Sep 242023
 
 September 24, 2023  Posted by at 9:21 am Finance Tagged with: , , , , , , ,  18 Responses »


Jackson Pollock Shooting Star 1947

 

‘New World Order’ Vs ’Empire Of Lies’ – Lavrov at UN (RT)
Is World War III About to Start? Part I: Drift Toward War (Cook)
Defeat (Michael Brenner)
McCarthy Reverses Course, Maintains Ukraine Aid in Pentagon Funding Bill (Sp.)
Kiev’s Counteroffensive Unlikely To Achieve Its Goals – US Officials (RT)
Jackson Hinkle: Western Elites Want War Against Russia, China (Sp.)
RFK, Jr. As A Third-Party Candidate (AT)
California Democrats Could Guarantee Trump 2024 Win (Seiler)
Middle East Security Requires Solution to Palestinian Issue – Saudi FM (Sp.)
Elon Musk: Media ‘Instructed Not To Cover’ Border Crisis (Fox)
What Biden’s Open-Border Agenda Means For The US (Robert Bridge)
Rhino Population Increasing In Africa For 1st Time In Decade (RT)

 

 

 

 

 

 

 

 

Fauci 30 yrs

 

 

 

 

 

 

 

 

 

 

“..[if they want it] to be on the battlefield, let it be on the battlefield..”

‘New World Order’ Vs ’Empire Of Lies’ – Lavrov at UN (RT)

The world has a chance to achieve “authentic democratization” in international relations by establishing a multipolar world order, marking the first such opportunity since the end of World War II, Russian Foreign Minister Sergey Lavrov told the UN General Assembly (UNGA) on Saturday. The US and its Western allies seek to prevent such a development by stirring up new conflicts to divide humanity and keep their “hegemony of the global minority” in place, he added. The US and its allies still reject the principle of equality in international relations, Lavrov said. Americans and Europeans keep looking down on the rest of the world and that leads to their “total intractability” in any negotiations. Washington and its allies “keep making promises left and right” that end up being reneged-on, the Russian minister added. “As Russian President Vladimir Putin put it, the West is now the real ‘empire of lies’,” he said.

NATO activities have reached “unprecedented” levels since the end of the Cold War, the top Russian diplomat believes. The US-led forces of the bloc have conducted drills that involved simulating nuclear strikes against Russia, he claimed, adding that Washington is also actively seeking to project its military might in the Asia-Pacific through establishing military-political “alliances” with nations like Australia, South Korea or Japan and pushing them towards closer cooperation with NATO. Such actions “risk creating a new explosive geopolitical hotspot in addition to the … European one,” Lavrov warned, adding that Western politicians have been so blinded by a feeling of impunity that they’ve lost “the sense of self-preservation.” For the first time since 1945, when the United Nations was established, the world has a chance to establish a truly democratic world order, the Russian foreign minister said.

The “global majority” – ie the nations of Asia, Africa and Latin America – are increasingly seeking independence and equality, as well as respect for their sovereignty in international relations. “It is obvious for Russia that there is no other way,” Lavrov told the UNGA, adding that this fact “encourages optimism in those believing in the rule of international law and wishing to see the UN restored to its role of a central coordinating body of world politics.” The US and its allies seek to stall the onset of a multipolar world order, in particular by “stirring up conflicts that artificially divide humanity into hostile blocs and prevent it from achieving common goals,” the Russian minister pointed out. The West wants the world to “play by its infamous and self-serving rules,” he said, adding that the international community should instead strive for a world where everyone “agrees on how to solve issues together, on the basis of a fair balance of interests.”

Russia is calling for “an immediate and full” lifting of sanctions imposed against such nations as Cuba, Venezuela and Syria, Lavrov said, adding that such unilateral punitive measures “blatantly violate the principle of sovereign equality of nations” and interfere with these countries’ rights to development. “One should put an end to any coercive measures imposed in circumvention of the UN Security Council as well as to the West’s … practice of manipulating its sanctions policies to exert pressure on those deemed undesirable,” he added. Russia’s top diplomat also blasted the US over what he called threats against nations willing to work with Moscow. “It is shameful for a great power to run around like this and threaten everyone and only demonstrating its obsession with domination,” he told journalists after the UNGA session.

Moscow is ready for talks on its ongoing conflict with Kiev at any time, Lavrov told a press conference on the sidelines of the UN assembly. However, Russia will not consider any deals involving a ceasefire, he said, adding that Moscow and Kiev had supposedly almost reached an agreement in the first months of the conflict following a series of talks in Belarus and Türkiye only for this process to be disrupted, supposedly by Ukraine’s Western backers.“Putin said it very clearly: yes, we are ready for talks but we will not consider any ceasefire proposals because we did so once and were deceived.” Russia also respects Ukraine’s sovereignty in accordance with the Ukrainian declaration of independence and its constitution, Lavrov said, adding that both documents also declare the non-aligned status of Ukraine and respect for the Russian language and Russian-speaking minorities.

Ukraine’s sovereignty “was destroyed by those who staged and supported a coup, the leaders of which then declared a war on their own people,” Lavrov said, referring to the 2014 Maidan coup. The US and its allies are de-facto engaged in a conflict with Russia, Lavrov told the press conference. “We call it a hybrid war but it does not change things,” he said. Western nations are sending arms to Kiev and training its troops, he explained, so “They are de-facto fighting against us with the hands and bodies of Ukrainians.” Western nations also openly say that “Russia should be defeated on the battlefield,” Moscow’s top diplomat said, adding that Moscow is ready for such a development. “Under such circumstances, [if they want it] to be on the battlefield, let it be on the battlefield,” he said.

https://twitter.com/i/status/1705689214296129785

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“The only alternative would then be to activate a gigantic airlift of additional forces into Europe with U.S. cargo planes sitting ducks for destruction en route. Impossible.”

Is World War III About to Start? Part I: Drift Toward War (Cook)

Now the U.S., with the Neocons firmly entrenched in the State Department and elsewhere, surrounded Russia with military bases and attacked its perimeter with color revolutions in Georgia, Ukraine, and Kyrgyzstan, following on the dismemberment of Yugoslavia in the late 1990s and early 2000s. President Barack Obama then situated the Aegis Missile Defense System in Poland and Romania with the potential to activate missiles that could reach Moscow with nuclear warheads in six minutes. Talk was current of a possible “decapitation” strike against the Russian leadership. Finally, in 2014, with “cookies” Victoria Nuland and Vice President Joe “Burisma” Biden in charge, the U.S. fomented a coup in Ukraine with the aid of paid snipers to drive out a president friendly toward Russia and his replacement with a NeoNazi junta that put Ukraine on a war footing.

In response, Russia annexed the Crimean Peninsula, where Sevastopol is the home of its Black Sea fleet, with 85 percent popular approval, while the eastern Ukrainian Donbass provinces of Donetsk and Lugansk, ethnically-Russian, declared independence. Finally, after eight years of Ukrainian provocations, the death from Ukrainian shelling of more than 10,000 Donbass civilians, and the treachery of Germany and France in failing to uphold the Minsk agreements they had guaranteed, Russia entered Ukraine with its military forces in February 2022. The conflict was on, a conflict that Russia is winning. U.S.-led sanctions against Russia failed to bring down its economy or force regime change against Putin. But each Ukrainian setback on the battlefield has been followed by more weapons and money supplied to the Volodymyr Zelensky regime by the U.S., UK, Germany, France, and other NATO members.

But who was calling the shots? In March 2022, Russian and Ukrainian negotiators reached agreement on a tentative settlement at meetings in Istanbul. UK prime minister Boris Johnson then rushed to Kiev to induce Zelensky to tear up the agreement and continue the war. Western escalation has included billions of dollars worth of heavy tanks and other weapons to Ukraine, along with cluster munitions and depleted uranium projectiles. There have been drone attacks on Russia itself and on Crimea. But the Ukrainian counteroffensive has collapsed, with speculation increasing of a major Russian counterattack, possibly even cutting Ukraine off from the Black Sea.

We have now come full circle. Warnings from Washington continue that Putin had better not go nuclear, which can be read as inviting him to do so. This is obviously a new phase of brinkmanship that could give the U.S. a pretext for themselves moving to nuclear war. Meanwhile, the U.S. understands that it could in no way challenge Russia in a conventional war even with the entire NATO alliance being activated. Even then, divisiveness within NATO and the absence of sufficient military force anywhere in Europe make this impossible at present. Veteran military analyst Scott Ritter writes in Sputnik News on September 21, 2023, that even were the U.S. to activate its entire military force stationed in Europe against Russia, it would be defeated within one to two weeks of intensive combat. The only alternative would then be to activate a gigantic airlift of additional forces into Europe with U.S. cargo planes sitting ducks for destruction en route. Impossible.

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“..deep emotions rather than reasoned thought are propelling us toward an avoidable, potentially catastrophic conflict..”

Defeat (Michael Brenner)

The march to war with China defies all conventional wisdom. After all, it poses no military threat to our security or core interests. China has no history of empire-building or conquest. China has been the source of great economic benefit via dense exchanges that serve us as well as them. Therefore, what is the justification for the widespread judgment that a crossing-of-swords is inescapable? Sensible nations do not commit themselves to a possibly cataclysmic war because China, the designated number one enemy, builds radar warning stations on sandy atolls in the South China Sea. Because it markets electric vehicles more cheaply than we can. Because its advances in developing semi-conductors may outclass ours.

Because of its treatment of an ethnic minority in western China. Because it follows our example in funding NGOs that promote a positive view of their country. Because it engages in industrial espionage just the way the United States and everybody else does. Because it wafts balloons over North America (declared benign by General Milley last week). None of these are compelling reasons to press hard for a confrontation. The truth is far simpler – and far more disquieting. We are obsessed with China because it exists. Like K-2, that itself is a challenge for we must prove our prowess (to others, but mainly to ourselves), that we can surmount it. That is the true meaning of a perceived existential threat. The focal shift from Russia in Europe to China in Asia is less a mechanism for coping with defeat than the pathological reaction of a country that, feeling a gnawing sense of diminishing prowess, can manage to do nothing more than try one final fling at proving to itself that it still has the right stuff – since living without that exalted sense of self is intolerable.

What is deemed heterodox, and daring, in Washington these days is to argue that we should wrap up the Ukraine affair one way or another so that we might gird our loins for the truly historic contest with Beijing. The disconcerting truth that nobody of consequence in the country’s foreign policy establishment has denounced this hazardous turn toward war supports the proposition that deep emotions rather than reasoned thought are propelling us toward an avoidable, potentially catastrophic conflict. A society represented by an entire political class that is not sobered by that prospect rightly can be judged as providing prime facie evidence of being collectively unhinged.

Second, amnesia may serve the purpose of sparing our political elites, and the American populace at large, the acute discomfort of acknowledging mistakes and defeat. However, that success is not matched by an analogous process of memory erasure in other places. We were fortunate, in the case of Vietnam, that the United States’ dominant position in the world outside of the Soviet Bloc and the PRC allowed us to maintain respect, status and influence. Things have now changed, though. Our relative strength in all domains is weaker, there are strong centrifugal forces around the global that are producing a dispersion of power, will and outlook among other states. The BRICs phenomenon is the concrete embodiment of that reality. Hence, the prerogatives of the United States are narrowing, our ability to shape the global system in conformity with our ideas and interests are under mounting challenge, and premiums are being placed on diplomacy of an order that seems beyond our present aptitudes. We are confounded.

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Yeah, America loves flip-floppers.

McCarthy Reverses Course, Maintains Ukraine Aid in Pentagon Funding Bill (Sp.)

In a surprising shift, Speaker Kevin McCarthy (R-CA) announced he will keep $300 million in Ukraine aid within the Pentagon funding bill, going back on his earlier decision to remove it due to opposition from Rep. Marjorie Taylor Greene (R-GA). McCarthy’s decision was explained during a press briefing at the Capitol, where he revealed that he had reconsidered after realizing that another spending measure, which is set to be considered next week and funds the State Department and Foreign Operations, also includes financial support for Ukraine. Stripping Ukraine aid from the State Department and Foreign Operations bill became “more difficult to do,” leading McCarthy to choose to maintain the funding for Ukraine in both appropriations measures.

The House is scheduled to take a procedural vote next week to advance four appropriations bills, including those that fund the Pentagon and the State Department and Foreign Operations. McCarthy acknowledged that despite his decision to retain Ukraine aid in both bills, there will still be votes on amendments to remove the aid from both spending bills, according to Rep. Garret Graves (R-LA). However, these votes may not take place if lawmakers block the measures from being debated. A coalition of House conservatives had previously opposed the rule for the Pentagon appropriations bill twice this week, preventing the legislation from advancing to debate and a final vote.

These unexpected failures to pass the rule have presented challenges for McCarthy, who is trying to advance spending bills ahead of the September 30 government funding deadline. The Pentagon funding bill includes $300 million earmarked “to provide assistance, including training; equipment; lethal assistance; logistics support, supplies and services; salaries and stipends; sustainment; and intelligence support to the military and national security forces of Ukraine… for replacement of any weapons or articles provided to the Government of Ukraine from the inventory of the US.” McCarthy is facing threats of a “vote to vacate” from members of his own party, which would boot him from his speaker position.

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NYT appears to lead the change in MSM narrative.

Kiev’s Counteroffensive Unlikely To Achieve Its Goals – US Officials (RT)

Officials in Washington have suggested that Ukraine’s military forces won’t be able to cut Russia’s land bridge to Crimea as part of their counteroffensive or achieve other key goals, the New York Times has reported. “Some American officials have said that the Ukrainian counteroffensive appears likely to fall short of its strategic goals,” the paper reported in an article on Friday. Kiev’s forces are struggling to achieve the aim of reaching the Sea of Azov in Russia’s Zaporozhye Region, because the minefields set up by Moscow’s forces, they say, have proven to be “a potent defense,” the Times added. According to US officials, conducting offensive operations would also soon become even more difficult for Ukraine “as the ground becomes soft and muddy”in the region.

The NYT also said that some in Washington have warned that “within a few weeks, the Ukrainian army will need time to rebuild their stockpile of equipment and to rest forces exhausted by the summer fighting.” The Ukrainian counteroffensive was launched in early June, although Kiev has so far only reported the capture of a handful of small villages some distance away from the main Russian defense lines. President Vladimir Putin said earlier this month that Ukraine has lost more than 71,000 troops and over 540 tanks since the beginning of summer, while failing to achieve any significant results on the battlefield. On Friday, President Vladimir Zelensky told journalists in Washington that Kiev “will do everything not to stop during difficult days in autumn with poor weather and in winter.”

Zelensky claimed that Ukraine has a “very, very comprehensive plan”to “de-occupy” Artyomovsk (known as Bakhmut in Ukraine) and two other cities, which he refused to name, in the coming months. Ukraine suffered huge losses trying to defend Artyomovsk and the strategic city in Donetsk People’s Republic nonetheless fell under Russian control in May, after months of fighting. The NYT pointed out that US intelligence and military had warned the Zelensky government against spending its manpower and resources in Artyomovsk, suggesting that it would be better focused on operations in Zaporozhye Region. “Some American officials say the fight in [Artyomovsk] has become something of an obsession for Mr Zelensky and his military leaders,”the paper said.

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‘there’s nothing like that right now in the White House. There’s no communication whatsoever.’

Jackson Hinkle: Western Elites Want War Against Russia, China (Sp.)

The US establishment is not hesitant to start World War Three to maintain its globalist dominance, American political commentator Jackson Hinkle told Sputnik’s New Rules podcast.” I guess Tucker [Carlson] has got a point when he says, ‘I’m willing to bet my house that Joe Biden is going to start World War Three with Russia,’ because look what they’ve done,” Jackson Hinkle told Sputnik. “These people are insane. Even like, taking [ex-House Speaker Nancy] Pelosi on her jet to go to Taiwan and meet with Taiwanese officials. There was a lot of people, myself included, who were thinking, ‘Goodness, the [Chinese] People’s Liberation Army (PLA) is going to shoot her out of the sky or something right now? Is this going to be how it all begins?’ They’re reckless. They are completely Russophobic and beating the drums of war to go to war with China.”

Moreover, the American elite’s hostility toward Russia has surpassed that of the Cold War era, leading to a worrying breakdown in communications between Washington and Moscow, according to the political commentator. “The level of communication breakdown is so severe compared to the Cold War,” he said. “I got to meet the guy that actually developed the telephone, they had the red hotline telephone between the US and the USSR during the Cold War. And he told me he’s like, ‘there’s nothing like that right now in the White House. There’s no communication whatsoever.’ And we’re not too far off from that same sort of a lack of dialogue with the Chinese, because they want to go to war against the Chinese.”

It did not happen overnight, according to the analyst. Over the past 30 years, Washington and its allies have reneged on all the pledges they made to Moscow at the end of the Cold War. One of them was a verbal promise that NATO would not extend an inch east of Germany. “NATO since then, at the behest of the US, has violated that promise on 16 occasions now,” Hinkle remarked. The transatlantic alliance does not conceal its plans to draw in Ukraine and possibly Georgia, thus moving even closer to Russia’s borders.”

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“You won’t see RFK, Jr. tripping on stairs, falling off his bicycle at 5 mph, or saying I have to go to bed now during a news interview.”

RFK, Jr. As A Third-Party Candidate (AT)

Even as President Joe Biden leads in the 2024 primaries, Democrat presidential contender Robert F. Kennedy Jr. has higher favorability and lower unfavorability numbers than either President Joe Biden and former President Donald Trump, (Trump 43%, Biden 41%, RFK, Jr. 14% unfavorability) according to a new poll by The Economist/YouGov. Rasmussen reports that a survey also revealed that twenty-five percent (25%) of likely Democrat voters would vote for RFK Jr. in the 2023 primaries for President. Three percent (3%) of Democrats favor author Marianne Williamson in the primaries, while seven percent (7%) would vote for another candidate. The Rasmussen Report is based on a national survey of 998 U.S. likely voters conducted September 14 and 17-18, 2023.

Teddy Roosevelt ran for president in 1912 on the Progressive Party ticket, a third party, against incumbent Republican President William Howard Taft. Taft was elected president in 1908, the successor of Teddy Roosevelt, but was defeated for reelection in 1912 by Woodrow Wilson because Roosevelt’s third party split the Republican vote. The Republicans won in 1920 with a campaign positioned around opposition to Wilson’s policies with Warren G. Harding promising a “return to normalcy.” Sound familiar? The Progressive Party was nicknamed the Bull Moose Party when Roosevelt boasted that he felt “strong as a bull moose” after losing the Republican nomination at the June 1912 convention in Chicago. RFK, Jr. is as strong as a bull moose both physically and mentally. RFK, Jr. is jacked and that is well documented. At 69, he is ripped like few others his age. He’d beat Putin in a Mr. Universe Senior contest. You won’t see RFK, Jr. tripping on stairs, falling off his bicycle at 5 mph, or saying I have to go to bed now during a news interview.

Don’t let spasmodic dysphonia, a neurological disorder that causes involuntary spasms in the larynx, cloud your judgement about RFK, Jr.’s mental acuity or toughness. He lived through the tragedy of his uncle, President John F. Kennedy and his dad’s assassinations, and has had an extraordinarily successful career as an environmental lawyer fighting for sane policies against the U.S. Department of Environment Protection and big business. His ideas on foreign policy, the economy, and other critical issues are clear, logical, and convincing. His detractors want you to believe he is feeding Americans’ hunger for conspiracies. Americans have been fed conspiracies constantly by the extreme Left. The Left bombards us every day with “conspiracy theories” that is if you liken a conspiracy to a lie.

RFK, Jr. explained convincingly the circumstances and facts surrounding his uncle’s death in a recent speech at a private residence New Hampshire. Attend one of his campaign events to find out firsthand that JFK, Jr. is a straight shooter, extremely well versed, and perspicacious on a multitude of topics affecting Main Street America. Can RFK, Jr. win the presidency on a third-party ticket? Who knows? At the very least a third party would in all likelihood obtain enough votes to allow a pro-Main Street America candidate like former President Donald J. Trump. This country needs to return to what made America great: hard work, freedom to choose, and the right to speak without fear of disparagement, or worse.

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It’s sort of amusing. But mostly, it’s deeply sad.

California Democrats Could Guarantee Trump 2024 Win (Seiler)

Trump’s actions on Jan. 6, 2021 supposedly made him the leader of an “insurrection.” The best argument against that was advanced by former U.S. Attorney General Michael Mukasey in the Wall Street Journal: “The use of the term ‘officer of the United States’ in other constitutional provisions shows that it refers only to appointed officials, not to elected ones. In US vs Mouat (1888), the Supreme Court ruled that ‘unless a person in the service of the government … holds his place by virtue of an appointment … he is not, strictly speaking, an officer of the United States. Chief Justice John Roberts reiterated the point in Free Enterprise Fund v. Public Company Accounting Oversight Board (2010): ‘The people do not vote for the Officers of the United States.” ”

Now, here’s where it gets interesting. Hypothetically, what if Mr. Mukasey’s argument doesn’t hold up in the courts? Then California and other states’ attorneys general and governors, or lawsuits by political groups, could throw Mr. Trump off the ballot. Especially critical would be the swing states with Democratic governors: Wisconsin Gov. Tony Evers, Pennsylvania Gov. Josh Shapiro, Michigan Gov. Gretchen Whitmer, Kentucky Gov. Andy Beshear, and North Carolina Gov. Roy Cooper. Or Fulton County (Atlanta) District Attorney Fani Willis, already prosecuting Trump for allegedly interfering in the 2020 election, could do it. But then, Republicans could do it in their swing states, throwing President Joe Biden off the ballot. They could say his alleged bribes from Communist China disqualify him under the 14th amendment’s Section 3 wording for having “given aid or comfort to the enemies thereof.”

Republicans governors invoking that clause could include Glenn Youngkin of Virginia, Brian Kemp of Georgia, Kim Reynolds of Iowa, Joe Lombardo of Nevada, and Chris Sununu of New Hampshire. It would be what in military parlance is called Mutual Assured Destruction. If that happened, neither Mr. Trump nor Mr. Biden would reach the 270 electoral votes needed to win the presidency in the Electoral College. Then what? Then we would have the fourth of what s called a Contingent Election, although the phrase itself isn t in the Constitution. It means the matter is decided by the House of Representatives (or the Senate for vice presidents). There have been three so far: Thomas Jefferson beat Aaron Burr in 1800; John Quincy Adams beat Andrew Jackson in 1825. And in 1837 the vice presidential election was given to Richard Mentor Johnson over Francis Granger.

Under a Contingent Election in the House, all 435 members don’t get to vote. Rather, each state delegation gets one vote, 50 votes total. On Sept. 18 Canadian political writer Stephen Marche wrote an article for the left-wing Guardian titled, Here’s the scary way Trump could win without the electoral or popular vote: In a contingent election, he could lose the popular vote, electoral college and all his legal cases and still end up the legal US president. He calculated: State delegations in the House would favor Republicans as a matter of course. In the struggle for congressional delegates, Republicans would have 19 safe House delegations and the Democrats would have 14, as it stands, with more states leaning Republican than Democrat. So California, by knocking Mr. Trump off the ballot, could guarantee he becomes president.

Again, none of this is likely to happen. If any state tries to keep him off the ballot, the courts almost certainly would put him back on, possibly reasoning along the lines Mr. Mukasey detailed. There’s one thing this whole escapade teaches us: A large number of California’s politicians hold in contempt the Constitution, democracy, and the people of the state they claim to represent. In this train-wreck of a state, with housing, homelessness, drug addiction, schooling, budget, and countless other problems festering—don’t they have anything better to do?

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“..guaranteeing the right of the Palestinian people to create an independent state within the 1967 borders..”

Middle East Security Requires Solution to Palestinian Issue – Saudi FM (Sp.)

Security in the Middle East requires a fair and comprehensive solution to the Palestinian problem, Saudi Foreign Minister Faisal bin Farhan Al Saud said on Saturday. “Security in the Middle East requires an acceleration in the search for a just and comprehensive solution to the Palestinian problem based on international law and the Arab peace initiative, guaranteeing the right of the Palestinian people to create an independent state within the 1967 borders,” the Saudi minister said at the UN General Assembly, adding that his country rejects any actions that impede the resolution of the Palestinian issue Bin Farhan Al Saud also noted the need for de-escalation in Sudan, called for a solution to the Syrian crisis and declared the country’s interest in security and stability in Yemen.

In addition, the minister said that Riyadh is striving to stabilize energy prices. On Wednesday, Saudi Crown Prince Mohammed bin Salman Al Saud said that the country is “getting closer every day” to normalizing relations with Israel. On Friday, Israeli Prime Minister Benjamin Netanyahu said that Israel is on the verge of a historic peace agreement with Saudi Arabia, which will change the face of the Middle East. Relations between Palestine and Israel have been adversarial since the latter’s founding in 1948. Palestinians seek diplomatic recognition of their independent state on the territories of the West Bank, including East Jerusalem, which is partially occupied by Israel, and the Gaza Strip. The Israeli government refuses to recognize Palestine as an independent political and diplomatic entity and continues to build settlements in the occupied areas despite objections from the United Nations.

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“..if you’re going to leave your country, go somewhere else.”

Elon Musk: Media ‘Instructed Not To Cover’ Border Crisis (Fox)

Billionaire and X, formerly known as Twitter, owner Elon Musk on Thursday accused news outlets of ignoring the crisis along the southern border because they were “instructed” not to cover it. FOX News national correspondent Bill Melugin posted on social media how local news networks are covering the migrant crisis more than other national news networks. “Watching the TVs at gym in Eagle Pass. Every single local news station in the San Antonio market, both English & Spanish, are leading their shows and have much of their A blocks centered on the border crisis and the mass illegal crossing in Eagle Pass today,” he wrote. “National networks were MIA at the bridge today, other than @FoxNews.” Musk responded to Melugin’s post by writing, “This gets no coverage because the media NPCs are instructed not to cover it.”

NPC stands for “non-player characters,” meaning scripted characters in video games that are programmed with specific behavior rather than directly controlled by a human being. The term is used online for someone who doesn’t think for themselves. Thousands of predominantly Venezuelan adult illegal immigrants moved into Texas and gathered under a nearby bridge on Wednesday. Texas troopers told FOX News that their initial count of the number of migrants moving across the water into Eagle Pass on Wednesday was about 4,000. The migrants gathered under the bridge and were waiting to be processed by Border Patrol, in the hope of being released into the U.S. Concern about the border has reached a fever pitch in recent weeks as even some Democrats are warning that the crisis has gotten out of control, while other liberal figures still reject those claims.

Democratic New York City Mayor Eric Adams made an ominous warning about the immigration crisis at a town hall meeting earlier this month. “I don’t see an ending to this. I don’t see an ending to this. This issue will destroy New York City. Destroy New York City,” he said. MSNBC host Mehdi Hasan responded by ridiculing the mayor in a social media post, referring to him as a “Trump knock-off.” Gov. Kathy Hochul, D-N.Y., similarly faced mockery after telling migrants, “We don’t have capacity, so we have to also message properly that we’re at our limit, if you’re going to leave your country, go somewhere else.”

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“..entering the US illegally now ranks up there with “basic American values.”

What Biden’s Open-Border Agenda Means For The US (Robert Bridge)

The defenders of open US borders like to sell the happy, optimistic narrative that asylum seekers are primarily innocent people looking to build a better life in the United States. The raw data, however, points to a much more complicated story. It’s the rarest occurrence of all when politicians admit that they were wrong, but that’s what is (almost) happening in Democrat-ruled cities, including New York, Chicago and Los Angeles, which are being forced to absorb a continuous influx of migrants, together with a large slab of humble pie. “Let me tell you something New Yorkers, never in my life have I had a problem that I did not see an ending to — I don’t see an ending to this,” New York City Mayor Eric Adams told a hushed audience in Manhattan as he called for federal assistance just days before the anniversary of 9/11. “This issue will destroy New York City.” “We are past our breaking point,” Adams continued with his apocalyptic plot. “New Yorkers’ compassion may be limitless, but our resources are not.”

Back on the campaign trail in 2021, Adams’ campaign posted on what was then Twitter: “We should protect our immigrants. Period. Yes, New York City will remain a sanctuary city under an Adams administration.” Much of the Democratic Party’s headache stems from the creation of so-called ‘sanctuary cities,’ defined as a municipality that limits or rejects cooperation with the federal government in enforcing immigration law. In other words, the sort of neighborhood Antifa would fully endorse. Sanctuary policies have been around since the late 1970s, but they were practically unheard-of until quite recently. The Federation for American Immigration Reform (FAIR) estimated that 564 US jurisdictions had adopted sanctuary policies in 2018. To put that into perspective, there were just 40 such protected zones when Barack Obama was sworn into the White House in 2009.

Not surprisingly, many illegal migrants, without any means of supporting themselves, flock to these ‘arrest-free’ zones where they can take advantage of social services such as housing, health care and public education without any fear of deportation. But it goes beyond just free handouts. Here is how FAIR describes sanctuary cities, and the obstacles they place in front of law enforcement and border patrol: “In their various forms, [sanctuary policies] forbid state and local officials (including law enforcement officers) from asking people about their immigration status; reporting suspected illegal aliens to the federal government; holding criminal aliens for arrest by US Immigration and Customs Enforcement (ICE); or otherwise cooperating with or assisting federal immigration enforcement agents. These policies endanger public safety and enjoy very little public support. Rather, they are the product of intense pressure from well-funded groups that oppose nearly all forms of immigration enforcement, or due to the capitulation by local officials in the face of threatened lawsuits by self-anointed ‘civil liberties’ organizations.”

The ACLU, for example, is of the opinion that the actions of sanctuary cities “represent basic American values: a spirit of inclusiveness and respect for individual rights.” In other words, entering the US illegally now ranks up there with “basic American values.”

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1900: 500,000
1970: 70,000
2022: 23,290

Rhino Population Increasing In Africa For 1st Time In Decade (RT)

The African rhino population is growing across the continent for the first time in a decade, despite poaching remaining high, the International Union for Conservation of Nature (IUCN) announced. According to the figures released ahead of the World Rhino Day on Friday, there was an estimate of 23,290 total rhinos at the end of 2022, an increase of 5.2% from the year before. Most notably, the number of white rhinos, which were assessed for The IUCN Red List of Threatened Species in 2020, has grown by 5.6% and now stands at around 16,803 animals. This is the first increase since 2012.

“With this good news, we can take a sigh of relief for the first time in a decade. However, it is imperative to further consolidate and build upon this positive development and not drop our guard,” said Dr Michael Knight, Chair of the IUCN African Rhino Specialist Group (AfRSG). According to IUCN’s website, the positive development is attributed to a combination of protection and biological management initiatives by the privately owned Platinum Rhino project, which is aimed at protecting and breeding the species to prevent extinction. Earlier this year, the project was sold to the African Parks Foundation, which plans to rewild 2,000 rhinos over the coming decade. There are five species of rhino in the world, with Africa being a home to the white and black rhinos, while the remaining three – the Sumatran, Javan and Indian rhinos – live in Asia.

Poaching remains a huge problem. According to official figures, 448 rhinos were illegally killed in South Africa in 2022, with neighboring Namibia recording 93 poached rhinos. While the numbers are still concerning, they represent a significant decline from in 2015, when 1,349 African rhinos were poached. At the beginning of the 20th century, about 500,000 rhinos roamed Africa and Asia. Their numbers dropped to just 70,000 by 1970. Despite southern white rhinos currently thriving in protected sanctuaries, the western black rhino and northern white rhinos have recently become extinct in the wild. The only two remaining northern white rhinos are kept under 24-hour guard in Ol Pejeta Conservancy in Kenya.

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Dogs ball
https://twitter.com/i/status/1705482313700712594

 

 

Elephant

 

 

Sandstone

 

 

 

 

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Jul 132019
 


Pablo Picasso Weeping woman 1937

 

Robert Mueller’s Testimony Extended, Postponed By One Week (G.)
Trump Organization Probe Likely to End With No Charges (CNN)
Nemesis Rising (Kunstler)
Epstein Accused Of Paying Witnesses $350K In Hush Money (ZH)
Wall Street Banks Bailing On Troubled US Farm Sector (R.)
Fed Rate Cut Would Ease Pressure On China’s Central Bank (CNBC)
About Half Of China’s Loans To Developing Countries Are ‘Hidden’ (CNBC)
CIA Invokes WikiLeaks in Push For Expansion Of Secrecy Law (SP)
CIA Torture Unredacted (Bureau)
US To Hold Hearing On French Tax On Big Tech (R.)
EPA Expands Use Of Pesticide Considered ‘Very Highly Toxic’ To Bees (Hill)
Meeting the last Malaysian Sumatran Rhino on Earth (Lack)

 

 

The circus comes to town one week later but with a much longer show and added attractions. This will be nuts.

Robert Mueller’s Testimony Extended, Postponed By One Week (G.)

The special counsel Robert Mueller will testify before Congress about the findings of the Russia investigation on 24 July, one week later than his appearance was originally planned, under an agreement that gives lawmakers more time to question him. Mueller had been scheduled to report on the inquiry into Russian election meddling and ties between Russia and the campaign of Donald Trump on 17 July. But lawmakers in both parties complained that the short length of the hearings would not allow enough time for all members to ask questions. Under the new arrangement, Mueller will testify for an extended period of time, three hours instead of two, before the House judiciary committee. He will then testify before the House intelligence committee in a separate hearing.

The two committees said in a statement that all members of both committees will be able to question him. In the joint statement, the panels said the longer hearing “will allow the American public to gain further insight into the special counsel’s investigation and the evidence uncovered regarding Russian interference in the 2016 presidential election and President Trump’s possible obstruction of justice and abuse of power”. Mueller has expressed his reluctance to testify and said he won’t go beyond what is in his 448-page report. But Democrats have been determined to highlight its contents for Americans who they believe have not read it. They want to extract information from the former special counsel and spotlight what they say are his most damaging findings against Trump.

