Jul 012017
 
 July 1, 2017  Posted by at 9:50 am Finance Tagged with: , , , , , , , , , , ,  


Fred Lyon Terrific Street, Barbary Coast, San Francisco 1947

 

Bill To Remove Trump From Office Picks Up Democratic Support (DM)
Bank of America: The Fed Is Preparing To Make The Rich Poorer (ZH)
Debt Is the Third Benjamin Franklin Certainty (Stockman)
UK Household Incomes Fall Most In 40 Years, Savings Rates Crash (Ind.)
China’s Opening Of Bond Market May Spark ‘Massive Demand’ From Foreigners (CNBC)
Judge Orders Illinois To Pay Billions More Toward Medicaid (CT)
Maine Governor Won’t Sign Latest Budget Proposal, Will Allow A Shutdown (BDN)
Connecticut Social Service Agencies Brace for Deep Cuts With No Budget (AP)
America’s Pension Bomb: Illinois Is Just the Start (BBG)
An Awful Lot Of Americans Are A Walking Illinois Now (Jim Kunstler)
US Says Its Warning Appears To Have Averted Syrian Chemical Attack (R.)
Make No Mistake, We Are Already at War in Syria (Giraldi)
Qatar Crisis: Armed Conflict And Protracted Dispute Grow More Likely (CNBC)
Oliver Stone: Edward Snowden Is The “Most American Of Patriots” (ZH)
Billionaires And Aristocrats Biggest Beneficiaries Of EU Farm Subsidies (TLE)
Juncker: EU To Discuss More Migrant Help For Greece And Italy (R.)

 

 

I thought they were kidding, Daily Mail after all. But there are more reports on this. In a nutshell: the people who support this are much less capable of doing THEIR jobs than Trump is of doing his. They’re 100% delusional. And they lack a very essential respect for the American system and the Office of the President.

But it’ll all just keep coming. This is on the same day that both the NYT and AP feel forced finally to state that their Russiagate/hacking reporting has been based on nothing at all.

Bill To Remove Trump From Office Picks Up Democratic Support (DM)

A Democratic congressman has proposed convening a special committee of psychiatrists and other doctors whose job would be to determine if President Donald Trump is fit to serve in the Oval Office. Maryland Rep. Jamie Raskin, who also teaches constitutional law at American University, has predictably failed to attract any Republicans to his banner. But the U.S. Constitution’s 25th Amendment does allow for a majority of the president’s cabinet, or ‘such other body as Congress may by law provide,’ to decide if an Oval Office occupant is unable to carry out his duties – and then to put it to a full congressional vote. Vice President Mike Pence would also have to agree, which could slow down the process – or speed it up if he wanted the levers of power for himself.

The 25th Amendment has been around since shortly after the John F. Kennedy assassination, but Congress has never formed its own committee in case it’s needed to judge a president’s mental health. Raskin’s bill would allow the four Republican and Democratic leaders of the House and Senate to each choose a psychiatrist and another doctor. Then each party would add a former statesman – like a retired president or vice president. The final group of 10 would meet and choose an 11th member, who would become the committee’s chairman. Once the group is officially seated, the House and Senate could direct it through a joint resolution to conduct an actual examination of the president ‘to determine whether the president is incapacitated, either mentally or physically,’ according to the Raskin bill.

And if the president refuses to participate, the bill dictates, that ‘shall be taken into consideration by the commission in reaching a conclusion.’ Under the 25th Amendment, such a committee – or the president’s cabinet – can notify Congress in writing that a sitting president is unfit. In either case the vice president must concur, and he would immediately become ‘acting president.’ Presidents have voluntarily transferred their powers to vice presidents in the past, including when they are put under anesthesia for medical procedures. In the case of Raskin’s plan, the Constitution holds that both houses of Congress would hold a vote within three weeks. If two-thirds majorities in the House and Senate agreed that the president couldn’t discharge his duties, he would be dismissed.

Raskin’s plan could have a fatal flaw, however: Legal scholars tend to agree that when the Constitution’s framers first provided for the replacement of a president with an ‘inability to discharge the Powers and Duties of the Office,’ they weren’t talking about mere eccentricities. And when the 25th Amendment was sent to the states for ratification in 1965, the Senate agreed that ‘inability’ meant that a president was ‘unable to make or communicate his decisions’ and suffered from a ‘mental debility’ rendering him ‘unable or unwilling to make any rational decision.’ So far two dozen members of the House, all Democrats, have signed on to cosponsor the bill. Texas Rep. Sheila Jackson Lee, a far-left liberal Democrat, claimed Friday in a Fox Business Channel interview that Congress can remove ‘incompetent’ presidents. ‘The 25th Amendment is utilized when a president is perceived to be incompetent or unable to do his or her job,’ she said.

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Interesting idea, but how valid?:“Fed/ECB are now tightening to make Wall St poorer” because it is “no longer politically acceptable to stoke Wall St bubble.”

Bank of America: The Fed Is Preparing To Make The Rich Poorer (ZH)

Remember when – for years and years after the grand, global QE experiment started – any suggestion that central bankers are the primary cause behind global wealth inequality, and thus directly responsible for such political outcomes as Brexit and Trump – was branded as a conspiracy theory by bloggers living in their parents’ basement? We do, because we were accused over and over of just that (our position on the Fed and other central banks should be familiar to all by now). Well, as of this morning, none other than the chief investment strategist at BofA, Michael Hartnett, is a basement dwelling, tinfoil hatter because in his latest Flow Show report, writes that “central banks have exacerbated inequality via Wall St inflation & Main St deflation.”

Of course we knew that, you knew that, and pretty much everyone else knew that, but those whose jobs depended on not admitting it, kept their mouths shut terrified of pointing out that the central banking emperor is not only naked, but an idiot. Well, the seal has been broken, and even the biggest cowards from within the financial establishment, most of whom can be found on financial twitter for some inexplicable reason, can speak up now. However, it’s what Hartnett said next that was more notable, namely that the “massive outperformance of deflation assets versus inflation assets shows central bank failure in War on Deflation…they have failed to boost wage expectations, inflation expectation, “animal spirits” on Main St.”

And, according to the Bank of American, now that central banks are in full reverse mode, there are “two ways to cure inequality…you can make the poor richer…or you can make the rich poorer…” So for anyone still confused, about what is taking place right now, the “Fed/ECB are now tightening to make Wall St poorer” because it is “no longer politically acceptable to stoke Wall St bubble.” Sooner or later the market will get it, and when it does, those who sell first will be happy. Everyone else will be stuck with a market that is locked limited down, with no position sales possible indefinitely, maybe in perpetuity.

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“..the nation effectively performed a leveraged buyout (LBO) on itself during the last forty years. And that did temporarily add to the appearance of prosperity.”

Debt Is the Third Benjamin Franklin Certainty (Stockman)

Once upon a time people used to have mortgage burning ceremonies when later in their working years the balance on the one-time loan they took out in their 30s to buy their castle was finally reduced to zero. And there was no such thing as student loans, and not only because students are inherently not credit worthy. College was paid for with family savings, summer jobs, work study and an austere life of four to a dorm room. No more. The essence of debt in the present era is that it is perpetually increased and rolled-over. It’s never reduced and paid-off. To be sure, much of mainstream opinion considers that reality unremarkable — even evidence of economic progress and enlightenment. Keynesians, Washington politicians and Wall Street gamblers would have it no other way because their entire modus operandi is based not just on ever more debt, but more importantly, on ever higher leverage.

The chart below not only proves the latter point, but documents that over the last four decades rising leverage has been insinuated into every nook and cranny of the U.S. economy. Nominal GDP (dark blue) grew by 6X from $3 trillion to $18 trillion, whereas total credit outstanding (light blue) soared by 13X from $5 trillion to $64 trillion. Consequently, the national leverage ratio rose from 1.5X in 1980 to 3.5X today. My point today is not to moralize, but to discuss the practical implications of the nation’s debt-topia for Ben Franklin’s other two certainties — death and (especially) taxes. There’s no doubt that the modus operandi of the American economy has been transformed by the trends displayed in the below chart. It so happened that the 1.5X ratio of total debt-to-income (GDP) at the beginning of the chart was not an aberration.

It had actually been a constant for 100 years — except for a couple of unusual years during the Great Depression. It was also linked with the greatest period of capitalist prosperity, economic growth and rising living standards in recorded history. By contrast, today’s 3.5X debt-to-income ratio has two clear implications. First, the nation effectively performed a leveraged buyout (LBO) on itself during the last forty years. And that did temporarily add to the appearance of prosperity. But it also means that the U.S. economy is now lugging two turns of extra debt compared to the historic norm. Mainstream opinion, of course, says “so what?” The U.S. economy is lugging $35 trillion of extra debt, that’s what. That’s right. In the absence of the 40-year leverage aberration since the late 1970s, the chart below would show about $29 trillion of credit market debt (public and private) outstanding, not $64 trillion.

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Just don’t blame this on Brexit. It’s a much longer trajectory. Britain has been living above its weight for a long time, and austerity has made that much worse.

