Mar 062019
 


Pablo Picasso Bathers with ball 1 1928

 

Amazon To Release Mueller Report in Full Print on March 26 (Taer)
Roger Stone’s Book May Violate Gag Order (R.)
Sharply Lower Prices Help Sell New US Houses, But it’s Not Enough (WS)
Democrats In Search Of A Crime To Punish Trump And His Voters (Sara Carter)
Trump Slams Democrats Over Probe He Calls Harassment (MW)
House Dems’ Rebuke of Rep. Ilhan Omar is a Fraud For Many Reasons (Greenwald)
Will Congress Repair The Safety Net For Older Americans? (NA)
US Trucking Boom U-Turns (WS)
Division! Brexit Stretches Arcane British Parliament To Breaking Point (R.)
UK Cash System ‘On The Verge Of Collapse’ (G.)
BOE and ECB Activate Emergency Currency Swap Line (Ind.)
Toyota, BMW Warn No-Deal Brexit Could Hit UK Investment, Production (BBC)
What Do The People Of The World Die From? (BBC)
Arctic Animals Shift Feeding Habits (AFP)

 

 

Nice find.

Amazon To Release Mueller Report in Full Print on March 26 (Taer)

If you are a journalist looking for a copy of The Mueller Report, Amazon got news for you. They claim that the report will be out on March 26. It’s not clear if Attorney General William Barr has cleared the released of the full Mueller report. But Amazon announced today the pre-order of “The Mueller Report”, with an introduction by constitutional scholar Alan Dershowitz.

As CNN has previously reported, Barr has been closely consulting with top Justice Department officials on the outlines of plans to handle the highly anticipated report, including to what extent it should be shared with Congress, and by extension the public. Could this be a trick from Dershowitz to sell a book about the report or would it be the full report, this we will have to wait and see. Amazon also list Robert Mueller III as author of the book. The book will be offered in both e-book and paperback editions. This is a developing story that will be updated.

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A book that first came out in 2017. That can’t be it. It was re-published under another name and critized Mueller in its introduction. Oh, that’s it. Wait: it was published before the gag order was issued. No, so that can’t be it either.

Roger Stone’s Book May Violate Gag Order (R.)

A federal judge said Tuesday that the publication of a book last month by President Donald Trump’s former political adviser Roger Stone which criticized Special Counsel Robert Mueller may violate a media gag order – a transgression that could land the self-proclaimed “dirty trickster” behind bars. Judge Amy Berman Jackson for the U.S. District Court for the District of Columbia ordered Stone and his lawyers to provide her with a report by Monday explaining how he plans to comply with the order, and also demanded that he turn over certain records detailing everything he knew about the book’s release.

“There is no question that the order prohibited and continues to prohibit the defendant from making any public statements, using any medium, concerning the investigation,” Jackson wrote. “It does not matter when the defendant may have first formulated the opinions expressed, or when he first put them into words: he may no longer share his views on these particular subjects with the world.” Shortly after Stone was charged, Jackson gave him wide latitude to discuss the case against him as long as it was not in the vicinity of the federal courthouse. But just days later, she tightened the reins with a sweeping gag order after Stone posted a photo of her on his Instagram account next to an image resembling the crosshairs of a gun and a message critical of both her and Mueller.

In issuing her gag order on Feb. 21, Jackson warned Stone he would not have a second chance if he violated it. She also said his apologies about the posting, which was later removed, rang hollow. After the gag order, Jackson learned that a 2017 book by Stone originally titled “The Making of the President 2016” had been re-published under the name “The Myth of Russian Collusion” and that it criticized Mueller in its introduction. In addition, Stone also in March posted an item on Instagram that said “Who framed Roger Stone.” It was later removed. Stone’s lawyers have said the book does not violate the gag order because it came out on Feb. 19, before the order was issued.

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Did you notice the similarities between the US and China?

Sharply Lower Prices Help Sell New US Houses, But it’s Not Enough (WS)

Here is the good news: Lower prices stir sales. Clearly, homebuilders are motivated to move their inventory, and they’re making deals at lower prices. The median price of new single-family houses whose sales closed in December fell 7.2% from a year earlier, to $318,000, according to the Commerce Department this morning. December’s 7.2% drop and November’s blistering 11.6% drop were the sharpest year-over-year declines since Housing Bust 1:

The new-house sales data, produced jointly by the Census Bureau and the Department of Housing and Urban Development, is very volatile. It is revised in the following months, often quite drastically. But despite the ups-and-downs in the monthly data, trends emerge. The steep year-over-year price increases in prior years formed a multi-year boom in prices that has now outrun what the market can bear. The median price of new houses ballooned by about 55% from the range in 2011 and 2012 to the peak in November and December 2017 ($343,300), which exceeded by 31% the crazy bubble peak in March 2007, before it all came apart:

Sales of new houses, in terms of the seasonally adjusted annual rate, had plunged late last year. The year-over-year decline exceeded 15% in November. So in December, this seasonally adjusted annual rate of sales finally responded to lower prices and declined a little, instead of plunging. The year-over-year drop of 2.4%, to an annual rate of sales of 621,000, was the fourth month in a row of year-over-year declines – but a heck of a lot less bad than the double-digit plunges in the prior two months:

That the price declines have not moved the needle enough also shows up in the inventory of new houses for sale that just keeps on rising. In December, the supply surged 17% year-over-year to 344,000 houses, for a supply of 6.6 months at December’s rate of sales (up from 5.5 months a year earlier):

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Trump has this one down: “Basically they’ve started the campaign..”

