May 182020
 


Jack Delano Myrtle Beach, S.C. Air Service Command Technical Sergeant Choken 1943

 

Ardern Becomes New Zealand’s Most Popular PM In A Century (R.)
116 Countries Back Australia’s Push For Independent Corona Inquiry (SBS.au)
Start ‘Travel Bubbles’ For Low-Risk Countries, Heathrow Urges UK Govt (R.)
Profiting from Coronavirus (Craig Murray)
US Mulls Paying Companies, Tax Breaks To Pull Supply Chains From China (R.)
Cuomo Says No One Should Be Prosecuted For Coronavirus Deaths In New York (CBS)
Pelosi Sees Negotiations On New $3 Trillion Coronavirus Legislation (R.)
Senator Rubio Calls For Fast Action To Extend US Payroll Protection Program (R.)
Los Angeles Tells Everyone To Wear Face Masks At All Times While Outdoors (JTN)
EU’s Vestager: Discrepancy In Coronavirus State Aid Distorts Single Market (R.)
Australia Bankers Hope They’ll Avoid A Bad Debt Tsunami (AFR)

 

 

• US records 857 new #coronavirus deaths in 24 hours. Yesterday: 1,277
• The latest toll, marked at 8:30 pm (0030 GMT Monday), is the lowest since 776 daily deaths were recorded May 10, but the count ranged as high as 1,894 in subsequent days

 

 

 

 

 

 

 

Cases 4,820,347 (+ 77,166 from yesterday’s 4,743,181)

Deaths 316,967 (+ 3,264 from yesterday’s 313,703)

 

 

 

From Worldometer yesterday evening -before their day’s close-

 

 

From Worldometer

 

 

From SCMP:

 

 

From COVID19Info.live:

 

 

 

 

Say your child sees the Lord of the Rings films and wants to visit New Zealand. What do you think are the odds they’ll be allowed entry any time soon?

Ardern Becomes New Zealand’s Most Popular PM In A Century (R.)


Jacinda Ardern became New Zealand’s most popular prime minister in a century, a Newshub-Reid Research poll showed on Monday, thanks to her COVID-19 response that made the country among the most successful in curbing the spread of the disease. The first public poll since the coronavirus crisis took hold showed popularity for Ardern’s Labour jumped 14 points to 56.5% – the highest for any party ever. Conversely, the biggest party in parliament – the Nationals, slumped to 30.6%, after sliding by 12.7 points. The poll was conducted between May 8 and May 16, with half of the responses taken after the federal budget on Thursday. As preferred PM, Ardern was at 59.5%, up 20.8 points on the last poll and the highest score for any leader in the Reid Research poll’s history.


The poll took into account public sentiment in the final days of the country’s strict level three lockdown, which also got massive support with almost 92% respondents saying it was the right call. The Pacific nation was locked down for more than a month under “level 4” restrictions that were eased by a notch in late April. It has continued to enforce strict social measures on many of its citizens and businesses, helping prevent widespread community spread of the virus. Businesses in the country including malls, cinemas, cafes and gyms reopened last Thursday. (May 14) Ardern’s stratospheric rise to become the country’s youngest prime minister and third woman to hold the office resulted in New Zealanders coining the phrase “Jacinda-mania.” The rate of new cases have slowed dramatically in New Zealand in recent weeks. The virus has so far infected 1,499 people in New Zealand and killed 21.

Read more …

China says it’s premature to start now because the pandemic is not over. What?

116 Countries Back Australia’s Push For Independent Corona Inquiry (SBS.au)

110 countries have backed Australia’s push for an independent coronavirus inquiry which has caused a damaging rift with China. The African Group’s 54 member states will co-sponsor the motion, joining 62 other countries including Russia, Indonesia, India, Japan, Britain and Canada. The European Union’s 27 members are all on board, along with Brazil, South Korea, Mexico, Turkey and New Zealand. Foreign Minister Marise Payne on Monday said it was encouraging to see so many countries backing the inquiry. “I think what it illustrates is a broad view that given the experience of COVID-19 – over 300,000 deaths, millions of people around the world losing their jobs, the impact on economies from one corner of the globe to the other – that there is a strong view that it is appropriate to engage in a review of what has happened.


“I don’t want to preempt speculate about the outcome, those discussions will be under way later this evening. I think it’s a win for the international community.” The draft resolution calls for impartial, independent and comprehensive evaluation of the international response to the pandemic. It doesn’t mention China, but Australia’s push for the inquiry has angered Beijing, which has threatened a huge tariff on barley and blocked some beef imports. Health Minister Greg Hunt will represent Australia at the virtual World Health Assembly meeting on Monday night. A vote is expected in the early hours of Tuesday.

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One little problem: the UK itself is not a low risk country.

Start ‘Travel Bubbles’ For Low-Risk Countries, Heathrow Urges UK Govt (R.)

Britain should set up “travel bubbles” with low-risk countries to allow the movement of people, instead of bringing in new coronavirus quarantine rules when flights restart, according to Heathrow Airport. British government ministers have said they plan a 14-day quarantine for most people arriving in the country in the coming weeks to try to prevent a second peak of the pandemic. Airlines have warned the policy will throttle hopes for a travel recovery. Heathrow Airport, which before the novel coronavirus grounded planes was the busiest in Europe, said that it had been working with the UK government’s Department for Transport on proposals to allow some unrestricted travel.


“The proposal would create ‘travel corridors’ or ‘travel bubbles’ allowing free movement between countries or cities that are very low-risk, but potentially blocking flights from high-risk markets to safeguard public health,” the airport said in a statement. Such a set-up would be much less damaging to the economy than the quarantine policy, said Heathrow. The boss of Ryanair, Europe’s biggest airline by passenger numbers, said on Monday that the 14-day policy was unimplementable and unpoliceable and would be ignored by people wanting to travel. The government is yet to provide further details of the quarantine policy. Culture minister Oliver Dowden said earlier on Monday that Britain was still in talks with France over whether to exempt travellers from across the Channel.

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You can’t go through years of Russiagate and Syria bombings and expect countries to work together. And western Pharma sees huge profits anyway; that’s society’s model after all.

Profiting from Coronavirus (Craig Murray)

On 5 May, the British security services released to their pet media the claim that Russia, China and Iran were attempting to hack into British research institutes conducting coronavirus research. The BBC reported it. Britain’s shameful copy and paste media all, without exception, just copy and pasted the government press release. The Guardian gave the quote: “Any attack against efforts to combat the coronavirus crisis is utterly reprehensible. We have seen an increased proportion of cyber-attacks related to coronavirus and our experts work around the clock to help organisations targeted”.

If Britain had one single mainstream media journalist willing to think, rather than just regurgitate government propaganda, they might have realised that there is a massive story here if you look at it the other way round. The quote from the Guardian deliberately attempted to give the impression that Russia, China and Iran were trying to disable, destroy or hamper coronavirus research: “Any attack against efforts to combat the coronavirus”. But if you read carefully through those articles, you find that the allegation is merely that they are attempting hack in to gain access to the research. Because the UK and the US are attempting to hide their vaccine and treatment research results from the rest of the world to make money out of them.

Much has been written about the possibility for a new and better kind of world to emerge after coronavirus. Yet our governments cannot conceive of any model for fighting this threat to the whole world, other than the capitalist, money-making model. The much-touted “race to develop a vaccine” is not a race to save lives. It is a race to make billions. The United States and the United Kingdom are working in all international fora to head off efforts to pool global research and to make any vaccine or medicine a good for the world. Governments can reward those working on the vaccine, and the companies for providing the facilities, using economic models other than the patent and the potential for massive profit.

It may come as a shock to you to realise that at the moment all those lovely vaccine and medicine researchers you see being interviewed on TV about their efforts to compress trials and approvals and get the product to the marketplace, are not sharing their results with fellow researchers around the world. They are rather jealously guarding them and each working in a bubble hoping to be the first in order to cash in. It is certainly true that many of the researchers themselves do not like this, but are controlled by their bosses.

For me, the failure to set up a worldwide shared scientific database on all coronavirus vaccine and medicine research, and the failure to set up a prior agreement on free manufacture worldwide of effective resulting vaccines and treatments, is the most revealing fact about the entire coronavirus episode. The fact that the British government is putting massive resources into ensuring the Chinese or Russians cannot “steal” our research – and doubtless the Chinese and Russians are doing the same, all states are hypocrites in these matters – should sicken everybody.

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More incentive for collective action on vaccines.

US Mulls Paying Companies, Tax Breaks To Pull Supply Chains From China (R.)

U.S. lawmakers and officials are crafting proposals to push American companies to move operations or key suppliers out of China that include tax breaks, new rules, and carefully structured subsidies. Interviews with a dozen current and former government officials, industry executives and members of Congress show widespread discussions underway – including the idea of a “reshoring fund” originally stocked with $25 billion – to encourage U.S. companies to drastically revamp their relationship with China. President Donald Trump has long pledged to bring manufacturing back from overseas, but the recent spread of the coronavirus and related concerns about U.S. medical and food supply chains dependency on China are “turbocharging” new enthusiasm for the idea in the White House.


On Thursday, Trump signed an executive order (here) that gave a U.S. overseas investment agency new powers to help manufacturers in the United States. The goal, Trump said, is to “produce everything America needs for ourselves and then export to the world, and that includes medicines.” But the Trump administration itself remains divided over how best to proceed, and the issue is unlikely to be addressed in the next fiscal stimulus to offset the coronavirus downturn. Congress has begun work on another fiscal stimulus package but it remains unclear when it might pass. The push takes on special resonance in an election year. While anti-China, pro-American job proposals could play well with voters, giving taxpayer money or tax breaks to companies that moved supply chains to China at a time when small business is flailing may not.

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Now Cuomo starts arguing that “all those old people would have died anyway”. Afraid he’ll be blamed?

Cuomo Says No One Should Be Prosecuted For Coronavirus Deaths In New York (CBS)

New York Governor Andrew Cuomo on Sunday addressed the state’s early response to the coronavirus outbreak and said “nobody” should be prosecuted for the those who died, noting that “older people” were most vulnerable. The governor has been criticized for a decision in March, which has since been reversed, to send patients back to nursing homes after they tested positive for COVID-19. More than 4,800 people died from COVID-19 in nursing homes in the state between March 1 and May 1, according to a tally released by the Cuomo administration on May 1. Cuomo has called nursing homes a “feeding frenzy” for the coronavirus. “Despite whatever you do, because with all our progress as a society, we can’t keep everyone alive,” Cuomo said.

The number of deaths in New York state dropped again Saturday to 139 people. When asked about the nursing home deaths, Cuomo noted the 139 people who died on Saturday and asked who is accountable for everyone who died. “How do we get justice for those families of those 139 deaths?” Cuomo said. “Who can we prosecute for those 139 deaths? Nobody. Mother Nature, God, where did this virus come from? People are going to die by this virus, that is the truth.” When pressed further about how some people thought their loved ones would be safe because of Matilda’s Law, Cuomo continued to stress the point that older and more vulnerable people were “always going to die from this virus.”

He said when talking who is accountable for deaths, the most important thing was to make sure “you can have a situation where everyone did the right thing and everyone tried their best.” Cuomo said his top priority was making sure the medical system did not get overwhelmed, calling that a “accountable, avoidable situation.” “That’s what we protected against and we did it successfully,” Cuomo said. Cuomo pushed for all New Yorkers who have symptoms of COVID-19 to get tested. He said New York is now conducting 40,000 tests per day at 700 testing sites. “If you think you have symptoms, get a test. It’s up to you,” he said. “We just don’t have enough New Yorkers coming to be tested.”

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The GOP will negotiate to make sure its sponsors get a “fair” chunk of the loot. And that’ll be all she wrote.

Pelosi Sees Negotiations On New $3 Trillion Coronavirus Legislation (R.)

U.S. House Speaker Nancy Pelosi said on Sunday there will be negotiations on the new $3 trillion coronavirus relief legislation passed by the Democratic-controlled House of Representatives and that Democrats have “no red lines.” Asked if there has been a Republican response or counteroffer to begin negotiations on the bill passed late on Friday, Pelosi said, “No bill that is proffered will become law without negotiations, so, yeah.” The Democrats’ measure, passed late on Friday, was likely to trigger new talks with congressional Republicans and President Donald Trump’s administration, who have been talking about the need for new business liability protections in the age of coronavirus, or additional tax cuts.


Democrats oppose both of those ideas. Pelosi, however, told CBS’ “Face the Nation” on Sunday that Democrats had “no red lines.” Republican leaders have dismissed the bill, which Trump said he would veto, with Senate Majority Leader Mitch McConnell calling it “dead on arrival.” Some Republicans have said a new relief package could wait until the effects of funding in previous bills are felt, but Pelosi urged a quick resolution to help jobless Americans. More than 36 million people – or more than one in five workers – in the United States have filed for unemployment since the crisis began. “Time is of the essence,” Pelosi said. “In the past bills, they’ve put forth their proposal and then we worked in a bipartisan way. That’s what we all anticipate.”

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Just as misguided as Pelosi.

Senator Rubio Calls For Fast Action To Extend US Payroll Protection Program (R.)

The United States needs to quickly revise its coronavirus aid program for small businesses to extend the eight-week period in which the law currently requires companies to spend the money, a key U.S. senator said on Sunday. The Paycheck Protection Program established by Congress in late March was aimed at helping businesses keep making payroll for eight weeks, despite orders to shutdown because of the coronavirus pandemic. The eight-week period may be applied to any time frame from mid-February up to June 30. But with many businesses that received loans under the $660 billion PPP program moving toward the end of their eight-week period, Senator Marco Rubio, the Republican chairman of the Senate’s small business committee, said lawmakers need to move fast to extend it.


“The legislative fix needed to #PPP is extending beyond 8 weeks the time period a #SmallBusiness has to spend the funds on payroll. We are hoping to move quickly on this before the first wave of #PPP loan recipients reach the 8 week point,” Rubio wrote on Twitter. While most states have begun to reopen their economies at least in part, some 36 million Americans — one in five in the workforce — have lost their jobs since the pandemic began. Rubio’s Republican party has the majority in the Senate. But the top Democrat on the small business committee, Senator Ben Cardin, has also expressed support for re-examining the eight-week period in the small business program. “I strongly support extending it,” another Senate Democrat, Chris Van Hollen of Maryland, a member of the banking committee, said in a phone interview Sunday. “There’s a real mismatch between that date and the real world situation that many small businesses are facing.

