Apr 202018
 
 April 20, 2018  Posted by at 8:32 am Finance Tagged with: , , , , , , , , , , , ,  


Daniel Garber The quarry 1917

 

The World’s First Total Bubble (MB)
Now Even a Fed Dove Homes in on the “Everything Bubble” (WS)
Recession Risks Are Increasing – Axel Weber (CNBC)
The Faster Tesla Makes Model 3’s, The More Money They Will Lose (SM)
Marx Predicted Our Present Crisis – And Points The Way Out (Varoufakis)
Market Power Wielded By US Tech Giants Concerns IMF Chief (G.)
Bill Gates Backs Plan to Surveil the Entire Planet From Space (Gizmodo)
Palantir Knows Everything About You (BW)
Comey Memos Already Leaked To AP (ZH)
US Sorghum Armada U-Turns At Sea After China Tariffs (R.)
EU to Reject UK Brexit Plan for the Irish Border (BBG)
Turkey Snap Election All About Power And A ‘Deteriorating’ Economy (CNBC)
Brazil Prosecutor Recommends Denying Total Oil License Near Amazon (AFP)
Cow Could Soon Be Largest Land Mammal Left Due To Human Activity (R.)

 

 

Australians think they won.

The World’s First Total Bubble (MB)

The regulators, yes, they’ll have to be reformed. But it doesn’t stop there. They were just the elite enablers. The corruption at the heart of the great Australian property bubble seeped into our entire economy and culture. It oozed under every door, entered every home and visited every BBQ. It bent every business. It ruined our media and distorted our politics. It infected our entire place in the world, disenfranchised from the Australian dream entire generations. It has choked our cities. And sold out the national interest to Chinese speculators, threatening our very freedom. There has never been a more comprehensive bubble in any nation. We have been engulfed by it. The world’s first total bubble.

Yet at its heart was not a miracle but prosaic bank corruption. Only the failure to assess expenditures and incomes, the failure to report accurately and honestly, the failure to advise with integrity and responsbility made any of it possible. Everything else flows outward from this black singularity. Your wealth. Your lifestyle. Your retirement plan. The roof over your head not being over someone else’s. All of it stems from the core corruption of a banking system that disgorged massive sub-prime mortgages across our firmament. I really have no idea what attempted snow job we will see next. But it is over. It is now only a matter of time before the Australian housing supernova collapses towards the banking black hole at its centre, sucked back into the void from whence it came. We’re all the royal commission now.

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Brainard. Warning about what the Fed itself has built.

Now Even a Fed Dove Homes in on the “Everything Bubble” (WS)

“If we have learned anything from the past, it is that we must be especially vigilant about the health of our financial system in good times, when potential vulnerabilities may be building,” explained Federal Reserve Board Governor Lael Brainard in a speech in Washington, D.C., this morning. This was a reference to a time-honored banker adage, now mostly forgotten after nearly nine years of easy money: Bad deals are made in good times. Brainard fills one of the seven slots on the Board of Governors. Two slots are filled by Chairman Jerome Powell and by Randal Quarles. Four slots remain vacant, waiting for Trump appointees to wend their way. She is a strong “dove” in the world of central banks, and she just pointed at why the Fed is tightening – and will continue to tighten: the Everything Bubble.

After rattling off a litany of indicators showing why and how the economy’s “cyclical conditions have been strengthening,” she added this gem, there being nothing like Fed-speak to make your day: “Currently, inflation appears to be well-anchored to the upside around our 2 percent target.” “Well-anchored to the upside” of the Fed’s target – and then she moved on to the “signs of financial imbalances.” “Financial imbalances,” in Fed speak, are asset bubbles, a phenomenon when prices are out of whack with economic reality. In a credit-based economy, assets are collateral for debt. And inflated asset prices put the financial system, meaning the lenders, at risk when those asset prices deflate. Since the Fed has to take care of the financial system, and since it blew up so wonderfully last time due to asset bubbles deflating, the Fed is right to be worried about it. At first the hawks, the rare ones; and now even the doves

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“Risks will begin materializing in 3 years ‘at the latest..'”

Recession Risks Are Increasing – Axel Weber (CNBC)

The world economy is set for one of its best years since the global financial crisis, with both developed and emerging countries growing while inflation is still subdued and monetary conditions remain largely accommodative. But such a good run could end in the next two to three years, according to UBS Chairman Axel Weber. “We’re at the end of a long recovery and, two to three years from now, at the latest, some of the risks could materialize. The recession risks are increasing,” Weber told CNBC’s Joumanna Bercetche this week at the Spring Meetings of the IMF and the World Bank. The IMF this week kept its forecast for 2018’s global growth at 3.9 percent which, if it materializes, would be the fastest expansion since 2011.

But the agency warned that global debt levels have hit a record, and governments should start reducing their indebtedness and build buffers for “challenges that will unavoidably come in the future.” Financial institutions should also brace for such risks, said Weber, adding that he thinks banks have become better prepared compared to before the last crisis. Like many in the industry, Weber said he doesn’t think a full-fledged trade war will happen as a result of the ongoing dispute between the U.S. and China. But, he added that it’s time to reassess Beijing’s role in the World Trade Organization, especially given projections that China will one day become the world’s largest economy. Weber added that companies from around the world should be allowed to do business in China more freely.

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“..a “they will take over the world” and a “they will save the world” combination of hopes..”

The Faster Tesla Makes Model 3’s, The More Money They Will Lose (SM)

A few weeks ago, we shared a note about Tesla from the hedge fund Vilas Capital Management. The firm, which is short the shares, said “Tesla is going to crash in the next 3-6 months.” I received an update from Vilas this morning explaining why they’re even more bearish on Tesla today. The firm pared its short positions after the recent selloff. And Telsa now comprises about 98% of their short book. Clearly Vilas thinks Tesla’s reckoning is imminent. You can read the rest of Vilas’ thoughts on Tesla below:

We added meaningfully to our Tesla position in the first quarter at prices in the $340 range. We continue to believe that Tesla is extremely overvalued and that it will experience significant financial difficulties over time. All companies in a capitalistic system need to earn profits and those profits need to be attractive relative to the amount of shareholder capital employed. Tesla has never earned an annual profit. Along with digital currencies and Unicorns, Tesla appears to be caught up in a gold-rush-fever type of emotional response, both from a “they will take over the world” and a “they will save the world” combination of hopes, instead of their owners looking at the numbers.

Tesla bulls will argue that their production will rise to 5000 Model 3’s per week soon and, therefore, the stock will trade meaningfully higher. Given that the company lost $20,000 per Model S and X sold for roughly $100,000 each last year, due to the fact that it cost more to build, sell, service, charge and maintain these cars than they collected in revenue, as it is important to include all costs when evaluating a business, we predict it will impossible for Tesla to make a profit on a $35,000 to $50,000 car. As anyone with automotive experience knows, profit margins are far higher on bigger, more expensive cars. Therefore, the faster Tesla makes Model 3’s, the more money they will lose.

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Das Kapital.

Marx Predicted Our Present Crisis – And Points The Way Out (Varoufakis)

To see beyond the horizon is any manifesto’s ambition. But to succeed as Marx and Engels did in accurately describing an era that would arrive a century-and-a-half in the future, as well as to analyse the contradictions and choices we face today, is truly astounding. In the late 1840s, capitalism was foundering, local, fragmented and timid. And yet Marx and Engels took one long look at it and foresaw our globalised, financialised, iron-clad, all-singing-all-dancing capitalism. This was the creature that came into being after 1991, at the very same moment the establishment was proclaiming the death of Marxism and the end of history.

Of course, the predictive failure of The Communist Manifesto has long been exaggerated. I remember how even leftwing economists in the early 1970s challenged the pivotal manifesto prediction that capital would “nestle everywhere, settle everywhere, establish connexions everywhere”. Drawing upon the sad reality of what were then called third world countries, they argued that capital had lost its fizz well before expanding beyond its “metropolis” in Europe, America and Japan.

Empirically they were correct: European, US and Japanese multinational corporations operating in the “peripheries” of Africa, Asia and Latin America were confining themselves to the role of colonial resource extractors and failing to spread capitalism there. Instead of imbuing these countries with capitalist development (drawing “all, even the most barbarian, nations into civilisation”), they argued that foreign capital was reproducing the development of underdevelopment in the third world. It was as if the manifesto had placed too much faith in capital’s ability to spread into every nook and cranny. Most economists, including those sympathetic to Marx, doubted the manifesto’s prediction that “exploitation of the world-market” would give “a cosmopolitan character to production and consumption in every country”.

As it turned out, the manifesto was right, albeit belatedly. It would take the collapse of the Soviet Union and the insertion of two billion Chinese and Indian workers into the capitalist labour market for its prediction to be vindicated. Indeed, for capital to globalise fully, the regimes that pledged allegiance to the manifesto had first to be torn asunder. Has history ever procured a more delicious irony?

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Yeah, sure.

Market Power Wielded By US Tech Giants Concerns IMF Chief (G.)

The head of the International Monetary Fund, Christine Lagarde, has expressed concern about the market power wielded by the US technology giants and called for more competition to protect economies and individuals. Speaking at a press conference to mark the start of the IMF’s spring meeting in Washington, Lagarde said breaking up companies was not the solution, but added that her organisation was monitoring their impact on prosperity, financial stability and the workplace. “Competition is needed. From competition you get productivity growth and innovation. Too much concentration, too much market power in the hands of the few is not helpful to the economy or to the wellbeing of individuals.”

Pressure has been building in the US for antitrust laws to be used to break up some of the biggest companies, with Google, Facebook and Amazon all targeted by critics. Lagarde said: “I am not sure breaking up some of the tech titans in this country [the US] or in other countries will be the right answer. It used to be the right answer, but when most of the assets are intangible, how do you break them up? How do you facilitate access and allow market disruptors to operate? I think that is where a lot of new thinking has to be done.”

The IMF is carefully monitoring new digital currencies such as Bitcoin, which it says are prone to fraud and can be used for money laundering. “We have seen a flourishing of cryptocurrencies. There are now more than 100. That has stability implications eventually. We do not think it is systemic at this point in time but regulators and supervisors have to be watchful.” Lagarde expressed concern at the growing threat of a trade war between the US and China, saying that protectionism posed a threat to the upswing in the global economy and to an international system that had served countries well.

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Facebook is peanuts.

Bill Gates Backs Plan to Surveil the Entire Planet From Space (Gizmodo)

EarthNow is a new company looking to provide satellite imagery and live video in virtually real-time. Its unsettling pitch describes a network of satellites that can see any corner of the globe and provide live video with a latency of about a second. And a look at the startup’s top investors gives a lot of confidence that this thing is happening. On Wednesday, EarthNow announced that it will emerge from the Intellectual Ventures ISF Incubator to become a full-scale commercial business. Its first round of investors is comprised of a small group of complimentary powerhouses: AirBus, the SoftBank Group, Bill Gates, and satellite-industry vet Greg Wyler.

The amount of the initial investment hasn’t been disclosed, but the announcement says the funding “focuses primarily on maturing the overall system design to deliver innovative and unique real-time Earth observation services.” That makes it sound like the company is in its very early stages, but don’t be so sure. Wyler’s OneWeb has already deployed highly advanced satellites with a blazing fast 130ms latency and its goal is to have a constellation of hundreds of satellites beaming broadband around the globe by 2020.

EarthNow will use an upgraded version of OneWeb’s technology with a lot of hardware power packed into a 500-pound unit. “Each satellite is equipped with an unprecedented amount of onboard processing power, including more CPU cores than all other commercial satellites combined,” the announcement says. The satellites will also do an onboard analysis of the live imagery using machine learning, but the company doesn’t go into detail about what it will analyze or why it would be necessary to dedicate that processing onboard.

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“Wall Street meets Apocalypse Now,..”

Palantir Knows Everything About You (BW)

High above the Hudson River in downtown Jersey City, a former U.S. Secret Service agent named Peter Cavicchia III ran special ops for JPMorgan Chase & Co. His insider threat group—most large financial institutions have one—used computer algorithms to monitor the bank’s employees, ostensibly to protect against perfidious traders and other miscreants. Aided by as many as 120 “forward-deployed engineers” from the data mining company Palantir, which JPMorgan engaged in 2009, Cavicchia’s group vacuumed up emails and browser histories, GPS locations from company-issued smartphones, printer and download activity, and transcripts of digitally recorded phone conversations.

Palantir’s software aggregated, searched, sorted, and analyzed these records, surfacing keywords and patterns of behavior that Cavicchia’s team had flagged for potential abuse of corporate assets. Palantir’s algorithm, for example, alerted the insider threat team when an employee started badging into work later than usual, a sign of potential disgruntlement. That would trigger further scrutiny and possibly physical surveillance after hours by bank security personnel. Over time, however, Cavicchia himself went rogue. Former JPMorgan colleagues describe the environment as Wall Street meets Apocalypse Now, with Cavicchia as Colonel Kurtz, ensconced upriver in his office suite eight floors above the rest of the bank’s security team.

People in the department were shocked that no one from the bank or Palantir set any real limits. They darkly joked that Cavicchia was listening to their calls, reading their emails, watching them come and go. Some planted fake information in their communications to see if Cavicchia would mention it at meetings, which he did. It all ended when the bank’s senior executives learned that they, too, were being watched, and what began as a promising marriage of masters of big data and global finance descended into a spying scandal. The misadventure, which has never been reported, also marked an ominous turn for Palantir, one of the most richly valued startups in Silicon Valley. An intelligence platform designed for the global War on Terror was weaponized against ordinary Americans at home.

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It took less than an hour.

Comey Memos Already Leaked To AP (ZH)

Update 3: President Trump is up late tonight, we suspect reading through former FBI Director Comey’s leaked memos as he exclaims: “James Comey Memos just out and show clearly that there was NO COLLUSION and NO OBSTRUCTION.” Trump is also quick to remind Americans of one of the reasons he fired him: “Also, he leaked classified information,” and ended with a jab at the endless farce: “WOW! Will the Witch Hunt continue?”

Update 2: Less than an hour after Comey’s memos were released by DOJ to Congress, the 15 pages have miraculously “become available” to The Associated Press. Given that no source is provided, we assume they were leaked with the intent to embarrass President Trump. Comey’s memos detail private dinner conversations with the President in January 2017, during which Trump asked him to pledge his loyalty. Another conversation about former White House national security adviser Michael Flynn is also detailed in the memos. In a memo dated Jan. 28, 2017, Comey recounted a dinner he had with Trump at the White House shortly after the president’s inauguration.

Trump asked Comey who he thought he should be in contact with in the administration, and Comey mentioned the national security adviser. The president said Flynn had “serious judgment issues,” Comey wrote in his memo. Trump then explained to Comey that when the president had complimented British Prime Minister Theresa May on being the first to congratulate him on his election, Flynn interjected that another leader had called first. That was the first time Trump learned of the other leader’s call, Comey wrote.

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Why is US farmland used to provide Chinese animal feed? Isn’t that perhaps what’s wrong with global trade?

US Sorghum Armada U-Turns At Sea After China Tariffs (R.)

Several ships carrying cargoes of sorghum from the United States to China have changed course since Beijing slapped hefty anti-dumping deposits on U.S. imports of the grain, trade sources and a Reuters analysis of export and shipping data showed. Sorghum is a niche animal feed and a tiny slice of the billions of dollars in exports at stake in the trade dispute between the world’s two largest economies, which threatens to disrupt the flow of everything from steel to electronics. The supply-chain pain felt by sorghum suppliers on the Pacific, Atlantic and Indian oceans underscores how quickly the mounting trade tensions between the U.S. and China can impact the global agricultural sector, which has been reeling from low commodity prices amid a global grains glut.

Twenty ships carrying over 1.2 million tonnes of U.S. sorghum are on the water, according to export inspections data from the USDA’s Federal Grain Inspection Service. Of the armada, valued at more than $216 million, at least five changed course within hours of China’s announcing tariffs on U.S. sorghum imports on Tuesday, Reuters shipping data showed. The five shipments, all headed for China when they were loaded at Texas Gulf Coast export terminals owned by grain merchants Cargill or Archer Daniels Midland would be liable for a hefty deposit to be paid on their value, which could make the loads unprofitable to deliver. Beijing, which is probing U.S. imports for damage to its domestic industry, announced Tuesday that grains handlers would have to put up a deposit of 178.6% of the value of the shipments.

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Thie red lines are far apart. Hard to see how they will resolve this.

EU to Reject UK Brexit Plan for the Irish Border (BBG)

European Union officials are set to reject a potential U.K. solution to the crucial issue of what happens to the Irish border after Brexit, deepening the stalemate in negotiations. While the U.K. hasn’t made a formal proposal, it has indicated that the bloc’s “backstop” solution for maintaining an invisible border should apply to the whole of the U.K., according to three people familiar with the EU position. It would mean the whole U.K. stays in parts of the single market and customs union as a last resort to avoid a border on the island of Ireland. But the European Commission opposes it and only wants to offer that special status to Northern Ireland, according to the people, who declined to be named.

Finding a way to avoid customs checks on the border between Northern Ireland and Ireland after Brexit is proving the biggest obstacle for U.K. and EU negotiators trying to get a deal on Britain’s divorce from the bloc. While both sides agree that withdrawal treaty must include a “backstop” on Ireland in case a better option doesn’t emerge from the final trade deal, they can’t agree on what it should look like. As talks fail to yield solutions, pressure is mounting on Prime Minister Theresa May at home to backtrack on one her main Brexit pledges and keep the U.K. in the EU’s customs union after Brexit.

That would go a long way to solve the Irish border issue and would also please businesses that are keen on keeping cross-border trade easy. The Commission’s proposal would effectively cut Northern Ireland off from mainland Britain and May has said no British prime minister could accept that. In December, the two sides agreed on a backstop that would have applied to the whole of the U.K., rather than just Northern Ireland. The U.K. stands by that agreement, which also pledged that “no regulatory barriers develop between Northern Ireland and the rest of the United Kingdom.”

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Remember: Jim Rickards predicted Turkish default recently. Erdogan may see it too.

Turkey Snap Election All About Power And A ‘Deteriorating’ Economy (CNBC)

Turkey’s president surprised markets Wednesday by announcing that he would hold snap presidential and parliamentary elections in June with experts saying the move is a sign of both panic and genius. Recep Tayyip Erdogan said elections will be held on June 24, far earlier than previously expected, saying uncertainty over Turkey’s neighbor Syria, and macroeconomic imbalances, were a reason not to delay the vote originally scheduled for November 2019. He also said the country urgently needed to make the switch to an executive presidency, implementing changes to the Turkish constitution which give the president more power.

Fadi Hakura, Turkey analyst at Chatham House, told CNBC Thursday that the move was a sign of panic amid a deteriorating economy. “Erdogan’s calling of the election is a sign of panic and despair. Erdogan has previously viewed early elections as weakness and dishonorable to democracy, but now he’s panicking over the state of the Turkish economy,” Hakura said. “The very fact he’s called brought them forward by almost a year and a half should mitigate the fallout of a worsening economy on his popularity,” he said. [..] If Erdogan wins the election, as widely expected, he will be able to consolidate power following changes to the constitution which have changed Turkey from a parliamentary to a presidential republic, concentrating power in the hands of the president.

It will not be plain sailing for the president, however, with Turkey’s economy dealing with high inflation (at 10.2 percent) fueled by fiscal and monetary policies that have promoted rampant growth — the economy expanding 7.3 percent in the fourth quarter of 2017, according to the last reading available. The Turkish lira has been on a rollercoaster ride in recent months, reflecting wider fears on the prioritization of growth over inflation control, but the announcement of a snap election — and the likelihood that Erdogan will win – has calmed the currency somewhat.

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WIth Brazil as corrupt as it is, how long will this hold?

Brazil Prosecutor Recommends Denying Total Oil License Near Amazon (AFP)

A Brazilian prosecutor warned of “ecocide” in recommending against a drilling license for French oil major Total close to a huge coral reef near the mouth of the Amazon River. The prosecutor’s office for Amapa state said “the only way to guarantee avoiding environmental damage to the area is to deny the license.” “Authorizing oil drilling activity without adequate studies violates the international obligations that Brazil has signed,” the prosecutor’s office said late Wednesday, warning of “large-scale environmental destruction that would amount to ecocide and a crime against humanity.”

The recommendation was sent to the government environmental agency Ibama, which has 10 days to respond. On Tuesday, environmental campaigners Greenpeace said that a previously discovered coral reef had been found to extend right into where Total plans to drill. The enormous reef was found in 2016, but is only now said to overlap directly with Total’s blocks, 75 miles (120 km) off the Brazilian coast, the group said. The finding, made during a research expedition, invalidates Total’s environmental impact assessment, which is based on the reefs being located at least five miles (eight kilometers) from drilling, Greenpeace said.

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People say it won’t be that bad, because elephants do well in protected parks. But isn’t that the problem? That the best we can do is build big zoos?

Cow Could Soon Be Largest Land Mammal Left Due To Human Activity (R.)

The cow could be left as the biggest land mammal on Earth in a few centuries, according to a new study that examines the extinction of large mammals as humans spread around the world. The spread of hominims – early humans and related species such as Neanderthals – from Africa thousands of years ago coincided with the extinction of megafauna such as the mammoth, the sabre-toothed tiger and the glyptodon, an armadillo-like creature the size of a car. “There is a very clear pattern of size-biased extinction that follows the migration of hominims out of Africa,” the study’s lead author, Felisa Smith, of the University of New Mexico, said of the study published in the journal Science on Thursday..

Humans apparently targeted big species for meat, while smaller creatures such as rodents escaped, according the report, which examined trends over 125,000 years. In North America, for instance, the mean body mass of land-based mammals has shrunk to 7.6kg (17lb) from 98kg after humans arrived. If the trend continues “the largest mammal on Earth in a few hundred years may well be a domestic cow at about 900kg”, the researchers wrote. That would mean the loss of elephants, giraffes and hippos. In March, the world’s last male northern white rhino died in Kenya. [..] Smith said “my optimist hat would like to say that it’s not going to happen because we love elephants”. But she said populations of large land mammals were falling and “declining population is the trajectory to extinction”.

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Apr 192018
 
 April 19, 2018  Posted by at 8:35 am Finance Tagged with: , , , , , , , , , ,  


Edgar Degas The laundress 1873

 

Triffin Warned Us (Lebowitz)
Global Debt Has Reached A Record High, And 3 Countries Are To Blame – IMF (MW)
Dollar Bears Beware, Trump Tweets May Not Be Enough (Karamanlis)
Facebook Says Users Must Accept Targeted Ads Even Under New EU Law (R.)
Facebook To Put 1.5 Billion Users Out Of Reach Of New EU Privacy Law (R.)
VIX Rigging Talk Erupts on Wall Street After Another Wild Swing (BBG)
UK Government Loses Key Brexit Vote (CNN)
Lawmakers Make Criminal Referral on Clinton, Comey, Lynch to DOJ (Carter)
New York Attorney General Wants Power To Bypass Trump Pardons (R.)
German Prosecutors Raid Homes Of Porsche Executives Over Dieselgate (Pol.)
Turkey Disputes Sovereignty of 152 Greek Islets (GR)
Top Greek Court To Rule Irrevocably On Asylum For Turkish Servicemen (K.)
Americans Waste 150,000 Tons Of Food Each Day – A Pound Per Person (G.)

 

 

We sold our souls to the Debt Devil. There has been no growth for years. We borrowed it all.

Triffin Warned Us (Lebowitz)

Folklore states that Robert Johnson went down to the crossroads in Rosedale, Mississippi and made a deal with the devil in which he swapped his soul for musical virtuosity. In 1944, the United States and many nations made a deal at the crossroads in Bretton Woods, New Hampshire. The agreement, forged at a historic meeting of global leaders, has paid enormous economic benefits to the United States, but due to its very nature, has a flawed incongruity with a dear price that must be paid. In 1960, Robert Triffin brilliantly argued that ever-accumulating trade deficits, the flaw of hosting the reserve currency and the result of Bretton Woods, may help economic growth in the short run but would kill it in the long run.

