Mar 272023
 


René Magritte The seducer 1953

 

Us ‘Shoots Itself In Foot’ By Limiting Use Of Dollar – Putin (TASS)
Russian Economy Will Remain Balanced – Medvedev (RT)
China Could Be ‘Safe Haven’ Amid Banking Turmoil – Citi (RT)
China and Russia Top List Of States With Largest Trade Surplus (RT)
What You Must Know About Russia & China, But Were Afraid To Ask (Lukyanov)
Seizing Russian Assets Is ‘Challenging’ – EU Task Force Head (RT)
Russia To Make Three Times More Ammo Than West Promised Kiev – Putin (RT)
The United States Is 13 Years Behind In Ammunition Production – NYT (Y!)
Berlin Weans Itself Off Russian Gas To Become US LNG Addict – German MP (RT)
UN Security Council To Vote On Nord Stream Sabotage Draft Resolution (TASS)
US Becoming A ‘Banana Republic’ – Trump (RT)
The Donald Trump Problem (Chris Hedges)
Global South Solidarity Is The Key To Lifting Up Central America (Blankenship)
Italians Refuse to ‘Eat Ze Bugs’ (DS)
Agatha Christie Novels Reworked To Remove Potentially Offensive Language (G.)
Eminent Oxford Scientist Says Wind Power “Fails on Every Count” (DS)

 

 

 

 

Putin 23 years
https://twitter.com/i/status/1639900503592120320

 

 

 

 

Putin Mariupol

 

 

Mayor

 

 

 

 

Tucker Thorp

 

 

 

 

Macgregor

 

 

Yellen
https://twitter.com/i/status/1639895094471057408

 

 

 

 

“We would use the dollar, but they do not let us..”

Us ‘Shoots Itself In Foot’ By Limiting Use Of Dollar – Putin (TASS)

The United States does damage to itself by limiting the use of the dollar for situational reasons, Russian President Vladimir Putin said on the Rossiya-24 news channel on Saturday. “They saw off the branch they’re sitting on – I’ve been reiterating that – by limiting the use of the dollar based on momentary, situational considerations of political nature. They are harming themselves, and we might even add, they shoot themselves in the foot,” Putin said in an interview with journalist Pavel Zarubin. According to Putin, the United States’ claims that Russia is encroaching on the dollar are not true. “We would use the dollar, but they do not let us,” he explained. “How can we make payments? In a currency that is acceptable to our partners. The yuan is one of these currencies, especially since it is used by the International Monetary Fund.”


The Russian president emphasized that after the Russian gold and foreign currency reserves were frozen, all the countries in the world have wondered how reliable their US partners are. “And they have come to the conclusion that they are not reliable,” he noted. Putin underlined that Russia’s partners were happy to agree on payments in the yuan. “Do you know that the Middle Eastern oil-producing countries have announced they want to use the yuan for settlements? We will be gradually expanding this and will be expanding [the use] of the reliable currencies,” he said. Putin stated that now the dollar has certain advantages, compared to limitations on other currencies. “However, each country is determined to strengthen its national currency, and all the countries will strive to do so. Therefore, no doubt, it is a big mistake on the part of the US authorities that they restrict settlements in dollars around the world for the countries they do not like for some reason,” the Russian president concluded.

Putin dollar

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“..the EU is increasing its dependence on Beijing much faster than Moscow is..”

Russian Economy Will Remain Balanced – Medvedev (RT)

Russia’s economy will not be reduced to the defense industry alone, despite the ongoing conflict with Ukraine and Western sanctions, former President Dmitry Medvedev told journalists on Sunday. Imbalances in the economy will not be allowed to develop, he said, adding that the country is unlikely to suffer the fate of the Soviet Union. “There is currently no threat of economic militarization in a way, in which it existed [in the USSR] in the 1970s and 1980s,” Medvedev said. The former president argued that the Soviet Union had given too much priority to the defense industry. To avoid such an imbalance, “priorities just need to be set correctly and major macroeconomic indicators monitored,” he added.

Russia does actually need to boost its defense industry, he admitted, adding that it is necessary to “lay the groundwork for the future” even after the Ukraine conflict ends. However, taking such steps will not affect other economic sectors, he believes. The USSR lacked a market system and also the strong consumer goods sector that modern Russia has, Medvedev said, adding that had the West imposed sanctions against the USSR at that time, “we would have had a hard time.” Now, Russia’s “market does not feel any colossal downturns even despite the sanctions,” the former president said. He particularly lauded Russia’s agriculture sector, saying that not only does it allow Russia to meet its own food supply needs but also enables it to “feed others.”

Russia has also managed to keep national inflation rate lower than in many European nations, Medvedev said. “They instigated this campaign, started to fight us and now some nations have an inflation rate of between 15% and 20%,” he said, noting that inflation in Russia is on track to come in at 6% in March and subsequently drop to 4%. Earlier on Sunday, Russian President Vladimir Putin also highlighted that the EU is increasing its dependence on Beijing much faster than Moscow is. RIA Novosti reported in March that Russia and China also topped the list of nations with the biggest trade surpluses last year.

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One year into increasing sactions, Russia is balanced, China is a safe haven.

China Could Be ‘Safe Haven’ Amid Banking Turmoil – Citi (RT)

The unfolding banking crisis in the US and Europe, which has shattered investor confidence in the Western financial system, could highlight China as a “relative safe haven,” economists at Citi said in a note seen by CNBC. The Chinese economy could see accelerated expansion this year, giving the country a “hedge” for growth while economies in the US and Europe face heightened risk of financial disruption, according to the note. “We have long been discussing our view that China can be a major growth hedge this year – if anything, recent global banking stresses perhaps have strengthened this thesis,” a team led by Citi’s Chief China economist Xiangrong Yu reportedly stated.

“China could at least be a relative ‘safe haven’ given its growth premium, financial soundness, policy discipline and the new political economy cycle,” the economists argued. They pointed to the recent decision by the People’s Bank of China (PBoC) to cut its reserve requirement ratio (RRR), saying the move showed “reassurance of policy support amid global volatilities.” The regulator reduced the ratio for almost all banks by 25 basis points last week, with the move widely viewed as an attempt of ensuring liquidity in the banking system. “Perhaps taking lessons from what the US has been going through in recent years, the PBoC has been prudent in easing even during the pandemic era and may quickly switch to a wait-and-see mode once growth is back on track,” the analysts wrote.

They also noted the Chinese government’s restructuring earlier this month as part of the effort to ease financial risks. According to CNBC, Citi also expects to see the onshore yuan strengthening against the US dollar as soon as September, which would bring the renminbi to its strongest levels since April last year. “With the unintended and undesirable from aggressive interest rate hikes surfacing abroad, capital inflows into China could resume after they reopen trade if the recovery thesis plays out and political rerating is steadily ongoing,” Citi concluded.

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“Both countries broke their own records in 2022, with China’s trade surplus surging 30% to an all-time high of $877.6 billion..”

China and Russia Top List Of States With Largest Trade Surplus (RT)

China and Russia became the world leaders in trade surplus last year, according to calculations by RIA Novosti based on data from the national statistical services of both countries. A trade surplus is an indicator of a positive balance of trade, where a country’s exports exceed its imports. Traditionally, by showing that local currency and resource inflow exceeds outflow, a surplus serves as an indicator of a healthy economy. Both countries broke their own records in 2022, with China’s trade surplus surging 30% to an all-time high of $877.6 billion. The country exported approximately $3.59 trillion worth of goods, a growth in export value of about 7% compared to the previous year. Imports, meanwhile, grew by only 1.1%, to roughly $2.72 trillion.

Russia increased its surplus 1.7 times over the year to a record $333.4 billion, claiming the second place among major economies. The country’s total exports reached $591.4 billion, up 19.9% from 2021. The surge was driven by the rise in energy sales, which made up the bulk of Russia’s foreign exports and reached $383.73 billion, a 42.8% year-on-year increase. Imports, however, slid 11.7% against the previous year to $259.1 billion. Analysts attribute the drop in imports to Western sanctions on Russia, combined with Moscow’s efforts toward self-sufficiency and import substitution measures. Saudi Arabia, which posted its highest trade surplus since 2012 at $221.3 billion, ranked third, followed by Norway, Australia and Qatar.

Germany saw its figure drop 2.4 times to $85.34 billion, slipping to the seventh spot from the second place a year earlier. Canada, meanwhile, became the absolute leader in terms of growth, with its number jumping 4.8 times throughout the year, to $17.45 billion. According to the data, the only country that was able to move from a deficit to a surplus in trade at the end of last year was Nigeria. Overall, 26 major economies recorded a surplus in 2022, compared to 32 economies a year earlier. The study was conducted by RIA Novosti on the basis of data from the national statistical services of the globe’s 60 largest economies, which had disclosed trade results for January-December 2022 as of mid-March.

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“..when it comes to preparedness for adverse changes and shocks (let’s call it state endurance), Moscow is probably in the lead, but Beijing’s room for maneuver in global politics is now much greater.”

What You Must Know About Russia & China, But Were Afraid To Ask (Lukyanov)

So much has been said about Xi Jinping’s visit to Russia last week, that the descriptive genre has been exhausted. What is needed instead is either details on specific aspects or some sort of in-depth socio-cultural analysis. That will no doubt be done by specialists in those areas, so we will confine ourselves here to brief answers to the most frequently asked questions. Are Russia and China allies? Both countries have limited experience of alliances and are not really inclined towards this form of relationship. Such a declaration implies a commitment and, more importantly, a limitation of one’s own interests and capabilities in favor of the other state. If it is reciprocal, it is fine – and can be mutually beneficial – but the dominant attitude in both Chinese and Russian political logic is freedom of action and maximum sovereignty. As a result, both Moscow and Beijing shy away from describing their relationship as an alliance, preferring more fluid phrases. This has happened again. It should be noted, however, that the expressions used by Xi come perhaps as close to the idea of an alliance (as is possible in Chinese culture) without using the term.

Is the relationship equal? The question of equality is largely arbitrary – it is not clear how to measure it. There is no formal hierarchy in relations between Russia and China, and in principle there cannot be such a system. It is difficult to compare the weight. China is, of course, much more powerful economically, and now also in many technological respects. However, Russia is a major military and political power in its own right. Indeed, when it comes to preparedness for adverse changes and shocks (let’s call it state endurance), Moscow is probably in the lead, but Beijing’s room for maneuver in global politics is now much greater.

The question could be posed differently: who needs it more, and who should therefore do more to strengthen ties? At first glance, Russia would seem to need it the most – no matter how well you do, an acute conflict with a group of the world’s most successful and influential states significantly limits your options. Thus, they need to be compensated by other partners which are no less important and therefore able to impose conditions. The most powerful of them all is China. This is true, but there is another side to it. Beijing has finally realized that the time of peaceful and comfortable development is over. It is China that the United States sees as its main adversary for decades to come, and the pressure on it will only increase. Beijing has no more solid and reliable partner than Moscow; there is simply no other candidate. And the importance of such a relationship will continue to grow. Traditional Chinese pragmatism works in our favor.

Putin axis
https://twitter.com/i/status/1639999920391311362

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“..the EU’s “freeze and seize task force..”

Seizing Russian Assets Is ‘Challenging’ – EU Task Force Head (RT)

The EU working group that deals with the issue of confiscating frozen Russian assets will have to be “innovative” in approaching the task, Swedish diplomat and head of the EU’s “freeze and seize task force,” Anders Ahnlid, told AFP on Friday. According to Ahnlid, “it is a challenge to find legal means that are acceptable” to expropriate the assets in order to use them for the reconstruction of Ukraine, which is the task force’s plan. He noted that precedents for such actions are rare, one of the few being the seizure of Iraqi assets by the US at the end of Saddam Hussein’s regime. “Hopefully, we can achieve results during Sweden’s EU presidency [which ends in June]… But these are complicated matters. There will be short-term and long-term aspects of what we’re doing,” the diplomat warned, adding that his working group will have “to be a bit innovative in order to move forward.”

He noted that the task force is still trying to determine “which assets are we talking about and where are they.” There are two types of assets – state property that belongs to the Russian government and private assets. The former mostly refers to nearly $300 billion in Russia’s foreign currency reserves, which have been frozen by the West. According to Ahnlid, they are easier to seize legally. The latter, however, are much harder to identify and can be seized only in a few cases, for instance when they can be proven to be the proceeds of a crime. The diplomat says the task force may decide not to confiscate these assets permanently, but only seize income or interest on the capital. sAhnlid is not the first to point out the difficulties surrounding the plan to confiscate Russian assets. The Swiss government, for instance, has been opposed to the move, saying last month that it would violate international agreements and Switzerland’s constitution.

US Treasury Secretary Janet Yellen has also been openly skeptical, warning that apart from legal obstacles, such a step could be considered a precedent jeopardizing faith in the Western financial system and the dollar. According to her, countries could become reluctant to keep money in US banks, fearing that their funds could be seized as well. Many analysts also point out that the move could put European and American assets at risk, as they could also be in danger of being confiscated in case of an international dispute. Moscow, meanwhile, has repeatedly called the freezing of its assets “theft,” and warned of countermeasures should Western states attempt to take Russian-owned funds and redirect them to Ukraine.

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And you can’t easily ramp that up..

Russia To Make Three Times More Ammo Than West Promised Kiev – Putin (RT)

Russia is set to drastically increase its munitions production, President Vladimir Putin has said, adding that Western arms shipments to Kiev will only delay the inevitable outcome of the Ukraine conflict. In an interview with Russia 1 TV aired on Saturday, Putin was asked to comment on Western plans to support Ukraine with a million additional artillery shells. While describing the amount as “very considerable,” the president stated that according to Moscow’s data, the US is currently producing 14,000-15,000 artillery shells a month, while the Ukrainian military uses up to 5,000 shells each day. “Next year… [the US plans] to produce as much as 42,000, and 75,000 in 2025.”