UK Household Incomes Fall Most In 40 Years, Savings Rates Crash (Ind.)

The aggregate real disposable income of UK households has fallen for three quarters in a row for the first time since the 1970s, according to the Office for National Statistics. The ONS said that the inflation-adjusted compensation of the household sector fell 1.4% in the first three months of 2017, reflecting spiking inflation and weak pay growth. It was the biggest decline since the first quarter of 2013 and followed a 0.4% fall in Q4 2016 and a 0.3% slip in Q3 2016. Three consecutive quarters of contraction is the worst run for the series since 1976-77. The ONS also said that the aggregate household savings rate collapsed to just 1.7%, down from 3.3% in the final quarter of 2016, and the lowest on record, although it said one-off tax payment factors might have distorted the latest reading.

Nevertheless, weak pay growth means that households have had to resort to running down their savings and borrowing to support consumption, which has almost single-handedly powered the overall economy since last June’s Brexit vote. “This is not sustainable and fuels the belief that weakened consumer spending is likely to hold back the economy over the coming months,” said Howard Archer of the EY Item Club. “With consumer confidence declining and banks reporting that they intend to restrict the supply of secured credit, the saving rate is more likely to rise than fall ahead,” said Samuel Tombs of Pantheon.

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Those foreigners would have to sell somthing first, we presume. There goes the S&P?!

China’s Opening Of Bond Market May Spark ‘Massive Demand’ From Foreigners (CNBC)

China’s move to open up its fixed income market to foreign investors will eventually unleash “massive” demand for the mainland’s bonds, the chief executive of the company that operates Hong Kong’s stock exchange, told CNBC on Friday. In May, regulators in Hong Kong and on the mainland approved a “bond connect” program to allow investors operating in Hong Kong to trade Chinese bonds, called a “northbound” flow, with a “southbound” flow of Chinese investment into Hong Kong to be considered later. Authorities also won’t cap the amount that foreigners can invest in China. “I think this is a huge breakthrough,” HKEx CEO Charles Li told CNBC’s “Squawk Box” on the anniversary of Hong Kong’s handover to China.

Li said that while large investors are already able to access the mainland fixed income market though existing programs, the bond connect would be fundamentally different. “People are now finally able to do it and able to do it in a way that is familiar, that is similar to the way we trade U.S. dollar Treasurys or other international treasury fixed income instruments,” he said. “That is something so new. That the demand, underlying demand, the potent demand are massive.” He noted that with China’s yuan being included in the IMF’s Special Drawing Rights (SDR) basket in November 2015, some investors must include at least some renminbi assets on their balance sheets. Inclusion in the SDR means the renminbi is now officially recognized as a reserve currency. “That will require massive reallocation of capital but over quite a long period of time,” Li said, saying foreign investment into Chinese bonds was “at the beginning of the beginning.”

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Not all of this will come out as bad as it may look tomorrow morning, but down the line it’s all a toxic swamp. In the short term, deep cuts to social programs.

Judge Orders Illinois To Pay Billions More Toward Medicaid (CT)

A federal judge on Friday ordered Illinois to start paying $293 million in state money toward Medicaid bills every month and an additional $1 billion over the course of the next year, worsening a cash-flow problem caused by two years of budget-free spending by state government. U.S. District Judge Joan Lefkow’s ruling came after lawyers representing Medicaid patients and attorneys for the state were unable to agree on a plan to deal with bills and pay down a $3 billion backlog owed to health care providers. The ruling requires the state to start promptly paying all new Medicaid bills, which is estimated at about $586 million per month, and to pay down $2 billion of its bill backlog in payments spread out over the course of the coming fiscal year. The federal government pays half of those costs, so the bottom line for the state will be $293 million per month and $1 billion in backlogged bill payments over the next year.

Comptroller Susana Mendoza’s office earlier in the week had offered to pay an additional $150 million per month, but the plaintiffs rejected it, saying it wasn’t enough. The $150 million would have only cost the state $75 million because of the federal match, and Mendoza’s office said that was all the state could spare while meeting other demands. Now, Mendoza said Friday’s ruling would cause her to likely have to cut payments to the state’s pension funds, state payroll or payments to local governments. Payments to bond holders won’t be interrupted, she said. “As if the governor and legislators needed any more reason to compromise and settle on a comprehensive budget plan immediately, Friday’s ruling by the U.S. District Court takes the state’s finances from horrific to catastrophic,” Mendoza said in a statement. “A comprehensive budget plan must be passed immediately.”

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Maine beat Illinois to it! Partial shutdown started today.

Maine Governor Won’t Sign Latest Budget Proposal, Will Allow A Shutdown (BDN)

Gov. Paul LePage said Friday that he won’t sign a state budget package endorsed Thursday night by a special panel, ensuring a partial shutdown of state government at midnight. The Republican governor’s opposition to the budget deal would force Maine’s first state government shutdown since 1991, which could stretch 10 days if LePage holds a budget bill for the full time the Constitution allows before he must act. A budget would go to him tonight if the Legislature can muster two-thirds votes in both chambers, but even that was a big “if” on Friday. LePage hosted House Republicans for a Friday morning meeting where he reportedly implored them to oppose the budget deal negotiated by Senate President Mike Thibodeau, R-Winterport, and House Speaker Sara Gideon, D-Freeport.

LePage told reporters his major objections were the overall cost of the budget package – around $7.1 billion – and that it proposes raising the state’s lodging tax from 9% to 10.5% without income tax cuts. However, the budget package currently under consideration contains an income tax cut of 3% because it eliminates the surtax on income above $200,000 per year for education which was approved by voters last year. LePage said “on June 30” – the deadline for Maine’s next fiscal year – “they’re trying to put a gun to the governor’s head,” but it won’t work. “This budget they have has no prayer, and if they’re hell-bent on bringing this budget down, we will shut down at midnight tonight and we will talk to them in 10 days,” LePage said.

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Whack-a-state.

Connecticut Social Service Agencies Brace for Deep Cuts With No Budget (AP)

Nonprofit social service agencies prepared Friday to cut programs, close facilities and lay off staff after Gov. Dannel P. Malloy signed an order that slashes funding to maintain essential state services after lawmakers couldn’t come to terms on a budget before the end of the fiscal year. Barry Simon, president and CEO of Oak Hill, said his Hartford-based agency which serves people with developmental disabilities has decided to close four group homes and consolidate two others. Oak Hill was already losing money on those programs and anticipated the problem would be acerbated by the additional state reimbursement cuts in Malloy’s executive order. “Because of this situation, we’re pulling the trigger because it’s only going to get worse,” he said. Simon said 26 individuals live at the six affected group homes, some as long as 20 years. Most are being moved into other facilities.

Meanwhile, Oak Hill is scaling back day programs and employment services for people currently receiving services. And Simon said his agency cut off new admissions two months ago, in anticipation of the state budget impasse. Malloy called it “regrettable” he had to sign the executive order. When it became clear an agreement wasn’t possible on a new, two-year state budget before the fiscal year ended, the Democrat urged the General Assembly to pass a three-month “mini budget” he created. Malloy said it would be less draconian than the executive order and give lawmakers more time to reach a budget deal. While Democratic and Republican state Senate leaders supported Malloy’s mini budget, House leaders did not. Democratic House officials instead offered an eleventh-hour, two-year budget they said can be ready for a vote July 18. Malloy, however, was unenthusiastic about the proposal.

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A healthy pension fund today should really be over 100% funded- because of future demographic expectations. Only South Dakota’s complies.

America’s Pension Bomb: Illinois Is Just the Start (BBG)

We’ve been hearing it for years: America’s public pensions are a ticking time bomb. Well, at long last, the state of Illinois is about to expose just how big this blowup could be. As of the 2015 fiscal year, Illinois had promised its employees $199 billion in retirement benefits. Right now, it’s $119.1 billion short. That gap lies at the center of a years-in-the-making fiscal mess that’s threatening to drop the state’s credit rating to junk-bond status. But Illinois is hardly alone. Connecticut and New Jersey—states that, to most of the world, seem like oases of prosperity—are under growing financial strain, too. We’ve ranked the states by the size of their funding gap. The lower the funding ratio, the more money the state has to come up with to meet its pension obligations.

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“The American people, by and large, have no more idea how false and fragile the financial arrangements of the nation are than the average eight-year-old has about why the re-po squad is towing away Daddy’s Ford-F150.”

An Awful Lot Of Americans Are A Walking Illinois Now (Jim Kunstler)

The preview of coming attractions is currently playing out in Illinois — soon to be joined by Connecticut, California, Kentucky, and many other bankrupt states. Illinois is dead broke. It can’t pay the contractors who fix things like roads and storm drains, and supply food to its prisons. It’s over $200-billion deep in pension obligations that will never be honored. Its Medicaid system is a shambles. It doesn’t even have the cash-on-hand to pay lottery winners (what happened to all the cash paid into the lottery by the suckers who didn’t win, which is supposed to pay off the winners?). The state legislature hasn’t passed a budget in three years. The governor and the mayor of Chicago and everybody else nominally in charge have no idea what they’re going to do about it. Think the federal government is going to just step in and save the day there?

