Lewis Hine A heavy load for an old woman. Lafayette Street below Astor Place, NYC 1912
“it’s only after you’ve lost everything that you are free to do endless, unlimited QE. After all, what’s the downside?”
“one area though where Abenomics has undoubtedly failed is that the Bank of Japan has not achieved its 2% core inflation target. When the BoJ started QE in April 2013 they stated that they wanted to hit their 2% inflation target for core CPI at the earliest possible time, with a time horizon of about two years?. Well that is now! Yet most key measures of CPI inflation are set to crash to, or even below, zero in the months ahead as the estimated 2% effect of last year’s VAT hike is set to drop out of the yoy calculations. Core CPI inflation that the BoJ targets, which excludes just fresh food, has been running at 2% yoy in February (March data out this Friday).
But I prefer to focus of the readily available CPI ex food and energy (known in Japan as core core CPI), which for some peculiar reason does not get followed that closely by the market. At the same time as the March national CPI is published, April’s CPI data for the Tokyo area also will be released. The headline and core (ex fresh food) CPI will be just above zero yoy. But the core core Tokyo CPI (ex food and energy) is likely to have dipped below zero as VAT drops out as the rate in March was already only running at 1.7%.[..] Regular readers will know that I am pretty horrified by the global Quantitative floodgates that have been opened since the 2008 Great Recession.
Once an emergency measure of dubious effect, it is now a never ending stream of confetti money being thrown around the world to inflate asset prices. QE has now become the policy variable of first resort. Personally I think this will all end very badly. But why, I often asked, am I so much more positive about the Japanese outcome than I am the US, UK or eurozone? To be sure I would agree with the Japan sceptics. But I am bullish because I believe that the Japanese fiscal situation is so bad that the authorities had no option but to begin their QQE in April 2013 and there is indeed, as Peter Tasker says, no turning back. Russell Jones is also correct that the BoJ will become more and more aggressive and inventive for the simple reason that Japan is bust.
“The market is in a position where it’s not just going to be a 10% correction.”
After years of forecasting gloom and doom for stocks only to watch them surge, Marc Faber is sounding the alarm as loud as ever. Faber, editor of The Gloom, Boom & Doom Report, believes that stocks in the U.S. and in many places around the globe are in a central bank-fueled bubble. And while he can’t put a time on when that perceived bubble will pop, he prognosticates that once it does, the outcome will be horrifying. “For the last two years, I’ve been thinking that U.S. stocks are due for a correction,” Faber said Wednesday on CNBC’s “Trading Nation.” “But I always say a bubble is a bubble, and if there’s no correction, the market will go up, and one day it will go down, big time.”
“The market is in a position where it’s not just going to be a 10% correction. Maybe it first goes up a bit further, but when it comes, it will be 30% or 40% minimum!” Faber asserted. A 40% decline from Wednesday’s close would take the S&P 500 to 1,264, a level that hasn’t been seen since the early days of 2012. Faber says low yields and stimulative central bank policies around the world have led to a condition in which “all assets are grossly overvalued … and eventually this will unwind and cause some problems.” Despite his massively bearish call, Faber said he’s “not short the market yet,” since he doesn’t know how high stocks could go in the interim. Still, he makes clear that “I’m not interested to buy momentum, I’m interested to buy value.”
“U.K. taxpayers sunk about $1.5 trillion into banks in 2008 and 2009 to prop up the nation’s failing system..” Of banks that collected many billions in fines since.
Whatever the outcome of Britain’s election next week, the outlook for the country’s banks is worsening. Almost seven years since the industry received the biggest taxpayer bailout in history, public confidence in banks is near an all-time low and lenders’ efforts to boost profit are being frustrated by investigations into alleged currency and interest rate-rigging. Since the coalition government took power in 2010, U.K. bank stocks have lost 7%. Their U.S. counterparts have returned 46%. “You can hardly believe we are now seven years into this crisis, and we’ve still got billions in fines to come and virtually none of the major banks predicting decent returns for at least another three to four years,” said Ed Firth at Macquarie. “If you told us that in 2007, we just wouldn’t have believed it.”