Democrats In Search Of A Crime To Punish Trump And His Voters (Sara Carter)

The House Judiciary Committee’s Democratic Chairman Rep. Jerrold Nadler is a man in search of a crime. Nadler and his colleague House Intelligence Committee Chairman Adam Schiff have moved the conversation from Russian collusion and are now promising to investigate virtually everything connected to President Donald Trump. Mind you, we the tax payers will be paying for these investigations and it will drag America and the administration into another two years of endless witch hunts. Yes, a witch-hunt. Can you imagine if someone despised you so much that all they did day in and day out was search for something, anything, that would get those around you to doubt your intentions. Imagine having to fight every single day of your life against never ending accusations.

Even when those accusations are later proven false it won’t matter because the original lie has already been thoroughly disseminated far and wide among the population. Why are Nadler, D-NY, and Schiff, D-CA, promising these investigations? Because they want to impeach Trump. It’s just that simple. They also want to send a message to the American people: your vote really didn’t matter because in the end it’s Congress that holds the power. Think about that. There was never any evidence of crime that called for Deputy Attorney General Rod Rosenstein to establish a special counsel. Yet, he did. In fact, he wrote the letter authorizing Trump to fire former FBI Director James Comey. Comey would’ve been fired the first day had Hillary Clinton been president. However, obstruction charges are at the top of the Nadler’s list of investigations.

He also promises to investigate all of Trump’s financial dealings and past business associations. Why? The pair realize that Special Counsel Robert Mueller’s report will not do the damage they were hoping it would. Both Democratic leaders, supported by their party, realize that Mueller has found no evidence of a conspiracy with the Russians. It has left believers like Schiff, Nadler and many former Obama Administration officials who’ve worked diligently over the past several years to destroy Trump, seething. They do not want to go on the defensive. Nadler and Schiff don’t want to explain that their narrative has been debunked. They do not want Americans to look too close because in the end what will be discovered is that the crimes they are accusing others of committing are the ones they themselves have committed.

So what do they do? They fish for a crime, use the media to propagate their lies and spread malicious rumors. Those crimes can be anything from obstruction of justice, process crimes or financial crimes. The lawmakers will use the power of America’s purse. They will investigate Trump’s children, those who support him and those who work closely with him at the White House. nHowever, remember this: It is the American people, liberty and the principals endowed in our Constitution that will pay the heaviest burden. Nadler announced his probe on Monday into potential “obstruction of justice.” He will lob accusation, after accusation, against the Trump administration and his family. He will seek documents and communications from over 60 individuals connected with the White House. He will look for that needle in a haystack for as long as it takes.

Nadler and Schiff will conduct what they describe as thorough investigations. They will keep these lengthy investigations going to buy time on the clock until they get close to the Democratic National Convention. Nadler will do so at the cost of our nation. Don’t be fooled. He doesn’t care about the American people or justice. In the end, this all about ‘getting back’ for the Democrats.

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You won’t find anyone saying: “but he’s the president, the people voted for him” anymore. What will that mean for subsequent presidents?

Trump Slams Democrats Over Probe He Calls Harassment (MW)

President Donald Trump on Tuesday escalated attacks on Democrats investigating him and his associates, as he signed an executive order establishing a task force addressing veteran suicide. Trump blasted Democrats who have launched an investigation into his White House and allies, saying on Twitter that lawmakers including House Judiciary Committee Chairman Jerry Nadler are looking to “harass” the 81 individuals and entities they’re seeking documents from. Those individuals include Trump’s sons Eric and Donald Jr., as well as David Pecker, chairman and CEO of American Media, which publishes the National Enquirer.

Calling Nadler and House Intelligence Committee Chairman Adam Schiff “stone cold CRAZY,” Trump said letters were “sent to innocent people to harass them.” White House press secretary Sarah Sanders said late Monday the investigation was “disgraceful and abusive.” Nadler said his committee is beginning a probe into possible obstruction of justice, corruption and abuse of power. Trump later said Democrats’ probe was a “disgrace” and said they wanted to “play games” instead of work on infrastructure or health care. “Basically they’ve started the campaign,” he said.

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They’ve started the campaign. But they actually believe they can get rid of Ocasio and Omar whenever they want. And that’s not true. The old guard is done.

House Dems’ Rebuke of Rep. Ilhan Omar is a Fraud For Many Reasons (Greenwald)

GOP Congressman Steve King has served in the U.S. House of Representatives for sixteen years, yet Democrats – who controlled the House for four of those years and now control it again – never formally rebuked or condemned him until last month (they did so at the same time that Republicans removed him from his Committee assignments due to a long history of white supremacist remarks). By extremely stark contrast, Democratic Congresswoman Ilhan Omar – the first black Muslim woman ever elected to the Congress – has served in the House for a little more than two months, and House Democratic leaders have already formally condemned her once and are preparing to so again, this time even more harshly and officially, on Wednesday.

On February 11, the House Democratic leadership, responding to statements made by Omar about large donors and AIPAC driving pro-Israel policies, issued a joint statement condemning Omar for what they called her “use of anti-Semitic tropes,” adding that her “prejudicial accusations about Israel’s defenders” are “deeply offensive.” They then demanded: “We condemn these remarks and we call upon Congresswoman Omar to immediately apologize for these hurtful comments.” Omar then issued a statement of her own in which she “unequivocally apologized” for unintentionally invoking “anti-Semitic tropes,” but made crystal clear that “the problematic role of lobbyists in our politics” – whether it be AIPAC, as well as the NRA or the fossil fuel industry – was one she would continue to aggressively address and combat.

