Apr 282015
 


NPC National Service Co. front, 1610 14th Street N.W., Washington DC 1920

The New Nothingness (Steen Jakobsen)
The Real War On The Middle Class (Ron Paul)
Over Half Of Americans Killed By Police Each Year Are Mentally Ill (Economist)
Who Is Really Choosing America’s Next President? (ProPublica)
If Greece Falls, No One Wants Their Prints On The Murder Weapon (Reuters)
Greece Shakes Up EU-IMF Talks Team But Keeps Varoufakis (AFP)
Greece PM Leaves Referendum Option Open, Rules Out Elections (Reuters)
Grexit, Grimbo, now Grexhaustion, Acropolis Now?
Greek President Promises Repayment of all Debt (Spiegel)
The Limits Of Propaganda (Dmitry Orlov)
Leaking CIA Secrets Leads To Severe Punishment, Unless You Are The Boss (RT)
Maryland Governor Declares State of Emergency, Activates National Guard (CBS)
The Hidden Lives Of Chernobyl’s Wildlife (BBC)
Norway’s Shift From Oil Starts With Two Left Feet (Bloomberg)
BP Oil Hunt Off Australia Coast Causes Fear of Another Deepwater Horizon (BBG)
East Australia 1 Of 11 Areas Good For 80% Of World Forest Loss (Guardian)
Is The Universe Really A 2-D Hologram? (Science Daily)

Best line in a while: “..I am normally introduced as someone who has predicted five of the last two crises.”

The New Nothingness (Steen Jakobsen)

“The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to its close. In its place we are entering a period of consequences.” – Churchill

I have noticed a very troubling trend recently – everywhere I go, I’m the optimist. This concerns me and should concern you as well as I am normally introduced as someone who has predicted five of the last two crises. I write this on the Copenhagen-bound plane that brings me back from a visit to Slovenia and Croatia, where everyone has given up on the future. I found the same on a recent trip to Hong Kong and Australia, and on another occasion in Turkey before that. We have zero growth, zero inflation and zero hope. That combination has left the countries of this circumstance in total apathy as zero rates are being interpreted as meaning that no reforms are needed. No inflation means no new margins as well as no new wage bargaining, and zero hope means politics and elections may change the affiliation of countries’ leaders, but not their politics and certainly not their vision for the future.

This is one of the unintended consequences of zero-bound economies and policies. This apathy has, however, reached a zenith-point that needs to be addressed. Media and policymakers continue to talk about what we can’t do, leaving no room for talk of we can do and characterising dreams as mere fantasies, things best left to children. This new nothingness is creating a youth, a political system and an economic outlook which is based more in peoples’ heads and minds than it is in reality. Every country I visit has terrible macro policies, and features a political class who are mainly interested in maintaining the status quo (as well as a dynamic micro economy). There are always business people and students who are willing to do more and better – to go higher, longer and further – but they are drowned in this “nothingness reality”.

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“These politicians also disregard the harm US foreign policy inflicts on Americans.”

The Real War On The Middle Class (Ron Paul)

One of the great ironies of American politics is that most politicians who talk about helping the middle class support policies that, by expanding the welfare-warfare state, are harmful to middle-class Americans. Eliminating the welfare-warfare state would benefit middle-class Americans by freeing them from exorbitant federal taxes, including the Federal Reserve’s inflation tax. Politicians serious about helping middle-class Americans should allow individuals to opt out of Social Security and Medicare by not having to pay payroll taxes if they agree to never accept federal retirement or health care benefits. Individuals are quite capable of meeting their own unique retirement and health care needs if the government stops forcing them into one-size-fits-all plans.

Middle-class families with college-age children would benefit if government got out of the student loan business. Government involvement in higher education is the main reason tuition is skyrocketing and so many Americans are graduating with huge student loan debts. College graduates entering the job market would certainly benefit if Congress stopped imposing destructive regulations and taxes on the economy. Politicians who support an interventionist foreign policy are obviously not concerned with the harm inflicted on the middle-class populations of countries targeted for regime change. These politicians also disregard the harm US foreign policy inflicts on Americans. Middle- and working-class Americans, and their families, who join the military certainly suffer when they are maimed or killed fighting in unjust and unconstitutional wars.

Our interventionist foreign policy also contributes to the high tax burden imposed on middle-class Americans. Middle-class Americans also suffer from intrusions on their liberty and privacy, such as not being able to board an airplane unless they submit to invasive and humiliating searches. Even children and the physically disabled are not safe from the Transposition Security Administration. These assaults are justified by the threat of terrorism, a direct result of our interventionist foreign policy that fosters hatred and resentment of Americans.

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So are their killers.

Over Half Of Americans Killed By Police Each Year Are Mentally Ill (Economist)

To the sound of electric guitars, heavily armed police officers fire assault rifles, drive squad cars fast and pull their guns on fleeing crooks. “Are you qualified to join the thin blue line?” asks a narrator, in the sort of breathless voice you might expect in a trailer for “Fast & Furious 7”. The advert’s aim is not to sell movie tickets, however, but to recruit police officers in Gainesville, a city of 127,000 in Florida. Would-be cops who take this video seriously are likely to be disappointed. The reality of the job, as one officer from a large west-coast agency explains, is far less glamorous. “The public want us to come up and deal with a neighbour who is mowing their lawn at 3am. They want us to deal with their disruptive child. They want us to deal with the crazy person who is walking down the street shouting.”

As crime has fallen across America since the 1990s, policing has shifted more towards social work than the drama seen on TV. Police culture, however, has not caught up. The gap may help to explain why American police are so embattled. The latest controversy is the death of Freddie Gray, a 25-year-old man from Baltimore who died on April 19th after being arrested (six officers have since been suspended). That followed the killing on April 4th in South Carolina of a 50-year-old man, Walter Scott, who was shot in the back by a police officer after running away from his car (the officer was charged with murder after a video of the killing emerged). In another case in Tulsa on April 2nd, a 73-year-old reserve police officer killed a man when he accidentally fired his gun instead of his taser. All three victims were black.

No one knows how many people die in contact with America’s roughly 18,000 law-enforcement agencies. The FBI publishes reports, but police forces are not required to submit data. The incomplete FBI figures show that at least 461 people died in “justifiable homicides” in 2013, an increase of 33% since 2005. Other sources suggest the true number could be as high as twice that. In Britain, by contrast, police shot and killed precisely no one in 2013. American police resort to violence more partly because they meet it more. “We’ve never had a population who are so well-armed,” points out Ron Teachman, the chief of police in South Bend, Indiana. Twenty-six police officers were killed with guns in the line of duty in 2013, far more than in any other rich country.

“When you go to a police academy, the first thing they say to you is that it’s dangerous and you could get killed out there,” says Jim Bueermann, a retired police chief and the head of the Police Foundation, a think-tank. Yet fewer police officers are killed now than in the past, and the number who are shot is less than the number who die in traffic accidents. Over time, suggests Mr Bueermann, a justified alertness to danger may have warped into a belief that the swift use of force is the only thing keeping cops safe. At its worst, this manifests itself in a fiercely defensive culture. For example, in Seattle last year more than 100 cops sued the Department of Justice to protest against a revised use-of-force policy, arguing that it would cripple morale and endanger cops (the case, which was not supported by the city’s police union, was thrown out).

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The amounts are stunning. Democracy?

Who Is Really Choosing America’s Next President? (ProPublica)

Super PACS that get nearly all of their money from one donor quadrupled their share of overall fund-raising in 2014. The wealthiest Americans can fly on their own jets, live in gated compounds and watch movies in their own theaters. More of them also are walling off their political contributions from other big and small players. A growing number of political committees known as super PACs have become instruments of single donors, according to a ProPublica analysis of federal records. During the 2014 election cycle, $113 million – 16% of money raised by all super PACs – went to committees dominated by one donor. That was quadruple their 2012 share. The rise of single-donor groups is a new example of how changes in campaign finance law are giving outsized influence to a handful of funders.

The trend may continue into 2016. Last week, National Review reported that Texas Senator Ted Cruz’s bid for the Republican presidential nomination would be boosted not by one anointed super PAC but four, each controlled by a single donor or donor family. The Supreme Court’s 2010 Citizens United ruling helped usher in the era of super PACs. Unlike traditional political action committees, the independent groups can accept donations of any dollar size as long as they don’t coordinate with the campaign of any candidate. Previously, much of the focus in big-money fundraising was on “bundlers” – volunteers who tap friends and associates for maximum individual contributions of $5,400 to a candidate, then deliver big lump sums directly to the campaigns. Former president George W. Bush awarded his most prolific bundlers special titles such as “Ranger” and “Pioneer.”

While bundling intensified the impact of wealthy donors on campaigns, the dollar limits and the need to join with others diluted the influence of any one person. With a super PAC, a donor can single-handedly push a narrower agenda. Last year, National Journal profiled one such donor – a California vineyard owner who helped start the trend by launching his own super PAC and becoming a power player in a Senate race across the country. Beyond the single-donor groups, big donations are dominant across all kinds of super PACs, according to the analysis. Six-figure contributions from individuals or organizations accounted for almost 50% of all super PAC money raised during the last two cycles. “We are anointing an aristocracy that’s getting a stronger and stronger grip on democracy,” said Miles Rapoport, president of Common Cause, an advocacy group that seeks to reduce the influence of money on politics.