Read more …

How about only when around people?

Los Angeles Tells Everyone To Wear Face Masks At All Times While Outdoors (JTN)

Los Angeles is requiring essentially everybody in the city wear a face covering at all times whenever outdoors, a policy Mayor Eric Garcetti says will help the local economy reopen faster. Garcetti announced the order on Wednesday evening, telling city residents: “Bring your mask with you whenever you leave your home.” Children under 2, as well as a limited number of individuals with disabilities, are exempt from the order, the mayor’s office said in a press release. “Face coverings help stop the spread of the virus,” Garcetti, a Democrat, said in the release. “Wearing them whenever we’re away from home will create a meaningful layer of protection for people we might come into contact with, and that makes sense at this stage of our response to the crisis.”


The order came shortly after Garcetti said that the city will “never be completely open” until scientists discover a cure for coronavirus. The mayor at the time was partially walking back comments made earlier in the day by Los Angeles County Public Health Director Barbara Ferrer, who said Tuesday that the city’s stay-at-home order would be extended “with all certainty” for the next three months.

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Complete nonsense: “Ensuring a competitive level playing field within its cherished single market of some 450 million people is a central EU tenet”..

Self-contradicting: “..concern about the “huge differences” in coronavirus state aid among member states, saying they were starting to distort the bloc’s single market.”

vs

“..Germany’s extensive bailouts of coronavirus-hit companies could have a ripple effect across the bloc and work as a locomotive for Europe..”

EU’s Vestager: Discrepancy In Coronavirus State Aid Distorts Single Market (R.)

The European Union’s competition chief Margrethe Vestager has expressed concern about the “huge differences” in coronavirus state aid among member states, saying they were starting to distort the bloc’s single market. Germany accounts for more than half of the emergency coronavirus state aid approved by the EU executive, prompting concerns that countries with the deepest pockets might be getting an unfair advantage in the bloc’s single market. In an interview with German newspaper Sueddeutsche Zeitung, Vestager said there was a risk that the different levels of state aid among member states would distort competition and slow the economic recovery from the coronavirus pandemic.

“And this has already happened to a certain extent”, Vestager said, according to a pre-released extract of the interview that the newspaper will publish in its Monday edition. Ensuring a competitive level playing field within its cherished single market of some 450 million people is a central EU tenet and has long been a key condition for opening up to foreign players from China to, more recently, Brexit Britain. But the executive European Commission suspended the normally-strict state aid restrictions in mid-March, allowing the 27 EU states to pump cash into their economies and companies battered by coronavirus, with more than 1.9 trillion euros worth of national schemes approved so far.

Earlier this month, Vestager said that Germany’s extensive bailouts of coronavirus-hit companies could have a ripple effect across the bloc and work as a locomotive for Europe. Asked about an EU recovery plan expected to be announced on May 27, Vestager said there were no guarantees that it would be sufficient but said officials were trying to do their best.

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It’s not the virus, it’s the housing bubble that’ll decide this.

Australia Bankers Hope They’ll Avoid A Bad Debt Tsunami (AFR)

On the face of it, the stats look abysmal. There are 7.7 million Australian workers on some form of government welfare. Repayments have been frozen on 10 per cent of mortgages and 15 per cent of SME loans. Bankers have been left with about $220 billion in loans that aren’t being serviced. Little wonder then that some analysts are querying whether the $5 billion that the big four banks have set aside to cover the losses they’ll sustain from the economic collapse triggered by the pandemic will be sufficient. Now, bankers continue to emphasise that they won’t know the extent of their problem loans for another month, when they start contacting the home owners and small business owners who opted to defer their loan repayments.


But at this stage, bankers appear quietly optimistic that the rise in their soured loans this time around are unlikely to be anywhere near as serious as the hit they took from the 1990s recession, or even the losses they sustained during the global financial crisis. There are two reasons for this confidence. In the first place, the latest downturn has been very uneven across the economy. Workers in the services sector – particularly hospitality, accommodation, food services and retail trade – have suffered far more than, say, those employed in the finance or government sectors. But because the jobs in these sectors tend to be lower paid, with a higher proportion of younger employees working casual hours, those working in these sectors tend not to meet the income requirements for a home loan borrower.

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Thank you.

 

 

Note: Navarro says in this clip that remdesivir has been saving many lives. But we know it has no such effect. It shortens hospital stays at best.

 

 

 

 

 

 

 

 

 

 

Support the Automatic Earth in virustime.

 

Apr 132020
 


John M. Fox WCBS studios, 49 East 52nd Street, NYC 1948

 

Obesity The Single Biggest Factor In New York COVID19 Hospitalizations (ZDN)
Coronavirus Spreads At Least 13 Feet, Travels On Shoes: CDC (NYP)
Fauci: US Given Wrong Information About Virus “Right From The Beginning” (JTN)
102-Year-Old NY Woman Beats COVID-19 With Hydroxychloroquine (CBS)
New Zealand Preparing To End Lockdown (Metro)
America Should Be Ready For 18 Months Of Shutdowns – Fed’s Neel Kashkari (MW)
China Is Censoring Research On COVID-19 Origins (NW)
Experts See Worrisome Link Between Coronavirus, Pollution (Hill)
After The Lockdown, Europe Debates Exit Strategies (AFR)
Giant Oil Output Cuts Make Ripple, Not Big Waves (R.)
Greek Government To Go After Priests Flouting Quarantine (K.)
Lockdown: Not Novels And Family Time But Food Parcels And Hardship (G.)

 

 

I must admit I’m getting fed up with the stories and narratives. People may have short attention spans, but how is that a reason to just go and invent narratives about something as serious as a pandemic? The disgusting morally hollow Brits celebrating the recovery of Boris Johnson as he’s thanking the same NHS he actively helped defund, at the same time that he’s murdering Julian Assange, get a life.

From Dr. Fauci I don’t expect anything else anymore than putting the blame on anyone but himself. “We got the wrong infomation!” If you were an investor, that would be your fault, not someone else’s. See, the WHO will make the same argument: the Chinese gave us false info, don’t blame us. But if you’re in positions like that, it’s your own responsibility to get your info right. And if you fail at that, to be open and honest about it.

The pedestal upon which New Zealand PM Jacintha Ardern is placed -“a masterclass in crisis management!- while one look at a timeline shows that she, too, like all the rest, was way too late in her reaction. The WHO was criminally slow in declaring a pandemic, they finally did so on March 11, and STILL New Zealand didn’t lock down. Ardern closed the borders only on March 19 and locked down the country on the 26th. She’s just lucky New Zealand has the geographical advantages it has, far away from anyone else.

 

 

The next narrative has already started: what are we going to do after it’s all over. But how are you going to do the right thing today when all you think about is tomorrow? Moreover, the virus hasn’t even started for the next 5 billion people, who often live in the most vulnerable places. And we’re going to forget about that just because the West, China, Japan, can’t keep focused for more than 2 weeks?

 

 

Cases 1,862,584 (+ 72,011 from yesterday’s 1,790,573)

Deaths 114,982 (+ 5,328 from yesterday’s 109,654)

 

 

 

From Worldometer yesterday evening -before their day’s close-

 

 

From Worldometer – NOTE: mortality rate for closed cases is at 21% !-

 

 

From SCMP:

 

 

From COVID2019Info.live:

 

 

 

 

If this is why the US gets hits so hard, watch out for Mexico. Chronic inflammation sounds like a credible factor.

Obesity The Single Biggest Factor In New York COVID19 Hospitalizations (ZDN)

For months, scientists have been poring over data about cases and deaths to understand why it is that COVID-19 manifests itself in different ways around the world, with certain factors such as the age of the population repeatedly popping up as among the most significant determinants. Now, one of the largest studies conducted of COVID-19 infection in the United States has found that obesity of patients was the single biggest factor in whether those with COVID-19 had to be admitted to a hospital. “The chronic condition with the strongest association with critical illness was obesity, with a substantially higher odds ratio than any cardiovascular or pulmonary disease,” write lead author Christopher M. Petrilli of the NYU Grossman School and colleagues in a paper “Factors associated with hospitalization and critical illness among 4,103 patients with Covid-19 disease in New York City..”


Among other things, the presence of obesity in the study points to a potentially important role of heightened inflammation in patients, a phenomenon that has been a topic of much speculation in numerous studies of the disease. Petrilli and colleagues at the Grossman School, and doctors at the NYU Langone Health center, studied the electronic patient records of 4,103 individuals who tested positive for COVID-19 in the New York City healthcare system between March 1st and April 2nd. It is “the largest case series from the United States to date,” write Petrilli and colleagues. The motivation of the work, they write, was that “Understanding which patients are most at risk for hospitalization is crucial for many reasons,” such as how to triage patients and how to anticipate medical needs.


click to enlarge in new tab

Half of those patients were admitted to a hospital. What the researchers found is that “In the decision tree for admission, the most important features were age >65 and obesity.” Obesity, in this case, was measured as weight relative to a person’s height. The authors use a metric scale, so a body mass index of 30 kilograms of weight and higher is considered obese. The “decision tree” in this case refers to the statistical method they used to analyze the patient data. A decision tree is a way to group members of a sample based on their shared characteristics. “For a given population, the decision tree classification method splits the population into two groups using one feature at a time, starting with the feature that maximizes the split between groups relative to the outcome in question.” They keep splitting groups into smaller and smaller groups until they arrive at groups that “[have] similar characteristics and outcomes.”

https://twitter.com/StephanieKelton/status/1249465834029932545

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Twitter: “Which is right? CDC officially says 6’ for #SocialDistancing . But a new CDC report, says #COVID19 can travel through the air at least 13 feet. Meanwhile, WHO says 3’ should be enough. And Dr Fauci rejects recent research, wherein virus could travel up to 27 feet.”

Coronavirus Spreads At Least 13 Feet, Travels On Shoes: CDC (NYP)

The coronavirus can travel through the air at least 13 feet — more than twice as far as social distancing guidelines, according to a report from the Centers for Disease Control and Prevention. Research published in the federal agency’s Emerging Infectious Diseases journal shows the contagion spreading far further than previous official suggestions — and also getting spread on people’s shoes. “The aerosol distribution characteristics … indicate that the transmission distance of [COVID-19] might be 4 m,” the report says, translating as more than 13 feet. “Furthermore, half of the samples from the soles of the ICU medical staff shoes tested positive,” the researchers wrote of samples taken at Huoshenshan Hospital in Wuhan.

“Therefore, the soles of medical staff shoes might function as carriers.” The report, based on research by a team at the Academy of Military Medical Sciences in Beijing, appears to reaffirm fears that the current social distancing guidelines of 6 feet may not be enough. It also suggests people — especially medical staff on the frontlines — could inadvertently be spreading the bug away from its source, recommending stringent disinfecting measures.

High levels were also found on frequently touched surfaces like computer mice, trashcans and bed rails. The CDC recommends 6 feet for social distancing, while the World Health Organization claims just 3 feet should be enough, less than a quarter of the distance the current study suggests it spreads. Research last month said the virus could travel up to 27 feet. Dr. Anthony Fauci, the nation’s top infectious disease expert, however called that “terribly misleading,” saying it would require a “very, very robust, vigorous, achoo sneeze” to travel that far and the scenario was “not practical.”

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First WHO warning was December 31.

Fauci: US Given Wrong Information About Virus “Right From The Beginning” (JTN)

The U.S. was given inaccurate information about the coronavirus at the beginning of the crisis Director of the National Institute of Allergy and Infectious Diseases Dr. Anthony Fauci said on Saturday. When Fox News host Jesse Watters asked Fauci if he believes China or the World Health Organization “misled” him or if the WHO leader himself could have been “deceived,” Fauci noted that while he does not know the details behind the inaccurate information, it was disseminated from the start of the crisis. “You know I don’t know where the missteps went, the only thing I know what the end result was, that early on we did not get correct information,” Fauci said.


“And the incorrect information was propagated right from the beginning because you know when the first cases came out, that were identified I think on December 31st in China and we became aware of this, they said this was just animal to human period.” “Now we know retrospectively that there was ongoing transmission from human to human in China, probably at least a few weeks before then,” he said. Fauci said once the illness hit the U.S. it became evident “that was misinformation right from the beginning.” He added that “whosever fault that was, you know, we’re gonna go back and take a look at that when this is all over, but clearly it was not the right information that was given to us.”

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She’s Greek, and those guys are all doing well. It’s the olive oil.

102-Year-Old NY Woman Beats COVID-19 With Hydroxychloroquine (CBS)

A 102-year-old woman who was diagnosed with the coronavirus defied the odds and is now recovering. At 102 years old, Sophie Avouris, of Yonkers, has seen a lot in her life, entering this world in 1918 at the start of the Spanish flu. “She survived it, thank goodness,” her daughter, Effie Strouthides, said. Strouthides says back in March, doctors at a Manhattan nursing home and rehab facility called to tell her Avouris, who was recovering at the facility from hip surgery, tested positive for COVID-19. “And we were thinking at 102 years old, at high risk, she might not make it,” Strouthides said. Because the facility was on lockdown, Strouthides called her mom to have a conversation that she thought would be the last.


“Once or twice I managed to let her know how much I loved her and she told me how much she loved me,” she said. According to the CDC, 8 out of 10 deaths reported in the U.S. have been adults who are 65 and older. Dr. Taimur Mirza oversaw Avouris’ care and says her prognosis initially was not good. “Her course in the beginning, it was a little bit rough. For a while there, she required some oxygen, then we started her on the combination of the hydroxychloroquine and the azithromycin,” Mirza said. After a week of treatment, Avouris started showing signs of improvement. By week three, she no longer had the virus. “She didn’t have the cough anymore, and, you know, it was just miraculous to see a woman of her age recover from this,” Mirza said.

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Waaaay too late.

