Feb 232019
 


Henri Rousseau The sleeping gypsy 1897

 

A Fed Pivot, Born Of Volatility, Missteps, And New Economic Reality (R.)
Get Out Of The Bond And Stock Market, Put Your Money In Cash – Stockman (MW)
Global Sovereign Debt Will Top $50 Trillion This Year (ZH)
Mueller Won’t Deliver Report To DOJ Next Week (Hill)
Schiffting to Phase 2 of Collusion (Strassel)
‘Even Nixon Wasn’t Like Him’: Trump’s Bid To Upend Russia Inquiry (G.)
Great Investigations (Kunstler)
Theresa May Must Go In Three Months, Cabinet Ministers Say (G.)
UK Food Imports From EU Face ‘£9bn Tariff Bill’ Under No-Deal Brexit (G.)
Dianne Feinstein Snaps At Group Of Environmental Activist Children (ZH)
The Cold War in Tech (Barron’s)
Silicon Valley Wants In On It Pair Of Gene-Edited Chinese Twins (ZH)
China Blocks 17.5 Million Plane Tickets Due to Lack of ‘Social Credit’ (Ind.)

 

 

The folly of our times. The Fed has completely destroyed America’s market system, and thus its economy, and they are treated as wise men. There are no markets left, there are no pensions left, there’s only the Fed.

A Fed Pivot, Born Of Volatility, Missteps, And New Economic Reality (R.)

The Federal Reserve’s promise in January to be “patient” about further interest rate hikes, putting a three-year-old process of policy tightening on hold, calmed markets after weeks of turmoil that wiped out trillions of dollars of household wealth. But interviews with more than half a dozen policymakers and others close to the process suggest it also marked a more fundamental shift that could define Chairman Jerome Powell’s tenure as the point where the Fed first fully embraced a world of stubbornly weak inflation, perennially slower growth and permanently lower interest rates. Along with Powell’s public comments, Fed minutes, and other documents, the picture emerges of a central bank edging towards a period of potentially difficult change as it reviews how to do business in light of that new reality.

[..] Concern that years of solid economic growth and falling unemployment would inevitably rekindle inflation or threaten financial stability have been a staple of Fed debates, but had largely disappeared by the Fed’s Dec. 18-19 meeting, according to a review of Fed meeting minutes and officials’ public statements. It was a conclusion hiding in plain sight. After a year when the Trump administration pumped around $1.5 trillion of tax cuts and public spending into a full employment economy, the Fed in 2018 would miss its 2 percent inflation target yet again.

“I hate to say we were right,” Dallas Federal Reserve president Robert Kaplan told reporters on Jan. 15 in Dallas. “But we have been warning for quite some time that…the structure of the economy has changed dramatically.” Technological innovation, globalization, and the Fed’s commitment to its inflation target all held down prices, and “those forces are powerful and they are accelerating,” he said.

Read more …

Dave Stockman, too, keeps referring to markets. Stop it. A market has a definition, a function, based one-on-one on price discovery. And that simply ceased to exist.

Get Out Of The Bond And Stock Market, Put Your Money In Cash – Stockman (MW)

[..] thus far the market has bounded higher after shaking off a withering decline toward the end of 2018 that culminated in the worst Christmas Eve drop on record. The Dow Jones Industrial Average is up 19.4% since that time, breaking above a psychologically significant at 26,000 level on Friday, while the S&P 500 has advanced 19.5%, the Nasdaq Composite has risen 22.4% and the small-capitalization focused Russell 2000 index has returned more than 25%, according to FactSet data. Much of that gain has been underpinned by a Fed that has signaled that it is likely to slow a reduction of its $4 trillion balance sheet as soon as this year and a willingness to wait before increasing borrowing costs further. Both of those plans had been cited as a source of friction for markets.

However, Stockman has said a yawning deficit and an economic expansion in the U.S. that is making history for its length are signs that a reckoning my be at hand. He says easy-money days cannot last and has ramifications for all, arguing that the Fed must normalize its policy, at some point: “My point is, it’s finally catching up with us. We’ve gotten by with this for 30 years ‘cause the Fed has been monetizing the debt — buying bonds hand over fist. When Greenspan arrived, the balance sheet of the Fed was $200 billion; at the peak it was $4.5 trillion,” he told Cavuto, referring to former Fed boss Alan Greenspan. “We need to wake up and smell the roses here. We’re in year 10 of the longest business expansion in history.

We’re increasing the deficit at the very wrong time. They say it’s $900 billion this year it’ll be $1.2 trillion of borrowing at the same time that the Fed is beginning to shrink its balance sheet, which means they’ll be dumping bonds into the market,” he said.

Read more …

All that new debt and still pension systems are being fully gutted.

Global Sovereign Debt Will Top $50 Trillion This Year (ZH)

It has been one week since the US Treasury revealed that the national debt had topped $22 trillion (only 11 months after it had topped the $21 trillion threshold). And as the US budget deficit shows no signs of shrinking thanks to the Trump tax cuts and the death of the Obama-era budget sequester that has allowed for an expansion of federal spending (with more presumably on the way once the Trump infrastructure plan comes into focus), S&P warned on Thursday that worldwide sovereign debt could reach $50 trillion this year. According to Reuters, S&P predicted that governments will borrow some $7.78 trillion this year, up 3.2% since 2018 (the US will constitute more than $1 trillion of that all by itself). That’s a 6% increase in the total debt pile from the year before.