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They can’t escape it.

If Greece Falls, No One Wants Their Prints On The Murder Weapon (Reuters)

While Greece’s leaders insist Europe must heed and respect the democratic will of the Greek people, its creditors reply that they too have democratic mandates from their voters. In Varoufakis’ narrative, euro zone countries did not lend all that money to save Greece in the first place but to protect their own banks, which had imprudently lent Athens billions. Nonsense, say euro zone officials. Those banks took losses in 2012 when Greek debt to private bondholders was restructured. Varoufakis has widened the circle of blame to the ECB, accusing it of «asphyxiating» Greece by starving its banks of liquidity and severely limiting their short-term lending to the government.

That prompted an indignant response from ECB President Mario Draghi, who told the European Parliament the central bank’s support for Greece amounted to some €110 billion, but it was barred by treaty from monetary funding of governments. For weeks Greek officials have been telling their euro zone counterparts they have run out of money, only to find spare cash to make the next debt payment. “They have cried wolf so often that when they are really going bust, no one will believe them,” one EU negotiator said on condition of anonymity. Insiders say the ECB is determined that the central bank will not be the institution that pulls the plug. If it considers support for Greek banks is no longer tenable, it will seek a political decision by European Union governments. “This is not something unelected central bankers should decide,» a source in the Eurosystem of central banks said.

European Commission President Jean-Claude Juncker is eager to hold Tsipras’ hand until the last minute in the hope that he will impose an unpalatable economic reform deal on left-wingers in his Syriza party before it is too late. For Juncker, one of the fathers of Europe’s single currency, the departure of a single member from the 19-nation euro zone would be a grievous blow to the bloc’s global standing and could set a dangerous precedent, encouraging investors to speculate against other member states in future crises. Even if it stayed in the euro zone, a Greek default on other European governments or the ECB would be one of the most acrimonious moments in the history of the EU. Amid mutual recrimination over ruined Greek savers and cheated European taxpayers, some fear demonstrations by Greek pensioners or hospital patients and violence in Athens. If it happens, there will be plenty of blame to go around, but no one to take responsibility.

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Lot of goal-seeked mis-reporting on this.

Greece Shakes Up EU-IMF Talks Team But Keeps Varoufakis (AFP)

Greek Prime Minister Alexis Tsipras shook up the team handling crucial talks with its creditors Monday after relations between his embattled finance minister and the EU hit a new low. A government statement said a “political negotiation team” would be formed under junior foreign minister Euclid Tsakalotos, a 55-year-old Dutch-born economics professor, to assist the troubled talks after months of fruitless discussions on Athens’ new loan deal. While some see the move as an attempt to sideline Finance Minister Yanis Varoufakis, whose negotiating style has infuriated Brussels, the radical left government insisted that it would continue to support the maverick economics professor against “manipulated” media attacks.

A government source claimed that the changes did not affect Varoufakis, who will be in charge of Tsakalotos’ “political team”. “This changes nothing as far as Varoufakis is concerned,” the official told AFP. “He will continue to represent Greece at Eurogroup meetings.” The move on Monday came after a stormy Eurogroup meeting in Riga last week where Varoufakis was reportedly “isolated” by his fellow finance European ministers. He reacted by quoting former American president Franklin Delano Roosevelt (FDR), who spurred major reforms in the United States after the Great Depression. “FDR, 1936: ‘They are unanimous in their hate for me; and I welcome their hatred,'” Varoufakis tweeted on Sunday.

Analysts saw Greece’s reshuffling of its negotiators, with another co-ordinating team to be formed to support talks with EU-IMF officials in Athens, as a bid to placate its creditors. “To bypass Varoufakis and make clear the seriousness of the situation to the Prime Minister directly following the Riga shouting match between finance ministers, Eurogroup chief Jeroen Dijsselbloem reportedly phoned Tsipras after the meeting,” Christian Schulz, a senior economist at Berenberg said. “Tsipras called German chancellor Merkel on Sunday, with German sources describing the tone of the talk as ‘positive’. However, as long as the institutions and Eurozone finance minister can’t certify that Greece is doing the requested reforms, Greece can’t get fresh money,” he added.

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Neutral.

Greece PM Leaves Referendum Option Open, Rules Out Elections (Reuters)

Greek Prime Minister Alexis Tsipras on Tuesday said he would have to resort to a popular referendum if lenders insist on demands that the government deems unacceptable but was confident of striking a deal to avoid such a scenario. Athens is weeks away from running out of cash, but talks with EU and IMF lenders on more aid have been deadlocked over reform measures including pension cuts and labour market liberalisation that Greece must implement. Speculation has grown that Tsipras could call elections or a referendum to break the impasse. In his first major television interview since being elected in January, Tsipras said he expected a deal with creditors by May 9, three days before a debt payment to the IMF of about €750 million falls due.

He ruled out a default but stressed that the government’s priority was to pay wages and pensions. Pressed on what the government’s options were if no deal was found, Tsipras ruled out snap elections, saying it had only been a few months since the government had been voted in. But he said the government did not have the right to accept demands from lenders that fell outside the limits of its mandate to end austerity cuts and would have to ask Greeks to decide. “If the solution falls outside our mandate, I will not have the right to violate it, so the solution to which we will come to will have to be approved by the Greek people,” Tsipras told Star television in the interview. “But I am certain we will not reach that point. Despite the difficulties, the possibilities to win in the negotiations are large. We should not give in to panic moves. Whoever gets scared in this game loses.” [..]

Some of his sharpest comments were reserved for the previous government and certain unnamed quarters in Europe, which he accused of laying a “trap” for his government when it took power in the hope of tripping it up. “They derive pleasure from the prospect of a failure in the talks,” he said, saying his government took over a “minefield” when it came to power in January. “We received a country that was in a situation of financial asphyxiation.” He also hit out at the ECB, calling its decision to place a cap on Treasury bill purchases by banks – which prevented banks from financing the government – a “politically and ethically unorthodox” decision.

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“I’m sure it’ll get worse as the days go by..”

Grexit, Grimbo, now Grexhaustion, Acropolis Now?

The standoff between Greece and its creditors has spawned another bit of rivalry: the battle among analysts to coin the latest buzzword for the painfully protracted drama. “There’s definitely an element of who can come up with the best word to fit the scenario,” said Chris Weston, chief market strategist at IG. Word play on Greece has been picking up this month. Last week brought the word “Grimbo,” or Greece in limbo, coined by a group of Citigroup economists – led by Chief Economist Willem Buiter. They are the same people responsible for the now widely-used “Grexit” term in February 2012, when the idea Greece might leave the euro zone first became a possibility. On Friday, economists at Bank of America-Merrill Lynch decided they wanted in on the game as well, coining “Grexhaustion.”

“There is always a deadline after the final deadline (contributing to the Grexhaustion),” economists Gilles Moec and Ruben Segura-Cayuela wrote, noting that the continual confrontation between Greece and its creditors has had one major casualty: the country’s economy. “Traders have gotten fairly comfortable with the idea of where Greece is, so there’s a bit of mocking and complacency,” said Weston, who suggested “Gretch” as a potential entrant. “Outside of the pain clearly evident in Greece, the rest of the world is quite happy to coin these great phrases as long as it doesn’t see a pickup in [market] volatility.” The Greece situation remains a Sisyphean mire. Over the weekend, media reports said the country’s colorful finance minister, Yanis Varoufakis, faced a tough crowd and numerous snubs at a Latvian meeting with his euro zone counterparts.

The country is running out of cash and it needs a last tranche of bailout aid in order to meet debt repayments and to pay its domestic wages and pension bill this month. On Monday, Greece revamped its negotiating team, taking Varoufakis off the field and tapping Deputy Foreign Minister Euclid Tsakalotos, an economist well liked by officials representing creditors, as coordinator. Fresh entrants to the Greek vocabulary one-upsmanship are likely already lurking in the wings. “I’m sure it’ll get worse as the days go by,” said Richard Jerram, chief economist at Bank of Singapore, noting that the first two letters of the country’s name lend themselves well to word play. “A lot of countries couldn’t really do that,” Jerram noted, although he added that he finds other vocabulary plays more amusing than the ones that involve just “shoving ‘Gr’ in front,” such as “Acropolis Now,” a play on the movie title “Apocalypse Now.”

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And next up, we have….

Greek President Promises Repayment of all Debt (Spiegel)

Time is running out for Greece and its international creditors. If an agreement isn’t found by June, the country will face insolvency. The new Greek president, Prokopis Pavlopoulos, has now told SPIEGEL ONLINE his views on the conflict: He rules out the possibility of a Grexit and promises that all the loans made to Greece will be paid back, but he is also critical of past austerity programs. “Some of the measures imposed on us go beyond EU law,” Pavlopoulos said to SPIEGEL ONLINE at his official residence in Athens. “We want to be equal members of Europe. Among other things, the law professor feels that international lenders’ criticisms of the minimum wage and other labor rights in his country are problematic.

Pavlopoulos pointed out that in Germany, too, there is a minimum standard of living. “We are not asking for anything more than for the Greek people to enjoy what Germany’s Constitutional Court considers as an established social right for the German people,” Pavlopoulos said. He also claimed that parts of the austerity programs “were not at all growth friendly, but rather would lead the Greek economy to a recessionary course.” Pavlopoulos is a member of the conservative Nea Dimokratia party and has been in office since March. Earlier in his career, he served as an advisor to former Prime Minister Konstantinos Karamanlis, who led Greece as it transitioned from a military dictatorship to a European democracy. The comments mark the first time the new president has expressed his views on the euro debt dispute to any German media organization.

