Bolton Archives - Page 4 of 4 - The Automatic Earth

For me it has been really shocking to witness how Julian Assange has declined in the last nine years. I have been able to see changes in Julian’s health and psychology. It was so sad, and no one could do anything. I could report on it and expose it but the other media and public opinion did absolutely nothing to make the government understand how terrible his treatment was. And all this is happening not in Russia, not in North Korea, this is happening in London, in the heart of Europe. I now realize how little we can do in our democracy.

If you look at what has happened to high-profile whistleblowers like Chelsea Manning and Edward Snowden, and an important publisher like Assange, who had the courage to publish these important revelations, what did your democracy do to save them, to treat them in a human way? Chelsea Manning was put in prison for seven years, where she tried to commit suicide twice. Now she is back in prison. Edward Snowden was forced to leave the U.S. Julian Assange has spent nine years in detainment and no one did anything. We were reporting, we were denouncing, we were exposing how seriously his health was declining. Nothing happened.

A great example of how it’s done. I stumbled upon this in the Guardian, “Ask Hadley” by one Hadley Freemen. Yes the kind of thing men won’t read, it’s directed at women. Who in this way get told what to think of Assange. The rape smear against him from MI6 et al has been more successful than anything else in turning especially women against him. This is how. It’s vile and it’s very dirty. And this Hadley person has no qualms about throwing another woman, Pamela Anderson, under the bus to do it. Because, you know, of her reputation.

• Pamela Anderson’s Assange Blanket Conceals The Truth Of His Detention (G.)

Anderson made a long comment to the handily assembled press ranks outside the jail after her visit. She talked about how horrifically unjust it was that Assange was “really cut off from everybody”, to which you can only answer: “Well then, he should be delighted, given he chose to do exactly that for the past seven years when he holed himself up in the Ecuadorean embassy.” Anderson continued: “He does not deserve to be in a supermax prison. He has never committed a violent act. He is an innocent person.”

‘Nothing makes a woman look more credible than writing “Cromwell” on a blanket and then standing outside a prison.’ Photograph: Gareth Fuller/PA

And again, Ms Anderson, one must beg to remind you that, while that may all be true, no one knows that for certain because – and apologies for bringing up this inconvenient truth yet again – he avoided extradition to Sweden to answer to crimes he is accused of by hiding out in an embassy in Knightsbridge for seven flipping years. You remember that, right? You visited him there. That place where your warrior for truth would – according to Ecuador’s UK ambassador, Jaime Marchán – leave half-eaten meals in the sink. As Andrew O’Hagan explained way back in 2014 when describing what it was like spending time with Assange: “If you asked him to do the dishes, he would say he was trying to free economic slaves in China and had no time to wash up.”

Anderson added: “He is a good man, he is an incredible person. I love him.” She clearly rather fancies herself and Assange as the 21st century’s Marilyn Monroe and Arthur Miller (as opposed to what they actually are, which is a real-life Harley Quinn and Joker from Batman: The Animated Series). Still, good for you, Pamela! Love is a wondrous thing. This column sincerely hopes you have many happy years of washing his dishes ahead of you. Anyway, just in case Anderson’s word salad was not sufficiently persuasive, she also wore a blanket emblazoned with writing that included the words “free speech”, “gagged” and “Cromwell”. Because, honestly, nothing makes a woman look more credible than writing “Cromwell” on a blanket and then standing outside a prison. Anderson is just the latest in a long and not especially noble line of people who have decided that the best way to express themselves is by writing words on their clothing.

Pamela Anderson admits to feeling 'sick, nauseous' after visiting Julian Assange at HM Prison Belmarsh. pic.twitter.com/91W8F3SPTx

— RT UK (@RTUKnews) May 7, 2019

“The talks were so bad that the real surprise is that it took Trump until Sunday to blow up,” the source said.”

• China Backtracked On Nearly All Aspects Of US Trade Deal (R.)

The diplomatic cable from Beijing arrived in Washington late on Friday night, with systematic edits to a nearly 150-page draft trade agreement that would blow up months of negotiations between the world’s two largest economies, according to three U.S. government sources and three private sector sources briefed on the talks. The document was riddled with reversals by China that undermined core U.S. demands, the sources told Reuters. In each of the seven chapters of the draft trade deal, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war: theft of U.S. intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.

U.S. President Donald Trump responded in a tweet on Sunday vowing to raise tariffs on $200 billion worth of Chinese goods from 10 to 25 percent on Friday – timed to land in the middle of a scheduled visit by China’s Vice Premier Liu He to Washington to continue trade talks. The stripping of binding legal language from the draft struck directly at the highest priority of U.S. Trade Representative Robert Lighthizer – who views changes to Chinese laws as essential to verifying compliance after years of what U.S. officials have called empty reform promises. Lighthizer has pushed hard for an enforcement regime more like those used for punitive economic sanctions – such as those imposed on North Korea or Iran – than a typical trade deal.

“This undermines the core architecture of the deal,” said a Washington-based source with knowledge of the talks. [..] Liu last week told Lighthizer and Mnuchin that they needed to trust China to fulfil its pledges through administrative and regulatory changes, two of the sources said. Both Mnuchin and Lighthizer considered that unacceptable, given China’s history of failing to fulfil reform pledges. One private-sector source briefed on the talks said the last round of negotiations had gone very poorly because “China got greedy”. “China reneged on a dozen things, if not more … The talks were so bad that the real surprise is that it took Trump until Sunday to blow up,” the source said.

If we could get rid of Bolton and Pompeo this way, great! For now though, Trump doesn’t want to start wars, but he won’t fire the warmongers either.

• Trump Blames Bolton For Embroiling Him In Potential Venezuelan Quagmire (Week)

President Trump is having second thoughts about “his administration’s aggressive strategy in Venezuela,” complaining to aides and advisers that “he was misled about how easy it would be to replace the socialist strongman,” President Nicolas Maduro, with opposition leader Juan Guadió, The Washington Post reports. “The president’s dissatisfaction has crystallized around National Security Adviser John Bolton and what Trump has groused is an interventionist stance at odds with his view that the United States should stay out of foreign quagmires.”

Officially, U.S. policy in Venezuela is the same, and last week’s failed effort to oust Maduro has “effectively shelved serious discussion of a heavy U.S. military response,” and “Trump is now not inclined to order any sort of military intervention in Venezuela,” the Post reports, citing current and former officials and outside advisers. Instead, the U.S. is settling in to wait out Maduro on the expectation he will fall on his own, with the help of U.S. sanctions. Russian President Vladimir Putin “is not looking at all to get involved in Venezuela other than he’d like to see something positive happen for Venezuela,” Trump said last week, after a 90-minute phone call with Putin. “And I feel the same way. We want to get some humanitarian aid.” U.S. officials say Russia is deeply involved in backing Maduro.

A constitutional crisis?

• Trump Predicts Dem Investigation Will Drive Him To 2020 Win (Hill)

President Trump, speaking at a rally hours after the White House invoked executive privilege to block the release of special counsel Robert Mueller’s full report, predicted congressional Democrats’ investigations would propel him to a reelection victory in 2020. Trump did not directly address his administration’s decision to defy a subpoena from House Democrats, a move that raised the specter of a constitutional crisis, but he said the party’s desire to probe his administration, campaign and businesses would backfire politically. “They want to do investigations instead of investments,” the president told a crowd of supporters at an outdoor amphitheater just steps from the Gulf of Mexico. “I think it drives us on to victory in 2020.”

Trump said Democrats’ focus on investigations is a “disgrace” and that they should instead work with him on infrastructure, lowering drug prices and improving veterans’ health care. [..] Trump mentioned Barr only in passing during the Wednesday rally but did not address the proceedings. “Now the Democrats — we have a great attorney general — now the Democrats are saying, ‘We want more.’ You know, it was going to be like, ‘We want the Mueller report.’ Now they say, ‘Mueller report? No, we want to start all over again.’”

This will go far. This is very damning.

• Steele’s Stunning Pre-FISA Confession (Solomon)

If ever there were an admission that taints the FBI’s secret warrant to surveil Donald Trump’s campaign, it sat buried for more than 2 1/2 years in the files of a high-ranking State Department official. Deputy Assistant Secretary of State Kathleen Kavalec’s written account of her Oct. 11, 2016, meeting with FBI informant Christopher Steele shows the Hillary Clinton campaign-funded British intelligence operative admitted that his research was political and facing an Election Day deadline. And that confession occurred 10 days before the FBI used Steele’s now-discredited dossier to justify securing a Foreign Intelligence Surveillance Act (FISA) warrant to surveil former Trump campaign adviser Carter Page and the campaign’s ties to Russia.

Steele’s client “is keen to see this information come to light prior to November 8,” the date of the 2016 election, Kavalec wrote in a typed summary of her meeting with Steele and Tatyana Duran, a colleague from Steele’s Orbis Security firm. The memos were unearthed a few days ago through open-records litigation by the conservative group Citizens United. Kavalec’s notes do not appear to have been provided to the House Intelligence Committee during its Russia probe, according to former Chairman Devin Nunes (R-Calif.). “They tried to hide a lot of documents from us during our investigation, and it usually turns out there’s a reason for it,” Nunes told me. Senate and House Judiciary investigators told me they did not know about them, even though they investigated Steele’s behavior in 2017-18.

One member of Congress transmitted the memos this week to the Department of Justice’s inspector general, fearing its investigation of FISA abuses may not have had access to them. Nonetheless, the FBI is doing its best to keep much of Kavalec’s information secret by retroactively claiming it is classified, even though it was originally marked unclassified in 2016. The apparent effort to hide Kavalec’s notes from her contact with Steele has persisted for some time. State officials acknowledged a year ago they received a copy of the Steele dossier in July 2016, and got a more detailed briefing in October 2016 and referred the information to the FBI.

From what I can see, this is quite weak. Jonathan Turley explains why in the next article: “..the contempt action against Barr is long on action and short on contempt ..”

• Democrats Vote To Hold Attorney General Barr In Contempt Of Congress (G.)

House Democrats voted on Wednesday to hold the US attorney general, William Barr, in contempt of Congress, citing his failure to hand over the full, unredacted version of the special counsel Robert Mueller’s report on Russian interference in the 2016 presidential election. The decision came on a day of escalating tensions between Congress and the White House. Earlier on Wednesday, the White House invoked executive privilege to block the House judiciary committee’s request for the full Mueller report and underlying evidence. Later in the day, the House intelligence committee chair, Adam Schiff, subpoenaed Barr for “documents and materials related Special Counsel Robert Mueller’s investigation, including all counterintelligence and foreign intelligence materials produced during the Special Counsel’s investigation, the full unredacted report, and the underlying evidence”.

According to a statement from Schiff’s office, the justice department must produce the documents by 15 May. The Senate intelligence committee, meanwhile, has subpoenaed Donald Trump Jr, two people familiar with the matter told the Associated Press. The panel is calling in the president’s son to answer questions about his 2017 testimony to the panel as part of its investigation into Russian election interference. It is the first known subpoena of a member of Donald Trump‘s immediate family, and a new sign that the Senate panel is continuing with its own Russia investigation even after the release of Mueller’s report on the same subject.

Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University and represented the House of Representatives in its successful challenge to executive actions under the Affordable Care Act..

• Democrats Showing Contempt By Holding William Barr In Contempt (Turley)

The House Judiciary Committee is voting to hold Attorney General William Barr in contempt of Congress and to secure a vote of the entire House of Representatives in order to send the matter to federal court. The problem is that the contempt action against Barr is long on action and short on contempt. Indeed, with a superficial charge, the House could seriously undermine its credibility in the ongoing conflicts with the White House. Congress is right on a number of complaints against the White House, including possible cases of contempt, but this is not one of them. As someone who has represented the House of Representatives, my concern is that this one violates a legal version of the Hippocratic oath to “first do no harm.”

This could do great harm, not to Barr, but to the House. It is the weakest possible case to bring against the administration, and likely to be an example of a bad case making bad law for the House. House Judiciary Chairman Jerrold Nadler laid out the case for contempt. He raised three often repeated complaints against Barr in that he failed to release an unredacted report by special counsel Robert Mueller, allegedly lied twice to Congress, and refused to appear before the committee. Yet, notably, the only claim the committee seeks to put before a federal court is the redaction of the report. That seems rather curious since, if Barr lied or refused a subpoena as House leaders claim, it normally would be an easy case of contempt. The reason for this move is that House Democrats know both claims would not withstand even a cursory judicial review.

David Schoen is a civil rights and criminal defense lawyer.

• Democrats Know Mueller Can’t Discuss His Report (Schoen)

When Mueller accepted his appointment as special counsel, he did so fully aware of the federal regulations governing his office. The regulations make it absolutely clear that the special counsel is prohibited from discussing his report publicly. Leading members of Congress now demanding that Mueller testify know he is barred from doing so. The current special counsel regulations were passed while they were members of Congress. In 1978, Congress passed the Ethics in Government Act. It created a process for appointing special prosecutors. This is a different position from special counsels like Mueller. Under the 1978 law, Congress could mandate the appointment of a special prosecutor. Congress could remove the special prosecutor, and the special prosecutor was required to report to Congress. The executive and legislative branches were both a direct part of the process.

However, the law on special prosecutors expired and it was not renewed. In 1999, the special counsel regulations under which Mueller was appointed became law and remain in effect today. These regulations were written and heavily promoted by President Bill Clinton’s administration. They changed the 1978 law in several important ways. Under the current regulations, the special counsel does not report to Congress. Congress cannot require the appointment or removal of a special counsel. These powers and duties lie exclusively with the attorney general. Section 600.9 of the special counsel regulations backed by the Clinton administration places very limited requirements on the attorney general in regard to what he needs to provide to Congress, and he has already exceeded these requirements.

“A strategy of insulting the executioner right before he swings his ax is an odd one but, then, Comey has a long record of odd decisions and questionable judgment.”

