May 152019
 
 May 15, 2019  Posted by at 10:19 am Finance Tagged with: , , , , , , , , ,  


Claude Monet Meules 1890 (sold for $110 million yesterday)

 

25 White Men In Alabama Senate Vote To Ban Abortion (AP)
62% Of US Millennials Live Paycheck To Paycheck (ZH)
More Than Half Of Greeks Aged 25-34 Live With Parents (K.)
One In Three UK Teenagers ‘Ashamed Of Their Body’ (G.)
May Wants Parliament To Have A Fourth Vote On Her Brexit Deal (G.)
Brexit Armageddon (Jamison)
Donald Trump Jr To Testify Before Senate Committee (AP)
Xi Says ‘No Clash’ Of Civilisations Amid US Trade War (AFP)
China Calls For “People’s War” Against The US (ZH)
The Future Of Food: Jellyfish Supper Delivered By Drone (G.)
Tropical Forests ‘Empty’, Poaching Slashes Large Mammal Populations (Ind.)

 

 

Turns out the Flintstones was a series about the future, not the past.

25 White Men In Alabama Senate Vote To Ban Abortion (AP)

Alabama’s Senate passed a near-total ban on abortion Tuesday, sending what would be the nation’s most stringent abortion law to the state’s Republican governor. The GOP-dominated Senate voted 25-6 to make performing an abortion at any stage of pregnancy a felony punishable by up to 99 years or life in prison for the abortion provider. The only exception would be when the woman’s health is at serious risk. Senators rejected an attempt to add an exception for rape and incest. The amendment was voted down 21-11, with four Republicans joining Democrats.


“You don’t care anything about babies having babies in this state, being raped and incest,” Democratic Sen. Bobby Singleton said on the Senate floor after the amendment’s defeat. “You just aborted the state of Alabama with your rhetoric with this bill.” Bill sponsor Rep. Terri Collins said she expects Gov. Kay Ivey to sign the ban into law. Ivey has not publicly commented on what she’ll do. The lopsided vote suggests a veto could be easily overcome. Ivey spokeswoman Lori Jhons said in a statement after the vote that “the governor intends to withhold comment until she has had a chance to thoroughly review the final version of the bill that passed.”

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I’m more impressed by how much of each generation is dirt poor. It’s not just millenials.

62% Of US Millennials Live Paycheck To Paycheck (ZH)

Almost two-thirds of Millennials are living paycheck to paycheck, and only 38% feel financially secure, according to Charles Schwab’s 2019 Modern Wealth Index Survey. According to the survey, Millennials (ages 23 to 38) seem troubled when it comes to their financial well being. The study examined the finances of 1,000 Americans from different generations, but for our sake, we’re only concentrating on approximately 380 Millennials surveyed by Schwab. Millennials conveniently blamed social media platforms for their dire financial straits. The need to spend was a symptom of fear of missing out (FOMO) of their friend’s experiences seen on social media posts, stories, and or feeds.

“The burden to ‘keep up with the Joneses’ has been part of our culture for decades, but it appears that social media and the fear of missing out (FOMO) have increased the pressure to spend,” said Terri Kallsen, executive vice president and head of Schwab Investor Services. “Spending is not the enemy, but when we allow social pressure or other forces to lure us into spending beyond our means, it can impact long-term financial stability and become a larger problem.” Logica Research conducted the online study for Schwab during the first two weeks in Feburary.

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And a million Greeks earn €200-€500 a month.

More Than Half Of Greeks Aged 25-34 Live With Parents (K.)

More than half of Greeks in their mid-20s to mid-30s live with their parents, a significantly larger proportion than the average of 28.5 percent in the 28-member European Union, according to the results of a survey by the bloc’s statistics service Eurostat which were made public on Tuesday. Specifically, 56.3 percent of Greeks aged 25 to 34 said they lived with their parents in 2018, the highest rate in the EU after Croatia and Slovakia, where the rates were 59.7 percent and 57 percent respectively.


The repercussions of Greece’s economic crisis appear to have played a role in keeping Greeks at home for longer, with statistics pointing to a slight but steady increase from 50.6 percent in 2010 to 53.4 percent in 2015 and 56.3 percent last year. The rate was the lowest in Northern European countries, such as Sweden with 6 percent, Finland on 4.7 percent, and Denmark, where 3.2 percent of the 25-34 age group live with their parents.

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That’s why we call them “social” media.

One In Three UK Teenagers ‘Ashamed Of Their Body’ (G.)

Almost a third of British teenagers feel ashamed of their body, with imagery of “idealised” bodies on social media driving their insecurity, new research has found. The same number of young people have changed their eating habits in an effort to alter how they look, a survey of teenagers undertaken for the Mental Health Foundation (MHF) shows. Experts said the results were alarming, particularly because body image anxiety can trigger self-harm and suicidal thoughts in teenagers. The findings prompted calls for advertisements for weight loss and cosmetic surgery to be vetted and for social media firms to do more to prevent young people feeling bad about their bodies. “Our survey has shown that millions of young people in Britain are worrying about their body image,” said Jane Caro, the foundation’s programme lead for families, children and young people.


“Worries about body image can lead to mental health problems and, in some instances, are linked to self-harm and suicidal thoughts and feelings.” Overall, 31% of 13- to 19-year-olds feel ashamed of their body shape, according to the YouGov survey of 1,118 British teenagers, which was weighted to represent everyone at those ages. Slightly more – 35% – had stopped eating or limited what they ate because they were worried about their body. In addition, 35% of respondents worried about their body often or every day , 37% felt upset and ashamed about it and 40% said remarks by friends had made them worry about their appearance. Two in five said pictures they had seen on social media had made them worry about their body.

