Sep 122015
 
 September 12, 2015  Posted by at 9:23 am Finance Tagged with: , , , , , , , , ,


DPC The Mammoth Oak at Pass Christian, Mississippi 1900

UN Warns Of Millions More Refugees Coming To Europe (Reuters)
Migrant Crisis Could Be ‘Biggest Challenge’ In EU History: Germany (AFP)
EU Refugee Quota Plan Rebuffed By At Least 4 European Nations (AP)
Hungary Wants European Military Forces At Greek Borders (DW)
Welcoming the Refugees: Has Germany Really Changed? (Juan Moreno)
Germany’s Asylum System Struggles to Cope (Spiegel)
China Is Dumping US Debt (CNN)
Citi’s Chief Economist Says China Is ‘Financially Out of Control’ (Bloomberg)
Goldman’s Next 11 Markets Are Sinking Even Faster Than the BRICs (Bloomberg)
Poland Versus Greece (Paul Krugman)
Greece at the Cross-Roads: A Test Case of Austerity (Pollack)
A Plan B in Europe (Mélenchon, Fassina, Konstantopoulou, Lafontaine, Varoufakis)
1.5 Million People Take Part In Catalan Independence March (RTE)
Canadian Household Debt Hits New Record, Fuelled By Low Mortgage Rates (Star)
$15 Minimum Wage for NY State: Ford Paid Workers That 100 Years Ago (Intercept)
Russia Calls On World Powers To Arm Syrian Military (AP)
Dairy Farmers at the Barricades (Bloomberg)
Global Food Prices Hit Lowest Level In Over 6 Years (CNBC)

There should have been highest level emergency meetings for a long time now. Is Merkel afraid her Teflon may wear off?

UN Warns Of Millions More Refugees Coming To Europe (Reuters)

[..] More than 170,000 migrants have crossed into Hungary from non-EU Serbia so far this year. Many try to avoid being registered in Hungary for fear of being stranded there or returned to the country later in their journey across Europe. In Geneva, the U.N. High Commissioner for Refugees (UNHCR) said it was sending pre-fabricated housing units to provide temporary overnight shelter for 300 families in Hungary but also expressed concern over Budapest’s tough approach, including the possible deployment of troops to tackle the crisis. “Obviously we expect authorities to respect rights of refugees whether they are the police or army,” said UNHCR spokesman William Spindler.

Syria’s four-year civil war has so far displaced almost eight million people, said Peter Salama of UNICEF, the U.N. childrens’ agency, adding: “There could be millions and millions more refugees leaving Syria and ultimately (going) to the European Union and beyond.” So far this year, a record 433,000 refugees and migrants have crossed the Mediterranean to Europe, more than double the total for all of 2014, the International Organization for Migration (IOM) said on Friday. The EC, backed by Germany and France, wants EU member states to accept mandatory quotas to share out some 160,000 refugees but the plan faces stiff resistance in some capitals. On Friday the UNHCR said the number of people requiring relocation had now risen to 200,000.

Speaking in Prague, Steinmeier said Germany was expecting about 40,000 refugees this weekend alone, adding the EU needed a “fair mechanism of redistribution of migrants (still coming)”. “This challenge cannot be borne by one country. We have to invoke European solidarity,” he told a joint news conference with the foreign ministers of the Czech Republic, Slovakia, Hungary and Poland – countries opposed to the EU’s proposal for mandatory quotas. Germany has come under fire from Orban and other east European leaders for opening its door to Syrian asylum seekers, saying such generosity will only encourage many more to come. Denmark, which like Britain has opted out of EU rules on justice and home affairs, said on Friday it would not take part in the Commission’s relocation scheme.

Earlier this week, Denmark shut off some traffic with Germany to curb refugees trying to reach Sweden, which remains much more welcoming than other Scandinavian countries, but later allowed them to travel through. Finland said it would accept its 2% share of asylum seekers under the Commission plan but said it remained opposed to mandatory quotas and would cut benefits for refugees. EU interior ministers are due to discuss the Commission proposals on Monday. If they fail to reach a deal on tackling the crisis, European Council chief Donald Tusk said on Friday he would call an extraordinary summit of EU leaders this month.

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No doubt there.

Migrant Crisis Could Be ‘Biggest Challenge’ In EU History: Germany (AFP)

The unprecedented influx of refugees and migrants flooding into the EU could be the bloc’s greatest-ever challenge, Germany’s foreign minister said Friday, adding Berlin expects 40,000 new migrants to arrive this weekend. Europe’s largest refugee crisis since the end of World War II could be “the biggest challenge for the EU in its history,” said Frank-Walter Steinmeier, calling for solidarity at Prague crisis talks with eastern EU members who have ruled out binding migrant quotas proposed by the European commission. “If we are united in describing the situation as such, we should be united that such a challenge is not manageable for a single country,” he said, adding “we need European solidarity.”

“Germany expects 40,000 new migrants from the south at the weekend, despite the willingness of German people our possibilities are smaller and smaller,” Steinmeier told counterparts from the Czech Republic, Hungary, Slovakia and Poland. Record numbers of people, many of them fleeing war and conflict in Syria and Iraq, continued to pour into Europe, with around 7,600 entering Macedonia in the last 12 hours.

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This is going to be a fight.

EU Refugee Quota Plan Rebuffed By At Least 4 European Nations (AP)

At least four countries Friday firmly rejected a European Union plan to impose refugee quotas to ease a worsening migrant crisis that Germany’s foreign minister said was “probably the biggest challenge” in the history of the 28-nation bloc. Hungary, which along with the Czech Republic, Slovakia and Poland said it would not support the proposal, threatened instead to crack down on the thousands of people streaming across its borders daily as they flee war and persecution. The stance by those Central European countries reflected a hardening front against distributing at least some of the refugees among them and was a stinging rebuff to German Foreign Minister Frank-Walter Steinmeier, who traveled to Prague to try to persuade them to reconsider.