They’d have to bail out every other foundering state and that’s just not going to happen, especially with that same federal government about to run out of cash money itself, with no resolution of the debt ceiling controversy that might allow it to even pretend to borrow more money by issuing treasury bonds that are instantly bought by the Federal Reserve — which, of course, is not an official government agency but a private banking consortium contracted to manage the nation’s money. Do you begin to see the outlines of the clusterfuck rising like a bad moon over the harvest season of 2017? The American people, by and large, have no more idea how false and fragile the financial arrangements of the nation are than the average eight-year-old has about why the re-po squad is towing away Daddy’s Ford-F150.

We’re just doing what we always do: gittin’ our summer on. Breaking out the potato salad and the Bud Lites – at least those who have enough mojo left in their MasterCards to charge the party supplies. An awful lot of Americans must be maxed out, though, people who actually used to work at things and get paid for it. Each one of them is a walking Illinois now, facing each dawning day with a bigger load of problems, more things they can’t pay for, and moving closer to the dreadful day when everything is gone, every chattel, every knickknack, the very roof over their head, and most particularly the belief that they live in a fair and decent society.

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Absurd theater 2017. Because: “The intelligence that prompted the administration’s warning to Syria this week was “far from conclusive,” said a U.S. official familiar with it. “It did not come close to saying that a chemical weapons attack was coming,” the official said.”

But Nikki Haley says: “I would like to think that the president saved many innocent men, women and children.”

US Says Its Warning Appears To Have Averted Syrian Chemical Attack (R.)

U.S. Defense Secretary Jim Mattis said on Wednesday that the Syrian government of President Bashar al-Assad appeared so far to have heeded a warning this week from Washington not to carry out a chemical weapons attack. Russia, the Syrian government’s main backer in the country’s civil war, warned that it would respond proportionately if the United States took pre-emptive measures against Syrian forces to stop what the White House says could be a planned chemical attack. The White House said on Monday it appeared the Syrian military was preparing to conduct a chemical weapons attack and said that Assad and his forces would “pay a heavy price” if it did so. The warning was based on intelligence that indicated preparations for such a strike were under way at Syria’s Shayrat airfield, U.S. officials said.

“It appears that they took the warning seriously,” Mattis said. “They didn’t do it,” he told reporters flying with him to Brussels for a meeting of NATO defense ministers. He offered no evidence other than the fact that an attack had not taken place. Asked whether he believed Assad’s forces had called off any such strike completely, Mattis said: “I think you better ask Assad about that.” Washington accused Syrian forces of using the Shayrat airfield for a chemical weapons attack in April. Syria denies this. The intelligence that prompted the administration’s warning to Syria this week was “far from conclusive,” said a U.S. official familiar with it. “It did not come close to saying that a chemical weapons attack was coming,” the official said.

[..] Russian Foreign Minister Sergei Lavrov said on Wednesday that Moscow will respond if the United States takes measures against Syrian government forces. “We will react with dignity, in proportion to the real situation that may take place,” he said at a news conference in the city of Krasnodar. Lavrov said he hoped the United States was not preparing to use its intelligence assessments about the Syrian government’s intentions as a pretext to mount a “provocation” in Syria. [..] In Washington, the U.S. ambassador to the United Nations, Nikki Haley, credited Trump with saving Syrian lives. “Due to the president’s actions, we did not see an incident,” Haley told U.S. lawmakers. “I would like to think that the president saved many innocent men, women and children.”

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Suggestion: look at this through Russian eyes. They don’t think Trump is crazy, they think all of America is.

Make No Mistake, We Are Already at War in Syria (Giraldi)

Donald Trump has been in office for five months and it would appear that at least some of the outlines of his foreign policy are beginning to take shape, though that may be exaggeration as no one seems to be in charge. The “America First” slogan seemingly does not apply to what is developing, as actual U.S. interests do not appear to be driving what takes place, and there does not seem to be any overriding principle that shapes the responses to the many challenges confronting Washington worldwide. The two most important observations that one might make are both quite negative. First, lamentably, the promised détente with Russia has actually gone into reverse, with the relationship between the two countries at the lowest point since the time of the late, lamented Hillary Rodham Clinton as Secretary of State.

Second, we are already at war with Syria even though the media and Congress seem blissfully unaware of that fact. We are also making aggressive moves intended to create a casus belli for going to war with Iran, and are doubling down in Afghanistan with more troops on the way, so Donald Trump’s pledge to avoid pointless wars and nation-building were apparently little more than glib talking points intended to make Barack Obama look bad. The situation with Russia can be repaired as Vladimir Putin is a realist head of state of a country that is vulnerable and willing to work with Washington, but it will require an end to the constant vituperation being directed against Moscow by the media and the Democratic Party. That process could easily spin out for another year with all parties now agreeing that Russia intervened in our election even though no one has yet presented any evidence that Russia did anything at all.

Syria is more complicated. Senators Tim Kaine and Rand Paul have raised the alarm over American involvement in that country, declaring the U.S. military intervention to be illegal. Indeed it is, as it is a violation of the United Nations Charter and the American Constitution. No one has argued that Syria in any way threatens the United States, and the current policy is also an affront to common sense: like it or not Syria is a sovereign country in which we Americans have set up military bases and are supporting “rebels” (including jihadis and terrorists) who are seeking to overthrow the legitimate government. We have also established a so-called “de-confliction” zone in the southeast of the country to protect our proxies without the consent of the government in Damascus. All of that adds up to what is unambiguously unprovoked aggression, an act of war.

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Expect Russia to react to this too, and soon.

Qatar Crisis: Armed Conflict And Protracted Dispute Grow More Likely (CNBC)

A diplomatic crisis on the Arabian Peninsula is turning into a protracted standoff, and some analysts now say the risk of armed conflict is emerging. The dispute between Qatar, a major natural gas exporter, and its neighbors is now entering its fifth week. Saudi Arabia, the United Arab Emirates, Egypt and Bahrain cut diplomatic ties with Qatar and implemented a partial blockade on June 5 in a bid to bring the tiny Persian Gulf monarchy in line with Saudi-dominated foreign policy. Some analysts initially thought the parties would seek a resolution by the end of the Muslim holy month of Ramadan, but last week, the anti-Qatar alliance issued a series of harsh demands. “It’s escalated to a stage where it’s very difficult for both sides to back down,” Firas Modad, analyst at IHS Markit, told CNBC this week.

The demands include non-starters such as shutting down Al Jazeera news and closing a Turkish military base. The coalition also calls on Qatar to end its alleged ties to terrorist groups and political opposition figures in Gulf nations and Egypt. It demanded Qatar pay reparations and submit to compliance reviews going forward. Qatar has rejected the demands. That is likely to trigger a series of additional economic and political sanctions against the government in Doha, causing the impasse to stretch out for months, risk consultancy Eurasia Group concluded in a briefing this week. “The crisis will continue to escalate before the Qatari leadership ultimately adjusts its policy positions, or in a slightly less likely scenario, opts to cement an alliance with Turkey and closer ties with Iran,” Eurasia Group said.

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Or the Most Patriotic of Americans?

Oliver Stone: Edward Snowden Is The “Most American Of Patriots” (ZH)

Director Oliver Stone, who’s recently released series “The Putin Interviews” stirred up controversy among liberals who accused him of being a Russian propagandist, appeared on the Liberty Report with former Texas Congressman Ron Paul to discuss the documentary, his views about former NSA contractor Edward Snowden, and why the US’s aggressive approach to containing the purported threat posed by Russia has led to a breakdown in relations between the two powers. Stone said he’s been “interested” in Russia since being raised as a conservative in New York City, claiming that his father instilled a “fear” of Communism and Russians in him at a young age. In the early 1980s, Stone visited the country for the first time as a screenwriter with the idea of interviewing several dissidents. He has returned several times since.

In particular, Stone has become interested in the case of Snowden, whom he praised as “the most American of patriots.” “I was interested in Russia – I went back into the 2000s. The Snowden story occupied me. And of course, it’s so ironic that he the most American of patriots is living in Moscow because he has to. It’s the only country in the world that would give him asylum – in other words it’s the only country in the word that can deny the US what it wants which is Snowden.” “[Putin] explained to me that Russians wanted an extradition treaty with the US for years, but nothing doing, because there are a lot of Russian criminals in America who stole money from Russia. He did nothing wrong in Russian terms so they gave him asylum – now its 3 years 5 years whatever its going to be. I wish Ed well I really do.”

Stone also shared a story about watching the movie “Dr. Strangelove” with Putin, who he said was greatly moved. “I showed him the movie Dr. Strangelove…and he watched it very serious about it. He said this movie was very accurate of that time and it’s still accurate today.” Circling back to the issue of nuclear deterrents, Stone said he’s worried that rising tensions around the world could trigger a “nuclear confrontation.” “I’m saying I have reached that age when I am not really concerned about what happens to me but… it’s not just about the US, but about the whole planet and I feel a nuclear confrontation, an accident, could happen tomorrow. But you put ABMs in Poland and Romania – that’s a gigantic mistake.”