The Congresswoman quickly made good on her promise to continue speaking out about AIPAC’s toxic influence, the destructive and immoral support given to Israel by the U.S., and the subordination of Americans’ Constitutional rights and the country’s national interests to that foreign nation. Speaking last Wednesday in Washington at a town hall meeting with several other progressive House members, Congresswoman Omar was asked about the use of the “anti-semitism” label to shut down debate over Israel. In reply, she said: “I want to talk about the political influence in this country that says it is OK to push for allegiance to a foreign country.” That remark created a new outburst of anti-Semitism accusations against Omar, initially provoked by New York Magazine’s Jonathan Chait, whose column carried the most sensationalistic and misleading headline possible: “Ilhan Omar Accuses Israel Hawks of ‘Allegiance to a Foreign Country.’”

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Small detail: older Americans own lots of firearms.

Will Congress Repair The Safety Net For Older Americans? (NA)

The first two federal safety net programs, Social Security and Unemployment Insurance, will turn 65 next year. This historic milestone is being preceded by a new focus from the new Congress on how the government’s safety net programs are performing and what changes might be needed to improve them. Safety net programs have evolved over time, from Head Start in 1964 to Supplemental Security Income in 1972 to the Affordable Care Act (ACA) of 2010, with its expansion of Medicaid to approximately 15 million people. And social safety net programs have done a lot of good over time. For example, Social Security has lifted an estimated 27 million people out of poverty. However, against this backdrop are some more disturbing realities.

First, many eligible Americans, especially older adults, are not receiving safety net benefits to which they are entitled. For example, the National Council on Aging estimates that almost 60% of older Americans eligible for the Supplemental Nutrition Assistance Program (SNAP; formerly known as food stamps) aren’t enrolled. Access to federal benefits is especially challenging for older women, who represent nearly two-thirds of all people 65 and older living in poverty. Certain safety net programs have shown a bias against women regarding benefits and coverage by considering work history and salary history; historically, women have been more likely to be unpaid caregivers and to have lower salaries than men. Fixing this type of bias is a prime example of potential safety net reform.

Second, safety net program benefits are not keeping up with the need. For example, Supplemental Security Insurance (SSI), a program for low-income older adults and people with disabilities, has only seen minimal benefit increases since it was created nearly 50 years ago. Third, the government’s measurement of what constitutes poverty for safety net programs, especially poverty of older adults, is grossly outdated. This results in many more older Americans living in poverty than the federal guidelines show. Finally, out-of-pocket health care costs are not sustainable for some poorer, older adults in the Medicare program, leaving many with hard choices between paying for food or rent.

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But cyclical.

US Trucking Boom U-Turns (WS)

Orders for Class-8 trucks – made by Daimler (Freightliner, Western Star), Paccar (Peterbuilt, Kenworth), Navistar International, and Volvo Group (Mack Trucks, Volvo Trucks) – plunged 58% in February compared to February last year, to 16,700 orders, according to FTR Transportation Intelligence after they’d already plunged 58% year-over-year in January and 43% in December. The orders in January and February were back in the range of the “transportation recession” that had hit the industry in 2015 and 2016. At the time, truck and engine manufacturers reacted with layoffs. But for now, they’re sitting on a massive backlog from the boom in orders last year (data via FTR):

The business is infamously cyclical, with regular booms that lead to over-ordering and then overcapacity, followed by busts that then sort it all out again. The industry is also seasonal, so we can use year-over-year comparisons to eliminate most of the effects of seasonality. The chart below shows the percent change of Class-8 truck orders for each month compared to the same month a year earlier. The year-over-year plunges over the past three months are of the same magnitude as the plunges during the last transportation recession (data via FTR):

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Brexit according to Henry VIII.

Division! Brexit Stretches Arcane British Parliament To Breaking Point (R.)

Britain’s 800-year-old parliament has a big decision to make, and little time to make it. After months of drama and delay, the country’s fate could be decided next week in a series of Brexit votes in which lawmakers must choose one of two wood-panelled corridors to shuffle down inside the neo-gothic Westminster palace. Each vote, known as a division, takes about 15 minutes. If it takes too long, the Serjeant-at-Arms, dressed in shiny black shoes, knee-high socks and a long woollen suit, will be sent bearing a ceremonial sword to investigate. Rich in pageantry and theater, Westminster’s parliamentary format has been adapted, modernized and exported to more than two dozen countries across the globe.

[..] On March 12, May is expected to try once more to get her deal approved, though much will rest on whether she can secure extra assurances from Brussels about the thorny issue of Northern Ireland’s border. If that vote fails, May will ask parliament a day later whether it wants to leave the European Union without any kind of exit deal – a potentially disruptive divorce with damaging consequences for the world’s fifth largest economy. If parliament rejects that outcome as well, lawmakers will then decide on March 14 if they want to try to delay Brexit, potentially opening the door to a wholesale renegotiation with the EU – or even a second referendum at home. If the process does go to a third ballot, when Speaker John Bercow bellows “Division!” and bells ring across parliament and beyond to alert lawmakers to the vote, Britain could be 15 minutes from taking its first step towards reversing Brexit.

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“17% of the UK population – over 8 million adults – would struggle to cope in a cashless society”. And nobody cares.

UK Cash System ‘On The Verge Of Collapse’ (G.)

More than 8 million UK adults would struggle to cope in a cashless society, according to a major report which claims that the country’s “cash infrastructure” is in danger of collapsing. With Britons increasingly turning to digital payments, and bank branches and ATMs closing, the Access to Cash Review said companies and organisations providing “essential” services should be required to ensure that consumers can continue to pay by cash. The review is funded by cash machine network Link, but is independent from it, and is chaired by the former head of the Financial Ombudsman Service Natalie Ceeney, with other members including Richard Lloyd, the former executive director of consumer group Which?.

