Apr 042019
 April 4, 2019  Posted by at 9:01 am Finance Tagged with: , , , , , , , , , ,

Pablo Picasso Nude on a beach 1929


Lack Of Redundancies On Boeing 737 MAX Baffles Its Developers (ST)
Trolling the Mueller Report (WSJ Op-ed)
Mueller Investigators Say Findings More Damaging To Trump Than Barr Has Let On
Comey Says He Fears Possible Counterinvestigation After Mueller Report (Pol.)
US Senators Want Stiff Sanctions To Deter Russia Election Meddling (R.)
Maybe Politics Matters After All (John Rubino)
Economist: Brexit Will Happen And Trump Fans Are ‘Economically Illiterate’ (FN)
UK MPs Back Brexit Delay Bill By One Vote (BBC)
No Deal Brexit Measures Needed To Keep Planes In Air And Troops On Ground (G.)
Top Labour Figures Demand Corbyn Secure Referendum (Ind.)
IMF Warns That Tech Giants Stifle Innovation And Threaten Stability (G.)
Next Phase in Trucking Boom-Bust Cycle Has Started (WS)
‘Excluding Everything That Makes China What It Is’ (Crooke)



Let’s start with the Seattle Times, because this article strongly hints that Boeing’s problems cannot possibly be solved with a software tweak. It’s a hardware issue as much as anything else. Cutting corners until there’s no corner left. And well over 300 people lost their lives due to this.

“Normal” planes have 3×3 sensors. The 737MAX effectively has one. And it was known to fail.

Lack Of Redundancies On Boeing 737 MAX Baffles Its Developers (ST)

Boeing has long embraced the power of redundancy to protect its jets and their passengers from a range of potential disruptions, from electrical faults to lightning strikes. The company typically uses two or even three separate components as fail-safes for crucial tasks to reduce the possibility of a disastrous failure. Its most advanced planes, for instance, have three flight computers that function independently, with each computer containing three different processors manufactured by different companies. So even some of the people who have worked on Boeing’s new 737 MAX airplane were baffled to learn that the company had designed an automated safety system that abandoned the principles of component redundancy, ultimately entrusting the automated decision-making to just one sensor — a type of sensor that was known to fail.

Boeing’s rival, Airbus, has typically depended on three such sensors. “A single point of failure is an absolute no-no,” said one former Boeing engineer who worked on the MAX, who requested anonymity to speak frankly about the program in an interview with The Seattle Times. “That is just a huge system engineering oversight. To just have missed it, I can’t imagine how.” Boeing’s design made the flight crew the fail-safe backup to the safety system known as the Maneuvering Characteristics Augmentation System, or MCAS.

A faulty reading from an angle-of-attack sensor (AOA) — used to assess whether the plane is angled up so much that it is at risk of stalling — is now suspected in the October crash of a 737 MAX in Indonesia, with data suggesting that MCAS pushed the aircraft’s nose toward Earth to avoid a stall that wasn’t happening. Investigators have said another crash in Ethiopia this month has parallels to the first. [..] one problem with two-point redundancies is that if one sensor goes haywire, the plane may not be able to automatically determine which of the two readings is correct, so Boeing has indicated that the MCAS safety system will not function when the sensors record substantial disagreement.

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The Wall Street Journal counterbalances the NYT and WaPo.

Trolling the Mueller Report (WSJ Op-ed)

Democrats are still reeling from Special Counsel Robert Mueller’s conclusion that the Trump campaign did not collude with Russians in 2016. But they’ve now hit upon a political comeback strategy: Accuse Attorney General William Barr of a coverup. That’s the context for Wednesday’s decision by House Democrats to authorize subpoenas, on a partisan vote, demanding that Mr. Barr immediately hand over the entire Mueller report and its supporting evidence. This is intended to give the impression, abetted by a press corps that was fully invested in the collusion story, that Mr. Barr is somehow lying about Mr. Mueller’s real conclusions. That’s preposterous, since Mr. Barr’s four-page letter quotes directly from Mr. Mueller’s report.

