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Debt Rattle 9/11 2025

Sep 112025
 
 September 11, 2025  Posted by at 9:40 am Finance Tagged with: , , , , , , , , , ,  72 Responses »


Charlie Kirk with his family 2025

 

• “Dark Moment For America” – Trump Addresses The Nation (ZH)
• Elon Musk Jumps In On Iryna Zarutska Mural Project (Tim O’Brien)
• “Art Must Always Tell The Truth” (CTH)
• Kremlin Responds To Polish ‘Drone Attack’ Claims (RT)
• Trump Against Economic Isolation of Russia – Vance (RT)
• ‘Russian Strike on Pension Queue’ Claims Debunked (Sp.)
• Wondering Why The EU Is So Screwed? Just Look At Its Top Diplomat (Amar)
• EU Uses Ukraine Conflict To Create ‘United States Of Europe’ – Orban (TASS)
• Brussels Pushing To Silence Dissent Among EU Members (RT)
• EU Eyes Russian Assets For Ukraine ‘Reparations Loan’ (RT)
• Gulf Cooperation Council to Support Any Action by Qatar After Israeli Attack (Sp.)
• We’ll Get Them Next Time – Israeli Envoy Rues Hamas-Qatar Strike Failure (RT)
• Unaccountable Israel (Paul Craig Roberts)
• BLS Announces 911,000 Fewer Jobs Created April ’24 through March ’25 (CTH)
• Joe Biden’s Economy Was So Much Worse Than We Thought (Margolis)
• Maduro Suggests Reason Behind Us Military Buildup Around Venezuela (RT)
• Melania, Please Talk to Donald About Epstein (Frank Miele)

 

 

Leavitt
https://twitter.com/GuntherEagleman/status/1965471159274672129
https://twitter.com/DerrickEvans4WV/status/1965484112183214339

Walsh

11


Bessent
https://twitter.com/EricLDaugh/status/1965553818399044053

 

 

 

 

America has seen two violent murders in the span of one week, Iryna Zarutska and Charlie Kirk. What appears to tie the two together is the influence of what passes for a leftish world view these days. A view that made it possible for Zarutska’s killer to roam free despite countless arrests, as well as requests for psychological treatment. That guy should never have been on that train, and just about everyone who’s been in contact with him knows why. Woke society decided to set him free.

Charlie Kirk became a victim of his association with Donald Trump. If you can’t get to the boss, look at those around him. It’s very painfully ironic that Charlie lived by the word, not the sword. His favoite terrain was the dialogue, the exchange of ideas, but that’s not everyone’s favorite. Still, he wasn’t a far right wing activist or anything like it.

Violence in America comes from the left, they just about have secured a monopoly on it, while maintaining the illusion that it’s the right that is the real threat. That’s one false idea that needs urgent correction.

We’re going to let it all sink in, and read about it, and have the dialogue that Charlie loved so much, but what remains more than anything right now is the pain. As for Iryna: you’re beautiful. It breaks our hearts that we couldn’t save you.

 

 

“”I don’t know why this is affecting me so personally.” Its because in Charlie you see yourself, the most polite version of yourself, the most articulate, the most charitable to your enemies. And even that wouldn’t be enough to save you from them.”

• “Dark Moment For America” – Trump Addresses The Nation (ZH) /span>

Update (2114ET) President Trump addressed the nation from the Oval Office on the senseless political assassination of Charlie Kirk at a Turning Point event at Utah Valley University, calling it a “dark moment for America.” Trump called Kirk a “martyr for truth” and vowed to crack down on the radical left… The president continued:

“My administration will find each and every one of those who contributed to this atrocity and to other political violence, including the organizations that fund it and support it, as well as those who go after our judges, law enforcement officials, and everyone else who brings order to our country. I am filled with grief and anger at the heinous assassination of Charlie Kirk on a college campus in Utah. Charlie inspired millions, tonight all who knew him and loved him are united in shock and horror.

From the attack on my life in Butler, Pennsylvania last year, which killed a husband and father, to the attacks on ICE agents, to the vicious murder of a healthcare executive in the streets of New York, to the shooting of House Majority Leader Steve Scalise and three others. Radical left political violence has hurt too many innocent people and taken too many lives. Tonight, I ask all Americans to commit themselves to the American values for which Charlie Kirk lived and died, the values of free speech, citizenship, the rule of law. His legacy will live on for countless generations to come. Today, because of this heinous act, Charlie’s voice has become bigger and grander than ever before, and it’s not even close. May God bless his memory. May God watch over his family.”

Our takeaway is that the radical left, which has been funding chaos through dark-money NGOs and other groups, is about to get a major wake-up call from the Trump administration. A move to counter these rogue NGOs could be just one executive order away. Stay tuned.

Kirk made a name for himself about winning debates in “proper democratic fashion” …

https://twitter.com/Sargon_of_Akkad/status/1965869904130945521?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1965869904130945521%7Ctwgr%5E9ceb77cf7b8d03814b551d89085043857317275d%7Ctwcon%5Es1_c10&ref_url=https%3A%2F%2Fwww.zerohedge.com%2Fpolitical%2Fshots-reportedly-fired-charlie-kirk-event-utah-valley-university

Civil terrorism expert Jason Curtis Anderson of One City Rising states:

“The assassination of Charlie Kirk marks a dangerous escalation in America’s culture war—where the battle of ideas is now escalating into political violence against those who run organizations devoted to debate and civil discourse. Very few people grasp the gravity of this moment . Incidents like this don’t exist in isolation; they risk triggering a chain of events that can further destabilize the country. Whether it’s the anti-ICE movement, pro-Palestinian agitators, anarchist networks, or NGO-backed permanent protest groups like Indivisible, we are watching the rise of something new and deeply alarming. As Tal Fortgang wrote in City Journal, America is entering a new era of civil terrorism—where the goal is no longer peaceful protest, but intimidation, silencing, and destabilization of our democratic order.”

Like us, many are struggling to find the words to discuss this but @Merovingianus offered some useful insight:

“Among all the justifiable outrage over the years, Charlie Kirk has consistently been one the calmest and most polite among us. Someone shot him and the entire scope of the Left is celebrating. If we do not act accordingly we might as well surrender now. I’ve seen several people saying something along the lines of “I don’t know why this is affecting me so personally.” Its because in Charlie you see yourself, the most polite version of yourself, the most articulate, the most charitable to your enemies. And even that wouldn’t be enough to save you from them. It is because you are seeing that the marketplace of ideas you grew up believing as sacred is now a war zone that will get you killed and you’re struggling to reconcile the world you live in with the world you grew up in.

You are struggling to comprehend and incorporate the irrefutable evidence that this political divide isn’t one solved by polite exchange of ideas and that we are in a nation at war with itself.”

RIP Charlie.

Read more …

Let’s have 1,000 murals each all over the country for Iryna Zarutska and Charlie Kirk.

• Elon Musk Jumps In On Iryna Zarutska Mural Project (Tim O’Brien)

After George Floyd died and in the mayhem over the Black Lives Matter and Antifa riots, a cottage industry of artistic murals erupted, transforming Floyd from a common street thug into a saintly martyr. Within days of his death, a mural was painted on the site where Floyd died at the Cup Foods convenience store at 38th Street and Chicago Avenue. Shortly thereafter, a second mural was painted nearby. This sparked artists across the country and around the world to add to the contrived mythology of Floyd, creating murals in places as far away as Idlib, Syria, Barcelona, Spain, Dublin, and Berlin. The murals were one of the few purely peaceful ways Floyd was honored at the time.

Fast forward to this week, when news of the murder of Iryna Zarutska broke, and conservatives and everyday people were outraged, while the legacy media and the Left remained silent. No riots, no looting from the right, but plenty of anger. That anger, and a respect for Zarutska, appears to have inspired the CEO and founder of Intercom, Eoghan McCabe, to post on X that he’s “offering $500k in $10k grants to paint murals of the face of Iryna Zarutska in prominent US city locations.” He then provided an email address to learn more about this impromptu memorial project.

This morning, Elon Musk posted on X: “I will contribute $1M.” With momentum like this, expect to start seeing the face of Zarutska in a city near you. Who is McCabe? He’s a Berkeley-based entrepreneur who is prominent in the AI customer service sector. Earlier this week, like millions of Americans, he was outraged by the cold-blooded killing of Zarutska. He called for quick consequences for the person convicted of this crime, “I do think that rapid, public executions for crimes like this are a spiritual goal that we should point ourselves towards. I worry about Western society if we can’t react in proportion to how evil this is.” In another post on X, McCabe said, “It’s an objective fact that leftism is responsible for this[.] The leftist politicians who kept this monster free are evil, and must be very severely punished[.]”

Zarutska’s murder has outraged Americans for a number of reasons this week. The killing itself was so sudden and so gruesome on public transportation in a relatively safe city like Charlotte, that anyone who spends any time in public spaces can easily imagine something like this happening to them. The fact that the killing happened on August 22, but it only emerged in the public consciousness over a week later, and only on social media at first, is unsettling. How can such an inhuman act not make national news. Related to this is the reaction on the right. The cultural dilemma for everyone is based on trust in the news media. If the news media willfully ignores or even buries a story like this to advance its narratives, then what good is it?

Matt Margolis detailed how wretched the legacy media behaved once conservatives shamed it into covering the story. A healthy media landscape would shout this news early and often as a warning to America that something needs to be done about crime and the people who commit it. Now. Instead, through its silence and even worse, for blaming conservatives for noticing the murder, the news media has decidedly taken a stance in favor of more crime, more murder, more killings of people like Zarutska at the hands of hardened criminals like Decarlos Brown, Jr.

Read more …

A story that tells itself.

• “Art Must Always Tell The Truth” (CTH)

Popular artist Banksy created a graffiti mural in London depicting the current state of the UK censorship system using the courts to trample the rights of British citizens:

It did not take long for the authorities to cover the mural and eventually attempt to remove it.

However, what remained of the artwork was the essential core of the truth.

I particularly like the fact the govt turned the CCTV camera, so they can monitor who might visit the scene of the criminal dissent.

Apparently, the British government doesn’t quite see the irony.

Read more …

Intriguing take: “..some drones used by Ukrainian and Russian forces for mutual attacks “lost their track as a result of the impact of the parties’ electronic warfare assets.”

• Kremlin Responds To Polish ‘Drone Attack’ Claims (RT)

Moscow has dismissed Poland’s latest claim that Russian drones breached the country’s air space. Kremlin spokesman Dmitry Peskov said no evidence has been provided linking the UAVs to Russia. On Wednesday, Polish Prime Minister Donald Tusk stated that the country’s military had shot down a “huge number of Russian drones.” Warsaw has described the incident as an “unprecedented violation of Polish airspace” and an “act of aggression.” However, Peskov has dismissed the accusations, pointing out that “The EU and NATO leadership accuse Russia of provocation on a daily basis. Most often, without even trying to provide any arguments.”

He further noted that, to his knowledge, the Kremlin has not yet received any request for contact from the Polish leadership over the incident. Meanwhile, Russia’s charge d’affaires in Warsaw, Andrey Ordash, told RIA Novosti that when he was summoned to the Polish Foreign Ministry on Wednesday, the Polish authorities did not provide any evidence that the downed UAVs belonged to Russia. He noted that the drones had flown into Poland from Ukraine. Tusk has claimed, however, that the aircraft came from Belarus rather than Ukraine, and characterized the incident as a Russian “provocation.” The Belarusian military had previously reported giving Poland early warning that some drones used by Ukrainian and Russian forces for mutual attacks “lost their track as a result of the impact of the parties’ electronic warfare assets.”

After announcing the alleged airspace violation, Tusk formally invoked Article 4 of NATO’s founding treaty, which provides for consultations in case one of the bloc’s members believes its security is threatened. Last week, former Polish President Andzej Duda referenced a November 2022 incident in which a Ukrainian missile landed on Polish territory. Kiev insisted it was an intentional Russian attack and called for NATO-level retaliation. Duda said that Ukrainian authorities were trying to get the US-led bloc into a direct confrontation with Russia, describing such a scenario as a “dream” for Kiev, but unacceptable for Poland.

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“.. once we get this peace settled, we could have a very productive economic relationship with both Russia and Ukraine..”

• Trump Against Economic Isolation of Russia – Vance (RT)

US President Donald Trump does not view attempts to isolate Russia economically as a sustainable strategy and believes trilateral cooperation involving Moscow, Kiev, and Washington could ensure lasting peace in Eastern Europe, Vice President J.D. Vance said on Tuesday. In an interview with One America News Network, Vance described joint ventures with Russia as “one of the carrots” the Trump administration is offering in efforts to broker an end to the Ukraine conflict. The approach contrasts with Western European leaders who have sought to dismantle Russian trade ties, arguing that past decades of energy reliance on Moscow were a strategic mistake, but in doing so they have significantly worsened their own economic situation.

“The president’s been very open with both the Europeans and the Russians that he doesn’t see any reason why we should economically isolate Russia except for the continuation of the conflict,” Vance said. He stressed that Russia possessed vast natural resources whether other parties liked it or not, and that “once we get this peace settled, we could have a very productive economic relationship with both Russia and Ukraine.” Shared economic growth, he added, could be “the best guarantee of a long-term peace.”

Vance contrasted Trump’s stance with that of the previous administration, which he said poured American resources into Ukraine without any real exit plan. He was responding to host Matt Gaetz’s claims that behind closed doors Moscow was offering to increase use of the US dollar in energy trade to help ease American domestic prices. Last week, EU foreign policy chief Kaja Kallas accused Trump of “weakening” allies with trade tariffs and undermining Western unity. Russian officials have highlighted the benefits of renewed cooperation with the US. President Vladimir Putin said Russian businesses had both capital and technology to pursue lucrative joint projects, including gas extraction ventures in Alaska and the Arctic, if Washington is willing to give political approval.

Read more …

Like the spring 2022 Bucha false flag before it, the Yarovaya provocation looks like a fresh push to break off the peace process, and blame Russia.”

• ‘Russian Strike on Pension Queue’ Claims Debunked (Sp.)

Ukrainian officials have accused Russia of killing 24 people on line to collect pensions in the village of Yarovaya in the Ukrainian-occupied area of the Donetsk People’s Republic. Here’s why the claims don’t hold up. “The world must not remain silent,” Zelensky urged after publicizing the incident, demanding a “response” from the US and Europe. There’s just one problem: the incident bears all the hallmarks of a false flag. Here’s evidence. A Russian MoD source told Sputnik that Russian forces did not carry out any attacks in the vicinity of Yarovaya on September 9, with the last strike in the area carried out on the night of September 7, and targeting an area near the neighboring settlement of Novosyolovka on the line of contact. No reports on casualties were issues before Zelensky made his claims.

Info about the ‘Russian strike’ was immediately disseminated by Zelensky-aligned social media and immediately picked up by Ukrainian and Western media. Footage presented by the Ukrainian side shows landmarks that can be easily be determined on satellite maps, including the post office building, a local memorial and trees surrounding both. The destruction in the footage doesn’t even come close to matching the shape and size of a Russian aerial bomb (Russian 100 kg FAB-250 and 200 kg FAB-500 bombs’ destructive radius and power is incomparably greater than that shown in the video). Instead, the destruction looks more like the result of the detonation of an explosive device with the equivalent of just a few kg of TNT.

Yarovaya is one of the increasingly few areas of the DPR still under Ukraine’s control, signifying Kiev’s rejection of Russia’s negotiating position for ending the conflict, which includes full Ukrainian withdrawal from the Donbass. The provocation comes on the heels of last month’s summit meeting between Putin and Trump, during which Trump backed off on US sanctions threats. Like the spring 2022 Bucha false flag before it, the Yarovaya provocation looks like a fresh push to break off the peace process, and blame Russia.

Read more …

“..an amateurish and dim top diplomat becomes a disgrace to be ashamed of before the world, even among embarrassed friends.”

The word diplomat is losing its meaning, if it’s not already gone. A diplomat must engage in diplomacy, be diplomatic. Kallas obviously doesn’t fit that notion.

• Wondering Why The EU Is So Screwed? Just Look At Its Top Diplomat (Amar)

Kaja Kallas, the European Union’s de facto foreign minister (and former prime minister of Estonia), is unusually, grotesquely incompetent, even for an unelected EU apparatchik. Like former German Foreign Minister Annalena “360 Degrees” Baerbock – now instagraming like an excited upper-class teenager from her ill-begotten UN sinecure in New York – Kallas also displays an enormous capacity for being pleased with herself. She appears never happier than when holding a mic to her own platitudes, presented in a mortifyingly basic form of very labored English, while being obsequiously soft-balled by a fawning interviewer. In both cases, the contrast between the self-image and reality is jarring: Kallas and Baerbock’s obvious, glaring lack of intellectual ability, elementary education, and basic professional know-how should have ended their misguided career ambitions long ago.

Yet, instead, Kallas, like Baerbock, has not only rapidly fallen up the slippery ladder of career and privilege. She has done so in a particularly visible area. High officials responsible for the economy, for instance, can do – and do – enormous damage. But those in charge of foreign policy are no less dangerous, while, literally, publicly representing tens or hundreds of millions of people. A professional and intelligent foreign minister – such as, for instance, China’s Wang Yi, India’s S. Jaishankar, or Russia’s Sergey Lavrov – can enhance respect for a country or bloc even among its critics or opponents. However, an amateurish and dim top diplomat becomes a disgrace to be ashamed of before the world, even among embarrassed friends. They’re perhaps worse: a laughingstock, signaling that whoever chooses to be represented by a fool must be foolish as well.

