Oct 152021
 


Paul Gauguin Christ in the garden of olives 1889

 

For the Right to Try (Hope)
Deaths Following Vaccination in Taiwan Exceed COVID Death Total (BA)
Go Ahead, Keep Being Stupid (Denninger)
FDA Panel Recommends Half-dose Boosters For Moderna Vaccine (JT)
Navy Announces Plans To Expel Those Refusing Vaccine, Revoke Benefits (ZH)
Workers At Los Alamos Nuclear Lab Sue Over Vaccine Mandate (JTN)
The 2020 Election Wasn’t Stolen, It Was Bought By Mark Zuckerberg (Fed.)
Blackwell: Republicans Should Have Poll Workers At Every Precinct In 2022 (JTN)
#EmptyShelvesJoe Hits Number 1 Trend On Twitter (PM)
Joe Biden Could Get Drawn Into The FBI Probe Into His Son Hunter (Fox)
Americans’ Heating Bills To Soar Up To 50% This Winter (ZH)

 

 

Hessen becomes the first federal state in Germany to allow supermarkets to bar unvaccinated persons from entry (BILD).

 

 

Highly effective

 

 

Vermont is the most vaccinated US state

 

 

 

 

Murder by judge.

For the Right to Try (Hope)

“A Fairfield Township man with COVID-19 whose wife sued to force West Chester Hospital to treat him with Ivermectin has died, according to his attorney. Jeffrey Smith died Saturday, September 25, said his attorney, Jonathan Davidson of Hamilton. Smith, 51, was diagnosed with COVID-19 in July and was in the intensive care unit at West Chester Hospital.” According to a news report published October 4, 2021, “Jeffrey Smith tested positive for COVID-19 July 9, was hospitalized, and was admitted to the intensive care unit July 15. He was put on the hospital’s COVID-19 protocol of the antiviral drug, Remdesivir, along with plasma and steroids. On July 27, after a period of relative stability, Jeffrey Smith’s condition began to decline. He was sedated and intubated, and placed on a ventilator on August 1.

Smith was in a medically-induced coma on August 20, according to an affidavit his wife filed with her lawsuit. ‘My husband is on death’s doorstep; he has no other options,’ she wrote, adding at another point that her husband’s chances of survival had dropped to less than 30%.” In August, Judge Gregory Howard ordered the hospital, West Chester, to honor the family’s request to treat him with Ivermectin. Judge Howard approved Dr. Fred Wagshul’s prescription of Ivermectin 30 mg daily for three weeks. Dr. Wagshul is a renowned Pulmonary Specialist who reports having treated over 2,000 patients with Ivermectin with 100% success. He heads the Lung Center of America in Dayton, Ohio.

In addition, he is a founding member of the World-Renowned Front-Line COVID-19 Critical Care Alliance (FLCCC), a non-profit group of highly-published physicians dedicated to saving lives. By the grace of God and Judge Howard, Jeffrey Smith won the court order to receive the life-saving Ivermectin for which attorney Ralph Lorigo and his team had fought at his wife’s plea. It appeared that Jeffrey Smith would be another in the string of Lorigo’s cases that received court-ordered Ivermectin and went on to enjoy a full recovery. Lorigo’s ICU cases who win court-ordered Ivermectin have more than a 90% recovery rate, unlike their chances with standard care, which is well below 50%, and in this case, less than 30%.

[..] Over thirteen days, Smith faithfully got the Ivermectin, and began to improve, said Dr. Wagshul. It looked like Ralph Lorigo had worked another miracle. And then the unthinkable occurred. A new judge ordered the Ivermectin stopped against the wishes of his wife, his family, and Dr. Wagshul. And soon after that, 51-year-old Jeffrey Smith’s life ended. Judge Michael Oster reversed the ruling before Smith could receive the entire three weeks of court-ordered Ivermectin. As a result, he only received 13 doses out of the 21 mandated by the previous order. According to Ralph Lorigo, lead attorney, “they were planning to begin weaning off the ventilator.”

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Taiwan was doing fine. And then the vaccines came.

Deaths Following Vaccination in Taiwan Exceed COVID Death Total (BA)

Since the onset of the COVID-19 pandemic, few nations have been lauded as much for their management of the disease as Taiwan has. Since the first cases of COVID-19 in the country were reported in February 2020, only 16,313 infections and 846 deaths have been recorded. Despite how successfully the nation had managed the outbreak, it still enrolled itself in the World Health Organization-led COVAX exchange program and began its first wave of vaccinations on March 22, 2021. While the nation hadn’t had even a dozen deaths attributed to COVID-19 by the time the first vaccine was administered, 836 of the 846 deaths attributed to COVID-19 have occurred since the vaccination program began. In an even more dubious display concerning the safety and effectiveness of the vaccines administered in Taiwan, the nation’s Central Epidemic Command Center (“CECC”) has stated that 850 deaths have been reported as adverse events following vaccinations. That total eclipses the number of fatalities attributed to the virus itself.


Taiwan’s vaccination campaign began much later than many other nations, a lag which many blame on political interference from China which was best illustrated by the island nation’s difficulties procuring orders of Pfizer-BioNTech’s mRNA vaccines. Despite these hurdles, the country was able to first able to procure 117,000 doses of AstraZeneca’s vaccines. Additional deliveries of 200,000 and 400,000 doses from the same manufacturer arrived the following two months before another 150,000 vaccines from Moderna were delivered in May 2021. It gave emergency approval to a domestically engineered alternative made by Medigen Vaccine Biologics Corporation with shipments from Pfizer-BioNTech and Johnson & Johnson soon following. As of October 11, 4.48 million Taiwanese, about 19% of the population, have been fully vaccinated and 13.7 million, or about 59% of population, have received on dose. The country has stated that it seeks to have 70% of its population fully vaccinated.

Yet, by the time Taiwan had approved those five vaccines for emergency use, an alarming trend began appearing. The highest seven-day average of new cases of COVID-19 observed in Taiwan before its first vaccines were deployed was just 3. By May 28, 2021, that seven-day average exploded to 597. As the rest of the world grappled with an increase in cases despite the global advancement of vaccination efforts, most those countries had record their all-time highs for new cases and deaths before any vaccines were available. One exception to that rule was seen in Israel, where the record for a highest single-day case count was recorded following the beginning of the nation’s campaign to administer third doses of the Pfizer-BioNTech vaccines in the wake of concerns of the delta variant’s impact of the efficacy of vaccines. Yet, even though Israel did surpass its previous one-day high, the amount by which it exceeded that paled in comparison to Taiwan. The seven-day average in Taiwan would not fall under 10 new cases again until September 2021. Since then, despite the increase in vaccinations, that national average has never managed to reach its pre-vaccination levels. The lowest seven-day average Taiwan has seen since it began vaccinating its citizens was recorded at 5 on September 5, 2021.

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“If your particular “circle of friends and acquaintances” hasn’t seen a spike of severe injuries, disability and mortality yet — I’ll make a prediction: It will.”

Go Ahead, Keep Being Stupid (Denninger)

Two days of FDA murderfest are on deck with the agenda items being Moderna and J&J “booster” shots. As with the Fraudzer jabs there will be no data deck submitted, no side effect profile, no disclosure of the data the manufacturers have that is not in VAERS, no reconciliation of the VAERS data with clinical experience and zero accountability for any of the people already wounded, including those mortally wounded who don’t know it yet all the way up to those already dead. The screamfest about how Covid-19 infection produces “worse” myocarditis and other cardiac complications than the vaccines will, of course, be maintained. Never mind the clinical study data that says that’s a lie:

“To analyse the impact of COVID-19 pandemics on CVD outcomes in Belo Horizonte (BH), the 6th greater capital city in Brazil, including: mortality, mortality at home, hospitalizations, intensive care unit utilization, and in-hospital mortality; and the differential effect according to sex, age range, social vulnerability, and pandemics phase.” Oh, you mean someone’s done the work? Why yes, yes they have. Oh look, we have a formal study here in Brazil. They have fat people, thin people, old people, young people, you know, humans. And like everywhere else they get cardiovascular disease. Like everywhere else they also have gotten hammered with Covid-19; indeed, they’ve been hammered worse than many other places, largely because they have an extraordinarily-stratified population and a large part of it has jack for medical care, routine or otherwise.

So if Covid-19 was killing people a few weeks to months later via heart attack it would show up in the numbers. This study ran through November of 2020, that is, all through the worst of the first wave, with months of time for those adverse impacts to show up and kill people. By the claims all those who got Covid-19 and recovered contributed massively to CVD deaths, right? The rate was much higher than it would otherwise be. Why, after you got Covid-19 you were much more likely to have a heart attack and die! THIS IS THE CLAIM SO WHAT WERE THE RESULTS? “Results: We found no changes in CVD mortality rates (RiR 1.01, 95%CI 0.96-1.06). However, CVD deaths occurred more at homes (RiR 1.32, 95%CI 1.20-1.46) than in hospitals (RiR 0.89, 95%CI 0.79-0.99), as a result of a substantial decline in hospitalization rates, even though proportional in-hospital deaths increased.”

Oh. What did they find related to this? That people avoided the hospital when in cardiac distress and thus the percentage of such deaths that occurred at home went up. But wait….. is this one indictment or two indictments in one study? You see, if going to the doctor or hospital saves your ass when in such a condition then the death rate from CVD should have gone up. That it was difficult to figure out why it went up is still an open question, but it should have increased, assuming said hospitals and doctors actually improved outcomes. But…. they don’t improve outcomes, do they? Need to read it again? Results: We found no changes in CVD mortality rates So said doctors and hospitals don’t help. That’s a bummer.

What’s a bigger bummer is that the jabs are killing and severely-injuring people, and not a few of them either. If your particular “circle of friends and acquaintances” hasn’t seen a spike of severe injuries, disability and mortality yet — I’ll make a prediction: It will.

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Protection for 6 weeks? Or do we have to subtract the first two here as well?

Oh, and your booster can be another vaccine too, I hear, so nobody will have any idea anymore about a specific vaccine’s efficacy.

FDA Panel Recommends Half-dose Boosters For Moderna Vaccine (JT)

The Food and Drug Administration’s advisory panel unanimously approved Thursday a booster shot of Moderna’s COVID-19 vaccine for select groups of people. According to the Associated Press, the panel of outside experts recommended booster shots be administered to people over the age of 65, people ages 16 and older who have underlying conditions causing them to be at risk of severe illness, and those whose profession puts them at risk of contracting COVID. The final category of people includes frontline workers, such as supermarket employees, healthcare professionals, and first responders.


The panel recommended booster shots at half the dosage of the original shots, advising that they can be administered six months after a person was fully vaccinated. According to NPR, some experts pointed out that the FDA has set a precedent by granting emergency use to Pfizer for its booster shots. “I support this [emergency use authorization] because we’ve already approved it for Pfizer, and I don’t see how we can possibly not approve it for Moderna and not have most U.S. folks completely confused,” said Dr. Stanley Perlman of the University of Iowa. “I think it’s a pragmatic issue.” The panel is expected to discuss booster shots for Johnson & Johnson’s vaccine on Friday.

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We’re going to lose a lot of doctors, nurses, policemen, soldiers.

Navy Announces Plans To Expel Those Refusing Vaccine, Revoke Benefits (ZH)

At the end of August the Pentagon initially announced a mandate for military personnel across all armed service branches, ordering them to “immediately begin” Covid vaccination. A memo issued by Defense Secretary Lloyd Austin at the time directed the Secretaries of the Military Departments to “immediately begin full vaccination of all members of the Armed Forces under DoD authority on active duty or in the Ready Reserve, including the National Guard, who are not fully vaccinated against COVID-19.” However, when the mandate went out it remained unclear precisely what repercussions military members would face if they don’t comply – this also as a number of lawsuits have since been filed against the DoD by troops arguing that the order violates individual medical freedom. On Thursday the US Navy made it clear to their personnel: receive the jab by November 28 for be expelled from the service.

“With Covid-19 vaccines now mandatory for all military members, the Navy has announced plans to start processing for discharge those who refuse vaccination without a pending or approved exemption,” the US Navy said in the statement. The Pentagon had so far remained ambiguous over whether servicemembers would actually be booted after the mandate cut-off date. With Thursday’s Navy announcement, other branches are expected to soon follow suit. The AFP notes that “The navy said that 98 percent of its 350,000 active duty members had begun or completed the vaccination process.” The rate among all branches combined is about equal – or just under this, but Pentagon officials worry about lagging vaccination rates in the reserves, given recent reports indicate just 80% of the reserves have had at least one dose.

The AFP report underscores that if official Pentagon policy becomes to expel troops across the board for refusing the shot, this could create a significant problem for US defense readiness, given it would inevitably involve a mass exit of troops. “If all the services take the same hard line that the navy is taking, it risks losing as many as 46,000 troops, though presumably more will accept vaccinations before the deadline,” the report underscores. What remains is the question of the terms under which they would be discharged at the end of November. The Navy said in the Thursday announcement those kicked out for not taking the vaccine “will receive no lower than a general discharge under honorable conditions.” However, there could be penalties like being forced to pay back certain training and education costs – or more significantly the loss of post military service benefits, as the official Navy guidance spells out: “This type of discharge could result in the loss of some veterans’ benefits.”

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“Workers at the lab face potential termination if they are unable to provide proof of vaccination by Friday.”

Workers At Los Alamos Nuclear Lab Sue Over Vaccine Mandate (JTN)

Workers at a nuclear laboratory in New Mexico filed a lawsuit Thursday attempting to stop a vaccine mandate from taking effect. According to The Hill, more than 100 workers at the Los Alamos National Laboratory are alleging that the laboratory’s vaccine exemption policy is too strict and that their exemptions were wrongfully denied. The New Mexico laboratory is best known for creating the atomic bomb and is one of the largest employers within the state. The plaintiffs in the lawsuit have some of the highest security clearances in the nation, and their jobs range from nuclear engineers to research technicians.


According to the Associated Press, the workers allege that the company that manages the lab, Triad National Security LLC., created a hostile work environment, as well as violated their constitutional rights by implementing a strict COVID-19 vaccine mandate. In an anecdote reported to The Hill, one worker claimed they were scolded publicly for not being vaccinated and told that his “family deserved to die.” According to the Associated Press, the management company says 96% of its workforce is vaccinated, while the plaintiffs claim this number is actually much lower. Workers at the lab face potential termination if they are unable to provide proof of vaccination by Friday.

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“..passed a staggering $419.5 million of Zuckerberg’s money into local government elections offices..”

The 2020 Election Wasn’t Stolen, It Was Bought By Mark Zuckerberg (Fed.)

During the 2020 election, Facebook CEO Mark Zuckerberg spent hundreds of millions of dollars to turn out likely Democratic voters. But this wasn’t traditional political spending. He funded a targeted, private takeover of government election operations by nominally non-partisan — but demonstrably ideological — non-profit organizations. Analysis conducted by our team demonstrates this money significantly increased Joe Biden’s vote margin in key swing states. This unprecedented merger of public election offices with private resources and personnel is an acute threat to our republic, and should be the focus of electoral reform efforts moving forward.

The 2020 election wasn’t stolen — it was likely bought by one of the world’s wealthiest and most powerful men pouring his money through legal loopholes. The Center for Technology and Civic Life (CTCL) and The Center for Election Innovation and Research (CEIR) passed a staggering $419.5 million of Zuckerberg’s money into local government elections offices, and it came with strings attached. Every CTCL and CEIR grant spelled out in great detail the conditions under which the grant money was to be used. This is not a matter of Democrats outspending Republicans. Private funding of election administration was virtually unknown in the American political system before the 2020 election.

Big CTCL and CEIR money had nothing to do with traditional campaign finance, lobbying, or other expenses that are related to increasingly expensive modern elections. It had to do with financing the infiltration of election offices at the city and county level by left-wing activists, and using those offices as a platform to implement preferred administrative practices, voting methods, and data-sharing agreements, as well as to launch intensive outreach campaigns in areas heavy with Democratic voters. For instance, CTCL/CEIR funded self-described “vote navigators” in Wisconsin to “assist voters, potentially at their front doors, to answer questions, assist in ballot curing … and witness absentee ballot signatures,” and a temporary staffing agency affiliated with Stacey Abrams called “Happy Faces” counting the votes amidst the election night chaos in Fulton County, Georgia.

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“..training ex-military to be poll workers on Election Day..”

Blackwell: Republicans Should Have Poll Workers At Every Precinct In 2022 (JTN)

Former Ohio Secretary of State Ken Blackwell is urging that all Republican candidates should follow the lead of GOP Virginia gubernatorial candidate Glenn Youngkin, who is training ex-military to be poll workers on Election Day. Youngkin’s campaign is ensuring they have poll workers — not just observers — at every precinct for the the state’s gubernatorial election in November, Blackwell explained on the John Solomon Reports podcast Wednesday. With this strategy, “any attempt to hide in the dark corners of a process and snatch this election from the voters of Virginia will be stopped dead in its tracks,” said Ohio’s former top election official. “[S]afeguarding the integrity of our elections is paramount to preserving our republic,” he continued.