Triffin’s theory, better known as Triffin’s Paradox, is essential to grasp the current economic woes and, more importantly, recognize why the path for future economic growth is far different from that envisioned in 1944. We believe the financial crisis of 2008 was likely an important warning that years of accumulating deficits and debts associated with maintaining the world’s reserve currency may finally be reaching their tipping point. Despite the last nine years of outsized fiscal spending and unprecedented monetary stimulus, economic growth is well below the pace of recoveries of years past. In fact, as shown below, starting in 2009 the cumulative amount of new federal debt surpassed the cumulative amount of GDP growth going back to 1967. Said differently, if it were not for a significant and consistent federal deficit, GDP would have been negative every year since the 2008 financial crisis.

[..] In 1960, 11 years before Nixon’s suspension of gold convertibility and essentially the demise of the Bretton Woods Agreement, Robert Tiffin foresaw this problem in his book Gold and the Dollar Crisis: The Future of Convertibility. According to his logic, the extreme privilege of becoming the world’s reserve currency would eventually carry a heavy penalty for the U.S. Although initially his thoughts were generally given little consideration, Triffin’s hypothesis was taken seriously enough for him to gain a seat at an obscure congressional hearing of the Joint Economic Committee in December the same year. What he described in the book, and his later testimony, became known as Triffin’s Paradox.

Events have played out largely as he envisioned it. Essentially, he argued that reserve status affords a good percentage of global trade to occur in U.S. dollars. For this to occur the U.S. must supply the world with U.S. dollars. In other words, to supply the world with dollars, the United States would always have to run a trade deficit whereby the dollar amount of imports exceeds the dollar amount of exports. Running persistent deficits, the United States would become a debtor nation. The fact that other countries need to hold U.S. dollars as reserves tends to offset the effects of consistent deficits and keeps the dollar stronger than it would have been otherwise.

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The increase in Chinese debt is staggering. And worrisome.

Global Debt Has Reached A Record High, And 3 Countries Are To Blame – IMF (MW)

Global debt has reached a record high, and three countries account for more than half of it, according to a new International Monetary Fund report released Wednesday. The IMF’s fiscal monitor said total debt reached $164 trillion in 2016, or 225% of global gross domestic product. That includes the debt of governments, households and companies. Compared with the previous peak in 2009, the world is now 12% of GDP deeper in debt, the IMF said. Just three countries — China, Japan and the U.S. — account for more than half of global debt, and China alone accounts for almost three-quarters of the increase in private debt since the financial crisis.

The IMF warns that countries with elevated government debt are vulnerable to a sudden tightening of global financing conditions, and it said advanced economies were resting on their laurels, with deficits remaining unchanged on average. It said the U.S. was the only advanced economy expecting an increase in debt-to-GDP ratio over the next five years. That’s due to the recently enacted tax cuts as well as the big increase in spending. The IMF said its U.S. forecasts are similar to those published by the Congressional Budget Office.

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Trump as currency manipulator?

Dollar Bears Beware, Trump Tweets May Not Be Enough (Karamanlis)

The entrenched bearish dollar view has all the ingredients to become the pain-trade of the year. It has become super crowded based on occasional utterances from the White House while ignoring a fundamental shift at the Fed. The Bloomberg Dollar Spot Index is hovering near a three-year low as uncertainties surrounding the Trump administration weigh on investor confidence. Be it verbal intervention toward a weaker currency, personnel changes or trade protectionism, the U.S. President has had a way of frustrating dollar longs. As a result, any rebounds in the U.S. currency this year have been short- lived. That’s led to a massive build in short-dollar positions. Hedge funds and other large speculators haven’t been more bearish on the greenback in more than five years, CFTC data show.

With less room for additional short exposure, dollar bears are going to need something more than the short-term turbulence generated by Trump. Those hoping for an assist from monetary policy are likely to be sorely disappointed. The Fed isn’t just retaining its bullish stance, it’s looking for a more aggressive rate-hike trajectory than the market anticipates. With almost half of Fed policy makers projecting at least four interest rate increases for 2018, upside risks prevail. Those risks may become more pronounced should the U.S. Senate confirm Richard Clarida as vice chairman. Clarida, no stranger to the notion of a total of four hikes this year, may spark another round of speculation on whether the FOMC could include a price-level target in its policy framework.

Soon-to-be New York Fed President John Williams also advocates such a shift, which Clarida said, in a Pimco commentary back in 2014, would – in theory – result in higher yields on longer-duration bonds. Given the dollar has been feeling the pressure of a flatter curve since late 2016, the all-new Fed may bring an end to fears that the curve’s shape portends a U.S. recession. After all, the composition of voting members this year has shifted from 2017’s dovish roster. Dollar pricing hasn’t reflected that. Even if Trump shifts away from weak-dollar rhetoric and the market catches up with the Fed’s dot plot, the dollar may struggle to gain the 6% needed to retest October’s highs. But that doesn’t mean we’ll see a slide to fresh, sustainable year-to-date lows.

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Users must leave instead.

Facebook Says Users Must Accept Targeted Ads Even Under New EU Law (R.)

Facebook said on Tuesday it would continue requiring people to accept targeted ads as a condition of using its service, a stance that may help keep its business model largely intact despite a new European Union privacy law. The EU law, which takes effect next month, promises the biggest shakeup in online privacy since the birth of the internet. Companies face fines if they collect or use personal information without permission. Facebook Deputy Chief Privacy Officer Rob Sherman said the social network would begin seeking Europeans’ permission this week for a variety of ways Facebook uses their data, but he said that opting out of targeted marketing altogether would not be possible.

“Facebook is an advertising-supported service,” Sherman said in a briefing with reporters at Facebook’s headquarters. Facebook users will be able to limit the kinds of data that advertisers use to target their pitches, he added, but “all ads on Facebook are targeted to some extent, and that’s true for offline advertising, as well.” Facebook, the world’s largest social media network, will use what are known as “permission screens” – pages filled with text that require pressing a button to advance – to notify and obtain approval. The screens will show up on the Facebook website and smartphone app in Europe this week and globally in the coming months, Sherman said.

The screens will not give Facebook users the option to hit “decline.” Instead, they will guide users to either “accept and continue” or “manage data setting,” according to copies the company showed reporters on Tuesday. “People can choose to not be on Facebook if they want,” Sherman said.

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Time to get Facebook out of its misery?!

Facebook To Put 1.5 Billion Users Out Of Reach Of New EU Privacy Law (R.)

If a new European law restricting what companies can do with people’s online data went into effect tomorrow, almost 1.9 billion Facebook Inc users around the world would be protected by it. The online social network is making changes that ensure the number will be much smaller. Facebook members outside the United States and Canada, whether they know it or not, are currently governed by terms of service agreed with the company’s international headquarters in Ireland. Next month, Facebook is planning to make that the case for only European users, meaning 1.5 billion members in Africa, Asia, Australia and Latin America will not fall under the European Union’s General Data Protection Regulation (GDPR), which takes effect on May 25.

The previously unreported move, which Facebook confirmed to Reuters on Tuesday, shows the world’s largest online social network is keen to reduce its exposure to GDPR, which allows European regulators to fine companies for collecting or using personal data without users’ consent. That removes a huge potential liability for Facebook, as the new EU law allows for fines of up to 4 percent of global annual revenue for infractions, which in Facebook’s case could mean billions of dollars. [..] The change affects more than 70 percent of Facebook’s 2 billion-plus members. As of December, Facebook had 239 million users in the United States and Canada, 370 million in Europe and 1.52 billion users elsewhere.

[..] In practice, the change means the 1.5 billion affected users will not be able to file complaints with Ireland’s Data Protection Commissioner or in Irish courts. Instead they will be governed by more lenient U.S. privacy laws, said Michael Veale, a technology policy researcher at University College London. Facebook will have more leeway in how it handles data about those users, Veale said. Certain types of data such as browsing history, for instance, are considered personal data under EU law but are not as protected in the United States, he said.

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If possible, it’ll be done.

VIX Rigging Talk Erupts on Wall Street After Another Wild Swing (BBG)

The Cboe Volatility Index is how Wall Street measures anxiety. Lately it’s the gauge’s own plumbing that’s making people nervous. It’s a recurrent claim – the VIX is rigged. It got a fresh airing Wednesday, when the index swung wildly just as derivatives on it were expiring. Billions of dollars are earned or lost as VIX futures settle. The concern is that owners of those wagers are willing to spend a few million to make them pay off. The suspicions are only that, suspicions. Volatility markets are too complex for easy conclusions to be drawn, and reasonable explanations have been offered for the patterns. But strange-looking outcomes have happened enough on VIX settlement day that the debate keeps being revived.

Cboe Global Markets declined to comment. Last month, Cboe CEO Ed Tilly said at a conference that “the integrity of our VIX products and markets is paramount. And, if our regulatory team were to uncover any manipulation, it would be rooted out, swiftly and decisively. Period.” Evidence the VIX is anything less than a pure readout on trader nerves would raise thorny questions for its overseers, who have succeeded in making it a central piece of Wall Street wiring. Its ability to turn stomachs was on display in February’s stock correction, whose worst moments came when the VIX doubled and wiped out bets on calm.

“You have people watching and using it as a barometer for all sorts of trading decisions,” Steve Sosnick, chief options strategist at Interactive Brokers in Greenwich, Connecticut, said by phone. “People take clues from what it’s doing as to what the market’s psychology is out there. But when the settlement time comes around, it can take on a life of its own.”

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Lost a second one as well, on throwing out Carribeans who’ve lived in Britain for 50+ years.

UK Government Loses Key Brexit Vote (CNN)

The UK Government has lost a key Brexit vote, with the upper House of Parliament backing calls to remain in the EU customs union after Brexit. The House of Lords voted 348 to 225 to amend the government’s EU Withdrawal Bill, which will now return to the House of Commons where the defeat is likely to spur renewed opposition. The amendment requires the government to report to Parliament by October 31 on what steps it has taken to remain in the customs union, which allows goods to flow freely across the EU. The government opposed the amendment. Prime Minister May had previously said Britain will not remain in the customs union after Brexit takes effect. The House of Lords is now considering other amendments to the proposed legislation.

The customs union enables the 28 EU member states, and other countries such as Turkey that have signed up to its rules, to function as a single trading area. In practice, it means that cars made in France can be sent to Italy without facing tariffs or a customs check at the border. Goods made outside the union are allowed to circulate freely once they’ve gained initial entry. However, membership prevents a country from negotiating its own bilateral trade deals with other nations. The ability to agree new trade deals – with the United States or China, for example – is central to Prime Minister Theresa May’s vision for Britain after Brexit. In a speech in September, she ruled out staying in the customs union.

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The Empire strikes back.

Lawmakers Make Criminal Referral on Clinton, Comey, Lynch to DOJ (Carter)

Congressional lawmakers made a criminal referral Wednesday to the Department of Justice Attorney General Jeff Sessions against former senior-level Obama administration officials, including employees of the FBI connected with the unverified dossier alleging collusion between the Trump campaign and Russia, as well as those involved in the warrants used to spy on a former Trump campaign volunteer, this reporter has learned. The lawmakers also made a criminal referral on former Attorney General Loretta Lynch and threats made by her DOJ against the FBI informant, who provided the bureau with information on the Russian nuclear industry and the approval in 2010 to sell roughly 20 percent of American uranium mining assets to Russia.

House Oversight and Government Reform Committee member Rep. Ron DeSantis, R-Florida, along with ten other colleagues sent the letter Wednesday to Sessions and FBI Director Christopher Wray criminally referring former FBI Director James Comey, former Secretary of State Hillary Clinton, former Attorney General Loretta Lynch, and former FBI Deputy Director Andrew McCabe for their involvement in the investigations into President Trump and alleged violations of federal law. FBI Special Agent Peter Strzok and his paramour FBI lawyer Lisa Page, whose anti-Trump text messages obtained by the DOJ Inspector General Michael Horowitz, were also included in the referral.

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Limiting presidential powers may not be such a bad idea in the US. But to do it through a single state governor?

New York Attorney General Wants Power To Bypass Trump Pardons (R.)

New York’s attorney general on Wednesday asked Governor Andrew Cuomo and state legislators to give him and other local prosecutors power to bring criminal charges against people pardoned by U.S. President Donald Trump. In a letter, Attorney General Eric Schneiderman urged Cuomo and legislative leaders to close a loophole in New York’s double jeopardy law shielding recipients of presidential pardons from state prosecution. A change could make it more difficult for Trump aides and others who might be pardoned to escape criminal prosecution, even if special counsel Robert Mueller’s probe into possible Russian interference in the 2016 presidential election were curbed or shut down.

The president has no constitutional power to pardon state crimes, but Schneiderman said the current law means defendants pardoned for serious federal crimes could be freed from “all accountability” under state criminal law. Schneiderman, a Democrat in his eighth year as attorney general, has made his office a central figure in blue state challenges to Trump, tangling with the Republican president on such matters as consumer finance, the environment, immigration and the 2020 census. Cuomo, a Democrat, is reviewing Schneiderman’s proposal, and “believes that the federal legal system should not provide a basis for any wrong doers to escape justice,” press secretary Dani Lever said in a statement.

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33 prosecutors alone were involved.

German Prosecutors Raid Homes Of Porsche Executives Over Dieselgate (Pol.)

German police carried out raids at properties linked to three current and former executives at Porsche today in connection with allegations of emissions cheating by the Volkswagen subsidiary. The raids covered ten properties across the states of Baden-Württemberg and Bavaria. The Stuttgart prosecutors office said in a statement they were “in connection with the manipulation of the emission control system of diesel cars.” Two of the executives still work for the carmaker, with one former employee also investigated as part of the probe. The individuals were not named by the prosecutor.

Porsche confirmed that documents were taken as part of the raids, adding that an Audi facility in Ingolstadt was also visited by authorities on Wednesday. The two carmakers said they are cooperating with investigating teams. Previously, authorities in Stuttgart, where Porsche is based, and Munich have launched smaller raids on homes and offices connected with officials at Audi and BMW over alleged emissions cheating. Volkswagen was caught out by U.S. authorities in September 2015 for installing defeat device software in 11 million diesel vehicles sold worldwide. Since then, the carmaker has agreed to pay out some $25 billion in compensation and settlements in the U.S.

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Erdogan called a snap poll on June 24. Then he can really act as an emperor. Beware.

Turkey Disputes Sovereignty of 152 Greek Islets (GR)

Ankara has issued a list of 152 Greek islets, disputing their sovereignty and the international treaties that have established the status quo in the Aegean. The list is called EGAYDAAK, the acronym for “Egemenligi Anlasmalarla Yunanistan’a Devredilmemis Ada Adacıkve Kayaliklar”, meaning “islands, islets and rocky islets the sovereignty of which was not granted to Greece under international agreements and treaties”. The list includes more than 20 islet formations belonging to the Fournoi Complex, a cluster of uninhabited islets between Ikaria, Samos and Patmos. Turkey’s aim is to bring Greece to the table and revise the 1923 Treaty of Lausanne and the 1947 Treaty of Paris, the two international agreements that granted the islets to Greece, establishing the sea borders between the two countries in the Aegean.

The issue has been brought up again after Turkish Prime Minister Binali Yildirim said that the Turkish coast guard removed a Greek flag on the Mikros Anthropofas rocky formation. However, new photos show the flag is still flying. The two Anthropofas islets are between Ikaria, Lemnos, Samothraki, Lesvos, Chios and Samos; therefore they are included in Article 12 of the Treaty of Lausanne that says all the above belong to Greece. Turkey, however, claims that since the islets and rocky formations are not specifically listed by name in the two international treaties, their sovereignty is contestable.

The EGAYDAAK list is comprised of the Zourafas complex and the Oinousses complex of islets in the North Aegean; the Kalogeroi complex of islets in the Central Aegean; the Fournoi complex in the East Aegean; the Arkoi, Agathonissi, Farmakonissi, SE Nissyros, SA Astpalea, NW Karpathos complexes of islets in the South Aegean; and the Cretan Sea complex of islets.

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Independent judiciary.

Top Greek Court To Rule Irrevocably On Asylum For Turkish Servicemen (K.)

Greece’s top administrative court is expected to rule on Thursday on whether the country can provide asylum to the eight Turkish officers whose extradition has repeatedly been demanded by Ankara. The Council of State carries the burden of resolving the asylum issue, in a high-profile case that has rattled relations between Greece and Turkey. The Supreme Court has ruled irrevocably against their extradition arguing they will not be given a fair trial in Turkey. The decision drew an angry rebuke from Ankara which accuses the eight of involvement in the country’s foiled coup attempt in July 2016.

If the court grants protection to “Turkey’s eight,” as they have become known, they will have to be immediately released from detention where they have remained for months while they wait for their application to be examined. An asylum appeals committee had ruled in favour of one of the servicemen in December 2017 but the government appealed the decision. If the court decides to reject their asylum request, then the government will have to issue documents that will allow them to remain in the country under a special status.

Whatever the ruling, the soldiers will have to be released at the end of May, when the maximum detention period of 18 months expires. Justice Minister Stavros Kontonis confirmed earlier this week the Turkish servicemen will be allowed to walk free when this period is completed. The eight men, three majors, three captains and two sergeant-majors, flew with a helicopter into northern Greece a day after the failed coup and sought asylum, saying they feared for their lives if they remained in Turkey.

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This is what our economies run on. Waste. Cutting the waste is an economic threat.

Americans Waste 150,000 Tons Of Food Each Day – A Pound Per Person (G.)

Americans waste about a pound of food per person each day, with people who have healthier diets rich in fruit and vegetables the most wasteful, research has found. About 150,000 tons of food is tossed out in US households each day, equivalent to about a third of the daily calories that each American consumes. Fruit and vegetables were the most likely to be thrown out, followed by dairy and then meat. This waste has an environmental toll, with the volume of discarded food equivalent to the yearly use of 30m acres of land, 780m pounds of pesticide and 4.2tn gallons of irrigated water. Rotting food also clogs up landfills and releases methane, a powerful greenhouse gas.

Researchers at the US Department of Agriculture analysed eight years of food data, up to 2014, to see where food is wasted and also what members of the public say they do at mealtimes. The research has been published in Plos One. The study found that the healthiest Americans are the most wasteful, because of their high consumption of fruits and vegetables, which are frequently thrown out. Fruit and vegetables require less land to grow than than other foods, such as meat, but require a large amount of water and pesticides. Lisa Jahns, a nutritionist at USDA and co-author of the study, said: “We need a simultaneous effort to increase food quality as well as reduce food waste. We need to put both of those things out.”

Jahns’s study recommends educating consumers on fruit and vegetable storage in order to reduce food waste. She said: “Consumers aren’t connecting the dots, [and] they don’t see the cost when they throw food in the trash. At the same time, we don’t want to undermine legitimate food safety concerns and we need to be aware it’s not just the cost of food that’s the issue. It’s the time and energy required to prepare and store food, which often isn’t a priority in a busy household.”

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Apr 092018
 
 April 9, 2018  Posted by at 9:18 am Finance Tagged with: , , , , , , , , , , ,  


Andreas Feininger Production B-17 heavy bomber 1942

 

Syria and Russia Accuse Israel Of Missile Attack On Syrian Regime Airbase (G.)
Stocks To Retest Correction Lows As Easy Money Disappears – Boockvar (CNBC)
Albert Edwards On The Next Recession: S&P Below 666 (ZH)
Bad Omen for Markets From First Signs of Yield Curve Inversion
Trump’s Trade War Threatens Central Bank ‘Put’ – Deutsche (BBG)
China Is Studying Yuan Devaluation as a Tool in Trade Spat (BBG)
YouTube Illegally Collects Data On Children – Child Protection Groups (G.)
Number Of UK Buy-to-Let Landlords Reaches Record High (Ind.)
Public Backs Fresh Referendum On ‘Final Say’ On Terms Of Brexit Deal (Ind.)
Murderers & Thieves Sold Out America – Gerald Celente (USAW)
Shell Predicted Dangers Of Fossil Fuels And Climate Change In 1980s (Ind.)
Indigenous People Are Being Displaced Again – By Gentrification (Latimore)
Fish Populations In Great Barrier Reef Collapse After Bleaching Events (Ind.)

 

 

I don’t want TAE to be about warfare, but this situation is getting so absurd it’s starting to feel dangerous. Don’t believe the narrative.

Syria and Russia Accuse Israel Of Missile Attack On Syrian Regime Airbase (G.)

Israeli war planes have bombed a Syrian regime airbase east of the city of Homs, the Russian and Syrian military have said. The Russian military said that two Israeli F-15 war planes carried out the strikes from Lebanese air space, and that Syrian air defence systems shot down five of eight missiles fired. Asked about the Russian statement, an Israeli military spokesman said he had no immediate comment. Syrian state TV reported loud explosions near the T-4 airfield in the desert east of Homs in the early hours of Monday. State TV initially reported that the attack was “most likely” American, a claim the Pentagon has denied.

Video footage on social media in Lebanon showed aircraft or missiles flying low over the country, apparently heading east towards Syria. At least 14 people, mostly Iranians or members of Iran-backed groups, were killed, the UK-based Syrian Observatory for Human Rights monitoring group said. Donald Trump warned on Sunday that the regime and its backers would pay a “high price” for the use of chemical weapons in the attack on rebel-held Douma that killed 42 people, but the Pentagon denied US forces were involved in Monday’s strikes. “However, we continue to closely watch the situation and support the ongoing diplomatic efforts to hold those who use chemical weapons, in Syria and otherwise, accountable,” a Pentagon spokesman said.

Separately, the White House put out an account of a telephone conversation between Trump and Emmanuel Macron, in which the US and French presidents “agreed to exchange information on the nature of the attacks and coordinate a strong, joint response”. Macron has said chemical weapons attacks in Syria would cross a “red line” for France and that French forces would strike if the regime was proven to have been involved. However, the French army denied responsibility for Monday’s attack.

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When the easy money goes, everything follows.

Stocks To Retest Correction Lows As Easy Money Disappears – Boockvar (CNBC)

He’s a Wall Street bear who sees more monster market moves coming — with the majority of them leaving stocks deep in the red. The Bleakley Advisory Group’s Peter Boockvar warns there’s more trouble brewing, because the era of easy money is ending, thanks to global central banks hiking borrowing costs. And as fears intensify over a trade war, Boockvar expects a solution to the tariff issue will eventually come at the expense of rising rates. “We could get that resumption of higher interest rates which would then concern the markets, and then retest the [S&P 500 Index] 2500-ish type lows,” the firm’s chief investment officer told CNBC’s “Futures Now” last week.

“We’re late cycle in the market. We’re late cycle in the economy, and you have an intensification in a tightening of monetary policy,” he said. Boockvar, a CNBC contributor, blamed the end of quantitative easing in the United States and Europe for increasing sell-off risks. “We’re a step closer to them wanting to take away negative interest rates. But there are still trillions of dollars of global bonds that have negative yielding rates,” he added. “So, it’s this rate environment that I think is becoming more of a headwind. That really is my main concern.” He doesn’t believe the situation will abate any time soon. Boockvar contended the 10-Year Treasury yield will push back toward 3 percent — preventing the S&P 500 from cracking above its Jan. 26 record high anytime soon.

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Barron’s interview with Albert Edwards via ZH, who add a little David Rosenberg intro:

Albert Edwards On The Next Recession: S&P Below 666 (ZH)

The Fed generally tightens rates until something breaks. David Rosenberg points out that since 1950 there have been 13 Fed tightening cycles, and 10 of them ended in recession (while the others have often ended in emerging market blow-ups, like the 1994 Mexican peso crisis). Surging delinquency and charge-off rates for smaller banks suggest the breaking point for the economy may come sooner than the Fed and bulls expect.

