Jul 052019
 


Pablo Picasso Rest 1932

 

US Job Growth Seen Accelerating, Rate Cut Still Expected (R.)
German Industrial Orders Fell Far More Than Expected In May (R.)
Iran Demands Britain Release Oil Tanker Held In Gibraltar (AFP)
Europe Trade Channel With Iran Close To First Deal In Days (R.)
Has Trump Turned an Important Corner? (Luongo)
Mueller Report Gets Trump Tower Meeting Wrong; Promotes Browder Hoax (CN)
Vast Chinese Loans Pose Risks to Developing World (Spiegel)
The End Of Inheritance For The Middle Class (F.)
Electric Cars Will Not Solve Transport Problem (BBC)
Brazil Deforestation Increase Exceeds 88% In June (R.)
From Madagascar to Brazil, Researchers Pick Best Spots To Replant Forests (R.)
Tree Planting ‘Has Mind-Blowing Potential’ To Tackle Climate Crisis (G.)
Europe’s Treatment of Migrants Is Shameful (Spiegel)
82 Migrants Feared Dead After Boat Capsizes Off Tunisia (AlJ)

 

 

No, no fireworks, jets or tanks here.

 

The world of finance has developed a whole new logic.

US Job Growth Seen Accelerating, Rate Cut Still Expected (R.)

U.S. job growth likely rebounded in June, with wage gains expected to pick up, but that would probably not be enough to discourage the Federal Reserve from cutting interest rates this month amid growing evidence the economy is slowing. Lack of concrete progress in resolving an acrimonious trade war between the United States and China was also seen forcing the U.S. central bank’s hand, regardless of a strong employment report from the Labor Department on Friday. The Fed last month signaled it could ease monetary policy as early as July, citing low inflation as well as growing risks to the economy from an escalation in trade tensions between Washington and Beijing.

President Donald Trump and Chinese President Xi Jinping last week agreed to a trade truce and a return to talks. White House trade adviser Peter Navarro said on Tuesday talks were heading in the right direction, but it would take time to get the right deal made. The trade fight has undercut business confidence, leading to a downturn in equipment spending and manufacturing. “Given signs of slowing growth and little material progress on the trade war, a rebound in job growth would still leave the Fed on course to cut rates at the July meeting and we expect a 25 basis points cut,” said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

Nonfarm payrolls probably increased by 160,000 jobs last month after rising by only 75,000 in May, according to a Reuters survey of economists. May marked the second time this year that job gains dropped below 100,000. Reports on Wednesday showed private employers hired far fewer-than-expected workers last month and a measure of services industries employment declined.

Read more …

When Germany has a problem, the entire EU does.

German Industrial Orders Fell Far More Than Expected In May (R.)

German industrial orders fell far more than expected in May, and the Economy Ministry warned on Friday that this sector of Europe’s largest economy was likely to remain weak in the coming months. Contracts for ‘Made in Germany’ goods were down by 2.2% on the month after rising slightly in March and April, data from the Economy Ministry showed. The reading undershot the Reuters consensus forecast for a 0.1% decline. “The great order book deflation continues,” ING economist Carsten Brzeski said. Devastating new orders data just undermined any hopes for an industrial rebound.”


Other recent data have painted a gloomy picture of the sector too, with engineering orders falling and activity in the manufacturing sector contracting. In a sign that the economic slowdown is beginning to bite, a survey by the Ifo institute published on Thursday showed German manufacturers expect to make more use of “Kurzarbeit” — a short-hours facility aimed at avoiding mass lay-offs. “What misery!” VP Bank economist Thomas Gitzel said after the orders data was published. “Given the significant decline in incoming orders, industrial production will remain extremely weak in the second half of the year and that increases the risk of recession for the German economy.”

Read more …

It didn’t even dock, it just slowed down to take on provisions. In waters that EU member Spain says are Spanish.

Iran Demands Britain Release Oil Tanker Held In Gibraltar (AFP)

Iran demanded Friday that Britain immediately release an oil tanker it has detained in Gibraltar, accusing it of acting at the bidding of the United States. A senior foreign ministry official “described the UK move as unacceptable” in a meeting with British ambassador Rob Macaire, who had been summoned to hear a formal protest, the ministry said in a statement. He “called for the immediate release of the oil tanker, given that it has been seized at the request of the US, based on the information currently available”, the statement added. Authorities in Gibraltar, a British overseas territory on Spain’s southern tip at the western entrance to the Mediterranean, said they suspected the tanker was carrying crude to Syria in violation of EU sanctions.


The detention of the 330-metre (1,000-feet) Grace 1 vessel comes at a sensitive time in Iran-EU ties as the bloc mulls how to respond to Tehran announcing it is poised to breach the uranium enrichment limit it agreed to in a troubled 2015 nuclear deal. The Grace 1 tanker was halted in the early hours of Thursday by police and customs agencies in Gibraltar, aided by a detachment of British Royal Marines. The ship was detained 2.5 miles (four kilometres) south of Gibraltar in what it considers British waters, although Spain, which lays claim to the territory, says they are Spanish. It was boarded when it slowed down in a designated area used by shipping agencies to ferry goods to vessels.

Read more …

So how do we link the seized Iran tanker to the new Instex trade channel set up to bypass the US?

Europe Trade Channel With Iran Close To First Deal In Days (R.)

French Finance Minister Bruno Le Maire said on Thursday he hoped a special trade channel set up with Iran would complete a first, limited transaction in the coming days. Set up by France, Britain and Germany, Instex is a barter trade mechanism that aims to avoid direct financial transfers by offsetting balances between importers and exporters on the European side. The mechanism is aimed at making it possible for trade between European Union members and Iran to continue in the face of stiff U.S sanctions since Washington quit a 2015 nuclear accord between Tehran and world powers last year.


Those sanctions have effectively suffocated Iran’s economy by clamping down on its oil sales. “We want Instex to enter into force in a few days, and I hope that we will be able to operate in a few days. I hope the first transaction will be completed in a few days,” Le Maire told journalists at a meeting in Poland. “The first transaction will be a limited one, but this is a starting point and we expect Instex to be an efficient tool,” Le Maire added. [..] France’s foreign ministry said on Wednesday that Instex would become operational based on Iran’s “full compliance with its JCPOA (Iran deal) commitments.” “We aren’t going to press the yes button if there are doubts about its compliance,” said one European diplomat.

Read more …

Bolton in Mongolia, Tucker Carlson in Air Force One.

Has Trump Turned an Important Corner? (Luongo)

Donald Trump’s surprise visit to North Korea last week was impressive. It was a bold first step in repairing a foreign policy in tatters after more than a year of assaults by his neoconservative boobsie-twins Secretary of State Mike Pompeo and National Security Advisor John Bolton. Trump took Kim at his word who said after talks broke down thanks to Bolton and Pompeo in Hanoi that no dialogue would be possible if Bolton was involved. So, Trump sent Bolton to Mongolia. Then he went to Korea and did the one thing he had to do to begin unraveling the mess he’d gotten himself into. Last week I asked where does Trump go after his confrontation with Iran? Trump answered that question in dramatic fashion. And he deserves a lot of credit for it.

But what does this mean in the wider context? It’s a good first step but we’ve seen this game from him before, making bold moves only to be reined in by his staff. I would say that the optics of sending Bolton to Mongolia are pretty clear. Bolton’s time in the White House is nearly over. This is also a strong signal to Iran that Trump trying to back down without actually saying that. The drone incident was intended to box Trump into a path to war with Iran after the tanker attack in the Gulf of Oman two weeks prior. That was likely not the Iranians but the Saudis and/or MEK, again trying to get Trump to fly off the handle, since he’s easily manipulated into emotional acts. But he was talked out of it at the last minute, presumably by Tucker Carlson, who was with him on Air Force One when Trump went to meet Kim.

[..] A lot has changed in the past four months since the end of the Mueller investigation. And the signs are all there that Trump is feeling a lot more secure both politically and financially that would allow him to not only make bold first moves but follow through on them. Speaker Nancy Pelosi backed down on border wall funding. She’s ruled out impeachment as a bad political tactic. And she’s under fire from the hard-core Progressives in the party. This makes them weak. So, from a re-election standpoint Trump looks very secure, especially after the “I’m more woke than you” fest that was the first debate among DNC candidates. We’re looking at a mirror of 2016 with the Republicans that Trump beat. A wide and shallow pool of less than capable candidates who will all eat each other alive while he rides to re-election.

Read more …

“On the issue of Browder, the Magnitsky story and the essence of the Trump Tower meeting, the Mueller Report is a deception intended to keep the myth of collusion in the air while dismissing that any collusion took place.”

Mueller Report Gets Trump Tower Meeting Wrong; Promotes Browder Hoax (CN)

The Mueller report thus focuses instead on “efforts to prevent disclosure of information about the June 9, 2016 Trump Tower meeting between Russians and senior campaign officials.” But the report on this topic is deceptive. Ironically, as it attacks Donald Trump and top campaign officials for lying, the report itself lies about the issue the meeting addressed. It wasn’t to provide dirt on Hillary Clinton, which the Russian lawyer did not have and never produced. That was a ploy by Robert Goldstone, a British music publicist whose job is to get what his clients want, in this case, a meeting. So, recklessly, he invented the idea of Clinton dirt as a bait-and-switch to get Trump’s people to come to it. He got the lawyer the meeting for her to lobby a potentially incoming administration against the Magnitsky Act, which is why she was in the United States in the first place.

The Magnitsky Act is a 2012 U.S. law that was promoted by William Browder, an American-born British citizen and hedge fund investor, who claimed his “lawyer” Sergei Magnitsky had been imprisoned and murdered because he uncovered a scheme by Russian officials to steal $230 million from the Russian Treasury. It sanctioned Russians he said were involved or benefitted from Magnitsky’s death. It has since been used by the U.S. to put sanctions on other Russians and nationals from other countries.

The lawyer lobbying against the act, Natalia Veselnitskaya, told Trump Jr., Kushner and Manafort that Browder’s story was fake, a smokescreen to block the Russians from going after him for multi-millions in tax evasion. She argued the Magnitsky Act was built on this fraud. Manafort’s notes, included in the Mueller Report, trace what she said.

Read more …

At the heart of Belt and Road is Chinese overcapacity.

Vast Chinese Loans Pose Risks to Developing World (Spiegel)

The future rail link cuts its way through the jungles of Laos for over 400 kilometers. Soon, trains will be rolling through — over bridges, through tunnels and across dams built just for the line, which runs from the Chinese border in the north to the Laotian capital of Vientiane on the Mekong River. After five years of construction, the line is set to go into service in 2021. And the Chinese head of one of the sections has no doubt that it will be finished on time. “Our office alone employs 4,000 workers,” he says. There is also no lack of money: The Chinese government in Beijing has earmarked around 6 billion dollars for the project and has recently become both Laos’s largest creditor and most significant provider of development aid.

China, after all, isn’t just directly financing 70 percent of the new train lain, it is also building dams, schools, military hospitals and has even launched a communications satellite into space for the country. In April, Beijing loaned Laos another 40 million dollars for road construction — a credit that was provided through the multilateral Asian Infrastructure Investment Bank based in Beijing, a financial institution that China established as an alternative to Western development banks. If Hong Kong is included, China isn’t just the largest creditor in Laos, but in the entire world. Beijing’s foreign loans dominate global markets almost to the same degree as its toys, smartphones and electric scooters do.

From Kenya to Montenegro, from Ecuador to Djibouti, roads, dams and power plants are being built with billions in loans from Beijing. And all of those countries will have to pay back those loans in the years to come. With interest. The flood of capital from China helped prevent the global economy from plunging into depression following the bankruptcy of Lehman Brothers and the ensuing financial crisis. But it isn’t without controversy. For some, the billions of dollars from China are a welcome contribution to helping many underdeveloped regions in Asia and Africa expand infrastructure. For others, the loans from Beijing have forced half the world into economic and political dependency on Beijing.

