Dec 082019
 December 8, 2019  Posted by at 9:04 pm Finance, Primers Tagged with: , , , , , , , , ,  12 Responses »

Saul Leiter 463 1956


Ronald Reagan and Mikhail Gorbachev first met in Geneva in 1985, in a summit specifically designed to allow them to discuss diplomatic relations and the -nuclear- arms race. At the time, the Soviet Union had started to crumble, but it was still very much the Soviet Union. They met again in 1986 in Reykjavik, in a summit set up to continue these talks. There, they came close to an agreement to dismantle both countries’ nuclear arsenals.

They met once again in Washington in 1987. That was the year Reagan made his famous “Mr. Gorbachev, tear down this wall” speech about the Berlin wall. Then they held a next summit in 1988 in Moscow, where they finalized the Intermediate-Range Nuclear Forces Treaty (INF) after the US Senate’s ratification of the treaty in May 1988.

Reagan’s successor George H.W. Bush met with Gorbachev first in December 1989 in Malta, and then the two met three times in 1990, among others in Washington where the Chemical Weapons Accord was signed, and in Paris where they signed the Treaty on Conventional Armed Forces in Europe. They met three more times in 1991, with one of their meetings, in Moscow, resulting in the signing of the Strategic Arms Reduction Treaty (START I).

One of the most interesting things agreed on during the Bush-Gorbachev meetings was that Russia would allow Germany to re-unite after the wall came down, in exchange for the promise that NATO would not try to expand eastward.


I’ve been re-researching this a bit because it feels like it’s high time that people should realize what US foreign policy was like not that long ago. Even as it involved Reagan and Bush sr., not exactly the peace-mongers of their times. The one thing that was clear to all parties involved is that it was crucial to keep meeting and talking. And talk they did. But look at us now. When was the last summit of a US president with Vladimir Putin?

This came to mind again when I read Elizabeth Warren’s piece in the Guardian today, which made me wonder if she’s for real, if she is really as ignorant as she appears to be when it comes to foreign policy, to Russia, to Trump and to NATO. It would seem that she is, and that makes her a hazard. Not that I see her as a serious candidate, mind you, but then again, I do not see any other one either.

In her article, which reads more than anything like some nostalgic longing for the good old times when she was young, just watch her get all warm and fuzzy over the success of NATO:


Donald Trump Has Destroyed American Leadership – I’ll Restore It

For seven decades, America’s strength, security and prosperity have been underpinned by our unmatched network of treaty alliances, cemented in shared democratic values and a recognition of our common security. But after three years of Donald Trump’s insults and antics, our alliances are under enormous strain. The damage done by the president’s hostility toward our closest partners was on full display at this week’s gathering of NATO leaders in London, which should have been an unequivocal celebration of the 70th anniversary of the most successful alliance in history.

The success of NATO was not inevitable, easy or obvious. It is a remarkable and hard-won accomplishment, and one based on a recognition that the United States does not become stronger by weakening our allies. But that is just what Trump has done, repeatedly and deliberately. He treats our partners as burdens while embracing autocrats from Moscow to Pyongyang. He has cast doubt on the US commitment to NATO at a moment when a resurgent Russia threatens our institutions and freedoms. He has blindsided our partners on the ground in Syria by ordering a precipitate and uncoordinated withdrawal.

[..] he has wrecked US credibility by unilaterally tearing up our international agreements on arms control, non-proliferation and climate change. This reckless disregard for the benefits of our alliances comes at a perilous moment, when we face common threats from powerful adversaries probing the weaknesses of our institutions and resolve. Longstanding allies in Asia are doubting our reliability and hedging their bets. Russia’s land grab in Ukraine has upended the post-1989 vision of a Europe “whole, free, and at peace”. The chaotic Brexit process has consumed our closest partners, while sluggish growth and rising xenophobia fuel extremist politics and threaten to fracture the European Union.


To start with that last point, no. That “post-1989 vision of a Europe “whole, free, and at peace” was destroyed by NATO’s eastward expansion, executed in spite of US, EU and NATO promises that it wouldn’t. Moreover, you can talk about a resurgent Russia, but the country has hardly recovered economically from the 1980’s and 90’s today, and it has no designs on countries to its west.

Just look at the military budgets of the respective countries, where Russia has maybe 10% of the expenditure of the US, let alone the rest of NATO, and you get the picture. Is Russia getting more bang for its buck, because it doesn’t have to maintain a long running Pentagon-Boeing/Raytheon link? Yes, it does. But a 10 to 1 difference is still way out there. It’s not as if they spend half of what the US does, they spend just 10%.

This is because not only Russia doesn’t have to satisfy the desires and needs of Pentagon-Boeing/Raytheon, it’s also because they have no desire to conquer any territory that is not at present Russian.

Russia “annexed” Crimea through fair elections, and it knew that “we” knew that it would never let go of its only warm water port, Sevastopol. When “We” tried to take it away regardless, it did the only thing it could do. And it did it very intelligently. As for Eastern Ukraine, everyone there is Russian, whether by blood or by passport. And there are a lot of strong ties between them and Russians in Russia proper.

If Putin would have volunteered to let these Donbass Russians be shot to bits by the Ukraine neo-nazis that helped the US and EU in the Maidan coup, he would have had either a civil war in Russia, or an all-out war in the Donbass, with perhaps millions of casualties. Putin did what he could to prevent both. Back to Warren:


A mounting list of global challenges demand US leadership and collective action. As president, I will recommit to our alliances – diplomatically, militarily and economically. I will take immediate action to rebuild our partnerships and renew American strategic and moral leadership, including by rejoining the Paris climate accord, the United Nations compact on migration, and reaffirming our rock-solid commitment to NATO’s Article 5 provisions.

But we must do more than repair what Trump has broken. Instead we need to update our alliances and our international efforts to tackle the great challenges of our age, from climate change and resurgent authoritarianism to dark money flows, a weakening international arms control regime and the worst human displacement crisis in modern history.


Wait, what exactly has Trump broken in the foreign policy field? There have been dozens at the very least who have called for NATO to be disbanded, Ron Paul et al, because its sole purpose was to counter the Soviet Union, which no longer exists. In fact, when Emmanuel Macron labeled NATO “brain-dead” last week, it was Trump who defended the alliance.

And sorry, Elizabeth, but to hold Trump responsible for “the worst human displacement crisis in modern history” is just not right. That started way before he arrived at the scene. Obama and Hillary carry the burden and blame for that, along with Bush jr. and Dick Cheney. They shot the crap out of Iraq, Lybia etc. Trump only dumped a few bombs in a desert. He didn’t invade any country, he didn’t go “We Came, We Saw, He Died”. That was not Trump.

And before we forget, the military aid for Ukraine Trump allegedly held back for a few weeks had been refused by Obama for years. I’ve been wondering for ages now why the Democrats are so eager to make things up while ignoring simple facts, but I think at least it’s time to start pointing out these issues.

This is not to make Trump look better in any sense, but to try and make people understand that he did not start this thing. Though yeah, I know, it’s like talking to a wall by now. The political divide has turned into such a broad and yawning one, you can’t not wonder how it could ever be broached.

But, you know, it might help if people like Elizabeth Warren don’t ONLY talk about Trump like he’s the antichrist, or a Putin tool, if they engage with him in conversation. But sadly, it feels like we’re past that point. Like if she would even try, and I don’t know if she would want to, her party would spit her out just for trying to build a single bridge. Like Tulsi Gabbard seems to have tried; and look at how the DNC treats her.


This means revitalizing our state department and charging our diplomats to develop creative solutions for ever more urgent challenges. It means working with like-minded partners to promote our shared interest in sustained, inclusive global economic growth and an international trade system that protects workers and the environment, not just corporate profits. And it means reducing wasteful defense spending and refocusing on the areas most critical to our security in years to come.


Well, apart from the fact that we’ve seen some of those diplomats in the Schiff hearings, and they seemed like the least likely people to develop anything “creative” -other than their opinions-, and the boondoggle of “sustained, inclusive global economic growth”, it’s probably best to forget about that entire paragraph. It’s nicer to Warren too.


Alliances are not charities, and it’s fair to ask our partners to do their share. I will build on what President Obama started by insisting on increased contributions to NATO operations and common investments in collective military capabilities. But I will also recognize the varied and significant ways that European states contribute to global security – deploying troops to shared missions, receiving refugees, and providing development assistance at some of the highest per capita rates in the world.


The problem appears to be that the partners don’t increase their contributions. Just this March, Germany refused to do just that. And if Berlin refuses, why would other countries spend more?


The next president must tackle our common problems using the lessons of common defense. Together, we can counter terrorism and proliferation. We can make common cause in constructing new norms and rules to govern cyberspace. We can dismantle the corruption, monopolies and inequality that limit opportunity around the world and take on the increasingly grave threats to our environment. We can and will protect ourselves and each other – our countries, our citizens and our democracies.


Now we’re getting into entirely nonsensical territory, with words and sentences designed only to make people feel good about things that have no substance whatsoever. Anyone can go there, anyone can do that.

In the meantime, the neverending investigations into Trump, Russia, Ukraine, taxes, have had one major effect: he hasn’t had a chance to have a summit with Putin. And that, to go back to how I started out this essay, is the worst idea out there. If Reagan and Bush sr. did those summits all the time, then why do we now think such summits are the work of the devil?

And yeah, we get it, we got it again last week from alleged law expert Pamela Karlan in the House, who let ‘er rip on the dangers Putin poses to all of humanity, and of course she would never trust Trump to hold any such summit because he’s Putin’s puppet.

What Pamela, and all the MSM, and the Dems, and the FBI/CIA, appear to refuse to see, though, is that Trump was democratically elected by the American people to be the only one who can have any such conversation. Karlan again talked about how Russia would attempt to attack American soil unless “we” keep them from doing that.

Now I can say that is absolute bollocks, and it is, but how many -potential- Democratic voters will recognize that at this point? They’ve been trained to believe it. That Russia wants one US presidential candidate over another, or one UK one, or fill in your country, and therefore they want to invade the US, UK, etc. In reality, Russia has plenty problems of its own, and it’s slowly trying to solve them.

The two countries need to start talking to each other again, and the sooner the better. That it will happen under Elizabeth Warren, however, is very unlikely. First because she has her mind made up about Russia, and second because the likelihood of her becoming president is very low. What do you think, is that a good thing?

If for some reason -who can tell- she would end up winning 11 months from now, do you think she’s likely to establish a peace treaty with Russia? You know, given what she wrote here? And if not, why would you vote for her? Don’t you want peace? Do you think antagonizing Putin forever is a good idea? While Russia continues to outperform America in arms development, and in just about any field? While Russia only wants peace?

Good questions, ain’t they, as we move into 2020?!




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Dec 112018
 December 11, 2018  Posted by at 8:45 pm Primers Tagged with: , , , , , , , , , , ,  4 Responses »

Wilhelm Trübner A Gorgon‘s head 1891


The news still isn’t the news, and I’m getting afraid it never will be again, because not the news just simply sells so much better than plain old real events. Maria Butina suddenly popped back into the public eye, because she was either charged with something or confessed to it. And I’m thinking, excuse me, but that poor girl has been kept in isolation for how long now? And for what reason exactly?

I vividly remember thinking that when she first became ‘news’ for ‘infiltrating’ the NRA, for which there were plenty cute pictures taken, I remember thinking she would have been 22 or 23 years old when as a super- devious Russian redhead she allegedly penetrated the trillion dollar NRA, and the trillion dollar Republican Party, and the Trump campaign, which according to some people is now worth negative $1 trillion.

If any of said organizations allow for a 22-year old to take all of their most secret and damning secrets and send them to her alleged puppet master Vladimir Vladimirovich, I say they deserve everything they’re getting. But it IS the sort of thing that if you want to report it like it’s actual news, you sure need to be convincing, you need proof, that sort of thing, not the anti-Putin innuendo US media rely on as their main standard today. Butina with no proof is just a nice by now 30-year old girl who happens to be Russian.

As for the Trump campaign having a negative $1 trillion value, I derive that from all the people who’ve once again, after a handful Mueller tidbits, started saying the Donald will be impeached any moment now, and many around him will go to jail for decades. You know, I can read too, and that’s not what I see. Much of what I see comes down to the reasoning that Trump has not yet been impeached as President because .. he is the President.

Yes, that is pretty funny, but it’s not humor beyond my abilities, and I’m not a comedian by trade. We’re still, even after those Mueller bits, stuck with Papadopoulos who’s been framed and went to jail for 2 weeks for it (shame on Mueller for that, deep deep shame!), there’s Cohen who lost his tracks in between lying for Trump and lying about Trump, and Manafort, a thirteenth wheel on a wagon of which there are dozens in DC, fixers and handlers.