Democrats are expected to ask Mueller about his conclusions, including that he could not exonerate Trump on obstruction of justice after detailing several episodes in which Trump tried to influence the investigation. Mueller also said there was not enough evidence to establish a criminal conspiracy between Trump’s presidential campaign and the Kremlin. One thing judiciary members want to focus on in questioning Mueller is whether Trump would have been charged with a crime were he not president. Mueller said at the news conference that charging a president with a crime was “not an option” because of longstanding justice department policy. But Democrats want to know more about how he made that decision and when.

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Michael Cohen couldn’t deliver.

Trump Organization Probe Likely to End With No Charges (CNN)

A federal investigation into whether Trump Organization executives violated campaign-finance laws appears to be wrapping up without charges being filed, according to people familiar with the matter. For months, federal prosecutors in New York have examined whether company officials broke the law, including in their effort to reimburse Michael Cohen for hush-money payments he made to women alleging affairs with his former boss, President Donald Trump.
In recent weeks, however, their investigation has quieted, the people familiar with the inquiry said, and prosecutors now don’t appear poised to charge any Trump Organization executives in the probe that stemmed from the case against Cohen.


In January, one month after Cohen was sentenced to three years in prison, prosecutors requested interviews with executives at the company, CNN reported. But prosecutors never followed up on their initial request, people familiar with the matter said, and the interviews never took place. Meanwhile, there has been no contact between the Manhattan US Attorney’s office and officials at the Trump Organization in more than five months, one person familiar with the matter said.

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“..the obliteration of moral and ethical boundaries by the people who ended up running things in this fretful moment of US history.”

Nemesis Rising (Kunstler)

Where are Clintons, these dog days of summer? The Hamptons? Salty, sunny Martha’s Vineyard? Under a rock somewhere in the Chappaqua woods? Fate is turning in more than one uncomfortable way for the once-charmed couple of Boomerdom. There is, of course, the freshly re-issued Jeffrey Epstein underage sex scandal, come ‘round again with a vengeance this time because there are fewer Clinton partisans left in the Department of Justice where the matter has festered for decades like a fistula slowly seeping its rot through the body politic. The vengeance emanates from the Clinton’s nemesis, the uppity Golden Golem of Greatness who dared to “steal” Hillary’s place in the Oval Office (and history).

To put it plainly, Mr. Trump had enough of the two-year-plus persecution he endured from the Clinton-inspired Mueller investigation into the Clinton-propagated Russia Collusion flim-flam. And having patiently survived this audacious, seditious effrontery, is now out to squash the Clintons like a pair of palmetto bugs. [..] And now there is the Epstein matter, which threatens not only former president Bill Clinton, but a cosmos of political, financial, and entertainment “stars” in countless ugly incidents that involve a kind of personal corruption that has no political context but says an awful lot about the obliteration of moral and ethical boundaries by the people who ended up running things in this fretful moment of US history. President Clinton has already kicked off this debacle by lying to the media about the number of rides he took on Mr. Epstein’s notorious airplane.

I voted for Bill Clinton twice. When they came up from the backwater of Little Rock, Arkansas, in 1992, they seemed like the fresh, bright antidote to twelve years of fusty Reaganism with the GHW Bush moldy cherry-on-top. Governor Bill, so glib and charming. Tall and catnip to the ladies, too! And almost immediately he was in deep shit over that part of his act, but he wiggled through it all with the aid of his perky, stalwart wife and partner, who defended him sedulously on nationwide TV. (America had never even heard about her misadventures on the Watergate Committee, where, age 27, she gained a reputation for being less than honest.) And that was followed by the first instance of Hillary moneygrubbing when she turned a few thousand bucks into a six-figure bonanza almost overnight in a wired commodities trade.

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There is so much ugliness still hidden in this. Will we ever know?

Epstein Accused Of Paying Witnesses $350K In Hush Money (ZH)

Federal prosecutors allege in a new court filing that Jeffrey Epstein may have engaged in witness tampering by paying off two potential witnesses days before the Miami Herald began publishing a series of explosive exposés about the registered sex offender and his victims. According to financial records, Epstein wired $350,000 to two ‘possible co-conspirators’ who could testify against him. $100,000 was wired from “Institution-1” to one person, while just three days later $250,000 was wired to another individual. Neither of the payments appear to be recurring based on five years of bank records. Is one of the co-conspirators Ghislaine Maxwell? The daughter of a British media barron, Maxwell was described by one Epstein accuser in a 2017 lawsuit as “the highest ranking employee” of his alleged enterprise, in which she was said to have managed both Epstein’s household and his sex life.

Via the Wall Street Journal: “Ghislaine Maxwell, daughter of a British media baron, was a fixture for years in Manhattan’s social scene, often written about in tabloids for her close ties to British royalty and to a mysterious financier named Jeffrey Epstein. But Mr. Epstein’s arrest last week on sex-trafficking charges has brought renewed attention to her alleged role as one of his top aides. Ms. Maxwell, 57 years old, has been accused by three women in affidavits and other court filings of recruiting young women for Mr. Epstein and training them for sex. Two of the women have alleged that Ms. Maxwell, together with Mr. Epstein, sexually assaulted them, according to the filings.

What’s more, “Juan Alessi, who said in one of the depositions that he served as the Palm Beach house manager from around 1992 through 2002, described a basket of sex toys in Ms. Maxwell’s bathroom closet. He said he would find them around when he cleaned up after visits from the young women,” according to the Journal.

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Only Big Ag deals with Wall Street.

Wall Street Banks Bailing On Troubled US Farm Sector (R.)

In the wake of the U.S. housing meltdown of the late 2000s, JPMorgan Chase & Co hunted for new ways to expand its loan business beyond the troubled mortgage sector. The nation’s largest bank found enticing new opportunities in the rural Midwest – lending to U.S. farmers who had plenty of income and collateral as prices for grain and farmland surged. JPMorgan grew its farm-loan portfolio by 76 percent, to $1.1 billion, between 2008 and 2015, according to year-end figures, as other Wall Street players piled into the sector. Total U.S. farm debt is on track to rise to $427 billion this year, up from an inflation-adjusted $317 billion a decade earlier and approaching levels seen in the 1980s farm crisis, according to the U.S. Department of Agriculture.


But now – after years of falling farm income and an intensifying U.S.-China trade war – JPMorgan and other Wall Street banks are heading for the exits, according to a Reuters analysis of the farm-loan holdings they reported to the Federal Deposit Insurance Corporation (FDIC). The agricultural loan portfolios of the nation’s top 30 banks fell by $3.9 billion, to $18.3 billion, between their peak in December 2015 and March 2019, the analysis showed. That’s a 17.5% decline.

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I meant to do that?!

Fed Rate Cut Would Ease Pressure On China’s Central Bank (CNBC)

A widely expected interest rate cut by the U.S. Federal Reserve would give China more breathing room in shoring up its slowing economy, some analysts said. Overnight, markets took Fed Chairman Jerome Powell’s comments during the first of a two-day Congressional testimony as affirming expectations for easier monetary policy in the U.S. The S&P 500 briefly topped 3,000 for the first time, and Treasury yields edged lower. A looser monetary policy environment would reduce pressure on China’s central bank to ease monetary policy. Amid trade tensions with the U.S., China’s economy has struggled to gain momentum.


Private surveys released last week by Caixin showed services activity fell in June to its lowest since February, and the manufacturing sector contracted, after three months of expansion. Among several measures to support the economy over the last several months, the People’s Bank of China (PBoC) has made targeted attempts to lower financing costs to privately run enterprises, which account for the majority of the country’s economic growth and employment. “If the Fed does go ahead and cut rates, which I don’t think is a given … it simply means the PBoC has a little breathing room to see if the policies it has implemented have an impact on the real economy,” Hannah Anderson, global market strategist at J.P. Morgan Asset Management, told CNBC on Thursday by phone.

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“Between 2000 and 2017, other countries’ debt owed to China soared ten-fold, from less than $500 billion to more than $5 trillion..”

“..debt has increased on average from less than 1% of their GDP in 2015, to more than 15% in 2017..”

About Half Of China’s Loans To Developing Countries Are ‘Hidden’ (CNBC)

China’s lending to other countries has surged in the past decade, causing debt levels to jump dramatically, and as much as half of such debt to developing economies is “hidden,” a new study has found. Such “hidden” debt means that the borrowing isn’t reported to or recorded by official institutions such as the IMF, the World Bank, or the Paris Club — a group of creditor nations. Between 2000 and 2017, other countries’ debt owed to China soared ten-fold, from less than $500 billion to more than $5 trillion — or from 1% of global economic output to more than 5%, according to the study from Germany-based think tank the Kiel Institute for the World Economy. “This has transformed China into the largest official creditor, easily surpassing the IMF or the World Bank,” the report’s researchers said.


The study, which looked at nearly 2,000 Chinese loans to 152 countries from 1949 to 2017, was undertaken by well-known debt expert Carmen Reinhart from Harvard University, as well as Kiel Institute’s Christoph Trebesch and Sebastian Horn. For 50 developing countries which have borrowed from China, that debt has increased on average from less than 1% of their GDP in 2015, to more than 15% in 2017, according to estimates by the study’s researchers. “Advanced and higher middle income countries tend to receive portfolio debt flows, via sovereign bond purchases of the People’s Bank of China, ” the report said. “As a result, many advanced countries have become highly indebted towards the Chinese government.”

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There’s Adam Schiff for you in all his glory. Watch for him in the Mueller hearings too.

CIA Invokes WikiLeaks in Push For Expansion Of Secrecy Law (SP)

When the CIA and other agencies in the United States government pushed for the Intelligence Identities Protection Act (IIPA) in 1981, it was crafted to exclude “covert agents” who resided in the U.S. There was consideration by the House Permanent Select Committee on Intelligence of how the legislation might “chill or stifle public criticism of intelligence activities or public debate concerning intelligence policy.” More than three decades later, the CIA is apparently unsatisfied with the protections the bill granted “covert agents. It has enlisted a select group of senators and representatives to help expand the universe of individuals who are protected, making members of the press who cover intelligence matters more vulnerable to prosecution.

Democratic Representative Adam Schiff, chairman of the House intelligence committee, was involved in adding language to expand the IIPA to the Intelligence Authorization Act moving through Congress. “Schiff is once again putting the interests of the intelligence agencies in concealing their misdeeds ahead of protecting the rights of ordinary Americans by criminalizing routine reporting by the press on national security issues and undermining congressional oversight in his Intelligence Authorization bill,” declared Daniel Schuman, who is the policy director for Demand Progress. Schuman added, “Schiff’s expansion of the Intelligence Identities Protection Act beyond all reason will effectively muzzle reporting on torture, mass surveillance, and other crimes against the American people—all at the request of the CIA. Schiff is clearly the resistance to the resistance, and he should drop this provision from his bill.”

The CIA put their specific request for what language they would like amended in writing and sent it to the Senate Select Committee on Intelligence. Their request was essentially copied and pasted, with no changes, into the intelligence bill. “Undercover agency officers face ever-evolving threats, including cyber threats,” the CIA argued. “Particularly with the lengths organizations such as WikiLeaks are willing to go to obtain and release sensitive national security information, as well as incidents related to past agency programs, such as the RDI investigation [CIA torture report], the original congressional reasoning mentioned above for a narrow definition of ‘covert agent’ no longer remains valid.”

“This proposal would provide protection for all undercover agency officers by allowing for the prosecution of individuals responsible for disclosing the identities of those officers, regardless whether the undercover officer serves inside or outside of the United States,” the agency additionally stated. Schiff supports the prosecution of WikiLeaks founder Julian Assange and shares the CIA’s view that WikiLeaks is a “non-state hostile intelligence service,” not a media organization. In 2018, when Assange was willing to speak with investigators about the Russia probe, he replied, “Our committee would be willing to interview Julian Assange when he is in U.S. custody, not before.”

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Do I want to read this report?

CIA Torture Unredacted (Bureau)

In December 2014, the Bureau, alongside The Rendition Project, began a major project to trace the history of the RDI programme. The impetus for our investigation came from the long-awaited publication of a report into CIA torture by the US Senate Select Intelligence Committee. The authors of this report had high-level access to internal CIA documents, which they mined to produce a damning assessment of the torture programme’s brutality, mismanagement and ineffectiveness. But they were compelled by the Obama administration, and by the CIA itself, to censor — “redact” — all parts of the report that could identify specific times and places where abuses had occurred.

This is important, because without being able to tie illegal activities to specific times and places, the quest for redress is hamstrung, and meaningful accountability — legal, public, historical — remains a mirage. The Senate report did offer a crucial insight, however: the first complete list of prisoners held in the CIA’s black sites. 119 names, each with a date of custody (redacted) and a record of how many days they were held (also partly redacted). In the days after the publication of the Senate report, we set to work reconstructing this list to reveal the hidden dates. Figuring out a date often meant that we could match it to a flight record; matching to a flight record meant that we could determine where a prisoner was brought from or sent to.

As we cross-correlated thousands of data points — from declassified government documents, footnotes in the Senate report, aviation data, records of corporate outsourcing of rendition flights, legal cases, media reporting and NGO investigations — the contours of the CIA’s programme of secret detention and torture began to emerge more clearly. Rather than just understanding certain individual histories, we could begin to discern the entire scope of the programme’s development. More than four years later, we’re publishing the results of our investigation in a 400-page report entitled CIA Torture Unredacted. It is the first time that the entirety of the CIA’s detention programme has been systematically revealed.

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“Other EU countries including Austria, Britain, Spain and Italy have also announced plans for their own digital taxes.”

US To Hold Hearing On French Tax On Big Tech (R.)

The U.S. Trade Representative’s (USTR) Office will hold a hearing on Aug 19 in its probe of France’s new planned tax on big technology companies, calling the proposal “unreasonable.” President Donald Trump on Wednesday ordered an investigation into the tax, which could lead to the United States imposing new tariffs or other trade restrictions. USTR said in a public notice the levy was an “unreasonable tax policy.” The plan departs from tax norms because of “extraterritoriality; taxing revenue not income; and a purpose of penalizing particular technology companies for their commercial success,” it said. USTR added that statements by French officials suggest the tax will “amount to de facto discrimination against U.S. companies… while exempting smaller companies, particularly those that operate only in France.”


The tax is due to apply retroactively from the start of 2019. USTR said that calls into question the fairness of the tax. On Thursday, the French Senate approved the 3% levy that will apply to revenue from digital services earned in France by firms with more than 25 million euros in French revenue and 750 million euros ($845 million) worldwide. Other EU countries including Austria, Britain, Spain and Italy have also announced plans for their own digital taxes. They say a levy is needed because big, multinational internet companies such as Facebook and Amazon are currently able to book profits in low-tax countries like Ireland, no matter where the revenue originates. Political pressure to respond has been growing as local retailers in high streets and online have been disadvantaged.

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The crazies.

EPA Expands Use Of Pesticide Considered ‘Very Highly Toxic’ To Bees (Hill)

The Environmental Protection Agency (EPA) announced Friday it would allow for the expanded use of a pesticide it considers toxic to bees, a move that comes just days after the Trump administration said it was suspending data collection on bee populations. The pesticide known as sulfoxaflor will be permitted for use on certain crops for the first time, and in other areas that were prohibited under the Obama administration. The agency considers sulfoxaflor “very highly toxic” to bees. In a call with reporters to announce the decision, a top EPA official emphasized the agency’s research on the pesticide’s effects on bees and said the rule was designed with pollinators in mind.


“To reduce exposure to bees, the product label will have crop-specific restrictions and important pollinator protection language,” including limits on how close to bloom sulfoxaflor can be sprayed, the official said. But it may be difficult to monitor whether the regulations spare bees as intended. The U.S. Department of Agriculture announced last week it was suspending one of the few remaining government data sets that monitor bee populations and loss. “At a time when honeybees and other pollinators are dying in greater numbers than ever before, Trump’s EPA decision to remove restrictions on yet another bee-killing pesticide is nothing short of reckless,” Earthjustice, which fought sulfoxaflor use in the 2015 suit, said in a statement Friday. “Scientists have long said pesticides like sulfoxaflor are the cause of the unprecedented colony collapse. Letting sulfoxaflor back on the market is dangerous for our food system, economy, and environment.”

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“..perhaps I will abstain from telling them of the heart-shattering, breath-snatching moment I gazed into the deep eyes of the last of a species, every sense trembling with anticipation.”

Meeting the last Malaysian Sumatran Rhino on Earth (Lack)

Deep set beady eyes peer from folds of thick leather skin. They close slowly in a leisurely, ponderous blink. Nostrils flare with each warm, damp exhalation, causing a slight rise of the stubby nasal horn that rests on those cavernous nostrils. I stare at this primitive, prehistoric creature which seems to have just trundled out of the Jurassic Period. Her skin is leather-thick, her face is topped by a firm horn and her species is over 20 million years old. She seems invincible. Somehow our soft-skinned species has managed to mangle her population down and down until today, when only one Malaysian Sumatran Rhino exists on earth. And there I stand looking into her eyes. She is called Iman. Iman means faith.

Faith is a funny concept when you stand looking at the very last individual of a species and your ears ring with her plaintive cries. Rather than feel faith in humanity, I felt a deep loss, a deep hopelessness. That was only after five minutes of meeting Iman. Yet behind me stood Dr Junaidi Payne and Dr Zainal Zahari Zainuddin, who have been working on protecting the Sumatran Rhino in Sabah for almost their whole lives. They were there in 2017 when Puntung had to be euthanised. They were there in May this year when Tam, the last male, died. They will, most likely, be there when Iman breathes her last breath. The last breath of a species. They have front row seats of the sixth mass extinction, directed and produced wholly by humans.


Iman cannot be saved. It is the brutal yet undeniable truth that one day she will be gripped by illness or old age and will leave us. If I choose to have children, their world will be undoubtedly different to ours today. Perhaps they will cry at the abundance of life that has been ravaged by their ancestors. Perhaps they will listen to the story of the time I met Iman. But perhaps I will abstain from telling them of the heart-shattering, breath-snatching moment I gazed into the deep eyes of the last of a species, every sense trembling with anticipation. Rhino and girl. We were two, yet we were alike. Our hearts both pounding as we watched each other, our gazes both narrowed and our breath quickened.

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Oct 302018
 


Pablo Picasso Sleeping peasants 1919

 

Global Wildlife Populations Have Fallen By 60% Since 1970 (R.)
Alarm As China Eases 25-Year Ban On Rhino And Tiger Parts (BBC)
Climate Change Is ‘Escalator To Extinction’ For Mountain Birds (BBC)
Massive Canadian Glaciers Shrinking Rapidly (G.)
Fed May Have To Adjust The Way It’s Raising Rates (CNBC)
Amazon Shares Are Cratering – Down 6% Monday, 23% In The Past Month (CNBC)
China’s Economic Slump Accelerated In October (ZH)
5 More Years Of Austerity In Event Of No-Deal Brexit – Chancellor (Ind.)
With Just Days to the Midterms, Russiagate Is MIA (Maté)
Khashoggi Murder Tape Will Never Be Made Public: Turkish Source (MEE)
Britain ‘Knew Of Khashoggi Plot And Begged Saudi Arabia To Abort Plans’ (Exp.)
Seeking A Bargain, And Taste Of The Good Life, Chinese Buy Greek Homes (R.)
Assange’s Lawsuit Over Asylum Conditions Denied By Ecuador Judge (RT)
Decline Of Greyhound Service Mirrors Rural Canada’s Plight (G.)

 

 

“We are the first generation to know we are destroying the planet and the last to be able to do anything about it”

Global Wildlife Populations Have Fallen By 60% Since 1970 (R.)

Global wildlife populations have fallen by 60% since 1970 as humans overuse natural resources, drive climate change and pollute the planet, a report warns. WWF has called for an ambitious “global deal” for nature and people, similar to the international Paris Agreement to tackle climate change, as the conservation charity’s new report spelled out the damage being done to the natural world. Only a quarter of the world’s land area is free from the impacts of human activity and by 2050 that will have fallen to just a tenth, the Living Planet Report 2018 says. The percentage of the world’s seabirds with plastic in their stomach is estimated to have increased from 5% in 1960 to 90% today, and the world has already lost around half its shallow water corals in just 30 years.

Overall, populations of more than 4,000 species of mammals, reptiles, birds, fish and amphibians have declined by an average of 60% between 1970 and 2014, the most recent year for which data is available. Tropical areas have seen the worst declines, with an 89% fall in populations monitored in Latin America and the Caribbean since 1970. Species which live in fresh water habitats, such as frogs and river fish, have seen global population falls of 83%, according to the living planet index by the Zoological Society of London (ZSL) which tracks the abundance of wildlife. From hedgehogs and puffins to elephants, rhinos and polar bears, wildlife is in decline, due to the loss of habitats, poaching, pollution of land and seas and rising global temperatures, the Living Planet report warns.

Current action to protect nature is failing because it is not enough to match the scale of the threat facing the planet, the conservationists claim. “Exploding” levels of human consumption are driving the impacts on nature, with over-exploitation of natural resources such as over-fishing, cutting down forests to grow crops such as soy and palm oil and the use of pesticides in agriculture. Climate change and plastic pollution are also significant and growing threats.

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We’re going to have to boycott trade with China because of this.

Alarm As China Eases 25-Year Ban On Rhino And Tiger Parts (BBC)

Animal conservationists are alarmed over China’s decision to partially reverse a ban on the trade of tiger bones and rhino horn. Rhinos and tigers are both endangered in the wild and China prohibited their trade in 1993. But on Monday it said parts from captive animals would be authorised for scientific, medical and cultural use. Experts worry this will increase demand for the animals and jeopardise efforts to protect them. Rhino and tiger parts are highly valued in traditional Chinese medicine. They are prescribed to treat a large variety of ailments including fever, gout, insomnia and meningitis, thought any benefits have not been proven.

In a statement announcing the replacement of the 25-year old ban, the State Council said powdered forms of rhino horn and bones from dead tigers could be used in “qualified hospitals by qualified doctors”. The animal products can only be obtained from farms, it said. Parts from those animals classified as “antiques” could be used in cultural exchanges if approved by the cultural authorities, the statement adds. The World Wildlife Fund (WWF) said in a statement that the move would have “devastating consequences” and be an “enormous setback” to efforts to protect the animals in the wild.

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Species already living in the earth’s ‘extremes’ have nowhere to go.

Climate Change Is ‘Escalator To Extinction’ For Mountain Birds (BBC)

Scientists have produced new evidence that climate change is driving tropical bird species who live near a mountain top to extinction. Researchers have long predicted many creatures will seek to escape a warmer world by moving towards higher ground. However, those living at the highest levels cannot go any higher, and have been forecast to decline. This study found that eight bird species that once lived near a Peruvian mountain peak have now disappeared. Researchers are particularly concerned about tropical mountain ranges and the impacts of climate change. “The tropical mountain areas are the hottest of biodiversity hotspots; they harbour more species than any other place on Earth,” lead author Dr Benjamin Freeman from the University of British Columbia told BBC News.

“It’s only got a little bit warmer in the tropics and tropical plants and animals seem to be living quite a bit higher now than they used to.” The species that live in these regions are also hugely vulnerable because the difference in temperatures between lower and higher elevations in tropical regions is not as great as it is in other parts of the world. This means that moving up the slopes may not be as much of a solution for species in the tropics as it is elsewhere. [..] scientists carried out a survey in 2017 of bird species that lived on a remote Peruvian mountain peak. The team covered the same ground, at the same time of year, and used the the same methods as a previous survey, carried out in 1985.

They found that on average, species’ ranges had shifted up the slope between the two surveys. Most of the species that had been found at the highest elevations declined significantly in both range and abundance. The researchers say that recent warming constitutes an “escalator to extinction” for some of these species with temperatures in the area increasing by almost half a degree Celsius between the two surveys. Of 16 species that were restricted to the very top of the ridge, eight had disappeared completely in the most recent survey.


A scarlet-breasted fruiteater which inhabits high elevations on the Cerro de Pantiacolla in Peru Photo: Graham Montgomery

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“We’re slated to lose 80% of the ice cover in the Rocky Mountains over the next 50 years.”

Massive Canadian Glaciers Shrinking Rapidly (G.)

Scientists in Canada have warned that massive glaciers in the Yukon territory are shrinking even faster than would be expected from a warming climate – and bringing dramatic changes to the region. After a string of recent reports chronicling the demise of the ice fields, researchers hope that greater awareness will help the public better understand the rapid pace of climate change. The rate of warming in the north is double that of the average global temperature increase, concluded the US National Oceanic and Atmospheric Administration in its annual Arctic Report Card, which called the warming “unprecedented”. “The region is one of the hotspots for warming, which is something we’ve come to realize over the last 15 years,” said David Hik of Simon Fraser University. “The magnitude of the changes is dramatic.”

In their recent State of the Mountains report published earlier in the summer, the Canadian Alpine Club found that the Saint Elias mountains – which span British Columbia, the Yukon and Alaska – are losing ice faster than the rest of the country. Previous research found that between 1957 and 2007, the range lost 22% of its ice cover, enough to raise global seal levels by 1.1 millimetres. “When I first went to the St Elias range, it felt like time travel – into the past,” said Hik, who co-edited the report. “What we’re seeing now feels like time travel into the future. Because as the massive glaciers are retreating, they’re causing a complete reorganization of the environment.”

“We’re seeing a 20% difference in area coverage of the glaciers in Kluane national park and reserve and the rest of the Unesco world heritage site [over a 60-year period],” Diane Wilson, a field unit superintendent at Parks Canada, told the CBC. “We’ve never seen that. It’s outside the scope of normal.” In the St Elias range, researchers have found warming intensifies at higher altitudes – a phenomenon they are not quite able to explain. “These types of events aren’t isolated to glacial events in the St Elias,” said Zac Robinson, the report’s co-author and professor at the University of Alberta. “We’re slated to lose 80% of the ice cover in the Rocky Mountains over the next 50 years.”

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Take away their power.

Fed May Have To Adjust The Way It’s Raising Rates (CNBC)

Along with an expected rate hike in December, some central bank watchers expect the Federal Reserve to approve another tweak to ensure that its current policy path, which has come under increasing pressure lately, proceeds smoothly. If the Fed is unable to manage the range where it keeps its benchmark interest rate, that could lead it to halt the unwinding of its balance sheet comprised of bonds it purchased to lower mortgage rates and stimulate the economy. The economic and market ramifications could be substantial, though there’s no indication now that the Fed is considering halting the balance sheet reduction.

The market has long been expecting the Fed to go through with a 25 basis point (0.25 percentage point) increase in its benchmark funds rate at the year’s final Federal Open Market Committee Meeting. Under normal circumstances, such a move would be accompanied by a commensurate quarter-point hike in the interest the Fed pays on excess reserves from banks, or the IOER. The current level is 2.2%, compared to the 2% to 2.25% range for the funds rate. However, the funds rate has risen near the top boundary of its range, to 2.2% to equal the IOER, and that presents a problem. The Fed uses the IOER to guide the funds rate, generally as a floor for where the funds rate should be.

The central bank manages its funds rate through the interest rate on reserves and its overnight repo facility, which also helps the Fed to set a floor on rates. This year, as government debt issuance has surged and rates have increased on the repo purchases in which the Fed has purchased, the funds rate has drifted to the upper end of its target range. Back in June, the Fed addressed the issue by raising the IOER just 20 basis points to try to push the funds rate more toward the center of the range. That worked for a few months, but the two rates have drifted closer together and on Oct. 23 met at 2.2%. The Fed has “lost control over rates” at the upper bounds of its target range, said Michael Pearce, senior U.S. economist at Capital Economics.

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Bezos lost 23% of his fortune in a month. That’s tens of billions.

Amazon Shares Are Cratering – Down 6% Monday, 23% In The Past Month (CNBC)

Amazon shares closed down 6.3% on Monday suffered their steepest two-day tumble in more than four years, as investors continued to flee the stock following Thursday’s disappointing earnings report. The stock dropped $103.93 to $1,538.88 at the close, after losing $139.36, or 7.8%, on Friday, and is trading at its lowest price since April, down 23% over the past month. The 13.7-percent drop over two days is the biggest decline since February 2014, when the shares plummeted 14.1%. Amazon reported third-quarter revenue last week that trailed analysts’ estimates and also provided a fourth-quarter outlook that was below expectations.

The stock dragged down the Nasdaq, which closed down 1.6% on Monday. Netflix, which like Amazon has been a favored stock for tech investors in recent years, is in the midst of a hefty two-day drop, down 9%. Monday was a tumultuous day for tech stocks broadly as markets opened to the news that IBM agreed to buy cloud software distributorRed Hat for $34 billion, a 63% premium. Red Hat surged on the news, while IBM was down 4.1%.

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Nothing stabilizes.

China’s Economic Slump Accelerated In October (ZH)

As corporate defaults surge, forcing a desperate PBOC to reverse its deleveraging efforts and threaten more interventions to stave off a more serious retrenchment in growth in the world’s second largest economy, it seems like not a day goes by without another warning sign that China’s economic precarious situation is even worse than we thought. The impact this has had on the mainland investors’ psyche has been obvious to all. Repeated interventions by China’s ‘National Team’ have done little to arrest the inexorable decline in mainland stocks in October, leaving the Shanghai Composite, the country’s main benchmark index, on track for one of its worst months since the financial crisis, and its worst year since 2011.

Meanwhile, a flood of FX outflows has pushed the Chinese yuan dangerously close to the 7 yuan-to-the dollar threshold which, if breached, could unleash another wave of chaos across global markets. And as Chinese policy makers are probably already scrambling to pad the official stats, Bloomberg has released its own proprietary preliminary gauge of Chinese GDP in October which showed that the slowdown unleashed by the US-China trade war worsened in October. The Bloomberg Economics gauge aggregates the earliest-available indicators on business conditions and market sentiment, and unequivocally affirmed that the Communist Party’s efforts to stabilize the country’s economy and markets – the party this month introduced a raft of measures to stabilize sentiment, including steps to boost liquidity in the financial system, new tax deductions for households and targeted measures aimed at helping exporters – haven’t been successful – at least not yet.

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Okay, well, get a deal then.

5 More Years Of Austerity In Event Of No-Deal Brexit – Chancellor (Ind.)

Austerity will continue for five more years if Britain crashes out of the EU with no deal, Philip Hammond signalled, in a Budget warning to MPs threatening to vote down Theresa May’s Brexit plans. The chancellor unveiled a Budget giveaway that cut income tax, announced a tax on the tech giants and conceded to pressure to help the victims of the bungled universal credit shake-up. But, most significantly, Mr Hammond made clear the prime minister’s promise that “austerity will be over” would only be met in full if Britain sidesteps economic damage from Brexit and the growing risk of leaving the EU with no agreement next March. pending would rise by 1.2% per year from next year, he announced – but immediately acknowledged the £20bn for the NHS would gobble up all the extra cash.

All other departments would only “keep pace with inflation”, a Treasury source said, before adding, tantalisingly: “If there’s a good deal, there’s an increase”. It appeared to be a clear warning to MPs that plunging Britain into the chaos and damage of a no-deal Brexit would prolong the pain of austerity for years to come. Some key departments – covering spending on the police, the courts and benefits – are still heading for cuts in day-to-day spending until 2022, the Budget book showed.

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Ain’t that curious?

With Just Days to the Midterms, Russiagate Is MIA (Maté)

The upcoming midterms are widely seen as a referendum on Donald Trump’s presidency, but its defining issue to date is notably MIA. “Campaign ads and debates are mostly avoiding the Russia investigation,” Politico reports, “in favor of other issues important to voters…like the economy, health care and taxes.” One study of political ads over a four-week period through mid-October found that 0.1% of ads aired in congressional races mentioned Russia; there were zero mentions of Russia in ads for Senate races.

On one level, it is unsurprising that the election has been focused on issues that impact voters’ lives, rather than the byzantine bureaucratic drama that has consumed Washington and elite media since Trump’s election. But after months of fearmongering about a sweeping Russian interference effort and a compromised, complicit president, perhaps we are also seeing the penny start to drop: Russiagate, for all its hype, has not gone as advertised.

Take the supposed Russian threat to the midterms. For months, intelligence officials and prominent media outlets have bombarded us with warnings about “a pervasive messaging campaign by Russia to try to weaken and divide the United States” (Director of National Intelligence Dan Coats), a threat so dire that we might as well dub the vote the “The Moscow Midterms” (FiveThirtyEight) and acknowledge that “we’re defenseless against Russian sabotage in the midterm elections,” (Washington Post columnist Jennifer Rubin). The New York Times informed readers in July that Coats had likened “the persistent danger of Russian cyberattacks today…to the warnings the United States had of stepped-up terror threats ahead of the Sept. 11, 2001, attacks.” “The warning lights are blinking red again,” he said.

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Pompeo didn’t want to listen b/c he didn’t want to make a statement on it: Fox

Saudi Prosecutor demanded but couldn’t get the tape: AJ

Khashoggi Murder Tape Will Never Be Made Public: Turkish Source (MEE)

Turkey will never make its recordings of Jamal Khashoggi’s murder public, a government source told Middle East Eye, because they were made secretly and in contravention of international law. Instead, Turkey is placing the onus of officially revealing the details of the journalist’s assassination on Saudi Arabia’s Istanbul consulate on Riyadh. On Monday, as the Saudi prosecutor met with his Turkish counterpart in Istanbul, Foreign Minister Mevlut Cavusoglu called on Riyadh to release the “whole truth” behind Khashoggi’s killing. Khashoggi, a prominent Saudi journalist and critic of the kingdom’s crown prince, Mohammed bin Salman (MBS), was murdered on 2 October by a hit squad of 15 Saudis sent to kill him.

