Sep 272020
 


Claude Monet The pond at Montgeron 1876

 

Amy Coney Barrett Senate Confirmation Hearing Set To Start Oct. 12 (NBC)
Supreme Court Nomination Is A Testament To The Values Of Feminism (Turley)
If Democrats Attack Her Over ‘People Of Praise’, They’ll Regret It (USAT)
Amy Coney Barrett’s Intellect And Heart Are Unrivaled (USAT)
Betrayal, Infuriating Betrayal (Whitney)
In Which We Debunk A Coividiot Pamphlet (MoA)
‘A One-Off Test Is A Folly’: The Truth Behind False Negative Covid Tests (HuPo)
DeSantis Drops All Florida COVID Restrictions, Promises No More Closures (JTN)
Guardian’s Deceit-Riddled New Statement Betrays Assange And Journalism (Cook)
Avoiding a Climate Lockdown (Mariana Mazzucato)

 

 

Tick tick tick…

 

 

 

 

Cruz on Warren

 

 

A lot of Amy Coney Barrett of course today.

Amy Coney Barrett Senate Confirmation Hearing Set To Start Oct. 12 (NBC)

While President Donald Trump officially announced his nominee for the Supreme Court on Saturday afternoon, an expeditious timeline had already started to take shape that could kick off confirmation hearings as early as mid-October. Senate hearings, which for the last three Supreme Court justices began nearly two months after they were nominated, could start as soon as Oct. 12, a Republican aide familiar with the matter told NBC News before Judge Amy Coney Barrett was officially announced as the nominee. Hours after Trump nominated Barrett to replace the late Ruth Bader Ginsburg, the aggressive timeline was made official by Senate Judiciary Chairman Lindsey Graham, who said on Fox News that confirmation hearings will start on Oct. 12, less than one month before the Nov. 3 election.

Graham said hearings will start with an introduction to Barrett, opening statements, and a statement by the nominee. Tuesday and Wednesday of that week will be dedicated to questions and answers and then the markup process would start on Thursday. Per committee rules, the nomination can be held by Democrats for one week because it is the first time the nomination is on the agenda, said Graham, who hopes to have the nominee out of committee by Oct. 26 and then it’s up to Senate Majority Leader Mitch McConnell, R-Ky, to set the floor schedule. “If they treat her as bad as they treated [Justice Brett Kavanaugh], it’s going to blow up in their face,” Graham said of Democrats on Fox News.

“If they continue this pattern of trying to demean this nominee, I think the American people will push back and push back hard.” Both Barrett and Trump acknowledged that her confirmation hearings could get ugly as Democrats attempt to block a vote until after the election. One Judiciary Committee member, Sen. Richard Blumenthal, D-Conn., said he would not meet with Barrett, which is customary for committee members, in protest of Trump’s decision to rush ahead with the nomination with the election only 38 days away. “I refuse to treat this process as legitimate and will not meet with Judge Barrett,” Blumenthal said in a statement. Barrett said on Saturday that she has “no illusions that the road ahead of me will be easy, either for the short term or the long haul.”

Balding

Read more …

As seen through the eyes of a man?!

Supreme Court Nomination Is A Testament To The Values Of Feminism (Turley)

In her book, “In My Own Words,” Justice Ruth Bader Ginsburg wrote how feminism is a concept best captured in the song “Free to Be You and Me” by Marlo Thomas. That definition defined feminism as allowing women to decide their values without societal dictates or limits. This view sharply contrasts with some who think feminism is adhering to liberal orthodoxy. Ginsburg never believed feminism meant removing the “feet off our necks” by her brothers just to have them replaced by the feet of her sisters. Indeed, true feminism meant allowing women the freedom of choice to find their own voices and values in society. That is why this nomination of a Supreme Court justice is a testament not just to feminism but to Ginsburg.

The women on the short list of President Trump bear striking resemblance to her in their independence and clarity of thought. Most of them, like Ginsburg, balanced family obligations with their career ascensions. The difference is these women reached different conclusions on how the law is read and applied. Many do have legitimate objections for issues like abortion as inimical to the rights of women, but these women are part of the legacy of Ginsburg and her generation in an empowerment of women to reach their own conclusions. The nominee most like Ginsburg is Judge Amy Coney Barrett. They both finished law school at the top of their classes. Both went on to teach at leading law schools and both started their careers with an emphasis on procreational rights and constitutional interpretation. Deeply religious, both cited the role of faith in their careers and convictions.

Like Ginsburg, Barrett refused to yield to the choice of family over career. Barrett has raised seven children, including two adopted from Haiti, while rising to national recognition as a brilliant lawyer and jurist. Both women earned a reputation for civility and what Ginsburg described as showing us that “you can disagree without being disagreeable.”

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Two pieces from USA Today.

If Democrats Attack Her Over ‘People Of Praise’, They’ll Regret It (USAT)

All faiths are at least a little bit weird to those outside of them. Imagine telling someone unfamiliar with Catholicism, “Every chance I get, I eat some bread that I believe is the body of God’s only son, who was executed in Jerusalem under Tiberius.” Totally normal, right? So to all of my friends who think that the religious practice of Donald Trump’s Supreme Court nominee, Amy Coney Barrett, who is a member of a charismatic ecumenical community called the People of Praise, ought to bring out the bulldog in Kamala Harris and other Democrats on the Senate Judiciary Committee, I say dear God, no. First, you cannot fight bigotry with bigotry; religious intolerance is just as wrong as any other kind of othering. Indulging it won’t get us a more tolerant America.

And Senators, treating her like the kook that she is not is just what the president is counting on you to do. Unless you want to star in Trump campaign commercials that he’ll say prove Joe Biden is “against God,” don’t even think about it. Yes, women leaders in the People of Praise were until recently referred to as ‘handmaids’ — a biblical reference to Mary, the mother of Jesus. In the Gospel of Luke, when the angel tells her, “You will conceive in your womb and bear a son, and you shall name him Jesus,” she responds, “Behold, I am the handmaid of the Lord. May it be done to me according to your word.” But the group was not the inspiration for Margaret Atwood’s dystopian novel ‘The Handmaid’s Tale.’ “What the people in that book are going through is horrible,” says Joannah Clark, who runs a People of Praise school in Portland, Oregon and has known Barrett since college.

The group does not require a “loyalty oath” or arrange marriages or force women to keep having children. It puts a premium on intellectual life and values education for men, women and children. Its well regarded schools are attended by many non-members. It does have a view of marriage that I don’t share and you might not, either, but that St. Paul certainly did. (As the Church is subordinate to Christ,” says his letter to the Ephesians, “so wives should be subordinate to their husbands in everything.”) You know that favorite pro-choice rejoinder, ‘If you don’t like abortion, don’t have one?’ If deferring to your husband at home and speaking in tongues in prayer is not your brand of theological vodka, then don’t join the People of Praise, or any Pentecostal church in the world.

But don’t be the kind of hypocrite who embraces only those differences that line up with your own cultural views. Just as Biden is not coming for your guns or your suburbs, neither is he coming for your religious liberty. But could we please make sure Dianne Feinstein is aware, so she doesn’t repeat the folly of her 2017 “dogma lives loudly within you” gift to Republicans at Barrett’s confirmation hearing for her appointment to the U.S. Court of Appeals for the Seventh Circuit?

Kellyanne Conway on Barrett 7th CIrcuit vote

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Nicole Garnett is the John P. Murphy Foundation professor of law at University of Notre Dame.

“Yes, she is brilliant. And, yes, she is a principled, careful judge. But she also is one of the most generous people whom I have ever met.”

Amy Coney Barrett’s Intellect And Heart Are Unrivaled (USAT)

I first met Amy Coney at a Washington, D.C., coffee shop in the spring of 1998. A mutual friend had connected us because we were about to begin clerking together on the Supreme Court (me for Justice Clarence Thomas, her for Justice Antonin Scalia). I don’t remember the details, but I do remember that I walked away thinking I had just met a remarkable woman. We could not have known then that over the next 22 years, our lives would become completely intertwined: That, three years later, she would become my colleague at Notre Dame Law School, that she and her husband would move around the corner from us in South Bend, Indiana, and that we would raise our children together. We could not have known that, in a sense, we would grow up together — as lawyers, teachers, scholars, mothers, friends.

And we certainly could not have imagined that, 22 years later, she would be nominated to serve on the United States Supreme Court. But looking back, everything has changed, except Amy Coney Barrett. The very same qualities that struck me as remarkable on that spring afternoon are the qualities that make her an exceptional judge, award-winning teacher, generous colleague, loyal friend and loving mother. And the obvious pick to serve on the Supreme Court. She is brilliant, to be sure, but also humble, generous, loving, kind. She accepts each new challenge with grace and gives all she has to give (and sometimes it seems more) to all she is called to do. She will bring all those qualities to the Supreme Court, and our nation will be blessed by her years of service as Justice Barrett.

As Harvard Law School professor Noah Feldman, who clerked with us and disagrees with much of her judicial philosophy, recently observed, she stood out as one of the two finest legal minds among the almost 40 clerks. He concludes, “I’m going to be confident that Barrett is going to be a good justice, maybe even a great one — even if I disagree with her all the way.” [..] Yes, she is brilliant. And, yes, she is a principled, careful judge, admired legal scholar and amazing teacher. Her respect among her colleagues and students is reflected in the fact that she has been elected professor of the year three times by the law school’s graduating class and in letters of support for her nomination to the 7th Circuit, including ones signed by all of her full-time faculty colleagues at Notre Dame, all of her fellow Supreme Court clerks, hundreds of former students and dozens of prominent law professors from around the country.

But she also is one of the most generous people I have ever met. The Barrett home is a wellspring of hospitality. It is the kind of place where families gather to share life, where the kids are served hot dogs on a backyard picnic table while the parents are treated to Judge Barrett’s amazing crawfish etouffee. It is where she has prepared countless meals for families welcoming new babies or recovering from surgeries, comforted friends who know that they can always turn to her for support in times of crisis, and served as a sounding board for personal challenges both large (career advice) and small (potty-training advice).

Read more …

“..there has never been a more serious crime in American history…”

Betrayal, Infuriating Betrayal (Whitney)

Here’s your political puzzler for the day: Which of these two things poses a greater threat to the country:

1) An incompetent and boastful president who has no previous government experience and who is rash and impulsive in his dealings with the media, foreign leaders and his critics?

2) Or a political party that collaborates with senior-level officials in the Intel agencies, the FBI, the DOJ, the media, and former members of the White House to spy on the new administration with the intention of gathering damaging information that can be used to overthrow the elected government?

