Feb 042019
 
 February 4, 2019  Posted by at 10:30 am Finance Tagged with: , , , , , , , , , , , , ,  


René Magritte Morning star 1938

 

Maduro Warns White House Will Be ‘Stained With Blood’ If Trump Invades (G.)
Regional Bloc Plans Pressure Campaign Against Venezuela’s Maduro (R.)
Austerity And Welfare Cuts Main Driver Behind Brexit Vote (Ind.)
Hard Brexiters Say Only Acceptable Way Forward Is To Remove Backstop (G.)
Theresa May Launches Committee To Find Irish Backstop Alternatives (Ind.)
UK Home Secretary Dismisses Speculation Of Snap General Election In June (G.)
Macron Blames Social Media & Russia For Yellow Vests (RT)
NBC News Claims Russia Supports Tulsi Gabbard (Greenwald)
D-Day For Australian Banks As Bombshell Inquiry Report Set For Release (R.)
MAGA Misses the Eurasia Train (Escobar)
The Chinese Were White – Until White Men Called Them Yellow (SCMP)
Animals And Birds Under Increasing Threat From Plastic Waste (G.)
Bacteria Glues Plastic Together Posing Even Deadlier Threat To Sea Life (Ind.)

 

 

Maduro has been practicing the Trump style.

Maduro Warns White House Will Be ‘Stained With Blood’ If Trump Invades (G.)

Venezuela’s embattled leader, Nicolás Maduro, has warned Donald Trump he will leave the White House “stained with blood” if he insists on pursuing what he called a “dirty” imperialist conspiracy to overthrow him. “Stop. Stop, Trump! Hold it right there! You are making mistakes that will leave your hands covered in blood and you will leave the presidency stained with blood,” Maduro warned during a combative interview with the Spanish journalist Jordi Évole. “Why would you want a repeat of Vietnam?” He also rejected European calls for elections, saying: “We don’t accept ultimatums from anyone. I refuse to call for elections now – there will be elections in 2024. We don’t care what Europe says.” He added: “You can’t base international politics on ultimatums. That’s the stuff of the empire, of colonial times.”

Tens of thousands of Venezuelan protesters streamed through the capital, Caracas, on Saturday to demand the exit of a president who has led the oil-rich South American nation into economic collapse and humanitarian crisis. [..] in his television interview Maduro – who came to power after the 2013 death of his political mentor, Hugo Chávez – signalled that he had no plans to go anywhere. “If the north American empire attacks us, we will have to defend ourselves … We aren’t going to hand Venezuela over,” Maduro said. The UN estimates that more than 3 million Venezuelans have fled overseas in recent years to escape hyperinflation, shortages of food, medicine and healthcare and chronic insecurity. That number is expected to rise to more than 5 million this year.

Read more …

Trump and Trudeau, a happy couple. And of course Canada belongs in a regional bloc with Venezuela, it’s right next door.

Regional Bloc Plans Pressure Campaign Against Venezuela’s Maduro (R.)

A major bloc of Latin American nations and Canada will discuss on Monday how to maintain pressure on Venezuelan President Nicolas Maduro to hold new elections as he faces widespread calls to resign after last year’s disputed presidential vote. Sources briefed on the matter said that the 14-nation Lima Group looked set, though, to hold off imposing further sanctions on the Maduro government when it meets in Ottawa. Most group members say Maduro should quit in favour of opposition leader Juan Guaido – who declared himself interim president last month – and are calling for a new presidential election in the troubled OPEC nation.

The United States, which is not a member of the group, also wants Maduro gone. “How can we continue to support the opposition to keep the pressure up on the regime and push for new elections? Certainly that’s something we’ll be looking at,” said a Canadian government official. Maduro, who has overseen an economic collapse and the exodus of millions of Venezuelans, said in an interview that aired on Spanish television channel Antena 3 on Sunday: “We don’t accept ultimatums from anyone,” adding: “I refuse to call for elections now – there will be elections in 2024.” [..] Trudeau spoke on Sunday to Guaido and the two “discussed the importance of the international community sending a clear message regarding the illegitimacy of the Maduro regime,” Trudeau’s office said.

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How the Tories got their Brexit.

Austerity And Welfare Cuts Main Driver Behind Brexit Vote (Ind.)

Welfare cuts and other austerity measures implemented under the Conservatives pushed vital swing voters to back Brexit and won the EU referendum for the Leave campaign, according to a new report. Research published by the Social Market Foundation suggests the best indicator of a person’s referendum vote was not age or education, but happiness or sadness about their personal finances – with unhappy people tending to vote Leave and contented ones preferring Remain. The report, which analysed the level of cuts in each area of the UK alongside each area’s growth in support for Ukip, argues that had it not been for austerity, the referendum would not have turned out the way it did.

It found that in districts that received the average austerity shock, Ukip vote shares were on average 11.62 percentage points higher in the most recent local elections prior to the referendum than in districts with little exposure to austerity. As well as area-level analysis, the report looked at individual-level data and found that some people directly affected by welfare cuts shifted their political support to Ukip and rejected the political establishment. “Households exposed to the bedroom tax increasingly shifted to support Ukip and experienced economic grievances as they fell behind with their rent payments due to the cuts,” the paper stated.

As much as 9 percentage points of the 52 per cent support for Leave – around 3 million votes – was decided by concern about austerity and related issues, the researchers estimated. It suggests that without the effect of the “austerity shock” on welfare and public services, the Leave share of the referendum vote could have been as low as 43 per cent, delivering a comfortable win for Remain.

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Ruled out by EU.

Hard Brexiters Say Only Acceptable Way Forward Is To Remove Backstop (G.)

Hard Brexiters have warned Theresa May that the only proposal they are likely to support to break the Brexit impasse is a version of the “Malthouse compromise”, which envisages removing the backstop from the draft European Union exit treaty. Steve Baker, vice chair of the European Research Group, said that he and other Conservative Eurosceptics could not support the alternative they believed Theresa May favoured – an addendum to the existing EU withdrawal agreement. Baker is one of five backbench MPs who will meet Steve Barclay, the Brexit secretary, on Monday, in the first meeting of a new working group aimed at examining whether technological solutions could eliminate the backstop.

The “Malthouse compromise” – named after the junior minister, Kit Malthouse, who brokered it – is a proposal to replace the unpopular backstop with alternative technological arrangements to prevent the return of a hard border in Ireland. It is supported by Baker, other Eurosceptics and the pro-remain former ministers Nicky Morgan and Damian Green, both of whom will attend further meetings with Barclay on Tuesday and Wednesday. “As far as I’m concerned the Malthouse compromise is the only game in town if we’re going to reach an agreement in Brussels,” Baker said, indicating that only rewriting the draft withdrawal agreement to remove the backstop would satisfy Tory Brexiters.