What happens to stocks during the next recession? The Federal Reserve managed to short-circuit this derating process. In 2011, when quantitative easing, or QE, really kicked in, equity re-engaged with bond yields and P/Es expanded. Like an artificial stimulant, QE inflated all asset prices away from fundamental value and from where they would otherwise have gone. We haven’t seen the lows in bond yields. In the next recession, bond yields in the U.S. will go negative and converge with those in Germany and Japan. The forward U.S. P/E bottomed at about 10.5 times in March 2009 on trough earnings. That was lower than the previous recession.

In the next recession, I would expect the P/E to bottom at about seven times, a lower low with earnings about 30% lower because of the recession. That would put the S&P lower than the 666 low of the previous crash, versus 2671 Thursday afternoon. If a recession unfolds, easy monetary policy won’t stop the market from collapsing. It will play itself out.

When will the recession hit: The Conference Board’s leading indicators look OK for now. What’s different is that problems in the real economy aren’t being reflected in the stock and bond markets. What we may see is the reverse: The stock market and parts of the credit markets collapse and cause problems in the real economy. If confidence collapses because the equity market collapses, then a recession unfolds.

Will the US be hit harder than Japan and Europe in the next bear market? It should be. Traditionally, if the U.S. goes down 20%, the German Dax, though it is cheaper, would tend to go down a little more. Maybe this time it won’t. Japan is the one market we do like now on a long-term basis, and one of the reasons is the buildup of U.S. corporate debt during these past few years. The big bubble is U.S. corporate debt. In contrast, Japan’s corporate debt is collapsing. Over half of its companies have more cash than debt. When the Fed buys U.S. Treasuries, it pulls down all yields. There has been demand for yield, so investors look at corporate bonds as an alternative. Companies have been very keen to issue them, and they have used the money to buy back stock or as a way to enrich management. This is the way QE has washed through the system here.

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“..rising expectations of a Fed policy mistake.. We could argue that mistake is 10 years old by now.

Bad Omen for Markets From First Signs of Yield Curve Inversion

The forward curve of a closely watched proxy for the Federal Reserve’s policy rate has slightly inverted, signaling investors are either pricing in a mistake from central bankers or end-of-cycle dynamics, according to JPMorgan Chase. The inversion of the one-month U.S. overnight indexed swap rate implies some expectation of a lower Fed policy rate after the first quarter of 2020, the bank’s strategists including Nikolaos Panigirtzoglou, wrote in a note Friday. “An inversion at the front end of the U.S. curve is a significant market development, not least because it occurs rather rarely,” they said. “It is also generally perceived as a bad omen for risky markets.”

The negative market signal comes as investors grapple with higher short term borrowing costs, which have risen in the U.S. to levels unseen since the financial crisis. While the strategists admit it is difficult to discern which of the two explanations for the curve inversion carries more weight, flow data suggests it is more likely to be rising expectations of a Fed policy mistake.

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No, Bloomberg, we know that China can’t dump Treasuries. The “end of Chimerica” sounds poetic though.

Trump’s Trade War Threatens Central Bank ‘Put’ – Deutsche (BBG)

A breakdown in the relationship between dollar weakness and Asian central bank intervention poses a risk to Treasuries, stocks and all risky assets, according to Deutsche Bank. Attempts by the Trump administration to clamp down on currency manipulation have limited the ability of central banks across the region to buy U.S. assets when the dollar weakens, and dampen the appreciation of their currencies, strategist Alan Ruskin write in a note Friday. These purchases have historically limited the greenback’s downside and acted as a “put” on Treasury market weakness, he wrote. Such central bank puts are usually associated with successive Federal Reserve chairs willing to support the wider market with loose monetary policy.

While such puts have been a continuous focus for investors, markets now risk overlooking other sources of central bank support that may be slipping as the U.S.’s “synergistic relationship with China,” comes to an end, according to Ruskin. “It is not a coincidence that in this recent period of dollar weakness, Treasury bonds were also soft,” he said. “Historically, foreign central banks of sizable current account surplus countries like China, Taiwan, Korea and Thailand would have been intervening.” According to the strategist, the “end of Chimerica” means American current account deficits are no longer financed to the same degree by Asian central bank reserve recycling of corresponding trade surpluses. That reduction in demand for Treasuries from foreign reserves is coming at a time when U.S. fiscal supply is set to increase dramatically, putting extra pressure on the country’s bond market.

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This is more likely. Risky for China though, but there must be plans to shore up domestic firms.

China Is Studying Yuan Devaluation as a Tool in Trade Spat (BBG)

China is evaluating the potential impact of a gradual yuan depreciation, people familiar with the matter said, as the country’s leaders weigh their options in a trade spat with U.S. President Donald Trump that has roiled financial markets worldwide. Senior Chinese officials are studying a two-pronged analysis of the yuan that was prepared by the government, the people said. One part of the analysis looks at the effect of using the currency as a tool in trade negotiations with the U.S., while a second part examines what would happen if China depreciates the yuan to offset the impact of any trade deal that curbs exports. The analysis doesn’t mean officials will carry out a devaluation, which would require approval from top leaders, the people said.

The yuan erased early gains on Monday, weakening 0.1 percent to 6.3110 per dollar in onshore trading at 3:32 p.m. local time. While Trump regularly bashed China on the campaign trail for keeping its currency artificially weak, the yuan has gained about 9 percent against the greenback since he took office as China’s economic growth stabilized, the government clamped down on capital outflows and fears of a credit crisis receded. The Chinese currency touched the strongest level since August 2015 last month and has remained steady in recent weeks despite an escalation of trade tensions between the world’s two largest economies.

While a weaker yuan could help President Xi Jinping shore up China’s export industries in the event of widespread tariffs in the U.S., a devaluation comes with plenty of risks. It would make it easier for Trump to follow through on his threat to brand China a currency manipulator, make it more difficult for Chinese companies to service their mountain of offshore debt, and undermine recent efforts by the government to move toward a more market-oriented exchange rate system. It would also expose China to the risk of local financial-market volatility, something authorities have worked hard to subdue in recent years.

When China unexpectedly devalued the yuan by about 2 percent in August 2015, the move sent shock-waves through global markets. “Is it in their interest to devalue yuan? It’s probably unwise,” said Kevin Lai, chief economist for Asia ex-Japan at Daiwa Capital Markets Hong Kong Ltd. “Because if they use devaluation as a weapon, it could hurt China more than the U.S. The currency stability has helped to create a macro stability. If that’s gone, it could destabilize markets, and things would look like 2015 again.”

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No really, it’s everywhere. What they can do, they will.

YouTube Illegally Collects Data On Children – Child Protection Groups (G.)

A coalition of 23 child advocacy, consumer and privacy groups have filed a complaint with the US Federal Trade Commission alleging that Google is violating child protection laws by collecting personal data of and advertising to those aged under 13. The group, which includes the Campaign for a Commercial-Free Childhood (CCFC), the Center for Digital Democracy and 21 other organisations, alleges that despite Google claiming that YouTube is only for those aged 13 and above, it knows that children under that age use the site. The group states that Google collects personal information on children under 13 such as location, device identifiers and phone numbers and tracks them across different websites and services without first gaining parental consent as required by the US Children’s Online Privacy Protection Act (Coppa).

The coalition urges the FTC to investigate and sanction Google for its alleged violations. “For years, Google has abdicated its responsibility to kids and families by disingenuously claiming YouTube — a site rife with popular cartoons, nursery rhymes, and toy ads — is not for children under 13,” said Josh Golin, executive director of the CCFC. “Google profits immensely by delivering ads to kids and must comply with Coppa. It’s time for the FTC to hold Google accountable for its illegal data collection and advertising practices.”

The group claims that YouTube is the most popular online platform for children in the US, used by about 80% of children aged six to 12 years old. Google has a dedicated app for children called YouTube Kids that was released in 2015 and is designed to show appropriate content and ads to children. It also recently took action to hire thousands of moderators to review content on the wider YouTube after widespread criticism that it allows violent and offensive content to flourish, including disturrbing children’s content and child abuse videos.

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Bizarro housing.

Number Of UK Buy-to-Let Landlords Reaches Record High (Ind.)

The number of buy-to-let investors in the UK rose to a record high of 2.5 million in the latest tax year, new research shows. The increase of 5% on the previous year comes despite the introduction of a host of extra taxes and regulations on the sector. In recent years, the government has brought in a 3% Stamp Duty levy, new stress tests for home loans, and ended mortgage interest tax relief. The number of landlords has increased 27% in the past five years, up from 1.97 million in 2011-12, research by London-focused estate agent Ludlow Thompson found.

Landlords now own an average of 1.8 buy-to-let properties each – a figure that has risen for the fifth consecutive year. The data suggests that landlords continue to see residential property, especially in London, as a strong investment, despite signs that house price growth has stalled or even gone into reverse in some areas in the last year. Investors have seen annual returns of almost 10% since 2000, Ludlow Thompson said. Chairman Stephen Ludlow said the rising number of landlords shows the enduring appeal of investing in buy-to-let. “The long-term picture for the buy-to-let market remains strong,” he said.

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No chance of a second vote for now. But that may change yet.

Public Backs Fresh Referendum On ‘Final Say’ On Terms Of Brexit Deal (Ind.)

Support is growing for a fresh referendum on the final Brexit deal, according to a new poll showing the public back the idea for the first time. The survey found that 44% of people want a vote on the exit terms secured by Theresa May, amid continued uncertainty over the withdrawal agreement. That is a clear eight points ahead of the 36% who reject a further referendum, the research conducted for the anti-Brexit Best for Britain group showed. The group pointed to evidence that “Brexit is sharpening the British public’s minds” and called for MPs to respond to the people’s growing desire for a “final say”.

The referendum would be held on the details of the deal the prime minister must strike by the autumn – on both the planned transition period and a “framework” for a permanent trade and security relationship. Eloise Todd, Best for Britain’s chief executive, said voters should be allowed to choose between the details of the future on offer outside the EU, or staying inside the bloc. “Now there is a decisive majority in favour of a final say for the people of our country on the terms of Brexit. This poll is a turning point moment,” she said. “The only democratic way to finish this process is to make sure the people of this country – not MPs across Europe – have the final say, giving them an informed choice on the two options available to them: the deal the government brings back and our current terms.

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Celente rants are always good.

Murderers & Thieves Sold Out America – Gerald Celente (USAW)

Renowned trends researcher Gerald Celente says the trade war President Trump is starting against China must be fought for America to survive. Celente explains, “We have lost 3.5 million jobs (to China). Some 70,000 manufacturing plants have closed. Why would anybody be fighting Trump to do a reversal of us being in a merchandise trade deficit of $365 billion? Tell me any two people that would do business with each other and one side takes a huge loss and keeps taking it. . . So, why would people argue and fight and bring down the markets because Trump wants to bring back jobs and readjust a trade deficit that, by any standard, is destroying the nation?” Who’s to blame for the lopsided trade deficits destroying the middle class of America?

Look no further than the politicians and corporations buying them off. Celente charges, “They sold us out. The European companies and the American companies sold us out, and the people fighting Trump are also the big retailers because they’ve got their slave labor making their stuff over there. They bring it back here and mark up the price, and they make more money. If they have to pay our people to do that work, they have to pay them a living wage and they can’t make enough profit. That’s who is fighting us. . You go back to our top trend in 2017, and it was China was going to be the leader in AI (artificial intelligence) now and beyond, and that is exactly what happened. All the corporations have sold us out. . . .The murderers and the thieves sold out America.”

Celente thinks the odds are there will not be a financial crash in 2018 “because they are repatriating all that dough from overseas at a very low tax rate and because of the tax cuts from 35% to 21%. These are the facts. In the first three months of this year, there have been more stock buybacks and mergers and acquisitions activity than ever before in this short period of time because of all that cheap money going back into the corporations. That’s what’s keeping the markets up.”

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Shell’s political power will shield it.

Shell Predicted Dangers Of Fossil Fuels And Climate Change In 1980s (Ind.)

Oil giant Shell was aware of the consequences of climate change, and the role fossil fuels were playing in it, as far back as 1988, documents unearthed by a Dutch news organisation have revealed. They include a calculation that the oil company’s products alone were responsible for 4% of total global carbon emissions in 1984. They also predict that changes to sea levels and weather would be “larger than any that have occurred over the past 12,000 years”. As a result, the documents foresee impacts on living standards, food supplies and other major social, political and economic consequences.

In The Greenhouse Effect, a 1988 internal report by Shell scientists, the authors warned that “by the time the global warming becomes detectable it could be too late to take effective countermeasures to reduce the effects or even to stabilise the situation”. They also acknowledged that many experts predicted an increase in global temperature would be detectable by the end of the century. They went on to state that a “forward-looking approach by the energy industry is clearly desirable”, adding: “With the very long time scales involved, it would be tempting for society to wait until then before doing anything. “The potential implications for the world are, however, so large that policy options need to be considered much earlier. And the energy industry needs to consider how it should play its part.”

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Money trumps history.

Indigenous People Are Being Displaced Again – By Gentrification (Latimore)

It is symptomatic of the colonial-settler prerogative that has sought to eliminate the offensive presence of the natives from any profitable territory. In 21st-century Australia, the “dispersal” that began with European invasion continues through the gentrification of city suburbs where Indigenous identities persist. In the colonial argot of the 19th century, dispersal euphemistically described a bloody practice of massacre and forced dispossession of First Nations peoples, often performed as punishment for perceived theft, or any other form of resistance to the colonisers more generally. In the early and mid-20th century, blackfullas were forcibly coerced into government reserves most commonly known as “missions”.

The overarching intent of these “protection” policies was to ensure the dissolution of First Nations culture and traditional governance structures, pushing mob to develop from “their former primitive state to the standards of the white man”, as the Aboriginal Protection Board said in 1935. When the missions began to be disbanded after the second world war, it forced significant Indigenous migration from the bush to towns and cities, where we repopulated places like Fitzroy, Brisbane’s West End and particularly Redfern in great numbers. This 1950s policy of “assimilation” was essentially a state-sanctioned experiment to force Indigenous people to give up their beliefs and traditions as they adapted to urban life.

[..] Yet the place of blackfullas in Australia’s cities is under threat. Faced with rapid gentrification and associated rental and ownership price hikes, urban Indigenous populations continue to relocate to the outer suburbs, where cheaper housing is usually located. The trend could be viewed as a contemporary iteration of the dispersals of the past – decidedly less bloody, though equally impelled by capitalistic imperatives.

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Logic.

Fish Populations In Great Barrier Reef Collapse After Bleaching Events (Ind.)

The coral bleaching events that have devastated the Great Barrier Reef in recent years have also taken their toll on the region’s fish population, according to a new study. While rising temperatures on the reef killed nearly all the coral in some sections, the effects on the wider marine community have been less clear. Now, scientists have begun to establish the long-term effects of bleaching events on the Great Barrier Reef’s fish population. This work is essential for researchers trying to understand what will happen to coral reef ecosystems as global warming makes mass bleaching events more frequent. “The widespread impacts of heat stress on corals have been the subject of much discussion both within and outside the research community,” said PhD student Laura Richardson of the ARC Centre of Excellence for Coral Reef Studies.

“We are learning that some corals are more sensitive to heat stress than others, but reef fishes also vary in their response to these disturbances.” Ms Richardson and her collaborators studied reefs in the northern section of the Great Barrier Reef, where around two-thirds of corals were killed in the 2016 bleaching event that followed a global heatwave. The researchers found there were “winners” and “losers” among the fish species on the reef, but overall there was a significant decline in the variety of species following bleaching. Their results were published in the journal Global Change Biology. “Prior to the 2016 mass bleaching event, we observed significant variation in the number of fish species, total fish abundance and functional diversity among different fish communities,” said co-author Dr Andrew Hoey.

“Six months after the bleaching event, however, this variation was almost entirely lost.” Predictably, the scientists noted that fish with intimate associations with corals suffered severe losses. Butterflyfish, which feed on corals, faced the steepest declines. In response to the looming threat of coral bleaching, scientists have called for “radical interventions” to save the world’s reefs. Some have suggested that more than 90% of corals could die by 2050 at the current rate of global warming.

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Mar 282018
 
 March 28, 2018  Posted by at 9:36 am Finance Tagged with: , , , , , , , , , , , , ,  


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.

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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.

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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.

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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.

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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?”

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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.

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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.”

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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.

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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.

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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.

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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.”

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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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Mar 272018
 


Paul Klee Cat 1939

 

Dow Surges 670 Points But Stock Market Is On The Brink Of A Breakdown (MW)
Trump Sends To-Do List to China on Trade (WS)
America’s State Wreck Gathers Steam Part 2 (Stockman)
Integrity Has Vanished From The West (Paul Craig Roberts)
Western Allies Expel Scores Of Russian Diplomats Over Skripal Attack (G.)
New Zealand Says It Would Expel Russian Spies … But It Can’t Find Any (G.)
Whistleblower Questions Brexit Result, Says Campaigners Broke Election Law (R.)
Brexit Referendum Campaign Accused of Breaking Spending Rules (BBG)
Theresa May Stands By Adviser Who Outed Brexit Whistleblower (G.)
Underfunded Public Pensions To Persist (R.)
Hood Ornament Buffer (Jim Kunstler)
Meeting Paris Agreement Targets Will Take Massive Cuts in Emissions (BBG)
Ultra-Thin Sun Shield Could Protect Great Barrier Reef (AFP)
Brazil Senate Considers Lifting Ban On Sugarcane Production In Amazon (G.)

 

 

What you’re watching is not real.

Dow Surges 670 Points But Stock Market Is On The Brink Of A Breakdown (MW)

The stock market surged on Monday—and it really needed to. U.S. stocks are coming off the biggest weekly decline in more than two years, and the aftermath of that drop has market technicians warning that major indexes are on the verge of a full-fledged, technical breakdown. “The extent of the deterioration in equities is very much a concern given the combination of near-term technical damage, along with the decline in longer-term momentum after having reached record overbought conditions into late January,” wrote Mark Newton at Newton Advisors, in a Monday research note. Here are some levels that the market is trying to defend or retake after last week’s withering action:

A Dow Theory sell signal was close to forming. According to MarketWatch columnist Mark Hulbert there are a number of steps, but as of Friday, the market had just to see the Dow Jones Transportation Average close below its Feb. 9 low of 10,136.61 to trigger that sell signal after the Dow Jones Industrial Average DJIA, on Friday closed below its February low. On Monday, the transports closed up 2.1% at 10,373.21.

According to data from Michael O’Rourke, chief market strategist at JonesTrading, a little more than half of Dow components were trading below their 200-day moving averages, which hadn’t happened since 2015. Meanwhile, about 50% of the S&P 500 components were trading above their 200-day moving averages, with a break below indicating “notable technical damage has been done to this market,” O’Rourke wrote.

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All obvious.

Trump Sends To-Do List to China on Trade (WS)

Negotiations – led on the US side by Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer, and on the Chinese side by Liu He, a newly anointed vice premier and President Xi Jinping’s top economic adviser – about how to address the gigantic China-US trade imbalance have quietly begun, the infamous “people with knowledge of the matter” told the Wall Street Journal. On Saturday, Mnuchin called Liu, which was confirmed by the Treasury Department. A spokesman said that they “also discussed the trade deficit between our two countries and committed to continuing the dialogue to find a mutually agreeable way to reduce it.” Now Mnuchin is considering a trip to Beijing to pursue the negotiations, one of these people told the Wall Street Journal.

And last week, according to these people, Mnuchin and Lighthizer sent Liu a to-do list on trade with specific items the White House wants China to undertake, including:
• A reduction of the 25% tariffs that China imposes on US-made cars
• Increased purchases by China of US-made semiconductors. China would need to shift these purchases from Japanese and South Korean manufacturers, which aren’t going to be happy
• Reduce subsidies to state-owned enterprises
• Provide more regulatory transparency
• Ease restrictions on US companies in China, particularly requirements that they operate as joint ventures in which the US company’s ownership may be limited to 51%
• Giving US financial firms greater access to the Chinese market.

Clearly, in leaking these negotiations and the existence of this to-do list to the financial press, the White House is hoping to calm the markets, because the last thing it wants is to preside over a stock market plunge, though the stock market has all the best reasons to swoon, and the US-China trade situation isn’t needed to accomplish that.

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“Trump’s new War Cabinet of John Bolton, Mike Pompeo, Gina Haspel and Mad Dog Mattis is arguably the most interventionist, militarist, confrontationist and bellicose national security team ever..”

America’s State Wreck Gathers Steam Part 2 (Stockman)

Last week the Donald’s incipient trade war got Wall Street’s nerves jangling, but that wasn’t the half of what’s coming. To wit, Trump has now essentially formed a War Cabinet and signed a Horribus spending bill that is a warrant for fiscal meltdown. Indeed, the two essentially comprise a self-fueling doom loop which means Washington’s descent into fiscal catastrophe is well-nigh unstoppable; it’s all over except for the screaming in the bond pits. That is, Trump’s new War Cabinet of John Bolton, Mike Pompeo, Gina Haspel and Mad Dog Mattis is arguably the most interventionist, militarist, confrontationist and bellicose national security team ever assembled by a sitting President.

We cannot think of a single country that has even looked cross-eyed at Washington in recent years where one or all four of them has not threatened to drone, bomb, invade or decapitate its current ruling regime. That means Imperial Washington’s rampant War Fever owing to the Dem-left declaration of war on Russia and Putin is now about to be drastically intensified by the complete victory of the neocon-right in the Trump Administration. The result will be sharpened confrontation, if not actual outbreak of hostilities, across the full spectrum of adversaries – Iran, Russia, China, Syria and North Korea – and an escalating tempo of military operations and procurement to implement the policy.

At the same time, the Donald’s pathetic Fake Veto maneuver on Friday cemented the special interest lobbies’ absolute control over domestic appropriations. Of course, Chuckles Schumer and Nancy Pelosi crowed loudly about the $63 billion annual domestic spending increase they got in return for the Donald’s $80 billion defense add-on, but the victory was not partisan; it belonged to the Swamp creatures who suckle the politicians of both parties and own the appropriations committees lock, stock and barrel.

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TV was just a first step in creating opinions from scratch. We can do much more than that now. Will we still curtail Facebook, Google?

Integrity Has Vanished From The West (Paul Craig Roberts)

Among Western political leaders there is not an ounce of integrity or morality. The Western print and TV media is dishonest and corrupt beyond repair. Yet the Russian government persists in its fantasy of “working with Russia’s Western partners.” The only way Russia can work with crooks is to become a crook. Is that what the Russian government wants? Finian Cunningham notes the absurdity in the political and media uproar over Trump (belatedly) telephoning Putin to congratulate him on his reelection with 77% of the vote, a show of public approval that no Western political leader could possibly attain. The crazed US senator from Arizona called the person with the largest majority vote of our time “a dictator.” Yet a real blood-soaked dictator from Saudi Arabia is feted at the White House and fawned over by the president of the United States.

The Western politicians and presstitutes are morally outraged over an alleged poisoning, unsupported by any evidence, of a former spy of no consequence on orders by the president of Russia himself. These kind of insane insults thrown at the leader of the world’s most powerful military nation—and Russia is a nation, unlike the mongrel Western countries—raise the chances of nuclear Armageddon beyond the risks during the 20th century’s Cold War. The insane fools making these unsupported accusations show total disregard for all life on earth. Yet they regard themselves as the salt of the earth and as “exceptional, indispensable” people.