Read more …

What is left of Americans’ wealth dies by a thousand cuts. A predator society.

The End Of Inheritance For The Middle Class (F.)

Increasingly, the old family homestead is not being passed down to the family when the parents die. Older parents are taking advantage of reverse mortgages to pay off credit cards and to escape poverty and debt. This reduces equity in the home and often leads to foreclosure, leaving traditional heirs with nothing but memories. Not only are reverse mortgage companies feasting upon the assets of older Americans; so too are health insurers and prescription drug companies. Moreover, seniors on a fixed income were adversely affected by President Trump’s Tax Cuts and Jobs Act, which raised the threshold on medical expense tax deductions and placed a cap of $10,000 on the itemized deductibility of state and local taxes.

America seems to be in the midst of a paradigm shift. Wealth transfer is skipping the deceased’s traditional heirs and going directly into the pockets of mortgage companies, banks, international corporations and the government. An alarming percentage of older Americans have insufficient money to cover basic necessities. According to the Institute on Assets and Social Policy, one-third of senior households have no money left over each month or are in debt after meeting essential expenses. This makes them vulnerable to the lure of reverse mortgages.

Reverse mortgages allow homeowners age 62 and above to withdraw a portion of their home’s equity to help them pay expenses in retirement. The debt usually comes due when the borrower dies and is repaid through the sale of the home. However, borrowers can face foreclosure while living if they fall behind on property taxes or homeowner’s insurance.

Read more …

That a report must be written on this is what drives me to despair.

Electric Cars Will Not Solve Transport Problem (BBC)

Car use will still need to be curbed even when all vehicles are powered by clean electricity, a report has said. It warns that electrifying cars will not address traffic jams, urban sprawl and wasted space for parking. The Centre for Research into Energy Demand Solutions (CREDS) report calls on the government to devise a strategy allowing people to have a good standard of living without needing a car. The government said it was spending £2bn to promote walking and cycling. It also says it plans to spend £50bn on improving roads. However, critics accuse the government of not having a serious plan to deal with the social problems associated with mass car ownership.


CREDS is an academic consortium of more than 80 academics across the UK. “Car use is a massive blind spot on government policy,” Prof Jillian Anable, one of the authors of the report, said. She added: “For many years ministers have adopted the principle of trying to meet demand by increasing road space. “They need to reduce demand instead.” The authors say there will always be people who depend on cars, especially in the countryside or suburbs. But, they point out that many young people in cities are choosing not to buy cars. Instead they are using public transport, walking, cycling, taking minicabs and hiring cars when they are needed.

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Imagine all the species that vanish with the trees.

Brazil Deforestation Increase Exceeds 88% In June (R.)

Deforestation in Brazil’s portion of the Amazon rainforest soared more than 88% in June compared with the same month a year ago, the second consecutive month of rising forest destruction under new President Jair Bolsonaro, who has called for development of the region. According to data from Brazil’s space research agency, deforestation in the world’s largest tropical rainforest totaled 920 square km (355 square miles). The data showing an 88.4% deforestation increase is preliminary but indicates the official annual figure, based on more detailed imaging and measured for the 12 months to the end of July, is well on track to surpass last year’s figure.


In the first 11 months, deforestation already has reached 4,565 square km (1,762 square miles), a 15 percent increase over the same period in the previous year. That is an area larger than the U.S. state of Rhode Island. Environmentalists have warned that Bolsonaro’s strong remarks calling for the development of the Amazon and criticizing the country’s environmental enforcement agency Ibama for handing out too many fines would embolden loggers and ranchers seeking to profit from deforestation. “Bolsonaro has aggravated the situation. … He has made a strong rhetorical attack,” said Paulo Barreto, a researcher at Brazilian nongovernment organization Imazon.

Read more …

“..more than half of the tropical forests in the world are gone – most of that in the last 50 years..”

From Madagascar to Brazil, Researchers Pick Best Spots To Replant Forests (R.)

Researchers have identified swathes of lost tropical rainforests as the best places to replant trees, hoping to redress some of the damage done by deforestation and limit climate change. A four-year study used high-resolution satellite imagery to pinpoint more than 100 million denuded hectares (247 million acres) – from South Sudan to Brazil and India – that would deliver good results if reforested. “Globally, more than half of the tropical forests in the world are gone – most of that in the last 50 years,” said Robin Chazdon, a professor at the University of Connecticut and co-author of the study published on Wednesday in the journal Science Advances.


“These forests provide a huge amount of functioning and services for our planet and people that have gone unappreciated,” she told the Thomson Reuters Foundation. The tropics lost 12 million hectares of tree cover in 2018, the fourth-highest annual loss since records began in 2001, according to forest monitoring service Global Forest Watch. Of greatest concern, it said, was the disappearance of 3.6 million hectares of old-growth rainforest, an area the size of Belgium, much due to fires, land-clearing for farms and mining. Environmentalists say protecting existing forests and restoring damaged ones prevents flooding, stores carbon, limits climate change and protects biodiversity.

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Strong contender for stupidest headline.

Tree Planting ‘Has Mind-Blowing Potential’ To Tackle Climate Crisis (G.)

Planting billions of trees across the world is by far the biggest and cheapest way to tackle the climate crisis, according to scientists, who have made the first calculation of how many more trees could be planted without encroaching on crop land or urban areas. As trees grow, they absorb and store the carbon dioxide emissions that are driving global heating. New research estimates that a worldwide planting programme could remove two-thirds of all the emissions that have been pumped into the atmosphere by human activities, a figure the scientists describe as “mind-blowing”. The analysis found there are 1.7bn hectares of treeless land on which 1.2tn native tree saplings would naturally grow. That area is about 11% of all land and equivalent to the size of the US and China combined.


Tropical areas could have 100% tree cover, while others would be more sparsely covered, meaning that on average about half the area would be under tree canopy. The scientists specifically excluded all fields used to grow crops and urban areas from their analysis. But they did include grazing land, on which the researchers say a few trees can also benefit sheep and cattle. “This new quantitative evaluation shows [forest] restoration isn’t just one of our climate change solutions, it is overwhelmingly the top one,” said Prof Tom Crowther at the Swiss university ETH Zürich, who led the research. “What blows my mind is the scale. I thought restoration would be in the top 10, but it is overwhelmingly more powerful than all of the other climate change solutions proposed.”

Read more …

“This year alone, just under 600 migrants have drowned in the Mediterranean, a figure that is far greater than the number who have died along the U.S.-Mexican border.”

Europe’s Treatment of Migrants Is Shameful (Spiegel)

Today’s migration policies in the European Union are even more brutal than those pursued by Donald Trump. It may be true that the Europe doesn’t have border officials separating children from their parents, but the Europeans have entered into pacts with Libyan militias that operate horrific camps where torture and rape are commonplace, and they work together with the so-called Libyan coast guard, which is little more than a militia at sea. Sea rescue operations in the Mediterranean have practically been shut down, and Italian hardliner Matteo Salvini is no longer allowing private rescue ships to come ashore in the country.

The aim of all of this is clear: The crossing to Europe should be made more dangerous as a way of discouraging migrants from attempting it. And it seems to have worked: Fewer boats are coming. But more of those who try are dying. This year alone, just under 600 migrants have drowned in the Mediterranean, a figure that is far greater than the number who have died along the U.S.-Mexican border. The horrors of the EU’s migration policies aren’t playing out in front of the cameras — they are unfolding in North Africa and on the high seas. There was one exception last week: The captain of a ship with the German rescue organization Sea Watch, Carola Rackete, steered her ship to Lampedusa because people on board had already spent two weeks crammed together on deck and she felt the situation was no longer tenable. The captain was promptly arrested upon the vessel’s arrival in Italy. She was released by an Italian court on Tuesday.

Despite the suffering, the situation in the Mediterranean Sea is quite convenient for countries in northern Europe, while Italian Interior Minister Salvini is playing the role of brutal doorman and scapegoat. The numbers of refugees are stable, but the status quo also means that the issue of migration isn’t being solved. And meanwhile, the EU is selling its soul.

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Time to normalize Libya.

82 Migrants Feared Dead After Boat Capsizes Off Tunisia (AlJ)

A boat carrying at least 86 refugees and migrants has capsized off the coast of Tunisia with most feared drowned. Some of the four initial survivors told the Tunisian coastguard on Thursday the boat sank off the town of Zarzis, Tunisian Red Crescent official Mongi Slim told Reuters news agency. Tunisian fishermen came across the sinking boat and were able to pull four survivors out on Wednesday night, but could not find any of the other passengers, said Lorena Lando, head of the International Organization for Migration (IOM) in Tunisia.


Eighty-two people remain missing in the incident, which comes a day after a deadly air attack on a Libyan detention centre killed at least 44 migrants. Al Jazeera’s Sarah Khairat, reporting from a refugee camp in Zarzis where the survivors were brought, said the vessel was heading from the west of Libya to Europe when it capsized. The four survivors were all men – three from Mali and one from the Ivory Coast. The Ivory Coast national later died and two of the others are in hospital. Slim told dpa news agency the boat set sail from Libya on Monday. Earlier this week, another boat from Libya made it to the Tunisian port of Sfax with 65 people on board.

Read more …

 

Europe c.1320

 

 

 

 

Jun 122019
 
 June 12, 2019  Posted by at 9:31 am Finance Tagged with: , , , , , , , ,  


Pablo Picasso Three apples 1924

 

Who Will Pay For The News? (R.)
The FBI Tragedy: Elites Above The Law (Hanson)
Sometimes Things Turn (Kunstler)
Jon Stewart Assails Congress For Ignoring 9/11 First Responders Fund (R.)
The Countries with the Most Monstrous Corporate Debt Pileups (WS)
China’s Loans To Other Countries Are Causing ‘Hidden’ Debt (CNBC)
Protests Against China Extradition Bill Paralyse Hong Kong (AFP)
Hong Kong Puts Off Debate On Extradition Bill Amid Mammoth Protests (NBC)
UK Accused Of ‘Silently Eroding’ EU Pesticide Rules In Brexit Laws (G.)
Outgoing UK Diplomat Slams ‘Chaotic Politics’ And Brexit ‘Shambles’ (Pol.)
Leaked Documents Reveal Russian Effort To Exert Influence In Africa (G.)
From Bears To Hippos: The Expert Guide To Surviving Killer Beasts (G.)

 

 

We wonder.

Who Will Pay For The News? (R.)

The Reuters Institute for the Study of Journalism said in its annual Digital News Report that most people would not pay for online news and that there had been only a small increase in the proportion of people willing to do so in the last six years. Even among those who do pay, there is “subscription fatigue” – many are tired of being asked to pay for so many different subscriptions. Many will opt for films or music rather than pay for news. So some media companies will fail. “There is no sign that the majority of people are about to pay for online news, although many recognize that information on the internet is often overwhelming and confusing,” said Nic Newman, a senior research associate at the Reuters Institute.


“Some of the biggest brands have already shown they are able to attract a large number of paying subscribers, but the road ahead will be more challenging for other publishers,” he added. While many news organizations add paywalls and some see increases in digital subscriptions, there has been little change in the proportion of people paying for online news, apart from the “Trump bump” rise in the United States in 2016/2017. In the United States, those paying for news online were likely to have a university degree and be wealthy: The New York Times, Wall Street Journal and Washington Post did well on digital. Still, almost 40 percent of new digital subscriptions at the New York Times are for crosswords and cooking, the Reuters Institute said, citing an article by Vox.

Read more …

Excellent. Don’t miss.