Last week MPs voted in favour of an amendment in the name of Sir Graham Brady, a senior Conservative, to examine the possibility of new customs arrangements but it is unclear that the necessary technology exists. May also instructed Geoffrey Cox, the attorney general, to examine two other proposals that could be taken to Brussels – whether it would be possible to time-limit the backstop or to introduce a unilateral exit mechanism for the UK.

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53 days to go: plenty time to waste.

Theresa May Launches Committee To Find Irish Backstop Alternatives (Ind.)

Theresa May has been accused of “wasting valuable time” in the countdown to Britain’s exit from the EU as she announced plans to establish a Commons group probing alternative plans for the Irish border post-Brexit. Despite the prime minister’s hopes of reopening the withdrawal agreement already being dashed by EU leaders with just 53 days to go until Brexit, the new committee made up of senior Tory MPs will meet for the first time on Monday. Brexit secretary Stephen Barclay is expected to attend the sessions, alongside support from officials at HM Revenue and Customs, the Cabinet Office, and No 10. The group will aim to provide “alternative arrangements” to the backstop – the EU’s insurance policy in the withdrawal agreement that aims to avoid a hard border in Ireland.

[..] But the EU’s deputy chief negotiator, Sabine Weyand, has already dismissed using existing technology as an alternative solution to the question of the Irish border. “We looked at every border on this Earth, every border the EU has with a third country – there’s simply no way you can do away with checks and controls,” she said last week. Ireland’s deputy prime minister Simon Coveney also rubbished the idea of “alternative arrangements”, adding in The Sunday Times: “This is not a new concept. The EU is committed to trying to agree alternative arrangements to replace the backstop. We want a comprehensive future relationship in place by the end of 2020 so the backstop is never used.

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So they leave on March 29 and hold elections 2-3 months later?

UK Home Secretary Dismisses Speculation Of Snap General Election In June (G.)

Sajid Javid has said “the last thing we want is a general election”, emphasising that the government is still hoping to secure a time limit or unilateral exit mechanism for the Irish border backstop. The home secretary dismissed newspaper reports that Downing Street strategists were considering holding a snap general election on 6 June, if Theresa May cannot get her Brexit deal through parliament before the 29 March deadline. “The last thing we want is a general election, the people will never forgive us for it,” Javid told the BBC’s The Andrew Marr Show. “They want politicians to get on with the job. They have been given a very clear mandate, now it’s our job to get on with it.”

There are signs that the Conservatives have started to gear up for a possible snap election, with the party’s chief executive, Sir Mick Davis, placing the Tories on a “war footing” last week and increased fundraising activities under the cover of the local elections in May. A poll by Opinium for the Observer showed the Conservatives seven points ahead of Labour on 41%, but few people believe the party would risk going to the country under May’s leadership after the disaster of 2017, when its overall majority was lost. “I know that Conservative party headquarters is planning on only one set of elections, which is the local government elections. The last thing this country wants is an election; they want parliament to deliver Brexit in an orderly way,” Javid said.

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“[far] rightists, leftists, and the Russians.”

Macron Blames Social Media & Russia For Yellow Vests (RT)

Who is at fault for Yellow Vest protests raging in France since November? For President Emmanuel Macron it’s not actual economic problems or his own decisions, but the right, the left, social media and, of course, “Russes.” Macron blasted the nation’s mainstream media for failing to control the narrative and argued that social networks and “the Russians” are driving all content instead, with traditional outlets falling into line. The president’s calculated outburst was published by the weekly Le Point on Friday, just before the Yellow Vests officially marked the 12th consecutive week of staging large-scale protests against the government.

The president dismissed Eric Drouet, the 33-year-old trucker who emerged as a prominent figure in the protests, as “a media product, a product of social networks,” and claimed that the demonstrators are being “advised from outside,” without elaborating. He argued that 90 percent of the chatter online about the Yellow Vests comes from the “[far] rightists, leftists, and the Russians.” Yet, 18 months after bending the French party system to his will and his triumphant win against bien-pensant pariah Marine Le Pen, Macron’s excuses for disappointing expectations are running thin. His first cannonade in what was intended to be a sweeping march of modernity, was a labor reform that he claimed would help small businesses. It was met with protests from unions, public sector workers who said it made firing easier, and those fearing loss of benefits.

In a preview of what has now become the norm, Macron dismissed the opponents of his policies as “slackers.” [..] The government has already suspended the fuel tax hike that caused the traffic law-mandated vests to be put on in the first place, while the president has promised to raise the minimum wage. But for many demonstrators these actions are belated, and do not address underlying issues. “It’s not enough. We still have to fight the current taxes, the ones that have been in place for years. We should have woken up years ago, and now we have to make up for the years we missed,” one of the original and most popular Yellow Vests, Ghislain Coutard, told Deutsche Welle, adding that Macron should “come out of his hole and face” the people.

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It’s a model that works inside the echo chamber.

NBC News Claims Russia Supports Tulsi Gabbard (Greenwald)

NBC News published a predictably viral story Friday, claiming that “experts who track websites and social media linked to Russia have seen stirrings of a possible campaign of support for Hawaii Democrat Tulsi Gabbard.” But the whole story was a sham: the only “experts” cited by NBC in support of its key claim was the firm, New Knowledge, that just got caught by the New York Times fabricating Russian troll accounts on behalf of the Democratic Party in the Alabama Senate race to manufacture false accusations that the Kremlin was interfering in that election. To justify its claim that Tulsi Gabbard is the Kremlin’s candidate, NBC stated: “analysts at New Knowledge, the company the Senate Intelligence Committee used to track Russian activities in the 2016 election, told NBC News they’ve spotted ‘chatter’ related to Gabbard in anonymous online message boards, including those known for fomenting right-wing troll campaigns.”

What NBC – amazingly – concealed is a fact that reveals its article to be a journalistic fraud: that same firm, New Knowledge, was caught just six weeks ago engaging in a massive scam to create fictitious Russian troll accounts on Facebook and Twitter in order to claim that the Kremlin was working to defeat Democratic Senate nominee Doug Jones in Alabama. The New York Times, when exposing the scam, quoted a New Knowledge report that boasted of its fabrications: “We orchestrated an elaborate ‘false flag’ operation that planted the idea that the [Roy] Moore campaign was amplified on social media by a Russian botnet.’”

[..] In any event, NBC News, to smear Gabbard as a Kremlin favorite, relied on a group that it heralded as “experts” without telling its audience about the major fraud which this firm just got caught perpetrating in order – on behalf of the Democratic Party – to fabricate claims of Kremlin interference in the Alabama Senate race. That’s because the playbook used by the axis of the Democratic Party, NBC/MSNBC, neocons and the intelligence community has been, is and will continue to be a very simple one: to smear any adversary of the establishment wing of the Democratic Party – whether on the left or the right – as a stooge or asset of the Kremlin (a key target will undoubtedly be, indeed already is, Bernie Sanders).

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They’ll just paper it all over.

D-Day For Australian Banks As Bombshell Inquiry Report Set For Release (R.)