However, Putin said that Moscow’s forces have been using far more munitions than Ukraine, and that the Ministry of Defense and the General Staff “even had to introduce certain limitations.” “Russia’s output level and its military-industrial complex are developing at a very fast pace, which was unexpected by many,” he said. While multiple Western countries will provide Ukraine with munitions, “the Russian production sector on its own will produce three times more ammunition for the same period of time,” according to the president. Putin also noted that the Western “instigators” of the conflict plan to send more than 400 tanks to Ukraine.

“The situation here is the same as with the ammunition. During that period, we will produce and modernize over 1,600 [tanks],” he said, adding that the total number will exceed Ukraine’s by more than three times. Putin stated that the arms shipments to Ukraine are of concern to Russia only because they constitute “an attempt to prolong the conflict” and will “only lead to a bigger tragedy and nothing more.” The president’s comments come after former Russian President Dmitry Medvedev, who now serves as deputy chairman of the Security Council, stated this week that Moscow has rapidly boosted military production despite the Western sanctions and claims that Russia is running out of weapons.

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Hmmmm, make more or use less?! Their choice is obvious.

The United States Is 13 Years Behind In Ammunition Production – NYT (Y!)

The United States’ commitment to support Ukraine against the Russian invasion appears to have rattled the stability of the domestic stockpile of missiles and munitions. The Biden administration has promised — as part of $33 billion sent in military aid for the besieged country so far — a US Patriot air-defense system will be sent to Ukraine, along with over 200,000 rounds of artillery, rockets, and tank rounds. In fulfilling those promises, The New York Times reported the US has sent Ukraine so many stockpiled Stinger missiles that it would take 13 years of production at recent capacity levels to replace them. The Times added that Raytheon, the company that helps make Javeline missile systems, said it would take five years at last year’s production rates to replace the number of missiles sent to Ukraine in the last ten months.

Currently, the US produces just over 14,000 rounds of 155mm ammunition every month — and Ukrainian forces have previously fired that many rounds in the span of 48 hours, The Washington Post reported last month. US officials in January proposed a production increase up to 90,000 rounds of 155mm ammunition each month to keep up with demand. “Ammunition availability might be the single most important factor that determines the course of the war in 2023,” US defense experts Michael Kofman and Rob Lee wrote in December for the Foreign Policy Research Institute, adding that Ukraine will depend on international stockpiles and production for access to the ammunition it needs.

The United States has rarely seen production shortages in ammunition and missiles to the degree the country currently faces. While there was a brief precision missile shortage in 2016 following fights in Libya and Iraq, The Times reported, the US has largely been engaged in short-term, high-intensity fights such as the Persian Gulf War, or prolonged, lower-intensity missions like the war in Afghanistan, which allowed for the stockpile to be rebuilt as needed. Now, as tensions rise among global superpowers, production and munition limitations in the US — caused by supply chain shortages, as well as Cold War-era reductions in capacity, The Times reported — have become of grave concern among defense professionals.

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At a much higher cost. Economy driven by ideology. Deadly.

Berlin Weans Itself Off Russian Gas To Become US LNG Addict – German MP (RT)

The sabotage of the Nord Stream natural gas pipelines has turned Germany’s dependence on Russian natural gas into an addiction to liquefied natural gas (LNG) from the US, a member of the German Bundestag, Andrej Hunko, has said. Germany has paid heavily for last year’s explosions on the pipelines, which were built to deliver cheap natural gas from Russia, The Left party politician told China’s Global Times newspaper in an interview on Thursday. He noted that the sabotage left Berlin without an option to “choose which gas is better and cheaper and which is ecologically better.” “Before, it was a decision under political pressure, whether to use gas or not. But now there is no infrastructure to use gas,” and “this is the biggest impact,” Hunko said.

Germany used to meet up to 40% of its demand with gas from Russia. Last year, Berlin managed to reduce its reliance on the fuel from the sanctioned country by replacing it with imports of LNG from the US, “which is by far more expensive and worse from an ecological point of view,” according to Hunko. The politician said the explosions were an act of an “economic war” targeting not only Germany but the entire EU. The Nord Stream 1 pipeline, which runs under the Baltic Sea and carried natural gas from Russia to Germany, along with the newly built but never used Nord Stream 2, were ruptured by underwater bombs last September, rendering them inoperable. “Who benefits from this? It’s clear. It’s mainly the countries that export the gas to Germany; it is mainly the US,” Hunko said, adding: “this means not only higher prices for gas for the German population, but also a problem for German industry.”

Prior to the conflict in Ukraine, Germany was already experiencing economic difficulties due to a shortage of qualified personnel and muted productivity growth. Skyrocketing energy prices have since dealt a serious blow to the economy which is based on low energy prices and exports, Hunko noted. He warned that the surging cost of energy and raw materials, and the resulting restraints on investment, are forcing some major businesses to leave the country as “it is no longer as interesting for big companies to stay in Germany”. Some businesses have already migrated to the US, the politician said, arguing that this indicates an economic competition between the US, Germany and Europe.

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Provoke US into using its veto power.

UN Security Council To Vote On Nord Stream Sabotage Draft Resolution (TASS)

The UN Security Council will vote on Monday on a Russian-Chinese draft resolution on an international investigation into the sabotage of the Nord Stream 1 and Nord Stream 2 pipelines. Voting is expected to be held after 15:00 (22:00 Moscow time). The text of the draft proposes UN Secretary General Antonio Guterres to establish an international independent commission to conduct a comprehensive, transparent, and impartial investigation of all aspects of the act of sabotage on the Nord Stream 1 and Nord Stream 2 gas pipelines, including identifying the perpetrators, sponsors, organizers, and their accomplices. Guterres is expected to appoint experts to this commission. If the resolution is passed, he must make recommendations for its establishment within 30 days.

The document also encourages countries conducting their own investigations to fully collaborate with the commission and share information with it. The document urges these nations to share information with other interested parties as well. Russia prepared the first version of the Nord Stream resolution at the end of February, but did not immediately bring it to a vote, instead inviting Security Council members to discuss the document. Three sets of consultations have been held since. According to TASS sources within the world organization, there is no general agreement on Russia’s suggested document, which means it will most likely not be adopted. A resolution must be backed by at least nine Security Council members in order to be adopted.

Any of the permanent members may veto it, but only if the necessary number of votes is obtained to pass the document. If the resolution receives eight votes and the United States votes against it, it means that the veto was not used. However, if the document receives nine or more votes, voting against it will result in the use of the veto power. “It’s not about the number of votes; it’s about the way they vote,” according to Vasily Nebenzya, Russia’s Permanent Representative to the United Nations. Previously, Western countries claimed that Russia was isolated and did not have the Security Council’s support, because it opposes the UN Security Council’s initiatives on Ukraine, while the rest of the Council’s members either back it or abstain.

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“Justice will only be done once we have thrown this repulsive political class the hell out of office..”

US Becoming A ‘Banana Republic’ – Trump (RT)

Former President Donald Trump told his supporters on Saturday that President Joe Biden is turning the US into a “banana republic,” and promised to throw the “repulsive political class the hell out of office” if re-elected next year. Trump, who is reportedly facing arrest over campaign finance charges in New York, held his first campaign rally ahead of the 2024 election in Waco, Texas, on Saturday. Speaking to a crowd of several thousand people, Trump reiterated his long-held belief that the charges against him – as well as the prosecution of the January 6, 2021, rioters – are a Democrat-orchestrated plot to keep him out of office and criminalize his supporters.

“The Biden regime’s weaponization of law enforcement against their political opponents is something straight out of the Stalinist Russia horror show,” he declared, calling Biden’s America “a third-world banana republic.” “From the beginning it’s been one witch hunt and phony investigation after another,” Trump asserted, adding “it’s no coincidence that the deep state is coming after me even harder since I pledged to swiftly end the war in Ukraine.” Trump has claimed for months that if elected, he would be able to achieve a settlement to the conflict within 24 hours. He has not elaborated further on how he would achieve this, but has blamed the conflict on “all the warmongers and ‘America Last’ globalists” in the Pentagon, State Department, and other organs of the national security establishment and “deep state.”

“Justice will only be done once we have thrown this repulsive political class the hell out of office,” he told the crowd in Waco on Saturday. Trump made a number of campaign promises at the rally, vowing to boost domestic energy production, phase out imports from China, end funding for “critical race theory and transgender insanity” in schools, and use state, federal, and military resources to “carry out the largest domestic deportation operation in American history.” “Eisenhower did it, so we don’t have to feel so bad,” Trump quipped, referring to the removal of more than a million illegal immigrants by Dwight D. Eisenhower’s administration in the early 1950s under ‘Operation Wetback.’

Trump is currently leading most polls to take the Republican nomination in 2024, with Florida Governor Ron DeSantis in second place by between two and 30 points. While DeSantis has not declared his candidacy, Trump devoted a portion of his speech at Waco to attacking his potential opponent. Referring to DeSantis as “DeSanctimonious,” Trump took credit for the governor’s political career, and condemned him for shutting down his state at the beginning of the coronavirus pandemic.

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Hedges talks about all the court cases vs Trump, but fails to say what weight they have.

The Donald Trump Problem (Chris Hedges)

As was the case with Nixon, the most serious charges Trump may face involve his attack on the foundations of the two-party duopoly, especially undermining the peaceable transfer of power from one branch of the duopoly to the other. In Georgia, Trump could face very serious criminal charges with potentially lengthy sentences if convicted, likewise if the federal special prosecutor indicts Trump for unlawful interference in the 2020 election. We won’t know until any indictments are made public. Yet, the most egregious of Trump’s actions while in office either received minimal media coverage, were downplayed or lauded as acts carried out in defense of democracy and the U.S.-led international order.

Why hasn’t Trump been criminally investigated for the act of war he committed against Iran and Iraq when he assassinated Iranian Major General Qassem Soleimani and nine other people with a drone strike in Baghdad airport? Iraqi Prime Minister Adel Abdul-Mahdi condemned the strike and told his parliament that Trump lied in order to get Soleimani exposed in Iraq as part of peace talks between Iraq, Iran and Saudi Arabia. Iraq’s parliament passed a resolution demanding that all foreign troops leave the country, which the U.S. government proceeded to reject. Why not prosecute or impeach Trump for pressuring his secretary of state to lie and say that Iran wasn’t complying with the Joint Comprehensive Plan of Action, known as the Iran nuclear deal? Trump ultimately fired him and resumed unilateral, devastating and illegal sanctions against Iran, in violation of international law and quite possibly domestic U.S. law.

Why wasn’t Trump impeached for his role in the ongoing attempts to engineer a coup and overthrow the democratically elected president of Venezuela? Trump declared a previously unknown right-wing politician — and would-be coup leader — Juan Guaido to be the true Venezuelan president and then illegally handed him control of the Latin American country’s U.S. bank accounts. The illegal U.S. sanctions that have facilitated this coup attempt have blocked food, medicine and other goods from entering the country and prevented the government from exploiting and exporting its own oil, devastating the economy. Over 40,000 people died between 2017 and 2019 due to the sanctions, according to the Center for Economic and Policy Research. That figure is certainly higher now.

Nixon, like Trump, was not impeached for his worst crimes. He was never charged for directing the CIA to destroy the Chilean economy and back a far-right military coup that overthrew the democratically elected left-wing government of Salvador Allende. Nixon wasn’t brought to justice for his illegal, secret mass bombing campaigns in Cambodia and Laos that killed hundreds of thousands of civilians, and his government’s role in the slaughter of Vietnamese people, resulting in at least 3.8 million killed according to a joint report from Harvard University and the University of Washington and even higher casualties according to investigative journalist Nick Turse. Nixon wasn’t held accountable for what then-President Lyndon Johnson privately blasted as “treason” when he discovered that the yet-to-be-elected Republican candidate for president, and his future National Security Advisor, Henry Kissinger, were deliberately and illegally sabotaging his peace negotiations in Vietnam, ultimately prolonging the war for another four years.

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China has substantially raised its profile in America’s backyard.

Global South Solidarity Is The Key To Lifting Up Central America (Blankenship)

Honduran President Xiomara Castro caused a stir in the media when, on March 14, she remarked that she instructed her foreign minister to re-establish diplomatic ties with China. This was met with strong approval in Beijing while Honduran Foreign Minister Enrique Reina reiterated that his nation is seeking “all the mechanisms that the international relationship serves for the interests of the people” and that his nation must “cooperate with the largest nations in the world.” But, of course, the move was met with disgust in Washington, which, through its dated “Monroe Doctrine” that places the Western Hemisphere firmly in the US sphere of influence, sees itself as the overlord of Latin America. For example, US Senator Bill Cassidy said on Twitter that Honduras was moving closer to China “while the world is moving away” and that “the Honduran people will suffer because of [Castro’s] failed leadership.”

To be fair, the US sure knows a thing or two about the suffering of Hondurans and other Central Americans, locking them and their children in cages as they flee destitution to the US. Washington has also orchestrated numerous coups that have devastated the region. At the same time, China has a record of helping Central American nations, including Nicaragua, which recently re-established ties with Beijing. In February, China and Nicaragua agreed to step up their negotiations on a mutually beneficial free trade agreement and to advance the development of bilateral ties. To get a sense of this importance, I spoke to acclaimed American journalist Benjamin Norton at that time, who lives in Nicaragua and has been extensively covering China-Nicaragua ties. He told me that “the trade negotiations between Nicaragua and China are an important step in the deepening of South-South cooperation and the construction of a multipolar world.”