The FBI Tragedy: Elites Above The Law (Hanson)

One of the media and beltway orthodoxies we constantly hear is that just a few bad apples under James Comey at the FBI explain why so many FBI elites have been fired, resigned, reassigned, demoted, or retired — or just left for unexplained reasons. The list is long and includes director James Comey himself, deputy director Andrew McCabe, counterintelligence agent Peter Strzok, attorney Lisa Page, chief of staff James Rybicki, general counsel James Baker, assistant director for public affairs Mike Kortan, Comey’s special assistant Josh Campbell, executive assistant director James Turgal, assistant director for office of congressional affairs Greg Bower, executive assistant director Michael Steinbach, and executive assistant director John Giacalone. In short, in about every growing scandal of the past two years — FISA, illegal leaking, spying on a presidential candidate, lying under oath, obstructing justice — someone in the FBI is involved.

We are told, however, that the FBI’s culture and institutions are exempt from the widespread wrongdoing at the top. Such caution is a fine and fitting thing, given the FBI’s more than a century of public service. Nonetheless, many of those caught up in the controversies over the Russian-collusion hoax were not recent career appointees. Rather, many came up through the ranks of the FBI. And that raises the question, for example, of where exactly Peter Strzok (22 years in the FBI) learned that he had a right to interfere in a U.S. election to damage a candidate that he opposed. And why would an Andrew McCabe (over 21 years in the FBI) think he had the duty to formulate an “insurance policy” to take out a presidential candidate? Or why would he even consider overseeing an FBI investigation of Hillary Clinton’s improper use of emails when his wife had been a recent recipient of Clinton-related PAC money?

And why would McCabe contemplate leaking confidential FBI information to the press or even dream of setting up some sort of operation to remove a sitting president under the 25th Amendment? And how did someone like the old FBI vet Peter Strozk ever end up at the center of the entire mess — opening up the snooping on the Trump campaign while hiding that fact and while briefing the candidate on Russian interference in the election, interviewing Michael Flynn, preening as a top FBI investigator for Robert Mueller’s dream team, right-hand man of “Andy” McCabe, convincing Comey to change the wording of his writ in the Clinton-email-scandal investigation, softball coddling of Huma Abedin and Cheryl Mills, instrumental in the Papadopoulos investigation con — all the while conducting an affair with fellow FBI investigator and attorney Lisa Page and bragging about his assurance that the supposedly odious Trump would be prevented from being elected.

[..] Think what Mueller’s precedent of not-not-guilty would do to the American criminal-justice system, as zealous prosecutors might fish for just enough dirt on a suspect to ruin his reputation, but not find enough for an indictment, thereby exonerating their own prosecutorial failure by defaming a “guilty until proven innocent” suspect.

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“Then somebody splattered John F. Kennedy’s brains all over Dealey Plaza in Dallas, and everything changed again.”

Sometimes Things Turn (Kunstler)

A February night in 1924, in a Manhattan concert hall owned by the Aeolian piano company… the wailing, warped, and flatted clarinet glissando that opens George Gershwin’s Rhapsody in Blue announced the 20th century’s self-recognition that something new was up in the world, and especially in the USA. The composer tried to represent the stupendous energy of the maturing industrial culture in a symphonic cacophony with a core of the deepest tenderness — capturing all the wonder and grace of the moment. For America, everything was on the move. Love and power were in the air. The idea that this was the American century stuck. The 1920s were a kind of hormonal rush of wonders and amazements.

Radio, movies, airplanes, giant industries, electric power in farm houses, the dizzying rush of progress that welled up into a dangerous wave that broke over the world in economic depression, and then war in 1939 — by which time George Gershwin was gone at 38. America performed splendidly in World War Two, rescuing Europe and Asia from manifest evil. The nation found itself the fully mature leader of the free world, with daunting responsibilities in the Atomic Age, filled with confidence, but tinged with an understandable paranoia in the nervous peace of the 1950s. This was the time of my childhood, along with my fellow travelers, the Baby Boomers. What a time to come into this world!

For a while, the USA luxuriated in power and stability. I sang the Davy Crockett theme song from the Disney TV show, and wore a coonskin hat, and lived in a home where dad left for work in a business suit, and all was well in the world. To me and my childhood friends, the mindboggling horrors of the recent war were reduced to comic books and plastic soldiers in the sandbox. Everything else in America seemed to work as advertised. We built a lot of stuff and saw the USA in our Chevrolet. President Ike bossed around Britain’s PM Anthony Eden. The Yankees bossed around the major leagues. Hardly anyone knew what the Federal Reserve did, or even what it was. Elvis was in the Army, babysitting the defeated Germans. Then somebody splattered John F. Kennedy’s brains all over Dealey Plaza in Dallas, and everything changed again.

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They just didn’t show up.

Jon Stewart Assails Congress For Ignoring 9/11 First Responders Fund (R.)

Jon Stewart, the popular former host of the late-night comedy program The Daily Show, criticized members of Congress for not attending a hearing on Tuesday on renewing funding for a program that provides health care to first responders who were sickened responding to the Sept. 11 attacks. “Sick and dying, they brought themselves down here to speak and no one,” Stewart said, pointing to a mostly empty dais. “Shameful, it’s an embarrassment to the country and a stain on this institution. You should be ashamed of yourselves for those who aren’t here but you won’t be because accountability doesn’t appear to be something that occurs in this chamber.”


Stewart was testifying before the Judiciary Committee’s Subcommittee on the Constitution, Civil Rights and Civil Liberties about a renewal of the 9/11 first responders health care fund. Most of the panel’s 14 members were not in attendance. “Where are they? It would be one thing if their callous indifference and rank hypocrisy was benign, but it’s not,” Stewart said. “Their indifference cost these men and women their most valuable commodity, time, one thing they’re running out of.” The fund, originally approved for five years in 2010, provides medical treatment for emergency responders sickened by toxic dust inhaled at the World Trade Center site in New York in the days following the attack.

Read more …

China may be the worst, but Wolf Richter has a long list of graphs, and just about every country has a much worse corporate debt to GDP ratio than the US has.

The Countries with the Most Monstrous Corporate Debt Pileups (WS)

US “nonfinancial” corporate debt – this excludes debt by banks and by businesses that are not incorporated – rose to a record $15.2 trillion in the fourth quarter, according to data released by the Bank for International Settlements last week. To show how much of a burden this debt is, how it compares to other countries, and to eliminate the effects of inflation, the BIS also expresses this debt as a percent of nominal GDP. Given the growth of GDP in Q4, the ratio of corporate debt to GDP, at 74.4%, was unchanged from the upwardly revised Q3, and was down a tad from the record in Q2 of 74.9%. The prior record of US corporate debt had been set in Q4 2008, at $10.7 trillion. Corporate debt is high enough to be featured in the Fed’s Financial Stability Report at the top of the list of factors that might trigger the next financial crisis.


To compare the burden of debt levels from country to country, the BIS uses a country’s corporate debt as percent of nominal local-currency GDP. By this measure, and compared to all the debt sinners out there, the US is nevertheless only in a lowly 24th place.[..] China, a smaller economy than the US economy, has by far more nonfinancial corporate debt: In US dollar terms, corporate debt in China hit a record of $21.1 trillion in Q1 2018, by far the most of any country. But since then, Chinese companies have been deleveraging under the orders from the central government. Deleveraging takes many forms in China, including defaults, state-mandated loan-to-equity swaps by Chinese state-owned banks, and bailouts by the central government, which includes the PBOC. In Q4, 2018, China’s nonfinancial corporate debt (red line) was $19.8 trillion, with efforts to deleverage in Q4 having taken a backseat to efforts to boost the economy:

Among the major economies, China’s corporate-debt-to-GDP ratio is in a realm of its own. But there are some small economies with special tax laws and corporate tax-haven status that US, European, or Chinese corporations find attractive – and they have even higher corporate-debt-to-GDP ratios than China (we’ll get to those in a moment). China’s efforts to deleverage its corporate sector, and the growth in its official GDP, have been reducing the corporate debt-to-GDP ratio from a peak of a blistering 162.6% in Q1 2016 to 151.6% in Q4 2018, still about twice the US ratio. In this chart and all charts below, the US debt-to-GDP ratio is added as a red line for comparative purposes:

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Belt and Road. Exporting overcapacity and overindebtedness. See the graphs above.

China’s Loans To Other Countries Are Causing ‘Hidden’ Debt (CNBC)

China’s lending to other countries, often shrouded in secrecy, is thought to be higher than the amounts that are officially tracked, resulting in much “hidden debt.” That growing debt problem could spark a worse-than-expected slowdown, among other problems, experts warn. The lack of transparency would also affect investors who are considering bonds issued by those countries, or organizations such as the International Monetary Fund (IMF) which are helping those countries with their debts, according to Carmen Reinhart, a professor at the Kennedy School of Government at Harvard University.

Speaking at the Nomura Investment Forum in Singapore late last month, she said: “China’s rise as a global creditor has also meant that there are a lot of hidden debts. That is, countries that had borrowed from China but this borrowing is not reported by the IMF, by the World Bank. ” “So there is a tendency to think these countries had lower debt levels than what they actually have,” she concluded. That would hinder the IMF or the World Bank in doing their work on debt sustainability analysis, she said. That effort includes analyzing countries’ debt burdens, and coming up with recommendations for a borrowing strategy that limits the risk of debt distress.

“From the vantage point of surveillance, this means that the IMF, if they’re doing debt sustainability for example for Pakistan, unless they know how much Pakistan owes China, they are doing that sustainability exercise blindfolded, ” Reinhart said. For investors, the limited information they have hinders them in making investment decisions about bonds issued by those countries if they don’t know how much is actually owed to China already, she added. That could lead to them underestimating the risk of lending money to those countries through bonds.

[..] China has been criticized for saddling many countries with debt through its Belt and Road Initiative — a mammoth infrastructure investment plan to build rail, road, sea and other routes stretching from China to Central Asia, Africa and Europe. Chinese financial institutions have provided more than $440 billion in funding for Belt and Road projects, People’s Bank of China Governor Yi Gang said during a talk at the second Belt and Road Forum in Beijing early last month.

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Going for the financial district.

Protests Against China Extradition Bill Paralyse Hong Kong (AFP)

Tens of thousands of protesters paralysed central Hong Kong on Wednesday, blocking major roads in a defiant show of strength against government plans to allow extraditions to China. Black-clad demonstrators, most of them young people and students, surrounded government offices, bringing traffic to a standstill as they called on authorities to scrap the Beijing-backed plan. Rows of riot police were far outnumbered by protesters — many of whom wore face masks, helmets or goggles — just hours ahead of a scheduled debate in the city’s legislature. By late morning, with crowds continuing to swell, officials in the Legislative Council (Legco) said they would delay the second reading of the bill “to a later date”.

In scenes echoing the Occupy movement in 2014 that shut down swathes of the city for months, people flooded major roads and junctions in the heart of the city, dragging barricades onto highways and tying them together. Others plucked loose bricks from pavements. Some protesters deliberately stopped their cars in the middle of one key artery and jumped out, blocking the road, RTHK reported. Police used water cannons and pepper spray on protesters outside the Legco building and held up signs warning demonstrators they were prepared to use force.

Organisers of a gigantic march on Sunday said more than a million people turned out to voice their objections to the proposed law, which would allow Hong Kong to send suspects to other jurisdictions around the world — including China. But the record numbers have failed to sway pro-Beijing chief executive Carrie Lam, who has rejected calls to withdraw the bill. Many opponents are fearful the law would entangle people in the mainland’s opaque courts, leaving them vulnerable to a justice system seen as acting at the behest of the Chinese Communist Party. More than 100 Hong Kong businesses said they would close Wednesday in a sign of solidarity with the protesters, and the city’s major student unions announced they would boycott classes to attend the rallies.

