, the book was a disaster. Both Mrs. Clinton and her running mate, Senator Tim Kaine, have promoted the book on the campaign trail, but the sales figure, which tallies about 80% of booksellers nationwide and does not include e-books, firmly makes the book what the publishing industry would consider a flop. [..] So, as with everything else in this ‘new normal rigged’ world, something had to be done and WaPo-owner Jeff Bezos’ Amazon reviews appear to have been ‘tweaked’ – more than doubling Hillary’s top reviews.

But, as WND.com explains, Amazon’s steps to ‘fix’ Hillary’s book rviews has resulted in 5-star ratings with scathingly negative comments… If you can’t even win when the rules are changed in your favor, things must be REALLY bad. That’s how it looks for Hillary Clinton’s new 2016 campaign book, “Stronger Together,” co-authored with running mate Tim Kaine. WND reported just days ago when the book was being savaged on Amazon.com with negative reviews, with 81% one-star ratings and an average of only 1.7. Clinton supporters lashed out at “trolls” they said were criticizing the book only because they oppose the Democrat’s presidential candidacy. WND previously reported there were more than 1,200 reviews, and the number grew to than 2,000.

But Thursday afternoon, there were only 255, with many of the most critical reviews removed by Amazon, whose CEO, Jeff Bezos, owns the Washington Post, which created an army of 20 reporters and researchers to investigate the life of Donald Trump. Victory for the Clinton book, however, remains out of grasp, with the negative, one-star responses, outnumbering positive, five-star responses nearly 2-1. The one-star ratings Thursday were 62%, to 35% for five-star ratings.

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“..the political landscape in Germany has become decidedly more toxic for the ECB over the past months.”

Cracks Showing In Germany’s Fragile Truce With The ECB (R.)

Michael Stuebgen, a conservative member of the German parliament, was speaking with the head of a local savings bank recently about the ECB’s QE program. “He told me the bond market was being emptied out,” Stuebgen recalled. “He likened it to going into a supermarket where everything has been bought up. You might find a shriveled old carrot or potato. Pretty soon you’re starving.” Stuebgen, a spokesman on European affairs for Chancellor Angela Merkel’s party in the Bundestag, credits the ECB and its President Mario Draghi with saving the euro zone from collapse four years ago. But conversations like the one with the banker have convinced him that its policies, in particular the massive bond-buying program known as QE, have gone too far. He is not alone.

[..] Instead of changing course, as Stuebgen and his colleagues want, the ECB is widely expected to announce an extension of its QE program by the end of the year. The program is due to expire in March. As early as next month, it could also announce steps to broaden the scope of what it can buy in response to a dwindling pool of available assets. The most controversial change would be abandoning the so-called “capital key”, which limits the proportion of government bonds the ECB can buy from any given member state, based on its size and economic weight. “The big challenge for Mario Draghi will be to prepare the Bundestag and German public for a further easing of monetary policy,” said Marcel Fratzscher, head of the DIW economic institute and a former senior official at the ECB.

That message is unlikely to go down well in Berlin. In addition to concerns about the distorting effects of QE on financial markets and the impact of low interest rates on German savers and insurers, the political landscape in Germany has become decidedly more toxic for the ECB over the past months.

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Better get rid of the EU before they acutally do this.

German Minister: Britain Won’t Stop EU Army (Pol.)

Ursula von der Leyen, Germany’s defense minister, does not believe the U.K. will stand in the way of deepened defense cooperation between EU member countries, she told Reuters in an interview Sunday night. Von der Leyen said she was confident Britain would “make good its promise that it will not hinder important EU reforms.” Michael Fallon, Britain’s defense secretary, said earlier this month Britain will veto measures to build an EU army for as long as it remains a member of the bloc. Von der Leyen said she told Fallon the plans were not directed against Britain, but “designed for a strong Europe” instead.

Martin Schulz, the president of the European Parliament, said during a speech in London last week that a British veto was “counterproductive and anyway not possible in this case.” EU defense ministers will discuss common military proposals on Monday and Tuesday. Federica Mogherini, the European Commission’s foreign policy chief, said earlier this month that member countries could combine their defense capabilities via a so-far unused provision in the Lisbon Treaty.

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Feel safe?

50% Of Guns In America Owned By Just 3% Of Population (ZH)

A recent Harvard study of the demographics of gun ownership in the United States yielded a fairly shocking discovery, namely the emergence of the Obama gun “Super Owner.” The study, entitled “The Stock and Flow of US Firearms: Results from the 2015 National Firearms Survey”, was conducted by the Harvard School of Public Health and found that just 14% of all gun owners, or 7.6mm adults and 3% of the total U.S. population, possessed 50% of all guns owned by civilians in the country. Moreover, with a total stock of 270mm civilian-owned guns in the U.S., that implies that these “super owners” possess an average of nearly 18 guns per person.

“Gun owning respondents owned an average of 4.85 firearms (range: 1-140); the median gun owner reported owning approximately two guns. As can be seen in Figure 3, approximately half (48%) of gun owners report owning 1 or 2 guns, accounting for 14% of the total US gun stock, while those who own 10 or more guns (8% of all gun owners), own 39% of the gun stock. Put another way, one half of the gun stock (~130 million guns) is owned by approximately 86% of gun owners, while the other half is owned by 14% of gun owners (14% of gun owners equals 7.6 million adults, or 3% of the adult US population).”

Another startling discovery in the data, though “oddly” not highlighted in the report, is that the surge in gun ownership per capita seemed to coincide with the start of the Obama presidency and growing rhetoric over new gun regulations. Per the chart below, over the past 20 years, gun ownership per U.S. adult hovered around 1 from 1993 through 2007 but then surged starting in 2008 as an Obama presidency became increasingly likely. This trend is also reflected in annual guns sales which floated between 4-6mm units per year before surging in 2008.

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Tears. I still have tears left.

African Elephants ‘Suffer Worst Decline In 25 Years’ (AFP)

Africa’s elephant population has suffered its worst drop in 25 years, the International Union for Conservation of Nature (IUCN) said Sunday, blaming the plummeting numbers on poaching. Based on 275 estimates from across the continent, a report by the conservation group put Africa’s total elephant population at around 415,000, a decline of around 111,000 over the past decade. It is the first time in 25 years that the group’s African Elephant Status Report has reported a continental decline in numbers, with the IUCN attributing the losses in large part to a sharp rise in poaching. “The surge in poaching for ivory that began approximately a decade ago – the worst that Africa has experienced since the 1970s and 1980s – has been the main driver of the decline,” said IUCN in a statement.

Habitat loss is also increasingly threatening the species, the group said. IUCN chief Inger Andersen said the numbers showed “the truly alarming plight of the majestic elephant”. “It is shocking but not surprising that poaching has taken such a dramatic toll on this iconic species,” she said. The IUCN report was released at the world’s biggest conference on the international wildlife trade, taking place in Johannesburg. Thousands of conservationists and government officials are seeking to thrash out international trade regulations aimed at protecting different species. A booming illegal wildlife trade has put huge pressure on an existing treaty signed by more than 180 countries – the Convention on International Trade in Endangered Species (CITES).

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