While the Czechs, Slovaks and Poles have been relatively unaffected by the influx, Hungary has faced growing criticism about its stance toward the asylum seekers. Other EU leaders and human rights groups accuse the government of gross mismanagement or serious negligence in housing, feeding and processing the migrants traveling from the Balkans and through Hungary to Western Europe. Peter Bouckaert of Human Rights Watch asserted Hungary was keeping migrants and refugees “in pens like animals, out in the sun without food and water.” A video that the rights group said was from inside a holding facility at the border town of Roszke showed metal fences surrounding clusters of tents and dividing migrants into groups. Guards were depicted throwing food into the air for desperate people to grab.

Erno Simon, a spokesman in Hungary for the U.N. refugee agency, said the housing situation in Roszke with nighttime temperatures falling to near freezing “is really very, very alarming.” Unfazed, Hungarian Prime Minister Viktor Orban threatened an even harder line, saying his country intended to catch, convict and imprison people who continue to penetrate its new border barriers as part of get-tough border security measures scheduled to begin Tuesday. “If they don’t cross into Hungary territory legally, we will consider it a crime,” Orban said, saying the “illegal immigrants” had no one to blame but themselves for any hardships suffered. “They don’t cooperate. They are not willing to go to the places where they receive provisions: food, water, shelter, health care. They have risen up against Hungary’s legal order,” he told a Budapest news conference.

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How long till we see refugees get shot to death?

Hungary Wants European Military Forces At Greek Borders (DW)

Beginning on September 15, “Hungarian authorities cannot be forgiving of illegal border-crossing,” Orban said on Friday after meeting with Manfred Weber, the chairman of the conservative European People’s Party in the EU Parliament. “We will not courteously accompany them as until now.” Stricter immigration laws are set to take place next week to block the flow of migrants passing through the country on their way to northern European countries. Many are trying to avoid registering in Hungary out of fear of being stranded or returned to the country later. Over 170,000 people have entered Hungary this year, with the UN expecting another 42,000 to arrive next week. Orban also accused refugees of “rebelling against Hungarian legal order” after numerous camp breakouts and standoffs at the Budapest train station.

“They have seized railway stations, refused to give fingerprints, failed to cooperate, and are unwilling to go to places where they would get food, water, accommodation and medical care,” he said. The prime minister also blamed Greece for Hungary’s current refugee crisis. “If Greece is not capable of protecting its borders, we need to mobilize European forces to the Greek borders so that they can achieve the goals of European law instead of the Greek authorities. That is one of the foremost goals,” Orban said. His statements come at the end of an uneasy week which saw increasing tensions at the Serbian-Hungarian border. The country’s decision to build a fence along its border with Serbia, as well as a recent video of refugees being fed “like animals in a pen” at a border reception center drew international criticism on Friday.

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Juan Moreno, child of Spanish immigrants to Germany, tries to find out for Der Spiegel if the country’s really changed.

Welcoming the Refugees: Has Germany Really Changed? (Juan Moreno)

I continue my journey to Leipzig, to the next person who is an expert on foreigners. Oliver Decker is a psychologist, sociologist and philosopher. He received his PhD, became a professor and has focused his academic attentions for the last 13 years on right-wing extremism and xenophobia. Last year, he published his latest study, which was widely quoted in the press. The conclusion: Germans have become less xenophobic. Whereas 9.7% of Germans still had a right-wing extremist weltbild 13 years ago, only 5.4% do today. Anti-Semitism, sympathy for National Socialism, support for a dictatorship: all of that, Decker wrote, is on the wane. That seemed to be the answer to my question. Right down to the decimal point.

Decker is a calm man with a penchant for holding forth in long and complicated sentences. I meet him in a café not far from Leipzig University, where he works. We order something to eat, but before our food comes, Decker makes it clear to me that Laschet is wrong. “There is only an ostensive reduction in xenophobia,” Decker says, explaining that the rejection of certain groups has become more acute. Sinti, Roma and Muslims, for example, are more disapproved of than they used to be, he says. According to Decker, many Germans feel there are two types of foreigners: the useful and the useless. “The Italians brought us their cuisine, so they can stay,” Decker says with ironic bitterness. Americans, Britons, French and Spaniards all integrate well, find work and pay taxes.

But if people believe that newcomers don’t contribute, they are rejected even more than before. Someone once called it “Usefulness-racism.” Decker says that the German identity is deeply bound up with the economy. “Even the poor are proud of the fact that the world envies us for our economy. If that is threatened by immigration, acceptance begins to fall,” he says. So is it all just a big misunderstanding, this new German tolerance of foreigners? Decker smiles. “Germany is currently experiencing a period of economic sunshine, which has led to a reduction in xenophobia. I will be interested to see what studies find a few years from now.”

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German reality beyond the initial euphoria: pretty soon, dramatic scenes will start to unfold.

Germany’s Asylum System Struggles to Cope (Spiegel)

Hannelore Kraft, the Social Democratic (SPD) governor of North Rhine-Westphalia, Germany’s most populous state, made clear at the beginning of the week that the number of refugees to be expected this year will likely rise from the 800,000 the federal government forecast in August. She also made clear that the effort needed to deal with the influx will be much greater than previously thought. Just how great that effort might be became clear on Thursday morning during a conference call of all state interior ministries in addition to the federal Interior Ministry in Berlin. As part of the meeting, states indicated how much shelter capacity they possessed, and the results, according to the phone conference’s protocol, were not particularly promising.

Seven states – including Baden-Württemberg, Hesse and Rhineland-Palatinate – reported that they had no remaining capacity whatsoever. Bavaria complained of “uncontrolled access pathways.” And Schleswig-Holstein lamented the “uncoordinated influx into the reception facilities.” The Interior Ministry in Berlin also had an alarm bell to sound: Austria, through which refugees must travel on their way from Hungary to Germany, is beginning to diverge from the joint approach. The conference call provides a small insight into the immense challenges facing Germany this year and in the years to come. Indeed, the effects are likely to remain with the country for decades to come — and will have consequences for Germany’s identity, its prosperity and for its self-image. Against that backdrop, the question arises: Can we handle the crisis? Or will the crisis handle us?

