Apr 142018
 


Pieter Bruegel the Elder The Fall of the Rebel Angels 1562

 

 

Lots of rants today, obviously, lots of -slightly- different angles.. Here’s Dr. D’s. He beat me to it…

 

 

Dr. D: Too annoyed to comment on the attack. But hey, really NOT attacking would be the change here.

There was a recent article, falsely saying:

“[H]is successful repression of the Chechen revolt…hardly endeared Putin to the Chechens.”

Oddly, this was from Russia Today. No, the Chechen war was a gruesome and unpopular war, however it was just part of the MacKinderesque plan of first lying, killing, then robbing Russia up front by lowering the price of Russia’s exports gold and oil (using Saudi oil and Canadian gold), starting an arms race, then collapsing the ruble and empowering every corrupt, criminal oligarch we could find using pallets of $100 bills. No joke, official record. Russia’s collapse and the Chechen war was no “accident”, no natural consequence of the socialism system or collapse, but a soup-to-nuts military operation. We had the nuts, and they were in the soup. The “accident” here was trusting anything the West says, ever. Haven’t they ever heard about the Indians?

Anyway, the 100-year-old plan of MacKinder, father of geopolitics, was believed by other tottering dinosaurs like Brzezinski in an age no longer run by the horse and cannon and that plan was to cut open the “long, soft underbelly” of Russia, which started with funding Islamic fighters (terrorists) out of Afghanistan (admitted and applauded), then move on through Islamic Chechens, Uzbeks, Kazaks, etc. Although completely crippled, Putin – who was put in power BY the west, BY Clinton – nevertheless stopped them in Chechnya, and was naturally savaged by the West for defending his nation in a proxy Civil War. For beyond hating men and families, they hate nations, for all these things restrain murderous self-serving psychopathy.

 

It’s a little more complicated than that as the USSR was broken up, there were cross-protectorate treaties, but that’s very typically 1,000-year Russian way. They don’t have ethnic and religious problems, or not in the western sense, because they do what America claims to do (with the States for example) and leave people alone, to be individual states, customs, religions, and people. They also don’t have a problem with Putin, as the Russian Way is really a sort of monarchism in the old sense, with a king and court and advisors, and always has been back through him, the Soviets, Stalin, Romanov, Peter, and back since they were Russian.

What’s my point? They don’t think about things the way we do. Not entirely. Chechnya was not “breaking away” and “fighting Russia” as reported, it was subverted by the West TO attack Russia. Chechens know this, but like all CIA ops, half of the target country were for and half were against. So when Putin wouldn’t stop sending the army in and leveled the country (like we’ve done in Afghanistan, Iraq, Syria, Libya, and everywhere else we’ve ever been) half the Chechen people were in support of Putin – or anyone! – to restore law, order, Chechen customs, and peace against the ISIS-like radical Wahhabists who were funded by Saudi Arabia as indeed he did, in the brutal respect-only-strength way they do things in that part of the world.

What? That’s crazy. Yes? So how do you explain that the present Chechen leader — a nation as sovereign as Canada — told Putin at the start of the Syrian war he would send any number of Chechen fighters to any place on the planet, and kill anybody Putin wanted, and consider it an personal honor. And these are deeply Islamic, hard-core militants. You see, despite also being hard-core Islamists and all around hard-bodies, they too hate Saudi Arabia, Wahhabists, and the intervention of the West that devastated their country. Killing millions of southern Russians for the goal of killing more northern Russians, as it were, every child growing up in rubble-filled war zone. What’s not to hate?

…But why would we report that? That we made a treaty with Russia, invaded on all sides anyway, then killed +2 million with Disaster Capitalism and +2 million more in the ‘Stans with the intent of wiping Russia off the map?

 

You see Reagan didn’t want to WIN the Cold War. He wanted to END it. The Cheney-Rumsfeld-Dr. Strangelove wing could never forgive that. His body wasn’t cold before they were back, this time behind Clinton, to finish the occupation of Russia as the last step to world domination. This is why the crazies back in the PNAC days were desperate to nuke the helpless Russia even then. They were right. If you didn’t nuke them, openly attack them, they would survive and escape, which would ultimamtely thwart the Neocon/Deep State plans to take over the world. And so they have.

But as we see today, they never give up. They’re still aching to start a world-wide nuclear exchange and openly agitating 24/7 on CNN to do so. No amount of bombing is enough, no number of bankrupted, shattered cities are too many just to get Russia out of the way, whose historic job, sadly but heroically, is to crush and utterly destroy the idiotic plans of meglomaniac warmongers from the West like Hitler and Napoleon, and dash them to pieces on the rocks of reality. Because the West never restrains its maniacs, it empowers them.

Being a country the size of Canada, Russia doesn’t escape this, but in the irrefutable monkey-hammering Russia gives, like say destroying 30 German divisions and 5 Million men with little more than hunting rifles and force of will – most of all the fighting in WWII – or killing 500,000 of Napoleon’s 650,000 and sending him back barefoot, well, even the western propaganda and passion for self-delusion can’t hide that…but it doesn’t help Russia any to get shot when finally facing down their violent, meth-addled neighbors. Russia knows this, and they will in fact bomb the West with iron resolve if we don’t cut it out, yet we show no signs of coming to our senses. We never have before. Russia is what stops them, going way back.

 

You’d think we’d learn something. Brzezinski did. Just before he died he said his life-long plan to destroy Russia, culminating in WWIII by cutting off the Ukraine with the New Charge of the Light Brigade was a complete failure. This is the 100 year plan of MacKinder, and these dinosaurs just won’t die. They won’t learn. They have no imagination, doing the same failed thing over and over, generation after generation. Maybe we’ll have to as well.

Maybe we — or rather the Deep State — won’t stop until Russia drops a Satan-II missile, a single one of which would destroy New England. Or a nuclear sub drone hits NY. Or their pop-up stealth pods level Charleston. Or they sink every U.S. surface ship on the planet in 5 minutes using the Sunburn missile. Easy as pushing a button. U.S. military power is leveled, the people set back 75 years, 120 Million dead. Is that what you want America? On behalf of whom? Dick Cheney, HSBC, the City of London?

But there is reason to hope, as core right figurehead Tucker Carlson recently gave a steely antiwar commentary to reach the dinosaur viewers of Fox News, Republicans-by-name. Although driven back to the darkest corners, what remains of the real Left is historically anti-war, although you’d never know it by the way 90% of the party acts. That’s seen in this far-left (or rather the People’s Left) far-left (or rather the People’s Left) Jimmy Dore video.

But if the Right and Left come together against collective bankruptcy and suicide, then they can only unite against the Deep State of Dr. Strangelove, and turn back to human priorities, against the God-knows-what priority of killing everyone on earth they can find, one by one, for any reason they can come up with. Doesn’t it sound like we should be against this? I am. Are you?

“Never fight a land war in Asia” — Princess Bride

 

 

Dec 202014
 
 December 20, 2014  Posted by at 12:59 pm Finance Tagged with: , , , , , , , , ,  Comments Off on Debt Rattle December 20 2014


William Henry Jackson “Street in the French Quarter, New Orleans” 1885

Two Nations: 27% Of British Children Grow Up In Poverty (Independent)
Manufacturers Face ‘Bloodbath’ In Russia (BBC)
China Offers Enhanced Cooperation as Russia Struggles (Bloomberg)
Dollar Resumes Climb as Yellen Signals 2015 Interest-Rate Rise (Bloomberg)
UK Unions Call For North Sea Tax Breaks As Oil Slump Threatens Jobs (Guardian)
It’s Not Easy Being Green: Fossil Fuel Subsidies Half A Trillion Dollars (CNBC)
Bulgaria Ready To Issue South Stream Pipeline Permits (RT)
The Oil Train Glut Shows How Little The Keystone XL Pipeline Matters (Reuters)
2014: The Year We Piled Up Risks Like A Global Game Of Tetris (David Collum)
Wall Street Firms Endure Lost Decade After Goldman Peak in 2007 (Bloomberg)
Meredith Whitney’s Hedge Fund Said to Be in Turmoil (Bloomberg)
France Risks EU Split Over Russian Sanctions Relief (Bloomberg)
First Arrest In UK Foreign Exchange Market Rigging Investigation (Guardian)
Obama Authorizes ‘Economic Embargo’ On Russia’s Crimea (RT)
Antarctic Photo Science Archive Unlocked (BBC)
Wolves, Bears And Lynx ‘Now Plentiful In Europe’ (AFP)
Birds ‘Heard Tornadoes Coming’ And Fled One Day Ahead (BBC)
Dick Cheney Should Be In Prison, Not On ‘Meet The Press’: Greenwald (RT)
Will Religion Ever Disappear? (BBC)

How dare you?

Two Nations: 27% Of British Children Grow Up In Poverty (Independent)

Christmas shoppers are expected spend £1.2bn today, as 13 million consumers hand over £21m every minute. But while those who can afford it stock up in the desperate rush for gifts on “Panic Saturday”, another 13 million people will have more sobering reasons to worry – living in poverty in a festive Britain characterised as “two nations” divided. The Trussell Trust warned it is expecting its busiest Christmas ever in providing emergency rations – with one million people now relying on food banks run by the charity and other organisations. Many more are expected to get into debt to fund the cost of the festive season. Yet the indulgence will reach new peaks for others as shoppers will spend an average of £92 per person today, according to analysts. The Centre for Retail Research said consumers will spend £4.74bn in stores during the five days before Christmas Day – a 21% increase on last year.

Overall, spending during the final week before the day itself is expected to rise by 7% compared with last year. The predictions come a week after “Black Friday”, when retailers slashed prices encouraging a shopping surge in which sales grew at their fastest rate for 27 years, according to a CBI report released yesterday. About £6.5bn will have been spent by wealthier consumers in the UK’s top supermarkets alone in the two weeks to Christmas, according to analysts Nielsen. Charities warned that these spending figures disguise another Britain, in which families have so little they are unable to afford basics such as food, heating and housing costs. As 2014 draws to a close there are 13 million people in poverty – including 27% of the 2.5 million children in the UK, according to the Child Poverty Action Group (CPAG).

Inequality in the UK is now so extreme that the five richest families are wealthier than the bottom 20% of the entire population, according to Oxfam. Meanwhile, the housing charity Shelter predicts that 93,000 children will be homeless this Christmas, as the number of homeless families trapped in temporary or emergency accommodation exceeds 60,000. “This is a real, stark two-nations Britain that we are talking about,” said Trussell Trust chair Chris Mould. “At Christmas time, when people will be spending more than they have ever done before, we have also tens of thousands of people who haven’t got enough to buy food for themselves and families. “It’s not a tolerable situation. It’s got to be taken seriously. There is a consensus across the country that we can’t just accept this. We’ve got to take action.”

Read more …

How the west sinks its own companies.