According to Norton, “historically the United States has treated Latin America in general, and Central America in particular, as its colonial property. The US militarily occupied Nicaragua three times and for decades propped up a brutal right-wing military dictatorship which imposed austerity on its population and sent all exports to the US for pennies on the dollar.” Norton noted that in 2018 the US again “sponsored a violent coup attempt against Nicaragua’s democratically elected Sandinista government. When the putsch failed, Washington responded with economic warfare, imposing several rounds of aggressive unilateral sanctions, such as the devastating NICA Act, while pushing for a financial blockade.” He noted that these sanctions are illegal under international law and “have done significant damage to the Nicaraguan economy, hurting working-class Nicaraguans.”

Honduras

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“It’s fundamental that these flours are not confused with food made in Italy..”

Italians Refuse to ‘Eat Ze Bugs’ (DS)

Our WEF overlords may want us to ‘eat ze bugs’ and be happy, but Italians are having none of it, as their Government has banned the use of insect flour in pizza and pasta. The Times has more: “The growing use in cooking of flour made from crickets, locusts and insect larvae has met fierce opposition in Italy, where the Government is to ban its use in pizza and pasta and segregate it on supermarket shelves. In a sign of fear that insects might be associated with Italian cuisine, three Government ministers called a press conference in Rome to announce four decrees aimed at a crackdown. “It’s fundamental that these flours are not confused with food made in Italy,” Francesco Lollobrigida, the agriculture minister, said.


Packed with vitamins, proteins and minerals, flour made from crickets is increasingly seen as an ecological way to obtain nutrients, and the market is forecast to reach $3.5 billion by 2029. The EU has already authorised foods made from crickets, locusts and the darkling beetle larva. In January mealworm larvae was added to the list. All four insects are cited in the Italian decrees, which will require any products containing them to be labelled with large lettering and displayed separately from other foods. “Whoever wants to eat these products can, but those who don’t, and I imagine that will be most Italians, will be able to choose,” Lollobrigida said.” When historians look back and wonder what thwarted the Great Reset, perhaps the Italian refusal to ruin their beloved pasta and pizza will be seen as the catalyst.

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We need something akin to seed banks, where original literature is stored for future generations.

Agatha Christie Novels Reworked To Remove Potentially Offensive Language (G.)

Several Agatha Christie novels have been edited to remove potentially offensive language, including insults and references to ethnicity. Poirot and Miss Marple mysteries written between 1920 and 1976 have had passages reworked or removed in new editions published by HarperCollins to strip them of language and descriptions that modern audiences find offensive, especially those involving the characters Christie’s protagonists encounter outside the UK. Sensitivity readers had made the edits, which were evident in digital versions of the new editions, including the entire Miss Marple run and selected Poirot novels set to be released or that have been released since 2020, the Telegraph reported.

The updates follow edits made to books by Roald Dahl and Ian Fleming to remove offensive references to gender and race in a bid to preserve their relevance to modern readers. The newspaper reported that the edits cut references to ethnicity, such as describing a character as black, Jewish or gypsy or a female character’s torso as “of black marble” and a judge’s “Indian temper”, and remove terms such as “Oriental” and the N-word. The word “natives” has also been replaced with the word “local”.

Among the examples of changes cited by the Telegraph is the 1937 Poirot novel Death on the Nile, in which the character of Mrs Allerton complains that a group of children are pestering her, saying that “they come back and stare, and stare, and their eyes are simply disgusting, and so are their noses, and I don’t believe I really like children”. This has been stripped down in a new edition to state: “They come back and stare, and stare. And I don’t believe I really like children.”

Read more …

“..the infrastructure around wind and solar will not only fail, “but will cost trillions, trash large portions of the environment and be entirely unnecessary..”

Eminent Oxford Scientist Says Wind Power “Fails on Every Count” (DS)

It could be argued that the basic arithmetic showing wind power is an economic and societal disaster in the making should be clear to a bright primary school child. Now the Oxford University mathematician and physicist, researcher at CERN and Fellow of Keble College, Emeritus Professor Wade Allison has done the sums. The U.K. is facing the likelihood of a failure in the electricity supply, he concludes. “Wind power fails on every count,” he says, adding that governments are ignoring “overwhelming evidence” of the inadequacies of wind power, “and resorting to bluster rather than reasoned analysis”. Professor Allison’s dire warnings are contained in a short paper recently published by the Global Warming Policy Foundation.

He notes that the energy provided by the Sun is “extremely weak”, which is why it was unable to provide the energy to sustain even a small global population before the Industrial Revolution with an acceptable standard of living. A similar point was made recently in more dramatic fashion by the nuclear physicist Dr. Wallace Manheimer. He argued that the infrastructure around wind and solar will not only fail, “but will cost trillions, trash large portions of the environment and be entirely unnecessary”. In his paper, Allison concentrates on working out the numbers that lie behind the natural fluctuations in the wind. The full workings out are not complicated and can be assessed from the link above. He shows that at a wind speed of 20mph, the power produced by a wind turbine is 600 watts per square metre at full efficiency.

To deliver the same power as the Hinkley Point C nuclear plant – 3,200 million watts – it would require 5.5 million square metres of turbine swept area. It is noted that this should be quite unacceptable to those who care about birds and other environmentalists. Of course, this concern does not seem to have materialised to date. Millions of bats and birds are calculated to be slaughtered by onshore wind turbines every year. Meanwhile, off the coast of Massachusetts, work is about to start on a giant wind farm, complete with permits to harass and likely injure almost a tenth of the population of the rare North Atlantic Right whale. When fluctuations in wind speed are taken into account in Allison’s formula, the performance of wind becomes very much worse. If the wind speed drops by half, the power available falls by a factor of eight.

Almost worse, he notes, if the wind speed doubles, the power delivered goes up eight times, and the turbine has to be turned off for its own protection. For eight days at the end of the month, power generation slumped, presumably, says Allison, because the wind speed halved. The 8.8 GW daily loss over the period was noted to be 1,000 times the capacity of the world largest grid storage battery at Moss Landings in California. When it comes to the enormous batteries needed to store renewable power, Allison notes the problems with safety, as well as mineral shortages. Batteries will never make good the failure of offshore wind farms, even for a week, and he points out they can fail for much longer than that.

Read more …

 

 

 

 

Led by Donkeys
https://twitter.com/i/status/1639689865238306816

 

 

 

 

Sunak
https://twitter.com/i/status/1639966313417261056

 

 

Cybertruck

 

 

Sleep seal
https://twitter.com/i/status/1639979941608542209

 

 

Baby jaguar

 

 

The Big fight
https://twitter.com/i/status/1639940131762077700

 

 

 

 

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Jan 132015
 
 January 13, 2015  Posted by at 8:26 am Finance Tagged with: , , , , , ,  13 Responses »


DPC Market Street from Montgomery Street, San Francisco, after the earthquake 1906

Filed under Be Careful What You Wish For, once again here’s our friend Euan Mearns, this time on how well-intentioned green initiatives may bankrupt and eviscerate entire nations. Euan’s site is Energy Matters.

Euan Mearns: I last looked into the details and consequences of Scottish energy policy in the pre-referendum post Scotch on the ROCs. The expansion of Scottish renewables is progressing at breakneck speed and the purpose of this post is to update on where we are and where we are heading whether anyone likes it or not (Figure 1). Objections to wind power normally come from rural dwelling country folks whose lives are impacted by the construction of wind turbine power stations around them. My objections tend to be rooted more in the raison d’être for renewables (CO2 reduction), their cost, grid reliability and gross environmental impact. One issue I want to draw attention to is the vast electricity surplus that Scotland will produce on windy days in the years ahead. That surplus has to be paid for. Where will it go and how will it be used?

Figure 1 The rapidly changing face of electricity generation in Scotland. Wind power seems destined to grow from virtually nothing in 2010 to 15.8 GW come 2020. Maximum power demand in Scotland is 6 GW (red line).

This post was prompted by a couple of emails in the wake of my recent post on WWF Masters of Spin that brought my attention to two short reports prepared by Professor (emeritus) Jack Ponton that describe how operational and consented wind farms will already take Scotland beyond its 2020 target. The small pdfs can be downloaded here and here and the two key charts are reproduced below.

Figure 2 The status of operational, consented and pending wind farms in Scotland as of August 2014.

Figure 3 The status of operational, consented and pending wind farms in Scotland as of October 2014.

Figure 2 shows how in August 2014 operational and consented wind farms already had the capacity to meet the Scottish Government target of 100% electricity from renewables by 2020. Subsequent to that there has been a new round of wind power stations consented that takes us way beyond the target (Figure 3). So what is there to worry about?

Figure 1 shows the status of Scottish electricity generating capacity in 2010, 2015 and 2020 (it’s reproduced below to ease inspection). There has been an astonishing transformation.

2010

The status in 2010, that doesn’t seem that long ago, shows two nuclear, two coal and one gas fired power station, a suite of hydro electric power stations and barely any wind turbine power stations. The red line shows approximate peak demand in Scotland of 6 GW and with 8.4 GW despatchable power, Scotland’s electricity needs were safe and secure

2015

By 2015 a major transformation has already taken place. Cockenzie coal fired power station has been closed. But we still have 6752 GW of dispatchable power, comfortably in excess of peak demand but susceptible to a nuclear outage. Peterhead gas now has a standby role with reduced capacity. Part of that power station may also be developed for carbon capture and storage (CCS). But the transformation is the expansion of wind to 7.1 GW, most of which is onshore. Flexible dispatchable power (coal+gas+hydro) totals 4.7 GW. Hence, when the wind blows hard we still have power to switch off and of course we have about 3.3 GW of interconnection with England. In 2010 we had 8.6 GW of generating capacity and today we have 13.9 GW generating capacity, that’s up 62%. The system is still safe and secure and expensive, testified by the fact that my lights are still on.

2020

The 2020 configuration assumes that all the 8.68 GW already consented wind is built (Figure 3). The future of the Longannet coal fired power plant is currently being discussed by its owners and the Scottish Government. Given the massive over capacity that we already have, it seems likely it will close down. This is probably Scotland’s cheapest electricity supply.

The two nuclear plants should still be operational. We will still have 4.4 GW of dispatchable power, 1.6 GW below the safe threshold. But 15.8 GW of wind operating above 9% capacity will cover that for most of the time, any shortfalls should be met by importing dispatchable power from England, but that will depend on how the capacity margin in England evolves. The reality will be that 2.07 GW of nuclear power will provide the stable system base load 24/7/365. When one of these plants is off line for scheduled or unscheduled maintenance we will be more heavily dependent upon imports. Unless of course Longannet coal is kept on permanent standby.

The problem therefore in 2020 is not so much risk of blackouts but what will happen to the vast surplus of power we will produce when the wind blows hard as it has been doing in recent days. In the UK as a whole, peak demand is always around 6 pm on a week day in winter and minimum demand is always at night at the weekend in Summer (Figure 4). The minimum is about 38% of peak, in Scotland, roughly 2.3 GW. Night time summer demand for electricity, therefore, may be almost met by our two nuclear power stations.

Figure 4 The pattern of UK electricity demand. Peak demand is always during a week day in winter at around 6 pm. Minimum demand is always at night during the weekend in Summer.

At this point we need to remind ourselves about how the renewable merit order and subsidy system works. In short, the producers get paid their elevated guaranteed price regardless of whether or not there is demand for the power. According to Prof. Ponton’s calculation we are on schedule to produce 6.1 TWh annual surplus of wind power [17.7 TWh operational+25 TWh consented -36.6 TWh total annual demand =6.1 TWh wind surplus]. To this needs to be added approximately 16 TWh of nuclear and hydro giving us a total annual surplus of 22 TWh. How is this surplus going to be used?

Exports

Plans are progressing to increase the interconnector capacity to England to 6 GW which is an interesting number since this is the same as Scotland’s peak demand. Part of “The Plan” is evidently for Scotland to export its surpluses. The snag is that when the wind blows hard it is often blowing hard in England and Europe too. At those times spot power prices are rock bottom and there is high chance that neighbouring countries will be gagging on surplus wind power at the same time. When the wind blows hard Scotland may be producing a 10 GW surplus that has nowhere to go.

Storage

The Scottish Government often talks fondly of the hydrogen economy where surplus renewable electricity may be used to make hydrogen, normally by the electrolysis of water. The trouble with this, which is conveniently ignored, is that in making the hydrogen about 30% of the renewable energy input is lost, with a further 30% lost on energy recovery when the hydrogen is combusted or used in a fuel cell (estimates vary according to whether or not waste heat is recovered and used). Very quickly, 50% of the expensive subsidised and paid for wind power is lost. This is a short cut to bankrupting the country.

Pumped hydro storage is a more feasible and scalable option and the Coire Glas scheme that has been approved but awaiting a final investment decision presents an ideal case study. In my post The Coire Glas pumped storage scheme – a massive but puny beast, I drew attention to how impotent Coire Glas would be in providing backup power to the UK. Let’s skin the cat another way at the Scottish scale.

Coire Glas will have storage capacity of 30 GWh. How many times would it have to be filled and emptied to store the 22 TWh surplus that Scotland is shaping up to produce?