Either is possible. It could be that Germany, with its gleeful welcoming party, is currently sowing the seeds for problems that the country will face in 2040. It could be that the foreigners will remain foreign, that they will create a new, parallel underclass. Simultaneously, it could also be that Germany is currently solving those problems that would, without immigration, face the country in 2040: Labor market problems, pension fund problems and old-age care problems. It will take many years before it becomes clear in which direction the pendulum is swinging. But if Germany wants the opportunities to win out over the dangers, then that state will have to confront the chaos and do all it can to integrate the newcomers, the majority of whom are likely to stay. And that project will have to begin soon, even if the state is currently having difficulties accelerating asylum procedures, providing therapy to traumatized children and training adults for the labor market.

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“Capital outflows have skyrocketed in China and the yuan is under intense selling pressure..”

China Is Dumping US Debt (CNN)

It’s no secret that China is the largest holder of U.S. debt. So should Americans be concerned that China has started dumping some of its Treasury holdings? After all, it raises serious questions about whether China will keep lending Washington money to help finance the federal deficit in the future. But right now, China is selling because it’s in dire need of cash. Recently, it unleashed multiple moves to support its markets and prevent its currency from a freefall, while at the same time trying to stimulate the economy. China owned $1.3 trillion of U.S. Treasuries as of June, making it the biggest holder of U.S. debt. But China’s foreign-exchange reserves plunged by a record $94 billion in August, according to the country’s central bank, leaving it with a war chest of $3.6 trillion.

Analysts say it’s very safe to believe a big chunk of that decline occurred due to a reduction in U.S. Treasury holdings. The selling and the potential that China will not be buying U.S. debt in the near future raises questions on its potential to increase America’s borrowing costs. Some of this might already be happening, at least at a small scale. When stock markets are turbulent, investors usually rush to the safety of U.S. Treasurys and yields fall. However, despite August’s extreme stock volatility, rates on Treasurys actually rose slightly in late August. Part of that move is likely due to Wall Street betting the Federal Reserve may raise interest rates next week. But market participants also suspect the unusual action in the bond market was driven by China dumping Treasuries.

This time, Beijing is cutting its Treasury holdings out of a weakened position as it tries to stave off more declines in its currency. China is also propping up its stock market, which lost half its value in the span of just a few months this summer. “Capital outflows have skyrocketed in China and the yuan is under intense selling pressure. The only thing they could do is sell Treasuries to buy their own currency,” said Walter Zimmerman, chief technical analyst at United-ICAP.

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The 55% chance is a loony number and Buiter’s ‘solutions’ make zero sense, but his headline may well be correct for once. Coming from America’s biggest bank, this should have Beijing in a nervous state.

Citi’s Chief Economist Says China Is ‘Financially Out of Control’ (Bloomberg)

Willem Buiter, Citigroup chief economist, sees a storm brewing in China. This week, he estimated that there is a 55% chance of a made-in-China global recession in the not too distant future, which he defines as a period of sub-2% global growth. Without a massive, consumer-focused stimulus plan, he argues, Chinese growth will slip below 4%. This would constitute a recession for the world’s second-largest economy, according to Buiter, and the rest of the world wouldn’t be insulated from the slowdown. Buiter appeared on BloombergTV to discuss his headline-grabbing call.

The cause of his consternation is the immense debt that Chinese non-financial companies have racked up in a short period of time. Over the past decade, the indebtedness of China’s private sector has exploded and exceeded that of the U.S., which Buiter pointed out has a much more advanced economy and sophisticated financial system: “I think things are financially out of control in China and we are waiting for the regulators and supervisors to bring things back under control and to do for the financial system the kind of things – recapitalizing banks and other systemically important financial institutions – that would give you the underpinning for continued growth,” he said.

The economist isn’t too optimistic about the prospects for the powers in Beijing to resolve their bloated credit situation. Chinese policymakers are playing a game of “extend and pretend,” said Buiter, drawing a parallel to the EU’s penchant for reaching short-term solutions to the crisis in Greece. “Until the problems in the banking sector, the financial sector generally, and in the corporate sector – the excessive debt burden – is tackled by the government, the only entity that can do it, I think the prospects for resumption of healthy growth in China are dim,” he concluded.

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It’s called deflation. Global stock markets have lost $12.5 trillion.

Goldman’s Next 11 Markets Are Sinking Even Faster Than the BRICs (Bloomberg)

This time last year, it looked like Goldman Sachs’s selection of emerging market up-and-comers was ready to fill the void left by shrinking investment returns in Brazil, Russia, India and China. Share prices in these “Next 11” countries – places like the Philippines, Turkey and Mexico – were trading at all-time highs as foreign investors flooded their markets with cash. Inflows into Goldman Sachs’s U.S.-domiciled Next 11 equity fund sent assets under management to twice the level of the firm’s BRICs counterpart. Now, though, the Next 11 countries are looking even worse for investors than the larger markets they were supposed to supplant. MSCI’s Next 11 equity gauge has tumbled 19% this year, versus a 14% slump for the BRIC index. Foreign capital is rushing out, with the Goldman Sachs fund shrinking by almost half as losses deepened to 11% since its inception four years ago.

The turnaround shows how young populations and a rising middle class – characteristics that first lured Goldman Sachs to the Next 11 economies a decade ago – have failed to safeguard stock-market returns in a world facing higher U.S. interest rates, tumbling commodity prices and a Chinese economic slowdown. For John-Paul Smith, one of the few strategists to accurately predict the losses in emerging markets, it also illustrates the dangers of grouping so many disparate countries into a single investment theme. Money managers “are increasingly moving away from acronym-based investment,” said Smith, the former Deutsche Bank AG strategist who founded Ecstrat, a London-based research firm, last year. “Within emerging markets, it is difficult to think of a market that has a combination of attractive valuations and constructive policy developments.”