The Australian government is due to release on Monday the final recommendations of the independent inquiry that exposed systemic wrongdoing in Australia’s financial sector last year, likely leading to sweeping changes to the country’s banking industry. The big banks, insurers, pension funds and regulators who oversee the financial industry are bracing for a brutal summary of their misdeeds and weaknesses, and a list of tough recommendations including possible criminal charges. The Royal Commission was a quasi-judicial independent body led by a former high court judge that was tasked by the government, reluctantly at first, with investigating financial sector misconduct following a string of banking scandals.

For 11 months its public hearings shocked the country and wiped more than A$60 billion ($43.4 billion) from top financial stocks as investors factored in the prospect of tougher regulation, higher compliance costs and thinner margins. Regulators were also grilled by the commission’s barristers about why they seemed reluctant to crack down on wrongdoing, sometimes penalizing firms with little more than a mildly worded press release. “There will be nothing positive in the recommendations because the banks have clearly breached various obligations in the laws, and obligations to good customer service,” said Matthew Wilson, a banking analyst at Deutsche Bank.

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Pepe appears blind to China’s multiple bubbles. I could see them halt any expansion and close their borders first to sort out the financial mess.

MAGA Misses the Eurasia Train (Escobar)

We should know by now that the heart of the 21st Century Great Game is the myriad layers of the battle between the United States and the partnership of Russia and China. Even the U.S. National Defense Strategy says so: “The central challenge to U.S. prosperity and security is the reemergence of long-term, strategic competition by … revisionist powers.” The recently published assessment on U.S. defense implications of China’s global expansion says so too. The clash will frame the emergence of a possibly new, post-ideological, strategic world order amidst an extremely volatile unpredictability in which peace is war and an accident may spark a nuclear confrontation.

The U.S. vs. Russia and China will keep challenging the West’s obsession in deriding “illiberalism,” a fearful, rhetorical exercise that equates Russian democracy with China’s one party rule, Iran’s demo-theocracy and Turkey’s neo-Ottoman revival. It’s immaterial that Russia’s economy is one-tenth of China’s. From boosting trade that bypasses the U.S. dollar, to increasing joint military exercises, the Russia-China symbiosis is poised to advance beyond political and ideological affinities. China badly needs Russian know-how in its military industry. Beijing will turn this knowledge into plenty of dual use, civilian-military innovations.

The long game indicates Russia and China will break down language and cultural barriers to lead Eurasian integration against American economic hegemony backed by military might. One could say the Eurasian century is already upon us. The era of the West shaping the world at will (a mere blip of history) is already over. This is despite Western elite denials and fulminations against the so-called “morally reprehensible,” “forces of instability” and “existential threats.” Standard Chartered, the British financial services company, using a mix of purchasing power exchange rates and GDP growth, has projected that the top five economies in 2030 will be China, the U.S., India, Japan and Russia. These will be followed by Germany, Indonesia, Brazil, Turkey and the UK. Asia will extend its middle class as they are slowly killed off across the West.

[..] Beijing is realizing it can’t meet its geo-economic goals on energy, security, and trade without bypassing the U.S. dollar. According to the IMF, 62 percent of global central bank reserves were still held in U.S. dollars by the second quarter of 2018. Around 43 per cent of international transactions on SWIFT are still in U.S. dollars. Even as China, in 2018, was the single largest contributor to global GDP growth, at 27.2 percent, the yuan still only accounts for 1 percent of international payments, and 1.8 per cent of all reserve assets held by central banks.

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Our history. A proud story. We bring democracy and freedom and prosperity.

The Chinese Were White – Until White Men Called Them Yellow (SCMP)

How did East Asians come to be referred to as yellow-skinned? It was the result of a series of racial mappings of the world and had nothing to do with the actual colour of people’s skin. In fact, when complexion was mentioned by an early Western traveller or missionary or ambassador (and it very often wasn’t, because skin colour as a racial marker was not fully in place until the 19th century), East Asians were almost always called white, particularly during the period of first modern contact in the 16th century. And on a number of occasions, even more revealingly, the people were termed “as white as we are”. The term yellow occasionally began to appear towards the end of the 18th century and then really took hold of the Western imagination in the 19th.

But by the 17th century, the Chinese and Japanese were “darkening” in published texts, gradually losing their erstwhile whiteness when it became clear they would remain unwilling to participate in European systems of trade, religion, and international relations. Calling them white, in other words, was not based on simple perception either and had less to do with pigmentation than their presumed levels of civilisation, culture, literacy, and obedience (particularly if they should become Christianised). Swedish botanist and physician Carl Linnaeus decided that varieties of homo sapiens could be similarly separated into four continental types, one of which was called homo asiaticus. The colour of that group, he said, was fuscus, which can be best translated as “dark”. This was in 1735.

Evidently there was some difficulty deciding on a precise colour for Asian Man, since the other three types, European, African, and American, could be “unproblematically” identified according to already accepted stereotypes of white, black, and red. In the tenth edition of Linnaeus’ taxonomy, however, published in 1758, fuscus was silently changed to luridus, meaning “lurid”, “sallow”, or “pale yellow”. The reasons for this alteration were never explained, although luridus also appeared in several of Linnaeus’ botanical publications to characterise unhealthy and toxic plants. Was Asian Man also to be viewed as sickly or dangerous?

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Animals and birds? You sure about that?

Animals And Birds Under Increasing Threat From Plastic Waste (G.)

Wildlife and pets are under increasing threat from plastic waste and litter, according to new data from the RSPCA, which shows the number of incidents of animals hurt by plastic litter has risen sharply on previous years. Plastic litter led to 579 cases of damage to wildlife or pets that were reported to the animal charity in England and Wales in 2018, up from 473 in 2015. That rise came against a background of falling damage to animals from other forms of litter, down from 4,968 reported incidents in 2015 to 4,579 last year. Water birds and marine animals were particularly at risk, with 28 incidents involving seals hurt by plastic litter in 2018, compared with five in 2015. Among birds, swans were among the worst affected, followed by geese and gulls.

Plastic has become an increasing focus of concern, as it does not break down in the natural environment and can continue to cause problems in waterways for years. The government has increased charges on disposable plastic bags to discourage their overuse, and businesses from supermarkets to consumer goods companies are changing their practices to use less plastic packaging in response to public concerns. But the biggest source of damage to wildlife from litter comes from angling, according to the RSPCA’s findings, with discarded equipment such as lines, nets and hooks causing more than 3,200 of last year’s reports.

“[Fishing] lines can wrap around necks, causing deep wounds in flesh and cutting off the blood supply,” said a spokeswoman for the charity. “Hooks can pierce beaks or feet, become embedded in skin or get caught in the bird’s throat, and weights can be swallowed causing internal injuries and blockages.”

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It just got a whole lot scarier. Has plastic been banned where you live yet?

Bacteria Glues Plastic Together Posing Even Deadlier Threat To Sea Life (Ind.)