“And any attempts of individual cheaters, or any attempt by the federal government to concentrate control of our elections back in one party in Washington, D.C. must be resist[ed].” Blackwell added that Virginia is the first test case “to build a strong team on the field — you know, not sideline sitters, but folks who are on the frontline.” Blackwell was asked if the Republican Party should train poll workers, like Youngkin is doing with ex-military, and have them cover every precinct in America during the 2022 midterm elections. “I’m encouraging … that battle plan to be carried out in every state,” he replied. In a country of over 3,000 counties, there are hundreds of thousands of precincts, he noted. “[W]e cannot allow what happened in 2020 to happen again,” Blackwell stressed, when “we had tens, if not hundreds of thousands, of precincts left uncovered.”

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They’re sweating by now.

#EmptyShelvesJoe Hits Number 1 Trend On Twitter (PM)

On Wednesday afternoon, #EmptyShelvesJoe became the number one trending hashtag on Twitter in the US as the country experiences shortages stemming from a supply chain crisis. Despite President Joe Biden calling himself a “Supply Commander” during his run for president, the US has been hit hard with supply chain snarls. At one point, there were 62 boats backed up at the Port of Long Beach in Los Angeles. In a Wednesday speech, Biden addressed the supply chain issues, saying he signed an executive order in February regarding the issue. Conditions have gradualy deteriorated since then.

“I know you’re hearing a lot about something called supply chains, and how hard it is to get a range of things from a toaster to sneakers to bicycles bedroom furniture. And that’s why, back in February. I signed a piece of legislation on supply chain — Executive Order on supply chains, and what we had to move on. And with the holidays coming up, you might be wondering if gifts you plan to buy will arrive on time,” said Biden. He continued: “Well, let me explain. Supply chains, essentially mean, how we make things, and how the material and parts get delivered to factory a factory, so we can manufacture things, and manufacturing here, how we move things, how a finished product moves from a factory to a store to your home.”

Biden assured residents in June that after a dismal jobs report, saying “There are going to be ups and down in jobs and economic reports, but there are going to be supply chain issues and price pressures on the way back to stability and steady growth.” White House Press Secretary Jen Psaki was asked whether the issue would get better before it got worse, but she refused to make a prediction on the matter. “I’m not going to make a prediction of that from here. We know there are a number of issues that impact the supply chain and I don’t want to make a prediction because it’s not just one issue. Certainly, increasing the capacity at… ports and increasing the number of hours will have a positive impact, there’s no question about that,” said Psaki on Wednesday.

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“With these disclosures, we have accounts being used to pay both Hunter and Joe Biden..”

Joe Biden Could Get Drawn Into The FBI Probe Into His Son Hunter (Fox)

A report published Tuesday contends that President Joe Biden could get tied up in the ongoing FBI investigation into his son Hunter Biden’s finances due to the sharing of bank accounts and payment of each other’s bills. Emails obtained by DailyMail.com from Hunter Biden’s abandoned laptop show that his business partner, Eric Schwerin, was working on Joe Biden’s tax returns and discussing the father and son paying each other’s bills. Additionally, the emails show that Schwerin fielded book deal requests for Joe Biden, who was vice-president at the time, and also managed the donation of Biden’s Senate papers to the University of Delaware.

Hunter Biden has claimed that he and his father shared a bank account and admitted last year that he was under federal investigation over his taxes. Emails show that on April 9, 2010, Schwerin wrote to Hunter: “I was dealing all afternoon with JRB’s taxes (but solved a big issue – so it was all worth it).” On June 10 of the same year, Schwerin wrote, “Your Dad’s Delaware tax refund check came today. I am depositing it in his account and writing a check in that amount back to you since he owes it to you. Don’t think I need to run it by him, but if you want to go ahead. If not, I will deposit tomorrow.” It is unknown what specifically Joe Biden owed Hunter money for.

An expert on money laundering and criminal tax law told DailyMail.com that those entanglements could drag the current president into the FBI’s investigation. “Whatever transaction you’re looking at, if there’s a connection to a family member or a friend, sure the answer is yes [they would be investigated],” the expert, a former federal prosecutor who requested not to be named, told DailyMail.com. “Obviously, if you’re talking about the President of the United States, you’d better have a pretty damn good reason to talk to that person.”

[..] JONATHAN TURLEY: With these disclosures, we have accounts being used to pay both Hunter and Joe Biden and money being reimbursed to Hunter Biden from an individual associated with a company called Rosemont Seneca. Now that’s a company that has been tied to payments from China and Russia. And so this is getting more and more serious. The question is why the Justice Department hasn’t considered the appointment of a special counsel. We know there’s a criminal investigation into the tax issues, possible money laundering. But there are also serious questions about whether the Biden family conducted an extensive influence-peddling operation involving not just Hunter but his uncle and potentially the president of the United States.

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The pandemic cost us a lot of energy.

Americans’ Heating Bills To Soar Up To 50% This Winter (ZH)

So far, Americans have been watching the money-depleting energy crisis that hit Europe and Asia with detached bemusement: after all, while US energy prices are higher, they are nowhere near the hyperinflation observed in Europe. That is about to change because as the Energy Information Administration warned this week, much higher heating bills are coming this winter. According to the IEA’s October winter fuels outlook (pdf), nearly half of U.S. households that warm their homes with mainly natural gas can expect to spend an average of 30% more on their “multi-year high” bills compared with last year. The agency added that bills would be 50% higher if the winter is 10% colder than average and 22% higher if the winter is 10% warmer than average.


The forecast rise in costs, according to the report, will result in an average natural-gas home-heating bill of $746 from Oct. 1 to March 31, compared with about $573 during the same period last year. As the Epoch Times adds, propane costs are forecasted to rise by 54%, heating oil costs to rise by 43%, natural gas costs to rise by 30%, and electricity costs to rise by 6 percent. And with natural gas consumption projected to rise by 3% this winter, households are expected to spend $746 this winter, up from $573 last winter. The increase in natural gas heating costs varies by region with the Midwest U.S. leading the price hike at a 45% increase from last winter, and the Northeast expecting a hike of 14%.

Nearly half of all U.S. households use natural gas as the primary source of heating. Households relying on heating oil over winter will spend $1,734 over winter, relative to $1,212 last winter. Houses in Northeastern regions will be more affected by the price hike as nearly one in five homes in the region rely on heating oil as their primary source of space heating. The projection is based on the Brent crude oil price, which helps determine the prices of U.S. petroleum products. “The higher forecast Brent crude oil price this winter primarily reflects a decline in global oil inventories compared with last winter as a result of global oil demand that has risen amid restrained production levels from OPEC+ countries,” according to the EIA.


While most households commonly use electricity for heating, 41% rely on electric heat pumps or heaters as their primary source for space heating. These homes should expect to spend $1,268 this winter season, relative to $1196 last year. This projection accounts for 3 percent more residential electricity demand with more Americans working from home, a colder winter, as well as a rise in fuel costs for power generation. “During the first seven months of this year, the cost of natural gas delivered to U.S. electric generators averaged $4.97/MMBtu, which is more than double the average cost in 2020,” stated EIA.

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Dec 272020
 


Winslow Homer Spanish Girl with Fan 1885

 

Developers of Oxford-AstraZeneca Vaccine Tied to UK Eugenics Movement (Webb)
The Breakthrough Medicines That Could Change The Course Of Covid (G.)
Japan Halts All Foreign Arrivals Over UK COVID Variant (AP)
Britain First To Infect Healthy Volunteers With Covid19 For Research (NYP)
Scientists Call For UK Lockdown After Rapid Spread Of Covid19 Variant (G.)
Two Pandemic Assistance Programs Expire, Leaving 12 Million Without Benefits (ZH)
RussiaGate 2.0, Right on Schedule (Luongo)
This Brexit Deal Is Emphatically Nothing To Celebrate (Lis)
Glenn Greenwald: Coverage Of Coronavirus Pandemic ‘Media Misconduct’ (Hill)

 

 

 

 

Whitney Webb. Long read.

Developers of Oxford-AstraZeneca Vaccine Tied to UK Eugenics Movement (Webb)

For much of 2020, the Oxford-AstraZeneca vaccine was treated as an early front-runner, though its lead would later be marred by scandals related to its clinical trials, including the death of participants, sudden trial pauses, the use of a problematic “placebo” with its own host of side effects and the “unintentional” mis-dosing of some participants that skewed its self-reported efficacy rate. The significant issues that emerged during trials have provoked little concern from the vaccine’s two lead developers, despite critical attention from even mainstream media of its complications. The lead developer of the Oxford-AstraZeneca vaccine, Adrian Hill, told NBC on December 9th that the experimental vaccine should be approved and distributed to the public before the conclusion of the safety trials, saying,”to wait for the end of the trial would be the middle of next year. That’s too late, this vaccine is effective, available at large scale and easily deployed.”

Sarah Gilbert, the other lead researcher on the vaccine, seemed to believe that pre-mature safety approval was likely, telling the BBC on December 13 that the chances of rolling out the vaccine by the end of the year are “pretty high.” Now, the UK is expected to approve the Oxford-AstraZeneca vaccine shortly after Christmas, with India also set to approve the vaccine next week. While the controversies surrounding the vaccine’s trials did ultimately undermine its previous frontrunner status, the Oxford-AstraZeneca vaccine remains heavily promoted as the vaccine of choice for the developing world, as it is cheaper and has much less complicated storage requirement than its main competitors, Pfizer and Moderna.

Earlier this month, Dr. Richard Horton, the editor-in-chief of the Lancet medical journal, told CNBC that “The Oxford AstraZeneca vaccine is the vaccine right now that is going to be able to immunize the planet more effectively, more rapidly than any other vaccine we have” in large part because it is a “vaccine that can get to lower middle-income countries.” CNBC also quoted Andrew Baum, global head of health care for Citi Group, as saying that the Oxford-AstraZeneca vaccine “is really the only vaccine that is going to suppress or even eradicate SARS-CoV-2, the virus that causes COVID-19, in the many millions of individuals in the developing world.”

In addition to longstanding claims that the Oxford-AstraZeneca vaccine will be the vaccine of choice for the developing world, this vaccine candidate has also been treated by several outlets in the mainstream and even independent media as “good for people, bad for profits” due to the partnership’s “explicit intention of supplying [the vaccine] around the world on a not-for-profit basis, meaning that the poorest nations on the planet will not have to worry about being shut out of a cure due to lack of funds.” However, investigation into the vaccine’s developers and the realities of their “no-profit pledge” reveals a very different story than that which has been spun for most of the year by corporate press releases, experts and academics tied to the vaccine and the mainstream press.

For instance, mainstream media has had little, if anything, to say about the role of the vaccine developers’ private company – Vaccitech – in the Oxford-AstraZeneca partnership, a company whose main investors include former top Deutsche Bank executives, Silicon Valley behemoth Google and the UK government. All of them stand to profit from the vaccine alongside the vaccine’s two developers, Adrian Hill and Sarah Gilbert, who retain an estimated 10% stake in the company. Another overlooked point is the plan to dramatically alter the current sales model for the vaccine following the initial wave of its administration, which would see profits soar, especially if the now obvious push to make COVID-19 vaccination an annual affair for the foreseeable future is made reality.

Yet, arguably most troubling of all is the direct link of the vaccine’s lead developers to the Wellcome Trust and, in the case of Adrian Hill, the Galton Institute, two groups with longstanding ties to the UK Eugenics movement. The latter organization, named for the “father of eugenics” Francis Galton, is the re-named UK Eugenics Society, a group notorious for its promotion of racist pseudoscience and efforts to “improve racial stock” by reducing the population of those deemed inferior for over a century.

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Is this a Guardian infomercial? Meant to cast doubt on HCQ and azithromycin, and promote dexamethasone?

The Breakthrough Medicines That Could Change The Course Of Covid (G.)

It remains one of the most dramatically successful outcomes in the battle against Covid-19. A cheap treatment for inflammation was found to save lives of seriously ill patients while a trio of much-touted therapies were shown to have no effect. It is now estimated that the discovery of the effectiveness of the drug dexamethasone has saved around 650,000 lives across the world, according to Professor Martin Landray, a founder of the Recovery programme – the world’s largest randomised Covid-19 drugs trial – which revealed the medicine’s anti-Covid properties last summer. “In the UK alone, dexamethasone has already prevented more than 12,000 deaths,” he told the Observer.

The breakthrough demonstrates the power of large-scale randomised trials in pinpointing effective medicines and will be followed, in the next few weeks, with results from another handful of promising treatments being studied as part of the Recovery programme. These medicines, which could be crucial in the fight to contain Covid-19 next year, are: convalescent plasma, taken from recovering Covid patients; monoclonal antibodies, made by Regeneron, that were used to treat Donald Trump; two anti-inflammatory drugs, tocilizumab and colchicine; and aspirin. All are undergoing trials carried out by thousands of doctors and nurses on tens of thousands of patients in hospitals across Britain. First results are expected in January or early February.

Recovery was set up by Landray and Peter Horby at the start of the Covid-19 pandemic. The two Oxford scientists realised doctors would soon be looking for treatments once cases started pouring into hospitals but would need a clinical trial to find which were effective. It took them nine days from drafting their first protocol to the enrolling of their first patient, a process that normally takes nine months. One in 10 patients hospitalised with Covid have since entered the trial. And such numbers have been crucial to success, added Landray. Comparing 100 people who get a drug with 100 who do not can produce highly variable results. However, by randomising thousands of patients to get contrasting treatments, robust answers are produced.

“You find out which actually work,” said Landray. “In addition, we can discover which patients will benefit most. Will it be the old or the young or the immuno-compromised? You can only find that out if you have a trial with thousands of people in it.” So far, Recovery – short for Randomised Evaluation of Covid-19 Therapy – has pronounced on four medicines: azithromycin, an antibiotic; the drug combination lopinavir-ritonavir; hydroxychloroquine, a treatment for malaria and rheumatic diseases; and dexamethasone. Only the last saved lives or aided recovery. A hit rate of only one in four might seem poor value. However, the extraordinary numbers of lives saved thanks to dexamethasone demonstrates the value of the Recovery programme, the world’s largest randomised Covid-19 drug trial.

The programme also ensured time and money have not been wasted on medicines that were found not to help patients. And that will become an increasingly important issue, Landray said. “When we started Recovery we looked at cheap, widely available but promising drugs, and found one of them – dexamethasone – worked. But the medicines we’re looking at now will cost hundreds of pounds per treatment, so we need to be really sure they work before we deploy them on wide scale,” Landray said.

Read more …

The world keeps getting smaller.

Japan Halts All Foreign Arrivals Over UK COVID Variant (AP)

Japan is barring entry of all nonresident foreign nationals as a precaution against a new and potentially more contagious coronavirus variant that has spread across Britain. The Foreign Ministry says the entry ban will start Monday and last through Jan. 31. Last week, Japan banned nonresident foreigners coming from Britain and South Africa after confirming the new variant in seven people over the last two days — five from Britain who tested positive at airports and two others in Tokyo. Japan is also suspending the exemption of a 14-day quarantine for Japanese nationals and resident foreigners in a short-track program that began in November.


The entrants now must carry proof of a negative test 72 hours prior to departure for Japan and self-isolate for two weeks after arrival. Japan is struggling with surging cases since November. It has confirmed a total of 217,312 cases including 3,213 deaths, up 3,700 from the previous 24-hour period. Tokyo alone reported 949 cases, setting a new record, despite calls by experts and government officials for people to spend a “quiet” holiday season.

Read more …

“..an experimental nasal vaccine..”

Britain First To Infect Healthy Volunteers With Covid19 For Research (NYP)

The world’s first COVID-19 human challenge is about to start. Britain will infect 2,500 healthy volunteers with coronavirus to study how the infection behaves in the body — specifically the amount it takes before a person develops Covid-19, the Sun reported. The government has budgeted $45 million for the research, which is being conducted by Imperial College, the National Health Service’s Royal Free Hospital and pharmaceutical company hVIVO, a pioneer in viral human challenge models. Human challenge studies aren’t used often because of the ethical questions raised about infecting healthy people.


The Brits, ages 18 to 30, will get a dose of an experimental nasal vaccine, then be infected. The project gets underway in January; scientists expect the first results in May. Alastair Fraser-Urquhart, 18, of Stoke-on-Trent, raised his hand because he wants to help “bring the world out of the pandemic sooner.. “I can’t let this opportunity to do something, to really do something, pass me by when I’m at such low risk.” Fraser-Urquhart and his fellow volunteers will be paid about $5,300 for their three-week stay at the hospital’s specialist diseases clinic, where they will be monitored around the clock, the Mail Online reported. Later, researchers will use the human challenge model to find out how vaccines work to prevent coronavirus.

Read more …

January will be dark and bleak in many places.

Scientists Call For UK Lockdown After Rapid Spread Of Covid19 Variant (G.)