The industry’s prospects look to be getting worse as both major political parties distance themselves from the City, London’s financial district, before the May 7 election. The Bank of England is preparing harsher stress tests this year that may force firms to bolster capital buffers and new rules require expensive firewalls to be created around consumer operations. A levy on banks’ balance sheets has been increased eight times since 2010. U.K. taxpayers sunk about $1.5 trillion into banks in 2008 and 2009 to prop up the nation’s failing system, and still own 79% of money-losing RBS and a fifth of Lloyds. Before the election, the tarnished reputation of the industry has taken another battering with HSBC embroiled in allegations it aided tax evasion. The Asian-focused lender said last week it may leave London because of rising tax and regulatory costs and Standard Chartered may join them.
“In 2004, the U.S. side had assets double those of China and net income equal to 339%; now those respective numbers are 71.6% and 50.8%..”
China’s banks are taking over the world, or at least pushing their U.S. counterparts out of the leadership role. Bank earnings this week in the world’s second largest economy paint a dour picture for American financial institutions, according to analyst Dick Bove at Rafferty Capital Markets. “The Chinese government is now following a policy to allow its banks to expand faster. It has reduced their required reserve ratios,” Rafferty’s vice president of equity research said in a note to clients. “The United States continues to follow a policy to shrink the biggest banks in this country.”
The picture gets especially ugly when comparing the “Big Four” U.S. banks—JPMorgan, Citigroup, Bank of America and Wells Fargo—to their Chinese counterparts, the Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of China. In 2004, the U.S. side had assets double those of China and net income equal to 339%; now those respective numbers are 71.6% and 50.8%, according to Bove. That precipitous slide comes as direct result of regulators trying to hamstring banks through excessive regulation, even though the four institutions in question have managed to gain a historically high share of the U.S. industry. In fact, the top five now control 45% of the entire industry’s assets, according to SNL Financial (the list also includes U.S. Bancorp).
Even so, Bove said U.S. bank operations are being confined through tighter regulations, such as those from the Dodd-Frank provisions. “The fact that U.S. banks are unable to lend as much as they did historically as a% of capital is not good for the U.S. economy,” he said. “Moreover, there are growing signs that the liquidity that characterized U.S. financial markets is being harmed by current policy.” Despite the strongest earnings of any sector in the S&P 500—a 16.1% annualized gain in the first quarter for financials—banks stocks are struggling, collectively down about 1.8%. Bove said that’s no coincidence. He also worries that the implementation of the Asian Infrastructure Investment Bank—essentially a development fund that will provide capital to developing Asian economies to which the U.S. does not belong—is another shot against U.S. international finance standing.
Angela Palin: “Her southbound trips usually ended in the Pirin Mountains in Bulgaria, from where she could see Greece..”
Last week, hopes of an honest compromise between Athens and its international creditors rested on a meeting between Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel on the sidelines of an emergency European Union summit on immigration. In her 10th year at the helm of Germany, the low-key East German physicist – with patience and persistence, skill in tactical maneuvering, and in-depth knowledge of the key European issues and the role of her country – has emerged as the uncontested protagonist of the European stage. It is ironic that, to a great extent, Merkel owes her prominence to Greece. As she said in a speech in 2012 (mentioned in Alan Crawford and Tony Czuczka’s biography “Angela Merkel: A Chancellorship Forged in Crisis”), as a young woman she would spend her summers traveling all over that part of the Eastern bloc where she was allowed access.
Her southbound trips usually ended in the Pirin Mountains in Bulgaria, from where she could see Greece, just a few kilometers away, and wished that one day she would be able to visit. If she sensed that one day she would come to the country as an honored guest, it is less likely she believed that she would be treated more or less like a conqueror. Before the Greek crisis, the German chancellor had no strategic vision for Europe. After its outbreak, she had to cook up a basic recipe: austerity and structural reform as a means of adapting Europe to a globalized world, mechanisms for supporting indebted countries with strict conditionality and no option for debt mutualization, and the involvement of the IMF.
For many, this is an ineffective and unjust policy which places the lion’s share of the adjustment burden on the countries of Europe’s south, yet it has prevailed, becoming the action that determines every reaction. Speaking with high-ranking officials in Greece and Germany, Kathimerini attempts to trace the evolution of bilateral relations in the Merkel era and how the chancellor emerged from the shadow of Helmut Kohl to step into the limelight of European developments.