New Zealand Preparing To End Lockdown (Metro)

New Zealand’s Prime Minister Jacinda Ardern says the country is ‘turning a corner’ in the battle against coronavirus after recording the lowest number of new cases in three weeks. She praised residents for mounting a ‘wall of defence’ which is ‘breaking the chain of transmission’ following the swift implementation of lockdown measures. The country has recorded 992 confirmed cases of Covid-19 with just one death so far. Health officials said there were 29 new cases on Thursday, the fourth successive daily drop since 89 were recorded on Sunday and the latest sign of a flattening of the curve. Ms Ardern suggested the four-week lockdown could be softened in just over a weeks’ time, allowing some to return to work if social distancing rules can be maintained.

The PM said New Zealanders’ strict adherence to the rules during the four-week lockdown had ‘saved lives’. She added: ‘At the halfway mark I have no hesitation in saying, that what New Zealanders have done over the last two weeks is huge. ‘In the face of the greatest threat to human health we have seen in over a century, Kiwis have quietly and collectively implemented a nationwide wall of defence. ‘You are breaking the chain of transmission. And you did it for each other.’ But she cautioned against taking a foot off the pedal, adding: ‘We have what we need to win this marathon. You have stayed calm, you’ve been strong, you’ve saved lives, and now we need to keep going.’ Ms Ardern said the government will decide on April 20 whether to relax or extend lockdown measures, which are currently due to expire on April 22.

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But don’t worry about Kashkari, he’ll be fine. No matter how many trillions he wastes.

America Should Be Ready For 18 Months Of Shutdowns – Fed’s Neel Kashkari (MW)

‘This could be a long, hard road that we have ahead of us until we get to either an effective therapy or a vaccine. It’s hard for me to see a V-shaped recovery under that scenario.’ That’s Neel Kashkari, the head of the Federal Reserve Bank of Minneapolis, painting a rather gloomy picture in a CBS interview on Sunday morning of what lies ahead for the U.S. economy as the country continues to battle the coronavirus outbreak. Kashkari, while acknowledging the downside of what a prolonged shutdown could mean for the economy, said the U.S., ‘barring some health-care miracle,’ is looking at an 18-month strategy of rolling shutdowns based on what has happened in other countries.


“We could have these waves of flareups, controls, flareups and controls until we actually get a therapy or a vaccine,” he said. “We need to find ways of getting the people who are healthy, who are at lower risk back to work and then providing the assistance to those who are most at risk, who are going to need to be quarantined or isolated for the foreseeable future.” Looking ahead, Kashkari doesn’t envision a quick rebound for the U.S. economy, which has already endured more than 16 million job losses in the past three weeks. “This could be a long, hard road that we have ahead of us until we get to either an effective therapy or a vaccine,” he said. “It’s hard for me to see a V-shaped recovery under that scenario.”

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This started back in December.

China Is Censoring Research On COVID-19 Origins (NW)

The Chinese government appears to be censoring research on the origins of the COVID-19 epidemic by requiring scientists to run their studies by the Ministry of Science and Technology, a since-deleted page on a university website shows. According to a cached version of that page from the China University of Geosciences in Wuhan that Newsweek reviewed, requirements were updated so that scientists would need to have their study approved by China’s Ministry of Science and Technology before publication: “1. Academic papers on the traceability of the new coronavirus must be reviewed by the academic committee of the school before publication, focusing on the authenticity of the paper and whether it is suitable for publication.

After the review is passed, the school reports to the Ministry of Science and Technology, which can only be published after the review by the Ministry of Science and Technology.” China has faced repeated internal and external accusations of censorship surrounding research into COVID-19, the disease caused by the coronavirus. Local Chinese officials in Wuhan also are known to have suppressed information about the initial outbreak, even detaining whistleblower doctor Li Wenliang. Wenliang later died from COVID-19, and Chinese authorities offered a “solemn apology” to the medical practitioner’s family for how he had been treated. Back in February, The New York Times shared videos of Chinese citizens warning that research into coronavirus was being censored and removed from the internet.

“My purpose is to make sure that all this information is not lost or deleted,” one of the unidentified Chinese nationals said with her face covered in the clip. “We don’t know what information and when the authorities will censor,” another unidentified person said. “So we are trying to be faster than the authorities.” U.S. government officials, and other international leaders, have criticized China for not being transparent about the coronavirus pandemic. Toronto-based cyber research group Citizen Lab reported in early March that Chinese social media had begun censoring keywords associated with the coronavirus as well as criticism of the government’s response to the crisis, according to Reuters.

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Since there is such a link between pollution and literally everything else on the planet, feel free to consider this a piece of empty fluff.

Experts See Worrisome Link Between Coronavirus, Pollution (Hill)

Advocates and Democratic lawmakers are raising concerns over new research that suggests air pollution, water access and other environmental conditions are exacerbating the effects of the coronavirus on low-income and minority communities. A recent Harvard study found that people who live in areas with more exposure to air pollution are more likely to die from the pandemic, while other research shows that black and Latino communities people are disproportionately affected by the disease. “In public health, it’s often said that your ZIP code is more indicative of your health outcomes than your genetic code,” Lubna Ahmed, the director of environmental health at WE ACT for Environmental Justice, told The Hill.


Polluting industries are frequently located near low-income and minority communities. One assessment published by the American Public Health Association in 2018 showed that nonwhite and low-income communities are harder hit by pollution. Authors of the more recent Harvard study on the coronavirus said their results “suggest that long-term exposure to air pollution increases vulnerability to experiencing the most severe COVID-19 outcomes.” That study added to a growing body of research on the overall health risks to communities exposed to high pollution levels, neighborhoods that are often occupied by people of color and low-income residents.

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“But first they need to actually work.”

After The Lockdown, Europe Debates Exit Strategies (AFR)

Across Europe there are signs that observance of stringent social distancing measures by the vast majority of the public – better compliance than many experts had expected – has led to a big decline in viral transmission. The key figure is the “reproduction number” R, measuring the average number of new cases generated by an infected individual. If R is above 1, an outbreak spreads; if it is below 1, it contracts. For COVID-19, R was between 2.5 and 3 in most places before any measures were introduced. According to a leading scientist in the UK’s fight against the disease, the latest evidence shows a steep fall in the R rate to around 0.6 now, which would quickly suppress the pandemic. However, deaths are still rising fast because of the delay between infection and when serious symptoms develop.

[..] If the UK can achieve its target of carrying out 100,000 tests a day by the end of April and ramp up capacity further over the following months, it will be possible to test individuals in the community who report COVID-19 symptoms. In theory, this would then be followed by the tracing, testing and isolating of people who have been in contact with them if they are infected. This type of contact tracing, which involves questioning patients directly, took place when the first UK cases were reported but soon stopped when the pandemic swamped the country’s extremely limited testing capacity. “Evidence suggests that countries that are able to do very high levels of testing have many more options to allow people greater social mobility,” says Steven Riley at Imperial College London. “Some really innovative solutions will play a part. Contact tracing based on a mobile phone app is being looked at.”

[..] For many scientists, the key to ending the lockdowns is mass testing for COVID-19 infection, which detects the presence of the virus. Paul Romer, the Nobel Prize-winning economist, has outlined a plan for mass testing in the US that he believes would allow for much of the economy to reopen. However, this requires each person being tested every 14 days – or 22 million tests a day – a mammoth undertaking in terms of labs, chemicals, health workers and data analysis, even if such tests are constitutionally acceptable. In the UK, the epidemiologist Julian Peto has made a similar proposal – weekly tests, running to 10 million a day. Large-scale antibody testing, to show whether individuals have been infected in the past and still have some immunity, is a more tantalising prospect because they would only need to be conducted occasionally and could potentially be bought at a pharmacy.

But first they need to actually work. Specialised labs are carrying out studies to determine antibody levels in samples of the population but no one has yet developed an antibody kit reliable enough for widespread use in homes. Kits evaluated by the UK government have failure rates of 30 to 50 per cent. Eventually antibody tests could give individuals “immunity passports” to show that they are safe from infection, Professor Riley says, “but there’s some very important science to do first”. The key questions that have still to be answered are how different antibody levels relate to resistance to infection and how long any immune protection is likely to last.

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Demand is down 20%, production maybe 10%. You do the math.

Giant Oil Output Cuts Make Ripple, Not Big Waves (R.)

Muted oil price gains on Monday show record output cuts by giant producers will still leave them with a mountain to climb to restore market balance, industry watchers said, with the coronavirus pandemic decimating demand just as stocks swell. The morning after OPEC and allies led by Russia agreed to reduce output by 9.7 million barrels per day (bpd) in May and June – equal to nearly 10% of global supply – prices gained less than 5% and are still 50-60% down for the year so far. That headline cut by the grouping known as OPEC+ may be more than four times deeper than the previous record set in 2008, and may provide a floor for prices according to some analysts, but the reduction still dwarfed by the near 30 million bpd drop in demand in April already anticipated by forecasters like Goldman Sachs.

What’s more, governments in countries around the globe are considering extending travel and social lockdown measures that have sapped fuel use in order to prevent the coronavirus from spreading. “Even if these cuts provide a floor to prices they will not be able to boost prices given the scale of inventory builds we are still staring at,” Energy Aspects analyst Virendra Chauhan said, referring to storage tanks and ships around the world the are filling up fast amid the slide in demand from end-users. “The absence of hard commitments from the United States or other G20 members is (a) shortcoming of the deal.” G20 nations have been urged to help reduce the supply glut, but there was little detail on the outcome of Friday talks between energy ministers from the group and Saudi Arabia.

Meanwhile analysts said that while the core number in the deal suggests a near 10 million bpd cut, Middle East producers like Saudi Arabia, the United Arab Emirates and Kuwait will likely have to reduce by more than the 23% cut to which they signed up, as they had begun to ramp up output in April amid a price war before the agreement was struck. “This 9.7 million b/d ‘headline’ deal represents a 12.4 million bpd cut from claimed April OPEC+ production (given the Saudi, UAE, Kuwait ongoing surge) but an only 7.2 million bpd cut from 1Q20 average production levels,” Goldman Sachs analysts said in a note.

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It’s not just Texas where various religious sects feel exempt from society at large. Remember the one that started the epidemic in South Korea? Nice thing in Greece is the government actually pays the salaries of the priests.

Greek Government To Go After Priests Flouting Quarantine (K.)

The government has asked for a prosecutor to press charges against two priests who provided communion to the faithful Sunday despite a ban on church attendance. One of the priests, in the Athens neighborhood of Koukaki, was photographed from a nearby building secretly giving communion to people through the back door. The other incident happened in St. Spyridon Church in the city of Corfu. “What happened today in churches in Koukaki and Corfu is a violation of the law and of the Holy Synod’s orders and put the lives of citizens and public health in great danger. I contacted the Minister of Justice so that he can ask the prosecuting authorities to intervene,” said Nikos Hardalias, Deputy Minister of Civil Protection.


Authorities’ main concern remains attempts to flout strict quarantine measures during the week up to Orthodox Easter, which is celebrated next Sunday, by attending church and engage in the customary exodus from the cities to the countryside. From 6 am to 3 pm Sunday, 38 people were stopped trying to leave cities and fined 300 euros each.

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The mortally lost British nation cheer their PM’s health as he’s slow-murdering Julian Assange and letting people starve.

Lockdown: Not Novels And Family Time But Food Parcels And Hardship (G.)

Last week, I spoke to Anna Rogers, a Polish-born Londoner who lives in Brixton. She works for a charity called Money A+E, which operates across the south of the capital. It offers advice about debt, benefits and other financial issues to people who are often facing extreme hardship. It is a small set-up, with only four dedicated advisers. Since the coronavirus crisis began, the number of people getting in touch has tripled and is rising all the time. Rogers spoke matter-of-factly about the defining feature of many who now need her help. “They are people without any income,” she said. Many are migrant workers who have been sacked by small businesses or had cash-in-hand work – in, say, the building trade – suddenly withdrawn. In desperation, some say they would like to return to their countries of origin to be with their families, but that option is cut off right now.

A lot of them have no experience of the British benefits system, and few of the language skills and insider knowledge needed to navigate it. “The universal credit system never worked terribly well,” Rogers said. “But now people are saying that the system crashes, or they can’t upload documents.” Not everyone has internet access, and the sudden closure of public libraries has meant that even fewer people can get online. Even if they manage to do so, there is now an ominous sense that with the system under such pressure, the standard five-week wait for universal credit is bound to increase.

So, for now, Rogers and her colleagues have to introduce people to the most basic kinds of help. One fairly reliable source of food assistance, she said, was the array of new mutual aid groups that have sprung up at the most local level: “Fingers crossed, they can get people some food parcels.” When she spoke about the details of her work, her words had a palpable sense not just of sadness, but of urgency and a clear sense that things were only going to get worse, and quickly. The fact that we now rarely leave our homes means few people are aware of what is actually going on all over the country. Our field of vision is replete with statistics, and broad-brush warnings about the near future: from the daily death toll to the warnings from big banks of $5.5 trillion in lost global output, to the million or so people said to have newly applied for benefits in the UK. A very human crisis caused by Covid-19 is already here, beyond the illness itself, and it demands our attention.

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Aug 212018
 
 August 21, 2018  Posted by at 8:38 am Finance Tagged with: , , , , , , , , , , , ,  10 Responses »


Henri Matisse The painter and his model 1916-17

 

China’s Biggest Risk May Be Its Property Market – Not The Trade War (CNBC)
Why Do American CEOs Get Paid So Much? (Galbraith)
Trump Says It Is ‘Dangerous’ For Twitter, Facebook To Ban Accounts (R.)
Trump Worries That Mueller Interview Could Be A ‘Perjury Trap’ (R.)
Trump Demands Fed Help On Economy, Complains About Interest Rate Rises (R.)
UK’s Hunt To Call On Trump To Impose Fresh Sanctions On Russia (G.)
‘Secret Directive’ Bans UN Agencies From Helping Rebuild Syria – Lavrov (RT)
UK Household Debt Balloons To £19bn As Bailiff Problems Multiply (Ind.)
NHS Leak Warns Of Brexit Drug Shortages And Disease Risk (G.)
Jacinda Ardern Freezes New Zealand MPs’ Pay To Tackle Rich-Poor Divide (G.)
Salvini Refuses To Let In Refugees After Coastguard Ship Docks (G.)
What Being Back in the Markets Actually Means for Greece (TPP)
The Winners Will Lose and the Losers Will Win (Kunstler)
The Inescapable Weight Of My $100,000 Student Debt (G.)