Cases of the new variant Covid-19 virus were confirmed in several European countries on Saturday, including Spain, Sweden and Switzerland. All were linked to people who had arrived from the UK. Meanwhile, Japan has announced it is banning all new entries of foreign nationals from Monday following the discovery of the variant in travellers from the UK. The news came at the same time as a further six million people in east and south-east England had tier 4 conditions, England’s strictest Covid level, imposed on them on Boxing Day. Lockdowns were also introduced in Scotland and Northern Ireland. Around 24 million people in England, more than 40% of the population, are now living in tier 4, as pressure mounts for the whole country to be put in this category.

Scientists from the Independent Sage group have urged that all regions of England be placed in tier 4, meaning that non-essential shops, hairdressers, and leisure and entertainment venues must close. Devolved nations were advised to bring forward their own national lockdowns. Tier 4 should include enhanced travel restrictions, the group said, while arguing that an emergency plan be introduced to enable safe education in January and February. This idea is supported by teaching unions, who have demanded that the government keeps schools closed as evidence has grown that the new virus variant is proving to be particularly infectious among children.

This point was backed by Paul Hunter, professor in medicine at the University of East Anglia. “If this new variant is behind the increase in this age group, then that is a big worry,” he said. France announced this weekend that it has discovered its first case of the new variant – a French citizen who arrived in Tours after travelling from London a week ago, according to health officials. In Madrid, Spanish officials said three cases of the new variant recently discovered in the country involved relatives of a man who had arrived from the UK on Christmas Eve, while the fourth case also involved a traveller from the UK. None of the patients was reported to be seriously ill.

Read more …

Blame it on Trump. But never on Pelosi and Schumer. Let alone Biden.

Two Pandemic Assistance Programs Expire, Leaving 12 Million Without Benefits (ZH)

With Congressional leaders feigning productivity for two months on a renewed stimulus – only for President Trump to veto their 11th hour porkfest and demand they increase direct stimulus checks from $600 to $2,000 per person – a series of assistance programs are set to lapse into the new year. Two of them, the Pandemic Unemployment Assistance (PUA) program and the Pandemic Emergency Unemployment Compensation (PEUC) program, will expire Saturday night, leaving around 12 million Americans without the assistance. As we noted in November, this would roughly translate into an income shortfall of $39BN in 1Q if these workers are unable to find work or alternative income support. BofA calculates that based on its work on fiscal multipliers, income loss of $39BN would translate into a 1.2% hit to growth on an annualized basis in 1Q 2021.

One of the two programs expiring Saturday, the PUA, provided unemployment benefits to around 7.3 million gig workers and others not eligible for traditional unemployment, according to the Century Foundation. The expiring programs come after lawmakers cobbled a $900 billion pandemic stimulus package to a $1.4 trillion omnibus spending bill, which President Trump vetoed over the sheer amount of pork and $600 direct checks, which he deemed to small. House Democrats will vote on a standalone bill Monday for $2,000 checks, while Congressional Republicans are expected to flatly reject it. Meanwhile, several additional programs are set to expire on December 31.

Additionally, the concurrent expiration of eviction moratorium, mortgage forbearance programs, and suspension of student loan payments could all be headwinds early next year, creating further obstacles. Unless Trump reverses course and signs the package on Tuesday, the government will shut down – sans another short-term bill to keep it limp things along into 2021.

Read more …

“..whoever it was behind this attack the one group who was definitely NOT behind it was the Russians.”

RussiaGate 2.0, Right on Schedule (Luongo)

Without offering any evidence or specifics, Pompeo said Russia was “pretty clearly” behind the cyberattack during an appearance on the conservative talk radio Mark Levin Show. “I can’t say much more, as we’re still unpacking precisely what it is, and I’m sure some of it will remain classified. But suffice it to say there was a significant effort to use a piece of third-party software to essentially embed code inside of US government systems and it now appears systems of private companies and companies and governments across the world as well,” Pompeo explained. Notice how there is no evidence given, just the typical intelligence agency, “believe me” line, which is your first clue that whoever it was behind this attack the one group who was definitely NOT behind it was the Russians.

This week’s cyber attack on the U.S. government was perfectly timed with the Electoral College submitting its votes to the Congress and Joe Biden claiming he’s president-elect. The reason why the release of this ‘attack’ on our government was perfectly timed is because it is a distraction from the growing unrest over the Democrats’ having stolen the election and cowering the courts into irrelevance. This is classic CIA-level misdirection from what was more likely a Chinese or, dare I say it, homegrown operation for the very purpose of blaming the Russians to tamp down the anger and confuse the MAGA crowd. And it resurrects the ghost of RussiaGate for the libs by putting Trump in a Catch-22.

If he doesn’t respond to this it keeps alive the smoldering embers of the TDS crowd watching Rachel Maddow that Trump really does have deep, covert ties to Russia. If he does react, what possible reaction could he take to escalate the tensions with Russia that are already one step below open warfare? Oh, and he has to respond to this while also fighting an uphill battle against the courts and his own bureaucracy to invoke his executive order involving outside interference into the election. [..] Provoking the exact reaction you’d expect from the BlueChecked Sneetches among the Twitterati. RussiaGate was an embarrassment that should have died years ago but it persists precisely because Trump refuses to formally concede and continues to give his people the opportunity to fight the Swamp.

The only way Putin and the Russians were behind this attack on the U.S. government was as a 5-d chess move where Trump invited them to do it on his behalf to ‘prove’ external interference in the election and allow Trump to cross the Rubicon, invoke the Insurrection Act and his 2018 EO on election interference. Yeah, by the way, John Le Carre died this week, life ain’t a movie and Trump isn’t that savvy a player. Ye gods, I wish he was. That we are in this mess proves he isn’t. This pronouncement by Pompeo was just good ol’ fashioned swamp double talk who continues his job of maintaining continuity of U.S. foreign policy on behalf of the Neoconservatives whose raison d’etre is the destruction of Russia to the exclusion of nearly every other consideration of any other human on the planet.

Don’t be confused by this nonsense. Whoever was behind this attack wasn’t the Russians. The motive for this operation lies squarely with China, The Davos Crowd, the Democrats and our own intelligence agencies trying to move the Overton Window away from the real problem, a stolen election. Outing Solarwinds and tying it directly to Dominion Voting Systems is your smoking gun.

Read more …

“The certainty of no tariffs, yes—but also of trade barriers, red tape and reduced future prosperity.”

This Brexit Deal Is Emphatically Nothing To Celebrate (Lis)

And so the long wait is finally over. Late in the afternoon on Christmas Eve, at the precise moment businesses were shutting up shop for a four-day national holiday, Boris Johnson took to a podium in Downing Street to herald a trade deal with the European Union. This was a good deal, he said. It allowed us to take back control of our money, borders, laws and fisheries. It provided certainty for businesses. Of course, the Prime Minister was wrong on almost all counts. This was the thinnest deal available within the ruinous red lines he had laid out, and preferable only to no deal at all. We already had control of everything he claimed to have won back—even fisheries, whose viability depends on exporting British catches into the EU. On only one point was he correct: his deal does indeed provide certainty. The certainty of no tariffs, yes—but also of trade barriers, red tape and reduced future prosperity.

The alternate press conferences in London and Brussels amply demonstrated who had made the concessions. This was an inevitable consequence of differential power, wealth and size, and the UK fell short. While both sides seem to have budged on fish, European Commission President Ursula von der Leyen emphasised the EU’s success in ensuring the far more important level playing field for competition. The UK would lose key rights such as financial passporting. It would no longer enjoy automatic access to the EU’s invaluable security databases. Fundamentally it was a question of how power is exercised. Sovereignty in the 21st century, she said, meant “pulling each other up, instead of trying to get back to your feet alone.”

While von der Leyen combined detailed information with sensitivity in tone, Johnson took to bluster. He dismissed the media question about security, asserting, without evidence, that everything would work out. He preposterously declared that the deal would eliminate non-tariff barriers, when the truth is our departure from the single market and customs union necessitate the greatest introduction of new bureaucracy and commercial obstacles in recent history. And he batted away the ending of UK access to the Erasmus scheme, which has offered new horizons to thousands of students across the continent. The new “Turing scheme,” he insisted bombastically, would be better and wider reaching.

Read more …

“.. they’re just manipulating this messaging to sanction certain events that they find politically palatable while demanding everybody stay home for the things that they don’t value .”

Glenn Greenwald: Coverage Of Coronavirus Pandemic ‘Media Misconduct’ (Hill)

Glenn Greenwald, co-founder of The Intercept, said the media’s coverage of the coronavirus pandemic was the “worst event of media misconduct.” Speaking on Hill.TV’s “Rising,” Greenwald said that the media’s coverage of the pandemic was initially geared toward forcing people to stay home, and shaming those who went outside for acting irresponsibly. Greenwald then added that the media shifted its tone around its coverage after the protests against police brutality over the summer following the police killing of George Floyd in May.


“Suddenly, it all turned to ‘What these people are doing is noble,’” he said. “And not only do you no longer have the obligation to stay at home, you now have the obligation to go and march against racism on the grounds that racism is the worst public [threat] than the coronavirus pandemic.” Greenwald noted that despite its coverage of the protests, the media continued to shame people who went to church or gathered for outdoor protests for different causes. “What it really made it seem like was there’s no trust or confidence due to public health authorities or media narratives surrounding this pandemic,” he said. “That they’re just manipulating this messaging to sanction certain events that they find politically palatable while demanding everybody stay home for the things that they don’t value .”

Read more …

 

 

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Mar 152019
 


Raphael The miraculous draught of fishes 1515

 

 

There are days, though all too scarce, when very nice surprises come my way. Case in point: yesterday I received a mail from David Holmgren after a long period of radio silence. Australia’s David is one of the fathers of permaculture, along with Bill Mollison, for those few who don’t know him. They first started writing about the concept in the 1970s and never stopped.

Dave calls himself “permaculture co-originator” these days. Hmm. Someone says: “one of the pioneers of modern ecological thinking”. That’s better. No doubt there. These guys taught many many thousands of people how to be self-sufficient. Permaculture is a simple but intricate approach to making sure that the life in your garden or backyard, and thereby your own life, moves towards balance.

My face to face history with David is limited, we spent some time together on two occasions only, I think, in 2012 a day at his home (farm) in Australia and in 2015 -a week- in Penguin, Tasmania at a permaculture conference where the Automatic Earth’s Nicole Foss was one of the key speakers along with Dave. Still, despite the limited time together I see him as a good and dear friend, simply because he’s such a kind and gracious and wise man.

In his mail, David asked if I would publish this article, which he originally posted on his own site just yesterday under the name “The Apology: From Baby Boomers To The Handicapped Generations”. I went for a shorter title (it’s just our format), but of course I will.

Dave has been an avid reader of the Automatic Earth for the past 11 years, we sort of keep his feet on the ground when they’re not planted and soaking in that same ground: “Reading TAE has helped me keep up to date..”

In light of the children’s climate protests today, which I have yet to voice my qualms about (and I have a few), it only makes sense to put into words a baby boomer’s apology. To have that phrased by someone with the intellect and integrity of David should have everyone sit up and pay attention, if you ask me. And perhaps it would be good if more people would try and do the same: apologize to those kids.

Here’s my formidable friend David Holmgren:

 

 

David Holmgren: It is time for us baby boomers to honestly acknowledge what we did and didn’t do with the gifts given to us by our forebears and be clear about our legacy with which we have saddled the next and succeeding generations.

By ‘baby boomers’ I mean those of us born in the affluent nations of the western world between 1945 and 1965. In these countries, the majority of the population became middle class beneficiaries of mass affluence. I think of the high birth rate of those times as a product of collective optimism about the future, and the abundant and cheap resources to support growing families.

By many measures, the benefits of global industrial civilisation peaked in our youth, but for most middle class baby boomers of the affluent countries, the continuing experience of those benefits has tended to blind us to the constriction of opportunities faced by the next generations: unaffordable housing and land access, ecological overshoot and climate chaos amongst a host of other challenges.

I am a white middle class man born in 1955 in Australia, one of the richest nations of the ‘western world’ in the middle of the baby boom, so I consider myself well placed to articulate an apology on behalf of my generation.

In the life of a baby boomer born in 1950 and dying in 2025 (a premature death according to the expectations of our generation), the best half the world’s endowment of oil – the potent resource that made industrial civilisation possible – will have been burnt. This is tens of millions of years of stored sunlight from a special geological epoch of extraordinary biological productivity. Beyond our basic needs, we have been the recipients of manufactured wants and desires. To varying degrees, we have also suffered the innumerable downsides, addictions and alienations that have come with fossil-fuelled consumer capitalism.

It is also true that our generation has used the genie of fossil fuels to create wonders of technology, organisation and art, and a diversity of lifestyles and ideas. Some of the unintended consequences of our way of life, ranging from antibiotic resistance to bubble economics, should have been obvious, while others, such as the depression epidemic in rich countries, were harder to foresee. Our travel around the world has broadened our minds, but global tourism has contaminated the amazing diversity of nature and traditional cultures at an accelerating pace. We have the excuse that innovations always have pluses and minuses, but it seems we have got a larger share of the pluses and handballed more of the minuses to the world’s poorest countries and to our children and grandchildren.

We were the first generation to have the clear scientific evidence that emergent global civilisation was on an unsustainable path that would precipitate an unravelling of both nature and society through the 21st century. Although climate chaos was a less obvious outcome than the no-brainer of resource depletion, international recognition of the reality of climate change came way back in 1988, just as we were beginning to get our hands on the levers of power, and we have presided over decades of policies that have accelerated the problem.

Over the years since, the adverse outcomes have shifted from distant risks to lived realities. These impact hardest on the most vulnerable peoples of the world who have yet to taste the benefits of the carbon bonanza that has driven the accelerating climate catastrophe. For the failure to share those benefits globally and curb our own consumption we must be truly sorry.

 


David Holmgren

 

In the 1960s and 70s, during our coming of age, a significant proportion of us were critical of what was being passed down to us by our parent’s generation who were also the beneficiaries of the western world system, which some of us baby boomers recognised as a global empire. But our grandparents and parents had been shaped by the rigours and grief of the first global depression of the 1890s, the First World War, The Great Depression of the 1930s and, of course, the Second World War. Aside from those who served in Vietnam, we have cruised through life avoiding the worst threats of nuclear annihilation and economic depression, even as people in other countries suffered the consequences of superpower proxy wars, coups, and economic and environmental catastrophes.

While some of us were burnt by personal and global events, we have mostly led a charmed existence and had the privilege to question our upbringing and culture. We were the first generation in history to experience an extended adolescence of experimentation and privilege with little concern or responsibility for our future, our kin or our country.

Most baby boomers were raised in families where commuting was the norm for our fathers but a home-based lifestyle was still a role model we got from our mothers. In our enthusiasm for women to have equal access to productive work in the monetary economy, few of us noticed that without work to keep the household economy humming we lost much of our household autonomy to market forces. By our daily commutes, mostly alone in our cars, we entrenched this massively wasteful and destructive action as normal and inevitable.

As we came into our power in middle age, the new technology of the internet, workshop tool miniaturisation and other innovations provided more options to participate in the monetary economy without the need to commute, but our generation continued with this insane collective addiction. In Australia, we faithfully followed the American model of not investing in public transport, which moderated the adverse impacts of commuting in European and other countries not so structurally addicted to road transport. By failing to build decent public transport and the opportunities for home-based work, and wasting wealth in a frenzy of freeway building that has choked our cities, our generation has consumed our grandchildren’s inheritance of high quality transport fuels and accelerated the onset of climate chaos. For this we are truly sorry.

In pioneering the double income family, some of us set the pattern for the next generation’s habit of outsourcing the care of children at a young age, making commuting five days a week an early childhood experience. This has left the next generation unable to imagine a life that doesn’t involve leaving home each day.

These patterns are part of a larger crisis created by the double income, debt-laden households with close to 100% dependence on the monetary economy. Without robust and productive household economies, our children and grandchildren’s generations will become the victims of savage disruptions and downturns in the monetary economy. For failing to maintain and strengthen the threads of self-provision, frugality and self-reliance most of us inherited from our parents, we should be truly sorry.

 

Some of us felt in our hearts that we needed to create a different and better world. Some of us saw the writing on the walls of the world calling for global justice. Some of us read the evidence (mostly clearly in the 1972 Limits To Growth) that attempting to run continuous material growth on finite planet would end in more than tears.

Some of us even rejected the legacy of previous generations of radicals’ direct action against the problems of the world, and instead decided we would boldly create the world we wanted by living it each day. In doing so, we experienced hard-won lessons and even created some hopeful models for succeeding generations to improve on in more difficult conditions. That our efforts at novel solutions often created more sound than substance, or that we flitted from one issue to another rather than doing the hard yards necessary to pass on truly robust design solutions for a world of less, leaves some of us with regrets for which we might also feel the need to apologise.

These experiences are shared to some degree by a minority in all generations but there is significant evidence that the 1960s and 70s was a time when awareness of the need for change was stronger. Unfortunately, a sequence of titanic geopolitical struggles that few of us understand even today, a debt-fuelled version of consumer capitalism, and propaganda against both the Limits to Growth and the values of the counterculture, saw most of us following the neoliberal agenda like sheep into the 1980s and beyond.