• James Comey Is In Trouble And He Knows It (Hill)

James Comey’s planet is getting noticeably warmer. Attorney General William Barr’s emissions are the suspected cause. Barr has made plain that he intends to examine carefully how and why Comey, as FBI director, decided that the bureau should investigate two presidential campaigns and if, in so doing, any rules or laws were broken. In light of this, the fired former FBI director apparently has decided that photos of him on Twitter standing amid tall trees and in the middle of empty country roads, acting all metaphysical, is no longer a sufficient strategy. No, Comey has realized, probably too late, that he has to try to counter, more directly, the narrative being set by the unsparing attorney general whose words in front of the Senate Judiciary Committee last week landed in the Trump-opposition world like holy water on Linda Blair. Shrieking heads haven’t stopped spinning since.

And so we’ve seen Comey get real busy lately. First he penned a curious op-ed in The New York Times. Then a Times reporter, with whom Comey has cooperated in the past, wrote a news article exposing an early, controversial investigative technique against the Trump campaign in an attempt to get out front and excuse it. Next, Comey is scheduled to be encouraged on a friendly cable news “town hall.” In the op-ed, Comey trotted out his now-familiar St. James schtick, freely pronouncing on the morality of others. He sees himself as a kind of Pontiff-of-the-Potomac working his beads, but comes across more like an unraveling Captain Queeg working his ball bearings. Comey adjudged the president as “amoral.” He declared the attorney general to be “formidable” but “lacking inner strength” unlike — the inference is clear — Comey himself. A strategy of insulting the executioner right before he swings his ax is an odd one but, then, Comey has a long record of odd decisions and questionable judgment.

[From 2008 to 2016] “the number of Chinese companies issuing bonds soared from just 68 to a peak of 1,451..”

• Time to Start Worrying About Global Corporate Debt – Bank of England (DQ)

By 2016, emerging market corporations were issuing ten times more money ($711 billion) than before, much of it in hard foreign currencies (mainly euros, dollars and yen) that will prove much harder to pay back if their local currency slides, as is happening in Turkey and Argentina right now. Although bond issuance by emerging market companies declined by 29% in 2017 and remained around the same level in 2018, it is still approximately 7.5 times higher than the pre-crisis level. Much of the increase has been driven by China as it transitioned from a negligible level of issuance of corporate debt prior to the 2008 crisis to a record issuance amount of $590 billion in 2016.

During that time the number of Chinese companies issuing bonds soared from just 68 to a peak of 1,451 and the total amount of corporate debt in China exploded from $4 trillion to almost $17 trillion, according to BIS data. By late 2018 it had reached $19.7 trillion. “There has been a persistent buildup of private debt to record levels in China,” Cunliffe said. Much of this increase took place in the direct aftermath of the financial crisis. The largest increases have been in the corporate sector, mainly in state-owned enterprises. At last count, China’s corporate debt-to-GDP ratio was 153%, enough to earn it seventh place on WOLF STREET’s leaderboard of countries with the most monstrous corporate debt pileups (as a proportion of GDP), 18 places above the US. This chart compares the rise of non-financial corporate debt in China and the US:

“Why would investors expect the euro to appreciate? [..] such a scenario is highly implausible.”

• Greek Bonds Yield Less Than Treasurys – As Irrational As In 2007 (Ashoka Mody)

Yields on five-year Greek government bonds are lower than those of U.S. Treasurys — and have been this way for the past month. Yes, on 3- and 5-year bonds, Greece, with its rating deep in junk territory, pays investors less than the double-A-plus-rated U.S. government does. Italian, Portuguese, Spanish and French government bonds — also lower-rated than the U.S. — offer lower, indeed considerably lower, yields than the U.S. government does, even for 10-year maturities. Even if we stipulate that Greece’s government is, in fact, as creditworthy as the U.S. government, why would investors accept a lower yield on the Greek bond? And why are they willing to accept the even lower yields on the bonds of other eurozone governments?

One possible reason is that they expect the euro to appreciate. Despite the low eurozone bond yields, investors may expect eventually to boost their returns by selling the expensive euros and buying cheaper dollars and other currencies. Indeed, there is some basis for such a strategy. As of late April, the consensus among analysts was that the euro will appreciate significantly over the next couple of years, and more modestly thereafter; forward markets (where buyers and sellers settle the price of a future transaction in advance) support this consensus view.

But if expectations of an appreciating euro solve the low-bond-yield puzzle, they raise another, deeper puzzle. Why would investors expect the euro to appreciate? [..] such a scenario is highly implausible. Current growth forecasts point worryingly in the opposite direction. The IMF projects world economic growth to slow more markedly than it already did a year ago. Crucially, of all major economies, those in the eurozone appear to be decelerating particularly quickly.

Fish farms kill.

• Have We Reached The End Of Wild? (G.)

In salmon’s case, we have interrupted one of the most dramatic cycles of nature, the wild fish’s journey from the rivers where they spawn to the oceans where they grow and back again. The result is that fish have died, species that eat them have died, communities that depend on them have faded, the food supply has been polluted and a lot of tax dollars have been wasted. [..] In an inspired gambit, Artifishal takes a swerve into the metaphyscial, framing the salmon emergency as a question about the human soul, about what it needs – about what we need – to survive.

The contention of the film-makers is that while it may be human nature to seek dominion and control over the rest of nature, the very thing we need to survive is precisely that which defies our control, that thing which, when we seek to subjugate it, instead either slips through our nets, or is caught and dies. If we drive the wild to extinction, the film suggests, we will bring our own that much closer. “I really hope the film leaves the viewer with this disquieting question, which is, have we reached the end of wild?” said Murphy in a phone conversation near the end of a tour to promote the movie, which debuted at the Tribeca film festival after a tour of screenings in Patagonia stores. “At the outset we kept wondering if we would find a bad guy. And we didn’t. In fact, I kept feeling that the force of antagonism was us – we’re the bad guy. Because humans just are always looking out for themselves.”

More damage from renewables. There’s no free lunch. The sooner we get that straight, the better.

• Only A Third Of World’s Great Rivers Remain Free Flowing (G.)

Only a third of the world’s great rivers remain free flowing, due to the impact of dams that are drastically reducing the benefits healthy rivers provide people and nature, according to a global analysis. Billions of people rely on rivers for water, food and irrigation, but from the Danube to the Yangtze most large rivers are fragmented and degraded. Untouched rivers are largely confined to remote places such as the Arctic and Amazonia. The assessment, the first to tackle the subject on a worldwide level, examined 12m kilometres of rivers and found that just 90 of the 246 rivers more than 1,000km (621 miles) long flowed without interruption.

The scientists, whose research, published in the journal Nature, was led by Günther Grill, at McGill University in Canada, were particularly concerned to discover that only a quarter of long rivers that once flowed freely to the sea, rather than to an inland lake or other river, still had such a course. Separate research in Britain, which included the effects of smaller infrastructure such as weirs, fords and culverts, suggests that 97% of the nation’s river network has been interrupted by human-built structures. Thriving wildlife in rivers is crucial to keeping water clean but freshwater habitats were found to be the hardest hit of all the ecosystems, with wildlife populations having plunged by an average of 83% since 1970 due to dams, overuse of water and pollution.

Great rivers that flow freely are now rare in populated areas. Heavily fragmented rivers include the Danube, Nile, and Euphrates, the Paraná and Missouri in the Americas, the Yangtze and Brahmaputra in Asia, and the Darling in Australia. The Congo and Amazon were found to be among the least affected. The biggest impact comes from physical barriers created by dams, but reservoirs also seriously affect the natural seasonal flow of rivers. “It can be really freaky sometimes, when the electricity is produced one hour on, one hour off, and the river goes up and down by a metre, which is very stressful to the ecosystems downstream,” said Grill. The study estimates that there are about 60,000 large dams worldwide and 3,700 in planning or construction, in addition to millions of smaller dams.

A cheap way to get young votes. Don’t fall for it. Thes countries fail even their Paris commitments.

• Proposal To Spend 25% Of EU Budget On Climate Change (BBC)

Eight European countries have called for an ambitious strategy to tackle climate change – and to spend a quarter of the entire EU budget on fighting it. The joint statement says the EU should have net-zero greenhouse gas emissions by 2050 “at the latest”. It was signed by France, Belgium, Denmark, Luxemburg, Netherlands, Portugal, Spain, and Sweden. The group says their plan can “go hand in hand with prosperity” and “set an example for other countries to follow.” The position paper comes ahead of a major summit of European leaders in the Romanian city of Sibiu, beginning on Thursday, which will discuss the future of Europe and the EU’s strategy for the next five years. But not everyone is on board – there are 28 countries in the EU, and several of those absent from the joint position statement are significant players – including Germany.

The position of the eight countries is that climate change has “profound implications for the future of humanity” and that its impacts are already apparent – citing “the heat waves and scorching fires of last summer”. [..] “The EU budget currently under negotiation will be an important tool in this respect: at least 25% of the spending should go to projects aimed at fighting against climate change,” the paper said. Annual EU budgets have spending limits set by what is known as the multiannual financial framework (MFF). The current one allowed the EU to spend more than €900bn between 2014-2020. The eight-nation group is eyeing the next framework, which is set to cover 2021-2027. [..] At the moment, EU countries are required to cut greenhouse gas emissions by 20% from their 1990 levels by 2020, with the aim of raising that to a 40% reduction by 2030. But many are set to miss these targets – some by a wide margin.

John Bolton Won’t Play in the World Cup

Jun 292018

June 29, 2018 Posted by Raúl Ilargi Meijer at 1:19 pm Finance Tagged with: Assad, Bolton, defense, Europe, Helsinki, Moscow, NATO, neocons, Putin, Syria, Trump, World Cup 5 Responses »

René Magritte Mysteries of the horizon (a.k.a. The Masterpiece) 1955

Don’t know if you noticed, but the Trump-Putin summit in Helsinki on July 16 takes place one day after the soccer World Cup final, Sunday July 15. Now it seems clear that Trump doesn’t care about soccer, though he apparently knows Christiano Ronaldo, but that factoid is significant because the World Cup takes place in Russia.

It’s amusing to contemplate that Putin told Trump’s people he would love to meet with his counterpart, but not until after the Cup Final. So they settled on the very next day.

The same people who now express worries about the summit, also had worries about the nasty things that could happen to players and supporters in Moscow and other cities. There has not been one single incident. No police violence, no hooliganism, the stadiums are beautiful, the organization is pitch perfect. There’s been only sunshine, too.

The only problem reported in the media was that some cities ran out of beer, because the Russians hadn’t expected the Aussies and British to drink as much of the stuff as Russians themselves do. They probably didn’t expect them to show up in such large numbers either. But those Russians don’t see a real problem: “we always have enough vodka”.

Patrick Lang called the fact that Trump sent uber-neocon John Bolton to Moscow to organize the summit a stroke of genius. The man who wants WWIII more than anyone must now make sure a summit that may serve to prevent it, successful. But what does Trump really want? And what do the neo-cons want?

First off, US and Russian presidents should meet all the time. It’s beyond reason that Trump has been in the saddle almost a year and a half without such a summit. Trumped up allegations of election meddling in about half the nations on the planet, about poisonings in Britain and about chemical weapons in Syria, have prevented a summit so far.

It looks like Trump got tired of all that. But of course all we’ll see the next two+ weeks is more ‘Trump is Putin’s lapdog’ memes. While there are very serious issues to be discussed. A major one, undoubtedly, is Syria. There has been a lot of movement politically on that.

The US has indicated it will no longer support the Syrian rebels. It has acknowledged that regime change, and removal of Assad, is not going to happen. Because Russia will not leave Assad to fend for himself.

There are signs that another false flag chemical attack in the country is being prepared, but if that happens before July 16, Trump himself will jump in to condemn the nonsense. He wants the meeting, and he wants it bad. As he should, and not for some nefarious reason.

Regime change in Syria is off the calendar because of Putin. Regime change in Iran, apparently still on that calendar, will also fail because while Putin may -but just may- be willing to give in, China will not. And not even a Saudi-US-UAE-Israel cabal can withstand both China AND Russia. Those days are over.

The neocons are way behind the action. They think in terms of something that has long since passed its best before date. Yeah, wonder how John Bolton sees these things these days. Maybe he had a crash course upon entering the White House.

But let’s not kid ourselves: the US warmonger faction may be outdated, they are still very powerful and very present. They can still attempt to force Trump’s hand with a false flag here or there. Their plans to conquer Russia, though, will have to be shelved for now. Or do they?

Tyler Durden has a lengthy report on the proposed spending in Europe by the US military. I won’t get into the details (tons of infrastructure spending close to Russian borders), but here’s the money shot:

The request for additional funding would more than double the military’s infrastructure projects under the European Deterrence Initiative (EDI), from the 2018 request, when just a few years ago, the Pentagon was scaling back its Cold War-era footprint in Europe. According to Defense News, the EDI request increased to $6.5 billion from $4.8 billion in 2018, military construction projects in the EDI request jumped from $338 million in 2018, while pre-positioning funds soared from $2.2 billion to $3.2 billion.

The Air Force would spend roughly $368.6 million to pre-position equipment and $363.8 million for military construction projects. While the spending is almost equal to what was expensed in fiscal 2018, it is a huge jump from 2017, when the Air Force was only allotted $31.2 million in pre-positioning funds and $85.4 million for military construction.

And I know what you’re thinking: didn’t Trump say not so long ago that he wanted Europe to pay more for its own defense? Well, yes, he did, but Europe is other wise engaged, it’s now planning its own ‘army’, which can’t NOT take away from its contributions to NATO.

So Trump meets Putin on July 16, who knows all of this and a boatload more, and what’s he going to tell him? When Putin asks him about these new US ‘investments’ in Europe, what’s he going to say?