Hollow talk: “(Is) the euro zone prepared for eventualities, the answer to that is: ‘yes’.”
Greece’s government signaled the biggest concessions so far as talks with lenders on a cash-for-reforms package started in earnest on Thursday, but tried to assure leftist supporters it had not abandoned its anti-austerity principles. Prime Minister Alexis Tsipras’s three-month-old government is under heavy pressure at home and abroad to reach an agreement with European and IMF lenders to avert a national bankruptcy. A new poll showed over three-quarters of Greeks feel Athens must strike a deal at any cost to stay in the euro. An enlarged team of Greek negotiators began talks with the so-called Brussels Group representing the euro zone, the IMF and the ECB to discuss which reforms Greece will turn into legislation rapidly in exchange for aid.
The talks are expected to continue through the May Day holiday weekend until Sunday, with Tsipras willing to step in to speed things up if necessary, a Greek official said. In a sign of seriousness, both sides agreed on a news blackout at the meeting, a euro zone official said. Greece wants an interim deal by next week, hoping this will allow the ECB to ease liquidity restrictions before a €750 million payment to the IMF falls due on May 12. Athens has suggested it will struggle to pay the installment. Before that, it also has to repay €200 million to the IMF by May 6, although this is expected to be less of a problem. The head of the Eurogroup, Jeroen Dijsselbloem, said at a meeting with members of the Dutch parliament that the bloc was prepared for any outcome. Asked whether there was a “plan B” should Greece default or be forced out of the euro zone, he said: “(Is) the euro zone prepared for eventualities, the answer to that is: ‘yes’.”
Curiously leading from the FT.
The Greek government was struggling on Thursday to complete payments to more than 2 million pensioners after claiming that a “technical hitch” had delayed an earlier disbursement. Elderly Athenians waited at branches of the National Bank of Greece, the state-controlled lender handling the bulk of pension payments, which are staggered over several days. “Normally I only withdraw half the money at the end of the month, but today I’m taking it all,” said Sotiria Zlatini, 75, a former civil servant. “There are so many rumors going round because of the government’s problems and what happened two days ago.”
The left-wing Syriza-led government scrambled to pay pensions and public sector salaries in February and March after failing to reach agreement with international lenders on unlocking €7.2 billion of bailout aid. On Tuesday, the main state social security fund, IKA, delayed pension payments by almost eight hours. The heavily loss-making fund relies on a monthly subsidy from the budget to be able to cover its obligations. “I went to the ATM in the morning before going to the supermarket but the money wasn’t there… I went back at eight in the evening feeling quite anxious, but it had arrived,” said Socrates Kambitoglou, a retired civil engineer.
Dimitris Stratoulis, deputy minister for social security, said a technical problem with the interbank payment system had caused the delay. Payments were made normally on Wednesday, said a senior Greek banker. But an official with knowledge of the government’s cash position denied there had been a technical hitch. He said the payments were held up because the state pension funds “were still missing several hundred million euros on Tuesday morning”. Another official said inflows of €500 million on Wednesday had eased the situation and €300 million was due to be paid on Thursday. “We’re probably going to make it this month,” he said.
Draghi blows the bubble so hard he may have to stop?!
A constant supply of strong economic data has come out of the euro zone this month, just weeks after the European Central Bank President Mario Draghi launched of a much-anticipated bond-buying plan. So strong, in fact, that analysts are expecting that the ECB’s quantitative easing program might be over sooner than originally thought. Draghi’s original plan was to maintain the asset purchase program until the end of September 2016, or until there is a “sustained adjustment in path of inflation”. The central banker even expressed his surprise at last month’s Governing Council meeting when questioned on the potential of an early exit from QE, but investors are also suggesting he may not be faced with much of a choice.
Since the March launch of the €60 billion-a-month program, loans to the private sector in the euro area, a gauge of economic health, have started growing again, ECB data released this week showed. Retail sales in the region have seen a revival, as a dip in February was preceded by four successive monthly increases. Meanwhile German unemployment plummeted to a 24-year low and the euro zone ended four months of deflation in April, official data revealed on Thursday. With unemployment falling and wages starting to pick up in some parts of the currency area, consumer spending will also likely rise during 2015.