Turkish sources who have listened to the audio recording of Khashoggi’s death have told MEE that the Washington Post columnist was tortured, murdered and dismembered after entering the consulate to obtain divorce papers The existence of the audio recording of Khashoggi’s murder has long been touted as a crucial piece of evidence held by the Turkish government. However, a government source told MEE on Monday that the tape would never officially be made public because the recording was obtained through “intelligence work” and could therefore not be used as legal evidence. Diplomatic missions such as the Saudi consulate in Istanbul are protected under the Vienna Convention, meaning Turkish spying on the building would be unlawful.

Turkish President Recep Tayyip Erdogan and the United Nations’ human rights chief have both said the extreme circumstances of the Khashoggi murder should be grounds enough to strip the consulate and its workers of diplomatic immunity, in order to facilitate the best possible investigation.

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They knew and didn’t tell anyone, not even the US.

Britain ‘Knew Of Khashoggi Plot And Begged Saudi Arabia To Abort Plans’ (Exp.)

Murdered journalist Jamal Khashoggi was about to disclose details of Saudi Arabia’s use of chemical weapons in Yemen, sources close to him said last night. The revelations come as separate intelligence sources disclosed that Britain had first been made aware of a plot a full three weeks before he walked into the Saudi consulate in Istanbul. Intercepts by GCHQ of internal communications by the kingdom’s General Intelligence Directorate revealed orders by a “member of the royal circle” to abduct the troublesome journalist and take him back to Saudi Arabia.

[..] Speaking last night the intelligence source told the Sunday Express: “We were initially made aware that something was going in the first week of September, around three weeks before Mr Khashoggi walked into the consulate on October 2, though it took more time for other details to emerge. “These details included primary orders to capture Mr Khashoggi and bring him back to Saudi Arabia for questioning. However, the door seemed to be left open for alternative remedies to what was seen as a big problem. “We know the orders came from a member of the royal circle but have no direct information to link them to Crown Prince Mohammad bin Salman. “Whether this meant he was not the original issuer we cannot say.”

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The entire country’s for sale. Athens will all be on Airbnb, and there’ll be no place left for Greeks.

Seeking A Bargain, And Taste Of The Good Life, Chinese Buy Greek Homes (R.)

Three times a week, hundreds of Chinese investors arrive at Athens airport to be greeted by Greek real estate agents who drive them straight into the city to view apartments for sale. The visitors are drawn to Greece by rock-bottom property prices and one of Europe’s most generous “golden visa” schemes, offering a renewable five-year resident’s permit in return for a 250,000 euro ($285,000)investment in real estate. That’s enough to buy a three-bedroom apartment in the capital with a view to the Acropolis hill. It is also enough to bring the first glimmers of recovery to the market since the Greek economy started to collapse after the debt crisis in 2009, although prices are still down by about 40% from their peak.

One Athens resident, who gave his name only as Vassilis, had almost given up finding a buyer for his home last year when a minivan pulled up outside his maisonette and a Chinese family of four got out. A day later, he got an offer. “They didn’t see the house again. We went and got a down-payment, and everything was set in motion,” he said. Vassilis had bought the home in the up-and-coming suburb of Gerakas for 320,000 euros ($367,000) in 2007 and decided to sell in order to buy his two adult children their own apartments. He sold it to the Chinese family for 220,000 euros. Real estate prices rose 0.8% in the second quarter year-on-year after a 0.1% rise in the first – the first pick-up since 2008, according to Bank of Greece data.

Foreign direct investment in property jumped 91% to 287 million euros last year from 2016, the bank’s data showed. Meanwhile, taxes from property sales rose by an annual 41% in the seven months to July to 204.7 million euros, according to data from state revenue authority AADE. “We are getting much more phone calls,” said Lefteris Potamianos, head of the Real Estate Association of Athens, which represents about 3,000 brokers. “The overwhelming majority is foreigners and there are yet some Greeks. Certainly, Chinese are by far ahead of the game.”

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He’ll appeal.

Assange’s Lawsuit Over Asylum Conditions Denied By Ecuador Judge (RT)

An Ecuadorian judge has thrown out the lawsuit by Julian Assange, who objected to the harshly revised terms of his asylum. The WikiLeaks co-founder has been trapped at the Embassy of Ecuador in London since 2012.
The judge made the decision following a lengthy hearing held by teleconference. Ecuador will maintain Assange’s asylum as long as he wants to keep it, but he must follow the rules laid out for him by the government, an unnamed government official told Reuters on Monday. The new rules, which were leaked earlier this month by an opposition politician, involve a list of restrictions Assange has argued violate his “fundamental rights and freedoms” as well as Ecuadorian and international law.

Among them are restrictions on discussing politics and receiving visitors, and demands of Assange to pay for his own food, medical care, laundry and related expenses of living at the embassy starting December 1. Ecuador has also threatened to seize Assange’s pet cat if he did not care for it properly, according to the leaked regulations. In the teleconference Monday, Assange accused Ecuador of using him as a “bargaining chip” in talks with the US and UK governments, and submitting to pressure from Washington and London. Ecuadorian Attorney General Inigo Salvador Crespo responded by calling those statements “malicious and perverse,” according to the newspaper El Comercio.

The new regulations and special protocols governing Assange’s visitations were put together for the purpose of making Assange’s continued stay at the embassy “harmonious,” Crespo argued. “It is a public building that was not intended for housing, so there must be regulation,” he told the judge.

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Canada is huge. We’re talking 10 hour bus trips. There’s nothing to replace them.

Decline Of Greyhound Service Mirrors Rural Canada’s Plight (G.)

It’s 10 to midnight when the Winnipeg-bound Greyhound bus swings off of the empty highway and into a dirt lot illuminated by a single street lamp. Its headlights sweep across the only passenger waiting in this remote lumber town: Mary Reimer, 80, is bundled in a purple parka against the cold. “Since my husband passed away four years ago, this is how I get to my sister,” she says, before climbing aboard. It’s the last time she’ll make the journey this way. Amid cratering passenger figures, Greyhound will discontinue all service in Canada’s western provinces on 31 October. The cuts will eliminate routes that have existed for nearly a century and sever the only transit link for dozens of towns where the British-owned company has endured even as other businesses have trickled away.

Some analysts see it as yet another indicator that rural Canada is not only struggling, but slowly decoupling from the country’s thriving urban cores. Don Warkentin has witnessed these changes. After 34 years driving Greyhound buses between Winnipeg and the mining city of Flin Flon eleven hours north, he’ll retire next week along with his route. One of 415 employees phased out by the cuts, he remembers when Greyhound made three runs a day on this stretch, with 24-hour depots at each stop. Now there’s one bus nightly, and most stops are bare-bones roadside pull-offs like this one. “Not as many people are riding these days,” he says, pushing Reimer’s luggage into the undercarriage. “It’s an Uber culture now.”

For those that can’t afford an Uber or the high cost of gas, Greyhound’s decision to write off much of the Canadian frontier is more than an inconvenience. “Greyhound is a private company, but they were almost public transportation in terms of the service they provided,” says Cathy Sproule, a member of the New Democratic party congress in Saskatchewan. But Greyhound hasn’t turned a profit on some of those routes in over a decade. Since 2010, ridership has tumbled by 41%, hollowed out by urban migration, discount airlines and rising car ownership. After this month, its buses will no longer travel to points west of Sudbury, Ontario. [..] “We see a confluence of events happening,” says Laura Neidhart, spokesperson for the advocacy group Canada Without Poverty. “More and more people are leaving rural Canada, and the people who remain are often the ones who are unable to leave.”

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Mar 202018
 
 March 20, 2018  Posted by at 10:00 am Finance Tagged with: , , , , , , , , , ,  12 Responses »


Times Square at night 1954

 

Last Male Northern White Rhino Dies (Sky)
Alzheimer Care For Americans Alive Today Projected To Cost $47 Trillion (BBG)
The Stock Market Meltup Is Over: Morgan Stanley (MW)
It’s Not Just Tech. Credit Markets Give Fuel to Equity Rout (BBG)
How Economies Could Insure Themselves Against The Bad Times (Shiller)
US Expected To Impose Up To $60 Billion In China Tariffs By Friday (R.)
Facebook Stock Value Down $35 Billion On Cambridge Analytica Controversy (Ind.)
Former Obama Campaign Director: Facebook Was “On Our Side” (ZH)
How Facebook Made Its Data Crisis Worse (BBG)
Tech World Experiencing A Major ‘Trust Crisis’ – Futurist (CNBC)
If You Come to a Fork in the Road, Take It (Jim Kunstler)
Over 70% of US Citizens Believe America Is Controlled By A ‘Deep State’ (RT)
UK Tories Set To Slump To Record Low At Local Elections (G.)
Former French President Sarkozy In Custody Over Libya Funding Probe (F24)
Greece Undermining EU-Turkey Migrant Deal, German Report Says (K.)

 

 

Is there anything sadder in the world?

Last Male Northern White Rhino Dies (Sky)

The last male northern white rhino has died in Kenya, keepers have confirmed. The 45-year-old animal died from “age-related complications”, leaving only two females of his subspecies alive. In a statement, the Ol Pejeta Conservancy in Kenya said the rhino, called Sudan, was put down after his condition “worsened significantly” and he was unable to stand. Scientists have gathered his genetic material and are working on developing in-vitro fertilisation (IVF) to save his subspecies. In a statement, the zoo wrote: “Sudan will be remembered for his unusually memorable life. “In the 1970s, he escaped extinction of his kind in the wild when he was moved to Prague Zoo. Throughout his existence, he significantly contributed to survival of his species as he sired two females.

“Additionally, his genetic material was collected yesterday and provides a hope for future attempts at reproduction of northern white rhinos through advanced cellular technologies. “During his final years, Sudan came back to Africa and stole the heart of many with his dignity and strength.” Richard Vigne, Ol Pejeta’s CEO, said: “We on Ol Pejeta are all saddened by Sudan’s death. “He was a great ambassador for his species and will be remembered for the work he did to raise awareness globally of the plight facing not only rhinos, but also the many thousands of other species facing extinction as a result of unsustainable human activity. “One day, his demise will hopefully be seen as a seminal moment for conservationists worldwide.”

The northern white rhino population in Uganda, Sudan, Chad and Central African Republic was largely wiped out by poachers in the 1970s and 1980s, fuelled by a demand for rhino horn in traditional Chinese medicine and dagger handles in Yemen. Four fertile northern white rhinos, two male and two female, were moved from a zoo in the Czech Republic to Ol Pejeta with high hopes they would breed in an environment similar to their native habitat. Although they were seen mating, there were no successful pregnancies.

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To be fair, we’re killing our own species too. Where is the US going to find the $47 trillion?

Alzheimer Care For Americans Alive Today Projected To Cost $47 Trillion (BBG)

Alzheimer’s disease is among the most expensive illnesses in the U.S. There’s no cure, no effective treatment and no easy fix for the skyrocketing financial cost of caring for an aging population. Spending on care for people alive in the U.S. right now who will develop the affliction is projected to cost $47 trillion over the course of their lives, a report issued Tuesday by the Alzheimer’s Association found. The U.S. is projected to spend $277 billion on Alzheimer’s or other dementia care in 2018 alone, with an aging cohort of baby boomers pushing that number to $1.1 trillion by 2050. Research so far has been stymied by clinical failures. By one count, at least 190 human trials of Alzheimer’s drugs have ended in failure.

No company has successfully marketed a drug to treat it, though many big pharmaceutical companies, including Merck and Pfizer, have tried. Biogen, a company based in Cambridge, MA, saw its shares dive last month after it said it was expanding the number of participants in its trial for the drug aducanumab. However, significant cost savings can be achieved, according to the new report, by the simple act of early diagnosis. Currently, individuals are typically diagnosed in the dementia stage, rather than when they have developed only mild cognitive impairment [MCI]. Identifying the disease early can allow it to be better managed, in part with existing drugs that treat its symptoms. In doing so, the study postulates, America could save $7.9 trillion over the lifetimes of everyone alive right now.

The Alzheimer’s Association commissioned researchers at Precision Health Economics to study the potential savings of obtaining an earlier diagnosis. It used data from the Health and Retirement Study, a “nationally representative sample of adults age 50 and older,” run by the University of Michigan and supported by the National Institute on Aging and the Social Security Administration. The $7.9 trillion in savings was derived from a scenario in which all adults who develop Alzheimer’s receive an early diagnosis in the MCI stage. The cumulative cost in such a circumstance is projected at $39.2 trillion—far below the $47.1 trillion that would be spent under current diagnostic patterns.

[..] There are now an estimated 5.5 million Americans aged 65 or older with Alzheimer’s. In 2025, that number is projected to be 7.1 million. By 2050, it could reach 13.8 million. Along with the increasing costs, the report also found Alzheimer’s to be increasingly lethal. It’ss currently the sixth-leading cause of death in the U.S., and deaths attributed to it jumped by 123% between 2000 to 2015, the report found.

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What stock market?

The Stock Market Meltup Is Over: Morgan Stanley (MW)

The stock market meltup is over. At least, that’s the prognosis of one prominent Wall Street strategist who believes the torrid January rally that gave way to a correction may have been the market’s short-term apex. The S&P 500 jumped 7.5% between the end of 2017 and Jan. 26, when it notched the last in a string of record closes at 2,872.87. “We think January was the top for sentiment, if not prices, for the year. With volatility moving higher we think it will be difficult for institutional clients to gross up to or beyond the January peaks,” said Michael Wilson, chief U.S. equity strategist at Morgan Stanley Institutional Securities, in his weekly note on Monday. “Retail sentiment indicators also look to have peaked in January and we do not see anything on the horizon to get retail investors more bullish than they were following a tax cut.”

As a result, the much-anticipated meltup in stocks that numerous strategists had been forecasting since last year won’t likely happen in 2018, he said. A meltup is an unexpected rise in asset prices as investors surge into the market on fear of missing out. “When we look at our internal data combined with industry flows and sentiment, we think there is a strong case that January was the melt-up, or at least the culmination of it,” Wilson added. One key point in Wilson’s thesis is that gross leverage by Morgan Stanley’s hedge fund clients hit an all-time high in January. Gross leverage, according to the strategist, is a good measure of investor willingness to assume risk.

The record was also set right before the early February “volatility shock” forced investors to scale back their exposure to risk and Wilson does not expect gross leverage to return to January levels any time in the near future.

Going forward, Wilson expects U.S. stock returns to be mostly driven by increase in earnings estimates. “If we just roll forward the current bottom-up estimates, the forward earnings per share would be $166 and $170 by June 30 and September 30, respectively. That is approximately 3% and 5% higher than today’s $161. Not exciting, but not very bad either,” he said. “However, those numbers might need to come down if we start to see some evidence of lower margins since consensus forecasts assume no operating margin degradation. That is another reason why we think the S&P 500 makes its highs for the year this summer. It’s also a wild card that has big idiosyncratic risk at the stock level in our view.”

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The many faces of debt.

It’s Not Just Tech. Credit Markets Give Fuel to Equity Rout (BBG)

Equity investors grappling with a technology selloff, trade tensions and hawkish monetary chatter have a new foe to contend with: growing angst in credit markets. After resisting the full force of the gales that swept through markets earlier this year, corporate bonds are sending ominous messages. Traders are jumping out of the asset class as investment-grade spreads sit near their widest in six months and yields rise to the highest in more than six years – just as stock investors seek to recover from the first S&P 500 correction in two years. “If credit spreads widen, the equities with bad balance sheets will underperform,” said Louis de Fels at Raymond James Asset Management. “We’re quite cautious on the quality of the assets.”

Corporate bonds held by smart money have historically proven a leading indicator for the direction of stocks. That may spell disappointment for investors heeding Wall Street advice to shift towards equity, a late-cycle outperformer. “Credit leads equities and will underperform,” said Andrew Brenner at Natalliance Securities in New York, citing Federal Reserve hikes, signs of softer U.S. output and corporate sales of short-term U.S. debt. “We expect equities to catch up on the downside.” For now, stock investors appear sanguine. U.S. equity funds took in a record $34.5 billion in the week to March 14, compared to just $2.4 billion for bonds, according to Stanford C Bernstein. That brings the quarterly total for debt funds to $37.3 billion, the slimmest quarterly addition since the three months ending in December 2016, the data show.

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But in the end it’s just another form of debt.

How Economies Could Insure Themselves Against The Bad Times (Shiller)

The time has come for national governments around the world to start issuing their debt in a new form, linked to their countries’ resources. GDP-linked bonds, with coupons and principal that rise and fall in proportion to the issuing country’s GDP, promise to solve many fundamental problems that governments face when their countries’ economies falter. And, once GDP-linked bonds are issued by a variety of countries, investors will be attracted by the prospect of high returns when some of these countries do very well. This new debt instrument is especially exciting because of its monumental size. Although issues may start out small, they will be very important from the outset. The capitalised value of total global GDP is worth far more than the world’s stock markets and could be valued today in the quadrillions of US dollars.

[..] I have been advocating something like GDP-linked bonds for 25 years. In my 1993 book Macro Markets, I described the world’s GDPs as the “mother of all markets” and emphasised a form of debt called “perpetual claims”. But I did not work out a real plan of implementation and advocacy. [The book] ‘Sovereign GDP-Linked Bonds’ does just that. The basic idea is simple enough. Governments issue GDP-linked bonds to raise funds, just as corporations issue shares. By issuing such bonds, governments pledge to pay in proportion to the resources they have, measured by their countries’ GDP. The price-to-GDP ratio of GDP-linked bonds is essentially analogous to the price-to-earnings ratio of corporate shares. The difference is that GDP is an order of magnitude larger than corporate profits represented by the stock market.

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Well, it won’t be boring.

US Expected To Impose Up To $60 Billion In China Tariffs By Friday (R.)

The Trump administration is expected to unveil up to $60 billion in new tariffs on Chinese imports by Friday, targeting technology, telecommunications and intellectual property, two officials briefed on the matter said Monday. One business source, who has discussed the issue with the administration, said that the China tariffs may be subject to a public comment period, which would delay their effective date and allow industry groups and companies to lodge objections. This would be considerably different from the quick implementation of the steel and aluminum tariffs, which are set to go into effect on March 23, just 15 days after President Donald Trump signed the proclamations.

A delayed approach could allow time for negotiations with Beijing to try to resolve trade issues related to the administration’s “Section 301” probe into China’s intellectual property practices before tariffs take effect. The White House declined to comment Monday. China has vowed to take retaliatory measures in response. A source who had direct knowledge of the administration’s thinking told Reuters last week that the tariffs, authorized under the 1974 U.S. Trade Act, would be chiefly targeted at information technology, consumer electronics and telecoms and other products benefiting from U.S. intellectual property. But they could be much broader and hit consumer products such as clothing and footwear, with a list eventually running to 100 products, this person said.

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But Zuckerberg sold just in time.

Facebook Stock Value Down $35 Billion On Cambridge Analytica Controversy (Ind.)

Facebook stock dropped $35bn (£25bn) by close of trading on Wall Street, as the company deals with questions over its privacy rules in the wake of a scandal involving data firm Cambridge Analytica harvesting a vast repository of user information. The social media giant’s stock value declined by around 7%, paralleling losses throughout the technology industry and raising questions about the controversy inflicting lasting damage to Facebook’s bottom line. It amounted to the largest single-day%age decline for Facebook stock since 2014, with the drop outpacing broader declines across Wall Street.

The Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite all shed more than a percentage point in value by market’s close. Prominent tech companies like Apple, Microsoft and Alphabet all saw declines as political pressure on Facebook intensified, building on months of deepening scrutiny of the tech sector by elected officials.

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Six degrees of Facebook.

Former Obama Campaign Director: Facebook Was “On Our Side” (ZH)

The recent controversy and escalating scandal over Facebook’s decision to ban Trump-linked political data firm Cambridge Analytica over the use of data harvested through a personality app under the guise of academic research has opened a veritable Pandora’s box of scandal for the Silicon Valley social media giant. Carol Davidsen, who served as Obama’s director of integration and media analytics during his 2012 campaign (in her LinkedIn profile she says she was responsible for “The Optimizer” & “Narwhal” big data analytics platforms), claims – with evidence, that Facebook found out about a massive data-mining operation they were conducting to “suck out the whole social graph” in order to target potential voters.

After Facebook found out, they knowingly allowed them to continue doing it because they were supportive of the campaign. “[M]ore than 1 million Obama backers who signed up for the [Facebook-based app] gave the campaign permission to look at their Facebook friend lists. In an instant, the campaign had a way to see the hidden young voters. Roughly 85% of those without a listed phone number could be found in the uploaded friend lists. What’s more, Facebook offered an ideal way to reach them,” reads an article Davidsen posted as a prelude to her postings.

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I doubt that it can make it worse. We haven’t seen the beginning of it.

How Facebook Made Its Data Crisis Worse (BBG)

Facebook tried to get ahead of its latest media firestorm. Instead, it helped create one. The company knew ahead of time that on Saturday, the New York Times and The Guardian’s Observer would issue bombshell reports that the data firm that helped Donald Trump win the presidency had accessed and retained information on 50 million Facebook users without their permission. Facebook did two things to protect itself: it sent letters to the media firms laying out its legal case for why this data leak didn’t constitute a “breach.” And then it scooped the reports using their information, with a Friday blog post on why it was suspending the ad firm, Cambridge Analytica, from its site. Both moves backfired.

On Friday, Facebook said it “received reports” that Cambridge Analytica hadn’t deleted the user data, and that it needed to suspend the firm. The statement gave the impression that Facebook had looked into the matter. In fact, the company’s decisions were stemming from information in the news reports set to publish the next day, and it had not independently verified those reports, according to a person with knowledge of the matter. By trying to look proactive, Facebook ended up adding weight to the news.

On Saturday, any good will the company earned by talking about the problem first was quickly undone when reporters revealed Facebook’s behind-the-scenes legal maneuvering. “Yesterday Facebook threatened to sue us. Today we publish this,” Carole Cadwalladr, the Observer reporter, wrote as she linked her story to Twitter, in a post shared almost 15,000 times. The Guardian said it had nothing to add to her statement. The Times confirmed that it too received a letter, but said it didn’t consider the correspondence a legal threat.

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You ain’t seen nothing yet.

Tech World Experiencing A Major ‘Trust Crisis’ – Futurist (CNBC)

Big brands have to reestablish trust with consumers on data safety, futurist Chris Riddell told CNBC at Credit Suisse’s annual Asian Investment Conference on Tuesday. Riddell, who describes his job title as “fundamentally seeing how technology is changing humanity,” said the world is currently experiencing a severe “trust crisis.” “People now are more willing to share data than ever before” but the of data breaches at major companies break “trust and confidence,” he stated.

Social media platform Facebook is currently under fire amid allegations that private data firm Cambridge Analytica lied about deleting user data it had improperly obtained from a Russian-American researcher in 2015. “We’re in an era of category killers, where one organization is dominating in an industry,” Riddell said, pointing to Facebook and Google as examples. The challenge for those businesses is to rebuild trust and use technology to create transparency, he continued.

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RussiaRussiaRussia

If You Come to a Fork in the Road, Take It (Jim Kunstler)

Various readers, fans, blog commenters, Facebook trolls, and auditors twanged on me all last week about my continuing interest in the RussiaRussiaRussia hysteria, though there is no particular consensus of complaint among them — except for a general “shut up, already” motif. For the record, I’m far more interested in the hysteria itself than the Russia-meddled-in the-election case, which I consider to be hardly any case at all beyond 13 Russian Facebook trolls.

The hysteria, on the other hand, ought to be a matter of grave concern, because it appears more and more to have been engineered by America’s own intel community, its handmaidens in the Dept of Justice, and the twilight’s last gleamings of the Obama White House, and now it has shoved this country in the direction of war at a time when civilian authority over the US military looks sketchy at best. This country faces manifold other problems that are certain to reduce the national standard of living and disrupt the operations of an excessively complex and dishonest economy, and the last thing America needs is a national war-dance over trumped-up grievances with Russia.

The RussiaRussiaRussia narrative has unspooled since Christmas and is blowing back badly through the FBI, now with the firing (for cause) of Deputy Director Andrew McCabe hours short of his official retirement (and inches from the golden ring of his pension). He was axed on the recommendation of his own colleagues in the FBI’s Office of Professional Responsibility, and they may have been influenced by the as-yet-unreleased report of the FBI Inspector General, Michael Horowitz, due out shortly.

The record of misbehavior and “collusion” between the highest ranks of the FBI, the Democratic Party, the Clinton campaign, several top political law firms, and a shady cast of international blackmail peddlars is a six-lane Beltway-scale evidence trail compared to the muddy mule track of Trump “collusion” with Russia. It will be amazing if a big wad of criminal cases are not dealt out of it, even as The New York Times sticks its fingers in its ears and goes, “La-la-la-la-la….” It now appears that Mr. McCabe’s statements post-firing tend to incriminate his former boss, FBI Director James Comey — who is about to embark, embarrassingly perhaps, on a tour for his self-exculpating book, A Higher Loyalty: Truth, Lies, and Leadership.

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Going mainstream doesn’t seem to fit the deep state’s preferences.

Over 70% of US Citizens Believe America Is Controlled By A ‘Deep State’ (RT)

Over 70% of US citizens in the Republican and Democratic parties believe America is controlled by a “deep state” of unelected government officials, according to a new poll. They also fear state surveillance, it reveals.
Although most Americans interviewed are not familiar with the term ‘deep state’, when they heard the definition as a cadre of unelected government and military officials who secretly influence government policies, a majority expressed belief in its ‘probable existence’ according to the Monmouth University poll released Monday.

Additionally six in 10 of those polled think that these unelected government figures wield too much power when it comes to shaping federal policy. “We usually expect opinions on the operation of government to shift depending on which party is in charge. But there’s an ominous feeling by Democrats and Republicans alike that a ‘deep state’ of unelected operatives are pulling the levers of power,” said Patrick Murray, director of the independent Monmouth University Polling Institute.

Donald Trump has popularized the term ‘deep state’ over the course of his presidency. In January he blasted the ‘deep state’ Department of Justice for allegedly shielding a Hillary Clinton aide who used a non-secure private email account while conducting government business. The poll also highlights widespread fears of state surveillance, with 80% of Americans believing that the US government currently spies on the activities of its citizens. “This is a worrisome finding. The strength of our government relies on public faith in protecting our freedoms, which is not particularly robust. And it’s not a Democratic or Republican issue. These concerns span the political spectrum,” Murray added.

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When incompetence shines through. They’re pitching anti-Corbyn attack ads on…Facebook.

UK Tories Set To Slump To Record Low At Local Elections (G.)

Conservative party support in London looks set to slump to a record low at the local elections on 3 May as the young, ethnically diverse electorate turns to Labour in increasing numbers. Projections from the Tory peer and psephologist Robert Hayward indicate the Conservatives will lose about 100 council seats. If they lose more than 93 – less than three seats in each of London’s boroughs – the Tories would fall below their previous low of 511 councillors in the capital. That came in 1994, just after the pound had fallen out of the exchange rate mechanism and Labour had begun the recovery that led to its 1997 general election landslide. “I’d be surprised if the Tories did not have an all-time low number of councillors,” Hayward said.

“Labour were very successful in London in the general election last year and I’d expect that to continue in 2018.” The Tories could even lose their two flagship boroughs of Wandsworth, which has been in Conservative control since 1978, and Westminster, which has been Tory since the last local government reorganisation in 1964. More likely, Barnet in north London might go Labour and the Liberal Democrats could triumph in Kingston in south-west London where they are also targeting the neighbouring council, Richmond. The most spectacular reverse would be the loss of Kensington and Chelsea, the Conservative heartland won by Labour with the narrowest of margins at last year’s general election, where the Tory council has come under fire for its mishandling of the Grenfell Tower fire.

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He took the money and then killed him.

Former French President Sarkozy In Custody Over Libya Funding Probe (F24)

Former French president Nicolas Sarkozy has been called in for questioning by investigators looking into suspected Libyan financing of his 2007 election campaign, an official in the French judiciary said Tuesday. Libyan officials from the Gaddafi era have claimed they helped finance Sarkozy’s election campaign. An investigation into the case has been underway since 2013. It is the first time Sarkozy has been questioned in the inquiry. The hearing comes several weeks after a former associate, Alexandre Djouhri, was arrested in London as part of the investigation and later released on bail. Investigators are examining claims that Gaddafi’s regime secretly gave Sarkozy €50 million overall for the 2007 campaign. Such a sum would be more than double the legal campaign funding limit at the time of €21 million.

In November 2016, French-Lebanese businessman Ziad Takieddine said he delivered three suitcases from Libya, containing five million euros in cash, to Sarkozy and his former chief of staff and campaign director, Claude Guéant, between 2006 and 2007. Sarkozy, who was president from 2007 to 2012, has always denied the allegations. A lawyer for the former French president could not be reached immediately for comment on Tuesday. Sarkozy had a complex relationship with Gaddafi. Soon after his election to the presidency, Sarkozy invited the Libyan leader to France for a state visit and welcomed him with high honors. But Sarkozy then put France in the forefront of NATO-led airstrikes against Gaddafi’s troops that helped rebel fighters topple his regime in 2011.

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In other news: war is peace.

Greece Undermining EU-Turkey Migrant Deal, German Report Says (K.)

Data published by the German newspaper Die Welt suggest that Greece has been undermining the European Union-Turkey deal signed two years ago to stem the flow of refugees and migrants to the continent. Citing unnamed officials in Berlin, Brussels and the EU’s border agency Frontex, the report alleges that the Greek government has moved a large number of asylum seekers from the Aegean islands to the mainland, effectively preventing their return to Turkey. The message is that any asylum seeker who manages to land on one of the Greek islands, he can then move on to central Europe, officials told the newspaper.

According to EU figures cited by the newspaper, between March 2016 and January 2018, 62,190 asylum seekers landed on the Aegean islands, of whom 27,635, or 45%, were subsequently transferred to mainland Greece. German officials told the newspaper that only a very small number of people whose asylum request had been turned down by authorities had been returned to Turkey. Greece, the same officials said, is effectively creating an incentive for migrants hoping to enter the continent which could lead to a spike in arrivals.

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Feb 012018
 
 February 1, 2018  Posted by at 11:03 am Finance Tagged with: , , , , , , , , , ,  1 Response »


Frederic Edwin Church The Parthenon 1871

 

FBI Opposes Memo Release Due To “Inaccurate Information” (ZH)
Alan Greenspan Sees Bubbles in Stocks and Bonds (BBG)
Janet Yellen’s Fed Era Ends With Unanimous Vote of No Rate Hike (BBG)
Two Out Of Three UK Pension Schemes Are In The Red (Yahoo)
Secret Price Fixing Among German Carmakers (Spiegel)
Germany Reaches Limit of Support for Macron’s Europe Plans (BBG)
Hungary Rejects Macron’s ‘Arrogance’ as EU Reform-Fight Looms (BBG)
More Than One Million Greeks Trapped In Tax Payment Scheme Nightmare (K.)
Planting Wildflowers Across Farm Fields Could Cut Pesticide Spraying (G.)
Earth’s Magnetic Field Is Shifting, Poles May Flip (ZH)
‘Super Blue Blood Moon’ Rises Over The Acropolis (K.)
Latest Rhino Poaching Figures Show A Decade Of Bloodshed (Ind.)

 

 

Bad theater. But not releasing the memo is no longer an option.

FBI Opposes Memo Release Due To “Inaccurate Information” (ZH)

Update 1240ET: In what CNN described as a “rate public warning,” the FBI released a statement Wednesday saying it has “grave concerns” over the accuracy of the House Intel Committee’s memo describing purportedly egregious FISA abuses. “With regard to the House Intelligence Committee’s memorandum, the FBI was provided a limited opportunity to review this memo the day before the committee voted to release it. As expressed during our initial review, we have grave concerns about material omissions of fact that fundamentally impact the memo’s accuracy,” the FBI said in a statement.
* * *
Update 1130ET: Bloomberg reports that FBI Director Christopher Wray told the White House he opposes release of a classified Republican memo alleging bias at the FBI and Justice Department because it contains inaccurate information and paints a false narrative, according to a person familiar with the matter. Of course, given the allegedly terrible picture the memo paints of The FBI, it is perhaps not entirely surprising that Wary would oppose its release, however, if this sourced reporting proves correct, it plays very badly for Republicans as it would seem to confirm Rep. Schiff’s accusations.
* * *
As we detailed earlier, just before President Trump headed to the Capitol for last night’s “State of the Union”, the Washington Post reported that top Justice Department officials made a last-ditch plea on Monday to White House Chief of Staff John Kelly about the dangers of publicly releasing the memo. Shortly before the House Intelligence Committee voted to make the document public, Deputy Attorney General Rod J. Rosenstein warned Kelly that the four-page memo prepared by House Republicans could jeopardize classified information and implored the president to reconsider his support for making it public. But those pleas from Rosenstein – who isn’t exactly the West Wing’s favorite lawman, and whose name apparently appears in the memo – have apparently fallen on deaf ears.

Last night, President Trump promised a lawmaker that the memo would “100%” be released now that the House Intel Committee has voted to approve its release. And during a Fox News Radio interview with Brian Kilmeade, Chief of Staff John Kelly added that the memo would be publicly released “pretty quick.” “I’ll let all the experts decide that when it’s released. This president wants everything out so the American people can make up their own minds,” he said.

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He should know, he created them both.

Alan Greenspan Sees Bubbles in Stocks and Bonds (BBG)

The man who made the term “irrational exuberance” famous says investors are at it again. “There are two bubbles: We have a stock market bubble, and we have a bond market bubble,” Alan Greenspan, 91, said Wednesday on Bloomberg Television with Tom Keene and Scarlet Fu. Greenspan, who led the Federal Reserve from 1987 until 2006, memorably used the phrase to describe asset values during the 1990’s dot-com bubble. Greenspan’s comments come as stock indexes remain near record highs, despite selling off in recent days, and as the yields on government notes and bonds hover not far from historic lows. Interest rates are expected to move up in coming years as the Fed continues with a campaign to gradually tighten monetary policy.