Think about the alleged poisoning of Skirpal by Russia. What can this be other than an orchestrated effort to demonize the president of Russia? How can the West be so outraged over the death of a former double-agent, that is, a deceptive person, and completely indifferent to the millions of peoples destroyed by the West in the 21st century alone. Where is the outrage among Western peoples over the massive deaths for which the West, acting through its Saudi agent, is responsible in Yemen? Where is the Western outrage among Western peoples over the deaths in Syria? The deaths in Libya, in Somalia, Pakistan, Ukraine, Afghanistan? Where is the outrage in the West over the constant Western interference in the internal affairs of other countries? How many times has Washington overthrown a democratically-elected government in Honduras and reinstalled a Washington puppet?

The corruption in the West extends beyond politicians, presstitutes, and an insouciant public to experts. When the ridiculous Condi Rice, national security adviser to president George W. Bush, spoke of Saddam Hussein’s non-existent weapons of mass destruction sending up a nuclear cloud over an American city, experts did not laugh her out of court. The chance of any such event was precisely zero and every expert knew it, but the corrupt experts held their tongues. If they spoke the truth, they knew that they would not get on TV, would not get a government grant, would be out of the running for a government appointment. So they accepted the absurd lie designed to justify an American invasion that destroyed a country.

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Diplomats are stationed abroad to make communication possible. This does not help.

Western Allies Expel Scores Of Russian Diplomats Over Skripal Attack (G.)

The US has ordered the expulsion of 60 Russian officials who Washington says are spies, including a dozen based at the United Nations, and told Moscow to shut down its consulate in Seattle, which would end Russian diplomatic representation on the west coast. The EU members Germany, France and Poland are each to expel four Russian diplomats with intelligence agency backgrounds. Lithuania and the Czech Republic said they would expel three, and Denmark, Italy and the Netherlands two each. Estonia, Latvia, Croatia, Finland, Hungary, Sweden and Romania each expelled one Russian. Iceland announced it would not be sending officials to the World Cup in Russia.

Ukraine, which is not an EU member, is to expel 13 Russian diplomats, while Albania, an EU candidate member, ordered the departure of two Russians from the embassy in Tirana. Macedonia, another EU candidate, expelled one Russian official. Canada announced it was expelling four diplomatic staff serving in Ottawa and Montreal who the Canadian government said were spies. A pending application from Moscow for three more diplomatic posts in Canada is being denied. Australia confirmed that it too would expel two Russian diplomats who were in the country as undeclared intelligence officers, giving them seven days to leave.

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Someone will find some for them.

New Zealand Says It Would Expel Russian Spies … But It Can’t Find Any (G.)

New Zealand’s prime minister, Jacinda Ardern, and foreign affairs minister, Winston Peters, say they would expel Russian spies from the country, if there were any. More than 100 Russian diplomats alleged to be spies in western countries have been told to return to Moscow, in response to the use of a chemical weapon in the attempted murder of Sergei Skripal, a former Russia/UK double agent, and his daughter, Yulia, in Salisbury, England on 4 March. The New Zealand government has condemned the attack and supports the international action, but says there are no such “Russian intelligence agents” in the country.

The Russian ambassador to New Zealand was summoned to a meeting “to reiterate our serious concern” over the Salisbury attack. “While other countries have announced they are expelling undeclared Russian intelligence agents, officials have advised there are no individuals here in New Zealand who fit this profile. If there were, we would have already taken action,” said Ardern. She said New Zealand will review what further action it can take to support the international community over the attack. “We remain steadfast with our international partners in our shared concern about the Salisbury nerve agent attack,” Ardern said.

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There are tw0 such whistleblowers now. Here’s no. 1:

Whistleblower Questions Brexit Result, Says Campaigners Broke Election Law (R.)

A whistleblower at the heart of a Facebook data scandal on Monday questioned the result of Britain’s 2016 Brexit referendum as his lawyers presented evidence that they said showed the main campaign for leaving the EU had broken the law. With just a year until Britain is due to leave the European Union, two whistleblowers – one from the British political consultancy Cambridge Analytica and one from the Vote Leave group – have alleged that Brexit campaigners funded their campaign illegally. By doing so, they have pulled Brexit into a scandal that has forced Mark Zuckerberg to apologise for how Facebook handled users’ data, and raised questions about how Donald Trump’s 2016 campaign employed data.

Vote Leave officials on Monday denied breaking election rules and said they were facing an attempt to undermine Brexit by smearing their reputations. The whistleblowers’ law firm, London-based Bindmans, released 53 pages of selected evidence on Monday. In a legal opinion, Bindmans said there was a prima facie case that Vote Leave broke election spending limits by donating to an allied group known as BeLeave, with which it was working closely.

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And this is no. 2:

Brexit Referendum Campaign Accused of Breaking Spending Rules (BBG)

Campaigners for Brexit may have conspired to break spending limits in the U.K.’s 2016 referendum on European Union membership, according to allegations by a whistle-blower who worked for one of the Leave groups. Vote Leave, the main pro-Brexit campaign, gave money to a smaller campaign group, BeLeave, and then helped direct how it was spent, according to a 50-page legal opinion by attorneys from London’s Matrix Chambers. The lawyer are acting on behalf of people who flagged potential violations in the campaign.

If that 625,000-pound ($889,000) donation had been included in Vote Leave’s accounts, it would have taken the group over its 7 million-pound spending limit. “It’s important that it’s the will of the people and not the bought will of the people that is expressed at the ballot box,” Tamsin Allen told reporters at a briefing Monday afternoon in London. Allen is a lawyer for Shahmir Sanni, a BeLeave campaigner who argues the rules were broken.

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No. 2 was outed as gay by his own government as revenge for being a whistleblower. His family in Pakistan has hired security.

Theresa May Stands By Adviser Who Outed Brexit Whistleblower (G.)

Theresa May has insisted her political secretary, Stephen Parkinson, “does a very good job”, as he faces mounting pressure over the outing of the Brexit whistleblower Shahmir Sanni. Sanni said he had endured one of the “most awful weekends” of his life after telling the Observer how Vote Leave channelled money through BeLeave, a group linked to Cambridge Analytica, to get around electoral law. On Friday Sanni was outed as gay by Parkinson, one of May’s closest advisers and a former Vote Leave official, with whom Sanni had a relationship during the campaign. Privately, some Conservative MPs believe Parkinson should stand down. “He’ll have to go,” said one backbencher.

The Labour MP Ben Bradshaw challenged the prime minister in the House of Commons on Monday about what Downing Street said was a “personal statement” by Parkinson. “How is it remotely acceptable that when a young whistleblower exposes compelling evidence of law-breaking by the leave campaign, implicating staff at No 10, one of those named instead of addressing the allegations issues an officially sanctioned statement outing the whistleblower as gay and thereby putting his family in Pakistan in danger?” he said. “It’s a disgrace, prime minister, you need to do something about it.”

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As sure as death and taxes.

Underfunded Public Pensions To Persist (R.)

Investment returns have been uneven and funding levels have yet to recover. Many pension funds have meanwhile attempted to boost returns by loading up on alternative investments to levels unheard of a decade earlier. “Some just cannot grow their way out of it. We have had several years of stellar (stock market) returns and it barely improved the underfunding situation,” said Mikhail Foux, municipal credit analyst at Barclays in New York. The benchmark S&P 500 U.S. stock index has tripled in the past nine years, driven in part by unprecedented zero interest rate policies and massive monetary stimulus from central banks around the globe aimed at combating the deepest recession in a generation.

But pension returns struggled to match the broad market, and recent wobbles in U.S. equities have fed fears of another downturn. “Now what happens when markets are falling 10 to 15%?” Foux asked. In 2007, a year before the crisis began, the median funded level was 92% for state retirement and 97% for local plans, according to Wilshire Funding Studies. That fell to 68% for states and 72% for local governments by 2016, the most recent data. A lower funded ratio indicates the overall soundness of a pension fund is weaker and more money is required to meet future obligations.

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Best description yet of Stormy. Big announcements and an empty interview. Presidents showing their virility makes them more popular, not less. Ask France.

Hood Ornament Buffer (Jim Kunstler)

Newsflash: President Donald J. Trump had sex with a whore twelve years ago. Let that sink into your limbic lobes, you poor, opiated, Facebook-addled, morbidly-obese, fly-over nation of lumbering, deplorable, gun-gripping, Jesus-haunted voters. A hoor! Do you hear? Wait a minute, you say. Stormy Daniels is no such thing, She’s an actress in, and director of, adult films, an auteur, if you like, at least a sex worker, toiling in the rolling mills of eros, sweating and grunting as much as any Mahoning Valley steel worker, or hood ornament buffer on the Tesla assembly line. And anyway, three times over the years she denied having sex with that man, at least once in writing, though last night on CBS’s Sixty Minutes she stated that she actually did have sex with the Golden Golem of Greatness.

In which case, she may be some kind of a lyin’ hoor… or savior of a nation yearning to cast off the loathsome rule of this odious president-by-mistake. The Sixty Minutes make-up and costume crew knocked themselves out coming up with her on-camera look Sunday night: WalMart Shopper. That reddish blouse, for instance, which did not display Stormy’s… er… assets in the usual way (i.e., an enticing fleshy slot descending into deep milky realms of mystery), but just innocently swimming around in there like a couple of frolicking dolphins confined in an above-the-ground backyard pool. Who wouldn’t want to jump in and swim with them? Maybe not the undistractible Anderson Cooper, who did ferret out many interesting particulars of that one romantic encounter: Stormy accepted Trump’s invitation for dinner… in his hotel suite. Just the two of them, ahem.

They watched a TV show about sharks. It apparently lacked aphrodisiac punch. So he showed her a magazine with his picture on the cover, perhaps to get the point across that he was a really important person in case she didn’t already know. She said she ought to take it and spank him with it. He concurred, dropped trou, and presented the rear of his tighty-whitey small-clothes to facilitate that proposal. After that ice-breaker, he said, “I really like you!” and “You remind me of my daughter” — instantly be-sliming the proceedings with overtones of incest. Stormy went to the bathroom and emerged to find Trump perched on the bed. “Here we go,” the thought popped into her head, she says. But she didn’t say “no.”

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Not going to happen. Paris was just meant to make you feel good.

Meeting Paris Agreement Targets Will Take Massive Cuts in Emissions (BBG)

Meeting the Paris accord’s temperature targets will take massive cuts to greenhouse gas emissions within 15 years, but won’t require them to be reduced to zero, according to a new study published Monday in the journal Nature Climate Change. If those targets—between 1.5 to 2ºC (2.7 to 3.6ºF)—are overshot, the consequences would likely require both drastic cuts to emissions and geoengineering efforts to remove carbon from the atmosphere, according to the paper by Katsumasa Tanaka at the National Institute for Environmental Studies in Japan and Brian O’Neill at the U.S. National Center for Atmospheric Research. “If we overshoot the temperature target, we do have to reduce emissions to zero. But that won’t be enough,” Tanaka said in a statement.

“We’ll have to go further and make emissions significantly negative to bring temperatures back down to the target by the end of the century.” Tanaka’s team began looking at both the accord’s temperature goals and requirement that countries “achieve net-zero greenhouse gas emissions in the second half of this century,” according to the statement. The scientists created scenarios that would achieve both the temperature goals and emissions guidelines. The group concluded to do so would necessitate cutting emissions 80% by 2033 to meet the 1.5 degree target or about 66% by 2060 to meet the 2 degree mark. “In both these cases, emissions could then flatten out without ever falling to zero,” according to the statement.

[..] The United Nation’s Intergovernmental Panel on Climate Change is working on a report which is expected to conclude that geoengineering will be needed to meet the 1.5 degree goal. Recognizing this difficulty, Tanaka and O’Neill looked at the possibility the targets would be missed. If the 1.5-degree mark is missed, emissions would have to fall to zero by 2070 and then be negative for the rest of the century. In the 2-degree scenario emissions would have to drop to zero by 2085 and then stay negative for a shorter period of time to get back below 2 degrees. Both scenarios would require removing carbon from that atmosphere. The researchers also looked at scenarios reducing emissions to zero by 2060 and 2100. In the first case, the temperature rose 2 degrees before declining. In the second instance, it rose above that mark by 2043 and stayed there for 100 years or more.

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Yes, of course. We’ll cover the ocean in plastic, just as we do our food. And then ourselves.

Ultra-Thin Sun Shield Could Protect Great Barrier Reef (AFP)

An ultra-fine biodegradable film some 50,000 times thinner than a human hair could be enlisted to protect the Great Barrier Reef from environmental degradation, researchers said Tuesday. The World Heritage-listed site, which attracts millions of tourists each year, is reeling from significant bouts of coral bleaching due to warming sea temperatures linked to climate change. Scientists from the Australian Institute of Marine Biology have been buoyed by test results of a floating “sun shield” made of calcium carbonate that has been shown to protect the reef from the effects of bleaching. “It’s designed to sit on the surface of the water above the corals, rather than directly on the corals, to provide an effective barrier against the sun,” Great Barrier Reef Foundation managing director Anna Marsden said.

The trials on seven different coral types found that the protective layer decreased bleaching of most species, cutting off sunlight by up to 30 percent. “It (the project) created an opportunity to test the idea that by reducing the amount of sunlight from reaching the corals in the first place, we can prevent them from becoming stressed which leads to bleaching,” Marsden said. Researchers from a breadth of disciplines contributed to the project, which was headed by the scientist who developed the country’s polymer bank notes. “In this case, we had chemical engineers and experts in polymer science working with marine ecologists and coral experts to bring this innovation to life,” Marsden said.

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Yeah, just great. The entire deterioration process of teh planet is fast accelerating.

Brazil Senate Considers Lifting Ban On Sugarcane Production In Amazon (G.)

A bill being rushed through Brazil’s senate would lift a ban on the cultivation of sugarcane for ethanol fuel in the Amazon, driving more deforestation and making it harder for the country to meet its commitments under the Paris Climate Deal. The bill, which has been roundly condemned by environmentalists, companies and even Brazil’s union of sugarcane producers (UNICA), marks the latest move by a conservative congress to unravel Amazon protections. Five former environment ministers have also criticised it. “This is another setback that should not thrive,” said one, José Carvalho. Under a 2009 decree, sugar cane production is not allowed in the Amazon biome.

Allowing the highly-profitable crop to be raised on deforested land in the region would push out other crops and encourage more deforestation, said Marcio Astrini, public policy coordinator for Greenpeace in Brazil. It could be “one of the biggest disasters for the forest,” he said. The bill was first introduced in 2011 by Flexa Ribeiro, a senator for the centre-right Brazilian Social Democratic party in the Amazon state of Pará, and suddenly put up for a vote on Tuesday afternoon. It would allow ethanol production on vaguely-defined areas of Amazon land, including “altered areas” and “general land”. If approved on Tuesday and given presidential sanction, it could become law. Brazil’s ethanol fuel is seen as a clean fuel alternative to gasoline by millions of motorists. According to UNICA, 27m cars in Brazil, 73% of the total can use either gasoline or ethanol, as can 4m motorbikes.

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Mar 262018
 
 March 26, 2018  Posted by at 9:22 am Finance Tagged with: , , , , , , , , , , , ,  


Opening night of the movie ‘Grand Hotel’ on Times Square at Astor Theater, New York 1932

 

Dear America: Please Stop This Shit. Signed, The Rest Of The World. (CJ)
Asian Shares Battered As Trade War Fears Sap Sentiment (R.)
US-China Trade Deficit Is Set To Keep On Rising – Stephen Roach (CNBC)
US Seeks Deal With China in Bid to Avert Trade War (BBG)
US and South Korea Reach Agreement on Trade, Tariffs (BBG)
EU Defends Controversial Juncker Aide Promotion (AFP)
EU Antitrust Chief Keeps Open Threat To Break Up Google (R.)
EU Leaders Host Turkish President Erdogan For Uneasy Summit (R.)
Labour Moves to Prevent ‘No-Deal’ Brexit as Blair Seeks EU Vote (BBG)
Facebook Approached Australian Political Parties To Microtarget Voters (ZH)
Glory Days (Eric Peters)
Nearly Half Of Japanese Think Abe Should Quit Over Land Sale Scandal (R.)
Malaysia: Up To 10 Years’ Jail, Hefty Fines For Publishers Of ‘Fake News’ (R.)
China Regulator Bans TV Parodies Amid Content Crackdown (R.)
Kim Dotcom Wins Human Rights Tribunal Case, Says Extradition Bid ‘Over’ (NH)
Global Warming Puts Nearly Half Of Species In Key Places At Risk (CNN)

 

 

Caitlin Johnstone. Is right.

Dear America: Please Stop This Shit. Signed, The Rest Of The World. (CJ)

They want you arguing over who should and shouldn’t be called a terrorist based on what ideology you subscribe to and what color the latest killer’s skin was. They do not want you talking about the way the label “terrorist” itself is being used to justify unconstitutional detentions, torture, mass surveillance, and wars. They want you arguing over whether to support the Democrats because the Republicans will take civil rights away from disempowered groups or Republicans because the Democrats will take away your guns and force you to bake gay wedding cakes. They don’t want you talking about the fact that both parties advance Orwellian surveillance, neoliberal exploitation and neoconservative bloodshed in a good cop/bad cop extortion scheme to keep Americans cheerleading for their own enslavement.

They want you arguing about whether Trump did or did not collude with Russia. They do not want you looking at what preexisting agendas the CNN/CIA Russia narratives are advancing and who stands to benefit from them. They want everyone fighting over table scraps while they pour unfathomable riches into expanding and bolstering their empire. They psychologically brutalize you with propaganda day in and day out, and then expect you to look to them for protection from the phantoms they invented. They don’t want you paying attention to the growing number of signs that the current administration is gearing up for a major military bloodbath which may lead our species into a third and final world war. They want you talking about Stormy Daniels instead.

[..] Please stop this shit, America. If the US war machine goes after Iran or Russia it will likely mean a world war against multiple nuclear-armed countries, which could very easily send our species the way of the dinosaurs should a nuke get deployed in the fog of war. We don’t have time to focus on Stormy fucking Daniels.

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Cool down.

Asian Shares Battered As Trade War Fears Sap Sentiment (R.)

Global markets were shaken when U.S. President Donald Trump moved to slap tariffs on Chinese goods, on top of import duties on steel and aluminum, prompting a defiant response from Beijing. But E-Mini futures for the S&P 500 brushed off the gloom on Monday to leap 0.6% on reports the United States and China have quietly started negotiating to improve U.S. access to Chinese markets. The United States also agreed to exempt South Korea from steel tariffs, imposing instead a quota on steel imports as the two countries renegotiate their trade deal. “If we do start to hear more favorable news from the U.S. administration and indeed from the Chinese side over the next few trading sessions, then we may see a sharp reversal of the recent moves in the market,” said Nick Twidale at Rakuten Securities Australia.

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The curse of the reserve currency.

US-China Trade Deficit Is Set To Keep On Rising – Stephen Roach (CNBC)

Washington’s trade imbalance with Beijing – the stated motivation behind President Donald Trump’s punitive tariffs — will continue expanding in the years ahead, according to Yale University’s Stephen Roach. America’s trade deficits with China and other countries fundamentally reflect “the fact that we don’t save enough,” said Roach, a former Morgan Stanley Asia chairman. “When you don’t save and you want to spend and grow, you import surplus savings from abroad and you run these massive balance of payments and trade deficits to attract the foreign capital,” he told CNBC Monday at the annual China Development Forum. “That’s the way it’s always worked.”

The Trump administration budget deficits are “going to push our savings rate lower and if anything, our trade deficits are going to get bigger in the years ahead, including the one probably with China.” Reducing the U.S. trade deficit is one of Trump’s top policy goals – he’s argued that it hurts American job creation and weighs on overall growth. But many economists, including Roach, say trade imbalances are not a good metric for economic health since they are influenced by a variety of macroeconomic factors. “The bilateral trade deficit in the U.S. is really pretty meaningless,” Roach said.

And Trump’s $1.5 trillion tax cut, which was signed into law in December, is unlikely to change the status-quo. The fiscal stimulus package “is going to take debt-to-GDP ratios up by 1 to 2 %age points a year, relative to what they otherwise would have been,” Roach said. “For an economy like the United States, where the savings rate is already low, that’s going to push our savings rate even lower. So, we’re going to have to keep importing the surplus savings and running these balance of payments deficits to square the circle.”

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“..stop forced technology transfer..”

US Seeks Deal With China in Bid to Avert Trade War (BBG)

Treasury Secretary Steven Mnuchin said he’s optimistic the U.S. can reach an agreement with China that will avert the need for President Donald Trump to impose tariffs on at least $50 billion of goods from the country. “We’re having very productive conversations with them,” Mnuchin said on “Fox News Sunday,” when discussing talks with China. “I’m cautiously hopeful we reach an agreement.” Trump on Thursday also directed Mnuchin to propose new investment restrictions on Chinese companies within 60 days to safeguard technologies the U.S. views as strategic. He has said he also wants a $100 billion decrease in the U.S. trade deficit with China.

A day after Trump’s announcement, which led to a selloff in global markets, China unveiled tariffs on $3 billion of U.S. imports in response to steel and aluminum duties ordered by Trump earlier this month. The White House then declared a temporary exemption for the European Union and other nations on those levies, making the focus on China clear. Though Beijing’s actions so far are seen by analysts as measured, there may be more to come.

China is conducting research on further lists of U.S. imports subject to tariffs, which are likely to cover airplanes, computer chips and the tourism industry, China Daily reported on Saturday, citing Wei Jianguo, a former vice commerce minister. Mnuchin said the two countries agree on reducing the deficit to some degree and are trying to “to see if we can reach an agreement as to what fair trade is for them to open up their markets, reduce their tariffs, stop forced technology transfer.” The U.S. will proceed with tariffs “unless we have an acceptable agreement that the president signs off on,” Mnuchin said Sunday. “We’re not afraid of a trade war, but that’s not our objective,” he said. “In a negotiation you have to be prepared to take action.”

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First hurdle out of the way.

US and South Korea Reach Agreement on Trade, Tariffs (BBG)

The U.S. and South Korea reached an agreement on revising their six-year-old bilateral trade deal, and the U.S. said it wouldn’t impose President Donald Trump’s tariffs on steel imports from its ally in Asia. The two countries reached agreement “in principle” on the trade deal known as Korus, South Korea’s trade ministry said in a statement on Monday. While Korea avoids the steel tariff, shipments of the metal to the U.S. will be limited to a quota of about 2.7 million tons a year, according to the statement. Trump repeatedly criticized the trade deal with South Korea, calling it a “job-killer” that had increased the bilateral trade deficit. While he had pushed for it to be revised and threatened tariffs, there were also concerns that trade tensions would create a wedge between the allies just as the presidents of both nations look to meet with North Korean leader Kim Jong Un.

The announcement came after Treasury Secretary Steven Mnuchin said U.S. Trade Representative Robert Lighthizer reached “a very productive understanding.” “We expect to sign that agreement soon,” Mnuchin said on the “Fox News Sunday” program, calling it “an absolute win-win.” The quota is unlikely to hurt South Korea’s steel exports as sales to the U.S. account for 11% of total steel shipments overseas, the South Korean ministry said. The quota is set at 70% of the average of steel sales to the U.S. during 2015-2017.

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Europe makes its decisions behind close backroom doors.

EU Defends Controversial Juncker Aide Promotion (AFP)

The European Commission on Sunday insisted the controversial promotion of President Jean-Claude Juncker’s top aide and enforcer was “in full compliance” with rules despite a growing cronyism row. The commission, the EU’s powerful executive arm, said there was nothing untoward about the elevation of Juncker’s former chief of staff Martin Selmayr to the post of secretary general, at the head of the EU’s 30,000-strong civil service. The scandal has gained momentum in recent weeks with the European Parliament launching an investigation and warning the affair risks fuelling eurosceptics around the continent. But the commission insisted Selmayr’s appointment was above board and made with the full backing of all EU commissioners.