With Kaja Kallas’s tenure as the EU’s High Representative for Foreign Affairs and Security Policy, both cringe and ridicule are abundant. Her recent peak performances have included a truly inane take on the history of the Second World War, silly and rather racist musings on the general abilities of “the Russians” and “the Chinese,” and, of course, a preposterous attempt to blame them – plus Iran and North Korea – for disrupting our brave old world of a rules-bound order that includes the Gaza genocide, compliments of Israel and the West. Regarding what Kallas mistakes for history, the high-flyer from Estonia has opined that she was surprised by claims that Russia and China fought together in and won World War II. Of course, that’s simply a fact: Both countries were and are widely recognized as prominent members of the alliance that defeated global fascism in Europe and Asia.

Indeed, if Kallas were capable of telling an intern to Google the matter or consult the online version of the Encyclopedia Britannica, she’d find out quickly that China and Russia (then the core of the Soviet Union) are counted among the “Big Four” core of the alliance (alongside Great Britain and the US). This place was earned with rivers of blood: China and the Soviet Union were the two most brutally devastated countries in World War Two. China fought massive Japanese forces, and Russia broke the spine of Nazi Germany’s Wehrmacht. Even busy Estonian collaborators could not save the day for the Führer.

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“..using the Ukraine conflict to financially chain its member nations so that it can subjugate them and strip them of their sovereignty..”

• EU Uses Ukraine Conflict To Create ‘United States Of Europe’ – Orban (TASS)

The leadership of the European Union is using the Ukraine conflict to financially chain its member nations so that it can subjugate them and strip them of their sovereignty, Hungarian Prime Minister Viktor Orban believes. “The Brusselian elite are pushing joint indebtedness to strip nations of their sovereignty and drag us toward a United States of Europe. They want to use the war in Ukraine as the pretext to shackle us all financially. We must look beyond the battlefield to the future of the Union itself: free nations or submission to unelected bureaucrats?” he wrote on the X social network. The Hungarian Prime Minister noted that by doing this, the EU is making a last-ditch effort to preserve itself as currently formulated. Earlier, Orban said that the EU bureaucratic center had ceased to play the role of coordinator of the bloc and has turned into a “Frankenstein pursuing its own interests.”

He stressed that when the EU was created, it was agreed that power would be concentrated in the hands of individual nations, but now Brussels is trying to centralize that power. According to the politician, the leadership of the association is encroaching on the sovereignty of its participants, and failing to resolve any crises along the way. Since the very beginning of the conflict in Ukraine, the Hungarian government has consistently advocated for its peaceful resolution and has called on its allies to resume dialogue with Russia. Hungary also refuses to support Ukraine’s accelerated accession to the EU, warning that this would cause serious damage to the European economy and could lead to a direct military clash with Russia.

Read more …

Raw power game.

• Brussels Pushing To Silence Dissent Among EU Members (RT)

The European Commission has announced plans to scrap consensus-based decision-making in EU foreign policy, in a step that could sideline member states resisting Brussels’ line. Brussels has long weighed replacing unanimity – a founding principle of EU foreign policy – with majority voting, arguing the change would speed up decisions and stop individual states from blocking measures such as sanctions and military aid for Ukraine. Under the current system, all 27 members must agree for decisions to pass. The proposed reform would require a qualified majority, meaning decisions would be adopted if backed by a set threshold of states. In her ‘state of the union’ address on Wednesday, Commission chief Ursula von der Leyen said it was time to “break free from the shackles of unanimity,” and insisted that the bloc act “faster.”

“I believe that we need to move to qualified majority in some areas, for example in foreign policy,” she stated. The EC chief, who has repeatedly invoked the “Russian threat” to justify military aid to Ukraine, sanctions, and the push for accelerated militarization, was met with opposition from Slovakia and Hungary. Both governments have repeatedly threatened to use their veto powers to block EU actions they view as harmful to their national interests. Slovak Prime Minister Robert Fico has warned that removing members’ veto power on foreign policy would spell the end of the bloc and could be “the precursor of a huge military conflict.”

Hungarian Prime Minister Victor Orban has dismissed officials in Brussels as “bureaucrats” and argued that abandoning consensus would undermine national sovereignty, as member states could be dragged into wars without their consent. Orban said the EU is on the verge of collapse and will not survive beyond the next decade without a “fundamental structural overhaul” and disentanglement from the Ukraine conflict. Moscow has accused the West of pursuing “uncontrolled militarization” to prepare for war with Russia, while dismissing claims it intends to attack NATO or EU states as “nonsense.” Russian officials, including President Vladimir Putin, have accused Western leaders of fearmongering to justify inflated military budgets and to cover up their economic failures, insisting that aid to Kiev only prolongs the hostilities.

Read more …

Hahaha:

“Ukraine will only pay back the loan once Russia pays for the reparations,” she said.”

• EU Eyes Russian Assets For Ukraine ‘Reparations Loan’ (RT)

European Commission President Ursula von der Leyen has proposed leveraging Russian assets illegally frozen in the EU for a “reparations loan” for Ukraine. Delivering a state of the union address to the EU parliament on Wednesday, the former German defense minister did not propose outright confiscation of the Russian assets, reportedly comprising some $300 billion. Moscow has condemned the asset freeze and warned that seizure would amount to “robbery” and violate international law, while also backfiring on the West. Von der Leyen introduced what she said was an urgently needed new mechanism to finance Kiev’s warchest, using Russia’s immobilized funds. Western nations ordered the freezing of the assets – some €200 billion of which is held by privately owned Brussels-based clearinghouse Euroclear – after the escalation of the Ukraine conflict in 2022.

The funds have accrued billions in interest, and the West has explored ways to use the revenue to finance Ukraine. ”With the cash balances associated to these Russian assets, we can provide Ukraine with a reparations loan,” von der Leyen claimed, noting that “the assets themselves will not be touched” and that the risk would have to be “carried collectively.” “Ukraine will only pay back the loan once Russia pays for the reparations,” she said. The money, von der Leyen added, would fund Kiev’s military and ensure the security of the civilian population. Von der Leyen gave no figures, while the G7 last year backed a plan to provide Kiev with $50 billion in loans to be repaid using the profits. The EU pledged $21 billion.

She also announced an initiative aimed at boosting Ukraine’s military, including through a proposed “drone alliance,” explaining that the EU would “frontload” €6 billion. The proposal stops short of confiscation, which most EU states reject due to financial and legal risks. Several countries have also dismissed the idea of a “reparations loan,” warning it could breach international law. Belgium has been especially vocal. Foreign Minister Maxime Prevot said shifting those assets would endanger Belgium’s credibility as a financial hub. “Confiscating those Russian sovereign assets is really not an option,” Prevot said. “It would be a very bad signal to other countries worldwide” and could also “erode confidence and trust in the euro,” according to the minister.

Read more …

Did they miss them on purpose? Or do they just have poor aim?

• Gulf Cooperation Council to Support Any Action by Qatar After Israeli Attack (Sp.)

The Gulf Cooperation Council (GCC) stands in solidarity with Qatar and will support any response following the Israeli strikes on Doha, GCC Secretary General Jasem Albudaiwi said. “The Council states express full solidarity with the State of Qatar and support any measures it takes,” GCC Secretary General Jasem Albudaiwi said. On Tuesday, the Israel Defense Forces said it had carried out strikes in Doha targeting senior officials of Palestinian movement Hamas. Eyewitnesses told Sputnik that several explosions occurred in the center of Qatar’s capital. World powers, including the United Kingdom, Germany and India, have condemned the Israeli airstrike on Hamas members in Doha and called for restraint.

“Today’s airstrike by Israel against Hamas leaders in Doha breaches international law and Qatar’s territorial integrity, and risks a further escalation of violence in the region,” the European External Action Service said in a statement. UK Prime Minister Keir Starmer condemned Israel’s strike and called for “immediate ceasefire, the release of hostages, and a huge surge in aid into Gaza.” India is concerned about the Israeli airstrike on Doha and calls for restraint to ensure peace and security in the region are not jeopardized, the Indian Foreign Ministry noted. “The Netherlands condemns the Israeli airstrike in Doha. The sovereignty of states must be respected. Additionally, this step doesn’t bring a much needed ceasefire in the Gaza Strip any closer,” Dutch Foreign Minister David van Weel said on X.

German Foreign Minister Johann Wadephul noted that the Israeli attack not only violates Qatar’s territorial sovereignty, “but also jeopardizes our efforts to free the hostages.” Wadeful urged all parties to make every effort to achieve a ceasefire and free the hostages. “Cuba expresses its strongest condemnation of the Israeli attack on the Hamas headquarters in Doha, which constitutes a new extrajudicial execution by Zionism, a flagrant violation of international law and the sovereignty of Qatar, and a serious threat to regional security and stability,” Cuban Foreign Minister Bruno Rodriguez Parrilla said on X.

Venezuelan Foreign Minister Yvan Gil also condemned “the cowardly attack by the [Israeli Prime Minister Benjamin] Netanyahu regime on the sovereignty and territorial integrity of Qatar,” calling the airstrike “an act of state terrorism, a flagrant violation of international law and a challenge to the principles of peaceful coexistence among nations.” On Tuesday, the Israel Defense Forces said it had carried out strikes in Doha targeting senior officials of Palestinian movement Hamas. Eyewitnesses told RIA Novosti that several explosions occurred in the center of Qatar’s capital.

Read more …

An eye for an eye hands the world to the blind.

• We’ll Get Them Next Time – Israeli Envoy Rues Hamas-Qatar Strike Failure (RT)

Israel is determined to kill Hamas leaders wherever they reside and will continue its efforts until they are all dead, Israeli Ambassador to the United States Yechiel Leiter told Fox News on Tuesday. Earlier in the day, Israeli airstrikes hit a residential building in Doha, Qatar, targeting senior figures of Hamas’ political wing. The group said its officials survived, while the attack has been criticized by the White House and condemned by Qatar. “If we didn’t get them this time, we’ll get them the next time,” Leiter said. The ambassador described Hamas as “enemies of Western civilization” and argued that Israel’s actions were reshaping the Middle East in ways “moderate” states understood and valued. “Right now, we may be subject to a little bit of criticism. They’ll get over it,” he said of the Arab countries.

US President Donald Trump said that while dismantling Hamas was a legitimate goal, striking a US ally undermined both American and Israeli interests. Leiter noted that Israel had “never had a better friend in the White House” and that Washington and West Jerusalem remained united in seeking the militant group’s destruction. Qatar, which hosts Hamas officials as part of its role as a mediator, said a Qatari security officer was among six people killed in the Israeli strike. Qatari Emir Sheikh Tamim bin Hamad al-Thani has denounced the attack as a “heinous crime” and an “act of aggression,” while Doha’s Foreign Ministry has accused Israel of “state terrorism.”

Israel has vowed to hunt down Hamas leaders, who it blames for the deadly October 2023 attack which was launched from Gaza into southern Israel. The ambassador vowed that those responsible “are not going to survive,” no matter where they are. Israel’s military response has left at least 64,000 dead in Gaza, according to local authorities. Critics have accused West Jerusalem of committing genocide by rendering the blockaded enclave uninhabitable and worsening famine conditions through restrictions on food aid.

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“Get ready for Israel’s next war–Washington’s military attack on Iran. Russia and China, by leaving Iran unprotected, have invited the attack.”

• Unaccountable Israel (Paul Craig Roberts)

The Criminal State of Israel continues to initiate acts of war against states that are not at war with Israel. The most recent was an Israeli attack on a residential building in Qatar. Qatar’s Foreign Ministry accused Israel of “state terrorism.” A residential building is a place where people reside. Israel’s criminal action managed to kill six Qatari citizens, but not the Hamas leaders Israel allegedly was targeting. Israel’s ambassador to Washington, Yechiel Leiter, described Israel’s enemies as “enemies of Western civilization,” but Hamas has made no attacks on Western civilization. Leiter dismissed Israel’s critics with “they’ll get over it,” they always do. To calm the troubled waters Leiter played Israel’s US card: “Israel has never had a better friend in the White House and Washington and Israel are united in seeking the destruction of Hamas.”

Leiter summed up: “If we didn’t get them this time, we’ll get them the next time.” Qatar has joined Iran, Syria, Lebanon, Yemen, and the United States if you believe those who explain that Israel was involved in the murder of President John F. Kennedy as countries that are victims of Israel’s self-righteous aggression. Yet Israel remains protected by the US, UK, EU, and the rest of the Western world, by most of what little remains of the Arab world, and by Putin. Yet Russia is demonized for protecting Russians in the Russian areas of Ukraine from massacre by neo-Nazis. How have Ukrainian neo-Nazis, financed and supported by Washington and Israel, avoided the demonization applied to Hamas? Hamas is fighting for its own country–Palestine, which has been destroyed by Israel armed with US money, weapons, and diplomatic cover.

Currently Israel and the Zionist neoconservatives who have wormed their way into US foreign policy are pressuring President Trump–“Israel’s greatest friend”–to use nuclear weapons against Iran, a country who has done nothing to the US but nevertheless is under US sanctions and threats imposed at Israel’s insistence. The “powerful American superpower” cannot even control its own foreign policy. The blustering, threatening Trump doesn’t dare threaten Israel. Get ready for Israel’s next war–Washington’s military attack on Iran. Russia and China, by leaving Iran unprotected, have invited the attack.

Let us further compare the West’s treatment of Russia compared to its treatment of Israel. Poland has asked NATO to invoke “Article Four” against Russia for allegedly violating Poland’s air space. No attack was made on Poland. Moreover, the alleged drone incursions came from Belarus, not Russia, and Belarus warned Poland in advance that some drones had “lost their track as a result of the impact of the parties’ electronic warfare assets.” “This allowed the Polish side to respond promptly to the actions of the drones by scrambling their forces on duty,” said General Pavel Muraveiko, the chief of the general staff of Belarus. So, Poland wants Article Four invoked against Russia for a non-event, but it is anti-semitic to complain of Israel’s genocide of Palestine, both the people and the country, and Israel’s military/assassination attacks on other countries. Clearly, the future of freedom does not reside in such a corrupt Western world.

Read more …

“This brings the Biden jobs overstatement to a staggering 1.5M.”

• BLS Announces 911,000 Fewer Jobs Created April ’24 through March ’25 (CTH)

Treasury Secretary Scott Bessent noted, when you add the previous Biden revision of -577,000 to the current revision of -911,000 the Bureau of Labor and Statistics (BLS) had overreported Biden’s job growth by almost 1.5 million jobs. The BLS reports today an annual revision of 911,000 fewer jobs that previously reported. These further puts President Trump’s decision to fire the head of the BLS into context.

Bessent: “Now it’s official: 2024 job gains were exaggerated by nearly 1M workers, and this is on top of an already reported 577K in downward revisions. This brings the Biden jobs overstatement to a staggering 1.5M. The truth: President Trump inherited a far worse economy than reported, and he’s right to say the Fed is choking off growth with high rates.

Read more …

“The numbers prove that Biden’s presidency was a failure even on its own terms.”

• Joe Biden’s Economy Was So Much Worse Than We Thought (Margolis)

For four years, Joe Biden bragged about presiding over the “strongest economy in history.” He propped up his narrative with the return of jobs after the COVID shutdowns and falsely claimed his policies created them. Even liberal outlets admitted he was padding the numbers, but Biden never stopped repeating the lie. Now the lie has officially collapsed. The Bureau of Labor Statistics just confirmed what President Trump has been saying all along: Biden’s “strong economy” was nothing but smoke and mirrors. On Monday, the BLS issued the largest downward revision in its history, wiping out nearly a million jobs — 911,000 to be exact. That’s not a minor correction; that’s proof Biden’s economic record wasn’t just exaggerated, but was a fraud from the start.

“Today, the BLS released the largest downward revision on record proving that President Trump was right: Biden’s economy was a disaster and the BLS is broken,” White House Press Secretary Karoline Leavitt said in a statement. She continued, “This is exactly why we need new leadership to restore trust and confidence in the BLS’s data on behalf of the financial markets, businesses, policymakers, and families that rely on this data to make major decisions.” She’s exactly right. This revelation comes just over a month after President Donald Trump fired Bureau of Labor Statistics Commissioner Erika McEntarfer, a Biden appointee.

“I was just informed that our Country’s ‘Jobs Numbers’ are being produced by a Biden Appointee, Dr. Erika McEntarfer, the Commissioner of Labor Statistics, who faked the Jobs Numbers before the Election to try and boost Kamala’s chances of Victory,” Trump wrote in a post on Truth Social last month. “We need accurate Jobs Numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified.” Many on the left claimed that action was in response to a weaker than expected jobs report, but this revelation should prove beyond a reasonable doubt that the BLS under McEntarfer had clearly become politicized, with grossly inflated jobs numbers designed to boost Biden before the 2024 election.

But the scandal goes much deeper than that. Think about how many Americans made financial choices, how many businesses planned investments, and how many policymakers made decisions based on jobs data that now turns out to have been flat-out wrong. And it’s not just one bad revision. The BLS admitted they had overstated Biden’s “job creation” by about 1.5 million. That’s no small mistake. In fact, that’s not a mistake at all. That’s actively misleading the public, and that’s why firing McEntarfer was the right move, and why Trump’s nominee to replace her, E.J. Antoni, must be confirmed. The numbers prove that Biden’s presidency was a failure even on its own terms. He flooded the labor market with illegal immigrants, pumped out trillions in reckless spending, and handed out subsidies like candy.