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“Backers say the proposed extradition law is needed to stop Hong Kong from becoming a haven for fugitives….”

Hong Kong Puts Off Debate On Extradition Bill Amid Mammoth Protests (NBC)

Hong Kong’s legislature put off a debate on a bill that would allow extraditions to mainland China after thousands of demonstrators dressed in black swarmed the area surrounding the central government complex on Wednesday. As demonstrators used police barriers, street signs and trash barrels to block off Harcourt Road, the government said that the session would be “changed to a later time to be determined” by the head of the Legislative Council, which is controlled by a pro-Beijing majority. The rally came three days after as many as 1 million people took to the streets.


Protesters had mixed reactions to news of the postponement, but remained steadfast to their cause standing under umbrellas and continuing to block potential traffic. “I would describe it as a small victory,” said Ramon Yuen, a member of a local district council representing the Democratic Party. “There are many possibilities … but we want the government to withdraw the amendment,” Yuen said. “No decision has been made to do that, and we do not see any good gestures that they will listen to Hong Kong people’s voices.” Cyrus Lee, 28, who was taking part in the demonstrations, echoed Yuen’s sentiment, telling NBC News he “can’t tell if it is a good sign or not because you don’t know what they will do next.”

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“The EU provides up to 80% of the UK’s environmental laws..”

The BIG Brexit issue: the country is completely unprepared to stand on its own.

UK Accused Of ‘Silently Eroding’ EU Pesticide Rules In Brexit Laws (G.)

The UK has been accused of “silently eroding” key environmental and human health protections in the Brexit-inspired rush to convert thousands of pages of European Union pesticide policy into British law. Despite government claims the process would be little more than a technical exercise, analysis by the University of Sussex’s UK Trade Policy Observatory (UKTPO) has uncovered significant departures from EU regulations, including the removal of a blanket ban on hormone-disrupting chemicals, which are known to cause adverse health effects such as cancer, birth defects and immune disorders. The UK legislation removes the EU system of checks and balances to give a handful of ministers the power to create, amend and revoke pesticide legislation.

It also appears to weaken the existing “precautionary principle” approach, which requires scientific evidence from an independent body that a pesticide is safe to use. Instead, UK ministers are given the option to obtain and consider such evidence at their own discretion. The changes could lead to the widespread use in the UK of harmful and carcinogenic pesticides, the researchers warn. But because the laws are being drawn up so quickly and at such a high volume, there has been little scrutiny of the process, said Emily Lydgate, a UKTPO fellow and senior lecturer at the university. “The creation of over 10,000 pages of new legislation, which effectively convert EU law into UK rulebooks, is one of the most intensive and significant efforts that the government has made to prepare for Brexit,” she said.

The EU provides up to 80% of the UK’s environmental laws, which include regulations on pesticides, landfills, recycling and climate heating. Under the new regulations, however, power to make, amend and revoke pesticide legislation will be devolved to each of the national territories and consolidated to a secretary of state in England, relevant ministers in Scotland and Wales, and the competent authority in Northern Ireland.

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Any -positive- reputation the UK still had is gone.

Outgoing UK Diplomat Slams ‘Chaotic Politics’ And Brexit ‘Shambles’ (Pol.)

The outgoing British high commissioner to Singapore has warned that the Asian city-state’s leaders are “baffled by the U.K.’s chaotic politics” and that Brexit is doing lasting damage to the U.K.’s reputation. In a devastating assessment of the damage Brexit is doing to the U.K.’s global reputation, Scott Wightman, one of the country’s most senior diplomats, said major investors told him the balance of future investment in Europe “will inevitably be weighted more towards Germany and France,” with post-referendum political risk now their “principle consideration.” His comments also cast doubt on the U.K.’s Global Britain strategy aimed at averting the economic damage of Brexit by using the country’s network of influence and trade links around the world.

In a confidential Foreign and Commonwealth Office diplomatic telegram, seen by POLITICO, Wightman, who has been in the job since 2015 but posted his last tweet as British high commissioner on Tuesday, said the Singapore-U.K. Partnership for the Future, an initiative to improve ties that was launched by Foreign Secretary Jeremy Hunt in January, was being used in the “classic manner of the illusionist.” “Like posts across the network and departments in the U.K., we’re performing minor miracles for U.K. interests faced with the utter political shambles of Brexit,” he said. Singaporean ministers are “mystified as to how our political leaders allowed things to get to this pass,” he added.

[..] Wightman also likened the damage to Britain’s reputation in the last three years to the battle known as the Fall of Singapore in 1942. He said the battle showed the “complacency and arrogance of colonial leadership.” “It transformed their view of British imperialism,” he added. “Things were never the same again. The last three years have done the same for Singaporeans’ view of contemporary Britain. The nation they admired for stability, common sense, tolerance and realism grounded in fact, they see beset by division, obsessed with ideology, careless of the truth, its leaders apparently determined to keep on digging. “I fear many around the world share their view,” he said.

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Luke Harding’s BS.

Leaked Documents Reveal Russian Effort To Exert Influence In Africa (G.)

Russia is seeking to bolster its presence in at least 13 countries across Africa by building relations with existing rulers, striking military deals, and grooming a new generation of “leaders” and undercover “agents”, leaked documents reveal. The mission to increase Russian influence on the continent is being led by Yevgeny Prigozhin, a businessman based in St Petersburg who is a close ally of the Russian president, Vladimir Putin. One aim is to “strong-arm” the US and the former colonial powers the UK and France out of the region. Another is to see off “pro-western” uprisings, the documents say.

In 2018 the US special counsel Robert Mueller indicted Prigozhin, who is known as “Putin’s chef” because of his Kremlin catering contracts. According to Mueller, his troll factory ran an extensive social media campaign in 2016 to help elect Donald Trump. The Wagner group – a private military contractor linked to Prigozhin – has supplied mercenaries to fight in Ukraine and Syria. The documents show the scale of Prigozhin-linked recent operations in Africa, and Moscow’s ambition to turn the region into a strategic hub. Multiple firms linked to the oligarch, including Wagner, are known by employees as the “Company”. Its activities are coordinated with senior officials inside Russia’s foreign and defence ministries, the documents suggest. Putin showed little interest in Africa in the 2000s.

But western sanctions imposed in 2014 over the annexation of Crimea have driven Moscow to seek new geopolitical friends and business opportunities. Russia has a military presence and peacekeeping mission in Central African Republic. CAR is described as “strategically important” and a “buffer zone between the Muslim north and Christian south”. It allows Moscow to expand “across the continent”, and Russian companies to strike lucrative mineral deals, the documents say.

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How stupid can one get?

“Former soldier and explorer Levison Wood runs through how to endure or avoid confrontation with some of nature’s most dangerous animals.”

I’ll make sure to avoid Levison Wood.

From Bears To Hippos: The Expert Guide To Surviving Killer Beasts (G.)

When Andi Bauer, a German student hiking in Romania, was attacked by a bear, his girlfriend Lara Booth yelled “punch it in the eye!” (Lara is British, obviously). He did, the bear stopped attacking and Andi was helicoptered to hospital where rods were screwed into his broken leg. He survived, but was punching back the right thing to do? “If you’re being mauled by a bear, you’ve got to do what you’ve got to do, to escape and survive,” says Levison Wood. A former soldier, explorer and writer (his book for kids, Incredible Journeys, is published this week), Wood once had an encounter in a car park in Yosemite when a bear smashed into the adjacent empty car to get food. “We woke up and made a lot of noise, as bears do try to avoid humans. But each animal is different; you’ve got to know your stuff.” Here’s his guide to fighting off some of nature’s most-feared beasts.


[..] Wood knows some stuff about crocodiles, having avoided them while walking the length of the Nile. And that is his advice: avoid them. [..] When Wood was chased by a hippo, he scrambled up a hill. “They’re not good with hills, thankfully.” [..] “Most of the animals we’ve spoken about are critically endangered. While the fear is bred into us, remember that they’re the ones that are endangered, we generally come off better than they do.” Yes, Bauer is OK. But what about the poor bear wandering the Carpathian mountains with a sore head?

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Sep 032018
 
 September 3, 2018  Posted by at 8:16 am Finance Tagged with: , , , , , , , , , , , ,  


Vincent van Gogh Courtyard of the hospital in Arles 1889

 

China’s ‘Silk Road’ Project Runs Into Debt Jam (AFP)
Should Africa Be Wary Of Chinese Debt? (BBC)
China’s Xi Says No Strings Attached To Funds For Africa (R.)
Anatomy Of A Fusion Smear (WSJ)
No-Deal Brexit: Study Warns Of Severe Short-Term Impact On UK (G.)
Boris Johnson Launches Fresh Attack On May’s Brexit Plans (G.)
Half The Staff Leaves UK’s Brexit Department (Ind.)
Britain Loses Medicines Contracts As EU Body Anticipates Brexit (G.)
Emerging Markets Haunt Spanish Banks (DQ)
Capitalism Is Beyond Saving, and America Is Living Proof (TD)

 

 

I’ve been saying for a long time that the BRI (Belt and Road) is China’s attempt at exporting its overcapacity. They make poor countries borrow billions, which these can’t pay back. And then… Only now do other parties wake up to that. And Xi is trying to do some damage control.

China’s ‘Silk Road’ Project Runs Into Debt Jam (AFP)

China’s massive and expanding “Belt and Road” trade infrastructure project is running into speed bumps as some countries begin to grumble about being buried under Chinese debt. First announced in 2013 by President Xi Jinping, the initiative also known as the “new Silk Road” envisions the construction of railways, roads and ports across the globe, with Beijing providing billions of dollars in loans to many countries. Five years on, Xi has found himself defending his treasured idea as concerns grow that China is setting up debt traps in countries which may lack the means to pay back the Asian giant. “It is not a China club,” Xi said in a speech on Monday to mark the project’s anniversary, describing Belt and Road as an “open and inclusive” project.

Xi said China’s trade with Belt and Road countries had exceeded $5 trillion, with outward direct investment surpassing $60 billion. But some are starting to wonder if it is worth the cost. During a visit to Beijing in August, Malaysia’s Prime Minister Mahathir Mohamad said his country would shelve three China-backed projects, including a $20 billion railway. The party of Pakistan’s new prime minister, Imran Khan, has vowed more transparency amid fears about the country’s ability to repay Chinese loans related to the multi-billion-dollar China-Pakistan Economic Corridor. Meanwhile the exiled leader of the opposition in the Maldives, Mohamed Nasheed, has said China’s actions in the Indian Ocean archipelago amounted to a “land grab” and “colonialism”, with 80 percent of its debt held by Beijing.

Sri Lanka has already paid a heavy price for being highly indebted to China. Last year, the island nation had to grant a 99-year lease on a strategic port to Beijing over its inability to repay loans for the $1.4-billion project.

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“This debt acquired from China comes with huge business for Chinese companies, particularly construction companies that have turned the whole of Africa into a construction site..”

Should Africa Be Wary Of Chinese Debt? (BBC)

African countries have shown a healthy appetite for Chinese loans but some experts now worry that the continent is gorging on debt, and could soon choke. The Entebbe-Kampala Expressway is still something of a tourist attraction for Ugandans, nearly three months after it opened. The 51km (31 mile), four-lane highway that connects the country’s capital to the Entebbe International Airport was built by a Chinese company using a $476m (£366m) loan from the China Exim Bank. It has cut what was a torturous two-hour journey through some of Africa’s worst traffic into a scenic 45-minute drive into the East Africa nation’s capital. Uganda has taken $3bn of Chinese loans as part of a wider trend that Kampala-based economist Ramathan Ggoobi calls its “unrivalled willingness to avail unconditional capital to Africa”.

