Marc Chagall The Feast of the Tabernacles 1916
Famous last words: “If managed properly, they shouldn’t pose undue risks to the financial system.”
The volume of over-the-counter (OTC) interest rate derivatives traded globally soared by 141% in three years to $6.5 trillion per day in April 2019, according to the Bank for International Settlements’ new Triennial Survey of Global Derivatives Markets. In the prior survey period, April 2016, $2.7 trillion per day in trades were executed. Since 2001, the magnitude of trading volume has multiplied by a factor of 13, from $490 billion per day to $6.5 trillion per day, with a gigantic spike over the past three years: OTC derivatives are securities that are generally traded through a dealer network rather than on a centralized exchange such as the London Stock Exchange or the New York Stock Exchange.
Some derivatives can be explosive, such as the credit default swaps (CDS) that brought Lehman Brothers and AIG to their knees in the last crisis, and which still remain a threat today, especially with the U.S. government this week bowing to Wall Street pressure to dilute regulation that had been designed after the crisis to reduce the risks of these instruments. Interest rate derivatives, whose value rises and falls depending on the movement of interest rates, or sets of interest rates, tend to be more straightforward. They are often used as hedges by institutional and retail investors, banks and companies to protect themselves against changes in market interest rates. If managed properly, they shouldn’t pose undue risks to the financial system. The BIS attributed much of this 141% three-year surge in trading of these instruments to increased hedging and positioning “amid shifting prospects for growth and monetary policy.”
The “growth is good” idea won’t die unless it’s murdered.
In one of the most downbeat forecasts on the global economy that we’ve seen so far this year, the Paris-based organization of wealthy nations known as the OECD – the Organization for Economic Cooperation and Development – warned that the global economy is heading toward a recession, and that governments aren’t doing enough in terms of fiscal stimulus to try and boost the economy. “Escalating trade policy tensions are taking an increasing toll on confidence and investment, adding to policy uncertainty, weighing on risk sentiment in financial markets, and endangering future growth prospects,” the OECD said. The advocacy for fiscal stimulus follows reports that Germany is considering a “shadow budget” to bolster public investment as Europe’s economy slides.
“Our fear is that we are entering an era where growth is stuck at a very low level,” said OECD Chief Economist Laurence Boone said. “Governments should absolutely take advantage of low rates to invest in the future now so that this sluggish growth doesn’t become the new normal.” After cutting all of its forecasts from four months ago, the OECD now sees global growth slipping below 3% to 2.9%.
Of course, this pattern of cutting GDP forecasts is nothing new. The OECD became the latest to warn about the global economy, after the Fed, the ECB and the PBOC have all eased policy to try and bolster growth in recent weeks. But the OECD is convinced that without government stimulus, the global economy is headed for a protracted downturn.
“In perfect English and always engaging and crisply professional..”
Accustomed to being the first woman in influential leadership positions and speaking frankly to men in power, Christine Lagarde says manmade threats to the global economy can be “man-fixed.” Lagarde only last week left her post as head of the International Monetary Fund after eight years, the first woman to serve in that role, and she is expected to put another “first” on her resume by the end of the year: first woman to serve as president of the European Central Bank.She sees a world economy where growth is “fragile” and “under threat” from trade frictions and Brexit, and perhaps an over-reliance on the efforts of central banks like the ECB.
But while she tried to urge action during her time at the IMF — she took over in 2011 in the aftermath of the global financial crisis — she said a central bank should “stick to its mandate,” which perhaps is a clue to how she will run the ECB. Or perhaps not. She carefully avoided a commitment about how she would use her influence in the new post. In perfect English and always engaging and crisply professional, Lagarde sat down with AFP on Thursday to review her legacy at the Washington-based crisis lender, where she arrived after being the first woman finance minister of France. In bare numbers, her record is impressive: the IMF helped to avoid a global depression, 90 countries – nearly half of its members – benefitted from some form of lending or credit line during the crisis, and the lending capacity was doubled to $1 trillion.
They showed how vulnerable the Kingdom is. That’s all it took.