This record jobless data from Europe’s largest economy could put the September 2016 QE deadline into question, but not until later in the year, analysts suggest. “Compared to a year ago, the number of persons registered as unemployed has declined by 2.9 million people, indicating that the trend in labor market improvement remains firm,” said chief euro zone economist at Pantheon Economics, Claus Vistesen. “The German unemployment rate is currently at its lowest level since 1991 raising the risk of wage pressures, which could also make life difficult for the ECB in terms of continuing QE, but this is unlikely to become a story for the market until the end of Q3 at the earliest.
Good story on a guy who isn’t done with either Washington or New York.
Bradley Birkenfeld was released from federal prison in August 2012 after serving 2Ω years for his role as a Swiss banker hiding millions of dollars for wealthy American clients. Five weeks later, he found himself in the kitchen of a small rental house in Raymond, New Hampshire. At that moment, Birkenfeld was an ex-con. He was out of work, infamous in a famously discreet profession, and probably unemployable as a private banker anywhere. But then his lawyer walked into the room, carrying a check from the U.S. Treasury to Birkenfeld for $104 million minus taxes. On the face was a picture of the Statue of Liberty. It was Birkenfeld’s cut as a whistleblower of the massive settlement his former employer the Swiss bank UBS had paid to the United States government in a settlement for helping Americans dodge taxes.
As Birkenfeld signed the check, he was transformed from convicted felon to government-made multimillionaire. “It was vindication,” Birkenfeld said. “I am glowing. I love it.” Today, Birkenfeld has a new rental house by the ocean in New Hampshire, two Porsches, and a collection of pricy vintage hockey gear to display in his own Boston Bruins luxury box. He’s made charitable contributions in his community. And he’s planning to open a sports museum. You’d think he’d be happy. But Birkenfeld, 50, a big man with a brash style and a temper, isn’t done with the U.S. Department of Justice. He’s on a quest, he said, to force the government to explain why it was so aggressive in prosecuting him, but let nearly everyone else involved in the scam get off with light penalties or none at all.
Now Birkenfeld is telling his story exclusively to CNBC. Wealthy, out of prison and soon to be removed from federal probation, he says he’s now free to explain how he came to be the man who ended the tradition of bank secrecy and got rich in the process. The reverberations from Birkenfeld’s disclosures have been titanic, playing out on a global stage. The United States in 2009 forced UBS to pay a $780 million penalty and admit it conspired to defraud the United States by impeding the IRS from obtaining information on American taxpayers hiding money in Switzerland. In 2014, banking giant Credit Suisse pleaded guilty and said it would pay $2.6 billion in penalties. American investigators soon followed the trail of hidden money to banks in Israel, India and around the world.
“The real Social Security crisis is that the government does not have the money to redeem its IOUs.”
Social Security and Medicare are under attack from Wall Street, conservatives, and free market economists. The claims are that these programs are unaffordable and that the programs can be run more efficiently and at less cost if privatized. The programs are disparaged as “entitlements.” The word has come to imply that entitled people are getting something at great cost to everyone else. Indeed, entitlements have become conflated with welfare. In fact, Social Security and Medicare are financed by an earmarked payroll tax paid by employees. (Economists regard the part of the payroll tax that is paid by employers as part of the employee’s wage.)
According to the Social Security and Medicare trustees, Social Security as presently configured can pay full promised benefits for the next two decades and with current payroll tax and demographic trends can pay 75% of benefits thereafter. Medicare can pay full benefits for 12 more years and 90% of promised benefits thereafter. It makes sense to look ahead–something that democracies seldom do–but there is no current crisis. The Carter administration did look ahead and put in place a series of future increases in the payroll tax sufficient to keep the programs in the black for several decades into the future. Shortly thereafter in 1981 there was a claim that there was a short-term financing problem.
The National Commission on Social Security Reform was created. Alan Greenspan was appointed chairman, and the commission is known as the Greenspan Commission. What the commission did was to accelerate in time the payroll tax increases that were already in place. In my opinion, this was done in order to reduce projected federal budget deficits that concerned Wall Street and Republicans. The consequence of the accelerated payroll tax increases is that over the next decades the programs accrued large surpluses in the trillions of dollars that the federal government spent on other programs, substituting for the surplus payroll revenues non-marketable Treasury IOUs to Social Security and Medicare.