You tell me why Manafort faces years in jail while Rahm Emanuel became mayor of Chicago. But if you’d actually want to explain, I suggest you prepare well, maybe talk to a few lawyers in the process. Washington attracts shady characters like dung beetles to horse shit and honey bees to Mountain Dew, and only a special counsel would ever think of picking them off one by one if he can’t find any of the actual crimes that he was appointed for to find. Cue: Rahm Emanuel.


Meantime my pal in arms Jim Kunstler thinks Michael Flynn is laying low as Mueller whoops his ass because he can, only to hit back at Mueller as soon as he’s freed from what are at best shaky allegations. Talking to a Russian is not a crime, not even, or even especially, when you’re the security adviser to the next president.

Michael Flynn’s real suspicious job was advising Turkey on security issues, but then that’s not what Mueller targeted him for. So yeah, let Flynn rise. And once again, don’t let’s forget that he said when the whole circus began, that he saw no way he could defend himself against anything Mueller might have thrown at him, that his entire family was on the verge of bankruptcy.

“But you talked to a Russian!” say the news media. Cue mushroom clouds in the remote background. But don’t you see, Trump is a criminal with decades of crimes under his belt, and all of his family are too! Look, I don’t know these people, and I’m fine not knowing them, not my cup of tea, but how much time did any of them spend behind bars so far?

And now they would have to go to jail just because Donald was elected president and the DOJ appointed a friendly ex-FBI head special counsel on the basis of a dossier paid for by his political opponents? To what extent does that spell justice to you? Yes, feel free to cue Rahm Emanuel again.

See, if certain people can be sent to jail because they rise too high in certain circles that don’t want them to disturb the power inherent in their sphere, while other operatives from the exact same mold though perhaps another political affiliation, are nominated to lofty and lucrative careers and positions, isn’t there something awry?

Are any of them perfectly innocent? Hell no, but then if they were, they wouldn’t be in the positions they’re in, the very positions that allow Robert Mueller to target them. From that point of view, it obvious it’s just a little power game played out in front of your eyes, you who have nothing to do with it but think you’re supposed to have an opinion on it.

Is Donald Trump a worse and bigger criminal than George H.W. Bush was? One half of America can answer that in no time flat. The other is thinking they wouldn’t be so sure. How many people has the Donald condemned to death so far? And he’s already about half way through the time Bush41 spent in the White House.

Perhaps it’s not about who’s a criminal, but about who’s the prosecutor. And with Mueller’s role in the sordid Whitey Bulger tale, and his even more sordid testimony in the Iraq WMD fantasies that led to millions of legalized murders celebrated as victory by both Washington and the US media, which kettle is blaming which pot here?


But hey, I’m ready to be corrected. And it’s by no means just the US that feels twisted these days, either. How about French president Emmanuel Macron, who hadn’t addressed his people live for 10-12 days as the Yellow Vests protests just got worse and more violent by the day, and then yesterday decided to make his long awaited response to them through a pre-recorded video? Honestly, how far removed from reality can one be?

The only answer Macron has to the thousands of people who want him out, and who have been willing to express that opinion in 4 consecutive weekends, is money. He thinks if he gives them €100 a month extra, and some tax breaks, they’ll let them continue on his little Napoleon trip. Well, if they do, we’ll know who they are. But are they? I don’t think Macron counts on that.

And then, as Macron increasingly retreats into his little palace(s), cue Marie Antoinette, only to communicate with the unwashed masses who want him gone through pre-scripted and recorded promises of crumbs off his table in exchange for no power at all, British PM Theresa May reacts to her latest and ostensibly worst -though it’s hard to keep track- defeat by … fleeing the country.

That’s how its ‘leaders’ rule Europe these days. Angela Merkel says she’s gone, though she wants to be Chancellor until 2021 (that way no-one can hold her responsible for anything), Theresa May hops on a plane to Europe to grovel some hopelessly more in her already defeated stance.

And Macron has his servants shove crumbs off his table, a gesture that still costs him more than everything Salvini and Di Maio wanted to do in Italy which got them whistled down by Brussels. C’mon, who still believes in the EU? Everyone’s running away from it.

If Macron must hide from his own French people, how can he reform the EU? If May must flee the UK and go to the EU to get a Brexit deal, what’s her authority back home where 50% voted against that same EU?

And if Merkel can only remain in charge by relinquishing her power, who exactly’s going to run Europe? It’s kind of like the same question as for the US. Who’s going to run it? Not Trump, if Mueller and the Democrats have any say although they lost the election. Not Hillary, says about everyone else.


We all tend to think that these things are normal and eternal. Just politics. But all the usual suspects appear to be under siege. In Europe, France, UK, Germany are shaking heavily. Italy’s already overboard. That’s the biggest 4 EU members. That’s the EU. No certainties, no future, though the EU itself will never admit it, and instead just push for more EU.

And what’s certain politically in the US anymore? Trump has eviscerated the entire GOP, and I’m not saying that’s a bad thing. The Democrats killed off Bernie Sanders to allow Hillary to continue her dead before arrival power grab. She came she saw she lost.

My point, I think, is that political strongholds are being defeated everywhere at the same time. And when that happens, there’s always a reason for it. I think that reason can be found in the fact that the global economy is rumbling and crumbling as we speak, with politics and economics acting as precursors for one and other.

Like, Macron can only save his political ass by violating the EU budget terms he just chided Italy for. Merkel can only save her legacy by creating a situation she’s no longer responsible for. And Theresa May would be well advised, now that she’s on the continent, to simply stay there and let Britain figure things out without her.

The US won’t and can’t be so lucky. We’re still up for much more, marathon more, of Trump vs Mueller, and there will be many more courts and judges who have to speak on all of it before there’s anything even remotely resembling a conclusion. Because the whole Mueller circus -reluctantly- threatens to open up a Pandora swamp that’s been DC’s lifeblood forever.

Yeah, you got your Flynn and Manafort, but you also got your Podesta brothers. Yeah, there’s the Trump Foundation, but there’s also the Clinton Foundation, and Uranium One. Who’s worse? Good one!

Both things should be investigated, it shouldn’t just be Trump and Mueller, Hillary and the DNC and Comey etc etc also must be under the microscope. Or America will forever lose its faith in democracy. Not that there’s much of it left, mind you, but hey, at the very least it’s the thought that counts.

Bottom line: it all appears to be about local, domestic, national politics, but don’t be deceived: the global economy is tanking, and all of the political mayhem on all these levels is just a derivative of that. The dinosaurs want to live another day.

None of which is going to make your situation any better, but who knows, you just might feel better about it for a bit. Until you don’t.



Dec 022018
 December 2, 2018  Posted by at 10:53 am Finance Tagged with: , , , , , , , , , , , , , ,  5 Responses »

Claude Monet Camille Sitting on the Beach at Trouville 1870-71


US Markets To Close On Wednesday In Honor Of George H.W. Bush
US, China Agree To Trade War Ceasefire, More Talks (AFP)
Putin Refuses To Release Ukrainian Sailors And Ships (G.)
Putin Briefs Trump Over Ukraine As EU Leaders Up Pressure (AFP)
Mattis Says Russia Tried To ‘Muck Around’ US Vote, Again (AFP)
Mueller’s RussiaGate Probe: Conflicts and Special Interests (Adam Carter)
Trump To Notify Congress In ‘Near Future’ He Will Terminate NAFTA (R.)
Property Investors Can’t Expand As Lending Rules Toughen Up (NewsCorp)
France Is Deeply Fractured. Gilets Jaunes Are Just A Symptom (Guilluy)
Theresa May Faces Fresh Battle Over Publishing Brexit Legal Advice (BBC)
How Greece’s Financial Crisis Led To A Baby Bust (WaPo)



No, no, no, what a missed opportunity! They should have shut down the military instead for a day, or the CIA. And preferably longer than one day. But Bush had nothing to do with the markets.

US Markets To Close On Wednesday In Honor Of George H.W. Bush

Major U.S. markets will be closed on Wednesday in honor of former U.S. President George H.W. Bush. The New York Stock Exchange and Nasdaq will both close on Wednesday in observance of the National Day of Mourning after Bush’s death Saturday at the age of 94. Both the NYSE and Nasdaq will also observe a moment of silence at 9:20 a.m. ET on Monday. U.S. President Donald Trump on Saturday ordered the federal government to close on Wednesday out of respect for Bush. Federal Reserve Chairman Jerome Powell is scheduled to testify on Wednesday on the economic outlook before the congressional Joint Economic Committee. A spokesman for the committee did not immediately respond to questions on Saturday about whether the hearing would be rescheduled.

Read more …

How predictable would you like it?

US, China Agree To Trade War Ceasefire, More Talks (AFP)

US President Donald Trump and China’s Xi Jinping agreed Saturday to suspend any new tariffs in the escalating trade war between the world’s two largest economies, even if huge existing duties will remain in place. Following more than two hours of dinner talks between the two leaders, the White House said an increase of tariffs from 10 to 25 percent due to kick in on January 1 would now be put on hold, providing room for intense negotiations. The agreement, hashed out over steak in the Argentine capital Buenos Aires, lowers the temperature in a conflict that has spooked world markets. The two leaders, who were in Buenos Aires for a summit of the G20 countries, called it “a highly successful meeting,” the White House said.

“The principal agreement has effectively prevented further expansion of economic friction between the two countries and has opened up new space for win-win cooperation,” said Chinese Foreign Minister Wang Yi. Under the agreement, Trump is shelving a plan to raise existing tariffs of 10 percent to 25 percent from the start of next year. However, the truce is only partial. Some $50 billion worth of Chinese imports already face 25 percent tariffs while the 10 percent tariffs, which target a massive $200 billion in goods, will also remain in effect. Meanwhile, China has targeted $110 billion worth of US imports for tariffs. If there is any further retaliation, Trump has warned, he will slap punitive duties on the remaining $267 billion in Chinese goods coming to the United States.

And Saturday’s truce also contained an ultimatum. The White House made clear that the 10 percent tariffs would still leap up to 25 percent if China doesn’t meet US demands in 90 days. These include China stopping a host of trade barriers, intellectual property theft and other actions that Washington say make fair trade impossible. Tough negotiations lie ahead, but Trump was upbeat. “This was an amazing and productive meeting with unlimited possibilities for both the United States and China. It is my great honor to be working with President Xi,” he said in a statement.

Read more …

From Twitter: “Martial Law prohibits the diffusion of military movements in #Ukraine therefore won’t post the Armed Forces movements but I can safely say that #Odessa is being heavily prepared for war.”

Look, “sailors and ships?” They were armed navy vessels with soldiers, not fishing boats with civilians.

Putin Refuses To Release Ukrainian Sailors And Ships (G.)

Vladimir Putin has said it is “too early” to return Ukrainian sailors and naval vessels seized by Russia in the Sea of Azov, accusing the Ukrainian government of provoking an incident as a distraction from domestic problems. Putin was speaking to reporters after the G20 summit in Buenos Aires, where Donald Trump cancelled a meeting with the Russian leader because of Moscow’s refusal to release the 24 Ukrainians. The Russian president said it was necessary to detain the captives while a legal case was put together to demonstrate that the three Ukrainian naval vessels violated Russia’s territorial waters. He said the ships’ logs would show that their attempt to cross the Kerch strait from the Black Sea into the Sea of Azov – enclosed by Russia, the Crimean peninsula and mainland Ukraine – was a deliberate provocation.

Asked if he might consider exchanging the captive sailors for Russians in Ukrainian detention, Putin said: “We are not considering a swap and Ukraine did not raise this issue, and it’s too early to talk about that. They are still being investigated. “We need to establish the fact that this was a provocation by the Ukrainian government and we need to put all these things on paper,” he added, arguing that the incident was part of a wider pattern of Ukrainian provocation. “The current Ukrainian leadership is not interested in resolving this at all,” Putin said. “As long as they stay in power, war will continue. Why? Because when you have provocations, such hostilities like what just happened in the Black Sea … you can always use war to justify your economic failures.”

Read more …

Putin has finally put his foot down. Has he taken too long? if he’d done it earlier, would Ukraine try such stunts?

Putin Briefs Trump Over Ukraine As EU Leaders Up Pressure (AFP)

Russian President Vladimir Putin said Saturday he briefed his US counterpart Donald Trump on the Ukraine crisis as he came under pressure over Moscow’s robust foreign policy at the G20 summit in Argentina. Putin said he explained Moscow’s position to Trump when the leaders met briefly at a summit dinner Friday. “We spoke standing up. I replied to his questions about the incident in the Black Sea,” Putin told reporters at the end of the summit. Putin strode into the summit under a cloud, having drawn outrage from Europe over last week’s incident in which his navy detained three Ukrainian ships and 24 sailors – causing Trump to abruptly cancel their scheduled meeting. Ukraine President Petro Poroshenko kept up the pressure from Kiev, saying Putin had refused to take his calls since the crisis started.

