Brexit Archives - Page 4 of 57 - The Automatic Earth

The White House said on Tuesday it would refuse to cooperate with an “illegitimate, unconstitutional” congressional impeachment inquiry, setting Republican President Donald Trump on a collision course with the Democratic-led U.S. House of Representatives. Hours after the administration abruptly blocked a key witness in the Ukraine scandal from testifying to congressional panels, White House lawyer Pat Cipollone criticized the decision by lawmakers to proceed with an impeachment inquiry without a full House vote. “You have designed and implemented your inquiry in a manner that violates fundamental fairness and constitutionally mandated due process,” he said, adding House Democrats had left Trump “no choice.”

“To fulfill his duties to the American people, the Constitution, the Executive Branch and all future occupants of the Office of the Presidency, President Trump and his administration cannot participate in your partisan and unconstitutional inquiry under these circumstances,” he said. [..] White House lawyer Cipollone described the probe as “a naked political strategy” that violated Trump’s due process rights and was designed to reverse the 2016 presidential election and influence the November 2020 election. “Your transparent rush to judgment, lack of democratically accountable authorization, and violation of basic rights in the current proceedings make clear the illegitimate, partisan purpose” of the inquiry, he said.

Brilliant both from Michael Every of Rabobank and the South Park crew.

“Like the NBA, we welcome the Chinese censors into our homes and into our hearts. We too love money more than freedom and democracy.”

• Oh My God, They Killed CNY! You Bastards (Every)

”The upcoming ‘Top Gun 2’ stars Tom Cruise, still trying to look like he did in the 1980s, but no longer able to do all his own stunts: which is just like US foreign policy “ [..] the most honest commentary on where we now stand under globalisation comes not from the eschatological of intellectuals or politicians telling us democracy is under threat and free trade is great, not spotting Marxist and populist criticism that the two are linked; instead it comes from the scatology of ‘South Park’.[..] the most honest commentary on where we now stand under globalisation comes not from the eschatological of intellectuals or politicians telling us democracy is under threat and free trade is great, not spotting Marxist and populist criticism that the two are linked; instead it comes from the scatology of ‘South Park’

So is the US flailing or retreating like the Romans? No. It is focusing on its mighty financial weapons and physically fighting where it can achieve what matters most…if one is not thinking about Iran, but China. As Trump underlined: “WE WILL FIGHT WHERE IT IS TO OUR BENEFIT, AND ONLY FIGHT TO WIN.” Where does it benefit most fighting, globally? Three guesses… The greatest likelihood is still that if Trump gets past his latest tipping point then at some (tipping) point soon markets are going to cry “Oh my God, they killed CNY!” as the Chinese currency collapses.

As Big As Japan.

• Powell Says The Fed Will Start Expanding Its Balance Sheet ‘Soon’ (CNBC)

The Federal Reserve will soon start growing its balance sheet again, a response in part to the jolt to overnight lending markets in September, Chairman Jerome Powell said Tuesday. How the Fed will go about expanding the securities it holds will be explained in the coming days, though Treasury bill purchases will be involved, the central bank chief said during a speech in Denver, though Powell stressed the approach shouldn’t be confused with the quantitative easing done during and after the financial crisis. “This is not QE. In no sense is this QE,” he said in a question and answer session after the speech.

On monetary policy more broadly, Powell stuck to his recent script: He and his fellow policymakers view the economy as being strong but susceptible to shocks, particularly from a global slowdown, trade and geopolitics like a potentially messy Brexit. He said the Fed stands committed to supporting the recovery but is data dependent and not on a preset course of cutting rates. The Fed has reduced its benchmark rate twice in 2019 and is expected to approve a third cut late this month.

The EU likes this.

• Boris Johnson Facing No-Deal Brexit Cabinet Rebellion (R.)

British Prime Minister Boris Johnson is facing a new rebellion from his cabinet over concerns of a no-deal Brexit, with a group of cabinet ministers poised to resign, The Times newspaper reported on Wednesday. Culture Secretary Nicky Morgan, British Minister for Northern Ireland Julian Smith, Justice Secretary Robert Buckland, Health Minister Matt Hancock and Attorney General Geoffrey Cox are all on a “resignation watch list”, according to The Times report An unnamed cabinet minister cited by the newspaper said that a “very large number” of Conservative members of parliament will quit if it comes to a no-deal Brexit.

The Times said that ministers had warned Johnson in a cabinet meeting about the “grave” risk of the return of direct rule in Northern Ireland and raised concerns about Dominic Cummings, Johnson’s most senior adviser. “Cabinet will set the strategy, not unelected officials. If this is an attempt to do that then it will fail”, the report quoted another cabinet minister as saying. The report comes as the European Union accused Britain of playing a “stupid blame game” over Brexit after a Downing Street source told Reuters a deal was essentially impossible because German Chancellor Angela Merkel had made unacceptable demands.

“What’s at stake is not winning some stupid blame game,” Tusk wrote in a tweet directed at the prime minister.”

• EU May Offer To Extend Deadline For Brexit Deal To June (G.)

The European Union is poised to extend Brexit talks into as late as next summer after the European council and commission presidents dismissed Boris Johnson’s strategy as a “blame game”. A “range of dates” will now be in play at the meeting of European leaders next week but sources suggested the natural cut-off date would be June. With an extension of the UK’s EU membership now looking inevitable, other diplomatic sources suggested an unlikely outlier for an end date could even be ahead of a possible general election so as to force the Commons into accepting a deal. “But politicians like to keep things off their plates for as long as possible and so pushing it longer seems more realistic,” a senior EU diplomat said.

The negotiations over a deal are said to be effectively dead in Brussels after Downing Street’s extraordinary claims over the substance of a phone call between the German chancellor, Angela Merkel, and the UK prime minister. Merkel was said by an unnamed UK source to have told Johnson that Northern Ireland had to stay in the EU’s customs union. The official claimed that as a consequence a deal looked “essentially impossible, not just now but ever”. Tusk, the European council president, gave an insight into the frustration at the anonymous briefings over the Merkel call, the alleged content of which described by senior politicians in Berlin as “improbable”. The chancellor’s spokesman declined to comment on “confidential conversations”.

“What’s at stake is not winning some stupid blame game,” Tusk wrote in a tweet directed at the prime minister. “At stake is the future of Europe and the UK as well as the security and interests of our people. You don’t want a deal, you don’t want an extension, you don’t want to revoke. Quo vadis? [Where are you going?]” [..] In Berlin Detlef Seif, the point person on Brexit for Merkel’s party, the CDU, rejected the account given by Downing Street of the call between the two leaders. He said: “In my mind it is completely improbable that the phone call between Merkel and Johnson took place in the way it has been reported in the British media. “It would run counter to all the principles the German government has followed for the last three years, namely that the negotiations are led by the European commission.

“It brings to light, in stunning clarity, Brexiters’ deluded political understanding of the UK’s place in the world.”

“..without it we will remain stuck in the delusional, revivalist politics of a banana monarchy.”

• Brexit Is A Necessary Crisis, Reveals Britain’s True Place In The World (G.)

Today much of the capital in Britain is not British and not linked to the Conservative party – where for most of the 20th century things looked very different. Once, great capitalists with national, imperial and global interests sat in the Commons and the Lords as Liberals or Conservatives. Between the wars, the Conservatives emerged as the one party of capital, led by great British manufacturers such as Stanley Baldwin and Neville Chamberlain. The Commons and the Lords were soon fuller than ever of Tory businessmen, from the owner of Meccano toys to that of Lyons Corner Houses.

After the second world war, such captains of industry avoided the Commons, but the Conservative party was without question the party of capital and property, one which stood against the party of organised labour. Furthermore, the Tories represented an increasingly national capitalism, protected by import controls, and closely tied to an interventionist and technocratic state that wanted to increase exports of British designed and made goods. A company like Imperial Chemical Industries (ICI) saw itself, and indeed was, a national champion. British industry, public and private, was a national enterprise.

Since the 1970s things have changed radically. Today there is no such thing as British national capitalism. London is a place where world capitalism does business – no longer one where British capitalism does the world’s business. Everywhere in the UK there are foreign-owned enterprises, many of them nationalised industries, building nuclear reactors and running train services from overseas. When the car industry speaks, it is not as British industry but as foreign enterprise in the UK. The same is true of many of the major manufacturing sectors – from civil aircraft to electrical engineering – and of infrastructure. Whatever the interests of foreign capital, they are not expressed through a national political party. Most of these foreign-owned businesses, not surprisingly, are hostile to Brexit.

[..] Brexit is a necessary crisis, and has provided a long overdue audit of British realities. It exposes the nature of the economy, the new relations of capitalism to politics and the weakness of the state. It brings to light, in stunning clarity, Brexiters’ deluded political understanding of the UK’s place in the world. From a new understanding, a new politics of national improvement might come; without it we will remain stuck in the delusional, revivalist politics of a banana monarchy.

High time. But is asking questions about CrowdStrike impeachable?

• Time To Reassess CrowdStrike’s Credibility (Kelly)

Days before the Senate voted to confirm Brett Kavanaugh last year, a former FBI assistant director appeared on MSNBC to suggest the Supreme Court nominee had a major credibility problem. “This is not…an investigation about the sexual allegations, I think it really has moved toward credibility,” Shawn Henry, an NBC News analyst, told Nicolle Wallace on October 1, 2018. “At this point now, there are very clear allegations, and subsequent to the judge’s testimony, people have come out who appear to be credible who…appear to be contradicting his testimony sworn before the United States Senate.” Henry, clearly reciting Democratic talking points to imply Kavanaugh perjured himself before the Senate Judiciary Committee during his September showdown with Christine Blasey Ford, also referred to Ford as a “victim” and claimed that the FBI’s investigation into Kavanaugh’s testimony had “fallen short.”

Henry was presented to viewers as the channel’s “national security analyst,” but there was one title the network overlooked: Shawn Henry is a top executive for CrowdStrike, the cybersecurity firm hired by the Democratic National Committee to investigate the infamous hack of its email system in early 2016. Perhaps not coincidentally, the firm determined that the Russians were behind the intrusion. CrowdStrike’s June 2016 assessment remains the sole source of evidence to supply the pretext of the government’s Russian election interference claim; later, it would help bolster the Trump-Russia collusion fable. [..] Henry, the president of CrowdStrike’s Washington operation, is a regular contributor to both MSNBC and NBC News programs. (His affiliation with CrowdStrike, however, is never mentioned.)

Although he hasn’t worked for the FBI since 2012, Henry often weighs in as an FBI “expert,” opining on a variety of political issues from government shutdowns to the Kavanaugh debacle. Curiously, his views always come down on the side opposite of Donald Trump and the Republican Party. In March 2017, Henry—who worked for Robert Mueller’s FBI during Barack Obama’s first term—participated in a post-inauguration forum to discuss the implications of Russia’s “hacking” the 2016 presidential election. The panel also featured former Hillary Clinton campaign manager John Podesta and Marc Elias, the general partner at Perkins Coie, a politically-influential law firm based in D.C.. It was a symbolic trio. Perkins Coie hired CrowdStrike in the spring of 2016 on behalf of the DNC.

Instead of going directly to the FBI or other law enforcement agency about the breach, Democratic party leaders, working through Perkins Coie, retained CrowdStrike to find the culprits. Very cozy. But that wasn’t Perkins Coie’s only involvement in the Russia-hacked-the-election plotline. The law firm also hired Fusion GPS—who in turn hired British political operative Christopher Steele to author his infamous dossier—on behalf of the Clinton campaign and the DNC around the same time Perkins retained CrowdStrike. According to disclosure reports, the DNC paid Perkins Coie $7.2 million during the 2016 election cycle: The PAC also paid CrowdStrike more than $400,000 during the same time period. (The DNC has paid CrowdStrike nearly $80,000 so far this year.)

#I’mWithHer.

• Jeffrey Epstein Accuser Expands Lawsuit Against Estate, Alleged Enablers (R.)

A New York woman who said Jeffrey Epstein began grooming her for sex when she was 14 and later raped her expanded her lawsuit against his estate, naming several women who allegedly enabled the financier’s abuses and seeking to block the estate from shielding his assets from victims. In her amended complaint filed on Tuesday, Jennifer Araoz accused four women by name who once worked with Epstein of misconduct, and added more than 20 corporate defendants associated with the late financier. Araoz, 32, wants “justice not just against Mr. Epstein’s estate, but the network of enablers that surrounded him, and the network of corporate interests that surrounded him,” her lawyer Daniel Kaiser told reporters on a conference call.

“Every penny of his estate should be available to satisfy the claims of victims,” he added. Epstein, 66, died by hanging himself in his Manhattan jail cell on Aug. 10, two days after signing a will and putting his estimated $577 million estate into a trust. Kaiser said it would be obvious to any judge that this was a fraudulent effort to keep his money away from victims. The four women include Ghislaine Maxwell, Epstein’s longtime confidante; Lesley Groff, a former secretary; Cimberly Espinosa, a former executive assistant; and Rosalyn Fontanilla, a former maid who died in October 2016. All but Fontanilla are named as defendants.

Araoz accused the defendants of conspiring to identify and procure a steady stream of underage girls for Epstein to sexually abuse. The defendants “participated with and assisted Epstein in maintaining and protecting his sex trafficking ring, ensuring that approximately three girls a day were made available to him for his sexual pleasure,” the amended complaint said.

It’s already started.

• Refugee Explosion “Greater” Than 2015 To Hit Europe – German Minister (ZH)

The German government is warning that a number of indicators suggest Europe could be on the brink of witnessing a new refugee crisis explode on its borders. Germany’s Interior Minister Horst Seehofer said early this week that refugees and migrants are set to flood Europe on a scale even bigger that the peak of the 2015 crisis. “We must do more to help our European partners with controls on the EU external borders. We have left them alone for too long,” he told Germany’s Bild am Sonntag newspaper after returning from a visit to Greece and Turkey, where he inspected the renewed refugee crisis first hand. “If we do not do that we will once again face a refugee wave like in 2015 or maybe even greater,” Seehofer warned ominously.

Seehofer further said that if the EU doesn’t unite to find “strength to solve this problem problem” it faces total “loss of control” if and when the next major crisis hits. At the height of the crisis three years ago, which was driven by the vastly destabilizing wars in Syria and Libya, and by the turmoil left in the wake of the Islamic State caliphate in western Iraq, there were near weekly mass drownings and accidents involving migrants attempting to traverse the Mediterranean, as well as fires and unrest at makeshift refugee camps in France and Greece. It further created turmoil in the domestic politics of multiple EU countries, with a number of right-wing populist figures and parties coming to power on anti-illegal immigration platforms.

And now, with Turkey on the brink of a major military incursion into northeast Syria, the Middle East is about to witness a major new conflagration resulting in potentially millions of new refugees being pushed out of the Turkey-Syria border region. Coupled with that, Turkey’s President Erdogan recently threatened to release one million refugees on Europe if he can’t have his so-called ‘safe zone’ which is to reach some 30km deep (19 miles) inside Syrian territory. He threatened early last month: “We will be forced to open the gates. We cannot be forced to handle the burden alone,” while demanding that European countries give political support to the controversial plan that would end in annexing UN member Syria’s sovereign territory.

Debt Rattle October 5 2019

Oct 052019

October 5, 2019 Posted by Raúl Ilargi Meijer at 9:49 am Finance Tagged with: Boeing, Brexit, crypto, Greece, Hong Kong, Libra, Pelosi, Pence, refugees, Rosenstein, subpoena, Trump, Ukraine 16 Responses »

Pablo Picasso Head of a bearded man 1940

• Democrats Subpoena White House For Ukraine Documents (ZH)

• 2nd Whistleblower May File Complaint About Trump/Ukraine: New York Times (RawS)

• House Democrats Target Pence Over Ukraine; Peddle Fiction Over ‘Favor’ (ZH)

• Newly Released Rosenstein Emails Reveal Crusade To Investigate Trump (ZH)

• Do You Have a Lisance for that Minky? (Kunstler)

• Boris Johnson Brexit Plan Hangs By Thread As EU Dismisses Weekend Talks (G.)

• China Has No Room for Dissenting Friends (FP)

• PayPal Becomes First Member To Exit Facebook’s Libra Association (R.)

• Regulators Weigh ‘Startle Factors’ For Boeing 737 MAX Pilot Training (R.)

• Boeing Crash Victims’ Lawyer To Seek Testimony From 737 MAX Whistleblower (R.)

• Greece Needs To Face Reality About Asylum Seekers (HRW)

• Air Pollution And Human Health Impacts Of Cryptocurrency Mining (SD)

This is not how US election campaigns used to look.

• Democrats Subpoena White House For Ukraine Documents (ZH)

Just one day after President Trump dared House Speaker Nancy Pelosi to hold an impeachment inquiry vote – a move which would open Democrats up to Republican subpoenas, House Democrats slapped the White House with a subpoena first. Addressed to acting White House Chief of Staff Mick Mulvaney, the subpoena demands documents and communications related to the case being constructed against Trump – namely that his request that Ukraine investigate former Vice President Joe Biden and his son for corruption constitutes election interference and endangered national security. Of note, the Justice Department concluded that Trump’s phone call with Zelensky did not violate campaign finance law.

“How the White House, which has routinely rejected congressional requests for information, responds to the demands for documents could significantly shape the impeachment investigation going forward. Under normal circumstances, the White House could claim materials referred to in both requests were privileged, using that as a defense in court.” -New York Times. What Democrats aren’t pursuing, by the by, is anything resembling due diligence on Biden – the (still) leading Democratic candidate trying to fend off accusations of nepotism in Ukraine and China while abusing his office as Vice President. As we noted earlier Friday, Vice President Mike Pence was hit with a subpoena as well over, demanding information on “any role you may have played” in helping with the Ukraine effort against Biden.

Pence press secretary Katie Waldman said “given the scope, it does not appear to be a serious request but just another attempt by the ‘Do Nothing Democrats’ to call attention to their partisan impeachment.” Pelosi and House Intelligence Committee Chairman Adam Schiff (D-CA) have warned that failure to comply with subpoenas will be viewed as obstruction of Congress – which the Times says is “itself a potentially impeachable offense.” “The White House has refused to engage with — or even respond to — multiple requests for documents from our Committees on a voluntary basis,” reads the subpoena, demanding information by October 15. “After nearly a month of stonewalling, it appears clear that the president has chosen the path of defiance, obstruction, and cover-up.”

Also CIA.

• 2nd Whistleblower May File Complaint About Trump/Ukraine: New York Times (RawS)

President Donald Trump’s impeachment inquiry continues to grow, according to a bombshell new report in The New York Times. “A second intelligence official who was alarmed by President Trump’s dealings with Ukraine is weighing whether to file his own formal whistle-blower complaint and testify to Congress,” The Times reported, citing two people briefed on the matter. “The official has more direct information about the events than the first whistle-blower, whose complaint that Mr. Trump was using his power to get Ukraine to investigate his political rivals touched off an impeachment inquiry,” the newspaper explained. “The second official is among those interviewed by the intelligence community inspector general to corroborate the allegations of the original whistle-blower, one of the people said.”

“A new complaint, particularly from someone closer to the events, would potentially add further credibility to the account of the first whistle-blower, a C.I.A. officer who was detailed to the National Security Council at one point,” the newspaper noted. “Whistle-blowers have created a new threat for Mr. Trump. Though the White House has stonewalled Democrats in Congress investigating allegations raised in the special counsel’s report that Mr. Trump obstructed justice, the president has little similar ability to stymie whistle-blowers from speaking to Congress.”

If both Trump and Pence are impeached, Nancy Pelosi is next in line to become president.

But the Dems won’t get any documents until they hold a House vote.

• House Democrats Target Pence Over Ukraine; Peddle Fiction Over ‘Favor’ (ZH)

House Democrats on Friday roped Vice President Mike Pence into their investigation into whether President Trump “jeopardized national security” by asking Ukraine to investigate what looks like obvious corruption by former Vice President Joe Biden and his son Hunter. In a letter from Democratic House Committee Chairs Eliot Engel (NY), Adam Schiff (CA) and Elijah Cummings (MD), Pence is given a deadline of October 15 to turn over all documents related to President Trump’s April 21 and July 25 phone calls with Ukrainian President Volodymyr Zelensky. The letter also requests all communications between administration officials regarding the calls, as well as information concerning Trump attorney Rudy Giuliani’s efforts to investigate or pressure Ukraine to investigate the Bidens.

Of note, the letter danced around a popular lie about the call between Trump and Zelensky: According to the record, President Trump stated, “I would like you to do us a favor though.” He also stated, “I would like to have the Attorney General call you or your people and I would like you to get to the bottom of it.” The letter then jumps to a transcript of the July 25 phone call in which Trump said: “There’s a lot of talk about Biden’s son, that Biden stopped the prosecution and a lot of people want to find out about that so whatever you can do with the Attorney General would be great.” Meanwhile, House Democrats purposely conflate Trump’s “favor” – which was actually for the investigation of the DNC servers involving their contractor Crowdstrile – and the Biden investigation.