The AG surely understood on releasing the summary of conclusions last week that he would be open to contradiction by Mr. Mueller if he took such liberties. Mr. Barr also knew he’d be called to testify before Congress once the rest of the report is released. Mr. Barr has committed to releasing as much of the report as possible subject to Justice Department rules. He’s working with the special counsel’s office to make redactions required by grand-jury rules of secrecy, intelligence sources and methods, ongoing investigations, and “the personal privacy and reputational interests of peripheral third parties.” Under Justice rules relating to special counsels, Mr. Barr has no obligation to provide anything beyond notifying Congress when an investigation has started or concluded, and whether the AG overruled a special counsel’s decisions.

Mr. Barr’s notice to Congress that Mr. Mueller had completed his investigation said Mr. Mueller was not overruled. Congress has no automatic right to more. The final subparagraph of DOJ’s rule governing special counsels reads: “The regulations in this part are not intended to, do not, and may not be relied upon to create any rights, substantive or procedural, enforceable at law or equity, by any person or entity, in any matter, civil, criminal or administrative.” Mr. Barr has made clear that he appreciates the public interest in seeing as much of Mr. Mueller’s report as possible. Yet his categories of information for review aren’t frivolous or political inventions. The law protecting grand-jury secrecy is especially strict, as even Democrats admit.

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Glenn Greenwald tweets about this:

Trump/Russia conspiracists are like zombies: the dream can’t die. Their new hope is a) anonymously sourced, b) bereft of even one specific, c) irrelevant to *conspiracy* as opposed to obstruction & d) unrelated to the fact that Mueller indicted *zero* Americans for conspiracy

[..] Mueller could have concluded he thinks Trump was guilty of obstruction, but chose not to. He could have alleged a Trump/Russia conspiracy, or could have charged Trump officials & family members with conspiring with Russia, but didn’t. These last-gasp efforts don’t change that.

[..] Anyway, we’ve had 3 years of anonymously-sourced “bombshells” journalists spend 16-24 hours tiring themselves out celebrating on Twitter, only for it to fizzle into nothing (ie: no indictments from Mueller for conspiring with Russia). Why not have one more? An addict’s last fix.:

Mueller Investigators Say Findings More Damaging To Trump Than Barr Has Let On

The conclusions of special counsel Robert Mueller’s investigation are more damaging to President Donald Trump than Attorney General William Barr has revealed, the New York Times reported late Wednesday. The Times said some investigators who were part of the probe are frustrated that Barr has undersold the findings, which may be creating a misleading narrative that could be hard to overcome if and when the full report is released. The sources did not specify how they believe the report is more damaging to Trump. The investigators told the Times that they had written numerous summaries of their main conclusions, which were not included in Barr’s summary of the report. Barr said the report found no collusion between Trump and Russia, but did not exonerate Trump on the issue of obstruction of justice. House Democrats have pressed Barr to release the full report, but Barr claims parts of it needs to be redacted first for security reasons.

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It would be crazy if there isn’t one.

Comey Says He Fears Possible Counterinvestigation After Mueller Report (Pol.)

Former FBI Director James Comey on Tuesday condemned President Donald Trump’s calls for a possible investigation into how special counsel Robert Mueller’s Russia inquiry started, adding that it creates a troubling precedent. During an interview with CNN’s Christiane Amanpour, Comey was asked about whether he feared possible counterinvestigations. “I don’t fear it personally. I fear it as a citizen,” he said. “Right? Investigate what? Investigate that investigations were conducted? What would be the crime you’d be investigating? So it’s a terrible cycle to start.” Several days after Attorney General William Barr released his summary of Mueller’s report, Trump and his team have called for investigations into how the probe began.