“The decision was taken by the college of commissioners unanimously, in full compliance with the staff regulations and the rules of procedure of the commission,” the commission said in a written response to a list of 134 questions posed by MEPs. The row centres on what critics say was effectively an instantaneous double promotion for the 47-year-old Selmayr, Juncker’s former chief of staff, on February 21. During a single meeting of commissioners, Selmayr was made first deputy secretary general and then just minutes later secretary general when the incumbent, Alexander Italianer, suddenly announced his retirement. The commission confirmed that Juncker had known of Italianer’s plan to retire as early as 2015 and had told Selmayr about it.

But it rejected claims that Juncker and Selmayr had cooked up a plan in November last year to bounce the German into the secretary general role. It said that technically Selmayr had not been promoted, as he remains on the same civil service grade as before, and that he had taken a pay cut in switching jobs. As well as the parliamentary probe, the EU ombudsman, which investigates allegations of malpractice in European institutions, has also confirmed it has received two complaints about the matter and is analysing them. Sophie in ‘t Veld, a leading liberal member of the European Parliament, said earlier this month the affair “destroys all the credibility of the EU as a champion of integrity and transparency”.

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Expand it to Facebook?

EU Antitrust Chief Keeps Open Threat To Break Up Google (R.)

The European Union holds “grave suspicions” about the dominance of internet giant Google and has not ruled out breaking it up, according to a warning by the EU’s antitrust chief, Britain’s Telegraph reported on Sunday. European Commissioner for Competition Margrethe Vestager reckons the threat to split Google into smaller companies must be kept open, the newspaper said. Google currently faces new EU rules on its commercial practices with smaller businesses that use its services.

Late last year, Vestager said more cases against Google were likely in the future, after the European Commission slapped a record €2.4 billion ($2.97 billion) fine on the world’s most popular internet search engine and told the firm to stop favoring its shopping service. The European Commission is in the process of drafting a new regulation aimed at regulating e-commerce sites, app stores and search engines to be more transparent in how they rank search results and why they delist some services.

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They should stop his forays into Syria, Iraq. They won’t. He’s got them by the balls.

EU Leaders Host Turkish President Erdogan For Uneasy Summit (R.)

The European Union holds an uneasy summit with Turkey on Monday, when it is likely to provide Ankara with fresh cash to extend a deal on Syrian refugees but deflect Turkish demands for deeper trade ties and visa-free travel to Europe. With the bloc critical of what it considers to be Turkish President Recep Tayyip Erdogan’s growing authoritarianism at home and his intervention in Syria’s war, Brussels had hesitated to agree to the summit. But host Bulgaria viewed the meeting at the Black Sea port of Varna as a rare chance for dialogue with the country that remains a candidate for EU membership despite years of stalled talks.

EU leaders also cited Turkey’s importance as a NATO ally on Europe’s southern flank and in curbing immigration to Europe from the Middle East and Africa. “I am looking with mixed feelings towards the Varna summit because the differences in views between the EU and Turkey are many,” said European Commission President Jean-Claude Juncker, who will represent the bloc along with European Council President Donald Tusk. “It will be a frank and open debate, where we will not hide our differences but will seek to improve our cooperation,” Juncker told reporters on Friday after a two-day EU summit that discussed Turkey.

At that meeting in Brussels, leaders condemned what they said were Turkey’s illegal actions in a standoff over eastern Mediterranean gas reserves with bloc members Greece and Cyprus. But in a familiar pattern of public recrimination, Turkey’s minister for EU affairs, Omer Celik, said Ankara viewed the summit as “an important opportunity to move our relations forward” and that he expected “the same positive and constructive approach from the EU.” Erdogan will seek more money for Syrian refugees, a deeper customs union and progress in talks on letting Turks visit Europe without visas, a Turkish foreign ministry spokesman said.

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Why there’s a new wave of “Corbyn is an antisemite” going around.

Labour Moves to Prevent ‘No-Deal’ Brexit as Blair Seeks EU Vote (BBG)

The U.K. Labour Party said it is seeking an amendment to key Brexit legislation to prevent Britain leaving the European Union without a deal, as former premier Tony Blair renewed his own call for a second referendum. “If Parliament rejects the Prime Minister’s deal, that cannot give licence to her, or the extreme Brexiteers in her party, to allow the U.K. to crash out without an agreement,” Labour’s Brexit spokesman, Keir Starmer, will say in a speech on Monday, according to extracts emailed by his party. “That would be the worst of all possible worlds.”

As Starmer plots to bind Theresa May’s Conservative government to negotiating a smooth exit from the European Union, former Labour leader Blair will say that Parliament should get to vote on the planned future relationship with the EU and then the electorate should “make the final judgment” ahead Britain’s scheduled departure from the bloc on March 29 next year. Starmer’s bid to rewrite the EU Withdrawal Bill throws up a new hurdle to the premier’s plans. While she’s repeatedly said she wants to reach an agreement with the bloc, May maintains that exiting without one is better than accepting a bad deal. A majority of lawmakers in both houses of Parliament oppose a hard Brexit.

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Talk your way out of this one, Mark.

Facebook Approached Australian Political Parties To Microtarget Voters (ZH)

In the wake of a massive data harvesting scandal, it has emerged that Facebook approached at least two major Australian political parties during the final weeks of their 2016 election in order to help them “microtarget” voters using a powerful data matching tool, reports the Sydney Morning Herald. Facebook offered “advanced matching” as part of their so-called Custom Audience feature to both the conservative (if not confusingly named) Liberal Party, as well as the “democratic socialist” Labor Party. The tool promised to allow the parties to compare data they had collected about voters – such as names, birth dates, phone numbers, postcodes and email addresses – and match that information to Facebook profiles.

The combination of data sets would then allow political parties to target Australian swing voters with custom tailored ads over Facebook, which advertised a 17% increase in matching rates using a beta version of the service provided to the Liberal Party. Fairfax Media reports that while the conservative Liberal Party turned Facebook down over concerns that sending voter data overseas to Facebook servers would violate the Privacy Act and the Electoral Act, the Labor Party took Facebook up on their offer.

Asked specifically whether Labor used the tool, a Labor spokesman said in a statement: “A range of different campaign techniques and tools are used for campaigning, from doorknocking to phone banking to online. Labor works with different groups to get our message out, including social media platforms like Facebook.” “All of our work is in complete compliance with relevant laws, including the Commonwealth Electoral Act, which makes it a criminal offence to misuse information on the electoral roll.”

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“Today’s internet companies suck in free customer data through the front door, and sell it out the back door. The greater the flow, the higher the profits. They’re dominant. They’ll soon be regulated.”

Glory Days (Eric Peters)

“May Day 1975 marked the start of Wall Street deregulation,” said the historian. “Banks and brokerages flourished thereafter, expanding their power and political influence.” 1998 marked peak deregulation with Clinton’s repeal of Glass-Steagall. “Pump and dump schemes of all sorts propagated; Wolf of Wall Street excesses. Then came the dot com IPO madness which led to Sarbanes Oxley.” The final debauchery was exposed in 2008, and led to sweeping Dodd-Frank financial regulation. “Wall Street’s been in lock-down ever since.” “The 1996 Telecom Act protected America’s nascent internet companies,” continued the historian. AOL started in 1985. Netscape launched in 1993, went public in 1995. Amazon launched in 1994. Yahoo 1995. Facebook 2004. YouTube 2005.

“The Act protected them from liability for anything republished on their sites.” They were too weak to withstand such liability and needed nurturing to foster innovation. “But Facebook has a $460bln market cap. It’s not responsible for what it publishes but the NY Times is. That’s now preposterous.” “When Wall Street lacked regulation, any product, no matter how absurd, was welcomed through the front door and pumped out to clients through the back door,” explained the historian. “The greater the flow, the higher the profits. Those were the glory days.” Then regulations raised costs, stymied product development, crushed the profit model. “Today’s internet companies suck in free customer data through the front door, and sell it out the back door. The greater the flow, the higher the profits. They’re dominant. They’ll soon be regulated.”

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Shinzo is addicted to power. But he said he would leave.

Nearly Half Of Japanese Think Abe Should Quit Over Land Sale Scandal (R.)

Nearly half of Japanese voters believe Prime Minister Shinzo Abe should quit to take responsibility over a cronyism scandal and cover-up that have sent his support sliding, according to an opinion poll released on Monday. Suspicions have arisen about a sale of state-owned land at a huge discount to a nationalist school operator with ties to Abe’s wife, Akie, setting off the biggest political crisis Abe has faced since returning to power in 2012 and prompting protestors to call almost nightly for him to quit.

Abe has denied that either he or his wife intervened in the sale or were involved in altering documents related to the deal, in which mention of his and Akie’s names were removed. According to a public opinion survey covered by the liberal Asahi newspaper at the weekend, 48% of those polled said Abe and his government should quit, compared to 39% who said that wasn’t necessary.

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They’re all seeking to ban anything they don’t like.

Wonder who’s going to decide which news is fake. How about the Skripal case? Stormy Daniels? Corbyn is an anti-semite?

Malaysia: Up To 10 Years’ Jail, Hefty Fines For Publishers Of ‘Fake News’ (R.)

Malaysian Prime Minister Najib Razak’s government tabled a bill in parliament on Monday outlawing “fake news”, with hefty fines and up to 10 years in jail, raising more concerns about media freedom in the wake of a multi-billion dollar graft scandal. The bill was tabled ahead of a national election that is expected to be called within weeks and as Najib faces widespread criticism over the scandal at state fund 1Malaysia Development Berhad (1MDB). Under the Anti-Fake News 2018 bill, anyone who published so-called fake news could face fines of up to 500,000 ringgit ($128,140), up to 10 years in jail, or both.

“The proposed Act seeks to safeguard the public against the proliferation of fake news whilst ensuring the right to freedom of speech and expression under the Federal Constitution is respected,” it said. It defines fake news as “news, information, data or reports which is or are wholly or partly false” and includes features, visuals and audio recordings. The law, which covers digital publications and social media, also applies to offenders outside Malaysia, including foreigners, as long as Malaysia or a Malaysian citizen were affected.

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“.. in violation of socialist core values..”

China Regulator Bans TV Parodies Amid Content Crackdown (R.)

China’s media regulator is cracking down on video spoofs, the official Xinhua new agency reported, amid an intensified crackdown on any content that is deemed to be in violation of socialist core values under President Xi Jinping. The decision comes after Xi cemented his power at a recent meeting of parliament by having presidential term limits scrapped, and the ruling Communist Party tightened its grip on the media by handing control over film, news and publishing to its powerful publicity department. Xinhua said video sites must ban videos that “distort, mock or defame classical literary and art works”, citing a directive from the State Administration of Press, Publication, Radio, Film and Television on Thursday.

Reuters separately reviewed a copy of the directive, which was unusually labeled “extra urgent”. Industry insiders say the sweeping crackdown on media content, which has been gaining force since last year, is having a chilling effect on content makers and distributors. “It means a lot of content makers will have to transition and make their content more serious. For ‘extra urgent’ notice like this, you have to act immediately,” said Wu Jian, a Beijing-based analyst. “Those who don’t comply in time will immediately be closed down,” Wu said.

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On Twitter: “Let’s see how ‘speculative’ and ‘premature’ my recent Obama affidavit is after we get access to all the puzzle pieces.”

Kim Dotcom Wins Human Rights Tribunal Case, Says Extradition Bid ‘Over’ (NH)

The Human Rights Tribunal has ruled that the Attorney-General broke the law by withholding information from Kim Dotcom, which he says means his extradition case is “over”. In July 2015, Mr Dotcom sent an urgent information privacy request to all 28 Ministers of the Crown as well as almost all Government departments, asking for personal information they had on him, including under his previous names. Nearly all the requests were transferred to the Attorney-General Chris Finlayson, who declined the Megaupload founder’s requests on the grounds that they were “vexatious” and trivial. The Solicitor-General also said Mr Dotcom had not provided sufficient reasons for urgency.

On Monday, the Human Rights Tribunal ruled that the Attorney-General unlawfully withheld information from Mr Dotcom, meaning he perverted the course of justice. The Government and Ministers have been ordered to comply with the original requests and supply all relevant documents to Mr Dotcom. Mr Dotcom was awarded damages for loss of benefit and loss of dignity. In a series of celebratory tweets, Mr Dotcom claimed this decision meant his extradition case is “over”. He has threatened former Prime Minister Sir John Key with legal action, and said he will see everyone involved in the so-called “Mega Conspiracy” in court. He has also called for the immediate resignation of the Privacy Commissioner.

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If temperature rise is kept below 2ºC “only” 25% of species will be lost.

Global Warming Puts Nearly Half Of Species In Key Places At Risk (CNN)

About half of all plants and animals in 35 of the world’s most biodiverse places are at risk of extinction due to climate change, a new report claims. “Hotter days, longer periods of drought, and more intense storms are becoming the new normal, and species around the world are already feeling the effects,” said Nikhil Advani, lead specialist for climate, communities and wildlife at the World Wildlife Fund (WWF). The report, a collaboration between the University of East Anglia, the James Cook University, and the WWF, found that nearly 80,000 plants and animals in 35 diverse and wildlife-rich areas – including the Amazon rainforest, the Galapagos islands, southwest Australia and Madagascar – could become extinct if global temperatures rise. The 35 places were chosen based on their “uniqueness and the variety of plants and animals found there,” the WWF said.

“The collected results reveal some striking trends. They add powerful evidence that we urgently need global action to mitigate climate change,” the report said. A corresponding study was also published by the scientific journal Climate Change. If temperatures were to rise by 4.5 degrees Celsius, animals like African elephants would likely lack sufficient water supplies and 96% of all breeding ground for tigers in India’s Sundarbans region could be submerged in water. However, if temperature rise was kept to below 2 degrees Celsius – the global target set by the landmark Paris Climate Accord in 2015 – the number of species lost could be limited to 25%. “This is not simply about the disappearance of certain species from particular places, but about profound changes to ecosystems that provide vital services to hundreds of millions of people,” the WWF said in its report.

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Mar 182018
 
 March 18, 2018  Posted by at 9:51 am Finance Tagged with: , , , , , , , , ,  


Bartolomeo Schedoni The Deposition (of Jesus’ body by St. Joseph of Arimathea) 1613

 

The Art of (Cold) War (Claire Connelly)
Killing Diplomacy (Dmitry Orlov)
Russia’s EU Ambassador Says UK Lab Could Be Nerve Agent Source (BBC)
NATO Must Improve Defences Against ‘More Aggressive’ Russia – Stoltenberg (G.)
Goldilocks, R. I. P. – Part 3 (David Stockman)
UK Brexit Committee In Bitter Row Over Plan To Delay EU Withdrawal (Ind.)
French Language Eyes ‘Le Comeback’ After Brexit (AFP)
Arms Deals Between Turkey And Germany Are Like A Well-Oiled Machine (Region)
At Least 15 Refugees Die As Boat Sinks Near Greek Island In Aegean Sea (R.)
Billion-Dollar Polar Bio-Engineering ‘Needed To Slow Melting Glaciers’ (G.)

 

 

Several people punch sizable holes in the UK story blaming Russia. Found on Twitter, from “Harry Dilemma”:

“Without any evidence, the probability of millions of people being infected with bullshit is higher than the probability of two people being infected with a toxic agent.”

The Art of (Cold) War (Claire Connelly)

Here’s what we know so far: • UPDATE I: Former spy and double agent, Sergey Skripal and his daughter, Julia were allegedly poisoned. • Initial reports claimed the culprit was a chemical which falls under the category of ‘novichoks’, a collection of nerve agents developed by the Soviet Union in the 1970s and 1980s, there has been no official medical or scientific confirmation of these claims. The doctor that was allegedly one of the first people on the scene of the Skripals’ poisoning asked to remain anonymous. • No pictures or footage of the victims have been provided. • Skripal’s daughter, Julia, is a member of the Russian Federation but has been denied consular access by the British government.

• The Russian Embassy officially requested the Foreign Office provide information on Sergey and Julia Skripal’s health and details of investigation the day after the poisonings occured on March 5th. Almost two weeks have passed and it still has received no confirmation from the UK government, nor granted access to the alleged victims. • Skripal received at least $100,000 for sharing Russian state secrets with British intelligence. • Skripal was feeding secrets to MI6 at the time Christopher Steele was an MI6 officer in Moscow. • Skripal’s handler was British MI6 agent, Pablo Miller who was previously involved as a suspect in a criminal case against Skripal who in 2006 was sentenced to 13 years in prison for spying for Britain.

Russia is not alone in the development of novichok nerve agents. Former British Ambassador Craig Murray revealed that similar nerve agents are manufactured by the British Government in Porton Down, just 8 miles from where Skripal was poisoned. • Porton Down scientists are not able to identify the nerve gas as being of Russian manufacture. • The official British government story is that these nerve agents are only manufactured “To help develop effective medical countermeasures and to test systems”. • Israel also has a chemical and biological weapons program that manufactures similar poisons. A 1983 CIA intelligence estimate revealed that US spy satellites had uncovered a chemical nerve agent production facility in the Negev Desert the year prior. This fact was censored by the CIA before a version was released to the National Archives in 2009. The information would likely not have come to light were it not for the discovery of the redacted document by a researcher at the Ronald Reagan Presidential Library.

• Russia has never killed a swapped spy before. • Miller had a Salisbury address, according to his LinkedIn account which has since been deactivated. He specialised in the former Soviet Union, Russia and Eastern Europe and his diplomatic postings included Tallinn, Estonia. • Both Steele and Miller were members of Orbis Intelligence, the same firm that produced the sensational Steele Dossier which alleged Trump’s links with Russia, including a certain episode involving Russian prostitutes and golden showers.

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There are quite a few tales about how the victims were supposedly infected with Novichok. Powder or liquid, in Russia or Britain.

Killing Diplomacy (Dmitry Orlov)

• May claimed that the nerve agent was Novichok, developed in the USSR. In order to identify it, the UK experts had to have had a sample of it. Since neither the USSR, nor Russia, have ever been known to export it, we should assume that it was synthesized within the UK. The formula and the list of precursors are in the public domain, published by the scientist who developed Novichok, who has since moved to the US. Thus, British scientists working at Porton Down could have synthesized it themselves. In any case, it is not possible to determine in what country a given sample of the substance was synthesized, and the claim that it came from Russia is not provable.

• It was claimed that the victims—Mr. Skripal and his daugher—were poisoned with Novichok while at a restaurant. Yet how could this have been done? The agent in question is so powerful that a liter of it released into the atmosphere over London would kill most of its population. Breaking a vial of it open over a plate of food would kill the murderer along with everyone inside the restaurant. Anything it touched would be stained yellow, and many of those in the vicinity would have complained of a very unusual, acrid smell. Those poisoned would be instantaneously paralyzed and dead within minutes, not strolling over to a park bench where they were found. The entire town would have been evacuated, and the restaurant would have to be encased in a concrete sarcophagus by workers in space suits and destroyed with high heat. None of this has happened.

• In view of the above, it seems unlikely that any of what has been described in the UK media and by May’s government has actually taken place. An alternative assumption, and one we should be ready to fully test, is that all of this is a work of fiction. No pictures of the two victims have been provided. One of them—Skripal’s daughter—is a citizen of the Russian Federation, and yet the British have refused to provide consular access to her. And now it has emerged that the entire scenario, including the Novichok nerve gas, was cribbed from a US/UK television drama “Strike Back.” If so, this was certainly efficient; why invent when you can simply plagiarize.

• This is only one (and not even the last) in a series of murders and assumed but dubious suicides on former and current Russian nationals on UK soil that share certain characteristics, such the use of exotic substances as the means, no discernible motive, no credible investigation, and an immediate, concerted effort to pin the blame on Russia. You would be on safe ground if you assumed that anyone who pretends to know what exactly happened here is in fact lying. As to what might motivate such lying—that’s a question for psychiatrists to take up.

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Imagine the outrage.

Russia’s EU Ambassador Says UK Lab Could Be Nerve Agent Source (BBC)

Russia’s EU ambassador has suggested a UK research laboratory could be the source of the nerve agent used in the attack on an ex-spy and his daughter. Vladimir Chizhov told the BBC’s Andrew Marr Show that Russia had “nothing to do” with the poisoning in Salisbury of Sergei Skripal and his daughter Yulia. He said Russia did not stockpile the poison and that the Porton Down lab was only eight miles (12km) from the city. The government dismissed his comments as “nonsense.” Retired military intelligence officer Mr Skripal, 66, and Yulia, 33, remain critically ill in hospital after being found slumped on a bench in Salisbury city centre on 4 March.

Theresa May had told MPs that personnel from the Defence Chemical Biological Radiological and Nuclear Centre at Porton Down in Wiltshire had identified the substance used on them as being part of a group of military-grade nerve agents developed by Russia known as Novichok. Mr Chizhov told the BBC that Mr Skripal could “rightly be referred to as a traitor” but “from the legal point of view the Russian state had nothing against him”. Asked how the nerve agent came to be used in Salisbury, he said: “When you have a nerve agent or whatever, you check it against certain samples that you retain in your laboratories.

“And Porton Down, as we now all know, is the largest military facility in the United Kingdom that has been dealing with chemical weapons research. And it’s actually only eight miles from Salisbury.” But pressed on whether he was suggesting Porton Down was “responsible” for the nerve agent in the attack, Mr Chizhov said: “I don’t have evidence of anything being used.” He added: “I exclude the possibility of any stockpiles of any chemical weapons fleeing Russia after the collapse of the Soviet Union but there were certain specialists, including some scientists who today claim to be responsible for creating some nerve agents, that have been whisked out of Russia and are currently residing in the United Kingdom.”

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But of course.

NATO Must Improve Defences Against ‘More Aggressive’ Russia – Stoltenberg (G.)

Nato must improve its defensive capabilities and willingness to act in the wake of increasingly aggressive and unpredictable actions by Russia, the head of the transatlantic alliance said in a German newspaper interview published on Sunday. The Nato secretary general, Jens Stoltenberg, said he expected the German chancellor, Angela Merkel, and other Nato leaders to revamp their approach at the next Nato summit this summer, given a risk that Russia could gradually give more weight to nuclear weapons in its doctrine, exercises and new military capabilities. “I think Chancellor Merkel and her colleagues will face new decisions at the Nato summit in July in Brussels. We must be alert and resolute,” Stoltenberg was quoted saying by Welt am Sonntag.

The Nato leader last week accused Russia of trying to destabilise the west with new nuclear weapons, cyber attacks and covert action, including the poisoning of a Russian former double agent and his daughter in the British town of Salisbury. “We can always do more and must reflect on that now. Salisbury follows, by all appearances, a pattern we’ve observed for some years – Russia is becoming more unpredictable and more aggressive,” he said. Russia denies any involvement and says it is the US-led transatlantic alliance that is a risk to peace in Europe. “Russia must not miscalculate,” Stoltenberg told the newspaper. “We are always ready to respond when an ally is attacked militarily. We want credible deterrence. We don’t want any war. Our goal is de-escalation.“

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The curious valuations of Amazon and its profitless prosperity.

Goldilocks, R. I. P. – Part 3 (David Stockman)

The first law of Bubble Finance is that stock market crashes trigger recessions, not vice versa. That stands your grandfather’s macroeconomics on its ahead, yet the casual chain from which it arises is straight forward. To wit, in a world of Peak Debt ($230 trillion globally), central bank money pumping mainly inflates financial bubbles. Such bubbles eventually reach blow-off extremes and then burst, thereby sending stock (option) obsessed corporate C-suites into paroxysms of restructuring and downsizing designed to appease the trading gods of Wall Street. The main street sacrificial lambs thus tossed overboard – workers, inventories, plants, stores, warehouses, other “redundant” fixed assets and CapEx outlays – are what we are pleased to call recessions nowadays.