Ceeney said that “17% of the UK population – over 8 million adults – would struggle to cope in a cashless society”. Debit cards last year officially overtook notes and coins as the most popular form of payment in the UK for the first time, and the review’s report predicted that cash could fall to just 10% of all payments within the next 15 years. It also called on the government, regulators and banks to “act now or risk leaving millions behind”. A spokesman for the review claimed the UK’s cash system was “on the verge of collapse”. The bill for running the UK’s cash infrastructure – from ATMs to cash-sorting centres – was about £5bn a year, paid for predominantly by banks (and, ultimately, consumers), said the report. But while the costs were largely fixed, income was declining quickly. As a result, it said, “we have a cash infrastructure which is fast becoming unsustainable”.

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EU banks hold 15 percent of UK bank debt and 10 percent of UK government bonds.

BOE and ECB Activate Emergency Currency Swap Line (Ind.)

The Bank of England and the European Central Bank (ECB) have agreed an emergency currency swap line to ensure banks have access to cash in the event of a no-deal Brexit. The agreement means the Bank of England will offer to lend euros to UK banks on a weekly basis while the ECB will receive pound sterling from the BoE in exchange for euros. It means that even if the UK crashes out of the EU without a deal, the country will still remain reliant on Frankfurt to help safeguard the financial system. “Activation marks a prudent and precautionary step by the Bank of England… supporting the functioning of markets that serve households and businesses,” the ECB said on Tuesday.

Since 2013, Britain has had similar swap lines with four other central banks: the US, Canada, Japan and Switzerland. The UK needs free access to supplies of foreign currencies to facilitate trade and much of the financial services industry. During a crisis, banks can find it hard to access the volume of foreign currency they need. It is at this point that central banks will be available to provide cash through so-called swap lines. There had been some speculation that the ECB would not support a euro swap line if no Brexit deal is agreed with the UK. But the ECB and BoE confirmed on Tuesday that the facility will be available. The ECB said it will continue to work closely with the Bank of England to monitor market conditions carefully.

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Good. Let them ride bicycles.

Toyota, BMW Warn No-Deal Brexit Could Hit UK Investment, Production (BBC)

Car giants Toyota and BMW have both warned a no-deal Brexit threatens the production of their cars in the UK. BMW told Sky News it could consider moving production of its Mini from the UK in a no-deal scenario. Separately, the head of Toyota’s European operations said a negative outcome could put future investment at its UK factory near Derby at risk. Johan van Zyl told the BBC that if the Brexit “hurdles” are too high it would undermine Toyota’s competitiveness. Speaking to Sky News, BMW board member Peter Schwarzenbauer said if a “worst case” no-deal scenario happened, “we would need to consider what it exactly means for us in the long run”. “For Mini, this is really a danger,” he added.

Asked if BMW could move Mini production out of Cowley near Oxford, he said: “We at least have to consider it.” Earlier, BMW chief executive Harold Krueger told the BBC that the carmaker was preparing “for a lot of scenarios” and was “very flexible” in its approach to production. He said the company had “reserved some air flight capacity for the transportation of bigger materials” and had prepared its suppliers. “The logistics network is very flexible to adjust to changes,” he said. The warnings come after Japanese rivals Nissan and Honda both recently dealt major blows to the UK motor industry. Last month, Nissan reversed a decision to build a new car in the UK , and Honda said it was closing its Swindon plant , although both cited non-Brexit reasons.

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Our food is killing us.

What Do The People Of The World Die From? (BBC)

Around the world, people are living longer. In 1950, global average life expectancy at birth was only 46. By 2015, it had shot up to over 71. In some countries, progress has not always been smooth. Disease, epidemics and unexpected events are a reminder that ever-longer lives are not a given. Meanwhile, the deaths that may preoccupy us – from terrorism, war and natural disasters – make up less than 0.5% of all deaths combined. But across the world, many are still dying too young and from preventable causes. The story of when people die is really a story of how they die, and how this has changed over time.

About 56 million people in the world died in 2017. This is 10 million more than in 1990, as the global population has increased and people live longer on average. More than 70% die from non-communicable, chronic diseases. These are not passed from person to person and typically progress slowly. The biggest single killer is cardiovascular disease, which affects the heart and arteries and is responsible for every third death. This is twice the rate of cancers – the second leading cause – which account for about one in six of all deaths. Other non-contagious diseases such as diabetes, certain respiratory diseases and dementia are also near the top of the list.

In the past, infectious diseases played a bigger part than they do today. In 1990, one in three deaths resulted from communicable and infectious diseases; by 2017 this had fallen to one in five. Children are particularly vulnerable to infectious diseases. As recently as the 19th Century, every third child in the world died before the age of five. Child mortality rates have fallen significantly since then thanks to vaccines and improvements in hygiene, nutrition, healthcare and clean water access. Child deaths in rich countries are now relatively rare, while the poorest regions today have child mortality rates similar to the UK and Sweden in the first half of the 20th Century, and are continuing to catch up.

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Impossible choices.

Arctic Animals Shift Feeding Habits (AFP)

Seals and whales in the Arctic are shifting their feeding patterns as climate change alters their habitats, and the way they do so may determine whether they survive, a new study has found. Researchers harnessed datasets spanning two decades to examine how two species of Arctic wildlife – beluga whales, also known as white whales, and ringed seals – are adapting to their changing homes. Both species traditionally hunt for food in areas with sea ice and particularly at so-called tidal glacier fronts, where glaciers meet the ocean. But with climate change melting sea ice and prompting glaciers to retreat, researchers in Norway decided to look at whether and how animals in the affected areas were adapting.

“The Arctic is the bellwether of climate change,” the researchers wrote. “With the rapid pace of change rendering genetic adaptation unfeasible,” they reasoned that behavioural and dietary changes “will likely be the first observable responses within ecosystems”. [..] For the seals, they compared tracker data from 28 individuals between 1996-2003 and then 2010-2016, and for the whales they looked at data from 18 animals between 1995-2001 and 16 animals from 2013-2016. The data showed that two decades ago, both species spent around half their time foraging at glacier fronts and eating a diet dominated by polar cod. But ringed seals now spend “significantly higher proportions of time near tidal glacier fronts” while the white whales had the opposite response and had moved elsewhere to look for food.