If Pence refuses to comply, the chairmen say it “shall constitute evidence of obstruction” in their impeachment inquiry. For those keeping track – Rep. Schiff lied when he said his office had no contact with the whistleblower (which earned him ‘four Pinocchios’ from the Washington Post). Schiff also fabricated a quote from the Trump-Zelensky call which he read during an official hearing. And now, he and two other House Democratic chairs are doing their best narrative shaping by misrepresenting more facts.

Not looking good.

• Newly Released Rosenstein Emails Reveal Crusade To Investigate Trump (ZH)

New emails obtained through a Freedom of Information Act (FOIA) lawsuit reveal the details surrounding communications between Deputy Attorney General Rod Rosenstein and Robert Mueller in the days leading up to the former FBI Director’s appointment as special counsel in the Russia probe. Mueller would go on to assemble a team comprising “13 Angry Democrats” as Trump called them, due to their obvious animus towards the president. According to the 145 pages of documents obtained by Judicial Watch, Rosenstein and Mueller were discussing just three days after President Trump fired former FBI Director James Comey, and ostenisbly for some time before that.

“The boss and his staff do not know about our discussions,” Rosenstein wrote Mueller on May 12, 2017 as the two tried to nail down a time for their next conversation. Four days later on May 16- the day before Mueller’s appointment, Rosenstein told former Bush administration Deputy Attorney General and current Kirkland & Ellis Partne, Mark Filip “I am with Mueller. He shares my views. Duty Calls. Sometimes the moment chooses us.” “And on May 17 Rosenstein appointed former FBI Director Robert Mueller to investigate Russian meddling in the 2016 presidential election. Also, during the same time period, between May 8 and May 17, Rosenstein met with then-acting FBI Director Andrew McCabe and other senior Justice Department FBI officials to discuss wearing a wire and invoking the 25th Amendment to remove President Trump.” -Judicial Watch

“..that claque of lesser monsters who cooked up the coup to overthrow the president, and botched the job.”

• Do You Have a Lisance for that Minky? (Kunstler)

[..] what if it turns out that there actually is no Whistleblower, that the figure was just a fiction, a CGI figment cooked up by Adam Schiff, his lawyers, and sundry other players on the Deep State bench? Sounds outlandish perhaps, but I wouldn’t put it past the congressman from Hollywood. We’ll find out soon enough. Meanwhile, it appears that the purported Whistleblower and his chief handler, Intelligence Community Inspector General (ICIG) Michael Atkinson failed to observe the proper procedures in reporting the complaint through channels, not to mention the legerdemain of sketchy paperwork that attested to the complaint.

Remember who Michael Atkinson is: the former legal counsel to John P. Carlin, who was Assistant Attorney General for National Security during the origin months of the RussiaGate operation in the summer of 2016, and before that chief of staff to… wait for it… Robert Mueller, when he was FBI Director. Do you begin to detect a claque of senior bureaucrats scrambling to cover each other’s ass? Interesting days ahead as this feculent blob of malfeasance creepy-crawls through the spooky weeks of October, climaxing in Halloween. These are the weeks when the DOJ Inspector General’s report on FISA court shenanigans comes down. It’s also the month of the Brexit Absolute Deadline.

That hairball over in Old Blighty might seem of unconcern over here, but it contains enough explosive power to destabilize the European banking system and, with it, America’s, which would lead to some rather scary action in the bond and equity markets at exactly the time of year when accidents like that happen. And then, deeper in the background, like Hades and Thanatos, stand the grave figures of Barr and Durham, whose very silence lo these many months must be giving the vapors to that claque of lesser monsters who cooked up the coup to overthrow the president, and botched the job.

“..no basis for such discussions, given the British prime minister’s insistence on there being a customs border on the island of Ireland.”

• Boris Johnson Brexit Plan Hangs By Thread As EU Dismisses Weekend Talks (G.)

Boris Johnson’s Brexit plans look to be falling apart as the European commission said there are no grounds to accept a request from the UK for intensive weekend negotiations two weeks before an EU summit. EU sources said there was no basis for such discussions, given the British prime minister’s insistence on there being a customs border on the island of Ireland. Johnson’s chief negotiator, David Frost, along with a team of a dozen British officials, failed to convince their EU counterparts in Brussels on Friday that he had a mandate from Downing Street to compromise on what the EU sees as major flaws in the UK government’s proposals. Frost had been seeking to rescue the British prime minister’s proposed deal after it was strongly criticised.

The EU’s chief negotiator, Michel Barnier, had told diplomats on Thursday evening that the British needed to “fundamentally amend their position”. A European commission spokeswoman said: “We have completed discussions with the UK for today. We gave our initial reaction to the UK’s proposals and asked many questions on the legal text. “We will meet again on Monday to give the UK another opportunity to present its proposals in detail.” The spokeswoman added that the proposals did not “provide a basis for concluding an agreement”. An EU official said: “The UK often asks for meetings to keep [the] process going; we agree we should leave no stone unturned. But there is nothing useful that could be done this weekend.”

Muslim silence on Uighurs.

• China Has No Room for Dissenting Friends (FP)

In July this year, 22 Western-aligned countries issued a joint statement to the high commissioner of the United Nations’ Human Rights Council objecting to China’s abuses against the Uighur Muslim minority in Xinjiang province. That’s not unusual: The reports of human rights abuses in the province are coming out thick and fast, and Western countries are more than happy to raise concerns against such abuses, whether out of genuine concern, domestic virtue signaling by political leaders, or the use of any available stick to whack a geopolitical rival.

What was remarkable was the 37 countries issuing a counter letter praising China’s human rights record, from humanitarian luminaries including such as Syria, Myanmar, and North Korea. More interestingly, about half of the signatories of this letter were Muslim-majority countries. If the issues had been about Palestinians or even the Rohingya, one might expect the usual cynical domestic virtue signaling by political leaders around the well-worn claims of Muslim solidarity. Instead, they chose to loudly broadcast their support for Beijing’s policy of eradicating the old Islamic culture of the ancient Silk Road gateway to the Chinese heartland in Xinjiang.

The calculation of such leaders, from Turkish President Recep Tayyip Erdogan to Mohammed bin Salman, the de facto head of government of Saudi Arabia, the custodian of the Two Holy Mosques, is well understood and publicized: “Muslim solidarity” is a convenient and effective slogan to be thrown at domestic audiences, but if your national economy—and the personal profits of the elite—depends on the goodwill of Beijing, then you must defer to China’s supposedly sovereign right to do as it pleases within its borders, and forget about the umma.

Won’t be the last.

• PayPal Becomes First Member To Exit Facebook’s Libra Association (R.)

U.S. payments processor PayPal said on Friday it was leaving Libra Association, the entity managing the Facebook-led effort to build global digital currency Libra, making it the first member to exit the group. PayPal said it would forgo any further participation in the group and would instead focus on its own core businesses. “We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future,” PayPal said in a statement. In response, Geneva-based Libra Association said it was aware of the challenges lying ahead in its attempts to “reconfigure” the financial system.

“The type of change that will reconfigure the financial system to be tilted towards people, not the institutions serving them, will be hard. Commitment to that mission is more important to us than anything else. We’re better off knowing about this lack of commitment now, rather than later”, Libra Association said in a statement. Facebook declined to comment.

Now it’s ‘pilot overload’. And software of course. But the pilots were not overloaded, the hardware didn’t work.

• Regulators Weigh ‘Startle Factors’ For Boeing 737 MAX Pilot Training (R.)

Global regulators are looking at “startle factors” that can overwhelm pilots as they consider revised protocols for the Boeing 737 MAX, Nicholas Robinson, the head of civil aviation for Transport Canada, told Reuters on Friday. Boeing Co’s fastest-selling jetliner, the 737 MAX, was grounded worldwide in March after two fatal crashes that killed a total of 346 people within five months. Pilot overload appears to have played a role in both crashes, in which crews struggled to regain control of the airplane while a new flight control system repeatedly pushed the nose down amid a series of other audio and sensory alarms and alerts. “What we need to do is ensure that the aircrew in the MAX are able to handle that environment,” Robinson said in an interview with Reuters.

Transport Canada is among a core group of regulators that is evaluating the requirements for the 737 MAX to fly again after a seven-month grounding. It has been convening weekly by phone, video conferences or face-to-face with the U.S. Federal Aviation Administration and its counterparts in the European Union and Brazil, Robinson said. Their decisions could lead to sweeping changes to pilot flight operating manuals and classroom instruction and even mandates for costly simulator training, industry sources have said. However, no training decisions can be made until Boeing submits software updates to the FAA for review and approval, Robinson said.

Transport Canada is closely aligned with the European Union Aviation Safety Agency on return to service demands and has also raised questions over the architecture behind the 737 MAX’s angle of attack system. “We continue to look for a solution proposed by the manufacturer and the FAA on that area,” he said. Still, Canada’s goal is for the MAX to return in countries across the globe simultaneously, or at least in close succession. “It’s not a necessity, but it’s a goal,” Robinson said.

What is it about October and whistleblowers?

• Boeing Crash Victims’ Lawyer To Seek Testimony From 737 MAX Whistleblower (R.)

An attorney representing families of passengers killed in a Boeing Co 737 MAX crash in Ethiopia said on Friday he will seek sworn evidence from a Boeing engineer who claims the company rejected a proposed safety upgrade to the 737 MAX because it was too costly. The engineer, Curtis Ewbank, said the upgrade could have reduced risks that contributed to two fatal crashes in Indonesia and Ethiopia that together killed 346 people, according to two people familiar with the complaint. Ewbank filed the complaint through internal Boeing channels after the March crash of Ethiopian Airlines flight 302, the sources said. The sources described the complaint to Reuters, but Reuters has not seen a copy of the complaint.

Managers rejected the proposed upgrade from Ewbank’s team of engineers, called synthetic airspeed, on the basis of “cost and potential (pilot) training impact,” according to the Seattle Times, which first reported the complaint on Wednesday. Robert Clifford, the lead counsel representing families of victims from the Ethiopian Airlines crash, said in an email the complaint raises fresh concerns about Boeing’s culture and whether the company placed too great an emphasis on cost and schedule at the expense of safety. He said he would take steps to depose Ewbank as quickly as possible.

Things are getting out of hand again. Hundreds of refugees daily, courtesy of Erdogan. A right wing government is not going to help. Still a dumb headline though.

• Greece Needs To Face Reality About Asylum Seekers (HRW)

The Greek islands are under the spotlight again, as a new wave of tragic events has hit asylum seekers trapped there. On 29 September, a big fire broke out in Moria – the notorious camp on the island of Lesbos – killing one woman, and injuring at least nine more people, including a baby, the health ministry reported. On 24 September, a truck killed a five-year-old Afghan boy who was playing just outside Moria. The number of asylum seekers crossing the Aegean from Turkey is also increasing. With camps already overcrowded, conditions are horrific for asylum seekers and migrants trapped there. According to the government’s most recent figures, 26,753 women, men and children live in camps designed for about 6,300. The number has almost doubled since June.

But while the numbers have increased, neither the horrible conditions nor the flawed policies that cause them are new. Underinvestment, a poorly functioning asylum system, and a deliberate policy choice to confine asylum seekers to islands has left thousands trapped there for months or years in inhuman and degrading conditions. Forcing migrants and asylum seekers to remain on the islands was ostensibly to expedite their return to Turkey under the March 2016 EU-Turkey deal. But on 11 September, Gerald Knaus, head of a research organisation whose ideas inspired the EU-Turkey deal, wrote that: “The situation on Greek islands is unacceptable, the asylum system on the verge of collapse. This is a moment of truth.”

Abstract of an academic study published at Science Direct.

• Air Pollution And Human Health Impacts Of Cryptocurrency Mining (SD)

Cryptocurrency mining uses significant amounts of energy as part of the proof-of-work time-stamping scheme to add new blocks to the chain. Expanding upon previously calculated energy use patterns for mining four prominent cryptocurrencies (Bitcoin, Ethereum, Litecoin, and Monero), we estimate the per coin economic damages of air pollution emissions and associated human mortality and climate impacts of mining these cryptocurrencies in the US and China. Results indicate that in 2018, each $1 of Bitcoin value created was responsible for $0.49 in health and climate damages in the US and $0.37 in China.

The similar value in China relative to the US occurs despite the extremely large disparity between the value of a statistical life estimate for the US relative to that of China. Further, with each cryptocurrency, the rising electricity requirements to produce a single coin can lead to an almost inevitable cliff of negative net social benefits, absent perpetual price increases. For example, in December 2018, our results illustrate a case (for Bitcoin) where the health and climate change “cryptodamages” roughly match each $1 of coin value created. We close with discussion of policy implications.

The child who is not embraced by the village will burn it down to feel its warmth.

– African proverb

Debt Rattle October 4 2019

Oct 042019

October 4, 2019 Posted by Raúl Ilargi Meijer at 9:31 am Finance Tagged with: Boris, Brexit, dollar, Hong Kong, impeachment, manufacturing, Nuland, Pelosi, rate cut, Trump, Ukraine, wildlife 7 Responses »

Paul Gauguin Breton woman 1886

• Ignore The Hype — This Is Not An Impeachment Inquiry (McCarthy)

• Trump Dares Pelosi To Hold Impeachment Inquiry Vote (ZH)

• Joe Biden Sprang Into Action When Ukraine Prosecutor Came After His Son (MoA)

• Trump Approval Climbs To Highest Level Of 2019 Amid Impeachment Inquiry (Hill)

• Weakening The Dollar Is The Last Hope For The Global Economy – Saxo (CNBC)

• Fed Policymakers ‘Open’ To Rate Cut As Risks To Outlook Rise (R.)

• America’s Manufacturing Industry Is In Contraction (CNN)

• Boris Has Destroyed What Is Left Of UK’s Credibility (Fintan O’Toole)

• Hong Kong Leader Carrie Lam Invokes Emergency Powers, Bans Face Masks (CNBC)

• UK Wildlife Species Dying Out, Many Will Soon Vanish (Ind.)

“What is portrayed as an “impeachment inquiry” is actually just a made-for-cable-TV political soap opera.”

Pelosi claims she can call a House impeachment inquiry without a House vote, and totally ignore Republican House members while she’s at it. That smells of prorogation.

The courts will have to decide this one. And that may take all the way to the 2020 election. Which the Dems think suits them just fine.

• Ignore The Hype — This Is Not An Impeachment Inquiry (McCarthy)

There is no impeachment inquiry. There are no subpoenas. You are not to be faulted if you think a formal inquest is under way and that legal process has been issued. The misimpression is completely understandable if you have been taking in media coverage — in particular, reporting on a haughty Sept. 27 letter from House Democrats, presuming to direct Secretary of State Mike Pompeo, on pain of citation for obstruction, to cooperate in their demands to depose State Department officials and review various records. The letter is signed by not one but three committee chairmen. Remember your elementary math, though: Zero is still zero even when multiplied by three. What is portrayed as an “impeachment inquiry” is actually just a made-for-cable-TV political soap opera.

The House of Representatives is not conducting a formal impeachment inquiry. To the contrary, congressional Democrats are conducting the 2020 political campaign. The House has not voted as a body to authorize an impeachment inquiry. What we have are partisan theatrics, proceeding under the ipse dixit of Speaker Nancy Pelosi (D-Calif.). It raises the profile, but not the legitimacy, of the same “impeachment inquiry” House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) previously tried to abracadabra into being without a committee vote. Moreover, there are no subpoenas. As Secretary Pompeo observed in his fittingly tart response on Tuesday, what the committee chairmen issued was merely a letter.

Its huffing and puffing notwithstanding, the letter is nothing more than an informal request for voluntary cooperation. Legally, it has no compulsive power. If anything, it is rife with legal deficiencies. The Democrats, of course, hope you don’t notice that the House is not conducting a formal impeachment inquiry. They are using the guise of frenetic activity by several standing committees — Intelligence, Judiciary, Foreign Affairs, Oversight and Reform, Financial Services, and Ways and Means — whose normal oversight functions are being gussied up to look like serious impeachment business. But standing committees do have subpoena power, so why not use it? Well, because subpoenas get litigated in court when the people or agencies on the receiving end object. Democrats want to have an impeachment show — um, inquiry — on television; they do not want to defend its bona fides in court.

“.. the White House is planning to send Nancy Pelosi a letter as soon as Friday arguing that President Trump and his team can ignore lawmakers’ demands until she holds a full House vote..”

• Trump Dares Pelosi To Hold Impeachment Inquiry Vote (ZH)

Why do Republicans want a vote, besides have Democrats – especially those in states won by Trump – be put on the record? Because, as RealClearPolitics explains, holding a formal vote on impeachment would allow Republicans to subpoena documents and witnesses and investigate all the revelations surrounding the whistleblower’s complaint about Trump’s interactions with Ukraine, as well the roles of Joe Biden and his son Hunter in Ukrainian corruption allegations. “Republicans would have the opportunity to get information from all sources and get it on the table,” Cleta Mitchell, a conservative political law attorney, told RealClearPolitics. “The process they are proceeding under through their committee attorney means they are the only ones who have the rights to gather information.”

[..] Which brings us to late on Thursday, when Trump himself figured out that his position would be strengthened by having a formal vote, because according to Axios, the White House is planning to send Nancy Pelosi a letter as soon as Friday arguing that President Trump and his team can ignore lawmakers’ demands until she holds a full House vote formally approving an impeachment inquiry. In addition to the above considerations, Axios notes that by putting in writing the case that Trump and his supporters have been making verbally for days, “the White House is preparing for a court fight and arguing to the public that its resistance to Congress’ requests is justified.”

Trump wants to force House Democrats in vulnerable races to be on the record if they favor pursuing impeachment, these sources tell us. Republicans also say the minority party can exert more influence over hearings and other aspects of an inquiry once it is formalized with a vote. By calling this an inquiry without holding a vote, Pelosi and the Democratic committee chairmen are having it both ways, one official said. “They want to be a little bit pregnant.” A letter could be filed as soon as Friday, because according to Axios sources, several White House lawyers spent a good chunk of their Thursday reviewing the language in the letter, expecting that it could find its way before a judge.

The MSM story that Shokin was corrupt seems to be falling apart. Biden’s defense for demanding him gone is that many voices said so. Yeah, the likes of Pyatt and Nuland, the architects of the Maidan coup.

• Joe Biden Sprang Into Action When Ukraine Prosecutor Came After His Son (MoA)

After the U.S. sponsored Maidan coup in 2014 then Vice President Joe Biden led the Ukraine policy of the Obama administration. His campaign against prosecutor general Shokin started in September 2015: “[The U.S. ambassador at the time, Geoffrey] Pyatt kicked off the effort with a speech on Sept. 24, 2015 in which he blasted Shokin for “openly and aggressively undermining reform” and having “undermined prosecutors working on legitimate corruption cases.” In testimony to the Senate Foreign Relations Committee on Oct. 8, Nuland declared: “The Prosecutor General’s Office has to be reinvented as an institution that serves the citizens of Ukraine, rather than ripping them off.”

Biden followed up with a visit to Kiev in December. On Dec. 7, he held a news conference with Poroshenko and announced $190 million to “fight corruption in law enforcement and reform the justice sector.” He made no public mention of the loan guarantee, but behind the scenes he had explicitly linked the $1 billion loan guarantee to reform efforts, including removing Shokin, according to Colin Kahl, Biden’s national security adviser at the time. A day after the news conference, he addressed the Ukrainian parliament and decried the “cancer of corruption” in the country. “The Office of the General Prosecutor desperately needs reform,” he noted.
…
Biden next met on Jan. 20 with Poroshenko on the sidelines of the World Economic Forum in Davos, Switzerland, when he also pressed “the need to continue to move forward on Ukraine’s anti-corruption agenda,” according to a White House statement.

Backdraft.

• Trump Approval Climbs To Highest Level Of 2019 Amid Impeachment Inquiry (Hill)

President Trump’s approval ticked up to 49 percent – its highest mark this year, according to a new Hill-HarrisX survey released on Wednesday. The figure marks a 2-point increase from a Sept. 11-12 poll, but a 2-point decrease from its previous peak of 51 percent in August 2018. Trump’s disapproval rating, meanwhile, dropped to 51 percent, which marks his lowest level so far this year. The nationwide survey was conducted on Sept. 28 and 29, less than a week after House Democrats launched a formal impeachment inquiry into Trump over concerns raised in a whistleblower’s complaint about the president’s communications with Ukraine.