“Greece in the late 1970s fought a great battle to join Europe,” the president noted. For him, he said, it was “not conceivable to see Greece outside of Europe.” He also said that he views a Grexit, Greek’s possible exit from the euro zone, as unthinkable. “The thought of Grexit does not even enter my mind,” he said. Although Greece is under tremendous financial stress, with the government now forcing hospitals, universities and public agencies to hand over their savings to the central bank. Pavlopoulos stated that his country would fulfill all of its obligations. “We pay everything we owe to the last euro,” he said. “We need to keep a balanced budget and gradually decrease our debt.” The president also expressed optimism that the dispute over Greece’s debt can still be resolved. Pavlopoulos said negotiations for a new bailout program are “entering the home stretch.”

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“..their only option is to try to squelch every voice except their own.”

The Limits Of Propaganda (Dmitry Orlov)

As Paul Craig Roberts has recently reported, the US government is in the process of launching an all-out war on truth. Those who express views contrary to the party line out of Washington will be labeled a threat. Eventually they may find themselves carted to one of the concentration camps which Halliburton (Dick Cheney’s old company) has constructed for $385 million. But that may take a while. In the meantime, we can expect lots of other, less dramatic developments.

Indeed, some of these are already happening. Here they are, listed in order of severity.

1. Self-censorship. Those who have previously tried to get the truth out no matter out become more reticent and prone to equivocation when reporting on “hot” issues.

2. Topic-avoidance. They start avoiding certain “hot” issues that they feel are most likely to get them into trouble.

3. Response to harassment. A few incidents of mild official harassment cause certain blogs to start watering down their content, or pulling down content in response to harassment.

4. Blacklisting. The officials start censoring content on a case-by-case basis, blocking or shutting down certain internet sites that they consider seditious.

5. Blocking communications. The officials start dealing with the “hard cases” of uncooperative individuals who remain, shutting down their communications by disabling their cell phones, shutting down internet access, and by imposing travel restrictions so that the “hard cases” are forced to remain in places where they can be watched.

6. Detention. Those found to be truly uncooperative, who try to circumvent the restrictions, are rounded up and shipped off to the above-mentioned camps.

This may seem like a dire prognosis, but actually I just want to present a relatively complete list of public measures for your consideration. Yes, there will be a few “hard cases” who will insist on getting right in the face of Washington officialdom in futile hopes of somehow affecting the political process or winning over a few of their compatriots. But at some point such individuals become indistinguishable from people with mental problems. That is because if you live in the US, actually know how the political system there operates, and still think that the US is a democracy, then you DO have a mental problem. You can’t have it both ways: either you buy into the official propaganda, or you don’t.

Also, it bears pointing out that the vast majority of people in the US are quite happy listening to Washington’s propaganda, be it from Fox or NPR, don’t consider it propaganda, and have been conditioned to consider anyone who attempts to tell them the truth to be tin hat-wearing conspiracy theorist nut case. And that means that tin hat-wearing conspiracy theorist nut cases have a role to play. They are important to have, in the same way that a village idiot is important to have, so that children can learn what idiocy looks and sounds like. So, why bother sending them to a concentration camp? And so it seems likely that the village idiots… ahem, truth-tellers will remain free-range for the time being, unless they really lose it and start tilting at windmills. But then that becomes a bona fide mental health issue.

Unless, of course, full-on war hysteria breaks out. In that case, while the external goons are busy pretending to be “not winning, not losing” but somehow “keeping America safe” in yet another wretched part of the world, the internal goons have to be kept busy. Rounding up undesirables would give them something to do. That’s the state of affairs in the United States and its subservient territories: Canada, Europe, Australia and New Zealand and a few others. But Washington’s propaganda isn’t working at all well in the rest of the world, be it Russia or China or Latin America.

In all of these places, Washington’s message control has more or less failed. This is why the people in Washington are in a bit of a panic, and labeling internal dissidents as a “threat” is just them flailing in search of an answer. They can’t stop lying, and they can’t even pretend to rule the world if everyone knows that they are lying, so their only option is to try to squelch every voice except their own. They may succeed at this within the US (some would say they already have) but as far as the rest of the world—good luck!

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Aint’ that the truth.

Leaking CIA Secrets Leads To Severe Punishment, Unless You Are The Boss (RT)

The problem with the lenient treatment of former CIA Director, David Petraeus, isn’t that he was lightly punished for his leaks. It is that other whistleblowers are punished at all. It’s a tale of two CIA employees. The first, Jeffrey Sterling, has just been convicted of leaking information about a bungled agency sortie to James Risen, a reporter. The operation took place almost 20 years ago, around the time everyone was doing the Macarena and Tom Cruise’s first Mission Impossible movie was released. Federal prosecutors are calling for a 24-year prison sentence for Sterling. The second, David Petraeus, has already learned his fate. He received a $100,000 fine and two-years probation. The six-figure sum may seem like a lot to you, but it’s less than the former 4-star general earns for a single speech.

Petraeus was the boss, Sterling an underling. However, Sterling’s so-called misdemeanor pales into insignificance when compared to Petraeus’ actions. The latter handed his lover, Paula Broadwell, information on the identities of covert officers, diplomatic discussions, war strategy and even private chats with the current US President, Barack Obama. This is about as top-level as it gets. Petraeus’ apologists emphasize that the difference between the two cases is that the public never learned the information that Broadwell was given. They use this to justify the leniency shown to the almost four-decade military veteran. Nevertheless, the case of John Kiriakou rather knocks this defense on the head. In 2007, Kiriakou admitted that the CIA had a secret torture program.

The following year, authorities issued criminal charges against him for slipping a journalist the name of a covert agent. As in Petraeus’ case, this name wasn’t published. Regardless, in 2012 Kiriakou was handed a 30-month federal prison sentence. He was partially released in February. Kiriakou freely admitted to his mistakes and those of the CIA. It’s pretty certain that his honesty was his downfall. On the contrary, Petraeus initially lied to FBI officials when they quizzed him about his, probably inadvertent, whistleblowing activities. Lying to federal agents is a felony that carries a sentence of up to five years in prison. For reasons unknown, the former CIA Director wasn’t charged with lying.

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Long time coming.

Maryland Governor Declares State of Emergency, Activates National Guard (CBS)

Governor Larry Hogan has declared a state of emergency and activated the National Guard to address the growing violence and unrest in Baltimore City. “I have not made this decision lightly. The National Guard represents a last resort in order to restore order,” Hogan said during a news conference Monday night. “People have the right to protest and express their frustration, but Baltimore City families deserve peace and safety in their communities and these acts of violence and destruction of property cannot and will not be tolerated.” Hogan said he executed the request 30 seconds after it was made by Mayor Stephanie Rawlings-Blake. “When the mayor called me, which quite frankly we were glad that she finally did, we signed the executive order,” he said.

“It’s obviously very disappointing to us as Marylanders and people who love the city of Baltimore. What started out as a peaceful protest … I would say 95% of the people involved were conducting themselves in a very peaceful manner, it was well under control. We had a lot of outside agitators come in from around the country, and we had some rogue gangs and young people that were just out looking to cause problems.” Major General Linda Singh, the adjutant general of the Maryland Army National Guard, said during the news conference that the guard would be out in activation beginning Monday night. Up to 5,000 troops were available to patrol the streets and protect property. Hogan said he spoke to President Obama at length about the violence.

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Curious phenomenon. You’d need to check disease rates, though.

The Hidden Lives Of Chernobyl’s Wildlife (BBC)

Automatic cameras in the Ukrainian side of the Chernobyl Exclusion Zone have provided an insight into the previously unseen secret lives of wildlife that have made the contaminated landscape their home Throughout 2015, the cameras will be positioned at 84 locations, allowing a team of scientists to record the type of animals passing through the area and where they make their home. In the first four months since the cameras were deployed, the team has “trapped” more than 10,000 images of animals, suggesting the 30km zone, established shortly after the April 1986 disaster when a nuclear reactor exploded, ejecting radioactive material across the surrounding terrain and high into the atmosphere, is now home to a rich diversity of wildlife.

The network of cameras is gathering data that will help scientists choose the most appropriate species to fit with collars that will then record the level of radioactive exposure the animal receives as it travels across the zone. “We want an animal that moves over areas of different contamination – that’s the key thing we need,” explained project leader Mike Wood from the University of Salford, UK. “So we would consider some of the larger animals, such as wolves, because they would be ideal because the way the animal moves through the areas actually affects its contamination levels.” Commenting on the herds of Przewalski’s horses, Dr Wood observed: “They seem to have adapted quite well to life within the zone. “From the images from our cameras, they are clearly moving around in quite large groups,” he told BBC News.

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“This is hardly a good starting point for a major transition.”