Putin will state that Russia’s military expenditures have only fallen over the past decade+, and that he doesn’t understand why the US spends that much more, because Russia’s new weapons are decades ahead of America’s. (I don’t think he’s kidding).

Of course Putin knows better then anyone that his military spending takes place for a whole different purpose than that in the US: he builds a strong defense, while America feeds its private contractors arms industry as much taxpayers’ money as it can get away with. What did the Pentagon lose track of again, was that $21 trillion?

And of course Putin knows that to an extent Trump is trapped inside the military-industrial complex Ike warned about. And that John Bolton is such a docile and eager servant of.

One thing we can be sure of is that just like the World Cup, the summit won’t be a boring event, the media will be all over it, each with their own favorite, and over half the world will follow the ‘games’. And the outcome of Helsinki is as unpredictable as that of the final in Moscow. One more thing that’s for sure: the US won’t be in that final. Not even John Bolton.

Debt Rattle May 14 2018

May 142018

May 14, 2018 Posted by Raúl Ilargi Meijer at 8:56 am Finance Tagged with: Bolton, Brexit, buybacks, crash, Greece, Kim, M5S, media ban, pensions, refugees, sanctions, Trump, Xi 6 Responses »

Alfred Wertheimer Elvis 1956

• S&P 500 Should Be 1,000+ Points Lower Than Today – David Rosenberg (MW)

• Why I Think the Stock Market Cannot Crash in 2018 (WS)

• Italy’s Nascent Government Has Tough Economic Circles To Square (R.)

• US Threatens European Companies With Sanctions After Iran Deal Pullout (G.)

• May Faces Deadlock Over Brexit Customs Rules As Both Options Rubbished (Ind.)

• Shoppers Desert UK High Streets (G.)

• UK Metropolitan Police’s Facial Recognition Technology 98% Inaccurate (Ind.)

• UK To Host Summit On Why Six Other Countries Should Join The EU (Ind.)

• Xi Might Join Trump And Kim In Singapore (MS)

• Prosecutors Seek Complete Media Ban On Cardinal George Pell Trial (NM)

• Greek Pensions Under €1,000 Will Also Be Cut In 2019 (K.)

• Greece Considers Boosting Capacity Of Refugee Centers

“..there are some serious people out there saying some very serious things about the longevity of the cycle..”

• S&P 500 Should Be 1,000+ Points Lower Than Today – David Rosenberg (MW)

A reversion to the mean in U.S. stock prices could mean the market will fall by at least 20%, according to David Rosenberg of Gluskin Sheff and Associates, who gave his prediction at the Strategic Investment Conference 2018 in San Diego. Rosenberg, the chief economist and strategist at Toronto-based Gluskin Sheff, said this is one of the strangest securities-market rallies of all time. That’s because all asset classes have gone up, even ones that are inversely correlated. He thinks a breaking point is a year away, and so investors should start taking precautions now.

The beginning of this year started off great for investors. The S&P 500 Index hit record highs at around 2,750 points, and stocks had their best January since 1987. As if that was not enough, Rosenberg pointed out, many Wall Street strategists raised their target to 3,000. The media extrapolating record returns only added to the rise in investors’ unreasonable expectations. However, increasingly more hedge fund managers and billionaire investors who timed the previous crashes are backing out.

One of them is Sam Zell, a billionaire real estate investor, whom Rosenberg says is a “hero” of his. Zell predicted the 2008 financial crisis, eight months early. But, essentially, he was right. Today, his view is that valuations are at record highs. Then we have Howard Marks, a billionaire American investor who is the co-founder and co-chairman of Oaktree Capital Management. He seconds Zell’s view that valuations are unreasonably high and says the easy money has been made. “And I don’t always try to seek out corroborating evidence. But there are some serious people out there saying some very serious things about the longevity of the cycle,” said Rosenberg.

According to Rosenberg’s calculations, the S&P 500 should be at least 1,000 points lower than it is today based on economic growth. In spite of this, equity valuations sit at record highs. Another historically accurate indicator that predicts the end of bull cycles is household net worth’s share of personal disposable income. As you can see in the chart below, the last two peaks in this ratio almost perfectly coincided with the dot-com crash and the 2008 financial crisis.

There is no market.

• Why I Think the Stock Market Cannot Crash in 2018 (WS)

The 85% of S&P 500 companies that have reported earnings so far disclosed they’d bought back $158 billion of their own shares in Q1, according to the Wall Street Journal. The quarterly record of $164 billion was set in Q1 2016. If the current rate applies to all S&P 500 companies, they repurchased over $180 billion of their own shares in Q1, thus setting a new record. At this trend, including a couple of slower quarters, S&P 500 companies are likely to buy back between $650 billion and $700 billion of their owns shares in 2018. This would handily beat the prior annual record of $572 billion in 2007.

Here are the top buyback spenders in Q1: Apple: $22.8 billion, Amgen: $10.7 billion, Bank of America: $4.9 billion, JPMorgan Chase: $4.7 billion, Oracle: $4 billion, Microsoft: $3.8 billion, Phillips 66: $3.5 billion, Wells Fargo: $3.34 billion, Boeing: $3 billion, Citigroup: $2.9 billion. Buybacks pump up share prices in several ways. One is the pandemic hype and media razzmatazz around the announcements which cause investors and algos to pile into those shares and create buying pressure. Since May 1, when Apple announced mega-buybacks of $100 billion in the future, its shares have surged 11%. The magic words.

Other companies with big share buyback programs have also fared well: Microsoft shares are up 14% year-to-date. And if buybacks don’t push up shares, at least they keep them from falling: Amgen shares are flat year-to-date. Shares of the 20 biggest buyback spenders in Q1 are up over 5% on average year-to-date, according to the Wall Street Journal, though the S&P 500 has edged up only 2%.

Basic income AND a parallel currency. How can this fit inside the eurozone?

• Italy’s Nascent Government Has Tough Economic Circles To Square (R.)

The Italian coalition taking shape 10 weeks after March’s inconclusive election has made economic promises that seem incompatible with Europe’s fiscal rules and will be hard, if not impossible, to keep. These include slashing taxes for companies and individuals, boosting welfare provision, cancelling a scheduled increase in sales tax and dismantling a 2011 pension reform which sharply raised the retirement age.The marriage being sealed between the anti-establishment 5-Star Movement and the far-right League was seen as an unlikely and worrying prospect by most analysts before the March 4 election ended in a hung parliament.

The pre-election adversaries have spent the last few days trying to fuse their very different programs into a “contract” of mutually acceptable policy commitments. What they have in common is that they are extremely expensive. On the face of it their plans, which they say may also include a form of parallel currency, could push the budget deficit far above targets agreed with the EU, setting up a clash with the European Commission and Italy’s partners. “We will need to renegotiate EU agreements to stop Italy suffocating,” League leader Matteo Salvini said on Saturday after a day of talks with his 5-Star counterpart Luigi Di Maio.

5-Star’s flagship policy of a universal income for the poor has been costed at around 17 billion euros ($20 billion) per year. The League’s hallmark scheme, a flat tax rate of 15 percent for companies and individuals, is estimated to reduce tax revenues by 80 billion euros per year. Scrapping the unpopular pension reform would cost 15 billion euros, another 12.5 billion is needed to head off the planned hike in sales tax, and the parties are also considering printing a new, special-purpose currency to pay off state debts to firms. “If implemented, it would be the biggest shake-up of the Italian economic system in modern times,” said Wolfgang Munchau, head of the London-based Eurointelligence think-tank.

[..] olfango Piccoli, co-president of Teneo Intelligence, said taking on Brussels would be popular with Italian voters, and the new government had little to fear from a European Commission which “is very weak and on its way out”. The Commission, with just a year of its term remaining, “can’t really do much other than put Italy’s finances under greater scrutiny, and markets don’t care about that”, he said.

Bolton.

• US Threatens European Companies With Sanctions After Iran Deal Pullout (G.)

Donald Trump is prepared to impose sanctions on European companies that do business in Iran following his withdrawal of the US from the international nuclear deal, his administration reiterated on Sunday. Trump’s most senior foreign policy aides signalled that the US would continue pressuring allies to follow Washington in backing out of the pact, which gave Tehran relief from sanctions in exchange for halting its nuclear programme. John Bolton, Trump’s national security adviser, predicted that “the Europeans will see that it’s in their interests to come along with us” rather than continue with the 2015 deal, under which major European corporations have signed billions of dollars of contracts in Iran.

Asked on CNN’s State of the Union whether that meant the Trump administration would impose sanctions against those firms, Bolton said: “It’s possible. It depends on the conduct of other governments.” US sanctions on Iran reimposed following Trump’s withdrawal not only block American firms from doing business in the country, but also bar foreign firms that do business there from accessing the entire US banking and financial system. Mike Pompeo, Trump’s secretary of state, said on Sunday wealth created in Iran under the terms of the nuclear deal “drove Iranian malign activity” in the region. He declined to rule out sanctions against European firms. “The sanctions regime that is in place now is very clear on what the requirements are,” Pompeo said on Fox News Sunday.

Britain better get rid of her.

• May Faces Deadlock Over Brexit Customs Rules As Both Options Rubbished (Ind.)

Theresa May faces deadlock over the key controversy of customs rules after Brexit, after senior politicians rubbished both of the options being studied by her warring cabinet. Michael Gove – picked by the prime minister to examine her preferred “customs partnership” model – warned there were “significant question marks over the deliverability of it”. Meanwhile, the Irish deputy prime minister insisted Dublin would block a Brexit withdrawal agreement if she pursued an alternative technology-based solution, saying: “It won’t work.” The warnings left Ms May with few apparent options to resolve the impasse, with a deadline set by the EU just six weeks away.

Two working groups of key ministers have been set up to study both the customs partnership – under which the UK would collect tariffs on behalf the EU – and the tech-based “max-fac” proposal. Mr Gove, the environment secretary, speaking on the BBC’s The Andrew Marr Show, declined to back Boris Johnson’s description of the partnership model as “crazy”. But he said: “Boris pointed out that because it’s novel, because no model like this exists, there have to be significant question marks over the deliverability of it on time.” Crucially, Mr Gove also suggested the proposal would break Ms May’s key promise – stated again today – to ‘take back control” of borders and laws.

“What the customs partnership requires the British government to do is in effect to act as the tax collector and very possibly the effective deliverer of regulation for the European Union,” he claimed. A proposal to seek EU agreement to keep the UK in the single market and customs union past the end of 2020, while a solution is found, was also stamped on by Mr Gove. “I don’t believe in an extension,” he said – arguing it was “critical to meet that deadline” of ending the post-Brexit transition period after 21 months.

Slowly, people are starting to get very afraid of Brexit.

• Shoppers Desert UK High Streets (G.)

Shoppers are deserting the high street in greater numbers than during the depths of the recession in 2009, creating a brutal climate that is putting thousands more retail jobs at risk. The coming days will be crucial to the future of a handful of household names, including Mothercare and Carpetright, which are trying to persuade investors to make vital cash injections so they can jettison unwanted stores. There is also the spectre of job losses at Poundworld, the struggling discount chain, which is being cut adrift by its American owners. Dwindling shopper numbers tally with weak spending figures for April, which show Britons slashed spending on gadgets, furniture and even nights out.

Consumer spending dropped 2% last month, according to Visa’s consumer spending index, which has recorded declines in 11 of the past 12 months. “With inflation beginning to fall and wages growing faster than expected in recent months, it would have been easy to assume we might be over the worst of the consumer squeeze,” Mark Antipof, the chief commercial officer at Visa, said. “Yet there has been no corresponding improvement in spending. It is clear that consumers remain in belt-tightening mode.” High street visits declined 3.3% in April, according to the BRC-Springboard monthly tracker, which also highlighted nearly one in 10 town centre shops are lying empty.

The drop in footfall came on the back of a disastrous performance in March, when shopper numbers declined by 6%. Taken together there has been an unprecedented 4.8% drop over the two months – a bigger decline than was recorded in the same months of 2009 when the UK was mired in recession. “Not since the depths of recession in 2009 has footfall over March and April declined to such a degree, and even then the drop was less severe at -3.8%,” said the Springboard analyst Diane Wehrle. “Much could be made of the adverse impact on April’s footfall of Easter shifting to March but even looking at March and April together still demonstrates that footfall has plummeted.”

Priceless.

• UK Metropolitan Police’s Facial Recognition Technology 98% Inaccurate (Ind.)

Facial recognition software used by the UK’s biggest police force has returned false positives in more than 98 per cent of alerts generated, The Independent can reveal, with the country’s biometrics regulator calling it “not yet fit for use”. The Metropolitan Police’s system has produced 104 alerts of which only two were later confirmed to be positive matches, a freedom of information request showed. In its response the force said it did not consider the inaccurate matches “false positives” because alerts were checked a second time after they occurred. Facial recognition technology scans people in a video feed and compares their images to pictures stored in a reference library or watch list. It has been used at large events like the Notting Hill Carnival and a Six Nations Rugby match.

The system used by another force, South Wales Police, has returned more than 2,400 false positives in 15 deployments since June 2017. The vast majority of those came during that month’s Uefa Champion’s League final in Cardiff, and overall only 234 alerts – fewer than 10 per cent – were correct matches. Both forces are trialling the software. The UK’s biometrics commissioner, Professor Paul Wiles, told The Independent that legislation to govern the technology was “urgently needed”. He said: “I have told both police forces that I consider such trials are only acceptable to fill gaps in knowledge and if the results of the trials are published and externally peer-reviewed. We ought to wait for the final report, but I am not surprised to hear that accuracy rates so far have been low as clearly the technology is not yet fit for use.

Irony is dead.

• UK To Host Summit On Why Six Other Countries Should Join The EU (Ind.)