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Aug 162016
 
 August 16, 2016  Posted by at 9:14 am Finance Tagged with: , , , , , , , , ,  1 Response »


Harris&Ewing Army surplus 1919

Mining Giant BHP Slumps To Record Loss (BBC)
Chinese Traders Are Falling Out Of Love With Commodities (BBG)
China’s Fading Animal Spirits (BBG)
Germany Amassing Huge Surpluses – And Huge Risks (MW)
Bundesbank Floats Higher Retirement Age -69- in German Pension Debate (BBG)
Top UK Firms Paid Five Times More In Dividends Than Into Pensions (G.)
Pension Funds Are Driving The Biggest Bond Bubble In History (ZH)
Hedge Funds Bet Dollar Will Lose More Ground Versus Yen (BBG)
Krugman’s Arrow Theory Misses Target by Light Years (Mish)
A Government of Scoundrels, Spies, Thieves, And Killers (JW)
Jimmy Carter: The US Is an ‘Oligarchy With Unlimited Political Bribery’ (IC)
Burning Down the House (Jim Kunstler)
Sleeping Bear Of Debt Set To Wake (Herald Sun)
One-Third Of New Zealand Children Live Below The Poverty Line (G.)

 

 

No matter what anybody does, the overbuilding, overcapacity and overconsumption in China can no longer be extended. Infrastructure investment in other countries won’t be enough to pick up the slack.

Mining Giant BHP Slumps To Record Loss (BBC)

Mining giant BHP Billiton has reported a record loss for the past year following a mining disaster in Brazil and a slump in commodity prices. The Anglo-Australian commodities firm reported an annual net loss of $6.4bn (£5bn) for the year to 30 June. The global mining sector has seen years of weak demand attributed largely to slowing growth in China. BHP results were also hit by costs after the Samarco mining disaster in Brazil, which killed 19 people. The record losses come after the company had reported a $1.9bn net profit. “While commodity prices are expected to remain low and volatile in the short to medium term, we are confident in the long-term outlook for our commodities, particularly oil and copper,” chief executive Andrew Mackenzie said in a statement.

Underlying earnings for the past year, which strip out one-off costs, came in at $1.22bn. The financial fallout from the Samarco mining tragedy is still not clear though warns James Butterfill, head of research & investment strategy at ETF Securities. “There’s a huge uncertainty overhang,” he told the BBC. “The report hasn’t been published with regard to the Samarco dam collapse and there’s currently a $48bn lawsuit. It’s unrealistic to be that amount, but this is really BHP’s Macondo well incident theoretically that BP endured.”

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As consumption and investment falls, so will prices. Commodity producers worldwide are sitting on huge overcapacity. They must shrink their operations, but the first reaction is always to produce more to make up for falling revenue.

Chinese Traders Are Falling Out Of Love With Commodities (BBG)

Chinese traders are falling out of love with commodities. Aggregate volumes across the nation’s three biggest exchanges have shrunk to the lowest level in six months, a shadow of the fevered trading in March and April when retail investors charged into markets for everything from iron ore to cotton, driving up prices and stoking fears of a bubble. Chinese authorities brought an end to the frenzy by introducing curbs on excessive speculation and trading has failed to recover since. Flush with record credit and hunting for returns, investors piled into commodities in the first half of the year, spurred by bets that China’s economic stimulus and industrial reforms would lead to shortages of raw materials. Now, there’s just not much for traders to get excited about, according to Wei Lai, an analyst with Cofco Futures.

Industrial production and fixed-asset investment slowed in July and a measure of new credit expanded the least in two years, spurring concern over growth in the world’s second-largest economy. “Investors are reluctant as there isn’t much information to play around with in the market,”’ Shanghai-based Wei said in an e-mail. High prices for some commodities may also be deterring traders, Wei said. Combined aggregate volume across the Shanghai Futures Exchange, Dalian Commodity Exchange and Zhengzhou Commodity Exchange slid to 23 million contracts as of Aug. 12, the lowest since February and compared with a peak of more than 80 million on April 22 when a total of $261 billion changed hands. Chinese exchanges double count trading volume and turnover.

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China will become known for the biggest misallocation of investment in history.

China’s Fading Animal Spirits (BBG)

The July wobble in China’s economy – like its multi-year slowdown – has much to do with the waning “animal spirits” of Chinese businesses caused by an historic shift in housing. That’s according to Chi Lo, greater China senior economist at BNP Paribas Investment Partners in Hong Kong. A property-led pick up in the first half lost momentum in July, suggesting the market is struggling to digest an overhang in supply of apartments. “In the past, the economic players expanded supply first and created jobs so as to create demand, but that is gone now,” Lo said in a telephone interview after Friday’s disappointing data. “It has to clean out the excess capacity, which means the supply-expansion model has to change.”

Another way of putting it: China’s build-it-and-they-will-come strategy needs to shift to one where demand, not supply, is in the drivers’ seat. It’s a change companies are struggling to come to terms with, leaving private investment in the doldrums. “Little attention has been paid to the underlying structural factor that is hurting private investment incentive,” Lo wrote in a research note ahead of the data last week. “This is the weakening of the final demand for output produced by the investment or capital-intensive sector in China. The key to understand this puzzle is China’s housing market.” That’s because it accounts for about half of all investment in China once spillovers into industries like metals and machinery are thrown in.