The answer is “2”, the greater threat to the country is a political party that engages in subversive activity aimed at toppling the government and seizing power. In fact, that’s the greatest danger that any country can face, an enemy from within. Foreign adversaries can be countered by diplomatic engagement and shoring up the nation’s military defenses, but traitors–who conduct their activities below the radar using a secret network of contacts and connections to inflict maximum damage on the government– are nearly unstoppable. What the Russiagate investigation shows, is that high-ranking members of the Democrat party participated in the type of activities that are described above, they were part of an illicit coup d’etat aimed at removing Donald Trump from office and rolling back the results of the 2016 elections.

It is a vast understatement to say that the operation was merely an attack on Donald Trump when, in fact, it was an attack on the system itself, a full-blown assault on the right of ordinary people to choose their own leaders. That’s what Russiagate is really all about; it was an attempt to torpedo democracy by invoking the flimsy and unverifiable claim that Trump was an agent of the Kremlin. None of this, of course, has been discussed in a public forum because those platforms are all privately-owned media that are linked to the people who executed the junta. But for those who followed events closely, and who know what actually happened, there has never been a more serious crime in American history.

Obama pressure

More text messages

Read more …

Moon of Alabama rips an Off Guardain piece to shreds. Good.

In Which We Debunk A Coividiot Pamphlet (MoA)

The next claim in the Off-Guardian nonsense: 3. An immense majority (95%) of fatal evolutions happen in old and frail individuals with premorbidities, with an average age of death at or above 80 years old. That claim is again an outright lie:Of the roughly 1.2 million American deaths that occurred between February 1 and June 17, almost 9% were due to coronavirus. The proportion of deaths due to coronavirus were about the same for each age group above 45 years. Below that, the proportion of deaths due to coronavirus fell dramatically.

The numbers in the second column of the table show that only about half of the total Covid-19 fatalities, not 95%, were “at or above 80 years old”. As for “premorbidities” (being alive is btw one). Hypertension and obesity are named as co-morbidities for Covid-19 cases. The CDC says that 42% of all U.S. inhabitants are obese while some 45% have hypertension. But today these people are alive and reasonably well. Most of them have still several decades of life before them. Would they get infected with SARS-CoV-2 and die, the virus, not their co-morbidities, would have caused their death. On to the next Off-Guardian blooper:

4. Antibody studies, cross immunization with other corona strains and the completion of the death toll curve in many countries are strong evidence that the human population is developing herd immunity against SARS-CoV-2. In this context, a severe “second wave” for SARS-CoV-2 is improbable. We may rather expect a new cold episode from it just like every year, but of regular or even weak intensity thanks to the gained herd immunity.

Antibody prevalence even in hard hit place like New York City is way below the 80% or so that would be needed for some kind of “herd immunity”. In the U.S. and Europe antibody prevalence is in total way less than 10%. The bay area for example has only some 2%. Is the U.S. ready to give 10 times more lives than the 266,000 who have already died of Covid-19 to achieve a potentially only temporary herd immunity?

Cross immunization with other corona viruses is a conjecture. We have so far no data that shows that there is cross immunity from other viruses that works against SARS-CoV-2. (Recent data points in the other direction. Children have an innate immune response to SARS-CoV-2 and it protects them well. Every adult has been infected with dozens of different viruses while growing up. We adults have developed and show an adaptive immune response to SARS-CoV-2. This seems to work less well than the children’s response. Instead of developing cross immunity through other infections our bodies seem to have learned something from previous infections that makes it more difficult to counter SARS-CoV-2.) The “improbable” second wave of Covid 19 is already developing in several European countries. Just take a look at France. And don’t worry. The rise in the still low death toll WILL follow the infection curve with a four weeks lag.

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Everything about testing is in question.

‘A One-Off Test Is A Folly’: The Truth Behind False Negative Covid Tests (HuPo)

When Sarah found herself suffering sudden bouts of breathlessness in May, she took herself to hospital. But after her Covid-19 swab test came back negative, doctors said she was probably anxious, and sent her home. Despite this, Sarah’s symptoms continued to worsen. A week later, she was rushed to hospital in an ambulance. Paramedics told her that based on her clinic observations, she should be in a coma. Then came more surprising news: She had tested positive for coronavirus. A doctor explained her first test had been a false negative – a result that comes up despite the patient having the virus, and possibly being contagious.

As a clinically vulnerable Covid-19 patient with a chronic illness, I have had frequent contact with hospitals and healthcare systems during this pandemic. I have also been told by doctors that the potential for false negative results is high, so I decided to find out if this was true. The answer, according to the experts I spoke to for this article, is a resounding yes. Sarah’s story – given to a patient safety charity under a pseudonym – is one that resonates with Dr Claudia Paoloni. Paoloni, president of the Hospital Consultants and Specialists Association, detailed another case in which a patient tested negative twice: once when she was first admitted to hospital and once later in her hospital stay. She finally tested positive on her third test – by which time she was on a ventilator in intensive care.

Paolini believes Covid-19 swab tests produce a troublingly high rate of false negative results, and the problem lies in the reliance on a single test. “To use as a one-off test in any capacity to exclude someone from having Covid-19 is a folly.” If you want to exclude someone from having the virus, Paoloni said, you must do multiple tests and collect multiple negative results. “If the test and tracing system is not working, which is the case here, transmission will continue unabated in the community.” Paoloni also warns this could get worse as the government tries to introduce rapid testing.

A study from Imperial College London published earlier in September put the sensitivity rate of rapid testing between 94% and 100%. That’s one in 20 people with Covid-19 who will almost definitely get a negative result. The current rate of false negatives in the UK was originally estimated at 30%, she explained. Things have improved since then, but it’s still around 8%, she said, which is almost two in 20. The most recent data published by the Office for National Statistics says the test’s sensitivity – which it says can tell us how likely it is to return a false-negative result, may be somewhere between 85% and 98%.

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Experiment.

DeSantis Drops All Florida COVID Restrictions, Promises No More Closures (JTN)

Florida Gov. Ron DeSantis this week formally lifted all statewide COVID-19 restrictions in the Sunshine State, promising residents that his office would pursue no lockdowns as it moves forward in managing the coronavirus pandemic there. DeSantis’s announcement ended all restrictions on restaurants and bars; it also forbids local governments from closing businesses. Local authorities are further forbidden from imposing restaurant capacity limits below 50%. “We’re … saying in the state of Florida everybody has a right to work,” DeSantis said at a Friday press conference. Local authorities, he said, “can do reasonable regulations, but they can’t just say no.”


Additionally, local governments may not collect fines on pandemic-related regulations such as mask mandates. Private businesses will still be permitted to set their own capacity limits and mask rules under the state’s reopening. Democratic state Senator Linda Stewart criticized the move on Friday, saying she was “not terribly convinced that we’re ready for this right now” and claiming that the state “will find out in three weeks if we’re ready.” Coronavirus cases in Florida peaked in mid-July and have been declining ever since; daily deaths, meanwhile, have declined more slowly, though they appear to have peaked in early August.

Read more …

The Guardian produces smear and slander. FIle a complaint against them.

Guardian’s Deceit-Riddled New Statement Betrays Assange And Journalism (Cook)

A decade ago, remember, the newspaper worked closely in collaboration with Assange and Wikileaks to publish the Iraq and Afghan war diaries, which are now the grounds on which the US is basing its case to lock Assange behind bars in a super-max jail. My first criticism was that the paper had barely bothered to cover the hearing, even though it is the most concerted attack on press freedom in living memory. That position is unconscionably irresponsible, given its own role in publishing the war diaries. But sadly it is not inexplicable. In fact, it is all too easily explained by my second criticism. That criticism was chiefly levelled at two leading journalists at the Guardian, former investigations editor David Leigh and reporter Luke Harding, who together wrote a book in 2011 that was the earliest example of what would rapidly become a genre among a section of the liberal media elite, most especially at the Guardian, of vilifying Assange.

In my earlier post I set out Leigh and Harding’s well-known animosity towards Assange – the reason why one senior investigative journalist, Nicky Hager, told the Old Bailey courtroom the pair’s 2011 book was “not a reliable source”. That was, in part, because Assange had refused to let them write his official biography, a likely big moneymaker. The hostility had intensified and grown mutual when Assange discovered that behind his back they were writing an unauthorised biography while working alongside him. But the bad blood extended more generally to the Guardian, which, like Leigh and Harding, repeatedly betrayed confidences and manoeuvred against Wikileaks rather the cooperating with it. Assange was particularly incensed to discover that the paper had broken the terms of its written contract with Wikileaks by secretly sharing confidential documents with outsiders, including the New York Times.

Leigh and Harding’s book now lies at the heart of the US case for Assange’s extradition to the US on so-called “espionage” charges. The charges are based on Wikileaks’ publication of leaks provided by Chelsea Manning, then an army private, that revealed systematic war crimes committed by the US military. Lawyers for the US have mined from the Guardian book claims by Leigh that Assange was recklessly indifferent to the safety of US informants named in leaked files published by Wikileaks. Assange’s defence team have produced a raft of renowned journalists, and others who worked with Wikileaks, to counter Leigh’s claim and argue that this is actually an inversion of the truth. Assange was meticulous about redacting names in the documents. It was they – the journalists, including Leigh – who were pressuring Assange to publish without taking full precautions.

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Making a connection between COVID and climate change is contentious. And unnecessary.

Avoiding a Climate Lockdown (Mariana Mazzucato)

As COVID-19 spread earlier this year, governments introduced lockdowns in order to prevent a public-health emergency from spinning out of control. In the near future, the world may need to resort to lockdowns again – this time to tackle a climate emergency. Shifting Arctic ice, raging wildfires in western US states and elsewhere, and methane leaks in the North Sea are all warning signs that we are approaching a tipping point on climate change, when protecting the future of civilization will require dramatic interventions. Under a “climate lockdown,” governments would limit private-vehicle use, ban consumption of red meat, and impose extreme energy-saving measures, while fossil-fuel companies would have to stop drilling. To avoid such a scenario, we must overhaul our economic structures and do capitalism differently.

Many think of the climate crisis as distinct from the health and economic crises caused by the pandemic. But the three crises – and their solutions – are interconnected. COVID-19 is itself a consequence of environmental degradation: one recent study dubbed it “the disease of the Anthropocene.” Moreover, climate change will exacerbate the social and economic problems highlighted by the pandemic. These include governments’ diminishing capacity to address public-health crises, the private sector’s limited ability to withstand sustained economic disruption, and pervasive social inequality. These shortcomings reflect the distorted values underlying our priorities. For example, we demand the most from “essential workers” (including nurses, supermarket workers, and delivery drivers) while paying them the least. Without fundamental change, climate change will worsen such problems.

The climate crisis is also a public-health crisis. Global warming will cause drinking water to degrade and enable pollution-linked respiratory diseases to thrive. According to some projections, 3.5 billion people globally will live in unbearable heat by 2070. Addressing this triple crisis requires reorienting corporate governance, finance, policy, and energy systems toward a green economic transformation. To achieve this, three obstacles must be removed: business that is shareholder-driven instead of stakeholder-driven, finance that is used in inadequate and inappropriate ways, and government that is based on outdated economic thinking and faulty assumptions.