“An ABM can be converted overnight from a defensive missile to an offensive missile. They’re surrounded from the North the East and the West by US missiles and we don’t seem to realize it.” Stone says he’s “scared for America,” explaining that many US citizens prefer to blindly accept media spin that’s favorable to the US establishment, without questioning it, or trying to understand Russia’s point of view. “It’s a good thing I went through JFK when I was younger…there’s been a lot of controversy around my movies. I’m scared not for myself because I’m at that age, they can’t destroy me anymore, but I’m scared for America, I’m afraid they’ve lost their sense. I’m afraid there’s a lack of foresight and leadership.”

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EU farm budget is about €1 trillion. While Greece’s health care system and social programs are being murdered underpressure from the same EU.

Billionaires And Aristocrats Biggest Beneficiaries Of EU Farm Subsidies (TLE)

20% of the 100 largest payments under the European Union’s “direct” subsidy system now go to people or families on the Sunday Times Rich List. According to a new investigation by Energydesk billionaires and aristocrats last year scooped up an even greater proportion of the UK’s biggest farm subsidy payouts, with “basic payments” to the Top 100’s Rich List recipients totalling £11.2 million in 2016 – up from £10.6 million the previous year. Direct EU subsidies – now known as “basic payments” – have attracted criticism for largely rewarding landowners simply for owning land, rather than paying farmers to invest in environmental or other “public goods”. The National Trust – which itself received £1.6m in basic payments last year – said the system needed fundamental reform, even if it meant the trust getting less income for its land.

Richard Hebditch, the trust’s external affairs director, said: “Rather than being paid for how much land you happen to farm, a new model which delivers clear public benefit from the money being spent is within reach after Brexit. “Farmers should receive a fair market price for safe and sustainable supplies of food, with public funding paying for the crucial role of protecting vulnerable natural resources, caring for our heritage and landscape and helping address issues like flooding and climate change.” Ironically, the farm business owned by prominent Brexit-backing billionaire inventor Sir James Dyson is now the biggest for-profit recipient of direct EU farm subsidies in the UK. Beeswax Dyson Farming netted £1.6 million under the basic payment scheme last year – up from £1.4 million in 2015. According to the Rich List, Sir James and family are worth £7.8 billion, and he is a bigger landowner than the Queen, with holdings of around 25,000 acres.

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Nobody takes Juncker serious anymore.

Juncker: EU To Discuss More Migrant Help For Greece And Italy (R.)

The EU executive will discuss further measures with Italy and Greece in the coming week to help the Mediterranean states deal with irregular migrants, European Commission President Jean-Claude Juncker said on Friday. Asked at a news conference what, in particular, the Commission might do to help Italy, where arrivals from Libya are up a third on a year ago, Juncker said: “I will see with the Italian prime minister, with the Greek prime minister, during the coming week what further efforts the Commission can line up to relieve Italy and Greece in their difficult struggles.” He recalled that he had described both countries as “heroic” and said he had discussed the issue on Thursday at a meeting in Berlin with Italian Prime Minister Paolo Gentiloni and leaders of other big EU states which are members of the global G20.

“I said Italy and Greece … cannot be left alone in this refugee crises,’ Juncker told reporters in Tallinn, where he was meeting the Estonian government as it takes on the six-month presidency of European Union ministerial councils. He rejected any suggestion the Union had failed to help the countries where most refugees and migrants are arriving, noting EU funds allocated to Italy and Greece and border guard and other personnel sent to help process those arriving. The Commission on Thursday threw its weight behind a plea by Italy for fellow EU states to allow rescue boats carrying migrants to dock in their ports.

EU diplomats said they were looking at Italian concerns over how private charities are picking up people just off the Libyan coast. Some see that as encouraging more to take to the sea. The rescue organisations complain of unfair criticism. About 10,000 people have been rescued over the past three days. Italy has taken in 82,000 people so far this year. Voters dealt a blow to the ruling party in local elections last week, opting for groups promising a tougher line on immigration. The Commission has signalled readiness to give Italy more cash to help with increased arrivals, though officials and diplomats in Brussels are sceptical there would be any swift agreement for other EU states to take in the private boats.

Read more …

Apr 072017
 
 April 7, 2017  Posted by at 8:35 am Finance Tagged with: , , , , , , , ,  


 

I don’t know anything more than anyone else does, outside of the decision makers’ circle, about the reasoning behind the Tomahawk missile attack on a Syrian airport. Have the US neocon warmongers won over Trump and the White House, as I see suggested? Have the Goldmanites? Is that the same group of people? If Trump has conceded to the warmongers, will Putin be next in line? Should Russia have pushed through when it had the upper hand in Syria, and ‘finished’ the job?

All these things, and many more, are possible. What’s certain is that Trump’s popularity will surge in America. Nothing unites like a Tomahawk, it seems. Plus ça change… But what has really happened? ABC reports that the Syrian army appears to have been warned in advance of the attack, and pulled out its people and as much of its material as it could.

That means either the Americans have warned them, or more likely the Russians have, as the US knew they would when it told Moscow about the impending ‘operation’ before it took place. And that makes it largely symbolic then, doesn’t it, as former National Security Adviser Richard Clarke suggests to ABC. Of course that would change if there are additional, and more deadly attacks, and that could happen any moment now. For now it’s more or less plausible though.

 

But why launch a symbolic attack on Assad? Why not go ‘bigly’ if you really want him gone? It’s not exactly a first warning. Is it perhaps a symbol meant for Putin to understand? Does the US tell Moscow that it should better control Assad? Doesn’t sound convincing. But it still sounds better than Trump putting on a show for domestic consumption only. It may make him more popular, but he can do without the protests.

There’s another element in all this that deserves more scrutiny. Sort of linked to the Putin-Assad connection. That is, why was the attack launched at the very moment that Xi Jinping was sitting down for dinner at Mar-a-Lago? Trump had reason to show the world that he’s willing to use his strength. You can question the whole thing, but it makes sense, from a military point of view, in more than one way.

And the biggest threat to the US, and perhaps the world, is not Assad. It’s North Korea. The US had to tell China that its protégé is getting out of hand. That has been going on for a while of course, but Kim fired a bunch of rockets recently, and one of these days that could lead to a -nuclear?- ‘accident’. Countries like South Korea and Japan are getting very nervous, and the US has vowed to protect them. As Xi is well aware.

 

So the symbolism here may be directed, in a pretty direct way, at Xi Jinping. Get your boy under control or we soon will have no choice but to do it for you. And we don’t want to do that, because you will lose face if we do, and if that happens the two of us may get into a conflict, on opposite sides. Which neither of us should want. It would be bad for business. And while you’re here to discuss business, let’s get this out of the way first.

As I said, I could be wrong in much of this, but I don’t believe for a second that the attack taking place while Xi is at the ‘Winter White House’, is a coincidence. That, too, is a symbol. And it’s not about starting a war, the US has been active in Syria all along, albeit more secretly. That would suggest it’s useful to wonder why this attack was executed the way it was, and why there is so much fanfare surrounding it, why this specific one had to make all the headlines.

Before dinner, Trump reportedly said he had already struck a friendship with Xi, and “I have gotten nothing, absolutely nothing.” Jovial banter between two men, and their delegations, who are extremely wary of each other. So much so that direct open serious talk is difficult, that is done on the sidelines and in backrooms by assistants. It’s the kind of situation in which people talk, communicate, in symbols.

 

Aug 162014
 
 August 16, 2014  Posted by at 6:59 pm Finance Tagged with: , , , , ,  


Jack Delano Freight train leaves Santa Fe rail yard for West Coast, Argentine, KS Mar 1943

Let’s assume for the moment that the two Guardian and Telegraph journalists who reported seeing 23 Russian army vehicles cross the border into Ukraine on Thursday were duped. Because if we don’t assume that, we must conclude they are accomplices, in a strange plot.

On Friday the Ukraine government, first through military spokesman Andriy Lysenko, and then through President Poroshenko, sent out a claim into the world that its army had destroyed a number of Russian vehicles on Ukraine territory.

It did, however, it’s an established pattern by now, not produce any evidence of that, no photos, no video, no satellite images and no parts from the allegedly destroyed tanks and armored personnel carriers, though “the majority of the machines” were said to have been destroyed.

Even the White House stated it had no evidence of the “attack”. And then went on to claim that Russia has vehicles and soldiers inside Ukraine all the time, something we’ve never seen any proof of either. Later, Germany’s Merkel told Putin to get his people and equipment out of Ukraine. Putin denied, as always, that there were any. This is what the UN said on July 31:

UN: ‘No Hard Evidence’ of Russia Supporting Ukraine Insurgency

The United Nations has not received any hard evidence that Russia supplied pro-Russian separatists in eastern Ukraine with weapons, the United Nations High Commissioner for Human Rights said Thursday. “We were unable to get hard evidence of the supply of weapons,” Pillay said. Washington and Kiev have both claimed they possess proof that Russia had been supporting the Ukrainian insurgency through the provision of military equipment.