Most of this borrowing will be rolling over long-term debt. “Some 70 percent, or $5.5 trillion, of sovereigns’ gross borrowing will be to refinance maturing long-term debt, resulting in an estimated net borrowing requirement of about $2.3 trillion, or 2.6 percent of the GDP of rated sovereigns,” said S&P Global Ratings credit analyst Karen Vartapetov. Governments, like corporations and individuals, took advantage of low interest rates around the world to step up borrowing in the wake of the financial crisis. Now, with borrowing costs expected to rise, these long-term burdens will become more burdensome to service. And with central banks slowly beginning to allow their inflated balance sheets to run off…

Read more …

No collusion.

Mueller Won’t Deliver Report To DOJ Next Week (Hill)

Special counsel Robert Mueller will not deliver his report to the Justice Department on Friday or next week, a Justice Department official told The Hill. The news comes amid broad speculation that Mueller’s probe into Russia’s electoral interference is wrapping up, with several news outlets reporting Wednesday that newly confirmed Attorney General William Barr was preparing to receive Mueller’s final report as soon as next week. The highly anticipated report is expected to cap off a sprawling, nearly two-year investigation into Russia’s attempts to meddle in the 2016 presidential election, a probe that has ensnared multiple former Trump campaign officials and associates.

Next week is already slated to be a busy week in Washington, with former longtime Trump lawyer Michael Cohen appearing for testimony on Capitol Hill and several other major hearings and votes set to take place. President Trump is also slated to travel to Vietnam next week for his second summit with North Korean leader Kim Jong Un, which is scheduled for Wednesday and Thursday. It remains unclear when Mueller will ultimately wrap up and submit his final documentation, though Friday’s news indicates the end of the investigation is at least a week away.

Mueller has been investigating Russian interference and potential coordination between the Trump campaign and Moscow since May 2017, weathering constant attacks from Trump, who views the investigation as a “witch hunt” and has long denied allegations of collusion between his campaign and the Kremlin. In the course of his investigation, Mueller has unveiled charges against more than two dozen Russians for hacking Democratic emails and committing fraud in an elaborate plot to use social media to meddle in the election. The special counsel has also charged six Trump associates with making false statements, illegal foreign lobbying, financial violations and other crimes. However, none of the charges have alleged a conspiracy between the campaign and the Russians to interfere in the election.

Read more …

“No acknowledgment that Mr. Schiff & Co. for years have pushed fake stories that accused innocent men and women of being Russian agents. No relieved hope that the country might finally put this behind us. Just a smooth transition—using Russia as a hook—into Mr. Trump’s finances. Mueller who?”

Schiffting to Phase 2 of Collusion (Strassel)

There’s been no more reliable regurgitator of fantastical Trump-Russia collusion theories than Democratic Rep. Adam Schiff. So when the House Intelligence Committee chairman sits down to describe a “new phase” of the Trump investigation, pay attention. These are the fever swamps into which we will descend after Robert Mueller’s probe. The collusionists need a “new phase” as signs grow that the special counsel won’t help realize their reveries of a Donald Trump takedown. They had said Mr. Mueller would provide all the answers. Now that it seems they won’t like his answers, Democrats and media insist that any report will likely prove “anticlimactic” and “inconclusive.” “This is merely the end of Chapter 1,” said Renato Mariotti, a CNN legal “analyst.”

Mr. Schiff turned this week to a dependable scribe—the Washington Post’s David Ignatius—to lay out the next chapter of the penny dreadful. Mr. Ignatius was the original conduit for the leak about former national security adviser Mike Flynn’s conversations with a Russian ambassador, and the far-fetched claims that Mr. Flynn had violated the Logan Act of 1799. Mr. Schiff has now dictated to Mr. Ignatius a whole new collusion theory. Forget Carter Page, Paul Manafort, George Papadopoulos—whoever. The real Trump-Russia canoodling rests in “Trump’s finances.” The future president was “doing business with Russia” and “seeking Kremlin help.”

So, no apologies. No acknowledgment that Mr. Schiff & Co. for years have pushed fake stories that accused innocent men and women of being Russian agents. No relieved hope that the country might finally put this behind us. Just a smooth transition—using Russia as a hook—into Mr. Trump’s finances. Mueller who? What’s mind-boggling is that reporters would continue to take Mr. Schiff seriously, given his extraordinary record of incorrect and misleading pronouncements. This is the man who, on March 22, 2017, helped launch full-blown hysteria when he said on “Meet the Press” that his committee already had the goods on Trump-Russia collusion. “I can’t go into the particulars, but there is more than circumstantial evidence now,” Mr. Schiff declared then. Almost two years later, he’s provided no such evidence and stopped making the claim..

Read more …

Perhaps even more than politicians, it’s the media that will keep the collusion tale alive. They wouldn’t know how to make money anymore if they didn’t.

‘Even Nixon Wasn’t Like Him’: Trump’s Bid To Upend Russia Inquiry (G.)

It was yet another bombshell report for a president already ensnared in multiple investigations against his campaign, administration and family members. This time it had to do with hush money paid to women to silence them from speaking about alleged affairs they had with Donald Trump. According to a New York Times report published this week, Trump asked Matthew Whitaker, his controversial acting attorney general, if he could install a loyalist at the helm of the investigation into the hush money.