Norway’s Shift From Oil Starts With Two Left Feet (Bloomberg)

Norway’s prime minister is fond of saying the nation is facing a “new normal” as a decade-long boom in its petroleum industry starts to fade. Erna Solberg has given little explanation of what that means, except to say that “knowledge is the next oil” and “fish will be Norway’s Ikea,” ideas she echoed in a speech on Friday at her party’s annual convention in Oslo. It’s no wonder then that economists are scratching their heads as to what will fill the gap in the economy once oil takes up less space. The biggest element crippling the oil and non-oil industry is the exorbitant price of labor. Average hourly wage costs in Norway were 47% higher than those in the European Union last year, according to government statistics.

“And that’s after taking into account the considerable weakening of the krone through 2013 and 2014,” said Kari Due-Andresen, chief economist at Svenska Handelsbanken. “This is hardly a good starting point for a major transition.” Rising oil and gas prices over the last 15 years kept Norway afloat, even during the financial crisis when the rest of the world was suffering. As western Europe’s biggest crude producer, the country relies on oil and gas for more than one-fifth of its gross domestic product. With oil investments set to drop and Brent crude stuck around $65 per barrel, politicians, economists and the central banker agree the nation’s economy needs some remodeling. So if the oil economy is slowing, what’s Norway left with?

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There’ll be many.

BP Oil Hunt Off Australia Coast Causes Fear of Another Deepwater Horizon (BBG)

Five years after the Gulf of Mexico oil spill poured millions of barrels of crude into the sea, BP Plc is being challenged over its hunt for oil in the pristine waters off southern Australia. Just over a year before the U.K.-based company has said it expects to start drilling, environmentalists say the company hasn’t yet disclosed its full emergency-response plans for a potential spill in the Great Australian Bight, home to about 18 threatened species from whales to turtles. BP’s initial models show a less than 10% chance that a worst-case incident would lead to oil threatening areas where whales are likely to feed. It’s clear the project will face significant scrutiny before drilling begins.

“The Gulf of Mexico scenario was an absolute disaster, but the stakes are much higher out here,” said Peter Owen, the Wilderness Society’s South Australia director. “This is an undeveloped, non-industrialized part of the world, and the risks are high. It’s very deep, very rough and very remote.” BP said that it has “the technological capability and expertise to safely explore the Great Australian Bight,” according to an e-mailed statement. The company had initially planned to begin drilling in early 2016 and pushed that out because of potential delays with the rig.

More than 85% of species in the Bight aren’t found anywhere else, according to Australia’s national science agency, the Commonwealth Scientific & Industrial Research Organization. Species in the Bight include the southern right, sperm and blue whales as well as sea lions and sharks. BP estimated last year it would spend more than A$1 billion ($785 million) to drill 400 kilometers (250 miles) west of Port Lincoln, in a region it describes as “pretty much the last big unexplored basin in the whole world.” About 250 kilometers to the north, endangered southern right whales gather to give birth, drawing visitors to cliff-top lookouts on the nearby coast.

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Let’s get to number 1!

East Australia 1 Of 11 Areas Good For 80% Of World Forest Loss (Guardian)

Eastern Australia is one of the world’s 11 deforestation hotspots that together will account for 80% of global forest loss by 2030, a new report has warned. Between 3m hectares and 6m hectares of rainforest and temperate forest, mainly stretching across New South Wales and Queensland, could be lost between 2010 and 2030 on current trends, according to the World Wildlife Fund’s Living Forests report. This deforestation is part of a wider loss that could reach 170m hectares of forest worldwide by 2030 in 11 key areas, including the Amazon, Borneo, Sumatra, the Congo Basin and East Africa. Ten of the 11 areas are found in the tropics and contain some of the greatest biodiversity in the world, including animals such as tigers, orangutans and gorillas, as well as Indigenous communities.

About 70% of the eastern forests of Australia have already been cleared or disturbed, with just 18% of the area under any sort of protection, the WWF report states. Australia’s forestry loss has primarily been caused by land clearing for livestock, with unsustainable logging and mining also blamed for tree felling. WWF said the watering down of environmental protections by the previous LNP government in Queensland led to a sharp rise in land clearing, with 275,000ha torn down in the past financial year – a tripling of vegetation loss rates since 2010.

While the new Labor state government has promised to reverse this loss, the New South Wales government is set to amend land-clearing protections, despite pledging $100m to protect the state’s threatened plants and animals. “We are deeply concerned about NSW,” said Dermot O’Gorman, chief executive of WWF Australia. “These are laws that have been shown to have been effective in saving hundreds of thousands of animals, so it’s important that biodiversity continues to be protected. “Maintaining forest protections is vital at state level. We’ve lost the large majority of the eastern Australian forest, which means the remaining forests are even more important to maintain. “If business as usual continues, we will see more Australian species disappear, as well as the continuing decline of our water, topsoil and local and regional climate.”

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“Our universe, in contrast, is quite flat – and on astronomic distances, it has positive curvature..”

Is The Universe Really A 2-D Hologram? (Science Daily)

At first glance, there is not the slightest doubt: to us, the universe looks three dimensional. But one of the most fruitful theories of theoretical physics in the last two decades is challenging this assumption. The “holographic principle” asserts that a mathematical description of the universe actually requires one fewer dimension than it seems. What we perceive as three dimensional may just be the image of two dimensional processes on a huge cosmic horizon. Up until now, this principle has only been studied in exotic spaces with negative curvature. This is interesting from a theoretical point of view, but such spaces are quite different from the space in our own universe. Results obtained by scientists at TU Wien (Vienna) now suggest that the holographic principle even holds in a flat spacetime.

Everybody knows holograms from credit cards or banknotes. They are two dimensional, but to us they appear three dimensional. Our universe could behave quite similarly: “In 1997, the physicist Juan Maldacena proposed the idea that there is a correspondence between gravitational theories in curved anti-de-sitter spaces on the one hand and quantum field theories in spaces with one fewer dimension on the other,” says Daniel Grumiller (TU Wien). Gravitational phenomena are described in a theory with three spatial dimensions, the behaviour of quantum particles is calculated in a theory with just two spatial dimensions – and the results of both calculations can be mapped onto each other.

Such a correspondence is quite surprising. It is like finding out that equations from an astronomy textbook can also be used to repair a CD-player. But this method has proven to be very successful. More than ten thousand scientific papers about Maldacena’s “AdS-CFT-correspondence” have been published to date. For theoretical physics, this is extremely important, but it does not seem to have much to do with our own universe. Apparently, we do not live in such an anti-de-sitter-space. These spaces have quite peculiar properties. They are negatively curved, any object thrown away on a straight line will eventually return. “Our universe, in contrast, is quite flat – and on astronomic distances, it has positive curvature,” says Daniel Grumiller.

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Mar 172015
 
 March 17, 2015  Posted by at 12:11 pm Finance Tagged with: , , , , , , ,  


DPC Shoppers on Sixth Avenue, New York City 1903

Bull Market Is ‘Closer To The End’ Than Investors Think (MarketWatch)
Europe’s Trapdoor Slams Shut (Vilches)
March 23 Tsipras, Merkel Talks Could Be Chance To Break Impasse (Kathimerini)
Greek PM Tsipras Says There Is No Going Back To Austerity (Reuters)
Austerity Policy Failed In Whole Of Europe, Not Just Greece – Tsipras (RT)
ECB Reports Only €9.8 Billion In Bond Purchases In First Full Week Of Q€ (ZH)
If Greece Exits, Don’t Expect Us To Follow: Italy (CNBC)
Italy’s Debt Burden Now At Record High 132% Of GDP (RT)
China Trust Firms Shift, Rather Than Reduce, Shadow Banking Risk (Reuters)
A US Shadow Banking Sector Has Gotten 65 Times Larger (CNBC)
Corporations Get $760 Back For Every $1 of US Political Donations (Zero Hedge)
The Volatility / Quantitative Easing Dance of Doom (Nomi Prins)
Public Banking: Ayn Rand’s Worst Nightmare (Phillip Doe)
American Amoeba (Jim Kunstler)
US Intel Stands Pat on MH-17 Shoot-Down (Robert Parry)
Petrobras Scandal Widening as Braskem Named in Morass (Bloomberg)
A $250,000 Tour With One Aim: Get Chinese to Buy a Home
Nationwide Protests In Canada To Denounce New Anti-Terror Law (RT)
Nuclear Expert Arnie Gundersen Warns Of ‘Chernobyl On Steroids’ In UK (Ind.)
Great Barrier Reef Wins Protection With Ban on Waste Dumping (Bloomberg)
Earth Has Exceeded Four Of The Nine Limits For Hospitable Life (Ind.)

“Rising interest rates can provide significant headwinds to a bull market..”

Bull Market Is ‘Closer To The End’ Than Investors Think (MarketWatch)

Spring training has begun, and with it the dreams of baseball fans everywhere that this year their team will win it all. On Wall Street, investors hope that one of the longest bull markets in memory can keep rolling. But one All-Star who called this bull from its outset now thinks we’re in the seventh-inning stretch, possibly the top of the ninth. Jim Stack is the president of Whitefish, Montana-based InvesTech Research, which is on the Hulbert Financial Digest’s Honor Roll of top newsletters over the past 15 years, and Stack Financial Management, which manages more than $1 billion of investors’ money. He’s been cautious for some time, as we wrote last January. Now, in a special alert, he suggests that subscribers cut their equity exposure to 76% of their holdings, from 80%, and put the rest in cash.