[..] it’s always important to consider that Arab Shiites in the Eastern province – working in Saudi oil installations – have got to be natural allies of the Houthis fighting against Riyadh. Houthi striking capability – from drone swarms to ballistic missile attacks – has been improving remarkably for the past year or so. It’s not by accident that the UAE saw which way the geopolitical and geoeconomic winds were blowing: Abu Dhabi withdrew from Crown Prince Mohammad bin Salman’s vicious war against Yemen and now is engaged in what it describes as a “peace-first” strategy. Even before Abqaiq, the Houthis had already engineered quite a few attacks against Saudi oil installations as well as Dubai and Abu Dhabi airports.
In early July, Yemen’s Operations Command Center staged an exhibition in full regalia in Sana’a featuring their whole range of ballistic and winged missiles and drones. The situation has now reached a point where there’s plenty of chatter across the Persian Gulf about a spectacular scenario: the Houthis investing in a mad dash across the Arabian desert to capture Mecca and Medina in conjunction with a mass Shiite uprising in the Eastern oil belt. That’s not far-fetched anymore. Stranger things have happened in the Middle East. After all, the Saudis can’t even win a bar brawl – that’s why they rely on mercenaries.
The US intel refrain that the Houthis are incapable of such a sophisticated attack betrays the worst strands of orientalism and white man’s burden/superiority complex. The only missile parts shown by the Saudis so far come from a Yemeni Quds 1 cruise missile. According to Brigadier General Yahya Saree, spokesman for the Sana’a-based Yemeni Armed Forces, “the Quds system proved its great ability to hit its targets and to bypass enemy interceptor systems.”
We Now Wait For the Next One.
The crisis about the Yemeni drone and cruise missile attack on two Saudi oil installations is for now over. The Saudis and the U.S. accuse Iran of being behind the “act of war” as Secretary of State Pompeo called it. The Saudis have bombed Yemen with U.S. made bombs since 2015. One wonders how Pompeo is calling that. The Yemeni forces aligned with the Houthi Ansarallah do not deny that their drones and cruise missiles are copies of Iranian designs. But they insist that they are built in Yemen and fired from there. President Trump will not launch a military attack against Iran. Neither will the Saudis or anyone else. Iran has deterred them by explaining that any attack on Iran will be responded to by waging all out war against the U.S. and its ‘allies’ around the Persian Gulf.
Trump sent Pompeo to Saudi Arabia to hold hands with the Saudi gangster family who call themselves royals. Pompeo of course tried to sell them more weapons. On his flight back he had an uncharacteristically dovish Q & A with reporters. Pompeo said: “I was here in an act of diplomacy. While the foreign minister of Iran is threatening all-out war and to fight to the last American, we’re here to build out a coalition aimed at achieving peace and a peaceful resolution to this. That’s my mission set, what President Trump certainly wants me to work to achieve, and I hope that the Islamic Republic of Iran sees it the same way. There’s no evidence of that from his statement, but I hope that that’s the case.”
The crisis is over and we are back to waiting for the next round. A few days or weeks from now we will see another round of attacks on oil assets on the western side of the Persian Gulf. Iran, with the help of its friends, can play this game again and again and it will do so until the U.S. gives up and lifts the sanctions against that country. The Houthi will continue to attack the Saudis until they end their war on Yemen and pay reparations.
That was his election pledge.
Benny Gantz, whose centrist bloc narrowly defeated Benjamin Netanyahu’s Likud party in a snap election, says he is forming a government that will exclude the current prime minister – signaling the end of Bibi’s era may be near. The ex-IDF chief said on Thursday that he would not accept Netanyahu’s offer to discuss a unity government, keeping good on his campaign pledge to create a ruling coalition that does not include Bibi. “I am interested and intend to form a broad and liberal unity government led by me,” he wrote in a tweet.
Speaking with reports, Gantz stressed that his Blue and White alliance “will listen to everyone, but we will not accept mandates imposed on us” – an apparent swipe at Netanyahu’s insistence that the pair should meet. Blue and White won 33 seats in the Knesset in Tuesday’s snap election, while Likud only secured 31. Gantz said that the results pave the way for him to become prime minister, assuming that a coalition, minus Bibi, can be formed. If Gantz fails to secure 61 seats in the Knesset, Israel’s political deadlock could continue, forcing the third election this year.
Blind. Completely blind.
