Oct 302019
 
 October 30, 2019  Posted by at 1:52 pm Finance Tagged with: , , , , , , ,  13 Responses »


Rembrandt van Rijn Portrait of Rembrandt with gorget 1629

 

During the Senate hearing into Boeing on October 29, Senator Jon Tester told the company’s CEO Dennis Muilenburg: “I would walk before I would get on a 737 MAX. I would walk.” He added: “There is no way … You shouldn’t be cutting corners and I see corners being cut.”

That’s all fine and well, but the hearing, which continues today, Wednesday, lays bare a giant gap in US law: that of accountability. Muilenburg is the “ultimately responsible” in a chain of command that is responsible for killing 346 people. But he is still the CEO, even if he was demoted from the chairman of the board position. Which was taken over by another -10 year- veteran of the company by the way. Fresh insights galore.

If you are employed by a large company, you can sign off on such decisions, the ones that kill people, and walk away unscathed. It reminds one of Monsanto/Bayer, which just annnounced that the number of Roundup lawsuits against it went from 18,000 in July to 43,000 today. Bayer at the same time announced that its turnover rose by 6% in Q3. 43,000 lawsuits and they’re doing fine, thank you.

In that same vein, Boeing shares rose 2.4% last night after the hearing (“a sign investors were relieved.”) What the “investors” buying those shares may have missed is that India’s budget carrier IndiGo ordered 300 new aircraft from Airbus, at an initial cost of $33 billion -which will be subject to a juicy discount, but still-.

Now, Boeing is America’s biggest exporter. It’s also one of the cornerstones of Pentagon policy, a huge provider for the US military. So one can only expect the Senate to be lenient, to appear to be tough but let things more or less go. Still, the fact remains that Muilenburg et al made cost-cutting and other decisions that killed 346 people. But CNCB still labeled this a “brutal Senate hearing”. Yeah. Define ‘brutal’.

Maybe the thing is that those deaths were not in the US, but in Indonesia and Ethiopia. Think maybe the Senate is influenced by that? What do you think would have happened if two 737 MAX’s had fallen out of the sky in the US, even if only in deplorables’ territory? We can sort of imagine, can’t we?

And no, it’s not an all black and white picture, some people involved made some sense (via Seattle Times):

Boeing 737 MAX Should Be Grounded Until Certification Process Is ‘Reformed’ – Senator

..at least one member of the Senate committee that grilled Muilenburg on Tuesday suggested the troubled aircraft shouldn’t be flying again until a much-maligned Federal Aviation Administration (FAA) oversight program retreats from its practice of delegating authority to Boeing and other aerospace manufacturers.

Sen. Richard Blumenthal — citing revelations in recent news reports of a Boeing engineer’s claims that the MAX’s safety was compromised by cost and schedule considerations, and that the company pushed to undercut regulatory oversight — pushed back against findings that the FAA’s practice of delegating more safety certification authority is only likely to increase.

“The story of Boeing sabotaging rigorous safety scrutiny is chilling to all of us — and more reason to keep the 737 MAX grounded until certification is really and truly independent and the system is reformed,” said Blumenthal, D-Conn.

But, you know, the entire narrative is about ‘the company’, not about the people in the company who make these fatal decisions. They can do whatever they want, secure in the knowledge they will never be held to account. For financial losses perhaps at some point, but not for the loss of life. At best, they’ll get fired and walk away with a huge bonus. And that’s just wrong.

And it’s not like there were no warning signs (via Seattle Times again, from Oct 3):

Boeing Rejected 737 MAX Safety Upgrades Before Fatal Crashes – Whistleblower

Seven weeks after the second fatal crash of a 737 MAX in March, a Boeing engineer submitted a scathing internal ethics complaint alleging that management — determined to keep down costs for airline customers — had blocked significant safety improvements during the jet’s development. The ethics charge, filed by 33-year-old engineer Curtis Ewbank, whose job involved studying past crashes and using that information to make new planes safer, describes how around 2014 his group presented to managers and senior executives a proposal to add various safety upgrades to the MAX.


The complaint, a copy of which was reviewed by The Seattle Times, suggests that one of the proposed systems could have potentially prevented the crashes in Indonesia and Ethiopia that killed 346 people. Three of Ewbank’s former colleagues interviewed for this story concurred. The details revealed in the ethics complaint raise new questions about the culture at Boeing and whether the long-held imperative that safety must be the overarching priority was compromised on the MAX by business considerations and management’s focus on schedule and cost. Managers twice rejected adding the new system on the basis of “cost and potential (pilot) training impact,” the complaint states.

This one is from AP, Oct 18. These are just the most recent revelations, this stuff goes back years. Neither Boeing nor the FAA ever did anything, until the planes started falling from the skies:

Messages From Former Boeing Test Pilot Reveal 737MAX Concerns

A former senior Boeing test pilot told a co-worker that he unknowingly misled safety regulators about problems with a flight-control system that would later be implicated in two deadly crashes of the company’s 737 Max. The pilot, Mark Forkner, told another Boeing employee in 2016 that the flight system, called MCAS, was “egregious” and “running rampant” while he tested it in a flight simulator.

“So I basically lied to the regulators (unknowingly),” wrote Forkner, then Boeing’s chief technical pilot for the 737. The exchange occurred as Boeing was trying to convince the Federal Aviation Administration that MCAS was safe. MCAS was designed at least in part to prevent the Max from stalling in some situations. The FAA certified the plane without fully understanding MCAS, according to a panel of international safety regulators.

Forkner also lobbied FAA to remove mention of MCAS from the operating manual and pilot training for the Max, saying the system would only operate in rare circumstances. FAA allowed Boeing to do so, and most pilots did not know about MCAS until after the first crash, which occurred in October 2018 in Indonesia.

As I covered extensively before the issue at hand is that Boeing, in order to cut costs, among other things, decided to have just one -active- “angle-of-attack” sensor (which measures the angle of the plane vs income air, it’s located at the bottom front of the fuselage) on the plane. All it takes is one bird flying into it to compromise and/or deactivate that sensor. And then neither the software not the pilots know what to do anymore. But yeah, it’s cheaper… One sensor won’t do, nor will two, you need at least three in case one is defective. But yeah, that costs money. Seattle Times once again:

Messages From Former Boeing Test Pilot Reveal 737MAX Concerns

Boeing’s chief engineer for commercial airlines acknowledged that the company erred by not specifically testing the potential for a key sensor to erroneously cause software on the 737 Max to drive down the plane’s nose. In both fatal crashes, faulty data from one of two angle-of-attack sensors, which measure the pitch of the plane against the oncoming stream of air, caused the 737 Max’s Maneuvering Characteristics Augmentation System, or MCAS, to drive down the jet’s nose, which pilots struggled to counteract before ultimately entering a fatal dive.


John Hamilton, vice president and chief engineer of Boeing Commercial Airplanes, told senators that the company “did test the MCAS uncommanded inputs to the stabilizer system, due to whatever causes was driving it, not specifically due to an AOA sensor.’’ Senator Maria Cantwell of Washington, the Senate Commerce Committee’s top Democrat, asked if he now thought that was wrong. “In hindsight, senator, yes,’’ Hamilton replied.

They didn’t test the hardware at all, they tested the software! And all they have to say is that that was wrong. But only in hindsight! And then they tried to fix the mess they created with a new software program, MCAS, but didn’t even tell the pilots it existed. I kid you not! They did this because it might have required pilots to do more training, which raises the price of a plane, and they were already losing out to Airbus.

And lest we forget, this all happened because when Boeing was busy spending its capital on buying back its own shares, Airbus had developed a new plane to accommodate a much more energy-efficient -though larger- engine. When Boeing figured that out, they had neither the time nor the money left (because of the share buybacks) to develop their own new plane.

So what they did was they stuck such an engine (which they did have) onto a 737 model that was not equipped for the much bigger and heavier load. That in turn lead them to work on a software solution to lift the nose of the plane despite that load, which might have worked in theory but was always a bad idea, something in the vein of putting a giraffe’s neck on a hummingbird.

But Muilenburg and his people kept pushing it all, because they knew they had been caught awfully wanting, and they needed that more cost-efficient plane. And this is how all the ensuing mess started. It was all because of money. Of the execs being caught with their pants down, and trying to hide their naked hairy asses.

And then, as I started out this essay, they are still not held accountable. The company will face billions in ‘repair’ damages, some of them may lose their jobs or bonuses, but none will be held responsible for the deaths of those 346 people.

That is just not right. Not in the case of Monsanto, and not in that of Boeing. Not all Boeing planes are disasters, but the 737 definitely is. Donald Trump a few months ago suggested they should just rebrand the plane, give it another name, do some expensive PR work and bob’s your uncle. But let me ask you, would you fly on a 737, even if under another name? Far as I know, all they did was change the software, not the hardware.

Plus, the other day some airline, was that in South Korea?!, grounded a whole bunch of 787’s because of cracks on their wings. Look, I’m not saying Boeing’s in trouble. I’m just saying Boeing’s in deep trouble. But then, you know, they’ll kick out Muilenburg and some other guys, and a few FAA heads will retire, and they’ll declare the rotten apples gone, and we’re off to a whole new start. Yay! But the 346 people will still be dead.

 

 

 

 

Jun 212019
 


Pablo Picasso La guerre 1951

 

Trump Approved Strikes On Iran But Cancelled Them: Reports (AlJ)
The Drone Iran Shot Down Was a $220 Million Surveillance Monster (W.)
The Real Meaning Of Trump’s Deplorable Aggression Against Iran (Stockman)
Senate Blocks Arms Sales To Saudi Arabia In Bipartisan Trump Rebuke (ZH)
More Spent On S&P 500 Buybacks Than All 2018 R&D (Axios)
China Concerned Over Possible US Dollar Shortage Risk (SCMP)
US Spend Ten Times More On Fossil Fuel Subsidies Than Education (F.)
Bring on Higher Oil Prices: They’ll Boost the US Economy (WS)
Defiant Italy Urges Changes To EU Rules (R.)
UK Will Be ‘Diminished’ After Brexit – Dutch PM Rutte (Pol.eu)
Ecuador Judge Frees Ola Bini, Swedish Programer Close To Assange (R.)
Ten Cities Ask EU For Help To Fight Airbnb Expansion (G.)
The Dangerous Methane Mystery (CP)

 

 

When something like this is leaked to multiple news outlets at the same time, isn’t it likely the White House itself does the leaking?

Kim Dotcom’s take:

Trump: Attack Iran now!
General: Iran can sink our Carrier strike group in the region.
Trump: What?
General: If we strike Iran now they can retaliate against thousands of US sailors.
Trump: WTF!
General: This isn’t Syria Sir.
Trump: Call it off.
THE END

Trump Approved Strikes On Iran But Cancelled Them: Reports (AlJ)

US President Donald Trump approved military strikes on Friday against Iran in retaliation for the downing of an unmanned surveillance drone, but pulled back from launching the attacks, the New York Times reported. A US official told Associated Press that the military made preparations on Thursday night for limited strikes on Iran in retaliation for drone shootdown, but approval was abruptly withdrawn. The official, who was not authorised to discuss the operation publicly and spoke on condition of anonymity, said the targets would have included radars and missile batteries.


Planes were in the air and ships were in position, but no missiles fired, when the order to stand down came, the Times cited one senior administration official as saying. The abrupt reversal put a halt to what would have been Trump’s third military action against targets in the Middle East, the paper added, saying Trump had struck twice at targets in Syria, in 2017 and 2018. However, it is not clear whether attacks on Iran might still go forward, the paper said, adding that it was not known if the cancellation of strikes had resulted from Trump changing his mind or administration concerns regarding logistics or strategy.

Read more …

This thing is huge: “..a wingspan of more than 130 feet and a maximum takeoff weight of more than 16 tons..”

Why would Iran want that in its airspace?

The Drone Iran Shot Down Was a $220 Million Surveillance Monster (W.)

Early Thursday morning, Iran shot down a United States unmanned aerial vehicle over the Strait of Hormuz, which runs between the Persian Gulf and the Gulf of Oman. Iran identified the drone as an RQ-4A Global Hawk, a $220 million UAV that acts as a massive surveillance platform in the sky. The attack marks an escalation with tensions already running high between the US and Iran—particularly because of the value and technical sensitivity of the downed drone. Iran’s Islamic Revolutionary Guard Corps said on Thursday that the Northrup Grumman-made Global Hawk—part of a multibillion-dollar program that dates back to 2001—had entered Iranian airspace and crashed in Iranian waters; US Central Command confirmed the time and general location of the attack, but insists that the drone was flying in international airspace.


Alamy

The incident comes on the heels of another situation last week in which the US accused Iran of attacking two fuel tankers in the Gulf of Oman. The US also said that Iran had attempted to shoot down a different UAV—an MQ-9 Reaper drone—but failed. The Pentagon also linked Iran to an attack on a Reaper drone in Yemen two weeks ago that caused the vehicle to crash. Thursday’s attack, though, targeted a massive and much more expensive surveillance drone, and likely represents a more definite escalation. “There’s a lot going on here, and we’re probably only seeing some of it,” says Thomas Karako, director of the Missile Defense Project at the Center for Strategic and International Studies.


“This is a more expensive, higher-altitude, more capable, long-range intelligence surveillance reconnaissance craft. If they’re shooting down aircraft in international airspace over international waters, that’s likely to elicit some kind of measured reprisal.” Global Hawks are massive surveillance platforms, in operation since 2001, with a wingspan of more than 130 feet and a maximum takeoff weight of more than 16 tons, equivalent to roughly seven shipping containers of cocaine. They have a range of more than 12,000 nautical miles, can fly at strikingly high altitudes of 60,000 feet, and can stay aloft for 34 hours straight.


U.S. military drone RQ-4A Global Hawk – Eric Harris/U.S. Air Force/Handout via REUTERS

Read more …

Iran has no army to speak of, and hardly an economy. But it does have friends.

The Real Meaning Of Trump’s Deplorable Aggression Against Iran (Stockman)

Iran has no blue water Navy that could even get to the Atlantic and only 18,000 sailors including everyone from admirals to medics; an aging, decrepit fleet of war planes with no long range flight or refueling capabilities; ballistic missiles that mainly have a range of under 800 miles; a very limited air defense based on a Russian supplied S-300 system (not the far more capable S-400); and a land Army of less than 350,000 or approximately the size of that of Myanmar. Indeed, Iran’s defense budget of less than $15 billion amounts to just 7 days of spending compared to the Pentagon’s $750 billion; and it is actually far less even in nominal terms than Iran’s military budget under the Shah way back in the late 1970’s. In inflation-adjusted dollars, Iran’s military expenditure today is less than 25% of the level prior to the Revolution.

Whatever the foibles of today’s Iranian theocratic state, a thriving military power it is not. In fact, that’s the real irony. Mostly what comprises the core of Iran air force is left over 40-50 year-old planes that had been purchased from the US under the Shah, and which have been Jerry-rigged with bailing wire and bubble gum to stay aloft and to accommodate some modest avionics and armaments modernizations. As one analyst further noted, some of its planes were actually gifts from Saddam Hussein! Much of the IRIAF’s equipment dates back to the Shah era, or is left over from Saddam Hussein’s Iraqi air force, which flew many of its planes to Iran during the 1991 Persian Gulf War to avoid destruction. American-made F-4, F-5 and F-14 fighters dating from the 1970s remain the backbone of the Iranian air force.

So military threat has absolutely nothing to do with it. Washington is knee deep in harms’ way and on the verge of starting a war with Iran solely on account of a misguided notion that the Persian Gulf is an American Lake that needs to be policed by the US Navy; and, more crucially, that Washington has the right to control Iran’s foreign policy and determine what alliances it may and may not have in the region – including whether or not they pass muster with Bibi Netanyahu. Stated differently, the missions of protecting the oil supply lines and regulating the foreign policy of what amounts to a two-bit economic power is straight out of the playbook of Empire First. As such, it amounts to a foolish policy of putting America’s actual security last.

Read more …

When your own party turns against you, it’s time to pay attention.

Senate Blocks Arms Sales To Saudi Arabia In Bipartisan Trump Rebuke (ZH)

The Senate voted on Thursday to block billions of dollars of armaments to Saudi Arabia in what the New York Times described as a “sharp and bipartisan rebuke of the Trump administration’s attempt to circumvent Congress” by declaring an emergency over Iran. “In the first of a series of three back-to-back votes, Republicans joined Democrats to register their growing anger with the administration’s use of emergency power to cut lawmakers out of national security decisions, as well as the White House’s unflagging support for the Saudis despite congressional pressure to punish Crown Prince Mohammed bin Salman after the killing last October of the journalist Jamal Khashoggi”. -NYT

The vote marks the sharpest division between the White House and lawmakers to date – and is the second time in recent months that the administration has faced bipartisan pushback against foreign policy. In April, both the House and Senate voted to cut off military assistance to Saudi Arabia for use in Yemen under the 1973 War Powers Act, only for Trump to veto the measure (the second of his presidency). And once again, Trump will use his veto power to override Congress: “While the Democratic-controlled House is also expected to block the sales, Mr. Trump has pledged to veto the legislation, and it is unlikely that either chamber could muster enough support to override the president’s veto”. -NYT

“This vote is a vote for the powers of this institution to be able to continue to have a say on one of the most critical elements of U.S. foreign policy and national security,” said New Jersey Democrat Sen. Bob Menendez, lead sponsor of the resolutions of disapproval. “To not let that be undermined by some false emergency and to preserve that institutional right, regardless of who sits in the White House.” 22 pending arms sales to three Arab nations were announced in late May utilizing an emergency provision contained in the Arms Export Control Act. In total, $8.1 billion in munitions are part of the sales.

Read more …

Call that an economy?

More Spent On S&P 500 Buybacks Than All 2018 R&D (Axios)

Total research and development spending in the U.S. last year totaled $608 billion, according to data from the Federal Reserve, while corporations in the S&P 500 spent $806 billion buying back their own stock. The total for all companies was well over $1 trillion. What it means: In 2018, the 500 biggest U.S. companies spent 33% more on their stock buyback programs than the country is investing in research and development. The trend looks to be continuing this year as the U.S. is on pace to spend $642 billion on R&D in 2019 and poised to surpass last year’s $1.085 trillion total in buyback spending.

Read more …

Starting to sound serious.

China Concerned Over Possible US Dollar Shortage Risk (SCMP)

Anbang Insurance Group’s plan to sell its condos at the Waldorf Astoria hotel in New York is the latest in the string of high-profile Chinese divestments that underscores China’s concern that the nation is running short of US dollars. The Chinese holding company bought the Waldorf for a record US$1.95 billion in 2014, but under pressure from the Chinese government, is reported to be seeking buyers for the 375 flats at the hotel despite a glut of unsold luxury flats in Manhattan. In total, it is aiming to shed a portfolio of assets that includes 15 hotels having, like other highly leveraged Chinese conglomerates with overseas investments, been placed under scrutiny by Beijing.

Chinese real estate mogul Wang Jianlin’s Dalian Wanda Group has dumped US$25 billion in assets since 2017, while troubled conglomerate HNA Group was forced to sell everything from Hong Kong land parcels, to its stakes in Deutsche Bank, Hilton Grand Vacations as well as its airlines. Chinese oil giant CEFC China Energy also wants to sell 100 properties worldwide. The government’s dramatic about-face from encouraging aggressive overseas acquisitions to cracking down on risky lending and overseas transfers underscores worries over the risk that the nation could run short of enough US dollars to make the interest and principal payments on its mounting debt at a time when the current account balance is coming under pressure.

“These companies are selling their assets because they don’t have enough US dollars,” said Kevin Lai, chief economist for Asia excluding Japan at Daiwa Capital Markets. “China does not want to use its US$3 trillion foreign reserves for the debt repayments, so that is why these companies need to sell their assets.” On the surface, China should be the last country to worry about a US dollar shortage given that its US$3.1 trillion worth of foreign exchange reserves is the largest help by any nation.

But analysts believe China’s reserves may be insufficient to pay for its massive imports and debt payments in response to a worse-case scenario caused by the ongoing trade war with the United States, particularly since many of its assets cannot readily be turned into cash to help the central bank to save a crashing financial system or sharp devaluation of the yuan’s exchange rate. “In reality, they don’t have as much as US$3.1 trillion of liquid reserves,” said Rabobank analyst Michael Every. “I would estimate they probably only have a little bit more liquid reserves than what they hold in US Treasuries.”

Read more …

Fuel fools.

US Spend Ten Times More On Fossil Fuel Subsidies Than Education (F.)

A new International Monetary Fund (IMF) study shows that USD$5.2 trillion was spent globally on fossil fuel subsidies in 2017. The equivalent of over 6.5% of global GDP of that year, it also represented a half-trillion dollar increase since 2015 when China ($1.4 trillion), the United States ($649 billion) and Russia ($551 billion) were the largest subsidizers. Despite nations worldwide committing to a reduction in carbon emissions and implementing renewable energy through the Paris Agreement, the IMF’s findings expose how fossil fuels continue to receive huge amounts of taxpayer funding. The report explains that fossil fuels account for 85% of all global subsidies and that they remain largely attached to domestic policy.


Had nations reduced subsidies in a way to create efficient fossil fuel pricing in 2015, the International Monetary Fund believes that it “would have lowered global carbon emissions by 28 percent and fossil fuel air pollution deaths by 46 percent, and increased government revenue by 3.8 percent of GDP.” The study includes the negative externalities caused by fossil fuels that society has to pay for, not reflected in their actual costs. In addition to direct transfers of government money to fossil fuel companies, this includes the indirect costs of pollution, such as healthcare costs and climate change adaptation. By including these numbers, the true cost of fossil fuel use to society is reflected.

Read more …

Yeah, try and sell that to your voters.

Bring on Higher Oil Prices: They’ll Boost the US Economy (WS)

Powered by the iffy situation in the Persian Gulf, the Strait of Hormuz, and the Gulf of Oman, with attacks on tankers and now the downing of a US drone, the price of crude oil got a little nervous in recent days. WTI jumped about 6% today to over $57 a barrel. But this was just a minor uptick in the overall scheme of things: The US, which has become the largest oil producer in the world, is in the middle of its second oil bust in five years:

P These two oil busts are largely a consequence of surging US crude oil production. During the oil bust of 2014-2016, the price of WTI collapsed by over 75%, careening from $107 per barrel to a low of $27 per barrel in 18 months, before starting to rebound. In the process, a slew of oil-and-gas drillers filed for bankruptcy. For a while it looked like the shale boom, where all the growth in production had come from, was running out of money, and therefore out of fuel. Production fell sharply from early 2015 through much of 2016, but then new money from Wall Street appeared, and production began to soar again, hitting new records all along the way.


Shale wells produce a variety of liquid hydrocarbons (they also produce gaseous hydrocarbons which are not included here). This production of crude oil and petroleum products soared from just over 7 million barrels per day (bpd) in 2010 to 16.6 million bpd currently, according to EIA data:

P The US used to be the largest net importer of crude oil and petroleum products in the world. Between 2005 and 2008, “net imports” (imports minus exports) of crude oil and petroleum products exceeded 12 million bpd. But surging production in the US has slashed imports. And recently exports have surged, and the trade in crude oil and petroleum products is now nearly balanced between the US and the rest of the world. And the net imports are heading toward zero – the point where the US imports as much as it exports. In February, net imports were down to just 176,000 barrels a day, the lowest in the EIA data going back to 1971. In March, the most recent data available, net imports were 842,000 barrels a day:

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“We have a stability and growth pact that focuses on stability and not on growth. We want to invert this order..”