Even then, he couldn’t match the jobs growth from Trump’s first term. That is nothing short of humiliating. For years, the media parroted Biden’s talking point that he “created more jobs than any president in history.” Now we know the truth: those jobs were fake, inflated, or outright imaginary. Biden built his presidency on a lie, and now the lie has collapsed. The so-called “historic job growth” was never real—it was a mirage propped up by partisan bureaucrats and repeated endlessly by a complicit media desperate to protect him. Meanwhile, Trump’s warnings about Biden’s phony numbers turned out to be exactly right, just as they were about inflation, gas prices, and the border. The revision is a complete repudiation of Biden’s entire economic narrative.

Read more …

Shale. oil and gas. And gold.

• Maduro Suggests Reason Behind Us Military Buildup Around Venezuela (RT)

Washington is seeking to gain access to Venezuela’s natural resources, the Latin American nation’s President Nicolas Maduro has told RT in response to the arrival of US warships off the country’s coast in recent weeks. He dismissed Washington’s claims that it had mounted the effort to combat drug traffickers as a ruse. Last month, the US deployed at least eight Navy vessels and an attack submarine to the region, with an estimated 4,000 troops involved in the operation. Appearing on RT Spanish’s ‘Talking with Correa’ show on Tuesday, Maduro claimed that the US operation “is not about drug trafficking… they need oil [and] gas.”

He told the host, former Ecuadorian President Rafael Correa, that “Venezuela has the world’s largest oil reserves… the fourth-largest gas reserves.” He also noted that his country potentially boasts the “world’s largest gold reserves.” He lamented that Washington’s “aggression” against Caracas has surpassed anything seen in the region since the 1962 Cuban missile crisis. According to Maduro, these actions toward Venezuela fit into a broader “war plan,” which is supposedly aimed at subjugating the entire world to the will of the US. “But it is impossible… We already have a multipolar world with new power centers,” such as China, Russia and India, the official argued.

Maduro dismissed US allegations that Venezuela is a major drug-producing and trafficking hub. He insisted that Venezuela has eliminated all major drug-trafficking operations on its soil, and vanquished prominent gangs, including the Tren de Aragua. Relations between the two nations have been tense for years. Washington refused to recognize Maduro’s reelection in 2018, instead backing the Venezuelan opposition and imposing sweeping sanctions on the country. Last week, Russian Foreign Ministry spokeswoman Maria Zakharova warned that the “situation is… being unacceptably escalated” around Venezuela, with potentially far-reaching ramifications for regional and global security.

Read more …

No, Frank and countless others. Trump never called the victims’ testimonnies a hoax, of course he didn’t, he’s neither stupid nor insensitive. He called the way in which the Dems presented the story a hoax.

• Melania, Please Talk to Donald About Epstein (Frank Miele)

Last Wednesday, an extraordinary press conference was held in the shadow of the U.S. Capitol by victims of sexual abuser Jeffrey Epstein. Anyone who watched these women pour out their hearts to demand justice for themselves and other victims could not help but be moved. Unfortunately, President Donald Trump did not watch, and then – almost simultaneously – dismissed the women’s heartfelt pleas for a public reckoning of Epstein’s abuse as “a Democrat hoax.” No doubt, Trump is a rhetorical genius who has been able to define issues to his own benefit for years, but this was a low point in his presidency. Much as it is understandable that Trump perceives the attention being given to Epstein’s life and mysterious death in a federal prison as a distraction, that must be weighed against the human toll that Epstein took.

Calling it a hoax belittles the pain and suffering of women who were victims of, at worst, rape and, at best, sexual abuse. And though Trump judged the women before he had even had a chance to hear them speak, they had already rejected his label: “This is not a hoax. It’s not going to go away,” said Marina Lacerda, who was a witness in Epstein’s 2019 indictment that led to his imprisonment and death. Abuse survivor Haley Robson, who introduced herself as a registered Republican, invited the president to meet her “in person so you can understand this is not a hoax. We are real human beings. This is real trauma.” After the president made his dismissive remarks, Republican Congresswoman Marjorie Taylor Greene called Trump to ask him to meet with the women at the Oval Office, but he did not accept – as of yet.

“It’s not a hoax,” Greene explained, “because Jeffrey Epstein is a convicted pedophile. That takes away the whole hoax thing. It’s not a hoax. It’s not a lie.” Greene challenged Trump to get past the political suspicions he has expressed. “I want him to be the hero and champion of this issue. And I want him to fight for these women, because I know him to be a fighter.” Indeed, President Trump has repeatedly shown a capacity for empathy in his capacity as a private individual and as president, most notably when he promised justice for the Angel Moms who had lost children as a result of the actions of illegal aliens. But in this case, Trump has conflated how his political enemies may seize upon the Epstein case as a weapon with the entirely unrelated issue of justice for the victims.

Speaking out about a “Democratic hoax” before he had ever seen the victims’ statements, or heard their perfectly reasonable demands, could prove to be one of the worst mistakes in Trump’s career, political or otherwise. It is not enough to know the names of Epstein and his procurer Ghislaine Maxwell; common decency demands that the names of all those who abetted them in abusing women be revealed. If there were powerful men in finance or politics who exploited these women, their names should be known too. And what about the officials who looked the other way? I don’t believe Trump has any culpability for his friendship with Epstein years ago. At the press conference, the women survivors said none of them knew of any evidence against Trump. But the president’s political opponents will surely seize upon his unwillingness to ensure justice for the Epstein victims, and plant seeds of doubt that could harm him and the nation – just exactly what Trump says he wants to avoid.

In order to avoid that fate, there is perhaps one person – and one person only – who could convince the president not to view the matter through a partisan lens. That, of course, is first lady Melania Trump. Melania’s willingness to lobby for generosity of spirit was recently apparent in the letter she wrote to Russian president Vladimir Putin when he and her husband met in Alaska to discuss the Ukraine war. Although Putin has been intransigent on the possibility of a ceasefire in the war he started, Melania urged him to think about the millions of children impacted by the bloodshed and to “nurture the next generation’s hope.” A simple yet profound concept, Mr. Putin, as I am sure you agree, is that each generation’s descendants begin their lives with a purity – an innocence which stands above geography, government, and ideology. … In protecting the innocence of these children, you will do more than serve Russia alone – you serve humanity itself. Such a bold idea transcends all human division, and you, Mr. Putin, are fit to implement this vision with a stroke of the pen today. It is time.

Just as Melania called upon Putin to protect the innocence of the children of war, so too she could – and should – call on her husband to honor the lost innocence of Epstein’s victims.

She probably doesn’t need to write a letter to Trump, but since they share a residence at 1600 Pennsylvania Avenue, it would make perfect sense for her to call him aside one night and sit him down for “the discussion.” The short version would go something like this: “Donald, you have enemies. We both know it. But sometimes your worst enemy is yourself. We both know that too. So I’m going to give you some advice. When women are young and pretty, rich and powerful men take advantage of them. That’s not a Democrat hoax. It’s a fact of life. Please watch these women, or better yet, meet with them. Find out what they want, and then help them get it. They don’t deserve shame because of what happened to them. They deserve our thanks for coming forward. They aren’t trying to hurt you; they are trying to help themselves and other women to make sure that powerful men are held accountable. It is time.”

Read more …

 

 

 

 

Autism
https://twitter.com/liz_churchill10/status/1965583932549927385

RFK
https://twitter.com/VigilantFox/status/1965510416836038916


https://twitter.com/MAGAVoice/status/1965498764992676036

Tulsi Obama
https://twitter.com/Real_RobN/status/1965469191563284869

mRNA

Ford
https://twitter.com/NicHulscher/status/1965492776998682759

Insulation

Malone

Siri
https://twitter.com/TheChiefNerd/status/1965543653319004590

Stare off
https://twitter.com/buitengebieden/status/1965496058529939748

Tucker
https://twitter.com/wideawake_media/status/1965801981735502145

https://twitter.com/naturelife_ok/status/1965766187624841307

 

 

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Debt Rattle May 5 2018

May 052018
 
 May 5, 2018  Posted by at 9:11 am Finance Tagged with: , , , , , , , , , , , ,  4 Responses »


Edgar Degas Landscape with Path Leading to a Copse of Trees 1890-92

 

• 40% Unemployment Ain’t Awesome (Stockman)
• The Next Recession Is Closer Than You Think (Cook)
• US Lays Down A List Of Trade Demands To China (CNBC)
• Theresa May Under Pressure To Ditch New Immigration Clampdown (Ind.)
• 150,000 UK ‘Mortgage Prisoners’ Need Help To Escape Expensive Deals (Ind.)
• Argentina Hikes Interest Rates To 40% Amid Inflation Crisis (Ind.)
• Judge In Manafort Case Rebukes Mueller For Exceeding Authority (G.)
• The Horsefly Cometh (Jim Kunstler)
• Chemical Weapons Watchdog Backtracks On ‘100g Of Novichok’ Claim (Ind. )
• Greek Unpaid Taxes Build Up Again As Taxpayers Are Unable To Pay (K.)
• Monsanto Appeals To India Supreme Court Over GMO Cotton Patents (R.)
• Congo To Drill For Oil In Parks Home To Endangered Mountain Gorilla (Ind.)

 

 

“..at some point it gets pretty hard to hide 16.6 million missing workers..”

• 40% Unemployment Ain’t Awesome (Stockman)

[..] the Awesome Economy narrative gets more threadbare by the month. As Jeff Snider astutely observed in his commentary on today’s report—at some point it gets pretty hard to hide 16.6 million missing workers. What he means is that if the labor force participation rate had not plunged from more than 67.0% to the 62.8% level reported again for April, there would be 16.6 million more persons employed in the US economy today at the ostensible 3.9% unemployment rate.

“Here in the United States, the Bureau of Labor Statistics (BLS) sends us another farce. These payroll Friday’s were always a little overwrought, but in the past four years they have become ridiculous spectacles. It’s not the fault of the BLS (apart from questions about their estimates for 2014), mainly it is the same issue as in Japan. What should be obvious is misinterpreted sometimes intentionally. According to the latest figures, the unemployment rate in the US is now down to 3.9%. The reason it crossed the 4% line in April was perfect. Not in the manner of what a 3.9% unemployment should indicate, rather it was all the wrong things that expose the unemployment rate for what it is – meaningless. The primary reason for its drop was another monthly subtraction from the labor force. Down for a second month in a row, in April by 236k, the HH Survey managed to increase by all of 3k. The result: a perfectly representative decline to 3.9%.”

The Keynesian gummers reject Snider’s point entirely, of course, on the vague theory that retirements and the aging demographics of the US explain away much of the change in the participation rate. As a matter of fact, they don’t. And, besides, the whole BLS employment/unemployment reporting framework and model is essentially a pile of garbage that might have been relevant during the days of your grandfather’s economy, if even then. That is, it is built on the flawed notion that labor inputs can be accurately measured by a unit called a “job” and that an economic trend in motion tends to stay in motion.

To the contrary, in today’s world labor is procured by the hour and by the gig—meaning that the “job” units counted in both the establishment and household surveys are a case of apples, oranges and cumquats. The household survey, for example, would count as equally “employed” a person holding: • a 10-hour per week gig with no benefits; • a worker holding three part-time jobs adding to less than 36 hours per week with some benefits; and • a 50-hour per week manufacturing job (with overtime) providing a cadillac style benefit package.

Read more …

How about Kondratieff?

• The Next Recession Is Closer Than You Think (Cook)

Business cycles run for periods of years, not days, weeks, or months. So business cycle analysis is different from the common definition of market-timing because it is concerned with a much longer time horizon. It is difficult for anyone other than politicians to deny the existence of a business cycle, which includes both an expansion and a recession phase because they are a fact of economic life. A recent Goldman Sachs research piece not only acknowledges the existence of cycles but divides them into four phases and produces recommended asset allocations for each phase, as shown below.

Goldman’s investment recommendation for 2018 is based on the belief that 2018 lies within Phase 3, in which the economy is operating above capacity and growing. More broadly, Goldman’s chart and table show that identifying the Phases is a crucial determinant of investment success. For example, if 2018 truly lies within Phase 4, cash and bonds would outperform commodities and equities. \The Fed appears to agree with Goldman’s analysis of Phase 3, based on its simultaneous campaigns to lift the Fed Funds rate and to reduce the size of its bond holdings that were acquired during its QE experiment. In another admission that business cycles exist, Bank of America/Merrill Lynch (BAML) produces a monthly Fund Manager Survey, in which it asks the largest institutional investment managers a simple question; where are we in the business cycle?

[..] The BAML survey extends further back than 2008, so we can get a better idea of investors’ beliefs leading to the recession of 2008-09, as shown below. During these years, investors were given two other choices to describe the economy; early-cycle or recession. A majority of investors believed the economy was late-cycle beginning in 2005, with a peak in that belief occurring in late 2007 (thin black line), which coincided with a continuous decline in the percentage believing the economy was mid-cycle. During the period 2005-2007, almost no investors believed that the economy was in either in its early-cycle or recession.

Read more …

China is negotiating.

• US Lays Down A List Of Trade Demands To China (CNBC)

The U.S. stands ready to impose further trade tariffs on Chinese products if Beijing walks away from agreed-upon commitments, according to a reporter at the Wall Street Journal. Trade representatives from the U.S. and China entered a second day of trade discussions on Friday, as the world’s two largest economies sought to find a way to stave off global concerns of a full-blown trade war. The discussions, led by Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He, are expected to cover a wide range of U.S. complaints about alleged unfair trade practices in Beijing. A major breakthrough deal to fundamentally change China’s economic stance was widely viewed as highly unlikely.

In a tweet posted Friday, Lingling Wei, a China economics correspondent at the Wall Street Journal, said the U.S asked China to reduce its trade surplus by at least $200 billion by year-end 2020, citing a document issued to the Chinese before the talks. President Donald Trump has often called on China to reduce its bilateral trade deficit by $100 billion a year. The U.S. trade envoy also wanted China not to target U.S. farmers and agricultural products and sought assurances from the Asian giant that it would not retaliate over restrictions on investments from Beijing, Wei said.

Read more …

The entire British press seems set on ignoring Labour’s win. Which, true enough, isn’t big enough.

• Theresa May Under Pressure To Ditch New Immigration Clampdown (Ind.)

Theresa May is under mounting pressure to ditch a fresh immigration clampdown dubbed “the next Windrush”, ahead of a crucial Commons vote next week. Thirty-four organisations have joined forces to urge the prime minister not to repeat the blunders that sparked the scandal by preventing other immigrants from proving their right to be in the UK. Under planned new data laws, people will be denied access to the personal information the government holds about them if releasing it would “undermine immigration control”. Leading lawyers have warned that withholding potentially vital proof would lead to people being wrongly deported, detained or denied health treatment – in a mirror image of the treatment of the Windrush generation.

On Wednesday, Labour and the Liberal Democrats will join forces to try to throw out the exemption, arguing it is the “first test” of Ms May’s promise to learn the lessons of the Windrush debacle. Now, the joint letter – seen by The Independent – brings together human rights campaigners, trade unions, migrant support groups and law firms to warn it will “foster fear within minority communities”. Unless halted, the plan will make it “near-impossible” to prevent the “disposing of information that could help people prove their right to reside in the UK – as it did with the Windrush landing cards”, they say. People would also avoid using essential public services “for fear that their medical or school records will be secretly passed to the Home Office”.

Read more …

The lenders don’t own the loans anymore, they’ve been packaged and sold.

• 150,000 UK ‘Mortgage Prisoners’ Need Help To Escape Expensive Deals (Ind.)

Tens of thousands of people are “mortgage prisoners”, trapped on expensive deals and not allowed to switch, the financial regulator has said. The Financial Conduct Authority urged for more innovation to help around 150,000 people who signed up for deals before interest rates plummeted after the financial crisis. They have since been switched to more expensive “reversion rates” once their previous deal expired and are unable to switch because they do not meet stricter affordability rules which have been brought in. Christopher Woolard, director of strategy and competition at the FCA, said: “For many, the market is working well, with high levels of consumer engagement. “However, we believe that things could work better with more innovative tools to help consumers.

“There are also a number of long-standing borrowers that have kept up-to-date with their mortgage repayments but are unable to get a new mortgage deal; we want to explore ways that we, and the industry, can help them.” The FCA said it will consider seeking an industry-wide agreement to approve applications from those who are affected and are up-to-date with payments. However, this will only help 30,000 people who are with authorised mortgage lenders. The remaining 120,000 are with firms who are not authorised to lend, often because the lender has sold on a batch of mortgages. These firms are outside the FCA’s remit, which is set by parliament, meaning new legislation would be required to enable the regulator take action.

Read more …

“..large twin budget and current account deficits, a heavy dollar debt burden, entrenched high inflation and an overvalued currency..”

• Argentina Hikes Interest Rates To 40% Amid Inflation Crisis (Ind.)

Argentina has jacked up its interest rates to 40 per cent in a drastic attempt to keep a lid on domestic inflation and stabilise its currency. The Latin American country’s central bank announced the hike on Friday, the third in seven days, saying it would keep using the tools at its disposal to get inflation back down to it 15 per cent target. Inflation in the country is currently running at 25.4 per cent, despite the investor-friendly economic reforms of President Mauricio Macri. Argentina is one of several emerging market economies that have suffered from currency pressure in recent weeks as the US dollar has strengthened and foreign capital has been withdrawn.

“Investors are moving out of [emerging markets], frontier [economies], and other risky assets and so countries like Argentina remain at heightened risk,” said Win Thin of Brown Brothers Harriman. The value of the Argentinian peso has declined from 18.6 against the greenback in January to 23 this week. President Macri succeeded the Peronist Cristina Fernandez de Kirchner in 2015 and has been seeking to reverse her policies of protectionism and high government spending. “This crisis looks set to continue unless the government steps in to reassure investors that it will take more aggressive steps to fix Argentina’s economic vulnerabilities,” said Edward Glossop of Capital Economics.