 

 

“Real estate investment accounts for about two-thirds of Chinese household assets..”

China’s Biggest Risk May Be Its Property Market – Not The Trade War (CNBC)

China’s hot real estate market remains a challenge for authorities trying to maintain stable economic growth in the face of trade tensions with the U.S. In fact, property is the country’s biggest risk in the next 12 months, much greater than the trade war, according to Larry Hu, head of greater China economics at Macquarie. He said he is especially watching whether the real estate market in lower-tier, or smaller, cities will see a downturn in prices or housing starts after recent sharp increases. Real estate investment accounts for about two-thirds of Chinese household assets, according to wealth manager Noah Holdings. The property market also plays a significant role in local government revenues, bank loans and corporate investment.

As a result, a sharp slowdown in the real estate market’s growth and drop in prices would have a negative affect on overall economic growth. So far, the market has been hot: The average selling price for newly built non-governmental housing in 60 tier-three and tier-four cities tracked by Tospur Real Estate Consulting rose 28.1 percent from January 2016 to May 2018. [..] Last week, Nanjing, a tier-two city, announced a ban on corporate purchases of residential properties, following similar moves to limit speculation by Shanghai and some other cities. That’s a good move for controlling risk, according to Joe Zhou, real estate and investment management firm JLL’s regional director for China capital markets. He said the government is not likely to loosen its policy soon and that prices could decline on average.

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“The reliance of tech firms on venture capital and bubble psychology, rather than cash flow..”

Why Do American CEOs Get Paid So Much? (Galbraith)

A new report from the Economic Policy Institute calls attention to the hardy perennial of how much America’s corporate titans make: bosses of the top 350 firms made an average of $18.9m in 2017. That’s a ratio of 312-1 over the median worker in their industries. Big bucks to be sure. And a big change since 1965, when the ratio was just 20-1. But what does it mean? And if there’s a problem, what is it, exactly? What it means, as the EPI economists carefully document, is that the top US corporate chiefs are paid overwhelmingly with stock options, and their income fluctuates with the market. About 80% of the pay packet is in stocks, and the rise of 17% in 2017 after two flat years surely suggests that the top CEOs (not unreasonably) sensed the market peaked last year.

So they cashed in. On the other 20% of the pay packets, no gains occurred. The US numbers have shock value. But bear in mind that they reflect not only the way companies are run, but also changes over decades in the structure of the US economy and tax law, specifically the rise of market valuations in technology and finance at the expense of the major industrial corporations, and a corresponding decline in unions, which held down the ratios in the sectors the industrial firms dominated a half century back. Plus, there is the radical decline in top marginal tax rates on income and capital gains, beginning in 1978, which gave executives strong reasons to restructure their pay away from inside-the-corporation perks (the penthouses and country clubs of yore) and toward cash and capital assets.

The reliance of tech firms on venture capital and bubble psychology, rather than cash flow, deepened this trend. Note also that there is something a bit artificial about the resulting “wealth.” Jeff Bezos may have a net worth of over $150bn, mostly in Amazon stock, but he couldn’t convert it into cash if he wanted to, neither by selling nor by borrowing. Any effort to sell would demolish Amazon’s valuation and hence his own fortune. The rich aren’t like us – they have more money, true, but some of it isn’t really money and it can disappear, by the billions, pretty fast.

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As I wrote yesterday, this will have to change.

Trump Says It Is ‘Dangerous’ For Twitter, Facebook To Ban Accounts (R.)

U.S. President Donald Trump said on Monday that it is “very dangerous” for social media companies like Twitter and Facebook to silence voices on their services. Trump’s comments in an interview with Reuters come as the social media industry faces mounting scrutiny from Congress to police foreign propaganda. Trump has made his Twitter account – with more than 53 million followers – an integral and controversial part of his presidency, using it to promote his agenda, announce policy and attack critics. Trump previously criticized the social media industry on Aug. 18, claiming without evidence in a series of tweets that unnamed companies were “totally discriminating against Republican/Conservative voices.”

In the same post, Trump said “too many voices are being destroyed, some good & some bad.” Those tweets followed actions taken by Apple, Alphabet, YouTube and Facebook to remove some content posted by Infowars, a website run by conspiracy theorist Alex Jones. Jones’ own Twitter account was temporarily suspended on Aug. 15. “I won’t mention names but when they take certain people off of Twitter or Facebook and they’re making that decision, that is really a dangerous thing because that could be you tomorrow,” said Trump.

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Also mentioned yesterday. Chances of a sitdown in the next 10 days don’t look good.

Trump Worries That Mueller Interview Could Be A ‘Perjury Trap’ (R.)

U.S. President Donald Trump said on Monday he was worried that any statements under oath he provides to Special Counsel Robert Mueller could be used to bring perjury charges against him as part of the probe into Russia’s electoral interference. In an interview with Reuters, Trump echoed the concerns of his top lawyer in the probe, Rudy Giuliani, who has warned that any sit-down with Mueller could be a “perjury trap.” The president expressed fears that investigators could compare his statements with that of others who have testified in the probe, such as former FBI Director James Comey, and that any discrepancies could be used against him.

“So if I say something and he (Comey) says something, and it’s my word against his, and he’s best friends with Mueller, so Mueller might say: ‘Well, I believe Comey,’ and even if I’m telling the truth, that makes me a liar. That’s no good.” Despite his concerns, Trump did not comment on whether he would ultimately agree to an interview with Mueller, who is, among other things, investigating whether Trump’s campaign team colluded with Russians during the 2016 election and whether Trump has obstructed justice in the probe. Trump also declined to say whether he might strip Mueller of his security clearance, as he did last week to former CIA Director John Brennan, who had repeatedly criticized Trump’s handling of foreign policy and national security issues.

“I haven’t given it a lot of thought,” he said. [..] Trump asserted that he retained the power to intervene in the probe, but that he had chosen not to do so for the moment. His administration, Trump said, was “a smooth-running machine, except in that world. And I’ve decided to stay out. Now I don’t have to stay out. “I can go in, and I could do whatever — I could run it if I want. But I decided to stay out,” he said. “I’m totally allowed to be involved if I wanted to be. So far, I haven’t chosen to be involved. I’ll stay out.”

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Whatever the predictable comments on this, what he really does is confirm the Fed’s independence.

Trump Demands Fed Help On Economy, Complains About Interest Rate Rises (R.)

U.S. President Donald Trump said on Monday he was “not thrilled” with the Federal Reserve under his own appointee, Chairman Jerome Powell, for raising interest rates and said the U.S. central bank should do more to help him to boost the economy. In the middle of international trade disputes, Trump in an interview with Reuters also accused China and Europe of manipulating their respective currencies. American presidents have rarely criticized the Fed in recent decades because its independence has been seen as important for economic stability.

Trump has departed from this past practice and said he would not shy from future criticism should the Fed keep lifting rates. The president spooked investors in July when he criticized the U.S. central bank’s over tightening monetary policy. On Monday he said the Fed should be more accommodating on interest rates. “I’m not thrilled with his raising of interest rates, no. I’m not thrilled,” Trump said, referring to Powell.

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Nobody Hunt goes to Washington with veiled criticism of Trump. Good luck with that.

UK’s Hunt To Call On Trump To Impose Fresh Sanctions On Russia (G.)

The British foreign secretary, Jeremy Hunt, is to urge Donald Trump to face down Moscow’s threat to western values by imposing wider economic sanctions against Russia and agreeing new rules to protect the legitimacy of democratic elections. In a speech in Washington on Tuesday during his first visit since taking over from Boris Johnson as the UK’s most senior diplomat, Hunt will specifically call for tighter regulation of online political advertising and new measures to prevent cyber attacks on electoral machinery. Hunt will also throw out a challenge to Trump’s protectionist policies by warning a weakening of free trade will only damage western economies, and ultimately western political power.

He will say the emergence of an international order based on the application of law rather than might had led to an exponential growth in trade, leading to extraordinary advances in economic and social prosperity across the globe. He will also call for Nato to set clearer red lines about Russia’s use of chemical weapons and incursions into foreign territory such as the annexation of Crimea in 2014. Without directly challenging the legitimacy of Trump’s election as president in 2016, he will point to the drawbacks in many recent democratic outcomes, saying: “The heart of any democracy is freedom of expression, which allows citizens to access independent information to help decide who to vote for. But the ubiquity of fake news, social media targeting and foreign attempts to manipulate elections have undermined confidence that this can actually happen.”

Any tarnishing of Trump’s electoral mandate is highly perilous territory for a foreign politician, and Hunt will temper his criticism by saying western leaders should not deceive themselves that populism is merely a byproduct of social media spreading fake news.

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Rebuilding Syria can solve a large part of Europe’s refugee problem, and US and UN are holding it back?

‘Secret Directive’ Bans UN Agencies From Helping Rebuild Syria – Lavrov (RT)

Washington’s “absolutely deconstructive” stance is hampering the rebuilding of Syria and constricts the UN in aiding the country until a so called ‘political transition’ takes place, Sergey Lavrov, Russia’s Foreign Minister, said.
“We addressed UNESCO on how they plan to implement the longtime talks, the longtime understanding on attracting the potential of this organization to rebuilding Palmyra,” an ancient city, regarded by the agency as a World Heritage Site, Lavrov said. “From the explanations of why UNESCO has still been unable to get involved in this process actively, we took that there was some kind of a directive from the United Nations headquarters in New York.”

He said that the UN Secretariat, which is the organizations’ executive arms, has “actually issued and distributed a secret directive throughout the UN system in October last year that prohibited the agencies included in this system from participating in any kind of projects aimed at restoring the Syrian economy.” Only humanitarian aid and nothing more” was allowed, the minister told the journalists after talks with Lebanese counterpart, Gebran Bassil, in Moscow. “A term was put forward that restoration of Syria would only be on the agenda after a certain progress is made in the so-called political transition” in the country, he added. The Russian Foreign Ministry also said that due to the “absolutely deconstructive” stance of the US one also shouldn’t expect any positive decisions on rebuilding Syria and return of refugees to the country from the UN Security Council.

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“People can face having their essential services cut off, be kicked out of their home due to rent arrears or even face prison if they get behind on their council tax..”

A country moving backwards.

UK Household Debt Balloons To £19bn As Bailiff Problems Multiply (Ind.)

UK households have fallen behind on essential bills such as council tax and electricity by as much as £18.9bn, according to Citizens Advice, which says it helps someone with bailiff-related problems every three minutes. The total outstanding debt includes almost £7.5bn in tax credit overpayments, £2.84bn owed in council tax and £2.2bn owed to water companies. Household debt has now overtaken consumer credit as the main money problem people contact Citizens Advice about, and the charity said that falling behind on household bills “has more severe consequences than missing consumer credit repayments”, such as overdrafts and personal loans.

“People can face having their essential services cut off, be kicked out of their home due to rent arrears or even face prison if they get behind on their council tax,” Citizens Advice warned. The charity said it had seen a 24 per cent increase in bailiff problems since the government introduced reforms in 2014 that were meant to protect people from unfair bailiff practices. Under the reforms, bailiffs are no longer allowed to make late-night visits to collect debts, and are prevented from using force against people who owe money, amongst other rules.

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Since there is no progress on many essential Brexit elements, this is not some doom fantasy.

NHS Leak Warns Of Brexit Drug Shortages And Disease Risk (G.)

Hospitals face running out of drugs in a chaotic no-deal Brexit, the group that represents NHS hospital and ambulance service has privately warned. Poor co-ordination by ministers and health service bosses means there has been a failure to prepare for the UK to be left without a Brexit deal, a leaked letter from NHS Providers said. “Public health and disease control co-ordination could suffer,” said NHS Providers chief executive Chris Hopson, setting out how a hard Brexit or no deal could negatively effect “the entire supply chain of pharmaceuticals” and “jeopardise” the EU citizens making up the “workforce on which the NHS relies”. Hopson’s letter, sent to NHS England chief executive Simon Stevens and NHS Improvement chief Ian Dalton on Friday, was leaked to the Times.

Hopson said the possibility of a no-deal or hard Brexit “with minimal regulatory alignment appears to be growing … For as long as that risk remains it is important that detailed operation planning is undertaken across the NHS. “Yet trusts tell us that their work in this area is being hampered by the lack of visible and appropriate communication. “Our members have begun planning … but they have hit a problem, in that some activities are clearly best done at a national level and, in the view of trusts, are best co-ordinated by NHS England and NHS Improvement. “However there has been no formal communication to trusts from either of your organisations on this issue.”

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Always risky to cut your immediate colleagues, but makes a ton of sense.

Jacinda Ardern Freezes New Zealand MPs’ Pay To Tackle Rich-Poor Divide (G.)

Jacinda Ardern has frozen the salaries of New Zealand’s MPs, saying the pay rises were out of step with the wider workforce and were adding to the rich-poor divide. The radical move has cross-party support from Ardern’s coalition partners, as well as the opposition National party. MPs’ salaries and allowances would be frozen till July 2019, Ardern said, while “a fairer formula for future pay increases” is developed for those in politics, who earn between NZ$163,000 ($108,000) to more than NZ$450,000 ($300,000). Ardern said the freeze was “the right thing to do” and was not about cost-cutting, but making New Zealand a more equitable nation.

The PM was prompted to take action after the Remuneration Authority recommended MPs receive a 3% pay rise, in a year that is seeing widespread strike action by teachers, nurses and other workers across New Zealand. Ardern earns more than NZ$450,000 a year, making her the fifth-highest paid leader in the OECD, and better paid than Canada’s Justin Trudeau and the UK’s Theresa May. According to a survey by Stuff, 62% of New Zealanders think the country’s prime ministers are paid too much. Australian prime minister Malcolm Turnbull earns the largest salary of any leader in the OECD. “It’s about whether or not it’s right that we receive a 3% pay increase that continues to extend that gap between those on the highest incomes and those on lower and more modest incomes,” Ardern told Radio NZ today.

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The EU MUST come up with a plan.

Salvini Refuses To Let In Refugees After Coastguard Ship Docks (G.)