If we assume that the two UK journalists didn’t make up the whole thing, but actually witnessed the vehicles cross the border, what did they really see? They reported recognizing Russian plates, and therefore assumed these were Russian vehicles. But they may as well have been someone else’s vehicles carrying Russian plates. We don’t know.

The part of Ukraine the vehicles supposedly entered is under rebel control. That begs the question: how did the Ukraine army get into rebel territory, unseen, destroy the vehicles, and get back into government controlled territory again, also unseen?

The Ukrainian army destroys Russian tanks in separatist-held territory. That’s quite a story. Only, it probably never happened. Which makes the Ukraine government a bunch of liars. But that’s nothing new.

What’s more troublesome is the role of NATO. Its new secretary-general, Anders Fogh Rasmussen, who’s looked trigger happy ever since he took the job, said that NATO had detected an “incursion” of vehicles from Russia on Thursday, and that “what we have seen last night is the continuation of what we have seen for some time.” Mr. Rasmussen doesn’t do evidence either.

So what happened and why did it happen? My best guess is that the Ukraine government saw the reports from the British journalists and decided to turn it into a story they thought would be good for their sake. Knowing western media would be eager to copy it and run it. And NATO. They never expected the US to state there was no evidence, because that didn’t matter much regarding earlier stories.

It could be a set-up, in which the journalists were guided to the place where the vehicles crossed the border, intended to make them write the story. Or they could be in on it.

Interfax has yet another twist, for which we have no proof either. The rebels suggest that Ukraine destroyed 100 of its own vehicles. That could have been an accident, like the downing of MH17 could have been, but don’t forget that we don’t know what or who ‘the Ukraine army’ really is. There are plenty reports of it being broke, poorly trained, poorly equipped, but on the other hand there are mercenaries, Blackwater and others, and there are Americans involved, CIA, who knows who else. Interfax:

The leadership of the self-proclaimed Donetsk People’s Republic has dismissed the Ukrainian government’s statement on destroying a convoy of what appeared to be Russian armored vehicles in eastern Ukraine. “We haven’t received any armored vehicles from Russia. No Russian units, including Russian armored vehicles, have crossed the border. Hence, no Russian armored vehicles could have been destroyed,” DPR First Deputy Prime Minister Andrei Purgin told Interfax on Friday evening. Purgin claimed that, on the contrary, the militias destroyed about 100 Ukrainian armored vehicles.”A lot of Ukrainian armored vehicles were destroyed today, 7 at one place, 12 at another. And the same all over the DPR territory. A total of about 100 of them.”

Another development in Ukraine is not quite as mysterious, but it still leaves a lot of questions. Only 3 weeks after voting it down, in the wake of which PM Yatsenyuk resigned, the Ukraine parliament (Rada) voted on Thursday for selling a 49% interest in the gas pipelines under its soil to western companies. On July 24, 221 members were for, this time, with Yats reinstated and proposing the bill, the tally rose to 228, a narrow victory.

US, EU Now Allowed To Buy Ukraine’s Gas Pipelines

Ukraine’s parliament has passed a law that will allow foreign companies from the US and EU to co-manage Ukraine’s national gas transportation system (GTS) which has a value of around $25-35 billion, one of the largest in the world. The motion, proposed by PM Arseniy Yatsenyuk, was only supported by 228 parliament members, just two more than the required 226 to adopt the bill. The first reading of the bill was approved on July 4. Ukraine will control 51% and foreign partners will be offered 49% in the venture, which seeks to “strengthen” Ukraine’s position as a transit state, according to the bill’s advocates.

Overshadowed by all the fighting, and hardly mentioned in the western media, this is a major development. And not everybody even inside Ukraine is happy about it.

Buy Firewood, Coal, Ukraine MP Warns After US, EU Get Access To Gas Pipes

The decision by the Ukrainian parliament to allow companies from the US and EU to co-manage the country’s gas pipelines could lead to the country being left with no gas supplies in the coming winter, an MP has warned in an emotional online address. Nikolay Rudkovsky, an independent MP in Ukraine’s Verkhovna Rada, believes the law allowing 49% of Ukraine’s national gas transportation system to be managed by foreign companies is a big mistake.

“People, my advice to you is: buy firewood and coal! After the law on reforming the management system of the united gas transportation system of Ukraine was passed today, our country has been left with almost no chances of staying with gas,” Rudkovsky said on Facebook. “Don’t the MPs understand that we are now guaranteed to have a winter with no heating?” he asked.

The bill, proposed by PM Arseny Yatsenyuk, has raised much controversy among Ukrainian MPs, who rejected it several times before the final approval on Thursday. One of the rejections, on July 24, is believed to have prompted Yatsenyuk’s resignation move, which was eventually dismissed by the Rada. Rudkovsky might have voiced the fears of quite a number of the bill’s opponents when he tried to speak out against passing of the bill on Thursday, but was silenced by the Rada Chairman Aleksandr Turchinov. “We don’t get a single cubic meter of gas from Russia now. This law gives away Ukrainian gas transportation system to the US,” Rudkovsky had time to say, before his microphone was switched off …

What’s more, in the same session the Rada also voted for sanctions on Russia.

Ukraine Approves Law On Sanctions Against Russia

The Ukrainian parliament approved a law on Thursday to impose sanctions on Russian companies and individuals supporting and financing separatist rebels in eastern Ukraine. The government has already prepared a list of 172 citizens of Russia and other countries, and of 65 Russian companies, including gas export giant Gazprom, on whom they could impose sanctions “for financing terrorism”. Prime Minister Arseny Yatseniuk told parliament that Ukraine had taken a historic step. “By approving the law on sanctions, we showed that the country is able to protect itself,” he said. “The law should give a clear answer to any aggressor or terrorist who threatens our national security, our government and our citizens.” Ukraine said on Monday that European energy companies will have to agree major contract revisions when purchasing Russian natural gas if parliament approved sanctions on Gazprom.

Excuse me, Yats, but I don’t believe “the country is able to protect itself”. Not with an army reportedly still underpaid and undertrained. We all know that without questionable swastika brandishing storm troops alongside foreign mercenaries, all financed by US and EU support, there wouldn’t be much of an army. Whether that would be a good thing is another matter altogether, but don’t tell me you can protect yourself.

The dual measures of the sanctions against Russia and the sell-off of the gas pipeline system are the next steps in the western conquest of Ukraine. And they may not go as smoothly as Yats and Obama and Merkel seem to think and hope.

Slovakia reportedly prepares for “reverse flow” gas delivery to Ukraine, but that puts a serious risk on Slovakia’s own gas. And that is without even going into the actual process of reverse flow, or of the legal implications involved.

When the Ukraine government states that “European energy companies will have to agree major contract revisions when purchasing Russian natural gas“, that is at least as much of a threat to Europe as it is to Russia. And the bosses in Brussels may think that they are successful in their eastward conquest of everything right up to the Russian border, but Russians are not a stupid people.

Why would European nations want to renegotiate contracts with Russia’s Gazprom? And more importantly, why would Gazprom want to do that? Large swaths of Europe have no other possible gas source than Russia, and it would take years to change that. Of course people like Juncker and Barroso can dream of leaving millions of Europeans in the cold, and then blame Putin for that, but the PR war will stop somewhere.

In fact, while Slovakia says it’s preparing that reverse gas flow to Ukraine, its PM also had something else to say (he was whistled back on that by his president, who’s a ‘hard-liner’):

Slovak PM Warns “Meaningless” Russia Sanctions Will Hurt EU Economy

Slovakia’s prime minister criticized the European Union’s sanctions against Russia over Ukraine on Thursday, saying they would only threaten economic growth in the 28-member bloc. “Why should we jeopardize the EU economy that is beginning to grow?” Robert Fico told a news conference. “If there is a crisis situation, it should be solved by other means than meaningless sanctions. Who profits from the EU economy decreasing, Russia’s economy having troubles and Ukraine economically on its knees?” Fico also questioned Ukraine’s sanctions against Russia and said Slovakia must be prepared for a potential disruption of Russian natural gas supplies via Ukraine.

Other EU nations, Germany, Czech Republic, Greece, also signal they think things have gone too far. From the financial world comes Danish Danske Bank, which issued a report that views things from its own angle:

EU-Russia ‘Trade War’ To Finish Within 3 Months – Danish Biggest Lender

Reciprocal trade sanctions by Russia and the EU should not last longer than 3 months, as both economies will feel they can’t afford that, according to experts from Denmark’s largest bank, Danske Bank. “We believe an escalating trade war would be unbearable for both Russia and the EU, and that the EU will revoke the sanctions within one to three months, with Russia abolishing its own sanctions,” said the bank’s report called ‘The Ukrainian Crisis: the Nordic angle’. The report focuses on Nordic markets and said that should energy become involved in the dispute, the losses for both Russia and the EU would be sky-high.