Although Whitaker declined Trump’s request, the story has raised fresh questions over whether the president was seeking to obstruct justice and how the reported move fits into a broad pattern of Trump attempting to interfere with an investigation concerning himself. Since taking office, Trump’s fixation on the federal inquiry into Russian interference in the 2016 election – and potential collusion between his campaign and Moscow – has spurred a series of actions that could now imperil his presidency and prospects of a second term.

From high-level firings to public misstatements, Trump’s repeated steps to undermine the investigations that have clouded his two years in office paint a picture of a president who is his own worst enemy, legal experts say. “It is quite clear from all the evidence that the president has had the intent to obstruct this investigation,” said Andy Wright, a former associate counsel to Barack Obama and the founding editor of the legal blog Just Security. “It’s been in plain sight.” “It’s a fundamental abuse of power for the president to be trying to shut down an investigation in which he has a personal stake – both as a potential target himself and his political allies and family members,” he added.

Read more …

Jim stays on message. I changed the headline from Great Expectations to Great Investigations.

Great Investigations (Kunstler)

Meanwhile, their antics may be eclipsed by the now inevitable inquiry around the misdeeds carried out by public officials in Act I of the show: the Russia Collusion Ruse. Based just on the current Andy McCabe book tour, there will be an awful lot to get to, and it is liable to be far more compelling than the nonsense conjured up by the Three Stooges. Mr. McCabe, in his quest to hand off the hot potato of culpability to his former colleagues, and to sell enough books to pay his lawyers’ retainers, has neatly laid out the case for his orchestrating a coup d’etat within the FBI. It’s an ugly story, and it’s all out there now, like so much spaghetti hurled against the wall, and it won’t be ignored.

There are many other spaghetti wads already plastered on that wall ranging from Hillary Clinton’s Fusion GPS hijinks, to Loretta Lynch’s written assurances to the Clinton campaign that the email server matter would be dropped, to the rather complete failure of the FISA process, and much much more that needs to be ventilated in a court of law. I suspect that Barack Obama and his White House confidents will enter the picture, too, sooner later, and to the great dismay of his partisans who do not want to see his legacy tarnished. Whatever your view of all these dark events, it would be pretty awful for the country to have to see him in a witness chair, but it may be unavoidable. Ditto Hillary, who is liable to go all Captain Queeg-y when she finally has to answer for her campaign’s turpitudes.

Read more …

Can both major parties in Britain dissolve in just 4 weeks time?

Theresa May Must Go In Three Months, Cabinet Ministers Say (G.)

Cabinet ministers will make it clear they believe Theresa May should step down after the local elections in May and allow a new leader to deliver the next phase of the Brexit negotiations, the Guardian understands.Senior figures in government have suggested they want the prime minister to leave shortly after the first phase of the Brexit negotiations finishes – or risk being defeated in a vote of no confidence at the end of the year. May wants to stay in place for long enough after Brexit to secure a political legacy beyond the fraught negotiations. But some ministers believe she should announce the timeline for her departure “on a high” after the local election results, paving the way for a Conservative leadership contest over the summer.

Brexiters in the cabinet are keen to see a new leader take over for the next stage of the negotiations with the EU, which May has already pledged will involve more active involvement for politicians rather than advisers. The hardening mood among cabinet ministers on the timeline for her departure will place further pressure on May before a critical week of Brexit talks and votes amid a febrile climate in Westminster. On Thursday the Guardian revealed that remainer ministers emboldened by the departure of three MPs to the Independent Group (TIG) were threatening to rebel against her leadership to prevent a no-deal outcome – daring her to sack them.

And in a fresh blow to May, three cabinet ministers publicly say they would back moves to delay Brexit if she fails to get her deal through parliament. In a joint newspaper article, Amber Rudd, the work and pensions secretary, David Gauke, the justice minister, and the business secretary, Greg Clark, say they want to ensure the UK does not crash out of the EU without a deal on 29 March. And they insist they are prepared to defy the prime minister and join those MPs pushing for an extension to article 50 if there is no significant progress next week.

Writing for the Daily Mail on Saturday, they argue that a no-deal Brexit would wreck the country’s economy and put its security at risk. “If there is no breakthrough in the coming week, the balance of opinion in parliament is clear – that it would be better to seek to extend article 50 and delay our date of departure rather than crash out of the European Union on 29 March,” they write. “It is time that many of our Conservative parliamentary colleagues in the ERG recognised that parliament will stop a disastrous no-deal Brexit on 29 March. If that happens, they will have no one to blame but themselves for delaying Brexit.”

Read more …

Both May and Brussels appear to think they stand to gain from a no-deal Brexit. Maybe that makes it more likely than we think.

UK Food Imports From EU Face ‘£9bn Tariff Bill’ Under No-Deal Brexit (G.)

The government is expected next week to spell out its plan to mitigate a potential £9bn food-price shock from a no-deal Brexit, as analysts predict the cost of staples such as beef, cheddar cheese and tomatoes could soar. With just over a month until the Brexit deadline, the Department for International Trade is expected on Monday to publish a list of new import taxes, or tariffs, that will apply to 5200 products, including food and clothing, should the UK crash out of the EU without a deal. The relationship with the EU is key to the price of food because nearly one third of the food eaten in the UK comes from the bloc. At this time of year the situation is more acute because, with UK produce out of season, 90% of lettuces, 80% of tomatoes and 70% of soft fruit is sourced from, or via, the EU.