Plastic in the oceans is being turned into an even greater threat to small sea creatures than previously thought because bacteria are sticking particles of it together, scientists have discovered. Glue-like substances secreted by bacteria are sticking tiny bits of plastic to form larger clusters that marine animals could mistake for food, experts fear. They also worry that the clumping could divert the natural flow of food from the ocean surface to the seafloor, leading to deep sea creatures being starved. Researchers at Heriot-Watt University in Edinburgh staged experiments with seawater, adding plastics in conditions simulating the ocean surface. Within minutes, the minuscule pieces of plastic grouped together with bacteria, algae and other organic particles to form larger clumps.

The scientists are said to have been surprised to discover that large masses of biopolymers – molecules made by organisms – formed the bulk of the plastic clusters. About eight million tonnes of plastic are thrown into the ocean each year, research shows. Team member Stephen Summers said: “This is a first step towards understanding how nanoplastics interact with natural biopolymers throughout the world’s oceans. “This is very important, as it is at this small scale that much of the world’s biogeochemistry occurs.” The clumps became visible to the naked eye. “The fact that these agglomerates become large enough to see raises concern, as they are likely to be seen as a food source by small marine animals,” he said.

Read more …

Mar 192015
 
 March 19, 2015  Posted by at 7:50 am Finance Tagged with: , , , , , , , , , ,  


NPC Pittsburg Water Heater Co., Washington DC 1920

Why The American Dream Is Unraveling, In 4 Charts (MarketWatch)
Federal Reserve Ends Era Of Historically Low Interest Rates (Guardian)
Fed Indicates Rate Hikes Coming, But Not In April (CNBC)
Fed Opens Door For Rate Hike Even As It Downgrades Economic Outlook (Reuters)
Fed To Markets: No More Promises (Hilsenrath)
Bond Traders to Yellen: You’re Wrong on Oil’s Impact on Economy (Bloomberg)
IMF Considers Greece Its Most Unhelpful Client Ever (Bloomberg)
ECB Prepares For Grexit, Anticipates 95% Loss On Greek Debt (Zero Hedge)
Tsipras Demands EU Stop ‘Unilateral Actions’ As Tensions Flare (Reuters)
Greece Defies EC With Anti-Austerity Law (BBC)
Merkel to Seek Accommodation With Tsipras in Talks (Bloomberg)
At Least 350 People Arrested In Protest At New ECB HQ in Frankfurt (Guardian)
Welcome To London, Where Homes Earn More Than Their Owners (Guardian)
Russia Urges France, Germany To Act On Ukraine’s ‘Glaring Breach’ of Minsk (RT)
The Rage of the Cultural Elites (Yu Shan at Orlov)
Middle East OPEC Oil Rig Count Jumps 14% (EM)
US Oil Inventory Expands Faster Than Expected (Bloomberg)
Renewable Energy: The Most Expensive Policy Disaster in Modern UK History (EM)
Bacteria Programmed To Find Tumours (BBC)

Take heed.

Why The American Dream Is Unraveling, In 4 Charts (MarketWatch)

In “The Adventures of Huckleberry Finn,” the young protagonist gripes about his adopted mother’s efforts to “sivilize” him — particularly at the dinner table, where he observes that each dish is cooked and served separately. “In a barrel of odds and ends it is different;” Finn says. “Things get mixed up, and the juice kind of swaps around, and the things go better.” I thought about that line while reading Robert Putnam’s “Our Kids,” a jarring study of the growing opportunity gap between rich and poor children. America would like to think of itself as Huck’s “barrel of odds and ends,” a kind of democratic stew. But, as Putnam shows, our society is increasingly more like his adopted mother’s meal, with each dish cooked separately and cordoned off into different compartments on the dinner plate.

The upper-middle-class families Putnam profiles separate themselves into affluent suburbs, with separate public schools and social spheres from those of their poorer counterparts. As a result, the poorer children not only face greater hardships, but they also lack good models of what is possible. They are effectively cut off from opportunity. “The most important thing about the experience of being young and poor in America is that these kids are really isolated, and really don’t have close ties with anybody,” Putnam told MarketWatch. “They are completely clueless about the kinds of skills and savvy and connections needed to get ahead.” His analysis shows how family structure, parenting practices, schooling and health habits correlate with diminishing opportunities for poorer children. For instance:

Children of poorer, less educated parents are far more likely to grow up in single-parent homes.

Due to lack of support networks and good models, perhaps, the highest-scoring poor children are less likely to graduate college than the lowest-scoring wealthy children.

Putnam does not fault the wealthier parents for seeking the best for their children. “Perhaps unexpectedly, this is a book without upper-class villains,” he notes. But he makes the case that it’s not only in the moral interest of wealthier families to help improve the prospects of poorer children but also in their own economic interest. The U.S. economy would get a major boost if the opportunity gap were closed, he says. We cannot continue to live in our own bubbles, or compartments on a plate, without consequences, he suggests.

Read more …

Conclusion no. 1.

Federal Reserve Ends Era Of Historically Low Interest Rates (Guardian)

The US Federal Reserve called time on an era of historically low interest rates on Wednesday. In its latest statement on the health of the US economy the central bank moved away from a pledge to be “patient” before deciding to raise interest rates. Economists expect that interest rates could now rise by the end of the summer, the first rise in more than six years. Stock markets, which had fallen ahead of the release, rose on the news as the Fed continued to signal a cautious approach to raising rates. “Just because we have removed the word patient from the statement does not mean we are going to be impatient,” Janet Yellen, chair of the Federal Reserve, said at a press conference.

The Fed said rates would not rise before “further improvement in the labor market” and only when it was confident inflation was moving back to its 2% objective over the medium term. “The committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the committee views as normal in the longer run,” the Fed said in its statement.

The Fed cut its benchmark short-term interest rate to zero on 16 December 2008 and it has remained close to zero ever since. The rock bottom rate policy was part of a massive stimulus programme aimed at revitalising the economy in the wake of the worst recession since the Great Depression. The Fed’s decision comes after months of impressive growth in the jobs market. Last month US unemployment rate fell to 5.5%, down from a peak of 10% in October 2009. Last year was the best year for job growth since the late 1990s.

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No. 2.

Fed Indicates Rate Hikes Coming, But Not In April (CNBC)

The Federal Reserve fired its first warning shot Wednesday that it is going to start hiking interest rates–sometime. As the global investment community focused its attention on the U.S. central bank, the Fed Open Market Committee lived up to expectations: It dropped the word “patient” from its post-meeting statement, an indication, subtle though it may be, that the era of zero interest rates is about to end. But the mostly dovish statement made little fanfare over eliminating the word, and in fact stated specifically that “an increase in the target range for the federal funds rate remains unlikely at the April FOMC meeting,” a phrase missing from previous communiques.

“The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2% objective over the medium term,” the statement said. Stocks quick turned positive, with the Dow up 100 points 5 minutes after the statement was issued. Yields on US 10-year Treasurys fell below 2% for the first time since Feb. 25. The dollar weakened.