Manufacturers Face ‘Bloodbath’ In Russia (BBC)

The chief executive of Renault Nissan, Carlos Ghosn, has said that manufacturers in Russia are facing a “bloodbath” because of the plunge in the value of the rouble. The currency has been dropping steadily for several months, but suffered very sharp falls earlier this week. The two firms have stopped taking orders for some new models and raised prices on others. Several rival manufacturers have taken similar steps. However, Mr Ghosn said he was confident the situation would stabilise, eventually. “We didn’t do it [suspend orders] overall, just on some models we said, ‘Sorry, until we see where this situation is going we don’t take orders,'” he told reporters in Tokyo. “When the rouble sinks it’s a bloodbath for everybody. It’s red ink, people are losing money, all car manufacturers are losing money,” he added. The French-Japanese Renault-Nissan alliance is a major player in Russia’s car industry. Not only does it sell vehicles under its own brands, it also controls the domestic manufacturer Avtovaz, better known as the maker of Lada cars.

Mr Ghosn said the group had suspended taking orders for some models, this included cars made in Russia, but also those which used large quantities of imported parts. Orders already placed would be honoured, he said. Other manufacturers have been taking similar steps in response to the decline of the rouble, which has halved in value against the dollar this year. General Motors, Audi and Jaguar Land Rover also suspended deliveries to Russian dealers earlier this week. If car sales in Russia do continue to decline, it could affect British manufacturing. Nissan says about 10% of the cars made at its Sunderland plant are exported to the region. “I certainly think there could be a potential impact on Nissan’s operations in the UK,” said David Bailey, professor of industry at Aston Business School. “It sells for example the Qashqai model in large numbers in Russia.” He said it could also have an impact on the premium end of Jaguar Land Rover, “albeit far less than in the case of Nissan”

Read more …

Are we sure this is what we want?

China Offers Enhanced Cooperation as Russia Struggles (Bloomberg)

China offered enhanced economic ties with Russia at a regional summit this week as its northern neighbor struggled to contain a currency crisis. “To help counteract an economic slowdown, China is ready to provide financial aid to develop cooperation,” Premier Li Keqiang said at a Dec. 15 gathering in Astana, Kazakhstan. While the remark applied to any of the five other nations represented at the meeting of the Shanghai Cooperation Organization group, it was directed at Russia, according to a person familiar with the matter who asked not to be named as the plans weren’t public. Any rescue package for Russia would give China the opportunity of exercising the kind of great-power leadership the U.S. has demonstrated for a century — sustaining other economies with its superior financial resources.

President Xi Jinping last month called for China to adopt “big-country diplomacy” as he laid out goals for elevating his nation’s status. “If the Kremlin decides to seek assistance from Beijing, it’s very unlikely for the Xi leadership to turn it down,” said Cheng Yijun, senior researcher at the Chinese Academy of Social Sciences in Beijing. “This would be a perfect opportunity to demonstrate China is a friend indeed, and also its big power status.” Russia isn’t in talks with China about any financial aid, said Dmitry Peskov, a spokesman for President Vladimir Putin. He said he didn’t know if China is preparing to offer aid. China’s Foreign Ministry, asked about assisting Russia, said the country is ready to work with all members of the SCO group to strengthen economic cooperation.

One-time Cold War ally China already proved a help to its neighbor embroiled in tensions with the U.S. and European Union earlier this year, signing a three-decade, $400 billion deal to buy Russian gas. Seeking China’s support is one of Russia’s most realistic options, the state-run Chinese newspaper Global Times wrote in a Dec. 17 editorial. A decision on whether to use some of its windfall gains from falling oil prices to aid Russia would hinge on whether Putin’s government is willing to ask for assistance, said Cheng, who is also a research fellow at the Development Research Center, which is a unit of the State Council, or cabinet.

Read more …

America’s money comes home.

Dollar Resumes Climb as Yellen Signals 2015 Interest-Rate Rise (Bloomberg)

A gauge of the dollar rose for the eighth time in nine weeks after Federal Reserve Chair Janet Yellen signaled that the central bank is poised to increase interest rates next year starting as early as April. The greenback headed for gains this year against all except one of its 31 major peers, a feat it hasn’t accomplished since 1997, as Yellen said the impact of Russian turmoil on the U.S. economy is small. Hungary’s forint and the Polish zloty sank on concern the economic crisis that has driven the ruble down 44% this year will spread. The Swiss franc weakened the most in two months versus the euro after the central bank introduced negative interest rates.

Yellen is “really trying to say there’s a lot of volatility out there, but it’s not having a dramatic impact on the outlook of U.S.,” Kevin Hebner, a foreign-exchange strategist at JPMorgan Chase & Co., said by phone yesterday in New York. The process of the market adjusting to the Fed’s rate-rise projections “is going to get the dollar appreciating, especially against the euro and yen.” Bloomberg’s gauge of the dollar rose 0.9% this week in New York to 1,125.58, the highest close since March 2009. That followed a 0.6% fall last week that snapped a seven-week rally. It has gained 10% this year.

Read more …

Yeah, why not?

UK Unions Call For North Sea Tax Breaks As Oil Slump Threatens Jobs (Guardian)

The role of the North Sea as a goldmine for future tax revenues and highly paid jobs is under threat unless something is done urgently to address a crisis triggered by plunging oil prices, the government was warned. Leading executives, politicians and union leaders said billions of pounds worth of Treasury income and 37,500 jobs were at risk and some want the tax burden to be lowered further in a bid to stimulate new activity and create longerterm fiscal revenues. Sir Ian Wood, a government adviser and former oil engineering boss, said 10% of the North Sea workforce could be in danger while Robin Allan, chairman of the independent explorers’ association Brindex, told the BBC that the industry was “close to collapse”. Jake Molloy, oil and gas organiser for the RMT union, said oil and gas companies had already started to make hundreds of redundancies, delay projects and scrap drilling contracts.

“It is not just the oil price that is a recipe for disaster, its the level of taxes. Reducing them by 2% [as in the autumn statement] is not scratching the surface given they have been earlier raised by 40%.“ Frank Doran, MP for Aberdeen North, agreed. “I think we have reached a stage in the (oil price) cycle where tax cuts have to be seriously looked at. The North Sea is one of the most expensive places in the world but it is not just about tax. I would want to see tax cuts tied to a reduction in costs through companies becoming more efficient.” The North Sea is regarded as a high tax and “mature” basin with few opportunities for making the kinds of major discoveries still available in newer areas such as Brazil, Angola or even the deep water US Gulf. The tax rate on a barrel of oil produced in the North Sea is between 60% and 80% – and the industry wants that burden reduced.

Read more …

After all, there’s already $500 billion of it.

It’s Not Easy Being Green: Fossil Fuel Subsidies Half A Trillion Dollars (CNBC)

For several years now, politicians have been pledging to cut fossil fuel subsidies and invest in green energy. Speaking at the UN Global Climate Summit in September, U.K. Prime Minister David Cameron said, “We need to give business the certainty it needs to invest in low carbon. That means fighting against the economically and environmentally perverse fossil fuel subsidies which distort free markets and rip off taxpayers.” And while politicians may be using emotive language to preach change, for some the reality is different. “Fossil fuel subsidies are enormous,” Dimitri Zenghelis, Principal Research Fellow at the London School of Economics’ Grantham Research Institute on Climate Change and the Environment, told CNBC’s Energy Future. “We’re talking about – according to both the OECD and the IEA – something like half a trillion dollars a year,” Zenghelis added.

In 2009, the G-20 group of nations made bold a commitment to “rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption.” Five years down the line, are we on the way to seeing this pledge become a reality? According to the Overseas Development Institute think-tank, which this year released a report on the subject, not really. “What our report highlighted was, specifically, this perversity about fossil fuel subsidies and the objectives that these countries have on addressing climate change,” Shelagh Whitley, Research Fellow, Climate and Environment , told Energy Future. “What they’re doing is subsidizing fossil fuels to the tune of $88 billion a year, which means that they’re completely undermining their climate change targets,” she added. According to the ODI’s report, the United States is providing $5.1 billion, “in national fossil fuel exploration subsidies each year.” The report also states that in the U.K., the figure for fossil fuel exploration subsidies is up to $1.2 billion annually.

Read more …

“if Gazprom stops the project, despite the permits, it will be considered guilty and not Bulgaria.”

Bulgaria Ready To Issue South Stream Pipeline Permits (RT)

Bulgaria is ready to issue all the necessary permits for the construction of the South Stream pipeline, according to Prime Minister Boyko Borisov. He said it will up to Gazprom whether the pipeline is built or not. Borisov said he has the full support and understanding of the European Union and that Bulgaria is not in the wrong and should not suffer financial consequences for stopping the project, the Bulgarian news agency BGNES reports. Bulgaria was set to reap $600 million per year in transit fees, and investment on the Buglarian side was estimated at €3.5-4 billion. Russia was originally planning to build a pipeline to Southern Europe to directly export gas, but EU legislation was used to continually delay the project.

On December 1 during a visit to Turkey, Putin announced the pipeline would run through Turkey to Greece, instead of Bulgaria as originally proposed. “Thus, our country is now able to fulfill its obligations on the preparatory activities, particularly for the offshore part of the pipeline, and to issue a building permit,” Borisov said. The Prime Minister added that, “if Gazprom stops the project, despite the permits, it will be considered guilty and not Bulgaria.” A Bulgarian government delegation reportedly planned to fly to Moscow this week to clarify the situation over South Stream construction.

Read more …

“.. oil-train traffic has grown to an amazing 42-times its 2009 level”

The Oil Train Glut Shows How Little The Keystone XL Pipeline Matters (Reuters)

When it comes to moving petroleum through the United States, the Keystone XL pipeline is the rock star of transportation modes, garnering an extra large share of attention from politicians, activists and the press. Just this week, Senate Majority Leader-elect Mitch McConnell announced that passage of a bill approving the pipeline will be his first order of business when the 114th Congress convenes in January. Opponents, meanwhile, point to environmental and safety concerns, often citing the adverse impact that the pipeline would have on climate change and fossil fuel dependency. But while the Keystone XL would move an estimated 830,000 barrels a day of oil over its 1200 miles from Canada to the U.S. Gulf Coast, that’s not even a rounding error in the over 2.5 million miles of pipelines that weave their way throughout the country.

And even that isn’t enough to satisfy the pulsing demand for bubbling crude. On Monday, a Reuters report by Jarrett Renshaw highlighted the extent to which oil-carrying freight trains increasingly clog the nation’s rail lines, much to the concern of safety-minded local officials–especially after The devastating July train derailment in the Quebec town of Lac-Megantic–and sometimes at the expense of taxpayers. According to the report, oil-train traffic has grown to an amazing 42-times its 2009 level, and while the railroad industry spends $24 billion per year building infrastructure, $84.2 million in taxpayer money has been written into 10 federal and state grants that either have been approved or are seeking approval.