22 TWh annual surplus / 30 GWh storage capacity = 733 cycles

With 50 hours generating capacity it is going to take about 1 week at optimum conditions to fill and then empty this massive beast. And so we are talking roughly 14 of these beasts (733 cycles / 52 weeks = 14.1 Coire Glas schemes required) to cope with the annual Scottish electricity surplus. This may sound feasible, but Coire Glas alone creates hydrology problems on the Lochs on the Great Glen that will act as the lower pumping reservoir. It is simply doubtful that Scotland will have 14 sites on the scale of Coire Glas that can each be filled and emptied 52 times each year without totally wrecking the hydrology of the lochs and river systems that are involved. If there is a concrete plan that shows how wind can be stored and delivered via pumped hydro storage then I’d like to see it.

Heat

Another option for consuming this surplus is to reconfigure the nation’s heating requirements away from natural gas to electric heating. Norway for example uses cheap hydro electric power as its main source of domestic and industrial heat. It’s just a pity that wind is currently one of the most expensive forms of electrical power that we have. Overproduction of expensive energy is quite simply a bad idea.

Conclusions

  • In 2010 Scotland had a self contained reliable diversified electricity supply system that created a dispatchable surplus that was exported to England.
  • Come 2020 the Scottish system will be dominated by non-dispatchable wind power.
  • When the wind does not blow Scotland will become an energy parasite dependent upon imports of dispatchable power from England, assuming that England has that dispatchable capacity to spare.
  • When the wind blows hard, Scotland will generate a vast wind power surplus that will have low / no value and that no one will want / be able to use. The only way to make this plan remotely sensible is to deploy large scale pumped hydro storage. A detailed feasible plan for which, as far as I am aware, is lacking.
  • The uncontrolled expansion of wind power that has effectively already caused a glut of non-dispatchable renewable electricity must surely undermine future development and deployment of marine renewables, some of which may have made more sense than wind.
  • If you are objecting to wind turbine power stations being erected on your hill or glen, you should make clear in your objection that the wind power being generated is surplus to Scotland’s requirement. Some of it may be used at home, some of it will be exported and much of it may simply be wasted. It seems likely that Scotland’s beautiful landscape is being wrecked in pursuit of an ideological, empty dream.
Dec 252014
 
 December 25, 2014  Posted by at 1:18 pm Finance Tagged with: , , , , , , , , ,  2 Responses »


Harris&Ewing President Hoover lights Nation’s Capital community Xmas tree Dec 24 1929

US Retailers May Only Just Meet Holiday Sales Forecasts (Reuters)
Oil Tanks On Surge In US Supply And Imports (CNBC)
Oil Slide ‘Turbocharging’ Airline Profits (CNBC)
Make No Mistake, the Oil Slump Is Going to Hurt the US Too (Katusa)
France Has Never Had This Many Unemployed People Before (Reuters)
Why Everyone Is About To Rush Into Subprime Mortgage Debt – Again (Zero Hedge)
UK Growth Revised Down As Current Account Deficit Soars (Guardian)
Italian Government Steps In To Save Giant Steel Plant (BBC)
Russia Claims To Have New Proof Ukraine Involved In Downing Of MH17 (AFP)
Putin Calls For Cap On Vodka Prices Amid Economic Crisis (BBC)
5 Reasons Not To Retire In The US (MarketWatch)
Are Americans Prepared For A Soviet Style Collapse? (Dmitry Orlov)
Supertrawlers To Be Banned Permanently From Australian Waters (Guardian)
Germans Balk At Plan For Wind Power Lines (NY Times)
How France Has Forgotten The Christmas Truce Soldiers (BBC)

But GDP grew at 5% in Q3?!

US Retailers May Only Just Meet Holiday Sales Forecasts (Reuters)

U.S. consumers have not turned out in force for the final shopping days before Christmas, suggesting that traditional retailers will just meet industry sales forecasts in a season marked by deep discounts and growing encroachment from online rivals led by Amazon. Super Saturday – the last pre-Christmas Saturday, which fell on Dec. 20 this year – failed to make up for spotty performance this season. That included a disappointing Black Friday, the day after the U.S. Thanksgiving holiday that is typically one of the busiest shopping days of the year. “The past weekend will not save this holiday season,” said Craig Johnson, president of the retail and consumer product-oriented private equity fund Customer Growth Partners. “But combined with online sales, it would certainly save the year from being a dismal one.” Johnson said if sales hold up in the next few days and the week after Christmas, retailers may finish close to his company’s November and December forecast of 3.4% growth in store and online sales.

He estimates that Super Saturday weekend sales, which include store and online, rose 2.5% to $42 billion this year. The National Retail Federation (NRF), the leading industry trade body, forecast a 4.1% rise in holiday sales this year, including online and store sales. The NRF is hoping to meet its expectations amid falling gasoline prices, lower U.S. unemployment and consumer spending which showed signs of increasing during the first two weeks of December. Promotions heated up in the past five days but that did not boost store traffic materially, said Keith Jelinek, senior managing director of FTI Consulting. Most retailers offered an additional 20-30% off on top of 30-40% discounts on a wide range of products, Reuters found during a series of visits to three dozen stores in Chicago over the weekend.

Analytics firm RetailNext, which tracks specialty stores and large footprint retailers, said sales dropped 8.9% over the weekend versus a year ago, and store traffic dipped 10.2%. However, customers who did hit the stores spent more. Specialty stores in the United States include chains like Best Buy and large footprint retailers include Wal-Mart and Target. “Even with this drop in growth, Super Saturday was still better compared to Black Friday,” said Shelley Kohan, vice president of retail consulting at RetailNext. “It generated a tad more in terms of sales on slightly less traffic.” Promotions earlier in November took a toll on in-store sales during the Thanksgiving weekend, when total spending fell by 11% from a year earlier.

Read more …

What a great time to increase imports!

Oil Tanks On Surge In US Supply And Imports (CNBC)

Oil futures plunged Wednesday on a government report showing a surge in supplies of U.S. oil and a record level of gasoline production. The U.S. is awash in oil, with record levels of production meeting a rising tide of imports. The U.S. Department of Energy said oil stocks rose by 7.26 million barrels, while analysts had expected a decline of 1.8 million barrels. West Texas Intermediate futures for February, already sliding, took another leg lower after the report, which also showed a 4.1 million barrel build in gasoline, more than six times the expected amount. WTI was off more than 3% to $55.40 per barrel, and Brent slid once more below $60 a barrel. “Refiners produced the highest amount of gasoline ever reported by the EIA — 9.92 million barrels per day,” noted Andrew Lipow, president of Lipow Oil Associates.

He said refiners produced the second-highest amount of distillate fuel ever, at 5.24 million barrels per day, second only to 5.26 million barrels a day in December 2013. Refineries were also running at a high rate, with utilization at 93.5%. “To be able to build crude inventories like that in the face of a 93.5% utilization rate is remarkable. Imports are also rebounding,” said John Kilduff of Again Capital. He said imports of crude rose to 8.3 million barrels per day from 7.1 million the previous week. “Imports were much higher than the market expected, and we saw it in Gulf Coast inventories,” said Lipow. U.S. production slipped slightly to 9.13 million barrels a day from 9.14 million barrels a day. “If I had to guess (on the increase in imports), it was Saudi barrels headed for the Gulf Coast as part of their shock and awe,” said Kilduff.

Read more …

We have to doubt this. Or at least, there’s more to it.

Oil Slide ‘Turbocharging’ Airline Profits (CNBC)

Airline profits are set to soar as oil prices remain suppressed when the big four are already flying high, aviation consultant and author Mark Gerchick told CNBC’s “Squawk Box” on Wednesday. “The bigger picture here is oil is turbocharging an industry that has already figured out how to make a profit at $100 a barrel of oil. It’s a boost, and it keeps on giving,” the former Department of Transportation official said. The cost of crude oil is down nearly 50% from highs touched in June.

Prior to the plummet in oil, airline companies had already become more focused on their bottom lines as they sought to pack planes in a so-called process of “densification,” Gerchick said. The focus on the high-end business traveler and fare increases have also changed the revenue picture, he added. There are few signs of a price war, as the four major players in the market — American Airlines, Delta, United, and Southwest Air — have all said they will not add capacity, he said. Gerchick also see little chance of new players entering the market in 2015.

Read more …

As noted a hundred times by now.

Make No Mistake, the Oil Slump Is Going to Hurt the US Too (Katusa)

If you only paid attention to the mainstream media, you’d be forgiven for thinking that the US is going to get away from the collapse in oil prices scot free. According to popular belief, America is even going to be a net winner from cheaper oil prices, because they will act like a tax cut for US consumers. Or so we are told. In reality, though, many of the jobs the US energy boom has created in the last few years are now at risk, and their loss could drag the economy into a recession. The view that cheaper oil automatically boosts US GDP is overly simplistic. It assumes that US consumers will spend the money they save at the pump on US-made goods rather than imports. And it assumes consumers won’t save some of this windfall rather than spending it.

Those are shaky enough. But the story that cheap fuel for our cars is good for us is also based on an even more dangerous assumption: that the price of oil won’t fall far enough to wipe out the US shale sector, or at least seriously impact the volume of US oil production. The nightmare for the US oil industry is that the only way that the market mechanism can eliminate the global oil glut—without a formal agreement between OPEC, Russia, and other producers to cut production—is if the price of oil falls below the “cash cost” of production, i.e., it reaches the price at which oil companies lose money on every single barrel they produce. If oil doesn’t sink below the cash cost of production, then we’ll have more of what we’re seeing now.

US shale producers, like oil companies the world over, are only going to continue to add to the global oil glut—now running at 2-4 million barrels per day—by keeping their existing wells going full tilt. True, oil would have to fall even further if it’s going to rebalance the oil market by bankrupting the world’s most marginal producers. But that’s what’s bound to happen if the oversupply continues. And because North American shale producers have relatively high cash costs (in the $30 range), the Saudis could very well succeed in making a big portion of US and Canadian oil production disappear, if they are determined to. In this scenario, the US is clearly headed for a recession, because the US owes nearly all the jobs that have been created in the last few years to the shale boom. All those related jobs in equipment, manufacturing, and transportation are also at stake. It’s no accident that all new jobs created since June 2009 have been in the five shale states, with Texas home to 40% of them.

Read more …

Bring on Le Pen.

France Has Never Had This Many Unemployed People Before (Reuters)

More people were unemployed in France in November than ever before, data showed on Wednesday, highlighting continued weak activity in the eurozone’s second-largest economy. The Labour Ministry said the jobless total in mainland France rose by 27,400 to 3.49m in November, a 0.8pc% increase over one month and 5.8pc over one year. The rise was sharpest among unemployed aged 50 or over, up 11pc on the year. President Francois Hollande has seen his popularity fall to the lowest ratings in French polling history, with a key factor being his failure to live up to promises to tackle unemployment.

The jobless increase in November was the third monthly gain in a row after a slight fall in unemployment in August. The French government had been counting on a pick-up in business activity in the second half but has cut its 2014 economic growth estimate to 0.4pc from 1pc previously after the economy stagnated in the first half. Data on Tuesday showed a slight rebound in consumer spending in November while the government confirmed its estimate of GDP growth at just 0.3pc in the third quarter of the year.

Read more …

“A lot of the uncertainty around the asset class has been taken away ..”

Why Everyone Is About To Rush Into Subprime Mortgage Debt – Again (Zero Hedge)

If there is one thing the investing public has ‘learned’ in the last few years, it is ‘no matter how bad the fundamentals, if it’s been working, buy moar of it’. And so, it is with almost certain confidence that we should expect a resurgent flood of yield-chasing muppetry into no more egregious idiocy than the subprime-mortgage-debt market. As Bloomberg reports, the subprime-slime-backed securities that were created in the years before the financial crisis in 2008, which marked the last time they were issued, have gained almost 12% this year, or six times more than junk-rated corporate debt, according to Barclays. As one money ‘manager’ proclaims, “a lot of the uncertainty around the asset class has been taken away.” Indeed, home prices will never go down ever again, right? (Just ignore this and this) As Bloomberg reports,

Remember when nobody wanted to touch U.S. subprime-mortgage debt? That’s just a distant memory as it delivers some of the bond market’s best returns. The securities that were created in the years before the financial crisis in 2008, which marked the last time they were issued, have gained almost 12% this year, or six times more than junk-rated corporate debt, according to Barclays Plc. After contributing to the collapse of Lehman Brothers Holdings Inc., bonds tied to the riskiest home loans have returned 75% since 2010, topping speculative-grade corporate debt for three straight years.

The reason…

“A lot of the uncertainty around the asset class has been taken away,” Tom Sontag, a money manager at Neuberger Berman Group LLC, which oversees about $250 billion, said by telephone from Chicago.

While almost 30% of the subprime mortgages tied to bonds are at least 60 days delinquent, the %age has fallen from as much as 41% in 2010, data compiled by Bloomberg show. In the broader market for mortgage securities without government backing, which also includes loans known as Alt-A and jumbo debt, the default rate has fallen to 23% from 30% in 2010.

So – because historical default rate trends (in a ZIRP/QE/no-foreclosure environment) has fallen – but remains high – we should back up the truck because all is forgiven on subprime debt. And sure enough, the ‘pitchers’ are out en masse… “get ’em while they’re hot, they’re lovely”

“It’s going away, there’s a dedicated buyer base and there’s strong fundamentals,” said Carl Bell, the Durham, North Carolina-based deputy chief investment officer at Amundi Smith Breeden, the U.S. unit of the money manager that oversees more than $1 trillion globally.

What could go wrong? Oh apart from FHFA’s Mel Watt enabling 3% downpayments and subsidized homes for the poor and needy… Four words – It’s different this time.

Read more …

Running out of women and children to squeeze dry?