“At the end of the day, the bond market bubble will eventually be the critical issue, but for the short term it’s not too bad,” Greenspan said. “But we’re working, obviously, toward a major increase in long-term interest rates, and that has a very important impact, as you know, on the whole structure of the economy.” The Fed on Wednesday opted to leave rates unchanged and markets are pricing in an increase at the central bank’s March meeting. Greenspan sounded an alarm on forecasts that the U.S. government deficit will continue to climb as a share of GDP. He said he was “surprised” that President Donald Trump didn’t specify how he would fund new government initiatives in Tuesday’s State of the Union speech. The president last month signed into law about $1.5 trillion in tax cuts that critics say will further balloon the budget gap.

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The nonsense is deafening. Great solid economy, but no rate hikes.

Janet Yellen’s Fed Era Ends With Unanimous Vote of No Rate Hike (BBG)

Federal Reserve officials, meeting for the last time under Chair Janet Yellen, left borrowing costs unchanged while adding emphasis to their plan for more hikes, setting the stage for an increase in March under her successor Jerome Powell. “The committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate,” the policy-setting Federal Open Market Committee said in a statement Wednesday in Washington, adding the word “further” twice to previous language. The changes to the statement, collectively acknowledging stronger growth and more confidence that inflation will rise to their 2% target, may spur speculation that the Fed will pick up the pace of interest-rate increases.

Officials also said inflation “is expected to move up this year and to stabilize” around the goal, in phrasing that marked an upgrade from their statement in December. At the same time, the Fed repeated language saying that “near-term risks to the economic outlook appear roughly balanced.” “It opens the door to four hikes for them, but I don’t think they have walked through it,” said Michael Gapen at Barclays in New York. “It closes the door to two hikes.” Fed officials penciled in three rate moves this year in quarterly forecasts they updated last month, according to their median projection.

With her term ending later this week after President Donald Trump chose to replace her, Yellen is handing the reins to Powell, who has backed her gradual approach and is widely expected to raise interest rates at the FOMC’s next meeting for the sixth time since late 2015. Fed officials are hoping to keep a tight labor market from overheating without raising borrowing costs so fast that it would stifle the economy. “Gains in employment, household spending and business fixed investment have been solid, and the unemployment rate has stayed low,” the Fed said, removing previous references to disruptions from hurricanes. “Market-based measures of inflation compensation have increased in recent months but remain low.”

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People won’t understand their pensions are Ponzis until there are no payments.

Two Out Of Three UK Pension Schemes Are In The Red (Yahoo)

Two out of three pension funds are in the red – to the tune of a combined £210 billion, it has been revealed. Some 3,710 schemes are in deficit according to the Pension Protection Fund watchdog, putting a serious question mark over the retirement plans of millions of workers. The PFF has been called into action on two high profile occasions of late – working with Toys R Us to secure a near £10m injection into its ailing fund to protect the company’s short-term future and also sorting through the debris of the Carillion collapse. The giant contractor folded earlier this month with debts of above £1.3bn, including an estimated £800m hole in its pension fund. The PFF monitors the health of 5,588 pension pots, with some of the biggest names on the FTSE 100 running schemes with major shortfalls.

The biggest include £9.1billion at BT, as well as deficits of £6.9billion at Royal Dutch Shell, £6.7billion at BP and £6.6billion at both Tesco and BAE Systems. Sir Steve Webb, a former pensions minister under the recent coalition government, said Carillion would not be the last big company to fold leaving its pension scheme in jeopardy. “The question isn’t if there will be another Carillion – it’s when,” said Webb, who is now director of policy at pensions group Royal London. “With two-thirds of schemes in deficit it is inevitable there will be more insolvencies and more schemes ending up in the PPF.”

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They had more than 60 active working groups.. And thought it’d remain secret? Anyone going to jail?

Secret Price Fixing Among German Carmakers (Spiegel)

The Federal Cartel Office suspects that major carmakers and a few of their suppliers have been fixing prices for years, and possibly even decades. It’s not the prices at which the companies sell their cars or car parts that is at issue, but rather a significant component of the prices they pay for steel. “The aim of the suspected collusion,” the court ruling that granted the search warrants read, was to “unify the purchasing price for steel in the automobile industry and, by doing so, create a commonality of costs.” The Federal Cartel Office believes that the alleged collusion existed back in the 1990s and that “it existed again from March 2007 until February 2013.” Investigators have also found indications there may have been collusion in 2016.

Collusion of that nature is the antithesis of competition. It means that VW, Daimler and BMW were no longer competing to buy steel cheaper than their rivals and passing their savings down to customers – as is normally the case in a functioning market economy. And steel is one of the most important supplies purchased by carmakers. The nationwide searches didn’t remain secret, with the media quickly reporting on them. But until now, the background and details of the raids have remained largely unknown, the case having been overshadowed by a European Commission investigation into another case that also involves the automobile industry – a case that DER SPIEGEL exposed last summer.

That case was triggered when Daimler and Volkswagen essentially admitted wrongdoing, and since then the Brussels authority has been looking into suspicions that the companies engaged in collusion for several years with BMW, Porsche and Audi, in the form of more than 60 working groups covering areas such as technological development, suppliers and how to deal with environmental protection authorities. The companies had created working groups for almost every part of a vehicle. They existed for “gasoline engines,” “diesel engines,” “car body,” “chassis,” “total vehicle” and many more areas. With five brands involved – Daimler, BMW, Audi, Porsche and VW – the groups were referred to internally as “groups of five.” All together, they met more than 1,000 times in past years.

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Say no more: “Desired ambiguities..”

Germany Reaches Limit of Support for Macron’s Europe Plans (BBG)

French President Emmanuel Macron will be disappointed if he expects Germany’s next government to drum up more goodwill for his European reform plans in this week’s talks, according to four people familiar with the current coalition negotiations. Angela Merkel’s Christian Democratic Union-led bloc and its prospective Social Democratic Party partner are not planning any fundamental changes to their proposals on Europe’s future as set out in a preliminary agreement reached Jan. 12, according to the people, who represent all three parties involved in the talks. All asked not to be named as the negotiations are private and ongoing. Representatives of Merkel’s CDU, its Christian Social Union sister party and Martin Schulz’s Social Democrats met in the Chancellery in Berlin on Wednesday to discuss Europe policy.

While Schulz hailed the outcome as a “fresh start” for Europe, details were in short supply. The negotiators didn’t go much beyond those measures already agreed, one of the people attending the meeting said. These include higher German contributions to the EU budget; expanding the European Stability Fund (ESM) into a European Monetary Fund; and a European framework for minimum wages. The SPD proposed giving the EU its own means to raise revenue, whether by taxes or tolls, prompting Merkel’s bloc to warn against a debate over tax increases. On a visit to Macron in Paris on Jan. 19, Merkel said the coalition’s common Europe plans contained “desired ambiguities,” since any attempt to agree on the final details now would reduce the room to negotiate.

In reality, her CDU/CSU and the SPD, as the Social Democrats are known in German, have different interpretations of the proposals, and these divergent positions are likely to bubble up in the coming months in the debate over euro-area reform.

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Hungary won’t be easy to strong-arm. But Brussels will try. The only people who want more Europe are politicians.

Hungary Rejects Macron’s ‘Arrogance’ as EU Reform-Fight Looms (BBG)

French President Emmanuel Macron’s plan to bring to heel renegade European Union nations as part of a drive to reform the bloc smacks of arrogance and will fail, a senior Hungarian ruling party official said. Unanimity is required both to change the EU constitution and approve a multi-year, post-2020 EU budget. That means proposed sanctions on countries like Hungary and Poland for alleged rule-of-law violations won’t gain traction, according to Gergely Gulyas, parliamentary leader of Hungarian Prime Minister Viktor Orban’s Fidesz party. Governments are drawing battle lines as the EU mulls plans to re-invent itself, with some members saying the euro crisis, Brexit, the biggest refugee influx since World War II and ex-communist members ditching the bloc’s liberal values have necessitated a revamp.

Macron has presented the most ambitious proposals, with a plan to deepen integration in everything from defense to the economy. He has also called for sanctions against member states seen as backsliding on democracy. “If we’re going to play the game that western European countries want to launch rule-of-law procedures against eastern European countries because of differences over values, then that’s not going to work,” said Gulyas, 36. “That would destroy the Union.” Hungary received 3.6 billion euros ($4.5 billion) in net EU funding in 2016. That made it the fourth-biggest beneficiary in the 28-member bloc after Poland, Romania and Greece and underscores the risk to its economy if Macron can make good on his pledge. Gulyas dismissed proposals aimed at punishing Hungary and Poland, arguing that France has for years failed to meet EU spending limits yet has escaped penalties for fiscal offenders.

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Under an alleged left-wing government.

More Than One Million Greeks Trapped In Tax Payment Scheme Nightmare (K.)

More than 1 million Greeks are now trapped in programs to pay off their tax and social security dues in installments, a situation likely to continue for years to come. On Wednesday the Finance Ministry announced taxpayers can apply for a 12- or 24-installment payment scheme, which under certain circumstances can include non-expired dues, on the website of the Independent Authority for Public Revenue. Citizens are resorting to various payment programs offered by the ministries of Finance and Labor because they would otherwise be unable to meet their obligations. In many cases taxpayers are forced to pay additional installments in order not to default on their plans.

The million-plus taxpayers and businesses that are trapped in the various schemes they have entered to pay off the tax authorities and the social security funds have no other choice but to keep paying, otherwise they will have their assets confiscated. The payment schemes are the outcome of the growth in taxation and of social security contributions in recent years. Worse, as of this year, if anyone delays the payment of an installment by more than 24 hours, the debt will be classified as overdue and the process of the monitoring mechanism will be triggered for the state to safeguard its interests. Particularly in the case of the 100-payment program for dues to the tax authorities, missing a deadline means the entire amount due is classified as expired and becomes immediately payable along with fines and penalties.

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You mean, monoculture is not the greatest thing ever?!

Planting Wildflowers Across Farm Fields To Cut Pesticide Spraying (G.)

Long strips of bright wildflowers are being planted through crop fields to boost the natural predators of pests and potentially cut pesticide spraying. The strips were planted on 15 large arable farms in central and eastern England last autumn and will be monitored for five years, as part of a trial run by the Centre for Ecology and Hydrology (CEH). Concern over the environmental damage caused by pesticides has grown rapidly in recent years. Using wildflower margins to support insects including hoverflies, parasitic wasps and ground beetles has been shown to slash pest numbers in crops and even increase yields. But until now wildflower strips were only planted around fields, meaning the natural predators are unable to reach the centre of large crop fields.

“If you imagine the size of a [ground beetle], it’s a bloody long walk to the middle of a field,” said Prof Richard Pywell, at CEH. GPS-guided harvesters can now precisely reap crops, meaning strips of wildflowers planted through crop fields can be avoided and left as refuges all year round. Pywell’s initial tests show that planting strips 100m apart means the predators are able to attack aphids and other pests throughout the field. The flowers planted include oxeye daisy, red clover, common knapweed and wild carrot. In the new field trials, the strips are six metres wide and take up just 2% of the total field area. They will be monitored through a full rotation cycle from winter wheat to oil seed rape to spring barley.

“It’s a real acid test – we scientists are having to come up with real practical solutions,” said Pywell, who led a landmark study published in 2017 showing that neonicotinoids insecticides damage bee populations, not just individual insects. In the new trials, the researchers will be looking out for any sign that drawing the wild insects into the centre of fields, and therefore closer to where pesticides are sprayed, does more harm than good.

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Old threat. But a real one.

Earth’s Magnetic Field Is Shifting, Poles May Flip (ZH)

[..] scientists from the University of Colorado in Boulder are sounding the alarm that the Earth’s magnetic poles are showing signs of reversing. Although the pole reversal, in and of itself, isn’t unprecedented, the solar winds that would take out the power grid and make parts of the globe uninhabitable could cause widespread disasters. The Earth has a fierce molten core that generates a magnetic field capable of defending our planet against devastating solar winds. This magnetic field is vital to life on Earth and has weakened by 15 percent over the last 200 years. This protective field acts as a shield against harmful solar radiation and extends thousands of miles into space and its magnetism affects everything from global communication to power grids.

Historically, Earth’s North and South magnetic poles have flipped every 200,000 or 300,000 years. However, the last flip was about 780,000 years ago, meaning our planet is well overdue. The latest satellite data, from the European Space Agency’s Swarm trio which monitors the Earth’s magnetic field, suggest a pole flip may be imminent. The satellites allow researchers to study changes building at the Earth’s core, where the magnetic field is generated. Their observations suggest molten iron and nickel are draining the energy out of the Earth’s core near where the magnetic field is generated. While scientists aren’t sure why exactly this happens, they describe it as a “restless activity” that suggests the magnetic field is preparing to flip.

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A lot more timeless than most other pics of this.

‘Super Blue Blood Moon’ Rises Over The Acropolis (K.)

A ‘super blue blood moon’ rises behind the 2,500-year-old Parthenon temple on the Acropolis hill in Athens on Wednesday evening, when thousands of city residents took to the streets and balconies to witness the rare spectacle. People in many parts of the world caught a glimpse of the moon as a giant reddish globe thanks to a rare lunar phenomenon that combines a total eclipse with a blue moon and super moon. The spectacle – the first in 152 years – has been coined a ‘super blue blood moon’ by NASA. [Petros Giannakouris/AP]

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Just refuse to do any trade with any country that imports the horns. For starters.

Latest Rhino Poaching Figures Show A Decade Of Bloodshed (Ind.)

Dr Ian Player, the veteran South African game ranger and doyen of global rhino conservation, would be turning in his grave today were he to discover that another 1,000 rhinos had been slaughtered in the last calendar year. The African-wildlife warrior died just over three years ago aged 87, at a point when poaching had just exploded to record levels in South Africa – with nearly three rhinos gunned down daily. Annual government statistics announced last week complete the picture of 7,130 rhino carcasses piled up in South Africa over the last decade. Shortly before his death, I visited Player at his home in the KwaZulu-Natal Midlands to ask him about his thoughts on the poaching crisis and the future of one of the “big five” (lion, leopard, rhinoceros, elephant and Cape buffalo) species he devoted most of his life to protecting.

Frail and dispirited, he had reached a point in life where he should have been taking things easy, after more than six decades of service to nature conservation. Instead, his cellphone rang incessantly as colleagues from all corners of the country reported the discovery of yet another rhino butchered for its horns. Having worked so hard to save rhinos from extinction once before, there was no way Player could hang up his conservation boots amidst this new crisis. He also told me about a dream that haunted him. “My dream was about a young white rhino which came to lie down next to me and then gently placed its head on my shoulder. That does not need too much interpretation – the rhinos still need our help more than ever before,” he explained.

Player first came across a rhino in Imfolozi Game Reserve in the early 1950s when he joined the Natal Parks Board as a learner game ranger. A disciple of Carl Jung and Sir Laurens van der Post, Player went on to spearhead a global operation to safeguard the world’s second-largest land animal from extinction. Less than a decade ago, poaching deaths were limited to roughly 20 rhinos per year in South Africa, the country that provides sanctuary to 93% of Africa’s white rhinos and nearly 40% of the continent’s black rhinos. In 2007, only 13 rhinos were poached in South Africa. But in 2008 that tally rose steeply to 80 deaths; to 333 in 2010 and then to a record level of 1,205 during 2014. Last year the death toll topped the 1,000 mark for the fifth year in a row.

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Feb 202017
 
 February 20, 2017  Posted by at 10:13 am Finance Tagged with: , , , , , , , , ,  1 Response »


Henri Cartier Bresson Moscow Metro 1954

 

Seven Years of Demanding The Impossible in Greece (MP)
Cost Of Greece, Troika Impasse Over Numbers Is Adding Up (K.)
Pre-Departure Migrant Camps Planned For Greek Islands (K.)
Democrats Suggest Invoking The 25th Amendment Unless Trump “Gets A Grip” (ZH)
Greenspan Blames Productivity Decline For Political, Economic Crises (BI)
S&P 500 Earnings Stuck at 2011 Levels, Stocks up 87% Since (WS)
The Nasty Little Secret About Housing Affordability (ABC.au)
The Unthinkable Just Happened in Spain (DQ)
Kim Dotcom Loses New Zealand Extradition Case But Claims Major Victory (NZH)
UK Vegetable Shortage A Sign Of Things To Come (G.)
Fukushima Aborts Latest Robot Mission Radiation At “Unimaginable” Levels (ZH)
Tulsi Gabbard vs. ‘Regime Change’ Wars (Wright)
UN Envoy Questions US Engagement On Syria (AFP)
Kaziranga: The Park That Shoots People To Protect Rhinos (BBC)

 

 

A glimpse of the madness bestowed upon Greece. You might think this settles it, that the IMF is going to back off. You would be wrong.

Seven Years of Demanding The Impossible in Greece (MP)

In a recent presentation of his book, Laid Low, which examines the IMF’s role in the eurozone crisis, author and journalist Paul Blustein disclosed a memo dated May 4, 2010, from the IMF’s then head of research Olivier Blanchard, to Poul Thomsen, who headed the Greek mission at the time. In his missive, Blanchard warned that the cumulative fiscal adjustment of 16 %age points being demanded of Greece in such a short period of time and with such a high level of frontloading had never been achieved before. According to Blanchard, not only was the task unprecedented, but Greece was being asked to achieve the impossible in unfavourable external circumstances, when everyone was barely recovering from the 2008 global financial crisis and without any other policy levers (low interest rates or exchange rate adjustment).

Blanchard foresaw what became a reality only about a year later: Even with “perfect policy implementation” the programme will be thrown off track rather quickly and the recession will be deeper and longer than expected, he warned. Blanchard’s scepticism and warnings were ignored. Instead, political limitations took hold of the decision-making process and domestic-focussed calculations pushed Greece into trying to achieve the impossible. This week, the former IMF chief economist admitted on Twitter that although he was not the one that leaked the memo he was not unhappy that the truth has been revealed because “it is seven years and still there is no clear/realistic plan” for Greece.

Athens is currently under pressure to adopt another 2% of GDP in new fiscal measures, which relate to the tax-free threshold and pension spending. Since 2010, Greece has adopted revenue-raising measures and spending cuts that are equivalent to more than a third of its economy and more than double what Blanchard had described as unprecedented almost seven years ago.

The Greek economy has been burdened with €35.6 billion in all sorts of taxes on income, consumption, duties, stamps, corporate taxation and increases in social security contributions. When totting all this up, it is remarkable that the economy still manages to function. During the same period, the state has also found savings of €37.4 billion from cutting salaries, pensions, benefits and operational expenses. Discretionary spending is now so lean that even the IMF argues that in certain areas it needs to increase if Greece is to meet the minimum requirements in the provision of public services. When this misery started, Greece had to correct a primary deficit of €24 billion. But the painful fiscal adjustment Greeks have had to endure had turned out to be three times as much. The IMF’s Thomsen, now the director of its European Department, recently argued that Greece doesn’t need any more austerity but brave policy implementation. Somehow, though, the discussion has ended up being about finding another €3.5 billion in taxes and cuts to pension spending. Bravery is nowhere to be seen.

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The cuts have hit Greek consumer spending so severely that a recovery is no longer possible. And without a recovery, the Troika demands will get more severe, rinse and repeat.

Cost Of Greece, Troika Impasse Over Numbers Is Adding Up (K.)

Another week of back-and-forth between Greece and its lenders seems to have brought us no closer to an agreement between all the parties involved in the country’s bailout. Monday’s Eurogroup meeting may produce some progress, but the complexity of the situation facing Athens, the eurozone and the IMF means it is likely that any forward movement will involve inching, rather than hurtling, towards an agreement. One of the key areas of disagreement is Greece’s fiscal performance. The government insists that the primary surplus for 2016 provides all the evidence needed that there should be no concerns about Greece meeting its fiscal targets in the coming years. Finance Ministry estimates put the primary surplus for 2016 at 2% of gross domestic product, against a target of 0.5%.

In an interview with Germany’s Bild newspaper last week, Finance Minister Euclid Tsakalotos suggested that last year’s primary surplus is actually 1.7 %age points above the target, ie 2.2% of GDP in total. On Friday, reports indicated that government officials believe the final figure, which is not due to be announced until April, will be around 3% of GDP. There is skepticism on the creditors’ side. Even before we get to debating how large last year’s primary surplus was, some of those who are lending Greece money are not convinced that enough of the overperformance is structural and that much of it may be driven by one-off occurrences. It will require further scrutiny of the final data to come up with a definitive answer to this question. The director of the IMF’s European Department, Poul Thomsen, told another German newspaper, Handelsblatt, last week that the Fund may revise its fiscal forecasts for Greece once it has last year’s statistics at its disposal.

This is crucial because the volume of measures being demanded of Greece by the institutions has been set at 3.6 billion euros largely due to the fact that the IMF believes Greece will fall short of the 3.5% of GDP primary surplus target it has been set for an, as yet, unspecified period after 2018. Athens hopes that if the IMF rethinks its figures, this may lead to a lower volume of measures being demanded and the first step in the grand bargain between the government and the institutions being taken. However, there are several added layers of complexity that have to be addressed. For example, the IMF does not only have doubts about the structural nature of Greece’s primary surplus, it also has lingering reservations about the reliability of the fiscal data coming out of Athens.

“Lack of fiscal transparency was clearly one of the factors that led to Greece finding itself in a difficult spot in 2010,” IMF Managing Director Christine Lagarde said in response to a question when she spoke at the Atlantic Council on February 8. “A lot has been improved but I’m not sure that the job is entirely completed. We are still seeing frequent revisions of some of those numbers. Everybody revises, let’s face it… but it’s a fact that Greece revises quite often and with significant variations.”

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People or cattle?

Pre-Departure Migrant Camps Planned For Greek Islands (K.)

Greek authorities are planning the creation of pre-departure detention facilities on the eastern Aegean islands, where thousands of migrants and refugees remain stranded, so as to accelerate returns to Turkey. According to officials from the Citizens’ Protection Ministry, the biggest%age of new arrivals over the past few months are from countries without a refugee profile: Pakistan, Morocco, Afghanistan and Bangladesh. Significant numbers also arrived from Egypt, the Dominican Republic, Tunisia, Nigeria and Libya. Officials say that the creation of closed-structure facilities, each with a capacity of 150-200 people, is key to taking some of the pressure off the islands of Lesvos, Chios, Samos, Kos and Leros, which have borne the brunt of the influx.

The mayors of these five islands are expected to travel to Brussels in early March to meet with Europe’s Migration Commissioner Dimitris Avramopoulos to voice their concerns. During a tour of these islands last week, the EU’s special envoy on migration, Maarten Verwey, said that the aim was to cut current numbers by half by the end of April. According to official figures, some 14,600 migrants and refugees are currently accommodated at official facilities on the islands. In comments made during the visit, Verwey, who is also the coordinator for the implementation of the EU-Turkey agreement to stem migrant flows, repeated that these detention facilities would be “temporary.”

Sources suggest that authorities have almost finalized plans for facilities on Samos, Lesvos and Kos, while looking for spaces on Leros and Chios. The plans have met with resistance from locals. Since the beginning of 2017, authorities have reportedly deported 160 individuals from Pakistan, 150 from Iraq, 70 from Algeria, 30 from Afghanistan, 25 from Morocco and 20 from Bangladesh. Police said 60 Syrians had left Greece voluntarily.

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Regime change. Who’s crazy now?

Democrats Suggest Invoking The 25th Amendment Unless Trump “Gets A Grip” (ZH)

After questioning President Trump’s sanity earlier in the week, it appears Democrats have found another narrative to cling to – invoke the 25th Amendment unless Trump “gets a grip.” With a growing number of Democrats openly questioning President Trump’s mental health. Rep. Earl Blumenauer (D-Ore.) in a floor speech this week called for a review of the Constitution’s procedures for removing a president. He warned the 25th Amendment of the Constitution falls short when it comes to mental or emotional fitness for office. Sen. Al Franken (D-Minn.) during a weekend interview with CNN’s “State of the Union” said that “a few” Republican colleagues have expressed concern to him about Trump’s mental health. And Rep. Ted Lieu (D-Calif.) plans to introduce legislation that would require the presence of a psychiatrist or psychologist in the White House.

[..] So, what’s Article 4 to the 25th Amendment? In the abstract, the amendment itself is about presidential succession, and includes language about the power of the office when a president is incapacitated. But Digby recently highlighted the specific text of growing relevance: “Whenever the Vice President and a majority of either the principal officers of the executive departments or of such other body as Congress may by law provide, transmit to the President pro tempore of the Senate and the Speaker of the House of Representatives their written declaration that the President is unable to discharge the powers and duties of his office, the Vice President shall immediately assume the powers and duties of the office as Acting President.”

What does that mean exactly? Well, it means Congress isn’t the only institution that can remove a president from office between elections. Under the 25th Amendment, a sitting vice president and a majority of the executive branch’s cabinet could, on their own, agree to transfer power out of the hands of a sitting president. At that point, those officials would notify Congress, and the vice president would assume the office as the acting president. And what if the challenged president wasn’t on board with the plan to remove him/her from the office? According to a recent explainer, “If the president wants to dispute this move, he can, but then it would be up to Congress to settle the matter with a vote. A two-thirds majority in both houses would be necessary to keep the vice president in charge. If that threshold isn’t reached, the president would regain his powers.”

All of this comes up in fiction from time to time, and in all likelihood, Americans will probably never see this political crisis play out in real life. And that’s probably a good thing: by all appearances, the intended purpose of the constitutional provision was to address a president with a serious ailment – say, a stroke, for example – in which he or she is alive, but unable to fulfill the duties of the office. In other words, for the first time, the concept of a “soft palace coup” has been officially brought up on public media; we expect such speculation will only get louder. The ball is now in Trump’s court.

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“Populism is not a philosophy or a concept, like socialism or capitalism, for example. Rather it is a cry of pain, where people are saying: Do something. Help!”

Greenspan Blames Productivity Decline For Political, Economic Crises (BI)

Alan Greenspan, the former chairman of the US Federal Reserve whose low-interest policies (some say) helped inflate the dot-com and mortgage bubbles of 2000 and 2008, did a fascinating interview with Gold Investor recently. In it, Greenspan produced an incredibly cogent explanation of the role that reduced long-term productivity has had in fuelling populism, Brexit and Trump. Before we deliver Greenspan’s quote, some background: “Productivity” is one of the least-sexy areas of macroeconomics, even though right now it is one of the biggest issues bedevilling it. Here’s a chart from the Resolution Foundation showing the phenomena:

The “productivity puzzle” is this: The amount investors get in return, in aggregate, for investing in new workers is in long-term decline. Productivity growth is in decline globally and heading toward zero. This is counterintuitive because new technology ought to make workers more productive and more efficient. A single employee with a laptop can do more today than a roomful of secretaries, mathematicians, and writers could in the 1960s. We ought to be getting more bang for our bucks. Fix productivity, and you fix everything, economists believe – including GDP growth, workers’ pay, investment returns, and so on. But instead we’ve got stagnating incomes, low growth, and low productivity for money invested. The productivity decline isn’t a complete mystery, of course. We know it is a mixture of deflationary forces, an aging population, excessive debt, and increased inequality. But putting that all together in a simple, elegant way is tough. That’s why this answer from Greenspan is so good. He was asked whether he was concerned about Stagflation.

“We have been through a protracted period of stagnant productivity growth, particularly in the developed world, driven largely by the aging of the ‘baby boom’ generation. Social benefits (entitlements in the US) are crowding out gross domestic savings, the primary source for funding investment, dollar for dollar. The decline in gross domestic savings as a share of GDP has suppressed gross non-residential capital investment. It is the lessened investment that has suppressed the growth in output per hour globally. Output per hour has been growing at approximately 0.5% annually in the US and other developed countries over the past five years, compared with an earlier growth rate closer to 2%.

That is a huge difference, which is reflected proportionately in GDP and in people’s standard of living. As productivity growth slows down, the whole economic system slows down. That has provoked despair and a consequent rise in economic populism from Brexit to Trump. Populism is not a philosophy or a concept, like socialism or capitalism, for example. Rather it is a cry of pain, where people are saying: Do something. Help!”

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Seek shelter.

S&P 500 Earnings Stuck at 2011 Levels, Stocks up 87% Since (WS)

The S&P 500 stock index edged up to an all-time high of 2,351 on Friday. Total market capitalization of the companies in the index exceeds $20 trillion. That’s 106% of US GDP, for just 500 companies! At the end of 2011, the S&P 500 index was at 1,257. Over the five-plus years since then, it has ballooned by 87%! These are superlative numbers, and you’d expect superlative earnings performance from these companies. Turns out, reality is not that cooperative. Instead, net income of the S&P 500 companies is now back where it first had been at the end of 2011. Hype, financial engineering, and central banks hell-bent on inflating asset prices make a powerful fuel for stock prices. And there has been plenty of all of it, including financial engineering.

Share buybacks, often funded with borrowed money, have soared in recent years. But even that is now on the decline. Share buybacks by the S&P 500 companies plunged 28% year-over-year to $115.6 billion in the three-month period from August through October, according to the Buyback Quarterly that FactSet just released. It was the second three-month period in a row of sharp year-over-year declines. And it was the smallest buyback total since Q1 2013. Apple with $7.2 billion in buybacks in the quarter, GE with $4.3 billion, and Microsoft with $3.6 billion topped the list again. Still, despite the plunge in buybacks, 119 companies spent more on buybacks than they’d earned in the quarter. On a trailing 12-month basis, 66% of net income was blown on buybacks.

Alas, net income has been a problem. By now, with 82% of the S&P 500 companies having reported their results for Q4 2016, earnings rose 4.6% year-over-year, according to FactSet. It’s the second quarter in a row of year-over-year earnings growth, after six quarters in a row of earnings declines. For the entire year 2016, earnings edged up 0.4% from 2015. And revenue inched up 2.4% – in a year when inflation, as measured by the Consumer Price Index, rose 2.8%.

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“..Australians are in hock to the tune of more than $1.4 trillion on housing. That’s a hell of a lot of debt just to keep the wind and rain out.”

The Nasty Little Secret About Housing Affordability (ABC.au)

There’s a nasty little secret about housing affordability. For all the furrowed brows, the sombre looks and the public handwringing from policy makers, no-one is actually serious about fixing the problem because they all fear the potential fallout. The Government is running in circles on the issue while the Reserve Bank is praying the mess will slowly evaporate over time. It’s become a regular event; a politician conjures up an outlandish idea to again make housing affordable to the masses. If it’s not a cash splash to first home buyers, it’s a harebrained scheme to allow younger Australians to dip into their superannuation. Last week, it was a plan to force banks to lower lending standards. In each case, the net effect would be to lift demand and raise the cost of housing. Unfortunately, at this point in the economic cycle, there are only two mechanisms that could solve the social and political issue of our time.

The first is for housing prices to experience a dramatic fall. And the second is for wages to rise substantially. The first comes with a nasty side-effect: it would create economic chaos and send many of our banks to the wall. Achieving, or at least promising, the second might get you elected but ultimately would prove disastrous with spiralling inflation and, you guessed it, a probable spike in housing prices. Both are unthinkable. A crash could be catastrophic because our banks essentially have morphed into glorified building societies, with the bulk of their earnings geared towards residential mortgages. The two biggest lenders, Commonwealth and Westpac, have around 60% of their loan books devoted to housing.

Real estate is baked into the Australian psyche. We talk about it ad nauseam, owners obsess over upgrades and renovations and those outside the owners’ club fret about how to enter. All up, Australians are in hock to the tune of more than $1.4 trillion on housing. That’s a hell of a lot of debt just to keep the wind and rain out. Of that, more than half a trillion is on loan to property investors.

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Bankers going to court.

The Unthinkable Just Happened in Spain (DQ)

Untouchable. Inviolable. Immunity. Impunity. These are the sort of words and expressions that are often associated with senior central bankers, who are, by law, able to operate more or less above the law of the jurisdictions in which they operate. Rarely heard in association with senior central bankers are words or expressions like “accused”, “charged” or “under investigation.” But in Spain this week a court broke with that tradition, in emphatic style. As part of the epic, multi-year criminal investigation into the doomed IPO of Spain’s frankenbank Bankia – which had been assembled from the festering corpses of seven already defunct saving banks – Spain’s national court called to testify six current and former directors of the Bank of Spain, including its former governor, Miguel Ángel Fernández Ordóñez, and its former deputy governor (and current head of the Bank of International Settlements’ Financial Stability Institute), Fernando Restoy.

It also summoned for questioning Julio Segura, the former president of Spain’s financial markets regulator, the CNMV (the Spanish equivalent of the SEC in the US). The six central bankers and one financial regulator stand accused of authorizing the public launch of Bankia in 2011 despite repeated warnings from the Bank of Spain’s own team of inspectors that the banking group was “unviable.” Though they have so far only been called to testify, the evidence against the seven former public “servants” looks pretty conclusive. Testifying against them are two of Banco de España’s own inspectors who have spent the last two years investigating Bankia’s collapse on behalf of the trial’s presiding judge, Fernando Andreu.

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“We have won. We have won the major legal argument. This is the last five years of my life and it’s an embarrassment for New Zealand.”

Kim Dotcom Loses New Zealand Extradition Case But Claims Major Victory (NZH)

The evidence of the case has not been argued in New Zealand courts with the legal debate here being one of trying to match the crimes Dotcom and others are charged with to the crimes listed in the Extradition Act. In an interview with the Herald, Dotcom said the ruling was a “major victory” because it ruled that there was no New Zealand equivalent to the US criminal charges of copyright violation. “The major part of this litigation has been won by this judgment – that copyright is not extraditable. “They destroyed my family, destroyed my business, spied on me and raided my home and they did all of this on a civil copyright case. “We have won. We have won the major legal argument. This is the last five years of my life and it’s an embarrassment for New Zealand.”