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No. 3.

Fed Opens Door For Rate Hike Even As It Downgrades Economic Outlook (Reuters)

The Federal Reserve on Wednesday moved a step closer to a much anticipated first rate hike since 2006 by removing “patient” from its language, although markets bet on a September hike after it downgraded the expected pace of growth and inflation. Stock markets rallied after the Fed statement, while the U.S. 10-year Treasury yield dipped below 2% for the first time since March 2 and the euro rose against the dollar on the more dovish forecasts that appeared to argue against a June move. “This was largely what was expected, though some may have been fearing a more hawkish Fed, and that explains the rally we’re seeing right now, that it didn’t state a precise time for raising rates,” said John Carey at Pioneer Investment.

In its statement following a two-day meeting, the Fed’s policy-setting committee repeated its view that job market conditions had improved. While the statement put a June rate increase on the table it also allowed the Fed enough flexibility to move later in the year, stressing that any decision would depend on incoming data. “The committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2% objective over the medium-term,” the Fed said in its statement. The Fed said a rate increase remained “unlikely” at its April meeting and said its change in rate guidance did not mean the central bank has decided on the timing of a rate hike. It had previously said it would be patient in considering when to bring monetary policy back to normal.

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The Fed’s bullhorn speaks.

Fed To Markets: No More Promises (Hilsenrath)

The Federal Reserve is about to inject uncertainty back into financial markets after spending years trying to calm investors’ nerves with explicit assurances that interest rates would remain low. Ahead of their policy meeting that ends Wednesday, Fed officials have signaled they want to drop the latest iteration in a succession of low-rate promises—a line in their policy statement pledging to be “patient” before deciding to raise rates. The move could be a test for investors. In theory, less-clear-cut interest-rate guidance from the Fed should lead to more volatility in financial markets. That’s because investors will be left less certain about a key variable in every asset-valuation model: the cost of funds.

Christine Lagarde, managing director of the IMF, warned Tuesday that markets could be heading for a repeat of the 2013 “taper tantrum,” in which stocks fell and interest rates rose around the world as the Fed considered winding down its “quantitative easing” bond-buying program. “I am afraid this may not be a one-off episode,” she said of 2013 in a speech at India’s central bank. “The timing of interest-rate liftoff and the pace of subsequent rate increase can still surprise markets.” The central bank for years has been using carefully chosen words about the likely level and direction of short-term rates as policy tool, hoping promises about the future will influence other borrowing costs today, such as the level of long-term rates on mortgages or car loans.

The approach has become particularly important since December 2008, when the Fed pushed its benchmark federal funds rate to zero amid the financial crisis and began promising it would stay there for an extended period. With the labor market healing and inflation expected to move back toward their 2% target, Fed officials hope they’re ready to move on, at least rhetorically. They see this as progress—before they believed the economy was so weak they shouldn’t signal rate increases were anywhere on the horizon. In addition to signaling that the Fed expects to consider raising rates later this year, the move away from a patience promise is part of the central bank’s broader effort to avoid pinning itself down in the future. Fed officials themselves are uncertain about when to start the process of raising rates and want flexibility to respond to new information about how the economy is evolving.

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And then of course oil prices surge after the Fed thingy today.

Bond Traders to Yellen: You’re Wrong on Oil’s Impact on Economy (Bloomberg)

Janet Yellen has dismissed plunging oil values as a fleeting shock to the economy. Bond traders disagree. The latest slump in oil – including a 2% drop Wednesday – has investors dumping their junk-rated energy securities and slashing their predictions for inflation. Energy-related high-yield bonds have tumbled 3.4% this month and dollar-denominated notes that are hedged against accelerating prices have declined 2.1%. Debt investors aren’t waiting to find out whether Federal Reserve Chair Yellen will change her view that the impact from lower oil prices on inflation will be transitory. The 15% plunge in crude prices this month has them repricing the economic outlook years out and paring investments that are most vulnerable to further losses.

“Credit markets have been very keenly focused on oil prices,” said George Bory at Wells Fargo, in a Bloomberg Television interview Tuesday. The ballooning amount of energy-related debt has led investors “to use the credit markets as almost a proxy trade on oil.” The U.S. market for energy-related high-yield bonds has swelled to $201 billion from $65.6 billion at the end of 2007, according to Bank of America Merrill Lynch index data. Bets on oil bonds suggest an ugly outlook for pipeline and exploration companies – and all of the people they employ — after they borrowed record amounts over the past several years.

The extra yield, or spread, investors demand to own the typical junk-rated energy security has more than doubled since June to 7.44%age points above government debt, the Bank of America Merrill Lynch index shows. For context, the spread has averaged 4.82 points since the inception of the data in 1996. Bond markets are suggesting the oil collapse will also spill over into the broader economy. Investors have been selling inflation-linked bonds, causing the $1 trillion U.S. market for the debt to lose $23 billion of market value this month, according to Pimco index data.

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Why make a comment like this, and at this point in time? What kind of game is that?

IMF Considers Greece Its Most Unhelpful Client Ever (Bloomberg)

International Monetary Fund officials told their euro-area colleagues that Greece is the most unhelpful country the organization has dealt with in its 70-year history, according to two people familiar with the talks. In a short and bad-tempered conference call on Tuesday, officials from the IMF, the ECB and the EC complained that Greek officials aren’t adhering to a bailout extension deal reached in February or cooperating with creditors, said the people, who asked not to be identified because the call was private. The IMF’s press office had no immediate comment on the discussions.

German finance officials said trying to persuade the Greek government to draw up a rigorous economic policy program is like riding a dead horse, the people said, while the IMF team said Greece’s attitude to its official creditors was unacceptable. Concern is growing among officials that the recalcitrance of Prime Minister Alexis Tsipras’s government may end up forcing Greece out of the euro, as the cash-strapped country refuses to take the action needed to trigger more financial support. Tsipras is pinning his hopes for a breakthrough on a meeting with ECB President Mario Draghi, German Chancellor Angela Merkel, French President Francois Hollande and European Commission head Jean-Claude Juncker this week in Brussels.

“These are difficult talks,” Merkel told her parliamentary group Tuesday about the negotiations with Greece, according to two participants. She said that the outcome of the talks is completely open, according to the two. The Greek government is seeking a political deal at a EU summit starting Thursday to unlock funds from the country’s €240 billion bailout package, government spokesman Gabriel Sakellaridis said. “After one-and-a-half months of contact, we believe that for there to be a political solution, it is important for the euro-area’s big countries to weigh in,” Sakellaridis said. “We’re not downplaying technical discussions, but we want there to be a framework, and for that we’re asking for a political solution.” Sakellaridis didn’t respond to a request for comment on the Tuesday conference call.

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“while the ECB is making it very clear what happens next in the case of a “Graccident”, it has yet to provide an explanation how it will resolve the billions of Greek debt held on its own balance sheet which are about to be “marked-to-default.”