That may sound like a lot, but it’s actually the lowest equity and highest cash position he’s recommended since the bull market began in March 2009. “We’re most likely in the later third of the bull market and closer to the end than we think,” Stack said in an exclusive interview with MarketWatch. And maybe even the final year. “We could see this bull market peak this year, whether it’s already done so or could within the next six to nine months.” If the bull continues through May and the S&P 500 Index adds another 5% to its March 2 all-time closing high of 2017.48, this will be the third-longest and third-biggest bull market of the past 80 years, Stack said. But although bull markets don’t die of old age, there are signs “it’s getting ‘late in the bull game,’ ” he wrote.

Stack is troubled by what he sees as the media’s frothy coverage of the economy. The reaction to the latest jobs report — “Jobs Boom Continues” and “Party Like It’s 1999” were two headlines I found — prompted his latest “sell” signal. “The U.S. economy is hitting on all cylinders,” he said. “Bull markets characteristically peak when you have strong economic news and pressures on the Federal Reserve to take away the punch bowl.” He sees anecdotal evidence of mounting wage pressures, putting the Fed on course to raise rates later this year. We may get more clarity after the Fed’s March meeting ends Wednesday. “Rising interest rates,” he explained, “can provide significant headwinds to a bull market,” which he calls “one of the more interest-rate-sensitive bull markets in our lifetime.”

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“..the Greek ‘impossible triangle’ can be solved in great style as Alexander the Great had in solving the Gordian Knot.”

Europe’s Trapdoor Slams Shut (Vilches)

Nothing has changed with the ‘new’ agreement between Greece and its European ‘partners’ because the Greek so-called ‘impossible triangle’ stands in their way. The three mutually incompatible vertices of the Greek ‘impossible triangle’ are : (1) The Syriza ruling party staying in power. (2) Reversing the current Troika austerity programs. (3) Greece staying in the euro. The uncompliable list of promises made to the Greek people by Syriza has now been replaced by an equivalent uncompliable list of promises made to the Troika. The European soul-searching exercise is thus over, leaving no further room for self-correction. The Troika is back in Athens with yet heavier boots on the ground pushing for the very same things it always wanted –and needs– from exemplary Greece.

Meanwhile, government money is running out fast, as we speak. Near term payments of all sorts have been jeopardized with no solution in sight. Major events –including a referendum– are highly probable very soon in Greece, way before the June ‘agreed’ reset date which can’t solve anything anyway. Thus, the stage has been set for the Pan-European Grand Project to come apart at the seams. The 2010 – 2012 press rehearsal is over, now it’s for good. Adrift in European shallow waters, the Greek ship will now run aground into unchartered political rocks. Europe’s own trapdoor has slammed shut. [..]

So here comes the Alexander-the-Great moment for Greece whereby the Gordian knot has to be cut apart, high and dry. Because no matter the rationale or how the problem is sliced… or temporarily postponed… by having Vertex 1 and 2 firmly embodied into the Greek current power structure, the final outcome necessarily means the devaluation of the Greek currency, namely the euro (or rather the Deutsche Mark?) And that means Grexit. Additionally, repudiating the USD $0.5 trillion real, effective sovereign debt (***) would jump start the Greek economy with primary account surplus on the ‘get go’ similarly to what happened in Argentina. Russia and/or China would probably (and eagerly) take it from there for their own good reasons. So with Vertex 3 demolished, the “impossible triangle” is instantly solved and both Greece and Euclidian geometry would find themselves back in business… with a lot of hardship ahead.

There will be no shortage of costs, both inside and outside of Greece, both inside and outside of Europe. But such costs would be far lower for everybody than having Greece turn into an anomic state. Greeks know this already and Europeans are finally finding out. There will also be additional Grexit losses because of the euro area GDP reduction. That’d be another Eurozone problem, not Greece’s, something which Brussels, Paris and Berlin should have thought about long ago. So make no mistake: the Greek ‘impossible triangle’ can be solved in great style as Alexander the Great had in solving the Gordian Knot.

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Finally the long overdue invitation.

March 23 Tsipras, Merkel Talks Could Be Chance To Break Impasse (Kathimerini)

Prime Minister Alexis Tsipras is to meet German Chancellor Angela Merkel in Berlin on March 23 for talks expected to focus on Greece’s looming cash crunch even as bilateral tensions remain high. Tsipras is expected to use the meeting, proposed by Merkel on Monday, to seek a “political solution” to the current deadlock that would allow the release of much-needed funding. However, sources close to Merkel indicated that Athens should not foster high hopes for the meeting. “Our aim is the implementation of the February 20 agreement and to keep Greece in the eurozone,” a source said. In the meantime, technical experts from the Greek side and the creditors will continue talks in Brussels on Wednesday as diplomats prepare for an EU leaders’ summit on Thursday and Friday.

Tsipras had been planning to raise the matter of Greece’s funding needs and reform proposals with the German chancellor on the sidelines of the summit. Sources conceded that the meeting is likely to be “difficult,” adding that Tsipras may also seek a meeting with European Commission President Jean-Claude Juncker and European Central Bank President Mario Draghi. Sources close to Tsipras welcomed Merkel’s overture to the Greek premier, noting that she had so far rejected the prospect of a bilateral meeting. During a phone call with Tsipras on Monday, Merkel underlined the critical nature of the current situation and suggested that a face-to-face meeting would be a good idea, sources said.

The meeting could be the last chance for the two leaders to avert an impasse which some prominent Greek government officials blame on “circles in the EU” that want the current administration to fall and are pushing it to implement measures the previous conservative-led coalition had agreed to. In an interview with Ethnos newspaper published on Monday, Tsipras insisted that further tough measures were out of the question. “Whatever obstacles we may encounter in our negotiating effort, we will not return to the policies of austerity,” Tsipras told Ethnos. One reason that creditors appear to be holding a hard line is the Greek government’s delay in enforcing economic reforms. Another is a series of initiatives that have been interpreted as aggressive vis-a-vis Greece’s creditors, notably Tsipras’s decision to resurrect the country’s demands for war reparations from Germany.

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And he means it too.

Greek PM Tsipras Says There Is No Going Back To Austerity (Reuters)

Greece will not accept any return to austerity, leftist Prime Minister Alexis Tsipras said on Monday, adding that he was convinced he would strike a deal with international partners to keep finances afloat. “The key for an honorable compromise (with the EU/IMF creditors) is to recognize that the previous policy of extreme austerity has failed, not only in Greece, but in the whole of Europe,” Tsipras told daily Ethnos in an interview. Greece’s left-wing government won elections in January on a pledge to roll back budget rigor and renegotiate the terms of a €240 billion bailout. But it has faced resistance from euro zone partners who are unwilling to offer major compromises.

Although Athens has been granted a four-month extension to the bailout deal, the Feb. 20 accord did not give Greece access to aid pledged to it from the euro zone and the International Monetary Fund, which has led to a cash crunch. To obtain the remaining aid, Athens must agree on a revised package of reforms. With cash running low, the government has sought to issue more short-term debt, but the European Central Bank has so far refused to give its green light. Tsipras said the bailout policies of the last five years had led to an unprecedented recession, record unemployment and a humanitarian crisis. Athens could find common ground with its partners based on its proposed reforms, but talks remain tough.

“Whatever obstacles we may encounter in our negotiating effort, we will not return to the policies of austerity,” the prime minister said. Asked whether the government had an alternative plan if its partners continued to refuse it any leeway on its funding needs, Tsipras said he expected the issue would be resolved at this week’s EU summit, scheduled for March 19 and 20. “I don’t believe we will need to apply alternative plans because the issue will be solved at a political level by the end of the week in the run up to the EU summit, or, if necessary, at the EU summit (itself),” he told the paper.

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And here’s why.

Austerity Policy Failed In Whole Of Europe, Not Just Greece – Tsipras (RT)

The policy of extreme austerity has failed not only in Athens, but in the whole of Europe, Greek Prime Minister Alexis Tsipras has said. His comments come as the standoff with key creditor Germany mounts. “The key for an honorable compromise (with the EU/IMF creditors) is to recognize that the previous policy of extreme austerity has failed, not only in Greece, but in the whole of Europe,” Tsipras said in an interview to daily Ethnos, Reuters reports. The prime minister is convinced he’ll reach an agreement with international creditors to keep the country’s finances afloat. Tsipras’ pre-election promise to drop austerity helped him win support from Greeks, but the prime minister’s anti-austerity tone has slightly faded since then.

His reform plan worked out in late February to get a bailout extension caused protests against the Tsipras cabinet. People were angry as they felt the new government had failed to fulfill its anti-austerity election pledge. On Monday, the prime minister reaffirmed his government would not return to austerity whatever it takes. “Whatever obstacles we may encounter in our negotiating effort, we will not return to the policies of austerity,” Tsipras was cited as saying by Reuters. He also expressed hopes that the issue would be resolved at the EU summit, scheduled for March 19 and 20.

“I don’t believe we will need to apply alternative plans because the issue will be solved at a political level by the end of the week in the run up to the EU summit, or, if necessary, at the EU summit (itself),” he said. Greece’s bailout program extension was approved by the so-called troika of lenders in February; nevertheless, Greece hasn’t received the aid from the ECB. Athens must agree on a revised package of reforms in order to obtain the remaining aid from the eurozone and IMF. The prime minister also blames eurozone austerity for the country’s unprecedented recession. Since 2010, when Greece undertook the austerity measures, the economy has lost a quarter of its value, a third of Greeks live below the poverty line and the unemployment rate has reached 30%.