Defiant Italy Urges Changes To EU Rules (R.)

Italy’s prime minister defied European Union concern over its debt on Thursday, saying the bloc’s fiscal rules should focus on growth rather than stability, and blaming partners for unfair tax competition and excessive surpluses. Arriving at a meeting of European leaders in Brussels, Giuseppe Conte dismissed warnings over Rome’s growing debt and said Italy was complying with EU fiscal rules. “We have a stability and growth pact that focuses on stability and not on growth. We want to invert this order,” Conte told reporters. Under current rules, EU states with large public debts should gradually reduce them, but Rome’s debt increased last year and is forecast to expand further until 2020.


Conte said the Italian government will complete the assessment of its finances in a meeting on Wednesday after which he expects new estimates to point to a 2019 deficit of around 2.1% of output, below the EU commission’s expectations. It is unclear, however, whether this would be enough for the EU Commission to stop a disciplinary procedure against Italy, which Brussels has said would be warranted on the basis of 2018 data and EU forecasts. [..] At the summit where EU leaders are discussing the bloc’s top jobs for the coming years, Conte echoed belligerent tones used by Italy’s deputy prime minister and far-right leader Matteo Salvini in attacking other EU members for unfair competition. He said there was something wrong in the fact that Italian firms relocate to other EU states for tax reasons – a probable reference to low corporate levies and lenient regulatory approaches in places like Luxembourg, the Netherlands or Ireland.

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“..you are not big enough to have an important position, important enough on the world stage, on your own.”

UK Will Be ‘Diminished’ After Brexit – Dutch PM Rutte (Pol.eu)

No U.K. prime minister would be able to mitigate the economic impact of Brexit on Britain or sustain its global power outside of the EU, especially after a no-deal exit, Dutch Prime Minister Mark Rutte warned Conservative leadership candidates today. Speaking ahead of the European Council summit in Brussels, he told BBC Radio 4’s “Today” program this morning: “With a hard Brexit — even with a normal Brexit — the U.K. will be a different country. It will be a diminished country. “It is unavoidable. Because you are not any longer part of the European Union and you are not big enough to have an important position, important enough on the world stage, on your own.”

The leader of the Netherlands, who described himself as an “Anglophile,” also said the next occupant of Downing Street must be clear about what they want from the EU if they aim to modify the so-called Political Declaration on the future relationship between the two sides; however he ruled out any reopening of the Withdrawal Agreement struck by outgoing British premier Theresa May. He dismissed claims by leadership hopeful Boris Johnson that the U.K. could be granted a Brexit transition period after a no-deal departure. “As Boris Johnson would say, Brexit is Brexit, and a hard Brexit is a hard Brexit,” Rutte said. “I don’t see how you can sweeten that.”

Home Secretary and Johnson’s rival Sajid Javid’s claim that he could renegotiate the controversial backstop plan directly with Dublin also got short shrift from Rutte, who said Ireland is an integral part of the EU and “we cannot have a backdoor” to the single market. Both Johnson and Javid have vowed to take Britain out of the EU, deal or no deal, by the current deadline of October 31 if they fail to renegotiate the exit plan with Brussels before then. The Dutch leader warned that any no-deal departure would be “chaos.” He said if a new British PM wanted an extension to continue negotiating on Brexit, something Environment Secretary Michael Gove has proposed, they would have to be clear about “making changes to the red lines the U.K. is currently holding.”

Read more …

Will the courts dare turn against Lenin Moreno?

Ecuador Judge Frees Ola Bini, Swedish Programer Close To Assange (R.)

An Ecuadorean judge on Thursday ordered that a Swedish citizen and personal friend of WikiLeaks founder Julian Assange be freed, two months after he was detained for alleged participation in a hacking attempt on the government. But Ola Bini, a 36-year-old software developer who has lived in Ecuador for five years, remains under investigation in the case and will be barred from leaving the country, according to the court ruling. Bini was detained in April at the Quito airport before boarding a flight to Japan, hours after Ecuador withdrew asylum for Assange, who had lived at its London embassy for almost seven years while facing spying charges related to WikLeaks’ 2010 publication of secret U.S. diplomatic cables.


Ecuador’s Interior Minister Maria Paula Romo had accused him of seeking to destabilize the Andean country’s government and compromising its national security. Bini has denied those allegations, but has acknowledged being close to Assange. “His right to freedom was violated,” judge Patricio Vaca said, reading the Thursday court ruling. “We accept the habeas corpus action proposed by the Swedish citizen Ola Bini, who can be immediately freed.” Bini worked at the Quito-based Center for Digital Autonomy, an organization focusing on cybersecurity and data privacy. His lawyer, Carlos Soria, told journalists on Thursday that he would ask “international courts” to determine any “prejudice” to the case that may have resulted from his arrest. “We will take actions against everyone because the court has determined that his detention was arbitrary. Now they will have to pay,” Soria said. “We will demonstrate Ola Bini’s innocence.”

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Better do it fast.

Ten Cities Ask EU For Help To Fight Airbnb Expansion (G.)

Ten European cities have demanded more help from the EU in their battle against Airbnb and other holiday rental websites, which they argue are locking locals out of housing and changing the face of neighbourhoods. In a joint letter, Amsterdam, Barcelona, Berlin, Bordeaux, Brussels, Krakow, Munich, Paris, Valencia and Vienna said the explosive growth of global short-stay lettings platforms must be on the agenda of the next set of European commissioners. In April the advocate general of the European court of justice found in non-binding opinion that under EU law Airbnb should be considered a digital information provider rather than a traditional real estate agent.

That status, if confirmed by the court, would allow Airbnb and similar platforms to operate freely across the bloc and, crucially, relieve them of any responsibility to ensure that landlords comply with local rules aimed at regulating holiday lets. European cities believe homes should be used first and foremost for living in, the cities said in a statement released by Amsterdam city council. Many suffer from a serious housing shortage. Where homes can be rented out more lucratively to tourists, they vanish from the traditional housing market. The cities said local authorities must be able to counter the adverse effects of the boom in short-term holiday lets, such rising rents for full-time residents and the continuing touristification of neighbourhoods, by introducing their own regulations depending on the local situation .

“We believe cities are best placed to understand their residents needs”, they said. “They have always been allowed to regulate local activity through urban planning and housing rules. The advocate general seems to imply this will no longer be possible when it comes to internet giants”. After several years of strong growth, Airbnb currently has more than 18,000 listings in Amsterdam and Barcelona, 22,000 in Berlin and nearly 60,000 in Paris. Data from the campaign group InsideAirbnb last year suggested that more than half were whole apartments or houses, and that even in cities where short-term lets were restricted by local authorities, up to 30% were available for three or more months a year.

Many cities say the short-term holiday lettings boom is contributing to soaring long-term rents, although speculation and poor social housing provision are also factors. Last year Palma de Mallorca voted to ban almost all listings after a 50% increase in tourist lets was followed by a 40% rise in residential rents.

Read more …

The Big Burp.

The Dangerous Methane Mystery (CP)

The East Siberian Arctic Shelf (“ESAS”) is the epicenter of a methane-rich zone that could turn the world upside down. Still, the ESAS is not on the radar of mainstream science, and not included in calculations by the IPCC (Intergovernmental Panel on Climate Change), and generally not well understood. It is one of the biggest mysteries of the world’s climate puzzle, and it is highly controversial, which creates an enhanced level of uncertainty and casts shadows of doubt. The ESAS is the most extensive continental shelf in the world, inclusive of the Laptev Sea, the East Siberian Sea, and the Russian portion of the Chukchi Sea, all-in equivalent to the combined landmasses of Germany, France, Great Britain, Italy and Japan.

The region hosts massive quantities of methane (“CH4”) in frozen subsea permafrost in extremely shallow waters, enough CH4 to transform the “global warming” cycle into a “life-ending” cycle. As absurd as it sounds, it is not inconceivable. Ongoing research to unravel the ESAS mystery is found in very few studies, almost none, except by Natalia Shakhova (International Arctic Research Center, University of Alaska/Fairbanks) a leading authority, for example: “It has been suggested that destabilization of shelf Arctic hydrates could lead to large-scale enhancement of aqueous CH4, but this process was hypothesized to be negligible on a decadal–century time scale. Consequently, the continental shelf of the Arctic Ocean (AO) has not been considered as a possible source of CH4 to the atmosphere until very recently.”


[..] early-stage warning signals are clearly noticeable; ESAS is rumbling, increasingly emitting more and more CH4, possibly in anticipation of a “Big Burp,” which could put the world’s lights out, hopefully in another century, or beyond, but based upon a reading of her latest report in Geosciences, don’t count on it taking so long. Shakhova’s research is highlighted in a recent article in Arctic News: “When Will We Die?” d/d June 10, 2019, which states: “Imagine a burst of methane erupting from the seafloor of the Arctic Ocean that would add an amount of methane to the atmosphere equal to twice the methane that is already there.”

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May 012019
 


Gustave Courbet The desperate man (self portrait) 1852

 

Maduro Claims Victory Over ‘Deranged’ Coup Attempt (G.)
Zero Percent of Elite Commentators Oppose Regime Change in Venezuela (FAIR)
About That Letter That Mueller Wrote To Barr… (ZH)
The Real ‘Bombshells’ Are About to Hit Their Targets (Kelly)
Why Are Clapper and Brennan Not in Jail?
Wall Street Puts Nearly $2 Billion in American Politics in 2016-18 Cycle
iPhone Sales Fall 17% In First Quarter (G.)
Australia House Prices Continue To Fall, Clearing Way For Rate Cut (SMH)
Tesla Filing Shows Results Were Goosed By A Surge In Credits (LAT)
Julian Assange’s Confinement And Arrest Are A Scandal (Maurizi)
Extradition of Julian Assange Threatens Us All (VIPS)
Canadian Threat Level At America Raised From “Miffed” To “Peeved” (Exp.)
Climate Crisis Facing Australian Rainforests Likened To Coral Bleaching (SMH)

 

 

The things we do for oil.

“‘Maduro had a plane on the tarmac and was ready to leave this morning’, claims @SecPompeo without offering evidence. But as Pompeo admitted just last week, telling lies was (and some may say still is) one of his key job requirements”.

Maduro Claims Victory Over ‘Deranged’ Coup Attempt (G.)

Nicolás Maduro claimed his troops have thwarted a botched attempt to topple him masterminded by Venezuela’s “coup-mongering far right” and Donald Trump’s deranged imperialist “gang”. In an hour-long address to the nation on Tuesday night – his first since the pre-dawn uprising began – Maduro accused opposition leader Juan Guaidó and his political mentor Leopoldo López of seeking to spark an armed confrontation that might be used as a pretext for a foreign military intervention. However, “loyal and obedient” members of Venezuela’s Bolivarian armed forces had put down the mutiny within hours of it starting shortly after 4am, Maduro claimed, in direct contradiction to Guaidó’s earlier remark that the president no longer had military backing.

By noon there only remained a small group of plotters who had chosen “the path of betrayal … [and] handed their souls over to the coup-mongering far right”. “They failed in their plan. They failed in their call, because the people of Venezuela want peace,” Maduro said, surrounded by Venezuela’s military and political elite. “We will continue to emerge victorious … in the months and years ahead. I have no doubt about it.” Maduro said the plotters would “not go unpunished” and said they would face criminal prosecutions “for the serious crimes that have been committed against the constitution, the rule of law and the right to peace”.


[..] Maduro called Tuesday’s “coup-mongering adventure” part of a US-backed plot to destroy the Bolivarian revolution he inherited after Hugo Chávez’s death in 2013. “I truly believe … that the United States of America has never had a government as deranged as this one,” he said, calling Guaidó and his team “useful idiots” of the empire. He also scotched claims from the US secretary of state, Mike Pompeo, that he had been preparing to flee Venezuela for Cuba on Tuesday morning, until he was told to stay put by his Russian backers. “Señor Pompeo, please,” Maduro said.

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Propaganda works.

Zero Percent of Elite Commentators Oppose Regime Change in Venezuela (FAIR)

A FAIR survey of US opinion journalism on Venezuela found no voices in elite corporate media that opposed regime change in that country. Over a three-month period (1/15/19–4/15/19), zero opinion pieces in the New York Times and Washington Post took an anti–regime change or pro-Maduro/Chavista position. Not a single commentator on the big three Sunday morning talkshows or PBS NewsHour came out against President Nicolás Maduro stepping down from the Venezuelan government. Of the 76 total articles, opinion videos or TV commentator segments that centered on or gave more than passing attention to Venezuela, 54 (72 percent) expressed explicit support for the Maduro administration’s ouster.

Eleven (14 percent) were ambiguous, but were only classified as such for lack of explicit language. Reading between the lines, most of these were clearly also pro–regime change. Another 11 (14 percent) took no position, but many similarly offered ideological ammo for those in support. The Times published 22 pro–regime change commentaries, three ambiguous and five without a position. The Post also spared no space for the pro-Chavista camp: 22 of its articles expressed support for the end to Maduro’s administration, eight were ambiguous and four took no position. Of the 12 TV opinions surveyed, 10 were pro-regime change and two took no position.


[..] This comes despite the existence of millions of Venezuelans who support Maduro—who was democratically elected twice by the same electoral system that won Juan Guaidó his seat in the National Assembly—and oppose US/foreign intervention. FAIR (2/20/19) has pointed out corporate media’s willful erasure of vast improvements to Venezuelan life under Chavismo, particularly for the oppressed poor, black, indigenous and mestizo populations. FAIR has also noted the lack of discussion of US-imposed sanctions, which have killed at least 40,000 Venezuelans between 2017–18 alone, and continue to devastate the Venezuelan economy.

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Mueller worried about media coverage.

“House Democrats, who have expressed distrust in the attorney general, are set to vote on Wednesday to allow House Judiciary Committee lawyers to question Barr at Thursday’s hearing.”

About That Letter That Mueller Wrote To Barr… (ZH)

In what the WaPo breathlessly reports late on Tuesday was a rebuke and “complaint” to Attorney General William Barr, special counsel Robert Mueller sent a letter to the AG in late March, just days after Barr sent out his summary to Congress, in which Mueller stated that Barr’s 4-page summary to Congress on the sweeping Russia investigation failed to “fully capture the context, nature, and substance” of Mueller’s work and conclusions, citing a copy of the letter it had obtained using its trusted deep intel sources. Pouring more fuel on the fire, the always pithy Axios adds that “this revelation about Mueller’s dissatisfaction with the characterization of his report will likely escalate the growing rift over Barr’s handling of the special counsel’s investigation.

[..] Or maybe not, and perhaps the WaPo/NYT report is not “so bad” if one actually reads it, because once the breathless WaPo finally does come up for air, we get to paragraph 13 – a point by which most readers have turned out – to read the following real punchline in the WaPo report: “When Barr pressed Mueller on whether he thought Barr’s memo to Congress was inaccurate, Mueller said he did not…” So, Mueller felt there was confusion… but he did not think the memo was inaccurate. Wait, what’s going on here and how is this even a story? Well, if we read the rest of the above sentence, we find the true object of Mueller’s “complaint”: “[Mueller] felt that the media coverage of it was misinterpreting the investigation, officials said.”

Which means that, as the WaPo itself reports, what Mueller was really angry with was the coverage of his report by media such as… the WaPo and the NYT?? The irony, it burns. [..] throughout a subsequent 15 minutes telephone conversation between the special counsel and the attorney general, Mueller’s main worry was “that the public was not getting an accurate understanding of the obstruction investigation.” This goes back to what Mueller’s letter requested: “that Barr release the 448-page report’s introductions and executive summaries, and made some initial suggested redactions for doing so, according to Justice Department officials,” the WaPo writes. What happened then? A few weeks later Barr did just that..

[..] tomorrow Barr is scheduled to testify on Wednesday before the Senate Judiciary Committee about the investigation, and the entire article is meant to focus on the headlines of the WaPo (and NYT) article, and certainly not on paragraph 13 which, not only refutes the prevailing tone that Barr did something wrong, but in fact exonerates him. But that won’t have any impact on tomorrow’s hearing which is now assured to be a complete kangaroo court.

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FISAgate. Get ready.

The Real ‘Bombshells’ Are About to Hit Their Targets (Kelly)

In the next several weeks, Inspector General Michael Horowitz is expected to issue his summation of the potential abuse of the Foreign Intelligence Surveillance Act by top officials in the Obama Administration and holdovers in the early Trump Administration who were overseeing the investigation of Donald Trump’s presidential campaign. And the perpetrators of the so-called FISAgate scandal now are scrambling for cover as the bad news looms. Horowitz announced last March that his office would examine the Justice Department’s conduct “in applications filed with the U.S. Foreign Intelligence Surveillance Court (FISC) relating to a certain U.S. person.” That U.S. person is Trump campaign associate Carter Page.

In October 2016, just two weeks before the presidential election, the Justice Department submitted an application to the FISC seeking authorization to wiretap Page. The court filing accused Page, a Naval Academy graduate and unpaid campaign advisor, of being an agent of Russia. The application cited the infamous Steele dossier—unsubstantiated political propaganda that had been funded by the Hillary Clinton campaign and Democratic National Committee—as its primary source of evidence. But the specific political origin of the dossier intentionally was omitted in the court filing. (Robert Mueller similarly tap danced around the role of Fusion GPS, the political consulting firm that hired Christopher Steele to create the dossier. Mueller never mentioned the name “Fusion GPS” in the 448-page document, referring to it only vaguely as “the firm that produced the Steele reporting.”)


Former FBI Director James Comey and former Deputy Attorney General Sally Yates signed the original FISA application. It was renewed three times; subsequent signers included former acting FBI Director Andrew McCabe and Deputy Attorney General Rod Rosenstein. If there’s one document that represents the malevolence, chicanery and arrogance of the original Trump-Russia collusion fraudsters, it’s the Page FISA application. But—to borrow a favorite term of the collusion truthers—the “walls are closing in” on the FISA abusers.

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Senator Rand Paul: “Subpoena Clapper & Brennan! Demand they answer whether they leaked classified information to the Washington Post. Examine their call records and lock them up if evidence proves them to be the leakers.”

Why Are Clapper and Brennan Not in Jail?

The clearest of all the laws concerning U.S. intelligence is Section 798, 18 U.S. Code—widely known in the Intelligence Community as “the Comint Statute,” or “the 10 and 10.” Unlike other laws, this is a “simple liability” law. Motivation, context, identity, matter not at all. You violate it, you are guilty and are punished accordingly.

Here it is: (a) Whoever knowingly and willfully communicates, furnishes, transmits, or otherwise makes available to an unauthorized person, . . . any classified information— (1) concerning the nature, preparation, or use of any code, cipher, or cryptographic system of the United States or any foreign government; or (2) concerning the design, construction, use, maintenance, or repair of any device, apparatus, or appliance used or prepared or planned for use by the United States …or (3) concerning the communication intelligence activities of the United States or any foreign government; or (4) obtained by the processes of communication intelligence . . . Shall be fined under this title or imprisoned not more than ten years, or both.


On December 9 and 10, 2016, the New York Times and the Washington Post independently reported that anonymous senior intelligence officials had told them that, based on intercepted communications, the intelligence agencies agreed that Russia had hacked the Democratic National Committee to help Donald Trump win the election. Their evidence was the fact of their access to U.S communications intelligence. A flood of subsequent stories also cited allegations by “senior intelligence officials” that “intercepted communications” and “intercepted calls” showed that “members of Donald J. Trump’s 2016 presidential campaign and other Trump associates had repeated contacts with senior Russian intelligence officials in the year before the election.” Incontrovertibly, the officials who gave these stories to the Times and Post violated the Comint Statute, and are subject to the “10 and 10” for each count.

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$2.5 million every single day for two years. That’s $1.9 billion.

Wall Street Puts Nearly $2 Billion in American Politics in 2016-18 Cycle

Wall Street poured at least $1.9 billion into the political process, the largest-ever amount for a non-presidential year, according to a new report by Americans for Financial Reform. This sum outstrips the total of $1.4 billion, in the 2013-14 election cycle, by 36 percent. The figure, which includes contributions to campaign committees and leadership PACs ($922 million) and lobbying expenditures ($957 million), reflects a massive rush of pro-industry nominees and legislation over the last two years, at a time when the biggest banks made $100 billion in profits for the first time. Industry subsequently spent heavily to influence what became one of the hardest-fought mid-term campaigns in decades.


“The last election cycle demonstrated yet again that Wall Street political spending produces policies that will do lasting financial damage to most Americans, including massive tax cuts for big banks, fewer consumer and investor protections, and other policies that that drive inequality and economic vulnerability,” said Lisa Donner, executive director, Americans for Financial Reform. “Year after year, big money in politics helps Wall Street rig the system in its own favor, and against the rest of us, and insulate itself from accountability, even though voters across party lines oppose so many of the policies it seeks.”

The 63-page report, “Wall Street Money in Washington,” draws on a special data set compiled by the Center for Responsive Politics for AFR in order to provide a more precise look at financial services industry spending. The set excludes spending by health insurers, who work to influence a different group of issues than, for example, banks. As the data does not include “dark money” that goes mostly unreported, the actual sums of Wall Street spending are surely much higher.

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So Apple buys back another $75 billion and shares rise 5%. But of course.

iPhone Sales Fall 17% In First Quarter (G.)

Apple’s iPhone sales fell 17% in the first three months of the year as the company’s flagship product continued to struggle. The tech company reported revenues of $31.05bn in iPhone revenues for the quarter, the majority of the $58.bn in revenues Apple brought in over the three months. The news was less gloomy than expected and Apple’s shares spiked 5% in after hours trading as Apple announced it was buying back another $75bn of its shares. The company made a profit of $11.6bn – ahead of expectations. But this quarter marked another quarterly decline in profit and revenue as the company struggled to move beyond the iPhone. In January Apple reported its first decline in revenues and profits in over a decade as slowing sales of iPhones and an economic slowdown in China took their toll.


Those results came after chief executive Tim Cook shocked investors by issuing Apple’s first profits warning since 2002 citing “the magnitude of the economic deceleration, particularly in greater China.” The company has stopped reporting unit sales of iPhones – leaving analysts searching other sources of data for their estimates. Most don’t expect a recovery in sales until the next generation of phones, using the super-fast 5G network, are launched, likely to be in 2020. In the meantime Apple is repositioning itself as a services and software company as well as the manufacturer of hardware. “Investors are slowly shifting their focus away from the iPhone cycle and valuing the company more based on the ecosystem of hardware, software, and services, but it will take several years for this to become consensus,” Gene Munster, managing partner of Loup Ventures, wrote in a blog post this week.

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Why? Maybe prices are far too high. Why would you want to keep them that way?

Australia House Prices Continue To Fall, Clearing Way For Rate Cut (SMH)

The national property market is enduring its biggest fall in values since the global financial crisis, being led down by double-digit drops in Sydney and Melbourne. New analysis by CoreLogic shows house values in Sydney dropped 0.8 per cent in April to be down by 11.8 per cent over the past 12 months. The situation is worse in Melbourne where values fell by 0.7 per cent last month to be down 12.6 per cent over the past year. Overall dwelling values in Sydney dropped by 0.7 per cent to be 10.9 per cent lower over the year. Since their peak in September 2017, Sydney dwelling values have fallen by 14.5 per cent.