“This debt acquired from China comes with huge business for Chinese companies, particularly construction companies that have turned the whole of Africa into a construction site for rails, roads, electricity dams, stadia, commercial buildings and so on,” the Makerere University Business School lecturer told the BBC. The Chinese loans come as many African countries are once again in danger of defaulting on their debts more than a decade after many had their outstanding borrowing written off. At least 40% of low-income countries in the region are either in debt distress or at high risk, the International Monetary Fund warned in April.

Chad, Eritrea, Mozambique, Congo Republic, South Sudan and Zimbabwe were considered to be in debt distress at the end of 2017 while Zambia and Ethiopia were downgraded to “high risk of debt distress”. “In 2017 alone, the newly signed value of Chinese contracted projects in Africa registered $76.5bn,” Standard Bank’s China Economist Jeremy Stevens wrote in a note. “However, despite a sizeable remaining infrastructure deficit on the continent, there is a concern that African countries’ debt-service ability will soon dissolve,” he says.

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Until you can’t pay up. China knows many countries won’t be.

China’s Xi Says No Strings Attached To Funds For Africa (R.)

Xi said at a business forum before the start of a triennial China Africa summit their friendship was time-honoured and that China’s investment in Africa came with no political strings attached. “China does not interfere in Africa’s internal affairs and does not impose its own will on Africa. What we value is the sharing of development experience and the support we can offer to Africa’s national rejuvenation and prosperity,” Xi said. “China’s cooperation with Africa is clearly targeted at the major bottlenecks to development. Resources for our cooperation are not to be spent on any vanity projects but in places where they count the most,” he said.

China has denied engaging in “debt trap” diplomacy but Xi is likely to use the gathering of African leaders to offer a new round of financing, following a pledge of $60 billion at the previous summit in South Africa three years ago. Chinese officials have vowed to be more cautious to ensure projects are sustainable. China defends continued lending to Africa on the grounds that the continent still needs debt-funded infrastructure development. Beijing has also fended off criticism it is only interested in resource extraction to feed its own booming economy, that the projects it funds have poor environmental safeguards, and that too many of the workers for them are flown in from China rather than using African labour.

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The Wall Street Journal is the only remaining paper of record. This is an editorial.

Anatomy Of A Fusion Smear (WSJ)

A partner at Foley & Lardner, Ms. Mitchell was astonished to find herself dragged into the Russia investigation on March 13 when Democrats on the House Intelligence Committee issued an interim report. They wrote that they still wanted to interview “key witnesses,” including Ms. Mitchell, who they claimed was “involved in or may have knowledge of third-party political outreach from the Kremlin to the Trump campaign, including persons linked to the National Rifle Association (NRA).” Two days later the McClatchy news service published a story with the headline “NRA lawyer expressed concerns about group’s Russia ties, investigators told.” The story cited two anonymous sources claiming Congress was investigating Ms. Mitchell’s worries that the NRA had been “channeling Russia funds into the 2016 elections to help Donald Trump.”

Ms. Mitchell says none of this is true. She hadn’t done legal work for the NRA in at least a decade, had zero contact with it in 2016, and had spoken to no one about its actions. She says she told this to McClatchy, which published the story anyway. Now we’re learning how this misinformation got around, and the evidence points to Glenn Simpson of Fusion GPS, the outfit that financed the infamous Steele dossier. New documents provided to Congress show that Mr. Simpson, a Fusion co-founder, was feeding information to Justice Department official Bruce Ohr. In an interview with House investigators this week, Mr. Ohr confirmed he had known Mr. Simpson for some time, and passed at least some of his information along to the FBI.

In handwritten notes dated Dec. 10, 2016 that the Department of Justice provided to Congress and were transcribed for us by a source, Mr. Ohr discusses allegations that Mr. Simpson made to him in a conversation. The notes read: “A Russian senator (& mobster) . . . [our ellipsis] may have been involved in funneling Russian money to the NRA to use in the campaign. An NRA lawyer named Cleta Mitchell found out about the money pipeline and was very upset, but the election was over.”

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But they still claim damage won’t be long-lasting..

No-Deal Brexit: Study Warns Of Severe Short-Term Impact On UK (G.)

The short-term impact of a no-deal Brexit on Britain’s economy would be “chaotic and severe”, jeopardising jobs and disrupting trade links, warn experts from the thinktank UK in a Changing Europe. The Brexit secretary, Dominic Raab, has said he believes 80% of the work on completing an exit deal with the EU27 is already done, as negotiations enter their final phase. But his cabinet colleague Liam Fox recently suggested a no-deal scenario – which would occur if negotiations broke down, or both sides agreed to disagree – was the most likely outcome. In a 30-page updated assessment of the impact of no deal, the thinktank said on Monday it would mean “the disappearance without replacement of many of the rules underpinning the UK’s economic and regulatory structure”.

Its analysis claimed that in the short term: • Food supplies could be temporarily disrupted – the beef trade could collapse, for example, as Britain is heavily reliant on EU imports, and would be forced to apply tariffs, in accordance with World Trade Organisation (WTO) rules. • European health insurance cards, which allow British tourists free healthcare in the EU, would be invalid from Brexit day. • There would almost certainly have to be a “hardening of the border” between Northern Ireland and the Irish Republic, including some “physical manifestation”. • The status of legal contracts and commercial arrangements with EU companies would be unclear, as the UK would become a “third country” overnight. • Increased and uncertain processing times for goods at the border would be “nearly certain”, risking queues at Dover and forcing firms to rethink their supply chains.

In the longer term, UK in a Changing Europe’s experts say, the UK would have time to normalise its trading status, and agreements could be struck with the EU27 to tackle many other practical challenges. “It should not be assumed that the damage, while real, will necessarily be long-lasting,” the report says.

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6 months to go. It’ll be a spectacle.

Boris Johnson Launches Fresh Attack On May’s Brexit Plans (G.)

Boris Johnson has used his first newspaper column of the new parliamentary term to attack Theresa May’s Chequers plan, saying it means the UK enters Brexit negotiations with a “white flag fluttering”. The declaration amounts to a significant escalation the former foreign secretary’s guerrilla campaign against the prime minister and her Chequers plan a day before the Commons returns and at a time when party disquiet over the direction of the divorce talks is mounting. Johnson wrote that “the reality is that in this negotiation the EU has so far taken every important trick. The UK has agreed to hand over £40 billion of taxpayers’ money for two thirds of diddly squat”.

Johnson added that by adopting the Chequers plan, which will see the UK adopt a common rule book for food and goods, “we have gone into battle with the white flag fluttering over our leading tank”. It will be “impossible for the UK to be more competitive, to innovate, to deviate, to initiate, and we are ruling out major free trade deals,” he added. The intervention comes after a summer in which the former minister, who resigned over the Chequers deal, had avoided touching on Brexit in his Daily Telegraph column – although he did unleash a storm of complaint by describing fully veiled Muslim women as looking like letter boxes and bank robbers. It will be seen as preparing the ground for a leadership challenge to May just as the Brexit negotiations reach their critical phase in the autumn, which is to culminate in any final deal agreed by the UK government being put to parliament for a vote.

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“..the average age of workers left in the department is 32..”

Half The Staff Leaves UK’s Brexit Department (Ind.)

The number of officials who have left the Whitehall department trying to deliver Brexit is equivalent to more than half of its total staff, shock new figures reveal. Data seen by The Independent shows hundreds of civil servants went elsewhere as the department tried to get on its feet and cobble together a negotiating stance for the UK over the last two years. The exodus means the average age of workers left in the department is 32, though they are tasked with winning a complex deal that could change Britain for a generation.

The information obtained by the Liberal Democrats appears to corroborate previous reports about an extraordinarily high turnover at the Department for Exiting the European Union (Dexeu), with critics now claiming it points to “deep instability” at the heart of the government’s Brexit operation. According to the turnover data obtained under freedom of information, a staggering 357 staff have left the Dexeu in just two years. Yet the total number of those employed at the Whitehall department amounts to only 665, indicating a turnover rate of more than 50 per cent in that period.

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Expect many more similar examples.

Britain Loses Medicines Contracts As EU Body Anticipates Brexit (G.)

Britain’s leading role in evaluating new medicines for sale to patients across the EU has collapsed with no more work coming from Europe because of Brexit, it has emerged. The decision by the European Medicines Agency to cut Britain out of its contracts seven months ahead of Brexit is a devastating blow to British pharmaceutical companies already reeling from the loss of the EMA’s HQ in London and with it 900 jobs. All drugs sold in Europe have to go through a lengthy EMA authorisation process before use by health services, and the Medicines & Healthcare products Regulatory Agency (MHRA) in Britain has built up a leading role in this work, with 20-30% of all assessments in the EU.

The MHRA won just two contracts this year and the EMA said that that work was now off limits. “We couldn’t even allocate the work now for new drugs because the expert has to be available throughout the evaluation period and sometimes that can take a year,” said a spokeswoman. In a devastating second blow, existing contracts with the MHRA are also being reallocated to bloc members. Martin McKee, the professor of European health at the London School of Hygiene and Tropical Medicine, who has given evidence to select committees about Brexit, said it was a disaster for the MHRA, which had about £14m a year from the EMA. The head of the Association of British Pharmaceutical Industry said it was akin to watching a “British success story” being broken up.

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Draghi!!

Emerging Markets Haunt Spanish Banks (DQ)

Almost exactly six years ago, the Spanish government requested a €100 billion bailout from the Troika (ECB, European Commission and IMF) to rescue its bankrupt savings banks, which were then merged with much larger commercial banks. Over €40 billion of the credit line was used; much of it is still unpaid. Yet Spain’s banking system could soon face a brand new crisis, this time not involving small or mid-sized savings banks but instead its alpha lenders, which are heavily exposed to emerging economies, from Argentina to Turkey and beyond. In the case of Turkey’s financial system, Spanish banks had total exposure of $82.3 billion in the first quarter of 2018, according to the Bank for International Settlements.

That’s more than the combined exposure of lenders from the next three most exposed economies, France, the USA, and the UK, which reached $75 billion in the same period. According to BIS statistics, Spanish banks’ exposure to Turkey’s economy almost quadrupled between 2015 and 2018, largely on the back of Spain’s second largest bank BBVA’s madcap purchase of roughly half of Turkey’s third largest lender, Turkiye Garanti Bankasi. Since buying its first chunk of the bank from the Turkish group Dogus and General Electric in 2010, BBVA has lost over 75% of its investment under the combined influence of Garanti’s plummeting shares and Turkey’s plunging currency.

But the biggest fear, as expressed by the ECB on August 10, is that Turkish borrowers might not be hedged against the lira’s weakness and begin to default en masse on foreign currency loans, which account for a staggering 40% of the Turkish banking sector’s assets. If that happens, the banks most exposed to Turkish debt will be hit pretty hard. And no bank is as exposed as BBVA, though the lender insists its investments are well-hedged and its Turkish business is siloed from the rest of the company. In Argentina, whose currency continues to collapse and whose economy is now spiraling down despite an IMF bailout, Spanish banks’ total combined investments amounted to $28 billion in the first quarter of 2018. That represented almost exactly half of the $58.9 billion that foreign banks are on the hook for in the country. The next most at-risk banking sector, the US, has some $10 billion invested.

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Maybe you should define capitalism first.

Capitalism Is Beyond Saving, and America Is Living Proof (TD)

Real wage growth has been nonexistent in the United States for more than 30 years. But as America enters the 10th year of the recovery—and the longest bull market in modern history—there are nervous murmurs, even among capitalism’s most reliable defenders, that some of its most basic mechanisms might be broken. The gains of the recovery have accrued absurdly, extravagantly to a tiny sliver of the world’s superrich. A small portion of that has trickled down to the professional classes—the lawyers and money managers, art buyers and decorators, consultants and “starchitects”—who work for them. For the declining middle and the growing bottom: nothing.