 

 

After having played with the privilege of free tertiary education, most of us fell for the propaganda and sent our children off to accumulate debts and doubtful benefits in the corporatised businesses that universities became. We convinced our children they needed more specialised knowledge poured down their throats rather than using their best years to build the skills and resilience for the challenges our generation was bequeathing to them. For this we must be truly sorry.

Many of us have been the beneficiaries of buying real estate before the credit-fuelled final stages of casino capitalism made that option a recipe for debt slavery for our children. Without understanding its mechanics we have contributed to – and fuelled with our faith – a bubble economy on a vast scale that can only end in pain and suffering for the majority. While some of us are members of the bank of Mum and Dad, when the property bubble bursts we could find ourselves following the bank chiefs apologising for the debt burden we encouraged our children to take on. Some of us will also have to apologise for losing the family home when we went guarantor on their mortgages. For not heeding the warnings we got with the GFC, we will be truly sorry.

Some of us have used our windfall wealth from real estate and the stock market to do good works, including creating small models of more creative and lower footprint futures that have inspired the minority of the next generations who can also see the writing on the wall. But most of us used our houses as ATMs for new forms of consumption that were unimaginable to our parents, from holidays around the world to endless renovations and a constant flow of updated digital gadgets and virtual diversions. For this frivolous squandering of our windfall wealth we must be truly sorry.

 

While our parents’ generation experienced the risks of youth through adversity and war we used our privilege to tackle challenges of our own choosing. Although some of us had to struggle to free ourselves from the cloying cocoon of middle class upbringing, we were the generation that flew like the birds and hitchhiked around the country and the world. How strange that on becoming parents (many of us in middle age) we believed the propaganda that the world was too dangerous for our children to do the same around the local neighbourhood. Instead we coddled them, got into the chauffeuring business, and in doing so encouraged their disconnection from both nature and community. As we see our grandchildren’s generation raised in a way that makes them an even more handicapped generation, we must be truly sorry for the path we took and the dis-ease we created.

After so many of us experimented with mind-expanding plants and chemicals, some of us were taken down in chemical addictions, but it was dysfunctional and corrupt legal prohibitions more than the substances themselves that were to blame for the worst of the damage. So how strange that when in middle age we got our hands on the levers of power, most of our generation decided to continue to support the madness of prohibition. For this we must be truly sorry: to have seen the light but then continued to inflict this burden on our children and grandchildren. For having acquiesced in the global ‘war on drugs’ that spread pain and suffering to some of the poorest peoples of the world we should be ashamed.

When the ‘war on drugs’ (a war against substances!) became the model for the ‘war on terror’ (war against a concept!) some of us reawakened the anti-war activism of the Vietnam years but in the end we mostly acquiesced to an agenda of trashing international law, regime change, shock and awe, chaos, and the death of millions; all justified by the 9/11 demolition fireworks that killed a small fraction of the number of citizens that die each year as a result of our ongoing addiction to personal motorised mobility.

While the shadow cast by climate change darkens our grandchilden’s future, the shadow of potential nuclear winter that hung over our childhood as not gone away. Many of us were at the forefront of the international movement to rid the world of nuclear weapons and thought the collapse of the Soviet Union had saved us from that threat. Coming into our power after the end of the cold war, our greatest crime on this geopolitical front has perhaps been the tacit support of our generation for first, the economic rape of Russia in the 1990s, and then its progressive encirclement by the relentless expansion of NATO. In Australia we have meekly added our resources and youth to more or less endless wars in the Middle East and central Asia justified by the fake ‘war on terror’. For this weakness as accessories to global crimes wasting wealth and lives to consolidate the western powers’ control of the first truly global empire, we should hang our collective heads in shame.

While some of our generation’s intellectuals continued to critique the ‘war on terror’ as fake, the vast majority of the public intellectuals of our generation, including those on the left, have supported the rapid rise of Cold War 2.0 to contain Russia, China and any other country that doesn’t accept what we now call ‘the rules based international order’ (code for ‘our empire’). This is truly astonishing when looked at in the context of our lived history. Let us hope that sanity can prevail as our empire fades and future generations don’t brand us as the most insane, war-mongering generation of all time. For our complicity in this grand failure of resistance we should be truly sorry.

 


click to order David’s latest

 

On another equally titanic front, the mistake of giving legal personhood to corporations was not one that our generation made. However most of us have contributed our work, consumption and capital to assist these self-organising, profit-maximising, cost-minimising machines of capitalism morphing into emergent new life forms that threaten to consume both nature and humanity in an algorithmic drive for growth. At a time of our seniority and numbers, we failed to use the Global Financial Crisis as an opportunity to bring these emergent monsters to heel. Do our children have the capacity to tame the monsters that we nurtured from fragile infants to commanding masters?

And if they do find the will to withdraw their work, consumption and capital enough to contain the corporations, will the economy that currently provides for both needs and wants unravel completely? This is a burden so great most of us continue to believe we have no responsibility or agency in such a dark reality. We trust that history will not place the burden of responsibility on our generation alone. But for our part in this failure of agency over human affairs we apologise. Further, we should accept with grace the consequences for our own wellbeing.

Most of us feel impotent when thinking of these failures to control the excesses of our era, but on a more modest scale we have mindlessly participated in taking the goods and passing on the debt to future generations. No more so than in our habitual acceptance of antibiotics from doctors to fix the most mundane of illnesses. For our parents’ generation, antibiotics represented the peak of medical science’s ability to control what killed so many of their parents and earlier generations.

For us, they became routine tools to keep us on the job and our children not missing precious days at school. Through this banal practice we have unwittingly conspired with our doctors to rapidly breed resistance to the most effective and low-cost antibiotics. We took for granted that future generations would always be able to work out ways to keep ahead of diseases with an endless string of new antibiotics. For having squandered this gift we are truly sorry.

 

Further, despite the fact that some of us have became vegetarian or even vegan, our generation’s demand for cheap chicken and bacon has driven the industrial dosing of animals with antibiotics on a scale that has accelerated the development of antibiotic resistance far faster than would have been the case from us dosing ourselves and our children. For supporting this and other such obscene systems of animal husbandry we apologise to our grandchildren and succeeding generations and hope that somehow an accommodation between humanity, animals and microbes is still possible.

We experienced and benefited from the emergent culture of rights and recognition for women, minorities and the people of varied abilities, and many of us who fought to extend and deepen those rights have pride in what we did. However some of us are beginning to fear that in doing so we contributed to creating new demands, disabilities, and fractious subcultures of fear and angst unimagined in previous generations. While we might not be in the driving seat of identity politics and culture wars, we raised our children to demand their rights in a world that is unravelling due to its multiple contradictions.

In this emerging context, strident demands for rights are likely to be a waste of valuable energy that younger people might better focus on becoming useful to themselves and others. For overemphasising the demand for rights and underplaying the need for responsible self- and collective-reliance, perhaps we should also be sorry.

And is this escalating demand for rights by younger people itself connected, even peripherally, to the increasing callous disregard for the rights of others? Especially in the case of refugees, this careless disregard has allowed political elites to use tough treatment of the less fortunate to distract from the gradual loss of shared privilege that once characterised the ‘lucky country’. To the shame of those in power over the last two decades (mostly baby boomers) those policies are now being adopted on a larger scale in Europe and the US.

 

 

In our lifetimes religious faith has declined. For many of our generation, this change represents a measure of humanity’s progress from a benighted past to a promising future. But the collective belief in science and evidence-based decision making has now become a new faith, “Scientism”, which seeks to drive out all other ways of thinking and being from the public space. At the same time, religious fundamentalism is now resurgent. Is this too something that our generation unleashed by preaching tolerance while enforcing an ideology we didn’t even recognise as such?

A significant sign of the good intentions of our generation has been our recognition that the ancient war against nature, which has plagued human life since the beginnings of agriculture, and indeed civilisation, must end. One powerful expression of our efforts has been the valuing of the biodiversity of life, especially local indigenous biodiversity. In the ‘New Europes’ of North America and the Antipodes, seeking to save indigenous biodiversity has grown into an institutionalised form of atonement for the sins of the forefathers.

While this seems like one of our achievements, even this we have bastardised with a new war against naturalised biodiversity. Perhaps the worst aspect of this renewed war against novel ecologies is that we have accepted the helping hand of Monsanto in using Roundup as the main weapon in our urban and rural habitats. The mounting evidence that Roundup may be worse than DDT will be part of our legacy. While history may excuse our parent’s generation for naïve optimism in relation to DDT, our generation’s version of the war on nature will not save us from harsh judgement. For this we should be truly sorry.

Of course any public apology in this country invites comparisons to the apology by governments to the stolen generation of Australian indigenous peoples for the wrongs of the past. This unfinished sorry business is beyond the scope of this apology, but it is an opportunity to reflect critically on our common self-perception of supporting indigenous peoples’ rights in contrast to the normalised racism of previous generations.

 

Our generation’s invitation to, and enabling of, Australians of indigenous descent to more fully participate in mainstream Australian society may have been a necessary step towards reconciliation; or could it have been a poison chalice drawing them even deeper into the dysfunctions of industrial modernity that I have already outlined. We can only hope that people with such a history of resilience and understanding in the face dispossession will take these additional burdens in their stride.

In any case, this apology is not one that comes from a position of invulnerable privilege, giving succour to those who are no threat to that privilege. For many baby boomers, now caring for parents and dealing with their deaths, we are more inwardly focused. For some of us, especially those estranged from parents, through this both painful and tender processes we are finally growing up. But a comic tragedy could play out in our declining years if a combination of novel disabilities, the culture of rights and amplified fears lead to our children and grandchildren’s generations mostly experiencing harder times as far worse than they might really be, and deciding we are the cause of their troubles.

We baby boomers will increasingly find that in our growing dependence on young people we will be subject to their perspectives, whims and prejudices. Hopefully we can take what we are given on the chin and along with our children and our grandchildren’s generations we can all grow up and work together to face the future with whatever capacities we have.

We might hope this apology is itself a wake-up call to the younger generations that are still mostly sleepwalking into the oncoming maelstroms. In raising the alarm we might hope our humble apology will galvanise the potential in young people who are grasping the nettle of opportunities to turn problems into solutions.

We hope that this apology might lead to understanding rather than resentment of our frailty in the face of the self-organising forces of powerful change that have driven the climaxing of global industrial civilisation. Finally, the task ahead for our generation is to learn how to downsize and disown before we prepare to die, with grace, at a time of our choosing, and in a way that inspires and frees the next generations to chart a prosperous way down.

 

 

Apr 292016
 
 April 29, 2016  Posted by at 8:40 am Finance Tagged with: , , , , , , , , , , ,  1 Response »


Harris&Ewing Treasury Building, Fifteenth Street, Washington, DC 1918

Asia’s Two Biggest Stock Markets Have Become An $11 Trillion Headache (BBG)
Japan’s Abenomics ‘Dead In The Water’ After US Currency Warnings (AEP)
Debt Is Growing Faster Than Cash Flow By The Most On Record (ZH)
The Typical American Couple Has Only $5,000 Saved For Retirement (MW)
US Corporate Profits on Pace for Third Straight Decline (WSJ)
Dollar Drops to 11-Month Low as Asian Stocks Fall; Oil Near $46 (BBG)
Sluggish US Growth Part Of A Worrying Global Trend (G.)
Renting In London More Costly Than Living In Most European 4-Star Hotels (Ind.)
China Banks’ Profit Growth Stalls As Bad Debts Rise (R.)
China’s Central Bank Raises Yuan Fixing by Most Since July 2005 (BBG)
Puerto Rico Risks Historic Default as Congress Chooses Inaction (BBG)
El Niño Dries Up Asia As Its Stormy Sister La Niña Looms (AFP)
German Inflation Turns Negative In April (R.)
Greece’s Perfect Debt Trap (Kath.)
German Minister Proposes Law To Limit Social Benefits For EU-Foreigners (DW)
Finland Parliament, Pressured By Weak Economy, Debates Euro Exit (R.)
Italy Says Austria ‘Wasting Money’ In Migrant Border Row (AFP)
One Nation in Europe Wants Refugees But Is Failing to Get Enough (BBG)

$11 trillion is merely the start.

Asia’s Two Biggest Stock Markets Have Become An $11 Trillion Headache (BBG)

Asia’s two biggest stock markets are jostling for an ignominious prize. Japan’s Topix index and China’s Shanghai Composite Index have tumbled more than 13% in 2016 to rank along Nigerian and Mongolian shares as the world’s worst performers. In the two years through the end of December, the Asian gauges outperformed MSCI’s global measure by at least 20 percentage points. The Bank of Japan stood pat on monetary policy Thursday, sending Tokyo stocks tumbling, while the Shanghai measure fell to a one-month low. The benchmark gauges in two of the world’s largest stock markets, which have a combined value of almost $11 trillion, are declining as investors detect a reduced appetite from policy makers to boost monetary stimulus.

Thursday’s BOJ decision was the first under Governor Haruhiko Kuroda where a majority of economists expected easing that didn’t materialize, while strategists now see China’s central bank keeping its main interest rate on hold until the fourth quarter. “Neither China nor Japan have a solid plan on dealing with their slowing economies,” said Tomomi Yamashita at Shinkin Asset Management. “There is still scope for easing, and as for Japan there are fiscal policies they can carry out. There’s still hope. But today there was just too much hope on the BOJ.”

The Topix sank 3.2% on Thursday after the central bank kept bond-buying, interest rates and exchange-traded fund purchases unchanged. The stock gauge has fallen for four straight days, handing losses to foreign investors who piled the equivalent of $4.9 billion into the market last week, the most in a year. Overseas traders were net sellers of Japanese equities for the first 13 weeks of 2016. “I give up,” Ryuta Otsuka at Toyo Securities in Tokyo said. “It’s a really disappointing result and I feel like throwing in the towel. It cuts because we had so much hope.” The Topix posted four straight annual gains through 2015, while even a $5 trillion rout in Chinese shares last summer couldn’t stop the Shanghai Composite from being the world’s top-performing major market over the last two years. The declines for both gauges in 2016 compare with a 2.5% advance by the S&P 500, which is closing in on last year’s record.

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Sometimes I wonder why it takes people so long to figure things out. I’ve been saying ever since Abenomics was launched that it would fail. Because it was always pie in the sky only, not based on any understanding of what caused spending to plummet.

Japan’s Abenomics ‘Dead In The Water’ After US Currency Warnings (AEP)

The Bank of Japan has been forced to retreat from further emergency stimulus after a blizzard of criticism at home and abroad, and warnings that extreme measures may now be doing more harm than good. The climb-down by the world’s most radical central bank is the latest sign that the monetary experiments since Lehman crisis may have run their course. The authorities have not exhausted their ammunition but are hitting political and legal constraints. The yen surged 3pc against the US dollar in the biggest one-day move in eight months and equities skidded across Asia after the BOJ failed to take fresh action to stave off deepening deflation, catching markets badly off guard. Governor Haruhiko Kuroda dashed hopes for ‘helicopter money’, warning that direct monetary financing of spending would be “illegal”.

Mr Kuroda insisted that the BoJ still has plenty of firepower and can at any time push interest rates even deeper into negative territory or boost bond purchases beyond the current $74bn a month. “If additional easing is needed, we will do so promptly,” he said. The reality is that negative rates (NIRP) have backfired badly on every front. They have prompted bitter protests from banks and money market funds caught in a squeeze. The yen has appreciated by 10pc since the BoJ first embarked on the policy in January, the exact opposite of what was intended. The rising yen – ‘endaka’ – is pushing Japan deeper into a deflation trap and undercutting the whole purpose of ‘Abenomics’. Core inflation has fallen to minus 0.3pc. The Nikkei has dropped 13pc this year, with contractionary wealth effects that make the BoJ’s task even harder.

“Negative rates have completely failed,” said David Bloom from HSBC. Washington will not tolerate the use of NIRP in any case, deeming it a disguised attempt to drive down exchange rates and export problems to the rest of the world. Jacob Lew, the US Treasury Secretary, warned Japan and the eurozone at the G20 in Shanghai in February that the Obama administration is losing patience with use of beggar-thy-neighbour tactics by countries already running a current account surplus. They are in effect shifting their excess capacity abroad. Germany in particular is coming into the US cross-hairs. Richard Koo from Nomura said the US is now on the warpath against currency manipulators. Mr Lew’s threat effectively renders Abenomics “dead in the water”. The Japanese economy is contracting again, caught in a debt-deflation vice.

Growth has been negative for four of the last eight quarters. What was once a ‘Lost Decade’ is turning into a “Lost Quarter Century” with no remedy in sight. “Their options are diminishing. I can’t see any way out of the debt-trap, and it is an acid test for the western world,” said Neil Mellor from BNY Mellon. Public debt is rising fast on a shrinking economic base, pushing the public debt ratio to an estimated 250pc of GDP this year. “The debt will never be ‘repaid’ in the normal sense of the word,” said Lord (Adair) Turner from the Institute for New Economic Thinking. Olivier Blanchard, the former chief economist for the International Monetary Fund, warned recently that country is nearing the end-game as the pool of domestic funding for the bond market starts to dry up and the Japanese treasury is forced to rely on much more costly capital from global investors.