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It’s the euro.

Poland Versus Greece (Paul Krugman)

Yannis Ioannides and Christopher Pissarides, in a new Brookings Paper, talk about the ways lack of structural reform hurts Greek productivity and competitiveness. I have no reason to doubt that there are big things that should change, and that Greece would be much better off if it could somehow break the political barriers to making these changes. But I would argue that it’s very, very wrong to point to factors limiting Greek productivity and claim that these factors are the “cause” of the Greek crisis. Low productivity exacts a price from any economy; it does not normally, or need not, create financial crisis and a huge deflationary depression. Consider, in particular, a comparison that should be made — between Greece and Poland. Poland, like Greece, is a country on Europe’s periphery, closely linked to the rest of the European economy.

It’s also a country with relatively low productivity by northwestern European standards, indeed lower productivity than Greece by standard international measures. But Poland has not had a Greek-style crisis, or indeed any crisis at all. Instead, it has powered through the turmoil of recent years. What’s the difference? The main answer, surely, is the euro: by adopting the euro Greece first brought on massive capital inflows, then found itself in a trap, unable to achieve the needed real devaluation without incredibly costly deflation. Every time someone asserts that the Greek problem is really on the supply side, you should ask, not whether it has supply-side problems — it does — but why this should lead to collapse. Greece seems to have about 60% of Germany’s productivity, which means that it should have real wages only about 60% as high as Germany’s. It should not have 25% unemployment.

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Interesting critique of Varoufakis.

Greece at the Cross-Roads: A Test Case of Austerity (Pollack)

Austerity entails sacrifice. It suggests an ascetic mental cast and, perhaps secondarily, enforced or extreme economy (Webster’s). Speaking personally, I have always favored an ascetic cast of mind as the ultimate negation of conspicuous consumption, and beyond, a dependence on consumerism as a principal mode of class identity, and a gut-addiction to luxury, as diversion from the real world of living. The ascetic cast is absolutely essential to a gracious view of Nature and respect for the environment. And it also rules out militarism as incompatible with a nation’s servicing of the basic needs of its people. Asceticism promotes sharing and conserving of scarce resources and, be it said, a spiritual cleanliness not cluttered with status needs and consideration. So much on the positive side.

But what happens when what I take to be a moral category of human belief and conduct has become politicized to favor exactly the opposite societal results. For austerity has been the tool of upper groups to fasten poverty on the remainder, a bone-dry social system devoid of everything from progressive taxation and enforced business regulation to a vibrant social safety net—all in the vacuous name of balanced budgets. Austerity is the battering ram of plutocracy to enhance its own wealth and subjugate working people and the poor to unfulfilled lives often coming down to human social misery. It is a class weapon of power, a means, thoroughly respectable at that, of promoting class differentiation and wealth concentration.

Not unexpectedly, it is the method of choice of the IMF, World Bank, EU, and, standing behind all three, the US (though meant to apply to others more than to itself). It is legitimation in its nastiest form, meant to seal a hierarchical order in place at the expense of its most deprived members. Within the EU, Greece became the designated victim, 1.e., sacrificial lamb, to justify a malicious economic policy-construct pointing the way to where capitalist development was heading: greater inequality through enforced strict ground rules that favor corporatist goals of financial-business hegemony over governments and peoples.

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“..an international summit on a plan B for Europe..” If they can make that work, it would be a positive development. Somewhat surprised to see Zoe be part of this little group.

A Plan B in Europe (Mélenchon, Fassina, Konstantopoulou, Lafontaine, Varoufakis)

This is our plan A: We shall work in each of our countries, and all together throughout Europe, towards a complete renegotiation of the European Treaties. We commit to engage with the struggle of Europeans everywhere in a campaign of Civil European disobedience toward arbitrary European practices and irrational “rules” until that renegotiation is achieved. Our first task is to end the unaccountability of the Eurogroup. The second task is to end the pretence that the ECB is “apolitical” and “independent”, when it is highly political (of the most toxic form), fully dependent on bankrupt bankers and their political agents, and ready to end democracy at the touch of a button.

The majority of governments representing Europe’s oligarchy, and hiding behind Berlin and Frankfurt, also have a plan A: Not to yield to the European people’s demand for democracy and to use brutality to end their resistance. We’ve seen this in Greece last July. Why did they manage to strangle Greece’s democratically elected government? Because they also had a plan B: To eject Greece from the Eurozone in the worst conditions possible by destroying its banking system and putting to death its economy. Facing this blackmail, we also need a plan B of our own to deter the plan B of Europe’s most reactionary and anti-democratic forces. To reinforce our position in the face of their brutal commitment to policies that sacrifice the majority to the interests of a tiny minority.

But also to re-assert the simple principle that Europe is about Europeans and that currencies are tools for promoting shared prosperity, not instruments of torture or weapons by which to murder democracy. If the euro cannot be democratised, if they insist on using it to strangle the people, we will rise up, look at them in the eye, and tell them: Do your worst! Your threats don’t scare us. We shall find a way of ensuring that Europeans have a monetary system that works with them, not at their expense. Our Plan A for a democratic Europe, backed with a Plan B which shows the powers-that-be that they cannot terrorise us into submission, is inclusive and aims at appealing to the majority of Europeans. This demands a high level of preparation. Debate will strengthen its technical elements.

Many ideas are already on the table: the introduction of parallel payment systems, parallel currencies, digitization of euro transactions, community based exchange systems, the euro exit and transformation of the euro into a common currency. No European nation can work towards its liberation in isolation. Our vision is internationalist. In anticipation of what may happen in Spain, Ireland – and potentially again in Greece, depending on how the political situation evolves – and in France in 2017, we need to work together concretely towards a plan B, taking into account the different characteristics of each country.

We therefore propose the convening of an international summit on a plan B for Europe, open to willing citizens, organisations and intellectuals. This conference could take place as early as November 2015. We shall begin the process on Saturday the 12th of September during the Fête de l’Humanité in Paris. Do join us !