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She should see a shrink.

May Wants Parliament To Have A Fourth Vote On Her Brexit Deal (G.)

Theresa May has pledged to give MPs another opportunity to vote on Brexit early next month, with or without Labour’s backing, after Jeremy Corbyn raised concerns about her ability to deliver on a cross-party deal. The prime minister called a meeting with the Labour leader on Tuesday night to take stock of the Brexit negotiations, as the government sought to inject fresh urgency into the process. The pair held an hour-long meeting alongside the two parties’ chief whips. A Labour spokesperson said: “[Corbyn] set out the shadow cabinet’s concerns about the prime minister’s ability to deliver on any compromise agreement. In particular, he raised doubts over the credibility of government commitments, following statements by Conservative MPs and cabinet ministers seeking to replace the prime minister.”


But Downing Street insisted that the government was determined to bring forward the key piece of Brexit legislation – the withdrawal agreement bill – in the week beginning 3 June. “It is imperative we do so then if the UK is to leave the EU before the summer parliamentary recess,” a spokesman said. May’s divided cabinet agreed on Tuesday that the talks with Labour should continue, despite the lack of substantive progress so far, but set a fresh deadline of the summer recess for parliament to pass the bill. The 3 June date for tabling the legislation suggests the government is effectively setting a deadline for achieving progress in the cross-party talks – although neither side is keen to walk away before the European parliament elections on 23 May.

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“..despite the British Prime Minister Theresa May stating over 108 times that the UK would definitely be leaving the EU on March 29th 2019.”

Brexit Armageddon (Jamison)

It has been an appalling period in British politics and government. Unlike any period experienced in living memory. The British State, once high and mighty, lording it over other nations with typical English condescension and patronising arrogance, has well and truly come crashing down to Earth with a very heavy bump thanks to Brexit. It will never be the same again. The defenestration of the British Government and wider British State machine including its intelligence and security services has been a spectacular sight to behold. The credibility of the British State and its democracy has been ripped to shreds. For three years now the British ‘nation’, Parliament, Government, Civil Service, media and economy has been consumed by one issue and one issue alone, whether or not the UK will depart the European Union after the 2016 Referendum.

I say whether or not because after having almost three years to prepare for the UK exit from the EU as voted on by over 17 million British people in the largest and longest democratic exercise in the history of modern British democracy, the ‘fixed’ departure date of March 29th 2019 came and went, despite the British Prime Minister Theresa May stating over 108 times that the UK would definitely be leaving the EU on March 29th 2019. Who will ever be able to take seriously the word of a future British Prime Minister or a future British Government after this utter farce, but deadly serious debacle, on a major national and international scale. The behaviour in its half democratic Parliament has been deeply disturbing and has shown the world that the British are totally irrational and have gone absolutely bonkers.

[..] One matter is very clear throughout this Brexit ordeal. This is a combined collective failure of the United Kingdom as a whole. The British Government and State have failed. British MPs have failed their constituents. British civil servants have failed. The British media have failed. There is no unity, no meaning, no purpose, no discipline and no sense of comradeship in the UK – if there ever truly was. Perhaps it is a society incapable of it and perhaps that is why it deserves to falter and fail with the United Kingdom disintegrating and disappearing for good. Ergo, perhaps it is high time, once and for all for the British State to quit its bad habit of interfering in other nations affairs, far greater nations, while it attempts to put its Brexit house in order.

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They must really not like Mueller, who spent 29 hours questioning Don Jr. What questions did he miss? Don Jr is a piece of crap, but come on.

Donald Trump Jr To Testify Before Senate Committee (AP)

Donald Trump Jr will testify in a closed-door interview with the Senate intelligence committee next month, pulling the two sides back from a confrontation over a subpoena as part of the panel’s Russia investigation. Under the terms of the deal between the president’s son and lawmakers, Trump Jr will talk to the committee in mid-June for up to four hours, according to two people familiar with the agreement. The people spoke on condition of anonymity on Tuesday to discuss the confidential terms.

The deal comes after the panel subpoenaed Trump Jr to discuss answers he gave the panel’s staff in a 2017 interview. He had backed out of interviews twice, prompting the subpoena, according to people familiar with the Senate intelligence committee chairman’s remarks to a GOP luncheon last week. Those people spoke on condition of anonymity to discuss Richard Burr’s remarks in the private senators’ meeting. The deadline for Trump Jr to respond was Monday, according to one of the people familiar with the terms, and he expected to be held in contempt for declining to be interviewed. But the committee reached out Monday evening and the deal was struck.

A spokeswoman for Burr declined to comment. The North Carolina Republican has weathered fierce criticism for the subpoena from the president and his GOP colleagues. Trump said on Tuesday said he believed that his son was being treated poorly. “It’s really a tough situation because my son spent, I guess, over 20 hours testifying about something that Mueller said was 100% OK and now they want him to testify again,” Trump told reporters at the White House before traveling to Louisiana. “I don’t know why. I have no idea why. But it seems very unfair to me.”

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“..the first US “great power competitor that is not Caucasian”.

Xi Says ‘No Clash’ Of Civilisations Amid US Trade War (AFP)

Chinese President Xi Jinping declared Wednesday there was “no clash” of civilisations and denounced racial supremacy as “stupid” amid tensions with the United States and concerns over Beijing’s rising global power. His remarks came after a top-level US official last month described the rivalry between China and the US as “a fight with a really different civilisation and a different ideology”. Kiron Skinner, the director of policy planning at the US State Department, put it in racial terms, telling a security forum that China was the first US “great power competitor that is not Caucasian”.