Ryanair’s Chief Executive Michael O’Leary narrowly secured approval from shareholders on Thursday for a bonus scheme that could earn him 100 million euros over five years as he revealed up to 700 pilots could lose their jobs. The Irish low-cost carrier, Europe’s largest, has been battered by industrial disputes and the grounding of Boeing’s flagship 737 MAX. Having suffered from a shortage of pilots just a couple of years ago, O’Leary told investors there are now too many. He forecast the company would cut between 500 and 700 pilots as a sharp decrease in demand has seen the natural attrition rate collapse. To earn his 100 million euro bonus, O’Leary would need to reverse a near-50% fall in the company’s share price since 2017.
The share price hit a peak of 19.39 euros in August 2017 but was down 1.8 percent at 9.76 euros at 1330 GMT on Thursday. O’Leary secured the backing of 50.5% of shareholders for the scheme which will grant him 10 million share options if he doubles Ryanair’s profitability to 2 billion euros per annum and/or increase the share price to 21 euros per share. The size of the award “raises a red flag in terms of quantum and for our members,” said Jocelyn Brown of the UK Railway pension scheme, which voted against the deal. O’Leary said he was disappointed by the level of support and said he would take on investor concerns.
Got to say I’m skeptical about the Climate Strikes today. What have all these people given up? What have they pledged to no longer do?
In addition to playing a critical role in providing food, fibre, water, energy, medicines and other genetic materials, biodiversity is equally important in regulating climate, water quality, pollution, pollination, flooding and storm surges. It has vital social value, providing wellbeing when walking through forests or by rivers, or green spaces in cities. Since 1970, human activities have destroyed and degraded forests, grasslands, wetlands and other ecosystems and significantly altered 75% of the ice-free land surface. Most oceans are polluted with plastics, and over 85% of wetland area has been lost. This destruction of ecosystems has led to a million species (500,000 animals and plants and 500,000 insects) being threatened with extinction, although many are preventable if we improve our management of biodiversity.
The largest driver of biodiversity loss on land in recent decades has been land use change, primarily the conversion of pristine native habitats into agricultural systems to feed the world, while oceans are over-fished . This has been driven in large part by a doubling of the world’s population, a fourfold increase in the global economy, and a tenfold increase in trade. The challenge is to transform our agricultural and fishing practices, many of which are unsustainable today, into ones that produce the food we need while conserving biodiversity. For agriculture, this means using sustainable agroecological practices; less chemicals, fertilisers and pesticides; and protecting soils and pollinators.
The climate crisis and the loss of biodiversity are issues that affect each other. Global heating adversely affects genetic variability, species richness and ecosystems. Loss of biodiversity can adversely affect climate – deforestation increases the atmospheric abundance of carbon dioxide for example, a greenhouse gas. So it is essential that the issues of biodiversity loss and the climate crisis are addressed together.
The biggest threat to birds in Java is people who love them. In the west it’s Monsanto.
Bird populations in Asia and the US are “in crisis”, according to two major studies. The first concludes there are three billion fewer birds in the US and Canada today compared to 1970 – a loss of 29% of North America’s birds. The second outlines a tipping point in “the Asian songbird crisis”: on the island of Java, Indonesia, more birds may now live in cages than in the wild. Scientists hope the findings will serve as a wake-up call. The two studies are published in the journals Science and Biological Conservation. The North America study revealed how many birds were being lost across every type of habitat – from grasslands to coasts to deserts.
While it did not directly assess what was driving this, the scientists concluded that, among multiple causes, the major factor was habitat loss driven by human activity. This study, explained lead researcher Dr Ken Rosenberg from the Cornell lab of Ornithology and the American Bird Conservancy, was the first to “run the numbers” on bird populations. “We knew some species were declining,” he told BBC News, “but we thought that, while rare birds were disappearing, the more generalist birds – and those better adapted to human landscapes – would be filling in the gaps.” [..] the situation in Asia, as the other study has shown, is a particularly striking case of a human-driven extinction crisis.