“Food and drink tariff rates will be higher than those in any other supply chain,” says Richard Lim, chief executive of consultancy firm Retail Economics. “All stages within the food supply chain will experience increased costs, with retailers hit disproportionately as processed goods attract higher duties than raw materials and semi-processed goods.” In 2017 the UK bought about £34bn of groceries from the EU, which arrived on supermarket shelves and at factory gates without being hit by customs duties or other trade costs. But if the UK leaves the EU without a deal, both will fall back on the World Trade Organisation’s “most favoured nation” tariffs, which means they must pay import duties on each other’s trade. On that basis the UK’s 2017 EU food imports would come with a hefty £9.3bn tariff bill on top, according to Retail Economics’s analysis.

Read more …

Having been there for 30 years is not exactly a positive thing, given how much things have deteriorated in that time. Hand it over to the kids, they couldn’t possibly do worse.

Dianne Feinstein Snaps At Group Of Environmental Activist Children (ZH)

Armed with an impassioned letter and memorized talking points, the children belonging to three Bay Area environmentalist groups (Sunrise Bay Area, Youth Versus the Apocalypse, and Earth Guardians San Francisco) implored Feinstein to support the Green New Deal. The Senator responded: “Ok, I’ll tell you what. We have our own Green New Deal.” The video skips forward to the children warning Feinstein that “some scientists have said that we have 12 years to turn this around” – referring to a conclusion by a recent UN-backed report that man-made climate change will become irreversible if carbon emissions are not significantly reduced over the next 12 years (which Ocasio-Cortez turned into “the world is gonna end in 12 years if we don’t address climate change”).

“It’s not gonna get turned around in 10 years,” responded Feinstein – drawing a harsh rebuke from an angry chaperone. “Senator if this doesn’t get turned around in 10 years you’re looking at the faces of the people who are going to be living with these consequences,” said the adult – as one of the children chimed in “the government is supposed to be for the people and by the people and for all the people!” Feinstein was not amused. I’ve been doing this for 30 years. I know what I’m doing. You come in here and you say “it has to be my way or the highway.” “I don’t respond to that,” shot back Feinstein. “I’ve gotten elected. I just ran. I was elected by almost a million vote plurality. And, I know what I’m doing. So, you know, maybe people should listen a little bit. -Dianne Feinstein

One kid shot back “I hear what you’re saying but we’re the people who voted you. You’re supposed to listen to us, that’s your job.” “How old are you?” challenged Feinstein. “I’m 16. I can’t vote,” said the girl. “Well you didn’t vote for me,” replied the Senator.

https://twitter.com/sunrisemvmt/status/1099075460649107458

Read more …

The new fight for control of the world. Orwell International Inc.

The Cold War in Tech (Barron’s)

Cisco Systems, an early Silicon Valley success story, has become one of the nation’s top tech exporters. Today, roughly half of the networking giant’s sales come from outside the U.S. As foreign countries sought to catch up with U.S. connectivity, Cisco helped plug them in. But a wave of nationalist thinking has put Cisco—and most of its peers—in an uncomfortable position. Earlier this month, Cisco CEO Chuck Robbins described the current climate as “one of the more complex macro, geopolitical environments that I think we’ve seen in quite a while with all the different moving parts.” It’s likely to get worse.

While investors are cheering indications of progress being made toward a resolution of trade issues between China and the U.S., the battle for tech supremacy between the two global superpowers shows few signs of abating. Even as the White House was negotiating on trade with Beijing, it was also contemplating a U.S. ban of telecommunications equipment from Chinese companies like Huawei Technologies, essentially China’s version of Cisco. As President Donald Trump was tweeting about the importance of 5G on Thursday, Secretary of State Mike Pompeo was pushing U.S. allies to ditch Huawei. This is a fight that is not going to end anytime soon. For years, U.S. officials have worried about Chinese equipment being used to infiltrate U.S. networks and businesses for possible espionage and theft of intellectual property.

Even a resolution of the trade war won’t quell those fears. “The perception is that too much of the information- and communication-technology supply chain is centered on China,” says Paul Triolo, who focuses on global technology policy issues for risk consulting firm Eurasia Group. “If we are in a conflict and using infrastructure built by China, they could theoretically hit a button and shut off everything.” “After 30 years of saying companies should optimize supply chains and move some abroad, now we are saying it’s a security concern,” he says. “Adjusting to that is jarring.”

Read more …

The sort of thing you know someone will always try, no matter what laws are invented. And it’s not about Silicon Valley, it’s about the CIA through big Tech.

Silicon Valley Wants In On It Pair Of Gene-Edited Chinese Twins (ZH)

A pair of Chinese twins who were gene-edited for resistance to HIV may also have ‘supercharged’ brains, along with possible resistance to age-related cognitive diseases such as Alzheimer’s. In a controversial experiment led by Chinese scientist He Jiankui, the embroys of seven couples had their genes “edited” using a tool known as CRISPR. By removing a gene called CCR5, Jiankui sought to create a natural immunity to HIV – which requires CCR5 to enter blood cells. Based on new research, however, Jiankui may have also left the twins, Lulu and Nana, with improved memory and enhanced cognition, according to MIT Technology Review. They may also enjoy some degree of protection from Alzheimer’s Disease and other maladies which are rapidly being linked to chronic inflammation, as some groups of mice without CCR5 – or who have been given CCR5 inhibitors, experience less severe dementia or Alzheimer’s symptoms.