Read more …

80HD

2014: The Year We Piled Up Risks Like A Global Game Of Tetris (David Collum)

Mavens in the US blamed bad weather for their complete inability to hit the dartboard. Oddly, German pundits blamed their joblessness on good weather, whereas Goldman suggested that the Germans actually have strong growth . . . because of the weather.Fed governor Plosser says the economy is great “despite the effects of severe weather.” The CEO of Walmart doubts the weather argument altogether, instead suggesting that everybody is unemployed and broke. Charles Dudley Warner insightfully noted, “Everybody complains about the weather, but nobody does anything about it.” I suspect the vital signs of the economy are stable, albeit with help from a high-capacity monetary respirator.

The weather is whacking California. One of our breadbaskets is going bone dry owing to a multiyear, high-sigma (500-year) drought. Analogies to the Dust Bowl are inescapable. Some towns are shipping in all water by truck. California will soon run out of Nevada and Oregon’s water. One orange grower bulldozed 400 acres of trees (why?), suggesting that “if this persists in the next year, the devastation . . . will be biblical.” California halted fracking because it may be contaminating aquifers. (I must confess that of all the risks of fracking, destroying a big aquifer tops the list.) Of course, housing is considered central to our economy. Maybe I have Assburger’s syndrome or 80HD, but I go nuts trying to figure out whether housing is strong or weak. Choose an indicator and make any case you want. Owens Corning reported a weakness in roofing materials: the corporate numbers don’t lie. Just kidding. Sure they do.)

Some plots show existing home sales rising; others show existing home purchases rising. Dudes: they’re the same numbers—a kind of housing velocity that may offer evidence that the market is loosening finally. That said, 20 million homeowners are still underwater, rendering them professionally immobile. A nice list of the riskiest real estate markets in country shows Hartford, Connecticut, leading the pack with a potential downside of 35%. (Canada and England now make us look like pikers, however, given that their busts remain prospective.) And remember that iconic plot of mortgage resets foreshadowing (to those paying attention) the ’08–’09 crisis? Well the resets are back – $200 billion worth of resetting home equity lines of credit (HELOCs). When the Fed finally normalizes rates, price discovery is gonna be a real bitch. The Fed never had an exit strategy.

Read more …

So sad.

Wall Street Firms Endure Lost Decade After Goldman Peak in 2007 (Bloomberg)

Wall Street firms have failed to keep up with a stock market that’s boomed for more than five years, losing ground to industries including technology and health care. There were just 32 U.S. financial firms among the world’s largest 500 companies by market capitalization when trading closed yesterday in New York. That compares with 41 at the end of 2006, the last full year before the credit crisis. Some companies that remain on the list, like Citigroup and AIG) have shrunk to a fraction of the size of tech giants like Apple and Google. Goldman Sachs has a lower market value than its peak in 2007. While Google and Cupertino, California-based Apple have been adding new products and customers since then, Wall Street lost trading revenue and spent much of that time repaying bailouts, settling government probes or divesting assets under pressure from federal watchdogs.

“The culture in the large banks needed to be corrected,” Charles Peabody, a banking analyst at Portales Partners in New York, said in a phone interview. “That is a good thing. The extent of this adjustment process has been a lot more drawn out than any of us anticipated, and that’s not been a good thing.” Goldman Sachs went public in 1999, the same year that President Bill Clinton signed into law the repeal of barriers between commercial and investment banking. Market capitalization as of Dec. 18 dropped about 21% from the peak in October 2007 of more than $105 billion. Financial firms that fell off the list include Lehman, which filed for bankruptcy protection in 2008, and Merrill Lynch, which struck a deal the same year to sell itself to Bank of America Corp. The U.S. group now makes up about 8.1% of the market value of the world’s largest 500 companies, compared with 9.7% at the end of 2006.

Read more …

I think I’ve been missing Meredith.

Meredith Whitney’s Hedge Fund Said to Be in Turmoil (Bloomberg)

The hedge fund Meredith Whitney started last year after she became one of Wall Street’s best-known analysts is in turmoil. Her biggest investor demanded his money back and two executives left in the past month, according to a person with knowledge of her firm. A fund connected to billionaire Michael Platt’s BlueCrest Capital Management asked to redeem its investment at least twice, according to the person, who asked for anonymity to describe the private exchanges. Her Kenbelle Capital LP started trading in November 2013 with about $50 million from BlueCrest partners and other investors, according to a fund presentation last year.

Stephen Schwartz, a co-founder and portfolio manager, left last month, his LinkedIn profile shows. Andrew Turchin, the chief financial officer, exited as well, the person with knowledge of the firm said. Chief Administrative Officer Brittani Caetano joined another hedge fund this month, according to LinkedIn. Whitney had aimed for returns of 12% to 17%, according to the fund presentation. Instead, her American Revival Fund LP lost 4.7% through the first half of the year, an investor letter this July showed. “Meredith is a brilliant woman and somebody who is indefatigable in her will to succeed and to win,” her attorney, Stanley Arkin, said today in a phone call. Colleagues left by “mutual agreement,” he added. BlueCrest’s redemption request violates their agreement and “had to do with the way the market is moving,” he said.

Read more …

The sanctions cost Europe too much money; they can’t be maintained.

France Risks EU Split Over Russian Sanctions Relief (Bloomberg)

French President Francois Hollande has floated the idea of rolling back EU sanctions against Russia, provided that Russia takes steps to remove troops from Crimea and Ukraine. Bloomberg’s Hans Nichols reports on “Bloomberg Surveillance.” Europe stumbled into a debate over the end of sanctions on the economically distressed Russia after French President Francois Hollande became the first major leader to dangle the prospect of easing the curbs. Hollande’s appeal at a European Union summit yesterday was a reminder that the bans on financing of major Russian banks and the export of energy-exploration equipment will lapse next July unless renewed unanimously by the 28 EU governments.

Hollande urged the EU to offer early “de-escalation” to reward expected peace overtures by Russian President Vladimir Putin in eastern Ukraine, while others including German Chancellor Angela Merkel put off sanctions relief until a settlement emerges. “It will be very difficult to retain that unity among member states” when the sanctions are up for renewal, said Steven Blockmans, an analyst at the Centre for European Policy Studies in Brussels. “We might find the sanctions fizzling out when it comes to summer next year.” European leaders papered over the controversy at the first summit chaired by new EU President Donald Tusk, who as Poland’s prime minister had spearheaded moves to punish Russia for meddling with Ukraine.

A communique said the bloc “will stay the course” and maintained the threat of “further steps if necessary.” As with the response to the euro-zone debt crisis, a consensus on how to deal with Russia’s annexation of Ukraine’s Crimean peninsula and military support for eastern Ukrainian separatists was slow to emerge. The EU halted trade and visa negotiations with Russia and blacklisted 18 members of Ukraine’s former pro-Russian regime in March. It took the downing of a Malaysian passenger jet over eastern Ukraine in July to prompt wider economic curbs. Those steps and another set of economic restrictions imposed in September will run out in July 2015. They are locked in by the EU’s unanimity principle: it would take all 28 governments to scrap them earlier or prolong them.

Read more …

Huh, what? An arrest?

First Arrest In UK Foreign Exchange Market Rigging Investigation (Guardian)

A City banker has been arrested by the Serious Fraud Office in connection with its investigation into the rigging of the £3.5 trillion-a-day foreign exchange markets. The banker is the first person to be detained in connection with the global foreign exchange rate-rigging scandal and was held following a dawn raid on his Essex home. “In connection with a Serious Fraud Office investigation, we can confirm one man was arrested in Billericay on 19 December,” an SFO spokesman said. “ Officers from the City of London Police assisted with the operation.” The arrest follows a record-breaking £2bn fine imposed on five global banks for their role in the scandal.

About 30 bankers have been sacked or suspended but until now no arrests have been made. Bankers were found by the UK’s City regulator, the Financial Conduct Authority (FCA), to have colluded to fix rates between 2008 and October 2013. Bankers using online chatrooms – where they called themselves the “A-Team” , “The Three Musketeers” and “The Players” – colluded to fix rates to make millions for their employers and collect big bonuses for themselves, according to transcripts released by the regulator. The conversations between the bankers, some of whom used the name “1 team, 1 dream”, recorded one saying: “How can I make free money with no fcking [sic] heads up.”

Another message, sent after Swiss bank UBS made £322,000 in a single deal, read: “He’s sat back in his chair, feet on desk, announcing, that’s why I got the bonus pool. Made most people’s year.” In other messages traders made remarks such as “nice job mate” and “yeah baby” as they discussed foreign exchange rates. The FCA said it had found a “free for all culture” on trading floors that allowed the market to be rigged for such a long time. The fines, which were far bigger than those handed out for Libor rigging, were imposed on Royal Bank of Scotland, HSBC, Citibank, JP Morgan and UBS.

Read more …

And Cuba is now our friend. Folly of the day.

Obama Authorizes ‘Economic Embargo’ On Russia’s Crimea (RT)

US President Barack Obama has authorized sanctions against individuals and entities operating in Russia’s Crimean peninsula, according to the White House statement. Obama has issued an executive order that “prohibits the export of goods, technology, or services to Crimea and prohibits the import of goods, technology, or services from Crimea, as well as new investments in Crimea,” according to the statement. The executive order also authorizes the Secretary of the Treasury to impose sanctions on “individuals and entities operating in Crimea.” The move comes just a day after the European Union introduced similar action against the Russian region of Crimea and Sevastopol, accepted into the Russian Federation following the referendum last March.

The United States did not recognize the reunification and has been calling on Russia to “end its occupation and attempted annexation of Crimea.” “We will continue to review and calibrate our sanctions, in close coordination with our international partners, to respond to Russia’s actions,” Obama’s statement reads. The bill that opened way for further sanctions against Russian economy – dubbed Ukraine Freedom Support Act of 2014 – was signed on Thursday. However Obama was hesitant to introduce any new measures until they are synchronized with European partners.

Read more …

Should reveal a lot.

Antarctic Photo Science Archive Unlocked (BBC)

Aerial photos from the 1940s and 1950s are being used to probe the climate history of the Antarctic Peninsula. UK scientists are comparing the images with newly acquired data sets to assess the changes that have occurred in some of the region’s 400-plus glaciers. The old and modern information has to be very carefully aligned if it is to show up any differences reliably. And that is a big challenge when snow and ice obscure ground features that might otherwise act as visual anchors. But the researchers from the British Antarctic Survey (BAS), Newcastle University and University of Gloucestershire believe they are cracking the problem. “We want to use these pictures to work out volume and mass-balance changes in the glaciers through time,” explained Dr Lucy Clarke from the University of Gloucestershire. “There are tens of thousands of these historical images, held by the British Antarctic Survey and the US Geological Survey.