Read more …

 

 

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– Johann Wolfgang von Goethe

 

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Mar 012017
 
 March 1, 2017  Posted by at 10:46 am Finance Tagged with: , , , , , , , , ,  8 Responses »


Vivien Leigh in Gone With The Wind, directed by Victor Fleming, 1939

 

Raising Pension Age Will Mean Many People Die Before Getting It (G.)
NY Teamsters Pension Fund Becomes First To Run Out Of Money (NYDN)
US Baby Boomers Forced By Law To Start Drawing From Retirement Funds (MW)
Greek Pensioners Brace For Latest Crisis Cuts (K.)
Merkel Bypasses Schäuble To Push For Greek Review Conclusion (K.)
US Stepping In To Ease Greece, Turkey Tensions (K.)
Trump Touts Unity Strength In Speech To Congress (R.)
Donald Trump and Paul Ryan are Not Political Philosophers (Baker)
This Chart Signals China’s Housing Bubble May Burst Soon (ME)
Russia Seen Dominating European Energy for Two Decades (BBG)
Sydney Home Prices Surge 14.8%, Fastest Annual Pace Since 2002 (BBG)
UK Nuclear Power Stations ‘Could Be Forced To Close’ After Brexit (G.)
Denmark Reduces Food Waste By 25% In 5 Years With Help Of One Woman (Ind.)
The World-Ending Fire – How America’s Farmers Betrayed The Land (G.)

 

 

Lots of retirement and pension scare stories today. I can only hope our readers have taken our warnings through the years to heart.

Raising Pension Age Will Mean Many People Die Before Getting It (G.)

Further increases in the state pension age could push it to the point where many working people die before qualifying for it, MPs have warned, in a report that calls for the end of the “triple lock” guarantee on pensions. The Commons work and pensions select committee report on intergenerational fairness, published on Tuesday, claims that financing the triple lock in future will not be possible without increasing the state pension age to 70.5 years – leaving men in Manchester, Birmingham, Bradford and Blackpool dying on average before they receive their state pension. Under the triple lock, pensions have risen every year since 2010 by whichever is the higher figure out of the rate of inflation, average earnings or a minimum of 2.5%. This has lifted many pensioners out of poverty but the committee said it had resulted in the over-65s taking an “ever greater share of national income”.

In its November 2016 report, the committee recommended that the triple lock be replaced from 2020 by a smoothed earnings link. This would benchmark the state pension to a fixed proportion of average earnings in the long run, but would protect its purchasing power in times of inflation. Citing figures from the Institute of Fiscal Studies, the committee said the state pension age would need to rise to 70.5 years by 2060 to make the triple lock affordable, “meaning today’s young would face working lives of over 50 years before receiving a state pension”. It added: “Making the triple lock sustainable would mean pushing the state pension age over average life expectancy in poorer areas of the UK”. Current male life expectancy is lowest in Blackpool, at 67.5, while it is 68.7 in parts of Bradford and 70.2 in much of Manchester. Tower Hamlets in London’s East End has a male life expectancy of 69.1.

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Dominoes.

NY Teamsters Pension Fund Becomes First To Run Out Of Money (NYDN)

Chmil is one of roughly 4,000 retired Teamsters across New York State suffering a fate that could soon hit millions of working-class Americans — the loss of their union pensions. Teamsters Local 707’s pension fund is the first to officially bottom out financially — which happened this month. “I had a union job for 30 years,” Chmil said. “We had collectively bargained contracts that promised us a pension. I paid into it with every paycheck. Everyone told us, ‘Don’t worry, you have a union job, your pension is guaranteed.’ Well, so much for that.” Also on the brink of drying up are the pensions for two Teamster locals — 641 and 560 — in New Jersey, union officials said. Plus 35,000 Teamster members upstate who are part of the money-hemorrhaging New York State Teamsters Pension Fund.

Bigger than all of New York’s Teamster locals combined is the Central States Pension Fund — another looming financial disaster that could leave 407,000 retirees without pensions across the Midwest and South. And there’s still more beyond that, in various industries, officials say. “It’s a nightmare, it has just devastated all of our lives. I’ve gone from having $48,000 a year to less than half that,” said Chmil, one of five Local 707 retirees who agreed to share their stories with the Daily News last week. “I don’t want other people to have to go through this. We need everyone to wake up and do something; that’s why we’re talking,” said Ray Narvaez. Narvaez, 77, got a union certificate upon retirement in 2003 that guaranteed him a lifetime pension of $3,479 a month. The former short-haul trucker — who carried local freight around the city — started hearing talk in 2008 of sinking finances in his union’s pension fund.

But the monthly checks still came — including a bonus “13th check” mailed from the union without fail every Dec. 15. Then Narvaez, like 4,000 other retired Teamster truckers, got a letter from Local 707 in February of last year. It said monthly pensions had to be slashed by more than a third. It was an emergency move to try to keep the dying fund solvent. That dropped Narvaez from nearly $3,500 to about $2,000. “They said they were running out of money, that there could be no more in the pension fund, so we had to take the cut,” said Narvaez, whose wife was recently diagnosed with cancer. The stopgap measure didn’t work — and after years of dangling over the precipice, Local 707’s pension fund fell off the financial cliff this month.

With no money left, it turned to Pension Benefit Guaranty Corp., a government insurance company that covers pension. Pension Benefit Guaranty Corp. picked up Local 707’s retiree payouts — but the maximum benefit it gives a year is roughly $12,000, for workers who racked up at least 30 years. For those with less time on the job, the payouts are smaller.

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“Americans who turn 70 1/2 have until April of the following calendar year to make withdrawals or face stiff penalties…”

US Baby Boomers Forced By Law To Start Drawing From Retirement Funds (MW)

Robert Kiyosaki, author of the “Rich Dad” series of books, has for years predicted an epic market crash when baby boomers, forced by law, start drawing from retirement funds in large numbers. That meltdown was supposed to happen last year. Instead, the bull market raged on: It will be eight years old in March, if measured by the 2009 bottom. Kiyosaki has drawn some flak along the way. Kiyosaki hasn’t given up on the prediction, however, he told MarketWatch in a late-January interview and a series of follow-up emails. Baby boomers still need to start drawing money in 2017, he notes: They hold about $10 trillion in tax-deferred savings accounts, according to Bank of New York Mellon; Americans who turn 70 1/2 have until April of the following calendar year to make withdrawals or face stiff penalties. (There were nearly 75 million Boomers in 2015, according to Pew Research.)

“Every time I say that to people they scoff at me,” said Kiyosaki of his baby boomer meltdown theory. “The fact is, they’re pulling the money out…the thing that did happen that I never expected, was the market went up a lot due to the ‘Trump Bump.’” Early in 2016, when stocks posted their worst January since 2009, it looked like Kiyosaki might be right about the market. Stocks recovered only to slide on Brexit last summer and then fall briefly in an autumn pre-election dip. It’s been upward momentum ever since. The surprise election victory of President Donald Trump, who rallied investors with his promise to revamp the economy, further muddied the picture for Kiyosaki’s forecast. While stocks were already up about 4.3% before the election, its outcome boosted the S&P to finish 2016 with a 9.5% gain. The Dow industrials logged their best annual finish in 3 years, up 13.4%.

[..] Kiyosaki says 2016 brought about other, unexpected, crashes. “What has happened instead of a market crash was the crash in interest rates, which are adversely affecting millions of fixed-income retirees, pension plans, and savers — at the same time incentivizing people like me to become debtors, using debt to acquire income-producing real estate,” he said. Most retirement plans assume an 8% return, Kiyosaki said, but “when interest rates are a 1% or 0% or negative%, returns aren’t working.”

Read more …

Lots of numbers, but none really matter much. The crux is that if there are Greek pensions that are too high, for instance compared to other European ones, cut them, fine. But don’t cut ones that are already below and and all minimal limits. That is not even worth being labeled policy, it’s simply inhumane.

Greek Pensioners Brace For Latest Crisis Cuts (K.)

One group of Greeks that will look upon the return of creditors to Athens for talks aimed at completing the second review with some trepidation is the country’s 2.7 million pensioners. Since 2010, when Greece signed its first bailout with the eurozone and the IMF, the retirement age and social security contributions have increased, while pensions have come down. There is rarely a review that leaves pensions untouched and this one promises to be no different as lenders are targeting a reduction of annual pension spending by about 1.8 billion euros, or 1% of GDP. The IMF has been the most vociferous among Greece’s lenders regarding the need for a further overhaul of the country’s pension system to make it sustainable in the long run.

Between 2000 and 2010, pension spending in Greece climbed from 11 to 15% of GDP, mostly due to large increases in nominal pensions, generous benefits and options for early retirement. During this period, Greece’s figure was the second highest in the eurozone after that of Italy, according to the IMF. Despite two sets of reforms legislated in 2010 and 2012, pension expenditure continued rising and hit 17.7% in 2015, largely due to a GDP contracting by 25% while the average pension decreased by 8% between 2010 and 2015. The IMF believes the combination of low contribution revenues and high pension spending led to the pension deficit climbing from 7.3% of GDP in 2010 to 11% in 2015, making it by far the highest in the euro area.

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It’s about access to the ECB’s QE program, where Draghi starts buying Greek bonds. And perhaps even the markets too. That would hugely limit Greece’s dependence on the Troika.

Merkel Bypasses Schäuble To Push For Greek Review Conclusion (K.)

Kathimerini understands that German Chancellor Angela Merkel is prepared to do whatever it takes to conclude the second review of Greece’s third bailout so that it can join the ECB’s quantitative easing program (QE), on the condition that the government agrees to a package of pension cuts and a reduced tax threshold – amounting to roughly 2% of GDP. According to sources, Merkel has, to this end, already seized the initiative and met with ECB head Mario Draghi. The German chancellor is also expected to bypass any objections that may be raised by her finance minister, Wolfgang Schaeuble, and will push for a specific outline of what midterm measures for debt relief will look like – once Greece agrees to measures demanded by the IMF.

Draghi, as well as ECB executive board member Benoit Coeure, have already made it clear that Greece can only join the QE mechanism if it concludes the review, and midterm measures for debt relief are in place – which is something that, so far, Schaeuble has opposed. Merkel’s plan stipulates that after a staff level agreement is reached, the Greek Parliament will vote through the measures. When this is done, the specifics of the debt relief measures will be presented as a carrot to Athens. This will open the way for it to join the QE scheme and the IMF to rejoin the Greek program.

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if this is true, it’s massive.

US Stepping In To Ease Greece, Turkey Tensions (K.)