Far from entitlements worsening the federal deficit, entitlement surpluses have reduced it. The real Social Security crisis is that the government does not have the money to redeem its IOUs. The government, of course, will print money to bail out the banks’ uncovered casino bets, but not to bail out the elderly from the theft of their funds. The government has wasted trillions of dollars on wars that have enriched the military/security complex by killing, maiming, and displacing millions of peoples in seven countries, but Washington “cannot afford” Social Security and Medicare. Representing the people is not something “our” representatives do. They are too busy representing a handful of private interest groups such as the financial sector, the military/security complex, and agribusiness.
Entertaining and then some.
The cost of flying a MiG fighter in Russia, buying kidneys in Iran, prostitutes in Ukraine and rhinoplasty in S. Korea are just a few of the most popular Google requests worldwide, a new map shows. It does give some weird insights into the countries. Fixr.com, a cost-estimating website has put together a map of the world with the most-Googled things in each country, using the autocomplete formula of “How much does * cost in [x country].” The search results turned out to be hilarious and informative, and gave a peek into humanity’s cost obsessions per country. “Looking at some of the most popular Google searches throughout the World reveals some cultural differences, but also many key similarities. It also provides insights into the sometimes strange things people think about when they are alone,” says fixr.com website.
Russians are most interested in “How much does it cost to fly a MiG [military aircraft] in Russia?” Iranians are eager to sell or to buy kidneys, while the South Koreans are obsessed with their appearance and fixated on rhinoplasty (nose plastic surgery) costs. The Chinese, Apple’s biggest iPhone market, desire iPhones, of course. On Tuesday, Apple said it sold more iPhones in China than in the US. The cost of a prostitute is the most Googled demand in a range of countries, such as in Brazil, Ukraine, Bulgaria, Hong Kong, Colombia and Latvia. Slaves crop up in Mauritania, diamonds shine in Sierra Leone and cocaine fires up Honduras, Chile and Taiwan – these are some of the most Googled and weird demands in each of these countries. Why Japanese people want watermelons or Armenians are obsessed with carpets is as yet a mystery.
When choaos backfires on the empire…
If Syrian President Bashar al-Assad meets the same fate as Libya’s Muammar Gaddafi or Iraq’s Saddam Hussein, much of Official Washington would rush out to some chic watering hole to celebrate – one more “bad guy” down, one more “regime change” notch on the belt. But the day after Damascus falls could mark the beginning of the end for the American Republic. As Syria would descend into even bloodier chaos – with an Al-Qaeda affiliate or its more violent spin-off, the Islamic State, the only real powers left – the first instinct of American politicians and pundits would be to cast blame, most likely at President Barack Obama for not having intervened more aggressively earlier.
A favorite myth of Official Washington is that Syrian “moderates” would have prevailed if only Obama had bombed the Syrian military and provided sophisticated weapons to the rebels. Though no such “moderate” rebel movement ever existed – at least not in any significant numbers – that reality is ignored by all the “smart people” of Washington. It is simply too good a talking point to surrender. The truth is that Obama was right when he told New York Times columnist Thomas L. Friedman in August 2014 that the notion of a “moderate” rebel force that could achieve much was “always … a fantasy.”
As much fun as the “who lost Syria” finger-pointing would be, it would soon give way to the horror of what would likely unfold in Syria with either Al-Qaeda’s Nusra Front or the spin-off Islamic State in charge – or possibly a coalition of the two with Al-Qaeda using its new base to plot terror attacks on the West while the Islamic State engaged in its favorite pastime, those YouTube decapitations of infidels – Alawites, Shiites, Christians, even some descendants of the survivors from Turkey’s Armenian genocide a century ago who fled to Syria for safety.
Such a spectacle would be hard for the world to watch and there would be demands on President Obama or his successor to “do something.” But realistic options would be few, with a shattered and scattered Syrian army no longer a viable force capable of driving the terrorists from power. The remaining option would be to send in the American military, perhaps with some European allies, to try to dislodge Al-Qaeda and/or the Islamic State. But the prospects for success would be slim. The goal of conquering Syria – and possibly re-conquering much of Iraq as well – would be costly, bloody and almost certainly futile.