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The predictable culmination of decades of a failed system is a hockeystick.

Debt Is Growing Faster Than Cash Flow By The Most On Record (ZH)

By now it is a well-known fact that corporations have no real way of generating organic growth in this economy, so they are relying on two things to boost share prices: multiple expansion (courtesy of central banks) and debt-funded buybacks (courtesy of central banks), the latter of which requires the firm to generate excess incremental cash. Incidentally, as SocGen showed last year, all the newly created debt in the 21st century has gone for just one thing: to fund stock buybacks.

 

The problem with this is that if a firm is going to continue to add debt to its balance sheet in order to fund buybacks (and dividends), then it needs to be able to generate enough operational cash flow in order to service the debt. Even if one makes the argument that debt is cheap right now, which may be true, or that central banks are backstopping it, which is certainly true in Europe as of a month ago, the fact remains that principal balances come due eventually also, and while debt can be rolled over, at some point the inability to generate cash from the operations catches up with them; furthermore even a small increase in rates means the rolling debt strategy is dies a painful death, as early 2016 showed.

In the following chart we can see net debt growth skyrocketing nearly 30% y/y, while EBITDA (cash flow) has been contracting for the past year. In fact, as SocGen shows below, the difference in the growth rate between these two most critical data series is now over 35% – the biggest negative differential in recent history.

 

Of course, every finance 101 student knows that a firm which has to borrow more cash than it is able to produce from its core operations is not a sustainable business model, and yet today’s CFOs, pundits and central bankers do not. And the next question is: what happens if the Fed does raise rates, what happens to the feasibility of these companies servicing the debt while also spending on R&D and CapEx (assuming there is any), and who can only afford the rising interest expense as a result of ever smaller interest rates? The answer is, first, massive cost cutting, i.e. layoffs, which would be a poetic way for the Fed’s disastrous policies to be reintroduced to the real economy… and then, more to the point, mass defaults. 

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Our entire societies will have to change dramatically because of this. Parents will have to move in with their children again. The children who earn much less than the parents did.

The Typical American Couple Has Only $5,000 Saved For Retirement (MW)

When American companies began switching from traditional pensions to self-directed 401(k)-like plans in the 1980s and 1990s, it was supposed to lead to a golden age of retirement security. No longer would workers be at the mercy of the company’s generosity or of Social Security’s solvency; workers themselves would be responsible for saving enough for a comfortable retirement. Some 30 years later, the results are in: The median working-age couple has saved only $5,000 for their retirement, according to an analysis of the Federal Reserve’s 2013 Survey of Consumer Finances by economist Monique Morrissey of the Economic Policy Institute. The do-it-yourself pension system is a disaster.

Even as the traditional company-funded pension has nearly disappeared and even as Social Security benefits are being slowly eroded, most workers haven’t saved enough to offset those losses to their retirement income. 70% of couples have less than $50,000 saved. Even those on the cusp of retirement — the median couple in their late 50s or early 60s — has saved only $17,000 in a retirement savings account, such as a defined-contribution 401(k), individual retirement account, Keogh or similar savings account. How long does $5,000, or even $50,000, last? Until the first big medical bill? Morrissey figures that about 43% of working-age families have no retirement savings at all. Among those who are five to 10 years away from retirement, 39% have no retirement savings of their own.

The sad fact is that most Americans are less prepared for retirement than Americans were 30 years ago. Few have enough pension wealth to make much difference in their lives once they stop working. The lack of savings in 401(k) and individual retirement accounts wouldn’t be a such big deal if retirees could rely on other sources of income, such as a traditional defined-benefit pension or Social Security. But those other income sources are declining. Fewer and fewer newly retired people are covered by a regular pension that provides a guaranteed monthly check based on salary and years of service. In addition, Social Security benefits are already being reduced as the normal retirement age is gradually increased from 65 to 67. Further reductions in Social Security benefits — by limiting the cost-of-living adjustment or by increasing the normal retirement age to 70, for example – would be disastrous for tomorrow’s retirees.


The median working-age couple had $5,000 in a retirement savings account as of the most recent data. The top 10% of savers had accumulated $274,000, according to the Economic Policy Institute analysis of Federal Reserve survey data

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Forget growth. Think survival.

US Corporate Profits on Pace for Third Straight Decline (WSJ)

U.S. corporate profits, weighed down by the energy slump and slowing global growth, are set to decline for the third straight quarter in the longest slide in earnings since the financial crisis. Weakness was felt across the board, with executives from Apple to railroad Norfolk Southern and snack giant Mondelez saying the current quarter remains tough. 3M, which makes tapes, filters and insulation for consumer electronics, forecast continued weak demand for that industry. Procter & Gamble reported sales declines in its five business categories despite price increases. “It’s a difficult environment indeed,” said PepsiCo CEO Indra Nooyi. “Most of the developed world outside the United States is grappling with slow growth. GDP growth in developing and emerging markets is also challenged.”

The concerns from company executives echo weak economic data released Thursday morning, which showed U.S. gross domestic product rose just 0.5% in the first quarter. Business investment and consumer spending on goods slowed, while consumer spending on services climbed. “On the one hand, consumer spending continued to be the primary economic driver in the U.S. On the other hand, industrial production has been disappointing,” United Parcel Service Inc. CEO David Abney said Thursday after the delivery company reported a 3.1% revenue increase. Based on the 55% of companies in the S&P 500 index that had already reported results Thursday morning, Thomson Reuters expects overall earnings to decline by 6.1% in the first quarter compared with a year earlier.

Even excluding energy companies, which are expected to have their worst quarter since oil prices began to plunge in 2014, profits are on pace to fall by 0.5%. Revenues are expected to fall 1.4% overall, or rise 1.7% excluding energy, according to Thomson Reuters. This would mark the S&P 500’s third consecutive quarter of declining earnings—the longest streak since the financial crisis. Revenues will have declined for five quarters in a row, outstripping even the four-quarter slide in 2008 and 2009.

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The US dollar is set to rise like a mushroom cloud and break the global camel’s back.

Dollar Drops to 11-Month Low as Asian Stocks Fall; Oil Near $46 (BBG)

The dollar dropped against all of its G-10 peers after weaker-than-expected U.S. economic growth dimmed prospects for a Federal Reserve interest-rate increase at a time when monetary easing is being put on hold elsewhere. Asian stocks fell and crude oil traded near $46 a barrel. The Bloomberg Dollar Spot Index sank to an 11-month low, while the yen was headed for its biggest weekly jump since 2008 after the Bank of Japan unexpectedly refrained from adding to record stimulus on Thursday. Japanese financial markets are shut for a holiday and an MSCI gauge of shares in the rest of the Asia-Pacific region slid for the third day in a row. The greenback’s decline is proving a plus for commodities, which are poised for their best monthly gain since 2010. Crude has jumped 20% since the end of March, while gold and silver are at 15-month highs.

The BOJ’s surprise decision capped a week of fence-sitting for central banks, with the Fed keeping interest rates steady for a third straight meeting and policy makers from New Zealand to Brazil also holding the line. The slowest pace of American economic expansion in two years reignited some concern over the global outlook, and pushed out bets on the potential timeline for tighter Fed policy. “Central banks look like they have run out of bullets to a degree,” said Mark Lister at Wellington’s Craigs Investment Partners. “We’re getting to that point where there are limits to the results they can get from anything more they do. This points to a fragile outlook with still a lot of risks out there.”

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Worrying only if it surprises you perhaps?!

Sluggish US Growth Part Of A Worrying Global Trend (G.)

It would be easy to dismiss the slowdown in the US economy to near-stall speed as a piece of rogue data resulting from the inability of number crunchers at the Department of Commerce in Washington to take account of the fact that large parts of the country are blanketed by snow during the winter. Easy but wrong. Back in spring 2015, the world’s biggest economy was expanding at an annual rate of 3.9%. In the third quarter the growth rate halved to 2%, before falling again to 1.4% in the final three months of the year. Describing the further easing to 0.5% in the first three months of 2016 as a temporary aberration – which was the knee-jerk response of upbeat analysts on Wall Street – is pushing it a bit.

A better explanation is that the sluggishness of US growth is part of a global trend, in which all the major economies are expanding more weakly than they were in the middle of last year. That’s the story for China, the eurozone, Japan and the UK. Each quarter, the data company Markit compiles a global Purchasing Managers’ Index for JP Morgan, with the intention of providing an up-to-date picture of economic conditions. The result for the first three months of 2016 showed activity at its lowest level in more than three years. Nor is there much hint of an improvement in the near future. In the US, firms are hacking back at investment – normally the sign of a looming recession. Consumer confidence has weakened, in part because real incomes are being squeezed.

As export-driven economies, Japan and the eurozone rely on a thriving US to buy their goods, so it is no surprise to find both struggling. The Bank of Japan will be forced to revisit its decision not to provide additional stimulus, since the upshot of its inaction has been a sharp rise in the yen, which will lead to even slower growth. Mario Draghi may again have to lock horns with the Bundesbank president, Jens Weidmann, in order to force through measures aimed at boosting activity in Europe. But the law of diminishing returns is at work. Each cut in interest rates, each fresh dollop of quantitative easing, has less of an impact than the last. The global economy is running out of steam and the conventional weapons are increasingly ineffective. This is not about blizzards shutting factories in Michigan. It goes much deeper than that.

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Britain is a sad joke.

Renting In London More Costly Than Living In Most European 4-Star Hotels (Ind.)

It is now cheaper to live in a 4-star hotel in two-thirds of European capitals than it is to rent the average London flat. Latest figures show that the average rent for a London flat is now £1,676 per month – or £55 a night – having increased by 30% in the last four years. For the same amount of money you could live year round in a hotel in Dublin, Rome, Paris or Brussels. Among the hotels that are more affordable than the average London rent include the Mercure Warszawa Grand in Warsaw that boasts a fitness centre, business facilities and two restaurants.

The Best Western Plus Hotel in Paris, the Nordic Hotel Domicil in Berlin and the Relais Castrum Boccea in Rome can also all be booked for less than £55 a night on travel websites for the 5th May this year. The figures were highlighted by Labour’s Mayoral candidate Sadiq Khan. He said: “Renting a home shouldn’t be a luxury, but under the Tories Londoners could live in 4-star luxury in most of Europe for what they pay. “Rents have gone up by 30% with a Tory Mayor and it would be exactly the same under Zac Goldsmith – with rents soaring above £2,000 a month. Mr Khan said he would create a London-wide social letting agency as well as naming and shaming bad landlords and setting up a landlord licensing scheme.”

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And that’s before the bad debts are properly accounted for, and while the PBoC still issues record amounts of additional debt.

China Banks’ Profit Growth Stalls As Bad Debts Rise (R.)

Four of China’s five largest state-owned banks barely posted any growth in profit in the first quarter, as widely expected, with rising bad debt and narrower margins hitting their bottom lines. The country’s banks face challenges from both defaulting borrowers, who are struggling amid a slowing economy, and successive cuts in interest rates which have eaten away at margins. Industrial and Commercial Bank of China, China’s biggest lender by assets, announced a 0.6% rise in net profit on Thursday. Bank of Communications posted a 0.5% rise in net profit in the first quarter and Agricultural Bank of China a slightly better 1.1% rise in profit. On Tuesday, Bank of China recorded a 1.7% rise in net profit in the fist quarter.

Non-performing loan (NPL) ratios remained flat -or rose- at all four lenders, while bad loan volumes increased, helping to sink loan-loss allowance ratios. At ICBC, the volume of non-performing loans increased 14% in the three-month period to 204.66 billion yuan ($31.60 billion), from 179.52 billion yuan at the end of 2015, sending the bank’s NPL ratio to 1.66% from 1.5%. ICBC’s loan-loss allowance ratio fell to 141.21%, from 156.34% at the end of December. ICBC also pointed to “the continuing impact of five interest rate cuts by the People’s Bank of China” since 2015 as a source of stress. The bank reported its interest margin (NIM) – the difference between its lending rate and the cost of borrowing – fell to 2.28 at the end of the first quarter, from 2.47 at end-December.

At BoC, NIM fell to 1.97 at end-March from 2.12 at end-December. BoCom did not disclose its NIM, but reported a 2.78% decline in net interest income, even as the bank’s net income rose half a% to 19.07 billion yuan for the first quarter. AgBank also did not disclose its NIM. In a bid to relieve banks of the mounting pile of bad debts, China’s central bank is preparing regulations that would allow commercial lenders to swap non-performing loans of companies for stakes in those firms, sources told Reuters in February.

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Going through the motions.

China’s Central Bank Raises Yuan Fixing by Most Since July 2005 (BBG)

China’s central bank responded to an overnight tumble in the dollar by strengthening its currency fixing the most since a peg was dismantled in July 2005. The reference rate was raised by 0.6% to 6.4589 per dollar. A gauge of the greenback’s strength sank 1% on Thursday after the Bank of Japan’s decision to unexpectedly keep monetary policy unchanged sent the yen surging. The offshore yuan was little changed at 6.4834 after gaining 0.3% in the last session. While the change in the fixing is extreme relative to the small moves of recent years, analysts said it reflects increased volatility in the dollar against other major exchange rates rather than a policy shift by the People’s Bank of China. The yuan weakened against a basket of peers even as it climbed versus the greenback on Friday.

“The offshore yuan’s reaction is muted, so it seems the market was already expecting a much stronger fixing,” said Ken Cheung, a currency strategist at Mizuho Bank in Hong Kong. “This is a reaction to the dollar weakness overnight, and there’s not much in the way of policy intention to read into.” The dollar reached the lowest level since June after the yen jumped the most in almost six years and data showed U.S. gross domestic product expanded in the first quarter at the slowest pace in two years. A Bloomberg replica of the CFETS RMB Index, which measures the yuan against 13 exchange rates, fell 0.2% to a 17-month low. The onshore yuan climbed less than 0.1%.

“The fixing is no surprise, the expectation for a stronger yuan fix was laid by the gains for the yen after the Bank of Japan announcement yesterday,” said Patrick Bennett at Canadian Imperial Bank of Commerce in Hong Kong. “The trade weighted basket continues to depreciate, albeit at a modest pace. But the key to the lower trade-weighted rate does not really lie with the PBOC, rather it is the dollar weakness against other major currencies which is the main driver.”

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May 1 is big, but still just a transfer station. July 1 is much bigger.

Puerto Rico Risks Historic Default as Congress Chooses Inaction (BBG)

Even if Puerto Rico manages to strike a last-minute deal to defer bond payments due in three days, the commonwealth’s financial collapse is about to enter an unprecedented phase. Anything short of making the $422 million payment that Puerto Rico says it can’t afford would be considered a technical default. More importantly, it opens the door to larger and more consequential defaults on debt protected by the island’s constitution, and raises the risk of putting efforts to resolve the biggest crisis ever in the $3.7 trillion municipal market into turmoil. Nearly 10 months after Governor Alejandro Garcia Padilla said the commonwealth was unable to repay all its obligations, Puerto Rico has failed to reach an accord on a broad restructuring deal presented to bondholders.

During that time the administration has delayed payments to suppliers, postponed tax refunds, grabbed revenue originally used to repay other bonds and missed payments on smaller agency debt. With its options drying up, no bondholder agreement in sight and Congressional action delayed, defaulting may be the next step for Puerto Rico. “It’s a game changer because it starts an actual legal process with teeth on both sides that can finally advance settlement negotiations,” said Matt Fabian at Municipal Market Analytics. “Pre-default negotiations are really not going anywhere. Post default might have a better chance.” Puerto Rico and its agencies racked up $70 billion in debt after years of borrowing to fill budget deficits and pay bills as its economy shrunk and residents left the island for work on the U.S. mainland.

The island’s Government Development Bank, which lent to the commonwealth and its municipalities, is in talks with creditors to avoid defaulting on the $422 million that’s due May 1. The commonwealth may use a new debt moratorium law if it cannot defer that GDB payment, Jesus Manuel Ortiz, a spokesman for Garcia Padilla, said. While a GDB default would be the largest yet by Puerto Rico, a missed payment on its general obligations would signal to investors that the commonwealth is finally executing on its warnings that it cannot pay its debts. Puerto Rico and its agencies owe $2 billion on July 1, including a $805 million payment on its general-obligation bonds, which are guaranteed under the island’s constitution to be paid before anything else.

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“..60 million people worldwide requiring “urgent assistance..”..

El Niño Dries Up Asia As Its Stormy Sister La Niña Looms (AFP)

Withering drought and sizzling temperatures from El Nino have caused food and water shortages and ravaged farming across Asia, and experts warn of a double-whammy of possible flooding from its sibling, La Nina. The current El Nino which began last year has been one of the strongest ever, leaving the Mekong River at its lowest level in decades, causing food-related unrest in the Philippines, and smothering vast regions in a months-long heat wave often topping 40 degrees Celsius (104 Fahrenheit). Economic losses in Southeast Asia could top $10 billion, IHS Global Insight told AFP. The regional fever is expected to break by mid-year but fears are growing that an equally forceful La Nina will follow.