[..] Away from the summit, US Defense Secretary Jim Mattis said Moscow had shown “brazen contempt” for a deal “that allowed both Russian and Ukrainian ships free passage.” Putin – who has praised his navy for defending Russian territory – “provided exhaustive explanations on this incident in the Black Sea, explaining everything in detail, in exactly the same manner as yesterday during his meeting with the French president,” Kremlin spokesman Dmitry Peskov told Interfax. Far from offering comforting words, Putin said at a post-summit press conference he saw no end in sight to the four-year conflict in eastern Ukraine “as long as the current Ukrainian authorities remain in power.” “The current Ukrainian authorities have no interest in resolving the conflict, especially by peaceful means,” he said.

Read more …

Oh, let’s see the evidence or shut up. And stop mucking around in Russia and Ukraine while you’re at it.

Mattis Says Russia Tried To ‘Muck Around’ US Vote, Again (AFP)

US Defense Secretary Jim Mattis said Saturday that Russia tried to meddle in the US midterm elections last month – just as it did in the 2016 vote that brought President Donald Trump to power. The already strained ties between Washington and Moscow have “no doubt” worsened over Russian’s continued attempts to interfere in the US voting process, Mattis said at the Reagan National Defense Forum in California. Russian President Vladimir Putin “tried again to muck around in our elections this last month, and we are seeing a continued effort along those lines,” the Pentagon chief said. Putin has “continued efforts to try to subvert democratic processes that must be defended,” Mattis said, stressing he was unsure whether there were growing threats from Russia.

“We’ll do whatever is necessary to defend them.” Mattis spoke as President Donald Trump suddenly scrapped a planned meeting with Putin at the G20 summit of world leaders in Buenos Aires, Argentina, citing a Russian military intervention in Ukraine. Ahead of last month’s vote, Twitter and Facebook shut down thousands of Russian-controlled accounts, while 14 people from Russia’s notorious troll farm, the Internet Research Agency, were indicted. And US law enforcement agencies warned that “Americans should be aware that foreign actors – and Russia in particular – continue to try to influence public sentiment and voter perceptions through actions intended to sow discord.”

Read more …

Robert Mueller comes with a long history. That’s why he was picked.

Mueller’s RussiaGate Probe: Conflicts and Special Interests (Adam Carter)

Robert Mueller was the director of the FBI between 2001 and 2013, spanning both Bush and Obama administrations. He was appointed as special counsel to investigate Russian interference in the 2016 United States general election on May 17, 2017. Since his appointment, Mueller has been promoted as a champion of justice and a pursuer of truth by the mainstream press. He has been hailed as incorruptible by some and “America’s straightest arrow” by others. However, history shows us that Mueller investigating anything may, inherently, come with disadvantages when it comes to the pursuit of truth. According to whistleblowers, under Mueller’s leadership, crimes and scandals involving both government officials and the private-sector were ignored or covered-up by the FBI, and there are questions about further cover-ups before he became the agency director.

In July 2017, FBI whistleblower Coleen Rowley wrote an article titled “No, Robert Mueller And James Comey Aren’t Heroes” in which the author details the not-so-perfect history of both Mueller and Comey, suggesting that those lionizing the pair may be suffering from amnesia. Rowley explains that Mueller and Comey presided over post-9/11 cover-ups, secret abuses against the Constitution, enabled Bush/Cheney fabrications used as the pretext for waging war and demonstrated incompetence. The article also references Mueller’s attempts to mislead everyone following 9/11 and Rowley’s efforts to challenge Mueller on his silence about what he knew.

Going further, Rowley covers Mueller’s bungled Amerithrax investigation that targeted an innocent man, violations of privacy, infiltration of non-violent anti-war groups and also references Mueller’s history before being director of the FBI: “Long before he became FBI Director, serious questions existed about Mueller’s role as Acting U.S. Attorney in Boston in effectively enabling decades of corruption and covering up of the FBI’s illicit deals with mobster Whitey Bulger and other “top echelon” informants who committed numerous murders and crimes. When the truth was finally uncovered through intrepid investigative reporting and persistent, honest judges, U.S. taxpayers footed a $100 million court award to the four men framed for murders committed by (the FBI operated) Bulger gang.”

Earlier this year, Republican congressman Louie Gohmert also highlighted various issues in a report titled “Robert Mueller Unmasked” that opened with a bold assertion: “Robert Mueller has a long and sordid history of illicitly targeting innocent people that is a stain upon the legacy of American jurisprudence. He lacks the judgment and credibility to lead the prosecution of anyone.”

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This will easily lead into January and the Democratic Congress. Let the courts decide.

Trump To Notify Congress In ‘Near Future’ He Will Terminate NAFTA (R.)

U.S. President Donald Trump said on Saturday he will give formal notice to the U.S. Congress in the near future to terminate the North American Free Trade Agreement (NAFTA), giving six months for lawmakers to approve a new trade deal signed on Friday. “I will be formally terminating NAFTA shortly,” Trump told reporters aboard Air Force One on his way home from Argentina. “Just so you understand, when I do that – if for any reason we’re unable to make a deal because of Congress then Congress will have a choice” of the new deal or returning to trade rules from before 1994 when NAFTA took effect, he said. Trump told reporters the trade rules before NAFTA “work very well.” NAFTA allows any country to formally withdraw with six months notice.

Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto signed a new trade agreement on Friday known as the United States-Mexico-Canada Agreement (USMCA). Trump’s decision to set in motion a possible end to largely free trade in North America comes amid some skepticism from Democrats about the new trade deal. The U.S. landscape will shift significantly in January when Democrats take control of the House of Representatives, after winning mid-term elections in November. Presumptive incoming Speaker of the House Nancy Pelosi described the deal as a “work in progress” that lacks worker and environment protections.

“This is not something where we have a piece of paper we can say yes or no to,” she said at a news conference on Friday, noting that Mexico had yet to pass a law on wages and working conditions. Other Democrats, backed by unions that oppose the pact, have called for stronger enforcement provisions for new labor and environmental standards, arguing that USMCA’s state-to-state dispute settlement mechanism is too weak. A 2016 congressional research report said there is a debate over whether a president can withdraw from a trade deal without the consent of Congress, and there is no historical precedent for the unilateral withdrawal from an free trade deal by a president that had been approved by Congress. The issue could ultimately be decided by the U.S. courts.

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From Australia, for the entire western world.

Property Investors Can’t Expand As Lending Rules Toughen Up (NewsCorp)

Property investors wanting to expand their holdings are finding doors slamming in their faces as new lending restrictions bite hard. Harsher income tests, tighter rules for interest-only loans, tax changes and tougher assessments of rents and repayments have put the brakes on, and lending specialists believe more squeezing is likely. Almost one-third of the nation’s 2.1 million residential real estate investors own more than one property, according to Australian Taxation Office data, and many see it as their ticket to retirement wealth instead of the struggling share market. However, expanding beyond one investment property has become much tougher this year amid factors including:

• Investors’ ability to repay is now being based on interest rates between 7.25 and 8 per cent, rather than the 4 per cent many are currently charged. • Lenders only count 70 per cent of a property’s rental income. • Interest-only loans, popular among investors, are harder to come by and harder to continue, resulting is higher repayments when they switch to principal-and-interest. The result is that potential investment loans are assessed as unaffordable even if the investor has no problems paying it back.

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Yet another analysis of how the left abandoned its voters. Meanwhile, gilets jaunes are now active in Belgium and Holland. If they can organize well enough, they’re here to stay for a while.

France Is Deeply Fractured. Gilets Jaunes Are Just A Symptom (Guilluy)

From the 1980s onwards, it was clear there was a price to be paid for western societies adapting to a new economic model and that price was sacrificing the European and American working class. No one thought the fallout would hit the bedrock of the lower-middle class, too. It’s obvious now, however, that the new model not only weakened the fringes of the proletariat but society as a whole. The paradox is this is not a result of the failure of the globalised economic model but of its success. In recent decades, the French economy, like the European and US economies, has continued to create wealth. We are thus, on average, richer. The problem is at the same time unemployment, insecurity and poverty have also increased.

The central question, therefore, is not whether a globalised economy is efficient, but what to do with this model when it fails to create and nurture a coherent society? In France, as in all western countries, we have gone in a few decades from a system that economically, politically and culturally integrates the majority into an unequal society that, by creating ever more wealth, benefits only the already wealthy. The change is not down to a conspiracy, a wish to cast aside the poor, but to a model where employment is increasingly polarised. This comes with a new social geography: employment and wealth have become more and more concentrated in the big cities. The deindustrialised regions, rural areas, small and medium-size towns are less and less dynamic.

But it is in these places – in “peripheral France” (one could also talk of peripheral America or peripheral Britain) – that many working-class people live. Thus, for the first time, “workers” no longer live in areas where employment is created, giving rise to a social and cultural shock. It is in this France périphérique that the gilets jaunes movement was born. It is also in these peripheral regions that the western populist wave has its source. Peripheral America brought Trump to the White House. Peripheral Italy – mezzogiorno, rural areas and small northern industrial towns – is the source of its populist wave. This protest is carried out by the classes who, in days gone by, were once the key reference point for a political and intellectual world that has forgotten them.

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May digging her hole ever deeper. As if people have no right to know what’s coming.

Theresa May Faces Fresh Battle Over Publishing Brexit Legal Advice (BBC)

Opposition parties plan to join forces in a bid to force the government to publish the full legal advice it received ahead of the Brexit agreement. “All parties” would press for contempt of Parliament proceedings if MPs are not shown the advice, Labour’s Brexit spokesman Sir Keir Starmer has said. Theresa May has promised MPs only a summary of the legal position. Some MPs believe the advice given suggests the Northern Ireland “backstop” would continue indefinitely. [..] on Monday Attorney General Geoffrey Cox, who wrote the advice, will offer only a limited summary of the legal advice given to government, during a statement to Parliament.

Ministers insist it is a long-standing convention that legal advice to the cabinet is kept confidential, and that government would otherwise be unable to function. The prime minister’s refusal to release the full advice prompted Northern Ireland’s Democratic Unionist Party – which has propped up Mrs May’s government since the general election in 2017 – to accuse her of having “something to hide”. Shadow Brexit secretary Sir Keir wrote in the Sunday Telegraph: “If the full legal advice is not forthcoming, we will have no alternative but to start proceedings for contempt of Parliament – and we will work with all parties to take this forward. “The full legal implications of this deal clearly need to be known and debated in full by our Parliament.”

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Austerity truly is death by a thousand cuts.

How Greece’s Financial Crisis Led To A Baby Bust (WaPo)

During the country’s deep and prolonged crash, which began in late 2009 and worsened in 2011 and beyond, an already-low birthrate ticked down further, as happened throughout the troubled economies of Southern Europe. Greece was also hit by a second factor, with half a million people fleeing the country, many of them young potential parents. Although Greece has been on the front lines of the migrant wave from the Middle East and North Africa, the majority of new arrivals have moved on to other parts of Europe, and the newcomers don’t make up for the losses. As a result, the country’s recession has helped produce postwar Greece’s smallest generation — a group of young children who are now reaching elementary age, some arriving at schools wearing secondhand shoes and backpacks, and who are only at the earliest stages of grasping the daunting era they’ve been born into.

“The kids don’t know we used to be better off,” said Sotiria Papigioti, the mother of a first- and a second-grader at Kalpaki. “But when they ask for things, I tell them, ‘We’re not in the position to afford this.’ ” Greece’s fertility rate, of about 1.35 births per woman, is among the lowest in Europe, and well below the rate of 2.1 needed for a stable population, not accounting for immigration. The fertility rate in Greece had been on the upswing before the crisis, hitting 1.5 births per woman in 2008. That progress has since been erased, and the birthrate has plummeted back toward the depths seen in the late 1990s and early 2000s.

Some countries, in the aftermath of economic crises, have seen a quick recovery in their fertility rates. But that is unlikely to happen in Greece, said Byron Kotzamanis, a demographer at the University of Thessaly, because even before the crisis the average woman in Greece wasn’t having children until age 31. Some women who postponed pregnancy during the recession have lost out on their chance entirely. As a result, Kotzamanis said, the recession has permanently reduced the size of the newest Greek generation — and has reduced the pool of parents in years to come. “We’ll have fewer and fewer births in Greece over the next decades,” Kotzamanis said.