With such pervasive impact on everything from cement to cars, China’s property market was dubbed the most important sector in the universe back in 2011 by a UBS economist. BNP’s Lo says it’s unlikely to ever recapture the glory days of old. “China’s housing demand has likely passed its high-growth phase, with housing construction growth expected to go into a secular decline soon,” according to Lo. “This means that the capital-intensive sector, which has focused on producing all this housing units through the decades, is facing a structural decline in demand for its output.”

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One might be forgiven for thinking Berlin is blowing up the eurozone on purpose. What is needed are transfer payments to southern Europe, but there is too much resistance to those.

Germany Amassing Huge Surpluses – And Huge Risks (MW)

As one of the world’s largest exporters, Germany saw an important part of the political and economic rationale of entering European economic and monetary union in 1999 as lowering risks on its international commercial interactions. Nearly two decades later, Germany, more than ever, is an export champion. It is likely to register the world’s largest trade surplus this year, according to the OECD, at $324 billion (against China’s $314 billion), and will amass a record current-account surplus of 9.2% of gross domestic product. Yet, as a result of the large imbalances within EMU that these surpluses symbolize, Germany is a long way from insulating itself against foreign-currency risks.

The Bundesbank provides the strongest indicator of this change. The quintessentially hard-money central bank provided a role model for the ECB at the heart of the euro bloc. Yet the Bundesbank now confronts on its balance sheet a range of potential hazards that the euro’s founding fathers in the 1980s and 1990s would have regarded as inimical to economic stability and, for that reason, impossible to countenance. The Bundesbank’s balance sheet rose to €1.2 trillion in July from €222 billion when monetary union started in January 1999. Underlining the Bundesbank’s pivotal role in eurozone monetary operations, the German central bank’s balance sheet has expanded faster than that of the Eurosystem (the ECB and the constituent national central banks) as a whole.

The Bundesbank’s balance sheet now encompasses around 37% of Eurosystem assets of €3.3 trillion (computed on a net basis that strips out individual central banks’ claims and liabilities against each other under the Target-2 payments system), against 32% at the inception of EMU. The acceleration stands in marked contrast to the central bank’s stated desire, when monetary union started, to slim down its balance sheet and especially to economize on foreign-exchange reserves, held mostly in dollars. These have traditionally (together with gold) made up the lion’s share of the Bundesbank’s foreign assets, but have been cut from €45 billion to €50 billion when the euro was launched to only €30 billion to €35 billion in recent years.

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You’re not going to solve the problems by tweaking the age; that merely shifts the issue into the future. Can, road.

Bundesbank Floats Higher Retirement Age -69- in German Pension Debate (BBG)

Germany’s Bundesbank said raising the legal retirement age to 69 by 2060 could ease some of the pressure on the country’s state pension system as the population ages. Recent reforms won’t protect citizens from a drop in the level of pension payments from 2050, the central bank said in its monthly report published on Monday. Citizens who don’t opt for state-supported private insurance may face shortfalls a lot sooner. Low average interest rates could further reduce available provisions. While higher premiums could theoretically keep payouts stable, they would “raise the strain on those paying the contributions, and an increasing, high burden of payments overall has negative consequences on economic development,” the Bundesbank wrote. To avoid that, “the legal retirement age ultimately needs to be adjusted.”

The Bundesbank said the government’s current plans that include raising the retirement age to 67 by 2030 and increasing contributions don’t account for the fact that the ratio of retirees to contributors is set to widen further. Increasing life expectancy means retirees will draw from pension funds for a longer period of time, and a generation of baby boomers that retires post-2030 means there will be more pensioners to take care of per working adult, while birth rates remain low, according to the report. “Amid demographic change, the parameters of a contribution-based pension system can’t all be kept stable,” the Bundesbank said. “Confidence in pension insurance could be strengthened and uncertainty about financial stability at old age could be decreased if it were made clear how the parameters of retirement age, provision levels, and contribution rates can be adjusted in the long term.”

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Short termism perfected.

Top UK Firms Paid Five Times More In Dividends Than Into Pensions (G.)

Britain’s biggest companies paid five times more in dividends than they did pension contributions last year, according to a new report that highlights the pressure on retirement schemes. FTSE 100 companies paid £13.3bn towards their defined benefit pension schemes, compared with £71.8bn in payments to shareholders, according to the consultancy firm LCP’s annual study of pensions. The report has been published after Sir Philip Green was heavily criticised by a parliamentary investigation into the collapse of BHS for leaving the retailer with a £571m pension deficit, despite his family and other investors banking more than £400m in dividends. BHS’s 164 stores are all scheduled to close by 28 August, a week later than administrators planned last month as the retailer continues to sell its remaining stock.

Green remains locked in talks with the Pensions Regulator about a rescue deal for the BHS pension scheme. He has pledged to sort out the problems facing it, but the regulator has launched an investigation into whether the billionaire tycoon should be forced to make a financial contribution to fill the black hole. Other companies with large pension deficits could face action from the regulator if they are paying dividends, LCP says in its report. The 56 FTSE 100 companies that disclosed a pension deficit at the end of their 2015 financial year had a combined deficit of £42.3bn, but the same companies paid out dividends worth £53bn, 25% more than their pension contributions.

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“..a $1BN pension that is fully funded at prevailing interest rates would be nearly $700mm underfunded if interest rates declined 300bps and all of their assets were invested in 30-year treasury bonds.”

Pension Funds Are Driving The Biggest Bond Bubble In History (ZH)

We’ve frequently discussed the many problems faced by pension funds. Public and private pension funds around the globe are massively underfunded yet they continue to pay out current claims in full despite insufficient funding to cover future liabilities…also referred to as a ponzi scheme. In fact, we recently noted that the Central States Pension Fund pays out $3.46 in pension funds for every $1 it receives from employers. The pension problem is often attributed to low returns on assets. As Bill Gross frequently points out, low interest rates are the enemy of savers and pension funds have some of the biggest savings accounts around. That said, the impact of declining interest rates on the asset side of a pension’s net funded status is dwarfed by the much more devastating impact of declining discount rates used to value future benefit obligations.