That could bring heavy rain to an already flood-prone region, exacerbating agricultural damage and leaving crops vulnerable to disease and pests. “The situation could become even worse if a La Nina event — which often follows an El Nino — strikes towards the end of this year,” Stephen O’Brien, UN under-secretary-general for humanitarian affairs and relief, said this week. He said El Nino has already left 60 million people worldwide requiring “urgent assistance,” particularly in Africa. Wilhemina Pelegrina, a Greenpeace campaigner on agriculture, said La Nina could be “devastating” for Asia, bringing possible “flooding and landslides which can impact on food production.” El Nino is triggered by periodic oceanic warming in the eastern Pacific Ocean which can trigger drought in some regions, heavy rain in others.

Much of Asia has been punished by a bone-dry heat wave marked by record-high temperatures, threatening the livelihoods of countless millions. Vietnam, one of the world’s top rice exporters, has been particularly hard-hit by its worst drought in a century. In the economically vital Mekong Delta bread basket, the mighty river’s vastly reduced flow has left up to 50% of arable land affected by salt-water intrusion that harms crops and can damage farmland, said Le Anh Tuan, a professor of climate change at Can Tho University. More than 500,000 people are short of drinking water, while hotels, schools and hospitals are struggling to maintain clean-water supplies. Neighbouring Thailand and Cambodia also are suffering, with vast areas short of water and Thai rice output curbed.

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You would think the reason to continue executing a policy lies in its success rate. Not so, you poor innocent you. In reality, the very failure of a policy is reason to continue it: if the strongest eurozone economy with low unemployment does not show any signs of inflationary pressures, the ECB after all might have a point in continuing its ultra-loose monetary policy

German Inflation Turns Negative In April (R.)

German consumer prices unexpectedly fell in April, data showed on Thursday, illustrating the scale of the task the ECB faces in trying to propel inflation back to its target range. The eurozone has struggled with little or no inflation for the past year and the ECB expects the bloc-wide figure to turn negative again before slowly ticking up, undershooting its goal of just under 2% for years to come. The ECB unveiled a surprisingly large stimulus package in March but falling inflation expectations have fueled expectations of even more easing, possibly as early as June, when the bank’s staff present new growth and inflation forecasts. “It might be hard for some German ECB critics to digest, but if the strongest eurozone economy with low unemployment does not show any signs of inflationary pressures, the ECB after all might have a point in continuing its ultra-loose monetary policy,” ING Bank economist Carsten Brzeski said.

Separate data on Thursday showed unemployment unexpectedly fell in April, with the jobless rate remaining at its lowest in more than 25 years. German consumer prices, harmonized to compare with other European countries (HICP), fell by 0.1% on the year after a 0.1% rise in March, the Federal Statistics Office said. The Reuters consensus forecast was for a zero reading. On a non-harmonized basis, consumer prices fell 0.2% on the month and inched up 0.1% on the year. A breakdown showed energy remained the main drag while the food, services and rental costs increased at a slower pace. Analysts said the German data suggested that the April inflation rate for the whole eurozone, due out on Friday, would also turn negative again.

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It’s high time now to see how the Greek debt trap is linked to the article above about German deflation. The link continues with the article below this one: Germany monopolizes the benefits of being in the EU.

Greece’s Perfect Debt Trap (Kath.)

The longer we spend in the hole the harder it is to get out. As long as the negotiations with the troika are not finished and the economy is starved of cash, as long as businesses cannot plan for the next day and citizens remain wary of returning cash to the banks, recovery becomes even more difficult. The government promises that after a positive evaluation by creditors the economy will bounce back like a spring released. Even if we were to accept this theory – which would also demand huge investments – a positive evaluation is still the prerequisite. Despite the progress made in the talks, the economy is deteriorating. Indicative of this is a growing inability to pay taxes. Today outstanding tax debts exceed €87 billion. At the end of 2012 they were at €55.1 billion.

They have grown by 32 billion euros since then, equaling the amount raised by tax rate increases over the same period (as Kathimerini reports on Friday). In the first quarter of 2016, outstanding debts increased by €3.22 billion and, by the end of the year, may exceed last year’s total of €13.48 billion. Nonperforming bank loans, which were at 8.2% of the total at the start of 2010, were at 36.4% at the end of 2015. Unpaid dues to social security funds came to €15.78 billion at the end of the first quarter, from €13.02 billion last September. The swelling of these debts did not begin under this government. Previous governments and opposition parties, as well as creditors, all played a role in this. From the start of the crisis, citizens/taxpayers have been buffeted by uncertainty, despair and anger.

The expectation of debt relief encouraged delays in payments, while excessive taxation meant that outstanding payments multiplied. Also, the state, unable to meet its own obligations, held back on paying what it owed to taxpayers. With the worsening economy and the lack of trust, capital controls were inevitable and, of course, drove us deeper into trouble. This anxiety is set to continue. The government cannot undertake the burden of what creditors demand, and the creditors, in turn, appear disinclined to help out. As the Federation of Greek Industries noted in its weekly bulletin on Thursday: “The government’s insistence on raising taxes instead of cutting expenses, and the recessionary impact that this will have on the economy, leads to the troika’s shortsighted persistence on contingency measures which, unfortunately, increase further the recessionary wave and will be the final blow to the economy.”

We are caught in the perfect trap. As long as the negotiations drag on, the instability and lack of confidence will increase outstanding debt at all levels, prevent growth and, in turn, demand even harsher measures. The only way out is for both the government and creditors to show good will and trust each other. After the past year this seems a most unlikely leap of faith.

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Dividing and demolishing the Union brick by brick. Germany wants to be left with the benefits of that union only, and to shed the drawbacks. Not going to work out well.

German Minister Proposes Law To Limit Social Benefits For EU-Foreigners (DW)

EU foreigners living in Germany may soon have to wait five years before qualifying for social benefits, reported newspapers on Thursday, in reference to a new proposed law from German Labor Minister Andrea Nahles. “We have to stop immigration into the social security system,” Nahles said during an interview in December when she announced plans to restrict social benefits for non-German EU citizens. She added that the restrictions were a matter of “self defense” for Germany. Should the law pass, foreigners from fellow EU member states will be strictly excluded from social assistance if they do not work in Germany or have not acquired social security rights through previous work in Germany. With those same conditions, EU foreigners would also be shut out from Germany’s benefit system for the unemployed, which is known as “Hartz IV.”

EU citizens can eventually gain access to social benefits – but only if they have been living in Germany for five years without state assistance. The draft law, however, provides so-called “transition benefits” for those EU foreigners who no longer qualify for social assistance in Germany. For a maximum of four weeks, those affected will receive assistance to cover the costs of food, housing, and health care. They will also be given a loan to cover costs for a return trip to their home country, where they can then apply for social benefits. The new measures are a direct response to a decision by Germany’s Federal Social Court late last year concerning immigrants from EU countries. In December 2015, the court ruled that EU-foreigners would only acquire entitlement to social benefits after living in the country for at least six months. The decision led to backlash from local authorities, who feared the social system would be overburdened.

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This is something we’ll see a lot of. It’s over. What’s left is pretense.

Finland Parliament, Pressured By Weak Economy, Debates Euro Exit (R.)

Finnish lawmakers on Thursday held a rare debate on whether the Nordic country should quit the euro after 53,000 people signed a petition to force the issue into parliament. The petition, although very unlikely to lead to Finland’s exit of the 19-member currency bloc, highlights the growing level of frustration over the country’s economic performance amid rising unemployment, weak outlook and government austerity. The initiative demands a referendum on euro membership, but this would only go ahead if parliament backed such a vote. Although no political group has proposed a euro exit, some euro-sceptic parliamentarians cited lack of independent monetary policy as a problem and said Finland should have held a referendum before adopting the euro in 1998.

Nordic neighbors Sweden and Denmark voted against adopting the euro a few years later. “The euro is too cheap for Germany and too expensive for the rest of Europe, it does not fulfill requirements of an optimal currency union,” said Simon Elo, an MP from the co-ruling euro-sceptic Finns party. The Finnish economy grew by just 0.5% last year after three years of contraction. The stagnation stemmed from a string of problems, including high labor costs, the decline of Nokia’s former phone business and a recession in neighboring Russia. This year, Finland’s economy is expected to grow slower than in any other EU country, except Greece. Some economists say the country’s prospects would improve if it returned to the markka currency which could then devalue against the euro.

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Union? What union?! Get real.

Italy Says Austria ‘Wasting Money’ In Migrant Border Row (AFP)

Italy told Austria Thursday it would prove Vienna was “wasting money” on anti-migrant measures and closing the border between the two countries would be “an enormous mistake”. Austrian Interior Minister Wolfgang Sobotka, who has vigorously defended the controversial package which was driven by a surge of the far right, met his counterpart Angelino Alfano over the plans, which have infuriated Italians. Alfano said “the numbers do not support” fears of a mass movement of migrants and refugees across the famous Brenner Pass in the Alps. Sobotka said preparations would continue for the construction of a 370-metre (yard) barrier which would be up to four metres (13 foot) high in places, but Alfano said the feared-for crisis would not materialise and “we will show them it is money wasted”.

Italian Premier Matteo Renzi has warned that closing the pass would be a “flagrant breach of European rules” and is pushing the European Commission to force Austria to hold off on a move many fear could symbolise the death of the continent’s Schengen open border system. On Thursday he described the bid to close the border as being “utterly removed from reality”. A European Commission spokesman said the body had “grave concerns about anything that can compromise our ‘back to Schengen’ roadmap”. Its chairman Jean-Claude Juncker is expected to discuss the issue with Renzi at talks in Rome on May 5. The Vienna government is under intense domestic pressure to stem the volume of asylum seekers and other migrants arriving on its soil with the far-right surging in polls.

UN chief Ban Ki-moon hit out Thursday at what he called “increasingly restrictive” refugee policies in Europe, saying he was “alarmed by the growing xenophobia here” and elsewhere in Europe, in a speech to the Austrian parliament. More than 350,000 people, many of them fleeing conflict and poverty in countries like Syria, Iraq and Eritrea, have reached Italy by boat from Libya since the start of 2014, as Europe battles its biggest migration crisis since World War II. Wedged between the Italian and Balkan routes to northern Europe, Austria received 90,000 asylum requests last year, the second highest in per capita terms of any EU country. Legislation approved Wednesday by the Austrian parliament enables the government to respond to spikes in migrant arrivals by declaring a state of emergency which provides for asylum seekers to be turned away at border points.

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Portugal sees what Canada sees too. Question is how deliberate is the EU policy of being so slow in relocating refugees to countries asking for them? Portugal wants 10,000. Canada will take a multiple of that.

One Nation in Europe Wants Refugees But Is Failing to Get Enough (BBG)

Portugal has offered to host 10,000 of the refugees who’ve landed on Europe’s shores from the globe’s war-torn zones. So far, it has taken in 234. Not because it doesn’t want to. Rather, because few have come knocking at its door. “It’s difficult to quickly find refugees that can come to Portugal,” President Marcelo Rebelo de Sousa said on Friday as he met migrants in Evora, southern Portugal. As the refugee crisis stretches the struggling Greek government and rattles politics in Germany and beyond, Portugal’s willingness to share the burden isn’t getting a lot of attention. While the country blames a lack of coordination in Europe and administrative roadblocks, the contrast between its economic performance and that of Germany, which admitted more than 1 million migrants in 2015 alone, may also be playing a role.

Although the Portuguese economy recovered in 2014 and accelerated last year after shrinking for three years through 2013, joblessness remains high. Unemployment, which has eased to 12.3% after peaking at 17.5% in 2013, is still almost triple the German rate of 4.3%, and that may continue to dent Portugal’s allure. “It’s not a very appealing destination given the unemployment rate,” said Rui Serra, chief economist at Caixa Economica Montepio Geral in Lisbon. “It’s easier for an immigrant to go to the center of Europe where there is a more concentrated market than in some countries of the periphery like Portugal. In the center of Europe income per capita is higher.” Prime Minister Antonio Costa says there are structural problems in the euro zone that aggravate the disparities.

“That structural problem has to do with the asymmetry between the different economies,” he said in Athens on April 11. “It’s necessary to give a new impulse to the convergence of our economies with the more developed economies of the euro zone.” With the country’s demographics in mind, the Portuguese government has laid out the welcome mat for refugees. Portugal’s population has declined and aged every year from the end of 2011 to about 10.37 million at the end of 2014 as a weak economy has led many working-age residents to leave. Germany’s population, while also aging, still increased overall every year in the same period.

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Nov 152014
 
 November 15, 2014  Posted by at 11:53 am Finance Tagged with: , , , , , , , , , ,  2 Responses »


DPC Elephants in Luna Park promenade, Coney Island 1905

Oil Price Slump To Trigger New US Debt Default Crisis (Telegraph)
How Low Can the Price of Oil Plunge? (WolfStreet)
Russia Braces for ‘Catastrophic’ Drop in Oil Prices (Bloomberg)
What Really Happened In Beijing Between Putin, Obama and Xi (Salon)
Can Low Oil Prices Be Good for the Environment? (AP)
More Than 4 In 10 Americans Still Exhaust Unemployment Benefits (MarketWatch)
Most Americans Make Less Than $20 Per Hour (MarketWatch)
The Reason Small Businesses Are Disappearing (Zero Hedge)
Italy’s Crazy New Economy from Hell Suffocates Small Businesses (WolfStreet)
Beppe Grillo: The Euro Is Destroying The Italian Economy (Zero Hedge)
Eurozone Dodges Recession But Submerges In ‘Lost Decade’ (AEP)
Who Will Pay for China’s Bust? (Bloomberg)
China Slowdown Deepens as Targeted Stimulus Fails (Bloomberg)
Take Cover Now – They Don’t Ring A Bell At The Top (David Stockman)
Asset Bubbles Are Top Concern for US Heartland’s Fed Banker (Bloomberg)
Fed’s Bullard Still Wants Rate Rise in Q1 2015 (Dow Jones)
Turkish Hackers Crack Electric Utility; Delete $670 Billion Of Pending Bills (ZH)
California Pension Funds Are Running Dry (LA Times)
Pope Francis’s ‘Holy War’ On Capitalism And Toxic Inequality (Paul B. Farrell)

The end of shale as we know it.

Oil Price Slump To Trigger New US Debt Default Crisis (Telegraph)

Remember the global financial crisis, triggered six years ago when billions of dollars of dodgy loans – doled out by banks to subprime borrowers and then resold numerous times on international debt markets – began to unravel and default? Stock markets plunged, banks collapsed and the entire global financial system teetered on the brink of catastrophe. Well a similarly chilling economic scenario could be set off by the current collapse in oil prices. Based on recent stress tests of subprime borrowers in the energy sector in the US produced by Deutsche Bank, should the price of US crude fall by a further 20pc to $60 per barrel, it could result in up to a 30pc default rate among B and CCC rated high-yield US borrowers in the industry. West Texas Intermediate crude is currently trading at multi-year lows of around $75 per barrel, down from $107 per barrel in June. “A shock of that magnitude could be sufficient to trigger a broader high-yield market default cycle, if materialised,” warn Deutsche strategists Oleg Melentyev and Daniel Sorid in their report.

Five years ago at the beginning of what has become known as the US shale oil revolution, drillers started to load up on debt to fund their operations and acquire new acreage as vast areas of North America started to open up for exploration. In 2010, energy and materials companies made up just 18pc of the US high-yield index – which tracks sub-investment grade borrowers – but today they account for 29pc of the measure after drilling firms spent the past five years borrowing heavily to underwrite the operations. The result of this debt splurge has been a spectacular rise in US oil and gas output. Latest estimates suggest that by the end of the decade the US will have outstripped even Saudi Arabia and Russia in terms of oil production. The development of new shale resources in North America and the opening up of fields in the Arctic seas off Alaska could see the country pumping 14.2m barrels per day (bpd) of oil and petroleum liquids by 2020, up from 7.5m bpd in 2013.

This rush to pump more oil in the US has created a dangerous debt bubble in a notoriously volatile segment of corporate credit markets, which could pose a wider systemic risk in the world’s biggest economy. By encouraging ever more drilling in pursuit of lower oil prices, the US Department of Energy has unleashed a potential economic monster and pitched these heavily debt-laden shale oil drilling companies into an impossible battle for market share against some of the world’s most powerful low-cost producers in the Organisation of Petroleum Exporting Countries (Opec). It’s a battle the US oil fracking companies won’t win.

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Excellent piece by Wolf Richter. If you want to know where oil is going, read it.

How Low Can the Price of Oil Plunge? (WolfStreet)

It is possible that a miracle intervenes and that the price of oil bounces off and zooms skyward. We’ve seen stocks perform these sorts of miracles on a routine basis, but when it comes to oil, miracles have become rare. As I’m writing this, US light sweet crude trades at $76.90 a barrel, down 26% from June, a price last seen in the summer of 2010. But this price isn’t what drillers get paid at the wellhead. Grades of oil vary. In the Bakken, the shale-oil paradise in North Dakota, wellhead prices are significantly lower not only because the Bakken blend isn’t as valuable to refiners as the benchmark West Texas Intermediate, but also because take-away capacity by pipeline is limited.