“The answer is likely yes, it did affect their brains,” says UCLA neurobiologist Alcino J. Silva, whose lap discovered a link between CCR5 and the brain’s ability to form new connections. “The simplest interpretation is that those mutations will probably have an impact on cognitive function in the twins,” says Silva, adding that the exact effect on the girls’ cognition cannot be predicted, which is “why it should not be done.” Jiankui’s human experiments drew harsh rebuke after news of Lulu and Nana’s birth in late October or early November, and has reportedly been fired from his position at the Southern University of Science and Technology (SUSTech) in Shenzhen, China. Jiankui says there are more gene-edited babies on the way.

Silva tells the MIT Technology Review that “because of his research, he sometimes interacts with figures in Silicon Valley and elsewhere who have, in his opinion, an unhealthy interest in designer babies with better brains.” When word of Jiankui’s experiment went public, Silva says he immediately questioned whether enhanced cognition was the real goal of the experiment. “I suddenly realized—Oh, holy shit, they are really serious about this bullshit,” said Silva. “My reaction was visceral repulsion and sadness.” He Jiankui acknowledged that he knew about the potential cognitive benefits of removing the CCR5 gene discovered by the UCLA team during a Q&A session, though he said “I am against using genome editing for enhancement.”

Read more …

Brave new world: gene-edited superhumans controlled through embedded technology. That Orwell guy appears smarter by the day.

China Blocks 17.5 Million Plane Tickets Due to Lack of ‘Social Credit’ (Ind.)

The Chinese government blocked 17.5 million would-be plane passengers from buying tickets last year as a punishment for offences including the failure to pay fines, it emerged. Some 5.5 million people were also barred from travelling by train under a controversial “social credit” system which the ruling Communist Party claims will improve public behaviour. The penalties are part of efforts by president Xi Jinping‘s government to use data-processing and other technology to tighten control on society. Human rights activists warn the system is too rigid and may lead to people being unfairly blacklisted without their knowledge, while US vice-president Mike Pence last year denounced it as “an Orwellian system premised on controlling virtually every facet of human life”.

Authorities have experimented with social credit in parts of China since 2014. Points are deducted for breaking the law, but also, in some areas, for offences as minor as walking a dog without a lead. Offences punished last year also included false advertising and violating drug safety rules, said China’s National Public Credit Information Centre. It gave no details of how many people live in areas with social credit systems. [..] The ruling party is spending heavily to roll out facial recognition systems, and human rights activists say people in Muslim and other areas with high ethnic minority populations have been compelled to give blood samples for a genetic database. Those systems rely heavily on foreign technology, which has prompted criticism of US and European suppliers for enabling human rights abuses.

Read more …

Feb 212019
 
 February 21, 2019  Posted by at 11:02 am Finance Tagged with: , , , , , , , , , , , ,  


Jan van Eijk The Arnolfini portrait 1434

 

A $3 Trillion Debt Tsunami Is About To Flood The Stock Market (MW)
Attorney General Barr To Announce End Of Mueller Probe Next Week: CNN (ZH)
Mueller Report May Be ‘Anti-Climactic’ – Clapper (Hill)
FBI Top Lawyer Believed Hillary Clinton Should Face Charges (Solomon)
Conservative Split As Tory Rebels Denounce Hardline Brexiters (G.)
How Not To Organise A Split In A Party (Galloway)
UK And Ireland Retailers Warn Of 40% Tariffs On Food In No-Deal Brexit (G.)
UK Economy £100 Billion Smaller Because Of Austerity (G.)
Germany Rebuffs UK Call To Back Off Saudi Arms Freeze (ZH)
Bernie Sanders Raised $6 Million In One Day After Launching Campaign (ZH)
Ocasio-Cortez Refuses To Back Bernie Sanders For 2020 (Ind.)

 

 

They’re all still talking about the markets that aren’t markets. Curious. Is it because it’s all they have? Either way, seems leargely useless to me.

A $3 Trillion Debt Tsunami Is About To Flood The Stock Market (MW)

Will Nasgovitz, who oversees about $1.3 billion in assets as the chief executive of Heartland Advisors, isn’t calling for a “full blown financial crisis,” but, with trillions in corporate debt coming due in the coming years, the industry veteran’s not exactly predicting smooth sailing in the stock market, either. “With interest rates low, the economy strong, and relatively easy lending standards, the thinking went that borrowing to buyback shares or finance acquisitions was a low-risk strategy,” Nasgovitz explained in a recent post. “But the next five years could severely test that Pollyanna view.” Nasgovitz used this chart to illustrate his stance. As you can see, about $3.3 trillion — or 48% of all current outstanding commercial debt — comes due by 2023.

The timing could be problematic. “The sheer volume would be challenging for the market to digest in the best of scenarios, let alone this late in an economic expansion,” Nasgovitz wrote. “Adding to our sense of caution are early signs that lending standards have begun to tighten for commercial and industrial borrowers.” He says that, as banks become more stringent, borrowers could end up paying higher rates just to secure funds to retire outstanding obligations. “While we don’t currently see signs of a full-blown financial crisis on the horizon,” he concluded, “we do believe that excessive debt adds unnecessary challenges to companies in general and will likely be a headwind for heavy borrowers in the intermediate term going forward.”

Read more …

Overall sentiment: it won’t amount to much. So the media’s next steps are being prepared in the vein of “Just because Mueller couldn’t find a thing, doesn’t mean it doesn’t exist”.

Russiagate has been the media’s golden goose; what can they turn to now?