He said it was effectively a statement from the court that neither he, his co-accused or Megaupload had broken any New Zealand laws. “Now they’re trying through the back door to say this was a fraud case. I’m confident going with this judgment to the Court of Appeal. The ruling today has created an unusual bureaucratic contradiction – the warrant which was served on Dotcom when he was arrested on January 20, 2012, stated he was being charged with “copyright” offences. Likewise, the charges Dotcom will face in the US are founded in an alleged act of criminal copyright violation. Dotcom said there were plans to take a separate court action over the arrest warrant, given it showed he had been arrested for a crime which effectively did not exist in New Zealand. “My arrest warrant, the document that kicked everything off in New Zealand, is not for fraud. In my arrest warrant, there is nothing about fraud.”

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Recognize this? “The shelves looked wonderful, perfect, almost clinical, as though invented in a lab in my absence; but there was no smell.”

UK Vegetable Shortage A Sign Of Things To Come (G.)

The UK’s clock has been set to Permanent Global Summer Time once more after a temporary blip. Courgettes, spinach and iceberg lettuce are back on the shelves, and the panic over the lack of imported fruit and vegetables has been contained. “As you were, everyone,” appears to be the message. But why would supermarkets – which are said to have lost sales worth as much as £8m in January thanks to record-breaking, crop-wrecking snow and rainfall in the usually mild winter regions of Spain and Italy – be so keen to fly in substitutes from the US at exorbitant cost? Why would they sell at a loss rather than let us go without, or put up prices to reflect the changing market? Why indeed would anyone air-freight watery lettuce across the whole of the American continent and the Atlantic when it takes 127 calories of fuel energy to fly just 1 food calorie of that lettuce to the UK from California?

The answer is that, in the past 40 years, a whole supermarket system has been built on the seductive illusion of this Permanent Global Summer Time. As a result, a cornucopia of perpetual harvest is one of the key selling points that big stores have over rival retailers. If the enticing fresh produce section placed near the front of each store to draw you in starts looking a bit empty, we might not bother to shop there at all. But when you take into account climate change, the shortages of early 2017 look more like a taste of things to come than just a blip, and that is almost impossible for supermarkets to admit. Add the impact of this winter’s weather on Mediterranean production, the inflationary pressures from a post-Brexit fall in the value of sterling against the euro, and the threat of tariffs as we exit the single market, and suddenly the model begins to look extraordinarily vulnerable.

I can remember the precise moment I first understood that we had been taken into this fantastical, nature-defying system without most of us really noticing. It was 1990 and I had been living and working with Afghan refugees in Pakistan’s North-West Frontier province for a long period. The bazaars where we bought our food were seasonal, and stocked from the immediate region. Back home on leave in the UK, I had that sense of dislocation that enables you to see your own culture as if from the outside. It was winter, but the supermarkets were full of fresh fruits and vegetables from around the world. The shelves looked wonderful, perfect, almost clinical, as though invented in a lab in my absence; but there was no smell. It was vaguely troubling in a way I couldn’t identify at the time.

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Excellent overview of the very scary latest on Fukushima from multiple sources at Zero Hedge.

Fukushima Aborts Latest Robot Mission Radiation At “Unimaginable” Levels (ZH)

Two years after sacrificing one robot, TEPCO officials have aborted their latest robot mission inside the Fukushima reactor after the ‘scorpion’ became unresponsive as it investigated the previously discovered hole where the core is believed to have melted. A “scorpion” robot sent into a Japanese nuclear reactor to learn about the damage suffered in a tsunami-induced meltdown had its mission aborted after the probe ran into trouble, Tokyo Electric Power company said Thursday. As Phys.org reports, TEPCO, the operator of the Fukushima nuclear plant, sent the remote-controlled device into the No. 2 reactor where radiation levels have recently hit record highs.

The “scorpion” robot, so-called because it can lift up its camera-mounted tail to achieve better viewing angles, is also designed to crawl over rubble inside the damaged facility. But it could not reach its target destination beneath a pressure vessel through which nuclear fuel is believed to have melted because the robot had difficulty moving, a company spokeswoman said. “It’s not immediately clear if that’s because of radiation or obstacles,” she said, adding that TEPCO is checking what data the robot was able to obtain, including images.

[..] The robot, 60 centimetres (24 inches) long, is made by Toshiba and equipped with two cameras and sensors to gauge radiation levels and temperatures. Scorpion’s mission is to take images of the situation and collect data inside the containment vessel,” TEPCO spokesman Shinichi Nakakuki said earlier. “Challenges include enduring high levels of radiation and moving on the rough surface,” he said. Radiation levels inside the reactor were estimated last week at 650 sieverts per hour at one spot, which can effectively shut down robots in hours.

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Ann Wright served 29 years in the US Army/Army Reserves and retired as a colonel. She also was a U.S. diplomat for 16 years and served in U.S. Embassies in Nicaragua, Grenada, Somalia, Uzbekistan, Kyrgyzstan, Sierra Leone, Micronesia, Afghanistan and Mongolia. She resigned in March 2003 in opposition to the war in Iraq. She has lived in Honolulu since 2003.

Tulsi Gabbard vs. ‘Regime Change’ Wars (Wright)

I support Rep. Tulsi Gabbard, D-Hawaii, going to Syria and meeting with President Bashar al-Assad because the congresswoman is a brave person willing to take criticism for challenging U.S. policies that she believes are wrong. It is important that we have representatives in our government who will go to countries where the United States is either killing citizens directly by U.S. intervention or indirectly by support of militia groups or by sanctions. We need representatives to sift through what the U.S. government says and what the media reports to find out for themselves the truth, the shades of truth and the untruths. We need representatives willing to take the heat from both their fellow members of Congress and from the media pundits who will not go to those areas and talk with those directly affected by U.S. actions.

We need representatives who will be our eyes and ears to go to places where most citizens cannot go. Tulsi Gabbard, an Iraq War veteran who has seen first-hand the chaos that can come from misguided “regime change” projects, is not the first international observer to come back with an assessment about the tragic effects of U.S. support for lethal “regime change” in Syria. Nobel Peace Laureate Mairead Maguire began traveling to Syria three years ago and now having made three trips to Syria. She has come back hearing many of the same comments from Syrians that Rep. Gabbard heard — that U.S. support for “regime change” against the secular government of Syria is contributing to the deaths of hundreds of thousands of Syrians and – if the “regime change” succeeded – might result in the takeover by armed religious-driven fanatics who would slaughter many more Syrians and cause a mass migration of millions fleeing the carnage.

[..] During the Obama administration, Rep. Gabbard spoke critically of the U.S. propensity to attempt “regime change” in countries and thus provoking chaos and loss of civilian life. On Dec. 8, 2016, she introduced a bill entitled the “Stop Arming Terrorists Act” which would prohibit the U.S. government from using U.S. funds to provide funding, weapons, training, and intelligence support to extremists groups, such as the ones fighting in Syria – or to countries that are providing direct or indirect support to those groups. In the first days of the Trump administration, Rep. Gabbard traveled to Syria to see the effects of the attempted “regime change” and to offer a solution to reduce the deaths of civilians and the end of the war in Syria. A national organization Veterans For Peace, to which I belong, has endorsed her trip as a step toward resolution to the Syrian conflict.

Not surprisingly, back in Washington, Rep. Gabbard came under attack for the trip and for her meeting with President Assad, similar to criticism that I have faced because of visits that I have made to countries where the U.S. government did not want me to go — to Cuba, Iran, Gaza, Yemen, Pakistan, North Korea, Russia and back to Afghanistan, where I was assigned as a U.S. diplomat.

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“How you square this circle, that I understand is what they are discussing in Washington..”

UN Envoy Questions US Engagement On Syria (AFP)

UN envoy Staffan de Mistura on Sunday questioned US President Donald Trump’s engagement in solving the Syrian war, just days ahead of a new round of peace talks in Geneva. “Where is the US in all this? I can’t tell you because I don’t know,” he said, adding that the new administration was still trying to work out its priorities on the conflict. The top three US priorities include fighting Islamic State jihadists, “how to limit the influence of some major regional players and how to not to damage one of their major allies in the region,” de Mistura told the Munich Security Conference. “How you square this circle, that I understand is what they are discussing in Washington,” he said. He did not say who the regional player or major ally were but the first reference appeared to be to Iran, with the second likely to be either Turkey or Saudi Arabia.

Mistura stressed that what was ultimately key was an inclusive political solution to end the six-year conflict. “Even a ceasefire with two guarantors can’t hold too long if there is no political horizon,” he said, referring to a fragile truce brokered by Russia and Turkey in December. Any political solution has to be inclusive to be credible, he said, stressing that peace talks in Astana last week organised by Russia, Turkey and Iran, and the ceasefire deal provided an opening that should be explored. The US envoy for the anti-IS coalition, Brett McGurk, acknowledged that Trump’s administration is “re-looking at everything, which is a very healthy process from top to bottom.” “We will be very selfish about protecting and advancing our interests,” he told the same forum.

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This will always remain controversial. But it’s the only way.

Kaziranga: The Park That Shoots People To Protect Rhinos (BBC)

Kaziranga National Park is an incredible story of conservation success. There were just a handful of Indian one-horned rhinoceros left when the park was set up a century ago in Assam, in India’s far east. Now there are more than 2,400 – two-thirds of the entire world population. This is where David Attenborough’s team came to film for Planet Earth II. William and Catherine, the Duke and Duchess of Cambridge, came here last year. But the way the park protects the animals is controversial. Its rangers have been given the kind of powers to shoot and kill normally only conferred on armed forces policing civil unrest. At one stage the park rangers were killing an average of two people every month – more than 20 people a year. Indeed, in 2015 more people were shot dead by park guards than rhinos were killed by poachers. Innocent villagers, mostly tribal people, have been caught up in the conflict.

Rhinos need protection. Rhino horn can fetch very high prices in Vietnam and China where it is sold as a miracle cure for everything from cancer to erectile dysfunction. Street vendors charge as much as $6,000 for 100g – making it considerably more expensive than gold. Indian rhinos have smaller horns than those of African rhinos, but reportedly they are marketed as being far more potent. But how far should we go to protect these endangered animals? I ask two guards what they were told to do if they encountered poachers in the park. “The instruction is whenever you see the poachers or hunters, we should start our guns and hunt them,” Avdesh explains without hesitation. “You shoot them?” I ask. “Yah, yah. Fully ordered to shoot them. Whenever you see the poachers or any people during night-time we are ordered to shoot them.” Avdesh says he has shot at people twice in the four years he has been a guard, but has never killed anybody. He knows, however, there are unlikely to be any consequences for him if he did.

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Oct 082016
 
 October 8, 2016  Posted by at 9:34 am Finance Tagged with: , , , , , , , , , ,  4 Responses »


DPC Royal Street, New Orleans 1900

US Consumer Borrowing Rises by Most in Nearly a Year (BBG)
US Consumer Credit Has Second Biggest Jump On Record (ZH)
US Payrolls Up 156K, Missing Expectations, Unemployment Rate Rises To 5.0% (ZH)
EU Leaders Line Up To Insist UK Will Pay A High Price For Brexit Stance (G.)
Worries Deepen That Globalization Is Hitting the Skids (WSJ)
Worries Grow That China Faces a Perilous Property Bubble (WSJ)
EU Imposes Import Duties Of Up To 73.7% On Cheap Chinese Steel (G.)
He’ll Likely Lose – But Trump Is The Final Warning To Elites (G&M)
Why Does This Happen on My Vacation? -The Trump Tapes (Scott Adams)
Hounds Hot On The Heels Of Poachers In Rhino Country (G.)
New Zealand Child Poverty A Source Of Deep Concern: UN (G.)
UN Watchdog Demands Saudis Stop Child Executions (AFP)

 

 

No deleveraging: Household debt rises 8.5% annualized.

US Consumer Borrowing Rises by Most in Nearly a Year (BBG)

Household borrowing increased in August at the fastest pace in almost a year, led by a jump in loans for school and automobile purchases. The $25.9 billion increase, or an annualized 8.5%, followed a revised $17.8 billion gain the prior month, Federal Reserve figures showed Friday. The median projection called for a $16.5 billion advance. Non-revolving credit, which includes car and educational loans, also posted the largest advance since September of last year. Steady hiring and income growth may be making Americans more willing to borrow, helping to sustain consumer spending and the economic expansion.

Non-revolving credit increased $20.2 billion, while revolving debt rose $5.6 billion during the month, the Fed’s report showed. Lending by the federal government, mostly for student loans, climbed $18.7 billion in August on an unadjusted basis as students prepared to return to school for the fall semester. The Fed’s consumer credit report doesn’t track debt secured by real estate, such as home equity lines of credit and home mortgages.

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Tyler on the household debt topic, delving a bit deeper, as in beyond seasonal adjustments.

US Consumer Credit Has Second Biggest Jump On Record (ZH)

It will likely not come as a big surprise that at a time when US personal savings are once again declining, perhaps as a result of soaring health insurance costs, that US consumers are forced to borrow increasingly more to make ends meet. And, as expected, the latest consumer credit report confirmed this, when moments ago the Federal Reserve announced that in August, total US credit surged by $25.9 billion on a seasonally adjusted basis, smashing expectations of a $16.5 billion increase, and the third biggest monthly jump since 2001.[..] what was perhaps most interesting is that on a non-seasonally adjusted basis, when removing the artificial Arima-X-13 seasonal factors, August consumer credit soared by a near record $46.8 billion, an absolute outlier month, and surpassed just once in history.

So for all those who, still, erroneous claim that US consumers are deleveraging, show them this chart, because the scramble if not so much into revolving debt then certainly into government-funded auto and student loans, is unlike anything ever seen. And speaking of just those two kinds of debt, here they are broken out: they have both never been higher.

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Last big jobs report before the elections (November’s will come too late to make much difference) is mixed, but certainly not very good.

US Payrolls Up 156K, Missing Expectations, Unemployment Rate Rises To 5.0% (ZH)

With Wall Street all bulled up on the economy, expecting a print of 175K while the whipser number was decidedly higher, and closer to 200K thanks to Goldman’s optimism, moments ago the BLS reported that in September the US created only 156K jobs, missing expectations, and down from the upward revised 167K in August, leaving the question of whether the Fed will hike imminently, unanswered. However, offsetting the September miss, last month’s disappointing print of 151K was revised to 167K. At the same time, the change in total nonfarm payroll employment for July was revised down from +275,000 to +252,000. With these revisions, employment gains in July and August combined were 7,000 less than previously reported.

Over the past 3 months, job gains have averaged 192,000 per month. The household survey employment number of 151.968MM was 354K bigger than last month, and pushed the annual increase higher by 2.0%, the biggest since March 2016. The unemployment rate, at 5.0%, and the number of unemployed persons, at 7.9 million, changed little in September, up 0.1% from August and the highest in 6 months. Both measures have shown little movement, on net, since August of last year. The participation rate rose by 0.1% t 62.9% as people not in the labor force declined by 207K.

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Which should make Britons very happy to leave that bunch of mobsters behind. Even if their own new ‘leaders’ are just as bad. But those you can vote out next time around.

EU Leaders Line Up To Insist UK Will Pay A High Price For Brexit Stance (G.)

Britain and the EU appear more bitterly divided over Brexit than at any time since the referendum, with European leaders ramping up their rhetoric after Theresa May signalled she would seek a clean break with the bloc. The prime minister’s Conservative conference speech, in which she indicated Britain would prioritise immigration control and restore the primacy of UK law to become an “independent, sovereign nation” without full access to the single market, drew a sharp response from continental capitals. In Paris, François Hollande said Britain must suffer the consequences of its decision. “The UK has decided to do a Brexit. I believe even a hard Brexit,” he said. “Well, then we must go all the way through the UK’s willingness to leave the EU. We have to have this firmness.”

If not, “we would jeopardise the fundamental principles of the EU”, the French president said on Thursday night. “Other countries would want to leave the EU to get the supposed advantages without the obligations.. There must be a threat, there must be a risk, there must be a price.” Hollande’s message was underlined on Friday by the president of the European commission, Jean-Claude Juncker, who said the 27 remaining member states must not give an inch in exit negotiations. “You can’t have one foot in and one foot out,” he said. “We must be unyielding on this point.” Britain risked “trampling everything that has been built” over six decades of European integration, he said.

In Berlin, Angela Merkel rammed home the same point. “If we don’t insist that full access to the single market is tied to complete acceptance of the four basic freedoms, then a process will spread across Europe whereby everyone does and is allowed what they want.”

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Turns out, globalization is just another religion. Hilarious that the CEO of United Parcel Service is quoted; yes, we understand they are all for ‘free’ trade, it’s what their business is based on.

Worries Deepen That Globalization Is Hitting the Skids (WSJ)

Global finance ministers and central bankers are descending on Washington this week with a central concern in mind: fear that the modern age of globalization is hitting a wall. Last year’s $646 billion in foreign direct investment in rich economies represents a 40% drop from the peak before the financial crisis. International lending, as measured by cross-border banking claims at the Bank for International Settlements, is down nearly $2.6 trillion, or 9%, over the past two years. International trade this year will grow at the slowest pace since 2007, according to the World Trade Organization, which has slashed its forecast for growth in global trade volumes to 1.7% in 2016 from a previous estimate in April of 2.8%.

Imports among the world’s 20 largest economies have fallen as a share of their GDP for four consecutive years, and growth in demand for shipping containers fell to 4% this year after four decades of double-digit expansion. As financial officials gather in the U.S. capital this week at semiannual meetings of the IMF and the World Bank, there is widespread concern that this global malaise could worsen if nations intentionally turn inward. Too many politicians are backing trade barriers in a misguided effort to boost national growth in the short term, said Roberto Azevedo, director general of the WTO. “The medicine that is being often prescribed is protectionism, and that is exactly the kind of medicine that is going to hurt the patient, not help him,” he said.

The head of the IMF, Christine Lagarde, also expressed concern over rising protectionism around the world, including in the U.S. “Curbing free trade would be stalling an engine that has brought unprecedented welfare gains around the world over many decades,” she said. The slower-than-expected economic activity is feeding a cycle of banks pulling back from international risk, companies hesitant to invest in new production, and governments issuing regulations—often linked to national security—favoring domestic producers. “Now that we’re in this 2% [growth] range in the U.S. and less than that in other countries, people are clinging more to the past and thinking more how to protect versus embracing the future,” said David Abney, CEO of United Parcel Service.

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“The reality speaks of morbid financial excess..” (BTW, two WSJ articles in a row that start with Worries, some that deepen, others grow -same thing)

Worries Grow That China Faces a Perilous Property Bubble (WSJ)

The latest buying frenzy began late last year, when Mr. Xi set a national goal of reducing the number of unsold homes in 2016. In the following months, cities rushed to relax home-purchase curbs that were put in place to discourage speculation during the last housing boom. Beijing also made it easier for homebuyers to access credit. The Chinese leadership’s hope was that modest borrowing by families and individuals would boost property sales and cut inventory, aiding related industries such as construction that, all told, account for about a fifth of China’s gross domestic product. It hasn’t gone as planned. Too much investment went into housing, economists say, aided by a series of central-bank easing measures since late 2014.

Government data show more than a third of new loans in the first half of 2016 went to housing. By comparison, an average 17.4% of new loans went to housing between 2010 and 2015, according to BNP Paribas. “The reality speaks of morbid financial excess,” said Harrison Hu at RBS. In July, six major cities showed home-price gains of more than 20% from the prior year; in August, 10 cities did. In the coastal city of Xiamen, prices skyrocketed 44.3%. Average new home prices across 70 Chinese cities in August rose far less, 7.5%, suggesting that many smaller cities are still struggling with too much inventory.

Chinese households’ leverage, meanwhile, is fast rising to dangerous levels. A study by China’s Haitong Securities shows that total home loans are expected to make up 30% China’s GDP this year, up from less than 20% three years ago. That is higher than Japan’s level during its property-bubble years in the late 1980s. One moderating factor: Most Chinese households pay down payments equal to about a third of the home’s value, making homeowners less vulnerable to price drops.

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Yeah, about that globalization thing… You know, protectionism and all that…

EU Imposes Import Duties Of Up To 73.7% On Cheap Chinese Steel (G.)

The European Union has slapped tariffs of up to 73.7% on Chinese steel after manufacturers were forced to cut jobs due falling prices and demand for the material amid an influx of cheap imports from Asia. Thousand of job have already been lost in the steel industry in Britain in the last year with thousands more at risk as the sector remains under pressure. Industry leaders have partly blamed the squeeze on the sector on China’s dumping of cheap steel in Europe as it struggles to find buyers for its products domestically. The EU has agreed to impose import duties of between 13.2% and 22.6% on Chinese hot-rolled steel, which is used in pipelines and gas containers, and 65.1% and 73.7% on heavy plates, which are used in civil engineering projects.

The state of the steel industry became part of the debate about Britain’s future in the EU before the referendum in June, with Brexiters claiming that the country would be better able to protect workers and introduce tariffs on Chinese imports if it voted to leave. UK Steel, the industry trade body, welcomed the speed at which the new EU tariffs had been introduced but warned that the levy on hot-rolled steel was not high enough, which could hurt Port Talbot, the biggest steelworks in Britain. Dominic King, head of policy and external affairs at UK Steel, said: “The speed at which tariffs have been imposed on dumped steel from China by the EU is very welcome. However, while we hope the tariffs for heavy plate are robust enough to ensure free and fair trade, the proposed levels for hot-rolled steel are not high enough, which might encourage China to continue dumping it on to the EU market.”

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I don’t think Trump will lose. But good perspective, from Canada.

He’ll Likely Lose – But Trump Is The Final Warning To Elites (G&M)

Donald Trump will probably lose the election. But he is a final warning. Unless political elites of both the left and the right become more humble, unless they once again ask themselves how their agendas will play in Peoria, the next rough beast might slouch over the corpse of the republic. “Will it play in Peoria?” goes back to the days of vaudeville. The city of 115,000 in central Illinois was once considered the ultimate focus group, the embodiment of Middle America, the place to test a joke or a soda or a social policy to learn what white folks without a fancy degree thought of it. Back in the day, you knew better than to defy the settled judgment of this ultimate test market. You went as far as Peoria would let you, and no further.

But we grew impatient. You have to fight Jim Crow, whatever Peoria thinks. Free trade will lift most boats, even if it swamps a few. The environment is too precious, and at too much risk, to go slow. Lower taxes and less red tape will help the economy grow, even if it profits some more than others. The left wanted social justice, protection for minorities, a cleaner environment. The right wanted lower taxes and trade deals. Despite the rhetoric, each accommodated the other. Republicans left the Democrats’ progressive policies largely intact; Democrats learned to embrace, or at least reluctantly accept, globalization. And everybody knew what was really going on in Washington. A tax break for you. A subsidy for me. You take care of my client and I’ll take care of yours. Deal? Then let’s celebrate. We’ll expense it.

What did the guy on the line think about this? The wife at Wal-mart? The folks at the ball park? No one really cared. Yeah, politicians chased their vote. But respect them, even defer to their collective wisdom? Not so much. The accommodation between left and right started unravelling in the 1980s. The Bork confirmation. The Thomas confirmation. Contract with America. Impeaching Bill Clinton. Iraq. Obama. The Tea Party. Gay marriage. And now the Democrats want to replace a black president with a woman? A CLINTON? Meanwhile, Peoria is hurting. The city is home to Caterpillar. But the heavy-equipment giant has outsourced most of its work force overseas or to so-called right-to-work states.

But what does Washington care? The left worries more about combatting global warming than about blue-collar workers with bad backs and no jobs. The right promises to retrain them, but somehow never gets around to it. The laid-off boys in the bars of Peoria blame the illegals, the only ones even more voiceless than themselves. They seethe at the Wall Street suits who destroyed the economy and got off scot-free. And what the hell is transgender, anyway? They look at their daughter’s report card. She’s only getting Cs. What future is there for anyone who’s only getting Cs?

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How wrong is Dlibert’s alter ego? “It is fair to assume that Bill and Hillary are about to experience the worst weeks of their lives.”

Why Does This Happen on My Vacation? -The Trump Tapes (Scott Adams)

By now you know about the Access Hollywood recording in which Donald Trump said bad things eleven years ago. Many of my readers asked me to weigh in. I’ll give you my thoughts, in no particular order.

1. If this were anyone else, the election would be over. But keep in mind that Trump doesn’t need to outrun the bear. He only needs to outrun his camping buddy. There is still plenty of time for him to dismantle Clinton. If you think things are interesting now, just wait. There is lots more entertainment coming.

2. This was not a Trump leak. No one would invite this sort of problem into a marriage.

3. I assume that publication of this recording was okayed by the Clinton campaign. And if not, the public will assume so anyway. That opens the door for Trump to attack in a proportionate way. No more mister-nice-guy. Gloves are off. Nothing is out of bounds. It is fair to assume that Bill and Hillary are about to experience the worst weeks of their lives.

4. If nothing new happens between now and election day, Clinton wins. The odds of nothing new happening in that timeframe is exactly zero.

5. I assume that 75% of male heads of state, including our own past presidents, are total dogs in their private lives. Like it or not, Trump is normal in that world.

6. As fictional mob boss Tony Soprano once said in an argument with his wife, “You knew what you were getting when you married me!” Likewise, Trump’s third wife, Melania, knew what she was getting. It would be naive to assume Trump violated their understanding.

7. Another rich, famous, tall, handsome married guy once told me that he can literally make-out and get handsy with any woman he wants, whether she is married or not, and she will be happy about it. I doubted his ridiculous claims until I witnessed it three separate times. So don’t assume the women were unwilling. (Has anyone come forward to complain about Trump?)

8. If the LGBTQ community wants to be a bit more inclusive, I don’t see why “polyamorous alpha male serial kisser” can’t be on the list. If you want to label Trump’s sexual behavior “abnormal” you’re on shaky ground.

9. Most men don’t talk like Trump. Most women don’t either. But based on my experience, I’m guessing a solid 20% of both genders say and do shockingly offensive things in private. Keep in mind that Billy Bush wasn’t shocked by it.

10. Most male Hollywood actors support Clinton. Those acting skills will come in handy because starting today they have to play the roles of people who do not talk and act exactly like Trump in private.

11. I’m adding context to the discussion, not condoning it. Trump is on his own to explain his behavior.

12. Clinton supporters hated Trump before this latest outrage. Trump supporters already assumed he was like this. Independents probably assumed it too. Before you make assumptions about how this changes the election, see if anyone you know changes their vote because of it. All I have seen so far is people laughing about it.

12. I hereby change my endorsement from Trump to Gary Johnson, just to get out of the blast zone. Others will be “parking” their vote with Johnson the same way. The “shy Trump supporter” demographic just tripled.

13. My prediction of a 98% chance of Trump winning stays the same. Clinton just took the fight to Trump’s home field. None of this was a case of clever strategy or persuasion on Trump’s part. But if the new battleground is spousal fidelity, you have to like Trump’s chances.

14. Trump wasn’t running for Pope. He never claimed moral authority. His proposition has been that he’s an asshole (essentially), but we need an asshole to fight ISIS, ignore lobbyists, and beat up Congress. Does it change anything to have confirmation that he is exactly what you thought he was?

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Stop bombing teh Middle East and send your troops to protect Afrian wildlife. Much better use of force. May actually save mankind instead of destroying it.

Hounds Hot On The Heels Of Poachers In Rhino Country (G.)

“I am ready to die for conserving the rhino,” says Wisdom Makhubele. But the brave young ranger now has another weapon in the war against rhino poaching: the extraordinary nose of tracking hounds. The trained dogs can run poachers to ground far faster than people, sometimes even being set free in packs and followed from helicopters. The new canine training unit at the Southern African Wildlife College (SAWC), near Acornhoek, opened earlier this year and dogs have already brought armed poachers to heel in Kruger national park, the epicentre of the rhino poaching crisis. At least 6,000 African rhinos have been slaughtered by poachers since 2008, to fuel the soaring demand for its horn in Asia, where it is highly valued as a supposed tonic and status symbol.

The rhino poaching epidemic across Africa has exploded in recent years, with annual increases in killings every year since 2009: 1,338 were slaughtered in 2015. It was a hot topic at the major wildlife trade summit in Johannesburg this week, where an attempt by Swaziland to legalise rhino horn trade was defeated. South Africa hosts more than 90% of the 20,000 surviving white rhinos and almost half the 4,800 remaining black rhinos and saw a slight dip in the slaughter in 2015, the first decrease in nine years. Over 70% of the rhino kills occur in Kruger and a sign on the way into the park reads “Poachers will be poached”. Dogs have been used for camp security for years, but the escalating poaching crisis has found them a new role.

“They are awesome – they are instinctive to tracking,” says Johan van Straaten, manager of the dog unit, which has been funded by WWF Nedbank Green Trust. “All these dogs can track, it’s in their genes. But we train them to track the scent we want. These dogs are imprinted on human scent, like narcotics dogs are on drugs.” [..] Being a ranger in the war on poaching can be deadly – more than 1,000 rangers were killed around the world in the last decade and many more injured. The danger follows the rangers home too. “They are targets and their families can be targets, that’s for certain,” says van Straaten. Makhubele comes from a local village. “People there know me and some of them are poachers, but I am not afraid,” he says. “This [rhino population] is our legacy and we have to look after it.”

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New Zealanders must stand up against their government. It’s very much your shame too.

New Zealand Child Poverty A Source Of Deep Concern: UN (G.)

The UN has said in a damning report that it is deeply concerned about New Zealand’s persistently high rates of child poverty. Unicef says 300,000 children – a third of New Zealand’s child population – now live below the poverty line. This is a rise of 45,000 in a year. Government representatives travelled to Geneva last month to present the country’s progress on its commitment to protecting the rights of the child to the UN. The UN committee’s report acknowledges widespread public debate and media attention on child poverty in New Zealand, but expresses serious concern about the government’s failure to address the issue systematically.

“The committee is deeply concerned about the enduring high prevalence of poverty among children,” the report says, highlighting “the effect of deprivation on children’s right to an adequate standard of living and access to adequate housing, with its negative impact on health, survival and development, and education”. The report expresses particular concern about the number of Maori and Pasifika children living in deprived circumstances. Both groups are disproportionately represented in child poverty statistics.

It calls for “urgent measures to address disparities in access to education, health services and a minimum standard of living for Maori and Pasifika children and their families” and says more effort should be invested in preserving Maori children’s cultural identity. The government of the National party is urged to take a systematic approach to tackling child poverty, and to establish a “national definition” to measure child poverty, something it has repeatedly refused to do. The Green party co-leader Metiria Turei welcomed the UN report. “The national government has repeatedly denied the seriousness of the problem and deserves the criticism it has received from the committee,” she said. “And that means thousands on NZ children are missing out on their chance for a decent life, especially Maori and Pasifika children.”

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What is more sickening, that the Saudis do this, or that we insist on continuing to call them our friends? “..the stoning, amputation and flogging of children..” does not belong in our world.

UN Watchdog Demands Saudis Stop Child Executions (AFP)

UN rights experts demanded Friday that Saudi Arabia immediately overturn laws allowing for the execution of children, and for punishments of minors including stonings, amputations and flogging. In a report on the plight of children in the wealthy Gulf state, a UN committee took Riyadh to task for allowing minors to be sentenced as adults, including to harsh corporal punishment and even the death penalty. The United Nations Committee on the Rights of the Child also criticised what it called Saudi Arabia’s systematic discrimination against girls, who are not considered full subjects, and who can be married off as early as nine years of age.

In its report, the committee expressed its “deepest concern” that Saudi Arabia “tries children above 15 years as adults and continues to sentence to death and to execute persons for offences that they allegedly committed when they were under the age of 18”. The committee, which is composed of 18 independent experts who monitor the implementation of the UN Convention on the Rights of the Child, pointed to a number of cases where minors had been sentenced to death. It said that at least four of the 47 people executed on January 2 this year were under 18 when they were sentenced to death.

And it demanded that Riyadh “immediately halt the execution” of those currently on death row who allegedly committed their crimes when they were minors, including Ali Mohammed Baqr al-Nimr, Abdullah Hasan al-Zaher, and Salman Bin Ameen Bin Salman Al-Qureish. Committee chairman Benyam Mezmur told reporters Saudi Arabia was only one of five countries, alongside China, Iran, Pakistan, and the Maldives, where child rights experts had ever needed to raise concerns about executions. “This is a very, very serious issue,” he said. The committee also demanded that Saudi Arabia immediately repeal laws permitting “the stoning, amputation and flogging of children”.

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May 142016
 


Camp Meade, Maryland 1917

IMF Meddling On Brexit Is Scandalous Skulduggery (AEP)
The Zombies Return: Steel Firms In China Come Back From The Dead (SCMP)
Europe Launches Probe Into Claims China Is Subsidising Steel Producers (Tel.)
China Complains To WTO That US Fails To Implement Tariff Ruling (R.)
China Inc. Misses Best Shot to Repay $430 Billion as Yuan Drops (BBG)
S&P 500 Companies Plan $600 Billion Buybacks In Losing Strategy (CNBC)
US Energy Bankruptcy Wave Surges Despite Recovering Oil Prices (R.)
The Other Fire: Fort McMurray’s Slow Burn (Tyee)
The New Era Of Monopoly Is Here (Stiglitz)
Vicious Feedback Loops in New York Art and European Equities (Dizard)
What If Greece Got Massive Debt Relief But No One Admitted It? – Part 1 (FT)
“I’ll Never Retire”: Americans Break Record for Working Past 65 (BBG)
Retiree To Fly 80 South African Rhinos To Australia (G.)
Merkel’s Deal with Turkey in Danger of Collapse (Spiegel)
EU to Work with African Despot to Keep Refugees Out (Spiegel)

Ambrose strikes. Can’t go wrong with a headline like that. “..the rescue of the euro and the North European banking system in 2010, otherwise known by some cruel twist of language as the Greek bail-out.” And “..take your rotting pile of damp wood elsewhere Madame Lagarde.”