In Melbourne, dwelling values dropped by 2.6 per cent to be 10 per cent down over the past 12 months. They have fallen by 10.9 per cent since their peak. National dwelling values were down by 0.5 per cent in the month to be down by 7.2 per cent on an annual basis, the largest drop since the 12 months to February 2009. Every capital city except Canberra suffered a fall in house prices last month with Hobart, which had been the nation’s strongest market, seeing a 1.2 per cent drop in April. Canberra, where values lifted last month, and Hobart are the only two capitals where prices are still growing above the inflation rate on an annual basis.

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Subsidies “R” Us.

Tesla Filing Shows Results Were Goosed By A Surge In Credits (LAT)

Tesla’s financial results released last week didn’t mention that the automaker’s revenue included $200 million collected from regulatory credits. When Chief Executive Elon Musk answered questions from analysts, he didn’t point that out, either. The number was buried in the official government filing known as Form 10-Q that Tesla filed Monday with the Securities and Exchange Commission. Without the revenue spike – which is unlikely to be repeated, analysts say – the company’s first-quarter loss would have been much deeper than the $702 million that Tesla reported. Gross margins on Tesla’s cars, a key measure of manufacturing profitability and efficiency, would have taken a significant hit. Bernstein analyst Toni Sacconaghi’s reaction? “Egad,” he said in a note to investors.


Tesla’s shares fell 1.2% to $238.69 on Tuesday. The $235.14 closing price Friday was its lowest in more than two years. The new data add to Tesla’s already bleak financial picture. The $702-million loss followed a $139-million profit in the previous quarter. Sales fell sharply. Automotive revenue plunged 41%, to $3.7 billion from $6.3 billion in the previous quarter, as vehicle deliveries dropped to 63,000 from 90,700 the previous quarter. Operating cash flow turned negative — a net $640 million going out the door over the three months compared to a positive $1.23 billion in the previous period. Cash on hand dropped from $3.69 billion at the end of last quarter to $2.2 billion, including $920 million to pay off convertible bonds.

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“.. they replied to me and my lawyers that they had destroyed the emails, even though the case is still ongoing, very high-profile and controversial.”

Julian Assange’s Confinement And Arrest Are A Scandal (Maurizi)

In the summer of 2015, when Julian Assange had already spent three years inside the embassy, I decided it was important to access the full documentation on his case to try to reconstruct it using factual information. It was at that point that I filed my comprehensive FOIA request on the Julian Assange and WikiLeaks case in four jurisdictions. I ran up against a real rubber wall, one so persistent that have been forced to sue the Swedish and British authorities. The documents I have managed to obtain after a lengthy FOIA litigation, which is still ongoing, provide indisputable evidence of the UK’s role in helping to create the legal and diplomatic quagmire which has kept Julian Assange arbitrarily detained since 2010, as established by the United Nations Working Group on Arbitrary Detention (UNWGAD.)

It was the UK Crown Prosecution Service which advised the Swedish prosecutors against the only judicial strategy that could have brought the Swedish rape investigation to a quick closure: questioning Assange in London, rather than trying to extradite him to Stockholm. It was the Crown Prosecution Service which tried to dissuade the Swedish prosecutors from dropping the case in 2013. Why did the Crown Prosecution Service act this way? And why did the Crown Prosecution Service write to their Swedish counterpart: “Please do not think that the case is being dealt with as just another extradition request”?


When I tried to dig into these facts, I discovered crucial gaps in the Crown Prosecution Service’s documents and asked the Service to provide an explanation for them. Their answer was rather incredible: they replied to me and my lawyers that they had destroyed the emails, even though the case is still ongoing, very high-profile and controversial. The Crown Prosecution Service which destroyed the records is the very same agency in charge of handling the extradition request from the United States, as well as from Sweden, if the Swedish prosecutors reopen the case before the statute of limitations on the rape allegations expires. Will anyone demand transparency and accountability from the Crown Prosecution Service in their handling of the Assange case from the very beginning?

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“It takes two to speak the truth–one to speak and one to hear.”

Extradition of Julian Assange Threatens Us All (VIPS)

Retaliation against Julian Assange over the past decade plus replicates a pattern of ruthless political retaliationagainst whistleblowers, in particular those who reveal truths hidden by illegal secrecy. U.S. law prohibits classifying information “in order to conceal inefficiency, violations of law, or administrative error; to prevent embarrassmentto a person, organization, or agency.” Whether U.S. authorities successfully prosecute Assange, accept a desperate plea deal or keep him tied up with endless litigation, they will succeed in sending the same chilling message to all journalists that they send to potential whistleblowers: Do not embarrass us or we’ll punish you—somehow, someday, however long it takes.

In that respect, one could say damage to journalism already has been done but the battle is not over. This extension of a whistleblower reprisal regime onto a publisher of disclosures poses an existential threat to all journalists and to the right of all people to speak and hear important truths. The U.S. indictment of Julian Assange tests our ability to perceive a direct threat to free speech, and tests our will to oppose that threat.Without freedom of press and the right and willingness to publish, whistleblowers even disclosing issues of grave, life and death public safety, will be like a tree falling in the forest with no one to hear.


The great American writer Henry David Thoreau wrote, “It takes two to speak the truth–one to speak and one to hear.” Today, it takes three to speak the truth–one to speak, one to hear, and one to defend the first two in court. If the U.S. Government has its way, there will be no defense, no truth.

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Real title: “Canada FURY after The Simpsons MOCKS Justin Trudeau amid scandal – ‘COMPLETE disrespect’”

I don’t know what to think of this. You decide. Onion? It’s actually the Express in the UK.

Canadian Threat Level At America Raised From “Miffed” To “Peeved” (Exp.)

Viewers were left disgusted after the word “Newfie” was used in the episode titled ‘D’Oh Canada’. The term is decades old and is considered an offensive, derogatory term for people in Newfoundland and Labrador. According to CTV News, it is commonly used to imply someone is stupid or foolish. The country’s Prime Minister Justin Trudeau also appeared in the episode. During the episode, which aired on Sunday night, the Simpsons family travel to Niagara Falls. Somehow Lisa Simpson ends up falling over the famous waterfall, which separates the US and Canada. In the controversial scene, Lisa stands next to some Canadian youngsters and says: “I’m sure you treat all people equally.”


One says: “Except the Québécois,” before others add, “and the Newfies. “Stupid Newfies.” The scene then cuts to Springfield youngster Ralph Wiggum who says “I’m a Newfie” before clubbing the head of a stuffed baby seal. Twitter erupted with fury following the show’s airing. One said: “I can take a joke. “When, however, it is complete disrespect disguised as a joke, I take exception.” Some also criticised the show for targeting seal hunters. The Simpsons has a long and often contentious past. Most recently the show was condemned for its portrayal of Apu Nahasapeemapetilon, who many now see as racist stereotyping.

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On and on we go.

Climate Crisis Facing Australian Rainforests Likened To Coral Bleaching (SMH)

Animals in Australia’s globally renowned wet tropics are on the brink of extinction after the hottest summer on record, according to official advice that equates the scale of the crisis to coral bleaching on the Great Barrier Reef. The extraordinary warning relates to the lush green coastal fringe spanning Townsville, Cairns and Cooktown in Queensland’s north – the Earth’s oldest rainforest and a World Heritage-listed tourist drawcard. A statement from the board of the Wet Tropics Management Authority on Tuesday said more than half of animal species endemic to the area may be extinct within decades. It called for strong global action to reduce greenhouse gas emissions and protect the ancient area for future generations.


The climate change policies of the major parties are under the microscope during the federal election campaign, as Labor and the Coalition pledge starkly different action to address the crisis. The Queensland government authority says “concerning new evidence has shown an accelerating decline” in the wet tropics’ unique rainforest animals. “Following the hottest summer ever recorded, some of the key species for which the Wet Tropics World Heritage Area was listed are at imminent risk of extinction,” the statement said. [..] Modelling has previously predicted that more than half of the area’s endemic species may be extinct by the end of this century. However the latest findings by James Cook University biodiversity professor Steve Williams suggested “these extinctions are happening even sooner”, the statement said.

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Apr 262019
 


Francisco Goya The dummy 1791

 

Trump Has Just Taken The Biggest Economic Gamble Of His Presidency (AEP)
A Nation at War With Itself (Pat Buchanan)
Trump Attacks Democrat ‘Coup’ In 1st Post-Mueller Interview (RT)
US Is Investigating Assange Under Espionage Act – WikiLeaks (NP)
UN Special Rapporteur On Privacy Meets Assange In Prison: “I Will Act” (Maurizi)
Macron Responds To Gilets Jaunes Protests With €5 Billion Tax Cuts (G.)
Macron: Smaller Schengen Zone Because EU Migration Policies ‘Do Not Work’ (RT)
Irish Backstop Could Undermine EU Standards – Report (G.)
Juncker Refuses To Reject Huawei ‘Just Because It’s Chinese’ (RT)
Huawei Leak Highlights Collapse Of Discipline In May’s Cabinet (G.)
European Equities May Benefit As $1 Trillion In US Buybacks Vanish (ZH)
Universe Expands Faster Than Expected – NASA

 

 

Ambrose calls the depletion of Ghawar a “first-order shock”. Common knowledge though. Still, Trump may not be aware of it either if Ambrose isn’t.

Trump Has Just Taken The Biggest Economic Gamble Of His Presidency (AEP)

Donald Trump’s double strangulation of Iran and Venezuela is reducing spare capacity in the global oil markets to wafer-thin levels very fast. If anything goes wrong in the geopolitical cauldron of world energy over the next six months, we will discover whether Saudi Arabia really is capable of cranking up an extra 2 million barrels a day of crude. What we learnt from the rare glimpse of Saudi Aramco’s books this month is that the legendary Ghawar field is badly depleted. It cannot pump more that 3.8m barrels a day. This is a first-order shock. The company has always asserted with magisterial confidence that it can produce 5m barrels a day without difficulty.

Jean-Louis Le Mee, from Westbeck Capital, says the physical oil markets are on fire. They are heading for a supply deficit of 1.3m barrels a day by the third quarter even if OPEC matches every barrel of lost oil from Iran sanctions. “These numbers should have every investor worried,” he said. Global spare capacity is arguably as low today as it was during the great oil shocks of the last half century. We are skating on thin ice. The immediate wild card is renewed fighting in Libya but other supply problems are stacking up fast. Draconian new rules on shipping fuel to lower sulphur emissions imply a surge in demand for variants of diesel. Bank of America says this will add 1.1m barrels a day in short-term crude demand over coming months. “We see a risk of $US100 Brent by year-end,” it said.

The options markets are not priced for this so the theatrics could be spectacular. Libya is again on the cusp of full-blown civil war after the fateful march on Tripoli by general Khalifa Haftar, the mercurial Nasserist of Benghazi. The National Oil Corporation warns that a free-for-all by rival militias could cause a near total collapse in crude exports. The world could lose another 700,000 barrels a day. Brent crude has risen to a six-month high of $US74.50, up 25 per cent from its average levels over the winter. It has not yet reached the pain threshold for Europe or emerging markets but it is getting close. Oil has of course been much higher in the past – $US148 in 2008 – but the nominal price is not the macro-economic variable that matters. Trouble starts earlier if crude is rising because of a negative supply shock. That is what we face today.

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No, I haven’t become a fan of Buchanan. But his view warrants attention.

“How does a nation so divided stand united in the world? And if it cannot stand united in the world, how long does it remain a great nation?”

A Nation at War With Itself (Pat Buchanan)

President Donald Trump has decided to cease cooperating with what he sees, not incorrectly, as a Beltway conspiracy that is out to destroy him. “We’re fighting all the subpoenas,” Trump said Wednesday. “These aren’t, like, impartial people. The Democrats are out to win in 2020.” Thus the Treasury Department just breezed by a deadline from the House Ways and Means Committee to deliver Trump’s tax returns. Thus the White House will invoke executive privilege to deny the House Judiciary Committee access to ex-White House counsel Don McGahn, who spent 30 hours being interrogated by Robert Mueller’s team. Thus the Justice Department is withholding from the Oversight Committee subpoenaed documents dealing with the decision to include a question on the 2020 Census about citizenship status.

Across the capital, the barricades are going up figuratively as they did physically in the 1960s and ’70s. Once more, it’s us against them. Cognizant of the new reality, Trump seems to be saying: These House investigations constitute a massive political assault, in collusion with a hostile media, to destroy my presidency. We do not intend to cooperate in our own destruction. We are not going to play our assigned role in this scripted farce. We will resist their subpoenas all the way to November 2020. Let the people then decide the fate and future of the Trump presidency — and that of Nancy Pelosi’s House.

[..] Whatever may be said about the “deplorables,” they are not obtuse. They do not believe that people who call them racists, sexists, nativists and bigots are friends and merely colleagues of another party or persuasion. Trump’s defiance of subpoenas, however, will force the more moderate Democrats to join the militants in calling for hearings on impeachment in the House Judiciary Committee, which is where we are headed. The media are already salivating over the possible removal of a president they have come to loathe more than their great nemeses of the 20th century — Joe McCarthy and Richard Nixon. And the media will reward those who echo the call for impeachment. This week, two more Democrats running for president, including Sen. Kamala Harris, came aboard. Soon, the House will capitulate to the clamor and the stampede will be on.

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Sometimes I think the Democrats work for Trump. They hand him everything on a platter by getting lost in a fictional narrative.

Trump Attacks Democrat ‘Coup’ In 1st Post-Mueller Interview (RT)

Trump unloaded on Democrats, accusing them of an “attempted coup” in his first interview since the release of the Mueller report. Rehashing his usual rhetoric, Trump called the ‘Russiagate’ flop “bigger than Watergate.” On a victory lap since his election campaign was cleared of collusion with Moscow, Trump relied on a few tried and trusted tropes as he bashed the “13 angry Democrats” and “dirty cops” from the FBI for sparking the Russia investigation in an interview with Fox News’ Sean Hannity. The long-awaited publication of the redacted version of the Mueller report appears to have given Trump a huge boost of confidence as he sounded more assertive than ever, taking aim at his political opponents and doubling down on his innocence.


“The greatest scandal in the history of our country. Bigger than Watergate, because it means so much. This wasn’t stealing information from an office in the Watergate apartments. This was an attempted coup. It’s inconceivable. Like a third world country.” Trump lashed out at former rival Hillary Clinton for “destroying the lives” of his staffers, and blasted the FBI for going light on her during her private server investigation. But now, he said, the “tables have turned” and “it’s time to look at the other side,” calling the Russia investigation an “attempted overthrow of the United States government” and “a disgraceful thing.”

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Death penalty. For which UK cannot extradite. US is talking to Daniel Domscheit-Berg, who had a big fall-out with Assange. Letter sent to him is underneath the article.

US Is Investigating Assange Under Espionage Act – WikiLeaks (NP)

Right after the London police carried Julian Assange from the Ecuadorian embassy, the United States demanded his extradition. A March 2018 indictment charges him with conspiracy to commit computer intrusion, carrying a maximum penalty of five years in prison. But that is not the entire truth. Only one day after writing the indictment, the US Attorney’s Office admitted it was also investigating Assange for the „unauthorized receipt and dissemination of secret information“. That is what the Department of Justice wrote in a letter to former WikiLeaks spokesperson Daniel Domscheit-Berg, which we are publishing in full.

This accusation can be charged under the Espionage Act of 1917, a World War I era federal law intended to protect military secrets which has also been used to charge Chelsea Manning and Edward Snowden. Convictions under the Espionage Act can be punished by death. The death penalty is not only inhumane and archaic, it has legal consequences: The United Kingdom is not allowed to extradite Assange if he faces the death penalty. Charging Assange for publishing classified information is an attack on press freedom, „obtaining and disseminating secret information“ is the very task of journalism. If WikiLeaks is charged, every journalist and media outlet publishing secret information will be on trial. While the Obama administration debated this dangerous precedent, the Trump government shows no restraints.

[..] In Virginia, a federal grand jury is secretly investigating Assange and WikiLeaks. In December 2017, an FBI agent filed an affidavit to support charging Assange with a computer hacking conspiracy. Based on that, the grand jury issued an indictment against Assange on March 6, 2018. This document was unsealed and published immediately after his arrest in London. It is the official justification for the extradition request. But that is not the whole story. Just one day after writing the indictment, on March 7, 2018, the same US Attorney, Tracy Doherty-McCormick, wrote a letter to the lawyers of Daniel Domscheit-Berg in Germany.

Sporting the Department of Justice seal, the chief federal prosecutor requests a „voluntary questioning“ of Domscheit-Berg, explicitly „about possible violations of US federal criminal law regarding the unauthorized receipt and dissemination of classified information“ – a drastic accusation under the Espionage Act. The US Attorney goes on to explain some conditions for Domscheit-Berg. He must answer all questions fully and truthfully, the US may use all statements and information for criminal investigations and cross-examination. In return, whatever Domscheit-Berg testifies will not be used for prosecutions against him.

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Bit late perhaps?!

UN Special Rapporteur On Privacy Meets Assange In Prison: “I Will Act” (Maurizi)

He is the first person who has been able to visit Julian Assange at the Belmarsh prison besides Assange’s lawyers. In fact, although two weeks have passed since the arrest of the WikiLeaks’ founder, no other visitors are allowed apart from his lawyers. The UN Special Rapporteur on Privacy, Professor Joe Cannataci, just visited Julian Assange at the Belmarsh prison, a high security prison marked by the strictest prison regime in the UK, and in fact even visitors have to undergo to intensive controls, including police interviews, and of course meetings are monitored. Repubblica just interviewed the UN Rapporteur Cannataci.

Professor Cannataci, how did Assange seem to be doing? «My visit went well, Mr Assange was ready to answer my questions. We have already started gathering facts and asked questions of Assange’s legal team and of the Ecuadorian ambassador in London»

How is Julian Assange? We were all shocked by his appearance the day of his arrest… «I am not a physician, and so I am unable to make a medical assessment of him and of course I met him in prison, which is never a pleasant place to meet, however, it seemed to me he was in fairly good condition».

Were you able to talk to him with some privacy, or were you under surveillance? «No, my impression was that the UK authorities assured us a level of privacy intended for meetings with legal counsel. Usually in the UK prisons you have the following rules: for social meetings, like meetings with relatives, you don’t expect privacy, whereas meetings with legal counsels are usually not subjected to monitoring. These kinds of meetings are held in special places, usually 10-15 small rooms where detainees can meet their lawyers confidentially. I had asked for a confidential meeting and I am happy that the UK government agreed to provide us such a private meeting».

What are you investigating exactly, in relation to this meeting with Julian Assange? «At the end of March Mr Assange submitted an official complaint, which said that his right to privacy had been infringed during his time in the embassy of Ecuador. Together with my team, I made a preliminary assessment to see if his privacy has been infringed, therefore I am gathering the facts, these facts lead to a number of questions about behaviour which took place in the embassy. Today we are still in the preliminary stage. After my meeting with Mr Assange, I had a meeting with his legal team and then a meeting with the ambassador of Ecuador».

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I tell you: Macron simply doesn’t know he’s lost it all. He’s blind: “Did we take a wrong turn?’ I believe quite the opposite.” And that in the face of 25 weekends of protests against him.

Macron Responds To Gilets Jaunes Protests With €5 Billion Tax Cuts (G.)

Emmanuel Macron has vowed to make his style of politics more “humane”, but insisted he would press on with his project to liberalise the French economy and overhaul its welfare state despite five months of demonstrations by gilets jaunes (yellow vest) anti-government protesters. In his first press conference in two years as president, Macron promised €5bn worth of cuts to income tax for lower and average earners as well as pension rises for the poorest and vowed no more schools or hospitals would be closed during his presidency, as he responded to protests.

The centrist politician conceded that he needed to inject more “humanity” into his style of governance but insisted he would not make changes to his pro-business programme, despite the ongoing anti-government Saturday protests by gilets jaunes, which resulted in sporadic rioting and arson in Paris and other cities. Macron said he recognised the protesters’ “just demands” and “anger and impatience for change” and their feeling of not being taken into account by the “elites”, including the presidency, but public order must now be restored. He said although he respected the demonstrators who gathered at the start of the movement in November, he said it had “transformed progressively” and been marred by episodes of antisemitic violence, homophobia and rioting.

He said he stood by his project to liberalise the French economy, defending his controversial cuts to its wealth tax, which protestors sought to overturn. He said France was unique in Europe in not having dealt with its structural problem of mass unemployment so he would not go back on his planned “transformation” of the country. He said: “I asked myself: ‘Should we stop everything that was done over the past two years? Did we take a wrong turn?’ I believe quite the opposite.” [..] He promised to scrap the École nationale d’administration elite graduate training school for French civil servants and public officials. Saying the French style of governance needed to shift, Macron said he planned to make it easier for citizens to propose national referendums, and also would introduce 20% proportional representation into the lower house of parliament.

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Schengen, Dublin, they don’t serve Macron’s career, so out with them.

Macron: Smaller Schengen Zone Because EU Migration Policies ‘Do Not Work’ (RT)

The Schengen agreement and the current migrant-sharing mechanism are deeply flawed and need urgent fixing, French President Emmanuel Macron has said. Europe must “have borders” even if it means a smaller Schengen zone, he said. In the first major press conference since the Yellow Vest movement took off in November, Macron unveiled a range of policy measures to placate the protesters, including a proposed overhaul of the European-wide migration policy and the Schengen agreement. The embattled French leader argued that the agreement that guarantees free movement across the Schengen area, while “wonderful,” does not work anymore. The same, he said, applies to the Dublin Regulation that determines which EU member-state is responsible for accepting asylum seekers.


Under the current version of the agreement, which came into force in 2013 and applies to all EU member-states except Denmark, the main criteria for determining responsibility is the first point of entry. “The common borders, Schengen, Dublin agreements do not work anymore,” Macron said, adding that it is essential for Europe to make “profound” changes in its way of handling migrant arrivals. Macron called for reinforced border security, which might entail having a Schengen “with fewer states.” The Schengen area comprises 26 states, including 22 EU member-states and four non-EU countries: Norway, Iceland, Switzerland and Liechtenstein. It is named after the 1985 agreement that abolished internal borders allowing people within the zone to travel freely from one country to another.

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Trojan horse.

Irish Backstop Could Undermine EU Standards – Report (G.)

It is a dastardly trap, designed to lock freedom-loving Britain into the European Union’s protectionist customs union: that is the argument against the so-called backstop, cited by hardline Brexit advocates as the main reason why they have thrice voted down Theresa May’s deal with the European Union. But as the dust settles after months of chaos in Westminster, suspicions are growing on the other side of the Channel that the backstop could in fact be the very opposite: a brilliant deception device constructed by crack UK negotiators, which would allow a more reckless British prime minister to undermine the EU’s green and social standards while still keeping access to the European single market.

A new report, commissioned by the German Green party and seen by the Guardian, will exacerbate concerns in Berlin over the small print of the withdrawal agreement in its current form. The deal, agreed between the EU and the UK in November 2018 but voted down three times in the House of Commons, states that the whole of the UK would remain in a de facto customs union with the EU until a trade and security agreement has been reached that prevents the setting up of a hard border between the Republic of Ireland and Northern Ireland. nTo prevent Britain from diverting from EU standards on environmental or social protection after the backstop has come into effect, the customs territory would “include the corresponding level playing field commitments and appropriate enforcement mechanisms to ensure fair competition between the EU27 and the UK”.

The new German report, however, warns that the wording of the deal means the EU side will find it impossible to stop a more aggressive Britain led by a Boris Johnson or a Jacob Rees-Mogg from flouting such standards while still being able to export British products into the single market. “If the EU wants to have a level playing field, it must not just set up the goals but also assign a referee,” said the author of the report, EU law expert Dr René Repasi. “At the moment it has even given the UK licence to assign its own players with officiating the match.”