ECB Prepares For Grexit, Anticipates 95% Loss On Greek Debt (Zero Hedge)

..when the ECB “leaks” that it is modelling a Grexit, something Draghi lied about over and over in 2012 and directly in our face too, take it seriously, because it is time to start planning about what happens on “the day after.” And incidentally to all those curious what the fair value of peripheral European bonds is excluding ECB backstops, the ECB has a handy back of the envelope calculation: a 95% loss. Which also is the punchline, because while the ECB is making it very clear what happens next in the case of a “Graccident”, it has yet to provide an explanation how it will resolve the billions of Greek debt held on its own balance sheet which are about to be “marked-to-default”… … and on which it is prohibited from suffering a loss, or else Draghi will have to fabricate even more on the run rules about how the ECB balance sheet is loss-proof… expect in this case, or that, or the other. From Manager Magazin, google-translated:

The European Central Bank (ECB) is preparing for a possible Greek exit from the euro zone. In internal model calculations, the central bank has already calculated the consequences of different scenarios on the prices of Greek government bonds. Fernando González Miranda, head of risk analysis of the ECB, assumed for his model calculations three different developments of the Greek crisis, the magazine reports. These variants have also been presented to our colleagues from the Bundesbank few days ago. Under this method, the value of Greek government debt – currently around €320 billion – in the event of a sudden, “accident-like” Farewell to the Greeks from the Euro-zone (“Graccident”) shrink to around 5% of the principal amount.

If it were the Greek Government, however, to complete the withdrawal on the basis of ordered negotiations (“Grexit”), the ECB expects a residual value of government bonds by nearly 14%. And should it even create the country to negotiate a recent haircut, without having to give up the single currency, the government securities could keep at least a quarter of its original value. A central bankers feared compared with manager magazin especially the “Graccident”. The risk is high that the Greek government members “lose track and suddenly unable to settle their bills.” In such a case, the rating agencies Greece would classify as necessarily insolvent, with the result that the central bank should have stopped emergency loans.

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“If they’re doing it to frighten us, the answer is: we will not be frightened..”

Tsipras Demands EU Stop ‘Unilateral Actions’ As Tensions Flare (Reuters)

Greek Prime Minister Alexis Tsipras lambasted European partners on Wednesday for criticizing a new anti-poverty law hours before it is voted on, saying it was the euro zone rather than Athens that must stop “unilateral actions” and keep its word. Tsipras’s impassioned speech to parliament as it prepared to vote on his government’s first bill marked the latest escalation in a war of words between Athens and its creditors that has raised the risk of a Greek bankruptcy and euro zone exit. European Council President Donald Tusk called a meeting on Greece for Thursday evening at Tsipras’ request on the sidelines of an EU summit with the leaders of Germany, France, the ECB, the EC and the chairman of euro zone finance ministers.

The leftist Greek leader is pressing for a political decision to break Greece’s cash crunch, while the creditors have insisted Athens must first start implementing previously agreed economic reforms and hold detailed talks on its financial plans. Tensions over Greek flip-flopping on the terms of a bailout extension agreed last month flared again after an EU official wrote to Athens urging more talks with lenders on the bill before the vote. The letter told Tsipras’s leftist government to hold further talks with the EU on the bill or risk “proceeding unilaterally” against the terms of a Feb. 20 accord that extended the bailout and staved off a Greek banking collapse. European Economics Commissioner Pierre Moscovici denied the EU was trying to stop Athens from passing the law but that the official had been correct to remind the Greek government to consult with lenders first.

“The European Union as a whole wants Greece in the eurozone,” Moscovici said, but added that the February deal must be respected. “Greece must stay in the euro zone… but at these conditions.” An indignant Tsipras defended the so-called “humanitarian crisis” law – which offers food stamps and free electricity to the poor – as the first bill in five years drawn up in Athens rather than ordered by EU technocrats. “If they’re doing it to frighten us, the answer is: we will not be frightened,” Tsipras told parliament. “The Greek government is determined to stick to the Feb. 20 agreement. However, we demand the same from our partners. Let them stop unilateral actions, respecting the agreement they signed.”

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Over a measly €200 million, strictly targeted at poverty relief, the EU is going to be difficult?

Greece Defies EC With Anti-Austerity Law (BBC)

The Greek parliament has approved a package of social measures, despite warnings from the European Commission against “proceeding unilaterally”. In parliament, the Greek Prime Minister Alexis Tsipras defended what he called a “humanitarian crisis” law. The law – the first to be introduced since Mr Tsipras’s party won elections in January – offers food stamps and free electricity to the very poorest. The total amount of assistance is worth about €200m. It is the kind of anti-austerity measure that Mr Tsipras had promised before his election victory in January. In a 30-minute speech he defended the legislation, which he described as the first bill in five years to be drawn up in Athens, rather than ordered by EU technocrats. He also criticised a leaked letter from an EU official, which had advised Greece to consult with its international creditors before proceeding with the legislation.

“If they’re doing it to frighten us, the answer is: we will not be frightened,” Mr Tsipras told parliament. “What else can one say to those who have the audacity to say that dealing with a humanitarian crisis is a ‘unilateral action’?” The new law, and Mr Tsipras’s defiant speech, come ahead of an expected meeting with Angela Merkel and Francois Hollande on the sidelines of an EU summit in Brussels this week. Greece is still in dispute with its international creditors about the terms of an extension to its huge financial bailout, with the eurozone demanding that Athens commit to spending cuts to release further loans. Relations between Brussels and Athens have soured dramatically. With Greece currently shut out of debt markets, concerns have been expressed that the country could soon run out of money.

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At the very least too high-handed. She should have invited Tsipras on day one.

Merkel to Seek Accommodation With Tsipras in Talks (Bloomberg)

German Chancellor Angela Merkel will seek accommodation in talks with Greek Prime Minister Alexis Tsipras to calm the increasingly combative rhetoric between the nations and regain control over efforts to keep Greece in the euro. Merkel, as leader of the biggest contributor to Greece’s €240 billion bailout, is willing to go a long way to find a compromise, said a German official with knowledge of her thinking, who asked not to be identified discussing internal strategy. Nonetheless, she’ll tell Tsipras during meetings in Brussels and Berlin over the next five days that she expects Greece to play by the rules, the person said. After weeks of sparring between Greece and Germany, Merkel is pursuing the talks now to try and get the discussion back on track, the official said.

Any suggestion that she will deliver an ultimatum to Tsipras is complete nonsense and propagated by those who want to inflame the standoff, the official said. Merkel sees the meetings with Tsipras as more of a chance to get to know him, and doesn’t plan to directly negotiate the details of Greece’s fate, which she sees as a matter between Athens and its creditors, the official said. Her room for leeway on Greece is in any case limited by resistance from within her own parliamentary group, according to the official. Merkel is convinced that now is the “right time to hold extensive talks,” Steffen Seibert, her chief spokesman, said Wednesday in Berlin. “The talks will be about the situation between Greece and the other members of the euro area and how a way forward can be achieved.”