Washington appears to have activated a channel of communication with Ankara in a bid to reduce the recent spike in tensions with Greece in the Aegean Sea. According to sources, the US recently asked Ankara to tone down its aggressive stance in the Aegean. It is not known how Ankara has taken the American initiative, but it is clear that Washington fears a possible incident in the Aegean between the two NATO allies, which could destabilize the alliance’s southeast wing. Meanwhile, the incendiary rhetoric emanating from Ankara, albeit from nongoverment politicians, continued Tuesday with the leader of the ultra-right MHP party Devlet Bahceli speaking of Greek islands that remained “under occupation.” Bahceli is an ally of Recep Tayyip Erdogan and supports the bid by the Turkish president to expand his executive powers in the referendum that will take place in Turkey on April 16.

Citing what he described as international law, Bahceli called for the “unconditional end to the occupation of the islands,” referring to a string of islands and islets in the eastern Aegean. He went even further, referring to the Greek-Turkish war in 1922 and the way the Greek army was defeated by Turkish forces in Asia Minor – without, however, mentioning the Greek population of Turkey which was uprooted as a result of the war. “If [the Greeks] want to fall back into the sea [referring to how the Greek army was pushed out of Asia Minor] and if they are up to it, they are welcome to do it. The Turkish army is ready,” he said. The MHP leader also said the divided island of Cyprus is Turkish. Since the recent escalation of tension between Greece and Turkey, progress in the UN-backed peace talks between Greek and Turkish Cypriots has stalled.

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Most remarkable thing must be that Trump has learned to read from a teleprompter, and was told to stick with only that.

Trump Touts Unity Strength In Speech To Congress (R.)

President Donald Trump told Congress on Tuesday he was open to immigration reform, shifting from his harsh rhetoric on illegal immigration in a speech that offered a more restrained tone than his election campaign and first month in the White House. Trump, in a prime-time address to a country that remains divided over his leadership, set aside disputes with Democrats and the news media to deliver his most presidential performance to date, seeking to regain the confidence of Americans rattled by his leadership thus far. The president’s speech was long on promises but short on specifics on how to achieve a challenging legislative agenda that could add dramatically to budget deficits. He wants a healthcare overhaul, broad tax cuts and a $1 trillion public-private initiative to rebuild degraded roads and bridges.

Trump built a base of support behind his presidential campaign by vowing to fight illegal immigration. In his speech, he took a more moderate tone, appealing to Republicans and Democrats to work together on immigration reform. He said it was possible if both Republicans and Democrats in Congress were willing to compromise, although he also said U.S. immigration should be based on a merit-based system, rather than relying on lower-skilled immigrants. Comprehensive immigration reform eluded his two predecessors, Democrat Barack Obama and Republican George W. Bush, because of deep divisions within Congress and among Americans over the issue. Trump said reform would raise wages and help more struggling families enter the middle class. “I believe that real and positive immigration reform is possible, as long as we focus on the following goals: to improve jobs and wages for Americans, to strengthen our nation’s security, and to restore respect for our laws,” said the Republican president.

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Dean Baker corrects the NYT.

Donald Trump and Paul Ryan are Not Political Philosophers (Baker)

Apparently the paper is confused on this issue since it headlined a front page piece on the budget, “Trump budget sets up clash over ideology within G.O.P.” The article lays out this case in the fourth paragraph: “He [Trump] also set up a battle for control of Republican Party ideology with House Speaker Paul D. Ryan, who for years has staked his policy-making reputation on the argument that taming the budget deficit without tax increases would require that Congress change, and cut, the programs that swallow the bulk of the government’s spending — Social Security, Medicare and Medicaid.” Most of us recognize Donald Trump and Paul Ryan as politicians who hold their jobs as a result of being able to gain the support of important interest groups. It really doesn’t make much difference what their political philosophy is.

Contrary to what the NYT might lead us to believe, this is not a battle of political philosophy, it is a battle over money. On this score, the NYT also gets matters seriously confused. First of all, it is wrong to describe Social Security, Medicare, and Medicaid as “the programs that swallow the bulk of government spending.” Under the law, Social Security can only spend money raised through its designated taxes, either currently or in the past. For this reason, it is not a drain on the rest of the budget unless Congress changes the law. Medicaid would also not rank among the three largest programs. The government is projected to spend $592 billion this year on the military compared to $401 billion on Medicaid.

The claim that Paul Ryan is concerned that these programs would “swallow the bulk of government spending” directly contradicts everything Paul Ryan has been explicitly advocating for years. Ryan has repeatedly put forward budgets that would reduce the size of the federal government to zero outside of the military, Social Security, Medicare, and Medicaid. It is difficult to understand how a major newspaper can so completely misrepresent a strongly and repeatedly stated view of one of the country’s most important political figures.

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Full blown insanity.

This Chart Signals China’s Housing Bubble May Burst Soon (ME)

The probability that a real estate bubble may burst in China is rising. The financial sector heavily depends on real estate, which in turn exposes the entire Chinese economy to systemic risk. This link means that a downturn in real estate could soon spread to other areas of the Chinese economy if banks face liquidity shortfalls. Also, falling housing prices could result in more non-performing loans (NPLs). While NPLs officially account for only 1.75% of all Chinese loans, the government is likely understating the figure. BMI Research, a financial consulting firm, estimated in a 2016 report that NPLs could be close to 20% of loans.

As banks gave more credit to real estate developers and buyers, their profitability stalled. In theory, China’s economy is not based on capitalism and thus doesn’t revolve around profitability; but in practice, money needs to come from somewhere. A company that doesn’t make a profit can’t survive in the long run. The Chinese government can’t afford to let banks fail since it would threaten both the financial system’s health and the key lifeline to state-owned enterprises that provide jobs. This surge in China’s real estate prices, fueled by ongoing credit expansion, are forcing the government to choose between deflating the housing market and slowing growth.

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Pipelines vs pipedreams.

Russia Seen Dominating European Energy for Two Decades (BBG)

Europe has wanted to wean itself from Russian natural gas ever since supplies from its eastern neighbor dropped during freezing weather in 2009. Almost a decade later, the region has never been more dependent. Gazprom, Russia’s state-run export monopoly, shipped a record amount of gas to the European Union last year and accounts for about 34% of the trading bloc’s use of the fuel. Russia will remain the biggest source of supply through 2035, Shell said last week, echoing comments by BP in January. EU lawmakers have had their hearts set on diversifying supplies with liquefied natural gas delivered by tanker from the U.S., where production of the fuel skyrocketed last year. So far, those shipments have failed to materialize amid a lack of firm contracts and higher prices outside Europe. Overall, LNG shipments to the region, led by Qatar, were stagnant last year. “Russia will for sure remain Europe’s largest gas supplier for at least two more decades,” even if most of the incremental gains in EU imports are met by LNG from somewhere else, said Vladimir Drebentsov, chief economist for Russia and CIS at BP in Moscow.

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It was once a good place to live.

Sydney Home Prices Surge 14.8%, Fastest Annual Pace Since 2002 (BBG)

Dwelling values in Australia’s largest city rose at the fastest annual pace in 14-years in February as record-low interest rates outweighed regulatory efforts to avert a housing bubble. Average values in Sydney surged by 18.4%, the biggest jump since December 2002 when the nation was at the tail-end of the early 2000’s housing boom, according to data provider CoreLogic Inc. Across the state capitals combined, values rose by 11.7%. Despite tighter lending restrictions aimed at discouraging speculative buying by landlords, the runaway housing market shows few signs of easing amid strong economic growth, historically low borrowing costs and a tax system that offers perks for property investors. Housing affordability has become a hot-button political issue, with New South Wales premier Gladys Berejiklian promising to make it one of her top priorities.

Last month, she appointed former Reserve Bank of Australia governor Glenn Stevens to advise on the options. Central bank Governor Philip Lowe has signaled he’d prefer not to ease interest rates as it would further inflate Sydney house prices and drive already record household debt even higher, threatening financial stability. “The strong growth conditions across Sydney have provided a substantial wealth boost for home owners,” said Tim Lawless, head of research at CoreLogic. “However, the flipside is that housing costs are becoming increasingly out of reach.” Prices are now almost 8.5 times higher than household incomes in Sydney, according to CoreLogic. There are, however, considerable regional variations. Perth, in the mining heartland of Western Australia that’s suffering as a decade-long investment boom winds down, saw values fall by 4.5% in the year to February.

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You can’t easily tweak internation law on nuclear. For good reasons.

UK Nuclear Power Stations ‘Could Be Forced To Close’ After Brexit (G.)

Nuclear power stations would be forced to shut down if a new measures are not in place when Britain quits a European atomic power treaty in 2019, an expert has warned. Rupert Cowen, a senior nuclear energy lawyer at Prospect Law, told MPs on Tuesday that leaving the Euratom treaty as the government has promised could see trade in nuclear fuel grind to a halt. The UK government has said it will exit Euratom when article 50 is triggered. The treaty promotes cooperation and research into nuclear power, and uniform safety standards. “Unlike other arrangements, if we don’t get this right, business stops. There will be no trade. If we can’t arrive at safeguards and other principles that allow compliance [with international nuclear standards] to be demonstrated, no nuclear trade will be able to continue.”

Asked by the chair of the Commons business, energy and industrial strategy select committee if that would see reactors switching off, he said: “Ultimately, when their fuels runs out, yes.” Cowen said that in his view there was no legal requirement for the UK to leave Euratom because of Brexit: “It’s a political issue, not a legal issue.” The UK nuclear industry would be crippled if new nuclear cooperation deals are not agreed within two years, a former government adviser told the committee. “There is a plethora of international agreements that would have to be struck that almost mirror those in place with Euratom, before we moved not just material but intellectual property, services, anything in the nuclear sector. We would be crippled without other things in place,” said Dame Sue Ion, chair of the Nuclear Innovation and Research Advisory Board, which was established by the government in 2013.

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Bur perhaps none of this matters in the long run, perhaps waste is the inevitable consequence of the need to feel rich, be rich. As Ken Latta put it in his February 23 article here at the Automatic Earth: “wealth is best measured by the capacity to be utterly wasteful”.

Denmark Reduces Food Waste By 25% In 5 Years With Help Of One Woman (Ind.)

Never underestimate the power of one dedicated individual. A woman has been credited by the Danish Government for single-handedly helping the country reduce its food waste by 25% in just five years. Selina Juul, who moved from Russian to Denmark when she was 13 years old, was shocked by the amount of food available and wasted at supermarkets. She told the BBC: “I come from a country where there were food shortages, we had the collapse of infrastructure, communism collapsed, we were not sure we could get food on the table”. Her organisation, Stop Spild Af Mad – which translates as Stop Wasting Food – made all the difference and is recognised as one of the key drivers behind the government’s focus to tackle food waste.