“Hopefully, somebody is going to look at the other side,” Trump told reporters late last month. The president’s personal lawyer, Rudy Giuliani, has also made similar statements. On Tuesday, Trump continued to advocate for an examination of how the FBI and Mueller investigations began. “I hope they now go and take a look at the origins of the investigation, the beginnings of the investigation,” the president told reporters at the White House on Tuesday. “You look at the origin of the investigation, where it started, how it started, who started it.” “Whether it‘s [former FBI Deputy Director Andrew] McCabe or Comey or a lot of them, where does it go? How high up in the White House did it go?“ Trump continued, calling on reporters to investigate the origins of Mueller‘s probe, even dangling the prospect of a Pulitzer Prize to journalists in the room.

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Whatever powers these people have should be taken away from them. Both sides of the aisle want war with Russia.

US Senators Want Stiff Sanctions To Deter Russia Election Meddling (R.)

U.S. Republican and Democratic senators introduced legislation on Wednesday seeking to deter Russia from meddling in U.S. elections by threatening stiff sanctions on its banking, energy and defense industries and sovereign debt. The “Deter Act” is the latest effort by U.S. lawmakers to increase pressure on Moscow over what they see as a range of bad behavior, from its aggression in Ukraine and involvement in Syria’s civil war to attempts to influence U.S. elections. The measure was introduced by Senators Chris Van Hollen, a Democrat, and Marco Rubio, a Republican. They offered a similar measure last year, when it also had bipartisan support but was never brought up for a vote by the Senate’s Republican leaders, who have close ties to President Donald Trump.

Trump has gone along with some previous congressional efforts to increase sanctions on Russia, although sometimes reluctantly. Backers of stronger action against Russia believe such measures will have better prospects in 2019, given control of the House of Representatives by Democrats, who are less reluctant than Trump’s fellow Republicans to push back against the White House. According to details of the legislation, first reported by Reuters, it would require the U.S. Director of National Intelligence (DNI) to determine, within 30 days of any federal election, whether Russia or other foreign government or anyone acting as an agent of that government, had engaged in election interference.

If the DNI found such interference occurred, the act would require, among other things, that mandatory sanctions be imposed within 10 days on, among others, Russian banks and energy companies. The act would mandate that sanctions be imposed on two or more of the following Russian banks: Sberbank, VTB Bank, Gazprombank, Vnesheconombank and Rosselkhozbank. It also would order the prohibition of all transactions subject to U.S. jurisdiction in Russian sovereign debt, Russian government bonds and the debt of any entity owned or controlled by Russia’s government.

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Very-long-time Automatic Earth friend John Rubino has a series of reasons why politics matter.

Maybe Politics Matters After All (John Rubino)

Looking strictly at the numbers it’s hard to work up much interest in whether Republicans or Democrats are in charge after 2020. Either way, trillion-dollar deficits and extremely easy money are guaranteed, which means the US – along with most of the rest of the world – will fall off a financial cliff shortly. After that, the only non-financial issue that will matter is war – and both parties seem about equally bloodthirsty these days. However, after the November congressional elections — in which Democrats with, ahem, assertive ideas and attitudes did extremely well — proposing big, potentially transformative change now looks like the best way to cut through the media clutter and gain a following.

So the Democrat base has lost its fear of the “S” word and is now embracing a list of policies that are designed to lock in their dominance for a generation, but which carry myriad unintended consequences. If the Dems were in charge today, there’s a good chance that they would: Make Washington D.C. a state This is a no-brainer for Democrats. Since DC voters skew liberal (no surprise for people who by and large work for the government), making it a state adds two guaranteed votes in the Senate and several solid votes in the House. That alone might be enough to tip the balance on many votes.

[..] The math of elector apportionment gives more per-capita clout to small states as a way of protecting them from the whims of the large. Without this advantage, according to fans of the Electoral College, candidates would ignore Wyoming and Rhode Island and spend all their time in population centers like Los Angeles and Dallas. Subsequent governments would favor big states over small; good luck to Nevada if it has a water dispute with California. In short, without the Electoral College, flyover country is toast. But with the Electoral College it’s possible to win the most votes and still lose the election, as has happened a couple of times recently to the Dems. As the following chart shows, a majority of Democrats would abolish the College while Republicans would keep it.