The problem is one of duration. By definition, pension liabilities represent the present value of future benefit payments owed to retirees which is a virtually perpetual cash flow stream. Obviously, the longer the duration of a cash flow stream the larger the impact of interest rate swings on the present value of that stream. We created the chart below as a simplistic illustration of the pension “duration dilemma.” The chart graphs how a pension liability grows in a declining interest rate environment versus the value of 5-year and 30-year treasury bonds. As you can see, a $1BN pension that is fully funded at prevailing interest rates would be nearly $700mm underfunded if interest rates declined 300bps and all of their assets were invested in 30-year treasury bonds. The result is obviously even worse if the fund’s assets are invested in shorter duration 5-year treasuries.

Pension Duration

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How Abenomics gets strangled.

Hedge Funds Bet Dollar Will Lose More Ground Versus Yen (BBG)

Hedge funds and other large speculators increased net bets the dollar will weaken against the yen to the highest level in a month, according to Commodity Futures Trading Commission data as of Aug. 9. Traders will focus on the meetings of the Federal Reserve and the Bank of Japan next month for direction, after disappointing stimulus announced last month by the BOJ failed to halt yen strength.

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“Krugman would do himself a favor if he threw away what he thinks he knows about economics and went back for a nice 5th grade education.”

But the saddest part of course is that belugas are kept in an aquarium and learn tricks to amuse Japanese. Who are we?

Krugman’s Arrow Theory Misses Target by Light Years (Mish)

With full employment, roads paved and repaved to nowhere, and bubble blowing beluga whales, just what the hell is Japan supposed to waste money on? Curiously, Krugman says it doesn’t matter. He once proposed a fake aliens from outer space scare as the solution to stimulate the economy. But roads and bridges and bubble blowing blowing beluga whales are surely better than fabricating space aliens or paying people to dig ditches and others to fill them up again. The problem is, it’s hard arguing with economic illiterates like Krugman. He can (and will) say “spending wasn’t enough”.

One can never prove him wrong. The implosion of Japan would not do it. His built-in excuse would be Japan did too little, too late. Just once I would like Krugman to address in his model what happens when the stimulus stops. He cannot and he won’t because he has no answer. The average 5th grader understands it’s absurd to pay money for something guaranteed to be useless, but the average Keynesian economist doesn’t. Krugman would do himself a favor if he threw away what he thinks he knows about economics and went back for a nice 5th grade education.

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John Whitehead does not mince words.

A Government of Scoundrels, Spies, Thieves, And Killers (JW)

“There is nothing more dangerous than a government of the many controlled by the few.”—Lawrence Lessig, Harvard law professor

The U.S. government remains the greatest threat to our freedoms. The systemic violence being perpetrated by agents of the government has done more collective harm to the American people and our liberties than any single act of terror. More than terrorism, more than domestic extremism, more than gun violence and organized crime, the U.S. government has become a greater menace to the life, liberty and property of its citizens than any of the so-called dangers from which the government claims to protect us. This is how tyranny rises and freedom falls.

As I explain in my book Battlefield America: The War on the American People, when the government views itself as superior to the citizenry, when it no longer operates for the benefit of the people, when the people are no longer able to peacefully reform their government, when government officials cease to act like public servants, when elected officials no longer represent the will of the people, when the government routinely violates the rights of the people and perpetrates more violence against the citizenry than the criminal class, when government spending is unaccountable and unaccounted for, when the judiciary act as courts of order rather than justice, and when the government is no longer bound by the laws of the Constitution, then you no longer have a government “of the people, by the people and for the people.”

What we have is a government of wolves. Worse than that, we are now being ruled by a government of scoundrels, spies, thugs, thieves, gangsters, ruffians, rapists, extortionists, bounty hunters, battle-ready warriors and cold-blooded killers who communicate using a language of force and oppression. Does the government pose a danger to you and your loved ones? The facts speak for themselves. We’re being held at gunpoint by a government of soldiers—a standing army. While Americans are being made to jump through an increasing number of hoops in order to exercise their Second Amendment right to own a gun, the government is arming its own civilian employees to the hilt with guns, ammunition and military-style equipment, authorizing them to make arrests, and training them in military tactics.

Among the agencies being supplied with night-vision equipment, body armor, hollow-point bullets, shotguns, drones, assault rifles and LP gas cannons are the Smithsonian, U.S. Mint, Health and Human Services, IRS, FDA, Small Business Administration, Social Security Administration, National Oceanic and Atmospheric Administration, Education Department, Energy Department, Bureau of Engraving and Printing and an assortment of public universities. There are now reportedly more bureaucratic (non-military) government civilians armed with high-tech, deadly weapons than U.S. Marines. That doesn’t even begin to touch on the government’s arsenal, the transformation of local police into extensions of the military, and the speed with which the nation could be locked down under martial law depending on the circumstances. Clearly, the government is preparing for war—and a civil war, at that—but who is the enemy?

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2 weeks old, but highly relevant.

Jimmy Carter: The US Is an ‘Oligarchy With Unlimited Political Bribery’ (IC)

Former president Jimmy Carter said on the nationally syndicated radio show the Thom Hartmann Program that the United States is now an “oligarchy” in which “unlimited political bribery” has created “a complete subversion of our political system as a payoff to major contributors.” Both Democrats and Republicans, Carter said, “look upon this unlimited money as a great benefit to themselves.” Carter was responding to a question from Hartmann about recent Supreme Court decisions on campaign financing like Citizens United. Transcript: HARTMANN: Our Supreme Court has now said, “unlimited money in politics.” It seems like a violation of principles of democracy. … Your thoughts on that?