“Thinking that one’s own race and culture are superior, and insisting on transforming or even replacing other civilisations is stupid in its understanding and disastrous in practice,” Xi said at the opening ceremony of the Conference on Dialogue of Asian Civilisations in Beijing. “There is no clash between different civilisations, (we) just need to have the eye to appreciate the beauty in all civilisations,” he added, without mentioning the United States. Xi’s speech comes less than a week after trade negotiations between Washington and Beijing took a turn for the worse, with the US hiking tariffs on $200 billion in Chinese merchandise and targeting duties on $300 billion more. On Monday, China retaliated with an announcement that it would raise tariffs on $60 billion worth of US goods from June 1.

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This sounds desperate.

China Calls For “People’s War” Against The US (ZH)

While market mood has shifted diametrically from yesterday, with stocks sharply higher on Tuesday following what has widely been interpreted as conciliatory comments from both president Trump and various members of China’s ruling elite, one would be hard pressed to find any de-escalation amid the Chinese press commentaries written in the aftermath of the latest escalation in trade war between the US and China. In a series of editorials and op-ed articles published Monday and Tuesday, Chinese state media slammed what it labeled the Trump administration’s “greed and arrogance”, called for a “people’s war” targeting the US “with precision” as China begins a “fight for a new world.”

“The most important thing is that in the China-US trade war, the US side fights for greed and arrogance … and morale will break at any point. The Chinese side is fighting back to protect its legitimate interests,” the nationalist, state-owned Global Times tabloid wrote . Urging indirect boycott of US goods and services, the editorial slammed Trump and suggested a nation-wide uprising against the US aggression: “The trade war in the US is the creation of one person and one administration, but it affects that country’s entire population. In China, the entire country and all its people are being threatened. For us, this is a real ‘people’s war.'” Whether this means a renewed collapse in Chinese iPhone sales remains to be seen – for confirmation, watch for a new guidance cut from Apple in the coming days.

The Global Times also accused the Trump administration of misleading Americans about the victims of US tariffs. It singled out Larry Kudlow’s interview on “Fox News Sunday” in which Trump’s top economic advisor said that US consumers would also suffer from the trade war, contradicting Trump’s claim that China would foot the bill. More than just a retaliation to “unprovoked” US aggression, China now sees its response as a crusade against the western style of life. During a prime time broadcast on Monday, CNN reported that the state broadcaster CCTV also aired a statement saying that China would “fight for a new world.”

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Progress defines our civilization.

The Future Of Food: Jellyfish Supper Delivered By Drone (G.)

The food of the future could come in the form of stick-on patches and pills or be delivered by intravenous drip, according to a report that predicts what and how we could be eating as far ahead as 150 years from now. Jellyfish suppers washed down with algae milk and bread made from insect protein may eventually become the norm, while shoppers will be able to pick up “lab-grown” meat kits from dedicated supermarket aisles – or get them delivered by drone. The report, commissioned by Sainsbury’s, the UK’s second largest supermarket, with input from futurologists and plant scientists, explores what we will be eating and how food will be produced in 2025, 2050 and in 2169. It predicts that advances in technology and artificial intelligence will allow diets to be personalised and give consumers the option to consume nutrients and vitamins they need through a patch or pill, or in fortified foods.


More of us – driven by unprecedented awareness of animal welfare, health concerns and eco-anxiety – will put the planet first when writing our shopping list, the report says. It notes that current foods are not sustainable for an expanding global population that is predicted to increase to 9 billion in 30 years, and more than 11 billion in the next 150 years. Sainsbury’s predicts that by 2169 it could be routine for people to hold details of their nutritional and health information in a personal microchip embedded in their skin, which will trigger an alert to the supermarket. It would then deliver by drone suitable food and drink based on their planned activities for the coming days.

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“The biggest declines were seen in Western Africa, with more than 70 per cent population reductions.”

Tropical Forests ‘Empty’, Poaching Slashes Large Mammal Populations (Ind.)

Illegal hunting is causing catastrophic declines in mammal populations living in the world’s remaining tropical forests, a new study has warned. Jaguars, leopards, elephants and rhinos have seen population declines of 40 per cent in just 40 years and the study warned that hunting – half of which is done illegally – has left many tropical forests “empty” of wildlife. Even the world’s most pristine jungles are having their ecosystems damaged as key species are wiped out by hunters looking to collect valuable horns and bones, an international team of researchers lead by the Radboud University in Holland, found. Within the tropics, only 20 per cent of remaining habitats are considered intact. “Without adequate measures wildlife hunting will increase in the future,” lead researcher Dr Benítez-López told The Independent.


“Our calculations show that even in protected areas mammal populations could be under hunting pressure, particularly in Western and Central Africa, and South East Asia. If projections of human population growth for Africa are true, the demand will continue to increase. Plus there are many roads planned that will traverse tropical forests.” Until now there were vast understudied areas in the tropics where hunting impacts on mammal communities were unknown, according to the study which is published in the Plos Biology journal. The biggest declines were seen in Western Africa, with more than 70 per cent population reductions. Researchers found primates and pangolins were most at risk.

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Nassim Nicholas Taleb was asked whether public protests in Athens is a Black Swan Event. He replied: “No. The real Black Swan Event is that people are not rioting against the banks in London and New York.”