“Unless oil prices rebound above $75 or $85 per barrel, the rig count won’t matter because there will not be enough money to complete more wells..”
The U.S. oil production decline has begun. It is not because of decreased rig count. It is because cash flow at current oil prices is too low to complete most wells being drilled. The implications are profound. Production will decline by several hundred thousand of barrels per day before the effect of reduced rig count is fully seen. Unless oil prices rebound above $75 or $85 per barrel, the rig count won’t matter because there will not be enough money to complete more wells than are being completed today. Tight oil production in the Eagle Ford, Bakken and Permian basin plays declined approximately 111,000 barrels of oil per day in January. These declines are part of a systematic decrease in the number of new producing wells added since oil prices fell below $90 per barrel in October 2014.
Deferred completions (drilled uncompleted wells) are not discretionary for most companies. Producers entered into long-term rig contracts assuming at least $90 oil prices. Lower prices result in substantially reduced cash flows. Capital is only available to fulfill contractual drilling commitments, basic costs of doing business, and to complete the best wells that come closest to breaking even at present oil prices. Much of the new capital from junk bonds and share offerings is being used to pay overhead and interest expense, and to pay down debt to avoid triggering loan covenant thresholds. Hedges help soften the blow of low oil prices for some companies but not enough to carry on business as usual when it comes to well completions.
The decrease in well completions provides additional evidence that the true break-even price for tight oil plays is between $75 and $85 per barrel. The Eagle Ford Shale is the most attractive play with a break-even price of about $75 per barrel. Well completions averaged 312 per month from January through September 2014 when WTI averaged $100 per barrel. When oil prices dropped below $90 per barrel in October, November well completions fell to 214. As prices fell further, 169 new producing wells were added in December and only 118 in January.
Very little scrutiny in the press of Austria’s banking troubles. Which is strange considering the tight links to Germany and Eastern Europe.
Austria’s banking system is undergoing traumatic restructuring. This has been forced upon it by the legacy of the financial crisis and by the progressive removal of sovereign and sub-sovereign guarantees to comply with EU legislation. So far, we have seen the failures of Hypo Alpe Adria and its “bad bank” Heta, the forced rescue of Pfandbriefbank by its regional bank owners, some of which in turn will probably need rescuing by their provincial governments, and the forcible sale of Eastern European assets by Raffeisenbank and Erste Bank. The first of these is still suffering terrible losses: the second says it is slowly returning to profit. We shall see. The latest domino to fall is Austria’s system of cooperative banks, the Volksbanken. There are about 40 Volksbanken, which collectively own an “umbrella bank”, Volksbank AG, known as VBAG.
VBAG was originally created as a central clearing “hub” for its Volksbanken member-owners. It became a private limited company in 1974 and a commercial bank in 1991, after which it developed a life of its own, lending on its own account and acquiring interests not only within Austria but in Central and Eastern Europe. It rapidly built up a substantial portfolio of risky assets backed by insufficient equity. In the 2007-8 financial crisis in Europe, VBAG was initially damaged by the failure of Austria’s infrastructure bank Kommunalkredit AG, in which VBAG had a 50.78% stake: the other principal shareholder was the Belgian/French bank Dexia which was nationalized in 2008 after heavy losses following the fall of Lehman Brothers. VBAG’s stake in Kommunalkredit AG was bought by the Austrian Federal Government in November 2008 for a symbolic €1.
VBAG reported a full-year loss in 2008 of €420m, largely as a result of Kommunalkredit’s nationalization. But worse was to come. Central and Eastern Europe (CEE) was badly affected by the 2008 financial crisis. As investors spooked by the turmoil in the markets moved money to safe havens, several CEE countries slid into deep recession: the worst affected were Romania, Hungary and Latvia, all of which required EU/IMF assistance. Banks exposed to CEE suffered collapsing asset values and destruction of shareholder value. VBAG was one of the worst hit. It lost €1.1bn in 2009 due to losses on CEE loans and real estate. It was bailed out by the Austrian federal government, which provided it with €1bn of subordinated debt.
Governments and derivatives.