The buying and selling of songbirds – many of which are caught from the wild – is huge business in parts of Asia, particularly on the island of Java in Indonesia. Around 75 million birds are kept as pets on Java. Many are sought after for bird singing competitions – often referred to as “Kicau-mania”. At these events, caged birds’ songs are judged on melody, duration and volume. Top prizes for the best singers can earn owners as much as £40,000 in the biggest contests. This culture, however, drives the capture of birds from the wild to satisfy demand. And that, researchers say, threatens the survival of numerous species. “The trade is estimated to be worth tens of millions of dollars to the Indonesian economy, so it is no surprise that it is a key regional source of both supply and demand for songbirds..
Murder she wrote.
BRAZILIAN PRESIDENT JAIR Bolsonaro is planning to push industrialization and development in the interior of the country’s Amazon basin. It is far from a new project. For more than a century, a series of Brazilian governments have sought to move into the country’s interior, developing — or, to be more precise, colonizing — the Amazon. From the populist president-turned-dictator who made one of the early industrial pushes into the forest in the 1930s to the military dictatorship that ruled the country for two decades from 1964 until 1985, the justifications have largely been the same — economic gain and geopolitical paranoia — as were the often poor results.
Take the dictatorship’s push. Known as Operation Amazon, the colonization plan hatched during the military government envisioned integrating the territory into Brazil through building roads and developing agricultural and corporate enterprises — all accomplished by settling people from the south, southeast, and northeast of the country and the coasts in the forest. As for the aim, the dictatorship’s motto for the project spoke volumes: “Occupy to avoid surrender.” The military government argued that a thinly populated Amazon might create avenues for foreign powers to invade Brazilian territory. “One aspect of the doctrine said that Brazil could not leave any empty space, because it could threaten national security,” said João Roberto Martins Filho, a professor at the Federal University of São Carlos who has spent decades researching the dictatorship.
“The idea was that it was necessary to channel activity into regions with smaller population density, and this became a state policy.” Like all the other so-called development pushes into the Amazon, the results were catastrophic — for the forest itself, but especially for the communities who already lived amid it. One highway, for instance, was designed to travel from the city of Manaus, on the Amazon River, to nearly the northern edge of the basin. “The highway is irreversible, for the integration of the Amazon into the country,” the army’s Col. João Tarcísio Cartaxo Arruda, who led the construction battalion, said in 1975, according to a document made available by the National Truth Commission.
“This road is important and must be constructed, whatever the cost. We will not change its layout, and the only burden for our battalions will be to pacify the Indians.” That pacification came through so-called demonstrations of force — using machine guns, grenades, and dynamite — against the Waimiri-Atroari tribe. In these moves and others like it, thousands of Indigenous people were massacred. In 1972, the Waimiri-Atroari had a population of 3,000; by 1983, their number was reduced to 350. The National Truth Commission estimates that at least 8,350 Indigenous people were killed by the military government.
The beauty of aging and death. Perhaps that only exists for those who leave behind a better world then they were born in.
Paraphrased: a society is doing well when old men plant trees whose shadow they know they will never sit in.
Whilst humans developed a limited life span and an acute awareness of that fact, the Turritopsis dohrnii, though it is in no way self-aware, developed the ability to reverse its ontogeny, to turn back its life cycle in times of threat – be it environmental or simply the threat of old age. Many might begrudge the fact this ability had been bestowed on a bobbing blob of mindless jelly. Indeed, a variety of life forms are envied for their selective advantages – speed, strength, flight, longevity, regeneration, and perhaps also that living-in-the-moment quality associated with blissful ignorance: lacking awareness of their mortality, animal kingdom dwellers are unperturbed by advancing years, and live their lives to the last breath in simple pursuit of food, play and romance.
Consciousness of selfhood, of our place in the universe, and of our relationship with all living things, comes at a cost: the certainty of our demise and, what is often worse, the demise of others. This uniquely human grasp of the inevitability of death, and of the fact it can occur without warning, embodies the potential for immense psychological distress – we share with all animals, after all, the drive for self-preservation – but it also carries the potential for a richly meaningful and purposeful life, and research appears to support this.
A growing body of experimental evidence derived from Terror Management Theory, an approach that emerged from within existential social psychology, suggests increased awareness of mortality leads, correspondingly, to increased investment in those resources that provide meaning – social and cultural structures such as family, community and social identities – and that this in turn reduces the fear of death. But if pondering death can bring a sense of purpose, of meaning, and perhaps a degree of happiness to one’s life, might pondering the issues of age do the same?