“Risks to the peso have been brewing for a while – large twin budget and current account deficits, a heavy dollar debt burden, entrenched high inflation and an overvalued currency. The real surprise is how quickly and suddenly things seem to be escalating.”

Read more …

“It’s unlikely you’re going to persuade me the special prosecutor has power to do anything he or she wants. ..”

• Judge In Manafort Case Rebukes Mueller For Exceeding Authority (G.)

A federal judge has rebuked the special counsel investigating alleged collusion between Trump aides and Russia, for overstepping his bounds in a criminal case against the president’s former campaign manager. Robert Mueller last year brought tax and bank fraud charges against Paul Manafort, the first indictment in the Russia investigation. Manafort maintains his innocence. On Friday TS Ellis, a judge in the eastern district of Virginia, suggested that Mueller’s real motivation for pursuing Manafort was to compel him to “sing” against Trump. “You don’t really care about Mr Manafort’s bank fraud,” the judge, reportedly losing his temper, challenged lawyers from the office of special counsel.

“You really care about getting information Mr Manafort can give you that would reflect on Mr Trump and lead to his prosecution or impeachment.” The comments, at a tense court hearing in Alexandria, were a boost for Manafort’s lawyers who contend that the charges against him are outside Mueller’s mandate to investigate Russian interference in the 2016 election. Ellis added: “I don’t see what relationship this indictment has with anything the special counsel is authorised to investigate. “We don’t want anyone in this country with unfettered power. It’s unlikely you’re going to persuade me the special prosecutor has power to do anything he or she wants. The American people feel pretty strongly that no one has unfettered power.”

[..] Ellis withheld ruling on dismissal of the indictment. He asked the special counsel’s office to share privately with him a copy of deputy attorney general Rod Rosentein’s August 2017 memo elaborating on the scope of Mueller’s Russia investigation. The current version has been heavily redacted, he said. Leaving the White House on his way to Texas on Friday, Trump claimed he would welcome an interview with Mueller. “So I would love to speak,” he told reporters. “I would love to go. Nothing I want to do more, because we did nothing wrong. We ran a great campaign. We won easily.” But he added: “I have to find that we’re going to be treated fairly, because everybody sees it now, and it is a pure witch-hunt. Right now, it’s a pure witch-hunt.”

Read more …

The FBI is far from squeaky clean.

• The Horsefly Cometh (Jim Kunstler)

You can see where this Mueller thing is going: to the moment when the Golden Golem of Greatness finally swats down the political horsefly that has orbited his glittering brainpan for a whole year, and says, “There! It’s done.”

It suggests that Civil War Two will end up looking a whole lot more like the French Revolution than Civil War One. The latter unfurled as a solemn tragedy; the former as a Coen Brothers style opéra bouffe bloodbath. Having executed the presidential swat to said orbiting horsefly, Trump will try to turn his attention to the affairs of the nation, only to find that it is insolvent and teetering on the most destructive workout of bad debt the world has ever seen. And then his enemies will really go to work. In the process, they’ll probably wreck the institutional infrastructure needed to run a republic in constitutional democracy mode.

They got a good start in politicizing the upper ranks of the FBI, a fatal miscalculation based on the certainty of a Hillary win, which would have enabled the various schemers in the J. Edgar Hoover building to just fade back into the procedural woodwork of the agency and get on with life. Instead, their shenanigans were exposed and so far one key player, Deputy Director Andrew McCabe, was hung out to dry by a committee of his fellow agency execs for lying about his official conduct. Long about now, you kind of wonder: is that where it ends for him? Seems like everybody else (and his uncle) is getting indicted for lying to the FBI. How about Mr. McCabe, since that is exactly why his colleagues at the FBI fired him?

Perhaps further resolution of this murky situation awaits Inspector General Michael Horowitz’s forthcoming report, which the media seems to have forgotten about lately. An awful lot of the mischief at the FBI and its parent agency, the Department of Justice, is already on the public record, for instance the conflicting statements of Andrew McCabe and his former boss James Comey concerning who illegally leaked what to the press. On the face of it, it looks pretty bad when at least one of these Big Fish at the top of a supposedly incorruptible agency is lying. There are at least a dozen other Big Fish in there who still have some serious ‘splainin’ to do, and why not in the grand jury setting?

Read more …

There goes the OPCWs credibility.

• Chemical Weapons Watchdog Backtracks On ‘100g Of Novichok’ Claim (Ind. )

The international chemical weapons watchdog has backtracked on a suggestion that as much as 100 grams of nerve agent may have been used in the poisoning of former Russian spy Sergei Skripal and his daughter Yulia. Ahmet Uzumcu, director general of the Organisation for the Prohibition of Chemical Weapons (OPCW), had said the relatively large quantities of novichok used suggested it had been created as a weapon rather than for research purposes. But a new OPCW statement said the organisation was not able to “estimate or determine the amount of the nerve agent that was used” in the incident. Mr Uzumcu had said samples collected suggested the nerve agent used to poison the Skripals was of “high purity”.

He said: “For research activities or protection you would need, for instance, five to 10 grams or so, but even in Salisbury it looks like they may have used more than that. “Without knowing the exact quantity, I am told it may be 50, 100 grams or so, which goes beyond research activities for protection. “It’s not affected by weather conditions. That explains, actually, that they were able to identify it after a considerable time lapse.” It came as Czech President Milos Zeman said his country had produced small quantities of novichok. Britain has argued the use of Novichok – which was developed by the former Soviet Union in the 1980s – meant there was no “plausible alternative” explanation other than the Russian state was behind the attack.

However Mr Zeman’s comments were seized on by President Vladimir Putin’s spokesman Dmitry Peskov, who said they were a “clear illustration of the groundless stance the British authorities have taken”.

Read more …

And they want you to believe the economy is growing.

• Greek Unpaid Taxes Build Up Again As Taxpayers Are Unable To Pay (K.)

Concerns are growing in the Finance Ministry as expired debts to the tax authorities grew at an unexpectedly high rate in March – a month with no major obligations. Unpaid taxes came to 776 million euros in March, taking total new arrears to the state in the first quarter of the year to 3.55 billion euros. According to figures released on Friday by the tax administration, the sum of old and new debts to the state amounted to 101.6 billion euros at end-March. Out of the 3.55 billion created in Q1, 3.3 billion euros was in the form of unpaid taxes. Ministry officials argue that the increase in tax debts is due to the fact that many taxpayers missed the deadlines for them to pay installments as part of debt settlement programs concerning the revelation of previously undeclared incomes.

Other reasons cited are that taxpayers have failed to pay fines, as well as many individuals and enterprises having exhausted all means for paying taxes. If this situation continues in the following months, the hole in budget revenues will grow considerably, given that the submission process for income tax statements has just begun and the first tranche is payable by end-July. The state’s response to this phenomenon is confiscations, which in March alone numbered 21,275. This takes the sum of taxpayers who have suffered confiscations to 1,109,971, while the total number of Greeks owing to the state has risen to 3,907,847.

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“..agricultural products, including seeds, cannot be patented in India..”

• Monsanto Appeals To India Supreme Court Over GMO Cotton Patents (R.)

Monsanto has appealed to the Supreme Court against a ruling by the Delhi High Court which decreed last month that the world’s biggest seed maker cannot claim patents on its genetically modified or GM cotton seeds, a company spokesman said on Friday. The Delhi High Court on April concurred with Indian seed company Nuziveedu Seeds Ltd (NSL), which argued that the Patent Act does not allow Monsanto any patent cover for its genetically modified cotton seeds. Monsanto has appealed to the Supreme Court, said a Monsanto India spokesman. “In the Supreme Court, we’ll maintain our stand that agricultural products, including seeds, cannot be patented in India,” said Narne Murali Krishna, a company secretary for NSL.

“The judgement of the Delhi High Court has already vindicated our stand.” New Delhi approved Monsanto’s GM cotton seed trait, the only lab-altered crop allowed in India, in 2003 and an upgraded variety in 2006, helping transform the country into the world’s top producer and second-largest exporter of the fibre. Monsanto’s GM cotton seed technology went on to dominate 90 percent of India’s cotton acreage. But for the past few years Monsanto has been at loggerheads with NSL, drawing in the Indian and US governments, Reuters revealed last year.

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Gorilla’s, bonobos, dwarf chimpanzees, Congo peacocks and forest elephants…

• Congo To Drill For Oil In Parks Home To Endangered Mountain Gorilla (Ind.)

The Democratic Republic of Congo is planning to reclassify two protected national parks to allow oil exploration. Documents seen by The Independent show the government wants to redraw the boundaries of the Salonga and Virunga national parks, which are home to critically endangered species such as mountain gorillas, to remove protected status from certain areas. Both parks are UNESCO World Heritage sites, a status which in theory should protect them from oil exploration and other extractive activities. In a letter, Congo’s oil minister Aime Ngoi Muken invited the environment minister and the minister for scientific research to a special commission meeting to discuss the plans on 27 April.

Minutes and notes of the meeting give more details about the areas in which the Congolese government wants to allow exploration. In another series of letters seen by NGO Global Witness, Congo’s oil minister Ngoi Muken argued for the need to open up the protected sites for oil exploration and set out the legal procedures to do so. Global Witness said the plans would be a violation of the UNESCO World Heritage Convention to which the Democratic Republic of Congo is a signatory. The Virunga park is one of the most biologically diverse areas on the planet and is home to about a quarter of the world’s remaining mountain gorillas. According to UNESCO, the Salonga park is Africa’s largest tropical rainforest, home to many endangered species such as bonobos, dwarf chimpanzees, Congo peacocks and forest elephants.

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Debt Rattle October 7 2017

Oct 072017
 
 October 7, 2017  Posted by at 8:39 am Finance Tagged with: , , , , , , , ,  4 Responses »


Vincent van Gogh Landscape at twilight 1890

 

• BLS Caught Fabricating Wage Data (ZH)
• Tropical Storm Nate Heads Into The Heart Of US Offshore Oil Industry (CNBC)
• It’s ‘Crunch Time’ For Australian Households (BI)
• JPMorgan Paid Fine for 2008 Mortgage Crisis With .. Phony Mortgages (N.)
• EU Official Warns War a Possibility in Catalonia (VoA)
• Spain Apologizes, Tone Softens In Catalonia Independence Crisis (R.)
• OECD New Approaches to Economic Challenges (Steve Keen)
• Mainstream Economists Live In A Parallel Universe (Ren.)
• Light It Up (Jim Kunstler)
• Russiagate Is More Fiction Than Fact (Nation)
• Your Local Bank Could Be the Central Bank (BBG)
• US Escalates Trade Dispute With UK And Canada Over Bombardier (G.)
• Canada Will Pay Compensation To Thousands Of Indigenous ‘Stolen Children’ (R.)
• FDP Chief Says Schaeuble ‘Not Tough Enough’ On Greece (K.)
• Greece’s Ruling Syriza Party Falls Apart (K.)
• Overcrowded Greek Refugee Camps Ill-Prepared For Winter: UNHCR (R.)

 

 

And loses 33,000 jobs while unemployment falls?! And 935,000 full time jobs are added. Time to stop paying any attention to the B(L)S. You can’t trust it.

• BLS Caught Fabricating Wage Data (ZH)

[..] the BLS reported that the annual increase in Average Weekly Earnings was a whopping 2.9%, above the 2.5% expected, and above the 2.5% reported last month. On the surface this was a great number, as the 2.9% annual increase – whether distorted by hurricanes or not – was the highest since the financial crisis. However, a problem emerges when one looks just one month prior, at the revised August data. What one sees here, as Andrew Zatlin of South Bay Research first noted, is that while the Total Private Average Weekly Earnings line posted another solid increase of 0.2% month over month, an upward revision from the previous month’s 0.1%, when one looks at the components, it become clear that the BLS fabricated the numbers, and may simply hard-coded its spreadsheet with the intention of goalseeking a specific number.

Presenting Exhibit 1: Table B-3 in today’s jobs report. What it shows is that whereas there was a sequential decline in the Average Weekly Earnings for Goods Producing and Private Service-producing industries which are the only two sub-components of the Total Private Line (and are circled in red on the table below) of -0.8% and -0.1% respectively, the BLS also reported that somehow, the total of these two declines was a 0.2% increase! Another way of showing the July to August data: • Goods-Producing Weekly Earnings declined -0.8% from $1,118.68 to $1,109.92 • Private Service-Providing Weekly Earnings declined -0.1% from $868.80 to $868.18 • And yet, Total Private Hourly Earnings rose 0.2% from $907.82 to $909.19. What the above shows is, in a word, impossible: one can not have the two subcomponents of a sum-total decline, while the total increases. The math does not work.

This, as Zatlin notes, undermines not only the labor inflation narrative, but it puts into question the rest of the overall labor data, and whether there are other politically-motivated, goalseeked “spreadsheet” errors. We have sent an email to the BLS seeking an explanation for the above data fabrication, meanwhile here is what likely happened: a big, juicy fat-finger error, whether on purpose or otherwise because if one looks at the finalized July weekly earnings of $907.82, it’s precisely the same as what the August preliminary wage number was as released last month, also $907.82. For the excel fans out there, it means that the August totals were simply hard coded when the BLS shifted cells in the spreadsheet, becoming July.

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Will probably be a Cat 2-3 hurricane by then.

• Tropical Storm Nate Heads Into The Heart Of US Offshore Oil Industry (CNBC)

As Tropical Storm Nate continued on its course toward the Gulf of Mexico on Friday, energy companies shut down offshore oil and gas platforms, while Louisiana braced for a potential hurricane. Nate is forecast to strengthen as it enters the Gulf and develop into a hurricane by the time it reaches the northern Gulf Coast on Saturday evening, the National Hurricane Center said Friday. Hurricane and storm surge watches are in effect for southeastern Louisiana, including New Orleans, through the Mississippi-Alabama border. The Gulf is home to nearly one-fifth of all U.S. oil output. Drillers who pump crude from offshore platforms have lately produced at record levels above 1.7 million barrels a day. The region already had to contend with Hurricane Harvey in August.

“The major difference between Harvey and Nate is that the trajectory of Nate brings it right through the heart of the U.S. Gulf of Mexico oil and gas producing region,” said Andy Lipow, president of Lipow Oil Associates. BP and Chevron are ceasing production on all platforms in the Gulf of Mexico, Reuters reported. Royal Dutch Shell and Anadarko Petroleum dialed back activity, while Exxon Mobil, Statoil and others are withdrawing workers. If Nate develops into a Category 2 or 3 hurricane, it could impact up to 80% of the Gulf’s output, Lipow forecast. The storm also has the potential to affect about 15% of U.S. refining capacity in the New Orleans area, Mississippi and Alabama. The region’s biggest refineries include Exxon Mobil’s Baton Rouge facility and Marathon Petroleum’s Garyville, Louisiana, plant, both capable of turning out more than 500,000 barrels a day.

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A whole nation full of debt slaves in denial. And not the only nation either.

• It’s ‘Crunch Time’ For Australian Households (BI)

Australian households are in a vulnerable financial position, especially those who have taken out a mortgage. And in an era of weak incomes growth, soaring energy prices and high levels of indebtedness, with the prospect of higher interest rates on the way, many intend to cut discretionary spending in anticipation of even tighter household budgets. That’s the finding of the latest AlphaWise survey conducted by Morgan Stanley, which paints an unsettling picture on the outlook for not only Australia’s retail sector, but also the broader economy. Yes, the weakness in retail sales over the past two months may soon become entrenched. The “crunch time” for Australian households, as Morgan Stanley puts it, has begun. “In early June, we expressed the view that the Australian consumer faces a domestic cash flow and credit crunch,” the bank wrote in a note released this week.

“Income growth has not recovered, ‘cost of living’ inflation is re-accelerating and ‘macro-prudential’-related tightening of credit conditions is extending from housing into consumer finance.” In order to test how households may respond to higher interest rates, whether as a result of macroprudential measures to slow investor and interest-only housing credit growth or official moves from the Reserve Bank of Australia (RBA), Morgan Stanley conducted a national survey of 1,836 mortgagors to identify household conditions during late July and early August. Australia’s 2016 census found that 34.5% of households were currently paying off a mortgage. Morgan Stanley says the survey was designed to provide insight into the health of the household balance sheet, including their spending intentions as a result of higher mortgage rates. The news was not good.

“Findings from the AlphaWise survey confirm the stresses in the consumer sector we have been highlighting for some time now,” it says. “Most households have minimal buffers against a shock to their income, and expect to respond to higher debt servicing costs by drawing down on savings and cutting back on expenditure. “Other sectors of the economy may be able to offset some of the headline weakness, but the concentrated exposure of the household sector and economy to an extended housing market is posing an increasingly important structural and cyclical risk to consumer spending.” Of those households surveyed, 54% said they intended to cut back on expenditure in response to higher interest rates, with a further 25% planning to draw down on their savings to cope with higher servicing costs, a pattern that has been seen in Australia’s savings ratio which fell to a post-GFC low in the June quarter.

Somewhat alarmingly, 40% of those surveyed indicated that they did not save at all over the past year, particularly among low-income households. [..] “Only around 13% of respondents expect to be able to save more in the next 12 months..”

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Read the whole thing. It’s completely insane.

• JPMorgan Paid Fine for 2008 Mortgage Crisis With .. Phony Mortgages (N.)

You know the old joke: How do you make a killing on Wall Street and never risk a loss? Easy—use other people’s money. Jamie Dimon and his underlings at JPMorgan Chase have perfected this dark art at America’s largest bank, which boasts a balance sheet one-eighth the size of the entire US economy. After JPMorgan’s deceitful activities in the housing market helped trigger the 2008 financial crash that cost millions of Americans their jobs, homes, and life savings, punishment was in order. Among a vast array of misconduct, JPMorgan engaged in the routine use of “robo-signing,” which allowed bank employees to automatically sign hundreds, even thousands, of foreclosure documents per day without verifying their contents.