“So, they’ve long been around, but it’s only now that we’ve had the capability to extract the 3D data from them.” Dr Clarke has been presenting the work at this week’s American Geophysical Union Fall Meeting in San Francisco. The Antarctic Peninsula – the northernmost extent of the White Continent which stretches up towards South America – has experienced quite dramatic warming in recent decades. The fronts of many of its glaciers have quite obviously retreated, and several of the marine-terminating ice streams have even seen their floating shelves disintegrate. But getting at the volume and mass changes in the glaciers has been a thorny issue. Satellites are used to track such trends today but their record spans only a few decades. The archive of aerial photos, on the other hand, goes back to the 1940s, and it represents an extraordinary account of the pioneering days of polar exploration.

Read more …

“Europe today has twice as many wolves as the United States even though its territory is half the size of North America and its population twice as dense.”

Wolves, Bears And Lynx ‘Now Plentiful In Europe’ (AFP)

After nearing extinction in Europe in the early 20th century because of hunting and shrinking habitats, large carnivores like the gray wolf, brown bear, lynx and wolverine are thriving once more. So say the results of a study carried out across the continent, except Russia and Belarus, by an international team whose report was published Thursday in the US journal Science. “The total area with a permanent presence of at least one large carnivore species in Europe covers 1,529,800 square kilometers (roughly one-third of mainland Europe), and the area of occasional presence is expanding,” the authors wrote. The study involved 76 scientists examining 26 countries. Brown bears were the most numerous of the four species, with nearly 17,000 specimens and a permanent presence in 22 countries. The gray wolf came next, with a population of more than 12,000 scattered across 28 countries, followed by the Eurasian lynx, 9,000 of which were to be found in 23 countries.

Wolverines were the scarcest of the four, with an estimated 1,250 of the cold-climate creatures found in three Nordic countries: Norway, Finland and Sweden. Although most populations of these large predators have been on the rise or stable in recent years, some are on the verge of extinction, such as the gray wolves of Spain’s Sierra Morena region, the Pyrenees bears or the lynx found in the Vosges region of France. All four species of carnivores live and reproduce mostly outside protected areas, such as national parks, in human-dominated landscapes. Their numbers suggest that they can coexist with humans in areas dominated by the latter, testifying to the success of European Union conservation policies, the authors wrote. For instance, Europe today has twice as many wolves as the United States even though its territory is half the size of North America and its population twice as dense.

“Our results are not the first to reveal that large carnivores can coexist with people but they show that the land-sharing model for large carnivores (coexistence model) can be successful on a continental scale,” the study stated. In the US, by contrast, protected species often live far from human-inhabited ones, such as wolves of Yellowstone National Park. The researchers said several factors explained the vitality of Europe’s populations of large carnivores, including the replenishing of stocks of prey such as deer and wild boars, which provides them with ample food. They also cited an exodus of people from rural areas in the 20th century, which allowed wolves, bears and lynxes to expand their territories. But the report mainly attributed the success to laws aimed at preserving species of wild animals and their habitats, such as the Berne convention of 1979.

Read more …

Get a warbler.

Birds ‘Heard Tornadoes Coming’ And Fled One Day Ahead (BBC)

US scientists say tracking data shows that five golden-winged warblers “evacuated” their nesting site one day before the April 2014 tornado outbreak. Geolocators showed the birds left the Appalachians and flew 700km (400 miles) south to the Gulf of Mexico. The next day, devastating storms swept across the south and central US. Writing in the journal Current Biology, ecologists suggest these birds – and others – may sense such extreme events with their keen low-frequency hearing. Remarkably, the warblers had completed their seasonal migration just days earlier, settling down to nest after a 5,000km (3,100 mile) journey from Colombia. Dr Henry Streby, from the University of California, Berkeley, said he initially set out to see if tracking the warblers was even possible.

“This was just a pilot season for a larger study that we’re about to start,” Dr Streby told the BBC.”These are very tiny songbirds – they weigh about nine grams. “The fact that they came back with the geolocators was supposed to be the great success of this season. Then this happened!” Working with colleagues from the Universities of Tennessee and Minnesota, Dr Streby tagged 20 golden-winged warblers in May 2013, in the Cumberland Mountains of north-eastern Tennessee. The birds nest and breed in this region every summer, and can be spotted around the Great Lakes and the Appalachian Mountains. After disappearing to Colombia for the winter, 10 of the tagged warblers returned in April 2014. The team was in the field observing them when they received advance warning of the tornadoes.

“We evacuated ourselves to the waffle house in Caryville, Tennessee, for the one day that the storm was really bad,” Dr Streby said. After the storm had blown over, the team recaptured five of the warblers and removed the geolocators. These are tiny devices weighing about half a gram, which measure light levels. Based on the timing and length of the days they record, these gadgets allow scientists to calculate and track the approximate location of migratory birds. In this case, all five indicated that the birds had taken unprecedented evasive action, beginning one to two days ahead of the storm’s arrival. “The warblers in our study flew at least 1,500km (932 miles) in total,” Dr Streby said. They escaped just south of the tornadoes’ path – and then went straight home again. By 2 May, all five were back in their nesting area.

Read more …

Word.

Dick Cheney Should Be In Prison, Not On ‘Meet The Press’: Greenwald (RT)

Journalist Glenn Greenwald said Dick Cheney is able to brag about the success of torture on weekend news shows because the Obama administration has decided to shield torturers rather than prosecute them. In a wide ranging interview about the CIA torture report, prospects for the 2016 presidential race, US-Cuba relations and the Sony hack, Greenwald told HuffPost Live that the discussion about the torture report is distorted since we are not hearing from the victims of torture themselves. In an interview on ‘Meet the Press,’ former Vice President Dick Cheney claimed that torture “worked” and announced he would “do it again in a minute” if given the opportunity. In response, Greenwald said that whether torture worked or not is completely irrelevant, and no one should be interested in that because everyone who tortures claims they do it for a good reason even though it has been banned under international treaties and laws. Greenwald said it was former Republican President Ronald Reagan who championed the idea that torture was never justifiable.

Reagan signed the international Convention against Torture in 1988, which became the primary international foundation of anti-torture law. Reagan said at the time the treaty would clearly express the United States’ opposition to torture, “an abhorrent practice unfortunately prevalent in the world today.” Greenwald said, “The reason why Dick Cheney is able to go on ‘Meet the Press’ instead of where he should be – which is in a dock in the Hague or in a federal prison – is because President Obama and his administration made the decision not to prosecute any of the people who implemented this torture regime despite the fact that it was illegal and criminal.” He added, “When you send the signal, like the Obama administration did, that torture is not a crime to be punished – it is just a policy dispute to argue about on Sunday shows – of course it emboldens torturers, like Dick Cheney, to go around on Sunday shows and say, ‘What I did was absolutely right.’”

The journalist said that when Obama was running for president in 2007/08, he was asked if there should be legal accountability for people who committed war crimes. He said it was something for the Attorney General to decide and affirm this principle, but even before Obama was inaugurated he began walking back the idea. Pointing to a 2009 New York Times article, Greenwald said one reason why was that presidents know if they protect their predecessor and shield them from legal accountability for their crimes, they, too, will be shielded by successive administrations. “Which is another way of saying the most powerful officials in the United States have exempted themselves from the rule of law,” he added. “They are able to commit not just ordinary crimes but the most egregious crimes with the assurance that unlike ordinary citizens they will not be held accountable under the law. That is about as tyrannical and dangers as a framework we could have.”

Read more …

Deep.

Will Religion Ever Disappear? (BBC)

A growing number of people, millions worldwide, say they believe that life definitively ends at death – that there is no God, no afterlife and no divine plan. And it’s an outlook that could be gaining momentum – despite its lack of cheer. In some countries, openly acknowledged atheism has never been more popular. “There’s absolutely more atheists around today than ever before, both in sheer numbers and as a%age of humanity,” says Phil Zuckerman, a professor of sociology and secular studies at Pitzer College in Claremont, California, and author of Living the Secular Life. According to a Gallup International survey of more than 50,000 people in 57 countries, the number of individuals claiming to be religious fell from 77% to 68% between 2005 and 2011, while those who self-identified as atheist rose by 3% – bringing the world’s estimated proportion of adamant non-believers to 13%.

While atheists certainly are not the majority, could it be that these figures are a harbinger of things to come? Assuming global trends continue might religion someday disappear entirely? It’s impossible to predict the future, but examining what we know about religion – including why it evolved in the first place, and why some people chose to believe in it and others abandon it – can hint at how our relationship with the divine might play out in decades or centuries to come. Scholars are still trying to tease out the complex factors that drive an individual or a nation toward atheism, but there are a few commonalities. Part of religion’s appeal is that it offers security in an uncertain world. So not surprisingly, nations that report the highest rates of atheism tend to be those that provide their citizens with relatively high economic, political and existential stability. “Security in society seems to diminish religious belief,” Zuckerman says.

Capitalism, access to technology and education also seems to correlate with a corrosion of religiosity in some populations, he adds. Japan, the UK, Canada, South Korea, the Netherlands, the Czech Republic, Estonia, Germany, France and Uruguay (where the majority of citizens have European roots) are all places where religion was important just a century or so ago, but that now report some of the lowest belief rates in the world. These countries feature strong educational and social security systems, low inequality and are all relatively wealthy. “Basically, people are less scared about what might befall them,” says Quentin Atkinson, a psychologist at the University of Auckland, New Zealand. Yet decline in belief seems to be occurring across the board, including in places that are still strongly religious, such as Brazil, Jamaica and Ireland. “Very few societies are more religious today than they were 40 or 50 years ago,” Zuckerman says. “The only exception might be Iran, but that’s tricky because secular people might be hiding their beliefs.”

Read more …


Apr 082014
 
 April 8, 2014  Posted by at 3:30 pm Finance Tagged with: , , , ,  


MGM Mickey Rooney and Spencer Tracy in the film Riffraff 1936

Well, that’s great news, isn’t it? Blackwater is back. After a first wave of negative publicity over its involvement in Iraq, a major PR hush-hush campaign led to a series of mergers, takeovers and name changes; first, in 2009, it became Xe Services, only to turn into Academi in 2011. What a brilliant moniker for a bunch of modern day mercenaries that is. Who would expect a ruthless killing machine behind a name like that?

Russia quite matter of factly mentioned that it doesn’t appreciate the presence of 150 mercenaries from Academi affiliate Greystone in Ukraine, wearing, no less, Ukrainian special task police uniforms, where the soldiers of fortune are apparently being deployed, by US/EU/Ukraine, to stifle the protests in eastern cities like Donetsk and Kharkiv. Does make you wonder if the US would be just as matter of factly if a heavily armed Navy Seal style Russian or Chinese private army were active in Mexico or Canada.