 

 

 

 

Jan 262017
 
 January 26, 2017  Posted by at 10:32 am Finance Tagged with: , , , , , , , , , ,  


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

Trump Loves Debt, But It Won’t Love Him Back (BBG)
US Tax Reforms Could ‘Transform’ Global Oil Market (R.)
Trump Prepares Orders Aiming at Global Funding and Treaties, UN (NYT)
Trump Starts A ‘Sanctuary City’ War With Liberal America (BBC)
Kyle Bass Calls Trump ‘Gasoline’ on Smoldering Fire in China (BBG)
China Keeps 3% Budget Deficit Goal For 2017 As Debt Risks Grow (R.)
China Is Becoming ‘Increasingly Risky’ Because Of Its Economy (CNBC)
Dutch Respond To Trump’s ‘Gag Rule’ With International Safe Abortion Fund (G.)
Why the Corrupt, Worker-Hating New Democrats Must Be Purged (Bill Black)
Pippa Malmgren: The Social Contract In The West Is Broken (SLD)
Seymour Hersh Blasts Media For Promoting Russian Hacking Story (IC)
Austerity Economics Has Just Been Smashed. By The IMF. (GDB)
The Super Rich Are Preparing For The End Of The World (CNBC)
Rome Mayor Raggi Says She Received Summons From Prosecutors (BBG)
Deal On Greek Bailout’s Second Review Possible At February Eurogroup (R.)
“INAUGURATION DAY” (Bad Lip Reading)

 

 

Catch 20-something.

Trump Loves Debt, But It Won’t Love Him Back (BBG)

President Donald Trump, the self-proclaimed king of debt, may end up with a revolt on his hands.He wants to spend billions of dollars to rebuild American highways and bridges to double economic growth to about 4% a year. He wants to preserve medical benefits for the poor and elderly. And he’s selected someone to oversee the national budget who’s fundamentally opposed to huge piles of debt and pledges to reduce the nation’s deficit.This recipe doesn’t add up, either in theory or practice. Even if Trump finances his promised infrastructure plans entirely by cutting other government services, the nation’s debt load is forecast to surge by trillions of dollars over the next decade.

Trump faces two big problems when grappling with the U.S. debt load: an aging population that’s becoming sicker and inauspicious bond math. If Trump succeeds in fostering substantially higher growth rates, as he’s promised, then interest rates will most likely rise much more than forecast. That’ll make it materially more expensive for the nation to service its debt.Even without much more growth, the U.S. deficit will likely increase as interest rates rise. That’s according to the Congressional Budget Office, a nonpartisan group that analyzes the U.S. economy, which just released its forecast for the nation’s deficit and debt load over the next decade.

Its baseline scenario calls for gradually rising benchmark borrowing costs, with 10-year Treasury yields leveling out at about 3.6% by 2022 from about 2.5% today. Even with that relatively modest projection, CBO analysts wrote that “the government’s interest payments on that debt rise sharply over the next 10 years — nearly tripling in nominal terms and almost doubling relative to GDP.”Interest expense will rise to $768 billion in 2027 from $270 billion in 2017 under the CBO’s base-case scenario.But let’s say Trump succeeds in his attempt to foster more economic growth. That’ll mean that inflation will rise, prompting investors to demand higher U.S. Treasury yields to offset steadily rising consumer prices. Jeffrey Gundlach, the bond guru who runs DoubleLine Capital, said after the election that U.S. 10-year government bond yields could reach 6% in five years. In that case, the interest expense would balloon much more than expected, substantially eating into the nation’s budget.

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“We expect WTI could move to a $10 per barrel premium to Brent from a $3 discount – a $13 (+25%) relative move immediately.”

US Tax Reforms Could ‘Transform’ Global Oil Market (R.)

The push by Republicans in the U.S. House of Representatives for a shift to border-adjusted corporate tax (BTA) could push U.S. crude prices higher than the global benchmark Brent, triggering large-scale domestic production, according to analysts at Goldman Sachs on Tuesday. The measure, known as border adjustment, intends to boost U.S. manufacturing by taxing imports while exempting U.S. business export revenues from corporate taxation. Goldman said it anticipates a 25% jump in the prices of U.S. crude futures, also known as West Texas Intermediate (WTI), and refined products in comparison to the global prices if the switch is implemented.

The investment bank, however, said that uncertainty on whether such a policy will go ahead is high due to concerns about WTO-non compliance and transition issues and oil futures currently only imply a 9% probability for such a shift. “If implemented, the impacts on the oil market would be significant,” Goldman said. “We expect WTI could move to a $10 per barrel premium to Brent from a $3 discount – a $13 (+25%) relative move immediately.” Brent crude futures were trading on Tuesday at a $2.40 per barrel premium to WTI. The appreciation in prices could be an incentive for producers to sharply increase activity, the bank said warning, that the ramp up in U.S. production in a market only starting to rebalance would create a renewed large oil surplus in 2018, which could lead to an immediate sharp decline in global oil prices.

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The UN is dysfunctional, but this risks cutting the few parts that do actually work.

Trump Prepares Orders Aiming at Global Funding and Treaties, UN (NYT)

The Trump administration is preparing executive orders that would clear the way to drastically reduce the United States’ role in the United Nations and other international organizations, as well as begin a process to review and potentially abrogate certain forms of multilateral treaties. The first of the two draft orders, titled “Auditing and Reducing U.S. Funding of International Organizations” and obtained by The New York Times, calls for terminating funding for any United Nations agency or other international body that meets any one of several criteria. Those criteria include organizations that give full membership to the Palestinian Authority or Palestine Liberation Organization, or support programs that fund abortion or any activity that circumvents sanctions against Iran or North Korea.