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Europe’s next black swan?!

1.5 Million People Take Part In Catalan Independence March (RTE)

Some 1.4 million people have joined a march demanding independence for the Catalonia region from Spain, Barcelona city police said. Officials published the figure on Twitter after the demonstration, which marked the start of campaigning for a 27 September regional election billed by Catalan leaders as an indirect vote on independence. The city police force, which is controlled by city hall, estimated turnout at 1.4 million. Spanish government officials say half a million people are taking part in the march. Waving red and yellow Catalan flags, they marched down a major road into the city, yelling “Independence!” while some formed human pyramids – a Catalan folk tradition. The show of force on Catalan national day came at a time of high political tensions, some three months ahead of a general election in Spain, the eurozone’s fourth-biggest economy.

State officials and other authorities did not immediately release their own estimates for turnout in Barcelona, capital of this region which counts 7.5m inhabitants. Before the rally, organisers had said 500,000 people had signed up to take part. At last year’s Catalan national day demo, Spanish state officials and local authorities gave wildly different turnout figures for the politically-sensitive rally. Polls this week showed pro-secession candidates could win a majority of seats in the Catalan parliament during this month’s vote. If they win, Catalan president Artur Mas has vowed to push through an 18-month roadmap to secession for the region, which accounts for a fifth of Spain’s economy.

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Blind into the abyss: “..for every $1 of after-tax income Canadians earned, they owed nearly $1.65 in credit market debt..”

Canadian Household Debt Hits New Record, Fuelled By Low Mortgage Rates (Star)

A key indicator of household debt hit a record high in the second quarter of 2015 as lower mortgage rates drove increased borrowing, Statistics Canada figures show. The ratio of debt to disposable income reached 164.6% as debt loads grew faster than incomes, the federal agency noted in its quarterly National Balance Sheet Accounts. That means for every $1 of after-tax income Canadians earned, they owed nearly $1.65 in credit market debt, which includes mortgages, credit cards and other kinds of consumer loans. The ratio was 163% in the previous three-month period, Statistics Canada said. The increase “came as no surprise,” TD Bank economist Jonathan Bendiner wrote in a commentary.

Rising mortgage debt drove most of the growth as interest rate cuts by the Bank of Canada earlier in the year spurred borrowing, especially in the hot housing markets in British Columbia and Ontario, Bendiner noted. The report comes two days after the Bank of Canada held its trendsetting overnight interest rate at 0.5%, citing strength in exports and consumer spending. In the past, Bank governor Stephen Poloz has raised concerns about growing household debt loads as a risk to future economic stability. But that concern was pushed onto the back burner as plunging oil prices sent the Canadian economy into a mild recession in the first half of the year. A credit counselling agency said consumers need to be cautious about taking on debt levels they may not be able to carry if interest rise from their current very low levels.

“Household debt levels are continuing their upward trend, and this puts Canadian consumers in a precarious situation,” said Scott Hannah, the president and chief executive officer of the Credit Counselling Society, a non-profit agency in British Columbia. “If they’re struggling to manage their increasing debt obligations now, a sudden change in external factors — like a rise in interest rates or the loss of a job — will leave many Canadians in greater financial difficulty.” Overall, Canadian households held $1.874 trillion in credit market debt at the end of the quarter, Statistics Canada said.

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“According to the Wall Street Journal, Ford had “committed economic blunders, if not crimes” that would “get riddance to Henry Ford of his burdensome millions..”

$15 Minimum Wage for NY State: Ford Paid Workers That 100 Years Ago (Intercept)

This Thursday in Manhattan, New York Gov. Andrew Cuomo called for the state to raise its minimum wage to $15 an hour for all workers. Cuomo can’t just do this by edict — as he essentially could using an industry-specific wage board when he raised the minimum pay for New York fast food workers to $15 an hour by 2021 — so any raise for everyone will have to pass the state legislature. Still, simply getting the endorsement of the governor of the third-biggest U.S. state is a huge victory for a national movement of low-wage workers. What will come next is a series of hysterical warnings from conservative pundits that New York can’t meddle with the almighty power of supply and demand, and that this will cause massive unemployment and destroy the very people it’s supposed to help, etc.

So here’s some historical context: Adjusted for inflation, $15 an hour is exactly what Henry Ford paid his workers over 100 years ago. Ford famously decided in 1914 to raise his workers’ wages to $5 a day while cutting the workday from nine hours to eight. Five dollars in 1914 has the same buying power as $119.32 in 2015. Divided by eight, that’s $14.92 an hour. When Ford made his announcement, the New York Times proclaimed that “The theory of the management at Ford Motor Company is distinctly Utopian and runs dead against all experience.” According to the Wall Street Journal, Ford had “committed economic blunders, if not crimes” that would “get riddance to Henry Ford of his burdensome millions” and “may return to plague him and the industry he represents, as well as organized society.”

Instead, Ford had kicked off the age of mass consumption, a huge century-long economic expansion, and the creation of the first real middle class in world history. As Ford later wrote: “We increased the buying power of our own people, and they increased the buying power of other people, and so on and on. It is this thought of enlarging buying power by paying high wages and selling at low prices which is behind the prosperity of this country.” (Interestingly, someone making $5 dollars a day at Ford would have had to work a little more than 100 days to afford a Model T – and if New York workers get a raise to $15 an hour, they’ll have to work about the same period of time to afford a Ford Fiesta.)

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Russia’s fed up with US chaos theories.

Russia Calls On World Powers To Arm Syrian Military (AP)

Sergei Lavrov, Russia’s foreign minister, has called on world powers to help arm the Syrian army, saying it was the most efficient force against Islamic State. The US and Nato have raised concerns over Russia’s military buildup in Syria since they see the president, Bashar al-Assad, as the cause of the Syrian crisis, which has claimed more than 250,000 lives over four years. Moscow, meanwhile, has sought to cast arms supplies to Assad’s government as part of international efforts to combat Isis militants. The increased Russian activity reflects Moscow’s concern that its longtime ally is on the brink of collapse, as well as hopes by the president, Vladimir Putin, that a common battle against Isis can improve Russia’s ties with the west, which have been strained over Ukraine.