It works like this. The public authorities are gambling with our taxes. The casino is managed by the commercial banks that provide money up front in return for hypothetical future gains using derivatives. Thus, the public authority gets money in advance on the basis of presumed gains and it uses this money to get by – until the end of the derivative contract. If things go wrong with the derivatives (something that regularly happens), the public accounts end up drastically in the red. Here we’re talking about billions and not just chicken feed. Obviously the citizens are unaware of all this and they find themselves deeper and deeper in debt. For example, the city of Milan has debts of about four billion. Who has authorised AlbertiniMorattiPisapia to get the people of Milan into debt?
The ones that do well out of this are the commercial banks together with the current politician who starts off useless public works (and/or brown envelopes stuffed with money) or, in the best case scenario, they do some temporary patching up of the accounts. The accounts should be approved by the tax-paying citizens who are the only true bank of the State. They shouldn’t be approved by the functionaries that play with our taxes. We want administrators, not croupiers. “For years, the government and the public authorities have been betting billions of euro at the expense of the citizens. They’ve been using derivatives, betting on the future, and regularly losing. The tax payer is always playing the part of the unfortunate citizen “Pantalone”.
For the commercial banks that set up these bets – and who often welcome into the ranks of their senior management, former ministers and high level functionaries thrown out of the government, the money is always to be found. Always! On 31 December 2014, the potential loss – the “mark-to-market” value was €42 billion, and that’s getting continuously worse. For months, the 5 Star MoVement has been asking for access to the public contracts containing derivatives, but they continue to be kept under lock and key. Hidden away. We want to see all the contracts made with the commercial banks. We want to really get to understand if it’s possible to defuse these atomic bombs that have been slipped in underneath us. It’s a citizen’s right.”
The future of housing?
What if you said goodbye to the McMansion, man cave and fourth bathroom – and moved into a home that could fit in your garage? Would a minimalist lifestyle ease your anxiety and bolster your bank account? Or would the claustrophobia have you crawling out of your skin? In a new documentary premiering online today, Australian filmmaker Jeremy Beasley explores the tiny house movement. The film “Small is Beautiful” follows four people in Portland, Ore., at different stages of building and living in their own tiny homes. Tiny houses must be fewer than 320 square feet, the minimum size for manufactured housing, determined by HUD. They’re hand-built, using primarily wooden beams and constructed on a utility trailer. These structures are mobile but not intended to be driven from place to place.
Tiny homes come in all shapes and sizes and Beasley says you can find them all over the world. The average cost of one of these diminutive homes is around $23,000 and the average size is 186 square feet, according to The Tiny Life, a website focused on the tiny home way of life. Compare that to the median price of a new home in the U.S. at more than $277,000 as of March, with an average size of almost 2,600 square feet. This infographic has more statistics on tiny homes, but Beasley says for tiny house owners it’s often less about facts and figures and more about all-encompassing lifestyle. The tiny house movement began in the U.S. about 15 years ago. Beasley estimates there are between 500 and 1,000 people living in tiny homes.
He says it’s difficult to get an exact number of tiny home owners in the U.S. and abroad because many live “under the radar.” But he says they share some characteristics: “Freedom is definitely something a lot of people have in common,” he says, “as well as living sustainability and trying to lessen their footprint on earth.” Beasley says the tiny house movement is significant in a few states, including North Carolina, Texas and Vermont. Their presence is so well-known in Portland that it was parodied by the hit IFC comedy “Portlandia.” While it might be easy to make a good-natured joke about living in small spaces – New Yorkers certainly get their fair share of ribbing for living in “shoeboxes” – the film takes on some weighty topics.
The empire of evil.
Monsanto, the world’s largest seed company, has approached Syngenta about a takeover, almost a year after a previous attempt fell apart, according to people familiar with the matter. Monsanto has discussed its interest with Syngenta in recent weeks, said two of the people, asking not to be identified discussing private information. Syngenta, which has a market value of about 29 billion Swiss Francs ($31 billion), has concerns about a combination, which would face antitrust hurdles, the people said, and the companies may fail to reach an agreement, they said. Combined with Syngenta, Monsanto would become the largest player in the world for both seeds and crop chemicals and a formidable competitor to Bayer, BASF and Dow Chemical.