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Dec 012018
 December 1, 2018  Posted by at 11:27 am Finance Tagged with: , , , , , , , , ,  8 Responses »

Vincent van Gogh Sunflowers 1887


The Bush Dynasty – The Modern Kennedys (BBC)
America’s Compromised Leader (Guardian Op-Ed)
Trump Calls Russia Deal ‘Legal And Cool’ As Mueller Inquiry Gathers Pace (G.)
US Judge Delays Ruling On Comey’s Request To Quash Republican Subpoena (R.)
Deep Quandaries of The Deep State (Kunstler)
US ‘Could Be Entering Cold War With China’ Over Trade – Stephen Roach (CNBC)
Trump-Xi Trade Talks Could Lead To ‘Explosion’ Higher Or A Bear Market (CNBC)
Powell Shouldn’t Follow Greenspan’s Example At Fed – Stephen Roach (CNBC)
Finally, Senate Might Force Trump’s Hand On Yemen (R.)
The Khashoggi Effect: Erdogan Inverts the Paradigm (Crooke)
Google Staff Mulled Burying Conservative Media Deep In ‘Legitimate News’ (RT)



There was just 7 years of age difference between both Jack Kennedy and George Bush. Not enough to be modern anything. Call them the lesser Kennedys. Over-ambitious sociopath dads. And two military careers.

The Bush Dynasty – The Modern Kennedys (BBC)

George Bush Snr’s death underlines that while the Kennedys still remain the premier US political dynasty, the Bush family can also stake a claim to be up there on the top table. With a grandfather who served in the US Senate, a father and son as former occupants of the White House, and a third member a former state governor, the Republicans have a family to match the Democratic Party. George Herbert Walker Bush was born into a wealthy family, the grandson of a steel industrialist, Samuel Prescott Bush, who was named to a national commission on the economy by President Herbert Hoover.

His father, Prescott Sheldon Bush, was a successful investment banker who became partner at his Wall Street firm, and became the first family member to enter politics. He was elected to the Senate in 1952, where he was a staunch supporter of President Dwight Eisenhower. Prescott’s connections and wealth helped his son, George H W Bush, make a fortune in the oil industry before he entered politics in the 1960s and eventually became the 41st president.

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Thought I’d include this to show you that the Guardian is not just after Assange, and it’s not just Luke Harding writing hit pieces. Here are the editors. They are sort of careful in that they say: what we say is probably not true, but imagine if it were! Wouldn’t that be terrible?!

America’s Compromised Leader (Guardian Op-Ed)

Earlier this week Donald Trump stood on the south lawn of the White House and ridiculed Theresa May’s Brexit agreement as a “great deal for the EU”. He is likely to make the same contemptuous case during the G20 summit in Argentina this weekend, although pointedly there is no planned bilateral. Given the political stakes facing her back home, Mrs May must feel as if 14,000 miles is a long way to travel for the weekend merely to be trashed by supposedly her greatest ally. When this happens, though, who does Mrs May imagine is confronting her? Is it just Mr Trump himself, America First president, sworn enemy of the international order in general and the European Union in particular?

That’s a bad enough reality. But might her accuser also be, at some level, Vladimir Putin, a leader whose interest in weakening the EU and breaking Britain from it as damagingly as possible outdoes even that of Mr Trump? That prospect is even worse. Such speculation would normally seem, and still probably is, a step too far. The idea that a US president is in any way doing the Kremlin’s business as well as his own is the stuff of spy thrillers and of John le Carré TV adaptations. Yet the icy fact is that the conspiracy theory may now also contain an element of truth.

[..] Days before he took office in 2017, Mr Trump said that “the closest I came to Russia” was in selling a Florida property to a Russian oligarch in 2008. If Mr Cohen’s statement is true, Mr Trump was telling his country a lie. What is more, the Russians knew it. Potentially, that raises issues of US national security. If Mr Putin knew that Mr Trump was concealing information about his Russian business interests, this could give Moscow leverage over the US leader. Mr Trump might feel constrained to praise Mr Putin or to avoid conflicts with Russia over policy. All this may indeed be very far-fetched. Yet Russia’s activities in the 2016 election against Hillary Clinton and in favour of Mr Trump are not fiction.

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Ok, more Guardian. Note the headline. And realize there never was a deal. Which the article acknowledges of course. Just not in the headline.

Trump Calls Russia Deal ‘Legal And Cool’ As Mueller Inquiry Gathers Pace (G.)

Donald Trump, drawn deeper into an investigation into Russian meddling in US elections, has defended his pursuit of a business deal in Moscow at the same time he was running for president as “very legal & very cool”. Trump appeared rattled this week after Michael Cohen, his former personal lawyer, confessed that he lied to Congress about a Russian property contract he pursued on his boss’s behalf during the Republican primary campaign in 2016. The surprise admission cast the president himself as a pivotal figure in Special Counsel Robert Mueller’s investigation into alleged collusion for the first time. In a series of tweets from Buenos Aires, where he is attending the G20 summit, Trump recalled “happily living my life” as a property developer before running for president after seeing the “Country going in the wrong direction (to put it mildly)”.

Cohen told two congressional committees last year that the talks about the tower project ended in January 2016, a lie he said was an act of loyalty to Trump. In fact, the negotiations continued until June that year, after Trump had secured the Republican nomination, Cohen admitted. Cohen told Mueller’s prosecutors that he briefed Trump on the project more than three times. He also briefed members of Trump’s family, had direct contact with Kremlin representatives and considered traveling to Moscow to discuss it. Trump condemned Cohen after the plea deal was announced, calling him “a weak person” and a liar. As he departed for Buenos Aires, he acknowledged his business dealings with Russia, telling reporters: “It doesn’t matter because I was allowed to do whatever I wanted during the campaign.”

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Comey hopes to make it to 2019 without having that hearing. As Jim Kunstler also figured out, in an open setting Comey could plead something about national security. In a closed setting he could not.

US Judge Delays Ruling On Comey’s Request To Quash Republican Subpoena (R.)

A federal judge on Friday delayed a decision on whether to block U.S. House Republicans from compelling former FBI Director James Comey to testify next week in secret about his actions on investigations leading up to the 2016 presidential elections. Judge Trevor McFadden, who was appointed to the U.S. District Court for the District of Columbia by President Donald Trump, said he wanted to review the case over the weekend before making a ruling and scheduled a follow-up hearing for Monday at 10 a.m. He also told Comey’s attorney, David Kelley, to submit a follow-up brief to help inform his opinion by Sunday afternoon.

Friday’s hearing came about after Comey’s lawyers this week asked the court to quash a Nov. 21 congressional subpoena ordering him to appear before the House of Representatives Judiciary Committee for a closed-door deposition and stay the congressional proceedings. Comey’s lawyer argued his client will only agree to appear if his testimony is public, and on Friday Kelley accused the committee of trying to keep the testimony secret so lawmakers could selectively leak it to peddle partisan narratives. “They want to have unfettered access in a closed session,” Kelley said Friday. “They don’t want all the other members asking questions. They want to zero in and gang up.” Republicans had initially ordered Comey to appear on Monday, but Thomas Hungar, a lawyer for the House, said Friday that Comey’s deposition is now being pushed back to Tuesday.

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“If he were questioned about classified matters in an open session, he would do exactly what he did before in open session: decline to answer about “sensitive” matters on the basis of national security.”

Deep Quandaries of The Deep State (Kunstler)

My guess is that this stuff amounts to a potent weapon against his adversaries and he will wait until Mr. Mueller releases a final report before declassifying it. Then, we’ll have a fine constitutional crisis as the two sides vie for some sort of adjudication. Who, for instance, will adjudicate the monkey business that is already on-the-record involving misdeeds in the Department of Justice itself? Will the DOJ split into two contesting camps, each charging the other? How might that work? Does the Acting Attorney General Mr. Whitaker seek indictments against figures such as Bruce Ohr, Andrew McCabe, Peter Strzok, et al. Will he also rope in intel cowboys John Brennan and James Clapper?

Might Hillary find herself in jeopardy — all the while on the other side Mr. Mueller pursues his targets, characters like Mr. Manafort, Michael Cohen, and the hapless Carter Page? Or might Mr. Mueller, and others, possibly find themselves in trouble, as spearheads of a bad-faith campaign to weaponize government agencies against a sitting president? That might sound outlandish, but the evidence is adding up. In fact the evidence of a Deep State gone rogue is far more compelling than any charges Mr. Mueller has so far produced on Trump-Russia “collusion.” An example of bad faith is former FBI Director James Comey’s current campaign to avoid testifying in closed session before the House Judiciary and Oversight committees — he filed a motion just before Thanksgiving.

Mr. Comey is pretending that an open session would be “transparent.” His claim is mendacious. If he were questioned about classified matters in an open session, he would do exactly what he did before in open session: decline to answer about “sensitive” matters on the basis of national security. He could make no such claims in a closed session. The truth is, his attorneys are trying to run out the clock on the current composition of the house committees, which will come under a Democrat majority in January, so that Mr. Comey can avoid testifying altogether.

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This could last for years.

US ‘Could Be Entering Cold War With China’ Over Trade – Stephen Roach (CNBC)

The U.S. and China could be in the early stages of a Cold War, veteran economist Stephen Roach told CNBC Friday, warning the global trade dispute is likely last for a “long, long time.” His comments come ahead of a high-stakes meeting between President Donald Trump and Chinese premier Xi Jinping this week, as world leaders gather at the G-20 summit in Argentina. Simmering trade tensions between the world’s two largest economies are expected to dominate the summit’s agenda, with financial markets closely monitoring the prospect of a potential breakthrough.

“I think the end game is that this is a clash between two systems. And the U.S. is objecting to a state-sponsored ‘market-based socialist system’ that uses the largess of the state to subsidize industrial policy,” Roach, senior fellow at Yale University and former chairman of Morgan Stanley Asia, told CNBC Friday. “Even though, America has had industrial policy for decades but implements it through the military industrial complex orchestrated by the Pentagon. Japan does it, Germany does it, we are making it sound like China is the only one that does it,” he added. “What Mike Pence said is that these are going to be longstanding issues and that raises the possibility — echoed by a speech that (Former U.S. Treasury Secretary) Hank Paulson gave a couple of weeks ago — that we could be entering a Cold War with China that would last for a long, long time,” Roach said Friday.

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Covering all bases.

Trump-Xi Trade Talks Could Lead To ‘Explosion’ Higher Or A Bear Market (CNBC)

Wall Street is convinced a ‘deal’ of sorts will be announced after President Donald Trump meets with Chinese President Xi Jinping Saturday night to discuss the trade war that is creating issues for both nations’ economies. But the potential outcome could be very different than the truce and ceasefire envisioned by many investors. A desirable deal for stocks would be one where all further tariffs are put on hold while the two sides negotiate an agreement. The best case would be if there is even a roll back of some existing tariffs. International stocks would get the biggest boost, especially those traded in China, the rest of Asia, Australia and Germany, where the DAX index is down almost 13 percent this year, said Peter Boockvar, the chief investment officer at Bleakley Advisory Group. Shares of product makers like Apple could also benefit.

“While the U.S. market hopefully will benefit, especially the industrial stocks, it’s goods producing stocks that should benefit the most. That would be Apple, specifically,” Boockvar said. “But I think there’s a potential for overseas markets to benefit most since their economies have softened with these tariffs.” Earlier Friday, there was more negative news for the economy in China, where Shanghai stocks are down about 22 percent year-to-date. China reported factory activity slowed in November to a two-year low. Manufacturing PMI was reported at 50, considered neutral, while a number below 50 shows contraction. Analysts see a range of outcomes this weekend — the trigger for either an “explosion to the upside” or a “bear market.” It could also determine whether the stock market ends the year higher or in the red.

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Too much attention for Powell, it’s what you get when you have no markets.

Powell Shouldn’t Follow Greenspan’s Example At Fed – Stephen Roach (CNBC)

Federal Reserve Chairman Jay Powell would be wrong to copy the playbook of his predecessor Alan Greenspan, according to a Yale lecturer and former Morgan Stanley executive. Powell has been criticized by some market players, as well as by Donald Trump, who believe the central banker risks triggering a U.S. economic contraction by enforcing multiple rate rises next year. In the 1990s, then Fed-chair Greenspan took a watch-and-wait policy, keeping rates low to see if inflation would materialize in the face of a growing economy. At the Federal Reserve’s annual retreat to Jackson Hole, Wyoming, in August, Powell praised Greenspan’s do-nothing stance as sound risk management.

But Stephen Roach, a senior fellow at Yale University and former chairman of Morgan Stanley Asia, told CNBC on Friday that Powell would do well to learn from Greenspan’s mistakes. “The Greenspan ‘put’ supported markets a lot, but he also gave us lots of bubbles and crises that were spawned by those bubbles which I think history does not treat kindly at all,” he said. The veteran economist added that it was not “such a bad thing that Jay Powell is not a clone of Alan Greenspan.” Roach said the change in tone from the Fed chair was not an example of Powell bending to markets, or becoming more like Greenspan, but was more indicative that he was doing a real-time assessment of inflation risks. The economist added that should a trade war slow U.S. or global growth, he would expect the Fed to be far less aggressive on raising rates.

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Well, technically speaking, the Senate would force the Senate’s hand. They were there when Yeman started under Obama, Trump was not. And now they demand he clean up the mess they made?