UK Growth Revised Down As Current Account Deficit Soars (Guardian)

George Osborne’s hopes of using a strengthening economy as the springboard for victory in the general election next May have been dealt a double blow with news of weaker growth during 2013 and 2014 and one of the biggest current account deficits in the UK’s history. With Britain’s recovery from its worst ever recession set to dominate a tightly fought vote next spring, Labour seized on official figures showing it was unlikely that national output would expand this year by the 3% envisaged by the chancellor in the autumn statement. Osborne has claimed in recent weeks that a combination of stronger growth, falling unemployment and a smaller budget deficit have shown that the government’s plan is working and that sticking to the current course is essential.

But the Office for National Statistics said the economy’s performance through much of 2013 and 2014 had been less impressive than was first thought. It left growth unchanged at 0.7% in the third quarter of 2014, but revised down its estimates for the five previous quarters – cutting the annual growth rate in the year up to the third quarter from 3% to 2.6%. With fresh figures showing America’s economy expanding at an annual rate of 5% in the third quarter, it will now be touch and go whether Britain is the fastest growing of the leading G7 industrial nations in 2014. The data from the ONS added spice to the political battle over economic competence when it said gross domestic product per head – one measure of living standards – was rising, but the 0.6% increase in the third quarter left the measure 1.8% below its pre-recession peak.

An alternative measure of national wellbeing – net national disposable income – remained flat in the third quarter and was 5.6% below its pre-recession peak. The measure makes allowances for depreciation and for income generated in the UK that goes to overseas residents. Meanwhile, the UK’s current account – which measures trade in goods and services together with investment income and payments to multinational bodies – was in the red by £27bn in the July to September quarter. At 6% of gross domestic product, the current account deficit is now higher than it was during the so-called Lawson boom at the end of the 1980s, its previous peak.

Read more …

Nice double sided conundrum to have.

Italian Government Steps In To Save Giant Steel Plant (BBC)

The Italian government is intervening in the management of Europe’s biggest steel plant, in an attempt to reform the beleaguered business. A commissioner will be appointed to manage the site in Taranto and could have the task of preparing its sale. Ilva, which is a major employer in the southern Italy, has faced criticisms over its environmental record. Toxic emissions from the Ilva plant have been blamed for unusually high rates of cancer in the area. The privately-owned plant, Europe’s biggest in terms of output capacity, employs at least 14,000 people. Ilva has been making a loss for years and was placed in special administration last year.

Italy’s Prime Minister Matteo Renzi also committed the government to clearing up the polluted areas surrounding the plant, in order to protect children in Taranto, the coastal town in which Ilva is based. The European Commission said in October that the Tamburi area of the town in particular was contaminated and urged the government to take action. Mr Renzi said that the government would consider nationalising the plant and selling it on, if a buyer could be found who promised to protect jobs. “I forecast maximum state intervention of 36 months to clean up Ilva and relaunch it,” he told reporters. The international steel giant ArcellorMittal has reportedly expressed an interest in acquiring Ilva. The plant, owned by the Riva family, was partially closed in 2012 because of the high levels of pollution.

Read more …

Let’s get this solved once and for all.

Russia Claims To Have New Proof Ukraine Involved In Downing Of MH17 (AFP)

Russian investigators say they have new proof from a witness that a Ukrainian pilot fired a missile on the day of the Malaysia Airlines crash which killed 298 people, including 38 Australians. The witness, who was not named, worked at an airfield in the Ukrainian city of Dnipropetrovsk where he claimed to have seen a warplane take off on July 17 with air-to-air missiles and return without them. An Investigative Committee statement said the testimony of the man “is important proof that Ukrainian military was implicated in the crash of the Boeing-777”. Flight MH17 from Amsterdam to Kuala Lumpur was shot down over territory in eastern Ukraine controlled by pro-Russian separatists, who have been fighting Kiev forces since April.

Ukraine and the West accused Russia of supplying the rebels with a surface-to-air missile launcher, but Russia has issued several opposing theories, one of which involves a Ukrainian military jet allegedly seen next to the passenger jet. The witness was filmed by Russian tabloid Komsomolskaya Pravda with his back to the camera and even the back of his head blurred. He said he saw a Sukhoi-25 jet take off armed with air-to-air rockets and return to the base without them. “[The plane’s operator] could have launched them into the Boeing out of fear or revenge,” the witness said, identifying the pilot of the jet as having the surname Voloshin.

“Maybe he mistook it for another plane.” Komsomolskaya Pravda claimed the witness showed up at its office and that his identity checked out but did not identify him because his family was still in Ukraine. The Investigative Committee said the man could be enrolled in a witness protection program. There was no evidence previously that Russian investigators had launched an official probe into the crash, in which citizens from 11 countries died, but no Russians. Dutch authorities have been charged with establishing what brought down the plane and are reconstructing part of the aircraft as part of their probe. Preliminary findings indicate only that the plane broke apart due to damage that came from outside.

Read more …

Health issues. Russians are known for making lethal homebrew.

Putin Calls For Cap On Vodka Prices Amid Economic Crisis (BBC)

Russian President Vladimir Putin has ordered his government to curb rising vodka prices. Mr Putin, who has been hit by increasing economic woes, said that high prices encouraged the consumption of illegal and possibly unsafe alcohol. Russia’s currency, the rouble, has lost value recently due to falling oil prices and Western sanctions. The country’s former finance minister warned that Russia would enter recession next year. Mr Putin, who promotes a healthy lifestyle, asked “relevant agencies” to think about what he said, adding that the government should fight against the illegal trafficking of alcohol. According to a leading university study last year, 25% of Russian men die before reaching their mid-50s, Reuters reports. Alcohol was found to be a contributing factor in some of these early deaths. Since last year, the government-regulated minimum price of half a litre (17 oz) of vodka has increased by around 30% to 220 roubles ($4.10; £2.64), Reuters adds. It is not just vodka that has seen a price rise. Annual inflation in Russia currently stands at 9.4%.

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I can think of a lot more.

5 Reasons Not To Retire In The US (MarketWatch)

When it comes to retiring, more baby boomers are finding greener (and cheaper) pastures overseas. More than half a million retirees receive their Social Security benefits abroad, according to International Living, a monthly newsletter focusing on retiring overseas. The Social Security Administration currently sends 613,650 retirement-benefit payments outside the U.S., more than double the 242,128 benefit payments sent abroad in 2002. And even that data likely under-represents the actual number of Americans retired overseas, says Dan Prescher, 60, special projects editor of the newsletter. (International Living gets much of its financial support from advertisers who sell overseas real estate to retirees, and other services for those wishing to relocate.)

“San Diego has some of the best weather in the world but most people can’t afford to live there,” Prescher says. He and his wife, Suzan Haskins, live in Cotacachi, Ecuador, and say most ex-pats there have monthly expenses (including rent) of $1,500 to $1,800. “We don’t need heat, we don’t need air conditioning and our electricity bill is $24 a month,” Haskins, 58, says. They live on the equator at 8,000 feet above sea level, so the sun rises at 6 a.m. and goes down at 6 p.m. every day, so it rarely gets too warm or too cold. Haskins adds that they live in a small town where crime isn’t a major concern for them. Their Internet costs about $28 a month and that includes a landline phone.

Of course, boomers abroad who want to work part-time or operate a business still have to pay income taxes — even if they live in the Cayman Islands or St. Kitts and Nevis, which have no personal income taxes. “The U.S. is one of the few countries on the planet that taxes its citizens on income no matter where in the world it’s earned, so we file our U.S. taxes every year, as all U.S. citizens must no matter where they live,” Prescher adds. In fact, some 1,000 U.S. citizens and green-card holders gave up their citizenship in the first quarter of this year to avoid taxes and move abroad, even though acquiring citizenship in another country can often be a complex and expensive process. Here are 5 reasons not to retire in Florida, or anywhere else in the U.S.

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We know the answer to that.

Are Americans Prepared For A Soviet Style Collapse? (Dmitry Orlov)

If the social and financial structure around you collapsed tomorrow, as it did for many people during the fall of the Soviet Union, are you prepared to survive and even prosper? In my latest interview with best selling author Dmitry Orlov we discuss lifestyle and how your lifestyle decisions may dramatically impact how your family will fare if times get tough. Dmitry left Russia with his family in 1976 and settled in the Boston area to pursue an education in computer science and linguistics. Along the way Dmitry realized he was trapped in the traditional American pursuit of a career. He was working day and night to make money to pay for the car and city condo and all the trappings of success. He needed the car and condo and all the trappings of business to keep making money. The same vicious cycle most Americans face every day.

Well Dmitry gave it all up for a life on a sailboat full of travel and freedom. In our interview, I passed along some of your questions as well as my own to get Dmitry’s perspectives. As you probably know if you follow Dmitry or the ClubOrlov blog, Dmitry brings an interesting perspective to the whole lifestyle and survival dialog. In this interview, Dmitry shares his thoughts on why he believes that Russian citizens were far better prepared for a collapse than the typical American citizen. His logic is sound and it definitely makes you question…. “what would my family do in a collapse, faced with”: No lights, No running water, No flushing toilets, No trash removal, No gas at the gas pumps, No government services, No public transportation Strangely enough, quite inadvertently, the Russian citizens may have been far better off to handle such a collapse, and here is why…..

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Decades late.

Supertrawlers To Be Banned Permanently From Australian Waters (Guardian)

Supertrawlers will be permanently banned from Australian waters, the federal government announced on Wednesday. The move follows the temporary bans on supertrawlers imposed by the Labor government two years ago and re-endorsed by Tony Abbott in March. The first ban expired in November and the second was up for review in April. The parliamentary secretary for agriculture, Richard Colbeck, said the government would stop vessels longer than 130m from fishing in Australian waters. This definition of supertrawler does not take into account the processing capacity of a vessel, which proponents of the ban say is just as critical as the size of the vessel.

“This government will introduce regulations under the Fisheries Management Act to give effect to this decision,” Colbeck said in a statement released on Wednesday afternoon. “This decision will have policy effect immediately.” Colbeck said the government “has consulted widely and accepts the legitimate concerns of many in the community, including those involved in recreational and commercial fishing”. “The government is determined that Australian fisheries management remain among the best in the world,” the statement said. Labor banned supertrawlers, or large freezer-factory vessels, after outcry from the public. The Stop the Supertrawler petition has nearly 63,000 signatures.

“Supertrawlers are large freezer-factory fishing trawlers that threaten our unique marine life and fisheries, and the recreational fishing, commercial fishing and tourism industries that rely on these,” the petition said. “Supertrawlers are part of a global problem that has led to the devastation of the world’s fisheries, marine life and local livelihoods, and we don’t want that kind of fishing in Australia.” Abbott addressed the House of Representatives in March, saying: “The supertrawler was banned from Australian waters … it was banned with the support of members on this side of the house. It was banned. It will stay banned.”

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Green is turning dark grey in Germany.

Germans Balk At Plan For Wind Power Lines (NY Times)

Germans have welcomed solar panels glinting on their rooftops and windmills looming over their fields, and they have even put up with a doubling of their electric bills. But enthusiasm for all things green appears to have reached a limit with a plan to string high-voltage transmission lines along the outskirts of cities like Fulda in the center of the country. Dozens of protest groups have sprung up over the past year along the 500-mile path of the project, SuedLink, one of four high-voltage direct current lines that are to carry wind-generated power from north to south. The lines are described as essential to the success of the country’s pivot away from nuclear and coal power and toward mostly renewable energy. But nearly a year into the plans, the SuedLink project has set off an outbreak of not-in-my-backyard syndrome that threatens to disrupt a linchpin of Germany’s commitment to a lower-carbon future.

People like Johannes Lange, who said he had supported Germany’s green efforts for decades, have sprung into action. “I have been following energy policy for 30 years and have gone along with everything,” said Mr. Lange, a self-employed music teacher from Fulda’s eastern Kämmerzell district. “The moment that I heard they wanted to build this behind my house, I thought, enough!” Germany has embraced environmental protection policies since the 1970s, and has been a leader in efforts to move away from fossil fuels toward an energy system that will reduce its carbon emissions — its contribution to a global effort to slow the rise in temperatures that scientists say is already affecting the planet. Businesses have been wary of the growing costs that the policies have imposed on them, but citizens have been largely stoic. They have protested when the government seemed to waver in its commitment, even as the cost of power for an average family of three has climbed to €85 a month, about $103, from €41 since 2000, according to government statistics.

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Great story from the director of Joyeux Noël.

How France Has Forgotten The Christmas Truce Soldiers (BBC)

Memories of World War One can be seen everywhere in the quiet part of the Artois region in northern France where I was born. The war left a trail of cemeteries with well-tended lawns in the midst of fields. Crops now grow around the edges of these spaces where 20-year-old kids from Australia, New Zealand, Canada, Great Britain and other countries lie. Forty nations buried their sons in the earth of my homeland. While still a kid, I learnt the names and flags of these countries. I was able to revise my geography while learning about the history of this war. Every autumn, my father and I collected artillery shells which had been brought to the surface by ploughing. We carried them in our arms and laid them down at the entrance to our fields. A Renault 4 from the Prefecture came to load them up like potatoes and spirit them away.

Researchers have estimated that the earth will continue to give its own unique account of the Great War for a further seven centuries. Every year, kids still try to unscrew these shells covered in dirt and rust to see what is inside. As a result, they lose a hand, their eyesight or even their lives. The survivors of these unplanned explosions are treated as “war casualties” and receive a pension based on 1914 rates and converted into today’s euros. Every 11 November, my schoolmates and I sang the Marseillaise under the icy stare of a statue infantryman perched on a column engraved with names, each of which we had to read out loud. None of the houses we inhabited were built before the 1920s and none of our furniture pre-dated that decade. Our grandmothers’ wardrobes were no more. Sometimes, one of these houses would subside as it was built over an old tunnel dug by soldiers.