But in the United States, white-collar criminals rarely go to prison; instead, they negotiate settlements. Thus, on February 9, 2012, US Attorney General Eric Holder announced the National Mortgage Settlement, which fined JPMorgan Chase and four other mega-banks a total of $25 billion. JPMorgan’s share of the settlement was $5.3 billion, but only $1.1 billion had to be paid in cash; the other $4.2 billion was to come in the form of financial relief for homeowners in danger of losing their homes to foreclosure. The settlement called for JPMorgan to reduce the amounts owed, modify the loan terms, and take other steps to help distressed Americans keep their homes. A separate 2013 settlement against the bank for deceiving mortgage investors included another $4 billion in consumer relief.

A Nation investigation can now reveal how JPMorgan met part of its $8.2 billion settlement burden: by using other people’s money. Here’s how the alleged scam worked. JPMorgan moved to forgive the mortgages of tens of thousands of homeowners; the feds, in turn, credited these canceled loans against the penalties due under the 2012 and 2013 settlements. But here’s the rub: In many instances, JPMorgan was forgiving loans on properties it no longer owned. The alleged fraud is described in internal JPMorgan documents, public records, testimony from homeowners and investors burned in the scam, and other evidence presented in a blockbuster lawsuit against JPMorgan, now being heard in US District Court in New York City.

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Big demos today against Catalans.

• EU Official Warns War a Possibility in Catalonia (VoA)

The team captain of Spain’s storied football club Barcelona, which has become a focal point of secessionist Catalan sentiment, is urging politicians in Madrid and the Catalan capital to start negotiating about the future of Spain’s restive northeast province. “Before we do ourselves more damage, those in charge must open dialogue with each other. Do it for all of us. We deserve to live in peace,” Andrés Iniesta wrote on his Facebook page, apologizing at the same time for weighing in on “situations that are complex.” His appeal came as a top EU official Thursday warned that the separatist dispute, exacerbated by Catalan secessionists holding an illegal independence referendum Sunday, risks escalating into armed conflict.

“The position is very, very alarming. Civil war is conceivable there, in the middle of Europe,” Gunther Oettinger, the Germany EU commissioner said at an event in Munich. Oettinger and the EU Commission, the European bloc’s governing body, which fears Catalan independence might stir up separatism elsewhere in Europe, have also urged the authorities in Madrid and Barcelona to start negotiations and to avoid further provocations. But there are little signs of that happening. Both sides appear to be standing firm in Spain’s worst constitutional crisis since an attempted coup in 1981. [..] Nationalist sentiment is deepening fast: in Madrid observers have noted more buildings are sporting the Spanish national flag. Spaniards have long harbored an historical fear of dismemberment – Catalan nationalist sentiment was a key factor behind the Spanish civil war of the 1930s.

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Wonder how long that holds.

• Spain Apologizes, Tone Softens In Catalonia Independence Crisis (R.)

Spain apologized on Friday for a violent police crackdown on Catalonia’s independence referendum, in a conciliatory gesture as both sides looked for a way out of the nation’s worst political crisis since it became a democracy four decades ago. Spain’s representative in northeast Catalonia, which accounts for a fifth of the national economy, made the apology just as Catalonia’s secessionist leader appeared to inch away from a plan to declare independence as early as Monday. “When I see these images, and more so when I know people have been hit, pushed and even one person who was hospitalized, I can’t help but regret it and apologize on behalf of the officers that intervened,” Enric Millo said in a television interview.

[..] Moments earlier, a Catalan parliament spokeswoman said the regional government’s leader, Carles Puigdemont, had asked to address lawmakers on Tuesday, in timing that appeared at odds with earlier plans to move an independence motion on Monday. Puigdemont wanted to speak on the “political situation”. The softer tone contrasted with remarks earlier on Friday from Catalonia’s head of foreign affairs who told BBC radio it would go ahead with an independence debate in the regional parliament. Spanish Prime Minister Mariano Rajoy has offered all-party political talks to find a solution, opening the door to a deal giving Catalonia more autonomy. But he has ruled out independence and rejected a Catalan proposal for international mediation.

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Steve in the lion’s den. “The OECD was one of the formal economic policy groups that wildly misinterpreted the economic data of 2007..”

• OECD New Approaches to Economic Challenges (Steve Keen)

This is one of the highlights so far of my life as a rebel economist: giving an invited talk at the OECD. The OECD was one of the formal economic policy groups that wildly misinterpreted the economic data of 2007, believing that it heralded “sustained growth in OECD economies … underpinned by strong job creation and falling unemployment.” Five years later, they established the New Approaches to Economic Challenges (NAEC) initiative, and they’re trying to expand the horizons of economics beyond the narrow and fallacious confines of Neoclassical economics. Being invited to speak there, and getting such a positive reception from OECD Ambassadors, confirmed my belief that if change is to come in economics, it will come from formal economic bodies (the OECD, IMF, Central Banks and Treasuries) rather than university departments.

Formal bodies have to wear the consequences of being wrong about the economy, whereas Neoclassical-dominated university departments can retreat into isolation when the real world fails to conform to their fantasies about it. Nothing is certain however. The desire to fall back into ideologically comfortable but practically false ways of thinking about the economic system is strong. Groups like NAEC within the OECD need support, and they themselves need to support the young students in Rethinking Economics, who are far more amenable to a new paradigm than their hidebound academic instructors in the major Universities.

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“Neoclassical economists are not experts on money but experts in finding reasons to believe you can model capitalism as though money banks and debt don’t exist. “And then you give them the right to control the banking system.”

• Mainstream Economists Live In A Parallel Universe (Ren.)

Neoclassical economic theory claims that the human being is a rational self-serving profit maximising unit. It claims to prove the market can handle anything. Classical economists model the economy based on the concept of rational consumers maximising utility and firms maximising profits. Their vision of the world claims that equilibrium is reached and the world functions best if there is no government, no trade unions and no monopolies. Professor Keen says mainstream economist change reality to fit their model. University campuses used to be about education, challenging people exposing them to ideas they didn’t necessarily have in the first instance. But Professor Keen says economics actually leads away from this possibility. “Economics starts by inculcating a view of how you should think about the economy that rules out a whole range of alternatives,” he said.

“It rules out thinking about the sort of work that I do, working from the top down, looking at the overall economy and modelling that way. They say ‘no, you’ve got to start from the isolated individual and you have to talk about individuals for maximising utility’. We’re talking about them as consumers or firms who are maximising profits. “In their mind that is the definition of a perfectly functioning system, but it is not the definition of the world in which we live. “Once you’ve got the mathematical structure of trying to do that, you have a very hard time treating anything else as a sensible analysis of capitalism. They rule out a whole lot of other ways of thinking.”

[..] “Imagine capitalism with no banks, no debt, and no money,” says Professor Keen. “You’re getting pretty close to being a neoclassical economist.” “Neoclassical economists are not experts on money but experts in finding reasons to believe you can model capitalism as though money banks and debt don’t exist. “And then you give them the right to control the banking system.”

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“..with half of the flyover population in an opiate daze, and chain-stores shuttering to the tune of 10,000 this year, and car leases expiring into a car market dependent on liar loans bundled into janky securities, and the debt problem festering away like a something dead under the floor boards.”

• Light It Up (Jim Kunstler)

Grinning like Wonderland’s Cheshire Cat, the Golden Golem of Greatness pronounced this interval of fine fall weather “the calm before the storm.” Hmmmm. Talk about cryptic. This was less than a week after he verbally smacked down Secretary of State Rex Tillerson for “wasting his time” trying to diplomatically reach “Little Rocket Man… “ whereby Rex riposted, calling the President a “moron.” Ordinarily — say, during the past 220-odd years of this nation’s existence — talk like that would prompt a resignation (though, there are no other instances of talk like that). illerson must think that for the good of the country he can’t resign, and God knows what kind of desperate notes are being swapped around between the State Department and the Pentagon.

[..] We are entering a slot of time where an awful lot of things might go wrong. What gets me is seeing the stock markets make new record highs every other day, whether Puerto Rico is destroyed overnight or hundreds of people are shot in a Las Vegas parking lot — and notwithstanding the overall phony-baloney condition of the American economy, with half of the flyover population in an opiate daze, and chain-stores shuttering to the tune of 10,000 this year, and car leases expiring into a car market dependent on liar loans bundled into janky securities, and the debt problem festering away like a something dead under the floor boards. Some kind of financial accident with a this-sucker-is-going-down flavor feels like it’s waiting to happen.

I don’t think Trump was referring to that either, but what if it came down around the same moment that we decided to light up North Korea? Or, alternately, if Rex Tillerson, Mike Pence, and a score of other senior politicos decide that its time for Trump to go? The president is looking mighty friendless these days, and more than a little reckless. I mean, for the good of the country, ladies and gentlemen, what are they waiting for? Will his generals defend him? Nah. Fuggedabowdit. I wonder what the code-name for their action will be. Operation Moron Overboard? The whole spectacle is starting to look like a Coen Brothers movie. When the time comes, I hope they will make the documentary about these strange days of October, 2017.

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But it will just keep going.

• Russiagate Is More Fiction Than Fact (Nation)

In the electrified aftermath of the election, aides to Hillary Clinton and Obama pored over polling numbers and turnout data, looking for clues to explain what they saw as an unnatural turn of events. One of the theories to emerge from their post-mortem was that Russian operatives who were directed by the Kremlin to support Trump may have taken advantage of Facebook and other social media platforms to direct their messages to American voters in key demographic areas in order to increase enthusiasm for Trump and suppress support for Clinton. These former advisers didn’t have hard evidence that Russian trolls were using Facebook to micro-target voters in swing districts—at least not yet—but they shared their theories with the House and Senate intelligence committees, which launched parallel investigations into Russia’s role in the presidential campaign in January.

The theories paid off. A personal visit in May by Democratic Senator Mark Warner, vice-chair of the Senate Intelligence Committee, “spurred the company to make some changes in how it conducted its internal investigation.” Facebook’s announcement in August of finding 3,000 “likely” Russian ads is now an ongoing “scandal” that has dragged the company before Congressional committees. Other election threats loom. A recent front-page New York Times article linking Russian cyber operations to voting irregularities across the United States is headlined, “Russian Election Hacking Efforts, Wider Than Previously Known, Draw Little Scrutiny.” But read on and you’ll discover that there is no evidence of “Russian election hacking,” only evidence-free accusations of it.

Voting problems in Durham, North Carolina, “felt like tampering, or some kind of cyberattack,” election monitor Susan Greenhalgh says, and “months later…questions still linger about what happened that day in Durham as well as other counties in North Carolina, Virginia, Georgia and Arizona.” There is one caveat: “There are plenty of other reasons for such breakdowns—local officials blamed human error and software malfunctions—and no clear-cut evidence of digital sabotage has emerged, much less a Russian role in it.” The evidence-free concern over Russian hacking expanded in late September when the Department of Homeland Security informed 21 states that they had been targeted by Russian cyber-operations during the 2016 election. But three states have already dismissed the DHS claims, including California, which announced that after seeking “further information, it became clear that DHS’s conclusions were wrong.” Recent elections in France and Germany saw similar fears of Russian hacking and disinformation—and similar results.

In France, a hack targeting the campaign of election winner Emmanuel Macron ended up having “no trace,” of Russian involvement, and “was so generic and simple that it could have been practically anyone,” the head of French cyber-security quietly explained after the vote. Germany faced an even more puzzling outcome: Nothing happened. “The apparent absence of a robust Russian campaign to sabotage the German vote has become a mystery among officials and experts who had warned of a likely onslaught,” the Post reported in an article headlined “As Germans prepare to vote, a mystery grows: Where are the Russians?” The mystery was so profound that The New York Times also explored it days later: “German Election Mystery: Why No Russian Meddling?”

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RIpping apart the blockchain.

• Your Local Bank Could Be the Central Bank (BBG)

In practice it is difficult to envisage a sustainable digital currency that would not be accessible to all; cryptocurrencies are increasingly attractive to the general public. As for privacy, a decentralized ledger, on top of the security advantage it brings, makes the anonymity attached to cash transactions technically possible, and is thus nothing new. The BIS acknowledges as much: While it may look odd for a central bank to issue a cryptocurrency that provides anonymity, this is precisely what it does with physical currency, i.e. cash. Perhaps a key difference is that, with a retail CBCC, the provision of anonymity becomes a conscious decision.

Some might argue that an anonymous payment network would run against the current trend in anti-money-laundering regulation, where the origin of invested cash is carefully vetted to avoid criminal or tax evasion activities. Technically, there is nothing to prevent central bank digital currencies from being fully traceable. Even a decentralized ledger (where transactions are recorded digitally across many computers) only provides the potential for anonymity but does not guarantee it. But if there is no desire for anonymity, then there would be no need for the ledger to be decentralized. The logical outcome would be for central banks themselves to offer retail services, taking deposits from the general public. The BIS considers this possibility:

“We argue that the main benefit that a consumer-facing retail CBCC would offer, over the provision of public access to (centralized) central bank accounts, is that the former would have the potential to provide the anonymity of cash. In particular, peer-to-peer transfers allow anonymity vis-à-vis any third party. If third-party anonymity is not of sufficient importance to the public, then many of the alleged benefits of retail CBCCs can be achieved by giving broad access to accounts at the central bank.” A central bank e-minting monopoly would fundamentally change the structure of the banking system, leading to an increased monetary basis and seigniorage. Any temptation to abuse the enhanced minting monopolies would be reduced not by new technology but by the competitive alternatives offered by other countries’ digital currencies, or even, if necessary, old-fashioned valuable commodities.

The introduction of CBBCs that are traceable would also bring about a revolutionary transformation of the financial system architecture. This is, quite obviously, the opposite of the libertarian ideology underpinning the original cryptocurrencies. It would also accelerate the dismantling of the banking system as we know it. With central banks offering retail services, commercial banks would lose deposits, and with it their ability to lend. It would curtail or end the role of the money multiplier – whereby banks lend more than they receive in deposits, thus increasing the overall money supply – in the economy, and so necessitate massive monetary creation to maintain levels of liquidity in the market. Lending would increasingly be made by regulated specialized funds.

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Strange and ugly.

• US Escalates Trade Dispute With UK And Canada Over Bombardier (G.)

The US has escalated its trade dispute with Britain and Canada by announcing plans to slap a further 80% duty on the export of planes built by Bombardier. The move follows complaints by Boeing that Canadian-owned Bombardier, which employs more than 4,000 people in Belfast, had dumped its C Series jets at “absurdly low” prices. Bombardier is facing a planned 220% tariff as part of a separate investigation, the US Department of Commerce confirmed. A second levy of 80% is also being applied to Bombardier’s sales to the US after a preliminary finding that the jets were sold below cost price to Delta Air Lines in 2016. Boeing claimed that 75 aircraft were sold at nearly £10.6m below cost price. Bombardier dismissed the claim as “absurd”. The company is due to begin delivering a blockbuster order for up to 125 new jets to Atlanta-based Delta next year.

The US commerce secretary, Wilbur Ross, said: “The United States is committed to free, fair and reciprocal trade with Canada, but this is not our idea of a properly functioning trading relationship. We will continue to verify the accuracy of this decision, while doing everything in our power to stand up for American companies and their workers.” [..] The proposed duties would not take effect unless affirmed by the US International Trade Commission (ITC) early next year. To win its case before the ITC, Boeing must prove it was harmed by Bombardier’s sales, despite not using one of its own jets to compete for the Delta order. Bombardier said it was confident that the ITC would find Boeing had not been harmed, calling the Department of Commerce decision a case of “egregious overreach”. Delta said the decision was preliminary and it was confident the ITC “will conclude that no US manufacturer is at risk” from Bombardier’s plane.

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Australia next?! US?

• Canada Will Pay Compensation To Thousands Of Indigenous ‘Stolen Children’ (R.)

Canada will pay up to C$750m in compensation to thousands of aboriginals who were forcibly removed as children from their families decades ago, promising to end “a terrible legacy”. The move is the latest attempt by the Liberal government of the prime minister, Justin Trudeau, to repair ties with Canada’s often-marginalised indigenous population, which says it has been the victim of systemic racism for centuries. In the so-called “Sixties Scoop”, welfare authorities took about 20,000 aboriginal children from their homes between the 1960s and 1980s and placed them in foster care or allowed them to be adopted by non-indigenous families. The compensation package is designed to settle many of the lawsuits launched by survivors, who say the forced removal deprived them of their heritage and led to mental disorders, substance abuse and suicide.

“Language and culture, apology, healing – these are essential elements to begin to right the wrong of this dark and painful chapter,” said Carolyn Bennett, the federal minister in charge of relations with the indigenous population. Canada’s 1.4 million aboriginals, who make up about 4% of the population, experience higher levels of poverty and incarceration and have a lower life expectancy than other Canadians. They are often victims of violent crime and addiction. Indigenous activists complain Trudeau has broken repeated promises to improve their lives since taking office in late 2015. He reshuffled his cabinet in August to put more emphasis on helping aboriginal people. Bennett, at times fighting back tears, told a news conference she had heard “truly heartbreaking stories” about loss of identity and alienation.

Marcia Brown Martel, an aboriginal chief who led the campaign for compensation, lamented the “stealing of children” and noted some of those involved lived as far away as New Zealand. “Think of it as a puzzle, a great big puzzle. Pieces, people are missing,” she told reporters. [..] Trudeau and other Canadian leaders have already apologized for the many abuses committed over a 150-year period when 150,000 aboriginal children were forcibly separated from their parents and sent to church-run residential schools. In 2015, an official report said the schools were an attempt to end the existence of aboriginals as distinct legal, social, cultural, religious and racial entities in Canada.