3 months? Russia has 3 months. Does Europe? What if sanctions are lifted, but Russia still, in the negotiations needed after Ukraine’s sanctions, demands a premium because of damages it suffered from EU sanctions, which were based on unsubstantiated allegations against it? Or does anyone still think the evidence will suddenly pop up out of some dark corner?

But matters could get much worse for Europe. If the so-called “Ukraine army” keeps shelling and killing Russian speaking east Ukrainians, Putin may have no choice but to take a much harder stance on the diplomatic front, and perhaps the military as well. How long can he watch from a distance as what Russia considers fellow Russians are slaughtered? If California were to secede from America, what would the US do in such a situation?

In the meantime, that same “Ukraine army” has reportedly started heavy attacks on Lugansk, so the much maligned Russian aid convoy won’t be getting anywhere anytime soon.

One final point: while the Russian aid is being held up at the border, swamped by more allegations from the proven liars (yes, we do have proof of one thing here) in Kiev, how much aid for the people in east Ukraine has come from the US, EU and the Ukraine to date? It’s not as if they’re not suffering, we know that, it’s not as if they don’t desperately need supplies.

Why do US and EU send tons of supplies for the Yazidi in Iraq (who mostly weren’t even where the supplies were dropped), and none for Lugansk and Donetsk? Exactly whose PR spin machine are we caught up in here?

US, EU Now Allowed To Buy Ukraine’s Gas Pipelines (RT)

Ukraine’s parliament has passed a law that will allow foreign companies from the US and EU to co-manage Ukraine’s national gas transportation system (GTS) which has a value of around $25-35 billion, one of the largest in the world. The motion, proposed by PM Arseniy Yatsenyuk, was only supported by 228 parliament members, just two more than the required 226 to adopt the bill. The first reading of the bill was approved on July 4. Ukraine will control 51% and foreign partners will be offered 49% in the venture, which seeks to “strengthen” Ukraine’s position as a transit state, according to the bill’s advocates.

Together with Western investors Ukraine is planning to create a new company that will control the country’s gas transit system. However, it could be hard to find investors willing to participate in the project, some analysts believe, as Russia is currently developing a transit system bypassing Ukraine’s territory, which has proved unreliable as a transit partner. Russia is building two pipelines that do not run through Ukraine to deliver natural gas to Europe. The Nord Stream is already complete, and once the South Stream is complete, Ukraine’s gas transportation system may lose more than 50% of its value. Earlier, the Ukrainian parliament rejected the measure to fully split Ukraine’s Naftogaz into two separate companies, which would help comply with Europe’s third energy package, which doesn’t allow one single company to both produce and transport oil and gas.

Read more …

Buy Firewood, Coal, MP Warns After US, EU Get Access To Ukraine Gas Pipes (RT)

The decision by the Ukrainian parliament to allow companies from the US and EU to co-manage the country’s gas pipelines could lead to the country being left with no gas supplies in the coming winter, an MP has warned in an emotional online address. Nikolay Rudkovsky, an independent MP in Ukraine’s Verkhovna Rada, believes the law allowing 49% of Ukraine’s national gas transportation system (GTS) to be managed by foreign companies is a big mistake. “People, my advice to you is: buy firewood and coal! After the Law on reforming the management system of the united gas transportation system of Ukraine (#4116) was passed today, our country has been left with almost no chances of staying with gas,” Rudkovsky said on Facebook, following the Rada session. “Don’t the MPs understand that we are now guaranteed to have a winter with no heating?” he asked.

The bill, proposed by PM Arseny Yatsenyuk, has raised much controversy among Ukrainian MPs, who rejected it several times before the final approval on Thursday. One of the rejections, on July 24, is believed to have prompted Yatsenyuk’s resignation move, which was eventually dismissed by the Rada. Rudkovsky might have voiced the fears of quite a number of the bill’s opponents when he tried to speak out against passing of the bill on Thursday, but was silenced by the Rada Chairman Aleksandr Turchinov. “We don’t get a single cubic meter of gas from Russia now. This law gives away Ukrainian gas transportation system to the US,” Rudkovsky had time to say, before his microphone was switched off, according to ITAR-TASS. Turchinov accused the MP of lobbying for Russian interests.

Rudkovsky has asked Ukrainians to write petitions to the government, calling for the bill’s cancelation. “We can’t allow dozens of other Alchevsks to happen.” Around 1,500 people were left without gas in the town of Alchevsk, Lugansk Region of eastern Ukraine, earlier in August due to a malfunctioning gas pipe. Rudkovsky’s post has inspired dozens of worried comments, with Ukrainians sharing stories of electricity and water shortages they are already encountering, as well as fears of more to come. Earlier this month, Kiev announced turning off hot water throughout the city in an attempt to save gas for the winter months. The Ukrainian authorities have voiced concern over the country’s ability to ensure winter heating. Rudkovsky believes the government “failed” preparation for the winter. “There are other right ways of solving this problem, but the government does not hear me. I advised them to buy heating oil and transfer heating facilities to coal,” he said.

Meanwhile economic experts doubt Ukraine will actually be able to find the EU and US investors for its gas transportation system. Mikhail Korchemkin of East European Gas Analysis believes it’s risky to make such investments, as the future of the gas market is vague, Vedomosti reports. Energy Intelligence analysts argue the conflict in the east of Ukraine makes the project risky in general.

Read more …

US Unable to Confirm Kiev Claims about Russian Military Vehicles (RIA)

Washington cannot confirm Kiev’s claims that a Russian military column crossed into Ukraine, US National Security Council (NSC) spokesperson Caitlin Hayden said in a statement Saturday. “We are working to gather more information regarding reports that Ukraine’s security forces disabled vehicles in a Russian military convoy inside Ukraine. We are not currently in a position to confirm these reports,” she said in a statement. However, Hayden added that the United States believed Russia to be providing the independence supporters with weapons and hardware and that Moscow could help de-escalate the situation by “stopping its supply of weapons, support and cash to separatists.”

Earlier, the United Nations also said it could not verify the reports that the Ukrainian forces hit Russian military vehicles inside Ukraine, and called for peaceful resolution of the conflict. The confrontation in Ukraine started when the Kiev-backed forces tried to suppress the independence supporters in eastern Ukraine who refused to acknowledge the authorities that came to power following the February 22 government coup. Russia has repeatedly denied its involvement in Ukraine’s internal affairs and called for a peaceful resolution of the Ukrainian crisis.

Read more …

UN: ‘No Hard Evidence’ of Russia Supporting Ukraine Insurgency (Moscow Times)

The United Nations has not received any hard evidence that Russia supplied pro-Russian separatists in eastern Ukraine with weapons, the United Nations High Commissioner for Human Rights said Thursday. “We were unable to get hard evidence of the supply of weapons,” Pillay said in comments carried by ITAR-Tass. Washington and Kiev have both claimed they possess proof that Russia had been supporting the Ukrainian insurgency through the provision of military equipment. In the wake of the downing of Malaysia Airlines Flight MH17 on July 17, which claimed 298 lives, these accusations grew to a fever pitch.

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Did Ukraine Attack Its Own Tanks? (Zero Hedge)

While today’s trading session was marked by news which at first blush correlated with what may be the 2014 equivalent of the Archduke Ferdinand shooting, in retrospect the newsflow made painfully little sense. Let’s recap:

  1. Yesterday afternoon, two UK reporters working for the Guardian and Telegraph, supposedly located by the border in east Ukraine, reported that they were “eyewitnesses” as a convoy of military trucks crossed the Russian border into the breakaway Donetsk republic, aka Ukraine. While there have been photos of the military trucks that have accompanied the Russian humantiarian convoy on Russian territory, there has so far been no proof, aside from said eyewitness reports, confirming Russian military vehicles entered or were in Ukraine.
  2. This morning Ukraine military’s spokesman, Andriy Lysenko, shocked the world when newswires reported that Ukraine forces had attacked an armed convoy from Russia, and “destroyed” a part of it. This was subsequently reiterated by the president of Ukraine himself who said that “the given information was trustworthy and confirmed because the majority of that machines had been eliminated by the Ukrainian artillery at night”, and by the secretary-general of NATO, Anders Fogh Rasmussen, who said that the alliance had detected an “incursion” of vehicles from Russia last night, adding that “what we have seen last night is the continuation of what we have seen for some time.” Alas, as in the case above, just more verbal reports, with zero actual evidence.
  3. Shortly thereafter, Russia responded when the Russian defense ministry said that there was no Russian military column that crossed into Eastern Ukraine, and that the above reports are based on “some fantasies.”

This is where the breakdown of logic occurs, because for Russia to make such a formal statement it clearly implies that Russia believes there is no evidence of destruction of a Russian convoy in Ukraine territory, something which obviously would exist if indeed as Ukraine’s president had claimed, the “majority of the machines had been eliminated.” If true, it also implies that either Ukraine had fabricated the entire story, and certainly the part about the destruction of the convoy and by extension that Russians had ever entered into East Ukraine. Furthermore, that would also suggest that the reports of the British reporters were also a fabrication.