An Italian coastguard ship with 177 people on board has docked in the Sicilian seaport of Catania, but Italy’s far-right interior minister Matteo Salvini has not given authorisation for the refugees and migrants to disembark. The passengers, who have been stuck on the coastguard boat Ubaldo Diciotti for five days will not be allowed on land until “Europe steps in to help’’, Salvini said. The Diciotti picked up 190 refugees and migrants last Wednesday from an overcrowded boat about 17 sea miles from the island of Lampedusa. Thirteen of them were evacuated for emergency medical treatment. Since then, Rome has insisted that Malta should take the group because their boat first passed through its search-and-rescue area.

But Malta has refused, claiming that the migrants wanted to reach Italy. Questioned by the Italian authorities, the 13 evacuated migrants claimed that the Maltese had escorted them outside its search-and-rescue zone. On Monday afternoon, after three days of negotiations, Italy’s transport minister Danilo Toninelli announced finally on Twitter that “The Diciotti ship will dock in Catania.” But shortly afterwards, sources close to Salvini said he had not given the authorisation to disembark, suggesting the boat was granted permission to dock but the migrants will have to remain on board. Salvini said on Italian TV: “The ship may land in Italy, as long as the 177 migrants are distributed, in a spirit of solidarity by the EU.”

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What does it mean? More debt.

What Being Back in the Markets Actually Means for Greece (TPP)

The devil, as they say in English, lies in the details. Being ‘back in the markets’, ‘turning a page,’ even declaring ‘the end of the Greek Crisis’ have all become commonplace expressions over the past few weeks. But what does this substantively mean? It means that an economy that has shrunk by around 25% saw, due to that shrinkage, its debts go up by about the same amount, despite near 100 billion Euro in debt being wiped off in 2012. Current outstanding Greek debt stands at 343 billion Euro. It now needs to pay a large chunk of that back to get back to where it was in 2008, with 109% debt to GDP.

The years of the Greek crisis (2010-2018) were the years that former finance minister Yanis Varoufakis famously described as the years of ‘extend and pretend.’ The EU would extend more credit (debt) to Greece that Greece would pretend to pay back. While most of the bailout cash prior to 2013 went through Greece back to Northern Banks, after 2013 most of the Debt was held by an opaqueprivate financial institution housed in Luxemburg called the European Stability Mechanism (ESM). It’s the debts held by the ESM, and the loans disbursed by the ESM, that have been the focus of the new game of extend and pretend that is called variously ‘debt-relief’ and Greece ‘being back in the markets.’

Consider the following. The ESM lent 86 Billion Euro to Greece between August 2015 and July 2018. The final tranche of these loans will not be paid back until 2060, with payments beginning in 2034. This ten year deferral of payments along with an interest rate reduction to an average of 1.62% across issues is the much heralded debt relief agreement of June 21st 2018. All things considered, and given real ‘go to the market’ alternatives if you have Greece’s bond rating, this is not a bad deal – on paper. These measures, plus the final bailout cash being added to cash reserves, means that Greece will actually not have to return to the markets for funding for almost two years. Given this, the ‘return to the markets’ comes with some pretty large airbags, all of which makes buying Greek debt more attractive, hence recent bond rating upgrades. So, we are extending, but what are we still pretending?

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“..Pabst Blue Ribbon by the case!”

The Winners Will Lose and the Losers Will Win (Kunstler)

What a revoltin’ development, as Chester A. Riley used to say on “The Life of Riley” TV show back in 1955, when America was great (at least that’s the theory). Riley was an original deplorable before the concept even emerged from the murk of early pop culture. He worked in an aircraft factory somewhere in southern California, which only a few decades prior was the mecca of an earlier generations of losers: the Oakies and other Dust Bowl refugees who went west to pick fruit or get into the movies. Chester A. Riley supported a family on that job as a wing-riveter. All the male characters in the series had been through the Second World War, but were so far removed from the horror that the audience never heard about it.

That was the point: to forget all that gore and get down with the new crazes for backyard barbeque, seeing the USA in your Chevrolet, enjoying that healthful pack of Lucky Strikes in the valley of the Jolly Green Giant… double your pleasure, double your fun… and away go troubles down the drain…. As Tom Wolfe pointed out eons ago, the most overlooked feature of post-war American life was the way that the old US peasantry found themselves living higher on the hog than Louis the XVI and his court at Versailles. Hot and cold running water, all the deliciously engineered Betty Crocker cake you could eat, painless dentistry, and Yankees away games on Channel 11, with Pabst Blue Ribbon by the case! By 1960 or so, along came color TV and air-conditioning, and in places like Atlanta, St. Louis, and Little Rock, you barely had to go outside anymore, thank God! No more heat stroke, hookworm, or chiggers.

It was a helluva lot better than earlier peasant classes had it, for sure, but let’s face it: it was kind of a low-grade nirvana. And a couple of generations beyond “The Life of Riley” the whole thing has fallen apart. There are few hands-on jobs that allow a man to support a family. And what would we even mean by that? Stick the women back in kitchen and the laundry room? What a waste of human capital (even for socialists who oppose capital). The odd thing is that there is increasingly little for this class of people to do besides stand near the door of the WalMart, and if the vaunted tech entrepreneurs of this land have their way with robotics, you can be sure there would be less than nothing for them to do… except crawl off and die quietly, without leaving an odoriferous mess.

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Long read. Steve Keen comments: This will doom the USA to stagnation: a generation with too much debt and no prospect of using credit like the previous generation.

The Inescapable Weight Of My $100,000 Student Debt (G.)

On Halloween in 2008, about six weeks after Lehman Brothers collapsed, my mother called me from Michigan to tell me that my father had lost his job in the sales department of Visteon, an auto parts supplier for Ford. Two months later, my mother lost her job working for the city of Troy, a suburb about half an hour from Detroit. From there our lives seemed to accelerate, the terrible events compounding fast enough to elude immediate understanding. By June, my parents, unable to find any work in the state where they spent their entire lives, moved to New York, where my sister and I were both in school. A month later, the mortgage on my childhood home went into default.

After several months of unemployment, my mother got a job in New York City, fundraising for a children’s choir. In the summer of 2010, I completed my studies at New York University, where I received a BA and an MA in English literature, with more than $100,000 of debt, for which my father was a guarantor. My father was still unemployed and my mother had been diagnosed with an aggressive form of breast cancer. She continued working, though her employer was clearly perturbed that she would have to take off every Friday for chemotherapy. To compensate for the lost time, on Mondays she rode early buses into the city from the Bronx, where, after months of harrowing uncertainty, my parents had settled. She wanted to be in the office first thing.

In January 2011, Chase Bank took full possession of the house in Michigan. Our last ties were severed by an email my father received from the realtor, who had tried and failed to sell the property, telling him he could now cancel the utilities. In May, I got a freelance contract with a newspaper that within a year would hire me full-time – paying me, after taxes, roughly $900 every two weeks. In September 2011, my parents were approved for bankruptcy, and in October, due to a paperwork error, their car was repossessed in the middle of the night by creditors. Meanwhile, the payments for my debt – which had been borrowed from a variety of federal and private lenders, most prominently Citibank – totalled about $1,100 a month.

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May 042018
 


Herri met de Bles c1510-after 1555 Saint Jerome medidating

 

Fed’s QE Unwind Accelerates Sharply (WS)
The Root of It All (Batnick)
Tesla Is A Zombie Company (F.)
With No Letup In Home Prices, The California Exodus Surges (MW)
Demand For US Soybeans Remains Strong Despite China (CNBC)
US Charges VW Ex-CEO With Conspiracy And Fraud (G.)
Mueller’s Questions for Trump Show Folly of Special-Counsel Appointments (NR)
Why We Need To Be Propagandized For Our Own Good (CJ)
Neocons Form Brand New Russia-Bashing ‘Think’ Tank (RI)
UK Pushes To Strengthen Anti-Russia Alliance (G.)
Nobel Prize For Literature Postponed Amid Swedish Academy Turmoil (BBC)
Jacinda Ardern Pledges Shelter For All Homeless People Within Four Weeks (G.)

 

 

As most voices seem convinced QT would be madness.

Fed’s QE Unwind Accelerates Sharply (WS)

The QE Unwind is ramping up toward cruising speed. The Fed’s balance sheet for the week ending May 2, released this afternoon, shows a total drop of $104 billion since the beginning of the QE Unwind in October – to the lowest level since June 11, 2014. During the years and iterations of QE, the Fed acquired $3.4 trillion in Treasury securities and mortgage-backed securities. The mortgages underlying those MBS are guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. The “balance sheet normalization,” as the Fed calls it, was nudged into motion last October. But the pace accelerates every quarter until it reaches up to $50 billion a month in Q4 this year.

This would trim the balance sheet by up to $420 billion this year, and by up to $600 billion in 2019 and every year going forward, until the Fed considers the balance sheet to be adequately “normalized” — or until something big breaks, whichever comes first. [..] The balance of Treasury securities fell by $17.6 billion in April. This is up 60% from March, when $11 billion “rolled off.” Since the beginning of the QE-Unwind, $70 billion in Treasuries “rolled off.” Now at $2,395 billion, the balance of Treasuries has hit the lowest level since June 18, 2014.

[..] Residential MBS are different from regular bonds. Holders receive principal payments on a regular basis as the underlying mortgages are paid down or are paid off. At maturity, the remaining principal is paid off. Over the years, to keep the MBS balance from declining, the New York Fed’s Open Market Operations (OMO) has been continually buying MBS. But settlement of those trades occurs two to three months later. The Fed books the trades on an as-settled basis. The time lag between the trade and settlement causes the large weekly fluctuations on the Fed’s balance sheet. And it also delays when MBS that “rolled off” actually disappear from the balance sheet.

[..] Total assets on the Fed’s balance sheet dropped by $30 billion in April, and by $104 billion since the beginning of the QE-Unwind, to $4,356 billion. This is the lowest since June 11, 2014. Note that total assets are now down by $160 billion from the peak in January 2015:

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“The poor stay poor, the rich get rich. That’s how it goes. Everybody knows.”

The Root of It All (Batnick)

Steven Pinker wrote, “In almost every year from 1992 through 2015, an era in which the rate of violent crime plummeted, a majority of Americans told pollsters that crime was rising. In late 2015, large majorities in eleven developed countries said that “the world is getting worse.” But crime isn’t rising, and the world is objectively getting better. And while life is improving at the macro level, at the micro level, people aren’t feeling so great. So what gives? We tend to expect the worst as a way to insulate ourselves from disappointment. Life is not about good or bad, it’s about better or worse, so if things don’t turn out as bad as we imagine, we’re pleasantly surprised. If you were asked to think about how your life could improve, a few things might come to mind.

But imagine how your life could get worse, and a barrage of negative possibilities fills your brain. The risk and reward of every day life is asymmetrical. This is why being a pessimist feels safe and being an optimist feels reckless. [..] While the news certainly isn’t doing anyone any favors, there are legitimate reasons why people don’t feel like things are getting better. For too many, they aren’t. The chart below shows the change in real income since 1980. This chart is the root of all the negative things facing our society. People in the top 20% saw their income increase by 60%. People in the bottom 20% saw their income rise by just 5% over the same time. As Leonard Cohen said, “The poor stay poor, the rich get rich. That’s how it goes. Everybody knows.”

Real income increased 38% from 1980-2016, or just 0.87% per year, and 70% of that increase went to people in the top 20%. Things are better, especially around the world, but in our country, way too many people are getting left behind. Extreme poverty is collapsing, but relative poverty is exploding, and everything in life is relative. If things don’t feel better than they were two hundred years ago, it’s because people compare themselves to their neighbors, not to their ancestors.

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As simple as that.

Tesla Is A Zombie Company (F.)

Tesla’s quarter was terrible from a financial perspective, as I had expected. The controlling figure I use, operating cash flow (operating loss plus depreciation minus capital expenditures,) was reported as -$836 million in the quarter, which very nearly approximates one quarter of 2017’s full year cash outflow of $3.4 billion. Things are not improving at Tesla from a financial perspective, and the second quarter is likely to be just as bad as the first. For the third consecutive quarter, Tesla posted negative EBITDA (-$180 million) and if this were any other company, there would be an active death watch on the Street. Tesla’s bonds have dropped sharply in today’s trading, now quoted at 87 cents on the dollar.

This is not surprising given that Tesla is not even remotely close to earning enough profit to cover its interest expense, which management estimated would be $160 million in the second quarter. Tesla added $346 million to its now $10 billion debt pile in the quarter, and the management’s weasel-worded projection of “positive net income excluding non-cash stock based compensation in Q3 and Q4” would still leave Tesla short of covering its debt service costs, by my calculations. So, from a financial perspective, Tesla is a zombie company. There is simply no justification for Tesla’s current market capitalization of $47.2 billion, and the market eventually figures these things out. It’s actually been a slow burn for Tesla shares, not a plummet, but that can be just as painful.

On September 12, 2014, Teslashares closed at $279.20 and the Nasdaq Composite closed at 4567.60. As of this writing, Tesla is trading at $279.04 and the Nasdaq is trading at 7011.00. So that’s where the value destruction Musk has wrought is evident. His shares are down slightly in a period in which his peer companies have collectively risen 53.5%.

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Housing bubbles break communities.

With No Letup In Home Prices, The California Exodus Surges (MW)

Over a million more people moved out of California from 2006 to 2016 than moved in, according to a new report, due mainly to the high cost of housing that hits lower-income people the hardest. “A strong economy can also be dysfunctional,” noted the report, a project of Next 10 and Beacon Economics. Housing costs are much higher in California than in other states, yet wages for workers in the lower income brackets aren’t. And the state attracts more highly-educated high-earners who can afford pricey homes. There are many reasons for the housing crunch, but the lack of new construction may be the most significant.

According to the report, from 2008 to 2017, an average of 24.7 new housing permits were filed for every 100 new residents in California. That’s well below the national average of 43.1 permits per 100 people. If this trend persists, the researchers argued, analysts forecast the state will be about 3 million homes short by 2025. California homeowners spend an average of 21.9% of their income on housing costs, the 49th worst in the nation, while renters spend 32.8%, the 48th worst. The median rent statewide in 2016 was $1,375, which is 40.2% higher than the national average. And the median home price was — wait for it — more than double that of the national average.