House Democrats threatened Wednesday morning to subpoena the White House for documents related to Trump’s dealings with Ukraine as part of their impeachment inquiry. House Oversight Committee Chairman Elijah Cummings (D-Md.) said in a memo that House committees have repeatedly tried to obtain voluntary compliance from Trump officials, but the White House has “refused to engage with – or even respond to – the Committees.” Speaker Nancy Pelosi (D-Calif.) and House Intelligence Committee Chairman Adam Schiff (D-Calif.) held a joint news conference later that morning, warning that attempts by the White House to “stonewall” the impeachment inquiry and “conceal facts” would be considered an obstruction of justice.

Wait, isn’t that what Trump is after?

• Weakening The Dollar Is The Last Hope For The Global Economy – Saxo (CNBC)

Weakening the dollar is the last throw of the dice in rescuing the global economy, according to Saxo Bank’s Steen Jakobsen. In the online trading and investment specialist’s outlook report for the fourth quarter, published Thursday, Jakobsen said 2019 will most likely be remembered as the year that kickstarted a global recession, despite the lowest ever nominal and real interest rates. “Monetary policy has reached the end of a very long road and has proven a failure,” Jakobsen, who is the chief economist and CIO at Saxo Bank, added. The U.S. Federal Reserve in September made a second 25 basis point cut to interest rates, moving to a range of 1.75% to 2%. Its initial 25 basis point reduction in July was the central bank’s first rate cut since the financial crisis.

The European Central Bank (ECB), meanwhile, recently unveiled a package of measures to reinvigorate the euro zone economy, cutting its deposit rate by 10 basis points to -0.5% and launching a massive new quantitative easing (QE) program. A host of other central banks across the world have also embarked on dovish policy shifts. Fears for the global economy have been exacerbated of late by the weakest manufacturing data out of the U.S. for over a decade, which compounded already fragile readings from across the euro zone and beyond. “In a global system of failed monetary policies and a long and difficult path to fiscal policy, there is only one other tool left in the box for the global economy and that is lower the price of global money itself: the U.S. dollar,” Jakobsen said.

The outlook report pointed to an estimated $240 trillion of debt worldwide, roughly 240% of global GDP, and argued that too much of this debt is denominated in dollars, due to the greenback’s role as global reserve currency and the deep liquidity of U.S. capital markets. This means the prospects for all asset classes have become a function of U.S. dollar liquidity and direction, Saxo Bank economists suggested. “If the dollar rises too much, the strain in the system increases: not only for U.S. exports, but also for the emerging market with its high dependence on USD funding and export machines,” Jakobsen said.

End the Fed.

• Fed Policymakers ‘Open’ To Rate Cut As Risks To Outlook Rise (R.)

Two Fed policymakers on Thursday signaled they are open to delivering another rate cut after a report showed the growth in the vast U.S. services sector is slowing, but the Fed’s No. 2, speaking late in the day, gave little away on his own thinking. The Fed “will act as appropriate to sustain a low unemployment rate and solid growth and stable inflation,” Fed Vice Chairman Richard Clarida said in New York, repeating a phrase Fed Chair Jerome Powell has used ahead of meetings when the Fed did cut rates, as well as in June, when it didn’t. The U.S. consumer and economy are in a “good place,” and the U.S. labor market is “very healthy,” Clarida said. At the same time, risks include slowing global growth, uncertainty over trade, and persistent low inflation overseas, all of which impact the U.S. economy.

“We have eight meetings a year, we take them one at a time. We are not on a preset course,” he said. Clarida’s circumspect comments came at the end of a day where traders bid up expectations of two more Fed rate cuts this year after the Institute for Supply Management (ISM)’s non-manufacturing activity index dropped to its lowest reading since August 2016. Separate data earlier in the week showed an index of U.S. factory activity contracting to its lowest level in more than a decade. The reports may signal that a slide in exports, business sentiment and business investment is spreading to the consumer, whose spending accounts for the bulk of the $20 trillion U.S. economy.

Gee, that’s surprising. Service economy, right?

• America’s Manufacturing Industry Is In Contraction (CNN)

America’s manufacturing industry is in contraction. Business spending is soft. And now the biggest chunk of the economy, the US service sector, is growing at its weakest pace in three years. Recession fears were reinforced on Thursday after the Institute for Supply Management said its non-manufacturing index dropped to 52.6 last month, down from 56.4 in August. This barometer of growth among service providers such as banks, restaurants and hotels is now at the lowest level since August 2016. Businesses expressed concern about tariffs, a shortage of workers and the direction of the economy, ISM said.

Although the service sector is still expanding, the gloomy report raises concern that America’s manufacturing troubles are spilling over into the broader economy. Slammed by the trade war, US manufacturing activity dropped deeper into contraction in September, the most sluggish month for factories since June 2009. “The weakness in manufacturing has now infected the services side of the US economy,” Peter Boockvar, chief investment officer at Bleakely Advisory Group, wrote in a note to clients on Thursday.

The EU is talking about unilaterally declaring a Brexit extension.

• Boris Has Destroyed What Is Left Of UK’s Credibility (Fintan O’Toole)

When Boris Johnson described his long-awaited proposals for changes to the Brexit withdrawal treaty as a compromise, he was not wrong. Two questions arise, however. What is being compromised? And who is Johnson compromising with? The answer to the second is obvious: the proposals are a compromise, not with the EU, but with the DUP. And what is being compromised is the credibility of the UK as a partner in any international negotiations. Though the EU and the Irish government are too polite to say so directly, Johnson’s plan destroys any remaining sense that the current regime in London is capable of sticking even to its own self-declared principles.

Ever since its victory in the referendum of June 2016, the Brexit project has been dogged by its inability to transcend its own origins. The referendum was always driven by the internal politics of the Conservative Party. Its purpose, from the point of view of the man who called it, David Cameron, was to silence the increasingly turbulent anti-EU faction in his own party and see off the threat of Nigel Farage. And it has never been able to move on from being an internal negotiation to being an external one. The only thing that has really changed is that “internal” Tory politics came, after the 2017 election, to include the DUP.

And so here we are again. Political compromise is about two sides with different agendas meeting each other half way. It is easy to see why Johnson might be sincere in thinking he has achieved this – but only if the two sides are Johnson himself with his need to look like he is coming up with some vaguely credible alternative to the backstop and the DUP with its “blood red line” of Northern Ireland leaving the EU on exactly the same terms as the rest of the UK.

A 1922 law, right? Nothing much changed in the territory since then?

• Hong Kong Leader Carrie Lam Invokes Emergency Powers, Bans Face Masks (CNBC)

Hong Kong leader Carrie Lam on Friday invoked emergency powers and banned face masks, saying the order goes into effect on Saturday, Oct. 5. Consequences for breaking the ban include up to one year in jail and a fine of $25,000 Hong Kong dollars ($3,187). In a press conference, Lam explained that the face mask ban was necessary because “almost all protesters who carry out vandalism and violence covered their face.” “The purpose was to hide their identity and evade the law and they have become more and more daring,” Lam said. She noted, however, that the mask ban contains certain exemptions “to cater for legitimate needs.”

Face masks have become ubiquitous in the city after the 2003 SARS outbreak. The disease killed 298 people in Hong Kong, according to World Health Organization data. Hong Kong’s parliamentary body, the Legislative Council, will discuss the legislation on Oct. 16 when it resumes session, Lam said. The Hong Kong leader said the decision was made after she called a special meeting of the Executive Council, which decided to invoke the Emergency Regulations Ordinance. Lam explained that the government believes the regulation will have a “deterrent effect” against violent behavior and help police officers carry out their duties. Under the 1922 law, the chief executive is allowed to “make any regulations whatsoever which he may consider desirable in the public interest.”

Study since 1970. But more of the damage had already been done before that.

• UK Wildlife Species Dying Out, Many Will Soon Vanish (Ind.)

The UK’s wildlife is dying out and many species will go extinct if urgent action is not taken, according to the latest State of Nature report, which draws on scientific monitoring since the 1970s. Leading professionals from more than 70 wildlife organisations have joined government agencies to create the comprehensive report, which warns wildlife declines continue “unabated”. Among thousands of mammal and plant species assessed, 15 per cent are threatened with being lost from Britain, including wildcats and greater mouse-eared bats. More than two-fifths of UK species including animals, birds and butterflies have seen significant declines in recent decades, the study found.

Since 1500 around 133 species have already vanished from Britain’s shores, including birds such as the wryneck and serin, which were lost as breeding birds in the 20th century. Dr Daniel Hayhow, lead author on the report and conservation scientist at RSPB, said: “We know more about the UK’s wildlife than any other country on the planet, and what it is telling us should make us sit up and listen. “We need to respond more urgently across the board if we are to put nature back where it belongs.” Data on nearly 700 species of land, freshwater and sea animals, fish, birds, butterflies and moths reveals 41 per cent have seen populations decline since 1970, while 26 per cent have increased.

Debt Rattle October 3 2019

Oct 032019

October 3, 2019 Posted by Raúl Ilargi Meijer at 10:37 am Finance Tagged with: Assange, Boris, Brexit, Epstein, Houthis, Mossad, Putin, Schiff, tariffs, Trump, whistleblower 13 Responses »

Rembrandt van Rijn Self portrait 1642

• US Hits Scotch Whisky, Italian Cheese, French Wine With 25% Tariffs (R.)

• NYT: ‘Whistleblower’ Spoke To ‘Shifty Schiff’ Before Filing Complaint (RT)

• Trump Attacks Democrats, Whistleblower Over Impeachment (R.)

• Lindsey Graham Urges Foreign Leaders To Assist Barr With Investigation (Pol.)

• We’ll “Definitely” Interfere In 2020, Just “Don’t Tell Anybody” – Putin (ZH)

• Putin Shames Greta Thunberg And Her Handlers Over Environmental Agenda (ZH)

• Dismay In Brussels As Boris Johnson Finally Reveals Brexit Plan (G.)

• 3 Saudi Brigades Annihilated in Houthi Offensive in Saudi Arabia (Pieraccini)

• Ex-Israeli Intel Exec Says Epstein, Ghislaine Worked for Israeli Intel (Webb)

• Julian Assange, Britain’s Unconvicted Prisoner (Cross)

And it still can’t help Boeing. Boeing has other problems.

This is based on a recent WTO ruling on Airbus and Boeing subsidies. The EU can only strike back in 2020.

Also: “..a 10% levy that could hurt U.S. airlines such as Delta that have billions of dollars of Airbus orders waiting to be filled.”

• US Hits Scotch Whisky, Italian Cheese, French Wine With 25% Tariffs (R.)

The Trump administration slapped 25% tariffs on French wine, Italian cheese and single-malt Scotch whisky — but spared Italian wine, pasta and olive oil — in retaliation for European Union subsidies on large aircraft. The U.S. Trade Representative’s Office released a list of hundreds of European products that will get new tariffs, including cookies, salami, butter and yogurt – but in many cases applied to only some EU countries, including German camera parts and blankets produced in the United Kingdom. The list includes UK-made sweaters, pullovers, cashmere items and wool clothing, as well as olives from France and Spain, EU-produced pork sausage and other pork products other than ham, and German coffee. The new tariffs are to take effect as early as Oct. 18.

The U.S. Trade Representative’s Office said it would “continually re-evaluate these tariffs based on our discussions with the EU” and expects to enter talks in a bid to resolve the dispute. Still some Italian foods — Parmesan Reggiano, Romano and provolone cheese — were hit with tariffs as were Italian fruits, clams and yogurt. Also getting new tariffs are German and British camera parts, industrial microwave ovens, printed books, sweet biscuits and waffles. The main target of the U.S. tariffs is Airbus aircraft made in the EU, which face a 10% levy that could hurt U.S. airlines such as Delta that have billions of dollars of Airbus orders waiting to be filled. EU products winning reprieves include chocolate, Greek, French and Portuguese olive oil, helicopters, frozen fish, lobster, sparkling wine, stemware and tiles.

“I’d go a step further – I think he probably helped write” the complaint..”

• NYT: ‘Whistleblower’ Spoke To ‘Shifty Schiff’ Before Filing Complaint (RT)

The CIA agent accusing President Donald Trump of a quid pro quo with Ukraine spoke to House intel chief Adam Schiff’s staff before filing his whistleblower complaint, sources say – and Trump believes the collusion goes deeper. The “whistleblower” spoke to a House Intelligence Committee staffer about his concerns, gleaned from secondhand knowledge of a phone call between Trump and Ukrainian President Volodymyr Zelensky, that the president was abusing his power – and that staffer shared the information with Schiff – before the still-anonymous CIA officer filed his complaint, according to the New York Times, which cited Schiff’s spokesman and “current and former American officials” in a report published Wednesday.

The Times’ report “shows that Schiff is a fraud,” the president told reporters during a White House press conference with Finnish President Sauli Niinisto Wednesday afternoon when he was asked about the story, calling the fact that the congressman, whom he dubbed “shifty Schiff,” knew about the complaint before it was even filed “a scandal.” “I’d go a step further – I think he probably helped write” the complaint, Trump said. “He knew long before, and he helped write it too,” he continued more confidently. The president – who elsewhere in his remarks tried out his new “corrupt news” moniker for the mainstream media – nevertheless congratulated the Times on the scoop. “Maybe they’re getting better,” he mused.

“They should look at him for treason because he is making up the words of the president of the United States – not only the words but the meaning..”

• Trump Attacks Democrats, Whistleblower Over Impeachment (R.)

U.S. President Donald Trump kept up his assaults on the Democratic lawmakers leading impeachment proceedings on Wednesday, accusing House Intelligence Committee Chairman Adam Schiff of treason, as well as attacking the unidentified whistleblower who reported concerns about his behavior. The Republican president has lashed out repeatedly at the impeachment inquiry, which was prompted by his phone call with the Ukrainian president that sought an investigation that would be damaging to a Democratic political opponent, former Vice President Joe Biden. Trump repeatedly says he did nothing wrong in his July 25 telephone call in which he asked Ukrainian President Volodymyr Zelenskiy to investigate a domestic political rival Joe Biden, the former U.S. vice president.

He has repeatedly attacked the Democratic chairman of the House of Representatives Intelligence Committee, Adam Schiff, who is leading the impeachment inquiry. “They should look at him for treason because he is making up the words of the president of the United States – not only the words but the meaning,” Trump said. He accused the Democrats’ impeachment efforts of being groundless and politically motivated. “They’ve been trying to impeach me from the day I got elected,” Trump said.

Both sides are now timing for the 2020 elections.

• Lindsey Graham Urges Foreign Leaders To Assist Barr With Investigation (Pol.)

Senate Judiciary Chairman Lindsey Graham on Wednesday asked several foreign leaders to continue to assist Attorney General William Barr with his investigation into the 2016 election. In a letter to the prime ministers of Australia, Italy and Britain, the South Carolina Republican requested their “continued cooperation with Attorney General Barr as the Department of Justice continues to investigate the origins and extent of foreign influence in the 2016 election.” At President Donald Trump’s urging, Barr is examining how the FBI investigation into connections between Russia and the Trump campaign began. Graham stated in the letter that during the 2016 election, the U.S. law enforcement and intelligence communities used a “deeply flawed dossier filled with hearsay and written by a biased, former United Kingdom intelligence officer” — a reference to the so-called Steele dossier — as part of its investigation.

He also added that law enforcement had received “intelligence from an Italian ‘professor’” — referring to Joseph Mifsud, whose interactions with a former Trump campaign adviser, George Papadopoulos, prompted the FBI to open its counterintelligence investigation — and accepted information from an Australian diplomat. That was a reference to a reported tip from an Australian official, Alexander Downer, to the FBI about possible collusion between Russia and Trump’s 2016 campaign. [..] “That the Attorney General is holding meetings with your countries to aid in the Justice Department’s investigation of what happened is well within the bounds of his normal activities,” Graham wrote. “He is simply doing his job.”

Exposing the sheer stupidity that controls America.

• We’ll “Definitely” Interfere In 2020, Just “Don’t Tell Anybody” – Putin (ZH)

Absolutely no laughing matter for the likes of Rachel Maddow and others who have now spent years locked deep in their ‘Russiagate’ navel-gazing, but at least Putin still hasn’t lost his sense of humor about it. While speaking on a panel of industry and political leaders at the Russian Energy Week conference, Putin mocked reports already alleging Moscow plans to interfere in the 2020 US presidential election. When pressed by NBC News correspondent Keir Simmons over whether former Special Counsel Robert Mueller was accurate in predicting Russia would “attempt to interfere” in the 2020 election, Putin leaned forward in a gesture to act like he was whispering a ‘secret’: “I’m going to tell you a secret,” Putin said, leaning forward. “Yes, we will definitely intervene, don’t tell anybody” he continued to an applauding crowd.

“You know, we have enough of our own problems,” Putin continued. “We are engaged in resolving internal problems and are primarily focused on this.” His characteristic public sarcasm was a hit with the crowd, at an event which included OPEC Secretary General Mohammed Barkindo and others. He followed on a more serious note by calling it “ridiculous” that Russia would interfere in the 2020 election. He also talked down his relationship and interactions with President Trump, describing that the two leaders have never been close. “In my opinion, we have good, businesslike relations, and a relatively stable level of trust,” he said during the conference’s plenary session. “We’ve never been close, and aren’t now.” However, Putin did come to the US president’s defense when asked about the Ukraine call transcript.

“From what we know, I don’t see anything compromising at all,” Putin told the audience. “I didn’t see that during this phone call Trump demanded compromising material from Zelenskiy at any cost and threatened him that he wouldn’t help Ukraine.” The Kremlin last week said its consent must be required before any calls between the US and Russian leader are published. Putin said there’s no compromising material at all in those transcripts, and added he that “any conversation can be published — I always proceed from that.” Putin also addressed last year’s controversy over his closed door summit with President Trump, saying he requested that Washington publish details of the talks. “We don’t mind,” Putin said confidently. “I assure you that there’s nothing there that would compromise President Trump.”

I wouldn’t have said he shames her. He simply understands that Greta IS her PR handlers. She should go home and be a child, not get dragged around the planet by spin doctors.

• Putin Shames Greta Thunberg And Her Handlers Over Environmental Agenda (ZH)

Russian President Vladimir Putin on Wednesday chided Swedish environmentalist Greta Thunberg and her adult handlers, after the 16-year-old gave an emotional speech at the UN late last month. “Sure, Greta is kind, but emotions should not control this issue,” said Putin. “Go and explain to developing countries why they should continue living in poverty and not be like Sweden,” he added, before saying that it was deplorable how some groups are using Thunberg to achieve their own goals. In her speech last week, Thunberg lashed out at the United Nations – saying “You have stolen my dreams and my childhood with your empty words.” Thunberg also filed a legal complaint accusing five countries of inaction on global warming – drawing the ire of French President Emmanuel Macron, and many others who noted that she’s left China out of her diatribes and lawsuit, despite being the world’s worst polluter by total volume.

There are actually Labour MPs who support Johnson’s nothingness.

• Dismay In Brussels As Boris Johnson Finally Reveals Brexit Plan (G.)

Boris Johnson appears to be fighting a losing battle to avoid Britain staying in the European Union beyond 31 October after Michel Barnier privately gave a scathing analysis of the prime minister’s new plan for the Irish border, describing it as a trap. The European commission also refused to go into the secretive and intensive “tunnel” talks with the UK’s negotiators before a crunch summit on 17 October from which the UK had hoped to deliver a breakthrough deal. Despite concerted attempts to avoid publicly trashing the UK proposals, there was dismay behind the scenes in Brussels after Johnson tabled his first concrete proposal for replacing the Irish backstop.

The prime minister had set out the outline of the government’s offer in a speech to Tory party faithful in Manchester that also laid down the battle lines for a general election. On Wednesday night, he was hopeful a parliamentary majority could be assembled to back it. Johnson’s plan involves Northern Ireland leaving the EU’s customs union at the end of transition along with the rest of the UK, necessitating checks and controls on the island of Ireland. Northern Ireland would also stay aligned with EU standards on goods if Stormont agreed by December 2020, the end of the transition period, and then in a vote every four years.

But the UK has also requested that both sides commit at treaty level “never to conduct checks at the border” even if Stormont vetoes the arrangements laid out in the new 44-page Irish protocol. Barnier said that this commitment would prevent Brussels from protecting its internal market if the Northern Ireland assembly blocked the arrangement in 2020 or at a later date. “The EU would then be trapped with no backstop to preserve the single market after Brexit,” he warned, according to someone present in the room.

Federico Pieraccini on an attack that proves it wasn’t Iran, ever. Where’s the coverage of this in the western press? Too inconvenient?

“Let us salute the resourceful Houthis, today’s unconquerable underdogs, for giving the world’s most repugnant bullies a bloody nose, and a huge blow to their bloated egos.”