The British government will host a summit encouraging six European countries to join the EU for the sake of their “security, stability and prosperity”, months before it is due to sign its own Brexit withdrawal deal with Brussels. London will in July play host to Western Balkans governments including Serbia and Albania, as well as existing EU member states, to discuss reforms to pave the way to future EU enlargement. The summit is part of the so-called Berlin Process – a series of meetings aimed at supporting the region towards joining the bloc and described by the European parliament’s research arm as “bringing a new perspective and impetus to the enlargement process”.

Critics said the UK government must have “a sense of humour” for hosting a conference on EU enlargement and extolling the benefits of accession as Britain itself headed towards the exit door. The leaders of EU candidate countries Albania, Montenegro, Macedonia, and Serbia will attend, as well as those of Bosnia and Herzegovina, and Kosovo – two states who have both expressed an interest in joining the bloc but have not yet been accepted as candidates. They will be joined by representatives of the governments of EU countries with an interest in the region such as Austria, Croatia, France, Germany, Italy, Poland, Slovenia and Bulgaria.

Makes sense.

• Xi Might Join Trump And Kim In Singapore (MS)

The prospect of China’s president Xi Jinping coming to Singapore on June 12, 2018 to meet with United States President Donald Trump and North Korea leader Kim Jong-un has been raised. This is according to mainstream media reports in Singapore on May 11, which re-reported a Japanese newspaper, Mainichi Shimbun, that cited American diplomatic sources. In the Friday report, Mainichi Shimbun quoted a senior international negotiator with the National Security Council saying that “there is a possibility” the leader of a third country may take part. It is understood that this leader is Xi. The suggestion that the three leaders will descend upon Singapore at the same time is not without merit.

On Tuesday, May 8, Trump spoke to Xi about Kim’s recent visit to China. The Chinese president and North Korean leader met Monday and Tuesday, May 7 and 8, in China again in a second meeting. This meeting followed Kim’s first visit to Beijing in March. However, as of Friday morning, there were no news reports on North Korean media outlets of the date and venue of Kim’s meeting with Trump, Japanese broadcaster NHK reported. Previously, Kim and South Korean president Moon Jae-in issued a joint declaration to say that both sides aim to realise complete denuclearisation for a nuclear-free Korean Peninsula, at the historic inter-Korea summit on April 27. They also agreed to pursue three-way talks involving the two Koreas and the US, or four-way talks involving the two Koreas, the US and China.

People no longer have a right to know?

• Prosecutors Seek Complete Media Ban On Cardinal George Pell Trial (NM)

On Friday, the Victorian Department of Public Prosecutions lodged an application with the Country Court of Victoria for a ‘super injunction’ against media coverage of the trial of Cardinal George Pell, who is accused of a number of historical sexual offences. Cardinal Pell – the Vatican’s treasurer and the third highest ranked Catholic in the world – was committed to stand trial a fortnight ago. The orders being sought by the DPP, which will be decided on Wednesday morning in the County Court in Melbourne before Chief Judge Peter Kidd, are:

(1) Publication is prohibited of any report of the whole or any part of these proceedings and any information derived from this proceeding and any court documents associated with this proceeding. (2) The prohibition on publication applies within all States and Territories of Australia and on any website or other electronic or broadcast format accessible within Australia. (3) For the purpose of this order, ‘publication’ has the meaning attributed to it by s3 of the Open Courts Act, that is to say, it means the dissemination or provision of access to the public by any means including, publication in a book, newspaper, magazine or other written publication, or broadcast by radio or television; or public exhibition; or broadcast or electronic communication. (4) The order will expire upon a jury verdict in respect of the charges on the final indictment, or by further order of the court.

Ordinarily, an injunction against media reporting of a trial prevents outlets from reporting the details of the trial. But they can report the existence of the injunction and explain to readers why they’re not reporting the matter. The order that the DPP is seeking in the Pell matter is so broad that it will operate as a super injunction. The suppression order would be ‘any part of’ the proceedings, meaning the trial could not be reported, nor could media report the fact they’re not allowed to report. If Wednesday’s application for a super injunction is successful, this story will have to be removed from publication. [..] Cardinal Pell, aged 76, is the most senior Catholic charged with sexual offences anywhere in the world. Cardinal Pell has strongly denied the allegations levelled against him.

We’re on a road to nowhere..

• Greek Pensions Under €1,000 Will Also Be Cut In 2019 (K.)

The planned pension cuts for people who have already retired and which will be implemented as of January 2019 will also affect pensions under 1,000 euros, Deputy Minister for Social Security Tasos Petropoulos admitted on Sunday. “In October we will see the exact cuts in pensions […] and will improve them,” he told broadcaster Skai. “We have seven months ahead.” Petropoulos said the 18 percent cut in pensions includes benefits, and estimated that about 25-30 percent of pensioners will be affected by the new reductions. He also pledged to pay all pending main pensions by August, “except in some particular cases.”

Now Turkish citizens fleeing Erdogan are added.

• Greece Considers Boosting Capacity Of Refugee Centers

The Migration Policy Ministry is reportedly considering increasing the capacity of existing refugee and migrant centers on the mainland as a first step in managing a recent spike in arrivals from neighboring Turkey, in a plan ministry sources say the European Union agrees with. “Practically, this means tents will be set up between the containers, exacerbating the already difficult situation for the residents,” a nongovernmental organization official said. Increasing capacity also means that the current logistics involved in running the camps will have to be adjusted. For example, if daily food costs are €3.50 per person per day (according to the specifications cited in official announcements), an additional 16,478 additional refugees will mean an extra €57,673 per day.

According to official data, 6,632 refugees crossed into Greece in April alone and 16,478 people in the first five months of the year, of whom 9,375 arrived on the islands and 7,103 from the Evros border in northeastern Greece. The government is also hoping to reduce arrivals and overcrowding on the islands by investing in diplomacy with Turkey and speeding up the asylum process through a bill which is being discussed in Parliament. At the same time, the reactions of residents on the islands that have borne the brunt of migration, even if they do not reflect the views of the entire population, show their patience is wearing thin. Authorities have also recorded increased arrivals of Turkish nationals from Evros. About 30 Turks have been arriving on a daily basis since Turkish President Recep Tayyip Erdogan called elections for next month, versus zero arrivals previously.

Hot War and Cold Markets

Apr 122018

April 12, 2018 Posted by Raúl Ilargi Meijer at 1:09 pm Finance Tagged with: bitcoin, Blair, Bolton, China, gold, Lincoln, markets, McCain, PBOC, Russia, stocks, Syria, Trump, Xi 7 Responses »

Pieter Bruegel the Elder The Triumph of Death c1562

This is turning into a comedy. A black comedy, for sure, but still. As both the Skripal novichok ‘poisoning’ case in Britain and the ‘chemical attack’ in Douma, Syria fall flat on their faces on a total and absolute lack of evidence, it’s becoming clear that western ‘authorities’ are not at all planning to let go of the privilege that in times gone by allowed them to claim whatever they wanted and demand to be believed.

And despite the insane amounts of spying that underlies their business models and will lead to their demise(s), here is where social media do play a decisive role. See, if you’re an ‘authority’, there’s nothing you would rather do than to close down those social media that let people spread news that contradicts and/or doubts what you just said, and undermines that privilege. But that also would mean you can’t spy on them anymore through social media. A toss-up?!

Whatever the outcome will be, it’s obvious that Donald Trump is having war talks with his military and closest advisers. And they can basically tell him anything, he’s not a military man. Which is fine, Lincoln wasn’t either. But it does mean he’s vulnerable to narratives and briefings that are simply not true. Lincoln went to great lengths to surround himself with people who could trust.

What about Trump? Does he know that, as Paul Craig Roberts said on Twitter yesterday ..

The Russians know that they can, at will within a few minutes, sink the entire US fleet, destroy every US airplane & ship in the ME & within range of the ME, completely destroy all of Israel’s military capability & wipe out the military of the two-bit punk state of Saudi Arabia.

.. or do they keep that from him? Because if he did know, why have this entire circus going on? Why did the King of Twitter yesterday threaten with his new and shiny toys and then today switch to:

Never said when an attack on Syria would take place. Could be very soon or not so soon at all! In any event, the United States, under my Administration, has done a great job of ridding the region of ISIS. Where is our “Thank you America?”

We already knew that US military won’t be ready for another 10 days or so for an attack on Syrian targets. So that makes sense. It takes the surprise factor out of the game, but nobody seems to want to surprise anyone much anyway. Syrian and Russian military are already way out of the way, and left the most decrepit infrastructure behind for the coalition of the willing (no Germany, Canada) to waste their firepower on.

But does Trump really want to start shooting anything? Certainly only if he knows he will win. And that, he doesn’t. And there’s something else. he’s not only talking to his military people, he’s got a financial/economic team as well. What will the financial effects of a military action be? That might give him some pause. And his military guys can’t fill him in on that.

Can Trump risk imploding the ‘markets’? They’re not actually markets anymore, and that makes them much less predictable.

As Bill Holter says talking to Greg Hunter:

It’s Pure Math – We’re Headed for a Train Wreck

Holter also points out the explosion of global debt. Holter charges, “It’s now $237 trillion. The amount of debt grew by $21 trillion globally over the last 12 months. That’s roughly 10 %. How much did global GDP grow? 2% or 3%, I mean that is totally unsustainable.” The biggest worry for Holter right now is escalating military action in Syria. Holter warns, “This is so, so dangerous. Obviously, you worry about a hot war because with the weapons you have today, you could have WWIII start in a heartbeat. But look at the market today. It’s up 400 or 500 points. You have talk of trade wars. You have talk of hot wars. It’s amazing the markets can hold together and ignore potential annihilation.”

David Stockman has something very similar:

The Deep State Closes In On The Donald, Part 1

Yes, maybe Wall Street has figured out that the Donald is more bluster than bite. Yet when you consider the broader context and what the Russian side is now saying, it is just plain idiotic to own the S&P 500 at 24X. After all, earnings that have been going nowhere for the past three years (earnings per share have inched-up from $106 in September 2014 to $109 in December 2017), and now could be ambushed by a hot war accident in Syria that would rapidly escalate.

Indeed, did the robo-machines and boys and girls down in the casino not ponder the meaning of this message from the Kremlin? It does not leave much to the imagination: #Russian ambassador in Beirut : “If there is a strike by the Americans on #Syria , then… the missiles will be downed and even the sources from which the missiles were fired..”

Trump would be much more likely to fire away if he thought he would win. And even then. Even if he could win, the whole situation is replete with unknown unknowns. If god forbid the thing escalates and the US and Russia end up facing each other, what will China do? Don’t forget that Beijing and the PBOC play an instrumental part in propping up the world economy, and the S&P 500.

It wouldn’t be hard for Xi to pull that carpet out from under Trump’s feet; it would be costly for China too, but if war were the reality, the rules and priorities change. And you can bet Xi and his people have run through the kinds of scenarios many many times. They’re prepared to “withdraw upon themselves”.

As for the US, the ‘markets are holding on to crazy levels so far despite the threat that hangs in the air, but once the first rockets fly, and gold and bitcoin -oil?- are still available, why hold on to stocks?

It’s the insanity of the so-called markets that makes them so vulnerable and unpredictable. And starting a war on very shaky grounds increases that unpredictability by a factor of 10 or so. And the MSM may -well, there’s no doubt- still fill their role as cheerleaders the way they used to, but social media are a different story.

And besides, which investors are going to say, hell, I feel so patriotic, I’m going to hold on to stocks that have been onvervalued for years already, just to support Bolton and McCain and Tony Blair and Boris Johnson’s fantasies? Who would do that who understands that it is at least quite possible that Russia has the better weapons today? Or that perhaps this kind of conflict is simply not winnable anymore?!

I don’t think there’ll be many. Nor do I think Trump wants to be known as the man who collapsed the S&P 500. So, abandoned buildings in the desert it is. And lots of CNN. Anderson Cooper’s your MC.

Debt Rattle April 2 2018

Apr 022018

April 2, 2018 Posted by Raúl Ilargi Meijer at 9:58 am Finance Tagged with: Bolton, bubble, China, crypto, Facebook, gloom, Google, Middle East, psychopaths, retail, tariffs, warming 10 Responses »

John La Farge Girls Carrying a Canoe, Vaiala in Samoa 1891

• China Announces New Tariffs On 128 US Products (CNBC)

• The Real Bubble (ZH)

• Cryptocurrencies: Nothing Goes To Heck In A Straight Line (WS)

• Easter Shoppers Desert UK High Streets, Spreading Retail Gloom (G.)

• Trouble For Big Tech As Consumers Sour On Amazon, Facebook And Co (G.)

• Google, Facebook Too Big To Be Governed, Could Be Dismantled – Macron (Ind.)

• The Middle East Is Doomed (Ehsani)

• This Is How We End Up With John Bolton (CJ)

• Two Degrees No Longer Seen As Global Warming Guardrail (AFP)

Feels like China’s just going through the motions.

• China Announces New Tariffs On 128 US Products (CNBC)

China is implementing new tariffs on meat, fruit and other products from the U.S. as retaliation for American duties, heightening fears of a potential trade war between the world’s two largest economies. Beijing’s latest move, announced by its finance ministry in a statement dated April 1, is direct retaliation against taxes approved by President Donald Trump on imported steel and aluminum. Chinese officials had been warning over the last few weeks that their country would take action against the U.S. The tariffs begin on Monday, the finance ministry statement said. China’s Customs Tariff Commission is increasing the tariff rate on pork products and aluminum scrap by 25 percent. It’s also imposing a new 15 percent tariff on 120 other imported U.S. commodities, from almonds to apples and berries.