Basel-based Syngenta is the world’s largest maker of crop chemicals whereas St. Louis-based Monsanto is the largest maker of seeds and dominates the global market for genetically modified crops like corn and soybeans. Monsanto jumped as much as 3.6% in afterhours trading, after closing at $113.96 in New York, giving the company a market value of $54 billion. The companies held preliminary talks last year with advisers about a combination, before Syngenta’s management decided against negotiations, people familiar with the matter said at the time. No agreement was made after concerns were raised about the strategic fit, antitrust issues and relocating the company.
How about the Vatican?
It appears coal mining isn’t God’s work. The Church of England will dump its holdings in coal and oil-sand producers and has ruled out backing companies with exposure to the most polluting fossil fuels, joining the movement that wants investors to help fight climate change. The church’s investment arm said on Thursday that it will sell its £12 million ($18.4 million) coal and tar sands investments. The church also vowed not to invest in any business that get more than 10% of its revenues from the fuels, ruling out companies from Glencore to Suncor. The move by the church, created by Henry VIII’s split from the Roman Catholic Church in the 16th century and still headed by the Queen, is a victory for environmental activists seeking to stigmatize oil and coal companies in the way South Africa and tobacco companies have previously been targeted.
“Climate change is already a reality,” said the Reverend Richard Burridge, who is deputy chair of the church’s ethical investment advisory group. “The church has a moral responsibility to speak and act on both environmental stewardship and justice for the world’s poor who are most vulnerable to climate change.” About 200 institutions worldwide have pledged to scale back investments in polluting industries, including Glasgow University in Scotland and Stanford University in California. The Rockefeller Brothers Fund, built with profits from Standard Oil, said last year it will sell its coal and tar-sand investments.
Prince Charles, who will become head of the Church of England when his mother dies and has long campaigned on environmental issues, has ensured his private investments and charitable foundations do not have any fossil fuel holdings, the Financial Times reported on April 26. Still, many big institutions are continuing to support such industries. Last month Oxford University refused to join the movement, joining Harvard and Yale universities, which control the biggest endowments in the U.S., in sidestepping requests to remove oil and coal companies from their investment funds.
Only roaches will be left.
Climate change could drive to extinction as many as one in six animal and plant species, according to a new analysis. In a study published Thursday in the journal Science, Mark Urban, an ecologist at the University of Connecticut, also found that as the planet warms in the future, species will disappear at an accelerating rate. “We have the choice,” he said in an interview. “The world can decide where on that curve they want the future Earth to be.” As dire as Dr. Urban’s conclusions are, other experts said the real toll may turn out to be even worse. The number of extinctions “may well be two to three times higher,” said John J. Wiens, an evolutionary biologist at the University of Arizona.
Global warming has raised the planet’s average surface temperature about 1.5 degrees Fahrenheit since the Industrial Revolution. Species are responding by shifting their ranges. In 2003, Camille Parmesan of the University of Texas and Gary Yohe of Wesleyan University analyzed studies of more than 1,700 plant and animal species. They found that, on average, their ranges shifted 3.8 miles per decade toward the planet’s poles. If emissions of carbon dioxide and other greenhouse gases continue to grow, climate researchers project the world could warm by as much as 8 degrees Fahrenheit. As the climate continues to change, scientists fear, some species won’t be able to find suitable habitats.
For example, the American pika, a hamsterlike mammal that lives on mountains in the West, has been retreating to higher elevations in recent decades. Since the 1990s, some pika populations along the species’ southernmost ranges have vanished. Hundreds of studies published over the past two decades have yielded a wide range of predictions regarding the number of extinctions that will be caused by global warming. Some have predicted few extinctions, while others have predicted that 50% of species face oblivion. There are many reasons for the wide variation. Some scientists looked only at plants in the Amazon, while others focused on butterflies in Canada. In some cases, researchers assumed just a couple of degrees of warming, while in others they looked at much hotter scenarios.
Because scientists rarely were able to say just how quickly a given species might shift ranges, they sometimes produced a range of estimates. To get a clearer picture, Dr. Urban decided to revisit every climate extinction model ever published. He threw out all the studies that examined just a single species, such as the American pika, on the grounds that these might artificially inflate the result of his meta-analysis. (Scientists often pick out individual species to study because they already suspect they are vulnerable to climate change.) Dr. Urban ended up with 131 studies examining plants, amphibians, fish, mammals, reptiles and invertebrates spread out across the planet. He reanalyzed all the data in those reports.