The Russians are very aware of what Blackwater did in Iraq and Afghanistan, far more so than we as the public are. And even we, with the limited information we got, didn’t like what we saw one bit. Of course Blackwater wasn’t the only private contractor the US paid vast amounts of money to operate with impunity in Iraq and Afghanistan. It merely turned into the symbol of everything that’s wrong with hiring private entities to do, again: with impunity, that part of an army’s work that’s too dirty to live up to daylight exposure.

This next chapter in the sordid tale of one of the frighteningly deep black crevices in recent American history comes just as the US Congress declassified a report on what the perpetrators label ‘enhanced interrogation’ and everybody else says is called torture. And that brings back to mind the whole story of the “job well done” in Iraq by Halliburton, the company with such strong links to Dick Cheney, and it brings back Cheney and Rumsfeld to the forefront of news media, albeit only for a day or so, after which they can go back to bragging at private cocktail and hunting parties about their achievements in public service. Where’s Parkinson when you need him?

Mind you, both of these career psychopaths had some 50 years to refine their warped notions of what the nation should stand for while riding the revolving door train known as Capitol Hill. And when they finally got to step up to the big jobs, they weren’t going to be held back by such ideas as the ones they themselves were the first to loudly proclaim in front of every camera they could find: promoting democracy, freeing foreign nations from dictators, and bringing prosperity to the whole world. No, Rummy and Cheney had bigger things on their mind: there were huge power games to be played, and these came with a great bonus: you got to kill and torture people, and if you played your cards well, be praised for it.

Jon Stewart summarized it very eloquently last night: America has a history of doing a tremendous amount of things ‘we don’t do’. But America does do these things, and when a neutral observer gets to write the history books, the picture that emerges will be very different from the one the nation itself likes to propagate. And things don’t seem to get any better, either. While elite Special Ops forces were deployed in some 60 countries when Rummy and Cheney were still in charge, today that number has risen to 134. And that’s without the likes of Blackwater being added to the tally. Of which, incidentally, in its present Academi shape, Rummy/Cheney chum John Ashcroft, the Attorney General who forced his people into elaborate morning prayer sessions every day, is a key board member.

Here’s what Russian press agency ITAR-TASS said this morning:

Russia Urges Ukraine To Halt Military Preparations To Avert Civil War

The Russian Foreign Ministry urged Ukraine to halt any interior military preparations, which could instigate a civil war in the country, the ministry was quoted as saying on its Facebook.com account.

According to numerous reports, Ukraine is redeploying special task police units from all over the country to the southeastern regions of Ukraine in a bid to thwart anti-government protests, which flared up over the weekend. “According to our information, units of the Interior troops and Ukraine’s national guards as well as militants from the illegal armed formation ‘The Right Sector’ are being amassed in the southeastern parts of Ukraine and in the city of Donetsk,” the ministry said.

“We are particularly concerned that the operation involves some 150 American mercenaries from a private company Greystone Ltd., dressed in the uniform of the [Ukrainian] special task police unit Sokol,” the ministry said. “Organizers and participants of such incitement are assuming a huge responsibility for threatening upon the rights, freedoms and lives of Ukrainian citizens as well as the stability of Ukraine,” the ministry added.

Ukraine makes no effort to try and deny Blackwater’s presence. Which points to the country’s conviction, along with the US and EU, that the portrayal of Putin and all Russians as blood thirsty land hungry bogeymen is working in the west:

Ukrainian parliament-appointed Interior Minister Arsen Avakov confirmed late on Monday night that special task police units have been redeployed to the southern and eastern parts of the country from other regions of Ukraine. “These special task units are ready to solve immediate tasks without paying attention to local peculiarities,” Avakov said. “I call on all hotheads to refrain from criticism and panic sentiments and help the police to take the situation under control.”

As for why the western “coalition” has deemed in necessary to engage Blackwater troops, the answer is the Ukrainian army and police force refuse to do the bidding of the new Kiev government under “Yats”:

The current situation particularly in the city of Kharkiv remained tense, but under control, Avakov said, adding that the majority of policemen failed to comply with their duties. “I had an opportunity today to evaluate the police work in Kharkiv and have to admit that the majority of the Interior Ministry’s law enforcers failed to appropriately fulfil their duties,” he said adding that the personnel reshuffle would follow.

A government that doesn’t have the support of either its army or its police force. That’s never a good sign. Moreover, a fight broke out in the Ukraine parliament today when communist MP Petro Symonenko accused the sitting government, and the right wing Svoboda party in particular, of instigating fights with, intimidating and arresting peaceful protesters. Good thing “Yats” brought in Blackwater when he did, right?

Americans really need to ask themselves if they want Blackwater/Academi to represent them around the world, in the same spirit the Cheney/Rummy/Halliburton interests did. When you ponder these things, it becomes hilariously ridiculous to claim that America stands for promoting democracy, or human rights, or any of the lofty goals people like to associate with the country, and the Constitution it was founded upon. It may not be too late yet to get that spirit back, but it’s certainly getting late.

S&P Tumbles From Record-High To Red Year-To-Date In 2 Days (Zero Hedge)

Well that didn’t take long… Friday morning’s post-payrolls record all-time high in the S&P 500 (because, as Steve Liesman said, “he can’t find any reason to be bearish about jobs data”) has rapidly collapsed to being negative year-to-date (and worst start to a year since 2009’s crash). Only the Transports remain green in 2014, with the Dow, Nasdaq (worst start to a year since 2008), and Russell all coincidentally gathered around a 2% negative return YTD.

But April is the best seasonal month in the year? Of course USDJPY is about to test 103 again so prepare for a bounce…

Biotechs are back to red after bouncing to various VWAPs (and Friday’s major volume plunge VWAP levels)… and breaking back below its 200DMA at $132

Read more …

Will Fed tapering lead to Asian countries hoarding US dollars? How could it not?

The Coming Currency Clash in Asia (WSJ)

Emerging markets realize that, no matter how sound their policies may be, they are subject to whiplash from the policies of advanced economy central banks. Top G-20 officials spoke loftily of central bank coordination at their recent summit in Sydney. But in reality, there is no mechanism to make central banks take measures that would contravene their national mandates for the benefit of other countries. So it’s not irrational for emerging-economy policy makers to conclude that the best way to insure themselves against a future crisis is to act today in a way that would encourage developed-economy leaders to help. And a reading of the criteria the Fed used when parceling out international assistance suggests dollar reserve accumulation is the best way to force the Fed to take notice.

The key question now is how much of a reserve is enough. Conventional views of reserve adequacy—enough to cover short-term external debt or six months of imports—are no longer relevant. During the worst of the crisis, some emerging markets with massive reserves lost nearly a third of them in less than a year. What’s for sure is that once speculators smell blood, they attack a currency relentlessly and reserves can evaporate quickly. The only way to protect a currency is to have enough reserves to deter speculators. No one knows exactly how much that will take. So the motto of central bankers has become more is better.

Today, while the Fed continues to taper, private capital has begun to flow back to emerging markets. Even economies such as India and Indonesia that were battered by capital flight last year have benefited. The Bank of Japan recently signaled it was getting ready to open the monetary spigots wider. The People’s Bank of China has taken forceful steps to prevent the yuan from appreciating even as it widened the currency’s trading band. These trends only add to the pressure on other Asian emerging economies to hold down the value of their currencies and accumulate reserves. All told, the events of the past year presage a return to uphill flows of capital and rising currency tensions. It certainly feels like monetary déjà vu all over again.

Read more …

Entertainment!

Accounting Trick Turns UK Into Nation Of Savers (FT)

A radical overhaul of the national accounts this autumn will double the official measure of household savings, presenting Britons as a nation of unexpected prudence and undercutting their widely held reputation for profligacy. For the first time in 15 years, the Office for National Statistics is preparing to rip up the way it measures Britain’s economy, with the new techniques showing a huge increase in the size of the economy, a higher level of public debt and a much increased savings ratio. There is also a good chance that the statisticians will significantly revise up growth recorded in the economy in 2012 and last year.

The reforms will have the potential both to overturn Britain’s reputation as a spendthrift nation and significantly improve the poor productivity performance of the past few years. The ONS will introduce new global accounting standards to gross domestic product and related measures in September, following similar changes already introduced in the US, Canada, Australia. Under the new system of accounts, research and development spending will count towards GDP rather than being seen as a cost of production, and building aircraft carriers and other weapons of war will also add to the size of the economy. The ONS said the change would add between 2.5% and 5% to the level of GDP, adding £40bn to £75bn to the total.

One of the largest changes, announced by ONS officials on Monday, arises from how savings are measured. From now on, the official figures will count future pension rights as if they were present income. With Britain one of the few countries to have a large funded defined-benefit pension system, the change will significantly raise measured household incomes, thereby increasing the savings ratio. Officials said the savings ratio would rise “by around 5 percentage points”, practically doubling the current 5.1% and putting it around 10%, far closer to those seen in other European countries.

Read more …

And more entertainment.

Nigeria Just Doubled The Size Of Its Economy With The Stroke Of A Pen (Simon Black)

Over the weekend, Nigeria’s government made an accounting adjustment in how it calculates its GDP statistics. By changing the base-year in GDP calculations from 1990 to 2010, Nigeria increased the reported size of its economy by 89% over the weekend. So with a stroke of a pen, the West African nation leapfrogged South Africa to become the continent’s largest economy. And in doing so the country’s debt-to-GDP ratio fell below 20%. The ratio of bad loans in the banking system when compared to the overall size of the economy also dramatically declined in proportion.

The same thing happened in Poland last year when the government there made a grab for private pensions, then counted those new assets against government debt. It was just another accounting scam. But it dramatically lowered Poland’s debt-to-GDP ratio on paper, even though the government had not actually gotten any ‘richer’. Just hours ago, the European Central Bank released its 2013 annual report, showing a massive 44% surge in profits. Diving into the numbers, though, it turns out that most of the ECB’s profits come from funny accounting tricks—revaluing a permanent swap line they have with the Federal Reserve, and moving funds from the “risk provision” column into the profit column.

I’m also reminded of the Federal Reserve’s own admission that they had $50+ billion in ‘unrealized losses’ due to the erosion of their portfolio of US Treasuries. This is almost as much as their entire capital reserve… meaning that the Fed is practically insolvent by its own admission. Not to worry, though. The Fed gets to employ its own accounting tricks to make these losses disappear, marking the assets on the balance sheet at their much higher ‘book value’, rather than the much lower ‘market value’. Of course, the US government does exactly the same thing… often conveniently leaving out huge portions of its total debt such as the non-marketable securities it owes to the Social Security trust funds.

All of this really just goes to show how absurd it is to rely on these numbers conjured by politicians and central bankers. Sure, the statistics are computed to multiple decimal places and wrapped up in lengthy reports. But there’s not a shred of truth to any of this false precision. It’s all about maintaining a false sense of confidence at all costs, no matter what lies they have to fabricate, no matter what fraud they have to commit.