Unless, of course, there is evidence, in which case the credibility of the both the Guardian and Telegraph reporters can be preserved, Ukraine can not be accused of fabricating a story to suit what some may say its own warmongering ambitions, and the onus is on Russia to explain why it lied about there being no invasion. More to the point, the onus is on Ukraine to present some evidence, in fact any evidence, of a destroyed Russian military convoy instead of merely building upon a story conceived by the two UK media outlets, because if Ukraine indeed has no evidence, then its story falls apart and what’s worse, the credibility and reputation of its government, of NATO and certainly of the UK press would be in tatters.

So what other possibility is there? Well, one that is all too unpalatable for Ukraine, namely that in its excitement to blow something up, it may have well destroyed some of its own military vehicles. A possible lead to such a turn of events comes from this Interfax report citing the leadership of the breakaway Donetsk People’s Republic.

The leadership of the self-proclaimed Donetsk People’s Republic has dismissed the Ukrainian government’s statement on destroying a convoy of what appeared to be Russian armored vehicles in eastern Ukraine. “We haven’t received any armored vehicles from Russia. No Russian units, including Russian armored vehicles, have crossed the border. Hence, no Russian armored vehicles could have been destroyed,” DPR First Deputy Prime Minister Andrei Purgin told Interfax on Friday evening. Purgin claimed that, on the contrary, the militias destroyed about 100 Ukrainian armored vehicles.”A lot of Ukrainian armored vehicles were destroyed today, 7 at one place, 12 at another. And the same all over the DPR territory. A total of about 100 of them,” Purgin said.

The implication is clear: while 100 or so Ukraine armored vehicles may or may not have been destroyed, one wonders if indeed the Ukraine army was responsible in “aiding” the separatists with what would appear to be a friendly-fire incident?
But perhaps the most damning evidence comes from none other than the White House itself, which according to CNN just admitted that while it accuses Moscow of “incursions “it can’t confirm the convoy was destroyed by Kiev.

Perhaps for the simplest reason that there is no evidence to help with the confirmation process? Which is rather unpleasant, because as explained above, without confirmation of a destroyed convoy, the whole story falls apart as merely yet another unprecedented warmongering fabrication, one involving not only the Kiev regime, but NATO and the UK press as well! What is worse, is that if indeed the specter arises that Ukraine is lying about an event that nearly gave the market a heart attack on the belief that a new international war involving Russia may be about to break out, was Ukraine also lying about flight MH-17. And what else may the Kiev regime have been lying about?

Read more …

Russia Assures US On Aid Convoy (BBC)

Russia’s defence secretary has assured his US counterpart that there are no military personnel in its controversial aid convoy for Ukraine, the US says. It said Sergey Shoygu told Chuck Hagel the convoy was not being used as a pretext to intervene further. The convoy, which aims to aid eastern Ukrainian cities held by pro-Russian rebels, is still stalled at the border. Earlier Russia denied Ukraine’s claims that a column of Russian armoured vehicles had crossed the border. The Pentagon said Mr Hagel had sought clarification on the convoy. It said: “Minister Shoygu ‘guaranteed’ that there were no Russian military personnel involved in the humanitarian convoy, nor was the convoy to be used as a pretext to further intervene in Ukraine.” It said: “Minister Shoygu assured Secretary Hagel that Russia was meeting Ukraine’s conditions.”

Read more …

Ukraine And Slovakia Plan To Start Reverse Flow Gas In September (RT)

Ukrtransgaz, Ukraine’s national pipeline operator, has completed all the necessary construction to accept 27 million cubic meters of gas per day from Slovakia through 2019. The operations are due to start on September 1. All technical aspects and negotiations have been agreed upon by Ukraine’s Uktransgaz and Slovakia’s Eustream AS, Ukraine’s state oil and gas company Naftogaz said on Wednesday. Natural gas will flow from Slovakia to Uzhgorod, a town in western Ukraine. Though the natural gas will help Ukraine with its depleting natural gas reserves, the 27 million cubic meters is still only 1/4 of what Moscow used to send every day. Deliveries from Slovakia could satisfy up to 20% of Ukraine’s natural gas demand, which in 2013 was 55 billion cubic meters. The two companies first signed a Memorandum of Understanding on April 28, 2014 to provide reverse flow gas supplies to Ukraine. The concept of ‘reverse-flow’ means re-exporting Russian gas delivered to Slovakia to Ukraine. Gazprom, the supplier, maintains this is illegal under existing contracts.

Ukraine is seeking reverse-flow gas because it can no longer import gas from Russia, which stopped non pre-payment gas deliveries in June, after Kiev had accumulated more than $5 billion in unpaid gas bills. In July, Slovakia began seeking partners to send natural gas to Ukraine, however, not many parties were eager to start business with Kiev, notorious for not paying its gas bills. Naftogaz, Ukraine’s national oil and gas company, estimated in July that the country has another 6 billion cubic meters to burn before running out, likely in December. Gazprom Deputy CEO Vitaly Markelov has estimated Ukraine needs 18.5 bcm of gas to keep the heat on until December. On Tuesday, Ukraine announced it will halt the supply of Russian gas through its territories. The government had set up a strict regime to save up gas for winter – turning off hot water at most Kiev residences and even proposed decreasing the minimum room temperature in homes down to 16 degrees Celcius from 18 degrees. Europe bought about 160 billion cubic meters of Russian gas in 2013, according to Gazprom, providing for 35% of EU’s total gas consumption. Slovakia itself is preparing for a halt in Russian gas supplies through Ukraine.

Read more …

Slovak PM Warns “Meaningless” Russia Sanctions Will Hurt EU Economy (Reuters)

Slovakia’s prime minister criticized the European Union’s sanctions against Russia over Ukraine on Thursday, saying they would only threaten economic growth in the 28-member bloc. “Why should we jeopardize the EU economy that is beginning to grow?” Robert Fico told a news conference. “If there is a crisis situation, it should be solved by other means than meaningless sanctions. Who profits from the EU economy decreasing, Russia’s economy having troubles and Ukraine economically on its knees?” Fico also questioned Ukraine’s sanctions against Russia and said Slovakia must be prepared for a potential disruption of Russian natural gas supplies via Ukraine. Russia cut gas supplies to Ukraine on June 16 in a dispute over unpaid bills but so far has continued to supply gas which Ukraine sends on to Russia’s other customers. However, intensified fighting in eastern Ukraine between Ukraine’s forces and pro-Russian separatists and escalating tit-for-tat sanctions between Russia and the EU have raised fears of a disruption of deliveries to Europe.

The Ukrainian parliament approved a law on Thursday to impose sanctions on Russian companies and individuals supporting and financing separatist rebels in eastern Ukraine. Ukraine’s government has already prepared a list of 172 citizens of Russia and other countries, and of 65 Russian companies, including gas export giant Gazprom, on which they could impose sanctions “for financing terrorism”. Fico said it was “strange” that Ukraine, after signing an association agreement with the EU, was taking “unilateral steps that … threaten the individual economic interests of EU member states.” Europe takes about a third of its gas imports from Russia, and about 40 percent of that amount flows through Ukraine and into the west via Slovakia. When asked about potential disruptions, during a meeting with representatives of main Slovak gas companies, SPP and Eustream, Fico said, “We must be prepared that such a situation can actually come about.”

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EU-Russia ‘Trade War’ To Finish Within 3 Months – Danish Biggest Lender (RT)

Reciprocal trade sanctions by Russia and the EU should not last longer than 3 months, as both economies will feel they can’t afford that, according to experts from Denmark’s largest bank, Danske Bank. “We believe an escalating trade war would be unbearable for both Russia and the EU, and that the EU will revoke the sanctions within one to three months, with Russia abolishing its own sanctions,” said the bank’s report called ‘The Ukrainian Crisis: the Nordic angle’. The report focuses on Nordic markets and said that should energy become involved in the dispute, the losses for both Russia and the EU would be sky-high. Russia is Europe’s biggest gas supplier providing about 30% of the region’s total demand.

Experts say the Ukrainian crisis will have a modest direct impact on the European economy, with the biggest risk coming from negative sentiment. Finland is thought of as the most vulnerable country, and is expected to contract 0.2 percent this year. This is because the country’s trade, tourism and foreign direct investment are closely connected with Russia and Ukraine. Scandinavian countries are expected to feel a limited affect. Norway may even benefit from sanctions long term, if Europe starts using Norwegian gas as an alternative to Russian supplies, the report concluded.

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Kiev Says Forces Destroyed Russian Armour Inside Ukraine (Reuters)

Ukraine said its artillery destroyed part of a Russian armoured column that entered its territory overnight and said its forces came under shellfire from Russia on Friday in what appeared to be a major military escalation between the ex-Soviet states. Russia’s government denied its forces had crossed into Ukraine, calling the Ukrainian report “some kind of fantasy”, and in turn raised its own serious concerns about activity by the U.S.-led NATO defence alliance near its borders. Moscow accused Kiev of trying to sabotage aid deliveries to eastern areas torn by fighting between pro-Russian separatists and the Western-backed government of Moscow’s former satellite. In a call to U.S. Defense Secretary Chuck Hagel, as reported by Russia’s state news agency RIA, Defence Minister Sergei Shoigu said Moscow was “seriously concerned” by increased NATO activity and called for a ceasefire to get aid into Ukraine. The agency did not specify what Western military movements he meant.