All told, the extra tariffs will hit 128 kinds of U.S. products, multiple outlets reported. The list of new duties matches the proposed list released by the government on March 23, according to Reuters. At that time, China said the affected U.S. goods had an import value of $3 billion in 2017 and included wine, fresh fruit, dried fruit and nuts, steel pipes, modified ethanol and ginseng. The decision to target $3 billion in U.S. imports is significant, but it’s widely seen as a drop in the ocean given the size of the bilateral trading relationship. U.S. goods exported to China in 2016 totaled $115.6 billion, according to official data. China’s retaliation is “a statement of intent … but it’s not an escalation in our opinion,” Steve Brice, chief investment strategist at Standard Chartered Private Bank, told CNBC on Monday.

One of many, really.

• The Real Bubble (ZH)

After a seemingly unstoppable surge higher for years, March was a tough one for tech stocks, as the curtain was lifted exposing Oz-like machinations behind the scenes that spooked investors enough to pop the bubble of delusion so many were living in. After a magnificent 2017, Cryptocurrencies also started 2018 off poorly as yet another ‘bubble’ popped. However, there was one ‘asset’ that had a tremendous 2017, and has gone on to greater and bubblier things in 2018. Spot the real bubble in financial markets… Bitcoin has bust, FANG stocks are FUBAR, but The SNB is accelerating.

As we noted previously, The SNB made 32 times more than 85 Swiss private banks… and owns a record $100 billion-plus of American stocks… $11,589.01. – That’s the US dollar amount of American stocks the Swiss National Bank owns on behalf of every man, woman and child in Switzerland. Let that sink in. A Central Bank has taken on itself to expand its balance sheet and invest in the proceeds, not in gold, nor sovereign debt – heck not even in corporate bonds. Nope, the SNB has taken it upon itself to “invest” that money in another country’s most risky part of the capital structure – equity. And don’t think it’s a small number. It’s almost $100 billion US dollars.

In a strange twist of fate, the Swiss National Bank is not only Switzerland’s Central Bank, but also a publicly traded security. And that ‘security’ has had a great year so far – up a stunning 93%…

However, as Holger Zschaepitz notes, the market cap of the Swiss National Bank remains below CHF1bn amidst a profit of CHF54.4bn. But that didn’t stop investors piling in to The SNB in March as a ‘safe haven’ as the rest of the world collapsed… As Macro Tourist’s Kevin Muir concluded previously, I worry that right now, Central Banks are being rewarded for keeping their balance sheets as big and risky as they can stomach. It appears to be a trade with no cost, and in fact, helps out by both keeping their currency weak, and in the meantime, making some money. It encourages them to be extremely slow easing off the accelerator. The idiocy of Central Banks taking this sort of risk is beyond description, but no sense arguing about it – it is what it is.

65%.

• Cryptocurrencies: Nothing Goes To Heck In A Straight Line (WS)

I don’t think there has ever been an entire sector that skyrocketed as much and collapsed as quickly as the cryptocurrency space. The skyrocketing phase culminated at the turn of the year. Then the collapse phase set in, with different cryptos choosing different points in time. It doesn’t help that regulators around the world have caught on to these schemes called initial coin offerings (ICOs), where anyone, even the government of Venezuela, can try to sell homemade digital tokens to the gullible and take their “fiat” money from them and run away with it. There are now 1,596 cryptocurrencies and tokens out there, up from a handful a few years ago. And the gullible are getting cleaned out.

And it doesn’t help that the ways to promote these schemes are being closed off, one after the other. At the end of January, Facebook announced that, suddenly, “misleading or deceptive ads have no place on Facebook,” and it prohibited ads about ICOs and cryptos. On March 14, Google announced that it will block ads with “cryptocurrencies and related content,” including ICOs, cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice. Its crackdown begins in June. On March 26, Twitter announced that it would ban ads of ICOs, cryptocurrency exchanges, and cryptocurrency wallet services, unless they are by public companies traded on major stock markets. It will roll out its policy over the next 30 days.

On March 29, MailChimp, a major email mass-distribution service, announced that it will block email promos from businesses that are “involved in any aspect of the sale, transaction, exchange, storage, marketing or production of cryptocurrencies, virtual currencies, and any digital assets related to an Initial Coin Offering.” This broadened and tightened its policy announced in February that promised to shut down any account related to promos of ICOs or blockchain activity. The overall cryptocurrency space, in terms of market capitalization, peaked on January 4, when market cap reached $707 billion, according to CoinMarketCap. Less than three months later, market cap has now plunged by 65% to $245 billion. $462 billion went up in smoke.

It’s hard to accept that your entire country is pushing up daisies. But you got to sell your paper. So you get a real heavy headline, and then quote someone saying: “..the numbers were “generally pretty good news for retailers”..

• Easter Shoppers Desert UK High Streets, Spreading Retail Gloom (G.)

The gloom on Britain’s high streets deepened over the Easter bank holiday weekend as heavy rain in many areas drove people to seek the shelter of shopping centres or simply stay at home. The number of shoppers on UK high streets on Easter Sunday morning slumped by over 12% compared with 2017, according to retail intelligence firm Springboard. That followed a disappointing Good Friday, when high street footfall fell by 9.6%. Saturday was little better, with footfall down 6.9% year-on-year. This weekend had been billed as the most anticipated weekend for retail since Christmas, but Springboard said bad weather in some parts of the country had “definitely hit high streets”, and pulled the overall result for all UK shopping destinations down into minus figures.

A week ago Springboard predicted that this Easter weekend’s UK retail footfall could end up 2.4% higher than last year’s, though it had said this assumed “normal weather”. It added that if freezing conditions similar to those caused by the “beast from the east” returned, all bets were off. In the event wet weather sent a chill through the high streets, meaning footfall across all shopping destinations was down 2.4% on Good Friday and 3% lower on Saturday. However, retail parks and shopping centres typically enjoyed better fortunes than they did last year. Diane Wehrle, Springboard’s marketing and insights director, said the rain kept many people away from their local high street shops. But “at the same time, people did go shopping” rather than staying at home and browsing the web.

She said the numbers were “generally pretty good news for retailers”, many of whom would be quite heartened by the numbers of shoppers out on Good Friday and Holy Saturday. With predictions of snow in some parts of the country for Easter Monday, many retailers will be crossing their fingers and hoping that conditions are not too challenging. Last week it emerged that high street sales had slumped at the fastest rate for early spring in at least five years, as cold and snowy weather kept people away from the shops. Wehrle said of Easter Monday: “If it starts off dry in the morning, that will shape the day. If people wake up and it’s snowing, that will be it.”

“..for shareholders and pension plans, the tarnishing of tech could have serious consequences.”

• Trouble For Big Tech As Consumers Sour On Amazon, Facebook And Co (G.)

Trump is going after Amazon; Congress is after Facebook; Google is too big, and Apple is short of new products. Is it any surprise that sentiment toward the tech industry giants is turning sour? The consequences of such a readjustment, however, may be dire. The past two weeks have been difficult for the tech sector by every measure. Tech stocks have largely driven the year’s stock market decline, the largest quarterly drop since 2015. Facebook saw more than $50bn shaved off its value after the Observer revealed that had harvested millions of people’s user data for political profiling. Now users are deleting accounts, and regulators may seek to limit how the company monetizes data, threatening Facebook’s business model.

On Monday, the Federal Trade Commission confirmed it was investigating the company’s data practices. Additionally, Facebook said it would to London to appear in front of UK lawmakers, but it would not send the chief executive, Mark Zuckerberg, who is increasingly seen as isolated and aloof. Shares of Facebook have declined more than 17% from the close on Friday 16 March to the close on Thursday before the Easter break. Amazon, meanwhile, long the target of President Trump’s ire, saw more than $30bn, or 5%, shaved off its $693bn market capitalization after it was reported that the president was “obsessed” with the company and that he “wondered aloud if there may be any way to go after Amazon with antitrust or competition law”.

Shares of Apple, and Google’s parent company Alphabet, are also down, dropping on concerns that tech firms now face tighter regulation across the board. For Apple, there’s an additional concern that following poor sales of its $1,000 iPhone X. For Google, there’s the prospect not only of tighter regulation on how it sells user date to advertisers, but also the fear of losing an important Android software patent case with Oracle. Big tech’s critics may be forgiven a moment of schadenfreude. But for shareholders and pension plans, the tarnishing of tech could have serious consequences.

More on the article in yesterday’s Debt Rattle.

• Google, Facebook Too Big To Be Governed, Could Be Dismantled – Macron (Ind.)

Emmanuel Macron, the French president, has warned that Google and Facebook are becoming too big to be governed and could face being dismantled. Internet giants could be forced to pay for the disruption they cause in society and submit to French or European privacy regulations, he suggested. In an interview with the magazine Wired, the president warned that artificial intelligence (AI) would challenge democracy and open a Pandora’s box of privacy issues. He was speaking after announcing a €1.5bn (£1.32bn) investment in artificial intelligence research to accelerate innovation and catch up with China and the US.

Mr Macron said companies such as Google and Facebook were welcome in France, brought jobs and were “part of our ecosystem”. But he warned: “They have a very classical issue in a monopoly situation; they are huge players. At a point of time – but I think it will be a US problem, not a European problem – at a point of time, your government, your people, may say, ‘Wake up. They are too big.’ “Not just too big to fail, but too big to be governed. Which is brand new. “So at this point, you may choose to dismantle. That’s what happened at the very beginning of the oil sector when you had these big giants. That’s a competition issue.”

We don’t know nearly enough on ME economies. So this is a real good find.

• The Middle East Is Doomed (Ehsani)

Authored by “Ehsani” – a Middle East expert, Syrian-American banker and financial analyst who visits the region frequently and writes for the influential geopolitical analysis blog, Syria Comment.

* * *

The Mideast is doomed. Egypt alone needs to create 700,000 jobs every single year to absorb the new job seekers out its 98 million population. A third of this population already live below the poverty line (482 Egyptian Pounds a month, which is less than $1 a day). The seeds of the vicious circle that the Mideast region finds itself in today were planted at least 5 decades ago. Excessive public spending without matching revenues were the catalyst to a faulty and dangerous incentive system that helped to balloon populations beyond control. A governance system that was ostensibly put in place to help the poor ended up being a built-in factory for poverty generation. Excessive subsidies helped misallocate resources and mask the true cost of living for households. Correlation between family size and income was lost.

Successive Mideast leaders are often referred to as evil dictators. I see them more as lousy economists and poor users of simple arithmetic and excel spreadsheets that can help demonstrate the simple, yet devastating power of compounding. Unless you are a Gulf-based monarchy enjoying the revenue stream from oil and gas that can postpone your day of reckoning, the numbers in nearly every single Arab country don’t add up. t is important to note that excessive population growth is not fundamental the issue here. Japan and many parts of Europe are suffering from too little population growth. The problem in Arab societies is lack of productivity stemming from weak private sector and overburdened bankrupt public sector. As students of Economics know, “Potential” Economic Growth of a country is derived by adding the growth rate of its labor force to the growth rate of the economy’s productivity.

High labor force growth therefore ought to be a plus for the “Potential Growth”. The Arab World’s problem is that it suffers from shockingly low levels of “productivity”. This may seem like a fancy word but the concept encapsulates everything that Arab economies and societies suffer from. Why does the Arab world have such low productivity? The answer lies in everything from excessive size of public sector, subsidies and overbearing regulatory system leading to corruption. As public sector liabilities grow, education, healthcare & infrastructure funding suffers. Why is the size of the public sector coupled with excessive subsidies the problem? Because what starts as the noble cause of helping the poor ends up masking the true costs of raising family size. Governments soon go broke. Services suffer. Anger rises. We know the drill now.

Dead on, Caitlin.

• This Is How We End Up With John Bolton (CJ)

A GoFundMe for former FBI Deputy Director Andrew McCabe, who was fired two weeks ago by Attorney General Jeff Sessions, has raised over $400,000 in less than a day. Another way to say that would be that a former officer from the US intelligence community, who is married to a successful physician and will surely receive a book deal worth millions of dollars, just had a charity drive which in less than a day raised an amount of money it would take the average American years to earn. Meanwhile, an impoverished American recently died because his GoFundMe failed to raise enough money for his insulin and an FBI whistleblower was just arrested for trying to bring transparency to the Bureau’s secret domestic surveillance practices while banks receive massive bailouts, global fossil fuel subsidies total trillions of dollars, and Amazon paid zero federal taxes last year despite earning billions.

Even leaving aside the reasons for McCabe’s firing and the shady dealings he was accused of, this is a very solid illustration of everything that is sick about the United States of America. In America you have socialism for the rich and capitalism for the poor. You have government secrecy for the powerful and surveillance for the powerless. You have charity for wealthy establishment lackeys and rugged individualism for ordinary human beings. Those at the top are uplifted even further, while those on the bottom are stomped through the floor.

Julian Assange is currently under siege in the Ecuadorian embassy, deprived of mobility, sunlight and healthcare, and now internet, phone calls and visitors, all because he dared to bring some transparency to the powerful. Meanwhile the intelligence and defense agencies who serve as the armed goon squad of the wealthy and the powerful are able to kill, destroy and pillage from behind the opaque walls of near-total government secrecy in the name of “national security”. And instead of defending the single defenseless man who speaks truth to power, mainstream media reporters around the world are spitting on him in near-unanimity because he hurts power’s feelings.

This is how we end up with John Bolton, people. This is the “kiss-up, kick-down” pathway to success that elevates bloodthirsty psychopaths like John Bolton, the worst of the worst, the ones willing to do the most killing on behalf of the powerful and the most stomping on the powerless to get to the top. This has become the unquestioned pathway in every sphere of public life. We have a situation now where the highest echelons of power are not the wisest among us, but the wiliest. The fourth estate is full of everyday people who at one point presumably believed they were there to bring truth to power, stomping on the silvery head of one who does, while sucking up to the very power that he regularly embarrasses with his leak drops.

All the stuff we should do but don’t. Should we instead ask why we don’t? All the ‘it’s not too late’ talk certainly doesn’t help.