• 3 Saudi Brigades Annihilated in Houthi Offensive in Saudi Arabia (Pieraccini)

Many may have hitherto been led to believe that the Houthis were a ragtag armed force lacking in sophistication. Many, seeing the drone and missile attacks on Saudi oil plants, may have declared it to be a false-flag attack carried out by Riyadh to boost Aramco’s market value; either that or it was an operation carried out by Iran or even Israel. On Saturday September 28, the Houthis put paid to such speculation by confirming what many, like myself, have been writing for months; that is, that the asymmetrical tactics of the Houthis, combined with the conventional capabilities of the Yemeni army, are capable of bringing the Saudi kingdom of Mohammed Bin Salman to its knees.

The Yemeni army’s missile forces are able to carry out highly complex attacks, no doubt as a result of reconnaissance provided by the local Shia population within the Kingdom that is against the House of Saud’s dictatorship. These Houthi sympathisers within Saudi Arabia helped in target identification, carried out reconnaissance within the plants, found the most vulnerable and impactful points, and passed this intelligence on to the Houthis and Yemeni army. These Yemeni forces employed locally produced means to severely degrade Saudi Arabia’s crude-oil-extraction and processing plants. The deadly strikes halved oil production and threatened to continue with other targets if the Saudi-conducted genocide in Yemen did not stop.

On Saturday 29 the Houthis and the Yemeni army conducted an incredible conventional attack lasting three days that began from within Yemen’s borders. The operation would have involved months of intelligence gathering and operational planning. It was a far more complex attack than that conducted against Aramco’s oil facilities. Initial reports indicate that the forces of the Saudi-led coalition were lured into vulnerable positions and then, through a pincer movement conducted quickly within Saudi territory, the Houthis surrounded the town of Najran and its outskirts and got the better of three Saudi brigades numbering in the thousands and including dozens of senior officers as well as numerous combat vehicles. This event is a game changer, leaving the US, Mike Pompeo and the Israelis and Saudis unable to lay the blame on Iran as all this took place a long way from Iran.

Whitney Webb strikes again.

• Ex-Israeli Intel Exec Says Epstein, Ghislaine Worked for Israeli Intel (Webb)

In an interview with Zev Shalev, former CBS News executive producer and award-winning investigative journalist for Narativ, the former senior executive for Israel’s Directorate of Military Intelligence, Ari Ben-Menashe, claimed not only to have met Jeffrey Epstein and his alleged madam, Ghislaine Maxwell, back in the 1980s, but that both Epstein and Maxwell were already working with Israeli intelligence during that time period. In an interview last week with the independent outlet Narativ, Ben-Menashe, who himself was involved in Iran-Contra arms deals, told his interviewer Zev Shalev that he had been introduced to Jeffrey Epstein by Robert Maxwell in the mid-1980s while Maxwell’s and Ben-Menashe’s involvement with Iran-Contra was ongoing. Ben-Menashe did not specify the year he met Epstein.

Ben-Menashe told Shalev that “he [Maxwell] wanted us to accept him [Epstein] as part of our group …. I’m not denying that we were at the time a group that it was Nick Davies [Foreign Editor of the Maxwell-Owned Daily Mirror], it was Maxwell, it was myself and our team from Israel, we were doing what we were doing.” Past reporting by Seymour Hersh and others revealed that Maxwell, Davies and Ben-Menashe were involved in the transfer and sale of military equipment and weapons from Israel to Iran on behalf of Israeli intelligence during this time period. He then added that Maxwell had stated during the introduction that “your Israeli bosses have already approved” of Epstein. Shalev later noted that Maxwell “had an extensive network in Israel at the time, which included the then-Prime Minister Ariel Sharon, according to Ben-Menashe.”

Ben-Menashe went on to say that he had “met him [Epstein] a few times in Maxwell’s office, that was it.” He also said he was not aware of Epstein being involved in arms deals for anyone else he knew at the time, but that Maxwell wanted to involve Epstein in the arms transfer in which he, Davies and Ben-Menashe were engaged on Israel’s behalf.

“These inconsistencies should raise serious doubts as to whether the British justice system is operating objectively and according to domestic and international legal norms.”

We had no such doubts any more.

• Julian Assange, Britain’s Unconvicted Prisoner (Cross)

This article is a second piece focusing on Belmarsh prison, where the founder of Wikileaks, Julian Assange, continues to be arbitrarily detained by the British government. The first part showed how Belmarsh prison has been systematically denying Assange access to justice by restricting all the means through which he could prepare his defence; access to and possession of legal documents, talking to his US lawyers, restricted meetings with his UK lawyers, and access to a laptop as a basic means to prepare his defence. These restrictions have been imposed in contradiction to all legislation and standards regarding the rights of the prisoner. This piece looks at the weaponizing of Category A prison security and the use of prison healthcare isolation as part of a program of the state-sponsored abuse of a journalist imprisoned for releasing prima facie evidence of US war crimes committed in Iraq and Afghanistan.

The decision on 13th September by Judge Vanessa Baraitser in a ‘technical hearing‘ at Westminster Magistrate’s Court, means that although Assange has been given parole half way through what experts believe was a disproportionate 50 week sentence for skipping police bail in 2012, he will still be kept in prison while he is fighting extradition to the US – a process which could take many years. Baraitser justified her decision as follows: “In my view I have substantial ground for believing if I release you, you will abscond again” She described his status now as: “…from a serving prisoner to a person facing extradition”

According to the British judiciary, Assange was initially apprehended and sentenced to prison because he had ‘skipped bail’ by seeking refuge for political asylum in London’s Ecuadorian embassy. Despite the fact the original investigation in which he was wanted for questioning (and complied) by Swedish authorities had been dropped, the British courts still treated Assange as a serious criminal and sentenced him as such. The narratives in Baraitser’s statement, the injustices arising from them and the proceedings around this hearing have all been highlighted and roundly condemned. What’s more, despite the change to Assange’s prisoner status, he has so far been kept in Belmarsh. These inconsistencies should raise serious doubts as to whether the British justice system is operating objectively and according to domestic and international legal norms.

Twisted Pair 2 – UK

Oct 022019

October 2, 2019 Posted by Raúl Ilargi Meijer at 1:23 pm Primers Tagged with: backstop, border, Boris, Brexit, Good Friday, Ireland, Leave, LeaveWithADeal, majority, parliament, Queen, Remain, SupremeCourt 8 Responses »

Salvador Dali Bather 1924

The US and UK are both at risk of severe legal challenges and hence “barrelling down towards great troubles” as I wrote yesterday in Twisted Pair 1 – US. The reasons are not exactly the same in both cases, but they’re close. It’s about who holds the ultimate power.

Before moving on to the UK’s specific issues, I want to share this from the BBC, one of many pieces yesterday that discuss President Trump talking to foreign leaders, and that all accuse him in one way or another of wanting to ‘dig up dirt’ about Joe Biden (something that could just as well be defined as trying to find out how Russiagate started).

This one is about Trump asking Australia for help because obviously there’s a strong connection to the country in the person of former Australia High Commissioner to the UK Alexander Downer, who claims Trump ‘aid’ George Papadopoulos told him in May 2016 that Moscow had dirt on Hillary Clinton. Papadopoulos has always denied saying it.

But it appears the world media have made it their task to vilify Trump’s efforts to investigate Russiagate, so expect much more of it. The article for instance also mentions Bill Barr talking to Italian and British intelligence. Yeah, they’re serious about wanting to find out what happened. I’d suggest you get used to that. But here’s what I want to share:

[..] while the Ukraine call is linked to the serious issue of potential influencing of an upcoming US election, the Australian one refers to events around a past election. White House spokesman Hogan Gidley suggested this was uncontroversial. “I’m old enough to remember when Democrats actually wanted to find out what happened in the 2016 election,” he said.

I thought that was pretty good. But on to Albion, where the legal mess is likely much bigger than in the States, because its laws are so opaque. Sure, NOW people are clamoring for a written constitution, but NOW is a tad late. I read the other day in a Dutch paper that Queen Elizabeth had asked her advisors if she could sack Boris Johnson, and couldn’t find coverage of it in any UK paper. Still can’t. Isn’t that curious? We’ll have to do with yesterday’s New York Post: “It was the first time in her 67-year reign that the Queen asked for clarification on how to dismiss a British prime minister, the report claimed.”

The Queen didn’t actually look to fire Johnson, she simply didn’t know the laws surrounding the topic, she wanted to know what her legal position is. And that seems to typify the entire situation unfolding in the country. Nobody has any idea who has the -ultimate- power to execute any far-reaching policies and decisions. That would appear to be a very dangerous conundrum, because it may allow the loudest, -physically- strongest and perhaps even most deceitful to prevail.

There was someone in a recent Automatic Earth comments section who listed all 11 UK Supreme Court judges and concluded they were all “Remainers”. That is a slippery slope too many. Because if you intend to disqualify the highest court in a country, you invite in anarchy. Now, you may favor “Leave”, but that kind of thing will surely come back to bite you in the face.

Besides, the Supreme Court decision to declare Boris Johnson’s prorogation of Parliament unlawful was the only one a highest court could possibly have made. Because Britain, like so many other western nations, is a parliamentary democracy. The only thing I’ve seen that looks like a constitution there says in eight words that parliament is senior to the monarch. That means it is senior to the executive branch as well. It has to.

Whereas a Scottish court ruled a few weeks ago that the prorogation decision was justiciable, and declared it unlawful, a lower UK court said it was non-justiciable, that is was up to Parliament, and that Parliament could “sit” whenever it wanted. But Parliament hasd just been prorogued, and therefore could NOT sit whenever it wanted. That lower court even contradicted itself: “Parliament is the master of its own proceedings. It is for parliament to decide when it sits. Parliament can sit before and after prorogation..”

So they have to make up their minds. It would be demonstrably silly if the Queen could fire the Prime Minister. It would be much less silly if Parliament could do it, though. Which would also be less silly than the Prime Minister being allowed to shut down Parliament with impunity in a parliamentary democracy. You have to look at the legal implications.

Now, the world is increasingly divvied up in antagonistic (i.e. twisted) pairs. In the US, if you don’t hammer Trump ten times a day and twice on Sundays, you get accused of effectively supporting him. In the UK, if you question Boris Johnson’s quest towards Halloween Brexit, you’re against ‘the people’, and their will. And that’s why we have laws. It’s just that British laws are terribly vague, and that’s why the courts became involved (as I predicted they would for a long time).

Today, Boris Johnson is sending a ‘plan’ to Europe that he has labeled ‘take it or leave it’. Which leads many to question his desire to reach a deal at all. More importantly, the European Union (Withdrawal) (No 2) Act 2019, aka the Benn Act, was passed by parliament last month and requires the government to ask for an extension until 31 January 2020 if no deal is agreed.

Boris has suggested he will ignore it. But that would mean the executive branch is effectively senior to the legislative branch. It would also mean the end of the parliamentary democracy that Britain has been for what is it, 400 years?! I have no horse in this fight or dog in this race, but that to me looks extremely dangerous. Be careful what you wish for.

The UK Supreme Court is in for the by far busiest time of its existence. And by the way, you can criticize the court, but only really by criticizing the way the judges on it are appointed, and then take action to change that way. If you try to question its credibility, however, you destroy the credibility of the entire judicial system, all of it.

Again, be careful what you wish for. It’s not hard to understand why and how people point to the 2016 Brexit referendum to justify a Brexit strategy, but they too will still have to follow the rules and laws, or they will create mayhem. That goes for both sides, of course, but for Boris Johnson to try and take the UK out of the EU in violation of the Benn Act would unleash a lot of disorder that he and his people may not fully comprehend yet

And there’s something else going on in the UK that I wrote about recently in “The Will of the People”, but which still doesn’t generate much interest. That is, this whole issue is no longer about Leave vs Remain, there is a third group, Leave But With A Deal. Ironically, the Leave side seeks to group these people in with the Remainers, which is both not honest and may not serve their own interests.

That is because Leave But With A Deal may well be the largest group out there. There are Tories and Labour supporters in it, plus independents and some LibDems, and they’re there for the taking for Boris. Only, they insist on a deal with the EU being in place. If there’s no such deal on October 19, they automatically become Boris’s opponents. But why would he let them? Why not get a serious deal on the table?

Johnson will attempt to blame the failure of his latest proposal, plus all previous ones, on the EU. But has Brussels been all that unreasonable in the negotiations? I’m no EU fan, but it’s an honest question. They have one large issue: Ireland. The Good Friday agreement is sacred for them, because it is for Ireland. And Boris today allegedly proposing some kind of border infrastructure regardless will not fly.

A difficult topic, for sure, but then we’re 3,5 years on from the referendum, and what has the UK done since then? London gives the impression that peace in Ireland is less important for them than it is for Brussels, and that is not wise. As former Northern Ireland negotiator Jonathan Powell said in a video I posted earlier today, what will happen is easy to predict:

Even if you just put in a camera on the border, the dissident Republicans will shoot at it. Then you put in police to protect the camera, they’ll shoot at the police. Next up is the army to protect the police, and so on and so forth. Perhaps a unified Ireland is a solution, though that will take time, but a hard Brexit certainly is not. But Boris appears to play games with this, suggesting there will have to be customs facilities some way or another: “Each of the IRA campaigns started as a border campaign”, says Powell.

A hard border undermines the basis of the Good Friday Agreement – Jonathan Powell told us in August.

But what does the former Northern Ireland negotiator make of reports of the PM's latest offering on the backstop? He joins us at 22:30https://t.co/Qhrwo8Aank #Newsnight pic.twitter.com/lr4XBw4l47

— BBC Newsnight (@BBCNewsnight) October 1, 2019

Summarized, we have this third group, not Leave or Remain but Leave But With A Deal, and they are being ignored and/or labeled Remain. Whereas they could be key to Johnson and his supporters’ desire to Leave. Look, Boris has no majority in Parliament anymore, not even if the DUP he apparently sucked up to vote with him. He needs something else but is running out of time.

Then again, Boris has pledged to Leave by Halloween. Now his personal credibility is at stake, and it’s become more important than the credibility of his party, of Parliament and even of the entire court system. Next up: the Queen. Who didn’t want to sack him but was royally miffed about him advising her to prorogate which put her in a very not amused position when her own Supreme Court declared her decision unlawful.

It would appear to be in Johnson’s own interest, if he wants to carry through Brexit, for him and his team to do a lot more homework. He’s already mightily miffed the Queen, the Supreme Court has accused him of attempting to push through an unlawful act, and he’s lost his party’s majority in Parliament.

Boris’s support may seem solid in his own party conference in Manchester today, but let’s hope he doesn’t get even more blinded by that than he already is, because the consequences could well be catastrophic. And of course I see, and understand, all the people who want the result of the referendum honored, but there’s a whole new ball game underway today, and it would be foolish to ignore that.

You can still go for Brexit, but Good Friday is a giant and unnecessary leap too far to achieve it. As is trying to make the executive branch claim seniority over the legislative one, or the Supreme Court, to achieve your goal. You can wish, but beware.

Debt Rattle October 2 2019

Oct 022019

October 2, 2019 Posted by Raúl Ilargi Meijer at 9:14 am Finance Tagged with: Abenomics, backstop, Boris, Brexit, China, Facebook, Libra, Pompeo, Ukraine, Warren, Zelensky 10 Responses »

Pablo Picasso Self portrait 1919

• Trump-Zelensky-Ukraine: What Is Really Going On Here? (OffG)

• Kiev Agrees To EU-Backed Roadmap Aimed At Peace In Eastern Ukraine (RT)

• Final Proposal: UK PM Johnson To Unveil Brexit Offer To EU (R.)

• US House Committees Seek To Hold Line On Pompeo In Impeachment Probe (R.)

• Barr Investigating The Investigators Of Russian Meddling (R.)

• Japan Raises National Sales Tax Despite Recession Worries (AP)

• US Gross National Debt Up $1.2 Trillion in Fiscal 2019 to $22.7 Trillion (WS)

• Major US Investors Have Billions At Risk In Chinese Stocks (R.)

• Zuckerberg Says Warren As US President Would Be Bad For Tech (R.)

• Institutional Libra Backers Are Getting Cold Feet (CD)

Interesting take. It’s all about Russia.

• Trump-Zelensky-Ukraine: What Is Really Going On Here? (OffG)

Let’s start with the foreign policy goals. Both Trump and Zelensky are operating in highly constrained and threatening foreign policy environments at home. At the time of their phonecall, Trump still had the warmonger Bolton to deal with inside the house: and even now he is still under the watchful scrutiny of the Russophobe imperial state figure of his Secretary of State Pompeo, closely though undeclaredly linked to the Washington imperial party on Ukraine-Russia as on other East-West issues. Zelensky is similarly constrained and threatened in Kiev by the anti-Russian fanaticism that has been indoctrinated in large sections of the Ukrainian population by decades of nationalist, often neo-Nazi, Russophobe propaganda.

It is a tribute to the instinctive good sense of the Ukrainian electorate that Zelensky was able to defeat in the polls the discredited NATO stooge Poroshenko so comprehensively and decisively. The maturity of this vote gives me renewed hope for Ukraine. But there is a long way to go still towards political normalisation and economic recovery there. Zelensky is smart enough to see that his country must achieve a normalisation of relations with Russia, but knows that he cannot yet say this openly. Putin wants this also, very much. But both men know it will take a very long time after the accumulated bitter grievances on both sides over recent decades, and especially since the lethal and destructive civil war on Eastern Ukraine that was begun by Poroshenko in April 2014 – no doubt on American advice.

This war has had terrible human consequences: loss of life, wounded and disabled casualties, destroyed communities, massive forced refugee outflows. Neither side can get over this easily or quickly. The reciprocal prisoner release on 7 September was an essential symbolic action. Putin’s release of the navy crews who took part in the provocative and foolish Ukrainian raid on the Kerch Strait bridge a year ago was a key part of building Ukrainian confidence and trust in Zelensky’s leadership. Russophobes in the West are in consternation at new green shots of possible hope for progress towards Kiev-Moscow normalisation under the Normandy diplomacy format.

[..] As I interpret the Trump-Zelensky conversation, both leaders were cautiously but in a friendly way exploring the boundaries of what might be possible for each of them as presidents to revisit the troubled history of the past few years. I see nothing dishonourable or intimidating in this conversation. Trump critics are reading into it only what they want to read.

Zelensky ran on promoting peace. But it puts him in danger.

• Kiev Agrees To EU-Backed Roadmap Aimed At Peace In Eastern Ukraine (RT)

The government in Kiev has agreed to the so-called ‘Steinmeier Formula,’ the process for Ukraine’s breakaway eastern regions to receive autonomy, which is expected to revitalize the stalled peace process. Named after Frank-Walter Steinmeier, the German foreign minister who suggested it back in 2015, it’s an addition to the second Minsk agreement that explains exactly how elections must be held in eastern regions of Ukraine in order to end the bloodshed and reintegrate the breakaway Republics of Donetsk and Lugansk. According to the formula, the “special status” – i.e. autonomy – law must enter into force temporarily on election day and become a permanent one after the Organization for Security and Cooperation in Europe (OSCE) deems the elections legitimate.

All members of the three-side contact group – Russia, Ukraine and the OSCE – as well as the ones from the self-proclaimed republics, agreed to the ‘Steinmeier Formula’ on Tuesday, sending letters of agreement to the OSCE special representative in Ukraine, Martin Sajdik. The official confirmed to Interfax that no joint document was signed and “the signatories have been put under separate letters.” It was not immediately clear to what extent the ‘Formula’ has become legally binding, given this quite unusual way of approval. Explaining the move, Ukraine’s President Volodymyr Zelensky said that the ‘Formula’ will be implemented into the new “special status” law – which is yet to be designed and approved by lawmakers at by the Ukrainian Rada. He also insisted that Kiev should control the border with Russia in the East.

The sides had been expected to sign ‘the formula’ a few week ago, but the negotiations fell through because Ukraine disagreed with some points. While the approval is regarded as a positive sing in peace process by politicians, it was met with a very angry reaction by Ukrainian neo-Nazis and pro-war groups. Shortly after the announcement, a protest dubbed ‘No to capitulation’, was staged outside his office. The protesters waved flags of far-right groups, shouted slogans and brandished flares, demonstrating their dissatisfaction with any attempts by the Kiev authorities to somehow settle the conflict in the east of the country. A similar reaction was voiced by the former president of Ukraine, Petro Poroshenko. He branded the ‘Steinmeier Formula’ a “Putin formula,” claiming that agreeing to it paves the way for deconstruction of Ukraine as a sovereign state.

He knows there’s no chance it will be accepted. But he’s been told by Parliament to get a deal or ask for an extension.

• Final Proposal: UK PM Johnson To Unveil Brexit Offer To EU (R.)

Prime Minister Boris Johnson will on Wednesday unveil his final Brexit offer to the European Union and make clear that if Brussels does not engage with the proposal, Britain will not negotiate further and will leave on Oct. 31. In his closing speech to his governing Conservatives’ annual conference, Johnson will stick to his hard line on Brexit, offering the party faithful the first details of what he will describe as his “fair and reasonable compromise”. With less than a month until Britain is due to leave the EU, the future of Brexit, the country’s biggest trade and foreign policy shift in more than 40 years, is uncertain. Britain could leave with a deal, without one or not exit at all.