IMF Meddling On Brexit Is Scandalous Skulduggery (AEP)

If the IMF and its co-conspirators in the Treasury wish to deter undecided voters from flirting with Brexit, they have certainly failed in my case. Having listened to their irritating lectures, I am more inclined to opt for defiance, for their mask of objectivity has fallen. There can no longer be any doubt that they are playing politics with the democratic self-determination of this country. The Fund gives the game away in point 8 of its Article IV conclusion on the UK economy. It states that “the cost of insuring against a UK sovereign default has doubled (albeit from a low level)”. Any normal person who does not follow the derivatives markets would interpret this as a grim warning from global investors. Yes, the price of credit default swaps on 5-year UK debt – the proxy we all use – has jumped from 17 to 37 since late last year.

But the IMF neglected to mention that it has risen from 15 to 33 in Switzerland, from 26 to 43 in France, and from 45 to 65 in Korea. The jump has almost nothing to do with Brexit, and the IMF knows this perfectly well. The French have an expression that will be familiar to the IMF’s Christine Lagarde: ils font feu de tout bois. Her own IMF mentor and long-time chief economist, Olivier Blanchard, told me last month that there was no risk whatsoever of a sovereign bond crisis, or a Gilts strike, or a sudden stop of any kind. “Will financing be more difficult after Brexit? Will investors see the British government as more risky? I don’t think so,” he said. Professor Blanchard, who recently stepped down from the Fund and is free to speak his mind, says there may be a price to pay for Brexit but it is impossible to calculate.

“The cost of exiting will not be seamless, and the uncertainty will last for a very long time afterwards. Firms deciding whether to locate a plant in the UK or in the Continent will wait. Investment will drop,” he said. But he also said weaker pound would cushion the effects of falling investment to some degree. So bare this in mind when you comb through today’s Article IV statement with its delicious mix of precision and selective vagueness on the alleged damage of Brexit. The hit ranges from 1.5pc to 9.5pc of GDP. Note the decimal points. The range depends on whether it is “a la Switzerland, a la Norway, or a la WTO,” said Madame Lagarde. Perhaps it is churlish to point out that the IMF completely missed the onset of the global financial crisis, and was blindsided when the US fell into recession in November 2007. The Fund’s staff were still predicting sunlit uplands as far as the eye could see, even when the blackest of black storms was upon them.


The IMF misjudged the fiscal multiplier horribly in Greece

Its forecasts for Greece were wrong every single year following the rescue of the euro and the North European banking system in 2010, otherwise known by some cruel twist of language as the Greek bail-out. They originally said the Greek economy would contract by 2.6pc in 2010 and then recover briskly. What actually happened – as predicted at the time by the Indian member of the IMF board – was the most spectacular collapse of a developed economy in the post-war era. Output ultimately fell by 26pc from peak to trough. To its credit, the IMF later admitted that it had horribly misjudged the fiscal multiplier. Indeed. I don’t wish the denigrate the Fund. It remains a superb institution. I use its research all the time in my work. But on this occasion it has been misused for political purposes.

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Maybe they can pay people to dig a big hole to throw the produced steel in.?!

The Zombies Return: Steel Firms In China Come Back From The Dead (SCMP)

The grey smoke pouring once again into the sky above a rusty steel plant in a town in northern China is seen as a blessing by people who live nearby. One of the plant’s six blast furnaces was put back into operation earlier this month, breathing new life into Dongzhen in Shanxi province. The plant, formally known as Haixin Iron and Steel, was closed two years ago as demand for the metal plunged in China. Steel companies with little hope of turning a profit are among the enterprises known as “zombie firms” in China, many operating in ailing heavy industries that the central government has pledged to cut back as it attempts to create a modern, high-tech and innovation driven economy. Millions of jobs are due to be axed in the steel and coal sectors in the coming years.

But the plant at Dongzhen has been given a lifeline. It has been renamed and taken over by new owners amid signs of a rise in steel prices, plus massive support from the local government. And there is evidence that increasing numbers of other steel plants are also reopening in China, despite the government’s pledges that the industry must be cut back. Local people in Dongzhen, at least, now dare to believe there may still be hope for their beleaguered industry. Restaurants have reopened, new food stalls set up, and even watermelon vendors are driving their carts and trucks nearby to serve the thousands of workers coming in and out of the compound. Uniformed workers in red and blue helmets flow through the foundry gate, heavy trucks and cars blow their horns and there is a renewed sense of dynamism in this dusty town.

The fate of the Dongzhen steel plant highlights the dilemma facing many local government across the country: the need for massive economic reforms, weighed against the suffering created by massive job losses and the fear of social unrest. President Xi Jinping has said cutting overcapacity in ailing industries such as steel is an essential part of the government’s “supply-side” economic reforms. An unidentified “authoritative figure” was also quoted in a prominent article in the Communist Party mouthpiece the People’s Daily on Monday renewing calls to terminate “zombie companies”. Haixin, however, is not the only “zombie” steel firming coming back from the dead. As China pumped unprecedented amounts of credit to boost growth in the first quarter, many steel plants are back on stream to take advantage of a rise in steel prices.

Daily steel output on the mainland in March rebounded to a nine-month high and output in April could be even higher, according to analysts, although the steel price rally has started to fizzle away this month. “It’s difficult to take Chinese pledges to address surplus capacity seriously,” said Christopher Balding, an associate professor of economics at Peking University HSBC Business School. “There is a recent track record of talking about the problem and not taking the steps required to solve it: like a dieter who wants to lose weight and still eats chocolate chip cookies.”

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Fighting for a share of a collapsing market.

Europe Launches Probe Into Claims China Is Subsidising Steel Producers (Tel.)

A new front has opened up in the “steel war” between China and Europe after Brussels launched an investigation into whether the Beijing government is subsidising its steel producers. The European Commission said it was starting a probe into a complaint that China is subsiding its producers of hot rolled flat steel – one of the most widely used forms of the alloy. The Commission has already imposed tariffs on some forms of steel being exported into Europe after earlier investigations determined they were being “dumped” – sold at below cost – by Chinese plants, as they get rid of excess production in the wake of a drop in domestic demand. However, the new investigation could tackle the problem at source, by looking into claims China is subsidising its largely state-owned steel industry, damaging European rivals.

If it finds subsidisation is taking place, further duties could be imposed on Chinese imports in an attempt to level the playing field. The announcement comes less than 24 hours after the European Parliament voted with an overwhelming majority against China being given the coveted Market Economy Status. The move follows a complaint from Eurofer, the European steel association, and a spokesman said the group “welcomed the move into unfair subsidisation originating in China”. “Hot rolled flat steel is the bread and butter of the industry, going into everything from cans to cars and by far the most commonly used form of steel,” the spokesman added. “The European steel industry suffers damage from unfair trading practices originating in China.”

The European steel industry is in crisis at the moment as it battles the flood of cheap steel from China, and struggles against tougher environmental controls and higher prices, which are particularly punishing in the UK. More than 5,000 jobs have been lost in Britain’s steel industry in the past year as plants have struggled to compete. In April Tata launched the sale of its loss-making British steel operations based around the massive Port Talbot plant. Gareth Stace, director of trade body UK Steel, said the widening of investigations from dumping into subsidies was a progression of the campaign to fight unfair trade. “This is a welcome and much-needed investigation into Chinese Government subsidies which will run in parallel to its ongoing investigation into dumping of steel into the EU. The significant unfair trading practices carried out by China has been a major cause of the worst steel crisis in over a generation here in the UK.”

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“China’s complaint to the WTO was filed just days after Washington lodged a similar complaint against China..”

China Complains To WTO That US Fails To Implement Tariff Ruling (R.)

In another sign of escalating trade tensions between China and the United States, Beijing told the World Trade Organization on Friday that Washington was failing to implement a WTO ruling against punitive U.S. tariffs on a range of Chinese goods. China’s Ministry of Commerce (MOFCOM) said it had requested consultations with the United States over the issue, and anti-subsidy duties on products including solar panels, wind towers and steel pipe used in the oil industry. China’s complaint to the WTO was filed just days after Washington lodged a similar complaint against China, accusing it of unfairly continuing punitive duties on U.S. exports of broiler chicken products in violation of WTO rules.

“By disregarding the WTO rules and rulings, the United States has severely impaired the integrity of WTO rules and the interests of Chinese industries,” MOFCOM said in a statement distributed by the Chinese embassy in Washington. The case was first brought before the WTO by China in 2012 against U.S. duties on 15 diverse product categories that also include thermal paper, steel sinks and tow-behind lawn grooming equipment. In December 2014, the WTO’s Appellate Body ruled in favor of Chinese claims that the products subject to duties had not benefited from subsidies from “public bodies” favoring particular manufacturers.

The deadline for implementation of the rulings and recommendations of the WTO Dispute Settlement Body, set through binding arbitration, expired on April 1, according to WTO records. A U.S. Trade Representative spokesman said the United States had been “working diligently to comply with the recommendations” and to fully conform with its WTO obligations. He added that the U.S. response to China’s request for consultations would come “in due course.”

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Dollar-denominated debt is the sword of Damocles.

China Inc. Misses Best Shot to Repay $430 Billion as Yuan Drops (BBG)

The best time for China Inc. to repay its dollar debt may be coming to an end. The greenback is rallying after its worst quarter since 2010, threatening to drive up costs for companies seeking to either repay U.S. currency borrowings or hedge exposure. The yuan declined 1% since March 31, following a 2% rally between February and March. Royal Bank of Canada and Credit Suisse see more depreciation. “If corporates haven’t taken advantage of this period of yuan gains, they really only have themselves to blame,” said Sue Trinh, Hong Kong-based head of Asian foreign-exchange strategy at RBC. “The government won’t hold down the exchange rate forever.”

RBC estimates Chinese companies’ outstanding dollar borrowings have now been trimmed to $430 billion, while Daiwa Capital Markets says as much as $3 trillion was borrowed to plow into the higher-yielding yuan, including by individuals and foreign companies. A rush to repay risks accelerating capital outflows and yuan weakness amid China’s slowest economic growth in 25 years. The yuan’s renewed depreciation is a challenge for companies that took advantage of the currency’s gains in the four years through 2013 to borrow dollars offshore, profiting from both an appreciating exchange rate and higher interest rates at home. The one-way bets began to unravel as the currency dropped 2.4% in 2014 and 4.5% last year.

The yuan sank 2.6% in August last year after a shock devaluation, and then rose for the next two months as the People’s Bank of China intervened in the market to support the exchange rate. The authority reiterated in its latest monetary policy implementation report released last week that it wants to keep the currency stable. “The recent yuan stability was artificial and likely helped by consistent verbal intervention from the PBOC that there is no depreciation pressure,” said Koon How Heng at Credit Suisse in Singapore. “However, in the background, there is growing concern of increasing debt issues. We are watching growing incidences of coupon defaults.”

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Pretty damning. But it will continue short term. And a few years down the road, infrastructure will start falling apart.

S&P 500 Companies Plan $600 Billion Buybacks In Losing Strategy (CNBC)

Companies are planning to devote billions to buying back their own stock this year, even though the strategy seems to be losing its bite. Statements accompanying first-quarter earnings indicate corporations are preparing to buy a total of $600 billion in their own shares, according to Goldman Sachs calculations. That comes after a year in which S&P 500 buybacks amounted to $572.2 billion, which itself was a 3,3% increase from 2014 and part of a trend that has seen repurchases amount to more than $2.7 trillion since 2010, data from S&P Dow Jones Indices show. Buybacks slowed in the first part of the year, with TrimTabs reporting a 35% decline over 2015. However, that’s not likely to last as companies struggle to find the best way to spend cash. S&P 500 companies have nearly $1.5 trillion in cash on their balance sheets.

“The main thing that determines that is whether they see their markets pop or not,” said Jim Paulsen, chief market strategist at Wells Capital Management. “One of the things we really haven’t had in this recovery is getting all the economic boats moving north at the same time.” With the lack of sustained economic growth, companies have turned to buybacks and dividends to pick up the slack. However, the effectiveness of returning cash directly to shareholders doesn’t have the same pop it once had. Where buybacks had helped fuel the S&P 500’s meteoric rise and the second longest bull market in history, the market has been volatile but flat over the past year or so. Moreover, companies that have been the biggest movers in buybacks have underperformed significantly.

The PowerShares BuyBack Achievers Portfolio exchange-traded fund tracks companies that have bought back at least 5% of their shares over the past 12 months. The ETF is down about 0.7% in 2016 and off 8.4% over the past year. The fund’s biggest holdings include McDonald’s, Boeing, Qualcomm, Lowes and Mondelez. A big name missing from the top holdings is Apple, which has buyback plans totaling $175 billion for a stock that is down 13.2% year to date and 27.5% over the past year. Yet the buyback and dividend trend continues as companies remain reluctant to hire and invest in equipment and as the deal climate cools after a blistering 2015. Mergers and acquisitions activity plunged 25% in the first quarter, with much of the steam taken out by the collapse of multiple big-ticket deals, the most recent being the $6 billion Staples-Office Depot marriage.

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“..once the hedges roll off you can’t support that debt.”

US Energy Bankruptcy Wave Surges Despite Recovering Oil Prices (R.)

The wave of U.S. oil and gas bankruptcies surged past 60 this week, an ominous sign that the recovery of crude prices to near $50 a barrel is too little, too late for small companies that are running out of money. On Friday, Exco Resources, a Dallas-based company with a star-studded board, said it will evaluate alternatives, including a restructuring in or out of court. Its shares fell 35% to 62 cents each. Exco’s notice capped off one of the heaviest weeks of bankruptcy filings since crude prices nosedived from more than $100 a barrel in mid-2014. Prices have bounced back to $46 a barrel from February lows in the mid-$20s, but the futures market shows investors do not expect U.S. benchmark crude to rise above $50 for more than a year.

That will not help smaller producers built for far higher prices. These companies have largely exhausted funding alternatives after issuing more equity and debt, tapping second-lien loans and shedding assets over the last two years to stay afloat as banks trimmed credit lines. Some companies are in more acute distress, faced with the expiration of derivative contracts that had allowed them to sell oil above market prices. “Everybody was able to hold on for a while,” said Gary Evans, former CEO of Magnum Hunter Resources, which emerged from bankruptcy protection this week. “But once the hedges roll off you can’t support that debt.”

Bankruptcy filers this week included Linn Energy and Penn Virginia. Struggling SandRidge, a former high flyer once led by legendary wildcatter Tom Ward, said it would not be able to file quarterly results on time. The number of U.S. energy bankruptcies is closing in on the staggering 68 filings seen during the depths of the telecommunications sector bust of 2002 and 2003, according to Reuters data, the law firm Haynes & Boone and bankruptcydata.com.

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I would normally shudder at the very thought of anyone quoting Larry Summers or god forbid Jeff Rubin, but this is a topic that warrants attention.

The Other Fire: Fort McMurray’s Slow Burn (Tyee)

At the end of the day the $10-billion wildfire that consumed 2400 homes and buildings in Fort McMurray may be the least of the region’s problems. Although the chaotic evacuation of 80,000 people through walls of flame will likely haunt its brave participants for years, a slow global economic burn has already taken a nasty toll on the region’s workers. That fire began last year when global oil prices crashed by 40% and evaporated billions of investment capital in the tarsands. As the project’s most hight cost producers started to bleed cash, corporations laid off 40,000 engineers, labourers, cleaners, welders, mechanics and trades people with little fanfare and even less thanks. Many of these human “stranded assets” endured home foreclosures and lineups at the food bank.

Worker flights to Red Deer and Kelowna got cancelled and traffic at the city’s new airport declined by 16%. Unemployment in Canada’s so-called economic engine soared to nearly nine%. Despite the high cost of the oil price crash, most residents of Fort McMurray, along with Canada’s politicians, think that oil prices will rebound and things will turn around sooner or later. They’ve seen it all before, they say. But a number of economic trends and analyses suggest that bitumen’s glory days may be over. What resembles a string of bad luck may actually be the unfortunate consequence of rapidly developing a high risk and volatile resource with no real safety net. The first undeniable factor is weakening demand for oil, the engine of global economic growth. China’s economy, the world’s largest oil importer, is faltering as its industrial revolution peaks and fades.

Europe, Japan and the United States are also using less oil, and their economies are stagnating too. The global economy has become so stuck in neutral that famous financial power brokers such as Larry Summers now write depressing articles entitled “The Age of Secular Stagnation,” in Foreign Affairs no less. In such a world, little if any bitumen will be needed in the international market place. In fact economists now trace about 50% of the oil price collapse to evaporating demand. But there are many other potent signs and they have already covered the economic landscape with smoke. Murray Edwards, the billionaire tycoon behind Canadian Natural Resources, one of the largest bitumen extractors, has decamped from Alberta to London, England. Edwards and company slashed $2.4-billion from CNRL’s budget in 2015. Since the oil price crash, by some accounts, Murray’s company has lost 50% of its market value.

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“..the large bonuses paid to banks’ CEOs as they led their firms to ruin and the economy to the brink of collapse are hard to reconcile with the belief that individuals’ pay has anything to do with their social contributions.”

The New Era Of Monopoly Is Here (Stiglitz)

For 200 years, there have been two schools of thought about what determines the distribution of income – and how the economy functions. One, emanating from Adam Smith and 19th-century liberal economists, focuses on competitive markets. The other, cognisant of how Smith’s brand of liberalism leads to rapid concentration of wealth and income, takes as its starting point unfettered markets’ tendency toward monopoly. It is important to understand both, because our views about government policies and existing inequalities are shaped by which of the two schools of thought one believes provides a better description of reality. For the 19th-century liberals and their latter-day acolytes, because markets are competitive, individuals’ returns are related to their social contributions – their “marginal product”, in the language of economists.

Capitalists are rewarded for saving rather than consuming – for their abstinence, in the words of Nassau Senior, one of my predecessors in the Drummond Professorship of Political Economy at Oxford. Differences in income were then related to their ownership of “assets” – human and financial capital. Scholars of inequality thus focused on the determinants of the distribution of assets, including how they are passed on across generations. The second school of thought takes as its starting point “power”, including the ability to exercise monopoly control or, in labour markets, to assert authority over workers. Scholars in this area have focused on what gives rise to power, how it is maintained and strengthened, and other features that may prevent markets from being competitive. Work on exploitation arising from asymmetries of information is an important example.

In the west in the post-second world war era, the liberal school of thought has dominated. Yet, as inequality has widened and concerns about it have grown, the competitive school, viewing individual returns in terms of marginal product, has become increasingly unable to explain how the economy works. So, today, the second school of thought is ascendant. After all, the large bonuses paid to banks’ CEOs as they led their firms to ruin and the economy to the brink of collapse are hard to reconcile with the belief that individuals’ pay has anything to do with their social contributions. Of course, historically, the oppression of large groups – slaves, women, and minorities of various types – are obvious instances where inequalities are the result of power relationships, not marginal returns.

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“The ECB’s requirement for an “investment-grade” rating turns out to be an elastic condition; something you tell the Germans to put them off until the next meeting.”

Vicious Feedback Loops in New York Art and European Equities (Dizard)

The remarkable swing in sentiment, from depression to relief, and, in some cases, euphoria, around the New York art auctions this past week was one of the most astonishing examples of herd mentality I have seen. Back in 1990, we would buy a paper from the newsboy that would describe a decline in the Japanese stock market that had taken place the previous year. Weeks later, bids for Renoirs would dry up, and there would be talk about a correction in the art market. These days, we are all in short-cycle businesses. But I am trying to take the long-term view here, one that might hold up until the US elections in November. So in that spirit of philosophical detachment, I would say it is time to buy euro-denominated high-yield bonds before the other bidders come in next month in response to the ECB’s corporate bond-buying programme.

I understand that most of the quantitative analysis done on art and securities markets tells us that equity prices “cause” art prices to rise or fall, but it seems to me that the present volatility and vicious feedback loops in both markets are being caused by a more general instability. The weak equity markets at the beginning of this year, and the decline in art prices that had set in by early 2015, apparently led collectors to hold off on consigning contemporary works of art to the spring auctions in New York. Then when the Christie’s evening contemporary sale on Tuesday night worked out better than many expected, with 87% of the lots sold, there was suddenly a shortage of works on public offer. This led to more frantic bidding for contemporary art in that market’s equivalent of junk or high yield, the day sales. All within a couple of days.

The same risk-averse sentiment earlier this year led euro-area junk-rated companies to hold off on selling new bond issues. According to Richard Briggs, credit strategist at CreditSights, a fixed income research provider, euro high-yield debt issuance declined to just €12.7bn in the year to date up to May 9, compared with €47.9bn in the same period in 2015. So euro-based investors are even more starved for yield than New York collectors were for contemporary art. Not everyone agrees with me about the relative value of European junk bonds. As Matt King at Citi Research says: “A lot of investors prefer, or have preferred, US high yield. Optically, the yields are higher. Most of that, though, is about duration and credit quality, and you should adjust for those. The US has more CCC credits [the bottom of the non-defaulting junk pile], and when you take that into account, all the US HY advantage disappears.”

[..] The ECB’s bond-buying programme could have an outsized effect. It is targeted specifically at non-financial corporate bonds. The ECB has indicated it will buy €3bn-€5bn of corporate bonds each month, which is about the same rate of non-financial bond purchases as euro-area financial institutions have maintained since 2012. The ECB’s requirement for an “investment-grade” rating turns out to be an elastic condition; something you tell the Germans to put them off until the next meeting. If just one rating agency, including the Canadian DBRS, will give a corporate bond an investment-grade stamp, the ECB will be open to buying it. Mr King calculates that one little tweak will make about 4% of the European junk-bond market eligible for purchase. In a relatively illiquid €310bn market, every little bit helps.

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Intriguing by Matthew Klein. To be continued.

What If Greece Got Massive Debt Relief But No One Admitted It? – Part 1 (FT)

In 2012, the “official sector” lenders realised they needed to do something different. Over the course of the year they made new loans at low interest rates, lowered interest rates on existing loans, gave the Greek government much more time to repay existing loans, remitted profits from the ECB’s holdings of Greek government bonds back to the Greek government, and forced private lenders to accept getting repaid less than originally owed, among other things. The net effect was to sharply reduce the present value of the Greek government’s debt burden. According IMF data, the Greek government spent about €15 billion, or 7.3% of GDP, on debt interest payments in 2011. For perspective, the Italian government was spending 4.4% and the Portuguese government was spending 3.8%.

By 2013, the Greek economy had shrunk by 13%, in nominal euro terms, yet the sovereign debt interest burden was now 4.0% of GDP, against 4.5% for Italy and 4.2% for Portugal. Put another way, the debt modifications in 2012 cut the amount spent by the Greek government on interest payments by more than half. Subsequent debt modifications and the general decline in euro area interest rates have cut the amount the Greek government spends on interest payments by another 12.6%. Interest expense was 3.6% of Greek GDP in 2015, compared to 4.0% in Italy and 4.1% in Portugal. So why didn’t the 2012 modifications end the crisis? My colleague Martin Sandbu puts it well:

“The problem is the chill caused by the uncertainty the debt overhang causes: will the debt service cost at some point increase (perhaps to crippling levels), and will there be another refinancing crisis whenever a large portion of debt is set to mature? It is this uncertainty that must be erased for investment to pick up.”

In other words, investors don’t care about the decline in the interest burden nearly as much as they worry, reasonably, about the headline debt figures. This makes it impossible for the Greek government to fund itself in the markets at reasonable rates, leaving it dependent on the whims of “official sector” creditors to make its small interest payments and roll over its large debts. This is why it matters whether Kazarian is right about the accounting treatment of Greek sovereign obligations. There are plenty of weak economies in the euro area with miserable productivity growth, terrible demographics, and lots of debt. Greece isn’t that different except insofar as it’s excluded from ECB bond-buying and insofar as the markets and ratings companies treat it as a pariah.

So if the Greek government’s actual debt number were far lower than what’s commonly reported, investors would have little reason to charge it more than they demand from Portugal. And that would have big implications for an economy wracked for years by uncertainty about debt default, sky-high capital costs, and outside demands for “structural reform” and budget surpluses. In part 2, we’ll look at why exactly Kazarian thinks the Greek government’s net debt is only 39% of GDP, rather than 177%, as well as some potential objections. In part 3, we’ll imagine what sorts of budget surpluses would have been required to make the Greek government compliant with Maastricht criteria for debt levels by 2020 under different assumptions of the impact of the 2012 modifications, in comparison to what “official sector” creditors actually demanded.

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The US is falling apart in many places.

“I’ll Never Retire”: Americans Break Record for Working Past 65 (BBG)

Almost 20% of Americans 65 and older are now working, according to the latest data from the U.S. Bureau of Labor Statistics. That’s the most older people with a job since the early 1960s, before the U.S. enacted Medicare. Because of the huge baby boom generation that is just now hitting retirement age, the U.S. has the largest number of older workers ever. When asked to describe their plans for retirement, 27% of Americans said they will “keep working as long as possible,” a 2015 Federal Reserve study found. Another 12% said they don’t plan to retire at all. Why are more people putting off retirement? Three in five retirees surveyed by the Transamerica Center for Retirement Studies said making money or earning benefits was at least one reason they had retired later than they planned to.

Almost half said financial problems were their main reason for working past 65. The financial crisis, and the tech bust before it, devastated many baby boomers’ retirement savings. That’s if they had any to begin with. Today, 60% of U.S. households have no money in a 401(k) or similar retirement account, and the benefits of 401(k)s are skewed toward the wealthiest Americans, a recent report by the Government Accountability Office found. The waning of traditional, defined-benefit pensions could also be delaying retirement, even for wealthier Americans. Instead of getting a monthly check, many retirees end up with a pot of 401(k) assets they’re not sure how they should be spending. The ups and downs of the market can heighten their anxiety and keep them going into the office.

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The sadness is hard to describe.

Retiree To Fly 80 South African Rhinos To Australia (G.)

A retired South African sales executive who emigrated to Australia 30 years ago is hatching a daring plan to airlift 80 rhinos to his adopted country in an attempt to save the species from poachers. Flying each animal on the 11,000-kilometre journey will cost about $A60,500, but Ray Dearlove believes the expense and risk is essential as poaching deaths have soared in recent years. The rhinos will be relocated to a safari park in Australia, which is being kept secret for security reasons, where they will become a “seed bank” to breed future generations. “Our grand plan is to move 80 over a four-year period. We think that will provide the nucleus of a good breeding herd,” Dearlove said while visiting South Africa to organise for the first batch to be flown out.

The Australian Rhino Project, which the 68-year-old founded in 2013, hopes to take six rhinos to their new home before the end of the year. Funding – from private and corporate sources – is nearly in place, and the first rhinos have been selected from animals kept on private reserves in South Africa. “We have got to get this first one right because it’s a big task, it’s expensive, it’s complex,” Dearlove said. When they are settled successfully in Australia, “then we hopefully will go up in gear,” he added. [..] Poachers slaughtered 1,338 rhinos across Africa last year – the highest level since the poaching crisis exploded in 2008, according to the International Union for Conservation of Nature (IUCN). The IUCN, which rates white rhinos as “near threatened” as a species, says that booming demand for horn and the involvement of international criminal syndicates has fuelled the explosion in poaching since 2007.

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A German point of view.

Merkel’s Deal with Turkey in Danger of Collapse (Spiegel)

On Thursday, Turkish President Recep Tayyip Erdogan was standing on a stage in Ankara raging against the European Union. “Since when are you controlling Turkey?” he demanded. “Who gave you the order?” He then accused Brussels of dividing his country. “Do you think we don’t know that?” It sounded as though he was laying the groundwork for a break with Europe. Erdogan’s fit of rage is only the most recent escalation in the conflict over German Chancellor Angela Merkel’s refugee deal with Turkey. Thus far, officials in Berlin have been dismissing the Turkish president’s tirades as mere theater. “Erdogan is following the Seehofer playbook,” says one Chancellery official, a reference to the outspoken governor of Bavaria who has been extremely critical of Merkel’s refugee policies.

But things aren’t looking good for the deal, which the chancellor has declared as the only proper way to solve the refugee crisis. Indeed, Merkel’s greatest foreign policy project is on the verge of collapsing. The chancellor still hopes that Erdogan will stick to the refugee deal. A key element of that deal is visa-free travel to the EU for Turkish citizens, and Merkel believes that Erdogan’s popularity would take a hit if that didn’t come to pass. That’s why she believes that Erdogan will come around in the end. But she could be mistaken. After all, no one aside from the German chancellor appears to have much interest in the agreement anymore. Erdogan certainly doesn’t: He does not want to make any concessions on his country’s expansive anti-terror laws, the reform of which is one of a long list of conditions Turkey must meet before the EU will grant visa freedoms.

The Europeans at large, wary of selling out their values to the autocrat in Ankara, are also deeply skeptical. And in Germany, Merkel’s junior coalition partners, the center-left Social Democrats (SPD), have seized on the deal as a way to finally score some much needed political points against the powerful chancellor. Even within Merkel’s own conservatives, many are seeing the troubles the deal is facing as an opportunity to break with the chancellor’s disliked refugee policies.

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Brussels and Berlin would make a deal with Hitler if it suited them.

EU to Work with African Despot to Keep Refugees Out (Spiegel)

The ambassadors of the 28 European Union member states had agreed to secrecy. “Under no circumstances” should the public learn what was said at the talks that took place on March 23rd, the European Commission warned during the meeting of the Permanent Representatives Committee. A staff member of EU High Representative for Foreign Affairs Federica Mogherini even warned that Europe’s reputation could be at stake. Under the heading “TOP 37: Country fiches,” the leading diplomats that day discussed a plan that the EU member states had agreed to: They would work together with dictatorships around the Horn of Africa in order to stop the refugee flows to Europe – under Germany’s leadership.

When it comes to taking action to counter the root causes of flight in the region, Angela Merkel has said, “I strongly believe that we must improve peoples’ living conditions.” The EU’s new action plan for the Horn of Africa provides the first concrete outlines: For three years, €40 million is to be paid out to eight African countries from the Emergency Trust Fund, including Sudan. Minutes from the March 23 meetings and additional classified documents obtained by SPIEGEL and German public TV station ARD show that the focus of the project is border protection. To that end, equipment is to be provided to the countries in question. The International Criminal Court in The Hague has issued an arrest warrant against Sudanese President Omar al-Bashir on charges relating to his alleged role in genocide and crimes against humanity in the Darfur conflict.

Amnesty International also claims that the Sudanese secret service has tortured members of the opposition. And the United States accuses the country of providing financial support to terrorists. Nevertheless, documents relating to the project indicate that Europe want to send cameras, scanners and servers for registering refugees to the Sudanese regime in addition to training their border police and assisting with the construction of two camps with detention rooms for migrants. The German Ministry for Economic Cooperation and Development has confirmed that action plan is binding, although no concrete decisions have yet been made regarding its implementation. The German development agency GIZ is expected to coordinate the project.

The organization, which is a government enterprise, has experience working with authoritarian countries. In Saudi Arabia, for example, German federal police are providing their Saudi colleagues with training in German high-tech border installations. The money for the training comes not directly from the federal budget but rather from GIZ. When it comes to questions of finance, the organization has become a vehicle the government can use to be less transparent, a government official confirms.

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Mar 102016
 
 March 10, 2016  Posted by at 9:56 am Finance Tagged with: , , , , , , , , ,  5 Responses »


William Henry Jackson Tunnel 3, Tamasopo Canyon, San Luis Potosi, Mexico 1890

IMF Says World At Risk Of ‘Economic Derailment’ (BBC)
Whole Of Europe Risks Spinning Into Crisis If Leaders Mishandle Brexit (AEP)
This Is Jeff Gundlach’s Favorite -& Scariest- Chart (ZH)
“However It Takes” #Draghi (BM)
Senior European Bankers Voice Concerns Over ECB Cut (FT)
Markets Betting On Near-Zero Interest Rates For Another Decade (Reuters)
What’s In A Growth Target? For China, Hope And Simple Math (WSJ)
China To Allow Commercial Banks To Swap Bad Debt For Equity Stakes (Reuters)
Albany Can Solve the World’s Sovereign Debt Crisis (BBG)
Germany Needs 470,000 Immigrants Per Year For Next 25 Years (GM)
Record Number Of African Rhinos Killed In 2015 (Guardian)
Syrians Under Siege: ‘We Have No Children Any More, Only Small Adults’ (G.)
Did Michel Foucault Predict Europe’s Refugee Crisis? (Baele)
Refugees At Border Should Move To Camps, Says Greek Minister (AP)
Conditions At Idomeni Refugee Camp Worsen By The Day (Kath.)
Five Iranians, Afghans Drown Trying To Reach Greece (Reuters)

And the IMF worked hard to get it there.

IMF Says World At Risk Of ‘Economic Derailment’ (BBC)

The IMF has warned that the global economy faces a growing “risk of economic derailment.” Deputy director David Lipton called for urgent steps to boost global demand. “We are clearly at a delicate juncture,” he said in a speech to the National Association for Business Economics in Washington on Tuesday. “The IMF’s latest reading of the global economy shows once again a weakening baseline,” he warned. The comments come after weaker-than-expected trade figures from China showing that exports in February plunged by a quarter from a year ago. With the world’s second largest economy often referred to as as “the engine of global growth”, weaker global demand for its goods is read as an indicator of the general global economic climate. The IMF has already said it is likely to downgrade its current forecast of 3.4% for global growth when it releases its economic predictions in April.