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Globally, supple has a hard time keeping up with demand. Everybody involved knows this.

Demand For US Soybeans Remains Strong Despite China (CNBC)

Demand for U.S. soybeans remains strong, regardless of worries China could target the crop in retaliation over Trump administration tariffs. China has canceled several shipments of U.S. soybeans in the last month, raising questions over whether the country is taking preemptive action against the U.S. by reducing purchases. But analysts say the reduction is a minor amount and is not that surprising from a seasonal perspective. The “U.S. accounts for 37 percent of total soybean exports throughout the world. Beyond Brazil, there’s really nobody else,” said Rich Nelson, director of research at Allendale, an agricultural market research and trading firm. “Despite the trade concerns, there’s really nobody else. You’re just simply not going to have a massive decline in U.S. soybean exports,” he said.

Chinese cancellations of U.S. soybean orders for the week ended April 26 resulted in a decline of 133,700 metric tons in net sales to China, USDA Foreign Agricultural Service data showed Thursday. But 66,000 metric tons of those soybeans were sent to Vietnam instead, the data showed. Meanwhile, the U.S. sold 82,700 metric tons of soybeans in new sales to Mexico, 68,800 to Taiwan, 60,000 to Argentina and 52,600 to the Netherlands. Although Argentina is the third-largest exporter of soybeans, a severe drought has reduced production by 7 million tons to 40 million, according to USDA estimates. “That just goes to show we’re not dependent on China for soybean exports,” said Michael Stumo, head of Coalition for a Prosperous America, a nonprofit representing the interests of those in manufacturing, agriculture and labor unions.

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Germany doesn’t extradite its citizens.

US Charges VW Ex-CEO With Conspiracy And Fraud (G.)

US authorities have charged Volkswagen’s former chief executive officer Martin Winterkorn with conspiracy and wire fraud in relation to the car company’s efforts to cheat on US diesel emissions tests. Winterkorn, who resigned in 2015 as the scandal was revealed, conspired to defraud the US and violate the Clean Air Act, federal laws designed to control air pollution, according to an indictment unsealed on Thursday in a Michigan federal court. Five other VW executives were also charged in the indictment. He becomes the highest-ranking executive to be charged over “dieselgate” – a scheme where VW used software to trick government emissions testers.

“The indictment unsealed today alleges that Volkswagen’s scheme to cheat its legal requirements went all the way to the top of the company,” said US attorney general Jeff Sessions. “These are serious allegations and we’ll prosecute this case to the full extent of the law.” When news of the scheme broke Winterkorn said he was “stunned that misconduct on such a scale was possible in the Volkswagen Group”. He denied any knowledge of the scandal – which was used to evade pollution limits on nearly 600,000 diesel vehicles. Last December, Oliver Schmidt, a senior Volkswagen executive, was jailed for seven years and fined $400,000 for his part in the scheme. Schmidt, who had returned to Germany, was arrested while on holiday in Florida. VW pleaded guilty as a corporation in March, agreeing to pay a record $4.3bn in fines.

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“If Bob Mueller wants that kind of control over the executive branch, he should run for president. Otherwise, he is an inferior executive official who has been given a limited license — ultimately, by the chief executive — to investigate crime. If he doesn’t have an obvious crime, he has no business inventing one, much less probing his superior’s judgment. He should stand down.”

Mueller’s Questions for Trump Show Folly of Special-Counsel Appointments (NR)

I am assuming the authenticity of the questions that Special Counsel Robert Mueller reportedly wants to ask President Trump. The questions indicate that, after a year of his own investigation and two years of FBI investigation, the prosecutor lacks evidence of a crime. Yet he seeks to probe the chief executive’s motives and thought processes regarding exercises of presidential power that were lawful, regardless of one’s view of their wisdom. If Bob Mueller wants that kind of control over the executive branch, he should run for president. Otherwise, he is an inferior executive official who has been given a limited license — ultimately, by the chief executive — to investigate crime. If he doesn’t have an obvious crime, he has no business inventing one, much less probing his superior’s judgment. He should stand down.

The questions, reported by the New York Times, underscore that the special counsel is a pernicious institution. Trump should decline the interview. More to the point, the Justice Department should not permit Mueller to seek to interrogate the president on so paltry and presumptuous a showing.

When should a president be subject to criminal investigation? It is a bedrock principle that no one is above the law. The Framers made clear that this includes the president. But, like everything else, bedrock principles do not exist in a vacuum. They vie with other principles. Two competing considerations are especially significant here. First, our law-enforcement system is based on prosecutorial discretion. Under this principle, the desirability of prosecuting even a palpable violation of law must be balanced against other societal needs and desires. We trust prosecutors to perform this cost-benefit analysis with modesty about their mission and sensitivity to the disruption their investigations cause.

Second, the president is the most essential official in the world’s most consequential government. That government’s effectiveness is necessarily compromised if the president is under the cloud of an investigation. Not only are the president’s personal credibility and capability diminished; such an investigation discourages talented people from serving in an administration, further undermining good governance. The country is inexorably harmed because a suspect administration’s capacity to execute the laws and pursue the interests of the United States is undermined.

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Caitlin Johnstone on the Atlantic Council.

Why We Need To Be Propagandized For Our Own Good (CJ)

I sometimes try to get establishment loyalists to explain to me exactly why we’re all meant to be terrified of this “Russian propaganda” thing they keep carrying on about. What is the threat, specifically? That it makes the public less willing to go to war with Russia and its allies? That it makes us less trusting of lying, torturing, coup-staging intelligence agencies? Does accidentally catching a glimpse of that green RT logo turn you to stone like Medusa, or melt your face like in Raiders of the Lost Ark? “Well, it makes us lose trust in our institutions,” is the most common reply. Okay. So? Where’s the threat there? We know for a fact that we’ve been lied to by those institutions. Iraq isn’t just something we imagined. We should be skeptical of claims made by western governments, intelligence agencies and mass media. How specifically is that skepticism dangerous?

Trying to get answers to such questions from rank-and-file empire loyalists is like pulling teeth, and they are equally lacking in the mass media who are constantly sounding the alarm about Russian propaganda. All I see are stories about Russia funding environmentalists (the horror!), giving a voice to civil rights activists (oh noes!), and retweeting articles supportive of Jeremy Corbyn (think of the children!). At its very most dramatic, this horrifying, dangerous epidemic of Russian propaganda is telling westerners to be skeptical of what they’re being told about the Skripal poisoning and the alleged Douma gas attack, both of which do happen to have some very significant causes for skepticism.

When you try to get down to the brass tacks of the actual argument being made and demand specific details about the specific threats we’re meant to be worried about, there aren’t any to be found. Nobody’s been able to tell me what specifically is so dangerous about westerners being exposed to the Russian side of international debates, or of Russians giving a platform to one or both sides of an American domestic debate. Even if every single one of the allegations about Russian bots and disinformation are true (and they aren’t), where is the actual clear and present danger? No one can say. No one, that is, except the Atlantic Council.

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The entire MSM can’t get the job done?!

Neocons Form Brand New Russia-Bashing ‘Think’ Tank (RI)

A group of neocon heartthrobs have banded together with an eclectic array of Russiagaters to form a visionary organization committed to protecting Western democracy. You can also pre-order their book, according to their website. Chaired by pompous chess wizard turned Kremlinologist Garry Kasparov, the brand-new Renew Democracy Initiative (RDI) is the latest three-letter-initialism non-profit devoted to “the defense of democratic freedom and prosperity.” The trailblazing think tank has already sent shockwaves through Washington, DC and every European capital. Celebrated war cheerleader Max Boot, who serves on RDI’s board of directors, announced the creation of this highly original organization in a Washington Post op-ed.

Interestingly, the unveiling started with a laundry list of 10 other groups that are already “protesting Trump and championing democracy.” So why does the world need RDI, then? Because RDI is different – some might even say “special.” Unlike the dozens of other well-financed bastions of status-quo thinking, RDI aims to “unite both the center-left and center-right” by promoting “liberty, democracy and sanity in an age of discord.” And where will this much-needed sanity come from? From RDI’s all-star team of important intellectuals and free thinkers, of course – some of whom just happen to be really tight with the other 10 groups mentioned in Boot’s WaPo piece. Dear Mr. Boot: does fighting Putin with the Committee to Investigate Russia allow enough spare time to fight Putin with the Renew Democracy Initiative? Curious minds want to know.

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It’s contagious.

UK Pushes To Strengthen Anti-Russia Alliance (G.)

The UK will use a series of international summits this year to call for a comprehensive strategy to combat Russian disinformation and urge a rethink over traditional diplomatic dialogue with Moscow, following the Kremlin’s aggressive campaign of denials over the use of chemical weapons in the UK and Syria. British diplomats plan to use four major summits this year – the G7, the G20, Nato and the European Union – to try to deepen the alliance against Russia hastily built by the Foreign Office after the poisoning of the former Russian double agent Sergei Skripal in Salisbury in March. “The foreign secretary regards Russia’s response to Douma and Salisbury as a turning point and thinks there is international support to do more,” a Whitehall official said.

“The areas the UK are most likely to pursue are countering Russian disinformation and finding a mechanism to enforce accountability for the use of chemical weapons.” Former Foreign Office officials admit that an institutional reluctance to call out Russia once permeated British diplomatic thinking, but say that after the poisoning of Skripal and his daughter, Yulia, that attitude is evaporating. A cross-party alliance in parliament has developed which sees the question of Russian corruption no longer through the prism of finance, but instead as a security and foreign policy threat, requiring fresh sanctions even if this causes short-term economic damage to the UK.

[..] For some old hands in the Foreign Office with deep experience of Russia, however, demonising Russia is a disastrous strategy. Sir Anthony Brenton, the British ambassador to Russia between 2004 and 2008, insists a fruitful common agenda with Moscow on issues such as nuclear disarmament, Islamist terrorism and cyberwarfare is still possible. “What on earth was her majesty’s foreign secretary doing comparing the Russian World Cup with Hitler’s 1936 Olympics?” he asked. “If you are looking for a single statement really calculated to infuriate the Russians there it is, or indeed the defence secretary telling Russia to shut up. Elementary diplomacy goes a long way with the Russians and we need to get back to that.

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Still feels like a weird story.

Nobel Prize For Literature Postponed Amid Swedish Academy Turmoil (BBC)

The organisation that decides the Nobel Prize for Literature has said it will not announce an award this year, after it was engulfed in a scandal over sexual assault allegations. The Swedish Academy has been in crisis over its handling of allegations against the husband of a member. She has since quit, as have the academy’s head and four other members. The academy says it will now announce the 2018 winner along with the 2019 winner next year.

The scandal is the biggest to hit the prize since it was first awarded in 1901. The academy said the decision had been made due to a lack of public confidence. Some academy members had argued that the prize should proceed to protect the tradition, but others said the institution was in no state to present the award. Apart from six years during the world wars, there has been only one year when the prize was not awarded. No worthy winner was found in 1935.

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You go girl. The only right thing to do.

Jacinda Ardern Pledges Shelter For All Homeless People Within Four Weeks (G.)

The New Zealand government has promised to get the country’s homeless population off the streets and into shelter in time for winter. In a joint announcement on Friday, housing minister Phil Twyford and prime minister Jacinda Ardern announced a NZ$100m emergency housing package to tackle the ballooning problem. An estimated 40,000 people live in cars, tents and garages amid a chronic housing shortage in the nation of 4.7 million people. “We’re pulling out all the stops to support people in need and urgently increase housing supply this winter,” said housing minister Phil Twyford. “Our government will make sure everyone is helped to find warm, dry housing this winter.”

With winter starting on 1 June in the southern hemisphere, less than four weeks away, the government has put out an urgent call for anyone with additional accommodation that may be suitable to house homeless people. Seasonal worker accommodation such as shearers quarters, private rental properties, motor camps and maraes (Maori meeting houses) would all be considered. New Zealand has the highest rates of homelessness in the OECD, with more than 40,000 people living on the streets, in emergency housing or in substandard conditions. Per capita New Zealand’s homeless population is almost twice as bad as Australia, which is placed third on the list. More than half of New Zealand’s homeless population live in Auckland but it is also growing in smaller cities such as Rotorua, Tauranga, Queenstown and Wellington.

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Oct 272017
 
 October 27, 2017  Posted by at 9:33 am Finance Tagged with: , , , , , , , , ,  2 Responses »


Salvator Rosa Lucrezia as poetry 1640-41

 

The World’s Witnessing A New Gilded Age (G.)
ECB Sees Option for Ending QE With Short Taper in 2018 (BBG)
The Fed Balance Sheet Unwind Myth (Roberts)
Alarm Sounds Over State Of UK High Street As Sales Crash (G.)
75% of UK MPs Don’t Know Where Money Comes From (CityAM)
China’s Minsky Moment (Muir)
Catalonia’s Leader Rules Out Snap Election, Crisis Deepens (R.)
Catalan Companies Face Boycott Over Independence Push (AFP)
New JFK Files Reveal FBI Warning On Oswald And Soviets’ Missile Fears (G.)
Australian Court Rules Deputy PM Ineligible For Parliament (R.)
‘I Want The Government … To Bring Kindness Back’ (RNZ)

 

 

A hundred years ago.

The World’s Witnessing A New Gilded Age (G.)

The world’s super-rich hold the greatest concentration of wealth since the US Gilded Age at the turn of the 20th century, when families like the Carnegies, Rockefellers and Vanderbilts controlled vast fortunes. Billionaires increased their combined global wealth by almost a fifth last year to a record $6tn – more than twice the GDP of the UK. There are now 1,542 dollar billionaires across the world, after 145 multi-millionaires saw their wealth tick over into nine-zero fortunes last year, according to the UBS/PwC Billionaires report. Josef Stadler, the lead author of the report and UBS’s head of global ultra high net worth, said his billionaire clients were concerned that growing inequality between rich and poor could lead to a “strike back”. “We’re at an inflection point,” Stadler said. “Wealth concentration is as high as in 1905, this is something billionaires are concerned about.