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On 5G, individual countries make the decisions.

Juncker Refuses To Reject Huawei ‘Just Because It’s Chinese’ (RT)

European Commission President Jean-Claude Juncker says he won’t bar Chinese firms like Huawei from doing business with Europe, as long as they respect market rules, despite continued US pressure to ban the company. “We are not rejecting someone because he is coming from faraway, because he is Chinese, the rules have to be respected,” Juncker said at a press conference with Japanese PM Shinzo Abe on Thursday. Asked about his response to the US call to “eliminate” Chinese telecoms equipment from Europe’s 5G buildout, Juncker was defiant. “The European Union and our internal market are open markets and all those respecting our rules governing this internal market are welcome,” he said.


Last month, Europe’s Parliament passed a resolution “expressing their deep concern” about alleged Chinese cybersecurity threats, but a subsequent statement from the European Commission regarding 5G cybersecurity did not include such language, instead merely urging member states to develop a “toolbox of mitigating measures” to combat cybersecurity risks to their growing 5G infrastructure. The US has leaned heavily on allies to keep Huawei and other Chinese telecoms out of their countries, claiming the company could act as a spy for the Chinese government. Washington has even threatened to withhold intelligence from Germany over their refusal to ban the Chinese firm, pressure China’s foreign minister has called “abnormal” and “immoral.”

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May invites Huawei. Will she stand up to Trump in other areas too?

Huawei Leak Highlights Collapse Of Discipline In May’s Cabinet (G.)

Leaks from deep within Theresa May’s bitterly divided administration have become widespread and common: as one despairing official remarked recently, “this government is a sieve”. But the revelation of the highly sensitive news that ministers have decided to set aside cybersecurity concerns and involve the Chinese firm Huawei in the creation of Britain’s 5G network is regarded by many as a leak too far. The decision was taken at the national security council, on which ministers sit alongside officials and members of the security services. The secrecy of its discussions has never before been breached. A full-scale inquiry is now expected to be launched, but a slew of other briefings and counter-briefings from private meetings in recent weeks and months has not just gone unpunished but become almost unremarkable.


There are several, allied reasons for this pervasive culture of briefing and counter-briefing, which means multiple competing accounts of cabinet meetings are available shortly after ministers walk out of Downing Street. One is simply the ready availability of instant electronic communication – a string of WhatsApp messages is a lot quicker and more straightforward than the old-fashioned gossip over lunch or in a Westminster bar (though that still happens too, of course). Another is the historic significance of the issues at stake and the lack of trust on both sides of the Brexit debate, which means all the key players want to ensure their point is heard even if they lost the argument in the room.

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The Fed will make up the difference. Can’t have stocks going down.

European Equities May Benefit As $1 Trillion In US Buybacks Vanish (ZH)

European equities may start to finally see some love, as they are now positioned to take advantage of one significant coming tailwind from the U.S., according to Bloomberg. Over the next 12 months, US stocks are going to lose a significant amount of support that they have received from buybacks, as the nearly $1 trillion buyback bonanza that has fueled stock purchases in the United States starts to come to an end, according to Sanford C. Bernstein strategists. This could be an area where European stocks, due to their low dependence on buybacks, could see help as a result. Bernstein strategists led by Inigo Fraser-Jenkins said: “This would remove one advantage of U.S. equities over Europe. As the buyback support is reduced it will make a stronger relative case for Europe.”


And the decision of the U.S. central bank to hold off on rate increases may have temporarily reduced concerns about debt hurting equities, but the topic is still on the table and credit spreads are expected to keep widening over the next year. Furthermore, the significance of share repurchases to the US rally has been pronounced, with $1 trillion in buybacks in just 2018 alone, far overshadowing the $100 billion in net inflows from active and passive funds. And even though European equities have rallied to the tune of more than $1.5 trillion since December’s lows, shorting these stocks remains a popular trade globally, according to Bank of America Corp.’s latest fund manager survey. And many traders are still on the sidelines, as Europe’s ugly politics and mixed economic data continues to weigh on sentiment.

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To find this out, we must travel back in time.

Universe Expands Faster Than Expected – NASA

The universe is expanding considerably faster than it should be, Nasa has confirmed. The space agency’s Hubble Space Telescope shows that it is growing about 9 per cent faster than had been expected, based on the trajectory it started with shortly after the Big Bang, according to astronomers. While such a discrepancy had already been suggested, the new measurements reduce the chance this is a mistake to just one in 100,000. Such a confirmation could require astronomers to find new physics theories to explain the universe‘s strange behaviour. “This mismatch has been growing and has now reached a point that is really impossible to dismiss as a fluke.

This is not what we expected,” says Adam Riess, Bloomberg Distinguished Professor of physics and astronomy at Johns Hopkins University, Nobel laureate and the project’s leader. The speed of the universe’s expansion, known as the Hubble constant, is a central part of physics and our understanding of the universe. But it has repeatedly been observed to behave unexpectedly – the more astronomers find out about it, the more wrong it appears – in ways that have forced scientists to wonder whether our assumptions about it had been wrong. The new study confirms that speculation, and requires further work to explain how exactly the universe is growing.

The research saw Professor Riess and his team analyse light from 70 stars in a galaxy near ours, known as the Large Magellanic Cloud, using a new method that allowed them to capture the stars quickly. The stars they observed are called Cepheid variables, and change brightness predictably, allowing them to be used to measure intergalactic distances. The new method allowed the researchers to measure many more of those stars far more quickly. Normally, Hubble can only look at one star each time it takes one of its 90-minute orbits around Earth, but the new method allowed it to see dozens in that same time.

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Nov 212018
 
 November 21, 2018  Posted by at 10:07 am Finance Tagged with: , , , , , , , , , , , , ,  7 Responses »


Jack Delano Lower Manhattan 1941

 

Senate Calls On Trump For Saudi Answers (BBC)
Saudi Arabia Tortured Female Right-to-Drive Activists – Amnesty (AP)
Trump Submits Answers To Robert Mueller Questions In Russia Probe (Ind.)
Trump Wanted To Order Justice Dept To Prosecute Clinton, Comey – NYT (R.)
Dow Plunges More Than 500 Points, Erases Gain For 2018 (CNBC)
Stunned Investors Observe The Market Carnage In Shock (ZH)
A Death Cross Is Forming In US Oil (MW)
Bitcoin Plunges As Much As 16% To Below $4,100, A New Low For The Year (CNBC)
Misguided Share Buybacks Are Hollowing Out Companies’ Balance Sheets (MW)
Bank of England Backs Theresa May’s Brexit Deal, Warns Of No-Deal Dangers (G.)
May’s Brussels Trip Only Start Of ‘Endless’ EU Trade Talks (G.)
UK To Be ‘Frozen Out’ Of 182 EU Decisions During Brexit Transition (Ind.)
Interpol Elects South Korean As Its President In Blow To Russia (G.)
Tax ‘Virgin Packaging’ To Tackle Plastics Crisis – Report (G.)
Dead Whale Washes Ashore In Indonesia With 6 Kilos Of Plastic In Stomach (AP)
Julian Assange Deserves A Medal of Freedom, Not A Secret Indictment (USA Today)

 

 

The indignation over Trump’s comments on Saudi Arabia is shifting into overdrive. Perhaps that’s needed to expose the hypocrisy inherent in them. It’s not Trump, it’s America that has condoned torture and murder by the House of Saud for decades. That started actively assisting the Saudi’s in Yemen under Obama. Trump refuses to be set up by the media and Democrats as the fall guy for $150 oil prices. He’s thinking: let Congress do it, now that it’s blue. If that’s immoral, he’s not alone.

Senate Calls On Trump For Saudi Answers (BBC)

US President Donald Trump has been asked to ascertain whether Saudi Crown Prince Mohammed bin Salman played a role in the murder of Jamal Khashoggi. Republican and Democratic leaders of the US Senate Foreign Relations Committee on Tuesday sent a letter demanding a second investigation. Mr Trump earlier defended US ties with Saudi Arabia despite international condemnation over the incident. Khashoggi was killed on 2 October inside the Saudi consulate in Istanbul. In a statement on Tuesday, Mr Trump acknowledged that the crown prince “could very well” have known about Khashoggi’s brutal murder, adding: “Maybe he did and maybe he didn’t!”

He later stated that the CIA had not made a “100%” determination on the killing. Following the president’s comments, Republican Senator Bob Corker and Democrat Bob Menendez issued a statement on behalf of the Senate Foreign Relations Committee. In it they called on Mr Trump to focus a second investigation specifically on the crown prince so as to “determine whether a foreign person is responsible for an extrajudicial killing, torture or other gross violation” of human rights. The request, issued under the Global Magnitsky Human Rights Accountability Act, requires a response within 120 days.

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OK, CNN, do your job.

Saudi Arabia Tortured Female Right-to-Drive Activists – Amnesty (AP)

Several activists imprisoned in Saudi Arabia since May, including women who campaigned for the right to drive, have been beaten and tortured during interrogation, Amnesty International has said. Saudi Arabia has detained at least 10 women and seven men on vague national security allegations related to their human rights work, the organisation said on Tuesday. Those detained include Loujain al-Hathloul, Eman al-Nafjan and Aziza al-Yousef, who had campaigned for the right to drive before the decades-long ban was lifted in June. Amnesty said that according to three testimonies it obtained, some of the activists were repeatedly given electric shocks and flogged, leaving some unable to walk or stand properly. In one instance, an activist was hung from the ceiling.

Another testimony said one of the detained women was subjected to sexual harassment by interrogators wearing face masks. The kingdom is at the centre of an international firestorm after the killing of Saudi journalist Jamal Khashoggi, who had written critically about Crown Prince Mohammed bin Salman’s crackdown on dissent, including the arrests of the women activists. Khashoggi was killed and then dismembered by Saudi agents in the kingdom’s consulate in Istanbul on 2 October. Lynn Maalouf, Amnesty’s Middle East research director, said: “Only a few weeks after the ruthless killing of Jamal Khashoggi, these shocking reports of torture, sexual harassment and other forms of ill-treatment, if verified, expose further outrageous human rights violations by the Saudi authorities.”

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What a waste of resources.

Trump Submits Answers To Robert Mueller Questions In Russia Probe (Ind.)

Donald Trump has submitted written answers to questions from Special Counsel Robert Mueller as part of the probe into Russian meddling in the 2016 election and possible collusion with the Trump campaign. “We answered every question they asked that was legitimately pre-election and focused on Russia,” Trump lawyer Rudy Giuliani said in an interview. “Nothing post-election. And we’ve told them we’re not going to do that.” Mr Giuliani said Trump did not plan to answer any questions from Mr Mueller on whether he tried to obstruct the investigation once he won office, such as by firing former FBI Director James Comey last year. “It is time to bring this inquiry to a conclusion,” the lawyer said in an earlier statement on the probe, which Mr Trump has repeatedly called a “witch hunt.”

Mr Trump signed the submission on Tuesday before he left Washington to spend the Thanksgiving holiday in Florida, a person familiar with the matter said. Mr Mueller was tasked to probe “any matters that arose or may arise directly from the investigation” into possible collusion between Mr Trump’s campaign and Russia during the 2016 election. [..] Mr Giuliani said in his statement the president had provided “unprecedented cooperation” with the probe over the past year and a half, noting that more than 30 White House-related witnesses had been questioned and 1.4 million pages of material turned over before Mr Trump responded to the pre-election questions in writing. He added that “much of what has been asked raised serious constitutional issues and was beyond the scope of a legitimate inquiry.”

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Not exactly news, is it? Of course there will be an investigation of Hillary, Comey and a whole circus around them. It would be a serious perverson of justice if there isn’t.

Trump Wanted To Order Justice Dept To Prosecute Clinton, Comey – NYT (R.)

U.S. President Donald Trump wanted to order the Justice Department to prosecute two political foes, his one-time presidential opponent Hillary Clinton and former FBI director James Comey, in the spring, but his White House counsel rebuffed him, the New York Times reported on Tuesday. Don McGahn, the White House counsel at the time, wrote a memo to the president outlining consequences for Trump if he did order these prosecutions. The outcomes ranged from the traditionally independent Justice Department refusing to comply, to congressional probes and voter outcry, the Times reported.

The New York Times also reported Trump’s lawyers privately asked the Justice Department to investigate Comey for mishandling sensitive government information and his role investigating Clinton’s use of a private email account and server, but law enforcement officials declined. It was not clear if Trump read the memo or pursued the prosecutions further, the New York Times said. It was also not clear what specific charges Trump wanted the Justice Department to pursue against Comey and Clinton, the Times reported. Trump has publicly railed against Clinton’s private email use during her tenure as U.S. Secretary of State, as well as her role in the Obama administration’s decision to allow a Russian company to buy a uranium mining firm.

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Time to start writing about finance again?!

Dow Plunges More Than 500 Points, Erases Gain For 2018 (CNBC)

The Dow Jones Industrial Average and S&P 500 fell sharply on Tuesday and turned negative for the year as a decline in Target shares pressured retailers, while some of the most popular tech shares dropped again. The 30-stock Dow dropped 551.80 points to 24,465.64 and the S&P 500 plunged 1.8 percent to close at 2,641.89. The Dow and S&P 500 were up 1.2 percent and 0.6 percent, respectively, for 2018 entering Tuesday. Meanwhile, the Nasdaq Composite also dropped 1.7 percent to 6,908.82 but managed to hang on to a slight gain for 2018. Tuesday’s declines come after the Dow dropped 395 points on Monday.

Stocks hit their lows of the day after Doubleline Capital founder Jeffrey Gundlach said stocks are still too expensive, adding there has not been a “panic low” yet. The Dow was down nearly 650 points at its session low, while the S&P 500 and Nasdaq had both dropped more than 2 percent. Target fell 10.5 percent after reporting weaker-than-expected earnings for the previous quarter. The company also posted lighter-than-forecast same-store sales, which is a key metric for retailers.

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Nah, they’re not investors.

Stunned Investors Observe The Market Carnage In Shock (ZH)

After another abysmal day, in which every single sector in the market closed in the red as stocks tumbled 2%, capping a dreadful two-month stretch since the S&P hit its all time highs exactly two months ago, which has seen both the S&P and the Dow turn red for the year with the Nasdaq just barely holding onto green, while oil crashed 6% slumping to a one year low, junk bonds matched a record streak of losses, the overall market just suffered one of its worst sessions in the past three years. But what is most remarkable is the following chart from Bloomberg which shows the year-to-date return of the best performing asset between US and global equities, corporate bonds, Treasuries, gold and real cash, and according to which 2018 is shaping up as what may be the worst year on record for cross-asset investors. Indeed, nothing at all has worked this year!

The inability of any single asset class to escape the dismal black hole supergravity of devastating losses in a brutal post-BTFD catharsis that has mutated into an equal-opportunity rout, crushing returns across all assets, has left investors reeling, shellshocked and paralyzed, and dreading what may come tomorrow let alone next year when both the US economy and corporate earnings are expected to see their supercharged recent growth rates come crashing back down to earth. “While there’s still no ‘panic in the streets,’ most traders are unconvinced that the selling will slow down anytime soon,” said Instinent’s head of trading Larry Weiss. “The flight to quality is now a flight to cash. It’s tough to convince anyone that now is the time to put money to work.”

[..] Hedge funds, who hoped that “buy the dip” would work one last time and who rushed into the traditional “safety” of tech stocks at the end of October, were whipsawed, and turned net sellers this month, with the group accounting for the most selling among major industries according to Goldman Sachs. Meanwhile, as if sensing the coming storm, Goldman writes that hedge fund net exposures steadily declined throughout 2018, including during 2Q and 3Q while the broad equity market rallied, leaving most investors in the cold. Net long exposure calculated based on 13-F filings and publicly-available short interest data registered 49% at the start of 4Q, a decline from 56% at the start of 2018, and one of the lowest in years.

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Potential volatility in oil is huge. Any little shrapnel of news, Saudi, Iran, Russia, shale, can force prices up 50%.

A Death Cross Is Forming In US Oil (MW)

Oil is already in a bear market, but now a fresh, negative pattern is crystallizing in the commodity that has absolutely bludgeoned bulls over the past two months. January West Texas Intermediate crude on its first full session as the front-month contract, was down a whopping 7.5%, to $52.91 a barrel on the New York Mercantile Exchange and that downtrend has propelled the U.S. benchmark to the brink of forming a death cross—a chart formation in an asset that many market technicians believe marks the point that a short-term decline morphs into a longer-term downtrend (see chart below).

Based on the continuous chart for the most-active oil contract, the 50-day moving average at $67.58 a barrel is less than 0.5% shy of falling beneath the long-term 200-day moving average at $67.25, according to FactSet data. At the current rate of decline, a death cross could occur within a week or two. Both the U.S. contract and the global benchmark Brent oil are in bear market, usually characterized as a decline of at least 20% from a recent peak. In fact, U.S. oil is down 31% from its Oct. 3 peak at $76.41 a barrel.

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Miners are ditching their equipment.

Bitcoin Plunges As Much As 16% To Below $4,100, A New Low For The Year (CNBC)

Bitcoin is still struggling to find a bottom this week. The digital currency dropped as much as 16 percent on Tuesday to its lowest level since Sept. 30, 2017, according to data from CoinMarketCap.com. Bitcoin fell as low as $4,076.59, bringing its total losses in seven days to roughly 30 percent. The cryptocurrency briefly pared those losses and was down about 7 percent in afternoon trading. As U.S. stock markets closed though, bitcoin was still down 12 percent over 24 hours, trading near $4,299, according to data from CoinDesk.

The price plunge came after weeks of rare stability for the world’s largest and best-known cryptocurrency. While global markets churned in October, bitcoin traded comfortably in the $6,400 range — a break from volatility earlier this year. Its total losses this year are now more than 65 percent. ts epic rise last year started right after Thanksgiving as it began to gain status as a household name. Since then, the cryptocurrency has fallen more than 40 percent. Bitcoin first topped $10,000 at the end of November and made it to nearly $20,000 a week before Christmas as retail investors poured in and two regulated exchanges prepared to launch futures markets.

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“With share repurchases in these companies being almost three times their actual investment, one must wonder how much actual U.S. economic growth they are expecting.”

Misguided Share Buybacks Are Hollowing Out Companies’ Balance Sheets (MW)

GE was one of Wall Street’s major share buyback operators between 2015 and 2017; it repurchased $40 billion of shares at prices between $20 and $32. The share price is now $8.60, so the company has liquidated between $23 billion and $29 billion of its shareholders’ money on this utterly futile activity alone. Since the highest net income recorded by the company during those years was $8.8 billion in 2016, with 2015 and 2017 recording a loss, it has managed to lose more on its share repurchases during those three years than it made in operations, by a substantial margin. Even more important, GE has now left itself with minus $48 billion in tangible net worth at Sept. 30, with actual genuine tangible debt of close to $100 billion.

As the new CEO Larry Culp told CNBC last Monday: “We have no higher priority right now than bringing those leverage levels down.” The following day, GE announced the sale of 15% of its oil services arm Baker Hughes, for a round $4 billion. Of course, since that sale values Baker Hughes at $26 billion, and GE paid $32 billion for 62% of Baker Hughes as recently as last year, which looks to me like a valuation for the whole company of $52 billion, GE shareholders appears to have lost half the value of their investment in Baker Hughes in about 18 months. [..] A recent Financial Times article outlined how the five tech companies with the most cash (Apple, Alphabet, Cisco, Microsoft and Oracle) have repurchased an astounding $115 billion of stock in the first three quarters of 2018.

By contrast, the total capital spending of the five companies was only $42.6 billion during the same period. The story then congratulated investors for having done so well out of President Trump’s tax reform, which lowered the corporate tax rate, thus encouraging investment in the United States. With share repurchases in these companies being almost three times their actual investment, one must wonder how much actual U.S. economic growth they are expecting. [..] These share repurchases are misguided in so many ways. First, Apple, Alphabet and Microsoft are valued by the stock market at close to $1 trillion, levels no company has ever reached before. If you ignore the current stock price, a company repurchasing its shares is simply giving away its cash and reducing its share count; it creates no value.

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Dangerously close to a political statement.

Bank of England Backs Theresa May’s Brexit Deal, Warns Of No-Deal Dangers (G.)

Mark Carney has thrown his weight behind Theresa May’s Brexit deal, warning that a no-deal scenario would damage the economy, trigger job losses, lead to lower pay for workers and cause inflation to rise. The governor of the Bank of England said May’s draft EU withdrawal agreement would “support economic outcomes” that would be positive for the British economy, primarily because it would give Britain more time to prepare for whatever final Brexit deal is agreed between Westminster and Brussels. “We welcome the transition arrangements in the withdrawal agreement. It’s at the heart [of the deal],” he told MPs on the Treasury select committee, a week after the prime minister agreed the terms of the deal with the EU.

“[The deal] improves our ability to discharge our function relative to having no deal,” he added. The timing of the governor’s comments could help to support May as she faces tough opposition from across the political divide, following cabinet resignations and Labour’s promise to vote it down in parliament. Carney warned that failure to agree a Brexit deal with Brussels before the March 2019 deadline would deliver a “large negative shock” to the UK economy that would have a persistent effect, lowering growth and causing job losses. He said such an outcome would deliver an “unprecedented supply shock” to the UK economy with few historical or international comparisons. “It wouldn’t be a happy situation to be in,” he said.

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These talks should have started two years ago. And even then.

May’s Brussels Trip Only Start Of ‘Endless’ EU Trade Talks (G.)

When Theresa May goes to Brussels for tea with Jean Claude Juncker on Wednesday afternoon, the two leaders will have in front of them a metaphorical Christmas tree of a political declaration. “And every member state has put a bauble on it”, an EU diplomat said. A seven-page document published last week, offering some heads of terms on the future relationship, is set to more than double to some 20 pages. Calls for more ambitious language around the trade elements have been made. Demands for a Spanish veto over any deal covering Gibraltar have been tabled. And an array of asks on so called “level playing field” commitments in any future trade deal are in the mix.

There is even talk of side-declarations to the political declaration emerging at the special Brexit summit next Sunday to allow member states to feel that they have drawn a line in the sand about the real trade talks to come. “It’s all getting very confusing,” admitted a second EU diplomat. Not to Sir Andrew Cahn, the former chief executive of the government’s UK Trade & Investment (UKTI) department, who was also an aide to Neil Kinnock when vice president of the European commission in the late 1990s. This is, he said, likely to be a mere amuse-bouche to the “continuous endless” talks that will open on the UK’s trading relationship with Brussels after 29 March 2019 as the UK finds its way around the EU’s orbit.

“It is a classic EU negotiation and the member states are performing their normal way,” Cahn said. “The French always come in late to toughen their negotiating position towards the end, and that’s when they can get some additional things. “The Spanish are copying with Gibraltar – although that is partly a function of domestic Spanish politics with Pedro Sánchez [the Spanish prime minister] being vulnerable at home.”

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What, she didn’t tell you?

UK To Be ‘Frozen Out’ Of 182 EU Decisions During Brexit Transition (Ind.)