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They’re all looking for escape velocity…

ECB Reports Only €9.8 Billion In Bond Purchases In First Full Week Of Q€ (ZH)

Unlike the Fed, the ECB’s Q€ program is far more opaque, far more ad-hoc, and far more improvised (and at the rate it is soaking up already negligible collateral as JPM explained yesterday, soon to be far more abbreviated). In fact, without a daily POMO preview (such as what the Fed used to provide) nobody has any idea what is going or what the ECB will be buying until a week after the fact. Today, for the first time, the ECB provided the bare minimum data on its “Public sector purchase program” i.e., how much debt it had purchased in the first week of the ECB’s QE. The answer: only €9.8 billion.

This being the central bank which refused to respond to a Bloomberg FOIA seeking to uncover what the ECB knew when, about Goldman’s Greek FX swaps, don’t expect any additional data breakdown, such as which CUSIPs the ECB has purchased, or which nations benefitted the most from the ECB’s money printing generosity. All of that information may lead to the heads of ordinary European peasants exploding, and who can blame the ECB. After all this comes from a central bank servicing a current Commissioner who said “there can be no democratic choice against the European treaties” and whose former Commissioner said “democratic governments are often wrong. If you trust them too much they make bad decisions.”

In fact, it is best to not give any information to these “democratic governments” and their constituent peasantry at all. Because a few central-planning BIS bankers always know best. Snyde comments about Europe’s democratic union aside, the take home, and why we said “only”, is that a mere €9.8 billion in bond purchases was enough to break the European bond market, to expose the complete lack of collateral and in the process soak up all available liquidity. So less than €10 billion down, €1.1 trillion to go, and the ECB hopes to have something resembling a bond market left afterwards? Good luck.

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“Because the fundamentals in Italy have very much strengthened over the recent past..” Yeah, right. Wait till you see the artcile below this one.

If Greece Exits, Don’t Expect Us To Follow: Italy (CNBC)

No matter what the Greeks may say, Italy is not at risk of leaving the euro if Greece does, Italy’s Finance Minister told CNBC. “I think that any relationship between ‘Grexit’ and Italy is out of place,” said Pier Carlo Padoan, using the parlance for a Greek exit from the currency zone while speaking on the sidelines of the Ambrosetti conference on Lake Como. “Italy has significantly strengthened its position. Italy is gaining a lot of confidence in the markets.” Greece and its European partners are in the middle of tough negotiations over the conditions Greece must meet in order to secure billions more in bailout money.

Without those funds, Greece is at high risk of having to put capital controls in place, which would significantly raise the likelihood that the country would leave the 19-member currency union. New Greek Finance Minister Yanis Varoufakis has repeatedly told reporters, hedge fund managers, and anyone else who will listen that if Greece were to leave the Euro, the markets would start to price in the risk of Italy leaving the currency zone as well. When asked if Varoufakis is right, he responded: “I don’t know whether it is right. I think that any ‘Grexit’ option would be very bad, and I think it’s [in the] interest of everybody to be united within the euro and to move toward a stronger growth prospect for Greece.”

Padoan added that he does not believe that Italy would face substantially higher interest rates in the face of Greek exit. “I don’t think so, because to the extent that [interest rates] price risk, the Italian risk will not increase as a consequence of a Greece accident,” he said, then adding, “Because the fundamentals in Italy have very much strengthened over the recent past as for instance the assessment by the commission of our fiscal and growth position shows.”

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Nothing much has improved, has it?

Italy’s Debt Burden Now At Record High 132% Of GDP (RT)

Italy’s debt load is now €2.1659 trillion, the Bank of Italy said Friday. The country’s public debt increased by €31 billion in January, bringing the total close to the record-high of €2.1677 billion euro recorded in July 2014. Italy’s public debt is only second to Greece in the eurozone. The main reason debt spiked in January is because the Treasury increased its available liquidity, or money supply, by €36.3 billion euro, bringing the total to €82.6 billions, Italy’s ANSA news agency reported Friday. Gross domestic product to debt in Italy is near 132%, compared to 127.9% in 2013, or 102% two years ago.

Italy, the third largest economy in Europe, has had its economic woes overshadowed by the looming crisis in Greece. Rome hasn’t seen quarterly growth since mid-2011, and the economy is in need of economic resuscitation. Though the European Commission isn’t monitoring Italy as strictly as Greece, Rome’s budget is still under “special surveillance.”The European Commission mandated debt-to-GDP target is 60%. Italy’s growth forecast for 2015 is 0.5%, a much rosier picture after the economy’s less than stellar performance in 2014, when growth stagnated in the fourth quarter. In 2016, Italy’s central bank expects 1.5% expansion.

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The $8+ trillion elephant in the China shop.

China Trust Firms Shift, Rather Than Reduce, Shadow Banking Risk (Reuters)

China’s trust firms, with total assets of $2.2 trillion, are shifting more cash into frothy capital markets and over-the-counter (OTC) instruments instead of loans – blunting regulators’ efforts to reduce shadow banking risk. By redirecting money into capital markets and OTC products like asset-backed securities (ABS) and bankers’ acceptances, trusts are acting less like lenders and more like hedge funds or lightly regulated mutual funds. And the shift – a response to a clampdown last year on trust lending to risky real estate and industrial projects – means a significant chunk of shadow banking risk is migrating rather than shrinking. China trusts take in funds from retail and institutional investors and re-lend or reinvest that money, often in parts of the economy that struggle to obtain bank credit, like mid-sized private enterprises or municipal industrial projects.

As of end-2014, total trust assets were 14 trillion yuan, according to China Trust Association data. Previously, people who bought into opaque wealth management products, many of which were peddled by banks but actually backed by trust assets, found themselves heavily exposed to real estate loans. Trust firms’ changing asset mix means these investors may now instead find themselves exposed to high-yield corporate debt (junk bonds), volatile stock funds or risky short-term OTC debt instruments. While this could help keep the wealth management industry running, and by extension help the trust industry stay afloat, it could delay efforts to properly price risk. A Reuters analysis of China Trust Association data shows that while loans outstanding grew just 8% last year – far below the 62% growth in 2013 – growth in obscure asset categories including “tradable financial assets” and “saleable fixed-term investments” was 77% and 47%, respectively.

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Just what we needed. But CNBC says it’s all just fine: they have evolved…

A US Shadow Banking Sector Has Gotten 65 Times Larger (CNBC)

Shadow banking in general has come back to life after getting hammered during the financial crisis, but one segment has been especially rampant. Peer-to-peer (P2P) lending, in which loans are made privately through individuals who most often connect through a network of relatively new websites, has exploded over the past five years. It is now the fastest-growing sector of non-bank lending, according to an exhaustive Goldman Sachs report on the shadow banking industry. The P2P industry had just $26 million in loan issuance back in 2009, as the worst of the banking crisis passed; but that figure now stands at a robust $1.7 billion.

While that’s still a fraction of the total $12 trillion in loans across the U.S., and even pales in comparison to the $4 trillion in total shadow bank loans, it represents a growth of 65 times during the period. “Personal lending (installment and card) is likely to continue to see disruption as the benefits of a lesser regulatory burden, lower capital requirements and a slimmer cost structure [over time] drive pricing advantages for new players…leading to share moving away from traditional players,” Goldman said in its report. Broadly speaking, shadow banking refers to nonbank lending, with total liabilities in the industry put at $15 trillion. That’s a decline from the 2007 peak of $22 trillion.

The name originated from former Pimco executive Paul McCulley, who used it to describe the myriad institutions that helped provide the easy-money financing that led to the subprime mortgage market crash, which in turn triggered the financial crisis. While the term became a pejorative closely tied to the crisis, the industry has evolved. As banks find themselves under tighter regulatory scrutiny, customers are turning back to nonbank lenders for financing. The shadow firms don’t face the same regulatory burdens as banks, because they don’t take deposits and are thus less constrained when making loans.

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What a surprise, right?!

Corporations Get $760 Back For Every $1 of US Political Donations (Zero Hedge)

The first time we read the recent analysis by the Sunlight Foundation in which it combed through 14 million corporate records, including data on campaign contributions, lobbying expenditures, federal budget allocations and spending, in order to determine the “rate of return” on lobbying and spending to buy political goodwill, we were left speechless. To be sure, we had previously shown that when it comes to the rate of return on lobbying, the rates were simply staggering, and ranged anywhere between 5,900% for oil subsidies, to 22,000% for multinational tax breaks and even higher for America’s legal drug dealers.

But nothing could prepare us for this. According to the foundation’s analysis, between 2007 and 2012, 200 of America’s most politically active corporations spent a combined $5.8 billion (with a B) on federal lobbying and campaign contributions. What they gave pales compared to what those same corporations got: $4.4 trillion (with a T) in federal business and support. Putting that in context, the $4.4 trillion total represents two-thirds of the $6.5 trillion that individual taxpayers paid into the federal treasury. Said otherwise, by “spending: a paltry $6 billion to bribe the US government, or just a little more than what GM will spend on stock buybacks alone, US corporations are getting the direct benefit of two-thirds of US taxpayers’ labor!

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“Yellen had a seat at the Clinton administration banking deregulation table when Glass-Steagall was summarily dismantled..”