This is not how the economists told us it was supposed to work. Productivity is at record highs; profits are good; the unemployment rate is nearing a meager 4 percent. There are widely reported labor shortages in key industries. Recent tax cuts infused even more cash into corporate coffers. Individually and collectively, these factors are supposed to exert upward pressure on wages. It should be a workers’ market. But wages remain flat, and companies have used their latest bounty for stock buybacks, a transparent form of market manipulation that was illegal until the Reagan-era SEC began to chip away at the edifice of New Deal market reforms.

The power of labor continues to wane; the Supreme Court’s Janus v. AFSCME decision, while ostensibly limited to public sector unions, signaled in certain terms the willingness of the court’s conservative majority—five guys who have never held a real job—to effectively overturn the entire National Labor Relations Act if given the opportunity. The justices, who imagine working at Wendy’s is like getting hired as an associate at Hogan & Hartson after a couple of federal clerkships, reason that every employee can simply negotiate for the best possible deal with every employer.

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Sep 022018
 
 September 2, 2018  Posted by at 9:16 am Finance Tagged with: , , , , , , , , , ,  


Salvador Dali Portrait of Picasso 1947

 

Is The US Economic Boom Beginning To Fizzle Out? (Coppola)
Former Eurogroup Head Dijsselbloem Says Demands On Greeks Were Too Heavy (R.)
The IMF Abetted The European Union’s Subversion Of Greek Democracy (Mody)
Ethiopia Debt Woes Curtail China Funding (R.)
May Vows No Compromise With EU On Brexit Plan (BBC)
Pentagon Cancels Aid To Pakistan Over Record On Militants (R.)
Monsanto-Bayer: Eliminating The Name Will Not Erase The Criminal History (CD)
What’s Happening To Our Weather? The Answers Are Hiding In Arctic Air (G.)

 

 

Bit short today. I think because all the focus is one two funerals I don’t care much about. In one, a bishop grabs boobs, in the other the one person not invited gets all the attention.

Is that a surprise?

Is The US Economic Boom Beginning To Fizzle Out? (Coppola)

President Trump is not going to be too happy with the New York Fed’s latest nowcast for Q3 2018. The staff projection, based upon the latest data, shows annualized quarter-on-quarter GDP growth slowing to 2% per annum. At the end of 2017 it was 4%, and even at the end of Q2 it was 3%.

The Atlanta Fed’s nowcast, which calculates GDP growth in the same way as the U.S. Bureau of Economic Analysis, also shows GDP growth slowing in Q3, though from a higher level. The Atlanta Fed’s growth estimate for Q3 is 4.1%. President Trump will no doubt be happy with this, but not so happy with the fact that at the beginning of August the estimate was 5%.

So what has gone wrong? Why are the nowcasts suggesting that U.S. economic growth is beginning to slow? The indicators that go into the NY Fed’s nowcasts have been gradually turning red for some time now. There appears to be something of a downturn going on in the housing market; both new starts and sales have fallen. Exports have fallen and imports have risen, apparently because of worsening terms of trade, most likely due to the strong dollar. Most recently, manufacturers have drawn down inventories, and there is a fall in orders and shipments for durable goods. There are no dramatic drops, but it all adds up to a gradual economic slowdown.

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How long have you realized this, Jeroen, and what have you done to repair it?

Former Eurogroup Head Dijsselbloem Says Demands On Greeks Were Too Heavy (R.)

Euro zone countries have asked for too much from the Greek people in return for international bailout loans, former Eurogroup chief Jeroen Dijsselbloem said in an interview on Dutch television on Saturday. “On reforms, we have asked a lot from the Greek people, too much,” Dijsselbloem told current affairs program Nieuwsuur. “Reforms are hard enough to accomplish in a society with a well-functioning government, but this was obviously not the case in Greece.” Greece emerged from the biggest bailout in economic history on Aug. 20, after receiving 288 billion euros in financial aid since 2010, with the European Union as its biggest lender.

During the crisis, the Greek economy shrank by a quarter, pushing a third of the population into poverty and driving thousands to move abroad. “Greece is obviously not a success story,” Dijsselbloem said. “Their crisis has been so deep, that you can’t call it a success.” Dijsselbloem chaired the Eurogroup of euro zone finance ministers from 2013 until the beginning of 2018, and led dozens of lengthy emergency meetings during which bailouts for Greece, Cyprus and the Spanish banking sector were grudgingly pieced together.

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Sister act.

The IMF Abetted The European Union’s Subversion Of Greek Democracy (Mody)

European authorities never allowed a conversation around the core imperative of reducing Greece’s debt burden. Syriza formed a government on January 25, 2015. On January 31, Erkki Liikanen, governor of Finland’s central bank and, in that capacity, a member of the ECB’s Governing Council, threatened that the ECB would stop funding Greek banks if the Greek government did not agree to the terms of the creditors. And on February 4, the ECB decided Greece’s fate. In an aggressive move that took everyone by surprise, the ECB cut off funding to Greek banks, preemptively immobilizing the Greek government before it could begin negotiations with its creditors.

The ECB withdrew an earlier arrangement under which Greek banks used their government bonds as collateral (security) to obtain funds for running their day-to-day operations. Although Greek government bonds had a junk rating and normally only higher-rated bonds qualified as collateral, the ECB had waived that requirement to help the banks stay afloat. With its February 4 decision, the ECB revoked that waiver. Greek banks could now borrow only from the Greek central bank under an Emergency Liquidity Arrangement (ELA); ELA funds carried a higher interest rate and, moreover, could be turned off at any time, thus choking the Greek financial system.

Stock prices of Greek banks fell sharply, and two days later, the rating agency S&P pushed the government bonds’ rating further into junk territory. With continuing deposit flight from Greek banks and the threat of a financial meltdown, the Syriza government rapidly lost all leverage before it could use its economic argument in a political negotiation.

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More Belt and Road.

Ethiopia Debt Woes Curtail China Funding (R.)

Ethiopia has been lauded by experts from China’s ruling Communist Party as a “model country” in Beijing’s $126 billion Belt and Road initiative to build rail, road and sea links tying China to Eurasia and Africa. But as the Horn of Africa nation of 100 million people faces debt distress, there are signs that China, a major creditor, is slowing financing to Ethiopia as doubts grow over the profitability of some infrastructure projects there. “The intensifying repayment risks from the Ethiopian government’s debt reaching 59 percent of GDP is worrying investors,” China’s mission to the African Union in Addis Ababa said on its website in July.

It said that Chinese investment in the country was cooling and that the China Export and Credit Insurance Corp was reducing the scale of its investment there. Against a backdrop of rising worry over African indebtedness to China, Prime Minister Abiy Ahmed will visit Beijing for the Forum on China-Africa Cooperation (FOCAC), which starts on Monday. He is due to meet Chinese Prime Minister Li Keqiang and is expected to court investment from Chinese firms into Ethiopia’s agro-industrial and pharmaceutical businesses, China’s Xinhua news agency said. Ethiopia has been a top destination for Chinese loans in Africa, despite its lack of natural resources, with state policy banks extending it more than $12.1 billion since 2000, according to the China Africa Research Initiative (CARI) at the Johns Hopkins School of Advanced International Studies in Washington (SAIS).

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Not your call, Theresa.

May Vows No Compromise With EU On Brexit Plan (BBC)

Theresa May has insisted she will not be forced into watering down her Brexit plan during negotiations with the EU. Writing in the Sunday Telegraph, the prime minister says she will “not be pushed” into compromises on her Chequers agreement that are not in the “national interest”. But Mrs May also warns she will not “give in” to those calling for a second referendum on the withdrawal agreement. She says it would be a “gross betrayal of our democracy and… trust”. The People’s Vote, a cross-party group including some MPs, is calling for a public vote on the final Brexit deal. The UK is on course to leave the EU on 29 March and the government had previously ruled out another referendum.

The prime minister writes that the coming months are “critical in shaping the future of our country”, but that she is “clear” about her mission in fulfilling “the democratic decision of the British people”. She adds that following the Chequers agreement in July – which led to the resignation of two cabinet ministers – “real progress” has been made in Brexit negotiations. While there is more negotiating to be done, Mrs May writes: “We want to leave with a good deal and we are confident we can reach one.” The government has been preparing for a no-deal scenario, even though this would create “real challenges for both the UK and the EU” in some sectors, she says. But the PM adds: “We would get through it and go on to thrive.”

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Just as they’ve voted in Imran Khan, who once suggested he might order the shooting down of U.S. drones if they entered Pakistani airspace, [and] has opposed the United States’ open-ended presence in Afghanistan.

Pentagon Cancels Aid To Pakistan Over Record On Militants (R.)

The U.S. military said it has made a final decision to cancel $300 million in aid to Pakistan that had been suspended over Islamabad’s perceived failure to take decisive action against militants, in a new blow to deteriorating ties. The so-called Coalition Support Funds were part of a broader suspension in aid to Pakistan announced by President Donald Trump at the start of the year, when he accused Pakistan of rewarding past assistance with “nothing but lies & deceit.” The Trump administration says Islamabad is granting safe haven to insurgents who are waging a 17-year-old war in neighboring Afghanistan, a charge Pakistan denies. But U.S. officials had held out the possibility that Pakistan could win back that support if it changed its behavior.

U.S. Defense Secretary Jim Mattis, in particular, had an opportunity to authorize $300 million in CSF funds through this summer – if he saw concrete Pakistani actions to go after insurgents. Mattis chose not to, a U.S. official told Reuters. “Due to a lack of Pakistani decisive actions in support of the South Asia Strategy the remaining $300 (million) was reprogrammed,” Pentagon spokesman Lieutenant Colonel Kone Faulkner said. Faulkner said the Pentagon aimed to spend the $300 million on “other urgent priorities” if approved by Congress. He said another $500 million in CSF was stripped by Congress from Pakistan earlier this year, to bring the total withheld to $800 million. The disclosure came ahead of an expected visit by U.S. Secretary of State Mike Pompeo and the top U.S. military officer, General Joseph Dunford, to Islamabad. Mattis told reporters on Tuesday that combating militants would be a “primary part of the discussion.”

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8,000 lawsuits. And Bayer is not a US company, big difference.

Monsanto-Bayer: Eliminating The Name Will Not Erase The Criminal History (CD)

Cancelling out Monsanto’s name and keeping only that of Bayer, does not mean forgetting the wrongdoings of a company which, according to the verdict of the Monsanto Tribunal of The Hague, is stained with crimes of ecocide. With Bayer’s official takeover of Monsanto, the giant multinational also inherits its liabilities. On the eve of the start of the integration process, Monsanto has been held liable for causing cancer through the use of its glyphosate-based weedkiller Roundup and ordered to pay $289 million of damages to the plaintiff Dewayne Lee Johnson in the first landmark case, settled in California in mid August 2018. The jury also found that Monsanto “acted with malice or oppression.”

According to Reuters, the number of lawsuits brought against Bayer’s newly acquired Monsanto is approximately 8000 in the US alone. UN experts Ms Hilal Elver, Special Rapporteur on the right to food and Mr. Dainius Puras, Special Rapporteur on the right to physical and mental health, defined the ruling “a significant recognition of the human rights of victims, and the responsibilities of chemical companies.” Revelations in reports published last year, most notably the “Monsanto Papers” and the “Poison Papers“, have shed light on strategies of big agrochemical groups to expand their empires: from lobbying, interference in government agencies’ proceedings, attacks in collusion with institutions on independent science, to mega mergers and acquisitions.