Johnson, who says Britain will leave the bloc on Oct. 31 no matter what, will tell the conference he will send his proposal to Brussels, an attempt to secure a deal to smooth the country’s departure and avoid a potentially damaging no-deal Brexit. “My friends, I am afraid that after three-and-a-half years people are beginning to feel that they are being taken for fools. They are beginning to suspect that there are forces in this country that simply don’t want Brexit delivered at all,” he will say, according to extracts released by his office. “Let’s get Brexit done on October 31 so in 2020 our country can move on.” More than three years after Britain voted to leave the EU in a 2016 referendum, Brexit talks are at an impasse.

Johnson has been firm that the Oct. 31 deadline will be met, but parliament has put roadblocks in his way – passing a law that requires the prime minister to request a Brexit delay if he fails to secure an acceptable deal at an EU summit on Oct. 17. The EU has repeatedly asked Britain to come up with “legal and operational” proposals for the changes Johnson wants to a deal his predecessor negotiated with the bloc last year.

A hard border undermines the basis of the Good Friday Agreement – Jonathan Powell told us in August.

But what does the former Northern Ireland negotiator make of reports of the PM's latest offering on the backstop? He joins us at 22:30https://t.co/Qhrwo8Aank #Newsnight pic.twitter.com/lr4XBw4l47

— BBC Newsnight (@BBCNewsnight) October 1, 2019

Head butting.

• US House Committees Seek To Hold Line On Pompeo In Impeachment Probe (R.)

The leaders of three U.S. House of Representatives committees accused Secretary of State Mike Pompeo of intimidating witnesses on Tuesday, and said doing so is illegal and “will constitute evidence of obstruction.” Pompeo earlier on Tuesday sternly objected to the committees’ efforts to obtain depositions from five current and former State Department officials, as the Democratic-led House looks into President Donald Trump’s request to Ukraine’s president to investigate a domestic political rival, Democratic presidential candidate Joe Biden.

Representatives Eliot Engel, chairman of the House Foreign Affairs Committee; Adam Schiff, chairman of the Intelligence Committee, and Elijah Cummings, chairman of the Oversight Committee, made their comments on Pompeo in a statement issued in response to Pompeo’s position. The three Democratic chairmen said Pompeo would be “a fact witness” in the House impeachment inquiry if reports are true that he was on the July call when Trump spoke to Ukrainian President Volodymyr Zelenskiy. “Any effort to intimidate witnesses or prevent them from talking with Congress — including State Department employees — is illegal and will constitute evidence of obstruction of the impeachment inquiry,” the statement said.

Three investigations about to be published.

• Barr Investigating The Investigators Of Russian Meddling (R.)

Barr’s inquiry concerns the origins of an investigation by the Federal Bureau of Investigation into possible ties between the Trump campaign and Russia, which was ultimately taken over by Mueller. Mueller concluded that Trump’s campaign had extensive contacts with Russians who mounted a sweeping effort to influence the outcome of the election in which Republican Trump was the surprise winner against Democrat Hillary Clinton. Mueller also revealed numerous attempts by Trump to interfere with his investigation, but did not conclude whether or not Trump should be charged with obstruction of justice. Barr and Deputy Attorney General Rod Rosenstein subsequently decided not to bring criminal charges.

Trump blasted the Mueller investigation as a politically motivated “witch hunt”, and Trump’s allies have questioned whether U.S. intelligence and law-enforcement agencies should have launched the investigation in the first place. U.S. intelligence and law enforcement agencies began examining possible communications between Trump advisers and Russia in July 2016, when the Australian government alerted U.S. officials that a Trump foreign policy adviser, George Papadopoulos, had boasted to an Australian diplomat that the Russian government had material that could be damaging to Clinton. Several months later, the FBI secured a court order to monitor Carter Page, a Trump adviser who had traveled to Russia.

[..] Durham’s probe is “broad in scope and multifaceted,” examining the activity of U.S. and foreign-government intelligence services, as well as non-governmental organizations and individuals, Assistant Attorney General Stephen Boyd told Congress in June. As part of that effort, Trump has asked foreign leaders to introduce Barr and Durham to relevant officials in their countries, Justice Department spokeswoman Kerri Kupec said on Monday.

[..] The Justice Department’s internal watchdog, Inspector General Michael Horowitz, has completed a separate investigation. It is going through the process of removing classified information before it is released to the public. That probe, launched in 2018, focuses on whether the FBI followed proper procedures when it asked the Foreign Intelligence Surveillance Court for permission to monitor Page, the Trump adviser, in 2016. Separately, former Attorney General Jeff Sessions in 2017 assigned Utah’s top federal prosecutor, John Huber, to review a wide range of issues that Republicans had complained about, including the FBI’s conduct during investigations related to Clinton. Huber has ceded some portions of his probe to Durham and he is waiting for Horowitz to finish his review.

Abenomics 2.0.

• Japan Raises National Sales Tax Despite Recession Worries (AP)

Japan’s national sales tax was raised to 10% from 8% on Tuesday, amid concerns that the long-delayed move could derail the fragile growth path of the world’s third largest economy. Government officials say ample measures have been taken to minimize the impact of the hike, which took effect Tuesday. Previous tax increases, a 2-point increase to 5% in 1997 and another to 8% in 2014, brought on recessions. Prime Minister Shinzo Abe postponed this hike twice but said it was unavoidable given rising costs for elder care and a growing national debt as the population ages and shrinks. After decades of fiscal deficits that have taken the debt to more than twice the size of the economy, Abe has promised a return to balance by 2025, but that will require the economy to continue expanding at a healthy pace.

The economy expanded at an annual pace of 1.8 percent in April-June, faster than anticipated. But slowing exports and rising prices for oil are expected to drag growth lower in coming months. The increase covers most goods and services from clothes, electronics to transportation and medical fees, but the government has sought to soften its impact with tax breaks for home and car purchases. It also kept the tax for groceries unchanged for low-income households and is providing free pre-school education to families.

“.. the longest expansion of the economy in US history..”

• US Gross National Debt Up $1.2 Trillion in Fiscal 2019 to $22.7 Trillion (WS)

The US gross national debt jumped by $110 billion on the last two business days of Fiscal Year 2019, and by a breath-taking $1.2 trillion during the entire fiscal year, after having already jumped by $1.27 trillion in Fiscal 2018, the Treasury Department reported today. This ballooned the US gross national debt to a vertigo-inducing $22.72 trillion. These beautiful trillions whipping by are a joy to behold: so much action in so little time. The flat spots in the chart below are the results of the debt-ceiling charade in Congress. When the debt ceiling is lifted, the debt spikes back to trend, and nothing changed:

During Fiscal 2019, the gross national debt increased by 5.6% and now amounts to 106.5% of current-dollar GDP, up from 105.4% at the end of Fiscal 2018. The thing to remember here is that this isn’t the Great Recession or the Financial Crisis, when over 10 million people lost their jobs and credit froze up and companies went bankrupt and tax revenues plunged while outlays soared to pay for unemployment insurance and the like. This isn’t even the Collapse of Everything, but the longest expansion of the economy in US history. Over the last four quarters, the US economy as measured by nominal GDP (not adjusted for inflation) grew by 4.0%. Over the same period, the US gross national debt grew by 5.6% (not adjusted for inflation).

Christopher Balding: “Why do none of these reports note that Chinese firms listed in the US are not currently required to abide by US accounting and auditing standards and the SEC cannot review them?”

• Major US Investors Have Billions At Risk In Chinese Stocks (R.)

Major U.S. fund managers have tens of billion of dollars at stake in some of the most popular Chinese stocks on Wall Street, exposing them to potential losses should the White House move to delist Chinese firms from U.S. exchanges. White House trade adviser Peter Navarro on Monday dismissed reports that the Trump administration was considering delisting Chinese companies from U.S. stock exchanges as “fake news,” helping Chinese stocks including JD.com and Alibaba Group Holding recover some of their declines from Friday after the reports emerged.

As Navarro’s comments reduced investor fears, the S&P/BNY Mellon China Select ADR index rose 1.1% after tumbling more than 3% on Friday. Still, the possibility of a future U.S. move to boot Chinese companies out of U.S. markets remains a topic of concern for investors. “The proposed measures would completely undermine the international ADR/GDR etc. market and would harm the US’s role as a conduit for international capital,” Jefferies equity strategist Sean Darby wrote in a client note. Leading U.S. investors across Chinese companies listed on U.S. exchanges include Blackrock, T. Rowe Price Associates and the Vanguard Group, with over $40 billion invested, according to Refinitiv data, based on fund filings.

Or for him?!

• Zuckerberg Says Warren As US President Would Be Bad For Tech (R.)

Facebook Inc Chief Executive Officer Mark Zuckerberg told employees in July that the company would “go to the mat” to defeat Democratic candidate Elizabeth Warren’s expected effort to break up the world’s largest social media company if she were elected president, according to audio of two internal company meetings published by The Verge. “If she (Warren) gets elected president, then I would bet that we will have a legal challenge and I would bet that we will win the legal challenge. And does that still suck for us? Yeah. I mean, I don’t want to have a major lawsuit against our own government,” he said, according to the leaked audio. Warren, who in March called for breaking up Amazon.com Inc, Facebook Inc and Alphabet Inc, quickly issued a retort on Twitter.

“What would really ‘suck’ is if we don’t fix a corrupt system that lets giant companies like Facebook engage in illegal anticompetitive practices, stomp on consumer privacy rights,” Warren tweeted. In a later series of tweets, Warren noted that Facebook has built more market dominance in recent years by acquiring potential competitors WhatsApp and Instagram. “More than 85% of all social networking traffic goes through sites owned or operated by Facebook,” she wrote. “They’ve got a lot of power—and face little competition or accountability. “They’ve bulldozed competition, used our private information for profit, undermined our democracy, and tilted the playing field against everyone else.”

A step too far. And then be broken up too?!

• Institutional Libra Backers Are Getting Cold Feet (CD)

Major Libra backers Visa and Mastercard are second-guessing their participation in the Facebook-led digital payments project, the Wall Street Journal reported Tuesday. Against a global regulatory blasting of the proposed cryptocurrency, the financial services pair and unnamed other companies are balking at Facebook’s call for a unified front. The Journal says that few want to boost the project publicly – leaving Facebook to defend Libra by itself. Libra has been a favorite target of world financial regulators since its announcement in June. European Central Bank members said it could destabilize the euro; China’s crypto czar called it potentially “unstoppable;” and U.S. Congressional Representatives have called for an outright freeze on its development. Now members of the Libra Association will meet on Thursday in Washington, D.C. It was not immediately clear what the meeting will be about; the members are scheduled to discuss Libra’s charter in mid-October.

Intruiging. Major cities and towns in North America replaced by major cities across the Atlantic by latitude. Montreal=Milan. New York=Naples. Land climate vs sea climate.

Debt Rattle September 27 2019

Sep 272019

September 27, 2019 Posted by Raúl Ilargi Meijer at 9:44 am Finance Tagged with: Assange, Biden, Brexit, Burisma, Chelsea Manning, Fed, healthcare, Houthis, impeachment, Iran, Reality Winner, refugees, Trump 19 Responses »

Salvador Dali Self-portrait in the studio 1919

• These Once-Secret Memos Cast Doubt On Joe Biden’s Ukraine Story (Solomon)

• Democrats Reveal the Real Purpose of the Impeachment Investigation (PCR)

• Chelsea, Reality Hope New Approval Of Whistleblowers Will Set Them Free (Onion)

• Wall Street To Dems: We’ll Sit Out, Or Back Trump, If Warren Nominated (CNBC)

• Fed Will Need To Grow Its Balance Sheet ‘Permanently’ – Morgan Stanley (CNBC)

• US Annual Health Insurance Costs Hit Record High Above $20,000 (BBG)

• Quarter Of UK Rural Businesses ‘Could Be Bankrupted By No-Deal Brexit’ (G.)

• China’s Giant $400 Billion Iran Investment Complicates US Options (F.)

• Yemen’s Houthis Are Bringing Down A Goliath (Escobar)

• Spanish Security Company Spied On Julian Assange In London For US (El Pais)

• Trump Administration Proposes Historically Low Refugee Limit (AP)

John Solomon’s account is really important in the impeachment hearings.. And everything he says is documented.

Watched quite a lot of the House hearing yesterday, and thought: this is a circus. Everyone knows Trump is guilty or not before they’ve seen anything, just depending on what party they belong to. And no, no fan of Adam Schiff.

• These Once-Secret Memos Cast Doubt On Joe Biden’s Ukraine Story (Solomon)

Former Vice President Joe Biden, now a 2020 Democratic presidential contender, has locked into a specific story about the controversy in Ukraine. He insists that, in spring 2016, he strong-armed Ukraine to fire its chief prosecutor solely because Biden believed that official was corrupt and inept, not because the Ukrainian was investigating a natural gas company, Burisma Holdings, that hired Biden’s son, Hunter, into a lucrative job. There’s just one problem. Hundreds of pages of never-released memos and documents — many from inside the American team helping Burisma to stave off its legal troubles — conflict with Biden’s narrative.

And they raise the troubling prospect that U.S. officials may have painted a false picture in Ukraine that helped ease Burisma’s legal troubles and stop prosecutors’ plans to interview Hunter Biden during the 2016 U.S. presidential election. [..] Some media outlets have reported that, at the time Joe Biden forced the firing in March 2016, there were no open investigations. Those reports are wrong. [..] the Ukraine Prosecutor General’s office still had two open inquiries in March 2016, according to the official case file provided me. [..] In a newly sworn affidavit prepared for a European court, Shokin testified that when he was fired in March 2016, he was told the reason was that Biden was unhappy about the Burisma investigation.

“The truth is that I was forced out because I was leading a wide-ranging corruption probe into Burisma Holdings, a natural gas firm active in Ukraine and Joe Biden’s son, Hunter Biden, was a member of the Board of Directors,” Shokin testified. “On several occasions President Poroshenko asked me to have a look at the case against Burisma and consider the possibility of winding down the investigative actions in respect of this company but I refused to close this investigation,” Shokin added.

“..keeping him under investigation, at least through the November election, will increasingly erode the support of both Trump and the Republican party brand..”

• Democrats Reveal the Real Purpose of the Impeachment Investigation (PCR)

The Democrats know that there is no impeachable offense. What they intend to do is to use the investigation to look into every aspect of Trump’s life and try to make dirt out of things unrelated to his talk with the Ukrainian president. This “impeachment investigation” is a political act to help their candidate win the next presidential election. Democrats themselves describe it in this way. For example, here is how Rob Kall, the director of one of the progressive Democrat websites, described the purpose of the investigation: “The idea should be to keep the impeachment going as long as possible, with new testimonies and new releases of disclosures of alleged corruption and treason on a regular basis.

“Looking at impeachment as a process for removing the president is the wrong way of thinking about it. Looking at it as a key that gives access to investigative tools is the smarter, more strategic, way of looking at it. “Ideally, it will get so bad for Trump that the Republicans will end up putting up someone else to run in the general election. “But keeping him under investigation, at least through the November election, will increasingly erode the support of both Trump and the Republican party brand, making a Democratic takeover of the Senate and the White House, and an increased control of the House even more likely.” In other words, it is a political power play.

The outcome depends on whether Americans see the impeachment investigation as another orchestrated hoax like Russiagate or whether they fall for the hoax as they iniatially did with the Russiagate investigation. The United States does not have a media. It has a propaganda ministry that helps the ruling elites control the explanations that Americans are given. Polls show that Americans have lost confidence in the media. If so, the impeachment investigation will backfire on the Democrats.

Personally, I’m very much torn between tragedy and comedy.

• Chelsea, Reality Hope New Approval Of Whistleblowers Will Set Them Free (Onion)

Following a CIA officer’s much-applauded decision to disclose evidence that President Trump urged his Ukrainian counterpart to interfere in the 2020 election, former intelligence analysts Chelsea Manning and Reality Winner expressed confidence Thursday that the nation’s newfound appreciation for whistleblowers would get them out of jail. “Now that everyone really seems to like it when wrongdoing is exposed, I’m sure it’s just a matter of time before they clear my name and let me go,” Winner said by phone from a federal prison in Texas, echoing the sentiments of Manning, who told reporters she expected not only to be released from jail but also to be allowed to return immediately to active duty in the Army.

“Americans recognize that what this anonymous whistleblower did was both courageous and patriotic, so I’m sure to be commended for releasing a report on interference in the 2016 election, right? I was ahead of my time, really. I’m not saying there will be a parade in my honor, but I sure wouldn’t be surprised. I’ll be out of here in a day or two, and then, who knows? Maybe I’ll even run for public office.” At press time, sources confirmed a chipper Edward Snowden had informed officials in the Justice Department that he was finally ready to leave Moscow and fly back home.

The differences in fund-raising amounts are scary. The DNC is going to need Tulsi just for that.

• Wall Street To Dems: We’ll Sit Out, Or Back Trump, If Warren Nominated (CNBC)

Democratic donors on Wall Street and in big business are preparing to sit out the presidential campaign fundraising cycle — or even back President Donald Trump — if Sen. Elizabeth Warren wins the party’s nomination. In recent weeks, CNBC spoke to several high-dollar Democratic donors and fundraisers in the business community and found that this opinion was becoming widely shared as Warren, an outspoken critic of big banks and corporations, gains momentum against Joe Biden in the 2020 race. “You’re in a box because you’re a Democrat and you’re thinking, ‘I want to help the party, but she’s going to hurt me, so I’m going to help President Trump,’” said a senior private equity executive, who spoke on condition of anonymity in fear of retribution by party leaders.

The executive said this Wednesday, a day after Speaker Nancy Pelosi announced that the House would begin a formal impeachment inquiry into Trump. During the campaign, Warren has put out multiple plans intended to curb the influence of Wall Street, including a wealth tax. In July, she released a proposal that would make private equity firms responsible for debts and pension obligations of companies they buy. Trump, meanwhile, has given wealthy business leaders a helping hand with a major corporate tax cut and by eliminating regulations. Warren has sworn off taking part in big money fundraisers for the 2020 presidential primary. She has also promised to not take donations from special interest groups.

She finished raising at least $19 million in the second quarter mainly through small-dollar donors. The third quarter ends Monday. Trump, has been raising hundreds of millions of dollars, putting any eventual 2020 rival in a bind as about 20 Democrats vie for their party’s nomination. Trump’s campaign and the Republican National Committee have raised over $100 million in the second quarter. A large portion of that haul came from wealthy donors who gave to their joint fundraising committee, Trump Victory. In August, the RNC raised just over $23 million and has $53 million on hand. The Democratic National Committee have struggled to keep up. The DNC finished August bringing in $7.9 million and has $7.2 million in debt.

No Greyerz yesterday, MS today. People do understand. But nobody acts.

• Fed Will Need To Grow Its Balance Sheet ‘Permanently’ – Morgan Stanley (CNBC)

The Federal Reserve’s asset purchases likely will total $315 billion over the next six months as it seeks to stabilize overnight funding markets and contain the movements of its target interest rate, according to projections from Morgan Stanley. Those permanent moves will be necessary because the current temporary purchases likely won’t be enough to stabilize the market for overnight purchase agreements, or repos, the bank said. The Fed just a month ago halted a process that saw a more than $600 billion reduction of the balance sheet, which consists mostly of Treasurys and mortgage-backed securities that it had acquired in its efforts to pull the U.S. economy out of the financial crisis.

“We maintain that these temporary repo operations will not prove to be a sufficient long-term solution to the recent funding pressure,” Morgan Stanley strategist Kelcie Gerson said in a note. “Ultimately, the Fed will need to increase the size of its balance sheet permanently.” The Morgan Stanley forecast is a bit smaller than one recently from Bank of America Merrill Lynch, which estimated balance sheet expansion at $400 billion this year. The balance sheet currently stands about $3.9 trillion, pushed by three rounds of asset purchases in a process known as quantitative easing. Starting in October 2017, the Fed started allowing some proceeds from its maturing bonds to roll off each month, with a corresponding decrease of bank reserves that has taken the total down to about $1.5 trillion, the lowest in more than eight years.

Another issue that nobody acts upon.

• US Annual Health Insurance Costs Hit Record High Above $20,000 (BBG)

The cost of family health coverage in the U.S. now tops $20,000, an annual survey of employers found, a record high that has pushed an increasing number of American workers into plans that cover less or cost more, or force them out of the insurance market entirely. “It’s as much as buying a basic economy car,” said Drew Altman, chief executive officer of the Kaiser Family Foundation, “but buying it every year.” The nonprofit health research group conducts the yearly survey of coverage that people get through work, the main source of insurance in the U.S. for people under age 65. While employers pay most of the costs of coverage, according to the survey, workers’ average contribution is now $6,000 for a family plan.