The draft order also calls for terminating funding for any organization that “is controlled or substantially influenced by any state that sponsors terrorism” or is blamed for the persecution of marginalized groups or any other systematic violation of human rights. The order calls for then enacting “at least a 40% overall decrease” in remaining United States funding toward international organizations. The order establishes a committee to recommend where those funding cuts should be made. It asks the committee to look specifically at United States funding for peacekeeping operations; the International Criminal Court; development aid to countries that “oppose important United States policies”; and the United Nations Population Fund, which oversees maternal and reproductive health programs.

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Interesting power fight. But there are laws.

Trump Starts A ‘Sanctuary City’ War With Liberal America (BBC)

Mr Trump’s border wall announcement will make most of the headlines today, given that it was a central focus of his presidential campaign and has increased diplomatic tension with the Mexican government. His plan to target US “sanctuary cities”, however, likely sets the stage for a much tougher, uglier domestic political fight. More than 400 jurisdictions across the country, including New York, Los Angeles, Boston and Seattle – major cities in left-leaning states that did not vote for Mr Trump – have enacted policies protecting undocumented immigrants within their boundaries. Officials in these designated areas, including local law enforcement, are not allowed to enquire as to an individual’s immigration status in the course of their duties.

Candidate Trump pledged to end this practice, and on Wednesday he put some teeth into his promise – authorising the federal government to withhold funds from cities that do not co-operate with immigration officials or comply with federal law. His executive order frames the issue as one of national security. “Sanctuary jurisdictions across the United States wilfully violate Federal law in an attempt to shield aliens from removal from the United States,” it reads. “These jurisdictions have caused immeasurable harm to the American people and to the very fabric of our republic.”

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Speeding up decline. Or exposing it, rather.

Kyle Bass Calls Trump ‘Gasoline’ on Smoldering Fire in China (BBG)

Hedge fund manager Kyle Bass likened President Donald Trump’s trade and tax policies to gasoline — hastening an economic restructuring in China while stimulating capital investment and growth in the U.S. China has “recklessly built a system that’s going to need to restructure and that just so happens to be metastasizing right when Trump becomes elected,” Bass told Bloomberg TV. “This is a fire that’s been smoldering and it’s now starting to burn, and Trump is just more gasoline.” Imposing tariffs on Chinese imports could have “profound consequences” for the nation’s economy, where credit over the last 18 months has grown by $6.5 trillion while deposits expanded just $3 trillion, said Bass, founder of Hayman Capital Management.

Early last year, Bass called for a 30% devaluation in the yuan against the dollar, and he’s since opened two Asia-focused funds to wager on the imbalances in the region, which he said could extend to Hong Kong and Taiwan. “The idea that China is now the driving economic power in the world, I think, is illusory or somewhat of a fallacy,” he said. “It’s safe to say that the Asian theater is where we’ve been focused.” In the U.S., Bass said, border tax adjustments will help finance a lower corporate tax rate that Trump has proposed, which in combination with the repatriation of capital offshore will be “extremely stimulative.” He said Trump’s accelerated policies would lead to real capital investment, competitiveness and an improvement in productivity.

The impact will be “positive for the United States and slightly negative for the rest of the world,” he said. “But it’s not the globalist nightmare, in my opinion.” Inflation, set to increase in the U.S., will also spike in Germany, which will prompt a tapering of the ECB’s bond-buying program and possibly an increase in interest rates, he said. The move to do so will be sped up by Trump, he said.

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“Total fixed-asset investment rose 8.1% in 2016, the slowest pace since 1999, despite an 18.7% increase in investment by state entities..”

China Keeps 3% Budget Deficit Goal For 2017 As Debt Risks Grow (R.)

China’s policymakers plan to keep their budget deficit target for 2017 at the same level as last year to underscore a focus on debt reduction and reform, though they have wiggle room to increase fiscal stimulus if the economy needs support again. A budget deficit target of 3% of GDP, unchanged from 2016, was endorsed by top leaders at the Central Economic Work Conference in December, according to sources with knowledge of the meeting’s outcome. After government investment propped up activity for much of 2016, policymakers are looking for a recovery in private investment through public-private partnership (PPP) infrastructure projects to drive growth this year. “Fiscal policy is clear. It’s necessary to maintain last year’s 3% deficit ratio, although there is room to increase it slightly,” said one of the sources, a policy adviser.

Preliminary finance ministry data this week implied an actual deficit of 3.8% of GDP in 2016. However, China’s budget accounting allows it to use unspent money from previous years and funds from a Central Budget Stabilization Fund so it can report a final deficit in line with the target. The world’s second-largest economy grew 6.7% last year, supported by higher government spending and record bank lending, though it was still the slowest growth in 26 years. Reuters reported last week that sources said the 2017 economic growth target would be around 6.5%, down from last year’s 6.5-7%. “If this year’s growth goal is not that high, there will be less pressure on the strength of policy support,” said a second policy source. [..] Total fixed-asset investment rose 8.1% in 2016, the slowest pace since 1999, despite an 18.7% increase in investment by state entities, as private investment grew just 3.2%, the weakest on record.

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A risk to the west, that is.

China Is Becoming ‘Increasingly Risky’ Because Of Its Economy (CNBC)

A major risk to U.S. markets is looming, and it’s bigger than headlines and President Donald Trump’s tweets, Goldman Sachs’ Sharmin Mossavar-Rahmani told CNBC on Wednesday. The threat is the Chinese economy, the Goldman Sachs Private Wealth Management chief investment officer told “Squawk on the Street.” “We use the term that China could ‘submerge’ under the burden of its own debt,” Mossavar-Rahmani said. “If you look at any of the debt measures in China, they’re tremendously high.” Mossavar-Rahmani focused on the credit-to-GDP number from the BIS as a key measure of China’s accumulating debt. As of the second quarter of 2016, China’s ratio was 28.8%.