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A look at the future.

• FDP Chief Says Schaeuble ‘Not Tough Enough’ On Greece (K.)

The leader of Germany’s Free Democrats (FDP), Christian Lindner, seen as a likely successor at the finance ministry if his pro-business party enters a coalition with Chancellor Angela Merkel’s Christian Democrats (CDU), has criticized outgoing Finance Minister Wolfgang Schaeuble for not being tough enough on Greece. “Mr Schaeuble did not manage to impose himself over the chancellor in many questions of European policy. Just remember the third aid package for Greece, which he originally did not want to do,” Lindner told German daily Handelsblatt in an interview Friday. The 38-year-old politician managed to lead the FDP back into parliament after a four-year absence on the back of a pledge to limit financial perils from the eurozone and an illiberal assault on Merkel’s open-doors refugee policy.

In the same interview, Lindner called for the creation of an insolvency law for eurozone states, while arguing that countries should be able to leave the common currency area while remaining in the European Union. In May, the FDP chief said that Greece should leave the euro temporarily until its economy was back on track. If the Greek debt is not sustainable as the IMF claims, Lindner said at the time, then it has to be restructured – and this cannot take place within the eurozone. Lindner avoided to say if his party would push to take over the Finance Ministry. “For us a change in fiscal policy is more important than a new minister,” said Lindner, who also expressed doubts about the prospects of a three-way alliance between CDU, FDP and the Greens, known as the “Jamaica coalition.”

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Due to lack of identity.

• Greece’s Ruling Syriza Party Falls Apart (K.)

An overwhelming majority of SYRIZA’s “Socialist Trend” faction under MEP Costas Chrysogonos have voted to part ways with the ruling leftists over differences in policy. In a ballot held on Friday, the proposal was backed by 1,678, or 82.6%, of the faction’s 2,032 members. Only 31 wanted to stay with SYRIZA. Officials said the faction will take steps to transform into an independent political grouping. They added that more details will be announced next week. Representatives of the faction also accused SYRIZA of turning into “a true replica of the centralized mainstream parties.”

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“..four of the five island camps are hosting two or three times as many people as they were designed for..”

• Overcrowded Greek Refugee Camps Ill-Prepared For Winter: UNHCR (R.)

Greece must speed up winter preparations at refugee camps on islands in the Aegean Sea where there has been a sharp rise in arrivals, the United Nations refugee agency said on Friday. Nearly 5,000 refugees, mostly Syrian or Iraqi families, crossed from Turkey in September – a quarter of all arrivals this year, UNHCR data shows. While that is a fraction of the nearly 1 million who arrived in 2015 – due to a European Union deal with Turkey to block that route – four of the five island camps are hosting two or three times as many people as they were designed for. “UNHCR urges action on the islands to ease overcrowding, improve shelter, and stock and distribute appropriate and sufficient aid items,” said Philippe Leclerc, UNHCR representative in Greece.

In the Moria camp on the island of Lesbos, one of the main entry points, more than 1,500 people are in makeshift shelters or tents without insulation, flooring or heating, UNHCR said. They include pregnant women, people with disabilities, and very young children. On nearby Samos, about 400 people are living in “very difficult” conditions and another 300, including families and lone children, are sleeping in tents in the woods due to a lack of space in the camp, UNHCR said. More than 3,000 people on Samos are crammed into facilities designed to hold 700. In January, refugees in Greece suffered sub-zero temperatures when an icy spell gripped parts of the country and scores of summer tents were weighed down by snow. More than 60,000 refugees and migrants have been trapped in Greece since Balkan countries along the northward overland route to western Europe sealed their borders in March 2016.

UNHCR has been gradually reducing its involvement on the islands since national institutions took over most services in August.

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Debt Rattle August 11 2016

Aug 112016
 
 August 11, 2016  Posted by at 9:47 am Finance Tagged with: , , , , , ,  1 Response »


G. G. Bain The new Queensboro (59th Street) Bridge over the East River, NYC 1909

• ‘Deutsche Bank Must Be Nationalized’ (Express)
• Deutsche Bank Capital Gap Larger Than Its Entire Market Cap (ZH)
• Beware The EU Dog That Doesn’t Bark (IE)
• It’s Not Going To Be Pretty: German GDP Set To Stall (CNBC)
• The Worst Place In The World To Bank (Simon Black)
• BLS Just “Revised” Away Obama’s “Fastest” Wage Growth Since The Crisis (ZH)
• Erdogan Warns Bank Resistance to Interest Cuts Could Be Treason (BBG)
• Gravity Always Wins -ZZZZZZ- (Jim Kunstler)
• Greek PM Calls on Europe to Ease Greek Debt as it Did for Germany in 1953 (GR)
• Greek Public Health Services On Brink Of Collapse (Kath.)
• Julian Assange To Be Questioned Inside Ecuador Embassy (G.)

 

 

Merkel must find a way to do what she forbids others to do.

• ‘Deutsche Bank Must Be Nationalized’ (Express)

A top economist has warned that Germany’s biggest bank is teetering on the edge of crisis and they only way to protect it against future shocks is to nationalise it. Martin Hellwig said stress tests carried out by the European Central Bank revealed the Deutsche Bank would be left in a precarious position in the event of another financial crisis. While it would probably not go bust in a fresh downturn – he predicted the bank which is crucial to the German economy would face serious equity problems. He said: “Putting it short: for a long and serious crisis there simply wouldn’t be enough money.” The Berlin government has previously only bailed out the banks under extreme circumstances but Mr Hellwig, director of the Max Planck Institute for Research on Collective Goods, backed the idea of using taxpayers’ money to fund public sector investment.

He said: “Turning banks into community property through public funds is not only possible but also necessary. “If a bank is no longer able to help itself, the federal government should take on shares and exercise the related control functions.” He continued: “In Sweden the state stepped in in 1992, filleted out unprofitable divisions and left stable companies. “It was a successful, temporary nationalisation. The goal had always been to enable a clean-up and to then get out again.” He said nationalisation may not have been part of Germany’s plan since the last financial crisis but unusual scenarios sometimes require desperate measures and would be appropriate for banks as such a large part of the economy is entirely dependent on them.

Mr Hellwig said: “I assume that this tool will be used when it comes to an institution where there are fear that a settlement procedure would bring significant system damage.” Banks that are “too big to fail” could be saved with tax-euros and the investment might even pay a return for the state. Another possible effect of state intervention would be the inevitable modernisation that would improve the bank which has seen its retail divisions become barely profitable. Mr Helwigg said: “From the outside, one gets the impression that in the last 20 years the investment bankers controlled the bank and sucked it dry. Nationalisation in an emergency could be a step towards more rationality in the banking world.”

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Creative accounting saves the day.

• Deutsche Bank Capital Gap Larger Than Its Entire Market Cap (ZH)

After the ECB concluded its latest annual stress test, which as expected found no problems with Europe’s largest banks instead scapegoating Italy’s well-known troubled banks in results that were widely discredited by the market, yesterday in an unexpected outcome, German economic research institute ZEW found that Germany’s largest bank, Deutsche Bank, had the highest potential capital shortfall, as much as €19 billion in a study of 51 European banks using U.S. Federal Reserve stress test methods. The capital gap is greater than DB’s entire market cap. Using the Fed’s approach, and thus a far more credible approach than that proposed by the ECB, the 51 European banks showed a total capital shortfall of €123 billion, with the largest gaps at Deutsche Bank, Societe Generale (€13 billion) and BNP Paribas (€10 billion).

“European banks lack sufficient capital to offset the losses expected in the case of another financial crisis,” the ZEW said in a statement on Tuesday, cited by Reuters. ZEW Finance Professor Sascha Steffen worked with New York University Stern School of Business and the University of Lausanne researchers to run stress tests used by the Fed in 2016 and the European Banking Authority (EBA) in 2014 to compare capital needs and leverage. While Societe Generale and BNP have market capitalisations of 26 billion euros and 55 billion euros, respectively, well above the study’s theoretical capital gap, Deutsche Bank would find itself in trouble if the ZEW calculation is correct as it has a market capitalisation of less than €17 billion.

Which is why it promptly disagreed with ZEW’s calculation. “There is an official EBA stress test that checked the capital backing against very tough and adverse conditions and this showed there was no acute capital need at Deutsche Bank,” the bank said in a statement in response to the study. [..]

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Guess why Schäuble didn’t want Spain, Portugal fined.

• Beware The EU Dog That Doesn’t Bark (IE)

Sometimes the most important thing that happens is what doesn’t happen — or, to paraphrase Sherlock Holmes, it’s the dog that doesn’t bark in the night. The lack of response to the European Commission’s non-enforcement in Spain and Portugal of the terms of the Stability and Growth Pact (SGP) is one of those times. According to SGP rules, the Commission should have proposed a fine to be levied on Spain and Portugal for overshooting their fiscal deficit targets by a wide margin. The fine would have been largely symbolic, but the Commission seems to have decided that the symbolism wasn’t worth it. And it was not only the Commission that chose not to bark; the rest of Europe remained silent as well. Not even Germany, the European Union’s leading austerity watchdog, perked up.

In fact, there have been reports that German finance minister Wolfgang Schäuble lobbied several commissioners not to impose fines on Spain or Portugal. The German financial press, which often criticises the European Commission for being too lax, barely registered the decision. What explains the silence? There is precedent for fiscal leniency in the EU. In 2003, all three large eurozone countries (France, Germany, and Italy) were running deficits in excess of 3% of GDP, the upper limit established by the SGP. Toward the end of that year, it was clear that France and Germany (then with record-high unemployment) were not fulfilling their deficit-reduction commitments. But, unlike today, the Commission did bark (even if it could not really bite). It proposed ratcheting up the SGP’s so-called excessive deficit procedure.

The proposal did not entail any fines; rather, it focused on the stage before fines would be considered. Nonetheless, EU finance ministers strenuously opposed it, largely for political reasons. The clash occupied the front pages of newspapers all over Europe, especially in Germany, where the press, like the political opposition, was eager to chastise Chancellor Gerhard Schröder’s government for its failure to uphold fiscal rectitude. There were heated debates on the fiscal rules, and the Commission’s role in enforcing them. In short, everyone was howling.

Despite the resistance, the Commission decided to plough ahead and censure Germany and France. With that decision, it sent a clear message that it took seriously its responsibility to administer the EU treaties — so seriously, in fact, that it would enforce rules with which it did not necessarily agree. Indeed, the Commission’s then-president, Romano Prodi, had already harshly criticised the SGP’s rigidity. Ultimately, however, political interests won the day, and the EU finance ministers voted down the proposal.

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There goes the eurozone.

• It’s Not Going To Be Pretty: German GDP Set To Stall (CNBC)

Europe’s powerhouse could be stalling. German economic growth looks set to show a dip in the second quarter, raising questions about the health of the euro zone’s largest economy in the wake of the Brexit vote. Economists polled by Reuters expect Germany’s GDP figures, due Friday morning, to increase by a mere 0.2 percent in the months from April to June, compared with 0.7 percent growth in the previous three months. Experts said the export-driven economy is struggling to sustain momentum in an uncertain global environment that encompasses the unsteady emerging economies and the uncertainty surrounding Brexit. This has sparked fears among Europe-watchers as the country is by far the 28-country European Union’s biggest economy and when Germany catches a cold, it affects the rest of the region.

“No matter how you look at it, the economy is slowing,” said Carl Weinberg, chief economist at High Frequency Economics. “The economic trend is clear. It is not pretty.” Weinberg pointed to retail sales, industrial production, and export data stalling Germany’s growth engine. The country’s economic expansion, fueled by robust consumption and international trade, has been a bright spot in the euro zone in recent years. But global developments, including a slowdown in emerging economies from lower commodity prices as well as the U.K.’s vote to leave the European Union, could weigh on the outlook. “All of the risks are to the downside,” Weinberg said.

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Europe.

• The Worst Place In The World To Bank (Simon Black)

Here’s the reality: Europe’s banking system is toast. Wholesale interest rates on the continent are already negative. Negative interest rates essentially penalize any bank that tries to be responsible and hold extra reserves. What an unbelievably stupid policy. Rather than encourage banks to be conservative with their customers’ deposits, the ECB is practically forcing them to make as many loans as possible. So it’s not exactly much of a shocker to find out that, in their haste to loan out almost 100% of their customers’ money, many of the loans went belly-up. EU data showed that by the end of September 2015, 17% of Italian loans were non-performing. The non-performing loan rate is a shocking 43.5% in Greece, and 50% in Cyprus. (That data is nearly a year old, so the numbers are worse now.)

This is a huge problem. Banks have lost a big chunk of their depositors’ savings. There’s a lot of talk now about government bail-outs. And some of that has already taken place. In Italy, the government already had to step in with a €150 billion guarantee just to forestall a potential bank run. But the Italian government is one of the most bankrupt in the world, with a debt level that exceeds 130% of GDP; they’re in no position to bail anyone out. That’s why, as of January 2016, European “bail in” legislation has taken effect. The rules are already in place whereby depositors can be held liable for the idiotic financial decisions of their banks. If the bank goes under, they can take your money down with it.

It’s already happened. In 2013, the government of Cyprus froze EVERY bank account in the country, locking every single depositor out of his/her savings. These risks are very real. Banks are illiquid and overleveraged. They’ve made far too many bad loans with their customer’s savings. The governments are in no financial position to bail them out. And the bail-in legislation already exists to steal from depositors. What’s the point of holding money in this kind of system, especially when the biggest benefit you could hope for is about a 0.1% yield on your savings account? When you step back think about the big picture, the conclusion is pretty obvious: don’t hold money in such a precarious banking system. And yet, it’s very seldom that anyone really thinks about his/her bank.

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More creative accounting.

• BLS Just “Revised” Away Obama’s “Fastest” Wage Growth Since The Crisis (ZH)

Back in February 2016, Obama took to the stage at a press conference to boast about job growth and “most importantly” how the stronger job market was “finally starting to translate into bigger paychecks.” He also took the opportunity to jab at Republicans saying the strong jobs data was “inconvenient for Republican stump speeches” as they continued their “doom and despair tour.” Obama’s specific comments were: “Most importantly, this progress is finally starting to translate into bigger paychecks. Over the past six months, wages have grown at their fastest rate since the crisis. And the policies that I’ll push this year are designed to give workers even more leverage to earn raises and promotions. So, as I said at my State of the Union address, the United States of America, right now, has the strongest, most durable economy in the world. I know that’s still inconvenient for Republican stump speeches as their doom and despair tour plays in New Hampshire. I guess you cannot please everybody.”

Turns out that revisions to historical real wage growth figures issued by the Bureau of Labor Statistics yesterday are actually fairly “inconvenient” for Obama. Time to get the band back together for a reunion of that “doom and despair” tour. In yet another stunning tribute to the “accuracy” and “consistency” of economic propagandadata being reported by our government agencies, the Bureau of Labor Statistics yesterday reported a massive downward revision of the 1Q 2016 YoY real wage growth from +4.2% to -0.4% (a 4.6% swing).

But we wouldn’t worry much about it because the revisions resulted in only “small” changes in the underlying data according to the BLS: “Indexes of all hours-related measures in the business, nonfarm business, and nonfinancial corporate sectors show historical revisions because hours in the base year of 2009 were revised; resulting revisions to percent changes are small.” We guess “small” would be one way to describe a 4.6% swing in YoY real wage growth…we would probably choose something more like “abysmal” or “disastrous” but we’re not ones to split hairs.

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He feels invincible.

• Erdogan Warns Bank Resistance to Interest Cuts Could Be Treason (BBG)

Turkish President Recep Tayyip Erdogan ratcheted up pressure on the nation’s banks, saying he would consider resistance to his calls to cut mortgage rates as an act of treason. Banks will be held “accountable” should they “act negatively in the matter of loans and interest rates,” Erdogan told members of Turkey’s Exporters Association at his palace in Ankara on Wednesday. “I would consider it as treason if the banks don’t open the way for investors.” Erdogan has demanded that lenders cut mortgage rates to an annual rate of about 9% from the market average of around 13.7% as he seeks to shore up the economy following the failed coup last month.

Lenders TC Ziraat Bankasi, Sekerbank, BNP Paribas unit Turk Ekonomi Bankasi as well as Denizbank, owned by Russia’s Sberbank, have all recently lowered interest charges to levels closer to what the president is demanding. Erdogan said he would “push the banking sector” to cut rates amid “disagreement between me and bankers.” He will convene with executives of Turkey’s banks soon in a meeting to be attended by Prime Minister Binali Yildirim, he said. The reduced rates also follow a decision by the central bank to cut the amount of cash commercial banks must keep locked up with the regulator – the so-called lira reserve requirement ratio – by half a %age point on Tuesday. It also allowed lenders to use a small amount of foreign currency and gold as reserves for lira liabilities. “You won’t lose money” if you cut rates, Erdogan told business groups in Ankara on Aug. 4. “Now is the time to do this and you can earn from the masses.”

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“..that’s what happens when debts can’t be repaid: money vanishes.”

• Gravity Always Wins -ZZZZZZ- (Jim Kunstler)

What we face is discontinuity, the end of old spent dynamics and the beginning of new dynamics. Monetary deflation has been underway for years because that’s what happens when debts can’t be repaid: money vanishes. Now we will encounter the other dimensions of deflation: the contraction of manufacturing, trade, wages, and all the familiar markers of expansion in the waning techno-industrial era.