These incidents were treated as war damage and the family was granted government compensation. 1914-1918 was more than just a date written in my school exercise book. It provided the backdrop to my childhood. I later realised that this war was the most important event of the 20th Century. It carried the seeds of the next war while heralding the Soviet era and American hegemony since Europe had pressed the self-destruct button. In 1992, I learned from Yves Buffetaut’s book, Battles of Flanders and Artois, that enemy soldiers on opposing sides fraternised with each other over the Christmas period of 1914. I read that some French soldiers applauded a Bavarian tenor, their enemy a German, on Christmas Eve while others played football with the Germans the next day.

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Oct 282014
 
 October 28, 2014  Posted by at 11:21 am Finance Tagged with: , , , , , , , , , ,  4 Responses »


Arthur Siegel Zoot suit, business district, Detroit, Michigan Feb 1942

Fears Grow Over QE’s Toxic Legacy (FT)
Draghi QE May Help Europe’s Rich Get Richer (Bloomberg)
Quantitative Easing Is Like “Treating Cancer With Aspirin” (Tim Price)
ECB Stress Tests Vastly Understate Risk Of Deflation And Leverage (AEP)
Under Full Capital Rules, 36 EU Banks Would Have Failed Test (Reuters)
3 Reasons Why You Should Expect A 30% Market Meltdown (MarketWatch)
US Banks See Worst Outflow of Money in ETF Since 2009 (Bloomberg)
The Great Recession Put Us in a Hole. Are We Out Yet? (Bloomberg)
China Fake Invoice Evidence Serve To Inflate Trade Data (Bloomberg)
Riksbank Cuts Key Rate to Zero as Deflation Fight Deepens (Bloomberg)
IMF Warns Gulf Countries Of Spending Squeeze (CNBC)
Shell Seeks 5 More Years for Arctic Oil Drilling Drive (Bloomberg)
Wind Farms Can ‘Never’ Be Relied Upon To Deliver UK Energy Security (Telegraph)
Equal Footing For Women At Work? Not Till 2095 (CNBC)
Lloyds Bank Confirms 9,000 Job Losses And Branch Closures As Profit Rises (BBC)
IRS Seizes 100s Of Perfectly Legal Bank Accounts, Refuses To Return Money (RT)
Bulk Of Americans Abroad Want To Give Up Citizenship (CNBC)
Tapering, Exiting, or Just Punting? (Jim Kunstler)
MH17 Might Have Been Shot Down From Air – Chief Dutch Investigator (RT)
MH17 Chief Investigator: No Actionable Evidence Yet In Probe (Spiegel)
Having Babies New Sex Ed Goal as Danes Face Infertility Epidemic (Bloomberg)
Medical Journal To Governors: You’re Wrong About Ebola Quarantine (NPR)

QE blows up the financial system instead of saving it. But some people and corporations will be much richer after.

Fears Grow Over QE’s Toxic Legacy (Tracy Alloway/FT)

“Bankruptcy? Repossession? Charge-offs? Buy the car YOU deserve,” says the banner at the top of the Washington Auto Credit website. A stock photo of a woman with a beaming smile is overlaid with the promise of “100% guaranteed credit approval”. On Wall Street they are smiling too, salivating over the prospect of borrowers taking Washington AutoCredit up on its enticing offer of auto financing. Every car loan advanced to a high-risk, subprime borrower can be bundled into bonds that are then sold on to yield-hungry investors. These subprime auto “asset-backed securities”, or ABS, have, like a host of other risky assets, been beneficiaries of six years of quantitative easing by the US Federal Reserve, which is due to come to an end this week. When the Fed began asset purchases in late 2008 the premise was simple: unleash a tidal wave of liquidity to force nervous investors to move out of safe investments and into riskier assets.

It is hard to argue that the tactic did not work; half a decade of low interest rates and QE appears to have sparked an intense scrum for riskier securities as investors struggle to make their return targets. Wall Street’s securitization machine has kicked back into gear to churn out bonds that package together corporate loans, commercial mortgages and, of course, subprime auto loans. At $359 billion sold last year, according to Dealogic data, issuance of junk-rated corporate bonds is at a record as companies take advantage of low rates to refinance debt and investors clamor to buy it. The question now is whether the rebound in sales of risky assets will prove to be a toxic legacy of QE in a similar way that the popularity of subprime mortgage-backed securities was partly spurred by years of low interest rates before the financial crisis. “QE has flooded the system with cash and you’re really competing with an entity with an unlimited balance sheet,” says Manish Kapoor of West Wheelock Capital. “This has enhanced the search for yield and caused risk appetites to increase.”

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That’s the goal.

Draghi QE May Help Europe’s Rich Get Richer (Bloomberg)

European Central Bank President Mario Draghi, fighting a deflation threat in the euro region, may need to confront a concern more familiar to Americans: income inequality. With interest rates almost at zero, Draghi is moving into asset purchases to lift inflation to the ECB’s target. The more he nears the kind of tools deployed by the Federal Reserve, the Bank of England and the Bank of Japan, the more he risks making the rich richer, said economists including Nobel laureate Joseph Stiglitz. In the U.S., the gap is rising between the incomes of the wealthy, whose financial holdings become more valuable via central bank purchases, and the poor. While monetary authorities’ foray into bond-buying is intended to stabilize economic conditions and underpin a real recovery, policy makers and economists are increasingly asking whether one cost may be wider income gaps – in Europe as well as the U.S.

“The more you use these unusual, even unprecedented monetary tools, the greater is the possibility of unintended consequences, of which contributing to inequality is one,” said William White, former head of the Bank for International Settlements’ monetary and economic department. “If you have all these underlying problems of too much debt and a broken banking system, to say that we can use monetary policy to deal with underlying real structural problems is a dangerous illusion.” The divide between rich and poor became part of a widespread public debate following the publication in English this year of Thomas Piketty’s “Capital in the Twenty-First Century.” He posited that capitalism may permit the wealthy to pull ahead of the rest of society at ever-faster rates.

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“As James Grant recently observed, it’s quite remarkable how, thus far, savers in particular have largely suffered in silence.”

Quantitative Easing Is Like “Treating Cancer With Aspirin” (Tim Price)

Shortly before leaving the Fed this year, Ben Bernanke rather pompously declared that Quantitative Easing “works in practice, but it doesn’t work in theory.” There is, of course, no counter-factual. We’ll never know what might have happened if the world’s central banks had not thrown trillions of dollars at the banking system, and instead let the free market work its magic on an overleveraged financial system. But to suggest credibly that QE has worked, we first have to agree on a definition of what “work” means, and on what problem QE was meant to solve. If the objective of QE was to drive down longer term interest rates, given that short term rates were already at zero, then we would have to concede that in this somewhat narrow context, QE has “worked”. But we doubt whether that objective was front and centre for those people – we could variously call them “savers”, “investors”, or “honest workers”. As James Grant recently observed, it’s quite remarkable how, thus far, savers in particular have largely suffered in silence.

So while QE has “succeeded” in driving down interest rates, the problem isn’t that interest rates were / are too high. Quite the reverse: interest rates are clearly too low – at least for savers. All the way out to 3-year maturities, investors in German government bonds, for example, are now faced with negative interest rates. And still they’re buying. This isn’t monetary policy success; this is madness. We think the QE debate should be reframed: has QE done anything to reform an economic and monetary system urgently in need of restructuring? We think the answer, self-evidently, is “No”. The answer is also “No” to the question: “Can you solve a crisis of too much indebtedness by increasing debt and suppressing interest rates?” The toxic combination of more credit creation and global financial repression will merely make the ultimate endgame that much more spectacular.

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Good summary of – part of – the reasons the tests are such a joke. “… the 39 largest European banks would alone need up to €450bn in fresh capital”. That’s so close to the Swiss estimates I quoted on Sunday, it sounds quite credible. And so different from the €9.5 billion cited by the test results, it’s ridiculous. Off by a factor of 50…

ECB Stress Tests Vastly Understate Risk Of Deflation And Leverage (AEP)

The eurozone’s long-awaited stress test for banks has been overtaken by powerful deflationary forces and greatly understates the risk of high debt leverage in a crisis, a chorus of financial experts has warned. George Magnus, senior advisor to UBS, said it was a “huge omission” for the European Central Bank to ignore the risk of deflation, given the profoundly corrosive effects that it can have on bank solvency. “Most of the eurozone periphery is already in deflation. They can’t just leave this out of their health check. It is a matter of basic due diligence,” he said. The ECB’s most extreme “adverse scenario” included a drop in inflation to 1pc this year, but the rate has already fallen far below this to 0.3pc, or almost zero once tax effects are stripped out. Prices have fallen over the past six months in roughly half of the currency bloc, and the proportion of goods in the EMU price basket in deflation has jumped to 31pc. “The scenario of deflation is not there, because indeed we don’t consider that deflation is going to happen,” said the ECB’s vice-president, Vitor Constancio.

The ECB had vowed to be tough in its first real test as Europe’s new super-regulator, promising to restore credibility after the fiasco of earlier efforts by the European Banking Authority in 2010 and 2011. The aim is to clean up the financial system once and for all, hoping that this will create more traction for the ECB’s mix of stimulus measures. Yet the bank has to walk a fine line since tough love would risk a further contraction of lending, and possibly a fresh crisis. The results released over the weekend suggest the ECB has opted for safety. Just 13 banks must raise fresh capital, mostly minor lenders in Italy and peripheral countries. They have nine months to find €9.5bn, a trivial sum set against the €22 trillion balance sheet of the lending system. Europe’s banks will have set aside an extra €48bn in provisions. Non-performing loans have jumped by €136bn.

Independent experts say the ECB has greatly under-played the threat of a serious shock. A study by Sachsa Steffen, from the European School of Management (ESMT) in Berlin, and Viral Acharya, at the Stern School of Business in New York, calculated that the 39 largest European banks would alone need up to €450bn in fresh capital. “The major flaw in the ECB test is that they don’t allow for systemic risk where there are forced sales and feedback effects, which is what happened in the Lehman crisis,” said Professor Steffen. Their study looked at levels of leverage rather than risk-weighted assets, which are subject to the discretion of national regulators and can easily be fudged. Most Club Med banks can defer tax assets, for example.

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That’s just Basel, you could add a whole lot more criteria.

Under Full Capital Rules, 36 EU Banks Would Have Failed Test (Reuters)

Europe’s banking health check has shown countries and lenders are implementing global capital rules at vastly different speeds, and 36 companies would have failed if new capital rules were fully applied. The euro zone is lagging behind countries outside the bloc in implementing the Basel III capital rules that are due to come into full force in 2019, potentially adding another challenge for the European Central Bank when it takes over supervision of euro zone lenders next month. “On a fully loaded basis, many banks have only passed the stress test by very thin margins or could be challenged in meeting the requirements, so they will be expected to do more,” said Carola Schuler, managing director for banking at ratings agency Moody’s. Some 25 European banks failed a health check of whether they could withstand a recession, and another 11 would have failed if the full Basel III rules had been applied, according to data from the European Banking Authority released on Sunday.

Europe had gained credibility, said Karen Petrou, co-founder of Federal Financial Analytics in Washington. But a similar exercise by the U.S. Federal Reserve was still tougher, among others because it requires banks to fully load Basel. “It’s still an easier and different one than the Fed stress test in many, many respects,” she said. “The Fed’s test is very qualitative. You can get all the numbers right and still fail.” The wider capital gap with fully implemented Basel rules could put pressure on more banks to improve the amount and quality of their capital, potentially impacting their profitability, growth plans and dividend payouts. Banks failed if they had common equity of 5.5% or less under a 2014/16 recession scenario. The EBA’s “stress test” was based on transitional capital rules, which vary by country, depending on how quickly they are phasing in rules. But for the first time, so-called ‘fully loaded’ Basel III ratios – applying all the new global rules – were released across Europe’s top 130 banks for analysts and investors to compare their capital strength.

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30% seems low.

3 Reasons Why You Should Expect A 30% Market Meltdown (MarketWatch)

In a commentary for MarketWatch just over two months ago, I predicted that the U.S. stock faced at least a 20% correction. The signals now point to a 30% downturn. This recent market volatility is just the beginning. The declines that corrected prices more than 10% in both the Russell 2000 Index and the Nasdaq Composite Index encompassed the majority of the market, and these stocks have begun their descent. Meanwhile, both the Dow Jones Industrial Average, containing 30 stocks, and the S&P 500 have yet to correct 10%, but historically they are the last to fall. My proprietary indicator called the CCT gave an ominous sell signal in the summer. Since then, the sell signal has increased in intensity and entered a 30% correction zone. The CCT measures several internal market components. It is a leading indicator that actually can be quantified.

The strongest component is the duration of buying versus the duration of selling. A healthy bull market sees mostly buying, indicated by the NYSE tick. The longer the buying persists with NYSE Tick readings in the plus column, the stronger the share price advances. But what happens when prices increase and the duration of the plus-column NYSE tick is less than the duration of the minus tick? This is a divergence, indicating lessening volume dedicated to the buying of a wide array of stock sectors. This duration buying has been lessening since July. Every rally shows less broad participation in all sectors of NYSE stocks. This is what happens in bear markets. A second component of the CCT focuses on the NYSE “big block” buying and selling in isolated segments of time. This is different than the duration component, as it measures isolated situations of what fund managers are doing.