That’s just their share of upfront premiums, and doesn’t include co-payments, deductibles and other forms of cost-sharing once they need care. The seemingly inexorable rise of costs has led to deep frustration with U.S. health care, prompting questions about whether a system where coverage is tied to a job can survive. As premiums and deductibles have increased in the last two decades, the percentage of workers covered has slipped as employers dropped coverage and some workers chose not to enroll. Fewer Americans under 65 had employer coverage in 2017 than in 1999, according to a separate Kaiser Family Foundation analysis of federal data. That’s despite the fact that the U.S. economy employed 17 million more people in 2017 than in 1999.

Yeah, it’s the Guardian, and yeah, it may be a little less bad than they say, but the Tories’ lack of preparedness for what they themselves promote is nuts regardless.

• Quarter Of UK Rural Businesses ‘Could Be Bankrupted By No-Deal Brexit’ (G.)

As many as one in four rural businesses could be left facing bankruptcy in a no-deal Brexit, and the staunchly Conservative rural vote may be in doubt as a result, the head of the UK’s landowners’ group has warned on the eve of the Tory party conference. Farmers are particularly vulnerable to a no-deal Brexit because tariffs would be levied on exports, imports of cheap food could flood the market, and because decisions must be made now which will have an impact for the next year. Arable farmers are putting crops in the ground now for spring, and livestock farmers are preparing to breed sheep and other livestock for next year.

Tim Breitmeyer, president of the Country Land and Business Association, said farms and the rural businesses that rely on them were not in a position to absorb the shock of Brexit, and estimates suggested a large number would be in danger. “Agriculture is not making very much money. In many cases, they’re losing [money] without the single farm payment [subsidy]. If you have a tariff to add to your problems, if you have increased costs to add to your problems, it’s only going to make matters worse and tip some businesses over the top,” he told the Guardian. “Now I don’t know whether that’s 15% or 25% but I’m absolutely sure there will be quite a few farming businesses for which it actually just tips them into receivership.”

China was never going to let Iran fall. But now Trump’s sanctions policies drive it straight into Beijing hands: “Chinese firms will maintain the right of the first refusal to participate in any and all petrochemical projects in Iran, including the provision of technology, systems, process ingredients and personnel required to complete such projects.”

• China’s Giant $400 Billion Iran Investment Complicates US Options (F.)

Amidst historic U.S. – Iran tensions, Beijing is doubling-down on its strategic partnership with Tehran, ignoring U.S. efforts to isolate the Islamic Republic from global markets. Following an August visit by Iran Foreign Minister Mohammad Javad Zarif to Beijing, the two countries agreed to update a 25-year program signed in 2016, to include an unprecedented $400 billion of investment in the Iranian economy – sanctions be damned. The capital injection, which would focus on Iran’s oil and gas sector, would also be distributed across the country’s transportation and manufacturing infrastructure. In return, Chinese firms will maintain the right of the first refusal to participate in any and all petrochemical projects in Iran, including the provision of technology, systems, process ingredients and personnel required to complete such projects.

According to an exclusive interview with Petroleum Economist, a senior source in Iran’s petrochemical sector had this to say about the new agreement: “The central pillar of the new deal is that China will invest $280 billion developing Iran’s oil, gas and petrochemicals sectors… there will be another $120 billion investment in upgrading Iran’s transport and manufacturing infrastructure, which again can be front-loaded into the first five-year period and added to in each subsequent period should both parties agree.” This comes at a time when Washington is exerting its so-called ‘maximum pressure’ strategy against Iran, which aims to change its international behavior by bringing oil exports down to zero.

Makes me think of how Britain fought back vs Germany, and Viernam vs the US. Once your entire economy moves into self-defense mode, -almost- anything is possible.

• Yemen’s Houthis Are Bringing Down A Goliath (Escobar)

“It is clear to us that Iran bears responsibility for this attack. There is no other plausible explanation. We support ongoing investigations to establish further details.” The statement above was not written by Franz Kafka. In fact, it was written by a Kafka derivative: Brussels-based European bureaucracy. The Merkel-Macron-Johnson trio, representing Germany, France and the UK, seems to know what no “ongoing investigation” has unearthed: that Tehran was definitively responsible for the twin aerial strikes on Saudi oil installations. “There is no other plausible explanation” translates as the occultation of Yemen. Yemen only features as the pounding ground of a vicious Saudi war, de facto supported by Washington and London and conducted with US and UK weapons, which has generated a horrendous humanitarian crisis.

So Iran is the culprit, no evidence provided, end of story, even if the “investigation continues.” Hassan Ali Al-Emad, Yemeni scholar and the son of a prominent tribal leader with ascendance over ten clans, begs to differ. “From a military perspective, nobody ever took our forces in Yemen seriously. Perhaps they started understanding it when our missiles hit Aramco.” [..] “Past Yemeni governments had missiles, but after 9/11 Yemen was banned from buying weapons from Russia. But we still had 400 missiles in warehouses in South Yemen. We used 200 Scuds – the rest is still there [laughs].”

Al-Emad breaks down Houthi weaponry into three categories: the old missile stock; cannibalized missiles using different spare parts (“transformation made in Yemen”); and those with new technology that use reverse engineering. He stressed: “We accept help from everybody,” which suggests that not only Tehran and Hezbollah are pitching in. Al-Emad’s key demand is actually humanitarian: “We request that Sana’a airport be reopened for help to the Yemeni people.” And he has a message for global public opinion that the EU-3 are obviously not aware of: “Saudi is collapsing and America is embracing it in its fall.”

On the energy front, Persian Gulf energy traders that I have relied upon as trustworthy sources for two decades confirm that, contrary to Saudi Oil Minister Abdulazziz bin Salman’s spin, the damage from the Houthi attack on Abqaiq could last not only “months” but even years. As a Dubai-based trader put it: “When an Iraqi pipeline was damaged in the mid-2000s the pumps were destroyed. It takes two years to replace a pump as the backlogs are long. The Saudis, to secure their pipelines, acquired spare pumps for this reason. But they did not dream that Abqaiq could be damaged. If you build a refinery it can take three to five years if not more.

“The secret probe is the consequence of a criminal complaint filed by Assange himself, in which he accuses Morales and the company of the alleged offenses involving violations of his privacy and the secrecy of his client-attorney privileges, as well as misappropriation, bribery and money laundering.”

• Spanish Security Company Spied On Julian Assange In London For US (El Pais)

Undercover Global S. L., the Spanish defense and private security company that was charged with protecting the Ecuadorian embassy in London during the long stay there of WikiLeaks founder Julian Assange, spied on the cyberactivist for the US intelligence service. That’s according to statements and documents to which EL PAÍS have had access. David Morales, the owner of the company, supposedly handed over audio and video to the CIA of the meetings Assange held with his lawyers and collaborators. Morales is being investigated for this activity by Spain’s High Court, the Audiencia Nacional.

The judicial investigation into the director of UC Global S. L. and the activities of his company were ordered by a judge named José de la Mata, and they began weeks after EL PAÍS published videos, audios and reports that show how the company spied on the meetings that the cyberactivist held in the embassy. The secret probe is the consequence of a criminal complaint filed by Assange himself, in which he accuses Morales and the company of the alleged offenses involving violations of his privacy and the secrecy of his client-attorney privileges, as well as misappropriation, bribery and money laundering.

Morales, a former member of the military who is on leave of absence, stated both verbally and in writing to a number of his employees that, despite having been hired by the government of then-Ecuadorian President Rafael Correa, he also worked “for the Americans,” to whom he allegedly sent documents, videos and audios of the meetings that the Australian activist held in the embassy. “We are playing in another league. This is the first division,” he told his closest colleagues after attending a security fair in the US city of Las Vegas in 2015 where he supposedly made his first American contacts. Despite the fact that the Spanish firm – which is headquartered in the southern city of Jerez de la Frontera – was hired by Senain, the Ecuadorian intelligence services, Morales called on his employees several times to keep his relationship with the US intelligence services a secret.

The owner of UC Global S. L. ordered a meeting between the head of the Ecuadorian secret service, Rommy Vallejo, and Assange to be spied on, at a time when they were planning the exit of Assange from the Ecuadorian embassy using a diplomatic passport in order to take him to another country. This initiative was eventually rejected by Assange on the basis that he considered it to be “a defeat,” that would fuel conspiracy theories, according to sources close to the company consulted by this newspaper. The meeting took place on December 21, 2017 in the meeting room of the diplomatic building and was recorded both on video and audio by cameras installed by Morales’ employees.

This is absolutely nuts. You need 100,000 at the very least, or mayhem will ensue. And the US can easily absorb those numbers. There are a million people coming, minimum, each year.

• Trump Administration Proposes Historically Low Refugee Limit (AP)

The Trump administration wants to cap the number of refugees admitted into the United States to the lowest number since the resettlement program was created in 1980. A State Department proposal released Thursday would put a cap on the number of refugees at 18,000 for the fiscal year that starts Oct. 1. Of those refugee admissions spots, 5,000 would be set aside for persecuted religious minorities — an attempt to bolster President Donald Trump’s heightened focus on global religious freedom — and 1,500 would be set aside for nationals of Guatemala, Honduras and El Salvador, who are seeking asylum in the United States in far greater numbers.

Last year, the administration placed the cap at a record low of 30,000. The historically low limits have drawn protests from human rights groups as well as government officials. “To cut the number of refugees the U.S. will accept to this low of a number reflects nothing more than this administration’s attempts to further hate, division and prejudice in a country that once valued dignity, equality and fairness,” said Ryan Mace, Grassroots Advocacy and Refugee Specialist at Amnesty International USA. The group dismissed arguments that the U.S. lacks the capacity to adequately vet and settle refugees, calling this “a purely political decision.”

Whistleblowers: WikiLeaks has never revealed a source.

Debt Rattle September 26 2019

Sep 262019

September 26, 2019 Posted by Raúl Ilargi Meijer at 9:28 am Finance Tagged with: Biden, black hole, Boeing, Boris, Brexit, ECB, Hong Kong, novichok, Trump, whistleblower 12 Responses »

Paul Gauguin By the stream, autumn 1885

• House To Grill Trump Intel Chief About Whistleblower Report (R.)

• House Backs Release Of Trump Whistleblower Complaint 421-0 (R.)

• Biden Campaign Blasts Republican Request For Classified VP Documents (Pol.)

• Fury And Mistrust As The Brexit Pressure Cooker Blows Its Top (Sky)

• Financial System Disappearing into Black Hole – Egon von Greyerz (USAW)

• How Employees & Employers Get Bled by Health Insurance (WS)

• The Disaster of Negative Interest Rates (Brown)

• New Weapons for the ECB (Varoufakis)

• Boeing Settles First Lion Air Lawsuits For At Least $1.2 Million Apiece (R.)

• Beijing Vows To Retaliate After US Hong Kong Human Rights Bill Approved (SCMP)

• Salisbury Attack Novichok Bottle Was Not Recovered For 4 Months (Ind.)

It’s time for a lot of people to take a lot of very deep breaths and count to ten a million times. The UK is imploding on rhetoric, and in the US people convince themselves they see diametrically opposed things in the exact same material, much of which they‘ve never even read or watched.

There is such a thing as the future of your country and your (grand-)children that must also be considered, guys and gals. You will all have to live together.

• House To Grill Trump Intel Chief About Whistleblower Report (R.)

President Donald Trump’s top intelligence official will be grilled by U.S. lawmakers on Thursday over the administration’s handling of a whistleblower report central to an impeachment inquiry into the president. The acting director of national intelligence, Joseph Maguire, will testify to the House of Representatives Intelligence Committee after refusing to share the complaint with Congress, despite a law requiring that it be sent to lawmakers after an inspector general’s determination that it was urgent and credible. Maguire has been in his position for less than two months.

While the formal impeachment inquiry announced on Tuesday by House Speaker Nancy Pelosi is led by Democrats, some of Trump’s fellow Republicans joined them in calling on the administration to send the report to Congress. Members of the House and Senate intelligence committees were allowed to see the complaint on Wednesday. “Republicans ought not to be rushing to circle the wagons to say there’s no there there when there’s obviously lots that’s very troubling there,” Senator Ben Sasse, a Republican member of the Senate Intelligence Committee, said after reading the document.

We agree then.

• House Backs Release Of Trump Whistleblower Complaint 421-0 (R.)

The U.S. House of Representatives voted 421-0 on Wednesday for a resolution calling on President Donald Trump to release a whistleblower complaint to Congress, despite the administration letting them view the classified document at secure locations in the U.S. Capitol. Two House members voted present and 10 did not vote. The document is central to the impeachment inquiry into the Republican president announced on Tuesday by the Democratic House Speaker, Nancy Pelosi, after reports that Trump had tried to put pressure on Ukraine’s president to help smear a political rival.

The Senate passed a similar resolution by unanimous voice vote on Tuesday. Republicans joined Democrats in backing the release of the document, after many lawmakers argued that Trump’s associates were defying a law calling for whistleblower complaints to be sent to Congress if they are found to be credible.

Doesn’t seem all that far-fetched.

• Biden Campaign Blasts Republican Request For Classified VP Documents (Pol.)

The Biden campaign slammed the Republican National Committee on Tuesday night for urging former Vice President Joe Biden to release the transcripts of his calls with Ukrainian and Chinese leaders, saying it would not be legal or even physically possible for Biden to do that. “Imagine our disbelief that Republicans called for Joe Biden to break the law and release classified transcripts he doesn’t have access to or permission to release, given their track record for holding politicians who commit crimes accountable and their general ethical and moral conduct across the board,” Biden spokesman TJ Ducklo said in a statement provided exclusively to POLITICO.

On Tuesday afternoon, RNC chair Ronna McDaniel called for Biden to release the transcripts of his calls during his years as VP “while his son was conducting shady business deals in those countries.” There’s no indication that Hunter Biden did anything illegal in his business dealings in Ukraine. “With their newfound sense of transparency, will they also ask President Donald Trump to release his tax returns, something he promised to do nearly four years ago?” Ducklo added.

What kind of country will it be, whatever happens?

• Fury And Mistrust As The Brexit Pressure Cooker Blows Its Top (Sky)

Brexit has been a pressure cooker for our government, our parliament, our political parties, our MPs and for all of us too – and finally the tensions really erupted. Back in business after the Supreme Court ruled the government’s decision to suspend parliament was unlawful and therefore void, the whole place was absolutely furious from the moment Geoffrey Cox took to the dispatch box at 11.30am to the close of play nearly 12 hours later. The attorney general, the prime minister’s warm up act, he quickly set the tone. Yes this was a government which had been admonished by the Supreme Court for proroguing parliament unlawfully. But there would be no apologies, contrition or regret.

Instead the government’s top legal brain unleashed an unfettered attack on parliament, working himself into a frenzy as he raged against the “spineless” Labour frontbench and “cowardly” MPs for refusing to grant the prime minister an election. “This parliament is a disgrace,” he boomed to the jeering of opposition MPs. “This parliament is a dead parliament. It should no longer sit, It has no moral right to sit on these green benches.” He charged on: “The time is coming when even these turkeys won’t be able to prevent Christmas!” MPs raged. Labour’s Barry Sheerman shaking in anger as he accused the attorney general of having “no shame all”. “To come here with his barrister’s bluster to obsfucate the truth – a man like him, a party like this and a leader like this to talk about morals and morality. It’s a disgrace.”

With the stage set, Mr Johnson was straight into character as he arrived in the parliament, unrepentant and indignant as he tried to goad his opponents into tabling a motion of no-confidence in the government. The people versus the parliament election, Mr Johnson cast himself as the prime minister trying to deliver on the biggest popular vote in history while ‘the establishment’ – be it the parliament or the courts – block his path. The language provocative and incendiary as he sought to portray his political rivals as anti-democratic and treacherous. Parliament was “refusing to deliver on the priorities of the people” while Jeremy Corbyn and his cronies “do not trust the people. They are determined to throw out the referendum result, whatever the cost.””We will not betray the people who sent us here,” he bellowed as MPs erupted in fury.

Complaints that his inflammatory words were being cited in death threats were dismissed as “humbug”. When he told MPs that the “best way” to honour Jo Cox, who was murdered in the 2016 referendum, was to “get Brexit done”, the chamber moved past boiling point and into complete meltdown. Some MPs walked out of the chamber in protest. Others left in tears.

“The balance sheet . . . of the Fed is going to go from around $4 trillion to $40 trillion. It is going to go to $100 trillion before this is over.”

• Financial System Disappearing into Black Hole – Egon von Greyerz (USAW)

Europe is starting QE again with $20 billion a month, but that’s nothing compared to what is coming. . . . The panic that started with central banks in the summer in late July and August was, to me, the first step towards total chaos in the world that we will be seeing in the months and years to come. They (central bankers) see it clearly. They know the banking system is absolutely on the verge of collapse. They know Deutsche Bank (DB) and CommerzBank, too, are down 95%. If you show this chart to a child and ask where is that likely to go, it is likely to go to zero. DB, with their $50 trillion in derivatives, there is no chance they will survive. Of course, Germany and the ECB is panicking because that will affect the whole banking system worldwide.

This is why they have started to print money now because there is a massive liquidity problem, and that’s Germany, which is the best country in the EU from the point of economics. Then you take Italy, Spain, France and Greece and they are in a real mess. This is why the whole system is on the verge of disappearing into a black hole. . . . With the U.S., there is massive liquidity pressure there too.” The massive amount of money printing to keep the fiat system afloat is just starting. EvG contends, “This is just a practice round. This is just more money at this point. The balance sheet . . . of the Fed is going to go from around $4 trillion to $40 trillion. It is going to go to $100 trillion before this is over.

All of these bubble assets that are based on just credit and credit expansion are going to implode measured in real terms, measured in gold. I expect the stock market and the property market to lose at least 95% or more in real terms. . . . The next up cycle for gold (and silver) has started. The next phase of this market has started, and it is going to go on for a long, long time. It is going to go to levels that will be hard to believe today.

People suffer and die.

• How Employees & Employers Get Bled by Health Insurance (WS)

The annual cost of the average health insurance family plan through employers — employer and employee contributions combined – rose another 4.9% in 2019, to $20,576. This is up 255% from 20 years ago, having soared five times faster than the Consumer Price Index (+52%). Employees paid about 29% of the premium for family coverage ($6,015 annually, red portion) and employers paid about 71% ($14,561 annually, blue portion). Over the past 20 years, the employee contribution has increased by 290%. These are among the findings of the annual survey of over 2,000 companies, both small (3-199 employees) and large (200+ employees), including non-federal public employers, by the nonprofit Kaiser Family Foundation.

Employers and employees both are groaning under the relentlessly ballooning weight of health insurance costs. And the numbers are large: 153 million Americans are covered by employer sponsored health insurance. At companies with few lower-wage workers, the employee contribution for family coverage was on average $5,968 annually. But at companies with many lower-wage workers, the employee portion for family coverage was $7,047 annually. “The single biggest issue in health care for most Americans is that their health costs are growing much faster than their wages are,” KFF CEO Drew Altman said. “Costs are prohibitive when workers making $25,000 a year have to shell out $7,000 a year just for their share of family premiums.”

Many lower-wage workers cannot afford the contributions and forego the health insurance even if their companies offer it. As a result, at companies with many lower-wage workers, only 33% of the workers are covered by the employer’s health insurance, compared to 63% at the other companies. For single coverage of the employee only, the annual cost of the average health insurance premium — employer and employee contributions combined — rose 4.2% in 2019, to $7,188, with the employee paying 17% or $1,242 (up from 14% in 1999) and the employer paying 83% or $5,946 (down from 86% in 1999).

“Before the Eurozone debt crisis of 2011-12, even the European Central Bank was forbidden to buy sovereign debt.”

• The Disaster of Negative Interest Rates (Brown)

EU member governments have lost the sovereign power to issue their own money or borrow money issued by their own central banks. The EU experiment was a failed monetarist attempt to maintain a fixed money supply, as if the euro were a commodity in limited supply like gold. The central banks of member countries do not have the power to bail out their governments or their failing local banks as the Fed did for U.S. banks with massive quantitative easing after the 2008 financial crisis. Before the Eurozone debt crisis of 2011-12, even the European Central Bank was forbidden to buy sovereign debt. The rules changed after Greece and other southern European countries got into serious trouble, sending bond yields (nominal interest rates) through the roof.

But default or debt restructuring was not considered an option; and in 2016, new EU rules required a “bail in” before a government could bail out its failing banks. When a bank ran into trouble, existing stakeholders–including shareholders, junior creditors and sometimes even senior creditors and depositors with deposits in excess of the guaranteed amount of €100,000–were required to take a loss before public funds could be used. Also included in Italy were subordinated bonds that were owned not just by well-off families and other banks but by small savers who in many cases were fraudulently mis-sold the bonds as being risk-free (basically as good as deposits). The Italian government got a taste of the potential backlash when it forced losses onto the bondholders of four small banks. One victim made headlines when he hung himself and left a note blaming his bank, which had taken his entire €100,000 savings.