The many dodges and stratagems tried by the supreme central bankers to work around contraction only produce ever greater distortions in markets, currencies, and the distribution of dwindling capital, leading to a grand battle over the table-scraps of history, i.e. the rise of radical politics world-wide, including Islamic Jihadism, and the western response in Trump, LePen, and the nascent Germanic right-wing. These current manifestations may be mild versions of what’s coming. Nobody in power can come to grips with the reality of our situation. We have to salvage what we can and get smaller, becoming a more modest presence here, or the planet itself is going to hit the delete button on us.

It rubs against the current religion of progress, which has replaced the other old cultic practices. The choice now is between time-out or game over, and the debate over these things is absent from the arena. The aforesaid distortions in markets, currencies, and capital are spinning out in an ever broader, centrifugal gyre, coinciding, as chance would have it, with the most peculiar election in modern times. The incoherence and deceit on both sides is far beyond even the extravagant American norms of dauntless political bullshit. We literally have no idea what we’re doing in this country, or what we’re actually wishing for. The financial structures of everyday life look more fragile than ever. Gravity always wins.

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Broken record.

• Greek PM Calls on Europe to Ease Greek Debt as it Did for Germany in 1953 (GR)

Prime Minister Alexis Tsipras has called on Europe to offer debt relief to Greece, on the 63rd anniversary of the generous debt write-off to Germany (August 8, 1953). In a message he posted on Facebook, the Greek prime minister reminds Europe that the 1953 London Debt Agreement secured the write-off of 50% of Germany’s External Debts. Tsipras argues that Europe should do the same and grant Athens substantial debt relief, in order for the country to come out of the economic crisis. The 1953 agreement in favor of Germany covered money owed before and after WWII and reduced West German debt by 50% and stretched the repayment period to 30 years. This helped Germany recover after the defeat and later become a world economic power.

“On this day, on August 8, 1953, a nearly six-month negotiation between Germany and its creditors was concluded, with the signing of the London Debt Agreement. The debt-ridden and war-torn Germany enjoys the ultimate move of solidarity in modern European history by having 60% of its foreign debt cancelled, its internal debts restructured and a trade surplus clause,” Tsipras wrote, stressing that Greece was one of the countries that signed the deal. The Greek PM also wrote that Greece’s debt relief has been a goal of SYRIZA from the start, even when in opposition. He also wrote that after the May 24 agreement between Greece’s and euro zone finance ministers, debt easing will be discussed again in 2018, after the successful completion of the country’s bailout program.

“Europe must rise to the occasion and turn its gaze to the future by signing a new social contract that will guarantee the prosperity of its people,” Tsipras added.

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Everything falls apart. This is why I ask for your help

• Greek Public Health Services On Brink Of Collapse (Kath.)

The National Health Service (ESY) is on the brink of collapse after six years of underfunding and a freeze on hirings as a result of Greece’s protracted financial crisis, according to a damning report issued on Tuesday by the Panhellenic Federation of Employees at Public Hospitals (POEDIN) which blames the Health Ministry and Prime Minister Alexis Tsipras. “Hospitals, medical centers, EKAV [ambulance services] are in a state of dissolution,” POEDIN said in a statement, adding that the premier and Health Ministry officials will “soon have to answer for the destruction of ESY.” Painting a dire picture, the report notes a fundamental lack of medical equipment (even ambulance stretchers), the shutdown of intensive care units and operating theaters, as well as shortages in doctors and staff at medical units across the country.

The situation at the Geniko Kratiko Athinon Gennimatas Hospital is particularly acute as 40% of positions across all its medical departments are vacant, while different departments have been merged to allow overworked staff to take a five-day summer vacation. According to POEDIN, one of the two CT scanners at the hospital is often out of order for long periods of time, while its two x-ray machines don’t work, forcing patients and doctors to pay to use others at private clinics and hospitals. The report also warns that the Erythros Stavros Hospital in Athens will be forced to shut down if orthopedic doctors are not hired soon, as most are now about to retire, while 70% of administrative positions are vacant.

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Let’s see it happen first. Sweden delayed it for 4 years.

• Julian Assange To Be Questioned Inside Ecuador Embassy (G.)

Julian Assange will be questioned by Swedish prosecutors inside the Ecuadorean embassy in London, in a possible breakthrough to the impasse over his case. The Ecuadorian attorney general delivered a document agreeing to a request by the Swedish prosecutor to question the founder of WikiLeaks. He is wanted for questioning over a rape allegation, which he denies. If he goes to Sweden he believes he will be taken to the US because of the activities of WikiLeaks. Assange has been living inside the embassy for more than four years and has been granted political asylum by Ecuador. He has offered to be questioned inside the embassy but Swedish prosecutors have only recently agreed.

A statement issued in Ecuador said: “In the coming weeks a date will be established for the proceedings to be held at the embassy of Ecuador in the United Kingdom. “For more than four years, the government of Ecuador has offered to cooperate in facilitating the questioning of Julian Assange in the Ecuadorian embassy in London, as well as proposing other political and legal measures, in order to reach a satisfactory solution for all parties involved in the legal case against Julian Assange, to end the unnecessary delays in the process and to ensure full and effective legal protection. “In line with this position, Ecuador proposed to Sweden the negotiation of an agreement on mutual legal assistance in criminal matters, which was signed last December and which provides the legal framework for the questioning.”

The statement said the proceedings did not affect the recent opinion of the Working Group on Arbitrary Detentions of the United Nations, which found that Assange was being arbitrarily detained. The working group called for Assange to be released and given compensation for violation of his rights. The Ecuador statement added: “Ecuador’s Foreign Ministry reiterates its commitment to the asylum granted to Julian Assange in August 2012, and reaffirms that the protection afforded by the Ecuadorian state shall continue while the circumstances persist that led to the granting of asylum, namely fears of political persecution.”

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Debt Rattle June 4 2016

Jun 042016
 
 June 4, 2016  Posted by at 11:29 am Finance Tagged with: , , , , , , , ,  11 Responses »


Walker Evans Street Scene, Vicksburg, Mississippi 1936

• The Funniest BLS Jobs Report Ever (Quinn)
• US Payrolls Huge Miss: Worst Since September 2010 (ZH)
• This Financial Bubble Is 8 Times Bigger Than The 2008 Subprime Crisis (SM)
• Lew Says China’s Overcapacity Skewing Markets (BBG)
• UBS Tells Clients To Stick With Cash-Bleeding Hedge Funds (BBG)
• Schroedinger’s Assets (Coppola)
• Homes Should Be Lived In, Not Traded (G.)
• EC Wants “Immunity” For EU Technocrats At Greek Privatization Fund (KTG)
• Greek Banks Mulling Special NPL Vehicles (Kath.)
• A Russian Warning (Dmitry Orlov et al)
• 20,000 Migrants Wait For Boats To Take Them To UK (DM)
• At Least 117 Bodies Of Migrants Found After Boat Capsized Off Libya (AP)
• Hundreds Rescued, At Least 9 Die In Shipwreck Off Crete (Kath.)

Is the narrative falling apart?

• The Funniest BLS Jobs Report Ever (Quinn)

Only a captured government drone could put out a report showing only 38,000 new jobs created, with the working age population rising by 205,000, and have the balls to report the unemployment rate plunged from 5.0% to 4.7%, the lowest since August 2007. If you ever needed proof these worthless bureaucrats are nothing more than propaganda peddlers for the establishment, this report is it. The two previous months were revised significantly downward in the fine print of the press release. It is absolutely mind boggling that these government pond scum hacks can get away with reporting that 484,000 people who WERE unemployed last month are no longer unemployed this month.

Life is so fucking good in this country, they all just decided to kick back and leave the labor force. Maybe they all won the Powerball lottery. How many people do you know who can afford to just leave the workforce and live off their vast savings? In addition, 180,000 more Americans left the workforce, bringing the total to a record 94.7 million Americans not in the labor force. The corporate MSM will roll out the usual “experts” to blather about the retirement of Baby Boomers as the false narrative to deflect blame from Obama and his minions. The absolute absurdity of the data heaped upon the ignorant masses is clearly evident in the data over the last three months.

Here is government idiocracy at its finest:
• Number of working age Americans added since March – 406,000
• Number of employed Americans since March – NEGATIVE 290,000
• Number of Americans who have supposedly voluntarily left the workforce – 1,226,000
• Unemployment rate – FELL from 5.0% to 4.7%

Talk about perpetrating the BIG LIE. Goebbels and Bernays are smiling up from the fires of hell as their acolytes of propaganda have kicked it into hyper-drive. We only need the other 7.4 million “officially” unemployed Americans to leave the work force and we’ll have 0% unemployment. At the current pace we should be there by election time. I wonder if Cramer, Liesman, or any of the other CNBC mouthpieces for the establishment will point out that not one single full-time job has been added in 2016. There were 6,000 less full-time jobs in May than in January, while there are 572,000 more low paying, no benefits, part-time Obama service jobs. Sounds like a recovery to me.

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“..a massive surge in people not in the labor force..” We’re approaching negative employment.

• US Payrolls Huge Miss: Worst Since September 2010 (ZH)

If anyone was “worried” about the Verizon strike taking away 35,000 jobs from the pro forma whisper number of 200,000 with consensus expecting 160,000 jobs, or worried about a rate hike by the Fed any time soon, you can sweep all worries away: moments ago the BLS reported that in May a paltry 38,000 jobs were added, a plunge from last month’s downward revised 123K (was 160K). The number was the lowest since September 2010! The household survey was just as bad, with only 26,000 jobs added in May, bringing the total to 151,030K. This happened as the number of unemployed tumbled from 7,920K to 7,436K driven by a massive surge in people not in the labor force which soared to a record 94,7 million, a monthly increase of over 600,000 workers.

As expected Verizon subtracted 35,000 workers however this was more than offset by a 36,000 drop in goods producing workers. Worse, there was no offsetting increase in temp workers (something we caution recently), and no growth in trade and transportation services. What is striking is that while the deteriorationg in mining employment continued (-10,000), and since reaching a peak in September 2014, mining has lost 207,000 jobs, for the first time the BLS acknowledged that the tech bubble has also burst, reporting that employment in information declined by 34,000 in May. The change in total nonfarm payroll employment for March was revised from +208,000 to +186,000, and the change for April was revised from +160,000 to +123,000.

With these revisions, employment gains in March and April combined were 59,000 less than previously reported. Over the past 3 months, job gains have averaged 116,000 per month. There is no way to spin this number as anything but atrocious.

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And growing..

• This Financial Bubble Is 8 Times Bigger Than The 2008 Subprime Crisis (SM)

On July 1, 2005, the Chairman of then President George W. Bush’s Council of Economic Advisors told a reporter from CNBC that “We’ve never had a decline in house prices on a nationwide basis. So, what I think is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.” His name was Ben Bernanke. And within a year he would become Chairman of the Federal Reserve. Of course, we now know that he was dead wrong. The housing market crashed and dragged the US economy with it. And Bernanke spent his entire tenure as Fed chairman dealing with the consequences. One of the chief culprits of this debacle was the collapse of the sub-prime bubble.

Banks had spent years making sweetheart home loans to just about anyone who wanted to borrow, including high risk ‘sub-prime’ borrowers who were often insolvent and had little prospect of honoring the terms of the loan. When the bubble got into full swing, lending practices were so out of control that banks routinely offered no-money-down mortgages to subprime borrowers. The deals got even sweeter, with banks making 102% and even 105% loans. In other words, they would loan the entire purchase price of a home plus closing costs, and then kick in a little bit extra for the borrower to put in his/her pocket. So basically these subprime home buyers were getting paid to borrow money.

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They know this already, Jack.

• Lew Says China’s Overcapacity Skewing Markets (BBG)

The U.S. will push China to reduce excess capacity in its economy at upcoming talks in Beijing, with Treasury Secretary Jacob J. Lew calling it an “area of central concern” Friday in Seoul. The issue bears watching when “excess capacity is distorting markets and important global commodities,” Lew said in remarks to reporters ahead of the U.S.-China Strategic and Economic Dialogue, scheduled for June 6-7 in Beijing. China Vice Premier Wang Yang, State Councilor Yang Jiechi and U.S. Secretary of State John Kerry will attend the meeting along with Lew. A senior Treasury official told reporters China has made a commitment to take serious action to reduce excess capacity in areas like steel and aluminum.

It’s a tough transition, especially as millions of workers would have to find new jobs. However, if the actions aren’t taken, excess capacity will continue to erode China’s economic growth prospects, said the official, who asked not to be identified. Chinese authorities are cutting excess capacity in industries including coal and steel while striving to keep growth above their 6.5% minimum target for this year. The economy has endured four years of factory-gate deflation, though forecasters expect that to turn around. Producer prices will improve in each of the next four quarters and turn positive in 2018, according to economists surveyed by Bloomberg in April.

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At what fee for UBS?

• UBS Tells Clients To Stick With Cash-Bleeding Hedge Funds (BBG)

UBS is advising its wealthiest clients to stick with hedge funds even after the $2.9 trillion industry had its worst start to a year since 2008. While the days of “double-digit and triple-digit returns” for hedge funds are over, they still generate enough to satisfy yield-hungry clients who face negative interest rates, said Mark Haefele, global CIO of UBS Wealth Management. “Their performance in the first half hasn’t been impressive but they provide diversification,” he said in an interview with Bloomberg. “They still provide a better risk-reward or different risk-reward than other parts like sovereign bonds.”

UBS in April boosted its recommended allocation to hedge funds to 20% from 18%, saying the strategy will provide stability from volatile markets. The move comes as a net $15 billion was pulled from the global hedge-fund industry in the the first quarter and as some of world’s largest institutions including MetLife said they will scale back their holdings. Hedge funds may lose about a quarter of their assets in the next year as performance slumps Blackstone’s billionaire president, Tony James, predicted last week. The HFRI Fund Weighted Composite Index declined 0.6% in the first quarter, its worst start to a year since 2008.

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The number of non-dead assets is much higher than we let on.

• Schroedinger’s Assets (Coppola)

In a new paper, Michael Woodford has reimagined the famous “Schroedinger’s Cat” thought experiment. I suspect this is unintentional. But that’s what happens when, in an understandable quest for simplicity, you create binary decisions in a complex probability-based structure. Schroedinger imagined a cat locked in a box in which there is a phial of poison. The probability of the cat being dead when the box is opened is less than 100% (since some cats are tough). So if p is the probability of the cat being dead, 1-p is the probability of it being alive. The problem is that until the box is opened, we do not know if the cat is alive or dead. In Schroedinger’s universe of probabilities, the cat is both “alive” and “dead” until the box is opened, when one of the possible outcomes is crystallised. Now for “cat”, read assets. In Woodford’s model, when there is no crisis, the probability of asset collapse is zero. But if there is a crisis, the probability of an asset collapse is greater than zero but less than 100%:

“The sequence of events, and the set of alternative states that may be reached, within each period is indicated in Figure 1. In subperiod 1, a financial market is open in which bankers issue short-term safe liabilities and acquire risky durables, and households decide on the cash balances to hold for use by the shopper. In subperiod 2, information is revealed about the possibility that the durable goods purchased by the banks will prove to be valueless. With probability p, the no crisis state is reached, in which it is known with certainty that the no collapse in the value of the assets will occur, but with probability 1-p, a crisis state is reached, in which it is understood to be possible (though not yet certain) that the assets will prove to be worthless. Finally, in subperiod 3, the value of the risky durables is learned.”

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Close to my heart, but very incomplete in its argumentation.

• Homes Should Be Lived In, Not Traded (G.)

The problem is twofold: the move to viewing houses as assets, a predictable investment that lets you turn a profit and offers more return on the pound than a pension, means there’s an incentive for wealthy buyers to invest in bricks and mortar without bothering with tenants. But also, as long as our economy gets sucked into a south-east vortex, more people will head to the capital for work, as the rest of the country struggles. George Osborne’s northern powerhouse claims to address this imbalance, twinned with the excruciatingly named “Midlands engine”. But with the announcement that 250 jobs in the very department responsible for rolling out the northern powerhouse are moving from Sheffield to London, that commitment looks as weak as the efforts to give it a catchy moniker.

As long as jobs fail to materialise in post-industrial towns, empty terraces will multiply. Conservative politicians have long opined that people seeking work should “get on their bike”, without stopping to observe that many do: hence the brain drain from the north and Wales, and the exponential demand for housing in the south-east England. Houses should be lived in, most people would agree: so the government’s move to criminalise squatting is key to understanding the problem of empty houses. Contrary to scare stories, people don’t pop out for a pint of milk and find that squatters have moved in to their home. Squatters often took up residence in vacant buildings, and used the houses for their intended purpose: living in.

Prosecuting squatters reasserts people’s right to treat homes as assets, not shelter. When it comes to empty houses, it’s the inequality stupid. The inequality that means some can buy multiple houses, while others cannot rent one. That sees London swallowing up wealth, jobs and land value hikes, while parts of the country grow desolate. There shouldn’t be empty homes while some people sleep on the streets, but the fact that so many lie empty should worry us: many houses aren’t homes, they’re investment vehicles, and long term, they scupper all our chances of financial and social security.

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Selling off a country in peace.

• EC Wants “Immunity” For EU Technocrats At Greek Privatization Fund (KTG)

The European Commission directly intervened in the work of the Greek Justice and demanded that EU technocrats working at the Greek Privatization Fund enjoy “immunity.” The EC intervenes two days after corruption prosecutors in Athens raised charges against 3 Greeks and 3 EU-nationals of the HRADF for selling public assets thus causing losses of several millions of euro to the state. On Friday, EC spokesman Margaritis Schinas told reporters in Brussels that EU experts working in Greece under the Greek program, should enjoy some kind of ‘guarantee’. “For us, satisfactory operating margins should be guaranteed for all European experts assisting Greece to improve its economy and find its way back to growth,” Schinas said.