CARTER: It violates the essence of what made America a great country in its political system. Now it’s just an oligarchy, with unlimited political bribery being the essence of getting the nominations for president or to elect the president. And the same thing applies to governors and U.S. senators and congress members. So now we’ve just seen a complete subversion of our political system as a payoff to major contributors, who want and expect and sometimes get favors for themselves after the election’s over. … The incumbents, Democrats and Republicans, look upon this unlimited money as a great benefit to themselves. Somebody’s who’s already in Congress has a lot more to sell to an avid contributor than somebody who’s just a challenger.

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“..generate Money-Out-Of-Thin-Air (QE) for the purpose of allowing “liquidity” flows to end up in US equity and bond markets in order to paint a false picture of “recovery” so as to insure the election of Hillary Clinton.”

Burning Down the House (Jim Kunstler)

There’s a new feature to the Anything-Goes-and-Nothing-Matters economy: Nothing-Adds-Up. The magicians who pretend to measure the growth of GDP (Gross Domestic Product — the monetary value of all the finished goods and services) came up with a second quarter “adjusted” figure of 1.2 percent. That would have to be construed by anyone acquainted with basic econ stats as perfectly dismal. And yet the Bureau of Labor Statistics put out a sparkly Nonfarm Payroll Report of 255,000 for July, way above the forecast 180,000. There were so many ways to game the jobs number — between people forced to work more than one shit job and the notorious “birth/death model” used to just make up any old number for political purposes — that no one can take this information seriously.

Anyway, the GDP number was instantly forgotten and the jobs number launched the stock markets to previously uncharted record altitude. It’s that time of the year for the hedge fund boys, with their testosterone flowing, to start burning down their house rentals in the Hamptons. And it’s also the time of year for an ever more stressed financial system to go down in flames. And, of course, it’s a presidential election season. Even for one allergic to conspiracy theories, it’s not farfetched to imagine a coordinated effort by central banks — under government direction — to generate Money-Out-Of-Thin-Air (QE) for the purpose of allowing “liquidity” flows to end up in US equity and bond markets in order to paint a false picture of “recovery” so as to insure the election of Hillary Clinton.

I think that is exactly behind the recent money-printing activities by the Japanese and European Central Banks, and the Bank of England. Why would it end up in US markets? For bonds, because the Euro and Japanese bond sovereign yields are in sub-zero territory and the BOE just cut its prime rate lower than the US Federal Reserve’s prime rate; and for stocks, because the value of the other three currencies is sliding down and the dollar has been rising — so, dump your falling currency for the rising dollar and jam it into rising US stocks. It’ll work until it doesn’t.

Why do this for Hillary? Because she represents the continuity of all the current rackets being used to prop up belief in the foundering business model of western civilization. If she doesn’t get into the White House there may be no backstopping of the insolvent banks and bankrupt governments and a TILT message will appear in the sky.

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Australia is a private debt disaster. Public debt is much less important.

Sleeping Bear Of Debt Set To Wake (Herald Sun)

The great sleeping bear of Australia’s economic future – of your economic future – is the current account deficit and our foreign debt. They have completely disappeared from the front page – indeed, even from the business pages. Nobody seems to mention them. But they most certainly haven’t disappeared in reality. And in reality, they’ve never been bigger. The deficit, the CAD, in the latest March quarter was more than $20 billion. It will top $80 billion for the full 2015-16 year. The net foreign debt sits at a tad more than $1 trillion. To give you a sense of the scale, that’s more than half the size of the Australian economy; more than double the total of all federal tax revenues in a year.

The CAD is the difference between what we earn from exports and from our international investments each year and what we pay for imports and to foreign investors in Australia. That last bit includes the interest we pay on our existing foreign debt. And the deficit each year is mostly covered by borrowing more from foreigners. In recent years, the biggest borrowers have been our banks. So we have this merry-go-round. The bigger the foreign debt, the bigger the deficit tends to be because of the interest paid on the debt. Then, the bigger the deficit, the bigger the foreign debt gets. Sound familiar? Because it’s exactly the same as the merry-go-round with the Budget deficit and the national debt. The deficit increases the national debt; and the interest on the debt increases the next year’s deficit; and that deficit further increases the debt.

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“..as a society, are we really prepared to let our children grow up this way?”

One-Third Of New Zealand Children Live Below The Poverty Line (G.)

One-third of New Zealand children, or 300,000, now live below the poverty line – 45,000 more than a year ago. Unicef’s definition of child poverty in New Zealand is children living in households who earn less than 60% of the median national income – NZ$28,000 a year, or NZ$550 a week. The fact that twice as many children now live below the poverty line than did in 1984 has become New Zealand’s most shameful statistic. “We have normalised child poverty as a society – that a certain level of need in a certain part of the population is somehow OK,” said Vivien Maidaborn, executive director of Unicef New Zealand. “The empathy Kiwis are famous for has hardened. Over the last 20 years we have increasingly blamed the people needing help for the problem.

“If you can’t afford your children to have breakfast, you’re a bad budgeter. If you aren’t working you’re lazy. But our subconscious beliefs about some people ‘deserving’ poverty because of poor life choices no longer apply in today’s environment. We have to ask ourselves as a society, are we really prepared to let our children grow up this way?” For a third of New Zealand children the Kiwi dream of home ownership, stable employment and education is just that – a dream. For poor children in the developed South Pacific nation of 4.5 million illnesses associated with chronic poverty are common, including third world rates of rheumatic fever (virtually unknown by doctors in comparable countries like Canada and the UK), and respiratory illnesses.

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