The Volatility / Quantitative Easing Dance of Doom (Nomi Prins)

What began with the US Federal Reserve became a global phenomenon of subsidizing the financial system and its largest players. Most real people – that don’t run hedge funds or big banks or leverage other peoples’ money in esoteric derivatives trades – have their own meager fortunes at risk. They don’t have the power of ECB head, Mario Draghi to issue the ‘buy’ order from atop the ECB mountain. Nor do they reap the benefits. Retail sales are down because people have no extra money and can’t take on excess debt through credit cards forever. They aren’t governments or central banks that can print when they want to, or big private banks that can summon such assistance at will. Federal Reserve Chair, Janet Yellen recently chastised these bankers. This, while the Fed has become their largest client and the world’s biggest hedge fund.

While she wags her finger, the Fed is paying JPM Chase to manage the $1.7 trillion portfolio of mortgage related assets that it purchased from the largest banks. In other words, somewhere along the line, the public is both paying to buy nefarious assets from the big banks at full value, thereby supporting an artificially higher price and demand for these and similar assets, and paying the nation’s largest bank for managing them on behalf of the Fed. Yellen says things like “poor values may undermine bank safety” and all of a sudden she’s on an anti-bank rampage? What about the fact that just six banks control 97% of all trading assets in the US banking system and 95% of derivatives? Or that 30 banks control 40% of lending and 52% of assets worldwide?

Think about the twilight zone squared logic of this. Yellen’s predecessors, Alan Greenspan and Ben Bernanke, enabled the path of the US banking system to become more concentrated in the hands the Big Six banks, which have legacy connections to the Big Six banks that drove the country to disaster during the 1929 Crash, and have been at the forefront of the nexus of political-financial power polices for more than a century. Yellen had a seat at the Clinton administration banking deregulation table when Glass-Steagall was summarily dismantled thereby enabling big banks to become bigger and more complex and risky. Those commercial banks that didn’t hook up with investment banks back then, got their chance in the wake of the financial crisis of 2008. They also concocted 75% of the toxic assets that were spread globally and the associated leverage behind them in the lead up to 2008.

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An alternative worth contemplating/

Public Banking: Ayn Rand’s Worst Nightmare (Phillip Doe)

A few weeks ago a Colorado grassroots group, Be the Change, of which I am a board member, sponsored an all -day conference on public banking. I know, it sounds like the equivalent of an all- day climate debate between aging Republican Senators, but the public banking concept may have some value, it might even surprise you. Indeed, it could provide a source of funding for desperately needed infrastructure, particularly at the local level. Over 20 states are looking into the public banking option. But only one, North Dakota has a public bank, and it dates from the populist era, early in the last century. In a recent WSJ article the North Dakota bank was lauded for having a return on investment of almost 20%, a 70% greater return than either Goldman-Sachs or J.P. Morgan, two of Wall Street’s best bullies.

From a short-term perspective, a public bank’s chief advantage is that revenues generated at the city, county, and state level from taxes and fees, stay in the state. They would no longer be sent to the grand casino that has become Wall Street where the prospects of another melt down grow. The recent actions of Congress make it likely that giant retirement funds such as Colorado’s public employee’s retirement plan, PERA, can be appropriated to cover Wall Street speculative losses should a melt down occur. Even FDIC insured personal accounts might be at risk. Moreover, the high management fees Wall Street charges for using our money to gamble with would be eliminated, thus greatly increasing the amount available for local and regional projects of wide public support and interest.

Critical to a public bank is its structure. If it looks like just another bank, public support and interest will be ho hum, at best. But if it is chartered so that management rests with a citizen advisory board, with a professional banking staff answering to them, interest will be sustained, with the public interest more likely to be served. And if the banking management is paid on a scale consistent with prevailing professional salaries within the state or region it serves, a sense of common or shared interest might be possible.

Adopting anything resembling Wall Street’s outrageous self-dealing in salary and bonus structures would be self-defeating. Salaries based on public sector pay for professionals should be the model. After all bankers are no better than engineers, teachers, and scientists, as the numerous bank failures throughout our history clearly demonstrate. Teachers have a much better success ratio and a much tougher work environment. In the long term, city and regional banks, the latter called mutual banks by public banking advocates, hold more promise. The closer to home the decision-making, the better the potential outcome is a truth self-evident. A dithering, science denying, money-corrupted, war-mongering Washington provides the mother of all counterpoints.

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“The transparent truthlessness of the Fed’s basic premises go far to explain the chasm between official policy and reality..”

American Amoeba (Jim Kunstler)

The money-moving world waits on tenterhooks for the Wednesday appearance of America’s oracle, Janet Yellen, to step out of her grotto and state whether or not she feels twinges of patience. Wikipedia notes that Pythia, the original priestess of Delphi “…delivered oracles in a frenzied state induced by vapors rising from a chasm in the rock, and that she spoke gibberish which priests interpreted as the enigmatic prophecies preserved in Greek literature.” Some things never change. Patience for what? Well, whether to raise the Federal Reserve’s benchmark short-term interest rate from near-zero to something microscopically above zero. This is what the world foolishly turns on. And, of course, also some oracular hint as to whether this momentous move might occur in April, June, September, or not at all.

Some canny observers of the vaudeville that US money policy has become — namely, Jim Rickards, David Stockman, Peter Schiff — maintain that Yellen and her Fed are boxed in and can really do nothing. Their policies and interventions regarding the flows of capital have done nothing so far but disable the normal operations of markets and distort the valuation of everything, especially the cost of renting money itself — for that is what happens when you take out a loan. The net result of all that is a financial picture that no longer reflects anything truthful about the actual economy, being a trade in goods and services.

The transparent truthlessness of the Fed’s basic premises go far to explain the chasm between official policy and reality — though it does not explain the appetite for plain lying of the supposedly informed minority cohort of the public, the deciders among us in business, politics, and media. For instance, the employment numbers that came out of the federal government ten days ago saying that the jobless rate is just over 5%. Everybody not in a special ed class in America knows that this is a barefaced lie. But nobody except a few mavericks on the web (see above) object to it. Lesser official oracles such as The New York Times and the Wall Street Journal report the lie without reservation and it gets absorbed into the body politic like any other morsel of protoplasm into the mindless amoeba that America has become.

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Comprehensive history of MH17 intel. US ‘intelligence’ hasn’t updated its data since July. Wonder why. Could it be that…?

US Intel Stands Pat on MH-17 Shoot-Down (Robert Parry)

Despite the high stakes involved in the confrontation between nuclear-armed Russia and the United States over Ukraine, the US intelligence community has not updated its assessment on a critical turning point of the crisis – the shooting down of Malaysia Airlines Flight 17 – since five days after the crash last July 17, according to the office of the Director of National Intelligence. On Thursday, when I inquired about arranging a possible briefing on where that US intelligence assessment stands, DNI spokesperson Kathleen Butler sent me the same report that was distributed by the DNI on July 22, 2014, which relied heavily on claims being made about the incident on social media. So, I sent a follow-up e-mail to Butler saying: “are you telling me that US intelligence has not refined its assessment of what happened to MH-17 since July 22, 2014?”

Her response: “Yes. The assessment is the same.” I then wrote back: “I don’t mean to be difficult but that’s just not credible. US intelligence has surely refined its assessment of this important event since July 22.” When she didn’t respond, I sent her some more detailed questions describing leaks that I had received about what some US intelligence analysts have since concluded, as well as what the German intelligence agency, the BND, reported to a parliamentary committee last October, according to Der Spiegel. While there are differences in those analyses about who fired the missile, there appears to be agreement that the Russian government did not supply the ethnic Russian rebels in eastern Ukraine with a sophisticated Buk anti-aircraft missile system that the original DNI report identified as the likely weapon used to destroy the commercial airliner killing all 298 people onboard.

Butler replied to my last e-mail late Friday, saying “As you can imagine, I can’t get into details, but can share that the assessment has IC [Intelligence Community] consensus” – apparently still referring to the July 22 report. Last July, the MH-17 tragedy quickly became a lightning rod in a storm of anti-Russian propaganda, blaming the deaths personally on Russian President Vladimir Putin and resulting in European and American sanctions against Russia which pushed the crisis in Ukraine to a dangerous new level. Yet, after getting propaganda mileage out of the tragedy – and after I reported on the growing doubts within the US intelligence community about whether the Russians and the rebels were indeed responsible – the Obama administration went silent.

In other words, after US intelligence analysts had time to review the data from spy satellites and various electronic surveillance, including phone intercepts, the Obama administration didn’t retract its initial rush to judgment – tossing blame on Russia and the rebels – but provided no further elaboration either. This strange behavior reinforces the suspicion that the US government possesses information that contradicts its initial rush to judgment, but senior officials don’t want to correct the record because to do so would embarrass them and weaken the value of the tragedy as a propaganda club to pound the Russians.

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Haven’t reached the bottom of this pit by a long shot.

Petrobras Scandal Widening as Braskem Named in Morass (Bloomberg)

The staggering reach of Petroleo Brasileiro SA’s corruption scandal is getting even bigger. Braskem, Latin America’s biggest petrochemicals maker by sales, became the latest company implicated in testimony alleging it paid bribes to the state-controlled oil producer in return for contracts. While Braskem denied the accusations, its $750 million of bonds due 2024 plummeted 7.9% last week, the most among high-grade emerging-market debt. The allegations against Braskem underscore how pervasive the alleged kickbacks were in Brazil. The federal investigation has already embroiled the nation’s biggest builders and rig makers while fueling losses in the bonds of banks, the government and even a state pension fund.