Last month, the international lender had warned that the world economy was “highly vulnerable” and called for new efforts to spur growth. In a report ahead of last month’s Shanghai G20 meeting, the IMF said the group should plan a co-ordinated stimulus programme as world growth had slowed and could be derailed by market turbulence, the oil price crash and geopolitical conflicts. In his Washington speech, Mr Lipton said “the burden to lift growth falls more squarely on advanced economies” which have fiscal room to move. “The downside risks are clearly much more pronounced than before, and the case for more forceful and concerted policy action, has become more compelling.” “Moreover, risks have increased further, with volatile financial markets and low commodity prices creating fresh concerns about the health of the global economy,” he added. The downbeat picture is one that has continuing ramifications for businesses and industries that bet on China’s growth story.

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“..the whole of Europe is sitting on a bed of nitroglycerin..”

Whole Of Europe Risks Spinning Into Crisis If Leaders Mishandle Brexit (AEP)

[..] Personally, I find talk about “retaliation” against Britain to be a little odd, though I do not rule it out. Any such madness would risk a political crisis in Denmark and Sweden, and ultimately spread to Germany. British withdrawal would be a thunderous shock to the EU project. The immediate imperative for Europe’s leaders at that point would be to patch things up and ensure a velvet divorce as quickly as possible to stop the crisis spinning out of control. France’s Marine Le Pen likens Brexit to the collapse of the Berlin Wall. “It will be the beginning of the end. If Britain knocks down part of the wall, it s finished, it’s over, she said. Whether she is right or wrong depends on the statecraft of Angela Merkel, Francois Hollande, Mateo Renzi and Poland’s Beata Szydlo. A report this week by Morgan Stanley spells out the grim price Europeans will pay if they mishandle this event.

Foreign investors would start to withdraw their $8.3 trillion of investments in the eurozone. There might be a bond run with Spain in the firing line. The bank’s base case for Brexit is that the MSCI Europe index of equities will fall 15pc-20pc, and 0.7 percentage points will be knocked off growth by late 2017. Its “high stress” scenario is a stock market crash of up to 30pc, a tightening in financial conditions by 200 basis points, severe contagion, and a 2pc blow to GDP that pushes the eurozone into recession, with “growing concerns around the sustainability of the entire European project”. Whether the eurozone could withstand a fresh shock of this force is an open question. The region already has one foot in deflation, with toxic effects on debt dynamics. Public debt ratios are massively higher than they were at the top of the last credit cycle in 2008, and pushing safe limits of 133pc of GDP in Italy and 129pc in Portugal.

The hysteresis effects of mass unemployment have done lasting damage to economic dynamism, lowering the eurozone’s speed limit for a decade to come. There is no fiscal union, and no genuine banking union. Little has been done to make monetary union viable. The ECB is running low on ammunition. Populist movements are simmering everywhere. I do not wish to gloss over the risks to the UK. These are real and have been widely aired, emphatically by the Bank of England recently. My point is that the whole of Europe is sitting on a bed of nitroglycerin. It is a fair bet that EU leaders would refrain from reprisals that would make their crisis infinitely worse, but it is only a bet. No level of folly can ever be excluded in the march of human affairs.

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“These lines will converge..”

This Is Jeff Gundlach’s Favorite -& Scariest- Chart (ZH)

According to DoubleLine’s Jeff Gundlach, this is his favorite chart – backing his persepctive that equity markets have “2% upside and 20% downside) from here. In his words: “These lines will converge…” It should be pretty clear what drove the divergence, and unless (and maybe if) The Fed unleashes another round of money-printing (or worse), one can’t help but agree with Gundlach’s ominous call.


Chart: Bloomberg

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“We don’t want to play any more.” Sounds nice, but a ton of bankers, investors etc. MUST play.

“However It Takes” #Draghi (BM)

Never has an ECB meeting been so eagerly anticipated, and yet so confused. In October’s meeting, we expected nothing. Instead we got that “things have changed” about “going into further negative territory”. Sell the Euro! Buy Euribors! In December’s meeting, we expected everything. But we thought we didn’t. So we got a market that was overly short of Euros/long of Euribors and forced to exit. Buy the Euro! Sell Euribors! In January’s meeting, we didn’t want to listen. But we had to, because this time Draghi didn’t leave it to the Q&A to deliver his own thoughts. He managed to shoehorn some kind of consensus towards further easing into the actual statement: ‘we decided to keep the key ECB interest rates unchanged and we expect them to remain at present or lower levels for an extended period of time’. Sell the Euro a bit! Buy Euribors a bit more!

Now the time has come. It’s the March meeting and they can present new staff forecasts as they indicate just how much lower, and for how much longer, the stimulus can continue. Are we buying or selling everything? There was an important step between 3 and 4, however, and that was the impact of the Bank of Japan moving into negative rates, as well as the ongoing cumulative bout of fear subsuming the markets. In February, we all decided that lower interest rates might not actually be very good for the banking system. Which is a bit of a shame, given that the banks are the transmission mechanism by which those super-stimulative rates are supposed to super-stimulate the economy. This now leaves us in this position:
• October: We forgot that Draghi always over-delivers!
• December: No, we didn’t, and EUR/USD has its biggest upmove of the year
• January: No, we were wrong again, he does want to over-deliver, here he is putting in his fresh order for a kitchen sink
• March: We don’t want to play any more.

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Don’t think the ECB is done blowing bubbles.

Senior European Bankers Voice Concerns Over ECB Cut (FT)

Some of Europe’s most senior bankers have warned the European Central Bank of the dangers of negative interest rates ahead of a widely anticipated cut at the bank’s policy meeting on Thursday. The ECB is expected to cut its deposit rate by 10 basis points to minus 0.4% as it takes further action in its struggles to lift persistently low inflation and boost economic growth back to normal levels. Bank leaders are alarmed by the crippling effect on their profits of negative rates which they cannot pass on to ordinary customers, adding to concerns about the fragility of financial stability in some parts of the eurozone. But any attempt by the ECB to shield lenders from the effects of negative rates could weaken the policy and open the central bank to claims that it is engaged in a beggar-thy-neighbour devaluation.

Andreas Treichl, chief executive of Austria’s Erste Bank, told the Financial Times that another cut could encourage financial bubbles, hurt economic growth and create “social disparity” by penalising savers. José García Cantera, Santander’s chief financial officer, added that the banks that would take the biggest hit to their profits if rates were cut again were those least able to bear it. Last week, Sergio Ermotti, UBS chief executive, warned that excessively low rates were prompting banks to extend too many risky loans because they “don’t know what to do” with deposits. The industry hopes to lay out concrete evidence of the detrimental impact negative rates are already having in mid-April, when the European Banking Federation will present the results of a review into how its members are being affected.

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Nobody oversees 10 years in this climate.

Markets Betting On Near-Zero Interest Rates For Another Decade (Reuters)

World markets may have recovered their poise from a torrid start to the year, but their outlook for global growth and inflation is now so bleak they are betting on developed world interest rates remaining near zero for up to another decade. Even though the U.S. Federal Reserve has already started what it expects will be a series of interest rate rises, markets appear to have bought into a “secular stagnation” thesis floated by former U.S. Treasury Secretary Larry Summers. The idea posits that the world is entering a peculiarly prolonged period in which structurally low inflation and wage growth – hampered by aging populations and slowing productivity growth – means the inflation-adjusted interest rate needed to stimulate economic demand may be far below zero.

As there’s likely a lower limit to nominal interest rates just below zero – because it’s cheaper to hold physical cash and bank profitability starts to ebb – then even these zero rates do not gain traction on demand. For all the debate about the accuracy of that view, it’s already playing out in world markets, with long-term projections from the interest rate swaps market showing developed world interest rates stuck near zero for several years. Take overnight interest rate swaps. They imply ECB policy rates won’t get back above 0.5% for around 13 years and aren’t even expected to be much above 1% for at least 60 years. Japan’s main interest rate won’t reach 0.5% for at least 30 years, they suggest, and even U.S. and UK rates are set to remain low for years. It will be six years before U.S. rates return to 1%, and a decade until UK rates reach that level.

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Poetry in motion: “In China, you can see it visibly”, she said.”

What’s In A Growth Target? For China, Hope And Simple Math (WSJ)

What’s in an economic growth target? When it comes to China, not all that much. That the government has a passion for setting targets is well-established; the nation’s top economic planning agency lists 59 in the appendix of its annual report to China’s parliament, of which it says it only undershot in four categories last year. Given that, one might assume that the policymakers of Beijing arrive at their numbers through reams of Excel sheets and several lecture-hall chalkboards worth of mathematical formula. Not so, according to Wu Xiaoling, deputy director of China’s congressional finance and economy committee. Ms. Wu is a former deputy governor of the central bank, the former head of its foreign-exchange regulator, and a respected thinker in China’s financial policy circles.

In explaining China’s current monetary policy, which is trying to strike a balance between providing enough money for growth without sparking another round of debt bingeing, Ms. Wu walked reporters through the steps the government takes to build its target for M2, the broadest measurement of money, capturing all the cash, savings and deposits flowing through an economy. M2 is an indicator that economists watch not just for its sheer size in China, but also because it s driving an accumulation of debt at twice the speed that the world’s second-largest economy is growing. M2’s growth is the result of deliberate government policy. Last year, it set a goal of 12%; the actual expansion came in at 13.3%. This year, Beijing is setting an expansion in the money supply by 13%. How did the officials arrive at these numbers? It begins, Ms. Wu says, with China s’all-important indicator: its economic growth target.

Last year, the gross domestic product expansion target was 7%. This year, as growth slows, the government has lowered the target to a range of 6.5% to 7%. That target is the minimum that would enable Beijing to accomplish a lofty government goal to double household income per capita between 2010 and 2020. The central bank then takes that GDP target and tacks on its expectations of consumer price inflation -3% both this and last year- and “then we add 2% or 3% points to take into account ‘uncertainty'”, Ms. Wu said earlier this week. The final sum becomes the government’s goal of monetary expansion for the year: 12% last year, and 13% this year, since the central bank this year chose to use the upper bound of the GDP growth range for its planning purposes. The nub of China’s M2 growth strategy isn t unique. Economists have long theorized that monetary supply can have a strong correlation with economic growth; managing M2 is therefore potentially a key way that central banks influence economic growth.

The problem, as Ms. Wu also acknowledged, is that an unbridled reliance on monetary expansion often drives debt and inflation. “In China, you can see it visibly”, she said. “Property prices have risen a lot since 2009.” The other major problem for China is that such an expansion in money supply is coinciding with a period of currency weakness fueled by worries over its economic slowdown and the ability of China s leaders to manage it that has led to an unprecedented rundown of its foreign-exchange reserves. Economists look at the correlation between broad money and foreign reserves for clues to how likely an economy is exposed to the risk of capital flight. The higher the M2-to-reserves ratio or conversely, the lower the reserves-to-M2 ratio the higher the likelihood of capital flight. In China s case, the reserves-to-M2 measurement is currently about 15%, which is about as low as Indonesia s when the Asian financial crisis struck in 1997. Indonesia saw capital flight, a plummeting currency and civil unrest.

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Until truly nobody knows what anything is worth anymore. Just nationalize everything that smells bad.

China To Allow Commercial Banks To Swap Bad Debt For Equity Stakes (Reuters)

China’s central bank is preparing regulations that would allow commercial banks to swap non-performing loans of companies for stakes in those firms, two sources with direct knowledge of the new policy told Reuters. The sources, who spoke on condition of anonymity, said the release of a new document explaining the regulatory change was imminent. On paper, the move would represent a way for indebted corporates to reduce their leverage, reducing the cost of servicing debt and making them more worthy of fresh credit. It would also reduce NPL ratios at commercial banks, reducing the cash they would need to set aside to cover losses incurred by bad loans. These funds could then be freed up for fresh lending for investment in the new wave of infrastructure products and factory upgrades the government hopes will rejuvenate the Chinese economy.

The sources said the new regulations would be promulgated with special approval from the State Council, China’s cabinet-equivalent body, thus skirting the need to revise the current commercial bank law, which prohibits banks from investing in non-financial institutions. In the past Chinese commercial banks usually dealt with NPLs by selling them off at a discount to state-designated asset management companies. The AMCs would turn around and attempt to recover the debt or resell it at a profit to distressed debt investors. The sources did not have further detail about how the banks would value the new stakes, which would represent assets on their balance sheets, or what ratio or amount of NPLs they would be able to convert using this method. Official data from the China Banking Regulatory Commission shows Chinese banks held NPLs and “special mention” troubled loans in excess of 4 trillion yuan ($614.04 billion) at the end of 2015.

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Paul Singer won’t let them.

Albany Can Solve the World’s Sovereign Debt Crisis (BBG)

In recent years, many countries – including Greece, Argentina and Ukraine – have found themselves indebted beyond their ability to pay. Argentina may now be on the brink of resolving a decade-long dispute with some of its creditors, but its predicament highlights a fundamental problem of sovereign debt. Unlike individuals and corporations, countries cannot use bankruptcy laws to restructure unsustainable debt. They are forced to try to separately renegotiate each of their debt contracts, which often fails because it requires unanimity. Although attempts have been made to try to bypass this requirement by including so-called collective action clauses in sovereign debt contracts, many contracts still lack them. Furthermore, most collective action clauses only bind a party to the particular contract that includes it.

The parties to any given sovereign debt contract, therefore, can act as holdouts in any debt restructuring plan that requires the parties to all of the country’s other debt contracts to agree to it. Recent judicial decisions interpreting New York law, which governed the relevant Argentine debt contracts, have made sovereign debt restructuring even harder; they allow “vulture funds” to extract ransom money by buying debt claims to block the ability of majority creditors to reach a settlement. These decisions broadly threaten New York’s dominance as the law that governs sovereign debt contracts. Yet New York has the unique ability not only to preserve its dominance but also to help solve the sovereign debt crisis. Because around half the world’s sovereign debt contracts are governed by New York law, the state could pass a measure to amend the voting requirements under those contracts.

For example, contracts that now require unanimity for revisions could be amended to allow changes that are approved by at least a supermajority of similarly situated creditors (even if those creditors’ claims arise under different debt contracts); such a law would overcome the major hurdle to sovereign debt restructuring. That, in turn, would give struggling nations the real prospect of equitably restructuring their debt to sustainable levels, thereby lowering sovereign borrowing costs and increasing creditor confidence by reducing uncertainty. This is a financially powerful opportunity for New York. Never before has a U.S. state had the power to influence the international community to such an extent. Being that New York City is the world’s financial center and home of the United Nations headquarters, it is fitting that circumstances have endowed the state with this power. Enactment of such a measure would also reinforce New York’s legitimacy as the governing law for future sovereign debt contracts.

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Try tell that to the right wing.

Germany Needs 470,000 Immigrants Per Year For Next 25 Years (GM)

German Chancellor Angela Merkel continues to receive both praise and criticism for her decision last year to open Germany’s doors to hundreds of thousands of the migrants arriving on Europe’s shores. ‘It goes without saying that we help and accommodate people who seek safe haven with us,’ she declared. However, while recent immigration has added enough people to offset any natural population shrinkage as a result of increasing death rates compared to birth rates, the next few decades are still likely to see the country’s increasingly elderly population go into a steady decline. Destatis, Germany’s national statistics office, estimates that the number of Germans between the ages of 20 and 66 is expected to shrink by a quarter – around 13 million people – between 2013 and 2040, while the number of people over 67 is expected to rise from 15.1 million to 21.5 million over the same time.

‘The shrinking of the population has consequences,’ explains Stephan Sievert, researcher at the Berlin Institute for Population and Development. ‘It has repercussions on the economy, on social security, and on infrastructure. A more gradual, incremental shrinking would be preferable to a rapid decline. The more time you have to adjust to the new situation, the more time you have to adapt the functioning of your society.’ Destatis confirms that immigration cannot be expected to make up this shortfall. It concludes that the country would require an estimated 470,000 immigrants ready to join the workforce every year between now and 2040 to prevent a significant demographic shift, a rate which the current unprecedented period of high immigration cannot be expected to sustain.

‘It’s not necessarily about the number of people, it’s about what they bring to the table,’ continues Sievert. ‘What kind of qualifications do they have? Can they find employment? Can they relieve some of the burden on the social security systems that increasingly more people are getting money out of than people are paying in to?’ He also raises the issue of where immigrants might settle spatially; whether they could help revive rural parts of the country where populations are dwindling. ‘It’s a different question to whether or not this would be desirable,’ he adds. ‘To have immigration on the scale that could make up for these losses, we’d be talking about more than half a million every year, and that doesn’t make the task of integration any easier.’

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The animal man truly is.

Record Number Of African Rhinos Killed In 2015 (Guardian)

A record number of rhinos were killed by poachers across Africa last year, driven by demand in the far east for their horn. The number slaughtered in their heartland in South Africa, which has four-fifths of the continent’s rhino, dipped for the first time since the crisis exploded nearly a decade ago. But increases in the number of rhino poached in Nambia and Zimbabwe offset the small signs of hope in South Africa, leading to a record 1,338 to be killed continent-wide. A total of 5,940 have been poached since 2008. Conservationists said it was possible that a clampdown by authorities in South Africa, where ministers have stepped up efforts against an illegal trade that they say threatens the tourism industry, have led to organised criminals moving their operations.

“They [poachers] operate like an amoeba so if you push in one place they expand elsewhere. What you may be seeing is a response at the regional level, where increased pressure in South Africa makes it more difficult for operatives to operate, having a response elsewhere,” said Mike Knight, chair of the respected International Union for the Conservation of Nature’s African rhino specialist group.

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The legacy of the ‘developed’ world.

Syrians Under Siege: ‘We Have No Children Any More, Only Small Adults’ (G.)

Sick children dying as lifesaving medicine waits at checkpoints, youngsters forced to survive on animal feed and leaves, and families burning their mattresses just to find something to keep them warm. Schools moving underground for shelter from barrel bombs, the crude, explosive-filled and indiscriminate crates that fall from the sky and are so inaccurate that some observers have said their use is a de facto war crime. The wounded left to die for lack of medical supplies, anaesthetics, painkillers and chronic medicine; children dying of malnutrition and even rabies due to the absence of vaccines, while landmines and snipers await anyone trying to escape. The scenes are not from second world war death camps or Soviet gulags.

They are the reality of life for more than a million Syrians living in besieged areas across the war-torn nation, according to a report by Save the Children. Tanya Steele, the charity’s chief executive, said: “Children are dying from lack of food and medicines in parts of Syria just a few kilometres from warehouses that are piled high with aid. They are paying the price for the world’s inaction.” At least a quarter of a million children are living in besieged areas across Syria, Save the Children estimates, in conditions that the charity describes as living in an open-air prison. The report is based on a series of extensive interviews and discussions with parents, children, doctors and aid workers on the ground in besieged zones.

It illustrates with startling clarity the brutality with which the conflict in Syria is being conducted, five years into a revolution-turned-civil-war that has displaced half the country and killed more than 400,000 people. The suffering of people in besieged areas in Syria is also an indictment of the failure of the international community to bring an end to the crisis. Less than 1% of them were given food assistance in 2015 and less than 3% received healthcare. Rihab, a woman living in eastern Ghouta near Damascus, which has been besieged by Bashar al-Assad’s regime, was quoted as saying: “Fear has taken control. Children now wait for their turn to be killed. Even adults live only to wait for their turn to die.”

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Nice theory, though maybe a little farfetched.

Did Michel Foucault Predict Europe’s Refugee Crisis? (Baele)

In March 1976, philosopher Michel Foucault described the advent of a new logic of government, specific to Western liberal societies. He called it biopolitics. States were becoming obsessed with the health and wellbeing of their populations. And sure enough, 40 years later, Western states are prodigiously promoting healthy food, banning tobacco, regulating alcohol, organizing breast cancer checks, and churning out information on the risk probabilities of this or that disease. Foucault never claimed this was a bad trend—it saves lives after all. But he did warn that paying so much attention to the health and wealth of one population necessitates the exclusion of those who are not entitled to—and are perceived to endanger—this health maximization program. Biopolitics is therefore the politics of live and let die.

The more a state focuses on its own population, the more it creates the conditions of possibility for others to die, “exposing people to death, increasing the risk of death for some people.” Rarely has this paradox been more apparent than in the crisis that has seen hundreds of thousands of people seeking asylum in Europe over the past few years. It is striking to watch European societies investing so much in health at home and, at the same time, erecting ever more impermeable legal and material barriers to keep refugees at bay, actively contributing to human deaths. The conflict in the Middle East is a deadly war. Most estimates suggest 300,000 have been killed in Syria alone. The conflict has shown us some of the most gruesome practices that war can produce, including the gassing of several thousands of civilians in Damascus in 2013.

Extremist groups such as the Islamic State display unimaginable levels of violence. They have beheaded people with knives or explosives, burned people locked in cages, crucified people, thrown people from the tops of buildings, or more recently exploded people locked in a car (a child supposedly detonated the bomb). This violence has been exported to Europe. Some of the biggest Syrian cities now look pretty much like Stalingrad in 1943. Inevitably, people escape—just like, for example, the Belgians who fled their country in the first years of World War I (250,000 to the UK alone, with up to 16,000 individuals arriving per day). This emigration is inevitable simply because normal life has become impossible in most parts of the country—and it will continue for almost as long as there are people living in this war-torn region. Jordan—a country just short of 10 million inhabitants—currently hosts more than a million refugees. Turkey hosts almost two million.

Faced with this disaster in its neighbourhood, what do the EU and its member states do? Exactly what Foucault predicted. Germany apart, they compete in imagination to design policies making sure refugees don’t arrive, and send ever-clearer deterrent signals. Austria has unilaterally fixed quotas on the number of asylum seekers that will be accepted at its border each day, effectively leaving bankrupt Greece to handle the burden of the influx alone. A week previously, French prime minister Manuel Valls announced that France and Europe “cannot accept more refugees.” His country originally agreed to receive 30,000 refugees over two years. To put that in perspective in terms of population size, if France was a village of 2,200 inhabitants, it would accept no more than a single person over that time.

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Makes sense, but most won’t want to. Greek government indicates it wants to start moving people out of Idomeni as per Sunday. Reports of dozens of sick children.

Refugees At Border Should Move To Camps, Says Greek Minister (AP)

Greece’s public order minister says refugees living in a squalid camp at the country’s border with Former Yugoslav Republic of Macedonia (FYROM) must accept that the border is shut and move to organized facilities. Nikos Toskas says the country can provide better conditions in other camps within 10-20 kilometers (6-12 miles) of the Idomeni crossing, where up to 14,000 people live in a waterlogged tent city. Toskas told state ERT TV Wednesday that Greece can offer “no serious support” to such a large number of people gathered in one spot. He said authorities will hand out fliers telling refugees seeking to reach central Europe that “there is no hope of you continuing north, therefore come to the camps where we can provide assistance.” More than 36,000 transient refugees and migrants are stuck in financially struggling Greece.

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42,000 refugees stuck in Greece today. One week from now, it’ll be over 60,000.

Conditions At Idomeni Refugee Camp Worsen By The Day (Kath.)

Refugees were still flowing into the Idomeni border camp in northern Greece Wednesday, despite the complete border closure by authorities in the Former Yugoslav Republic of Macedonia over the last few days, while torrential rain has made conditions even worse. “The situation is stifling as more people are arriving daily on foot,” the coordinator of the Hellenic Red Cross in northern Greece, Despina Filipidaki, told Kathimerini on Wednesday. “The biggest problem is that the bad living conditions are worsening the health problems,” she added. According to the latest estimates, more than 12,000 refugees are camped there in deplorable conditions while a further 3,050 are at Piraeus port, bringing the total number of migrants throughout Greece to 35,945.

Government sources told Kathimerini that the total cost of managing the crisis has risen to 278 million euros but that EU assistant funds are on the way. Giorgos Kyritsis, spokesman for the Coordinating Body for the Management of Migration, reiterated Wednesday that the main priority is to eventually evacuate Idomeni and “transfer people to structures affording better living conditions.” But, he said, it won’t be an easy task to convince the refugees. Nor will it be easy to overcome the reaction of locals in other areas where shelters are being erected.

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No comment anymore.

Five Iranians, Afghans Drown Trying To Reach Greece (Reuters)

Five migrants, including a baby, hoping to reach Europe via Greece drowned when their speedboat capsized off the Turkish coast, Dogan News Agency said on Thursday. The Turkish Coast Guard rescued nine people after they called for help late on Wednesday and recovered five bodies, it said. The group, comprised of Afghans and Iranians, were trying to reach the Greek island of Lesvos in the Aegean Sea. The EU has offered Turkey billions of euros in aid to curb illegal migration. Under a draft deal struck on Monday, Turkey agreed to take back all irregular migrants in exchange for more funding, faster visa liberalisation for Turks, and a speeding up of Ankara’s long-stalled EU membership talks. The aim is to discourage illegal migrants and break the grip of human smugglers who have sent them on perilous journeys across the Aegean. But migrants have continued to try to cross from Turkey’s coast in recent days.

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Sep 222015
 
 September 22, 2015  Posted by at 9:38 am Finance Tagged with: , , , , , , , , , , ,  3 Responses »


Arthur Rothstein Accident on US 40 between Hagerstown and Cumberland, MD 1936

“We Are On The Precipice Of A Liquidation In Emerging Markets” (FT)
Currency Market Braces For Renminbi Weakness (FT)
‘Made In Germany’ Lies In The ‘Gutter’ After Volkswagen Caught Cheating (AEP)
Volkswagen Said Focus of U.S. Criminal Probe on Emissions (Bloomberg)
It Took More Than a Year of EPA Pressure to Get VW to Admit Fault (NY Times)
VW’s Worst Nightmare Is For The Scandal To Spread To Europe (Bloomberg)
VW Emissions Scandal Could Snare Other Firms, Whistleblower Claims (Guardian)
VW Faces More Legal Fallout From Cheating – This Time at Home (Bloomberg)
Volkswagen: The Curse Of The World’s Biggest Carmaker (Forbes)
Alexis Tsipras Has Been Set Up To Fail (Yanis Varoufakis)
Greece’s New Government ‘Doomed To Fail’ Over Flawed Bail-Out (Telegraph)
Greece’s Tsipras To Demand EU Action On Refugees (Reuters)
Eastern European Leaders Defy EU Effort To Set Refugee Quotas (Guardian)
EU Set To Water Down Refugee Relocation Plan (AFP)
Putin’s Plan: Moscow Handles Syria, US Looks After Iraq (AlArabiya)
Are Financial Markets Losing Faith In The Fed? (CNBC)
Fed Cred Dead (Jim Kunstler)
Catalans Threaten Not To Pay Public Debt If Spain Refuses Secession Deal (SP)
Joris Luyendijk: ‘Bankers Are The Best Paid Victims’ (Standard)
Sumatran Rhinos Likely To Become Extinct (Guardian)

“The wrong people got the capital..”

“We Are On The Precipice Of A Liquidation In Emerging Markets” (FT)

The world economy is locked on a course towards an emerging markets crisis and a renewed slowdown in the US, regardless of the Federal Reserve holding off on a rise in rates last week, according to one of 2015’s most successful hedge fund managers. John Burbank, whose Passport Capital has placed a raft of lucrative bets against commodities and emerging markets this year, forecast that the Fed would eventually be forced into a fourth round of quantitative easing to shore up the economy. In an interview with the Financial Times, Mr Burbank said years of QE had caused a misallocation of capital across the world, while the end of QE last year triggered a dollar rally with consequences that were only now beginning to be realised.

“The wrong people got the capital — emerging markets countries and corporates and a lot of cyclical companies like mining and energy, particularly shale companies — and this is now a major problem for the credit markets,” he said. Passport, based in San Francisco, manages $4.1bn in three main funds. Its $2.1bn Passport Global fund was up 14.6% at the end of August and a smaller, more concentrated “special opportunities” fund was up 30.6%. Both funds are in the top 15 best performers, year to date, according to the industry league table compiled by HSBC. Among Passport’s publicly-declared short positions is Glencore, the commodities trader that has suffered a 55% tumble in its share price this year.

The Fed last week decided against raising US interest rates from their present level of zero. Although one dissident member of its Federal Open Market Committee did vote for a quarter of a point increase, the committee took a cautious stance, warning of “global economic and financial developments” that could restrain US growth.

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“I don’t think [China] had any idea just how many people there are out there who think their economy is collapsing..”

Currency Market Braces For Renminbi Weakness (FT)

It is hard to say who was more surprised by China’s devaluation of the renminbi last month — international markets, with no inkling whatsoever it was coming, or Chinese officials, stunned by the resulting reaction overseas. This week, President Xi Jinping’s visit to Washington will at least allow officials from both sides to have it out. The common view outside of the mainland is that China bungled it, rocking asset prices from government bonds to iron ore as well as the currency world with its unexpected promise of a “market-based” regime — a pledge its subsequent heavy intervention implies is dead at least for now. The biggest casualty came last week, however, with the Federal Reserve’s decision to hold, not raise, overnight interest rates following the market turmoil triggered by China’s move to shift exchange rate policy and push the renminbi lower.

For Fed chair Janet Yellen, the move by the People’s Bank of China clearly rankled as she highlighted global concerns, pointedly questioning “the deftness with which [Chinese] policymakers were addressing those concerns”. Hence, what China does next with its currency is critical — to the dollar’s path, market sentiment, the Fed’s rate deliberations and the US economy. Stuart Oakley, managing director, global EM, Nomura, says the renminbi would remain stable for the duration of the state visit. “After that, the chance of another leg of weakness for the [renminbi] rises considerably,” he said. “The PBoC will undoubtedly be very mindful of how its own policy decisions on the [renminbi] will affect the dollar on the broader level. I think they will have no issue with seeing the dollar stronger still from here.”

To China bears, the PBoC’s dramatic 1.9% devaluation of August 11 looked like a desperate attempt to bolster flagging exports by starting a currency war under the figleaf of introducing the sort of market-friendly reform designed to impress the IMF. Another interpretation is that Beijing really was focused on the IMF and winning acceptance for the renminbi as a reserve currency, and misjudged the likely reaction. “I don’t think [China] had any idea just how many people there are out there who think their economy is collapsing,” said Chris Wood at CLSA, the pan-Asia brokerage. He thinks further big moves this year are unlikely as officials continue to focus on moving from an investment-led to a consumer-driven economy. “A big devaluation would be an admission their economic shift had failed,” he added.

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“The US press is already calling VW the “Lance Armstrong” of the car market..”

‘Made In Germany’ Lies In The ‘Gutter’ After Volkswagen Caught Cheating (AEP)

Volkswagen has suffered a shocking loss of credibility after conspiring to violate US pollution laws and dupe customers on a systemic scale. The scandal has once again exposed a culture of corrupt practices at the top of German export industry. “We are facing a blatant abuse of consumer trust and a degradation of the environment,” said Jochen Flasbarth, the German state secretary in charge of pollution enforcement. The scandal is intrinsically worse than the explosion of BP’s Deepwater Horizon drilling rig in the Gulf of Mexico in 2010. While BP and its contractors may have been negligent, VW appears to have engaged in a cynical plan to trick regulators in a wholesale breach of the US Clean Air Act.

“It is profoundly serious. The accusation is that VW deliberately set out to mislead regulators with a cleverly hidden piece of software,” said Max Warburton from AllianceBernstein. It is of an entirely different character from earlier breaches of US law by Hyundai and Ford, which stemmed mostly from errors. The US Justice Department is weighing serious criminal charges. “‘Made in Germany’ in the gutter,” said German newspaper Bundesdeutsche Zeitung. The financial daily Handelsblatt called the deception a “catastrophe for the whole of German industry”, warning that it had completely undermined a joint campaign by Audi, BMW, Mercedes, Bosch and VW to convince Americans that diesel is no longer dirty and is the best way to meet tougher US emission standards.

Germany is the world leader in clean diesel. Its car companies have bet heavily on the technology, hoping to win the strategic prize in the US as new rules come into force imposing fuel efficiency of 54.5 miles per gallon by 2025. “We are worried that the justifiably excellent reputation of the German car industry and in particular that of Volkswagen will suffer,” said Sigmar Gabriel, the country’s vice-chancellor and economy minister. Volkswagen’s own vow to become the “greenest” car producer in the world by 2018 has been exposed as a hollow publicity stunt. Theoretically, the company could face fines of $18bn in the US, based on a standard penalty of $37,500 for each of the 482,000 cars fitted with “defeat devices”, which allowed them to mask exhaust emissions of nitrogen oxide (NOx) in pollution control tests.

The actual release of these toxic particles – blamed for emphysema and respiratory diseases – is in reality 40 times above the acceptable levels imposed by the US Environmental Protection Agency. The cars will be recalled and modified, greatly reducing their fuel efficiency. The US press is already calling VW the “Lance Armstrong” of the car market, an apt allusion to drug cheating in sport, and a deadly epithet in an industry where brand image and goodwill are the lifeblood of sales. VW’s share price crashed 19pc in Frankfurt. The company’s strategic ambition to dominate clean diesel sales in the US lies in ruins. “There is no way to put an optimistic spin on this. The best case for VW is probably still a multi-billion dollar fine, pariah status in the US, and damage to its leading position in diesel,” said Mr Warburton.

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Don’t hold your breath.

Volkswagen Said Focus of U.S. Criminal Probe on Emissions (Bloomberg)

The U.S. Justice Department is investigating Volkswagen over its admission that it cheated on federal air pollution tests, according to two U.S. officials familiar with the inquiry. That adds the specter of criminal proceedings to challenges the world’s biggest automaker already faces from regulators, lawmakers and vehicle owners in the three days since it admitted that it had rigged diesel vehicles to pass emissions tests in the lab. The vehicles emitted as much as 40 times the legal limit of pollutants when they were on the road, the Environmental Protection Agency alleges.

The criminal probe, which the officials described on condition of anonymity because it is continuing, will provide an early test of the Justice Department’s newly stated commitment to holding individuals to account for corporate wrongdoing. Earlier this month, the department said companies that want credit for cooperating with investigators must name individuals they allege are responsible for misconduct. The probe is being led by the Justice Department’s Environment and Natural Resources Division, which prosecutes violations of pollution-control laws, according to the officials.