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The City sees itself as immune.

Economist: Brexit Will Happen And Trump Fans Are ‘Economically Illiterate’ (FN)

The received wisdom within the City is that Brexit will cause widespread disruption to the Square Mile. But according to Dr Savvas Savouri, chief economist at Toscafund Asset Management, the $4bn London-based investment firm, so great is the extent of foreign investment in UK companies that leaving the EU carries no risk for the City at all. In an interview with Financial News at Toscafund’s Covent Garden office, when asked what is the biggest risk posed by Brexit to London’s finance industry, the abrasive and outspoken economist replied: “Nothing. The whole point about Brexit is there’s too much insurable interest in the UK across Europe for it to fail [for the UK and the EU not to form an agreement]. Ireland would go into immediate deep recession, so would Spain, Malta, Greece and Cyprus.”

An IMF study in August estimated that a scenario where the UK leaves the customs union and single market, and trades with the EU on WTO terms — an orderly version of a no-deal Brexit — would impose long-term costs on Ireland of 4% of output, and between 0.2% and 0.5% on countries such as Spain and Greece. Economists have warned that a disorderly Brexit would likely hit such countries even harder. “They know a bad Brexit would undermine the pound, a currency in which they have large holdings,” Savouri said. Warming to his theme, he added that the lack of short interest in European stocks exposed to the UK suggests investors are not particularly worried about a crash-out Brexit. “The people in finance who tell you they’re worrying about Brexit are not putting their money where their mouth is.”

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The most dangerous majority on earth.

UK MPs Back Brexit Delay Bill By One Vote (BBC)

MPs have voted by a majority of one to force the prime minister to ask for an extension to the Brexit process, in a bid to avoid any no-deal scenario. Labour’s Yvette Cooper led the move, which the Commons passed in one day. The bill will need Lords approval to become law, while it is the EU who decides whether to grant an extension. It comes as talks between Prime Minister Theresa May and Labour leader Jeremy Corbyn to end the Brexit deadlock are set to continue. Discussions between the two leaders on Wednesday were described as “constructive”, but were criticised by MPs in both parties.

Meanwhile, Chancellor Philip Hammond has suggested that he expects Brussels to insist on a lengthy delay to Brexit and described a public vote to approve any final deal as “a perfectly credible proposition”. Ms Cooper’s attempts to prevent a no-deal departure from the EU passed by 313 votes to 312. The draft legislation by the former Labour minister would force the prime minister to ask the EU for an extension to the Article 50 process beyond 12 April and would give Parliament the power to decide the length of this delay.

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Yup. They voted down No Deal again, and the press keeps talking about what happens under a No Deal.

No Deal Brexit Measures Needed To Keep Planes In Air And Troops On Ground (G.)

Cabinet ministers were told they must agree emergency contingency plans to keep planes flying to North America and Australia, as well as keeping British troops legally in Bosnia, in case the EU forces a no-deal exit. Before their marathon cabinet meeting on Tuesday, the cabinet secretary, Sir Mark Sedwill, briefed ministers that major security and commercial decisions would need to be completed if Brussels rejected Theresa May’s plan to ask for a short extension to article 50. A cabinet source said the decisions were likely to result in large costs to the taxpayer and that decisions would also need to be taken on direct rule in Northern Ireland and payment of the UK’s £39bn divorce bill to the EU.

Among the decisions outlined in a 14-page document handed to ministers in Downing Street were: • New agreements would be required for air services with Canada, the US and Australia. • British troops in Bosnia currently serving as part of an EU force would need to be placed under Nato command. • Negotiations would need to be urgently completed on a future fisheries agreement so that EU fishing boats could be expelled from British waters. Sedwill, the UK’s highest-ranking civil servant, is said to have warned cabinet ministers that some of the biggest decisions were likely to be very difficult to reverse, because they involved international agreements.