Needless to say, you can’t see these bouts of C-suite mayhem coming if your dashboard is still cluttered with your grandfather’s macro-monitors. That is, the junk data from the BLS and Commerce Department. By the same token, you will most surely espy Goldilocks prancing through these incoming data reports because at this late stage of the business cycle they are really nothing more than a read-out on capitalism’s inherent impulse to trudge forward until it is monkey-hammered by the central bank and its imploding bubbles. That is to say, the next recession is embedded in the stock charts because they are the Bubble tracker in plain sight. And here is the leading indicator at the present moment – the utterly lunatic trading metrics for Amazon (AMZN).

As the current bubble metastized after the immediate post-recession rebound in the stock market, the momo crowd piled into AMZN because the “price action” was just plain awesome. Between the March 2009 bottom and January 2017, the stock soared from $65 to $750 per share or by nearly 1100%. And it did so without any regard for AMZN’s profitless prosperity—perhaps signified by its 170X PE multiple at the end of 2016. Then again, when it comes to miracle stocks and the Great Disrupters, profits are–apparently–a matter of will, not performance. If Jeff Bezos wanted profits, the true believers insist, he would will them. Simple. Still, since the beginning of 2017, even the willpower meme has begun to get way in front of its skis.

During the past 14 months, Amazon’s market cap exploded by $400 billion – rising from $360 billion in January 2017 to $760 billion at present. At the same time, its LTM operating free cash flow plunged from a meager $9.5 billion ( on $136 billion of sales) to just $6.5 billion during the year ending in December. Since the rules of arithmetic apparently have not yet been “disrupted”, AMZN’s implied multiple on operating free cash flow has erupted from an already frisky 39X to a completely absurd 120X. Needless to say, a 24-year old company with virtually no cumulative profits and free cash flow to show for itself should not trade at anything remotely close to a triple digit multiple – and that’s to say nothing of one that’s essentially in the books, schmatta, gadgets and food sourcing, moving, storage and moving business.

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The Brexit mayhem hides behind the Russia story for now.

UK Brexit Committee In Bitter Row Over Plan To Delay EU Withdrawal (Ind.)

An influential Commons committee has become mired in a bitter row after Leave members refused to back its report recommending a potential delay to Brexit and extending the transition period afterwards. After they fell out with Remain backing members of the Brexit Committee, the group was forced to publish two sets of recommendations on Sunday. Prominent Conservative Jacob Rees-Mogg, who is a member, attacked others in the group as the “high priests of Remain”, claiming they had attempted to force through a “partisan” document. The committee’s Labour chair Hilary Benn said the divisions demonstrated just how difficult achieving an agreement on Brexit will be.

The group was set to call for an “extension to the Article 50 time”, which dictates the UK will formally leave the EU in March 2019, in order to ensure a comprehensive agreement can be reached. Their report was also due to back a provision in withdrawal arrangements to allow the transition period after departure, to be extended beyond the 21 months currently set, “if necessary”. Mr Benn highlighted that the extension would likely be needed because with just seven months left to reach an agreement, a host of highly complex issues remain. He said: “While the committee welcomes the progress that has been made in some areas, the Government faces a huge task when the phase two talks actually begin.

“The Government must now come forward with credible, detailed proposals as to how it can operate a ‘frictionless border’ between Northern Ireland and the Republic of Ireland because at the moment, the committee is not persuaded that this can be done at the same time as the UK is leaving the single market and the customs union.”

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“There was a time when everyone in the bubble spoke French..”

French Language Eyes ‘Le Comeback’ After Brexit (AFP)

Once upon a time speaking French was easy in Brussels, but things have changed. Bruno Le Maire, France’s finance minister, felt that keenly during a recent panel event with European steel-makers after several hours of speaking English with EU counterparts. “Maybe one in French if possible, otherwise I will run the risk of being criticised,” Le Maire, who speaks perfect English, said as he scanned the audience for questions. But raised hands quickly dropped away, leaving just one from a journalist, who asked the question in English anyway. Such is the fate of the speaker of French in today’s EU bubble, that small world of European decision-making where the language of Catherine Deneuve and Moliere was once essential.

Even after the shock vote of Brexit, English – or at least that simplified, beat-up version known as Globish – is firmly rooted as the lingua franca of the Brussels elite. “In the last 20 years, English has become completely dominant. French is not going to replace English in any way,” said Nicolas Veyron, one of the most respected economists in Brussels, who spends most of his day speaking English although he is French. That reality stings for French-speaking veterans of the Brussels bubble who remember a time when the top echelon of Europe was a coterie of francophones.

“The retreat of French has been catastrophic,” said Jean Quatremer, the longtime EU correspondent for French daily Liberation who has championed holding the line against the advance of English. “There was a time when everyone in the bubble – commissioners, officials, spokespeople, even (Brexit-backing British foreign minister) Boris Johnson, who was a journalist here – spoke French,” said AFP’s Christian Spillman, who first came to Brussels as a corespondent in 1991.

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Whenever Europe talks about peace, remember this.

Arms Deals Between Turkey And Germany Are Like A Well-Oiled Machine (Region)

Even after Turkey’s offensive in northern Syria’s Afrin, the German government has approved the supply of millions of euros in armaments to its partner, Turkey. The situation is revealed by a response from the Ministry of Economic Affairs to a request by the Green MP Omid Nouripour. In the first five and a half weeks of Turkey’s so-called “Operation Olive Branch” against the Kurdish militia YPG, and unfortunately civilians, in Afrin, 20 export authorisations for German armaments worth 4.4 million euros were granted. This is even more than the average value of the previous year for the same period (14 permits worth 3.6 million euros). Despite the strong opposition of German public opinion and media, arms sales to Turkey aren’t disrupted.

The type of armaments is unclear. In addition to weapons such as rifles, tanks or missiles, for example, unarmed military vehicles or reconnaissance armaments are possibly on the list. Foreign Minister Sigmar Gabriel (SPD), who resigned on Wednesday, had repeatedly assured in February, since the beginning of the Syrian offensive, that there is a complete export ban for all armaments to Turkey. “We did not deliver any armaments because of the conflict in northern Syria. That is forbidden in Germany, even to supply military armaments to a NATO partner like Turkey, “he said to the media on 16 February, the day of release of the journalist Deniz Yucel. Gabriel added, “Before this conflict, we would have been willing to deliver armaments that are not weapons. But that too has been stopped because of the conflict in Syria. And we can not and do not want to change that. ”

State Secretary Matthias Machnig (SPD), however, now writes in his reply to the request that the Federal Government has issued export licenses “in individual cases” even after the beginning of Turkey’s offensive. “These are either in connection with international arms cooperation, in which Germany is bound by contractual obligations to other EU and NATO partners, or they serve the NATO Alliance defence.” “The Federal Government has lied publicly and systematically to the public,” Nouripour told the media. “Permits, given despite the disproportionate assaults of the Turkish forces in northern Syria, cause heavy damage on the credibility of the new federal government and unmask their commitment to a restrictive arms export policy as empty promises.”

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Mere numbers.

At Least 15 Refugees Die As Boat Sinks Near Greek Island In Aegean Sea (R.)

Fifteen people, including at least five children, drowned on Saturday when the small boat they were travelling on capsized in the Aegean Sea, Greek coast guard officials said. The incident occurred off Greece’s Agathonisi island, which is close to the Turkish coast. The identity and nationality of the victims was not immediately known. “At least four more [migrants] were unaccounted [for],” a coast guard official told Reuters. Three others were rescued. Saturday’s incident was thought to be the highest death toll of migrants trying to reach outlying Greek islands in months.

Greek authorities said they believed there were 22 people on the boat. Greek coast guard vessels assisted by two helicopters were searching for more survivors. “We can’t tolerate losing children in the Aegean Sea … the solution is to protect people, to implement safe procedures and safe routes for migrants and refugees, to hit the human trafficking circuits,” Greek migration minister Dimitris Vitsas said in a press release.

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Because man is smarter than nature.

Billion-Dollar Polar Bio-Engineering ‘Needed To Slow Melting Glaciers’ (G.)

Scientists have outlined plans to build a series of mammoth engineering projects in Greenland and Antarctica to help slow down the disintegration of the planet’s main glaciers. The controversial proposals include underwater walls, artificial islands and huge pumping stations that would channel cold water into the bases of glaciers to stop them from melting and sliding into the sea. The researchers say the work – costing tens of billions of dollars a time – is urgently needed to prevent polar glaciers melting and raising sea levels. That would lead to major inundations of low-lying, densely populated areas, such as parts of Bangladesh, Japan and the Netherlands.

Flooding in these areas is likely to cost tens of trillions of dollars a year if global warming continues at its present rate, and vast sea-wall defences will need to be built to limit the devastation. Such costs make glacier engineering in polar regions a competitive alternative, according to the team, which is led by John Moore, professor of climate change at the University of Lapland. “We think that geoengineering of glaciers could delay much of Greenland and Antarctica’s grounded ice from reaching the sea for centuries, buying time to address global warming,” the scientists write in the current issue of Nature. “Geoengineering of glaciers has received little attention in journals. Most people assume that it is unfeasible and environmentally undesirable. We disagree.”

Ideas put forward by the group specifically target the ice sheets in Greenland and Antarctic because these will contribute more to sea rise this century than any other source, they say. Their proposals include: • Building a 100-metre high wall on the seabed across a 5km wide fjord at the end of the Jakobshavn glacier in western Greenland. This would reduce influxes of warming sea water which are eroding the glacier’s base; • Constructing artificial islands in front of glaciers in Antarctica in order to buttress them and limit their collapse as their ice melts due to global warming; • Circulating cooled brine underneath glaciers such as the Pine Island glacier in Antarctica – in order to prevent their bases from melting and sliding towards the sea.

In each case, the team – which includes scientists in Finland and the US – acknowledges that costs would be in the billions. Construction is also likely to cause considerable disruption. For example, building a dam across the Jakobshavn fjord could affect ecology, fisheries and tourism, and large numbers of workers would have to be shipped in to complete the project. Similarly, building artificial islands in front of glaciers would mean importing about six cubic kilometres of material, a task that would be immensely difficult in stormy Antarctic waters. And drilling through ice that is kilometres thick to pump down cooled water would also stretch the capabilities of engineers.

Read more …

Mar 172018
 
 March 17, 2018  Posted by at 2:16 pm Finance Tagged with: , , , , , , , , , , , ,  


Jacobello Alberegno The Beast of the Apocalypse 1360-90

 

The Guardian ran an article yesterday by one of its editors, David Shariatmadari, that both proves and disproves its own theme at the same time: “An Information Apocalypse Is Coming”. Now, I don’t fancy the term apocalypse in a setting like this, it feels too much like going for a cheap thrill, but since he used it, why not.

My first reaction to the headline, and the article, is: what do you mean it’s ‘coming’? Don’t you think we have such an apocalypse already, that we’re living it, we’re smack in the middle of such a thing? If you don’t think so, would that have anything to do with you working at a major newspaper? Or with your views of the world, political and other, that shape how you experience ‘information’?

Shariatmadari starts out convincingly and honestly enough with a description of a speech that JFK was supposed to give in Dallas right after he was murdered, a speech that has been ‘resurrected’ using technology that enables one to make it seem like he did deliver it.

 

An Information Apocalypse Is Coming. How Can We Protect Ourselves?

“In a world of complex and continuing problems, in a world full of frustrations and irritations, America’s leadership must be guided by the lights of learning and reason, or else those who confuse rhetoric with reality, and the plausible with the possible will gain the popular ascendancy with their seemingly swift and simple solutions to every world problem.”

John F Kennedy’s last speech reads like a warning from history, as relevant today as it was when it was delivered in 1963 at the Dallas Trade Mart. His rich, Boston Brahmin accent reassures us even as he delivers the uncomfortable message. The contrast between his eloquence and the swagger of Donald Trump is almost painful to hear.

Yes, Kennedy’s words are lofty ones, and they do possess at least some predictive qualities. But history does play a part too. Would we have read the same in them that we do now, had Kennedy not been shot right before he could deliver them? Hard to tell.

What’s more, not long before JFK was elected president America had been in the tight and severe grip of J. Edgar Hoover and Joseph McCarthy’s anti-communist campaign, in which lots of reality was replaced with rhetoric, something Kennedy undoubtedly had in mind while writing the speech. JFK was not just addressing future threats, he was talking about the past as well.

But the writer slips into a much bigger faux pas right after: injecting Trump into the picture. It’s fine if someone doesn’t like Trump, but naming him there and then, in an article about ‘information apocalypse’, also means confusing objectivity with regards to your topic with subjectivity concerning your political ideas. While the Kennedy speech item relates to -advancing(?)- technology, a valid part of the apocalypse, mentioning Trump has nothing to do with that apocalypse, at least not objectively. Back to David Shariatmadari:

The problem is, Kennedy never spoke these words. He was killed before he made it to the Trade Mart. You can only hear them now thanks to audio technology developed by a British company, CereProc. Fragments of his voice have been taken from other speeches and public appearances, spliced and put back together, with neural networks employed to mimic his natural intonation. The result is pretty convincing, although there’s a machine-like ring to some of the syllables, a synthetic stutter. Enough to recognise, if you already know, that this is a feat of technology, not oratory.

We like to think of innovation as morally neutral. We empower scientists and engineers to range freely in the hope they might discover things that save labour and lives. The ends to which these are put aren’t the responsibility of the researchers. The agile robots produced by Boston Dynamics might look like they could cheerfully pin you up against a wall and snap your neck, but do we really want to close off this avenue of research? After all, they might equally be capable of performing life-saving surgery. The methods used to resurrect JFK can also help people with illnesses such as motor neurone disease – like the late Stephen Hawking – that affect their ability to speak.

It’s certainly true that we are so ‘geared’ towards progress, we ‘conveniently’ forget and ignore that every next step carries its own shadow side, every yin comes with its yang. ‘Progress’ and ‘innovation’ – and related terms- ring so positive in our eyes and ears it borders on -wilful- blindness. That blindness is set to play a major role in our future, and in our acceptance as gospel of a lot of ‘information’.

“Dual use” of technology is not a new problem. Nuclear physics gave us both energy and bombs. What is new is the democratisation of advanced IT, the fact that anyone with a computer can now engage in the weaponisation of information; 2016 was the year we woke up to the power of fake news, with internet conspiracy theories and lies used to bolster the case for both Brexit and Donald Trump.

Ouch! See, he does it again. This is not an objective discourse on ‘information disinformation’, but a way to make people think -through a method he’s supposed to be exposing- that ‘fake news’ led to Brexit and Trump. That’s a political view, not a neutral one. Yes, there are many voices out there who connect ‘fake news’ directly to things they don’t like, but that’s just a trap.

And as I said, it may have to do with the fact that the writer works for a major newspaper, which of course he wants to, and wishes to, see as some kind of beacon against fake news, but if he lets his own personal views slip into an objective treatment of a topic this easily, it automatically becomes self-defeating.

There is no proof that Trump and Brexit’s success are down to fake news more than their opposite sides, ‘fake news’ is everywhere, and that very much includes the Guardian. The coverage of the UK government accusations against Russia in the poisoning case proves that more than ever.

You can be anti-Trump, anti-Brexit and anti-Putin all you want, but they don’t define fake news or an information apocalypse, any more than ‘commies’ did in the days of Hoover and McCarthy.

We may, however, look back on it as a kind of phoney war, when photoshopping and video manipulation were still easily detectable. That window is closing fast. A program developed at Stanford University allows users to convincingly put words into politicians’ mouths. Celebrities can be inserted into porn videos. Quite soon it will be all but impossible for ordinary people to tell what’s real and what’s not.

That is am almost bewildering line. Does the writer really think ‘ordinary people’ can today tell apart what’s real and what’s not? If his paper had honestly covered his country’s, and his government’s, involvement in the wars all over the Middle East and North Africa over the past decades, would his readers still be supportive of the politicians that today inhabit Westminster?

Or does the paper prefer supporting the incumbents over Nigel Farage and Donald Trump, because it owes its reputation and position and revenues to supporting the likes of Theresa May and Tony Blair? Yeah, I know, with a critical view, yada yada, but when has the Guardian labeled any UK politician a war criminal? Much easier to go after Farage, isn’t it? The question is: what part of this is fake, and what is not?

What will the effects of this be? When a public figure claims the racist or sexist audio of them is simply fake, will we believe them? How will political campaigns work when millions of voters have the power to engage in dirty tricks? What about health messages on the dangers of diesel or the safety of vaccines? Will vested interests or conspiracy theorists attempt to manipulate them?

This appears to make sense, but it does not really. We are way past that. ‘Ordinary people’ have already lost their capacity to tell truth from fiction. Newspapers and TV stations have long disseminated the views of their owners, it’s just that they now have -newfound- competition from a million other sources: the blessings of social media.

The core issue here is that 1984 is not some point in the future, as we for some reason prefer to think. We are living 1984. Perhaps the fact that we are now 34 years past it should give us a clue about that? People tend to think that perhaps Orwell was right, but his predictions were way early. Were they, though?

Also: Orwell may not have foreseen the blessings and trappings of social media, but he did foresee how governments and their media sympathizers would react to them: with more disinformation.

Unable to trust what they see or hear, will people retreat into lives of non-engagement, ceding the public sphere to the already powerful or the unscrupulous? The potential for an “information apocalypse” is beginning to be taken seriously.

This is a full-blown time warp. If it is true that people only now take the potential for an “information apocalypse” seriously, they are so far behind the curve ball that one must question the role of the media in that. Why didn’t people know about that potential when it was an actual issue? Why did nobody tell them?

The problem is we have no idea what a world in which all words and images are suspect will look like, so it’s hard to come up with solutions.

Yes, we do have an idea about that, because we see it around us 24/7. Maybe not with images as fully fabricated as the JFK speech, but the essence is manipulation itself, not the means by which it’s delivered.

Perhaps not very much will change – perhaps we will develop a sixth sense for bullshit and propaganda, in the same way that it has become easy to distinguish sales calls from genuine inquiries, and scam emails with fake bank logos from the real thing.

David, we ARE all bullshitters, we all lie all the time, for a myriad of reasons, to look better, to feel better, to seem better, to get rich, to get laid. It’s who we are. We lie to ourselves most of all. A sixth sense against bullshit and propaganda is the very last thing we will ever develop, because it would force us to face our own bullshit.

But there’s no guarantee we’ll be able to defend ourselves from the onslaught, and society could start to change in unpredictable ways as a result. Like the generation JFK was addressing in his speech, we are on the cusp of a new and scary age. Rhetoric and reality, the plausible and the possible, are becoming difficult to separate. We await a figure of Kennedy’s stature to help us find a way through. Until then, we must at the very least face up to the scale of the coming challenge.

We are not “on the cusp of a new and scary age”, we are in the smack middle of it. We haven’t been able to separate rhetoric and reality, the plausible and the possible, for ages. What’s different from 100 years ago, or 50 years ago, is that now we are faced with an information overload so severe that this in itself makes us less capable of separating chaff from wheat.

So yes, that perhaps is new. But bullshit and propaganda are not. And labeling Trump and Brexit the main threats misses your own topic by miles. You could make an equally valid point that they are the results of many years of bullshit and propaganda by old-style politics and old-style media.

Maybe they’re what happens when ‘ordinary people’ switch off from an overload of bullshit and propaganda forced upon them by people and institutions they grew up to trust. And then feel they were betrayed by. A sixth sense after all.

 

 

Mar 092018
 
 March 9, 2018  Posted by at 10:29 am Finance Tagged with: , , , , , , , , , , , , , ,  


Broadway, New York 1954

 

Trump’s Historic Bet on Kim Summit Shatters Decades of Orthodoxy (BBG)
Trump Sets Steel And Aluminum Tariffs; Canada, Mexico Exempted (R.)
There Will Be No Economic Boom – Part II (Roberts)
“Gary Cohn, We Hardly Knew Ya” (David Stockman)
The Risk Lurking In The US Mortgage Market (CNN)
The End of Cheap Debt Will Bring a Wave of – Green- Bankruptcies (Mises)
Tesla Chief Musk Says China Trade Rules Uneven, Asks Trump For Help (R.)
China Will Rely Less On Stimulus As It Battles Risks From Debt – PBOC (CNBC)
UK Retirement Bill Rises More Than £1 Trillion In Five Years (Ind.)
Shares, Profits Of Britain’s Largest Estate Agent Countrywide Plummet (G.)
Toronto Home Builders Just Had Their Busiest February Since 1948 (BBG)
EU Freezes Brexit Talks Until Britain Produces Irish Border Solution (Ind.)
Calais ‘To Be 10 Times Worse Than Irish Border’ After Brexit (G.)
Bitcoin Tumbles Further In Broad Selloff For Cryptocurrencies (MW)
US Is Experiencing The Highest Drug Overdose Death Rates Ever (ZH)
Chinese Panda Conservation Park To Be Twice The Size Of Yosemite (G.)
Discarded Fishing Gear Massacres Whales, Dolphins, Seals, Turtles, Birds (Ind.)

 

 

Question is whether that is a bad thing. Or you could say: Trump brings along his own orthodoxy.

Trump’s Historic Bet on Kim Summit Shatters Decades of Orthodoxy (BBG)

Donald Trump took the biggest gamble of his presidency on Thursday, breaking decades of U.S. diplomatic orthodoxy by accepting an invitation to meet with North Korean leader Kim Jong Un. The bet is that Trump’s campaign to apply maximum economic pressure on Kim’s regime has forced him to consider what was previously unthinkable: surrendering the illicit nuclear weapons program begun by his father. If the president is right, the U.S. would avert what appeared at times last year to be a steady march toward a second Korean War. It was classic Trump, showing an unerring confidence to get the better end of any negotiation.

But it was also Trump in another way: high risk and high reward, with little regard for those in the foreign policy establishment who worry it’s too much, too soon. “He’s taking a risk,” said Patrick Cronin, senior director of the Asia-Pacific Security Program at the Center for a New American Security. “By seizing an opportunity for a summit meeting, a decision that would have taken much more time in another administration, the president has said, ‘I’m going to go right now. And we’re going to test this.”’

Read more …

“If you don’t want to pay tax, bring your plant to the USA..”

Trump Sets Steel And Aluminum Tariffs; Canada, Mexico Exempted (R.)

U.S. President Donald Trump pressed ahead on Thursday with import tariffs of 25% on steel and 10% for aluminum but exempted Canada and Mexico and offered the possibility of excluding other allies, backtracking from an earlier “no-exceptions” stance. Describing the dumping of steel and aluminum in the U.S. market as “an assault on our country,” Trump said in a White House announcement that the best outcome would for companies to move their mills and smelters to the United States. He insisted that domestic metals production was vital to national security. “If you don’t want to pay tax, bring your plant to the USA,” added Trump, flanked by steel and aluminum workers.

Plans for the tariffs, set to start in 15 days, have stirred opposition from business leaders and prominent members of Trump’s own Republican Party, who fear the duties could spark retaliation from other countries and hurt the U.S. economy. Within minutes of the announcement, U.S. Republican Senator Jeff Flake, a Trump critic, said he would introduce a bill to nullify the tariffs. But that would likely require Congress to muster an extremely difficult two-thirds majority to override a Trump veto. Some Democrats praised the move, including Senator Joe Manchin of West Virginia, who said it was “past time to defend our interests, our security and our workers in the global economy and that is exactly what the president is proposing with these tariffs.”

Read more …

Perhaps somewhat surprising: The consumer spending part of GDP only rises.

There Will Be No Economic Boom – Part II (Roberts)

When the “tax cut” bill was being passed, everyone from Congress to the mainstream media, and even the CFP’s I spoke with yesterday, regurgitated the same “storyline:” “Tax cuts will lead to an economic boom as corporations increase wages, hire and produce more and consumers have extra money in their pockets to spend.” As I have written many times previously, this was always more “hope” than “reality.” The economy, as we currently calculate it, is roughly 70% driven by what you and I consume or “personal consumption expenditures (PCE).” The chart below shows the history of real, inflation-adjusted, PCE as a percent of real GDP.