Making sense.

• New Weapons for the ECB (Varoufakis)

Fortunately, an effective weapon can immediately be built to all four of these standards: ECB conversion bonds. A sketch of their announcement follows: “Henceforth, whenever a eurozone government bond matures, the ECB will issue a conversion bond with a face value equivalent to the Maastricht-compliant portion of the member-state’s total public debt. The bond’s purpose is to service, at low interest rates that only the ECB can fetch, member states’ Maastricht-compliant public debt (up to 60% of GDP) – conditional on member states’ commitment to redeem the bond and afford it seniority over all other debts (presumably serviced at higher interest rates).”

To give a numerical example, if a member state’s debt-to-GDP ratio is 90%, the ECB conversion bond services €667 of each €1,000 of maturing state debt. The less the member state has exceeded its Maastricht debt limit, the larger the percentage of its public debt that will be serviced at the ultra-low ECB bond yields. Immediately, we see how this interest rate differential encourages discipline and eliminates the fear of moral hazard that the present quantitative easing program has elevated to dangerous levels. Note also that, besides minimizing moral-hazard risks, the new ECB bonds meet the other three standards. Their issuance requires no discretionary powers by the ECB as it follows directly from the existing Maastricht limits.

They would provide eurozone banks the missing safe asset they need to wean themselves off bonds issued by often-weak national governments (while creating a safe asset for foreigners to buy with their euros). Finally, ECB conversion bonds would allow interest rates in surplus countries like Germany to rebound, because the ECB would no longer need to buy German bunds as a condition for purchasing Italian bonds. [..] Technically speaking, ECB conversion bonds are the obvious replacement for the failing quantitative easing program. Only the misplaced fear of debt mutualization stands in their way.

It seems like only yesterday that they offered $120,000. Wait, that WAS yesterday.

• Boeing Settles First Lion Air Lawsuits For At Least $1.2 Million Apiece (R.)

Boeing Co has settled the first claims stemming from the crash of a Lion Air 737 MAX in Indonesia, a U.S. plaintiffs’ lawyer said, and three other sources said that families of those killed will receive at least $1.2 million apiece. Floyd Wisner of Wisner Law Firm said he has settled 11 of his 17 claims against Boeing on behalf of families who lost their relatives when a brand-new MAX crashed into the Java Sea on Oct. 29 soon after take-off, killing all 189 aboard. Boeing spokesman Gordon Johndroe declined comment. Boeing did not admit liability in its 11 settlements, Wisner said.

The claims, each representing one victim, are the first to be settled out of some 55 lawsuits against Boeing in U.S. federal court in Chicago and could set the bar for mediation talks by other Lion Air plaintiffs’ lawyers that are scheduled through next month, three people familiar with the matter said. Wisner said he could not disclose the amount of the settlements because of a confidentiality agreement with Boeing. The three people familiar with the matter said families of Lion Air victims, who were nearly all from Indonesia, are set to receive at least $1.2 million each. That amount would be for a single victim without any dependents.

“If passed, it would, among other actions, require the US to sanction Chinese officials deemed responsible for “undermining basic freedoms in Hong Kong…“

• Beijing Vows To Retaliate After US Hong Kong Human Rights Bill Approved (SCMP)

China said it would “hit back forcefully” at the United States after the US Congress officially pushed ahead with a bill to support democratic freedoms in Hong Kong by putting pressure on Chinese authorities. The Hong Kong Human Rights and Democracy Act of 2019 moved through the Senate Foreign Relations Committee and the House of Representatives Foreign Affairs Committee on Wednesday, setting the stage for votes in both chambers in the coming weeks. The bill could pave the way for diplomatic action and economic sanctions against the Hong Kong government.

If passed, it would, among other actions, require the US to sanction Chinese officials deemed responsible for “undermining basic freedoms in Hong Kong” and require the US president to review Hong Kong’s special economic status. China’s foreign ministry spokesman Geng Shuang said in a statement on Thursday that the bill was an attempt to “wantonly interfere in China’s domestic affairs” and had shown the “malicious intention of some in the US Congress to contain China’s development”.

This must be the strangest thing I’ve read in a long time. The claim is that the Novichock used in the first (Skripal) incident was found after the second incident. But we know that bottle was sealed, and couldn’t have been used on Skripal. How is this a story then to be published today?

• Salisbury Attack Novichok Bottle Was Not Recovered For 4 Months (Ind.)

Investigators took almost four months to recover the bottle which contained the deadly novichok nerve agent for almost four months after it was used in an assassination attempt in Salisbury. After it was placed on the front door of former double agent Sergei Skripal on 4 March 2018, a counterfeit Nina Ricci perfume bottle which was used to smuggle the nerve agent into the UK, was not recovered until 27 June. Police believe two Russian men, Alexander Petrov and Ruslan Boshirov, then used a secret pump to spread the nerve agent on Mr Skripal’s front door in March 2018. The former Russian military intrelligence officer and his daughter Yulia were both left seriously ill and a further six people were exposed to novichok in Salisbury, which saw large swathes of it’s town centre shut down as police investigated.

Nick Bailey, a police officer, also fell seriously ill after being exposed to the substance while investigating the case. The source of the novichok was found almost four months later, after the death of Dawn Sturgess. Ms Sturgess was given the perfume bottle as a gift by her partner Charlie Rowley, who had found it in a charity shop bin on 27 June 2018. She died from exposure to the nerve agent three days later. Mr Rowley fell seriously ill but later recovered.

He’s getting an award.

Debt Rattle September 24 2019

Sep 242019

September 24, 2019 Posted by Raúl Ilargi Meijer at 9:12 am Finance Tagged with: Assange, Biden, Brexit, Corbyn, Espionage Act, Google, interest rates, prorogation, repo, Ukraine 19 Responses »

Paul Gauguin Clovis Gauguin asleep 1884

• Why Repo Is Such a Big Deal, and Its $400 Billion Bailout So Unnerving (Fort.)

• Interest Rate Business Model is Dead (Welt)

• Discord At The Top Is Bad For The ECB (MW)

• Boris Johnson Refuses To Rule Out Suspending Parliament Again (G.)

• UK Labour Party Remains Split Over EU (CNBC)

• The Odor of Desperation (Kunstler)

• Why Is The Media Circling The Wagons To Protect Hunter Biden? (NYPost Ed.)

• Democrats Were First To Enlist Ukraine In US Elections (Solomon)

• Democrats Announce Tighter Criteria For Fifth Presidential Debate (R.)

• Google Wins Landmark Right-To-Be-Forgotten Case In Europe (BBC)

• US Government Moves To Block Alleged Drone Whistleblower’s Defense (SProof)

2 things:

1) the UK Supreme Court ruling on prorogation will come too late to include here.

2) I’m sorry that Greta Thunberg made me feel queasy yesterday. I know she means well, but it all came out very strangely in her speech. Could hardly bear to watch it. Who’s pushing her? To Davos first, and now the UN?

“..any counter-party in need of cash, and only holding collateral like Treasuries, agreed to pay the much higher going repo rates. That’s supply and demand..”

• Why Repo Is Such a Big Deal, and Its $400 Billion Bailout So Unnerving (Fort.)

Repos (short for repurchase agreements) are short-term borrowing transactions, often made overnight. Think of them as trades of cash for some kind of collateral. In a repo transaction, the borrower will sell certain securities in their possession with the agreement to buy them back the next day. If the transaction is not rolled over, then the trade has to be settled the following day, with the borrower repurchasing the collateral from the lender for slightly more than it had previously sold it for, compensating the lender with interest for taking on the risk. Large corporations and banks typically hold vast quantities of highly liquid financial assets, and so they like using these markets as a means of quick and easy financing.

In fact, there are more than $1 trillion worth of overnight repo transactions collateralized with US government debt occurring every day. Banks frequently go to these markets to fund the loans they issue, and to finance the trades they execute. That’s when it’s working smoothly. The repo market seized up last week, with median repurchase rates skyrocketing from their usual band of 2.00-2.25% to 2.46% on Monday, and 5.25% on Tuesday. Keep in mind, that’s the median rate. Some repo rates were as high as 9%, more than quadruple the Federal Reserve’s own target rate, which usually puts a cap on how high Treasury repo rates could climb.

An unlucky confluence of events, including an exceptionally large demand for cash from U.S. companies that needed to pay their corporate tax bills, sucked a lot of the available cash out of the financial markets. What happened last week was any counter-party in need of cash, and only holding collateral like Treasuries, agreed to pay the much higher going repo rates. That’s supply and demand, plain and simple, and it mirrors what happened in certain repo markets in 2007 before the housing crash and the Great Recession that followed.

This is from an article by Anne Kunz and Holger Zschäpitz for Die Welt. Mish ran a Google translate which he corrected later.

I must say, the impression is too strong that Deutsche Bank and Commerzbank are in trouble only because of Draghi. That is simply not true.

And banks are not the main victims of low rates, savers and pensioners are.

• Interest Rate Business Model is Dead (Welt)

The cash cow bank lending model is dead, buried by the European Central Bank (ECB). The coup de grace came at the recent meeting. As ECB President Mario Draghi squeezed the negative interest rate for banks even deeper. The ECB will restart its bond purchase program in November. This time, without a time limit. Thus, the monetary authorities have permanently chained the long-term interest rate at a low level and cut the profit opportunities of the financial sector to a level that isn’t sustainable. For a long time, institutions have made good money from the difference between long-term and short-term interest rates.That time is now over.

In 2016, Commerzbank employed more than 50,000 people. CEO Martin Zielke wants to close one-fifth of the 1,000 branches and even wants to part with an important source of income including his Polish subsidiary MBank. The workforce should be reduced to around 38,000 by the end of 2020. The sale of Mbank is a desperate attempt at salvation. In terms of stock market value, Deutsche Bank and Commerzbank are now loosely hanged even by more regionally active institutions from Norway and Sweden. [That is a direct translation that reads wrong but I do not know how to fix it]. Even the once proud Landesbanken is a restructuring case. This is a dangerous development.

“With the allowance, the ECB has relieved the German banks in the short term by around 500 million euros. At the same time, banks will be burdened considerably by the continuation of the low interest rates for an indefinite period, “says Peter Barkow, financial expert at Barkow Consulting. “Especially the German banks are very much dependent on income from the long-term investment of customer deposits at higher interest rates, called maturity transformation. This strategy only works very limited, “warns the expert. [The allowance refers to the ECB not charging banks a portion of the negative interest on excess reserves]

However, the corresponding earnings impact on the banks will only be delayed. “Many German banks have to find new sources of income in the medium term. In the short term, a further reduction in costs will probably be necessary, “says Barkow. For more than a hundred years, banks lived on long-term lending or investing in securities their clients entrusted to them in the short term. Historically, banks made money out of time. If time no longer has a price, because there is no more interest, nothing can be earned. Ten-year Bunds yielded around 1.5 percentage points more than two-year issues in historical terms. Currently, the difference is just under 0.2 percentage points.

Depends on Lagarde.

• Discord At The Top Is Bad For The ECB (MW)

The ECB on September 12 launched a new round of monetary easing, arguing that the decline of inflation expectations in the eurozone, triggered by the current economic slowdown, is throwing further doubt on its ability to reach its official target of “below but close to 2%”. The central bank not only resumed its asset purchases while lowering its key interest rate to minus 0.5%: It also, for the first time, declined to set a date for the end of the program, indicating only that it would be phased out once inflation is “robustly” back on the 2% track. The decision came after a heated debate on the governing council, which includes the 19 central bankers from the monetary union’s member countries and the ECB’s six-strong executive board. Even traditional doves, such as the council’s two French members, argued against the resumption of the bond-buying program.

As soon as the decision was announced, the fiercest opponents to the package went public with their frustration. German central bank President Jens Weidmann told the newspaper Bild that the package was “unnecessary.” The day before, the same newspaper had accused Draghi, dubbed “Count Draghila,” of “sucking dry” the accounts of German savers. Austrian central bank head Robert Holzmann told Bloomberg the package “may have been a mistake.” And Klaas Knot, the Dutch central bank chief, added that the package was “disproportionate.” The loose monetary policies initiated by ECB President Mario Draghi in the summer of 2012, less than a year after he took office, were always reluctantly accepted by eurozone central’s most hawkish members, even when they occasionally voted for some of the measures — such as the first round of bond-buying, back in 2014.

But it is the first time that the relative confidentiality of the governing council’s deliberations has turned into such a public airing of dirty monetary laundry.

“..Johnson also categorically ruled out any sort of deal with Nigel Farage’s Brexit party..”

• Boris Johnson Refuses To Rule Out Suspending Parliament Again (G.)

Boris Johnson has refused to rule out suspending parliament again if the supreme court rules on Tuesday that he abused his powers as prime minister in doing so earlier this month. The British prime minister, who is in New York for a UN summit, also indicated he would not feel obliged to resign if the justices rule he misled the Queen in his reasons for suspending parliament. Asked if he felt a verdict going against him would make his position untenable, Johnson said: “No. I think the reasons for wanting a Queen’s speech are extremely good.” Speaking to reporters, Johnson also categorically ruled out any sort of deal with Nigel Farage’s Brexit party in the likely imminent election, saying the Conservatives would contest every seat.

The supreme court judgment, which could have a huge impact not just on Johnson’s future but also the wider ability of the courts to take a view in political decisions made by government, is due to be announced at 10.30am, following last week’s hearing. The panel of 11 judges were tasked with hearing appeals from two separate legal challenges to Johnson’s decision to prorogue parliament – the technical term for gaps in parliamentary sessions which do not involve dissolution before an election – for five weeks from 9 September.

Corbyn’s attempts to not lose the Leave voters divide the party. Damned if you do…

• UK Labour Party Remains Split Over EU (CNBC)

Britain’s main opposition party has narrowly voted to maintain a neutral stance on the country’s most divisive topic, Brexit, after chaotic scenes at the party’s conference Monday evening prompted fresh criticism from both internal party activists and senior political opponents. Much of the party’s ordinary membership are in favor of the U.K.’s continued membership in the European Union, but Labour chief Jeremy Corbyn has long remained publicly ambivalent on the subject in a bid to hold his party and its supporters together ahead of an expected national election. But those efforts were severely tested as the party’s ruling body put forward a series of proposals on Brexit, many of which had been crafted by dozens of the local Labour constituencies over the course of several days.

Corbyn’s team had insisted that the party remain agnostic for now on whether the U.K. should leave or remain in Europe, and demanded that a final decision be made at another future meeting; at an undetermined time and after a putative election victory. [..] Those Labour activists and party officials who are concerned about those departing voters, and who also advocate remaining in the EU, had put forward a separate proposal Monday. It would have forced the party to adopt a clear policy in favor of continued EU membership, but it was marginally defeated in a vote of raised hands that even the meeting’s chairwoman acknowledged had been hard to judge with total certainty.

And every second headline says impeachment again. Am I the only one getting tired of that?

• The Odor of Desperation (Kunstler)

The swamp abides. The latest news media dumpster fire over President Trump’s phone conversation with Ukrainian president Volodymyr Zelensky is a three-way ruse. Ruse 1: deflect attention from the main issue, which is Joe Biden’s trolling for payoffs on his missions to foreign lands as vice-president, first Ukraine, where son Hunter was gifted a board of director’s chair and $50K-a-month salary with Ukrainian gas company Burisma, and then a $1.5 billion “private equity investment” to Hunter Biden’s wealth management fund from the state-owned Bank of China. Ruse 2: to deflect attention from the damage soon to be inflicted on the Deep State by the forthcoming DOJ Inspector General’s report on FISA court abuses. Ruse 3. To set in motion yet another obstruction of justice trap for Mr. Trump on the basis of false charges.

This comes at the instigation of Intelligence Community Inspector General Michael Atkinson, who was formerly senior legal counsel to John Carlin head of the National Security Division of the Department of Justice, deeply implicated in the FISA court matters of 2016 under investigation by federal prosecutor John Durham. Mr. Atkinson cited a complaint by an unnamed whistleblower who claims to have heard from a source that the President offered a quid pro quo to Ukrainian President Zelensky for reopening the Burisma case. The “whistleblower” may be Mr. Atkinson himself. Of course, gaffe-prone Joe Biden spilled the beans on video earlier this year, when he bragged about shaking down Ukraine’s then-president Petro Poroshenko over a billion-dollar loan guarantee unless he fired the prosecutor investigating Burisma, which he did. Is there any ambiguity here?

The coordination between the news media and the Deep State is impressively blatant in this new gambit, with former acting FBI director Andrew McCabe (dismissed for cause in 2018), in his new position as a CNN “contributor” (while awaiting prosecution) teeing up a new “Trump collusion” narrative with The New York Times, WashPost, and NBC marching in step. In this new age of disinformation, narratives are the political weapon of choice in the campaign to harass and disable the winner of the 2016 election. The big play of RussiaGate failed, the play of “racism” is failing, so UkraineGate is next up.

“Imagine the son was Eric Trump, and the politician Donald Trump. Would the media be dismissing it as nothing worth looking at, a “debunked” issue?”

• Why Is The Media Circling The Wagons To Protect Hunter Biden? (NYPost Ed.)

A foreign natural gas company brings a top US politician’s son onto its board, even though he has no relevant expertise, for $50,000 a month. The politician travels to that country and demands the removal of a prosecutor who’s investigating the company. That prosecutor then gets axed, and the investigation shut down. Imagine the son was Eric Trump, and the politician Donald Trump. Would the media be dismissing it as nothing worth looking at, a “debunked” issue? Yes, Ukraine’s chief prosecutor declared in May that he’d seen no evidence of wrongdoing by Joe or Hunter Biden. Of course not: Again, the investigation got closed years ago.

Yet Yuriy Lutsenko also basically told Bloomberg News he didn’t want to see any such evidence: “I do not want Ukraine to again be the subject of US presidential elections.” And Volodymyr Zelensky took over as Ukraine’s new president after that Lutsenko interview — having won on a vow to end Ukraine’s endemic corruption. Was it really so strange that President Trump pushed the reformer to reopen the probe? No, Trump hasn’t bathed himself in glory with his ham-handed pressure on Ukraine. Then again, Joe Biden’s boasts about getting that prosecutor axed also look clumsy. Then there’s Lutsenko’s claim that the Obama administration handed him a “do not prosecute” list in mid-2016, even as it was pushing Ukraine for dirt on Paul Manafort, Trump’s campaign manager.

That evidence eventually helped send Manafort to prison. What might come of a full-on Hunter Biden probe?

“..the pressure began at least as early as January 2016, when the Obama White House unexpectedly invited Ukraine’s top prosecutors to Washington..”

“..What wasn’t known at the time, Shokin told me recently, was that Ukrainian prosecutors were preparing a request to interview Hunter Biden about his activities and the monies he was receiving from Ukraine.”

• Democrats Were First To Enlist Ukraine In US Elections (Solomon)

Earlier this month, during a bipartisan meeting in Kiev, Sen. Chris Murphy (D-Conn.) delivered a pointed message to Ukraine’s new president, Volodymyr Zelensky. While choosing his words carefully, Murphy made clear — by his own account — that Ukraine currently enjoyed bipartisan support for its U.S. aid but that could be jeopardized if the new president acquiesced to requests by President Trump’s lawyer, Rudy Giuliani, to investigate past corruption allegations involving Americans, including former Vice President Joe Biden’s family. Murphy boasted after the meeting that he told the new Ukrainian leader that U.S. aid was his country’s “most important asset” and it would be viewed as election-meddling and “disastrous for long-term U.S.-Ukraine relations” to bend to the wishes of Trump and Giuliani.

“I told Zelensky that he should not insert himself or his government into American politics. I cautioned him that complying with the demands of the President’s campaign representatives to investigate a political rival of the President would gravely damage the U.S.-Ukraine relationship. There are few things that Republicans and Democrats agree on in Washington these days, and support for Ukraine is one of them,” Murphy told me today, confirming what he told Ukraine’s leader. The implied message did not require an interpreter for Zelensky to understand: Investigate the Ukraine dealings of Joe Biden and his son, Hunter, and you jeopardize Democrats’ support for future U.S. aid to Kiev.

The Murphy anecdote is a powerful reminder that, since at least 2016, Democrats repeatedly have exerted pressure on Ukraine, a key U.S. ally for buffering Russia, to meddle in U.S. politics and elections. [..] As I have reported, the pressure began at least as early as January 2016, when the Obama White House unexpectedly invited Ukraine’s top prosecutors to Washington to discuss fighting corruption in the country. The meeting, promised as training, turned out to be more of a pretext for the Obama administration to pressure Ukraine’s prosecutors to drop an investigation into the Burisma Holdings gas company that employed Hunter Biden and to look for new evidence in a then-dormant criminal case against eventual Trump campaign chairman Paul Manafort, a GOP lobbyist.