• Two Degrees No Longer Seen As Global Warming Guardrail (AFP)

Limiting global warming to two degrees Celsius will not prevent destructive and deadly climate impacts, as once hoped, dozens of experts concluded in a score of scientific studies released Monday. A world that heats up by 2C (3.6 degrees Fahrenheit) – long regarded as the temperature ceiling for a climate-safe planet – could see mass displacement due to rising seas, a drop in per capita income, regional shortages of food and fresh water, and the loss of animal and plant species at an accelerated speed. Poor and emerging countries of Asia, Africa and Latin America will get hit hardest, according to the studies in the British Royal Society’s Philosophical Transactions A.

“We are detecting large changes in climate impacts for a 2C world, and so should take steps to avoid this,” said lead editor Dann Mitchell, an assistant professor at the University of Bristol. The 197-nation Paris climate treaty, inked in 2015, vows to halt warming at “well under” 2C compared to mid-19th century levels, and “pursue efforts” to cap the rise at 1.5C. UN Secretary-General Antonio Guterres on Thursday said climate change was “the most systemic threat to humankind”. With only one degree of warming so far, Earth has seen a crescendo of droughts, heatwaves, and storms ramped up by rising seas. Voluntary national pledges made under the Paris pact to cut CO2 emissions, if fulfilled, would yield a 3C world at best.

The treaty also requires that – by the end of the century – humanity stop adding more greenhouse gases to the atmosphere than oceans and forests can absorb, a threshold known as “net zero emissions”. “How fast we get to a 2C world” is critical, Mitchell told AFP. “If it only takes a couple of decades, we will be in trouble because we won’t have time to adapt to the climate.” [..] Researchers led by Felix Pretis, an economist at the University of Oxford, predict that two degrees of global warming will see GDP per person drop, on average, 13% by 2100, once costly climate change impacts are factored in. A 2ºC world will also “show significant negative impact on the rates of economic growth,” Pretis told AFP.

Debt Rattle March 29 2018

Mar 292018

March 29, 2018 Posted by Raúl Ilargi Meijer at 9:33 am Finance Tagged with: Amazon, approval, Assange, Bolton, crisis, dollar, FAANG, household debt, porn, Stormy, Tesla, Trump, Turkey Comments Off

Paul Gauguin The wave 1888

• Trump Approval At 11-Month High – Will The Dollar Follow? (ZH)

• Amazon Loses $53 Billion in Market Value, Becoming FAANG’s Biggest Loser (BBG)

• Fed Mistakes Could Spark ‘Unusually Fast’ Bear Market (MW)

• Tesla Bonds Are in Free Fall (BBG)

• The New Warlord in the White House (Jacobin)

• Skripals Poisoned From Front Door Of Salisbury Home, Police Say (G.)

• May Considers Banning City Of London From Selling Russian Debt (G.)

• Ecuador Cuts Off Julian Assange’s Internet Access At London Embassy (G.)

• The Debt We Don’t Talk About (Vague)

• The European Realistic Disobedience Front (WSJ)

• Concern On Greek Islands As Hundreds Of Refugees Reach Lesbos (K.)

• Greek President Vows Country Will Defend Itself Against Turkey (K.)

• Guardian Pulls Greek Crisis Porn Holiday Package (KTG)

Stormy Daniels boosts Da Donald’s stats. What’s not to like?

• Trump Approval At 11-Month High – Will The Dollar Follow? (ZH)

The last few days have seen a rapid rush to the ‘safe-haven’ dollar, stalling a seemingly non-stop drop in the world’s reserve currency.

Which raises the question, is the correlation between President Trump’s approval rating and ‘king dollar’ about to reignite?

President Trump’s approval rating has been rising since the start of the year, and the results from the most recent presidential job approval survey by CNN shows that Donald Trump is now at an 11-month high. Although he still has majority disapproval, 42% of respondents are currently giving him a thumbs up – the highest rate recorded by CNN since March 2017 where the president was on 44%. So how, during a time of seemingly endless scandals trying to burst their way into the public sphere, is Trump seemingly on the up? [..] Despite being criticized from some corners for his protectionist approach, Trump following through on his America First campaign promises is seemingly helping to win some voters back around. In many ways, the road ahead is looking far from smooth for the president, but having come through scandal and controversy relatively unscathed in the past, who knows where this current wave will lead.

Just on rumors Trump doesn’t like them. Wait till he starts tweeting on the topic.

• Amazon Loses $53 Billion in Market Value, Becoming FAANG’s Biggest Loser (BBG)

Move over, Facebook. U.S. investors have a new punching bag among the FAANGs: Amazon.com, Inc. Facebook Inc. gave up the top loser spot to Amazon.com, which lost $53 billion in market value on Wednesday after Axios reported that President Donald Trump is “obsessed” with regulating the e-commerce behemoth. The social media giant had previously underperformed the tech megacap group amid concern over the company’s handling of its users’ personal information. The FAANG stocks, once assumed to be a monolith of performance, have suffered degrees of decoupling recently, including the outperformance by Netflix Inc. earlier in the year.

Amazon.com fell as much as 7.4% Wednesday before paring some losses to close 4.4% lower after a Stifel Nicolaus & Co. analyst said the weakness created a buying opportunity. Facebook diverged from the group in early trading, rallying 0.5% after announcing it’s redesigning a menu of privacy settings in response to public outrage over the user data practices. Netflix was the second-biggest loser in the FAANG group of stocks, sliding 5% on the heels of the #DeleteNetflix campaign. “Netflix and Amazon haven’t really experienced the intense selling that Facebook did,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. “The ‘flu’ that Facebook got is now spreading to the others.”

There’s only one real mistake here: the Fed itself.

• Fed Mistakes Could Spark ‘Unusually Fast’ Bear Market (MW)

Uncertainty over trade policy may be the primary driver of the U.S. stock market at the moment, but the real policy risk facing equities could be coming from the Federal Reserve, with the potential downside a lot more pronounced than investors are currently anticipating. Last week, Fed Chairman Jerome Powell said the economic outlook had strengthened, but he painted a mixed picture about what policy might look like going forward. The U.S. central bank raised interest rates but indicated it would only do a total of three rate hikes in 2018, which some saw as a dovish signal given that a number of investors had expected four this year. However, the Fed pushed up its expected rate path in 2019 and 2020.

Barry Bannister, head of institutional equity strategy at Stifel, said it was a concern that the Fed’s view for 2019 and 2020 had grown more hawkish, which raised the risk of the central bank making a policy mistake. “What matters for investors is that any decline is likely to be unusually rapid and occur as a result of P/E compression, resulting from policy risks not weak GDP,” he wrote in a research report. “Investors need a bit more acrophobia, as our best model points to a bear market and lost decade for stocks.” Bannister argued the new Fed, under Powell, “wishes to fade the ‘Fed put,’” or the idea that the central bank would step in to prop up falling equity prices. “The cost may be a 16% P/E drop,” he wrote, referring to price-to-earnings, a popular measure of equity valuation.

The Fed is expected to regularly raise rates over the coming years, and some investors think it may hasten its pace of increases to rates in the event that inflation returns to the market in a more pronounced fashion. “Maybe it is not that the Fed has actually made an error, perhaps it is fear the Fed may make an error,” Stifel wrote (emphasis in original). “The late-2010s echo the late-1990s as ‘bookends’ for global imbalances. Unlike the yield curve inversion in [the first half of the 2000s] in anticipation of 2% inflation that led to an S&P 500 peak, investors may simply worry that the same outcome is possible in this cycle, causing equities to decline.”

And now I can’t get that song out of my head anymore.

• Tesla Bonds Are in Free Fall (BBG)

Elon Musk’s creditors are suddenly having a serious bout of buyer’s remorse. In August, they lined up for the chance to finance Tesla’s ambitious rollout of its Model 3 sedan. Wooed by Musk’s personal appeals, bond investors pretty much ignored the carmaker’s prolific cash burn and repeated failures to meet production targets and lent it $1.8 billion at record-low interest rates. But now, after a spate of fresh setbacks in the past week, including a fatal Tesla crash and a credit-rating downgrade, bondholders are asking hard questions about whether Musk can deliver on his bold promise to bring electric cars to the masses before the company runs out of cash. On Wednesday, Tesla’s notes plunged to a low of 86 cents on the dollar, the clearest sign yet creditors aren’t totally sure the company will be money good.

“It’s getting worse and worse every single day” for Tesla, said Bill Zox at Diamond Hill Investment Group. “That’s the nature of being in this negative feedback loop. Everyone is worried.” The consequences are significant. Tesla’s woes have played out most visibly in the stock market, with its shares suffering a two-day, 15% drop that’s the biggest since 2016. But surging borrowing costs, which are now near 8%, could hamper the carmaker’s ability to finance itself at a critical time. The company, which has never shown an annual profit in the 15 years since it was founded, will need to raise over $2 billion to cover not only its cash burn this year, but also about $1.2 billion of debt that comes due by 2019, Moody’s Investors Service analyst Bruce Clark said in a report Tuesday.

One of a million pieces denouncing Bolton. Can’t we send Stormy Daniels to his hotel room?

• The New Warlord in the White House (Jacobin)

There is no daylight between the ethos of a thug with a lead pipe shaking down a pedestrian for money and John Bolton, except that one has a J.D. from Yale. Bolton is particularly dangerous because he combines devotion to the ruthless exercise of power for American interests with a glassy-eyed faith in the durability of that same power. Anyone even remotely in touch with reality will have viewed the past two decades as a profound lesson in the limits of American military might — a fact that, ironically, helped Trump come to power. Not Bolton. Despite the ever worsening failure of the war he so desperately wished for, he has been heedlessly slavering for ever more destruction, still entranced by schoolboy myths about American power that the Right long ago turned into a near-evangelical worldview.

Unless Trump grows tired of Bolton’s mustache in record time, the Korean peninsula or the Middle East is very likely headed for war. Yet despite what Bolton thinks — and despite the Democrats’ abdication of this responsibility under Obama — a president cannot declare war without congressional authorization. The question is whether Congress will finally reassert this role under Trump or simply line up behind him. The good news is that Democrats are poised to make significant gains in this year’s midterms, including possibly retaking the House. The bad news is that if they do, they will do so with one of the most conservative and militaristic batch of new Democrats in modern memory.

Whatever happens, Bolton’s dismaying rise to power couldn’t have happened without the Reagan and Bush presidencies that liberals and centrists are now so eager to rehabilitate. Nor could it have happened without the many news outlets that have provided him a platform and legitimized him as a serious foreign policy thinker, instead of the deluded fanatic that he is. Perhaps this will spur some soul-searching, but let’s take things one day at a time.

Yeah. No. This does it for me. They’re making it up one chapter at a time.

• Skripals Poisoned From Front Door Of Salisbury Home, Police Say (G.)

Detectives investigating the attempted murders of Russian double agent Sergei Skripal and his daughter Yulia Skripal have said they believe the pair were poisoned with a nerve agent at the front door of his Salisbury home. Specialists investigating the poisoning of the the Skripals have found the highest concentration of the nerve agent on the front door at the address, police said. Counter-terrorism detectives will continue to focus their inquiries on the home address for the coming weeks, and possibly months, after the father and daughter were found unconscious on a park bench in Salisbury earlier this month.

Local police have retaken control of The Maltings shopping centre, where the Skripals were first discovered, and London Road cemetery from counter-terrorism detectives, where officers focused their investigation into the nerve agent attack in previous weeks. More than 130 people could have been exposed to the chemical weapon in the aftermath of the poisoning in Salisbury, which the UK government believes was committed by the Russian state. In response to the poisoning, more than 150 Russian officials have been expelled from more than 25 countries, and the UK government is considering further measures to punish Russia, including a ban on the City of London from selling Russian sovereign debt.

Public health experts are still working to establish whether the nerve agent attack presents a long term risks to Salisbury’s residents, which will receive a £1m support package from central government to help recover. Deputy assistant commissioner Dean Haydon, the senior national coordinator for counterterrorism policing, said: “At this point in our investigation, we believe the Skripals first came into contact with the nerve agent from their front door. “We are therefore focusing much of our efforts in and around their address. Those living in the Skripals’ neighbourhood can expect to see officers carrying out searches as part of this but I want to reassure them that the risk remains low and our searches are precautionary.”

Translation: City tells May what to do.

• May Considers Banning City Of London From Selling Russian Debt (G.)

Theresa May has agreed to look into imposing a ban on the City of London from helping Russia to sell its sovereign debt, which prop ups the Russian economy. Last month, City clearing houses, working alongside a major sanctioned Russian bank, helped issue $4bn (£2.83bn) of eurobonds to finance Russian sovereign debt, of which nearly half was sold in London markets. Nearly half the debt was bought by London-based investors, predominantly institutional investors. A loophole in EU and UK legislation has allowed sanctioned Russian banks, primarily VTB bank, to act as the main organisers – known as book runners – for the issuance of Russian debt.

A public call for the loophole to be closed has been made three times in the past week by the foreign affairs select committee chairman, Tom Tugendhat. On each occasion ministers seemed to be unaware of the issue, but the foreign secretary, Boris Johnson, last week described the idea as interesting. Speaking to the liaison committee of MPs on Tuesday, the prime minister said she would report back on the policy options. The foreign affairs select committee is setting up an inquiry into how the UK financially props up Vladimir Putin’s allies, and the measures the UK has taken to clamp down on corrupt Russian money in London.

Tugendhat has been briefed by a British research fellow at the Harvard Society of Fellows, Emile Simpson, who has argued Russia’s greatest weakness is its dependence on western investors. He contends a policy blindness leads the west to sanction individuals, and sometimes sectors, but not to look at sanctioning the Russian state as a whole. He said: “At present, Russia can borrow in EU and US capital markets despite western sanctions and then can support the sanctioned Kremlin-linked banks and energy companies that can no longer do so”. Tugendhat has proposed that Russian bond sales are no longer made available to key western clearing houses such as Euroclear and Clearstream, making them effectively untradeable on the secondary market and so deterring the majority of EU and US investors from buying them.