A strong bullish market has numerous big blocks of buying. A print on the NYSE tick in excess of +1000 signifies fund buying by numerous entities, which accompanies a healthy bull market. But what happens when prices are climbing but no +1000 NYSE ticks are printed? This is a divergence indicating lack of interest by fund managers to commit large amounts of cash. Prices are getting ahead of buying interest, and that divergence cannot persist. We saw this phenomenon frequently in September as the S&P 500 recorded all-time highs. This also occurs in bear markets. A third and final component is the cumulative number of the NYSE tick. Each day I record the amount of total plus tick, less the amount of minus tick, on the NYSE. A bull market has a tight correlation of a up day for stock prices corresponding to a plus day in the cumulative NYSE tick.

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Why interest rates must and will rise.

US Banks See Worst Outflow of Money in ETF Since 2009 (Bloomberg)

The Financial Select Sector SPDR (XLF), an exchange-traded fund targeting banks and investment firms, had the biggest withdrawal last week since 2009 amid concern that low interest rates and market swings will hurt profits. Investors pulled $913.4 million from the $17.5 billion ETF, whose top holdings include Berkshire Hathaway, Wells Fargo and JPMorgan Chase, a shift that turned its flow of funds negative for the year. About 143 million shares of the ETF have been borrowed and sold to speculate on declines, the most since June 2012, according to exchange data compiled by Bloomberg. Banks have waited for years for higher rates and more robust trading to boost revenue from lending and market-making.

Weaker-than-expected global growth could prompt the U.S. central bank to slow the pace of eventual interest-rate increases, Federal Reserve Vice Chairman Stanley Fischer said Oct. 11. The severity of market swings this month also boosts the risk that banks will incur losses while facilitating client bets, and it may slow mergers and acquisitions. “Investors should have less exposure to financials than the broader market because we don’t think the prospects are that strong,” said Todd Rosenbluth, director of mutual-fund and ETF research at S&P Capital IQ in New York, referring to interest rates. If the Fed keeps rates low, “the upside in these financials is taken away,” said Charles Peabody, an analyst at Portales Partners LLC in New York.

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Is that even a question?

The Great Recession Put Us in a Hole. Are We Out Yet? (Bloomberg)

In October 2007, U.S. stocks were hitting an all-time high, jobs were plentiful and homes were expensive. Two months later, the Great Recession began to eviscerate the economy, ultimately sucking $10 trillion out of U.S. stocks, collapsing a housing bubble and pushing the unemployment rate to 10%. A lot of talk of financial irresponsibility – people living beyond their means – followed. Seven years later, most Americans have put their finances in order, reducing all kinds of consumer debt. So it’s no small insult, after the injury of the recession, that many aren’t being rewarded for smarter spending. Americans are making a lot less money and own fewer assets, the Federal Reserve said last month, even as stocks reach new highs. Housing prices recovered, though they’re still 13% below 2007 levels. Fewer Americans own houses they can’t afford – sending rents up 16%, to an average of $1,100 per apartment in metro areas.

On the bright side, housing’s collapse taught consumers about the dangers of debt. Americans have shed $1.5 trillion in mortgage debt and $139.4 billion in credit card and other revolving debt over the last six years. They were pushed by tighter credit rules and enticed by the chance to refinance at lower rates. But they also saved more diligently. The U.S. savings rate has doubled since 2007, to 5.4% in September. Educational loans are up, by $2,500 for the median family paying off student loans. But that’s prompted by tuition increases and a surge of people going back to school. Post-secondary enrollment jumped 15%, or 2.8 million, from 2007 to 2010, according to the U.S. Department of Education. Jobs may be coming back, but good jobs are still scarce. More than 7 million people are working part-time jobs when they’d prefer a full-time gig, 57% more than in 2007. And more than 3% of adults have left the workforce entirely since 2007, according to the U.S. labor force participation rate.

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What else are they faking?

China Fake Invoice Evidence Serve To Inflate Trade Data (Bloomberg)

The gap between China’s reported exports to Hong Kong and the territory’s imports from the mainland widened in September to the most this year, suggesting fake export-invoicing is again skewing China’s trade data. China recorded $1.56 of exports to Hong Kong last month for every $1 in imports Hong Kong registered, leading to a $13.5 billion difference, according to government data compiled by Bloomberg. Hong Kong’s imports from China climbed 5.5% from a year earlier to $24.1 billion, figures showed yesterday; China’s exports to Hong Kong surged 34% to $37.6 billion, according to mainland data on Oct. 13.

While China’s government has strict rules on importing capital, those seeking to exploit yuan appreciation can evade the limit by disguising money inflows as payment for goods exported to foreign countries or territories, especially Hong Kong. The latest trade mismatch coincided with renewed appreciation of China’s currency, leading analysts at banks and brokerages including Everbright Securities Co. and Australia & New Zealand Banking Group Ltd. to question the export surge. “This is definitely another important piece of evidence of over-invoicing exports to Hong Kong to facilitate money inflow into China,” said Shen Jianguang, chief Asia economist at Mizuho Securities. in Hong Kong. “So we shouldn’t be too optimistic about recent export data from China.” Doubts over the data raise broader concerns, as a surge in exports was believed to have underpinned economic growth in the third quarter. Shen said the economic outlook is “challenging” and more easing is “necessary.”

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Krugman wins again.

Riksbank Cuts Key Rate to Zero as Deflation Fight Deepens (Bloomberg)

Sweden’s central bank ventured into uncharted territory as it cut its main interest rate to a record low and delayed tightening plans into 2016 in a bid to jolt the largest Nordic economy out of a deflationary spiral. “The Swedish economy is relatively strong and economic activity is continuing to improve,” the Stockholm-based bank said in a statement. “But inflation is too low.” The benchmark repo rate was lowered to zero from 0.25%, the third reduction in less than a year. The bank was seen cutting to 0.1% in a Bloomberg survey of 17 economists. Only two economists had predicted a cut to zero. The Riksbank said it won’t raise rates until mid-2016 compared with a September forecast for the end of 2015. The “assessment is that the repo rate needs to remain at this level until inflation clearly picks up,” the Riksbank said in a statement. “It is assessed as appropriate to slowly begin raising the repo rate in the middle of 2016.” The move follows calls from former board members, politicians and economists to do more to prevent deflation from taking hold.

Consumer prices have dropped in seven of the past nine months and inflation has stayed below the bank’s 2% target for almost three years. Governor Stefan Ingves, who’s also chairman of the Basel Committee on Banking Supervision, has been reluctant to lower rates out of fear of stoking a build-up in consumer debt. Ingves raised the benchmark rate quickly after the financial crisis showed signs of easing in 2010. His reluctance since then to cut rates prompted Nobel Laureate Paul Krugman in April to accuse the Riksbank of a “sadomonetarist” approach to policy he said risked creating a Japan-like deflation trap. Now, Ingves is shaping Swedish policy to reflect moves elsewhere and bringing rates in line with those at the European Central Bank, whose benchmark is 0.05 percent, and the U.S. Federal Reserve, which has held its key rate close to zero since 2008. The ECB and Fed have also expanded their balance sheets through asset purchases to further stimulate growth.

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Don’t think they need the IMF to tell them they need to keep their young people satisfied or else.

IMF Warns Gulf Countries Of Spending Squeeze (CNBC)

Oil exporters in the crude-rich Gulf need to rationalize spending amid a deteriorating global economic outlook, the International Monetary Fund has warned. “In the GCC (Gulf Co-operation Council), years of fast growth since the global financial crisis, rising asset prices, rapid credit growth in some countries, and accommodative global monetary conditions call for a return to fiscal consolidation,” the IMF said in its biannual economic outlook for the Middle East and Central Asia. But the fund also cautioned against immediate policy responses, especially given that GCC exporters were were well-placed to handle the current volatility in global energy markets. “It is not likely to have an effect on economic activity this year or the next. We don’t think that it would make sense to have a knee-jerk reaction,” Masood Ahmed, Director, Middle East and Central Asia Department at the IMF, told CNBC. “It’s important to gradually moderate the base of fiscal spending”. The fund expected the GCC oil exporters’ economies to grow by 4.4% in 2014, accelerating to 4.5% in 2015.

A sharp decline in oil prices over the past month has prompted fierce debate about potential policy responses from Gulf governments. Over the weekend, Kuwaiti Finance Minister Anas Al-Saleh Gulf Arab joined those calling for cuts in spending to cover the shortfall in income. Global prices fell to four-year lows earlier this month, putting at risk abundant fiscal surpluses and savings generated in recent years. OPEC members are due to meet on November 27 in Vienna. According to Mohamed Lahouel, Chief Economist at the Department of Economic Development in Dubai, current or lower oil prices for a period of around four months would elicit spark fiscal decisions on the part of regional government as they scramble to safeguard capital gains. Not all industry experts agree that low oil prices are here to stay. Mohamed Al-Mady, CEO of Saudi Basic Industries (SABIC), one of the world’s largest petrochemical companies, told reporters on Sunday in Riyadh the recent declines would prove to be temporary, and that demand growth was firmly underpinned.

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Make sure to make them pay a sh*tload of money for the extension, see if they still want it.

Shell Seeks 5 More Years for Arctic Oil Drilling Drive (Bloomberg)

Royal Dutch Shell is asking the Obama administration for five more years to explore for oil off Alaska’s coast, saying set backs and legal delays may push the start of drilling past the 2017 expiration of some leases. Shell, which has spent eight years and $6 billion to search for oil in the Arctic’s Beaufort and Chukchi seas, said in letter to the Interior Department that “prudent” exploration before leases expire is now “severely challenged.” “Despite Shell’s best efforts and demonstrated diligence, circumstances beyond Shell’s control have prevented, and are continuing to prevent, Shell from completing even the first exploration well in either area,” Peter Slaiby, vice president of Shell Alaska, wrote to the regional office of the Bureau of Safety and Environmental Enforcement. Shell’s plans to produce oil in the Arctic were set back in late 2012 by mishaps involving a drilling rig and spill containment system, and the company has been sued by environmental groups seeking to block the Arctic exploration.

The Hague-based company halted operations in 2012 to repair equipment and hasn’t resumed its maritime operations off Alaska’s northern coast. The July 10 letter from the company, released yesterday by the environmental group Oceana that got it after a public records request, seeks to pause Shell’s leases for five years. That would, in effect, extend the deadline to drill on its Beaufort and Chukchi leases. Leases issued by the government for the right to drill for oil in the Arctic expire in 10 years unless the holder can show significant progress toward development. Shell has left open the possibility of returning to Arctic drilling as soon as next year. Spokesman Curtis Smith said that timeline remains on the table. “We’re taking a methodical approach to a potential 2015 program,” Smith said in an e-mail. The U.S. has ordered that any drilling in the Arctic end each year before Oct. 1, when ice starts forming.

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Not in centralized grid systems.

Wind Farms Can ‘Never’ Be Relied Upon To Deliver UK Energy Security (Telegraph)

Wind farms can never be relied upon to keep the lights on in Britain because there are long periods each winter in which they produce barely any power, according to a new report by the Adam Smith Institute. The huge variation in wind farms’ power output means they cannot be counted on to produce energy when needed, and an equivalent amount of generation from traditional fossil fuel plants will be needed as back-up, the study finds. Wind farm proponents often claim that the intermittent technology can be relied upon because the wind is always blowing somewhere in the UK. But the report finds that a 10GW fleet of wind farms across the UK could “guarantee” to provide less than two per cent of its maximum output, because “long gaps in significant wind production occur in all seasons”. Modelling the likely output from the 10GW fleet found that for 20 weeks in a typical year the wind farms would generate less than a fifth (2GW) of their maximum power, and for nine weeks it would be less than a tenth (1GW).

Output would exceed 9GW, or 90% of the potential, for just 17 hours. Britain currently has more than 4,500 onshore wind turbines with a maximum power-generating capacity of 7.5GW, and is expected to easily surpass 10 GW by 2020 as part of Government efforts to tackle climate change. It is widely recognised that variable wind speeds result in actual power output significantly below the maximum level – on average between 25 and 30 per cent, according to Government data. However, the report from the Adam Smith Institute found that such average figures were “extremely misleading about the amount of power wind farms can be relied up to provide”, because their output was actually “extremely volatile”. “Each winter has periods where wind generation is negligible for several days,” the report’s author, Capell Aris, said. Periods of calm in winter would require either significant energy storage to be developed – an option not readily available – or an equivalent amount of conventional fossil fuel plants to be built.

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No, really, the World Economic Forum pays people generous salaries to look into their crystal ball and tell us what the world will look like in 80 years time.

Equal Footing For Women At Work? Not Till 2095 (CNBC)

Women may not achieve equal footing in the workplace until 2095, according to the World Economic Forum’s (WEF) new ‘Global Gender Gap’ report. The economic participation and opportunity gap between the sexes stands at 60% worldwide, an improvement of only 4 percentage points since WEF measurements began in 2006. The economic sub-index reflects three measurements: the difference between genders in labor force participation rates; wage equality; and the female-to-male ratio across a range of professions. The organization estimates it will take 81 years for the world to close this gap completely.

Two sub-Saharan African nations took top spots on the economic sub index: Burundi and Malawi ranked first and third respectively. Burundi is one of the few countries in the world to adopt a gender quota for its legislature – an attempt to promote the participation of women in politics. “Much of the progress on gender equality over the last ten years has come from more women entering politics and the workforce. In the case of politics, globally, there are now 26% more female parliamentarians and 50% more female ministers than nine years ago,” said Saadia Zahidi, head of the gender parity program at the World Economic Forum and lead author of the report.

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Recovery.