Finally, Senate Might Force Trump’s Hand On Yemen (R.)

The U.S. Senate voted 63 to 37 on Wednesday to clear the way for a debate and final vote on a resolution to end American military support for the Saudi-led war in Yemen. It’s the first time that an anti-war resolution has advanced in Congress since Saudi Arabia and its allies intervened in Yemen’s civil war in early 2015. The vote, with an unexpectedly wide margin in a Senate typically gridlocked along partisan lines, underscores growing anger over American involvement in a war that is currently the world’s worst humanitarian crisis. But the vote, in which 14 Republicans joined all 49 Senate Democrats, was also a rebuke to President Donald Trump for doubling down on his support for Saudi Arabia’s Crown Prince Mohammed bin Salman, after Saudi agents murdered the dissident journalist Jamal Khashoggi inside the kingdom’s consulate in Istanbul.

Despite the initial Senate vote, the resolution may not ultimately be approved in its current form. Senators could demand amendments or change their minds before a final vote, and Trump has threatened a veto. Saudi Arabia and its allies are also poised to lobby behind the scenes to curtail the measure. And even if the United States ultimately withdraws its support, the Saudi coalition could continue the war for some time. But the vote was a setback for both Trump and Saudi leaders, who are trying to contain the fallout from Khashoggi’s murder.

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Wonder if Erdogan has more drips up his sleeve.

The Khashoggi Effect: Erdogan Inverts the Paradigm (Crooke)

Yes, as Pepe Escobar, lately was being told in Istanbul: “The Erdogan machine has sensed a once-in-a-lifetime opportunity [i.e. l’affaire Khashoggi], to simultaneously bury the House of Saud’s shaky Islamic credibility, while solidifying Turkish neo-Ottomanism, but with an Ikhwan [i.e. with a Muslim Brotherhood – style] framework”. This is heady stuff – maybe the Arab world is not so anxious to welcome back, with open arms, either the Ottomans or the Muslim Brotherhood. But nonetheless, with the Gulf so discredited in terms of its legitimacy, Erdogan is probably right to think that he is pushing at an ‘open door’.

And strategic interests are giving Erdogan a strong tail-wind in his bid. Erdogan has secured – as part of the package to try to get Turkey to ‘lay-off’ with its Khashoggi drip-drip leaks – an end to the Saudi siege on Qatar. It is possible too, as part of the deal, that the Qatari Emir (we are told) might visit Riyadh in the near future, and that some sort of cold – very frigid – reconciliation will be conducted with MbS. The point is that Qatar is greatly beholden to Erdogan for ending the siege (and for the earlier stationing of Turkish troops in the Emirate, to protect it, against any Saudi attack), and like Turkey, the Emir is a generous Muslim Brotherhood patron.

Turkey also enjoys a close strategic relationship with Iran (though they have their differences over Syria). The two states have a strong shared interest in seeing an end to American forces occupying parts of Syria, and putting a stop to the Israeli-sponsored Kurdish ‘project’ in the region. And again the Muslim Brotherhood enters into this equation — the latter’s flirtation with Saudi Arabia is finished, and parts of the movement (it is still fractured from the Gulf-led war against it) are returning to old comrades: Hizbullah and Iran (the Muslim Brotherhood never parted from Turkey). In short, the Muslim Brotherhood seem destined to become Turkey’s Arab foot-soldiers in the battle to take the mantle of Islamic leadership away from Saudi Arabia.

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Break ’em up. Ram through the FBI and CIA and save your democracy.

Google Staff Mulled Burying Conservative Media Deep In ‘Legitimate News’ (RT)

Several Google employees considered manipulating search results to muzzle right-wing voices, calling them a problem that “can and should be fixed,” according to internal conversations obtained by the Daily Caller. Googlers discussed how they could prevent a repeat of Trump’s 2016 victory in the future, weighing the risks and benefits of various forms of censorship. “Let’s make sure that we reverse things in four years – demographics will be on our side,” read one post by engineer Scott Byer. “How many times did you see the Election now card with items from opinion blogs (Breitbart, Daily Caller) elevated next to legitimate news organizations? That’s something that can and should be fixed.”

Google has tried to turn the embarrassing revelation to its benefit, claiming it only proves the company’s impartiality. “This post shows that far from suppressing Breitbart and Daily Caller, we surfaced these sites regularly in our products,” a spokeswoman wrote in an email, seemingly lacking any sense of irony. “Furthermore, it shows that we value providing people with the full view on stories from a variety of sources.” Indeed, not all Google employees were comfortable with outright manipulation of search results. Another engineer and self-proclaimed Clinton supporter, Uri Dekel, feared that “by ranking ‘legitimacy’ you’ll just introduce more conspiracy theories.”

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May 042018

Gutzon Borglum Mount Rushmore, Repairing Lincoln’s nose 1962



Dr. D figured his last missive was a bit heavy handed. So he went for something lighter this time. A penance, a doctor’s guide: “It’s hard enough to find a candidate that will even promise to do something right so it doesn’t help that they do the opposite 90% of the time.”



Dr. D:

Who wrote “We hold these Truths to be self-evident, that all Men are created equal”? Jefferson, a slave owner.

Who was one of the most ardent Abolitionists? Alexander Hamilton.

Was he a slave owner? Yes.

Who won the election of 1824? No one, it was decided by the House of Representatives.

So which party lost? None: all four candidates were Democratic-Republicans.

In response, Andrew Jackson, a slave owner, created the Democratic Party.

Jackson created the Democratic Party as an anti-bank, anti-oligarch, states-rights platform the Tea Party would recognize.

Martin Van Buren, a Democrat, created the first concentration camp for Cherokee Indians in 1838.

Those 17,000 Cherokees owned 2,000 slaves.

Did Lincoln create the Republican Party? No, it was an amalgamation of failed parties: Lincoln was their 1st candidate.

What was the Lincoln campaign of 1860? Non-interference in state slavery.

Why? The decision of Dred Scott in 1857, a slave owned by abolitionists in a state he did not reside. Overturning 250 years of history, the case determined that no slave could ever become a citizen, i.e. freed.

Who was the best known Confederate General? Stonewall Jackson.

What did he do when he sided with the Southern cause? Freed his slaves.

Who else was a top Confederate General? William Mahone.

What did he do? He was the creator of the most successful interracial alliance in the post-war South. His name was purged first by Southern Democrats (for integration), then by modern Democrats (for being a Confederate).


Woodrow Wilson (D) ran an anti-collectivism, limited government, anti-monopoly, anti-bank campaign in 1912. He created the Federal Reserve and is known for founding the modern welfare state.

Wilson was re-elected on the slogan “He Kept Us Out of War.” He immediately forced the reluctant nation into WWI.

Herbert Hoover, as Secretary of Commerce under Calvin Coolidge during the Crash of ’21, demanded economic aid and bailouts, but Coolidge, “the great refrainer,” refused. The market immediately recovered.

Hoover was President during the Crash of ’29. He gave unprecedented bailouts to help the economy recover. It never did.

Roosevelt campaigned against Hoover for being “ the greatest spending Administration in peacetime in all our history.” He outspent Hoover tenfold.

Did Roosevelt’s “New Deal,” the greatest stimulus and spending program up to that time, end the Great Depression? No. It was going strong in 1939.

What did Roosevelt campaign on? He promised to keep us out of war in Europe.

Who was Time’s Man of the Year in 1938? Adolf Hitler.

Who was Man of the Year in 1939? Joseph Stalin.

1942? Joseph Stalin.


Wars under “anti-war” Democratic Party: 93 years, 46.5%. 625K deaths since 1864.

Wars under “pro-war” “Republican” Party: 107 Years 53.5%. 12K deaths since 1864.

Who voted for the 1964 Civil Rights Act? Republicans 80% vs. Democrats 69%.

Who filibustered it? Southern Democrat Strom Thurmond.

Who signed it? Lyndon Johnson, a southern Democrat.

Where did Thurmond go? The GOP, who had voted against him and against southern segregation.

What did Richard Nixon campaign on? “Law and Order” and a “secret plan” to exit Vietnam. He immediately bombed Cambodia and was later impeached for a burglary.

Who said “the soundest way to raise revenues in the long run is to cut rates now” and “Every dollar released from taxation that is spent or invested will help create a new job and a new salary” ? John F. Kennedy.

Who gave the greatest modern tax cut? John F. Kennedy (income and capital gains, signed by Johnson).

Who most increased the postwar Federal deficit? Ronald Reagan 186%.

Who most increased taxes? Ronald Reagan, 1982 (as % of GDP, excluding Obamacare and Johnson’s one-year tax).


Who called young blacks “Superpredators”? Hillary Clinton, 1996.

Who put the most black men in jail? Bill Clinton, under the 1994 Violent Crime Control Act.

Who cut welfare most? Bill Clinton, 1996 Personal Responsibility and Work Act.

Who was called the first “Black President”? Bill Clinton (“white skin notwithstanding, this is our first black President. Blacker than any actual black person who could ever be elected in our children’s lifetime.” –Toni Morrison, 1998. I swear this is true).

What was George W. Bush’s platform? Smaller, less-invasive government, lower taxes, and no foreign wars.

Who are the Neoconservatives? “Liberal hawks who became disenchanted with the pacifist foreign policy of the Democratic Party”.

Where did these Liberal Democrats finally prosper? Under G.W. Bush and on Fox News, e.g. Bill Kristol.


Which President won the Nobel Peace Prize? Barack Obama. (As did Theodore Roosevelt, Woodrow Wilson and Jimmy Carter)

What was his legacy? War every day of all eight years, with +50,000 official strikes in Afghanistan, Pakistan, Libya, Yemen, Somalia, Iraq, and Syria and unofficial attacks in Ukraine, Sudan, Niger, Cameroon, Uganda, and elsewhere, as well as 3,000 drone deaths.

Wow, anything else? Due to his intervention, Obama, the first black president, caused the creation of an open-air black slave market in Libya.

Who campaigned advocating a Syrian no-fly zone expected to cause WWIII with Russia? Hillary Clinton (D).

Who campaigned for peace talks and de-escalation with Russia? Donald Trump (R).

Who sent 164 missiles into Russian ally Syria? Donald Trump (R).

Who advocated against the recent attacks? “Far-right” speakers Rand Paul and Tucker Carlson of Fox News.

Who advocated for the attacks? “Left” speakers Fareed Zakaria, and Rachel Maddow with left media Slate and Mother Jones.

What was the actual breakdown? 22% of GOP supported Syrian airstrikes in 2013 vs 86% for the same strikes in 2017.

And on and on. Got it? Know which side you’re on? History, party platforms, personal beliefs, economy, all clear?


“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

P.S. Mark Twain never said this.



Dec 112014
 December 11, 2014  Posted by at 11:55 am Finance Tagged with: , , , , , , , , ,  1 Response »

DPC Pine Street below Kearney after the great San Francisco earthquake and fire 1906

Oil Plunge Rips Through Markets as Investors Seek Bottom (Bloomberg)
Bank Of America Sees $50 Oil As OPEC Dies (AEP)
Name That Chart! Oil Supply Or Demand Edition (Zero Hedge)
Dow Down Triple Digits As Oil Hits Multi-Year Lows (CNBC)
Steen Jakobsen: The US Could Bail Out Its Own Oil Sector (CNBC)
China’s Wild Market Swings: This Is Just The Start (CNBC)
PBOC, Traders Tussle Over Yuan (WSJ)
Yuan Has Real Shot at IMF Blessing on Reserve Status (Bloomberg)
How Wal-Mart Made Its Crumbling China Business Look So Good for So Long (BBG)
‘Known Unknown’ Dangers Are Lurking In The Stock Market (MarketWatch)
Britons Are Living Beyond Their Means, Says Government Watchdog (Telegraph)
Leaked EU Summit Conclusions: Draghi Left Hanging? (FT)
Greek Left Candidate Willing To Call European Leaders’ Bluff (AEP)
Superbugs To Kill 10 Million People A Year, Cost $100 Trillion By 2050 (BBC)
Generation Y Have Every Right To Be Angry At Baby Boomers’ Wealth (Guardian)
One-Fifth Of Americans Don’t Plan To Pay Off Their Debt (CNBC)
IMF Finds Another $15 Billion Black Hole In Ukraine’s Finances (CNBC)
Guantanamo Six ‘Will Enjoy Complete Freedom’ In Uruguay (BBC)
CIA Torture Report May Set Off Global Prosecutions (Bloomberg)
President George W. Bush ‘Knew Everything’ About CIA Interrogation (BBC)

“The mantra of ‘lower oil prices are good for the economy’ can only last so long until finally there’s a break in the psychology of investors ..”