The UK will be “frozen out” of EU decisions on no fewer than 182 new rules in the months after Brexit, a new analysis says, including over budget spending, road signs and drinking water. The full scale of fresh regulations in the pipeline – during Theresa May’s planned 21-month transition period – exposes the blunder of making Britain “a rule-taker, not a rule-maker”, it warns. During that transition, the UK will be bound by Brussels’ decisions but without any ministers in the EU council, or MEPs in the European parliament, to influence them. Now the campaign for a People’s Vote on the Brexit outcome has examined the decisions expected before 2020, which also include alcohol-taxing and rules for UK investment funds.

“This analysis sets out for the first time the full scale of the UK’s capitulation under this so-called deal,” said Chris Bryant, a Labour supporter of People’s Vote. “The prime minister’s deal would weaken our ability to have a say in over 180 crucial decisions that are going to be made in Europe while the UK is in transition – meaning we have to abide by their rulings but have no say and no ability to protect Britain’s interests. “This dodgy deal will leave Britain frozen out of decision making and forced to pay billions of Euros for the privilege.” The argument goes to the heart of criticism – by both pro and anti-Brexit MPs – that the UK will be a “vassal state” during the transition phase.

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Russophobia continues unabated.

Interpol Elects South Korean As Its President In Blow To Russia (G.)

South Korea’s Kim Jong-yang has been elected as Interpol’s next president, edging out a longtime veteran of Russia’s security services who was strongly opposed by the US, Britain and other European nations. The White House and its European partners had lobbied against Alexander Prokopchuk’s attempts to be named the next president of the international police body, saying his election would lead to further Russian abuses of Interpol’s “red notice” system to go after political opponents. Prokopchuk is a general in the Russian interior ministry and serves as an Interpol vice-president. Kim was chosen by Interpol’s 94-member states at a meeting of its annual congress in Dubai.

He will serve until 2020, completing the four-year mandate of his predecessor, Meng Hongwei, who went missing in his native China in September. Beijing later said Meng resigned after being charged with accepting bribes. Critics say that Prokopchuk oversaw a policy of systematically targeting critics and dissidents during his time in charge of the Russian office of Interpol. On Tuesday, the US secretary of state, Mike Pompeo, threw his weight behind Kim, who is the acting president of the global police body. “We encourage all nations and organisations that are part of Interpol and that respect the rule of law to choose a leader with integrity. We believe Mr Kim will be just that,” Pompeo told reporters.

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If only we move to recycled plastic! Geez, Louise, how about no plastic at all? You can cut at least 50% without changing anything much at all. More recycling is a fake message.

Tax ‘Virgin Packaging’ To Tackle Plastics Crisis – Report (G.)

The government should introduce a new tax on virgin packaging to revolutionise the recycling system in the UK and tackle the plastics crisis, according to a new report. The study, presented to MPs and industry figures at Westminster on Tuesday evening, calls on ministers to impose a fee on packaging materials and offer a rebate for those products that use more recycled material. The WWF and the Resource Association, which commissioned environment consultancy Eunomia to produce the report, said the proposals would transform the UK’s broken recycling system – and drastically reduce the demand for raw materials, including fossil fuels. Dr Lyndsey Dodd, head of marine policy at WWF UK, said: “Our oceans are choking on plastic, 90% of the world’s sea birds have fragments of plastic in their stomach.

Despite the public outcry, more products are being made with virgin, or new, plastic than with recycled plastic.” Last year the Guardian revealed that plastic production is set to increase by 40% over the next 10 years as fossil fuel companies look to use raw materials produced by fracking in the US. The new report follows an announcement in October that the government is launching a consultation on the introduction of a tax on all plastic packaging with a recycled content of less than 30%. [..] Earlier this year the Guardian reported the plastics recycling industry was under investigation for suspected widespread abuse and fraud within the export system. Since China banned the import of plastic waste, the UK has been chasing other markets in Malaysia, Vietnam and Thailand, but these countries are also imposing restrictions due to the stockpiling of waste.

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“..115 plastic cups, four plastic bottles, 25 plastic bags, two flip-flops, a nylon sack and more than 1,000 other assorted pieces of plastic..”

Dead Whale Washes Ashore In Indonesia With 6 Kilos Of Plastic In Stomach (AP)

A dead whale that washed ashore in eastern Indonesia had a large lump of plastic waste in its stomach, including drinking cups and flip-flops – causing concern among environmentalists and government officials in one of the world’s largest plastic polluting countries. Rescuers from Wakatobi National Park found the 9.5-metre sperm whale late on Monday in waters near Kapota Island, southeast of Sulawesi, after receiving a report from environmentalists that villagers had surrounded the dead creature and were beginning to butcher its rotting carcass, park chief Heri Santoso said. Researchers from wildlife conservation group WWF and the park’s conservation academy found about 5.9 kilograms of plastic waste in the animal’s stomach – including 115 plastic cups, four plastic bottles, 25 plastic bags, two flip-flops, a nylon sack and more than 1,000 other assorted pieces of plastic.

“Although we have not been able to deduce the cause of death, the facts that we see are truly awful,” said Dwi Suprapti, a marine species conservation coordinator at WWF Indonesia. She said it was not possible to determine if the plastic had caused the whale’s death because of the animal’s advanced state of decay. Indonesia, an archipelago of 260 million people, is the world’s second-largest plastic polluter after China, according to a study published in the journal Science in January. It produces 3.2 million tonnes of mismanaged plastic waste a year, of which 1.29 million tonnes ends up in the ocean, the study said.

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Can we say the MSM wakes up with this USA Today piece?

Julian Assange Deserves A Medal of Freedom, Not A Secret Indictment (USA Today)

On the same day the Assange indictment scored headlines, Trump awarded seven Presidential Medals of Freedom. No controversy greeted posthumous awards to Babe Ruth and Elvis Presley — unlike the ruckus regarding Miriam Adelson, wife of Republican super-donor Sheldon Adelson. Public Citizen, a liberal nonprofit, howled that the Adelson award “is just the latest sign of [Trump’s] ability to corrupt and corrode all aspects of the government.” New York Times columnist Paul Krugman caterwauled that it was “ludicrous” and “and an insult to people who received the medal for genuine service.” In reality, Presidential Medals of Freedom have routinely been exploited to buttress the political establishment, with bevies of awards for political operators, members of Congress, and pliable foreign leaders.

President Lyndon Johnson distributed a bushel of Medals of Freedom to his Vietnam War architects and enablers, perhaps as consolation prizes for losing the war. (The medal awarded to Defense Secretary Robert McNamara, whose lies about the war making progress cost thousands of Americans and Vietnamese their lives, fetched $40,625 at an auction a few years ago.) President George W. Bush conferred Medals of Freedom on his Iraq war team, including CIA chief George “Slam Dunk” Tenet, Iraq viceroy Paul Bremer, and ambassador Ryan Crocker, whom Bush called “America’s Lawrence of Arabia.”

Some of the biggest fabulists of the modern era — including Henry Kissinger and Dick Cheney — also pocketed the award.The controversies over Assange and Adelson provide a serendipitous opportunity to update the freedom awards. Because few things are more perilous to democracy than permitting politicians to coverup crimes, there should be a new Medal of Freedom category commending individuals who have done the most to expose official lies. This particular award could be differentiated by including a little steam whistle atop the medal — vivifying how leaks can prevent a political system from overheating or exploding.

Assange would deserve such a medal — as would Thomas Drake and Edward Snowden (who revealed NSA’s abuses), John Kiriakou (who revealed CIA torture), and Daniel Ellsberg (who leaked the Pentagon Papers). Admittedly, there may be no way to stop presidents from giving steam whistle freedom awards to political donors’ wives. Organizations like Wikileaks are among the best hopes for rescuing democracy from Leviathan. Unless we presume politicians have a divine right to deceive the governed, America should honor individuals who expose federal crimes.

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Nov 042018
 
 November 4, 2018  Posted by at 10:53 am Finance Tagged with: , , , , , , , , , ,  5 Responses »


Francisco Goya The straw mannequin 1791-92

 

Where the Heck are Share Buybacks in This Rotten Market? (WS)
Corporate Buybacks Return, Supporting Market (WSJ)
US Mortgage Rates Rise Sharply to Fresh 7-Year Highs (MND)
Theresa May’s ‘Secret’ Brexit Deal (Ind.)
Brexit Puts Good Friday Agreement At Risk – Irish PM (Ind.)
UK Business Leaders Call For Second Brexit Vote (BBC)
Brexit Is Just A Sideshow For An EU Beset By Problems On All Sides (G.)
“Posh Ghost Towers”: Gloom Spreads Over London Housing Market (DQ)
33 Trillion More Reasons Why New York Times Gets Russiagate Wrong (CN)
Break-in Attempted at Assange’s Residence in Ecuador Embassy (CN)

 

 

No blackout, no market. Only deceit.

Where the Heck are Share Buybacks in This Rotten Market? (WS)

Shares fell today in part because Apple, the giant in the indices, gave iffy guidance for the holidays Thursday evening; and with product sales not going anywhere, and only price increases boosting revenues, it said it would no longer disclose unit sales. This combo worked like a charm, and shares dropped 6.6%. So where are the corporate share buybacks when you need them? This is when companies buy back their own shares in order to prop up their price and thereby the overall market. Where is this panacea that was considered securities fraud until 1982? Throughout October, Wall Street gurus promised that shares would rise as soon as companies emerged from their “blackout” period that prevents them from buying back their shares. Alas, there is no federally mandated “blackout” period.

[..] Let’s take a gander at International Business Machines [IBM], one of the biggest share buyback queens. Since 2000, it blew $146 billion on share buybacks. The chart below shows the cumulative amounts since 2013 that IBM wasted on share buybacks: $43 billion (data via YCharts):

Wall Street gurus keep hyping that share buybacks “unlock shareholder value,” or “return cash to shareholders,” or some such thing. But here’s what IBM’s share buybacks did to shareholder value, as measured by the stock price:

[..] IBM has been buying back the shares it issued its own executives as part of their stock compensation plans, and the shares it issued to buy other companies, including minuscule privately-owned startups for billions of dollars. Buybacks covered up the dilutive effects from those actions. IBM could have spent this money on research and invented something cool. But that would have been too hard. Far better to farm out much of the work to cheap countries like India, shut down US operations, waste money on share buybacks in a vain effort to manipulate up its shares, and instead watch them go to heck.

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There are no functioning markets without price discovery, so what exactly is supported here? Deceit?

Corporate Buybacks Return, Supporting Market (WSJ)

U.S. companies are ramping up share buybacks again, offering potential support to volatile markets. Share buybacks fell ahead of earnings season, when regulations bar such repurchases. As that so-called blackout period ends, there has been a resurgence, with companies making the most of last month’s selloff. That has eased analysts’ concerns that the year’s buyback boom is over. Net buybacks in the month totaled just $12 billion by Oct. 19, but jumped to $39 billion by Oct. 29, according to estimates from JPMorgan Chase & Co. That is more than the $30 billion recorded in September and just under the $48 billion recorded in August.

The bank’s estimates are based on the average drop in share count across the S&P 500, FTSE Russell1000, Datastream U.S. and MSCI U.S. indexes. Some analysts hope a resurgence in buybacks could help support share prices during a period of geopolitical and economic uncertainty. Others are skeptical that companies can continue purchasing their own shares at the current pace, particularly as the stream of repatriated cash that helped drive the year’s buybacks slows down. “It is possible that some companies saw the equity correction as an opportunity to buy back their stock” in October, said Nikolaos Panigirtzoglou, global-markets strategist at JPMorgan. “But this raises the hurdle for November.”

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Great jobs numbers equals higher rates.

US Mortgage Rates Rise Sharply to Fresh 7-Year Highs (MND)

Mortgage rates had a bad week and an especially bad day following a much stronger-than-expected jobs report. The Employment Situation (the most important piece of labor market data and arguably the most important economic report as far as interest rates are concerned) showed the highest pace of wage growth since before the recession and a surprisingly robust addition of new jobs in October. Strong jobs data is the nemesis of low interest rates and today was no exception. Mortgage rates were already operating fairly close to long-term highs, but today’s move easily took them to new highs. The average lender is now quoting conventional 30yr fixed rates of 5% for relatively ideal scenarios.

Those without a big down payment or without perfect credit/income can expect to see even higher rates. Most lenders ended up recalling the morning’s initial rate sheets and reissuing higher rates at least once today. There’s really no silver lining apart from the fact that the higher rates go, and the quicker they get there, the closer we get to the point that the economy slows down as a result. When that happens, rates will begin to fall before just about anything else. Unfortunately, the expected time frame for such things is incredibly wide (not the sort of thing you hope for if you need to buy/refi). And yes… it’s also unfortunate that our one source of solace at the moment involves an economic downturn, but if you want low interest rates, that tends to come with the territory.

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The wool over your eyes.

Theresa May’s ‘Secret’ Brexit Deal (Ind.)

Theresa May has reportedly secured concessions from Brussels to keep the whole of the UK in a customs union in the wake of Britain’s withdrawal from the European Union. The agreement reached would prevent the need for Northern Ireland to be treated differently from the rest of the UK, a main stumbling block during Brexit negotiations. The “secret” deal would avoid the need for an Irish backstop and will be written into the legally-binding deal, according to The Sunday Times. However, Downing Street has poured cold water on the report, calling it speculation. The EU has reportedly suggested a backstop post-Brexit customs arrangement covering all of the UK could give mainland Britain some scope to set trade rules.

Preparations for a final deal were far more advanced than previously disclosed, the report said, and would lead to a document of 50 pages or more being published. The agreement would include an “exit clause” designed to convince Brexit-supporting MPs that remaining in the customs union was only temporary, The Sunday Times said. Ms May’s cabinet would meet on Tuesday to discuss her plan, and she hoped there would be enough progress by Friday for the EU to announce a special summit, the newspaper reported. The prime minister’s office has described the report as speculation, but claimed the majority of a deal on Britain’s exit from the bloc in March 2019 had been agreed.

“This is all speculation,” a spokesman for Ms May said. “The prime minister has been clear that we are making good progress on the future relationship and 95 percent of the withdrawal agreement is now settled and negotiations are ongoing.”

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Peace in Ireland is the no.1 concern.

Brexit Puts Good Friday Agreement At Risk – Irish PM (Ind.)

Brexit is “fraying” the relationship between the UK and Ireland and putting peace in Northern Ireland at risk, Irish premier Leo Varadkar has said. The Taoiseach said the Good Friday Agreement was being “undermined” by fractious relations between the two countries over how the Northern Irish border should be managed once Britain leaves the EU. It comes just a day after Theresa May’s de facto deputy, David Lidington, travelled to Dublin to hold talks with his Irish counterpart, Simon Coveney, in a bid to improve relations between the two governments.

But speaking within hours of the visit, Mr Varadkar described the relationship between the two countries as “fraying”. He told Irish broadcaster RTE: “Brexit has undermined the Good Friday Agreement and is fraying the relationship between Britain and Ireland. “Anything that pulls the communities apart in Northern Ireland undermines the Good Friday Agreement, and anything that pulls Britain and Ireland apart undermines that relationship.” The warning comes despite Mr Coveney having claimed a deal between the UK and the EU was “very close”.

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Many sides will call for this.

UK Business Leaders Call For Second Brexit Vote (BBC)

More than 70 business leaders have signed a letter to the Sunday Times calling for a public vote on the UK’s Brexit deal. The chief executive of Waterstones and former Sainsbury’s boss Justin King are among those saying a “destructive hard Brexit” will damage the UK economy. A group called Business for a People’s Vote will launch on Thursday. A Downing Street source told the BBC the Prime Minister was clear that there would be no new referendum. The letter was coordinated by The People’s Vote campaign, which wants a ballot on whether to accept the terms of the UK’s departure from the EU. Richard Reed, co-founder of Innocent Drinks, Lord Myners, the former chairman of Marks and Spencer and Martha Lane Fox, the founder of Lastminute.com, also signed the letter.

It reads: “The business community was promised that, if the country voted to leave, there would continue to be frictionless trade with the EU and the certainty about future relations that we need to invest for the long term. “Despite the Prime Minister’s best efforts, the proposals being discussed by the government and the European Commission fall far short of this. “The uncertainty over the past two years has already led to a slump in investment.” The letter concludes: “We are now facing either a blindfold or a destructive hard Brexit. “Given that neither was on the ballot in 2016, we believe the ultimate choice should be handed back to the public with a People’s Vote.”

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The only true Brezit reality. Merkel’s departure is a far bigger issue for Europe.

Brexit Is Just A Sideshow For An EU Beset By Problems On All Sides (G.)

There is a weariness to the coterie of diplomats and officials based in Brussels intimately involved in the negotiations over the United Kingdom’s withdrawal from the European union. Privately they describe it as “Brexit fatigue”, the result of second-guessing a chaotic situation in Westminster for two years, and working through the summer in response to the demand from the Brexit secretary, Dominic Raab, for continuous negotiations. These officials from the 27 other EU member states were picked as the brightest and the best for the existential crisis of the time, but the hard truth for these ambitious men and women is that the crisis in question is no longer Brexit.

“You go to the capitals, you can see that, because no one talks about it any more,” said Fabian Zuleeg, chief executive of the leading EU thinktank, the European Policy Centre. Speaking to his parliament on his return to Madrid from the recent leaders’ summit in Brussels, Spain’s prime minister, Pedro Sánchez, put it succinctly: “The British spend 24 hours a day thinking about Brexit and the Europeans think about it for four minutes every trimester.” While the UK’s chaotic withdrawal has become a dreary process to be managed, the EU is being dealt hammer blows from elsewhere – from crises that really could make or break the bloc, along with many diplomatic careers.

Foremost on the list of problem zones right now is Italy. “Nothing and nobody, no big or small letter will make us backtrack,” the country’s deputy prime minister, Matteo Salvini, and leader of the far-right League, told his followers in a Facebook video made in his office in Rome on Friday. “Italy will no longer be a slave and will no longer kneel down.”

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Let’s build a few highways to nowhere too.

“Posh Ghost Towers”: Gloom Spreads Over London Housing Market (DQ)

After decades of mind-boggling growth, home prices in metropolitan London, according to official numbers, started to fall this year, if barely. Between March and September, they slid 2.3%. But it’s a lot worse in the most expensive parts of the city: Prices in central London have already dropped 15% since 2014, according to James Hyman, head of the residential agency division at Cluttons. He expects another 7% drop over the next year and a half. And the total volume of transactions has fallen by a fifth, according to Residential Analysts. In 2014, a change in the stamp duty made buying high-end homes in the UK more costly. In London, the city that hosts the highest number of super-rich individuals per capita in the world, high-end homes are the staple product.

And it’s getting harder and harder to offload them: The Guardian reported that over half of the 1,900 ultra-luxury apartments built in London last year failed to sell. This freeze at the high end is fueling concerns that the city would be left with dozens of “posh ghost towers.” The newest phantom skyscraper is London’s Centre Point Tower, a 33-story office building from the 1960s that was recently converted into multi-million-pound luxury apartments. But demand is anemic and the developer behind the project, Almacantar, has all but given up trying to sell the flats after receiving too many “detached from reality” lowball offers. Until conditions improve, half of the tower’s 82 flats will lie empty.

Yet even as demand for upscale real estate in London fades, there’s little sign of any slow down in the construction of luxury apartments, meaning there will be an even greater glut of upscale real estate in the near future. That’s likely to further exacerbate the fall in prices. It’s the latest in a long line of reality checks for London. Clearly, those at the thin upper crust of the global wealth and income scale — just about the only people left who can afford to buy residential property in London these days — either have less money to spend on over-priced high-end London real estate or are splashing it elsewhere, including in other parts of the UK.

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Russiagate is a non-story kept alive by papers and TV stations.

33 Trillion More Reasons Why New York Times Gets Russiagate Wrong (CN)

Even more damning evidence has come to light undermining The New York Times‘ assertion in September that Russia used social media to steal the 2016 election for Donald Trump. The Times‘ claim last month that Russian Facebook posts reached nearly as many Americans as actually voted in the 2016 election exaggerated the significance of those numbers by a factor of hundreds of millions, as revealed by further evidence from Facebook’s own Congressional testimony. Further research into an earlier Consortium News article shows that a relatively paltry 80,000 posts from the private Russian company Internet Research Agency (IRA) were engulfed in literally trillions of posts on Facebook over a two-year period before and after the 2016 vote.

That was supposed to have thrown the election, according to the paper of record. In its 10,000-word article on Sept. 20, the Times reported that 126 million out of 137 million American voters were exposed to social media posts on Facebook from IRA that somehow had a hand in delivering Trump the presidency. The newspaper said: “Even by the vertiginous standards of social media, the reach of their effort was impressive: 2,700 fake Facebook accounts, 80,000 posts, many of them elaborate images with catchy slogans, and an eventual audience of 126 million Americans on Facebook alone.” The paper argued that 126 million was “not far short of the 137 million people who would vote in the 2016 presidential election.”

But Consortium News, on Oct. 10, debunked that story, pointing out that reporters Scott Shane and Mark Mazzetti failed to report several significant caveats and disclaimers from Facebook officers themselves, whose statements make the Times’ claim that Russian election propaganda “reached” 126 million Americans an exercise in misinformation. [..] only an estimated 29 million FB users may have gotten at least one story in their feed in two years. The 126 million figure is based only on an assumption that they shared it with others, according to Stretch. Facebook didn’t even claim most of those 80,000 IRA posts were election–related. It offered no data on what proportion of the feeds to those 29 million people were.

In addition, Facebook’s Vice President for News Feed, Adam Moseri, acknowledged in 2016 that FB subscribers actually read only about 10 percent of the stories Facebook puts in their News Feed every day. The means that very few of the IRA stories that actually make it into a subscriber’s news feed on any given day are actually read.

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Completely insane. Next time it might be police, military, mercenaries. Julian’s supporters need to stand watch 24/7 now.

Break-in Attempted at Assange’s Residence in Ecuador Embassy (CN)

An attempted break-in at Julian Assange’s residence inside the Ecuadorian Embassy in London on Oct. 29, and the absence of a security detail, have increased fears about the safety of the WikiLeak’s publisher. Lawyers for Assange have confirmed to activist and journalist Suzie Dawson that Assange was awoken in the early morning hours by the break-in attempt. They confirmed to Dawson that the attempt was to enter a front window of the embassy. A booby-trap Assange had set up woke him, the lawyers said. Scaffolding has appeared against the embassy building in the Knightsbridge section in London which “obscures the embassy’s security cameras,” the lawyers said.


Scaffolding near balcony where Assange has appeared. (Sean O’Brien)

On the scaffolding electronic devices, presumably to conduct surveillance, can be seen, just feet from the embassy windows. Later on the day of the break-in, Sean O’Brien, a lecturer at Yale University Law School and a cyber-security expert, was able to enter the embassy through the front door, which was left open. Inside he found no security present. Someone from the embassy emerged to tell him to send an email to set up an appointment with Assange. After emailing the embassy, personnel inside refused to check whether it had been received or not. O’Brien then noticed more scaffolding being erected and observed the devices, which he photographed. Though a cyber-security expert, O’Brien said he could not identify what the devices are.


One of the apparent surveillance devices. (Sean O’Brien.)

“I’ve never seen devices quite like this, and I take photos of surveillance equipment often,” O’Brien said. “There were curious plastic tubes with yellow-orange caps, zip-tied to the front. I have no idea what these are but they seem to have equipment inside them.” The devices are pointed towards the embassy, where all the blinds were open, and not the street, he said. “The surveillance devices in the photos reveals no manufacturer branding, serial numbers or visible device information,” Dawson said. “The combination of the obscuring of the street-facing surveillance cameras and the installation of surveillance equipment pointed into instead of away from the Embassy, is alarming.”