“China is about 30, the U.S. was at 12.4% just before the crisis. And if the U.S. didn’t avoid a financial crisis with all its strength, how can we assume that China will?” the wealth manager asked. China is still awaiting its 19th gathering of the National Congress of the Communist Party in the fall, which Mossavar-Rahmani said would weigh on the country’s economic position in 2018. The meeting will determine 370 of China’s Central Committee members for the next five years. “Then we have to see, in 2018, will they put structural reforms on the front burner or does it stay on the back burner?” Mossavar-Rahmani asked.

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The US has a large block of religious zealots. The rest of the west, not so much.

Dutch Respond To Trump’s ‘Gag Rule’ With International Safe Abortion Fund (G.)

Up to 20 countries have indicated support for the Netherlands’ plan to set up an international safe abortion fund to plug a $600m funding gap caused by Donald Trump’s reinstatement of the “global gag rule”, the Dutch international development minister, Lilianne Ploumen, said on Wednesday. Ploumen took soundings from a number of her colleagues around the world on Tuesday evening after the Netherlands said it would act to mitigate the impact on hundreds of charities around the world. The “global gag rule”, also known as the Mexico City policy, was reimposed by Trump on Monday, and bans US federal funding for NGOs in foreign countries that provide abortion services or abortion advocacy. ‘We’re in talks with 15 to 20 countries and we’ve also spoken to foundations,” Ploumen told the Guardian.

“As well as contacting a number of European countries that we work with on these issues, we’re also in touch with countries in South America and Africa, as well as the foundations. It’s important to have the broadest possible support for the fund.” Ploumen did not identify which countries had been approached or how much money the Dutch government might commit to the scheme. She said the aim would be to continue support for existing programmes being run by organisations such as the United Nations Population Fund (UNPFA), the International Planned Parenting Federation and Marie Stopes International. “These are successful and effective programmes: direct support, distributing condoms, making sure women are accompanied at the birth, and making sure abortion is safe if they have no other choice,” she said.

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Damning. DO read.

Why the Corrupt, Worker-Hating New Democrats Must Be Purged (Bill Black)

This article explains three critical reasons why the Democratic Party’s leaders are far more insane than all but a few Democrats understand. It focuses on the leaders of the Democratic National Committee (DNC) and the New Democrats. The DNC leadership is composed of New Democrats. Debbie Wasserman Schultz had to resign in disgrace when the leaks proved that she was putting the DNC’s thumbs on the scale to favor Hillary Clinton (a New Democrat) in the presidential nomination contest against Bernie Sanders. Wasserman Schultz also took large contributions from big finance and, until she faced the prospect of a serious primary challenger, she supported efforts by predatory lenders to use Congress to bar the regulators from stopping their abuses.

Donna Brazile, a New Democrat, now runs the DNC. In this article, I show that Brazile denounced Democrats who refused to cheer President Bush’s invasion of Iraq (and his “Mission Accomplished” declaration) as so disloyal that when their country needed them they went “AWOL.” Not satisfied with that libel, she added the homophobic smear that voters would view Democrats who failed to cheer Bush’s lies and invasion as “effete.” Best of all, she said that Democrats should take as their role models Paul Wolfowitz, Richard Perle, and Frank Gaffney – Bush’s “chicken hawks” that devised the campaign of lies that led to the disastrous invasion of Iraq. Gaffney is now spreading hate of Muslims – and advising President Trump.

The DNC is also in the news because it has just accepted a $20 million “donation” funded by Third Way, a Wall Street front group, to study why the white working class “abandoned” Hillary Clinton. Clinton is a leader of the New Democrats. Wall Street has long been the largest single funder of the New Democrats various institutions. The New Democrats, at the behest of Wall Street, have waged the “long war” against the working class since their formation in 1984. The New Democrats did not simply abandon the working class – they targeted it for scorn and assaulted it with policies that harmed many Americans, but caused the greatest harm to the working class.

Particularly in light of the Trump’s election, the logical reaction of the DNC would have been to refuse to take the Wall Street buyout and announce that the New Democrats would never again do Wall Street’s bidding. They would return to the Democratic Party’s historic role as the party that championed the rights of workers. Brazile, of course, ensured that the DNC eagerly took the $20 million Wall Street buyout. The New Democrats not only continue to be for sale (or rent) by Wall Street – they continue to show that they continue to for sale for chump change. The DNC does not need $20 million to figure out why the white working class “abandoned” the New Democrats. They can check out from their local library Tom Frank’s books warning that this would happen and explaining in detail why the New Democrats’ long war against the working class was making it happen.

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When growth could not be delivered. “There is always a deal between citizens and their governments. But now governments are defaulting on their citizens because of the debt problem. They can’t deliver retirement at 65.”

Pippa Malmgren: The Social Contract In The West Is Broken (SLD)

Question: The inability of continental Europe to grow has been a clear part of the concern in Britain about Europe. What role has this played?

Malmgren: The British received more Foreign Direct Investment than any other locartion in the EU before Brexit. It was assumed this flow would fall after Brexit. But, I hear from my clients that they are even more interested in the UK now. That’s because money is like water. It flows to wherever it faces the least resistance – the lowest tax rates and least regulatory burden. I would challenge the British to end up with more regulation and higher taxes that the EU after Brexit. Frankly, that would take a huge effort! But the problems on the Continent are deeper than this; The real issue is that the social contract between citizens and governments in the West are being broken. There is always a deal between citizens and their governments. But now governments are defaulting on their citizens because of the debt problem. They can’t deliver retirement at 65. Now everybody has to work longer.