“She was this crazy Russian woman that walked in the door, with a crazy idea about stop wasting food and she has come really far since,” Maria Noel, communication officer of Dagrofa, a Danish retail company, told the BBC. “She basically changed the entire mentality in Danemark,” she added. Ms Juul convinced Rema 1000, the country’s biggest low-cost supermarket chain, to replace all its quantity discounts with single item discounts to minimise food waste. Max Skov Hanser, a grocer at Rema 1000, said the retailer wasted about 80 to 100 bananas every day. However, after the supermarket put up a sign saying “take me I’m single”, it reduced the waste on bananas by 90%. In the past five years Denmark has become one of the leading European countries in the fight against food waste. Last year, a charity in Copenhagen opened Denmark’s first ever food surplus supermarket, which sells products at prices 30 to 50% cheaper than usual retailers.

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On Wendell Berry.

The World-Ending Fire – How America’s Farmers Betrayed The Land (G.)

Berry’s essays roam widely over such topics as “Writer and Region” (an A-grade discussion of The Adventures of Huckleberry Finn), “The Work of Local Culture” and his high-minded disinclination to swap his ancient typewriter for a computer (complete with several shocked technophile responses). But the majority of them return, out of a kind of disgust, to the idea of betrayal, and the way in which the US farming industry has abandoned its responsibility to the terrain it has been cultivating for the last century and a half. The startling aspect of this charge sheet is its proxy villain, which is neither the cereal companies nor the burger chains but the American dream. Ronald Reagan once named his favourite children’s books as Laura Ingalls Wilder’s Little House series, in which the resourceful Ingalls family head west across the newly available prairie states.

Pa chops trees, builds shacks and plants corn while Ma keeps house and thinks the native population “dirty”. To Berry, by contrast, the Pa Ingallses of the 1870s midwest are simply opportunists casting aside the old ways without bothering to reflect on their value, exploiters whose hard work and high moral tone obscure the absence of any real relationship with the land they are bent on despoiling. “A Native Hill”, a series of pointed reflections on the landscape of Henry County, Kentucky, notes that the original inhabitants had managed to preserve its integrity for thousands of years. The pioneers “in a century and half plundered the area of at least half its topsoil and virtually all its forest”, and constructed a road they may not have needed in the first place.

On the one hand, Berry is placing the Native American Indians and Pa Ingalls in false opposition: the effervescing Ingalls brood were different kinds of people – most obviously, nomads and settlers – wanting different things from the world they inhabited. On the other hand, Berry’s agrarian arguments are persuasive. To produce five feet of topsoil, he suggests in “The Making of a Marginal Farm”, takes 50,000 to 60,000 years. Meanwhile, the rallying cries are mounting up: think small; distrust the combines; a family can live for a year off a 60 sq ft vegetable plot; nobody ever did themselves any good by living in a city (he derides “the assumption that the life of the metropolis is the experience, the modern experience … ”).

As for The World-Ending Fire’s implications, you can just about envisage a future in which, once the fossil fuels have run out, necessity forces us all to live in smaller, self-sustaining societies without the benefit of the internal combustion engine. So perhaps Berry will have the last laugh. Whether by that stage in human evolution it will be worth having is another matter.

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May 092015
 
 May 9, 2015  Posted by at 11:07 am Finance Tagged with: , , , , , , , ,  11 Responses »


Arthur Rothstein Steam shovels on flatcars, Cherokee County, Kansas 1936

Wall Street Soars On Hopes Of Fed Reprieve, Yet Sting In The Tail (AEP)
Wall Street Is One Sick Puppy (David Stockman)
Currencies’ Wild Ride to Get Wilder as US Rate Rise Beckons (Bloomberg)
Low Productivity Alarms US Policy Makers (FT)
Countdown To The Stock-Market Crash Of 2016 Is Ticking Louder (Paul B. Farrell)
‘Good’ Jobs Report? 15 Million Unemployed People Want To Work (MarketWatch)
UK Braces for Battle Over Europe After Cameron’s Victory (Bloomberg)
The $364 Billion Real Estate Threat Inside China’s Biggest Banks (Bloomberg)
Deflation Works! (Bill Bonner)
Documents Distributed by Greece’s Varoufakis ‘Baffle’ Eurozone Officials (WSJ)
Illinois Supreme Court Strikes Down Law to Rein in Public Sector Pensions (WSJ)
Democracy Is A Religion That Has Failed The Poor (Guardian)
Petrobras: The Betrayal of Brazil (Bloomberg)
The Clintons and Their Banker Friends- The Wall Street Connection (Nomi Prins)
Germany Spies, US Denies (Bloomberg)
Trans-Pacific Partnership Will Lead To A Global Race To The Bottom (Guardian)
Is There Such A Thing As A Skyscraper Curse? (Economist, March 28)
Global Crime Syndicates Are Buying Expensive Australia Real Estate (Domain)
Australian PM Adviser Exposes Cimate Change As Hoax, Shames All of Science (SBS)

“Markets keep treating weak data as “good news” (because it delays Fed tightening), but there comes a point when the macro-economic malaise does so much damage to earnings that reality catches up.”

Wall Street Soars On Hopes Of Fed Reprieve, Yet Sting In The Tail (AEP)

Pay packets have fallen across the gamut of US industry, manufacturing, and trade over the last two months, greatly reducing the likelihood of any rise in interest rates by the US Federal Reserve until later this year. The Dow Jones index of stocks soared by 260 points to 18,186 in early trading after the US non-farm payrolls report for April revealed that wage pressures remain all but dead in the American labour market. Contracts on the futures markets immediately pushed out the first rate rise for several months, pricing in a 51pc chance of ‘lift-off’ in December. The long-feared inflexion point for the global monetary cycle may have been delayed once again. Emerging market equities rallied strongly on hopes of another six-month reprieve for dollar debtors across the world.

Companies and state entities outside the US have borrowed a record $9 trillion in dollars, leaving them acutely vulnerable to a currency “margin call” triggered by Fed tightening. This dollar leverage has jumped from $2 trillion fourteen years ago. It is heavily concentrated in Brazil, Russia, South Africa, Turkey, China and the rest of emerging Asia. The US generated 223,000 jobs in April and the unemployment rate fell to a 7-year low of 5.4pc, yet the underlying trend remains disappointingly weak. Both overtime and the number of hours worked edged down. The jobs figure for March was revised down sharply to 85,000. The labour participation rate for men is still stuck at 69.4pc, six percentage points lower than it was fifteen years ago and the lowest level since modern data began after WWII.

Had it not been for a surge in pay for financial services – the spill-over from an increasingly frothy asset boom – overall weekly earnings would have dropped for a second month in a row. It is unclear how the Fed will respond this soggy data. Dennis Lockhart, head of the Atlanta Fed, remained hawkish this week, insisting that the economy would soon return to growth rates of 2.5pc to 3pc after grinding to halt in the first quarter. He warned that a rate rise in June was still “in play”, contrary to market assumptions. “I’m still of the view that the conditions will be appropriate in the middle of the year, which we are getting closer to,” he said. Yet the US economy has not yet recovered from a winter shock.

Mr Lockhart’s own advance indicator – the Atlanta Fed’s GDPNow series – suggests that growth has been running at a pace of just 0.8pc in the five weeks to early May. It is below the Fed’s stall speed gauge. China’s exports fell 6.9pc in April from a year earlier and remain shockingly weak. The eurozone’s retail sales unexpectedly slid 0.8pc in March, and Germany’s index of core industrial orders has turned negative. Markets keep treating weak data as “good news” (because it delays Fed tightening), but there comes a point when the macro-economic malaise does so much damage to earnings that reality catches up.

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“..the number of full-time jobs dropped by 252,000 in April – hardly an endorsement of the awesomeness theme.”

Wall Street Is One Sick Puppy (David Stockman)

The robo-traders – both the silicon and carbon based varieties – were raging again today in celebration of a “goldilocks” jobs report. That is, the headline number for April was purportedly strong enough to sustain the “all is awesome” meme, while the sharp downward revision for March to only 85,000 new jobs will allegedly enable the Fed to kick-the-can yet again – this time until its September meeting. As one Cool-Aid drinker put it, ‘“Probably best scenario in which the market was hoping for growth but not (so strong) that the Fed needs to hike in June,” said Ryan Larson at RBC Global Asset Management.’ Today’s knee jerk rip, of course, is the fifth one of roughly this magnitude since February 20th, but its all been for naught.

The headline based rips have not been able to levitate the S&P 500 for nearly three months now.In fact, however, the incoming data since February 20 has been uniformly bad. The chop depicted in the graph, therefore, only underscores that the market is desperately churning as it attempts to sustain an irrationally exuberant high. Indeed, today’s jobs data was not bullish in the slightest once you get below the headline. Specifically, the number of full-time jobs dropped by 252,000 in April – hardly an endorsement of the awesomeness theme. True enough, the monthly number for this important metric bounces around considerably. Yet that’s exactly why the algo fevers stirred by the incoming data headlines are just one more piece of evidence that the stock market is completely broken.

What counts is not the headline, but the trend; and when it comes to full time jobs there are still 1.1 million fewer now than at the pre-crisis peak in Q4 2007. Needless to say, a net shrinkage of full-time jobs after seven and one-half years is not exactly something that merits a 20.5X multiple on the S&P 500 or 75X on the Russell 2000. That’s the case especially when that same flat lining jobs trend has been underway for nearly a decade and one-half. To wit, since April 2000 the BLS’ full time job count has grown at only 0.35% annually. Now how in the world do you capitalize earnings at a rate which implies gangbusters growth of output and profits as far as the eye can see, when the US economy is self-evidently trapped in a deep rut that represents a drastic downshift from all prior history?

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Rollercoaster ahead.

Currencies’ Wild Ride to Get Wilder as US Rate Rise Beckons (Bloomberg)

If you thought the past week in the foreign-exchange market was wild, you haven’t seen anything yet. That’s the outlook from investors and strategists ranging from State Street Global Advisors to Cambridge Global Payments after price swings in the euro versus the dollar approached the highest level in more than three years. Volatility surged as traders unwound bets for gains in European bonds and stocks that had been funded in euros, prompting demand for the shared currency to close out what are known as carry trades. Price swings accelerated Friday after a lackluster U.S. employment report, raising more questions than answers about the timing of Federal Reserve interest-rate increases. “This unusual backdrop is going to create some turmoil,” Dan Farley at State Street.

“The next several weeks are likely to be choppy as things continue to be absorbed, bouncing off the good and the bad news.” The euro’s one-month implied volatility jumped as high as 13.2%, inching toward the 14% level where it last closed in December 2011. The common currency was unchanged on the week at $1.1199 as of 5 p.m. on Friday in New York. The Bloomberg Dollar Spot Index slid 0.7%, falling a fourth week in its longest run of declines since October 2013. The greenback weakened 0.3% to 119.76 yen. Europe’s bond rout wiped more than $400 billion from the value of the region’s debt in the past two weeks as investors questioned whether the ECB will continue its program of asset purchases through September 2016 amid signs the region’s economy is picking up.