For the first time part of these documents were shown to a jury, which were able, among other things to also see that, “at least starting 20 years ago, Monsanto has known that their product can cause cancer, and has gone out of its way to ignore it and/or fight any science that suggests a link”, as declared to Democracy Now by Brent Wisner, the lead trial counsel for Dewayne Lee Johnson in his lawsuit against Monsanto. Added to this, in the same week, California’s Supreme Court rejected a challenge by Monsanto to the state’s decision to include glyphosate in its Proposition 65 list of carcinogens.

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How clean is the air?

What’s Happening To Our Weather? The Answers Are Hiding In Arctic Air (G.)

I am standing on the ocean. Ahead of me, the world is split into two perfect halves: blue sky above, white sea ice below. The view is clean and simple, but a continuous waltz of swirling and shunting is hidden inside those two colours: the inner workings of the Arctic engine. This place is special for many reasons, and to appreciate one of the most unusual all I need to do is to live; to breathe. The air is -2C, but the air coming from my lungs is invisible. The familiar wisps of cold breath that I associate with crisp winter air in Britain are absent. They cannot form here. And that anomaly is connected in a fundamental way to our presence here, on a scientific expedition to study this environment. For two months, the Swedish icebreaker Oden is home to 74 of us, living and working at the top of the world to tap into the stories that the blue and the white have to tell.

The Arctic has held on to its mystique for centuries. Many western explorers have pitted their wits, strength, and endurance against this environment, while traditional Arctic communities have learned to work with the complexities of the ice rather than against them. Those of us who live well south of the Arctic circle hear a lot about how the white in the north is changing, but less about how it is. It’s hard to construct a secondhand mental image of what it’s like here. There are no landmarks and you cannot step in the footprints of the past. This is an ocean with an icy shell that cracks and shifts as it’s pushed by the wind, breaking apart into separate floes or piling up to form ridges.

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Aug 272018
 
 August 27, 2018  Posted by at 8:50 am Finance Tagged with: , , , , , , , , , , ,  


Hasui Kawase Moon at Megome (woodblock print) 1930

 

BIS Warns Of “Perfect Storm” For Global Economy (ZH)
BIS’s Carstens Warns Of Economic Risks Of Protectionism (R.)
No-Deal Brexit Thrusts UK Into ‘Legal Vacuum’ – Labour (G.)
Britain Prepares for War Against Russia (SCF)
UK’s Biggest Payday Lender Wonga ‘On The Brink Of Collapse’ (G.)
Malaysia’s Reaction Shows China Needs To Review Belt And Road Plan (SCMP)
China To Block More Than 120 Offshore Cryptocurrency Exchanges (SCMP)
Michael Cohen’s Attorney Backpedals On Trump-Russia Claims (ZH)
Becoming Serfs (Chris Hedges)
Former Top Vatican Official Says Pope Should Resign Over Abuse Crisis (R.)
‘Foreign Specialists’ May Stage Chemical Attack In Syria In 2 Days – Russia (RT)
Greece Tops Eurozone In Overtaxation (K.)
Lesbos Refugees Pushed To ‘Absolute Breaking Point’, Warns Report (Ind.)

 

 

Carstens’ comments on letters of credit are interesting. Non-US banks will need access to dollars, or trade stops. Not sure where Tyler got that quote.

BIS Warns Of “Perfect Storm” For Global Economy (ZH)

Carstens highlighted the potential catalysts that could unleash the “perfect storm” he highlighted as the key risk resulting from the interaction of real and financial risks, namely: the trillions in outstanding dollar-denominated debt – whereby a dollar-shortage threatening to cripple international trade – and the growing risk of currency wars:

Consider that non-US banks provide the bulk of dollar-denominated letters of credit, which in turn account for more than 80% of this source of trade finance. The Great Financial Crisis highlighted the fragility of this setup, since non-US banks depend on wholesale markets to obtain dollars. Ten years on, we should not forget how the dramatic fall in trade finance in late 2008 played a key part in globalising the crisis. Any dollar shortage among non-US banks could cripple international trade. On top of that, trade skirmishes can easily escalate into currency wars, although I hope that they will not.

As we saw earlier with Mexico, imposing tariffs on imports tends to weaken the target country’s currency. The depreciation could then be construed as a currency “manipulation” that seemingly justifies further protectionist measures. If currency wars break out, countries may put financial markets off-limits to foreign investors or, on the other side, deliberately cut back foreign investment, politicising capital flows. In addition, we must be mindful of long-observed knock-on effects from tighter US monetary conditions, given the large stock of dollar borrowing by non-banks outside the United States, which has now reached $11.5 trillion.”

His conclusion: “Policymakers in advanced economies should not shrug off the growing evidence that abrupt exchange rate depreciations reduce investment and economic growth in emerging market economies. This has implications for everybody, in that weaker economic activity reduces demand for exports from advanced economies.” “In the long term, protectionism will bring not gain but only pain,” Carstens said, echoing a familiar talking point of establishment economists. “Not just for the United States, but for us all.”

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Yeah, well, so called free trade is their thing.

BIS’s Carstens Warns Of Economic Risks Of Protectionism (R.)

Agustin Carstens, general manager of the Bank of International Settlements, on Saturday delivered a scathing critique of rising protectionism, a not-so-subtle rebuke to U.S. President Donald Trump’s use of tariffs and trade talks to wring concessions from China, Mexico and many other countries. Reversing globalization “could increase prices, raise unemployment and crimp growth,” Carstens, the former head of Mexico’s central bank, told fellow former and current central bankers at the Kansas City Federal Reserve Bank’s annual economic symposium here. Higher tariffs could drive up U.S. inflation and force the Fed to raise rates, driving up the dollar and hurting both U.S. exporters and emerging market economies in the process, Carstens said

Protectionism also threatens “to unsettle financial markets and put a drag on firms’ capital spending, as investors take fright and financial conditions tighten,” he said. The BIS released a research paper at the same time as Carstens’ speech that estimated revoking the North American Free Trade Agreement, as Trump has threatened, would mean a loss to GDP of $37 billion in Canada, $22 billion in Mexico, and $40 billion in the United States, with non-tariff trade barriers accounting for the lion’s share of the losses. Wages would also fall across North America, the research found.

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It’s already a given. There’s no time left.

No-Deal Brexit Thrusts UK Into ‘Legal Vacuum’ – Labour (G.)

Theresa May and the government would face a race against time to pass a slew of new laws, or risk creating an “unsustainable legal vacuum”, if Britain plunged out of the EU without a deal, Labour’s Keir Starmer has warned. Dominic Raab insisted last week that the government had the legislation in place to cope, if Britain is forced to leave in March 2019 without a withdrawal agreement. “Our laws will be on the statute book, the staff will be in place, the teams will be in post and our institutions will be ready for Brexit – deal, or no deal,” the Brexit secretary said. But Labour’s analysis suggests new legislation would have to be passed hastily in four key policy areas: • EU citizens’ rights. • Immigration rules for EU travellers entering Britain. • Criminals held under the European arrest warrant. • The Irish border.

The government has long promised an immigration bill – but has not yet even published a white paper. The home affairs select committee warned recently that “if there’s no deal, [the immigration system] is going to be completely chaotic as no one will know what the arrangements will be until the very last minute and there is going to be no time for anyone to plan at all”. The government has long promised an immigration bill – but has not yet even published a white paper. The home affairs select committee warned recently that “if there’s no deal, [the immigration system] is going to be completely chaotic as no one will know what the arrangements will be until the very last minute and there is going to be no time for anyone to plan at all”.

Several new regulators or other public bodies would also have to be created, including in medicines and aviation, Labour claims. The withdrawal bill gives ministers some powers to do this, but they are tightly curtailed. Starmer described last week’s release of 24 technical notices on how the government is preparing for a no deal as a “poorly executed PR stunt designed to convince Tory MPs to back the prime minister’s discredited Chequers proposal”. He said the government has “barely scratched the surface” of what would need to be done to prepare the UK for a no-deal scenario, and there was a serious risk of an “unsustainable legal vacuum”.

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Britain and the military-industrial complex impoverish the population.

Britain Prepares for War Against Russia (SCF)

The Brexit pantomime is taking place in an era in which it is recorded that “As benefits are cut and rents soar, Britain has seen a staggering rise in homelessness: the number of rough sleepers in England alone has more than doubled since 2010. Almost 1.2 million older people in Britain, as well as another one million disabled people, are living without the social care they need for basics such as eating, dressing and washing. It’s horrific: severely ill people forced to wait 14 hours to go to the toilet or wheelchair users who, with no assistant to help them cook, are now malnourished.” But this dreadful state of affairs means nothing to those who lack for nothing — which includes politicians of the governing Conservative Party who demand that more taxpayers’ money must be spent on military hardware.

The previous defence minister, Michael Fallon (who had to resign because he was found out to have indulged in some sexual shenanigans), told the BBC last year that “we will be adding to defence, there will be new equipment and the budget will grow every year” and the present one, Gavin Williamson (the man who said that Russia should “go away and shut up”), demanded in June that Britain increase its annual military spending by about $25 billion. The strange thing about agitating to spend more money on armaments is that, apart from an indubitable terrorist menace, there is no military threat whatever to Britain. On the other hand, there is a social crisis of the most serious magnitude.

As the New York Times reported in May, “the protracted campaign of budget cutting, started in 2010 by a government led by the Conservative Party, has . . . yielded a country that has grown accustomed to living with less, even as many measures of social well-being — crime rates, opioid addiction, infant mortality, childhood poverty and homelessness — point to a deteriorating quality of life.” But the government’s answer lies in buying missiles and whooshing new aircraft, and two aircraft carriers of incalculable expense and nuclear submarines that the BBC reports are to cost “£31 bn (including inflation), with a contingency of a further £10 bn, spread over 35 years…”

[..] So on August 18 the UK’s Daily Express newspaper, a sad wreck of its former self, and now competing with the Daily Mail in publicising ‘celebs’ and headlining articles of ultra-nationalist tripe, ran a piece headlined “Royal Navy’s £3bn warship launches to tackle ‘frightening’ Russians.” Just how it’s going to deter anyone is not explained, because it hasn’t any aircraft and won’t be operational until 2021. It cost over 4 billion dollars and its yet-to-arrive 36 F-35 aircraft will cost a minimum of 90 million dollars each. This is in a country where the Joseph Rowntree Foundation records that some 14 million people live in poverty – more than one in five of the population.

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Payday loans are the lowest point in a society. If that doesn’t even work anymore….

UK’s Biggest Payday Lender Wonga ‘On The Brink Of Collapse’ (G.)

Britain’s biggest payday lender, Wonga, is teetering on the brink of collapse following a surge of customer compensation claims in recent weeks that could cause it to call in administrators. The short-term loan provider has reportedly lined up accountancy firm Grant Thornton to handle a potential administration of the company should its board believe it is unable to avoid falling into insolvency. The report from Sky News said Wonga could appoint Grant Thornton as soon as this week. The flood of claims facing the company relate to loans taken out before 2014, when Wonga was the poster child for outrage in the payday lending industry that resulted in rules capping the cost of borrowing.

Campaigners claimed the firm and others in the industry fleeced consumers with high interest rates and targeted vulnerable customers with slick marketing. Wonga has shown signs of mounting difficulties in recent weeks. Earlier this month, it emerged the company received a £10m emergency cash injection from shareholders to save it from going bust. At the time, a spokesman said the firm was facing “a marked increase in claims related to legacy loans, driven principally by claims management company activity”. Should the company fall into administration, it would signal a remarkable fall from its previous status as one of the fastest-growing financial companies in the UK. The company was once touted for a stock exchange listing that could have valued it at more than $1bn (£780m) but was recently reported to be worth just $30m.

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Don’t even remember when I first said BRI is a Chinese scheme to export overcapacity and make others pay for it. Others who, of course, will become debt slaves because of it.