[..] Biden threatened to withhold $1 billion in crucial U.S. aid to Kiev if Poroshenko did not fire the country’s chief prosecutor. Ukraine would have been bankrupted without the aid, so Poroshenko obliged on March 29, 2016, and fired Prosecutor General Viktor Shokin.At the time, Biden was aware that Shokin’s office was investigating Burisma, the firm employing Hunter Biden, after a December 2015 New York Times article. What wasn’t known at the time, Shokin told me recently, was that Ukrainian prosecutors were preparing a request to interview Hunter Biden about his activities and the monies he was receiving from Ukraine. If such an interview became public during the middle of the 2016 election, it could have had enormous negative implications for Democrats.

Tulsi Gabbard is on the verge of making the October debate. They don’t want a repeat in November.

• Democrats Announce Tighter Criteria For Fifth Presidential Debate (R.)

The Democratic National Committee on Monday announced new criteria for the fifth presidential debate in November, requiring candidates to meet one of two polling requirements and have 165,000 unique donors. Candidates must either receive 3 percent or more support in four national or early state polls or 5 percent or more support in two polls of the states that hold early presidential nominating contests: Iowa, New Hampshire, South Carolina or Nevada. They must show a minimum of 600 unique donors per state in at least 20 U.S. states, territories or the District of Columbia, the DNC said.

The new requirements promise to further cull the large Democratic field of 19 candidates seeking to challenge Republican President Donald Trump in the November 2020 election. Former Vice President Joe Biden has led most opinion polls so far, followed by U.S. Senators Elizabeth Warren and Bernie Sanders. The sprawling field has made it difficult for lesser-known candidates to register in the minds of Democratic voters, with several polling at 1 percent or less nationally. [..] Criteria for the September and October debates required donations from at least 130,000 people and support of at least 2% in four DNC-approved polls.

Local bans on global networks?!

• Google Wins Landmark Right-To-Be-Forgotten Case In Europe (BBC)

Europe’s top court has ruled that Google does not have to apply the right to be forgotten globally. It means that firm only needs to remove references to articles and other material from its search results in Europe – and not elsewhere – after receiving an appropriate request. The ruling stems from a dispute between Google and a French privacy regulator. In 2015, CNIL ordered the firm to globally remove links to pages containing damaging or false information about a person. The following year, Google introduced a geoblocking feature that prevents European users from being able to see delisted links. But it resisted censoring search results for people in other parts of the world.

And the firm challenged a 100,000 euro fine that CNIL had tried to impose. Google had argued that the obligation could be abused by authoritarian governments trying to cover up human rights abuses were it to be applied outside of Europe. The tech firm had been supported by Microsoft, Wikipedia’s owner the Wikimedia Foundation, the non-profit Reporters Committee for Freedom of the Press, and the UK freedom of expression campaign group Article 19, among others. ECJ adviser Maciej Szpunar had also concluded that the right to be forgotten be limited to Europe in a non-binding recommendation to the court earlier this year.

An all-out attack on the Espionage Act.

• US Government Moves To Block Alleged Drone Whistleblower’s Defense (SProof)

The United States government has moved to block Daniel Hale, a former U.S. Air Force language analyst, from presenting any evidence that he had “good motives” when he allegedly disclosed documents to a reporter that exposed a targeted assassination program involving armed drones. Yet, while the U.S. government hopes to ensure Hale cannot put on a whistleblower defense during his trial, Hale’s defense attorneys have directly challenged the constitutionality of the Espionage Act, arguing it violates the First Amendment. They also assert that the government is selectively and vindictively prosecuting Hale for his alleged act of dissent.

Hale was indicted on five counts on May 9. Three of the charges allege he violated the Espionage Act. One charge alleges he disclosed “communications intelligence” without authorization. The fifth charge alleges he stole “government property.” In October 2015, The Intercept published a “cache of secret documents detailing the inner workings of the U.S. military’s assassination program in Afghanistan, Yemen, and Somalia.” The media organization said the documents were provided by a whistleblower and offered “unprecedented glimpse into [President Barack] Obama’s drone wars.” They were called “The Drone Papers.” These are the documents that the government accuses Hale of disclosing without proper authorization to the public.

[..] There were only three prosecutions under the Espionage Act for the first 75 years that were “premised” on “leaks.” However, since 2009, there have been 18 prosecutions of media sources, according to Hale’s attorneys. President Barack Obama’s administration set the record for more leak prosecutions under the Espionage Act than all previous U.S. presidents combined, and the Obama Justice Department’s novel interpretations of the Espionage Act set the stage for President Donald Trump to launch a prosecution against Hale, as well as WikiLeaks founder Julian Assange, who is the first journalist to be charged with violating this particular law.

Debt Rattle September 23 2019

Sep 232019

September 23, 2019 Posted by Raúl Ilargi Meijer at 10:59 am Finance Tagged with: Biden, Brexit, Facebook, Lavrov, NIRP, oil, recession, Saudi, Ted Cruz, Thomas Cook, Trump, Ukraine 12 Responses »

Paul Gauguin The Seine at the Pont d’Iena 1875

• Half of Americans Expect A Recession To Hit In The Next 12 Months (MW)

• Negative Interest Rates Are The Price We Pay For De-Civilization (Deist)

• British Travel Firm Thomas Cook Collapses, Stranding 600,000 Tourists (R.)

• No-Deal Brexit Will Have ‘Seismic’ Impact – European Car Industry (G.)

• Oil Set To Spike As Saudi Repairs At Abqaiq May Take “Up To Eight Months” (ZH)

• Trump Doubles Down On Call To Investigate Biden (Hill)

• Trump Hit By Election Dirt From Ukraine… Forget? (RT)

• Ted Cruz Insists Iran Wants To Nuke American Cities (RT)

• Facebook Declares It’s A ‘Publisher’, Walking Into Legal Trap (RT)

• World at a Crossroads (Sergei Lavrov)

“..21% of Republicans said a recession will likely happen within a year, while 74% of Democrats said a recession is coming..”

• Half of Americans Expect A Recession To Hit In The Next 12 Months (MW)

There are more Americans expecting an economic downturn now than there were just before the start of the Great Recession. A Gallup poll released Friday painted a gloomy picture: people are becoming increasingly pessimistic about the economy and bracing for a recession. • 49% of poll participants said a recession will likely arrive in the next 12 months. In October 2007 — two months before the Great Recession began — 40% of poll participants felt the same way. • For the third straight month, a growing share of Americans said the economy is deteriorating, going from 37% in July to 48% in September. At the same time, fewer people said it’s improving, slipping from 54% to 46%. • Republicans are rosy and Democrats are downbeat: 21% of Republicans said a recession will likely happen within a year, while 74% of Democrats said a recession is coming in that time. Independents were evenly split.

Gallup noted it conducted the poll from September 3 to 15, as the latest round of Chinese tariffs took effect, but before the latest interest rate cut. Consumer perceptions weren’t totally glum. Though 49% of people told Gallup a recession is either fairly likely or very likely, another 50% said a recession isn’t too likely, or not likely at all. After all, there’s still a record-breaking 10-year bull market and a 3.7% unemployment rate, which is around a 50-year low. Like consumers, market experts are also divided. Some brush off recession talk, but others say a downturn will happen by the end of 2020.

“If in fact negative interest rates can occur naturally, without central bank or state interventions, then economics textbooks need to be revised on the quick.”

• Negative Interest Rates Are The Price We Pay For De-Civilization (Deist)

“Calculation Error,” which Bloomberg terminals sometimes display, is an apt metaphor for the current state of central bank policy. Both Europe and Asia are now awash in $17 trillion worth of negative-yielding sovereign and corporate bonds, and Alan Greenspan suggests negative interest rates soon will arrive in the US. Despite claims by both Mr. Trump and Fed Chair Jerome Powell concerning the health of the American economy, the Fed’s Open Market Committee moved closer to negative territory today — with another quarter-point cut in the Fed Funds rate, below even a measly 2%.

Negative interest rates are just the latest front in the post-2008 era of “extraordinary” monetary policy. They represent a Hail Mary pass from central bankers to stimulate more borrowing and more debt, though there is far more global debt today than in 2007. Stimulus is the assumed goal of all economic policy, both fiscal and monetary. Demand-side stimulus is the mania bequeathed to us by Keynes, or more accurately by his followers. It is the absurd idea, that an economy prospers by consuming and borrowing instead of producing and saving. Negative interest rates turn everything we know about economics upside down.

Under what scenario would anyone lend $1,000 to receive $900 in return at some point in the future? Only when the alternative is to receive $800 back instead, due to the predicted interventions of central banks and governments. Only then would locking in a set rate of capital loss make sense. By “capital loss” I mean just that; when there is no positive interest paid, the principal itself must be consumed. There is no “market” for negative rates. The future is uncertain, and there is always counterparty risk. The borrower might abscond, or default, or declare bankruptcy. Market conditions might change during the course of the loan, driving interest rates higher to the lender’s detriment. Inflation could rise higher and faster than the agreed-upon nominal interest rate. The lender might even die prior to repayment.

Positive interest rates compensate lenders for all of this risk and uncertainty. Interest, like all economics, ultimately can be explained by human nature and human action. If in fact negative interest rates can occur naturally, without central bank or state interventions, then economics textbooks need to be revised on the quick. Every theory of interest contemplates positive interest paid on borrowed capital. Classical economists and their “Real” theory say interest represents a “return” on capital, not a penalty. Capital available for lending, like any other good, is subject to real forces of supply and demand. But nobody would “sell” their capital by giving the buyer interest payments as well, they would simply hold onto it and avoid the risk of lending.

150,000 Brits stranded, as are 140,000 Germans. 50,000 stranded in Greece alone.

• British Travel Firm Thomas Cook Collapses, Stranding 600,000 Tourists (R.)

Thomas Cook, the world’s oldest travel firm, collapsed on Monday, stranding hundreds of thousands of holidaymakers around the globe and sparking the largest peacetime repatriation effort in British history. Chief Executive Peter Fankhauser said it was a matter of profound regret that the company had gone out of business after it failed to secure a rescue package from its lenders. The UK’s Civil Aviation Authority (CAA) said Thomas Cook had now ceased trading and the regulator and government would work together to bring the more than 150,000 British customers home over the next two weeks. “I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years,” Fankhauser said in a statement released in the early hours of Monday morning.

“It is a matter of profound regret to me and the rest of the board that we were not successful.” The government and aviation regulator said that due to the scale of the situation some disruption was inevitable. “Thomas Cook has ceased trading so all Thomas Cook flights are now cancelled,” the CAA said. The demise of Thomas Cook marks the end of one of Britain’s oldest companies that started life in 1841 running local rail excursions before it survived two world wars to pioneer package holidays first in Europe and then further afield. The firm now runs hotels, resorts and airlines for 19 million people a year in 16 countries. It currently has 600,000 people abroad, forcing governments and insurance companies to coordinate a huge rescue operation.

Who are UK firms/factories going to sell their cars to?

• No-Deal Brexit Will Have ‘Seismic’ Impact – European Car Industry (G.)

The European car industry has warned of catastrophic effects of a no-deal Brexit, saying it would have a “seismic” impact on making cars in Europe. In a rare joint statement, chiefs from 23 automotive business associations across Europe joined forces to caution against a brutal exit from the bloc by Britain, where auto giants BMW, Peugeot PSA and Japan’s Nissan have factories. “Brexit is not just a British problem, we are all concerned in the European automotive industry, and even further,” said Christian Peugeot, head of French automotive industry association CCFA in the statement.

Reaping the benefits of the EU’s single market, carmakers have supply chains that criss-cross the English Channel and Britain is the destination of around 10% of vehicles assembled on the continent, according to industry data. British prime minister, Boris Johnson, has rattled nerves with his vow to leave the European Union on 31 October come what may – with or without a trade deal with Brussels. “The UK’s departure from the EU without a deal would trigger a seismic shift in trading conditions, with billions of euros of tariffs threatening to impact consumer choice and affordability on both sides of the Channel,” the joint statement said.

A chaotic Brexit would land a “severe” blow against the industry’s just-in-time supply chains that stretch across international borders and depend on zero administrative hassle, the associations warned. “The EU and UK automotive industries need frictionless trade and would be harmed significantly by additional duties and administrative burden on automotive parts and vehicles,” said Bernhard Mattes, the head of Germany’s auto lobby VDA.

Catch 22: tell the world everything will be fine in no time, but without causing prices to plummet.

• Oil Set To Spike As Saudi Repairs At Abqaiq May Take “Up To Eight Months” (ZH)

[..] the WSJ reported that it may take “up to eight month”, rather than 10 weeks company executives had previously promised, to fully restore operations at Aramco damaged Abqaiq facility, suggesting the crude oil shortfall will last far longer than originally expected. The official reason for the delay: the supply-chain is unable to respond to the Saudi needs. Specifically, Aramco is” in emergency talks with equipment makers and service providers, offering to pay premium rates for parts and repair work as it attempts a speedy recovery from missile attacks on its largest oil-processing facilities.” Following a devastating attack on its largest oil-processing facility more than a week ago, Aramco is asking contractors to name their price for patch-ups and restorations.

In recent days, company executives have bombarded contractors, including General Electric , with phone calls, faxes and emails seeking emergency assistance, according to Saudi officials and oil-services suppliers in the kingdom. “One Saudi official said costs could run in the hundreds of millions of dollars”, the WSJ reported. The unofficial, and more likely, version: Aramco is unhappy with how quickly oil prices dropped after the “Iranian attack”, and since its objective from the very beginning – especially with its IPO looming – was to get oil prices higher, and with its reputation to prevent “outside shocks” in tatters, it is now creating its own bottlenecks in restoring output.

Hinting at the second explanation is the fact that until now, Saudi officials and Aramco executives had been consistent in communicating statements aimed at reassuring oil markets that the state-owned company will recover quickly while continuing to supply customers as usual. Just yesterday, Aramco’s CEO Amin Nasser reiterated production would be back to its precrisis level by the end of the month. “Not a single shipment to our international customers has been missed or canceled as a result of the attacks,” he said.

Rightly so. Same goes for Trump, of course.

• Trump Doubles Down On Call To Investigate Biden (Hill)

President Trump on Sunday doubled down on his call for former Vice President Joe Biden’s dealings with Ukraine to be investigated amid reports of a whistleblower who is said to have raised concerns about the president’s interaction with a foreign leader who may have been Ukraine’s president. “Now the Fake News Media says I ‘pressured the Ukrainian President at least 8 times during my telephone call with him.’ This supposedly comes from a so-called ‘whistleblower’ who they say doesn’t even have a first hand account of what was said,” the president tweeted Sunday evening.

“Breaking News: The Ukrainian Government just said they weren’t pressured at all during the ‘nice’ call. Sleepy Joe Biden, on the other hand, forced a tough prosecutor out from investigating his son’s company by threat of not giving big dollars to Ukraine. That’s the real story!” he added. On Friday, multiple outlets reported that Trump had pressured Ukrainian president Volodymyr Zelensky to investigate Biden’s son Hunter Biden during a July call. Trump has not denied that he urged Ukraine to investigate Joe Biden. Earlier Sunday, speaking to reporters outside the White House, Trump insisted there was no quid pro quo involved in the talks with the Ukrainian president, calling it a “perfect conversation.”

Instead, Trump has questioned why the media is not paying more attention to the Democratic front-runner’s actions. He also criticized the whistleblower, saying the official had caused a “false alarm.”

No, I do remember.

• Trump Hit By Election Dirt From Ukraine… Forget? (RT)

Scroll back to August 2016. The Trump versus Clinton campaigns are in full swing, polls give the Democrat a win, but the Republican is not far behind. So, a pair of Ukrainian officials – a US-linked MP and the head of a freshly created anti-corruption bureau – conspire to illegally leak to the US media material about an ongoing probe into ousted President Viktor Yanukovich and his party. At least that’s how a Ukrainian court in October 2018 described what they had done. In particular, the two leaked photos of a handwritten ledger allegedly showing cash payouts by Yanukovich’s party with the name of Paul Manafort on it.

The same Manafort who was Trump’s campaign manager at the time and was later tried and sentenced for tax evasion and bank fraud as part of the Robert Mueller investigation. There are serious questions about how reliable this leaked ledger was in the first place and how extensive the conspiracy was. The two Ukrainian officials may have acted alone, or on behalf of senior figures in their government wishing to score some points with the perceived future leader in Washington. There are claims of some coordination with people in DC, or rather, the DNC. Whichever the case, one thing is clear: what the Kiev court described was a case of foreign interference in the American election.

Ted smokes the good stuff.

• Ted Cruz Insists Iran Wants To Nuke American Cities (RT)

Ted Cruz insists Tehran’s grand dream is to nuke American cities and that Iran nuclear deal is to blame for the attack on Saudi oil facilities. The argument was mocked for making no sense, but the hawkish US senator doubles down. The Texas legislator and one of the most vocal cheerleaders of Donald Trump’s “maximum pressure” campaign against Tehran went to the pages of New York Post on Friday to warn the public of an imminent danger. More international sanctions against Iran may soon be dropped under the 2015 nuclear deal, which means Tehran is drawing closer to obtaining nuclear weapons that “could incinerate American cities with a single flash of light.”

America must act now and invoke the so-called snapback mechanism outlined the nuclear deal to keep the sanctions in place and also cut Iran entirely from the global financial system, Cruz said. If you are somewhat puzzled by this line of argument, you are not alone. After all, how can Trump use the nuclear deal, from which he withdrew in the first place, to cudgel Iran more? And what Tehran may hope to win by killing millions of American civilians even if it had the capability to do it?

Just became an interesting court case.

• Facebook Declares It’s A ‘Publisher’, Walking Into Legal Trap (RT)

Facebook has invoked its free speech right as a publisher, insisting its ability to smear users as extremists is protected, but its legal immunity thus far has rested on a law which protects platforms, not publishers. Which is it? Facebook has declared it has the right, as a publisher, to exercise its own free speech and bar conservative political performance artist Laura Loomer from its platform. Even calling her a dangerous extremist is allowed under the First Amendment, because it’s merely an opinion, Facebook claims in its motion to dismiss the lawsuit filed by Loomer. But Facebook has always defined itself as a tech company providing a platform for users’ speech in the past, a definition that has come to appear increasingly ridiculous in the era of widespread politically-motivated censorship.

Now, the not-so-neutral content platform has redefined itself as a publisher equipped with a whole new set of rights, but bereft of the protections that have kept it safe from legal repercussions in the past. “Under well-established law, neither Facebook nor any other publisher can be liable for failing to publish someone else’s message,” Facebook’s motion to dismiss Loomer’s defamation suit reads, justifying its decision to ban her from the platform. It also points out that terms like “dangerous” or “promoting hate” cannot be factually verified and are thus constitutionally protected opinions for a publisher, while also claiming it never applied either term to Loomer, despite banning her from its platform under its “dangerous individuals” policy.

Lavrov’s long speech at UN this week, via Dmitry Orlov.

“Sergei Lavrov is a world-class diplomatic heavyweight and Russia’s foreign minister. As the saying goes, if you don’t deal with Lavrov, you’ll end up dealing with Sergei Shoigu, defense minister.”

• World at a Crossroads (Sergei Lavrov)

The defeat of fascism in 1945 had fundamentally affected the further course of world history and created conditions for establishing a post-war world order. The UN Charter became its bearing frame and a key source of international law to this day. The UN-centric system still preserves its sustainability and has a great degree of resilience. It actually is kind of a safety net that ensures peaceful development of mankind amid largely natural divergence of interests and rivalries among leading powers. The War-time experience of ideology-free cooperation of states with different socioeconomic and political systems is still highly relevant. It is regrettable that these obvious truths are being deliberately silenced or ignored by certain influential forces in the West.

Moreover, some have intensified attempts at privatizing the Victory, expunging from memory the Soviet Union’s role in the defeat of Nazism, condemning to oblivion the Red Army’s feat of sacrifice and liberation, forgetting the many millions of Soviet citizens who perished during the War, wiping out from history the consequences of the ruinous policy of appeasement. From this perspective, it is easy to grasp the essence of the concept of expounding the equality of the totalitarian regimes. Its purpose is not just to belittle the Soviet contribution to the Victory, but also to retrospectively strip our country of its historic role as an architect and guarantor of the post-war world order, and label it a “revisionist power” that is posing a threat to the well-being of the so-called free world.

Interpreting the past in such a manner also means that some of our partners see the establishment of a transatlantic link and the permanent implanting of the US military presence in Europe as a major achievement of the post-war system of international relations. This is definitely not the scenario the Allies had in mind while creating the United Nations.

Bruce Springsteen turns 70 today.

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