Know why? Skripal.

• Ecuador Cuts Off Julian Assange’s Internet Access At London Embassy (G.)

Ecuador has cut Julian Assange’s communications with the outside world from its London embassy, where the founder of the whistleblowing WikiLeaks website has been living for nearly six years. The Ecuadorian government said in statement that it had acted because Assange had breached “a written commitment made to the government at the end of 2017 not to issue messages that might interfere with other states”. It said Assange’s recent behaviour on social media “put at risk the good relations [Ecuador] maintains with the United Kingdom, with the other states of the European Union, and with other nations”. The move came after Assange tweeted on Monday challenging Britain’s accusation that Russia was responsible for the nerve agent poisoning of a Russian former double agent and his daughter in the English city of Salisbury earlier this month.

The WikiLeaks founder also questioned the decision by the UK and more than 20 other countries to retaliate against the poisoning by expelling Russian diplomats deemed spies. Assange has lived in the embassy since June 2012 to avoid extradition to Sweden over allegations of sex crimes he denies. Sweden has dropped the case but Assange remains subject to arrest in the UK for jumping bail and fears he will be extradited to the US for questioning about WikiLeaks’ activities if he leaves the embassy building.

[..] Assange’s comments on the nerve agent attack on double agent Sergei Skripal and his daughter Yulia prompted the British foreign office minister Alan Duncan to call him a “miserable little worm” during a Commons debate on Tuesday. Duncan said he should leave the embassy and surrender to British justice. Assange replied: “Britain should come clean on whether it intends to extradite me to the United States for publishing the truth and cease its ongoing violation of the UN rulings in this matter. “If it does this disgraceful impasse can be resolved tomorrow. I have already fully served any theoretical (I haven’t been charged) ‘bail violation’ whilst in prison and under house arrest. So why is there a warrant for my arrest?”

The former Greek finance minister, Yanis Varoufakis, and the music producer Brian Eno said in a statement they had heard “with great concern” about Assange’s lost internet access. “Only extraordinary pressure from the US and the Spanish governments can explain why Ecuador’s authorities should have taken such appalling steps in isolating Julian,” they pair said, adding Assange had only recently been granted citizenship. “Clearly, Ecuador’s government has been subjected to bullying over its decision to grant Julian asylum, support and ultimately, diplomatic status.”

In the end, it’s simple.

• The Debt We Don’t Talk About (Vague)

How do you know a major financial crisis is coming? Look for a spike in privately held debt, by households and corporations. That’s the argument of Richard Vague, author of The Next Economic Disaster: Why It’s Coming and How to Avoid It. Having worked for more than 30 years in consumer banking, Vague describes how he saw the build-up of private debt in the mortgage and credit card industries first hand–even though it’s an issue that neoclassical economists like Milton Friedman barely acknowledge. To avoid another crisis, Vague says firms and governments need to take debt forgiveness–the biblical “jubilee”–seriously. As he says, after the financial crisis “We helped the banks, we didn’t help the households.”

We wish Yanis godspeed.

• The European Realistic Disobedience Front (WSJ)

Yanis Varoufakis is back to rescue Greece and rock the European establishment again. Or so he hopes. On Monday night the flamboyant former finance minister, who enraged European authorities at the height of Greece’s debt crisis in 2015, launched his new Greek political party at a theater here. That year, his country bowed to strict austerity demands. Now his solution to Greece’s sky-high debt is the same as his unsuccessful push before: to show creditors who’s boss. If elected, he told the gathering of around 300 people, he will run looser budgets. Greek banks will be revived with public money. He will swap Greece’s bonds for new ones whose payments depend on economic growth.

These and other policies to end Greece’s “debt colony status” will be implemented on day one, he said. And this time, unlike in 2015, he vowed there will be no negotiation with Europe, no surrender. His party is called the European Realistic Disobedience Front. His refrain is that Europe’s establishment is unrealistic, not him. “When they start sending orders, they will receive strong disobedience,” he said. “They will have to bear the cost of defenestrating us from the euro, or accept our policies,” he said to warm applause.

Here comes Merkel’s biggest nightmare. She deserves it. The refugees do not.

• Concern On Greek Islands As Hundreds Of Refugees Reach Lesbos (K.)

Authorities on the Aegean islands were on standby on Wednesday after nearly 300 migrants reached Lesvos on eight boats following several days without new arrivals from neighboring Turkey. Apart from the 295 people who landed on Lesvos, another 50 migrants arrived on Kos. Sources at the Citizens’ Protection Ministry expressed concern about the spike in arrivals, noting that no boats reached the islands on Monday, when Turkish President Recep Tayyip Erdogan was meeting with European Union leaders in Varna, Bulgaria, for talks that touched on an EU-Turkey migration pact signed in March 2016. The diplomatic stance struck by Erdogan in Varna was in sharp contrast to a string of threats and hostile language against Greece last week. Ministry sources said the next few days would indicate whether the increase in arrivals represents a new trend or not.

I’ve said it many times before: this risks getting terribly out of hand. He doesn’t mention Turkey by name of course.

• Greek President Vows Country Will Defend Itself Against Turkey (K.)

President Prokopis Pavlopoulos on Wednesday sought to send another firm message to Ankara amid increasingly hostile rhetoric from across the Aegean as a Greek military readiness exercise got under way in the southern Aegean. “Greece will strongly support its borders and those of Europe,” Pavlopoulos said during a visit to the Salamina naval base, repeating that “there are no gray zones” in the Aegean. Defending “international legitimacy… is not simply our right, it is also our duty to the international community,” he said. The president, who was accompanied by Defense Minister Panos Kammenos, once again called on Turkey to respect international laws and treaties, noting that the only issue of dispute between the two countries relates to the delineation of the continental shelf.

Pavlopoulos said he observed the “readiness of the country’s navy to defend our national sovereignty and borders, and consequently the borders of the European Union.” Kammenos had ordered the one-day exercise, code-named Pyrpolitis (Fire-raiser), to be carried out in the Aegean, northwest of Rhodes, following a long meeting with military officials on Tuesday night, during which the recent activity of Turkish armed forces in the region was discussed. The exercise involved a Hellenic Navy frigate, assault and transport helicopters and a Zubr military hovercraft carrying members of the special forces, and also saw the participation of Hellenic Air Force planes.

The aim of the exercise was to test the readiness of Greek armed forces in a crisis scenario, such as the need to recapture an islet. It was completed successfully at the end of the day without any signs of Turkish transgressions of Greek air space or territorial waters. However, Turkey’s National Security Council issued a stern message on Wednesday, toward Greece as well as the European Union and US, declaring that it will not give up its claims in the Aegean, the Eastern Mediterranean and northern Syria, where Turkish troops have occupied Afrin.

Well, that was fast… Did make a screenshot last night though.

Surprised? Neh… Some people are just so lost they will never be found.

• Guardian Pulls Greek Crisis Porn Holiday Package (KTG)

The Guardian has taken down its Greece crisis-porn holiday package “Greece and the Euro” after a shitstorm on social media. Not only Greeks but also foreigners, among them many from UK, slammed the daily for offering a vacation tour to the debt-ridden country under the perspective meet the suffering Greeks at £2,500 for 7 days. The tour package was taken down sometime late on Wednesday evening. In a statement to Greek media correspondent in London, Thanassis Gavos, the Guardian said: “The Guardian has been working with Political Tours to provide informative trips to Greece and other countries for people who wish to develop their understanding of the political and social landscapes in these places. On reflection we have now paused this project in order to reconsider our approach. All Political Tours/Guardian packages to Greece, Bosnia, Ukraine have been removed from site.”

In other words what the daily says is we will find other ways, less obviously insulting to exploit the suffering of people in areas of economic crisis and wars in the future. In the company of journalists, including the daily’s correspondent in Athens, the happy but crisis conscious traveler will swill wine and then go visit Greek families who will unfold their daily drama in front of people they have never seen before and who have paid to listen to them. It is unknown whether the Greek crisis victims will get a small commission for being live witnesses of an 8-year-old economic crisis. NGOs on the island of Samos and the port of Piraeus will explain every facet of the Refugee Crisis and drama.

Debt Rattle March 28 2018

Mar 282018

March 28, 2018 Posted by Raúl Ilargi Meijer at 9:36 am Finance Tagged with: Bolton, Brexit, correction, expulsions, Facebook, GDP, Google, Kim, Maxed Out, proof, Russia, Tesla, wealth, Zuckerberg 17 Responses »

Edvard Munch Spring in Johan Karl Street 1944

• Steen Jakobsen Fears 30% Market Correction With Consumer ‘Maxed Out’ (CNBC)

• China Says Kim Jong Un Agrees To Denuclearize Korean Peninsula (R.)

• All The Personal Data That Facebook/Google Collect (Curran)

• Mark Zuckerberg Agrees To Testify Before Congress Over Data Scandal (G.)

• 37 State Attorneys General Demand Answers From Zuckerberg (ZH)

• Zuckerberg’s Refusal To Testify Before UK MPs ‘Absolutely Astonishing’ (G.)

• Jimmy Carter: Trump Hiring Bolton ‘A Disaster For Our Country’ (USAT)

• Brexit Referendum Won Through Fraud – Whistleblower (G.)

• Austria Draws Scorn for Sitting Out Russian Diplomat Expulsions (BBG)

• 160 Countries Want To See Proof In Skripal Case – Russia’s UK Embassy (RT)

• Tesla Just Months From A Total Collapse – Hedge Fund (MW)

• The Missing Economic Measure: Wealth, not GDP (OWiD)

Goldilocks and Frankenstein.

• Steen Jakobsen Fears 30% Market Correction With Consumer ‘Maxed Out’ (CNBC)

Stock markets could see a hefty fall in the coming months due to a slew of trends that point to a downturn in the global economy, one economist told CNBC. Steen Jakobsen, the often-bearish chief economist at Danish investment house Saxo Bank, cited several factors including growing credit loans, a widening fiscal deficit in the U.S., doubts over infrastructure spending plans and a potential trade war. “All the data we’ve seen over the last few weeks has basically been that the consumer is maxed out, we’ve seen that in credit card loans as well, so I think the consumer is done spending the money,” he told CNBC Tuesday. New data Tuesday showed that U.S. consumer confidence declined in March, falling below expectations and breaking a two month streak of gains.

“I think overall we have been pricing in for Goldilocks and we are closer to Frankenstein to be honest,” he said. He added that in a scenario of a potential sudden economic recession, he sees a possible market correction of between 25 and 30%. Jakobsen highlighted a “Goldilocks” scenario that he feels traders are mistakenly pricing in to markets, where fresh economic data are either not too hot or not too cold. Overall, the global economy is currently experiencing lower levels of unemployment and higher growth. Looking at 2018 in particular, many analysts hoped for strong global growth on the back of higher inflation and higher investment, but according to Jakobsen, these drivers “aren’t actually materializing.”

Instead, Jakobsen made a reference to the novel “Frankenstein,” arguing that the economy had been skewed by central bankers, who have injected trillions of dollars into the global economy to boost growth and investment. The first quarter of 2018 “started at more than 5% expected GDP; we are now significantly less than 2% for the (first quarter) expected, so I don’t really see things happening in the growth area,” Jacobsen added. “We’ve been at 2% exactly since the financial crisis, I don’t think we’re going to deviate from that,” he said.

Again, he says it’s what his father and grandfather wanted. Perfect way to save face.

• China Says Kim Jong Un Agrees To Denuclearize Korean Peninsula (R.)

China said on Wednesday it won a pledge from North Korean leader Kim Jong Un to denuclearize the Korean peninsula during a meeting with President Xi Jinping, who pledged in return that China would uphold its friendship with its isolated neighbor. After two days of speculation, China announced on Wednesday that Kim had visited Beijing and met Xi during what the official Xinhua news agency called an unofficial visit from Sunday to Wednesday. The trip was Kim’s first known journey abroad since he assumed power in 2011 and is believed by analysts to serve as preparation for upcoming summits with South Korea and the United States.

Beijing has traditionally been the closest ally of secretive North Korea, but ties have been frayed by North Korea’s pursuit of nuclear weapons and China’s backing of tough U.N. sanctions in response. Xinhua cited Kim as telling Xi that the situation on the Korean peninsula is starting to improve because North Korea has taken the initiative to ease tensions and put forward proposals for peace talks. “It is our consistent stand to be committed to denuclearisation on the peninsula, in accordance with the will of late President Kim Il Sung and late General Secretary Kim Jong Il,” Kim Jong Un said, according to Xinhua. North Korea is willing to talk with the United States and hold a summit between the two countries, he said.

Zero Hedge with the entire Twitter thread by Dylan Curran. Does that wake you up?

• All The Personal Data That Facebook/Google Collect (Curran)

The Cambridge Analytica scandal was never really about Cambridge Analytica. As we’ve pointed out, neither Facebook nor Cambridge Analytica have been accused of doing anything explicitly illegal (though one could be forgiven for believing they had, based on the number of lawsuits and official investigations that have been announced). Instead, the backlash to these revelations – which has been justifiably focused on Facebook – is so severe because the public has been forced to confront for the first time something that many had previously written off as an immutable certainty: That Facebook, Google and the rest of the tech behemoths store reams of personal data, essentially logging everything we do.

In response to demands for more transparency surrounding user data, Facebook and Google are offering users the option to view all of the metadata that Google and Facebook collect. And as Twitter user Dylan Curran pointed out in a comprehensive twitter thread examining his own data cache, the extent and bulk of the data collected and sorted by both companies is staggering. Google, Curran said, collected 5.5 gigabytes of data on him – equivalent to some 3 million Microsoft Word documents. Facebook, meanwhile, collected only 600 megabytes – equivalent to roughly 400,000 documents.