Read more …

Russia Warns Use Of Force Could Tip Ukraine Into Civil War (AFP)

Russia on Tuesday warned Kiev that any use of force in Ukraine’s east, where pro-Kremlin militants have seized government buildings in several cities, could tip the country into civil war. “We call for the immediate cessation of any military preparations, which are fraught with the risk of unleashing civil war,” the Russian foreign ministry said in a statement. The warning came after pro-Russia activists seized state buildings in the eastern cities of Kharkiv, Lugansk and Donetsk, where they also declared independence and vowed to vote on joining Russia.

Kiev accused Russia of fomenting the unrest and Washington warned the Kremlin to stop efforts to “destabilise Ukraine,” accusations that Moscow brushed off. The Russian foreign ministry said on Tuesday it had information that Ukraine was sending internal security forces and volunteers from its National Guard including fighters from Pravy Sektor (Right Sector) ultra-nationalist group, to southeastern Ukraine including Donetsk.

It also alleged that Ukraine was deploying US private security operatives dressed as Ukrainian special forces. It said the mercenaries came from the Greystone Ltd security firm. It said Ukraine had tasked the forces with “suppression using force of the residents of the southeast of the country against the policies of the current Kiev authorities.” “The organisers and participants in this provocation are taking on a huge responsibility for creating a threat to the rights, freedoms and lives of peaceful Ukrainian citizens and to the stability of the Ukrainian state” it warned.

The ministry released the statement on its website following talks late Monday between Russian Foreign Minister Sergei Lavrov and his Ukrainian counterpart Andriy Deshchytsya. The ministry said in a statement that Lavrov stressed the “necessity of a respectful attitude to the aspirations of the inhabitants of southeastern Ukraine.” Lavrov said Kiev must not allow “attempts to react by force to their legal demands for their linguistic, cultural and social-economic rights.” Lavrov called for Kiev to take “urgent measures” to organise a national dialogue, saying it was ready to “support this process along with the European Union and the United States.”

Read more …

Russia Accuses US Mercenaries Of Inciting Civil War In Ukraine (Zero Hedge)

In response to claims by the Ukraine government (and the west) that Russia provoking trouble in Eastern Europe – with The White House’s Jary Carney even suggesting that pro-Russia demonstrators were paid – Russia’s foreign ministry has responded. Posting via their Facebook page, Russia urged Ukraine to halt any interior military preparations which could instigate a civil war. But the kicker, for which we anxiously await a rebuttal, is Russia’s comment that they “are particularly concerned that the operation involves some 150 American mercenaries.”

The US administration perspective… (via WaPo)

In Washington, the Obama administration expressed deep skepticism that the scattered uprisings and building takeovers in cities such as Donetsk and Kharkiv have been spontaneous. “There is strong evidence suggesting some of these demonstrators were paid,” said Jay Carney, the White House spokesman. “If Russia moves into eastern Ukraine, either overtly or covertly, this would be a very serious escalation,” Carney said.

The Ukrainian perspective…

The Ukrainian government dispatched its highest-level police and security officials to the region Monday in an effort to put down the separatist agitation. Kiev is confronting an attempt to “destabilize the situation,” Prime Minister Arseniy Yatsenyuk said at an emergency cabinet meeting Monday. “The plan is for foreign troops to cross the border and seize the country’s territory, which we will not allow.”

And the Russian perspective, as ITAR-TASS reports,

The Russian Foreign Ministry urged Ukraine to halt any interior military preparations, which could instigate a civil war in the country, the ministry was quoted as saying on its Facebook.com account. “According to our information, units of the Interior troops and Ukraine’s national guards as well as militants from the illegal armed formation ‘The Right Sector’ are being amassed in the southeastern parts of Ukraine and in the city of Donetsk,” the ministry said. “We are particularly concerned that the operation involves some 150 American mercenaries from a private company Greystone Ltd., dressed in the uniform of the [Ukrainian] special task police unit Sokol,” the ministry said.

Read more …

Still the only sane voice in the US when it comes to Ukraine. And still utterly silenced in US media.

Ron Paul: ‘Ukraine Needs Economic Freedom, Not Foreign Aid’ (RT)

Ukraine needs a new economic system but not just a bailout program that would impoverish people rather than help them, former US Congressman and presidential candidate Ron Paul told RT. “If you just bail them out, like we just bailed out all our rich people during 2008-09, the system continues, but the poor get poorer and the middle class keeps shrinking,” he said on RT’s SophieCo show. Ron Paul believes that the Ukrainian people need “freedom, and the concept of property rights,” – they also need to work hard, have an incentive system and get rid of central economic planning, and “they would recover.”

“I don’t think a penny is going to go to the people; they’re going to get a freeze in their wages, and they are going to have higher prices for their fuel and their taxes are going to go up. So there is no benefit,” Paul added. He claims that the foreign aid packages never go to the people as that money is actually taken from them, which makes them even poorer. “It’s taken from the poor and it’s given to the rich in another country, because there is always the rich in the different countries and that of course is what we have to change,” he said.

Read more …

Not sure this is true.

Russia’s South Stream Pipeline In Deep Freeze As EU Tightens Sanctions (AEP)

The European Union is close to freezing plans to complete the $50bn (£30bn) South Stream gas pipeline through the Black Sea from Russia, the first serious EU action to punish the Kremlin for the seizure of Crimea. Key details emerged in a leaked briefing by the European Commission’s chief, Jose Manuel Barroso, to Bulgarian politicians, warning the country not to stand in the way of the EU’s tough new line on the project, or attempt to undercut a unified EU response over Ukraine. “We are telling Bulgaria to be very careful,” he said, according to reports in Bulgaria’s press. Mr Barroso said there are “people in Bulgaria who are agents of Russia”, a reference to figures in the ruling Socialist party who have been trying to clinch a bilateral deal with the Kremlin.

The warning came as Ukraine once again rattled investors. Russia’s Micex index of stocks fell 2.4% and the rouble slid 1pc against the dollar after armed pro-Russian protesters seized government buildings in the eastern Ukrainian city of Donetsk and declared the region “independent”. They also stormed offices in Kharkiv and Luhansk. Ukraine’s premier, Arseniy Yatsenyuk, accused Russian president Vladimir Putin of preparing the ground for seizure of the Donbass region, home to most of Ukraine’s heavy industry. “The aim of this scenario is to divide Ukraine into parts and turn part of Ukraine into a slave territory under a Russian dictatorship,” he said.

Read more …

Greece’s “revival” is a nothing but a great accounting trick.

Doom-to-Darling Greece’s Fault Lines Exposed by Cleaners (Bloomberg)

The fault line in Greece’s unprecedented return to favor with investors runs the length of 5-7 Nikis Street in Athens. There, in front of the six-story Greek Finance Ministry, a dozen or so of the 595 cleaning ladies set to lose their state-paid jobs staged protests almost daily at being added to the 27.5 percent of Greeks who are unemployed. The women were watched over by helmeted, baton-carrying riot police, among a group of security personnel due for a bonus next month. “They picked on us because they thought we wouldn’t speak up,” said Dimitra Manoli, 52, a mother of two who made 500 euros ($687) a month cleaning the tax office in the port of Volos, 320 kilometers from Athens. “They thought we would just go away, but we won’t. We can’t.”

The shrinking of Greece’s state employment machine slashed 8.75 billion euros from the public payroll, removing a hurdle to further international aid and ushering a return to capital markets in coming months. Yet beneath the headline figures, most of the 200,000 former state workers retired or were short-term contractors while the roster remains bloated with staff whose jobs-for-life are protected by the constitution. “The burden sharing has been extremely uneven,” said Jens Bastian, a former member of the European Commission’s Greek taskforce. Monthly unemployment bulletins “speak a terrifying language about who has had to do the heavy lifting,” he said.

Read more …

From the “Don’t touch my bonus” category.

Banks Urge Basel U-Turn on Global Asset-Backed Debt Rules (Bloomberg)

Banks from Deutsche Bank to Barclays attacked proposals to overhaul global capital rules for asset-backed debt, saying they risk choking securitization while clashing with efforts to boost lending to businesses. Proposals by the Basel Committee on Banking Supervision would be so onerous for some securitizations that banks would shun investments in the debt, according to consultation responses published on the group’s website. “Left unchanged, the proposed rules would substantially reduce the incentives for banks to participate in securitizations” and could hamper “the availability of affordable credit to the wider economy,” Deutsche Bank said in its public response to the Basel group.

The rules risk being “very punitive,” Europe’s biggest investment bank by revenue said. Basel regulators have been grappling with how to set capital rules for asset-backed debt since the market collapsed in the wake of the 2008 bankruptcy of Lehman Brothers Holdings Inc. While the Basel group has focused on ensuring banks have enough capital to cover risks from their holdings, other authorities have focused on ways to revive high-quality securitizations.

Read more …

Will Mario save the zombies?

Mario Draghi’s QE Catch 22 (RT)

Last week ‘Super Mario’ (the financial press fawn over central bankers with a certain ironic gusto) emerged from an ECB Council meeting to announce that finally the ECB was edging towards perhaps deploying a full QE program. As Britain, America and even Japan, amongst others, printed money with alacrity, the euro has, despite its broad range of fundamental maladies, actually increased in value! This has impacted on Europe’s export competitiveness, at a time when nations like Greece and Spain are still teetering somewhat on the cusp of economic survival. Therefore, faced with an overvalued currency, 12 percent average unemployment and, at best, economic stagnancy…well maybe it is time to do “whatever it takes.”

So is Mario Draghi’s finger poised over the red button to activate the money printing presses? Actually, Super Mario faces an incredible dilemma – damned if he does and damned if he doesn’t. To work, QE must trickle into the real economy. Even in UK/US schemes, often the cash has remained stubbornly within the investment world chasing paper assets as opposed to invigorating the manufacturing and service economy. Within the EU the problem is not just this trickle down aspect. Rather vital issues with the banks themselves have not been addressed. Put simply: the political class remain in denial at the extent of banks’ problems. Many EU banks may fail the autumn round of stress tests. Gutless eurozone governments have palpably failed to take control of the economic situation, wrapping bandages around vast festering wounds.

Thus throughout the eurozone, there are many zombie banks, de facto insolvent entities being protected by stubborn (scared) politicians. These walking dead institutions are not merely in the depressed Mediterranean nations with rampant unemployment, they even exist in Angela Merkel’s otherwise prosperous German hinterlands. Given how she has sought to ‘punish’ incompetent governments, her hypocrisy in punishing other citizens (e.g. in Ireland) to protect her banks is rather incredible. It also threatens the long-term survival of the euro, let alone the EU. Mario Draghi faces a genuine Catch-22 situation. If he launches QE it may reduce the euro in value, but at the same time, even by the standards of QE, his ability to pump prime the economy through a trickle-down effect through the banking system is very modest. A massive tsunami of freshly minted euro might simply end up propping up zombie banks which need to be closed.