Crude-by-rail has become the dominant – but more costly – way to get the oil from the Northern Rockies to refineries on the Gulf Coast or the East Coast. These additional transportation costs come out of the wellhead price. So for a particular well, a driller might get less than $60/bbl – and not the $76.90/bbl that WTI traded for at the New York Mercantile Exchange. Fracking is expensive, capital intensive, and characterized by steep decline rates. Much of the production occurs over the first two years – and much of the cash flow. If prices are low during those two years, the well might never be profitable. Meanwhile, North Sea Brent has dropped to $79.85 a barrel, last seen in September 2010.

So the US Energy Information Administration, in its monthly short-term energy outlook a week ago, chopped down its forecast of the average price in 2015: WTI from $94.58/bbl to $77.55/bbl and Brent from $101.67/bbl to $83.24/bbl. Independent exploration and production companies have gotten mauled. For example, Goodrich Petroleum plunged 71% and Comstock Resources 58% from their 52-week highs in June while Rex Energy plunged 65% and Stone Energy 54% from their highs in April. Integrated oil majors have fared better, so far. Exxon Mobil is down “only” 9% from its July high. On a broader scale, the SPDR S&P Oil & Gas Exploration & Production ETF is down 28% from June – even as the S&P 500 set a new record. So how low can oil drop, and how long can this go on?

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Did they know beforehand it would come?

Russia Braces for ‘Catastrophic’ Drop in Oil Prices (Bloomberg)

President Vladimir Putin said Russia’s economy, battered by sanctions and a collapsing currency, faces a potential “catastrophic” slump in oil prices. Such a scenario is “entirely possible, and we admit it,” Putin told the state-run Tass news service before attending this weekend’s Group of 20 summit in Brisbane, Australia, according to a transcript e-mailed by the Kremlin today. Russia’s reserves, at more than $400 billion, would allow the country to weather such a turn of events, he said. Crude prices have fallen by almost a third this year, undercutting the economy in Russia, the world’s largest energy exporter.

Even the central bank’s forecast of zero growth next year may be in danger as the International Energy Agency forecasts a deepening rout in oil prices as the market enters a period of weaker demand. Brent crude, the grade traders look at for pricing Russia’s Urals main export blend, has collapsed into a bear market as leading members of the Organization of Petroleum Exporting Countries resisted calls to cut production and U.S. output climbed to the highest level in three decades because of the shale boom. Brent is heading for its eighth weekly decline after sliding below $80 for the first time in four years. Futures were at $78.29 a barrel in London today, down 6.1% this week and 29% this year.

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Must read from Patrick Smith at Salon.

What Really Happened In Beijing Between Putin, Obama and Xi (Salon)

By way of events on the foreign side, the past few weeks start to resemble some once-in-a-while event in the heavens when everyone is supposed to go out and watch as the sun, moon and stars align. There are lots of things happening, and if we put them all together, the way Greek shepherds imagined constellations, a picture emerges. Time to draw the picture. The situation on the ground in Ukraine is getting messy again. Equally, events of the past year now leave Ukraine’s economy not far from sheer extinction. You have not read of this because it does not fit the approved story, but Ukraine’s heart barely beats. Further east, we hear in the financial markets that the ruble’s decline brings Russia to the brink of another financial collapse. Let’s see. Oil prices are now below $80 a barrel. It costs me nearly $20 less to put gasoline in my car than it did a year ago, and good enough. But why has the price of crude tumbled in so short an interval? It makes little sense when you gather the facts, and – goes without saying – you get no help with that from our media.

Let’s keep on trucking. Secretary of State Kerry went to Oman for another round of talks on the Iranian nuclear question last weekend. Russia recently emerged as a potentially key part of a deal, which will be the make-or-break of Kerry’s record. In effect, he now greets Russian Foreign Minister Sergei Lavrov with one hand and punches him well below the belt with the other. Somewhere beyond our view this must make sense. En avant! Obama went to Beijing last week for a sit-down with Xi Jinping, who makes Vladimir Putin look like George McGovern when he wants to, which is not infrequently. Still in the Chinese capital, our president then attended a meeting with other Asian leaders to push a trade agreement, one primary purpose of which is to isolate China by bringing the rest of the region into the neoliberal fold. (Or trying to. Washington will never get the overladen, overimposing Trans-Pacific Partnership off the ground, in my view.)

A big item on Xi’s agenda — he was in on the Pacific economic forum, too — was the recent launch of an Asians-only lending institution intended to rival the Asian Development Bank, the World Bank affiliate doing the West’s work in the East. Being entirely opposed to people helping themselves advance without American assistance and all that goes with it, Washington used all means possible to sink this ship. When Obama got off the plane in Beijing, the Asian Infrastructure Investment Bank had $50 billion in capital and 20 members, more to come in both categories. Xi, meantime, had a productive encounter — another — with the formidable Vlad. My sources in attendance tell me both put in strong performances. In short order, Russia will send enough natural gas eastward to meet much of China’s demand and — miss this not — in the long run could price out American supplies in other Pacific markets, which are key to the success of the current production boom out West.

This is a lot of dots to connect. As I see it, the running themes in all this are two: There is constructive activity and there is the destructive. Readers may think this oversimplifies, but for this there is the ever-lively comment box below. I am willing to listen. Let’s go back to early September. On the 5th, Germany brokered a cease-fire between the Ukraine government in Kiev and the rebels in the eastern Donbass region. Washington made it plain it wanted no part of this, preferring to continue open hostilities. And then strange things happened. Less than a week after the Minsk Protocol was signed, Kerry made a little-noted trip to Jeddah to see King Abdullah at his summer residence. When it was reported at all, this was put across as part of Kerry’s campaign to secure Arab support in the fight against the Islamic State.

Stop right there. That is not all there was to the visit, my trustworthy sources tell me. The other half of the visit had to do with Washington’s unabated desire to ruin the Russian economy. To do this, Kerry told the Saudis 1) to raise production and 2) to cut its crude price. Keep in mind these pertinent numbers: The Saudis produce a barrel of oil for less than $30 as break-even in the national budget; the Russians need $105. Shortly after Kerry’s visit, the Saudis began increasing production, sure enough – by more than 100,000 barrels daily during the rest of September, more apparently to come. Last week they dropped the price of Arab Light by 45 cents a barrel, Bloomberg News just reported. This has proven a market mover, sending prices to $78 a barrel at writing.

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No worries, mate, we’ll find a way to screw that up too.

Can Low Oil Prices Be Good for the Environment? (AP)

Deepwater drilling rigs are sitting idle. Fracking plans are being scaled back. Enormous new projects to squeeze oil out of the tar sands of Canada are being shelved. Maybe low oil prices aren’t so bad for the environment after all. The global price of oil has plummeted 31% in just five months, a steep and surprising drop after a four-year period of prices near or above $100 a barrel. Not long ago a drop of that magnitude would have hit the environmental community like a gut-punch. The lower the price of fossil fuels, the argument went, the less incentive there would be to develop and use cleaner alternatives like batteries or advanced biofuels.

But at around $75 a barrel, the price is high enough to keep investments flowing into alternatives, while giving energy companies less reason to pursue expensive and risky oil fields that also pose the greatest threat to the environment. “Low prices keep the dirty stuff in the ground,” says Ashok Gupta, director of programs at the Natural Resources Defense Council. Economists and environmentalists caution that if the price goes too low, and stays there, consumption could swell and the search for alternatives could stop. They say a good price range for the environment could be somewhere between $60 and $80. As oil demand in developing countries began rising in the last decade, drillers struggled to keep up and prices began to rise. It seemed the world might be running out of oil. Investors poured money into advanced biofuels companies and battery-makers betting high oil prices would make it cheaper to drive on plant waste or electricity.

It hasn’t happened, despite some headway. Even after years of growth, electric cars accounted for just 0.4% of new vehicle sales so far this year, according to Edmunds.com. Biofuels from plant waste account for even a smaller percentage of the nation’s fuel mix. The high prices instead inspired drillers and investors to pursue oil wherever it might be found no matter the expense. They developed projects in environmentally-sensitive areas or using environmentally-destructive methods. They developed technology that has unlocked vast resources once thought out of reach. What was once a shortage now looks to be a surplus. “It was a net negative from a climate perspective,” says Andrew Logan, director of oil and gas programs at the environmental group Ceres. “It locked us into long-term dependence on oil.”

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That’s when we stop counting them.

More Than 4 In 10 Americans Still Exhaust Unemployment Benefits (MarketWatch)

The number of Americans applying for unemployment compensation is near a 15-year low, but a higher percentage than usual still don’t find jobs before their benefits run out. The percentage of people who received unemployment benefits each week until they were no longer eligible stood at a 12-month average of 41.5% in September, according to Labor Department data. In other words, more than four in 10 unemployed Americans still exhaust their benefits before finding a job. Granted, the rate has fallen sharply from a postrecession peak of 55.8% in March 2010 – the highest level since the government began keeping track in 1972. But the rate is still markedly higher vs. a 34.7% low point reached during the 2002-2006 expansion. The percentage who exhaust benefits is also well above the historical average of 35.9%. The U.S. labor market is improving, but a variety of measures such as the exhaustion rate for unemployment benefits shows that a lot more work needs to be done.

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Let’s get a mortgage, shall we? And a car loan.

Most Americans Make Less Than $20 Per Hour (MarketWatch)

According to data compiled by Goldman Sachs, most American workers earn below $20 per hour. Goldman Sachs economists David Mericle and Chris Mischaikow crunched Labor Department data that is used to generate the monthly jobs report that the market closely watches, in particular from the survey of employers. 19% of workers make less than $12.50 per hour, 32% of workers make between $12.50 and $20 per hour, 30% make between $20 and $30 an hour, 14% make between $30 and $45 per hour, and 5% make over $45 an hour. (It’s important to note that this includes all workers covered by the establishment survey, not just hourly workers; to convert annual pay to hourly pay, divide by 2080, for a standard 40-hour week.) The economists also found that, while wage growth has been soft, the fastest growth in income has come to the lowest-paid workers. And they found that the biggest driver to income growth has been rising employment, with help from rising wages and more hours worked.

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See also the following article, this is not just happening in the US.

The Reason Small Businesses Are Disappearing (Zero Hedge)

Confused why despite endless daily propaganda that the US economy is getting better – after all “just look at the record high S&P 500” – fewer and fewer Americans believe the narrative, as the Democrats and Obama found out the very hard way in last week’s midterm elections? Then the following explanation written by the owner of a small business – the segment of the US economy that has historically led every single recovery but this time was left behind – should help answer some questions.

The reason small businesses are disappearing written by a small business owner. I want to start out by saying that i am a 27 year old male with a small business in Sacramento CA. I started this business a few years ago with savings of 15k. With a lot of hard work and determination i have succeeded, but it sure as hell was not easy. I am a long time lurker and have never seen anyone go in depth about what its like to own a small business and the reason why they are disappearing. Without going into to much detail, i own a furniture store so obviously things are different then other businesses but a lot of the things are the same. I wanted to begin with the things that are killing small businesses. Also only my opinion.

Small Business Loans – Although they are not killing small business they sure as hell don’t help anyone. Unless you are opening a unique small business you are not going to get any funding. By unique i mean something along the lines of creating solar panels. According to a recent investigation by the SBA Inspector General (ill post the article if you would like), over 75% of SBA loans went to large businesses. So basically if you want to open a normal business you need a ton of collateral and a miracle to get a loan.
Permits and Licensing – In opening my specific business the first year totaled about $2000.00.
Advertising – Many small business’s cant afford to take out pages or flyers in the news paper or TV ads so they only have a few choices such as Yelp or the Penny-saver. (Don’t get me started in Yelp).
Street Advertising – While this used to be a good portion of how you get business it is now off limits. Code enforcement will not allow you to put anything outside. No balloons, signs, anything with your store name, window paint more than 50%, or any mattresses. Also delivery vehicles can not be closer than 50 feet from the curb. In my case that means behind the building.
Board of Equalization – Cant go into to much detail here but they sure as hell aren’t here to help.
Health Insurance – Now obviously with the people that have a large work force working full time they will be hit hard by obamacare, but i wanted to give you a perspective on a single person. The cheapest rate for myself and me only, and believe me i have looked around, is $250.00/month. Some might say oh that’s not bad, but let me explain what that covers, NOTHING lol. Basically if something happens to me i have to shell out 6K before insurance gets involved. Also 100 dollar co pay every time i go.
The economy – While many know that when the President comes on TV and says the economy is doing great, we all know it is not, some people don’t. Every month more people drop out of the Labor Force and the number of families on food stamps is sky rocketing. So for those of you who don’t know the economy is terrible because of all the top stories of Kim Kardashian and whoever else, lots of people in america are struggling.
Merchant Fees – This is for credit card processing machines. The machine itself costs 600.00 plus the percentages on sales and cards. Companies such as BofA charge once a year on top of the regular fees $150.00 to protect you from fraud (which they can’t even stop) and yes its mandatory. Paypal or Square seem to be the best options these days.
Fire Department – Yes even the Fire Department wants a piece. Starting last year you must do your own visual inspection and send them a check for 150! Basically if you don’t they will come to your store and give you a million violations for wasting there time.

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I quoted Beppe Grillo yesterday as saying that 25% of Italy’s industry has gone sine the country joined the eurozone in 1997. That’s a scorched earth-type devastation.

Italy’s Crazy New Economy from Hell Suffocates Small Businesses (WolfStreet)

Italy is a country of entrepreneurs and of vibrant small enterprises. Or was. Now these businesses are dying. Of its 5.3 million companies (as of December 31, 2013), 3.3 million are small, often family-owned outfits, according to Rome-based credit information provider Cerved Group. And another 900,000 are sole proprietorships, or 17% of all companies, a larger percentage than anywhere else in the EU, ahead of France (12%), Spain (10%), and Germany (10%). The remaining 1 million companies are corporations of all sizes. And life in Italy has been exceedingly tough for small outfits. Consumer spending has dropped sharply since the onset of the crisis. Industrial production continued its downward spiral in September and is down 0.5% for the first nine months of 2014 over the same period a year ago. Unemployment is 12.6%, and rising. Youth unemployment is at a catastrophic 43%, up from an already terrible 26% in 2010.

It doesn’t help that the government refuses, and I mean refuses – due to “technical” problems, as a minister explained – to pay its long overdue bills to these already strung-out businesses. It’s a shell game to lower Italy’s overall indebtedness and thus pacify the financial markets and Italy’s masters in Brussels. So this shouldn’t come as a surprise, given that the largest customer in the country, the government, refuses to pay its bills to the members of the private sector which then can’t pay their own bills: in September, non-performing loans held by Italian banks jumped 19.7% from a year ago, according to the Bank of Italy. At the same time, loans to the private sector dropped 2.3%. Economic “growth” has been negative or zero for the last 13 quarters. And this is what Italy’s glorious “recovery” from hell looks like:

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My man Beppe. Perhaps still the only man in Europe who makes real sense. He says 2/3 of the Italian Parliament supports his plan for a referendum on the euro. Martin Armstrong suggests the EU may kill him before letting it happen.
See yesterday’s: The Only Man In Europe Who Makes Any Sense.

Beppe Grillo: The Euro Is Destroying The Italian Economy (Zero Hedge)

Next week, Italy’s Beppe Grillo – the leader of the Italian Five Star Movement – will start collecting signatures with the aim of getting a referendum in Italy on leaving the euro “as soon as possible,” just as was done in 1989. As Grillo tells The BBC in this brief but stunning clip, “we will leave the Euro and bring down this system of bankers, of scum.” With two-thirds of Parliament apparently behind the plan, Grillo exclaims “we are dying, we need a Plan B to this Europe that has become a nightmare – and we are implementing it,” raging that “we are not at war with ISIS or Russia! We are at war with the European Central Bank,” that has stripped us of our sovereignty.

Beppe Grillo also said today:

It is high time for me and for the Italian people, to do something that should have been done a long time ago: to put an end to your sitting in this place, you who have dishonoured and substituted the governments and the democracies without any right. Ye are a factious crew, and enemies to all good government; ye are a pack of mercenary wretches, and would like Esau sell your country for a mess of pottage, and like Judas betray your God for a few pieces of money. Is there a single virtue now remaining amongst you? A crumb of humanity? Is there one vice you do not possess? Gold and the “spread” are your gods. GDP is you golden calf.

We’ll send you packing at the same time as Italy leaves the Euro. It can be done! You well know that the M5S will collect the signatures for the popular initiative law – and then – thanks to our presence in parliament, we will set up an advisory referendum as happened for the entry into the Euro in 1989. It can be done! I know that you are terrified about this. You will collapse like a house of cards. You will smash into tiny fragments like a crystal vase. Without Italy in the Euro, there’ll be an end to this expropriation of national sovereignty all over Europe. Sovereignty belongs to the people not to the ECB and nor does it belong to the Troika or the Bundesbank. National budgets and currencies have to be returned to State control. They should not be controlled by commercial banks. We will not allow our economy to be strangled and Italian workers to become slaves to pay exorbitant interest rates to European banks.