Lavrov said in Moscow that Russia would continue to supply Assad with weapons and called on other countries to help the Syrian government and its ground troops. “You cannot defeat Islamic State with airstrikes only,” Lavrov said. “It’s necessary to cooperate with ground troops and the Syrian army is the most efficient and powerful ground force to fight the Islamic State.” Lavrov insisted that by sending weapons to Syria, Russia was not propping up Assad but was contributing to defeating Isis fighters. “I can only say once again that our servicemen and military experts are there to service Russian military hardware, to assist the Syrian army in using this hardware,” he said at a news conference in Moscow. “And we will continue to supply it to the Syrian government in order to ensure its proper combat readiness in its fight against terrorism.”

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“The world is awash in milk..”

Dairy Farmers at the Barricades (Bloomberg)

Talk to dairy farmers in Britain, the U.S., New Zealand, Canada, Argentina, and countries worldwide, and you ll hear the same thing: Times are tough. Russia’s ban on European Union milk and the EU’s removal of production quotas have driven local prices down 20% in the past 12 months. That s why 6,000 farmers and 2,000 tractors converged on Brussels on Sept. 7 to protest EU farm policies. Audrey Le Bivic, a dairy farmer from France s Brittany region, was grim: “I cannot pay my bills. If tomorrow I can no longer buy food for my cows, they will not produce any more milk, and I cannot let my cows starve”. “The world is awash in milk, with global trade in whole milk powder at its lowest since 2011”, the U.S. Department of Agriculture says.

For the first seven months of 2015, American dairy exports were down 28%, compared with the same period in 2014, says the U.S. Dairy Export Council; the USDA expects purchases of whole milk powder by China, the world s biggest dairy importer, to drop 40% this year. The former No. 2 importer, Russia, has banned imports from not only the EU, but also the U.S. and Australia in retaliation for sanctions imposed to protest Russian intervention in Ukraine. “We don’t see any major recovery in sight”, says Pekka Pesonen, secretary general of Copa-Cogeca, a farm lobby in Brussels. The Brussels demonstrations were the culmination of a summer of unrest in the countryside. French farmers blockaded highways; their Lithuanian counterparts dumped 30 tons of milk to highlight their plight.

In the U.K. angry farmers raided supermarkets and emptied shelves of milk to pressure retailers including Wal-Mart Stores to commit to higher prices. Dairy farmers have been losing huge amounts of money, says Rob Harrison, an English farmer. China and Russia aren’t the only culprits. Record prices last year primed farmers to bolster output in the U.S., where milk production in 2015 will reach 208.7 billion pounds, the fifth consecutive record-setting year. In April the EU, seeking to liberalize trade, removed quotas that had been in place for the past 30 years, leading to increased production from Ireland, the Netherlands, and the U.K. China is producing more milk thanks to investments such as a $140 million, 20,000-cow facility that China Modern Dairy Holdings, partly owned by private equity firm KKR, unveiled in 2013. The Chinese are also consuming stockpiled milk powder and importing less. Global milk supply grew 3.7% last year, almost triple the growth rate of 2013, the USDA says.

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Food must be a local trade, not an international one.

Global Food Prices Hit Lowest Level In Over 6 Years (CNBC)

Global oversupply and concerns over China’s economic slowdown have knocked food commodity prices to the lowest level in over six years, the UN’s food body said on Thursday. The Food and Agriculture Organization of the UN’s trade-weighted food price index posted its steepest monthly drop in August since December 2008, falling to 155.7 points, its lowest level since April 2009. “In addition to ample supplies, a number of other factors contributed to the decrease, including the slump in energy prices and concerns about China’s economic slowdown and its negative consequences on the global economy and financial markets,” the organization said in an statement on Thursday. The index is a measure of the monthly change in international prices of a basket of five food commodities cereal, vegetable oil, dairy, meat and sugar.

Cereal prices were at their lowest level since June 2010 and the prices of milk powders, cheese and butter “dropped substantially.” Vegetable oil prices hit a March 2009 trough and sugar prices also fell on the previous month, hit by a falling Brazilian real and expectations that India will become a net exporter of the commodity. The only food commodity that didn’t see a fall was the price of meat, which remained virtually unchanged from the previous month. “International prices of ovine (sheep) meat moved up somewhat, while those for other types of meat were stable,” the UN said. “Nevertheless, compared to the index’s historic peak in August 2014, overall prices were down by 18%, with pig and ovine meat the most affected, although poultry and bovine meat quotations also slid markedly over the period.”

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Home Forums Debt Rattle September 12 2015

This topic contains 18 replies, has 8 voices, and was last updated by  Variable81 3 years, 8 months ago.

Viewing 19 posts - 1 through 19 (of 19 total)
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  • #23857

    DPC The Mammoth Oak at Pass Christian, Mississippi 1900 • UN Warns Of Millions More Refugees Coming To Europe (Reuters) • Migrant Crisis Could Be ‘Big
    [See the full post at: Debt Rattle September 12 2015]

    #23861

    seychelles
    Participant

    “Germany is currently experiencing a period of economic sunshine, which has led to a reduction in xenophobia. I will be interested to see what studies find a few years from now.”

    Delayed payback is still payback. The perpetual goal is always chaos, more chaos, leading to that wonderful, glorious, New World Order.

    #23862

    rapier
    Participant

    For the most part the US opinion makers have not connected the dots between the US and it’s Gulf monarchies partners plan to oust Assad and the refugee crisis. They probably never will.