Read more …

US Warns China After Renminbi Depreciation (FT)

The US has warned Beijing not to go back to manipulating its currency, following a sharp depreciation of the renminbi since the start of 2014. “If the recent currency weakness signals a change in China’s policy away from allowing adjustment and moving toward a market-determined exchange rate, that would raise serious concerns,” said a senior Treasury official ahead of this week’s IMF, World Bank and G20 meetings in Washington.

The renminbi has fallen more than 2.5% against the US dollar since mid-February, a small amount for most emerging markets but a dramatic shift for the Chinese currency following years of slow and steady appreciation. It trades at Rmb 6.20 against the US dollar, roughly the same level as this time last year. The US comments highlight concern in Washington that China will be tempted to respond to a slowing economy by holding down its currency in order to boost exports. Such moves could lead China to reduce global demand at a time when several other regions of the world, such as the eurozone, are weak. That in turn could hamper US growth.

The fall in the renminbi has been widely seen as an engineered policy move by the country’s central bank, which has the ability to move the currency through a daily fixing rate, and through direct intervention. The renminbi can now trade higher or lower from its mandated fix by 2% a day following the recent widening of the official trading band.

However, most analysts believe that Beijing’s decision to weaken the renminbi was not a ploy to boost competitiveness. Instead, the authorities have sought to stamp out currency speculation from companies and investors who had treated the renminbi as a one-way bet by introducing more meaningful two-way volatility. It also has the positive side-effect of increasing domestic liquidity at a time when stress within the financial system is rising.

Read more …

Turns out the bubble’s entirely self defeating.

Hot Air Hisses Out Of Housing Bubble 2.0 (Wolf RIchter)

As home prices have soared in cities around the country, sales have cratered. The weather has been blamed, though the weather has been gorgeous in California where sales have crashed too, even in temporary boom town San Francisco. The “lack of inventory” and other excuses have been dragged out as well. In reality, homes have gotten too expensive …

Even for hedge funds, private equity funds, REITs, and other forms of Big Money with access to the Fed’s limitless free juice. They’d become powerful buyers over the last two years, gobbling up vacant homes sight-unseen by the thousands, in order to get them off the closely watched for-sale list and shuffle them over to the ignored for-rent list, where they might languish undisturbed. The hope is that they might rent them out somehow and sell them later at a big fat profit, to the dumb money via a ridiculously hyped IPO. But now their business model has collapsed.

“Prices have gotten to the stage where we cannot buy a house, renovate it, rent it, and still make a reasonable return,” explained Peter Rose, a spokesman for Blackstone Group, a private equity giant whose real-estate division, Invitation Homes, has grown in two short years from nothing to the largest landlord in the country with 41,000 rental single-family houses to is name. “There was a moment in time where it made sense,” Rose said. Not anymore. Blackstone already cut its purchases in California by 90% last year. It wasn’t alone. Another mega-buyer with access to nearly free money, Colony Capital, is doing the same thing. Oaktree Capital is trying to dump its portfolio of 500 homes before prices head south.

“Private capital made a lot of money early, and now they’re starting to pull back,” Dave Bragg, head of Residential Research at Green Street Advisors, told the LA Times. “Home prices are up significantly, and houses are definitely less attractive.” With these mass-buyers out of the market, volumes have collapsed to a four-year low, according to Redfin, an electronic real-estate broker that covers 19 large metro areas around the country. Because, let’s face it, who can still afford to buy these homes? Forget first-time buyers, the crux of a healthy housing market. In February, they only bought 28% of the homes, down from 30% a year earlier, down from the three-decade average of 40%, and down from the mid-40% range during good times. That hapless lot has been pushed out of the market a while ago.

Read more …

Father Of High Speed Trading: “The Market We Created Is A Casino” (Patterson)

The speaker who would set off the most fireworks was Peterffy, the founder of Timber Hill, one of early users of Island. He looked out over the podium at the upturned faces of his peers and grimaced. Peterffy had become extremely disillusioned with the market he’d helped create. It wasn’t just the deceptive tactics of firms like Trillium, it was the unregulated speed traders who were picking off his own firm’s orders, with no firm obligation to stick in the market during tough times. The stock market had been turned into a Wild West of dueling algos — and some firms, it seemed, had special advantages. Like Haim Bodek at Trading Machines, Peterffy was steamed that his orders were getting clipped time and time again. He wasn’t going to take the abuse without fighting back.

He cleared his throat, adjusted his glasses, and launched into his speech. “An exchange used to be a place, yes, a physical place, where people would come together to buy or sell, hoping to achieve the best price for themselves,” he said. “The more the exchange was able to attract all of the buy and sell interests in a product, the more the prices on the exchange would reflect the true state of supply and demand.” It was the old mantra: liquidity breeds liquidity. But something had changed.

“In the last twenty years came computers, electronic communications, electronic exchanges, dark pools, flash orders, multiple exchanges, alternative trading venues, direct access brokers, OTC derivatives, high-frequency traders … Reg NMS in the U.S. – and what we have today is a complete mess.” He looked out at the crowd. Dead silence. Peterffy hadn’t bothered to warm the audience up with a joke, a humorous anecdote. He cut straight to the point – and most in that room didn’t like what he was saying.

“It is not so much anymore that the public does not trust their brokers. They do not trust the markets, the exchanges, or the regulators either. And why should they, given our showing the past few years? To the public the financial markets may increasingly seem like a casino, except that the casino is more transparent and simpler to understand.” Visible tension spread through the room. Did Thomas Peterffy just call the market a casino? That was an attack they might have expected from the likes of Arnuk and Saluzzi or Senator Ted Kaufman – but from the founder of Timber Hill and Interactive Brokers, the godfather of electronic trading?

TP Speech Oct2010

Read more …

China’s economy is very much like an ocean liner: hard to change course, let alone turn around.

The Global Origins of China’s Domestic Conflicts (Diplomat)

Globalization divided China into two unequal parts: the successful, aligned and satisfied people on the top, versus the poor, frustrated and marginalized on the bottom. The large-scale outbreaks of social tensions in recent years, including the tensions in Xinjiang and Tibet, should not just be seen as isolated cultural or political battles, but rather should be heard as both the battle cry of China’s new class struggle and as a conflict of globalization. Based on the recent public opinion surveys, Chinese citizens have frequently ranked corruption, pollution, and social tension as their top concerns. In fact, all these issues are directly related to the factors of globalization that have helped China rise. The opportunities brought by globalization have hidden costs.

China’s embrace of globalization has aligned once fractious elites behind a banner of shared economic interest. China’s globalization dividends, including its trade surplus and the world’s highest reserves of foreign currency, have provided the government with huge resources to buy the loyalty of the intellectual and economic elites. Scholars, entrepreneurs, and government officials, who just 25 years prior stood divided in Tiananmen Square, have now found themselves as allies. They have become the stakeholders and co-owners of the new China Inc. People on the top are content, sharing the dividends of their prosperity while harmoniously singing the praises of globalization and the stability of one party rule.

By hitching its fate to the opportunities brought by globalization, China has risen at a roaring speed. However, the real danger for the regime is that it has now become reliant on the speed of economic development. Only if China can maintain its unbridled growth rate can it continue to meet the masses’ expectations regarding employment and a standard of living. Beijing used to call an 8% GDP growth rate as a “red line” of life or death. During the recent National People’s Congress session, Premier Li Keqiang tried to persuade the delegates to agree to lower the rate to around 7.5%. To some extent, Chinese society is now like the bus in the Hollywood movie Speed that must keep moving at a speed of 50 miles per hour; to fall below this speed will explode the bomb sitting just beneath the bus. Beijing is indeed playing a dangerous game.

Globalization has also tied Western leaders to the top of the bus, because a failed China would be catastrophic for the world’s economy. However, staying above the red line means that the wealth gap and socioeconomic marginalization will continue. Unfortunately, this may also mean that conflict will continue, especially when the marginalized have learned that the world will pay attention when violence is the messenger. Neither China nor the rest of the world can ignore this dilemma and paradox; with every “made in China” product we buy we are contributing to this rise in wealth, and the rise in frustration, social tension and air pollution.

Read more …

Overbuilding, oversupply, overpriced.

Chinese Developers Seen Facing More Challenges on Oversupply (Bloomberg)

Chinese developers will probably face more challenges this year because of an oversupply of housing in smaller cities, according to a Bloomberg News survey. Developers in regions where the housing market slowed and access to financing shrunk face rising default risks, Standard & Poor’s Ratings Services said in a Jan. 17 report. “Oversupply remains the top concern of the real estate sector,” Qinwei Wang, London-based economist at Capital Economics Ltd., wrote in the survey. “Inventories have continued to rise, with the situation vulnerable in some third cities. Looking ahead, the increase of demand for new properties will probably be far weaker than over the last decade.”

The pressure on Chinese developers as economic growth slows and the government allows local cities to implement their own housing curbs was underscored by the collapse of a developer in a city south of Shanghai last month. About 67% of housing under construction in China last year was in less affluent cities, according to Nomura Holdings Inc. While most respondents didn’t expect China’s property market to collapse this year, four out of five respondents, who see a crash, expect it to happen in smaller third-tier cities, according to the survey.

Read more …

When the economy goes down for real, Québec will revisit this.

Quebec Separatist Party Suffers Crushing Election Defeat (AP)

Quebec voters gave a resounding no to the prospects of holding a third referendum on independence from Canada, handing the main separatist party in the French-speaking province one of its worst electoral defeats ever. The Liberal Party, staunch supporters of Canadian unity, won Quebec’s legislative elections Monday, while the pro-independence Parti Quebecois suffered a crushing defeat that puts its dream of a sovereign Quebec on hold for years. The results will allow the Liberals to form a majority government, less than 18 months after voters had booted the party from power for the first time in nine years amid allegations of corruption.

With all but a handful of polling stations reporting, the Liberals had 41.5% of the vote and took 70 seats in the 125-member National Assembly. The Parti Quebecois had 25.4% and won 30 seats. The Coalition for Quebec’s Future, which downplayed the sovereignty issue to focus on the economy, was close behind with 23.1% and 22 seats. Quebec Premier Pauline Marois, who led a minority government, called the snap elections last month in hopes of securing a majority for her PQ party. But the campaign stirred up speculation that a PQ majority would ultimately lead to another referendum on independence from Canada, an idea that has lacked support in recent years. Fears of a referendum galvanized supporters of the Liberals. Marois suffered a humiliating defeat, even losing her own seat, and announced that she would step down as party leader.

Read more …

Canada’s Economy Will Go to a Vote (Bloomberg)

Canada’s first Conservative majority government in a generation is facing an election next year, just as the country’s post-recession comeback is starting to falter. So this is a good time to start thinking about how to judge the Conservatives’ signature project: managing Canada’s economy. In a series of posts, I’ve looked at that question from different angles: Slowing growth rates, the uncertain labor market, stagnant wages and rising debt levels, rising poverty rates for seniors and more households going hungry, and carbon intensity figures moving in the wrong direction.