The selloff eroded the premium Treasuries pay over bunds to the narrowest since February, lessening the attractiveness of dollar-denominated assets. “You’re going to see continued volatility driven by the bond markets,” said Karl Schamotta at Cambridge Global Payments in Toronto. “Investors are increasingly concerned that they could be caught in the exits when everyone rushes out of the theater.”

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Apparently these people find it hard to see what’s wrong.

Low Productivity Alarms US Policy Makers (FT)

US innovators claim they have never been busier, but their ideas are persistently failing to transform the country’s economic data. Labour productivity fell an annual 1.9% in the first three months of the year, while unit labour costs rose sharply, official figures showed on Wednesday. The output per hour figures came as the country’s gross domestic product barely grew during the quarter even as it added an average of nearly 200,000 jobs a month. The numbers confirm a longer-run trend of slowing productivity that is alarming policy makers and complicating Federal Reserve decision-making. “It has slowed in quite a worrying way,” said Torsten Slok, chief international economist at Deutsche Bank.

Productivity, which measures how efficiently inputs such as labour and capital are used, evolves over years and decades. This means a single quarter’s data should not be over-interpreted — especially one that was hit by one-time factors including freezing temperatures. The first quarter dive mirrors a weather-affected first quarter in 2014. But the numbers, which follow a 2.1% annual productivity drop in the fourth quarter, confirm a broader tendency that has been mirrored in a number of advanced economies and has perplexed economists. Analysis from the San Francisco Federal Reserve shows there was a surge in US productivity between 1995 and 2003, driven by the IT boom, with growth doubling from the annualised average of 1.5% set in the 1970s, 1980s and early 1990s.

The picture then reversed, however, and the US has been stuck in a lower-productivity growth trend since. Internationally comparable figures from the Conference Board show a broader slowdown among advanced economies including the UK and Japan over recent decades. Some economists say these weak numbers are jarring given the inventiveness being displayed in sectors such as software, medicine, and advanced manufacturing, and the rapid advance of robotics. “People are saying the pace of innovation has never been higher,” says Martin Neil Baily, an economist at Brookings, the think-tank.

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“2016 sounds more and more like McCain/Palin’s 2008 loss when the GOP was also deep in denial about the coming market crash..”

Countdown To The Stock-Market Crash Of 2016 Is Ticking Louder (Paul B. Farrell)

Warning bells just keep getting louder and louder as the countdown to the Crash of 2016 keeps ticking. Wall Street’s in denial, but the Washington Post warns: “U.S. economic growth slows to 0.2%, grinding nearly to a halt.” USA Today hears “Bubble Talk” at the Vegas “Davos for Geeks.” Earlier the Wall Street Journal warned, “declining population could reduce global economic growth by 40%.” Then recently the “slow-growth Fed” was blamed. Wrong, former Fed chief Ben Bernanke counterattacked: “I’m waiting for the Journal to argue for a well-structured program of public infrastructure development, which would support growth in the near term by creating jobs and in the longer term by making our economy more productive.”

But for years the Fed “has been pretty much the only game in town as far as economic policy goes.” Today “we should be looking for a better balance between monetary and other growth-promoting policies, including fiscal policy.” Fiscal policy? No, Ben, not a chance. The GOP controls economic policy. And they will never give “growth-promoting fiscal policy” victories to President Obama and Hillary Clinton before the presidential election of 2016. Never. In spite of Bernanke’s obviously rational solution to the core problems of the American economy, one that would help the American people, the GOP will never, ever agree to fiscal stimulus programs that give the Democrats bragging rights and make Obama and Clinton look good before the elections.

The GOP is hungry for power, very hungry. They lost the presidency twice to Obama. They want it back. And now their collective ego is convinced that with the $889 million backing from the Koch Empire they can beat Hillary and take absolute control of the American democracy: win the presidency, hold Congress, gain the power to issue executive orders and veto legislation, appoint more than 6,000 insiders including cabinet officers, regulatory heads, federal judges, ambassadors, staff bureaucrats, and more. Yes, the GOP knows all that power is on the line in 2016. Listen: 2016 sounds more and more like McCain/Palin’s 2008 loss when the GOP was also deep in denial about the coming market crash. Money manager Jeremy Grantham’s predictions see beyond the Big Oil-funded GOP’s gross denial, he sees that “around the presidential election or soon after, the market bubble will burst, as bubbles always do, and will revert to its trend value, around half of its peak or worse.”

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Only 15 million out of 93 million not in labor force? So 78 million bluntly refuse to work? Hard to believe.

‘Good’ Jobs Report? 15 Million Unemployed People Want To Work (MarketWatch)

There is good news in the jobs market, just not enough of it. The Bureau of Labor Statistics reported Friday that the U.S. economy continued to create jobs at a healthy pace of nearly 200,000 per month in the first four months of the year, and the unemployment rate dipped to 5.4% in April, the lowest since May 2008. But we are still far from achieving an economy that offers a job for everyone who wants one. And wages are barely growing for the 148 million who do have a job. Nearly 15 million jobless people say they want to work, but the Federal Reserve seems nearly ready to declare victory, figuring that the unemployment rate can’t go much lower without setting off a harmful inflationary spiral.

There is scant evidence that tight labor markets are putting any pressure on companies to raise their prices: Unit labor costs are up just 1.1% in the past year. Inflation — no matter how you measure it — is not a risk in the near term, or even in the medium term. There’s little evidence that workers have gotten those hefty raises that economists insisted were coming any day now. Growth in average hourly earnings is stuck in the same tight range of about 2% per year that it’s been at for the past five years. In April, average hourly earnings rose only 0.1%, bringing the change over the past year to 2.2%. And the “average” wage overstates the reality for most workers.

The average is boosted by rapid pay increases for just a few, including executives, whose “salaries” include bonuses and the receipt of shares of the company’s stock or options to buy shares. The encouraging acceleration in compensation that was reported in the employment cost index last week was largely due to sales commissions and bonuses collected by only a few. Most workers aren’t seeing that 2.2% pay increase. For the median full-time worker, usual weekly earnings are up just 1.5% in the past year, far below the 4% pay raise they got the last time that the unemployment rate was as low as 5.4%. (The “median” means that half of the workers got less than a 1.5% pay raise, and half got more.)

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“While the U.K. Independence Party, which campaigns for an EU exit, has only won one seat, the party won 13% of the popular vote..”

UK Braces for Battle Over Europe After Cameron’s Victory (Bloomberg)

David Cameron persuaded U.K. voters to give him a second term as prime minister. Now he needs to persuade them to stay in the European Union. The Conservatives’ surprise win came after a campaign that saw Cameron’s pledge of a referendum on EU membership by 2017 share almost equal billing with his record of delivering economic stability. Cameron, who has said he wants the country to stay in the EU, will first seek to renegotiate Britain’s membership terms. The Conservatives “may even try and bring things forward to stop this wrecking the next two years for them,” said Tim Bale, professor of politics at Queen Mary University in London.

“It’s a very tight majority which means he will have to make promises to people and do things to keep them on board on Europe, in particular as Cameron has a record of backing down under pressure to euro skeptics.” While the pound surged on Cameron’s victory amid optimism that an economic recovery will solidify under his administration, some investors warned that the euphoria could be short lived as a EU referendum draws closer into view. The vote is intended to settle a question that’s divided the nation since the U.K. joined Europe’s common market in 1973, and split the Conservatives for a generation. “Initial short-term cheer could be followed by a medium-term chill,” said Fabrice Montagne at Barclays.

“The referendum is likely to generate a substantial amount of uncertainty, particularly if polls fail to show more substantial support for EU membership in the coming weeks and months.” With most seats declared, the BBC forecast the Tories to take 331 of Parliament’s 650 seats to Labour’s 232 seats, a result that would allow Cameron to govern alone. While the U.K. Independence Party, which campaigns for an EU exit, has only won one seat, the party won 13% of the popular vote, according to the BBC. Last year, UKIP won the most votes in elections for the European Parliament, taking almost a third of Britain’s seats.

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That’s just China’s biggest four banks. “Property prices in 70 Chinese cities have fallen for more than a year..” “Loans backed by properties now comprise 40% of all facilities held by Fitch-rated banks..”

The $364 Billion Real Estate Threat Inside China’s Biggest Banks (Bloomberg)

Fitch Ratings has called real estate the “biggest threat” to Chinese banks as surging loans tied to properties coincide with defaults and falling sales. Corporate loans backed by buildings have grown almost fivefold since 2008 and residential mortgages have more than tripled in the period among lenders rated by Fitch, the company said Friday. That’s seen property loans held by China’s four biggest lenders soar to a total 2.26 trillion yuan ($364 billion), according to their annual reports. “Collateral is supposed to reduce bank risk – but the rise of property collateral in corporate loans may actually increase the chance of bank failure,” Fitch analysts Jack Yuan and Grace Wu said in the report.

“This is because the widespread use of such collateral has lowered the perceived risks of lending, fueling China’s credit build-up and spreading real-estate risk to other sectors of the economy.” Alarm bells sounded last month when Kaisa Group Holdings Ltd. became the first Chinese developer to default on offshore bonds, putting more scrutiny on a sector that made up a third of the nation’s economy in 2013, according to Gavekal Dragonomics. Property prices in 70 Chinese cities have fallen for more than a year, the worst losing streak in at least a decade, while sales have dropped for 11 of the past 24 months, Bloomberg-compiled data show. Loans backed by properties now comprise 40% of all facilities held by Fitch-rated banks, according to the report. Total credit to real estate could be as high as 60% if other types of financing besides direct loans are included, Fitch said.

“The property market is usually one of the main revenue contributors to the state,” said Raymond Chia, the head of credit research for Asia ex-Japan at Schroder Investment Management Ltd. “With the weakness in the sector, especially with excess inventory overhang as well as weak earnings by developers, economic growth will be affected.” Industrial & Commercial Bank of China, the world’s biggest bank by assets, held 443.5 billion yuan of real estate loans, or 6.6% of all facilities, at the end of last year, according to its annual report. The portion for Bank of China, the nation’s second-largest, was 714.6 billion yuan of advances, or 8.4% of its credit book.

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“Today, a long depression in the US would be unbearable. The public couldn’t stand it. Six out of ten households live paycheck to paycheck. Can you imagine what would happen if those paychecks ceased?”

Deflation Works! (Bill Bonner)

As we have seen, Japan has already had a 25-year slump. The US is now in Year 8 of its slump, with fragile growth at only half the rate of the last century. They could get better… or worse. Negative rates could keep the cronies in business. The slump itself – combined with peak debt and 500 million Chinese laborers – could keep inflation in check. But the point comes when investors see that the risk of loss (because something can always go wrong) is greater than the hope of gain. That moment must be approaching in the US stock market. Prices are near record highs, even as the economy flirts with recession. One day, perhaps soon, we will see stocks falling – as much as 1,000 points in 24 hours. Jacking up the stock market has been the Fed’s singular success. Activism has been its creed.