Another shocking revelation made by Curran: Even after deleting data like search history and revoking permissions for Google and Facebook applications, Curran still found a comprehensive log of his documents and other files stored on Google drive, his search history, chat logs and other sensitive data about his movements that he had expressly deleted. What’s worse, everything shown is the data cache of one individual. Just imagine how much data these companies hold in total.

By now, shareholders may be his prime concern. Congress won’t hurt the CIA’s interests.

• Mark Zuckerberg Agrees To Testify Before Congress Over Data Scandal (G.)

Facebook’s chief executive, Mark Zuckerberg, has agreed to testify before the United States Congress in the wake of a that has sent the company’s share price tumbling and prompted numerous investigations and lawsuits. Zuckerberg has accepted an invitation to testify before the House energy and commerce committee, according to an aide familiar with the discussions. A date has not yet been set, and the spokesperson for the House committee declined to confirm reports that the hearing was scheduled for 12 April. The Senate judiciary and commerce committees have also invited Zuckerberg to appear at hearings.

His decision to testify before the US Congress was first reported by CNN, and contrasts with his refusal to appear before members of parliament in the UK. The chair of a British committee of MPs on Tuesday said Zuckerberg’s decision to send other executives to the UK to answer questions on his behalf was “absolutely astonishing”. However, news of US congressional evidence paves the way for a major showdown for Zuckerberg, 33, who has come under increasing pressure from lawmakers and the general public to account for Facebook’s business practices since the company acknowledged last September that it had sold advertisements to Russian agents seeking to influence the US presidential election.

Facebook took 30% of the loot. They sold their data perhaps thousands of times.

• 37 State Attorneys General Demand Answers From Zuckerberg (ZH)

37 “profoundly concerned” U.S. state and territory attorneys general fired off a letter to Facebook CEO Mark Zuckerberg on Monday, demanding answers over reports that personal user information from Facebook profiles was provided to third parties without the users’ knowledge or consent. “Most recently, we have learned from news reports that the business practices within the social media world have evolved to give multiple software developers access to personal information of Facebook users. These reports raise serious questions regarding consumer privacy”

The letter notes the 50 million Facebook profiles which may have been “misused and misappropriated by third-party software developers,” noting that Facebook “took as much as 30%” of payments made through applications used by Facebook users. “According to these reports, Facebook’s previous policies allowed developers to access the personal data of “friends” of people who used applications on the platform, without the knowledge or express consent of those “friends.” It has also been reported that while providing other developers access to personal Facebook user data, Facebook took as much as 30% of payments made through the developers’ applications by Facebook users.”

In other words – while a Facebook user may have agreed in the fine print to allowing the social media giant to hoover up their information – their “friends” did not. “These revelations raise many serious questions concerning Facebook’s policies and practices” reads the letter, which asks “were those terms of service clear and understandable, or buried in boilerplate where few users would even read them?”

He’s just not that into you. Why talk to “the UK parliamentary committee investigating fake news” when he’s already agreed to speak to Congress?

• Zuckerberg’s Refusal To Testify Before UK MPs ‘Absolutely Astonishing’ (G.)

Mark Zuckerberg has come under intense criticism from the UK parliamentary committee investigating fake news after the head of Facebook refused an invitation to testify in front of MPs for a third time. The chair, Damian Collins, said it had become more urgent the Facebook founder give evidence in person after oral evidence provided by the Cambridge Analytica whistleblower, Christopher Wylie. The MP said: “I think, given the extraordinary evidence we’ve heard so far today, it is absolutely astonishing that Mark Zuckerberg is not prepared to submit himself to questioning in front of a parliamentary or congressional hearing, given these are questions of fundamental importance and concern to his users, as well as to this inquiry.

“I would certainly urge him to think again if he has any care for people that use his company’s services.” Zuckerberg has been invited three times to speak to the committee, which is investigating the effects of fake news on UK democracy, but has always sent deputies to testify in his stead. MPs are likely to take a still dimmer view of his decision after he ultimately agreed to testify before Congress in the US. It was reported on Tuesday that the company is now considering strategy for his testimony. When the Commons committee travelled to Washington DC in February to obtain oral evidence from US companies, Facebook flew over its UK policy director rather than send a high-level executive to speak to the committee.

In response to the latest request, Facebook has suggested one of two executives could speak to parliament: Chris Cox, the company’ chief product officer, who is in charge of the Facebook news feed, or Mike Schroepfer, the chief technology officer, who heads up the developer platform. However, Theresa May declined to back Collins. Pressed by the committee chairman at the Commons liaison committee later in the day, the prime minister said “Mr Zuckerberg will decide for himself” whether to give evidence to parliament.

The US has one sane person left. And he’s 93. Not that he’s the only one denouncing Bolton. But none of the rest do that nearly loud enough.

• Jimmy Carter: Trump Hiring Bolton ‘A Disaster For Our Country’ (USAT)

Former president Jimmy Carter, one of the few U.S. officials who has traveled to North Korea and met with its leaders, expresses hope for the planned White House summit with Pyongyang but warns that President Trump may have made “one of the worst mistakes” of his tenure by naming John Bolton to the sensitive post of national security adviser. In an exclusive interview with USA TODAY, pegged to the publication of his new book titled Faith, Carter calls Bolton “a warlike figure” who backs policies the former president calls catastrophic. “Maybe one of the worst mistakes that President Trump has made since he’s been in office is his employment of John Bolton, who has been advocating a war with North Korea for a long time and even an attack on Iran, and who has been one of the leading figures on orchestrating the decision to invade Iraq,” Carter said. He called the appointment, announced last week, “a disaster for our country.”

Perfect for Tony Blair et al. Maybe too perfect. Who cares about this guy’s views? Stick to the facts, please.

• Brexit Referendum Won Through Fraud – Whistleblower (G.)

The EU referendum was won through fraud, the whistleblower Christopher Wylie has told MPs, accusing Vote Leave of improperly channelling money through a tech firm with links to Cambridge Analytica. Wylie told a select committee that the pro-Brexit campaign had a “common plan” to use the network of companies to get around election spending laws and said he thought there “could have been a different outcome had there not been, in my view, cheating”. “It makes me so angry, because a lot of people supported leave because they believe in the application of British law and British sovereignty. And to irrevocably alter the constitutional settlement of this country on fraud is a mutilation of the constitutional settlement of this country.”

Vote Leave has repeatedly denied allegations of collusion or deliberate overspending. When they , Boris Johnson, who fronted the campaign, said: “Vote Leave won fair and square – and legally. We are leaving the EU in a year and going global.” Wylie, who used to work for Cambridge Analytica, gave evidence in a nearly four-hour session before the digital, culture, media and sport select committee. He made a string of remarkable claims about Brexit and Cambridge Analytica, including that his predecessor, Dan Mursean, died mysteriously in a Kenyan hotel room in 2012 after a contract in the company turned sour. Wylie said it was striking that Vote Leave and three other pro-Brexit groups – ; Veterans for Britain, and Northern Ireland’s Democratic Unionist party – all used the services of the little-known firm Aggregate IQ (AIQ) to help target voters online.

And Greece, Cyprus, Portugal, Bulgaria, Cyprus, Slovakia, Slovenia, Malta and Luxembourg. Belgium?!

• Austria Draws Scorn for Sitting Out Russian Diplomat Expulsions (BBG)

Austria is drawing criticism from parts of the European Union for saying it couldn’t expel Russian diplomats on account of its neutrality. Chancellor Sebastian Kurz’s government, which includes nationalists that cooperate with Vladimir Putin’s party, declined to join the tough international response to a nerve-agent attack on a former Russian spy in England. Austria is a “builder of bridges between East and West” and wants to “keep channels open” to Moscow, it said. That position is “hardly compatible with EU membership” and there’s “a big difference between being part of the West and being a bridge between the West and the East,” former Swedish Foreign Minister Carl Bildt said Tuesday on Twitter.

Artis Pabriks, a former Latvian foreign minister who’s a member of the European Parliament, called Austria’s decision a “bad joke.” He asked: “Which other EU policies/decisions Kurz does not apply to Austria?” Kurz, whose People’s Party is part of the same political family as the parties of Bildt and Pabriks, said Monday that Austria backs the EU’s decision to pull its ambassador to Russia. In declining to take further measures, his government cited Austria’s neutrality, which the country adopted as a condition for ending its post-World War II occupation by the U.S., the Soviet Union, the U.K. and France in 1955.

7 billion people do, too.

• 160 Countries Want To See Proof In Skripal Case – Russia’s UK Embassy (RT)

Scores of non-Western countries refuse to take the UK’s assertion that Russia was behind the incident in Salisbury at face value, demanding it present the evidence, Moscow’s embassy in London said. Some 160 states share that view. While many in the Western world, save several notable exceptions, united behind the UK as it accused Russia of poisoning the former spy with a military-grade toxic agent, many more countries have not been persuaded by the fiery rhetoric of British PM Theresa May, the spokesperson for Russia’s British embassy told Sputnik.

“Even if Mrs. May said that she was absolutely sure that Russia was responsible for the incident in Salisbury, she would have to present all evidence to Russia, the international community and the British public. This is the opinion of almost 160 countries which are not members of the Western bloc,” he said. “It is obvious that no one in the wider world would take British words for granted.” On Monday, following the lead of the UK, the US, 18 EU states and other European countries, Canada and Australia announced they would expel a number of Russian diplomats in solidarity with the UK. Washington alone ordered the expulsion of 60 diplomats, including 12 at the Russian mission to the UN, alleging they were covert intelligence operatives.

What became the largest collective expulsion of Russian diplomats in history was denounced by Moscow as an extremely unfriendly and unwarranted step. Still, there were voices in the West that refused to side with London until the evidence is laid out. Austria as well as Switzerland, both stressing their neutral country status, refused to follow suit. Cyprus, Portugal, Bulgaria, Cyprus, Slovakia, Slovenia, Malta and Luxembourg did not jump on the expulsion bandwagon either.

Magic Muskroom.

• Tesla Just Months From A Total Collapse – Hedge Fund (MW)

Unless Elon Musk “pulls a rabbit out of his hat,” Tesla will be bankrupt within four months, says John Thompson of Vilas Capital Management. “Companies eventually have to make a profit, and I don’t ever see that happening here,” he told MarketWatch. “This is one of the worst income statements I’ve ever seen and between the story and the financials, the financials will win out in this case.” Thompson manages $25 million and his Tesla short is the fund’s biggest position. To be fair, he’s been betting big against Tesla for years, which, of course, means he’s endured some brutal stretches. Last April, for instance, the stock hit a record high around the $300 mark, and Musk was right there to troll the Tesla bears.

From that point, the stock continued to break new ground, eventually topping out at $389.61. But despite Tesla’s strong performance in 2017, Thompson’s fund still managed to churn out a 65% gain for the year. Now, Tesla’s back to where it was when Musk fired off his “Shortville” tweet, and Thompson is confident his bet is about to pay off nicely. In fact, Thompson says if his prediction comes true, his fund could surge by another 50%. With that in mind, he says he’s investing $500,000 of his own money. “Tesla, without any doubt, is on the verge of bankruptcy,” he told clients in an email over the weekend.

He explained that funding will be hard to come by in the face of problems in delivering the Model 3, declining demand for the Model S and X, extreme valuation and a likely downgrade of its credit rating by Moody’s from B- to CCC. “As a reality check, Tesla is worth twice as much as Ford [estimate of the enterprise value of both companies], yet Ford made 6 million cars last year at a $7.6 billion profit while Tesla made 100,000 cars at a $2 billion loss,” Thompson said. “Further, Ford has $12 billion in cash held for ‘a rainy day’ while Tesla will likely run out of money in the next 3 months. I’ve never seen anything so absurd in my career.”

Flows vs stocks. GDP is attractive if you want to make money with destruction.

• The Missing Economic Measure: Wealth, not GDP (OWiD)

So, what is GDP? GDP is a measure of economic activity – in terms of market-based gross output – in a given period (often a year). This is of course useful in many ways. GDP growth, when captured accurately, has the potential to tell us about the pace of change and rising levels of consumption. Equally, a cessation of GDP growth can serve as an important red flag: stalling enterprises and increases in unemployed workers tend to imply hardship and losses in welfare. However, there are important changes that GDP does not shed light on, and indeed might give us incorrect signals about. Think about climate change, a critical issue that has been increasingly under the international spotlight. An economy can increase its CO2 emissions and drive up local pollutants – both clearly harmful to the long-term wellbeing of the population – while being rewarded with rising GDP figures.

Similarly, a natural disaster might harm people, destroy infrastructure, and require expensive emergency measures – yet thanks to a rise in spending, this too would temporarily register as an increase in GDP. On the flip side, beneficial endeavors such as attempting to stall the alarming rate of biodiversity loss or deforestation not only fail to register in our headline statistic; they might slow its growth. This is where wealth accounting comes in. Rather than measuring flows, as GDP does, wealth is an indicator of an economy’s underlying capital stocks. Wealth, if measured in detail, accounts for the assets such as natural capital, produced capital, and human capital that underpin growth and consumption possibilities, and in this way shows us viable development pathways.

In the event of a natural disaster or rising pollution, for example, while GDP might grow, wealth measures would alert us to the depletion of underlying physical and natural capital stocks and the need for targeted investment. A detailed enough balance sheet would thus theoretically allow for the sustainable management of an economy’s productive capital. Therefore, while GDP has little to say about whether a nation’s assets can sustain current consumption levels into the future, wealth measures can tell us exactly this. The relationship between wealth and GDP is analogous to company accounts: the balance sheet of a company describes the stock of useful assets owned by a company (akin to wealth), while the profit and loss statement describes the flows of revenue, costs, and net income that the company has been able to generate using those assets (akin to GDP).

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