If “tax cuts” are going to substantially increase the growth rate of the U.S. economy, as touted by the current Administration, then PCE has to be directly targeted. However, while the majority of consumers will receive an “average” of $1182 in the form of a tax reduction, (or $98.50 a month), the increase in take-home pay has already been offset by surging health care cost, rent, energy and higher debt service payments. [..] But this is nothing new as corporations have failed to “share the wealth” for the last couple of decades.

Read more …

Those crazy earnings numbers WILL come crashing down.

“Gary Cohn, We Hardly Knew Ya” (David Stockman)

That was quick. The trade war scare was over by noon yesterday, and by the market close they were singing “Gary Cohn, we hardly knew ya”. Folks, what more evidence do you need that the financial markets are completely uncoupled from reality and that these feeble bounces between the 50-day and 20-day chart points are essentially the rigor mortis of a dead bull? At the moment, the 50-day stands at 2740 on the S&P 500 and is functioning as “resistance” according to the chart mavens, while the 20-day at 2700 is purportedly acting as “support”. So there’s that, but also this: At the exact mid-point of 2720, the broad market is currently trading at 25.6X reported earnings for 2017.

That’s the nosebleed section of history no matter how you slice it – and most especially in the context of an earnings growth trend that is shackled to the flat line, and which has no prospect of breaking away before the next recession, either. With virtually every company having reported, it turns out that GAAP earnings for 2017 came in at $109.46 per share on the S&P 500. Then again, 40 months earlier in September 2014 reported LTM earnings were $105.96 per share. That tabulates to a 1.0% per year gain during what will surely prove to have been the sweet spot (month #63 to month #102) of the current long-in-the-tooth business expansion.

Read more …

Non-banks. How is that different from China?

The Risk Lurking In The US Mortgage Market (CNN)

Low interest rates. Easy credit. Poor regulation. Toxic mortgages. These were just a few reasons regulators gave for the collapse of the US housing market a decade ago. Since then, regulators have improved the standards that lenders use when Americans apply for mortgages. But today increasing danger lurks in the mortgage market, and economists say it could put the financial system at “even greater risk” when the next recession strikes or too many borrowers fall behind on their mortgage payments. A growing segment of the mortgage market is being financed by so-called non-bank lenders — financial institutions that offer loans to consumers but don’t provide saving or checking accounts.

Borrowers with poor credit have increasingly turned to these alternative lenders instead of traditional banks. The alternative lenders are subject to far less regulation and have fewer safeguards when borrower defaults start to pile up. “A collapse of the non-bank mortgage sector has the potential to result in substantial costs and harm to consumers and the US government,” economists at the Federal Reserve and the University of California, Berkeley, write in a paper released Thursday at a Brookings Institution conference. As of 2016, non-bank financial institutions originated close to half of all mortgages. They originated three-quarters of mortgages with explicit government backing, underscoring the risk to taxpayers.

“The experience of the financial crisis suggests that the government will be pressured to backstop the sector in a time of stress,” the authors write. The danger is that non-banks may have fewer resources to weather economic shocks to the mortgage market, like a rise in interest rates or a decline in house prices. “What happens if interest rates rise and non-bank revenue drops? What happens if commercial banks or other financial institutions lose their taste for extending credit to non-banks? What happens if delinquency rates rise and servicers have to advance payments to investors?” the authors write. “We cannot provide reassuring answers to any of these questions,” they write.

Read more …

The entire Green Facade depends on cheap credit. And subsidies.

The End of Cheap Debt Will Bring a Wave of – Green- Bankruptcies (Mises)

The end of the era of cheap money highlights the risk of “Enron-style” bankruptcies in many sectors, including renewable energy. With the path of three rate hikes in the United States in 2018 confirmed by the Federal Reserve and a nervous equity market, the challenges are more evident than ever. The past eight years of massive liquidity and low rates have not helped deleverage, and many companies have used this period to increase imbalances and create complex debt structures. In fact: • Corporate net debt to EBITDA levels is at record highs. About 20% of US corporates face default if rates rise, according to the IMF. • The number of zombie companies has risen above pre-crisis levels according to the Bank of International Settlements (BIS). • This is particularly evident in the renewable sector where, even in the years of high liquidity and low rates, bankruptcies soared.

The renewable sector has undergone an absolutely spectacular transformation in the past eight years. Technology advanced, costs fell and global leaders strengthened when their strategy was to develop an energy model. Understanding that disruptive technologies cannot be more leveraged than traditional ones was key. When technology reduces costs and disrupts inflationary models, basing the business on ever-increasing subsidies and higher prices and financing it with massive debt is suicidal. In the era of cheap money and extreme liquidity, many companies used the “green” subterfuge to implement an extremely leveraged builder-developer model, ignoring demand, costs, and competition. A model whose sole objective was to install for the sake of installing capacity, whether there was a demand or not, and that pursued subsidies while stating that it is very competitive.

Even in a period of falling interest rates and very high liquidity, there have been spectacular bankruptcies, so imagine what can happen when rates rise. [..] If a technology is viable, it does not need subsidies. If it is unviable, no subsidies will change it. Bankruptcies in the solar sector exceed all those of the inefficient coal and fracking companies combined. This domino of bankruptcies, which includes more than 120 corpses of large companies around the world, was self-inflicted. And now, winter is coming. [..] The global renewable sector faces refinancing needs in the next seven to eight years that exceed its entire market capitalization (134 billion euros, Renixx Index).

It is not a problem of technology, it is the addiction to cheap debt and growth for growth sake. And it’s not just a problem in the renewable sector. The combination of lower revenues and increased debt costs is a danger. Cost of debt rises, and cost of equity soars due to higher perceived risk, which in turn can dry up the market for capital increases and refinancing. It is not just renewables, but it is worth highlighting that energy is -again- the most vulnerable sector due to the cyclical nature of its revenues and the perpetuation of overcapacity of the past eight years.

Read more …

Musk is the leader of the Green Facade.

Tesla Chief Musk Says China Trade Rules Uneven, Asks Trump For Help (R.)

Tesla CEO Elon Musk took to Twitter on Thursday to call on U.S. President Donald Trump to challenge China’s auto trade rules, which limit foreign ownership of Chinese ventures and impose steep tariffs on imported cars. In a series of tweets aimed at the president, Musk said he was “against import duties in general, but the current rules make things very difficult. It’s like competing in an Olympic race wearing lead shoes.” Tesla has been pushing hard to build cars in China, the world’s largest auto market, but has hit roadblocks in negotiations with local authorities, in part because Musk is keen to keep full control of any local venture. “No U.S. auto company is allowed to own even 50% of their own factory in China, but there are five 100% China-owned EV (electric vehicle) auto companies in the U.S.,” Musk wrote in another tweet.

Tesla “raised this with the prior administration and nothing happened. Just want a fair outcome, ideally where tariffs/rules are equally moderate. Nothing more. Hope this does not seem unreasonable,” he said. Trump quoted one of Musk’s tweets in his announcement on new tariffs and said American automakers have not been treated fairly by trade rules around the world. Trump announced steep tariffs on steel and aluminum imports on Thursday. Politicians “have known it for years and never did anything about it. It’s got to change,” Trump said, saying he plans to impose a “reciprocal tax” on other countries. “We’re changing things,” Trump added. “We just want fairness.”

Read more …

Yeah, we all believe that.

China Will Rely Less On Stimulus As It Battles Risks From Debt – PBOC (CNBC)

China has moved away from its old growth model which was heavily reliant on investment and will rely less on stimulus to boost the economy in future, People’s Bank of China governor Zhou Xiaochuan said on Friday. Zhou’s comments echoed those of other top officials at China’s parliament this week which suggested that Beijing will be more cautious about spending this year while it focuses on reducing the risks from a rapid build-up in debt. After years of heavy pump-priming, markets worry less generous stimulus could retard the pace of growth not only in China but globally. But analysts believe Beijing will continue to keep the system well supplied with cash to avoid the risk of a sharp slowdown in economic growth, even as they continue to tighten the screws on financial regulations.

“We now emphasize the new normal of the economy, shifting from the past growth model of quantitative growth… referring to the accumulation of capital and investment to boost economic growth,” Zhou told reporters on the sidelines of the annual parliament session. “While pursuing higher quality growth, we will have to reduce our reliance on the old growth model of investment,” said Zhou, in what was likely his last news briefing before his expected retirement this month. Zhou said China needs to improve its regulatory supervision as soon as possible to curb risks to the financial system. He said China has begun to make progress in reducing such risks, but numerous threats remain, such as a lack of transparency at financial holding companies and digital currencies.

Read more …

The Brexit fiasco continues to expose the hidden weaknesses. Which in the case of pensions are global, but mostly remain hidden.

UK Retirement Bill Rises More Than £1 Trillion In Five Years (Ind.)

The UK’s pension funding crisis reached a new crisis milestone this week as the Office for National Statistics revealed the UK’s pension funding liabilities rose to £7.6 trillion at the end of 2015. The figure – the total amount promised to pay Brits’ future retirement income – includes £5.3 trillion of pension entitlements that were the responsibility of central and local government, most of which – around £4 trillion – came from State Pension entitlements. The remaining £2.3 trillion were private sector employee pension entitlements with £2 trillion due to final salary pensions, up from £1.4 trillion in 2010. As things stand, expert commentators suggest there is only around a third of that ‘in the bank’ in company pension funds.

The remainder, it is hoped, will be generated by future working populations. The figures are designed to provide a snapshot of household retirement entitlements, though they don’t include self-invested personal pensions, which have grown significantly in recent years thanks to legislative changes known as pensions freedoms. “While these are obviously large amounts of money, it is important to remember that the payments will be drawn over many years,” says Darren Morgan, head of national accounts for the ONS. “The figures say nothing about the sustainability of our pension system in future.”

In fact, pensions experts have been shocked by the statistics, which come just days after official warnings from the Government Actuary that National Insurance may have to increase by 5% to pay for future state pay outs. “The figures published by the ONS today are astonishing and bring into sharp relief the reasons behind proposed increases in the state pension age,” adds Tom Selby, senior analyst at AJ Bell. “Unfunded state pension entitlements are worth more than double UK GDP – these are promises that will, ultimately, have to be paid for by future generations either through higher taxes, a lower state pension income or a later retirement age.

Read more …

Why not say it like it is?

Shares, Profits Of Britain’s Largest Estate Agent Countrywide Plummet (G.)

Countrywide, Britain’s largest estate agent, has reported a 22.5% fall in core annual earnings and scrapped its dividend, sending its shares to record lows. It pledged to go “back to basics” to return its sales and lettings business to profitable growth after what it described as a disappointing year. “We have got to put our resources back in the front line and not at the head office,” said the executive chairman, Peter Long, adding that restructuring would reduce headcount to 350 from 400. Countrywide said its 2018 property pipeline was “significantly lower” and that it expected a fall of about 36% (£10m) in first-half adjusted earnings before interest, taxation and amortisation (Ebitda).

Its 2017 adjusted Ebitda fell 22.5% to £64.7m while group income fell almost 9% to £671.9m. Shares in Countrywide plunged to a record low of 66.64p before rising to 77p in mid-morning trading, down 13.4% . “The next few months will be messy as new plans are put into place,” Jefferies analysts said in a note to clients. “However, banks are lending their support to the new plan and we believe those equity investors who choose to do the same will have their patience rewarded.”

Read more …

As sales are down 35%.

Greater Toronto Home Sales Down 35% From February 2017

Toronto Home Builders Just Had Their Busiest February Since 1948 (BBG)

Toronto developers had one of their busiest months on record in February in another sign the condo market is alive and well in Canada’s biggest real estate market, even amid a broader slowdown. Builders began work on 5,677 units during the month, most of them multiple-unit projects like condos, the Canada Mortgage and Housing Corp. said Thursday in Ottawa. That’s the strongest February, and the sixth-highest figure for any month, in records back to 1948. The bulk of Toronto condo units are typically sold before construction begins, so the latest surge may simply reflect past sales. But the report also suggests developers are betting the condo market will be less affected by headwinds including higher borrowing costs and tighter mortgage qualification rules that are currently hitting Toronto housing.

“It’s probably lagging a little bit. Historically you tend to see supply follow demand,” said Robert Kavcic, an economist at Bank of Montreal. “The other nuance here is that a lot of the policy changes we’ve seen over the last year, they really had a bigger impact on the higher end of the single detached housing market.” [..] Construction is picking up in Toronto just as sales begin to slide, after various levels of government and regulators took measures to curb surging prices. Most recently, tougher mortgage guidelines came into play on Jan. 1, making it harder for prospective buyers to qualify for loans. Many buyers rushed into the market in December to get ahead of the rules.

Transactions fell 35% in February from a year earlier to 5,175 units, according to data released Tuesday by the Toronto Real Estate Board. It was the weakest February for sales since 2009. Prices are holding up better, particularly in the condo segment, which has gained consistently over the past year and is up 20% since last February. Prices for single-detached homes have fallen 12% since reaching a record last year. Fundamentals that favor condos seem to be at work, as rising immigration levels drive demand. And since the net effect of the new regulations is to limit the size of mortgage credit, the tougher rules may be buoying the less-expensive condo market.

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Thumbscrews.

EU Freezes Brexit Talks Until Britain Produces Irish Border Solution (Ind.)

The EU has thrown down an ultimatum to Theresa May in Brexit talks, warning that it will not open discussions about trade or other issues until the Irish border question is solved. Speaking in Dublin alongside the Irish Prime Minister Leo Varadkar, European Council President Donald Tusk said talks would be a case of “Ireland first” and that “the risk of destabilising the fragile peace process must be avoided at all costs”. “We know today that the UK Government rejects a customs and regulatory border down the Irish Sea, the EU single market, and the customs union,” the Mr Tusk said. “While we must respect this position, we also expect the UK to propose a specific and realistic solution to avoid a hard border.

“As long as the UK doesn’t present such a solution, it is very difficult to imagine substantive progress in Brexit negotiations. “If in London someone assumes that the negotiations will deal with other issues first before the Irish issue, my response would be: Ireland first.” British negotiators have long been keen to move to discussions about trade and had hoped to do so after the March meeting of the European Council in two weeks, but Mr Tusk’s latest ultimatum suggests further delays could be in store. The EU says a withdrawal agreement must be negotiated by October to give it time to ratify the deal before the UK falls out of the bloc in March 2019.

Mr Tusk recalled that the Good Friday Agreement, whose 20th anniversary is next month, had been “ratified by huge majorities north and south of the border”. “We must recognise the democratic decision taken by Britain to leave the EU in 2016 – just as we must recognise the democratic decision made on the island of Ireland in 1998 with all its consequences,” he said, in a play on the rhetoric used by Brexiteers regarding the 2016 EU referendum. The EU27 nations granted the UK “sufficient progress” to move to the rest of Brexit talks in the December meeting of the European Council after the UK made a commitment to avoid a hard border on the island of Ireland at all costs.

Read more …

30-mile lines of waiting trucks. That was reason no. 1 to establish the EU. Well, they’re back.

Calais ‘To Be 10 Times Worse Than Irish Border’ After Brexit (G.)

The boss of the port of Calais has said there could be tailbacks up to 30 miles in all directions and potential food shortages in Britain if a Brexit deal involves mandatory customs and sanitary checks at the French ferry terminal. Jean-Marc Puissesseau made an impassioned plea to Theresa May and Michel Barnier to put plans in place immediately to avert congestion in Calais and Dover, where bosses have already warned of permanent 20-mile tailbacks. At the same time a leading politician for the Calais region said the problems in France would be 10 times worse than at the Irish border. At a private meeting at the European parliament, Xavier Bertrand, a former French health minister and the president of the Hauts-de-France political region, said politicians needed to grasp the magnitude of the problem.

“I know Ireland is going to be a real problem, but please remember the economic issues in Ireland are 10 times smaller than what is going to happen here,” he said. “This is a black scenario, but it is going to get darker and darker,” he said, urging politicians in Brussels and London to take urgent action by setting up working groups and listening to business. Bertrand angrily denounced those who had power to influence the Brexit outcome. It was not right that economic operators should be expected to “sit on their hands waiting very anxiously for something to happen”.

At the same meeting, Puissesseau said both sides would be affected by the problems at the ports, with suppliers from the UK trying to get their goods through strict EU controls treated no better than those from a developing country. “The UK is part of the 21st century. But this takes us back 100 years. This is sad,” he said. “From Brexit day, 100% of our traffic will be from outside the EU. I tell you honestly that GB will be a third country, this frightens me. There’s such a long history between the UK and EU.” “At the moment, 70% of food imported comes from the EU. Even if that goes down to 50% after Brexit because of controls, it still needs to flow smoothly; people still need to eat,” he said.

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$8,500 as I write this, -8.46%.

Bitcoin Tumbles Further In Broad Selloff For Cryptocurrencies (MW)

Selling intensified for digital currencies on Friday, as the price of the No.1 cryptocurrency bitcoin pushed below $9,000. The price of a single bitcoin fell 4.8% to $8,847.85, but bounced off a low of $8,370.80, according to CoinDesk. In a week, bitcoin has dropped around 20%. Losses were widespread across cryptocurrencies. Ether was down 4.5% to $671.66, bitcoin cash slid 6.4% to $970.66 and Litecoin fell 6.2% to $166.22, according to CoinDesk. Ripple tumbled 10% to $0.78, according to CoinMarketCap. The moves build on sharp drops on Thursday, which some suggested were due to technical factors.

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Winning.

US Is Experiencing The Highest Drug Overdose Death Rates Ever (ZH)

Across the United States, government officials are struggling to combat the next wave of the opioid epidemic, which is expected to deliver a massive blow to the heartland. A new report from the Centers for Disease Control and Prevention (CDC) confirms the opioid crisis has dramatically worsened since the second half of 2016. Raw data from hospital emergency rooms show a significant increase in drug overdoses across the U.S. In a press briefing on Tuesday, CDC Director Anne Schuchat, M.D., warned that the U.S. is currently experiencing the highest drug overdose death rates ever.

In the newly issued report, which examined data from 16 states, emergency department visits for suspected opioid overdoses jumped 30% from July 2016 through September 2017. In some regions of the country, overdoses were far more significant, but overall, data from most areas showed the opioid crisis is worsening, despite President Trump’s new initiative to tackle the epidemic.

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Save the symbols?!

Chinese Panda Conservation Park To Be Twice The Size Of Yosemite (G.)

The Bank of China has pledged at least 10bn yuan (£1.1bn) to create a vast panda conservation park in south-west Sichuan province, the Chinese forestry ministry has said. The Sichuan branch of the central bank signed an agreement with the provincial government to finance the vast national park’s construction by 2023. The park aims to bolster the local economy while providing the endangered animals with an unbroken range in which they can meet and mate with other pandas in order to enrich their gene pool.The ministry said the park will measure 2m hectares (5m acres), making it more than twice the size of Yellowstone national park in the US.

Zhang Weichao, a Sichuan official involved in the park planning, told the state-run China Daily the agreement would help alleviate poverty among the 170,000 people living within the project’s proposed territory. Plans for the park were initiated in January last year by the ruling Communist party’s central committee and the state council, the China Daily reported. Giant pandas are China’s unofficial national mascot and live mainly in the Sichuan mountains, with some in neighbouring Gansu and Shaanxi provinces. An estimated 1,864 live in the wild, where they are chiefly threatened by habitat loss. Another 300 live in captivity.

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By treating the oceans as our garbage bin, we will make it exactly that.

Discarded Fishing Gear Massacres Whales, Dolphins, Seals, Turtles, Birds (Ind.)

The world’s biggest seafood firms are all contributing to the deaths of more than 100,000 whales, dolphins, seals, turtles and seabirds that are killed in agony every year by discarded fishing equipment, according to a new report. Many of the creatures are drowned, strangled or mutilated by plastic gear lost or abandoned at sea, while others suffer “a prolonged and painful death, usually suffocating or starving” either because they cannot fish or their stomachs are full of plastic. Campaigners believe the fishing litter problem is becoming so bad that the oceans could end up unable to provide any catches for humans to eat.

They say “ghost gear” has become a huge but overlooked threat to marine life, and 640,000 tons of it are added to the oceans each year – a rate of more than a ton every minute. A new study analysed the approaches to fishing equipment of the world’s 15 biggest seafood companies, to rank them in five categories – but found that none could be ranked in the top two as having “best practice” or making “responsible handling” of their fishing gear integral to their business strategy. [..] The report, entitled Ghosts beneath the Waves, says abandoned and lost gear is four times more likely to trap and kill creatures than all other forms of marine debris combined, and more than 70% of visible plastic in the sea is fishing-related.

Microplastics – minuscule pieces – were found in the digestive tracts of 80% of seals tested off the coast of Ireland, while other research cited found that plastic accounted for 69% of the debris ingested by whales. Other studies said 98% of whale entanglements involved ghost gear, while 82% of North Atlantic right whales have become entangled at least once. “This is a huge crisis of animal suffering, yet hardly anyone is talking about it,” said World Animal Protection. In one deep water fishery in the north east Atlantic 25,000 nets have been recorded as lost or discarded each year, according to the report. “Even within small areas, the amount of ghost gear can be staggering,” it said. “The Florida Keys National Marine Sanctuary, for example, is estimated to be littered with 85,000 active ghost lobster and crab pots.

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Mar 062018
 
 March 6, 2018  Posted by at 11:16 am Finance Tagged with: , , , , , , , , , , ,  


Vincent van Gogh Le Moulin à Poivre, Montmartre 1887

 

EU Proposes Retaliatory Tariff of 25% Against U.S. Goods (BBG)
Trump’s Tariff Threat On European Cars Could Spell Big Trouble For Germany (CNBC)
Retail Investor Bullishness Collapses (WS)
World’s ‘Shadow Banks’ Continue To Expand (R.)
China to Ease Bad-Loan Provision Rules to Support Growth (BBG)
China Faces an ‘Impossible Challenge’ on Budget, Tax and GDP (BBG)
China’s Coming Meltdown Will Rapidly Spread to US (Rickards)
Sex, Money & Happiness (Roberts)
British Can’t Deliver Promises Of Frictionless Trade (Fintan O’Toole)
Canada’s Looming Economic Meltdown (GT)
Coinbase Accused of Cheating Consumers in More Ways Than One (BBG)
US, UK Support World’s Worst Humanitarian Disaster In 50 Years (CP)
Light It Up (Jim Kunstler)
The Ocean Currents Brought Us In A Lovely Gift Today (G.)

 

 

Trump said ‘if you don’t have steel, you don’t have a country’. Is he all that wrong?

EU Proposes Retaliatory Tariff of 25% Against U.S. Goods (BBG)

The EU is preparing punitive tariffs on iconic U.S. brands produced in key Republican constituencies, raising political pressure on President Donald Trump to ditch his plans for taxing steel and aluminum imports. Targeting $3.5 billion of American goods, the EU aims to apply a 25 percent tit-for-tat levy on a range of consumer, agricultural and steel products imported from the U.S. if Trump follows through on his tariff threat, according to a list drawn up by the European Commission and obtained by Bloomberg News. The list of targeted U.S. goods – including motorcycles, jeans and bourbon whiskey – sends a political message to Washington about the potential domestic economic costs of making good on the president’s threat.

Paul Ryan, Republican speaker of the House of Representatives, comes from the same state – Wisconsin – where motorbike maker Harley-Davidson is based. Earlier this week, Ryan said he was “extremely worried about the consequences of a trade war” and urged Trump to drop his tariff proposal. Other U.S. officials will also feel the pressure. Bourbon whiskey hails from Senate Majority Leader Mitch McConnell’s home state of Kentucky. San Francisco-based jeans maker Levi Strauss is headquartered in House Minority Leader Nancy Pelosi’s district. The EU’s retaliatory list targets imports from the U.S. of shirts, jeans, cosmetics, other consumer goods, motorbikes and pleasure boats worth around €1 billion; orange juice, bourbon whiskey, corn and other agricultural products totaling €951 million; and steel and other industrial products valued at €854 million.