[..] On Thursday the government suddenly barred all access to Assange visitors, including his legal team until next Monday, raising fears that no witnesses could be present should there be an attempt to abduct Assange over the weekend.

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Oct 222018
 
 October 22, 2018  Posted by at 8:56 am Finance Tagged with: , , , , , , , , , , ,  9 Responses »


Vincent van Gogh Autumn landscape with four trees 1885

 

5 Companies That Spent Big On Stock Buybacks As Pension Funding Lagged (MW)
How Everything Has Changed Since Trump Became President (CNBC)
Trump Right To Blame Fed for Next Market Crash – Dave Janda (USAW)
Democrats Slide In Battle For Senate (Hill)
Erdogan Says Will Reveal Details Of Khashoggi Case Tuesday (DS)
No Arms For Riyadh While Khashoggi Questions Remain – Merkel (R.)
Germany Urges Other EU States To Also Stop Arms Exports To Saudi Arabia
Merkel to Resign: ‘Wants To Replace Juncker As European Commission Chief’ (VoE)
Italian Bank Fears Expected To Grow After Debt Downgrade (G.)
Brexit Deal Is 95% Settled, Theresa May To Tell Commons (G.)
Sydney Property Slowdown Bites As Auction Clearance Rates Tumble (G.)

 

 

Madness. Should never be allowed. Why do you have a pension fund when you are free not to contribute to it?

5 Companies That Spent Big On Stock Buybacks As Pension Funding Lagged (MW)

Even as corporate executives engage in a spree of share buybacks to spur stock prices higher, many have eschewed adding to their employee’s pension pots. That’s according to Danielle DiMartino Booth of Quill Intelligence who picked out a few of the more standout firms whose “enthusiasm for funding pensions was subpar compared to buybacks.” She lined up five of the worst offenders to illustrate that in the pursuit of higher stock prices and shareholder value corporations often left other pressing needs to languish. They include the likes of Boeing, General Electric and Lockheed Martin. In the chart below, the amount of buybacks and pension contributions between 2009 and 2017 for the five companies is compared alongside their respective pension funding ratio, which represents how much the company can deliver on its future pension obligations as a percentage of the plan’s total assets.

One case Booth highlights in the chart is American Airlines. Though, the airline carried around $18.3 billion of pension obligations, its pension system was only 62% funded even after a nine-year bull market. Market participants have cited the prevalence of share repurchases to the stock market’s searing rise in the past few years, even as equities retreated from their record highs in October. A report by Goldman Sachs said share buybacks could hit a record $1 trillion this year, nearly doubling last year’s haul.

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For now.

How Everything Has Changed Since Trump Became President (CNBC)

Since Donald Trump won the presidency, he has presided over both one the most tumultuous political times in recent memory, as well as the best economy the country has seen since well before the financial crisis. Consumer and small business confidence is up — but so are both the national debt and budget deficit. The chart below, using mostly data compiled by Goldman Sachs, quantifies just how much things changed from the days just before the election in November 2016 through September 2018. Of course, the stock market has weakened in October, which has been its historically most volatile month. The chart doesn’t include GDP, which has averaged 2.72 percent since Trump took over, compared to the 1.6 percent gain in 2016. But the numbers provide a solid overview of how conditions have evolved during the 45th president’s time in office.

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No, it’s the low interest rates that will cause a market crash. It’s the manipulation.

Trump Right To Blame Fed for Next Market Crash – Dave Janda (USAW)

Radio host Dr. Dave Janda says everybody in Washington knows the next big crash is right around the corner. It’s been 10 years since the Fed reflated the last meltdown, and Dr. Janda says President Trump is already blaming the Federal Reserve for killing the economy that his policies revived. Dr. Janda explains, “President Trump has been pointing the finger at the Fed. He’s been pointing the finger at the Fed, and that is exactly where he should be pointing. The globalist syndicate’s tentacle is the central banking system, and, in particular, in the United States, the Federal Reserve. The Federal Reserve is one of the entities that is directly responsible for this financial mess our country is currently in.

You would never see Obama or the Bushes, or Bill Clinton, point at the Fed and say what Trump has said. Trump said, ‘I think the Fed has gone crazy. I think the Fed is making a mistake. They’re so tight with interest rates. I think the Fed has gone crazy.’ Just the other day, Trump said, ‘My biggest threat is the Fed. . . . The Fed is raising rates too fast, and it’s too independent.’ Now, wait a minute, listen to that. It’s too independent. When was the last time a president of the United States said the Fed was too independent? . . . . Banking groups, that is their priority. So, when the President says the Fed is raising rates too fast, and it’s my biggest enemy, and too independent, what he is saying is they are looking out for their own interests.

They are not looking out for the interests of our country or for you or for me or for any American, and he’s right. I don’t know of any other president that has had the guts to say this.” So, what happens next? Dr. Janda says, “Trump knew this thing was rigged to blow, the economy, the financial system, and when the right time came, he would start pointing the finger at the globalists, the Fed. I believe that’s where we are right now.”

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As predicted.

Democrats Slide In Battle For Senate (Hill)

The battle for control of the Senate is looking worse and worse for Democrats, who just a month ago saw a path to the majority but now increasingly look like they could lose more seats and have a smaller minority next year. Republicans have seen a bump in the polls in several key races since Labor Day. They believe momentum has flipped to their party since the fight over Supreme Court Justice Brett Kavanaugh polarized the electorate, hurting Democrats running for reelection in states where President Trump is popular. Two states where Democrats had hopes of pulling major upsets — Texas and Tennessee — have moved in favor of Republicans.

Races in Nevada and Arizona, two other states where Democrats had hoped to make gains, remain tight, but Republicans feel more confident about their candidates. Meanwhile, the tide has moved against Democratic candidates in a couple of states that Trump won by double digits in 2016. In North Dakota, Democratic Sen. Heidi Heitkamp has fallen behind by double digits. And in Montana, Sen. Jon Tester (D), who seemed poised for victory a month ago, has seen his race tighten amid attacks by the president. There is some good news for Democrats in the polls. Sen. Joe Manchin (D-W.Va.), the only Democrat to back Kavanaugh’s confirmation, has maintained a healthy average lead of 9 points in the polls, despite running in a state that Trump won by a whopping 42 points in 2016.

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Do the US and Riyadh know what he knows?

Erdogan Says Will Reveal Details Of Khashoggi Case Tuesday (DS)

President Recep Tayyip Erdogan said Sunday that he will make important statements on Tuesday at the ruling Justice and Development Party’s (AK Party) parliamentary group meeting regarding the investigation on journalist Jamal Khashoggi’s fate, who was admittedly killed by Saudi authorities. “We seek justice and this will be revealed in all its naked truth, not through some ordinary steps but in all its naked truth. This is not an ordinary case. I will make statements on Tuesday at the AK Party parliamentary group meeting. The incident will be revealed entirely,” said Erdogan at a ceremony in Istanbul.

His comments are likely to heighten speculation that Turkey may be about to reveal some of the results of its investigations into the killing of the dissident journalist [..] Turkish newspapers have released information detailing a 15-member team that purportedly arrived in Istanbul to confront Khashoggi at the consulate. “Why did these 15 people come here (to Istanbul), why were 18 people arrested (in Saudi Arabia)? These need to be explained in detail,” Erdogan said. Saudi Arabia’s public prosecutor on Saturday said 18 people were arrested in connection with the incident. Turkish sources say the authorities have an audio recording purportedly documenting Khashoggi’s murder inside the consulate.

“If the incident transpired as it has been told across the world, there is no way Saudi officials can cover this up by saying a team from Saudi Arabia came and two or three men among them murdered him,” Numan Kurtulmus, deputy chairman of the AK Party, told broadcaster CNN Türk in an interview. “A crime committed in a consulate cannot be carried out without the knowledge of the senior state officials of that country. If this crime was really carried out as has been said, if the evidence really leads to that conclusion, the situation will be dire and this must have very serious legal consequences.”

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Not that Germany sells all that much.

No Arms For Riyadh While Khashoggi Questions Remain – Merkel (R.)

Germany will not export arms to Saudi Arabia while the current uncertainty over the fate of journalist Jamal Khashoggi persists, Chancellor Angela Merkel said on Sunday. Campaigning for her party in a regional election, Merkel repeated to a news conference her earlier condemnation of Khashoggi’s killing, which Saudi Arabia admitted had taken place inside its consulate in Istanbul. “First, we condemn this act in the strongest terms,” she said. “Second, there is an urgent need to clarify what happened – we are far from this having been cleared up and those responsible held to account … As far as arms exports are concerned, those can’t take place in the current circumstances.”

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But look at the UK. Will they stop arms exports?

Germany Urges Other EU States To Also Stop Arms Exports To Saudi Arabia

Germany wants other European Union member states to follow its example in stopping arms exports to Saudi Arabia as long as uncertainty remains over the killing of journalist Jamal Khashoggi, Economy Minister Peter Altmaier said on Monday. Riyadh has given multiple and conflicting accounts on what led to Khashoggi’s death on Oct. 2 at its consulate in Istanbul. On Sunday, Foreign Minister Adel al-Jubeir called the killing a “huge and grave mistake” but sought to shield Saudi Arabia’s powerful crown prince. Chancellor Angela Merkel said on Sunday that Germany would stop arms exports to Saudi Arabia as long as the uncertainty around Khashoggi’s death persisted.

Altmaier, a close ally of Merkel, said Riyadh’s explanations on the case so far had not been satisfactory. “The government is in agreement that we will not approve further arms exports for the moment because we want to know what happened,” Altmaier told ZDF broadcaster. So far this year the German government had approved weapons exports worth more than 400 million euros ($462 million) to Saudi Arabia, making it the second-biggest recipient of German arms after Algeria. [..] Altmaier said other EU states should stop arms exports to Saudi Arabia in order to increase pressure on Riyadh over the Khashoggi case. “For me it would be important that we come to a joint European stance,” Altmaier said.

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A popular job.

Merkel to Resign: ‘Wants To Replace Juncker As European Commission Chief’ (VoE)

Bavaria’s state election last weekend proved painful for German Chancellor Angela Merkel. In yet another election next week, Ms. Merkel is expected to see further discomfiture. The German leader could resign from her post at the December CDU party conference in December in order to take another senior European position. “Rumours are swirling in Brussels that Merkel could run for the European Commission next year”, Die Welt’s Stefanie Bolzen tells the BBC. As Jean-Claude Juncker gets ready to retire as European Commission President next year, there have been suggestions that French President Emanuel Macron is considering a run, Italy’s fierce and most popular politician in Italy’s history Deputy Prime Minister Matteo Salvini has also been asked to run, and now Germany’s Chancellor Angela Merkel could potentially be throwing her hat into the ring.

May the best Italian win!

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What happens when the vigilantes decide it’s time?

Italian Bank Fears Expected To Grow After Debt Downgrade (G.)

Fears that Italy’s banks face a black hole in their finances are expected to grow this week following a debt downgrade that could send the value of bank reserves plummeting. Despite efforts to shore up Italian banks’ reserves, a downgrade by the ratings agency Moody’s on Friday following a row between Rome and Brussels over the government’s budget could send them into freefall again. A senior government official added to the tension on Sunday by issuing a warning that Italy should not ignore the deteriorating financial situation and its effect on the country’s banks, including possible capital needs. Giancarlo Giorgetti said in a newspaper interview that a fire sale of Italian government bonds over the last five months had put huge pressure on bank reserves and could trigger a second crisis in two years.

The budget plans of Italy‘s populist government, which breach EU borrowing rules, have prompted investors to shed €67bn ($77bn) of Italian government bonds since May. The effect has been to push values down and the interest rate on government bonds, referred to as the yield, to more than three percentage points higher than safer German bonds. “The increase in the [bond yield] spread, the amount of public debt banks hold and new European Union banking rules put the industry under pressure and may generate the need to recapitalise the most fragile lenders,” said Giorgetti, who is an influential member of the far-right League, one of the two parties in Italy’s ruling coalition.

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But the remaining 5% were always the hardest, so nothing really changed.

Brexit Deal Is 95% Settled, Theresa May To Tell Commons (G.)

Theresa May will tell the Commons on Monday that 95% of the Brexit withdrawal agreement and its protocols are settled as she seeks to demonstrate to anxious MPs in her own party that she is making headway in the increasingly fraught divorce talks. The prime minister is expected to confirm she has resolved with the EU the future status of Gibraltar, developed a protocol around the UK’s military base in Cyprus and agreed a mechanism for resolving any future disputes with the EU.

Taking the unusual step of briefing planned remarks to the Commons in advance, May will conclude that “taking all of this together, 95% of the withdrawal agreement and its protocols are now settled” in talks that she has until now largely insisted on keeping secret. The prime minister is scheduled to make a statement on Monday afternoon, after intense criticism from the Tory right for appearing to have made no progress other than indicating at last week’s European summit that she was open to extending the post-Brexit transition period, prompting renewed speculation about a leadership challenge.

A clearly rattled Downing Street held two conference calls with cabinet ministers over the weekend to update them on the European summit before a cabinet discussion on Brexit on Tuesday. Concerns were raised about the transition period and time-limiting the Irish backstop. “No one is in the mood to be bounced,” said one cabinet source. May intends to show the progress made by highlighting all the specific areas of agreement already reached, including settling the divorce bill at £39bn, having an implementation period until at least the end of 2020 and recognising the rights of EU citizens living in the UK and vice versa.

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Down under goes further down.

Sydney Property Slowdown Bites As Auction Clearance Rates Tumble (G.)

Sydney’s housing market is facing the toughest conditions since the global financial crisis after auction rates slumped again at the weekend, with analysts predicting that the slowdown could get much worse in the months ahead. Australia’s biggest city saw only 44% of 567 listed properties sold at the weekend, according to Domain, the lowest preliminary clearance rate for a decade. The figure is likely to be revised down below 40%, a level of downturn not seen for a decade. The last time rates were in the 30% range was November 2008, at the peak of the global financial crisis. The two instances before that were May 2004, when New South Wales introduced vendor stamp duty, and July 1989, when interest rates were 17%.

Equally striking is the collapse in the total amount changing hands at auctions across the city, which sank to $160m at the weekend compared with $484m on the same weekend a year ago – a drop of about two-thirds. The decline in the property market, which AMP’s chief economist, Shane Oliver, thinks could fall 20% before bottoming out in 2020, has been most marked in Sydney where prices are down around 6.3% from the peak in 2017 as buyers drop out owing to tougher credit standards and falling confidence. The clearance rate in Melbourne at the weekend was below 50% on a much greater number of properties (nearly 1,000). But the dollar volume of auction sales shows a similar decline across the country, where buyers spent $453m at the weekend compared with $1.3bn the same weekend last year.

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Oct 142018
 


René Magritte The song of love 1948

 

Companies Buying Their Own Shares Could Fuel The Next Market Rally (CNBC)
Market Crash? Another ‘Red Card’ For The Economy (Lacalle)
4 Lessons From Iceland On Dealing With A Financial Crisis (WEF)
‘Crazy’ That Current Account Deficits Are ‘A Sin:’ Singapore Deputy PM (CNBC)
Draghi to Rome: Don’t Expect An ECB Rescue If Budget Talks Fail (CNBC)
Canada ‘Concerned’ About Khashoggi But Will Sell Arms To Saudis – Trudeau (RT)
David Davis Calls For Cabinet Rebellion Over Brexit Plan (BBC)
Brexit Negotiators Poised To Miss Deal Deadline As UK Hardliners Rebel (ZH)
Internet Censorship Just Took An Unprecedented Leap Forward (CJ)
Professor Exposes Rigged Markets One Academic Paper At A Time (ZH)
Hammer Time (Jim Kunstler)
Who The Hell Cares What Old People Think About Climate Change? (Ol.)
What’s Another Way to Say ‘We’re F-cked’? (Goodell)
‘Not Everything Was Looted’: British Museum To Fight Critics (G.)

 

 

“.. in the last 12 months, the companies in the S&P 500 have purchased $646 billion of their own stock, 29 percent more than the previous 12 months..”

“..at least $350 billion of buybacks that have been planned for the year and are just waiting to be put to work.”

Companies Buying Their Own Shares Could Fuel The Next Market Rally (CNBC)

With stocks down significantly, corporate buybacks could help stabilize the market. Buybacks have been one of the big stories supporting the market this year. DataTrek estimates that in the last 12 months, the companies in the S&P 500 have purchased $646 billion of their own stock, 29 percent more than the previous 12 months. And there’s plenty of “dry powder” left. One firm estimates at least $350 billion of buybacks that have been planned for the year and are just waiting to be put to work. And no, it is not just Apple that is buying its own stock. More than 300 large-cap companies have active buyback programs.

Unfortunately, some traders are resurrecting an old chestnut to help explain the current market weakness. They say we are entering a “blackout” period, when corporations cannot buy their stock because they are about to report quarterly earnings. It’s a neat explanation, except there’s not a lot to it. “Buybacks do occur during blackout periods,” Ben Silverman at InsiderScore told me. “Buyback volume does often decline in the first month of the quarter due to some buyback blackouts,” but companies can, and do, continue to buy back stock, he told me. Another trader (who declined to be identified) confirmed Silverman’s point. Corporate buybacks decline in the month before earnings, but only marginally. He estimated the decline is 30 percent or less.

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“..disproportionate valuations…”

$20 trillion worth of them.

Market Crash? Another ‘Red Card’ For The Economy (Lacalle)

The first thing we must understand is that we are not facing a panic created by a black swan, that is, an unexpected event, but by three factors that few could deny were evident: 1) Excessive valuations after $20 trillion of monetary expansion inflated most financial assets. 2) Bond yields rising as the US 10-year reaches 3.2%. 3) The evidence of the Yuan devaluation, which is on its way to surpass 7 Yuan per US dollar. 4) Global growth estimates trimmed for the sixth time in as many months. Therefore, the US rate hikes – announced repeatedly and incessantly for years – are not the cause, nor the alleged trade war. These are just symptoms, excuses to disguise a much more worrying illness.

What we are experiencing is the evidence of the saturation of excesses built around central banks’ loose policies and the famous “bubble of everything”. And therein lies the problem. After twenty trillion dollars of reckless monetary expansion, risk assets, from the safest to the most volatile, from the most liquid to the unquoted, have skyrocketed with disproportionate valuations.

The cracks in the building always appear first with currencies. Countries that have become accustomed to the idea that “this time is different” and that debt does not matter, started to multiply their indebtedness in foreign currency. Debt in dollars from emerging countries soared to 41% of their total debt. In the first three months of 2018, global debt rose 11% to a record of 247 trillion dollars (according to the IIF), and that of emerging markets soared by 2.5 trillion to an all-time high of 58.5 trillion. . When the lowest risk bond, the United States 10-year, went to 3.1%, the synchronized growth and complacent veil lifted, and many assets showed how risky they truly are.

Markets woke up to a reality that we had decided to ignore. That rates do rise. And if the safest bond gives a return of 3.2% … Am I willing to buy bonds from much riskier countries with negligible spreads? Add to that “sobriety” effect, another one. The inevitable devaluation of the yuan , which soared to almost 7 against the dollar. Am I willing to buy emerging markets and commodities when China exports its imbalances sending disinflationary pressure to the rest of the world?

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Iceland took it serious. No-one else did.

4 Lessons From Iceland On Dealing With A Financial Crisis (WEF)

Days after the collapse of 97% of its banking industry, Icelandic authorities designed a comprehensive policy of accountability, based on two overlapping objectives: establishing the truth and punishing those responsible. An independent truth commission was mandated to document the causes of the meltdown, and the newly established Office of the Special Prosecutor was tasked to thoroughly investigate and prosecute those responsible for any crimes committed in the run up to the crisis. Both mechanisms have been remarkably successful.

Published in 2010, the truth commission’s 2,200-page report not only documented the manifold failings of the financial system in Iceland but also offered specific recommendations to protect state institutions from a future crisis. The report instantly became a bestseller, with copies sold in supermarkets. It was a popular gift – parents even gave it to their children to help them avoid making the same mistakes. The Office of the Special Prosecutor successfully prosecuted 40 bank executives. This is remarkable, especially given the small population of the island and the comparative experience of other European countries affected by the recession, such as Ireland, Cyprus, or the UK (table below).

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Not many people see is that way.

‘Crazy’ That Current Account Deficits Are ‘A Sin:’ Singapore Deputy PM (CNBC)

For decades, developing countries have relied on outside investments to boost their growth despite trade imbalances. But running a current account deficit has come to be regarded as “a sin,” according to Singapore’s deputy prime minister. Such a development is just “crazy,” Tharman Shanmugaratnam told CNBC on Friday during the annual meeting of the Institute of International Finance on the Indonesian island of Bali. Shanmugaratnam was referring to the widely held outlook that nations should seek to avoid current account deficits — which indicate they’re operating on borrowed means because the value of incoming goods, services and investments exceeds the amount leaving the country.

“How did the Singapores and Koreas of the world grow?” he said. “We grew by running current account deficits at an early stage of development so we could invest ahead for growth while our savings were being built up.” Singapore was able to rely on financing through foreign direct investments and long-term investors during its early years of growth, as the international financial system at that time had capital flowing to developing economies, Shanmugaratnam said. “Today, it’s a sin to run a current account deficit and that’s crazy,” said the minister, who is also the chairman of the Monetary Authority of Singapore, the country’s central bank and financial regulator. “I mean, it’s bad in economics, it’s bad in policy sense, and the whole world is going to suffer.”

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But Draghi’s still an Italian.

Draghi to Rome: Don’t Expect An ECB Rescue If Budget Talks Fail (CNBC)

European Central Bank President Mario Draghi is sending a warning to Rome ahead of its formal budget submission: Don’t expect the ECB to save the day. In a Saturday press conference at the IMF and World Bank meetings in Bali, Indonesia, Draghi said he was confident that a budget agreement would be reached and urged all parties to “calm down with the tone.” He also voiced relief that there has not been evidence of a wider spillover effect in European bond markets, even as Italian yields hit multi-year highs. “Everything that happened today is local to Italy.”

When asked whether an eventual realization of contagion or a further rise in Italian yields would force the ECB to scrap tightening plans by year end, Draghi told CNBC: “I don’t want to speculate on this. I just don’t want to conceive such a hypothesis. I’m confident that the authorities — and by the way all parties, not only Italy — all parties will in the end find a compromise solution, an agreement.” He went on to suggest that the situation had been “dramatized,” and that was “not the first time there are deviations from established rules in Europe.” But investors are worried that the Italian government may seize on that precedent and take a gamble that running foul of EU budget rules won’t incur serious penalties, and that, if things do turn worse for Italian financial markets, they”ll be able to lean on the ECB for support. Draghi, for his part, told CNBC that would not be a possibility.

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“..Saudi Arabia expelled the Canadian envoy. It then froze trade talks, cut academic ties, and suspended flights to Canada.”

But arms sales trump everything.

Canada ‘Concerned’ About Khashoggi But Will Sell Arms To Saudis – Trudeau (RT)

Ottawa will keep its $15bn arms deal with Riyadh despite concerns over Saudi involvement in the disappearance of dissident journalist Jamal Khashoggi and the diplomatic row over human rights, Prime Minister Trudeau said. “We respected that contract,” Canadian Prime Minister Justin Trudeau told reporters on Friday, adding that his cabinet has put forward measures to make the arms sales more transparent. “We are making sure Canadians’ expectations and laws are always being followed,” he said. The contract was signed in 2014 by the previous conservative government, and has since been upheld by Trudeau. The specifics of the sales were originally not disclosed by the parties.