The warnings from Sedwill, who is also May’s national security adviser, follow an earlier letter he wrote to ministers warning that no deal would lead to food price rises and a reduction in security capacity. The 14-page leaked letter, obtained on Monday by the Daily Mail, said no deal would result in the reintroduction of direct rule in Northern Ireland. Sedwill also warned that the UK would face a recession “more harmful” than the 2008 financial crisis and that food prices could increase by up to 10%. He wrote that it was possible that the government would come under pressure to bail out companies facing collapse due to the barriers to trade with the EU and that security services and police would face a reduction in their capabilities.

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May would be done if she’d give in.

Top Labour Figures Demand Corbyn Secure Referendum (Ind.)

Labour is on the brink of a major bust-up if Jeremy Corbyn fails to demand a second referendum as the price for any Brexit deal struck with Theresa May. A string of senior figures – including shadow foreign secretary Emily Thornberry – believe securing a public vote is an absolute must, while 11 MPs, including four frontbenchers, have written an open letter to Mr Corbyn in The Independent saying “it would be untenable for Labour not to insist” on one. As Mr Corbyn was in the prime minister’s office holding the talks, one of his party’s biggest trade union backers also endorsed a motion calling for a confirmatory referendum on any deal.

But key individuals on the Labour side of the talks indicated a new vote may not be one of his asks, with one shadow cabinet member attending having stated hours earlier that a deal endorsed by the party would not need a referendum. It comes despite Labour, and indeed Mr Corbyn himself, backing a motion in the House of Commons days ago which called for a referendum on any Brexit plan passed by parliament.

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Yeah, we really trust the IMF in everything they say.

IMF Warns That Tech Giants Stifle Innovation And Threaten Stability (G.)

The International Monetary Fund has warned that the market power exercised by a small number of global companies threatens to stifle innovation and make it harder for central banks to deal with recessions. Adding its contribution to the growing public debate about the corporate power exercised by the US tech giants such as Google, Amazon, Apple and Facebook, the IMF said it would be concerned if there was any further increase in the clout of already dominant firms. The IMF said there was a need for stronger competition policy to ensure that established firms did not block the entry of potential rivals and called for excess profits to be targeted by a tougher international tax regime.

Although the study contained in the IMF’s forthcoming World Economic Outlook (WEO) did not mention any company by name, it said the past two decades had seen the concentration of market power among a small number of productive and innovative firms. Market concentrations tended to be higher in the US than in Europe, the IMF said, and in part reflected the growth of firms that exploited intangible assets. “Over the past two decades, a generally moderate but broad-based rise in corporate market power has been observed across advanced economies, driven primarily by a small fraction of firms.”

The chapter from the WEO noted that the big-picture economic implications of the trend had so far been “rather modest” and that the impact of rising market power on innovation had so far been positive. But the IMF said impact would become “increasingly negative if the market power of high mark-up firms, in particular, were to continue to rise in the future.”

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Just a cycle?!

Next Phase in Trucking Boom-Bust Cycle Has Started (WS)

This is one of the most cyclical industries, with legendary boom-and-bust cycles: Orders for Class-8 trucks plunged 67% in March compared to March last year, to 15,200 orders, the lowest March for orders since 2010, according to FTR Transportation Intelligence. These are the heavy trucks that haul consumer goods, equipment, commodities, and supplies across the US. This plunge comes after orders had already plunged 58% year-over-year in February and January and 43% in December. The chart shows the percent change of Class-8 truck orders for each month compared to the same month a year earlier. The year-over-year collapse in orders over the past four months are of the same or greater magnitude as those during the last transportation recession in 2015 and 2016:

The recipients of these orders are the truck manufacturers Peterbuilt and Kenworth (divisions of Paccar); Navistar International; Freightliner and Western Star (divisions of Daimler); and Mack Trucks and Volvo Trucks (divisions of Volvo Group). The industry is notorious for over-ordering, which then, once these trucks are built, leads to overcapacity, at which point freight rates take a hit. Trucking companies see this coming and slash their orders in advance. Hence the bust that inevitably follows the boom. The last transportation recession in 2015 and 2016 led to waves of layoffs at truck and engine manufacturers. But at the moment, truck manufacturers are sitting on what was a historic backlog of orders dating from the phenomenal boom that peaked last August at 52,400 orders, as this chart of total monthly class-8 truck orders shows (data via FTR):

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Alastair’s starting to feel goal-seeked. Like many Belt&Road views.