How much of this is the current government’s fault? Not all of it, to be sure. Many of these changes reflect a mix of forces, from global economic pressure to demographic and technological shifts. Some may have been too strong for the federal government to overcome, whichever party held the reins. But government action matters, especially when one party makes a strong economy the core of its argument for public support. So the question that ought to define the next election is whether, beneath the slogans and the happy talk, Canada’s economy can be judged a success — and what exactly the other parties propose doing differently.

Sounds obvious, right? If you think so, go back and watch the sole English-language debate among party leaders during Canada’s last federal election, when the opposition parties rambled on about the Conservatives’ perceived ethical faults, leaving Prime Minister Stephen Harper’s mantle of economic super-manager all but unchallenged. The scandals have only piled up since then, and with them the temptation to make the next campaign another attempt for the opposition to claim the moral high ground. They shouldn’t. If there’s one lesson from the last election, it’s that bad behavior is inherently subjective.

The economy, on the other hand, isn’t — or at least it doesn’t need to be. But an election campaign that fails to generate a debate on a handful of key economic problems, with each party explaining how it would address those problems and why, is one that gives the winners a free hand to act as they please, pursuing a mandate so vague — who does not want a stronger economy, for the middle class or anyone else? — as to be meaningless.

Read more …

Forward Guidance (Jim Kunstler)

Guess what? There is none. Rather, the Federal Reserve practice of Delphically divulging its intentions ought to be understood as the master pretense of US economic life — the delusion that wise persons are actually in control of anything. The result of this guidance continues to be the mis-pricing of everything, especially the cost of money as represented in the operations of debt, and hence the value of everything denominated in money.

The interventions of our central bank have really been aimed at one objective: to compensate for the contraction of real wealth in an economy that replaced purposeful activity with Kardashian studies and tattoo art. Purposeful economic activity provides surpluses that allow for the repayment of debt. Kardashian study and tattoo art lead to entropic entrapment, aka, a death spiral of culture and economy. That’s where we are at. The debt is now eating us alive, and the central bank trick of piling on additional debt to mask the failure of repaying old debt is losing its palliative punch.

One big problem with the Fed’s policies is that the mis-pricing of everything ends up being expressed in the very statistics (GDP, unemployment, inflation) that are used to justify further interventions that produce ever deeper perversities. That is, the Fed distorts prices, which distort statistics used to make policy, which prompt the fed to ramp up policies that further distort prices, a dangerous recursive dynamic. Since prices are the basic information for running an economy, we end up in a situation where nothing really adds up. The antidote to that has been pervasive accounting fraud — the covering-up of mis-pricing, pretending that things add up when they don’t.

Read more …

Welcome To Terminus (Jim Quinn)

As I watch the hordes of hideous brain dead zombies shuffling across the apocalyptic landscape seeking to satiate their basest cravings I can’t help but see the parallels with the millions of mindless tattooed obese slobs waddling across mall parking lots past vacant store fronts staring zombielike at their iGadgets as they seek to satisfy their basest desires at Macy’s and Chipotle. A virus has overspread our country causing a vast swath of the population to gratuitously assuage their every want without thinking of the consequences. The sickness is caused by being imprisoned for twelve years in government run public schools, watching thousands of hours of propaganda emitted by the corporate media, viewing hundreds of brain cell destroying reality TV shows, reading and sending thousands of texts and tweets, and being overwhelmed by the delusional belief spending more than they make, saving nothing, and piling up mountains of debt is the path to success in our contaminated society. [..]

There are 318 million Americans and a majority of them fall into the category of zombies in my estimation. Every American has the zombie virus within them. It has been incubated by corrupt vote seeking politicians, control hungry government sociopaths, mind numbingly worthless public education, and the relentless dumbing down through corporate media propaganda and vacuous reality TV entertainment. Once cogent thinking aware citizens have been zombiefied into mindless impulsive consumers.

How can you not see the parallels between American society and the zombies in the Walking Dead? Walk down any city street in America and you see hordes shuffling along staring with blank faces and glazed over eyes at their iGadgets. Black Friday is identical to flinging a freshly slaughtered hog in front of the flesh eating zombies. Americans flock to malls across our apocalyptic suburban sprawl landscape and proceed to stampede, gouge, and punch their way to an fantastic bargain on a Chinese slave labor produced microwave they must have to cook their toxic frankenfood created by one of our corporate food conglomerates. The Black Friday crowds actually make the zombies from the Walking Dead seem well behaved. While the American zombies are shambling through superficial lives of pleasure seeking, mass consumption, and a delusional faith in debt based wealth, there is still a minority of rational thinking people who can control their impulses and resist the disease devouring our culture.

Read more …

Australian Unemployment Heads For 11-Year High (Guardian)

Australia’s sluggish economy could need further rate cuts by the end of the year as unemployment looks set to hit an 11-year high, economists have warned. Business confidence fell from seven points in February to four in March, according to the National Australia Bank monthly survey on Tuesday. Business conditions remained subdued but lifted slightly to one point in March. Optimism was at its lowest level since its post-federal election bounce last year and mining was the least confident industry, the report said.

“Rather than conditions rising to confirm the improvement in confidence, it seems that confidence is beginning to succumb to the continuing softness in conditions,” NAB economists said. With unemployment figures on Thursday expected to show the jobless rate at 6.1%, its highest since 2003, the authors of the report believe that the Reserve Bank of Australia may be forced to reduce the cost of borrowing again.

Read more …

Wonderful!

This Couple Built Their Own Tiny Home For $10,000 (Yahoo!)

McMansions may be making a comeback in the U.S., but it’s nice to see the tiny-house movement is still going strong. Tiny-home singles even have their own dating site, Tinyhousedating.com. The site launched two weeks ago and already has more than 400 members, according to founder Kai Rostcheck. “It’s hard to meet other people who are making that same [lifestyle] choice,” Rostcheck told Yahoo Finance. But is it really possible to thrive as a couple in such a, well, tiny space? What do you do when the inevitable argument heats up and you’ve only got 100 square feet of breathing room? How do you pare down not only your life but your partner’s life to fit in a home no bigger than a tool shed?

We caught up with Rhode Island couple Jess Belhumeur, 28, and Dan Sullivan, 26, who chronicle their tiny-home lifestyle on their blog, Living In A Tiny House. In January they completed their 128-square-foot abode, which they built and furnished for a mere $10,000. “I had already owned a home before this and I realized that I only used two rooms — the kitchen and the living room,” Jess says. “I felt ridiculous. I was in a stressful financial situation and I wasn’t even making use of the house I had.”

Read more …

Oklahoma Swamped by Surge in Earthquakes Near Fracking (Bloomberg)

There have been more earthquakes strong enough to be felt in Oklahoma this year than in all of 2013, overwhelming state officials who are trying to determine if the temblors are linked to oil and natural gas production. The state on April 6 experienced its 109th earthquake of a magnitude 3 or higher, matching the total for all of 2013, according to Austin Holland, a research seismologist with the Oklahoma Geological Survey. More quakes followed, including a magnitude 4 near Langston about 40 miles (64 kilometers) north of Oklahoma City.

A surge in U.S. oil and gas production by fracturing, or fracking, in which drillers use a mix of water and chemicals to coax liquids from rock formations, has generated large volumes of wastewater. As fracking expanded to more fields, reports have become more frequent from Texas to Ohio of earthquakes linked to wells that drillers use to pump wastewater underground. “We certainly likely have cases of earthquakes being caused by different oil and gas activity,” Holland said in an interview. “Evaluating those carefully can take significant amounts of time, especially when we’re swamped.”

Within the past year, earthquakes thought to be tied to wastewater disposal wells were recorded in Azle, Texas; Jones, Oklahoma; and northeastern Ohio, according to Art McGarr, a geophysicist with the U.S. Geological Survey in Menlo Park, California. Pumping fracking wastewater underground has been linked to a sixfold jump in quakes in the central U.S. from 2000 to 2011, according to the science agency, part of the Interior Department.

Read more …

Why money needs to be banned from politics, chapter 826.

Monsanto And Co. Pouring Money Into Defeating County Measure To Ban GMOs (RT)

Monsanto and five other top agrochemical companies have donated a combined $455,000 to defeat an Oregon county ballot initiative that would restrict the growth of genetically-modified crops in area farms. The internationally-powerful “Big Six” chemical companies are flooding the Measure 15-119 ballot campaign in Jackson County, Oregon with lucrative donations that have helped opponents of the measure amass an eight-to-one spending advantage, according to state figures.

Monsanto ($183,294), DuPont Pioneer ($129,647), Syngenta ($75,000), Bayer ($22,353), BASF ($22,353), and Dow AgroSciences ($22,353) have donated a combined $455,000 to Good Neighbor Farmers, the political action committee fighting Measure 15-119, which county voters will consider on the May 20 ballot. “This is a staggering amount of money for a local ordinance,” said Center for Food Safety senior attorney George Kimbrell. “For every vote they might get, Monsanto and its pals could afford to take each voter out for a fancy steak dinner.” Overall, Good Neighbor Farmers has $556,000 cash on hand, according to the Oregon Secretary of State. The Center for Food Safety reported that, all in all, opponents of the measure have a total of $799,000.

Meanwhile, two political action committees supporting the measure, GMO Free Jackson County and Our Family Farms Coalition, have a combined $102,368. Measure 15-119 “would ban any person from propagating, cultivating, raising or growing ‘genetically-engineered’(defined) plants in Jackson County.” Kimbrell’s group says that even before the latest contribution avalanche from the “Big Six,” about 95% of donations in the campaign had come from outside Jackson County. “It goes to prove just how much money is coming from outside of our county,” Elise Higley, director of Our Family Farms Coalition, told The Oregonian. “The general reaction is that people are really angry that outsiders are pouring this much money into a county measure.” [..]

The vast majority of conventional processed foods in the US are made with genetically-modified organisms (GMOs). Around 93% of all soybean crops planted in the US last year involved genetically-modified, herbicide-tolerant (HT) variants, the US Department of Agriculture has acknowledged. HT corn and HT cotton constituted about 85 and 82% of total acreage, respectively. GMO crops are now grown in 28 countries, or on 12% of the world’s arable land, with the acreage doubling every five years. However, in the European Union, only two GMO varieties (compared to 96 in the USA) have so far been licensed for commercial harvesting. Russia, for instance, recently barred the import of GMO products.

Powerful food industry and biotechnology players are currently banding together on other fronts to protect their investment in GMO technology despite national and international pushback. Their main effort in the US is seen in potential federal legislation that would block states from passing mandatory GMO labeling measures despite the “right to know” movement’s rising popularity.

Read more …