The Euro is destroying the Italian economy. Since 1997, when Italy adjusted the value of the lira to connect it to the ECU (a condition imposed on us so that we could come into the euro), Italian industrial production has gone down by 25%. Hundreds of Italian companies have been sold abroad. These are the companies that have made our history and the image of “Made in Italy”.

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Ambrose sees is happening, but doesn’t know why.

Eurozone Dodges Recession But Submerges In ‘Lost Decade’ (AEP)

The eurozone has averted a triple-dip recession but remains stuck in a deep structural slump, with too little momentum to create jobs or to stop a relentless rise in debt ratios. The region eked out growth of 0.2pc in the third quarter, yet Italy’s economy shrank again and has now been in contraction for over three years. Stefano Fassina, the former Italian finance minister, said “Titanic Europe” is heading for a shipwreck without a radical change of course. He warned that contractionary policies are destroying the Italian economy and called on the country’s leaders to “bang their fists of the table”. He said they should threaten an “orderly break-up” of the euro unless policies change. His comments have made waves in Rome since he is a respected figure in the ruling Democratic Party of Matteo Renzi.

While France rebounded by 0.3pc, the jump was due to a rise in inventories and a 0.8pc spike in public spending, mostly on health care. The previous quarter was revised down to minus 0.1pc. “It flatters to deceive,” said Marc Ostwald from Monument Securities. “France was basically horrible. How anybody could celebrate this as a recovery story is beyond me.” “A close reading of details is sobering. Just about all the drivers of growth are near-dead,” said Denis Ferrand, head of the French research institute Coe-Rexecode. Michel Sapin, the French finance minister, said the economy remains “too weak” to make a dent on unemployment. France’s brief rebound in employment has already sputtered out. The economy shed 34,000 jobs in the third quarter. This will not be easy to reverse since Paris has pledged to push through a further €50bn of fiscal cuts over three years to meet EU deficit targets.

Maxime Alimi from Axa said France’s public debt is likely to reach 100pc of GDP by 2017, warning that investor patience may not last. He said bond yields could rise in a “non-linear, abrupt fashion” in the next downturn. Europe is caught in limbo. The data is not weak enough to force a radical change in EMU policy, whether that might be a ‘New Deal’ blitz of investment or full-fledged quantitative easing by the European Central Bank. The risk is that the currency bloc will drift into another year in near deflationary conditions, without any catalyst for real recovery. The US Treasury Secretary, Jacob Lew, warned this week that Europe faces a “lost decade” unless surplus countries such as Germany do more to stimulate demand. “The eurozone is the epicentre of a global Keynes liquidity trap,” said Lena Komileva from G+Economics. “For the markets, the previous consensus of a periphery-led recovery has crumbled.”

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” Over the past several years, loans outstanding and other exposure to China have roughly quadrupled to more than $800 billion.” Wanna bet it’s more than that?

Who Will Pay for China’s Bust? (Bloomberg)

One reason not to worry about a Chinese credit bubble is that most of the lenders are inside the country. If there’s a wave of defaults, the logic goes, it won’t affect the global financial system in the same way as the U.S. subprime crisis in 2008.

Judging from data on global bank exposures to China, this argument is rapidly becoming less convincing.

Over the past several years, loans outstanding and other exposure to China have roughly quadrupled to more than $800 billion, according to the Bank for International Settlements, an international organization of central banks (see chart). Add in about $170 billion in derivatives, credit commitments and guarantees, and the total comes to about $1 trillion.

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It’s hard to know how much of that money is used to finance the construction of buildings that won’t be filled, excess steelmaking capacity or other misadventures. The BIS does know that the cash is mostly going to Chinese banks, followed by non-bank companies.

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Australian banks have increased their exposure to China at the fastest pace over the past five years, though U.K. banks still account for the largest share of lending.

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Knowing more about who stands to take the biggest losses would be crucial to managing the global repercussions of a Chinese credit bust. Unfortunately, six years after the financial crisis of 2008, the world’s regulators are still very far from possessing an early-warning system that would allow them to identify – in anything close to real time – concentrations of risk. This weekend’s Group of 20 summit in Brisbane, Australia, would be a good place to try to make some progress in building that system.

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It’s getting hard(er) for China to hide behind its official numbers.

China Slowdown Deepens as Targeted Stimulus Fails (Bloomberg)

Credit growth in China weakened last month, adding to signs that the world’s second-largest economy slowed further this quarter and testing policy makers’ determination to avoid broader stimulus measures. Aggregate financing in October was 662.7 billion yuan ($108 billion), the People’s Bank of China’s said in Beijing yesterday, down from 1.05 trillion yuan in September and lower than the 887.5 billion yuan median estimate in a Bloomberg survey of analysts. Earlier this week, reports showed deceleration in industrial output and fixed-asset investment. The evidence underscores concern that, outside the U.S., the global economic outlook is deteriorating. For Premier Li Keqiang, the question is whether to stick with targeted liquidity injections or embrace nationwide monetary or fiscal easing that reignites the risk of a jump in debt. “The key is not to further expand credit, given the weak credit demand, but to lower funding costs,” said Wang Tao, chief China economist at UBS in Hong Kong. A benchmark interest rate cut “is more urgent.”

The central bank has added liquidity while refraining from broad-based interest rate or reserve requirement ratio cuts. China’s benchmark money-market rate fell for a second week on speculation it will conduct more targeted fund injections. New local-currency loans were 548.3 billion yuan, and M2 (CNMS2YOY) money supply grew 12.6% from a year earlier. New yuan loans, which measure new lending minus loans repaid, compared with economists’ median estimate of 626.4 billion yuan, while the M2 figure compared with the median estimate of 12.9%. “Sluggish domestic demand and risk-aversion among commercial banks dragged credit growth,” said Zhou Hao, a Shanghai-based economist at Australia & New Zealand. “Disappointing monetary data suggest overall growth will remain soft in the last quarter.”

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And don’t you forget it. Nobody’s holding your hand anymore.

Take Cover Now – They Don’t Ring A Bell At The Top (David Stockman)

This is getting downright stupid. After the minor 8% correction in October, the dip buyers came roaring back and the shorts got sent to the showers still another time. Earlier this morning the S&P 500 was pushing 2050 – or up 12% in less than a month. So the great con game remains in tact. The casinos run by the Fed and other central banks can’t go down for more than a few of days – until one or another central banker hints that more free money is on the way. A few weeks ago it was James Bullard hinting at a QE extension. Next was Mario Draghi pronouncing that the whole ECB is unified behind a plan to expand its already swollen balance sheet by another $1.2 trillion.

And then Haruhiko Kuroda, the certifiable madman running the BOJ, not only announced his 80 trillion yen buying scheme, but soon averred that falling oil prices – a godsend to Japan – were actually a threat to his mindless 2% inflation goal that might necessitate even more money printing. That is, after buying up 100% of the massive Japanese government bond market, the BOJ would not hesitate to monetize ETF’s, stocks, securitized real estate debt and, apparently, sea shells, if necessary. Accordingly, bounteous wealth is seemingly to be had by the three second exercise of clicking “buy” on the SPU (basket of S&P 500 stocks). Indeed, for the past 68 months running, the stock market has blown through every mini-correction, and has been traversing a near parabolic rise.

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Big call for imminent rate hike from a so far pretty quiet voice inside the Fed.

Asset Bubbles Are Top Concern for US Heartland’s Fed Banker (Bloomberg)

As a Federal Reserve bank examiner in the mid-1980s, Esther George delivered bad news to a Nebraska banker: she was downgrading overdue loans, putting his firm’s survival on the line. The owner “broke down and said, ‘This was my life’s work and your decisions are taking my bank away from me,’” George, now president of the Federal Reserve Bank of Kansas City, said in an interview. “I was absolutely sympathetic. I knew what it meant for the community.” The man was a victim of the early 1980s speculative bubble that George witnessed firsthand. Today, after the crisis of 2008-9, she sees aggressive lending and lofty asset-price valuations as evidence that financial excesses may again pose a risk to the economy. To forestall another bubble, George, 56, says it’s time for the Fed to start raising interest rates it has kept near zero since 2008. She argues that ultra-cheap credit is no longer needed to support an expansion that’s in its sixth year after the worst recession since the 1930s.

“The Fed took pretty aggressive action because we were in a fairly desperate situation,” George said. “Once we saw the economy turn, we might have removed some of those emergency measures, including zero interest rates.” Her concern with financial stability prompted her to dissent against the Fed’s accommodative policy at seven of eight Fed meetings last year. Now her warnings, along with those of fellow regional Fed bank presidents including Richard Fisher of Dallas and Charles Plosser of Philadelphia, are starting to resonate at a central bank dominated by its Washington-based Board of Governors. St. Louis Fed President James Bullard today called financial imbalances “my biggest worry going forward,” and said the Fed must avoid fanning a boom like the one in housing that could lead to another bust.

“Asset-price bubbles are the elephant in the room for monetary policy in the U.S.,” he told reporters after a speech in St. Louis. Fed officials including Chair Janet Yellen have said they are watching deteriorating leveraged-loan underwriting standards, and the central bank in September created a committee on financial stability under Vice Chairman Stanley Fischer. ‘Esther George has centered attention on the issue,’’ said Lawrence Goodman, a former U.S. Treasury official who is now president of the Center for Financial Stability in New York, an independent research organization. “There are an increasing number of converts at the Fed that financial stability matters.”

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Bullard follows up on Esther George’s remarks and makes sure they’ll keep on guessing. As I said before, all Fed utterances are carefully scripted.

Fed’s Bullard Still Wants Rate Rise in Q1 2015 (Dow Jones)

Federal Reserve Bank of St. Louis President James Bullard said low inflation in the U.S. economy is no longer enough to justify the current rock bottom setting for short-term interest rates, and he repeated his view that rates should be lifted off their current near zero levels early next year. “Inflation at the current level is not enough to justify remaining at a near-zero policy rate,” Mr. Bullard said in a speech in St. Louis. “Low inflation can justify a policy rate somewhat lower than normal, but not zero.” “Labor markets continue to improve and are approaching or even exceeding normal performance levels,” Mr. Bullard said. “Over the next year, it will become more and more difficult to point to labor market performance as a rationale for a near-zero policy rate.” He told reporters after his formal remarks that his continued expectation of 3% growth and job gains through next year means “that the best time to raise the policy rate will be at the end of the first quarter of 2015.” Mr. Bullard added, “That’s based on a forecast; data could come in differently.”

In his speech, Mr. Bullard took stock of the robust gains seen in the job market, which have come at a time where inflation has run persistently below the Fed’s 2% price rise target. In a speech Thursday, New York Fed President William Dudley said ongoing labor market weakness and inflation that is falling short of the Fed’s goal argue in favor of patience when it comes to raising rates. He, like many other Fed officials, expects short-term rates to be raised from near zero levels some time next year. In his speech Friday, however, Mr. Bullard said that the job market had recovered enough to reach long-term trend levels, and that justifies changing Fed policy. Mr. Bullard expressed some caution about the current level of inflation, which is currently at a tepid 1.4% rise, having persistently fallen short of the Fed’s goals. But he also said that despite some warning signs, he still expects prices to move back toward 2%.

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Big smile on my part.

Turkish Hackers Crack Electric Utility; Delete $670 Billion Of Pending Bills (ZH)

RedHack – a Turkish hacker collective – has hacked the website of the Turkey Electricity Transmission Company, and, as TechWorm reports, claim to have deleted the pending bills of Turkish citizens amounting to Turkish Lira 1.5 trillion (a stunning $668.5 billion). The collective, which has many hacktivism projects against Turkey’s internet censorship laws, posted a video of how they deleted the debt of millions of Turks. As TechWorm reports,

RedHack the Turkey’s number one hacker collective today hacked into the website of the Turkey Electricity Transmission Company website. They then did something which will cheer a lot of Turkish citizens who owe large amounts to the Electricity department. They have claimed that they have deleted the pending bill of Turkish citizens amounting to Turkish Lira 1.5 trillion.

Redhack, are a Turkish hacker collective. They follow the Marxist–Leninist ideology and were founded in 1997. The RedHack has so far hacked several high profile Turkish websites like Council of Higher Education, Turkish police forces, the Turkish Army, Türk Telekom, and the National Intelligence Organization and many other websites.

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“Somebody who is knowledgeable and interested, is several clicks away from the ugly mess that will define California’s financial future,”

California Pension Funds Are Running Dry (LA Times)

A decade ago, many of California’s public pension plans had plenty of money to pay for workers’ retirements. All that has changed, according to a far-reaching package of data from the state controller. Taxpayers are now on the hook for billions of dollars more to cover the future retirements of public workers, with the bill widely varying depending on where they live. The City of Los Angeles Fire and Police Pension System, for instance, had more than enough funds in 2003 to cover its estimated future bill for workers’ retirement checks. A decade later, it is short $3 billion. The state’s pension goliath, the California Public Employees’ Retirement System, had $281 billion to cover the benefits promised to 1.3 million workers and retirees in 2013. Yet it needed an additional $57 billion to meet future obligations.

The bill at the state teachers’ pension fund is even higher: It has an estimated shortfall of $70 billion. The new data from a website created by state Controller John Chiang come at a time of growing anger from taxpayers over the skyrocketing cost of public workers’ retirements. Until now, the bill for those government pensions was buried deep in the funds’ financial reports. By making this data available, Chiang is bound to stir debate about how taxpayers can afford to make retirement more comfortable for public workers when private-sector employees’ own financial futures have become less secure. For most non-government workers, fixed monthly pensions are increasingly rare.

“Somebody, who is knowledgeable and interested, is several clicks away from the ugly mess that will define California’s financial future,” said Dan Pellissier, president of California Pension Reform, a Sacramento-area group seeking to stem rising statewide retirement costs. Chiang has assembled reams of data from 130 public pension plans run by the state, cities and other government agencies. It’s now accessible at his website, ByTheNumbers.sco.ca.gov. In nearly eight years as controller, essentially the state’s paymaster, Chiang has made good on a commitment to make government financial records more transparent and accessible.

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” .. he speaks with a powerful moral authority — something totally missing from American political leaders who are ideologically guided by atheist Ayn Rand.”

Pope Francis’s ‘Holy War’ On Capitalism And Toxic Inequality (Paul B. Farrell)

Big first-year anniversary for anticapitalist, anticonservative, socialist Pope Francis. Fortune magazine ranks him first among the “World’s 50 Greatest Leaders.” Tenure unlimited. Now he’s in an ideological war with U.S. Senate Majority boss Mitch McConnell’s Big Oil backed GOP as well as conservative ideologues. At war in America’s unstable, endlessly fickle, myopic, rigged political arena. At least till 2016. Then another twist. Warren Buffett predicts Hillary Clinton is next, probably till 2024. In a long war. Big picture: Economics trumps the political soap opera. Lurking in the shadows, a new crash. Inevitable.

And like 2000, nobody will hear it coming … hidden under irrational exuberance, dot-com mania, millennium celebrations … followed by a 30-month bear recession … later the 2008 crash … Alan Greenspan, Henry Paulson clueless … two crashes already this century … $10 trillion losses each … next one coming in 2016 election cycle, with echoes of the McCain/Palin loss … yes, a bigger badder bear than 2000 and 2008 … because once again bulls and optimists, traders and leaders fall into denialism … blinded by a new wave of irrational exuberance.

What about the promise of big political changes? House Speaker John Boehner and McConnell talk a good game, but their anxious, conservative GOP base is sitting on the shifting tar sands of Big Oil cash threatened by higher costs, long-term risks. Yes, talk is cheap, but once partisan conflicts blow up, climate disasters will bury the GOP’s aggressive energy agenda, support will fade. Yes, Pope Francis is celebrating his one-year anniversary since laying down his anticapitalism manifesto for his army of 1.2 billion Catholics worldwide. He’s also been removing conservative cardinals and bishops from leadership roles. He’s hell-bent on changing the world fast. And his mandate is unwavering and unequivocal. He’s drawing clear moral and political battle lines against repressive capitalism, excessive consumerism, rigid conservatism.

Listen: “Inequality is the root of social ills … as long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets and financial speculation and by attacking the structural causes of inequality, no solution will be found for the world’s problems or, for that matter, to any problems.” Yes, it sure sounds like a declaration of war: The anticapitalist Pope Francis versus America’s self-destructive amoral capitalism. Bet on Mitch? Pope Francis’s target is clear: economic inequality is the world’s No. 1 problem. Capitalism is at the center of all problems of inequality. And he speaks with a powerful moral authority — something totally missing from American political leaders who are ideologically guided by atheist Ayn Rand, patron saint of the GOP’s capitalism agenda in this moral war. Without moral grounding, the GOP is no match for Francis’ vision, his principled mandate, his long-game strategy to raise the world’s billions out of poverty, to eliminate inequality, to attack the myopic capitalism driving today’s economy, markets and political system.

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