They can’t deliver the healthcare that had been expected. Frankly they can’t deliver police, fire departments or roads without potholes. The social contract in the EU is under even greater stress because growth has been so very poor. The night of the victory of Brexit, the markets attacked Italian banks, not British banks. What did the state in Italy do? They said they’d find 5b Euros to bail out the oldest bank which had lost 98% of its shareholder value. Meanwhile, they can’t find 5 cents for the young who are experiencing over 30% unemployment rates. This breaks the social contract and helps explain the new anti-EU sentiment. The Europeans are also increasingly uneasy about immigration issues. It was not part of the original deal in the European contract to have completely open borders. In my view, the British are not xenophobic, but want more process around immigration. They want a more secure movement of people within Europe.

The media talks all the time about the proposed Wall by Trump in the US with Mexico, but the reality is there a wall-building spree going on in Europe. Look at the new walls being constructed between Hungry and Serbia, between Germany and the Czech Republic, as well as new walls in Estonia, Poland and Lithuania are constructing one around Kaliningrad with watchtowers, etc. Frankly new walls will increasingly be digital. Processing of people will begin well before you get anywhere near what you think the border is. We will pass through borders without realizing we’ve already been assessed. We are in a period of history where the Europeans are fundamentally rethinking what they want Europe to stand for, the European Union to do, and how to generate economic growth again. As everywhere else, the public are questioning the establishment because they have failed to deliver on their promises.

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“I don’t think the notion of democracy is ever going to be as tested as it’s going to be now.”

The ‘media’ have lost so much credibility, and permamently. That is dangerous.

Seymour Hersh Blasts Media For Promoting Russian Hacking Story (IC)

Pulitzer prize-winning journalist Seymour Hersh said in an interview that he does not believe the U.S. intelligence community proved its case that President Vladimir Putin directed a hacking campaign aimed at securing the election of Donald Trump. He blasted news organizations for lazily broadcasting the assertions of U.S. intelligence officials as established facts. Hersh denounced news organizations as “crazy town” for their uncritical promotion of the pronouncements of the director of national intelligence and the CIA, given their track records of lying and misleading the public. “The way they behaved on the Russia stuff was outrageous,” Hersh said when I sat down with him at his home in Washington, D.C., two days after Trump was inaugurated.

“They were just so willing to believe stuff. And when the heads of intelligence give them that summary of the allegations, instead of attacking the CIA for doing that, which is what I would have done,” they reported it as fact. Hersh said most news organizations missed an important component of the story: “the extent to which the White House was going and permitting the agency to go public with the assessment.” Hersh said many media outlets failed to provide context when reporting on the intelligence assessment made public in the waning days of the Obama administration that was purported to put to rest any doubt that Russian President Vladimir Putin ordered the hacking of the DNC and Clinton campaign manager John Podesta’s emails.

The declassified version of the report, which was released January 7 and dominated the news for days, charged that Putin “ordered an influence campaign in 2016 aimed at the U.S. presidential election” and “aspired to help President-elect Trump’s election chances when possible by discrediting Secretary Clinton and publicly contrasting her unfavorably to him.” According to the report, the NSA was said to have had a lower confidence level than James Clapper and the CIA about the conclusion that Russia intended to influence the election. Hersh characterized the report as full of assertions and thin on evidence.

“It’s high camp stuff,” Hersh told The Intercept. “What does an assessment mean? It’s not a national intelligence estimate. If you had a real estimate, you would have five or six dissents. One time they said 17 agencies all agreed. Oh really? The Coast Guard and the Air Force — they all agreed on it? And it was outrageous and nobody did that story. An assessment is simply an opinion. If they had a fact, they’d give it to you. An assessment is just that. It’s a belief. And they’ve done it many times.”

[..] While expressing fears about Trump’s agenda, Hersh also called Trump a potential “circuit breaker” of the two-party political system in the U.S. “The idea of somebody breaking things away, and raising grave doubts about the viability of the party system, particularly the Democratic Party, is not a bad idea,” Hersh said. “That’s something we could build on in the future. But we have to figure out what to do in the next few years.” He added: “I don’t think the notion of democracy is ever going to be as tested as it’s going to be now.”

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But it will just continue. Wanna bet?

Austerity Economics Has Just Been Smashed. By The IMF. (GDB)

A powerful new report finally kills off any remaining intellectual veil for a broken economics that is breaking society. Sometimes an ideology is so brilliantly propagated that observers might not even notice it’s an ideology. In the corridors of power and in mainstream discussion, it ceases to be questioned. Then it goes catastrophically wrong. And it begins to seen again for the ideology it is. It becomes questioned again. And, if they are smart, leaders hear this and start to self-correct. This is where we’ve got to with neoliberalism, austerity, and rising inequality. Except for the self-correct part. Right now, instead of self-correction, we’re seeing many mainstream politicians unable to shift away from dead economics, and what seems in too many countries like the start of social breakdown.

Change is well overdue. Who can prompt leaders to drop the old economic nostrums are causing so much harm? Enter the IMF with a sledgehammer. Progressives duck in case in the sledgehammer is meant for them. But then the IMF demolishes the case for neoliberalism and austerity. It sounds extraordinary, and it is. Today the IMF will launch a new report, “Macro-Structural Policies and Income Inequality in Low-Income Developing Countries”, the latest in series that mark the intellectual journey the IMF research department has been travelling in recent years. Packed with detailed quantitative analysis it demonstrates that much of what elites have been advancing as unquestioned economics is demonstrably harmful both to economic growth and to public wellbeing.