Oil Plunge Rips Through Markets as Investors Seek Bottom (Bloomberg)

Oil’s collapse is rippling through financial markets, broadening a selloff in stocks beyond energy companies and leaving investors with few havens as assets from metals to corporate debt sink. Brent crude fell below $65 for the first time since 2009 as OPEC cut its forecast for 2015 demand, raising concern over the strength of the global economy and leaving investors contemplating when oil’s plunge will reach a bottom. “As great as it feels to pump $2 gasoline at the station, it’s not a healthy environment for financial assets,” Walter Todd, chief investment officer for Greenwood Capital, said. “It’s rare to see commodity prices fall this quickly in a non-recessionary situation. You really need to see some stabilization.” The selloff sent the MSCI All-Country World Index to its biggest drop in two months. The Standard & Poor’s 500 Index lost 1.6%, Canadian stocks plunged to the lowest since February and emerging-market shares fell to an eight-month low.

Traders are almost certain that Venezuela will teeter into default as bonds plunge to a 16-year low and the cost of default protection soars to a record. A measure of risk in the U.S. junk-bond market rose the most in two months. Copper fell 1.2% and gold slipped 0.2%. Investors sought relief in Treasuries as 30-year bond yields fell to a seven-week low, and the yen capped its biggest three-day gain versus the dollar in more than a year. While oil prices have been spiraling downward since June, entering a bear market and dragging down energy shares, the pace of today’s decline spurred selling in S&P 500 groups that helped drive the benchmark gauge to an all-time high on Dec. 5. All 10 major industries in the S&P 500 slumped at least 1% today.

“There’s nothing like human emotion to take over in the short term and fear is taking over, it looks like this really is a slowdown,” Ron Weiner at RDM Financial said. “In this case it really is an oil story, it really is a global slowdown of some sort.” [..] “The mantra of ‘lower oil prices are good for the economy’ can only last so long until finally there’s a break in the psychology of investors,” Jeff Sica at Circle Squared Alternative Investments said. “You start to realize the reason why oil prices are declining is because there’s severe economic weakness that has yet to be acknowledged. It’s bringing down all commodity prices.”

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“What is clear is that the world has become addicted to central bank stimulus. Bank of America said 56% of global GDP is currently supported by zero interest rates, and so are 83% of the free-floating equities on global bourses.”

Bank Of America Sees $50 Oil As OPEC Dies (AEP)

The OPEC oil cartel no longer exists in any meaningful sense and crude prices will slump to $50 a barrel over the coming months as market forces shake out the weakest producers, Bank of America has warned. Revolutionary changes sweeping the world’s energy industry will drive down the price of liquefied natural gas (LNG), creating a “multi-year” glut and a much cheaper source of gas for Europe. Francisco Blanch, the bank’s commodity chief, said OPEC is “effectively dissolved” after it failed to stabilize prices at its last meeting. “The consequences are profound and long-lasting,“ he said. The free market will now set the global cost of oil, leading to a new era of wild price swings and disorderly trading that benefits only the Mid-East petro-states with deepest pockets such as Saudi Arabia. If so, the weaker peripheral members such as Venezuela and Nigeria are being thrown to the wolves.

The bank said in its year-end report that at least 15pc of US shale producers are losing money at current prices, and more than half will be under water if US crude falls below $55. The high-cost producers in the Permian basin will be the first to “feel the pain” and may soon have to cut back on production. The claims pit Bank of America against its arch-rival Citigroup, which insists that the US shale industry is far more resilent than widely supposed, with marginal costs for existing rigs nearer $40, and much of its output hedged on the futures markets. Bank of America said the current slump will choke off shale projects in Argentina and Mexico, and will force retrenchment in Canadian oil sands and some of Russia’s remote fields. The major oil companies will have to cut back on projects with a break-even cost below $80 for Brent crude.

[..] What is clear is that the world has become addicted to central bank stimulus. Bank of America said 56% of global GDP is currently supported by zero interest rates, and so are 83% of the free-floating equities on global bourses. Half of all government bonds in the world yield less that 1pc. Roughly 1.4bn people are experiencing negative rates in one form or another. These are astonishing figures, evidence of a 1930s-style depression, albeit one that is still contained. Nobody knows what will happen as the Fed tries to break out of the stimulus trap, including Fed officials themselves.

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That’s some serious charts. “.. if it quacks like a duck, cook it.”

Name That Chart! Oil Supply Or Demand Edition (Zero Hedge)

While the question of supply vs demand in global oil markets is merely different sides of the same coin, we hope the following “name that chart” image provides some clarifying perspective on what is really dragging oil prices lower…
Nope… they are not the same… one of these is a commodity that is crashing but is believed to be “unequivocally” good for the global economy… the other is the global economy!!


Answer here.

and yes, we know correlation does not imply causation’ but… if it quacks like a duck, cook it.

You decide… steady supply into globally crushed demand…

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Come up for air today, dive down again tomorrow?

Dow Down Triple Digits As Oil Hits Multi-Year Lows (CNBC)

U.S. stocks declined on Wednesday, furthering the week’s losses, as the price of crude fell to multi-year lows and the Organization of Petroleum Exporting Countries cut its demand outlook for next year. “Oil continues to be the concern. Depending on who you talk to and in what time frame on which day of the week, oil may be a leading indicator, so there may be something behind the decline other than we have a lot of oil,” said Paul Nolte, senior vice president, portfolio manager at Kingsview Asset Management. “I don’t know that for sure. I do know, historically at least, energy stocks have tended to lead the market, and that lead time is anything from three months to a year, and we’re now six months into oil under performing the overall market, so we may be in for some rough sledding,” he added.

OPEC reduced its estimate for 2015 by roughly 300,000 barrels a day, with the cartel saying the effect of the 40% drop in prices on supply and demand is uncertain. The CBOE Volatility Index, a measure of investor uncertainty known as the VIX, jumped 9.4% to 16.29. Toll Brothers edged lower after the home builder reported mixed quarterly results; Yum Brands fell after the operator of Taco Bell and other fast-food brands cut is profit outlook for the year for a second time; Costco Wholesale climbed after the warehouse-club operator posted a better-than-expected quarterly profit and GlaxoSmithKline declined after Bank of America Merrill Lynch downgraded its stock to underperform from neutral.

Read more …


Can The US Bail Out Its Oil Industry?

Steen Jakobsen: The US Could Bail Out Its Own Oil Sector (CNBC)

An economist who correctly predicted the fall in oil price this year has told CNBC that the U.S. government could look to bail out its energy sector in 2015 as the commodity’s low price starts hitting the country’s economy. “The U.S. energy sector is clearly important,” Steen Jakobsen, the chief economist at Danish investment bank Saxo Bank, told CNBC Wednesday. “They are paramount to the long-term strategic issue that the U.S. will be self-dependent on oil.” Jakobsen is part of team that puts together an annual “outrageous predictions” outlook that has been running for more than a decade. He concedes that these so-called black swan scenarios are “relatively controversial” but says that they could help investors navigate any real-life turmoil that arises. His prediction on a U.S. bailout is his own personal prediction and did not make the formal list that the Copenhagen-based company published on Wednesday morning.

A large number of economists believe the drilling frenzy and huge domestic energy boom has helped the U.S. to recover since the global financial crash of 2008, contributing an estimated 0.3-0.6 percentage points to U.S. gross domestic product. but Jakobsen believes this headwind could soon become a tailwind despite gas becoming cheaper at the pump for U.S. citizens. “It will subtract 0.5% from GDP, bare minimum,” he said. “There’s a precedent here, back in the 80s we also had an oil crisis and that led to bank recoveries.” He added that oil companies are in for a “massive correction,” similar to the downtrend seen in mining stocks, explaining that exploration was getting “hugely expensive” with energy majors having little free cash flow available. The S&P 500 index has clocked gains of around 11% so far this year but the energy sector within the benchmark is currently down nearly 12%. Oil prices are trading at five-year lows with Brent futures losing around 40% in value since June.

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What’s worrisome is that many have bought stocks with borrowed funds, and with apartments as collateral.

China’s Wild Market Swings: This Is Just The Start (CNBC)

The rout in China stocks on Tuesday is a healthy bull-market correction, say strategists, however the wild swings reinforce that the market is not for the faint of heart. The benchmark Shanghai Composite lived up to its notoriously volatile reputation on Wednesday, swinging between gains and losses after the market tanked more than 5% a day earlier – its biggest single-day percentage fall in 5 years. Losses were triggered by the Chinese securities clearing house’s decision late Monday to restrict the use of lower-grade corporate debt as collateral for short-term loans obtained through repurchase agreements. The move follows a surge in margin buying that accompanied the recent stock surge. Strategists, however, don’t believe the latest regulatory move will derail broader momentum in the market that has rallied 35.5% year to date.

“The new regulations were more of a negative catalyst for profit-taking. We see Tuesday’s selloff as a healthy correction,” said Stephen Sheung, head of investment strategy at SHK Private. Sheung says a reduction in leverage is unlikely to have a large impact because on the stock market: “You only need a small amount of money to move from bank deposits or wealth management products into stocks to push the market higher.” Audrey Goh, equity strategist at Standard Chartered also sees the recent market plunge as a pause for breath. “Yesterday’s move was a reaction to the rapid appreciation in the market over the past month,” Goh said. “Sentiment wise, there may be a perception that regulators are tightening up policies. But I think they are going on the right track because historically collateral has not been tightly scrutinized – this is all part of the reform process and shouldn’t have a long-term impact on the market,” she added.

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“Investors have been focusing on an almost daily deluge of downbeat economic news about China.”

PBOC, Traders Tussle Over Yuan (WSJ)

A battle in China’s currency market has emerged in recent days: Traders are pushing the yuan weaker, while the People;s Bank of China has been attempting to guide the tightly-controlled foreign-exchange rate stronger. That tension was on show Wednesday. The yuan began trading 1.1% weaker than the level at which the central bank set the morning reference rate, marking the biggest drop since June. Daily trading is limited to 2% above or below this so-called central parity rate. A slide in the currency has accelerated this month, after the central bank cut interest rates in November. The yuan is now 2% weaker than it was at the start of the year and is on track for its first annual loss since 2009. Investors have been focusing on an almost daily deluge of downbeat economic news about China.

Reports this week showed the rate of inflation slipped to a five-year low in November, while the country’s exports fell well below expectations in the same period. A broadly stronger dollar- the result of a recovering U.S. economy -has also hurt sentiment about the yuan. Volatility in the market has picked up this week, after Beijing curbed risky lending in the bond markets, sparking heavy declines in the stock and bond markets Tuesday. Monday and Tuesday, the yuan recorded its biggest-ever two-day tumble against the dollar. Wednesday, the central parity rate was set at 6.1195 yuan to the dollar, the strongest since March 3. The yuan opened at 6.1894. China’s central bank has been fighting the market, setting the yuan’s reference exchange rate, or “fix,” stronger against the dollar.

Analysts say Beijing appears eager to prevent one-way speculation on the currency and squeeze out those betting that it will decline further. “China doesn’t want to join the currency wars and that explains the fix movement,” said Ju Wang, a currency strategist at HSBC Holdings PLC in Hong Kong, referring to some countries’ efforts to push their currencies lower so that their exporters remain competitive. “But markets see it as China will eventually be dragged into the currency war or just fundamentally, growth and exports will weaken so much that will trigger the markets’ demand for the U.S. dollar.”

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Hard to deny.

Yuan Has Real Shot at IMF Blessing on Reserve Status (Bloomberg)

For the first time, China has a real shot at getting the International Monetary Fund to endorse the yuan as a global reserve currency alongside the dollar and euro. In late 2015, the IMF will conduct its next twice-a-decade review of the basket of currencies its members can count toward their official reserves. Including the yuan in this so-called Special Drawing Rights system would allow the IMF to recognize the ascent of the world’s second-biggest economy while aiding China’s attempts to diminish the dollar’s dominance in global trade and finance. China would need to satisfy the Washington-based lender’s economic benchmarks and get the support of most of the other 187 member countries.

The Asian nation is likely to pass both tests, said Eswar Prasad, who until 2006 worked at the IMF, including spells as heads of its financial studies and China divisions. “It will certainly help China’s objective of making the renminbi a more widely-used currency,” said Prasad, a professor of trade policy at Cornell University and senior fellow at the Brookings Institution. Renminbi is China’s official name for the yuan. Reserve-currency status for the yuan would make central banks, particularly those in developing economies, more eager to hold yuan assets and “diversify at the margin away from dollars,” as well as euros, yen and Swiss francs, Prasad said.

Approval hinges partly on whether the IMF reverses its 2010 decision that the yuan wasn’t “freely usable.” There’s growing evidence that the currency may now pass this test, after already qualifying on the IMF’s other condition of being a large exporter. The proportion of China’s trade that’s settled in yuan has risen to about 20%; the market for yuan-denominated Dim Sum bonds has grown to $72.9 billion from nothing in just seven years; and the government has loosened controls on foreigners’ access to its financial markets. China has also signed agreements to trade the yuan freely in cities from Hong Kong and Singapore to Frankfurt and London.