‘Excluding Everything That Makes China What It Is’ (Crooke)

In the past few weeks, we have witnessed a mini ‘Belt & Road’ unfolding across the northern Middle East – linking Iran to Iraq, to Syria, and to Lebanon – a ‘Belt and Road’ that, it is envisaged, ultimately will be assimilated into China’s greater BRI project. And – as telling – Lebanon, the eternal weathervane for the Middle East wind direction, seems to be cutting a 500-year-old umbilical linking it to Rome and Europe, to look rather to Moscow (to protect the regions’ Christians, to get its Syrian refugees home to Syria, and to move under President Putin’s protective ‘wing’ in preventing Bolton and Netanyahu from detonating chaos on their patch) – and to China.

More recently, the New Silk Road infrastructure initiative landed squarely in Italy, potentially giving some real substance (i.e. infrastructure) – especially in the case of Sicily – to the notion of a Mediterranean commonality. Both these events are linked by a single motive: How to return autonomy to these states; how to recover at least a modicum of decision-making – and to break free from the strait-jacket of economic stagnation, and the deadweight of stale political shackles. As Christina Lin has noted: “China for one takes the view that security follows economic development, and has made it clear that reconstruction comes before political settlement. It is adopting a regional approach to the Levant and now views Lebanon as a platform for reconstruction in Syria and Iraq”.

[..] Both Italy and the Levant are ‘civilisation-states’ in their own right. They do not need the EU ‘brand’ to reassure them of their status as ‘civilisation-states’. As Lebanon’s former Minister of Economy noted last year, China doesn’t “look at Lebanon as a small country of 4 million citizens, but as a country with huge potential given its geographical location”. The point here is precisely that ‘the West’ is no longer the West. There is the belligerent ‘West’ of Trump, Pence, Bolton and Pompeo – and this is the ‘West’ that is incrementally losing traction across the Middle East, and beyond.

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Home Forums Debt Rattle April 4 2019

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    Pablo Picasso Nude on a beach 1929   • Lack Of Redundancies On Boeing 737 MAX Baffles Its Developers (ST) • Trolling the Mueller Report (WSJ Op-e
    [See the full post at: Debt Rattle April 4 2019]

    V. Arnold

    Boeing 737 MAX

    Illustrative of our times in the wild, wild west…

    Dr. D

    “What would be the crime you’d be investigating?”

    I believe we’d be investigating how a sitting president authorized the extensive wiretapping of the opposing candidate without any source crime or evidence. I mean, unless that’s okay now, in which case Trump can go wiretap all Democrats two layers deep and see if any one of the thousand people swept up can be prosecuted so the GOP can win elections in a thousand year Reich. That’s democracy, right? Wiretapping and using the machine of government to sink your opponents?

    “Whatever powers these people have should be taken away from them.”

    Welcome to being a Conservative, where we don’t trust government, rein them in, and want them smaller, doing less, transferring power as far down to local, and over to non-government organizations as possible. Because we’ve said for 200 years this would happen, and named exactly the problems that would arise if it were allowed: war, theft, tyranny, oppression, death. “Government” has joined hands, Democrat and Republican, Liberal and Conservative, Corporate and State, to expand government, start wars, and expand their power by trampling the people. That’s what governments, and indeed all organizations do: expand and grow to their outer limits, and in a Government v People situation, they can only expand if the people are destroyed. But if you say they should do less, help less, and cost less, let people take care of themselves however they wish, you’re a villain, although between the two choices, government is generally far worse. It takes a government to start WWIII arms space race and attack multiple countries. It takes a government to imprison and torture Manning and Assange. As Rubino says.