Attorney General Barr To Announce End Of Mueller Probe Next Week: CNN (ZH)

Barely a week after being sworn in as the head of the Justice Department, Attorney General William Barr is reportedly planning to announce as early as next week that Robert Mueller has completed his investigation and that a confidential report on Mueller’s findings will be submitted to Congress in the very near future. According to CNN, the preparations – which are in line with an NBC report from late last year that the Mueller report would be completed by the end of February – “are the clearest indication yet that Mueller is nearly done with his almost two-year investigation.” Barr has said that he wants to be as “transparent” as possible while being “consistent with the rules and the law.”

According to the law, Mueller must submit a “confidential” report to the AG after the investigation ends. But the rules don’t require it to be shared with Congress or the public (though, like everything involving the Mueller probe, it will almost certainly leak). One thing that remains unclear is to what extent Mueller’s findings will be shared with Congress (since the DOJ typically frowns on publicizing embarrassing or compromising information about people who haven’t been charged with a crime…though that principle has apparently gone out the window over the last two years). CNN also noted that it’s possible that Mueller has made referrals to other prosecutors besides the New York US attorney who brought charges against Michael Cohen.

The existence of other investigations might also soon come to light. CNN reported that attorneys from the US attorney’s office for Washington DC have been visiting Mueller “more than usual.” Signs that the Mueller probe is winding down have been multiplying in recent weeks. Four of his 17 prosecutors have been reassigned, and the grand jury he has used to secure his indictments hasn’t convened since late January. While Trump is probably hoping that the Russia collusion narrative will decidedly die after the report is released, former DNI James Clapper – whom Trump threatened to strip of his security clearance – warned that the report might leave open the question of whether there actually was collusion between Trump and Russia, giving the release a disappointingly anti-climactic feel, according to the Hill.

Read more …

A ‘subtle’ shift: now that going after Trump himself is going nowhere, Clapper et al claim Putin uses Trump as an unwitting asset. Takeaway: they will simply continue their collusion accusations. And Putin is an even easier victim.

Give me one reason why this entire cabal should not be investigated.

As I said yesterday: “Isn’t it supremely ironic that Mueller’s main objective today is trying to come up with some narrative that justifies his own probe? It’s circular ‘logic’ at its very best.

But why is McCabe so cocky about his treasonous(-like) behavior? Imagine someone like him doing an interview like that 2 years (or 6) into Obama’s presidency, saying it was possible Barack was an asset of China. Just imagine.”

Mueller Report May Be ‘Anti-Climactic’ – Clapper (Hill)

Former Director of National Intelligence James Clapper said Wednesday that he’s far from sure that special counsel Robert Mueller’s investigation will clear up questions about President Trump and Russia. He said he was hopeful the Mueller probe will provide some answers, but warned it might not even draw a conclusion on whether there was collusion between the Trump campaign and Moscow. “I think the hope is that the Mueller investigation will clear the air on this issue once and for all. I’m really not sure it will, and the investigation, when completed, could turn out to be quite anti-climactic and not draw a conclusion about that,” Clapper said Wednesday on CNN.

Clapper, a frequent critic of Trump’s, said people in the intelligence community see a strange deference on the president’s part toward Russian President Vladimir Putin. “The strange thing I think that has bothered a lot of people both in and out of the intelligence community is this strange personal deference to Putin by the president. I’ve speculated in the past that the way Putin behaves is to treat President Trump as an asset,” Clapper said Wednesday. He added that if Trump were indeed advancing Putin’s interests, he would more likely be doing so unwittingly.

The White House has lashed out at Clapper over his criticism in the past and announced in August it was reviewing existing security clearances for Clapper and several other former intelligence and law enforcement officials who have criticized the White House. Speculation has ramped up over Trump’s relationship with Russia after it was reported last month that the Justice Department had opened an investigation into whether the president was working on behalf of Moscow’s interests. Former acting FBI Director Andrew McCabe on Friday claimed that he believes “it’s possible” Trump is a Russian asset.

Read more …

And there’s Comey again, out to save the country.

FBI Top Lawyer Believed Hillary Clinton Should Face Charges (Solomon)

For most of the past three years, the FBI has tried to portray its top leadership as united behind ex-Director James Comey’s decision not to pursue criminal charges against Hillary Clinton for transmitting classified information over her insecure, private email server. Although in the end that may have been the case, we now are learning that Comey’s top lawyer, then-FBI General Counsel James Baker, initially believed Clinton deserved to face criminal charges, but was talked out of it “pretty late in the process.” The revelation is contained in testimony Baker gave to House investigators last year. His testimony has not been publicly released, but I was permitted to review a transcript.

During questioning by Rep. John Ratcliffe (R-Texas), Baker was unequivocal about his early view that Clinton should face criminal charges. “I have reason to believe that you originally believed it was appropriate to charge Hillary Clinton with regard to violations of law — various laws, with regard to mishandling of classified information. Is that accurate?” Ratcliffe, a former federal prosecutor, asked Baker. Baker paused to gain his lawyer’s permission to respond, and then answered, “Yes.” He later explained why he came to that conclusion, and how his mind was changed: “So, I had that belief initially after reviewing, you know, a large binder of her emails that had classified information in them,” he said.