According to documents obtained by CBC News last month, a Canadian company is to ship 742 LAV-6 light armored vehicles to Riyadh. The same outlet revealed in March that hundreds of the LAV-6s will be outfitted as “heavy assault” and “anti-tank” types. [..] Human rights campaigners and journalists have criticized Canada’s approach to Saudi Arabia as inconsistent. They point out that the government doesn’t mince words when attacking the kingdom’s human rights record, but at the same time never waivers in its willingness to ship military hardware to Riyadh. Media reports have also strongly suggested that the Saudis might be using Canadian-made LAVs against civilians in Yemen.

[..] Canada stuck to the arms deal even after becoming embroiled in a diplomatic spat with Riyadh in August. Foreign Minister Chrystia Freeland called on the kingdom to release two high-profile dissidents. In response, Saudi Arabia expelled the Canadian envoy. It then froze trade talks, cut academic ties, and suspended flights to Canada.

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She won’t have a cabinet left soon.

David Davis Calls For Cabinet Rebellion Over Brexit Plan (BBC)

Cabinet ministers should “exert their collective authority” and rebel against Theresa May’s proposed Brexit deal, ex-Brexit Secretary David Davis has said. The PM has suggested a temporary customs arrangement for the whole UK to remain in the customs union while the Irish border issue is resolved. Brexiteers suspect this could turn into a permanent situation, restricting the freedom to strike trade deals. Writing in the Sunday Times, Mr Davis said the plan was unacceptable. “This is one of the most fundamental decisions that government has taken in modern times,” he added.

The issue of the border between Northern Ireland and the Republic Ireland is one of the last remaining obstacles to achieving a divorce deal with Brussels, with wrangling continuing over the nature of a “backstop” to keep the frontier open if a wider UK-EU trade arrangement cannot resolve it. The EU’s version, which would see just Northern Ireland remain aligned with Brussels’ rules, has been called unacceptable by Mrs May and the DUP. Mr Davis said the government’s negotiating strategy had “fundamental flaws”, arising from the “unwise decision in December to accept the EU’s language on dealing with the Northern Ireland border”.

On Saturday evening, German newspaper Suddeutsche Zeitung reported a deal had already been reached between Mrs May and the EU, and would be announced on Monday. But a No 10 source told the BBC the report was “100%, categorically untrue” and negotiations were ongoing. The paper said it had seen a leaked memo from EU negotiators to EU ambassadors stating: “Deal made.”

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Too many people want too many too different things.

Brexit Negotiators Poised To Miss Deal Deadline As UK Hardliners Rebel (ZH)

[..] early Sunday in London, the Brexiteer hardliners published an open letter signed by 63 Conservative MPs, including David Davis, the former Brexit secretary, Jacob Rees-Mogg, the chairman of the European Research Group of Eurosceptic backbenchers and former Brexit minister Steve Baker, the former Brexit minister. At the same time, Anne-Marie Trevelyan, a pro-leave MP, published an editorial in the Sunday Telegraph demanding that any possibility that the UK could remain in a “temporary customs arrangement” after the Brexit transition period ends in December 2020 be stricken from the final agreement – because leaving open the possibility would be tantamount to ignoring the political will of the 17.4 million Britons who voted for Brexit.

Meanwhile, Davis demanded in an editorial in the Sunday Times that Cabinet ministers should “exert their collective authority” and rebel against Theresa May’s proposed Brexit deal. All of this is happening amid even more conflicting reports, citing sources from the EU and sources from No. 10 Downing Street, affirming and denying that a deal had been reached. Underscoring the hostility to a deal, the leader of Northern Ireland’s Democratic Unionist Party said Sunday that she would prefer a “no deal” Brexit to a “backstop” transition agreement that would require any borders between Northern Ireland and the UK, arguing that this would amount to the “annexation” of Northern Ireland by the EU, per CNBC.

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The Atlantic Council got going. Social media have become too big a threat to the narrative.

Internet Censorship Just Took An Unprecedented Leap Forward (CJ)

While most indie media was focused on debating the way people talk about Kanye West and the disappearance of Saudi journalist Jamal Khashoggi, an unprecedented escalation in internet censorship took place which threatens everything we all care about. It received frighteningly little attention. After a massive purge of hundreds of politically oriented pages and personal accounts for “inauthentic behavior”, Facebook rightly received a fair amount of criticism for the nebulous and hotly disputed basis for that action. What received relatively little attention was the far more ominous step which was taken next: within hours of being purged from Facebook, multiple anti-establishment alternative media sites had their accounts completely removed from Twitter as well.

As of this writing I am aware of three large alternative media outlets which were expelled from both platforms at almost the same time: Anti-Media, the Free Thought Project, and Police the Police, all of whom had millions of followers on Facebook. Both the Editor-in-Chief of Anti-Media and its Chief Creative Officer were also banned by Twitter, and are being kept from having any new accounts on that site as well.

“I unfortunately always felt the day would come when alternative media would be scrubbed from major social media sites,” Anti-Media’s Chief Creative Officer S.M. Gibson said in a statement to me. “Because of that I prepared by having backup accounts years ago. The fact that those accounts, as well as 3 accounts from individuals associated with Anti-Media were banned without warning and without any reason offered by either platform makes me believe this purge was certainly orchestrated by someone. Who that is I have no idea, but this attack on information was much more concise and methodical in silencing truth than most realize or is being reported.”

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Interesting man.

Professor Exposes Rigged Markets One Academic Paper At A Time (ZH)

Finance professor John Griffin, along with his doctoral student companion, Amin Shams, were the two academics that drew market-moving conclusions about bitcoin last year, while the digital currency was trading around $20,000. After sifting through 2 terabytes of trading data, they alleged that bitcoin was being manipulated by someone using the cryptocurrency Tether to purchase it. Tether remains a relatively little-known crypto, which is pegged to one US dollar. Part of its appeal is that it can “stand in” for dollars when necessary, according to Bloomberg. Griffin and Shams authored a paper in June, with the results of their findings ultimately catalyzing many digital assets to move lower, despite the fact that the CEO of Tether publicly denied that its currency was used to prop up bitcoin.

Griffin works at the University of Texas at Austin, and has become quite an unpopular figure on Wall Street for similar work he has done in the past on ratings companies, the VIX and investment banks. In most of his findings, he claims that these well-known financial instruments and players are, in one way or another, rigged. And the professor seems to enjoy exposing precisely that: rigged, manipulated markets and shady players. “I not only want to understand the world, but make it better,” he told Bloomberg. Griffin’s work has become popular reading within the DOJ and the Commodity Futures Trading Commission, according to Bloomberg.

These regulators – many of them low on resources, time and staff – welcome any additional help they can get (the SEC’s budget has forced it into a hiring freeze and the CFTC budget was cut by Congress in March of this year). John Reed Stark, a former attorney in the SEC’s enforcement division, stated: “It’s incredibly helpful to have an expert of Griffin’s caliber.”

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“..the threat to order might be so great that an unprecedented “emergency” has to be declared, with soldiers in the streets of Washington..”

Hammer Time (Jim Kunstler)

If I were President, I’d declare Oct 12 Greater Fool Day. (Nobody likes Christopher Columbus anymore, that genocidal monster of dead white male privilege.) The futures are zooming as I write, a last roundup for suckers at the OD corral, begging the question: who will show up on Monday. Nobody, I predict. And then what? The great false front of the financial markets resumes falling over into the November election. The rubble from all that buries whatever is left of the automobile business and the housing market. The smoldering aftermath will be described as the start of a long-overdue recession — but it will actually be something a lot worse, with no end in sight.

The Democratic Party might not be nimble enough to capitalize on the sudden disappearance of capital. Their only hope to date has been to capture the vote of every female in America, to otherwise augment their constituency of inflamed and aggrieved victims of unsubstantiated injustices. It’s been fun playing those cards, and the Party might not even know how to play a different game at this point. Democratic politicians may also be among the one-percenters who watch their net worth go up in a vapor in a market collapse, leaving them too numb to act. The last time something like this happened, in the fall of 2008, candidate Barack Obama barely knew what to say about the fall of Lehman Brothers and the ensuing cascade of misery — though unbeknownst to the voters, he was already a hostage of Wall Street.

Complicating matters this time will be the chaos unleashed in politics and governing when the long-running “Russia collusion” melodrama boomerangs into a raft of indictments against the cast of characters in the Intel Community and Department of Justice AND the Democratic National Committee, and perhaps even including the Party’s last standard bearer, HRC, for ginning up the Russia Collusion matter in the first place as an exercise in sedition. The wheels of the law turn slowly, but they’ll turn even while financial markets tumble. And the threat to order might be so great that an unprecedented “emergency” has to be declared, with soldiers in the streets of Washington, as was sadly the case in 1861, the first time the country turned itself upside down.

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Good angle.

Who The Hell Cares What Old People Think About Climate Change? (Ol.)

The loudest and most powerful voices when it comes to the future of the planet — the ones with their hands on the levers of power — have a strong tactical advantage: they will be dead before the shit really hits the fan. This fact curiously goes unspoken, for the most part. Popular arguments tend to be framed around a rosy vision preserving the planet for future generations, which gives our boomer aristocracy the most effective cover story imaginable. They don’t need to care about that, as nice as it sounds. Why would they? It’s all completely hypothetical to them. You may as well be talking about climate patterns in Narnia. Make no mistake: older generations living in the developed world are part of history’s most under-appreciated death cult.

This isn’t abstract psychoanalysis. There is a brutal calculus going on in the minds of everyone from your skeptic uncle to the bankrollers of squillion dollar think tanks whenever they think or talk about climate change. They know that they will never have to really answer for their opinions on this matter, because they’ll be six feet under (and loving it!) when the world’s arable land is rendered infertile and its coastal cities flooded by rising oceans. In some dark and venal corner of their minds, they’re thinking about that fact all the damn time. Despite the frightening predictions of the new IPCC report, they’ve still got plenty of wiggle room to keep denying until they’re dead – which will be sooner rather than later. With any luck they’ll even avoid being held accountable in any concrete way, which for the conservative commentariat is an even worse fate than the Mad Max hellworld towards which we are hurtling.

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One scary dude.

What’s Another Way to Say ‘We’re F-cked’? (Goodell)

[..] a scientist named Richard Alley in a Skype discussion with students at Bard College, as well as with Eban Goodstein, director of the Graduate Programs in Sustainability at Bard. It would be just another nerdy Skype chat except Alley is talking frankly about something that few scientists have the courage to say in public: As bad as you think climate change might be in the coming decades, reality could be far worse. Within the lifetime of the students he’s talking with, Alley says, there’s some risk — small but not as small as you might hope — that the seas could rise as much as 15-to-20 feet.

[..] Richard Alley is not a fringe character in the world of climate change. In fact, he is widely viewed as one of the greatest climate scientists of our time. If there is anyone who understands the full complexity of the risks we face from climate change, it’s Alley. And far from being alarmist, Alley is known for his careful, rigorous science. He has spent most of his adult life deconstructing past Earth climates from the information in ice cores and rocks and ocean sediments. And what he has learned about the past, he has used to better understand the future. For a scientist of Alley’s stature to say that he can’t rule out 15 or 20 feet of sea-level rise in the coming decades is mind-blowing.

And it is one of the clearest statements I’ve ever heard of just how much trouble we are in on our rapidly warming planet (and I’ve heard a lot — I wrote a book about sea-level rise). To judge how radical this is, compare Alley’s numbers to the latest report from the Intergovernmental Panel on Climate Change, which was released on Monday. That report basically argued that if we don’t get to zero carbon emissions by 2050, we have very little chance of avoiding 1.5 Celsius of warming, the threshold that would allow us to maintain a stable climate. The report projected that with 2 Celsius of warming, which is the target of the Paris Climate Agreement, the range of sea level rise we might see by the end of the century is between about one and three feet.

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Sure. But start giving back what was. Problem is, so much of it WAS looted that the museum would become a pretty empty place.

‘Not Everything Was Looted’: British Museum To Fight Critics (G.)

The British Museum is launching an initiative intended to counter the perception that its collections derive only from looted treasures. The monthly Collected Histories talks, which begin on Friday, will provide information on how certain artefacts entered the collection, with the museum saying it will offer a more nuanced take on these stories than is available elsewhere. The museum has long faced criticism for displaying – and refusing to return – looted treasures, including the Parthenon Marbles, Rosetta Stone, and the Gweagal shield.

Earlier this year, the art historian Alice Procter’s Uncomfortable Art Tours around London institutions, including the British Museum, made headlines for their attempts to expose the role of colonialism, with those on the tour given “Display It Like You Stole It” badges. Dr Sushma Jansari, the curator of the Asian ethnographic and South Asia collections at the British Museum, said she had devised Collected Histories in response to Procter’s tours. “There are a lot of partial histories and they tend to focus on the colonial aspect of the collecting so you have a bunch of people who tend to be quite angry and upset,” she said. “We’re trying to reset the balance a little bit. A lot of our collections are not from a colonial context; not everything here was acquired by Europeans by looting.”

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Sep 052018
 


Henri Matisse Luxury, calm and pleasure 1904

 

JP Morgan Warns Next Crisis To Have Flash Crashes And Social Unrest (CNBC)
Share Buybacks Boost Earnings (Roberts)
Mueller To Accept Written Answers From Trump In Russia Probe (Ind.)
Senior Diplomat Exposes US Meddling In Russian Election (ZH)
Google Bosses Expected To Snub Senate (BBC)
Mervyn King Attacks ‘Incompetent’ Brexit Approach (BBC)
Angela Merkel Admits Collapse Of Brexit Talks Cannot Be Ruled Out (G.)
Mark Carney Willing To Stay On As BoE Governor To Help ‘Smooth’ Brexit (Ind.)
US ‘Could Have Forced A Greek Debt Haircut’ – Ashoka Mody (K.)
Eight Bird Species Are First Confirmed Avian Extinctions This Decade (G.)

 

 

Yeah, I know, the Woodward book. No objective views available. Lots of sensational quotes subject to interpretation. Tons of voices saying for instance that Trump wanted Mattis to kill Assad, even ordered him to. But Woodward writes that Trump said: “Let’s fucking kill him! Let’s go in. Let’s kill the fucking lot of them..”. That doesn’t sound like an order. That’s a first reaction from someone who’s been fooled by his own staff into believing Assad was responsible. Normal first reaction. Not an order. We’ll get some more balance, but it won’t come from the MSM.

 

Liquidity, volatility, fighting in the streets.

JP Morgan Warns Next Crisis To Have Flash Crashes And Social Unrest (CNBC)

Sudden, severe stock sell-offs sparked by lightning-fast machines. Unprecedented actions by central banks to shore up asset prices. Social unrest not seen in the U.S. in half a century. That’s how J.P. Morgan Chase’s head quant, Marko Kolanovic, envisions the next financial crisis. The forces that have transformed markets in the last decade, namely the rise of computerized trading and passive investing, are setting up conditions for potentially violent moves once the current bull market ends, according to a report from Kolanovic sent to the bank’s clients on Tuesday. His note is part of a 168-page mega-report, written for the 10th anniversary of the 2008 financial crisis, with perspectives from 48 of the bank’s analysts and economists.

Kolanovic, a 43-year-old analyst with a Ph.D. in theoretical physics, has risen in prominence for explaining, and occasionally predicting, how the new, algorithm-dominated stock market will behave. The current bull rally, the longest in modern history by some measures, has been characterized by extended periods of calm punctuated with spasms of selling known as flash crashes. Recent examples include a nearly 1,600 point intraday drop in February and a 1,100 point decline in August 2015. “They are very rapid, sharp declines in asset values with sharp increases in market volatility,” Kolanovic, the bank’s global head of macro quantitative and derivatives research, said in a recent interview. But those flash crashes occurred during a backdrop of a U.S. economic expansion; the new market hasn’t been tested in the throes of a recession, he said.

“If you have these liquidity-driven sharp sell-offs that come at the end of the cycle, or maybe even causes the end of the cycle, then I think you can have a much more significant asset price correction and even more significant increase in market volatility,” Kolanovic said. [..] Kolanovic closes his report on an ominous note: “The next crisis is also likely to result in social tensions similar to those witnessed 50 years ago in 1968.”

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Tyler labeled it the graph of the decade. That may be a bit much, but it’s good to point out that earnings rise ONLY because there are so many fewer outstanding shares. Buybacks don’t only raise share prices, they raise earnings numbers too.

Share Buybacks Boost Earnings (Roberts)

[..] while top line SALES fell, bottom line revenue expanded as share buybacks and accounting gimmickry escalated for the quarter. The question is whether sales dramatically expanded in Q2? Given some of the recent economic data, we have our doubts and expect a smaller increase. (I will update this chart when S&P updates the sales/share figure for Q2) As shown in the chart below, the biggest support for earnings expansion in Q2 continues to be the dramatic decline in shares outstanding.

Of course, such should not be a surprise. Since the recessionary lows, much of the rise in “profitability” have come from a variety of cost-cutting measures and accounting gimmicks rather than actual increases in top-line revenue. While tax cuts certainly provided the capital for a surge in buybacks, revenue growth, which is directly connected to a consumption-based economy, has remained muted. Since 2009, the reported earnings per share of corporations has increased by a total of 353%. This is the sharpest post-recession rise in reported EPS in history. However, the increase in earnings did not come from a commensurate increase in revenue which has only grown by a marginal 44% during the same period and declined from 49% in Q1.

The reality is that stock buybacks create an illusion of profitability. If a company earns $0.90 per share and has one million shares outstanding – reducing those shares to 900,000 will increase earnings per share to $1.00. No additional revenue was created, no more product was sold, it is simply accounting magic. Such activities do not spur economic growth or generate real wealth for shareholders. However, it does provide the basis for with which to keep Wall Street satisfied and stock option compensated executives happy.

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if Mueller does anything in the public eye before the mid terms are over, expect chaos.

Mueller To Accept Written Answers From Trump In Russia Probe (Ind.)

Special Counsel Robert Mueller will accept written answers from President Donald Trump on whether his campaign conspired with Russia to interfere in the 2016 US election, but Mr Mueller is not ruling out a follow-up interview on that issue, Mr Mueller’s offer to accept written responses from the president on questions about possible collusion was contained in a letter that Mr Trump’s lawyers received on Friday, a person familiar with the matter said on Tuesday. Mr Trump’s legal team and Mr Mueller’s investigators have been negotiating for months over whether the president will be formally interviewed in the probe.

The president’s team have not yet answered the letter. After receiving the written responses, Mr Mueller’s investigators would decide on a next step, which could include an interview with Mr Trump, the person said. The letter was first reported by the New York Times. It was not immediately clear what those conditions mean for other avenues Mr Mueller is exploring, including whether the president sought to obstruct the Russia investigation through actions such as the firing last year of former FBI Director James Comey.

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And there is Google.

Senior Diplomat Exposes US Meddling In Russian Election (ZH)

As Russian citizens prepare to head to the polls on Sunday to vote in regional elections, a senior Russian diplomat has revealed that Moscow has uncovered a US interference effort involving a Silicon Valley tech giant and activists opposed to the government of Russian President Vladimir Putin. Following a briefing on the matter, senior Russian diplomat Andrey Nesterenko told Russia’s Interfax news agency that the US “certainly does” meddle in the Russian electoral processes, as RT reported. The revelation followed reports that Russia has resumed a major airstrike of a reputed terrorist stronghold in Idlib province over the objections of President Trump, who warned that such a strike would be a humanitarian disaster.

“Our collective opinion is that electoral sovereignty is a principle that all civilized nations should respect” the diplomat said, adding that Moscow will notify “our American partners that the actions of their media outlets allow us to state that they are close to breaking Russian law.” Specifically, Nesterenko was referring to a possible violation of Russian election laws by Google parent Alphabet, which hosted advertisements for an illegal campaign rally organized by Russian opposition leader Aleksey Navalny. Navalny is calling for protests to denounce the vote, which he believes is biased. To help spread the word, Navalny’s public movement is using paid ads on Google services like YouTube. However, holding an event dedicated to an election campaign on the same day as the vote goes against Russian law.

The Russian Central Election Commission, media watchdog Roskomnadzor, and the Russian Anti-monopoly Service have reportedly informed Google about these illegal activities being carried out on its platform. “Living in a proper law-abiding nation, we expect every actor to play by the rules. Especially an informed player. If the opposite happens, I believe we have tools at our disposal [to address that],” Andrey Kashevarov, the deputy head of FAS, said.

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It’s like an all-out power game.

Google Bosses Expected To Snub Senate (BBC)

When Silicon Valley companies once again appear in front of the US Senate on Wednesday, there will be one major absentee: Google. The Senate Intelligence Committee wanted to hear from Sundar Pichai, Google’s chief executive, or his boss Larry Page, the chief executive of Google’s parent firm, Alphabet. Barring a dramatic, last-minute change of plan, the BBC understands neither will attend. It would mark the first time a technology firm has refused to comply with the wishes of Congress since the wide-reaching inquiries into misinformation and meddling began in the wake of the 2016 election. Google had instead hoped to send Kent Walker, one of its top lawyers. The offer was abruptly shut down by the committee.

Its vice chairman, the Democratic Senator Mark Warner, said an empty chair would be left out to represent Google’s non-appearance. Eventually, senators may issue a subpoena, forcing an appearance under the threat of prosecution. “If Google thinks we’re just going to go away, they’re sadly mistaken,” said Senator Warner, speaking to Wired magazine. The hearing, scheduled to begin at 09:30 (13:30 GMT), is entitled “Foreign Influence Operations’ Use of Social Media Platforms”. As well as Google, Twitter and Facebook have been called to appear. Twitter will be represented by its chief executive, Jack Dorsey, while Facebook is sending its chief operating officer, Sheryl Sandberg. It will be the first time either executive has faced a congressional committee.

[..] The affair risks becoming a public relations crisis for Google, which just last week was doing its best to bat back claims from President Donald Trump that it was censoring conservative news outlets in its search results. The White House did not provide any evidence to support the president’s complaints, but the topic may well come up at Wednesday’s hearing. “I don’t know if it’s because [Page] wants to avoid being asked about those things or because they think they’re so important and so powerful that they don’t need to provide congressional testimony,” said Republican Senator Marco Rubio, speaking to the Washington Post. He also told the newspaper: “They should be careful with that. When a company gets too big to become accountable, they become a monopoly.”

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No kidding.

Mervyn King Attacks ‘Incompetent’ Brexit Approach (BBC)

Former Bank of England governor Lord King has blasted Brexit preparations as “incompetent”. The Brexit supporter said it “beggared belief” that the world’s sixth-biggest economy should be talking of stockpiling food and medicines. This left the government without a credible bargaining position, he said. “A government that cannot take action to prevent some of these catastrophic outcomes illustrates a whole lack of preparation,” he said. “It doesn’t tell us anything about whether the policy of staying in the EU is good or bad, it tells us everything about the incompetence of the preparation for it.” Lord King said the 11th-hour preparation for a no-deal Brexit had undermined the government’s negotiating position.

He added: “We haven’t had a credible bargaining position, because we hadn’t put in place measures where we could say to our colleagues in Europe, ‘Look, we’d like a free-trade deal, we think that you would probably like one too, but if we can’t agree, don’t be under any misapprehension, we have put in place the measures that would enable us to leave without one.'” He predicts that we will find ourselves with what’s been dubbed as Brino – Brexit in name only – which he said was the worst of all worlds. It’s also a state of affairs that he fears could drag on for years. “I think the biggest risk to the UK, and this is what worries me most, is that this issue isn’t going to go away, you know the referendum hasn’t decided it, because both camps feel that they haven’t got what they wanted.”