    Dots that are being connected is that among the throngs entering Europe are Jihadists . One crackpot theory I have held for a long time, since 2000 to be exact and Bush vs Gore, is that ultimately it will be anarchists of various sorts that are going to be the catalyst for systematic dislocation. It turns out that to this day there is not a hint of domestic anarchism in the US or Europe but now from out of the blue there is another source. It may be a stretch to call the latest iteration of radical so called Islam anarchist but functionally it will do.

    #23864

    charlo49
    Participant

    re. the NY minimum wage. why not just pay everyone $100k a year, whether they work or not? it’s all just computer money anyway. that would be like QE for the people instead of for the banks. then people could consume to their hearts content, and the economy would be at full speed.

    #23865

    Variable81
    Participant

    @charlo49,

    “…why not just pay everyone $100k a year, whether they work or not? it’s all just computer money anyway. that would be like QE for the people instead of for the banks…”

    Uh, it’s nothing like QE for the people at all. QE monitized debt, buying junk/toxic assets to increase liquidity within the banking system. Simply paying everyone $100k/yr doesn’t monetize any underlying collateral, it just increases the cost of labour which in turn will drive up prices.

    As far as everyone consuming to their heart’s content, unless you’re being sarcastic I suggest you read more of the articles here at TAE and better understand the concept of resource/systems limits.

    Cheers.

    #23866

    charlo49
    Participant

    well it was tongue in cheek. of course if you did pay everyone $100k a year they’d all stay home and watch TV. oh..there wouldn’t be any TV. i’m just trying to illustrate what an idiotic system we have.

    i’m well aware of resource limits which i why i live in community and share resources.

    #23867

    Nassim
    Participant

    Paul Craig Roberts published a good article about 9/11 and the cover up:

    “Millions of refugees from Washington’s wars are currently over-running Europe. Washington’s 14-year and ongoing slaughter of Muslims and destruction of their countries are war crimes for which the US government’s official 9/11 conspiracy theory was the catalyst. Factual evidence and science do not support Washington’s conspiracy theory. The 9/11 Commission did not conduct an investigation. It was not permitted to investigate. The Commission sat and listened to the government’s story and wrote it down. Afterwards, the chairman and cochairman of the Commission said that the Commission “was set up to fail.””

    9/11 Fourteen Years Later

    Personally, I have checked into the number of Israelis who died in the 2 WTC towers – the third, WTC7 was unoccupied.

    It seems that there were precisely two Israeli nationals in these buildings – out of the 2,606 victims. In fact, there were also 2 victims from Zaire – a country with few people in the financial district of New York.

    It would seem to me that Israelis comprise a good deal more than 0.07% of the people working in the financial sector of New York. I suspect the figure should be more like 5%.

    A simple Chi-squared mathematical test would prove that the absence of Israelis from these buildings on that day was most unlikely to have been by chance.

    #23871

    Nassim
    Participant

    Please listen to this video. If you are time-short, go to minute 31 and listen for truly mind-boggling revelations about 9/11

    “9/11 BOMBSHELL: METHODICAL DECEPTION — Rebekah Roth ”

    #23875

    TheTrivium4TW
    Participant

    HI Nassim, the biggest mind boggling revelation about 9/11 is that the top of the North Tower never decelerated as it fell through the lower section of the building.
    Anyone well versed in basic physics would know that this means the top of the building never crashed onto a solid lower section of the building.
    That means that the top of the North Tower physically could not have crushed and destroyed the building below it.
    What a Gravity-Driven Demolition Looks Like

    #23876

    V. Arnold
    Participant

    @ TheTrivium4TW

    After your post; I’m out of here. That is the most ignorant summation I’ve ever read.
    If this blog supports your contention of 9/11; then kiss my ass goodbye…

    #23877

    charlo49
    Participant

    it’s all mind boggling. the enormity of the crime causes cognitive dissonance. many people simply can’t handle it. their brains freeze and they go on the offensive. it completely torpedoes their world view of their government, the media, and everything else they’ve been led to trust. some crimes are so enormous they exceed the ability of governments to prosecute, particularly since the government is complicit in the crime. the perpetrators will never be brought to justice. there is no justice that can fit the enormity of the crime. only god can judge them.

    #23883

    TheTrivium4TW
    Participant

    Hi Arnold, the rational approach is to use physics to explain how the top of the North Tower could crush the lower section of the building without ever decelerating (a requirement in reality if the top of the building struck an intact lower section of the building that would oppose the motion of the upper part of the building – at least for a time).
    We aren’t talking my view or opinion here, we are talking physical observable fact. If you can rationally explain the facts as they exist, please do so. But you didn’t. I propose that is because you can not do so. I also propose that your effort to immediately end further debate of the facts is indicative of your sub conscious knowing the truth which your conscious doesn’t want to accept. Otherwise, let’s talk some physics! I’m not scared of physics.
    I get that comprehending the facts are disconcerting. But some people seek out and identify facts whether others are capable of dealing with them or not.

    re: charlo – The Big Lie works for a reason. The problem is that people who enable the Big Liars because they refuse to rationally deal with the OBSERVABLE EMPIRICAL EVIDENCE, become un/witting accomplices to all future acts committed by the people for whom they protect by avoiding the facts. That’s karma that I don’t want weighing me down.

    #23885

    V. Arnold
    Participant

    No, you are not using physics; you’re abusing physics. I know for a fact steel starts to go plastic when heated past 800°f.
    Having worked as an engineer I’ve read it all and the Truther’s are just; oh never mind.
    The top floors did pancake the floors below. Truther’s are wack jobs and conspiracy paranoids.
    Compare a true demolition and it goes from the bottom up; not top down.
    I believe my own lying eyes; not fantastical theories. I have zero doubt the government knew the plane attack was coming and did nothing to stop it.
    I’m done with this…believe what you will.

    #23890

    charlo49
    Participant

    all you’ve got to do is read rebekah roth’s book methodical illusion or watch the video interviews. no planes hit the towers…the video is fake. the wings would have sheared off and fallen to the ground. a missile may have hit one of the towers…there was an object traveling at 600 mph on the radars. all the towers were rigged with thermite…hence the clouds of dust. it’s all about money. trillions of dollars were made out of this event.