At the same time, he stressed that “there is full respect to judicial procedures” currently under way against 6 members of the old Privatization Fund.but the invervention was clear. Schinas did not elaborate on the Eurogroup request referring to immunity for EU technocrats who will work for the new Greek Privatization Fund. The EC intervention came right after the corruption prosecutors raised charges against 6 members of the TAIPED for the sale of 28 public assets. Three of those members are Greeks, the other three from Italy, Spain and Slovakia appointed by the Eurogroup. The six have been investigated for the period 2013-2014 and have been called to testify before corruption investigator Costas Sargiotis.

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Yeah, let’s create some more creativity.

• Greek Banks Mulling Special NPL Vehicles (Kath.)

Greece’s core banks are considering the creation of special purpose companies which will receive large portfolios of nonperforming loans and then be sold so that they stop burdening the lenders’ financial figures, as NPLs now exceed €100 billion in total. The ECB is asking bank managers to proceed with tackling this huge matter at a speedier pace and to make brave decisions for the drastic slashing of bad loans from their finances. In this context, one of the plans being examined concerns the special vehicles to be created with NPL portfolios and sold off not to third parties but to the existing stakeholders of the banks.

This creation of what would resemble a “bad bank” for each lender would serve to immediately lighten the credit sector’s financial reports, while the transfer of those vehicles to the existing stakeholders could offer them future benefits from the active management of those bad loans. Nowadays the biggest obstacle to the sale of NPLs to third parties is the great distance between buyers and sellers. The buyers of bad loans want to acquire such portfolios at exceptionally low prices, due to the country risk, the devaluation of assets owing to the protracted recession in Greece, the inefficient legal system etc. On the other hand, the sellers – i.e. the banks – are refusing to sell at such low prices as they appear certain that among the current NPL stock that reaches up to 55 percent of all loans there is a huge volume of debts that could revert to normality with the right management.

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They are not kidding.

• A Russian Warning (Dmitry Orlov et al)

We, the undersigned, are Russians living and working in the USA. We have been watching with increasing anxiety as the current US and NATO policies have set us on an extremely dangerous collision course with the Russian Federation, as well as with China. Many respected, patriotic Americans, such as Paul Craig Roberts, Stephen Cohen, Philip Giraldi, Ray McGovern and many others have been issuing warnings of a looming a Third World War. But their voices have been all but lost among the din of a mass media that is full of deceptive and inaccurate stories that characterize the Russian economy as being in shambles and the Russian military as weak—all based on no evidence. But we—knowing both Russian history and the current state of Russian society and the Russian military, cannot swallow these lies. We now feel that it is our duty, as Russians living in the US, to warn the American people that they are being lied to, and to tell them the truth.

And the truth is simply this: If there is going to be a war with Russia, then the United States will most certainly be destroyed, and most of us will end up dead. Let us take a step back and put what is happening in a historical context. Russia has suffered a great deal at the hands of foreign invaders, losing 22 million people in World War II. Most of the dead were civilians, because the country was invaded, and the Russians have vowed to never let such a disaster happen again. Each time Russia had been invaded, she emerged victorious. In 1812 Nepoleon invaded Russia; in 1814 Russian cavalry rode into Paris. On June 22, 1941, Hitler’s Luftwaffe bombed Kiev; On May 8, 1945, Soviet troops rolled into Berlin.

But times have changed since then. If Hitler were to attack Russia today, he would be dead 20 to 30 minutes later, his bunker reduced to glowing rubble by a strike from a Kalibr supersonic cruise missile launched from a small Russian navy ship somewhere in the Baltic Sea. The operational abilities of the new Russian military have been most persuasively demonstrated during the recent action against ISIS, Al Nusra and other foreign-funded terrorist groups operating in Syria. A long time ago Russia had to respond to provocations by fighting land battles on her own territory, then launching a counter-invasion; but this is no longer necessary. Russia’s new weapons make retaliation instant, undetectable, unstoppable and perfectly lethal.

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Be afraid! There’s only 60 million of you!

• 20,000 Migrants Wait For Boats To Take Them To UK (DM)

A file lying in the drawer of the manager’s office at a small French seaside hotel provides intriguing clues about the gangsters who smuggle migrants across the Channel to Britain. It contains the passport details of four shadowy men who booked in for a night to pull off an audacious crime by trafficking 30 Pakistanis and Albanians by sea into the UK. Gangs of people smugglers now operate along all 450 miles of the north French coast — from Calais on the Belgian border to Cherbourg and beyond — as 20,000 migrants wait to get to England for a new life. During the past week they have used small fishing vessels, private yachts and speedboats to slip migrants onto England’s South Coast beaches under cover of darkness.

Early last Sunday, 18 migrants were rescued in Dymchurch, a coastal village in Kent, after their rubber dinghy began to sink offshore. The same morning, eight migrants were rescued by a lifeboat in Portsmouth harbour as they floated adrift in a fishing boat. The determination of migrants and the greed of traffickers has not been diminished by the French government’s demolition in March of the ‘Jungle’ migrant camp in Calais, an unhygienic shanty town of 4,000. The migrants simply moved on — initially 30 or so miles away to Dunkirk, where thousands live in a camp near the port, paying traffickers to cross the Channel, and then spreading further along the coast.

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How many boats and bodies sink that we never hear about?

• At Least 117 Bodies Of Migrants Found After Boat Capsized Off Libya (AP)

More than 110 bodies were found along a Libyan beach after a smuggling boat of mostly African migrants sank, while a separate search-and-rescue operation across the Mediterranean saved 340 people Friday and recovered nine bodies. The developments were the latest deadly disasters for refugees and migrants seeking a better life in Europe, and they followed the drownings of more than 1,000 people since May 25 while attempting the long and perilous journey from North Africa to southern Europe. As traffickers take advantage of improving weather, officials say it is impossible to know how many unseaworthy boats are being launched — and how many never reach their destination. Naval operations in the southern Mediterranean, co-ordinated by Italy, have been stretched just responding to the disasters they do hear about.

At least 117 bodies — 75 women, six children and 36 men — washed up on a beach or were pulled from the water near the western Libyan city of Zwara Thursday and Friday, Mohammed al-Mosrati, a spokesman for Libya’s Red Crescent, told The Associated Press. All but a few were from African countries. The death toll was expected to rise. The children were aged between 7 and 10, said Bahaa al-Kwash, a top media official in the Red Crescent. “It is very painful, and the numbers are very high,” he said, adding that the dead were not wearing life jackets — something the organization had noticed about bodies recovered in recent weeks. “This is a cross-border network of smugglers and traffickers, and there is a need for an international effort to combat this phenomenon,” he said.

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Crete is a somewhat novel destination.

• Hundreds Rescued, At Least 9 Die In Shipwreck Off Crete (Kath.)

Hundreds of migrants were rescued on Friday after a smuggling boat sank in international waters south of Crete, while the Hellenic Coast Guard recovered the bodies of at least nine drowned migrants. The 25-meter vessel capsized in the early hours of Friday morning under circumstances that remained unclear, leaving hundreds of migrants in the sea, some 70 nautical miles south of Crete. According to the International Organization for Migration, around 700 migrants had been aboard the vessel. Five ships – cargo and commercial vessels – had been near the scene and offered assistance, rescuing scores of migrants. The Hellenic Coast Guard sent two vessels while the navy dispatched two Super Puma helicopters to scour the area.

By late Friday, 340 migrants had been rescued and the bodies of nine migrants pulled out of the sea by rescue workers. Another vessel capsized off the coast of Libya on Friday, leading to a larger death toll, with more than 100 bodies found in the sea. Meanwhile authorities on the islands of the eastern Aegean expressed concern as tensions are rising at detention centers and frequently escalating into brawls. The influx of migrants to the islands, which had all but stopped in recent weeks, following a deal between the European Union and Ankara to return migrants to Turkey, appears to have picked up again, unnerving authorities. A group of 120 migrants arrived on Chios Friday and another 25 on Lesvos.

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Jobs, Shale, Debt and Minsky

Dec 052014
 
 December 5, 2014  Posted by at 8:29 pm Finance Tagged with: , , , , ,  5 Responses »


Arthur Rothstein President Roosevelt tours drought area, near Bismarck, North Dakota Aug 1936

OK, I don’t see a whole lot of comprehension out there, so let’s try and link the obvious: employment to shale to plummeting oil prices to the debt the shale industry was built on (and which is vanishing). I know, people look at the US jobs report today, and at the stock exchanges (Europe up some 2% across the board), and think salvation has landed on their doorstep, but the true story really is very different.

The EU markets are up because of US job numbers + the expectation that Draghi will launch a broad QE in January. But US jobs are far less sunny than meets the eye at first glance, and the Bundesbank will not all of a sudden do a 180º on ECB stimulus options. Ergo: a lot of European investors are set to lose a lot of money.

Anyone notice how quiet Angela Merkel has become about the QE debate? That’s because she doesn’t want to be caught stuck in a losing corner. Even if the Bundesbank would give in to Draghi, and chances are close to zero, there would be multiple court cases in Deutschland against that decision, and chances are slim the spend spend side would win them all. That’s the sort of quicksand an incumbent leader like Merkel wants to avoid at all cost.

But let’s leave Europe to cook itself, and its own goose too. What’s happening stateside is more important today. First, Marc Chandler has a good way of putting what I have said for as long as oil prices started testing ever deeper seas: the danger to the industry is not even so much falling prices, it’s financing both existing and future endeavors. Shale is a leveraged Ponzi, that’s its most urgent problem. Even if shale could break even at low prices, financiers and investors would still leave the building.

Both shale oil and gas have two big problems: 1) projects are based on highly optimistic returns, and 2) they are financed with very large and leveraged debt loads. With WTI prices now at $66 a barrel, and the first Bakken prices below $50 a barrel having been signaled, the entire industry starts resembling a house of cards, a game of dominoes and/or a pyramid shell (pick your favorite) more by the day. Chandler:

This Is Oil’s ‘Minsky Moment’

[..] Marc Chandler says the energy sector has just suffered its own Minsky moment. And while he doesn’t expect it to take down the stock market, the slide in oil could have a serious impact on the high-yield bond market. Minsky moment is a term coined by Pimco economist Paul McCulley in 1998, and it refers to a point when a period of rapid growth and risk-taking leads to a sudden turn lower and a crisis. Chandler, global head of markets strategy at Brown Brothers Harriman, says that is precisely what is happening in crude oil.

“Many people a couple years ago, a year ago, were saying that oil prices could only go up – ‘we’re in peak oil’ – meaning that we’re running out of the stuff. So a lot of things were leveraged based on oil prices that can only go up. Sort of like house prices—’they can only go up.’ So what happened is, because people held this as a deep conviction, they leveraged up,” Chandler said.” [..] “The big risk now to our shale is not going to be that the price of oil drops so far that it’s not going to be profitable,” he said. “The weakness, the Achilles’ heel, is that they don’t get the cheap funding anymore.”

Even Nature magazine this week gave it a shot, and tried to lend scientific credibility to a certain view of shale. Here’s the editorial:

The Uncertain Dash For Gas

[..] The International Energy Agency projected in November that global production of shale gas would more than triple between 2012 and 2040, as countries such as China ramp up fracking of their own shale formations.

[..] Academic journals are filled with earnest projections about future energy dynamics, which usually turn out to be wildly inaccurate. Even worse, governments and companies wager billions of dollars on dubious bets. This matters because investment begets further investment. As the pipework and pumps go in, momentum builds. This is what economists call technology lock-in.

[..] Nature has obtained detailed US Energy Information Administration (EIA) forecasts of production from the nation’s biggest shale-gas production sites. These forecasts matter because they feed into decisions on US energy policy made at the highest levels. Crucially, they are much higher than the best independent academic estimates. The conclusion is that the US government and much of the energy industry may be vastly overestimating how much natural gas the United States will produce in the coming decades.

[..] The EIA projects that production will rise by more than 50% over the next quarter of a century, and perhaps beyond, with shale formations supplying much of that increase. But such optimism contrasts with forecasts developed by a team of specialists at the University of Texas, which is analysing the geological conditions using data at much higher resolution than the EIA’s.

The Texas team projects that gas production from four of the most productive formations will peak in the coming years and then quickly decline. If that pattern holds for other formations that the team has not yet analysed, it could mean much less natural gas in the United States future.

And then an article:

Natural Gas: The Fracking Fallacy

When US President Barack Obama talks about the future, he foresees a thriving US economy fuelled to a large degree by vast amounts of natural gas pouring from domestic wells. “We have a supply of natural gas that can last America nearly 100 years,” he declared in his 2012 State of the Union address. [..]

Over the next 20 years, US industry and electricity producers are expected to invest hundreds of billions of dollars in new plants that rely on natural gas. And billions more dollars are pouring into the construction of export facilities that will enable the United States to ship liquefied natural gas to Europe, Asia and South America.

All of those investments are based on the expectation that US gas production will climb for decades, in line with the official forecasts by the US Energy Information Administration (EIA). As agency director Adam Sieminski put it last year: “For natural gas, the EIA has no doubt at all that production can continue to grow all the way out to 2040.”

But a careful examination of the assumptions behind such bullish forecasts suggests that they may be overly optimistic, in part because the government’s predictions rely on coarse-grained studies of major shale formations, or plays. Now, researchers are analysing those formations in much greater detail and are issuing more-conservative forecasts. They calculate that such formations have relatively small ‘sweet spots’ where it will be profitable to extract gas.

The results are “bad news”, says Tad Patzek, head of the University of Texas at Austin’s department of petroleum and geosystems engineering, and a member of the team that is conducting the in-depth analyses. With companies trying to extract shale gas as fast as possible and export significant quantities, he argues, “we’re setting ourselves up for a major fiasco”.

The scientific ring to it is commendable, but this misses quite a few things. They cite David Hughes, but leave out the work of Rune Likvern, without whom in my opinion no true – scientific or not – view of the shale industry is complete. But okay, they tried, in their own way, and their conclusions may be a bit softened, but they’re still miles apart from those of either the industry’s PR, or the EIA.

And then we move to the next link: that between shale and jobs. Because that’s where falling oil prices start to go from joy for the whole family to something entirely different.

What happens if the US shale industry crumbles under the weight of its own leverage? Most people will probably think: we’ll just start buying from that oversupplied world market again. But it’s not that easy, that leaves out one big issue. American jobs.

And we can take it straight from there to today’s hosannah heysannah BLS report. Which, however, has issues that don’t show up at the surface. Tyler Durden:

Full-Time Jobs Down 150K, Participation Rate Remains At 35 Year Lows

While the seasonally-adjusted headline Establishment Survey payroll print reported by the BLS moments ago may be indicative of an economy which the Fed will soon have to temper in an attempt to cool down, a closer read of the November payrolls report shows several other things that were not quite as rosy. First, the Household Survey was nowhere close to confirming the Establishment Survey data, suggesting jobs rose only by 4K from 147,283K to 147,287K, and furthermore, the breakdown was skewed fully in favor of Part-Time jobs, which rose by 77K while Full-Time jobs declined by 150K.

And then for those keeping tabs on the composition of the labor force, the same adverse trends indicated over the past 4 years have continued, with the participation rate remaining flat at 62.8%, essentially the lowest print since 1978, driven by a 69K worker increase in people not in the labor force.

So according to the BLS Household Survey, the US lost 150,000 jobs, while the Establishment Survey, prepared by the same BLS, shows a gain of 321,000 jobs. Yay! pARty! But we’ve been familiar with all the questions surrounding the jobs reports for a long time, so that’s not all that interesting anymore.

Still, when you see that again most of the jobs that were allegedly created are low paid service jobs, and that wages are not going anywhere, you have to wonder what is really happening. Well, this. The vast majority of new US jobs since 2008/9 have come from energy- and related industries, which makes them a dangerously endangered species now oil prices or down 40% and falling.

Tyler Durden ran the following on Wednesday, and I think this is very relevant today:

Jobs: Shale States vs Non-Shale States

Consider: lower oil prices unequivocally “make everyone better off”, Right? Wrong. First: new oil well permits collapse 40% in November; why is this an issue? Because since December 2007, or roughly the start of the global depression, shale oil states have added 1.36 million jobs while non-shale states have lost 424,000 jobs.

The ripple effects are everywhere. If you think about the role of oil in your life, it is not only the primary source of many of our fuels, but is also critical to our lubricants, chemicals, synthetic fibers, pharmaceuticals, plastics, and many other items we come into contact with every day. The industry supports almost 1.3 million jobs in manufacturing alone and is responsible for almost $1.2 trillion in annual gross domestic product. If you think about the law, accounting, and engineering firms that serve the industry, the pipe, drilling equipment, and other manufactured goods that it requires, and the large payrolls and their effects on consumer spending, you will begin to get a picture of the enormity of the industry.

Simply put, this means 9.3 million, or 93% of the 10 million jobs created since the recession/depression trough, are energy related.

The links above, jobs to shale to oil prices, are intended to give people an idea of what’s in store if oil prices stay where they are or fall more. It’s 4 to 12 for US shale, and its saving grace is nowhere to be seen. And if 93% of all new American jobs since the recession, even if they are burgerflipping ones, come from the oil and gas industry, what’s going to become of either of the BLS reports?

I’ve been saying for weeks that lower oil prices would not be a boon but a scourge for the US economy, for several different reasons, and this is a big one. The losses to investors, the restructurings and bankruptcies, and perhaps even the bailouts, are a very much interconnected and crosslinked other. There’s no resilience – left – in a system like this, it bets all on red, and that makes it terribly brittle.