“The whole scandal is damaging more and more Brazilian companies from all segments, and Braskem can be seen as the latest example,” Leonardo Kestelman, a money manager at Dinosaur Securities, said by telephone from Sao Paulo. “People just prefer to hit the sell button instead of waiting.” Sao Paulo-based Braskem denied any irregularities in its dealings with Petrobras in e-mail to Bloomberg News on March 11. “All the payments and contracts between Braskem and Petrobras followed the legal requirements and were approved in a transparent manner in accordance with the governance rules of both companies,” Braskem said. Braskem’s 6 billion reais ($1.8 billion) in cash and revolving credit facilities are enough to cover debt payments for the next 47 months, the company said.

“Braskem understands that the oscillation of its securities doesn’t reflect its credit quality,” the company said. Braskem also said that most of its revenue is tied to the dollar, which has surged against the real. Braskem paid annual bribes, initially set at $5 million, to buy crude derivatives such as naphtha and propylene at low prices from 2006 to 2012, ex-Petrobras executive Paulo Roberto Costa and admitted money launderer Alberto Youssef said in testimony published on the Supreme Court’s website on March 6.

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China prints monopoly money and has its people buy up America with it. And Australia, New Zealand etc.

A $250,000 Tour With One Aim: Get Chinese to Buy a Home

Just how confident is Los Angeles property broker Erik Coffin that he can interest Chinese clients in high-end Las Vegas villas? He’s charging $4 million a month for a quick glimpse. It isn’t just any tour. The marketing push is set to start next month for these twice-monthly journeys that cost $250,000 a pop for a seven-day, private jet and Rolls Royce-chauffeured trip to the American heartland. Eight-person groups also will be offered consultations on plastic surgery, picking the sex of a child and wealth-management.
“It’s already a win for us,” said Coffin, 42, who employs 18 Mandarin speakers, almost a third of his staff, at Gotham Corporate, which recently opened an office in Beijing Wealthy Chinese have been stocking up on overseas real estate for at least the past five years, according to SouFun, China’s biggest real estate website.

Now, entrepreneurs such as Coffin are banking on that demand to create an entirely new industry to cater to their needs – everything from websites and brokers to developers, lawyers and international marketers. “Chinese consumers used to come to us and say, ‘Where can I buy with $500,000?,’’ said Andrew Taylor, 44, who helps run Juwai.com, a four-year-old Shanghai-based real estate platform catering to Chinese clients seeking homes overseas. ‘‘Now they are looking at three or four countries at the same time.’’ Juwai, which means ‘‘Live Abroad,’’ says it has more than 4.8 million property listings in 58 nations. There’s no shortage of clients: 60% of China’s wealthiest are contemplating a move, the site says.

In Beijing, a marketing campaign sponsored by SouFun touts a 12-day ‘‘Gold-Digging U.S. tour.” The Chinese capital was also host last weekend to a three-day foreign property and immigration exhibition, the second of its kind in four months. Among destinations on offer: Portugal (“get a residence permit for the whole family”); Japan (“pass on your ownership for generations”); and the U.S. (again, “invest by one person, get a green card for the whole family”). “We used to think these buyers are local tycoons,” said Ben Liu, Shanghai-based marketing director at the American Regional Center for Entrepreneurs, which helps Chinese buyers invest in U.S. properties through the EB-5 program. “They are now entrepreneurs or higher mid-class professionals, such as doctors and engineers.”

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Five eyes squared.

Nationwide Protests In Canada To Denounce New Anti-Terror Law (RT)

Thousands of demonstrators have united across Canada to take action against proposed anti-terrorism legislation known as Bill C-51, which would expand the powers of police and the nation’s spy agency, especially when it comes to detaining terror suspects. Organizers of the ‘Day of Action’ said that “over 70 communities” across Canada were planning to participate on Saturday, according to StopC51.ca. The biggest gatherings were reported in Montreal, Toronto, Vancouver, Ottawa and Halifax. “I’m really worried about democracy, this country is going in a really bad direction, [Prime Minister Stephen] Harper is taking it in a really bad direction,” protester Stuart Basden from Toronto, the Canadian city which saw hundreds of people come out, told The Star. “Freedom to speak out against the government is probably [in] jeopardy…even if you’re just posting stuff online you could be targeted, so it’s a really terrifying bill,” Basden added.

The ruling Conservative government tabled the legislation back in January, arguing that the new law would improve the safety of Canadians. Demonstrators across the nation held signs and chanted against the bill, which they believe violates Canadian civil liberties and online privacy rights. Protester Holley Kofluk told CBC News that the legislation “lacked specificity…it’s just so much ambiguity, it leaves people open [and] vulnerable.” One of the protest organizers in Collingwood, Jim Pinkerton, shared with QMI Agency that he would like to see the Canadian government “start over with Bill C-51 with proper safeguards and real oversight.” “We need CSIS to be accountable. It’s not OK for CSIS to act as the police, which is what’s indicated in Bill C-51. We need accountability and Canadians deserve that,” Pinkerton said.

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Yay! New nukes!

Nuclear Expert Arnie Gundersen Warns Of ‘Chernobyl On Steroids’ In UK (Ind.)

An American nuclear expert has warned that Westinghouse’s proposed reactor for Cumbria needs a $100m (£68m) filter to safeguard against a leak that would turn the region into “Chernobyl on steroids”. Arnie Gundersen lifted the lid on safety violations at a nuclear firm in 1990 – he claimed to have found radioactive material in a safe – and was CNN’s resident expert during the Fukushima nuclear disaster in Japan in 2011. Mr Gundersen told The Independent that he is concerned by designs for three reactors proposed for a new civil nuclear plant in Cumbria. A nuclear engineering graduate by background, Mr Gunderson believes that the AP1000, designed by the US-based giant Westinghouse, is susceptible to leaks.

The reactor has been selected for the proposed £10bn Moorside plant, a Toshiba-GDF Suez joint venture that will power six million homes. It is going through an approval process with the Office for Nuclear Regulation (ONR). Mr Gundersen, who visited the Sellafield nuclear facility in Cumbria last week, warned that any leak would be like “Chernobyl on steroids”, referring to the 1986 nuclear disaster that killed 28 workers within four months. He passed on some of these fears to MPs at an event in Parliament during his visit to the UK. He said: “Evacuation of Moorside would have to be up to 50 miles. You could put a filter on the top of the AP1000 to trap the gases – that would cost about $100m, which is small potatoes. “If this leaks it would be a leak worse than the one at Fukushima. Historically, there have been 66 containment leaks around the world.”

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Good.

Great Barrier Reef Wins Protection With Ban on Waste Dumping (Bloomberg)

Australia will ban companies from dumping waste in the Great Barrier Reef marine park, a victory for environmental groups that have long campaigned to protect the World Heritage-listed area. The entire 345,000 square kilometer (133,200 square mile) park will be protected under the plan to stop the disposal of dredging waste, Environment Minister Greg Hunt said Monday. “Improving the Great Barrier Reef’s health and resilience requires governments and the community to work together,” Hunt said in a statement. The move will ensure the reef “remains one of the most biologically diverse places on Earth,” he said.

Environmental groups have campaigned against dredge dumping near the reef and last year lodged a legal challenge after North Queensland Bulk Ports Corp. was given the right to dispose of spoil from a coal port expansion at sea. Ports Australia said in a statement Monday the ban would threaten the nation’s economy and the long-term viability of ports in the northeastern state of Queensland. The government has “allowed misguided activism aimed at closing down Australian coal exports” to influence policy, Ports Australia CEO David Anderson said.

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And counting.

Earth Has Exceeded Four Of The Nine Limits For Hospitable Life (Ind.)

Humanity has raced past four of the boundaries keeping it hospitable to life, and we’re inching close to the remaining five, an Earth resilience strategist has found. In a paper published in Science in January 2015, Johan Rockström argues that we’ve already screwed up with regards to climate change, extinction of species, addition of phosphorus and nitrogen to the world’s ecosystems and deforestation. We are well within the boundaries for ocean acidification and freshwater use meanwhile, but cutting it fine with regards to emission of poisonous aerosols and stratospheric ozone depletion. “The planet has been our best friend by buffering our actions and showing its resilience,” Rockström said. “But for the first time ever, we might shift the planet from friend to foe.”

Rockström came up with the boundaries in 2007, and since then the concentration of greenhouse gases in the atmosphere has risen to around 400 parts per million (the ‘safe’ boundary being 350 parts per million), risking high temperatures and sea levels, droughts and floods and other catastrophic climate problems. The research echoes a recent debate over whether the Earth has moved from the Holocene epoch to a new one scientists are calling the Anthropocene, named after the substantial effect mankind has had on the Earth’s crust. It’s not all doom and gloom though. “Ours is a positive, not a doomsday, message,” Rockström insisted. He is confident that we can step back within some of the boundaries, for example through slashing carbon emissions and boosting agricultural yields in Africa to soothe deforestation and biodiversity loss. “For the first time, we have a framework for growth, for eradicating poverty and hunger, and for improving health,” he said.

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