“And I discussed it internally with a number of different folks, and eventually became persuaded that charging her was not appropriate because we could not establish beyond a reasonable doubt that — we, the government, could not establish beyond a reasonable doubt that — she had the intent necessary to violate (the law).” Asked when he was persuaded to change his mind, Baker said: “Pretty late in the process, because we were arguing about it, I think, up until the end.” Baker made clear that he did not like the activity Clinton had engaged in: “My original belief after — well, after having conducted the investigation and towards the end of it, then sitting down and reading a binder of her materials — I thought that it was alarming, appalling, whatever words I said, and argued with others about why they thought she shouldn’t be charged.”

His boss, Comey, announced on July 5, 2016, that he would not recommend criminal charges. He did so without consulting the Department of Justice (DOJ), a decision the department’s inspector general (IG) later concluded was misguided and likely usurped the power of the attorney general to make prosecutorial decisions. Comey has said, in retrospect, he accepts that finding but took the actions he did because he thought “they were in the country’s best interest.”

Read more …

More will follow. 5 weeks left.

Conservative Split As Tory Rebels Denounce Hardline Brexiters (G.)

Three Conservative MPs who resigned to join a new independent group on Wednesday said Theresa May had allowed their former party to fall prey to hardline Brexiters and declared that the Tory modernising project had been destroyed. In the latest evidence that Brexit is reshaping the political landscape, Heidi Allen, Anna Soubry and Sarah Wollaston, all outspoken critics of May’s stance on Europe, said the Conservative party as they had known it under David Cameron was dead. “I’m not leaving the Conservative party – it has left us,” said Soubry at a hastily convened press conference around the corner from the House of Commons. “The modernising reforms that had taken years to achieve were destroyed.”

Allen was asked if she could ever return to the Conservatives and answered: “If we do our jobs properly, there won’t be a Tory party to go back to.” She added: “We’re about creating something better that is bang smack in the centre ground of British politics that people out there, I am convinced, we are convinced, want.” The dramatic resignations – announced shortly before May confronted Jeremy Corbyn at prime minister’s questions – sent shockwaves through Westminster, where MPs had barely digested news of the Labour split. The move reduces May’s already tenuous working majority to eight, raising still more questions over her authority amid rumours that there could be further Tory defections.

On Wednesday night, Allen told ITV’s Peston that “a third of the party” – around 100 of her former colleagues – shared her frustrations at its direction. The Tory former attorney general Dominic Grieve told the BBC: “The government which I am supporting implementing a no-deal Brexit – what would I do? I would not be able to maintain my support of the government. I would have to leave the party.”

Read more …

George Galloway is right: center liberal parties are exactly what the whole world is rejecting.

How Not To Organise A Split In A Party (Galloway)

Just seven MPs announced their departure from Jeremy Corbyn’s Labour Party and though there may be others to come this was their first rank. And there lies the first problem. Other than Chuka Umunna virtually nobody has ever heard of the new Independent Group of MPs who were quickly dubbed the ‘Seven Dwarfs’. [..] From a crowded field I’d say the next biggest blunder was registering their parliamentary factions as a private company in a transparent effort to avoid…transparency! It’s true that Chuka and co are the corporate suit types and most of them are more familiar with the boardroom than the boiler room but no parliamentary group in history has turned themselves into a business!

The reasons – millions of them – are not hard to discern. A political party must declare who’s funding it and how much. A private company doesn’t. But again what seemed like a wheeze is in fact a blunder. I’m now free to speculate that they’ve already received millions from Hamas, Hezbollah, Iran and President Putin. It’s probably not true, but how can one tell? [..] I may be wrong and Manchester United may win the Champions League but I’m perfectly sure Centrist neo-liberal politics are currently out of fashion throughout the world. I base this on 14 weeks of mayhem on the streets of France, and not much more than that in President Macron’s opinion poll ratings. On Mrs Merkel slouching out of the German Chancery in ruins. On the Rushmore like ruin of Hillary Clinton. On the portrait of Dorian Gray that is the haunted face of the most hated man in Britain, Tony Blair.

Read more …

And that’s only the tariffs.

UK And Ireland Retailers Warn Of 40% Tariffs On Food In No-Deal Brexit (G.)

A no-deal Brexit could lead to tariffs of 40% or more being imposed on food such as beef and cheddar cheese, driving up prices in shops and squeezing household budgets across the UK and Ireland, retail organisations from both countries have warned. With mounting fears that the UK could leave the European Union without an agreement in 36 days’ time, the British Retail Consortium (BRC), Northern Ireland Retail Consortium (NIRC) and Retail Ireland, issued a joint warning that this outcome could lead to delays at borders and shortages of fresh meat, fish, fruit and vegetables. The scheduled withdrawal on 29 March comes at a time in the year when the UK imports a lot of fresh, out-of-season, produce – 90% of the lettuce consumed in Britain, 80% of tomatoes and 70% of soft fruits come from, or arrive via, Europe.

Increased tariffs, the devaluation of sterling and new regulatory checks would drive up the cost of fresh food and drink, which would be passed on to consumers, the retail bodies warned. If the UK leaves the EU without a deal, both fall back on the World Trade Organization’s most favoured nation tariffs, which means import duties on everyday food items from fruit to cheese. This would mean a 42% tariff on imported cheddar, 46% on mozzarella, 40% on beef, 21% on tomatoes and 15.5% on apples, the BRC said. Last year one of the UK’s largest dairy producers, based in Northern Ireland, warned that leaving the customs union under a hard Brexit could lead to the price of meat doubling in the UK and the price of dairy, half of which is imported, rising by up to 50%.