Of course what makes this surprising, and what may make some progressives unenthusiastic about welcoming this, is also what makes it so powerful: an institution that has been, for far too long, a defender of the free market story and the Washington Consensus – the idea that liberalizing trade, privatizing everything possible and cutting down public spending was a one-size-fits-all solution to any government in trouble – has now refuted it. This paper is not the first by the IMF to take a stand on inequality, but it is notable because it claims in no uncertain terms that public spending – i.e. the opposite of the budget cuts that it once advocated for – decreases income inequality. They even have a formula – a 1% increase in public spending, they report, leads to a 2.3% decrease in inequality after 5 years. The paper also takes a strong stand against prioritizing indirect taxes, such as VAT, showing that they increase inequality.

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Bit sensationalist, perhaps?

The Super Rich Are Preparing For The End Of The World (CNBC)

The Dow has hit 20,000 for the first time ever, but rather than celebrating, some of the richest of the rich are building bunkers to prepare for a potential apocalypse. These “preppers” are making other investments too. They’re buying houses in New Zealand, which has become a popular spot in case of calamity. Billionaire Peter Thiel just secured property and citizenship there. And they’re getting elective surgery. Steve Huffman, the 33-year-old co-founder and CEO of the online community Reddit, got Lasik so that he’d be able to be more independent in case of emergency. “If the world ends — and not even if the world ends, but if we have trouble — getting contacts or glasses is going to be a huge pain in the ass,” the San Francisco resident tells Evan Osnos as part of The New Yorker’s chronicle of the elite’s end-of-the-world preparations. “Without them, I’m f—ed.”

In addition to the eye surgery, Huffman has accumulated guns, ammunition and motorcycles so that he won’t get caught in traffic jams during an evacuation. The notion of “doomsday prepping” was popularized in the mainstream by the National Geographic channel’s show by the same name. The show’s website offers a quiz titled “How prepped are you?” so you can test your own likelihood of surviving an apocalypse. Former Facebook product manager Antonio García Martínez bought wooded land in the Pacific Northwest that he has stocked with generators, solar panels and ammo, The New Yorker reports. “You just need so many things to actually ride out the apocalypse,” García Martínez says. “I think people who are particularly attuned to the levers by which society actually works understand that we are skating on really thin cultural ice right now.”

In particular, the political climate has made many coastal elites anxious about the future. “I think, to some degree, we all collectively take it on faith that our country works, that our currency is valuable, the peaceful transfer of power — that all of these things that we hold dear work because we believe they work,” says Huffman. “While I do believe they’re quite resilient, and we’ve been through a lot, certainly we’re going to go through a lot more.”

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The war on Grillo will intensify.

Rome Mayor Raggi Says She Received Summons From Prosecutors (BBG)

Rome Mayor Virginia Raggi, a member of the anti-establishment Five Star Movement, said she has received a summons from city prosecutors over a staff appointment. Raggi, a lawyer who was elected mayor last year, wrote in a post on Facebook that the summons concerns her nomination of Renato Marra as head of the tourism department, which she has revoked. She said she had informed Five Star co-founder Beppe Grillo and the city council of the summons. “I am very serene; I have full confidence in the judiciary, as ever,” Raggi wrote. “We are ready to give every clarification.” Raggi’s city hall administration has been plagued by resignations. Five Star, which wants a referendum on Italy’s membership in the euro area, has remained neck and neck with the Democratic Party of Prime Minister Paolo Gentiloni and his predecessor Matteo Renzi in national opinion polls.

Five Star has made denunciations of political corruption one of its main themes, often calling for elected officials to resign if they are placed under investigation, long before a case comes to court. But under new rules posted on Grillo’s blog earlier this month, Five Star officials do not have to resign automatically if they are investigated. Italian newswire Ansa said Raggi was under investigation for alleged abuse of office in the personnel matter. [..] Alessandro Di Battista, a senior Five Star lawmaker, told La 7 television that Raggi had a duty to explain why she had made the appointment. “This isn’t about public money, or decisions which affect a right of citizens,” Di Battista said. “This would involve mistaken signatures, a mistaken nomination which was immediately revoked.”

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If not in February, forget 2017.

Deal On Greek Bailout’s Second Review Possible At February Eurogroup (R.)

Euro zone creditors could approve the completion of the second set of Greek bailout reforms at the next meeting of finance ministers in February, an euro zone official said on Wednesday. The approval of the outstanding reforms, mainly concerning Greek fiscal targets, the labor market and liberalization of the energy sector, would pave the way for further euro zone loans to Athens, which faces large repayments in the third quarter. Finance ministers of the 19 countries of the euro zone will meet on Thursday in Brussels but there hasn’t been sufficient progress in Greek reforms yet for them to sign off on a deal now, the senior official said, confirming what the EU economics commissioner Pierre Moscovici said on Tuesday.

Still, the ministers are likely to produce an agreement to continue talks with a view to concluding them at the next Eurogroup meeting on Feb. 20, according to the official. “There is a good chance” that an agreement will be reached on Thursday to send euro zone negotiators back to Athens so that a deal can be reached in February, the official said. “February is the last month in which there is no politically significant election in relevant member states,” the official said, and this meant “February is not formally but realistically the time when we need to reach a political agreement”. The Netherlands go to the polls in March, and the French will vote in presidential elections in April and likely also in May. Germany, the biggest economy in the euro zone, will hold a general election in September. A comprehensive deal for Greece will also have to involve the IMF, the official said.

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Pretty brilliant.

“INAUGURATION DAY” (Bad Lip Reading)

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