The Pentagon said in a statement that Hagel had sought clarification about the Russian convoy during the phone call and was “guaranteed” it did not include Russian military personnel and would not be used as a pretext for intervening in Ukraine. NATO said there had been a Russian incursion into Ukraine, which is not a member of its mutual defence pact, but it avoiding calling it an invasion. Other European capitals accused the Kremlin of escalating a conflict that has revived Cold War-era animosities and chilled the region’s struggling economies. The White House, which said it could not confirm that a Russian military convoy had crossed the border, warned Moscow that any intervention into Ukraine without Kiev’s permission was unacceptable. The United Nations said it could not verify the reports from the Ukrainian border but called for an immediate de-escalation.

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Ukraine Tensions Flare as Poroshenko Touts Strike on APCs (Bloomberg)

Tensions flared in Ukraine yesterday as the government said its army destroyed part of a column of military vehicles that crossed the border from Russia, even as Vladimir Putin denies any military presence in the country. President Petro Poroshenko said Ukrainian forces destroyed part of a column that had arrived from Russia. The Foreign Ministry in Moscow rejected the statement and warned about a potential attack on another convoy that carries aid. Ukraine’s top diplomat, Pavlo Klimkin, said he will meet with his Russian, German and French counterparts tomorrow in Berlin. The incident adds to the tension building over Russia’s plan to send about 275 trucks with what it says is humanitarian aid to rebel-held areas in eastern Ukraine. Even with Ukraine saying it doesn’t see the armed vehicles as the sign of potential invasion, their arrival raised the stakes, said Volodymyr Fesenko, of the Penta research institute in Kiev.

“It was a gut check to see if Ukraine will defend itself,” said Fesenko, the head of the political think tank. If Russia “reacts in any way, that would mean that they confirm this convoy was a Russian one, and thus that Russia made a military intervention into Ukrainian territory. But I do not think it will.” No military column from Russia crossed into Ukraine, said Major General Igor Konashenkov, a spokesman for the Defense Ministry in Moscow, according to the Russian state-run news service RIA Novosti. Ukraine’s comments are based on “fantasies” and shouldn’t be the “subject of serious discussion,” he said, according to RIA. Ukraine’s statements on the armed convoy amount to “provocation” and are part of an “information war,” Maria Zakharova, a spokeswoman for the Russian Foreign Ministry, said by phone. The government in Kiev is seeking to aggravate the conflict and drag Russia into it, she said.

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Who? We?

Canada Releases Atrocious Jobs Data; Then Revises It Higher (Zero Hedge)

A week ago, Canada released a jobs number that was a simply put a disaster: instead of creating the 20,000 jobs analysts had expected, the country’s Statistics bureau reported that a tiny 200 had been added in the month of July, following a drop of 9,400K the month before. This promptly led to screams of pain and howls of bloody murder – after all the data is clearly not allowed to show negative trends: as the Globe and Mail reported, National Bank chief economist Stéfane Marion was among the more optimistic forecasters, with an expectation that July will actually show a net gain of 30,000 jobs and who immediately took offense with the report. “That was mind-boggling,” he said. “These are numbers we don’t see outside recessions. I just don’t believe we’re in a recession, so therefore I would expect the full-time employment numbers to be [higher].”

And sure enough, since one can’t possibly have a recession in a centrally-planned world, just hours after the release, and following the outcry from the cognitive dissonance, Statistics Canada yielded to pressure for a correction and promptly admitted it had made a mistake and was forced to correct its report. However instead of pulling a laughable ISM “seasonal adjustment glitch” excuse, the agency said it failed to count workers who should have been categorized as full-time employees, even though it clearly did count most full-time employees. Just not those that were critical to keep the illusion going. Which is why this morning it was take two for the Canada jobs print, which was as follows: In July, Canada employment increased 41.7K in July according to Statistics Canada’s second attempt, from -9.4K in prior month. This was about 41K higher than the previous “erroneous” print, and double the original estimate: high enough to make everyone happy. In fact, it was so high, it surpassed the highest range of the forecast, which topped out at 41.4K based on 20 economists.

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Yeah, why not? Long as you can just print it out of thin air anyway …

US Aid To Iraq May Speed Up Despite Billions Already Spent (Reuters)

The United States may accelerate U.S. economic and military aid to Iraq with the end of Nuri al-Maliki’s eight-year reign but will first want proof that the country’s new leaders have abandoned his sectarian ways. Maliki’s surprise announcement that he would give way to Haider al-Abadi as Iraq’s prime minister removes the man blamed by Washington for the revival of vicious sectarianism in Iraq and the advance of the Islamic State deep into Iraqi territory. U.S. officials said his departure, which may not occur until September, could open the door to greater military and economic assistance to a new Iraqi government if it adopts an inclusive agenda. Despite saying the United States had no intention of “being the Iraqi air force,” President Barack Obama has also suggested U.S. air strikes could go on for months to help Iraqis fend off Islamic State fighters seeking to establish a hub of jihadism in the heart of the Arab world.

Obama, however, faces two important questions: can Abadi’s new government unite Iraqis after his predecessor helped drive the Sunni minority into the jihadist camp? And is the U.S. public willing to pour more taxpayer money into a country that cost it billions of dollars and thousands of American lives since the 2003 U.S.-led invasion that toppled Saddam Hussein? “Whatever future military assistance we continue to provide to Iraq won’t be tied specifically or solely to the new prime minister,” said a U.S. defense official who spoke on condition of anonymity to discuss sensitive military planning. “To say that now that there’s a new guy it will open the floodgates would be way overstating this.” A second U.S. defense official said the United States would be looking for the next government to integrate the fragmented Iraqi security forces and to provide assistance to the Kurdish minority. But putting a new government program in place will take time, suggesting the measured pace of the administration’s response to the Islamic State advance will continue.

“If all those conditions start getting set, then I think you will see the possibility of us accepting an invitation to do more substantive train, advise and assist,” the official said. But if this happens, the official added, it would be slow and may take a year. In the meantime, targeted air strikes and the provision of U.S. military equipment such as Apache helicopters are expected to continue. Obama, who campaigned on promises to end the U.S. wars in Iraq and Afghanistan, has not yet decided how much more U.S. military action or weaponry he might support in Iraq, said a third U.S. official. “We’ve seen the first press allegations of a slippery slope,” said this official, who also spoke on condition of anonymity. “So you can be sure that people are concerned about what these next steps mean.”

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Not everyone fights for the same things.

Indian Premier Promises Banking Access for All Families (NY Times)

In a speech meant to set a national agenda for his new government, Prime Minister Narendra Modi on Friday announced plans to make bank accounts available to every Indian family, a complex goal that, if successful, could allow the government to eventually convert subsidies for food, fuel and fertilizer into cash transfers. Mr. Modi’s Independence Day speech came about two months after a landslide victory in parliamentary elections and amid daunting expectations that his Bharatiya Janata Party would return India to the path of economic growth and create jobs for the millions of young people who enter the labor market every year. Mr. Modi, 63, departed from the formal style of his predecessors, speaking for more than an hour without notes and describing himself as a newcomer to the capital, “untouchable to the elite class of Delhi.” He also refused the screen of bulletproof glass that has been erected to protect previous prime ministers.

A former outreach worker for a right-wing Hindu organization, he used his Independence Day speech to entreat Indians to act in the interest of the nation, saying he had been struck by the degree of infighting and self-interest he had encountered since moving to the capital. “The time has come to think seriously about whether we have a national character or not,” he said. “Today, unfortunately, the atmosphere is that if you go to anybody for work, that person will immediately ask, ‘What is in this for me?’ When he learns that there is nothing for him, he will say, ‘Why should I?’ We have to break out of this cycle of ‘what is in this for me’ and ‘why should I?’ We need to shine our national character.” With food inflation unabated since the election, Mr. Modi has been under pressure from supporters to flesh out his campaign promises with bold economic changes.

The government’s first budget, presented in July, suggested that Mr. Modi’s government would tinker with, not dispose of, the economic policies it inherited, despite his relentless criticism of the Indian National Congress’s economic record during the campaign. Mr. Modi’s promise to provide the poor with bank accounts may address some of that impatience, pointing to a long-term goal of converting distribution systems to cash payments, which would greatly reduce corruption and increase consumer spending. Account holders would be provided with a debit card and an insurance policy of up to 100,000 rupees, or about $1,600. Mr. Modi said the programs could lessen the suffering of farmers, many of whom commit suicide under financial pressure. “For his daughter’s marriage, a poor man takes a loan from the moneylender that he cannot return,” he said.

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