Read more …

Imagine taking that into a severe recession.

UK Economy £100 Billion Smaller Because Of Austerity (G.)

Austerity policies from the Treasury have resulted in slower growth in every year since 2010 and left each household £300 a month worse off as a result, a thinktank has said. The New Economics Foundation said its analysis of the impact of tax and spending changes since the Conservatives came to power, first as part of a coalition with the Liberal Democrats, had left the economy £100bn smaller than it would otherwise have been. Although the peak impact of the attempt to reduce a record peacetime budget deficit occurred during the first two years of the 2010-15 parliament, the thinktank said austerity was still acting as a drag on output. The NEF said the cumulative effect of tax, public spending and welfare adjustments on growth by the end of the 2018-19 financial year would be to leave the average household £3,629 a year worse off – the equivalent of £1,495 per person.

The latest public finances figures, due out on Thursday, will show whether the chancellor, Philip Hammond, is on course to hit his forecast for a budget deficit in 2018-19 of £25.5bn – one sixth of its level in the aftermath of the financial crisis and deep recession of 2008-09. Alfie Stirling, head of economics at the NEF, said work by the Office for Budget Responsibility and the Institute for Fiscal Studies made it possible to isolate the effects of austerity. “At this time of year there is often renewed speculation over whether the chancellor will meet his year-end deficit targets by March. But for nine years, the elephant in the room has largely been missed: the sheer scale of economic damage that these targets have contributed to in the first place.”

Read more …

The Germans have a much smaller weapons industry.

Germany Rebuffs UK Call To Back Off Saudi Arms Freeze (ZH)

Germany is feeling the pressure from western allies over its weapons exports freeze in the wake of the Saudi killing of Jamal Khashoggi, a freeze first announced in November, which included plans to reject any future export licences to Riyadh, but not previously approved deals. German allies like the UK have lately implored the German government to soften its stance, noting the potential broader economic impact on Europe. British foreign minister Jeremy Hunt, currently in Berlin to discuss the terms of Brexit, reportedly wrote to the German foreign minister, Heiko Maas, in a private letter first revealed by Der Spiegel that UK defense companies would be hindered in contractual obligations related to Eurofighter Typhoon and the Tornado fighter jet delivery, namely to supply parts affected by the German arms freeze.

Hunt told Maas in the letter published in German press: “I am very concerned about the impact of the German government’s decision on the British and European defence industry and the consequences for Europe’s ability to fulfil its Nato commitments.” This follows comments by German chancellor Angela Merkel at the past weekend’s Munich Security Conference acknowledging the need for “common export controls guidelines” across Europe. She said during a question-and-answer session after her speech at the conference: “We have because of our history very good reasons to have very strict arms export guidelines, but we have just as good reasons in our defense community to stand together in a joint defense policy. And if we want … to develop joint fighter planes, joint tanks, then there’s no other way but to move step-by-step towards common export controls guidelines.”

Read more …

It’s like nothing changed in 4 years. Only this time Bernie may be the favorite.

Bernie Sanders Raised $6 Million In One Day After Launching Campaign (ZH)

Just one day after officially launching his campaign for the 2020 Democratic nomination during an interview on Vermont Public Radio, Bernie Sanders has already raised more than $6 million through more than 220,000 individual contributions, according to CNN. Sanders, who consistently ranks near the top of most polls alongside former Vice President Joe Biden, saw the money pour in from donors in all 50 states. The average contribution was $27, which is roughly in line with the average contribution from Sanders 2016 upstart primary campaign against Hillary Clinton, in which he won a number of crucial primaries (all while actively working against the DNC). Confirming his outsize popularity in an increasingly crowded field, the self-described “Democratic Socialist”‘s haul dwarfs the $300,000 raised by Elizabeth Warren during the 24 hours after her official campaign launch.

Of the $6 million raised, some 10% (about $600,000) came in the form of recurring donations, providing “a huge, dependable grassroots donor base that will afford the campaign a consistent budgeting baseline.” During his last race, Sanders regularly touted the fact that his campaign was largely funded by small donations. And it appears this is already emerging as a central theme for the 2020 race. “The only way we will win this election and create a government and economy that work for all is with a grassroots movement – the likes of which has never been seen in American history,” Sanders said in his message announcing his campaign. “They may have the money and power. We have the people.”

On top of that $6 million haul, Sanders is entering the race with more than $9 million left in his US Senate campaign committee: funds that he can transfer to his presidential campaign. That puts him behind only Warren ($11 million) and Sen. Kirsten Gillibrand ($10.3 million).

Read more …

She has no reason to support anyone at all.

Ocasio-Cortez Refuses To Back Bernie Sanders For 2020 (Ind.)

Alexandria Ocasio-Cortez has refused to endorse Bernie Sanders for the 2020 Democratic nomination, despite working on the senator’s first presidential campaign. A spokesperson for Ms Ocasio-Cortez, like Mr Sanders a self-described democratic socialist, refused to comment directly on the 77-year-old’s Tuesday announcement he is running for a second time. “We’re excited to see so many progressives in the race,” spokesperson Corbin Trent said. “We’re not thinking at all about the next election.” Any endorsement by Ms Ocasio-Cortez is likely to be influential on the outcome of the race, thanks to her massive support among the grassroots of the party. But the 29-year-old, a congresswoman for New York, is unlikely to offer an endorsement before her state’s Democratic primary next year, and may even permanently withhold any explicit support for a single candidate.

Read more …