    “Either way, trillion-dollar deficits and extremely easy money are guaranteed, which means the US ….will fall off a … cliff… After that, the only non-financial issue that will matter is war – and both parties seem about equally bloodthirsty.”

    So let them be smaller and give them less power, and they can make less war, death, and collapse, as is their nature.

    “Government is not reason, it is not eloquence,—it is force! Like fire, it is a dangerous servant, and a fearful master; never for a moment should it be left to irresponsible action.” Geo. Washington

    “Trump Fans Are ‘Economically Illiterate’ (FN)”

    Wow, they’ve read the “Economist”, the IMF, Ben Bernanke, and Paul Krugman, worshipped Llyod Blankfein and Jamie Dimon, collapsed the entire planet in 1999 and 2008, deficits are running $2 Trillion with no end in sight, Europe has irrationally negative rates, is nosediving with China now, and the PEOPLE are the economic illiterates? The people who told you not to do this in 1986, in 1994, in 2008, and every day right now, the ones who were right about how it was irrational, and that that sucking sound among others, would lead to [their] collapse and ruin? …But I’m sure it’s the poor and powerless who are really to blame, not the wealthy and influential who steered the ship in rejection of our constant shouting. Yup, we told you for 30 years and we’re the dummies.

    “No Deal Brexit Measures Needed To Keep Planes In Air And Troops On Ground (G.)”

    Oh noes! We won’t be able to bully and colonize Bosnia for oil and drugs anymore! Where will it end?

    “Top Labour Figures Demand Corbyn Secure Referendum (Ind.)”

    I was shocked yesterday. You mean May has never once yet discussed Brexit with Corbyn? 1st time in three years? Whiskey Tango Foxtrot. Just shows how not serious they are, every day of the week, every week of the year.

    “IMF Warns That Tech Giants Stifle Innovation And Threaten Stability (G.)”

    Look out IMF, talk like this is the road to competition and capitalism, their life-long arch-enemy.

    “‘Excluding Everything That Makes China What It Is’ (Crooke)”

    As the U.S. cuts off and embargoes every nation on earth one by one, soon they will have ring-fenced themselves (literally), and be a pariah state like North Korea. The world cheers and goes on without them and their troublemaking. Takes time, and the U.S. people may not care if that what it takes to stop empire, but…


    A million acres of Midwest farmland flooded with heavy rain on the way. Michael Snyder -Zero Hedge


    John Day

    I am linking to parts 1-3 of Economist, Michael Hudson’s recent interview, describing the competition between economies with periodic forgiveness of slavery and debt, “Jubilee”, and those with lending-at-interest by an oligarchic class, with the remainder of the society choked to debt peonage without property, or outright slavery. The Oligarchy at interest format was an aggressive and expansionist format, requiring resource extraction through conquest. It typified the Roman Empire, which collapsed for multiple reasons when it could not expand. It typifies the current financial regime.
    In the debt-at-interest scheme of oligarchy, an oligarchic class collects rent and plunder from all others, and clear-cuts forests rather than manage them for centuries. It is a short-term extraction scheme, which depletes the underlying economy or economies.
    Such extractive oligarchy is vulnerable to the natural collapse of the economy, to the French Revolution, and to the rise of a populist tyrant, more powerful than the other oligarchs, who aligns with a restive populace against the other oligarchs, to restore economic viability.
    Hudson gives clear historical examples.
    He also gives insights into how the concept of “Jubilee” was a reform presented as a conservative act of restoration in antiquity.
    The concept of history was different then.
    We are currently, globally, at a crossing of many roads. The USSR collapsed, and it is rising steadily with populism supported by the Putin government, and the oligarchy ceding a certain amount of power, in order to foster the stability and prosperity which has come with some rule of law.
    China is perhaps peaking in a populist economic boom, with rapid growth of wealth in recent decades. China is trying to rein-in the corrupt practices of local mafia-type organizations, to prevent collapse.
    The US and Western Europe have reached some limits to external colonial extraction, and are now consuming themselves through internal colonization (Greece) and self-digestion (student loans and bubble markets). Each exploited country and region has a particular story, and it is mostly variations on colonialism and debt/currency extraction of value, with as much fear and murder as required…
    “Mixed Economies” have some hard limits to the power of oligarchs, and this typified the US economy in the late 19th and early 20th centuries (with exception for railroad oligarchs). Classical Economics, culminating with Marx, viewed “economic freedom” opposite to neoliberal economics.
    Reading the history makes the present so much clearer, I think.