The problem is the power of interest on interest – that makes big money bigger and, the question is to what extent is that sustainable and at what point will society intervene and strike back?” Stadler added: “We are now two years into the peak of the second Gilded Age.” He said the “$1bn question” was how society would react to the concentration of so much money in the hands of so few. Anger at so-called robber barron families who built up vast fortunes from monopolies in US rail, oil, steel and banking in the late 19th century, an era of rapid industrialisation and growing inequality in America that became known as the Gilded Age, led to President Roosevelt breaking up companies and trusts and increasing taxes on the wealthy in the early 1900s. “Will there be similarities in the way society reacts to this gilded age?,” Stadler asked. “Will the second age end or will it proceed?”

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We’re doing so well we need to keep throwing money at bankers.

ECB Sees Option for Ending QE With Short Taper in 2018 (BBG)

European Central Bank policy makers implicitly assume their newly-extended bond-buying program will be tapered to a halt by the end of next year so long as the inflation outlook improves, according to officials with knowledge of the discussions. The Governing Council, which met on Thursday, focused on the first nine months of next year for its quantitative-easing program and didn’t formally debate options for what to do after that, said the people, asking not to be named because the talks are private. While tapering would be possible, extending the program without changing the pace of purchases is also a credible option if inflation doesn’t show sufficient progress, one of them said. Whether to set a firm end-date on the bond-buying program has been a key sticking point for some officials.

The council agreed to cut monthly purchases in half, to €30 billion ($35 billion), and President Mario Draghi said that a “large majority” backed the decision to include a pledge to extend again if needed. He added that “it’s never been our view that things should stop suddenly.” The meeting came after governors were presented with several scenarios at a seminar on Wednesday, according to the people. Those included a reduction to 40 billion euros a month through June, and a 12-month tapering through December, similar to the Federal Reserve’s exit from its own program. The latter scenario wasn’t considered a realistic policy option, one of the people said. Governors also looked at a three-month scenario that would see buying after September tapered in monthly steps to 20 billion euros, 10 billion euros and 5 billion euros, another official said.

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“..In fact, just last week the Fed increased their balance sheet by over $13.5 billion dollars. No wonder the stock market shot higher.”

The Fed Balance Sheet Unwind Myth (Roberts)

Since the beginning of the year, the Federal Reserve has been heavily discussing, warning rather, they were going to begin to “unwind” their gargantuan balance sheet. As Michael Lebowitz recently penned in his subscription-only article “Draining The Punchbowl:” “Since QE was first introduced, the S&P 500 has gained 1,546 points. All but 355 points were achieved during periods of QE. Of those remaining 355 points, over 80% occurred after Trump’s victory.” That is a pretty amazing set of stats. I have previously noted the high correlation of the financial markets relative to the ongoing liquidity operations of the Federal Reserve. I have updated that analysis to show the reduction in the balance according to the Fed’s proposed schedule.

While the market stumbled following the end of QE in the United States, global QE, as shown in the charts of the major global Central Banks picked up the slack.

But now, the ECB has already begun discussing their plans to begin cutting the amount of their QE program by half in the coming year. The hope, of course, by Central Bank officials is that global economies are now humming along at a pace strong enough to withstand the reduction of “emergency measures.” Of course, the real question is whether the Central Bank’s “measures” of economic strength are accurate. While there are certainly indicators such as GDP growth, production, and employment measures which suggests that global economies are indeed on a cyclical upswing, there are also numerous measures which suggest the opposite.

With the Fed trying to raise interest rates, and reduce the balance sheet simultaneously, the “tightening of monetary policy” is a drag on economic growth and ultimately the stock market. But as I stated above, while the Fed is currently “discussing” the reduction of their balance sheet beginning in October, they actually haven’t. In fact, just last week the Fed increased their balance sheet by over $13.5 billion dollars. No wonder the stock market shot higher.

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It’s the weather. Too warm to shop.

Alarm Sounds Over State Of UK High Street As Sales Crash (G.)

The fastest monthly fall in high street sales since the height of the recession in 2009 has raised fears for the retail sector ahead of the crucial Christmas trading period. A survey by the the CBI found that 50% of retailers suffered declining sales in October while only 15% benefited from an increase, leaving a rounded balance of -36%, the lowest since March 2009. The business lobby group said the survey showed retailers were “feeling the pinch” from rising inflation, which has eaten into consumer incomes and squeezed profit margins. Uncertainty surrounding the outcome of the UK’s Brexit negotiations has also preyed on consumer confidence, which has declined sharply over the past 18 months and depressed spending. Figures estimating GDP growth in the third quarter showed the services sector holding up despite recent declines in wages adjusted for inflation.

However, the construction sector fell into recession. Rain Newton-Smith, the CBI chief economist, said: “While retail sales can be volatile from month to month, the steep drop in sales in October echoes other recent data pointing to a marked softening in consumer demand.” The gloomy CBI survey came as Debenhams warned of an “uncertain” environment on the high street in the run up to Christmas after suffering a 44% dive in profits. [..] Warm autumn weather and low consumer confidence in the wake of the Brexit vote have also combined to deliver a “grim” October, according to the John Lewis boss, Paula Nickolds, who revealed last week that shoppers are continuing to put off expensive household purchases. That comes after the UK retail sector recorded its lowest growth rate in four years for the three months to the end of September, according to official data.

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Maube the Bank of England should send them their reports?

75% of UK MPs Don’t Know Where Money Comes From (CityAM)

Only 15% of MPs surveyed answered correctly when asked a true/false question on whether banks create money when they make loans. Almost two-thirds of the 50 MPs surveyed by Dods for campaign group Positive Money wrongly thought banks can’t create money, while a quarter admitted they didn’t know. In a far from stellar field Conservative MPs outperformed slightly “in this regard”, with 19% answering correctly, compared to only one in 20 Labour MPs. More than three-quarters of the MPs surveyed incorrectly believed that only the government has the ability to create new money. Some 23% knew this to be false, with Labour performing better than the Conservatives. The Bank of England has previously intervened to point out that most money in the UK begins as a bank loan.

In a 2014 article the Bank pointed out that “whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.” The perception of money creation has been complicated further by the unorthodox use of quantitative easing, in which the government creates money electronically, which is then used to buy financial assets. Fran Boait, executive director of Positive Money, said: “Despite their confidence in telling the public that there is ‘no magic money tree’ to pay for vital services, politicians themselves are shockingly ignorant of where money actually comes from. “There is in fact a ‘magic money tree’, but it’s in the hands of commercial banks, such as Barclays, HSBC and RBS, who create money whenever they make loans.”

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The difference between short and long term.

China’s Minsky Moment (Muir)

Sometimes you have to love the naivety of the markets. At this week’s Communist Party Congress meeting in Beijing, the governor of the PBoC (People’s Bank of China) said the following; “If we are too optimistic when things go smoothly, tensions build up, which could lead to a sharp correction, what we call a ‘Minsky moment’. That’s what we should particularly defend against.” Yet instead of focusing on this dire warning, markets are busy trying to discount the chance of a Powell Fed or a Republican tax cut. Although both of these developments would be important, China is the tail that wags the dog. Full stop. Figure out China, and all the other financial market forecasts become that much easier. Some might argue this “Minsky moment” warning is nothing more than a Central Bank whistling in the wind.

Didn’t Greenspan caution about a similar concern with his “irrational exuberance” speech? And didn’t that end up being a complete non-event? Yet I would argue that China is not the same as other countries. Although there are market elements to their economy, to a large degree, China is still a command economy. If Chinese leadership wants a particular outcome, they can just demand it, and it will happen. So when the head of the PBoC warns about a “Minsky moment”, it’s probably not a good idea to load up on financial assets. For the longest time, China exported goods and imported developed nation debt and other financial assets. They had already started down the road of re-balancing their economy away from this export driven model, but this recent development confirms that the old playbook should be thrown out the window.

The global financial system is changing, and China is leading the way. Their moves will reverberate for years in the future. The Chinese authorities have just put up the warning flag, and you would be foolish to not believe it. This long term warning coincides with my belief that over the short term, the risks are all to the downside. I have been banging the drum on the fact that the Chinese government have done everything in their power to keep markets stabilized through their Communist Party Congress. They haven’t even hidden this fact. From the big sign above the Shenzhen Securities Exchange building that read “Use every effort to protect the stability of stock market for 20 days,” to the recent release that the Chinese government has asked firms to delay bad result during Congress, the message is clear.

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Too many last minute turnarounds. But still explosive.

Catalonia’s Leader Rules Out Snap Election, Crisis Deepens (R.)

Catalonia’s leader Carles Puigdemont on Thursday said he would not hold a new regional election to break the deadlock between Madrid and separatists wanting to split from Spain, sharpening a political crisis that could turn into direct confrontation. Puigdemont had been expected to announce an election to head off moves by Madrid to take direct control of the autonomous region in the next few days. But, speaking in the courtyard of the regional government headquarters in Barcelona, Puigdemont said the central government had not provided sufficient guarantees that holding an election would prevent the imposition of direct rule. “I was ready to call an election if guarantees were given. There is no guarantee that justifies calling an election today,” Puigdemont said.

He said it was now up to the Catalan parliament to move forward with a mandate to break from Spain following an independence referendum that took place on Oct. 1 – a vote which Madrid had declared illegal and tried to stop. Some independence supporters are pushing him to unilaterally declare independence. Late on Thursday, the regional government’s business head resigned over his opposition to a unilateral declaration, a sign of growing division in the separatist movement. Puigdemont’s stand sets the stage for the Spanish Senate on Friday to approve the take-over of Catalonia’s institutions and police, and give the government in Madrid the power to remove the Catalan president.

But this could spark confrontation on the streets as some independence supporters have promised to mount a campaign of civil disobedience. Spanish Deputy Prime Minister Soraya Saenz de Santamaria, speaking in a Senate committee, said: “The independence leaders have shown their true face – they have promised a dream but are performing tricks.” The aim of Article 155 – the constitutional trigger for direct rule – was to permit any election to take place in a normal and neutral situation, she said. The Spanish government has said it would call such a vote within six months of taking over Catalonia.

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Sad.

Catalan Companies Face Boycott Over Independence Push (AFP)

Calls for a boycott of Catalan food, cars and other goods, to punish the region for its separatist push, are worrying businesses who fear the economy will suffer. “You have to hit them where it hurts the most: the wallet,” a Twitter user wrote under the hashtag #boycottcatalanproducts. “We Spaniards who do not want Spain to be broken up… we can take action by adopting dissuasive steps of an economic nature,” reads a Facebook page calling for consumers to snub Catalan products. Appeals for a boycott have become more urgent since Catalonia’s separatist regional government held a banned independence referendum on October 1 in defiance of Spain’s central government and courts. The campaign targets Catalonia’s key agriculture and food sectors, with consumers urged to shun cava, a sparkling wine, Estrella Damm beer, as well as Vichy Catalan and Font Vella bottled water.

Medicines are also on the list to hurt Catalonia’s important pharmaceutical sector, as well as cars made by Seat, German carmaker Volkswagen’s Spanish unit in the region. Products made by foreign multinationals in Catalonia, including Nestle and Unilever, have also been swept up in the campaign. Mobile phone applications help consumers identify which products come from the rebel region. The impact of the boycott campaign is hard to measure to date. “We have had some clients who have bought less,” especially in Madrid, Rosa Rebula, a manager at cava producer Rosell i Formosa, told AFP. But she said the company will only be able to confirm the trend in November — a peak period for sales of cava ahead of the Christmas holiday season.

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CIA/FBI got to Trump? They’ve had 50 years to redact docs, but need 6 months more? Best comment I read: A whole generation knows where they were when Kennedy was shot, except George HW Bush. Turns out he was in Dallas.

New JFK Files Reveal FBI Warning On Oswald And Soviets’ Missile Fears (G.)

The US government released 2,800 documents on Thursday, but President Donald Trump delayed the release of others, saying he had “no choice” but to consider “national security, law enforcement and foreign affairs concerns” raised mostly by the FBI and CIA. One of the first interesting documents to be unearthed, as journalists, scholars and the public pored over them, was a memo written by director J Edgar Hoover that said the FBI had warning of a potential death threat to Oswald, who was then in police custody. “There is nothing further on the Oswald case except that he is dead,” Hoover wrote on 24 November 1963. “Last night we received a call in our Dallas office from a man talking in a calm voice and saying he was a member of a committee organized to kill Oswald.

[..] The files comprise almost the final 1% of records held by the federal government and their publication follows a release in July when the record-keepers, the National Archives, posted 3,801 documents online, mostly formerly released documents with previously redacted portions. An administration official told reporters on Thursday that the files that remain secret have information that “remains sensitive depending on its context”. Trump ordered the agencies to review those redactions over the course of six months, the official said, to ensure more documents reach the public. The next deadline for documents is 26 April 2018. According to the National Archives, 88% of records related to Kennedy’s murder were already fully open and another 11% released but partially redacted. In total, that makes for about 5m pages.

The newly released documents also reveal that Soviet Union leaders considered Oswald a “neurotic maniac who was disloyal to his own country and everything else”, according to an FBI memo documenting reactions in the USSR to the assassination. The Soviet officials feared a conspiracy was behind the death of Kennedy, perhaps organised by a rightwing coup or JFK’s successor Lyndon Johnson. They also feared a war in the aftermath of Kennedy’s death, according to the memo: “Our source further stated that Soviet officials were fearful that without leadership, some irresponsible general in the United States might launch a missile at the Soviet Union.”

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How many more?

Australian Court Rules Deputy PM Ineligible For Parliament (R.)

Australia’s High Court ruled on Friday that Deputy Prime Minister Barnaby Joyce is ineligible to remain in parliament, a stunning decision that cost the government its one-seat parliamentary majority and forced a by-election. The Australian dollar fell a quarter of a U.S. cent after the unexpected decision. Australian Prime Minister Malcolm Turnbull said he accepted the court’s ruling, even though it was “clearly not the outcome we were hoping for”. Turnbull did not name a new deputy leader during a short news conference in Canberra soon after the court’s ruling. The Australian leader had been scheduled to travel to Israel on Saturday for a week-long visit but a spokesman for Turnbull told Reuters his departure has now been delayed. The spokesman said the new travel arrangements are still be finalised.