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Shouldn’t investors look at bringing charges?

How Wal-Mart Made Its Crumbling China Business Look So Good for So Long (BBG)

After years of heralding China as one of its best markets, Wal-Mart in August said its performance there was among the worst in its major countries. A management shake-up and job cuts have followed. Although the reversals seem abrupt, cracks in the foundation of Wal-Mart’s retail business in China have been developing for years, hidden by questionable accounting and unauthorized sales practices, according to employees and internal documents reviewed by Bloomberg. The practices – including bulk sales to other retailers and some sales allegedly booked when no merchandise left the shelves – made business appear strong even as retail transactions slowed and unsold inventory piled up, these people and documents say. Wal-Mart said in August that it was unhappy with inventory growth internationally. Stores in China continue to make bulk sales, sometimes unprofitably and without required management authorizations, according to employees who’ve left the company this past month.

Concerns about bulk sales, raised as far back as 2011 in an internal report, have been the subject of inquiries in China by Wal-Mart’s legal team as recently as May, according to an internal company e-mail and an employee interviewed by lawyers. The report and interviews with current and former employees say Chinese Wal-Mart stores, under pressure to meet earnings targets, resorted to temporary markups of inventory as an accounting move that can burnish profits without any added sales of merchandise. After employees “recognized inventory pricing discrepancies” in 2011, the company’s senior leadership in the U.S. and China ordered an extensive investigation that led to “various leadership changes and disciplinary actions,” strengthened compliance measures, training, and regular audits, Wal-Mart Stores Inc. said in a statement.

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“..stock market disasters are much more typically caused by “known unknowns” — the events that have been perking for a while, whose natures are familiar to us and yet whose exact forms and potential dangers remain unclear.”

‘Known Unknown’ Dangers Are Lurking In The Stock Market (MarketWatch)

As the S&P 500 Index keeps reaching new highs, investor conversations have shifted from how low it might go (October’s topic) to how high the stock market can possibly climb. When people get that excited, it’s time to think about risks. What could possibly go wrong and arrest this great bull market? Much speculation currently points to the kind of scary, exogenous, low-probability events we call black swans: an Ebola pandemic, say, or a “third world war” due to the Russia/Ukraine conflict or the ISIS threat escalating out of control. Nevertheless, while these and other black swan events may have the potential to cause catastrophic damage to the markets and society, stock market disasters are much more typically caused by “known unknowns” — the events that have been perking for a while, whose natures are familiar to us and yet whose exact forms and potential dangers remain unclear.

Take, for example, the 2008 global financial crisis: It did not happen overnight, and, looking back, there were plenty of signs and warnings, such as the subprime lending meltdown in 2007. Or, think of the dot-com bubble, which burst in 2000, several years after the first warnings of “irrational exuberance” by Federal Reserve Chairman Alan Greenspan in a speech given in 1996. So rather than reaching for sensational “unknown unknowns,” we are focusing on market risks we know and understand. We’ve listed a few here, starting with low probability and ending with high.

• Washington politics: As Republicans won the Senate in the mid-term elections and, thus, have full control of Congress, the government is now truly divided. Early signs indicate that political infighting between the two parties will become even more intense, a distasteful scenario to imagine. To make matters worse, another government funding deadline is looming Dec. 11. We believe that, whereas the political maneuvering may cause market volatility, it’s unlikely to pose a huge threat to the market.

• Rising interest rates: There is little argument that interest rates will go up, eventually, but it is also abundantly clear to many pundits that the rise will be a slow, grinding process rather than a spike. For the stock market, interest rates are, therefore, a long-term concern, and not likely to be an imminent threat. At the current near historic levels, equities are still far more attractive than fixed-income from a valuation standpoint, and rising interest rates will probably not tip the balance. Interest rates jumped in 2013, but the stock market, ironically, performed exceedingly well.

• Slowing growth: This is by far the No. 1 threat to markets and has flared up repeatedly. Just the anticipation of slowing growth can cause companies to slow production and consumers to temper spending, which is quickly reflected in falling stock prices. The most recent September-October market downturn, one of the worst during the past couple years, was caused by concerns about slowing growth.

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No, really?!

Britons Are Living Beyond Their Means, Says Government Watchdog (Telegraph)

Britons are living beyond their means more now than at almost any point over the past two decades, according to the head of the Government’s fiscal watchdog. Robert Chote, the chairman of the Office for Budget Responsibility (OBR), said real consumer spending over the past year had accelerated ahead of inflation-adjusted pay growth at its second fastest rate since the 1990s. “If you look at the relatively robust pace of growth over recent quarters, that has been reflected particularly in terms of the contribution from the consumer, of people running down saving rather than having stronger income growth,” he told the Treasury Select Committee. Mr Chote said this pace of consumption relative to earnings growth was likely to be unsustainable. “We’ve assumed that it is not plausible [that this could continue],” he said. “If you look at the last year, real consumption growth has been running further ahead of real wage growth than in almost any other year over the last 15 or 20 or so.

Therefore, in our forecast the main reason we expect the quarterly pace of growth to slow into next year is that you see consumer spending moving more into line with income growth, and being less driven by [a] decline in saving.” The OBR believes the UK economy will grow by 3pc this year, before slowing to 2.4pc in 2015 and 2.2pc in 2016. Household consumption growth is forecast to strengthen next year to 2.8pc, fuelled by a further decrease in savings. The household saving ratio is projected to fall to 5.4pc in 2015, from 6.6pc this year. However, consumer spending is expected to slow to 2.2pc in 2016 as the saving ratio stabilises. The OBR noted that consumption had grown by 2.1pc in real terms in the first three quarters of 2014, despite limited growth in real wages. Mr Chote also said that there had been a “structural deterioration” in productivity that meant British households would not enjoy the same living standards as they would have done had the financial crisis not occured. He added that rising productivity was essential for stronger pay growth.

In a separate speech, Ian McCafferty, a Bank of England policymaker, said raising interest rates now would help to “support and sustain” Britain’s recovery while ensuring prices rise smoothly in the future. Mr McCafferty said Britain’s “remarkable” recovery over the past 18 months suggested that pay growth was at a “turning point”, and that a sustained increase in wages was within sight. Speaking at the Institute of Directors on Wednesday, Mr McCafferty outlined four reasons for raising Bank Rate from its record low of 0.5pc, and warned that even small miscalculations about the degree of “spare capacity” meant the point at which the economy could start to overheat may arrive sooner than policymakers expect. He said raising rates now would ensure increases were “gradual and limited”.

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“Draghi may have to deliver his quo without a eurozone quid. The text makes clear that leaders have no intention of delivering a new blueprint any time soon. According to the draft, a debate on how to proceed will be pushed off until February, and the report itself will come no sooner than June.”

Leaked EU Summit Conclusions: Draghi Left Hanging? (FT)

The dance had become so routine that we at the Brussels Blog were thinking of giving it a name, the Eurozone Two-Step. Ever since the eurozone crisis first rocked international markets nearly five years ago, European Central Bank chiefs – first Jean-Claude Trichet, then Mario Draghi – sent a very clear message to the currency union’s political leaders: we can only act if you act first. The deal was never explicit, but both sides knew what was required. The ECB’s first sovereign bond purchase programme in May 2010 came only after eurozone leaders created a new €440bn bailout fund; its €1tn in cheap loans to eurozone banks in early 2012 only came after political leaders agreed to a new “fiscal compact” of tough budget rules. But with the markets watching Frankfurt closely for signs Draghi is about to launch another bold move – US-style quantitative easing, purchasing sovereign bonds to halt fears the bloc is headed into a deflationary spiral – there are new indications one of the partners is no longer dancing.

Back in October at a eurozone summit, Draghi was able to get a little-noticed statement out of the assembled leaders committing them to another “Four Presidents Report”, a reference to the blueprint delivered in 2012 that set a path towards further centralisation of eurozone economic policy. The report helped kick-start the EU’s just-completed “banking union.” Progress on that 2012 blueprint has since stalled, however, and at his last summit press conference, then-European Council president Herman Van Rompuy said the new “Four Presidents Report” would be delivered at the December EU summit, which starts next Thursday. Many in Brussels saw this as the quid for Draghi’s quo – once the leaders agreed to another blueprint for eurozone integration, Draghi would have a free hand to launch QE.

But according to a leaked draft of the communiqué for next week’s summit, Draghi may have to deliver his quo without a eurozone quid. The text makes clear that leaders have no intention of delivering a new blueprint any time soon. According to the draft, a debate on how to proceed will be pushed off until February, and the report itself will come no sooner than June.

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“There will be US-style food stamps and we will reconnect electricity to homes where it has been cut off. There will have to be debt relief because the debt is simply unpayable. We will ask Germany to renegotiate.”

Greek Left Candidate Willing To Call European Leaders’ Bluff (AEP)

Events have rudely exposed the illusion that the Greek people will submit quietly to a decade of colonial treatment and debt servitude. As matters stand, it is more likely than not that a defiant Alexis Tsipras will be prime minister of Greece by late January. His Syriza alliance vows to overthrow the EU-IMF Troika regime, refusing to implement the key demands. A view has taken hold in EU capitals and the City of London that Mr Tsipras has resiled from these positions and will ultimately stick to the Troika Memorandum, a text of economic vandalism that pushed Greece into seven years of depression, with a 25.9pc fall in GDP, longer and deeper than Europe’s worst episodes in the 1930s. Mr Tsipras is a polished performer on the EU circuit. He can no longer be caricatured as motorbike Maoist. But the fact remains that he told Greek voters as recently as last week that his government would cease to enforce the bail-out demands “from its first day in office”.

The logical implication is that Greece will be forced out of the euro in short order, unless the EU institutions capitulate. Mr Tsipras knows this. He is gambling that EU leaders – meaning Germany’s Angela Merkel – will yield. His calculation is that they will not dare to blow up monetary union at this late stage, and over a relative pittance. Too much political capital has been invested. The EU-IMF loans have already reached €245bn (£194bn), the biggest indenture package in history. To let it fall apart would expose failure of Mrs Merkel’s EMU crisis management. Yet the reality is that Greece must repay €6.7bn to the European Central Bank in July and August. The ECB will not roll it over because that would be monetary financing of a government. The capital markets are shut. Mr Tsipras knows that he is likely to receive a call from the ECB within weeks of taking office, reminding him that Greece owes some €40bn in emergency support (ELAs) for the banking system, a threat to cut off funding as occurred in Ireland and Cyprus.

I am reliably informed that his answer to the EU authorities will be “do your worst”. “We are not going to crumble at the first hurdle,” said one of his close advisers. “A freshly elected government cannot allow itself to be intimidated by threats of Armageddon.” Markets are taking fright. The Athens bourse fell 13pc on Tuesday, the biggest one-day drop since the 1987 crash. The yield curve on three-year Greek debt has exploded by almost 300 basis points to 9.52pc in two days and is higher than 10-year yields, a violent inversion of the yield curve unseen since default scares of the EMU crisis. The Syriza roadshow in the City last month went horribly wrong. “Everybody coming out of the meeting wants to sell everything Greek,” said a leaked memo by Capital Group’s Jorg Sponer.

The reported shopping list was: a haircut for creditors; free electricity, food, shelter, and health care for all who need it; tax cuts for the all but the rich; a rise in the minimum wage and pensions to €750 a month; a moratorium on private debt payments to banks above 20pc of disposable incomes; and demand for a 62pc debt forgiveness on the grounds that this is what Germany received in 1952. “The programme is worse than communism. This will be total chaos,” said Mr Sponer. “It was a disaster,” said Prof Yanis Varoufakis from Athens University, a man tipped to play a key role in any Syriza-led government. The reality is more prosaic. “We are not going to go on a spending spree. We will aim to achieve a modest primary surplus, and we will liberalise the labour market,” he said. “Greece faces a humanitarian crisis and we will spend €1.3bn to alleviate abject poverty. There will be US-style food stamps and we will reconnect electricity to homes where it has been cut off. There will have to be debt relief because the debt is simply unpayable. We will ask Germany to renegotiate.”

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Attention long overdue.

Superbugs To Kill 10 Million People A Year, Cost $100 Trillion By 2050 (BBC)

Drug resistant infections will kill an extra 10 million people a year worldwide – more than currently die from cancer – by 2050 unless action is taken, a study says. They are currently implicated in 700,000 deaths each year. The analysis, presented by the economist Jim O’Neill, said the costs would spiral to $100tn (£63tn). He was appointed by Prime Minister David Cameron in July to head a review of antimicrobial resistance. Mr O’Neill told the BBC: “To put that in context, the annual GDP [gross domestic product] of the UK is about $3tn, so this would be the equivalent of around 35 years without the UK contribution to the global economy.” The reduction in population and the impact on ill-health would reduce world economic output by between 2% and 3.5%. The analysis was based on scenarios modelled by researchers Rand Europe and auditors KPMG.