Interventionism is its modus operandi. It will not sit tight as the market falls apart and the economy goes into recession. Instead, it will announce QE 4. It will try to enforce negative interest rates. And it will move – as will the Japanese – to “direct monetary funding” of government deficits. That is, it will dispense with the fiction of “borrowing” from its own central bank. It will simply print the money it needs. The US Fed of 1930 was not nearly as ambitious and assertive as the Fed of 2015. In the ‘30s, it watched as the economy chilled into a Great Depression. As Ben Bernanke told Milton Friedman, “We won’t do that again.” It couldn’t if it wanted to. Back in the ‘30s, consumer debt had barely been invented. Most people still lived on or near farms, where they could take care of themselves even if the economy was in a depression.

Few people had credit. Instead, they had savings. There were no food stamps. No disability. No rent assistance. No zombie industries. No student debt. No auto debt. No cash-back mortgages. And cash was real money, backed by gold. Today, a long depression in the US would be unbearable. The public couldn’t stand it. Six out of ten households live paycheck to paycheck. Can you imagine what would happen if those paychecks ceased? Supposedly, the US economy is still growing… with the stock market near record highs. Yet, one out of every five households in America has not a single wage-earner. Among inner-city black men, ages 20-24, only 4 out of 10 have jobs. Half the households in the US count on government money to make ends meet. And 50 million get food stamps. What would happen to the cities – and the suburbs – in a real depression?

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They try to act as if Yanis were stupid, but they themselves lack understanding of the matter at hand.

Documents Distributed by Greece’s Varoufakis ‘Baffle’ Eurozone Officials (WSJ)

Economic plans and growth estimates distributed by Greek Finance Minister Yanis Varoufakis to some of his eurozone counterparts have baffled officials involved in the talks over its international bailout. Officials say that the files differ greatly from what has been discussed at the technical level in Brussels in recent days and underline how Mr. Varoufakis continues to complicate progress toward a financing deal. The 36-page document, entitled “Greece’s recovery: A blueprint” and seen by The Wall Street Journal, was presented by Mr. Varoufakis to his counterparts in Paris and Rome, as well as senior officials in Brussels, while he was touring European capitals over the past week, according to four European officials.

The Greek Finance Ministry said the document was a first draft of a new plan “for the recovery and growth of the country in the [post-bailout] era,” which it said Mr. Varoufakis had discussed informally with some of his counterparts. “This is a long-term project that goes well beyond the limits of the negotiation that is currently underway in the Brussels Group,” as the group of experts representing Greece and its creditors is known, the ministry said. Greece’s leftist-led government is locked in negotiations with the European Union and the International Monetary Fund over its next slice of financial aid as part of a €245 billion rescue package. Disagreements over cuts to Greece’s pension system and changes to its labor rules that would make it easier to dismiss workers have held up a deal on further loans.

While the talks have become more constructive, differences remain wide, European officials say. The paper focuses on the Greek economy and how it can return to growth. “Perhaps it is time to visualize a recovering Greece before we unlock the present impasse,” the document says, before going into areas where the country plans overhauls. While some of the outlined measures are the same as those agreed to in the negotiations—such as the creation of an independent tax commissioner—the paper differs in other areas. One significant difference is the creation of a so-called bad bank that would house and wind down Greek lenders’ bad loans. “Conveniently, the financing of the bad bank is not treated,” an EU official said.

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Prelude to multiple bankruptcies.

Illinois Supreme Court Strikes Down Law to Rein in Public Sector Pensions (WSJ)

The Illinois Supreme Court struck down the state’s 2013 pension overhaul, unraveling an effort by lawmakers to rein in benefits for the consistently underfunded public-sector system. The current pension shortfall is estimated at $111 billion, one of the largest nationally. The high court affirmed a decision in November by a state circuit court that the legislative changes violated pension protections written into the state constitution. The decision is a victory for a consortium of public-sector unions while creating a huge challenge for new Republican Gov. Bruce Rauner, who already faces a yawning budget deficit for the coming fiscal year.

“The financial challenges facing state and local governments in Illinois are well known and significant,” said Justice Lloyd Karmeier, writing for the entire court. “It is our obligation, however, just as it is theirs, to ensure that the law is followed.” Illinois joins Oregon and Arizona as recent examples of high courts peeling back pension overhauls. Other states, including Colorado and Florida, have upheld laws cutting benefits. Mr. Rauner’s office urged a constitutional amendment to help fix the problem. Otherwise, the state will be forced to turn to tax increases, budget cuts or, as Mr. Rauner discussed earlier this year, municipal bankruptcy. Recent federal bankruptcy cases in Detroit and Stockton, Calif., have raised the question of whether pension benefits are fully protected.

After the ruling, Standard & Poor’s Ratings Services put the state’s credit ratings on watch for potential downgrade, saying Illinois faces “profound credit challenges.” The Illinois law would have reduced retirement costs by shrinking cost-of-living increases for retirees, raising retirement ages for younger workers, and capping the size of pensions. “The court’s ruling confirms that the Illinois Constitution ensures against the government’s unilateral diminishment or impairment of public pensions,” said Michael Carrigan, president of the Illinois ALF-CIO, speaking on behalf of the We Are One Illinois coalition of unions.

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It’s not democracy, it’s what is not democracy but is still called by that name.

Democracy Is A Religion That Has Failed The Poor (Guardian)

Right now I feel ashamed to be English. Ashamed to belong to a country that has clearly identified itself as insular, self-absorbed and apparently caring so little for the most vulnerable people among us. Why did a million people visiting food banks make such a minimal difference? Did we just vote for our own narrow concerns and sod the rest? Maybe that’s why the pollsters got it so badly wrong: we are not so much a nation of shy voters as of ashamed voters, people who want to present to the nice polling man as socially inclusive, but who, in the privacy of the booth, tick the box of our own self-interest. Rewind 24 hours and it felt so different. Thursday morning was lovely in London, full of the promise of spring. Even the spat I had with the man outside my polling station shouting at “fucking immigrants” didn’t disrupt an overall feeling of optimism.

Were people walking just a little bit more purposefully? Was I mistaken in detecting some calm excitement, almost an unspoken communal bonhomie? Perhaps also a feeling of empowerment, a sense that it was “the people” that could now make a difference. But by bedtime the spell had been broken. Things were going to stay the same. No real difference had been made. The utterly miserable thought strikes me that Russell Brand just might have been right. What difference did my vote make? Why indeed do people vote, and care so passionately about voting, particularly in constituencies in which voting one way or the other won’t make a blind bit of difference? And why do the poor vote when, by voting, they merely give legitimacy to a system that connives with their oppression and alienation?

The anthropologist Mukulika Banerjee suggests a fascinating answer: elections are like religious rituals, often devoid of rational purpose or efficacy for the individual participant, but full of symbolic meaning. They are the nearest thing the secular has to the sacred, presenting a moment of empowerment. But is this empowerment illusory? Is, as Banerjee asks, “the ability to vote … a necessary safety valve which allows for the airing of popular disaffection, but which nevertheless ultimately restores the status quo. In such a reading, elections require the complicity of all participants in a deliberate mis-recognition of the emptiness of its procedures and the lack of any significant changes which this ritual brings about, but are a necessary charade to mollify a restless electorate.”

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The numbers are insane and growing. This may well make the country ungovernable.

Petrobras: The Betrayal of Brazil (Bloomberg)

Since March 2014, prosecutors have accused more than 110 people of corruption, money laundering, and other financial crimes. Six construction and engineering firms have been accused of illegal enrichment in what is known as a noncriminal misconduct action. On April 22, Moro delivered the first convictions. He found Costa and Youssef guilty of money laundering, including the Land Rover purchase. Moro gave both men reduced sentences two years house arrest for Costa and three years in prison for Youssef for cooperating with prosecutors. All of that is something of a preview of the big show: Prosecutors say they may accuse some of Brazil s largest builders with running an illegal cartel.

It’s been clearly proven in this case that there was a criminal scheme inside Petrobras that involved a cartel, bid rigging, bribes to government officials and politicians, and money laundering, Moro wrote in sentencing Costa and Youssef. There will be a cartel indictment, says Carlos Lima, a lead prosecutor in the case. I do’ t like to get ahead of myself and say this will happen, but it will. It’s just a matter of time. In filings in Judge Moro’s court, prosecutors have named 16 companies that allegedly formed a cartel to fix Petrobras contracts between 2006 and 2014. The list includes some of Brazil s largest construction and engineering firms, including Camargo Correa, OAS, UTC Engenharia, and the biggest of them all, Construtora Norberto Odebrecht. All of these companies deny being part of a cartel, except Camargo Correa, which declined to comment.

Petrobras says it knew nothing about the bid rigging and is collaborating with authorities in the investigation. As to whether it was the victim of a cartel, the company is certain, Mario Jorge Silva, Petrobras’s executive manager for performance, said at an April 22 news conference. In financial filings, Petrobras says 199.6 billion reais worth of contracts were rigged by the alleged cartel. For years, a co-owner of the engineering firm UTC called members to meetings at his offices in Sao Paulo via text messages, according to testimony and documents submitted in Moro’s court. The participants were greeted by an assistant, who handed out name tags. At the meetings, executives took copious notes detailing how the alleged cartel would divvy up Petrobras contracts, at inflated prices. One builder put together a 2 1/2-page encoded guide for group members that describes contract bidding as a soccer tournament, with leagues and teams.

Another document drawn up by a group member lists the chosen winners of upcoming bidding for 14 contracts for a refinery, with the title Fluminense Final Bingo Proposal, using a nickname for the state of Rio de Janeiro. Prosecutors say the builders got away with it by paying kickbacks, usually 3%, on every contract. Petrobras estimates that the graft added up to at least 6.2 billion reais, much of which, prosecutors say, was funneled into the war chests of the parties that backed Luiz In·cio Lula da Silva, president of the country from 2003 to 2010, and his handpicked successor, Dilma Rousseff. Lula and Rousseff haven t been charged with wrongdoing, but special prosecutors have opened criminal investigations into more than 50 members of congress and other politicians implicated in the corruption scheme.

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“..in all these years, Hillary Clinton has not publicly condemned Wall Street or any individual Wall Street leader.”

The Clintons and Their Banker Friends- The Wall Street Connection (Nomi Prins)

The past, especially the political past, doesn’t just provide clues to the present. In the realm of the presidency and Wall Street, it provides an ongoing pathway for political-financial relationships and policies that remain a threat to the American economy going forward. When Hillary Clinton video-announced her bid for the Oval Office, she claimed she wanted to be a “champion” for the American people. Since then, she has attempted to recast herself as a populist and distance herself from some of the policies of her husband. But Bill Clinton did not become president without sharing the friendships, associations, and ideologies of the elite banking sect, nor will Hillary Clinton. Such relationships run too deep and are too longstanding.