Lloyds Bank Confirms 9,000 Job Losses And Branch Closures As Profit Rises (BBC)

Lloyds Banking Group has confirmed 9,000 job losses and the closure of 150 branches over the next three years. The group, which operates the Lloyds Bank, Halifax and Bank of Scotland brands, reported pre-tax profits of £1.61bn for the nine months to 30 September. The group is setting aside another £900m to cover possible payouts for the PPI mis-selling scandal. The scandal has cost Lloyds, in total, about £11bn. Fines for the Libor rate-rigging scandal have topped £200m. The government still holds a 25% stake in the bank, but has reduced its holding from about 39% through two separate share sales since September last year.

Earlier this year, Lloyds spun off the TSB bank as a separate business to appease European Union competition authorities. The group also said it would invest £1bn in digital technology as more customers switch to mobile banking. But the banking group has returned to profitability under chief executive Antonio Horta-Osorio. On Monday, shares in Lloyds Banking Group fell 1.8% after the European Banking Authority’s results revealed that the bank only narrowly passed the test.

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Not what the Founding Fathers had in mind for the land of the free.

IRS Seizes 100s Of Perfectly Legal Bank Accounts, Refuses To Return Money (RT)

The Internal Revenue Service has been seizing bank accounts belonging to small businesses and individuals who regularly made deposits of less than $10,000, but broke no laws. And the government is refusing to return all the money taken. The practice, called civil asset forfeiture, allows IRS agents to seize property they suspect of being tied to a crime, even if no charges are filed, and their agency is allowed to keep a share of whatever is forfeited, the New York Times reported. It’s designed to catch drug traffickers, racketeers and terrorists by tracking cash deposits under $10,000, which is the threshold for when banks are federally required to report activity to the IRS under the Bank Secrecy Act. It is not illegal to deposit less than $10,000 in cash, unless it is specifically done to avoid triggering the federal reporting requirement, known as structuring.

Thus, banks are required to report any suspicious transactions to authorities, including patterns of deposits below that threshold.“Of course, these patterns are also exhibited by small businesses like bodegas and family restaurants whose cash-on-hand is only insured up to $10,000, and whose owners are wary of what would be lost in the case of a robbery or a fire,” the Examiner noted. Carole Hinders, a victim of civil asset forfeiture, owns a cash-only Mexican restaurant in Iowa. Last year, the IRS seized her checking account and the nearly $33,000 in it. She told the Times she did not know of the federal reporting requirement for suspicious transactions, and that she thought she was doing everyone a favor by reducing their paperwork.

“My mom had told me if you keep your deposits under $10,000, the bank avoids paperwork,” she said.“I didn’t actually think it had anything to do with the I.R.S.” And her bank wasn’t allowed to tell her that her habits could be reported to the government. If customers ask about structuring their deposits, banks are allowed to give them a federal pamphlet.“We’re not allowed to tell them anything,” JoLynn Van Steenwyk, the fraud and security manager for Hinders’ bank, told the Times. Last year, banks filed more than 700,000 suspicious activity reports, according to the Times. The median amount seized by the IRS. was $34,000, according to an analysis by the Institute for Justice, while legal costs can easily mount to $20,000 or more, meaning most account owners can’t afford to fight the government for their money.

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Is it any wonder? This may be the only way to get rid of the IRS.

Bulk Of Americans Abroad Want To Give Up Citizenship (CNBC)

A staggering number of Americans residing abroad are tempted to give up their U.S. passports in the wake of tougher asset-disclosure rules under the Foreign Account Tax Compliance Act (FATCA), according to a new survey. The survey by financial consultancy deVere Group asked expatriate Americans around the world “Would you consider voluntarily relinquishing your U.S. citizenship due to the impact of FATCA?” 73% of respondents answered that they had “actively considered it”, “are thinking about it” or “have explored the options of it.” On the other hand, 16% said they would not consider relinquishing their U.S. citizenship, and 11% did not know. The survey carried out in September 2014 polled almost 420 Americans living in Hong Kong, China, Indonesia, Thailand, Philippines, Japan, India, UK, UAE and South Africa. FATCA, which came into effect on July 1, requires foreign banks, investment funds and insurers to hand over information to the IRS about accounts with more than $50,000 held by Americans.

The controversial tax law is intended to detect tax evasion by U.S. citizens via assets and accounts held offshore. “For long-term retired U.S. expats, of which I am one, who are paying significant U.S. taxes, the value of U.S. citizenship often comes to mind,” a U.S. citizen residing in Bangkok told CNBC. “What do we get in return for our U.S. passport? Only three things in my opinion,” said the 69-year-old, who requested to remain anonymous. “First of all, a passport that is extremely convenient for worldwide travel, second we can vote in U.S state and national elections and third we can pay taxes on both our U.S. and foreign income. That’s it. When you add the new FATCA policies, it obviously adds more thought to the question: Is it worth keeping?” It’s alarming that nearly three quarters of Americans abroad said that they are going to or have thought about giving up their U.S. citizenship, said Nigel Green, founder and chief executive of deVere Group.

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” … what happens now to the regularly issued treasury bonds and bills? Do they just sit in an accordian file on Jack Lew’s desk next to his Barack Obama bobblehead?”

Tapering, Exiting, or Just Punting? (Jim Kunstler)

Oh, that sound you hear this morning is the distant roar of European equity markets puking after the latest round of phony bank “stress tests” — another exercise in pretend by financial authorities who understand, at least, the bottomless credulity of the news media and the complete mystification of the general public in monetary matters. I rather expect that roar to grow Niagara-like as US markets catch the urge to upchuck violently. Problem is, unlike Ebola victims, they can’t be quarantined. The end of the “taper” is upon us like the night of the hunter, conveniently just a week before the US election. If the Federal Reserve is politicized, the indoctrination must have been conducted by the Three Stooges. America’s central bank never did explain the difference between tapering and exiting their purchases of US treasury paper. I guess that’s because it has other interventionary tricks up its sleeves.

Three-card Monte with reverse repos… ventures into direct stock purchases… the setting up of new Maiden Lane type companies for scarfing up securities with that piquant dead carp aroma. Who knows what’s next? It’s amazing what you can do with money in a desperate polity with a few dozen lawyers. Of course, there is the solemn matter as to what happens now to the regularly issued treasury bonds and bills? Do they just sit in an accordian file on Jack Lew’s desk next to his Barack Obama bobblehead? The Russians don’t want them. The Chinese are already stuck with trillions they would like to unload for more gold. Frightened European one-percenters may want to park some cash in American paper to avoid bail-ins and other confiscations already rehearsed over there — but could that amount to more than a paltry few billion a month at the most?

What do the stock markets do without up to $85 billion a month (peak QE) sloshing around looking for dark pools to settle in? Can US companies keep the markets levitated by buying back their own shares like snakes eating their tails? Isn’t that basically over and done? And exactly how do interest rates stay suppressed when only a few French tax refugees want to buy American debt? I don’t think anybody knows the answer to these questions and the scenarios are too abstruse for the people who get paid for supposedly writing learned commentary in the sclerotic remnants of the press.

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The chief investogator can’t get his hands on the evidence?!

MH17 Might Have Been Shot Down From Air – Chief Dutch Investigator (RT)

The chief Dutch prosecutor investigating the MH17 downing in eastern Ukraine does not exclude the possibility that the aircraft might have been shot down from air, Der Spiegel reported. Intelligence to support this was presented by Moscow in July. The chief investigator with the Dutch National Prosecutors’ Office Fred Westerbeke said in an interview with the German magazine Der Spiegel published on Monday that his team is open to the theory that another plane shot down the Malaysian airliner. Following the downing of the Malaysian Airlines MH17 flight in July that killed almost 300 people, Russia’s Defense Ministry released military monitoring data, which showed a Kiev military jet tracking the MH17 plane shortly before the crash. No explanation was given by Kiev as to why the military plane was flying so close to a passenger aircraft. Neither Ukraine, nor Western states have officially accepted such a possibility.

Westerbeke said that the Dutch investigators are preparing an official request for Moscow’s assistance since Russia is not part of the international investigation team. Westerbeke added that the investigators will specifically ask for the radar data suggesting that a Kiev military jet was flying near the passenger plane right before the catastrophe. “Going by the intelligence available, it is my opinion that a shooting down by a surface to air missile remains the most likely scenario. But we are not closing our eyes to the possibility that things might have happened differently,” he elaborated. In his interview to the German media, Westerbeke also called on the US to release proof that supports its claims.

“We remain in contact with the United States in order to receive satellite photos,” he said. German’s foreign intelligence agency reportedly also believes that local militia shot down Malaysia Airlines flight MH17, according to Der Spiegel. The media report claimed the Bundesnachrichtendienst (BND) president Gerhard Schindler provided “ample evidence to back up his case, including satellite images and diverse photo evidence,” to the Bundestag in early October. However, the Dutch prosecutor stated that he is “not aware of the specific images in question”. “The problem is that there are many different satellite images. Some can be found on the Internet, whereas others originate from foreign intelligence services.”

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MH17 Chief Investigator: No Actionable Evidence Yet In Probe (Spiegel)

SPIEGEL: Germany’s foreign intelligence agency, the Bundesnachrichtendienst (BND), believes that pro-Russian separatists shot down the aircraft with surface-to-air missiles. A short time ago, several members of the German parliament were presented with relevant satellite images. Are you familiar with these photos?

Westerbeke: Unfortunately we are not aware of the specific images in question. The problem is that there are many different satellite images. Some can be found on the Internet, whereas others originate from foreign intelligence services.

SPIEGEL: High-resolution images – those from US spy satellites, for example – could play a decisive role in the investigation. Have the Americans provided you with those images?

Westerbeke: We are not certain whether we already have everything or if there are more — information that is possibly even more specific. In any case, what we do have is insufficient for drawing any conclusions. We remain in contact with the United States in order to receive satellite photos.

SPIEGEL: So you’re saying there hasn’t been any watertight evidence so far?

Westerbeke: No. If you read the newspapers, though, they suggest it has always been obvious what happened to the airplane and who is responsible. But if we in fact do want to try the perpetrators in court, then we will need evidence and more than a recorded phone call from the Internet or photos from the crash site. That’s why we are considering several scenarios and not just one.

SPIEGEL: Moscow has been spreading its own version for some time now, namely that the passenger jet was shot down by a Ukrainian fighter jet. Do you believe such a scenario is possible?

Westerbeke: Going by the intelligence available, it is my opinion that a shooting down by a surface to air missile remains the most likely scenario. But we are not closing our eyes to the possibility that things might have happened differently.

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It gets serious: “20% of men and 12% of women who want to have children cannot”.

Having Babies New Sex Ed Goal as Danes Face Infertility Epidemic (Bloomberg)

Sex education in Denmark is about to shift focus after fertility rates dropped to the lowest in almost three decades. After years of teaching kids how to use contraceptives, Sex and Society, the Nordic country’s biggest provider of sex education materials for schools, has changed its curriculum to encourage having babies under the rubric: “This is how you have children!” Infertility is considered “an epidemic” in Denmark, said Bjarne Christensen, secretary general of the Copenhagen-based organization. “We see more and more couples needing to get assisted fertility treatment. We see a lot of people who don’t succeed in having children.” Denmark’s fertility rate is at its lowest in more than a quarter of a century, with one in 10 children conceived only after treatment. Health professionals are urging the government to do more to address the declining birth rate and prevent it becoming a bigger demographic problem. Declining fertility is affecting demographics across Europe, where the birthrate has hardly grown for two decades.

The trend has profound effects not only on individuals but also on the economy and the outlook for standards of life, with fewer young people supporting older, retired populations. The European Commission says it considers the growing gap between the number of young and old citizens one of the region’s biggest challenges. According to Christensen at Sex and Society, the issue needs to be addressed at the school level if there is to be change. “We hope to raise a discussion in society about how to advise young people,” said Christensen, whose group helps organize an annual Sex Week to focus schools’ attention on the subject. “It’s a problem that fertility in Denmark is reduced.” Sex and Society’s new focus, unveiled on Sunday, includes information for school children explaining what fertility is, when the best times to have children may be, and what the effects of aging are. [..] 20% of men and 12% of women who want to have children cannot, according to Dansk Fertilitetsselskab, a professional organization for health providers and researchers.

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Stunning. You’d think there are contingency plans, but they seem to make it all up one step at a time.

Medical Journal To Governors: You’re Wrong About Ebola Quarantine (NPR)

The usually staid New England Journal of Medicine is blasting the decision of some states to quarantine returning Ebola health care workers. In an editorial the NEJM describes the quarantines as unfair, unwise and “more destructive than beneficial.” In their words, “We think the governors have it wrong.” The editors say the policy could undermine efforts to contain the international outbreak by discouraging American medical professionals from volunteering in West Africa. “The way we are going to control this epidemic is with source control and that’s going to happen in West Africa, we hope. In order to do that we need people on the ground in West Africa,” says Dr. Jeffrey Drazen, editor-in-chief of the journal. Speaking to Goats and Soda, he says it doesn’t make any sense to “imprison” healthcare workers for three weeks after they’ve been treating Ebola patients. The editorial explains his rationale, arguing that healthcare workers who monitor their own temperatures daily would be able to detect the onset of Ebola before they become contagious and thus before they pose any public health threat to their home communities:

“The sensitive blood polymerase-chain-reaction (PCR) test for Ebola is often negative on the day when fever or other symptoms begin and only becomes reliably positive 2 to 3 days after symptom onset. This point is supported by the fact that of the nurses caring for Thomas Eric Duncan, the man who died from Ebola virus disease in Texas in October, only those who cared for him at the end of his life, when the number of virions he was shedding was likely to be very high, became infected. Notably, Duncan’s family members who were living in the same household for days as he was at the start of his illness did not become infected.”

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