Lord King expressed regret and surprise that it was more difficult for a single country to present a united front than the other 27 EU members. He said: “They must have been really worried that they had 27 countries to try to corral, how could they have a united negotiating position, they were dealing with a country that was one country, made a clear decision, voted to leave, it knew what it wanted to do, how on earth could the EU manage to negotiate against this one decisive group on the other side of the Channel? “Well, the reality’s been completely the opposite. The EU has been united, has been clear, has been patient and it’s the UK that’s been divided without any clear strategy at all for how to get to where we want to go.”

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Maybe at this point Merkel should be more outspoken?

Angela Merkel Admits Collapse Of Brexit Talks Cannot Be Ruled Out (G.)

Angela Merkel has warned her country’s business leaders that the Brexit negotiations are in danger of collapse. With talks in Brussels at an impasse with just months to go before a deal needs to be agreed, the German chancellor made a rare intervention at a conference in Frankfurt. She told major players in the world of German finance on Tuesday: “We don’t want the discussions to break down. We will use all our force and creativity to make sure a deal happens. We don’t want these negotiations to collapse. But we also can’t fully rule that out because we still have no result.” The EU says it needs a deal to be struck on the withdrawal agreement covering citizens’ rights, the £39bn divorce bill and the Irish border, along with the political declaration on the future deal, by November at the latest.

The German chancellor has generally played a backseat role in the talks, preferring to intervene only at crunch points at EU summits. EU leaders are due to meet in Brussels in October, but an emergency summit is being pencilled in for 13 November in case the negotiations require an extra few weeks for agreement to be made. The leaders will be gathering at a summit in Salzburg later this month where the EU27 are planning a “carrot and stick” approach to Brexit, offering Theresa May warm words on the Chequers proposals to take to the Conservative conference alongside a sharp warning that they need a plan for Northern Ireland within weeks.

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Using the words ‘Brexit’ and ‘smooth’ in one sentence is just comedy. Wonder what they had to promise him. Knighthood?

Mark Carney Willing To Stay On As BoE Governor To Help ‘Smooth’ Brexit (Ind.)

Mark Carney told MPs on Tuesday that he was willing to stay on as governor of the Bank of England beyond his planned departure date in order to “smooth” the Brexit process. Mr Carney had planned to step down in June 2019 after six years in Threadneedle Street’s top job, two years fewer than BoE governors normally serve. But, asked by MPs on the Treasury Committee whether he would stay, Mr Carney said: “Even though I have already agreed to extend my time to support a smooth Brexit, I am willing to do whatever else I can in order to promote both a smooth Brexit and effective transition at the Bank of England.”

“The chancellor and I have discussed this. I would expect an announcement to be made in due course.” The comments come after mounting speculation in recent days that the Treasury would like Mr Carney to stay on in his role, providing more continuity during uncertain economic times. There are fears that few candidates will put themselves forward for the job as the Brexit negotiations reach a critical stage.

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“What was the basic demand of SYRIZA? To tie debt repayments to GDP and so reduce the level of austerity. Any good economist will tell you that was a very reasonable starting point for the negotiation.”

US ‘Could Have Forced A Greek Debt Haircut’ – Ashoka Mody (K.)

“The fundamental reason why the Greek crisis lasted so long was the extreme level of austerity that was imposed.” That is the verdict of Ashoka Mody, visiting professor in International Economic Policy at Princeton University, a former deputy director of the IMF’s European Department and one of the most eloquent critics of the policies of the troika in Greece and elsewhere. Mody, who recently published a long-form version of these critiques in his book “EuroTragedy: A Drama in Nine Acts”, spoke to Kathimerini about the Greek crisis and those to blame for it. We began by discussing what many consider the original sin of the bailout period: the decision not to restructure Greece’s debt in May 2010. What should the IMF have done?

“It should have insisted, it should have made the restructuring a condition of its participation,” the Indian-born economist said, mentioning that the staff report all but admitted the debt was unsustainable and that Dominique Strauss-Kahn later said he was in favor of debt relief. “The reason it didn’t happen was the ideological opposition of the European Central Bank – in this case supported by the US Treasury. Strauss-Kahn did not want to offend either the Americans or the Europeans. The stance of the US Treasury was critical – if its representative on the Executive Board had come out in favor of a restructuring, it would have happened. Instead, it sided completely with the European viewpoint – the Treasury secretary, Tim Geithner, believed that there should never be a restructuring in the midst of a crisis.”

Regarding the argument that the problem in Greece (compared with other bailout countries) was there was no ownership of reforms, Mody said: “It is indeed the case that IMF programs only succeed when there is ownership. The question is what were Greeks asked to own. The arithmetic of austerity was relentless, cruel. Whatever the Greeks did, with austerity on such a scale they could not have escaped the collapse in gross domestic product. And then things became even worse, because the recession led to targets being missed, which led to more measures! The IMF published studies at the time showing what a terrible idea it was to impose further austerity in a recession, how it worsens the debt-to-GDP ratio. Yet the IMF kept doing it in Greece, ignoring all its internal studies!”

[..] The conversation turned to 2015. How does he think the creditors should have handled SYRIZA differently? “Look, even before SYRIZA came to power, Wolfgang Schaeuble said that elections do not matter. On January 31, 2015, six days after the election, Erkki Liikanen, the head of the Finnish central bank, says that if the new government does not accept the program, the ECB will cut liquidity support for Greek banks. Four days later, the ECB withdraws the waiver [which allowed the banks to borrow cheaply from it, using Greek government bonds as collateral]. And in June, the Europeans close down the banks. What was the basic demand of SYRIZA? To tie debt repayments to GDP and so reduce the level of austerity. Any good economist will tell you that was a very reasonable starting point for the negotiation.”

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More of my friends are leaving every day. Some don’t even say goodbye.

Eight Bird Species Are First Confirmed Avian Extinctions This Decade (G.)

Spix’s macaw, a brilliant blue species of Brazilian parrot that starred in the children’s animation Rio, has become extinct this century, according to a new assessment of endangered birds. The macaw is one of eight species, including the poo-uli, the Pernambuco pygmy-owl and the cryptic treehunter, that can be added to the growing list of confirmed or highly likely extinctions, according to a new statistical analysis by BirdLife International. Historically, most bird extinctions have been small-island species vulnerable to hunting or invasive species but five of these new extinctions have occurred in South America and are attributed by scientists to deforestation.

Stuart Butchart, BirdLife International’s chief scientist, said the new study highlighted that an extinction crisis was now unfolding on large continents, driven by human habitat destruction. “People think of extinctions and think of the dodo but our analysis shows that extinctions are continuing and accelerating today,” he said. “Historically 90% of bird extinctions have been small populations on remote islands. Our evidence shows there is a growing wave of extinctions washing over the continent driven by habitat loss from unsustainable agriculture, drainage and logging.” More than 26,000 of the world’s species are now threatened, according to the latest “red list” assessment, with scientists warning that humans are driving a sixth great extinction event.


The Brazilian Spix’s macaw, as seen in the children’s movie Rio, is one of the eight birds to become extinct Photograph: Al Wabra Wildlife Preservation

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Aug 032018
 
 August 3, 2018  Posted by at 7:36 am Finance Tagged with: , , , , , , , , , ,  4 Responses »


Ivan Aivazovsky The Galata tower by moonlight 1845

 

The Trump Administration Is Headed For A Gigantic Debt Headache (CNBC)
The First Company To Reach $1 Trillion In Market Value Was In China (CNBC)
Apple Becomes World’s First Trillion-Dollar Company (G.)
Ban Share Buybacks (Week)
Where Are the 17,000 Model 3 Cars Tesla “Produced” But Didn’t “Deliver”? (WS)
Middle-Class Americans Still Haven’t Recovered From Housing Bust (MW)
China Loses Spot As World’s No. 2 Stock Market to Japan (AFP)
Judge Rejects Suit Against Fox News Brought By Parents Of Seth Rich (NBC)
Saudi Arabia Planned To Invade Qatar Last Summer. Tillerson Intervened (IC)
Food Banks Appeal For Donations To Feed Children During School Holidays (G.)
Britain Heading Back To Pre-Victorian Days (G.)

 

 

Nobody seems to care much.

The Trump Administration Is Headed For A Gigantic Debt Headache (CNBC)

Swelling government debt levels are shaping up to be the biggest economic challenge for President Donald Trump, a problem that could spill into the stock market. This week’s Treasury Department announcement that it would have to increase the amount of bond auctions over the next three months was a low-key reminder that the government IOU is only getting bigger and will start influencing interest rates sooner rather than later. As more product comes to market, investors could be expected to demand higher yields to snap up all the supply. And those higher yields mean higher costs at a time when taxpayers already have shelled out nearly half a trillion dollars this year in debt service.

Put it all together and it raises questions about how long the spurt in economic growth will continue, what will happen the next time the economy falls into recession and what impact it all will have on financial markets. “We’re applauding strong growth — yet have no choice but to borrow the largest amount of money since the financial crisis a decade ago,” Bernard Baumohl, chief global economist at The Economic Outlook Group, said in a note. “And that’s just the start, the US will [be] running trillion dollar deficits as far as the eye can see.” The total U.S. debt just passed the $21.3 trillion mark, of which $15.6 trillion is owed by the public.

The Treasury announced Wednesday that it will be adding $1 billion each to auctions of 2-, 3- and 5-year debt over the next three months, and $1 billion each for 7- and 10-year note and 30-year bond auctions in August. In addition, the department is issuing a new two-month note to help assure liquidity in the fixed income market. The changes will add $30 billion to the debt issuance for the quarter. On the overall, the Treasury said it expects to borrow $769 billion in the second half of the year, a projected 63% increase from 2017.

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So much for Apple then.

The First Company To Reach $1 Trillion In Market Value Was In China (CNBC)

Before Apple hit $1 trillion in market value Thursday, there was Chinese oil giant PetroChina, which reached the milestone more than a decade ago. It did not fare too well after that. PetroChina’s market cap hit $1 trillion in 2007 following a successful debut on the Shanghai Stock Exchange on Nov. 5 of that year. The company’s Shanghai-listed shares nearly tripled at the open that day, with its Hong Kong-listed shares following them higher. (It had debuted on the Hong Kong exchange years earlier.) The rise gave the company a market cap of $1.1 trillion on both the Shanghai and Hong Kong exchanges.

According to Reuters, PetroChina’s opening price in Shanghai valued the company at 60 times analysts’ forecasts for its 2007 earnings per share, above the global average of 18 times for oil companys at the time. It was all downhill from there, however. PetroChina’s market value plummeted to less than $260 billion by the end of 2008, representing the largest destruction of shareholder wealth in world history, according to Bloomberg. Blame the financial crisis and a collapse in oil prices. When PetroChina made its debut in 2007 brent crude prices were at one point, above $140 a barrel. Today they are about half that.

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This piece cites PetroChina, but says not enough shares were outstanding. But Apple’s outstanding shares shrank a lot as well, because of buybacks.

Apple Becomes World’s First Trillion-Dollar Company (G.)

Apple became the world’s first trillion-dollar public company on Thursday, as a rise in its share price pushed it past the landmark valuation. The iMac to iPhone company, co-founded to sell personal computers by the late Steve Jobs in 1976, reached the historic milestone as its shares hit $207.05, the day after it posted strong financial results. Apple’s share price has grown 2,000% since Tim Cook replaced Jobs as chief executive in 2011. The company hit a $1tn market capitalisation 42 years after Apple was founded and 117 years after US Steel became the first company to be valued at $1bn in 1901. It means Apple’s stock market value is more than a third the size of the UK economy and larger than the economies of Turkey and Switzerland.

While energy company PetroChina was cited as the world’s first trillion-dollar company after its 2007 flotation, the valuation is considered unreliable because only 2% of the company was released for public trading. Saudi Arabia’s national oil company Saudi Aramco could be worth up to $2tn upon its planned stock market float but the value is yet to be tested. This week’s rise in Apple’s share price was powered by quarterly financial results released on Tuesday that were better than Wall Street had expected. The tech giant racked up profits of $11.5bn in three months on the back of record sales that hit $53.3bn, pushing shares of the iPhone giant higher and easing the value of the company up from $935bn towards $1tn (£770bn).

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Ryan Cooper focuses on lower wages as a result of buybacks. I would go for the death of price discovery. Apple may be ‘worth’ one trillion, but it has a $100 billion buybacks war chest. That’s 10%. So what is it really worth.

Ban Share Buybacks (Week)

American corporations are simply raking in profits. Some are so bloated and cash-rich they literally can’t figure out what to do with it all. Apple, for instance, is sitting on nearly a quarter of a trillion dollars — and that’s down a bit from earlier this year. Microsoft and Google, meanwhile, were sitting on “only” $132 billion and $63 billion respectively (as of March this year). However, American corporations in general are taking those profits and kicking them out to shareholders, mainly in the form of share buybacks. These are when a corporation uses profits, cash, or borrowed money to buy its own stock, thus increasing its price and the wealth of its shareholders. (Big Tech is doing this as well, just not fast enough to draw down their dragon hoards.)

As a new joint report from the Roosevelt Institute and the National Employment Law Project by Katy Milani and Irene Tung shows, from 2015 to 2017 corporations spent nearly 60% of their net profits on buybacks. This practice should be banned immediately, as it was before the Reagan administration. The most immediately objectionable consequence of share buybacks is they come at the expense of wages. Milani and Tung calculate that if buybacks spending had been funneled into wage increases, McDonald’s employees could get a raise of $4,000; those at Starbucks could get $8,000; and those at Lowes, Home Depot, and CVS could get an eye-popping $18,000.

Some economists are skeptical of this reasoning, arguing that wages are set according to labor market conditions. But if you set aside free market dogmatism, it is beyond obvious that this sort of behavior is coming at workers’ expense. Wall Street bloodsuckers are not at all subtle about it, screaming bloody murder and tanking stocks every time a public company proposes paying workers instead of shareholders. Indeed, it provides a highly convincing explanation for something that has been puzzling analysts for months: the situation of wages continuing to stagnate or decline while unemployment is at 4%. The answer is that wages are low in large part because the American corporate structure has been rigged in favor of shareholders and executives.

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And Tesla was up 16% yesterday?!

Where Are the 17,000 Model 3 Cars Tesla “Produced” But Didn’t “Deliver”? (WS)

Tesla never ceases to astound with its hype and promises and with its results that are just mindboggling, including today when it reported its Q2 “earnings” – meaning a net loss of $718 million, its largest net loss ever in its loss-drenched history spanning over a decade. It was more than double its record loss a year ago: The small solitary green bump in Q3 2016 wasn’t actually some kind of operational genius that suddenly set in for a brief period. No, Tesla sold $139 million in taxpayer-funded pollution credits to other companies, which allowed it to show a profit of $22 million. Tesla adheres strictly to a business model that is much appreciated by the stock market: The more it sells, the more money it loses.

Total revenues – automotive and energy combined – rose 43% year-over-year to $4.0 billion in Q2. This increase in revenues was bought with a 113% surge in net losses. When losses surge over twice as fast as revenues, it’s not the light at the end of the tunnel you’re seeing. In between the lines of its earnings report, Tesla also confirmed the veracity of the many videos and pictures circulating on the internet that show huge parking lots filled with thousands of brand-new, Model 3 vehicles, unsold, undelivered, perhaps unfinished, waiting for some sort of miracle, perhaps needing more work, more parts, or additional testing before they can be sold, if they can be sold.

But these thousands of vehicles were nevertheless “factory gated,” as Tesla said, to hit the 5,000 a week production goal. And so they’re unfinished and cannot be delivered but are outside the factory gate, and Tesla didn’t totally lie about its “production” numbers. Now it put a number on these “produced” but undelivered vehicles: 12,571 in Q2 on top of the 4,497 in Q1, for a total of 17,000 vehicles sitting in parking lots.

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Wealth transfer.

Middle-Class Americans Still Haven’t Recovered From Housing Bust (MW)

A new study by the Opportunity and Growth Institute at the Minneapolis Fed found that the housing boom and bust made middle-class Americans poorer but boosted wealth for the richest 10%, widening the income and wealth gap substantially. Authors of the paper examined the relationship between incomes and asset prices over the past 70 years, concluding that rising and falling housing and stock markets have been the main drivers of wealth inequality. In the simplest model, the authors wrote, how fast wealth accumulates should be a function of how fast incomes rise. But incomes played only a minor role in wealth distributions in postwar America. Instead, wealth accumulation for most Americans was driven by booming home prices over the past several decade until 2007.

[..] ..real incomes of middle-class Americans rose by a third between 1970 and 2007, or less than 1% a year, while incomes of the bottom half have been largely stagnant since about 1970. Incomes for the top 10%, meanwhile, have doubled over the same period. Incomes for the bottom 90% have stagnant over the past 10 years. On the wealth distribution side, however, the poor became poorer, while the rich became richer after the financial crisis. Up until 2007, middle class Americans saw their wealth increase at the same rate as their wealthy counterparts, rising 140% over 40 years. Incomes for households in the bottom half doubled from 1971 until 2007—all thanks to booming house prices.

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Perspective: “Chinese stocks were worth $6.09 trillion, compared with $6.17 trillion in Japan. The US market is worth $31 trillion.”

China Loses Spot As World’s No. 2 Stock Market to Japan (AFP)

China’s stock market has been overtaken as the world’s second-biggest by Japan’s, having been swiped this year by the threat of a trade war with the United States and slowing economic growth. Data from Bloomberg News in intra-day trade on Friday showed the value of equities on the mainland had slipped behind those in their neighbouring country for the first time since taking the number-two spot in 2014. The figures showed Chinese stocks were worth $6.09 trillion, compared with $6.17 trillion in Japan. The US market is worth $31 trillion. While global markets have been broadly hit by fears of a trade war between the world’s top two economies, Chinese equities are among the worst performers this year, with the benchmark Shanghai Composite Index slumping more than 16% since the start of January.

The pressure was ratcheted up this week when the White House said it was considering more than doubling threatened tariffs on a range of Chinese imports worth $200 billion. Washington has already imposed tariffs on $34 billion worth of goods and is considering hitting another $16 billion in the coming weeks. “Losing the ranking to Japan is the damage caused by the trade war,” Banny Lam, head of research at CEB International Investment in Hong Kong, told Bloomberg News. “The Japan equity gauge is relatively more stable around the current level but China’s market cap has slumped from its peak this year.”

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But what really happened? Julian Assange knows. Kim Dotcom knows.

Judge Rejects Suit Against Fox News Brought By Parents Of Seth Rich (NBC)

A New York judge has rejected a lawsuit brought against Fox News by the parents of a Democratic National Committee employee killed in 2016. In a ruling Thursday, U.S. District Judge George Daniels said he understood Joel and Mary Rich might feel that the tragic death of their son was exploited for political purposes, but that the lawsuit lacked specific instances of wrongdoing necessary to proceed to trial. In the March lawsuit, the parents said that Fox News turned the death of their son, Seth Rich, into a “political football” by claiming he had leaked DNC emails to Wikileaks during the presidential campaign. The 27-year-old Rich was killed in what Washington police believe was a random robbery attempt. The judge also dismissed a related suit by a private investigator.

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Nice twist.

Saudi Arabia Planned To Invade Qatar Last Summer. Tillerson Intervened (IC)

Thirteen hours before Secretary of State Rex Tillerson learned from the presidential Twitter feed that he was being fired, he did something that President Donald Trump had been unwilling to do. Following a phone call with his British counterpart, Tillerson condemned a deadly nerve agent attack in the U.K., saying that he had “full confidence in the U.K.’s investigation and its assessment that Russia was likely responsible.” White House Press Secretary Sarah Sanders had called the attack “reckless, indiscriminate, and irresponsible,” but stopped short of blaming Russia, leading numerous media outlets to speculate that Tillerson was fired for criticizing Russia.

But in the months that followed his departure, press reports strongly suggested that the countries lobbying hardest for Tillerson’s removal were Saudi Arabia and the United Arab Emirates, both of which were frustrated by Tillerson’s attempts to mediate and end their blockade of Qatar. One report in the New York Times even suggested that the UAE ambassador to Washington knew that Tillerson would be forced out three months before he was fired in March. The Intercept has learned of a previously unreported episode that stoked the UAE and Saudi Arabia’s anger at Tillerson and that may have played a key role in his removal. In the summer of 2017, several months before the Gulf allies started pushing for his ouster, Tillerson intervened to stop a secret Saudi-led, UAE-backed plan to invade and essentially conquer Qatar, according to one current member of the U.S. intelligence community and two former State Department officials, all of whom declined to be named, citing the sensitivity of the matter.

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A nation that refuses to feed its children.

Food Banks Appeal For Donations To Feed Children During School Holidays (G.)

Calls have been made for the public to donate to their local food bank during the summer holidays owing to increasing demand from families who rely on free school meals during term time. The Trussell Trust, an anti-poverty charity, said an increase in food bank use over the summer was driven by a rise in demand by children, as it released figures from its network of more than 420 food banks across the country. While the number of adults seeking supplies from food banks during the summer months decreased in 2017, the number of children needing support shot up. During July and August 2017, food banks provided more than 204,525 three-day emergency supplies, 74,011 of which went to children. In the preceding two months, 70,510 supplies went to children. The number of adults seeking help from food banks fell from 131,521 in May and June to 130,514 in July and August.

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“..a billionaire’s flat in Knightsbridge costs just £1,421 a year, while a shop on the floor below can pay £244,000 in business rates.”

Britain Heading Back To Pre-Victorian Days (G.)

Is Northamptonshire Britain’s first banana republic? This once lovely county, much of it now a waste of wind turbines and warehouses, is close to bankruptcy. It must sack staff, freeze pay, close two-thirds of its libraries and stop all bus subsidies. It faces default on its statutory duty to public health, children in care and the elderly. While much of this is due to mismanagement, the National Audit Office says that 15 other counties, believed to include Somerset and Surrey, are in similar straits. Years of austerity are coming home to roost – and where least expected, among the rich shires. What is going on? Local councils cannot do what central government can do, which is tax and borrow to meet need.

Each year Whitehall spends more. It can tip money into the NHS and triple-lock pensions – good causes both – as well as vanity projects such as aircraft carriers, high-speed trains and nuclear power stations. Councils have no such discretion. Since 2010 their spending has shrunk by over a third, with central government grants slashed by as much as NHS spending has risen. 95% of British taxation is controlled by the centre, against 60% in France and 50% in the US. Yet local spending must pick up the casualties of the welfare state – vulnerable children, elderly and infirm people. It must fund the day centres, youth clubs, care homes and visits to problem families. To do so, services that most modern communities expect from government must now be butchered, such as parks, libraries and museums.

Local, not national, austerity is sending Britain back to pre-Victorian days. The solution is swift and easy. The government should uncap local taxes, free local spending, and allow local people to pay for what they want. It was how local government ran, perfectly well, up to the early 1980s. In most other countries it is still regarded as a normal feature of democracy. At present Britain’s meagre local revenue derives from a regressive household tax fixed on 1991 property valuations, which no government (except in Wales) has had the guts to revalue. Thus a billionaire’s flat in Knightsbridge costs just £1,421 a year, while a shop on the floor below can pay £244,000 in business rates. It is no surprise that the former goes to the council, and much of the latter is paid to central government.

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