They found that drug resistant E. coli, malaria and tuberculosis (TB) would have the biggest impact. In Europe and the United States, antimicrobial resistance causes at least 50,000 deaths each year, they said. And left unchecked, deaths would rise more than 10-fold by 2050. Mr O’Neill is best known for his economic analysis of developing nations and their growing importance in global trade. He coined the acronyms Bric (Brazil, Russia, India and China) and more recently Mint (Mexico, Indonesia, Nigeria and Turkey). He said the impact of the would be mostly keenly felt in these countries. “In Nigeria, by 2050, more than one in four deaths would be attributable to drug resistant infections, while India would see an additional two million lives lost every year.”

The review team believes its analysis represents a significant underestimate of the potential impact of failing to tackle drug resistance, as it did not include the effects on healthcare of a world in which antibiotics no longer worked. Joint replacements, Caesarean sections, chemotherapy and transplant surgery are among many treatments that depend on antibiotics being available to prevent infections. The review team estimates that Caesarean sections currently contribute 2% to world GDP, joint replacements 0.65%, cancer drugs 0.75% and organ transplants 0.1%. This is based on the number of lives saved, and ill-health prevented in people of working age. Without effective antibiotics, these procedures would become much riskier and in many cases impossible. The review team concludes that this would cost a further $100tn by 2050.

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But what are they going to do about it?

Generation Y Have Every Right To Be Angry At Baby Boomers’ Wealth (Guardian)

A new study by the Grattan Institute on wealth across generations shows that the older Australians benefitted the most from the strong economic times of the early 2000s, and that by virtue of being effectively shut out of the housing market, members of “Generation Y” may be the first generation to be less wealthy than that of their parents. Whenever younger generations are discussed in the media, invariably comments will be made that Generation Y are unemployable, lazy, spendthrifts who need to learn discipline if they want to get ahead. They’re essentially the same comments that were made 20 years ago about Generation X and 15 or 20 years before that about the various incarnations of the baby boomer generation. Very little changes.

But a new report by the Grattan Institute’s, “The Wealth of Generations” suggests that one aspect of Generation Y is different from previous ones – they are on track to have less wealth than the generation before them. The report makes it abundantly clear that the good economic times of the late 1990s and early 2000s were of benefit mostly to older Australians, and such people “are capturing a growing share of Australia’s wealth, while the wealth of younger Australians has stagnated”. In 2003-04, households whose main earner was under 34 accounted for 6.52% of all household wealth in Australia. By 2011-12 such households only accounted for 4.52%:

The biggest eaters of the wealth pie in that time were those over 55. They now hold 58% of all wealth, up from the 51% held by such households back in 2003-04. But it is not just in the share of the pie that the younger generations lost out, their wealth has also gone down in real terms. The Grattan Institute found that households across all age groups are wealthier now than their comparative aged households were in 2003-04. All that is except for those aged 25-34 years. The wealth of households aged 45-54 years old from 2003-04 to 2011-12 grew by $163,000 (in 2012 dollar terms) – a 23% increase. Those aged 55-64 saw their wealth in that time rise $174,000 (19%), while the wealth of 65-74 year old households rose a staggering $216,000, (27%). The households of 24 to 34-year-olds however lost $10,400 in wealth – a 4% drop:

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“Survey respondents who expect to pay off their debts anticipate doing so at an average age of 53. But in addition to the 18% who expect to owe money forever, another 25% expect to be in debt until at least age 61.”

One-Fifth Of Americans Don’t Plan To Pay Off Their Debt (CNBC)

The golden years are going to feel a bit tarnished for almost one in five Americans. In a personal finance survey published today, 18% of the respondents said they expect to be in debt for the rest of their lives. That is double the percentage who expected that in May 2013, the last time the survey was conducted. Mortgage delinquencies dropped for the eleventh consecutive quarter, to 3.36%, in the third quarter of 2014, and credit card delinquency was at 1.34%, according to TransUnion. Credit card indebtedness has increased moderately since the 2013 survey, Schulz said. In contrast, student loan debt rose from an aggregate of $390 billion at the end of 2005 to $966 billion at the end of 2012, according to data from the Federal Reserve Bank of New York.

Average student loan debt topped $30,000 in six states, according to the Project on Student Debt. “We’ve all seen the student loan debt numbers, and credit card debt is increasing, and even though the job market is improving it’s certainly not humming along, and there is data about people’s salaries not growing quite as quickly as people had hoped,” said Matt Schulz, senior analyst at “You just wonder if it has all come together to create this unease.” Survey respondents who expect to pay off their debts anticipate doing so at an average age of 53. But in addition to the 18% who expect to owe money forever, another 25% expect to be in debt until at least age 61.

Older respondents are more likely to believe their debt will be with them forever. Some 31% of those over age 65 expect to be lifelong debtors, compared to 22% of those aged 50 to 64 and just 6% of millennials aged 18 to 29. “The more years you have left, the more likely you are to have a chance to get rid of that debt,” Schulz said. “I think some of that can just be chalked up to the optimism and positivity of youth,” since after all, millennials are the ones most likely to be holding student loans. Schulz speculated that perhaps some older borrowers are assuming responsibility for children’s student loans, and that is adding to their pessimism.

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Corruption Inc.

IMF Finds Another $15 Billion Black Hole In Ukraine’s Finances (CNBC)

A further $15 billion may be needed to bailout struggling Ukraine, which seems ever closer to economic disaster. The International Monetary Fund (IMF) has spotted a shortfall of $15 billion on top of the $17 billion bailout loan package it has worked out for the troubled country, according to reports. This black hole is especially worrisome as the world’s economies are facing slower global growth and so the appetite to help out Ukraine may dwindle – especially as the country’s economy is such trouble. Besieged by conflict in some of its most important economic areas and the collapse of exports to Russia, Ukraine’s economy is expected to shrink by 7% this year, according to its government. Its currency reserves have shrunk, raising concerns that its central bank will not be able to keep propping up the country’s currency, the hryvnia.

If Ukraine’s currency – which has been world’s the worst-performing this year – falls even further, Ukraine could enter the dangerous territory of hyperinflation, where prices rise by more than 50% in a month. Inflation already hit 22% in November. “It is not a question of throwing a few billion bucks at the problem, the program financing as is just does not add up and very significantly,” Tim Ash, head of emerging markets research at Standard Bank, wrote in a research note. He argued that at least the government and its creditors had realized this in time to ramp up the bailout. If the bailout were to collapse, it could trigger worse problems for the recently assembled, Western-backed, government led by Prime Minister Arseny Yatseniuk and President Petro Poroshenko. Ukraine has become an important symbol for both Russia and the West, as relationships between them deteriorate to their worst since the Cold War.

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This is how the world sees America, and Americans, these days.

Guantanamo Six ‘Will Enjoy Complete Freedom’ In Uruguay (BBC)

Six prisoners released from the US detention centre in Guantanamo Bay will enjoy complete freedom in Uruguay, the country’s defence minister says. Eleuterio Huidobro told Reuters news agency that Uruguay had not imposed or accepted any conditions when it agreed to receive the former inmates. The six men arrived in Montevideo on Sunday after being freed by the US. They spent 12 years in jail for alleged ties with al-Qaeda but were never charged. The former inmates – four Syrians, a Palestinian and a Tunisian – were taken to a military hospital for health checks. The Pentagon identified them as Abu Wael Dhiab, Ali Husain Shaaban, Ahmed Adnan Ajuri, and Abdelahdi Faraj, from Syria; Palestinian Mohammed Abdullah Taha Mattan, and Adel bin Muhammad El Ouerghi, from Tunisia. Uruguayan President Jose Mujica said they had been subjected to “an atrocious kidnapping”. Mr Huidobro told Reuters: “They will not be restricted in any way. Their status is that of refugees and immigrants.”

US President Barack Obama has pledged to close the camp in Cuba, which was opened in 2002 as a place to detain enemy combatants in America’s war on terror. About half of the 136 men still in Guantanamo have been cleared for transfer but have nowhere to go because their countries are unstable or unsafe. In Latin America, El Salvador is the only other country to have given Guantanamo prisoners sanctuary, taking two in 2012. One of the former detainees, Abdelahdi Faraj, published an open letter through his lawyer in New York thanking Mr Mujica for his decision. “Were it not for Uruguay, I would still be in the black hole in Cuba today,” he said. “I have no words to express how grateful I am for the immense trust that you, the Uruguayan people, have placed in me and the other prisoners by opening the doors to your country.” Mr Mujica was himself held for over a decade in harsh prison conditions during Uruguay’s period of military rule in the 1970s and 1980s.

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“After reviewing this report, we will give consideration to reopening petitions or filing new petitions in European courts under the principles of universal jurisdiction ..”

CIA Torture Report May Set Off Global Prosecutions (Bloomberg)

The release of the Senate Intelligence Committee’s report on the CIA’s secret prisons roiled Washington Tuesday, but its real impact could be felt in courtrooms across the globe in the months and years to come. Attorneys for human rights organizations are now poring over the 525-page declassified summary of the Senate majority report to find new material that could revive long-dormant and failed civil and criminal lawsuits on behalf of those detained by the Central Intelligence Agency. While many American and international nongovernmental organizations have mounted legal challenges on behalf of people who were detained, transferred and harshly interrogated by the CIA and allied governments, these court challenges have rarely been successful. One reason is that the Justice Department under Presidents George W. Bush and Barack Obama have asserted that almost all details about the CIA program were a state secret.

And while some government reports have been released about the black sites, the Senate committee’s majority report released Tuesday is the most comprehensive and detailed document to date. “One of the tragedies about this is the attempt to find redress,” said Andrea Prasow, the deputy director of the Washington office for Human Rights Watch. “Judges have accepted the state secrets claim. Now it will be much harder to do that when we all have access to a 500-page public report that details a lot of this.” The chances of a U.S. court re-opening civil or criminal charges against U.S. officials involved with the CIA program are slim. The agency and the Justice Department have conducted their own investigations into the CIA’s program and only low-level military officials and one CIA contractor has been prosecuted.

But European courts may be a different story. Some human-rights groups are now seeking to petition European courts to renew efforts to prosecute Bush administration officials under the principle of universal jurisdiction. That principle was established in 1998, when a Spanish court indicted Augosto Pinochet, the dictator of Chile, for his role in the murder and torture of many of his political opposition. When Pinochet was traveling through the U.K. in 1998, he was arrested by order of the Spanish court. (U.K. officials released him back to Chile two years later.) “After reviewing this report, we will give consideration to reopening petitions or filing new petitions in European courts under the principles of universal jurisdiction,” said Baher Azmy, the legal director of the Center for Constitutional Rights, a group that has represented Guantanamo detainees including Majid Khan and Abu Zubaydah, two detainees who went through the CIA’s black-site prisons.

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Did anyone doubt that?

President George W. Bush ‘Knew Everything’ About CIA Interrogation (BBC)

Former US President George W Bush was “fully informed” about CIA interrogation techniques condemned in a Senate report, his vice-president says. Speaking to Fox News, Dick Cheney said Mr Bush “knew everything he needed to know” about the programme, and the report was “full of crap”. The CIA has defended its use of methods such as waterboarding on terror suspects after the 9/11 attacks. The Senate report said the agency misled politicians about the programme. But the former Republican vice-president dismissed this, saying: “The notion that the committee is trying to peddle that somehow the agency was operating on a rogue basis and that we weren’t being told – that the president wasn’t being told – is a flat-out lie.”

In the interview on Thursday, Mr Cheney said the report was “deeply flawed” and a “terrible piece of work”, although he admitted he had not read the whole document. President Bush “knew everything he needed to know, and wanted to know” about CIA interrogation, he said. “He knew the techniques … there was no effort on my part to keep it from him. “He was fully informed.” Mr Bush led the charge against the report ahead of its release on Tuesday, defending the CIA on US TV. “We’re fortunate to have men and women who work hard at the CIA serving on our behalf,” he told CNN on Sunday. A summary of the larger classified report says that the CIA carried out “brutal” and “ineffective” interrogations of al-Qaeda suspects in the years after the 9/11 attacks on the US and misled other officials about what it was doing.

The information the CIA collected using “enhanced interrogation techniques” failed to secure information that foiled any threats, the report said. But Mr Cheney said the interrogation programme saved lives, and that the agency deserved “credit not condemnation”. “It did in fact produce actionable intelligence that was vital in the success of keeping the country safe from further attacks,” he said. The UN and human rights groups have called for the prosecution of US officials involved in the 2001-2007 programme. “As a matter of international law, the US is legally obliged to bring those responsible to justice,” Ben Emmerson, UN Special Rapporteur on Human Rights and Counter-Terrorism, said in a statement made from Geneva. He said there had been a “clear policy orchestrated at a high level”.

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