    #23891

    TheTrivium4TW
    Participant

    >>No, you are not using physics; you’re abusing physics.<<
    Yes it is. If you think it isn’t, do explain in detail. The video explains the physics in detail. Your criticism should have detail as well instead of an unsupported claim.
    >>I know for a fact steel starts to go plastic when heated past 800°f.<<
    That’s completely irrelevant to the point of the video, but it is the official narrative. The official narrative won’t touch the contents of that video because they have no answer for it.
    >>Having worked as an engineer I’ve read it all and the Truther’s are just; oh never mind.<<
    No, don’t use ad hominem, explain how a falling object can hit an intact object AND NOT DECELERATE. Even a pool ball decelerates when it hits another pool ball… and that 2nd pool ball is not even a rigid structure.
    >>The top floors did pancake the floors below.<<
    If that is your claim then you have to prove how that could be done sans any observed deceleration. You can’t just claim it. You can’t just repeat someone else claiming it. Why, specifically, is there no deceleration observed as the top of the building crashed into an allegedly structurally sound building engineered to support 5x the weight of the falling top portion of the building?

    **You know that deceleration should be observed, that’s why you avoid the central issue of the video and bring up irrelevant points and call names instead of actually address the issue, right? Just address the issue.**

    >>Truther’s are wack jobs and conspiracy paranoids.<<
    More name calling, more avoidance of the lack of observed deceleration.
    >>Compare a true demolition and it goes from the bottom up; not top down.<<
    The video compared a gravity led demolition AND THE EXPECTED DECELERATION WAS PRESENT AND OBSERVED. Did you even watch the video? How can you judge a matter before you hear it?
    >>I believe my own lying eyes; not fantastical theories.<<
    No, you aren’t believing your truth telling eyes of observation and you are believing the Debt-Money Monopolist financed establishment rhetoric.
    >>I have zero doubt the government knew the plane attack was coming and did nothing to stop it. I’m done with this…believe what you will.<<

    **Please watch the video before criticizing it** If you had, you would know that the physics of an actual gravity led demolition was analyzed and it produced the expected deceleration at the point of contact with a structurally sound building beneath it.
    World Trade Center North DID NOT EXHIBIT THE DECELERATION, therefore, something other than the top of the building wiped out the lower section of the building.
    It is elementary physics and reason.
    BTW, I don’t like it anymore than you do, but I reach conclusions based on evidence analysis and not on evidence and evidence discussion avoidance.

    #23894

    V. Arnold
    Participant

    I already told you; I’m done with this “conversation”; I’ll leave it to you to understand your framing and belief system; bye.

    #23895

    TheTrivium4TW
    Participant

    Hi charlo, Roth’s perspectives are interesting. I don’t know exactly what happened, but I do think there is enough evidence to support the contention that 1. planes hit the building (what type of plane is a different matter) or 2. something that looked like a plane hit the building.

    That’s why I don’t put too much value in those kinds of arguments – they could go either way and aren’t “proof” of anything.
    I have, and posted, ABSOLUTE OBSERVABLE PROOF that the top of the of the North Tower never hit a structurally sound lower section of the building as evidenced by no upward force increase (deceleration) applied to the top of the North Tower building.
    Most people disagree with the conclusion demanded by the observed physics… BUT THEY DON’T EVER ADDRESS THE RELEVANT PHYSICS – even when asked repeatedly to do so.

    I believe it is because they can’t rationally address the physics and their subconscious knows this and won’t every let their consciousness address the relevant PHYSICAL LAWS.

    It is IMPOSSIBLE to hit something and not decelerate. It takes a force to change motion absent even any structural integrity… like when playing pool the cue ball will decelerate as it hits another ball of equal mass loose on the table. It would decelerate if the two balls were weightless in space.

    There is no getting around that the top of the building must’ve decelerated if it crashed into the lower section of the building BUT IT OBSERVABLY DIDN’T. Therefore, logically, something had destroyed the building before the top section of the building had an opportunity to smash into it.

    Arnold tried to claim there was justification for the initiation of collapse. That’s completely irrelevant as the argument here has to do with the expected collision and deceleration of the two building parts, NOT THE INITIATION OF COLLAPSE. The reason Arnold has to go there is because HE CAN’T GO TO THE ACTUAL POINT OF THE VIDEO (which I don’t even think he watched based on his claim of the necessity to watch a gravity led demolition – which was done in the video!).

    Update – Arnold chooses to avoid actually addressing the issue in the video by choosing to opt out of future discussion. That’s the tactic of choice for people who can’t handle the conclusions of the physical truth.

    PS – Arnold, debt-money systems are a conspiracy to asset strip and control humanity. Yes, rich and powerful people conspire to remain that way. Search “Adam Smith conspiracy quote.” Even Adam Smith knew about this tendency and wrote about it in Wealth of Nations.

    Of course, the wealthy conspirators that control the media don’t want YOU to know about their conspiring… so they train you that questioning the known lying establishment declarations, even when supported by basic physics, is conspiracy theory… like, human nature based conspiring to manifest their self-interests? Yeah. That.

    #23897

    NO 9/11 AT THE AUTOMATIC EARTH! I’m going to start deleting posts.

    #23900

    Variable81
    Participant

    @ilargi,

    “NO 9/11 AT THE AUTOMATIC EARTH!”

    Why is that again? I didn’t think TAE was a place where I had to censor myself as long as I am polite and open-minded to everyone’s comments/ideas and don’t promote hatred or violence…

    @V.Arnold,

    “Truther’s are wack jobs and conspiracy paranoids.”

    And sleeping Sheep are ignorant. I’m not taking either side of the debate, but dismissing a whole group of individuals and their argument because you think they are wack jobs / conspiracy paranoids seems awfully dismissive of you.

    “Conspiracy theories” can end up being “conspiracy facts”.

    Cheers.

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