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Good account.

It Took More Than a Year of EPA Pressure to Get VW to Admit Fault (NY Times)

Two years ago, the International Council on Clean Transportation, a nonprofit environmental group staffed by a number of former E.P.A. officials, had been testing the real-world performance of so-called clean diesel cars in Europe, and were less than impressed with the emissions results. The group decided it would test diesel-powered cars in the United States, where regulations were much more strict, as a way of almost shaming the European automakers to tighten their compliance. The group fully expected the American cars to do well, and run cleaner than their counterparts across the pond. What they could not have foreseen was that they would stumble onto one of the biggest frauds in recent automotive history.

Further, on the campus of West Virginia University, a group of emissions researchers who mainly dealt with heavy trucks noticed an unusual posting by the transportation council, which was looking for a partner to test diesel-powered cars. “No one had done that before in the U.S.,” said Arvind Thiruvengadam, a professor at the university. “It sounded very interesting, to test light-duty diesel vehicles in real-world conditions. We looked around at each other said, ‘Let’s do it.’ ” The university’s team bid on the project and got the contract. Mr. Thiruvengadam and his colleagues never envisioned where it would lead. “We certainly didn’t have an aim of catching a manufacturer cheating,” he said. “It didn’t even cross our minds.” The study also did not target Volkswagen specifically.

It was something of a fluke, he said, that two out of three diesel vehicles bought for the testing were VWs. It did not take long for suspicions to set in. The West Virginia researchers were well-versed in diesel performance on real roads, and had certain expectations for how the test cars should ebb and flow in their emissions. But the two Volkswagens behaved strangely. “If you’re idling in traffic for three hours in L.A. traffic, we know a car is not in its sweet spot for good emissions results,” Mr. Thiruvengadam said. “But when you’re going at highway speed at 70 miles an hour, everything should really work properly. The emissions should come down. But the Volkswagens didn’t come down.”

Even then, however, it is difficult for most researchers to be sure exactly what is going on. There are so many factors involved in real-world driving — speed, temperature, topography, braking habits. It is not unheard-of for cars to perform much differently in on-the-road tests than one expected. But this time there was a key difference: the California Air Resources Board heard about the groups’ tests and signed on to participate. The regulators tested the same vehicles in their specially equipped lab used to judge cars’ compliance with state emissions standards. That gave the project what most studies lacked: a baseline. “That broke loose everything,” Mr. Thiruvengadam said.

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But in Europe, Merkel reigns. And she won’t want one of Germany’s largest corporations to go down.

VW’s Worst Nightmare Is For The Scandal To Spread To Europe (Bloomberg)

Just days after General Motors settled with federal prosecutors for its deadly negligence over faulty ignition switches, Volkswagen has admitted that it cheated for years on U.S. Environmental Protection Agency emissions tests. Having built its brand in the U.S. around diesel technology, VW faces severe damage to its reputation here, along with billions in EPA fines and now a federal criminal investigation. Worse for consumers, there’s no guarantee that the fallout of this scandal will be limited to VW alone. Clearly, shareholders are spooked: No amount of damage to VW’s relatively weak U.S. market position could justify the huge declines in VW’s stock price (near 23% on the day, for a market-value hit of $17.6 billion).

The fear, almost certainly, is that this scandal could end up affecting VW’s European market dominance, which is also highly dependent on diesel sales. Having to bring its entire EU fleet into compliance could cost orders of magnitude more than U.S. market repairs, as well as the firm’s widely-respected chief executive officer, Martin Winterkorn, his job. In the U.S., nearly a half-million vehicles equipped with VW’s 2.0 liter TDI engine have been deemed out of compliance with EPA regulations after the International Council on Clean Transportation, a nonprofit watchdog group, discovered they emitted far more nitrogen oxide in normal driving than in testing environments. Faced with an EPA threat to decertify new diesel models, VW admitted that it had installed a “defeat device” to give artificially low emissions results in Audi A3, VW Jetta, Beetle, Golf and Passat models.

The EPA is raining righteous fury down on Volkswagen, but its record of clamping down on automakers’ malfeasance shows it’s on thin ice here. A 2012 scandal in which Hyundai and Kia goosed the numbers on fuel-efficiency tests provided ample evidence that the agency’s protocol – which allows automakers “broad latitude” to test their own vehicles and involves spot-checks on just 10% to 15% of all models – is an invitation to corner-cutting and outright cheating. Until emissions tests are improved, or a consistent complimentary “real world” testing regime is put into place, regulators will lack the leverage to pressure automakers into admitting who is cheating and who is merely gaming the rules. Nor will the agency know if the common discrepancies between test and real-world results reflect shortcomings in the test procedure itself.

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Seems inevitable. But political pressure will be severe.

VW Emissions Scandal Could Snare Other Firms, Whistleblower Claims (Guardian)

The emissions-fixing scandal that has engulfed Volkswagen in the US could extend to other companies and countries, one of the officials involved in uncovering the alleged behaviour has told the Guardian. Billions of pounds have been wiped off the value of global carmakers amid growing concerns that emissions tests may have been rigged across the industry. “We need to ask the question, is this happening in other countries and is this happening at other manufacturers? Some part of our reaction is not even understanding what has happened exactly,” said John German, one of the two co-leads on the US team of the International Council for Clean Transportation (ICCT), the European-based NGO that raised the alarm.

Shares in Volkswagen fell by almost a fifth after the world’s second biggest carmaker issued a public apology in response to US allegations that it used a defeat device to falsify emissions data. South Korea said on Tuesday it would investigate emissions of VW Jetta and Gold models and Audi A3 cars produced in 2014 and 2015. If problems are found, South Korea’s environment ministry said its probe could be expanded to all German diesel imports, which have surged in popularity in recent years in a market long dominated by local producers led by Hyundai. US Congress confirmed it is investigating the scandal on Monday. House energy and commerce committee chairman Fred Upton and oversight and investigations subcommittee chairman Tim Murphy announced that the Oversight and Investigations Subcommittee will hold a hearing.

The US Justice Department is conducting a criminal investigation of Volkswagen admission, according to Bloomberg, which cited two officials familiar with the inquiry. The company could face a fine of up to $18bn, criminal charges for its executives, and legal action from customers and shareholders. The US law firm Hagens Berman has already launched a class-action law suit on behalf of customers who bought the affected cars. VW shares fell by 19% in Frankfurt, wiping almost €15bn off its value. Shares in Renault, Volkswagen’s French rival, also dropped by 4%, while Peugeot was down 2.5%, Nissan 2.5% and BMW 1.5% amid concerns they could be caught up in investigations.

The US Environmental Protection Agency (EPA) said on Friday that VW had installed illegal software to cheat emission tests, allowing its diesel cars to produce up to 40 times more pollution than allowed. The US government ordered VW to recall 482,000 VW and Audi cars produced since 2009. In response, Martin Winterkorn, chief executive of VW, said on Sunday he was “deeply sorry” for breaking the trust of the public and ordered an external investigation. German tipped off regulators at the California Air Resources Board (Carb) and the EPA after conducting tests that showed major discrepancies in the amount of toxic emissions some VW cars were pumping out compared with the legal limits. Max Warburton, an analyst at the financial research group Bernstein, said: “There is no way to put an optimistic spin on this – this is really serious.”

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The biggest challenge may come from investors, car owners and environmental groups.

VW Faces More Legal Fallout From Cheating – This Time at Home (Bloomberg)

Volkswagen’s legal problems started in the U.S., but the world’s biggest carmaker is finding the fallout over its cheating on U.S. environmental tests and declining share price is extending to its home market. The German company’s shares lost nearly a quarter of their value Monday in Frankfurt, and financial regulator Bafin is looking at possible violations of German rules. VW also faces legal threats from investors and environmental groups. “Like in comparable cases, with strong share movements we look at the VW stock as to insider trading, market manipulation, and ad-hoc disclosure rules,” Bafin spokeswoman Anja Schuchhardt said in an e-mail. “But this is a matter of routine.”

The Wolfsburg, Germany-based company admitted to fitting its U.S. diesel vehicles with software that turns on full pollution controls only when the car is undergoing official emissions testing, the Environmental Protection Agency said Friday. With 482,000 autos part of the case, the U.S. fine could total more than $18 billion. During normal driving, the cars with the software – known as a “defeat device” – would pollute 10 times to 40 times the legal limits, the EPA estimated. The discrepancy emerged after the International Council on Clean Transportation commissioned real-world emissions tests of diesel vehicles including a Jetta and Passat, then compared them to lab results. VW halted sales of the models involved on Sunday and said it’s cooperating with the probe and ordered its own external investigation.

Chief Executive Officer Martin Winterkorn, who has led the company since 2007, said he was “deeply sorry” for breaking the public’s trust and that VW would do “everything necessary in order to reverse the damage this has caused.” Andreas Tilp, a lawyer representing investors in German court, says VW may have to pay damages to stockholders in Germany if the allegations of U.S. authorities are upheld. Investors may seek to recover losses incurred because of the stock’s decline. “We’re convinced that VW failed to properly inform the markets and is liable to investors who can seek billions,” Tilp said. “Concealing for years the immense risks of the pollution manipulation and the U.S. probes is a violation of capital market rules.”

Environmental group Deutsche Umwelthilfe said it will sue carmakers to have diesel vehicles removed from the streets starting 2016. It will also take legal action to have Germany’s Federal Motor Transport Authority revoke licenses for the vehicles. While rules on emissions are similar in the U.S. and Germany, the Federal Motor Transport Authority isn’t properly controlling its implementation, Juergen Resch, DUH’s director, said in an e-mailed statement. The German agency isn’t controlling pollution, and should use recalls in case of violations of environmental rules, Resch said.

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It’s lonely at the top.

Volkswagen: The Curse Of The World’s Biggest Carmaker (Forbes)

GM ruled as the No. 1 seller for decades before the problems that led to its 2009 bankruptcy and federal bailout. But those issues caused GM to lose the title in 2008 to Toyota, which spent that decade on a deliberate expansion plan. Once it got to the top, however, Toyota found itself awash in an existential safety crisis that its chief executive, Akio Toyoda, blamed in part on Toyota’s quest to build a global manufacturing empire. Now comes VW, which has been on its own worldwide march over the past five years. It was not aiming to achieve dominance of the car market before 2018, only to find itself taking the top spot this past year, due to its manufacturing growth, especially in China.

Veteran auto industry executives know not to gloat when a car company runs into difficulty. They understand that any carmaker can have “its turn in the barrel,” as the saying goes. The industry has seen what happens when a Japanese company gets in trouble with American regulators, and what transpires when an American company encounters its own scandal. Now, as with Volkswagen’s reign at the top of the industry, the automobile world will see how it handles its emissions case. The one saving grace for VW is that unlike GM or Toyota, the emissions situation did not result in fiery crashes or devastation for the families of accident victims.

It’s primarily a technology issue, on a specific type of vehicle, and in far smaller numbers than affected GM and Toyota. So, it’s possible that recalls can be handled faster, and VW can get the issue behind it more quickly. Nonetheless, it will likely be a huge challengefor Winterkorn,who could face skepticism that he should continue to lead VW, according to at least one analyst. At a time when his company otherwise could have reveled in its industry dominance, VW should expect scrutiny from Congress, legal problems, a potential multibillion-dollar fine and a batch of uncomfortable headlines. GM and Toyota know what that’s like.

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Greece as a country has been set up. As I wrote on July 19: Was Greece Set Up To Fail?

Alexis Tsipras Has Been Set Up To Fail (Yanis Varoufakis)

Alexis Tsipras has snatched resounding victory from the jaws of July’s humiliating surrender to the troika of Greece’s lenders. Defying opposition parties, opinion pollsters and critics within his ranks (including this writer), he held on to government with a reduced, albeit workable, majority. The question is whether he can combine remaining in office with being in power. The greatest losers were smaller parties occupying the extremes of the debate following the referendum. Popular Unity failed stunningly to exploit the grief felt by a majority of “No” voters following Tsipras’s U-turn in favour of a deal that curtailed national sovereignty further and boosted already vicious levels of austerity. Potami, a party positioning itself as the troika’s reformist darling, also failed to rally the smaller “Yes” vote.

With the all-conquering Tsipras now firmly on board with the troika’s programme, new-fangled, pro-troika parties had nothing to offer. The greatest winner is the troika itself. During the past five years, troika-authored bills made it through parliament on ultra-slim majorities, giving their authors sleepless nights. Now, the bills necessary to prop up the third bailout will pass with comfortable majorities, as Syriza is committed to them. Almost every opposition MP (with the exception of the communists of KKE and the Nazis of Golden Dawn) is also on board. Of course, to get to this point Greek democracy has had to be deeply wounded (1.6 million Greeks who voted in the July referendum did not bother to turn up at the polling stations on Sunday) – no great loss to bureaucrats in Brussels, Frankfurt and Washington DC for whom democracy appears, in any case, to be a nuisance.

Tsipras must now implement a fiscal consolidation and reform programme that was designed to fail. Illiquid small businesses, with no access to capital markets, have to now pre-pay next year’s tax on their projected 2016 profits. Households will need to fork out outrageous property taxes on non-performing apartments and shops, which they can’t even sell. VAT rate hikes will boost VAT evasion. Week in week out, the troika will be demanding more recessionary, antisocial policies: pension cuts, lower child benefits, more foreclosures.

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“Greece would return to economic growth if it complied with economic reforms, the European Commission said…” Only in fairy tales can economies grow in which people are forced to reduce spending.

Greece’s New Government ‘Doomed To Fail’ Over Flawed Bail-Out (Telegraph)

Investors cheered the return of Alexis Tsipras as Greece’s new prime minister despite concerns that the new government was doomed to fail in its bid to keep the country in the eurozone. Greece’s 10-year bond yields, a key indicator of default risk, dropped to a yearly low of 8.09pc, as markets bet that political continuity would ease the implementation of the country’s draconian third bail-out programme. Economists, however, warned that the left-wing Syriza party – who lost only four seats in Sunday’s general election – would struggle to jump through the hoops of an €86bn bail-out programme. Athens faces a punishing schedule over the next few months, where it will be required to pass 60 “prior action” laws through parliament by the end of the year. These include hiking taxes on food, hotels and baked goods.

Bail-out monitors will carry out their first review of the government’s progress in October. The reforms are unlikely to be blocked in the majority pro-euro parliament, but Mr Tsipras, who was sworn into office on Monday, still faces a sizeable majority of disgruntled MPs in his own party Failure to make satisfactory progress is set to hinder the prime minister’s battle for much-needed debt relief for the ravaged economy. “Mr Tsipras is unlikely to lie down and accept every new measure forced upon Greece by its creditors and the eurozone’s ‘institutions’,” said Jonathan Loynes, at Capital Economics. “The days of extended negotiations at late-night Brussels summits are not necessarily over,” he added. Despite being plunged into recession, Greece would return to economic growth if it complied with economic reforms, the European Commission said.

GDP is set to contract by more than 2pc this year.] “The underlying growth potential is still there,” said EU vice-president Valdis Dombrovskis. “If the reforms agreed in the new ESM programme are properly implemented, Greece can grow again quite quickly.” But cracks were already beginning to emerge between the new government and Brussels. European parliament president Martin Schulz welcomed Mr Tsipras’s reappointment but questioned the premier’s “bizarre” decision to continue his coalition with the anti-bail-out Independent Greeks (Anel). “I called [Tsipras] a second time to ask him why he was continuing a coalition with this strange, far-right party,” Mr Schulz told French radio on Monday. “He pretty much didn’t answer. He is very clever, especially by telephone. He told me things that seemed convincing, but which ultimately in my eyes are a little bizarre.”

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He’s had 10 months to do that. Why would it work now?

Greece’s Tsipras To Demand EU Action On Refugees (Reuters)

As an icon for many on Europe’s left, Greece’s newly elected prime minister, Alexis Tsipras, can be expected to rattle the cages of the continent’s elite whenever he can. After Sunday’s solid re-election, he may start with the migrant crisis, which he believes is emblematic of the European Union’s failure to stick with its founding principles of unity. “When the Mediterranean turns into a watery grave, and the Aegean Sea is washing dead children up on its shores, the very concept of a united Europe is in crisis, as is European culture,” he told a campaign rally last week. European unity, Tsipras reckons, was also sorely lacking when the EU began imposing harsh austerity on his country when it needed to be bailed out over debt.

But not unlike in the debt crisis, Tsipras must balance his outrage at what he sees as the European Union’s failure to respond to the migrants with a need for its help in meeting the cost to frontline Greece. And as over debt, the criticism goes both ways. Most of the refugees who make their way to Europe arrive via Greece, which transports them from its islands to the mainland, from where they trek north via the Balkans. Croatia said on Monday it would demand Greece stop moving the migrants on. Athens received €33 million in EU aid earlier this month to help cope with the migrants. But Nicos Christodoulakis, caretaker economy minister during the election campaign, said a lack of preparation meant Greece was missing out on up to €400 million in EU aid for the crisis.

Tsipras’ first international meeting after re-election will be a Wednesday discussion in Brussels with his EU counterparts about the hundreds of thousands of refugees and migrants pouring into Europe, many via Greek islands that border Turkey. Officials from his leftist Syriza party say he will ally again with other EU countries bordering the Mediterranean such as Italy and demand that the bloc shares the burden of dealing with hundreds of thousands of refugees. “Member states (must) take and share the responsibility, that’s where the rupture is,” a senior Syriza official said.

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Will this be the straw that breaks the Union’s back?

Eastern European Leaders Defy EU Effort To Set Refugee Quotas (Guardian)

Central and eastern European leaders have defied attempts by Brussels and Berlin to impose refugee quotas ahead of two days of high-stakes summits in Brussels to try to decide on what already looks like a vain attempt to limit the flow of refugees and migrants into Europe. After months of being consistently behind the curve in grappling with the EU’s huge migration crisis, interior ministers will meet on Tuesday to focus on the highly divisive issue of mandatory quotas to share refugees across the union. There will then be an emergency summit of leaders on Wednesday. Jean Asselborn, Luxembourg’s foreign minister, who is chairing Tuesday’s meeting, failed to reach a breakthrough in Prague on Monday with his counterparts from the Czech Republic, Poland, Slovakia, Hungary and Latvia.

The Czech government wrote to Brussels arguing that compulsory quotas were illegal and that it could take the issue to the European court of justice in Luxembourg, while the anti-immigration Hungarian government brought in new laws authorising the army to use non-lethal force against refugees massing on its borders. “There are still a few problems to solve,” said Asselborn. “We still have 20 hours.” “The terrain is still very uncertain,” said a senior source from Luxembourg. “We don’t yet have agreement. It’s going to be very, very difficult.” This week’s fresh attempt to agree on a quota system comes amid the deepest divisions between western and eastern Europe since the former Soviet-bloc countries joined the EU a decade ago.

At issue is the paltry figure of 66,000 refugees being shared across the EU after being moved from Italy and Greece. They have already agreed to share 40,000 and were to redistribute a further 120,000. But 54,000 of those were from Hungary, which passed a law on Monday allowing the army to use non-lethal force on migrants and whose hardline government wants no part of the scheme. Given that up to a million people are expected to enter Germany alone this year and that Frontex, the EU’s border agency, says 500,000 are currently preparing to leave Turkey for the EU, the figures being fought over in Brussels are risible.

But the numbers are not the real issue. The row is about power and sovereignty. In the end it seems that all countries will join in sharing refugees, with the exception of Britain, which has opted out of the scheme. The other two countries with opt-outs – Ireland and Denmark – have agreed to take part, leaving the UK isolated.

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Oh, wait, there’s always backpaddling…

EU Set To Water Down Refugee Relocation Plan (AFP)

EU ministers are considering a watered down plan to relocate 120,000 refugees throughout the bloc, which drops binding quotas and leaves Hungary out of the scheme, sources said Monday. The softer stance emerged on the eve of a new emergency meeting in Brussels of the 28 EU interior ministers, who last week failed to agree on a European Commission plan for compulsory quotas for refugees fleeing war in Syria, Afghanistan and elsewhere. “Whether voluntary or mandatory, that is an artificial debate,” a source from Luxembourg, which holds the rotating EU presidency, told reporters, despite Commission officials insisting that they still want compulsory quotas. Another Luxembourg source said the word “mandatory” will not appear in the draft document that will go before the ministers when they meet Tuesday afternoon to discuss how many refugees each country will take.

Hopes of a unanimous deal last week collapsed in the face of opposition from Hungary, the Czech Republic, Slovakia and Romania, officials said. With populist parties exploiting anti-immigrant sentiment, many eastern countries argued that a Europe-wide relocation plan made little sense for refugees who preferred to settle in wealthier northern European nations. The original plan envisaged quotas for the relocation to other EU states of 54,000 asylum seekers from Hungary, 50,400 from Greece and 15,600 from Italy. But Hungarian Prime Minister Viktor Orban has insisted that by being included in the plan, his country would be erroneously confirmed as a frontline state for refugee arrivals. He insists that many of the migrants are coming from Greece and should have been registered there first and kept there under EU rules.

“It is established that Hungary will not appear in the draft as a beneficiary country,” a Luxembourg source told AFP. “However, it will have to join the solidarity” by hosting refugees from Greece and Italy, the source added. The figure of 120,000 to be relocated will remain in the draft, but it is not immediately clear which countries will now benefit from the relocation of the 54,000 asylum seekers that were originally earmarked in Hungary, sources said. One proposal is for Italy and Greece to benefit, while a second is for other countries along the Western Balkans route, such as Croatia and Slovenia, to be given relief. Despite failing to reach a deal on the larger figure, the EU ministers last week formally approved a plan first aired in May to relocate 40,000 refugees from Greece and Italy.

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Obama’s new headache.

Putin’s Plan: Moscow Handles Syria, US Looks After Iraq (AlArabiya)

At the end of this month, New York will be see several initiatives, talks, understandings, and deals come together under two main themes: terrorism and immigration. Both issues in the minds of world leaders are closely linked to Syria and other crises in the Arab world. U.S. President Barack Obama called for a world summit on terrorism, with ISIS first and foremost in his mind. And Russian President Vladimir Putin tasked his foreign minister Sergei Lavrov to chair a ministerial session of the U.N. Security Council titled “Maintenance of International Peace and Security: Settlement of Conflicts in the Middle East and North Africa and Countering the Terrorist Threat in the Region.” The common denominator between the U.S. and Russian priorities today is reducing the Syrian issue to a terrorism issue.

President Putin has effectively declared to the world that Russia intends to fight a war directly against ISIS and similar groups in Syria, while keeping the Syrian regime as a key ally in this war. Russia wants the United States to be a military partner – including of the Syrian regime – in this bid. Putin wants to meet with Obama on the sidelines of the 70th session of the General Assembly of the United Nations. Obama is now considering whether the meeting will serve one of the key goals behind the Russian leader’s movements in Syria, namely, diverting attention away from Ukraine. The U.S. president is also considering whether he really wants to be drawn into the Syrian crisis, which he has avoided for years. He might therefore bless Russia’s involvement in the Syrian war against ISIS, as long as Putin does not ask the US to officially bless the alliance with the Assad regime.

It is worth quickly examining what Vitaly Churkin, Russia’s shrewd envoy to the U.N., told the U.S. network CBS about the Russian strategy. He said: “I think this is one thing we share now with the United States, with the U.S. government: They don’t want the Assad government to fall. They don’t want it to fall. They want to fight (ISIS) in a way which is not going to harm the Syrian government.” He added: “On the other hand, they don’t want the Syrian government to take advantage of their campaign against [ISIS]. But they don’t want to harm the Syrian government by their action. This is very complex.” It is not clear whether what Churkin is saying is based on assumptions or whether it is a fact that the U.S. government does not acknowledge publicly. If this is just a Russian interpretation of U.S. policy, then it is part of its strategy to sell its pitch because it assumes that Washington will not demur.

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Long lost.

Are Financial Markets Losing Faith In The Fed? (CNBC)

When the U.S. Federal Reserve kept rates on hold on Thursday, the central bank explained it made the decision because of the unstable global outlook. However, some investors have criticized the move, warning that the world could soon lose faith in the Fed. “They (Fed) should not base a rate decision on market volatility, because if you do that, then nobody is going to predict what you’re going to do,” David Kelly, chief global strategist at JPMorgan Funds, told CNBC Monday. “Not only does this now put into doubt when the first rate hike will be, but it means when they begin to raise rates, we don’t know if something could happen in overseas markets and suddenly they stop raising rates.”

In last Thursday’s statement, the central bank pointed to concerns over “global economic and financial developments” as reasons to delay a rate hike, but now investors worry whether this is the right decision and whether this would greatly influence the U.S. economy. St. Louis Fed president, James Bullard, echoed this Monday, telling CNBC it is “inappropriate” for the U.S. central bank to react to financial market turmoil, and focus more on growth and labor markets. Bullard added that to avoid a “1994 scenario”, the Fed should “go early, go gradually”, giving them flexibility to react to future problems that occur. If the U.S. central bank publicizes its concerns over financial markets, markets will in turn become more uncertain over when the Fed will hike, Kelly added.

“Markets hate uncertainty and what the Federal Reserve managed to do is add a huge serving of uncertainty to markets,” Kelly argues, adding that before the Fed had a clear criteria as to what should trigger a first hike and how to maintain, but now talk about China, volatility and commodities adds a whole host of uncertainty for markets. By keeping rates so low, the Federal Reserve is actually helping subdue the U.S. economy, Kelly adds, saying that instead of speeding up economic growth, the central bank is afraid over fears that the economy could be too weak. “If they are going to get derailed by any move in market volatility, then it just makes it more and more cloudy. That is not good for financial markets.”

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“The Federal Reserve itself is the victim du jour of its own grandiose fatuous fecklessness, in particular the idea that it could play a national economy like a three-button flugelhorn.”

Fed Cred Dead (Jim Kunstler)

Last week was the watershed for central banking and for the illusion that the current disposition of things has a future. The Federal Reserve blinked on its long-touted Fed funds interest rate hike and chairperson Janet Yellen was left standing naked in the hot glare of her own carbonizing credibility, a pitiful larval creature, still maundering about “the data,” and “the median growth projection,” and other previously-owned figments spun out of the great PhD wonk machine in the Eccles Building. The Federal Reserve itself is the victim du jour of its own grandiose fatuous fecklessness, in particular the idea that it could play a national economy like a three-button flugelhorn.

What seemed like a good idea at the time when Alan Greenspan and then Ben Bernanke stepped into the pilot house now just looks like the fraud of frauds: enabling corporations to borrow ever more money from the future to pretend that their balance sheets are sound. That scam has nowhere left to go, except into the black hole that has been waiting for it. All the Fed really has left is to destroy the value of the dollar (to save it! Just like Vietnam!). This ought to be an interesting week in the financial markets as the players have had a long, anxious weekend to absorb the death of Fed cred. And October, too. Expect dramatic re-pricing. Sometime a few months down the line, financial markets will present a “relief rally.” Don’t get suckered on that one.

Meanwhile, what remains on the other head of this two-headed economy besides driving to-and-from the Walmart? Pornography? The tattoo industry? Meth and narcotics? Prostitution? Professional sports on the flat screen? Kim and Kanye? Grand theft auto? Do you really think Donald Trump can fix this?

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This may be quite the event this weekend. More Merkel headaches.

Catalans Threaten Not To Pay Public Debt If Spain Refuses Secession Deal (SP)

The First Minister of Catalonia, Artur Mas, decried the comments made by the Governor of the Bank of Spain, Luis María Linde, earlier in the day as “immoral, irresponsible and indecent” and warned an independent Catalonia might not pay its share of the public debt if Spain refused to do a deal. Mr. Mas, echoing what other Junts Pel Sí candidates had said over the weekend, said the central government was promoting a pre-electoral climate of fear to pressure Catalans before the vote on Sunday: “It won’t work, we won’t swallow it”. “The stakes are high for Spain”, he said, according to a report in El País: “Imagine there is no agreement on Spanish public debt. How would the state face its debt if there is no agreement for Catalonia to assume its part?”

On Monday morning, the governor of the Bank of Spain, Luis María Linde, had said during a breakfast meeting in Madrid that capital controls in a newly independent Catalonia were a possibility, although he said his remarks were made in reference to a “highly unlikely future scenario”, according to a report in Europa Press. He also confirmed what others had said before him—including Angela Merkel, David Cameron and European Commission chief spokesman Margaritis Schinas—about a newly independent Catalonia immediately being left out of the European Union. “There are people who have power and don’t want to lose out”, said Mr. Mas in reference to Mr. Linde: “Today we have another example, the governor of the Bank of Spain. People at the service of the state who don’t want to lose power”.

“It is irresponsible and indecent”, said the First Minister: “to threaten things that no democratic country would dare to insinuate”. On Friday evening, after the close of business, Spain’s leading banks issued a statement via the Spanish Banking Association (AEB) warning of the risks of secession to financial security and the banks’ own continued presence in Catalonia should an attempt at secession be made. The governor of the Bank of Spain said on Monday that the banks’ statement “said very obvious things” and that the secession of Catalonia would create “insecurity, uncertainty and tension”.

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” If interest rates return to a historical average of 6%, [London] is finished. It will just go boom.”

Joris Luyendijk: ‘Bankers Are The Best Paid Victims’ (Standard)

When Joris Luyendijk was interviewing bankers, many clearly felt his deepest desire was to be them. “It’s cult-like,” he says of the City. “The macho, master of the universe type has bought into this idea so deeply: ‘I may be working 80 hours a week, I don’t see my family, and my body looks 10 years older than it is, but I am living the life. Everybody wants to be me.’” And as in a cult, insiders were afraid to speak out, fearing expulsion. Whenever he was talking to a financier in a coffee shop and a colleague walked in, they would morph into a “shivering wreck”: “How much of a master of the universe are you if you’re afraid to give your views to a fellow citizen?” Yet many still spoke to him. “I wondered why they would risk their jobs. Some said: ‘I am terrified about what my bank can do to society, and how it is being run’.”

Luyendijk, a 43-year-old investigative journalist, used to cover the Middle East — “interviewing real terrorists not financial terrorists”. But then he started talking to banking employees about the 2008 financial meltdown. The conversations became a Guardian blog and now a book, Swimming With Sharks. It has been so successful in his native Netherlands that he jokingly calls it “Fifty Shades of Joris”. He wants the book to help others see past the obfuscation of the City: “It’s a fundamental misunderstanding that we’re too stupid to understand the problems of finance. A seven-year-old understands perverse incentives. Tell them: ‘Half the class doesn’t do their homework, half does and they all get the same grade; what will happen?’ That’s the bank.”

His view of the future is frightening. “We’ll continue to have ever bigger crashes, until we can no longer save the system. And then we will do what we could do now: rebuild it.” He feels little has changed in banking in the seven years since the crash. “The old mindset is intact: ‘If it’s legal, we’ll do it, and our well-paid lobbyists will ensure it’s legal’. You have these financial empires: too vast, too complex, too toxic to manage. Something happens and they blow up like nuclear reactors.” He has two major predictions. The first is that the next crisis could be caused by terrorists hijacking banking IT systems. “They’re so vulnerable. Because banks were merging and acquiring like crazy, they glued systems together. Imagine if a bank says we can no longer access our data and companies can no longer get their money.”

The second is that the London housing bubble will burst. “It’s a when and not an if. If interest rates return to a historical average of 6%, this city is finished. It will just go boom. Everybody knows this, just as all the [analysts] knew the subprime market in America would explode. It’s just really attractive for George Osborne to reinflate the bubble, so all the home-owning voters are happy.” On the 2008 crisis, Luyendijk argues it wasn’t a failure of capitalism: it showed finance wasn’t really capitalist at all. “I go to the heart of capitalism and I find…” he pauses for effect. “Socialism. Because in most niches, four or five banks control the market, divide it up among themselves and they can’t go bust. Rather than going on about greed, we should make sure there are free market forces in finance again.”

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Another notch in our belts.

Sumatran Rhinos Likely To Become Extinct (Guardian)

Earth’s last remaining Sumatran rhinos are edging perilously close to extinction, according to one of the world’s top conservation bodies. There are fewer than 100 of the animals left in the rainforests of the Indonesian island of Sumatra and the Kalimantan province of Borneo. The last Sumatran rhino (Dicerorhinus sumatrensis) in Malaysia was spotted two years ago in the Sabah region of Borneo but experts last month declared the species extinct in that country. That has prompted the International Union for the Conservation of Nature to sound the alarm over the species’ fate, which it said is headed for extinction if urgent action is not taken.

“It takes the rhino down to a single country,” said Simon Stuart, chair of the IUCN’s species survival commission. “With the ongoing poaching crisis, escalating population decline and destruction of suitable habitat, extinction of the Sumatran rhino in the near future is becoming increasingly likely.” The rhino is the smallest of the three Asian rhino species – there are also just 57 Javan rhinos (Rhinoceros sondaicus) and more than 3,000 Indian rhinos (Rhinoceros unicornis). The population of the Sumatran species is believed to have halved in the last decade. The last official assessment in 2008 put their number at about 250 but Stuart said, with hindsight, the true number then had probably been about 200.

Poachers kill the rhinos for their horn, which is even more valuable than that of African rhinos. “For hundreds of years, we’ve been unable to stem the decline of this species. That’s due to poaching. It’s due to the fact they get to such a low density the animals don’t find each other and they don’t breed. It’s due to the fact that if the females don’t breed regularly, they develop these tumours in their reproductive tract that render them infertile,” he said. A large number of females in the wild were likely infertile because they do not breed often enough, he said. The only Sumatran rhino in the western hemisphere, a male called Harapan, is due to be flown from Cincinnati Zoo in the US to a rhino sanctuary in Sumatra this autumn to help the species breed. There are only nine of the animals in captivity worldwide.

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