Tsipras is pinning his hopes to reach a breakthrough on a meeting he’s requested with Merkel, ECB President Mario Draghi, French President Francois Hollande and European Commission head Jean-Claude Juncker on the sidelines of a European Union summit that starts Thursday. Merkel has also invited Tsipras to Berlin March 23 for one-on-one talks. The two nations have been locked in acrimonious exchanges in recent weeks over the continuation of Greece’s austerity program and whether Germany should pay additional reparations for the Nazi occupation of the country during World War II. “Many Greek people falsely believe that what is at stake is not Greece’s very problematic economic performance and the European Union’s mismanagement of the euro-zone crisis but a dispute between Greece and Germany,” said Dimitris Sotiropoulos at the University of Athens.

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The ECB is occupied by idiots.

At Least 350 People Arrested In Protest At New ECB HQ in Frankfurt (Guardian)

Dozens of police officers have been injured and hundreds of people detained after anti-austerity protesters clashed with riot police near the new headquarters of the ECB in Frankfurt. At least seven police cars were set on fire as streets were barricaded at the “Blockupy” demonstration to mark the opening of the €1.3 billion building on Wednesday morning. Some protesters said they were injured when police used pepper spray. At least 350 people were held by police, according to the German news site Deutsche Welle. Police used water cannon to try to make a path through the mass of black-clad protesters to the entrance of the building. The new building was targeted because the ECB has come to symbolise spending cuts and market reforms of the kind being forced on Greece.

The German justice minister, Heiko Maas, said that “everyone has the right to criticise institutions like the ECB. But pure rioting goes beyond all limits in the battle for political opinion.” Hundreds of officers ringed the ECB. The inauguration ceremony took place as planned, with the ECB president, Mario Draghi, thanking guests “for being here despite the difficult situation outside”. He said the new headquarters for the currency union’s central bank was “a symbol of what Europe can achieve together”. “European unity is being strained,” Draghi said, according to an advance text quoted by Reuters. “People are going through very difficult times. There are some, like many of the protesters outside today, who believe the problem is that Europe is doing too little. “But the euro area is not a political union of the sort where some countries permanently pay for others.”

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“Average prices there have gone up nearly £200,000 over the past two years..”

Welcome To London, Where Homes Earn More Than Their Owners (Guardian)

Homes have earned more than their homeowners for the past two years in one in five local authorities – almost exclusively in London and the south-east – according to analysis by Halifax. The London borough of Hammersmith and Fulham has seen the biggest explosion in house prices relative to pay, Halifax said. Average prices there have gone up nearly £200,000 over the past two years, while households in the area have had median earnings totalling £56,698 over the same period. Hammersmith is one of just two areas where houses have earned more than their occupants for the past 10 years. The other is Hackney, another London borough.

The figures reveal a deep north-south divide. Of the 73 local authority areas where homes have earned more than their owners over the past two years, 68 are in London, the south-east or the east. The Cotswolds and the Leicestershire areas of Melton and Harborough were the best “performers” outside of the south. Islington in London tops the table for house prices versus earnings over five years. Householders in the borough typically earned £135,457 in the five years from 2010-2014. Meanwhile, the average home in Islington soared in price by £258,498.

Every one of the 23 local authority areas where homes outstripped homeowner incomes over the past five years were in London and the south-east. Outside of the capital, Elmbridge and Mole Valley in Surrey, and South Buckinghamshire are areas where homes have earned more than their owners. Halifax acknowledged that the huge house price gains have benefitted some, but left others struggling. “This is good news for some homeowners. At the same time, it is challenging news for many looking to buy their first home in such areas, with prices being pushed out of range for many young people,” said Halifax housing economist Martin Ellis.

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“Immediately after the withdrawal of heavy weapons, a dialogue on the modalities of the election in the respective regions of Donetsk and Lugansk was supposed to begin,” Lavrov said. The modality of the elections, in line with the Minsk agreements, must be in accord with Donetsk and Lugansk. Nobody even tried to do it.”

Russia Urges France, Germany To Act On Ukraine’s ‘Glaring Breach’ of Minsk (RT)

Moscow has called on Berlin and Paris to take action in regards to Kiev’s non-compliance with the Minsk peace agreement, in what Russia’s Foreign Minister has called a “glaring breach of the first steps of the Minsk package.” “I don’t know how the political process will unfold now,” Lavrov told a news conference on Wednesday. “Yesterday I sent special notes to the foreign ministers of France and Germany, and drew their attention to the glaring breach of the first steps of the political part of the Minsk package by Kiev. I urged them to take a trilateral joint demarche in regards to our Ukrainian colleagues in order to encourage them to implement agreements which they signed, and what was supported by the leaders of Germany, France, Russia and Ukraine.”

Kiev didn’t even take an effort in an attempt to start dialogue with the self-proclaimed republics of Donetsk and Lugansk on the modalities of elections there, Lavrov said after negotiations with his Gabonese counterpart, Emmanuel Issoze-Ngondet. At the OSCE Permanent Council session on Thursday Russia is set to raise the question of the violation of the Minsk agreements when adopting laws on Donbass, RIA Novosti reported. “Immediately after the withdrawal of heavy weapons, a dialogue on the modalities of the election in the respective regions of Donetsk and Lugansk was supposed to begin,” Lavrov said. The modality of the elections, in line with the Minsk agreements, must be in accord with Donetsk and Lugansk. Nobody even tried to do it.” On Tuesday, the Ukrainian parliament, the Verkhovna Rada, failed to introduce a special order of government in Donbass until the elections are held there in accordance with Ukrainian laws.

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“..sharing the need for frenzied spectacles of mass humiliation and destruction.”

The Rage of the Cultural Elites (Yu Shan at Orlov)

A certain unhappy incident happened to my aunt in the summer of 1966. The Cultural Revolution a political movement initiated by Mao Zedong was beginning to engulf the country. That same year many American college students were protesting against the Vietnam War and Leonid Brezhnev was keeping his seat warm as the General Secretary of CPSU, having replaced the somewhat volatile Nikita Khrushchev two years earlier. My aunt was then a freshman studying literature at Fudan University in Shanghai. It so happened that my aunt, then a sensitive and somewhat dreamy young woman, had stubbornly and haplessly clung to certain musical tastes which at that time in China came to be regarded as politically incorrect, being said, in the trendy ideological jargon of that time, to reflect decadent bourgeois revisionist aesthetics.

To wit, my aunt had kept in her record collection a rendition of The Urals Mountain-Ash, a Russian folk song in which a young girl meets two nice boys under a mountain-ash tree and must choose between them, performed by the National Choir of the Ukrainian Soviet Socialist Republic. It was an old-style LP spinning at 78 RPM. It had a red emblem in the middle emblazoned with CCCP. One of my aunt’s roommates, who probably had always resented her for one reason or another, found out about it and reported her to the authorities. For this rather serious infraction, student members of the Red Guard made my aunt publicly smash her beloved record, then kneel upon the fragments and recite an apology to Chairman Mao while fellow-students threw trash at her face shouting Down with Soviet revisionists!