Malaysia’s Reaction Shows China Needs To Review Belt And Road Plan (SCMP)

Five years ago in September, during a visit to Kazakhstan, President Xi Jinping first proposed building the Silk Road Economic Belt, which included countries along the ancient Silk Road leading through Central Asia and the Middle East to Europe. In October that year, while visiting Indonesia, he followed up by suggesting a “21st Century Maritime Silk Road”, tracing the old trading routes that took Chinese merchants to Southeast Asia, Arabian countries and all the way to eastern Africa. Since then, Xi’s proposals – collectively known as the “Belt and Road Initiative” – have promised trillions of US dollars worth of investments in infrastructure to enhance connectivity and boost trade in more than 60 countries.

[..] From last month, state media have ramped up propaganda to mark the fifth anniversary of the grand plan and catalogue achievements ranging from China-built railways in Ethiopia to the China-owned Greek port of Piraeus. But the celebratory mood was somewhat marred by Malaysia’s decision last week to cancel two China-financed mega projects in the country, the US$20 billion East Coast Rail Link and two gas pipeline projects worth US$2.3 billion. Malaysian Prime Minister Mahathir Mohamad said his country could not afford those projects and they were not needed at the moment. Interestingly, Mahathir announced the decision even before leaving China, and said both Xi and Premier Li Keqiang understood the reasons behind the cancellations and accepted them.

The Chinese government put on a brave face in response, with a foreign ministry spokesman saying it was inevitable there would be problems or different points of views between any two countries. But Mahathir’s announcement has transcended bilateral cooperation, and should serve as a timely warning to the Chinese leadership about the importance and urgency with which they should conduct a comprehensive review of the belt and road strategy and recalibrate it by reining in its ambitious investment plans. Indeed, Mahathir’s decision is just the latest setback for the plan, as politicians and economists in an increasing number of countries that once courted Chinese investments have now publicly expressed fears that some of the projects are too costly and would saddle them with too much debt.

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Volume is way down, as is price. Wyy the heavy hand now?

China To Block More Than 120 Offshore Cryptocurrency Exchanges (SCMP)

China is poised to block more than 120 foreign cryptocurrency exchanges as part of the government’s broader crackdown on activities related to digital money, according to state media. Authorities will block access in China to 124 websites operated by offshore cryptocurrency exchanges that provide trading services to citizens on the mainland, the Shanghai Securities News, a newspaper affiliated with the country’s financial and markets regulators, reported on Thursday. It said authorities will also continue to monitor and shut down domestic websites related to cryptocurrency trades and initial coin offerings (ICOs), and ban payment services from accepting cryptocurrencies, including bitcoin.

The newspaper cited people close to the Leading Group of Internet Financial Risks Remediation, which was set up by China’s cabinet in 2016 and headed by Pan Gongsheng, a deputy governor of the People’s Bank of China – the country’s central bank. The report marks the latest effort by Beijing to intensity the clampdown on cryptocurrency activities because of concerns about financial instability. Censors recently shut down at least eight blockchain and cryptocurrency-focused online media outlets, some of which raised several million dollars in venture capital. These entities found their official public accounts on WeChat blocked on Tuesday evening, owing to violations against new regulations from China’s top internet watchdog.

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I dealt with Lanny David a few days ago in Fixers. No surprise he turns out to lie about this too. I asked in that article if Cohen was sure he wanted him as his lawyer. He must be asking himself that now.

Michael Cohen’s Attorney Backpedals On Trump-Russia Claims (ZH)

Lanny Davis – the attorney for Michael Cohen, has massively backpedaled on “confident assertions” that Cohen would share information with investigators that President Trump knew of Russian efforts to undermine Democratic nominee Hillary Clinton – a lifelong friend of Davis’. The Washington Post reported on Sunday that Davis said in an interview that he is “no longer certain about claims he made to reporters on background and on the record in recent weeks about what Cohen knows about Trump’s awareness of the Russian efforts.” “Davis told The Washington Post that he cannot confirm media reports that Cohen is prepared to tell special counsel Robert S. Mueller III that Trump had advance knowledge of the 2016 Trump Tower meeting” -WaPo

CNN reported in July that Cohen claimed to have witnessed Trump approving the meeting between Trump Jr. and Russian attorney Natalia Veselnitskaya, arranged by an associate of opposition research firm Fusion GPS. The day after CNN’s report, the Washington Post – using an “anonymous source” they now admit was Davis, peddled the same story that “Cohen had told associates that he witnessed an exchange in which Trump Jr. told his father about an upcoming gathering in which he expected to get information about Clinton,” however the Post didn’t say Trump Jr. told Sr. it was the Russians. “I should have been more clear — including with you — that I could not independently confirm what happened,” Davis said, adding perhaps the most difficult four words for an attorney to utter: “I regret my error.”

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“..The New Deal programs were paid for by taxing the rich. Even in the 1950s, during the Eisenhower presidency, the top marginal rate was 91%..”

Becoming Serfs (Chris Hedges)

We live in a new feudalism. We have been stripped of political power. Workers are trapped in menial jobs, forced into crippling debt and paid stagnant or declining wages. Chronic poverty and exploitative working conditions in many parts of the world, and increasingly in the United States, replicate the hell endured by industrial workers at the end of the 19th century. The complete capture of ruling institutions by corporations and their oligarchic elites, including the two dominant political parties, the courts and the press, means there is no mechanism left by which we can reform the system or protect ourselves from mounting abuse. We will revolt or become 21st-century serfs, forced to live in misery and brutally oppressed by militarized police and the most sophisticated security and surveillance system in human history while the ruling oligarchs continue to wallow in unimagined wealth and opulence.

“The new tax code is explosive excess,” the economist Richard Wolff said when we spoke in New York. “We’ve had 30 or 40 years where corporations paid less taxes than they ever did. They made more money than they ever did. They have been able to keep wages stagnant while the productivity of labor rose. This is the last moment historically they need another big gift, let alone at the expense of the very people whose wages have been stagnant. To give them a tax bust of this sort, basically reducing from 35% to 20%, is a 40% cut. This kind of crazy excess reminds you of the [kings] of France before the French Revolution when the level of excess reached an explosive social dimension. That’s where we are.”

When capitalism collapsed in the 1930s, the response of the working class was to form unions, strike and protest. The workers pitted power against power. They forced the oligarchs to respond with the New Deal, which created 12 million government-funded jobs, Social Security, the minimum wage and unemployment compensation. The country’s infrastructure was modernized and maintained. The Civilian Conservation Corps (CCC) alone employed 300,000 workers to form and maintain national parks. “The message of the organized working class was unequivocal,” Wolff said. “Either you help us through this Depression or there will be a revolution.” The New Deal programs were paid for by taxing the rich. Even in the 1950s, during the Eisenhower presidency, the top marginal rate was 91%.

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True, but it won’t make any difference.

Former Top Vatican Official Says Pope Should Resign Over Abuse Crisis (R.)

Pope Francis said on Sunday he would not respond to a former top Vatican official who accused him of having known for years of allegations of sex abuse by a prominent U.S. cardinal, calling on the pontiff to resign in an unprecedented broadside against the pope by a Church insider. Francis, speaking to reporters on the plane returning from a trip to Dublin, said dismissively that a statement containing the accusations “speaks for itself”. In a detailed 11-page bombshell statement given to conservative Roman Catholic media outlets during the pope’s visit to Ireland, Archbishop Carlo Maria Vigano accused a long list of current and past Vatican and U.S. Church officials of covering up the case of Cardinal Theodore McCarrick, who resigned last month in disgrace.

In remarkably blunt language, Vigano said alleged cover-ups in the Church were making it look like “a conspiracy of silence not so dissimilar from the one that prevails in the mafia”. “Pope Francis has repeatedly asked for total transparency in the Church,” wrote Vigano, who has criticized the pope before. “In this extremely dramatic moment for the universal Church, his extremely dramatic moment for the universal Church, he must acknowledge his mistakes and, in keeping with the proclaimed principle of zero tolerance, Pope Francis must be the first to set a good example for cardinals and bishops who covered up McCarrick’s abuses and resign along with all of them,” Vigano said.

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Russia is getting very specific, as per the time, location, chemicals used etc.

‘Foreign Specialists’ May Stage Chemical Attack In Syria In 2 Days – Russia (RT)

“Foreign specialists” have arrived in Syria and may stage a chemical attack using chlorine in “the next two days,” the Russian Defense Ministry said. This will be filmed for international media to frame Damascus forces.
Defense Ministry Spokesman Major General Igor Konashenkov said the operation is planned to unfold in the village of Kafr Zita in Syria’s northwestern Hama Province in “the next two days.” Konashenkov said that “English-speaking specialists” are already in place to use “poisonous agents.” While a group of residents from the north has been transported to Kafr Zita and is currently being prepared “to take part in the staging of the attack” and be filmed suffering from supposed “‘chemical munitions’ and ‘barrel bombs’ launched by the Syrian government forces.”

The groups of residents will be used to assist “fake rescuers from the White Helmets.” They will be filmed apparently suffering from the effects of chemical weapons and then be shown in “the Middle Eastern and English-language media.” The defense ministry earlier warned that the US, UK, and France are preparing to use the planned attack as a pretext for airstrikes against Syria. The USS The Sullivans, an Arleigh Burke-class Aegis guided missile destroyer, was already deployed to the Persian Gulf a couple of days ago. On August 22, US National Security Adviser John Bolton stated that “if the Syrian regime uses chemical weapons, we will respond very strongly and they really ought to think about this a long time.”

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Lowest incomes, highest taxes. That’s recovery. And there’s much more to come.

Greece Tops Eurozone In Overtaxation (K.)

Greece has taken the lead among eurozone countries in the taxes-to-GDP ratio, rising from 13th place in 2008, before the country requested a bailout to stabilize its finances, to first place as of 2016. A tax-to-GDP ratio of over 27% is unprecedented in the country, at least since the restoration of democracy in 1974. At the same time, Greece set a record in terms of the speed with which the “taxation shock” was implemented, with the tax-to-GDP ratio jumping by 7 percentage points over eight years of bailouts.

Direct or indirect overtaxation has been the main driver for the reduction of the huge deficits Greece had to tackle at the beginning of the economic crisis. In 2008, taxes on production and imports accounted for 12.6% of GDP, while in 2017 the figure rose to 17.5%, according to data from the Hellenic Statistical Authority (ELSTAT). Taxes on income stood at 8.1% in 2008 and 10.2% in 2017. In social security contributions the ratio stood at 12.7% in 2008, reaching 14.6% in 2017.

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Give it some time, and it’ll get as bad as Nauru. If Merkel and Juncker would have wanted to stop this, they’ve had plenty time. They didn’t and they don’t.

Lesbos Refugees Pushed To ‘Absolute Breaking Point’, Warns Report (Ind.)

Thousands of refugees are living in perpetual fear and at risk of developing serious illnesses as the situation on the Greek island of Lesbos reaches “absolute breaking point”, new research shows. A report by Refugee Rights Europe warns that physical and mental health problems are rife on the island, as unsanitary conditions contribute to the spread of disease and growing desperation grips the men, women and children who are stuck there. Reports of violence and racially motivated attacks on refugees by police have also become commonplace, with nearly half of the 311 asylum seekers surveyed for the report saying they had been attacked by officers – usually with tear gas.

There are currently an estimated 8,000 refugee men, women and children on Lesbos, making it the largest host out of the Greek islands. A third come from Syria, 27% are from Afghanistan, 13% are Iraqi and the remaining are mainly from African countries. A series of accounts from asylum seekers in the report exposes the squalor and dangers they endure, including only having access to a shower once every few weeks and being unable to access medical care for their sick children. Respondents also reported being too afraid to leave their tents at night due to lack of security in the camps. Others expressed suicidal thoughts, with one refugee telling researchers: “I prefer to die than be here”.

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