To grasp the dangers that the Big Six banks (JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, Goldman Sachs, and Morgan Stanley) presently pose to the financial stability of our nation and the world, you need to understand their history in Washington, starting with the Clinton years of the 1990s. Alliances established then (not exclusively with Democrats, since bankers are bipartisan by nature) enabled these firms to become as politically powerful as they are today and to exert that power over an unprecedented amount of capital. Rest assured of one thing: their past and present CEOs will prove as critical in backing a Hillary Clinton presidency as they were in enabling her husband’s years in office.

In return, today’s titans of finance and their hordes of lobbyists, more than half of whom held prior positions in the government, exact certain requirements from Washington. They need to know that a safety net or bailout will always be available in times of emergency and that the regulatory road will be open to whatever practices they deem most profitable. Whatever her populist pitch may be in the 2016 campaign – and she will have one – note that, in all these years, Hillary Clinton has not publicly condemned Wall Street or any individual Wall Street leader. Though she may, in the heat of that campaign, raise the bad-apples or bad-situation explanation for Wall Street’s role in the financial crisis of 2007-2008, rest assured that she will not point fingers at her friends.

She will not chastise the people that pay her hundreds of thousands of dollars a pop to speak or the ones that have long shared the social circles in which she and her husband move. She is an undeniable component of the Clinton political-financial legacy that came to national fruition more than 23 years ago, which is why looking back at the history of the first Clinton presidency is likely to tell you so much about the shape and character of the possible second one.

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Deepening.

Germany Spies, US Denies (Bloomberg)

Reports of German spying on European corporate targets at the behest of the U.S. have led to calls that Chancellor Angela Merkel was hypocritical for complaining about U.S. spying on Germany. Well, yes — but the hypocrisy of politicians hardly comes as a shock. What’s more striking about the recent revelations is their targets – and what they say about U.S. government claims that it doesn’t spy on behalf of private U.S. corporations. Start with a rather obvious question: Why would the U.S. government rely on Germany to spy on European corporations? Why not just do the spying directly? It’s not as if the U.S. lacks the intelligence capacity to do it. After all, the U.S. spied directly on Merkel in the episode that made her object so strongly and publicly and hypocritically.

It’s hard to know for sure, and the answer may conceivably lie in complex interstate agreements that aren’t public. But there’s a highly plausible alternative answer, one connected to the recent history of U.S. efforts to vilify Chinese government’s industrial espionage. The U.S. may be using Germany to do industrial spying because it wants to claim that, unlike other countries, the U.S. doesn’t do spying on behalf of its corporations. In August 2013, a National Security Agency spokesman told the Washington Post in an e-mail that the Department of Defense “does ***not*** engage in economic espionage in any domain, including cyber.” In case you’re wondering, the six asterisks appeared in the original e-mail. Notice that the NSA statement didn’t say that other agencies avoid economic espionage, just those that are part of the Department of Defense.

Notice, too, that the statement didn’t say that no one shares stolen information with the U.S. The next month, after a fresh round of Edward Snowden revelations, the director of national intelligence, James Clapper, issued a further statement. He acknowledged that “the Intelligence Community” (his capitalization) “collects information about economic and financial matters.” But he insisted that: “What we do not do … is use our foreign intelligence capabilities to steal the trade secrets of foreign companies on behalf of – or give intelligence we collect to – U.S. companies to enhance their international competitiveness or increase their bottom line.” A close, retrospective reading of this statement reveals it to be completely consistent with the U.S. relying on foreign intelligence organizations, such as the Germans, to spy on private targets – and then share the proceeds with American companies for whatever reason.

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All globalization does.

Trans-Pacific Partnership Will Lead To A Global Race To The Bottom (Guardian)

At a time when economic inequality around the globe continues to widen, the Trans-Pacific Partnership (TPP) will only make things worse. Unlike what President Obama claims, the agreement will only encourage a race to the bottom, in which a small percentage of people get ridiculously rich while most workers around the globe stay miserably poor. We can’t let that happen. Today, President Obama is visiting Nike’s headquarters in Beaverton, Oregon to garner support for the trade deal, which would be signed by the US and 11 Pacific Rim countries. That’s an apt place for Obama to beat the free-trade drum – Nike, like the TPP, is associated with offshoring American jobs, widening the income inequality gap, and increasing the number of people making slave wages overseas.

Since the passage of NAFTA in 1993, we’ve seen the loss of nearly five million US manufacturing jobs, the closure of more than 57,000 factories, and stagnant wages. This deal won’t be any different. In November, Zachary Senn, a college student reporter at the Modesto Bee, spent three weeks in Indonesia living with and interviewing workers who make goods for Nike, Adidas, Puma and Converse. When you hear Obama talking about those “high-quality jobs,” think of RM, a 32-year-old mother who told Senn that she works 55 hours, six days a week and makes just $184 a month after 12 years at the PT Nikomas factory, a Nike subcontractor that employs 25,000 people. That’s 83 cents an hour or $2,208 a year. RM works in the sewing department and is expected to process 100 shoes an hour.

“If we don’t meet our quotas, we get yelled at”, she told Senn. “And then the quotas are piled into the next day”. Eating lunch is difficult because the food “smells bad,” and worse yet, RM said there is only one restroom, with 15 stalls, for 850 women. RM told Senn that she doesn’t want Nike to leave Indonesia; she wants an end to verbal abuse and a 50% raise, which would allow her to better provide for her family. Is $368 a month too much to ask from a multinational corporation that posted $27.8 billion in revenue and spent $3 billion on advertising and promotions in fiscal 2014? Nike CEO Mark Parker was paid $14.7 million in compensation last year. That’s $7,656 an hour. Wages in Vietnam, a key TPP partner, are even lower than Indonesia. Nike’s largest production center is in Vietnam where 330,000 mostly young women workers with no legal rights earn just 48 to 69 cents an hour.

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6 weeks old, but too good to leave behind.

Is There Such A Thing As A Skyscraper Curse? (Economist, March 28)

The world is in the middle of a skyscraper boom. Last year nearly 100 buildings over 200 metres tall were built—more than ever before. This year China’s business capital will welcome the Shanghai Tower, which will be the world’s second-tallest building. Saudi Arabia is building Kingdom Tower, which will be the world’s tallest (and twice the height of One World Trade Centre in New York, the tallest building in the Americas). Does this frenzy of building augur badly for the world economy? Various academics and pundits, many of them cited by The Economist, have long argued as much, but new research casts doubt on it.

In 1999 Andrew Lawrence, then of Dresdner Kleinwort Benson, an investment bank, identified what came to be known as the “skyscraper curse”.* Mr Lawrence noticed a curious correlation between the construction of the world’s tallest buildings and economic crises. The unveiling of the Singer Building and the Metropolitan Life Tower in New York, in 1908 and 1909 respectively, roughly coincided with the financial panic of 1907 and subsequent recession. The Empire State Building opened its doors in 1931, as the Great Depression was getting going (it was soon dubbed the “Empty State Building”). Malaysia’s Petronas Towers became the world’s tallest building in 1996, just before the Asian financial crisis. Dubai’s Burj Khalifa, currently the world’s tallest building, opened in 2010 in the middle of a local and global crash.

Skyscrapers can be hugely profitable, since by building upwards developers can rent out more floor space on a given plot of land. But at some point extra storeys are no longer a good deal, since marginal costs—for more lifts and extra steel to stop the building from swaying in the wind, for example—increase faster than marginal revenues (rents or sales). William Clark and John Kingston, an economist and an architect writing in 1930, found that the profit-maximising height for a skyscraper in midtown New York in the 1920s was no more than 63 storeys. (The ideal height is probably not much different today.) Record-breaking skyscrapers could therefore be seen as an indication that gung-ho investors are overestimating the probable future returns from new construction.

Indeed, developers may be building record-breaking towers even though they know they are economically inefficient. There is, after all, a certain cachet to having a very tall building with your name on it. In 1998 Donald Trump, a magnate, presented a plan to build the world’s tallest residential building in New York as the righting of a historical wrong, not a shrewd business move. “I’ve always thought that New York should have the tallest building in the world,” he proclaimed. If such vanity projects can secure funding, the theory goes, financial markets must be out of control and will soon suffer a sharp correction. Mr Trump’s tower opened just as the dotcom bubble was bursting.

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And London, New York etc. Real estate is a great way to launder cash.

Global Crime Syndicates Are Buying Expensive Australia Real Estate (Domain)

Some of Australia’s most expensive real estate is being bought by global crime syndicates, one of the country’s top crime-fighting bodies says. So worried are they about the influx of dirty money that the Australian Crime Commission has launched an investigation looking at money laundering and terrorism financing through property. Concerns that criminals may be targeting real estate were raised within the commission about six months ago, according to an ACC spokeswoman. The Targeting Criminal Wealth Special Investigation is expected to run until June next year. “Taskforce investigations have uncovered information about organised crime entities investing in high-value commodities, such as real estate, to help launder illicit funds into the legitimate economy,” said ACC chief executive Chris Dawson, APM.

“The Australian real estate sector is perceived as stable and at low risk of significant depreciation in the short term, and potential for growth in the long term. It is likely that organised crime are exploiting these conditions to invest in the Australian real estate market to launder the proceeds of illicit activity including drug profits.” The ACC declined to specify countries of concern because the investigation is ongoing. Parliamentary secretary to the Treasurer Kelly O’Dwyer said the federal government was being forced to play catch-up on the issue because there had been no co-ordinated data matching scheme on property records to date. The recently announced data-matching scheme set to start from December 1 as part of the federal government’s crackdown on foreign investment would be a big help to agencies like the ACC in these investigations, Ms O’Dwyer said.

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Brilliant.

Australian PM Adviser Exposes Cimate Change As Hoax, Shames All of Science (SBS)

Business Adviser Maurice Newman has been praised today for his stellar work uncovering that climate change was a hoax perpetrated by the United Nations and the vast majority of the entire scientific community from all around the world. Newman, who also managed to expose the New World Order as something that actually exists and isn’t just made up by conspiracy theorising weirdos, has been widely praised for his efforts in bringing down what is thought to be the most elaborate conspiracy of all time. “Of course he will be in consideration for the Nobel Prize,” said one science observer. “To completely humiliate the vast majority of the scientific community like this on such a huge issue is almost unprecedented.

“In years to come we’ll say Maurice Newman in the same breath as we say Albert Einstein and Isaac Newton. To think, thousands of scientists and millions upon millions of dollars of resources couldn’t uncover this conspiracy but one guy with no expertise managed to bring it all down on a lark.” The world’s scientists have reacted with abject shame at being found out after all this time. “I always knew we’d be found out,” said one scientist. “It’s only so long you can keep something like this up when you have to independently incorporate every person studying climate, sea levels, soil, and thousands of other aspects. The paper trail alone was incredibly obvious. Not to mention our connection with the United Nations meaning we had to have every nation on board with tricking Australia for some reason.

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