This generation of Chinese young people, who once donned Red Guard uniforms, beat people up around the country and smashed various cultural artifacts, is now mostly living on government pensions or earning meagre profits from home businesses, but some have prospered and can be found among the upper crust of contemporary China’s business, cultural, and political elites. This episode came to my mind when in the summer of 2014 I came upon video clips of Ukrainian student activists storming university classrooms in mid-lecture and ordering everyone to stand up and sing the Ukrainian national anthem, then forcing the professor to apologize for the lecture not being adequately patriotic. There were also ghastly spectacles of Enemies of the People (guilty only of having served under the overthrown president Yanukovich) being paraded around in trash bins.

In Ukrainian schools, children were made to jump up and down, and told that ‘Whoever doesn’t jump is a Moscal’ (a derogatory term for Russian ). Add to this the destruction of public monuments to World War II and the ridiculous rewriting of history (turns out that, during World War II, Germany liberated Ukraine, but then Russia invaded and occupied Germany!) and a complete picture emerges: the Ukrainian Maidan movement is one of a species of cultural revolution. The new, fashionable term being thrown around is civilizational pivot, but it and the old cultural revolution can be understood as approximate synonyms, sharing the need for frenzied spectacles of mass humiliation and destruction.

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Wow…

Middle East OPEC Oil Rig Count Jumps 14% (EM)

As if to rub salt in the wounds of the US shale industry, Middle East OPEC oil rig count has jumped by 19 rigs to 155 units in February 2015 setting a new rig count record for the region. Since 2005 the supergiant oil fields of the region developed symptoms of mortality and increased drilling has been required to combat natural production declines in order to maintain production at static levels. More on international and US rig counts below the fold.

Figure 1 Middle East OPEC oil rig count for Saudi Arabia, UAE, Kuwait and Qatar. Baker Hughes is not reporting data for Iran and activity in Iraq is affected by ongoing conflict. While the rest of the world is heading for the drilling exits these four Middle East countries are preparing to expand market share. All data from Baker Hughes.

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Count me not surprised.

US Oil Inventory Expands Faster Than Expected (Bloomberg)

America has raised the roof again. That’s what the roofs of oil storage tanks do – they rise and fall depending on the volume of oil inside. And America’s oil in storage just hit a new record after surging for the 10th consecutive week. Stockpiles rose 9.6 million barrels, or 2.1%, to 458.5 million barrels last week, the EIA reported today. Analysts had expected an increase of 4.4 million barrels. The amount of oil the U.S. is cranking out also rose, for the sixth consecutive week, to a rate of 9.42 million barrels a day. Oil investors have been glued to the levels of storage tanks, which have been climbing steadily since the oil-price crash started last year. American stockpiles are more than 25% above their five-year average.

Inventories aren’t likely to max out, but even the possibility of that happening is adding pressure to an oversupplied oil market. U.S. inventories will probably continue to rise for the next few months, as refineries conduct seasonal maintenance and investors hold out for higher prices, according to Bloomberg Intelligence. In addition to traditional storage in tanks represented in today’s numbers, drillers have left thousands of nearly finished wells untapped in what’s become de facto storage, sometimes known as the fracklog. Prices are low, storage is filling up, and oil-drilling rigs are being idled at an unprecedented rate. But the U.S. oil boom hasn’t slowed yet.

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Make of it what you will…

Renewable Energy: The Most Expensive Policy Disaster in Modern UK History (EM)

In a new report ‘Central Planning with Market Features: How Renewable Subsidies Destroyed The UK Electricity Market’, published by the Centre for Policy Studies on Wednesday 18 March, Rupert Darwall shows that recent energy policy represents the biggest expansion of state power since the nationalisations of the 1940s and 1950s – and is on course to be the most expensive domestic policy disaster in modern British history.

Darwall shows that:
• The electricity sector is being transformed into a vast, ramshackle Public Private Partnership, an outcome that promises the worst of both worlds – state control of investment funded by high cost private sector capital, with energy companies being set up as the fall guys to take the rap for higher electricity bills.
• Post-privatisation gains in productivity are now being reversed as a result of plunging labour productivity. By 2013, three quarters of the productivity gains recorded between 1994 and 2004 had been lost.
• Competition between electricity suppliers is an expensive sideshow (which Ofgem estimated cost £730m in 2008) if it does not drive competition between generators and market investment in the most efficient generating technologies.
• Government policies aim to hide the full costs of intermittent renewables, which as a result are systematically understated. In addition to their higher plant-level costs, renewables require massive amounts of extra generating capacity to provide cover for intermittent generation when the wind doesn’t blow and the sun doesn’t shine.
• Highly subsidised wind and solar capacity flooding the market with near random amounts of zero marginal cost electricity wrecks the economics of conventional power stations. It is therefore impossible to integrate large amounts of intermittent renewables into a private sector system and still expect it to function as such.
• As a result, the State has stepped in with a patchwork of interventions to support prices. Because revenues are dependent on continued government interventions, private investors end up having to price and manage political risk, imparting a further upwards twist to electricity bills.
• Without renewables, the UK market would require 22GW of new capacity to replace old coal and nuclear. With renewables, 50GW is required, i.e. 28GW more to deal with the intermittency problem. Then there are extra grid costs to connect both remote onshore wind farms (£8 billion) and even more costly offshore capacity (£15 billion) – a near trebling of grid costs.

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And dogs..

Bacteria Programmed To Find Tumours (BBC)

Bacteria programmed to spot tumours in the liver have been shown off at the Ted (Technology, Entertainment and Design) conference in Vancouver. Tal Danino, a researcher at MIT, described how he programmed the bacteria with genetic code. The system could be developed to identify other cancers, he said. So far the research has only been tested on mice. The results will be published in Science Translational Medicine. The mice are fed pre-programmed probiotic bacteria – a similar type to that found in some health-promoting yogurts. The bacteria produce enzymes when they encounter a tumour which will, in turn, change the colour of urine. So far, the system has proved accurate at detecting liver cancer. “Liver cancer is hard to detect, and there really is a need for new technology to help spot it,” Mr Danino told the BBC ahead of his talk.

Worldwide, liver was the second most lethal cancer in 2012, resulting in 745,000 deaths, according to the World Health Organization (WHO). Mr Danino was the first of 21 Ted fellows – young researchers engaged in cutting-edge work – chosen each year by the non-profit Ted organisation. Their five-minute speeches kick off the conference which, for the second year running, is being hosted in Canada. “There are more bacteria in the body than there are stars in the galaxy,” Mr Danino told the Ted audience. “It is a fascinating universe in our body and we can now program bacteria like we program computers.” But the intersection between biology and computer is still at a “very early stage”, he said. “We don’t know what the exact impact will be,” he told the BBC.

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