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Tariff on US cars exported to Europe is 25%. Tariff on EU cars imported in US is 10%. Looks like there is room for talks there.

Trump’s Tariff Threat On European Cars Could Spell Big Trouble For Germany (CNBC)

The war of words between President Donald Trump and the EU could lead to some serious pressure on the German auto industry, one expert told CNBC. Trump threatened via Twitter on Saturday to hit back at any tariff measures from the European Union — floated in response to Trump’s recently announced global steel import tariffs — in kind. The billionaire businessman’s potential next target? European cars. And the biggest victim of them all may be Germany. “It would be quite severe if we were to face additional import duties to ship the cars into the U.S. — the Germans in particular are very, very exposed,” Arndt Ellinghorst, the head of global automotive research for advisory firm Evercore ISI, told CNBC Monday.

He noted the example of BMW, which sells about 350,000 cars in the U.S. annually, roughly 70% of which come from Europe. “That’s probably an $8 billion to $9 billion revenue stream, if you put a 5 to 10% additional cost on it, it would cost something like $400 million to $800 million. Some of that would be absorbed by the company, and some of it would have to be absorbed by the consumer in the U.S.” Ellinghorst did add that cars being shipped from the U.S. into Europe faced a 10% import duty while European cars into the U.S. faced a 2.5% import duty. “I think what the administration is talking about is to balance out this difference in tariffs to make it more of an equal playing ground for American and European carmakers,” he said.

Out of roughly six million cars exported by Europe in 2016, more than one million were absorbed by the U.S. — just over 16% — its largest country market by a wide margin. Meanwhile, of America’s $53.6 billion in car exports that same year, the value of its car exports into Europe was $11.8 billion, or roughly 22% of the total, according to the Observatory of Economic Complexity. The U.S. is the third-largest car exporter globally after Germany and Japan, accounting for 7.7% of total world exports. It ran a trade deficit of more than $151 billion overall with Europe in 2017.

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The aftermath of the reurn of volatility.

Retail Investor Bullishness Collapses (WS)

TD Ameritrade’s Investor Movement Index – “designed to indicate the sentiment of retail investors” based on what they’re doing in their accounts and “how they are actually positioned in the markets” – plunged 23% in February to 5.95, the biggest month-over-month plunge in the history of the index, “as volatility returned to the market.” This comes after a 9% plunge of the index in January, the largest month-over-month plunge in three years, which occurred despite the final spurt of the rally that took the stock market indices to new highs on January 26. It’s as if retail investors, for once, smelled a rat. After which the sell-off started:

TDA Chief Market Strategist JJ Kinahan explained in an interview that TDA’s clients “didn’t want to be as exposed” in February to risk “as they were.” “What’s interesting is they were net buyers, and they were net buyers because of the February 9th move,” he said. “They bought a lot of stocks that day. But as the month went on, they just continued to sell those stocks back out, and then some. So it was a really interesting pattern that developed.” The stocks they bought had “lower beta than some of the stocks they sold,” he said. “So it was really and truly a risk-off trade. But the bigger part about it is they lightened up their exposure across the board. So one or two days truly of buying,… but after that, not only selling what they’d bought that day, but selling on top of it what they’d bought earlier” this year and last year.

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Hard to gauge how much of a grip the Financial Stability Board has on the actual numbers. 2016 is the first time they include China. But what do they actually know, and how much is guesswork?

World’s ‘Shadow Banks’ Continue To Expand (R.)

Growth in global bond, real estate and money market funds continued to swell the world’s“shadow banking” sector, a watchdog that coordinates financial regulation for the G20 big economies said on Monday. The Financial Stability Board said its“narrow” measure of shadow banking activities that could pose a threat to stability, rose 7.6% to $45.2 trillion in 2016, the latest year for which figures have been collated. It represents 13% of total financial system assets in the 29 jurisdictions surveyed. Data from China and Luxembourg were included in the measure for the first time. “Non-bank financing provides a valuable alternative to bank financing and helps support real economic activity,” the FSB said in its report. Nevertheless, increased reliance on non-bank funding could give rise to new risks, it said.

The so-called shadow banking sector, made up of companies other than banks that provide financial services, has been treated with suspicion by some regulators since the financial crisis a decade ago. Still, it has some champions among policymakers who say it helps keep capital markets more liquid. The European Union actively courts participants to diversify away from heavy reliance on bank loans for EU companies. Apart from debt investment funds, the measure of shadow banking also includes the repurchase and debt securitization markets as well as hedge funds involved in credit. Faced with few rules in the past, sub-sectors like securitization are now regulated and seen to pose less risk to stability.

Open-ended bond funds, hedge funds that offer credit and money market funds account for 72% of the narrow measure, and grew by 11% in 2016. Regulators have asked funds to have safeguards in place for extreme market turbulence to avoid instability from fire sales of assets if many investors ask for their money back. The United States accounts for 31% of the narrow measure, followed by China with 16%, the Cayman Islands at 10% and Japan at 6%. A broader measure, which includes all financial firms that are not central banks, banks, pension funds or insurers, rose 8% to $99 trillion to represent 30% of global financial assets, its highest level since at least 2002, the FSB said.

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How transparent are these shadows?

China to Ease Bad-Loan Provision Rules to Support Growth (BBG)

China is relaxing rules governing how much banks must set aside to cover bad loans, people with knowledge of the matter said, a sign that regulators are comfortable the nation’s lenders are sound enough to extend additional credit and support the economy. The China Banking Regulatory Commission has issued a notice lowering the bad-loan coverage ratio to a minimum 120% from the previous 150%, the people said, asking not to be identified as the matter isn’t public. Relaxed bad-loan coverage rules will allow banks to extend more credit, supporting an economy the government expects to expand about 6.5% this year, a slower pace than in 2017. Additional lending from giants such as Industrial & Commercial Bank of China would also counter some of the effects on the economy of President Xi Jinping’s campaign to curb financial risk, one of the government’s top priorities.

The changes also indicate regulators are confident that they’ve come to grips with a bad-loan epidemic that plagued lenders over the past few years. In 2016, when problem loans at Chinese banks were on the rise, the CBRC resisted lobbying from the nation’s lenders to relax the provisioning thresholds. The timing of the CBRC move suggests that “nonperforming loans are not a problem,” analysts at Shenwan Hongyuan said in a research note. [..] According to the notice, the CBRC will differentiate the amount of provisions an individual bank must hold within the new band of 120% to 150%, based on the level of its capital, the accuracy of its loan classification policies and its proactiveness in handling nonperforming loans, the people said.

China’s banking industry has a bad loan coverage ratio above 180%, CBRC official Xiao Yuanqi said at a briefing last week, indicating banks have plenty of room to reduce provisions. As well as lowering the threshold, the CBRC notice said it will reduce the amount of provisions banks must hold against their total loan book, including healthy loans, to as low as 1.5% from the previous 2.5% minimum.

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They can’t have it all.

China Faces an ‘Impossible Challenge’ on Budget, Tax and GDP (BBG)

Premier Li Keqiang has an “impossible challenge” if he wants to slash China’s budget deficit target, deleverage the economy, and cut taxes, according to Pantheon Macroeconomics. Li on Monday said this year’s deficit goal was cut to 2.6% of gross domestic product, from 3%, the first reduction since 2012. At the same time, he pledged tax cuts of 800 billion yuan ($126 billion) for companies and individuals and set a 6.5% annual economic growth target – the same as last year’s target but slower than the actual performance of 6.9%. “These targets suggest tight monetary conditions and tight fiscal policy, with GDP growth holding up, despite an intensified deleveraging campaign,” said chief Asia economist Freya Beamish in London. “Something’s got to give. We reckon it’s fiscal policy, though monetary policy could also turn out on the easier side, with the yuan also set to weaken.”

[..] While China is aiming for a narrower official deficit, leaders still plan to expand the issuance of special purpose bonds, which are sold by local governments to finance items that aren’t included in the general public budget and not counted in the deficit ratio released annually. Local governments have used special bonds to help pay for highways, railroads and other construction projects in recent years, and the securities are designed to be covered by returns of the projects rather than general revenues. Special purpose bond issuance will jump to 1.35 trillion yuan this year to prioritize “supporting ongoing local projects to see them make steady progress,” the Finance Ministry said Monday. That’s up from 800 billion yuan in 2017 and 400 billion yuan in 2016.

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An entire series of companies guaranteeing each other’s debt. How does that surface in those shadow reports?

China’s Coming Meltdown Will Rapidly Spread to US (Rickards)

The coming credit crisis in China is no secret. China has $1 trillion or more in bad debts waiting to explode. These bad debts permeate the economy. Some are incurred by Chinese provincial authorities trying to get around spending limitations imposed by Beijing. Some are straight commercial loans on bank balance sheets. Some are external dollar-denominated debts owed to foreign creditors. The most dangerous type of debt involves a daisy chain of insolvent corporations buying debt from each other. A single cash advance of $100 million can be passed from corporation to corporation in exchange for a new promissory note, used to extinguish an old unpayable promissory note. Repeated enough times, the $100 million can be used as window dressing to prop up $1 billion or even $2 billion of bad debts.

These kinds of accounting tricks will land you in jail in the U.S., but it’s an accepted practice in China as long as the corporate CEO is a “Princeling” (a politically connected Communist Party insider descended from the old guard) or an oligarch willing to pay bribes. This state of affairs has existed for years. The question investors keep asking is, “How long can this last?” How long can the daisy chain keep operating to gloss over a sea of bad debt and give the Chinese economy an appearance of good health? Well, the answer is the Ponzi will not likely last much longer. Even compliant Chinese regulators are starting to blow the whistle on bad loans and the banks that cover them up. So the good news is that China is starting to address the problem. The bad news is that if China gets serious about cleaning up bad debts, their growth will slow significantly and so will world economic growth.

That’s bad news for global stock markets. Essentially, China is on the horns of a dilemma with no good way out. On the one hand, China has driven growth for the past eight years with excessive credit, wasted infrastructure investment and Ponzi schemes like wealth management products (WMPs). The Chinese leadership knows this, but they had to keep the growth machine in high gear to create jobs for millions of migrants coming from the countryside to the city and to maintain jobs for the millions more already in the cities. The Communist Chinese leadership knew that a day of reckoning would come. The two ways to get rid of debt are deflation (which results in write-offs, bankruptcies and unemployment) or inflation (which results in theft of purchasing power, similar to a tax increase). Both alternatives are unacceptable to the Communists because they lack the political legitimacy to endure either unemployment or inflation. Either policy would cause social unrest and unleash revolutionary potential.

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Americans can’t get away from the money makes you happy syndrome.

Sex, Money & Happiness (Roberts)

“Sex” and “Money” are probably two of the most powerful words in the English language. First, those two words got you to look at this article. They also sell products, books, and services from “How To Have Better Sex” to “How To Make More Money” — ostensibly so you can have more of the former. Unfortunately, they are also the two primary causes of divorce in the country today. But “happiness,” is also an interesting word because it is ultimately derived from the ability to obtain money and the lifestyle with which it will afford. Researchers at Purdue University recently studied data culled from across the globe and found that “happiness” doesn’t rise indefinitely with income. In fact, there were cut-off points at which more annual income had a negative effect on overall life satisfaction.

So, what’s that number? In the U.S., $65,000 was found to be the optimal income for “feeling” happy. In the U.S., despite higher levels of low income (now there’s an oxymoron), inflation-adjusted median incomes have remained virtually stagnant since 1998.

However, the chart above is grossly misleading because the income gains have only occurred in the Top 20% of income earners. For the bottom 80%, they are well short of the incomes needed to obtain “happiness.”

For most American “families”, who have to balance their living standards to their income, the “experience” of “happiness” is more of a function of “meeting obligations” each and every month. Today, more than ever, the walk to the end of the driveway has become a dreaded thing as bills loom large in the dark crevices of the mailbox. If they can meet those obligations, they are “happy.” If not, not so much.

In my opinion, what the study failed to capture was the “change” in what was required to achieve “perceived” happiness following the “financial crisis.” Just as with “The Great Depression,” individuals forever altered their feelings about banks, saving and investing after an entire generation had lost “everything.” It is the same today as sluggish wage growth has failed to keep up with the cost of living which has forced an entire generation into debt just to make ends meet. As the chart below shows, while savings spiked during the financial crisis, the rising cost of living for the bottom 80% has outpaced the median level of “disposable income” for that same group. As a consequence, the inability to “save” has continued.

[..] Not surprisingly, the “financial stress” in American households is leading to other factors which are fueling the “demographic” problem in the future. The equation is very simple – when individuals are stressed over finances they are less active sexually. This was shown in a recent study by the National Bureau of Economic Research. Ahead of the past three US recessions, the number of conceptions began to fall at least six months before the economy started to contract. As the FT notes, while previous research has shown how birth rates track economic cycles, the scientific study is the first to show that fertility declines are a leading indicator of recessions. [..] To the researchers’ surprise, they found that falls in conceptions were a far better leading indicator of recessions than many commonly used indicators such as consumer confidence, measures of uncertainty, and purchases of big-ticket items such as washing machines and cars.

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Sheer incompetence. Much more of that to come.

British Can’t Deliver Promises Of Frictionless Trade (Fintan O’Toole)

In 2016, more than 310 million people and nearly 500 million tonnes of freight crossed the UK’s borders. If this continues to happen in a “frictionless” way after Brexit, the disturbances to the status quo in Ireland will be limited. If it doesn’t, hang on to your hats. Frictionless trade is the only condition under which Brexit can happen without inflicting a hard border on Ireland. It is almost certainly a political impossibility if the UK leaves the customs union. But even if it could somehow be agreed in principle, there is another enormous obstacle: the actual capacity of the British to handle it. On Friday, after Theresa May’s big set-piece speech on Brexit, the DUP leader Arlene Foster issued a glowing endorsement. She referred back to a paper issued by the UK government last August: “Those proposals can ensure there is no hard border between Northern Ireland and the Republic of Ireland after we exit the EU.”

Foster recognises how much unionism is staking on that document and on the ability of the UK’s bureaucracies to deploy technology to take the sting out of the potentially toxic irritant of the Irish Border. This forces us to consider something that would previously have been of little interest to Irish people: the recent and dismal history of the UK’s adventures in using digital technology to control its borders. In 2003, the British established a spanking new “e-borders” system which was meant to collect and analyse advance passenger information for people travelling into the UK. It had a generous timescale – the full programme was meant to be in place by 2011. In 2010, the Home Office admitted that e-borders was so useless it had to be abandoned. By then, it had spent £340 million (€380 million) on the programme.

The cancellation of the contract led to a legal settlement for another £150 million. The Home Office then spent another £303 million on a new programme, bringing expenditure to £830 million. In 2015, the National Audit Office reported that all of this expenditure “has failed, so far, to deliver the full vision” of what was supposed to be achieved. The current date for completion of the programme is 2019. The whole thing will have taken a mere 16 years. On the same timescale, the new post-Brexit systems on which the future of Ireland may hinge would be delivered in 2035. In 2015, 55 million UK customs declarations were made by 141,000 traders. Once Brexit happens, that will increase fivefold to 255 million. Leaving aside all the issues of political principle, this is the vast logistical challenge that will have to be dealt with if May and Foster are to get the Brexit they want.

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The numbers are interesting, the political stance not so much.

Canada’s Looming Economic Meltdown (GT)

Canada’s Fourth Quarter economic growth was 1.7% following positive signs of growth earlier in the year. This growth, however modest, is attributable to easy credit and the increased consumer spending. At this time, Canadian households are facing one the largest indebtedness when compared to most other countries. For every $1.00 of income, consumers owe $1.68. This is the highest income to debt ratio in the world. For low-income Canadian households, the $1.00 disposable income to $3.33 debt ratio is even worst. Canada, along with other nations, especially emerging markets are carrying records levels of consumer debts, may be facing a serious crash as further growth becomes unsustainable.

Canada combined deficit rose to $18.1 billion in 2016, from $12.9 billion in the previous year. Higher debts and increased spending are causing serious concerns that the Canadian economy is on an unsustainable economic path. A considerable portion of Canada’s future economic growth has been predicated on strengthening and improving the country’s infrastructure. However, Prime Minister Trudeau’s policies are destined to strangle potential economic growth by shifting C$7.2 billion allocated to infrastructure improvements to government programs such as gender equality hiring opportunities. According to the Conference Board of Canada’s Craig Alexander: “This isn’t a budget that’s about growth, as much as it’s about equality and breaking down barriers to opportunity.”

Canada appears to be stunting its own economic growth as a matter of policy. Three major infrastructure projects, The Northern Gateway pipeline ($7.9 billion), the Pacific Northwest LNG project ($36 billion), and possibly the Energy East pipeline ($15.7 billion) would have been instrumental in guaranteeing economic growth for decades to come. However, these have been stymied in favor of Trudeau’s economic egalitarian vision. As a result, investors have been abandoning certain projects. The last time Canada’s saw such heavy-handed government interference in its economy was during the presidency of Trudeau’s father, Pierre Trudeau.

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This could hurt.

Coinbase Accused of Cheating Consumers in More Ways Than One (BBG)

Coinbase was slapped with a pair of lawsuits by disgruntled consumers, one alleging insider trading by employees at the giant digital currency exchange and the other accusing the company of failing to deliver cryptocurrencies to people who didn’t have accounts. The class-action suits come as Coinbase and other crypto startups are beefing up their staffs with regulatory experts to legitimize themselves as they prepare for government authorities to impose stricter rules. The first of the complaints filed in San Francisco federal court centers on Coinbase’s announcement in December that it would enable purchases of the bitcoin spinoff known as Bitcoin Cash. The customer who sued alleges that employees were tipped off a month in advance, allowing them to instantly swamp Coinbase with buy and sell orders and leaving other traders at a great disadvantage.

Coinbase CEO Brian Armstrong said at the time that the company would investigate an increase in the price of bitcoin cash in the hours before its Dec. 19 announcement and that any employee or contractor found to have violated internal policies would be terminated. “To date, neither Armstrong nor the company has disclosed the result of its purported investigation,” according to the March 1 lawsuit. In the other suit, two men claim that they were unable to redeem bitcoin that had been transferred to them through Coinbase via their email addresses in 2013. They allege that when they got reminder notices in February, they tried to recover the bitcoin only to discover that the links provided by Coinbase were broken. They accused the company of keeping their funds and say they want to represent “thousands” of other people in the same position.

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As long as the press continue to ignore this, who cares really?

US, UK Support World’s Worst Humanitarian Disaster In 50 Years (CP)

“The situation in Yemen – today, right now, to the population of the country,” UN humanitarian chief Mark Lowcock told Al Jazeera last month, “looks like the apocalypse.” 150,000 people are thought to have starved to death in Yemen last year, with one child dying of starvation or preventable diseases every ten minutes, and another falling into extreme malnutrition every two minutes. The country is undergoing the world’s biggest cholera epidemic since records began with over one million now having contracted the disease, and new a diptheria epidemic “is going to spread like wildfire” according to Lowcock. “Unless the situation changes,” he concluded, “we’re going to have the world’s worst humanitarian disaster for 50 years”.

The cause is well known: the Saudi-led coalition’s bombardment and blockade of the country, with the full support of the US and UK, has destroyed over 50% of the country’s healthcare infrastructure, targeted water desalination plants, decimated transport routes and choked off essential imports, whilst the government all this is supposed to reinstall has blocked salaries of public sector workers across the majority of the country, leaving rubbish to go uncollected and sewage facilities to fall apart, and creating a public health crisis. A further eight million were cut off from clean water when the Saudi-led coalition blocked all fuel imports last November, forcing pumping stations to close.

[..] As of late January, fuel imports through the country’s main port Hodeidah were still being blocked, with cholera cases continuing to climb as a result. And on 23rd January, the UN reported that there are now 22.2 million Yemenis in need of humanitarian assistance – 3.4 million more than the previous year – with eight million on the brink of famine, an increase of one million since 2017.

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America’s fast becoming a cartoon nation.

Light It Up (Jim Kunstler)

It must be hard on The New York Times editors to set their hair on fire day after day in their effort to start World War Three. Today’s lead story, Russian Threat on Two Fronts Meets Strategic Void in the U.S., aims to keep ramping up twin hysterias over a new missile gap and fear of Russian “meddling” in the 2018 midterm elections. The Times’s world-view begins to look like the script of a Batman sequel with Vlad Putin cast in The Joker role of the cackling psychopath who must be stopped at all costs! America’s generals have switched on the Batman signal beacon, but Donald Trump in the role of the Caped Crusader, merely dithers and broods in the splendid isolation of his 1600 Penn Avenue Bat Cave, suffering yet another of his endless bipolar identity crises.

For God’s sake, The Times, shrieks, do something! The Russians are coming! (Gotham City’s Chief of Police Hillary said exactly that last week in a Tweet!) I think they misunderstood Mr. Putin’s recent message when he announced a new hypersonic missile technology that would, supposedly, cut through any imaginable US missile defense. The actual message, for the non mental defectives left in this drooling idiocracy of a republic, was as follows: Nuclear war remains unthinkable, so kindly stop thinking about it. Mr. Putin’s other strategic position is also misrepresented — actually, not even acknowledged — in Monday’s NYT propaganda blast, namely, to discourage the USA’s decades-long policy of regime change here, there, and everywhere on the planet, creating a debris trail of one failed state after another.

As a true-blue American, I must say these are two admirable propositions. Is it fatuous to add that atomic war is unlikely to benefit anyone? Or that the world has had enough of US military “meddling” in foreign lands? Of course the shopworn trope of Russian “meddling” in the 2016 election still occupies the center ring of the American political circus. Today’s Times story includes another clumsy attempt to set up expectations that the 2018 midterm elections will be hacked by Russia, in order to keep the hysteria at code-red level. As usual, the proposition assumes that the alleged 2016 hacking is both proven and significant when, going on two years, there is no evidence of hacking besides the obviously amateurish Facebook troll farm.

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Sickening to watch.

The Ocean Currents Brought Us In A Lovely Gift Today (G.)

A British diver has captured shocking images of himself swimming through a sea of plastic rubbish off the coast of the Indonesian tourist resort of Bali. A short video posted by diver Rich Horner on his social media account and on YouTube shows the water densely strewn with plastic waste and yellowing food wrappers, the occasional tropical fish darting through the deluge. The footage was shot at a dive site called Manta Point, a cleaning station for the large rays on the island of Nusa Penida, about 20km from the popular Indonesian holiday island of Bali. In a Facebook post on 3 March Horner writes how the ocean currents had carried in a “lovely gift” of jellyfish and plankton, and also mounds and mounds of plastic.

“Plastic bags, plastic bottles, plastic cups, plastic sheets, plastic buckets, plastic sachets, plastic straws, plastic baskets, plastic bags, more plastic bags, plastic, plastic,” he says, “So much plastic!” The video shows Horner swimming through the mess for several minutes and also how the waste coagulated on the surface, mixing in with some organic matter to form a slick of floating rubbish. Manta Point is regularly frequented by numerous manta rays that visit the site to get cleaned of parasites by smaller fish, but the video shows just one lone manta in the background. “Surprise, surprise, there weren’t many mantas there at the cleaning station today…” notes Horner, “They mostly decided not to bother.”

Several weeks ago thousands across Bali took part in a mass clean up, in attempt to rid the island’s beaches, rivers and jungles of waste, and raise awareness about the harmful impacts of trash. Rich Horner said that while divers regularly see “a few clouds of plastic” in the rainy season, the slick he identified is the worst yet. Divers returned to the site the next day, he reports, by which time the slick had already moved on, “continuing on its journey, off into the Indian Ocean..”

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