Turnbull’s center-right coalition is now in a precarious position. His Liberal Party is the senior party in a coalition with the smaller National Party, which Joyce led. He must now win the support of one of three independent lawmakers to keep his minority government afloat, with two sitting weeks of parliament left until it recesses for the year. At least two independent lawmakers have promised their support. Independent MP Bob Katter told Reuters he would support the government, but he may reconsider that if the coalition tried to block renewed efforts for a sweeping investigation into the scandal-ridden financial system. “I think we have the numbers for a commission into the banks and, if the government tries to block that, then I think we will get into murky waters,” Katter said. The opposition Labor Party immediately went on the attack and threatened to launch a legal challenge to every decision made by Joyce since last year’s election.

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Great intentions. But she has to talk to Trump, Xi et al.

‘I Want The Government … To Bring Kindness Back’ (RNZ)

Shortly before she was sworn in as the new Prime Minister, Jacinda Ardern spoke to Checkpoint with John Campbell as she was on her way to Government House in a Crown car. She said she wants the new government to “feel different”, to be empathetic and kind. There was a significant part of her that was focused on the work that needed to be done, she said. “Once you’re there, get on with it.” She said she wanted the government to feel different. “I want it to feel like we are a government that’s truly focused on everybody. Perhaps I’m more acutely aware of that sense having now led a set of negotiations in our government that brings together a range of parties.

“I know I need to transcend politics in the way that I govern for this next term of Parliament but I also want this government to feel different, I want people to feel that it’s open, that it’s listening and that it’s going to bring kindness back. “I know that will sound curious but to me if people see they have an empathetic government I think they’ll truly understand that when we’re making hard calls that we’re doing it with the right focus in mind.” She said there were tough times during the coalition negotiations. “It’s not about just preserving people’s political careers. It’s not about power. It’s about being in a position to make a difference to people who need it most. “This will be a government that works with others. “There is a lot to do.” Asked if there was a central tenet to her approach to the new role, she said it was empathy.

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Oct 222017
 
 October 22, 2017  Posted by at 2:02 pm Finance Tagged with: , , , , , , , , , ,  14 Responses »


Alfred Wertheimer Elvis 1956

 

New Zealand’s new prime minister Jacinda Ardern calls capitalism a blatant failure. Former Greek finance minister Yanis Varoufakis says capitalism is ‘merely’ coming to an end because it is making itself obsolete. Mathematics professor Bruce Boghosian claims that without redistribution of wealth, our market economy would not be stable, because wealth always tends to concentrate. The people at Artemis Capital Management write that the stock market has begun self-cannibalizing like a snake eating its tail, and the only reason we’re not in a recession already is ‘financial alchemy’.

At the very least we can say that the system is under pressure. But what system is that? It would be nice to have a clearcut definition of capitalism, but alas, there are many, about as many as there are different forms of it. That doesn’t make this any easier. Americans call many European economies ‘socialist’, which seems to mean they are not capitalist. But Scandinavian countries don’t function like the Soviet Union either.

And if you see how much money is involved in transfer payments to citizens in the US, the supposed bastion of free market capitalism, it’s tempting to conclude the system has already failed. But even with transfer payments, inequality is at record levels. That would seem to confirm Boghosian’s statement that “even if a society does redistribute wealth, if it’s too small an amount, “a partial oligarchy will result..” So what then?

 

 

Varoufakis and others want a “universal basic dividend”, or “universal basic income”. Would that be the end of capitalism as we know it? Or is it just a -perhaps more extreme- form of ‘state capitalism’? Varoufakis deems it inevitable because technology will eradicate so many jobs from societies that people won’t be able to make money from work. Personally, I’ve long thought that the pending large-scale demise of pensions systems will lead to some form of UBI.

37-year-young Jacinda Ardern is very clear in her assessment of New Zealand’s form of capitalism. If you’ve got the worst homelessness in the developed world, you have a broken system. If the system fails the people, it’s no good. Other people might argue that capitalism never promised to take care of everyone. Or rather, not through state interference. Labour’s Ardern has her view:

 

New Zealand’s New Prime Minister Brands Capitalism A ‘Blatant Failure’

[Jacinda] Ardern, has pledged her government will increase the minimum wage, write child poverty reduction targets into law, and build thousands of affordable homes. In her first full interview since becoming prime minister-elect, she told current affairs programme The Nation that capitalism had “failed our people”. “If you have hundreds of thousands of children living in homes without enough to survive, that’s a blatant failure,” she said. [..] “When you have a market economy, it all comes down to whether or not you acknowledge where the market has failed and where intervention is required. Has it failed our people in recent times? Yes. How can you claim you’ve been successful when you have growth roughly 3%, but you’ve got the worst homelessness in the developed world?”

So to which extent should a state interfere in markets, and in society at large? There are obviously wide ideological divides when it comes to answering that one. Does that mean there is no answer possible at all? Perhaps not. Perhaps the answer lies in the fact that the system is predestined to fail, as Boghosian’s mathematical models suggest: “Our work refutes the idea that free markets, by virtually leaving people up to their own devices, will be fair..”

That doesn’t necessarily demand a lot of interference, we could ‘simply’ write the rules of the game in such a way that the ‘natural tendency’ towards wealth concentration is blocked. An example is the history of the top US income tax rate. Arguably, the nation was doing a lot better under Eisenhower and Kennedy, with a top rate of 91%, than it is today. If you put a few rules like that in play, perhaps including Varoufakis’ idea of a ‘common welfare fund’, maybe the state doesn’t have to interfere much otherwise.

 

 

One of the main underlying claims of capitalism, and of macroeconomics in general, is that markets -and societies- will sort themselves out if left alone. Bruce Boghosian says this is not true, and that he has the math to prove it. The entire notion of markets tending towards a ‘supply-demand equilibrium’ is nonsense, he says (echoing Minsky, Steve Keen et al). Trickle-down economics is a figment of the imagination, while trickle up-economics flourishes.

This refutes much of what our economic systems are based on, which would appear to indicate that we need an urgent revision of these systems. Unless we would agree that Darwin-on-Steroids is a good idea. We don’t and won’t, because it would mean Stephen Foster’s “frail forms fainting at the door” all over the place. A market ideology that causes widespread misery has no future.

 

The Mathematics of Inequality

Seven years ago, the combined wealth of 388 billionaires equaled that of the poorest half of humanity , according to Oxfam International. This past January the equation was even more unbalanced: it took only eight billionaires, marking an unmistakable march toward increased concentration of wealth. Today that number has been reduced to five billionaires.

Trying to understand such growing inequality is usually the purview of economists, but Bruce Boghosian, a professor of mathematics, thinks he has found another explanation—and a warning. Using a mathematical model devised to mimic a simplified version of the free market, he and colleagues are finding that, without redistribution, wealth becomes increasingly more concentrated, and inequality grows until almost all assets are held by an extremely small percent of people.

“Our work refutes the idea that free markets, by virtually leaving people up to their own devices, will be fair,” he said. “Our model, which is able to explain the form of the actual wealth distribution with remarkable accuracy, also shows that free markets cannot be stable without redistribution mechanisms. The reality is precisely the opposite of what so-called ‘market fundamentalists’ would have us believe.”

While economists use math for their models, they seek to show that an economy governed by supply and demand will result in a steady state or equilibrium, while Boghosian’s efforts “don’t try to engineer a supply-demand equilibrium, and we don’t find one,” he said. [..] The model tracks the data with remarkable accuracy, he said. He and his team will soon publish a paper on how it relates to U.S. wealth data from 1989 to 2013.

“We have also begun to apply it to wealth data from the ECB, and so far it seems to work very well for certain European countries as well,” he said [..] It turns out that when agents do well in early transactions, the odds are so increasingly stacked in their favor that—without redistribution from taxes or other wealth-transfer mechanisms—they will get more money, and keep accruing wealth inevitably.

“Without redistribution of wealth, our market economy would not be stable,” said Boghosian. “One person would run away with all the wealth, and it would keep going until it came to complete oligarchy.” And even if a society does redistribute wealth, if it’s too small an amount, “a partial oligarchy will result,” Boghosian said.

If markets and societies cannot survive under current rules, theories and ideologies, what do we do? The Artemis guys strongly suggest we stop the practice of excessive stock buybacks- even if they’re the only thing propping up the whole market system. Because they’re leading us straight into a recession. Because they’re making that recession a lot worse.

 

Volatility and the Alchemy of Risk

The Ouroboros, a Greek word meaning ‘tail devourer’, is the ancient symbol of a snake consuming its own body in perfect symmetry. The imagery of the Ouroboros evokes the infinite nature of creation from destruction. The sign appears across cultures and is an important icon in the esoteric tradition of Alchemy. Egyptian mystics first derived the symbol from a real phenomenon in nature. In extreme heat a snake, unable to self-regulate its body temperature,will experience an out-of-control spike in its metabolism. In a state of mania, the snake is unable to differentiate its own tail from its prey,and will attack itself, self-cannibalizing until it perishes. In nature and markets, when randomness self-organizes into too perfect symmetry, order becomes the source of chaos.

The Ouroboros is a metaphor for the financial alchemy driving the modern Bear Market in Fear. Volatility across asset classes is at multi-generational lows. A dangerous feedback loop now exists between ultra-low interest rates, debt expansion, asset volatility, and financial engineering that allocates risk based on that volatility. In this self-reflexive loop volatility can reinforce itself both lower and higher. In a market where stocks and bonds are both overvalued, financial alchemy is the only way to feed our global hunger for yield, until it kills the very system it is nourishing.

 

 

[..] At the head of the Great Snake of Risk is unprecedented monetary policy. Since 2009 Global Central Banks have pumped in $15 trillion in stimulus creating an imbalance in the investment demand for and supply of quality assets. Long term government bond yields are now the lowest levels in the history of human civilization dating back to 1285. As of this summer there was $9.5 trillion worth of negative yielding debt globally. Last month Austria issued a 100-year bond with a coupon of only 2.1%(6) that will lose close to half its value if interest rates rise 1% or more. The global demand for yield is now unmatched in human history. None of this makes sense outside a framework of financial repression.

Amid this mania for investment, the stock market has begun self-cannibalizing… literally. Since 2009, US companies have spent a record $3.8 trillion on share buy-backs financed by historic levels of debt issuance. Share buybacks are a form of financial alchemy that uses balance sheet leverage to reduce liquidity generating the illusion of growth. A shocking +40% of the earning-per-share growth and +30% of the stock market gains since 2009 are from share buy-backs. Absent this financial engineering we would already be in an earnings recession.

Any strategy that systematically buys declines in markets is mathematically shorting volatility. To this effect, the trillions of dollars spent on share buybacks are equivalent to a giant short volatility position that enhances mean reversion. Every decline in markets is aggressively bought by the market itself, further lowing volatility. Stock price valuations are now at levels which in the past have preceded depressions including 1928, 1999, and 2007. The role of active investors is to find value, but when all asset classes are overvalued, the only way to survive is by using financial engineering to short volatility in some form.

Yanis Varoufakis doesn’t so much argue that capitalism has already failed, he says it is bound to fail in the near future. Because new technology, including artificial intelligence, will destroy too many jobs for society to continue to function intact. That is already happening, in that we both produce and consume Google’s ‘products’, but we get none of the profits. An example:

 

Google’s Plan To Revolutionise Cities Is A Takeover In All But Name

Alphabet’s weapons are impressive. Cheap, modular buildings to be assembled quickly; sensors monitoring air quality and building conditions; adaptive traffic lights prioritising pedestrians and cyclists; parking systems directing cars to available slots. Not to mention delivery robots, advanced energy grids, automated waste sorting, and, of course, ubiquitous self-driving cars. Alphabet essentially wants to be the default platform for other municipal services. Cities, it says, have always been platforms; now they are simply going digital.

“The world’s great cities are all hubs of growth and innovation because they leveraged platforms put in place by visionary leaders,” states the proposal. “Rome had aqueducts, London the Underground, Manhattan the street grid.” Toronto, led by its own visionary leaders, will have Alphabet. Amid all this platformaphoria, one could easily forget that the street grid is not typically the property of a private entity, capable of excluding some and indulging others. Would we want Trump Inc to own it? Probably not. So why hurry to give its digital equivalent to Alphabet?

Google aims at taking over our entire communities, and claims this will be to our benefit. We let the new technology companies expand far and wide, to a large extent because our ‘leaders’ don’t understand what is happening any better than we do. But that is not a good thing, for many different reasons. It’ll be very hard to whistle them back later, both because of the wealth they’re building, and because of the intensifying links they have to government, including -or especially- the intelligence community.

 

Capitalism Is Ending Because It Has Made Itself Obsolete

Former Greek finance minister Yanis Varoufakis has claimed capitalism is coming to an end because it is making itself obsolete. The former economics professor told an audience at University College London that the rise of giant technology corporations and artificial intelligence will cause the current economic system to undermine itself.

Mr Varoufakis [..] said companies such as Google and Facebook, for the first time ever, are having their capital bought and produced by consumers. “Firstly the technologies were funded by some government grant; secondly every time you search for something on Google, you contribute to Google’s capital,” he said. “And who gets the returns from capital? Google, not you. “So now there is no doubt capital is being socially produced, and the returns are being privatised. This with artificial intelligence is going to be the end of capitalism.”

Warning Karl Marx “will have his revenge ”, the 56-year-old said for the first time since capitalism started, new technology “is going to destroy a lot more jobs than it creates”. He added: “Capitalism is going to undermine capitalism , because they are producing all these technologies that will make corporations and the private means of production obsolete. “And then what happens? I have no idea.”

Describing the present economic situation as “unsustainable” and fearing the rise of “toxic nationalism”, Mr Varoufakis said governments needed to prepare for post-capitalism by introducing redistributive wealth policies. He suggested one effective policy would be for 10% of all future issue of shares to be put into a “common welfare fund” owned by the people. Out of this a “universal basic dividend” could be paid to every citizen.

Has capitalism failed already, as Jacinda Ardern claims, or will that happen only in the future, as Varoufakis says? It may be a moot question once the system and the markets start collapsing. That they will, and must, is not a question but a certainty, even a mathematical one. Whatever your ideology, that is not a good thing. And the current ideology has caused this, that much is clear.

If the remaining wealth is not divided better than it is today, those who have gathered most of it will also find themselves in non-functioning societies and communities. Unless perhaps you’re George W. and have property in Paraguay.

But even then. We’re eating our tails.