    The Delphic Oracle Was Their Davos, Part 1:

    The Delphic Oracle Was Their Davos, Part 2:

    The Delphic Oracle Was Their Davos, Part 3:

    The Post WW-2 oligarchy tightened up the connections between the financial and military arms by use of the “Deep State”, while maintaining the semblance of rule-of-Law, which exists as a baseline, with exceptions for those “more equal” (Clintons, Bush family, Rockefeller…) Thanks Eleni.
    The CIA Takeover of America in the 1960s Is the Story of Our Times. The Killing of the Kennedys and Today’s New Cold War

    The CIA Takeover of America in the 1960s Is the Story of Our Times. The Killing of the Kennedys and Today’s New Cold War

    Dr. D

    A million acres is probably true (it’s so hard to tell these days) but you have to know there’s a lot going on with that.

    One, there’s something like 900 million acres in the U.S. They are all uniquely different, and the rich lowlands of the rivers certainly have premium, but 1 million isn’t a lot all considered.

    Two, to some extent they flood every year. This isn’t in the news because usually it’s some area with some normal rise. But keep it in mind we’d have to compare a normal year (300k acres?) to this year. I have no stats on that.

    Three, it’s still quite early in many places, and although the planting occurs starting south and moving north, it’s even early in the south, like Arkansas. There is no continual rains, so it’s possible most can still dry off, leading to:

    Four, the planting in general has two lines: corn, which must be early, and soybeans, which can be late. So when these things happen, they shift structure, leading to price shifts later, but overall production holding fast. Wheat can be considered more specialty as is it planted either winter or spring but must be decided beforehand. It would be likely, but not definitive, that a good percentage of winter wheat acres hard flooded would in fact be lost. Some, although flooded, also would not. Spring wheat is planted a lot by special areas and growers, since it’s generally soft pastry wheat that is not as widespread as hard, bread winter wheat.

    Five, despite news, floods actually IMPROVE the fields, as that’s why there’s fabulous new silt in the river bottoms and farms there instead of the rocky uplands. They only discuss the soil that’s washed AWAY, not INTO. Both are true in their measure.

    Six, going the other direction, although a lot of the fields could dry out, there will be channels cut, topsoil lost, and they may need to get bulldozers and other heavy equipment out there to flatten the fields, remove trees and debris, and so on. Even were the soil good, you may not get the advantage of it until next year when you can smooth all your acres again. Leading to:

    Seven, there was not time in most areas to remove barns, silos, grain, anything, but especially heavy equipment. So the arm loaders and tractors you WOULD use to plant have all been filled with river water. Disks and plows are tough, tractors are tough and tall, but this is strictly unknown. In the main, those tractors are too large and too few and cannot be built or shipped in from other areas in any normal fashion.

    Eight, this particularly goes for the combines, which are million-dollar pieces of equipment, parked most of the year. They have time to repair them, but the cost and supply chain is challenging. That goes for the barns, the repair shops, and especially the grain silos and other things, which will be most on the river bottoms.

    You can see by this short list why this is not mentioned in the McNews we are now force-fed: it’s very complex and we don’t have the answers to these questions yet. It’s a big deal, but HOW big a deal we may not know for some time. Abandoned acres in PA or GA may plant hard to make up the loss, being sure the prices will be up this year. That will be GOOD for them, and keeping them from going under, although it’s at the expense of Nebraska and Missouri. Nothing can be done about that, as it is the way of the world, but at 900 Million acres farm alone, keep in mind America is a VERY big place, and has a LOT of zones and nooks.

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